It was a bad week for the rupee. India’s currency took a beating for the first three days of the week only to make a modest recovery on Thursday and Friday. All in all, the rupee was down about 1.7% for the week at 55.37 to the US dollar. This was the eight straight week of decline for the rupee.
Moving on, the troubles in the world economy are taking their toll on India. The services sector is expected to benefit from a weak rupee. But global uncertainty has cut into demand. Provisional data from the Reserve Bank shows services exports increased just 4% in the last fiscal to about $137 billion. Meanwhile, the import of services fe@ll 3.8% to $81.1 billion. The new figures are the worst in a decade with the exception of the 2009-10 period. IT industry lobby group Nasscom says onsite and offshore exports grew a total of more than 16% during the fiscal to about $70 billion.
And in other news, the UPA government has finally bitten the bullet and delivered the pain. On Wednesday, state-run oil companies announced a dramatic hike in petrol prices. Excluding sales tax or Vat, petrol prices across India are up by Rs6.28 per litre. Government-owned fuel marketing companies took losses of nearly 5,000 crores last fiscal because they sold their products at below-market prices.
And switching to telecom, BhartiAirtel could soon get a head start in the upcoming battle for wireless data services in India. On Thursday the company announced it would acquire a 49% stake in Qualcomm India’s broadband venture. Under the deal, Airtel will buy a 26% stake currently owned by two Indian firms. The remaining 23% will come from fresh equity. All in all, the deal will be worth about $165 million. And Airtel is slated to take on the existing debt of $1-1.2 billion only after 2014. BhartiAirtel’s acquisition will allow it to offer broadband services in major telecom circles like Delhi and Karnataka.