Observers may have expected to see new faces in the much-awaited cabinet reshuffle, but there was no major overhaul. Those elevated to cabinet rank include Beni Prasad Verma, who’s now got the top job at the steel ministry where he previously was minister of state. The Trinamool Congress will retain the Railways with Dinesh Trivedi taking over. And Jairam Ramesh will become the new rural development minister.
Ramesh was India’s high profile and controversial environment minister. His replacement is Congress party veteran Jayanthi Natarajan, who’s widely expected to show more flexibility.
There were no surprises among those ousted. Murli Deora lost his corporate affairs portfolio. And Dayanidhi Maran, who had already offered his resignation, was removed from the textiles ministry. Maran’s job will be taken over by Anand Sharma, who will also retain the commerce portfolio. Another minister keeping his post is Kapil Sibal, who’ll retain the HRD and telecom ministries.
Moving to earnings, India’s two biggest IT firms reported their first quarter results during the week. And neither fared very well. Both Infosys and Tata Consultancy Services posted declines in profits on a sequential basis. At the heart of the problems of the software industry is uncertainty. Kris Gopalakrishnan, the outgoing CEO of Infosys said that while customer hadn’t slashed their budgets, it was unclear how much they’d actually be willing to spend this year.
Here’s how the two companies did in three months to June. Infosys’ first quarter profits declined 5.3% sequentially to Rs1,722 crore. Revenues climbed 3.2% to Rs7,480 crore.
TCS meanwhile posted earnings under IFRS standards instead of the US GAAP system it previously used. The company reported a point 0.02% fall in net profit to Rs2,380 crore. That was despite a 6.3% rise in revenue to Rs10,797 crore.
Fresh numbers on India’s economy came out during the week, and the news isn’t good. While the industrial output has remained low in May, inflation has been stubbornly high in June. The index of industrial production for May stood at just 5.6%. That’s against the revised figure for April of 5.8%.
New data out on Thursday showed inflation had accelerated in June, though not as much as some economists had feared. The wholesale price index for the month increased 9.44%. In May the index went up by 9.06%. The inflation and industrial output numbers are the last major macroeconomic data to come out before the Reserve Bank reviews policy rates on 26 July.