The Mint Report 10 May 2010

The Mint Report 10 May 2010

Some of India’s energy subsidies may be on their way out. India has submitted a plan to the G-20 on cutting its more inefficient energy subsidies. Member countries of the G-20 don’t have to stick to a single definition of energy subsidies. But India’s new plan is expected to create the framework for the debate on petroleum subsidies. Subsidies are likely to be rationalized by linking local prices of petroleum products to global crude oil prices.

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India’s auto companies have put the pedal to the metal. Domestic cars sales zoomed ahead 39.5% to 143,976 units. Sales including exports accelerated 37% to181,455 units. The spike in sales was driven by new small car models including Ford’s Figo and General Motors’ new offering in India, the Chevrolet Beat.

Trucks and buses have done even better. Sales of commercial vehicles accelerated 65% in April to 49,086 units. Sales of trucks are usually an indicator of economic growth. But freight owners may also be buying more of them to avoid higher price tags. Truck prices are expected to go up after new emission standards are implemented nationwide on 1 October.

Markets rebounded on Monday after last week’s nerve-racking free fall that shaved a full four point five percent off the Sensex. News of the $1 trillion rescue package for Greece sent global stocks soaring. And the Sensex took the cue, rocketing up 561 points to close at 17,331. The Nifty also shot up, gaining 176 points to end the day at 5,194.