Week in Review for 15 January 2010

Week in Review for 15 January 2010

India’s headline inflation figures shot up last month. The wholesale price index rose 7.31% in December, reaching a 13-month high. In November the index rose just 4.78%. Despite the spike in inflation, analysts and bankers have told Mint current inflation does not justify a rate hike by the RBI. This is because wholesale inflation has, to a great extent, been pushed up by food inflation. And the RBI’s monetary policy is unlikely to have much impact on rising food prices.

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On Wednesday, the government announced several measures to contain the rise in food prices. It plans to import sugar at zero duty until the end of the calendar year. And it’s going to sell 2-3 million tonnes of wheat and rice in the open market. The government has also asked state-run trading firms to import more pulses.

Figures released on Tuesday showed India’s industrial production grew 11.7% in November compared to a year earlier. This is the highest growth in 25 months.

Two major private sector banks announced their third quarter results on Friday. HDFC Bank saw its net profits shoot up 31.7% to Rs819 crore in the quarter to December.

Axis Bank also did well. Its net profits for the third quarter went up 31% to reach Rs656 crore, up from Rs501 crore in the same period last year.

Two of India’s top IT companies also unveiled their results this week. India’s second largest software company Infosys saw its third quarter profits fall 3.6% to Rs1,582 crore, though the figures were actually better than what some analysts had expected.

The government has decided to auction just three slots of 3G spectrum instead of four. As part of the new plan, even places like Delhi, that had less spectrum to auction, will have three slots to put on the block. Analysts say that government is unlikely to lose overall revenue from the auction because of this uniformity. Last year, the government had decided on auctioning four slots and raising Rs25,000 crore.

Reliance Industries Limited once again raised cash for a possible acquisition of Lyondell-Basell. On Monday, RIL sold 33 million treasury shares, raising $763 million. The move brings the total amount RIL has raised in the last four months to about $2 billion.

India’s armed forces may not be equipped to deal with the threats of today. A new report from consulting firm KPMG and the Confederation of Indian Industry says at least half the country’s defence equipment is obsolete and needs to be upgraded. The report also calls on India’s government will have to support local firms making products for the armed forces.

And here are some news stories in brief. India’s exports shot up December with overseas shipments increased 18.2% to reach $14.6 billion, the highest it has reached in 14 months.

India’s struggling airline industry had something to cheer about on Wednesday. Airline regulator DGCA released figures that show nearly 44 million passengers flew in 2009 compared to less than 41 million in 2008, an increase of 7.5%.

Environment minister Jairam Ramesh plans to hold public meetings across India to scientists, farmers’ organisations and others that are opposed to the genetically modified crop, BT Brinjal. The government approved the use of BT Brinjal last year.

A new study suggests drug resistant strains of the HIV virus are more likely to be transmitted than previously thought. Writing in the American magazine Science, the authors of the study say organisations like the WHO will now need to rethink their strategies for dealing with HIV.