The Mint report for 1 December 2009

The Mint report for 1 December 2009

New Delhi: Life Insurance Corporation wants a makeover. The government-run insurance company has short listed consulting firm Accenture to help it regain market share and grow faster. LIC remains India’s biggest life insurer by far with a total premium income of Rs157,000 crore in the last fiscal year. But in the last few years, private companies have been eating into its market share, which currently stands at 65%. LIC’s hoping Accenture will help it figure out if it’s going in the right direction and how it can optimize its distribution channels.

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Automobile sales have accelerated in November. Maruti, India’s biggest carmaker sold nearly 88,000 units, which is an increase of 67% compared to last year. Another carmaker, Hyundai Motor’s Indian arm, saw its sales go up 29% to more than 55,000 vehicles. And Hero Honda reported a 32% increase in its sales of over 381,000 units. TVS Motor sales also rose, going up 23% to about 121,000. One reason for the good numbers is the base effect. Auto sales plummeted last November in the aftermath of the economic slowdown, which also made it difficult for customers to get financing. But tax cuts for the auto industry and cheaper loans for customers have driven up sales since February.

India’s manufacturing output has risen again. The Purchasing Managers’ Index stood at 53 in November, the eight straight month of rise. Last month the index stood at 54.5. Any figure above 50 indicates growth.

Mahindra Satyam says it will expand its operations in Malaysia. The company plans to move more of its software development and delivery operations to its Malaysian centre, which employs some 500 full-time engineers.

Finance minister Pranab Mukherjee told Parliament his government would complete disinvestment in three government-run power companies within this financial year. The three PSUs are NTPC, Rural Electrification Corporation or REC and Satluj Jal Vidyut Nigam or SJVN.

The government has said a 5% stake will be offloaded from NTPC, another 5% from REC and 10% from SJVN. Mukherjee also told Parliament profit-making PSUs that had not divested at least 10% of their stake to the public would be made to do so.

Also on Tuesday, Pranab Mukherjee said food shortages were responsible for the current rise in inflation. Food prices have shot up in recent months after a weak monsoon earlier this year and floods in parts of the country. India’s food price index rose 15.6 for the period until the 14 November.