The Mint Report for 12 July 20111 min read . Updated: 12 Jul 2011, 11:15 PM IST
The Mint Report for 12 July 2011
After all the high expectations about new faces, Prime Minister Manmohan Singh’s latest cabinet reshuffle was something of a dampener. He removed ministers accused of corruption or poor performance. But there are few big changes and even fewer young faces in his new team. 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. Jairam Ramesh was of course, India’s high profile environment minister. His replacement is Congress party veteran Jayanthi Natarajan. She’s expected to be a more flexible environment minister and her appointment has already been welcomed by industry.
There were no surprises among those ousted. Murli Deora lost his corporate affairs portfolio and Dayanidhi Maran, who had already offered his resignation, lost the textiles ministry. His job will be taken over by Anand Sharma, who will also retain the commerce ministry. Another minister keeping his post is Kapil Sibal, who’ll retain the HRD ministry and will hold telecom as an additional charge.
New figures show industrial output slowed down in May. The index of industrial production for the month stood at just 5.6%. The revised figure for April was 5.8%. Tuesday’s numbers already have policymakers concerned. Finance minister Pranab Mukherjee said the IIP was not encouraging. He said the government was already working out new policies that would increase productivity in manufacturing. Last month authorities switched to using a new base year of 2004-05 for the IIP instead of the old 1993-94 base. Going by the old base, industrial output in May was 3.6%.
One of India’s iconic IT firms has opened the earnings season for the industry on Tuesday. Infosys posted a decline in net profits on a sequential basis. First quarter profits declined 5.3% compared to the previous quarter to Rs1,722 crore. Revenues meanwhile climbed 3.2% to Rs7,480 crore. Part of the challenge for Infosys comes from client spending. Kris Gopalakrishnan, the outgoing CEO, said that while customers weren’t slashing budgets, actual spending remained uncertain. Not surprisingly, Infosys kept its guidance unchanged, which then spooked investors. Shares of the firm tumbled 4.27% on the BSE to 2,794 on a day overall markets also fell.