The Tribune, Chandigarh, India

	Economy to turn around soon: FM New Delhi, June 10 Buoyed by better than expected economic growth last fiscal, Finance Minister Pranab Mukherjee today expressed hope that the economy, spurred by fiscal and monetary stimulus packages, would turn around soon. "I hope that the impact of various pro-growth measures would help turn around the economy soon. As a result of various measures announced by the government and RBI, today we are looking at our economy with a lot of hope," Mukherjee told the heads of PSU banks here. He said the last quarter GDP growth figure of 5.8 per cent and the annual growth of around 6.7 per cent for 2008-09 is a pointer towards this direction. Despite contraction in manufacturing output in the fourth quarter last fiscal, economic growth figures were well in the range projected by RBI — 6.5-7 per cent — and better than what many had forecast. The Finance Minister's remarks assumes importance as the Prime Minister had yesterday said India can grow at 8-9 per cent despite the global slowdown. Mukherjee also said, "The stock market also seems to be quite bullish. Prime lending rates of banks have come down to the range of 12-12.25 per cent as against 13.75-14.25 per cent six months back." The benchmark equity index Sensex has gained 56 per cent this calendar year to close at 15,466.81 points today. The government, has so far, given three stimulus packages by cutting excise duty by six per cent, service tax by two per cent and increasing public expenditure apart from taking other sector-specific measures. Besides, RBI also loosened money supply by cutting its policy rates to make funds available to the industry at a cheap rate. RBI had cut short term lending rate (Repo) by 4.25 percentage points, short term borrowign rate (Reverse Repo) by 2.75 percentage points and mandatory cash requirements for banks (CRR) by four percentage points. "The unwinding of earlier tightening measures and the relaxation in risk weights and provisioning norms facilitated flow of credit to the sector under stress," Mukherjee said. — PTI
	Asks banks to cut lending rates Tribune News Service New Delhi, June 10 Finance Minister Pranab Mukherjee today asked banks to cut interest rates and provide cheap credit to industry in order to spur economic activity. He said the reduction in key rates by the RBI is not "adequately (getting) reflected in the reduction of BPLR (benchmark prime lending rates) of banks". He was addressing the chiefs of public sector banks here. “This is an area of concern in many quarters, both within the government and outside,” he added. “I would urge the banks to address these concerns expeditiously and in adequate measure. As a financial intermediary, the banks have to stand by to provide credit at reasonable rates,” he said. The concern within the government is that the rapid expansion of credit is required so that the economy remains buoyant. The FM said: “Expansion of credit at a lower interest rate will help restore the environment for rapid growth. The government will ensure that credit growth of the public sector banks will not suffer for want of capital”. He said India faced many challenges on the economic front, but stimulus measures taken by the government and central bank would help push growth. “Our role is to provide an enabling environment for the business to flourish by way of various pro-growth policy announcements,” Mukherjee said. “Any consolidation initiative in the banking sector would be viewed positively and would be supported by the government as a majority shareholder,” he said. “The government is also looking at strengthening the banks in light of what has happened in the West. The process of consolidation of banks may be necessary to improve the state of competitiveness of Indian banks globally,” he stated. He said the government would recapitalise public sector banks to improve their capital-to-risk ratio, but said it was up to bank management to decide on any mergers. Meanwhile, country’s largest bank, State Bank of India’s chairman, O P Bhatt, said today they would decide on cutting rates by the end of June. The SBI chief also said it was looking at growing through acquisitions and will start by taking over its associate banks. SBI has six associate banks, including State Bank of Travancore, State Bank of Bikaner and Jaipur and State Bank of Mysore. Public banking sector grew 26 per cent in 2008-09 as private and foreign banks were squeezed for credit.
	Excess liquidity should be withdrawn: RBI Mumbai, June 10 Warning that managing volatility in capital flows is a challenge, Reserve Bank Deputy Governor Rakesh Mohan today prescribed quick withdrawal of excess liquidity from banking systems in advanced nations to prevent recurrence of global financial crisis. "Abundant liquidity, if not withdrawn quickly, runs the risk of inducing the same excesses and imbalances that were witnessed during 2003-07," Mohan said in a paper prepared for the financial stability review of Bank of France. When the global economic recovery starts, "a calibrated exit from this unprecedented accommodative monetary policy will have to be ensured to avoid the recurrence of the financial crisis being experienced now," Mohan said. Excess liquidity could also take the form of large capital flows to the emerging economies, including India, and their likely recycling back to advanced economies, he said. The volatility in capital flows has led to severe problems, Mohan said, adding, "excess flows, sudden stops and reversals have significant effects in EME financial sectors, the working of their capital markets, asset prices and hence their economies as a whole." Management of this volatility remained a challenge, since there was little international discussion on this issue, Mohan said. The volatility management involved action in monetary policy, fiscal management, capital account management and also financial market regulation, Mohan said. Elaborating on the need of withdrawing excess liquidity, he said, monetary policies have been loosened substantially in major advanced economies since the second half of 2007 in response to the financial crisis. Policy rates have been cut to near zero levels, even lower than that in 2003-04 and the financial systems have been flooded with large liquidity, he said. — PTI
	Realty biggies enter rental housing scheme Shiv Kumar Tribune News Service Mumbai, June 10 Faced with a major slump in the real estate market, some of the biggest names in the real estate sector are looking at entering the home rental business to stay afloat. According to Mumbai Metropolitan Region Development Authority (MMRDA), some of the big names that have expressed interest in building homes for the rental segment include HDIL, Akruti City, Dosti Group, Nirmal Lifestyles Ltd, Dhanashree Developers and Matheran Realty. Last week, MMRDA has signed an agreement with HDIL to build 43,000 houses over the next several years that would be given out only on rent. The project, spread over 525 acres of land, would comprise small flats of an area of just 160 sq ft and come up in the suburb of Virar, now the last railway station on the Western Railway suburban network. "Beneficiaries would be drawn by a lottery and would be charged a rent of between Rs 800 and Rs 1,500 per month," Ratnakar Gaikwad, MMRDA commissioner said. The Maharashtra government has also made it mandatory that beneficiaries be residents of the state for 15 years or more in order to qualify for participating in the lottery. He added that people allotted the rental houses may stay in them for five years and move out afterward into bigger houses. "However, no one will be evicted at the end of five years," Gaikwad said. Explaining the details of the project, Gaikwad said the first lot of 10,000 flats would be ready by March 2011 and rented out by MMRDA. All 43,000 flats would be completed by 2015, according to MMRDA. HDIL, which bagged the project at Virar, will hand over the completed buildings to MMRDA for renting out to the beneficiaries. In turn, the company will be allowed to construct 90,000 flats for sale commercially. These flats would be larger and have one to two bedrooms each. According to Gaikwad, MMRDA would soon be signing agreements with other builders for similar projects. In all, around 15 or so projects would come up in Mumbai, Thane, Kalyan and other places that comprise the Mumbai Metropolitan region.
	Honda drives in Jazz New Delhi, June 10 Aiming for a double-digit growth this year in the Indian market, Japanese car giant Honda today forayed into the highly-competitive compact car segment here by launching its premium hatchback Jazz, priced between Rs 6.98 lakh and Rs 7.33 lakh (ex-showroom, Delhi). The company, which is present in India through a joint venture with the Siel Group, is also planning to launch another small car, positioning it below Jazz, in the country in the next 2-3 years. "In the past, we were focused only on the premium category, which comprises only 20 per cent of the 12 lakh units strong Indian passenger car market. With the launch of Jazz, we are now competing directly for the rest 80 per cent of the market also," Honda Siel Cars India (HSCI) president and CEO Masahiro Takedagawa told reporters here. He said HSCI's premium sedan City have been doing well since its new generation launch last year and sales of the car was up by up to 20 per cent in the first five months of 2009. "Last year was very tough time for us, but since the launch of new City, we have seen an improvement (in sales). Now, with the launch of Jazz, we are expecting a double-digit growth," Takedagawa said. HSCI had sold about 55,000 units last year. It currently enjoys about five per cent share in the passenger car market. "This (Jazz) is Honda's youngest car in India and will change HSCI's dimension in the country. With the launch of Jazz, we plan to create a completely different segment just below City," Takedagawa said. On sales target of the small car, he said the company expects to sell 2,000-2,500 units of Jazz every month. The Jazz, equipped with 1.2 litre Euro-IV compatible petrol engines, would be produced from the company's Greater Noida facility. — PTI
	Tata Tele to roll out GSM service New Delhi, June 10 CDMA telecom operator Tata Teleservices today announced the launch of its services in GSM platform in partnership with Japanese firm NTT DoCoMo and said would invest $2 billion by this fiscal to roll out operations across the country. The service, which would be branded 'Tata-DoCoMo', would be commercially rolled out towards the end of this month in the southern region, followed by western and northern regions. NTT DoCoMo acquired 26 per cent stake in Tata Teleservices (TTSL) for $2.7 billion last year. The company would be investing $2 billion in the operations, TTSL managing director Anil Sardana told reporters here. This is $0.5 billion higher than its earlier earmarked investment of $1.5 billion. Tata DoCoMo has received licences to operate GSM telecom services in 19 telecom circles and has also been allotted spectrum in 18 of these circles barring Assam, North East, Jammu and Kashmir and Delhi. "We are eagerly awaiting spectrum for Delhi and with reports of defence releasing some radio waves, we hope to lay claim on the spectrum," Sardana said. Asked whether, the Japaneses firm would increase its stake further in TTSL, Toshinari Kuneida, senior vice-president, global business, NTT DoCoMo said the company has no plans to raise its stake in the Indian JV. — PTI
	Satyam hits upper circuit again Mumbai, June 10 Satyam Computer today jumped 10 per cent, hitting its upper trading limit on the BSE for the second time in a row, a day after the scam-tainted IT firm reported a net profit of Rs 160.50 crore for December quarter, while its new owner Tech Mahindra surged over 5 per cent. Satyam ended the day at Rs 73.50, up 9.95 per cent from its previous close on the Bombay Stock Exchange. The stock opened the day by hitting its upper circuit. A similar trend was seen on the National Stock Exchange, where the scrip ended at Rs 73.50, up 10 per cent from last day's close. Over 47.80 lakh shares of Satyam changed hands on the two bourses. Tech Mahindra, the new owner of Satyam Computer Services, also witnessed a surge of over 5 per cent and settled the day at Rs 784.85 on the BSE. — PTI
	Samsung unveils solar-powered phone New Delhi, June 10 Electronics major Samsung today launched the world's first solar-powered mobile phone, priced at Rs 2,799 in the Indian market. The handset, 'Solar Guru' (Guru E1107) enables users to charge the battery using solar energy. "The Solar Guru has been developed keeping in mind the needs of Indian consumers, especially customers residing in areas where the electric supply is unstable," Samsung country head (mobile division) Sunil Dutt told reporters here. The handset has the capacity to provide around 5-10 minutes of talk time with one hour of solar charging. This is apart from the normal electric charging. It has other features like FM radio, MP3 ring tones, embedded games and torch light. "The handsets would be imported from Korea and will be available in the Indian market from the middle of this month," Dutt said adding that in the next few months, Samsung would also look at manufacturing the handsets from its facility in Noida. The company plans to extend the solar-power feature to its other handsets and would use the technology in its high-end phones as well. "We are looking at introducing Samsung Blue Earth in the fourth quarter of this calender year, which is a high-end touchscreen phone," Dutt said. Samsung Blue Earth is a a pebble-shaped, solar-powered touchscreen phone, which was showcased by the company at the Mobile World Congress 2009 in Barcelona.— PTI