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Growth forecast lowered to 7.1 pc
New Delhi, February 9
India's economic growth is expected to slow down to 7.1 per cent in the current fiscal, the slowest pace in six years and down from 9 per cent in 2007-08, according to estimates released by the Central Statistical Organisation (CSO) today. 

Restructure loans to SMEs: RBI
Mumbai, February 9
With the economy slowing down, the Reserve Bank of India expects banks to show a sharp increase in non-performing assets (NPAs), particularly with regard to loans made to small and medium enterprises. The apex bank has now asked banks to restructure loans to SMEs in order to help them tide over the crisis. According to senior officials, the apex bank is also keen that norms governing NPAs be not tightened in the interest of prudent governance.

RIL seeks free oil pricing formula
New Delhi, February 9
Private sector oil major, Reliance Industries, is seeking free fuel pricing formula for its export-oriented unit located in Jamnagar. The reasons RIL is keen on free pricing are two: one, there is drop in demand for petroleum products in the international market, second the weakening of rupee against the dollar, making margins extremely thin for import of crude, processing it, and then re-exporting the products.

Nissan posts loss; to cut 20,000 jobs 
Tokyo/New Delhi, February 9
Hit by declining sales and the surging yen, Japanese auto-maker Nissan reported a net loss of 83.2 billion yen ($ 0.81 billion) for the third quarter ended December 31, 2008, compelling the firm to slash 20,000 jobs or about 8.5 per cent of its workforce.


A man takes a rest on a street in Beijing on Monday. As the world economy slows, large numbers of Chinese workers have lost their jobs as global demand for the cheap Chinese consumer goods they make has fallen off sharply, forcing thousands of factories to shut their doors
A man takes a rest on a street in Beijing on Monday. As the world economy slows, large numbers of Chinese workers have lost their jobs as global demand for the cheap Chinese consumer goods they make has fallen off sharply, forcing thousands of factories to shut their doors. — AFP 





Job losses in India may rise: Citi 
New Delhi, February 9
In an indication that the global layoff wave has hit the Indian shores, global financial services major Citigroup believes that jobless numbers in the country could climb in the coming months.

IT industry records ‘zero’ pc growth 
New Delhi, February 9
Even as major fraud hit Satyam Computer Services, there are alarm bells ringing in the Indian IT industry which is probably going through one of the worst downturns.

Air travel to cost more from IGIA
New Delhi, February 9
Passengers departing from the Indira Gandhi International Airport (IGIA) should get prepared to pay more, over and above their ticket costs. From March 1, departing international passengers will have to pay Rs 1,300 and domestic passengers Rs 200 as development charges over and above their ticket costs to Delhi International Airport Limited (DIAL).

Jet to trim expat pilots’ headcount
New Delhi, February 9
The country's largest private airline, Jet Airways, has firmed up plans to "phase out" some of its expatriate pilots and not fill other vacant positions in the ensuing months as part of cost-cutting moves.

H-1B visa curbs may not hit Indian firms
New Delhi, February 9
The amendment brought about in the US Senate for imposing restrictions on hiring of H-1B visa holders by American firms receiving federal bailout may not impact the Indian IT companies who survive on work being outsourced to them.

Tea industry seeks tax sops 
Guwahati, February 9
Faced with rising costs of inputs and prolonged low price realisation for the past few years, the tea industry has knocked on the doors of Assam government seeking a package of sops and tax relief in the next state Budget.

IDBI lends Rs 300 cr to Satyam
Mumbai, February 9
State-owned IDBI Bank has given a Rs 300-crore loan to the fraud-hit Satyam Computer.

India, B’desh ink trade pacts 
Dhaka, February 9
India and Bangladesh today signed two agreements to further cement their trade and investment ties as External Affairs Minister Pranab Mukherjee hailed the recent upward swing in bilateral relations.







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Growth forecast lowered to 7.1 pc
Bhagyashree Pande
Tribune News Service

New Delhi, February 9
India's economic growth is expected to slow down to 7.1 per cent in the current fiscal, the slowest pace in six years and down from 9 per cent in 2007-08, according to estimates released by the Central Statistical Organisation (CSO) today. The slowdown can be attributed to dismal performance of key sectors of the economy — manufacturing and agriculture — and India continues to be growing due to service sector growth.

The slow pace has increased expectations that the apex bank, RBI, will further cut rates so that the manufacturing sector, which is parched for funds, will get a momentum and the growth can be kept steady. Finance Secretary Arun Ramnathan indicated that the figures were optimistic and that there was a room for rate cut, though the bankers would have to take a decision in the matter.

However, the government is not relying on its laurels and is still keen on addressing the issue of manufacturing growth. This could be seen in the statement by Deputy Chairman of Planning Commission Montek Singh Ahluwalia, who said, “We can continue the fiscal stimulus in the next year. It can be done as part of the full budget. In my view there would be a continuing need for fiscal stimulus and I hope we can do that,” he said.

The growth rate of 7.1 per cent during 2008-09 has mainly been due to good growth rates of construction, hotels, transport and communication, financing, insurance, real estate and business services, and community, social and personal services. These service sectors have been growing at the rate of 5 per cent.

But, the fundamentals of the economy, the industrial and agriculture sector, which are the major employers and growth generators, continued to do badly. The estimates revealed that manufacturing output was expected to be around 4.8 per cent, as compared to 8.1 per cent in 2007-08. The agricultural output would expand by 2.6 per cent only, down from 4.9 per cent last year.

In the industrial segment, manufacturing sector is expected to grow by 4.1 per cent in 2008-09 as against 8.2 per cent last year. Construction sector will show degrowth of 6.5 per cent as against 10.1 per cent in 2007-08.

Industry body Assocham’s president Sajjan Jindal said the government should unveil the third stimulus package so that credit access to manufacturing was available between 7- 7.5 per cent. The package should also aim at across the board cut in excise between 4-6 per cent range as also rationalise anomalies on import and export front so that exports pick up and dumping is encountered. The budget deficit for the current year is expected to rise than its planned target of 2.5 per cent of gross domestic product.

However, there is a silver lining to the estimates, which suggest that the country's per capita income is expected to double over the last seven years to Rs 38,084 in 2008-09.

Per capita income, according to advance estimates for national income released today, is expected to grow by 14.4 per cent during the current fiscal, the highest growth rate recorded in a single year in the last decade.

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Restructure loans to SMEs: RBI
Shiv Kumar
Tribune News Service

Mumbai, February 9
With the economy slowing down, the Reserve Bank of India expects banks to show a sharp increase in non-performing assets (NPAs), particularly with regard to loans made to small and medium enterprises. The apex bank has now asked banks to restructure loans to SMEs in order to help them tide over the crisis.

According to senior officials, the apex bank is also keen that norms governing NPAs be not tightened in the interest of prudent governance.

Addressing a seminar here, RBI executive director Anand Sinha said banks should give more time to SMEs to pay their loans instead of labelling them as defaulters. Banks could provide enterprises in trouble by lengthening their repayment cycle, Sinha said. "There have been demands that NPA norms be relaxed. But rather than relaxing the NPA norms, we would like banks to restructure their loans by elongating the repayment cycle," Sinha said.

He added that falling interest rates would provide a cushion to borrowers. According to Sinha, the system was flush with liquidity as the apex bank has infused funds by measures like rate cuts and reduced cash reserve ratio. "RBI has taken both conventional and unconventional measures to increase liquidity in the system. Over a period of time interest rates would come down," Sinha said.

Simultaneous with lowering interest rates, the RBI is pushing for banks to increase disbursal of loans to corporates in order to help grow the economy.

The apex bank is pushing for banks to expand into rural areas in order to push for an all-inclusive economic growth of the country's economy.

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RIL seeks free oil pricing formula
Tribune News Service

New Delhi, February 9
Private sector oil major, Reliance Industries, is seeking free fuel pricing formula for its export-oriented unit located in Jamnagar. The reasons RIL is keen on free pricing are two: one, there is drop in demand for petroleum products in the international market, second the weakening of rupee against the dollar, making margins extremely thin for import of crude, processing it, and then re-exporting the products.

What is lucrative for RIL is that it sells petrol and other products from its domestic 1,400-odd outlets after its export-oriented unit status ends on March 31, 2009.

Defending the companies intention, RIL’s president, refinery business, P Raghvendran, said “we are not escaping from freeing petrol and diesel pricing, the rest of the world is allowing international crude oil prices to get reflected in retail prices," Raghavendran said at a seminar organised by Observer Research Foundation (ORF).

The reason why RIL has not been operating its petrol pumps in full throttle is that public sector oil pumps are selling products at much below the market price, which RIL is unable to do. The PSU pumps can afford to sell the products at low cost purely because of subsidies given to them, which RIL was also eyeing at one point in time.

The government has to let international oil prices be passed on to the consumers, he insisted.

RIL's 33-million tonne Jamnagar refinery had in 2007 converted into an only-for-exports unit (EoU) to avail duty-free import of raw material and exemption from payment of income tax in exchange for selling products overseas.

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Nissan posts loss; to cut 20,000 jobs 

Tokyo/New Delhi, February 9
Hit by declining sales and the surging yen, Japanese auto-maker Nissan reported a net loss of 83.2 billion yen ($ 0.81 billion) for the third quarter ended December 31, 2008, compelling the firm to slash 20,000 jobs or about 8.5 per cent of its workforce.

Further, the worsening state of the global economy and deterioration in global auto markets have led the company to forecast its first full year loss of 265 billion yen in nearly a decade for FY08 and projects net revenue of 8.3 trillion yen in the year.

The company had a net income of 132.2 billion yen for the December quarter in the FY'08, Nissan said in a statement.

"The loss is driven by the severe downturn in the global economy in the second half of calendar year 2008 and, in particular, the negative impact of the strong yen, the sharp decline in consumer confidence in all major markets and product mix deterioration," it added.

During the quarter, net revenue stood at 1.81 trillion yen, down 34.4 per cent.

Nissan has also announced recovery actions designed to enhance the company's performance during the current global economic and financial crisis.

"Global headcount will be reduced by 20,000 through FY 2009, reducing Nissan's headcount from 235,000 to 215,000", the car-maker said. — PTI 

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Job losses in India may rise: Citi 

New Delhi, February 9
In an indication that the global layoff wave has hit the Indian shores, global financial services major Citigroup believes that jobless numbers in the country could climb in the coming months.

According to a latest report by Citigroup, the country does not appear to have remain unscathed from the massive layoffs witnessed worldwide and unemployment could rise further with home coming of migrant workers.

"The pressure on employment, confidence and price levels would be more burdensome than in the past... Moreover, India could be impacted by the return of migrant workers or declining remittances," Citi India economist Rohini Malkani said in the report.

Citi further said that the Ministry of Labour has indicated that over 5,00,000 jobs were lost during October-December 2008, with export-oriented sectors such as gems and jewellery, autos, and textiles being most impacted.

However, the report stated that this statistic only covers the organised sector, which comprises just 10 per cent of the country's workforce of close to 385 million.

The report also said that with elections round the corner, job security could be one of the key election issues.

India's unemployment rate is officially at 8.2 per cent but the point worth noticing is that disguised employment exists in developing economies, it added.

On a sectoral basis, more than half the workforce continues to depend on agriculture, although it accounts for just 18 per cent of the Gross Domestic Product.

"While this has been on the downtrend, it has resulted in widening income gaps," Malkani said. — PTI

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IT industry records ‘zero’ pc growth 
Girja Shankar Kaura
Tribune News Service

New Delhi, February 9
Even as major fraud hit Satyam Computer Services, there are alarm bells ringing in the Indian IT industry which is probably going through one of the worst downturns.

Reports emerging from the market suggest that there has been a “zero” per cent growth in the sector over the past two quarters, which when compared to an average growth rate of 33 per cent over the past eight years has come as a major shock.

While the industry watchdog Nasscom earlier this month cut the growth rate for the industry from the earlier 21-24 per cent to 16-17 per cent, what has emerged is that there has been no growth over the past few months. This had, in fact, forced Nasscom to come out with the revised figures for the industry.

Industry insiders admit that the global slowdown has hit the Indian IT industry hard and with the US putting further restrictions on the H-1B visas, the going is set to become tougher.

The US Senate on Saturday passed an amendment whereby making it harder for the American companies to hire professionals with H-1B visa. Although, it was watered down version of what amendment was introduced earlier, but it would lead to a halt in growth of IT professionals.

This would mean that the US would not be able to import the best of the Indian brains in the IT sector and which has also been criticised by the experts.

Incidentally, this is not the first time that Nasscom has revised the growth rate for the industry. In August, after posting a growth of about 28 per cent, the Nasscom had said that the projected rate of growth for the industry for the next fiscal would be 21-24 per cent, clearly reflecting a slowdown.

However, earlier this month, it further revised the growth rate again to 16-17 per cent and said that there would also be a slowdown in hiring although there would not be any job cuts. The industry insiders agree that the slowdown has been more than what is presently being reflected. They expect growth to slow down even further next quarter as a result of large cuts in IT budgets.

The Nasscom has advised members to explore emerging and new markets to sustain the growth momentum and acquire domain expertise in new verticals, a clear reflection again on the present growth rate.

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Air travel to cost more from IGIA
Vibha Sharma/Tribune News Service

New Delhi, February 9
Passengers departing from the Indira Gandhi International Airport (IGIA) should get prepared to pay more, over and above their ticket costs. From March 1, departing international passengers will have to pay Rs 1,300 and domestic passengers Rs 200 as development charges over and above their ticket costs to Delhi International Airport Limited (DIAL).

The government today approved the levy of Development Fee (DF) on passengers departing from IGIA to its developer DIAL, which has Bangalore-based infrastructure major GMR and state-run Airports Authority of India as principal promoters.

DIAL has been mandated to upgrade and modernise the IGIA. The arrangement is designed to help the GMR-led consortium cover its running costs to modernise the airport and is expected to cover an estimated shortfall of Rs 1,827 crore. Officials say the decision comes in the wake of DIAL informing the Civil Aviation Ministry that it expected a substantial shortfall in implementing the Rs 8,975-crore plan.

The DF, being levied purely on an ad hoc basis, would be applicable for 36 months only and would be inclusive of all applicable taxes. As per the arrangement, DIAL would collect the amount, deposit it in a separate escrow account and use the fund for developing aeronautical assets, only under the supervision of the ministry and the AAI.

So far, the government has also approved User Development Fee (UDF) for new airports in Hyderabad and Bangalore, which are of a permanent nature. Domestic passengers pay Rs 375 to fly out of Hyderabad’s new airport, while international passengers pay a fee of Rs 1,000. Bangalore International Airport charges UDF of Rs 260 from domestic and Rs 1,000 from passengers bound overseas.

As far as IGIA is concerned, levy will be reviewed again after six months. Officials say the amount collected through DF would not in any case exceed the ceiling of Rs 1,827 crore. The ceiling amount would be exclusive of taxes, if any. The balance amount of Rs 1,250 crore received as shareholders advance (Rs 1,750 crore net of Rs 500 crore to be appropriated towards equity) would be retained by DIAL.

Any escalation of cost would be met from the amount so retained. In case the cost escalation is less than the retained amount, the ceiling amount of Rs 1827 crore would be reduced by an amount which is equal to the difference between the retained amount of Rs 1,250 crore and the amount representing project cost escalation beyond Rs 8,975 crore.

The government or the designated regulator will determine the final development fee, based on final cost estimates presented by the developer for which August 31 has been set as the deadline. The final fee will also be based on bids received for handing over parts of the airport property on lease to hospitality industry for projects like hotels and restaurants that are also expected to earn revenues for DIAL.

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Jet to trim expat pilots’ headcount

New Delhi, February 9
The country's largest private airline, Jet Airways, has firmed up plans to "phase out" some of its expatriate pilots and not fill other vacant positions in the ensuing months as part of cost-cutting moves.

The company will "phase out excess expatriate pilots" over the next few months. It will "not replace staff vacancies which arise due to staff attrition", according to reliable sources.

When contacted, a company spokesperson confirmed the airline's decision to trim foreign pilot headcount but declined to give the exact number to be phased-out. 
— PTI 

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H-1B visa curbs may not hit Indian firms
Tribune News Service

New Delhi, February 9
The amendment brought about in the US Senate for imposing restrictions on hiring of H-1B visa holders by American firms receiving federal bailout may not impact the Indian IT companies who survive on work being outsourced to them.

Nasscom president Som Mittal told reporters here, "From the reading of the provisions, it seems the impact is only on the people directly employed by the TARP companies. Outsourcing firms, including those from India, are seemingly not impacted".

However, the experts are still not sure and are of the opinion that the amendment would lead to best of the IT industry professionals being overlooked by the US firms and that it was just a way by which America was ensuring that those more intelligent than the locals do not enter the country.

Incidentally, the American Immigration Lawyers Association said the move is a disturbing step backwards leading to an era of employment protectionism.

The amendment Bill is yet to go through reconciliation in the House before it is enacted, he said.

He said a Nasscom delegation, which will visit the US to meet customers, analysts and government officials, is going to raise the issue to state how protectionism is not good for the global world.

The amendment being brought about would mean that the US companies that are receiving 'Troubled Asset Relief Program (TARP)’ funds will be deemed to be H-1B visa dependant. Of the total workforce, if 15 per cent staff carry H-1B visa, then they can be said 'dependant'.

The provisions should not be impacting those who are not under direct employment of these TARP companies. Only those who are directly employed by them are impacted. It does not extend to any partner, associate and so on working with these companies, Mittal said.

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Tea industry seeks tax sops 
Bijay Sankar Bora
Tribune News Service

Guwahati, February 9
Faced with rising costs of inputs and prolonged low price realisation for the past few years, the tea industry has knocked on the doors of Assam government seeking a package of sops and tax relief in the next state Budget.

In a pre-Budget memorandum submitted to Assam government, the Indian Tea Association, which is an organisation of leading planters of Brahmaputra and Barak valleys Assam, has mentioned that the crisis-ridden tea industry in Assam merits continued attention and measures from the state government to help it recouping accumulated losses and sustaining operations.

According to ITA official Dhiraj Kakoti, the industry has made request for some specific relaxation on different types of taxes imposed on it in the state of Assam having over 800 tea estates. The ITA has requested for increase in deduction of agricultural income tax on tea exports from the state to the level of Rs 6 per kg from the existing rate of Re 1 per kg.

In fact, the industry has asked for total withdrawal of agricultural income tax on tea in Assam as has already been done by governments in Tamil Nadu and West Bengal to provide relief to the industry. The ITA has mentioned that if the total withdrawal is not possible, the government of Assam should at least consider moratorium on agricultural income tax on tea for at least six years.

The industry has requested for amendment to Section 16 of the Assam Agricultural Income Tax Act, 1939, to allow carry forward of losses incurred in a particular year to subsequent six years in tune with provisions in the Central Income Tax Act.

The industry has asked for certain relaxation of VAT rates in respect of tea sold through Guwahati Auction Centre as well as on non-auction sale. It has also asked for reduction of VAT on furnace oil that is used in tea factories to 4 per cent from present rate of 12.5 per cent. Moreover, the tea industry, which is bound by the existing Plantation Labour Act to provide foodgrains and cereals at highly subsised rates to over 6 lakh tea workers and their families, has asked for a ‘zero’ VAT regime for purchase of such cereals and foodgrains from government allocations.

The tea industry has asked for downward revision of the recently revised land revenue rates for tea land in the state and requested the state government to make the revised rates effective from August 12 last year instead of July, 2003. The state government effected a 10-fold increase in land revenue to Rs 22 per bigha of land in Brahmaputra Valley and Rs 15 per bigha of land in Barak Valley. 

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IDBI lends Rs 300 cr to Satyam

Mumbai, February 9
State-owned IDBI Bank has given a Rs 300-crore loan to the fraud-hit Satyam Computer.

"We have given a Rs 300-crore loan to Satyam. The remaining Rs 300 crore has been offered by Bank of Baroda," IDBI Bank chairman and managing director Yogesh Agarwal said today on the sidelines of an Assocham seminar here.

The government-appointed Satyam board had recently said that it secured Rs 600-crore bank loans, which would help it fulfil its immediate fund requirements.

IDBI Bank's Board will take a decision on the sale of its Pune-based home loan subsidiary, IDBI Home Finance Ltd, (IHFL) by the end of this month, Agarwal said.

The lender's board, which met on January 23 to take a call on the IHFL sale, had deferred the decision, citing the need for more information about prospective buyers.

Three leading players have emerged as contenders for IHFL — Dewan Housing, Religare Enterprises and Tata Capital. — PTI 

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India, B’desh ink trade pacts 

Dhaka, February 9
India and Bangladesh today signed two agreements to further cement their trade and investment ties as External Affairs Minister Pranab Mukherjee hailed the recent upward swing in bilateral relations.

Mukherjee and Bangladesh Industry Minister Dilip Barua inked the Bilateral Investment Promotion and Protection Agreement which is expected to help a large number of Indian firms working on various turnkey projects here.

The Indian minister and Bangladesh Commerce Minister Mohammad Farukh Khan signed a Trade Agreement to further boost bilateral commerce which amounted to $3.631 billion for 2007-08. — PTI

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BRIEFLY

Mumbai
Inventus to invest in 15 Cos:
Venture capital firm, Inventus Capital, plans to invest in 15 companies this year, including a Bangalore-based healthcare management entity and a consumer Internet company, a top company official said. "We plan to seal the deal with the Bangalore company in about three weeks. The other deal is still in the discussion stage," Inventus Capital's managing director Kanwal Rekhi said here, though without divulging further details.— PTI

BEML bags Rs 1,672-cr order: Earth moving equipment major BEML on Monday said the company has bagged order worth Rs 1,672.50 crore for supplying 150 metro coaches from Bangalore Metro Rail Corporation Limited. Further, the company is also likely to get an additional order for 63 metro coaches for further expansion and extension of proposed metro lines in Bangalore city, the filing added.— PTI

Homesurance protection plan: Private insurance firm IDBI Fortis Life Insurance on Monday said it has launched its Homesurance Protection Plan. It is a mortgage-reducing term insurance plan that secures the policy holder irrespective of interest rate fluctuations, the company said in a statement here.— PTI

New Delhi
Avnet inks pact with IBM:
Technology giant IBM on Monday said it has inked a distribution pact with US-based Avnet Technology Solutions for selling IBM's software solutions in India. The distribution agreement enables Avnet and its channel partners to distribute IBM software, including its Tivoli Service Management and Information Management portfolio, IBM said in a statement.— PTI

Kolkata
Tata Capital to float NCDs:
Tata Capital Ltd, a wholly owned subsidiary of Tata Sons, would enter the capital market with the issue of secured non-convertible debentures (NCDs) to raise Rs 500 crore with an option to retain over-subscription of up to Rs 1,000 crore. Tata Capital managing director Praveen P Kadle said the NCDs would have an interest rate of 12 per cent per annum for annual and cumulative payment options, and 11.25 per cent on quarterly payment option.— PTI

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