B U S I N E S S

Worst not over yet: RBI
New Delhi, April 27
Warning that the worst may not be over yet, Reserve Bank Governor D Subbarao has said the global economic recession may not only continue through 2009 but could prolong to the next year as well.

Credit flow to MSMEs picks up in March
Chandigarh, April 27
Three stimulus packages announced by the government over the past four months have finally started yielding results. The credit flow leading to the micro, small and medium enterprises (MSMEs), housing and auto loan, which had virtually come to a standstill, has picked up drastically in March.

‘IT sector may see over 1 lakh layoffs by Sept’
New Delhi, April 27
The Indian IT services sector may see up to five per cent layoffs — amounting to more than one lakh job cuts — over the next six months as companies focus more on cost-cutting due to persisting weakness in global demand, experts say.

A cyclist rides past a construction site billboard depicting blue sky and greenery in Beijing on Monday. Two-thirds of US companies operating in China expect to benefit from a huge stimulus package unveiled by Beijing to counter the global crisis, a US business association said, in a 2009 report on the state of US business released by the American Chamber of Commerce in China. — AFP

In this file photo, a worker dusts off the Chrysler 200C EV concept car at the Washington Auto Show in Washington, DC. The United Auto Workers said on Sunday it had reached a tentative deal with Chrysler and Italian giant Fiat and the US Treasury, clearing a major hurdle to bolster the US automaker's viability. — AFP

GM to slash 21,000 US jobs
Detroit, April 27
General Motors Corp on Monday announced plans to slash plants, hourly workers and dealers and to eliminate its Pontiac brand in an effort to meet government demands for a quicker and deeper restructuring.

India to miss export target: Assocham
New Delhi, April 27
Industry chamber Assocham has forecast a minimum 10 per cent decline in exports during fiscal 2009-10 in the backdrop of continued demand constriction in overseas market, especially in the US, EU and UK.

Rupee tumbles 43 paise
Mumbai, April 27
The Indian rupee tumbled by 43 paise to 50.23/24 against the dollar today on hectic demand from oil companies for the US currency, which was strong overseas.

Corporate Results
Tech Mahindra posts profit of Rs 230 cr
Bangalore, April 27
Tech Mahindra Ltd, which is taking over Satyam Computer Services in a deal worth about $580 million, on Monday reported net profit of Rs 230 crore ($46 million) for the March quarter.

Gold demand slips on Akshaya Tritiya
New Delhi, April 27
High prices deterred gold buyers from shopping on Akshaya Tritiya day, considered auspicious for buying any long-term assets, a bullion expert said.

RIL resumes crude oil output from KG-D6
New Delhi, April 27
After having shut production for a month, Reliance Industries has restarted crude oil production from KG-D6 block. The company, it is learnt, was connecting new wells in the basin. Reliance stopped crude oil production form the Krishna Godavari block, popularly known as D-6, from March 22 to add more wells to raise the crude oil output.

22 FDI proposals cleared
New Delhi, April 27
The government has cleared 22 proposals, including those of Yamaha and Nokia, that will bring in Rs 541.25 crore of foreign direct investment (FDI) into India.

Railways to start taxi service
New Delhi, April 27
Getting to railway stations may just get easier with the railways deciding to offer taxis at the door steps of passengers on dialling 139.

• Jaypee Group to invest 10k cr

Worst not over yet: RBI

RBI Governor D Subbarao has called for a quick and internationally coordinated approach to "a daunting, but not an insurmountable challenge”

New Delhi, April 27
Warning that the worst may not be over yet, Reserve Bank Governor D Subbarao has said the global economic recession may not only continue through 2009 but could prolong to the next year as well.

"Even with current levels of policy intensity, the trough of the global recession is not seen until the end of 2009 and could get pushed out further if the policy responses fail to gain traction," Subbarao said at the International Monetary Fund-World Bank spring meetings.

Leading the Indian delegation to the International Monetary and Financial Committee meet in Washington, he said India was expected to grow at 6.5 to 6.7 per cent in 2008-09, and the real GDP growth for 2009-10 would be about 6 per cent.

A statement by RBI further quoted Subbarao as saying, "The most frequently asked question today is whether the worst is behind us. While there are incipient signs of business confidence and consumer spending trying to gain toehold, rising unemployment, high inventories and financial stress weigh heavily on overall demand conditions," Subbarao said.

The RBI's policy response was aimed at containing the contagion from the global financial crisis while maintaining comfortable domestic and forex liquidity as it launched three fiscal stimulus packages apart from other measures, he said.

"The combined impact of these fiscal measures is about three per cent of GDP. Through the Reserve Bank's actions (rates cut), the cumulative amount of primary liquidity potentially available to the financial system is about seven per cent of the GDP," Subbarao stated.

However, he said, several challenges such as implementing the fiscal stimulus packages, revival of private investment demand, maintaining the flow of credit while ensuring credit quality, and preserving financial stability were still left.

Calling for a quick and internationally coordinated approach to "a daunting, but not an insurmountable challenge", he stressed on empowering IMF's capacity to grapple with the crisis. He also suggested a radical shift within IMF in tune with the changing world.

"While the recession has intensified in the advanced economies, emerging economies have been dented by the collapse in external demand and commodity prices, the tightening constraints on access to external financing and the retrenchment of capital flows." Asking for India's greater voice and representation in the Fund, Subbarao also said, "We call for the introduction of an open, merit-based process, irrespective of nationality and geographical preferences, for the selection of the senior management of the Fund." — PTI

Credit flow to MSMEs picks up in March
Ruchika M. Khanna
Tribune News Service

Chandigarh, April 27
Three stimulus packages announced by the government over the past four months have finally started yielding results. The credit flow leading to the micro, small and medium enterprises (MSMEs), housing and auto loan, which had virtually come to a standstill, has picked up drastically in March.

Information made available by the State Level Bankers’ Committees of Punjab and Haryana and the standing advisory committee on SME of the RBI, has revealed that new working capital limit of Rs 1,102 crore has been given to 3,339 units in March alone, while incremental credit to the tune of Rs 354 crore was given to 873 units. As many as 1,126 MSME accounts were restructured with an amount involving Rs 7,378 crore.

During March alone, as many as 5,199 housing loans worth Rs 729 crore, and 5,068 auto loans worth Rs 457 crore were sanctioned. The credit off take in March has brought some relief to the banking sector and the Reserve Bank of India (RBI), which feel a change was reeling under excess liquidity. “This good credit off take in March shows that the economy is trying to come back on tracks,” said a senior RBI official, adding that the credit off take in March alone is equivalent to the credit off take between December 2008- February 2009 - the time during which the three stimulus packages were announced.

With the recession taking its toll on the economy, banks had remained flush with funds even as the recession-hit MSME sector remained unwilling to avail credit. With orders drying up in export as well as domestic market and all expansion plans on hold, these MSMEs had little demand for credit.

Officials in SLBC said the proactive steps taken by the government and the RBI had led to increased flow of credit to MSMEs and in retail banking. “Banks were asked to dispose of applications on time and each bank branch has been asked to open five new SME accounts in all urban and semi-urban areas per annum. We are also urging banks to have more specialised SME branches. All these steps have ensured that credit off take begins to take place in MSME sector,” the official said.

‘IT sector may see over 1 lakh layoffs by Sept’

New Delhi, April 27
The Indian IT services sector may see up to five per cent layoffs — amounting to more than one lakh job cuts — over the next six months as companies focus more on cost-cutting due to persisting weakness in global demand, experts say.

Companies may reduce workforce in this fiscal, mostly based on stringent performance criteria, experts added.

"We expect the knowledge industry (IT) to see 3-5 per cent non-voluntary exits in the first two quarters of the financial year mainly in senior and middle levels," Deloitte Touche Tohmatsu senior director (management consultancy services) P Thiruvengadam told PTI.

Given the fact that more than 22 lakh people work in the IT industry, five per cent non-voluntary exits would mean more than one lakh employees being shown the door by September.

Nasscom estimates more than 22 lakh people were working in the Indian IT-BPO sector in FY2009 (till February), while indirect job creation is estimated at about eight million. — PTI

GM to slash 21,000 US jobs

Detroit, April 27
General Motors Corp on Monday announced plans to slash plants, hourly workers and dealers and to eliminate its Pontiac brand in an effort to meet government demands for a quicker and deeper restructuring.

The new viability plan was announced as GM filed plans for an exchange of $27.2 billion of bonds with the US Securities and Exchange Commission, warning that it would seek bankruptcy protection if the offer did not receive sufficient interest.

GM said the new plan called for deep cuts by the end of 2010: reducing the number of US plants to 34 from 47, slashing the US hourly workforce by about 21,000 to 40,000 and cutting its dealer network to 3,605 from 6,246.

GM, which last week took $2 billion of emergency US government loans to bring its total to $15.4 billion so far, was told by the Obama administration in late March that it had to dig deeper and move faster for continued support.

The automaker plans to focus on four core brands in the United States — Chevrolet, Cadillac, Buick and GMC — and phase out the Pontiac brand by the end of next year. — Reuters

India to miss export target: Assocham
Tribune News Service

New Delhi, April 27
Industry chamber Assocham has forecast a minimum 10 per cent decline in exports during fiscal 2009-10 in the backdrop of continued demand constriction in overseas market, especially in the US, EU and UK.

In its preliminary assessment on ‘Export Targets Vs Reality’, the chamber is of the view that in the US alone, nearly 60 per cent fall in export proceeds of India have been witnessed in 3rd and 4th quarter of fiscal 2008-09.

Likewise, the scenario in EU and UK would remain so in the current fiscal and therefore India needs to be realistic as far as its export targets are concerned. The trade ministry had set export target of $200 billion for current fiscal. It is likely that the total export proceeds on realistic basis would not be more than $160 billion. It may be mentioned here that in fiscal 2008-09, the export proceeds brought India revenues to an extent of $170 billion.

The sectors that will remain under severe stress in 2009-10 because of their demand constrictions overseas include sectors such as textiles, handicrafts, carpets, leather, gems & jewellery, marine products, including spice exports. Textile sector which is a major revenue earning source will continue to face technological upgradation as sufficient funds are unlikely to be allocated for it.

Job losses will continue to take place in the sector and it will face much more competition from neighbouring countries such as Pakistan, Sri Lanka etc. which will squeeze its competitive edge in economies of scale especially EU, US and Asean, including Latin America.

According to Assocham, the corporate sector expects the period of downturn in the economy to go on until January 2010 and it is only after that the economy will start bouncing back and the fiscal packages announced by the government will start paying dividends to Indian Inc.

The last quarter of the current fiscal will bring in maximum earnings to India through exports as by then, revival will have taken place in saturated market for creating demand for Indian products.

Rupee tumbles 43 paise

Mumbai, April 27
The Indian rupee tumbled by 43 paise to 50.23/24 against the dollar today on hectic demand from oil companies for the US currency, which was strong overseas. After an appreciation of 65 paise or 1.29 per cent in the past three days, the domestic currency dramatically fell and breached the 50 level as oil refiners heavily bought dollars for their monthly import payments in the light of easing global oil prices.

The rupee traded in the range 49.90-50.31 at the Interbank Foreign Exchange (forex) market after resuming weak at 49.97/99 a dollar from its last weekend's close of 49.80/81 a dollar.

Global crude oil prices fell in Asian trade today as concerns on the world economy continued to dampen energy prices.

Forex dealers said there was fairly heavy month-end dollar buying by oil companies while equity markets remained volatile before ending in the green.

The dollar in overseas markets firmed up, exerting pressure on the local currency, even as capital inflows into equity showed signs of picking up. — PTI

Corporate Results
Tech Mahindra posts profit of Rs 230 cr

The company, a provider of information technology services to the telecoms industry, had reported a loss of Rs 221 crore in the same period last year after it accounted for one-time expense of Rs 440 crore.

Exide to pay 60% dividend

Battery manufacturer Exide Industries today said it has reported a 8.52 per cent rise in net profit at Rs 68.20 crore for the fourth quarter ended March 31, 2009.

The total income rose marginally to Rs 801.13 crore during the March quarter from Rs 796.36 crore in the same period a year ago. The board has declared a dividend of 60 per cent at the rate of Re 0.60 on shares of face value of Re one, for FY'09.

Indian Bank net up 63%

State-run Indian Bank today reported a 63.06 per cent growth rate in net profit at Rs 394.07 crore for the fourth quarter ended March 31, 2009.

The total income rose 28.43 per cent to Rs 2,148.48 crore during the March quarter from Rs 1,672.85 crore in the corresponding period a year-ago. The board had declared a dividend of 50 per cent at the rate of Rs five on shares of face value of Rs 10 for FY'09.

Jaiprakash Associates

Infrastructure player Jaiprakash Associates Ltd today announced an 83.12 per cent jump in net profit for the fourth quarter ended March 31, 2009, at Rs 385.32 crore.

Its total income from operations jumped 59.94 per cent for the quarter at Rs 2,151.67 crore.Total income from operations for the corresponding quarter last fiscal was Rs 1,345.28 crore.

OBC profit Rs 197 cr

Oriental Bank of Commerce today posted a net profit of Rs 196.82 crore in the fourth quarter ended March 31, 2009, while it had a net loss of Rs 99.44 crore in the same period last fiscal.

The total income rose 30 per cent to Rs 2,689.38 crore during the March quarter from Rs 2,071.01 crore in the corresponding period last fiscal, OBC said in a statement.

The board has declared a dividend of 73 per cent, on shares of face value of Rs 10, for the financial year 2008-09.

BoB net up 3-fold

Public sector lender Bank of Baroda today reported nearly three-fold growth in net profit at Rs 752.69 crore for the fourth quarter ended March 31, 2009.

The total income rose 28.50 per cent to Rs 4,992.41 crore during the March quarter, from Rs 3,885 crore in the corresponding quarter last fiscal. The board has declared a dividend of 90 per cent, at the rate of Rs nine on shares of face value of Rs 10, for FY'09.

Petronet LNG

Petronet LNG, the nation's largest liquefied natural gas importer, today said it has reported a 70.24 per cent growth in net profit at Rs 204.35 crore for the fourth quarter ended March 31, 2009.

The company's total income rose to Rs 2,654.88 crore in the March quarter from Rs 1,752.65 crore in the corresponding year-ago period. — Agencies, TNS

Gold demand slips on Akshaya Tritiya

New Delhi, April 27
High prices deterred gold buyers from shopping on Akshaya Tritiya day, considered auspicious for buying any long-term assets, a bullion expert said.

"The gold demand on the festival is down by 50 per cent from previous year. The rise in prices of the precious metal has dampened the spirit of buyers," Bombay Bullion Association's President Suresh Hundia told PTI from Mumbai.

Last year on Akshaya Tritiya, gold prices were ruling at Rs 13,000 per 10 gram, which have now gone up by 15.38 per cent to Rs 15,000 per 10 gram, he said.

"As per the market reports, there are footfalls in big showrooms with some jewellery demand for marriage purpose.

However, consumers buying gold especially for the occasion of Akshya Tritiya is very less," Hundia said.

"Five-six tonnes of gold coins were sold on Akshaya Tritiya, last year. Looking at high price trend, it would be less this year," he said, adding as some buying is still happening in the city, final sales figures for today would be compiled only late in the evening.

Hundia further said the demand would have revived had gold prices been below Rs 14,000 per 10 gram.

Currently, gold prices are ruling at Rs 15,030 per 10 gram, up by almost 1 per cent from previous day at Rs 14,890 per 10 gram. — PTI

RIL resumes crude oil output from KG-D6
Tribune News Service

New Delhi, April 27
After having shut production for a month, Reliance Industries has restarted crude oil production from KG-D6 block. The company, it is learnt, was connecting new wells in the basin. Reliance stopped crude oil production form the Krishna Godavari block, popularly known as D-6, from March 22 to add more wells to raise the crude oil output.

According to sources in Directorate General of Hydrocarbons, the company will ramp up the production slowly and gradually. The output is expected to rise to 40,000 barrels per day (bpd) before the end of April- June quarter.

The MA field was producing about 18,000 bpd of oil from three wells when it was closed. Three more wells have been hooked up during the planned shutdown period.

The field was producing a couple of thousand barrels per day on restart but would quickly ramp up to 20,000 barrels per day (bpd) in a day or two.

The MA field in KG-DWN-98/3, or KG-D6 off the Andhra coast, began pumping oil on September 17, 2008, had produced 7,90,000 barrels of oil till December 9 when output ceased due to equipment failure.

It had resumed production in early March after the three month shutdown. Reliance is the operator with a 90 per cent stake in the 7,645 square km D6 block in Krishna Godavari basin. Niko Resources of Canada holds the remaining 10 per cent interest.

22 FDI proposals cleared

Railways to start taxi service

New Delhi, April 27
Getting to railway stations may just get easier with the railways deciding to offer taxis at the door steps of passengers on dialling 139.

The service would be offered at competitive tariff rates, said a senior Railway Ministry official. The ‘book a taxi’ service would be rolled out soon in about 25 cities across the country, including the national capital.

“The aim of the service is to help passengers get rid of their woes in fetching a taxi and pay the actual charge incurred,” he said.

The round-the-clock enquiry service 139 is a call centre number, run by IRCTC, to which passengers can make calls and seek information about PNR status, arrival/departure of trains, seat availability and fare and accommodation.

In the near future, one can even book a hotel dialling 139. The official said if the ‘book a taxi’ service yields good response, the facility would be extended to smaller towns.

Passengers would also have a choice to pick the cab of his choice, he said.

The service will be directly monitored by IRCTC so that passengers get taxis on time and do not end up paying more. The official said all taxis will be fitted with radio meters that will be connected to the call centre. — PTI

Jaypee Group to invest 10k cr

New Delhi, April 27
Diversified business house Jaypee Group today said it would invest Rs 10,000 crore in the current fiscal to ramp up its power, infrastructure and cement verticals.

"We have earmarked a capital expenditure of Rs 10,000 crore for three verticals of the Jaypee Group for the ongoing fiscal," Jaypee Group executive chairman Manoj Gaur said. — PTI