Economic Highlights from February 11, 2011

India growth story strong, say fund managers
Economic Times

India, the world’s second-fastest growing economy, could further accelerate its pace if political governance improves and adequate investments are made in agriculture and education to unlock the demographic dividend New Delhi will enjoy over Beijing in the next two decades, participants at an investor forum said on Wednesday.

‘Chasing sustainable growth’ was the hot topic of discussion at the investor forum organised by Kotak Institutional Equities where more than 450 fund managers and asset allocators caught up with 100 company managements. Blue chips, such as engineering and construction giant Larsen & Toubro, the diversified Godrej Group and Coal India , are participating in the three-day event being held in Mumbai.

“The economy is doing very well,” Adi Godrej, chairman of the Godrej Group, said. “If transparency improves, we may see growth accelerating to 9% in the next fiscal year, I am very confident.”

US asks India to open up more sectors
The Times of India

US Commerce Secretary Gary Locke, who spoke at the concluding session of Nasscom Leadership Summit, has called for opening up of the Indian economy to improve trade relationship between the two countries. Gary was on his first visit to India after President Obama’s recent here. Locke called the partnership between the two countries a “partnership of equals”.

The US commerce secretary said, “For us to realize the full potential of economic co-operation, we hope India will address concerns of foreign businesses about its business environment. While tariffs have come down, there are factors like the 19% levy on civil aircrafts and the 26% levy on medical devices. There are other non tariff barriers like mandatory technology transfer requirement on telecom equipment, limited FDI in key sectors and inadequate IP protection.”

Govt working to improve financial inclusion: Finance Minister
The Hindu Business Line

The Finance Minister said the Government has targeted to cover at least 73,000 new habitations with a population of 2,000 and above, and open at least 5 crore new accounts by March 2012 under the Swabhimaan campaign.

He also highlighted that the phenomenal growth in bank credit to the agricultural sector has propelled growth in this sector and pointed out that the CSO has estimated agricultural growth at 5.4 per cent in the current fiscal, compared with 0.4 per cent growth in the previous fiscal.

Mr Mukherjee, however, noted that about 73 per cent of farmer households had no access to formal sources of credit.

BMW, Mercedes, Porsche, Audi fail to keep pace with Indian demand
The Economic Times

The luxury street is jammed with people waiting to drive away marquees such as Porsche Cayenne, BMW X1, Audi A8 and Mercedes S500, because carmakers are trailing speeding demand by up to six months.

Premium car sales in the country grew 70%, or at more than double the rate of the industry’s best expectation, in 2010 to 15,000 vehicles, throwing carmaker’s supply chain out of gear.

“While luxury carmakers stretched their best to meet the growth, demand far outstripped supply,” Mercedes Benz India sales and marketing director Debashish Mitra said.

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