The Indian federal government Wednesday eased rules governing overseas borrowing, hoping to ease borrowing by local companies and spur capital inflows.
In one of the most significant elements of the change, the government raised by 50% the limit on rupee loans that infrastructure and manufacturing companies are allowed to refinance through overseas borrowings.
Such companies will be able to refinance these loans by up to 75% of their average foreign-exchange earnings over the past three years, up from the previous limit of 50%, the finance ministry said.
Companies importing capital goods for use in the infrastructure sector will also not require government permission to raise overseas loans to refinance existing loans.
The measures are designed to boost investment in the country’s creaky infrastructure, which by some estimates cuts about two percentage points from India’s annual economic growth.
Read more: The Wall Street Journal
Growth may be back on track next year, says RBI
The positive intent shown by the government recently on key reforms such as foreign direct investment in key sectors such as insurance, retail, aviation and urban infrastructure seems to have enthused the country’s central bank.
In its annual report released on Thursday, the Reserve Bank of India (RBI) said while the economic growth scenario was still gloomy, there was a ray of hope that growth would pick up later in the year. That hope, of course, hinges on how fast the government delivers on its promises.
RBI Governor Duvvuri Subbarao said the government’s promises made in August 2012 should result in growth picking up by the end of the financial year and return to the trend rate in 2013-14. Subbarao, who was appointed by the new finance minister, P Chidambaram, in September 2008 when the country was fighting the contagion of the global financial crisis, will demit office after one year.
“The government in August 2012 has promised to take several steps to address macroeconomic weakness. As these steps materialise, growth could gradually start improving later this year and the trend growth can be restored next year,” the RBI said in its annual report. For 2012-13, the RBI projects 6.5 per cent economic growth while inflation is expected to stay sticky, around seven per cent.
Read more: Business Standard
Noida circle rates increased by 10-25%
Delhi/NCR: Barely a month after it increased circle rates in Noida and the rest of the district by 10 to 20%, the administration on 22nd August announced another rate revision of 10- 25%. The Gautambudh Nagar administration said the second hike was necessary to bring circle rates on a par with prevailing land and property rates in the city, after the land rate hike of 7.5-15% announced by the Noida, Greater Noida and Yamuna Expressway authorities on July 25.
Circle rate is the minimum rate at which a property can be bought or sold. These rates are fixed by the government to prevent buyers and sellers from paying less stamp duty by showing very low values of property deals. The district administration has granted approval to the revised rates. District magistrate MKS Sundaram said that the new rates will be applicable across the district from August 22 and all properties in the district will be registered at the new circle rate henceforth.
Read more: The Times of India
Construction of country’s biggest mall to be completed by 2016: DLF
NEW DELHI: DLF is set to build India’s largest mega mall, a 4-million square feet promenade in Gurgaon, that’s being touted as the country’s answer to the huge malls that are coming up in China.
India’s largest real estate builder will invest Rs 2,000 crore on the project, which compares with the world’s largest 7-million sq ft New South China mall in Dongguan and is bigger than the 1.5-million sq ft Great India Place mall in Noida – the largest mall in India, a senior official at DLF, who did not wish to be named, said.
The mall was originally planned in 2005 to be completed by 2007 when it would have been the largest in the world, but it was put on the back burner as demand waned. Since then quite a few big malls with 6-7 million sq ft area have come up in China.
“By then, the rapid metro for Gurgaon and DLF’s new 16-lane road would also be operational, feeding traffic into the new mall,” said the official. A station on the new rapid metro will be integrated with the mall to bring in footfalls. The mall is being planned as a large retail district with a combination of open and indoor spaces.
Read more: The Economic Times
Power reforms vital for fast India growth
NEW DELHI: Prime Minister Manmohan Singh’s claim this month that the economy will grow more than 6.5% in the 12 months to March will be severely tested given the dismal state of the country’s power infrastructure, highlighted by the two widespread blackouts in July that left more than 700 million people without power.
Manmohan, who is also finance minister, said the economy will grow “a little better” than the 6.5% achieved in the 2011/12 fiscal year. He was speaking after the grid failures, the worst anywhere in history, swept 20 states and left trains, hospitals, offices, commercial establishments and traffic lights without power.
The lights may be back on now, but the underlying weaknesses remain. The problem relates to increasing gaps between supply and demand and a failure to institute much-needed reforms in the electricity generation and coal production sectors. These include passing on the full cost of power to end-users, and increasing the incentive for investment in the power industry.
Read more: Asia Times
Centre plans roads to connect Kutch villages
NEW DELHI/AHMEDABAD: They might not feel “left out” any more.
People residing in far flung parts of Kutch close to the Indo-Pak border have something to cheer. The central government has drawn up plans to connect 1,124 “left out” rural habitations on the country’s borders with roads and bridges including strategically important ones along China and Pakistan.
Union Cabinet has given “in-principle” approval for the Rs 3,600-crore project to be implemented in states of J&K , West Bengal, Punjab, UP, Assam, Uttarakhand, Manipur and Gujarat under rural roads programme, Union rural development minister Jairam Ramesh said on Wednesday.
In Kutch and Banaskantha districts alone there are several villages like Sui Gam, Khavda, Lakhpat, Kala Dungar, Guneri and Cher. Agencies These parts of Gujarat have poor or no connectivity to other parts of the state.
There are no less than 250 similar habitations and villages across the country. The central government communique has said that these villages which were left out under Pradhan Mantri Gram Sadak Yojana, will now be covered under the scheme in the states bordering countries like Nepal, Bangladesh and Myanmar.
Read more: The Times of India
Airlines concerned about 49% FDI cap: Lufthansa’s Hilgers
Lufthansa German Airlines’ south Asia director, Alex Hilgers, says global airlines have raised concerns over India’s proposed liberalisation of foreign direct investment in aviation, questioning the 49 per cent cap that would not give them a majority control over domestic carriers.
They have also raised issues pertaining to the level of government intervention they might face in the country even after they enter. In an interview with Business Standard, Hilgers talked about the concerns raised by global airlines at an IATA (International Air Transport Association) conference in Beijing in June 2012. “The issue is that 49 per cent is not enough. There are still doubts as to can I do what I want to do with 49 per cent?” he said.
Saying there were also concerns about government intervention, Hilgers added, “I think the guy who comes wants 51 per cent and not 49 per cent and he wants certain freedom from the government side.”
Lufthansa has just launched Boeing 747-8 flights from Delhi to Frankfurt. It’s the second market in the world where the aircraft has been deployed by the airline, which says the yields in India have gone up substantially this year and so have the load factors. “Our yields have gone up by five to 10 per cent over last year and we are operating from India at 90 per cent load factor in the last six months. The inbound load factors are also balanced this year. We need to operate at 80 per cent load factor to make money,” says Hilgers. The airline will start its second Boeing 747-8 flight from Bangalore in a new business class.
Read more: Business Standard
Parking rates across Delhi colonies may differ
NEW DELHI: Indefinite parking at Metro or DDA parking lots at low rates is set to end. Delhi government, in a first, is planning to make parking rates uniform in the city.
“It was agreed that all agencies engaged with the business of parking such as MCD, DDA, NDMC and DMRC should have a common parking rate,” said a senior government official. The proposal, which was discussed in the meeting held on parking at the LG’s office last week, is expected to be adopted soon.
The good news is that the meeting also saw the Delhi government agree “in principle” not to convert green areas into parking spaces. “Parking should not be constructed under public parks/greens and the MPD2021 will be amended accordingly,” added the official. The decision comes after a spate of projects being launched by the MCD wherein parks were to be converted into parking lots or multi-level lots were being planned on being built under the park.
Read more: The Times of India