India’s rating outlook stable: Moody’s

A neighborhood at Ireo Waterfront, Ludhiana

India’s sovereign rating outlook is stable, ratings agency Moody’s Investors Services said on Tuesday.

Moody’s stable outlook is based on expectations that India’s structural strengths — a high household savings rate and relatively competitive private sector — will ultimately raise the GDP growth, it said in its annual credit analysis report on India.

The report is an update to the markets and does not constitute a rating action.

The ratings agency expects India’s GDP growth rate to go up from around 5.4 per cent in 2012-13 to six per cent or higher in 2013-14, with the higher growth accompanied by improved fiscal and balance of payments metrics.

Moody’s forecast is underpinned by the assumption that, over the next year, there will be a cautious reduction in monetary policy rates and further measures to revive investor sentiment.

Read more: Business Line

Growth may recover to 6.1% in 2013: Morgan Stanley

India is expected to register a gradual recovery in the growth rate to 6.1% in 2013 driven by positive impact from policy actions and acceleration in farm output growth, says a report by Morgan Stanley. The country’s growth rate would witness gradual recovery considering the “challenging” environment due to high fiscal deficit, high rural wage growth and declining private investments amid a still lacklustre external demand, the report said.

“We, thus, expect only a gradual recovery in growth to 6.1% in 2013 from 5% in 2012, driven by some positive impact from policy actions by the government and acceleration in farm output growth from a low base,” the report said.

Morgan Stanley said that the bad growth mix of high fiscal deficit, high rural wage growth and declining private investment, needs to be addressed to revive growth in a sustainable manner.

Moreover, managing macro stability indicators such as inflation and the current account deficit will be difficult, unless the government initiates a reduction in its expenditure growth and brings rural wage growth lower.

Read more: Business Line

Transportation

Roadways to deploy traffic inspectors on 12 bus routes

Apart from introducing new routes. Haryana Roadways plans to make the service more efficient.

In order to keep tabs on the functioning of the city bus services, Haryana Roadways has decided to deploy two traffic inspectors at each of the starting and destination point of the 12 bus routes. Officials said they were receiving various complaints of irregularities in the service.

A meeting in this regard was held on Wednesday which was attended by the roadways general manager, Yashender Singh, and inspectors. Singh said 40 inspectors would be deployed for this purpose. Their job will be to keep tabs on the routes. A formatted form has been given to them where they will have to mark which driver missed how many trips. Delay in completing trips will also be mentioned, added Singh.

Sources said in the absence of any system of checks and balances, many drivers were skipping their duties. Complaints of irregular frequency are the most common ones.

At present, as many as 80 buses are running in double shifts from 6am to 11pm on 12 routes. The roadways department has planned to increase the bus fleet to 150 by March next year and introduce many more routes in the city bus service.

Read more: The Times of India

Air India appoints global real estate consultant: K C Venugopal

Air India has appointed a global real estate consultant to examine its properties in India and abroad to raise Rs 5,000 crore over 10 years through monetisation of assets as part of its financial restructuring plan, Rajya Sabha was informed today.

“Air India has appointed a global real estate consultant to examine its properties in India and abroad and to suggest a roadmap for the monetisation of the same. The consultant is in process of identification of the properties,” Minister of State for Civil Aviation K C Venugopal said in a written reply.

As per its approved Financial Restructuring Plan (FRP), Air India is required to raise Rs 5,000 crore over a period of 10 years through asset monetisation, he said.

In reply to a separate question, the Minister said loans taken by Air India as on July 31, 2012 total Rs 47,226 crore and there was no proposal in the Ministry to waive these.

Read more: The Economic Times

Banking

Revamp of fund managers’ fee will boost new pension system, says regulator

Yogesh Agarwal, PFRDA Chairman (left) with Ashish Kumar Chauhan, MD and CEO, Bombay Stock Exchange, at the Assocham National Conference on Pension Funds in the Capital on Tuesday. — Ramesh Sharma (Business Line)

The pension fund regulator, PFRDA, expects greater acceptance of the new pension system (NPS), consequent to the recent revamp of the fee structure for pension fund managers.

The Pension Fund Regulatory and Development Authority (PFRDA) has fixed the fee ceiling for fund managers at 0.25 per cent of assets under management.

This is higher than the earlier fee level of 0.0009 per cent, which was considered inadequate and a loss-making proposition for fund managers.

With a revamped fee ceiling, it is expected that fund managers would walk the extra mile in promoting NPS and enabling better accessibility for private subscribers.

NPS had been designed to harness the existing distribution channels of banking, insurance and capital markets.

But the experience so far has shown that NPS has not been able to take advantage of the existing network mainly due to differences in the compensation structure for distributors.

Read more: Business Line

Land Acquisition

Industry-friendly provisions in the new Land Acquisition Act can help restart investment and push growth

Land acquisition has emerged as a critical constraint in India’s industrialisation, given pressures on limited land mass for multiple uses. Against this backdrop, review of the archaic Land Acquisition Act in the country could not have come at a more appropriate time. GDP forecast for the current Five-Year Plan (2012-17) has recently been lowered to 8.2%, and with grim economic forecasts for the current fiscal year, industry is on a lookout for stimulus to raise the growth momentum beyond 9%. Providing impetus to the manufacturing sector is even more pertinent for creating necessary jobs. It is, therefore, imperative to streamline the land acquisition mechanism in the country in a manner that balances the interests of affected families with industry affordability.

In this context, it is heartening to note that industry has been included in the definition of ‘public purpose’ in the proposed Right to Compensation, Resettlement, Rehabilitation and Transparency in Land Acquisition Bill, 2011, and government would help industry in land acquisition.

Government should play a prominent role in land acquisition as agglomerating land from numerous owners is not a task that the corporate sector can do effectively, especially in the absence of proper land records and with small, scattered land holdings.

Read more: The Economic Times

Market

Sensex rallies nearly 300 points on FDI hopes & cues from global peers

Sensex closed near day’s high led by gains in realty, FMCG and banks on the back of positive cues from global peers. The support of allies to the government over FDI in retail also boosted sentiment.

The 30-share index ended at 18,831.98, up 294.97 points or 1.59 per cent. It touched a high of 18,862.70 and a low of 18,616.55 in trade today.

The Nifty closed at 5,725.80, up 89.90 points or 1.60 per cent. The broader index touched a high of 5,733.20 and a low of 5,658 in trade today.

The BSE Midcap Index was up 1.13 per cent and the BSE Smallcap Index moved up 0.88 per cent.

Among the sectoral indices, the BSE Realty Index rallied 3.21 per cent, the BSE FMCG Index gained 2.19 per cent, the BSE Bankex moved 1.80 per cent higher and the BSE Metal Index was up 1.31 per cent.

Bharti AirtelBSE 5.22 % (4.33 per cent), Sterlite IndustriesBSE 3.56 % (3.20 per cent), HDFCBSE 2.79 % (2.93 per cent), HDFC BankBSE 2.69 % (2.72 per cent) and Hindalco IndustriesBSE 2.55 % (2.60 per cent) were among the major Sensex gainers.

Tata PowerBSE 0.05 % (0.29 per cent) and NTPCBSE -0.38 % (0.22 per cent) were the only index losers.

The market breadth was positive on the BSE with 1,701 gainers against 1,179 losers.

See article: The Economic Times

NRIs

How NRIs can use insurance products

Indians have spread to virtually every part of the globe and have made their mark. But as an Indian living abroad, it makes good financial sense to make investments back home.Here is how an NRI can use insurance products to meet financial goals.

Let’s take Ashok, a 40-year-old NRI based in London. He works as a senior project manager in a software company. He has two children aged 5 and 9 years and his wife Asha is a home-maker.

His parents are retired and live in Pune. They have no source of income and rely on him for their regular expenses.

Ashok can build a portfolio of insurance products that can help address the following important financial goals — life cover for the financial security of his family; provision for his children’s education; regular guaranteed income for parents and wealth creation for himself and his spouse.

Life cover

Ashok has five dependents and therefore it is crucial that he is adequately covered. Pure term insurance plans are ideal for this purpose.

Currently, online term plans that are available are competitively priced and convenient to purchase.

A term insurance plan will ensure that Ashok’s family is financially secure and that their financial aspirations are not compromised in the unfortunate event of Ashok’s death.

Read more: Children’s Education (Business Line)

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