India Inc employees can expect a dismal average salary hike of just 10.3 per cent in 2013, the lowest salary hike in a decade barring 2009, according to the annual salary increase survey of HR consulting firm Aon Hewitt. Reflecting the growth expectations of 5 per cent, India Inc. has projected an average salary increase of 10.3 per cent for 2013, according to the survey.
The survey is based on responses from 518 organisations across 20 industries. Financial services, technology, outsourcing have seen the greatest volatility and remain cautious in 2013. Consumer and industrial sectors which so far have been resilient, also reported conservative increase projections in the survey.
Sandeep Chaudhary, Partner – Talent & Rewards at Aon Hewitt India said in a statement “In sync with the economic outlook,10.3 per cent increase is among the lowest the country has seen in a decade (barring the subprime crisis year). Though business sentiment is strengthening on account of inflation reaching a three year low and stock markets rising upwards, the cautious streak is evident in the projected salary increase numbers”.
Read more: The Economic Times
India Inc optimistic ahead of Budget
Ahead of the Budget, Indian corporations have turned optimistic on business conditions in the coming months. According to the quarterly Business Confidence Survey for the third quarter of 2012-13 by the Federation of Indian Chambers of Commerce and Industry, there is an expectation of higher sales and profits in the first half of calendar year 2013.
The Business Confidence Index was at 61.2 in the third quarter, much better that 57.7 during the corresponding period in 2011-12. However, the index slipped a shade downwards from the 62.4 in the previous survey. A similar survey by the PHD Chamber of Commerce and Industry said the long-run prospects of business in the country seemed bright as majority of corporations had plans to expand their businesses in the next three years. According to the survey, 80 per cent of the respondents said they were positive on expanding their businesses.
Also, 21 per cent of respondents firms’ capacity utilisation lies within 50 per cent to 70 per cent, whereas 64 per cent of the respondents observed their capacity utilisation lied within 70 to 90 per cent. “Though the economic situation continues to be difficult and business sentiment remains weak, we will be pro-growth and give a renewed thrust to capital formation,” Ficci president Naina Lal Kidwai said.
Read more: Business Standard
Housing ministry to revise real estate Bill
The housing ministry will revise the Real Estate (Regulation and Development) Bill after builder lobby groups said a clause in the proposed legislation wasn’t practical.
The ministry is reconsidering a clause requiring builders to use 70% of the money collected for a project for that project to avoid delays, and may lower the limit, said Ajay Maken, housing and urban poverty alleviation minister.
The ministry had received representations against this requirement from the Confederation of Real Estate Developers’ Associations of India (Credai) and the National Real Estate Development Council.
“We want that money collected from buyers by a builder for a project should not be diverted to other projects so that there are no delays,” Maken told reporters on Wednesday.
The Bill seeks to establish a regulatory body for the real estate sector to ensure transparency in property or real estate transactions and protect consumers. A revised version is likely to be presented before the cabinet shortly.
The regulator will also vet agreements between buyers and builders to ensure the developer fulfils all the conditions mentioned in the agreement, Maken said. “We have provisions of penalties and stringent punishments in case of delays by the builder as a part of the Bill,” he said. The housing minister said the aim was not to add another layer of clearance and that registrations by builders with the regulator will be voluntary.
Read more: Mint
Will budget offer a remedy for the creaking infrastructure?
The Gross Domestic Product (GDP) is likely to grow 5.5 per cent and the economic slowdown shows no sign of halting. India’s infrastructure is bursting at the seams, unable to cope with the pressure from the growing economy. Spurring infrastructure growth will help to create jobs, result in higher economic growth and fuel entrepreneurship.
Over the years, the government took a conscious decision to involve the private sector in infrastructure development nationwide. However, the UPA government, hit by a slew of scams and suffering from a policy paralysis and red-tapism, has failed to calibrate the policies to the changing needs to build a sound infrastructure. This has caused the sector to grow haphazard.
What hamper infrastructure growth are lack of policy direction, absence of proper regulatory mechanism and lack of proper financing instruments to facilitate smooth operations for stakeholders. As the country enters the 12th Five Year Plan (2012-17), intending to spend around $1 trillion, industry players reckon that the coming Union budget should rather focus on holistic and total development of industry than on a piecemeal approach as in the past.
The budget, to be presented on February 28 by Finance Minister P. Chidambaram, could give the much-needed direction and lay out policy measures for building infrastructure in an economy that is growing and promises to grow at a faster clip.
Read more: The Hindu
Overseas investors bullish on infra debt funds: Kochhar
Infrastructure debt funds are expected to attract huge investor interest in overseas markets, given a marked improvement in economic sentiments here and a low-interest rate environment abroad, ICICI Bank chief Chanda Kochhar has said.
Evolution of infrastructure debt funds (IDFs) as key financing vehicles for the infrastructure sector is also expected to ease the pressure on the banking system, Kochhar told PTI in an interview.
“The improvement in sentiment during the last few months and the continued FII flows in both debt and equity lead us to believe that the IDFs will be successful in raising offshore funds,” said Kochhar, who was here yesterday for the launch of India Infradebt Ltd, the country’s first IDF under NBFC model.
Infradebt has been set up with an equity capital of Rs 300 crore (about $55 million) with four major financial institutions as its promoters. While, ICICI group holds the highest stake at 31%, other promoters are Bank of Baroda (30%), Citi (29%) and LIC (10%).
The Fund can provide funding to the tune of up to $2 billion after roping in debt investors from India and abroad.
Read more: My Digital FC
Is the crisis over for power sector?
Has the power sector managed to break free from the many constraints on its growth?
Consider that the country is set to witness its second-highest capacity addition in a year, of 17,500 Mw this financial year, after adding 20,500 Mw in 2011-12. For comparison, China has of late been adding around 25,000 Mw annually.
Thermal power generation (three-fourths of total power output), has jumped nine per cent to 631 billion units (BUs) in 2012-13, after growing at an average of less than six per cent annually in the earlier Plan period (2007-12).
The country’s power deficit has come down to nine per cent from 11 per cent last year, as the coal stock position at a number of thermal power stations has been pulled out of the danger zone. The number of stations running at critical stocks — sufficient to sustain operations for less than seven days — has been brought down from 44 in February 2012 to 35 now.
The industrial output data validates the sector’s upward growth trend, pointing to its emergence as one of the economy’s better performing areas. While overall industrial output increased merely 0.7 per cent, pulled down by a dismal manufacturing growth of 0.7 per cent and shrinking of mining output, the electricity sector grew 4.6 per cent between April and December 2012.
Read more: Business Standard
AirAsia, Tata plan budget airline
Less than two months into his tenure as Tata Sons chairman, Cyrus Mistry on Wednesday made his first big move. Tata Sons decided to invest in a three-way joint venture with AirAsia, the largest discount carrier in Southeast Asia by fleet size, and another Indian investor, Arun Bhatia of Telestra Tradeplace, to establish a Chennai-headquartered budget airline.
The move comes 18 years after Mistry’s predecessor Ratan Tata’s failed attempt to set up an airline with Singapore Airlines in the face of strong opposition from some leading domestic private airlines. The Tatas still hold 1.98 per cent stake in SpiceJet, down from 5.82 per cent in 2007.
While AirAsia will hold 49 per cent stake in the JV — the maximum permissible under the FDI rules — the Tata group would have 30 per cent; the rest would be held by Bhatia.
Read more: Business Standard