The worst may be over for the economy, and growth may rise to 6 per cent in 2013-14 from this year’s estimate of 5 per cent, the lowest in a decade, the Economic Survey has predicted.
Traditionally presented on the eve of the Union Budget, and prepared under the supervision of the Government’s Chief Economic Advisor, the Survey has projected a growth rate of up to 6.7 per cent for 2013-14. It was tabled by Finance Minister P. Chidambaram in the Lok Sabha on Wednesday.
Interestingly, the previous (2011-12) Economic Survey projected a growth rate of 7.6 per cent with a quarter percentage point deviation on either side. However, within 10 months, the Government , itself lowered the projection to five per cent, an estimate the Finance Minister had questioned earlier, reigniting the debate on the process of estimating growth.
In the introduction, the current Chief Economic Advisor to the Government, Raghuram Rajan, wrote: “These are difficult times, but India has navigated such times before, and with good policies it will come through stronger. Slowdown is a wake-up call for increasing the pace of actions and reforms.”
Read more: Business Line
Dip in inflation makes case for rate cut
With wholesale price inflation moderating and the government’s fiscal situation expected to improve, there is room for further interest rate cuts by the Reserve Bank of India (RBI), according to the Economic Survey released today.
“There has been some moderation in inflation in the third quarter (October-December) of 2012-13 and with the expected fiscal consolidation, the current macroeconomic situation creates room for a somewhat accommodative monetary policy,” said the Survey.
With a moderation in non-food manufacturing and global commodity prices, the headline Wholesale Price Index (WPI)-based inflation may be 6.2 to 6.6 per cent in March, said the survey. India’s WPI inflation fell to 6.62 per cent in January, the lowest since December 2009. It was 7.18 per cent in the previous month.
In its third-quarter monetary policy held on January 29, the central bank cut the repo rate, or the rate at which it lends money to banks, by 25 basis points (bps) to 7.75 per cent. It was the first rate cut since RBI reduced repo by 50 basis points in April last year. Analysts expect the central bank to loosen its monetary policy in the coming quarters if inflation remains low.
Read more: Business Standard
Rupee may remain weak
Conflicting pulls resulted in the rupee turning volatile over the week. But it ended almost flat at 54.09 against the US dollar compared to 54.06 last week.
On the one hand, safe haven demand for the dollar saw the rupee weakening to 54.63 on Thursday, and on the other hand, expectations of a positive Budget for the currency saw it strengthen to 53.86 on Monday.
The Government cut its market borrowing by Rs 12,000 crore in its bid to rein in the fiscal deficit this year at 5.3 per cent of GDP.
A hung parliament in Italy led to the weakness in the Euro. The Euro-USD cross fell to a low of 1.3018 on Tuesday. The common currency is down 2.4 per cent against the USD over the week.
Meanwhile, the dollar index strengthened around 1.7 per cent over the week to 81.726 compared to 80.468 last week.
The rally in the dollar was on the back of investors shifting towards the safety of the greenback following signs of weakening global growth.
Read more: Business Line
Commercial Real Estate
IT companies drive office space demand
Information technology (IT) companies continue to rent and even buy office space in relatively cheap properties that are being constructed away from traditional commercial hubs even as the sector’s profit growth has slowed because of weak demand in its main markets in the US and the UK.
In Mumbai, for instance, the IT services sector has even overtaken the historically dominant financial services sector in office occupancy as office space has expanded beyond south Mumbai, Bandra Kurla Complex and south central Mumbai, according to a February report by real estate consultant Jones Lang LaSalle (JLL).
In 2009, the BFSI (Banking, Financial services and Insurance) sector occupied 48% of total ‘grade A’ office space but more than halved to 21% in 2012. The IT sector, on the other hand, saw its occupancy grow 22% in 2012 compared to 15% in 2011, according to the report.
IT companies are the driving force behind the trend, the report said.
The JLL report states that IT companies are driving sales as demand for quality and affordable office space have been addressed over the past three years with the completion of quality office space in the suburbs and the satellite cities of Thane and Navi Mumbai. Absorption in the city’s suburbs accounted for 1.45 million square metres in 2010, 2011 and 2012 together, which is double (0.71 million square meters) that of the absorption of office space in the island city in the same period.
Read more: Mint
Emphasis on metro rail projects may benefit infra companies
Shares of infrastructure companies like L&T, Siemens and Reliance Infrastrucre are likely to benefit with Railway Minister Pawan Kumar Bansal’s roadmap on metro rail projects.
In his budget speech, the minister said construction of metro system in Kolkata from Dum Dum to Noapara is scheduled to be completed by March 2013. Works on the MUTP Phase II, announced in the last budget, are also progressing satisfactorily.
“The construction of East-West Corridor in Kolkata, which is underway, will be taken forward,” he added.
Bansal also announced the first AC EMU rake on Mumbai suburban network in 2013-14.
At 02:00 pm, L&T was down 2.28 per cent, Siemens fell 1.28 per cent and Reliance Infrastructure slipped 2.25 per cent.
Read more: The Economic Times
Budget 2013: NRIs could do with quick introduction of Real Estate Bill
Will Budget 2013 see India come out of its policy paralyses? One sure wishes so. For long now, Non Resident Indians (NRIs) have faced a major pain point in real estate transactions.
This sector in India has not always been easy to deal with. Common complaints include the developers’ demand for cash, delays in completion of projects, developers not delivering on promises and the sub standard quality of construction. And for NRIs who have spent a large part of their lives in developed systems, these pain points can be quite overwhelming. So naturally, a speedy introduction of the Real Estate Bill would make NRIs a happier bunch.
The bill is touted to be pro-consumer and some of the key points include:
> a Real Estate Regulatory Authority in each state by the appropriate government (Centre for the UTs and state governments for states), with specified functions, powers, and responsibilities to facilitate the orderly and planned growth of the sector
Read more: The Economic Times
Indian Americans: What not to forget while filing US taxes
Tax Day is only 2 months away. As you get ready to file your tax returns by the due date of April 15, here are some important things Indian Americans should remember:
If you are a US resident or US citizen (whether NRI, PIO or OCI), you must pay taxes in the US on your global income.
A US resident includes a Green Card holder as well as someone who has been physically present in the United States on at least 31 days during 2012, and 183 days during the 3 year period that includes the 2012 and the 2 years immediately before.
To satisfy the 183 days requirement, count all of the days you were present in the current year, and one-third of the days you were present in the first year before the current year, and one-sixth of the days you were present in the second year before the current year.
Global income in the context of your India investments will include:
– Any salary partly received in India – Any income received in India for freelance or consulting work – Interest on bank deposits and other securities held in India – Dividends from shares and mutual funds – Capital gains from sale of assets – Rent from property – Agricultural income
Read more: The Economic Times
Gurgaon industrialists demand revision of new pollution norms
Industrialists in Udyog Vihar are seeking a revision of the new pollution control norms, which were announced earlier this year. The pollution board’s new move to make consent-application grant more convenient for the industry comes with a caveat of heavy penalty slabs for defaulters. The issue was raised again at a seminar on pollution control, organized for an interaction between industry owners and the senior officials of the district pollution board.
“The pollution norms need to be reviewed keeping with the changing technology and the changing times,” said an industrialist from Udyog Vihar. According to the new policy of the board, industry owners can now submit applications for their annual consent-to-operate certificates on the department’s official website. Under the new rules, those failing to meet deadlines might now be charged a penalty of 50-100% extra on the original consent fee, which ranges from Rs 25,000 to Rs 1,50,000 annually.
Read more: The Times of India