The chart shows that the median lending rate for home loans has fallen the sharpest in the five quarters to June (i.e. before the Reserve Bank of India, or RBI, tightened rates to stem the rupee’s depreciation). Home loans are secured loans, thus the risk premium that banks charge on these is not as high as compared with other sectors. Secondly, there is increasing competition in this sector with a raft of housing finance companies joining banks in chasing homebuyers.
On the other hand, sectors exposed to macroeconomic risk such as auto (primarily trucks) and small and medium enterprises (SMEs) have hardly seen lending rates budge. Thus, even if the overall base rate for banks had come down by a larger margin, lenders would have increased the premium on these advances, keeping in mind the increasing risk. Agriculture, which has seen a rising share of bad loans, too, falls in the same bracket.
The only puzzle seems to be the fall in credit card and education loan rates. The former is one of the fastest growing loan categories in recent times, with a 21.9% pace in 2012-13. That could also mean lower rates are driving volumes, in a bid to increase retail loans. RBI’s annual report, however, doesn’t shed any light on this issue.
Sebi allows 73 AIFs to operate in India
Market regulator Sebi has allowed 73 entities to set up Alternative Investment Funds (AIFs) — a newly created class of pooled-in investment vehicles for real estate, private equity and hedge funds — in the past one year.
The 73 AIFs have been registered with the Securities and Exchange Board of India (Sebi) since July 2012.
Sebi had allowed 49 AIFs to set up shop in the country till April, and the number has increased to 73 as of today.
As per Sebi data, most of these applications got approval in November last year and March, February this year.
The AIFs that have registered with Sebi include KKR India, Arth Capital, Landmark Opportunity Fund, HBS Raksha Movies, Tata Alternative Investment Fund, Monsoon Alternative Investment Trust, DSP Blackrock Alternative Investment Fund and Edelweiss Alternative Investment Trust.
The regulator had notified the guidelines for this new class of market intermediaries in May 2012. AIFs are basically funds established or incorporated in India for the purpose of pooling in capital from Indian and foreign investors for investing as per a pre-decided policy.
Read more: Business Standard
Delhi has become an epicenter of policy making :Sheila Dikshit
Dikshit has said that Delhi continues to be a growth centre for itself and all NCR cities. It has achieved a double-digit average growth rate. She expressed hope that it will sustain the rate in all times to come.
Dikshit also stated that due to environmental concerns, the city government has been encouraging service sector and IT industries. Our emphasis is on construction and infrastructure industries. Further, the city has become an epicenter of policy making.
It has provided a better connectivity through Delhi Metro as the government considers the public transport as an important component for economic growth. The government would ensure that the public transport should become hassle-free and more comfortable.
Sheila Dikshit also referred to the multiplicity of authorities in the Capital city. She also stated that it might have affected the pace of progress but has not become a permanent bottleneck in our efforts. Smt. Dikshit further stated that Delhi has been an important training center from the days of Mughal era.
The character of city being a trading centre has been enriched with passing of the days and better connectivity between Delhi and other cities in North India. We are committed to provide much better infrastructure as per the best world-class standards. The city government seems to be competing with the private sectors. Our health and education sectors have provided an age over the private institutions.
Read more: News Track India
Indian rupee hits historic low of Rs18.30 vs Dh1, Rs67.23 vs $1
The Indian rupee plunged dramatically on Tuesday, August 27, slumping 4.66 per cent in a matter of a few hours to yet another historic low, of Rs18.30 against the UAE dirham (Rs67.23 against the US dollar), baring the rout in the currency, which is now down more than 23 per cent since the beginning of the year.
In fact, the rupee has lost more than 25 per cent of its value in less than four months, since May 2, 2013, when it traded at Rs14.61 against the UAE dirham. With this latest slump, the rupee has lost more than half its worth (52.62 per cent) in 25 months. The rupee traded for Rs11.99 against Dh1 on July 29, 2011, and within two years, the emerging market currency has slid to a record Rs18.30 against Dh1 today.
Today’s decline came after the Indian Parliament approved a $20-billion food security bill, sending a clear signal to international investors that the country’s government is not serious about controlling the ballooning deficit and, ahead of next year’s general elections, will continue to take populist measures at the expense of the country’s economic health.
Mirroring the global rout in equities this morning, India’s benchmark BSE Sensex index slumped by more than 3 per cent today and closed at 17,968 points, a slump of almost 600 points, and down 3.2 per cent.
Read more: Emirates 24|7
Cabinet clears mega power projects
The Cabinet Committee on Investment has cleared a slew of project investments, in which it has given go ahead to 18 power projects worth Rs 83,772 crore and nine other projects worth Rs 92,500 crore, finance minister P Chidambaram said here on Tuesday.
He said the banks have already disbursed Rs 30,000 crore for the power projects. The government has asked that the fuel supply agreement (FSA) for the power projects should be completed by August 31 and if there is any pending FSA that has to completed by September 6.
Regarding the other nine projects, Chidambaram said those projects are in petroleum and natural gas, roads, railways and steel sectors.
“Banks have already disbursed Rs.26,000 crore for the other nine projects,” the finance minister said.
Source: The Times of India
Road Ministry asks states to expedite East West corridor projects
The Road Transport and Highways Ministry has asked state governments including Bihar and Assam to expedite pending projects on the East West Corridor under its flagship road building programme NHDP.
“Four-laning of the entire length of East West corridor has been completed barring projects for 232 km, which are still be awarded,” a top official at the ministry told PTI.
“These stretches are mostly in states like Assam and Bihar, where work could not progress on some stretches due to various problems. We have taken up the matter with the state governments,” the official said.
The official said the award could not be completed so far on account of delays in land acquisition, problems in forest clearances and poor law and order situation.
The entire length of the project has been completed barring the 232 Km for award and 195 Km which is under execution, he added.
The East-West Corridor under the National Highways Development Project (NHDP) has seen an expenditure of Rs 27,000 crore so far.
While the North South (NS) Corridor Connects Srinagar to Kayakumari, EastWest (ES) Corridor connects Porbandar to Silchar. The total length of the NS-ES network is 7,300 km. The project was originally scheduled to be completed in 2009.
Read more: The Economic Times
Electricity generation to grow by 5.7% in 2013-14: CMIE
Total electricity generation in India is expected to grow by 5.7% in 2013-14 as compared to a 4% rise reported in 2012-13, according to the Centre for Monitoring Indian Economy, an independent economic thinktank.
“During the year, power stations in India are expected to generate 963.8 billion units of electricity. This will be the highest electricity generation seen by the country in a single year,” CMIE said in a report.
Thermal power generation, which accounts for 80-85% of total power generation in India, is expected to grow by 5%. During the year, gas-based generation is expected to extend its fall. However, a higher output from coal-based power plants will help thermal power generation record reasonable growth, the report said.
Lower availability of natural gas, especially due to declining output from the Krishna-Godavari basin, impacted gas-based power generation, which fell by 6.8% in 2011-12 and by 28.5% in 2012-13. “A downward-trend in gas-based generation is likely to continue this year. We believe that gas-based power generation will decline by around 10%,” CMIE said.
Read more: The Times of India
Best Cities for Job Seekers in India
June 2012: 123
June 2013: 135
Percentage Growth y-o-y: 10 Percent
Delhi – NCR, the largest and the second most populous metropolis in India, occupies the fourth position in the list. It is the largest commercial centre in northern India and one of the fastest emerging cities in the region with an astonishing growth rate of 10.7 percent for the past five years. The astonishing rise of per capita annual income of an average Delhiite is an indication of the growing economic prosperity of the national capital. Also the per capita income in Delhi – NCR which is roughly around 1.75 lakhs, is three times the nation’s average and second highest in the country.
Being a prosperous city, it also offers a host of jobs and career opportunities to its residents. The key players in this region with maximum jobs opportunities are telecommunication, information technology, banking, hotels, tourism, and media sectors. The manufacturing sector of Delhi has also grown significantly and is offering numerous job opportunities.
Source: Silicon India