Recovery to begin in second quarter of 2014

Ireo Skyon, Gurgaon

Ireo Skyon, Gurgaon

Growth has remained very weak over the last three quarters and we expect growth to remain below 5 per cent for the next three quarters as well. Domestic demand will remain constrained by interest rate tightening by the RBI. Although we do expect an improvement in domestic demand in the US and Europe over the next six months, supporting a gradual recovery in external demand, we believe that a meaningful recovery in private capex or consumption in the next six months will be difficult, considering the recent tightening in monetary policy.

In this context, we believe that recovery in growth will not be led by a quick rise in consumption or investment to GDP. We believe that the first stage for stabilisation in growth will be through improvement in macro stability indicators (such as inflation, interest rates, and government surplus/deficit). We expect a gradual recovery in growth to begin in the second quarter of 2014 helped by export growth and stabilisation in private capex. We expect overall GDP growth to improve to about 5 per cent by September 2014 from an expected 4 per cent level in December 2013.

Read more: Business Line

India, US eye five-fold increase in commerce

Eyeing to increase two-way commerce by five times from the current level of USD 100 billion, India and the US have vowed to expeditiously address all trade and investment policy issues to remove obstacles and improve business environment in both countries.

In this context, the two sides, after talks between Prime Minister Manmohan Singh and US President Barack Obama, expressed their commitment to concluding a high-standard Bilateral Investment Treaty that will foster openness to investment, transparency and predictability, thereby supporting economic growth and job creation in both countries.

They also agreed to consider establishing a Joint Committee on Investment in Manufacturing.

“Noting that two-way trade has increased five-fold since 2001 to nearly USD 100 billion, President Obama and Prime Minister Singh agreed that there are no insurmountable impediments to bilateral trade increasing an additional five-fold,” a joint statement issued after the talks said.

Read more: The Times of India

Infrastructure

Betterment Charges to fund the viability gap in NCR Rapid Rail Connectivity

The ambitious NCR Rapid Rail Connectivity project that aims to connect Delhi with Alwar, Panipat and Meerut depends on betterment charges for its majority positive cash-flows from start of operation year 2017. The one time betterment charge proposed along the three corridors would be applicable every time the property in the identified area is bought or sold.

“The rationale behind imposing betterment charges is that the citizens become partners in development of concerned area”, said Ashwini Parashar, Vice President, Delhi Integrated Multi-Modal Transport Systems (DIMMTS) which is involved in making the detailed project report.

NCR Rapid Rail connectivity project has proposed two models to implement the betterment charges. One is based on the percentage of the circle rate, paying 5% during the construction period of the proposed Rapid Rail Corridor and 5-7.5% during the operational period of the Rail Corridor, depending on the type of property. Every time a property is bought or sold the specified percentage would be paid to National Capital Region Transport Corporation (NCRTC). NCRTC was recently formed with participation of four state governments.

Other option floated is the fixed rate square metres basis charging Rs 1,000 per square metre during construction of the rail connectivity project and between Rs 1,000-1,500 during operational period of rapid rail corridor, depending upon the type of property.

Read more: Business Standard

Retail

Luxury retail space in India to rise to 1.44% by 2015: Cushman & Wakefield

Global real estate consultants, Cushman & Wakefield has estimated that the share of luxury retail space in India will be a modest 1.44% by 2015 as against the current 1% even as total retail malls stock is set to increase by 27% by 2015.

The report released on Thursday highlights the changing luxury retail scenario in India. It said that of the total current operational mall space in the organized retail sector across the top seven cities of India is estimated at 66 million sq. ft. of which luxury retail space is only 770,000 sq. ft.

The relative reach of luxury brands present in the malls of top seven cities in India is the highest in NCR at 38%, followed by 21% in Mumbai and 17% in Bengaluru.

Read more: The Times of India

NRIs

FCNR swap deal: What it means for NRIs

Recently the Reserve Bank of India (RBI) announced several measures to stabilize the Indian Rupee against the US Dollar. Among them was a swap deal on FCNR deposits where the RBI has opened a window to the banks to swap fresh FCNR dollar funds, mobilised for a minimum term of three years at a fixed rate of 3.5% per annum for the tenor of the deposit. The swap window will be open until November 30, 2013.

What does this mean and will it impact Non Resident Indians investing in FCNR (B) deposits? We find out.

What is an FCNR account?

An FCNR account is a term deposit account that can be maintained by NRIs and PIOs in foreign currency. This account can be a good option for Non Resident Indians (NRIs) looking to invest in India without worrying about currency risks.

The funds in an FCNR account must necessarily come from your overseas funds. FCNR deposits can be maintained in ‘permitted currency’ which means any a foreign currency which is freely convertible and includes US dollar, Pound Sterling (GBP), Euro, Japanese Yen, Australian dollar, Canadian dollar, Danish Krone, Swiss Frank and Swedish Krona among others.

Read more: The Economic Times

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