Moody's arm sees more monetary tightening by RBI to curb inflation

Moody's arm sees more monetary tightening by RBI to curb inflation , Wednesday, Jul 30 .     NEW DELHI - Reserve Bank of India may not have been done with its monetary tightening cycle, U.S.-based think tank Moody's Economy.com said today.     "The RBI expects inflation to moderate to 7%--a sharp upward revision from the previous estimate of 5.5%--by the end of the fiscal year. This suggests that the tightening cycle has not yet reached an end," it said.     With a view to cool down demand and bring down inflationary pressures, the central bank Tuesday hiked its repo rate by 50 basis points and cash reserve ratio by 25 bps to 9% each.     Including this hike, RBI has raised CRR 150 bps and repo rate by 125 bps in the current financial year so far.     "Despite continued monetary tightening, lending remains robust and there are few signs of cooling. This has kept domestic demand buoyant, helping sustain economic growth amid external weakness but also contributing to inflationary pressures," Moody's Economy.com said.     India's headline inflation is currently near a 13-year-high of 11.89%.     The Moody's arm forecasts inflation to peak around 12% and begin to gradually decelerate in the quarter starting September.     It said the current high level of inflation is driven by global supply constraints, which is not in government's control.     The central bank also cut its growth forecast for the current financial year to 8.00% from 8..00-8.50%. It said growth of around 8.0% was more realistic, given that successive interest rate hikes had started to bite into demand.     However, Moody's Economy.com expects India's GDP to slip below 8% in the current fiscal.     "Moody's Economy.com is slightly less upbeat about India's GDP growth for the rest of the year, as economic prospects have been dampened not just by tighter monetary policy settings but also clouded by recent terrorist attacks, which hurt investor confidence," said the note.

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Equity Alert: Puravankara up 10% on improved Apr-Jun earnings

Equity Alert: Puravankara up 10% on improved Apr-Jun earnings Wednesday, Jul 30 Equity Alert: Puravankara up 10% on improved Apr-Jun earnings     MUMBAI--3:45PM--Shares of Puravankara Projects ended at 199 rupees, up 10%, after it announced improved Apr-Jun earnings.     The company's Apr-Jun consolidated net profit rose 41% year-on- year to 619 mln rupees. Net sales increased 31% to 1.57 bln rupees.     The company said lower selling, general and administrative expenses and higher gross profit margin drove net profit margin up to 39%.     The company said it is confident of maintaining its profit margin at high levels.     The company's shares moved up to a high of 216.90 rupees. They are expected to rise further but may face resistance at 222 rupees     On NSE, 240,832 Puravankara Projects shares were traded today.

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World Business Briefs At 4: ArcelorMittal; EADS; Johnson & Johnson

World Business Briefs At 4: ArcelorMittal; EADS; Johnson & Johnson Wednesday, Jul 30 - Round-up of global economies and business . . ECONOMY -------- EURO ZONE ECONOMIC SENTIMENT INDICATOR fell in July to 89.5 from 94.8 in June, the biggest monthly drop since Oct 2001. The fall was far higher than consensus estimates of 93.0, leaving the index at its lowest level since Mar 2003. (MarketWatch) +++ JAPAN INDUSTRIAL PRODUCTION fell by a seasonally-adjusted 2% in June from a month ago due to a decrease in output of passenger cars and semiconductor products machinery, data from the government showed. The fall is higher than the 1.7% drop analysts expected. (MarketWatch) COMPANIES --------------------   ARCELORMITTAL today said its second-quarter profit more than doubled to $5.8 bln (246.15 bln rupees) from $2.72 bln (115.39 bln rupees), and like U.S. Steel, gave an upbeat outlook for the third quarter. The world's top steelmaker's sales rose 39% to $37.8 bln (1.6 trln rupees).   (MarketWatch) +++   EADS has extended its Power8 restructuring programme to save another 1 bln euros (66.11 bln rupees) a year from 2011-12. The aerospace company already aims to cut 10,000 jobs and save 5 bln euros (330.61 bln rupees) in the first five years of the programme. (BBC News) +++   JOHNSON & JOHNSON has completed acquisition of Chinese cosmetics firm Beijing Dabao, according to reports. Chinese media reported buy price at $337 mln (14.30 bln rupees). (MarketWatch) +++ SIEMENS today reported 31% fall in third quarter net profit to 1.42 bln euros (93.92 bln rupees) due to a one-time gain a year ago. However, the Munich-based company's order intake and revenue rose, beating expectations. (MarketWatch) +++ NINTENDO today reported rise in Apr-Jun net profit to 107.30 bln yen (42.22 bln rupees) from 80.30 bln yen (31..60 bln rupees) a year ago driven by robust sales of Wii consoles and software, as well as its DS handheld devices. (MarketWatch) +++ BRITISH AIRWAYS and Spain's IBERIA are holding talks on a possible merger. The two airlines said British Airways and Iberia brands would be retained as part of a combined group. The proposed merger would help the airlines in the current economic environment, BA head Willie Walsh said. (BBC News) +++ STARBUCKS Tuesday announced plans to downsize its business in Australia and said it would close 61 "underperforming" stores out of its total Australia portfolio of 84. The decision comes as a setback for the Seattle-based chain's international dreams.. (Financial Times) +++ FORD MOTOR and GENERAL MOTORS are scaling back their auto-leasing businesses. Ford Tuesday said it is ending leasing deals on most trucks and sports utility vehicles. GMAC Llc, GM's financing arm, may also end leasing offers in US soon, possibly this week.  (Wall Street Journal) .

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India Bond Placements: PFC to raise at least 3 bln rupees

India Bond Placements: PFC to raise at least 3 bln rupees Wednesday, Jul 30     MUMBAI - Power Finance Corp will raise at least 3 bln rupees through a bond issue that opened today and closes Monday, said a company official.     The company will offer 5-year bonds at a coupon of 10.90% and 10-year bonds at 10.85%, payable annually.     The bond issue has an unspecified green shoe option and arrangers are yet to be decided, the official said. ------------------------------------------------------------------------------                           THIS WEEK                           ========= REC     Rural Electrification Corp may raise at least 5 bln rupees through a bond issue, a company official said today.     "We have called merchant bankers for the meeting, and will raise 5 bln rupees with a green shoe option. The tenure and date of the issue is yet to be decided," said H.D. Khunteta, director of finance at REC.     The company is looking to raise funds through three-year, five-year and 10-year bonds. REC     Rural Electrification Corp raised 5 bln rupees through 10-year bonds Monday, a company official said Jul28.     The 10-year bond will pay a coupon of 10.70% annually.      A large state-run insurance company is said to have bought the entire issue. BHW HOME FINANCE    BHW Home Finance Ltd will raise at least 500 mln rupees through five-year bonds, merchant bankers said.     The bonds will pay a coupon of 10.85%, annually, and are rated LAA + by ICRA.     The bond issue, which opened Jul 21, is slated to close Jul 29.     The company can raise an additional 500 mln rupees through a greenshoe option.     Darashaw & Co Ltd is the sole arranger for the bond issue.   ------------------------------------------------------------------------------                           LAST WEEK                           ========= . EXIM BANK      Export-Import Bank of India raised 5 bln rupees through five-year bonds Tuesday, a bank official said Jul 23.     The bonds will pay a coupon of 10.80%, annually. . EXIM Bank     EXIM bank had raised 1.30 bln rupees through 3-year bonds, said the official.     The bond issue had opened on Jul 15 and closed Jul 21.     The 3-year bonds offer a coupon of 10.75% annually and have a put/ call option at end of 18 months.   IDFC     Infrastructure Development Finance Co raised over 3 bln rupees through two-year bonds Jul 21.     The bonds will offer a coupon of 11.00%, payable annually.     The company was planning to raise 500 mln rupees with an unspecified green-shoe option.     The bonds are rated LAAA by ICRA and AAA (ind) by Fitch.   ------------------------------------------------------------------------------                          LAST FORTNIGHT                          ============== REC     Rural Electrification Corp raised more than 7 bln rupees through five-year bonds and closed the issue Jul 18, the company official said.     The bond issue that opened Tuesday offers a coupon of 10.75% payable annually.     ICICI Securities and Primary Dealership, Darashaw & Co, Trust Investments, A.K. Capital Services, SPA Merchant Bankers, Kotak Mahindra Bank, Almondz Securities, and Edelweiss Securities were among the arrangers of the issue.   HDFC     Housing Development Finance Corp Ltd Jul 14 raised 5 bln rupees through 3-year bonds, merchant bankers said.     The bonds offer a coupon of 11.15% payable annually.     A large state-run insurance company is the investor in the bond issue.     These bonds are rated AAA by CRISIL and LAAA by ICRA.   TATA SONS     Tata Sons Ltd raised 5 bln rupees through 5-year bonds last week, merchant bankers said.     The bonds offer a coupon of 10.80% payable annually.     The deal is likely to have been struck on Jul 10 with a large state-run insurance company as the investor.     These bonds are rated AAA by CRISIL.   IDFC   Infrastructure Development Finance Corp raised 1.32 bln rupees through 3-, and 5-year bonds on Ju1 9, merchant bankers said today.     A company official said the bond issue was closed successfully, but refused to detail the total amount received.     The 3-, and 5-year bonds will pay a coupon of 10.75% annually.     The issue was open for a day and the company was planning to raise at least 1 bln rupees through the issue.     IDFC-SSKI Ltd, Axis Bank, Trust Investments, Darashaw & Co, and ICICI Securities and Primary Dealership were the arranger for the issue.     The bonds are rated LAAA by ICRA and AAA (ind) by Fitch.   PFC       Power Finance Corp raised 10.50 bln rupees through bond issue that closed Jul 3, merchant bankers said.     The issue opened on Jul 2.     The company offered three-, five- and 10-year bonds. This issue also has an unspecified green-shoe option.     The company will pay an annualised coupon of 10.75% on three-year bonds, 10.70% on five-year bonds and 10.55% on 10-year bonds.     According to merchant bankers the company received around 60% funds in 3-year bonds.     There are 17 merchant bankers to the issue.     Company officials were not reachable to confirm the details of the issue.   ------------------------------------------------------------------------------                          IN JUNE                          =======   HDFC       Housing Development Finance Corp raised 2 bln rupees through 10-year bonds and closed the bond issue, said merchant bankers.     The 10-year bonds will pay a coupon of 10.50% annually.     The issue that opened Thursday is rated AAA by CRISIL and LAAA by ICRA.     ICICI Securities Primary Dealership was the sole arranger.   TATA POWER      Tata Power raised 5 bln rupees through 10-year bonds Monday, merchant bankers said Jun 17.     The 10-year bonds offer a coupon of 10.40%, payable annually.     According to merchant bankers, two large state-run insurance companies invested in the bond issue.     Standard Chartered Bank was the sole arranger for the issue, dealers said.     However, company officials refused to comment on the bond issue.   NABARD   National Bank for Agriculture and Rural Development raised 3.96 bln rupees through 3-year bonds and closed its issue June 12, merchant bankers said.     The bonds offer yield of 9.60% annually..     NABARD was planning to raise 2 bln rupees with an unspecified greenshoe option.     The issue opened on Wednesday and closed today.     These bonds have put/call option at the end of the first year.     A.K. Capital Services, Almondz Securities, HSBC Bank, ICICI Securities and Primary Dealership, Kotak Mahindra Bank, SPA Merchant Bankers, and YES Bank were the arranger for the bond issue.   REC       Rural Electrification Corp has raised 5 bln rupees through 10-year bonds today, said a company official on Jun 9.     The bonds will pay a coupon of 9.68% annually and HSBC Bank was the sole arranger of the issue.     The U.K. bank is said to have underwritten the entire issue, merchant bankers said.     The state-run company has applied to Reserve Bank of India for raising $500 mln through offshore debt and is awaiting reply from the central bank, the official said.   HOUSING DEVELOPMENT FINANCE CORP       Housing Development Finance Corp raised 3.80 bln rupees through 10- year bonds on May 30.     The bonds will offer a coupon of 9.90% payable annually.     According to merchant bankers, a large state-run provident fund was the investor in the bond issue.   POWER FINANCE CORP       Power Finance Corp has raised 17 bln rupees through its bond issue that closed on Jun 5.     The company had offered three-year, five-year and 10-year bonds at a coupon of 9..55%, 9.60%, and 9.68%, respectively.     The size of the issue was 2 bln rupees with an unspecified greenshoe option.     ICICI Securities and Primary Dealership Ltd, Axis Bank, ICICI Bank, IDFC SSKI Ltd, A.K. Capital Services Ltd, Almondz Securities Ltd, Yes Bank, and Trust Investments Ltd were among the arrangers for the bond issue.

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The world's largest economies

The world's largest economies India The Indian economy is the 12th largest in the world. That is, India's gross domestic product stands at $1.171 trillion. However, in terms of purchasing power parity, India is the world's fourth largest economy. Its GDP in purchasing power parity terms is at $3.092 trillion. These are the year 2007 figures, recently released by the World Bank. By definition, purchasing power parity (PPP) is an economic theory that estimates the amount of adjustment needed on the exchange rate between countries in order for the exchange to be equivalent to each currency's purchasing power. India is the one of the world's fastest growing economies, yet its annual per capita income remains quite low at $950, or about Rs 40,000. That puts India in the 160th spot. Incidentally, World Bank figures show that the world's GDP is at $54.347 trillion. India accounts for just over 2 per cent of global GDP. 1. United States The American GDP is at $13.812 trillion, making it the world's largest economy. It accounts for more than 25 per cent of the entire world's GDP! In terms of purchasing power parity too, the United States is the world's leading economy. However, its per capita income at $46,040, per year, pegs it at the 15th spot in the world. 2. Japan Japan, with a GDP of $4.377 trillion, is the world's second largest economy. However, in terms of purchasing power parity, Japan is ranked third by the World Bank. It's GDP in PPP terms is $4.283 trillion. Japan's per capita income (annual) is $37,670, making it the 25th highest in the world. 3. Germany Germany is the world's third largest, with its GDP at $3.297 trillion. But in PPP terms, Germany is the world's fifth largest economy. It's GDP in PPP terms is at $2.752 trillion. Its per capita income is the 23rd highest in the world, at $38,860. 4. China China, the Asian giant, is the world's fourth largest economy with a GDP of $3.281 trillion; but in purchasing power parity terms it ranks second at $7.055 trillion. It is the world's fastest growing major economy and its giant strides have taken the world by a storm. Economists predict that over the next few decades, it could topple the US as the world's largest economy. China's per capita income, however, is still low at $2,630 per year. 5. United Kingdom Britain is the world's fifth largest economy. Its GDP is at $2.728 trillion. In purchasing power parity terms, the United Kingdom's GDP stands at $2.082 trillion making it the seventh largest in the world. Britain is a rich nation. Its per capita income is at an impressive $42,740. That would rank it in the 19th spot. 6. France The French GDP is at $2.563 trillion, making it the world's sixth largest economy; but in terms of PPP, it is the world's 8th largest (GDP in PPP terms, $2.054 trillion). The per capita income of the French at $38,500 makes them the 24th richest people in the world 7. Italy Italy's GDP in absolute terms is at $2.107 trillion. That makes it the planet's seventh largets economy. However, in purchasing power parity terms its GDP is at $1.780 trillion and its rank is 10th. Italians' per capita income is the 30th highest in the world. It is $33,540. 8. Spain Spain is the eighth largest economy with its GDP at $1.429 trillion. In purchasing power parity, however, it slips to the 11th spot ($1.373 trillion). With a per capita income of $29,450 per year, its people are the 36th richest in the world. 9. Canada The Canadian GDP stands at $1.326 trillion, making it the world's ninth largest economy. In PPP terms, however, it stands 14th in the world. Its GDP in PPP terms is at $1.178 trillion. Its people enjoy a comfortable life with a per capita income of $39,420, which is 22nd highest in the world 10. Brazil The Brazilian economy too has been growing at a scorching pace. It is the world's 10th largest economy with a GDP of $1.314 trillion.. But in terms of purchasing power (GDP - $1.834 trillion), it is better placed at number 9. Amongst the emerging economies, it has one of the best per capita income figures -- $5,910. This places it in the 85th spot in the world 11. Russian Federation In absolute GDP terms, Russia -- at $1.291 trillion -- is the world's 11th largest economy., but it jumps to the 6th spot in terms of purchasing power parity ($2.088 trillion). Its per capita income is at $7,650, the 78th highest in the world.

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RBI Policy: Hike or pause? Markets reconcile to Reddy surprise

RBI Policy: Hike or pause? Markets reconcile to Reddy surprise Tuesday, Jul 29 What will be the surprise this time?     "Quantum" of the action, or "instrument" of action or absence of an action?     Even as Reserve Bank of India governor prepares his swansong, his apparent penchant for "surprising the market" is making most veteran Mint Street watchers say that no amount of preparation will ensure they read Reddy right.     There will be some surprise. He meeting the street expectation will be surprise too.    "You just can't be sure you will get him right."     "While we are all talking about the repo rate, he may just hike the reverse repo and the Bank Rate too,    Successive polls by kences1 have showed that most dealers in banks, primary dealerships, stock brokerages, mutual funds, and corporate treasuries expect Governor Y.V. Reddy to raise the repo rate by 25 bps.     Some of them see a hike in cash reserve ratio, but a wider lot don't see a CRR hike just now because liquidity is already tight.     Some respondents claim they "won't be surprised" if Reddy just reads out a hawkish statement and not put any of the monetary tools to use.     Fall in crude oil prices and early signs of moderation in GDP growth are reasons enough for a pause, they say.     But, quiz them deeper, they admit "that will be a surprise" as inflation is near 12% and absence of any measure could bolster inflationary expectations.     Inflation has sped to a 13-year high of 11.89% for the week to Jul 12. RBI aims to bring down inflation to around 5.5% by March end.     The government, which took a slew of fiscal and administrative steps earlier this year to cool the prices, has now thrown the ball in RBI's court, saying the central bank's monetary measures will be the "first line of defence" against inflation. . "SURPRISE" PAUSE?     Despite the evident inflationary pressures, some analysts see a case for Reddy not resorting to any monetary tightening just now.     ICICI Securities Primary Dealership attaches a 30:70 probability to RBI not hiking interest rates. It is mainly betting on a 25 bps hike in repo rate.     "After slamming the brakes in the inter-meeting period, skipping rate action in the policy review is pretty much in line with RBI's modus operandi," A. Prasanna, an economist with ICICI Securities Primary Dealership.     He hastens to add that his firm is open to be "surprised" by a hike in the reverse repo rate.     Those who see a pause say the central bank will bark loud, but bite less today because it has already hiked interest rates by 75 bps and CRR by 125 bps since April.     "It may wait to see the impact of the past measures," a Singapore- based swap,iterating the theory that the central bank's monetary actions work with a lag.     kences1 poll of about 40 dealers conducted Monday showed that around 26% of the respondents expect the central bank not to take any measures today.     A similar poll conducted on Jul 21 showed that 23% of the respondents had expected a pause in monetary tightening.     Apart from softening oil prices, there are other variables that could prompt Reddy to hold interest rates and banks' cash reserves,     After rising sharply each successive week since early February, inflation rate has started showing signs of stabilising.     "After spiking up by 3 percentage points in June, headline WPI inflation has held steady around 11.90% over the last three readings,"     Contribution of primary articles of incremental inflation has come down, while the contribution of manufacturing and fuel has held steady.     Money supply growth too has started to slowdown. On last reading, it grew 20.5% on year on Jul 4, compared with a year on year growth of 21.4% a month ago.     Although, it is way above the 16..5-17.0% growth target set by RBI in April, the central bank could take comfort from the slowing money supply.     "I think RBI will maintain status quo. The pace of inflation rise has come down. Also, it will take time for earlier monetary measures to take effect," said V. Balakrishnan, chief financial officer, Infosys Technologies. . HIKE - NO SURPRISE!     RBI hiking interest rates by 25 bps won't surprise many given that inflation is at a 13-year high.     The Macroeconomic and Monetary Developments Report released by the RBI Monday emphasises that oil price pass-through is incomplete and, therefore, inflation stays pressured up.     And with oil prices still ruling above $100 a barrel, any comfort on inflation is unlikely.     Crude oil prices have lost $22 a barrel from the record highs of $147.27 a barrel seen on Jul 11, but analyst say it is an uneasy softening as oil prices could climb back up.     Analysts also say that RBI may have to keep the monetary policy tight with hikes in CRR to balance the slippage in government finances expected this year.     Ahead of the elections next year, the government's expenditure is expected to stay high and, therefore, have consequences on inflation.    The government has to also implement the 650-bln-rupee farm loan waiver scheme and implement the recommendations of the Sixth pay commission.     The central bank will have to ensure an appropriate rate setting so that inflationary expectations don't build again.     "We will have to see what tool the RBI uses," said a bond trader.     "It used a sledgehammer in the last two month. Will it follow up with equally harsh measures or come with milder moves remains to be seen. What should be certain is that they will be at it," a dealer said.     "Chances are that Reddy may be more hawkish than everyone expects him to be," said Ramya Suryanarayanan, economist at DBS Bank.     "Chances are that Reddy may signal that this is not the end of the rate hike cycle. There is a lot of uncertainty over the slowdown in the U.S. and its impact on India. The Governor would have to balance this pessimism with (by pointing out) high inflation."     Markets abhor high interest rates.     But Governor Reddy had to resort to monetary tightening during most of his tenure, which earned him the reputation of being an inflation hawk.     Reddy was believed to be "ahead of the curve" when he raised interest rates citing inflationary pressures at a time when not many others saw inflation..     Now, when inflation has zoomed to close to 12%, he is believed to have fallen behind the curve.     Some say inflation spiral was beyond his control as he has no say over international commodity prices. But few blame him for inflation saying he allowed a loose monetary policy--by letting money supply growth top 20% for two years.     What will Reddy, whose tenure ends in September, offer in his last monetary policy statement?

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I-T defaults can land you in jail

Date: Tuesday, 29 July, 2008, 10:35 AM   If you have not filed income tax (I-T ) return till now, you better rush and complete the formalities by July 31. The tax department may impose a penalty of up to Rs 5,000 under section 271F on you for not filing I-T returns. And, if you have unpaid tax of more than Rs 3,000 but less than Rs 1 lakh, you can be sentenced for a jail term of three months along with the penalty. If the unpaid tax amount is more than Rs 1 lakh, the jail term can increase to a minimum of six months to a maximum of seven years, over and above the penalty, according to Central Board of Direct Taxes (CBDT) spokesperson Shishir Jha. This time CBDT will clamp down on I-T defaulters, said a senior CBDT official. However, return filing can be extended to till April 2009, the last date of assessment year for 2007-08 , if there is a genuine ground, Jha said. Jha added that the department can find out from its data that a person is not filing I-T returns despite having taxable income from various sources like companies, banks, mutual funds, credit cards, land and other fixed assets. As per government provision, all the entities need to deduct taxes while making payments like salary and interest and deposit the amount with the exchequer. Not only this, if a person invests more than Rs 2 lakh in mutual fund units, the company shares the information with government along with the client's PAN. The department also collects data from registrar offices of persons involved in large transactions. After collecting these data, the department processes it to catch the defaulters. In case a person does not file returns but submits documents like Form 16A and other TDS certificates after getting a notice, he can be still asked to pay a penalty of Rs 5,000. But, in most such cases, the department normally asks him to file the return at the first instance. But, Jha said if the default is repeated, then the penalty is imposed. If a person ignores the notice, Jha said the penalty will be increased to Rs 10,000 for each notice. Filing of return has some other advantages also. Income tax law allows carry forward and set off business losses against the income in the subsequent years. But, these benefits will not be available if the tax return is not filed by the due date. At the same time, if more taxes than the due amount is deducted from your income, you will get the refund only after filing the returns. If you file the return by July 31, you will also get the interest on the refund amount for the period between April 1, 2008 and the date of refund. But, if you filed the return after the July 31, 2008, you will not get the interest.

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WTO talks limp into 9th day: stalemate over agriculture issues continue

Top negotiators left off from intensive talks aimed at hammering out a world trade pact and planned to resume them later on Tuesday, ministers told reporters. Ministers of seven key trading nations held "intensive discussions and they will continue tomorrow," Indian Commerce Minister Kamal Nath said after the marathon talks ran into a ninth day amid lingering disagreement on proposed import tariff measures. "We continued to discuss some of the contentious issues of livelihood security," he added, but did not report any agreement on the special tariff proposals that have split India and the United States at the talks. Tensions had peaked overnight concerning WTO proposals to allow developing countries to protect poor farmers by imposing a special tariff on certain agricultural goods in the event of an import surge or price fall, via a "special safeguard mechanism" (SSM). "There have been very intensive discussions this evening amongst ministers," said EU Trade Commissioner Peter Mandelson after the talks involving the United States, Australia, Brazil, China, the European Union, India and Japan. "We work and will continue on what is a very, very complex and sensitive... issue of SSM," he added. "The show is on the road and it goes on."

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India's share in global service exports to rise to 6pc by 2012

India's share in global service exports is set to more than double from 2.7 to 6 percent by 2012, despite a stagnant global trend, an economic think-tank has said. "Currently, the country's share in the worldwide service exports is 2.7 percent, and it would increase to six percent by 2012," the National Council of Applied Economic Research (NCAER) said in its latest macro-track report. The country's exports of services, powered by the booming software, consultancy, engineering and tourism sector, was expected to touch USD 319 billion by 2011-12, the report said. These exports, in the past-decade-and a-half, have increased fifteen- fold, from around USD 5 billion in 1990 to nearly USD 74 billion in 2006, the report said. "Today, more than one-third of the country's aggregate exports are services, an exceptionally high share unmatched by any large developing country and only a handful of advanced countries," NCAER said in the report. Besides exports, the country's imports of services have also grown at an impressive rate, the report said. "Against the world average of 10 per cent, the country's services imports grew by a hefty 40 percent in 2006, while exports jumped by 34 percent," NCAER said. NCAER, in its report, further said that India needed to make tremendous efforts to maintain the growth trend in the services sector. "For maintaining high growth of its service exports, India would need to push for effective market access for its service sectors, both under the bilateral and regional trading agreements and WTO framework," the NCAER report said. Today, as industries have started feeling the shortage of skilled manpower, the country needs to pay attention to general and technical training, the report said. "India would also have to invest heavily on both general and technical education and vocational training or otherwise it would lose the momentum in services sector growth," the NCAER report said.

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RBI to announce its first quarter review of monetary policy today

The Reserve Bank of India's first quarter review of the monetary policy will be announced on Tuesday. As inflation still remains the primary concern for the government, experts are betting on a continuance of the hawkish stance. However, with falling global oil prices and some stability on the inflation front experts believe that home and consumer loans may have a sigh of relief as RBI is likely to announce a no change' monetary policy, so as not to impede growth.

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