Economic Survey 2013: Survey paints a cautiously optimistic picture, say analysts

NEW DELHI: The economic survey released by the government today paints a "cautiously optimistic" picture of the economy and suggests that the government will present a fiscally prudent budget tomorrow, analysts say.

The survey, tabled by Finance Minister P Chidambaram in Parliament, projected an optimistic growth rate of 6.1-6.7 per cent for the 2013-14 claiming that the downturn is more or less over and economy is looking up.

"The survey paints a cautiously optimistic picture of the economy and holds out hope for the future," Nomura Economists Sonal Varma and Aman Mohunta said in a research report.

Echoing similar sentiments Deloitte India Senior Director Anis Chakravarty said "the Economic Survey 2012-13 released today provides a candid view of the economy and clearly recognises the need for reforms."

Though problem areas are recognised, the survey seems to provide a sense of optimism within the current macroeconomic framework, analysts believe.

"Though it provides an optimistic target of 6.1 per cent to 6.7 per cent as GDP growth for the next fiscal, one may conclude that this range is quite wide," Chakravarty said adding that "this sends a message that growth will be driven by reforms and global prospects".

The Nomura report further said that "the survey suggests that the government will present a fiscally prudent budget. We expect the government to project a fiscal deficit of 4.6 per cent of GDP in FY14 from 5.3 per cent in FY13."

According to PwC India Executive Director Ranen Banerjee "the economic survey highlights importance of human capital - that is investment in human capital, innovation and knowledge development being the next key drivers of growth."

Banerjee further said there are poor signals on all fronts of the economy and it will be interesting to see how the Union Budget attempts to improve the situation.

Commenting on the Economic Survey, Standard Chartered bank Senior Economist Anubhuti Sahay said: "The survey has rightly stressed on the urgent need to restore the domestic macro-economic balances in place."

"The adverse impact of inflation is well reflected in lower savings rate, wider CAD and still elevated interest rates for investments," Sahay added.
Commenting on the Survey, India Ratings Chief Economist and Head of Public Finance Devendra Kumar Pant said, while the report reiterates slowdown, it also supplements the Government's commitment of minor slippage in fiscal deficit and that the way out is a credible fiscal consolidation plan which can help lead to macroeconomic and price stability.

According to the Survey, GDP growth will be 5 per cent this fiscal, the lowest in a decade, before improving to 6.1-6.7 per cent in FY14. One reason for this low decadal growth, Pant said, is driven by the lowest growth in Government consumption since FY07 in the current fiscal at 4.1 per cent, which is evident form the large cash balance of the Government and this will help in tying fiscal deficit to 5.3 per cent of GDP.

Lauding the survey for suggesting curbs on subsidies, especially that of oil, Pant said he expects more measures in the tomorrow's Union Budget on this front. 

 

AARTI

PGDM 2nd sem

IIMT COLLEGE OF MANAGEMENT HAS RECENTLY ORGANIZED A NATIONAL SEMINAR ON 23 OF FEB 2013







AARTI
PGDM 2nd SEM

Diesel prices could be deregulated. Like petrol, diesel would eventually be sold for market rates.
- Government may bring back customs duty on crude oil
- The Budget is expected to clarify how much state-owned oil companies like HPCL, IOC would share for subsidies.
- Clarity on domestic natural gas pricing

BY-KSHITIJ
PGDM-2nd sem

n another shocking and disgraceful incident, three minor school-going sisters were raped and murdered and their bodies were dumped in a well.

Police in Bhandara -- from where the siblings aged 11, 9 and 6 were reported missing since February 14 before their bodies were found in the well three days later -- suspect the fallout of an old enmity between two families.

Two suspects have been picked up in this regard.

According to officials, the three girls did not return from school last Thursday (Feb 14) and their mother lodged a missing complaint at the Lakhni police station.

Two days later, some villagers discovered their brutalised bodies from a well near Murmadi, around three kilometres from their village, following which the local police registered a case of 'accidental death'.

It was only after the villagers took to the streets, blocked traffic and protested outside the police station that a case of murder, kidnapping and rape was lodged.

The findings of the post-mortem have sparked tension in the area, which had witnessed caste riots following the killings of four Dalits in 2006.

Appealing for calm and cooperation, Maharashtra Chief Minister Prithviraj Chavan Wednesday said the incident of the three minor sisters who went missing and were later found raped and murdered was "extremely deplorable and painful".

"The incident is extremely deplorable and painful. I appeal to the people to maintain calm and cooperate with the law-enforcers," Chavan said in a statement.

Chavan also announced ex-gratia relief of Rs 10 lakh to the family of three minor sisters, who went missing, and later found raped, murdered and their bodies dumped in a well in Bhandara district, about 65 km from Nagpur, Maharashtra's second capital.

Home Minister RR Patil had earlier announced the suspension of Prakash Munde, chief of the Lakhni police station, under whose jurisdiction the crime was committed.

Police have formed 12 special teams to probe the crime, which left union Heavy Industries Minister Praful Patel visibly stunned Tuesday after he visited the mother of the three girls at her home in Lakhni village, around 115 km from Bhandara town.

"As a father of three daughters, I am appalled at the atrocity committed on these girls. I have raised the matter with the chief minister to ensure financial assistance to the widow, speedy investigation and a fast track trial of the accused," Patel said.

Minister Patel also visited the family and asked the cops to solve the case quickly. The NCP leader's party is part of the ruling Maharashtra coalition led by the Congress.

BY-KSHITIJ
PGDM-2 nd

Galaxy Note 8.0 spotted at Samsung event ahead of expected MWC release

 

After launching Samsung Galaxy Note 10.1, it is expected that Korean chaebol is gearing up to launch Galaxy Note 8.0. There have been plenty of leaks around this device, which is expected to be announced at the Mobile World Congress (MWC) 2013 happening in Barcelona.

The recent leak seems to come from Samsung itself. Samsung had hosted an event in South Korea on February 14, 2013 to launch a new colour option for the Galaxy Note 10.1 LTE. At this event, people did catch a glimpse of what is being dubbed as the Samsung Galaxy Note 8.0.

SammyHub has pointed out that the image in the background, is not of Samsung Galaxy Note 10.1 but rather resembles quite closely to the leaked images of the Galaxy Note 8.0. Also in this image, one can easily see the back and home buttons, which are on the Galaxy Note 10.1 tablet but absent in case of Galaxy Note II smartphone.

As per past rumours, Samsung Galaxy Note 8.0 is expected to sport 8.0-inch 1280X800 TFT (Super Clear LCD) display. It is likely to come in two versions - Samsung GT-N5100, which will be a 3G+Wi-Fi version and the GT-N5110, which will be a Wi-Fi only version. The dimensions of the tablet will be 211.3X136.3X7.95 mm and it will weigh around 330g.

AARTI

PGDM 2nd SEM

New billing model may hit India’s software exports

As clients shift to new pay-per-use model to avoid paying upfront for software, short-term revenues could be hit

The industry will have to prepare itself to provide services based on a very different model, says Infosys co-chairman Gopalakrishnan. Photo: Hemant Mishra/Mint

 

 

Bangalore: India’s $70 billion software exports sector that counts General Electric and Citigroup among its top customers could see a drop in business volume in the short term as these clients shift to newer pay-per-use billing models and seek to avoid high upfront investments in buying and deploying software products from Oracle Corp. and SAP AG .

S. Gopalakrishnan, co-chairman of India’s second-largest software company Infosys Ltd, said if the shift to newer models of billing by outsourcing customers is dramatic, the immediate revenue earned from deploying business software products could be hit.

“We don’t know how fast this will happen, but definitely this will have an impact on the industry,” Gopalakrishnan said in an interview on the sidelines of the Nasscom summit. “The industry will have to prepare itself to provide services based on a very different model.”

For instance, a PeopleSoft implementation would be undertaken as a project and by the time it was complete, Infosys would have got all its payments, although the client wouldn’t have started using the system.

“But if the shift happens, we will get zero revenue till the implementation is over and clients start paying us on a pay-per-use basis, maybe for three years or five years,” he said. “So, it’s a very, very different model. Imagine what will happen to our revenue profile and such. Till now, you got all your software revenue and suddenly you have to go to pay per use model.”

Traditionally, customers paid millions to buy business software solutions, such as enterprise resource planning, that help automate and integrate business processes, and then spent even more in maintaining these systems. With enterprises now looking to cut costs, they are increasingly exploring ways to shift some of this capital expenditure to operational expense.

“There will be a dramatic drop in revenue. In the previous example, let’s say if we charged $10 million for the implementation, we will get zero till that time, may be $100,000 or $200,000 per month over a period of three-five years. It’s a significant change from that $10 million we could have booked, and now there is zero revenue and we are getting $100,000 per month,” said Gopalakrishnan.

Experts such as R. Ray Wang, founder of enterprise research firm Constellation Research Inc., said the IT services model has been exhausted.

“IT services firms will have to move beyond volume-based, cost-competitive staff augmentation, testing, maintenance and advisory services. The classic time-and-materials, skilled body shop market has maxed out,” he said in a January research note.

 

Avinash kumar

PGDM 2nd Sem.

Don`t want to waste opportunities like last time: Shikhar Dhawan

New Delhi: Consistency has always been a problem with Shikhar Dhawan since his first-class debut back in 2004 but after his maiden call-up to the Indian Test squad, the Delhi left-hander is determined not to let this chance go abegging.

"I can`t blame anyone for not being able to cement my place in the India squad when I was touring West Indies last year. I wasn`t consistent enough and that`s why couldn`t play more than five ODIs. I guess, it`s all in the mind and I am not going to let this opportunity go," the 27-year-old said.

Dhawan has played five ODIs scoring 69 runs with a half century that came in the West Indies.

"No excuses for not delivering but pitches in West Indies were extremely slow and the ball wasn`t coming onto the bat. I should have scored more runs," Dhawan, who has scored 5679 runs in 81 first-class matches, said.

However, he said that he was expecting a call-up having scored four first-class centuries in his 833 runs this season.

"While going into the Irani Cup, I didn`t want to think about selection as I had done in some earlier occasions while playing these kind of games before a team selection.

"I batted freely and should have got a century. But the key to my success this season is my consistency. I have not thrown away after getting into the 30`s and 40`s."

Dhawan feels that his unbeaten century (110 not out) against England in a practice game also helped his case.

"If you score runs against an international attack, the self belief automatically increases. I didn`t face problems facing Steven Finn, Jade Dernbach, Stuart Meaker or James Tredwell. That innings also boosted my confidence a great deal."

During the 2010-11 season, Dhawan had played an irresponsible shot as Delhi were chasing a meagre 136 against Railways at Roshnara Club ground and the hosts lost that match.

"I had never faced such criticism as I did after that game. But that dismissal did change my approach towards batting. Therefore it was very satisfying when I anchored the 270-run chase against Maharashtra. I know my game better," the Delhi captain said.

A lot of Dhawan`s contemporaries like Suresh Raina have established themselves in one form of the game but the left-hander doesn`t have any regrets.

"I have been playing for India `A` for th past six-seven years but I knew that the senior team was performing brilliantly. If your main team is doing well, you need to learn to wait and I was precisely doing that."

Dhawan, who got married a couple of months back to half Bengali-half-British Esha Mukherjee also credits his family`s support.

"Apart from my parents and coach Tarak Sinha, my wife has been a big support and so has been my two daughters. My elder daughter is 11 years old and she told me that `Papa I am proud of you`. That means the world to me," said Dhawan sounding a content man.

So how much of Bengali has he learnt, he chuckled, "Khub bhalo (very good) and Aami tomake valobashi (I love you) are the two words I have learnt by heart." 

AARTI 

PGDM 2nd SEM

EU Budget - when is a cut not a cut

 





That is what Parliament voted for last year when Tory eurosceptics united with Labour to defeat the government. That is what David Cameron's advisers believe he may soon be able to say he's achieved.
Although no deal has yet been done the numbers currently being discussed for the next seven year EU budget are more than 30 billion euros (£25.5bn) lower than the one it will replace.
It has been a long and dull night for the prime minister.
He and the 26 other EU leaders left the Brussels negotiating table at around 12.30 in the morning and were only called back about six hours later. .
Besides a brief meeting with Germany's Chancellor Merkel and France's President Hollande there was not a great deal - beyond I'm told a supply of espressos, haribos, and fruit - to fill the small hours as Brussels negotiators put pressure on other countries to accept a squeeze.
As in any negotiation nothing is agreed until everything is agreed and the signs are that there is still a way to go before Europe's leaders sign on the dotted line.
Even if a deal is done with a headline cut to the EU budget there will be much to scrutinise

AARTI
PGDM 2nd

Banking & Financials News

RBI may reduce proportion of banks’ bond holdings

The Reserve Bank of India (RBI) is planning to reduce the proportion of banks’ bond holdings. Banks can hold 25% of their deposits to maturity, while they have to invest 23% of their deposits in securities issued by the finance ministry and other approved notes under the Statutory Liquidity Ratio, according to media reports.

The hold-to-maturity rules guard banks from losses and encourage them to invest in government debt. The 10-year benchmark bond yield closed up 3 bps at 7.91% on 4^th February, compared to the previous week’s close of 7.88%, after moving in the tight range of 7.85% to 7.91%.

Bond yields fell initially during the week as dealers anticipated cut in key policy rates ahead of the RBI monetary policy review, scheduled on Tuesday.

Bond yields closed marginally lower after the RBI cut interest rates by 25 bps, for the first time in nine months. However, the central bank’s cautious stance on future policy disappointed investors.

AARTI
PGDM 2nd