Can Crude earn huge forex to India
Japan is famous for its high-quality steel manufacturing despite being an iron-deficit nation. It imports iron and exports value-added items like ships and cars to create huge trade surpluses.
India could develop a similar situation with respect to another key commodity — crude. India imports about 75 per cent of its crude and currently has around 12-15 per cent surplus refining capacity, which is exported in the form of petrol, diesel, aviation fuel, etc.
Most of India's refiners are undertaking major capacity expansions and although crude imports will rise, domestic refining capacity will ascend much faster. By 2012-13, India could generate huge forex surpluses on the petroleum front. This has very interesting implications.
Some rough numbers. India imported 128 million tonnes of crude last year - about 75 per cent of total consumption - for a cost of $76 billion ($67 bn in 2007-08). Over 160 mt of crude was processed by Indian refineries (Reliance's new 29 mtpa facility came onstream only in mid-December 2008).
About 135 mt of throughput was consumed domestically. Products from about 25 mtpa of throughput was exported for revenues of $30 billion, up from $7 billion in 2004-05. Petro-exports contributed 17 per cent of all merchandise exports.
Domestic consumption will rise at 7-8 per cent compounded annual growth rate (CAGR) over the next five years. Domestic crude production will also rise. Once Cairn's new Rajasthan fields and Reliance's offshore KG assets are in full production. India will produce 55 mtpa, up from the current 45 mtpa. (About 1 lakh barrels per day = 5 mtpa). By 2012, Indian refining capacity should be 260-270 mtpa, up from a current 175 mtpa. Domestic demand will reach around 160 mtpa by then. About 100-110 mtpa of products could be exported.
Assocham did a study that suggested that by 2012-13 India's petro-product exports would fetch a surplus of about $70 bn over the import bill. The crude-product equation will clearly change to forex-surplus even if the estimates are optimistic
Showing posts with label iNDIAN ECONOMY. Show all posts
Showing posts with label iNDIAN ECONOMY. Show all posts
Sunday, October 11, 2009
Sunday, August 2, 2009
WORLD'S LARGEST SOLAR STEAM SYSTEM INSTALLED IN INDIA
--------------------------------------------------------------------------------
AUG 1, 2009
The world’s largest solar steam system has been installed at Sri Sai Baba Sansthan, Shirdi. The Union Minister for New & Renewable Energy, Dr. Farooq Abdullah inaugurated it recently. The solar system has been designed for cooking food for devotees visiting the sansthan. The total cost of the solar steam system is estimated at Rs. 133.00 lakhs. A subsidy of Rs. 58.40 lakhs has been provided by the Ministry of New and Renewable Energy (MNRE) for it. The solar system will enable the sansthan to cook food for 20,000 people / day, resulting in an annual savings of one lakh kg of LPG, translating to nearly Rs.20,00,000 per year. The system has been installed within a record time of 10 months.
Steam cooking has been found to be very clean, efficient and hygienic way of cooking, especially when food is cooked for a large number of people. The Shirdi system generates about 3500 kg of steam every day, which is sufficient to cook food for about 20,000 people. The system has been designed in such a way that it will generate steam for cooking even in the absence of electricity to run the feed water pump for circulating water in the system. Some of the other large solar steam cooking systems installed include systems at Mount Abu in Rajasthan for 10,000 people/ day, at Tirupathi in Andhra Pradesh & Satyabhama university in Chennai each for 15,000 people/day
To promote such systems in the country, a scheme is in promotion through Ministry of New and Renewable Energy which provides support upto 50% of the cost of systems to non-profit making bodies and up to 35% to profit making bodies availing depreciation benefits. Over 40 systems covering a dish area of about 12,000 sq. m have been supported by the Ministry so far for various application. Though its major application is cooking only, it is also used to process heat in industries & laundry, sterilization, air conditioning etc.
India is full of sunshine during most part of the year. Solar radiation available during the daytime can be harnessed for generation of steam using automatically tracked solar concentrators. The concentrators focus the sunlight on receivers which convert water into steam flowing through them for use in the kitchen. The system comprising such concentrators is hooked up with existing boilers so as to take care of cloudy days/ non-sunshine hours. The system can help in saving 70 to 80% of the fuel being used for cooking or other steam applications. These installations can help religious places/ ashrams, schools, students’ hostels, canteens of various establishments etc.
SS/ PM
AUG 1, 2009
The world’s largest solar steam system has been installed at Sri Sai Baba Sansthan, Shirdi. The Union Minister for New & Renewable Energy, Dr. Farooq Abdullah inaugurated it recently. The solar system has been designed for cooking food for devotees visiting the sansthan. The total cost of the solar steam system is estimated at Rs. 133.00 lakhs. A subsidy of Rs. 58.40 lakhs has been provided by the Ministry of New and Renewable Energy (MNRE) for it. The solar system will enable the sansthan to cook food for 20,000 people / day, resulting in an annual savings of one lakh kg of LPG, translating to nearly Rs.20,00,000 per year. The system has been installed within a record time of 10 months.
Steam cooking has been found to be very clean, efficient and hygienic way of cooking, especially when food is cooked for a large number of people. The Shirdi system generates about 3500 kg of steam every day, which is sufficient to cook food for about 20,000 people. The system has been designed in such a way that it will generate steam for cooking even in the absence of electricity to run the feed water pump for circulating water in the system. Some of the other large solar steam cooking systems installed include systems at Mount Abu in Rajasthan for 10,000 people/ day, at Tirupathi in Andhra Pradesh & Satyabhama university in Chennai each for 15,000 people/day
To promote such systems in the country, a scheme is in promotion through Ministry of New and Renewable Energy which provides support upto 50% of the cost of systems to non-profit making bodies and up to 35% to profit making bodies availing depreciation benefits. Over 40 systems covering a dish area of about 12,000 sq. m have been supported by the Ministry so far for various application. Though its major application is cooking only, it is also used to process heat in industries & laundry, sterilization, air conditioning etc.
India is full of sunshine during most part of the year. Solar radiation available during the daytime can be harnessed for generation of steam using automatically tracked solar concentrators. The concentrators focus the sunlight on receivers which convert water into steam flowing through them for use in the kitchen. The system comprising such concentrators is hooked up with existing boilers so as to take care of cloudy days/ non-sunshine hours. The system can help in saving 70 to 80% of the fuel being used for cooking or other steam applications. These installations can help religious places/ ashrams, schools, students’ hostels, canteens of various establishments etc.
SS/ PM
Monday, July 27, 2009
15% GROWTH OF INDIAN ECONOMY FOR NEXR 5 YEARS- AKASH PRAKASH
Fund manager and chief executive of SingaporePte Ltd Akash Prakash says he is cautious on global markets, but positive on India. In an interview, Prakash says he expects Indian markets to record a compounded annual growth rate of 15% in the next five years. Edited excerpts: Is there more juice in the global rally?
I am a little cautious on the global markets, actually. I think maybe the S&P 500 may hit 950-960 or 975, and I would be very surprised if it gets beyond that. Let's say maybe 1,000. But I am not of the camp that (says) you are going to see 1,100 or 1,250 on the S&P. I think the US markets will take a breather for some time here.
People are talking about those levels--1,1001,200--fuelled by li quidity and momentum. You don't agree?
I still feel that the US and OECD (Organization for Economic Cooperation and Development) economies have a serious economic problem and I think the investors are getting a little complacent in those markets. So I don't think that it will get there. But again, it is very difficult to predict where the liquidity is going to take the markets. It can take the markets to levels that you cannot anticipate. So that is possible. But fundamentally, I don't think that can happen. I think the markets will stabilize or remain range-bound at these levels.
Last time when there was a cor rection--it was an 810% dip--and that dip got bought. Do you expect the (next) correction to follow similar patterns?
Yes. Which is why I think you don't have a huge downside.
I think the investors are caught in the sense that a large amount of the real money or the long-term money has been under-invested in equities. They need to rebalance allocations.
The other aspect is the amount of money lying in MFs (mutual funds), as a percentage of the market cap, is the highest ever.
So there seems to be a lot of money waiting on the sidelines, both in terms of asset allocation as well as in terms of sitting in cash or quasi-cash kind of instruments. So I do see that any significant drop will be bought into.
What about India? The Nifty went to 4,000 swiftly after the Budget and then bounced from there. Do you see a strong base there in case a correction materializes?
I think in the next three months India will catch a breath. I think we had a huge move and I think we are going to be in a trading zone for some time because of the quantum of the move.
We need to digest some of these gains. So for the next three months, we are in trading zone. But I think from a three-five-year perspective, India is one of the most exciting markets and I genuinely believe that.
The stars are aligning for India from a long-term perspective and I think a lot of investors are beginning to understand that and for next three months we are going to be stuck in a range.
By when do you think we will get into an earnings growth trajectory which is supportive of reasonably good expansion in valuation multi ples and a bull market?
The second half of this year.
Because the base effect is so negative for the last three quarters, in the second half of this year, you will come up against very easy comparisons.
So, on a year-on-year basis, you will start to see strong earnings growth, which will excite the markets.
Even if we do consolidate for six months, is it likely that in 2010, the Sensex can get back to a new high...around 21,000?
It is tough to say. In 2010, 21,000 may be difficult. I think we should assume that in the next five years if we do 15% compounded for the markets, which is what our long-term trajectory for India is, I think we can.
On the downside for the Sensex, do you think that sub12,000 is possible? Or is it 8,000?
I think it's difficult to be precise about numbers. But 8,000 is not what I think. I think the general awareness among the investors is that this is a different kettle of fish in terms of this government.
I think they are talking a lot of positive things and hopefully you will see some action...
So I don't think that the range that we saw in early March is relevant anymore, unless you expect a total meltdown in the US, which I don't expect.
source:cnbctv18@livemint.com
I am a little cautious on the global markets, actually. I think maybe the S&P 500 may hit 950-960 or 975, and I would be very surprised if it gets beyond that. Let's say maybe 1,000. But I am not of the camp that (says) you are going to see 1,100 or 1,250 on the S&P. I think the US markets will take a breather for some time here.
People are talking about those levels--1,1001,200--fuelled by li quidity and momentum. You don't agree?
I still feel that the US and OECD (Organization for Economic Cooperation and Development) economies have a serious economic problem and I think the investors are getting a little complacent in those markets. So I don't think that it will get there. But again, it is very difficult to predict where the liquidity is going to take the markets. It can take the markets to levels that you cannot anticipate. So that is possible. But fundamentally, I don't think that can happen. I think the markets will stabilize or remain range-bound at these levels.
Last time when there was a cor rection--it was an 810% dip--and that dip got bought. Do you expect the (next) correction to follow similar patterns?
Yes. Which is why I think you don't have a huge downside.
I think the investors are caught in the sense that a large amount of the real money or the long-term money has been under-invested in equities. They need to rebalance allocations.
The other aspect is the amount of money lying in MFs (mutual funds), as a percentage of the market cap, is the highest ever.
So there seems to be a lot of money waiting on the sidelines, both in terms of asset allocation as well as in terms of sitting in cash or quasi-cash kind of instruments. So I do see that any significant drop will be bought into.
What about India? The Nifty went to 4,000 swiftly after the Budget and then bounced from there. Do you see a strong base there in case a correction materializes?
I think in the next three months India will catch a breath. I think we had a huge move and I think we are going to be in a trading zone for some time because of the quantum of the move.
We need to digest some of these gains. So for the next three months, we are in trading zone. But I think from a three-five-year perspective, India is one of the most exciting markets and I genuinely believe that.
The stars are aligning for India from a long-term perspective and I think a lot of investors are beginning to understand that and for next three months we are going to be stuck in a range.
By when do you think we will get into an earnings growth trajectory which is supportive of reasonably good expansion in valuation multi ples and a bull market?
The second half of this year.
Because the base effect is so negative for the last three quarters, in the second half of this year, you will come up against very easy comparisons.
So, on a year-on-year basis, you will start to see strong earnings growth, which will excite the markets.
Even if we do consolidate for six months, is it likely that in 2010, the Sensex can get back to a new high...around 21,000?
It is tough to say. In 2010, 21,000 may be difficult. I think we should assume that in the next five years if we do 15% compounded for the markets, which is what our long-term trajectory for India is, I think we can.
On the downside for the Sensex, do you think that sub12,000 is possible? Or is it 8,000?
I think it's difficult to be precise about numbers. But 8,000 is not what I think. I think the general awareness among the investors is that this is a different kettle of fish in terms of this government.
I think they are talking a lot of positive things and hopefully you will see some action...
So I don't think that the range that we saw in early March is relevant anymore, unless you expect a total meltdown in the US, which I don't expect.
source:cnbctv18@livemint.com
Tuesday, April 14, 2009
INDIA AND CHINA BY 2025- US INTELLIGENCE VIEW
Vice President releases the book ‘Challenge and Strategy – Rethinking India’s Foreign Policy
--------------------------------------------------------------------------------
13:51 IST
The Vice-President of India Shri M. Hamid Ansari released the book titled ‘Challenges and Strategy: Rethinking India’s Foreign Policy’ authored by Shri Rajiv Sikri, former IFS Officer at a function here today. Addressing on the occasion, he said that in a changing world, foreign policy tactics have to remain flexible. The National Intelligence Council of the United States, in its scenario building for 2025, states that in the next ten years China and India are expected to achieve near parity with the US in two different areas: India in scientific and human capital and China in government receptivity to business innovations. We therefore have to be patient and diligent, work our way up, and not be overtly anxious to get there prematurely.
The Vice President opined that most foreign policy analysts seem to overlook domestic factors and constraints. The pace of our progress would also depend on the speed at which we overcome domestic strives that retard our progress. These questions cannot be wished away; to do so successfully, we have to keep in mind and implement the basic principles of the Indian polity.
The book examines India’s current and looming foreign policy challenges from a strategic and policy oriented perspective. It analysis the long term factors and trends that should determine the country’s foreign policy formulation.
Following is the text of the Vice President’s address:
“Ambassador Sikri has written a book that compels introspection. His basic premise is that the world has changed and continues to change. India’s capabilities and capacities have also changed and are changing. This requires rethinking policy objectives and the methodology for attaining these objectives.
Sikri analyses India’s position in the world in terms of an arc of prosperity to the east, an arc of energy to the west, and an arc of instability extending from West to Central and South Asia. Cutting across there are vital sea lanes and communication channels. His suggestion is that India should be a major player in the complex geo-strategic game that is unfolding. He proposes that India ‘must play its role as conscience keeper of the world,’ and do so by ‘looking beyond the West and its troublesome neighbours like Pakistan and China and find its niche in the world.’
In general terms, Ambassador Sikri’s thesis may be optimistic, even idealistic. For one, states are propelled by Machiavellian impulses and cannot be conscience keepers. Professed nobility of sentiments and piety in purpose generally camouflages more mundane objectives. On specifics, however, he does identify lacunae in the approach that seems to have prevailed in the recent past. One example of it is West Asia; another is Central Asia.
An impression seems to have gained ground that West Asia, particularly the Persian Gulf region, is good for certain purposes only. These are (a) energy supplies (b) employment for our nationals (c) a limited amount of off-shore business. The wider strategic aspects of relationship with a region in proximate neighbourhood appear to have been put aside.
A case in point is Gulf security. The present arrangement of competitive security, based on inclusion and exclusion, is inherently unstable and is increasingly being recognised as such. Sikri suggests an ARF-like approach and proposes a Gulf Regional Forum for dialogue on the question.
In December 2005 a GCC foreign minister suggested a three-pronged gulf security framework. The first would be GCC, Yemen, Iraq and Iran as regional pillars; the second would be a unanimous Security Council guarantee for the sovereignty and territorial integrity of all Gulf Countries; the third is to strengthen the international component and necessitate engagement with ‘the emerging Asian powers, especially China and India.’
The proposal hints at an Indian role. This should be premised on our core concerns: (a) stability in the littoral states (b) freedom of navigation in the Persian Gulf and the Strait of Hormuz (c) security of sea lanes (d) availability of an interdiction capacity to safeguard Indian shipping. An essential prerequisite for such an engagement would be more vibrant political relations with all the states of the Persian Gulf littoral.
The book has a number of interesting insights on economic diplomacy and energy security. The chapter on ‘US and Nuclear Issues’ offers on pages 185-188 a perception somewhat at variance with the public picture.
In a changing world, foreign policy tactics have to remain flexible. The National Intelligence Council of the United States, in its scenario building for 2025, states that in the next ten years China and India are expected to achieve near parity with the US in two different areas: India in scientific and human capital and China in government receptivity to business innovations. We therefore have to be patient and diligent, work our way up, and not be overtly anxious to get there prematurely.
One last point. Most foreign policy analysts seem to overlook domestic factors and constraints. The pace of our progress would also depend on the speed at which we overcome domestic strives that retard our progress. These questions cannot be wished away; to do so successfully, we have to keep in mind and implement the basic principles of the Indian polity”.
***********
--------------------------------------------------------------------------------
13:51 IST
The Vice-President of India Shri M. Hamid Ansari released the book titled ‘Challenges and Strategy: Rethinking India’s Foreign Policy’ authored by Shri Rajiv Sikri, former IFS Officer at a function here today. Addressing on the occasion, he said that in a changing world, foreign policy tactics have to remain flexible. The National Intelligence Council of the United States, in its scenario building for 2025, states that in the next ten years China and India are expected to achieve near parity with the US in two different areas: India in scientific and human capital and China in government receptivity to business innovations. We therefore have to be patient and diligent, work our way up, and not be overtly anxious to get there prematurely.
The Vice President opined that most foreign policy analysts seem to overlook domestic factors and constraints. The pace of our progress would also depend on the speed at which we overcome domestic strives that retard our progress. These questions cannot be wished away; to do so successfully, we have to keep in mind and implement the basic principles of the Indian polity.
The book examines India’s current and looming foreign policy challenges from a strategic and policy oriented perspective. It analysis the long term factors and trends that should determine the country’s foreign policy formulation.
Following is the text of the Vice President’s address:
“Ambassador Sikri has written a book that compels introspection. His basic premise is that the world has changed and continues to change. India’s capabilities and capacities have also changed and are changing. This requires rethinking policy objectives and the methodology for attaining these objectives.
Sikri analyses India’s position in the world in terms of an arc of prosperity to the east, an arc of energy to the west, and an arc of instability extending from West to Central and South Asia. Cutting across there are vital sea lanes and communication channels. His suggestion is that India should be a major player in the complex geo-strategic game that is unfolding. He proposes that India ‘must play its role as conscience keeper of the world,’ and do so by ‘looking beyond the West and its troublesome neighbours like Pakistan and China and find its niche in the world.’
In general terms, Ambassador Sikri’s thesis may be optimistic, even idealistic. For one, states are propelled by Machiavellian impulses and cannot be conscience keepers. Professed nobility of sentiments and piety in purpose generally camouflages more mundane objectives. On specifics, however, he does identify lacunae in the approach that seems to have prevailed in the recent past. One example of it is West Asia; another is Central Asia.
An impression seems to have gained ground that West Asia, particularly the Persian Gulf region, is good for certain purposes only. These are (a) energy supplies (b) employment for our nationals (c) a limited amount of off-shore business. The wider strategic aspects of relationship with a region in proximate neighbourhood appear to have been put aside.
A case in point is Gulf security. The present arrangement of competitive security, based on inclusion and exclusion, is inherently unstable and is increasingly being recognised as such. Sikri suggests an ARF-like approach and proposes a Gulf Regional Forum for dialogue on the question.
In December 2005 a GCC foreign minister suggested a three-pronged gulf security framework. The first would be GCC, Yemen, Iraq and Iran as regional pillars; the second would be a unanimous Security Council guarantee for the sovereignty and territorial integrity of all Gulf Countries; the third is to strengthen the international component and necessitate engagement with ‘the emerging Asian powers, especially China and India.’
The proposal hints at an Indian role. This should be premised on our core concerns: (a) stability in the littoral states (b) freedom of navigation in the Persian Gulf and the Strait of Hormuz (c) security of sea lanes (d) availability of an interdiction capacity to safeguard Indian shipping. An essential prerequisite for such an engagement would be more vibrant political relations with all the states of the Persian Gulf littoral.
The book has a number of interesting insights on economic diplomacy and energy security. The chapter on ‘US and Nuclear Issues’ offers on pages 185-188 a perception somewhat at variance with the public picture.
In a changing world, foreign policy tactics have to remain flexible. The National Intelligence Council of the United States, in its scenario building for 2025, states that in the next ten years China and India are expected to achieve near parity with the US in two different areas: India in scientific and human capital and China in government receptivity to business innovations. We therefore have to be patient and diligent, work our way up, and not be overtly anxious to get there prematurely.
One last point. Most foreign policy analysts seem to overlook domestic factors and constraints. The pace of our progress would also depend on the speed at which we overcome domestic strives that retard our progress. These questions cannot be wished away; to do so successfully, we have to keep in mind and implement the basic principles of the Indian polity”.
***********
Thursday, April 2, 2009
2009-10 CHALLENGING YEAR- R B GOVERNOR
2009-10 will be more challenging : RBI Governor
RBI to manage Government Borrowing : D Subbarao
[New Delhi, 27 March 2009] The year 2009-10 will be more challenging as compared to the previous fiscal year, said Dr D Subbarao, Governor, Reserve Bank of India. While speaking at the CII's National Conference and Annual Session 2009, the governor said that painful adjustment is inevitable and the RBI's challenge would be to minimize the pain. He also assured that the government's large borrowing programme will be managed by the RBI so that interest rates are least impacted.
Giving a comprehensive yet complete picture of the crisis, Dr Subbarao pointed out that compared to the 1997 Asian Crisis India is now more integrated with the world economy, not just through trade linkages but also via equally deep financial linkages. A third transmission channel, in addition to the real and financial channels, is through confidence. Drying up of overseas financing, slackening demand and confidence loss in the economy are the factors that have led to growth moderating at a pace that is steeper than earlier thought, said the Governor.
While highlighting the Reserve Bank's response to the crisis, Dr Subbarao said that RBI has adopted a well directed approach of maintaining ample rupee and foreign exchange liquidity and credit flow to productive sectors through both conventional and unconventional measures. As a consequence of the measures, potential liquidity of Rs 390,000 crore has been injected into the system and call rates have been brought within the LAF corridor. However, the governor remained concerned that although banks' credit has expanded, the total flow of resources to the commercial sector has declined.
On evaluation of the government's response, Dr Subbarao pointed out that while in advanced economies, the crisis translated from the financial to the real sector, in emerging economies it was vice versa. Therefore even though the origin of the crisis across the world is common, the response is country specific. In India, healthy inflation outlook, lower crude prices, modest current account deficit, well functioning financial markets, minimal wealth loss and social safety net system will provide a cushion in these times of distress. He assured that when the recovery comes in India, it will be faster and swifter than in advanced economies.
Mr R Seshasayee, Past president, CII and Managing Director, Ashok Leyland Limited, while moderating the session, said that the current crisis presents a huge opportunity for Indian business leadership. The current challenge facing India is to reassess its growth model to ensure certain and sustainable growth. Amidst the possibility of an emerging bipolar world economy with China and U.S. at its centre stage, India should also seek a place without which it may face regional imbalance and geopolitical risks.
While delivering the concluding remarks, Mr K V Kamath, President, Confederation of Indian Industry, struck a positive note saying that if India could focus on its positives, it would be among the first ones to recover from the crisis.
RBI to manage Government Borrowing : D Subbarao
[New Delhi, 27 March 2009] The year 2009-10 will be more challenging as compared to the previous fiscal year, said Dr D Subbarao, Governor, Reserve Bank of India. While speaking at the CII's National Conference and Annual Session 2009, the governor said that painful adjustment is inevitable and the RBI's challenge would be to minimize the pain. He also assured that the government's large borrowing programme will be managed by the RBI so that interest rates are least impacted.
Giving a comprehensive yet complete picture of the crisis, Dr Subbarao pointed out that compared to the 1997 Asian Crisis India is now more integrated with the world economy, not just through trade linkages but also via equally deep financial linkages. A third transmission channel, in addition to the real and financial channels, is through confidence. Drying up of overseas financing, slackening demand and confidence loss in the economy are the factors that have led to growth moderating at a pace that is steeper than earlier thought, said the Governor.
While highlighting the Reserve Bank's response to the crisis, Dr Subbarao said that RBI has adopted a well directed approach of maintaining ample rupee and foreign exchange liquidity and credit flow to productive sectors through both conventional and unconventional measures. As a consequence of the measures, potential liquidity of Rs 390,000 crore has been injected into the system and call rates have been brought within the LAF corridor. However, the governor remained concerned that although banks' credit has expanded, the total flow of resources to the commercial sector has declined.
On evaluation of the government's response, Dr Subbarao pointed out that while in advanced economies, the crisis translated from the financial to the real sector, in emerging economies it was vice versa. Therefore even though the origin of the crisis across the world is common, the response is country specific. In India, healthy inflation outlook, lower crude prices, modest current account deficit, well functioning financial markets, minimal wealth loss and social safety net system will provide a cushion in these times of distress. He assured that when the recovery comes in India, it will be faster and swifter than in advanced economies.
Mr R Seshasayee, Past president, CII and Managing Director, Ashok Leyland Limited, while moderating the session, said that the current crisis presents a huge opportunity for Indian business leadership. The current challenge facing India is to reassess its growth model to ensure certain and sustainable growth. Amidst the possibility of an emerging bipolar world economy with China and U.S. at its centre stage, India should also seek a place without which it may face regional imbalance and geopolitical risks.
While delivering the concluding remarks, Mr K V Kamath, President, Confederation of Indian Industry, struck a positive note saying that if India could focus on its positives, it would be among the first ones to recover from the crisis.
INDIAN ENTREPRENEURS NEED CAPACITY TO DELIVER
CII and Harvard Business Publishing launch 'India's Global Powerhouses', a book authored by Prof. Nirmalya Kumar
[New Delhi, 01 April 2009] As India offers huge consumer base, a company with largest domestic operations in India automatically becomes a global enterprise. But in order to sustain this position Indian enterprises have to differentiate and innovate to the global standards. Indian Industry has to understand that in a global platform, cost advantage will no more work as much as inherent capacity to deliver, said Prof. Nirmalya Kumar, Director of Centre for Marketing, London Business School.
He was speaking at the launch of 'India's Global Powerhouses', a book authored by the professor. The session was organised jointly by the Confederation of Indian Industry (CII) and Harvard Business Press. Nirmalya Kumar is Professor of Marketing, Faculty Director for Executive Education, Director of Centre for Marketing and Co-Director of Aditya Birla India Centre at London Business School.
Addressing the gathering Professor Kumar, said that the book attempts to broaden Indian commerce perspective from a short cut based approach to globally sustainable management competency policy. He highlighted that Indian management pool holds the intelligence quotient, but should also claim associated intellectual property rights. An effective management will pave way for India gaining global management lead.
He further stated, the book profiles top Indian enterprises with truly global operations. The world today wants to learn about India's potential. The book conveniently positions the possibilities of working in this vast domestic market and how Indian companies are a success story globally.
Earlier giving the welcome address, Mr Vinay Hebbar, Country Head, Harvard Business Press stated this is professor's fourth book with the publishing group. The previous three books have been extremely successful in shaping management thoughts and ideas in India.
Delivering the vote of thanks, Mr. Vikram Badshah, Head - Public Policy, CII, stated that the book will transfer entire gambut of business approach, which traces the history of Indian industrialisation. The book will answer the quest for Indian business globally, and highlight the associated approaches for operations and marketing in the globalised world.
[New Delhi, 01 April 2009] As India offers huge consumer base, a company with largest domestic operations in India automatically becomes a global enterprise. But in order to sustain this position Indian enterprises have to differentiate and innovate to the global standards. Indian Industry has to understand that in a global platform, cost advantage will no more work as much as inherent capacity to deliver, said Prof. Nirmalya Kumar, Director of Centre for Marketing, London Business School.
He was speaking at the launch of 'India's Global Powerhouses', a book authored by the professor. The session was organised jointly by the Confederation of Indian Industry (CII) and Harvard Business Press. Nirmalya Kumar is Professor of Marketing, Faculty Director for Executive Education, Director of Centre for Marketing and Co-Director of Aditya Birla India Centre at London Business School.
Addressing the gathering Professor Kumar, said that the book attempts to broaden Indian commerce perspective from a short cut based approach to globally sustainable management competency policy. He highlighted that Indian management pool holds the intelligence quotient, but should also claim associated intellectual property rights. An effective management will pave way for India gaining global management lead.
He further stated, the book profiles top Indian enterprises with truly global operations. The world today wants to learn about India's potential. The book conveniently positions the possibilities of working in this vast domestic market and how Indian companies are a success story globally.
Earlier giving the welcome address, Mr Vinay Hebbar, Country Head, Harvard Business Press stated this is professor's fourth book with the publishing group. The previous three books have been extremely successful in shaping management thoughts and ideas in India.
Delivering the vote of thanks, Mr. Vikram Badshah, Head - Public Policy, CII, stated that the book will transfer entire gambut of business approach, which traces the history of Indian industrialisation. The book will answer the quest for Indian business globally, and highlight the associated approaches for operations and marketing in the globalised world.
Sunday, March 29, 2009
PM WITH CAPTAINS OF INDUSTRIES
PM’S remarks at the meeting with captains of industry
--------------------------------------------------------------------------------
New Delhi dt 28.March 2009
The Prime Minister, Dr. Manmohan Singh, had a meeting with the captains of industry in New Delhi today. Following is the text of Prime Minister’s remarks on the occasion:
“We had met in the first week of November last year, in the shadow of the meltdown which had originated from global macroeconomic imbalances, and problems in the financial sector of the developed world, and reached the shores of the rest of the world. India had also started experiencing the first shock waves of export demand attrition and constriction of capital inflows. Besides, the Indian financial sector was facing a liquidity shortage. Overall sentiment had also been dampened by the impact of the crisis on global and domestic capital markets and the consequent attrition of the savings of many individuals and corporates.
Many valuable suggestions were received in that meeting. These related to the need to maintain adequate liquidity, problems of credit flow and credit cost on the domestic and foreign fronts, special issues of certain stressed sectors, possible fiscal and other measures, and steps to ensure that domestic industry is not adversely affected by the dumping of products by other countries.
I had immediately after the meeting constituted an Apex Group under my Chairmanship to monitor the developments in the economy and take the necessary measures. Since then, the Government and the RBI have, from time to time, come out with measures which were considered necessary and possible. The RBI has steadily adjusted the policy rates downwards and has announced a number of steps in support of MSMEs, NBFCs, and the housing and export sectors. Guidelines have also been issued for restructuring of loans, increasing the rates on non-resident deposits and relaxing the criteria for external commercial borrowings. The Government has announced two stimulus packages, one in December 2008 and the other in January 2009. In these packages, and in subsequent announcements in the Interim Budget, a number of measures have been taken to provide relief to exporters; CENVAT, service tax, and duty concessions to industry; and support to infrastructure projects, and to increase Government expenditure despite an elevated level of fiscal deficit. The Government has also been in touch with banks and has been monitoring the sectoral credit flows, especially by the public sector banks. The Cabinet Secretary has been interacting with the Chief Secretaries of States, as almost the entire additional budgeted amounts have been released to the States and their role in ensuring expenditures on ground is now crucial.
While we need to bear in mind that the time taken for these steps to take effect varies across measures and sectors, there are signs of improvement in sectors like steel and cement. The auto sector after a difficult patch seems to be showing signs of recovery. Food grain production for 2008-09 is likely to be in excess of 228 million tonnes. The rural demand for goods and services appears quite robust and the outlook in the agricultural sector gives room for optimism.
At the same time, we are aware of the problems that persist in certain sectors and sub-sectors, particularly where export dependence is high. We are monitoring these sectors. We are aware that a big push to infrastructure would have a counter-cyclical influence and have taken steps to ensure that this happens in 2009-10 and beyond. On the credit front, the figures of the RBI at the end of February 2009 indicate that while the credit growth of public sector banks on a year-on-year basis this year has been 23 per cent against 21.9 per cent of the corresponding period of 2007-08, the credit growth of private banks and foreign banks has been of the order of one-third to one-fourth of what it was a year ago. While public sector banks have reduced the prime lending rates in the last three months between 150 and 200 basis points, other Scheduled Commercial Banks are yet to respond in equal measure. With ample liquidity and low inflation, there is scope perhaps for a further moderation in interest rates. Domestic credit flow for productive needs has to be definitely maintained at reasonable cost.
We are, therefore, in a situation where on the one hand we are decidedly better placed than most countries in the world, on the other hand, there seems to be uncertainty on how developments abroad, positive and negative, will affect us. To tackle a regime of low inflation and demand uncertainties across sub-sectors of the real economy, to ensure that the financial sector remains healthy and supportive, to husband foreign exchange reserves responsibly, to sustain a high level of expenditure bearing in mind the need for fiscal discipline, and to act continuously to improve general sentiment are challenges that we confront as a nation. We need to be particularly sensitive to the impact of the slowdown on the weakest in the organized as well as the unorganized sectors. We must meet the challenge of job losses caused by the slowdown. These are challenges which can be understood and met only if all the stake-holders concerned continuously exchange ideas and support each other with confidence in the future, and concern for the well being of all. I have great faith and confidence in India’s entrepreneurs and particularly in the wisdom and experience of captains of industry assembled here today to meet the challenges confronting our economy. The world today looks at India with respect and hope: respect for our calibrated reforms which have resulted in growth with justice, and hope that India would be an engine of global growth for the world economy. I am confident that we will all work together to fulfil these expectations, and secure the growth essential for our people. I would now request your comments and your assessment of the present economic situation and the steps taken so far and to suggest what needs to be done in the immediate as well as medium term future.”
Source:PIB
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New Delhi dt 28.March 2009
The Prime Minister, Dr. Manmohan Singh, had a meeting with the captains of industry in New Delhi today. Following is the text of Prime Minister’s remarks on the occasion:
“We had met in the first week of November last year, in the shadow of the meltdown which had originated from global macroeconomic imbalances, and problems in the financial sector of the developed world, and reached the shores of the rest of the world. India had also started experiencing the first shock waves of export demand attrition and constriction of capital inflows. Besides, the Indian financial sector was facing a liquidity shortage. Overall sentiment had also been dampened by the impact of the crisis on global and domestic capital markets and the consequent attrition of the savings of many individuals and corporates.
Many valuable suggestions were received in that meeting. These related to the need to maintain adequate liquidity, problems of credit flow and credit cost on the domestic and foreign fronts, special issues of certain stressed sectors, possible fiscal and other measures, and steps to ensure that domestic industry is not adversely affected by the dumping of products by other countries.
I had immediately after the meeting constituted an Apex Group under my Chairmanship to monitor the developments in the economy and take the necessary measures. Since then, the Government and the RBI have, from time to time, come out with measures which were considered necessary and possible. The RBI has steadily adjusted the policy rates downwards and has announced a number of steps in support of MSMEs, NBFCs, and the housing and export sectors. Guidelines have also been issued for restructuring of loans, increasing the rates on non-resident deposits and relaxing the criteria for external commercial borrowings. The Government has announced two stimulus packages, one in December 2008 and the other in January 2009. In these packages, and in subsequent announcements in the Interim Budget, a number of measures have been taken to provide relief to exporters; CENVAT, service tax, and duty concessions to industry; and support to infrastructure projects, and to increase Government expenditure despite an elevated level of fiscal deficit. The Government has also been in touch with banks and has been monitoring the sectoral credit flows, especially by the public sector banks. The Cabinet Secretary has been interacting with the Chief Secretaries of States, as almost the entire additional budgeted amounts have been released to the States and their role in ensuring expenditures on ground is now crucial.
While we need to bear in mind that the time taken for these steps to take effect varies across measures and sectors, there are signs of improvement in sectors like steel and cement. The auto sector after a difficult patch seems to be showing signs of recovery. Food grain production for 2008-09 is likely to be in excess of 228 million tonnes. The rural demand for goods and services appears quite robust and the outlook in the agricultural sector gives room for optimism.
At the same time, we are aware of the problems that persist in certain sectors and sub-sectors, particularly where export dependence is high. We are monitoring these sectors. We are aware that a big push to infrastructure would have a counter-cyclical influence and have taken steps to ensure that this happens in 2009-10 and beyond. On the credit front, the figures of the RBI at the end of February 2009 indicate that while the credit growth of public sector banks on a year-on-year basis this year has been 23 per cent against 21.9 per cent of the corresponding period of 2007-08, the credit growth of private banks and foreign banks has been of the order of one-third to one-fourth of what it was a year ago. While public sector banks have reduced the prime lending rates in the last three months between 150 and 200 basis points, other Scheduled Commercial Banks are yet to respond in equal measure. With ample liquidity and low inflation, there is scope perhaps for a further moderation in interest rates. Domestic credit flow for productive needs has to be definitely maintained at reasonable cost.
We are, therefore, in a situation where on the one hand we are decidedly better placed than most countries in the world, on the other hand, there seems to be uncertainty on how developments abroad, positive and negative, will affect us. To tackle a regime of low inflation and demand uncertainties across sub-sectors of the real economy, to ensure that the financial sector remains healthy and supportive, to husband foreign exchange reserves responsibly, to sustain a high level of expenditure bearing in mind the need for fiscal discipline, and to act continuously to improve general sentiment are challenges that we confront as a nation. We need to be particularly sensitive to the impact of the slowdown on the weakest in the organized as well as the unorganized sectors. We must meet the challenge of job losses caused by the slowdown. These are challenges which can be understood and met only if all the stake-holders concerned continuously exchange ideas and support each other with confidence in the future, and concern for the well being of all. I have great faith and confidence in India’s entrepreneurs and particularly in the wisdom and experience of captains of industry assembled here today to meet the challenges confronting our economy. The world today looks at India with respect and hope: respect for our calibrated reforms which have resulted in growth with justice, and hope that India would be an engine of global growth for the world economy. I am confident that we will all work together to fulfil these expectations, and secure the growth essential for our people. I would now request your comments and your assessment of the present economic situation and the steps taken so far and to suggest what needs to be done in the immediate as well as medium term future.”
Source:PIB
INDIAN ECONOMY OFF ITS HIGH GROWTH- MONTEKSINGH
New Delhi, 27 March,2009] Giving the outlook on the economy, Dr. Montek Singh Ahluwalia, Deputy Chairman, Planning Commission, Government of India, said that the ongoing crisis, which is probably the worst crisis in last 60 years, will push the Indian economy off its higher growth trajectory, that it has seen in last 5 years. Delivering the special address at the CII's National Conference and Annual Session 2009, he alluded that although some painful adjustment is inevitable in the current difficult time, the government is trying its best to minimize the pain.
Dr Ahluwalia, while giving an overview of the next financial year, said that 2009-10 will be significantly worse than the previous fiscal year. He however added that recovery is expected to begin sometime around second quarter of 2009-10. He noted that uncertainty is expected to reduce and results will start showing up of the various measures taken by the government in few months to come. This in turn can lead to the bottoming out of the crisis in a couple of months.
Differentiating the current crisis from the previous ones, Dr Ahluwalia pointed out that the crisis is being transmitted to India from foreign channels and the positive side is that Indian rural economy has not been as adversely affected as the urban one. He also emphasized that the crisis presents an opportunity for Indian Business leaders to introspect and optimize the present opportunity to emerge stronger for the more competitive times to come.
Dr Arvind Virmani, Chief Economic Advisor, Ministry of Finance, Government of India, ruled out any possibility of a sustained deflation in the economy. He explained that Consumer price inflation, having higher weightage of food items, is still in double figures and would come down rather slowly. Consumer Price deflator used for GDP is more indicative of inflation and is not expected to be anywhere near 0%, let alone deflation, opined Dr Virmani.
Giving a clearer picture on fiscal deficit, both Dr Ahluwalia and Dr Virmani said that fiscal deficit is expected to widen by 3.5 - 4% as compared to previous year. The higher deficit is a deliberate step by the government in order to carry out more spending to revive the economy. The increased spending by the government will not crowd out the private spending in the shorter run and once the demand revives, government would work towards achieving the targets set out by the FRBM Act.
Its important to distinguish between market regulation and institutional regulation, said Dr Virmani. According to him, India has institutional regulations in place, while it has ample room to move faster as far as market regulations are concerned. He reiterated that for revival of the fragmented markets, which resulted from the crisis, the government has carefully implemented well coordinated fiscal and monetary measures. Dr Virmani further added that India Inc would perhaps face a challenge of slackening demand for exports and thus it's important for them to undertake a diversification strategy.
Delivering the concluding remarks, Mr Sunil Kant Munjal, Past President, CII and Chairman, Hero Corporate Service Limited, expressed hope that India would be among the first ones to emerge out of the crisis.
Dr Ahluwalia, while giving an overview of the next financial year, said that 2009-10 will be significantly worse than the previous fiscal year. He however added that recovery is expected to begin sometime around second quarter of 2009-10. He noted that uncertainty is expected to reduce and results will start showing up of the various measures taken by the government in few months to come. This in turn can lead to the bottoming out of the crisis in a couple of months.
Differentiating the current crisis from the previous ones, Dr Ahluwalia pointed out that the crisis is being transmitted to India from foreign channels and the positive side is that Indian rural economy has not been as adversely affected as the urban one. He also emphasized that the crisis presents an opportunity for Indian Business leaders to introspect and optimize the present opportunity to emerge stronger for the more competitive times to come.
Dr Arvind Virmani, Chief Economic Advisor, Ministry of Finance, Government of India, ruled out any possibility of a sustained deflation in the economy. He explained that Consumer price inflation, having higher weightage of food items, is still in double figures and would come down rather slowly. Consumer Price deflator used for GDP is more indicative of inflation and is not expected to be anywhere near 0%, let alone deflation, opined Dr Virmani.
Giving a clearer picture on fiscal deficit, both Dr Ahluwalia and Dr Virmani said that fiscal deficit is expected to widen by 3.5 - 4% as compared to previous year. The higher deficit is a deliberate step by the government in order to carry out more spending to revive the economy. The increased spending by the government will not crowd out the private spending in the shorter run and once the demand revives, government would work towards achieving the targets set out by the FRBM Act.
Its important to distinguish between market regulation and institutional regulation, said Dr Virmani. According to him, India has institutional regulations in place, while it has ample room to move faster as far as market regulations are concerned. He reiterated that for revival of the fragmented markets, which resulted from the crisis, the government has carefully implemented well coordinated fiscal and monetary measures. Dr Virmani further added that India Inc would perhaps face a challenge of slackening demand for exports and thus it's important for them to undertake a diversification strategy.
Delivering the concluding remarks, Mr Sunil Kant Munjal, Past President, CII and Chairman, Hero Corporate Service Limited, expressed hope that India would be among the first ones to emerge out of the crisis.
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