CUT AIRPORT CHARGES

The IATA today appealed to the Narendra Modi-led government to slash taxes, restrain private airport operators from levying high charges and relax "excessive" regulations in the aviation industry to maximise India's full potential to generate economic growth. "You are a great country, a sleeping economic giant. You have great opportunities and capabilities that very few countries have. But unfortunately, the previous administration did not make the maximum use of the hidden Indian potential," Akbar Al Baker, CEO of Qatar Airways who is the President of the 70th International Air and Transport Association (IATA) assembly being held here said. "I was very touched to hear the speech of Prime Minister Modi when he said that if each Indian takes one step forward, that will be 1.2 billion steps and this really is correct for India. "And for the aviation industry in India, the potential is so huge that even if you allotted capacity to every airline that is applying to fly to India, you will still have load factors in excess of 80 per cent. "So I would urge Prime Minister Modi's government to look at aviation as a very important tool to generating economic growth in India because it is only aviation that will bring you trade, tourism, in return bring more employment and bring economic prosperity for the Indian people who have upto now been deprived so much economic opportunities that they have in their country. "I hope this is a very strong message to whoever is listening," Al Baker said. IATA, the trade association for world's airlines, Director General & Chief Executive Officer Tony Tyler said he too had "quite a long wish-list for the new government coming to power in India." "To share a few, it would be to "stop political interference" in the industry, reducing excessive regulations, slashing of state taxes on jet fuel and to build the Navi Mumbai airport. "I hope to visit India in not too long and perhaps discuss those and other ways (to help the aviation industry) with the new government and we wish the new government every success in maximising the potential of the Indian aviation industry," Tyler said. They were replying to a question on their wish-list for the new government to develop Indian aviation. 
Both Tyler and Al Baker also hit out at the excessive charges being levied on the airline industry in India with the former saying "governments are basically selling off airport franchises at hugely valued prices and ... often this is because private companies see huge opportunities to take advantage of the poor regulations and overcharge the airlines and their passengers." "Yes they invest money in developing airports but because of poor regulations, we (airlines) end up paying excessive amounts of money to the (airport) developers. Sometimes the developers pay huge amounts of royalty to the government as in the case of India. "And the money wholly comes from the airlines and the passengers and this is something that we are very concerned about. The regulatory regime is not strong enough to control the charges levied by the airports. That's the case in India." Tyler said. Al Baker also said that most importantly, the Indian government should "rein in the private airport owners, restricting them from levying the strong charges which the IATA DG (Tyler) has already raised several times with the authorities because it is untenable for airlines who already have very low margins to keep on paying such high airport charges.... which are unnecessary. "The (private) owners of these airports should also realise that they will get better returns (through airlines increasing operations) than from levying high charges." Earlier in this inaugural speech at the two-day IATA annual general meeting, Tyler said "in Asia and Latin America, governments are aggressively pursuing public-private partnerships for airport development. We have seen enough failures of poorly structured initiatives to be deeply concerned about the consequences." Speaking on the profitability of the industry in Asia-Pacific,he said the airlines in this regional were expected to earn USD 3.2 billion in 2014, compared to USD 2.0 billion in 2013. Profit per passenger in this region was below the global industry average at USD 2.98, as was the net margin of 1.6 per cent. Passenger demand in the region was expected to experience a healthy growth of 7.4 per cent. 

CADBURY CHACOLATES FREE OF PORK

Cadbury chocolates sold in Malaysia have been cleared of containing pork, the country's top Islamic body said today in a statement that should lessen calls for a boycott of the British confectionery company after earlier tests suggested two types of chocolate bar contained pig DNA. The now apparently discredited findings last month by the Ministry of Health sparked outrage among some Islamist groups in Malaysia, who called for a boycott of all Cadbury's products. Indonesia, the world's most populous Muslim country, is also testing Cadbury chocolates, although the two products at issue in Malaysia are not sold there. Under Islamic Shariah law, halal products should not contain pork or alcohol. Retailers in Muslim countries, as well as consumers, are highly likely to shun any product that is subject to questions over its halal status. The Malaysian Islamic Development Department said new tests on Dairy Milk Hazelnut and Dairy Milk Roast Almond bars as well as other products taken from Cadbury's factory showed no traces of pork. The department, which had suspended the "halal" certification of the two Cadbury bars, said it will review that decision after a visit to the factory for further tests on the production line to ensure the company fully complies with requirements. The Association of Islamic Consumers was maintaining its call for a boycott of Cadbury but said it would be rescinded if the health ministry acknowledged its test results were wrong. Noor Hisham Abdullah, the director-general of the health ministry, said there could be a "possibility of contamination" from another source as the initial samples didn't come direct from the Cadbury factory. He said the ministry would investigate. Noor Hisham also said there was a need to have one set of standards for lab testing to ensure the results are accepted by all parties. Cadbury Malaysia said last week it had proactively recalled the products alleged by the Ministry of Health to be contaminated.

SINGAPORE TICKET @ Rs. 5999/-

Singapore Airlines' budget arm Tigerair today announced one-way all-inclusive special fares for Singapore-bound passengers, starting from Rs 5,999 from its six destinations in the country. The bookings under these special fares can be made within seven days starting from today with a travel validity period between July 7 to October 22, 2014, Tigerair said in a release here. "Singapore is a popular destination among Indians. With our special one-way fares to Singapore from India, we aim to provide our passengers greater value for money to enrich their travel experience," Tigerair commercial director Robert Yang said in the release. Tigerair operates 44 weekly flights from six Indian cities- Bangalore, Chennai, Hyderabad, Kochi, Thiruvananthapuram and Tiruchirappalli. Besides, it also has a three-year interline partnership with domestic no-frills airline SpiceJet for 14 cities, which are Ahmedabad, Bhopal, Chennai, Kolkata, Coimbatore, Delhi, Goa, Indore, Mangalore, Madurai, Pune, Bengaluru, Tirupati and Visakhapatnam. The airline also connects to Bali, Bangkok, Hong Kong, Jakarta, Kuala Lumpur, Manila, Perth, Taipei via Singapore.

CASHBACK, LOWER PRICES FUELS ONLINE SHOPPING

Schemes like cashback and lucrative saving offers play an important role in encouraging consumers to shop online, a study by cashback and coupons site Cashkaro.com said.
The Online Shopping Trends Survey also said that lower prices and convenience are the other factors that encourage online shopping.
"Ninety-five per cent of the online shoppers covered agreed that they were attracted to cashback concept ... 27 per cent said it was cashback and deals because of lucrative savings coming through," the survey report revealed.
Twenty-five per cent respondents said lower prices attracted them while 22 per cent said convenience was a key encouraging factor to shop online, it added.
The survey covered over 3,200 online shoppers and fans of Cashkaro to understand Indian shopper's behaviour.
Sixteen per cent of the respondents chose variety of choices whereas 10 per cent preferred to shop online for the Easy Returns Policy of online retailers, the survey said.
More than 40 per cent of the respondents said they spend Rs 10,000 on an average each year and close to 10 per cent shoppers spend upwards of Rs 50,000 online, it added.
While, 30 per cent respondents said price was the most important criteria when they shop online, quality of Product was an important point with 29 per cent.
"With this survey, our belief that India is price sensitive, has been proved again and Indians are now realising the potential of Cashback and Coupons a lot more," Cashkaro founder Rohan Bhargava said.
India's e-commerce market projected to grow manifold in future with improving Internet infrastructure, it will become easier for the country's nearly 200 million online population to shop on–the-go, he added.
According to industry body IAMAI, the e-commerce market grew by 33 per cent to Rs 62,967 crore in 2013 and is expected to see a further rise over the next five years.

INDIANS SEE BRANDS AS ASPIRATIONAL SYMBOLS

More and more consumers in India now prefer to go for branded products, with 82 per cent of them looking at brands as aspirational symbols and improved standard of living, according to a recent study. "About 82 per cent consumers in India are increasingly expecting brands to enhance personal well-being as brands become aspirational symbols of their improved standard of living. The global average is 70 per cent while Asia's average is 77 per cent," according to Havas Media Group's '2013 Meaningful Brands' study. A lot of people in India, however, tend to believe that overall intentions of brands are a bit sceptical of their communication creating huge opportunities for brands to make a real, tangible meaningful difference, the study said. "The India findings highlight deep customer involvement with brands. Meaningful - today is real business, delivering what matters when, in the truest economic and social sense. It drives brands to establish relationship connections with their customers directed towards sustained personal, societal and financial success," Anita Nayyar, Havas Media Group CEO, India and South Asia, said. India's top three meaningful brands in 2013 are LIC, Britannia and Cadbury, the study added. The top three brands are followed by Sony, Samsung, Parle-G, Unilever, Tata Motors, Airtel, Hyundai, LGE and Maruti, which have the highest attachment, it added. Meanwhile, the top five meaningful brands globally are Google, Samsung, Microsoft, Nestle and Sony, it said.
The study looked into 13 dimensions: impact of the brand's 'Marketplace' benefits alongside its impact on 12 different areas of 'well-being' (personal and collective), for a comprehensive view of its effect on quality of life. The sixth edition of the Meaningful Brands study measured 13 dimensions and covered 700 brands and over 1,34,000 consumers in 23 countries. The study further found that more meaningful global brands are likely to come from emerging than western markets where brands need to reinvent themselves to reconnect with people, to avoid getting commoditised.
"This presents huge opportunities for existing and new brands to establish meaningful connections with their customers in India. Here consumers are still warming up to brands and core categories like Food and Beverages brands are seen as meaningful," Havas Media India Managing Director Mohit Joshi added.

INFLATION ALIGNMENT WITH IT EXEMPTION LIMIT

Taxpayers want the IT-exemption limit be fixed keeping in view the price rise in the last five years and the taxation rules for salaried employees be simplified in the upcoming budget, a survey report said. "The exemption limit should be adjusted at least for the inflation over the last five years and the rules for taxation of salaried employees should be reviewed in light of inflationary burden, high cost of housing, medical and education," said most respondents covered in Assocham survey. Section 80C of the Income Tax Act allows certain investments and expenditure to be tax-exempt. The total limit under this section is Rs 1 lakh. Many small savings schemes like National Savings Certificates and Public Provident Fund are included in this. Observing that the tax administration's sole aim remains maximisation of the collections from a small group of people, the survey of about 3,000 assessees noted that the policies of the administration are opaque while the refund process is fraught with complications. "The feedback suggests as if the government is unwilling to make refunds for various reasons. Moreover, very little effort has been made to widen the tax base and reduce the tax rates," Assocham Secretary General D S Rawat said. Taking into account the enormous increase in the cost of housing properties, the limit of interest paid on home loans needs to be revised to Rs 5 lakh. This would provide impetus to labour intensive housing sector as well, the survey said. Similarly, the limit on premium paid on medical insurance under Section 80D should be revised as it has not kept pace with the changed ground realities, it added. Section 80D of the Income Tax Act provides for tax deduction from the total taxable income for the payment (by any mode other than cash) of medical insurance premium paid by an individual or an HUF (Hindu Undivided Family). Reflecting the ground realities, rate of household savings has come down from 25.2 per cent in 2009-10 to 21.9 per cent in 2012-1. Realising this fall, encouraging domestic savings as an important driver of investment and growth has become crucial, the survey said.
The survey was conducted in major cities like Delhi-NCR, Mumbai, Kolkata, Chennai, Ahmedabad, Hyderabad, Pune, Chandigarh and Dehradun, among others. About 300 income tax assessees were covered from each city on an average.
Almost 56 per cent of the survey respondents fall under the age bracket of 25-29 years, followed by 30-39 years (26 per cent), 40-49 years (16 per cent), 50-59 years and 60-65 years (2 per cent).
The survey covered people working in 18 sectors, with maximum employees from the IT/ITes sector (17 per cent), followed by 11 per cent from the financial services sector, 9 per cent from engineering and 8 per cent from telecom sector.

FRENCH WINE MAKER LOOK AT ASIAN MARKETS

Faced with a stalling China market, French winemakers are working to entice a growing middle class in Asia away from spirits and beer -- but face big obstacles in doing so. Chinese wine shipments and consumption fell for the first time in a decade in 2013. The drop comes as Beijing reins in luxury spending and extravagant banquets, against the backdrop of a slower economy, and an anti-graft campaign backed by President Xi Jinping to root out official corruption. Winemakers and industry executives say that while the slowdown will not prevent people from drinking, the focus may now shift to mid-range wine and spirits. In its 2014 outlook, trade body the Federation des Exportateurs de Vins & Spiritueux de France (FEVS) warned that the country's global 7.6 billion euro (USD 10.3 billion) wine export industry needed to gain market share in places where a new middle class was expanding. "The growth of our exports depend on the opening of new markets: India, Vietnam, Thailand," it said. While "China remains the main engine of growth, the perspectives of new consumers" in Asia are increasingly important, said Guillaume Deglise, CEO of Vinexpo, which this week staged Asia's largest annual gathering of global wine and spirit producers and merchants held in Hong Kong. To capture new markets, winemakers need to navigate Asia's "great diversity of cultures, religions, climates and consumption patterns," said Gautier Salinier, sales manager in Asia for the Plaimont cooperative of wine producers based in Southwest France. India perhaps offers the greatest potential but also the biggest obstacles. Wine consumption among its 1.2 billion population is expected to grow 30 per cent by 2016, according to export agency Ubifrance.

MARKETS OVERCOME MAY FEAR

SENSEX GAIN BY 1800 POINTS

RECORD SPREE

The popular stock market adage 'Sell in May and go away' proved to be wrong for Indian stocks during May this year as the benchmark Sensex gained a whopping 1,800 points, its best monthly gain in recent times. Indian stocks rose sharply and scaled new record highs last month, with the benchmark index Sensex rising above 25,000 on hopes of economic revival after NDA stormed to power at the Centre and Narendra Modi became the new Prime Minister. The 30-scrip Sensex gained 1,799.54 points, or 8 per cent, to end at 24,217.34 last month, breaking the May jinx. Domestic stock markets bucked the trend of a downfall this year that was seen for three consecutive years in the month of May till 2012. The Sensex had gained 24.53 points in May 2013. It saw an over 6 per cent drop in May 2012. In 2010 and 2011, Sensex fell around 2.5 per cent in May. The BSE Sensex touched a record high of 25,375.63 on May 16 this year, the day results for the general election gave Bharatiya Janata Party a clear mandate. "BJP coming into power with full majority has enthused markets. And as the bull run continues, the euphoria around the Modi government helped break the jinx of Sell in May go away," said Ashika Stock Brokers, Research Head, Paras Bothra. The strong upmove in the market has also been supported with smart foreign fund inflows. Overseas investors have pumped in nearly Rs 34,000 crore in the Indian market in May. In previous years, May has been mostly bad for the stock markets globally, but the Indian markets mostly swung between gains and losses during this month till 2009. The "Sell in May and go away" strategy says that an investor who sells stock holdings in May and gets back into the equity market in November, avoiding the typically volatile May-October period, would be better off than an investor who stays in equities throughout the year.

DRUGS, PROSTITUTION MOVE FORWARD UK's ECONOMY

Illegal drugs and prostitution contribute around 10 billion pounds a year or nearly one per cent to Britain's economy, according to the first official estimate of the shadowy activities in the country.
Illegal drugs and prostitution boosted the UK economy by 9.7 billion pounds – equal to 0.7 per cent of gross domestic product – in 2009, according to the first official estimate by the Office for National Statistics (ONS).
More than half of the 10 billion pounds - 5.3 billion - is attributable to prostitution while illegal drugs are worth 4.4 billion pounds, the ONS said.
"For the first time official statisticians are measuring the value to the UK economy of sex work and drug dealing – and they have discovered these unsavoury hidden-economy trades make roughly the same contribution as farming – and only slightly less than book and newspaper publishers added together," The Guardian reported today.
Other illegal activities, such a the smuggling of alcohol and tobacco, are already included in GDP and make up some 300 million pounds.
The inclusion of illegal drugs and prostitution is part of radical changes being made to European Union regulations on calculating the Gross Domestic Product.
According to the estimates there were 60,879 prostitutes in the UK in 2009, who had an average of 25 clients per week – each paying on average 67.16 pounds per visit.
The statisticians say there were 2.2 million cannabis users in the UK in 2009, consuming weed worth more than 1.2 billion pounds. They calculate that half of that was home- grown – costing 154 million pounds in heat, light and "raw materials" to produce.
"In terms of the new concepts coming in, illegal activities is the biggest," said Graeme Walker, head of national accounts at the ONS.
"For the rest of GDP we do things like sending questionnaires to businesses, asking them how much they have earned.
"We don't think it would be right to directly collect information on [illegal drugs and prostitution] and we have no plans to contact people involved in these activities.
"We think our data fits the purpose for giving people an idea of the size of illegal activity," The Telegraph quoted Walker as saying.
The more inclusive approach brings the ONS into line with European Union rules, and will eventually allow comparisons of the size of the shadow economy in different member states.

FOREX RESERVES $ 312.656 BILLION

After weeks of robust gains, India's foreign exchange reserves declined by a whopping USD 2.268 billion to USD 312.656 billion in the week ended May 23, mainly on account of a massive drop in currency assets. In the previous week, the total reserves had risen by USD 1.093 billion to USD 314.92 billion. Foreign currency assets (FCAs), a major constituent of the overall reserves, dropped by USD 2.255 billion to USD 285.560 billion in the period, Reserve Bank said in a statement here. FCAs, expressed in dollar terms, include the effect of appreciation/depreciation of the non-US currencies such as the euro, pound and yen held in reserves. The gold reserves remained unchanged at USD 20.965 billion, as per the RBI data. The special drawing rights declined by USD 9.8 million to USD 4.453 billion, and India's reserve position with the IMF dipped USD 3.7 million to USD 1.677 billion in the period under review, the apex bank said.