SENSEX DOWN 167 POINTS

The benchmark S&P BSE Sensex dropped almost 167 points to a three-week low today after RBI Governor Raghuram Rajan's comments on inflation raised concerns about interest rates. Banking and realty sector stocks, which are sensitive to interest rates, declined along with metal and capital goods counters. Sensex heavyweights that fell included ICICI Bank, HDFC Bank, BHEL and Tata Steel. The 30-share index resumed on a positive note and touched a high of 19,981.57 on an initial rally in Asian stocks. Profit-booking in select counters led the index lower to settle at 19,727.27, a fall of 166.58 points or 0.84 per cent -- the lowest level since closing at 19,270.06 on September 6. The Sensex lost 536.44 points, or 2.65 per cent over the past five trading sessions, the first weekly drop in five. The 50-share CNX Nifty index on the NSE dropped 49.05 points, or 0.83 per cent, to 5,833.20. The SX40 index on the MCX Stock Exchange closed at 11,740.84, down 38.32 points. Rajan, who was in Frankfurt to receive the Deutsche Bank prize for Financial Economics 2013, said there is still some inflation in India after stripping out the effects of food and energy and other factors are also driving prices higher. Asked about the RBI's policy stance, Rajan said, "At this point we are neutral, we will see how things develop." The RBI raised the repo rate last week, saying it was needed to bring down inflation to more tolerable levels. "Markets were negatively surprised last week by the 25 bps repo rate hike by the RBI," said Dipen Shah, head of the Private Client Group Research at Kotak Securities. "Consequently, most of the banking and other interest rate sensitive stocks under-performed for the week." Foreign institutional investors bought a net Rs 172.15 crore of shares yesterday, according to provisional data from the stock exchanges. In other Asian markets, key indices in China, Hong Kong, Singapore, South Korea and Taiwan closed higher while Japan closed lower. US jobless claims unexpectedly fell and Japan's inflation accelerated to the fastest pace since 2008.

POWER SHORTAGES COST INDIA $ 68 BILLION

India loses USD 68 billion, or about Rs 4,14,800 crore of its Gross Domestic Product due to electricity shortage.
"There is strong correlation between power consumption and the GDP of the country. Power shortages currently cost India a GDP loss of USD 68 billion (0.4 per cent of total GDP)," said a Ficci report on Power Transmission.
Transmission bottlenecks are an important reason for these shortages. Since demand and generation capacity are both expected to increase in the future, transmission constraints need to be addressed urgently, said the report released today.
The transmission sector is already lacking in investments made so far. Although 50 per cent of the amount invested in power generation should be invested in transmission, in India this figure stands at a mere 30 per cent.
The report said that one of the important reasons for the lagging transmission capacity in the country is the Aggregate Technical and Commercial losses being faced by the sector.
AT&C losses in India stood at 26 per cent, which was much higher than the global average of 9 per cent in 2010.
"Another important issue in the transmission sector has been the inability to evacuate excess power from surplus regions and channel it to regions that face shortages," it said.
With the future investments in the sector planned to be USD 75 billion for the two Five Year Plans (from 2012-2022) the investments in the transmission sector certainly need to be jacked up significantly, the report added.
The investment required in the power transmission sector is about USD 35 billion, out of which about USD 19 billion is planned to come from Power Grid Corp. The remaining USD 16 billion would have to be secured from private players, the report further added.

COMPANIES CAN DIRECTLY LIST ABROAD

Faced with high current account deficit (CAD), the government today allowed unlisted companies to directly list on stock exchanges abroad to raise funds for acquisitions or retiring debts. As of now, unlisted companies are not allowed to directly list in overseas markets without prior or simultaneous listing in Indian markets.
"It has now been decided with the approval of the Union Finance Minister that unlisted companies may be allowed to raise capital abroad without the requirement of prior or subsequent listing in India," the Finance Ministry said in a statement. The such companies would be permitted to list abroad only on exchanges in International Organization of Securities Commissions (IOSCO)/ Financial Action Task Force (FATF) compliant jurisdictions or countries with which SEBI has signed bilateral agreements;
This scheme, it said, will be implemented on a pilot basis for a period of two years from the date of notification and then the impact of this arrangement will be reviewed, the statement added. "While raising resources abroad, the listing company shall be fully compliant with the FDI Policy in force. The capital raised abroad may be utilised for retiring outstanding overseas debt or for operations abroad, including for acquisitions," the Finance Ministry said. In case the funds raised are not utilised abroad, the Ministry said, such companies will have to remit the money back to India within 15 days. The money will parked only in banks recognised by RBI.
Notifications in this regard will be issued by Ministry of Finance, Department of Industrial Policy and Promotion (DIPP) and Reserve Bank of India (RBI)in due course. The government has set a target to bring the CAD, which touched a record high to 4.8 per cent of GDP last fiscal, to 3.7 per cent level in the current financial year.

Rupee value versus US dollar has been affected severely because of high CAD and other global factors. 

BANKS TO BEAR CARD FRAUD COST

Refusing to give further extension to banks for complying with security norms, the RBI today said that banks will have to bear the cost of fraudulent card transaction through point of sales that do not have prescribed security features.
"It has been decided not to grant any further extension of time. Accordingly, banks not complying with the requirements shall compensate loss, if any, incurred by the card holder using card at POS (points of sale) terminals not adhering to the mandated standards," RBI said in a notification.
In this context, it said, since the card holder would be approaching the card issuing bank for any fraudulent POS transaction in India which have occurred after September 30, 2013), the bank should claim the amount paid by it to the customer from the respective bank which have acquired the POS transaction in question. The card issuing bank would ascertain, within three working days from the date of card holder approaching the bank, whether the respective POS terminal where the said transaction occurred is compliant with mandated security features, it said. In the event it is found that the POS terminals are non-compliant as mandated, it said, the issuing bank shall pay the disputed amount to the customer within seven working days, failing which a compensation of Rs 100 per day will be payable to the customer from the eighth working day.

The acquiring banks have to pay the amount paid by the bank without doubt within three working days of the issuing bank raising the claim, failing which the RBI would be constrained to compensate the issuing bank by debiting the account of the acquiring bank maintained with the bank, it said.
"RBI will also consider invoking the penal provisions under the Payment and Settlement Systems Act, 2007 for banks that have failed to adhere to the timeline of September 30," it said. The notification further said it was also clearly emphasised in circular dated June 24, 2013 that no further extensions would be granted. In addition, it was also indicated that in the event of a customer complaining of misuse of card after the date stipulated in this circular, the issuer or the acquirer who has not adhered to the timelines should bear the loss, it added.

FUEL ECONOMY DRIVE FROM OCT 1

LEAD CAMPIGNERS VIRAT KOHLI, SAINA NEHWAL

The Oil Ministry is taking up the mega conservation drive from October 1, which will propagate the need for fuel conservation. Cricketer Virat Kohli and shuttler Saina Nehwal will be lead icons in the campaign. The campaign would encourage proper driving habits, better maintenance of vehicles, use of carpooling for going to offices and schools, switching off engines at traffic lights and driver training to minimise the wastage of fuel. The activities planned in the campaign include direct interaction with consumers to encourage them in adopting conservation measures while using TV, print and electronic media to generate awareness on the issue.

EVERY WEDNESDAY BUS DAY

Leading by example, Oil Minister M Veerappa Moily today said he will travel by public transport every Wednesday, starting October 9, as part of the fuel conservation drive to save USD 5 billion in oil import bill. Moily said he and all officials in his ministry as well as in oil PSUs will travel by public transport every Wednesday.

"I had Chief Ministers, central ministries and PSU heads to declare one day of the week as 'BUS DAY' during which staffers be encouraged to utilise only public transport for their daily commute. As part of it, I will either take metro or a bus to work every Wednesday starting from October 9," he said.
A circular is also being issued for asking officers in the Ministry of Petroleum and Natural Gas as well as 14 public sector firms under the ministry like ONGC and IOC to take public transport every Wednesday.
"Its a voluntary act. I cannot punish anyone not taking the public transport but I want everyone from the highest ranking officers to the lowest, to take public transport every Wednesday," he said.
Moily has suggested to the Department of Personnel to introduce staggered office timings for government employees to decongest road traffic during peak hours and asked Urban Development Minister to introduce "Free Cycle Scheme" in select cities for saving fuel.

PETROL PRICES MAY COME DOWN

Moily hinted at a reduction in price of petrol in next few days, the first cut in rates in over five months. The reduction in rates is likely to be announced by the month end as per the practice of fortnightly revision in prices, and has been made possible due to appreciation of rupee against the US dollar.
"This is all dynamic pricing system and not static pricing... any advantage of price (reduction in international rates) and rupee (appreciation against US dollar) will be passed on to consumers... consumer will get full advantage," he said.
Asked if a cut in petrol price was possible on September 30, he said "hope so."
"Petrol price is a deregulated commodity, price of which is decided by our oil marketing companies based on input cost and other parameters," he said.
If state-owned oil firms cut rates at month end, it will be the first reduction in prices since May. Petrol price was last cut on May 1 by Rs 3 per litre, the steepest reduction in rates in over five years. However, since then petrol prices have been raised or gone up by seven times, totalling Rs 10.80 per litre, excluding VAT, as rupee depreciated sharply against the rupee. Last increase in petrol price was effected from September 14 when prices went up by Rs 1.63 per litre. Petrol costs Rs 76.06 per litre in Delhi.

MAHARASTRA HOT SPOT FOR FORIEGN TOURISTS

The country's foreign exchange earnings from the tourism sector are likely to grow at 13 per cent per annum and touch USD 26 billion by 2015 from the current level of USD 20 billion annually, industry body Assocham today said. "Growing at a compounded annual growth rate (CAGR) of 13 per cent, India's foreign exchange earnings from the tourism sector are likely to reach USD 26 billion by 2015 from the current level of USD 20 billion," the chamber said in a statement. Besides, the arrival of foreign tourists in India is likely to cross 80 lakh mark by 2015 from 70 lakh at present, with a CAGR of seven per cent, according to an analysis conducted by Assocham, ahead of the World Tourism Day tomorrow. The state-wise analysis revealed that Maharashtra, Tamil Nadu, Delhi, Uttar Pradesh and Rajasthan are the top five destinations for foreign tourists and comprise 70 per cent of the total number of foreign tourists visiting India. Maharashtra tops the list with a share of 25 per cent, followed by Tamil Nadu (17 per cent), Delhi (11 per cent), Uttar Pradesh (10 per cent) and Rajasthan (seven per cent). "The Centre should further push India's tourism industry as its contribution to the country's gross domestic product (GDP) is about 6.6 per cent while its contribution to the total workforce is about 7.7 per cent and accounts for six per cent of the total investments," Assocham secretary general D S Rawat said. The foreign exchange earned through tourism is critical to combat the rising current account deficit (CAD) and the government should look to boost foreign tourist inflow by easing the visa regime and enter into agreements with various countries' to strengthen tourism cooperation, he added. With over USD 17 bn earnings, tourism has emerged as India's fourth biggest foreign exchange earner after exports of petroleum at USD 60.8 bn, gems and jewellery (USD 43.3 bn) and transport equipments (USD 18.3 bn), the chamber said. "In terms of growth in international tourism receipts, India has clocked a CAGR of 12.9 per cent which is higher as compared to 9.5 per cent at Asia-Pacific level and 6.1 per cent globally," according to the analysis. Tourists from the US constitute about 16 per cent share in the total arrival of foreign tourists across India, followed by the UK at 11.9 per cent. Besides, Bangladesh at seven per cent, Sri Lanka (4.5 per cent share) and Canada (3.8 per cent share) are among the top five countries with maximum foreign tourist arrivals in India. 

ASIA NEW HOT FAVOURITE FOR INDIANS

Asian destinations like Singapore, Dubai and Thailand are fast emerging as the favourite destinations for Indian travelers, pushing the US, Australia and Mauritius to the back-burner as expenses are spiraling with fall in rupee's exchange value, says a survey. "Singapore, Dubai and Thailand are replacing the US, Australia and Mauritius as top three choices due to rising costs," according to ICICI-Lombard survey. As per the survey, factors like a sharp fall in the rupee, expensive overseas travel and rising air travel have contributed towards this change of preference among travelers. The survey covered Mumbai, Delhi, Bangalore, Ahmedabad and Indore, with inputs coming in from 1,043 participants. The survey further said that while beaches, landscapes, historical and heritage sites seem to be the top consideration for overseas travel, safety and security are also gaining importance. Interestingly, while the US is considered the safest country by travelers, China is perceived to be least safe. "China is seen as the most unsafe country and the US is considered the safest by domestic travelers. Similarly, Singapore ranks tops in tourist infrastructure, while Sri Lanka is placed in the bottom on this front. It also said majority of the travelers prefer to travel with their families. On the cost side, the survey reveals that while the US is the most expensive destination, Sri Lanka is the least expensive. As far as the information for overseas travel is concerned, the survey reveals that travel agents are the key source of information, followed by advice from friends and relatives as well as the Internet. On purchasing of travel insurance, the survey said luggage protection is the key trigger for purchasing travel insurance, which is different from the claims behaviour that is mostly coming in from medical expenses. According to the ICICI Lombard claim data, maximum of around 80 per cent claims paid were reported from the US. Commenting on the survey findings, chief underwriting and claims officer at ICICI Lombard Sanjay Datta said, "these insights will help them introduce innovative products and services with the changing need of the customers in the travel insurance segment."

  

NOKIA LUMIA WITH 41 MEGAPIXEL CAMERA

Targetting camera aficionados, Nokia India today unveiled its much-anticipated 41 megapixel camera phone Lumia 1020, which will hit shelves on October 11. The price of the device will be disclosed on October 10 but as per estimates, it will be available in the range of Rs 47,000-Rs 48,000. It is currently selling in other markets for USD 800. The dual-capture feature of the phone allows to take a high resolution 38 megapixel image and also creates a 5 megapixel picture that can be shared on social networking sites.The device has an application called Nokia Pro Camera, which makes it easy for anybody to take professional quality images. The application allows users to click pictures first and then zoom later to get their desired shot.

The company now has 13 devices in the Lumia portfolio in India.
Lumia 1020 runs on Windows 8 and has 32 GB on board storage. The company has also tied up with Vodafone wherein the customers will get free 2GB of 3G data usage for two months. Customers will also get an application voucher worth Rs 1,000 with the phone.

"We have received extremely encouraging response for our Lumia range and believe that Nokia 1020 will further strengthen our leadership in imaging, which plays a important role in the lives of consumers today," said Nokia India Managing Director P Balaji.

"It is our premium smartphone and our target market is people who value great imaging experience. There are 50 per cent people who click pictures with their smartphones and a fraction of those are camera lovers, who are our target audience for this phone," Vipul Mehrotra, Nokia India, Middle East and Africa Director (smartphone devices) said.

BEER CAFE TO EXPAND MORE CITIES

Eyeing a share of the growing quick service restaurant (QSR) business in the country, food and beer lounge 'The Beer Cafe' today said it would add 30 outlets over 18 months and take the total number of outlets to 100 by the end of 2015. "We want to be the neighbourhood place where friends get together to share a drink and catch up. We serve 54 kinds of beer. We have five outlets in the Delhi-NCR region. "By November, we will add 10 more outlets across Mumbai, Thane and Punjab. By the end of 2014, we would have 35 outlets," The Beer Cafe CEO Rahul Singh told PTI at the India Retail Forum here today. The company, which is also looking at cities like Bangalore, Chennai and Hyderabad to set up shop, has already commenced work on some stores and is awaiting necessary approvals to start operations, he said. The Beer Cafe had received a funding of about Rs 25 crore in May from Mayfield. "Funds we raised will go into the expansion across the country. In phase two, we would enter small towns. We think there is a huge potential there. We are confident of growth opportunities here," he said, adding that the Eastern region would be part of its third phase. The domestic food service industry is around Rs 247,680 crore and is projected to touch Rs 4,08,040 crore by 2018 clipping at compounded annual growth rate at 11 per cent, according to a report by NRAI. Currently, the company's revenue run rate is about Rs 12 crore, but it is eyeing a topline of Rs 300 crore, once the 100 planned outlets become operational. "About 10 per cent of our revenues come from other liquor sales, 25 per cent from food and the remaining from beer," he said. When asked about investments, he said the company would invest around Rs 80 lakh per outlet.

SUPPLY CONSTRAINTS...A BIG PROBLEM

Uncomfortably high inflation coupled with supply constraints is impacting India's growth that has slowed to 4.4 per cent in the April-June quarter this year, global credit rating agency Moody's has said.
Over the past two years, India's GDP growth rate has halved from a peak of 9.2 per cent (year-on-year) in the first quarter of 2011, to 4.4 per cent in the second quarter of 2013. While inflation has fallen during this period, it still remains "uncomfortably high", it said. The wholesale prices increased 6.1 per cent y-o-y in August. Indian economy is bumping up against supply constraints...This may explain why Raghuram Rajan's first monetary policy decision was to raise the benchmark repo rate by 25 basis points to 7.5 per cent," it said. Rajan's move is "reminiscent of Paul Volcker's term" at the US Federal Reserve, "when he tightened monetary policy to the point of sending the U S economy into a deep recession in the early 1980s". "Slower economic growth may also serve to concentrate the minds of recalcitrant parliamentarians to embrace the reform ideas of Governor Rajan and Prime Minister Manmohan Singh."
It also said the appointment of Rajan as governor of the central bank is just the latest sign of renewed reform momentum in India.
The government cut fuel subsidies in late 2012 and reformed the retail and aviation sectors by allowing foreign investment there and the partial privatisation of a number of state enterprises. The financial sector is next in line for a shake up, and Dr Rajan is reportedly in charge of drafting up reform plans. These may include allowing the creation of small private banks and the exit of state-run underperformers," Moody's Analytics said.

BLACKBERRY Z10 RATES SLASHED

Struggling handset-maker BlackBerry today said it will offer its Z10 handset for Rs 29,990, slashing the price by about Rs 13,500 or 31 per cent, as a limited period offer ahead of upcoming festive season. The handset was launched in January and available for Rs 43,490. It was retailing for about Rs 30,000 on e-commerce stores. "In keeping with the festive season kicking off, we are making a limited period festive offer. Customers can now purchase BlackBerry Z10 smartphone at just Rs 29,990. "This lucrative scheme is in line with our commitment towards this market and will help the brand to reach out to more," BlackBerry said in a statement. BlackBerry had launched Z10 and a Qwerty device Q5, powered by its latest BB10 operating system, with a lot of fanfare. However, it failed to elicit much response from users. "We continue to leverage festive season with relevant product and services promotions. BlackBerry 10 platform offers a new and unique mobile communication experience and at Rs 29,999 the Z10 model is uniquely positioned to change the way in which our customers view mobile technology," BlackBerry India managing director Sunil Lalvani said. In March last year, BlackBerry had announced slashing of prices of its handsets by up to 26 per cent. It had also reduced the price of its PlayBook before that by more than half to Rs 24,490 for the 64GB version under an offer from the original price Rs 37,990. This was further reduced to Rs 19,990. Earlier this week, BlackBerry had signed a letter of intent with a Fairfax-led consortium to sell its business for USD 4.7 billion.

RBI BANS ZERO % INTEREST SCHEME

The RBI today banned zero per cent interest rate scheme for purchase of consumer goods, a move intended to protect customers but may dampen the festive spirit. The central bank has also said that no additional charges can be levied on payment through debit cards. "...in principle, banks should not resort to any practice that would distort the interest rate structure of a product as this vitiates the transparency in pricing mechanism which is very important for the customer to take informed decision," RBI said in a notification. The very concept of zero per cent interest is non-existent and fair practice demands that the processing charge and interest charged should be kept uniform product or segment wise, irrespective of the sourcing channel, such schemes only serve the purpose of alluring and exploiting the vulnerable customers, it said. In the zero per cent EMI schemes offered on credit card outstandings, the interest element is often camouflaged and passed on to customer in the form of processing fee. "Similarly, some banks were loading the expenses incurred in sourcing the loan (viz DSA commission) in the applicable rate of interest charged on the product," RBI observed. The notification further said that the only factor that can justify differential rate of interest for the same product, tenor being the same, is the risk rating of the customer, which may not be applicable in case of retail products where the interest is generally kept flat and is indifferent to the customer risk profile. With regard to subvention, it said, the loan amount sanctioned for the purchase should be after taking into account the discount, rather than giving effect to the benefit by reducing the interest.
Similarly, the RBI notification said: "If there is a moratorium period for payment available, the benefit should be passed on to the customer by ensuring that repayment schedule, including the interest servicing, commence after the moratorium period only rather than adjusting it in the interest." Thus in principle, banks should not resort to any practice that would distort the interest rate structure of a product as this vitiates the transparency in pricing mechanism which is very important for the customer to take informed decision, it said. Discounts on price or moratorium period for payment are often offered by the dealers or manufacturers on their products to the customers while they make the purchase by availing loans from banks. In such instances, it is the responsibility of the banks, who are using their good offices to get the better bargain, to make the customers fully aware of these benefits and also pass on the benefits to them fully and indiscriminately while sanctioning loan for the purchase, it said. On levying additional fees on debit card transactions, RBI said there are instances where points of sales levy fee as a percentage of the transaction value as charges on customers who are making payments for purchase of goods and services through debit cards. "Such fee are not justifiable and are not permissible as per the bilateral agreement between the acquiring bank and the merchants and therefore calls for termination of the relationship of the bank with such establishments," it said. "These practices or products thwart the very principle of fair and transparent pricing of products which behold customer rights and customer protection, especially, in the more vulnerable retail segment," it said. Such practices violate, both in letter and spirit, various provisions of master circular on interest rate on advances "and therefore, you (banks) are advised to strictly desist from these practices hence forth," it added.

INDIA MOST VULNERABLE TO OUTFLOWS

India is among the countries that are most vulnerable to capital outflows as it relies heavily on external funding, global credit rating agency Moody's cautioned today. "India and Indonesia are the most vulnerable to capital outflows because of high reliance on external funding," Moody's Analytics said in its report - 'How US Monetary Tightening Affects Asian Markets'.
It said the impact of recent Fed announcements on bond yields have exposed structural flaws in Asian economies, particularly in India and Indonesia. Moody's said the US Fed's talk earlier of a likely tapering of monetary stimulus depreciated the rupee by 15 per cent, making it the worst performing currency in Asia. The US Federal Reserve last week surprised the markets by saying it will continue with its monthly USD 85 billion bond buying programme and wait for more evidence of growth recovery before thinking of unwinding the stimulus.
Expectations that the stimulus programme would be tapered had led to fears of capital outflows, causing the rupee to depreciate against the dollar and stocks to fall. The rupee touched a low of 68.86 to the US dollar on August 28. It is currently trading around 62.83 to a dollar.
Reserve Bank Governor Raghuram Rajan, while announcing the mid-quarter monetary policy review last week, said India needs to build a "bullet-proof national balance sheet" to deal with the fallout on the economy from US Fed's tapering of stimulus that has been only been postponed not done away with.
The report meanwhile also noted that even the economies with current account surpluses have not been immune to the sell-off.
"Malaysian and Thai bond yields have also risen, albeit less than those in India and Indonesia, because these economies are growing at a decent clip, inflation is low, and they run current account surpluses, which mean they rely less on external funding to finance growth," it said.

PREVIOUS CYCLES
The report studies the performance of Asian markets during previous US tightening cycles in 1994, 1999 and 2004 and after the Fed's earlier easing programmes in the wake of the 2008 global credit crisis and the resultant recession.
"Asia's tight trade and financial links to the US make it susceptible to changes in US monetary conditions. Asian markets tend to react negatively during US monetary tightening cycles," it said.
Asian equity indices declined 30 per cent peak-to-trough on average during the 1994 and 1999 US rate hike cycles. Asian stocks shed around 15 per cent during the 2004 tightening campaign, and by a similar amount after the Fed's first two rounds of quantitative easing after 2008.
"Recent stress in Asian equity markets indicates that the impact of the US policy remains significant," the report said.

INDIAN EQUITIES

Domestic equities declined 27 per cent in 1994 and 24 per cent in 1999 during the rate hike cycle of the US. After the end of first round of qualitative easing by the US, domestic equities declined three per cent while after the end of the second round quantitative easing, there was a significant fall of 18 per cent. The recent talks of the Fed tapering the third round of quantitative easing has made domestic equities dip by 6 per cent, the report said. The report said the Asian markets vary in their degree of sensitivity. For example, a 1 per cent fall in US stocks correlated with nearly a 4 per cent decline in Chinese stocks on average, during the six tightening periods since 1994. Sensitivity appeared high for Thailand and Indonesia, and lowest for Hong Kong, Japan, Malaysia and Singapore, it added. "The results reflect the greater susceptibility of emerging Asian markets to investors' changing risk appetites than more mature markets with deeper capitalisation and better-functioning financial systems," the report said. The report, however, said the financial market effects from the coming US tightening cycle might not be as severe as in prior episodes. "American policymakers are expected to tighten more gradually than in previous cycles, which should help Asian markets and central banks easily manage the shift to higher interest rates," the report said. Last week's Fed's decision to delay winding back asset purchases indicates that the US central bank is cognisant of unsettling financial markets and economies, the report concluded.

 

IRCTC WEBSITE NEEDS TO BE REVAMPED

The apex consumer forum has directed Indian Railway Catering and Tourism Corporation (IRCTC) to make its website more consumer friendly, observing that it is "inaccessible" most of the time and needs "drastic improvement". "The IRCTC website should be fool proof and needs drastic improvement. Most of the consumers/passengers suffer from the IRCTC website... Most of the time the website of the opposite party (IRCTC) is inaccessible for hours together," the National Consumer Disputes Redressal Commission (NCDRC) said.

"Therefore, we feel it necessary to issue certain directions as the opposite party should take necessary steps to improve their website which should be user/consumer friendly, fast and perfect in all aspects. It is the need of hour for consumers at large in our country," a bench headed by Justice J M Malik said. It also observed that "rules of IRCTC for refund of e-ticket (if passenger has not travelled on the train) appear to be unilaterally framed for its own benefit". The bench held that IRCTC's prevalent procedure for refund of e-ticket charges as "not proper" and "practically impossible" as it expects a passenger who has cancelled his ticket to go to the railway station and search for the ticket checking staff to get a certificate issued from them that he has not undertaken the journey. "Such e-ticket refund procedure is not just proper which is practically impossible and not helpful to the consumers at large. Instead of seeking refund most of the passengers will prefer to forgo the money...," the bench said.

The direction and the observations were made while dismissing as "without merit" the plea of a man who had booked tickets for his neighbours through the IRCTC website and had sought refund saying they had not travelled as only one of them had got a confirmed seat. He had moved the NCDRC against orders of the Chhattisgarh state and district consumer fora which had dismissed his complaint against IRCTC. The NCDRC dismissed his plea saying that he acted as a agent and not a consumer in order to be protected under the Consumer Protection Act.

 

SHOPPING MALLS STALLED

Three shopping malls became operational and 13 got deferred in the top eight cities of the country during the first six months of 2013 as developers are either cautious or facing cash crunch, property consultant Cushman & Wakefield said today. "The top eight major cities witnessed a total mall supply of 2.94 million square feet (3 malls) during the first half of 2013 with over 64 per cent (13 malls) of the total expected supply deferred," C&W said in a statement. The national capital region (NCR) witnessed the deferment of five malls, followed by two in Pune, Hyderabad, Chennai and one each in Kolkata and Bangalore. "There is considerable demand for quality retail spaces in both shopping malls as well as main streets in most cities. However retailers, though optimistic about their expansion plans, are showing caution prior to launching new stores, which has resulted in the deferment of malls where occupancies have been low and where developers have faced some liquidity issues," C&W Executive Managing Director (South Asia) Sanjay Dutt said.

The malls now prefer to open with near full occupancy, as was seen in some recent cases, he added. "This trend of mall deferment across can be attributed to a number of reasons. Primarily, developers are facing liquidity issues to complete the construction of their malls," the statement said. Moreover, retailers are cautious in opening new stores and are carrying out comprehensive due diligences to understand their market before making commitments. "Developers are not in a position to launch their malls until they get sizeable occupancy that can support the operations of the mall," C&W said.

The consultant noted that Hyderabad’s AS Rao Nagar main street recorded maximum rise in rentals (33 per cent) over last quarter, followed by main streets of Punjagutta (29 per cent), Ameerpet (19 per cent) and Kukatpally (17 per cent). Hyderabad's Raj Bhavan Road/Somajiguda (-14 per cent) and Abids(-12 per cent) main streets witnessed sharpest fall in rentals, followed by Koregaon Park in Pune (-10 per cent) Malls in Mumbai's Vashi registered sharpest rental appreciation of 18 per cent. Malls in Pune's Bund Garden Road/ Koregaon Park and Hyderabad's NTR Gardens witnessed sharpest drop of 17 per cent in rentals.

ANOTHER HIKE ON CARDS

Having been surprised by the repo rate increase on inflation concern, analysts expect new Reserve Bank Governor Raghuram Rajan to hike the key rate by another 0.50 percentage points this fiscal.
The repo rate hike "indicates that the new Governor is focusing more on inflation than growth. We now expect RBI to increase repo rate by 0.25 per cent each at the next two policy meetings to 8 per cent by end of 2013," house economists at British lender Standard Chartered said. Stating that the Reserve Bank has shifted to an "inflation targeting framework" without explicitly saying so, Japanese brokerage Nomura said it expects a 0.50 per cent hike in repo rate this fiscal. "We are changing our policy call because of this sudden regime shift. Our baseline view has been a continuation of the status quo on policy rates in FY14, followed by a 0.75 per cent repo rate cuts in FY15. We now expect repo rates to be hiked by 50 bps to 8 per cent in FY14, followed by a prolonged pause," it said. Without quantifying the expected hikes, the Credit Suisse economist also said they expect one or two more repo rate increases from in the next few months.
Rajan, a celebrated monetary economist from the Chicago Business School, spooked the markets at his maiden policy announcement by increasing the repo rate by 0.25 per cent citing increased worries on inflation.
Reacting to the move, Pratip Chaudhuri, the chairman of the country's largest lender State Bank of India, said he would be forced to increase the lending rates, much to the dismay of the borrowers.
The support for growth came from the decision to cut the marginal standing facility by 0.75 per cent to 9.5 per cent, which according to the ratings agency Crisil will help bring down cost of funds for banks by 0.4 per cent, if we go by past references on their borrowings.
The Standard Chartered economists clarified that even the two actions on the repo and MSF look contradictory, their aims are not different.
The MSF hike in July was to arrest the steep fall in the rupee and we should expect more cuts as the currency stabilises while the repo is aimed solely at inflation numbers, which grew to 6.1 per cent at the wholesale level and the consumer inflation continued to remain over 9 per cent. Nomura said that the new framework being charted out by Governor Rajan lays a greater focus on the retail price rise. "We see the RBI action as a medium-term positive as it should bring down inflation expectations and help correct macroeconomic imbalances," it added.

FREE MOBILE APP DOWNLOADS GAINING MOMENTUM

The number of free mobile app downloads is expected to hit 239.95 billion by 2017, while paid-for app downloads will touch 14.78 billion mark during the same period, research firm Gartner has said. According to the data available with Gartner, free mobile app downloads stood at 57.33 billion in 2012, while 6.65 billion paid-for downloads were made during the same year. A mobile application (or mobile app) is a software application that runs on smartphones, tablets among others. "Free apps currently account for about 60 per cent and 80 per cent of the total available apps in Apple's App Store and Google Play, respectively," said Gartner Research Director Brian Blau. The research firm expects free app downloads to touch 92.88 billion in 2013, 127.70 billion by 2014, 167.10 billion by 2015 and 211.31 billion by 2016. While, the paid-for mobile app downloads are projected to touch 9.19 billion in 2013, it would be 11.11 billion by 2014, 12.57 billion by 2015 and 13.50 billion by 2016, it added. According to Gartner data, share of free app downloads is expected to grow continuously. They constituted 89.6 per cent of the total downloads in 2012 and are expected to contribute 91 per cent in 2013, 92 per cent by 2014, 93 per cent by 2015, 94 per cent by 2016 and 94.5 per cent by 2017. However, the firm expects revenues from mobile apps downloads to register a healthy increase of 44 per cent in 2013 as against last year. "Mobile apps stores will see annual downloads reach 102 billion in 2013, up from 64 billion in 2012. Total revenue in 2013 will reach USD 26 billion, up from USD 18 billion in 2012," Gartner said.

HOUSE INVESTMENT LOOSING SHEEN

The deepening economic slowdown, rising cost of living and low wage revisions, coupled with higher interest rares, are forcing salaried professionals who had earlier invested in properties to put them up for sale, say industry experts. People who had invested in properties some 10-15 years ago are now finding it difficult to service their home loans which have become too expensive now due to the rising interest rates and falling rental yields. According to a survey, resale inventory has increased nearly 30 per cent over the last six months. "Economic slowdown has hit the real estate industry. Salaried professionals who had invested in properties five-six years ago to cash in on the boom, are now looking to sell them as they are finding it difficult to cope with the high cost of living," property portal Housing.co.in co-founder and marketing head Advitiya Sharma told PTI. He said the resale market is currently dominated by young professionals and the high cash inflows that the sector gets, has made it a lucrative field. "In the current economic conditions, finding a tenant with higher rents has become more challenging as people have become cautious due to uncertain economic conditions and are thus opting for properties with similar or lower rents," DTZ India chief executive Anshul Jain said. Primary buyers are willing to deal in the resale sector than new homes due to the risks involved in new projects, said Shashank Jain, Executive Director, PricewaterhouseCoopers. "Such resale inventory is mainly concentrated in large metro cities. Buyers are looking at such opportunities as they get closer to possession prices and do not have to worry about risks involved in new projects. On the other hand, sellers benefit as they can get higher returns on their investment, than settling for low rental yields," he said. Jain further mentioned that this situation will, however, not attract investors. "Such deals will attract primary buyers. But people who are looking at investing in properties at this moment, may not consider this option," he added. 

RBI HAWKISH STANCE

REPO UP BY 25 BASIS POINTS

RBI today unexpectedly raised the policy rate by 0.25 per cent as it kept its focus on controlling inflation, which it felt would be above the expected levels in the current fiscal. RBI Governor Raghuram Rajan in his maiden policy review, however, eased liquidity though a reduction in the marginal standing facility rate, at which banks borrow from the central bank, by 0.75 per cent to 9.5 per cent. The repo rate or the short term lending rate has been increased by 25 basis points to 7.5 per cent from 7.25 per cent with immediate effect. He kept the cash reserve ratio (CRR), the portion of deposits that banks are required to maintain with the RBI in cash, unchanged at 4 per cent. At the same time, the RBI reduced the minimum daily maintenance of CRR from 99 per cent of the requirement to 95 per cent effective from September 21, a move aimed at inducing liquidity into the system.

INFLATION MAIN CONCERN

"The need to anchor inflation and inflation expectations has to be set against the fragile state of the industrial sector and urban demand. Keeping all this in view, bringing down inflation to more tolerable levels warrants raising the repo rate by 25 basis points immediately," Rajan said in the mid-quarter policy review statement. Rajan said WPI inflation will be higher than initially projected over the rest of the year in the absence of an appropriate policy response. What is equally worrisome is that inflation at the retail level, measured by the CPI, has been high for a number of years, entrenching inflation expectations at elevated levels and eroding consumer and business confidence, he said. Stating that economic growth has weakened with continuing sluggishness in industrial activity and services, the RBI said the pace of infrastructure project completion is subdued and the start of new projects remains muted. "Consequently, growth is trailing below potential and the output gap is widening. Some pick-up is expected on account of the brightening prospects for agriculture due to kharif output and the upturn in exports," it said. Rajan said concerns on the current account deficit have been mitigated by steps taken by the government and the RBI. Also, steps have been taken to improve the environment for external financing, turning the focus to internal determinants of the value of the rupee, primarily the fiscal deficit and domestic inflation, he said. Rajan said the timing and direction of further actions on exceptional measures will be contingent upon exchange market stability and can be two-way. "Further actions need not be announced only on policy dates. However, any further change in the minimum daily maintenance of the CRR is not contemplated," he added.

"NDF" THE MAIN CULPRIT
Domestic forex market needs to be deepened and made more competitive as non-deliverable forwards is sucking out liquidity from the onshore place, increasing the rupee volatility, RBI Governor Rahuram Rajan said. "To some extent it (NDF) draws away liquidity from our market. We have to make sure we provide deep and functioning market so that there is no need to establish a parallel market outside. There is certainly competition for the Indian market and competition generally is a good thing. We should try and deepen our markets to draw in more activity here," the newly appointed Governor said.
The non-deliverable forwards (NDF) market is a foreign exchange derivative instrument traded over-the-counter currencies that are not freely convertible, like the rupee, are traded here. RBI has no control over this market, which has huge volume and operates round-the-clock. Domestic financial institutions are not allowed to trade in this market.

MARKET REACTS SHAPLY

The benchmark S&P BSE Sensex fell 383 points today, the most in three weeks, after RBI Governor Raghuram Rajan unexpectedly raised a key interest rate to combat inflation and partially rolled back liquidity tightening measures. Realty, bank and auto stocks fell on concern higher interest rates would make loans more expensive and reduce their business. ICICI Bank and HDFC Bank together contributed more than 120 points to the Sensex's fall. The 30-share Sensex, which initially moved in a narrow band, plunged 595 points to 20,051.43 after the rate hike. It recovered some ground on selective buying by institutional investors to end at 20,263.71, a fall of 382.93 points or 1.85 per cent. The index had declined 651 points on September 3. The broader 50-stock CNX Nifty index on the National Stock Exchange dipped by 103.45 points, or 1.69 per cent, to 6,012.10. The MCX Stock Exchange's SX40 index ended at 12,026.41, down 205.69 points.

Interest sensitive stocks tank
Interest-rate sensitive bank, realty and auto stocks fell up to 11.5 per cent after RBI unexpectedly raised the policy rate by 0.25 per cent, triggering all-round selling in the stock market. Realty stocks were the worst hit. Shares of DLF tanked 11.55 per cent, while HDIL lost 8.47 per cent and Indiabulls Real Estate slumped 7.01 per cent on the BSE. Out of 13-listed realty stocks, ten ended the day with losses. Led by the losses in these stocks, the BSE realty index settled 6.53 per cent lower at 1,287.12, the worst performer among the 13 sectoral indices. Analysts said that rate-sensitive sectors such as realty, banking and auto were hit hard the most after RBI announcement as a higher cost of credit would reduce their revenue. Banking stocks also faced the heat, with Yes Bank plummeting 7.90 per cent, Union Bank (7.89 per cent), PNB (7.31 per cent), ICICI Bank (4.78 per cent), HDFC Bank (3.63 per cent) and SBI (3.44 per cent). Following this, the BSE banking index closed the day with 4.18 per cent loss at 12,166.86.  The auto index was down 1.58 per cent to 11,203.65.

EMERGING MARKETS LEAD THE RALLY

Emerging markets led a worldwide equity rally today as investors welcomed the US Federal Reserve's surprise decision to keep its vast stimulus policy unchanged. Stock markets across the globe jumped following the Fed's yesterday announcement that it would hold off tapering its USD 85-billion-a-month bond-buying scheme. The news was especially welcome in under-pressure developing economies, which breathed a sigh of relief after suffering a heavy sell-off in August as investors bet on the Fed winding down its quantitative easing (QE) policy. "Ben Bernanke had threatened to take away the punchbowl and bring the QE-party to an end. But he's changed his mind... and told us all to party on," said Societe Generale fixed income strategist Kit Juckes. "Emerging Markets is the asset class which suffered most from the 'taper talk' and is the one which is bouncing most as the removal of stimulus is delayed." In Asia, Mumbai jumped 3.43 percent, Jakarta 4.65 percent, Bangkok 3.47 percent and Manila 2.81 percent, following Wall Street higher after the Fed announcement spurred the Dow Jones Industrial Average and the S&P 500 to close at record highs yesterday. Equities in Asia's economic powerhouses saw smaller gains. In Tokyo, the Nikkei rose 1.80 percent. Hong Kong added 1.67 percent and Sydney rallied 1.10 percent to finish at a five-year high. With the prospect of vast sums of cash continuing to be pumped into financial markets, the US dollar sank against emerging economy currencies, which have suffered a torrid few months on expectations the Fed would begin tightening its monetary policy. India's rupee was at 61.83 to the dollar, well up from the record levels above 69.00 seen at the start of September, while the greenback fetched 30.92 Thai baht, compared with 32.45 baht a few weeks ago. But the dollar bounced back against the yen, buying 99.23 yen, up from 98.06 overnight. One euro bought USD 1.3543, up from USD 1.3516. Elsewhere, emerging market equities followed Asia's lead today. South Africa's JSE Top 40 index jumped 2.32 percent in afternoon trade, and the Fed decision sent the rand climbing to 9.6372 to the dollar, up about seven percent from a low point set last month. 

CHATTISGARH EMERGED AS LOWEST UNEMPLOYED STATE

SIKKIM ON TOP IN UNEMPLOYMENT

With country's unemployment rate estimated to be at 4.7 per cent, Sikkim found to be having maximum unemployment rate while Chhattisgarh had the lowest unemployment rate across the country. In its latest Annual Employment & Unemployment Survey report for 2012-13 released by Labour Bureau under Union Ministry of Labour and Employment here today, Sikkim state had the maximum unemployed people in the country. The unemployment rate per 1000 persons aged more than 15 years was highest in Sikkim at 136, followed by Arunachal Pradesh at 130, Tripura at 126, Goa at 107 and Kerala at 104, said Labour Bureau Director General, Daljeet Singh told reporters here today. As per the report, the unemployment rate of the country is estimated to be 4.7 per cent at All India level, he said. In the northern region, maximum unemployment rate was witnessed in Jammu and Kashmir at 88, followed by Himachal Pradesh at 63, Delhi at 57, UT Chandigarh at 56 and Punjab and Haryana 48 each, he said.

Among lowest unemployment rate across the country, Chhattisgarh had lowest unemployment rate of 14, followed by Karnataka at 20, Madhya Pradesh at 22, Andhra Pradesh at 25 and Gujarat at 27, Singh further said.
In case of unemployment rate per 1000 persons in young people aging between 15 and 29, Sikkim was against at top position at 372, Arunachal Pradesh at 327, Kerala at 315, Tripura at 306 and Jammu and Kashmir at 241. Among youth, Chhattisgarh was again found to be having lowest jobless rate at 33, followed by Karnataka at 52, Gujarat at 59, Madhya Pradesh at 60 and Mizoram at 78, as per labour survey report findings.
Labour Bureau took a sample of 1,33,354 households, excluding homeless people with a breakup of 82,624 households in rural and 50,730 households in urban sector, said Chairman of Expert Group formed by Ministry of Labour and Unemployment, S P Mukherjee. Based on the survey results, 51.2 per cent of households in the country are found to be having self-employment as major source of income under farm and non-farm activities, informed Singh. In rural areas, unemployment rate of 4.4 per cent whereas in urban areas, the same is 5.7 per cent, said Singh. Unemployment rate was found to be higher in females as compared to males. At all India level, female unemployment rate is estimated to be 7.2 per cent whereas in males, it is 4 per cent. In rural areas, 12.9 per cent households are estimated to be having regular or wage earning as major source of income. In urban areas, this figure is 42.1 per cent, said Singh. 

SENSEX TURNED EXTREMELY BULLISH

SOARES BY 684 POINTS TO 20647

The Sensex today soared 684 points to an almost three-year high after the US Federal Reserve unexpectedly left its stimulus programme unchanged, easing fears of capital outflows and giving RBI Governor Raghuram Rajan some leeway before his first monetary policy review. The US Federal Reserve yesterday surprised the market by saying it will continue with its monthly USD 85 billion bond buying programme and wait for more signs of growth recovery. The decision may attract investments in most emerging markets, including India, this year. The rupee also got a boost and traded at 61.80 against the dollar, up over 150 paise, when the stock markets closed for the day. Gains on the BSE were led by banking, realty and capital goods shares, with 12 of the 13 sectoral indices rising. State Bank of India, Tata Steel and ICICI Bank were the major winners on the Sensex. The 30-share index opened more than 390 points higher and climbed to a peak of 20,739.69 before settling at 20,646.64, up 684.48 points or 3.43 per cent. It was the highest level for the index since closing at 20,875.71 on November 10, 2010. The wider CNX Nifty index on the National Stock Exchange shot up by 216.10 points, or 3.66 per cent, to end at an almost four-month high of 6,115.55. The SX40 index on the MCX Stock Exchange closed at 12,232.1, up 430.52 points.

Banking and rate-sensitive stocks got support from investors ahead of the Reserve Bank of India's mid-quarter monetary policy meeting tomorrow. Rajan, who took over as RBI Governor earlier this month, rescheduled his much-anticipated first monetary policy statement by a few days to September 20, keeping in mind the two-day Fed meeting. Foreign institutional investors bought shares worth a net Rs 580.13 crore yesterday, according to provisional data from the stock exchanges.

Investor wealth soars by Rs 1.83 lakh cr

investors became richer by Rs 1.83 lakh crore as the 30-share Sensex ended at 20,646.64, up 684.48 points or 3.43 per cent, the biggest gain since September 10 when the index had rallied 727 points. Among the BSE 13 sectoral indices, 12, barring IT sector, ended the day in green with gains in the range of 0.74-6.78 per cent. From the 30-Sensex constituents, 28 stocks saw rise, with SBI leading the pack, surging 8 per cent. In the process, the investor wealth rose by a whopping Rs 1.83 lakh crore to Rs 66.53 lakh crore. As many as 62 stocks touched their 52-week high, while 113 scrips hit their one-year low level. Overall, 1,430 stocks rose, while 997 scrips tanked on BSE.  Analysts said market sentiment turned extremely bullish on a flurry of buying by funds driven by strengthening rupee and a firming global trend after the US Federal Reserve surprised markets by sticking to its massive bond-buying programme.

NIFTY YEAR TARGET 5700

GOLD MAN STAYS UNDERWEIGHT ON INDIAN SHARES

Notwithstanding a sharp rebound in equities, Goldman Sachs today said it stays "underweight" on Indian shares and has a Nifty 12 month target of 5,700 as the country's macro fundamentals are still "challenged". According to the global financial services major, the domestic growth outlook for the Indian economy remains challenged, which coupled with tighter financial conditions may lead to lower valuations. In late July, Goldman Sachs had downgraded Indian equities to 'underweight' saying domestic growth outlook looked weak. "Since then, the overall micro outlook has not changed much", it said.
"We expect earnings to grow 8 per cent in CY14 expected, 5 percentage points below consensus estimate of 13 per cent," Goldman Sachs said adding that "we stay UW (underweight) on India with NIFTY 12month target at 5700".
After correcting 13 per cent from its July highs, the wide based National Stock Exchange benchmark index Nifty posted a 10 per cent snapback rally in less than a week following the new RBI governor Raghuram Rajan's announcements and is currently hovering around 5,800 level.
"Equities may extend their rally in the near term as markets worry less about the 'Fed tapering', but we would expect such a rally to fade and for markets to move lower in-line with the deteriorating fundamentals," it said. The report further added that "our 12-month target for the NIFTY implies moderate downside, based on lower earnings and a cut in target multiple. We expect continued decline in investment demand (due to funding issues and higher interest rates) and weaker consumption demand (due to rising fuel prices and weak employment outlook)," the report said.
Key data points regarding investment demand and consumption (like industrial and infra projects, personal consumption expenditure growth, consumer confidence and 2-wheeler growth) continue to remain tepid," it added.
In the near term, Goldman Sachs economists believe inflation will rise (7 per cent forecast for FY14) and the RBI will likely keep monetary policy tight.
"As tightening in financial conditions has historically tended to affect activity with a two-quarter lag, we believe the recent tightening and the impact on activity should be visible from Q4 2013 onward," it said.
The report further noted that "given India is months away from crucial assembly and Parliamentary elections, political uncertainties and concerns about policy paralysis are likely to linger." 

POLICY LEADERSHIP AWARD TO BADAL

Punjab Chief Minister Parkash Singh Badal would be honoured with the 'Policy Leadership Award' in agriculture during the Agriculture Leadership Summit-2013 organised by a magazine at New Delhi tomorrow. The 6th Agriculture Leadership Award Committee -2013 headed by eminent agriculture scientist and Parliamentarian M S Swaminathan had selected Badal for 'Policy Leadership Award' for the year 2013. The Committee has recommended this award in recognition of Punjab's leading role in national agriculture and food security besides promoting the concept of comprehensive agriculture diversification plan under the leadership of Badal.

AMRITSAR-DELHI-KOLKATA CORRIDOR

CONNECTS 20 CITIES...7 STATES

The Inter-Ministerial Group (IMG) to undertake preparatory work for setting up a Amritsar-Delhi-Kolkata Corridor (ADKIC) has suggested connecting the project to 20 cities in seven states with a budgetary support of Rs 5700 crore spread over 15 years. After a series of meetings, the IMG has completed its work and has submitted its report. The IMG, in its recommendations, has said the ADKIC be aligned to the EDFC and it pass through 20 cities in the seven States of Punjab, Haryana, Uttar Pradesh, Uttarakhand, Bihar, Jharkhand and West Bengal.
The ADKIC also proposes to leverage the existing Highway system on this route and the Inland Water System being developed along National Waterway-1. In the first Phase of the project, every State could promote at least one cluster of about 10 sq. km. area to be called Integrated Manufacturing Cluster (IMC), in which 40 per cent area would be earmarked permanently for manufacturing and processing activities. ADKIC may use both the Public Private Partnership (PPP) approach and non-PPP approach. The non-PPPable trunk infrastructure will be developed by the Special Purpose Vehicle (SPV) or Implementation Agency vested with the task of setting up the IMCs, through grant-in-aid.

The IMG has also recommended Constitution of an Apex Monitoring Authority, under the Chairmanship of the Union Minister for Commerce and Industry, for overall guidance, planning and approvals. It said ADIC should be set up as a corporate entity, on the lines of Delhi Mumbai Industrial Corridor Development Corporation (DMICDC). A dedicated cell under the Chairmanship of Chief Secretary/Industrial Development Commissioner was also recommended at the state level. At the cluster level, a Special Purpose Vehicle (SPV) may be set up by the State Governments for administration of clusters, the report said.

In the first phase, an estimated maximum financial commitment of about Rs. 5749 crore over 15 years may be given for construction of seven IMCs each of 1000 hectare.These finances could be through budgetary support by the Central government. IMG has recommended a two stage approval mechanism, an “in-principle” and final approval. 

MORE EXPERTS IN HEALTHCARE & RETAIL NEEDED

Domain specialists in sectors like healthcare and retail will be the growth drivers for India's business process outsourcing (BPO) services industry, according to industry body NASSCOM. "Re-branding it (BPOs) as business process management (BPM) industry is the first step in building a stronger image, which will further enhance its identity as a full-service value provider that specialises in providing performance-based services," NASSCOM President Som Mittal said here. Today, the BPM industry has changed its pricing models and it offers tailored pricing models, suiting the needs of the clients based on their geographical and other requirements, he added. India's BPO services industry accounts for 38 per cent of the global market. Speaking at the NASSCOM BPM Strategy Summit 2013, Mittal added that access to skills will be a key growth driver for the industry with more requirements in vertical domains like BFSI, healthcare and retail. Considering, India accounts for the biggest share of the global BPM sourcing market, valued at about USD 150 billion this year, he said the way forward is through continuous technological expertise in Business Process as a Service (BPaaS), automation, IT-BPM interplay, etc. "The emergence of transformational outsourcing models has led to a significant shift from being standalone operations with traditional processes to a more integrated process with technology optimised services," Mittal said. Emphasising that access to skills will be a key growth driver for the BPM industry, Mittal said. According to the BPM sector perception study, the attractiveness of the sector increases with time spent indicating at a long-term career path, he added. However, the industry perception at the student level is low as there is little awareness about the future prospects that the industry offers at the school and university level, he added. WNS Global Services CEO Keshav Murugesh said the industry is now working on developing programmes to reach out to students to showcase the immense potential that the BPM industry offers. "BPO sector is much more than just call centres. Though, skill development is one of the most important need of the hour, the industry is making efforts to create a stronger brand identity of the industry to attract more youngsters," Murugesh, who is also the Chairperson of NASSCOM's BPM Council, said. India's BPM industry directly employs about 1.1 million people and this figure will touch 1.8 million by 2020. The sector is expected to grow to USD 50 billion by 2020 from USD 20.8 billion in 2012-13 fiscal at a compounded annual growth rate of 13 per cent. 

ONION BLASTS IN INDIA...VICTIMS 110 CRORE PEOPLE...CULPRIT GOVERNMENT

FORIEGNERS CAN CARRY Rs.10000/- 

BEYOND IMMIGRATION DESK

RBI today permitted foreigners to carry up to Rs 10,000 beyond immigration desk to the duty free area in airports for miscellaneous expenditures, but they will have to dispose the Indian currency before boarding plane. Earlier, foreigners were allowed to carry Indian currency up to the Customs Desk or the Immigration Desk at international airports in the country. 
"On a review, it has been decided to allow non-residents to carry Indian currency upto a maximum of Rs 10,000 beyond Immigration/Customs desk to the Duty Free Area/Security Hold Area (SHA) in the departure hall in international airports in India for meeting miscellaneous expenditures...," RBI said.
The permission, however, is subject to the condition that they will "not be allowed to carry any Indian Rupee beyond SHA and that they should dispose of Indian currency before boarding the plane," the RBI added. In order to provide money changing facility to non- residents to convert unspent Indian Rupees with them, RBI said Foreign Exchange Counters in the departure halls in international airports may be established in the Duty Free Area/SHA beyond the Immigration/ Customs desk. Such counters will however, only buy Indian Rupees from non-residents and sell foreign currency to them, it said. The central bank further said putting up display at forex counters, "reminding the passengers that the area is the last point for non-residents to possess Indian Rupees (INR)" will be the responsibility of the Airport Authorities. Earlier, forex counters were permitted in the departure halls only before the Customs Desk or the Immigration Desk.

ONE BIKE EVERY QUARTER TVS STRATEGY

Eyeing a larger share in the two wheeler market, TVS Motor Company would launch "a new bike every quarter" going forward, a top official said today. The city-based company today rolled out its latest offering -- a 110cc scooterette -- Jupiter, aimed at strengthening its presence in scooter segment. Currently, TVS Motor retails Scooty Pep, Scooty Streak and Wego models. "Every quarter from now, you can expect there will be a new bike from TVS (Motor Company) going forward," TVS Motor Company Chairman and Managing Director Venu Srinivasan said, after launching the latest 110cc Jupiter here. The company also plans to launch an upgraded version of its highly popular scooterette Scooty -- 'Scooty Zest' in January 2014, he said. Today's launch of Jupiter comes after unveiling of a 125cc motorcycle "Phoenix" which according to Srinivasan would cross sales of 10,000 units this month. "I think we are very confident that this will be the best- in-class scooter. It follows the launch of one of the best motorcycles in the country -- the Phoenix," he said. TVS Motor Company President and CEO K N Radhakrishnan said the company hopes to increase its market share to 16 per cent in the scooter segment with the launch of the Jupiter. "Currently, our market share is about 13.5 per cent. Through this, we are looking at 16-17 per cent in the scooter segment. We will do about 30,000 between Wego and Jupiter," he said. On overall sales of two-wheelers, he said the company expects it to be around seven per cent in 2013-14. "Total two-wheeler sales (of the company) will be growing at seven per cent, when the industry is flat. We are expecting the industry to be flat this year," he said. Asked if the company would consider exports of Jupiter, Srinivasan replied in the affirmative, saying it would happen later.
Currently, TVS Motor Company exports minimal number of scooters to Sri Lanka, Bangladesh and Turkey. Motorcycles account for majority of the company's exports (95 per cent).

LPG DIRECT SUBSIDY NOT PAID TO OIL COMPANIES

As the government claims success of direct subsidy transfer on cooking gas (LPG), Indian Oil Corp (IOC) has said oil firms have not been reimbursed cash they have been transferring to consumers since launch of the scheme on June 1. IOC and other oil firms have been paying LPG consumers in 54 districts up to Rs 500 to help them buy a 14.2-kg cooking gas refill at market price, which is more than double of Rs 410 per bottle rate in Delhi. But as the government extends the scheme to 289 districts from January 1, IOC said oil firms have not been paid for the subsidy they extend to consumers on the government's behalf. "So far, OMCs (oil marketing companies) have already spent almost Rs 188 crore towards cash transfer under the DBTL (Direct Benefit Transfer of LPG) scheme," IOC Executive Director (LPG) A N Jha wrote to the Oil Ministry on August 21. Since then, the amount disbursed has risen to Rs 222 crore, none of which has been compensated by the government. When the scheme is rolled out in a district, Rs 435 is deposited in bank accounts of household LPG consumers as advance to help them purchase LPG cylinder at market price. The moment the consumer buys the first refill, a cash subsidy at the prevailing rate, which can be up to Rs 500, is transfered and the cycle continues. Citing the May 20 decision of the Cabinet Committee on Political Affairs (CCPA), IOC said the approval for DBTL states that the first advance will be provided by oil companies but they have not received any fund for the same till date. "You will appreciate that in absence of funds, the oil companies shall be severely strained to sustain the cash transfers and will eventually com to a breaking point in case funds are not replenished as envisaged in the scheme," Jha wrote. IOC wanted previous claims to be settled before expanding the scheme to more districts. The government plans to extend DBTL to 289 districts by Janaury 1, covering almost all the state capitals and more than half of the 14 crore LPG consumers in the country. When extended to 289 districts, an estimated Rs 27,000 crore will be transfered to consumers through DBTL in a year. The DBTL in 54 districts currently covers 21.9 million LPG consumers and as much as Rs 222 crore subsidy has been transferred through 5.3 million transactions into the bank accounts of the LPG consumers so far. 

HOTEL MARGINS HIT TO RECORD LOWS

Indian hotel ind Q2 margins may hit 5-yr low of 8%: ICRA Mumbai, Sept 16 (PTI) Rating agency ICRA today said it expects the Indian hotel industry's margins to slide to a 5-year low of up to 8 per cent in the second quarter of this fiscal due to decline in revenue per available room, weak July-September and inflation in consumable costs. "We expect industry-wide margins for the current quarter (Q2FY14) to ebb down to a 5-year low of 7-8 per cent on the back of decline in RevPAR, seasonally weak July-September quarter and inflation in consumable costs," ICRA said in a release. With uncertain demand conditions and further supply additions, the outlook for the Indian hotel industry during 2013-14 remains negative, according to ICRA.
The down-cycle in the Indian hotel industry has stretched to five years (barring a brief pick-up in 2010-11), compared to past hotel industry cycles globally, which has 1-2 years of lows, preceded by 5-6 years of highs. The industry-wide margins have nearly halved over the last five years to 18 per cent as on 2012-13, from a high of 37 per cent in 2007-08, due to the industry reporting a CAGR of mere 4 per cent in revenues. 

"Our analysis of 8 key cities in the country indicates an inventory of 50,600 rooms in the premium space, with bulk of it being located in two gateway cities of Mumbai and NCR," ICRA said, adding, the inventory levels in the 8 cities for 2013-14, would go up by 16 per cent, with most of the rise coming from Mumbai, NCR and Bengaluru. ICRA, although, expects the Indian hotel industry to benefit in the future from structural reforms like better infrastructure, improved law and order situation (encouraging foreign tourist arrivals) and it would, however, need to remain focused on cost control by trimming frills and cutting non-essential expenditure to improve profitability. The rating agency expects 3-4 per cent growth in foreign tourist arrivals (FTA), which is way below CAGR of 6.1 per cent over last 7 years, on the back of weak domestic demand and bleak global economic scenario. The FTA in India continues to be slow, growing by mere 2.8 per cent for the first 7 months up to July 2013, compared to 8 per cent during the corresponding period last year. ICRA expects higher in-bound travel and an uptick in domestic travel owing to rupee depreciation. The hotel industry in India, it said, has resorted to several steps to tide over the weakness, which includes deferment or cancellation of capex, restructuring of debt, infusion of funds through equity dilution or sale of non-core assets and project modifications. 

ONION BLAST

INFLATION AGAIN @ 6 MONTHS HIGH

Inflation again shooted up to 6 months high of 6.1 percent in August leaving little room for the new RBI Governor Raghuram Rajan to rate cut in his maiden  monitor policy. He is scheduled to announce mid quarter Monitor Policy Review on Friday...

Wholesale price index (WPI) based inflation rose for the third straight month, driven by a whopping 244.62 per cent jump in onion prices on annual basis. WPI inflation was 5.79 per cent in July. Inflation in the vegetable basket as a whole was 77.81 per cent and in the fruit segment it was 8.17 per cent in August. The food segment as a whole became costlier by 18.8 per cent during the month.
On the positive side, potato prices fell by about 15 per cent, followed by pulses which became cheaper by 14 per cent. In the case of manufactured items, sugar and edible oils became cheaper by 4.2 per cent and 3.86 per cent, respectively. Overall, manufactured items showed a moderate increase of 1.9 per cent during the month on annual basis.

The WPI data showed that the build-up inflation rate in the financial year so far was 3.91 per cent compared to a build-up rate of 4.35 per cent in the corresponding period of the previous year.

On month-on-month basis, inflation in primary articles rose by 3.8 per cent in August. The index for 'Food Article' group rose by 5.3 per cent and that of fruits and vegetables by 13 per cent in August over the previous month.
The index for 'Minerals' group rose by 0.7 per cent in August on sequential basis.
The Prime Minister's Economic Advisory Council has projected the year-end inflation at 5.5 per cent.

The Consumer Price Index (CPI) based inflation, popularly known as retail inflation, was 9.52 per cent in August.