Upfront

     Print Edition: Aug 5, 2012

Tech Talk: TCS CEO and Managing Director N. Chandrasekaran has reason to exult. In a tough year, TCS reported results in line with estimates, with profit after tax rising 14.6 per cent from the last quarter to Rs 3,318 crore, and reaffirming its position as India's top IT company. In contrast, Infosys failed to meet its dollar revenue guidance for the first quarter ended June 2012

CORPORATE
Another chapter has been added to the murky airlines story, with the controversial exit of Bharat Bhushan as Director General of Civil Aviation. Differences with Civil Aviation Minister Ajit Singh over the handling of Kingfisher Airlines, the action against errant pilots and airline safety, are cited as reasons.

Singapore Prime Minister Lee Hsien Loong believes India's business environment is complicated. Singapore is India's foremost trading partner in the ASEAN grouping. In general, foreign investors continue to be wary of India. Among other reasons, they cite cancellation of 2G telecom licences, the government's handling of the Vodafone tax case, the proposed tax anti-avoidance rules, and lack of progress in easing foreign direct investment rules.

Ratan Tata
Ratan Tata
BT RETRO
  • Audi, which sold 759 cars in June, has for the first time taken a slender lead over BMW (750 units) in the race for luxury car sales. Also see www.businesstoday. in/audi-lux
  • Car sales in 2012/13 are expected to grow 9 to 11 per cent versus the 10 to 12 per cent forecast earlier by the Society of Indian Automobile Manufacturers.
  • Tata Group Chairman Ratan Tata, set to step down in December from the helm of the $100 billion conglomerate, said in a recent interview with Bloomberg that he regretted not having been able to make the group a "truly open, flat, transparent organisation". On retirement plans, he said he would spend time on philanthropic activities related to rural development, water conservation and nutrition.
  • Unemployment in advanced economies will remain high until at least the end of 2013. This is by far the weakest economic recovery in the past four decades, according to the Organisation for Economic Cooperation and Development.
  • Robert Diamond, former CEO of Barclays, will forego »20 million in bonuses for allegedly misleading regulators. He will receive about »2 million, a tenth of his full entitlement.
  • The Federal Reserve Bank of New York may have known as early as August 2007 that the setting of global benchmark interest rates was flawed. More than a dozen banks are being probed for their roles in setting Libor rates, including Citi, J.P. Morgan and HSBC.
ECONOMY
India and China are witnessing strong signs of a slowdown, while most developed nations are seeing moderate growth, according to the Organisation for Economic Cooperation and Development. The Asian Development Bank cut its 2012 forecast for developing Asian nations from 6.9 per cent to 6.6 percent. It has also cut its forecast for 2013 from 7.3 per cent to 7.1 per cent.

India's GDP growth will fall below the six per cent mark in 2012/13 and may return to the high growth path of over nine per cent only after the general elections in 2014, says a survey of corporates by Standard Chartered Bank.

Industrial production grew 2.4 per cent in May, driven by manufacturing output. Analysts had expected an increase of 1.8 per cent. It is a vast improvement over the figure for April, which was revised downwards to - 0.9 per cent from 0.1 per cent.

It was a fortnight of bold statements and retractions. P. Chidambaram, widely tipped to be the next finance minister, was alleged to have said that urban middle class people who can afford mineral water and ice cream should not complain about rising prices. Within hours, the Home Minister said he had been misquoted. Earlier Law Minister Salman Khurshid, commenting on the drift in governance, claimed Rahul Gandhi was only playing a cameo. Soon after, he claimed his statement was wrongly interpreted.

  • $3.6 trillion Estimated global IT spend in 2012. Cloud computing, telecom and consulting services are expected to lead the growth, according to research firm Gartner.
  • Seven Rank of Indian stocks, in a list of best performers globally, in 2012. They have given investors a year-to-date return of 12.3 per cent, according to Bank of America Merrill Lynch.
  • $10.3 billion India's trade deficit in June, which contracted as imports came down. Imports fell 13.46 per cent during the month to $35.3 billion while exports declined 5.45 per cent to $25.1 billion.
MARKETS
World oil demand will slow down in 2013 from its already weak growth in 2012, says the Organization of the Petroleum Exporting Countries. Europe's debt worries, a faltering US economic recovery and deceleration of growth in emerging markets have been cited as the reasons.

ATM terminals in India are expected to grow to 230,000 in 2015 from 93,800 in 2011, at a compound average growth rate of 25.11 per cent, according to a report by AM Mindpower Solutions. To cover costs, it would require a bank to record at least 5,000 transactions every month, or about 170 transactions a day. The national average for daily transactions per ATM is at about 125-130 a day.

Coming Up
All eyes are on D. Subbarao with the first quarter review of monetary policy slated for July 31. There has been much speculation over whether the RBI Governor will lower the cash reserve ratio to improve liquidity. Indications that inflation will continue to stay high over the rest of the financial year will certainly be playing on his mind.

The finance ministry is planning to set up an exchange traded fund to sell shares of stateowned companies and meet the current financial year's divestment target of Rs 30,000 crore. Among those identified for divestment are Hindustan Copper, Oil India, SAIL, BHEL, HAL and RINL.

Youtube
  • Print

  • COMMENT
BT-Story-Page-B.gif
A    A   A
close