Economy to get back on 8 pc growth trajectory in 2 years: Plan Panel

Planning Commission Deputy Chairman Montek Singh Ahluwalia exuded confidence about India's potential, saying the economy will get back on the targeted growth trajectory of 8 per cent after two years.

"I think we can hit what we thought was our trajectory two years later because of the slowdown that we have," Ahluwalia said on Tuesday, on the sidelines of the 34th SKOCH Summit in New Delhi.

The economy expanded at a decade-low rate of 5 per cent in the first year of the 12th Plan (2012-17) period, during which the government has targeted an annual average growth rate of 8 per cent.

In the April-June quarter of the current financial year, economic growth slowed to 4.4 per cent, compared with 4.8 per cent during January-March. Growth was 5.4 per cent in the April-June period of the previous financial year.

"I believe that the long- or medium-term growth potential of the economy remains 8 per cent, provided you do all things outlined in the 12th Plan. Obviously, the first two years are not going to be at that level," Ahluwalia said.

According to Ahluwalia, the average economic growth rate in the 12th Plan period will be lower than 8 per cent and the Commission will make its estimate next year during the mid-term review of the five year policy.

Ahluwalia said he expects growth to improve in the second half of the current financial year.

"The second half of the year should be better. The first half was lower. So for the year as a whole to be better than 5 per cent, the second half has be really good. We don't know the numbers," he said.

Asked whether the slowdown is over, Ahluwalia replied: "I believe that the economy has bottomed out. The financial experts say that there will be turnaround. It is clearly not a strong rebound. But there is evidence that (there will be turnaround)."

India's exports in October grew 13.47 per cent to $27.2 billion, the fastest pace in two years, government data showed yesterday.

"The news on the exports front is very encouraging," Ahluwalia said.

He said the current account deficit will probably be lower than the target set by the Finance Minister. The deficit refers to the difference between outflows and inflows of foreign currency.

"He (the Finance Minister) himself said that instead of $70 billion, it would be $60 billion... The important news is that it would be much lower than $88 billion last year. That means we need less money. That should increase the assessment of micro-economic stability," he added.

Rupee falls further on strong dollar demand

 
Continuing its slide for the sixth straight day, the rupee on Wednesday lost 17 paise to trade at a fresh two-month low of 63.88 in early trade on strong dollar demand from importers amid weak local equities.

At the Interbank Foreign Exchange (Forex) market, the local currency opened lower at 63.88 a dollar from its previous close of 63.71.

Forex dealers said besides sustained demand for the US currency from importers and a lower opening in the domestic equity market also put pressure on the rupee but dollar's weakness against euro in the global markets capped the fall.

The rupee had depreciated by 47 paise to close at 63.71 against the dollar in the previous session. Meanwhile, the BSE benchmark Sensex fell by 53.97 points, or 0.27 per cent, to 20,227.94 in early trade on Wednesday.

Vodafone bets big on India 3G, to invest Rs 7,100 cr

 
Vodafone has drawn up ambitious plans to invest 700 million pound ( about  Rs 7,100 crore) in India during the next 2- 3 years mainly on rolling out 3G networks.

This amount will be in addition to  Rs 4,000- Rs 6,000 crore annual investments the company has been making in recent years, Vodafone India CEO Marten Pieters said on Tuesday.

The investment will be part of the cash- rich British company's Project Spring under which the Vodafone Group will invest 7 billion pound by March 2016, to establish stronger network and service differentiation in major global markets.

"The Indian investment is about 10 per cent of pound 7 billion in the next 2- 3 years. It depends also on what is available. The investment will be above the normal level of investment we would have done so it's like a catch up investment," Pieters said.

Riding on a strong growth in data usage and voice calls, Vodafone India said it has posted 13.5 per cent jump in revenue at  Rs 20,476.3 crore for the first half ( April- September period) of 2012- 13.

The company had logged Rs 17,581.3 crore in revenue during the same period in the last fiscal.

Pieters said, India has become the third largest contributor to the UK- based Vodafone Group's services revenues.

" We are also focused on growing the use of mobile Internet. Our data continues to contribute strongly to business, accounts for 9 per cent of service revenue in Q2, 2013- 14 fiscal," said Pieters.

He said most of the subscribers in India would use  Internet via mobile phones but the company doesn't have 3G spectrum in all the circles.

"We will try to get spectrum in all the circles next year. We count on pending approval for spectrum trading and the fresh 2100 Mhz auction in 2014," he pointed out.

On revenue growth, he said it is driven by hardening of rates, exponential growth in data and good subscriber base. "These, however, were partially offset by the effect of seasonality and regulatory changes," he added.

"The service revenue has grown 13.5 per cent to Rs 18,481 crore during the 6- month period from  Rs 16,282.6 crore in the corresponding period last fiscal, but our data revenue has grown much faster at 76.5 per cent. The data growth has been driven by high smartphones usage, he added.

Vodafone India's operating profit or EBITDA ( earnings before interest, taxes, depreciation and amortization) improved by 30.6 per cent to  Rs 6,519.1 crore in H1, 2013- 14, compared to  Rs 4,993 crore in the same period of last fiscal.

Pieters said the environment in the country is more positive these days as the regulatory clarity is emerging. However, at the same time he pointed out that that all is still not fine on the regulatory front.

Meanwhile, Vodafone Group chief Vittorio Colao at a meeting in London on Tuesday said the company will only consider an IPO in India once the $ 2- billion tax dispute is resolved.

"We don't have to do it… because we don't need the money. We need to resolve the tax issue first," said Colao.

Colao added that there was " no real change" to discussions on the tax dispute. " We have had talks and continue to have talks. It's complicated and honestly, we have to see where it goes."

Vodafone posted a 13.5% jump in revenue at  Rs 20,476.3 cr for the first half of 2012- 13.

Apple's new retina display iPad Mini hits stores without fanfare

Apple Inc has begun selling its new iPad Mini, the one with its famed retina display feature, without the usual fanfare.

The company usually announces the availability date in advance, allowing loyal customers to line up at stores overnight to be among the first to buy one. This time, Apple quietly issued a news release on its immediate availability.

Supplies also are limited. People had to order them online to pick them up at Apple's retail stores. This suggests the company may be having problems producing enough iPad Minis.

Apple CEO Tim Cook acknowledged during a conference call two weeks ago that "it's unclear whether we will have enough for the quarter or not."

The new Mini is the first version of the smaller iPad to feature the high-resolution display that Apple calls Retina. It also includes a power-efficient A7 chip, along with faster wireless and expanded LTE cellular connectivity.

The new iPad Mini is available in silver or gray. Wi-Fi-only models will start at $399 for a 16-gigabyte gigabyte model while cellular-capable models will start at $529 for the 16-gigabyte model. It's available in the US and several other markets.

'Mfg growth to remain subdued in Q3 on high interest rates'

New Delhi: The country's manufacturing sector is expected to witness subdued growth in the October-December quarter on concerns over high interest rates, a survey by industry body Ficci today said.

"Low or subdued growth is supported primarily by some improvement on export front. However, we are seeing rising concerns over the cost of credit by the manufacturers as compared to previous surveys," Ficci President Naina Lal Kidwai said.

Upturn in industrial sector is particularly evident in sectors like leather, textiles, cement, chemicals and textiles machinery. At the same time, sectors like automotive, capital goods and electronics are expected to witness sluggish growth in Q3, the survey found.

Besides, outlook on hiring looks bleak in manufacturing, with over 75 percent of the respondents unlikely to hire additional workforce in next three months.

Moreover, the survey found that five out of thirteen sectors were likely to witness low growth (less than 5 percent). Only two sectors, leather and paper, are expected to have a strong growth of over 10 percent in Q3 2013-14 while remaining sectors are likely to witness moderate growth.

"Notably, the proportion of respondents availing credit above 12 percent per annum rose significantly in the current survey to 58 percent as compared to 42 percent in previous survey", Kidwai said.

Interest rate paid by the manufacturers, as reported in the survey, ranges from 8 to 16 percent with average interest rate at around 12 percent per annum.

The investment scenario in manufacturing sector will also remains subdued in Q3 with 72 percent respondents not having any plans for capacity additions for the next six months as compared to 74 percent respondents in the previous survey.

However, the demand conditions appear to be slightly better with 44 percent respondents reporting higher order books for Q3 2013-14 as compared to 32 percent respondents in the previous quarter.

The survey covers thirteen major sectors namely textiles, capital goods, textiles machinery, metals, chemicals, cement, electronics, automotive, leather & footwear, machine tools, food processing, paper and tyre.

FM asks service tax defaulters to come clean

 
New Delhi: In a stern warning to 10 lakh service tax defaulters, Finance Minister P Chidambaram today asked them to come clean so as to avoid punishment.

"We have reached the tipping point where we have to pause, take stock, talk to you, offer a fair and generous transition method and persuade as many of you to come over to paying taxes before the tax is enforced in a strict manner.

"VCES is just that. The one who has not paid service tax to draw a curtain on the past and move on to a new chapter in his business. That is what VCES is," he said.

He was meeting representatives of various trade and industry associations and chambers of commerce and industry to encourage them to take advantage of the service tax amnesty scheme -- Voluntary Compliance Encouragement Scheme (VCES).

Chidambaram said that of the total 17 lakh registered service tax payers, only seven lakh of them were paying the levy.

"This scheme is aimed at 10 lakh people who either are non filer or stop filer. Many of the 10 lakh have not filed at all, or not paid service tax at all. Many have paid from certain period and then stopped paying. I don't know who is cleverer, the guy who never pays or who stops paying," he said.

The Finance Minister, who earlier had a similar interaction in Chennai, said he does not believe in harsh penalties, but "sometimes it is necessary to send a stern message".

Both the non-filer and stop-filer are treading on dangerous ground, he cautioned.

"We have enough information today about business companies, firms, partnerships. We have the PAN numbers. We have digitised most of our operations," he said.

Rupee will settle down: Chidambaram

New Delhi: With the rupee declining to a two-month low of 63 to a dollar, Finance Minister P Chidambaram Monday assured the domestic currency will stabilise.

"Rupee will settle down," he told reporters here.

In early trade today, the rupee fell to 63.33 to a dollar, its weakest since September 18.

The Indian currency started weakening since last week after the dollar purchase by oil companies was partly shifted to the market.

"Rupee weakness is due to OMC forex demand being moved to market. 30-40 percent of OMC demand has moved to market," Economic Affairs Secretary Arvind Mayaram had said last week.

The PSU oil companies are the biggest buyers of dollars, requiring USD 8-8.5 billion every month for the import of an average 7.5 million tonne of crude oil.

In August, the Reserve Bank had opened a special window to help the three state-owned oil marketing companies -- IOC, HPCL and BPCL -- to meet daily foreign exchange requirements and buy dollars directly from RBI.

The rupee has recovered over 8 percent since August 28, when it fell to a record low of 68.85 to the dollar. The gain in rupee had followed optimism that the US Federal Reserve would delay the tapering of its bond buying programme.