The Indian Economy - Page 23

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Posted: 16 years ago

India Plan Panel:Econ Stimulus Will Also Be Needed In 2009

The Indian economy will need more fiscal and monetary steps in 2009 in line with the central bank and the government's aim of reviving growth in a slowing economy, the Planning Commission's deputy chairman said Tuesday.

Economic revival is on top of the government's agenda. The need for stimulus will be there in 2009. We intend to continue the stimulus, Montek Singh Ahluwalia said on the sidelines of an industry event.
The government has taken steps to ease overseas borrowing norms for infrastructure, finance and real-estate companies, all of which have been hit hard by the current crisis, as part of a fiscal stimulus package that also included an additional INR200 billion expenditure and some tax breaks. Referring to inflation, Ahluwalia said, it isn't a problem at the moment. It (inflation) is now at a normal and reasonable level. I think it will continue to go down further, he added.

Unitech recasts its debt

Property developer swaps existing loans for cheaper ones

Unitech Ltd., one of India's largest real-estate companies, said it has negotiated with financial institutions to extend repayment for 10 billion rupees ($486.3 million) and replace costlier loans with cheaper ones. The company, which has about 83 billion rupees in total debt, also said Monday that it received shareholders' approval to raise up to 50 billion rupees of funds as it seeks to meet loan repayments, land payments and complete current projects amid sluggish demand. We are evaluating various options to recapitalize our balance sheet for the long term, Managing Director Sanjay Chandra said

Crisis Dents Investment in India

The current global financial turmoil is likely to shave about $5 billion off foreign direct investment flows into India in the fiscal year that ends March 31, a government minister said Monday.

India Raises Concerns Over Tata Communications' Liquidity

Tata Communications Ltd.'s liquidity is near a "critical" level and it has sought the Indian government's approval to raise funds, according to a government note.

"Its [Tata Communications'] funds position is reaching a critical stage in January and hence the department (of telecommunications) as a 26% shareholder may like to allow the company to pursue non-debt funding in consistent manner.

Satyam Bank Documents at Issue

Fraud Probe Sheds Light on How Outsourcing Company Inflated Its Balance Sheet

Satyam Computer Services Ltd., the Indian outsourcer embroiled in a fraud scandal, used forged documents from at least four major banks to claim a cash balance in excess of $1 billion, according to a person close to the investigation. Investigators have sent Satyam's account-balance statements and letters of confirmation of account balances to officials at HSBC Holdings PLC of the U.K., Citigroup Inc. of the U.S., and HDFC Bank and ICICI Bank Ltd.

Edited by jagdu - 16 years ago
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Posted: 16 years ago

Surviving 'India's Enron'

The arrest last week of Satyam Computer Services, Ltd., Chairman B. Ramalinga Raju for falsifying corporate figures is being called "India's Enron," The Indian government's decision to replace Mr. Raju's entire board underlines how great a shock the Satyam fraud has been to the Indian establishment. Indeed, this is the first time the government has superseded a private corporate board. But then Satyam, once the country's fourth-largest information-technology firm, is more than just any old company'it's long been seen as an icon of the new Indian economy.

The fraud was revealed when Raju sent a fax to the Securities Exchange Board of India on Jan. 7 and admitted Satyam had falsified profits and that its 50 billion rupees in cash reserves were notional. An earlier attempt to fill this financial hole by buying up the Maytas real-estate firms of his sons had been shelved because of shareholders' outcry at what seemed like crony capitalism. When DSP Merrill Lynch, after inspecting Satyam's books, concluded it could not find a merger partner and that, as legally required, it would have to report why to SEBI, Raju realized the game was up. The confessional fax followed.

In part because Mr. Raju's version of events has yet to be verified, the larger consequences of the Satyam scandal for India are unclear.

The fallout could be severe. India's growth story has been fundamentally different from China's in a number of ways. But a crucial difference has been that foreign investment into India has been largely through stock purchases rather than, as in China's case, the building of plants.

Investors have placed their bets on the Indian private sector, that it would both grow and become more professional. As a senior Citigroup executive told the press, The India story has been whether a dynamic private sector can outgrow a dysfunctional government.

The question being asked is whether Satyam is a sign that even the Indian corporate story is less than what it seemed. This is not merely because Satyam was in 2007 India's 19th most valuable company, but also because it was a firm from a sector heralded as emblematic of an India matching the best standards in the world.

Most investors have so far treated Satyam as a one-off, the odd rotten apple that inevitably comes up in a capitalist barrel. Maintaining this viewpoint will depend on three things:

First, evidence that Satyam's ability to cook its books for several years was more about its auditor, Pricewaterhouse, and Mr. Raju's celebrity status than the Indian regulatory system. On paper, the country's financial regulations and corporate governance standards are broadly on par with the West. However, implementation is a different story. For example, of the 100 posts in the Serious Fraud Investigation Office over 30 are presently vacant. A ban on fully owned subsidiaries of multinational auditing firms means Indian-based firms are small and parochial.

Second, indications that the Indian government and its corporate sector are genuinely interested in plugging whatever gaps the Satyam scandal may reveal. Also, how severely and quickly will justice be dispensed to the investors. At last count, four different inquiries have been launched by central government agencies. More may come at the state level. By chance, the country's 52-year-old Companies Act is before a parliamentary committee for revision. The Satyam scandal is likely to mean severer penalties for fraud in the new act, including the right to class-action lawsuits. The Securities and Exchange Board of India (SEBI) has already set up a panel to review all quarterly audit reports of the 80 firms that makeup the two major stock-market indices.

Third, an understanding of why such a firm, whose peers had operating profits of 20% or more, had to play around with its accounts. Preliminary evidence indicates Satyam never actually developed a business model on par with other big software firms like Infosys and Wipro. It won outsourcing contracts by bidding 20% to 30% less, even if it made no money on them.

Mr. Raju, fearing as he wrote that poor performance would result in a takeover, hid this by inflating profits. He probably funneled his own wealth into realty with the idea of having Satyam later takeover these real-estate assets with its nonexistent profits. If this is proven, it will almost come as a relief to corporate India. Satyam failed because it was unprofitable and, ultimately, the market caught up with it.

India is facing a broad corporate transition. In the past, its companies were either small and family-owned or large and state owned and neither had any incentive to prioritize corporate governance. Today, more and more Indian firms are becoming profit-driven, professionally managed and, thanks to a need to tap foreign capital, incentivized to clean up their financial act. All three credit-rating agencies that provide corporate governance advice in India agree on this general trend.

Making that transition is difficult. A survey last year of some 6,000 listed Indian firms by India Forensic and the Bombay Stock Exchange's figures for members who handed in corporate governance reports come up with roughly the same figure: about 20% of listed Indian firms fall short. The majority of these are, no surprise, state owned or mom and pop concerns.

Satyam, for all its glitter, was a firm whose owner ran his software company in the manner his forefathers did land deals. It failed to make the jump between the two centuries, as will many others. But enough Indian firms are succeeding to give foreign institutional investors a reason to maintain a stake in the India growth story.

Wipro Posts 9% Rise in Net, Warns of 'Tough Year' in 2009

Wipro Ltd. shares fell Wednesday after the company reported a 9% rise in third-quarter net profit and warned that revenue from its software-services business would decline.Wipro, India's third-largest software exporter by revenue after Tata Consultancy Services Ltd. and Infosys Technologies Ltd., also said it has fewer clients than in the previous quarter as the financial crisis deepened. Chairman Azim Premji said in a statement that 2009 will be a tough year. We are living in tough times; the macro-economic challenges are significant and impacting businesses across segments.

Tata Consultancy Sees Some Clients Pulling Back

Consultancy Services Ltd., India's largest software exporter by revenue, is facing project cancellations and delays even from smaller clients as the impact of the global slowdown worsens, its chief operating officer said. The worsening impact means billing rates for outsourcing contracts which had been stable in the quarter ended Dec. 31 are certain to fall, N. Chandrasekaran said in a recent interview. At least 2009 is going to be bad, he said. We don't know about 2010. I have no data points to take a call.

Edited by jagdu - 16 years ago
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Posted: 16 years ago

Prosecutor Says Satyam Inflated Staff Headcount, Siphoned Money

A prosecutor pursuing allegations of fraud at Satyam Computer Services Ltd. said Thursday the company has 13,000 fewer employees than it reported and that as many as 400 fake transactions had been uncovered in the investigation so far.India's road to better corporate transparency could be bumpy.The controlling shareholders of Indian companies will soon have to disclose when they put up their stockholdings as collateral against a loan. That's a response to Satyam Computer Systems founder Ramalinga Raju, who was able to perpetrate a massive fraud, in part by raising funds.Satyam to Explore Options as Customers Depart Satyam Computer Services Ltd., embroiled in a fraud scandal, will decide on hiring an investment bank Thursday to help the company explore options, board member Deepak Parekh said Wednesday.All options are being looked at, Mr. Parekh told reporters on the sidelines of an industry event.The comments came after Tarun Das, another Satyam director, said Tuesday that potential buyers had approached the board, although it hadn't yet discussed buyers or whether it would sell a stake.

India's Wipro Expects a 'Tough Year' as Clients Dwindle

Wipro Ltd. posted an 8.7% rise in third-quarter profit, but the company warned that revenue from its software-services business would decline. Wipro, India's third-largest software exporter by revenue after Tata Consultancy Services Ltd. and Infosys Technologies Ltd., also said it has fewer clients than in the previous quarter as the financial crisis deepens.

Chairman Azim Premji said that 2009 "will be a tough year. We are living in tough times; the macro-economic challenges are significant and impacting businesses across segments."

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Posted: 16 years ago

Indian Premier Singh to Undergo Heart Surgery

Indian Prime Minister Manmohan Singh will undergo heart surgery Saturday, taking him away from official duties for several weeks during the run-up to national elections that must be held by May. The 76-year-old leader will have heart bypass surgery at the All India Institute of Medical Sciences in New Delhi, Mr. Singh's office said in a statement. He was admitted to the hospital Friday afternoon, a spokeswoman for the prime minister said.

[Manmohan Singh]

Manmohan Singh

The surgery is common among patients with blockages or contractions in the arteries. Mr. Singh has a history of coronary illness. When Mr. Singh will be able to resume the duties of office isn't yet known. A spokesman for the Congress Party, which leads the country's ruling coalition, said it might take at least a month for Mr. Singh to return to normal duties.

Pranab Mukherjee, minister for external affairs and a senior Congress Party official, will head the cabinet in Mr. Singh's absence. Mr. Mukherjee also is likely to oversee the ministry of finance. Mr. Singh nominally took on the role of finance minister after he transferred then-Finance Minister Palaniappan Chidambaram to head the home ministry in the wake of terrorist attacks in Mumbai in late November. Mr. Singh, a former academician and bureaucrat, became the country's prime minister in 2004 and has played a key role in steering the country's recent strong economic growth, though that growth is expected to slow markedly this year because of the global slowdown. He is also expected to stand again for the prime minister's office should Congress emerge as the victor in the national polls, which are expected sometime in April. If his health problems linger, however, it could potentially affect his ability to serve. One potential successor to Mr. Singh in the prime minister's office is Rahul Gandhi, a Congress parliamentarian and scion of the Gandhi-Nehru dynasty. The Congress Party spokesman, however, said no such succession scenario is currently being considered. We will have to wait for him to get well to make such conjectures, Mahesh Rangarajan, professor of history at the University of Delhi, said of Mr. Singh. The Indian prime minister is generally appointed from among the elected representatives of the party that forms the government.

The office of Lal Krishna Advani, the leader and prime ministerial candidate of the opposition Bharatiya Janata Party, said he wished for the speedy recovery of Mr. Singh.

Indian Prosecutors Allege Satyam Founder Siphoned Funds

The disgraced former chairman of Satyam Computer Services Ltd., B. Ramalinga Raju, used salary payments to 13,000 fictitious employees to siphon millions of dollars from the Indian outsourcer for land purchases, prosecutors said Thursday. Prosecutors in the southern Indian city of Hyderabad, where the technology-outsourcing firm is based, told a criminal court that Satyam has only about 40,000 employees instead of the 53,000 it claims. Prosecutors claimed the money, in the form of salaries paid to ghost employees, came to around $4 million a month. The money was diverted through front companies and through accounts.

Drug Ban, Rupee's Fall Lead to Ranbaxy Loss

India's Ranbaxy Laboratories Ltd. turned in a fourth-quarter net loss, hurt by foreign-exchange volatility and a U.S. ban on some of its drugs. Ranbaxy Chairman Malvinder Mohan Singh said during a conference call Thursday that the company is likely to return to profitability this year.

All Aboard

Luxury Is Back on the Tracks

Alternatives to air travel, speedy and hassle-free, the growing luxury-rail branch has taken a different route entirely: Traveling on one of these trains isn't so much about the getting there as about the going. Rather than airplane alternatives, these are cruise ships on land. There are more older people with more time and more money. It's the same thing that has driven the increase in cruising. Like cruise ships, some luxury trains have their ports of call, where passengers may alight on their own or take part in tours or other activities offered by the train operator or its partners (sometimes at an added cost). And like cruise ships aiming for the standard of fine hotels that just happen to float, many of these trains aim to be fine hotels that just happen to have wheels, with food and service equal to what you'd find in an upscale property. In fact, on some trains the on-board hospitality is managed by a premium hotel chain.

While the global economic crisis could derail the industry's growth, for now rail operators and governments are jumping on the trend. In India, for example, following the success of the Palace on Wheels in Rajasthan, there's now the Deccan Odyssey in Maharashtra, the Golden Chariot in Karnataka and, as of this month, the Royal Rajasthan on Wheels. (Each state's tourism department typically helps promote and finance the trains.)

And the luxury standard keeps rising. The Golden Chariot, for instance, has a fitness and massage area. A couple of spa treatments. Of course, there's only so far a train can go in imitating a hotel or cruise ship. Cabins grow larger, but space in a railcar will always be at something of a premium. Shaving and sudden sways will never be a good mix. Don't expect silence: Some noise is inevitable in rolling steel boxes, even with modern soundproofing techniques (bring ear plugs for the first night if you're sensitive). Indeed, for true train lovers, the sway and clatter are part of the romance of rail. No matter how luxurious some offerings grow, rail travel will always retain a feeling of adventure. There's more a sense of arrival and departure than in an airplane, If you take a dozen flights, you will have one experience a dozen times.

The Ghan (Platinum Service)

The Golden Chariot

[Golden Train photo] The Golden Chariot

The Golden Chariot's purple exterior, left; a cabin with a double bed and LCD TV, right

The Indian state of Karnataka rewards visitors with culture, history and exotic cuisine but punishes them with potholes. We would not liked to have used the roads,says Robert Upward, a retired engineer from the U.K. who recently visited with his wife. We would have ended up physical wrecks. Instead they traveled from the tech capital of Bangalore to the beaches of Goa on the Golden Chariot, which launched early last year (and is in fact purple). Not only is the ride smoother than on the roads, but just in case of a twinge there are massage rooms (go with the Ayurvedic) in the spa and fitness carriage, along with a full gym. Backs are further soothed by the comfortable double beds available in the cabins.

Fitting for a train starting out from Bangalore, the cabins include wireless Internet access, a DVD player and an LCD TV with satellite channels. But Ms. Kota, the consultant, says the picture was never very good, and Mr. Upward would have liked one more remote control for adjusting the air conditioner, which had only an on/off switch. The train moves largely at night, leaving much of the day for sightseeing. Among the stops on the eight-day journey: the Kabini wildlife refuge, where the maharajahs used to hunt, and the city of Mysore, home to the ornate Mysore Palace and the Brindavan Gardens, which may be a familiar setting for Bollywood fans.

The dining car

Golden Chariot dining room photo
Golden Chariot dining room photo

The train is by far the best way to see Karnataka, it's almost impossible to see so much in so little time any other way. Particularly liked Hampi, a village in the north that was the last capital of the Hindu kingdom of Vijayanagar, and whose temples and palaces have been declared a Unesco World Heritage Site. Places like Hampi and Mysore inspired the train's royalty-themed interiors. The ornate Indo-Saracenic arches of Mysore Palace echo clearly in the lounge bar's mirror frames, and in the beds' headrests. The cabins feature hand-woven silk sheets and hand-carved wood panels. On- and off-board hospitality is handled by the Mapple Group, which runs a collection of luxury hotels in India. Both the food and service were excellent, the food as simply outstanding and vouches for the trip overall: It is a great historical and archeological tour of our home state.

Bangalore to Goa (eight days, seven nights)
Price: 202,056 rupees (about $4,110) for two in a double cabin during high season (September to March)

'Slumdog' Riles Bollywood

"Slumdog Millionaire" is coming home, in a manner of speaking. The film, about a poor teenager from the Mumbai slums who dreams big, has enjoyed significant critical acclaim in the West -- four Golden Globes in hand, 11 nominations at the British Academy of Film and Television Arts, and several Oscar nominations expected after this article has gone to press. But it is only now opening in India, where it's being greeted with more controversy than praise. Western audiences and reviewers have warmed to the improbable rags-to-riches story. Jamal Malik (played by Dev Patel), a poor teenager from the slums, takes part in the Indian version of the quiz show "Who Wants To Be A Millionaire?" and gets all the answers right, earning 20 million rupees ($415,000). Following suspicion that Jamal may have cheated, he is arrested and tortured. But the police discover he is telling the truth: He knows the answers because of the extraordinary turns his life has taken. Jamal returns to the quiz where the whole nation roots for him. He even gets the girl of his dreams in the end Latika (played by Freida Pinto).

The Indian reaction is proving more complex. The depiction of India's urban poverty it is, after all, set in a slum is a source of embarrassment for some. Meanwhile, within the film world, some Indian moviemakers are jealous at the fact that a foreigner, British director Danny Boyle, has made a film on their home turf so much better than any of the enormous number of movies Bollywood has churned out. Whether he realizes it or not, Mr. Boyle has made a film tapping into Mumbai's, and India's, split personality. The rich in Mumbai love to think of their city as on par with London and New York; its slums drag it back to Lagos and Soweto. While India's economy has continued to grow, the absolute number of poor people has also been rising due to population increase. This is a source of great unease. "Slumdog Millionaire," like Aravind Adiga's novel "The White Tiger" (winner of the 2008 Man Booker Prize in October) reminds us that everyone hasn't benefited from the boom.

India doesn't necessarily like such reminders. Bollywood's biggest superstar of all time, Amitabh Bachchan, chided the film on his blog for showing India as "a third world dirty under belly developing nation (sic)" when poverty can be found in rich countries as well. (Later he tried to distance himself from those remarks.) Documentary maker Bishakha Dutta chimed in, telling the magazine India Today, the film takes each and every clich there is about India and Mumbai and puts it in its plot. The result is a film that takes you from one horror of Mumbai to another, in a plot that is incredulously unbelievable.

Other films have raised similar hackles in the past. In the early 1980s, Bollywood actress Nargis Dutt admonished India's greatest director, the late Satyajit Ray, for selling poverty abroad to win awards. His debut film "Pather Panchali" (The Song of the Road, 1955) set in a dirt-poor Bengali village, won an award at the Cannes Film Festival in 1956. Days before his death in 1992, he received the Academy Award for Lifetime Achievement. Sudheer Mishra's "Dharavi" (1992) told the story of a taxi driver living in India's largest slum which is also where "Slumdog" takes place. Rabindra Dharmaraj's "Chakra" (The Wheel, 1981) featured a poignant love triangle in the slums. Mira Nair's 1988 film, "Salaam Bombay" (Salute Bombay) was set in Mumbai's seedy red-light district.

But all of those depictions have been art-house, not mass market. "Slumdog Millionaire" is by far the highest-profile film to explore such issues, and has certainly received the most international attention. This raises the stakes in terms of India's self-image problem. Compounding matters, Indian filmmakers have so far been unable to make a mass-market movie of their own that would offer an indigenous treatment of the subject, and appeal to global audiences. Bollywood's homegrown rags-to-riches stories are a dime a dozen, but they tend to come larded with a dozen songs, cheesy melodrama and interminable length. They don't travel easily across cultures. None has won awards that matter. That a foreigner has made a smarter, sharper and slicker film, A.R. Rahman's pulsating beat, upsets Bollywood.

It would be a shame, however, for such concerns to cloud India's reception of what is truly a remarkable film. "Slumdog Millionaire," shot in 2007 and 2008, has turned into an affectionate tribute to a city wounded by the terror attacks of last November. It extols the city's spunk and salutes the never-say-die optimism of India's poor. That's healing for Mumbai, and makes the film all the more worthy of celebration.


Edited by jagdu - 16 years ago
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Posted: 16 years ago

Pricewaterhouse Partners Arrested in Satyam Probe

Indian police arrested two partners of an Indian arm of accounting giant PricewaterhouseCoopers Saturday on charges of criminal conspiracy and cheating in connection with the fraud investigation at Satyam Computer Services Ltd., according to senior police official A. Siva Narayana. Satyam, a big Indian technology outsourcing company, was thrown into turmoil this month after founder B. Ramalinga Raju said he overstated the company's profit .

Satyam's CEO Search

The board Friday said it has shortlisted candidates for the positions of chief executive and chief financial officer and is in the final stages of arranging funds to meet operational expenses, including salaries and vendor payments. The board plans to meet again on Monday and Tuesday. Satyam didn't name the potential candidates. The company, India's fourth-largest software exporter by revenue until recently, is in the midst of turmoil after founder B. Ramalinga Raju earlier this month said he overstated the company's profits over several years.

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Fuel-Price Cut Threatens Brief Deflation Spell

India, which only months ago had double-digit inflation, now looks headed for a brief spell of deflation as fuel-price cuts add to the impact of weaker export markets and dropping commodity prices. But even if prices decline from year-earlier levels for a time, this won't signal the start of a self-sustaining spiral that drags down wages and demand, economists say. Rather, they say, India's technical deflation will reflect the year-on-year statistical comparison with earlier high inflation and will eventually be countered by the country's loose fiscal and monetary policy.

Indian Shares End Down

Indian shares ended lower Thursday as investors squared-off their long positions in blue chips such as Bharti Airtel and Larsen & Toubro ahead of the expiry of monthly derivative contracts. The Bombay Stock Exchange's benchmark 30-stock Sensitive Index fell 21.19 points, or 0.2%, to 9,236.28, following a 2.8% rise Wednesday. It traded between 9,164.96 and 9,379.68 during the day. Traders squared-off their long positions as they fear more negative news flow in the weeks ahead.

India's ONGC Profit Drops 43%

Oil & Natural Gas Corp., India's biggest oil and gas producer by volume, posted its second consecutive drop in quarterly profit, as the plunge in global crude prices and reduced production offset lower subsidy discounts to the country's state-run refiners. Profit for the fiscal third quarter ended Dec. 31 declined 43% to 24.75 billion rupees ($508.1 million), the company said Wednesday. It was much lower than the 40.55 billion rupees average of estimates of 10 analysts.

Indian Court Rejects Bail for Satyam Executives

A Hyderabad, India, court rejected bail petitions for Satyam Computer Services Ltd. founder B. Ramalinga Raju, co-founder and brother B. Rama Raju and former Chief Financial Officer Srinivas Vadlamani. The Hyderabad software exporter is in the midst of a crisis after B. Ramalinga Raju earlier this month confessed to overstating the company's profit over several years and created a fictitious cash balance of more than $1 billion. Prosecutors pursuing the fraud at Satyam Computer Services Ltd. said Tuesday the Indian technology outsourcer's founder, B. Ramalinga Raju, should be denied bail because he could slow the investigation if released. Their assertions came after an employee of a company managed by Mr. Raju's family told police that he had been instructed to hide documents connected to land purchases by the Raju family, according to prosecutors and a court document reviewed. Police in the southern Indian city of Hyderabad, where Satyam is based, are investigating whether large amounts of funds were siphoned from Satyam.

French Retailer Carrefour May Finally Enter India

French retailer Carrefour SA may be close to fulfilling its long-held ambition to enter the Indian market.

Carrefour, the world's second-largest retailer by sales after Wal-Mart Stores, has been in talks with Indian retail giant Future Group about a joint venture to create cash-and-carry stores in India, a person close to the situation said. Carrefour has unsuccessfully tried to link up with Indian retail companies in the past, and its negotiations with Future Group will still take at least another month, according to the person familiar with the matter. By teaming up with Future Group, whose holding include the Food Bazaar grocery store chain in India, Carrefour would catch up with global retail rivals Wal-Mart, which plans to open cash-and-carry stores with Bharti Enterprises this year, and Tesco PLC, which has formed an alliance with Indian conglomerate Tata Group to open such stores. German retailer Metro AG entered India in 2003 and operates five cash-and-carry stores in the country. Indian regulations bar foreign retailers from owning stores in India. They have to come in through franchise agreements with local companies or as wholesalers. Cash-and-carry stores are wholesale stores that sell goods to Indian businesses, including small stores, hotels and restaurants. For Future Group, a deal with Carrefour would help to finance further expansion in India and provide access to Carrefour's expertise and buying power. Carrefour's latest attempt to crack open the door to India was reported Thursday.

India Cuts GDP Forecast, Maintains Interest Rates

India's central bank, after a rapid-fire series of interest-rate cuts, kept key short-term rates unchanged Tuesday. But the Reserve Bank of India trimmed its economic-growth forecast for the current fiscal year a sign the door remains open to further rate reductions as the economy deteriorates. Calling on Indian banks to pass on recent rate cuts to customers so they can benefit from improved liquidity conditions, the central bank kept its main lending rate the repurchase rate at 5.5%, and its borrowing rate the reverse repurchase rate at 4%.
Edited by jagdu - 16 years ago
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Camera-Ready

A few months ago, Harish Padmanabha replaced an Indian oil painting and a watercolor long displayed above his dining room table in Bangalore with two prints from his rapidly expanding photography collection: Raghu Rai's Domes of Fame, showing a woman lounging against a window that overlooks the Taj Mahal, and Annu Palakunnathu Matthew's Tom & Annu Before, which juxtaposes a contemporary self-portrait with a 19th-century image of a Navajo American Indian youth.

The switch in dcor reflects Mr. Padmanabha's own shift as a collector at a dynamic time on India's photography scene. The 61-year-old mechanical engineer began acquiring paintings and drawings in the early 1980s, but now finds himself drawn primarily to photography inspired, in part, by new Indian galleries showcasing this medium.

Clare Arni photo

Photography's power to lure collectors world-wide is matched by the pragmatic fact that it remains far more affordable than many art forms. An installation by Indian artist Subodh Gupta featuring metal utensils piled on a rickshaw recently brought $842,500 at auction, while work by Indian master painters like F.N. Souza command prices as high as $2.5 million. On the other hand, prices for a limited edition photograph by an artist in India range from 20,000 rupees to 600,000 rupees ($416 to $12,500). Over the past two years, such modest prices have attracted relatively younger Indian buyers in their 30s and 40s, seeking to experiment with a medium that their parents barely considered art. Hoteliers, restaurateurs and company directors have been tapping galleries to furnish their walls. Yuppies are turning to photographs for home dcor. Vintage prints, once considered dusty relics, suddenly have cachet and fetch $5,000 or more from private dealers. Artists better known for installations, video and performance are now experimenting with digital cameras.

Contemporary photographers have seized on fresh interest from gallery owners and other patrons to find new audiences and escape expectations imposed by commercial commissions. There is more of an incentive to do our own projects. We create totally under our own steam, says Clare Arni, a British photographer born in India who lives in Bangalore and makes a living primarily as an architectural photographer. In November, Ms. Arni exhibited a suite of works in vibrant colors documenting disappearing professions in Kolkata, New Delhi, Bangalore and Chennai, such as silk dyers, medicine grinders and painters of movie posters a product of 18 months of research and travel. The show sold out two editions of prints.

Some gallery owners contend that the current financial uncertainty might actually be good for photography-collecting by allowing it to mature without the crazed speculation that infected the overall Indian art market.

'Street barbers, Nizammudin,' from Clare Arni's exhibition, 'Disappearing Professions in Urban India'

Clare Arni photo
Clare Arni photo

That includes short-term investors who in recent years kept some artwork especially paintings in storage while seeking to flip them for quick profit. The fact is, we need to have more collectors than speculators, says Devika Daulet-Singh, director of photography at PhotoInk, a specialized gallery that opened in New Delhi in February 2008. If you can't see the work on somebody's wall, how are you going to develop an aesthetic or a taste for it? she adds.

India experienced a rather curious lag in photographic appreciation compared with the West. Christopher Pinney's book Camera Indica notes that the medium arrived in India shortly after its invention in 1840 and was promptly embraced by British rulers and India's upper echelons. Photography played a vital role in the formation of the Empire and informing the citizenry back home about the lands and the people under conquest, Mr. Pinney writes. Studio photography by Europeans and Indians also supplied a steady stream of portraits.

In the country's art world, however, Indian painting and sculpture long held a more privileged position. Until a decade ago, photography was largely denigrated as an advertising tool or journalistic reinforcement of an India that was viewed by the rest of the world as poor and backward.

The map was sharply divided: Mumbai sheltered most of the commercial photographers, New Delhi claimed the bulk of photojournalists and Bangalore offered more opportunities to wildlife photographers, given its access to nature sanctuaries in southern India.

But as prices escalated in the Indian art world for seasoned painters and novices alike, a quiet backlash grew stronger. The ranks of disillusioned collectors included tea and explosives entrepreneur Abhishek Poddar. He and his friends, who began collecting as teenagers, started getting a little bored with the art scene, he says.

'Belle' from Portfolio 1 of Annu Palakunnathu Matthew's collection of photos called 'An Indian from India'

Belle photo
Belle photo

Anything and everything would sell, as long as it was fashionable. Prices were going crazy. There was no soul left in it, complains the 40-year-old collector. I can't say this about every artist. But it was more the norm than the exception.

Turning to photography in 2000, Mr. Poddar found himself disheartened by the fact that photographers had few opportunities to exhibit their work, even though their prices were quite affordable. That realization eventually led to the September 2006 launch of Tasveer ("picture" in Hindi), a pioneering photography consortium led by Mr. Poddar that began with a gallery in Bangalore and currently also organizes shows in New Delhi, Mumbai and Kolkata together with local partners. The consortium has helped blur categories of photographers by providing an outlet for more creative impulses. People thought we were a little mad, Mr. Poddar adds. They said, Why photography, and, who buys photography?

Basic information on the medium was scarce, let alone any kind of sophisticated critical discourse. Photography as a medium has never been taught in Indian art schools. So there is no sense of its history or its practice, says Sunil Gupta, a New Delhi-based photographer and curator who was educated at the Royal College of Art and worked for many years in Britain.

Mr. Gupta and fellow curator Radhika Singh met with hundreds of photographers throughout the country and sifted through countless boxes of prints to put together the Click! exhibition in New Delhi and London in early 2008. The show included the works of 150 photographers. While many London buyers were willing to purchase unfamiliar names, Indian collectors gravitated toward the more famous photographers such as Raghu Rai, who was recruited by Henri Cartier-Bresson in 1977 to work with Magnum Photos.

Some art promoters seem willing to wait for the market to build and collectors to embrace new talent. There is no money to be made immediately, acknowledges Arun Vadehra, owner of Vadehra Art Gallery, the New Delhi venue for the Click! Show. We are just investing in the future for something which will become very, very lucrative. When more and more shows happen, more talent will emerge and more people will take chances, he says.

A current favorite among collectors at home and abroad is Dayanita Singh, whose studied black-and-white prints marked the November opening of the Berlin branch of the New Delhi gallery Nature Morte. Ms. Singh's show, Let Me Go, which ended earlier this month, encompassed images of an ashram in Varanasi, a treatment center for mental illness in Gujarat, and portraits of a eunuch she befriended over the course of 13 years. The photographer is perhaps better known, though, for her work in documenting upper- class families in Kolkata and capturing iconic images related to Indian history, such as a white jacket worn by former Prime Minister Jawaharlal Nehru.

New Delhi advertising executive Swapan Seth acquired the photograph of the jacket for his collection. I thought it was extremely important for my children, says Mr. Seth.

Such feelings aren't unusual, says Ajay Rajgarhia, who launched an online business in fine art photography in mid-2007 called Wonderwall and is pressing ahead with exhibitions in several Indian cities early this year despite the economic slowdown. For the collector, it's also an emotional decision. For an investor, it's a numbers game, he says.

As India's photography aesthetic continues to evolve, many collectors wish to avoid the images of deprivation often seen in the press. India is a country that has enough problems and misery. It's not that one wants to run away from it or shy away from it, but sometimes you don't want it staring you in the face, says Rahul Chowdhury, a New Delhi-based cable manufacturer who since 2006 has collected some 75 photographs, from colorful, kinetic scenes of Mumbai to a contemplative black-and-white portrait of bicycles on a remote beach.

Walking a visitor through Gallery Art & Design, the New Delhi photography gallery she opened in August, Sangeeta Agrawal points to an image of two slender rural boys on a bicycle. Indians won't go for this. They won't relate to it. It shows poverty, she says, holding out hopes that a foreign collector might find the print compelling. She moves on to a vivid image of a red monastery door that has sold several times over. Indians want to see something more opulent and happy in their homes, Ms. Agrawal says.

Mr. Rai, the Magnum Photos photographer whose Domes of Fame occupies pride of place in Mr. Padmanabha's home, derides collectors who prefer happy, snappy, pretty stuff. His own work, he says, aims to reflect the peculiar complexities of his native land. India being a multicultural, multireligious society, the experience of India has to be multilayered in each image, Mr. Rai says. The multiplicity of moments in one given image it is so much to experience. That's what I am aiming at with those panoramic pictures.

The Songbird of 'Slumdog'

Hip-hop star M.I.A. on her Oscar and Grammy nominations. Hip-hop artist M.I.A. recently rocketed from the experimental underground to the pinnacle of the entertainment world. "O Saya," her collaboration with Indian composer A.R. Rahman from the "Slumdog Millionaire" soundtrack, is one of three nominees for the best-song Oscar. And her track Paper Planes is in contention at this weekend's Grammy Awards for record of the year the Recording Academy's top honor.

Born Mathangi Arulpragasam in Britain, the future singer returned with her family to her parents' native Sri Lanka when she was 6 months old. The family, who are members of Sri Lanka's ethnic-Tamil minority, moved to Jaffna, in the island nation's north. Not long afterward, the country erupted into civil war between the Tamil Tigers and the Sri Lankan government, and violence consumed Jaffna.

As a child, Ms. Arulpragasam rarely saw her father, Arul Pragasam, who was involved in the Tamil-separatist movement though she says he was part of a more political faction than the violent and better-known Tigers.

At age 10 she fled with her mother, elder sister and younger brother first to India and then back to London, where her mother now works as a seamstress and M.I.A. attended art college.

M.I.A.'s songs appear in 'Slumdog Millionaire.'

M.I.A.s songs appear in Slumdog Millionaire.

Ms. Arulpragasam says her harrowing life has informed both the lyrics and sound of her songs. After her song Paper Planes was included last year in a trailer for the stoner comedy Pineapple Express, it became M.I.A.'s first hit and an unlikely one at that. The song's signature element, gunshot sounds that are part of its rhythm bed, generated controversy. The song's refrain is the seemingly aggressive chant: All I wanna do is Pow! Pow! Pow! Pow and take your money. But M.I.A. calls the song an ironic comment on the way Westerners perceive Third World immigrants.

Ms. Arulpragasam now lives in Los Angeles, where she is starting a family of her own under far gentler circumstances than the ones in which she was raised. She and fianc Benjamin Brewer are expecting her first child as soon as this weekend.

In her own words: I'm nominated for a Brit Award in England. But for me nominations are not like a musical thing. It's more like me having a platform. The point of success is being able to tell a wider audience about the situation in Sri Lanka.

On her lyrics: I've seen, with my own eyes, a lot of s- go down. I've seen people get massacred in front of me. My school was burned to the ground when I was 6 years old. When you come from that kind of background, you do become matter of fact, and tell it like it is. If you think lyrics about guns are bad, I shouldn't have been shot at when I was 7 years old.

On A. R Rehman: I'm not used to recording in $1 million studios. I approach music as an experimental artist. I go out in the street and record people in their element; I play around with drum machines and samplers. I make a whole bunch of mess and see what works. A.R. Rahman works in a much more professional way than I do, with a lot of professional people. But I love him musically. He's been the only composer in every Tamil film that I've watched and liked. When I first met A.R. [while recording her album "Kala"], I wasn't that big. My music wasn't Tamil-sounding, it didn't sound like average music coming out of the West, but it wasn't mainstream Indian, either.O
n her father: He was a member of a group called EROS Eelam Revolutionary Organization of Students. He was an intellectual who intellectualized the war, even while it was going on. He tried to mediate between the [Sri Lankan] government, the Indian government and the Tamil Tigers. That was his dream, to mediate an agreement. When he failed, he got discouraged and quit politics. He moved to Cambridge to research and write books about sustainable development.
On her grammy nomination: We're planning a home birth, but it might be a Grammy birth! Eating a hot curry could make me go into labor, so imagine what getting on stage with Jay-Z, Lil Wayne and T.I. would do. Everyone's been very understanding.
Edited by jagdu - 16 years ago
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Posted: 16 years ago

India Evening Markets Wrap

Here is a roundup of markets news at 04:30 pm on Monday, Feb.2.India's 30-share BSE Sensex closed down 3.79%at 9,066.70. Leading the fall in the index were the real estates, commodities and financials. On Monday, tech-major Wipro was down 4.76%, Tata Steel fell 6.63%, DLF shed 13.54%. The broader 50-share NSE Nifty index closed down 3.76%.The RBI reference rate for Indian rupees against the U.S. dollar was 49.01.India Gold was down 0.93% at 14,317 rupees per 10 grams at 16:18 pm.India crude oil futures were down 2.92% at 1998 rupees ($40.7) per barrel at 16:22 pm.

Suspected Rebels Kill 15 Policemen in India

Suspected communist rebels ambushed and killed 15 policemen in a jungle in western India, police said Monday. At least eight rebels were also killed during Sunday's gunbattle that lasted two hours after guerrillas attacked a police unit patrolling a remote jungle that cuts across the borders of Maharashtra and Madhya Pradesh states, said Maharashtra police chief A.N. Roy. The rebels, known as Naxalites after the village where the movement was founded, frequently target police and government officers. The clash occurred about 620 miles (1,000 kilometers) northeast of Mumbai. Mr. Roy denied reports in the Indian media that the bodies of policemen had been mutilated. That is absolutely false. There was no disfiguring, he said. The Maoist rebels are active in 13 of India's 28 states, fighting for more than three decades demanding land and jobs for the poor. They say they are inspired by Chinese revolutionary leader Mao Zedong.

DLF, Unitech Plunge After Lower-Than-Expected Profits

DLF Ltd. and Unitech Ltd., India's two biggest developers, fell in Mumbai trading after reporting third- quarter profits that missed analysts' estimates.

DLF, India's largest real estate company, slumped as much as 20 percent to it's a record low. Net income for the three months to Dec. 31 dropped 69 percent to 6.71 billion rupees ($137 million), the lowest since its trading debut in July 2007, the company reported on Jan. 31. New Delhi-based Unitech fell as much as 13 percent after it posted a 74 percent drop in profit.

Dresdner Abandons Entry Into India After Commerzbank Takeover

Dresdner Bank AG has abandoned plans to enter the Indian consumer market after being acquired by Commerzbank AG, in what may signal a retreat from overseas markets. The Frankfurt-based bank has returned its Indian banking license, Dresdner spokesman Martin Halusa said after being contacted by Bloomberg News today. A unit in India would not contribute to the new overall strategy of Dresdner Bank in the future, he added.

Rising sea salinates India's Ganges: expert

Rising sea levels are causing salt water to flow into India's biggest river, threatening its ecosystem and turning vast farmlands barren in the country's east, a climate change expert warned Monday. A study by an east Indian university in the city of Kolkata revealed surprising growth of mangroves on the Ganges river, said Pranabes Sanyal, the eastern India representative of the National Coastal Zone Management Authority (NCZMA).

India set to follow cheap car with 7 laptop

India is poised to unveil the ultimate in credit-crunch computing: a 500 rupee (7) laptop. A government-developed prototype, due to be shown for the first time tomorrow, will mark the most ambitious attempt yet to bring computers to the developing world and to bridge the "digital divide" between rich and poor.

India Exports Fall 3rd Month Running In December
India's exports fell for the third month on the trot in December as slumping global growth curbed demand for local products -- leading analysts to warn that the outlook for the near term remains challenging. Exports fell 1.1% on year in December to $12.70 billion, shows provisional data issued Monday by the Ministry of Commerce.
Hinduja Keen To Buy Satyam
The Hinduja Group said Monday it is interested in buying Satyam Computer Services Ltd. through a bidding process, adding its name to a list of companies that have shown interest in acquiring the beleaguered software exporter. There are a lot of synergies between Satyam's business process outsourcing business and our information technology arm, and we are very much interested in it, its spokesman Jayaram Ramanathan. Hinduja Global Solutions Ltd. runs the group's information technology business. We have approached Goldman Sachs and expressed interest to buy Satyam Computer, Mr. Ramanathan said.
India Jan Gold Imports Plunge On Record High Prices
Gold imports in India, the world's largest consumer, continued their fall in January, plunging to 1-2 metric tons compared with 18 tons a year ago. Imports of the metal had plummeted in December too, to 3 tons.
Tata Motors Reports Net Loss as Vehicle Sales Slide in India
Tata Motors Ltd. swung to a loss in its fiscal third quarter amid declining auto sales and foreign-exchange losses. India's biggest auto maker by sales reported an unconsolidated net loss of 2.63 billion rupees ($53.8 million) for the quarter ended Dec. 31, compared with a net profit of 4.99 billion rupees a year earlier.
Suzlon Energy Reports Loss
Suzlon Energy Ltd. of India swung to net loss in its fiscal third quarter, hurt by rising costs and a provision to conduct repair work at the wind-turbine maker's overseas plants. Chairman and Managing Director Tulsi Tanti said the global credit crunch is likely to hit world markets.
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Posted: 16 years ago

Governance Issues Hit India's Property Firms

The once-hot Indian real-estate industry is suffering from a clampdown on lending by financial institutions that has hurt demand for apartment and commercial property. Moreover, in the wake of the familiar accounting scandal at giant outsourcer the company's founder admitted to inflating the books, creating a fictitious bank balance of more than $1 billion corporate governance has come into focus across Indian industry.

[Indian Property Stocks]
Real-estate companies in particular have been criticized by securities analysts for a lack of transparency in their property dealings and in how they account for projects. In a sign of the tough times, Rajiv Singh, vice chairman of DLF Ltd., India's biggest real-estate company by sales, warned at a news conference Monday that the company expects prices for new property to fall between 10% and 15% in the next three months, and said prices had already slumped 30%. He added that the company is in talks to replace loans totaling 40 billion rupees, or more than $800 million, with cheaper ones in a bid to cut its finance costs. DLF said its DLF Assets Ltd. unit is in talks to raise as much as 25 billion rupees by the end of March through a private placement. The present situation is very different from the boom that we had been seeing in the past few years,Mr. Singh said in a statement accompanying the earnings figures. The real-estate industry has moved from a period of abundant capital availability to times of liquidity crisis. On Saturday, DLF posted a 69% drop in net profit in the three months ended Dec. 31, to 6.71 billion rupees from 21.39 billion a year earlier. Revenue fell 62% to 13.67 billion rupees. On Monday, DLF's shares fell 14% to 153.20 rupees. So far this year, DLF's shares have fallen 46%, compared with a year-to-date drop of 6% in the benchmark Bombay Stock Exchange Sensex index.

Overall, India's property sector is under immense pressure because of the poor market conditions, said a report issued in December by Mumbai-based Kim Eng Securities India Ltd. With weakening property demand and a difficult business environment, we believe bankruptcy risk is rising for listed property companies, the report said.

As the industry struggles, analysts also are scrutinizing companies' accounting methods and transparency and, in many cases, finding them wanting. In its report, Kim Eng drew attention to accounting practices common in the sector that it describes as suspect. One such practice, which is permitted under Indian accounting standards, is that some of the cost of interest on land banks and unfinished projects can be accounted for along with the company's assets. That temporarily boosts earnings by reducing interest expenses and adds to book values, making it appear that the company's land holdings and unfinished projects are worth more. Later, the interest cost would be charged against profits and no longer counted with the company's assets, said Jigar Shah, head of research for Kim Eng in India, in a telephone interview.

Another area of concern is transparency. Credit Suisse, in a report issued Jan. 19, noted that the Singh family, which holds some key management positions at DLF and owns a large chunk of the company, has privately controlled entities from which DLF buys land. DLF has no transparency in the land acquisition process, Credit Suisse said. Credit Suisse said that, in general, there is a higher risk of corporate-governance issues when a deal is with a related party. Credit Suisse analysts said they believed DLF's disclosure of its land holdings in its annual report was inadequate. In an email, a DLF spokesman said DLF has never bought land from its main shareholding family or any of the family's companies. All related party transactions are disclosed completely, he said.

Edited by jagdu - 16 years ago
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Singh Leads DLF's Push to Expand Across India

Pia Singh leads Indian property giant DLF Ltd.'s entertainment venture, DT Cinemas, and the group's retail business. The entrepreneurial career of this Wharton business school graduate and daughter of DLF Chairman K.P. Singh wasn't something that came from inheritance but was instead the result of hard work. She has been active in the development of DLF's retail properties, particularly high-end malls and shopping centers, and the company's push to expand across India to cater to the country's emerging middle class. Ms. Singh, 38 years old, started her career in 1994 in the risk-underwriting department of GE Capital, the financing unit of General Electric Co., and became vice president of DLF in 1999, overseeing cinema and retail. Ms. Singh rose through the ranks to become chairwoman of DLF Retail Developers Ltd. The story of DT Cinemas began in 2000 when Ms. Singh identified growing customer demand and the lure of quality entertainment. Within a year, DT was up and running in New Delhi. The first DT Cinemas multiplex was built in DLF City Centre in Gurgaon in March 2003. Ms. Singh is also a film buff. She studied filmmaking at New York University and translated that interest into DLF's multiplex cinema business. Under Ms. Singh's leadership, some 12 million square feet of retail projects like downtown shopping districts, shopping centers and luxury malls are being planned across the country.

Our aim is to reinforce and strengthen DLF's national presence, she says. We work toward providing entertainment to people. I want to see DLF become a global player. The majority of India's population lives in abject poverty. Unless there is a sea change in the economic and social conditions, India cannot be truly called a great country, she says. Ms. Singh, a fashion plate who dresses in designer saris, says being the daughter of K.P. Singh helps her career, but her success has come from hard work establishing DT Cinemas and leading the group's retail outlets, which are attracting top brands from around the world

Chevron may exit Reliance Petro

Amidst waning refining margins and tumbling demand, US oil major Chevron Corp has plans to exit unprofitable ventures that may include its investment in Reliance Petroleum (RPL), a subsidiary of Mukesh Ambani-led Reliance Industries (RIL). Chevron has not yet signed a crude supply and product off-take agreement with RIL to take forward its plans to increase stake in RPL beyond the existing 5 per cent, said sources close to the development.

I-T slaps notices on Vedanta and Indian Rayon

After Vodafone, UK-based Vedanta Resources Plc and Aditya Birla group firm Indian Rayon also face a potential tax demand of around Rs 900 crore and Rs 45 crore, respectively, for their failure to deduct taxes on payments to buy Indian assets, said a senior government official. The Income Tax (I-T) department has issued the notices under Section 201 of the Income Tax Act, which deals with consequences of failure to deduct or pay.

BJP plank is 'Save India' as parties gear up for US-style ad campaigns

The BJP's poll mantra for the upcoming general elections will be 'Secure India'. The overarching campaign theme to take on rival Congress has been pitched to a handful of advertising companies that are in the race for the account. According to Prakash Javadekar, the BJP's national spokesperson, the search is still on for an agency to design the BJP's poll campaign. Three or four leading advertising agencies are pitching for our poll account. The selection process is still on. We have not taken any decision and a final call will be taken within two weeks, he added.

Indian exports more resilient than that of most Asian economies

Exports from India are expected to contract by a bleak 22% in January 2009. But compared with the performance of the Asian export powerhouses, the Indian numbers have held up much better. In absolute numbers, Indian exports in January contracted to $11.5 billion from $14.7 billion a year earlier, said commerce secretary GK Pillai on Tuesday. For 2009-10, total exports are expected to shrink by 5.88% to $160 billion, from the $170 billion likely to be achieved in 2008-09, due to the demand slowdown and recession in its major markets in the west.

One crore job cuts likely this fiscal

Ahead of general elections, massive job cuts in labour-intensive industries are giving UPA government the heebie-jeebies. Export for January have nosedived by 22% and projections indicate that upto one crore persons could lose jobs in the current fiscal ending March. The export sector data flowing in has increased pressure on the government which has been trying to spur domestic demand to offset decline in overseas orders ever since the global economic slowdown kicked in around September last year. Based on order books, industry inputs predicted a crore of job losses, an estimate that has worried the government.

Edited by jagdu - 16 years ago

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