Can Budget 2011 strike a balance between supply and demand?

Its February again, time for the Union Budget! As per Article 112 of the Indian Constitution, the Union Budget of India, that is the annual budget of the country, is also known as the Annual Financial Statement. The budget is required to be approved and passed by the Parliament prior to its coming into existence on 1^st of April, which happens to be the beginning of India’s financial year. Like every other year, the Union Finance Minister of India, Mr. Pranab Mukherjee will present the budget for the year 2011, on the last working day of the month of February

Although, the crucial budget document is prepared in complete privacy, yet each one of us is definitely interested to get an overview about the whole process and have an idea of the India Budget Expectations 2011. Some of you might also have started anticipating India’s Budget Results, 2011; isn’t it? Can Budget 2011 strike a balance between supply and demand? Let’s see!

There could be several reasons and thought processes that goes beyond our expectations from the Union Budget for 2011! Economic growth and development has been noticed in various sectors following the many proposals and initiatives mentioned in the Union Budget of India in the financial year of 2010-11, for the year 2010. This year the budget expectations are quite high unlike few years back, wherein the country’s economy was still reeling under the economic depression that was created by the economic meltdown, globally. Since the Indian Economy is slowly getting back to its track, it can be expected that the budget will bring something beneficial to us. It is being expected that this time, the budget would lay stress on controlling price hikes, controlling the inflation rate, cutting down on fiscal deficit etc.

Straightening up of the PDS and do away with the outflows!

In order to achieve and all-round development of the country and its people, the government should ensure that everyone has access to the essential and the very fundamentals of life such as health, food, education, infrastructure, and security. This calls for the growth and development of the skills in the country. The government has taken up several measures on this front such as the formation of the National Skill Development Co-ordination Board, Skill Development Mission, and NREGA (National Rural Employment Guarantee Act); now the need however is to ensure the effective and proper realization of the plans. Social welfare must count as the first priority for the Government, always.

Inflation – An intense and a burning reality!

Inflation is everywhere! So it’s quite possible that we gate to see its mention in several policy decisions in order to initiate some corrective measures. It could be anything from the usage of sophisticated techniques of farming, to monetary policy or even the budgetary policies that are framed to control the augmented pricing pressures.

As the Government commits towards the controlling of food inflation, the Finance Minister of India might be expected to unleash some of the major measures in the Budget 2011. This might include the opening of distribution and procurement centers for food grains, promote more investment in agri infrastructure, increase the expenditure on irrigation to enhance the overall productivity of the farm sector.

Simplification and Systematization of the Tax System!

Pranab Mukherjee has really done a good job by extending the tax slabs. This has helped people, specially the salaried persons immensely. The high limit of tax-exemption also has brought extra tax revenues for the exchequer since it doesn’t encourage the suppressing of the unaccounted money. There is still a possibility of improvement at the lower end income group, on the present no-tax limit for up to income of Rs.1.6 lakh.

The deadlock on GST (Goods and Service Tax) should not be extended any further by the Government of India. The Government should rather take initiatives to introduce the new tax system from 1^st April, 2012. This would allow the current players to plan their ventures thereby including the cost of operation. It is highly recommended that the Government should cut down on CST that is the Central Sales Tax rate should be cut down to minimum 1% with effect from April 1, 2011.

Deregulation of the Fuel price!

Last year, the price of petrol was deregulated by the UPA government in order to shrink the fiscal deficit of the country, thereby helping the oil marketing companies to reduce their losses on the selling of fuel at subsidized rates.

Is the Government now thinking of deregulating the price of diesel now that constitutes a major share of fuel subsidy bills?

Retail FDI – Tighten Supply Chain!

The recent increase in the price of food has been the result of hoarding up of stock by the intermediaries or because of the supply shortage in the farm production. In order to manipulate the price, FDI can definitely support the government to de-bottleneck the chain of supply that is hindered by the not so effective distribution channel.

Focus on Infrastructure Growth!

A sustained infrastructural growth and development is essential in order to provide that momentum to India’s economic activities, thereby achieving optimum utilization of resources. In order to promote the joint ventures of the public and the private sector and the entry of FDI or Foreign Direct Investment into the infrastructural domain, an appropriate, genuine, organizational, and reliable model must be introduced. The Government should aim at increasing the Gross Domestic Product (GDP). It should take initiatives to plan and develop large amount of corpus for a long term towards the development of infrastructure by the use of debt funds.

Cut down on Excise and Service Tax!

Last year, the excise duty was raised to 10% by the Government, on the non-oil products for withdrawing stimulus, thereby creating sources for the funds that would cut down on the extensity of the fiscal deficit condition. Owing to inflation and rising cost of commodities, India should try and cut down on the Service tax and the excise duty. Corporate tax rates should also be brought down.

Education – Learn as you grow!

Education and Growth can be said to be the two sides of the same coin! While Education results in higher employment, this is turn paves the way for growth and development of the country. In the past few years, the education sector has witnessed several reform measures both at higher as well as primary level of education.

The implementation of the PPP model that is the public-private partnership model can prove very beneficial for the education sector and help in bringing success and sustainable momentum in the long run. The Government needs to fund the projects and encourage and trust the private sector for the final delivery of the models.

Agriculture!

For ensuring the economic growth and development of the country, it is important that India’s agriculture sector grows at a fast pace. Many people in the country still suffer from food insecurity and malnutrition. The Indian Government of India already undertook the National Food Security Mission (NFSM) in the year 2008 but it was not properly supported. The Government should now take the responsibility to support the mission properly for eradicating the malnutrition from the nation. One of the best possible ways would be to combine the mission with other flagship projects such as NREGA etc for reliving the underprivileged people in India, especially those in villages, from nutrition problems.

Since agriculture contributes immensely to the GDP of India, the Government, this year is expected to focus on the problem of rising prices. Higher should be the aim of the government. Favorable policies in the agro input sector, etc would surely help in utilizing the business potentials, in the future.

Indian Railways!

Couple of years back, India’s Railway Department had managed to bring around a good financial turnaround without any hike in the passenger fares. But this year, estimates say that the Indian Railways might miss out on the target for the year 2010-11. In the year 2010, Railways incurred a huge loss of Rs. 4000 crore. This was mainly because of the negative impacts on freight earnings and the setback on passenger earnings owing to the Naxal activities in several states of India.

The question that crops up in this situation is that will India’s Railway Department suffer a setback this time?

Information Technology!

The IT industry in India has shown amazing resilience during the period of recession.  The demand for the IT Services exports is being expected to go on with countries like Europe and US recovering and also due to the increase in discretionary that the consumers spend on IT infrastructure. As per the reports by NASSCOM, it is expected that the exports would dominate the IT industry in India that comes to about USD 59 billion out of USD 76 billion in the software industry.

However, there are certain concerns and fear as well for the IT sector such as slower recovery that the developed markets of US etc, high wage inflation and attrition, pricing pressure owing to competition in the domestic markets and protectionist stance on the part of the Government of US etc. With such a scenario in the backdrop the IT industry must be eagerly awaiting for the proposal in the budget, by the Government.

Construction!

Construction & Infrastructure contributes to about 8-10% in the GDP of India. For an overall development of the country, the importance and role of infrastructure is not unknown to us. However, a big gap has been created in the targets that have been set up for the infrastructure industry and the achievements. This has been due to the slow functioning of the several related sectors, shortfall in the awarding projects, funding potential shortfalls, time and cost overruns in the construction phase etc. Government should now start addressing these problems in the Construction and Infrastructure industry. This year, as per the signals from the Finance Minister, the infrastructure sector is expected to restrict itself from its expectations on tax relief and tax breaks, thereby focusing on how to raise capital and engage in project development.

FMCG!

The FMCG sector saw a series of new launches as well as acquisitions in the year 2010, which contributed phenomenally to the sector with a growth of about 15%. The GDP growth was estimated to be 8.75% in FY11. Hence the sector is expected to continue this way, although it will be faced with several challenges such as irregular monsoon and inflation. After the harvest of the Rabi crop, we can expect the situation to get reversed. With a shift in demand from need to want, it is being expected that the categories associated with home care and personal care would grow at a rate of 15% and 20% correspondingly, in CY11.

Telecom Services & Equipments!

At the moment, the telecom industry in India is characterized by high operating cost, stagnant revenue, huge debt, dwindling earnings, regulatory uncertainty etc. There has been a very slow revenue growth at about 0.4%. The launch of 3G and MNP might act as the immediate momentum. With key metrics declining at an abating rate, it is expected that the telecom sector would do better in FY12E in comparison to FY11E. Companies having foreign market exposure might experience higher growth. During FY12, while the telecom stocks may stay subdued, but at the end of FY12E we might witness the narrowing down of discounts in the broader markets.

Yet Another Petrol Price Hike for India!

States and Union Territories in India

 

Yet Another Petrol Price Hike for India! Once again the price of petrol has gone up! With the changing scenario, the Indian Economy is concentrating on new developments and evolutions for decontrolling the prices. There has been recent increase in the price of petrol. The news channels, newspapers, news portals, political parties are debating and discussing on the advantages and disadvantages of this price hike. There has been a shift from the democratic ideology, which was until now strongly influencing the policies of the Indian economic policies. So an important question that comes into picture is, has the definition of the ‘common people’ gone for a change or has common people gone more elite? Are common men prepared to face the decontrol or there is the need for India, to protect the people from freeing of prices?

In the war raged between inflation and the Indian Government, the former seemed to won on 15^th of January, 2011, as the price of petrol and fuel witnessed a rise. Following this, it has been decided by many oil companies in India, that the price of fuel would be increased by 2-4% since oil prices have soared up globally.

Although, the government of India is trying to battle out inflation in many sections, however, the state oil companies have decided to increase the price of petrol and aviation fuel by 4 and 2% respectively. Apart from this, the Aviation Turbine Fuel will also increase by about 2% that comes to Rs.48, 764 per kilolitre, since January 16^th 2011.

3 of the state oil companies, namely the Bharat Petroleum, Indian Oil and Hindustan Petroleum, will increase the petrol price from Rs.2.50 to Rs.2.54 per liter. The hike in price of petrol happened owing to the fact that the crude prices at the international level reached about the mark of $100 per barrel. This rose has been the highest in past 2 years.

Pranab Mukherjee, the Union Finance Minister stated on 15^th of January, 2011, that the state oil companies needed to increase the price of petrol owing to the rice of crude oil prices in the global market. To quote him-

“Petrol prices have been deregulated and it has been decided that when the prices of the petrol would increase in the international market, the oil companies would adjust the prices,”…..Now the price of petroleum crude has reached almost $90 per barrel (159 litres). So, prices have been increased (in India),”.

Just 2 days after the petrol price hike in India, Murli Deora, the Petroleum Minister said on January 17^th, that there was no other alternative but to go for the hike since the state oil companies were incurring huge losses.

If the price of petrol stands at Rs 58.90, the break up of cost as calculated by the Indian Government is as follows:

• Basic Price: Rs 28.93
• Education Tax: Rs 0.43
• Dealer commission: Rs 1.05
• Excise duty: Rs 14.35
• VAT: Rs 5.5
• Petrol Custom: Rs 1.54
• Crude Oil Custom duty: Rs 1.1
• Transportation Charge: Rs 6.00
• Total price: Rs 58.90

Political Parties and Leaders on Agitation: Will That Help?

In regard to the petrol and fuel price hike, India at present is witnessing agitation on the part of the Political Parties and Leaders. But will that help? The Left Front Parties said on 15^th of January, that if the United Progressive Alliance (UPA) government allows a hike in the price of petrol, they would protest against this, intensely.

Biman Bose, politburo member of the Communist Party of India-Marxist (CPI-M) even asked the citizens to raise a voice against this decision of the Government, which is anti-people. To quote Biman Bose-

“We hear prices of diesel will go up. The petro price increase will raise the transportation cost of essentials like foodgrains and vegetables, thus making them dearer,”.

Debabrata Biswas, the general secretary of All India Forward Bloc (AIFB) stated that that hike was the result of wrong policies on behalf of the UPA government. To quote Debabrata Biswas, in front of the media-

“With the government having decontrolled petrol prices, the price of fuels is increasing by leaps and bounds. We will definitely agitate against it,”.

Kshiti Goswami, Minister of state Public Works Department and also the Senior Revolutionary Socialist Party (RSP) leader was heard saying that the issue of hike in petrol price is definitely a reason for concern. To quote Kshiti Goswami

“We have been protesting against the escalating price of essentials for long. People’s miseries will only increase. All left parties will sit together and decide on the nature of our agitation,”.

All the opposition parties, from Bharatiya Janata Party (BJP) to the Left Front protested against the price hike. CPI-M, the Communist Party of India-Marxist referred to the decision of petrol price hike as a “cruel blow”.

To quote Prakash Karat, the CPI-M general secretary and politburo member

“They should immediately regulate the prices of petrol and diesel, reverse the policy of de-regulation because that is one of the prime reasons that is pushing up prices,”.

The Communist Party of India-Marxist (CPI-M) today termed the decision to increase the price of petrol as a “cruel blow”.

Shahnawaz Hussain, spokesperson of Bharatiya Janata Party (BJP) said that “No item of daily consumption – be it onions or tomatoes – is affordable today.”

Congress, heading the ruling UPA that is United Progressive Alliance government, too admitted that Government needs to take responsibility by stepping forward by limiting the price rise and lessening down the burden of the common citizen.

The Trinamool Congress and Nationalist Congress Party (NCP) New Delhi, said on January 17^th, that the ruling UPA (United Progressive Alliance) government should consult their allies before reaching any crucial decisions on the price hike.

D.P. Tripathi, NCP spokesperson, said to the media that “The allies should be consulted. There should be a coordination mechanism among alliance partners,”. He also stressed on the fact that allies must meet each other frequently that helps in dealing and sorting out different contentious issues, thereby ensuring better coordination. He said “The more you meet the better.” He added that special attention should be given to this issue, since the common man will be the one to face the daily problems.

The Trinamool Congress, another key ally, had also on Sunday expressed concern over the petrol price hike and complained that it was not consulted on the issue. The party had said that a meeting of allies should be held every three months to discuss the ideas of different political parties.

Sudip Bandopadhyay, MP of another important ally of the ruling party, Trinamool Congress commented that their party would protest against the price hike in petrol and the subsequent increase in prices of other items and commodities, in Kolkata and different parts of the state of West Bengal.

CITU also went for a 3 hour shutdown of transport from 12P.M to 3 P.M in the state of West Bengal.  This was held as a protest-against the rise in petrol prices.

Condemning the increase in petrol prices, J. Jayalalithaa, AIADMK chief said the increase in price happens to be one of the causes for inflation that the entire country is going through. To quote Jayalalithaa-

“In the last one month, petrol prices have been increased by Rs.2.55 per litre. The prices have gone up by Rs.15 per litre in the last one year.” “If the situation continues, people will have to travel on bullock carts and cycles. The central and the state governments are taking the country back to the stone age,”. She also added that the two-wheelers and auto rickshaw users along with the industries will suffer severely owing to this hike.

Is there Any Solution to This?

January 11, few days before the price hike in petrol, the Honorable Prime Minister of India, Dr. Manmohan Singh held a meeting with the senior ministers and officials, in order to check on the rising price of fuels that has resulted in the food inflation of India to soar by more than 18%. However, even after the meeting, no measures were declared.

To quote one of the officials present at the meeting-

“A host of issues were discussed. Some inputs have been sought. There will be another meeting in a day or two,”.

The meeting was attended by Finance Minister Pranab Mukherjee, Home Minister P. Chidambaram, Agriculture Minister Sharad Pawar, Cabinet Secretary K.M. Chandrasekhar and Planning Commission Deputy Chairman Montek Singh Ahluwalia.

Although the Central bank and the Government of India, have initiated many measures, to put a check on the inflation, yet the measures were of no use since the price of important items and commodities continued to rise without any indication to slip down. To add to the worries of the Government, Pakistan banned the export of onion through the land route.

According to the Federation of Indian Chambers of Commerce and Industry (FICCI), the monetary policies to control the inflation rate have failed to work. There has been mismanagement in the supply of food, which has resulted in the creation of a wide gap between retail prices and the farm gate.

According to Amit Mitra, a well-known business economist, the secretary general of industry lobby- “Food prices have once again gone up and this shows that monetary policy has become an ineffective tool for containing food inflation,”.

Who Are the Sufferers?

The decision by the Government of India, to increase the cost of fuel and petrol, will result in high inflation, badly and heavily affect the working class, thereby provoking unrest. The higher cost of cooking, lighting and high transport rates will affect millions of common people, immediately and immensely. Nor only this, the cost of other important commodities and products will also increase.  No matter how much the media debates and discusses, no matter how the political parties agitate, yet it will be the common man who will be the sufferers. The ultimate victim would surely be the citizens. On one hand as the rice in price of petrol and the associated products, made them costlier for the common people, thereby taking a heavy toll on their monthly budget, on the other, it sparked off several impacts on the daily life.

 

 

 

 

Indian Aviation Industry: How high is India flying?

Aviation Industry in India

The Indian Aviation Industry is among the world’s fastest growing industries. It has undergone huge transformation following the liberalization of the aviation industry in India. Once owned by the Government, the aviation sector of India is now privately owned with full service airways and affordable carriers. Almost 75% of the domestic aviation sector consists of the private airlines. Earlier viewed as a costly means of transportation, afforded by few, air travel is now cheap and can be availed by many.

Origin of Indian Aviation Sector

The origin of the Indian aviation industry dates back to 1912 when the 1st flight from Karachi to Delhi commenced in collaboration with the Indian State Air Services and Imperial Airways. However, the industry got its real start by JRD Tata through his launch of Tata Airline, in the year 1932. JRD Tata was the 1^st Indian, who got an A-Licence. In the year 1946, Tata Airlines was converted into Air India. Soon after the independence, India was having 9 airline companies providing passenger and cargo services. These airline companies were Tata Airlines, Air service of India, Deccan Airways, Indian National Airways, Ambica Airways, Orient Airways, Bharat Airways and Mistry Airways.

In the first half of 1948, a joint sector company was set up by the Indian Government, in collaboration with the Air India International Ltd and Air India. Through the Air Corporations Act, 1953, 9 airlines were nationalized. Indian Airlines Corporation (IAC) was set up for serving the domestic passengers while Air India International (AI) was set up to cater for the international passengers.

In 1990, open-sky policy was adopted by the government whereby air taxi- operators were allowed to operate their flights from any of the airports, decide their fares for cargo and passenger services and the flight schedules. In 1994, the monopoly enjoyed by AI and IA were stopped by the Government and private operators started providing air transport facilities and services. By the year 1995 many airlines have already started providing services, such as NEPC Airlines, East West Airlines, Jet Airways Sahara, Jagsons Airlines, ModiLuft Airlines, Continental Aviation, and Damania Airways.

Aviation Industry in India saw an important change in the year 2003, when budget flying was introduced by Air Deccan through the lowering down of fares to about 17% in comparison to what the other airlines charged. Air Deccan was joined in this process by Go Airways, Spice Jet, and Kingfisher Air. Thus new trends were introduced in the aviation market, by these budget airlines.

Growth of Indian Air Network

Continued growth has been shown by the aviation industry in India, in recent years. In the year 2008, it grew at a CAGR of about 18% that accounts for US$ 5.6. In August 2007, 3.67 million passengers availed the services of domestic airlines, which was about 26% more in comparison to the previous year. It is estimated by the Centre for Asia Pacific Aviation (CAPA) that the domestic traffic will grow up by almost 25% to 30% by the year 2010 while the international traffic is supposed to go up by 15%.  By 2010, 100 million passengers will avail the air network service in India. In the year 2010, an investment of US$ 9 billion has been incurred by the Aviation Ministry with the aim to modernize the existing airports.

In June, 2010, the market leader was the Jet Airways with a share of 26.5 %. Next in line is Kingfisher Airlines with 21%, and Air India with 16.9%. Hyderabad International Airport ranks among the top 5 as per the annual survey of the Airport Service Quality (ASQ) passengers. New airports and terminals are being developed. The economic slowdown witnessed by the aviation sector in 2008 owing to fall in number of passengers coupled with high fuel cost and severe competition from numerous other airlines, assumed a gradual growth from 2009. At present the growth rate of international and domestic travel has exceeded 25%, which is the world’s highest.

Recent Developments in Aviation Sector

• Modernization of the airports
• Growth and development in the MRO segment
• Policy on Airport security
• Policy on the merchant airports
• Augmentation of fleet
• Foreign equity involvement

Future of Indian Aviation Industry

The future aviation industry is estimated to grow at a rate of 25 % till the year 2010. Also, about 100 million passengers are expected to be handled by the airline industry, which is at present 34 million passengers. By the year 2020, about 280 million passengers are expected to be handled by the Ministry of Civil Aviation.

Problems Faced by Aviation Industry

Indian Airline Industry is beset with many problems, which consist of high price of aviation turbine fuel (ATF), scarcity of skilled labor, quick fleet expansion, rise in labor costs and price competition among the players. However, the major issue that poses a challenge for the airline industry in India is infrastructure limitation that requires to be rapidly upgraded.

Several steps have already been taken up. Many airports have been recently privatized. 2 greenfield airports will be set up at Bangalore and Hyderabad. Investments are being made in different department such as pilot training, aircraft maintenance, and air cargo services.

Role of Indian Aviation Industry in GDP

Aviation industry has played a phenomenal role in the Gross Domestic Product (GDP) of India. The GDP of India has increased over 8% following the growth of the Indian economy. With large number of domestic and international airlines operating in India, the country has become one of the most sought after location for commercial and trade activities.

Aviation Industry- Upcoming Challenges

With the growth and development, comes challenges and the aviation sector is no exception. The severe challenges posed against aviation industry are that the industry has to deal with safety concerns, decline in returns, stiff competition, rise in fuel cost, regional connectivity, improper exploitation of trunk routes, soaring input costs and many more.

Employment Opportunities in Indian Aviation Industry

The Indian aviation industry has a good scope for employment opportunities. With a requirement of large number of pilots, cabin crew members and many more, the industry seems to be prosperous one. The increase in airlines has generated great job opportunities, some of which are:

• Commercial pilot
• Air cargo pilot
• Co-pilot
• Cabin crew
• Cabin safety instructor
• Air traffic controller
• In-flight base managers
• In-flight managers
• Cabin services instructor
• Training instructor
• Cabin crew
• Maintenance controllers
• Aircraft maintenance engineering
• Cargo officers
• Quality control manager
• Guest service agent
• Ground staff

Aviation Institutes in India

• Ahemdabad Aviation & Aeronautics Ltd Aviation School

AAA Hangar, Old Terminal Airport,

Ahmedabad, – 380003, India

• Frankfinn Institute of Air Hostess

Best Buliding, ‘A’ Wing, 5th Floor,

S.V. Road, Opposite Andheri Railway Station, Andheri(W)

Mumbai 400058

Tel No.: 022-26706039/40/41

• Indian Aviation Academy

7/8 Rushabh Complex, Opp. Fun Republic Cinema,

Off New Link Road, Oshiwara, Andheri (W)

Mumbai 400053

Tel.: 26740041/26749058

• International Airlines Academy

4-H, Mount Chambers, 758 Mount Road,

Opp. TVS, Chennai-2 (T.N.)

• Air hostess academy

AHA HOUSE

A-5, Kailash Colony, New Delhi -110048

Tel : 011-46566835 – 43, 46566848

• Indian Institute of Aeronautics

Delhi

• Bharat Institute of Aeronautics

Patna

• Indian Institute of Aeronautics Science

Jamshedpur

• Indian Institute of Aeronautical Science

Kolkata

• Avalon Aviation Academy

Aptech House

• Aero-Sports

Opposite Devamatha Church, Shoranur Road

Thrissur – 680022

Phone- 0487-3252449

• American Flyers (India) Pvt.Ltd

37, Virwani Industrial Estate, Western Express Highway,

Gurgaon – 400063

Phone- 022-28748042

• Amritsar Aviation Club

Raja Sansi Airport

Civil Aerodrome, Amritsar

Phone- 0183-2214044

 

 

 

 

 

 

Indian Economy Growth, 2010

Map of Economic Growth in India

The Indian Economy is the 11th largest in the entire world by “nominal GDP” and 4th largest by “purchasing power parity”. India’s varied economy is an assortment of agriculture, village farming, large number of industries, handicrafts and huge number of services.

Since 1990s, India began experiencing fast economic growth as a result of markets being opened up for global investments and competition. In the twenty first century, India is emerging as one of the economic powers with huge natural and human resources at its service. By the year 2008, India was successful in establishing itself as the “second fastest growing economy” of the world. The year 2009, however, saw a considerable slowdown in the growth rate of India’s GDP following the major recession and financial crisis in 2008 that affected the whole world terribly.

With the intention to maintain the economic growth at the time of recession, the Federal Authorities in India undertook diverse stimulus packages to increase the growth of the Indian Economy. The Indian Government raised the finance for the stimulas package by $100 billion. Presently, the central government is helping the states of India to meet the fiscal consolidation by improving the tax policies and administration, expenditure rationalization, budget management, financial management etc. Moreover to endow the country with sustainable and long term infrastructural growth, the government of India established the “India Infrastructure Finance Company Limited. As a result of this the disbursement is expected to touch Rs. 9,000 crores by the month of March, 2010.

According to the Central Statistical Organization, the GDP of the Indian Economy, 2010 is estimated to grow at the rate of 7.2%, while the service and industrial sectors are expected to grow by 8.7 and 8.2% respectively. India’s GDP grew by 6% in the later half of 2009, in comparison to the previous year. In the 3rd quarter of the year 2009-2010, economic activities like mining and quarrying grew by 9.6%, manufacturing by 14.3%, construction by 8.7%, trade, transport, hotels and communication at a rate of 10%, and finance, real estate, business services and insurance by 7.8%.

As per the “global competitiveness index” created by the “World Economic Forum”, India ranks forty nine among 133 nations in the years 2009-2010. This is due to the performance of India in various categories. These are exports, logistics, foreign tourist arrivals, telephone subscribers in the country, mutual funds, BPO sector, automobiles, gems and jewelry, tax, Indian drug market etc.

It is believed that the Indian Economy growth, 2010, will increase by 8.5% and by 10% in 2011-12. Agriculture is expected to contribute above 17.6% to the economy of India in the coming years. The predictions of the economists states that by the year 2020, India will emerge as one of the leading world economies.

Textile Industry in India

Map of Major Textile Centers

The textile industry in India is the largest provider of employment after agriculture. This industry is one of the earliest industries of India to come into being; it is presently the second biggest industry in the world after China. Over the years, this industry has proved to be the provider of the basic requirements of the people.

The industry holds a vital place in the Indian economy as it makes a contribution of 14 % to the industrial production of the country and at the same time sums up 4% of the total GDP of India. Along with contributing to the Indian economic scenario in terms of employment, involvement in the industrial production, foreign revenues the textile industry of India also contributes to the global textile economy. It contributes to the global textile fiber and yarn production.

This independent industry comprise of various segments that include Cotton Textiles that encompass Handlooms, Silk Textiles, Handicrafts, Man-made Textiles, Coir and Jute and Readymade Garments.

Over 30% of the textile production of India is exported to the foreign market. USA, UK, Spain, Italy and Portugal are some of the prominent markets of exports of Indian textile production. Some of the close competitors of the Indian textile industry are Bangladesh, Cambodia, Vietnam and Sri Lanka.

It is expected that the economy of the textile industry in India will grow to $ 85 billion by the year 2010 and will reach the export value of $ 40 billion. It also has been estimated that this industry will create 12 million jobs in the country coupled with an increase in the world share by 6 %.

Some of the most important textile centers of India are located in the states of West Bengal, Maharastra, Uttar Pradesh, Gujarat and Tamil Nadu. Solapur, Pune, Nagpur and Amravati are some major centers for the cotton textile production. While the bulk of cotton textile production in Gujarat comes from Surat, Ahmedabad, Bhavnagar and Bharuch, the important centers in West Bengal are Kolkata, Serampur, Howrah and Murshidabad.

West Bengal and Orissa are leading jute textile generation centers. On the other hand, Karnataka is the leading producer of silk textile. Some producer of woolen textile and carpet are Punjab, Himachal Pradesh and Uttar Pradesh and Jammu & Kashmir respectively.

Stock Exchanges in India

Stock Exchanges in India Map

Stock Exchanges in India are structured market which can be a conglomerate or ajoint firm, where associates of the firm congregate to buy and sell company’s stocks and other bonds. The associates can function either as intermediaries for their customers or as primary operators of their individual accounts.

India Stock exchanges smooth the progress of any issue of bonds and release of securities or any other fiscal instruments incorporating the imbursement of earnings and surplus. Documentation or record keeping is the focus but commerce is indirectly associated with such corporeal place because advanced markets are generally automated. The buying and selling on exchange is only by its associates and stock brokers.

In 1860, the India stock exchange grew with only 60 brokers and as a matter of fact ‘Share Mania’ was initiated in India after the onset of American Civil War. After the end of the end of civil war, the exchange market discovered a place in Dalal Street following which Native Share and Stock Brokers’ Association was initiated in 1887. It was in 1895 that the association finally attained a premise in the Dalal Street. Slowly and steadily the stock brokers increased from 60 to 250.

In total there are 32 stock exchanges in India. Some of them are located in major cities like Chennai, Ahmedabad, Delhi, Bangalore, Kolkata, Mangalore, Ludhiana, Guwahati, Bhubaneshwar, Vadodara, Saurashtra Kutch, etc., among which Mumbai/ Bombay stock exchange is the oldest in India. Initiated in 1875, Bombay stock exchange has more than 6,000 stocks scheduled under it. National Stock Exchange (NSE) which is also India’s premiere stock exchange is located in India’s commercial capital – Mumbai. Besides BSE and NSE, India also hosts Over the Counter Exchange of India (OTCEI) which permits its traders to buy the stocks of small and medium sized firms listed under it.

Indian Stock Markets offers various prospects to Foreign Investors through the route of Foreign Direct investment. Recently, Indian government has allowed a majority of stake for international investors in Indian market, excluding few industries. In certain sectors they can even acquire 100% stake. The governing authority which supervises the operations of stock exchanges is the Securities and Exchange Board of India (SEBI) situated in Bombay. Foreign Institutional Investors (FII) can function in Indian stock exchanges after their registration with the Reserve Bank of India (RBI) and SEBI.

At present all India Stock Exchanges are equipped with advanced machinery and follows competent and transparent trading system.

Future of Textile Industry in India

Future of Textile Industry in India

The textile industry in India is one of the flourishing sectors of Indian economy. It contributes more than 13% to industrial output, 16.63% to export revenues and 4% to the nation’s GDP. In the year 2010, the industry is estimated to produce 12 million jobs with an investment of US$ 6 billion in the fields of textiles equipments and structure, and garment manufacturing by the end of 2015.

Union Ministry of Textiles certified Apparel Export Promotion Council (AEPC) has taken the responsibility to  motivate the foreign investors to invest in Indian Textile industry by exhibiting it massive unexplored domestic market. It has also formulated and endorsed the motto of “come, invest, produce and sell in India”. Under this the ministry has decided to send it representatives to Germany, Switzerland, France, Italy and US. The objective is to trigger the foreign investment towards instituting textile units in India by offering numerous allowances to global investor like low-priced workforce and intellectual right fortification.

The government of India has also taken few initiatives to promote the textile industry by permitting 100% Foreign Direct Investment in the market. Owing to the upright and straight incorporated textiles price chain, the Indian textile industry symbolizes a strong existence in the complete value chain from raw commodities to finished products. The Synthetic and Rayon Textile Export Promotion Council (SRTEPC) has taken all the required steps to meet the target of doubling the synthetic textile exports in India to US$ 6.2 billion by seizing 4% of market share by FY 2011-12.

India Infoline suggests traders to opt for DLF stocks

According to the report carried out by India Infoline, DLF will be heading towards unremitting heights in the future weeks due to the major fallout in its downward facing market trend since January 2010.  Keeping the ongoing trend in consideration, Infoline has suggested the traders to purchase DLF for the mark of Rs 335 to benefit most from the trend. For high risk buyers, they have suggested stock ranging between Rs 315-319 with an impeding loss of Rs 309.

A comprehensive investigation of the regular stock exchange chart reveals that the DLF stock has declined from the towering point of Rs392 in January 2010 to reach the low of Rs282 in the previous week. Last Friday the DLF stock displayed a well turned-out getaway after the downward facing trend indicator.

According to the market analysts this bullish getaway indicates the termination of the transitional downtrend. The other industrial oscillators which assisted the trend were extensively positive in nature and the upward movement may continue to the heights of Rs 338 and Rs 345.

Indian Economy and Business – Performance Review 2009

2009 has been a fantastic year for India. Indian Business has maintained positive growth during 2009.  It has been an year where India had tried to come out of the shadow of global  business gloom. World’s  top industrial nations were struggling to come out of the recession. But the focus of India on domestic growth and strong financial/banking system paved the way for the economy maintaining a strong growth even during the troubled times.

India’s Top business news for 2009

The list of major Indian business news  in 2009 is as follows:

1. 15-year low IIP – As per the Index of Industrial Production (IIP), India’s factory output has condensed to a record 15-year low of 1.2% in February 2009 on a Y-o-Y basis as against 9.5% growth in February 2008.

2. Launch of the much-awaited cheapest car of the world by Tata Motors – the ‘Nano’ – March 23, 2009, was that eagerly awaited day when the curtain was actually raised from the cheapest small car in the world – the Nano by Tata Motors.

3. Mahindra takes over Satyam – Tech Mahindra Ltd. has placed the highest bid for acquiring the scandalous Satyam Computer Services Ltd on 13th April, just after four months of the financial scam being detected.

4. India’s inflation hits negative mark – The Indian economy experienced a negative inflation (deflation), touching a minus 1.61% for the week ended June 6, 2009.

5. India to have Mobile Number Portability – Mobile Number Portability, a step to allow consumers change their mobile operator without giving up the phone number is possible to be implemented in 2010, which was slated to be introduced this year.

6. Reliance gas deal dispute takes Ambani brothers to court – The Reliance gas dispute took the Ambani brothers to court again in July this year.

7. Gold prices hits massive highs – Due to the global commodities market trends, the gold prices surged to set a new high of Rs 17,999 per 10 gram for the last week in November.

8. Wipro second time in WB – After Tata going out of West Bengal, it was turn for Wipro to take another chance and re-enter West Bengal by accepting the land offer by the WB Government in December this year.

9. Reliance Industries becomes top wealth creator again – Mukesh Ambani-led has become India’s largest wealth creator for third consecutive time by generating a wealth of Rs. 1,51,400 crore.

10. Jindal Power plans second biggest IPO – The second biggest initial public offer is on its way planned by the Naveen Jindal-promoted Jindal Power Ltd for raising around Rs 10,000 crore in this financial year.

Get to see all the business news for the year 2009 from Business.mapsofindia.com

Food Infation in India on the Rise

Food inflation is hitting India. Basic food product prices have increased many fold due to bad monsoon and also due to bad management of export of food products. prices of basic food items like potatoes and pulses have increased many fold and is showing no downward trend.

Indian Economy is expected to grow by 7% during the current year.  To maintain the growth at a higher level government surely need to contain inflation.

The inflation in food items has climbed to 19.05 percent for the week ending 26th November 2009. It was only 10.48% during the previous year.