Rupee roars to a 2 year high

Helped by an unabated flow of foreign funds and the central bank’s decision to remain on the sidelines as far as foreign currency rates are concerned, the rupee appreciated to an over-two-year high against the US dollar on Thursday. Interestingly, while a deputy governor of RBI has spoken about some measures to control the flow of capital, there has not been any direct intervention in the forex market yet by the central bank to tame the rise of the rupee. On Thursday, the rupee appreciated by 30 paise to close at 44.20 to a dollar, a level last seen in early-September 2008. Since September 1 this year, the rupee has now gained nearly Rs 3, or 6.1%, against the greenback. And if market players are to be believed, unless there is any central bank intervention, it could rise above the 44 mark over the next few weeks.
The strong inflow of foreign money into the stock market is the main reason for
this appreciation of the rupee. Net FII inflows so far this year has crossed $21 billion and given the demand for Indian stocks, it is set to rise further. The inflows have also taken the stock market to near its record highs.

World Hails Grand CWG Opening

India entered the world stage in style on Sunday night. As a brilliant display of colours, textures and sounds at the Games opening ceremony, which included thunderous drums, yoga poses, Bollywood songs and a tribute to Mahatma Gandhi, dazzled TV viewers around the world, the foreign media gave its judgment on the country: India has arrived, putting behind the event’s nightmarish runup plagued with problems. The opening ceremony made to the front page of newspapers across the Commonwealth nations and beyond, with most of them heaping lavish praise on the show. “India has arrived: spectacular ceremony opens Commonwealth Games,’’ read the Guardian’s headline. “At exactly two minutes past seven tonight, a huge inflatable blimp rose slowly and smoothly into the hot air above the stadium to the sound of hundreds of traditional drums, pipes and conch shells, and the cheers of 65,000 people,’’ the British newspaper said. Another British newspaper, The Daily Telegraph, marvelled at how smoothly the ceremony was conducted. “A dazzling, colourful, high-octane opening ceremony that was part Bollywood, part cultural extravaganza, did much to dispel the nightmares of the past fortnight, thrilling a sell-out crowd in the stadium as well as the athletes and officials from 71 Commonwealth nations,’’ the Telegraph said in its report. Even Australian newspapers, which have been very critical of the Games’ preparation, were quite liberal in praising the Delhi event. “Delhi’s Commonwealth Games has managed yet another surprise, with the opening ceremony defying expectations last night to start on time before going off without a hitch to delight a crowd of 50,000 with a rich and exciting pageant befitting a country as vast and populous as India,’’ the Sydney Morning Herald said, adding that “elaborate park-and-ride facilities put in place for the main stadium appeared to work well.’’ Another newspaper from Down Under, The Australian, not only awarded the “first unofficial gold medal of the Games’’ to India “for best team uniform” at the opening ceremony, it found the Delhi show to be better than China’s grand display at Beijing in 2008. “Indian Games officials should feel proud of the opening ceremony, classy and showy but somehow warmer and less contrived than the Beijing experience,’’ the Australian said. The newspaper lauded the “inclusive’’ nature of the show. On Monday, Pakistan’s Dawn newspaper ran a story on the “thunderous reception’’ given to the Pakistani contingent. While the New Zealand Herald of Wellington has called the opening ceremony “a deafening cacophony of noise and colour, a spine-tingling message to the 71 nations that make up the Commonwealth that Delhi was at last ready to make a decent fist as host nation’’, the Star of Johannesburg made a mention of jeers and cheers for Suresh Kalmadi, the head of the organizing committee. Though the Games are open only to former British colonies, it has generated interest in other major countries as well. On Monday, top American newspapers like New York Times and Washington Post too ran stories on the “wonderful’’ opening ceremony, with the Times saying that the Games are being “closely watched by economists and business executives around the world.’’

Navi Mumbai airport update

The Maharashtra state urban development department, City Industrial Development Corporation and Louis Berger, consultants for Navi Mumbai airport, have jointly worked out a formula to construct the international airport without diverting Gadhi river. Officials of Louis Berger and Cidco held a meeting on Monday in the office of urban development principal secretary T C Benjamin, to work out a formula to save the river. One of the main objections of the Union environment minister Jairam Ramesh was the diversion of the Gadhi river.
Cidco had already taken a decision to reduce the distance between the runways from 1.8 km to 1.5 km. “On Monday, we decided to line up the banks of Gadhi river instead of diverting it. The operation is known as channel trenching of the river. It is done to give right protection for banks. By trenching the river, diversion can be averted. At the same time, this will not affect the airport’s parking capacity, which will have 101 aircraft,” said Benjamin. In the last meeting of experts in the union ministry, the members were very keen that rivers should not be diverted at all.
The expert team of MOEF had also expressed willingness to visit the site. A senior official of the Union civil aviation department said the MoEF team was only objecting to the Cidco plan without checking the ground scene. The MoEF team will visit the site after mid-October.

Mahindra enters motorcycle market

Mahindra and Mahindra Ltd (M&M), India's largest utility vehicle maker by unit sales, on Thursday made its entry into the competitive motorcycle market by unveiling two models--the 106cc Stallio and the 300cc Mojo. Until now, the firm had products across the automotive sector except motorcycles. Some 7.4 million motorcyles were sold in the country in the year to March.

Vice-chairman Anand Mahindra said M&M saw two- wheelers as an “entry point for a customer to the Mahindra universe“. The entry-level Stallio, priced at `41,199 (ex-showroom, Pune), will compete with Hero Honda Motors Ltd's Splendor and Bajaj Auto Ltd's Discover, among others. The Mojo, aimed at the premium luxury segment, will cost `1.75 lakh, (ex-showroom, Pune). M&M has 370 sales outlets for two-wheelers, and is expected to increase the network to 400 by October.

The Stallio, for which film actor Aamir Khan is the brand ambassador, will be launched in the festive season beginning October. The Mojo is not yet ready for production. Both bikes will be made at M&M's plant in Pithampur, Madhya Pradesh, which has a capacity to turn out 500,000 bikes annually, said Anoop Mathur, president, Mahindra 2 Wheelers.

Food price inflation surges to 16.4%

India's annual food price inflation continued to quicken in mid-September, and analysts see another rate increase by the year-end as the central bank acts to stamp down persistently high inflation. Data released on Thursday showed the food price index in the week ended 18 September rise 16.44%, compared with 15.46% in the previous week, on higher prices of pulses, onions and vegetables.

It was the second straight rise under a new data series--with a different base year of 2004-05, new components and weightings--that was introduced in the week ended 4 September. The Reserve Bank of India (RBI) has said that emerging macroeconomic conditions, especially prices, would determine its future action, with five rate hikes since mid-March having brought monetary conditions close to normal.

RBI projects headline inflation to ease to 6% by March, when the current fiscal ends, from 8.5% in August, but noted in its September policy review that food prices continued to contribute to inflationary pressures. Food prices make up around 14% of the wholesale price index, the most widely watched gauge of prices in India. India's consumer price index rose 9.88% in August from a year earlier, slower than July's annual rise of 11.25%, government data showed on Thursday.

The consumer price index for industrial workers remained unchanged at 178 points in August.

Policymakers and analysts expect food prices to ease on good harvests, but recent heavy rains have disrupted supplies and pushed prices up.

The fuel price index rose 10.73%, slower than the week-ago's 11.48%. The primary articles index was up 18.31%, compared with 16.80% in the previous week.

Richie Rich in India

In spite of concerns over infrastructural bottlenecks notwithstanding, Indian business tycoons continue to build upon their sizeable cash piles, with a record 69 billionaires featuring in Forbes India’s Rich List for 2010. “Amid further disenchantment with national infrastructure undertakings, such as the botched preparation for the Commonwealth Games, Indian tycoons continue to flourish, sometimes off those same public projects,” Forbes said. Though the fortunes of both Mukesh Ambani and steel magnate Lakshmi Mittal have dipped in comparison to the previous year, they still retain the top two positions, with Mukesh Ambani holding on to his numero uno rank for the third straight year. Infotech tycoon Azim Premji has moved up to third place, displacing younger Ambani sibling Anil Ambani, who “despite making peace with his brother”, has dropped to the sixth position.

The Ayodhya verdict

Sixty years after Ram’s idols were forcibly installed under the central dome of the Babri Masjid, the Allahabad high court, in a judgment running into about 12,000 pages, paved the way on Thursday for the construction of a temple at that very spot which is believed by many Hindus to be his birthplace. While disposing of four title suits, the majority of the threejudge bench directed that the disputed site of 2.77 acres in Ayodhya be partitioned equally among three parties: Muslims, Hindus and Nirmohi Akhara (a Hindu group).
In deference to the widely-held belief about Ram’s birthplace, the court stipulated that the crucial area under the central dome of the mosque demolished by kar sevaks in 1992 be allotted to Hindus. This means the idols will remain where they are. In the course of the partition due to take place after three months, the court directed that Nirmohi Akhara be allotted parts of the outer courtyard covered earlier by Ram Chabootra, Sita Rasoi and Bhandar, which had long been used for worship by Hindus despite their proximity to the mosque.
Thus, the separate judgments delivered by Justice S U Khan and Justice Sudhir Agarwal, constituting the majority opinion of the bench, have in effect allotted twothirds of the disputed site to Hindus even as they opened up the possibility of the mosque being rebuilt on the remaining part.
The dissenting verdict given by Justice D V Sharma, however, rejected the claims of Muslims on the ground that Babri Masjid had been built against the tenets of Islam and therefore could not be treated as a mosque. Declaring that the entire premises belonged to Hindus, Sharma’s dissent held that the mosque had been built by Mughal emperor Babar after demolishing what was found by the Archaeological Survey of India to be a ‘‘massive Hindu religious structure’’.
Given the difficulty involved in carving out a one-third share for Muslims from the remaining parts of the disputed site, the majority verdict of Khan and Agarwal clarified that a part of the outer courtyard which was in the possession of Hindus could be given to Muslims. If that did not make up for the shortfall in the one-third share allotted to Muslims in the disputed site of 2.77 acres, the court envisaged the possibility of their being compensated with a portion of the adjoining 67.7 acres of land which had been acquired by the Centre in 1993 with the intention of providing access and facilities for both communities.
The court gave liberty to all the parties concerned to file suggestions within three months on the actual partition of the disputed site and directed that status quo be maintained during that period.Though the operative parts of their judgments are similar, Khan and Agarwal differed in the manner in which they arrived at their conclusions.