BJP Govt's 4 years in Karnataka

BrahMos 2

The first prototype of the hypersonic BrahMos 2 cruise missile being jointly developed by Russia and India will be ready for flight testing in 2017, an official said. 
Russia and India have recently agreed to develop hypersonic BrahMos 2 missile capable of flying at speeds of Mach 5-Mach 7. 
The new missile would be made in three variants ground-launched, airborne, and sea-launched. 
The new missiles would be supplied only to India and Russia, without being exported to other countries. 
Established in 1998, BrahMos Aerospace Ltd, a Russian-Indian joint venture, currently manufactures BrahMos supersonic cruise missiles based on the Russian-designed NPO Mashinostroyenie 3M55 Yakhont (SS-N-26). 
The BrahMos missile 
has a range of 290km and can carry a conventional warhead of up to 300kg. It can effectively engage targets from an altitude as low as 10 metres and has a top speed of Mach 2.8, which is about three times faster than the US-made subsonic Tomahawk cruise missile. 
Sea and groundlaunched versions have been successfully tested and put into service with the Army and the Navy. 
The flight tests of the airborne version will be completed by the end of 2012. 

GST rollout snippets

With Prime Minister Manmohan Singh signalling a new urgency to fix the economy, the government sounded out Bihar deputy CM Sushil Modi over measures that could erase the Centre-states trust deficit stalling rollout of a goods and services tax. 
The bustle in government is evident with deputy chairperson of Planning Commission Montek Singh Ahluwalia having a quick word with Modi, who heads the empowered committee of state finance ministers on GST, to explore measures that can get the proposal moving. 

Modi is understood to have pointed out that a constitution amendment bill essential to facilitating the GST rollout has been in Parliament since March 2011 and is now under consideration of the standing committee on finance. Passage of the bill in the monsoon session will be a significant step forward. The Bihar leader also suggested that a clause in the proposed GST council that would give state finance ministers a say in the compensation formula for loss of revenue due to reduced central sales tax will go a long way in reassuring the states that their interests will be protected. 

Ahluwalia expressed keenness to move on GST and assured that the empowered committee’s views will be conveyed to the PM soon, indicating that the government may be ready to reach out to BJP on the long-pending major tax reform. States are awaiting details of the CST compensation former finance minister Pra
nab Mukherjee signed off on his last day at work before he quit to file his nomination for the presidential election. The Centre and states are locked in a dispute over the quantum of compensation. No compensation has been given to the states after 2009-10. 
States not only have their pending demands but are also worried that compensation amounts could be reduced or stopped in future, leaving them to foot a loss of revenue. Finance ministry statements that states cannot be “endlessly compensated” and assertions that no further transfers are possible till GST is rolled out have only made states more suspicious. Modi recently told finance standing committee that the Centre needs to work hard to wipe out trust deficit 
and take the states on board. He reminded the committee that reform aimed at phasing out taxes like octroi and CST and integrating the states’ economies needed the approval of 50% of state assemblies.

US court lets off Union Carbide

In a setback to 1984 Bhopal gas tragedy victims, a US court has held that neither Union Carbide nor its former chairman Warren Anderson were liable for environmental remediation or pollution-related claims at the firm’s former chemical plant in Bhopal. 
US district judge John Keena in Manhattan dismissed a lawsuit accusing the company of causing soil and water pollution around the Bhopal plant due to the disaster, and ruled that Union Carbide Corporation (UCC) and Anderson were not liable for remediation or pollution-related claims. 

The court ruled that it was Union Carbide India Ltd, and not its parent company UCC that was responsible for the generation and disposal of the waste that polluted drinking water, and the liability rests with the state government. 

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Pathribal encounter

A court in Srinagar gave the Army the go ahead to try six of its men, five of them officers, for allegedly killing five innocent people in a staged encounter and dubbing them killers of 35 Sikhs in a massacre in South Kashmir’s Chittisinghpora village in March 2000. 
Srinagar’s chief judicial magistrate Rajeev Gupta issued the order, allowing the Army to try the accused in an Army court.  
The five civilians, Juma Khan (53), Bashir Ahmad Bhat (26), Juma Khan (38), Mohammad Yousuf Malik (38) and Zahoor Ahmad Dalal were picked up, shot dead, and burnt beyond recognition in the alleged staged encounter in Pathribal. They were later dubbed foreign terrorists responsible for the Chhittisinghpora massacre on the eve of US president Bill Clin
ton’s visit to India in March 2000. All five were buried in an unmarked grave in a forested area in South Kashmir. 
Brig Ajay Saxena, Lt Col Brajendra Pratap Singh, Major Sourabh Sharma, Major Amit Saxena and Subedar Idrees Khan, were charged after the CBI concluded in its probe that they had killed the five civilians days after the massacre. 
The CBI had chargesheeted the Army men in a designated CBI court in Srinagar a few years back. Their trial could not begin due to the blanket immunity they enjoy under the Armed Forces Special Powers Act. But the Army was forced to act after the Supreme Court order on May 1 gave it eight weeks to decide whether to try the accused in a military court or civil court. 
The Army had this week applied for allowing it to try the accused officers in the Army court in the wake of the SC directive. The ruling had disappointed rights groups fighting to have the soldiers tried in a criminal court. Army in Srinagar chose to stay silent.

Somewhere in Noida....

A speeding truck hit two elephants in Noida , killing a 45-year-old female elephant and seriously injuring another. Both elephants were left unattended on the road for nearly four hours causing a huge traffic gridlock. Two mahouts riding the elephants were also injured. 
 Roopkali died on the spot, while Chanchal is in a state of shock. 

Chocolate consumption surges

Chocolate consumption in India has nearly trebled since 2005 — thereason why leading chocolate companies are investing in bringing premium brands such as Toblerone. 
Cadbury India, which has been on an overdrive to promote its premium 
brands such as Cadbury Dairy Milk Silk and Bournville, is now rolling out Toblerone from parent Kraft Foods’ stable. Toblerone, which is present in certain pockets of the grey market, would now be imported by Cadbury India to compete with the likes of Ferrero Rocher, Hershey’s and Lindt.  
The sudden rise in chocolate consumption in India is on account of several reasons. 
Although chocolates are items of impulse purchase, competing with categories like soft drinks, snacks and beverages for a share of the consumer’s wallet, modern trade appears to be driving consumption in such categories. 
The per-capita consumption of chocolates in India has increased from 40gm per person per year in 2005 to 110-120gm. While this is a significant jump in consumption, it is still very nascent, leaving enough room for growth. 

An analysis by The Boston Consulting Group on how a billion-plus people consume suggests that food is the largest consumption category in India, in which a trading-up tendency increases with rising income levels. 
Chocolates form a Rs 3,200-crore category, where Cadbury India has a 70% share, while around 20% is held by Nestle In
dia. Modern trade constitutes about 10% of the overall chocolate category, or roughly Rs 320 crore, according to Nielsen. 
Of this, brand Cadbury Dairy Milk has a share of 35%, while Bournville and Silk together account for 18%. 

Current account deficit peaks

The country’s current account deficit—the net shortfall arising out of trade and capital flows—touched an alltime high of $21.7 billion or 4.5% of gross domestic product for the quarter ended March 2012. 
The deficit worsened because exports did not grow with global demand remaining soft owing to the European crisis. At the same time imports continued to rule high because of demand for oil and gold in 2011-12. Data released by RBI shows that remittances from export of software and from non-resident Indians continued to remain strong but were not enough to make up for the shortfall arising out of merchandise trade. The deficit numbers were much higher than what was expected by those in financial circles. A Bloomberg News survey was for a deficit of $19.56 billion in 
the first quarter of 2012. 
Import of bullion has fallen sharply after the gov
ernment doubled customs duty on gold being brought into the country. 
Foreign direct investment also slowed sharply to $1.4 billion from $5 billion in the preceding quarter. Overall, the balance of payment continued to remain in deficit of $5.7 billion which is significantly lower than the $12.8 billion BoP deficit in the quarter ended December 2011.


Bharat Broadband Network

To provide broadband connectivity at the gram panchayat level, the government has decided to set up a national optical fibre network (NOFN).
Bharat Broadband Network (BBNL), a firm created specifically for implementing this project, will lay close to 5 lakh km of cable and connect 2,50,000 gram panchayats at a cost of Rs 20,000 crore.
An essential part of the government’s e-governance initiative, it is believed the fibre network would provide economic benefits such as additional employment and help deliver initiatives such as e-health, e-banking and e-education.
However, the lack of a proper plan to utilise the network is evident. To ensure proper utilisation, the government has setup a coordination committee consisting of secretaries of various departments such as telecom, IT, panchayati raj and others.
Telecom secretary R Chandrashekhar specified 2014 as the deadline for completion of the project at the recently concluded World Education Summit, held in New Delhi.
The massive project has the private industry eager to participate.

The PM is now the FM too

Prime Minister Manmohan Singh has set himself the task of reviving the animal spirits of businessmen, attracting capital flows to prop up the rupee, revisiting aggressive tax enforcement, and turning around the fortunes of the mutual fund and insurance sectors as he attempts to put the economy back on the rails.
Singh, who has taken charge of the finance portfolio after Pranab Mukherjee resigned to contest the presidential elections, said “problems on tax front” had contributed to the sharp dip in sentiments, an apparent reference to the tax travails of Vodafone Plc and aggressive anti-avoidance measures aimed at foreign investors. 
The finance ministry under Mukherjee faced widespread criticism from foreign governments and overseas business lobbies after it changed the laws to retrospectively tax global deals involving Indian assets, an action widely seen as targeted at Vodafone. 
An attempt to introduce a law tar
geted at tax avoidance, known as the General Anti-Avoidance Rules, the implementation of which has been postponed, had also rattled overseas investors in stocks and bonds. Further, many Indian businesses and local units of MNCs have complained about aggressive application of transfer pricing rules. 
“On the external front, I am con
cerned about the way the exchange rate is going. Investor sentiment is down and capital flows are drying up,” the PM said, indicating initiatives to attract overseas capital were on the cards. 
Singh also asked the finance ministry mandarins to look into the problems of the mutual fund industry, seemingly a reference to the sharp slowdown in inflows into mutual funds after market regulator Sebi banned the payment of commissions to distributors.
While most experts believe that the Sebi decision is conceptually correct, the ban is seen as one of the factors contributing to a 1.6% dip in assets managed by fund houses. The prime minister, who also referred to the insurance sector, did not get into specifics on mutual funds and it is not clear if a reversal of the Sebi decision, taken during the tenure of previous Sebi chairman CB Bhave, would be considered by policymakers. 
According to an official, in the near term, the quickest way to revive the MF industry could be to extend tax concessions to investments in equity mutual funds too. 
The Rajiv Gandhi Equity Saving Scheme introduced in the budget this year provides tax breaks to first-time investors in equities. 
Sebi has already recommended this to the finance ministry, which is yet to take a view on it. 
The new dispensation will also focus on cutting subsidies and reviving investments in infrastructure and manufacturing, say officials familiar with the prime minister’s agenda. 
Reforms on the anvil include charging more from commercial and bulk 
users of diesel and restricting the subsidy on cooking gas to four to six cylinders per household. 
Not all populist measures will be junked. The food security bill, which seeks to give right to food for large sections of the population and strongly favoured by Congress President Sonia Gandhi, is also likely to be given final shape over the next few weeks. 
Infrastructure growth and investments in manufacturing are other key areas on Singh’s radar.

THE PM'S CORE TEAM While the PM himself will drive the economic agenda and coordinate with his cabinet colleagues, the bureaucracy will be spearheaded by his principle secretary Pulok Chatterji, who will be aided by his batchmate and Cabinet Secretary Ajit Seth. 
A long-time colleague and advisor, C Rangarajan, who heads the PM’s Economic Advisory Council and enjoys cabinet rank, could be coopted into various cabinet committees to enable effective coordination between the PMO and finance ministry.
Planning Commission Deputy Chairman Montek Singh Ahluwalia, who holds the rank of a cabinet minister and is a key aide of Singh, is a regular at cabinet meetings. 
The PM spent most of Wednesday in meetings with his core team. 
The core team, with distinct job responsibilities for key officials, will include Rangarajan, Ahluwalia and four secretaries — revenue, department of economic affairs, banking and expenditure — in the finance ministry.

Somewhere in Chennai....

An MTC bus ploughed through a parapet of the Gemini flyover and hung precariously for a moment before toppling over and landing on its side on the road below. Luckily there were no deaths.

Somewhere in Bangalore....

The green line Metro train – the project’s north-south corridor – kicked off with trial runs in Peenya depot. Once commissioned, it will connect Peenya to Malleswaram. Reach 1 from MG Road to Baiyappanahalli is the purple line.

Somewhere in Assam....

Flood-hit residents being evacuated in Guwahati after Assam’s flood scenario worsened .Ten more people have been washed away and thousands rendered homeless across the state, where Majuli, the world’s biggest inhabited river island, is facing the threat of complete submergence.

Bonanza for Bihar

Days after he broke away from the NDA over choice of the presidential poll nominee, Bihar CM Nitish Kumar managed to extract a Rs 20,000-crore special assistance package for his state from the UPA in the 12th Five Year (2012-17) Plan. 
The backward state will get Rs 4,000 crore every year as central package, promised at the time of its separation from Jharkhand. Bihar was denied the special category status as it did not satisfy the necessary parameters. Kumar convinced the Planning Commission to set up an airport at Nalanda, the CM’s constituency where land is available with the Airport Authority of India. Soon, Patna too will get a Delhi-like metro rail network. 
Bihar’s bonanza was revealed at a meeting with the deputy chairman of the Planning Commission, Montek Singh Ahluwalia. An annual plan of Rs 28,000 crore 
was finalized for Bihar for 2012-13, a 30.9% increase in the annual plan outlay over the last fiscal. 
Kumar met Ahluwalia and the chairman of the PM’s economic advisory council, C Rangarajan — at a dinner hosted by JD(U) MP N K Singh on Wednesday — in what can be seen as the beginning of a new partnership between the UPA and JD (U). The bonhomie comes 
close on the heels of Kumar’s support for the Congress’s presidential nominee Pranab Mukherjee. 
Ahluwalia assured Kumar that the ongoing special assistance package for the state will continue in the 12th plan.  
He announced that the Planning Commission ac
cepts Kumar’s long-pending demand for flexibility in execution of centrally-sponsored programmes.
The Bihar CM told the Plan panel that the state will target a growth rate of 13% in the next plan, including 7% in agriculture, for which it has a roadmap. 
The Plan panel was informed that the projected outlay for the 11th Plan (2007-12) was Rs 76,481.77 crore (at 2006-07 prices). Total provisional expenditure in the 11th Plan is about 99.42% and actual expenditure during the first four years is about 72%. Total outlay for the 12th Plan has been projected at Rs 2,69,458.5 crore—up 352.32%. 
Kumar said a major chunk — around 37.78% of the total proposed annual outlay for 2012-13 and 35.23% of the total proposed outlay for the 12th Plan — was earmarked for the social sector, primarily education, health, water supply and sanitation. 


Municipal polls in UP

Five municipal corporations of Uttar Pradesh including Agra in the west to Bareilly and Kanpur in the central to Allahabad and Gorakhpur in the east UP will go to poll on Wednesday. Apart from these districts, voting would also be held in 12 other districts, which include Baghpat, Rampur and Azamgarh. 
Wednesday promises to be a keen contest between Bharatiya Janata Party and the Congress, which occupied three and two mayoral seats in these corporations. While BJP candidates clinched the mayoral seats of Agra, Kanpur and Gorakhpur, Congress emerged victorious in Bareilly and Allahabad.

Investment Tracking System

The finance ministry announced the setting up of an Investment Tracking System for all major projects in the private sector and those under the public private partnership (PPP) worth Rs. 1,000 crore and above. 
The promoters of these projects have been directed to feed regular updates to the ministry’s monitoring cell on the status of their projects and provide reasons if there was any delay in their implementation. 
The monitoring cell has been set up in the department of financial services in the ministry, which will coordinate with the promoters on all implementation issues. 
The ministry released a format for monitoring such projects and pro
moters have been asked to update the information online. The government has now made it mandatory for promoters to provide details of their projects along with reasons behind delay to the monitoring cell on a monthly basis. The initiative has been taken in view of tardy progress of major infrastructure projects. The government has set up a proposed target of $1 trillion worth of investment in the infrastructure sector during the 12th Plan period between 2012-17, a majority of them in the private sector and under the PPP mode. 
For the current fiscal, the Prime Minister had said the 
government targets at least Rs. 2 lakh crore of investments in the core sector. Projects have been delayed for various reasons, including land acquisition problems faced by private sector companies and fuel supplies bottlenecks.

Virbhadra Singh resigns

Union minister Virbhadra Singh resigned, a day after a Himachal Pradesh court slapped corruption charges on him. 
Singh’s resignation came just when the Congress was gearing up for elections in his BJP-ruled home state, a mustwin battle for the party to regain momentum after its hopes were punctured by the recent decimation in five states, including UP. 
After tendering his resignation to the PM, Singh said he was innocent and the charges in the 23-year-old case would be proved false. Sources said 
Singh resigned of his own volition because he said he was confident of getting relief from higher courts. 
While Singh’s case is sure to add to the opposition campaign against the UPA, with Team Anna claiming vindication, Congress sources felt his resignation had implications for in-house politics in the runup to December polls. 
The graft charge, followed 
by the BJP offensive, would make defeating the rival a personal battle for Singh. There were doubts that he may not put in a wholehearted effort till he was assured of the CM’s post. After resigning,
A five-term CM, Singh is seen to be apprehensive that there are attempts to sideline him in favour of his detractor and Union commerce minister Anand Sharma.

Coke bets big on India

Soft drinks giant Coca-Cola will raise its investment in India by an additional $3 billion in the next eight years up to 2020, betting on the country’s growth potential and demographics, its chief executive officer Muhtar Kent said. This is in addition to the $2-billion investment already announced and, with Tuesday’s announcement, the company plans to invest $5 billion between 2012 and 2020. 
“We see the potential as big. We see a very great, bright future for India and for Indian business and I think we believe many others will follow like us and see that there is potential here,” Kent, who has lived in India, said. The investment announcement by Coca-Cola comes close on the heels of Swedish furniture maker IKEA’s plans to invest nearly 1.5 billion euros to enter the country’s single-brand retail sector. 
These announcements come as a breather for the government, which has been battling criticism over its handling of the economy. Critics say the lack of economic reforms and the taxation policies have scared foreign investors to the sidelines. 
Two international ratings agencies Standard & Poor’s and Fitch have revised India’s rating outlook to negative from stable citing lack of reforms, weak public fi
nances and slowing growth. 
The firm has already invested more than $2 billion in India since it re-entered the country in 1993. Tuesday’s announcement takes the total investment to $7 billion since the company’s return to India. The company and its bottling partners have drawn up plans to tap into the opportunities in India and has lined up investments in innovations, expansion of distribution network, cold drink placement and augmentation of manufacturing capacity. 



Delhi airport to use 3 runways together

In three months, circling over Delhi Airport due to congestion could become history as its three runways will be used simultaneously for almost the entire day. This move will take up runway movement from around 55-60 per hour to almost 80. During trials that are on at present, the airport has successfully handled 75-80 flights per hour. Sources said that when fully implemented by October, simultaneous operations would be carried out for most part of the day, except for a few lean hours. At night its usage would depend upon requirement since domestic operations completely cease for a few hours post midnight. The move has most benefitted low cost carriers and cargo operations as they are located close to the secondary runway 09/27. The decision to use all three runways simultaneously was taken since the main runway was facing massive congestion during peak hours. 

Saudis help India nab 26/11 handler

Saudi Arabia has helped India with a major breakthrough in the probe into the 26/11 attacks by facilitating the arrest of Syed Zabiuddin Ansari alias Abu Jundal, one of the key plotters of the Mumbai raid. 
Jundal, who directed Ajmal Kasab and other 26/11 attackers from 
the Lashkar control room, was picked up by the Saudi police, who put him on a New Delhi-bound flight after alerting the authorities here about their prize catch. 
The Lashkar terrorist , an Indian national wanted in many terror cases who was arrested on June 21, has since made the stunning claim 
that LeT chief Hafiz Saeed was present in the control room when the 26/ 11 masterminds choreographed the Mumbai attacks. He also said that ISI and Pakistani army officials were involved in planning 26/11 and attended the meetings. 
After Kasab and David Headley, the arrest of Jundal is seen as the 
third major success in India’s effort to unravel the 26/11 plot. 
Kasab’s arrest was important since his Pakistani nationality exposed Islamabad’s initial stubborn denial about involvement in the strike, and put paid to the plan to pin the blame on homegrown terrorists; even Hindu radicals. 

 Abu Jundal alias Syed Zabiuddin was said to be present in the control room in Karachi with five others during the 26/11 attacks and continuously gave directions to the militants for three days 
Said to be very close to Lashkar chief Hafiz Saeed and Zaki-Ur-Rehman Lakhvi 
He trained the 10 Mumbai attackers — including Ajmal Kasab — for 12 days in a Muzaffarabad (PoK) training camp 
He taught the militants Hindi and how to interact with media 
Told investigators that “apart from LeT brass, several officers of ISI and 
Pakistan army used to attend meetings during planning of 26/11” 
Jundal is a native of Georai area in Beed, Maharashtra 
A SIMI activist in the late 90s, he joined Lashkar after Godhra riots and visited Pakistan often for training 
Jundal is wanted in Ahmedabad train blast and Aurangabad arms haul in 2006 
The most important arrest in the 26/11 case after Ajmal Kasab so far 

Arrested LeT terrorist Syed Zabiuddin Ansari alias Abu Jundal’s significance lies in the key role he played in preparations and during the 26/11 attack on Mumbai. Being from Beed in Maharashtra, he taught the basics of Hindi usage to the Pakistani Laskhar squad. On the fateful day, he was in the control room firing instructions to killers, and also coached the killers to wrong-foot the Indian investigators and global community by posing as members of a fictional Indian outfit: Deccan Mujahideen. Sources in the Delhi Police said Jundal, who figures in India’s list of “most wanted” fugitives sheltered in Pakistan, has said that Lakhvi, Azam Cheema, Muzammil and one more handler were also in the control room. 
Indian authorities expect him to provide more clarity on the participation of two serving officers of Pakistan army — Major Sameer and Major Iqbal. The 26/11 tapes have a reference to one “Major General Saheb”. Indian authorities hope Jundal would help them ascertain the identity of this person and his connection with the ISI. 
Jundal is a vital part of the conspiracy. Tutored by him, the attackers claimed they were motivated by Indi
an government’s atrocities against Muslims and the plight of Kashmiri Muslims. The ploy that fitted well with Pakistan’s claim that terrorism in India was an indigenous affair; although the use of typical Hindi expressions like “prashashan” for authorities and recommendations for Sachar Commission immediately led Indian investigators to smell a rat. 

Somewhere in Srinagar....

The 200-year-old shrine of Peer Dastageer Sahib in Srinagar was gutted down in a major blaze. The holy relic (a strand of the saint’s beard) and a manuscript of the Quran are safe. More than 50 people were injured in clashes with the police in Srinagar. The fire, which started in the dome of the shrine that had heavy woodwork, was caused due to a short circuit at about 6.30am on Monday. It soon engulfed the building. 
Angry residents held fire officials responsible for delay in reaching the shrine and clashed with them. Some 15 firemen were injured in the clashes and firefight. The Sufi shrine of Hazrat Shaikh Abdula Qadir Jeelani, popularly known as Peer Dastageer Sahib, is revered in the whole of J&K. 
Soon after the news of fire spread, people began pelting stones at passing vehicles in the old city, forcing authorities to restrict people’s movement. The restrictions in turn triggered clashes between the youth and the police. The police used teargas shells and lathicharged to disperse the angry mob. Mutahida Majlis-e-Ulema, the amalgam of sundry religious organizations has called for a shutdown on Tuesday.

Congress bids Pranab adieu

The Congress Working Committee bade farewell to Pranab Mukherjee, its senior-most member, with Prime Minister Manmohan Singh praising the UPA’s presidential nominee for his immense contribution to public life, saying the party veteran would be missed. Congress chief Sonia Gandhi also expressed happiness at Mukherjee’s nomination at a brief meeting that ended with tea and snacks. In contrast to usual CWC meetings, the mood was light in contrast to the June 4 deliberations that saw a veiled criticism of the finance minister over the state of the economy. 
Mukherjee would end his formal association with Congress after four decades before engaging himself in the campaign for the President’s poll. He will resign as the finance minister on Tuesday. He is slated to file his nomination on June 28. 

Bangalore - Mysore track to be doubled by 2014

The Railways will complete doubling of track between Bangalore and Mysore by 2014. Announcing this, Union minister of state for railways KH Muniyappa said land acquisition hurdles to the project have finally been cleared. He said 138 km of track has to be doubled and has been sanctioned in three phases — Bangalore to Kengeri (12km), Kengeri to Ramnagaram (32 km) and Ramanagaram to Mysore (94 km). Although these works were sanctioned between 2003 and 2008, work never started because of right-of-way issues in Mandya. “Fifty acres of land has to be acquired in Mandya district. The work was supposed to be over by 2011. The delay is because of land issues,” he said. 

Moody’s retains stable rating outlook

Moody’s Investors Service said it was maintaining its stable outlook on India’s rating despite slowing growth, high inflation and an uncertain investment policy environment. Moody’s said these challenges have already been factored in their Baa3 rating and slowing growth, investment and poor business sentiment are unlikely to be permanent or medium term features of the Indian economy. 
The announcement should come as a relief for policymakers, who have been battling severe criticism after two global ratings agencies Standard & Poor’s and Fitch revised their outlook on India’s rating to negative from stable, citing slowdown in growth, weak public finances, lack of economic reforms and stalled policies. 
In fact S&P had cautioned that India could be the first 
country among the BRIC (Brazil, Russia, India and China) group to lose its investment grade rating. 


Average domestic air fares in India have been found to be lower than some major world aviation markets, including the US and Britain, according to a study based on International Air Transport Association (IATA) data.
The finding has come in the backdrop of the Directorate General of Civil Aviation (DGCA) asking Indian carriers to make ticket prices more rational and reasonable, following a recent outcry over a major fare increase on various domestic sectors.
A comparison of average domestic fares in some nations for air travel above 2,000 km showed those in China were higher than in India by 87 per cent, those in Australia by 182 per cent, in Canada by 162 per cent and in the US by 119 per cent.
Industry sources said while it was evident that Indian domestic fares were the lowest among the major domestic aviation markets, there was a “complete mismatch” between the fares and costs of operation in India.
They said the operating costs in India were much higher than these countries due to high taxation on jet fuel, rupee depreciation and airport charges, which were contributing to significant losses for the Indian carriers.

Made in India for the world

Japanese carmakers Nissan and Toyota have started exporting midsized cars made in India, spearheading a strategic change that seeks to make the most of the country’s cost advantage and growing technical prowess. In the next 12-18 months, Nissan plans to export 50,000 units of India-made sedan Sunny to the West, executives familiar with the matter said, adding that rival Toyota will ship Etios cars, made at its Indian unit, to South Africa. Volkswagen, Ford and Renault are expected to join them soon. Experts say exports not only help in dealing with the slowdown in the domestic market, but also act as a hedge against costlier imports, which have turned dearer by 25-30% in recent months. French carmaker Renault plans to export to the UK about 25,000 units of its sports utility vehicle Duster over 12-18 months. The shipments may start in October. Similarly, Germany’s Volkswagen is keen on producing left-hand drive Vento sedans in India for markets in the West. Volkswagen, which exports India-made Vento cars to South Africa and Malaysia, has mandated vendors to develop components for a left-hand drive version of the sedan. The carmaker plans to export 8,000-10,000 such units by 2013. Ford Motor, too, is likely to export its yet-to-be launched EcoSport SUV from India. 
Executives dealing with the projects of multinational carmakers say that over 100,000 sedans and SUVs manufactured in India are slated for export over the next 12 months. The depreciating rupee, which ended at a record low on Friday, is only likely to accelerate such plans. 
Experts say the growth in exports, which comes at a time the global economy is slowing down, could accelerate once the economy picks up. There are not many right-hand drive manufacturing bases that are as cost competitive as India.

Kolkata's East - West Metro update

The East West Metro — connecting Salt Lake Sector V to Howrah through the central business district — is already running behind schedule by 600-odd days or so. And now, a plan floated by the state transport department to realign the existing route of the East West Metro — to make it pass through Subodh Mullick Square and Esplanade before routing it to Howrah — has put question marks on its timely completion.    Perhaps worse is the possibility of cost escalation. The new proposal involves an additional 1.7km, and the project with a sanctioned cost of Rs 4,874 crore will certainly increase and take more time, feel officials. 
Phase I of the project — from Salt Lake Sector V to Sealdah — was to be completed by October 2013. But going by the progress of work, it will now be completed by March 2015, if everything goes according to plan. The rest of the project, scheduled to be completed in 2015-end, will get further delayed if the route is changed. However, the transport department authorities argue that the reworked alignment will help the passengers working in the central business district. 

Kolkata Metro Railway Corporation (KMRC) officials, who want to stick to the existing route, have locked horns with the transport department over the ‘proposed realignment’ and the Union urban development ministry have been contacted to resolve the issue. A 
meeting has been scheduled on June 30 at the Writers’ Buildings, at the initiation of chief minister Mamata Banerjee. 
The existing route, that begins from Salt Lake Sector V, crosses Karunamoyee, Central Park, City Centre, Bengal Chemical, Salt 
Lake, Phoolbagan, Sealdah, Central, Mahakaran and then goes under the Hooghly to merge at Howrah and end at Howrah Maidan. However, the transport department is proposing that the stations be aligned from Sealdah to go through Subodh Mullick Square, Esplanade and Dalhousie (adjoining Laldighi) before merging into Howrah and Howrah Maidan. 
J K Saha, special secretary of the state transport department, who joined the state government on deputation recently, was asked to examine the ‘merits’ of the 
proposed realignment. Saha, was originally part of the railways, and had worked with the CM for many years. 
According to observations of the transport department, there are issues of land acquisition and rehabilitation and “it would be 
difficult to fix time frame” for the existing route. The main argument is that land has to be acquired in the stretch along the B B Ganguly Street for which there is opposition and that may delay the project. Also, the new route — which goes through Esplanade — will have much more office passengers and for this no acquisition is required other than a CTC land at Esplanade. 
But KMRC authorities feel that this sudden change of plan could throw the project completely haywire. According to the KMRC argument, the East-West metro route is well integrated with other routes — there is integration with the northsouth Metro at Central station, suburban and long distance railways at Howrah and Sealdah stations, bus depots at Howrah and Sealdah stations, ferry services at Howrah and Karunamoyee bus terminal at Salt Lake. 


Existing route: Salt Lake Sector V — Karunamoyee — Central Park — City Centre — Bengal Chemical — Salt Lake — Phoolbagan — Sealdah — Central — Mahakaran — Howrah — Howrah Maidan 
[Howrah Maidan to Phoolbagan (from Subhas Sarovar point): underground, Salt Lake stadium to Salt Lake Sector V elevated] 

Proposed change of route: Salt Lake Sector V — Karunamoyee — Central Park — City Centre — Bengal Chemical — Salt Lake — Phoolbagan — Sealdah — Subodh Mullick Square — Esplanade — Dalhousie (Laldighi) — Howrah — Howrah Maidan 
DISTANCE Underground : 8.9 km

Elevated : 5.77 km 
Total : 14.67 km 
Estimated cost : Rs. 4874 crore (sanctioned cost); Escalated cost to be reassessed. 
Land to be acquired : about 22.6 hectare (of which 1.08 hectare is private land) 
Deadline : Phase I of the project (Sector V to Sealdah) was to be completed by October 2013. But revised date of completion: March 2015 
Deadline for rest of the project : 2015 end

DRDO's bio toilets

It is invisible to the naked eye and originated in the uninhabitable climes of Antarctica. This humble bacteria — known as Psychrophile — holds the potential to solve India’s sanitation problem in the years to come.    The Defence Research and Development Organisation (DRDO) is using these bacteria for the bio-digester technology it developed for disposal of human waste in an eco-friendly manner. DRDO has already tiedup with the Indian Railways for bio-toilets on trains. The technology was inaugurated on Sunday at Dhamra in Odisha in the presence of Jairam Ramesh,Union minister of rural development, drinking water and sanitation. 
It was Ramesh’s caustic remark in May that got the DRDO involved in installing the odourless bio-toilets that it had developed in rural areas. The minister had rued the fact that while India is capable of launching inter-continental ballistic missiles like Agni and satellites, women still don’t have access to proper sanitation. 
Ramesh said that the DRDO-developed green toilet project has been proposed to be introduced in 1,000 panchayats soon. 

Indian Hot Spots

Delhi has been named the most competitive city in India, though only the 68th in the world, in a recent study ranking 120 cities in terms of their ability to attract capital, business, talent and tourists. 
The Economist Intelligence Unit research report has ranked Delhi ahead of Mumbai (ranking 70), Bangalore (79), Ahmedabad (92) , Pune (97), Hyderabad (98), Chennai (105) and Kolkata (106). In terms of “economic strength”, the most highly weighted category, 15 of the top 20 cities are in Asia of which two are from India — Bangalore (16) and Ahmedabad (19). 
According to the report, the most competitive city in the world is New York, followed by London and Singapore

MEGA to employ third rail system

Ugly overhead electrical cables are an eyesore in most global metro rail projects, but the Ahmedabad-Gandhinagar metro rail will employ the third-rail system (TRS). This technology provides electric power to a train through an inverted U-shaped insulated conductor rail placed alongside the track on the ground itself. A connector from the metro rail will slide on the TRS to draw power. This technology is being used in the Bangalore Namma Metro rail but is absent in the Delhi metro. 
Gujarat’s MEGA metro rail has decided to float fresh bids to invite expression of interest (EOI) for supply, installation, testing and commissioning of tracks for the metro rail — including the TRS. 
As far as costs are concerned, the TRS is cheaper to install, when compared to overhead wire contact systems. This is because no structures are required for carrying the overhead contact wires. Besides, there is no need to reconstruct overbridges or tunnels to provide clearances. There is also much less visual intrusion on the environment. Bangalore metro rail uses 750 volt TRS systems and is considered to be among the safest and best in the world.
The first phase of the project will include 44 kilometres of elevated tracks and multiple stations on the route. 
There is a special mention of the fact that along the first phase, MEGA could also undertake underground corridors in certain stretches. These underground stretches are possible in the walled city area, where Archaeological Survey of India (ASI) regulations and the problem of weak structures are encountered. 

Sources in the Gujarat Industrial Development Board (GIDB) say that the metro can tap 15 to 18 percent of freight movement within Ahmedabad, which happens on weekdays. 
Senior officers at MEGA also pointed out that the height of the metro rail elevated corridor would not be as high as it is in Delhi. This has been decided keeping in mind the future need of building multi-level flyovers. In addition, MEGA, which is the special purpose vehicle for the metro project, is planning a broad gauge network.

Of a Ballistic Missile Defence system....

Delhi and Mumbai, two of the most vital metros, have been chosen for DRDO’s ballistic missile defence (BMD) system that can be put in place at a short notice. The proposal is being prepared for final clearance from the Cabinet Committee on Security. The strategic planning has already begun to install the BMD system in these cities and the final proposal will be sent for government approval after detailed analysis, sources said. 
The sites for installing radars to track enemy missiles and storing counter-attack projectiles will be determined during the planning stage, they said, adding that these locations must have adequate stealth feature and protection against sabotage. To ensure maximum protection against air-borne threats, the DRDO will put a mix of counter-attack missiles, which will be able to shoot down enemy missiles both within the atmosphere and outside it. 
The BMD system will require minimum human intervention due to the complete automation of tracking devices and counter-measures. 
Human intervention will be required only to abort the mission, the sources said. The system will later be used to cover other major cities. The system, which has undergone successful tests, can destroy an incoming missile with a range of up to 2,000 km. DRDO had used variants of Prithvi missiles as simulated targets and successfully intercepted them. It is all set to be upgraded to the range of 5,000 km by 2016. 
The BMD was first testfired in 2006, elevating India into the elite club of countries to have successfully developed an anti-ballistic missile system after the US, Russia and Israel. 


Another point of view

Zinnov Management Consulting, a market globalization Advisory firm has presented a positive & robust outlook on the Indian economy as opposed to the sentiments that are doing rounds in the industry. In a striking contrast to Fitch's recent downgrade of India's credit rating outlook to negative, Zinnov believes this to be a momentary phase and showcased reasons for it to be a promising decade.

Praveen Bhadada director (market expansion) Zinnov said, India is no longer an emerging market but a happening one, where such market ups and downs should be acceptable. Both multinationals as well as Indian companies aspiring for growth should continue to take focus on the long-term view, with which they established their presence in country.

"While quarterly numbers are important, it is also equally essential to focus on market creation activities and opportunity realization to reap benefits in the next five-year horizon. With the rapidly growing internet and mobile user base and increasing demand for services through new technology challenges, investors should not be deterred by a temporary phase when the fundamentals continue to remain strong," he added.

Showcasing and listing some of the strong reasons why various spokes of the ecosystem need to keep faith in these turbulent times, Zinnov brought to light some of the factors on which, we should be betting high on:

India technology consumption is exploding: India currently has over 123 million internet users, over 600 million people use mobile phones, 15 million people do online transactions and over 51 million people log on to Facebook. Over 170 million UID numbers have already been allocated to Indian residents. The $30 B+ domestic IT market is growing at a much faster rate than the exports market. India is already seeing $B+ start-ups emerging. E-commerce market is expected to reach $23 B+ in the next 4 years. Cloud computing is expected to see revenues of the order of $5 B in the next 5 years.

GST implementation will accelerate economic growth: While GST implementation has been long delayed, but once implemented, GST is expected to increase India's GDP by 0.9% to 1.7% as per NCAER. This will also result in export gains of 3.2-6.3% and import gains of 2.4-4.7%. GST along with FDI in retail segment will increase the FMCG industry size by $50 Billion.

Indian MNCs and vast base of SMBs will be impossible to ignore: 61 Indian companies feature in the Forbes list of top 2,000 global companies. Over 175 companies can potentially feature in the list by 2020. India also has 45 million SMBs, making India the second-largest country in terms of SMB potential, next only to China.

Large states in India are already booming: India's top 5 most populous states can hold the combined population of Brazil, Mexico, Philippines, Vietnam and Egypt. Maharashtra's GDP is equivalent to that of Singapore. GDP of states such as Delhi, Bihar, Chattisgarh, and Goa has grown over 10% in FY12. Over 2,700 investor MOUs were signed in Gujarat in just one day as part of the global investors' summit in 2012.

Indian Poultry snapshotz

Air India's loss making routes

Monsoon tracker

Shocking !

Stray dogs help foil robbery

Just six months ago, a pack of stray dogs at Anand Nagar in Dahisar (east) was considered a “nuisance” by some residents. Today, everyone is all praise for the “brave” strays after they recently helped foil a robbery in the locality. Around 3am on June 18, a gang of robbers, clad in briefs and vests, entered the premises of Sai Krishna Vatika building, beat up the two watchmen—Bhim Singh and Suresh Yadav —and tied them up. A pack of 15 strays spotted the gang and started barking. The gang, which was attempting to break into a flat on the second floor, tried to chase off the dogs with sticks, stones and even shoes. The canines stood their ground and barked for 30 minutes. As a result of their barking, the residents woke up and alerted the Dahisar police. Though the robbers managed to flee, they couldn’t break into a single house. 
Bhupender Shelar, a resident, said, “It was only because of these 15 dogs that the gang was forced to flee.Senior inspector Ansar S Pirjade promptly responded to our calls.” “Six months ago, some residents wanted to get rid of these very stray dogs. Now, everyone wants to feed them,” said Bipin Shah, secretary, building no. 2. Animal welfare officer Saurabh Edwankar said, “People who want to kill strays must realize that animals can help us.” A complaint has been lodged against unknown robbers.


Somewhere in West Bengal....

In what appears to be a case of poaching, the body of an adult elephant was found, with its tusks chopped off, at the Khuttimari forest in Jalpaiguri on Thursday morning. Foresters spotted the carcass at South Moraghat compartment in Gosaihaat beat under Moraghat range of the forest. This is the first suspected case of elephant poaching in the state in a decade.Sources said it was an ailing tusker and stranded at Khuttimari forest for the last four months. Though the forest department officials had tried their best to treat it, they failed as the elephant was wild and was in no mood to cooperate. “Since the tusker was already injured, we could not take the risk of tranquillizing it as that might result in an early death of the animal,” said a forester.  The tusker hardly moved in the initial days after it got stranded at the forest. But of late, it had started moving, indicating that the animal was responding to the treatment by the forest department. While the tusker was recovering from the injuries, its death in the wee hours on Thursday came as a severe blow to the forest officials. Though the post mortem revealed that it was a natural death, foresters and environmentalists are in a shock as its tusks are missing. 
“Even last week the tusker had raided a paddy field near Dhupguri. It’s really surprising that the animal would collapse suddenly. More importantly, the tusks are missing. There is every possibility of poaching in this particular case”, said a forester. After preliminary investigation, the foresters are suspecting involvement of local villagers in the incident. “An axe might have been used. It doesn’t look like an ace hand, the manner in which the tusks were cut. We have already engaged the forest protection committees (FPC) to search for the tusks in the nearby villages,” said Bidyut Sarkar, DFO, Jalpaiguri. 
MD of state forest development corporation and an elephant expert, S S Bist, said the last such incident was reported in the state in 
2002, when an elephant died due to floods in North Bengal and its body was found on the banks of river Daina, under Jalpaiguri division, with the tusks missing. “That was a case of theft of tusks,” he added. 
Conservationist Biswajit Roy Chowdhury said there should be proper probe before coming to any conclusion, as such a case has been reported after almost a decade. The forest department has decided to send the viscera and blood samples to a Kolkata laboratory for more tests. In October 2009, a rhino had died after falling into river Torsha after poachers shot it at Jaldapara Wildlife Sanctuary.

Of FDI in multi brand Retail

The government is moving swiftly to build a consensus over the move to allow foreign investment in the multi-brand retail sector, with the commerce, industry and textiles minister Anand Sharma writing to the chief ministers (CMs) of the three key states of Uttar Pradesh, Punjab and Odisha to seek their support.    Sharma has been trying to build a consensus, and has met several CMs to draw their support to the move. Some CMs have backed the move to open up the multi-brand retail sector that has emerged as a test case for moving ahead with economic reforms. 
“I hope that being a CM who is known for his progressive outlook and global vision, you will recognize intrinsic merit of this policy and give your support and understanding in the matter,” Sharma said in his letter to Odisha CM Naveen Patnaik, UP CM Akhilesh Yadav and Punjab CM Prakash Singh Badal. “I look forward to your personal support in the rollout of this policy for the larger public good,” the minister said. 
He said the government 
had taken a conscious decision of leaving the implementation to the states and the FDI policy cleared by the Cabinet will be an overarching enabling policy framework and the state governments will be free to take appropriate decision on its rollout. 
Sharma, who is in Russia for a bilateral meeting, also told businessmen that the government expects consensus to emerge over the move to open up the multi-brand retail 
sector to foreign companies in the coming weeks, a move which is expected to shore up investor sentiment and offer fresh business opportunities. 
The minister also met Olaf Koch, CEO and chairman of 
the management board of METRO, a top global retail firm. Koch detailed the firm’s expansion plans in India. He said the company will raise the number of their stores from 10 to 16 in the country. The UPA government was forced to put the decision to allow 51% foreign equity in the multi-brand retail sector after stiff opposition from some of its allies and a few state governments. The issue of opening up the sector to foreign retailers such as Wal-Mart, Carrefour and Tesco has been debated for more than a decade but had made limited progress due to the strong opposition from traders, political groups and the government’s allies. 
The waning influence of the Trinamool Congress, which is seen as the stumbling block to the opening up of the sector, in the run up to the presidential poll has revived hopes that the government may be able to finally implement the decision. 
Sharma, in his letter to the CMs of non-BJP ruled states, outlined the benefits of opening up the multi-brand retail sector for the economy. “Opening up FDI in multi-brand retail will bring in much needed investments, technologies and efficiencies to unlock the true potential of the agricultural value chain,” Sharma said in his letter. “The Indian consumer will undoubtedly gain significantly from this step as they will be afforded much greater choice, better quality and lower prices,” he added. 


India has been ranked the fifth most attractive destination for retail investment among 30 emerging markets because of rising disposable incomes and rapid urbanization. Even though its ranking slipped from the fourth spot in 2011, India has been placed ahead of the UAE, Saudi Arabia, Indonesia and Russia. 
“India (5th) remains a high-potential market with accelerated retail market growth of 15 to 20 per cent expected over the next five years, supported by GDP growth of 6-7%, rising disposable income, and rapid urbanization,” US-based global management consulting firm A T Kearney. 
Changes in FDI regulations were a major story in India last year. The changing FDI climate has provided an interesting dynamic to several international retailers' entry and expansion plans for India, it added. According to the entity’s Global Retail Development Index (GRDI) 2012, Brazil is the most alluring market for investment in the retail sector, followed by Chile (second), China (third), Uruguay (fourth) and India (fifth). 

Noting that Europe faced another year of economic turmoil in 2011, developing countries forged full speed ahead.“With consumer confidence improving and spending increasing, global retailers continued their expansion in to these markets. In the past five years, US-based Wal-Mart, France-based Carrefour, UK-based Tesco and Germany based Metro Group saw revenues in developing countries grow 2.5 times faster than revenues in their home markets,” the report said. 

Presidential elections

Pranab Mukherjee’s candidature for President has not only divided the UPA, the NDA but also the Left, with the CPM and Forward Bloc pledging their support for the finance minister and the CPI saying it would not support the Congress’s policies. Bengal factor seems to have played a part in the CPM decision with some leaders seeing it as an opportunity to widen the wedge between the Congress and Trinamool. CPM general secretary Prakash Karat said Mukherjee, “in the present situation, is the candidate with the widest possible acceptance”. 
Meanwhile, the BJP has decided to support P A Sangma, saying it could not give the government a walkover. Sangma is also supported by the AIADMK and Naveen Patnaik of the BJD. Pranab has the support of the Shiv Sena and the JD(U), constituents of the NDA, besides the SP and the BSP. The Trinamool has still not pledged it's support to either candidate in the wake of Dr. APJ Abdul Kalam opting not to contest.

Fire sweeps Mantralaya

A fire raged through the top four floors of the eight-storey Mantralaya, Maharashtra’s seat of power, through most of Thursday. The blaze has reportedly destroyed thousands of sensitive documents, computer files and records, many pertaining to land use, de-reservation and the crucial Adarsh society scam. Mantralaya has 2,500 to 3,000 employees and on any given day about 3,000 visitors. Apart from Ajit Pawar, home minister R R Patil, minister of state for home Satej Patil, EGS minister Nitin Raut and chief secretary Jayantkumar Banthia were among those in the building when disaster struck. Additional chief secretary (home) Amitabh Rajan and NCP leader Vinayak Mete escaped using a fire ladder from the top floors. 
The fire badly exposed the lack of preparedness of Mumbai’s fire brigade and the poor fire safety equipment in the state’s most important building. It raised awkward questions about the government’s desire to build vertically in the city and allow towers when it struggled to control a blaze in a ground-plus-seven storey building. 
In frightening scenes, many employees, including women on the higher floors, frantically tried to escape from the 57-year-old building. They crowded on balconies or perched on window sills and ledges. The scenes of people clambering down water pipes were reminiscent of recent highrise fires in Kolkata and Bangalore.

Rupee dives to a lifetime low

The rupee experienced its biggest drop in nine months when it closed at an all-time low of 57.16 against the dollar – 1.5% lower than its previous close of 56.57. In intra-day, the local currency fell to a low of 57.33 following a rush for dollars from importers after rating agency Moody’s downgraded major international banks. Despite the steep fall there was no panic in the markets as the depreciation was partly offset by good news of oil prices continuing to be low. Oil constitutes almost a third of India’s import bill and demand from oil companies could subside once the Reserve Bank of India implements a government proposal which involves RBI selling dollars directly to State Bank of India which would in turn sell them to oil companies. Although this would deplete RBI’s forex reserves, it would bring stability into the forex market and may even reverse the sentiment vis-a-vis the rupee. Gold imports have collapsed, crude oil prices have crashed and NRI deposits have grown after RBI eased the ceiling on foreign currency deposits. 
Data released by RBI showed that foreign exchange reserves rose by $2 billion to $289.39 billion in the week to June 15. The increase in reserves was on account of appreciation of assets in non-dollar currency such as euro and UK pound, dealers said. Bankers also said that absence of dollar supply in the international market was forcing Indian companies to replace dollar loans with rupee debt as a result of which credit growth during the current fiscal up to (June 1) continued to be high at 18.3% . 
The rupee’s fall also took its toll on the sensex which closed 60 points lower at 16,972 after touching an intra-day high of 17,016. In the absence of capital flows and a continuing current account deficit, dealers are saying that there is no telling how low the rupee can go. Although foreign institutional investors have been net buyers this year in recent days they have been selling stocks. 
For India the bad news this week has been a warning from Fitch which revised the outlook for the country to negative. The Fitch action comes on the back of a warning from Standard & Poor’s that India could be downgraded to junk status. The rupee traded at 58.14 in the three-month forward market compared to 57.36 on Thursday. In the offshore non-deliverable forward market (where forward contracts on the rupee are settled in dollars) three month deals were struck at 58.34 indicating that foreign investors expect the currency to weaken further. 


Why is the rupee falling despite macroeconomic fundamentals remaining steady? The present weakening of the rupee is linked to a risk-averse sentiment. Importers are buying ahead of their requirement in the fear that the rupee could fall further. This is largely because of global factors with the dollar index near its all-time high; Moody’s downgrading global banks and Eurozone showing no signs of resolving. Investors are also disappointed that the US Fed has not announced a fresh round of monetary easing. 

When will the rupee steady? To a certain extent the fall already has a self-corrective element built in. Dealers say that all it needs is one positive development in the global markets to compel exporters to start booking profits. Such a turnaround could push the rupee back to 54-55 levels soon. Since every day the rupee sees a new fall, technically there are no new resistance levels. However, dealers feel that exporters and importers would review their position once the rupee hits 58. 

How does the fall impact the economy? As far as fuel costs are concerned, the recent depreciation in the rupee has been almost entirely offset by the fall in global oil prices, which constitutes nearly a third of the import. While in the short term the fall will add to inflationary pressures, in the medium term it will help in rebalancing the trade account by curbing imports and boosting exports. 

Which businesses lose and which ones benefit? Besides oil, the other large import items are gold, coal, diamonds and copper. The increase in price of coal will adversely impact the power and steel industry and push up prices for consumers. Auto and electronics industry with high import content will also be hit as the slowdown has reduced their ability to pass on cost increases. Businesses that benefit include IT, textiles, and engineering goods.