Archive for ‘India alert’

05/02/2015

Falling oil prices pull India’s budget out of the fire | Reuters

Falling oil prices have been a major windfall for India: Just weeks ago it faced failing to meet fiscal deficit targets, but can now expect a budget that not only hits its targets, but also provides extra cash to support reform.

India's Finance Minister Arun Jaitley gestures during the session 'India's Next Decade' in the Swiss mountain resort of Davos January 23, 2015. REUTERS/Ruben Sprich

The coming budget for fiscal 2015/16 (April-March), which will be unveiled on Feb. 28, is widely seen as a test of Prime Minister Narendra Modi‘s ability to lead economic reform.

Fortunately for Modi, the economic climate has handed him a chance to pass that test with flying colours: Budget planners are optimistic that he will set Asia’s third-largest economy on a path for growth of 7 percent to 8 percent over the next two years.

“The situation is far better now than in December,” said one finance ministry official, who spoke to Reuters despite a ban on contact with the media in the secrecy-shrouded run-up to the presentation of the annual budget. “The budget will deliver on Modi’s promise of better days for the economy.”

The halving of global oil prices since mid-2014 has allowed the Modi government to raise diesel and petrol fuel taxes and cut diesel prices by 25-30 percent – a windfall gain for households as well as businesses, and dampening inflationary pressures in the economy.

via Falling oil prices pull India’s budget out of the fire | Reuters.

05/02/2015

Alibaba’s Ant Financial to buy 25 percent of India’s One97 | Reuters

Ant Financial Services Group, an affiliate of China’s Alibaba Group Holding Ltd (BABA.N), has agreed to buy 25 percent of Indian payment services provider One97 Communications, tapping into the country’s smartphone and online industry boom.


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The companies did not provide the value of the deal, but a person with knowledge of the matter called the investment a precursor to One97 listing on the stock exchange, and said the stake was worth more than $500 million.

The deal values One97 at more than $2 billion, making it one of the most-valuable start ups in the country. One97 runs Paytm, an online platform through which users can shop or pay utility bills, whereas Ant runs Paytm’s Chinese peer Alipay.

Alibaba spokeswoman Teresa Li and One97 founder Vijay Shekhar Sharma declined to disclose the value. Sharma told Reuters that Ant would buy new shares in his company.

Paytm has benefited from the spread of affordable handsets and internet connectivity which has turned India into the fastest-growing smartphone market in the Asia-Pacific region, according to researcher IDC.

via Alibaba’s Ant Financial to buy 25 percent of India’s One97 | Reuters.

03/02/2015

Drought hits 90 lakhs farmers in Maharashtra – The Times of India

Nearly 90 lakh farmers in Maharashtra have been impacted by the drought that has devastated the kharif crop, official data shows. The figure is almost on a par with the population of Sweden.

Maharashtra is already known for its farm crisis and reports the highest number of farmer’s suicides in the country. The drought — brought on by a delayed and inadequate monsoon — is set to deepen the distress for its cultivators.

It comes close on the heels of the crop distress wreaked by the hailstorms last year which hit cultivators hard.

Data with the agriculture department show that two-thirds of the state’s 1.37crore farmers have been affected by the drought which has impacted mainly the Marathwada and Vidarbha regions. These areas have historically been the most deprived in the state.


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via Drought hits 90 lakhs farmers in Maharashtra – The Times of India.

03/02/2015

Aam Aadmi Party Scores Delhi Elections Polling Hat Trick – India Real Time – WSJ

If three’s a trend then the Aam Aadmi Party might want to throw their topis in the air in celebration at the latest opinion polls.

Three voter surveys published Tuesday in the run up to elections in Delhi gave the lead to AAP slightly ahead of Prime Minister Narendra Modi’s Bharatiya Janata Party and leagues in front of the Congress party that held the capital for 15 years until 2013.

The city goes to the polls on Feb. 7 in an election that is widely viewed as a referendum on Mr. Modi’s performance since he took office in May. The results will be announced on Feb. 10.

To be sure, opinion polling in India is far from an exact science and usually needs to be taken with a handful of salt.

Nevertheless, the wind seems to be changing in favor of AAP, or the common man’s party in a revival of fortunes after a drubbing in national elections last year.

Analysts say this is because the upstart party has focused on local issues-based politics while the BJP and Congress have been turned their arsenal on Mr. Kejriwal at the expense of issues voters care about.

AAP, led by tax-inspector-turned-activist-turned-politician Arvind Kejriwal, could walk away with 36 to 40 seats in the 70-member legislative assembly, according to the latest findings from polling firm TNS for the Economic Times newspaper.

To form the government in Delhi, a party needs a simple majority of 36 seats.

via Aam Aadmi Party Scores Delhi Elections Polling Hat Trick – India Real Time – WSJ.

31/01/2015

Record Coal India share sale boosts privatisation drive | Reuters

India has raised about $3.6 billion by selling a 10 percent stake in state-run Coal India Ltd in the largest ever equity deal in the local market, giving a welcome boost to the government‘s faltering divestment drive.

Workers drill at an open cast coal field at Dhanbad district in Jharkhand September 18, 2012. REUTERS/Ahmad Masood/Files

The share sale will move the government closer to the still distant target of raising $10 billion by selling minority stakes in state-owned companies to trim the fiscal deficit to a seven-year low by the end of March.

Until now, the government had raised barely $300 million.

The strong investor response to the Coal India issue is expected to bolster New Delhi’s plans to offload shares in other state firms including Oil and Natural Gas Corp and Power Finance Corp Ltd.

Overseas and local portfolio investor demand for Coal India shares exceeded supply, in a vote of confidence in recovery in Asia’s third-largest economy, and in its growing demand for energy as industrial production increases.

via Record Coal India share sale boosts privatisation drive | Reuters.

31/01/2015

India’s economic growth revised up by almost 50 percent | Reuters

India’s economy grew almost 50 percent faster in 2013/14 than earlier thought, the government said on Friday after changing a formula, a reminder of the challenges that unreliable statistics present to Indian policymakers.

Kashmiri farmers thrash paddy crop in Srinagar October 22, 2013. REUTERS/Danish Ismail/Files

In the year leading up to the elections that brought Prime Minister Narendra Modi to power last May, the economy grew 6.9 percent, not the 4.7 percent reported earlier, chief statistician T.C.A. Anant told reporters.

Modi’s campaign succeeded partly because of the widespread feeling that his predecessors from the Congress party had plunged the economy into the country’s longest deceleration in growth in a generation.

The revised formula, showing a faster recovery, includes under-represented and informal sectors as well as items such as smartphones and LED television sets in gross domestic product.

That could boost India’s growth figure in the year ending in March 2015, which the Reserve Bank of India (RBI) has projected to be around 5.5 percent.

Some in government predict the change will

via Economic growth revised up by almost 50 percent | Reuters.

29/01/2015

India’s Vodafone decision eases tax worries for Shell, others | Reuters

This action demonstrates the new pro-business attitude of Modi’s government.

“India’s decision to drop a tax dispute with Vodafone Group Plc(VOD.L) is likely to mean relief for Royal Dutch Shell PLC(RDSa.L) and others caught in similar, protracted battles, as the government tries to attract much-needed foreign investment.

A Shell logo is seen at a petrol station in London January 31, 2013. REUTERS/Luke MacGregor/Files

India’s image as an investment destination has been tarnished by a reputation for red tape, unpredictable rules and a tax office long seen as over zealous in its pursuit of foreign firms. Prime Minister Narendra Modi‘s government, seeking to reboot a slowing economy, has sought to change that.

Late on Wednesday, the government said it would not appeal a Bombay High Court ruling in favour of Vodafone, the biggest foreign investor in India.

“It’s a departure from the past when all the high-value tax cases were always litigated,” said Himanshu Shekar Sinha, a partner at law firm Trilegal.

“With this, the government has sent a clear direction that appeals should not be filed routinely.”

Tax lawyers said they expected cases such as those involving IBM (IBM.N), Nokia Oyj (NOK1V.HE), Microsoft Corp (MSFT.O) and others could now be resolved instead through negotiation.”

via India’s Vodafone decision eases tax worries for Shell, others | Reuters.

28/01/2015

BBC News – The village that just got its first fridge

Three-quarters of the world’s homes have a fridge – an appliance that can revolutionise a family’s life. A tailor in one Indian village has just become the first person in his community to own one – something he has dreamed of for 10 years.

Santosh choosing a fridge

Santosh Chowdhury is pacing up and down speaking into his mobile phone.

“How much longer? It’s left past the auto-rickshaw stand, yes that’s right,” he shouts, and then continues his nervous pacing.

It’s a big day for him and indeed for the village of Rameshwarpur, just outside Calcutta in north-east India.

Santosh has bought a new fridge – not just his first but also the first in the entire community of 200 people. “Owning a fridge is quite rare in a village like ours,” he says.

The lack of fridges in Rameshwarpur reflects the situation across the whole of India. Only one in four of the country’s homes has one. That compares to an average of 99% of households in developed countries.

But change can be rapid when linked to an emerging middle class. In 2004, 24% of households in China owned a fridge. Ten years later this had shot up to 88%.

“Ours is the first generation to own a fridge in my family,” says Santosh. “No one in my father’s and grandfather’s time had ever seen one.”

Rameshwarpur has a distinctly rural feel. People bathe in a pond in the middle of the village, children fly kites in the dusty lanes. The homes are little more than simple huts, made of mud and brick. But the village has electricity and many houses have televisions.

Santosh works as a tailor. He lives in a modest, two-room hut which doubles as his home and workplace. “I don’t have a regular job as such,” he says. “Sometimes I also work part-time in a factory. I make about three to four dollars a day.”

Life is quite hard, especially for his wife Sushoma.

She cooks lunch, stirring a pot of rice on a wood fire outside their hut. It’s something she does every day because they have no way of storing leftovers. So Santosh has to go the market early each morning to shop for groceries.

He’s always wanted to make life easier for his wife and has been dreaming of buying a fridge for 10 years. “Owning one will be so convenient,” he says. “You don’t have to buy vegetables every day, you can store food – especially in the summer.”

So he’s been saving hard, putting away a bit of money every month for a purchase that costs more than a month’s salary. “I don’t make that much money, that’s why it’s taken me so long. But now I have enough,” he says, smiling.

At one of Calcutta’s high street stores, about 15km from his home, Santosh had several models to choose from. Peering inside, he ran his fingers along the side of a bright red model.

“It was quite confusing. It was my first time you know. I couldn’t figure out which one to get,” he says shyly. “My wife wanted a red one. I wanted one that will consume the least power. We need to keep our bills down.”

Finally, the deal was struck. Santosh got a discount because it was the final week of the winter sales. The price was 11,000 rupees (£120) – but more importantly, he was able to pay in instalments, having paid just under half the money up front.

“No one pays cash any more like they used to,” says store manager Pintoo Mazumdar. “Everyone can get a loan from the bank or the store – all you need is a bank statement and ID. That’s why so many lower income people can afford to buy a fridge these days.”

 

FRIDGEONOMICS

Fridge ownership around the world

76% Global average

65% Asia Pacific

99% Europe and North America

87% Latin America

63% Middle East and Africa

Source: Euromonitor

 

Santosh’s fridge finally arrives on the back of a cycle rickshaw. He walks along next to it with a broad smile. Many of the villagers come out on to the lane as well, craning their necks to get a better look.

“Careful, careful,” he cries out as a couple of them help carry the fridge into his house.

Then it’s time for a religious ceremony.

His wife applies a dab of vermillion to the fridge, to keep away evil spirits, and then blows on a conch shell to seek divine blessings and welcome the fridge into their home. The fridge has pride of place – next to Santosh’s sewing machine and their tiny television set.

They simply cannot stop smiling.

“We’ve dreamt of this moment for so long,” says his wife Sushoma. “Some of our neighbours have already asked us if they, too, can store some food in our fridge. “And I can’t wait to drink cold water in the summer.”

As Santosh shows off his fridge everyone crowds around, excited. “Imagine, they won’t have to shop for fresh vegetables every day,” says one woman. “I’m thinking of getting one too,” another man says.

It’s a special moment for the Chowdhurys. This acquisition could potentially transform their lives. “I can focus on finding more work and not worry about buying food for the family,” Santosh says. “My wife will get more free time and perhaps she can give me a hand as well.”

With those words, he opens his fridge and places the first contents inside – tomatoes, an aubergine, eggs and some milk.

via BBC News – The village that just got its first fridge.

28/01/2015

Bill and Melinda Gates Receive Indian Civilian Award – India Real Time – WSJ

Bill and Melinda Gates received one of India’s highest civilian awards for their work to promote global health and development. The Gates are among four foreigners and 16 Indians to receive the Padma Bhushan award “for distinguished service of high order,” according to a statement from India’s Ministry of Home Affairs.

“We are honored to receive the Padma Bhushan award for social work alongside so many distinguished awardees,” said Mr. and Mrs. Gates in a statement Wednesday

Their foundation, the Bill & Melinda Gates Foundation, started work in India in 2003 to prevent HIV/AIDS. It has since expanded its work to areas including vaccines, maternal and child health, sanitation and agricultural development and has an office in New Delhi. The foundation has an asset trust endowment of $42 billion.

“Our work is guided by the belief that all lives have equal value. We are excited to see the extraordinary progress that India is making in improving the lives of its people,” said the Gates’ statement. “We applaud the government of India’s commitment and look forward to continuing to partner with them to build an equitable system where women and children survive, thrive and reach their full potential.”

The Padma Bhushan is conferred on Jan. 26, Republic Day, each year by the president of India  for service in fields including  art, social work, public affairs, science and engineering, trade and industry, medicine, literature and education, sports and civil service.

Other winners this year include political commentator Swapan Dasgupta, Supreme Court lawyer Harish Salve and filmmaker Jahnu Barua from the northeastern state of Assam.

The Padma Vibhushan, a higher award conferred on the same day, was awarded to nine people including Bollywood superstar Amitabh Bachchan and BJP co-founder L. K. Advani.

via Bill and Melinda Gates Receive Indian Civilian Award – India Real Time – WSJ.

27/01/2015

Obama ends day of Indian pageantry with $4 billion pledge | Reuters

U.S. President Barack Obama ended a landmark day in India on Monday with a pledge of $4 billion in investments and loans, seeking to release what he called the “untapped potential” of a business and strategic partnership between the world’s largest democracies.

Honeywell CEO Dave Cote (L) and India's Prime Minister Narendra Modi (C) laugh at a remark by U.S. President Barack Obama (R) during a CEO Roundtable and Forum at the India U.S. Business Summit in New Delhi January 26, 2015. REUTERS-Jim Bourg

Earlier in the day, at the invitation of Prime Minister Narendra Modi, Obama was the first U.S. president to attend India’s annual Republic Day parade, a show of military might that has been associated with Cold War anti-Americanism.

It rained as troops, tanks and cultural floats filed through the heart of New Delhi, but excitement nevertheless ran high over Obama’s visit, which began on Sunday with a clutch of deals to unlock billions of dollars in nuclear trade and to deepen defence ties.

Both sides hope to build enough momentum to forge a relationship that will help balance China’s rise by catapulting democratic India into the league of major world powers.

The leaders talked on first name terms, recorded a radio programme together and spent hours speaking at different events, but despite the bonhomie, Obama and Modi reminded business leaders, including the head of PepsiCo, that trade ties were still fragile.

India accounts for only 2 percent of U.S. imports and one percent of its exports, Obama said. While annual bilateral trade had reached $100 billion, that is less than a fifth of U.S. trade with China.

via Obama ends day of Indian pageantry with $4 billion pledge | Reuters.

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