Indian Hockey Team Enters Asia Cup final, Assured World Cup Berth

It was a great week for the Indian Sports. In a row after U-23 Cricket Team won Emerging Nations Cup and a Gold Medal in Archery World Cup, Indian Hockey Team has qualified for the World Cup and enters the Asia Cup Final.

India came up with an inspiring performance to beat Malaysia 2-0 and enter the final of the ninth Asia Cup hockey tournament in Ipoh, Malaysia, on Friday.

Earlier, defending champions South Korea beat Pakistan 2-1 in a hard-fought first semi-final. 

South Korea's goals came from penalty-corner conversions from Jang Jong Hyun, in the 31st minute, and Lee Nam Yong, in the 40th, while Pakistan's lone goal was scored by skipper Muhammad Imran in the 46th minute.

With the Koreans having already qualified for the World Cup, and Pakistan losing in the semis, both India and Malaysia are virtually through to next year's showpiece 12-team event at The Hague, Netherlands, as the first and second reserves, though official confirmation will come only after the conclusion of the Oceania Cup, in November, which either Australia or New Zealand, who have both qualified, is expected to win.

It will also be the first time that Pakistan will not feature in the World Cup since it started in Barcelona in 1971.

With knowledge of a World Cup berth virtually assured, the Indians started the semi-final on a confident note and stunned the packed home crowd at the Azlan Shah stadium with an early goal.

V R Raghunath swelled his goal tally to seven when he converted India's first penalty-corner in the eighth minute.

However, it was the home team that enjoyed the early share of exchanges and had couple of scoring chances. While on the first occasion Faizal Saari missed from close range, an unmarked Mohd Noor shot wide a minute later with only Indian custodian P R Sreejesh to beat.

The Malaysians created lot of scoring opportunities right through the match but the Indian defence, led goalkeeper Sreejesh, held firm.

India could have doubled the lead four minutes from half-time, but Malaysia’s goalkeeper, Kumar Subramaniam, brought off a fine save to deny Rupinderpal Singh from the team’s second penalty-corner.

The Malaysians continued to missed chances despite creating numerous scoring opportunities after the change of ends.

They earned back-to-back penalty-corners ten minutes into the second half but a brilliant Sreejesh denied them with a fine saves.

To the agony of the partisan home crowd, Izwan Firdaus Ahmad Tajuddin missed an open chance in the 58th minute.

The Indians were quick to rub salt into Malaysia's wounds as they doubled the lead in the 60th minute through Mandeep Singh, who scored his fifth goal of the tournament, after a fine one-two with Ramandeep Singh.

The Malaysians pressed hard in the last few minutes but were thwarted by a crowded Indian defence.

India will play South Korea in the summit clash on Sunday. India had earlier defeated the Koreans 2-0 in the pool stage.

Earlier, Japan defeated Bangladesh 3-0, while Oman eked out a narrow win over Chinese Taipei, via penalty the shoot-out, in the classification matches for fifth to eight places.

In the first classification match of the day, Japan proved to be too good for the Bangladeshis.

Japan scored two goals in the first half through Toshiro Tachibana (9th minute) and captain Koji Kayukawa (26th).

Meanwhile, in the second classification match of the day between two debutants, Chines Taipei overcame a two goal deficit to hold Oman 2-2 after the regulation 70 minutes.

Oman took the lead through an own goal in the 24th minute. They doubled their lead in the 31st minute through a field goal from Samir Haliyas Juma'an Al Shibli.

The Taiwanese side made spirited comeback in the last 15 minutes of the match and scored through Liu Ching Kun (57th) and Tseng Hsien-Yi (67th) to take the match into penalty shootout.

Source: Rediff

Q1 GDP grows slower than expected at 4.4%

India's Gross Domestic Product (GDP) grew at a slower than expected rate of 4.4% for the first quarter of the current financial year. This is below an ET Now Poll estimate of 4.6%. The economy grew at the slowest quarterly rate since the global financial crisis. The growth was contracted by a contraction in mining and manufacturing. 

The agricultural sector of the economy grew at 2.7% versus 1.7% QoQ. Manufacturing sector growth contracted at (-)1.2%. While the trade and hotels growth cae in at 3.9% versus 6.2% QoQ, the construction sector grew at 2.8% versus 4.4% QoQ. 

Electricity & gas sector grew at 3.7% versus 2.8% QoQ. Mining sector growth contracted at (-)2.8% versus (-)3.1 QoQ. 

The Indian economy has been steadily losing momentum in recent years. Economic growth virtually halved in two years to 5 percent in the fiscal year that ended in March -- the lowest level in a decade -- and most economists surveyed by Reuters in the past week expect 2013/14 to be worse. 

The industrial sector contracted in the first quarter, the 1.1% fall in the index of industrial production showed. The decline in the purchasing managers' index for services in the first quarter indicates a widening of the slowdown to services sector that expanded 6.5% last year. The HSBC Markit Services Purchasing Managers' Index fell to fell to 47.9 in July from 51.7 in the previous month, falling below the 50 mark that shows contraction. 

Worryingly, apart from the good monsoon that can boost the rural economy, there is not to look ahead either. Even the effect of good monsoon will show up only from the second quarter. The severe liquidity squeeze unleashed by the RBI is unlikely to be a quick relief pill as initially believed, and may soon be replaced with a wider monetary tightening. 

The rise in inflation to above 5% has further cramped RBI. "The situation calls for monetary tightening. The interest rate differential is needed to attract investment," said Devendra Pant, chief economist, India Ratings. 

Higher interest rates will dampen demand and delay investments revival, and more importantly, the central bank will be out of the equation as far as stimulating growth is concerned. 

Higher subsidies may force further reduction in spending, if P Chidambaram stays with his budgeted fiscal deficit target of 4.8% of GDP. The authorities were counting on the higher government spending to keep the economy afloat while the policy makers tried to get stalled investments moving through the cabinet committee on investments. 

Emphasising the need for Parliament to run smoothly for boosting investors' confidence,Prime Minister Manmohan Singh on Friday said, "Its incorrect to say investors have lost confidence; Parliament is the supreme body, it is not being allowed to function." 

Stating that the opposition needs to recognise its responsibility, Singh said that essential legislations need to be passed for future of the country. "Consensus building is the responsibility of government and opposition. It is the responsibility of the members of this house to send out a message," he reiterated. 

"I do recognize there is a problem, it can be solved only if opposition recognizes its role, conduct in Parliament," he said in a reply to Arun Jaitley. 

"We have a responsibility to act collectively to deal with this crisis on confidence," he said. "We need to make sure India perceived as creditworthy, bankable & viable," he added. 

Earlier in the day the PM ruled out reversal of reforms or resorting to capital controls to rescue the sliding rupee, which he said fell on account of domestic as well as global factors. 

Making a statement on the state of theeconomy in Parliament amid concerns over rapid depreciation of rupee, Singh said the country has to be ready for short-term shocks but the government will ensure that the fundamentals of economy remain strong. 

"We are faced with challenges but we have the capacity to deal with them,", he said, while seeking support of all political parties in this situation. 

Breaking his silence on the decline of rupee, he said there "may be short term shocks to our economy and we need to face them. That is the reality of the globalised economy, whose benefits we have reaped". 

There is no question of reversing the policies just because there is some turbulence in capital and currency markets, he said, adding the "sudden decline in exchange rate is certainly a shock, but we will address this through other measures, not through capital controls or by reversing reforms".

source:Economic Times

India's first defence satellite GSAT-7 launched successfully

India's maiden dedicated defence satellite was launched by an European rocket early today, giving a boost to Navy's modernisation push to improve space-based communications and intelligence gathering over a wide oceanic region including the country's landmass. 

Custom-made for the Navy by the Indian Space Research Organisation, the advanced multi-band, state-of-the-art GSAT-7 was successfully lofted into space by European space consortium Arianespace's Ariane 5 rocket at 2 AM from Kourou spaceport, French Guiana, in South America. 

In an impressive launch, telecast live by Doordarshan, Ariane 5 precisely placed the Rs 185-crore home-built communication spacecraft into the intended Geosynchronous Transfer Orbit (GTO) after a flight of 34 minutes 25 seconds duration. 

"As planned, ISRO's Master Control Facility (MCF) at Hassan in Karnataka started acquiring the signals five minutes prior to the separation of GSAT-7 from Ariane-5 launch vehicle. The solar panels of the satellite have been deployed and they are generating power. Initial checks have indicated normal health of the satellite," the Bangalore-headquartered ISRO said. 

Expected to be operational by September-end, the country's first exclusive satellite for military applications, would give a major push to the maritime security. 

According to ISRO, GSAT-7 would provide wide range of service spectrum from low bit rate voice to high bit rate data communication. Its payload is designed to provide communication capabilities to users over a wide oceanic region including the Indian land-mass. 

The 2625-kg satellite, with some new technological elements including the antennae, carries payloads operating in UHF, S, C and Ku bands, helping marine communications with coverage over India landmass as well as surrounding areas, seen as a significant asset from security and surveillance points of view. 

With GSAT-7 which would give it an integrated platform, the Navy would be able to overcome the limitation from line of sight and ionospheric effects, among others, that it currently faced as far as space-based communications were concerned. 

Earlier, satellite communication in ships was through Inmarsat, a major provider of global mobile satellite communications services. 

ISRO said the present orbit of the satellite will be raised to Geostationary Orbit of about 36,000 km altitude through three orbit raising manoeuvres by firing of GSAT-7's Liquid Apogee Motor (LAM). 

Preparations are underway for the first firing, planned in the early hours of tomorrow. The satellite will be placed in the Geostationary Orbit by September four. 

The launch cost for ISRO is around Rs 470 crore, including insurance, as the Indian space agency cannot orbit heavy satellites like GSAT-7 as its home-grown GSLV rocket, with indigenous cryogenic stage, is still at works and needs two successful flights before it is declared operational. 

In addition to GSAT-7, the Ariane 5 orbited another spacecraft EUTELSAT 25B/Es'hail. EUTELSAT 25B/Es'hail 1 -- which rode in the top position of the Ariane 5 payload "stack" -separated first, some 27 minutes after the liftoff at 2 am. 

At approximately 34 minutes into the flight, the lower passenger - GSAT-7 - was deployed, completing the mission. 

Indian Ambassador to France, Arun Singh and Director of Bangalore-based ISRO Satellite Centre, S K Shivakumar, were among those who witnessed the launch. 

Singh said the launch event is also a reflection of strategic partnership between India and France. Shivakumar said GSAT-7 would be operational by next month-end.

Source:Economic Times

Practise swadeshi, save the rupee

The only way to save the rupee and to prevent its free fall is to start practising swadeshi all over again. Yes, you read it correctly. As a nation we are living beyond our means and you can’t continue doing so unless we want India to crash (and not the rupee alone). That is exactly what is happening: the crash of the rupee is a symptom of the problems that ail the economy. Although sarkari economists et al are trying to explain away the problem by changes in the Fed rates in the US and a revival in the US economy this is a very shallow explanation. Just because the Indonesian rupiah, the South African rand and the Brazilian real have been competing with the rupee in depreciating against the US dollar, there is no reason to wish away our problems.

Next time you bite corn produced in Australia, oranges raised in California and apples from god knows where, think deeply whether as a nation we can afford this. Maybe middle class and upper middle class consumers can afford these imported fruits at an individual level, but certainly not as a nation. When India’s foreign exchange earnings are not enough to cover our imports, it is a no-brainer that we cannot. Stopping such imports and also of other edibles like cheese is not going to make any one worse off. The question that we should ask ourselves is: cannot good quality fruits be grown in the country that we have to spend precious foreign exchange to import them?

In the good old days, students used to travel abroad for higher studies after they completed their MA to take admission in PhD and other such programs in top universities. The learning in these top universities would be far superior to what could be had in high institutions in the country. But things have changed in the last two decades: these days you can find  parents sending their children abroad to do their undergraduate degrees. Why? This is possibly because it has become a fad to send children abroad. Parents say that they have the money so they will send their children abroad. While this may be true, the fact of the matter is that as a nation we cannot afford precious foreign exchange to spend on children studying at the undergraduate level and doing basic technical courses. A pertinent question to ask is whether the education infrastructure is so poor that there are no colleges in the country to impart a basic degree. So the issue is why this fad for a foreign education?  

However you would not have seen any economist or politician who waxes eloquent on TV holding forth on the rupee speak anything about all this. Most of their conversation revolves around the tight monetary policy of the RBI and the decline in growth impetus, etc This misses the real issue. The fact of the matter is that the process of liberalization that was kick-started in 1991 is so lopsided that it promoted the culture of consumption without any breaks. True, before liberalization the economy was in shackles and the consumption in the country was artificially restricted. This was by way of import curbs and by the process of licensing. Thus things like washing machines were treated as luxuries although in reality it was a great boon for families especially those with working women. 

Liberalization provided a great opportunity to break the shackles and set up a modern, efficient manufacturing base in India. Well that really did not happen adequately. Had that happened India would have become a major exporter of manufactured goods that would have been enough to take care of India’s import requirements (of which oil imports is a major component). But India continued to be an exporter of raw material. For example till the ban in exports of iron ore, the country was exporting iron ore to China. A country which is focused on its growth (like China is) would have instead tried to manufacture steel from this iron ore which could have been exported instead. This would have resulted in more foreign exchange earnings. But India had no such strategy in place.

Instead of exporting manufactured goods, India has become an importer of raw materials. A good example is coal that is imported into the country for fuelling thermal power stations. This is in spite of the fact that India sits on reserves of billions of tons of coal reserves. India spent $18 billion in coal imports in the last fiscal year 2012-13. This is by no account a small sum.

But while exports did not go up, imports of not only coal and petroleum products (valued at $169.25 billion in the last fiscal year) but other consumer goods also went up.

World class manufacturing facilities did not come up in India due to many reasons. But primarily the culprit is the policy paralysis in the country for many years that resulted in inadequate infrastructural facilities whether it was electricity generation, port facilities or proper roads. Bureaucratic hassles and widespread corruption in granting permissions played a none-too-insignificant role in this process. 

Entrepreneurs finding a bleak scenario soon realized that realty was a booming sector where large profits could be made without much hassles. As a result entrepreneurs of all hues and colors turned to realty. This includes top names in the Indian corporate sector. Even many IT companies started dabbling in real estate. With politicians joining in the game, realty became the name of the game. Thus the high growth evidenced in the country in the period 2000-2009 and especially between the years 2005-2008, is nothing but an indication of the rapid growth in the real estate sector that led to bourgeoning cities (never mind the poor infrastructure). But the increase in the growth of the realty sector is an artificial growth that may add to national income yet doing nothing to increase India’s exports. A huge middle class, which has earned moolah through direct speculation in realty or by working in companies whose profits have soared due to their investments in real estate, started feeling empowered. And this empowerment was reflected through increased consumption. This has led to spiralling imports. It may not be out of place that India’s savings rate has plummeted in the last five years. From 36.9 per cent in fiscal year 2007-08, it tumbled to 30.8 in 2012-13 and is expected to go down to 30 per cent by the end of fiscal year 2013-14.

The rupee may have tumbled in the last two weeks, but the signals were there for anybody to see for the last few months. In the last fiscal year India’s imports of gold soared to $50 billion. This was not due to the proclivity of the Indian consumers to own the yellow metal. Rather it was a signal from the market that the rupee could not be trusted to hold its value. Gold was being imported, because people preferred to hold their savings in the form of the yellow metal than in the form of the Indian rupee in banks or investments.

Whether it is an individual, household or a nation, nobody can live beyond their means. You have to cut the coat according to the cloth that you have. Thus there is no other way for India and as Indians we have to learn to live within our means. The time has come to reduce to zero the imports of inessentials and restrict the imports to the essentials. The control raj came with a lot of ills, but independence also comes with responsibilities. From 1991 to 2013, the pendulum has swung from one extreme to the other. It is time to restore balance in our lives, think in terms of age old concepts like import substitution and check the rampant spread of this consumerist culture. Otherwise doomsday is not far away.

source: Times of India

Cyberspying: Government may ban Gmail for official communication

The government will soon ask all its employees to stop using Google's Gmail for official communication, a move intended to increase security of confidential government information after revelations of widespread cyberspying by the US.

A senior official in the ministry of communications and information technology said the government plans to send a formal notification to nearly 5 lakh employees barring them from email service providers such as Gmail that have their servers in the US, and instead asking them to stick to the official email service provided by India's National Informatics Centre.

"Gmail data of Indian users resides in other countries as the servers are located outside. Currently, we are looking to address this in the government domain, where there are large amounts of critical data," said J Satyanarayana, secretary in the department of electronics and information technology. 

Snowden fallout

The move comes in the wake of revelations by former US National Security Agency contractor Edward Snowden that the US government had direct access to large amounts of personal data on the internet such as emails and chat messages from companies like Google, Facebook and Apple through a programme called PRISM. 

Documents leaked by Snowden showed that NSA may have accessed network infrastructure in many countries, causing concerns of potential security threats and data breaches. Even as the new policy is being formulated, there has been no mention yet of how compliance will be ensured.

Several senior government officials in India, including ministers of state for communications & IT Milind Deora and Kruparani Killi, have their Gmail IDs listed in government portals as their official email. 

A Google India spokeswoman said the company has not been informed about the ban, and hence it cannot comment on speculation. "Nothing is documented so far, so for us, it is still speculation," Google said in an email response. 

A senior official in the IT department admitted on condition of anonymity that employees turn to service providers such as Gmail because of the ease of use compared with official email services, as well as the bureaucratic processes that govern creation of new accounts. 

"You can just go and create an account in Gmail easily, whereas for a government account, you have to go through a process because we have to ensure that he is a genuine government user." 

Last week, IT Minister Kapil Sibal said the new policy would require all government officials living abroad to use NIC servers that are directly linked to a server in India while accessing government email services. Sibal said there has been no evidence of the US accessing Internet data from India.

Sunil Abraham, executive director of Bangalore-based research firm Centre for Internet and Society, said he agrees with the government's decision to ban Gmail for official communication and that any official violating this needs to be punished. 

"After Snowden's revelations, we can never be sure to what extent foreign governments are intercepting government emails," he said. Abraham, however, called the government's decision a "late reaction", as the use of Gmail and other free email services by bureaucrats has increased in the past. 

"Use of official government email would also make it easier to achieve greater transparency and anti-corruption initiatives. Ministers, intelligence and law enforcement officials should not be allowed to use alternate email providers under any circumstance."

source:Times of India

Brainstorming Works Best When You're In a Bad Mood

We all like to think we're most creative when we're happy, but research suggests otherwise. Instead, we're likely at our best when we're angry or a little upset. So the next time you need to do some brainstorming, you may want to try it when you're in a bad mood instead of waiting for the sun to come out.

Over at 99U, David Burkus points to a 2012 study published in the Academy of Management Journal that indicated that participants who were asked to keep a diary of their emotions for a week reported that their most productive days started with negative emotions and ended with positive ones. Essentially, even without knowing it in some cases, they channeled their negativity into their work, with great results.

But how do you apply the idea to your own life? He explains:

One possible explanation is focus. Past research suggests that negative emotions help narrow our focus to specific tasks or projects and even persist longer on those projects, especially when it comes to getting rejected. Perhaps the initial negative emotions were actually helping the professionals keep their mind focused on their work longer, digging deeper into the problems they might be facing and generating better solutions.

To test this idea, the same researchers asked a different group of participants to try their hand at a brainstorming task-listing as many ideas as possible. Before brainstorming, however, the participants were randomly assigned to write a biographical essay recounting either a positive or negative event in their life. Just like the creative professionals in the first task, the participants who reflected on a negative event performed better, listing more ideas that were also more varied and original. Even though their essay writing had no relationship to the brainstorming task, the negative emotions they experienced put them in a better mood to focus on the problem and think up solutions.

While we don't suggest you try to whip yourself up into an irrational rage before heading into a project meeting or sitting down to do some development work, the implications are pretty clear. When you're in a bad mood or having a tough time at work, that may be the best opportunity for you to channel that energy into something that's been bugging you for a long time, or to take a step back from the humdrum and do some brainstorming. You may discover that when you're feeling the crappiest is the best time to make real headway.

Use Your Anger to Smash Creative Blocks 

Source:Times of India

India plans oil import from Iran to cut import bill, CAD

The oil ministry has worked out a plan to save $22 billion in the oil import bill from Iran thus helping reduce the current account deficit (CAD), petroleum minister M Veerappa Moily has said. 

"Oil (imports) is one of the components responsible for CAD. The prime minister has told us to save $25 billion in the import bill. As of today, we have pieced together a plan to save $22 billion in import bill," Moily said. 

He said the savings would be around one percent of the GDP. 

Moily was talking to reporters Tuesday at an event to present a cheque for Rs.5 lakh to the widow of Arjuna awardee sportsman late Makhan Singh. 

Senior oil ministry sources told IANS that the plan includes renewing imports from sanctions-hit Iran, which India pays in rupees thereby saving foreign exchange and reducing the CAD. 

Officials calculate that importing, for instance, 10 million tonnes oil from Iran means saving $10 billion in foreign exchange outgo. During the last fiscal, India imported 13.1 million tonnes of oil from Iran, down from 18.11 million tonnes of 2011-12. 

After not buying any oil from Iran in first four months of the current fiscal, imports were resumed this month with state-run Mangalore Refinery and Petrochemicals getting the first tanker-load. 

In view of the current volatility of the rupee against the dollar, India is discussing with Iraq the possibility of trade in local currencies, which would help insulate India's oil imports from Iraq also.

Source:Times of India

India's first defence satellite all set for launch

India's maritime security will get a fresh impetus as the stage is now set for the launch of an exclusive home-built satellite for the Navy by European space consortium Arianespace from Kourou spaceport in French Guiana on Friday. 

GSAT-7 is India's first dedicated spacecraft for defence applications. 

"It has frequency bands that will help marine communications", an official of Bangalore-headquartered Indian Space Research Organisation, which built the satellite.

"It has coverage over India landmass as well as surrounding seas. It's important from security and surveillance points of view", the official said on condition of anonymity. 

A senior space scientist in the know said: "So far, Navy had limitation from line of sight and ionospheric effects etc. It was thought essential to have an integrated platform for their exclusive use. Earlier, satellite communication in ships was through Inmarsat (a major provider of global mobile satellite communications services). Now, India will have its own set up" 

ISRO shies away from calling it an exclusive satellite for the Navy on record, but privately admits exactly that. 

The Rs 185 crore state-of-the-art satellite carries payloads operating in UHF, S, C and Ku bands. 

GSAT-7 has a lift-off mass of 2625 kg and is based on ISRO's 2500 kg satellite bus with some new technological elements, including the antennae. Its solar arrays generate 2900 W of electrical power. 

A108 Ampere-Hour Lithium-Ion battery enables the satellite to function during the eclipse period. The propulsion subsystem has a 440 Newton Liquid Apogee Motor (LAM) and thrusters. 

GSAT-7 is scheduled to be launched into a Geosynchronous Transfer Orbit (GTO) by Ariane-5 VA 215 during the 50-minute launch window starting from 2 am on Friday. 

The launch cost for ISRO is around Rs 470 crore, including insurance. ISRO can't launch heavy satellites like GSAT-7 as its home-grown GSLV rocket, with indigenous cryogenic stage, is still at works and needs two successful flights before it's declared operational.

source:Times of India

Rupee closes in on 69 vs dollar, its biggest day fall in 18 years

The rupee slumped to a record low near 69 to the dollar on Wednesday on growing worries that foreign investors will continue to sell out of a country facing stiff economic challenges and volatile global markets. 

The pummelling in markets sent the rupee reeling 3.7 per cent to an all-time low of 68.85 with the unit closing just a touch off that, at 68.80/81 per dollar, its biggest single-day fall since October 1995. 

It closed on Tuesday at 66.24/25. In absolute terms too, the 256-basis-point fall in the rupee was the biggest ever. 

An assault on the psychologically key 70 level now appears imminent, as intervention from the central bank seen mid-morning only gave the rupee a brief respite. 

In the stock market, state-run Life Insurance Corp, which was spotted buying shares, allowed the domestic benchmark index to erase steep early losses and end the day stronger. 

"If steps are not taken to implement the reforms necessary to tackle the structural issues, the government will be left with the so-called '3D options': debt default, devaluation, deflation," said Angelo Corbetta, head of Asia equity for Pioneer Investments in London. 

"In India, devaluation is happening now and deflation could be about to start. The good news is that the debt default is highly unlikely." 

Foreign investors have sold almost $1 billion of Indian shares in the eight sessions through Tuesday — a worrisome prospect given stocks had been India's one sturdy source of capital inflows in the first half of 2013. 

If more foreign investors throw in the towel, traders fear it will put the country in a vicious cycle in which the hit to confidence in turn slams shares and the currency even harder. 

Policymakers have consistently struggled to come up with steps that can convince markets they can stabilise the rupee and attract funds into the country despite extraordinary measures last month by the central bank to drain liquidity and action to curb gold imports and cut India's huge oil import bill. 

Rising oil prices, Fed fears amplify pressure 

India badly needs foreign capital as it struggles with a record high current account deficit, growing fiscal pressures and an economy growing at the slowest in a decade. 

The failure to address India's economic challenges is becoming an increasing source of tension at a time when fears of a possible US-led military strike against Syria are knocking down Asian markets, with the prospect that the Federal Reserve will soon end its prolonged period of cheap money further raising concerns. 

At the same time, rising domestic bond yields threaten to raise borrowing costs across the already slowing economy, while global prices of oil and gold — the country's two biggest imports — have surged this week. 

"The end game for the current decline would be the day the rupee stops falling, alongside government measures like a substantial diesel price hike," said Samir Arora, a fund manager at Helios Capital in Singapore. 

BNP Paribas on Wednesday slashed its economic growth forecast for India for the fiscal year to March 2014 to 3.7 per cent from its previous 5.2 per cent — the weakest growth since 1991-92 when India buckled under a balance of payments crisis that required a loan from the International Monetary Fund. 

"India's parliament remains toxically dysfunctional with little, if any, business conducted," BNP said. 

"And, with next year's general election looming ever nearer, the government's willingness to instigate a politically unpopular fiscal tightening is close to nil." 

India is due to post April-June gross domestic product data on Friday, with analysts estimating the economy grew at an annual rate of 4.7 per cent, roughly in line with the previous quarter. It will also post July federal fiscal deficit figures. 

Lacking confidence 

The rupee has plunged more than 20 per cent this year, by far the biggest decliner among the Asian currencies tracked by Reuters. 

India's main National Stock Exchange index fell as much as 3.2 per cent, although suspected buying by LIC led the index to recover in the afternoon. 

Foreign investors are paring equity positions, having sold a net $3.6 billion in stocks since the start of June, but still their net purchases so far this year total nearly $12 billion. 

Among the blue chips that fell the most on Wednesday were Axis Bank Ltd and ICICI Bank Ltd, a concern given foreign investors had so far largely held on to their investments in lenders, owning more than 40 per cent of each. 

In bond markets, foreign investors have sold more heavily, with outflows reaching nearly $4.6 billion so far this year. 

Yet the government has so far failed to provide a coherent response, analysts said. Its approval of infrastructure projects on Tuesday was trumped by concerns about the fiscal deficit after India's lower house of parliament this week approved a 1.35 trillion rupees ($19.6 billion) plan to provide cheap gain to the poor. 

In its latest initiative, the government late on Tuesday proposed setting up a task force to look into currency swap agreements, a measure analysts said could bring some relief if carried out in time by reducing market demand for dollars or other major currencies. 

"Let's see what the authorities do, but if the government can come out with some really big currency swap arrangement with some countries, that can be a strong positive," said Uday Bhatt, a forex dealer with UCO Bank in Mumbai.

Source:Times of India

The Food Security Bill takes us back to the 1970s as lessons of history are ignored

The most powerful politician in the country wants economic growth to be more inclusive and turns increasingly leftward. Her finance minister is worried. There is conflict in the Middle East, with Egypt and Syria at the heart of it. Industrial output is stagnant and the balance of payments situation is worrisome. The government, however, sends contradictory signals. There is nationalisation of wheat trading even as the government introduces direct tax reform legislation and follows it with a big cut in tax rates.

Were we talking about Sonia Gandhi and P Chidambaram? No, we were referring to Indira Gandhi and her finance minister YBChavanin 1973-74, when rhetoric and some decisions were socialist, while grim economic reality pushed the government to slowly unshackle the economy. The passage of Sonia's cherished Food Security Bill in theLokSabha is reminiscent of the early 1970s, when the simultaneous left-right lurch ended with the economy contracting by the end of the decade and subsequent help from the IMF. 

The food bill is a bad idea and does no service to the poor. It fails the country on two critical counts, on economic implications and winning the war against malnutrition. Food security has received enormous budgetary support over the last decade. The price at which the central government gives grain to the poor has remained unchanged for 13 years, even as the economy has grown fivefold along with an increase in average household consumption expenditure during the time. The question today is whether this bill is the need of the hour. No, as this bill makes it almost impossible to bring about any meaningful reform in the overall package of subsidies. All this for cereals, an item of household consumption spending that has been falling. The bill also reduces space a future government will have to reorient spending. 

Recent research has increasingly begun to point to India's sanitation record as an important factor in explaining child stunting. High population density coupled with open defecation by half the country has resulted in a disease environment that leaves India with a child stunting level greater than sub-Saharan Africa, even if infant mortality rates are lower. Sanitation battles, however, cannot be won by grandstanding. India's misfortune today is that her politicians refuse to heed lessons of history.

Source:Times of India

Nasscom conclave focuses on future of Indian IT-ITeS industry

    Aiming to provide emerging firms insights on the changing user environment, IT-ITeS industry body Nasscom today organised a conclave, showcasing the evolution of the Indian IT Industry and its future road map.


The Emergeout Conclave 2013, pondered on opportunities from emerging and developed markets, the hot verticals for start-up successes, changing buyer landscape and the art of learning from failures among other pertinent issues. 

"The landscape of the IT industry is changing rapidly and many start-ups and emerging companies are finding themselves ill-equipped to address the changing needs of their customers" Nasscom President Som Mittal said here. 

These start-ups and new players are uncertain about the ways and means to tap the emerging SME (small and medium enterprise) customer base, gain deeper knowledge about their prospective buyers and enhance their engagement mechanisms with them, he added. 

"Keeping this in mind we have designed the sessions of today's conclave, to evangelise and support emerging IT companies to out-compete and perform in such a dynamic environment," Mittal said. 

The USD 108 billion India IT-ITeS industry faces challenges like employability, infrastructure, favourable policies and competition from other low cost countries, he added. 

Low employability of existing talent with only 10-15 per cent employable graduates in business services and 26 per cent of employable engineers in technology services continues to be a major bottleneck, Mittal said. 

The infrastructure development is largely constrained to about nine cities, which contribute more than 95 per cent of the country's exports and development of tier 2 and 3 cities has not taken off in a planned manner, he added. 

The lack of a supportive fiscal environment with a long- term policy framework is also leading to competition from other low-cost countries including China, Philippines and from Eastern Europe with potential erosion of India's opportunity, he said. 

"Another major issues is funding. Many start-ups require small funds to start and complete the first phase of their growth, fund like about Rs 20 lakh. Getting such small amounts is difficult," Mittal said. 

The participating companies shared their insights on working in the domain, focusing on new technologies, client needs and processes. 

Emerging IT players are not only setting new benchmarks in operational excellence, they are drawing vital VC and angel funding, building diverse product portfolios and foraying both the domestic and overseas markets, including non-traditional regions, Mittal said.


http://economictimes.indiatimes.com/tech/ites/nasscom-conclave-focuses-on-future-of-indian-it-ites-industry/articleshow/22097804.cms

The polity's crisis, not just the UPA's

       The UPA government in its second term is the favourite whipping boy for the country's current ills. Nuanced commentary examines institutional dysfunction. Such diagnosis is as helpful as detection of fever for treatment of cancer. 

Of course, UPA-II is in disarray. It turns defensive on record reduction of poverty, on sustained increase in rural wages, on setting up in five years one-fourth of India's installed power generation capacity, on laying power lines to 4.6 lakh villages, on initiating a programme that would give millions of Indians a way to proclaim and prove their unique identity, on thus paving the way to financial inclusion, on laying fibre optic cable to 2,50,000 panchayats, on ratcheting up rural tele-density from 1.7 in 2004 to over 40 in early 2013, on orchestrating structural transformation of the economy that finally sees the proportion of the workforce engaged in agriculture come down below 50%. 

UPA leaders leave uncontested the proposition that the current mess is solely the UPA's creation. Its scams have shorn it of authority and paved the way for the courts to hijack policy.Its dither has led to paralysis and missed opportunities on the foreign policy front. Its turn towards "socialism" of the giveaway kind has ballooned the fiscal deficit and widened the current account deficit. 

This picture of the UPA as a wrecking crew, targeting its own home, has one empirical flaw: all the scams summoned to call this the most corrupt government in history date back to UPA-I, whether the 2G, coal or Commonwealth Games scams. 

But, under UPA-I, things were going swimmingly. India was growing at its fastest pace ever, its global prestige was high, it won a breakthrough nuclear deal in the face of stiff opposition, Indian companies bought up foreign ones. 

India was an emerging market and emerging power. It was the same UPA, led by the sameSonia Gandhi and the same, won't-speak-unless-spoken-to Manmohan Singh. Why was this corrupt, dole-happy, socialistic leadership fine then, but not now? 

Systemic Corruption 

The problem is not just with the UPA but with the entire polity. Unless we accept this and tackle the real problem, India will continue to languish, whoever is in power. 

The problem is that nobody pays for Indian democracy. India's biggest private sector company, Reliance IndustriesBSE -4.72 %, for example, makes zero contribution to political parties. The story repeats itself as you go down the rungs of the corporate ladder. Just a handful of companies admit to making political contributions. The rest pay off the books, to individual politicians, with a keen eye on the quid pro quo. 

Political parties file income-tax returns showing puny incomes. 2008-09 registered the highest incomes:Rs497 crore for the Congress and Rs220 crore for the BJP. In reality, these parties spend tens of thousands of crore rupees: not just for elections, but also for the regular functioning of their parties. Which means, quite simply, that India's great democracy is funded by the proceeds of corruption. 

This corruption takes three forms: loot of the exchequer (the fodder scam, commissions on procurement), sale of patronage (allocation of mining leases) and plain extortion (no clearance till you pay up, complex administrative procedures, each one of which serves as a rent-seeking opportunity).

This mostly involves use of the state machinery. Which means civil servants must collude, getting suborned in the process. They turn unaccountable as well. A dysfunctional legal system facilitates such corrupt funding of politics. 

In India, corruption is systemic, not opportunistic, as in most other countries. Without corruption, politics would come to a halt, democracy would cease to work. 

Democracy vs Dirty Funding 

This has been morally degrading and has turned politics predatory. But things still remained functional. Till prosperity threw up a body of people whose progress in life has little to do with state patronage and who thus resent being subjected to poor governance and extortion. 

Their anger and their ability to use institutions of the state, such as the courts, to challenge and oppose corruption, aided by democratic advances such as the Right to Information Act, have brought the conflict between democracy and funding it through corruption to the fore. 

The system has turned dysfunctional thanks to this basic conflict, which manifests as dithering bureaucrats, a glory-hunting CAG, judicial overkill and defensive politicians. 

Clean Up Funding 

And unless political funding turns transparent, the crisis will continue, whoever happens to be in power. Sure, the UPA is dysfunctional in its own way, much as each unhappy family is unhappy in its own unique way, with ministries other than finance pretending they have no role to play in tackling the economic crisis. 

But even if some other formation were to replace the UPA, the basic conflict between democracy and its corrupt funding would continue to stymie things. At hand is a crisis of political evolution. It must not be confused with a particular alliance's problems.


Source:http://blogs.economictimes.indiatimes.com/Cursor/entry/the-polity-s-crisis-not-just-the-upa-s

India cannot afford to grow at less than 8%: P Chidambaram, FM

     
          Blaming the political logjam in the Parliament for stalling economic decisions, Finance Minister P Chidambaram on Tuesday said that India cannot afford to grow at less than 8%. "There is no political consensus on how to mitigate economic woes," he said.

Chidambaram said that there are no signs of global crisis ending and the Indian economy is challenged by global factors. "India needs more reforms and less economic restrictions," he said while addressing the Lok Sabha. "India needs a more open economy to seed growth," he added.

"The polity needs to agree on a basic direction of policy making," he emphasised. "Political parties should agree on a common economic programme," he said.

Seeking to assure the house, Chidambaram said that the economy has sufficient reserves and the external debt is manageble. He, however admitted the need to shore up the reserves. :We will fully and safely finance FY14 CAD, it will contained at $70 billion or less," he added.

Chidambaram's comments come after BJP leader Yashwant Sinha said, "Rupee is tanking but government, Chidambaram keep saying All Izzz Well."

Earlier in the day, Sinha said that the government sowed the seeds for the current crisis, back in 2008-09. "In a move that was aimed to win elections, the government hiked consumption expenditure, as opposed to the recommended investment expenditure," Sinha hit out.

Sinha explained that a high fiscal deficit leads to higher inflation, which in turn impacts investments. When the fiscal deficit continues to be high, it is natural for it to spill into current account deficit, he added.

Stating that the rupee has fallen despite Reserve Bank of India's (RBI) efforts, Sinha said that it is the responsibility of the government and central bank to curb the volatility in the currency. "Such rapid volatility does not bode well for the economy," he said. "Foreign investors shying away from India's growth story," he added.

source: http://economictimes.indiatimes.com/news/economy/indicators/India-cannot-afford-to-grow-at-less-than-8-P-Chidambaram-FM/articleshow/22097263.cms