The government on Saturday said it would not roll back the hike in petrol, diesel and cooking gas prices that came into effect on June 5.
"Decision on the hike in prices of petrol, diesel and LPG is final and there will not be any change to it," Petroleum Minister Murli Deora said in an interview.
Many states have already slashed sales tax on petrol and diesel and VAT on cooking gas to cushion the impact of the hike on consumers.
The Centre announced an increase of Rs 5 per litre in petrol, Rs 3 per litre in diesel prices and that of LPG by Rs 50 per cylinder earlier this week.
Deora explained that the price hike had become necessary to curb the losses of oil marketing companies.
States ruled by Left parties observed a shutdown, including two days in West Bengal, to protest the price increase.
Had it not been for the increase, the three-state run oil firms BPCL, HPCL and IOC would have lost over Rs 225,000 crore in revenues this fiscal and would have run out of cash to import crude.
Although many states, including Delhi, Tamil Nadu, West Bengal and Bihar, have come forward to forego a part of their tax revenues from petroleum products, Deora appealed to other states to reduce sales tax on these fuels to give relief to consumers.
Saturday, June 7, 2008
Inflation rises to 8.24%
Inflation surged to 8.24 per cent for the week ended May 24 from 8.1 per cent in the previous week, despite fall in prices of some essential commodities like fruits, vegetables, spices.
Wholesale prices-based inflation stood at 5.15 per cent a year ago. The rate of price rise is expected to advance further after two weeks, when the June 5 increase in prices of petrol, diesel and cooking gas would be taken into account.
During the week ending May 24, non-food articles, raw rubber, raw cotton and groundnut seeds became expensive by 1-2 per cent.
Finance Minister P Chidambaram said inflation was a problem, but with people's support price stability could be ensured.
Cereal prices went up by 0.5 per cent, while fruit and vegetable prices declined by about one per cent.
Despite fiscal measures taken by the government, prices of imported edible oil surged by 6 per cent.
Wholesale prices-based inflation stood at 5.15 per cent a year ago. The rate of price rise is expected to advance further after two weeks, when the June 5 increase in prices of petrol, diesel and cooking gas would be taken into account.
During the week ending May 24, non-food articles, raw rubber, raw cotton and groundnut seeds became expensive by 1-2 per cent.
Finance Minister P Chidambaram said inflation was a problem, but with people's support price stability could be ensured.
Cereal prices went up by 0.5 per cent, while fruit and vegetable prices declined by about one per cent.
Despite fiscal measures taken by the government, prices of imported edible oil surged by 6 per cent.
Fuel price hike a step in right direction: RBI chief
The Reserve Bank has said the increase in global crude prices was more than what was anticipated, and described the hike in retail fuel prices as a step in the right direction.
"The government's announcement (of hike in petroleum products) involves some pass-through and some burden sharing. It is a very, very positive step in the right direction," he told reporters here last evening.
"Our overall assessment is that we must recognise that there are three extraordinary factors in the global situation that have converged at the same time. These relate to food, financial markets and fuel," Reddy said.
Asked whether the oil bonds would be given Statutory Liquidity Ratio (SLR) status, the RBI chief said: "We in RBI would like to maintain the integrity of the SLR regime." Pointing out that the uncertainty in the global oil scenario was not entirely unexpected, he said: "Actually, increase in oil prices has been more than what was anticipated, though we have factored in the possibility of high volatility in oil prices."
Replying to a question on global developments, he said "Currently, the global situation is quite extraordinary. As mentioned in the monetary review policy, we in the RBI are carefully monitoring the global and domestic developments with regard to growth, inflation and financial markets."
"The government's announcement (of hike in petroleum products) involves some pass-through and some burden sharing. It is a very, very positive step in the right direction," he told reporters here last evening.
"Our overall assessment is that we must recognise that there are three extraordinary factors in the global situation that have converged at the same time. These relate to food, financial markets and fuel," Reddy said.
Asked whether the oil bonds would be given Statutory Liquidity Ratio (SLR) status, the RBI chief said: "We in RBI would like to maintain the integrity of the SLR regime." Pointing out that the uncertainty in the global oil scenario was not entirely unexpected, he said: "Actually, increase in oil prices has been more than what was anticipated, though we have factored in the possibility of high volatility in oil prices."
Replying to a question on global developments, he said "Currently, the global situation is quite extraordinary. As mentioned in the monetary review policy, we in the RBI are carefully monitoring the global and domestic developments with regard to growth, inflation and financial markets."
Tata to drive Jaguar into India
After completing the acquisition of Jaguar and Land Rover from Ford for $2.3 billion, Tata Motors said on Friday it is exploring the possibility of bringing the two British marquees to India.
"Like Russia and China, JLR would be exploring the Indian market also. A team will be coming to India to study the market," Tata Motors Managing Director Ravi Kant told analysts in a conference call.
He, however, said the company was not expecting big numbers from the two brands in India.
"As these are high priced products, we should not be putting big numbers. The market is developing and other high priced products like Mercedes and BMW are also doing well in India," Kant said.
Asked if JLR would be adding additional capacity in view of new models XK, XF from Jaguar and other products from Land Rover being in the pipeline, and whether it plans to enter new markets, Jaguar Land Rover CEO David Smith replied in the negative.
"Our capacity has been realigned but we do not expect additional capacity requirement," he said.
Smith also said during the transition period, Ford Credit would continue to support vehicle and dealership financing. "But we are also working on the replacement plans."
On the imminent launch of Nano and the possibility of Tata looking to synergise JLR's distribution network in overseas market, Kant said: "Jaguar and Land Rover are premium products and Nano is at the other end of the spectrum. We have no plans to use JLR network."
On June 2, Tata Motors announced completion of acquisition of the two premium brands in an all cash deal worth $2.3 billion and appointment of David Smith chief executive officer of the brands.
Ford and Tata had entered into a definitive agreement for the deal in March this year.
The purchase consideration included the ownership of Jaguar and Land Rover or perpetual royalty-free licences of all necessary Intellectual Property Rights, manufacturing plants, two advanced design centres in the UK, and worldwide network of national sales companies.
Tata Motors had recently announced a Rs 100-billion capex plan over the next three years, which would include launching 100 new products or variants, streamlining of existing production facilities and setting up four new greenfield units.
"Like Russia and China, JLR would be exploring the Indian market also. A team will be coming to India to study the market," Tata Motors Managing Director Ravi Kant told analysts in a conference call.
He, however, said the company was not expecting big numbers from the two brands in India.
"As these are high priced products, we should not be putting big numbers. The market is developing and other high priced products like Mercedes and BMW are also doing well in India," Kant said.
Asked if JLR would be adding additional capacity in view of new models XK, XF from Jaguar and other products from Land Rover being in the pipeline, and whether it plans to enter new markets, Jaguar Land Rover CEO David Smith replied in the negative.
"Our capacity has been realigned but we do not expect additional capacity requirement," he said.
Smith also said during the transition period, Ford Credit would continue to support vehicle and dealership financing. "But we are also working on the replacement plans."
On the imminent launch of Nano and the possibility of Tata looking to synergise JLR's distribution network in overseas market, Kant said: "Jaguar and Land Rover are premium products and Nano is at the other end of the spectrum. We have no plans to use JLR network."
On June 2, Tata Motors announced completion of acquisition of the two premium brands in an all cash deal worth $2.3 billion and appointment of David Smith chief executive officer of the brands.
Ford and Tata had entered into a definitive agreement for the deal in March this year.
The purchase consideration included the ownership of Jaguar and Land Rover or perpetual royalty-free licences of all necessary Intellectual Property Rights, manufacturing plants, two advanced design centres in the UK, and worldwide network of national sales companies.
Tata Motors had recently announced a Rs 100-billion capex plan over the next three years, which would include launching 100 new products or variants, streamlining of existing production facilities and setting up four new greenfield units.
UK mobile giant Orange halts expansion of Indian call centre
The new chief executive of British mobile giant Orange has halted the expansion of its offshore call centre partnerships in India, where it currently employs 1,500 people.
Tom Alexander, who announced a raft of plans for the company, said he could foresee a time when the company no longer used call centres outside Britain.
The company's strength in India has risen from 100 in 2005 to 1,500 now, but is unlikely to increase.
Apart from the limiting plans for India, Alexander announced that the company is cutting 450 management and administrative jobs and will open 40 more shops as part of the major shake-up.
Alexander told newspersons: "We're proposing to change the shape of the organisation and the way the business works to serve the 21st Century customer.
"These changes are designed to stop duplication within our organisation, and to ensure we are agile, and able to deliver and react quickly to customers' needs.
"And they'll also make staff more accountable while generating greater financial and operational efficiencies".
Orange has 15.8 million mobile customers and 1.1 million broadband users in the UK.
Tom Alexander, who announced a raft of plans for the company, said he could foresee a time when the company no longer used call centres outside Britain.
The company's strength in India has risen from 100 in 2005 to 1,500 now, but is unlikely to increase.
Apart from the limiting plans for India, Alexander announced that the company is cutting 450 management and administrative jobs and will open 40 more shops as part of the major shake-up.
Alexander told newspersons: "We're proposing to change the shape of the organisation and the way the business works to serve the 21st Century customer.
"These changes are designed to stop duplication within our organisation, and to ensure we are agile, and able to deliver and react quickly to customers' needs.
"And they'll also make staff more accountable while generating greater financial and operational efficiencies".
Orange has 15.8 million mobile customers and 1.1 million broadband users in the UK.
Growth can`t be expressed in just numerical terms
We in the Bharatiya Janata Party, or in the Jana Sangh earlier, never had any doubt about India's development potential, nor were we ever opposed to the steps needed to unleash it. Indeed, I am proud of the fact that ours is the only party that consistently raised its voice against the growth-stifling licence-quota-permit raj, which the Congress had established under the influence of the Communist system in the erstwhile Soviet Union. It was not ideologically fashionable and acceptable those days to speak in favour of the private sector. The Communists, in particular, used to hurl all kinds of epithets at us, drawn from their rich vocabulary of demonology. However, history has vindicated us against the Communists, in respect of both our economic thinking as well as our advocacy for democracy.
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Let me add here that ours was also the only party that spoke, even in 1960s and 1970s, in favour of Indian companies emerging as successful multinationals. We had faith in the potential of our native companies, and it too has been vindicated in the spectacular manner in which Indian business houses are expanding their footprint internationally.
If the people give the BJP and the NDA another mandate to form the government at the Centre, I assure you that we will be even more pro-business, pro-growth and pro-India. Our goal will be to achieve double-digit GDP growth rate on a sustainable basis.
Let me, however, add a caveat here. India's growth objectives cannot be presented in abstract numerical terms - 8 per cent, 9 per cent or 10 per cent and more. For growth to be meaningful, it must change the lives of the vast majority of our ordinary people, both in rural and urban areas. For growth to be meaningful, it must be equitable, both geographically and socially.
Has India achieved this type of economic growth, which is necessary and conducive to development in the real sense of the term? Certainly not. Shri Bimal Jalan, former governor of the Reserve Bank of India, has remarked recently that the earnings of 20 richest Indians is more than that of 30 crore poorest Indians. Therefore, it seems to me that just as India's economic growth was earlier heavily influenced by the Soviet model, now it has swung to the other end of the pendulum by imitating the western model. India's current problems cannot be solved, and future needs cannot be fulfilled, by following yet another alien model.
I must point out here that just as my party was against excessive state control of the economy, it was also opposed to the idea of the state having no role in the economic life of the nation. In other words, we have never favoured free enterprise, trickle-down theory, etc. The democratic state has a definite and inescapable duty to orient economic growth towards desirable social ends - what in the Indian ethos is termed as Bahujan Hitaya, Bahujan Sukhaya (for welfare and happiness of the masses). The concept of Antyodaya (development of the 'last man' in society) has been extolled by both Mahatma Gandhi and Pandit Deendayal Upadhyaya.
Indeed, economic growth should not only benefit every individual and every section in society, but it should also be protective of the environment. This too is an integral part of the Indian outlook towards the relationship between man and nature. In recent decades, concern for environmental degradation has grown all over the world. And so is the awareness that the western model of development is not quite environment-friendly.
This being the case, I am more convinced than ever before that we in India have to evolve an Indian model of development that is in alignment with India's needs, is guided by the Indian outlook towards life, and relies on the full participation of Indians themselves. Haven't many countries around the world been trying to evolve their own model of development, based on their specific conditions, constraints, resources and cultures? I can cite the example of China, Singapore, Malaysia, Turkey, Russia and several others.
Time has come for all the key players who are associated with India's economic growth to evolve a common approach towards how to achieve accelerated growth with the primary objective of poverty eradication.
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Let me add here that ours was also the only party that spoke, even in 1960s and 1970s, in favour of Indian companies emerging as successful multinationals. We had faith in the potential of our native companies, and it too has been vindicated in the spectacular manner in which Indian business houses are expanding their footprint internationally.
If the people give the BJP and the NDA another mandate to form the government at the Centre, I assure you that we will be even more pro-business, pro-growth and pro-India. Our goal will be to achieve double-digit GDP growth rate on a sustainable basis.
Let me, however, add a caveat here. India's growth objectives cannot be presented in abstract numerical terms - 8 per cent, 9 per cent or 10 per cent and more. For growth to be meaningful, it must change the lives of the vast majority of our ordinary people, both in rural and urban areas. For growth to be meaningful, it must be equitable, both geographically and socially.
Has India achieved this type of economic growth, which is necessary and conducive to development in the real sense of the term? Certainly not. Shri Bimal Jalan, former governor of the Reserve Bank of India, has remarked recently that the earnings of 20 richest Indians is more than that of 30 crore poorest Indians. Therefore, it seems to me that just as India's economic growth was earlier heavily influenced by the Soviet model, now it has swung to the other end of the pendulum by imitating the western model. India's current problems cannot be solved, and future needs cannot be fulfilled, by following yet another alien model.
I must point out here that just as my party was against excessive state control of the economy, it was also opposed to the idea of the state having no role in the economic life of the nation. In other words, we have never favoured free enterprise, trickle-down theory, etc. The democratic state has a definite and inescapable duty to orient economic growth towards desirable social ends - what in the Indian ethos is termed as Bahujan Hitaya, Bahujan Sukhaya (for welfare and happiness of the masses). The concept of Antyodaya (development of the 'last man' in society) has been extolled by both Mahatma Gandhi and Pandit Deendayal Upadhyaya.
Indeed, economic growth should not only benefit every individual and every section in society, but it should also be protective of the environment. This too is an integral part of the Indian outlook towards the relationship between man and nature. In recent decades, concern for environmental degradation has grown all over the world. And so is the awareness that the western model of development is not quite environment-friendly.
This being the case, I am more convinced than ever before that we in India have to evolve an Indian model of development that is in alignment with India's needs, is guided by the Indian outlook towards life, and relies on the full participation of Indians themselves. Haven't many countries around the world been trying to evolve their own model of development, based on their specific conditions, constraints, resources and cultures? I can cite the example of China, Singapore, Malaysia, Turkey, Russia and several others.
Time has come for all the key players who are associated with India's economic growth to evolve a common approach towards how to achieve accelerated growth with the primary objective of poverty eradication.
Dell to invest more in India
World’s No 2 personal computer maker Dell said it would invest more in India in the coming years to commensurate with the growth of its products here, adding it expects strong demands in this part of the world to continue.
Micheal Dell, CEO of the company said this amidst the company revenue from outside the US during the first quarter surpassing the same from the US for the first time and Brazil, Russia, India and China leading the accelerated growth in emerging countries with 73 per cent increase in shipments and 58 per cent rise in revenue that accounted for almost 9 per cent of Dell's total revenue.
"Indian market is growing; our investment in India grew close to 100 per cent. We expect to keep investing in India. We have extensive activity here-- software development, manufacturing, IT growth.
"For the last 7-8 years, our business and workforce in India grew tremendously. We expect the growth to continue so also the investment to commensurate with the growth," Dell told the visiting Asia Pacific media here.
He did not give any specific figures on the investment or expected growth numbers. Even as Dell is cutting down workforce globally on its path to post higher profit, the company is unlikely to undertake such measures in India and China where it is seeing strong growth to boost its topline.
Dell, which lost the number one PC maker slot to arch-rival HP last year, is focusing on the markets like China and India to drive the growth. The company expects out of the next billion going to be connected to the web, most of it would come from Asia. Therefore the demand (for PCs) is going to increase in Asia.
Micheal Dell, CEO of the company said this amidst the company revenue from outside the US during the first quarter surpassing the same from the US for the first time and Brazil, Russia, India and China leading the accelerated growth in emerging countries with 73 per cent increase in shipments and 58 per cent rise in revenue that accounted for almost 9 per cent of Dell's total revenue.
"Indian market is growing; our investment in India grew close to 100 per cent. We expect to keep investing in India. We have extensive activity here-- software development, manufacturing, IT growth.
"For the last 7-8 years, our business and workforce in India grew tremendously. We expect the growth to continue so also the investment to commensurate with the growth," Dell told the visiting Asia Pacific media here.
He did not give any specific figures on the investment or expected growth numbers. Even as Dell is cutting down workforce globally on its path to post higher profit, the company is unlikely to undertake such measures in India and China where it is seeing strong growth to boost its topline.
Dell, which lost the number one PC maker slot to arch-rival HP last year, is focusing on the markets like China and India to drive the growth. The company expects out of the next billion going to be connected to the web, most of it would come from Asia. Therefore the demand (for PCs) is going to increase in Asia.
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