Inflation To Touch 10 Percent in March (21-Feb-2010)
Assocham stated that due to supply constraints in food items along with lower base effect, inflation is expected to move into double-digits in March, touching10%.
Inflation rose to 8.56% in January, the highest in over 13 months and is expected is expected to decline to 5% in September.
It said the average inflation in 2010-11 would be 5.5%.
However, due to lower base effect with supply constraints in food items in relation to lower rainfall during the last monsoon, inflation is currently increasing.
Declining rainfalls have caused about 18% shortfall in food grains production in India.
Due to the rise in social sector spending, there is an increase in income levels of rural population and it has enhanced rural demand and rise in the salaries of government staff stimulated the demand in urban areas.
Meanwhile, Assocham stated that lower base effect would disappear by the end March 2010.
It said that the Rabi crop sowing is providing food production, liquidity in the economy was also under "control" and more importantly rising rupee would encourage cheaper imports to curb inflation during the ensuing months.
The chamber expects the rupee to appreciate around 42-43 against the US dollar by the end of 2010.
On the other hand, it expects capacity expansion to take place during the ensuing quarters which will deal with supply constraints in the economy.
Previously, it was said that due to the global crisis, corporate India wants stimulus package given in the form of excise duty cuts by the government to industry.
This is in order to continue into the next fiscal stated a survey by Assocham while it aslos said that majority of India Inc seeks extension of existing excise sops for the next fiscal.
Around 400 CEOs were survey on industry expectations from the Union Budget 2010-11 which is set to be unveiled on February 26.
Additionally, it was said that Assocham expects WPI inflation to rise to double digits by this fiscal-end, much higher than the RBI''s projections of 8.5% due to rising prices of steel, cement and coal due to short supply.
Until now, rise in food prices have fuelled inflation, but it is being spread to manufactured items which would raise the overall rate of price rise also.
The study attributes rising prices of cement, steel and coal to the widening output gap between overall industrial production and 6 core infrastructure industries.
Moreover, it was said that Assocham asked the Finance Ministry to allow pension funds to invest 10-15% of their corpus in infrastructure projects.
This way the government can meet the shortage of long-term funds for infrastructure projects.
Moreover, in order to monitor timely execution of projects, the government should put in place a watchdog as there are delays in implementation valued about Rs 2 lakh crore to the economy in the past decade stated Assocham.
It stated that due to variety of reasons, including delays in required clearances from Public Investment Board (PIB), over 60% of projects to be executed by profit-making PSUs are never completed on schedule.
As much as 70% of companies surveyed by the industry body Assocham prefer to work with NGOs to implement their corporate social responsibility (CSR) initiatives.
Around 67% of domestic corporates have chosen NGOs to partner closely for discharging their CSR initiatives, while 58% of them preferred government departments.
Assocham suggested the government to set up a coal trading company to import the dry fuel to bridge the demand-supply gap.
It said that the entity could be found on the lines of public sector MMTC and it should sell coal to user industries in India through a long-term agreement.
The proposed company should also set up huge regional coal dumps located strategically to optimize procurement of both indigenous and imported coal with appropriate connectivity to mines and ports.
Further, Assocham president Swati Piramal stated that the coal movement to and from the regional coal dumps could be done through a dedicated railway network, owned and managed by the suggested company.
The Associated Chambers of Commerce and Industry of India is the umbrella body of chambers of commerce in India. Established in 1920, it currently has a membership of over 100,000 companies across India. Further, the organization represents the interests of trade and commerce in India, interacting with the Government of India on policy issues and liaisoning with their international counterparts to promote trade between India and other nations.
Top News Today
 Godrej Properties, Mumbai based real estate developer launched its new residential project Godrej Alpine in Mangalore. It aims to complete 499-apartment Godrej Alpine for occupation in 36 months. Godrej
 Mahindra & Mahindra, auto major has stopped the second phase of booking for its latest sports utility vehicle XUV500. It has received over 25,000 orders in a period of 10 days from January 25 to February
 Reliance Power, the Anil Ambani group company's 2,400-MW Samalkot plant in Andhra Pradesh is likely to be ready for electricity generation this fiscal. It will install six gas turbines at the plant having
|
International Stock News
 The US markets rose on Monday, sending the Dow industrials to their highest close since 2008, as Greece's government made progress on measures to secure international aid. Also, a Labor Department report
 The US markets made a mix closing on Thursday, as a drop in jobless claims fueled optimism about the economy and investors looked to the next day's employment report as the next indicator of the economic
 The US markets made a mixed closing on Tuesday, with the indices mostly slipping after US economic data failed to live up to expectation. The reports showed that American consumer confidence trailed estimates
|
|
|