3G auctions to aid biggest India deficit cut in 19 years
Finance Minister Pranab Mukherjee said India’s auction of wireless air waves may pay for its biggest budget-deficit reduction in 19 years, as the government expects to earn at least 600 billion rupees ($13.3 billion) from the sale. Earnings from the auction may be “over and above” the budget estimates for the current year. Companies such as Vodafone and Bharti Airtel may pay 250 billion rupees more than the government earlier estimated for the right to provide high-speed mobile services. Higher revenue will help Mukherjee slash the budget shortfall to 5.5 percent of gross domestic product in the current financial year.
Consumer goods & capital goods drive double-digit growth in FY 2010
The Index of Industrial Production (IIP) stood at 13.5% Y-o-Y in March – growing lower than expectations (consensus: 15.1%) – but, holding on to momentum. The number comes in against a growth of 15.1% in the previous month and 0.3% a year ago. Growth in March, however, pulls up FY10 growth further to a robust 10.4% Y-o-Y (against 2.8% in FY09); most of the growth being led primarily by strong uptick in consumer durables, capital goods and intermediate goods. With the recent surge in consumer prices, non-durable segment has suffered, as there is a high degree of correlation between the two.
Indian rupee completes weekly gain as debt fund to spur inflows
Indians rupee completed the best week in more than a month after a top government adviser said the nation plans to set up an $11 billion fund to boost investment in infrastructure and spur economic growth; FII inflows also helped the INR move higher in a week of turmoil for the Euro.The rupee climbed 0.6 percent this week to 45.22 per dollar. The central bank forecasts gross domestic product will expand at least 8 percent in the financial year that began April 1, compared with estimated growth of 7.2 percent in the previous fiscal year.
India plans $11 billion road fund to narrow China gap
India, ranked below war-ravaged Ivory Coast for the quality of its infrastructure, is planning to set up a 500 billion rupee ($11 billion) debt fund to build ports, roads and bridges needed to drive economic growth. India doubled its target for infrastructure spending to $1 trillion in the five years starting 2012 to narrow the gap with China, the world’s fastest growing major economy. The fund is the latest attempt by the government to raise capital from overseas after a $5 billion fund planned in 2007 was shelved. India spent 6.5 percent of its gross domestic product in 2009 on infrastructure, compared to about 11 percent by China.
Gold May Extend Advance to Record $1,500 an Ounce
Gold may extend gains to a record $1,500 an ounce this year as investors seek an alternative to currencies amid the European sovereign-debt crisis. Gold, heading for an unprecedented 10th annual gain, climbed to an all-time high yesterday on speculation an almost $1 trillion loan package for indebted European nations will devalue the euro. Prices have climbed 13 percent this year.
Source: Sundaram BNP Paribas Mutual Fund
