India-US CEOs suggest $10 billion infrastructure fund for India

With US President Barack Obama’s India visit in November offering an opportunity to intensify their economic engagement, captains of industry have suggested creation of a $10 billion debt fund for development of infrastructure in India. Among other “interesting and ambitious ideas” recommended by the India-US CEOs’ Forum Tuesday were “collaboration under the National Solar Mission of India, a long term initiative on diabetes research and treatment, linkages between educational institutions and joint research in clean energy, including bio-fuels.” To follow up on the ideas, Finance Minister Pranab Mukherjee, who led the high-level official team, announced that a committee headed by Planning Commission Deputy Chairman Montek Singh Ahluwalia would be formed in India to carry forward the ideas with implementable action plans, the Indian embassy said. The CEOs met in a smaller format, before interacting with the government representatives. They presented recommendations to both governments in four core areas: (i) Infrastructure; (ii) Clean Energy; (iii) Education and (iv) e-Health/Biotechnology. The forum also discussed impediments and some breakthrough long term ideas, the Indian embassy said noting “CEOs from both sides and representatives of the two Governments agreed that there was tremendous potential and synergy in the economic partnership between India and the US.” “The forthcoming visit of President Barack Obama to India would provide an opportunity to intensify the economic engagement and translate some of these ideas into deliverables,” it said. Reconstituted last year with 12 CEOs from India and the USA nominated by Prime Minister Manmohan Manmohan Singh and President Barack Obama respectively, the forum is co-chaired by Ratan Tata, Chairman, Tata Sons and Dave Cote, CEO of Honeywell Corp. The forum first met in November last year on the sidelines of Manmohan Singh’s Singh’s visit to Washington. The forum was attended by eight CEOs from each side at its second meeting Tuesday. There was very high level government participation from both sides reflecting the importance attached by both Governments. Besides Mukherjee and Ahluwalia, Commerce and Industry Minister Anand Sharma also attended the forum from the Indian government side. From the US side, there were six secretary level representatives who included Secretary of State Hillary Clinton, Treasury Secretary Timothy Geithner, Commerce Secretary Gary Locke, US Trade Representative Ron Kirk, Director of the National Economic Council Larry Summers and Deputy Secretary of State Jim Steinberg.

World Bank loan to help India battle natural disasters

The World Bank has approved a $255 million assistance to India to help mitigate the risks and vulnerability of people to natural disasters. The first phase of India’s National Cyclone Risk Mitigation Programme is financed through a credit from the International Development Association (IDA), the World Bank’s concessionary lending arm, and has 35 years to maturity and a 10-year grace period. It is complemented with $64 million from the Indian government’s budget, the Bank announced Tuesday. The aim is to improve early warning and communication systems; enhance capacity of local communities to respond to disasters; improve access to emergency shelters, evacuation, and protection against cyclone related hazards such as wind storms, flooding and storm surge in high risk areas; and strengthen disaster risk management capacities at the central, state and local levels. The programme is expected to include at least three phases. Phase I includes the states of Orissa and Andhra Pradesh. Phase II will be open to the remaining high risk states or other coastal states that are ready to join. Rest of the coastal states will be covered under phase III. Each of the new phases will be appraised and approved separately to confirm the implementation readiness. This phased approach will help incorporate lessons from the earlier phases as well as include new ideas and advancements in technology in the management of risks, the Bank said. “As climate change and variability become more pronounced, hazard events are set to grow, both in terms of frequency and intensity. Globally, the understanding of the role of disaster risk mitigation and preparedness initiatives in reducing the overall impacts of a disaster, has grown,” said N.V.V. Raghava, World Bank Senior Infrastructure Specialist and Project Team Leader. India is highly vulnerable to natural hazards, particularly earthquakes, floods, droughts, cyclones and landslides, the Bank said. Studies indicate that natural disaster losses equate up to 2 percent of India’s GDP and up to 12 percent of federal government revenues. About 5,700 kilometres of India’s coastline is exposed to severe cyclones and approximately 40 percent of India’s population lives within 100 km of the coastline. Analysed data for the period 1980-2000 indicates that on an average, annually, 370 million people are exposed to cyclones in India.

Indian biotech industry grew 17 percent in 2009-10: Survey

India’s bio-tech industry clocked a 17 percent growth with revenues of Rs.137 billion ($3 billion) in the 2009-10 financial year over the previous fiscal, according to a survey. Bio-pharma was the biggest contributor generating 60 percent of the industry’s growth at Rs.8,829 crore, followed by bio-services at Rs.2,639 crore and bio-agri at Rs.1,936 crore, said the survey by the association of biotechnology led enterprises (ABLE) and the BioSpectrum journal. The industry witnessed a three-fold growth in the last five years. Companies in western India outperformed those in other parts of the country, logging revenues worth Rs.6,631 crore — constituting 46 percent of the total biotech market. While southern India made up for 39 percent of the overall revenues at Rs.5,537 crore, the northern bio-cluster contributed just a seventh of the revenues at Rs.2,030 crore, added the report. Eastern India did not add any significant revenue to the country’s overall biotech pie, the report said. Banglore-based Biocon regained its top slot with earnings at Rs.11.8 billion, followed by Pune’s Serum Institute of India at Rs.8.5 billion, while the third top grosser was Panacea Biotec at 7 billion. “Overall, there is a cautious optimism within the biotech industry and the recent government efforts to boost the infrastructure and support for various industry initiatives will bring succour for the industry,” said Narayan Suresh, group editor of BioSpectrum. According to the study, the industry is maturing and its annual growth will be around 20 percent in the near future.

Prices of consumer goods to go up: Assocham

Prices of consumers goods are likely to rise further over the next six months, the Associated Chamber of Commerce and Industry of India (ASSOCHAM) said Monday, basing its prediction on a country-wide survey. Over 80 percent of the business leaders, who participated in the survey, expected higher prices for their products, including consumer durables, consumer non-durables, intermediate goods, capital goods and services and infrastructure, for over next six months, said a Assocham spokesman. A total of 226 business leaders, representing firms of various sizes across diverse sectors, across the country participated in the survey. He said while private sectors firms remained upbeat about the price rise of their products, the public sector firms were not so optimistic about the same in near future. “If we distinguish the responses between MSME firms and large size classes, the former have expressed greater confidence about price rise in the short-run,” he said. “On the other hand, public sector respondents as compared to private sector firms have expressed weak confidence about short-term price realization for their output.” “The outcomes indicate no let up in inflationary pressure during the first half of the present fiscal,” he added. Assocham said production of consumer durables, consumer non-durables, intermediate goods and infrastructure is estimated to go up strongly over the next six-month period. On the other hand, services and capital goods sectors have indicated relatively low growth in output, it added. Assocham said the main objective of the survey was to understand the changing business trends and perceptions in the country and raise the concerns of the business sector emphatically with the policy makers.

SAIL plans 60 mn tonnes production by 2020

Steel Authority of India Ltd (SAIL), India’s largest steel maker, will raise its production to 60 million tonnes (MT) by 2020 as part of its plans to become a “global player”, the company chairman said Monday. “SAIL is working on a massive expansion project and has set a target to raise production capacity up to 60 MT by 2020, when the country’s total steel output will reach 180 MT,” C.S. Verma, who recently took over as SAIL chairman, told reporters at Bhilai. He said his priority was to make SAIL a “global player”. SAIL has presently just 19-20 percent share of the country’s total steel production but by 2020, “we plan to have a one-third of India’s total steel output”, he said. Verma also spelt out the company’s plans to increase the share of value-added products in total saleable steel production from the present 37-38 percent to a much higher proportion. Speaking on cost-competitiveness, he said: “Costs of raw material, particularly that of coking coal, constitutes as much as 40-45 percent of total cost of production. It is, therefore, important that the company has firm plans in place for ensuring future raw material security.” SAIL is actively considering procuring coking coal blocks abroad and an action plan is already worked out, he said. Verma said that there was tremendous potential for rolling out new product grades for import substitution in the power, nuclear, defence and space sectors and SAIL can develop and supply required grade of steel for super power plants and nuclear installations that are presently being imported.

Amazon cuts price of Kindle e-book reader

Online retail giant Amazon.com has joined the price war of e-book readers, and has slashed the price of its popular Kindle reader by more than a quarter. The Kindle is available at a new price of $189, down from the previous $259, Xinhua reported citing a statement released by Amazon. Amazon’s move came hours after Barnes and Noble, the largest bookseller in the US, slashed the price of its 3G Nook e-book reader from $259 to $199. Barnes and Noble also introduced a Wi-Fi version of Nook which is priced at $149. Amazon said it will continue to offer free 3G connectivity for Kindle with no monthly fees or annual contracts. Amazon sells another e-book reader called Kindle DX, whose price has remained unchanged at $489 since it was unveiled in May 2009.

India targets double digit growth in 2012

India has set an ambitious target of making 2012 the year of double digit growth even as it grapples with the twin problems of mounting deficit and rising inflation.“India is back on a high growth trajectory,” Finance Minister Pranab Mukherjee said in a presentation here Monday to the Institute of International Finance, a global association created by 38 banks of leading industrialised countries in 1983 in response to the international debt crisis of the early 1980s. Mukherjee is here to lead a high-powered team of policymakers including Commerce Minister Anand Sharma and Planning Commission Deputy Chairman Montek Singh Ahluwalia at the India-US CEOs Forum Tuesday.He will also have a separate bilateral meeting with US Treasury Secretary Timothy Geithner Tuesday.Noting that India had not remained unaffected by the global financial crisis, Mukherjee said after four consecutive years of 9 percent plus growth, the Indian economy had slowed down to 6.7 percent in fiscal 2008-09. But it had bounced back to 7.4 percent growth in 2009-10 and was expected to register 8.5 percent in 2010-11, he said for once agreeing with the International Monetary Fund prediction of 8.8 percent growth.As two thirds of Indian exports went to developing countries, the Finance Minister said he had to concentrate on generating domestic demand to put the country back on the growth road after the global recession that hit advanced economies hard. While India was expected to register a growth of 9 percent in 2011-12, “My target is to make it a year of double digit growth,” he said.With the world back on the road to recovery thanks to stimulus and other measures agreed to by the group of 20 leading economies, the question was at what point of time should there be a total exit policy, Mukherjee said.His prescription made to the G-20 finance ministers ahead of this week’s Toronto summit was that all countries will not take fiscal consolidation at a time and this should be staggered, the minister said. India had to start the fiscal consolidation as fiscal deficit had risen from 3 percent to 6.8 percent in 2008-09, he said describing inflation as the second major challenge before the country.Noting that India would require a huge investment of about $600 billion in the next few years in the infrastructure sector, Mukherjee said the inflow of foreign direct investment had not been disturbed despite the financial crisis. “Confidence in the Indian economy and its potential is well recognised and our private sector is very vibrant and dynamic,” he said noting that the younger generation of the business leadership had no baggage of the past. “They have emerged as the global citizens and global players.”