Govt to decide sugar exports for 2011-12 after Diwali

Food minister KV Thomas, who briefed finance minister Pranab Mukherjee on sugar, among other issues, said: “There is a difference of 4 lakh tonnes between the estimates of food and agriculture ministries. We will get correct picture about sugar output after the festival season that is end-October”

New Delhi: The government on Tuesday said it will consider permitting sugar exports for the current marketing year, which started this month, only after the Diwali festival, reports PTI.

In the 2010-11 marketing year (October-September), the government had allowed exports of 2.6 million tonnes of sugar.

“We will take a call on sugar exports for the current marketing year after Diwali (which is on 26th October),” Food minister KV Thomas told PTI.

Exports will be allowed in phases and the quantity of outbound shipments will be decided after reconciling the production estimates for 2011-12, he said.

Mr Thomas, who briefed finance minister Pranab Mukherjee on sugar, among other issues, said: “There is a difference of 4 lakh tonnes between the estimates of food and agriculture ministries. We will get correct picture about sugar output after the festival season that is end-October.”

Last month, the food ministry had pegged sugar output at 24.6 million tonnes for the year from 24.3 million tonnes in 2010-11. The ministry’s estimates are, however, lower than the agriculture ministry's estimate of 25 million tonnes.

Cooperative sugar industry body National Federation of Cooperative Sugar Factories (NFCSF) had demanded that the government should allow four million tonnes of export in 2011-12 to help mills dispose of surplus production and arrest falling domestic prices.

Mr Thomas also said the availability of the sweetener for the current month is sufficient to meet the demand and the retail prices are ruling stable.

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Banks to get Rs6,000 crore more from home loans on rising rates

Crisil noted that the floating interest rate for home loan borrowers has increased by around 250 basis points (bps) since April 2010, due to continuous hike in key policy rates. This corresponds to an average rise of 15% in EMIs

Mumbai: Rising interest rates will push up the equated monthly instalments (EMIs) of home loan borrowers by Rs6,000 crore annually, reports PTI quoting leading research agency Crisil.

“Crisil estimates that rising interest rates would increase the EMIs of home loan borrowers by about Rs6,000 crore annually,” the rating agency said in a statement here.

Higher EMIs and a slowdown in economic growth would result in a rise in non-performing assets (NPAs) of financiers, while the teaser loan portfolio getting linked to the prevailing higher market rates in April 2012, would increase the profitability of financiers, it said.

Crisil noted that the floating interest rate for home loan borrowers has increased by around 250 basis points (bps) since April 2010, due to continuous hike in key policy rates. This corresponds to an average rise of 15% in EMIs.

The Reserve Bank of India (RBI) has increased its key policy rates by a record 12 times in the past 19 months to control inflation.

“As per our estimates, EMIs have increased for 40% of existing floating rate customers, while the remaining customers have chosen to increase their tenures or do a part payment. Customers paying higher EMIs face an estimated additional annual burden of around Rs3,500 crore,” it said.

Crisil said the higher rates have not yet affected customers who have opted for teaser loan schemes, as the rates are fixed for the initial two-three years.

It found that 25% of the housing loan portfolio of Rs5.10 lakh crore as of March 2011, comprises teaser loans.

“Once interest rates get reset to prevailing market rates (from April 2012), we estimate an additional EMI burden of Rs2,000-Rs2,500 crore annually on this account,” Crisil noted.

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Economy to grow by close to 8% this fiscal: PM

“The fundamentals of our economy remain strong. Despite the global slowdown, we will still achieve a growth rate of close to 8% this year,” prime minister Manmohan Singh said

New Delhi: Prime minister Manmohan Singh Tuesday said the country will achieve an economic growth rate of close to 8% in the current financial year but will have to deal with high inflation in the short-term, reports PTI.

“The fundamentals of our economy remain strong. Despite the global slowdown, we will still achieve a growth rate of close to 8% this year,” the prime minister said while addressing the Combined Commanders Conference of the Indian Armed Forces here.

The economic growth in April-June period slowed to 7.7%, the slowest in six quarters. The Reserve Bank of India (RBI) has already revised downwards its growth forecast for the country to 8% in 2011-12, from 8.5% GDP growth in the previous fiscal.

The central bank had also said that inflation would act as a dampener.

“Our short-term challenge is to bring down inflation, while in the long-term we have to make our growth process more inclusive, spur agricultural growth, expand the delivery of education, health and other services, protect our environment and improve our overall infrastructure,” Mr Singh said.

Headline inflation stood at a 13-month high of 9.78% in August. RBI has hiked its key policy rates 12 times since March 2010 to tame demand and curb inflation.

Referring to the issue of defence production, he said the private sector’s IT and knowledge skills should be utilised well for modernisation of the armed forces.

“We are among the world leaders in information technology and a knowledge-based economy. We have a vibrant private sector. It is necessary to put in place policies to promote a viable defence industry in the country using the large industrial and skill base that already exists...The Defence Production Policy announced this year is a step in the right direction,” he said.

He added that it should be a joint effort of armed forces, scientists and captains of Indian industry to ensure that the there is less dependency on external sources for equipment and technology.

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