Growth prospects better; rate cut to depend on inflation: PMEAC

After witnessing low growth from July to September, factory output, as measured by the Index of Industrial Production (IIP), slumped 4.74% in October. The revival in IIP growth at 5.9% in November is likely to boost the industry sentiment

New Delhi: Expressing hope that industrial growth will further pick up in the coming months, the prime minister’s economic advisory panel today said rate cut by RBI will depend upon softening of inflation, reports PTI.

“I think the industrial production will pick up in the second half of the year ... The indications as thrown up by the data for November may continue into the rest of the months of the current fiscal,” the Prime Minister’s Economic Advisory Council (PMEAC) chief C Rangarajan told reporters.

After witnessing low growth from July to September, factory output, as measured by the Index of Industrial Production (IIP), slumped 4.74% in October. The revival in IIP growth at 5.9% in November is likely to boost the industry sentiment.

As regards the possibility of Reserve Bank of India (RBI) reducing rates, Mr Rangarajan said, “I would say that the action of the RBI will largely depend upon how the inflation numbers turn out to be for the month of December. Certainly, a strong action on the part of RBI in reversing the policy will be called for only if inflation shows very strong signs of decline”.

The RBI, which has adopted a tight monetary stance since March 2010, is scheduled to announce its policy review on 24th January.

Food prices fell for the second consecutive week as food inflation remained in the negative zone at (-)2.90 per cent for the week ended 31 December 2011. The figures of overall inflation for December will be announced on Monday.

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HDFC posts net profit of Rs 981.25 crore for Dec quarter

The net interest margin (NIM) of the company stood at 4.3% at the end of 31 December 2011 and gross non-performing loans stood at Rs1,109 crore, or 0.82%, of total advances during the quarter

Mumbai: Mortgage lender Housing Development Finance Corporation (HDFC) today posted a net profit of Rs981.25 crore for the quarter ended December 2011, on the back of higher loan approvals and disbursements. The company had reported a net profit of Rs890.88 crore for the October-December quarter of 2010-11, reports PTI.

The company’s total income stood at Rs 4,472.51 crore during the quarter, up from Rs3,321.04 crore in the corresponding quarter last fiscal, HDFC said in a filing to the BSE.

As of 31 December 2011, the company’s loan book stood at Rs1.32 lakh crore compared to Rs1.09 lakh crore in the year-ago period, it said.

Net profit of the company during the April-December period stood at Rs2,796.48 crore compared to Rs2,393.01 crore in the previous fiscal.

Total income during the nine-month period stood at Rs12,463.25 crore, compared to Rs9,093.21 crore in the corresponding year-ago period.

The figures are not comparable as the company changed its accounting policy for Cross Currency Interest Rate Swaps.

These swaps, which were earlier recorded at fair value, are now being recorded at a higher liability by marking only the foreign currency component to spot rates and excluding the benefit of interest rate differentials, HDFC said.

“... Had the corporation followed the earlier method of accounting... net profit for the nine months ended 31 December 2011, would have been lower by Rs54 crore,” it said.

The net interest margin (NIM) of the company stood at 4.3% at the end of 31 December 2011.

Gross non-performing loans stood at Rs1,109 crore, or 0.82%, of total advances during the quarter.

Shares of the company closed 0.90% higher at Rs687.50 apiece on the BSE.

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Klein: Economists scoff at Obama, Romney myths

Mitt Romney’s campaign would have you believe that every job lost over the past three years is president Barack Obama’s fault.

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