Mumbai: The Reserve Bank of India (RBI) on Monday extended its special measures for easing the monetary supply till 28th January in view of a cash crunch due to a slew of public stake sales and brisk credit offtake during the festive season, reports PTI.
The special measures, which were announced when liquidity came under pressure due to the festive season and the Coal India initial public offer (IPO), were originally due to expire on 16th December, around the same time that corporates would pay their advance taxes, which will exert further pressure on the liquidity situation.
The RBI's special measures enable banks to avail 2% more funds through the liquidity adjustment facility (LAF), based on their deposits.
Scheduled commercial banks may avail of additional liquidity support under LAF to the extent of up to 2% of their net demand and time liabilities (NDTL) as on the reporting Friday of the second preceding fortnight, RBI said in a statement.
"For any shortfall in Statutory Liquidity Ratio (SLR) maintenance up to 28 January 2011, arising out of availment of this facility, banks may seek waiver of penal interest on a fortnightly basis, purely as an ad hoc, temporary measure," it said.
The liquidity support availed under this facility would, however, need to be reported on a daily basis, it said.
Besides, special LAF auctions will be conducted at 4.30 pm every day till 28 January 2011, it said.
The above measures are purely ad hoc, temporary and will be in force till 28 January 2011, it added.
Liquidity is likely to be tight in the coming weeks, as there are a slew of IPOs lined up and credit offtake is likely to pick up.
While manganese ore company MOIL's IPO is open for subscription, Shipping Corporation's FPO opens today.
Both IPOs are expected to raise around Rs1,200 crore each.
Around Rs22,000 crore has been mopped up from public offers of state-run companies so far this year.
The tight cash position in the system can be gauged from the fact that banks have borrowed over Rs1 lakh crore through the liquidity adjustment facility of the RBI since 8th November.
Analysts said liquidity pressure is likely to ease when the government enhances spending, based on second supplementary demands for grants.
The government has sought to enhance the spending target for the 2010-11 financial year to a gross Rs45,000 crore, implying a Rs20,000 crore additional net cash outgo compared to the original budget estimate.
After slipping back over the past couple of years, the tourism industry is seeing a turnaround with a significant growth in foreign tourist arrivals this year. And the industry is expecting it will get still better this season
The tourism industry is expected to bounce back this year, after slipping over the past few years on account of the terror attack focused on the Taj and Trident in Mumbai, the swine flu epidemic that has been brought under control and the global financial crisis that has abated.
The industry has witnessed sluggish growth over the past couple of years. Now experts are anticipating positive growth this year. The hospitality and tourism business is a key component of the Indian economy and also brings in valuable foreign exchange.
According to the Ministry of Tourism, foreign tourist arrivals in India for October 2010 was 4.87 lakh compared to 4.46 in October last year and 4.50 lakh in October 2008. This increase is significant as October is the beginning of the international tourist season in India.
Industry officials expect this to improve further following the economic recovery. Another important aspect, they say, is that global travellers are increasingly considering India as a 'must visit' destination, for both leisure and business.
Manoj Gurshahani, chairman, Travelmartin.com, said, "There is an absolute growth in the tourism sector. We are expecting 35-40% growth going forward. The sector is largely related to indicators such as the stock market and GDP and these have shown positive growth, hence we are seeing a boom in the sector."
"The number of foreign tourists coming is pretty decent. While the financial crisis lingers on in some countries like Ireland and Portugal, there has been a growth of foreign tourists coming from other countries. Besides domestic tourism is also showing positive growth," Mr Gurushahani said.
According to an ICRA rating service report on the Indian hotels industry, titled 'Slow but Steady Recovery Under Way', around 51 lakh foreign tourists visited India in 2009, a decline of 3.3% from the year before. But there has been a noticeable improvement in the current year. The report states that there has been a 9.7% increase in the arrivals of foreign tourists in the period January-August 2010 from that in the corresponding period last year.
ICRA sees this growing further with a greater pull from specific attractions like the cricket world cup and Formula One racing. Figures from the tourism department indicated a 5.1% increase in foreign tourist arrivals at Delhi airport during the Commonwealth Games from the corresponding period last year.
"We will certainly see growth. Those who have backlogged their holidays will definitely plan this time," said Nancy Castelino, vice-president (marketing), Mercury Travels. In fact, in the coming summer we expect much more inflow of foreign tourists from the US and Europe compared to last year. There is a lot of money in the market, the stock markets are doing well and the economies are on an uptrend. All these factors will accelerate the growth of the tourism sector in India."
Ms Castelino also sees a growth in outbound travel with more people willing to spend on leisure travel. "Outbound travel has never dipped, though there was some stagnation. But this time it is expected to show positive growth."
Karan Anand, head of relationships and supplier management at Cox & Kings, is excited that both inbound and outbound tourism is seeing rapid growth. "According to the Ministry of Tourism, the inbound figure for January to September 2010 stands at above 3.8 million, which is a growth of over 10% compared to the corresponding period last year. In 2009, domestic tourism touched 650 million journeys, compared to 563 million in 2008, a growth of 15.5%. Outbound tourism is expected to grow by 25% in 2010," Mr Anand said. "All this indicates that we are on a growth path this year and expected to do exceedingly well.''
Raise the banner for our foreign visitors-'Atithi Devo Bhava'! (Guest is God)
New Delhi: Driven by good performance of agriculture and manufacturing, the Indian economy grew by 8.9% in the second quarter of the current fiscal, up from 8.7% in the corresponding period a year ago, reports PTI.
The growth rate for the first quarter was revised upwards to 8.9% from 8.8% as estimated earlier. This took the overall economic expansion during the first half (April-September) to 8.9%, up from 7.5% in the corresponding period a year ago.
According to the data released by the government today, farm sector during the second quarter recorded a growth rate of 4.4%, up from 0.9% in the corresponding period a year ago.
The manufacturing sector during the same period recorded a growth rate of 9.8% as compared to 8.4% during the same period last year.
The growth rate in the second quarter exceeded economists’ expectation of up to 8.6% for the July-September quarter.
Although the government expects the growth to top 8.5% in the current fiscal, it may exceed the estimates if the present trend continues.