RBI to hold pre-policy consultations with finance ministry

Experts say the RBI would hike its key policy rates by at least 25 basis points on 3rd May to contain rising inflation. The central bank will also be required to take initiatives to promote growth

New Delhi: Amid concerns of rising inflation and slowdown of industrial growth, the Reserve Bank of India (RBI) will hold consultations tomorrow with the government in the run-up to its annual credit policy to be announced next week, reports PTI.

RBI governor D Subbarao is expected here in the capital tomorrow to hold pre-policy consultations with finance ministry officials.

"We will talk with the governor of the RBI before he announces the monetary policy. We will have a discussion. I think he is coming tomorrow," finance minister Pranab Mukherjee told reporters here.

The RBI meeting on 3rd May, which will fix the policy for 2011-12, comes at a time when the industrial growth has started showing signs of lagging and inflationary pressure continues to pose a threat to the economy.

Experts say the RBI would hike its key policy rates by at least 25 basis points on 3rd May to contain rising inflation.

While trying to check prices, the RBI will also be required to take initiatives to promote growth.

The central bank has already increased the short-term lending (repo) and borrowing (reverse repo) rates eight times since March 2010 to suck out excess liquidity from the system and tame demand as a means of fighting inflation.

Headline inflation has remained above 8% since January 2010. It clocked 8.98% in March this year. At the same time, food inflation has also been running high and close to double-digits, despite government's projection of a record harvest of wheat and pulses.

To add on to troubles, core inflation, which does not factor in rise in food prices, have also started shooting up and stood at over 7% in March.

While inflation has been at a sustained level, manufacturing growth has slowed down in the recent months.

Factory output, as measured by the Index of Industrial Production (IIP) slowed to 3.6% in February 2011, compared to a 15.1% expansion in the year-ago period.

Industrial output growth during the April-February period of 2010-11 stood at 7.8% vis-à-vis the corresponding previous period. In contrast, industrial output had expanded by 10% year-on-year in April 2009-February 2010.

In the pre-budget Economic Survey released in February, the government said it expects gross domestic product (GDP) growth to be 9% this fiscal.

However, in recent weeks many global banking and brokerage majors have exuded scepticism about the number due to rising commodity prices and falling investments.

Earlier this month, the Asian Development Bank revised its India growth forecast for 2011-12 to 8.2% from the earlier estimate of 8.7%.

According to Citigroup, India's economic growth is likely to be only around 8%, while according to Goldman Sachs it would be 7.8%.

The International Monetary Fund said that India's real GDP, which factors in value of output economy adjusted for price changes as in inflation, is expected to grow by 8.25% in 2011 calendar year.

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Exide Industries Q4 net up 22% at Rs164 crore

Exide Industries posted a 22% jump in its net profit to Rs164 crore in the fourth quarter ended 31 March 2011 compared to the same quarter previous fiscal

Battery maker Exide Industries today posted a 22% jump in its net profit to Rs164 crore in the fourth quarter ended 31 March 2011 compared to the same quarter previous fiscal.

During the period the company clocked net sales of Rs1,226 crore, a 19% increase over the corresponding quarter previous fiscal.

Besides, the firm declared a final dividend of 60 paisa per share in addition to the 90 paise per share announced earlier, taking the total dividend for the fiscal to Rs1.50 per share of face value Re1.

For the year ended 31 March 2011, Exide Industries’ net profit stood at Rs666 crore, a 24% increase from the year-ago period. During the period, the company's net sales increased by 20% to Rs4,554 crore.

“The buoyant demand in the automotive OE (Original Equipment) segment continued into the fourth quarter as well. Consequently, we had to divert some capacity from our after market business which again put pressures on our margins in the fourth quarter,” Exide Industries managing director and chief executive officer TV Ramanathan said.

The firm also announced the appointment of Nadeem Kazim as an additional director of the company to hold office till the ensuing annual general meeting.

On Thursday, Exide ended 7.06% up at Rs150.20 on the Bombay Stock Exchange, while the benchmark Sensex declined 0.81% to 19,292.02.

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2G scam: 11 MPs demand rejection of draft PAC report

The draft indicts the prime minister and the PMO for giving an "indirect green signal" to Mr Raja for going ahead with his policies. It also attacked the then finance minister P Chidambaram for recommending to the prime minister to "treat the matter as closed" instead of taking action against those responsible for loss to the exchequer

New Delhi: Eleven MPs, including one each from SP and BSP, today demanded rejection of the draft Public Accounts Committee (PAC) report on the second generation (2G) spectrum scam which has indicted former telecom minister A Raja and made critical observations about prime minister Manmohan Singh and former finance minister P Chidambaram, reports PTI.

At the meeting of the 21-member committee, convened to discuss the draft report, nine members belonging to the ruling UPA-seven Congress, two DMK-and one each from SP and BSP opposed its adoption, committee sources said.

They said the members voiced their views and gave in writing to chairman Murli Manohar Joshi that the draft report be rejected.

After three hours of deliberations, Mr Joshi found the going tough and adjourned the proceedings till 4pm when the issue may be put to vote.

In case of lack of consensus in committee meetings, rules of procedure and conduct of business in Lok Sabha provide that all questions at any sittings of the committee shall be determined by a majority of votes of the members present and voting.

The draft report indicts the prime minister and the prime minister's office (PMO) for giving an "indirect green signal" to Mr Raja for going ahead with his policies.

The draft report also attacked the then finance minister P Chidambaram for recommending to the prime minister to "treat the matter as closed" instead of taking action against those responsible for loss to the exchequer.

The voluminous report had some unpleasant words for Mr Singh, who had kept his office at "arm's length" in 2G spectrum issue which helped Mr Raja "to execute his unfair, arbitrary and dubious designs".

During the meeting, UPA members expressed concern over leakage of the draft report. Congress and DMK members demanded voting to decide whether the report should be submitted to Lok Sabha.

The meeting began with members cutting across party lines discussing the leakage of the draft report which was circulated to the Parliamentary Committee by chairperson Murli Manohar Joshi. Some members said this was a matter of ethics and suggested that CBI should investigate it.

Sources said though there were major differences between members the meeting was held in a cordial atmosphere.

Mr Joshi reportedly gave each member the opportunity to express his views.

The strength of the two sides is delicately balanced in the 21-member committee which has seven representatives from the Congress, four from BJP, two each from AIADMK and DMK, and one each from Shiv Sena, BJD, JD (U), SP, BSP and CPI (M).

Rules state that in case of all financial reports if the majority in the committee decides against presentation of the report to the speaker, the chairperson has to go by this decision.

The Congress and DMK had yesterday attacked Mr Joshi over the report and demanded his resignation, alleging that he was trying to destabilise the government.

The controversial distribution of licences and spectrum was taken by the DMK representative in the Cabinet on 10 January 2008, which the Comptroller and Auditor General (CAG) had estimated a presumptive revenue loss of over Rs1.76 lakh crore.

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COMMENTS

Dinesh

6 years ago

From Sanctions of CWG funds, 2G, backdoor S.BAND etc…every Murky, Anti National deals and Loot links to PMO Office. After Scams and Loot, on CAG PAC reports Congress-DMK is behaving like PAK Politicians to Indian Dossiers on 26/11 thinking CAG, PAC, JPC is Party’s appointed spokespersons who would come out any time for Cover up and Fool the Nation on their crime. The same drama would be carried out on JPC report and JAN LOKPAL BILL in future. SC must appoint SIT to investigate PMO and investigate SP, BSP for Rs 2 lakh crore Food Scam whom Congress Black Mails and use them for EVIL purpose. COME ON BJP, IT'S TIME TO LOCK PARLIAMENT AGAIN AND THIS TIME PLEASE DON'T LET IT RUN TILL THE PRESIDENT DECLARES FRESH ELECTIONS. GREEDY CONGRESS, DMK, SP, BSP MUST GO.

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