1.

For Arvind Kumar Yadav

Finance minister Pranab Mukherjee on Monday said adverse global economic developments, including the fallout of downgrade of US sovereign rating, present new opportunities to India, and the country could become a source of stability for the world economy. Against the backdrop of overall investor sentiment being hurt by global economic uncertainties, Mukherjee said India could also emerge as a safe haven for global capital inflows. He was speaking at a function to mark the Golden Jubilee Celebrations of Indian Economic Service. "If India can continue to grow and acquire economic strength, we could be a source of stability for the world economy and provide safe havens for restless global capital," he said. The recent events such as Standard & Poor's downgrade of the US credit rating as well as debt crisis in Europe, have severely dented global markets. Even though these recent developments are a cause of concern for India, Mukherjee said "at the same time...these shocks are markers of shifting balance in the global economy, presenting new opportunities for us. We have to be alert to shape real-time policy responses, reform systems, improve the regulatory framework of our institutions and make the most of the opportunities coming our way." India's robust performance in difficult times shows that it could actually come out stronger from any international financial crisis. He said with a greater role now played by market forces, there is a need to re-design incentive structures for development and regulation of markets and for improving the quality of governance. -------------------x--------------------------------------------------------x-------------------------------------x-------

2. For Debabrata Bhakta

Confirming fears of a slowdown, India's economy grew by just 7.7% in the first quarter of the 2011-12 financial year, compared to 8.8% growth in the same three-month period last fiscal, which was mainly due to the poor performance of the manufacturing sector. The government has projected overall economic growth in the current fiscal at around 8.5%, while the Reserve Bank has projected the growth to moderate to 8% from 8.5% in FY'11. In the latest data released by the government on Tuesday, GDP growth for the April-June quarter of the 2010-11 fiscal has also been revised downward to 8.8% from the earlier provisional estimate of 9.3%. During the quarter ending June 30, 2011, growth in the manufacturing sector dipped to 7.2% from 10.6% in the corresponding period of 2010-11. In addition, the mining and quarrying sector grew by just 1.8% during the quarter under review, as against 7.4% growth in the first quarter of the previous fiscal.

However, farm output showed an improvement, expanding by 3.9% during the quarter under review, compared to 2.4% in the corresponding three-month period last fiscal. Furthermore, the trade, hotels, transport and communications segments grew by 12.8% in the quarter under review, up from 12.1% in the year-ago period. The services sector, including insurance and real estate, grew by 9.1% in the June quarter this year, compared to 9.8% expansion in the corresponding period last year. The Planning Commission has estimated GDP growth at 8-8.3% in the 2011-12 financial year. The Indian economy expanded by 8.5% in the 2010-11 fiscal. -------------------x-------------------x-------------------x---------------------x------------------x-------------------------

3. For Kanhu Kishku

The new head of the IMF warned on Saturday that the global economy risks falling back into recession and called for urgent coordinated policy action, including the mandatory recapitalization of European banks. "Developments this summer have indicated we are in a dangerous new phase," International Monetary Fund Managing Director Christine Lagarde said at an annual gathering of global policymakers hosted by the Kansas City Federal Reserve Bank. "The stakes are clear; we risk seeing the fragile recovery derailed. So we must act now." Two years after the end of the worst of the recent financial crisis, growth in both the United States and Europe is sputtering, and debt crises on both sides of the Atlantic have shaken public confidence in a global recovery. Advanced economies must forge long-term plans to bring their debt under control, but at the same time should not pursue belt-tightening so fast that it imperils recovery, Lagarde said on Saturday. "Put simply, macroeconomic policies must support growth," the former French economy minister said in her first major policy speech since taking over the top IMF job from Dominique Strauss-Kahn in July. "Monetary policy also should remain highly accommodative, as the risk of recession outweighs the risk of inflation," she said, adding that central bank should stand ready to jump back into unconventional policy actions if needed. European banks need to be recapitalized, she said, adding that the most efficient way to do so would be "mandatory substantial recapitalization" through private channels if possible, but otherwise some form of public Europe-wide funding. Individual European countries must also put in place deficit-cutting plans with a "credible finance path" -- including, she said, continued support from the European Central Bank. In the United States, the focus on long-term fiscal consolidation must not ignore the importance of fostering near-term growth, she said.

"After all who will believe that commitments to cut spending can survive a lengthy stagnation with prolonged high unemployment and social dissatisfaction?" she asked. Policymakers must also stop the slide in the US housing market, she said, relying on intervention by government housing finance agencies and more aggressive programs to reduce homeowner debt. ----------------x--------------------------x----------------------------x------------------------------x--------------------

4. For Kumar Bruce

The comprehensive free trade pact between India and Japan has come into force from Monday, a move which will boost bilateral trade between the countries to USD 25 billion by 2014. The Comprehensive Economic Partnership Agreement (CEPA) will bring immediate gains to exporters of textiles, seafood and spices to Japan, as duties on these products would be eliminated. It would ultimately result in the removal of duties on almost 90 per cent of the products traded between the countries. Other sectors that would gain from the pact include agricultural products like mangoes, citrus fruit, spices and instant tea, spirits, chemicals, cement and jewellery. Indian professionals are set to make strong gains under the CEPA, which is the country's third such pact with any country, after Singapore and South Korea, and the first with a developed nation. "The CEPA comes into force with effect from today. It will be good for commerce, trade and investment both for India and Japan. It is a part of the building bloc for much large agenda for building a comprehensive economic partnership for East Asia, which covers Asean, China, Korea, Japan, India, Australia and New Zealand," Commerce Secretary Rahul Khullar told reporters here. Japanese Ambassador Akitaka Saiki said the business communities of the two countries should make the best use of this arrangement. "This arrangement will definitely facilitate both ways flows of trade and investment," Saiki said. Under the CEPA, duties will be brought to zero in 10 years on 66.32 per cent of the products traded between the nations. The exclusion list of Japan (where no duty concessions are proposed) mainly consists of items such as rice, wheat, oil, milk, sugar, leather and leather products. On the other hand, India will not reduce duties on sectors like auto and agriculture. Further, the Japanese government shall accord no less favorable treatment to the applications of Indian companies than it accords to the like applications of its own persons for drug registration. This will greatly help Indian pharmaceutical companies.

An official statement said that Indian professionals will be able to provide their services and contribute toward further development of Japan's IT sector. Furthermore, as part of the agreement, contractual service suppliers and independent professionals engaged in accounting, R&D services, tourist guide and market research and management consulting, now can provide services in Japan. -----------------------x----------------------x-----------------------x-----------------------x--------------------

5. For Shivangi Tyagi

Finance minister Pranab Mukherjee will on Monday meet top industry captains including Reliance Industries chairman Mukesh Ambani, ADAG chairman Anil Ambani, Tata group chairman Ratan Tata, Aditya Birla Group chairman Kumar Mangalam Birla and Mahindra and Mahindra vice-chairman Anand Mahindra among others to discuss measures to boost the economy. The meeting comes at time when India's policy makers are wrestling with a dilemma as fiscal and monetary measures to combat inflation has not tamed prices, but has cast a shadow on broader economic growth. The government has officially pared the Indian economy's growth forecast for 2011-12 to 8.6% from the earlier 9%. India's inflation rate in June accelerated to 9.44% driven by high fuel and manufactured products' prices but experts warned that prices will again surge in the coming weeks as the knock-on effects of a hike in diesel prices cascade through the economy. --------------------------x-----------------x-------------------------x----------------------x------------------6.

For Raju Kumar Das

Acute shortage of coal in the country is likely to derail the ambitious power capacity addition targets of 90,000 mw to the current 100,000 mw in the upcoming 12th Plan Period (2012-17), the Confederation of India Industry (CII) has said. Coal India Ltd (CIL), which is also the worlds largest producer of the mineral, has scaled down its production targets for 2011-12 to 452.0 million tonnes (MT) from the targeted 460.5 MT in 2010-11. Moreover, during 2010-11, against the target of 460.5 MT, only 431.3 MT was produced due to a delay in getting forest clearances, non-completion of contracts due to litigations and law and order problems in areas.

Compounding the issue, the industry chamber said that CIL has not signed fuel supply agreements (FSAs) and is unable to commit delivery of coal conforming to the sanctioned linkage quantity for the last two years. Consequently, lenders are reluctant to fund new projects. With the power ministry estimating that about 17,000 MW of new and upcoming projects not likely to start operations and 5,593 MW of plants likely to generate only 42% of their actual output due to fuel shortages, the Indian power industry is clearly witnessing a crisis, the CII said. Power shortages due to lack of coal may impact the industry severely unless these issues get addressed, said Chandrajit Banerjee, director-general, CII. Clearly, the Indian government and the coal and power industries will collectively need to take action to mitigate the impending power crisis in the country as coal is expected to remain the mainstay of power production in the country in the foreseeable future, said Anil Sardana, chairman, CII national committee on power, and managing director, Tata Power Company Ltd.