28February2009

GDP growth of Indian at 5.3%

GDP growth of India (12 largest GDP of the world) is estimated at 5.3% for the October –December 2008 quarter, which is a 6 year low. This is mainly caused by 2.2% decline in agricultur and 0.2% decline in manufacturing sector.

First 9 months of this Fiscal GDP growth now is 6.9% (Q1: 7.9%, Q2: 7.6%, Q3: 5.3%). Projected growth for this year was 7.1%. Now to get this projected growth last quarter should have 7.7% growth. Considering recession, growth of last quarter is expected to be around 5% and so we"ll miss the projected growth by quite a margin.

How GDP is calculated?

The method of Calculating India GDP is the expenditure method, which is,

GDP = consumption + investment + (government spending) + (exports-imports)

i.e. GDP = C + I + G + (X-M)

The other two methods of calculating GDP are Product wise (Calculating the total production) and Income wise (Calculating the total incomes received by factors of production - labour & capital)

Meanwhile, US economy shrunk by 6.2% for the same period of October-December 2008. This is its worst hit since 1982.

INR at 51.12 against Dollar

INR reached its all time low of 51.12 per dollar. This is mainly due to heavy demand for dollars. Dollar gained against Euro and Pounds yesterday. So, this gave opportunity to investors to buy dollars from India and sell it outside. Widening of Fiscal deficit from 2.5% to 6% already led Re to fall below 50 mark. Taking measures for growth RBI may further cut rates. This will further bring Re down. Another impact would be on inflation which has already reached to a low of 3.2%. We might see further fall in inflation in view of rate cuts and annualisation factor.

List of CEOs of major Indian Companies

Many a times we want to know CEO/Chairman of some major Indian company. I have compiled a list that would be lot helpful. Let me know if there is any correction or if I missed anything.

Company	CEO/Chairman
ADAE	Anil Ambani
Air Deccan	GR Gopinath
Apollo Tyres	Neeraj Kanwar
Ashok Leyland	R Seshasayee
Asian Paints	Ashwin Dani
AV Birla Group	Kumar Mangalam Birla
AZB Partners	Zia Mody
Bajaj Auto	Rahul Bajaj
Bank of Baroda	MD Mallya
Bharat Forge	BN Kalyani
Bharat Petroleum	Ashok Sinha
Bharti Enterprises	Sunil Mittal
Biocon	Kiran Mazumdar Shaw
Birla Corp	RS Lodha
Bombay Dyeing	Jeh & Ness Wadia
Britannia	Vinita Bali
BSNL	AK Sinha
Cadbury India	Bharat Puri
Cipla	YK Hamied
Cromptom Greaves	Gautam Thapar
Dabur	VC Burman
Dr. Reddy's Labs	K Anji Reddy (Chairman)
Dr. Reddy's Labs	GV Prasad (CEO)
EID Parry	SM Datta
Essar Group	Shashi Ruia
GAIL	UD Choubey
Godrej Group	Adi Godrej
Gujarat Ambuja Cement	NS Sekhsaria, Suresh Neotia
HCL Technologies	Shiv Nadar (Chairman), Vineet Nayar (CEO)
HDFC	Deepak Parekh
Hero Group	Brij Mohal Lall Munjal
Hinduja Group	SP Hinduja
Hindustan Petroleum	Arun Balakrishnan
HSBC India	Naina Lal Kidwai
Hyundai India	BVR Subbu
ICICI Bank	Chanda Kochar
ICICI Prudential	Shikha Sharma
ICICI Ventures	Renuka Ramnath
Infosys Technologies	Nandan Nilekani * Narayan Murthy (co founder and chairman), Kris GopalKrishnan (CEO)
IOC	Sarthak Behuria
Ispat Industries	VK Mittal
ITC	Yogesh C Deveshwar
Jet Airways	Naresh Goyal
Kotak Mahindra Bank	Uday Kotak
Larsen & Toubro	AM Naik
Mahindra & Mahindra	Keshub Mahindra, Anand Mahindra
Maruti Udyog	RC Bhargava
Microsoft India	Ravi Venkatesan
Motorola India	FV Vandrewala
Nicholas Piramal	Ajay Piramal
Nirma	Karsanbhai Patel
ONGC	R.S. Sharma
Pantaloon Retail	Kishore Biyani
Pepsi Co.	Rajeev Bakshi
Ranbaxy	Malvinder Singh Mohan
Raymond	Gautam Singhania
Reliance Industries	Mukesh Ambani
Reserve Bank of India	Subbarao
RPG Group	Harsh Goenka
SAIL	SK Roongta
Satyam Computers	Kiran Karnik(Chairman), A.S. Murthy (CEO)
SEBI	Bhave
Shoppers' Stop	BS Nagesh
Standard Chartered	Jaspal Bindra
Star TV India	Peter Mukerjea
State Bank of India	OP Bhatt
Tata Group	Ratan Tata
Tata Steel	B Muthuraman
TCS	S Ramadorai
UB Group	Vijay Mallya
Videocon Industries	Venugopal Dhoot
Wipro	Azim Premji (Chairman), Girish Paranjpe & Suresh Vaswani (joint CEOs)
Yes Bank	Rana Kapoor
Zee Telefilms	Subhash Chandra
Hindalco Industries	Kumar Mangalam Birla
NTPC	R.S. Sharma
Oracle Financial Services Software (i-flex)	Rajesh Hukku
Spicejet	Sanjay Aggarwal

25February2009

Duty cut of 2%

Using every privilege it has to lure voters just before code of conduct for the next general elections is applicable, Finance Minister Mr. Pranab Mukherjee announced 2% cut in excise duty. This will be in addition to the 4% excise duty cut made in December and will continue in the next Fiscal. Note here that the duty cut is only for the items with current excise duty at 10%. There are other slabs with duty more than 10% and other at 4%, though these are not affected. But the items with 10% duty (which now will be at 8%) are 96% of all. So more or less this cut is across the commodities. There is 2% cut in the service tax as well, bringing it down from 12% to 10%. So we see cut in bills if the benefit is transferred to consumer. 

S&P Lower India Rating

Standard & Poor’s (S&P) lowered the outlook for India’s credit rating from stable to negative (BBB-) indicating higher possibility of a downgrade. The revision has increased expectations of a rate cut aimed at boosting sentiment. S&P’s revised outlook has came less than three weeks after it said India will be the second-fastest growing economy after China. But economy prospects and fiscal position are separate issues. India fiscal deficit was as high as 6% as against 2.5% expected budget deficit. Also with the current duty cuts (mentioned above) there will be higher fiscal deficit. Note here that on the same ratings (Long term debt, Local currency) some other countries stands as:

Pakistan: CCC+

Sri Lanka: B+

Kazakhstan: BBB

Israel: AA-

Jordan: BBB

Russia: BBB+

US: A+

Australia, New Zealand: AAA

China: A+

Hong Kong: AA+

Singapore: AAA

Argentina: B-

Brazil: BBB+

Venezuela: BB-

France, Germany, Ireland, Portugal, Netherland, Switzerland, UK, Sweden, Norway: AAA

Iceland: BBB+

SEBI clearance for Satyam sale

SEBI has laid the way for Satyam to issue preferential shares at a price which can be lower than what rules allowed till now. At present, the pricing of a preferential issue is based on the average price of the stock for two weeks or six months, whichever is higher, from the relevant date (which is 30 days prior to shareholders’ approval). This is now relaxed to two weeks average price.

National Rural Employment Guarantee Act

Introduction

• Government of India under Prime Minister Manmohan Singh launched NREGA on 25th August 2005. 
  
• NREGA aimed to provide work to people living below poverty line in rural India.
  
• The NREGA provides a legal guarantee for one hundred days of employment in every financial year to adult members of any rural household willing to do public work related unskilled manual work at the statutory minimum wages. 
  
• Central Government shall meet the cost towards the payment of wage, 3/4 of material cost and certain percentage of administrative cost. 
• State Government shall meet the cost towards unemployed allowance, 1/4 of material cost and administrative cost of State council.
  
• Adult members of rural households submit their name, age and address with photo to the Gram Panchayat. The Gram panchayat registers households after making enquiry and issues a job card. 
  
• The employment will be provided within a radius of 5 km: if it is above 5 km extra wage will be paid.
  
• TATA Consultancy Services, India's largest IT/ITES sector company has designed the software solution for the state of Andhra Pradesh. NIC, a government of India undertaking, developed solution has been implemented in other areas.
  
• Wages paid would be through a saving bank account in local bank or post office. Government is trying hard to ban wages payment through cash.

Facts

Under NREGA, rural labourers have a legal entitlement not only to work on demand but also to minimum wages. To prevent corruption, a wide range of transparency safeguards has been built into the Act. For example, muster rolls are supposed to be kept at the worksite, displayed at the Panchayat Bhawan, and read out in public at the time of wage payments. Employment and wage details also have to be entered in the labourers’ 'Job Cards', to enable them to verify the records for themselves. Contractors are totally banned.

At the gram panchayat level, the main responsibility for implementing NREGA works lies with the Panchayat Executive Officer (PEO). Another key actor is the Village Labour Leader (VLL), who is supposed to be selected by the gram sabha for the purpose of 'supervising' a specific worksite.

VLLs were there with Sampoorna Grameen Rozgar Yojana (SGRY), a predecessor of NREGA. At that time, the VLL was a de facto contractor. He or she received the work orders, spent the funds, arranged the works, and filled the muster rolls. Under NREGA, funds are routed through the panchayat and the VLL is supposed to be a mere worksite supervisor, who earns wages at the same rate as other labourers.

Current Status of NREGA

• Barely 3.2 per cent of the registered households could avail of 100 days of employment in one year '06-'07.
  
• Average employment provided under the scheme was just 18 days in the same year block.
  
• Rural population, even Government not aware of the scheme.
• Discrepancy in muster roll prepared by the team leader.