Issue no 519

I May 01-08, 2013

WEEKLY ECONOMIC BULLETIN

p. 02/04

LR;eso t;rs

ITP Divison Ministry of External Affairs Government of India

NEWS FEATURE
India pitches for rating upgrade; says growth story credible
Indias growth story is credible and the government is making serious efforts to control subsidy and address other macro-economic problems, the finance ministry told rating agency Moodys, making a strong pitch for sovereign ratings upgrade.

India makes it easier to get visas on arrival

The government has put in motion a series of measures that will drastically liberalise the visa regime in the country and ensure a significant boost in foreign tourist arrivals. Not only has the government extended the facility of visa on arrival for individuals from four to nine airports in the country... More in this section

p. 05/08

OVERSEAS INVESTMENTS
FIIs pour in Rs 2,600 crore in May
Overseas investors have pumped in a staggering Rs 2,600 crore (USD 483 million) in the Indian stock market during the first two trading sessions of the month amid political and economic worries. More in this section

p. 09/10

TRADE NEWS
Govt clears IKEA Rs. 10,500-cr plan for FDI in retail
The Cabinet Committee on Economic Affairs (CCEA) has cleared Swedish furniture major IKEAs Rs. 10,500crore investment proposal in India, the largest FDI in single-brand retail so far.

US gas exports a win-win proposition: Indian envoy

Indias ambassador Nirupama Rao has asked the US to start exporting liquefied natural gas (LNG) to India and other energy scarce countries, calling it a win-win opportunity. More in this section
p. 11/13

SECTORAL NEWS
Apparel industry to triple revenue by 2020: CMAI report
Despite the slowdown, Indian apparel market is expected to grow annually at 13-15% to cross the $125 billion (Rs 675,000 crore) mark by 2020, a survey by Clothing Manufacturers Association of India (CMAI) has found. At present, Indias apparel market is estimated to be around $50 billion (Rs 270,000 crore). More in this section

p. 14/15

NEWS ROUND-UP
ADB to provide $6 billion to India over next 3 years
The Asian Development Bank (ADB) said it will provide about $6 billion loan to India over the next three years, even as the multilateral lender stated it is facing the challenge of raising resources. More in this section

Issue no 519

I May 01-08, 2013

WEEKLY ECONOMIC BULLETIN

>> NEWS FEATURE

India pitches for rating upgrade; says growth story credible

Indias growth story is credible and the government is making serious efforts to control subsidy and address other macro-economic problems, the finance ministry told rating agency Moodys, making a strong pitch for sovereign ratings upgrade. Representatives of Moodys met finance ministry officials at North Block here to access Indias economic situation. Talking to reporters after the meeting, Economic Affairs Secretary Arvind Mayaram said the rating agency wanted to learn about the governments measures to control subsidy and fiscal deficit. He said most of the analysts raise concern over whether there will be slippage on subsidy and the budgetary numbers were credible. The numbers have been very carefully done in the budget. We have checked and double checked it. Therefore, there is no question of numbers not being accurate or credible, Mayaram said. We have a credible story that we have told them and they have appreciated what we have said. Now rest is up to them, he said. Mayaram admitted that Indias macro-economic pictures were not fully rosy but the government was taking action to improve the situation. We know there are problems but we have to take actions in a particular manner and the government is fully committed to take action so that the problem that we are seeing today are fully addressed, he said. The finance ministry had put forward similar arguments and made pitch for ratings upgrade during the meetings with the representatives of Standard & Poors and Fitch recently. Moodys last week said Indias sovereign outlook is stable and does not warrant any action in the next 12-18 months. Moodys has assigned India the sovereign credit rating of Baa3, with stable outlook. This is the lowest investment grade rating. Source: The Times of India

Issue no 519

I May 01-08, 2013

WEEKLY ECONOMIC BULLETIN

>> NEWS FEATURE

India makes it easier to get visas on arrival

The government has put in motion a series of measures that will drastically liberalize the visa regime in the country and ensure a significant boost in foreign tourist arrivals. Not only has the government extended the facility of visa on arrival for individuals from four to nine airports in the country but also given its nod for VoA option for a group of foreign tourists (four or more) using air or sea ports to enter the country. The group VoA facility has been extended to all countries excluding Afghanistan, China, Iran, Iraq, Sudan and Pakistan and foreigners of Pakistani origin. In effect from April 1, the measures mean that a family of four, or a group coming from any part of the world except for the countries on the negative list, can use the VoA facility. This significant measure has put India even above China in its liberalized visa regime. China has introduced a visa-free regime for 60 countries from January 1 this year. India received about 6 million foreign tourists in a year which is a fraction of the world share in tourist arrivals. However, the growth of tourists arriving under the individual VoA scheme has been encouraging. In 2011, 12,761 VoAs were issued which increased by 26% to 16,084 in 2012. In January-March 2013, 5744 VoAs have been issued. The move has been cleared by the inter-ministerial coordination committee for the tourism sector constituted by the PMO following tourism minister K Chiranjeevis intervention. In December last year the government had waived off the 60-day period between two visits to the country. Individual VoA was earlier accepted in airports at Delhi, Mumbai, Chennai and Kolkata which has now been extended to Hyderabad, Bangalore, Kochi, Trivandrum and Goa. According to a notification issued by the ministry of home affairs, foreign tourists in groups of four or more, arriving by air or sea, sponsored by Indian travel agencies approved by the tourism ministry will be granted a collective landing permit for a 60-day period with multiple-entry facility. The tourists will have to submit their personal details, itinerary and apply for visa online. The travel agency will have to submit a complete list of group members to the FRRO, 72 hours in advance. The travel agency will also have to take responsibility for the group. Source: The Times of India

Issue no 519

I May 01-08, 2013

WEEKLY ECONOMIC BULLETIN

>> NEWS FEATURE

Government taking measures to spur investment: PM

The government is taking measures to spur investment and accelerate economic growth to 8 percent from the sluggish nearly 5 percent recorded in 2012-13, Prime Minister Manmohan Singh said. India has set itself a target of over 8 percent annual growth in our 12th Five Year Plan, which runs from 2012 to 2017. This is the rate of growth the country achieved over the past decade, he said at the inaugural of the 46th annual meeting of the Asian Development Bank (ADB) board of governors here. We are initiating measures to spur investment and to make India more attractive to investors both at home and abroad, he said. We have taken steps to fast track major infrastructure projects. Low investment is one of the major reasons behind the recent slowdown in the economic growth. Indias GDP growth is estimated to have slumped to nearly 5 percent in the financial year ended March 31, the slowest in more than a decade. The prime minister said his government had also introduced strong measures to achieve fiscal consolidation. The countrys current account deficit has surged to a record high, and fiscal deficit is expected to be at around 5.2 of the GDP in 2012-13. In the current financial year, fiscal deficit is estimated to decline to 4.8 percent of the GDP. Manmohan Singh said that despite the recent slowdown, India and other developing countries remained the engine of global growth. Referring to the IMF estimates, the prime minister said the advanced developed economies were expected to grow at 1.2 percent while developing Asia was expected to grow more than five times faster at 7.1 percent in 2013. The Asian region is expected to play a crucial role in driving and stabilizing the global recovery process, he said. At Purchasing Power Parity, emerging economies accounted for 80 percent of the world growth in 2012, with emerging Asia accounting for a majority of it and China and India accounting for 35 percent and 10 percent of world growth respectively. This trend is only likely to continue in the years to come, the prime minister added. Source: Indo-Asian News Service

Issue no 519

I May 01-08, 2013

WEEKLY ECONOMIC BULLETIN

>> OVERSEAS INVESTMENTS

FIIs pour in Rs 2,600 crore in May

Overseas investors have pumped in a staggering Rs 2,600 crore (USD 483 million) in the Indian stock market during the first two trading sessions of the month amid political and economic worries. With this, the total foreign investor investments in the countrys equity market has reached Rs 63,643 crore (USD 11.8 billion) since the beginning of 2013. During May 2-3, foreign institutional investors (FIIs) were gross buyers of shares worth Rs 8,475 crore, while they sold equities amounting to Rs 5,869 crore, translating into a net inflow of Rs 2,606 crore (USD 483 million), according to the data available with market regulator Sebi. Market experts said FII inflows in the Indian equities slowed last month because of a slew of factors such as profit-booking, concerns over high current account deficit (CAD) and political uncertainty. FIIs had infused Rs 5,414 crore (about USD 1 billion) in the Indian equity market in April, the lowest in 16-months. We have seen FIIs pumping in funds in the Indian equity market during the month (April), but they are concerned about various economic factors such as CAD touching a record high and political uncertainty, Geojit BNP Paribas Financial Services Ltd head (research) Alex Mathews said. Apart from equity, FIIs have also poured in Rs 2,929 crore (USD 542 million) in the debt market during the month taking the total investment to Rs 21,007 crore (USD 39 billion) in the segment so far this year. As on May 3, the number of registered FIIs in the country stood at 1,769 and total number of sub-accounts were at 6,383 during the same period. Source: Press Trust of India

Issue no 519

I May 01-08, 2013

WEEKLY ECONOMIC BULLETIN

>> OVERSEAS INVESTMENTS

Government okays FDI proposals worth Rs.262.5 crore

The government said it has approved 17 FDI (foreign direct investment) proposals amounting to Rs.262.55 crore. The largest flow of money is related to pharma sector. Sanofi-Synthelabo (India) Limited has got the approval to secure Rs.180 crore FDI. The proposal is for an existing pharma company to acquire another pharma company through internal accruals. Based on the recommendations of Foreign Investment Promotion Board (FIPB) in its meeting held on March 13, 2013, the central government has approved 17 proposals of Foreign Direct Investment amounting to Rs.262.55 crore approximately, the finance ministry said in a statement. French firm Na Pali Europe SARL has got the approval for induction of foreign contribution in an Indian company to carry out the business of single brand retail trading. It will result in FDI inflow of Rs.7.65 crore. One proposal has been rejected while the decisions on seven proposals were deferred, the finance ministry said. Source: Indo-Asian News Service

Wipro invests $30 million in US data firm

IT bellwether Wipro invested $30 million (Rs.162 crore) for a strategic equity stake in Opera Solutions LLC, a leading privately held US-based big data science firm. This strategic partnership with Opera will help us extend leadership in the big data analytics space, combining its machine learning expertise, pre-discovered predictive signals and algorithms with our expertise in global delivery model to create industry-specific solutions, Wipro vice-president K.R. Sanjiv said in a statement here. The Jersey City-headquartered Opera has the largest group of scientists, specialised in machine learning, which is applied to generate big data flows and create predictive patterns or signals. Though big data is a huge opportunity for business value creation, many enterprises do not have the technology or science to access its power, Sanjiv observed.

Issue no 519

I May 01-08, 2013

WEEKLY ECONOMIC BULLETIN

>> OVERSEAS INVESTMENTS

Opera provides capabilities to allow organisations turn raw big data into strategic advantage, profit and productivity. Operas domain expertise will enable our customers to maximise their return on investment of big data analytics implementation through faster adoption, said Sanjiv, who heads Wipros analytics and information management business. Opera also offers a range of solutions which turn the signals into prescriptive action and improve front-line productivity and bottom-line growth. We see a great fit between Wipros ability to deliver end-to-end services and our ability to scale and industrialise big data science.The partnership will also enable us to capitalise on the huge demand for big data science solutions, Opera chief executive Arnab Gupta said in the statement. Wipro works with customers to develop end-to-end analytics and information strategy leveraging process assets and solutions based on analytics, business intelligence, enterprise performance management and information management. Source: Indo-Asian News Service

India top destination of remittances from Qatar

India topped the list of countries to which remittances have been sent by expatriate workers in Qatar in the period 20062012, according to a new report. The annual report of the Qatar Chamber, the representative body of the private sector in that Gulf nation, said that of the $60 billion remitted by foreign workers in the period, 54 percent went to Asian nations with India leading the pack and the Philippines following, The Peninsula newspaper reported. Arab nations accounted for 28 percent while the US and Egypt trailed the list. International Monetary Fund figures were cited while compiling the report. There are around 420,000 expatriate Indians in Qatar, many of them working as blue collar workers. Source: Indo-Asian News Service

Issue no 519

I May 01-08, 2013

WEEKLY ECONOMIC BULLETIN

>> OVERSEAS INVESTMENTS

Mozambique seeks Indias expertise in tea plantations

Mozambique has sought Indias expertise as well as investment to realise full potential of tea plantations in the southeast African country. A delegation of senior ministers, led by Mozambican High Commissioner Jose Maria Morais, held a meeting with key stakeholders of the Indian tea industry, led by M.G.V.K. Bhanu, chairman of the Tea Board here. We really believe that there is huge potential in Mozambique. There are around 39,000 hectares of old tea plantations in the country, out of which only 6,000 acres are under private ownership currently. We need tea expertise, we need investment, Morais said. Sharing of expertise and knowledge on tea cultivation could become a very good pivot of cooperation between the two countries, following which India could explore further avenues of investment in the Mozambique tea industry, he averred. The high commissioner invited the industry stakeholders to visit Mozambique and explore opportunities to invest in the African country. Source: Indo-Asian News Service

Mahindra look to build on results in Europe

Following its best-ever results in the opening two races of Moto GP in Qatar and the USA, Team Mahindra will look to build on its performance as the European season begins at Jerez this weekend. Mahindras new riders and the brand-new Mahindra MGP3O machine have not only achieved double points in the two season-opening flyaways but also recorded the marques first top-five finish. That was achieved at the Circuit of the Americas in Texas the weekend before last, when Miguel Oliveira (18, from Portugal) claimed a fighting fifth, gaining two places on the final lap. A fortnight earlier Miguel was seventh in Qatar, and he places fifth overall in the points in the competitive Moto3 class. Team-mate Efren Vazquez (26, from Spain) claimed tenth and 14th places, securing an impressive full house of points for the team. This was close to the perfect introduction for the new MGP3O racer, barely six months after the project was initiated, following intensive work by Mahindra engineers and Suter Racing, their partners in the project. I think we can be strong and competitive at Jerez. We have a lot of information from pre-season tests, so we can be a little more confident of our chances compared to the previous races. It wont be easy, but I am hoping for another good result. The goal is to be consistent and fighting in the top six every weekend, said Oliveira. Source: Press Trust of India

Issue no 519

I May 01-08, 2013

WEEKLY ECONOMIC BULLETIN

>> TRADE NEWS

Govt clears IKEA Rs. 10,500-cr plan for FDI in retail

The Cabinet Committee on Economic Affairs (CCEA) has cleared Swedish furniture major IKEAs Rs. 10,500-crore investment proposal in India, the largest FDI in single-brand retail so far. This will pave the way for the iconic furnishing and homeware firm to set up 25 exclusive stores and in-house food cafes in the country. Yes, it is cleared, information and broadcasting minister Manish Tewari said, referring to IKEAs investment proposal. This will be the biggest foreign investment in the retail segment till now and will provide an opportunity to Indian small and medium enterprises in a wide range of labour intensive sectors for integrating into global value chain. On the other hand, it will also provide a diverse choice for the Indian consumers for a wide range of products, Anand Sharma, commerce and industry minister, said. This decision has once again reaffirmed the commitment of the government for maintaining a liberal economic agenda, said Sharma, who described the CCEA approval as historic. Last year, the government had eased foreign investment norms allowing 100% FDI in single brand retail and had removed some of the restrictive conditions including dropping the mandatory 30% sourcing of goods from Indian small enterprises for single brand retail trading. IKEA, with more than 300 stores across the world and an annual revenue of 27.5 billion euros (about Rs. 190,000 crore) had also sought approval to sell items such as upholstery and other accessories, consumer electronics, leather products, and lifestyle products, food and beverages at cafes in its premises. IKEA had sought permission to set up cafes and restaurants inside all its stores in India, in line with its global concept. The government has allowed the company to run food cafes but has prohibited it from selling packed food. Source: The Hindustan Times

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I May 01-08, 2013

WEEKLY ECONOMIC BULLETIN

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>> TRADE NEWS

US gas exports a win-win proposition: Indian envoy

Indias ambassador Nirupama Rao has asked the US to start exporting liquefied natural gas (LNG) to India and other energy scarce countries, calling it a win-win opportunity. As shale gas has become economically viable to produce, the US has emerged as one of the worlds most important gas producing countries, she noted in a keynote address at the American Enterprise Institute (AEI) on Americas Natural Gas: Should Exports be Restricted? Growth in shale gas production in the coming years is now expected to substantially reduce, if not eliminate, the need for the US to import natural gas, Rao said. She noted that according to US Department of Energy estimates, the total production of natural gas in the US would exceed domestic consumption by 2020. This scenario opens up the possibility of the export of liquefied natural gas (LNG) cargoes from the US to other energy scarce countries, including India where there is significant untapped potential for natural gas demand in all end use segments, she said. The advantage is mutual and that natural gas exports represent a win-win cooperation opportunity, Rao said. She said that India had already invested significantly in the liquefaction terminals that were likely to come up in the US. Our companies are scouting for more tie-ups and ownership stakes in the 19 odd terminals which have applied for export of natural gas to non-Free Trade Agreement (FTA) countries, she said. Besides, other Indian companies, including Reliance Industries Ltd in the private sector, have bought stakes in oil and gas exploration and production companies, a trend which will receive a huge boost if export of natural gas is permitted to India, Rao said. According to a US Energy Information Administration (EIA) study cited by her, roughly 20 percent of the $133.7 billion invested in US tight oil and shale gas from 2008 to 2012 has come from abroad, with Indian companies accounting for a total investment of nearly $4 billion. These investments represent more growth, jobs and progress for the US economy and should, in my view, be welcomed, Rao said. US natural gas exports will also bring significant geo-political and strategic advantages to both the US and its partners and allies across the world, she said. Source: Indo-Asian News Service

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I May 01-08, 2013

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>> SECTORAL NEWS

Apparel industry to triple revenue by 2020: CMAI report

Despite the slowdown, Indian apparel market is expected to grow annually at 13-15% to cross the $125 billion (Rs 675,000 crore) mark by 2020, a survey by Clothing Manufacturers Association of India (CMAI) has found. At present, Indias apparel market is estimated to be around $50 billion (Rs 270,000 crore). Retail will play a pivotal role in Indias growth and of this retail will be an important part. Though growth of 20-25% in apparel is not going to be an easy one, said Rahul Mehta, president, CMAI. Mehta said that increasing purchasing power of youth will drive the the growth. The growth is primarily driven by rising income levels, young population, increasing preference for branded apparel and a surge in demand of rural and the semi-urban areas, he said. Factors like the changing fashion trends, growing consumer class and rising urbanisation have led to the growth in the apparel industry. Increasing retail penetration, growing service class and the increasing share of the designer wear have also been the drivers for growth, the agency further said. The market is not bullish yet retailers are seeing decent growth in the fashion business. While the branded apparel segment is still evolving, going forward by 2020 we can expect it to contribute 40% from the current 25%, said Prashant Agarwal, joint managing director, Wazir Advisors, a management consulting firm. Meanwhile, founder of Future Group, Kishor Biyani said that theres immense opportunity for growth in the apparel industry. Source: Hindustan Times

Zimbabwe beckons Indian drug firms

Zimbabwe wants Indian firms supplying it generic medicines to produce the drugs locally so that its pharmaceutical sector could grow, the countrys health minister, Henry Madzorera, has said. Going forward, we desire our pharmaceutical industry to grow, and we believe that the Indian manufacturing sector can play a key role in Zimbabwes development, Madzorera told IANS in an interview here. The minister, now on a visit to India, is exploring this possibility with various Indian drug manufacturers and hopes to garner concrete partnership and collaboration proposals. Zimbabwe is right in the centre of three epidemics - HIV/AIDS, TB and malaria. We think drugs to control these should be manufactured in the region and Indian companies should exploit this opportunity, Madzorera said. We want to increase the manufacturing capacity of Zimbabwe through parnerships with Indian pharmaceutical firms. He said companies had earlier hesitated to invest in his country as the nation of 13 million went through a difficult eco-

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I May 01-08, 2013

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>> SECTORAL NEWS

nomic phase due to political uncertainty. The situation has now changed. Zimbabwes economy is mostly dollarised. Though we may be a small country, Indian companies investing there will have access to a 250 million-strong SADC market, Madzorera said. The South African Development Community (SADC) is a 14-nation regional grouping of middle and low income countries of the area. Among its members are Zambia, Tanzania and South Africa. Indian pharma firms otherwise have a major presence in the region, particularly in South Africa, which is the largest market for Indian medicines in the continent. Indian firms like Cipla are already manufacturing drugs in South Africa. At the last India-Zimbabwe Joint Trade Committee meeting held in Harare in March, which was co-chaired by Commerce Minister Anand Sharma and his Zimbabwean counterpart Welshman Ncube, potential joint venture investment projects from the Industrial Development Corporation of Zimbabwe were presented for consideration of the Indian side. Source: Indo-Asian News Service

US firm to invest $240mn to light up Bihars Buddhist sites

A power venture formed by Indian and North American energy professionals plans to create a role model for the world by lighting up famed Buddhist sites in Bihar with a $240 million (Rs. 13 billion) solar energy project as part of a corporate social responsibility initiative. Founded in 2011, FJS Energy LLC, USA, aims to work around the Buddhist Circuits starting with Rajgir-Nalanda and Bodhgaya in the first phase and then taking up Vaishali and other places. We would like to start the process of implementation at the earliest, Christopher Sargunam, Chief Operating Officer of the company with offices in Delhi, New Jersey and Ontario, Canada, told IANS in an e-mail. The companys ultimate aim is to create a portfolio of 200 MW at a cost of around Rs. 13 billion ($240 million), but the first phase would focus on 20 to 25 MW which would envisage an investment of upwards of Rs. 1.6 billion ($30 million), he said. FJS Energy thought of lighting up the Buddhist Circuit as a not-for-profit Corporate Social Responsibility initiative with a larger objective as it is one of the world key religious tourism destinations that has of late witnessed a sharp rise in the domestic and foreign tourist arrivals. While the Bihar government is pursuing development of road and other key infrastructure in a planned manner, it is equally important to have clean and continuous supply of power to these circuits and create a role model for the world, Sargunam said. While Bihar is currently the companys key focus in the clean energy space, it would eventually look at other opportunities on a case by case basis. Quite optimistic about the Indian market place we are also currently structuring long term coal supply contracts (of up to 25 years), which of-course is a for-profit initiative, Sargunam said. With its key strength lying in partnerships globally and more particularly in the US for securing coal with customised/blended specs from a long term perspective, FJS aims to secure 5 percent market share in the coal imports business in India, he said FJS Energy, which has secured fuel reserves in different parts of the world through acquisitions, joint ventures and option agreements, provides innovative energy solutions in thermal and clean energy space, Sargunam said. Source: Indo-Asian News Service

Issue no 519

I May 01-08, 2013

WEEKLY ECONOMIC BULLETIN

India to be preferred option for Japanese companies

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>> SECTORAL NEWS

India will soon overtake China as the preferred destination for investment by Japanese manufacturing companies. According to Japan Bank of International Cooperation (JBIC) CEO and executive managing director Hiroshi Watanabe, the gap between China and India in attracting Japanese investment has reduced significantly in the last couple of years. JBIC conducts an annual survey of Japanese companies preferred investment destination every August. Watanabe told TOI that the latest survey on overseas investment by Japanese manufacturing companies showed that India ranked as the second most preferred investment destination after China. However, Japanese firms have been steadily reducing investment in China. We have enough feelers to suggest that Japanese companies dont want to put all eggs in one basket (read China). India has huge potential for attracting investment from Japanese companies. You have good technology for multiplying growth of manufacturing sectors. Besides, India has a good legal system and companies hope getting justice, though the process of judgment takes little long, he added. The JBIC CEO said Indias demographic advantage and increasing buying power would motivate more Japanese firms to set up units here. He added that earlier, Japanese companies concentrated manufacturing in one country and exported the products to other countries. But in India, these companies manufacture and also sell their products since the demand is more. The game is now changing, Watanabe said. He added that while Japanese investment earlier concentrated in the south and eastern regions such as Chennai, the next phase of investment will be along the Delhi-Mumbai Industrial Corridor (DMIC). Investment would be more in states such as Gujarat and Haryana, the multi-lateral bank CEO said. Source: Times of India

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>> NEWS ROUND-UP

ADB to provide $6 billion to India over next 3 years

The Asian Development Bank (ADB) said it will provide about $6 billion loan to India over the next three years, even as the multilateral lender stated it is facing the challenge of raising resources. Our idea is ADB will maintain its lending level to India, approximately $2 billion over next three years. We are now working on the country partnership strategy and we are planning to maintain the level of lending to India, ADB President Takehiko Nakao said at the concluding day of the 46th annual meeting of the funding agency. India is the biggest borrower of ADB. The Manila-based multilateral lender had extended $2.4 billion loan to India in 2012 across sectors like transport, energy, commerce, industry, trade and finance. Asked about whether ADB has identified projects, Mr. Nakao said it is too premature to talk about any specific ones but ADB team is looking at various concrete projects. He also said that the bank will continue to lend $10 billion a year across the member-nations despite generating lower return from investments. Stating that ADB is facing a resource challenge, he said this issue will require urgent and careful attention. We will look at all options for ensuring that our lending level remains adequate. Actively investing in different kinds of assets can be one of the options for larger revenue, he said, adding that financial safety and return is the key objective while making investment. Asked whether there was discussion on augmenting the capital of the bank at the Board of Governors meeting, Mr. Nakao said: That is a very difficult issue. At this point I want to mention what kind of objections we are getting to maintain the level of lending. I dont want to specify what kind of idea we have at this moment. ADBs capital was tripled in 2009. The fund enhancement came after a gap of 15 years.

Source: Indo-Asian News Service

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>> NEWS ROUND-UP

India to set up $1 bn innovation fund

The Indian government has outlined a plan to set up Rs.5,000 crore (nearly $1 billion) fund to facilitate innovation and entrepreneurship, top official said. The government would initially contribute $20 million (Rs.100 crore) to the India Inclusive Innovation Fund. The remaining amount would come from scheduled banks, insurance companies, financial institutions, corporates, high net worth individuals as well as bilateral and multilateral institutions, said Economic Affairs Secretary Arvind Mayaram. This fund would help encourage and finance such products to boost scientific innovations that can improve the life of the common man, Mayaram, said while addressing a seminar on innovation on behalf of Finance Minister P. Chidambaram here. The seminar was organised by the finance ministry in partnership with the Federation of Indian Chambers of Commerce and Industry (FICCI) as part of the 46th annual meeting of the board of governors of the Asian Development Bank. Mayaram said the National Innovation Council, which is a part of the Planning Commission, has outlined the plan of setting up of the Rs.5,000 crore fund. The new fund is aimed to drive and catalyse the creation of an ecosystem of enterprise, entrepreneurship, and venture capital, targeted at innovative solutions for the bottom of the pyramid, Mayaram said. FICCI president Naina Lal Kidwai emphasised on the need for greater collaborations between the government and the private sector to help promote growth and innovation. There is a growing conviction that breakthroughs in ideas and technology must be directed to ensuring that people from all social and economic strata, particularly those at the bottom of the pyramid, partake in the growth process, Kidwai said. Source: Indo-Asian News Service

BSE to offer courses in UAE to help boost financial market

Abu Dhabi/Mumbai, May 6: BSE Institute, a wholly-owned subsidiary of Bombay Stock Exchange (BSE), Monday signed a memorandum of understanding with IBMC Financial Professionals Group of the United Arab Emirates to offer knowledge and skills to professionals and investors, and support the growth of financial markets in that region. The institute will offer its course to investors, college students and general public in Abu Dhabi, Dubai and Sharjah. The tie-up will provide training programmes, including flagship programmes like introduction to Shariah-compliant Qualified Foreign Investors, Islamice Finnance, etc in the GCC regions, enabling investors make informed investment decisions, said BSE Managing Director Ashish Kumar Chauhan. Added the institutes Managing Director Ambarish Datta: With the knowledge and skills required to directly invest in Indian equity market (will) lead to the widening of the class of investors, attract more foreign funds, reduce market volatility and deepen the Indian capital market. Datta added that professional training will significantly enhance the skills of professionals in the region to make the GCC region a global gateway for equity, currency and commodity trade. IBMC Financial Professional Group Chairman and Managing Director Hazza Mohammed Al Dhaheri and CEO Sajith Kumar also spoke on the occasion. The BSE Institute Ltd inherits the knowledge and insights into the capital markets industry garnered by BSE over the past 136 years. It offers a wide range of programmes ranging from one-day workshops to fulltime post-graduate programs in financial markets, banking and finance, business journalism, and certificate courses for professionals in areas like cash markets, derivatives and mutual funds. Source: Indo-Asian News Service

Issue no 519

I May 01-08, 2013

WEEKLY ECONOMIC BULLETIN

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