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2011 February Economic Issues

Europe - India Gateway (EIG) cable system launched

Bharti Airtel along with 16 other global telcos launched the Europe India Gateway (EIG) cable system that will enhance diversity and capacity between Europe and India.

The 15,000-km-long cable project has received investment of around $700 million and has a capacity to transmit 3.84 terabits per second.

Jindal Steel and Power (JSPL) to set up 6 mt plant in Orissa

The capacity of the proposed 6 million tonnes plant will be expanded to 20 million tonnes in the next 10 years.
To invest Rs.50,000 crore in coal-to-liquid plant.

Power Finance Corporation appoints merchant bankers for FPO

Power Finance Corporation (PFC) had appointed four merchant bankers -- Goldman Sachs, JM Financial, DSP Merill Lynch and ICICI Securities -- to manage the Rs. 5,600 crore follow-on public offer (FPO).

Goldman Sachs, JM Financial, DSP Merill Lynch and ICICI Securities have been chosen to handle PFC's follow on public offer (FPO).

India on 2nd February inked a revised tax treaty with norway for exchange of information to check tax evasion and prevent the flow of black money between the two countries. 

This new DTAA (Double Taxation Avoidance Agreement) will replace the existing double taxation avoidance convention (DTAC) that was signed between the two countries on decemeber 31, 1986.

In a major breakthrough that put an end to more than a month of uncertainty. India and Iran on 3rd February arrived at a settlement and agreed to use EURO to pay for Iranian crude oil through a German bank named EIH Bank

SAIL and Afripalm Resources of South Africa signed MoU

Steel Authority of India (SAIL) had entered into an agreement with Afripalm Resources of South Africa to carry out a feasibility study for setting up a steel plant in that country.

The National Association of software and service companies (NASSCOM) on 2nd February said, the Indian IT-BPO sector was estimated to grow 19% in the current financial year to reach $ 76 billion in revenues. 

Exports would continue to be the main stay of the industry with estimated growth of 18.7% to $ 59 billion revenue, while the domestic market is estimated to grow 16% to aggregate Rs 78,700 Cr in 2010-11. Direct employment is expected to reach nearly 25.40 lakh, an addition of 2.40 lakh employees in 2010-11.

A ban on sale of Ayurvedic and other Herbal medicine will take effect across Europe from may 1st, following a E.U. directive, introduced as a response to growing concern over adverse effects of such alternative medicines.

India-ASEAN trade to reach $70 b in 3 years

India-ASEAN trade during the calendar year 2009 was — exports $17.3 billion and imports $23.8 billion — and during 2010 — exports $22.3 billion and imports $27.8 billion.

MobME Wireless Solutions got NASSCOM Innovation Award for 2011.

MobME Wireless Solutions, a Technopark-based company specialising in mobile value-added services, has won the NASSCOM Innovation Award for 2011.

MobME won the award under the category, Market Facing Innovation, for its implementation of the m Governance Service Delivery Platform (mSDP) for Kerala State IT Mission, India's first m-governance project.

Japan's gross domestic product fell an annualised 1.1 per cent in the fourth quarter in 2010, marking the first decline in five quarters due to a drop in exports, diminishing government stimulus programmes and weak consumer consumption, said the sources on 14 February .According to the data, Japan has now lost its position as the world's second largest economy to China.

G20 Finance Ministers meeting in Paris on 19 February reached a compromise deal to correct global economic imbalances and expressed concern over excessive commodity price volatility impacting the world food security.

Pranab Mukherji attended the meeting from India.

Forest Labs to buy Clinical Data for $1.2 billion

New York-based Forest Laboratories Inc. is buying specialty pharmaceutical company Clinical Data Inc. of Newton, Massachusetts, in a $1.2 billion deal in order to gain access to a key antidepressant.

SAIL to invest $12 billion in four steel plants abroad

Steel Authority of India said it planned to put up four three million tonne manufacturing facilities — one each in Indonesia, Mongolia, South Africa and Oman — at a cumulative investment of $12 billion.

The World Bank has stated in its latest report that India can generate 68,000 MW of power, costing less than Rs.6 a unit from renewable energy sources, a step that can address the country's energy security concerns.

India on 18 February adopted the New Consumer Price Index (CPI) that will reflect the actual movement of prices at the micro-level. As per the new series, the CPI has increased to 106 in January from a base of 100 in 2010 (inflation of 6 per cent).The Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation, has introduced the new series of consumer price indices for all-India, and States and union territories separately for rural, urban and combined for the purpose of intra temporal price comparison with effect from January, 2011, with 2010 as the base year.

Bangalore to host BuildArch 2011

Bangalore International Exhibition Services (BIES) in association with Hannover Milano Fairs India will be launching the second edition of BuildArch2011 in Bangalore. 

The exhibition is scheduled from February 23 to 26.

Union Petroleum and Natural Gas Minister Jaipal Reddy on 15 February, dedicated to the nation India's largest naphtha cracker plant at Indian Oil Corporation's (IOCs) Panipat Complex, Haryana.

The complex has been commissioned in 46 months, which compares with the global standard for similar capacity plants and is ahead of average time taken in setting up similar units in India. With the completion of this petrochemicals complex, IOC has crossed a major milestone in realising its aspiration to emerge as an integrated and diversified company.

World's largest truck maker Daimler AG, which is setting up a state-of-the-art commercial vehicle facility at Oragadam near Chennai, will roll out the BharatBenz brand of trucks in 2012.Daimler will launch a range of Bharat Benz trucks from 6 to 49 tonnes, catering to different applications.

Reliance sells 30 pc stake in 23 blocks for USD 7.2 bln

Reliance Industries has announced sale of 30 per cent stake in its 23 blocks including the giant KG-D6 gas fields to UK's BP Plc for 7.2 billion US Dollars.
Reliance has a portfolio of 29 exploration blocks besides the 30 per cent interest it holds in the Panna-Mukta and Tapti oil and gas fields off the west cost. 

BP will pay Reliance an aggregate consideration of 7.2 billion US Dollars and future performance payments of up to 1.8 billion US Dollars.

Rajiv Gandhi International Airport (RGIA) ,Hyderabad has retained its number one position and has been ranked amongst the top airports in its category in the world for the second year in a row in the latest ASQ (Airport Service Quality) rankings of the Airports Council International (ACI).

Besides RGIA, Delhi's Indira Gandhi International Airport (IGIA), has been ranked fourth. Both the airports are operated by the GMR group-led consortia. 

IGIA's ranking was in the group of 25-40 mppa (million passengers per annum). 

This niche league features the world's best airports like Incheon-Seoul; Changi-Singapore and Shanghai Pudong-China.The awards will be presented on April 7, 2011 during ACI conference at the ACI Asia Pacific Regional Conference and Exhibition to be held at New Delhi. 

As many as 153 airports across the globe, including six Indian airports participated in the ASQ survey in 2010.

New CPI series to reflect prices at macro-level

India adopted the new Consumer Price Index (CPI) that will reflect the actual movement of prices at the micro-level. 

As per the new series, the CPI has increased to 106 in January from a base of 100 in 2010 (inflation of 6 per cent), but the government has chosen not to mention the inflation figure, pointing out that the exact level could be arrived only next year.

The Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation, has introduced the new series of consumer price indices for all-India, and States and union territories separately for rural, urban and combined for the purpose of intra temporal price comparison with effect from January, 2011, with 2010 as the base year.

Nokia joins hands with Microsoft

World's largest cell phone maker Nokia and software giant Microsoft will form a broad strategic partnership, a move that will help them to fight stiff competition from rivals Apple and Google in the smartphone market.

New MD & CEO for ICICI Securities

The board of directors of ICICI Securities has appointed Anup Bagchi Executive Director, ICICI Securities, as Managing Director & CEO effective May 1. Madhabi

Puri-Buch, now Managing Director & CEO will move to ICICI Bank also effective May 1.

Mahindra Satyam gets CMMI Level 5

Mahindra Satyam announced that its development centres in Bangalore, Chennai and Pune were assessed at Level 5 for the CMMI Version 1.2-Development model by KPMG

Birla Carbon to acquire Columbian Chem for $875 m

The Aditya Birla Group has moved a step closer to its stated intention of being a significant global player in its major businesses of cement, aluminium and carbon black when it announced  that it entered into a definitive agreement to acquire Atlanta-based Columbian Chemicals Company (CCC) from One Equity Partners, the merchant banking arm of J. P. Morgan Chase & Co for a consideration of $875 million.

Vijaya Bank and Bajaj Allianz signed MoU

Vijaya Bank has signed a memorandum of understanding with Bajaj Allianz Life Insurance to cover the bank's borrowers under a group life insurance plan.

Ranbaxy MoU with Yaroslavl Region

Ranbaxy Laboratories  announced that it had entered into a memorandum of understanding with the Yaroslavl Region Government in Russia for cooperation in healthcare and medical science.

IMF lends $216.6 m to Sri Lanka

The International Monetary Fund (IMF) will lend Sri Lanka about $216.6 million following the completion of a review of the country's economy.

On February 2, the IMF completed the fifth review of Sri Lanka's economic performance under a programme supported by a Stand-By Arrangement. The completion of the review enables the immediate disbursement of the loan bringing total disbursements under the arrangement to $1.516 billion

L&T forms venture with Cassidian

Larsen & Toubro (L&T) and Cassidian, the recently renamed division of EADS, the European defence and aerospace conglomerate, announced the formation of a joint venture to address the Indian defence market.

Health insurance policy portability from July 1

Insurance Regulatory and Development Authority (IRDA) allowed them portability — shifting policies from one insurer to another on same terms — from July 1.

“The authority has examined various issues involved in the portability of the health insurance plan and has issued the necessary orders for effecting portability which will be implemented from July 1,” IRDA says in a statement.

United India Insurance Company has won the "Skoch Financial Inclusion Award -2010". 

Company Managing Director G.Srinivasan received the Award from K.C.Chakrabarthy, Deputy Governor Reserve Bank of India at Chennai

Microsoft India chief quits

Microsoft India Chairman and Corporate Vice President Ravi Venkatesan has resigned, Microsoft said.

Mr. Venkatesan has decided to pursue opportunities outside Microsoft, Microsoft said in a statement.

Industrial growth plunges to 1.6 %

The industrial production plunged to a 20-month low of 1.6 per cent in December against 18.1 per cent growth during the same period last year, notwithstanding the 8.6 per cent GDP growth being projected by the government.

India's GDP (gross domestic product) growth stands revised upwards to 8 percent for 2009-10 from the 7.4 per cent expansion estimated earlier for the fiscal, mainly on the strength of better showing by sectors such as manufacturing and services.

BEL signs MoU with French company

Bharat Electronics Ltd (BEL) and Safran Sagem, a French electronics and communications company, have signed an MoU to develop land navigation and artillery-pointing applications.

SAIL to invest Rs. 5,000 cr to develop Chiria mines

Steel Authority of India Ltd. (SAIL) said it planned to invest around Rs.5,000 crore to develop the mines in Chiria and start mechanised mining in the next three years to feed its plants in Bokaro, Burnpur, Durgapur and Rourkela.



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