Monday, February 8, 2010

Recovery on track: GDP to grow at 7.2%

India’s gross domestic product (GDP) — the total income of all economic entities in the country — will grow at 7.2 per cent in 2009-10, an official forecast said on Monday, confirming signs of a turnaround amid worries about the drought-hit farm sector. Turning the corner

The GDP forecast put out by the Central Statistical Organisation (CSO), however, is a shade lower than projections by the Reserve Bank of India (RBI) and the Finance Ministry.

The ministry, in its mid-term review of the economy in December, had pegged the current year’s growth at 7.75 per cent while RBI had projected the economy to grow at 7.5 per cent.

“This is an advance estimate,” finance secretary Ashok Chawla said. “What we normally see when the final numbers come out for the third and fourth quarters (in May) is an upward bias and we are sure that the same is going to happen this year too.”

The latest data could set the tone for withdrawal of stimul-us measures announced last year to counter the downturn. All eyes will be on Budget 2010, to be presented later this month.

“In terms of what the future policy framework is going to be, I think you will have to wait for the budget,” Chawla said.

The bad news: agricultural production is expected to shrink by 0.2% as a result of last year’s drought.

Growth of the Indian economy slowed to 6.7% in 2008-09 after growing at close to 9% for four straight years before the meltdown hit home in September 2008.

A Chinese official said India had the potential to overtake China as the world’s fastest growing economy. China’s GDP grew by 8.7 per cent in 2009.

“India attaches more importance to knowledge and technology innovation in the development of the new-and-high tech industries,” said Dai Xianglong, chairman of China’s National Council for Social Security Fund, while speaking at the DSP Merrill Lynch Investor Conference in New Delhi. “In future, the economic growth rate of India is likely to exceed China’s.”

India Inc said it is too early to roll back the stimulus package.

“It is important to maintain the policy framework so as not to throttle the growth momentum,” said FICCI's President Harshpati Singhania.

Chief Economic Advisor Kaushik Basu said the data confirms the economy has turned round the corner. “It (advance estimate) confirms what earlier was a matter of speculation, that the country has clearly turned from the downturn,” he said.

The percentage growth under the eight categories of business activities for this fiscal are as under, with figures for previous fiscal in brackets:

- Overall gross domestic product: 7.2 (1.6)

- Agriculture, forestry and fishing: -0.2 (1.6)

- Mining and quarrying: 8.7 (1.6)

- Manufacturing: 8.9 (3.2)

- Electricity, gas and water supply: 8.2 (3.9)

- Construction: 6.5 (5.9)

- Trade, hotels, transport and communication: 8.3 (7.6)

- Financing, insurance, real estate business services: 9.9 (10.1)

- Community, social and personal services: 8.2 (13.9)
HT

Economy to grow at 7.2%, says CSO

NEW DELHI: The Indian economy will grow at 7.2% in 2009-10, said the Central Statistical Organisation (CSO) on Monday in its advance estimate, compared to the finance ministry's and RBI's projections of 7.75% and 7.5% respectively. In 2008-09, the economy grew at 6.7%.

The manufacturing sector is estimated to grow at 8.9%, compared to 3.2% in the last financial year. This, many economists feel, may push the government to phase out stimulus package in the coming Budget.

"We should say stimulus has succeeded and we should begin to phase it out now," Planning Commission deputy chairman Montek Singh Ahluwalia said even as the domestic industry strongly pitched for continuation of the tax concessions.

CSO's estimate — which is a bit lower than the finance ministry's projection — has not dampen the mood in the government. Even the sensex, which fell in the initial trading, recovered later and closed 20 points up at 15,936 after the announcement of GDP growth figure.

To achieve 7.2% growth in 2009-10, the economy is expected to grow at 7.4% in the second half as against a growth rate of 7% in the first half. This suggests the economic activities are picking up. Officials in the finance ministry are hoping that their projection of 7.75% will come true. Finance secretary Ashok Chawala said the current estimate of CSO is likely to be revised upward when the figures for third and fourth quarters will be released. He argued that this had happened earlier also.

The main reason behind the economy is estimated to grow at a lower pace is the negative growth in the agriculture, forestry and fishing and slowdown in the services. According to CSO, these sectors, which constitute 14.6% of the economy, will grow at -0.2% as against 1.6% in 2008-09. Community, social and personal services, which had grown at 13.9% in 2008-09, is estimated to grow only at 8.2% in 2009-10. Similarly, financing, insurance, real estate and business services also slowed down a bit to 9.9% as against 10.1% in 2008-09.

However Ahluwalia said that economy is back on 7% plus growth rate and expected it to clock better growth rate of 8% next fiscal.

TOI

Sensex fails to regain 16000-mark, ends in green

MUMBAI: In highly choppy trade, the BSE benchmark index Sensex failed to regain the psychological 16,000-mark today, despite ending in the positive terrain for the second day with a gain of 20 points, as funds continued to their selling spree in heavy-weight counters.

Tracking Asia, the Sensex opened 95 points down and shuttled between 16,061.41 and 15,651.99 before shutting the shop for the day up a paltry 19.96 points at 15,935.61, as Reliance and Infosys bucked the general downtrend. These two stocks alone carry nearly 23% weight in the index.

While the market remained low at the outset, a last-hour buying on better GDP projection and higher opening in European markets saved the market from any major fall.

The wide-based National Stock Exchange index Nifty ended almost flat gaining a paltry 3.15 points to 4,760.40, after swaying between 4,799.05 and 4,675.40 points. The index opened 26 points down following poor Asian cues.

The gains were led by capital goods, tech, bank and realty indices which rose between 0.56 to 0.31%; while metals, auto and healthcare counters lost between 1.38 to 0.11%.

The metal index suffered the most by shedding 1.38% to 15,392.80, after Tata Steel slipping by Rs 24.90 to Rs 533.80 and the biggest aluminum producer Hindalco sinking by Rs 5.30 to Rs 136.10. PTI RS SUN DP KPS BEN BEN 02081625 NNNN.

TOI

MCI threatens de-recognition of 11 medical colleges

NEW DELHI: The fate of 11 medical colleges is now hanging in the balance.

On Saturday, the Medical Council of India issued showcause notices to the college authorities, threatening them with de-recognition for failing to adhere to MCI norms despite repeated warnings.

These 11 colleges, which have two months to rectify their shortcoming or else get de-recognised, have among them over 1,300 MBBS seats.

Confirming this to TOI, MCI president Dr Ketan Desai said, "It is true that these colleges are facing de-recognition. When we carried out inspections, several deficiencies were noticed in these colleges in terms of teaching staff, number of resident doctors, patient load of the resident hospital and infrastructure."

Explaining the circumstances, Dr Desai said once medical colleges get recognition, they are reviewed by MCI every five years on whether the colleges are maintaining standards as stipulated by the MCI and upgrading their facilities.

If found lacking, the colleges are given a maximum of two years to rectify the shortcomings. A final showcause notice is issued when colleges don't adhere to the norms even at the end of the two years.

"In the next two months, if the 11 colleges don't put in place the required norms, we will recommend the withdrawal of recognition of the MBBS degree of these colleges to the Union health ministry," Dr Desai said.

The list of colleges under fire include GSVM Medical College (Kanpur), SN Medical College (Agra), MLN Medical College (Allahabad), Guru Gobind Singh Medical College (Faridkot), LLRM Medical College (Meerut), Maharashtra Institute of Medical Sciences (Latur), J N Medical College (Aligarh), BM Patil Medical College (Bijapur) and Vinayaka Missions Medical College Hospital (Pondicherry).

Meanwhile, MCI has also sent reminders to 30 other medical colleges across India for renewal of permission to run an MBBS course, failing which they will not be able to admit students in the 2010-2011 academic session. Under MCI norms, till a medical college gets recognised, it has to take permission every year for five years to admit MBBS students.

MCI, after inspection, recommends permission to the government of India to allow continuance of MBBS courses in such colleges.

"Around 30 medical colleges have been sent letters to apply for renewal of permission immediately or else the will not be able to admit students in the coming academic year," Dr Desai told TOI.

The maximum number of colleges in question in this category are from Kerala (7), followed by Uttar Pradesh (6) and Orissa (3).

Dr Desai added, "We have also sent notices to seven medical colleges regarding increasing of seats. While some of them have increased seats from 50-100, others want to increase it to 100-150. Colleges for five years are required to take renewal permission from MCI over this increased intake of students."

TOI