India’s GDP expected to be 7.8 pc this year: Report..........

Highlights of Reserve Bank annual Monetary policy for 2008-09..........

Tata Power re-finances $850 mln loan for acquisition .........

Five regional centres of NSD likely to be set up ...........

Kaya Skin Clinic to invest Rs 60 cr for expansion

NEW DELHI, Apr 29: Aiming to strengthen its footprint, Kaya Skin Clinic will invest over Rs 60 crore to open 60 new outlets in the domestic as well as international market by 2011.

"We have planned to open 20 stores each year in the domestic and international market. By 2011, we will add 60 new outlets," Kaya Skin Clinic CEO Rakesh Pandey said on the sidelines of a Technopak Marketing Summit here.

On investment in setting up the outlets, he said the company would spend Rs 1-1.5 crore in each store.

"...Overall we will invest over Rs 60 crore in setting up the outlets, which will completely be owned by us," Pandey said.

Kaya Skin Care currently has 56 clinics in the country and nine in the overseas markets.

The company would set up 24 new stores during the current financial year, 19 in the domestic and five in the international markets.

"We are already present in UAE and now planning to expand to other Middle East markets," Pandey said, adding the company would launch three clinics in Saudi Arabia this financial year.

Kaya Skin Care is targeting a 50 per cent jump in its revenue during the current fiscal. "In 2007-08, we had an income of about Rs 100 crore and we are expecting a 50 per cent jump in our revenue this fiscal," Pandey said. (PTI)

Interest rates may go up, but
liquidity comfortable: Bankers

MUMBAI, Apr 29: Bankers today indicated that the 25 basis point hike in the percentage of cash that banks must hold in reserve was hardly enough to soak up excess liquidity, but some banks may still hike interest rates.

"Ultimately interest rates are subject to demand and supply. Liquidity is good... Liquidity may come down marginally (but) I don’t think liquidity is going to just fall off. I would wait and watch," said K V Kamath, CEO and MD of the country’s second largest lender ICICI Bank.

He was reacting to RBI’s decision to increase Cash Reserve Ratio by 0.25 per cent to suck nearly Rs 9,000 crore surplus cash from the system, which would in turn temper demand for loans and help ease inflation.

"Due to the hike, the profit and loss accounts of banks would take a hit. We can shoulder this much of impact when it comes to the national interest," Kamath told reporters.

HDFC Bank Head (Trading) Ashish Parthasarthy, however, said that RBI’s decision to leave repo and reverse repo (the short-term inter-bank lending and borrowing rates) unchanged was indicative "of the view that interest rates are at a reasonably high level at present."

HSBC India CEO Naina Lal Kidwai said: "It has been a very balanced policy and RBI has done a good balancing act between growth and inflation... (CRR) hike was expected".

On whether interest rates would be hiked by banks, she said: "Some banks might pass it on to the customers. HSBC would decide on its interest rates in about two-weeks."

Canara Bank CMD M B N Rao said: "CRR hike of 0.25 per cent will suck out only a small amount from the system... The liquidity in the banking system is comfortable. Canara Bank’s ALCO will meet in about a week’s time to decide on its interest rates".

SBI Chairman and Managing Director O P Bhatt said there is no simple, direct relationship between the CRR hike and interest rates. "It is not my sense that interest rates should rise," he said.

"Now, GDP is slowing. There seems to a negative momentum to growth. A rate hike would dampen growth. Simultaneously inflation needed to be tackled and so RBI raised the CRR. Around Rs 9,000-10,000 crore will be sucked out," Bhatt said.

He exuded confidence that economic growth will be maintained as per RBI’s projection of 8-8.5 per cent. "We must take a long-term view. There has been a structural shift in the Indian economy for the better," Bhatt added.

ABN AMRO country executive Meera Sanyal said: "She expected a repo or reverse repo hike and not the CRR hike. But the CRR hike is a very sensible move and the percentage is not very significant."

She said inflation is due to supply side constraints and the government’s fiscal policy along with RBI’s monetary policy is expected to bring down the rate of price rise.

Sanyal said: "Every individual bank will have to take its own decision. Her ALCO will meet and decide on the issue." (PTI)

FEE from Tourism in 2007 11.62 billion dollars: Minister

NEW DELHI, Apr 29: India earned an estimated 11.62 billion dollars foreign exchange from Tourism during 2007, the Rajya Sabha was informed today.

In a written reply, Minister of state for Tourism Kanti Singh said a new methodology has been adopted which uses latest provisionally revised estimates of Foreign Exchange Earnings from tourism available from the RBI.

It also uses Consumer Price Index (Urban Non-Manual Employees) in place of the Wholesale Price Index to adjust inflation, she added.

The Minister said the Reserve Bank of India gives preliminary quarterly estimates of FEE from the tourism with a time lag of 3 months and provisionally revised estimates with a time lag of about 6 months.

However, the Ministry prepares monthly advance estimates of FEE from tourism with a time lag of one week, she added.

"The ratio of FEE per visitor from countries other than Bangladesh and Pakistan was derived suing the FEE data from the RBI, but had not been updated using the latest estimates from the RBI," she said.

Ms Singh conceded that significant variation resulted between estimates of FEE from Tourism Ministry and the RBI.

Listing out steps taken by the Government to promote tourism and improve FEE, she said the Ministry is focusing on growth of hotel infrastructure, enhancing connectivity through augmentation of air capacity and improving road infrastructure to major tourist attractions. (UNI)

India’s GDP expected to be 7.8 pc this year: Report

NEW DELHI, Apr 29: On the back of strong government spending and investment activity, the global slowdown will only have a modest effect on Indian economy whereas the country’s GDP is expected to ease to 7.8 per cent this year, says global credit rating agency Moody’s in its latest report.

The report by Moody’s Economy.Com noted that slowing exports and tight monetary policy are the key downside risks to expansion this year.

Further, government’s current priority to improve infrastructure and reduce poverty would witness strong demand for workers and household income grow at a stunning pace this year.

Public expenditure would receive a major boost in anticipation of the general election to be held in May 2009, the report said.

"...However, thanks to strong Government spending and investment activity, the global slowdown will have only modest effect. India’s GDP growth is expected to slow to around 7.8 per cent in 2008, and rebound to 8 per cent the following year as the global economy rebuilds momentum," the report titled ‘India Outlook: A Challenging Time Ahead’ noted.

Meanwhile, the Reserve Bank of India today raised the Cash Reserve Ratio (CRR) by 0.25 per cent to 8.25 per cent in its Annual Monetary Policy. The new CRR would be effective from May 24.

Pointing out that domestic demand is a key driver of expansion in the country, the report said that amid rapid wage growth, household demand would be solid.

However, strong inflation coupled with high borrowing costs would weigh on household budgets and dampen consumer spending.

"Private consumption - which constitutes around 55 per cent of the emerging giants annual GDP - is expected to climb 5 per cent this year, slightly slower than the increase of 5.9 per cent seen in 2007," the credit rating agency said.

In addition, the industrial production growth for this year "looks set to moderate to 7.8 per cent, a still-healthy figure, and quicken to 8.3 per cent next year as global demand recovers".

Softer domestic demand amid tight monetary conditions along with slowing exports are both key risks to Indian manufacturers.

According to the report, the Government would continue to record budget deficits in light of higher spending. However, the expected 10.7 per cent rise in public expenditure this year should help provide much needed support to the economy amid a weakening external sector, it added.

In addition, the report said the country’s import growth would be around 10.2 per cent this year and would touch 11.4 per cent in 2009. (PTI)

Highlights of Reserve Bank
annual Monetary policy for 2008-09

MUMBAI, Apr 29: Following are the highlights of Reserve Bank’s Annual Monetary Policy for 2008-09.

RBI hikes CRR by 0.25 pc to 8.25 pc with effect from May 24

Keeps repo, reverse repo, bank rate unchanged

Repo rate at 7.75 pc, reverse repo and bank rate at 6 pc

GDP growth for 2008-09 to be in range of 8-8.5 pc

Inflation to be brought down to 5.5 pc in 2008-09

Resolve to bring it between 4-4.5 pc

Medium term objective for inflation around 3 pc

Deposits to increase by around 17 pc.

Bank loan limit for individuals for housing up to Rs 30 lakh

Adjusted non-food credit projected to rise 20 pc in FY’09

Domestic oil refiners to be allowed to hedge price risks

Currency futures to be launched in bourses; framework by May

Loans to RRBs for farm classified as indirect agri finance

Dissemination of details of charges levied by banks

Supervisory review of banks’ exposure to commodity sector

E-payment of transactions of Rs 1 crore and above. (PTI)

Tata Power re-finances $850 mln loan for acquisition

NEW DELHI, Apr 29: Tata Power Company Ltd today said it has refinanced 850 million dollar of loan, out of its total 950 million dollars, taken for the acquisition of 30 per cent equity stakes (Purchase) in major Indonesian thermal coal companies.

The company had to acquire PT Kaltim Prima Coal (KPC) and PT Arutmin Indonesia (Arutmin) (together the Coal Companies), as well as related trading companies owned by PT Bumi Resources Tbk (Bumi).

The 950 million dollar bridge loan had a tenor of one year of which 850 million dollar is being refinanced with long-term loans. The refinancing consists of a non-recourse 580 million dollar facility and a 270 million dollar facility with recourse to the company.

"We are happy to refinance the bridge loan at competitive pricing in such challenging financial markets. The rising coal prices in the international market reinforce our belief that our investment in Indonesian coal companies is timely and pragmatic," Tata Power Managing Director, Prasad R Menon said.

The coal companies (KPC and Arutmin) are together among the top three largest exporting thermal coal mines in the world.

(UNI)

Five regional centres of NSD likely to be set up

NEW DELHI, Apr 29: The Government today said five regional schools of the capital-based National School of Drama (NSD) were proposed to be set up in various parts of the country during the Eleventh Plan.

In a written reply in the Rajya Sabha, Culture and Tourism Minister Ambika Soni said the Broad-Based Committee of the National School of Drama had recommended opening of five regional schools.

As per the recommendation, the existing Regional Resource Centre of NSD at Bangalore has to be upgraded into a full-fledged regional school.

The committee has also recommended the setting up of one such school in Kolkata, Jammu and Kashmir and Maharashtra or Goa. Further, a Regional Training Centre in the North-East has also been proposed.

Ms Soni said it was proposed to operationalise these centres during the eleventh Plan period (2007-12). (UNI)