IIP numbers: Azim Premji, Narayana Murthy call for reforms; says govt needs a reboot
BANGALORE: Two men identified closely with the spectacular growth of India's software industry have torn into the United Progressive Alliance regime, accusing it of mismanagement that is threatening the country's economic prospects.
The remarks by Azim Premji and NR Narayana Murthyexpressing disenchantment with the Manmohan Singh government reflect a widespread sentiment in corporate India that is most often not expressed openly.
Murthy, who co-founded Infosys, India's second-largest software exporter, was stinging in his criticism of theUPA regime, particularly Singh, telling Morgan StanleyResearch that between 2004 and 2011 India has not introduced many reforms.
"There was a lot of confidence that India would indeed do whatever was necessary because the person who was the face of economic reforms in 1991 is our current PM. Therefore, there was a lot of expectation from outside India," he was quoted as saying in a June 11 report.
"Over the past 3-4 months, India's image seems to have suffered. As an Indian, I feel very sad that we have come to this state," he said.
For many months, the Congress-led government has been accused of being too afraid to take bold decisions while growth and investment slow down, inflation and deficits remain high and the rupee slides. The government insists it is doing all it can and has pointed to factors beyond its control, such as coalition compulsions, costly crude oil and the debt crisis in Europe.
'COUNTRY WITHOUT A LEADER'
Premji, the founder and chairman of Wipro, said at the company's analyst meet in Mumbai on Monday that "we are working without a leader as a country".
He was speaking on the same day that ratings agency Standard & Poor's said India could become the first BRIC nation to lose its investment-grade status. At least five analysts who attended confirmed his remarks to ET and said that Premji also spoke about how policy paralysis is hurting investor sentiment.
Twice last year, a group of 14 eminent citizens, among them Premji and Deepak Parekh of HDFC, wrote open letters to India's leaders urging swift action to improve governance. They have been maintained public silence until now.
Parekh renewed his criticism of the government in the company's annual report, blaming it squarely for the ebbing business confidence and wariness in the investment climate.
Late last year, the government flattered to deceive by first announcing a rule change that would allow foreign investment in multi-brand retail and then walking back on the decision after pressure from allies.
Since then, the government has amended tax laws retrospectively, scaring foreign and Indian investors alike, while economic expansion has slowed to its slowest pace in nearly a decade. On Monday, the statistics office announced that industrial output grew by a mere 0.1%.
"This is where the government should not send the kind of signals that it has recently sent by introducing tax laws on a retrospective basis. Nobody can understand intentions; people only read the laws and then act," Murthy was quoted as saying.
The remarks by Azim Premji and NR Narayana Murthyexpressing disenchantment with the Manmohan Singh government reflect a widespread sentiment in corporate India that is most often not expressed openly.
Murthy, who co-founded Infosys, India's second-largest software exporter, was stinging in his criticism of theUPA regime, particularly Singh, telling Morgan StanleyResearch that between 2004 and 2011 India has not introduced many reforms.
"There was a lot of confidence that India would indeed do whatever was necessary because the person who was the face of economic reforms in 1991 is our current PM. Therefore, there was a lot of expectation from outside India," he was quoted as saying in a June 11 report.
"Over the past 3-4 months, India's image seems to have suffered. As an Indian, I feel very sad that we have come to this state," he said.
For many months, the Congress-led government has been accused of being too afraid to take bold decisions while growth and investment slow down, inflation and deficits remain high and the rupee slides. The government insists it is doing all it can and has pointed to factors beyond its control, such as coalition compulsions, costly crude oil and the debt crisis in Europe.
'COUNTRY WITHOUT A LEADER'
Premji, the founder and chairman of Wipro, said at the company's analyst meet in Mumbai on Monday that "we are working without a leader as a country".
He was speaking on the same day that ratings agency Standard & Poor's said India could become the first BRIC nation to lose its investment-grade status. At least five analysts who attended confirmed his remarks to ET and said that Premji also spoke about how policy paralysis is hurting investor sentiment.
Twice last year, a group of 14 eminent citizens, among them Premji and Deepak Parekh of HDFC, wrote open letters to India's leaders urging swift action to improve governance. They have been maintained public silence until now.
Parekh renewed his criticism of the government in the company's annual report, blaming it squarely for the ebbing business confidence and wariness in the investment climate.
Late last year, the government flattered to deceive by first announcing a rule change that would allow foreign investment in multi-brand retail and then walking back on the decision after pressure from allies.
Since then, the government has amended tax laws retrospectively, scaring foreign and Indian investors alike, while economic expansion has slowed to its slowest pace in nearly a decade. On Monday, the statistics office announced that industrial output grew by a mere 0.1%.
"This is where the government should not send the kind of signals that it has recently sent by introducing tax laws on a retrospective basis. Nobody can understand intentions; people only read the laws and then act," Murthy was quoted as saying.
The ZRG analysis also shows that UPA-II ministries and departments were not even able to meet half of their promises. Out of a total of 6,734 assurances, UPA-II was able to deliver only on 3,226 of them, which are just 48 in percentage terms. At year end, the government failed to fulfill 3,508 promises, which is more than 50 per cent of the total target.
In fact, the UPA should take cue from its previous avatar which performed exceedingly well. Between 2004 and 2008, the government delivered on 9,538 promises out of a total 10,356 commitments made in the August House, a whopping 92 per cent of the total. In contrast to 2011, the remainder was merely 818.
Pranab Mukherjee cautions PSU banks on steep rise of bad loans
NEW DELHI: Finance Minister Pranab Mukherjee has cautioned three state-run banks, including the country's largest State Bank of India, on the steep rise of bad loans in their portfolio.
Although most of the 21 state-run banks are reeling under the stress of bad loans, called non-performing assets or NPAs in industry parlance, the proportion of such loans to total outstanding credit is the highest at SBI, Central Bank of India and UCO Bank. "Mukherjee expressed concern over the rise in bad loans especially in these three banks," said a banker who attended the finance minister's meeting with chairmen of state-run banks and financial institutions in Delhi on Tuesday. "He also pointed out that all banks should strengthen their recovery management," the banker said.
While the average ratio of gross NPAs to gross advances of state-run banks was 3.10% at the end of March, it was 5.22% in case of SBI, 3.93% for Central Bank and 3.73% for UCO Bank.
The gross NPA to gross advance ratio of SBI and Central Bank has risen by more than 1% in the last one year. Last month, Mukherjee had warned state-run banks against their deteriorating asset quality, saying NPAs have grown at an "uncomfortable and unacceptable rate in the past couple of years".
"The Reserve Bank has recently advised selected banks to take necessary steps for appropriate NPA management," he had said at a function in Delhi.
A finance ministry official, however, downplayed Mukherjee's remarks, saying he expressed concern for all the banks and not just these three. The official said the finance minister was appraised that their asset quality of banks would deteriorate if the credit growth slows further.
Speaking to journalists later, Mukherjee said recovery of outstanding dues was unprecedented in the last quarter of 2011-12.
"Lenders have taken up the challenge to reduce bad loans," he said, adding that the momentum was to be kept as timely action would ensure the financial health of the banking sector
Although most of the 21 state-run banks are reeling under the stress of bad loans, called non-performing assets or NPAs in industry parlance, the proportion of such loans to total outstanding credit is the highest at SBI, Central Bank of India and UCO Bank. "Mukherjee expressed concern over the rise in bad loans especially in these three banks," said a banker who attended the finance minister's meeting with chairmen of state-run banks and financial institutions in Delhi on Tuesday. "He also pointed out that all banks should strengthen their recovery management," the banker said.
While the average ratio of gross NPAs to gross advances of state-run banks was 3.10% at the end of March, it was 5.22% in case of SBI, 3.93% for Central Bank and 3.73% for UCO Bank.
The gross NPA to gross advance ratio of SBI and Central Bank has risen by more than 1% in the last one year. Last month, Mukherjee had warned state-run banks against their deteriorating asset quality, saying NPAs have grown at an "uncomfortable and unacceptable rate in the past couple of years".
"The Reserve Bank has recently advised selected banks to take necessary steps for appropriate NPA management," he had said at a function in Delhi.
A finance ministry official, however, downplayed Mukherjee's remarks, saying he expressed concern for all the banks and not just these three. The official said the finance minister was appraised that their asset quality of banks would deteriorate if the credit growth slows further.
Speaking to journalists later, Mukherjee said recovery of outstanding dues was unprecedented in the last quarter of 2011-12.
"Lenders have taken up the challenge to reduce bad loans," he said, adding that the momentum was to be kept as timely action would ensure the financial health of the banking sector
Capital goods output shrinks 16.3% in April; data quality in doubt
NEW DELHI: The industrial production growth stalled in April because of the sharp contraction in the production of capital goods. But large swings in some of the key sub-sectors of the capital goodscomponent of the index of industrial production (IIP) have again raised data quality concerns.
The production of capital goods contracted 16.3% in April-the second successive month of decline-against a 6.6% rise during the corresponding month last year.
Capital goods include cables and wires, metal ancillaries, rubber and plastic goods, among others, data for which has remained volatile, impacting the accuracy and stability of the overall index in the past.
The production of cable and wires contracted 75% in April, contributing maximum to the decline in the production of capital goods.
On the other hand, the output of medical and optical instruments rose an impressive 29.4%, up from a 9.4% contraction during the previous year.
Other items in the red included electrical machinery and apparatus with a massive contraction of 49.2% against a growth of 2.6% last year while office accounting machinery contracted by 14.9% after growing at 37.5% last year.
The production of capital goods contracted 16.3% in April-the second successive month of decline-against a 6.6% rise during the corresponding month last year.
Capital goods include cables and wires, metal ancillaries, rubber and plastic goods, among others, data for which has remained volatile, impacting the accuracy and stability of the overall index in the past.
The production of cable and wires contracted 75% in April, contributing maximum to the decline in the production of capital goods.
On the other hand, the output of medical and optical instruments rose an impressive 29.4%, up from a 9.4% contraction during the previous year.
Other items in the red included electrical machinery and apparatus with a massive contraction of 49.2% against a growth of 2.6% last year while office accounting machinery contracted by 14.9% after growing at 37.5% last year.
S&P: India risks losing investment grade rating
Collected from the News paper THE HINDU ( 12th June 2012)
Cites division of roles between "powerful" Sonia and "unelected" Manmohan for impasse
In an unprecedented broadside at the UPA-II government's style of functioning, global rating agency Standard and Poor's (S&P) on Monday pointed to the operational roles of Congress president Sonia Gandhi and “unelected” Manmohan Singh as Prime Minister for the current economic impasse and threatened to downgrade India's sovereign credit rating to ‘speculative' from the lowest notch of ‘investment' grade.
In its report, ‘Will India be the first BRIC fallen angel,' S&P said: “Slowing GDP growth and political roadblocks to economic policy-making could put India at the risk of losing its investment grade rating” and pointed out that the crux of the current political problem in going forward with economic liberalisation was the nature of leadership within the Central government and not “obstreperous” allies or an “unhelpful” Opposition.
Having scaled down India's rating outlook to ‘negative' from ‘stable' in April this year, the S&P report, authored by its credit analyst Joydeep Mukerji, highlighted that the Congress was divided on economic policies, and there was substantial opposition to any serious liberalisation. It pointed to the division of roles between a politically “powerful” Congress president and an “appointed” Prime Minister as having “weakened the framework for making policy, in our view.”
“Moreover, paramount political power rests with the leader of the Congress, Sonia Gandhi, who holds no Cabinet position, while the government is led by an unelected Prime Minister Manmohan Singh, who lacks a political base of his own,” it said.
FinMin Mukherjee to meet heads of state-run banks, financial institutions Tuesday
New Delhi: India's Finance Minister Pranab Mukherjee will meet heads of public sector banks andfinancial institutions Tuesday, June 12 to review their annual performance for the last financial year and to discuss plans for the current fiscal 2012-13, a statement issued by the Ministry of Finance said Monday.
The meeting comes in the backdrop of a challenging economic environment, the statement said.
Various issues related to the state-run banks' micro, small and medium enterprises (MSME ) credit, housing loans, education loans and non-performing assets (NPAs) will figure in the talks, the statement said.
"The issues relating to New Pension Scheme -- NPS Lite, known as 'Swavalamban' featuring self sustainability, scalability, individual choice, maximizing outreach etc will also be discussed," it added.
The role of Regional Rural Banks (RRBs) with their vast reach in the remote regions of the country will also be deliberated.
"Their (RRBs) recapitalization and strengthening with technology will also be discussed as they have come on CBS (core banking solution) platform," it said.
Earlier this month, Mukherjee had said that Indian banks' eroding asset quality is a major cause of concern and added that he hopes that banks will take measures to reduce their bad loans.
Indian state-run banks' NPAs were at 3.3% of advances in the last financial year 2011-12, Banking Secretary D K Mittal had said earlier.
According to rating agency CRISIL, Indian banks' asset quality will continue to remain under pressure in the current financial year as well.
High interest rates, weakness in the agriculture and small and medium enterprises segments, and the migration to system-based NPA recognition led to high slippages on assets of banks in the last few quarters, the rating agency had said.
Earlier this year, the Reserve Bank of India (RBI) had also met heads of public sector banks to discuss the issue of mounting bad loans and asked the lenders to be more cautious while lending to sectors like aviation, steel and mines, textile and power and step up measures to reduce their NPAs although it termed the current level of bad loans as manageable.
Recently, global credit rating agency Standard & Poor's (S&P) cut outlook on its long-term counterparty credit ratings on 11 major Indian public and private sector financial institutions, including State Bank of India, ICICI Bank and HDFC Bank, to 'negative' from 'stable', after warning earlier. While another rating agency Moody's Investors Service downgraded rating of India's three largest private sector lenders -- ICICI Bank, HDFC Bank and Axis Bank.
http://in.finance.yahoo.com/news/finmin-mukherjee-meet-heads-state-143011218.html
The meeting comes in the backdrop of a challenging economic environment, the statement said.
Various issues related to the state-run banks' micro, small and medium enterprises (MSME ) credit, housing loans, education loans and non-performing assets (NPAs) will figure in the talks, the statement said.
"The issues relating to New Pension Scheme -- NPS Lite, known as 'Swavalamban' featuring self sustainability, scalability, individual choice, maximizing outreach etc will also be discussed," it added.
The role of Regional Rural Banks (RRBs) with their vast reach in the remote regions of the country will also be deliberated.
"Their (RRBs) recapitalization and strengthening with technology will also be discussed as they have come on CBS (core banking solution) platform," it said.
Earlier this month, Mukherjee had said that Indian banks' eroding asset quality is a major cause of concern and added that he hopes that banks will take measures to reduce their bad loans.
Indian state-run banks' NPAs were at 3.3% of advances in the last financial year 2011-12, Banking Secretary D K Mittal had said earlier.
According to rating agency CRISIL, Indian banks' asset quality will continue to remain under pressure in the current financial year as well.
High interest rates, weakness in the agriculture and small and medium enterprises segments, and the migration to system-based NPA recognition led to high slippages on assets of banks in the last few quarters, the rating agency had said.
Earlier this year, the Reserve Bank of India (RBI) had also met heads of public sector banks to discuss the issue of mounting bad loans and asked the lenders to be more cautious while lending to sectors like aviation, steel and mines, textile and power and step up measures to reduce their NPAs although it termed the current level of bad loans as manageable.
Recently, global credit rating agency Standard & Poor's (S&P) cut outlook on its long-term counterparty credit ratings on 11 major Indian public and private sector financial institutions, including State Bank of India, ICICI Bank and HDFC Bank, to 'negative' from 'stable', after warning earlier. While another rating agency Moody's Investors Service downgraded rating of India's three largest private sector lenders -- ICICI Bank, HDFC Bank and Axis Bank.
1 comment:
Most of the big scams are found in India and the money which has been collected by the people are deposited in Swiss bank. In India we can find all the politicians are corrupted.
Indian Corruption
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