India's GDP Expands at 8.9%

Chandrasekhar Atreya
30 Nov, 2010
New York City

Stocks in Mumbai responded to faster than anticipated economic growth in the quarter to September. Finance Minister Mukherjee revised fiscal year economic growth outlook to 8.75%. India threatens to cancel telecom licenses of 85 companies that were either ineligible or are still not in operation.

[R]4:15 PM Mumbai – Stocks in Mumbai responded to faster than anticipated economic growth in the quarter to September. Finance Minister Mukherjee revised fiscal year economic growth outlook to 8.75%. India threatens to cancel telecom licenses of 85 companies that were either ineligible or are still not in operation.[/R]

Stocks in Mumbai trading closed higher after the release of second quarter GDP. Regional markets closed lower on local news and worries that euro-zone debt contagion may widen to Spain and Portugal.

Central Statistical Organization in a statement said that economy expanded at 8.9% in the fiscal second quarter ending in September. The faster than anticipated growth was supported by a rise of 4.4% in agriculture.

Finance Minister Pranab Mukherjee revised his estimate for the fiscal year economic growth to 8.75% from 8.5%, citing two quarterly robust economic expansions.

Service industry expanded at 12.1% and manufacturing increased at 9.8% but agriculture, the weakest sector in the economy that employs nearly half the people in the nation increased at 4.4% compared to 2.5% in the previous quarter.

Economy has expanded at a steady pace after falling to 6.7% increase in fiscal 2008 and rebounding to 7.4% in fiscal 2009 and now is estimated to grow at least 8.75% in the current fiscal year.

The Sensex index in Mumbai trading increased 116.15 or 0.6% to 19,521.25 and the Nifty 50 index rose 32.70 to 5,862.70.

The rupee declined to 45.95 but recovered from earlier losses to 46.12 to a dollar.

Reserve Bank of India on Monday announced a temporary reduction in the reserve requirements for banks to help them tide over liquidity shortage.

The move will free Rs 40,000 crore and ease the availability of funds to corporations ahead of advance tax payment deadline in two weeks.

Dewan Housing Corp emerged as the front runner to acquire Deutsche Postbank Home Finance in a deal expected to be roughly Rs 1,100 crore, according to media reports.

Nuclear Power Corp of India plans to set up joint ventures with Steel Authority of India Ltd and Indian Railways to set up nuclear reactors as it targets to add nearly 60,000 megawatts of new capacity in two decades.

The company also hopes to involve private players in nuclear power plants in the future if the government allows such a move, Sreyans Kumar Jain, the Chairman of NPCIL said in Mumbai today.

The Oil Ministry said today it will take a decision on the application of London-based Cairn Energy to transfer majority stake in its Indian arm that holds key energy assets including India’s largest oil field to Vedanta Resources by February end, according to a senior official.

Since the application for transfer of all 10 blocks has been received only last week, we will complete or review only by February, said Oil Secretary S. Sundareshan.

Shipping Corp of India is planning to aggressively expand its fleet capacity by as much as 54% in the next three to four years in a bid to meet anticipated demand and also reduce the average age of its fleet.

The company has drawn up plans to order an additional 24 vessels in the current fiscal year with a capacity of 1.5 million deadweight tons, in both the shipping and offshore segments. The vessels are expected to be delivered over the next few years.

Non Resident Indians working overseas sent more money back home than any of their global counterparts, according to a report.

Indians from abroad remitted $50 billion in 2009 and in contrast overseas workers from China remitted $47 billion, according to the World Migration Report of 2010.

The public offering of state-run Manganese Ore India Ltd to raise $276 million was fully subscribed by mid-morning today, the second day of the issue, according to data from the stock exchange.

The central government is selling 10% stake in the offer while the state governments of Maharashtra and Madhya Pradesh are selling 5% each. The IPO will close on Tuesday for institutional investors and on Wednesday for retail investors.

Private power producers will invest about Rs 91,000 crore in Tamil Nadu in the next three to five years to generate 18,140 megawatts of power, according to Deputy Chief Minister M.K. Stalin.