India Lifts GDP Outlook to 9%; Stocks Weak

Chandrasekhar Atreya
08 Dec, 2010
New York City

Stocks in Mumbai dropped more than 1% on steady selling by speculators. Finance Minister Mukherjee lifted GDP growth estimate to 9% in the current mid-year review. Passenger car sales up 21% and motorcycle sales surge 16%. Direct tax collections to November in the fiscal year soar 17.9%.

[R]5:00 PM Mumbai, 8:30 AM New York – Stocks in Mumbai dropped more than 1% on steady selling by speculators. Finance Minister Mukherjee lifted GDP growth estimate to 9% in the current mid-year review. Passenger car sales up 21% and motorcycle sales surge 16%. Direct tax collections to November in the fiscal year soar 17.9%.[/R]

Stocks in Mumbai trading fell as sellers overwhelm the buyers and the index failed to stay near 20000. The index edged lower as Finance minister lifted his outlook for the economic growth to 9%.

The BSE Sensex slipped 1.14% or 226.50 points to close at 19,708.14. Metals, banks and auto stocks were among the major losers. The CNX Nifty on the National Stock Exchange lost 72.85 points to reach 5,903.70.

The rupee lost 36 paisa and ended the day at Rs 45.47 to a dollar.

Domestic passenger car sales surged 20.79% in November from a year ago to 161,497 units while sales of motorcycles soared 15.61% to 710,182 units, according to the data released today by the Society of Indian Automobile Manufacturers.

Total two-wheeler sales in the month surged 17.68% to 930,370 units, while sales of commercial vehicles jumped 18.26% to 48,314 units in November.

The Indian economy is expected to reach the pre-crisis growth rate of 9% in the current fiscal year on the back of a robust recovery in agriculture, industry and services, according to the mid- year analysis by the government released on Tuesday.

Finance Minister Pranab Mukherjee commented after presenting the mid-year report in the parliament noted the recent downtrend in inflation.

Indian direct tax collections soared 17.85% to Rs 217,000 crore in the April-November period of this fiscal year compared to Rs 184,000 crore in the prior year period. With this the direct tax collections for the first eight months in the current fiscal year just exceeded 50% of the budgeted target of Rs 430,000 crore.

India will require investments of over Rs 40,000 crore to build infrastructure to reach the governmental target of 214 million broadband connections by 2014 that can cover 700 million people according to a study by the Confederation of Indian Industry.

The broadband market in India is at a nascent stage with household penetration limited to approximately 4% at the end of 2009. Sanjay Kapoor, Bharti Airtel CEO, who heads the CII’s national committee on telecom and broadband, identified seven different business models to enhance broadband penetration.

He also said these initiatives were unlikely to succeed without the active support from the Universal Service Obligation Fund, which has an unutilized amount of over Rs 20,000 crore.

Jindal Steel and Power Ltd on Tuesday announced that its Jindal Shaheed plant in Oman started production almost five months ahead of the targeted date of March 31, 2011, with the production of hot briquetted iron.

The company had installed a 1.5 million ton gas-based plant at the Sohar Industrial Port area of Sohar in Oman and will serve the rising demand for steel in the Middle East and North African countries where the demand exceed the supply by 12 million tons, according to a company release noted in New Delhi.