India Insight

L&T Infra Finance CEO upbeat on India’s economic recovery by 2015

India’s economy recorded its slowest growth in a decade in the fiscal year ending in March but the CEO of L&T Infrastructure Finance, that provides loans to companies such as Jaypee Group to develop roads and other infrastructure, is hopeful of an economic turnaround in less than two years that will boost business prospects.

The company, part of India’s largest engineering and construction conglomerate Larsen & Toubro, will likely end up dealing with a slowdown in business growth in the current financial year, but might bounce right back next year if the winner of India’s federal elections due in 2014 starts spending on infrastructure projects.

Reuters spoke to Chief Executive Officer Suneet Maheshwari about his outlook for the industry and the Indian economy. Here are excerpts from the interview:

Q: What is your outlook for the industry?

A: It is difficult to imagine for any individual that we will always be doing good. Sometimes you will have a viral attack. Business is also like that. To believe that this will pass off in one year for the world and for India will be extreme short-sightedness and lack of understanding of what the real world is … I know it is dismal, but which country in the world is showing 5.3.-5.4 percent growth? This year I believe, with whatever Chidambaram is doing, we will hit 6 percent growth.
I personally feel that this view about India by ratings agencies – to put it on a pathway to downgrade or a watch towards a negative outlook – that is being too severe on India. And those who are doing it have probably not understood India very well.

Q: Do you feel the upcoming general elections could delay plans or government spending?

India GDP: What the economists are predicting

Investors and policymakers will be closely watching India’s fourth-quarter and full fiscal year 2012/13 gross domestic product (GDP) growth figures on Friday.

The economy grew 4.5 percent in the December quarter, but a Reuters poll has shown that Asia’s third-largest economy will likely perform a little better and expand by 4.8 percent in the quarter that ended in March.

For the financial year 2013, the government had estimated the economy will grow 5 percent, the lowest in a decade. However, if the poll consensus proves right, full-year growth will be worse than the government’s estimate.

Taxing times for reporters on the Chidambaram beat

(Any opinions expressed here are those of the author and not necessarily of Thomson Reuters)

Finance Minister P. Chidambaram’s drive to shore up government coffers is not just giving businessmen sleepless nights.

Just when reporters were taking a breather after filing stories based on inflation data on Thursday, the finance ministry sent them text messages about a press briefing. The recipients were supposed to rush to Chidambaram’s office in 15 minutes to cover what appeared to be a major policy announcement. After all, the finance minister doesn’t call on such short notice for chitchat.

from The Human Impact:

Dial-a-maid, get-a-slave in middle class India

When I arrived in India some years back as a single mother and full-time journalist, there was one thing I knew I wouldn’t have to worry about – finding domestic help.

Maids, nannies, drivers, cooks and cleaners are ten-a-penny amongst the urban middle classes here.

In New Delhi’s neighbourhoods, for example, most families employ full- or part-time help, who do everything from feeding and bathing babies and cooking family meals to sweeping and washing floors.

Subbarao: an RBI governor who can hold his own

When RBI Governor Duvvuri Subbarao had his tenure extended last year, a TV channel reported that 90 percent of bankers, economists and bond dealers in a poll felt the extension was good for the economy.

In June 2012, less than a year later, people were criticising him for defying widespread calls to cut interest rates, as stubborn inflation continued to bother him more than slowing growth .

Subbarao’s latest decision on Tuesday to hold the central bank’s key policy rate steady may increase the number of his detractors.

from Breakingviews:

India begins the post-Mukherjee clear-up

By Jeff Glekin

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Pranab Mukherjee’s reign as Indian finance minister was stained by economic meddling and political favouritism. Now he is gone, and some of his excesses are being reversed. An enemy has been pardoned and a friend has not received a plum job. This could be the beginning of a better era.

Imagine if Tim Geithner had been accused of putting pressure on the securities regulator to protect some political friends. The U.S. Treasury Secretary would be in serious hot water. But when the former number two at the Securities and Exchange Board of India (SEBI) accused Mukherjee of something similar – putting pressure on the SEBI chairman to “manage” some high-profile corporate cases – there was little attention.

from Anooja Debnath:

In India, what goes up must keep going up

With a faltering economy, political gridlock, high interest rates, delayed monsoons and an epic power outage that has plunged half its 1.2 billion population into darkness, optimism is a sparse commodity in India.

Just not when it comes to rising house prices.

'What goes up a lot must keep going up' was the conclusion from the very first Reuters Indian housing market poll this week. And it sounded very familiar.

Past experience shows that respondents to housing market polls - whether they be independent analysts, mortgage brokers, chartered surveyors - tend to cling to an optimistic tone even as trouble clearly brews below the surface.

It’s time India bites the diesel bullet

“81 rupees?” asked an astonished TV anchor when an irate Bengaluru-based consumer called in after the recent 7.5-rupee hike in petrol prices. Perhaps cars that run on milk are now needed, the anchor suggested — when the caller said the dairy product costs around 30 rupees a litre.

While milk-powered automobiles might be a distant dream, the reality remains that those relying on petrol vehicles will now need to do their budgeting again. If a falling rupee and high inflation were not enough, this steepest-ever rise in petrol prices will surely pinch.

The fact remains that petrol prices were decontrolled way back in June 2010. That move gave oil marketing companies (OMCs) freedom to revise prices and also gave the government some saving grace as ministers can now easily say that petrol prices are market driven.

India’s busy Auto Expo and the risk of an industry believing its own publicity

After fighting through the sea of camera-wielding car enthusiasts clutching their bags filled with corporate gifts to meet with Anand Mahindra, vice-chairman of the Mahindra group, it was difficult to argue with his rosy view of India’s car industry.

“Just look at all these people,” said Mahindra. “If these crowds translate into market appetite, it’s not much of a slowdown,” he added, shaking his head at the view from a glass-walled office high above the teeming masses at the India Auto Expo on Friday.

Mahindra has reason to be cheerful. Sales of cars by his group’s autos arm have remained strong this year. But he wasn’t the only executive shrugging off a slump in India’s car industry with glib comments about the sharp elbows of hundreds of thousands of excited punters that thronged the India Auto Expo this weekend.

Amid parliamentary impasse, MPs cheer more perks

By Annie Banerji

On the way to New Delhi’s international airport, three armed men lean out of the windows of a jeep, furiously waving at the steady stream of traffic to pull over.

As the cars swerve to the dusty edge of the highway, a convoy of a dozen sleek sedans zips past in a blaze of whining sirens and flashing red beacons, breaking all traffic regulations and leaving behind a tangle of vehicles in its wake.

A local politician is late for his flight.

Such situations are likely to become even more commonplace in Asia’s third-largest economy, thanks to a committee that this week submitted a report calling for all MPs to have flashing lights put on their cars to allow them to speed through the country’s clogged streets.

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