INDIAN ECONOMY

Monetary	Latest
Inflation
WPI (March 2014)	179.80 (5.7)
M3growth (%y-o-y)	13.60

INDIA PROJECTS & PROGRAMS

The World Bank Group’s Partnership Strategy for India (2013-2017) will help India lay the foundations for achieving “faster, sustainable, and more inclusive growth” as outlined in the government’s 12th five year plan. The World Bank Group will support India with an integrated package of financing, advisory services, and knowledge. As of July 2013, total net commitments in India stood at $22.3 billion (IBRD $12.6 billion, IDA $ 9.7 billion) across 78 projects. (Source: World Bank Report)

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Economy Data

MONETARY INFLATION	Latest
WPI (March 2014)	179.80 (5.70)
M3growth (%y-o-y)	13.60
HIGH POSITIVE GROWTH SECTORS (in Feb’ 2014 compared to Feb’2013)	%
Woollen carpets	105.30%
Terry Towels	29.80%
Steel Structures	24.70%
Leather Garments	22.60%
Gems and Jewellery	21.70%

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Economy Data

MONETARY INFLATION	Latest
WPI (March 2014)	179.80 (5.70)
M3growth (%y-o-y)	13.50
HIGH NEGATIVE GROWTH – IMPORTANT ITEMS (in Feb’ 2014 compared to Feb’2013)	%
Aluminium Conductor	-42.40%
Apparels	-27.60%
Block Board	-25.60%
Boilers	-36.30%
Cable, Rubber  Insulated	-32.20%
Colour T.V. sets	-26.80%
Earth Moving Machinery	-28.60%
Generator/Alternator	-48.90%
Heat Exchangers	-44.80%
H R Sheets	-40.90%
PVC Pipes and Tubes	-23.40%
Telephone Instruments (incl. Mobile Phones & Accessories	-36.30%

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Economy Data

MONETARY INFLATION	Latest
WPI (March 2014)	179.80 (5.70)
M3growth (%y-o-y)	13.50
HIGH NEGATIVE GROWTH SECTORS (in Feb’ 2014 compared to Feb’2013)	%
Radio, TV and communication equipment & apparatus	-34.10%
Electrical machinery & apparatus n.e.c.	-24.60%
Wearing apparel; dressing and dyeing of fur	-21.30%

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Arvind Mayaram is finance secretary

Arvind Mayaram is finance secretary

The post of Finance Secretary was lying vacant after Sumit Bose retired on March 31

The government on Thursday named Economic Affairs Secretary Arvind Mayaram (pictured) the finance secretary. Sumit Bose had retired last month.

"The appointments panel of the Cabinet has approved (the proposal) that Mayaram may be designated as the finance secretary," an official statement said.

The finance ministry has five secretaries and the senior most is named the finance secretary. The four are Rajiv Takru, revenue; R P Watal, expenditure; Ravi Mathur, divestment; and G S Sandhu, financial services.

Mayaram is a 1978 batch Indian Administrative Service officer from the Rajasthan cadre. He has a doctorate in finance and a master’s degree in political science. He became the economic affairs secretary in August 2012 and is due to retire in October 2015.

http://www.business-standard.com/article/economy-policy/arvind-mayaram-is-finance-secretary-114041500494_1.html

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Economy Rates

MONETARY INFLATION	Latest
WPI (February 2014)	178.90 (4.68)
M3growth (%y-o-y)	13.50
HIGH POSITIVE GROWTH SECTORS (in Feb’ 2014 compared to Feb’2013)	%
‘Woollen carpets	105.30%
‘Terry Towels	29.80%
Steel Structures	24.70%
‘Scooter and Mopeds	22.80%
Leather Garments	22.60%
‘Gems and Jewellery	21.70%

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RBI to ease curbs on exchange traded currency futures

 RBI to ease curbs on exchange traded currency futures

The RBI may allow foreign institutional investors (FIIs) to participate in the exchange-traded currency derivatives market, where volumes have been dropping at an alarming rate. To resuscitate this market, the Reserve Bank has also relaxed some of the trading curbs imposed in 2013.

The RBI had permitted futures and options on the rupee to be traded on the Indian stock exchanges in 2008. These instruments were aimed at helping small companies hedge their foreign exchange exposure.

Trading in these instruments started off briskly but volumes have been tapering over the last couple of years. The National Stock Exchange recorded average daily turnover of ₹21,700 crore in 2012-13. This dropped to ₹8,576 crore in April this year. On the MCX-SX, the drop was precipitous, from ₹13,600 crore to ₹3,100 crore during the same period.

Why currency futures?

Exchange-traded currency derivatives were touted as an answer to small importers and exporters who were getting a raw deal from large banks in the inter-bank currency market. “The rates are transparent in the stock exchange,” said Pramit Brahmbhatt, Group CEO of forex brokerage Veracity, in a recent interview with Business Line. “But in the case of the inter-bank market, if you are a small exporter or importer the rates might not be the actual rates prevailing. The banks might quote you higher rates.”

War against speculation

But besides hedgers, currency derivatives attracted traders and speculators to the consternation of the RBI. Volumes in the derivatives segment plunged after the RBI stepped up its war against speculation last year, as the rupee dived to its life-time low of 68.8 against the dollar. The RBI, under former Governor D Subbarao, realised that banks were playing on the price difference between the two currency markets — the exchange-traded currency futures and options market and the inter-bank forex market. This was said to be contributing to the currency’s weakness.

To stop the rupee’s slide, the RBI had doubled the margins (initial money deposited while trading derivatives) in this segment.

“This did impact volumes but only the large systematic speculators who drive the market in one direction moved out. But the normal retail speculators who do trading are still there,” says Brahmbhatt.

RBI backtracks

Upon taking charge, the new Governor, Raghuram Rajan, promised to roll back the measures introduced to curb currency speculation. In line with his promise, he has rolled back the extra margin on currency futures last week, a move that is expected to breathe life into this market.

In the April monetary policy statement, the Governor said foreign institutional investors will soon be allowed to hedge their forex exposure in the exchange-traded currency market. This move too should help increase liquidity.

Unwanted entrants Volumes in the derivatives segment plunged after the RBI stepped up its war against speculation last year.

http://www.thehindubusinessline.com/economy/rbi-to-ease-curbs-on-exchange-traded-currency-futures/article5916083.ece

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India Inc to offer 10.3% raise to employees this fisca

India Inc to offer 10.3% raise to employees this fiscal: Survey

Indian companies are likely to shell out an average salary increment of 10.3 per cent in the current fiscal with employees in pharma, health care and life sciences projected to get 12.4 per cent raise, says a survey. The overall average increment is 0.3 per cent points lower than the previous fiscal (10.6 per cent), because of slow economic growth and lower attrition.

The findings are part of a survey conducted by Deloitte India, Human Capital Consulting. Companies in pharmaceutical, healthcare and life sciences are expected to dole out an average raise of 12.4 per cent, highest across sectors in 2014-15. It is marginally lower compared to 12.6 per cent in the previous fiscal.

Given the overall mood of the economy, the retail sector will maintain a conservative estimate and is likely to offer the lowest average increment at 9.1 per cent, the survey said. “Average annual increment percentages have reduced marginally across levels. The reduction is highest at the middle management levels,” it added.  Meanwhile, as per the survey findings the average voluntary attrition rate across sectors in the 2013-14 fiscal had been 13.4 per cent, 0.8 per cent points lower than the previous fiscal 2012—13.

Recognition awards (monetary /non-monetary), clearly defined career paths and succession plans as well as development programmes for high potential and top performers were identified as main reasons that helped curb attrition.

The highest attrition rates were recorded in the ITeS industry (16.4 per cent), Media (15.6 per cent), Hi—tech (14.2 per cent) and BFSI (14 per cent). Logistics had the lowest average attrition level at 10.5 per cent followed by auto sector at 10.6 per cent. Employees identified as top performers are likely to get an average raise of 16.2 per cent while persons at the key positions —— roles in the organisation that have a maximum impact on the business — are expected to get average increment of 14.7 per cent.

According to Deloitte, career management, developing potential leaders as well as retaining and rewarding critical talent are the top three HR challenges faced by organisations across sectors. However, it observed that to address these challenges organisations are maximising their rewards spend by identifying, segmenting and rewarding individuals who have maximum impact on the business and are focusing on hiring talented individuals, among others.

http://www.thehindubusinessline.com/economy/macro-economy/india-inc-to-offer-103-raise-to-employees-this-fiscal-survey/article5907638.ece

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