A high-level expert panel of thePlanning Commission on universal health has recommended to lower the present cap of 100%FDI in pharmaceutical

sector through the automatic route to below 49% "to retain predominance of Indian pharmaceutical companies and preserve our self-sufficiency in drug production". The committee has suggested removal of FDI in the pharma industry from automatic route and bring it under Foreign Investment Promotion Board (FIPB) to ensure that all M&A proposals of Indian drug companies are scrutinized thoroughly. Car maker Maruti Suzuki Indiatoday said the production of its compact car Swift has touched 700 units a day despite the stand-off with workers at the Manesar facility continuing for the 27th day. The MSI management and workers have been locked in a stand-off since August 29, when the management prevented workers from entering the factory premises unless they signed a 'good conduct' bond. The management had alleged sabotage and deliberate compromise on the quality of cars being produced. Maruti Suzuki is not ready to compromise on the demands of the workers that are on strike. Infact they have fired manu workers and said that they will not take back those fired workers. Maruti Suzuki have employed new workers and trained them so that they can work on their any factories without any difficulty.

Silver prices extended gains on Tuesday to rise more than 6 per cent, hitting a session high at $32.63 an ounce, as a sharp drop in precious metals prices in the previous session attracted buyers back to the market, and as the dollar retreated. Silver was up 6.3 per cent at $32.60 an ounce.

Infrastructure sector gets gas & crude shocks, growth slips to 3.5% in August. The infrastructure industries include coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity. They account for 38% of the country's factory output. The performance of this sector is seen as an advance indicator of industrial activity. Experts said they would be keenly watching the Reserve Bank's next monetary policy review due on October 25 to see if it decides to pause interest rate hikes in view of the disappointing industrial performance. Production of steel and cement was 7.7% and 7.2%, respectively, indicating a possible improvement in the construction sector

S Korea's SK Telecom to launch seven 4G smartphones SK launched its super-fast 4G wireless services, based on Long-Term Evolution (LTE) technology, in Seoul in June and plans to secure national coverage by 2013. LTE promises fast data traffic and faster access to applications such as television programmes, movies and video conferencing. Samsung will offer two additional LTE smartphones through SK Telecom in October and November.

Finance ministry aims to bring transparency, market based pricing in public-private partnership projects. According to the proposal, the government will publish separate mandatory disclosures and fair practices that all PPP projects would have to follow. It will also develop new marketbased products such as independent pre-bid rating to assist investors in identifying wellstructured PPP projects and explore possibilities of setting up a web-based marketplace.

Axis rolls out 11.75% fixed rate home loan

Axis Bank, a late entrant to home loans, has launched a lifetime fixed rate home loan at an interest rate of 11.75% for a 20-year tenure. This is the cheapest fixed rate loan available in the market. But In current scenario Floating Rate Loans Make Better Sense With interest rates close to their peaks, it doesn't make sense to go for fixed rate home loans. Dual rate home loans are back - albeit with some minor difference. ICICI BANK set the ball rolling by launching home loans with the option of having a fixed rate for either the first year or the first two years. The fixed rate for one year is between 10.5% and 11.5%, depending on the loan amount, and for two years, it is 10.75% to 11.75%. Last week, HDFC also unveiled products with fixed and floating rates - the plans offer fixed rates for the first three (10.75% to 11.75%) or five years (11.25% to 11.75%). LIC Housing Finance, too, has joined the game with its 'New Advantage 5' scheme. This product offers a fixed rate of interest for the first five years and on floating rate thereafter, with the interest rate being in the range of 11.15% to 11.65%. These hybrid loan products come with a fixed rate for the first few years and then offer floating rates linked to the the bank's benchmark rate. However, they are different from the 'teaser rate' products that were launched by banks a few years ago. For one, the new hybrid loans have been launched at a time when interest rates, according to experts, have almost "peaked out". Secondly, unlike the teaser loans, the interest rates on the new loans are more or less in line with the prevailing market rates. Teaser loans typically offer artificially lower rates in the initial years of a loan. Not Teaser Products For a loan to be classified as a "teaser rate" loan, the consumer has to pay interest rates at least for a few months or years - that are lower than what s/he would otherwise pay on a normal loan for a similar purpose and duration. Do these products make sense? Some borrowers are comfortable with the concept of having a fixed commitment on their home loans. But, when interest rates are poised to fall, should you lock your loan at a higher rate? Does

it make sense to pay extra for the comfort of having a fixed loan liability, that too, when you are not actually saving any money in the initial years, as the rates are mostly in line or higher (in some cases) than the current rates?

How RBI hike in repo rates affects common people?

Keep an eye on RBI, says investors, experts and traders. Should we be prepared to pay more every month on your home, auto and other loans? Since RBI has increased the repo rates 12 times in the last 18 months. Before discussion on this, I would like to be very clear on some basics. What is a basis point? A basis point is nothing but one-hundredth of a percentage point. People who took home loans and car loans in the last 18 months would have been impacted much. The reason is Commercial banks Indusind Bank, Hdfc Bank, ICICI Bank, Axis Bank & Kotak Mahindra Bank will have to pay more if they want to borrow from RBI, but individual borrowers as well as corporations may not feel the impact of the rate hike immediately as banks are not in a hurry to raise their loan and deposit rates. Over the last one and a half year, the RBI has raised the Cash Reserve Ratio (CRR) by over 100 basis points and the Policy rate by over 275 basis points. This in effect means that banks have to face a net effect pressure of around 425 basis points. Take a scenario, a person took a home loan for 25 lakhs in EMI with commercial banks like Indusind Bank, Hdfc Bank, ICICI Bank, Axis Bank & Kotak Mahindra Bank on May 2011. The rate of interest when he took a loan is 10.25%. If RBI continues to increase the repo rates by 12 times in the next 18 months it will highly impact the person who took the loan. Same case would reflect, if a person buys a car worth Rs 5.2 Lakhs before a month. Over 95% percentage of home loans is floating interest rate. The RBI appointed banking ombudsman has been receiving a number of complaints from borrowers on the mounting credit risks as a result of increasing interest rates. Home loans are 2-3% are fixed rate loans today. Even though interest risk is managed by banks, the risk is ultimately forced on the customer in a rising interest rate scenario. Floating rate loans pass on the interest rate risk from banks which are much better placed to manage it to borrowers and thus banks only substitute interest rate risk with potential credit risk. If a decision on this comes through it will be for both own source funds and borrowed source funds of banks.

I took few surveys related to RBI Actions. Here Kannan (Manager- Accounts) in a Pvt Ltd Concern shared his views.
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Continuous increase in inflation forced the RBI to continuously increase the lending rate/the repo rate as one of the anti-inflationary actions to be taken. Consequently, the commercial banks and other money lenders will increase their rate of interest for the various types of common man loans. At the end of the day the long tenure loan enjoyers particularly the people who taken housing will be affected. Due to the inconsistent and soaring rate of interest the fixed income people will be the most affected. The indirect decrease in their monthly income will result in their standard of living down-fall. Taking effective measures to control the inflation and success of the same may result in decreased interest rates in future.

The RBI rate hike comes despite increasing criticism of RBI's hawkish policy. Analysts and experts have started questioning if this hike will have any bearing on inflation because of the upward revision in petrol prices. Many have also started questioning the efficacy of the series of the rate hikes for 12th time in 18 months.