CII asks finance ministry not to raise excise, service tax

The Confederation of Indian Industry (CII) has asked the government not to increase excise and service tax in the budget amid signs of a sustained economic slowdown. "There is a strong need for retaining the current rates of excise and service tax to spur investment," CII said in its pre-Budget memorandum. Led by an across-the-board slowdown, India's industrial output growth moderated to 1.8% in December from 5.9% in November. Pulled down by slowing manufacturing output, which grew by a similar 1.8% in December, the latest index of industrial production (IIP) data released earlier this month showed a decline in capital goods outputit contracted by -16.5% in December. The industry has rachetted up their demand for cheaper interest rates and friendlier fiscal policies to boost growth. Finance Minister Pranab Mukherjee will present the Budget for 2012-13 fiscal on March 16. "In the wake of deteriorating fiscal health of the government...announce initiatives that can accelerate the pace of private investments," it said.

World Bank chief says US should lead some global bodies

The head of the World Bank said on Saturday it is right for the United States to take a leading role in some global institutions and that the right US candidate for post of the bank's next president would be good for the United States and the bank. In an interview in Singapore, Robert Zoellick also said he did not believe Spain, Italy or Portugal needed bailouts to ease massive debt burdens but that reforms needed critical support of Germany and other European leading nations. The World Bank last week launched the nomination process to select a new president to succeed Zoellick when he steps down in June, inviting names from any of its 187 member countries. The Obama administration has said it would open the process to competition.

Some nations say it is time for a non-American candidate to take the helm of the bank, pointing to growing economic clout of the developing world. Zoellick said he had no role in choosing his successor but made the point that Americans did not hold top posts at the United Nations, World Trade Organization, regional banks or International Monetary Fund. "I want the United States to feel a sense of responsibility to the international system. So in that sense if you get the right American candidate I think that can be good for the United States and the bank." So far, two people most often mentioned as possible successors are both American: US Secretary of State Hillary Clinton and former White House economic adviser and former Treasury Secretary Lawrence Summers. The State Department has insisted that Clinton would not be taking the job. Mexico's central bank chief said on Wednesday the United States and Europe should not be afraid of competition when it comes to selecting candidates for top international posts. Agustin Carstens, Mexico's central bank governor, who had made a bid to head up the International Monetary fund last year in a challenge to Europe's hold on the world lender, said the same principle applied to the World Bank.

Buying Time Zoellick said the latest Greek bailout totalling 130 billion euros would merely buy Greece time. "It's too early to know, partly it depends on the actions the Greeks have to take," he said. "I think that the European Union has dealt with Greece as one element but the core elements are really going to be the success of some of the bigger countries, such as Italy and Spain." But he said bailouts weren't necessary for these two countries or Portugal. "Each country's situation is different and you really have three interconnected problems. For some it's the size of the sovereign debt, for some it's the effect on the banking industry, and for some it's their competitiveness. "And I think Spain and Italy need time to make the reforms ... the reforms being not only ones that deal with the fiscal questions but also building competitiveness for the future." "So I don't think bailouts are necessary but I do think that all this is harder to accomplish when there is a recession in Europe." Support from other European nations was also crucial. "What I've tried to suggest, given the politics of reform in some of the Mediterranean countries, (is that) it will be important for Germany and other leaders in the process to show some prospects if the reforms are taken and how they will be supported by the other European countries."

Friendly energy: Israel could turn gas supplier for India

Israel is all set to emerge as one of Indias reliable partners in the energy sector, especially when it comes to sourcing of natural gas, as a potential deal between the two countries is in the pipeline. According to government sources, a concrete agreement is expected to be signed soon. Minister of energy and water resources of Israel Uzi Landau, during his two-day visit to New Delhi, told Hindustan Times that Israel is keen to strengthen its existing friendly ties with India through cooperation in the energy sector. Israel doesnt, as of now, have any detailed policy on natural gas but there is a high level government committee which will shortly submit its recommendations over Israel policy on natural gas. We feel that for this gas, we should first approach our friendly nations like India.

Asked if the energy co-operation would also include the Israeli authorities offering equity stakes to Indian oil and gas companies in the two highly prospective gas fields, he said, We will do so at the appropriate time. The two fields, Leviathan and Tamar in the offshore waters of Israel, are estimated to hold around 24 trillion cubic feet of gas. China has already evinced interest over picking up equity in the Tamar gas field project, slated to come into production by the end of this year. While Landau reserved his comments over Indias huge dependence on Iranian oil, he said, I dont want to tell India anything about its foreign policy but surely sanctions against Iran should be stepped up and all nations should come together over the fight against terrorism. Terrorism is a problem with India as well and all nations should unite to overcome this menace.

India will be world's 3rd largest economy by 2030

India will be the world's third largest economy by 2030 but its energy demand will slow down to 4.5%, global energy giant BP plc said on Monday. "By 2030 China and India will be the world's largest and third largest economies and energy consumers, jointly accounting for about 35% of global population, GDP and energy demand," BP's chief economist Christof Ruhl said releasing BP's Energy Outlook 2030. There would be "no surge in energy demand as India industrialises. Demand growth slows to 4.5% per annum (vs. 5.5% p.a. in 1999-2010) as improvements in energy efficiency partly offset the energy needs of industrialisation and infrastructure expansion." India's dependence on imports to meet its gas needs will jump to 47% by 2030 while the same for oil will grow to 91%. The nation will be 40% dependent on imports to meet its coal needs.

He said India remains on a lower path of energy intensity; by 2030 it consumes only about half the energy that China consumes today, at a similar income per capita level as in China today. Over the next 20 years China and India combined account for all the net increase in global coal demand, 94% of net oil demand growth, 30% of gas, and 48% of the net growth in non-fossil fuels. Coal remains the main commercial fuel, but its share falls from 70% to 55% in China as a result of maturing industrial structure, and from 53% to 50% in India due to domestic resource constraints. Oil's share is flat at 18% in China and falls to 26% in India, constrained by prices and growing import dependency. Gas gains market share along with nuclear and renewables in both countries, BP said. In India, the share of industry continues to grow, as infrastructure development catches up and manufacturing expands to absorb a growing labour force, but it never reaches the Chinese level. "India therefore remains significantly less energy intensive, with a relatively high share of the service sector in GDP."

Rupee down 29 paise vs dollar

Snapping a three-session gaining streak, the rupee on Monday lost 29 paise to close at 49.22/23 against the dollar on fresh demand for the US currency from importers. The local unit moved between 48.97/98 and 49.30 at the Interbank Foreign Exchange (Forex) market, before settling down by 29 paise, or 0.59 per cent, at 49.22/23. The dollar index was up by almost 0.2 per cent against a basket of currencies ahead of the outcome of an approval of a bailout package to Greece as German is going to vote for this later in the day. However, Foreign Institutional Investors (FIIs) pumped in over USD 1.5 billion on last Friday in equities as per Sebi data, taking the total to over USD 7.1 billion in 2012 so far.

The rupee premium for the forward dollar improved further on sustained paying pressure from corporates and banks. The benchmark sixmonth forward dollar premium payable in July settled higher at 162164 paise from last weekends close of 157159 paise and farforward contracts maturing in January also rose to 297299 paise from 289291 paise. The RBI has fixed the reference rate for the US dollar at 49.0475 and for euro at 65.8900. The rupee dropped further against the pound sterling to end at Rs 78.11/13 from last Fridays close of Rs 77.34/36 and dipped against the euro to Rs 66.00/66.02 from Rs 65.65/67. It, however, reacted downwards against the Japanese to Rs 61.04/06 per 100 yen from last close of Rs 60.79/81.