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MOTLEY COLLECTION OF BUSINESS AND ECONOMIC NEWS |
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 Green miracle powers revision of 2005-06 GDP growth figures
The government has revised the gross domestic product (GDP) growth rate for 2005-06 from 8.4 per cent to 9 per cent, mainly to account for a 54 per cent revision in agricultural growth from 3.9 to 6 per cent, in its quick estimates for the fiscal.
Said Finance Minister P. Chidambaram, “The revised figures augur well for 2006-07, although I must caution that we will have to see its impact on growth figures this year.”
A higher GDP base for 2005-06 could lower the 9.1 per cent growth estimates for the first half of 2006-07.
Also notable is an increase in the estimates for savings from 31.1 per cent of GDP to 32.4 per cent. Gross capital formation also improved from 30.2 per cent to 32.2 per cent during the period.
Analysts attribute the unexpectedly good showing by agriculture in 2005-06 to higher foodgrain output and sustained high growth in allied sectors such as animal husbandry, fisheries and forestry. The latter’s share in agricultural GDP is now higher than that of crops.
Foodgrain output grew by about 5 per cent to cross 208 million tonnes, with rice output surging to its highest level since 2001-02. Wheat production of 69.48 million tonnes was higher than the previous year’s 68.6 million
tonnes.
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 303 firms beat FY06 profit by miles in 9 months
Three hundred and three firms have surpassed their previous year’s performance in just nine months (ended December 31, 2006) of the current financial year. Their aggregate net profit surged 46.3 per cent to Rs 32,783 crore over their profits of Rs 22,418 crore for the whole year of 2005-06. The companies achieved this sterling feat on the back of Rs 2,14,796 crore sales, 3.14 per cent higher than the Rs 2,07,700 crore sales clocked in the previous financial year.
The 303 firms performed consistently well at a bottomline growth of over 100 per cent during all the three quarters of the financial year. Their net profit zoomed 121 per cent in the third quarter and saw a jump of 116 per cent in the second, while it soared 102 per cent in the first quarter. Sales growth too was phenomenal. Sales shot up 54.7, 49 and 38 per cent in the December, the September and the June quarters of 2006-07, respectively.
The high achievers belong to the banking, cement, construction, capital goods, diamond, media, metals, pharmaceuticals, realty developers, retail, software and telecom sectors. Of the 303 outstanding performers, the Sensex companies are Bharti Airtel, Infosys Technologies, Wipro, Hindalco, Grasim and Dr Reddy’s Laboratories.
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 IT services exports touch $24 billion
India’s exports of IT services, BPO and electronic hardware are estimated to have touched $23.6 billion during the first nine months of the current financial year. Software and ITeS exports accounted for more than 90 per cent of the overall kitty.
Electronic hardware exports have logged a growth rate of 38.8 per cent at $2.1 billion during April-December FY07, compared to $1.5 billion grossed in the corresponding period of the previous year. IT software and IT-enabled services (ITeS) exports, which enjoy the lion’s share of the high-tech export booty, registered $21.5 billion during the period, a growth of 28.2 per cent over the year-ago period.
In rupee terms, the growth in software and BPO exports was an estimated 30.3 per cent during the period in reference. Meanwhile, the growth in hardware exports was an estimated 41.1 per cent, according to export statistics by the Electronics and Computer Software Export Promotion Council.
Frontline IT exporters such as Tata Consultancy Services, Infosys, Wipro, Satyam and HCL Technologies are aggressively vying for a share of the larger contracts, and it is reflecting in the overall export performance of the country.
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 For Australia, India’s land of opportunities
After China, it is India that Australian businesses are looking to head to cash in on the immense opportunities that its phenomenal growth is expected to present over the next few decades.
Assuming the Indian government continues to set growth-supporting policy, there is ongoing reform and no major adverse shocks, India’s economy could rival the size of the largest European countries by 2020 and outstrip Japan by 2032, according to an Australian government report released by Trade Minister Warren Truss. This would make it the world’s third largest economy after the United States and China.
The report - ‘India’s Services Sector: Unlocking Opportunity’ highlights the possibilities for Australian business in India’s services-led economic growth. By 2050 the Indian and Chinese economies will respectively be around 80 and 125 per cent of the size of the US economy.
“India’s economy is currently in a phase of significant growth, largely induced by the expansion of the IT and other leading-edge services sectors,” the report said adding “Australian service providers are well positioned to capitalise on emerging market opportunities in India.”
Education services and professional services already are major exports for Australia and can only be expected to increase, the report said.
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 Informatica to expand India operations
Informatica, the $325-million data integration software products company, is looking to grow its customer support services business in Bangalore. Handling around one-third of its customer support services work from Bangalore, Informatica will be expanding its team not only to handle such activity in India, but for the Asia-Pacific region as well.
Sohaib Abbasi, CEO, Informatica, said that the Bangalore centre is one of the fastest growing and the largest centres outside its headquarters in the US. Informatica launched its India operations in Bangalore in 2003 and currently has around 150 people engaged in R&D, customer support services and sales and marketing. Its investment in India started with a few million dollars in 2003 and has been doubling every year with the cumulative figure now standing at $20 million. Mr Abbasi said that when Informatica started its R&D operations in Bangalore, it engaged itself in core product development activity and has contributed to many of its platforms.
“This centre (Bangalore) has exceeded our expectations,” he remarked. Informatica employs 1,100 globally, with a customer base of over 2,700. The Bangalore centre is its largest outside the US, with the other centres located in the UK and Ireland. However, Informatica’s activity will not be related to just R&D and services, as it is increasing its focus on the Indian market.
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 Canada willing to boost trade ties with India
Canada is willing to boost its bilateral relations with India especially in the field of trade and investment. “Closer ties between Canada and India in the trade, investment and other economic fields can effectively boost economic and bilateral cooperation between the two countries as well as open a new chapter in mutual relations,” Canada’s Governor General Michaelle Jean said while accepting the credentials of the new Indian High Commissioner to Canada Rajamani Lakshmi Narayan.
There were greater opportunities in new and emerging areas which have not been explored so far. Canada is ready to boost bilateral cooperation with India in areas that will serve the two countries’ mutual interests, the Governor General added.
Narayan, expressed India’s desire to expand relations with Canada particularly in science and technology, biotechnology, IT, infrastructure, energy, environmental friendly technologies, trade and investment, and mining. “Two-way merchandise trades between the two countries reached a record $3.6 billion in 2006. There were unlimited opportunities to expand trade and investment,” he said.
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April 2007
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