Forex reserves cross $300 b

Mumbai: India's foreign exchange reserves crossed the $300-billion mark for the first time since August 2008.

For the week ended November 5, 2010, India's forex reserves rose by $2.258 billion to $300.214 billion, according to the data in the weekly statistical supplement released by the Reserve Bank of India on Friday. The reserves rose on account of a $2.193-billion increase in the bank's foreign currency assets. For the week under review, foreign currency assets stood at $271.286 billion.

This is second week in succession where the central bank's foreign reserves have risen. The foreign exchange reserves for the previous week stood at $297.956 billion.

Foreign currency assets expressed in US dollar terms include the effect of appreciation or depreciation of non-US currencies such as the euro, sterling and yen, held in reserves. According to forex dealers, in the week under review, there was a valuation gain as the US dollar depreciated against other major currencies.

Gold reserves remained unchanged at $21.668 billion. SDRs rose by $43 million to $5.225 billion. The RBI's reserve position in the IMF grew by $22 million to $2.035 billion.

Economy will soon return to 9% growth path, says Pranab

Each country has to chart its own regulatory path'.

New Delhi: The Finance Minister, Mr Pranab Mukherjee, sees strong prospects for the Indian economy getting back, in the short term, to the nine per cent average economic growth level witnessed prior to the global economic crisis of 2008.

This expectation stems from the revival in investment and private consumption demand, impressive growth in merchandise exports since November-December 2009, favourable capital market conditions and improvement in capital flows besides manufacturing sector buoyancy reminiscent of the pre-slowdown years.

Addressing the India Economic Summit (IES) 2010 in the Capital today, Mr Mukherjee also came up with an encouraging outlook for the Indian economy in the medium to long run. He expressed confidence that the current high economic growth would be sustained in the coming decades as advantages like demographic dividend starts paying off.

The challenge now is to find the means to cross the ‘double digit growth barrier' in the coming year or two, he noted.

“We are seeking to make growth more broad-based and ensure that supply demand imbalances are better managed.”

Mr Mukherjee also told the IES, comprised largely of foreign investors, that the Government was striving to improve the regulatory environment in the country.

“As you know there are no off-the-shelf solutions available to the regulatory dilemmas facing any developing country. Each country has to chart its own path on the regulatory reform based on its native genius and the conditions on the ground. India too is striving to achieve the optimum path,” he said.

Financial stability council

On financial sector reforms, Mr Mukherjee said that India has decided to set up an apex-level financial stability and development council (FSDC), with a view to strengthen and institutionalise the mechanism for maintaining financial stability.

“This council would undertake macro prudential supervision of the economy, including the functioning of large financial conglomerates, and address inter-regulatory coordination issues. It would also focus on financial literacy and financial inclusion,” he added.

The Government has also decided to set-up a financial sector legislative reforms commission (FSLRC) to rewrite and clean up the financial sector laws and bring them in line with the requirements of the sector, Mr Mukherjee said.

India's gross domestic product (GDP) growth had averaged close to nine per cent in the four-year period from 2004-05 to 2007-08.

Due to the global economic slowdown, the GDP growth declined to an average of seven per cent in 2008-09 and 2009-10.

Setting up of 14 world-class universities gets approval

New Delhi: The National Development Council has approved setting up of 14 world-class universities for innovation across the 11th and 12th plan periods on the public private partnership model.

The innovation universities are part of the ministry of human resource development's (MHRD) "brain gain" policy to attract global talent and will be set up under the eleventh plan (2007-12).

The proposed universities will be set up in Bhubaneswar in Orissa, Kochi in Kerala, Amritsar in Punjab, Greater Noida in Uttar Pradesh, Patna in Bihar, Guwahati in Assam, Kolkata in West Bengal, Bhopal in Madhya Pradesh, Gandhinagar in Gujarat, Coimbatore in Tamil Nadu, Mysore in Karnataka, Pune in Maharashtra, Visakhapatnam in Andhra Pradesh and Jaipur in Rajasthan.

According to ministry, three distinct approaches are possible in establishing these Innovation Universities. First, new Innovation Universities focused on distinct issues of national importance to India and building various disciplines and fields of research around such issues. The second approach is to identify a few among existing universities and other institutions of repute, and help these attain world class standards through innovation in chosen areas of knowledge with marginal top-up investment. The third approach is to identify a few educational hubs (cities) in the country where institutions and universities of excellence by national standards are located, and creating the architecture of an Innovation University by building synergies for inter-disciplinarity and strong research and teaching within these institutions.

BSNL to float $3.5 bn tender

NEW DELHI: State-owned telecom company, BSNL, plans to float a $3.5-billion tender, a third of which will be reserved for public sector telecom equipment company ITI, an executive aware of the development told. The telco wants to procure equipment for 40 million GSM lines. BSNL is yet to decide if it wants to go in for a single contract or split it into two tenders for 20 million GSM lines over a two-year period, this executive added. This contract will provide the company with sufficient capacity till 2013.

"To take care of the long-term expansion requirements, BSNL has planned to expand its mobile network by a capacity of 20 million lines each in 2011-12 and 2012-13 ," the telco said in its status report sent to the telecoms department earlier this month.

This will be in addition to the 5.5 million GSM lines tender the telco floated recently. BSNL had initially banned Chinese firms from bidding for this 5.5-million line contract to expand its mobile network for its north and eastern zones, but changed the rules later to accommodate firms such as Huawei and ZTE after the Centre allowed participation from Chinese companies.

The $500-million contract for 5.5 million lines was the first tender the PSU floated after it cancelled its 93 million lines contract, the world's largest for telecom equipment, earlier this year. Following the junking of the mega equipment contract, which had run into several controversies including court cases and a probe by the Central Vigilance Commission, BSNL had decided to abolish its tender-based equipment procurement process and adopt the 'managed capacity model' followed by private telcos. But BSNL's plans to move to a managed capacity model have found no takers in the government, forcing the company to opt for the tender model again.

Over the last two years, BSNL has not sourced 30% of its equipment from ITI, despite the policies mandating it to do so. Under pressure from MTNL and BSNL, department of telecom too did not enforce this clause as ITI had not met the delivery schedules for the previous contracts. But earlier this month, the union Cabinet approved the continuation of the 'offset policy', under which 30% of all telecom contracts (for hardware and equipment) awarded by BSNL and MTNL should be sourced and manufactured by ITI.

Android makes Motorola profitable after 4 years

NEW YORK: US mobile phone maker Motorola reported its first revenue growth in nearly four years and better-than-expected sales of Android smartphones.

Motorola reported a net profit of $109 million in the third quarter compared with $12 million a year ago.

Revenue grew 6 per cent to $5.8 billion as the Illinois-based company notched its first quarter of growth since the fourth quarter of 2006.

Mobile phone division revenue increased 20 per cent to $2 billion and the division had an operating loss of $43 millions compared with an operating loss of $216 million a year ago.

Excluding extraordinary items, Motorola's mobile phone division, which is to be spun off from the rest of the company next year, posted an operating profit of $3 million.

Motorola said it shipped 9.1 million handsets during the July to September period including 3.8 million smartphones powered by Google's Android operating system, more than expected by analysts.

"In the third quarter, Motorola Mobility showed positive momentum across the business, with Mobile Devices reaching profitability for the first time in over three years," Motorola co-chief executive Sanjay Jha said.

" Droid X continues to sell extremely well," Jha said. "And we have had several other successful smartphone launches globally, including the Droid 2, the Ming series in China, as well as a well-received introduction of our enterprise-ready Droid Pro," he said.

Motorola plans to split its businesses in the first quarter of next year, separating products for consumers from its professional equipment division. The mobile and home entertainment devices division will operate as Motorola Mobility.

The other company, Motorola Solutions, will consist of its enterprise mobility solutions, which include two-way radios, mobile computers, secure public safety systems and scanners.

Motorola enjoyed success with its popular Razr phone launched in 2005 but has been losing ground since to Apple, Canada's Research in Motion, maker of the Blackberry, and other major cell phone manufacturers.

Jha has been counting on smartphones running Android to help turn around the company's flagging fortunes and Motorola has launched 22 Android-based devices this year.

Read more: Android makes Motorola profitable after 4 years - The Times of India http://timesofindia.indiatimes.com/Tech-News-Telecom/Android-makes-Motorola-profitable-after-4-years/articleshow/6833580.cms#ixzz13kLbGxEs

Intel opens biggest chip plant

HANOI: US-based chip maker Intel opened a billion-dollar assembly and test facility in Vietnam, the company's biggest in the world, saying it would help the country's development.

Intel president and chief executive Paul Otellini and Deputy Prime Minister Hoang Trung Hai officially opened the plant, the size of five-and-a-half football fields, at an industrial park in Ho Chi Minh City.

Hai said the opening "supports our goal of accelerating economic transformation led by technology-intensive industries."

Intel said in a statement, "Production commenced in the middle of this year, starting with production of chipsets for laptops and mobile devices for Intel customers worldwide. Once fully operational, the facility is expected to create several thousand skilled jobs in high-tech manufacturing and generate significant export revenue for the country."

Otellini said at the ceremony that Intel had signed pacts with government agencies to advance e-government, education, personal computer and broadband penetration and digital literacy in Vietnam.

The facility is one of seven operated by Intel worldwide. Intel announced the project four years ago, proclaiming it the largest investment in Vietnam by an American company.

The opening of Vietnam's first semiconductor factory comes despite warnings by analysts that the communist nation risks losing out both to poorer, lower-wage nations and richer ones that are more innovative and have a higher-quality labour force.

The World Bank and Vietnam's Academy of Social Sciences (VASS) said in a joint report in August that the nation depends too much on exploitation of natural resources while its industry, much of it dominated by large state-owned groups, lacks dynamism.

The country is the world's second-largest exporter of rice and coffee, while seafood, footwear and apparel are other key earners. However Vietnam's science and technology standards are low compared with regional rivals, VASS president Do Hoai Nam has said.

He added the country's economic infrastructure is not well-developed, there is a lack of specialisation and competitiveness and a shortage of skilled workers.

But the Intel facility is a sign that Vietnam is "moving up the food chain toward increasingly sophisticated manufacturing," said Adam Sitkoff, executive director of the American Chamber of Commerce Vietnam.

The facility would provide "higher-quality jobs" for Vietnamese people and attract other high-tech firms to the country, Sitkoff said. "Usually when Intel goes somewhere, that's a sign to other technology companies that they can go there also," he said.

Leon Perera, group managing director of Spire Research and Consulting in Singapore, said, "Intel's investment in Vietnam is undoubtedly a vote of confidence" in the country.

Vietnam, he added, was benefiting from multinational companies' need to diversify beyond China. Perera said that Vietnam, with its labour-cost advantage over China, closeness to the Chinese market, and participation in regional free trade pacts, "may be well suited for assembly of IT products."

However, one obstacle could be Vietnam's relatively underdeveloped logistics industry, Perera said. "Another obstacle would be the relative scarcity of English speakers as compared to Malaysia, or even Thailand and China."

TCS Q2 beats estimates, net up 32% at Rs 2,169.21 cr

MUMBAI: Country's largest software firm Tata Consultancy Services today reported 32% jump in consolidated net profit at Rs 2,169.21 crore for the second quarter ended September 30, 2010, driven by rising order wins from its mainstay financial clients.

As per Indian accounting norms, the company had a net profit of Rs 1,642.21 crore in the July-September 2009 quarter, TCS said in a filing to the Bombay Stock Exchange.

"It has been a quarter of superior performance across the board, driven by volume growth of over 11 per cent. In uncertain economic conditions, our results are a milestone on the path to strong demand recovery," TCS CEO and MD N Chandrasekaran said.

TCS, part of the Tata Group that spans commodities, autos and services, added 19,293 people during the quarter, the highest ever for the company, taking the total headcount to 1,74,417 at the end of September quarter.

Income from operations rose to Rs 9,286.39 crore in Q2, up from Rs 7,435.23 crore in the year-ago period. It added 30 new clients during the quarter.

Under US accounting standards its net profit rose to Rs 2,106 crore ($475 million) from Rs 1,624 croe reported last year.

TCS said that the macro environment is uncertain and the scenario will continue like this for sometime. The company also said that attrition is of some concern but is manegable.

"It has been a quarter of strong revenue and margin performance all around," TCS CFO S Manhalingam said.

The board has proposed an interim dividend of Rs two per equity share on a face value of Re one each.

Last week, rival Infosys Technologies Ltd beat estimates and raised its annual sales forecast, but warned currency volatility could crimp growth for India's $60 billion outsourcing sector.

A strong rupee is a cause for concern for the sector, which draws more than half its revenue in dollars and has significant rupee expenses, which could squeeze margins.

"With our major operating currencies continuing to be volatile, we remain vigilant on this front," Mahalingam said.

Shares in TCS, valued at about $43.5 billion, have risen over 31 percent percent this year, outpacing a near 17 percent percent gain in the sector index and a 16 percent rise in the broader market.

Bridgestone to set up Rs 2,600 cr new plant in Pune

CHENNAI: Bridgestone India, a leading tyre manufacturer, on Monday said it planned to set up a new production facility at Chakan in Pune at an investment of about Rs 2,600 crore.

The new plant would help the company to produce 10,000 units of passenger vehicle tyres per day and 3,000 units of commercial vehicle tyres per day by 2020, Bridgestone India Managing Director Hiromi Tanigawa said on Monday.

"By 2013 we will launch new production facility at Chakan near Pune at investments of almost USD 26 billion rupees (Rs 2,600 crore)...," he said.

The new plant would come up on 7.60 lakh square meters, nearby treble the size of its Indore plant (2.60 lakh sq m).

The company, which entered India in 1996, commenced production at its Khedhar plant in 1998 for manufacturing of tyres for passenger and sports utility vehicles in India.

The company would also invest around Rs 300 crore at its Khedar plant for increasing its capacity from 14,000 units to 15,000 units, he said.

Asked about plans for overseas operations, he said the company would focus on the domestic market as the demand was increasing.

The tyres manufactured at the proposed plant would have 40 per cent localisation, resulting in savings on import duty incurred on shipments from Japan , he said.

With the setting up new plant the company would also double its headcount in India. "We are having 1,700 employees in India and we will add another 1,800 (for the new facilities)," he said.

He said the company, with 1800 dealers and 200 exclusive 'Bridgestone Select' dealership points, currently enjoyed 26 per cent market share in the replacement market and 20 per cent in the commercial vehicle category.

Mahindra two wheelers sales up 451% in Sept

MUMBAI: Mahindra Two Wheelers reported its best monthly sales of 16,569 scooters in September, a whopping 451% increase year-on-year.

The $76.1-billion Mahindra & Mahindra group-owned company sold 1.5 lakh units in the last 12 months, riding on the back of its ‘powerscooter strategy’ targeting youth with its peppy looks and 125cc power engine. The company now looks to consolidate its position in the two-wheeler segment with its newly- launched motorcycles, said Anoop Mathur, president of the two-wheeler segment and member of group executive board of M&M.

The Mumbai-based auto major recently made its debut in the motorcycle segment with two models, Stallio and Mojo, and roped in film star Aamir Khan as its brand ambassador.

The 300cc Mojo is a lifestyle bike which the company calls the ultimate machine for motorcycle enthusiasts. Having an aspirational high-performance bike with latest global technology is expected to help M&M to make an impact in the highly competitive bike market.

“Mojo is in a sense a showcase of what we are capable of doing,” group vice-chairman and managing director Anand Mahindra told ET NOW in an interview. “It is the fastest Indian bike and it was designed with that goal in mind,” he said.

The 110cc Stallio is more of a volume winner, being competitively priced, fuel efficient and offering some new features. M&M has kick-started an online campaign to create a buzz around its motorcycles. The company has offered to hire 20 bikers to ride its bikes from Ladakh to Nagpur. After the journey, the bikers get to keep the bikes.

M&M entered the two-wheeler space with gearless scooters after acquiring Pune-based Kinetic in July last year. M&M acquired 80% controlling stake for Rs 110 crore.

GM India to come out with electric car next year

JAIPUR: General Motors (GM) India today said that it is strengthening its foothold in the state and will showcase an electric car next year.

It would be an environment-friendly small car, President and Managing Director Karl Slym said, adding that it would be a battery operated car.

He said GM India is rapidly expanding its network in the wake of increasing popularity of Chevrolet in India, which recently completed seven years in the country.

In a joint collaboration with China's SAC (Shanghai Auto Car), GM will bring three "value-package" cars, he said.

It would soon be commissioning the power train facility in Talegaon, making the first flexi-engine plant for GM globally wherein both petrol and diesel engines are going to be manufactured together, he said.

Recently, the company inaugurated a LNG facility at its factory premises at Halol for supplying gas to its car manufacturing plant, and has also ramped up production at its Halol and Talegaon plants, he said.

When asked whether GM is planning any industrial investment in Rajasthan, Slym said its two units are already producing 2,25,000 cars per annum, and this would go up to 4 lakh in next couple of years.

Speaking on the occasion, Vice-President (Sales-marketing-aftersales) Sumit Sawhney said GM has invested over USD 1 billion (Rs 4,500 crore) in India till date, and is deeply committed to this market.

In last six months, GM India grew 79 per cent against the 36 per cent industry growth, Sawhney said, adding that the company's share in the car industry is, however, 4 per cent.