Mumbai: Online travel company Ibibo Group, that owns portals such as Goibibo.com, redBus.in and Travelboutique has acquired 51 per cent stake in online bus tracking and analytics platform YourBus.com for an undisclosed amount.
With this Ibibo is all set to achieve a leadership position in the online travel space that has players such as Makemytrip.com, Yatra.com, Cleartrip, Ixigo and Akbar Travels.
Ibibo, which is owned by South Africa based Naspers, had acquired RedBus for Rs 780 crore last year.
Ashish Kashyap, CEO of ibiboGroup, said: “Our key motivation to acquire YourBus is to enhance passenger experience at redBus.in and Goibibo.com, whilst at the same time providing additional technologies and analytics to the Bus operators so as to increase their efficiencies in the marketplace. ”
IbiboGroup will integrate the YourBus platform with both its existing online travel properties, redBus.in and Goibibo.com. Following this YourBus founders Rajesh Mallipeddi and Satya Padmanabham will work closely with the RedBus team. YourBus is functional in 200 buses and is already integrated with redBus’ mobile and web applications. The acquisition will enable the YourBus team to expand its reach potentially to thousands of buses.
Founded in 2011, Yourbus is a GPS-based tracking platform, which solves problems for both bus travelers and bus operators. Bus travelers can access real time information regarding the location of a bus on their mobiles as well as online. Furthermore, important information such as bus delays and time of departure is pushed to passengers via both SMS and web notifications.
Bus operators are able to track their buses and get detailed analytics on punctuality and efficiency of their buses. They can sort this information by route, bus driver and vehicle number and also get estimated time of arrival reports and other weekly /daily location based reports.
Success in my Habit
Sunday, March 30, 2014
Mobiado set to enter India with Mihaus
New Delhi: Canadian luxury mobile brand Mobiado has tied up with premium multi-brand electronic retailer Mihaus to enter the Indian market. Mobiado handsets are priced anywhere between Rs. 2.6 lakh and Rs. 20 lakh.
Mobiado was founded in 2004 in Vancouver by Canadian engineer Peter Bonac. It has a full keyboard, encrusted with sapphire crystal buttons and 3G technology.
The company is understood to be manufacturing less than 1 lakh units a year.
Mihaus, promoted by Naveen Rao, Managing Director of Navshiv Retail, will retail and service the brand in India.
Charu Makin, National Head, Sales & Marketing, Mihaus, said Mobiado has entered into a 10-year exclusive partnership with the company. “One of the biggest glitches with high-end brands was that there were no adequate post-sale services. We will address the service aspect also besides the distribution”.
Besides Mobiado, Mihaus retails brands such as Audio Pro and Loewe.
Makin said Mobiado was added to its portfolio as there was a latent demand for high-end handsets.
“The new generation is willing to spend money on high-end devices that are not just aesthetically good but also don’t compromise on the functionality,” she said, adding the target market for the brand is in the 21-45 year age bracket.
Mobiado will compete with brands like Nokia's Vertu, Tag Heuer Meridiist, Lamborghini, Armani and Dior handsets.
According to reports, the global market size for luxury phones is estimated at $500 million-$1 billion growing at nearly 20-25 per cent. Of this, Asia-Pacific alone accounted for 60 per cent of the business.
Mihaus has four stores in New Delhi, Mumbai and Bangalore. “We are looking at two more stores in near term”.
Mobiado was founded in 2004 in Vancouver by Canadian engineer Peter Bonac. It has a full keyboard, encrusted with sapphire crystal buttons and 3G technology.
The company is understood to be manufacturing less than 1 lakh units a year.
Mihaus, promoted by Naveen Rao, Managing Director of Navshiv Retail, will retail and service the brand in India.
Charu Makin, National Head, Sales & Marketing, Mihaus, said Mobiado has entered into a 10-year exclusive partnership with the company. “One of the biggest glitches with high-end brands was that there were no adequate post-sale services. We will address the service aspect also besides the distribution”.
Besides Mobiado, Mihaus retails brands such as Audio Pro and Loewe.
Makin said Mobiado was added to its portfolio as there was a latent demand for high-end handsets.
“The new generation is willing to spend money on high-end devices that are not just aesthetically good but also don’t compromise on the functionality,” she said, adding the target market for the brand is in the 21-45 year age bracket.
Mobiado will compete with brands like Nokia's Vertu, Tag Heuer Meridiist, Lamborghini, Armani and Dior handsets.
According to reports, the global market size for luxury phones is estimated at $500 million-$1 billion growing at nearly 20-25 per cent. Of this, Asia-Pacific alone accounted for 60 per cent of the business.
Mihaus has four stores in New Delhi, Mumbai and Bangalore. “We are looking at two more stores in near term”.
Tech Mahindra sets up third delivery centre in Germany
Mumbai: IT solutions company Tech Mahindra has set up its third delivery center in Düsseldorf, Germany, for servicing European clients.
The 50-seat centre would also engage with local academia and provide work experience to students in the Nordrhein-Westfalen region, Tech Mahindra said in a press statement.
“This delivery center, in the heart of the Nordrhein-Westfalen region will also help us attract and retain local talent which is crucial to the next phase of our growth in the region,” said Vishaal Gupta, Head (Telecom) - Europe, Tech Mahindra
Currently, the company serves its European customers through 26 offices across 31 cities.
The 50-seat centre would also engage with local academia and provide work experience to students in the Nordrhein-Westfalen region, Tech Mahindra said in a press statement.
“This delivery center, in the heart of the Nordrhein-Westfalen region will also help us attract and retain local talent which is crucial to the next phase of our growth in the region,” said Vishaal Gupta, Head (Telecom) - Europe, Tech Mahindra
Currently, the company serves its European customers through 26 offices across 31 cities.
IRCTC records over half a million ticket bookings
New Delhi: Indian Railways Catering and Tourism Corporation (IRCTC) booked over half a million e-tickets on Wednesday. This is the highest number booked through the website in a single day.
The earlier record was set on September 2, 2012, when the online ticket portal of Indian Railways booked 572,000 tickets.
Currently, the site books 463,000 tickets in a day, compared to the average of 385,000 tickets booked in a day in 2013. That is a growth of 20 per cent year-over-year. This translates into a daily transaction of more than Rs 53 crore currently, as against Rs 37 crore in 2013.
In an effort to tackle consumer complaints regarding the slow speed of the website, IRCTC recently launched IRCTC Lite during tatkal booking hours. This service paid dividends in the form of increased number of bookings during the tatkal period, registering a jump of 40 per cent since February, said a press release by IRCTC.
"Our aim is to increase the booking rate to more than 7,000 tickets per minute from its present rate of 2,000 tickets and ultimately to make the site capable of handling 120,000 users at any point of time, as compared to its existing capacity of 40,000 users," a senior IRCTC official said.
The earlier record was set on September 2, 2012, when the online ticket portal of Indian Railways booked 572,000 tickets.
Currently, the site books 463,000 tickets in a day, compared to the average of 385,000 tickets booked in a day in 2013. That is a growth of 20 per cent year-over-year. This translates into a daily transaction of more than Rs 53 crore currently, as against Rs 37 crore in 2013.
In an effort to tackle consumer complaints regarding the slow speed of the website, IRCTC recently launched IRCTC Lite during tatkal booking hours. This service paid dividends in the form of increased number of bookings during the tatkal period, registering a jump of 40 per cent since February, said a press release by IRCTC.
"Our aim is to increase the booking rate to more than 7,000 tickets per minute from its present rate of 2,000 tickets and ultimately to make the site capable of handling 120,000 users at any point of time, as compared to its existing capacity of 40,000 users," a senior IRCTC official said.
Indian luxury car market youngest in world
Chennai: India's demographics have turned the country into one of the youngest luxury /premium car markets in the world. Top luxe brands like Audi, Mercedes-Benz and BMW — which together comprise more than 95% of India's luxury car market — say that India's luxury car demographic is among the youngest even in the emerging market pecking order.
Take Audi which, with its more than 10,000 unit tally, is now the No. 1 luxury car brand in the Indian market. India tops the list of young markets for Audi across the world, pipping hot spot China to the game. Said Joe King, head, Audi India: "The average age of luxury car buyer in India is around 35 years. Globally , it would be 43-45 years. In the Audi ecosystem, India is our youngest market."
Dittos Mercedes-Benz , which has also been targeting the 30+ age bracket with its new compact line-up . Said Santosh Iyer, head of marketing , Mercedes-Benz India: "India is certainly among our youngest markets. Typically, emerging markets show a younger profile compared to developed ones. So China, Brazil and Russia too are quite young markets for example . The average age globally and in India has come down after the introduction of new models like the A Class and B Class. In India, the average age for the A Class for example is 34-35 years but for the S Class it would be 45-50 years. So it differs model to model."
Luxury car marketers say part of the young drive has to do with the new range of compact products from the big three in the luxury automotive business. "Products like the Q3 and now the soon-to-belaunched A3 appeal to a younger set of customers," said Audi's King. "In future, the used cars will further expand this young customer base."
Auto experts say with an average price tag of around Rs 35 lakh, the entry into the luxury car segment is a tough call for most young buyers in markets like India. For example , the median age of BMW's customers stretches from 30 to 60 years. "It's not as if only young people buy luxury cars, but it is certainly true that more of them are now entering this segment in India thanks to products like the 1 Series," said the BMW spokesman.
That's why it's the entrylevel segment — comprising models like the A Class and B Class or the X1 or soon-to-debut A3 — that has had the maximum appeal among the sub-40 age bracket where the price tag is in the Rs 20 lakhplus category.
Auto experts say India's young demographic is among its most exciting aspects as an emerging market. "The thirst for luxury in India is enormous ," said Audi's King, a reason why the big three luxe brands are now looking at non-metro markets for incremental growth.
Take Audi which, with its more than 10,000 unit tally, is now the No. 1 luxury car brand in the Indian market. India tops the list of young markets for Audi across the world, pipping hot spot China to the game. Said Joe King, head, Audi India: "The average age of luxury car buyer in India is around 35 years. Globally , it would be 43-45 years. In the Audi ecosystem, India is our youngest market."
Dittos Mercedes-Benz , which has also been targeting the 30+ age bracket with its new compact line-up . Said Santosh Iyer, head of marketing , Mercedes-Benz India: "India is certainly among our youngest markets. Typically, emerging markets show a younger profile compared to developed ones. So China, Brazil and Russia too are quite young markets for example . The average age globally and in India has come down after the introduction of new models like the A Class and B Class. In India, the average age for the A Class for example is 34-35 years but for the S Class it would be 45-50 years. So it differs model to model."
Luxury car marketers say part of the young drive has to do with the new range of compact products from the big three in the luxury automotive business. "Products like the Q3 and now the soon-to-belaunched A3 appeal to a younger set of customers," said Audi's King. "In future, the used cars will further expand this young customer base."
Auto experts say with an average price tag of around Rs 35 lakh, the entry into the luxury car segment is a tough call for most young buyers in markets like India. For example , the median age of BMW's customers stretches from 30 to 60 years. "It's not as if only young people buy luxury cars, but it is certainly true that more of them are now entering this segment in India thanks to products like the 1 Series," said the BMW spokesman.
That's why it's the entrylevel segment — comprising models like the A Class and B Class or the X1 or soon-to-debut A3 — that has had the maximum appeal among the sub-40 age bracket where the price tag is in the Rs 20 lakhplus category.
Auto experts say India's young demographic is among its most exciting aspects as an emerging market. "The thirst for luxury in India is enormous ," said Audi's King, a reason why the big three luxe brands are now looking at non-metro markets for incremental growth.
Friday, March 7, 2014
Canara Bank, Biocon Foundation, and OTTET join hands for e-health project in Odisha
Bangalore: Canara Bank has lent support to Biocon Foundation and OTTET (Orissa Trust of Technical Education) for a public private partnership (PPP) with the Odisha government to deliver a novel e- healthcare program for the underprivileged and rural communities in the state.
OTTET has been actively engaged in an e-health program with the Odisha government to provide access to quality healthcare for 51,000 villages in the state. Now, Biocon Foundation has joined hands with OTTET to augment and implement a unique mega-ICT based e-Health project in the state.
Under this partnership Biocon Foundation & OTTET will set up an electronic diagnostic facility, an e-Health Centre, managed by local young entrepreneurs, at all Primary Health Centers (PHC) in Odisha. The entrepreneurs will be provided financial assistance by Canara Bank and will be trained by Biocon Foundation & OTTET to support the medical officer at the PHC for various healthcare and diagnostic services.
OTTET has been actively engaged in an e-health program with the Odisha government to provide access to quality healthcare for 51,000 villages in the state. Now, Biocon Foundation has joined hands with OTTET to augment and implement a unique mega-ICT based e-Health project in the state.
Under this partnership Biocon Foundation & OTTET will set up an electronic diagnostic facility, an e-Health Centre, managed by local young entrepreneurs, at all Primary Health Centers (PHC) in Odisha. The entrepreneurs will be provided financial assistance by Canara Bank and will be trained by Biocon Foundation & OTTET to support the medical officer at the PHC for various healthcare and diagnostic services.
Daimler India to start manufacturing buses from Chennai plant
Chennai: Truck manufacturer Daimler India Commercial Vehicles will start manufacturing buses from its facility near Chennai by the second quarter of 2015.
The company laid the foundation stone for the Rs. 425 crore (€50 million) factory on Thursday adjacent to its truck manufacturing plant at Oragadam, an industrial suburb of Chennai. Daimler India, the subsidiary of Daimler of Germany, is consolidating its entire truck and bus manufacturing operations in India with this plant.
Intra-city Transport
The factory with a capacity of about 1,500 buses a year, with capacity to increase to 4,000 units, will make Mercedes-Benz, rear-engine luxury buses and Bharat Benz front engine buses for the ‘volume market’ catering to intra city transport, school and staff buses.
The company has also entered into a supplier arrangement with Wrightbus of Northern Ireland to build the bus body for the Bharat Benz range.
Addressing the foundation stone laying ceremony, Marc Llisotella, Managing Director and CEO, Daimler India, said the company launched Bharat Benz, a new brand, of trucks in April 2012 and has over 14 variants in the market. The company hopes to replicate its success with trucks with the bus brand. Wolfgang Bernhard, Daimler AG Board Member in charge of trucks and buses, said the 28-acre facility at the truck factory complex will make nine tonnes to 16-tonne and heavier category, multi-axle buses. Daimler India will also export the buses and chassis to Africa and South East Asia, beginning with Indonesia. The company will use the Bharat Benz dealership network to market the buses in India.
Hartmut Schick, Head, Daimler Buses and CEO, EvoBus GmbH, said Daimler India will supply the Bharat Benz chassis to Wrightbus to build the complete bus. The international bus body building company has the flexibility and speed for this operation.
Mercedes Benz chassis will be built at the new factory and the engines imported from Brazi;. Daimler will build the high end Mercedes-Benz buses itself.
India and China are the key markets for Daimler. With an annual demand of about 40,000 buses, India’s market is half that of China. But with a population matching China’s, the growth potential is huge, he said.
The company laid the foundation stone for the Rs. 425 crore (€50 million) factory on Thursday adjacent to its truck manufacturing plant at Oragadam, an industrial suburb of Chennai. Daimler India, the subsidiary of Daimler of Germany, is consolidating its entire truck and bus manufacturing operations in India with this plant.
Intra-city Transport
The factory with a capacity of about 1,500 buses a year, with capacity to increase to 4,000 units, will make Mercedes-Benz, rear-engine luxury buses and Bharat Benz front engine buses for the ‘volume market’ catering to intra city transport, school and staff buses.
The company has also entered into a supplier arrangement with Wrightbus of Northern Ireland to build the bus body for the Bharat Benz range.
Addressing the foundation stone laying ceremony, Marc Llisotella, Managing Director and CEO, Daimler India, said the company launched Bharat Benz, a new brand, of trucks in April 2012 and has over 14 variants in the market. The company hopes to replicate its success with trucks with the bus brand. Wolfgang Bernhard, Daimler AG Board Member in charge of trucks and buses, said the 28-acre facility at the truck factory complex will make nine tonnes to 16-tonne and heavier category, multi-axle buses. Daimler India will also export the buses and chassis to Africa and South East Asia, beginning with Indonesia. The company will use the Bharat Benz dealership network to market the buses in India.
Hartmut Schick, Head, Daimler Buses and CEO, EvoBus GmbH, said Daimler India will supply the Bharat Benz chassis to Wrightbus to build the complete bus. The international bus body building company has the flexibility and speed for this operation.
Mercedes Benz chassis will be built at the new factory and the engines imported from Brazi;. Daimler will build the high end Mercedes-Benz buses itself.
India and China are the key markets for Daimler. With an annual demand of about 40,000 buses, India’s market is half that of China. But with a population matching China’s, the growth potential is huge, he said.
IT firms getting more business from Europe
Bangalore: For the first time since the 2008 financial crisis, Indian software exporters are beginning to see early signs of outsourcing business from Europe.
iGATE has won a $35 million, five-year outsourcing contract from Länsförsäkringar Alliance, a large Swedish financial services company. Around the same time, Royal Philips of the Netherlands extended its existing seven-year outsourcing agreement with Infosys to provide finance and accounting-related services for another five years.
Some of the outsourcing is coming through the inorganic route. For instance, late last month, Tech Mahindra, one of the top five Indian IT outsourcers, said that it would acquire the software services unit of German chemicals company BASF.
Similarly, in January, Virtusa acquired TradeTech, a Swedish financial services company.
Winds of change
Outsourcing deals, which were hard to come by in the pre-2008 era for Indian firms, got worse after the great recession. But they are starting to come back. “In the past, European companies were not convinced, unlike their American counterparts, regarding cost reduction as the sole motive to outsource. They demanded more value, which Indian outsourcers were unable to offer then. This is changing,” says Sanjoy Sen, a senior director at Deloitte.
In 2012, European companies were sitting on $1 trillion of working capital, according to European consultancy firm REL. This translates to roughly ten times the size of the Indian outsourcing sector. But when compared to the overall contribution, Europe accounts for around 30 per cent of the $100 billion IT exports sector.
A growing number of European companies believe that offshore firms are ideal partners to help them stay competitive, be more agile and address talent shortages,” says Peter Schumacher, President & Founder, Value Leadership Group.
Further, a study by Ernst and Young has estimated that 75 per cent of IT services have not been outsourced.
All that is starting to change, according to Indian IT companies. Some of them are putting in strategies to reap benefits once outsourcing demand opens up completely. For example, late last year, Wipro appointed Carl-Henrik Hallstrom as Regional Head for the Nordic region.
iGATE has won a $35 million, five-year outsourcing contract from Länsförsäkringar Alliance, a large Swedish financial services company. Around the same time, Royal Philips of the Netherlands extended its existing seven-year outsourcing agreement with Infosys to provide finance and accounting-related services for another five years.
Some of the outsourcing is coming through the inorganic route. For instance, late last month, Tech Mahindra, one of the top five Indian IT outsourcers, said that it would acquire the software services unit of German chemicals company BASF.
Similarly, in January, Virtusa acquired TradeTech, a Swedish financial services company.
Winds of change
Outsourcing deals, which were hard to come by in the pre-2008 era for Indian firms, got worse after the great recession. But they are starting to come back. “In the past, European companies were not convinced, unlike their American counterparts, regarding cost reduction as the sole motive to outsource. They demanded more value, which Indian outsourcers were unable to offer then. This is changing,” says Sanjoy Sen, a senior director at Deloitte.
In 2012, European companies were sitting on $1 trillion of working capital, according to European consultancy firm REL. This translates to roughly ten times the size of the Indian outsourcing sector. But when compared to the overall contribution, Europe accounts for around 30 per cent of the $100 billion IT exports sector.
A growing number of European companies believe that offshore firms are ideal partners to help them stay competitive, be more agile and address talent shortages,” says Peter Schumacher, President & Founder, Value Leadership Group.
Further, a study by Ernst and Young has estimated that 75 per cent of IT services have not been outsourced.
All that is starting to change, according to Indian IT companies. Some of them are putting in strategies to reap benefits once outsourcing demand opens up completely. For example, late last year, Wipro appointed Carl-Henrik Hallstrom as Regional Head for the Nordic region.
Passport Seva goes rural through Common Services Centers
The Ministry of External Affairs, along with CSC e-Governance Services India Limited {which is promoted by the Department of Electronics and Information Technology (DeitY)}, is all set to launch Passport related services through the vast network of over one lakh Common Services Centers (CSCs) across rural hinterland. The initiative would largely bridge the digital divide in the country.
The CSC Scheme was approved by the Government of India in September 2006 for setting up of 100,000+ (One Lakh+) Internet enabled centers in rural areas under the National e-Governance Plan (NeGP). The CSCs are the delivery points for Government, Private and Social Sector services in the areas of agriculture, health, education, banking, insurance, pension, utility bill payments, entertainment, etc. to rural citizens of India at their doorstep. The passport related services are being added as part of their bouquet of services.
Under the Passport Seva, the Ministry of External affairs has made it mandatory to complete the entire form filing process on-line, including payment of applicable fee and scheduling of appointment for seeking Passport related services. The CSCs would facilitate filling and uploading of Passport application form, payment of applicable fee (through debit/credit card or through SBI internet banking/challan mode) and scheduling of appointment for the visit to the Passport Seva Kendra (PSK) at nominal charge not exceeding Rs. 100/-. As per the appointment schedule, an applicant will have to visit the PSK for completion of application submission process (including collection of digital photographs/biometrics, verification of supporting documents and approval). The services through CSCs would be available throughout the week, including during the weekend.
The services would be shortly launched in pilot mode at 15 select CSC locations in Uttar Pradesh and Jharkhand in the second week of March 2014. The full roll out across the country is expected to conclude by end of March 2014.
For more details related to passport services, Passport website (www.passportindia.gov.in) or the National Call Centre (toll free number 1800-258-1800) may be accessed.
The CSC Scheme was approved by the Government of India in September 2006 for setting up of 100,000+ (One Lakh+) Internet enabled centers in rural areas under the National e-Governance Plan (NeGP). The CSCs are the delivery points for Government, Private and Social Sector services in the areas of agriculture, health, education, banking, insurance, pension, utility bill payments, entertainment, etc. to rural citizens of India at their doorstep. The passport related services are being added as part of their bouquet of services.
Under the Passport Seva, the Ministry of External affairs has made it mandatory to complete the entire form filing process on-line, including payment of applicable fee and scheduling of appointment for seeking Passport related services. The CSCs would facilitate filling and uploading of Passport application form, payment of applicable fee (through debit/credit card or through SBI internet banking/challan mode) and scheduling of appointment for the visit to the Passport Seva Kendra (PSK) at nominal charge not exceeding Rs. 100/-. As per the appointment schedule, an applicant will have to visit the PSK for completion of application submission process (including collection of digital photographs/biometrics, verification of supporting documents and approval). The services through CSCs would be available throughout the week, including during the weekend.
The services would be shortly launched in pilot mode at 15 select CSC locations in Uttar Pradesh and Jharkhand in the second week of March 2014. The full roll out across the country is expected to conclude by end of March 2014.
For more details related to passport services, Passport website (www.passportindia.gov.in) or the National Call Centre (toll free number 1800-258-1800) may be accessed.
GDP may grow 5.6% next fiscal: India Ratings
New Delhi: The economy is likely to grow 5.6 per cent in the next fiscal, India Ratings and Research has said. This is lower than the Government’s estimate of 6 per cent.
IMF has projected a growth rate of 5.4 per cent while NCAER says it will be 5.6 per cent. The World Bank has given most optimistic estimate of 6 per cent. Growth in 2013-14 is estimated at 4.9 per cent.
“The economic growth in FY15 (2014-15) is likely to be contributed majorly by the industrial sector, which is estimated to grow by 4.1 per cent. This is good news for centre as well state government finances,” it said in a report on public finances. State finances were likely to remain resilient to the slowdown, it said, estimating some slippage in the fiscal deficit of states, which could go up to 2.3 per cent against 2.2 per cent in 2013-14.
Value added tax (VAT) on petroleum products could pose a concentration risk for the consolidated state finances if crude oil prices decline, though this presently looks difficult. The petroleum sector contributed nearly 30 per cent (with a growth of 14.4 per cent on yearly basis) to the VAT collection of states.
Aggregate debt of states as a percentage of GDP is likely to increase to 21.7 per cent in the current fiscal from the budgeted estimate of 21.5 per cent. Despite this slippage, debt will be sustainable as the agency believes nominal growth of the economy in excess of interest rate on debt will continue to support the agency’s debt sustainability expectations. However, indirect risk such as guarantee and deficit, state PSUs' debt could impact the credit profile of some states.
It expects the liquidity of state governments to remain comfortable in 2014-15. Even in the current fiscal most states did not face difficulty due to a surge in investment in the national small savings fund.
IMF has projected a growth rate of 5.4 per cent while NCAER says it will be 5.6 per cent. The World Bank has given most optimistic estimate of 6 per cent. Growth in 2013-14 is estimated at 4.9 per cent.
“The economic growth in FY15 (2014-15) is likely to be contributed majorly by the industrial sector, which is estimated to grow by 4.1 per cent. This is good news for centre as well state government finances,” it said in a report on public finances. State finances were likely to remain resilient to the slowdown, it said, estimating some slippage in the fiscal deficit of states, which could go up to 2.3 per cent against 2.2 per cent in 2013-14.
Value added tax (VAT) on petroleum products could pose a concentration risk for the consolidated state finances if crude oil prices decline, though this presently looks difficult. The petroleum sector contributed nearly 30 per cent (with a growth of 14.4 per cent on yearly basis) to the VAT collection of states.
Aggregate debt of states as a percentage of GDP is likely to increase to 21.7 per cent in the current fiscal from the budgeted estimate of 21.5 per cent. Despite this slippage, debt will be sustainable as the agency believes nominal growth of the economy in excess of interest rate on debt will continue to support the agency’s debt sustainability expectations. However, indirect risk such as guarantee and deficit, state PSUs' debt could impact the credit profile of some states.
It expects the liquidity of state governments to remain comfortable in 2014-15. Even in the current fiscal most states did not face difficulty due to a surge in investment in the national small savings fund.
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