Tuesday, June 12, 2012
NEWS & VIEWS TODAY=13TH, JUNE, 2012 = INDUSTRIAL GROWTH AT STAND STILL = GOVT NEEDS REBOOT, SAY NRN & PREMJI = SUNDARAM FASTENERS SET TO GROW FURTHER = VENUS REMEDIES GETS US PATENT = SBI EXPECTS CRR CUT BY 1% = FM EXPRESSES CONCERN OVER BAD LOANS OF SBI,CBI,UCO
NEWS & VIEWS TODAY
13TH, JUNE, 2012
INDUSTRIAL GROWTH AT STAND STILL IN APRIL
GOVT NEEDS REBOOT – SAY NRN & PREMJI
SUNDARAM FASTENERS SET TO GROW FURTHER
VENUS REMEDIES GETS US PATENT
SBI EXPECTS CRR CUT BY 1%
FM EXPRESSES CONCERN OVER BAD LOANS OF SBI,CBI,UCO
1. NEWS :- INDUSTRIAL OUTPUT GROWTH is virtually at stand still, indicated by the April figures.FM says, he is disappointed. Production of capital Goods contracted 16.3% in April, the second successive month of decline.
VIEWS :- While Industrial output growth reflects current sluggishness, contraction of capital Goods production reflects future slow down prospects. Government and RBI have to do a LOT to stop this downhill run. This blog has suggested a 3% Rate cut and sticks to it. Last year, RBI had enhanced Rates much beyond this level – whose results, combined with Government’s policy Paralysis – is what we are witnessing now. These can be reversed. But, firm, strong measures are needed.
2. NEWS :- GOVT NEEDS a reboot, say Murthy and Premji
VIEWS :- These views are widespread. Government is not making efforts to move with enabling legislation – by making peace with opposition, Team ANNA+RamDevji combine etc. Instead, it is always in a fighting and retributive mood.
If Team Anna is swaying towards Politics, it is largely the fault of the Government, which did not make any serious attempts to pass the Lok Pal Bill. If they are criticizing the Government, please look at the people within Congress who start the words of war first from congress’ side. And, why lodge so many cases the moment some one criticizes? Even Industry is unwilling to talk, even when suffering.
But when Industry captains like NRN Murthy, Premji and Naresh Goel have spoken this way- the good thing that Government can do is – to invite them, discuss with them, and see their point of view. Government must act in overall public interest – but in recent past, it has been blindly following measures to enhance immediate revenues, even if it kills the Industries and growth.
India must encourage rational, issue based criticism much, much more than at present. Yes. Individual based criticism must come down. But, if Individual is responsible for corruption, black money etc there seems to be no other way.
The lack of adequate consumer organizations in sectors like Telecom and Airlines ( and possibly railways, roadways etc ) is highlighted in current imbroglio. Their voice is never audible at all.
3. NEWS :- SUNDARAM FASTENERS SET TO GROW FURTHER :-The company is upgrading its technology well and is expecting Growth to come – well in coming days.
VIEWS :- Even with sluggish domestic Auto market conditions expected in FY 2013, Sundaram Fasteners can do well, especially in its Export Market of US, which has grown by 50%. If Government does perform better in FY 2013 as FM says, it will be a great story for Sundaram. The increase in Petrol / Diesel prices when international prices go up – and then, not decreasing them, when they go down – is a dampener at the moment. But, things could improve. Hope, FM stays as FM – to implement his promises.
4. NEWS :- VENUS REMEDIES GETS US PATENT :- The company has received a PatenT from US Patent office for an anti-biotic product that targets drug resistant infections.
VIEWS :- Venus Remedies has been bagging Patents from different countries regularly. It is graduating into a Great innovator and all that it needs to do now – is to commercialize its drugs with the same efficiency. It seems to have Great future.
5. NEWS :- SBI EXPECTS CRR CUT BY 1%.
VIEWS :- SBI Hopes for CRR Rate cut by 1% is good. But, its view that Rate cut is more symbolic and not very substantial is not correct. If it was more symbolic, why did RBI raise them so high every month last year? Rate cut reduces the COST OF CAPITAL for all Industries – and thereby enhances Return on capital and that is what matters right now. Capital Goods Production is falling by a huge percentage. Therefore, Rate cut of sufficient magnitude is a Must now. Even the FM has expressed his hopes for it. Yes. CRR cut also is a good addition to Rate cut – but not an alternative to it.
6. NEWS :- FM EXPRESSES CONCERN OVER BAD LOANS –especially at SBI,CBI, UCO;
VIEWS :- It is good that FM has expressed concern. It is necessary that the Big Banks look at the total Industry perspective when they look at Bad loans of the individual companies. They must report on Industries / Individual companies which have Negative outlook to Government, with what they feel as suitable measures to keep them in good health. A stitch in time saves Nine.
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