Indian economy grows to 6%

India’s central bank governor Bimal Jalan said recently the country’s economic growth was likely to be between 5.5 and 6.0 percent in the year to March 2002.

The Press Trust of India quoted Jalan saying the worldwide slowdown would not significantly affect the Indian economy and that growth at the end of the year would be among the highest in the world.

He said India’s inflation was currently hovering at about three percent and was much better than most countries of the world.

Latest figures show that India’s growth dropped to 5.2 percent last fiscal year, the lowest since the launch of decade-oil reforms, and lower than the budget target of seven percent set for the year.

Analysts have said they doubt India would be able to achieve the 6.5 percent growth target the government set for the current fiscal year following last year’s sharp fall.

They say India’s growth rate could fall we below last year’s 5.2 percent figure after further slowing of industries in the first six months of 2001.

Demand is still weak in India’s main export markets of the United States and Europe.

PHDCCI urges flexible lending norms for SSIs

PHD Chamber of Commerce and Industry (PHDCCI) has urged banks and financial institutions (FIs) to frame transparent norms and adopt flexible approach to extend financial assistance to small scale industries (SSIs).

"Banks should extend financial assistance to corporate, particularly SSIs, at economic cost and without hassles of collateral and guarantees," the chamber said in a statement.

In order to ensure a practical approach to the assessment of working capital requirement, the chamber suggested that the calculation should be based on estimated working capital requirement and not on the maximum permissible bank finance.

Suggesting review of the current practice of covering guarantee by full security as required in case of working capital for exports, the PHDCCI said banks should not insist on 100 percent margin for guarantee to a government department. The margin in these cases should not exceed 25 percent.

Pakistani exports surpass

Pakistani exports grew by more than six percent to 9.143 billion dollars during the fiscal year that ended last month, bringing down the national trade deficit, officials said recently.

The Pakistani statistics bureau said exports registered an increase of 6.7 percent over the 8.569 billion dollars posted in 1999-2000.

Cotton and its derivatives remained the leading contributor to Pakistan’s foreign trade but leather exports also showed a robust jump during 2000/01.

Raw cotton exports soared 92 percent to 139 million dollars; finished leather exports were up 30 percent to 228 million dollars and shipments of leather products increased 19 percent to 405 million dollars.

The statistics agency reported a marginal increase of 2.6 percent in exports of textile goods to 5.7 billion dollars during the fiscal year, which ended on June 30.

The better export performance helped Pakistan reduce its trade deficit to 1.52 billion dollars from 1.75 billion dollars in 1999/2000, the bureau said.

Economists believe the high cost of oil imports in the past 12 months impeded the military government’s efforts to cut the trade deficit by more.

Of the total 10.30 billion dollars spent on imports, Pakistan’s soil bill accounted for 3.3 billion dollars in 2000/01, up 18 percent from the previous year.

Amadeus signs with Bangladesh Biman

The world’s largest and the advanced global distribution system (GDS) company, Amadeus, has signed an agreement with Bangladesh Biman recently.

The participating carrier agreement’ as it is termed, will enable Biman to put its inventory and schedule on the Amadeus GDS system so that customers can make real time, online booking from anywhere in the world.

Speaking to ET from Bangladesh, Ankur Bhatia, director, Indian sub continent, Amadeus India, said, "we have about 200,000 outlets running our application across the world, with about 4,000 in India. Customers can log in from any of these countries to find out about flight schedules and flight availability. They can even do online bookings for their chosen flights, which would immediately get updated in our, as well as the airline’s database." While Biman is expected to get more visibility and access to the global markets through this agreement, it would have to shell out $ 3 per materialised booking that takes place through Amadeus’ GDS.

Sri Lankan economy in trouble

Sri Lanka’s war-battered economy is headed for more trouble because of political instability and a severe energy shortage, the central bank said recently.

Economic growth in the first quarter of this year was sharply lower at 1.3 percent from a year earlier compared with 6.6 percent in the same period last year, bank official said.

"The expected slower growth was largely due to slowing down of economic activities in industrial countries, which crippled the demand for manufactured exports", the bank said in a statement.

The Central bank had forecast 4.5 percent GDP growth in calendar year 2001 compared with 6.0 percent in 2000, but economists said the latest political developments have made their original projections too optimistic.

The country is facing 90 minute power cuts as the state run electricity utility is unable to meet demand due to a shortage of water in hydro-electricity generating reservoirs.

Compounding the problems is political uncertainty since the main opposition attempted to topple the government in April when a vote was taken on the national budget.