If you missed our coverage during the week, here is a quick summary.
GROWTH DAMPENER
FY12 GDP growth estimates came in at a 3 year low led by a sharp slowdown in manufacturing, agriculture and mining. India’s gross domestic product or GDP growth is expected to be lower than 7 per cent at 6.9 per cent, according to advance estimates for the year ending March 2012. This is the slowest growth after 2008-09, when India registered a growth rate of 6.7 per cent. Finance Minister Pranab Mukherjee says it is disappointing but hopes for an upward revision. (Read More)
Also Read: Five takeaways from advance GDP estimates
INDUSTRY LACKS IGNITION
Industrial Productivity in December also unexpectedly plunged to a mere 1.8 per cent. India’s industrial output or IIP was slower than the expected 2.7 per cent, and lower than the 5.7 per cent expansion in November 2011. Following the announcement, Industry body CII called for the RBI to cut interest rates to boost growth.
Also read: What low IIP growth in December means
TELCOS: READY TO RE-BID FOR SPECTRUM POST SC VERDICT?
Telecom companies agree that a spectrum auction as mandated by the Supreme Court is a fair way of allocation. But, the foreign players made their call heard loud and clear this week after the Supreme Court cancelled 122 2G licenses last week.
For starters Norwegian Telecom major Telenor is preparing for a fight to try and retain its license in India under its Uninor brand. It is even willing to re-bid for spectrum provided certain conditions are met. Meanwhile, Bahrain’s Batleco chose to sell its stake and exit India, while UAE-based Etisalat announced a write-off of its Indian investments.
Also read: What the 2G verdict means for you
REWORKING TAX SLABS
The Parliament's Standing committee deferred decision to submit the Direct tax Code report. But all consultations will end by March 2. In what could be dramatic cuts in personal tax rates, the committee headed by BJP leader Yashwant Sinha has recommended minimum tax exemption limit to be set at Rs 5 lakh per annum. Currently, male tax payers pay no tax up to Rs 1.8 lakh in annual income. (Read More)
IT SECTOR BLUES
More pain ahead for the IT sector as Industry body Nasscom cut its growth forecast to 11 – 14 per cent in FY 13 from 17 per cent in FY'12 on uncertain policy environment and a deepening EU crisis. IT further said that aggregate revenues from the sector are likely to cross $100 billion this year, of which about $69 billion will come from exports alone. (Read More)
POLICY BREATHER FOR AIRLINES
It’ has been a good weak for the aviation sector. In what could boost sentiment for airlines, the group of ministers (GoM) on aviation approved that jet fuel could now be directly imported. This could translate into about 10 per cent operating cost saving for carriers. However, Aviation turbine fuel is a major source of revenue for states. With this source of revenue drying up, states may impose an entry tax on jet fuel, which could again raise the burden on airline companies. (Read More)
The group of ministers took another crucial decision this week. Debt-ridden national carrier Air India on Tuesday got a breather when Civil Aviation minister Ajit Singh said that a plan to recast debt of Rs 22,000 crore has been approved by the Group of Ministers. It will now go to the Cabinet Committee on Economic Affairs for its nod. (Read More)
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