India's growth rate to accelerate to 6.5 pc in 2010: IMF

International Monetary Fund (IMF) on Thursday said India's economic growth rate will accelerate to 6.5 per cent in 2010 on account of robust domestic demand and rising private investment.

"India's growth is expected to accelerate to 6.5 per cent in 2010 from 5.33 per cent in 2009, on the back of strong domestic demand," the IMF said in its regional economic outlook.

"In particular, the normalisation of financial conditions is expected to support a rebound of private investment, sustaining demand even as the fiscal stimulus wanes," it added.

In its twice-yearly World Economic Outlook released in Istanbul earlier this month, the Fund had pegged the economic growth rate at 6.4 per cent for next year.

The World Economic Outlook had projected India's growth at 5.4 per cent for 2009.

Earlier this week, RBI retained economic growth projection at six per cent with upward bias for 2009-10 in its second quarterly review of monetary policy.

Even Prime Minister Manmohan Singh had recently said that the Indian economy would grow by 6-6.5 per cent in the current fiscal despite being affected by the global financial crisis and drought in the country.

On account of global financial meltdown, India's economic growth slowed down to 6.7 per cent during 2008-09, from over 9 per cent recorded in the previous three years.

In the first quarter of the current fiscal, Indian economy grew by 6.1 per cent.

The IMF said emerging Asia, in particular China and India are rebounding much more quickly that the western world.

It added that the economic recovery in Asia is faster than the rest of the world and is projected to grow by 5.75 per cent during 2010.

"The region (Asia) is out pacing other parts of the world, with the "green shoots" of recovery appearing earlier and taking firmer roots than elsewhere," the IMF said.

IMF forecasts suggest Asia will grow by 5.75 per cent in 2010, higher than the 1.25 per cent predicted for the G-7 economies, but short of the 6.66 per cent average recorded for the region over the past decade.

It added that the pickup in core inflation and inflation expectations in India suggest that demand pressures are already playing a role in pushing up inflation.

Inflation rose fastest in six months to stand at 1.51 per cent for the week ended 17th October, much in line with the RBI's warning that inflationary pressures are building up in the economy.

RBI, in its monetary policy has projected inflation to touch 6.5 per cent mark with upward bias by end of the current fiscal.

Andrew Yule exits JV; sells 26% in Phoenix Yule for Rs 63 cr

The government approved selling of the entire 26 per cent stake held by state-owned engineering firm Andrew Yule & Co in Phoenix Yule Ltd for Rs 62.82 crore to Continental ContiTech.

Phoenix Yule Ltd is a joint venture between Andrew Yule & Co Ltd (AYCL) and Germany's Phoenix Aktiengesellschaft and is one of the largest manufacturers of conveyor belts in India.



While AYCL held 26 per cent stake in the JV, the rest is owned by the German partner.



The valuation of shares have been approved at a rate of Rs 49.50 per share for over 1.19 crore shares, Information and Broadcasting Minister Ambika Soni told reporters in New Delhi on Thursday after the Cabinet meeting.



"Funds raised by way of disinvestment of AYCL shares in PYL will go towards repayment of a part of interest-free government of India loan of Rs 87.06 crore, which was extended to AYCL as a part of the restructuring package approved in 2007," Soni said.



The Rs 62.82 crore consideration also includes an additional compensation of Rs 3.69 crore, she added.



Continental ContiTech is a part of the German engineering and automotive group Continental.



The Phoenix Yule Ltd was formed on 19th November, 1998.



To implement the decision of the Cabinet dated 22nd February, 2007, an Inter-Ministerial Group headed by Additional Secretary and Financial Advisor, DHI was constituted to initiate the disinvestment process of AYCL's entire stake in PYL.



Also, to recommend the valuation of share price of PYL as per the terms laid down in JV signed between AYCL and PHX.



Kolkata-based AYCL, a public sector undertaking under the Department of Heavy Industry, is engaged in manufacturing of industrial fans, tea processing machinery, industrial pollution control equipment and system and allied products.



As on 31st March, 2008, AYCL had 15,754 regular employees.

Tata Motors to raise USD 600 mn via share sale in intl mkt

India's largest auto maker Tata Motors on Friday said it will raise up to USD 600 million (about Rs 2,783 crore) through issue of securities in the international market.

"The company has today launched an issuance of GDS (Global Depository Shares) and convertible notes for an aggregate amount up to USD 600 million, with an option to retain higher amount in the international market," Tata Motors said in a filing to the Bombay Stock Exchange.

Shares of Tata Motors plunged five per cent to a low of Rs 558.20 in the morning trade on the BSE.

Last month, Tata Motors sold 50 lakh shares in Tata Steel at an average price of Rs 473 a piece, aggregating to Rs 236.50 crore through open market transaction.

The auto maker had in August approached public for the second time in a year to raise about Rs 1,500 crore via fixed deposit schemes, offering up to 9.88 per cent annual interest for a three-year deposit.

In December 2008, it borrowed over Rs 2,000 crore from public for a period of up to three years as it was struggling to finance its USD 2.3-billion JLR buyout. nd

ONGC to ramp up oil production at Imperial

India's Oil and Natural Gas Corp (ONGC) plans to rapidly ramp up crude oil production of Imperial Energy, the firm it acquired early this year, and consolidate operations even as it looks at opportunities to expand its presence in western Siberia.

ONGC Videsh Ltd, the overseas investment arm of the state-run explorer, is currently in the process of consolidating operations.



"When we took over (Imperial in January 2009), oil production had fallen to below 6,000 barrels per day. We were able to restore it to about 8,200 bpd by May and have now ramped it up to 11,200 bpd," an official said.



As a confidence building measure, India's Petroleum Minister Murli Deora visited the Imperial Energy headquarters at Tomsk and met Tomsk Governor Viktor Kress.



The visit was aimed at helping the transition of the company from British parentage to an Indian one.



Deora, who flew into this sleepy western Siberia town on Sunday evening, was given a presentation on Imperial operations and was informed that the output would be ramped up to about 16,000 bpd by the year end. By the end of 2010, the production is targeted to cross 25,000 bpd.

Government may sell 15 pc stake in Coal India

The government is planning to increase its disinvestment target in Coal India from 10 per cent proposed earlier to 15 per cent as it wants to put a sizeable number of shares in the market and also offer them to employees and farmers displaced by its mines.

"The company wants to offer a chunk of shares in the market so that there is an adequate floating stock for

trading," a Coal Ministry official said, adding that it would be only through enough offering that Coal India Ltd would be able to discover its valuation.



The official said the CIL's initial public offering of about 15 per cent would be done in one go and not in bits and

pieces.



The company, which has a paid-up equity capital of about Rs 6,316 crore, clocked a pre-tax profit of Rs 8,738.46 crore in the last fiscal.



It plans to offer stock options to over 4 lakh employees. Besides, it would also offer shares to the displaced farmers as part of the compensation.



CIL has mines spread in Chattishargh, orissa and Jharkhand on land acquired

from farmers.



While the officials did not specify any time-frame on the IPO, the company and the ministry is in touch with market regulator SEBI on the proposal.



CIL Chairman P S Bhattacharyya had met Disinvestment Secretary Sunil Mitral last month to discuss the stake-sale proposal.

Dreamworks seals Indian film deal

Hollywood's Dreamworks studio is finally set to receive a multi-million dollar film production deal from Indian company, Reliance Big Entertainment.

The first film from the investment will be Harvey, an adaptation of a play about a man and a giant invisible rabbit. Stephen Spielberg will direct.

Reliance is a key player in Bollywood. Dreamworks was co-founded by Spielberg.

Under the agreement, Dreamworks will make five to six films every year for global audiences.

The second movie, titled Dinner for Schmucks, will begin shooting in October.

EPF interest rate retained at 8.5 pc for 2009-10

Over 4.5 crore subscribers will get 8.5 per cent return for 2009-10 on their provident fund deposits at a time when banks are lowering the deposit rates across the board.

Two days before the budget, the Employees' Provident Fund Organisation (EPFO) decided to retain the interest rate at 8.5 per cent for the fifth consecutive year.



The decision to retain the interest rate was taken by EPFO's policy-making body, Central Board of Trustees (CBT) which was chaired by Labour Minister M Mallikarjun Kharge.



The decision will now go to the Finance Ministry for ratification.



The payment of 8.5 per cent interest rate on provident fund deposits, which are of the order of Rs 1.82 lakh crore,

is expected to leave a surplus of Rs 6.4 crore during the current fiscal.



The EPFO has decided to retain the interest rate even as the interest being paid by the banks has been coming down in the recent past.



The country's largest bank SBI recently decided to cut deposit rates by 25 to 50 basis points in May, while several others followed suit.



The decision to pay 8.5 per cent interest rate was on expected lines as payment of a higher amount would result in a deficit in the EPFO's account.



For, sources said, the EPFO has no reserves left to pay a higher interest rate than 8.5 per cent this fiscal as it had suffered a Rs 139-crore deficit during 2008-09 for maintaining the same rate of interest on deposits.

Tata Motors to drive in Nano to Africa in 2010

India's largest auto maker Tata Motors will introduce its small car Nano-considered the world's cheapest,in Nigeria within the next 18 months,ahead of its planned launch in Europe.

The car would be available for about NGN 360 for the base model, same as the price in the Indian markets. The car carries a price tag of Rs 1.23 lakh to Rs 1.72 lakh (ex-showroom) in the Indian capital for three variants.



"Tata Motors will make the Nano available in Nigeria in the next one year to one and a half years," a senior official of Tata Africa Nigeria, Sudeep Ray, said.



Tata Africa Nigeria is a subsidiary of Tata Africa, the Indian auto major's African venture.



Ray, however, declined to give details whether the 'cheapest' car of the world be assembled in Nigeria or it would be sold as a completely-built-unit.

India attracts USD 2.34 bn FDI in first month of 2009-10

India attracted USD 2.34 billion of foreign investments in April, a rise of 19.3 percent over the previous month, signalling confidence in the country's economy by foreign investors amid the global financial crisis.

However, as compared to April last year, foreign direct investment (FDI) in the first month of the fiscal 2009-10, was much lower.

"In April 2009, foreign inflows were USD 2.34 billion, about 19 per cent higher than March," an official told a news agency.

The inflows in April and March last fiscal were USD 3.74 billion and USD 1.96 billion, respectively.

Thanks to robust trends in the first six months of the last fiscal, total FDI in 2008-09 was USD 27.30 billion, against USD 24.5 billion in 2007-08.

Rating agency CRISIL Principal Economist D K Joshi said the current year would be difficult in the wake of the global economic downturn.

"Given the poor global economic scenario, the figures are not too discouraging but the year 2009-10 will be more challenging," Joshi said.

India had scaled down the FDI target by USD five billion from USD 35 billion last fiscal. Cumulative FDI from April 2000 to March 2009 stands close to about USD 90 billion.

Tripura thermal power project gets CCEA nod

The Cabinet Committee on Economic Affairs (CCEA) has approved a 100 MW gas-based thermal power project at Monarchak in West Tripura district, official sources said.

The decision was taken on Friday by the CCEA in New Delhi, sources said.


According to officials of North East Electric Power Corporation (NEEPCO), the estimated cost of the power project is Rs 421 crore.


NEEPCO has spent Rs 27.47 crore on infrastructure of the project. The corporation would make 30 per cent contribution to launch the project while 70 per cent of the funds would be borne by selling equity.


The project would be operational in 30 months and Tripura would procure the entire production of 100 MW.



NEEPCO has inked a deal with the state government and also signed an agreement with ONGC to get natural gas to feed the power project.


Sources in ONGC said they would soon begin exploration of gas in the state for the project as there is a huge recoverable gas stock in Tripura.

Govt role in gas dispute crucial; can't lose revenue: Deora

Asserting that nothing could be done on the K-G gas dispute without the active involvement of the govt, Petroleum Minister Murli Deora said that warring Ambani brothers had met him after the Bombay High Court ruling on the row on 15th June.

The government wants early solution to the gas dispute as it cannot afford to lose revenues, Deora told reporters in Mumbai on Friday



"I am in touch with them (Ambanis), the brothers are "not very friendly, unfortunately," he added.


The Bombay High Court on Monday asked Mukesh Ambani-led Reliance Industries (RIL) to supply gas from the K-G basin at USD 2.34 mmBtu to younger brother Anil Ambani group firm Reliance Natural Resources (RNRL).


A division bench of Justices J N Patel and K K Tated asked the two companies to enter into a fresh "suitable agreement" within a month.


Meanwhile, RNRL has filed a caveat before the Supreme Court to preclude the chances of an ex parte (in the interest of one party only) being passed against it on the gas sharing deal it had signed with Mukesh Ambani-led RIL.



"We are trying our best to find a solution to the gas dispute. In no way can the government afford to lose the money. We need the revenues from K-G gas for development of the country," Deora said.


He, however, declined to divulge details of his meetings with Ambanis.

'India to work for developing nations in tackling recession'

President Pratibha Patil said that India will work towards ensuring representation of developing countries in global financial institutions while dealing with the economic crisis.

In an interaction with envoys from Maldives, Gambia and Sudan, Patil said on Friday while dealing with the current global financial crises, the long-pending issue of representation for developing countries in global financial institutions would be addressed.


Three High Commissioners Abdul Azeez Yoosuf (Maldives), Felix Badji (Gambia), and Khider Haroun Ahmed Abdulrazig (Sudan) presented their credentials to the President at a ceremony in Rashtrapati Bhavan in New Delhi on Friday.


This was the first Credentials Presentation Ceremony since the formation of the new government.


The President also talked about the recently held general elections in the country and massive mobilization of polling personnel for the conduct of the polls, a Rashtrapati Bhavan spokesperson said.


Patil said India would continue to work for peace, stability and development in its region and the world.


She also told the envoys that India wants to improve its bilateral relations with their countries.


The ceremony was attended by senior members of the missions and officials of the External Affairs Ministry.

Industry asks Govt to decontrol fuel price, restore tax holiday

Freeing petrol and diesel prices from official control, restoring tax breaks on natural gas production and tax holiday for private oil refiners should be part of the government's agenda in the first 100 days, industry wished.

The Petroleum Federation of India, the apex body of public and private oil firms has submitted to the Oil Ministry a 100-day agenda for the new Government.


On top of its list is decontrol of petrol and diesel prices. Currently, public sector retailers sell auto fuel at Government-dictated rates which the private sector competition is unable to match in times of high input cost (crude oil prices).


Petrofed has asked the Government to operationalise the 28th March 2002, resolution that freed petrol and diesel price from administrative control. State retailers fixed retail selling price every fortnight based on international rates till 2004 when the UPA came into power for the first time and brought back administrative controls.


The Federation also wanted the Government to gradually phase out subsidy on domestic LPG through provision of subsidy to families through coupons/smart cards.

Also, it wanted the Government to provide targeted direct subsidy administered through a smart card system for distribution of kerosene.


It wanted the tax holiday on natural gas to be restored and the same extended to private oil refiners.



The Finance Minister P Chidambaram had in 2008 denied natural gas production of seven year break from payment of income tax like the one enjoyed by producers of crude oil and Petrofed wanted this to be restored. The tax holiday should be enhanced to 10 years from 7 years currently.


"Provide flexibility to claim tax holiday for oil as well as gas production in any 10 years during the first 15 years after the commencement of commercial production under section 80IB(9) of Income Tax Act," its memorandum said.


Petrofed also wanted the seven-year income tax holiday on setting up of refineries to be extended to the private sector.


Currently, this is available only to public sector firms setting up units by March 2012. It also suggested granting 'declared goods' status to natural gas and raising price of gas sold under administered price regime.


Further, it asked the Government to unburden the exploration and production sector of sticking Service Tax since it cannot be set-off, include petroleum products under the Goods and Services Tax (GST) regime, and waive fully the custom duty on import of materials used in transmission projects and removal of anomaly in Naphtha taxation.



Petrofed wanted the Finance Ministry to enlarge the list of goods that could be imported duty-free while also simplifying custom procedures for drilling tools and equipments imported under duty concessions.


"Provide single window clearance for the upstream companies to expedite the process of clearance related to exploration blocks and reduce time and cost overruns," it said.


It recommended developing Petroleum Economic Zone for developing a world-class global upstream services hub in India.

India's economy to grow by 7.2 per cent in 2009-10: Assocham

Indian economy may grow at 7.2 this fiscal on the back of improvement in consumer sentiment, policy reforms and projected growth in agriculture and industrial sector, Assocham survey said.

In a survey of 300 businessmen, about 42 per cent of the respondents said that policy reforms would cast large impact on the GDP growth.


"Indian economy is expected to register a GDP growth rate of 7.2 per cent in 2009-10 on account of improvement in consumer sentiment, rural India and policy reforms," the chamber said.


Majority of the respondents said that the government would be able to bring about significant reforms this year, and about 91 per cent believed that there are good chances of improvement in consumer sentiments in the following months.


About 40 per cent respondents felt that isolation of the rural India from the impact of recession has a huge impact on the GDP growth rate, it said.


"The agriculture sector is expected to record the growth rate of 3.5 per cent as good monsoons, better crop prices and upward revision of the crop forecast has ensured a healthy growth rate for the agriculture sector," it said.


The industry sector which was reeling under pressure due to high interest rates, reduced demand and global recession is expected to record the growth rate close to 4.6 per cent in the fiscal.



With the improvement in consumer sentiment, increased government spending and anticipated reforms, the services sector is estimated to chart 9.7 per cent growth in 2009-10, Assocham said.


About 75 per cent of the respondents believed that government would use further fiscal incentives to stimulate the economy, it said.


However, the factors which continue to inhibit the economic growth rate from pacing up include poor state of the world economy and money market conditions, it added.

FM to hold pre-budget consultations today

Finance Minister Pranab Mukherjee will start the customary pre-budget consultations with different interest groups on Monday for preparation of the budget, likely to be presented in the first week of July.

Mukherjee will hold consultations with trade and industry bodies, economists, agriculturists, bankers and corporate honchos in the run up to the budget, which industry hopes will be growth-oriented.

"We will meet the FM for the pre-budget consultations on Monday," FICCI President Harsh Pati Singhania said as he plans to ask the government for steps to restore economic growth, ensure national security and improve governance.

Apart from industry bodies as FICCI, CII, ASSOCHAM and FIEO, industry sources say the Finance Minister will hold discussions with corporate honchos like Ratan Tata, Mukesh Ambani, Anil Ambani, Kumarmangalam Birla and Sunil Bharti Mittal.

"The regular budget 2009-10 exercises are underway in full swing," Mukherjee had said on Thursday pointing out that the Congress in its manifesto had promised to come out with the Budget within 45 days of the government formation.



Faced with the challenge of reviving the economy, impacted by the global financial meltdown and demand contraction, Mukherjee started consultations with the top Ministry officials on budget soon after taking charge last Monday.

He said the focus of the government would be "Aam Admi" (common man) and that the budget would address the problems of sectors like textiles, leather and gems and jewellery hit hard by the financial crisis.

With inflation at low levels, the industry bodies see no reason for interest rates not falling to single digit levels.



CII President Venu Srinivasan had earlier said that interest rates in India remain high compared to many other economies.

Industry bodies like CII, FICCI, ASSOCHAM and American Chamber of Commerce in India have already presented their pre-budget memorandum to Revenue Secretary P V Bhide even before the formation of the new government.

The Prime Minister Office has also started work on the 100-day action plan for the new government and at the same time different ministries are also finalising priority programmes for the first three months.

PM for pushing reforms, jobs and investment

Set to begin a new term in office, Prime Minister Manmohan Singh on Tuesday spoke of the need for reforms and reverse the slowing down of investment and employment generation caused by global economic slowdown.

Shortly after he was elected leader of the Congress Parliamentary Party paving way for him to become the Prime Minister for the second term, Singh said, "There is some slowing down of investment and employment generation. We have to reverse this. We have to revive growth and make it even more inclusive."

The Prime Minister said sustaining growth requires new investment and better management of government finances. This also "requires reform of the economy... Revitalisation of agriculture and acceleration of industrial development".

After growing by an average annual nine per cent for the last four years, the Indian economy came under pressure of the global meltdown and expanded at a slower pace of around seven per cent in 2008-09.

"...The global economic slowdown has hurt us.," Singh said. He said he would ask every minister to set time-bound targets for implementation of the election promises of the Congress Party and policies of the each ministry. "We will undertake quarterly review of the programme implementation by each ministry," he said.

The savings and investment rates have to be kept high to remain globally competitive in the face of economic challenges, he said.

Stock market into buying frenzy; trading suspended for day

Hailing the decisive mandate to the Congress-led UPA, investors went into a buying frenzy, resulting in an unprecedented surge in the BSE Sensex, which rose by nearly 2,100 points and forced the authorities to suspend trading for the day.

Trading was suspended for two hours within seconds of opening of the market after the BSE surged by over 1,300 points and the authorities closed the floor immediately after trading resumed at 1155 hours. The BSE sensex closed 17 percent higher at 14,272.63.

Echoing the sentiment, the NSE index also rose by 20 percent, prompting the authorities to suspend trading for the day.



In two bursts, the 50-share Nifty rose over 712 points, a buoyancy that led to an all-round appreciation in share prices, which marketmen say is the first of its kind.

The BSE 30-share index zoomed to close at 14,272, up by nearly 2,100 points. The NSE index surpassed all the three upper limits of 10, 15 and 20 percent, forcing the authorities to suspend trading for the day.

With the UPA getting near a clear majority in the 15th Lok Sabha, economic reforms are set to get pace in all the sectors, a leading broker said.

Bharti Airtel becomes India's biggest music company

Indian telecom giant Bharti Airtel has now become the country's biggest music company, overtaking the industry leader Saregama, on the back of its music-related value-added mobile services, a top executive has said.

"Music Bharti has become the largest music company in India, overtaking Saregama India Ltd in terms of revenue," Bharti Airtel's Deputy CEO Sanjay Kapoor said.

While Kapoor did not disclose the exact revenue earned by Music Bharti, which provides music services like hello tunes, call-back tunes and music on demand, Saregama had a annual revenue of about Rs 150 crore in the fiscal ended 31st March 2008.

Bharti Airtel, flagship company of Sunil Mittal-led Bharti Group, recently entered into an exclusive multi-million dollar deal with Machester United here, under which it would offer its mobile subscribers access to the mobile content related to the British soccer club.

"We are growing fast in the music segment," Kapoor said, adding there was huge growth potential for the company in other value-added service segments like mobile commerce also.



"About 80 per cent of Indians are unbanked and mobile- commerce, as also money transfer through mobiles, would bring in financial inclusion," Kapoor said.

"These services are catching up very fast among Indians and have a huge potential for generating revenues at Bharti Airtel," he added.

Late last year, Bharti Airtel had bagged the 'Best Mobile Music, TV or Video Service' award at the GSMA Asia Mobile Award 2008 at Macau.



Airtel's Music-On-Demand was awarded for creating a uniquely intuitive, personalised user experience of music on mobile.

Airtel had bagged the prestigious award among stiff competition from global leaders such as Telstra Corporation, Australia, Geodesic Inc, US, Artificial Life Inc, Hong Kong and Gracenote, US.

The company was also recognised as the best among its global peers for its Music-On-Demand service.



At that time, the company had said, "At Airtel, we believe that music in its various forms, genres strikes a universal chord with mobile users. Today an increasing number of customers are looking at the mobile as their single device for all entertainment needs."

India to grow at over 7 pc in the current fiscal: PMEAC

Prime Minister's Economic Advisory Council (PMEAC) said that it expects the country's economy to grow at over seven per cent in the current fiscal as it has already started showing signs of recovery.

"Seven per cent plus is what my 2009-10 overall forecast is...I think it has already started recovering in my own assessment," PMEAC Chairman Suresh Tendulkar told on the sidelines of a conference on broadband in New Delhi on Friday.


He further said it expects rebound in the economy after September as the worst was over.


"I have been maintaining that the worst is already over, (I expect) good recovery after September," Tendulkar added.


Asked if the contracting industrial production worried him, he said the revised industrial production numbers were higher than the provisional ones, so it did not bother him much.


Despite three stimulus packages announced by the government, the Indian economy grew by 5.3 per cent in the third quarter of the last fiscal, its lowest rate in over five years, against a whopping 8.9 per cent a year ago.


In the first nine months of last fiscal, the economy grew by 6.9 per cent.



For whole of 2008-09, the advance estimates of Central Statistical Organisation (CSO) pegged the economic growth at 7.1 per cent, which seems a tough task in the wake of dismal industrial growth numbers.



On account of slackening demand hitting Indian trade more than anticipated, PMEAC lowered the country's growth estimate to 6.5-7 per cent from the earlier estimate of 7.1 per cent for 2008-09.


To boost the economy, the government came out with three stimulus packages in the month of December, January and in the interim budget, providing incentives to various sectors.


The Reserve Bank also took monetary easing measures by infusing more than Rs 4 lakh crore since October.


However, industrial growth turned negative in October, December and in January.


Besides, exports declined for the fifth consecutive month in February after it had a good run in the first half of 2008-09, growing by over 30 per cent.


The orders got cancelled and exporters found it difficult to get new bookings, thereafter, with demands slackening overseas due to global financial crisis.


As a result, from October onward, exports have been on a decline, with export in February falling by 21.7 per cent, the lowest in 13 years.

2,100 Infosys employees face axe

With companies keen on maximum utilisation of employees and low tolerance to poor performance in the backdrop of global economic turmoil, nearly 2,100 employees in software firm Infosys have faced the axe.

"Some of these employees have been asked to go while some have left on their own," V Balakrishnan, CFO of the city-headquartered Nasdaq-listed company, said on Saturday.


Prior to asking the employees to leave, they were put on a performance improvement course and those who showed no improvement were asked to leave while some others quit, he said.


"Tolerance to poor performance is very low given the current economic scenario," said Infosys CEO Kris Gopalakrishnan.


Usually, the employees who showed poor performance were given some more time to improve themselves, but this time there had been no such consideration, he said.


Both the officials said the sacking was part of the annual routine, which usually formed five per cent of the total number of employees but this time it was much lower.


Some of the employees had been "outplaced", Kris said, which refers to the firm hiring the services of placement agencies to help the employees to get placements in other firms.


Infosys has a workforce of 1,05,000, including trainees.