Private sector steers India's growth in 21st century

Some called it the "mixed economy", some called it the "mixed-up economy", some others termed it state capitalism and some even dubbed it a "bureaucratic socialist" economy.

For the first 50 years after Independence, the Indian economy has been described by many epithets. The bottom line was, of course, the fact that a large part of India's modern industrial and services economy was in the public, or state, sector.

While the agricultural economy was largely characterised by private ownership, manufacturing was predominantly in the public sector till the 1980s, and following the nationalisation of banks, the financial sector too was dominated by state-owned institutions.

All that began to change in the 1980s. The 1990s witnessed dramatic changes in policy and the unleashing of Indian enterprise.

However, it is only since 2000 that private Indian enterprise has come into its own.

As a recent report in Business Standard (June 26, 2010) showed, in the decade 2000-2010, the private corporate sector overtook the public sector both in terms of net sales and net profits. The private sector's share in the net sales of manufacturing and services sector output increased from 48.83 per cent in 2000-01 to 68.55 per cent in 2009-10, with the public sector's share consequently falling from 51.17 per cent to 31.45 per cent.

Similarly, the private sector's share of net profit in the non-agricultural economy increased from 39.17 per cent to 63.86 per cent for the same period, with a decline in public sector share from 60.83 per cent to 36.14 per cent.

In short, the past decade has seen India's "mixed economy" become an essentially private enterprise economy. Thousands of entrepreneurs, led by some inspiring leaders who have acquired a global footprint, are driving the growth process in India.

Several factors, both positive and negative, explain this phenomenon. On the positive side is the rise of Indian enterprise, especially in the energy, telecommunications, civil aviation, manufacturing, finance and banking and information technology sectors.

The sharp increase in foreign direct investment during this decade has also contributed to the increase in the share of the private sector in national income, sales and profits.

On the negative side, the inability of the public sector to generate internal resources for growth and the fiscal constraints on government that have contributed to a decline in public investment have contributed to a decline in the share of the public sector.

While the dynamism and the growth of private enterprise are cause for celebration, the sluggishness of public investment is a matter of concern. India needs more public investment, especially in social and economic infrastructure, to sustain upwards of 9 per cent national income growth and also to fuel private sector dynamism.

Most developed market economies also have a substantial public sector, especially in infrastructure, public services and defence. As a developing economy striving to industrialise and generate employment, India needs a balanced growth of both the private and public sectors.

Stocks Rally in Europe for First Time in Five Days

 

European stocks gained for the first time in five days as a rally by automakers outweighed a decline in retailer shares and the Group of 20 nations pledged to safeguard growth while cutting debt.

PSA Peugeot Citroen climbed 1.5 percent as La Lettre de L'Expansion reported that France's biggest carmaker has lifted its sales target for the DS3 model. Premier Oil Plc surged 7.1 percent after the explorer said a North Sea well encountered oil-bearing sandstones. Hennes & Mauritz AB fell 2.8 percent after Chief Executive Officer Karl-Johan Persson told La Tribune that Europe's second-largest clothing retailer isn't for sale.

The Stoxx Europe 600 Index rose 0.4 percent to 249.24 at 3:16 p.m. in London, having swung between gains and losses at least six times. The gauge fell 2.8 percent last week as disappointing U.S. housing data and a surge in the cost to protect from a Greek default reignited concern about the global recovery. The index is trading at 15 times reported earnings, near the lowest level since 2008, according to Bloomberg data.

"The market has declined a lot and valuations reflect a lot of the uncertainty," said Charles Dautresme, a strategist at Axa Investment Management in Paris, which oversees about $626 billion. "In the long term, we'll come out winning. We shouldn't be too negative."

National benchmark indexes rose in 10 of the 18 western European markets. France's CAC 40 advanced 0.3 percent and Germany's DAX increased 0.4 percent. The U.K.'s FTSE 100 slipped 0.2 percent.

Banking Oversight

Global efforts to tighten banking oversight have gained momentum, U.S. President Barack Obama said following the G-20 meeting this weekend. Group leaders agreed to pursue higher capital requirements for banks once their economic recoveries take root and endorsed targets to cut deficits at least by half by 2013 and stabilize their debt-to-output ratios by 2016.

Central banks and governments should consider withdrawing extraordinary measures to avoid skewing investment decisions and delaying companies' recording of losses, the Bank for International Settlements said.

"The time has come to ask when and how these powerful measures can be phased out," the Basel, Switzerland-based BIS said in its annual report published today. "The cumulating side effects themselves pose a danger that, at the very least, implies exiting sooner than may be comfortable for many."

Peugeot, Porsche

Peugeot rose 1.5 percent to 22.02 euros, leading a gauge of auto shares to the biggest gain among 19 industry groups in the Stoxx 600. The carmaker has lifted its 2010 sales target for the DS3 model to 70,000 from 45,000, La Lettre de L'Expansion reported, without citing anyone.

Preferred shares of Porsche SE, the maker of the 911 sports car, climbed 1.9 percent to 36.72 euros as the stock was upgraded to "buy" from "sell" at Bankhaus Metzler.

Premier Oil surged 7.1 percent to 1,266 pence, the most in more than a year. The U.K. explorer said the Catcher East sidetrack well in the U.K. Central North Sea encountered "excellent quality" oil-bearing sandstones.

H&M dropped 2.8 percent to 214.3 kronor. The Persson family, which holds 37 percent of the shares and 70 percent of the voting rights, considers H&M a "long-term investment," Persson, the grandchild of the Swedish founder, told La Tribune.

Standard Chartered Plc fell 3.2 percent to 1,687 pence as the British bank that earns most of its profit in Asia said the European sovereign-debt crisis caused a "softening" of first- half revenue.

Infineon, Vallourec

Infineon Technologies AG advanced 2.3 percent to 5.07 euros. German Chancellor Angela Merkel has agreed to help Russia's AFK Sistema negotiate with Infineon about purchasing a stake in the German semiconductor maker, Financial Times Deutschland reported. Infineon and Sistema are not in talks on a stake purchase, spokesmen at the two companies said.

Vallourec SA, which produces steel pipes for the oil and gas industry, rose 2.4 percent to 147.95 euros. The company has seen a rebound in volumes after a low point reached in the first quarter, Chairman Philippe Crouzet told La Tribune in an interview. Vallourec is benefiting from a recovery in the U.S., Brazil and Asia, while the economy in Europe is "less good," Crouzet told the newspaper.

Banco Popolare SC jumped 2.2 percent to 4.67 euros. The stock was rated "buy" at Societe Generale SA, which initiated coverage of Italy's fourth-biggest bank and set a price estimate of 5.90 euros.

"Banco Popolare is a restructuring story, with significant upside potential," Paris-based analyst Carlo Tommaselli wrote in a note today.

Bwin Interactive Entertainment AG climbed 2.3 percent to 36.71 euros. The Austrian online betting company denied a report that merger talks with PartyGaming Plc have collapsed.

"Bwin is currently holding talks with several potential partners in the online gaming sector on possible co-operation and/or acquisitions," the company said.

 

Consumer Spending in US Increased in May more than Forecast

 

 

Consumer spending in the U.S. rose 0.2 percent in May, more than forecast, a sign households are gaining confidence in the recovery and the job market. Personal income climbed 0.4 percent. Bloomberg's Betty Liu and Mike McKee report. (Source: Bloomberg)

Consumer spending in the U.S. rose in May more than forecast, a sign households are gaining confidence in the recovery and the job market.

Purchases rose 0.2 percent after little change the prior month, Commerce Department figures showed today. Incomes climbed 0.4 and the savings rate increased to the highest level in eight months.

Demand may accelerate as gains in payrolls, longer workweeks and rising pay give Americans the means to spend. Federal Reserve policy makers last week pledged to keep interest rates low to ensure households weather the fallout from the European debt crisis, unemployment hovering near a 26-year high and tight credit.

"The U.S. consumer remains resilient," said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto, which correctly forecast the gain in spending. "As long as jobs are coming back people will continue to spend."

Stock-index futures dropped, erasing earlier gains. The contract on the Standard & Poor's 500 Index fell 0.1 percent to 1,073.5 at 8:50 a.m. in New York. Treasury securities rose, pushing the yield on the benchmark 10-year note down to 3.06 percent from 3.11 percent late on June 25.

The median estimate of 61 economists surveyed by Bloomberg news called for a 0.1 percent gain in spending. Projections ranged from an increase of 0.3 percent to a 0.5 percent drop.

 

Survey Forecasts

The median estimate of economists surveyed called for a 0.5 percent advance in incomes. Wages and salaries in May rose 0.5 percent for a second month.

The savings rate increased to 4 percent last month, the highest level since September, to $454.3 billion.

"Americans will remain focused on paying down their debts and rebuilding their savings," said BMO's Guatieri.

The report showed inflation was stabilizing. The inflation gauge tied to spending patterns increased 1.9 percent from May 2009 after a 2 percent increase in the 12 months through April.

The Fed's preferred price measure, which excludes food and fuel, rose 0.2 percent in May from the prior month, exceeding the 0.1 percent median estimate of economists surveyed.

The Fed last week said the labor market is "improving gradually," changing April's assessment that it was "beginning to improve." Consumer spending still "remains constrained" by joblessness and "tight credit," it said.

 

Durable Goods

Adjusted for inflation, purchases rose 0.3 percent last month after little change in April. Price-adjusted spending on durable goods, including automobiles and appliances, increased 1.1 percent after a 0.5 percent drop. Demand for nondurable goods decreased 0.2 percent, the first decline this year, while spending on services increased 0.3 percent.

"Consumers are less cautious than they were previously," Robert Niblock, chief executive officer at Lowe's Cos., the second-largest home-improvement chain, said in a June 23 teleconference. "But they still know that we're still not out of the woods yet."

Confidence among U.S. consumers rose in June to the highest level since January 2008, indicating the decline in stock prices prompted by the European debt crisis has failed to weigh on sentiment, figures from Thomson Reuters/University of Michigan showed last week. The group's final sentiment index increased to 76 from 73.6 in May. The index has averaged 84.5 over the past decade.

Consumer spending grew at a 3 percent annual pace in the first three months of 2010, less than previously estimated, the Commerce Department said last week. The report showed the economy grew 2.7 percent in the first quarter.

Economists surveyed this month projected purchases will expand at a 3 percent rate in the April-to-June period and 2.6 percent in the second half of the year.

Courtesy : Bloomberg

Cheers! Red wine could help prevent some eye diseases

 

Here's another reason why red wine could be good for you - it contains an ingredient that has the potential to prevent some blinding diseases, according to a new study.

 

Researchers at Washington University School of Medicine in St. Louis found that Resveratrol - found in red wine, grapes, blueberries, peanuts and other plants - could prevent and control angeogenesis (formation of damaging blood vessels) in mouse retina.

"A great deal of research has identified resveratrol as an anti-aging compound, and given our interest in age-related eye disease, we wanted to find out whether there was a link," says Washington University retina specialist Rajendra S Apte, the study's senior investigator.

"We have identified a novel pathway that could become a new target for therapies.

"And we believe the pathway may be involved both in age-related eye disease and in other diseases where angiogenesis plays a destructive role," Apte adds

Another advantage is that patients can consume Resveratrol orally and avoid eye injections, but they may need to take pills since it is required in high doses in humans, as compared to mice. The compound also is easily absorbed in the body.

Apte says that the compound may well be one day actively used to prevent cardiovascular disease and some types of cancer, too.

The findings are reported in the July issue of the American Journal of Pathology.

Michael Jackson's dad sues doctor over singer's death

 

The father of Michael Jackson filed a wrongful death lawsuit on Friday against Dr Conrad Murray, accusing the physician of giving the late pop star a powerful drug and being slow to call for medical help.

 

The lawsuit, which had been expected, was filed on the first anniversary of Jackson's death, just beating a one-year deadline for an action against the 'Thriller' singer's doctor.

Joseph Jackson, 80, alleges in the suit filed in federal court in Los Angeles that Murray was too slow to call emergency medical services for help, and he later made statements to authorities which turned out to be false, including that Murray was by Jackson's side monitoring his pulse.

The lawsuit states that after paramedics arrived at the Los Angeles mansion where Jackson suffered cardiac arrest, Murray failed to inform them the singer had been given the powerful anesthetic propofol, which he used as a sleep aid.

The suit claims that Murray later changed his story about what happened, and said that he only discovered Jackson was not breathing less than 20 minutes before paramedics were called.

"Defendant Murray's conduct of failing to call (emergency services), of leaving Michael Jackson's bedside, and conducting CPR on the bed instead of a hard surface was below the standard of medical care for physicians," the lawsuit states.

Authorities have ruled Jackson's death a homicide and said propofol was the key drug in Jackson's system that led to his death at age 50 on June 25, 2009, in Los Angeles.

Medical experts have said propofol should be administered in a hospital setting, and that it was highly unusual for Murray to give it to Jackson at his home.

In a statement, Murray's lawyer said, "We continue to maintain Dr Murray neither prescribed or administered anything that should have killed Michael Jackson...Dr Murray has not been found guilty of anything and we believe his innocence will be proven in a court of law."

Jackson's "polypharmacy"
But in his lawsuit, Joe Jackson contends Murray was "reckless" in administering a "polypharmacy" of different drugs to Jackson, "including propofol every night as a sleep aid."

It claims the singer was addicted to prescription drugs, and that Murray had a history of prescribing such drugs to Jackson dating to at least 2008.

California authorities have charged Murray with involuntary manslaughter in connection with Jackson's death and he faces up to four years in prison if convicted.

With that case ongoing, a state judge earlier this month allowed Murray to keep his California medical licence.

A civil lawsuit can run parallel to a criminal case, and its main purpose is to seek monetary damages.

The lawsuit, which was filed on behalf of Joe Jackson by attorney Brian Oxman, does not specify an amount of monetary damages that the pop star's father is seeking.

At the time of his death, Jackson was in the middle of rehearsals for a series of comeback concerts in London organized by AEG Live, a subsidiary of the Anschutz Company.

Joseph Jackson's lawsuit does not name AEG as a defendant, but the company has admitted hiring Murray to care for Jackson as he prepared for the concerts.

The lawsuit states that Joe Jackson "believes there are other parties responsible for Michael Jackson's death" and that he could amend his complaint to include those other parties.

The suit also named Joe Jackson's wife, Katherine Jackson, as a nominal party, but Adam Streisand, attorney for Katherine Jackson, said the move was highly unusual and unwelcome.

"The impression that Brian Oxman creates by doing this is that somehow Mrs Jackson...(is) a part of this action against Conrad Murray, and nothing could be further from the truth," Streisand said.

 

UK police probing alleged Google privacy breach

Britain has launched an investigation into whether Google invaded people's privacy and violated communication and privacy laws by 'mistakenly' gathering personal data over public wi-fi networks.

The Metropolitan Police has said it was probing into complaints that the search engine picked up people's online activities through unprotected home and business networks while photographing neighbourhoods for its 'street view' mapping feature.

"The matter is now under consideration. It is yet to be determined what, if any, offences may have allegedly occurred," a spokesman of Met Police said.

It is the latest in a string of controversies about Google's access to private data including e-mail addresses, passwords, bank account information and web browsing histories.

Last month, Google acknowledged it had mistakenly collected data from public wi-fi networks in more than 30 countries.

Police in Australia have also launched their own investigations into the matter.

Pakistan court orders ban on Google, Yahoo, Hotmail

A Pakistani court has reportedly ordered a ban on nine leading websites, including Google, Yahoo and Hotmail, for allegedly posting blasphemous material.

Media reports said the Bahawalpur bench of the Lahore high court on Tuesday directed the Pakistan Telecommunication Authority to immediately block nine websites -- including Google, Yahoo, MSN, Hotmail, YouTube, Bing and Amazon -- for publishing and promoting sacrilegious and blasphemous material.

Justice Mazher Iqbal Sidhu issued the order while hearing a petition filed by a man named Muhammad Sidiq who claimed these websites were publishing sacrilegious material.

The judge also ordered the PTA chairman to appear in court on June 28 with relevant material.

Sidiq, in his petition, sought a ban on the websites for publishing blasphemous materials and twisting facts about the Quran.

Aslam Dhakkar, head of a local bar association, was quoted as saying that the court had given a historic decision.

He said the legal fraternity in Bahawalpur will observe a strike on Wednesday to protest the publication of blasphemous material by the websites.

However, officials of the PTA told PTI that they had received no instructions to block the websites.

They said they had only seen media reports about the court's order.

Wahaj-us-Siraj, a spokesman for the Internet Service Providers Association of Pakistan, said his organisation had not received any directions from the PTA to block websites.

Pakistani authorities had blocked popular social networking website Facebook in May over a competition on blasphemous caricatures of Prophet Mohammed.

The access to the website was later restored on the orders of the court.