ECR Assignment Ramya R PGDMB12/111 September 14, 2012 India's exports down ~15%; Trade gap widens India's

;s merchandise exports fell by nearly 15% at US$22.4bn in July while imports were down 7.6% at US$37.9bn, data released by the Government. The trade gap for the month under review stood at US$15.5bn versus US$10.30bn in the preceding month. The trade deficit in the year-ago period was at US$14.72bn in July 2011. Oil imports during July were down 5.5% at US$12.23bn while non-oil imports dropped 8.6% to US$25.7bn.The trade deficit for April-July 2012-13 is estimated at US$55.55bn versus US$60.95bn during April-July 2011-12.Exports during July were up 6.5% in the Rupee terms while imports jumped by 15.4% in the local currency terms. Exports during the first four months of FY13 were down 5% at US$97.65bn while imports fell 6.5% to US$153.19bn.Exports during April-July were up 15.8% in the Rupee terms while imports jumped by 14% in the local currency terms. Oil imports during April-July 2012-13 were up 2.7% at US$53.81bn while non-oil imports during the same period were down by 11% at US$99.38bn. FM confident of achieving FY13 direct tax collection target of Rs.5.7tn India will achieve its direct tax collection target of rs.5.7tn for the year ending March, reports said citing finance minister P Chidambaram. The country also aims to increase tax to GDP ratio to 12%, the fm said adding that India was a low-tax country. IIP, core sector growth cools in FY12 and April-June Annual targets for Index for Industrial Production (IIP) are not fixed by the Government. The sectoral annual growth rates of IIP for the last three years i.e. 2009-10 to 2011-12 and April-June, 2012-13, released by the Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation, are given respectively in Table -1 below. Annual growth rates of IIP (in per cent) Year Mining Manufacturing Electricity Overall 2009-10 7.9 4.8 6.1 5.3 2010-11 5.2 9.0 5.5 8.2 2011-12 -2.0 3.0 8.2 2.9 April-June 2012-13 -1.1 -0.7 6.4 -0.1 The index or growth rates for the infrastructure sector are not compiled by the Government. However the Department of Industrial Policy and Promotion, Ministry of Commerce and Industry releases monthly as well as Annual indices and growth rates of the Eight Core Industries i.e. Coal, Crude Oil, Natural Gas, Petroleum Refinery Products, Fertilizers, Steel, Cement and Electricity. The combined annual growth rates of the above industries during 2009-10 to 2011-12 and during April-June, 2012-13 are given in the Annual growth rates of Eight Core Industries (in per cent) April-June, Sector Weight 2009-10 2010-11 2011-12 2012-13 Coal 4.38 8.1 -0.2 1.2 6.4 Crude Oil 5.22 0.5 11.9 1.0 -0.5 Natural Gas 1.71 44.6 10.0 -8.9 -11.1 Refinery Products 5.94 -0.4 3.0 3.2 3.2 Fertilizers 1.25 12.7 0.0 0.4 -12.2 Steel 6.68 6.0 13.2 7.0 3.6 Cement 2.41 10.5 4.5 6.7 9.9

ECR Assignment Ramya R PGDMB12/111 September 14, 2012 Electricity 10.32 6.2 5.6 8.1 6.4 Overall 37.90 6.6 6.6 4.4 3.6 weight/growth rate Note: Figures for April, May and June 2012 are provisional. Banks need Rs. 5 tln extra capital for Basel III: RBI Duvvuri Subbarao, RBI Governor said that banks need an additional capital of 5 trillion rupees to comply with the Basel III regulations.The government needs to infuse 900 billion rupees into state-run banks to maintain majority share holding under the Basel III, Subbarao added. South Korea cuts Q2 GDP growth...Fuels rate cut view South Koreas economy expanded at a lower-than-estimated pace in the second quarter, stoking speculation of another interest-rate cut from the country's central bank. Gross Domestic Product (GDP) in the April-June period grew by 0.3% from the previous quarter, compared with a July estimate of 0.4%, the Bank of Korea said in Seoul today. In the first quarter, the GDP expansion was at 0.9%. South Koreas economy expanded by 2.3% from a year earlier, less than the earlier estimate of 2.4% ECB unveils new bond-buying plan to calm debt markets. The Governing Council of the European Central Bank (ECB) has on Thursday taken decisions on a number of technical features regarding the Eurosystems outright transactions in secondary sovereign bond markets that aim at safeguarding an appropriate monetary policy transmission and the singleness of the monetary policy. China's industrial output growth hits 3-yr low China's industrial output grew at the slowest pace in three years, prompting President Hu Jintao to say that economic expansion faces notable downward pressure, raising hope of further economic stimulus. On Sunday, China reported that consumer prices rose 2% from the year-ago period, edging slightly higher from 1.8% in July, due to an increase in vegetable prices that tend to be volatile. The producer price index (PPI), which reflects wholesale prices, accelerated its decline, dropping a sharper-than-expected 3.5% from August 2011. Industrial output rose by 8.9% - the slowest pace of increase in 39 months - while August retail sales climbed 13.2% from the year-ago period. South Korea unveils US$5bn economic stimulus South Korea announced a five-billion-dollar economic stimulus package to support Asia's fourth-largest economy amid a worldwide economic slowdown. The 5.9-trillion-won (US$5.23 billion) package - 4.6 trillion won of stimulus support for the remainder of this year and 1.3 trillion won for next year - doesn't require a new national budget. The stimulus will be in the form of reduced taxes on individual incomes and on purchases of homes or cars, and expanding state-funded social welfare programs. The new plan follows a stimulus package of 8.5 trillion won announced in June to boost the economy for the second half of 2012. The combined stimulus of 13.1 trillion won for this year equates to 1% of the country's GDP. In June, the South Korean finance ministry cut its GDP growth forecast for 2012 to 3.3% from its earlier projection of 3.7%. Many analysts expect GDP growth in a mid-2% range.