Industrial Production shrank for second straight month in December 2012 - Trans Scan Securities

December industrial production unexpectedly shrank for a second straight month in December, weighed down by weak investment and consumer demand, casting doubt on Finance Minister P Chidambaram's view that Asia's-third largest economy is showing signs of recovery. The index of industrial production (IIP) fell 0.6% annually in December, data released by the Central Statistics Office showed on Tuesday. A Reuters poll of 24 economists had expected growth of 1.1%, after output shrank 0.8% in November. Manufacturing output, which accounts for the bulk of industrial production and contributes about 15% to overall gross domestic product (GDP), fell 0.7% in December from a year earlier.

Rising for the fourth consecutive month, retail inflation remained in double digits at 10.79% in January, driven by higher prices of vegetables, edible oil, cereals and protein-based items. Rising for the fourth consecutive month, retail inflation remained in double digits at 10.79% in January, driven by higher prices of vegetables, edible oil, cereals and protein-based items. The retail inflation had stood at 10.56% in December, 9.90% in November and 9.75% in October, 2012.

Some of the top Indian firms that made acquisitions abroad by setting up special purpose vehicles (SPVs) are at the receiving end of the income-tax department's latest move. The department has been arguing that corporate guarantees, or even interest-free loans given by them to their subsidiaries abroad should attract tax, since they have "earned" fees for the financial facilities. Calling it an "M&A tax", which has made their acquisitions costlier and all calculations on return on capital employed (ROCE) go haywire, CFOs of these companies say they will appeal against the tax department's "adjustments" before the appellate authority.

Source : Equity Bulls

Keywords