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Is The Dream Run Over?

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A US government directive has come as a big setback for Boeing’s dreams. Following an order from the US Federal Aviation Authority last week, airlines across the globe, including Air India, have grounded almost all of Boeing’s flagship 787 Dreamliner planes citing safety concerns. The US order was said to be a temporary measure to carry out certain checks. But the move seems to have hit the credibility of the aircraft. European regulators have also asked airlines to ground the Dreamliners. Of late, a few Dreamliners have reported fuel leaks, cracks in cockpit windows, brake problems and electrical fires, triggering safety concerns. But Boeing said the planes, in service since October 2011, were safe. In India, airline watchdog Directorate General of Civil Aviation has asked Air India to ground its fleet of six Dreamliners and close bookings for the flights for now.
 
Plea For Relief 
India Inc. has urged the Centre to keep tax rates low in Budget 2013-14 to give investments a push. “There should be no new taxes. We want to make sure the investment cycle returns,” said Ficci president Naina Lal Kidwai after meeting the finance minister. CII president Adi Godrej said, “Inheritance (tax) would create a negative sentiment. No country has it.” 
NO NEW TAXES: Ficci head Naina Lal Kidwai
(Tribhuvan Sharma)


Watch Your Step
In its financial system stability assessment for India, the IMF has warned against giving licences to entities to open commercial banks as the associated risk can outweigh the benefits of creating more banks.
 
In Poor Health 
The last two months saw growth in sales revenues of pharma firms fall to a two-year low of 4-5 per cent. Data from the All India Organisation of Chemists and Druggists shows it was primarily due to little or no growth in key segments such as anti-infectives and respiratory drugs. 
 
Not Interested
Qatar Airways has said it is not interested in buying a stake in SpiceJet or any other Indian airline. “This is pure speculation by those who want to spread such unfounded rumours to raise the stock value,” said CEO Akbar al Baker.
 
Buyback Time
UK’s GlaxoSmithKline has got the nod from Sebi to buy back shares in its Indian arm from the public. The company wants to increase its stake in GSK Consumer Healthcare to 75 per cent from 43.2 per cent. 
 
Gloomy On Growth
The World Bank says global economic growth will slow down further. It has projected that the world economy will grow 2.4 per cent, down from a June forecast of 3 per cent, after growing 2.3 per cent in 2012. 
 
Steeling A March
Domestic steel demand is likely to grow 6.7 per cent annually till 2016-17, faster than the expected growth in Chinese demand, says a report by Care Research. Domestic steel capacity grew 8 per cent between 2004-05 and 2011-12.
 
Mega Opportunity 
The ongoing Kumbh Mela this year may be the subject of a Harvard University study, which will look at the logistics
CASE STUDY: The Kumbh Mela
(AP)
of the mega gathering. The event is expected to generate Rs 12,000 crore for Uttar Pradesh. In addition, FMCG companies are expected to do business of Rs 1,500 crore in two months’ time. 
 
In Deep Trouble
Mining giant Rio Tinto announced a $14 billion writedown related to its Mozambique coal assets and ailing aluminium business, prompting its CEO to resign. Rio said it expected non-cash impairments of about $3 billion for the coal project.

(This story was published in Businessworld Issue Dated 28-01-2013)