What A Headache!

The budget is just about four weeks away and when finance minister Pranab Mukherjee says he is "losing sleep" over rising subsidies, you know what that signals. Subsidies may cross the budget estimate of Rs 1.4 lakh crore by a gargantuan Rs 1 lakh crore in 2011-12. The rise is mainly due to higher outlay towards fertiliser, food and oil. Given that revenue collections have been growing only moderately and receipts from disinvestment have not gathered pace, Mukherjee will have a tough balancing act for the budget. Populist subsidies are one area where the government can act tough so that it can have a manageable fiscal deficit, which is likely to be 5.6 per cent of the GDP, against the planned 4.7 per cent. If the government decides to trim subsidies, it will face a political backlash. And that will not be easy. So, can Mukherjee walk the talk?

TOO HEAVY: Tata Steel posts Rs 603 crore net loss for the December quarter

Surprise Loss
Tata Steel, the world's eighth-largest and India's biggest steel maker, posted a net loss of Rs 603 crore ($123 million) for the December quarter. The fall owes to high raw materials costs and a weak performance by the firm's European arm. During the same period last fiscal, Tata Steel had posted a net profit of Rs 1,003 crore. Sales, though, rose 15 per cent to Rs 32,964 crore  in the December quarter.

Taxman's Woes
The direct tax collection, which includes personal income and corporate taxes, has seen 9.8 per cent growth during the current fiscal. But that is way behind the government's target of 19 per cent. Direct taxes rose to Rs 3.46 lakh crore during April-January, against the government target of Rs 5.32 lakh crore for the full year, which is unlikely to be met now.

10 Million Marutis
India's largest carmaker Maruti Suzuki has crossed the milestone of 10 million units in cumulative sales in the country since it started selling cars 29 years ago. The company crossed the 5-million mark in 2006.

Still Lacks Steam
India's merchandise exports continued to post a meagre growth with shipments in January 2012 rising just 10.1 per cent year-on-year to $25.4 billion. The lull is due to poor demand from Europe. That said, this is slightly better than the 3.87 per cent growth in November 2011 and 6.7 per cent in December 2011.

Call It Quits
Telecom tower major Viom Networks' chairman Subodh Bhargava has quit. He cites his "discomfort about the speed at which the business was growing" as the reason. Given that auditor KPMG had submitted a report on the company four months ago, after graft charges by a former Viom official came up, this exit sets the stage for a boardroom battle.

China Takes On EU
China says its airlines will not pay European Union's (EU) carbon taxes. It says EU's decision to charge flights into and out of EU airports for carbon emission runs contrary to principles of the United Nations Framework Convention on Climate Change and the global civil aviation regulations. Given China's influence over the EU, the airlines may fly gamely to the region.

CUTTING: PepsiCo to cut 8,700 jobs to save $1.5 billion (Bloomberg)

Fire To Save
PepsiCo plans to cut 8,700 jobs globally as part of a plan to save an extra $1.5 billion over the next three years. The company says the money will help it invest more into brands.

A Big Loan
For the first time in nearly two decades, Indian Railways would take a loan — Rs 3,000 crore — from the Centre. At an interest rate of 8.5 per cent, the loan is expected to be repaid in about three years.

In Full Bloom
India's Rs 3,700-crore floriculture industry is likely to cross Rs 8,000 crore by 2015, says industry body Assocham. The industry is growing at a compound annual growth rate of about 30 per cent.

(This story was published in Businessworld Issue Dated 20-02-2012)