Slow DownBreak Down

Dr. Kirit SomaiyaChartered Accountant, Ph.D

Member BJP National Executive, Vice-President BJP Maharashtra

SLOW DOWN OR BREAK DOWN?

Indian history is witnessing steep downslide in all segments of the economy. The vast investment in basic, core sector, infrastructure, housing sector in early 21st century gave momentum to the Indian economy. 8.5% growth since 2003. The jubilant Economy suddenly seems to have burst.

•Bubble created in the Economy during 2007 & 2008

•Bubble has burst

•Industry facing turmoil

•Sensex disaster

•Prices of 17 essential commodities doubled in 4 years

•Closures, slow down in industries

•Chaos in job market

resulting in

LOSS OF ONE CRORE JOBS & SUFFERING OF COMMON MAN

DISASTER SYMPTOMS

• Financial services segment witnessed steep downfall

• Real estate – lost estate

• Large retailers/malls closing down speedily

• Half of small scale industries of industrial townships facing closure

• Several Large Industries have declared Closure /Partial

Closure e.g.:

• Tata Motors • Thyseeankurup Industries

• Ford Motors • Tata Yazaki

• Kirloskar Brothers • Bosch

• Bharat Forge • Bajaj Auto

DOWN…INCOME TAX COLLECTIONS

• Direct Tax receipt down by 13.4% in Dec 2008.

• Direct Tax collection down to Rs.52,749 Cr in Dec 2008 against Rs.60,976 Cr of

December 2007

• Central Board of Direct Taxes Chairman stated “Direct Tax collection shall be short by Rs

1 Lac Crores in 2008/09

• The tax collection will be less than Rs.3 lac crore against the target of Rs.3 lac 95

thousand crores

SLOWDOWN BLUES: TAXES COLLECTION DOWN

BE FY 08Actuals till Dec.

% of Actualsto BE FY 09

% of Actualsto BE FY 08

Excise duty 10671 9017 75485 77108 -15.5

Customs duty 8175 7399 74455 82741 -9.5

Service tax 4414 4254 31420 39416 -3.6

Total 23260 20670 181360 199265 -11.1

Tax Times

FISCAL DEFICIT UP

BE FY 08Actuals till Dec.

% of Actualsto BE FY 09

% of Actualsto BE FY 08

Total receipts 6,17,597 3,78,954 61.40 74.90

Fiscal Deficit 1,33,287 2,18,262 163.80 51.40

Revenue deficit 55,184 1,73,830 315.50 54.90

• Revenue deficit was estimated at Rs.55,184 crores in the Budget of • 28.2.08. This has gone up by Rs.1,73,830 crores as on 31.12.08

FOREX RESERVE DIPS

• Forex reserve down by $4.5 billion to $247.6 billion

• Forex reserve had gone up to $315 billion

• The reserve was increasing since the year 2000

• Forex reserve is coming down consistently for more than 3 months

GOVT. EXPECTS JAN. EXPORTS TO FALL 22%

• December figures showed exports declining by 1.1% to $12.69 billion against 21%

growth in December 2007. Exports had shrunk 12.1% in October 2008 and 10% in

November 2008

• Exports have dipped for the first time in 7 years

• Trends of overseas shipments taking a plunge in January due to slump in demand

for Indian goods in the global market

• India may achieve $170 billion exports in the current fiscal against the target of

$200 billion

% growth in December 2007 ($) % growth in December 2008 ($)

Exports 20.85 - 1.1

Imports 24.26 8.8

FUNDS FLOW TO INDIA SHRINKS Rs.94,000 CRORE

2007-08 ($bn) 2008-09 ($bn)

Credit by commercial banks (A) 50 63.7

Flow from other major sources (B) 68.4 41.6

Public issues by non-financial entities 8.6 2.9

Gross private placements by non-finance entities 8.6 2.9

ECB 15.7 12.6

Short-term credit from abroad 10.4 8.3

FDI 4.8 3.8

Total (A+B) 124.5 105.2• External commercial borrowing (ECB) and short-term credit from abroad

contributed 8.2% in 2008-09 of the financing against 20% in 2007-08• While credit to the agriculture & service sectors have remained largely unchanged,

personal loans have declined due to falling housing loans

TAX COLLECTIONS - DOWN

• Since Diwali, States & Union Govt. experiencing steep downfall in tax collections.

• Maharashtra Tax Collections down in Nov & Dec 2008.

VAT (Maharashtra) down in last 2 months 33%

Octroi, consumption down in 2 months 40%

Stamp duty collection down in last few months 80%

Vehicle tax collection down in 2 months 30%

VAT SLOWDOWN – MAHARASHTRA

• VAT means actual use – consumption

• Oct. 2008 -3197

• Nov. 2008 – 2809

• Dec. 2008 – 2474

• Jan. 2009 – 2274

• Stamp Duty Collection down by 25-30%

by Rs.1200 Crore

INCOME FROM VAT MAHARASHTRA(ALL FIGURES IN RS. CR.)

Actual Collection Target

Aug 2008 2664.12 2247.81

Sept 2008 2413.54 2561.05

Oct 2008 3190.36 2736.19

Nov 2008 2804.59 3004.33

Dec 2008 2474 3200

Jan 2009 2274 3400

VEHICLE TAX

Actual Collection Target

Upto Dec 2008 1621.79 1735.00

REVENUE COLLECTION-MAHARASHTRA

STAMP DUTY (upto Dec 2008)FIGURES IN RS. CR.)

Actual Collection Target

2007-2008 8500.00 7200.00

2008-2009 6448.00 9600.00

Against the target of 7200 Cr. In 2007-08, income was 8500 Cr. However, in 2008-09

against the target of 9600 Cr. upto Dec 08, Rs 6448 Cr have been collected

DROP IN OCTROI (CONSUMPTION)

Dec. 2008 in comparison with Dec. 2007• Mumbai 19.16%• Pune 20.22%• Pimpri-Chinchwad 32.06%• Nasik 10.57%

OCTROI COLLECTION – PIMPRI-CHINCHWAD (PUNE)

• COLLECTION Rs. Crores

• September 2008 58.00

• October 2008 94.00

• December 2008 44.20

COMMERCIAL VEHICLE-TRUCK SALES DOWN BY 73% IN DECEMBER 2008

Categorya Sales in Dec 07

Sales in Dec 08 % change

Light Commercial Vehicle (LCV) (5-7.5 tn) 3294 1586 - 51.8

Intermediate Commercial Vehicle (ICV) (8.12 tn) 3414 1053 - 69.2

Medium Commercial Vehicle (MCV) (15-16.2 tn) 5794* 1635* - 71.8

Multi-Axle Vehicle (MAV) (25.2-31 tn) 9587* 2033* - 78.8

Multi-Axle Trailer/Vehicle (MAT) (30-49 tn) 2143 114 - 94.7

Gross Total 24222 6221 - 73.5

• MCV and MCV include tipper truck sales

MELTDOWN SIGNS REGISTER ON THE ROAD

• In a sign that the economic meltdown has hurt the automobile industry, Regional Transport Offices across Mumbai reported a big drop in registration of vehicles in the last few months.

MUMBAI 2008 2007

Wadala 14,240 20,160

Tardeo 17,262 26,108

Andheri 38,870 40,181

Total 70,372 86,449

ELSEWHERE 2008 2007

Thane 58,013 64,367

Navi Mumbai 17,482 20,183

Kalyan 19,213 18,609

SALES – DISASTER ? COMPARISON OF COMPANIES SALES

• Bajaj Auto Ltd. – Sales down to Rs.7.90 Cr in Sept. 2008 from Rs.57.39 Cr in Sept 2007

• D S Kulkarni Developers Ltd. – down to Rs.-26.64 Cr in Jun 08 from Rs.122.10 Cr in

Mar 08

• Idea Cellular Ltd. – down to Rs.47.05 Cr in Sept 08 from Rs.147.34 Cr in June 07

• D F L Finance Ltd. – down to Rs.7.88 Cr in Sept 08 from Rs.98.31 Cr in Sept 07

DOWN, DOWN – LARGE RETAILER

• Large Retailers, Malls found empty. 40% Closed e.g. Suvidha 40% Stores closed down in

Mumbai

• December 2008 sharp fall in Sales

Dec. 2007(Rs. Cr)

Dec. 2008(Rs.Cr)

% change

Value 345.67 333.37 - 3.56

Lifestyle 147.49 126.88 -13.97

Home 38.25 34.43 -10.00

• “These are unpredictable times, we are also surprised. Our January sales will be in

double digits” – Kishore Biyani – Managing Director, Pantaloon Retail

SUBHIKSHA – LARGE RETAILER CLOSING DOWN PART OPERATION

• Subhiksha has chain of 1600 stores

• Turnover in 2008 – Rs.2305 crores

• Total staff employed – 15,000

• 6500 stores closed down

• Due to lack of funds, may closed down half of its chain of stores

• Unable to pay rental and salaries of employees

CAPITAL MARKET

• 25% Stocks / Shares on NSE & BSE found illquid in Dec. 2008

• 9th January BSE Sensex touched 21000. Finance Minister immediately came on TV &

stated “Its my economic policies. India will not look back. We are now in double digit

Growth”.

• Bull run in an Open Economy - Capital Market may be accepted but conversion of it

into Bubble is dangerous. Bubble is to Burst, we are observing the same now. 2009

could be the worst year India has seen in decades.

SMALL INVESTORS RUBBED

• Bubble was created in Capital Market in 2007-08

• Sensex was manipulated upto 21000 from 15000

• Promoters (bogus intention) sold their stakes at higher

rates

• Promoters pledged their stakes at higher value with

banks and financial institutions and borrowed heavily

• Satyam Promoters’ stake has come down to 4% as on

7.1.2009

3 CRORE SMALL INVESTORS LOOTED

• Congress Govt. – Mr. Chidambaram pushed creation of Bubble in Share Bazar –

Capital Market

• Sensex was 21000 – Jan 2008

• Sensex now 9000 – Jan 2009

• Small Investors of Share Bazar, Mutual Fund, ULIP lost their savings

• 1 Crore Small Investor-Demat Accounts holders & 2 Crores Small Investors of

Mutual Funds, Unit Link Insurance Policy lost heavily.

• Rs.10000 Invested in year 2007 has become Rs.4900 now

DIWALI OR DIWALA

• Since Diwali (Muhurt) 2002 Sensex gone up till Diwali of 2007. At the end of Samvat

year on Diwali 2008 Sensex lost 55%, loss of Rs.35,94,012 Crore of Market Capital

Diwali Day Sensex close % change BSE mkt cap (Rs. Cr) Change

Oct 28,2008 8,510 -55 2,651,933 -3,594,012

Nov. 9, 2007 19,059 50 6,245,945 2,984,939

Oct. 21, 2006 12,709 61 3,261,006 1,208,448

Nov. 1, 2005 7,892 33 2,052,561 899,642

Nov. 12, 2004 5,954 25 1,452,919 501,102

Oct. 28, 2003 4,757 61 951,817 412,557

SMALL INVESTOR – MUTUAL FUND DISASTER

Largest Mutual Fund Companies Loss in 2008

• Franklin Templeton Mutual Fund - - 37.85%

• ICICI Prudential Mutual Fund - - 26.13%

• UTI Mutual Fund - - 19.30%

• Baroda Pioneer Mutual Fund - - 63.51%

• Sahara Mutual Fund - - 28.07%

• Taurus Mutual Fund - - 47.21%

TOP 10 PERFORMANCE

SCHEME RETURNS*(IN%)

UTI MNC -32.34

Birla Sun Life Asset Allocation -32.51

Birla Sun Life Dividend Yield -33.27

UTIDivident Yield -34.08

IDFC Imperial Equity -35.21

FT India Life State FoF -36.77

UTI Contra -37.11

DSPBR Top 100 Equity Inst. -37.21

Sahara Growth -37.48

DSPBR Top 100 Equity Reg -37.67

Source : Value research;*1 year

MUTUAL FUNDS GET POORER BY RS. 1,50,000 CRORE

• In 2008 Mutual funds became poorer by about Rs 1,50,000 crore, or about one-third

of their total size.

• The mutual fund industry in India, with nearly 36 members, was regarded as a safe

avenue of mutual gains for investors till 2007 — when their total wealth grew by more

than Rs 2,30,000 crore to Rs 5,50,000 crore.

• However, in 2008, lost Rs 1,50,000 crore, bringing its asset size to nearly Rs 4,00,000

crore.

90% IPOS TRADE BELOW ISSUE PRICE

• 38 of 42 initial public offers (IPOs) that were listed since January 2008 trading below

their issue price.

• Mumbai-based engineering and construction company Niraj Cement Structural's is the

worst performer. The stock at Rs 17.80 on the BSE, down 90.6 per cent from the issue

price of Rs 190.

• For the remaining 37 firms, 2008 has been no different. Stock of companies —

Chemcal Biotech, First Winner Industries, Tulsi Extrusions, — are down over 80 per

cent from their issue prices.

ULIP (LIC) – VALUE DEPRECIATED TO 50% IN ONE YEAR

Plan Premium

Investment

1 year ago

(in Rs.)

Value on

26.10.2008

(in Rs.)

Market Plus Annual 10000 5818

Money Plus Annual 10000 4743

Profit Plus Annual 10000 4920

Defaults threaten fixed maturity plansJoydeep Ghosh & Sidhartha K / Mumbai October 8, 2008, 0:22 IST – BUSINESS STANDARD

A senior executive in the industry claimed that around 10 to 15 per cent money of the total AAUM has been invested in real estate and NBFC papers. Over the last two years, the real estate sector was offering 1-2 per cent higher yield than the market, luring many fund managers to invest almost 60 to 70 per cent of their corpus in them.In fact, for the past eight to ten months, most fund managers have stayed away from these papers. Some like UTI Mutual Fund stopped investing in them since December 2007 and Kotak Mutual Fund even declared in the offer documents of some of their FMPs that they would not have any exposure to real estate and NBFCs.Another important development in the recent months has been that all fund houses have started declaring their FMP portfolios to investors. Earlier, only a few leading funds would do so.The threat of exit of large investors accentuates the problem for FMPs as there will be pressure or withdrawal. Also, little money will trickle in from fresh investors to counter the outflows

The mutual fund industry is under pressure and not just from falling markets. Fixed maturity plans (FMPs), which have garnered Rs 102,133 crore of average assets under management (AAUM), are facing the prospect of rising defaults on their investments in real estate and non-banking financial companies (NBFCs). This implies that if there are redemption pressures from their corporate and retail clients, these FMPs would have to raise cash from other resources to meet the demand.FMPs contribute almost 19 per cent to the Rs 5.29 lakh crore average assets of the industry. Though mutual funds have turned cautious about investing in these sectors since early 2008, the fear is that the money that has already been invested could be in for some trouble in terms of payment delays.Sources said some of the leading real estate companies have defaulted on their repayments and are seeking rollovers. And though there hasn’t been any huge redemption pressure, mutual funds are gearing up for it, especially from companies that have invested in the FMPs.

According to senior banking sources, a large fund recently had to borrow on the call money market at over 20 per cent to meet redemption pressures. Last month, a medium-sized fund faced redemption pressure on its FMP from high net worth individuals, when it was declared that the company was being taken over.“When investors are willing to even shell out 2 per cent as exit load to redeem, it becomes very difficult for us,” said a fund manager. Many others have resorted to rolling over schemes to avoid paying their clients.Mutual funds, on their part, said investor wealth is not at risk at the moment.

WHAT ARE FMPs?FMPs are funds in which investors park their funds for one to six months, sometimes for more than a year. These plans invest in corporate bonds, bank deposits and commercial papers. The longer tenure is offered to take advantage of double indexation benefits.This implies that if someone invests in an FMP for 13 months, say, between March 2008 and April 2009, his capital gains will get indexation benefit for 2007-2008 and 2009-2010. So his tax liability would go down substantially. That is why retail investors prefer to invest in the longer- term FMPs. The shorter-term ones cater to the needs of corporate clients. Market experts say retail investors contribute 20 to 30 per cent of the AAUM.

“There may be isolated instances but the overall system is sound,” said the head of a fund house.Though the industry has not seen any pressure from corporate clients as of now, the head of a financial conglomerate said there have been some withdrawals by companies in the last few weeks to meet their immediate liquidity needs. Over the last fortnight, the liquidity in the market has been tight as companies had to pay advance tax and there were large borrowings by cash-strapped oil and fertiliser companies. As a result, banks borrowed heavily from RBI and call rates touched 17 per cent.

TATA STEEL – STEEP DOWN

Quarter ending Total Revenue

(Rs.Cr.)

Profit

(Rs.Cr.)

30.6.08 6,177 1,488

30.9.08 7,089 1,787

31.12.08 4,735 466

• Revenue & profit of Tata Steel goes up and up till Diwali of 2008

• Steep down slide since Diwali 2008 may be observed

• Turnover and profit of Tata Steel for the Quarter ended 30th June 2008 was Rs.6,177 crores

and Rs.1,488 crores respectively.

• The same went up by 75% for the Quarter ended 30th Sept. 2008

• Steep downfall observed in 3 months ended 31st Dec. 2008. Profit down by 80%, turnover

down by 40%

TATA MOTORS DOWN DOWN

Quarter ending Total Revenue

(Rs.Cr.)

Profit

(Rs.Cr.)

30.12.07 7251.8 499.0

30.6.08 6928.4 326.1

30.9.08 7078.8 346.9

31.12.08 4758.6 - 263.2 (loss)

• Revenue of Tata Motors has come down to Rs.4758 crores in the Quarter ended

31.12.08 from the previous Quarter of Rs.7078 crores

• In just 3 months, the Profit of Rs.346 crores has turned into loss of Rs.263 crores

QUARTERLY RESULTS

Dec ’07 Mar ’08 Jun ’08 Sep ’08 Dec ’08

Sales Turnover

7,251.83 8,749.52 6,928.44 7,078.85 4,758.62

Other Income

91.81 234.34 315.61 429.28 99.51

Gross Profit 924.38 890.16 838.14 994.18 -49.08

Profit Before Tax

665.10 698.05 345.09 358.01 -419.15

Net Profit 499.05 536.27 326.11 346.99 -263.26

QUARTERLY RESULT OF 31.12.2008DOWN! DOWN! DOWN!

Company Down by

Videocon Industries 76%

M&M 93%

DLF 67%

Parsvnath 95%

Unitech 74%

• Experts feel these results also do not reflect the correct status of the company

• Window dressing is adopted to show less loss/downfall

• Sales to subsidiaries form bigger part of the above

FACTORY BANDH ! NAUKARI BANDH !!

EVERYWHERE SLOW DOWN – BREAK DOWN

Visited various towns in last 4 weeks –

• Pune

• Pimpri, Chinchwad

• Aurangabad

• Nasik

• Nagpur

• Thane Belapur Industrial Belt

• Mumbai

• Noida

• Hyderabad

DISASTER PIMPRI CHINCHWAD ( PUNE)

• Major 7 Co’s TATA MOTORS, M Forge…. closed / partial closed .

• The production reduced by 30%.

• 14000 Temporary workers have been removed.

• Small Scale Industrial Units.

• Production reduced by around 40%.

• Pune-Pimpari-Chinchawad 4500 workshops closed

down resulting into unemployment of 1 lac workers.

• Demat Account reduced by 30% turnover down by 67%.

NASHIK – SLOW DOWN

Mahindra & Mahindra-SCORPIO requirement reduced to 50% in December 2008

After Diwali total supply to MICO,M&M is reduced to 50%.

Small Scale down by 30 to 50%

An Inverter manufacture sale down to 50 units from 300 units p.m.

Transporter /Tempo Owners within MIDC area

From last month demand down from 2 ferries-trip a day to only one trip in two days

FINANCIAL SERVICE - NAGPUR

Brokers

• 5 branches closed

• 2 Terminals closed

• 80% Revenue down

THANE DISTRICT SLOWDOWN

• 35000 workers: contract/casual workers of large industries-automobile, construction,

bpo, call center, financial services etc laid off

• 65,000 workers in small industries, ancillary units lost jobs

• Many Industries-estates, Roads in Thane Belapur zones feels like Ghost Zones

• Transport, Tempos, Hire Car business loss by 50%

• Tax collections Excise, Octroi, Cess, Income Tax, Service Tax collection down to 50 %

• Industrial Estates in All Towns New Mumbai, Thane, Kalava, Dombivali, Vasai,

Ambernath, Tarapore feels heat

AURANGABAD SLOWDOWN

• 7,500 workers (contractor workers) laid off from following companies –

• Bajaj Auto

• Videocon

• Good Year

• 35000 small persons, casual /contract workers jobless

since Diwali

• Chhote udyojak HAIRAAN

• Tempowala, Rikshawala, Wadapawala, Chahawala,

Hathgadiwala… PARESHAN

SLOWDOWN IN GOA TOURISM

• Slowdown Goa. Down in Tourism

• 25 lac tourist in 2007/08

• 11 lac tourist only in 2008/09

• Chartered planes down to 247 planes in 2008 from 748 in 2007

• Domestic tourist (Indians) down to 9 lac in 2008 from 22 lac in 2007

NOIDA

• Automobile, BPO, Automobile ancillaries worst affected

• Large companies production down by 25% to 60%

• 40% of Small Scale units affected

• 1 lac casual contract, construction workers affected

• BPO sector facing

• Noida & Gurgaon heavily affected

• Construction work is at halt since Feb. 2008

HYDERABAD

• IT, KPO, BPO, Automobile, construction industry worst affected

• The above industries growing upward continuously since the year 2000/01

• 1 lac labour affected

• Large industries, particularly Automobile functioning at 50% level

• Small scale units production down by 40 to 50%

• Default started in loans repayment

STORIES OF SOME OF THOSE AFFECTED BY THE RECESSION IN THE JOB MARKET

• ASHOK JAISWAL, 30 Company: GlobalLogic Position: Software engineer Salary: Rs 18

lakh p.a. The week couldn’t have started on a worse note for Ashok Jaiswal, an

employee of the Noida-based Itcompany who was summoned by his employer only to

be told that he was among the 17 employees who were being “laid off”.

• AYUSH JAIN, 30 Company: Kotak Mahindra Position: Trainee (wealth management)

Salary: Rs 15,000 and above Family: Seven members. This business administration

graduate from University of Indiana, US, thought he was one of the luckiest guys to

have returned to India and clinched an offer from a leading bank. Not any longer. He

was told resign on October 31, with three others.“It was a rude shattering of a dream,”

says Ayush. “Buoyed by the increasing presence of high networth individuals in India,I

was looking forward to a career in this lucrative line. ”Within 3 month of working,the

ominous signs made their telltale presence felt.

Courtesy: India Today

STORIES OF SOME OF THOSE AFFECTED BY THE RECESSION IN THE JOB MARKET.

• Sunil Jain, Proprietor/Exporter IC Textiles- 1100 workers sacked

• It was a 100 per cent export oriented unit with a turnover of Rs 120 crore. Last

November unit shut down. 1100 workers retrenched.

• Ashok Leyland has decided to moderate the production plan for the next two months.

Ashok Leyland's manufacturing plants, worked 3 days a week, till December 08.

• S.P. Oswal, chairman, Vardhman Group, Ludhiana-based Rs 3000-crore textile giant

says ‘ The textile industry is definitely hit by detrimental effect of slowdown. More so,

because exports form 40 per cent of India's 55 billion dollar textile industry.

• Never before in my 42 years in textile industry did I ever have to shut down our

capacity because of a lack of orders.

Courtesy: India Today

Some top Indian information technology (IT) firms such as Tata Consultancy Services (TCS), Satyam Computer and Polaris could feel the heat if Citigroup decides to sell part of its business or look for partners to tide over its losses. Analysts feel TCS’ revenue might have an impact as Citi has signed an assured revenue agreement of $2.5 billion (Rs 12,500 crore) for a period of over nine years. This was the part of the $505 million acquisition of Citigroup Global Services (CGSL) — the business process outsourcing (BPO) arm of Citigroup — by TCS a few months back. When contacted, a TCS spokesperson said, “TCS announced its intention to acquire Citigroup Global Services in October and the transaction is proceeding as per the terms of the agreement in a planned manner.

Our agreement with Citigroup adequately addresses our interests in case of a sale or merger of the bank.” However, analysts are not convinced. Citi is a $300 million account for TCS. With the acquisition of CGSL, Citi not only catapults itself as the largest client for the IT giant but also means an account size of half abillion. Experts point out that Citi would easily account for around 5-6 per cent of the IT giant’s revenue. “Whenever the ownership of a company changes, all the contracts and deals come under the review of the new owner. So,

in case Citi has a change of owners, we assume even the $2.5 billion contract will also come under review. It’s too early to predict anything. But there are chances of price negotiations,” said another deal tracker. Analysts said they are hoping that TCS has made no upfront payment. “However, we think TCS would have structured the deal accordingly and would have built such a scenario into the contract,” they said. TCS is not the only IT firm. Satyam, India’s fourth largest IT firm might also be impacted as Citi is part of its top 10 clients.

Polaris is another firm that may be in a spot if Citi sells some of its business units. “Citi does source some work to Polaris as well. But the biggest impact would be if Citi sells its stake in Polaris, which is over 40 per cent,” said an analyst. Citigroup holds 22.88 per cent in Chennai-based Polaris and an additional 20.45 per cent through its wholly-owned subsidiary, Orbitech. The rumours on Citigroup led to changes in share prices of the Indian IT companies in different ways. While the TCS stock price went up by 7.8 per cent to close at Rs 506 on Friday, Satyam was up 3.08 per cent. However, Polaris was down by 0.52 per cent on buzz that Citi might sell its stake in the company. TCS, Satyam and Polaris are likely to be impacted by the change of fortunes of Citigroup

“1 CRORE JOB LOSS IN 2009”

• Horrible downslide in Textile Jwellery exports

• Industries Association & Govt. Official wories 1 Cr Job loss

• Exports orders dying up

• Exporter says no order beyond January 2009

• Labur intensive industry affected

• Export down by 54% in Oct – Dec 2008

UPA-CONGRESS PROMISES - FACTS

• UPA promises 1 crore new employment

• Reality check after 5 years

• Worrying scenario-recession & retrenchment

• UPA economic policy responsible

• Global economic crisis: an excuse

• UPA economic policy: driven by politics & short

term measures

UPA-CONGRESS ECONOMIC POLICY RESPONSIBLE

• However, the fact is that India is not as exposed to export-led growth as people think.

India’s net exports are very low. Unlike China, India’s current account has more or less

been in balance in the last five years. The global impact can be counter balanced by

local proactive initiatives.

• India’s growth is based essentially on investing its own savings, and so is relatively

insulated from global finance and fashions. India’s savings rate has shot up from 23.5%

in 2001-02 to 37.4% in 2007-08, a phenomenal achievement.

MAR MEHANGAI & MANDEE KI

• Prices of essential commodities doubled in last 4 years of UPA-Congress regime

Item Price – May 2004 Price – 3.2.2009

Rice 10 27

Sugar 14 25

Tea Powder 80 200

Mung Dal 24 55

Onion 6 18

Milk 14 23

Petrol 33.15 44.55

Diesel 22.50 34.45

ECONOMIC CRISIS – AFFECTED FROM BIG TO SMALL MAN

Chaos started from the Capital Market, then Real Estate, Automobile, luxury segments, has gone up to the Smallest person. More than 1 crore lost jobs.

Industry Job loss (in lacs)

Construction workers 10

Small scale industries/workshops 25

Labour-oriented export 25

Service sector, financial services, large retailers, hospitality, tourism, transport

20

Contract/casual workers of big industries 10

Job loss/partial loss/income loss to tempo, autoriskshaw, tea vendors, hamals, etc.

25

Total job loss/income loss in all 1.15 crore

CONCLUSION

• April 2004 – Congress-UPAPromise of creation of new Job 1 crore

• April 2009 – Congress-UPAConverted employed into unemployed/jobless 1 crore

CRISIS & CHAOS

• Yes its true. We wasted the Opportunity. Government allowed, participated in creation

of bubble. Did not created sustaining capacity to maintain 8+ % growth. Neglected

infrastructure. Went into short term benefits. Our Finance Minister was busy with

Sensex.

• Millions lost jobs. Small & Big. Construction worker to IT Engineer. Its crisis of

confidence. Congress- UPA government owes explanation to the country

• We must have dynamic long term plan. Execution to be started from tomorrow.

Dr. KIRIT SOMAIYA

BHARTIYA JANATA PARTY11, Ashoka Road,

New Delhi – 110 001

Prakashak: