Business Standard ND 3/05/2012
'Possibility of a normal monsoon is less than half

Though the India Meteorological Department (IMD) forecast a normal southwest monsoon this year. Commission for Agricutture Costs and Prices (CACP) Chairman ASHOK GULAT1 tells Sanjeeb Mukherjee IMD's prediction should be taken with a pinch of salt, as data shows there is usually a deviation of eight-10 per cent from the standard margin of error in many met predictions.

Business Line ND 3/05/2012
Lower, middle income groups cut spending by 65%

Expenses on healthcare shrink on bulging food spends: Assocham study
Due to high food inflation, middle and lower income groups (MIGs and LIGs) in India have been forced to slash 65 per cent of spending on entertainment, shopping, vacations, electronics, automobiles and real estate. A survey by the apex business body Assocham says they have reduced eating out to manage monthly household budgets,
The survey, conducted in March-April in the four metros and some other cities, suggested that the average monthly expenditure has increased from Rs 2,000 to Rs 6,000 and expenditure on food, as a percentage of monthly household expenditure, has gone up from 40 per cent to 100 per cent.
Consumption of individual food items show a significant reduction as well, particularly in case of rice, wheat, yellow daal, onion, tomato, butter, milk .sugar and fruits and vegetables, and the number of households consuming milk at least twice a day has also reduced.
The growing food budget has forced households to cut costs in other areas such as healthcare and transportation. Over 75 per cent of the surveyed households now go to
government hospitals or doctors instead of private doctors or hospitals. Seventy eight per cent have decreased spending on eating out, 65 per cent on clothing and 77 per cent on vacations.
Similarly, 49 per cent have decreased their spend on home appliances, 44 per cent on home and personal electronics, 42 per cent on automobiles; and 35 per cent on
real estate. Those belongingto the MIG have curtailed expenses on such heads by nearly 65 per cent during the last 6 months due to rise in inflation, interest rates and fuel costs. With food and education of children eating up most of then- incomes, the saving is likely to come down heavily, reveals the survey done on 200 employees selected from each city as samples. The Delhiites topped in curtailing their expenses followed by Mumbai, Ahmedabad, Chandigarh, Kolkata, Chennai and Dehradun, said Mr D S Rawat, Secretary-General, Assocham.
The survey reveals that food inflation impacted the most consumers in metros and other major cities vis-a-vis tier-Ill and semi-urban areas due to sudden hike in the fruits, vegetables and milk prices and that the rise in inflation and per capita income was disproportionate.
Consumers' growing unease is reflected in their saving rate and spending habits, with many in MIGs and LIGs indicating that they are finding ways to cut back spending now or will do so. Around 69 per cent of the respondents have cut down in their saving rate.
Nearly half of MIG members either avoid shopping altogether or shop only for absolute necessities; 76 per cent said that their shopping has been restricted to only necessities and splurge in their spending is occasional.
About 88 per cent of the respondents said they have cut back on everyday expenses and save money by avoiding outside food, car-pooling, cutting down on gas and use of electricity.
The urban male's expenses of Rs 500-Rs 2,000 per month on drinks, cigarettes, gutkha, pan, etc has come down by 20 per cent while the urban women have also cut down monthly expenses on cosmetics, beauty treatments etc from Rs 1,500-2,000 to Rs 500-1,000.
Over 87 per cent said their monthly grocery bills have jumped from Rs 3,000 to about Rs 7,000/ to 8,000 in the last two years.

Hindustan Times, ND 3/05/2012
PART WAYS on distribution, but production tie-up to remain

Tata Motors and its partner, Italian car giant Fiat, on Wednesday brought to an end their six-year old distribution tie-up as the latter looks to chart a new growth strategy in India.
Despite the introduction of globally acclajmed products like Punto and Lfriea, Fiat has seen its sales decline over the last two years. In 2011-12 its market share slid to below 1% in the world's fifth largest car market.
Fiat cars would now be distributed under a new company controlled directly by Fiat Spa even as joint manufacturing and sharing of technology with Tata at its Ranjangaon factory would continue.
"The basic structure of the existing JV will remain intact, only the distribution of the cars would be done by a new company outside the JV" said Rajeev Kapoor, CEO, Fiat India.
Fiat's India operations would now be run through two companies — one for distribution and after sales, and the existing 50:50 joint venture with Tata that will continue to make the cars in India. Currently there are 178 co-branded Tata-Fiat dealerships in the country, which would now gradually transform into full-fledged dealerships of one or the other brand.