India leading a step ahead toward green energy revolution

The green energy revolution is not miles away from India. The country has emerged as the world’s number one, along with United States, in annual solar power generation. In wind power production, India ranks fifth in the world. And when it comes to space, scope and facilities for renewable energy expansion, India ranks fourth in the world. McKinsey & Company, in its survey ended in May 2009, has stated that India has one of the world’s highest solar intensities with an annual solar energy yield of 1,700 to 1,900 kilowatt hours per kilowatt peak (kWh/KWp) of the installed capacity. This is similar to the US and Hawaii, the two other countries which have been ranked first along with India. After India, US (mainly California state), Hawaii and Spain are the largest solar power producers with 1,500 to 1,600 kWh/KWp followed by Italy, Australia, China, Japan and Germany. Similarly, in the BP statistical review of world energy, India has been ranked as fifth in the world. While United States contributes 20.7% of the total wind energy in the world, Germany produces 19.6%, followed by Spain (14%), India (8%), China (6%) and Denmark (3%). According to Ernst & Young’s renewable energy country attractiveness indices, which ranks countries based on regulatory environment, fiscal support, unexploited resources, suitability to different technologies and other factors determining renewable energy growth in a country, India maintains a ranking within the top five countries in the world. Besides solar and wind, India’s index for development of renewable energy resources in hydropower sector is the fourth topmost in the world after US, Germany and China. Similarly, the country’s development index in biomass is ranked third in the world after US and Germany. Countries like Italy, UK, France, Canada and Australia lag behind India in this world index. “This implies enormous potential in energy generation running into several hundred Giga Watts with current solar technologies. As the cost of building solar capacity continues to fall over the next five to 10 years, a significant scale-up of solar generation (in multiples of tens of GW) is a very realistic possibility in India,’’ the McKinsey report stated. It further reveals that India’s biomass potential could be as high as 70 Giga Watts, bagasse 5 GW and agro-waste 18 GW. Use of wasteland for growing feedstock (woody biomass) is another potential source of biomass and a programme to cultivate such crops like poplars and cottonwoods on just a quarter of country’s 80 million hectares of degraded land, it could generate 45 to 50 GW of power. The Ernst & Young’s report stated that India’s gross renewable energy potential (up to 2032) is estimated at 220 GW. “Clearly, with a renewable energy capacity of 14.8 GW i.e, 9.7% of the total installed generation capacities of 150 GW (as on June 30, 2009), India has barely scratched the surface of a huge opportunity. However, given that in the last couple of years itself, the share of renewable energy in installed capacity has grown from 5% to 9.7%, India is definitely looking to make up for the lost time rapidly,’’ stated the report.
Sources : McKinsey & Company, BP statistical review, Ernst & Young’s Have a question you'd like to me to address? You can post me by e-mailing it to todi.binay@gmail.com

Credit default swaps introduced - Leading a change in the policy

The Reserve Bank of India (RBI) has decided to introduce credit default swaps (CDSs) which will allow banks to hedge their loan portfolio and minimise the credit default risk. A CDS hedges default risk if the credit goes bad in the situation where the company undergoes restructuring, bankruptcy or a downgrade. RBI’s second-quarter monetary policy 2009-10 had considered it appropriate to proceed with the introduction of CDSs. RBI intends to introduce a basic, over-the-counter, single-name CDS for corporate bonds for resident entities and all CDS trades will go to a centralised reporting platform and will eventually be brought on a central clearing platform. RBI has also decided to widen the scope of the currency basket for derivative-currency futures and said that it recognised stock exchanges would now be permitted to offer currency futures contracts in currency pairs, in addition to dollar-rupee contracts.
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Banks to withdraw attractive home loan schemes

India's largest public sector banks, State Bank of India (SBI) and Punjab National Bank (PNB) are planning to withdraw the special schemes on home loans that offer rates as low as eight percent for the initial years. With the Reserve Bank of India (RBI) sending out signals in its second-quarter review, these banks may have to raise their home loan rates by January to align them with the expected hike in key policy rates. The special schemes offered by public sector banks have resulted in the cost of home loans crashing to the lowest levels in five years, reports The Economic Times. While the special offers will be withdrawn from the end of the current calendar year, most banks are extending the festival offers such as zero processing fee till that time. Chairman and Managing Director of PNB, K.R. Kamath confirmed that the discounted rates on housing loans would be extended till December-end.
Currently, various banks are offering teaser rates for the first few years on home loans. Development Credit Bank is offering 7.95 percent rate for the first year on their home loans. SBI, Dena Bank and Canara Bank are currently offering eight percent rate for the first few years. After the offer period, such loans will be converted into floating rate loans.
Some public sector banks (PSBs) have already informed the Finance Ministry that with RBI looking at reversing the expansionary credit policy, they will not be in a position to continue with the offers on retail loans. The government is keen that the soft interest rate regime continues till the time there is more confidence in the economic recovery.
Private sector banks, which were forced to offer lower rates after the announcement of special schemes by their state-owned rivals, are likely to hike rates once the PSBs withdraw such schemes. Analysts expect HDFC Bank, the largest player in housing loan segment, to marginally increase its lending rates. The current floating rate offered by HDFC are 8.75 percent for loans up to Rs. 15 lakh, nine percent for loans between Rs. 15 lakh and Rs. 50 lakh and 9.5 percent for loans beyond Rs. 50 lakh.

India's largest public sector bank to start wealth management business

India's largest public sector bank, State Bank of India (SBI) is set to venture into the wealth management business and financial planning services to cash in on its extensive branch network and large client base. "We are currently running this service on a pilot basis and roll out through select branches across important cities and town would be done soon," said a senior official at SBI.
The bank has about 12,000 branches across India and has over 14 crore account holders spread across every region of the country. The business would mean additional fee income for the bank, the official said, adding that SBI has started talent hunt for the specialized service, according to PTI.
According to the official, the service would be targeted towards the middle income group, because many large players are already present to provide services to high net-worth individuals. No bank or wealth managers are providing advisory to middle income group so there is a great opportunity for the bank, the official added.
The official said the SBI branches will depute financial planners to approach account holders with over Rs. 5 lakh in their account, to ascertain whether the financial strategy adopted by the customer is correct or not. The planner will also help the customer plan cash flows, income and expenses and also firm up financial goals with specific target dates.
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Aditya Mittal among hottest rising biz stars: Fortune

Steel giant ArcelorMittal's CFO Aditya Mittal is ranked fourth in the Fortune magazine's list of 40 rising business stars under 40.
Aditya Mittal, son of Indian steel tycoon Lakshmi Mittal is the only Indian on the list, which is topped by internet search giant Google's co-founders Larry Page and Sergey Brin.
Larry Page and Sergey Brin, business publication Fortune said : "They're still under 40 -- and worth some USD 14 billion each."
The report noted that despite challenges like --antitrust investigations, growing concern over privacy and copyright issues and a fall in ad revenue this year -- Google with a market value of USD 174 billion is fast expanding into new categories like mobile devices and software applications.
Facebook CEO Mark Zuckerberg was ranked in the second position while News Corp's James Murdoch secured the third spot.
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Inflation dips to a five-month low

Nov 21

Inflation continued its downward trend for the second straight week. The inflation rate fell to its five-month low of 8.90 per cent during the week ending November 8 following fall in prices of crude oil, metals and other manufactured items. However, primary food articles such as vegetables and fruits turned expensive.

Jeff Bezos

Jeff Bezos

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Leon L. Bean

Leon L. Bean

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Burton Baskin & Irvine Robbins

Burton Baskin & Irvine Robbins

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Ian Ballantine

Ian Ballantine

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