January 2012 Economic Affairs

The Union government on 31 January 2012 revised the economic growth rate for 2010-2011 financial year to 8.4 percent in comparison to the previous estimate of 8.5 percent.The Indian economy, Asia’s third-largest slowed in recent quarters due to the impact of the global slowdown, high inflation and high interest rates.

The Reserve Bank of India (RBI) on 24 January 2012 cut the cash reserve ratio (CRR) by 50 basis points from 6 per cent to 5.5 percent with effect from 28 January 2012. RBI thus released Rs 32000 crore to banks. The RBI kept the repo rate unchanged at 8.50 per cent for the second consecutive time after raising it 13 times between March 2010 and October 2011. It also kept Reverse Repo Rate unchanged.

The Department of Industrial Policy and Promotion (DIPP) notified the rules allowing 100% foreign direct investment (FDI) in single-brand retail. Currently 51% FDI is permitted in this segment of retailing which was opened to foreign players almost six years ago.

Andhra Pradesh Power Generation Corporation Ltd (APGENCO) announced the commissioning of a 1-MW photovoltaic-cell-based solar power plant at Priyadharsini Jurala Hydro-Electric Project. This is AP Genco's maiden entry into solar power generation. The Indian Renewable Energy Development Agency (IREDA), a public limited company under the control of the Ministry of New and Renewable Energy, allocated this power project to AP Genco under phase-1 of the Jawaharlal Nehru National Solar Mission (JNNSM).