CAD shrinks to $5bn on gold curbs Deficit At 1.2% Of GDP In Q2 RBI Advances Release Of Data To Reassure Mkts

Mumbai: The country's current account deficit shrunk to $5.2 billion (1.2% of gross domestic product) for the quarter ended September 2013, which is nearly 76% less than the deficit of $21.8 billion for the quarter ended June 2013.      The reduction in CAD is attributed to curbs on gold imports coupled with a smart recovery in exports following the depreciation of the rupee.      The current account deficit – which reflects the shortfall of export earning over import income – has dropped because merchandise exports have risen by nearly 10% over the first quarter of FY13 even as exports shrunk 8%.      The Reserve Bank of India (RBI) on Monday advanced its release of trade data, which was due toward the monthend, ostensibly to reassure markets as it withdrew most of the support measures introduced in the previous quarter to bolster the rupee. The rupee rose to a near twoweek high on Monday before settling down at 62.32 against the greenback.      The measures that were withdrawn include a facility whereby RBI lent dollars to oil marketing companies, which was discontinued last week.      "Given the backdrop of broad stability returning to the forex market, on the basis of an ongoing review of the demand conditions in the market, OMCs have been allowed to source dollars even beyond their normal daily requirements," RBI said in a statement. The central bank also discontinued a facility where it subsidized banks for mobilizing foreign deposits and converting them into rupees. RBI said that it raised $34 billion by exchanging dollars mobilized by banks – through NRI deposits and ECBs – for rupees through a swap facility. To encourage banks raise dollars through NRI deposits and foreign borrowings, RBI had subsidized the cost of converting these deposits into dollars and hedging currency risk.      The announcement came on a day when Morgan Stanley raised its 2013 and 2014 GDP growth estimates to 4.7% and 5.1%, respectively, from 4.4% and 4.6% based on improving macro numbers and reduced chances of the US Fed withdrawing its stimulus package.      While the trade deficit showed a marked improvement, the overall balance of payments (which factors in capital flows in addition to trade flows) showed a worsening of the deficit. The BoP deficit stood at $10.4 billion of the second quarter compared to a $200 million deficit in the same period last year. The BoP deficit, despite the improvement in trade numbers, was on account of foreign institutional investors pulling out money from the country on fears of US Fed tapering.

CNG prices may rise by up to 50%

Mumbai: Prices of Compressed Natural Gas (CNG) could go up by anything between Rs 15 and Rs 20 in Mumbai from Sunday.      The hike, which could be as high as 50%, taking rates from the current Rs 38.95 per kg to a maximum of Rs 59 per kg, could directly affect fares of taxis, autos, buses and fleet cabs.      The price of piped natural gas (PNG) is also likely to go up by 40% to 60%, from the existing Rs 24 per standard cubic meter (scm) to anywhere between Rs 34 and Rs 39 per scm early next month, a move that may force many households to go back to subsidised cooking gas cylinders.      Vipin Chandra Chittoda, MD of Mahanagar Gas Ltd, which supplies CNG across the city, confirmed "the price of CNG will go up by Rs 15-20 akg and PNG by Rs 15 per kg".      An MGL official said the rates would be increased because the Supreme Court had recently upheld a Gujarat high court order saying prices should be uniform across the country.      CNG prices are not uniform across India due to short supply of gas. While some firms get subsidised APM (administered price mechanism) gas, others have to rely on expensive imported LNG. CNG price hike will be fourth in 13 months  Mumbai: Mahanagar Gas Ltd managing director V C Chittoda told TOI: "Our APM gassupply at$4.2 per mmBtuislikely tobe cut by 30%, and we have imported that gas paying $19 per mmBtu or four times the price. We operate on very thin margins, so we can't absorb the price hike and will have to pass it [the cost] on to the consumers."      Union petroleum secretary Vivek Rae said, "MGL will be the worst hit because they werecompletely dependentupon subsidised APM gas. We can't help it because of the Gujarat HC order and have asked GAIL India, the national gas carrier, to divert APM gas to utilities in Gujarat [in keeping withtheorder]."      This will be the fourth hike in 13 months.CNG priceswerehikedby 85 paise in Mumbai in November 2012, followed by aRs2hikein July this year and a thirdhike of Rs3on September 1.      Post-hike,CNG priceswillbe almoston a par with diesel prices, and PNG prices will be on a par with subsidized cooking gascylinder rates.      Citizens are worried about the impact the hike will have on public transport, with unions likely to demand a fareincrease.  The auto andtaxifarehike matter is already in the high court, and despite three CNG hikes in the past one year, the state  transport department has not hiked fares of taxis, autos and fleet cabs. In fact, transportofficialshavebeen saying they willonly "abide by court directives and not take any decision on farehikeson their own." State-run buseswill notbe affecteddue  totheCNGhike asthey ply on diesel. THE PAST THREE HIKES SEPT 1 2013  The price was hiked by 3, taking the CNG rate per kg  in Mumbai up from 35.95 to 38.95. The reason given for the hike: to recover part of increase in input costs, especially towards sudden and rapid depreciation of rupee against the US$. While the transport department did not hike fares of autos and taxis, BEST has got an approval for hiking fares by 1-5 for various stages from April 2014. JUL 2013  CNG prices went up in  Mumbai region by 2. The reason cited was increase in input costs. PNG prices went up by 2.19 per scm.NOV 2012  CNG rates went up by 85  paise, but it had an impact on public transport. Bus fares were hiked by one rupee from April 2013. Fares of autos and taxis remained unchanged.