Economy News Notes

The agency, one of the big three — Standard & Poor's and Fitch Ratings are the others — cut the rating on SBI's financial strength to D-plus from C-minus, reflecting its concern over the Bank's capital adequacy as well as deteriorating asset quality.
SBI is by far the biggest commercial bank in the country, accounting for more than a fourth of total banking business.
The downgrading will indeed affect SBI's standing in global financial markets. But almost 95 per cent of SBI's business is within India.
Granting that there will be a “ripple effect” — as the higher costs of new foreign currency loans trickle down to the domestic sector — SBI will be able to provide foreign currency support to its clients at competitive rates.
Several banks on either side of the Atlantic have faced downgrades recently as they reel under the European debt crisis.
SBI also faces the twin problems of higher interest rates and deteriorating asset quality.
If the bank had gone through with the capital raising effort, these pressures would have been well under control; there would have been no question of a downgrade.
Even as the government is planning to infuse emergency capital, it needs to be emphasised that SBI and a few other public sector banks would have absolutely no difficulty in mobilising resources from the capital market at very attractive rates

With telecom industry revenues coming under pressure and funding becoming difficult, the Union Telecom Ministry on Monday proposed the infrastructure status for the sector and suggested rationalising of taxes and levies.
The telecom industry has been demanding lowering of taxes saying the levies in India are among the highest in the world and with tariffs as low as 0.5 paise per second, the revenues are falling, affecting investments in the telecom sector.
The NTP also proposes to create a special purpose Telecom Finance Corporation as a vehicle to mobilise and channelise financing for telecom projects to facilitate investment in the telecom sector.
Telecom firms are paying up to 10 per cent annual licence fee, besides 8 per cent spectrum charges and contribution towards the Universal Service Obligation (USO) Fund as percentage of Adjusted Gross Revenue.

Welcoming the draft National Telecom Policy (NTP), industry players on Monday expressed confidence
The draft aims at making available 500 MHz of spectrum by 2020. Also, it plans to do away with roaming charges and allow mobile number portability across the country.

Executive salaries in Asia may soon surpass those in the US, says a consulting firm Mercer.
Already, top management salaries in Asia have crossed those in Europe
Mercer anticipates that by 2013, these could even cross US levels.