Economy News Notes

China could well displace India as the country with the greatest appetite for gold in 2012.
Its jewellery and investment demand reached 769.8 tonnes in 2011, representing 82 per cent of India's level of demand for gold which was at 933.4 tonnes, according to World Gold Council (WGC).
Further, both countries face separate headwinds in 2012, but China with its large reserve base, adjustable exchange rate and political decisiveness may be better positioned to tackle a slowdown posed by falling exports and the policy-tightening pursued during most of 2011.

There is such a huge opportunity in Indian retail and fast moving consumer goods (FMCG) that there is no need for players to fight for their share of the pie.
- Instead, the focus should be to grow this pie, which is small today, and to unlock a closed market
- “The same person who will spend Rs.2,000 on a lavish cinema experience will also be seen fighting to save Rs.10 at a grocer.
- “To understand this behaviour, we need to understand the difference between a shopper and a consumer. They are no longer the same. Both have a unique mission and behaviour that is diametrically different.”
A report, ‘The Tiger Roars' by the CII and the Boston Consulting Group was released and it estimated that total consumption expenditure, at $991 billion in 2010, is expected to grow to nearly $3.6 trillion in 2020.

World Bank President Robert Zoellick has announced to step down from at the end of his five-year-term in June, giving rise to speculation that the Secretary of State, Hillary Clinton, may be headed to replace him, which was immediately denied by her aide.
Mr. Zoellick said through June 30 he would stay 100 per cent focussed on being Bank President and would continue to drive policy and programmes at a heightened tempo.

Without referring to, though stung by, the CBI Director A.P. Singh estimates of illegal funds held by Indians in foreign locations, the statement said: “Switzerland is not a tax haven. There have been several speculations about the amount of wealth held by Indians in Swiss Banks. Such estimates and statistics lack evidence and are uncorroborated”.
- The Double Taxation Avoidance Agreement (DTAA) between India and Switzerland, it said, provided a legal framework within which administrative assistance could be sought in particular cases of tax evasion or tax fraud.
Mr. Singh said: “It is estimated that around $500 billion of illegal money belonging to Indians is deposited in tax havens abroad. Largest depositors in Swiss banks are also reported to be Indians.” He went on to state that India, in particular, “has suffered from the flow of illegal funds to tax havens such as Mauritius, Switzerland, Lichtenstein and British Virgin islands”.
- Meanwhile, the government said the CBI chief's statement was based on a report prepared and submitted by a committee appointed by the Supreme Court.