Factory Output Rise Adds To Revival Signs!!!! or just an effect of stimulus packages

India's industrial output rose in April, beating forecasts for a fall, driven by a pick-up in domestic demand that analysts said confirmed nascent signs of recovery and an end to the central bank's rate-cutting cycle. Factory output in April rose 1.4 per cent from a year earlier, recovering from a revised fall of 0.8 per cent in March and bettering forecasts for a decline of 0.2 per cent, adding to signs from China that activity in emerging economies was picking up.

Figures from China showed factory output growth rebounded in May alongside stronger expansion in credit and consumer spending, adding to hopes it can lead a global revival.

Manufacturing output, which accounts for 79 per cent of India's industrial production, rose an annual 0.7 per cent in the first month of the 2009/10 fiscal year.

The benchmark 10-year bond yield rose 6 basis points to a two-month high 6.94 per cent on the data, which was seen confirming an end to the central bank's aggressive rate cuts since last October.

Before the April rise, output had fallen in three of the previous four months. The data also reinforced other signs that domestic demand was picking up in India. Stronger-than-expected March quarter growth helped Asia's third-largest economy to expand by 6.7 per cent in 2008/09, although that was a six-year low and well below rates of 9 per cent or more for the previous three years.

The signs of a bottoming in growth and the re-election of the ruling coalition have seen economists revise up their forecasts for 2009-10, with the central bank's estimate of about 6 per cent now at the bottom of private sector economists' expectations.

Car sales rose an annual 2.5 per cent in May, climbing for the fourth month, and strong demand in rural and semi-urban areas pushed up motorcycle sales by 12.3 per cent from a year earlier.

Infrastructure output, accounting for a quarter of factory production, grew 4.3 per cent in April from a year earlier, data showed earlier this month.

A survey of purchasing managers last week showed manufacturing expanded for a second month in May to its highest in eight months.But exports remain in the doldrums, and the government expects their decline to continue until September. Exports fell 33.2 per cent in April from a year earlier to $10.74 billion.

Although India is less dependent on exports than China or other East Asian countries, with exports accounting for about 15 per cent of GDP, the sharp drop has offset some of the domestic gains.

Reuters

Reliance Industries's German Unit Goes Bankrupt

The global economic downturn has hit India's most valued company Reliance Industries, forcing it to today to declare as insolvent its German unit Trevira, a specialty polyester manufacturer. Reliance Industries had acquired Trevira five years ago for Rs 440 crore. This acquisition in 2004 had propelled Reliance to the position of the world's largest polyester fiber and yarn producer. The German unit had 1,800 employees as of March 2009 and a turnover of Euro 323 million last year.

Trevira faced severe demand contraction in its principal market segments due to the global financial crisis .Trevira, which was part of German industrial conglomerate Hoechst AG before being acquired by Reliance, manufactures high-value branded polyester fibers and filament yarns or the automotive industries, home textiles as well as for technical applications. Trevira has production units in Germany, Denmark, Poland and Belgium.

Tamiflu Vs Flu, who cld be the major threat

The cure may, at times, be worse than the disease. That would now seem to be the case with tamiflu, the drug used more than any other for treating and preventing the dreaded bird flu — caused by the pathogenic H5N1 virus.

Going by the findings of a study by researchers of the Oxford-based Centre for Ecology and Hydrology, the consequences of large-scale consumption of tamiflu can be scarier than even those of a bird flu outbreak. The main fear is that the many tonnes of this drug that are in stock in various countries for combating a possible pandemic would, on consumption, play havoc with wildlife besides increasing human health hazards. Specifically, the scientists have warned that the bulk of this drug would get excreted through urine and flushed down sewers into natural water bodies and rivers, devastating aquatic bio-life. The worst hit would most likely be micro-organisms, including all manner of useful bacteria, present in these waters. This is because oseltamivir carboxylate, the active anti-viral ingredient of tamiflu that also kills bacteria, is resistant to bio-degradation and cannot be eliminated through normal sewer water treatment.

Its toxicity can, therefore, persist in water bodies for weeks, even if only treated water is released in them. As a result, fish, birds and other creatures that dwell in these tanks and rivers or feed on them could face ruin. Man, too, needs certain kinds of bacteria in the gut for the digestion of food. All these systems could go haywire if the need should arise to use tamiflu on a mass scale. As if this scenario were not alarming enough, the scientists have also pointed out that widespread consumption of this drug can create conditions in which the H5N1 virus, which normally infects only birds and some animals and does not get transmitted to humans, can mutate into forms capable of being passed on to humans.

Another likely fall-out could be the development of immunity against oseltamivir carboxylate in H5N1 virus itself, rendering tamiflu ineffective. This would further heighten the risk of a flu pandemic. And, what is worse, should this happen, mankind would find itself fighting a losing battle till an alternative vaccine targeted specifically at the new form of virus is developed, which might take months. Of course, it can be argued that these dreadful implications are hypothetical even though they emanate from a scientific study carried out on rivers in the US and UK. In any case, the possible hazards are far too serious and indeed unnerving to be disregarded.

The bird flu has not yet been eradicated and its incidence continues to be reported from the south-east Asian region. What needs to be remembered is that the flu outbreak of 1918, albeit of a different virus strain, had killed nearly 50 million people. Equally essential to bear in mind is the alarming decline in the population of vultures, which are nature’s scavengers, owing to the indiscriminate use of diclofenac, an anti-inflammatory drug, for the treatment of animals. Its residual toxicity in animal carcasses is killing the vultures who feed on them.

It is, therefore, imperative to revisit the strategies devised to cope with the bird flu menace and to look for safer drugs. An anti-influenza vaccine developed at the Bhopal-based high security laboratory of the Indian Council of Agricultural Research is believed to be a less harmful alternative to tamiflu. If that is indeed the case, enough stocks of this vaccine, as also adequate production capacity, need to be built up. Simultaneously, research needs to be initiated to evolve suitable biological and chemical treatments for sewer water to minimise its residual toxicity before the discharge is put out into natural water bodies.