Economy gasps as growth sputters to 9-yr low of 5.3% 6.5% GDP Rate In 2011-12 Way Below Govt’s Estimates

New Delhi: India's economic growth has come down to a nine-year low of 5.3% in the January-March quarter of this year, showing up in bolder relief than ever before the signs of the severe stress in the economy, and prompting calls for urgent action to reverse the trend. 

    Data released by the Central Statistics Office (CSO) on Thursday showed growth in 2011-12 stood at 6.5%, much lower than the 8.4% posted in the previous year. It was below the government's previous estimate of 

6.9% and way off the mark of estimates handed out periodically by top government policymakers. 

    The Indian economy, once the star among emerging market economies, has steadily slowed since the January-March quarter of 2010-11, and on Thursday after digesting the January-March growth figure of 5.3%, some economists cut their growth estimates for 2012-13. 

    The manufacturing sector growth fell 0.3% in the March quarter compared to an expansion of 7.3% in the corresponding period the previous year. Agriculture posted a growth of 1.7%, sharply lower than the 7.5% growth in the March quarter of 2010-11 For the full year, the manufacturing sector grew 2.5% in 2011-12 compared with 7.6% in 2010-11. 

SLUGGISH ELEPHANT March quarter GDP growth at 5.3%, against 9.2% in Q4 of 2010-11 

Manufacturing scrapes the bottom with 0.3% decline, agriculture grows just 1.7%, services slow down to 7.9% from 10.6% 

Overall 2011-12 growth at 6.5%, lower than estimates of 6.9% Economists are scaling down growth projection 

for 2012-13 

Industry in gloom. Says govt should pull out all stops to stem the slide 

Growth in core sectors slows to 2.2% in April 

    Growth in the eight core industries slowed in April, pointing to a rut. Coal, crude oil, natural gas, refinery products, fertilizers, steel, cement and electricity grew 2.2% in April, lower than the 4.2% posted in the same month last year. P 19 

Govt in denial? FM hints that the worst is over 

    The finance ministry seemed to be in denial on Thursday, with officials saying India was still growing faster than many Eurozone countries. Pranab Mukherjee too suggested the worst was over, saying the factors for sluggishness had "bottomed out". P 19 Experts urge govt to step up reforms

New Delhi:The slide in the economic growth has led to calls for quick action on the part of the government. The sluggishness in the services sector, which accounts for nearly 60% of GDP, emerged as a worry for policymakers already burdened by the slowing economy and stubborn inflation. Data showed the services sector growth slowed to 7.9% in the March quarter compared with a10.6% expansion in the sameyear-ago period. The domestic demand-driven economy has been hit hard by high inflation, interest rates, rising global commodity prices, lack of economic reforms and delay in implementation of projects. This, in turn, has hit business confidence, forcing domestic players to explore investment options overseas. 

    Policymakers have consistently blamed the global economic environment and the lack of cooperation from the opposition in approving key economic legislations as reasons for the slowdown. The March quarter data came on a day when the opposition had called for a shutdown to protest the sharp increase in petrol prices. Analysts say the disappointing growth numbers could spoil the mood further and heighten the anxiety. 

    Finance Minister Pranab Mukherjee termed the March quarter data as disappointing but said the figures should be seen in the light of overall global developments. He attributed the slowdown to tight monetary policy and the weak global sentiment affected growth in domestic private investment. 

    But economists pointed to two key risks which included uncertainty about the monsoons and the European debt crisis and said the need of the hour was to step up reforms and ease supply bottlenecks.

COME AGAIN? 

There are several reasons that growth is almost universally predicted to be sustained at a high rate of 8-9% per annum and more, over the next few decades... —PRANAB MUKHERJEE ON AUG 6, 2011

After smart opening, FB fizzles on debut High Volumes Cause Technical Problems

San Francisco: Facebook shares rose less than expected on their first day of trade on Friday and huge order volume caused technical problems that marred the coming out party of the No. 1 online social network. 

    Its shares were up 8% in early afternoon trading on the Nasdaq, after opening 11% higher and then rapidly heading south to touch their initial public offering price of $38. The gains were below market forecasts of as much as a 50% jump. 

    "We have got some unhappy guys out there," said Wayne Kaufman, chief market strategist at John Thomas Financial, a retail broker on Wall Street. "They were hoping for Facebook to be considerably better. I bet there are a lot of disappointed people in the market." 

    Facebook, which has about 900 million users globally, priced its IPO at the top end of its target range, becoming the first US company to go public with a valuation greater than $100 billion. If a greenshoe option to underwriters is exercised, Facebook will raise as much as $18.4 billion by selling an 18% stake, the second-biggest IPO in US history after the one by Visa Inc. 

    Analysts blamed the poorer-than-expected first-day showing on the vast number of shares floated and market weakness. General Motors' decision to pull paid-advertising from the social network, announced this week, also hurt. After a delay in the opening print that drove up anxiety levels among traders and onlookers outside the Nasdaq, the closely watched stock began trading at $42.05, rose to as high as $45 and then rapidly retreated. The Nasdaq exchange said it was investigating an issue with execution of trades. 

    Facebook's IPO had been heavily oversubscribed, particularly by retail investors, despite concerns about slowing growth in the last quarter, whether the company can make money from mobile advertising, and the immense control chief executive Mark Zuckerberg has over on the company. 

    Others warned that the IPO price, equivalent to over 100 times historical earnings versus Apple's 14 times and Google's 19 times, makes Facebook a risky bet. For Facebook, Friday began with much fanfare. To rapturous applause from employees, Mark Zuckerberg— flanked by COO Sheryl Sandberg and Nasdaq CEO Robert Greifeld—rang the bell to kick off trading at the company's Silicon Valley headquarters at 6:30 am Pacific time. The 28-year-old billionaire founder, wearing his trademark black hoodie, hugged and high-fived Sandberg and other employees in celebration after he pressed the remote button. AGENCIES Co-founded by Indian, Lightbox in Facebook kitty 

Washington:Social media giant Facebook has bought another photo application named Lightbox, after recently shelling out over a billion dollars on Instagram. Facebook founder Mark Zuckerberg purchased London firm Lightbox for his networking site company, which makes a photo app for Android phones. 

    "We started Lightbox because we were excited about creating new services built primarily for mobile, especially for the Android and HTML5 platforms, and we're honored that millions of you have downloaded the Lightbox Photos app and shared your experiences with the Lightbox community," the Daily Mail quoted Lightbox's founders Thai Tran and Nilesh Patel as saying. 

    The move, which came just hours before Facebook becomes a public company, will see the firm's staff moving to Silicon Valley. 

    In a statement released by Facebook, it said, "Today, we're happy to announce that the Lightbox team is joining Facebook, where we'll have the opportunity to build amazing products for Facebook's 500+ million mobile users. The Lightbox team has incredible experience developing innovative mobile products that people love. We look forward to welcoming this world-class team of engineers to Facebook." 

    Facebook also recently bought Glancee, a 'social discovery' app that shows the user when people with similar interest and friends are nearby. AGENCIES

Google versus Facebook: Here's how the two rivals stack up

Facebook is the hottest Internet company to hit the stock market since Google went public in 2004. The Silicon Valley companies, located seven miles apart, also happen to be locked in a bitter battle for Web surfers' allegiance and online advertisers' money. The duel is likely to intensify now that the IPO has provided Facebook Inc's social network with the means to pay for efforts to battle Google Inc's dominant search engine. Here's the two rivals stack up, based on the latest available data: 

ANNUAL REVENUE: 

Google - $38 billion 

Facebook - $3.7 billion 

ADVERTISING REVENUE: 

Google - $36.5 billion 

Facebook - $3.2 billion 

ANNUAL NET INCOME: 

Google - $9.7 billion 

Facebook - $668 million. 

SOCIAL NETWORKING USERS: 

Facebook - more than 900 million 

Google - more than 170 million 

EMPLOYEES (as of March 31): 

Google - 33,100 

Facebook - 3,500 

CEO: 

Google - Co-founder Larry Page 

Facebook - Co-founder Mark Zuckerberg 

AMOUNT RAISED IN IPO: 

Google - $1.67 billion 

Facebook - $16 billion 

Why you shouldn't buy Facebook stock on the first day

Even the hottest initial public stock offerings can lose steam after their first day of trading. Keep in mind that buying Facebook stock Friday provides a chance to lose money 

Sure, company insiders will make money selling at the opening price. And investors who used connections or big bucks to score shares at the IPO price will profit if they sell after a first-day "pop." 

For everyone else, the wildly mixed record of other celebrated IPOs beyond their first trading session offers a lesson. 

It's understandable that everyone wants to get in early on what could be the next Google. Shares of the Internet search leader had an initial offering price of $85 in 2004, started on the stock market at $100 and climbed above $700 by 2007. Even after moving sideways for more than four years, they're still above $600. 

But odds are against a similar performance in the current market. 

The vast majority of average Facebook investors couldn't get in at the $38-per-share offer price. Those shares went largely to company insiders, the deal's underwriters or their fat-walleted clients. The price almost always shoots quickly higher by the time orders to buy at the market price kick in. 

And note that several of last year's "must have" IPOs aren't so "must have" any more. 

> Pandora, an Internet radio company, went public June 15 at $20 a share. You could have bought the stock during the day for $26. It's now trading under $11.