Reserve Bank of India Governor Duvvuri Subbarao on Thursday said India would find it difficult to achieve its fiscal deficit target this year, unless it made adjustments to account for the rise in fuel and fertiliser prices. The comments sparked market concern that the government would need to step up borrowing to fund the gap.
Duvvuri Subbarao In Budget 2011-12, the government had announced a fiscal deficit target of 4.6 per cent of the gross domestic product. This was widely considered to be ambitious, after its 5.1 per cent deficit target for last year was met by high one-time revenues.
“Since crude fertiliser prices have gone up since the Budget announcements, unless some adjustment is made, either on the expenditure side or the tax side, it is difficult to deliver on a 4.6 per cent target,” Subbarao said, after RBI's board meeting here. “It is difficult to say whether the government can deliver on a 4.6 per cent target. It depends on what decision they take and a number of issues --- the adjustment of fuel prices being the most important one,” he said, adding fighting inflation remained the central bank's priority.
The government had said it would borrow a gross Rs 4.17 lakh crore in the current financial year, of which it would raise Rs 2.5 lakh crore in the first half.
Subbarao's comments, which came after the markets closed, raised concerns among bond dealers that the government would increase its borrowing in the second half of the current financial year. “The governor's remarks on fiscal deficit raise doubts that borrowings in the second half of the current financial year could be increased. However, there should not be any impact on markets now, since the concern for the market is immediate supply. We will cross the bridge, as and when it comes,” said Manish Wadhawan, director and head (rates), HSBC India.
Last June, the government had allowed state-run oil firms to fix the price of petrol, but had continued to control the prices of diesel, kerosene and cooking gas to shield the poor and try to tame inflation. State-run oil firms increased petrol prices by about 8.6 per cent from Sunday, a record rise, that is expected to fuel inflation in the country.
RBI had, on May 3, raised interest rates for the ninth time since March 2010, by a sharper-than-expected 50 basis points. It had also said fighting inflation was its priority, even at the expense of some short-term growth. “This is our priority and I only want to reiterate what we said in the annual policy — that we need to bring inflation down to an acceptable level for growth to be sustainable,” Subbarao said.
The wholesale price index has remained stubbornly high for months and rose 8.66 per cent annually in April. The prospect of higher energy prices would exert pressure on RBI to raise interest rates in June and maintain a hawkish stance. RBI expects inflation to stay high in the first half of the current financial year before easing to six per cent by the end of the year.
Saturday, May 21, 2011
Capital gains account scheme to your rescue
It will shield you from paying capital gains tax on profits accrued from the sale of property while earning an interest on it. The interest income, however, will be taxed.
The booming real estate market had meant Kapil Kumar could manage to sell his house in Pune for a neat profit. He had bought the place with the idea that one day he would retire from his job and also from Mumbai. However, 10 years on, the price he was getting was something he hadn’t even dreamt. Wanting to make hay while the sun shines, he completed the deal in record time. The only hitch that remained was the long-term capital gains (LTCG) tax. And in this case, high profits meant higher tax. This set Kumar thinking of ways to save it.
He had heard that investing the profit back in real estate does help save tax. However, he didn’t want to buy any property in the current market. A visit to his chartered accountant (CA) was, thus, warranted.
His CA told him the Income Tax Act exempts capital gains from the sale of a house if the taxpayer invests the same within two years from the date of sale, or constructs another house property within three years from the date of sale. If the entire capital gain is not used, proportionate deduction is also available.
So, Kumar has two years to buy a new house. However, what if by July 31, the last date for filing the tax return, he hasn’t managed to found the right property? How does he convey to the income tax officials that he does, indeed, intend to buy a house within the time allotted to him and, hence, will not be paying tax on the capital gains earned during the year?
SPECIAL DEPOSIT
His CA informed him that in such situations, Kumar can keep the money in a special fixed deposit facility provided by the government. This facility is known as the Capital Gains Account Scheme (CGAS). Let us assume that Kumar earned long-term capital gains of Rs 50 lakh from the sale of his Pune property. The tax at 20 per cent on this amount works out to be Rs 10 lakh (the three per cent education cess has been ignored here for ease of understanding the concept). Section 54 offers exemption from this tax if he purchases within two years or constructs within three years a residential house costing Rs 50 lakh.
Prior to 1988, Kapil would have been required to pay the tax in the financial year during which the capital gains arose, even if he intended to buy or construct a house. After purchasing or constructing a house within the stipulated time frame, he could apply for the refund. When he’d actually receive the refund depended on the strength of his prayers. Among other things, it was inconvenient for the income tax authorities to dig up past records to verify the claim.
Fortunately, the tax department was aware of the problem. CGAS, introduced in 1988, eliminated the need to reopen the assessments for rectification. In effect, CGAS is a special account with banks or specified institutions, to be used when the amount of capital gain is not utilised for the purchase or construction of the new asset before the due date of furnishing return of income (Notification No. 724(E) dated June 22,1988).
If the amount deposited is not utilised fully for purchase or construction of the new asset within the stipulated period, the remaining part would be treated as capital gain of the year in which the period of three years from the date of sale of the original house expires.
FEATURES
There are two types of such accounts: Type-A, a savings deposit, and Type-B, a term deposit. Type-B can be either cumulative or non-cumulative. The interest rates will be the same as those applicable to the normal savings and term bank deposits.
The effective date for claiming exemption will be the date on which the bank receives the application, subject to realisation of cheque or draft. However, the interest will be payable from the date the cash is paid or the cheque or draft is realised.
Amounts are transferable from Type-A to Type-B and vice versa. For premature transfers from Type-B to Type-A, the normal penalties will be applicable.
Withdrawals can be made only from Type-A, by a declaration that the amount sought to be withdrawn is proposed to be utilised for the intended purpose. If the amount to be withdrawn exceeds Rs 25,000, the bank will make the payment by way of a crossed demand draft drawn in favour of the person to whom the depositor intends to make the payment. Any such amount withdrawn must be utilised within 60 days. And the unutilised portion, if any, has to be redeposited into CGAS.
KEEP IN MIND
While the many advantages of CGAS must be acknowledged, one should not ignore the several lacunae which also exist in this facility.
CGAS does not allow any withdrawals, except for the specified purpose (of buying the house), even of interest. More, the investor is required to pay tax on this interest (to which he has no access) on an accrual basis out of his other income.
Even if the sale is effected in, say, the first month of the financial year (say, April 2011), the taxpayer may deposit the amount in CGAS on the last date for filing returns. In other words, he can freely utilise this money for 15 months (April 2011 to July 2012) as he likes.
We have already discussed the fact that if the amount is not utilised wholly or partly for the desired purpose, within the specified period, the unutilised amount shall be treated as capital gains of the year during which the specified period expires.
If this amount is to be treated as capital gain of that year, can the assessee purchase another house within two years or construct within three years? May he use CGAS once again? It is illogical to do so and also the fact remains that this capital gain has not arisen out of sale of house, shares, and so on. Therefore the answers to these questions are in the negative.
However, experts believe the taxpayer has a right to set-off the carried forward capital losses against these gains.
The writer is director, Wonderland Consultants
The booming real estate market had meant Kapil Kumar could manage to sell his house in Pune for a neat profit. He had bought the place with the idea that one day he would retire from his job and also from Mumbai. However, 10 years on, the price he was getting was something he hadn’t even dreamt. Wanting to make hay while the sun shines, he completed the deal in record time. The only hitch that remained was the long-term capital gains (LTCG) tax. And in this case, high profits meant higher tax. This set Kumar thinking of ways to save it.
He had heard that investing the profit back in real estate does help save tax. However, he didn’t want to buy any property in the current market. A visit to his chartered accountant (CA) was, thus, warranted.
His CA told him the Income Tax Act exempts capital gains from the sale of a house if the taxpayer invests the same within two years from the date of sale, or constructs another house property within three years from the date of sale. If the entire capital gain is not used, proportionate deduction is also available.
So, Kumar has two years to buy a new house. However, what if by July 31, the last date for filing the tax return, he hasn’t managed to found the right property? How does he convey to the income tax officials that he does, indeed, intend to buy a house within the time allotted to him and, hence, will not be paying tax on the capital gains earned during the year?
SPECIAL DEPOSIT
His CA informed him that in such situations, Kumar can keep the money in a special fixed deposit facility provided by the government. This facility is known as the Capital Gains Account Scheme (CGAS). Let us assume that Kumar earned long-term capital gains of Rs 50 lakh from the sale of his Pune property. The tax at 20 per cent on this amount works out to be Rs 10 lakh (the three per cent education cess has been ignored here for ease of understanding the concept). Section 54 offers exemption from this tax if he purchases within two years or constructs within three years a residential house costing Rs 50 lakh.
Prior to 1988, Kapil would have been required to pay the tax in the financial year during which the capital gains arose, even if he intended to buy or construct a house. After purchasing or constructing a house within the stipulated time frame, he could apply for the refund. When he’d actually receive the refund depended on the strength of his prayers. Among other things, it was inconvenient for the income tax authorities to dig up past records to verify the claim.
Fortunately, the tax department was aware of the problem. CGAS, introduced in 1988, eliminated the need to reopen the assessments for rectification. In effect, CGAS is a special account with banks or specified institutions, to be used when the amount of capital gain is not utilised for the purchase or construction of the new asset before the due date of furnishing return of income (Notification No. 724(E) dated June 22,1988).
If the amount deposited is not utilised fully for purchase or construction of the new asset within the stipulated period, the remaining part would be treated as capital gain of the year in which the period of three years from the date of sale of the original house expires.
FEATURES
There are two types of such accounts: Type-A, a savings deposit, and Type-B, a term deposit. Type-B can be either cumulative or non-cumulative. The interest rates will be the same as those applicable to the normal savings and term bank deposits.
The effective date for claiming exemption will be the date on which the bank receives the application, subject to realisation of cheque or draft. However, the interest will be payable from the date the cash is paid or the cheque or draft is realised.
Amounts are transferable from Type-A to Type-B and vice versa. For premature transfers from Type-B to Type-A, the normal penalties will be applicable.
Withdrawals can be made only from Type-A, by a declaration that the amount sought to be withdrawn is proposed to be utilised for the intended purpose. If the amount to be withdrawn exceeds Rs 25,000, the bank will make the payment by way of a crossed demand draft drawn in favour of the person to whom the depositor intends to make the payment. Any such amount withdrawn must be utilised within 60 days. And the unutilised portion, if any, has to be redeposited into CGAS.
KEEP IN MIND
While the many advantages of CGAS must be acknowledged, one should not ignore the several lacunae which also exist in this facility.
CGAS does not allow any withdrawals, except for the specified purpose (of buying the house), even of interest. More, the investor is required to pay tax on this interest (to which he has no access) on an accrual basis out of his other income.
Even if the sale is effected in, say, the first month of the financial year (say, April 2011), the taxpayer may deposit the amount in CGAS on the last date for filing returns. In other words, he can freely utilise this money for 15 months (April 2011 to July 2012) as he likes.
We have already discussed the fact that if the amount is not utilised wholly or partly for the desired purpose, within the specified period, the unutilised amount shall be treated as capital gains of the year during which the specified period expires.
If this amount is to be treated as capital gain of that year, can the assessee purchase another house within two years or construct within three years? May he use CGAS once again? It is illogical to do so and also the fact remains that this capital gain has not arisen out of sale of house, shares, and so on. Therefore the answers to these questions are in the negative.
However, experts believe the taxpayer has a right to set-off the carried forward capital losses against these gains.
The writer is director, Wonderland Consultants
Volatile markets: Factors investors need to track
The markets are going through a volatile phase since the last few months due to several factors at the domestic as well as global levels. The developments at the global macroeconomic level drive sentiments of large global investors. Therefore, it is important for investors to track the significant developments around the world, and analyse their potential impact on the domestic stock market sentiments.
You can classify global developments into two categories. On the one side, there are those that do not directly impact the economy. On the other, there are triggers that have a direct impact on the prices of goods that are commonly-used, and hence have a direct impact on the economy.
Global economic developments
There are several factors that influence sentiments of global investors. There are many global developments (ranging from the US unemployment data to crisis in West Asia and Europe, and monetary tightening in China) that influence the short-term market sentiments. Therefore, short term investors should track them closely. In general, medium to long-term investors need not be too critical about short-term movements. They should follow macroeconomic trends that may influence sectors or stocks in general, and use them to make entry or exit decisions.
Volatility in global commodities
The prices of global commodities have been quite volatile in the recent times due to various factors at the global level as well as speculative plays. Investments in commodities have been used as hedging instruments by large global investors against sovereign and currency risks. It is important to track the movements in global commodities as they have the potential to drive the global inflation rate, and destablise economic growth paths.
In general, the domestic economy is favourably-placed with respect to the global point of view barring some concerns related to inflation. The stock markets here are expected to continue their out-performance. Therefore, long-term investors should analyse the economic and business conditions carefully and make the necessary adjustments in their portfolios.
Investments in stock markets
In general, the markets are expected to remain firm and rally further from the current levels, barring the regular correction phases. However, investors should track the rising interest rates and their positions in interest rate-sensitive sectors. Sectors that are expected to remain favorable include technology, FMCG, infrastructure, and energy.
Investments in commodities
There has been a sharp correction in the commodity markets in the recent past due to turbulence in the global markets and unwinding of speculative positions. The recent correction has brought valuations closer to fundamental values and hence investments in commodities look attractive. Investors can look at investing in commodities from a portfolio diversification perspective.
Investments in debt instruments
The yields from debt instruments have gone up due to the high interest rates being offered. Both global and domestic factors are expected to keep fuelling the inflation rate in the short to medium terms. Hence, the interest rates are expected to rule high. Risk-averse investors can look at reducing their exposure to equity and other risky assets, and diversify with debt-based instruments.
You can classify global developments into two categories. On the one side, there are those that do not directly impact the economy. On the other, there are triggers that have a direct impact on the prices of goods that are commonly-used, and hence have a direct impact on the economy.
Global economic developments
There are several factors that influence sentiments of global investors. There are many global developments (ranging from the US unemployment data to crisis in West Asia and Europe, and monetary tightening in China) that influence the short-term market sentiments. Therefore, short term investors should track them closely. In general, medium to long-term investors need not be too critical about short-term movements. They should follow macroeconomic trends that may influence sectors or stocks in general, and use them to make entry or exit decisions.
Volatility in global commodities
The prices of global commodities have been quite volatile in the recent times due to various factors at the global level as well as speculative plays. Investments in commodities have been used as hedging instruments by large global investors against sovereign and currency risks. It is important to track the movements in global commodities as they have the potential to drive the global inflation rate, and destablise economic growth paths.
In general, the domestic economy is favourably-placed with respect to the global point of view barring some concerns related to inflation. The stock markets here are expected to continue their out-performance. Therefore, long-term investors should analyse the economic and business conditions carefully and make the necessary adjustments in their portfolios.
Investments in stock markets
In general, the markets are expected to remain firm and rally further from the current levels, barring the regular correction phases. However, investors should track the rising interest rates and their positions in interest rate-sensitive sectors. Sectors that are expected to remain favorable include technology, FMCG, infrastructure, and energy.
Investments in commodities
There has been a sharp correction in the commodity markets in the recent past due to turbulence in the global markets and unwinding of speculative positions. The recent correction has brought valuations closer to fundamental values and hence investments in commodities look attractive. Investors can look at investing in commodities from a portfolio diversification perspective.
Investments in debt instruments
The yields from debt instruments have gone up due to the high interest rates being offered. Both global and domestic factors are expected to keep fuelling the inflation rate in the short to medium terms. Hence, the interest rates are expected to rule high. Risk-averse investors can look at reducing their exposure to equity and other risky assets, and diversify with debt-based instruments.
Debt instruments look attractive as interest rates go up
The inflation rate has been ruling quite high in emerging nations ever since the global economy came out of the recession last year. On the other hand, inflation remained quite subdued in the developed nations last year. However, it has started rising in the developed nations as well recently, which is a cause for concern across the world.
The reason for the current situation and root cause of inflation is quite complex due to the involvement of several factors - global as well as domestic. That is why it is getting more difficult to get a handle on the situation. In India, the initial wave in inflation was fuelled by rising prices of food articles. Later, it was driven by rising prices of fuel, manufactured goods and non-food articles. Analysts believe that globally inflation is likely to remain firm in the short to medium terms, and it requires a synchronised effort across various policies to control the situation.
These are some of the main factors that are expected to influence the inflation rate in the short to medium terms here:
Commodity price
As the global economies are recovering, the prices of global commodities such as fuel and metals are expected to rise due to more demand. Higher price in international commodities is a major factor that can influence the inflation rate here.
The cascading effect of high prices in international commodities and food articles , and high interest rates, on the manufacturing sector , is another important factor, going forward.
Supply chain
The supply chain inefficiencies , and speculation in agricultural commodities and food articles has already created panic, and triggered sharp price rises many times in the past. This is another major factor that can influence the inflation rate here, going forward .
RBI measures
In India, the government and the Reserve Bank of India (RBI) are taking a tough stand against inflation . The RBI has already raised the key interest rates seven times over the last 18 months. The policymakers are ready to compromise on economic growth to some extent to deal with the rising inflation rate because the implications of a high inflation rate are quite widespread, especially for the economically weaker sections.
Uncontrolled inflation is actually destructive for a country as consumers and investors change their spending habits.
The reason for the current situation and root cause of inflation is quite complex due to the involvement of several factors - global as well as domestic. That is why it is getting more difficult to get a handle on the situation. In India, the initial wave in inflation was fuelled by rising prices of food articles. Later, it was driven by rising prices of fuel, manufactured goods and non-food articles. Analysts believe that globally inflation is likely to remain firm in the short to medium terms, and it requires a synchronised effort across various policies to control the situation.
These are some of the main factors that are expected to influence the inflation rate in the short to medium terms here:
Commodity price
As the global economies are recovering, the prices of global commodities such as fuel and metals are expected to rise due to more demand. Higher price in international commodities is a major factor that can influence the inflation rate here.
The cascading effect of high prices in international commodities and food articles , and high interest rates, on the manufacturing sector , is another important factor, going forward.
Supply chain
The supply chain inefficiencies , and speculation in agricultural commodities and food articles has already created panic, and triggered sharp price rises many times in the past. This is another major factor that can influence the inflation rate here, going forward .
RBI measures
In India, the government and the Reserve Bank of India (RBI) are taking a tough stand against inflation . The RBI has already raised the key interest rates seven times over the last 18 months. The policymakers are ready to compromise on economic growth to some extent to deal with the rising inflation rate because the implications of a high inflation rate are quite widespread, especially for the economically weaker sections.
Uncontrolled inflation is actually destructive for a country as consumers and investors change their spending habits.
Volatility can indicate a rebound for stock markets
The impact of global economic interplay was clearly visible in the stock markets last week. The sharp decline in commodity prices arrested the decline in the domestic stock markets and brought about some stability, albeit with a high degree of volatility.
The debate over the extension of the second round of quantitative easing (QE2) in the US contributed to the correction in commodity prices. Renewed anxiety over Europe's debt crisis, concerns over runway inflation in Asia and political turbulence in West Asia has left the global markets nervous.
Investor nervousness, as usual, brings on nothing but volatility. The current market volatility has shown how inter-related the global economies are, and how investor sentiment can change quickly as the direction of the markets change. It can be seen from the fact that just a rate hike ago, the domestic stock markets as represented by the Nifty was near the 6,000 level due to copious inflow from foreign institutional investors (FIIs). Now, less than a month and a steep rate hike later, the markets are down by five percent month on month.
Volatility precedes change in direction
Many investors think a high degree of volatility indicates a problem. But, many market experts think otherwise. Analysts believe that increased volatility can indicate a rebound for the markets . Usually, volatile market movements precede a change in the market direction.
A high VIX appears just before a market rally, and a low VIX usually augurs a slide. Hence, investors should find strategies to deal with market volatility rather than be frightened of it.
The debate over the extension of the second round of quantitative easing (QE2) in the US contributed to the correction in commodity prices. Renewed anxiety over Europe's debt crisis, concerns over runway inflation in Asia and political turbulence in West Asia has left the global markets nervous.
Investor nervousness, as usual, brings on nothing but volatility. The current market volatility has shown how inter-related the global economies are, and how investor sentiment can change quickly as the direction of the markets change. It can be seen from the fact that just a rate hike ago, the domestic stock markets as represented by the Nifty was near the 6,000 level due to copious inflow from foreign institutional investors (FIIs). Now, less than a month and a steep rate hike later, the markets are down by five percent month on month.
Volatility precedes change in direction
Many investors think a high degree of volatility indicates a problem. But, many market experts think otherwise. Analysts believe that increased volatility can indicate a rebound for the markets . Usually, volatile market movements precede a change in the market direction.
A high VIX appears just before a market rally, and a low VIX usually augurs a slide. Hence, investors should find strategies to deal with market volatility rather than be frightened of it.
Infosys to start new campus in Shanghai, to invest $125-150 million
SHANGHAI: Infosys Technologies chairman N R Narayana Murthy on Saturday laid the foundation of a new campus in Shanghai, and announced plans to treble the company's business operations in China.
Addressing a press conference after the foundation laying ceremony, Murthy suggested China needs companies like Infosys as much as they need the Chinese market.
"China has demonstrated an extraordinary pace of growth. Such growth cannot be sustained unless it is backed up by scalable, easily maintainable, easily available and easily usable information systems. That is where we believe that there is opportunity for us in China for us," he said.
Murthy was joined at the foundation laying ceremony and the press conference by Mohandas Pai, the Infosys board member who will be quitting the company.
"I am with the company till June 10. I will continue to work on the Shanghai project even after that. I will work on this project and a project in India for about a year," Pai told TOI on the sidelines of the ceremony. He did not wish to disclose future career plans at this stage.
The operations in China account for one to 1.5 per cent of the company's total business volume. Infosys plans to raise it to five per cent over the next three years, Murthy said. The new campus being built on 15 acres of land at a cost of $150 million will be the largest software development centre of Infosys outside India, he said.
The company, which has a staff of 3,200 in Shanghai at present, will employ at total of 10,000 professionals by the time the new campus becomes operational, Rangarajan Vellamore, chief executive officer of Infosys Technologies (China) Co., said during the ceremony, which was attended by Indian ambassador S.Jaishankar and Feng Guoqing, Communist Party leader at Shanghai Municipal Corporation.
The rising labor costs in Shanghai did not cause much worry to Infosys, which believed in paying high wages to attract the best talent, who can deliver high quality services to clients, Pai said at the press conference.
"We will use our enhanced capacity here to deliver high quality consulting and software services to the global markets as well as to our clients in China," Murthy said.
The campus will have facilities for software development, labs, data centers, training facilities, food courts, a 1,500-seater auditorium, gym, and other recreational facilities, he said.
Addressing a press conference after the foundation laying ceremony, Murthy suggested China needs companies like Infosys as much as they need the Chinese market.
"China has demonstrated an extraordinary pace of growth. Such growth cannot be sustained unless it is backed up by scalable, easily maintainable, easily available and easily usable information systems. That is where we believe that there is opportunity for us in China for us," he said.
Murthy was joined at the foundation laying ceremony and the press conference by Mohandas Pai, the Infosys board member who will be quitting the company.
"I am with the company till June 10. I will continue to work on the Shanghai project even after that. I will work on this project and a project in India for about a year," Pai told TOI on the sidelines of the ceremony. He did not wish to disclose future career plans at this stage.
The operations in China account for one to 1.5 per cent of the company's total business volume. Infosys plans to raise it to five per cent over the next three years, Murthy said. The new campus being built on 15 acres of land at a cost of $150 million will be the largest software development centre of Infosys outside India, he said.
The company, which has a staff of 3,200 in Shanghai at present, will employ at total of 10,000 professionals by the time the new campus becomes operational, Rangarajan Vellamore, chief executive officer of Infosys Technologies (China) Co., said during the ceremony, which was attended by Indian ambassador S.Jaishankar and Feng Guoqing, Communist Party leader at Shanghai Municipal Corporation.
The rising labor costs in Shanghai did not cause much worry to Infosys, which believed in paying high wages to attract the best talent, who can deliver high quality services to clients, Pai said at the press conference.
"We will use our enhanced capacity here to deliver high quality consulting and software services to the global markets as well as to our clients in China," Murthy said.
The campus will have facilities for software development, labs, data centers, training facilities, food courts, a 1,500-seater auditorium, gym, and other recreational facilities, he said.
Friday, May 20, 2011
Indian communication satellite GSAT-8 successfully launched
India's latest communication satellite GSAT-8 was today successfully launched by Arianespace from Kourou in French Guiana to give a boost to direct-to-home services in the country.
GSAT-8 was injected into space by European launcher Arianespace's Ariane 5 rocket which lifted-off at 02.08 am (IST), with Japan's ST-2 spacecraft as co-passenger.
French Guiana is a region of France on the North-East coast of South America.
Weighing 3,100 kg at lift-off, GSAT-8 is one of the heaviest and high-powered satellites built by the Bangalore-headquartered Indian Space Research Organisation (ISRO).
An ISRO team, which witnessed the launch, expressed delight over the successful mission.
"I am extremely happy to announce that ISRO's Master Control Facility at Hassan near Bangalore has confirmed the reception of signals from GSAT-8 and taken charge of the command and control of GSAT-8 immediately after its injection into the geo-stationary transfer orbit," ISRO chairman K Radhakrishnan said.
"This (the launch) is another great moment for u," he said.
Radhakrishnan said the user community in India was looking forward for the operationalisation of the 24 high-power Ku band transponders into the Indian National Satellite system.
ISRO officials said the launch was doubly gratifying as the space agency had lost two satellites last year in two unsuccessful GSLV missions launched from the home soil. ISRO was desperately looking to augment transponder capacity, which is in great demand.
Built by Japan’s Mitsubishi Electric Company, ST-2 would be operated by the ST-2 Satellite Ventures joint company of Singapore Telecommunications Ltd (SingTel) and Taiwan’s Chunghwa Telecom Company Ltd.
GSAT-8 carried 24 transponders to augment India’s Ku-band relay capabilities primarily for direct-to-home TV broadcast services with a coverage zone including the entire Indian subcontinent.
Additionally, GSAT-8 carried the two-channel GAGAN system for aircraft navigation assistance over Indian airspace and adjoining areas.
GSAT-8 was injected into space by European launcher Arianespace's Ariane 5 rocket which lifted-off at 02.08 am (IST), with Japan's ST-2 spacecraft as co-passenger.
French Guiana is a region of France on the North-East coast of South America.
Weighing 3,100 kg at lift-off, GSAT-8 is one of the heaviest and high-powered satellites built by the Bangalore-headquartered Indian Space Research Organisation (ISRO).
An ISRO team, which witnessed the launch, expressed delight over the successful mission.
"I am extremely happy to announce that ISRO's Master Control Facility at Hassan near Bangalore has confirmed the reception of signals from GSAT-8 and taken charge of the command and control of GSAT-8 immediately after its injection into the geo-stationary transfer orbit," ISRO chairman K Radhakrishnan said.
"This (the launch) is another great moment for u," he said.
Radhakrishnan said the user community in India was looking forward for the operationalisation of the 24 high-power Ku band transponders into the Indian National Satellite system.
ISRO officials said the launch was doubly gratifying as the space agency had lost two satellites last year in two unsuccessful GSLV missions launched from the home soil. ISRO was desperately looking to augment transponder capacity, which is in great demand.
Built by Japan’s Mitsubishi Electric Company, ST-2 would be operated by the ST-2 Satellite Ventures joint company of Singapore Telecommunications Ltd (SingTel) and Taiwan’s Chunghwa Telecom Company Ltd.
GSAT-8 carried 24 transponders to augment India’s Ku-band relay capabilities primarily for direct-to-home TV broadcast services with a coverage zone including the entire Indian subcontinent.
Additionally, GSAT-8 carried the two-channel GAGAN system for aircraft navigation assistance over Indian airspace and adjoining areas.
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