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PM’s I-Day vow:
more jobs
If oil PSUs
merge, retail petro prices may fall Oil price hike
deferred We are booming
without you, India tells Pak Insurers oppose
move of tax on premium
Transferring
individual a/c amount
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Inflation
concerns may weaken market
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PM’s I-Day vow: more jobs New Delhi, August 15 “The government will address this deficiency in the growth process by encouraging the growth of small and medium enterprises,
agro industry and sectors such as tourism, where there is a high job potential,” Dr Manmohan Singh said in his Independence Day speech. There is also an urgent need to provide employment in rural areas, especially in areas suffering from prolonged drought, he said. “The food-for-work programme will be an important part of our strategy to deal with this challenge. New investment in the infrastructure sector will also help generate new jobs,” he said. The Prime Minister said policies of higher economic growth and modernisation will be combined with an emphasis on social justice, communal harmony, rural development, regional balance and concern for the environment.
IT-enabling
Dr Manmohan Singh also said the government would improve broadband access and “enable the required investment in IT infrastructure.” “It is a matter of satisfaction today that IT is enabling us to improve the standard of living of ordinary people even in remote areas. We will continue to explore ways in which modern technology can improve the lives of ordinary people,” he said. The Prime Minister said that science and technology had become an important determinant of power and wealth. “For our country to attain its due place in the 21st century, it is necessary to integrate science and technology into all our development processes. The promotion of scientific temper must truly become a massive national movement,” he said.
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If oil PSUs merge, retail
petro prices may fall New Delhi, August 15 Union Minister of Petroleum and Natural Gas Minister Mani Shankar Aiyar had held a meeting with the CMDs of ONGC, IOC, HPCL and BPCL, and proposed the merger of HPCL, BPCL and Gail (India) Ltd. with ONGC and Oil India into Indian Oil Corporation (IOC). He has reportedly asked them to prepare detailed notes on the pros and cons of the merger before taking a final decision in this regard. The issue is likely to be raised by the opposition parties in the Parliament session, starting tomorrow. The sources said in view of the likely increase in the prices of petrol and diesel, the government has moved the idea of the merger. The Petroleum Ministry has estimated that the merger will result in a saving of over Rs 25,000 crore in the next 3-4 years. Since it will substantially cut down the cost of marketing, transportation and distribution of companies, the retail prices of petrol and diesel may come down by Rs 2-3 per litre, in addition to cutting down the subsidy bill on LPG and kerosene. Industry experts, however, say that the idea is not new. Since the oil companies are already contemplating to increase the prices of LPG and kerosene by Rs 4 per cylinder and 20 paise per litre, respectively, the government has raised this issue only to divert the attention of the public, claiming that the merger of oil companies would bring down the overlapping costs and retail prices. They point out that first the government should set up a regulator to watch the costs and prices of retail oil products. Official sources say that executives of small PSUs like HPCL and BPCL have also opposed the government move, pointing out that potential benefits may not translate into reality as the merger would also affect the efficiency of the oil companies. “The corporate culture of the BPCL and HPCL is quite different from that of the ONGC and IOC. Secondly, it is competition among public sector companies and threat from one another that has forced them to improve their efficiencies,” the executives have reportedly told the minister. But the ministry has pointed out, “Since the public sector oil companies are competing with one another in the domestic market for selling diesel and petrol and in the international market bidding against each other to grab a share in the oil exploration fields, the merger will bring down costs significantly.” Regarding competition, it points out that since Reliance and other private players would be major players in the retail market, the public sector companies will not find it easy to compete with them. The sources said the government has also plans to set apart about Rs 5,000 crore to fund the voluntary retirement scheme for the surplus staff following the merger. Further, the surplus real estate and assets could be sold off to private sector companies, which are planning to enter the retail marketing of petroleum products. It would also generate additional revenue to the government worth hundreds of crores of rupees.
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Oil price hike deferred
New Delhi, August 15 However, it is unclear when the OMCs will revise the prices for the next fortnight.
Highly placed sources said the oil companies had deferred the decision following the government assurance that it would come out with a fiscal incentives shortly as the 10 per cent price band was breached during the fortnight ending today. While prices of both diesel and petrol moved up further as compared to previous fortnight and even crossed the price band, oil companies approached the government for clearance under the new pricing scheme.
— UNI
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We are booming
without you, India tells Pak New Delhi, August 15 The Indian plain speaking came as a consequence of Pakistan’s reluctance to engage fully with the far-reaching and wide-ranging proposals which India made at these talks. The Indian Government’s belief is that if Pakistan had responded positively to these proposals, it would have consolidated the mutual economic relationship and helped create a habit of interaction and cooperation. The following proposals were made by India at August 11-12 Commerce Secretary-level talks in Islamabad to promote the bilateral political and economic cooperation: Trade promotion 2. The grant of transit facilities to each other’s goods on a reciprocal basis. Trade routes Business interactions 5. The participation in trade fairs/exhibitions. Other trade-related
measures Telecommunications 8. Facilitate counterpart arrangement between the mobile operators on the two sides. 9. The participation of Indian companies in telecom projects in Pakistan. Civil aviation 11. Allowing the designated carriers of Pakistan, seeking to have air connectivity with India, seven flights a week to one international airport and then seven more flights to a second international airport, on a reciprocal basis. Shipping services
Petroleum and natural
gas sector 14. Exchange of experience and exploitation of the commercial opportunities in the CNG sector. 15. Participation of Indian companies in exploration and production activities in Pakistan, both onshore and offshore. Customs Capital market Information
technology Postal services 20. Bringing out a joint commemorative stamp. 21. Exchange of philatelic exhibitions. Banking sector Agriculture sector Water resources |
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Insurers oppose move of tax on premium
New Delhi, August 15 Insurers, including Life Insurance Corporation, have given a representation to the regulator IRDA, which has taken up the matter with the Union Finance Ministry. The proposed service tax of 10 per cent and the education cess of 2 per cent would only increase the premium, as insurers would pass on the additional cost to the consumers, industry sources said. It would also make the calculation of premium more complex as the tax is on the savings portion of the premium and not on the risk component. Insurers said risk and savings components change every year, depending on the age of the person and the type of policy. Industry sources said it would be unfair to tax the existing policies, as consumers had bought policies based on the assumption that they would get rebate on their investment rather than being taxed.
— PTI
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by Lalit Batra Inflation concerns may weaken market High oil prices and worries over inflation continue to weigh down sentiment at the bourses. This put an end to the six-week gaining streak on the bourses, Sensex shed 94 points to settle at 5,102.92. Apprehensions with respect to high inflation and its impact on interest rates have forced investors to take a cautious approach towards equities. Though the hike in interest rates by the government should not derail growth prospects, it certainly has the potential to slow down the growth rate, as the corporate profitability would be affected. Oil and steel stocks lost ground last week due to high international crude prices and concerns that the government may reduce customs duty on steel. The inflationary situation for the economy warrants some concern in the near-term because of the fact that inflation has already touched 7.6 per cent and is yet to take into account the recent hike in steel and oil prices. Investors can still buy the equities on declines with a strict long-term perspective, though the market in the short run looks weak and may drift lower in the coming week. PSU banks Public sector banks have been on a roll, boosting their bottomline over the past three years through treasury profits. Now all that is set to change. With inflation spiralling to 7.6 per cent, the yield on sovereign will increase, thereby turning the treasury profits of the banks into treasury losses. According to banking sources, except a few like HDFC bank and IndusInd bank, most others continue to hold bulk of their gilt portfolio with tenor of over five years. Given the fact that most public sector banks had in past relied on treasury profits to boost bottomlines, the banks specially the public sector ones would report flat to the negative growth in their profits in the current fiscal. Due to this, the investors can book profit on their PSU bank holding bought over the past couple of years. |
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