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B U S I N E S S

FDI inflows swell to $11.4 billion
New Delhi, August 17
Foreign Direct Investment (FDI) inflows into India more than trebled to $11.4 billion in the first six months of 2007 with the FDI in the first quarter of the current fiscal registering 185 per cent increase to $4.9 billion.
During January-June 2007, FDI rose by 216 per cent compared to $3.6 billion in the corresponding period last year.

Inflation dips  to 4.05 pc
New Delhi, August 17
Cheaper food articles brought down the inflation to a six-week low of 4.05 per cent for the week ended August 4 as against 4.45 per cent in the previous week. 
The annual inflation rate was 5.08 per cent during the corresponding week last year.

PM’s panel clears RIL’s gas price 
New Delhi, August 17
The Prime Minister's Economic Advisory Council (EAC) has approved Reliance Industries' $4.33 per mBtu price of gas from KG-D6 fields, saying it was in line with industry practices and priority allocation to fertiliser and power sectors will have to be at market prices.

Government jobs lose charm
Fatter pay packets in private sector
New Delhi, August 17
India’s long march from an agriculture-dominated economy at the time of independence to become the world’s biggest back-office has taken the charm away from government jobs, with salaries in private sector higher by as much as two times.

SEBI, RBI differ on banning PNs
New Delhi, August 17
The Reserve Bank of India and stock market watchdog SEBI differ on the issue of banning participatory notes (PNs), with the banking regulator suggesting such instruments should not be permitted, the Lok Sabha was informed today.

Govt rejects probe into IPOs since ’99
New Delhi, August 17
The government has turned down a Parliamentary panel’s recommendation that a complete investigation of all IPOs floated since 1999 be carried out to detect any irregularities.

No terror outfit in stock market, says FM
New Delhi, August 17
The government today said there was no indication of "surreptitious" entry of terrorist outfits in the stock or real estate markets to meet their financial needs.



Kuchou-fuku CEO Hiroshi Ichigaya poses with fans from an "air-conditioned" jacket at the company's offices in Saitama Prefecture, northwest of Tokyo
Kuchou-fuku CEO Hiroshi Ichigaya poses with fans from an "air-conditioned" jacket at the company's offices in Saitama Prefecture, northwest of Tokyo, on Friday. Two small fans sewn into the back of each garment and powered by a pocket-sized rechargeable battery pack circulate air across the wearer's skin, evaporating perspiration. — Reuters

EARLIER STORIES

 
British deputy high commissioner Vicki Treadell inaugurates a new coffee chain as actors Vinod Khanna, Poonam Dhillon, Jimmy Shergil and Preeti Jhangiani look on, in Mumbai
British deputy high commissioner Vicki Treadell inaugurates a new coffee chain as actors Vinod Khanna, Poonam Dhillon, Jimmy Shergil and Preeti Jhangiani look on, in Mumbai on Friday. — PTI

I-T Dept moves SC
Ruling on taxing foreign firms 
New Delhi, August 17
The Income Tax Department has moved the Supreme Court against the ruling by a quasi-judicial body which held that foreign firms are not liable to pay tax on assignment amount charged from their Indian subsidiaries if contracts are signed outside the country.

Air India ad blitz 
 Mumbai, August 17
National carrier Air India has planned a Rs 20-crore advertising blitzkrieg over the next six months to showcase its non-stop flights from India to destinations in the United States. Launched July-end, the campaign presently revolves around the Mumbai-New York non-stop flight, for which the company has set up billboards at Times Square in New York and in Mumbai besides advertising in leading US newspapers and travel magazines. — PTI
President and CEO, Coca-Cola India, Atul Singh (left) and executive chairman and regional creative-south and south-east Asia, Prasoon Joshi unveil Coca-Cola's new communication initiative, 'Little Drops of Joy', in New Delhi
President and CEO, Coca-Cola India, Atul Singh (left) and executive chairman and regional creative-south and south-east Asia, Prasoon Joshi unveil Coca-Cola's new communication initiative, 'Little Drops of Joy', in New Delhi on Friday. Coca-Cola has adopted a five-pillar growth strategy in India which will focus on people, planet, portfolio, partners and performance. The company will also be expanding its product portfolio with plans to enter new segments. — AFP

Chinese Co to invest $400 m in India
Yinchuan, August 17
China's second largest aluminium maker Qingtongxia Aluminium Group will make the country's biggest investment so far in India by pumping in $400 million in a joint venture in Gujarat to produce alumina, senior Chinese officials said here today.

IBM not to exit Daksh
New Delhi, August 17
Putting to rest all speculations about IBM selling off its BPO business, Daksh, the global technology major has said that the company did not have any intention to exit Daksh.

Silver, gold decline
Mumbai, August 17
Both precious metals today declined with silver plunging by Rs 660 to a six weeks low of Rs 16,945 per kg and gold was down by Rs 105 to close at Rs 8,840 per ten gram on sustained heavy offloading by stock-holders coupled with bearish advice from global markets, traders at the Bombay Bullion Exchange said.

Motilal Oswal IPO soon
New Delhi, August 17
Brokerage firm Motilal Oswal Financial Services today said it will enter the capital market on August 20 with an issue of 29.82 lakh shares to raise upto Rs 240 crore through its initial public offer.
A businessman watches a financial news at a window of a security company headquarters in Tokyo on Friday. Japanese share prices plummeted over 5 per cent
A businessman watches a financial news at a window of a security company headquarters in Tokyo on Friday. Japanese share prices plummeted over 5 per cent on Friday, suffering the biggest one-day point drop since April 2000 as US housing worries battered Asian markets, dealers said. The Tokyo Stock Exchange's benchmark Nikkei-225 index of leading shares tumbled 874.81 points to end at 15,273.68, the lowest close since August 7, 2006.
 — AFP
 

Nokia files complaint against Qualcomm
Helsinki, August 17
Nokia Corporation today said it has filed a complaint with the US International Trade Commission alleging that chip set-maker Qualcomm has engaged in unfair trade practises by infringing on its patents. The Finnish company has asked the ITC to start an investigation and issue an order to bar imports to the USA of chip-sets and products that allegedly infringe on its patents, Nokia said.

Six infra industries' growth slows down
New Delhi, August 17
Decline in production of crude oil coupled with a slowdown in output of other products pulled back the growth of six key infrastructure industries to 5.3 per cent in June compared to 7.7 per cent a year ago. 

FIPB nod to ICICI’s 24 pc stake sale
New Delhi, August 17
The Foreign Investment Promotion Board (FIPB) today cleared divestment of 24 per cent stake by ICICI Bank into a holding company for its insurance venture.

 

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FDI inflows swell to $11.4 billion
Tribune News Service

New Delhi, August 17
Foreign Direct Investment (FDI) inflows into India more than trebled to $11.4 billion in the first six months of 2007 with the FDI in the first quarter of the current fiscal registering 185 per cent increase to $4.9 billion.

During January-June 2007, FDI rose by 216 per cent compared to $3.6 billion in the corresponding period last year.

“This is a huge jump. The most important thing is that there are largely fist-mile investments and are obviously going to grow in geometrical proportions,” commerce and industry minister Kamal Nath told newspersons today.

“India remains a favourite destination of FDI, despite what is going on in the stock market,” Nath said.

Major sectors receiving inflows in 2007-08 (up to May 2007) were services, telecom, electrical equipments, real estate and transportation.

Vodafone, the world’s biggest mobile operator, topped the list of foreign investors bringing in $801 million. It was followed by Matsushita Electric Works of Japan with $342 million. The British firm acquired controlling stake in the operator Hutch-Essar early this year, while the Japanese company bought Anchor Electricals. GA Global Investments Ltd was the third largest investor with $258 million.

The other top investors were Emaar Holdings, Mauritius ($204 million) and L B India Holdings Mauritius Ltd ($118 million) both in real estate sector.

Delhi regional office of the RBI registered inflows of $1.3 billion amounting to around 36 per cent of the total inflows during the year. Mumbai, Bangalore, Chennai and Hyderabad are the other major regions, which have received FDI inflows. These five regions constitute two-thirds of the total inflows received.

Major investment ($1.9 billion) during 2007-08 came from Mauritius and the other major countries investing are Japan, Cyprus, the USA and Singapore. Commerce minister said the country had received $15.7 billion FDI in 2006-07 as compared to $5.5 billion a year ago.

“This is a growth of 185 per cent as compared to the previous year. This is also the first time that FDI equity inflows into India have crossed the $10 billion mark,” Nath added.

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Inflation dips  to 4.05 pc
Tribune News Service

New Delhi, August 17
Cheaper food articles brought down the inflation to a six-week low of 4.05 per cent for the week ended August 4 as against 4.45 per cent in the previous week.

The annual inflation rate was 5.08 per cent during the corresponding week last year.

It is the ninth consecutive week that the annual inflation has been below 5 per cent and in the past two months the lowest figure was at 4.03 per cent during the week ended June 16.

The fuller impact of the RBI’s July 31 decision to increase the CRR to 7 per cent from 6.50 per cent on the inflation would be known in the next few weeks.

Though the inflation is well within the RBI’s target level of 5 per cent, analysts feel that there won’t be any fall in interest rate in the short term.

The wholesale price index (WPI) for all commodities for the week ended August 4 declined by 0.1 per cent to 213.1 from 213.4 for the previous week.

The index for the ‘Food Articles’ group declined by 0.7 per cent to 220.3 (provisional) from 221.8 for the previous week due to lower prices of fruits and vegetables and poultry chicken (5 per cent each), Ragi (3 per cent) and moong and fish-marine (1 per cent each), according to government data released here today.

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PM’s panel clears RIL’s gas price 

New Delhi, August 17
The Prime Minister's Economic Advisory Council (EAC) has approved Reliance Industries' $4.33 per mBtu price of gas from KG-D6 fields, saying it was in line with industry practices and priority allocation to fertiliser and power sectors will have to be at market prices.

EAC chairman C Rangarajan, who was asked by the Prime Minister to look into the price proposed by RIL, in his report said the formula was broadly in line with industry practices that use a mix of a base price and pass through of traded prices of competing fuels.

Sources said he, however, asked for doing away with US dollar linkage so as to remove the anomalies arising out of linkage to the currency exchange rate.

RIL's delivered price of $5.5 to $6.2 per million British thermal unit translated into an power generation cost of Rs 2.2-2.5 per unit. This is slightly higher than power generated through domestic coal (Rs 2-2.34 per unit) but lower than power produced from imported coal (Rs 2.75-2.9 per unit).

The price would also result in substantial savings in subsidy when fertiliser plants using more expensive naphtha, fuel oil and LNG switch over to RIL fuel, the report said.

EAC said as doubts had been raised on RIL's invitation of only power and fertiliser units along its Kakinada-Ahmedabad pipeline having a minimum consumption of one million standard cubic metres to participate in the bidding process, open bids may be invited from all consumers.

Sources said if refineries, steel plants and glass units, who burn expensive naphtha and fuel oil, are invited in the bidding process, the gas price would increase by at least one dollar per mBtu. — PTI

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Government jobs lose charm 
Fatter pay packets in private sector

New Delhi, August 17
India’s long march from an agriculture-dominated economy at the time of independence to become the world’s biggest back-office has taken the charm away from government jobs, with salaries in private sector higher by as much as two times.

According to data available with salary tracking firm PayScale, the median annual salary in a private sector company currently stands at Rs 5,65,214 compared to Rs 2,45,745 in the government entities.

The scenario is a far cry from those at the time of independence, when in early 1950s various government departments were established and public sector salaries used to be among the most attractive.

Yet, today wages for some of the highest government offices -- including the President of India and the Reserve Bank of India -- are lower than even mid-level executives at various private sector firms.

The initial salary of the President of India -- the constitutional head of the country -- was fixed at Rs 10,000 per month, which was considered to be among the highest for any office bearer at that time.

However, the President currently earns a monthly salary of just Rs 50,000, a level to which it was raised with effect from 1996, which pales in comparison to the lakhs being paid to senior level private sector executives.

Similarly, the RBI Governor used to get a monthly salary of about Rs 7,500 after independence, while the then secretary and treasurer of the Imperial Bank, now known as the State Bank of India, was paid Rs 4,000 a month. In contrast, the biggest of private sector firms paid a salary of just about Rs 5,000 to their general managers and managing directors making the government salaries much more attractive.

The situation has, however, reversed with CEOs in private sector banks earning in multiples of SBI chairman’s annual remuneration of about Rs 5,76,000 (about Rs 48,000 a month) last fiscal.

Even salaries of some mid-level call centre workers are currently in excess of Rs 50,000 a month -- higher than the monthly wage of chiefs of some public sector enterprises.

Global management consultancy firm Hay Group said in its World Pay Report that India’s top-level executives were taking annual salary of $92,750 (more than Rs 38 lakh).

Although salaries for top managers in India are currently lower than a number of countries, Hay Group said it might not remain so as the pay was increasing at double-digit rates in India - between 15-20 per cent.

Interestingly, average salary in public sector is also rising at a similar pace. The government said in its pre-budget economic survey released earlier this year that the per capita emoluments in public sector rose from Rs 493 in 1971 to Rs 23,056 in 2006. — PTI 

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SEBI, RBI differ on banning PNs

New Delhi, August 17
The Reserve Bank of India and stock market watchdog SEBI differ on the issue of banning participatory notes (PNs), with the banking regulator suggesting such instruments should not be permitted, the Lok Sabha was informed today.

"The Reserve Bank is of the opinion that PNs should not be permitted and accordingly it has suggested that no fresh issuance of PNs be allowed," minister of state for finance P K Bansal said in a written reply.

"However, the SEBI has not called for banning PNs," he added. Participatory Notes are instruments through which foreign investors trade in the country's equity and debt markets. Such instruments have raised concern in certain quarters as it is virtually impossible to find out who owns the money being invested in the markets.

Bansal said a government-appointed expert group, headed by then chief economic adviser Ashok Lahiri, had examined the issue of PNs and recommended that the current dispensation may continue, he said.

As per the SEBI Act, an FII may issue PNs with Indian instruments (equity, debt or derivative) as underlying securities, to a subscriber being a regulated entity. Further downstream issuance of PNs, if any, can also be done to regulated entities only, he said. — PTI

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Govt rejects probe into IPOs since ’99

New Delhi, August 17
The government has turned down a Parliamentary panel’s recommendation that a complete investigation of all IPOs floated since 1999 be carried out to detect any irregularities.

In a statement in the Lok Sabha, finance minister P. Chidambaram said the SEBI felt that its available resources and time would be better employed for finalising follow up actions and any probe is unlikely to throw up new names other than those already identified by the regulator.

After going through 105 public offers during 2003-05, the SEBI had found that irregularities were committed in 21 IPOs, but the Parliamentary Standing Committee recommended that a complete investigation of all IPOs floated since 1999 be undertaken to ascertain the exact number of IPOs where irregularities have taken place. The SEBI was of the view that no irregularities have come to light in public issues launched after its earlier probe and hence there was no need for a fresh one, Chidambaram said.

However, the government had accepted with modifications the committee's suggestion of reviewing the system of an integrated intermediary, he said, adding the development of integrated market intermediaries, providing a one-stop shop to investors for the various securities market dealings, is a positive development around the world. — PTI

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No terror outfit in stock market, says FM

New Delhi, August 17
The government today said there was no indication of "surreptitious" entry of terrorist outfits in the stock or real estate markets to meet their financial needs.

"The government have consulted the Securities and Exchange Board of India (SEBI) and Reserve Bank of India (RBI). The information available does not indicate any surreptitious entry into the stock or real estate market by terrorist outfits," finance minister P Chidambaram said in Lok Sabha today.

His statement assumes significance in view of national security adviser M K Narayanan's revelation in February that manipulation of stock exchanges is the new modus operandi used by terrorist groups to raise funds for their operations and fictitious companies have operated in the Mumbai and Chennai stock exchanges.

Narayanan had said some of these companies were later traced to terrorist groups.

"Isolated instances of terrorist outfits manipulating the stock markets to raise funds for their operations have been reported. Stock exchanges in Mumbai and Chennai have, on occasions, reported that fictitious or notional companies were engaging in stock market operations," he had said, addressing the 43rd conference on security policy in Munich. — PTI 

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I-T Dept moves SC
Ruling on taxing foreign firms 

New Delhi, August 17
The Income Tax Department has moved the Supreme Court against the ruling by a quasi-judicial body which held that foreign firms are not liable to pay tax on assignment amount charged from their Indian subsidiaries if contracts are signed outside the country.

The I-T Department challenged the decision of Authority of Advance Ruling (AAR) in a case concerning Swiss firm Honeywell Technologies SARL, which had received a fee from Honeywell Turbo India for supplying equipment to Tata Motors.

In its appeal, the department represented by solicitor general G E Vahanvati said the AAR ruling would have a snowballing effect as this could lead to similar innovations by foreign companies. This would deprive the Indian exchequer of legitimate taxes, it said.

A bench headed by Justice Ashok Bhan issued notice to Honeywell Technologies asking it to respond to the petition.

The AAR, on an application by the Swiss company, had early this year ruled that since the assignment contract with Honeywell Turbo was entered in Switzerland, the assignment amount was not covered under the Income Tax Act, 1961.

Honeywell group had entered into a pact with Telco (now Tata Motors) in September 2003 for supply of turbochargers for its passenger car. The group later transferred its rights and interests in the Indian business to its 100 per cent subsidiary Honeywell Turbo for 7.5 million euros. — PTI 

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Air India ad blitz 

 Mumbai, August 17
National carrier Air India has planned a Rs 20-crore advertising blitzkrieg over the next six months to showcase its non-stop flights from India to destinations in the United States. Launched July-end, the campaign presently revolves around the Mumbai-New York non-stop flight, for which the company has set up billboards at Times Square in New York and in Mumbai besides advertising in leading US newspapers and travel magazines.— PTI

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Chinese Co to invest $400 m in India

Yinchuan, August 17
China's second largest aluminium maker Qingtongxia Aluminium Group will make the country's biggest investment so far in India by pumping in $400 million in a joint venture in Gujarat to produce alumina, senior Chinese officials said here today.

"The Qingtongxia Aluminium Group's proposal to invest in India has received approval from the National Development Reform Commission (NDRC)," Vice Governor of Ningxia Hui Autonomous Region, Qi Tong-Sheng told PTI here.

Qi, also a senior member of the ruling Communist Party of China, said the NDRC, China's top planning body has approved the Chinese company's planned investment of $400 million in two phases in its joint venture with Mumbai-based Ashapura Minechem Co to produce alumina.

In the first phase, the 50:50 joint venture project plans to produce 500,000 tonnes of alumina which would be go up to one million tonnes.— PTI

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IBM not to exit Daksh

New Delhi, August 17
Putting to rest all speculations about IBM selling off its BPO business, Daksh, the global technology major has said that the company did not have any intention to exit Daksh.

"It is not true...," IBM India/south asia managing director Shanker Annaswamy told reporters here when asked about the various reports on IBM exiting Daksh.

IBM, in 2004, acquired Daksh which employs about 20,000 persons and has presence across 21 delivery centres across eight cities in India and the Philippines.

IBM India has a headcount of 53,000 persons as on December 2006 and clocked 45 per cent growth year-on-year in the second quarter of 2007. The strategic outsourcing business in India grew by about 150 per cent, Annaswamy said.

The company has won eight large and small services deals in the last six months, including a 10-year deal worth $600-800 million with telecom operator Idea. — PTI 

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Silver, gold decline

Mumbai, August 17
Both precious metals today declined with silver plunging by Rs 660 to a six weeks low of Rs 16,945 per kg and gold was down by Rs 105 to close at Rs 8,840 per ten gram on sustained heavy offloading by stock-holders coupled with bearish advice from global markets, traders at the Bombay Bullion Exchange said.

Silver (fineness) .999 fell below the Rs 17,600 barrier. Resuming at Rs 16,725 per kg on thin demand from industrial users, it drifted lower and closed at a six weeks low of Rs 16,945 per kg.

The white metal value had decreased by over Rs 900 in the last four sessions.

Traders attributed the bearish phase to sustained heavy offers by stockists in view of weaker advice from abroad and upcountry markets. — UNI 

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Motilal Oswal IPO soon

New Delhi, August 17
Brokerage firm Motilal Oswal Financial Services today said it will enter the capital market on August 20 with an issue of 29.82 lakh shares to raise upto Rs 240 crore through its initial public offer.

“The proceeds from the IPO would be spent on providing working capital, financing facility for broking customers, additional office space and technology advancement for the firm,” Motilal Oswal Financial Services CMD Motilal Oswal said. — PTI

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Nokia files complaint against Qualcomm

Helsinki, August 17
Nokia Corporation today said it has filed a complaint with the US International Trade Commission alleging that chip set-maker Qualcomm has engaged in unfair trade practises by infringing on its patents.

The Finnish company has asked the ITC to start an investigation and issue an order to bar imports to the USA of chip-sets and products that allegedly infringe on its patents, Nokia said.

“Qualcomm’s unfair trade practises, include importing product, selling products for importation, and/or selling products after importation, and inducing others to import products such as handsets, that infringe Nokia patented technology in certain Qualcomm GSM/ WCDMA and CMDA2000 chip-sets,” Nokia said. — AP

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Six infra industries' growth slows down

New Delhi, August 17
Decline in production of crude oil coupled with a slowdown in output of other products pulled back the growth of six key infrastructure industries to 5.3 per cent in June compared to 7.7 per cent a year ago.

The growth of the six infrastructure industries, which have a combined weight of 26.7 per cent in the Index of Industrial Production (IIP), during the April-June quarter was also slow at 6.9 per cent as against 7.4 per cent in the first quarter of 2006-07, according to government data released today.

Barring electricity, every other industry — petroleum, refinery products, coal, cement and finished steel — recorded a slow growth in June. The sixth industry — crude oil production — saw a decline in June by 1.8 per cent to stand at 27,74,000 tonnes compared to 28,26,000 tonnes a year ago. — PTI

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FIPB nod to ICICI’s 24 pc stake sale

New Delhi, August 17
The Foreign Investment Promotion Board (FIPB) today cleared divestment of 24 per cent stake by ICICI Bank into a holding company for its insurance venture.

The board had earlier, on June 22, rejected the bank’s proposal to divest 24 per cent stake in ICICI Financial Services, the holding company for insurance business. 
It had rejected the bank’s proposal on the ground that 2(g)(i) of the Insurance Regulation and Development Regulation (IRDA) does not allow a subsidiary company to be a promoter of insurance business.

Also approved by the board, under the finance ministry, were the four bids for five per cent stake in the Delhi Stock Exchange. 
The Standard Chartered Bank’s proposal to pick 49 per cent stake in UTI Securities from the Securities Trading Corporation of India also came before the board. — UNI

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BRIEFLY

Visa Steel
Mumbai, August 17
Visa Steel today said it has entered into a joint venture with China-based Baosteel Trading Company and Switzerland’s Visa Comtrade to set up a ferro chrome plant in Orissa at an investment of Rs 260 crore. VISA Steel along with Baosteel Trading and VISA Comtrade, would set up a 1,00,000 TPA ferro chrome plant in Orissa through a JV company - Visa Bao Ltd, the steel maker said. — PTI

VSNL service
New York, August 17
VSNL will start offering from August 21 a new facility, which will allow people of south Asian origin in the USA to make calls to their country using its prepaid service without obtaining the calling cards. This new service, ‘Trueroots International Calling Service’, will compete with the several other providers including RCom. — PTI

Renuka Sugars
Mumbai, August 17

Shree Renuka Sugars today said it will set up a wholly-owned subsidiary in Sharjah International Free Zone (SAIF Zone). The board of directors at its meeting held on Tuesday approved the setting up of the 100 per cent subsidiary in the SAIF Zone - Shree Renuka Biofuels holdings FZE, the company said in a filing to the Bombay Stock Exchange. — PTI

Jindal contract
Mumbai, August 17

Siemens Ltd today said it has bagged an order from Jindal Stainless (JSL) to carry out installation related work for latter's greenfield plant in Orissa. The company has bagged the order along with Siemens VAI, a division of the Siemens Group Industrial Solutions and Services (I&S), Siemens Ltd said in a communique to the BSE. However, it did not divulge any financial details.— PTI

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