New Delhi, September 14
Despite spurt in the prices of some food articles, inflation fell to a 17-month low of 3.52 per cent for the week ended September 1 as against 3.79 per cent in the previous week.

This is the third week in a row that inflation has remained below the four per cent mark. The wholesale price index-based inflation rate stood at 5.34 per cent in the corresponding week a year ago.

While minerals, fuels and some manufactured products were cheaper, prices of some food articles have risen by a whopping 17.7 per cent.

Despite the inflation rate remaining well within the RBI’s target level of 4-4.5 per cent for the medium term, the central bank is unlikely to ease the stringent monetary policy for the time being.

A clear indication to this has come from RBI governor Y V Reddy. In a speech delivered in Mexico City on Wednesday, Reddy said the central bank needed to continuously assess the risks from high and volatile oil prices, firmer food prices and uncertainties surrounding the demand-supply gaps present globally and in India.

Reddy further said risks from global developments continued to persist, especially in the form of inflationary pressures, the re-pricing of risks by financial markets and a downturn in some assess classes.

“I think, the RBI would pursue a wait and watch policy and tight monetary stance will not moderate immediately,” crisil principal economist D K Joshi said.

Although the food article group, as a whole, witnessed an increase during the week, prices of bajra, eggs, maize, moong, condiments and spices declined.

During the week, food articles declined by three per cent while moong, condiments and spices fell by one per cent each.

At the same time, some essential items like fruits shot up by 17 per cent, followed by fish marine by 9 per cent. Milk was up by one per cent.

Fuel, power, light and lubricant group declined by 0.1 per cent largely due to cheaper aviation turbine fuel, which fell by three per cent and furnace oil by one per cent.

During the week, prices of minerals dipped by 26 per cent, ochre by 19 per cent, vermiculite by eight per cent and fire clay by six per cent.

New Delhi, September 14
Within days of approving a price formula for gas to be produced by Reliance Industries, the government today said it will ask the Mukesh Ambani company to prioritise fuel sales to fertiliser plants, city gas and existing power plants.

"Government is well within its right to fix sectoral priorities keeping in mind the overall national interest. The Empowered Group of Ministers (EGoM) will in future meetings decide on which sectors should be given priority in allocation," petroleum secretary M.S. Srinivasan told PTI here.

The EGoM had on September 12 approved a price of Rs 172.20 per million British thermal unit for RIL's KG-D6 gas. This was 8.32 per cent lower than Rs 187.84 ($4.33) per mBtu price proposed by RIL.

Srinivasan said the price approved by the EGoM will apply uniformly to all sectors. "It should not matter to the producer (RIL) as to who uses the gas, as a uniform price will be charged from all." "The guiding principle for gas allocation would be the Integrated Energy Policy drawn by the Planning Commission," he said, adding that fertiliser plants running below capacity and on expensive alternative fuels should be given the first right.

Projects to sell CNG to automobiles and existing power plants will be prioritised in that order.

He, however, said that the government will not allow trading in gas. "The policy clearly states that the gas should be sold to end users and so there is no scope for traders." The government will examine all contracts to see they meet the policy parameter of "transparent, open, arms-length transaction between unrelated entities," he said.

Srinivasan said the approved price $4.20 per mBtu will save Rs 3,000-4,000 crore annually in fertiliser subsidy as it will replace costlier naphtha ($15.31 per mBtu), fuel oil ($9.36 dollars per mBtu) and LNG ($7.91 per mBtu) that are currently being used in fertiliser plants.

He said the RIL gas price was affordable for both fertiliser and power plants.

At a delivered price of $5 per mBtu, electricity generation cost comes to Rs 1.63 per unit and at $6 per mBtu it comes to Rs 1.95 a unit.

City gas projects involving supply of CNG to automobiles and piped gas to households and commercial establishment should also be given priority as it would cut pollution levels and reduce government's subsidy payout on domestic cooking gas (LPG).

Srinivasan said the price formula for RIL's KG-D6, which will start producing 40 million standard cubic meters per day of gas from July 2008, will be valid for five years till June 2013, after which it will be reviewed and fixed again. — PTI

New Delhi, September 14
The monopoly of the public sector Air India and Indian, now merged with the former, over the Gulf region came to an end today with the government in its earnest effort to open up the Indian civil aviation sector gave Jet Airways the rights to fly on those routes. Naresh Goyal-promoted Jet Airways thus became the first private sector airline to get the nod to fly to the lucrative region from January 1 next year.

As per the decision of the government, scheduled Indian private airlines were not permitted to operate international flights to and from Gulf till the end of 2007. The Gulf routes were served only by the Indian public carriers till then, an official statement said.

Jet Airways was granted traffic rights on the Gulf and West Asian routes at a meeting of the Directorate General of Civil Aviation yesterday evening, it said.

Jet has been permitted to carry 3,682 passengers to Kuwait per week from three destinations in India. Of the 3,682 seats, 1,582 would be from the Delhi-Kuwait route while an equal 1,050 on Trivandrum-Kuwait and Kochi-Kuwait routes, the statement said.

Besides, Jet can also fly 3,150 passengers to Oman per week on three routes Kochi-Muscat, Trivandrum-Muscat and Calicut-Muscat.

The airliner has been given permission to connect Calicut and Mumbai to Qatar's capital city Doha, where it can carry a maximum of 2,100 passengers per week.

Jet Airways had applied for traffic rights on the India-Gulf/West Asian routes on July 18 last and had asked for rights on routes to Kuwait, Oman, Qatar, Bahrain, Dubai and Abu Dhabi.

However, their request for grant of traffic rights on India-Dubai and India-Abu Dhabi routes is still under consideration. Incidentally, the total entitlement for Indian carriers on the Gulf routes at present is 85,481 seats per week of which 21950 are for Dubai, 7,420 for Abu Dhabi, 10,206 for Sharjah, 8,000 for Kuwait, 10,892 for Qatar, 7,546 for Oman, 10,967 for Bahrain and 8,500 for Saudi Arabia.

New Delhi, September 14
The Department of Telecom (DoT) has formed an internal panel to study TRAI’s recommendations on reforms in the licensing regime, which include views on capping the number of players, spectrum allocation and acquisitions.

Asked when would the DoT take a decision on TRAI’s recommendations, communications minister A Raja said: “very soon”, but declined to elaborate.

On GSM operators serving a legal notice to DoT over delay in allocating spectrum as per existing criteria, he said: “It is their right to send us notice. We will have a look at it.” Sources, however, said TRAI’s recommendations on spectrum allocation, especially for existing operators, may find favour with the government.

If DoT accepts TRAI’s recommendations, new applicants may have a chance to get the frequency to start services. This will not only introduce more competition in mobile telephony but would also bring new products and technology available in the developed world, they said.

However, the lobby of existing GSM players - COAI - has slammed TRAI’s recommendations, saying the regulator was not transparent on spectrum related issues as no consultations were followed as prescribed in the TRAI Act. — PTI

New Delhi, September 14
Anil Ambani-controlled Reliance Group (ADAG) has emerged as the biggest overseas borrower through external commercial borrowing’s (ECB), claiming the maximum pie of 20.7 per cent in financial year 2007, followed by the Tata Group and Reliance Industries Ltd (RIL), according to Assocham Eco Pulse (AEP).

According to an AEP study, the total ECB raised by companies in India increased substantially from $24.7 billion in financial year 2006 to $29 billion in 2007, recording growth rate of 16.4 per cent.

The Jindal Group was the fourth largest borrower, raising total ECB amounting to $0.54 billion.

Aditya Birla group and Videocon Limited raised $0.5 billion and $0.2 billion, respectively.

Foreign funds raising by the ADAG showed a remarkable growth rate of 249 per cent in the financial year 2007 over the last year. The sectoral bifurcation of the total ECB raised by the group was 52.4 per cent in projects, 14.4 per cent in rupee expenditure, 16.8 per cent in import of capital and 8.4 per cent in modernisation activities.

Jhorran (Ludhiana), September 14
Punjab is all set to lease out sugar mills in the state to the private companies under its terms and conditions. Disclosing this here today, minister for co-operation and defence, Capt Kanwaljeet, told The Tribune that this was being done to ensure maximum financial flow to these mills and at the same time enhance their production.

He said the cooperative and private partnership was the only way out to ensure the minimum purchase price of sugarcane fixed by state government to the farmers.

He, however, made it clear that the private players would have to accept the stipulations of the government only. He pointed out that in case the sugar mills were handed over to the private sector only the minimum rates of sugarcane fixed by the Government of India of Rs 75 per quintal could be provided to the farmers, which are much lower than that of the state government's Rs 135 per quintal.

He said the Punjab sugar mills at present were having very low crushing capacity, which was not viable and with the private partnership, the capacity of the mills would substantially be increased.

He said the state government was committed to protect the interests of the farmers and the Cooperative Department would provide the latest technologies and equipment for production and processing of crops and marketing at the national and international level to enhance their income.

He disclosed that a composite vegetables and fruits processing plant was being set up at focal point Ludhiana by Markfed at a cost of Rs 20 crore shortly.

Mumbai, September 14
FMCG major Hindustan Unilever (HUL) today said it has received shareholders’ approval for the proposed share buy back programme.

The shareholders, through postal ballot, authorised the board to purchase 25 per cent of the fully paid-up equity shares from the open market through the BSE and the NSE, HUL said.

The company has set aside Rs 630 crore to buy back up to 25 per cent of its stake at a price not exceeding Rs 230 per share.

Earlier, HUL chairman Harish Manwani said the company had Rs 2,261 crore net liquid funds, of which only about 25 per cent was set aside for the buyback.— PTI

Mumbai, September 14
Insurance major, Life Insurance Corporation (LIC), today declared a bonus of Rs 70 per Rs 1,000 assured under all life-time plans for FY'07, against Rs 66 in the previous fiscal.

Addressing reporters here, LIC chairman T.S. Vijayan said valuation surplus for FY'07 grew by 22 per cent at Rs 15,127.21 crore, against Rs 12,404.82 crore in FY'06.

He said 95 per cent of the surplus amounting to Rs 14,370.85 crore has been allocated to policyholders and the balance 5 per cent amounting to Rs 756.36 crore has been provided to the central government as its share.

The bonus for Jeevan Tarang policyholders for less than 20-year accumulation, has been increased to Rs 48 per Rs 1,000 assured from Rs 32 last fiscal.

Similarly, Jeevan Anurag policyholders with a term of more than 20 years, have been given a bonus of Rs 44 per thousand, compared to Rs 35 in FY'06.

For its micro-insurance plan, Jeevan Madhur, a bonus of Rs 25 for every Rs 1,000 assured has been declared for policies with a term of 11-15 years and Rs 20 per for policies with a term of 10 years or less. — PTI

Amritsar, September 14
US-based Berggruen Holdings Inc (BHI) has decided to invest $300 m in the next two years in India.

Announcing this, Kabir Kewalramani, founding adviser of BHI, said India has been a priority market for them in education, hospitality, car rental, equipment rental, IT/ITeS and real estate sectors.