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Mom and pop stores
Interest rates show signs of softening
India woos NRIs, Americans
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Plan panel for national policy on micro-finance
PepsiCo’s initiative on waste management
RBI targets inflation at 3 pc
Eli Lilly sues Sun Pharma
ONGC to invest $150 m in Myanmar
No licence requests after Oct 1: DoT
B’desh for cut in bilateral telecom tariffs
India skips IPI pipeline talks
Govt to mop up Rs 59,000 cr
ICICI to expand in Lanka
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The issue is large versus small, says Nath
New York, September 24 “It is not (about allowing) FDI, the issue is that of large versus small retailers,” Commerce and Industry Minister Kamal Nath said at the first ‘Pravasi Bharatiya Divas New York 2007’, last evening while replying to a question on when India would open up its over $330-billion retail market to foreign investments. His comments ring the alarm bells for Indian corporate retail players, who are already being shackled across states. Last month, the Uttar Pradesh government ordered the closure of corporate-run food retail stores citing law and order problems, while Kerala has not permitted opening of western-style food retail stores in the state. Asked if this meant large retailers would have to be prepared to close shop anytime the government feels like, Nath said: “That is not under my ministry. Ask the Consumer Affairs Ministry.” While this is so, India oddly ranked World No.1 in the AT Kearney Global Retail Index 2006. Organised retailers account for roughly 3 per cent of the retail market, with the rest made up of mom and pop outlets and neighbourhood ‘kirana’ (grocery) stores. He said the government wants to promote only incremental growth in the retail sector, but did not elaborate how it would find out the number of small retailers that have been displaced by big corporates. “This is a very contentious issue.” The Minister, however, said foreign investors were free to put their money for creating logistics or providing back-end operations an area where the government allows 100 per cent FDI. Industry estimates suggest that over the next four years, organised retail in India will receive investments in excess of $25 billion from domestic and foreign players, taking the size of organised retail to $75 billion. He said he had informed US retail giant Wal-Mart that they would get more B2B for their back-end operations in India than retail customers in most other countries where they operate. Wal-Mart has joined hands with Indian conglomerate Bharti Enterprises for the latter’s retail venture. Nath also humbly asked foreign investors to bear with the government if there were any delays in clearing investment proposals, as it was facing most situations for the first time. Case in point: The five-billion dollar Citigroup, Blackstone, IDFC and IIFCL fund for financing infrastructure projects. “Citigroup and Blackstone came to us and said they want to set up this fund, we said yes. But then there was no system in place for such a fund (which had to then be created),” the minister explained. — PTI
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Interest rates show signs of softening
Mumbai, September 24 Even while pressure is mounting from the banking fraternity on the RBI to lower interest rates, some of the banks with access to funds globally have begun to reduce interest rates. Today, HDFC announced a 50 basis points reduction in floating housing loan rates. According to an HDFC spokesperson, the new rates came into effect with immediate effect. "This reduction will be on fresh loans and applicable to all disbursements up to October 31," the bank said. However, there is no change in the fixed home loans rate, which remains at 13.25 per cent. Earlier, HDFC chairman Deepak Parekh had said funding costs have come down following market conditions internationally. According to analysts, more banks and finance companies would reduce interest rates on housing loans in the coming days. This move, it is felt, would spur the housing sector which is seeing a slowdown for the past several months. ICICI Bank has gone on to reduce interest rates on other categories of loans as well. Today, the bank announced a floating rate repayment for auto and equipment loans from this month. The floating rate has been pegged at 50 basis points lower than the fixed rate loans. The floating rate loans would be provided for various categories like car loans, commercial vehicles loans, construction equipment loans and professional equipment loans. ICICI Bank said the floating rate is linked to the floating reference rate (FRR), the benchmark used by the bank for pricing floating rate loans to its retail customers, the bank said here. Analysts here feel that the RBI may have to at least hold on to its interest rates if not lower it further following the fall in inflation. It is felt that the different in interest rates in India and the global markets are too high to be sustainable. Among those pushing for lowering of interest rates include ICICI Bank managing director K.V. Kamath, who is actively lobbying for such a measure. Kamath has warned that the country's economic growth would fall sharply if interest rates did not soften. |
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India woos NRIs, Americans
New York, September 24 While the country's capacity to consume $475 billion in infrastructure development over the next five years has been well articulated, external affairs minister Pranab Mukherjee and commerce and industry minister Kamal Nath highlighted the investment opportunities at separate events as part of the Incredible India@60 week. "New York was not chosen by accident for organising this event. It was a deliberate choice. It is the heart of the US and melting pot of diverse cultures," Mukherjee said, launching the four-day event, which he dubbed as an outstanding endeavour to highlight opportunities for trade, investment and tourism. At the Pravasi Bharatiya Divas New York 2007 last evening, Nath said quoting a study: "75 per cent of all foreign direct investments in India were profitable and 15 per cent were breaking even." While this establishes the fact that investing in India is profitable, he said the country needed to grow in technology-based manufacturing unlike China that is into mass manufacturing. Earlier, minister of overseas Indian affairs Vayalar Ravi said the role of the diaspora has been much less than the potential. "Last year, the remittances from overseas Indians touched $23 billion," but more could be done, he said, adding that investments have to be on long-term basis.
— PTI |
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Plan panel for national policy on micro-finance
New Delhi, September 24 In a report on strengthening the micro-finance sector, the commission pointed out that there is an urgent need for such a policy wherein efforts by various agencies and service providers are in unison and help evolve a coordinated strategy for faster and smoother growth of the sector. “At present, both the government and the private agencies involved in micro-finance have devised their own individual strategies in furtherance of their goals. The absence of a comprehensive national level policy has hindered the orderly growth of the sector,” the report said. As such the government should prepare a model bill on money lending and direct state governments to enact similar legislations to facilitate the expansion of micro-finance. The Centre could take inputs from the model bill prepared by a technical group for review of legislations on money lending, which was constituted by the Reserve Bank. The bill should look at allowing micro-finance institutions (MFI) to mobilise savings from their members under a regulatory framework monitored by NABARD. Micro-finance is generally provided in the form of loans by NGOs, help groups and other entities to those who do not have direct access to banks.
— PTI |
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PepsiCo’s initiative on waste management
Chandigarh, September 24 The project was initiated in 2005 as a part of the company’s initiative to reduce and recycle solid waste, which is one of the four planks of "Performance with Purpose". The programme involves creation of infrastructure, usage of superior grade compost, recycling of plastic and steel waste, road cleaning, street beautification, sanitation awareness programmes and sapling plantation
programmes.
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New Delhi, September 24 “We are not worried about inflation,” RBI governor Y V Reddy said in an interview to the BBC yesterday, adding the central bank is looking at a medium term objective of 4-4.5 per cent and ideally toward 3 per cent. Stating that inflationary expectations were quite benign now, he said: “We have to be concerned about the developments on the inflation front: that is our main responsibility.” Referring to the impact of recent interest rate cut by the US Federal Reserve, Reddy said it would be used as a “relevant input” into the ongoing analysis of economic and monetary developments. The RBI is slated to announce mid-term review of the annual credit and monetary policy on October 30. Pointing out that India is essentially a domestic economy-dominated system, he said: “Our major considerations relate to domestic developments. But naturally, since we’are increasingly getting integrated with the rest of the world, increasing weight is given to global developments, in particular developments in the USA.” Replying to questions on the impact of slowdown in the US economy, he said: “We are not likely to be significantly affected by any unwinding of these imbalances. So overall, therefore, I will say..., there will be some impact, but the impact is likely to be less than most other emerging market economies.” — PTI
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Washington, September 24 Sun is seeking USFDA approval to sell a generic version of the drug. In a complaint filed on September 20 in federal court in Detroit, Lilly asked that FDA approval be blocked until the patent expires in 2017. — Bloomberg
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ONGC to invest $150 m in Myanmar
New Delhi, September 24 The Myanmar government has awarded 100 per cent participating interest for three deep-water exploration blocks: AD-2, AD-3 & AD-9 to ONGC Videsh Ltd, the overseas investment arm of ONGC. The blocks AD2, A3 and AD3 extend over an area of 8,100 sq km, 9,900 sq km and 7,800 sq km respectively with water-depths of 1,500 to 3,000 metres in the Rakhine coast in Myanmar. The exploration period spread over four phases extends up to five years for AD2; and seven years for AD3 and AD9. Upon discovery of oil and gas, development and production operations shall spread over a period of 20 years. ONGC has said all three blocks off the Arakan coast have good hydrocarbon potential as they are close to the A-1 and A-3 shallow water blocks where ONGC Videsh is part of the consortium, which has found gas. ONGC owns 20 per cent of each of the A-1 and A-3 blocks, while GAIL (India) Ltd has 10 per cent of the two assets. Prior to the signing of the production sharing contracts, Murli Deora, minister of petroleum and natural gas, and Brig Gen Lun Thi, minister of energy, Myanmar, held wide ranging bilateral discussions on cooperation between the two countries in hydrocarbon sector. They also reviewed the progress achieved so far. Attempts are being made to acquire oil and gas assets in Myanmar. Currently, total oil and gas production of Myanmar is about 10,000 barrel oil per day and 820 million standard cubic feet per day respectively. The total oil and gas reserves are estimated at 50 million barrel and 10 trillion cubic feet respectively. |
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No licence requests after Oct 1: DoT
New Delhi, September 24 “It has been decided that new applications for unified (telecom) access services (UAS) licenses will not be accepted by the Department of Telecom after October 1 till further orders,” an official statement said. The DoT said within the next 10 days a decision would be taken on recommendations given by TRAI with regard to capping the number of players in each circle and also on the allocation of additional spectrum. The department has received over 160 applications for UAS licenses and in view of limited availabity of spectrum, it may not be possible for the DoT to entertain most of them. New applicants include realty majors Parsavnath Developers and Unitech, HFCL, Reliance Communications and Essar among others. On the other hand, the Cellular Operators Association of India (COAI), a lobby of existing private GSM mobile operators, has served a legal notice to the DoT for delay in allocating spectrum to existing players like Bharti Airtel, Vodafone-Essar and Idea Cellular based on notified criteria. The DoT is also negotiating with the ministry of defence for vacating additional spectrum of up to 45 MHz to entertain requests from the existing players as well as new aspirants.
— PTI |
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B’desh for cut in bilateral telecom tariffs
The Bangladesh government is looking to backtrack on its proposal to lower region-wide telecom tariffs for Saarc countries, as it now favours a reduction in bilateral telecom tariffs citing uneven telecom infrastructure among the eight member states.
The preliminary cut in bilateral telecom tariff rates are reported to be 25 to 30 per cent, according to a news report published on Monday. A report in The Daily Star newspaper here quotes foreign ministry officials to say Dhaka has concluded that region-wide cuts in telecom tariff rates are untenable at this stage as differences in the level of privatisation and quality of service among member states has created an 'uneven negotiating position'. One of the most vocal supporters of the beleaguered regional body, Bangladesh had proposed for the Saarc-based cuts during the 14th Saarc Summit in April, but have back-flipped on their earlier position after its own state-owned telecom operator, BTTB, expressed concerns over possible loss of revenue. The BTTB has agreements with four Indian telecom companies — VSNL, BSNL, Reliance and Bharti — to carry its phone calls in India, while it has separate deals with a company each from Pakistan, Sri Lanka and Nepal. |
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India skips IPI pipeline talks
New Delhi, September 24 A senior petroleum ministry official said significant bilateral issues have to be resolved first before India can begin discussions on contractual issues on the platform. The official said India had communicated its decision not to attend the tri-nation talks until bilateral issues between New Delhi and Islamabad were resolved. India and Pakistan have reached a broad understanding on the transit fee to be paid to Islamabad for bringing natural gas through the 1,035-km pipeline in Pakistan, but the two neighbours have yet to reach an agreement on the issue. |
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Govt to mop up Rs 59,000 cr
New Delhi, September 24 As the government has already raised Rs 97,000 crore in the first half, the total market borrowing will stand at Rs 1,56,000 crore this fiscal. The government will issue four different dated securities in October and November each and two in December, January and February each. It will mop up Rs 18,000 crore in October, Rs 15,000 crore in November, Rs 7,000 crore in December, Rs 10,000 crore in January and Rs 9,000 crore in February.
— PTI |
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ICICI to expand in Lanka
Colombo, September 24 "Besides looking at providing financial assistance to Indian corporates who have set up business in Sri Lanka, we are keen in becoming a major player in the retail sector," the bank's deputy managing director Chanda Kochhar told reporters here. Kochhar, who was in Colombo last week to address the 19th Anniversary Convention of the Association of Professional Bankers (APB), said the bank will not merely focus on the Indian expatriate community for widening its activities in the country. Kochhar, after reviewing the bank's local operations and holding discussions about its future expansion plans in the country with the experts, said the per capita income in Sri Lanka was rising with new investments opportunities coming up. "This is one of the main reasons for the ICICI bank in India to plan expansion in Sri Lanka", she said. Kochhar, who is ranked 37th on Fortunes list of Most Powerful Women in Business, said the business environment in Sri Lanka was "quite comfortable". "The banking regulations too are in line with other countries in the region," she said, adding though the bank has only one branch here there were plans to increase the branch network along with infusion of new technology. "We are also looking at introducing products in Sri Lanka targeting this market," she said. Kochar attributed the bank's success to introduction of new technology. As on June 30, the ICICI group had an asset base of $88 billion besides a market capitalisation of $20 billion. Among other things, she identified introduction of Smart Card system in Sri Lanka as a focus area under which printed identification may not needed to undertake transactions in the future. Describing the bank's performance during the 20 months of its in the country as satisfactory Kochar said, said the bank was not looking at overnight growth. "We are not looking to grow overnight. It would be a steady growth", she said. ICICI Bank’ss international presence currently spans 18 countries and includes three wholly-owned subsidiaries in the UK, Russia and Canada, offshore banking units in Singapore and Bahrain, an advisory branch in DIFC, Dubai. It also has branches in Hong Kong and Belgium and representative offices in the US, China, United Arab Emirates, Bangladesh, South Africa, Indonesia, Thailand and Malaysia.—PTI |
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