New Delhi, November 23
Noting that India largely remains unaffected by the global turbulence in financial markets due to US sub-prime crisis, Finance Minister P Chidambaram today said that there could be, however, some moderation in exports demand.

He also expressed the hope that the country would manage the massive capital inflows that has resulted in rupee appreciating by over 10 per cent this year, hurting the interests of exporters.

“The fall of this (sub-prime) crisis is that there could be some moderation in exports demand from India,” Finance Minister P Chidambaram said at a CII function held to welcome Iceland business delegation here.

The Finance Minister said fortunately India remains largely insulated from the global turbulence caused by US sub-prime mortgage crisis.

“We cannot afford shocks and major turbulences in our markets, so we are cautious and calibrated in opening up the capital and financial markets. But we have set the course to open up our markets,” he added.

On massive capital flow into the country, the Finance Minister said, “In the last few months, we had to cope with the rush of capital inflows in India. We are confident that we will gain mastery in this aspect.” Huge capital inflow has pushed up the rupee by over 10 per cent this year, hurting exporters. The export growth has more than halved since last year. Exports for April-September period this year increased to 72.28 billion dollar from 60.98 billion dollar in the same months last year, showing a growth of 18.52 per cent.

Textiles Minister Shankersinh Vaghela had recently said that about 10 lakh workers in textile and apparel sector are expected to lose jobs as the grim situation faced by the industry on export front continues due to a strong rupee.

Hit by the appreciating rupee, textile exporters had recently met Chidambaram and asked for more packages.

The Finance Ministry has already announced some relief measures for exporters, aggregating to Rs 5,000-5,500 crore first in July and then in October. — PTI

New Delhi, November 23
SEBI today cautioned Asian economies about the possibility of volatility in their markets due to decisions of “certain categories of investors from matured markets”, a trend faced by India and other countries in the region of late.

“There are certain categories of investors from the matured markets, where returns are not as good as in the past... So for greener pastures they have landed in our backyards because our markets give them good returns... They will abandon our markets if they (markets) don’t give them good returns... This will lead to volatility in our markets,” SEBI Chairman M Damodaran said.

At a conference organised by the Asian Securities Analysts Federation, Damodaran said market regulators cannot have knee-jerk reactions to the developments in the markets and will have to make rules and principle-based regulations to avoid any systemic risks. His remarks assume importance since India and other Asian countries have been witnessing increasing volatility in the markets of late.

Market analysts attributed the behaviour to developments in the US and hardening of crude oil prices.

Had the Asian markets been more integrated with global markets, the impact of happenings elsewhere would have been more, Damodaran said.

He said India and China, cannot gloat over the fact that their economies are growing fast and must put in place risk management systems to see that markets function in orderly and sustainable manner. — PTI

New Delhi, November 23
The government today approved 22 foreign direct investment (FDI) proposals entailing an inflow of Rs 511.5 crore, including that of World Bank’s private sector arm IFC and global private equity player Goldman Sachs.

International Finance Corporation will take up 18 per cent stake in domestic stocks and commodities brokerage firm Angel Infin Pvt Ltd for Rs 152 crore. US-based Goldman Sachs and Australia’s Macquarie will pick 40 per cent stake in PTC India Financial Services Ltd, a non-banking financial arm of power trading firm PTC India Ltd, for Rs 155.74 crore.

The proposals were cleared by Finance Minister P Chidambaram on the recommendations of Foreign Investment Promotion Board (FIPB), an official statement said.

“The equity investment will support Angel Infin, based in Mumbai, to expand its operations to Tier II and III cities in India and introduce new products,” official sources said.

However, a proposal of Flemingo to open duty-free shops outside airports and in hotels has been rejected. A proposal of leading retailer Dolce & Gabbana to set up a joint venture with 51 per cent stake to undertake single brand retailing of fashion and lifestyle products has been put on hold.

FIPB has also deferred a decision on the proposal of Russia’s Sistema Joint Stock Financial Corp to increase its stake from 10 per cent to 74 per cent in a telecom firm.

Chidambaram approved a proposal of Central Depository Services Ltd to sell 5 per cent stake to Croupier Prive Private Equity Ltd for Rs 16 crore, and Finland’s UPM Kymmene to set up a joint venture for trading of recycled paper.

However, a proposal of Bycell Telecommunications to start GSM-based cellular services across the country was deferred.— PTI

New Delhi, November 23
The rate of inflation declined to 3.01 per cent, thanks in large measure to the easing prices of vegetables and pulses. The data, however, does not reflect the hardening in crude oil prices which has nearly touched $100 a barrel.

The WPI-based inflation for the week ended November 10 is the second data since the Reserve Bank of India announced measures to absorb excess liquidity from the system on October 30.

The rate of inflation for the previous week stood at 3.11 per cent. Just a year go the rate of inflation was 5.39 per cent.

Analysts said the price of crude oil, which has virtually doubled in the last year, has not impacted the rate of inflation as the government is yet to take a decision on passing on the hike to the consumers. For the time being any increase in the domestic price of petrol and diesel has been put on hold following the directive of UPA chairperson Sonia Gandhi.

Parliament has been informed that the prices of essential commodities have gone up by as much as 25 per cent over the last one year.

Analysts said the inflation is hovering around three per cent, due to strong monetary measures taken by the RBI to contain capital flows and further rupee appreciation.Foreign Institutional Investors have so far invested over $18 billion this year in the stock markets.The rupee has also appreciated by over 12 per cent against the dollar, adversely affecting the exporters, while leading to cheaper flow of imported goods in the country.

Analysts have warned that further firming up of crude oil, food products and metals in the global market, coupled with lingering fears of US recession could lead to rise in inflation rate in the coming months. 

New Delhi, November 23
Dragged to courts by stock exchanges, Central Information Commission (CIC) now wants the Supreme Court to resolve whether bourses can be brought under the purview of the Right to Information (RTI) Act or not.

“One case is in the Bombay High Court and one case is in the Delhi High Court (over the issue of bringing bourses under the transparency legislation). We are now moving to get those cases transferred to the Supreme Court,” Chief Information Commissioner Wajahat Habibullah said.

The Commission, in response to RTI applications, held in September that stock exchanges are ‘public authority’ within the meaning of the RTI Act 2005 and would have to comply with the provisions of the transparency legislation.

The decision, however, did not go down well with the Bombay Stock Exchange and National Stock Exchange, which in separate petitions challenged it in the Bombay High Court and Delhi High Court, respectively. — PTI

Guwahati, November 23
Wagah border trade point will be the hub of activities as the Central government strives to increase the annual export volume of tea to Pakistan to 30 million kg in the next five years.

Raising the curtains on the three-day ‘Great Indian Tea Party’ or the India International Tea Convention 2007 (IITC 07), here yesterday union minister of state for commerce Jairam Ramesh asked the tea industry to shed its ‘country club’ culture and resort to ‘McDonald type’ aggressive marketing and re-orient its export strategy.

He said capturing the neighbouring large tea market in Pakistan and improved presence in traditional global markets like Russia and exploring new markets should form the core of the export strategy. The union government is in constant touch with Pakistani tea buyers associations to increase the volume of export to Pakistan, one of the world largest tea importers.

“We are adopting new strategy to increase the volume of tea export to Pakistan through Wagah border point. We intend to increase the annual export volume to Pakistan to about 30 million kg from the present 10 million kg,” Ramesh said raising an alarm that this year Indian tea will face tougher challenge in global market because of good crop in Kenya. 

New Delhi, November 23
The Centre has raised Rs 51,600 crore from disinvestment of equity in the Central Public Sector Enterprises (CPSEs) and strategic sale of state-owned companies since the inception of the policy in 1991.

“The total realisation from the strategic sale transactions was Rs 6,344.35 crore, which is around one-tenth of the total amount of Rs 51,608.8 crore, raised from disinvestment till July 31, 2007,” said the White Paper on Disinvestment of CPSEs tabled in Parliament today.

The paper further pointed out that the market capitalisation of the 40 CPSEs, whose shares are listed and traded on stock exchanges, was Rs 7.76 lakh crore as on July 31, with the ONGC leading the chart with almost Rs 2 lakh crore.

The other CPSEs with high market capitalisation are NTPC (Rs 1.37 lakh crore), BHEL (Rs 84,770 crore), SAIL (Rs 61,976 crore) and IOC (Rs 48,039 crore).

As regards realisation, the paper said bulk of the receipts amounting to Rs 33,543.56 crore came from sale of minority shareholding in the state-owned companies.

The realisation from strategic sale of companies was Rs 6,344.35 crore, while sale of residual stake in CPSEs yielded Rs 6,398.27 crore to the exchequer.

The proposed strategic sale of 13 CPSEs, including Nalco, STC, HPCL, Shipping Corporation and National Fertilisers was called off in 2005 by the UPA government in pursuance of the National Common Minimum Programme (NCMP), the paper said.

The other CPSEs which were on the block included MOIL, Sponge Iron, NBCC, RCFL, EIL, Balmer Lawrie, EPIL, and Hindustan Paper Corporation.

During the current financial year, the White Paper said, the government realised Rs 2,366.94 crore from sale of residual 10.27 per cent shares in the Maruti Udyogh Limited (MUL). — PTI

New Delhi, November 23
Facing a roadblock in its massive expansion plans amidst Finnish firm Nokia Siemens Networks (NSN) not accepting orders for 9.63 million GSM lines, Bharat Sanchar Nigam Ltd (BSNL) today said the option for fresh tender for these lines is still open.

According to the tender rules, BSNL had to order 40 per cent of the total 22.75 million GSM lines to the second lowest bidder (in this case NSN) if it agreed to match the price of Ericsson.

“We are considering various options as Nokia Siemens has not given an unconditional acceptance. We are in talks with Swedish network major Ericsson and Nortel Corporation to give them the Nokia’s order as well as negotiating with Nokia Siemens,” BSNL’s chairman and managing director Kuldeep Goyal said here.

The deal with NSN is in trouble as it is reluctant to match Ericcson’s $91 per line price as it had originally quoted $177 per line in its bid.

Last week, following BSNL’s ultimatum, the NSN had submitted a proposal to provide the PSU with 9.63 million GSM lines.

Goyal further said another option is through add-on basis, which will be provided through existing local partners in various zones, subject to refusal by both Nokia Siemens and Ericsson.

“If any of these options do not fructify, the company plans to go for a fresh tender without scrapping earlier orders,” Goyal said.

He said a separate order for 9 million lines would be placed by November-end with a consortium of Alcatel-Lucent and state-run telecoms equipment maker ITI.

BSNL had floated $2 billion plus tender for 22.75 million GSM lines, a crucial move for the company’s expansion.

Ericsson, which had emerged as the lowest bidder, was to supply 60 per cent of the contract, with the tender conditions stipulating that the second lowest bidder (NSN) supply the remaining 40 per cent or 9.63 million lines. — UNI 

New Delhi, November 23
A Ficci industry delegation yesterday met Revenue Secretary P. V. Bhide, and impressed upon him the need to reduce corporate tax and personal income tax rate to 25 per cent, abolish Dividend Distribution Tax and Minimum Alternative Tax, introduce incentives for ‘sunrise industries’ and revive tax holiday for multiplexes and telecom services.

For the development of infrastructure and other vital industrial undertakings, the Revenue Secretary was urged to grant ‘infrastructure” status to cold chain establishments and tax benefit provided to them under section 80IA. Likewise, with a view to attracting investments in the healthcare sector, it was imperative to grant ‘infrastructure” status to the healthcare industry.

The meeting was part of the pre-budget consultation process initiated by the Finance Ministry with the Industry Chambers. The Ficci delegation was led by its Secretary General Amit Mitra.

Further, the levy of service tax, it was pointed out, was a step backward in luring foreign oil giants and would discourage oil companies who have shown interest to participate in the future NELP bidding. It was submitted that service tax on E&P activities be abolished.

Further, it was suggested that the Centre might consider inclusion of natural gas in the list of “declared” goods as provided under section 14 of the Central Sales Tax Act.

Ficci expressed the view that a Technology Upgradation Fund for paper industry, on the lines for textile industry was essential for healthy growth and development of industry as also to meet the growing domestic demand for paper products in the country.

New Delhi, November 23
The next phase of telecom growth will be driven by broadband paradigm and the government will have to review the strategy pursued so far as majority of the next 500 million customers in telecom will be in the rural areas, member secretary of Planning Commission R R Shah said here today.

Speaking at a conference on ‘Connecting the next 500 million: Telecom roadmap for the 11th Five Year Plan’, Shah said besides substantial change in policy framework, villages should be developed as knowledge centres.