SPECIAL COVERAGE
CHANDIGARH

LUDHIANA

DELHI



THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS

B U S I N E S S

More sops likely for rupee-hit exporters 
New Delhi, December 25
The government may extend further relief to exchange rate-hit exporters and come out with another package after receiving recommendations of the Rangarajan Committee, which is looking into the problems relating to an incessant appreciation of rupee.

SBI board to meet in Jan to consider merger
Mumbai, December 25
The board of country's largest lender State Bank of India will meet on January 25 to consider the merger of its six associate banks with the parent.

Maruti cars to be dearer
New Delhi, December 25
Maruti Suzuki India, country's largest carmaker, will hike prices of its vehicles across different models between Rs 4,000 and Rs 12,000 next week.

Exporters seek DEPB extension, service tax refund
New Delhi, December 25
Asserting that the recent sops given by the government to exporters has limited impact and most of them remain only on paper, the Federation of Indian Exporters Organisation (FIEO) has made a seven-point demand, including extension of Duty Entitlement Passbook Scheme (DEPB) till March 31, 2010, and removal of 7 per cent ceiling on interest subvention, to ease pressure from the rupee-hit exporters.



EARLIER STORIES

 


A customer checks Toyota Motor's Corolla Rumion at the company's showroom in Tokyo on Tuesday. Toyota raised its sales forecast for 2008 and confirmed it expects to overtake US rival General Motors this year to become the world's top automaker in terms of production. Toyota said it expects to sell 9.85 million vehicles next year, up 5 percent from 2007 and higher than a previous target of 9.8 million.
A customer checks Toyota Motor's Corolla Rumion at the company's showroom in Tokyo on Tuesday. Toyota raised its sales forecast for 2008 and confirmed it expects to overtake US rival General Motors this year to become the world's top automaker in terms of production. Toyota said it expects to sell 9.85 million vehicles next year, up 5 percent from 2007 and higher than a previous target of 9.8 million. — AFP photo

Reliance Retail eyes $5 b turnover by 2011
Bangalore, December 25
Reliance Retail is eyeing a turnover of around $5 to 5.5 billion in home durables, including consumer electronics, telecom and home IT across all its formats by 2011, its top official said today.

Reliance Money world’s cheapest brokerage Co
New Delhi, December 25
Anil Ambani group's Reliance Money today said it has become the world's most cost-effective broking company in the world, despite India being dubbed among the most expensive markets in terms of transaction costs.

Petro dealers asked to pay tax on evaporation losses
Ludhiana, December 25
Petroleum dealers in Punjab would now have to reverse Input Tax Credit (ITC) on evaporation losses as well. The Excise and Taxation Department, after scrutiny of returns filed by dealers for the past two financial years, has sent notices to the petroleum dealers across the state stating that they had violated the VAT Rules and have been asked to reverse ITC for 2005-06 and 2006-07.

Canon, Hitachi, Panasonic form alliance

Presidents of Japanese electronics companies (L-R), Tsuneji Uchida of Canon, Kazuo Furukawa of Hitachi and Fumio Otsubo of Matsushita Electric Industrial shake hands as they announce the formation of an alliance for developing LCD panels, in Tokyo on Tuesday. The three companies will merge their strengths to accelerate the development of cutting edge display technology.
Presidents of Japanese electronics companies (L-R), Tsuneji Uchida of Canon, Kazuo Furukawa of Hitachi and Fumio Otsubo of Matsushita Electric Industrial shake hands as they announce the formation of an alliance for developing LCD panels, in Tokyo on Tuesday. The three companies will merge their strengths to accelerate the development of cutting edge display technology. — AFP photo

ONGC-Mittal JV wins gas blocks in Trinidad, Tobago
New Delhi, December 25
Steel baron Lakshmi N Mittal's joint venture with ONGC Videsh Ltd has won an exploration block with estimated gas reserves of two trillion cubic feet (tcf) in Trinidad and Tobago.

Hunt begins for Air India chief
New Delhi, December 25
The government has begun search for a new head of National Aviation Company of India Ltd, which runs the merged Air India, almost three months ahead of the end of incumbent chairman and managing director V Thulasidas' tenure.

Anil pips Mukesh in creating investors’ wealth
Mumbai, December 25
Mukesh Ambani, the richest Indian and head of market leader Reliance Industries, was not the leading wealth creator for small investors in 2007, but was pipped for the top spot by younger brother Anil.

Fiji may import sugar from India
New Delhi, December 25
India, the world's second-largest producer of sugar, may export 25,000 tonnes of the sweetener to Fiji as the island nation seeks to import the commodity to bridge the shortfall in its domestic production.

ONGC to supply gas to Tripura power unit
Agartala, December 25
The Oil and Natural Gas Corporation (ONGC) has agreed to supply natural gas for the proposed 104 mw gas based thermal project at Monarchak in West Tripura district, power minister, Manik De said today.

ICA seeks zero duty on mobile handsets
New Delhi, December 25
Pointing that unprecedented appreciation of rupee against dollar has made domestic industry non-competitive against imports, the Indian Cellular Association (ICA) has urged the government for zero duty, zero VAT and a special GST rate, as and when introduced, for mobile cellular industry.

IIFCL to lend Rs 1,800 cr to Mundra project
New Delhi, December 25
State-owned India Infrastructure Finance Company Ltd (IIFCL) has sanctioned Rs 1,800 crore to the Tata Group-promoted Mundra Ultra Mega Power Project (UMPP) and is planning to extend Rs 1,000 crore credit to the Sasan power project, being developed by Reliance.

HC ruling to benefit UP sugar mills: Analyst
Mumbai, December 25
The Allahabad High Court's ruling will help sugar mills in Uttar Pradesh as it gives them tax and interest related benefits, an industry official said here.

‘Tata-Corus deal among Asia’s best for 2007’
New Delhi, December 25
Tatas' Corus takeover, ICICI bond issue and Hutch-Essar sale to Vodafone have been named as Asia's top three deals for 2007 by an Economist Group publication.

GBN to invest Rs 500 cr
New Delhi, December 25
Global Broadcast News Ltd (GBN), which broadcasts news channels CNN-IBN and IBN7, today said it will invest Rs 500 crore for an entertainment venture with US media group Viacom and launching a slew of regional news channels.

India Inc wants cut in excise duty on cars
New Delhi, December 25
India Inc has prepared its wish-list for the 2008-09 budget which include reduction of excise duty on motor cars, abolition of the Minimum Alternative Tax (MAT), removal of surcharge on corporate tax and review of the Fringe Benefit Tax (FBT).

Asia’s oldest iron plant reopens
Kulti (WB), December 25
Asia's oldest iron plant Kulti Works today restarted operations, after remaining closed for more than four years.


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More sops likely for rupee-hit exporters 

New Delhi, December 25
The government may extend further relief to exchange rate-hit exporters and come out with another package after receiving recommendations of the Rangarajan Committee, which is looking into the problems relating to an incessant appreciation of rupee.

"Once the recommendations of the Rangarajan Committee are received, the government will take some decisions to help the exporters tide over the crisis caused by an over 12-13 per cent appreciation of rupee during 2007," a senior commerce ministry official told PTI.

The government has so far doled out an over Rs 5,000 crore relief package to exporters, which include refund of service tax on a few items, 2 per cent interest subvention, upward revision of duty drawback and duty entitlement passbook scheme rates and import duty cut on a number of man-made fibres and their intermediates.

The new measures based on the recommendations of chairman of the Prime Minister's Economic Advisory Council C Rangarajan are likely to be worked out in the next few weeks, the official said.

According to sources, the Prime Minister had held a meeting with deputy chairman of the Planning Commission, finance minister and commerce minister on December 18 to take stock of the situation arising out of rupee rise.

Taking note of the problems of the exporting community, Prime Minister Manmohan Singh has asked Rangarajan to examine and give his recommendations on issues relating to rupee appreciation, service tax refund and the sunset clause on 100 per cent export-oriented units (EoUs).

The EoUs have been enjoying tax exemption for the past 15 years but these concessions are slated to discontinue in April 2009.

Commerce minister Kamal Nath had also held talks with heads of various export promotion councils as well as exporters of handlooms, sports goods and toys. "We discussed various issues with exporters and took stock of the situation," Nath said.

The over 12-per cent rise in rupee this year has impacted exporters' margins as well as resulted in decline in growth of several labour-intensive sectors like textiles, leather and handlooms.— PTI

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SBI board to meet in Jan to consider merger

Mumbai, December 25
The board of country's largest lender State Bank of India will meet on January 25 to consider the merger of its six associate banks with the parent.

The boards of associate banks are expected to give an in-principle nod to the merger, sources said.

These associates include — State Bank of Travancore, State Bank of Mysore, State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Indore, and State Bank of Patiala.

Despite opposition from workers' union, the SBI had earlier this month approved merger of State Bank of Saurashtra with itself.

The union has threatened of serious consequences if SBI gives a go-ahead to the merger of other associates and said it will meet on January 3 in Delhi to decide the future course of action.

"The decision of the board to meet on January 25, to consider the merger, is quite unilateral. The federation along with the United Forum of Bank Unions (UFBU) and State Bank of India Staff Federation (AISBISF), will meet on January 3, where we will discuss the merger issue and the future course of the protest," All India State Bank Officer's Federation's general secretary G D Nadaf told PTI.

SBI, which has 75-100 per cent stake in its associate banks, is looking to consolidate its position as as a global giant with its balance sheet expected to grow manifold. It is already one of the largest banks in Asia and is looking at a place among the 50 biggest banks in the world.

The bank is in the process of raising about Rs 17,000 crore through a rights issue next year.

SBI's seven associates have a combined branch strength of 4,820, while the total balance sheet size is around Rs 2,00,000 crore.

Apart from the merger, the unions will also discuss their long pending demands relating to pension, compassionate appointment and outsourcing in the banking industry, Nadaf said.

The unions have also called for a demonstration before the banking division of the finance ministry on January 4. — PTI 

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Maruti cars to be dearer

New Delhi, December 25
Maruti Suzuki India, country's largest carmaker, will hike prices of its vehicles across different models between Rs 4,000 and Rs 12,000 next week.

The company, which has started its week-long annual plant shutdown, will announce the quantum of increase in prices when it reopens the plant on January 2, sources said.

When contacted, a Maruti Suzuki India official said: "The management has taken a decision formally just before the plant shutdown to hike prices by 2-3 per cent across different models." The increase in prices could vary according to the variants of different models, the official added.

The company had cited higher costs of raw materials such as lead and aluminium as well as oil among the reasons for increasing the vehicle prices.

Following MSIL's move, other companies like Hyundai and General Motors have also announced plans to increase prices of their products between 2 per cent and 3 per cent.

Other players like Honda Siel Car India had, however, said they would not be tinkering with the existing prices of their products. — PTI 

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Exporters seek DEPB extension, service tax refund
Tribune News Service

New Delhi, December 25
Asserting that the recent sops given by the government to exporters has limited impact and most of them remain only on paper, the Federation of Indian Exporters Organisation (FIEO) has made a seven-point demand, including extension of Duty Entitlement Passbook Scheme (DEPB) till March 31, 2010, and removal of 7 per cent ceiling on interest subvention, to ease pressure from the rupee-hit exporters.

In a meeting with union commerce and industry minister Kamal Nath here, FIEO president Ganesh Kumar Gupta also demanded pre-post shipment credit in foreign currency, zero duty EPCG scheme, indigenous sources under all export promotion scheme, market development assistance and exemption from service tax.

“The recent packages announced by the government only has limited impact. The package gave the impression that government has given sops of over Rs 5,000 crore to exporters though most of the announcements refer to refund of duties and taxes which are legitimate claims of exporters,” Gupta said, adding “only subvention of interest rates and making EEFC an interest bearing accounts can be termed as sops.”

“The export growth of 35 per cent in October 2007 seems to be quite impressive by any standards. However, much of the growth has come from extraordinary performance by gems and jewellery, petroleum products and engineering. The first two products are highly import intensive and thus, have not faced challenges of rupee appreciation to a large extent,” he said.

Seeking continuation of DEPB scheme till 2010, when GST will be operational, FIEO president said since DEPB withdrawal was linked with the reimbursement of state taxes and duties, we might continue with it as convincing the states will take few years.

The exporters’ body also saw no merit in linking interest subvention of exporters with that of credit to agriculture at 7 per cent.

The FIEO urged the government to advise RBI to direct banks to provide PCFC to exporters on priority basis. “Most of the exporters, particularly in the SMEs sector, are deprived of export credit in foreign currency due to unavailability of foreign currency, particularly the dollar with the banks. PCFC is still cheaper as compared to rupee credit and help the exporters when rupee is appreciating,” he said.

In wake of constant reduction in import duties on capital goods and availability of most of capital goods to textiles and leather at 5 per cent basic customs duty, there is an urgent need to reduce the duty under EPCG scheme from 5 per cent to nil so that exporters may avail the facility for modernisation and expansion of their production base, he said.

FIEO has also sought inclusion of services like commission to foreign agents, overseas travels, fees to professionals, etc in the categories for reimbursement of service tax in the exemption category of service tax.

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Reliance Retail eyes $5 b turnover by 2011

Bangalore, December 25
Reliance Retail is eyeing a turnover of around $5 to 5.5 billion in home durables, including consumer electronics, telecom and home IT across all its formats by 2011, its top official said today.

"We are hoping to touch a turnover of around $5-5.5 billion in home durables across all our formats by 2011," Ajai Baijal, president & chief executive, Reliance Industries (CDIT business) told PTI on the sidelines of the launch of its Reliance Digital store here.

The current domestic market size of home durables which includes consumer electronics, telecom and home IT is Rs 70,000 crore and "this is growing at 20 per cent per annum", he said. — PTI 

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Reliance Money world’s cheapest brokerage Co

New Delhi, December 25
Anil Ambani group's Reliance Money today said it has become the world's most cost-effective broking company in the world, despite India being dubbed among the most expensive markets in terms of transaction costs.

Indian bourses, one of the best performers of the world, are more expensive than a number of markets like the US, UK, Japan and even emerging markets like Russia and Brazil, a new survey has said.

According to the survey conducted by global financial consultancy Elkins/McSherry, the average brokerage charge for delivery-based trades in India is around 30 basis points, while the total transaction cost is about 51 basis points after including charges like stamp duty and service tax.

"India still has very high brokerage rates and there is scope for significant reduction in brokerage rates and market impact costs," Reliance Money CEO Sudip Bandyopadhyay told PTI.

"In our quest to offer the most cost-effective broking platform, we have become the industry's lowest cost service provider not only in India, but also in the world," he said.

Elkins/McSherry put India among costliest in the world after compared the transaction costs for 47 countries.

Reliance Money CEO said other Indian brokerage firms would also cut down the costs over a period of time and eventually Indian market would become more cost effective.

Reliance Money's average brokerage charge is about one basis points — the world's lowest, and the total cost after including the market impact charges works out to be about 15 basis points if the transactions are executed through it. — PTI

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Petro dealers asked to pay tax on evaporation losses
Shveta Pathak
Tribune News Service

Ludhiana, December 25
Petroleum dealers in Punjab would now have to reverse Input Tax Credit (ITC) on evaporation losses as well. The Excise and Taxation Department, after scrutiny of returns filed by dealers for the past two financial years, has sent notices to the petroleum dealers across the state stating that they had violated the VAT Rules and have been asked to reverse ITC for 2005-06 and 2006-07.

The move, however, is being opposed by over 2,400 dealers across the state who have threatened to move court if the decision was not withdrawn.

Confirming the decision, state excise and taxation commissioner A. Venuprasad said: "We have asked them to reverse ITC for 2005-06 by the end of this month and for 2006-07 by April next year. The amount involved is roughly Rs 30 crore for two fiscals.”

He added that the ITC reversal on total quantity did not mean imposing any new tax, and it was an amount that the dealers had not been paying. "This should not be treated as a fresh income. However, dealers would have to pay it as evaporation is an incidental loss for any business and no other commodity is getting a relaxation. We are giving them enough time and they have amicably agreed to it."

In the notices sent to several dealers, the department stated: "It was noticed that you have claimed normal losses on account of evaporation of diesel and motor spirit in your balance sheet, but failed to reverse Input Tax Credit on these losses...you have violated the provision of the Act and made yourself liable for penal action."

Upset with the move, dealers termed it as an unjustified and irrational move. "There is natural evaporation, which is around 1 per cent. Why should the department tax us on the quantity that we never sold," questioned J.P. Khanna, president of the Punjab Petroleum Dealers Association.

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ONGC-Mittal JV wins gas blocks in Trinidad, Tobago

New Delhi, December 25
Steel baron Lakshmi N Mittal's joint venture with ONGC Videsh Ltd has won an exploration block with estimated gas reserves of two trillion cubic feet (tcf) in Trinidad and Tobago.

ONGC-Mittal Energy Ltd beat UK's Centrica Plc to bag the offshore block, a company official said.

OMEL, the 51:49 joint venture between Mittal Energy and the overseas investment arm of ONGC, made a revised financial commitment of about $204 million to win the block.

Trinidad and Tobago had in January 2006 offered eight onshore and three shallow marine blocks for bidding. OMEL made an initial bid of about $175 million, including signature bonus. It later emerged that Centrica and a consortium led by BG of UK had also submitted bids for the block.

"OMEL was informed that there was a tie in the bids of OMEL and Centrica and OMEL was asked to submit a revised bid," the official said.

The bid parameters were reviewed by OVL and OMEL in consultation with technical advisors and a revised bid for the block with increase in the minimum financial exposure to OMEL from about $175 million to about $204 million was submitted.— PTI

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Hunt begins for Air India chief

New Delhi, December 25
The government has begun search for a new head of National Aviation Company of India Ltd, which runs the merged Air India, almost three months ahead of the end of incumbent chairman and managing director V Thulasidas' tenure.

The CMD would oversee all activities of the company, which has about 33,000 employees and operates 140 aircraft, besides being in the process of inducting about 111 more planes over the next four years.

Thulasidas, an IAS officer of the Tripura cadre, is due to retire in March next year. He has steered the airline through the losses and turned it around, leading to the merger of the national carriers Air India and Indian. NACIL was incorporated in March this year and operationalised in August.

Referring to the advertisement posted on civil aviation ministry website, industry sources said the scope for a professional to head the organisation in the prevailing competitive scenario was limited as the notice was focused on government officers, PSU executives and defence personnel.

As per the advertisement, officers of the level of additional secretary or equivalent, Lieutenant General in the Army and equivalent levels of the Navy and Air Force would be considered on deputation for the post, subject to their cadre clearance.

Industry sources felt that given the stiff competitive environment in the domestic and international aviation sectors, government should rope in a professional to run the national carrier that is one of the biggest in Asia. — PTI 

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Anil pips Mukesh in creating investors’ wealth

Mumbai, December 25
Mukesh Ambani, the richest Indian and head of market leader Reliance Industries, was not the leading wealth creator for small investors in 2007, but was pipped for the top spot by younger brother Anil.

A comparison of cumulative share price gains for the listed companies from the two groups puts the surge for Mukesh Ambani group at 153 per cent, as against about 232 per cent for the Anil Dhirubhai Ambani Group (ADAG).

This is despite the Mukesh Ambani group recording an overall market capitalisation gain of close to Rs 3,00,000 crore, which is higher than ADAG's total market value.

Among the groups led by India's five richest, Mukesh Ambani group added Rs 2.99 trillion, Anil Ambani group added about Rs 1.66 trillion, K P Singh-led realty giant DLF saw a gain of about Rs 68,500 crore, Sunil Mittal-led Bharti Airtel added close to Rs 65,000 crore. On the other hand, Azim Premji-led Wipro lost about Rs 8,800 crore as it battled the adverse impact of the rising rupee against the US dollar.

The Mukesh group currently has a cumulative market cap of about Rs 5.05 trillion, as against Rs 2.91 trillion of ADAG group. Bharti Airtel, DLF and Wipro have a market cap of about Rs 1.84 trillion, Rs 1.65 trillion and Rs 78,178 crore, respectively.

However, the Mukesh Ambani group is at the second spot after ADAG in terms of the collective share price gain for the companies belonging to the individual groups. It was followed by DLF with a 85 per cent gain and Bharti Airtel with a surge of 55 per cent. Wipro lost 12 per cent.

Had one investor purchased one share each of the four listed companies of Mukesh Ambani group — RIL, Reliance Petroleum, RIIL and IPCL — at the end of 2006, it would have cost a total of Rs 2,150.35.

As 2007 draws to a close, this portfolio has grown to Rs 5,437.91, after taking into account the allotment of one RIL share for five shares of IPCL that was delisted this year.

However, this gain of about 153 per cent is lower than 232 per cent surge in the cumulative share price of five ADAG firms.

In absolute terms also, one share each of Mukesh group companies has given a return of Rs 3,287.56, as against a higher gain of Rs 4,768.15 from the five ADAG stocks and that also at a lower capital.

One share each of the five ADAG stocks — Reliance Communications, Reliance Capital, Reliance Energy, Reliance Natural Resources and Adlabs — would have cost a total of Rs 2,053.30 at the end of 2006. This five-share portfolio is now worth Rs 6,821.45.

However, the gains from Mukesh group shares are higher than that of realty giant DLF, which rose 85 per cent over its IPO price of Rs 525 to the current price of Rs 971.65.

The two Ambani groups have also scored over companies run by Sunil Mittal and Azim Premji, who complete the five-richest club owing their fortunes to Indian bourses. Bharti Airtel's share price has grown by 55 per cent in 2007, while that of Wipro has actually dropped by 12 per cent. — PTI 

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Fiji may import sugar from India

New Delhi, December 25
India, the world's second-largest producer of sugar, may export 25,000 tonnes of the sweetener to Fiji as the island nation seeks to import the commodity to bridge the shortfall in its domestic production.

"We are looking at a total import of about 25,000 tonnes," Fiji Sugar Marketing Company CEO Viliame Savou told PTI in an email interview.

He attributed the lower domestic production of sugar this year in Fiji because of drought in the sugarcane belt resulting in a significant drop in the crop. "We are not able to fulfil our overall (export) commitments," he pointed out.

The sugar being imported would be consumed in the local market, Savou said, adding it would import direct consumption raw sugar which will be packed in 50kg bags.

However, Indian traders said Fiji would import sugar to meet its local demand as it also wants to export sugar to the European countries, where it enjoys a preferential tariff.

Replying to a question on the possibility of Fiji exporting the imported sugar to EU, Savou said: "No, this is not true." Savou said the company is working through its brokers in Singapore, who are arranging the purchase from India.

"Fiji does not wish to specifically import sugar from India. We are importing sugar from the world market but as India happens to have surplus sugar this year and can meet our quality and timing requirement, it is the origin that Fiji will be importing sugar from," he said.

The island nation might have bought sugar from other origins provided they meet its requirements, Savou added. "We are purchasing direct consumption raw sugar which is similar to the quality of sugar consumed locally in Fiji," he said.

Fiji is likely to produce about 2,50,000 tonnes of sugar during 2007-08 season compared to 3,10,140 tonnes in the previous year. The harvest season in Fiji is normally from June to December, while in India it starts in October.

Savou said Fiji has exported 2,01,400 tonnes of sugar in 2006-07 while the first consignment of imported sugar will arrive in January next year.

Replying to a query whether Fiji will import sugar from India on a regular basis, he said it would import only when there is a shortfall in local production.

Last time Fiji imported sugar from Thailand, Guatemala and Australia was in 1998-99 when there was a drought. He declined to comment whether Indian companies can invest in Fiji to set up new facilities. — PTI 

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ONGC to supply gas to Tripura power unit

Agartala, December 25
The Oil and Natural Gas Corporation (ONGC) has agreed to supply natural gas for the proposed 104 mw gas based thermal project at Monarchak in West Tripura district, power minister, Manik De said today.

He said, the decision was taken at a high-level meeting between ONGC and North Eastern Power Corporation (NEEPCO) in Delhi last week where chief secretary, Shashi Prakash was also present.

ONGC chairman-cum-managing director, R.S. Sharma assured general manager of NEEPCO that ONGC would sign agreement to supply five lakh cubic meter gas per day for Tripura for the next 15 years.

De said, the agreement is likely to be signed in February next.

He said, NEEPCO was pursuing for gas since 2000 last and with this assurance power generation was likely to be started from next year. — PTI 

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ICA seeks zero duty on mobile handsets
Tribune News Service

New Delhi, December 25
Pointing that unprecedented appreciation of rupee against dollar has made domestic industry non-competitive against imports, the Indian Cellular Association (ICA) has urged the government for zero duty, zero VAT and a special GST rate, as and when introduced, for mobile cellular industry.

In a pre-Budget memorandum to ministry of finance, ICA also demanded continuation of special additional duty (SAD) of 4 per cent on import of handsets till 2010 to make the Indian manufacturing business viable.

“The cost of importing a handset into India (from China) is nearly at par with the projected cost of manufacturing a handset in India. Hence, continuing with the SAD would make the Indian manufacturing case viable,” it said.

For promotion of manufacturing, the association suggested extension of the zero duty ITA regime to key accessories like batteries, chargers, blue tooth and hands free kits in the first phase.

“Other parts, components and accessories not in the ITA regime may be covered in subsequent phases. Special instruments and mechanisms for duty-free imports of ‘parts of batteries’ for manufacture of batteries may be devised for both customs and excise exemptions,” it said.

Urging a comprehensive notification exempting basic customs duty, countervailing and excise duty on all raw material, packing material for assembling, manufacturing and repairing of mobile cellular handsets, parts, components and accessories, it said “there should be no classification code and goods should be classified under ‘any chapter’”.

To promote upstream manufacture, it said the “raw material and packing material” be included in the category of goods allowed for duty free imports.

Pointing that ‘after sales service’ suffer 21.653376 per cent duty, the ICA urged that basic customs duty should be brought to zero per cent on components, parts, spares and accessories for after sales service and reselling, “battery packs for cellular phones”, “chargers and adaptors” along with other such items.

Seeking continuation of zero excise policy for promotion of manufacturing, zero duty on the final products i.e. mobile cellular handset/phone and their parts, components and accessories to combat smuggling and grey market, the ICA said, if CST cannot be abolished, then it can be brought to 1 per cent on mobile cellular handsets, its parts, components and accessories. It added that mobile handsets should be categorised as “declared goods” in the list of Goods of National Importance under the Central Sales Tax Act in the coming Budget.

It also demanded bringing down the VAT to zero per cent on mobiles for the common man priced under Rs 5,000, promising that this benefit will be passed on to the consumers immediately.

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IIFCL to lend Rs 1,800 cr to Mundra project

New Delhi, December 25
State-owned India Infrastructure Finance Company Ltd (IIFCL) has sanctioned Rs 1,800 crore to the Tata Group-promoted Mundra Ultra Mega Power Project (UMPP) and is planning to extend Rs 1,000 crore credit to the Sasan power project, being developed by Reliance.

"We have sanctioned a loan of Rs 1,800 crore for the Tata's Mundra project and would also provide loans for other UMPPs bagged by Reliance such as Sasan and Krishnapatnam," IIFCL chairman and managing director S.S. Kohli told PTI.

The company, he said, would provide Rs 1,000 crore for the Sasan project being developed by the Anil Ambani-led Reliance Power.

Kohli said the company is bullish on UMPPs and would also provide loans for the execution of other mega power projects.

Tata Power had bagged the first of the series of nine ultra mega power projects from the government in December last year to generate 4,000-MW of energy at an estimated cost of Rs 16,000 crore. The project will come up at coastal site at Mundra in Gujarat.

Reliance Power won the bid for the Sasan Power Project to be developed at Madhya Pradesh and Krishnapatnam project at Andhra Pradesh.

While the Sasan power project, to be based on domestic coal, is expected to cost Rs 14,000 crore, the 4,000-MW Krishnapatnam project, to be operated on imported coal, would require an investment of more than Rs 16,000 crore.

The government is proposing to add 78,000 MW of additional power generation capacity during the 11th Plan with an estimated investment of $177 billion.— PTI

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HC ruling to benefit UP sugar mills: Analyst

Mumbai, December 25
The Allahabad High Court's ruling will help sugar mills in Uttar Pradesh as it gives them tax and interest related benefits, an industry official said here.

"We believe that the court's ruling would come as a shot in the arm for the beleaguered sugar mills in the state. Along with other relief measures (tax and interest related), it could have a long-term positive impact," brokerage firm ICICIdirect research analyst, Sanjay Manyal, said.

The Lucknow Bench of the Allahabad High Court last week directed private sugar mills in Uttar Pradesh to pay farmers at the rate of Rs 110 per quintal of sugarcane. The Bench passed the order on a bunch of writ petitions filed by private sugar mills, challenging the state government's directive to pay farmers at Rs 125 per quintal.

The court also ordered the state government to rework the state-advised price (SAP) and suggested the formation of a committee that includes all stakeholders — sugar cane farmers, mill owner, consumers and a government nominee — to arrive at a fresh SAP.

The Mayawati government had continued with the SAP of 2006-07 and retained it the previous level of Rs 125 per quintal. Uttar Pradesh is among the few states where the SAP is fixed by the state government. Other states like Maharashtra follow the Centre's statutory minimum price (SMP).

Currently, the SMP is Rs 81.80 per quintal. — PTI 

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‘Tata-Corus deal among Asia’s best for 2007’

New Delhi, December 25
Tatas' Corus takeover, ICICI bond issue and Hutch-Essar sale to Vodafone have been named as Asia's top three deals for 2007 by an Economist Group publication.

The winners for "Asia's Best Deals of the Year Awards", published in the latest issue of the CFO Asia magazine, include ICICI Bank's $2 vbillion debt offering, Tatas' multi billion dollar acquisition of Anglo-Dutch steelmaker Corus and Hutchison's sale to Vodafone of its stake in Indian mobile operator Hutch-Essar at the top three positions.

After issuing a $750 million five-year bond issue in January, India's biggest private lender ICICI Bank returned to the market in September and agreed to pay an interest of 237.5 basis points above the US treasuries due to the global credit crunch, against 174.8 basis points for the earlier deal.

However, at $2 billion, it was the biggest single-tranche bond offering ever in Asia, excluding Japan, the magazine noted.

The global bond offering was launched a week after the US Federal Reserve cut the interest rates by 50 basis points and appeared to have calmed the market. The deal closed on the same day with an order book three times oversubscribed.

The deal helped revive the Asian bond market as investors had started fleeing in the wake of the subprime crisis and was followed by other companies raising more than $2 billion through bond offerings.

According to the magazine, the $2-billion bond issue, along with $750 million raised in January and $4.9 billion follow-on equity offering in June, ICICI Bank can afford to wait out a financial crisis.

"Eventually, it will need to return to the markets given the rapid rise in the number of Indian companies acquiring assets abroad. Indian regulations restrict the ability of corporations to raise cross-border money, so they have no choice but to turn to banks like ICICI," CFO Asia pointed out.

Terming the the Tata-Corus deal as "the underdog story" of the year, the publication said it was the most exciting auction London had seen in years.

"The two bidders, Brazil's CSN and India's Tata Steel, were evenly matched, each boasting annual revenues of more than four billion dollars. Their quarry was the much bigger Anglo-Dutch giant Corus Group, the world's 10th largest steelmaker with sales last year of $19.2 billion."

In the end, Tata Steel paid £6.7 billion that was 55.8 per cent more than its original offer, but the deal catapulted the firm into world's 6th steelmaker in the world.

On the sale of Indian stake by Hutchison to Vodafone, CFO Asia said it was a "contrarian play" of the year and focused on the theory of "buy low, sell high." Hong Kong billionaire Li Ka Shings Hutchison Whampoa had entered India's telecom market in 1994 and over the years the conglomerate's Hong Kong and New York-listed subsidiary Hutchison Telecommunications accumulated 67 per cent of Hutchison Essar.

Vodafone paid $10.7 billion in cash and assumed about $2 billion of debt for Hutch Essar, while Indian partner Essar was won over with an offer to grant a put option to sell its 33 per cent stake to Vodafone for $5 billion.— PTI

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GBN to invest Rs 500 cr

New Delhi, December 25
Global Broadcast News Ltd (GBN), which broadcasts news channels CNN-IBN and IBN7, today said it will invest Rs 500 crore for an entertainment venture with US media group Viacom and launching a slew of regional news channels.

"The amount of Rs 500 crore will go in launching a number of news channels in regional languages and in entertainment venture with Viacom," GBN Joint Managing Director Sameer Manchanda told PTI.

He said GBN had proposed to induct up to 26 per cent FDI worth Rs 500 crore. Its proposal was among the 19 foreign direct investment (FDI) proposals amounting to Rs 726.88 crore approved by the government yesterday.

GBN, a part of Network18 Group, has already announced launch of a 24-hour Marathi language news and current affairs channel, through a 50:50 joint-venture with the Lokmat Group.

He said the company would launch a few more regional news channels in future. However, he declined to give details.

The company had also raised around Rs 105 crore from the capital market with an initial public offer (IPO) early this year and has also formed a joint venture with Jagran Group to bring out a business newspaper in Hindi language.

Network18 Group has also announced plans to enter the entertainment space with a 50:50 JV with media conglomerate Viacom. The JV — Viacom 18 — will operate the existing MTV Network channels in India (MTV, Vh1 &Nickelodeon), launch a new Hindi general entertainment channel and house the Group's film business.

The media sector is in a dynamic growth phase and GBN is geared to take advantage of such opportunities and strengthen its leadership position as a media house, Manchanda said. — PTI 

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India Inc wants cut in excise duty on cars

New Delhi, December 25
India Inc has prepared its wish-list for the 2008-09 budget which include reduction of excise duty on motor cars, abolition of the Minimum Alternative Tax (MAT), removal of surcharge on corporate tax and review of the Fringe Benefit Tax (FBT).

"The government should reduce the excise duty from 24 per cent to 14 per cent on cars, multi-utility vehicles and petrol driven goods transport vehicles," the Confederation of Indian Industry (CII) said in its pre-budget memorandum.

While making a case for reduction of various levies, the chamber also suggested that focus of the next budget should be on transforming India from a "labour arbitrage economy to knowledge arbitrage economy".

The chamber wanted the government to lay special emphasis on skill development and rural economy by providing fiscal incentives. It suggested that expenditure incurred by the industry on training and retraining programmes should be made eligible for tax exemption as is the case with Research and Development activities.

As regards the MAT, which was introduced by the finance ministry to rope in zero tax paying companies into the tax net, the CII said that government should either abolish the tax or reduce its incidence to 5 per cent.

Although the CII has made a case for reducing host of direct taxes and excise duties, it urged the government to maintain the peak customs duty rate at 10 per cent as "imported goods have already become cheaper by 10.35 per cent due to appreciation of rupee against dollar since March 1, 2007".

With regard to excise duty, the CII demanded that the CENVAT rate be reduced from 16 per cent to 14 per cent in the forthcoming budget. The CII also suggested modification of definition of trading and investing activities in the stock markets.

The chamber demanded removal of the dividend distribution tax (DDT), which is levied on dividends paid by the companies.

Alternatively, it added, the rate of DDT may be reduced to 5 per cent. The FBT, it said, should be restructured to exclude deeming provisions that treat a portion of business expenses as personal expenses under the tax.

The CII also suggested the government to incorporate necessary changes in the tax laws for encouraging corporate restructuring like mergers and amalgamations.

To encourage exports, the chamber suggested that government should "provide relief to exporters by reintroducing deductions available under Sections 80HHC and 80HHE of the Income Tax Act".

The government, it suggested, should provide pass through (tax) benefit to private equity and venture capital funds for investment in all sectors. The CII also demanded reintroduction of Section 10 (23G) of the IT Act which allowed tax exemption on interest income and capital gains from infrastructure lending and investment.

To remove anomalies in the customs duty structure, the chamber suggested that government should reduce duties on various fuel oils from 10 per cent to 5 per cent and on metallurgical coal from 5 per cent to 2 per cent.

The chamber also made a case for reducing customs duty on naptha and liquefied propane from 5 per cent to 2 per cent. — PTI 

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Asia’s oldest iron plant reopens

Kulti (WB), December 25
Asia's oldest iron plant Kulti Works today restarted operations, after remaining closed for more than four years.

Production in the 134-year old Kulti Works, closed since March 2003 due to chronic losses, would begin from the middle of 2008 with both ferrous and non-ferrous foundries becoming operational.

The revival journey of the unit, earlier a part of IISCO and now a division of SAIL, was formally announced at a function in the presence of union steel minister Ram Vilas Paswan, external affairs minister Pranab Mukherjee and information and broadcasting minister P R Dasmunsi.

SAIL initiated various activities, including repair of equipment, installation of LPG facility as an alternative fuel since September for starting commercial production.

Kulti Works was earlier known as Bengal Iron Works Company that was founded in 1870. In 1936, it merged with IISCO Burnpur.

The government last year had launched a Rs 10,000-crore modernisation programme at Burnpur under which Steel Authority of India (SAIL) was to modernise Kulti Works also. Kulti Works has now been rechristened SAIL Growth Works.

The plant would be operated by the growth division of SAIL, which has appointed M Singh as executive director.

Speaking at the function, Paswan said his ministry was trying to revive National Iron and Steel Company at Belur in Howrah District of West Bengal.

Paswan, who also holds the chemicals and fertiliser portfolio, said the Centre has initiated revival of Hindusthan Fertiliser Corporation that would benefit the PSU's two units in West Bengal, at Haldia and Durgapur.

He said the country's total steel production now stood at 50 million tonnes, and the figure would be increased to 80 million tonne by 2011-12 and 200 million tonne by 2020.

Steel secretary R S Pandey said India was trying to become the world's second largest steel maker in the next few years.

An amount of Rs 50,000 crore has been earmarked for the expansion and modernisation of SAIL, of which Rs 20,000 crore would be invested in West Bengal including Kulti Works.

The campus of the Kulti plant was spread over 812 acres, of which the production area comprised 218 acres, Pandey said.

There were about 3,000 workers at the Kulti works before the plant was shut down. All of them were forced to take VRS.

Asansol MP Bansagopal Chowdhury recently said the Centre was likely to spend Rs 5,000 crore to revive the Kulti plant, of which Rs 2,000 crore had been sanctioned. — PTI 

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