New Delhi, February 10
The low air fare party is over sooner than expected. Within days of announcing cut in fares after consecutive declines in price of the jet fuel, major airlines have decided to withdraw their lower-level base fare offers like those rated at Rs 99. No-frills low-cost carriers are expected to follow suit.

The three major Indian carriers — Air India, Jet Airways and Kingfisher Airlines — have decided to stop low-fare advance purchase (apex) schemes. However, the regular fares and the fuel surcharge are not being touched, spokespersons of these airlines said.

Full-service airlines have hiked basic fares across sectors by Rs 1,200-1,800 per passenger. The Mumbai-Delhi route will witness a steep hike in basic fares by an average of Rs 1,800-2,200 per passenger. Low-cost airlines’ hike in basic fares is expected to increase by an average of Rs 2,000 per passenger across major routes.

Airlines attribute these steep hikes to the need to reduce breakeven due to low load factor. This, they say, is the only way they can stay afloat in times when the demand is low, adding that the decision was taken as operators were faced with low load factors.

Air India, which was selling the lowest-priced ticket at Rs 99 plus taxes and fuel surcharge, has withdrawn it. Air India spokesperson said as far as the state-run carrier was concerned, rest everything on both economy and business classes remained the same as the fuel surcharge was not being changed.

“We have discontinued our promotional fares as the response was not very good, but people who have already bought tickets under the scheme can enjoy the benefit,” he added.

Spokespersons of the airlines said that air fares would now be decided by the market, adding that regular fares and fuel surcharge were not being touched.

Jet Airways spokesperson said the airline adjusts fares on a regular basis depending on the market conditions. “Recently, the fares have been adjusted on certain sectors and fare buckets. The effected changes are a day-to-day practice in the revenue management of the airline”.

However, the full fares on both economy and business classes as well as the fuel surcharge was not being changed, he added.

Sources in Spicejet and Indigo said fares were likely to stabilise in the Rs 3,000 range from the current Rs 2,000 levels. Officials of other low-fare carriers said they were also looking at revising the lowest level of fares.

New Delhi, February 10
In a bid to shield the economy from slowing down, the UPA government will borrow Rs 46,000 crore in four tranches by selling government debt. These borrowings will fuel the two economic stimulus packages that have been announced in the past two-three months.

Economic Affairs Secretary Ashok Chawla said, “We had discussions with the Reserve Bank of India. The borrowings will be between February 20 and March 20 in four tranches to the tune of Rs 46,000 crore.”

The borrowings, to be carried out through dated securities, will not result in any liquidity crisis, assures the government. The government has so far raised Rs 2,40,000 crore through sale of long-dated securities in the current fiscal year that ends on March 31, compared with Rs 1,79,000 crore it had budgeted to borrow at the start of the year, according to the RBI.

Economists say the increase in debt will lead to increased fiscal deficit, which, will, in turn fuel inflation on a later date.

This extra borrowing is aimed at keeping the economy grow at 7 per cent, which is growing at the slowest pace in six years.

The reason that has prompted the government to go for these massive borrowings is low income from taxes and revenue slippages due to slowdown in industrial production, and an increase in government expenses. Economists reason the largesse of government expenditure on non-productive works like salaries to government employees, waiver of farm loans for small farmers, large subsidies to oil and fertilisers companies to insulate the market from price fluctuation.

A section of economists say that the deficit will widen to as high as 6 per cent of the gross domestic product, which is three times higher than 2.5 per cent targeted by the government last year in the Budget. This is aside of the off-balance sheet spending such as oil bonds, fertiliser subsidies etc.

The central bank said it would conduct the market borrowings in a non-disruptive manner. “We will ensure that the borrowing programme is conducted in a non-disruptive manner,” RBI Deputy Governor Shyamala Gopinath said.

Meanwhile, the Oil Ministry has sought additional oil bonds worth about Rs 13,000 crore to cover the revenue loss on fuel sale in the fourth quarter of the current fiscal.

The UPA government has for the first three quarters sanctioned oil bonds worth Rs 60,967 crore to IndianOil, Bharat Petroleum and Hindustan Petroleum to make the good revenue loss on sale of petrol, diesel, domestic LPG and kerosene.

Washington, February 10
US President Barack Obama today asked the Congress to hasten passage of a $838-billion stimulus plan that he said would create four million jobs by directly investing in infrastructure, education and health care.

Although the plan was "not perfect", he said it was the only option left to stop the worst economic crisis since the Great Depression from deepening further.

"...with the private sector so weakened by this recession, the federal government is the only entity left with the resources to jolt our economy back into life," he said in his his first news conference after assuming office on January 20.

The plan combines hundreds of billions in tax cuts for the middle class — which Obama said would put more money in the pockets of those that are likely to spend it — with direct investment in the social sector.

The President urged "all members of Congress to act without delay in the coming weeks to resolve their differences and pass this plan." The Senate has voted in favour of the economic recovery and reinvestment plan.

"I'm hoping, over the next several days, that the House and the Senate can reconcile their differences and get that bill on my desk," Obama said.

These investments, the President said, "will save jobs, create new jobs and new businesses, and help our economy grow again." More than 90 per cent of the jobs created by this plan would be in the private sector.

"They are not going to be make-work jobs, but jobs doing the work that America desperately needs done: jobs rebuilding our crumbling roads and bridges, repairing our dangerously deficient dams and levees so that we don't face another Katrina," Obama said.

The plan has the backing of almost every industry in the US and contains inputs from both Democrats and Republicans.

"...the plan's not perfect. No plan is. I can't tell you for sure that everything in this plan will work exactly as we hoped, but I can tell you with complete confidence that a failure to act will only deepen the crisis," he said. — PTI 

Hyderabad, February 10
A local court here has posted for February 13 the hearing on a petition filed by Serious Fraud Investigation Office (SFIO) seeking permission to question the former chairman of Satyam Computers B Ramalinga Raju and other top executives in connection with the Rs 7,200-crore fraud in the IT company.

Market regulator SEBI’s application seeking permission to quiz and record the statements of former CFO V Srinivas and PwC auditors S Gopalakrishnan and T Srinivas will also come up for consideration before the sixth additional chief metropolitan magistrate on the same day.

Meanwhile, magistrate Ramakrishna reserved his orders for February 16 on the bail plea of PwC auditors.

The court had yesterday admitted a petition filed by SEBI seeking permission to question and record the statements of the accused.

Mumbai, February 10
Satyam Computer's government-appointed board will meet here on Thursday with further funding options and legal issues likely to top its agenda, a high-level source said.

"The board will meet in Mumbai on February 12 to discuss the company's long-term plans. These include further options to raise funds to meet short to medium-term requirements," the source, closely connected with the development, told PTI here today. A Satyam spokesperson confirmed the date of the meeting.

The short-term requirements of Satyam include funds for paying salaries to employees in India and abroad, rentals, arrears to vendors and provident fund dues.

Satyam has to pay the first tranche of salaries for its US employees by February 19, the source said. It has already secured loans worth Rs 600 crore from IDBI Bank and Bank of Baroda. — PTI 

New Delhi, February 10
Realty major Unitech today said it has rescheduled more than three-fourths of its total debt amounting to Rs 8,000 crore to tackle the slump in the real estate sector and hoped that the company would soon have sufficient liquidity to look at other opportunities.

"We have been able to reschedule over 75 per cent of our commitments," Unitech managing director Sanjay Chandra told reporters here today.

Asked whether the company has fulfilled 75 per cent of the short-term commitments, he said: "No, overall." The overall debt of the company is Rs 8,000 crore, he added.

Chandra said the company has restructured a lot of short-term debts into long-term ones. "We will shortly be in a position, where we will hopefully be having a lot of liquidity to look at other opportunities and initiatives," he said.

Chandra had said on January 19 that Unitech has repaid or rescheduled about three-fourths of the company's debts worth Rs 2,500 crore to be paid by March 2009.

Asked about the sale of Gurgaon hotel and office building in the national capital, Chandra said the deals are expected to close by the end of this quarter.

Unitech posted a 74 per cent decline in consolidated net profit at Rs 136 crore for the quarter ended December 31, 2008, against Rs 525.78 crore in the year-ago period. — PTI 

Mumbai, February 10
IT major Tata Consultancy Services (TCS) has tied up with networking and communications infrastructure provider Cisco Systems Inc. to jointly develop and deliver IT services and solutions.

The two companies in a joint declaration said they would work on delivering next generation data centres for customers, with TCS developing compatible technology to match Cisco's data centre networking infrastructure.

The companies aim to facilitate virtual data centres to their customers through the alliance.

“The partnership is holistic and multi-levelled through which we will aim to provide customers an array of solutions which would include data centres, virtualisation, security, software as a service (SaaS) among others,” TCS chief executive N. Chandrasekaran said.

As part of the deal, the San Fransisco-based Cisco will set up a technology lab at TCS campus in Chennai, and the Indian giant will double its employee strength from 500 to 1,000.

The two companies currently do business worth about $100 million annually, Chandrasekaran said.

He added that the two partners "hope to garner a considerable share" in the market for next generation data centres in the next few years.

Cisco chairman and chief executive John Chambers said the companies hope to offer a new level of productivity to their clients through the joint offerings.

“Virtualisation is growing big by the day and through this alliance we will focus on processor, applications and storage virtualisations among other offerings. We can dramatically change the bottomline of the two companies through this initiative,” Chambers told reporters. — IANS

BRIEFLY

Essar arm sets up 2 BPO centres in J&K
Mumbai: Essar group company and BPO service provider Aegis on Tuesday said it is setting up two BPO centres in Jammu and Kashmir, entailing an investment of Rs 100 crore. "We see J&K playing an important role in India's economic growth and development. Hopefully, Aegis' initiative will encourage other large companies to invest in the state," Essar group chairman Shashi Ruia said. — PTI

Dabur enters Chinese market
New Delhi: FMCG major Dabur India is entering China as part of expanding its international presence with its range of natural oral-care and hair-care products. To start with, the company has shipped its Amla Hair oil and Meswak toothpaste to China — its latest international market.— PTI

Aircel’s GSM services
Kochi: Aircel on Tuesday announced the launch of its GSM services in Kerala. Aircel will introduce products and services uniquely tailored to meet the special needs of Kerala consumers, like the lowest inbuilt Gulf tariff at Rs 5.99 per minute, he said. In the first phase they will be investing Rs 500 crore in Kerala and hopes to double it in the next couple of years. — PTI

Hindustan Zinc ups silver prices
New Delhi: Vedanta Resources group firm Hindustan Zinc on Tuesday said it has increased prices of silver by Rs 640 to Rs 20,750 a kilo gram. The price revision is effective from Tuesday, a company circular said, adding the prices are exclusive of sales tax/VAT and other statutory levies as applicable.— PTI