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Fiscal consolidation should be Budget priority: RBI
RBI Governor D Subbarao at ‘The Economic Times Financial Management Summit — 2009’, in Mumbai on Friday. — PTI
Tech Mahindra appoints 4 directors on Satyam board
Airtel, Infy, TCS top world tech Cos
GM bankruptcy likely next week: Report
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JSL scraps $1.2-billion project in Indonesia
SSTL to launch telecom services in Delhi, Haryana
Deora: Govt to consider deregulating fuel prices
SEZ developers approach board of approval for de-notification
RelCap to divest 26% in insurance arm
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Fiscal consolidation should be Budget priority: RBI
Mumbai, May 22 “Given the still soft economy, the pressure to provide more stimulus will persist. While this may help in the near term, the sustainability of recovery requires returning to responsible fiscal consolidation,” Reserve Bank Governor D Subbarao said. The fiscal stimulus packages and other measures initiated by the government to mitigate the impact of global financial crisis on the country have led to a sharp rise in expenditure and fiscal deficit, he said. “The challenge for fiscal policy is to balance immediate support for the economy with a need to get back on track on the medium-term fiscal consolidation process,” Subbarao told a seminar here. With every percentage point increase in the fiscal deficit, maintaining adequate liquidity in the system becomes that much more difficult, Subbarao said. “Managing this trade off between our short-term compulsions and long-term sustainability will be one of the big challenges,” he said. The government's massive borrowing programme has expanded rapidly and is going against the RBI's objective to keep a low interest rate regime, Subbarao said, adding that the RBI has been managing the borrowing in an orderly manner. “Large borrowings by the government run against the low interest rate environment that the Reserve Bank is trying to maintain to spur investment demand,” Subbarao said. He said high deposit rates had not allowed banks to cut lending rates at a faster pace consistent with the growth and inflation outlook. “Although deposit rates are declining and effective lending rates are falling, there is more space to cut rates given declining inflation,” Subbarao said. However, he said, the challenges of unwinding of policy measures taken to deal with the global crisis, would be less daunting for India than for other countries. He also said the economic recovery would be faster in India, which would return to high growth path later this year as the stability gets restored in the global markets. This would, however, be largely dependent on the monetary and fiscal stimuli working their way through, and on calm and confidence returning to the global markets, he said. “While risks from the uncertainties in the global markets continue to persist, there are risks on the domestic front too. The challenge is how to manage the recovery. The fiscal and monetary response now on will have to weigh in the state of the economy going forward 6-9 months,” Subbarao said. India's less dependence on merchandise exports, at less than 15 per cent of GDP, and its smooth functioning financial system, comfortable forex reserves and modest inflation will help for a swift recovery from the slow down, he pointed out. While Indian banks have continued to function well braving recession, bad loans in the domestic banking system could rise in the period ahead, Subbarao said. — PTI
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Tech Mahindra appoints 4 directors on Satyam board
New Delhi, May 22 The other three nominee directors on behalf of Venturbay Consultants (an arm of Tech Mahindra) include CP Gurnani, Sanjay Kalra and Ulhas N Yargop, Satyam said. Gurnani currently heads Tech Mahindra’s global operations, Kalra is president (strategic initiatives) while Yargop is president for IT sector and a member of the board of Mahindra & Mahindra. “Following the effectiveness of the appointment of Venbturbay directors, there will be a total of 10 directors on the board,” Satyam said. ‘Has 10,000 excess staff’ Satyam has 10,000 excess employees in its 40,000-strong headcount, its new owner Tech Mahindra said on Friday. “Satyam has 10,000 excess manpower. It has close to 40,000 employees. We are looking at least painful ways to take care of this issue,” Tech Mahindra CEO Vineet Nayyar said. On other hand, Satyam board chairman Kiran Karnik said: “We are not looking at layoffs. But we are looking at the ways on how to mange the cost, handle people and meet the challenges to the bottom line.” — PTI
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Airtel, Infy, TCS top world tech Cos
New York, May 22 The ‘Infotech 100’ list for 2009, based on shareholder return, return on equity, total revenues, and revenue growth is topped by Amazon.com for the second straight year. Ranked at the sixth position, telecom giant Bharti Airtel leads the pack of Indian companies featured in the list. The three IT majors - Infosys, TCS and Wipro - find a place in the top 50. Infosys is ranked 25, TCS is at the 30th spot and Wipro is placed at the 43rd position. The “2009 ranking of the tops in tech showcases companies that managed to thrive even in the face of a bruising global recession,” the magazine said. At the second spot is Oracle followed by SAP (3), Inventec (4) and IBM (5). Two American entities led by India-origin CEOs also find a place in the top 100. Francisco D'Souza-led Cognizant Technologies is ranked 51 while Adobe Systems headed by Shantanu Narayen has cornered the 99th spot. Bharti Airtel is ahead of South African telecom entity MTN Group (12th rank), maker of Blackberry phones Research In Motion (14), technology giant Apple (19), software major Microsoft (22) and Google (37), among others. According to the publication, the number of US companies in the list has shot up to 43 against 33 last year. There are five firms from China in the top 100. BusinessWeek said it combed the financial results of “tens of thousands of publicly traded businesses and ranked tech players on shareholder return, return on equity, total revenues, and revenue growth” to prepare the list. To qualify, the companies should have revenues of at least $500 million. The magazine said return on equity was the “net income available for shareholders divided by common equity, in native currency” while total return is the “return to shareholders, including dividends for the 12 months ended April 30, 2009”. — PTI
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GM bankruptcy likely next week: Report
Washington, May 22 “The Obama administration is preparing to send General Motors into bankruptcy as early as the end of next week under a plan that would give the automaker tens of billions of dollars more in public financing as the company seeks to shrink and reemerge as a global competitor,” The Washington Post reported today quoting sources familiar with the discussions. According to the daily, the move comes as the government is getting ready to lift another auto maker Chrysler from bankruptcy protection “as soon as next week”. Attributing to a source, The Washington Post said under the GM draft bankruptcy plan, the company would receive just short of $30 billion in additional federal loans. The publication noted that the figure is a starting point in negotiations between the government and the company and could change. “A cash injection that large would boost the US investment in GM to nearly $45 billion. The timing of the filing is also fluid, and could happen the first week of June,” it added. — PTI |
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JSL scraps $1.2-billion project in Indonesia
New Delhi, May 22 JSL Ltd (formerly Jindal Stainless) had last year entered into a joint venture with the mining firm PT Antam to build a 20,000-tonne ferro-nickel plant and 3-lakh-tonne stainless steel slab unit in Indonesia. However, with prices of nickel, a vital input for producing the alloy, dipping sharply, the Indian firm has decided to drop the project. JSL has already spent about $4.5 million in the project and hopes to recover it soon, Parakh added. — PTI |
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SSTL to launch telecom services in Delhi, Haryana
Kolkata, May 22 The JV company, which has prepared a capital expenditure plan of about $5.5 billion over 3-5 years in India, has an aim of 10 per cent market share in mobile services in the next five years. So far, the company has invested about $1.2 billion in India for spectrum allocation and other infrastructure. Sistema Shyam is hoping to have a pan-India presence by the middle of next year. The company would invest $150 million in this calendar year which will include starting a service in Haryana, Bihar, Jharkand, Mumbai and Delhi. The company has already invested $80 million in Kolkata. “We will launch our services in Delhi by August-September (this year). The company is already in talks with tower companies and infrastructure firms for rolling out operations in Delhi,” SSTL president and chief executive officer Vsevolod Rozanov said after launching their mobile telephony services under ‘MTS’ brand in Kolkata. The Russian government is also expected to pick up equity amounting to $670-700 million in SSTL, by the end of this financial year. After the deal, Sistema, which holds a 74 per cent equity stake, might have to shed 20 per cent of it, while Shyam will maintain its 23.5 per cent stake. The Russian government has already approved infusing about $670 million. “We are negotiating with the government regarding the stake sale and valuations. After we get the approval, we will seek Foreign Investment Promotion Board clearance in India,” Rozanov said. Under the MTS brand, the company now operates in Kolkata, Tamil Nadu, Kerala and Rajasthan cellular circles, with a subscriber base of 9,20,000. MTS, which provides mobile services in six other nations, has a subscriber base of about 100 million globally. SSTL is planning to complete its pan-India service launch by the third quarter of 2010.
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Deora: Govt to consider deregulating fuel prices
New Delhi, May 22 Separate draft Cabinet notes are ready for giving public sector IndianOil, Bharat Petroleum and Hindustan Petroleum freedom to fix petrol and diesel prices when crude oil prices are below $75 a barrel and raising rates of natural gas produced by Oil and Natural Gas Corp and Oil India Ltd from nominated fields. “We insulated the consumers when international crude oil prices touched $147 per barrel last year. Our attempt has been to make available fuel to common man at affordable price,” Deora said. — PTI |
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SEZ developers approach board of approval for de-notification
Chandigarh, May 22 Dr Lalit B Singhal, director general, Export Promotion Council for EOUs and SEZs, Ministry of Commerce and Industry, said the issue of de-notification of these five IT/ ITeS SEZs would be taken up by the board during its meeting scheduled for June 2. He was talking to The Tribune on the sidelines of a seminar organised by PHD Chamber on SEZs. These SEZs were to come up in Haryana, Orissa, Gujarat and West Bengal. “Of the four SEZs coming up for de-notification, the developer had not availed any duty free benefits and no activity had started in one case. In the other cases, the developer had commenced activity and availed duty free benefits, but no SEZ unit had come up here. The developer is willing to refund the duty back, but the board of approvals will take a final call on allowing for de-notification,” he said. Talking about the economic downturn having affected the SEZs, Singhal said these export zones were not immune from the effects of the slowdown. “During the upcoming meeting of the board of approvals, 18 cases are also listed for seeking extension in the three years time frame allowed for these SEZs to become operational. These SEZ projects will be given two year extension, as stipulated under the SEZ Act,” he said. Singhal was, however, quick to add that the SEZs have been a success in India. He said since 2006, when the SEZ policy was formulated, as many as 568 SEZs have been given formal approval, of which 91 SEZs are now in operation.
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RelCap to divest 26% in insurance arm
New Delhi, May 22 “We are planning to divest 26 per cent stake in our insurance arm. We may either go in for an IPO or for a strategic investor or we might also go in for a combination of both options,” Reliance Capital CEO Sam Ghosh said. Without divulging any details, Ghosh said: “The funds raised through this divestment would be partly infused into the insurance arm and partly into Reliance Capital.” The company has decided on this divestment at this point of time because it will give a better shareholder value, besides sentiments in the market is also looking bright. —
PTI |
Re at 5-month high Q2AMedia Amway India Dolphin Offshore Madhucon Projects
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Mumbai, May 22
Reeling under a financial crunch and slump in demand for commercial space, special economic zone developers are now approaching the special economic zones board of approval for de-notification of
SEZs. After DLF got its IT SEZ at Delhi de-notified in December 2008, the real estate developer has once again knocked at the doors of the board of approval for de-notification of four IT/ ITeS
SEZs.
