The Tribune, Chandigarh, India

	Inflation turns –ve Tribune News Service & PTI New Delhi, June 18 Inflation turned negative for the first time in 30 years at minus 1.61 per cent, causing a flutter among industry and economists, but the common man continues to pay more for pulses, cereals and vegetables than in the previous year. Though terming the negative inflation as “unusual”, the government said it was not “unexpected” so as to warrant a policy change. Concerned industry wanted immediate action like cuts in interest rates to boost demand even as bankers opined that interest rates could be cut by up to one percentage point. After the inflation data were released, the stock market rose 200 points from the opening level but closed the day lower at 257 points at 14,265 points even as some economists said that the situation warranted government action. Cheaper food prices dragged the index down but the fuel prices remain an area of concern, say economists and analysts. They add that the prices of oil are kept stable even though the international crude oil price is rising, once the domestic prices are revised then inflation will start zooming up again. Siddharth Shankar, director of Financial Services Company Kassa India, said: “It is a misconception that we are in a deflation mode. The figures released today are due to higher base effect. We are entering into an inflationary zone coupled with very low growth, a perfect mix for stagflation.” "The government needs to intervene to rationalise the negative zone inflation as it reflects slowdown in production activities with the piling up of inventories due to lack of demand,” industry chamber Assocham said. Negative inflation rate indicates that there is room for further rationalisation of the interest rate structure in order to boost demand in the economy, said Sajjan Jindal, president, Assocham. Amit Mitra, secretary general, Ficci said there was no fear of deflation and this was just a temporary phenomenon. “The rate of inflation, which has turned a negative 1.61 for the first time in thirty years, is in fact a positive sign and should not be termed as deflation as it essentially reflects a high base effect of the previous year,” said Krishan Kalra, secretary general, PHD Chamber. The negative trend of inflation is likely to continue till August 2009 after which the impact of the high base effect is likely to wear off, added Kalra. The decline in inflation should pave the way for further interest rate cut by RBI that in turn would help to revive industry, which is impacted by shortfall in credit, and infuse liquidity in the market.
	No cause of concern, says Montek Inflation moving into negative territory is not a cause of concern, Planning Commission Deputy Chairman Montek Singh Ahluwalia said today. “It is not a cause of concern whatsoever," he said while commenting on inflation, which turned negative -1.61 for the first time after more than 30 years. “This (negative inflation) is not a matter of crisis rather this is course correction or normalisation. There is nothing to worry as this is happening because of the base effect,” Planning Commission member Saumitra Chaudhuri said, adding: “As prices had risen to very high level last year, the negative inflation is more of a statistical issue." Voicing out a similar view, Prime Minister's Economic Advisory Council chairman Suresh Tendulkar said the negative inflation was a temporary phenomenon and was mainly due to base effect. — PTI
	Sebi approves ‘anchor invester’ concept Shiv Kumar Tribune News Service Mumbai, June 18 The Securities and Exchange Board of India (Sebi) today unveiled a number of new rules governing market participants like listed companies and mutual funds. SEBI’s governing board, which met today, came up with measures like rationalisation of disclosure norms for companies coming out with rights issues and abolishing of differential voting rights. In a major relief to retail investors, the market regulator has also abolished deduction of brokerage from investments in mutual funds. Sebi chairman CB Bhave told reporters today that the board had initiated the concept of an anchor investor for companies coming out with initial public offerings. The anchor investor will have to be a qualified institutional buyer who can subscribe up to 30 per cent of the shares reserved for institutional investors. “No person related to promoters, promoters group or book running lead managers could be anchor investors,” Bhave said. He further added that issuers of IPOs will have to carry bidding process for anchor investors one day prior to opening of issue price. Anchor investors will have to pay 25 per cent of the value of shares applied for on application and the rest within two days of allotments. The shares allotted to anchor investors will carry a 30-day lock-in period. Analysts say enrolment of reputed parties as anchor investors will carry tremendous weight with retail investors who are applying for an IPO. In another boost to retail investors, Sebi has barred companies from issuing shares with superior voting rights. For investors venturing into equity markets via mutual funds, Sebi has removed entry loads on mutual funds schemes with immediate effect. Distributors would be required to collect commissions separately from mutual fund investors. The market regulator has also decided to rationalise the fees charged by intermediaries. Fees charged by financial intermediaries will cut by as much as 50 per cent. Broker fees for debt deals have been cut to Rs 2.5 per Rs 1 crore of turnover, Bhave said.
	Karnataka shows door to Maytas Infra Bangalore, June 18 The Karnataka government today terminated its agreement with Maytas Infra Consortium, a firm promoted the son of Satyam scamster B Ramalinga Raju, for building airports in Gulbarga and Shimoga. The announcement comes amid reports that the Andhra Pradesh government is likely to cancel the ambitious Hyderabad metro rail project awarded to a consortium led by Maytas for failing to achieve financial closure of the project. Explaining the reasons for terminating the projects, Urban Development Minister S Suresh Kumar told reporters: "Even after two months, Maytas did not embark upon any significant effort to prove that it had the capability to execute the projects. Hence the government decided to terminate the agreements on airport projects". The government had chosen Maytas to execute the Greenfield projects worth up to Rs 220 crore at Gulbarga and Shimoga. At its meeting here, the state Cabinet decided to call off the agreement with Maytas going by the developments in Satyam and rejecting the firm's contention that the consortium was not part of the fraud-hit software major. Kumar said in the aftermath of scam involving Satyam, the government had set up a committee under the chairmanship of chief secretary Sudhakar Rao on January 29 to look into the issue of whether to continue with the agreement. The body served a show-cause notice on Maytas to which the firm in its February 10 reply said there was no mismanagement in it and it wanted at least 2-3 months to start work. Kumar said the government had now decided to appoint IDEK, a Bangalore-based company, as project consultants for the two airports and to suggest an agency that would take up the work. The Cabinet has approved Rs 78 crore allocation for the two airports. — PTI
	India Inc created 3,00,000 jobs in US: Study Washington, June 18 When the Indian outsourcing industry is being blamed for taking away American jobs, a study has found that corporate India has created employment for 3,00,000 people in the US between 2004 and 2007. An India Brand Equity Foundation study released here yesterday by Commerce and Industry Minister Anand Sharma mentioned USD 105 billion contribution by the Indian industry to the US economy during 2004-07. "This revealed a story of commitment to optimise and to invest in the future of the relationship," Sharma said. The $50-billion Indian outsourcing industry has come in for a major attack in the US, bolstered by President Barack Obama's calls to the US companies to move from Bangalore to Buffalo. Concerned over the backlash in the US, the Indian industry has been trying to lobby with influential Americans and opinion leaders about the benefits that the American can derive from developing economies. — PTI
	Corporate Results Dish TV Q4 loss: Rs 79 cr New Delhi, June 18 Driven by huge subscriber addition, Subhas Chandra-promoted DTH company Dish TV has reduced its net loss to Rs 78.66 crore for the fourth quarter ended March 31, 2009, from Rs 115.06 crore in the same period last year. Total income jumped by 51.98 per cent to Rs 207.13 crore in the fourth quarter of 2008-09, Dish TV said. The company had a total income of Rs 136.29 crore in Q4 2007-08. For the year 2008-09, the company posted a consolidated net loss of Rs 440.69 crore. It had reported a net loss of Rs 414.12 crore in 2007-08. Zee News Zee News has reported a growth of over 20 per cent in its consolidated net profit during the financial year ended March 31 to Rs 44.56 crore. The company had a consolidated net profit of Rs 37.07 crore during 2007-08, Zee News said. The media house, which runs the news channel Zee News has declared dividend of Rs 0.40 per share to its shareholders for the financial year 2008-09. On a standalone basis, the media house posted a net profit of Rs 44.56 crore during the latest fiscal, up 19.46 per cent as compared to Rs 37.30 crore of FY'08. Opto Circuits India Manufacturer of healthcare devices Opto Circuits India has said its consolidated net profit for the quarter ended March 31, 2009, rose by 62 per cent at Rs 55.37 crore, over the same period last year. The company had a net profit of Rs 34.20 crore in the same period ended March 2008, Opto Circuits India said. The board of directors of the company proposed a dividend of Rs 4 a piece (face value of Rs 10 each) for the year 2008-2009, subject to the approval of the shareholders. Gujarat Fertilisers&Chem Gujarat State Fertilisers & Chemicals Ltd has said its net profit jumped three-fold at Rs 98.43 crore for the quarter ended March 31, 2009, over the same period last year. The company had a net profit of Rs 28.56 crore in the same period ended March 2008, GSFCL said. GSFCL's total income rose to Rs 846.90 for the period ended March 31, 2009, from Rs 800.44 crore in the same period last year. The board of directors of the company has proposed a dividend of Rs 4.5 a piece (45 per cent), the filing added. Spice Comm Spice Communications has reported a net loss of Rs 1,015.22 crore for the 15 months ended March 31, 2009, while it had a net profit of Rs 380.13 crore in the period ended December 2007. The company's net sales stood at Rs 1,580.47 crore for the period ended March 2009, against Rs 957.84 crore in the fiscal ended December 31, 2007, Spice Communications said. Wire and Wireless Cable television firm Wire and Wireless has reported a consolidated net loss of Rs 31.19 crore during the fourth quarter ended March 31, 2009. The consolidated net sales of the company also decreased to Rs 71.08 crore during the March quarter of FY'09 from Rs 81.79 crore of December quarter. — PTI
	Pak tax brings trade to halt Chandigarh, June 18 Trade across the Attari-Wagah route along the Indo-Pak border has virtually come to a halt after the Pakistan government imposed taxes on import of fresh vegetables from India, exporters said. The Pakistan government had imposed 16 per cent sales tax on import of onion and potato and 4 per cent income tax on potato, onion and tomato. “Because of the taxes imposed by Pakistan on import of tomato, potato and onion, exports of these commodities from India will take a hit as Pakistani importers will refrain from ordering the items from here,” Amritsar- based Narain Exim managing director Rajdeep Uppal said. “We used to send 100-120 truckloads per day containing tomato, potato and onion to Pakistan which constitute over 70 per cent of total export but now with no orders remaining in hand, the trade of tomato, potato and onion has completely stopped,” he said. Exporters have now engaged representatives of the Lahore Chamber of Commerce to protest against this move in order to rollback the taxes on fresh vegetables. Fuelled by the commencement of cross-border movement of commercial trucks in 2007, total export of commodities from India to Pakistan through the Attari-Wagah land route has grown by whopping 136 per cent at Rs 410.30 crore in 2008-09 against export value of Rs 174.10 crore in 2007-08. — PTI
	Now, A-I, SpiceJet raise fare New Delhi, June 18 Following their competitors, Air India and no-frill carrier SpiceJet today announced an increase in fuel surcharge per air ticket by Rs 400, with the national carrier making it effective from tomorrow. While SpiceJet increased the surcharge by Rs 400 with immediate effect, Air India announced that a similar hike would be effective for travel on all its domestic routes from tomorrow. Air India currently levies fuel surcharge of Rs 1,950 and Rs 2,700 on air tickets up to and beyond 750 km respectively, which will go up to Rs 2,350 and Rs 3,100. The surcharge for SpiceJet would go up to Rs 2,400. For Jet Airways, hike would take fuel surcharge on a ticket below a distance of 750 km to Rs 2,450 and beyond that to Rs 3,400. For its no-frill subsidiaries Jet Airways Konnect and JetLite, it would be Rs 2,150 and Rs 3,100 respectively. There would be a similar increase for Kingfisher Airl Officials of no-frill carriers IndiGo and GoAir are mulling their options saying they were yet to take a decision. — PTI
	Rate cut up to 100 bps on cards: Bankers New Delhi, June 18 With inflation turning negative for the first time in 30 years, banks are gearing up for interest rate cut up to 100 basis points. “Interest rates should come down. We will take a look tomorrow as to how much deposit and lending rates can be cut further," UCO Bank chairman and managing director SK Goel said. “My rough estimate is that 100 basis points at least, we will be able to reduce," Goel said. Kolkata-based UCO bank will hold its ALCO (Asset and Liability Committee) meeting tomorrow to take a view on rate cut. Meanwhile, State Bank of Bikaner and Jaipur, the largest subsidiary of SBI, reduced deposit rates by up to 100 basis points on various maturities effective today. The one to two years peak deposit rate has been reduced by 100 basis points to 7.25 per cent. According to Oriental Bank of Commerce executive director H Ratnakar Hegde: “Inflation below zero level would definitely result in reduction in interest rates." At the same time, the country's second largest private sector lender HDFC Bank has decided to slash its deposit rates by up to 25 basis point with effect from tomorrow. — PTI