SPECIAL COVERAGE
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THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
B U S I N E S S

PC, Reddy discuss inflation
Merrill Lynch paints gloomy picture; Re 1 oil price hike on Aug 15 likely
New Delhi, August 10
Finance Minister P. Chidambaram today met Reserve Bank Governor Y.V. Reddy for evolving strategies to deal with soaring prices after inflation crossed 7.51 per cent.

Global oil price zooms
London, August 10
World oil prices hovered at close today to record high levels as concerns about supply disruptions lingered in the wake of a decision by Iraq to cease pumping crude from its southern oil fields.

Ceiling irks SIC Bank’s depositors
Mumbai, August 10
The troubled South Indian Co-operative Bank (SICB) in Mumbai is allowing depositors to collect just Rs 1,000 each, irrespective of their investments in the bank.
Rush of customers at a SICB branch in Mumbai Rush of customers at a SICB branch in Mumbai on Tuesday. — PTI photo

Indo-Pak trade talks start today
New Delhi, August 10
India will be looking forward to bring Pakistan around to sign the Safta accord and also have direct trade between the two countries when the two-day secretary-level trade talks begin in Islamabad from tomorrow.

Syed Sajjad Ahmed displays the electro-solar car, a battery-operated solar-powered cart for city mobility that he has developed Syed Sajjad Ahmed displays “the electro-solar car (cart)”, a battery-operated solar-powered cart for city mobility that he has developed in Bangalore. The cart can run 60 km with solar support, is eco-friendly and the first of its kind. — PTI


Bollywood actress Preity Zinta at a press conference in the Capital
Bollywood actress Preity Zinta at a press conference in the Capital on Tuesday. Preity has been named brand ambassador for Head & Shoulders, an anti-dandruff shampoo. — Tribune photo by Mukesh Aggarwal

EARLIER STORIES

 

Nandan Nilekani
Nandan Nilekani 

UP ropes in Nilekani
Lucknow, August 10
Infosys Managing Director Nandan Nilekani has been roped in to formulate a new IT policy for Uttar Pradesh that aims to develop Noida and Greater Noida as the new technology destination for northern India. Mr Nilekani has laid stress on e-governance on the pattern of Karnataka which has 57 such cities.

Reconsider EPF rate cut: Left
New Delhi, August 10
Even before the din has dissipated on the FDI issue, the Left parties and the UPA government are on a collision course once again on the EPF interest rate cut. The Left parties today demanded that the government should “reconsider” the decision to cut the EPF rate to 8.5 per cent from 9.5 per cent.

Auto scene
Ford Ikon models roll out

Bangalore, August 10

Ford India has unveiled a new line up of its successful Ikon range of mid-sized cars and announced a major ramp-up in production with a full second shift starting this month at its Maraimalainagar Plant near Chennai.



Ford Ikon (India) Managing Director and President David Friedman poses with a complete new line-up of New Ford Ikon (Zxi & flair), at a launch in Bangalore on Tuesday. — PTI photo

Ford Ikon Managing Director and President David Friedman poses with a complete new line-up of New Ford Ikon



In graphic: Producation of foodgrains, oilseeds & other crops during 2003-04

Video
Karnataka Chief Minister meets IT stalwarts to solve their problems.
(28k, 56k)


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PC, Reddy discuss inflation
Merrill Lynch paints gloomy picture; Re 1 oil price hike on Aug 15 likely

New Delhi, August 10
Finance Minister P. Chidambaram today met Reserve Bank Governor Y.V. Reddy for evolving strategies to deal with soaring prices after inflation crossed 7.51 per cent.

The meeting, which lasted for about an hour, came a day after Finance Minister had a detailed meeting with Prime Minister Manmohan Singh.

Earlier, late yesterday night Prime Minister Manmohan Singh held a meeting with Union Finance Minister P. Chidambaram and RBI Deputy Governor Rakesh Mohan to mull over the rising inflation as international crude prices continued to soar.

Mr Reddy declined to say anything about the meeting. However, it is believed that the issue of rising inflation figured prominently in the meeting of Finance Minister and RBI Governor.

The government is firming up appropriate policy mix to keep prices in check.

Finance Ministry officials said inflation, which shot up to over 40-month high of 7.51 per cent, was expected to decline after mid-August.

While the pressure on petroleum prices will continue in short-run, they said arrival of monsoon and appropriate mix of policy would bring down inflation from middle of August.

Inflation surged mainly on account of rise in prices of iron ore, fruits and vegetables, food products, edible oil, iron, steel and basic metals alloys and metal products.

Official sources also attributed spiralling of inflation to “statistical carry-over effect”, concerns over the late arrival of monsoon and hardening of international oil prices.

Indications are that petrol and diesel prices may be raised by up to Re 1 per litre each on August 15, the next due date for fuel price revision, in step with the surge in global oil prices.

The hike would have been higher but for 10 per cent price band fixed by the Government, industry sources said.

The proposed hike comes close on the heels of Rs 1.10 per litre increase in petrol prices (in Delhi) and Rs 1.42 per litre increase in diesel prices announced on July 31, the first revision after the Government allowed state-run oil firms to fix prices within a 10 per cent price band. The price band is fixed based on the mean of average landed price of the fuel during the previous quarter and the average landed price in past one year.

The WPI, which had remained more or less unchanged at 173.8 points in May 2003-04 and between May and August 2003, started surging in June-July this year.

Painting a more gloomy picture, a report by financial consultant DSP Merrill Lynch (DSPML) said today that inflation would continue to remain above the 7 per cent mark throughout this month and is expected to peak at 7.9 per cent in the third week of August to incorporate the rise in fuel prices from August 1.

“Given the low base of the index for primary products, we believe inflation is likely to remain above 7 per cent throughout August and expect it to peak at 7.9 per cent, against our earlier estimate of 7.1 per cent, in the third week of August to capture the rise in the fuel prices from August 1,” DSPML said.

However, inflation is likely to fall by 30 per cent from the peak 7.9 per cent by the year-end to around 5.6 per cent owing to the possible softening of fuel inflation. “We expect fuel inflation to almost halve to 5.5 per cent by year-end as against 10 per cent currently,” it said in a statement here. — Agencies

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Global oil price zooms

London, August 10
World oil prices hovered at close today to record high levels as concerns about supply disruptions lingered in the wake of a decision by Iraq to cease pumping crude from its southern oil fields.

In Asian trading earlier today, the September contract had touched a high of $44.99 per barrel, topping the record intra-day high of $44.98 per barrel set during New York trading the previous day. — AFP

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Ceiling irks SIC Bank’s depositors
Tribune News Service

Mumbai, August 10
The troubled South Indian Co-operative Bank (SICB) in Mumbai is allowing depositors to collect just Rs 1,000 each, irrespective of their investments in the bank.

Acting on the orders issued by the Reserve Bank of India (RBI) the SICB put up notices at each of its 13 branch offices in Mumbai, Thane and Raigad announcing the restrictions. Later in the day, the police was called in, as angry depositors demanded that they be allowed to encash their fixed deposits. The Reserve Bank of India (RBI) on Monday froze the assets of the South Indian Cooperative Bank after a run on deposits triggered by reports about its poor financial condition.

The bank had been on a mobilising spree to collect term deposits by offering interest rates as high as 10.5 per cent per year. The going rate in most nationalised banks is about half of SICB’s rates.

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Indo-Pak trade talks start today
Tribune Reporters

New Delhi, August 10
India will be looking forward to bring Pakistan around to sign the Safta accord and also have direct trade between the two countries when the two-day secretary-level trade talks begin in Islamabad from tomorrow.

Commerce Secretary Dipak Chatterjee is already in Pakistan for the talks.

Sources said India would be impressing upon Pakistan the need for a trade pact between the two countries, which would help increase the trade. Presently India exports about $ 300 million worth of goods to Pakistan and imports nearly $ 80 million of it.

Mr Chatterjee is also expected to put forward India’s demand for being granted the Most Favoured Nation (MFN) status by Pakistan.

These talks would also form a part of the overall composite dialogue that had been initiated between the two countries as a part of the peace process.

According to sources, the agenda could include subjects like eradication of tariff and non-tariff barriers. But the most important thing would be to work out the ways to enhance the trade volumes between the two countries.

Mr Chatterjee, while talking to newspersons, said that increased direct trade could be beneficial for both countries.

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UP ropes in Nilekani
Tribune News Service

Lucknow, August 10
Infosys Managing Director Nandan Nilekani has been roped in to formulate a new information technology policy for Uttar Pradesh that aims to develop Noida and Greater Noida as the new technology destination for northern India.

Mr Nilekani has laid stress on e-governance on the pattern of Karnataka which has 57 such cities. Lucknow is all set to become the first e-governed city in Uttar Pradesh. The new policy would focus on hardware and convergence of communication technology, including cellular phones along with their software.

The decision was taken at the Uttar Pradesh Development Council (UPDC) meeting held yesterday. The meeting was attended by Chief Minister Mulayam Singh Yadav, UPDC chairman Amar Singh, industrialists Anil Ambani, Subroto Roy, Adi Godrej, filmstar Amitabh Bachchan and a banker from ICICI Bank, Mr K.V. Kamath.

Regarding the entertainment sector, Mr Singh said Uttar Pradesh would soon formulate a policy under the guidance of Mr Bachchan to promote cinema in the state by giving prominence to multiplexes.

There is also a good news for the farmers in the state with the finalisation of the horticulture and food processing policy. Multinational giant Hindustan Lever is taking keen interest in food-processing industry, Mr Singh said.

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Reconsider EPF rate cut: Left
Tribune News Service

New Delhi, August 10
Even before the din has dissipated on the FDI issue, the Left parties and the UPA government are on a collision course once again on the EPF interest rate cut.

The Left parties today demanded that the government should “reconsider” the decision to cut the EPF rate to 8.5 per cent from 9.5 per cent.

While CPI leaders said that it would rake up the issue during the UPA-Left Coordination Committee meeting to be held later this month, RSP leader Abani Roy said the government could not sustain if it pursued anti-worker policies.

Stating that the government’s action was “unacceptable”, the CPM in a statement compared the UPA government’s policies to that of the previous NDA government.

Justifying its demand, the statement said, “With the inflation rate going up, there is no justification for a reduction in the interest rates for the EPF. Such a reduction will only harm the interest of the workers and erode their savings further,” it added.

Forward Bloc General Secretary Debabrata Biswas said the Finance ministry did not play its role properly and that it was “unfortunate” that the government did not consult the Left before taking a formal decision.

Despite opposition from the trade unions, the Rs 1.28 lakh crore Employees Provident Fund Organisation (EPFO) yesterday announced an “interim” EPF interest rate of 8.5 per cent for 2004-05. While the recommended rate for 2003-04 was 9.5 per cent, the Finance Ministry is insisting that it be brought down to 8 per cent in conformity with the soft interest rate regime.

Major central trade unions and federations of employees belonging to banks and other financial sectors have already given a call for observing a national The Left parties said they would support the agitation being launched by the trade unions as their demand for a raise in the interest to 12 per cent was “fully justified”.

A betrayal: BJP

Meanwhile, the BJP today while condemning the UPA government’s decision to cut the EPF interest rate said the Congress-led government had “committed yet another act of betrayal of its promise of caring for the common man.

“This has happened at a time when inflation has risen to 7.5 per cent and is threatening to go up further. Thus, there has been a double assault on the incomes and living standards of the common people,” BJP president M Venkaiah Naidu told newspersons here.

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Auto scene
Ford Ikon models roll out
Sridhar K. Chari
Tribune News Service

Bangalore, August 10
Ford India has unveiled a new line up of its successful Ikon range of mid-sized cars and announced a major ramp-up in production with a full second shift starting this month at its Maraimalainagar Plant near Chennai.

Vice-President Marketing Vinay Piparsania said here today that 700 new employees have been recruited at the plant. Current production was ‘capped out’ at 50,000 units (including exports to Mexico, Brazil and South Africa), and the ramp up would mean a total capacity of 1 lakh units. Full capacity would be reached within a year or two. Ford plans to grow from 90 dealer outlets in 71 cities to 105 dealers in 86 cities by end 2004.

In the new line up, the existing Ikon ZXI (1.6) and Flair (1.3) have been enhanced and new models EXi (1.6) and LXi (1.3) have been introduced. The 1.3 Flair has been given fresh interiors and new colours, while the new 1.3 LXi is cheaper with manual steering. The ZXi has been given an in-dash CD player, synchro leather and fabric seats and tubeless tires. The new 1.6 EXi, with new interiors and colours, and programmable intermittent wipers is a cheaper option.

High localisation, improved efficiencies and capacity addition and utilisation meant that these products were available at competitive price points, Ford President David Friedman stated. The prices (ex-Delhi) are LXi: Rs 4.49 lakh; Flair: Rs 4.79 lakh; EXi - 5.49 lakh; and ZXi - 5.99 lakh.

The first half of 2004 had already seen a 24 per cent growth in the passenger car market, while the mid-sized segment, in which the Ikon is a player, has grown 45 per cent. As many as 18,500 Ikons were sold in 2003, and the target this year was of 27,000 units.

Fiat India

After writing off losses of Rs 1,300 crore in its Indian subsidiary, Italian auto-maker Fiat is preparing a blueprint to rejig its business in the country, officials said today.

Fiat India Director Commercial Ravid Bharadwaj told reporters here that the Italian parent, which had faced financial problems in recent years, was preparing a blueprint for a new strategy in India.

“The blueprint is being prepared for Fiat India, but there is no timeframe set when it would be implemented,” he said, after launching “Fiat Petra” that marks the company’s foray into the diesel “C” segment which is estimated to grow double the industry average. — PTI

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BRIEFLY

Mahindra
Chandigarh, August 10
Mahindra British Telecom (MBT), the world’s largest independent IT service provider, today announced first quarter growth in income of 45 per cent, up from Rs 1,543.38 million to Rs 2,245.37 million over the corresponding period last year. — TNS

Gujarat Ambuja
Chandigarh, August 10
Gujarat Ambuja Cements Limited (GACL) today announced a tie-up with National Thermal Power Corporation (NTPC), Dadri, to utilise 3.5 lakh tonnes of flyash produced by NTPC. For this purpose, GACL will set up a 1.2 million tonnes (MT) cement manufacturing facility in the vicinity of NTPC, in Dadri, Uttar Pradesh. — TNS

MMFSL profit up
Chandigarh, August 10
The Board of Directors of Mahindra & Mahindra Financial Services Limited (MMFSL), today said the company’s in the quarter ended June 30, 2004 made a net profit of Rs 16.73 crore , a growth of 76 per cent from Rs 9.49 crore during the same period last year. — TNS

A-I, Lufthansa pact
Mumbai, August 10
National flag carrier Air-India and Lufthansa today signed a strategic alliance to improve their market leadership on the India-Europe-USA route. The agreement was signed between A-I Chairman V Thulsaidas and Wolfgang Mayrhuber, Chairman of the Executive Board of Deutche Lufthansa AG. — UNI

India show
New Delhi, August 10
Confederation of Indian Industry will take its flagship event ‘Made in India’ to Thailand. The show will be held from August 11 to 14 in Thailand to strengthen the communication links between the two countries and create more comprehensive awareness about India’s industrial progress. — PTI

DTDC in NY
New Delhi, August 10
Courier and cargo networking company DTDC has opened offices in London and New York. It has associate partners in Singapore, Dubai, Bhutan, Bangladesh and Nepal, a press note said. — TNS

LPG genset
Mumbai, August 10
Birla Power Solutions Ltd in association with Hindustan Petroleum Corporation Ltd today launched a range of LPG generators. These will be available across the country through the network of HP gas distributors. — UNI

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