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THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

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B U S I N E S S

Public sector banks not to up home loan rates 
New Delhi, February 5
Finance Minister P Chidambaram today asked state-owned banks not to raise interest rate on home loans and rebalance their loans to moderate credit growth to some sectors of the economy.

SBI public issue next year: CMD 
To tap $700 m from overseas by March

New Delhi, February 5
SBI plans to come out with a public offer of equity next year, in addition to plans to raise $700 million from overseas market and long-term capital by March-end this year.

FDI cap hike in select aviation areas mooted 
Govt considering cess on air travel: Patel
New Delhi, February 5
The Congress-led UPA Government is actively considering imposing a cess on air travel to fund development of non-viable airports and ATR routes, coupled with raising the FDI cap in helicopter and sea plane operations, charters, air cargo and non-scheduled air operations.

50 pc FDI in higher education proposed 
New Delhi, February 5

The Group of Ministers has recommended 50 per cent FDI in higher education, paving the way for foreign universities to set up their campuses in India, in partnership with local institutions. "The GoM recommendations will soon go to the Cabinet," highly placed sources said.

Nooyi is PepsiCo Chairperson
Houston, February 5
Indian-American corporate honcho Indra Nooyi, known as one of the most powerful woman in the US, has been elected as the Chairperson of the PepsiCo, the Board of Directors of the company announced today.                            
Indra Nooyi
Indra Nooyi


An employee of Victor Company of Japan (JVC) displays a new hard disk camcorder "Everio GZ-MG575" in Tokyo on Monday. Equipped with a 5.37 mega-pixel CCD, 6.3 - 63mm/F3.5 zoom lens, and a built-in 40GB HDD, it allows the user to record 14 hours of DVD-quality digital video images. JVC will put it on the market this month at an estimated price of 140,000 yen ($1,160).
An employee of Victor Company of Japan (JVC) displays a new hard disk camcorder "Everio GZ-MG575" in Tokyo on Monday. Equipped with a 5.37 mega-pixel CCD, 6.3 - 63mm/F3.5 zoom lens, and a built-in 40GB HDD, it allows the user to record 14 hours of DVD-quality digital video images. JVC will put it on the market this month at an estimated price of 140,000 yen ($1,160). — AFP

EARLIER STORIES

 

PTL to market engine oil
Chandigarh, February 5
Punjab Tractors Ltd. (PTL) and Tide Water Oil Co. (India) Ltd., manufacturer of lubricants, have entered into an alliance  to market genuine engine oil for tractors manufactured by it.

Hindujas start due diligence for Hutch
Mumbai, February 5
NRI businessmen Hindujas today began studying the books of Indian mobile firm Hutch-Essar for which they are understood to have roped in leading Spanish Bank 'Banco Santander' for financing the multi-billion dollar deal.
Finance Minister P. Chidambaram with Minister of Railways Lalu Prasad Yadav at the inaugural session of international conference on India's infrastructure in New Delhi on Monday.
Finance Minister P. Chidambaram with Minister of Railways Lalu Prasad Yadav at the inaugural session of international conference on India's infrastructure in New Delhi on Monday. — PTI

FM woos foreign investors to build infrastructure
New Delhi, February 5
With an estimated $320-billion investment needed in the next five years to build India’s infrastructure, Finance Minister P Chidambaram underlined the need for tapping foreign savings and expected dedicated infrastructure and debt funds to be launched within a month.

IPCL lock-out at Allahabad unit
Mumbai, February 5
Indian Petrochemicals Corporation Ltd (IPCL) said today a lock-out had been declared at its Allahabad unit, following a strike by workers.

HSBC offer
Mumbai, February 5

HSBC Investments today launched the HSBC Unique Opportunities Fund aimed at companies facing ''out-of-ordinary'' conditions.
A model parades on a runway as US consumer products giant Procter and Gamble launches its latest line of beauty products in Beijing on Sunday.
A model parades on a runway as US consumer products giant Procter and Gamble launches its latest line of beauty products in Beijing on Sunday. Procter and Gamble recently resumed the sale of its Japan-made SK-II cosmetics line in China after levels of toxic materials found in the products were deemed harmless.— AFP

Indiabulls to reorganise business
Mumbai, February 5

Indiabulls Financial Services said today that it would re-organise its business, including the demerger of its brokerage services -- Indiabulls Securities Ltd.

PFRDA to appoint four fund managers 
New Delhi, February 5
Pension Fund Regulatory and Development Authority (PFRDA) will be implementing new pension schemes for Central and 19 state government subscribers by appointing Central Record Keeping Agencies (CRAs) and four fund managers in next three months through an executive order route since PFRDA Bill is still pending in Parliament, PFRDA Chairperson D Swarup disclosed here today.

L&T ready-mix concrete plant
Mumbai, February 5
Larsen & Toubro Ltd (L&T) has set up a Dh 48 million ready-mix concrete (RMC) plant with a capacity of 240 cubic metres per hour in Jebel Ali, Dubai. The company said the plant would be operated by ECC, the company’s construction division, and meet the growing demand for ready-mix concrete in the UAE.

Qatar opposes further OPEC output cut
Abu Dhabi, February 5
Qatar's Energy Minister Abdullah bin Hamad al-Attiyah said today his gas-rich emirate was "for the moment" against further production cuts by OPEC.
A model displays a Dopod International’s Windows-compatible mobile phone/ PDA at its launch in Mumbai on Monday.
A model displays a Dopod International’s Windows-compatible mobile phone/ PDA at its launch in Mumbai on Monday. — AFP

Tata Motors inks pact with MDI
Mumbai, February 5

Tata Motors has signed an agreement with MDI of France for application in India of MDI's path-breaking technology for engines powered by air.

 

Suzuki to triple diesel engine output in India
Tokyo, February 5
Suzuki Motor said today that it would triple its diesel engine production in India within about three years in response to surging global demand.

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Public sector banks not to up home loan rates 

New Delhi, February 5
Finance Minister P Chidambaram today asked state-owned banks not to raise interest rate on home loans and rebalance their loans to moderate credit growth to some sectors of the economy.

"I have asked the banks to hold interest rate on home loans at the current rate," he told reporters after a meeting to review quartely performance of public sector banks.

"I am glad all public sector banks have agreed to hold interest rate on home loans at the current rate," he said.

Home loans cost around 9-10 per cent (floating) and 11 per cent (fixed), with rates and tenure varying across banks.

Referring to recent monetary measures announced by the RBI, Mr Chidambaram said banks have been asked to rebalance their loans to comply with the increased provisioning of capital by the bank regulator for loans on credit card, for buying shares, commercial real estate and borrowings from non-banking finance companies.

Expressing satisfaction with the performance of banks, he said bank advances have grown by 22.5 per cent during the third quarter this fiscal on year-on-year basis, and credit by 30.2 per cent.

The non-agricultural bank credit has grown by 31.2 per cent, while lending to small and medium enterprises posted a growth of 28.4 per cent.

Referring to bank credit to the farm sector, Mr Chidambaram said government was confident to cross the target of Rs 1,75,000 crore lending to farm sector for this fiscal.

The bank credit to agriculture sector, he said, has increased by 28.4 per cent during the third quarter this fiscal and Rs 1,49,343 crore were outstanding in the farm sector.

Referring to education loans, he said banks have been asked to bring down difference in interest rate of different banks. Meanwhile, education loans increased to Rs 12,337 crore, posting a growth of 31 per cent, he said.

Allaying fears of high rate of default among home loan customers, the Finance Minister said banks have reported around 99 per cent recovery in home loans. He said only a few fraudulent borrowers in home loan segment were causing an increase in non-performing assets (NPA).

Banks have also reported increase in NPA in the credit cards segment, he said, adding that after the new provisions this was likely to moderate.

State-run banks have also assured the government that they would bring down their NPA below 1.32 per cent of total advances, he said, adding that they have ample liquidity and some progress has been made in rebalancing their portfolio as well.

The government has also taken up the issue of money laundering and annual information returns on Bank Cash Transaction Tax, as there have been delay by some banks, he added. — PTI 

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SBI public issue next year: CMD 
To tap $700 m from overseas by March

New Delhi, February 5
SBI plans to come out with a public offer of equity next year, in addition to plans to raise $700 million from overseas market and long-term capital by March-end this year.

"We have plans to come out with a public offer in the next fiscal, however, we still have to finalise the size of the offer," SBI Chairman O. P. Bhatt said today on the sidelines of Finance Minister P. Chidambaram's meeting with public sector banks.

He said once the RBI transferred its 59.73 per cent in the SBI to the government, the state holding in the bank could be brought down to 51 per cent in phases.

The government's stake could come down to 55 per cent under the present SBI Act, but after the amendment to the Act, which is pending in Parliament, the stake could be reduced to 51 per cent.

The reduction in the stake "will depend how much funds we want to raise and at what price," Mr Bhatt said, adding that the bank could raise funds through a public issue or a rights issue or both.

The bank would raise $700 million tier-II funds from the overseas market by March end this year.

In the wake of the RBI's recent monetary measures, the SBI chief said: "Obviously, there is some pressure (on liquidity)," but the bank will not raise the interest rate on home loans for the time being. The bank had no plans to raise the PLRany time soon either, adding that the net interest margin of over 3 per cent would be maintained. — PTI 

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FDI cap hike in select aviation areas mooted 
Govt considering cess on air travel: Patel
Tribune News Service

New Delhi, February 5
The Congress-led UPA Government is actively considering imposing a cess on air travel to fund development of non-viable airports and ATR routes, coupled with raising the FDI cap in helicopter and sea plane operations, charters, air cargo and non-scheduled air operations.

A proposal to raise the FDI cap in specific areas has been floated for consideration of the Union Cabinet, Civil Aviation Minister Praful Patel said here today.

He said his ministry had mooted 100 per cent FDI in helicopter and sea plane operations along with maintenance, repair and overhaul facilities.

For non-scheduled and cargo operations, the ministry has suggested raising the FDI cap from 49 per cent to 74 per cent. The participation of foreign airlines may also be considered in the air cargo sector.

Mr Patel explained that the cap on foreign funds in domestic carriers would remain at 49 per cent and said there was no proposal to allow participation of foreign airlines in this area.

The government was actively considering allowing 100 per cent private development of greenfield airports provided the player could guarantee the land.

Mr Patel welcomed private players as it was not possible for the government to acquire land for each and every project. "If the private players can provide land we will objectively look into the proposal for merchant airports. The new airport should be at a reasonable distance from the existing one so that air space and other technical matters could be managed comfortably.

He said his ministry was considering having a conference with all state governments for developing aviation infrastructure, including pooling about 300 airstrips in different parts of the country to make them operational and economically viable.

About the cess, the minister said the effort was either to redefine the existing passenger service fee or have an additional levy.

Mr Patel said the Naresh Chandra Committee had recommended such a cess though its quantum and timeframe was yet to be decided.

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50 pc FDI in higher education proposed 

New Delhi, February 5
The Group of Ministers has recommended 50 per cent FDI in higher education, paving the way for foreign universities to set up their campuses in India, in partnership with local institutions. "The GoM recommendations will soon go to the Cabinet," highly placed sources said.

They said the GoM headed by Human Resource Development Minister Arjun Singh has said there should be a cap of 50 per cent on the stake by foreign universities in joint venture with the Indian partners.

The criteria suggested by the GoM is likely to stipulate that only well-recognised and established universities from both India and abroad should be allowed to set up their campuses in the country.

Both government and private universities, including deemed universities, would be allowed to forge alliances with the overseas players.

The sources said while amendments might be required in the University Grants Commission Act, a separate Bill allowing leading foreign universities to set up base in India, was also under consideration.

The preliminary interaction between the government and foreign educational institutions showed that the latter would have no problem in meeting the social obligations, including reservation.

The consensus on allowing foreign universities is significant since in the past the question of reservation and extent of FDI has been hotly debated.

According to estimates, 1,30,000 students go to foreign universities annually. The setting up of Indian campuses of foreign universities would help the growing middle class students, who spend $ 4 billion every year on education abroad. — PTI 

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Nooyi is PepsiCo Chairperson 

Houston, February 5
Indian-American corporate honcho Indra Nooyi, known as one of the most powerful woman in the US, has been elected as the Chairperson of the PepsiCo, the Board of Directors of the company announced today.

Nooyi, 51, is currently Chief Executive Officer of the more than $32 billion global convenient food and beverage company, a role she assumed on October 1, 2006.

PepsiCo Board of Directors said it has elected as chairperson its chief executive Indra K Nooyi, as Chairman of the Board, effective when Executive Chairman Steven S Reinemund, 58, retires on May 2 as he announced last August.

"I'm incredibly honoured by the Board's confidence, and extraordinarily fortunate to follow in the footsteps of Steve Reinemund and all my illustrious predecessors," said Nooyi.

"PepsiCo is on a sound strategic course with solid momentum thanks to Steve's leadership, and along with every PepsiCo associate, I'm looking forward to building on the lasting legacy created by him, Roger, Wayne, Don and Herman," she said.

Nooyi becomes the fifth Chairperson and Chief Executive Officer in PepsiCo's 42-year history.— PTI

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PTL to market engine oil
Tribune News Service

Chandigarh, February 5
Punjab Tractors Ltd. (PTL) and Tide Water Oil Co. (India) Ltd., manufacturer of lubricants, have entered into an alliance to market genuine engine oil for tractors manufactured by it.

The product was launched by Mr A.M. Sawhney, Director 
(Marketing), PTL, 
and Mr N.R. Padmanaabhan, Chief Executive, Tide Water Oil, here today.

It will be available at more than 500 PTL dealers and tide Water outlets across the country. 

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Hindujas start due diligence for Hutch

Mumbai, February 5
NRI businessmen Hindujas today began studying the books of Indian mobile firm Hutch-Essar for which they are understood to have roped in leading Spanish Bank 'Banco Santander' for financing the multi-billion dollar deal.

Mr Ashok Hinduja, Executive Chairman of Hinduja TMT, said "the due diligence has started already and since it is a very big deal, (for) how many days it will continue can only be known during the week. Our professional team is on the job".

According to sources, Fox Mandal, one of the country's oldest and largest full-service legal organisation, is the legal adviser to the proposed exercise for the Hindujas, while US-based company Deloitte and Touche has been appointed as an adviser.

Banco Santander is Spain's most important private bank and its network of branches, stakes in other banks and takeovers extends well beyond the Spanish borders, to Portugal and Britain.

Mr Hinduja, however, declined to disclose the composition of its professional team that would scrutinise Hutch-Essar's books, saying that there is a non-disclosure agreement with the partners.

The company has put together a team of 30 professionals of legal, accounting and financial advisers.

The Hindujas were to undertake due diligence on January 24, which could not take place as other suitors had not completed the exercise then.

While Hutch-Essar's Indian partner, Essar, is through with confirmatory diligence of the company, Reliance Communications is in the process and British telecom giant Vodafone just weeks away from announcing a formal bid.

However, sources associated with the process said a decision on the sale of Hong Kong-based HTIL's 67 per cent stake in Hutch-Essar was unlikely before March.

Though keen on acquiring the mobile venture, the suitors are unlikely to fuel a bidding war. Vodafone CEO Arun Sarin said during his visit to India last month that the company would not pay "over the top" in the multi-billion dollar battle.

The Hinduja group held a 5.1 per cent stake in Hutch-Essar until June last year.

The Hindujas had put a non-binding bid for acquiring a 67 per cent stake in HEL, the joint venture between the Essar group and Hong Kong-based Hutchison Telecommunications International Ltd. — PTI 

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FM woos foreign investors to build infrastructure
Tribune News Service

New Delhi, February 5
With an estimated $320-billion investment needed in the next five years to build India’s infrastructure, Finance Minister P Chidambaram underlined the need for tapping foreign savings and expected dedicated infrastructure and debt funds to be launched within a month.

Inviting foreign equity to build India’s infrastucture, the Finance Minister said, “the government has allowed 100 per cent foreign equity in most infrastructure sectors and I urge foreign investors to view it as an opportunity.”

Inaugurating an international conference on ‘Meeting India’s infrastructure needs with public-private partnerships (PPP) - the international experience and perspective’, organised by the World Bank and International Finance Corporation, Mr Chidambaram said the PPP model was the only lasting solution to improve the country’s ailing infrastructure, which was acting as main deterrent in the growth of India’s economy.

Encouraging increase in savings by domestic households in India, he said, “Twenty-two per cent savings comes from Indian households and to raise investments for the growth of infrastructure, we need the savings of other countries as well, not only our savings,” he said.

Conceding that there were weaknesses relating to policy and regulatory framework of infrastructure, the Finance Minister said since many of the infrastructure projects have to be located in states, they ought to address these forthwith.

Pointing out that there was a dire need for developing innovative instruments to raise debt and equity, Mr Chidambaram admitted that there was lack of capacity in public institutions and public offices to handle and develop public-private partnership projects.

Welcoming comparisons between the two emerging economies of India and China, he said “there is much to learn from China and we wish to emulate China in infrastructure.”

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IPCL lock-out at Allahabad unit 

Mumbai, February 5
Indian Petrochemicals Corporation Ltd (IPCL) said today a lock-out had been declared at its Allahabad unit, following a strike by workers.

"Due to an illegal strike at the Allahabad unit of the company, resulting into behaviour causing apprehension amongst management staff and their families, the management has declared a lock-out with effect from February 4 at 6a.m.," the petrochemicals company informed the Bombay Stock Exchange. — PTI

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HSBC offer

Mumbai, February 5
HSBC Investments today launched the HSBC Unique Opportunities Fund aimed at companies facing ''out-of-ordinary'' conditions.

The minimum investment is Rs 10,000. The fund will automatically convert into an open-ended fund at the end of three years. The offer closes on February 22. — UNI

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Indiabulls to reorganise business

Mumbai, February 5
Indiabulls Financial Services said today that it would re-organise its business, including the demerger of its brokerage services -- Indiabulls Securities Ltd.

The Board of Directors has considered the proposal entailing the demerger of Indiabulls Securities on a going concern basis and plans to list the resulting entity after the demerger, Indiabulls Financial informed the Bombay Stock Exchange.

"Indiabulls expects that the restructuring initiatives would unlock significant value and also streamline the operations and ownership structure," the company said.

Additionally, it had also proposed the amalgamation of the entire business and undertaking of Indiabulls Credit Services Ltd with the company, it added.

The Board also considered the proposal for acquisition of equity shares of Indiabulls Housing Finance Ltd (IHFL) held by certain minority investors and had authorised some persons to negotiate and finalise the terms and conditions on which the company shall acquire the equity shares of IHFL.

The Board had appointed advisers and authorised a committee to prepare and present a draft proposal and related documents for the restructuring of the company to be placed before and approved by the Board at a later 
date. — PTI 

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PFRDA to appoint four fund managers 
Tribune News Service

New Delhi, February 5
Pension Fund Regulatory and Development Authority (PFRDA) will be implementing new pension schemes for Central and 19 state government subscribers by appointing Central Record Keeping Agencies (CRAs) and four fund managers in next three months through an executive order route since PFRDA Bill is still pending in Parliament, PFRDA Chairperson D Swarup disclosed here today.

Speaking at a seminar on ‘Indian pension fund industry: the way forward’, organised by Assocham, Dr Swarup also announced that in next couple of years, with new pension schemes in place, the size of domestic pension business would touch a level of Rs 2 lakh crore.

He, however, warned that in the absence of new pension schemes in place, the total fiscal stress both on the Central and state governments for extending pension benefits to their employees would increase to Rs 1,60,000 crore per annum from Rs 75,000 crore per annum now.

Responding to the suggestion mooted by Mr S.K. Jindal, Chairperson, Assocham Expert Committee on Investments, on how many fund managers will be there, the PFRDA Chairman said the four pension funds managers would be drawn from public sectors companies.

PFRDA has already created an initial corpus of Rs 1,500 crore for the new pension fund schemes, which will offer returns to their subscribers in the range of 14-29 per cent.

Dr Swarup also said the authority has also recommended to the Finance Minister to grant Rs 20,000 to 30,000 worth of investment incentives to new pension fund subscribers to develop this sector, thereby taking the limit of income tax exemptions in various schemes from existing levels of Rs 1 lakh to Rs 1.2 or 1.3 lakh.

Director, Oriental Insurance, Mr Sanjeev Chanana, said the insurance companies should be encouraged to tap the vast pool of pension market. Assocham’s panel on investments also sought opening up of pension schemes to private sector without delay.

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L&T ready-mix concrete plant

Mumbai, February 5
Larsen & Toubro Ltd (L&T) has set up a Dh 48 million ready-mix concrete (RMC) plant with a capacity of 240 cubic metres per hour in Jebel Ali, Dubai. The company said the plant would be operated by ECC, the company’s construction division, and meet the growing demand for ready-mix concrete in the UAE.

In India, the company manufactures and supplies about three million cubic metres of the company concrete per annum through 60 plants spread across the country. These plant operations are supported by a fleet of 500 transit mixers, six mobile concrete pumps and 100 static concrete pumps. The company enjoys 28 per cent market share. — UNI

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Qatar opposes further OPEC output cut

Abu Dhabi, February 5
Qatar's Energy Minister Abdullah bin Hamad al-Attiyah said today his gas-rich emirate was "for the moment" against further production cuts by OPEC.

"It is not necessary for the moment to call an extraordinary meeting of OPEC or to institute a further cut in production," said the minister, who was taking part in an economic forum in Abu Dhabi.

"We have to wait to see the impact on the markets of the latest reductions," Mr Attiyah added, as cited by the official WAM news agency.

The OPEC meeting in Nigeria in December decided to cut production by 500,000 barrels per day (bpd) from February 1, following a reduction of 1.2 million bpd in November.

But the market remains sceptical about the reductions, with certain members of the cartel being regularly shown to cheat. Mr Attiyah, whose country is a member of OPEC, was adamant the cuts were being universally applied. — AFP

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Tata Motors inks pact with MDI

Mumbai, February 5
Tata Motors has signed an agreement with MDI of France for application in India of MDI's path-breaking technology for engines powered by air.

The agreement envisages MDI supporting further development and refinement of the technology, and its application and licensing for India. MDI founder Guy Negre said: ''MDI has for many years been engaged in developing environment-friendly engines. MDI is happy to conclude this agreement with Tata Motors and work together with this important and experienced industrial group to develop a new and cost-saving technology for various applications for the Indian market that meets severe regulations for environmental protection. — UNI 

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Suzuki to triple diesel engine output in India

Tokyo, February 5
Suzuki Motor said today that it would triple its diesel engine production in India within about three years in response to surging global demand.

"We will triple our diesel engine production in India to 300,000 units" by March, 2010, a Suzuki spokesman said. "Demand for environmentally friendly diesel engine-powered cars is expected to rise in the coming years," he said.

Suzuki in October launched a diesel engine plant in northern India which has an annual production capacity of 100,000 units, but it is still struggling to keep pace with strong Indian demand. Some of the additional capacity will also cater to Europe.

Roughly 30 per cent of the Indian car market accounts for diesel engine cars. Last year, Suzuki produced 6.3 lakh vehicles there under the Maruti Udyog brand. Suzuki Motor owns 54 per cent of Maruti Udyog, India's largest carmaker. — AFP

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