New Delhi, February 23
Prime Minister Manmohan Singh’s office has pulled up the Industry Ministry for not responding to concerns raised by Congress President Sonia Gandhi over investment by multinational firms in the retail sector and asked for a detailed study on the subject.

Days before the visit of Wal-Mart officials to India for discussing their venture with Bharti group, the PMO sent a missive to the Department of Industrial Policy and Promotion, headed by Kamal Nath, saying that “the Prime Minister has observed that the AICC President had raised a specific issue in her letter.” She had referred to the need for a ‘careful study’ of the likely impact of the entry into retail trade of transnational supermarkets on the livelihood of small-scale retailers and vendors.

“The DIPP has not responded to this issue in its comments (sent to the PMO on February 7, 2007),” the letter said.

When asked about the communication, the PMO declined to comment on the issue.

Sonia Gandhi had written a letter to the Prime Minister last month, expressing her concerns over FDI in retail as also the impact of big domestic players on small neighbourhood stores.

 

Pact with Wal-Mart soon: Sunil Mittal Wal-Mart, the world's largest retailer, and Bharti Enterprises are very close to finalising a deal for a retail joint venture, Bharti Enterprises chairman Sunil Bharti Mittal said here today. Talking to reporters here after meeting Planning Commission Deputy Chairman Montek Singh Ahluwalia, along with visiting Wal-Mart Vice-Chairman Mike Duke, he said a joint venture agreement with Wal-Mart for cash-and-carry and back-end linkages had been finalised and legal agreements were being worked out. Bharti retail would not get a preferential treatment from the JV as it would supply to the kirana stores also, he said when asked if the agreement with Wal-Mart was exclusive. On whether Wal-Mart saw any hurdles in the backdrop of Congress President Sonia Gandhi’s letter to the Prime Minister advising caution in allowing entry to the US retailer into India, Mittal said: “Wal-Mart is going to apply for a JV, only in the area where the policy exists.” The entry of Wal-Mart, whose revenue of about $320 billion is bigger than the size of India’s retail market ($300 billion ), is viewed by some as a threat to the about 13 million mom and pop stores in the country. But the US retailer would be investing only in cash-and- carry business, where 100 per cent FDI is already allowed. Asked about Wal-Mart describing the talks with Bharti as preliminary, Mittal said it was only for technology transfer. Wal-Mart had said that in line with existing guidelines, Bharti Retail had approached it for technology support in logistics, supply chain and back-end technology. Seeking to allay fears its entry in India would wipe out neighbourhood stores, a Wal-Mart spokesperson said: a cash-and-carry wholesale operation has the potential to provide much needed support to small business owners and retailers by selling them quality merchandise at competitive prices. Mittal said the company had not yet decided on branding of the venture and that market studies were on for the purpose.

New Delhi, February 23
US retail giant Wal-Mart's tie-up with the Bharti Group for a retail venture today received a boost with the government endorsing the contract farming route for procurement of farm products.

"The expertise of Wal-Mart in the area of supply chain will definitely be useful for Bharti to set up their own network," agriculture, food and consumer affairs minister Sharad Pawar said after a meeting with Wal-Mart vice-chairman Mike Duke and the Mittal brothers from Bharti.

Pawar said, on the face of it, it looked like that under the contract with Bharti, farmers would be able to sell their produce at a better remunerative price.

In reply to a query, he made it clear that differences among political parties were limited to permitting foreign direct investment in the retail sector and not in outsourcing of agricultural produce.

"The route of contract farming will be definitely beneficial for farmers and producers because they will be able to realise a good price for their produce. From Bharti side they will be comfortable as they can get the items they have signed under the agreement for their organisation," he said.

In fact, one of the major problems that farmers were facing is lack of effective marketing and remunerative price.

"From this angle, efforts which Bharti group is making is certainly useful for India's farming community," he said. — PTI 

New Delhi, February 23
The government should rein in inflation if the economic growth of 9 per cent is to benefit millions of poor. This was stated by the President A.P.J. Abdul Kalam in his address to a joint-sitting of the two Houses of Parliament, marking the opening of the Budget Session.

In his hour-long speech, Kalam outlined the priorities of the UPA government, ranging from checking inflation to food security, sustaining GDP growth to welfare of minorities, convincing Pakistan to stop infiltration to cross-border terrorism, modernisation of armed forces to indigenous three stage nuclear programme and revitalising higher education.

Data released, after he had spoken, showed that inflation was marginally down to 6.63 % for the week ending February 10. It was only slightly lower than the previous week's rate of 6.73 %, which was the highest in the past two years.

Kalam, who was making his last speech to Parliament before demitting office at the end of a five-year tenure in July, referred to inflation right at the beginning of his address to underscore the government's concern.

He listed out initiatives by the government, particularly in the past eight weeks, to improve supplies of essential commodities as also fiscal policy steps to check inflation.

However, in recent months, the rate of inflation had shown an upward trend, Kalam observed, adding that as growth and investment accelerated rapidly and incomes rose, "there is bound to be a rising demand for all products, particularly products of day-to-day consumption".

He said: “My government is committed to providing food security to the poor and is taking steps to further strengthen the public distribution system.”

Kalam indicated that the action on the much-debated report of the Sachar Committee on the backwardness of Muslims was in the offing.

He announced that the government was considering the formulation of a programme for those districts and towns that have highest concentration of minority population.

Referring to the recent controversies over land acquisition for industrial development, Kalam said the government was committed to bring in a new rehabilitation policy to be backed by the required amendments in the Land Acquisition Act.

Lauding six per cent growth in the agrarian sector in 2005-2006, Kalam stressed the need for sustaining the trend but expressed concern over farmers committing suicides in various parts of the country.

"A special package amounting to more than Rs 16,000 crore is being implemented in 31 districts worst-affected by farmers suicides... An expert group is looking into the problems of agricultural indebtedness and will suggest measures to provide relief to farmers in distress," he said.

On internal security, he said the government would continue to impart a "healing touch" both in Jammu and Kashmir and in the North-East, while maintaining utmost vigil against terrorist and extremist forces.

Mumbai, February 23
SEBI has lifted the ban on undertaking fresh business by Karvy Computershares for its alleged involvement in the IPO scam.

SEBI, however, made it clear that the lifting of the ban was an interim measure pending final disposal of the case by its enquiry officer.

In its interim order on the IPO scam issued in April last year, SEBI had directed Karvy Computershares not to act as a registrar to an issue and as a share transfer agent.

The SEBI order said that Karvy Computershares in its capacity as registrar to an issue had allegedly facilitated the key operators and financiers in cornering shares in IPOs. SEBI made it clear that today's order would, however, not come in the way of continuation of proceedings against Karvy Computershares.

Karvy Computershares is a part of the Karvy Group. Both Karvy Stock Broking Private Limited and Karvy Computershares have filed appeals challenging the SEBI's interim order. — PTI

Chandigarh, February 23
Widening of tax base, more fiscal concessions and more allocation for infrastructure development is the wish list of industry in north India from the budget 2007-08.

While the industry is ecstatic over the economic growth shown by all sectors during this fiscal, it is looking towards the finance minister P Chidambaram to remove all bottlenecks in accelerating further growth. Maintaining that the economy is on a sound development track, the doyens of industry in the region want the finance minister to provide more allocation for infrastructure development and for the farm sector.

Talking to TNS here today, CEO of Liberty Group and chairman of CII, northern region, Adesh Gupta said the industry was looking forward initiatives in building infrastructure like airports, better road connectivity and improvement in power generation and supply. “Since the manufacturing sector has shown a high growth rate (11. 3 per cent), we expect the government to select this sector for employment generation, especially in tourism, apparel, footwear and auto industry. Though we do not foresee a large scale reduction in taxation, we expect widening of tax structure to include service sector,” he said.

Mr Manmohan Nandwani, COO, Spice Telecom, said the Indian mobile industry was a major contributor to social and economic growth of the country, in terms of employment generation, GDP growth and rural development. “Thus it is important that the burden of levies on the telecom sector be lowered and simplified to ensure maximum growth in this sector by making mobile telephony more affordable,” he said, adding that the present structure of multiple levies on the sector should be removed.

The rising inflation is also a cause of concern and the industry expects fiscal concessions to curb inflation. Said general manager, PNB, north zone, “The government should concentrate on the agriculture sector as well as small and medium enterprises (SME). The cluster approach in the SME sector, like development of food parks, agriculture equipment cluster, or auto cluster et al, should be encouraged’’.

The agriculture sector, too, is looking forward to the budget so that it gets a fillip. With growth in this sector at an all-time low of 2.7 per cent, farmers like R.S. Chauhan, a leading horticulturist of Kotgarh in Himachal Pradesh wants the government to strengthen research and development in agriculture to increase the crop yield and for getting high value crops. 

San Francisco, February 23
A US jury has found Microsoft guilty of infringing Alcatel-Lucent patents and ordered the software giant to pay the French-US firm $1.5 billion.

"We think this verdict is completely unsupported by the law or the facts," Microsoft general counsel Tom Burt said yesterday. "We will seek relief from the trial court, and if necessary appeal." Before it merged with Alcatel, Lucent filed a US federal lawsuit in 2003 claiming Microsoft partners, including computer makers Dell and Gateway, used Windows software that infringed its patented technology.

The jury trial that ended in US District Court in the southern California city of San Diego yesterday centered on MP3 audio technology used in the Windows media player software. — AFP

Brussels, February 23
Arcelor Mittal, the world's largest steelmaker, said today it would invest $2.2 billion to develop iron ore mining in Senegal, pursuing its strategy of increasing the share of metal supply it directly owns.

''Once completed, the Faleme project will prove to be an important and competitive source of iron ore supplies for our European plants,'' Arcelor Mittal majority owner and Chief Executive Lakshmi Mittal said.

The steel giant said it aimed to achieve annual production capacity of between 15 million and 25 million tonnes and that total estimated reserves were approximately 750 million tonnes.— Reuters