SPECIAL COVERAGE
CHANDIGARH

LUDHIANA

DELHI



THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS

B U S I N E S S

Cement Cos not to up prices for one year
Commerce Ministry urges FM to cut duty on cement
New Delhi, March 9
Cement manufacturers have agreed to hold the price line and not increase the prices for one year with effect from today despite higher input costs.

Tata Motors signs land pact for small car project
Kolkata, March 9
In another important step toward setting up of Tata Motors' ambitious small car project at Singur, the West Bengal government today signed the land lease agreement with the auto major.

Talk of 2-wheeler safety ploy to sell car: Bajaj
New Delhi, March 9
There's no doubt Ratan Tata had only good intentions when he said he conceived the Rs 1 lakh car as he cared for the safety of those using two-wheelers.

Taming Inflation
Focus on edible oils, milk, says RBI

New Delhi, March 9
As the inflation rate continues to be higher than the RBI’s threshold level of 5 to 5.5 per cent, finance minister P Chidambaram today indicated that he could consider taking measures for lowering prices of oilseeds and fertilisers.

Bill to phase out CST introduced
New Delhi, March 9
The government today introduced bills to phase out central sales tax (CST) in three years and to amend banking regulations to give more operational flexibility to the RBI in the conduct of monetary policy.

No division of Bajaj Auto: Rahul
New Delhi, March 9
Ruling out a complete division of the Bajaj Auto empire between his two sons, Rajiv and Sanjiv, chairman Rahul Bajaj said today they would continue to be part of the company even after the proposed demerger takes place.


Bollywood actor Perizaad Zorabian at the launch of Samsung LCD monitors in New Delhi on Friday. Samsung India has launched three models of its LCD monitors - Myst, Mendel and Mobius - in the 17 to 22 inches screen-size segment priced between Rs 13,800 and Rs 35,000. The company is targeting a 100 per cent jump in its sales this year.
Bollywood actor Perizaad Zorabian at the launch of Samsung LCD monitors in New Delhi on Friday. Samsung India has launched three models of its LCD monitors - Myst, Mendel and Mobius - in the 17 to 22 inches screen-size segment priced between Rs 13,800 and Rs 35,000. The company is targeting a 100 per cent jump in its sales this year. — Tribune photo by Mukesh Aggarwal

EARLIER STORIES

 
A model, taking part in the upcoming India Fashion Week, poses during a promotional campaign for the event in New Delhi on Friday. As many as 87 designers will participate in the six-day Wills Lifestyle India Fashion Week Autumn/Winter 2007 from March 21.
A model, taking part in the upcoming India Fashion Week, poses during a promotional campaign for the event in New Delhi on Friday. As many as 87 designers will participate in the six-day Wills Lifestyle India Fashion Week Autumn/Winter 2007 from March 21. — AFP

RIL arm for overseas oil projects
New Delhi, March 9
Reliance Industries Limited has hived off its overseas oil and gas projects into a separate wholly owned company based in Dubai and is eyeing a tie-up with ONGC Videsh Ltd (OVL) to jointly bid for oil and gas opportunities abroad.

EPF Board meeting today
New Delhi, March 9
A crucial meeting of the Employee Provident Fund Organisation (EPFO) Board tomorrow is likely to be a stormy affair, with central trade unions, including the BMS and the INTUC, determined not to settle for less than 9.5 per cent rate of interest for 2007-08 and the government’s reported insistence on 8.25 per cent.

FDI policy violation in Hutch
Expedite inquiry: HC

New Delhi, March 9
The Delhi High Court today directed the Centre and the Foreign Investment Promotion Board (FIPB) to expedite inquiry against Hong Kong-based Hutchison Telecom for alleged violation of FDI policy.

Mittal may lose race for Chinese Co
Beijing, March 9
China's largest steel producer, Shanghai Baosteel, has set its eyes on Baotou Iron & Steel Group after global steel baron Lakshmi Mittal's bid for a 50 per cent stake in the Chinese company faltered.

Merger creates UAE’s largest bank
Dubai, March 9
Two Dubai-based banks will merge to create one of West Asia’s largest banks with assets of Dh 165 billion, a move seen to extend Dubai's reach as the region's financial hub. Approved by the government, the merger of Emirates Bank International (EBI) and National Bank of Dubai (NBD) took many in the banking sector by surprise.

Shareholders of HTIL okay deal
Hong Kong, March 9
Shareholders of Hutchison Telecommunications International Ltd have approved the $11.1 billion sale of a controlling stake in India's No. 4 cellular operator to Britain's Vodafone Group Plc.

 

 

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Cement Cos not to up prices for one year
Commerce Ministry urges FM to cut duty on cement
S Satyanarayanan
Tribune News Service

New Delhi, March 9
Cement manufacturers have agreed to hold the price line and not increase the prices for one year with effect from today despite higher input costs.

They have also agreed that if any concession is given to them by way of excise duty and other statutory levies, they would pass on the benefit of it entirely to the consumers, commerce and industry minister Kamal Nath said after a meeting with senior representatives of the cement industry, including the president of the Cement Manufacturers Association in the context of the recent increase in the prices of cement.

During the meeting Nath strongly urged the producers to reduce the cement prices which had risen significantly, particularly after February 28, 2007, when an additional excise duty of Rs.200 per tonne was levied on cement costing more than Rs.190 per bag (MRP).

In the Union Budget 2007-08, finance minister P. Chidambaram had substantially increased excise duty on cement to Rs 600 per tonne of cement sold in bags at a price above Rs 190. But as a balance, he announced to slash excise duty on bags priced below Rs 190 mark by Rs 50 per tonne.

Meanwhile, sources said the commerce ministry had, for the benefit of the consumer, urged the finance ministry to reduce by Rs 50 the additional excise duty of Rs 200 per tonne levied on cement costing more than Rs 190 per bag.

The cement producers explained at length the reasons for their inability to absorb the impact of the higher excise duty and also explained why it had to be passed on to entirely to the consumers.

They referred to the increase in the cost of raw materials, particularly fly ash, and the higher energy cost and transportation charges. In particular, they drew the government’s attention to the higher price of coal required to be obtained by them from the open market.

They also mentioned that the sustainable way of controlling prices was to increase supply faster than the demand, which was growing at 10 per cent annually. They had, therefore, taken measures to expand the installed capacity by almost 100 million tonnes in the next three years by incurring an expenditure of over Rs.40,000 crore.

Expressing happiness over the decision of the cement industry to hold the price line for one year, minister of state for commerce and industry Ashwani Kumar told The Tribune that “inflation is a matter of concern for all and everyone wants price to be arrested. We had to engage the cement industry to impress upon the need to hold the priceline and I am delighted that they have responded to our suggestion.”

Asked whether the government’s intervention to hold the priceline of cement amounted to return of the “Inspector Raj”, Kumar shot back : “we don’t want to bring the Inspector Raj back. However, the government’s intervention is justified if there is apprehension or evidence of unjustified profiteering.”

Asked whether there is a move to cut Excise Duty rate announced by the Finance Minister in the Budget, Kumar evaded a direct response, saying that “both Prime Minister Manmohan Singh as well as Finance Minister P.Chidambaram have been on record that the government will take all necessary steps to check inflation.”

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Tata Motors signs land pact for small car project

Kolkata, March 9
In another important step toward setting up of Tata Motors' ambitious small car project at Singur, the West Bengal government today signed the land lease agreement with the auto major.

The lease agreement, which gave Tata Motors complete control of 997 acres, was signed by Tata Motors vice-president (finance) R.S.Thakur and West Bengal industry secretary Sabyasachi Sen on behalf of the West Bengal Industrial Development Corporation (WBIDC), according to sources in the state government.

The location of the proposed plant, nearly 35 km from Kolkata, has already evoked much controversy in the state.

The main opposition, Trinamool Congress, launched an agitation to stop the plant being set up on agricultural land immediately after the government started the process of acquisition last year after the announcement of the Rs 1,000 crore project.

The government gave permission to Tata Motors to start work on the plant in early January, barely a week after TC chief Mamata Banerjee called off her 25-day hunger strike against the plant at Singur.

The auto major has already started the work on the boundary wall and other groundwork amidst heavy security as opposition parties, mainly TC, have been repeatedly threatening to disrupt the work and uproot the temporary fencing around the acquired land. — PTI

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Talk of 2-wheeler safety ploy to sell car: Bajaj

New Delhi, March 9
There's no doubt Ratan Tata had only good intentions when he said he conceived the Rs 1 lakh car as he cared for the safety of those using two-wheelers.

But Bajaj Auto chairman Rahul Bajaj thinks it’s just a ploy to market the vehicle.

"He has to sell his car... so he has to speak like that," Bajaj shot back when reporters asked him about Tata Group Chairman Ratan Tata's remark that one of the major reasons for him to decide on the 'people's car' was the concern for safety of those travelling by two-wheelers. — PTI

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Taming Inflation
Focus on edible oils, milk, says RBI
Tribune News Service

New Delhi, March 9
As the inflation rate continues to be higher than the RBI’s threshold level of 5 to 5.5 per cent, finance minister P Chidambaram today indicated that he could consider taking measures for lowering prices of oilseeds and fertilisers.

“In budget speech I have given emphasis on cereal and pulses... Many members (of the Central Board of the RBI) said in addition we must pay special attention to edible oilseeds and fertilisers... The point is well taken,” he told mediapersons after a post-budget interaction with the Central Board of the RBI.

Chidambaram also said RBI governor Y.V. Reddy told the board that India managed the oil shock without any instability in the past three years, unlike in the past.

When oil shock eased and supply side constraints emerged on certain food items, even those were managed with moderate inflation, the minister said.

He said the government fully supported monetary measures taken to tame inflation and would back any other step taken by the apex bank to ease surging prices.

Meanwhile, inflation rose marginally to 6.10 per cent for the week ended February 24 against 6.05 per cent in the previous week.

Even the falling prices of essential food items could not hold the inflation rate, which went up by 0.5 a per cent.

Wholesale price index rose by 0.1 per cent to 208.8 points during the week concerned from 208.6 points in previous week.

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Bill to phase out CST introduced
Tribune News Service

New Delhi, March 9
The government today introduced bills to phase out central sales tax (CST) in three years and to amend banking regulations to give more operational flexibility to the RBI in the conduct of monetary policy.

Introducing the bill in the Lok Sabha, finance minister P Chidambaram said the abolition of CST would pave the way for an integrated goods and services tax (GST), which would be introduced by April 1, 2010.

Introducing the Taxation Laws (Amendment) Bill to amend the CST Act, 1956, Chidambaram said, in the first step, CST was proposed to be reduced from 4 to 3 per cent from April 1, 2007. It will go down from 3 to 2 per cent from April 1, 2008, from 2 to 1 per cent from April 1, 2009, and eventually abolished on March 31, 2010.

The agreed package for compensation to states for revenue loss on this account would consist of non-monetary as well as monetary measures, the minister said in the statement of objects and reasons in the bill.

Chidamaran said CST being an origin-based tax was inconsistent with VAT, which was destination-based tax. He said CST resulted in cascading of tax (tax on tax), since it was not rebateable against VAT.

It is proposed to drop tobacco from the list of declared goods to enable the states to levy VAT on tobacco at a rate higher than 4 per cent applicable to declared goods.

On the Banking Regulation (Amendment) Bill, the finance minister said it proposed to replace an ordinance promulgated on January 23 this year.

The ordinance seeks to amend section 24 of the Banking Regulation Act, 1949, to enable the RBI to specify the statutory liquidity ratio (SLR) without any floor rate.

Changes proposed in section 53 of the act will make it mandatory to present draft notification before both houses of Parliament in cases of exemptions being granted to institutions, banks or branches located in special economic zones (SEZs).

Chidambaram said it was necessary that the RBI as the regulator and the authority vested with the powers to conduct monetary policy, had the necessary flexibility regarding stipulation of holding of liquid instruments by banks.

Hence, it was felt that the existing floor rate of 25 per cent had to be removed keeping intact the ceiling of 40 per cent as the guidance for the RBI.

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No division of Bajaj Auto: Rahul

New Delhi, March 9
Ruling out a complete division of the Bajaj Auto empire between his two sons, Rajiv and Sanjiv, chairman Rahul Bajaj said today they would continue to be part of the company even after the proposed demerger takes place.

"Both boys will clearly continue to be in Bajaj Auto, no doubt about it," Bajaj told reporters here.

He, however, added that his younger son, Sanjiv, "may probably spend more time on the new demerged company or companies".

Bajaj reiterated that the plan to demerge the company's financial and investments business into a separate entity was based on the intention of unlocking shareholder value by utilising surplus cash and not because of the reported "rift between the brothers".

"You cannot simply divide a company between individuals when you have so many shareholders’ interest to be taken into consideration," he said.

The Board of Bajaj Auto is likely to take up the issue of demerger in its meeting in May or July, he added.

Asked if the proposed demerger of Bajaj Auto would have any bearing on the company's joint-ventures with German financial firm Allianz, Rahul Bajaj replied in the negative. "It will have no effect whatsoever on the shareholding of the joint ventures with Allianz," he said.

Bajaj Auto has joint ventures with Allianz -- Bajaj Allianz Life Insurance and Bajaj Allianz General Insurance -- in which it is the majority partner.

On the issue of BAL's 41.5 per cent holding in Bajaj Auto Finance post-demerger, he said the Board would decide on how and where it would be transferred. — PTI

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RIL arm for overseas oil projects

New Delhi, March 9
Reliance Industries Limited has hived off its overseas oil and gas projects into a separate wholly owned company based in Dubai and is eyeing a tie-up with ONGC Videsh Ltd (OVL) to jointly bid for oil and gas opportunities abroad.

Reliance Exploration and Production DMCC has been formed with Mukesh Ambani as its chairman, industry sources said.

The company’s interest in a discovered oil block in Yemen and in an offshore exploration block in Oman, besides exploration projects in northern Iraq, East Timor and Columbia will be transferred to the new company.

The Dubai-based firm has been modelled on the lines of OVL, which is a fully owned overseas investment subsidiary of ONGC.

“Reliance has realised that it needs to delink assets in politically risk-prone areas from its balance sheet. Besides, it also makes business sense because every time they brought home seismic data of any overseas assets for processing, they paid 12 per cent customs duty,” a source said.

The source said, “It is keen on bidding together for major opportunities with OVL. OVL, which has presence in 15 countries and has well-known tie-ups like the one with Mittal Steel for overseas oil asset acquisitions, has earned itself a reputation as a serious player. Reliance is a conservative player and would rather like to share risks with OVL.” — PTI

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EPF Board meeting today

New Delhi, March 9
A crucial meeting of the Employee Provident Fund Organisation (EPFO) Board tomorrow is likely to be a stormy affair, with central trade unions, including the BMS and the INTUC, determined not to settle for less than 9.5 per cent rate of interest for 2007-08 and the government’s reported insistence on 8.25 per cent.

Last year, the interest rate was paid at 8.50 per cent.

“If the government insists on reducing the rate of interest, we may be compelled to stage walk out of the meeting,” Trade Unions (TU) leaders M.K. Pandhe and D.L. Sachdeva said.

Pandhe, CITU president, and Sachdev, AITUC national secretary, said there was no justification for the government to reduce the interest rate in the backdrop of the raising rate of interest being offered by various banks, post office and other financial institutions.

Referring to the postponement of the fund trustees last meeting on December 7, they referred to the labour minister’s commitment that he would talk to the finance minister to hike the rate of interest on the SDS and other such investments. Pandhe denounced the government reported move to further bring down the rate to 8.25 per cent, asserting that they would not agree to the same under any circumstances.

There are also reports that the government may go in for a compromise with the TU leaders because of its political compulsions in view of the electoral debacle of the Congress government in Punjab and Uttarakhand and the ensuing UP polls. — UNI

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FDI policy violation in Hutch
Expedite inquiry: HC

New Delhi, March 9
The Delhi High Court today directed the Centre and the Foreign Investment Promotion Board (FIPB) to expedite inquiry against Hong Kong-based Hutchison Telecom for alleged violation of FDI policy.

“The Centre and the FIPB will decide the matter as expeditiously as possible within two months,” a division bench, comprising Chief Justice M.K. Sharma and justice Sanjiv Khanna said.

The court was hearing a petition filed by telecom watchdog, an NGO, which alleged that foreign holding in mobile joint venture Hutch-Essar was 89.03 per cent, far more than the 74 per cent cap fixed under the FDI policy for the sector.

In light of the matter still pending before the FIPB, the court refused to issue notice to HTIL, Hutch-Essar and other parties involved in the alleged violation.

“On going through the record we find that a similar matter is pending before the board and (if) we allow the court proceeding in the matter, then there would be two parallel proceedings going in the matter, which is not right”. The court, however, refused to accept the appeal of the companies to dismiss the petition and to send the matter back to the government.

Appearing for the petitioner, counsel Prashant Bhushan alleged that the Centre was aware about this violation for the past one year but did not take any action. — PTI

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Mittal may lose race for Chinese Co

Beijing, March 9
China's largest steel producer, Shanghai Baosteel, has set its eyes on Baotou Iron & Steel Group after global steel baron Lakshmi Mittal's bid for a 50 per cent stake in the Chinese company faltered.

Board chairman of the Baotou Iron & Steel Group Lin Donglu said that Baosteel was in talks with his company for a merger.

The consolidation of steel businesses in China is the key to the profit prospects of steel plants with an annual production capacity of less than 10 million tonnes. — PTI

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Merger creates UAE’s largest bank

Dubai, March 9
Two Dubai-based banks will merge to create one of West Asia’s largest banks with assets of Dh 165 billion, a move seen to extend Dubai's reach as the region's financial hub. Approved by the government, the merger of Emirates Bank International (EBI) and National Bank of Dubai (NBD) took many in the banking sector by surprise.

The new bank will be the one of the largest financial institutions in the Middle East and North Africa, according to Emirates Bank. — PTI

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Shareholders of HTIL okay deal

Hong Kong, March 9
Shareholders of Hutchison Telecommunications International Ltd have approved the $11.1 billion sale of a controlling stake in India's No. 4 cellular operator to Britain's Vodafone Group Plc.

Hutchison Telecom, which agreed in February to sell its 67 per cent stake in Hutchison Essar, plans to pay a special dividend amounting to $4.1 billion following the deal.

''We have received overwhelming support from our shareholders for this transaction which we are delighted to have received,'' Chief Finance Officer Tim Pennington said after a shareholders' meeting today.

The dividend amounts to $12.96 for each of the company's American depositary shares. — Reuters

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BRIEFLY

Rupee gains 12 paise
Mumbai, March 9
The rupee sustained rally for the second consecutive day today to end at Rs 44.2150/2250 against dollar, up by another 12 paise over last closing of Rs 44.3350/3450 following heavy exporters dollar sales amid negligible capital inflows. In volatile trade at the inter-bank foreign exchange (forex) market, the rupee surged despite a sharp fall of 164 points in equity markets. The local currency fluctuated in a wide range of Rs 44.2150 and Rs 44.3600 during the day but, surprisingly, discounted its corelation with the equity market. — PTI

Reliance MF
Mumbai, March 9
Reliance Mutual Fund today declared a dividend of 75 per cent, Rs 7.5 per unit on the face value of Rs 10, in its open-ended equity diversified scheme, Reliance Growth Fund. All investors registered in the dividend plan of the scheme as on March 12, 2007, will receive this dividend, an official release here said. The last dividend declared by the scheme was 25 per cent in October 2006. — UNI

Idea debut
Mumbai, March 9
Idea Cellular today debuted in the capital market and was listed at Rs 85, a premium of 13.33 per cent, over its offer price of Rs 75 per share on the National Stock Exchange (NSE). Idea will invest $2 billion in the next two years to compete in the booming Indian telecom market, Idea Cellular CEO Sanjeev Aga said. Aditya Birla Group and Idea Cellular chairman Kumar Mangalam Birla meanwhile ruled out any tie-up to compete with rivals like Vodafone. Idea currently operates in 11 of the 13 circles. — Agencies

Canbank MF
Chandigarh, March 9
Canbank Mutual Fund has declared 60 per cent dividend in Canequity Taxsaver Scheme, an open-ended ELSS, (Rs 6 on the face value of Rs 10 per unit). The record date for this dividend distribution has been fixed at March 15. The last dividend declared by the scheme was 40 per cent in February 2006. — TNS

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