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Monetary policy today
Further tightening worries India Inc

New Delhi, April 23
CEOs and CMDs, especially from the real estate, automobiles, housing finance, banking and financial services, are a worried lot on the eve of the annual monetary policy to be announced by the RBI tomorrow.

RBI forecasts 9.2 pc growth
Mumbai, April 23
In its forecast ahead of tomorrow's annual monetary policy, the RBI today said the country's economy is expected to grow at an accelerated pace for the fourth year in a row.

Barclays takes over ABN Amro
10,000 jobs in offing
London/New Delhi, 
April 23

British banking giant Barclays will add thousands of new employees to its India headcount following the takeover of its Dutch rival ABN Amro in a cash and stock deal, valued at over $90 billion.
CEO of ABN Amro, Rijkman Groenink (left), and the head of Barclays, John Varley, arrive for a press conference at ABN Amro headquarters in Amsterdam on Monday
CEO of ABN Amro, Rijkman Groenink (left), and the head of Barclays, John Varley, arrive for a press conference at ABN Amro headquarters in Amsterdam on Monday. — AFP photo



EARLIER STORIES

 
Models unveil the new 3G mobile handsets “904i series” from Japan’s mobile giant NTT DoCoMo and produced by NEC, Sharp, Fujitsu, Mitsubishi Electric and Matsushita Electric in Tokyo on Monday.
Models unveil the new 3G mobile handsets “904i series” from Japan’s mobile giant NTT DoCoMo and produced by NEC, Sharp, Fujitsu, Mitsubishi Electric and Matsushita Electric in Tokyo on Monday. The new 904i series features the new service of “2 in 1”, which takes the capability of two phone numbers and two mail addresses into a single handset. — AFP photo

Tata Power gets Mundra mega project
New Delhi, April 23
Power Finance Corporation (PFC) today transferred Coastal Gujarat Power Ltd. (CGPL), the special purpose vehicle to develop the 4,000-MW Mundra ultra mega power project, to Tata Power Company.

Govt to notify SEZ norms soon
New Delhi, April 23
The government is likely to issue notification within 10 days on the decisions taken by the empowered group of ministers (eGoM) to increase the minimum factory area in special economic zones (SEZs) and put a limit to the size of such zones to 5,000 hectares.

Sun group to invest in power
Badal (Muktsar), April 23
In a significant development, which could give boost to the state’s economy, UK-based Sun Group has decided to invest heavily in various sectors, including power, healthcare, education and infrastructure in Punjab.

Matsushita plugs into Anchor 
Mumbai, April 23
Japanese company Matsushita Electric Works, owner of National and Panasonic brands, has bought 80 per cent stake in Anchor Electricals for Rs 2,000 crore.

Maruti cars cheaper
New Delhi, April 23
Maruti has reduced the price of its products by up to Rs 5,000 following increased tax sops offered by Haryana, where its facilities are located.
In video: Maruti SX4 coming in May. (56k)

Levy on cheque payment mooted
Mumbai, April 23
Those who walk into the banking premises for payments through paper cheques should think twice before doing so, soon.

Sugar prices set to fall
Farmers may lose payments
Yamunanagar, April 23
Sugar prices are all set to fall by Rs 100 to Rs 150 per quintal within the next one month in the country. If the current market prices are any indication, sugar industry would not be able to make full payments to farmers during the next cane crushing season because of the production being much higher than consumption and exports not being encouraging.

Relief for telecom users from unsolicited calls
New Delhi, April 23
Providing a major relief to millions of phone users from unsolicited calls from telemarketing agents, TRAI today proposed setting up of a National-Do-Not-Call Registry and also proposed penalty for violators.

Rupee ends at 9-year high
Mumbai, April 23
The rupee continued to surge against the US dollar and today ended at a nine-year high of 41.67/68, higher by nine paise from previous close of 41.76/77 a dollar, on dollar selling by traders and strong capital inflows.

NFL profit up 18 pc 
Chandigarh, April 23
National Fertilisers Ltd (NFL) has posted a 17.6 per cent increase in net profit at Rs 136.86 crore during 2006-07 compared to Rs 116.40 crore in the previous fiscal. NFL also recorded its turnover of Rs 3,804 crore in the fiscal ended March 31, 2007 compared to Rs 3,591 crore in the previous year. The company produced 33.51 lakh tonnes of urea, with a capacity utilisation of 103.7 per cent during 2006-07. Urea sales stood at 33.54 lakh tonnes. — TNS

 

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Monetary policy today
Further tightening worries India Inc
Tribune News Service

New Delhi, April 23
CEOs and CMDs, especially from the real estate, automobiles, housing finance, banking and financial services, are a worried lot on the eve of the annual monetary policy to be announced by the RBI tomorrow.

According to a survey conducted by Assocham, they feel that the RBI would take further measures to tighten the monetary flow as credit growth continues to remain above 20 per cent as desired by the central bank.

The car manufacturers and dealers are already feeling the pinch of decline in their sales. The cost of deposit flow is rising and the pressure on margins is building up.

Majority of 60 per cent of corporate heads, bankers and economists are not sure whether the interest rates have peaked and the RBI would not be tempted to further tighten the money supply in the system, according to the Assocham Business Survey (ABB) survey. However, the rest felt that the interest rates are somewhat near the peak.

Around 74 per cent of the CEOs were of the opinion that tight monetary policy would affect the small and medium enterprises (SMEs) in the economy more than big business houses.

Although the headline inflation continues to rule above 6 per cent mark for the last few weeks, the average price rise for 2006-07 remains within the limit projected by the RBI.

Even in the financial year 2007-08, CMDs and CEOs predict the average inflation to remain within 5 to 5.5 per cent. Bulk of the blame for inflation lies with the huge capital flows into the country, which in turn get translated into additional money supply.

“While on one hand, it tries to suck liquidity through holding the CRR and repo rate, at the same time it is faced with fresh inflows negating the tough measures,” Venugopal Dhoot, president of assocham, said.

The hike in interest rates has hurt not only exports but also giving the cost-push to manufacturing, which in turn would lead to inflation.

About 92 per cent of the business leaders surveyed were convinced that the RBI policies would hurt the GDP growth rate in fiscal 2008. About 67 per cent of the respondents expected that the annual policy would peg the growth rate for this fiscal between 8.5 to 8.7 per cent. The rest were of the view that the projection would be between 8 to 8.5 per cent growth rate.

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RBI forecasts 9.2 pc growth
Shiv Kumar
Tribune News Service

Mumbai, April 23
In its forecast ahead of tomorrow's annual monetary policy, the RBI today said the country's economy is expected to grow at an accelerated pace for the fourth year in a row.

The apex bank forecast a 9.2 per cent in 2006-07 as against 9 per cent in the previous fiscal.

According to the RBI, the acceleration in growth during 2006-07 is driven by continued momentum in the services and manufacturing sectors, growth of which are expected to be in double-digit figures, the RBI said in its macro-economic and monetary developments review-2006-07 today.

The apex bank indicated that agriculture and allied activities growth, however, slowed down from 6 per cent in 2005-06 to 2.7 per cent in 2006-07.

The bank attributed the slowdown in the farm sector to uneven and delayed rainfall during the south west monsoon season led to a reduction of 1.9 per cent in the area of coverage in the kharif crops in 2006.

The apex bank quoting revised estimates for 2006-07 said the key deficit indicators of the central government, viz., revenue deficit, gross fiscal deficit and primary deficit, relative to GDP, at 2.0 per cent, 3.7 per cent and 0.1 per cent, respectively, were placed lower than their budgeted levels.

Actual gross market borrowings through dated securities by the central government amounted to Rs 1,46,000 crore during 2006-07. 

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Barclays takes over ABN Amro
10,000 jobs in offing

London/New Delhi, April 23
British banking giant Barclays will add thousands of new employees to its India headcount following the takeover of its Dutch rival ABN Amro in a cash and stock deal, valued at over $90 billion.

The deal, the biggest-ever M&A in the financial services space, will create the largest institutional asset manager and the world’s eighth largest wealth manager but will result in over 12,000 job cuts at the two banks’ operations across the world.

However, India will be a net gainer in terms of jobs as well as expanded operations of the two banks. While the number of new jobs have not been disclosed, sources close to the development pegged the figure at anywhere between 8,000 and 10,000.

“Part of the expected staff reduction will be through establishing shared services and off-shoring those positions to low cost locations, such as India, where new staff will be recruited at ABN Amro’s existing ACES operations,” ABN Amro and Barclays said in a joint statement.

Barclays Plc, Britain’s third-largest bank, agreed this morning to merge ABN Amro Holding NV with itself and the proposed merger would be implemented through an exchange offer pursuant to which ABN Amro ordinary shareholders would receive 3.225 ordinary shares in Barclays (new Barclays shares) for each existing ABN Amro ordinary share.

Under the terms of the offer, Barclays’ existing ordinary shareholders would own approximately 52 per cent and ABN Amro existing ordinary shareholders would own approximately 48 per cent of the combined group.

Currently, Barclays and ABN Amro have a combined workforce of about 2,17,000, including 1,23,000 employees at the British bank and 94,000 employees of ABN Amro, which excludes headcount of LaSalle Corp. — PTI

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Tata Power gets Mundra mega project
Tribune News Service

New Delhi, April 23
Power Finance Corporation (PFC) today transferred Coastal Gujarat Power Ltd. (CGPL), the special purpose vehicle to develop the 4,000-MW Mundra ultra mega power project, to Tata Power Company.

The beneficiary states in terms of allocation of power from the proposed project are Gujarat (1,900 MW), Maharashtra (800 MW), Punjab (500 MW), Haryana (400 MW) and Rajasthan (400 MW).

The transfer of documents were exchanged between PFC and Tata Power at a function held in the presence of union minister of power Sushilkumar Shinde, secretary, ministry of power amongst others.

With this, Mundra Ultra Mega Power Project, to be located in Gujarat, has become the first project under the UMPP initiative to be transferred to the bidder.

Earlier, Tata Power Company emerged as the successful bidder through tariff-based competitive bidding process by submitting the lowest tariff bid of Rs 2.26 per unit (levelised tariff for 25 years with first year tariff at the rate of Rs 1.91 per unit).

The Mundra Project (5x800 MW) is to be based on imported coal. The project would use super critical technology with a view to achieve higher levels of fuel efficiency, which results in saving of fuel and lower green-house gas emissions.

Recognising the fact that economics of scale leading to cheaper power can be secured through development of large size power projects, the government has taken an initiative for facilitating the development of a few ultra mega power projects of about 4,000 MW capacity each under tariff- based competitive bidding route.

These projects are to be awarded to developers on build, own, operate (BOO) basis. The size of these projects being large, they will meet the power needs of a number of states through transmission of power on regional and national basis. For the implementation of this initiative, PFC has been identified as nodal agency.

Under this prestigious initiative, nine projects with an estimated investment of about Rs 1,50,000 crore have been identified. Bidding in respect of 2 projects has been completed and bidding process in respect of another 2 projects is currently on.

Meanwhile, PFC plans to borrow about Rs 17,000 crore in 2007-08 and tap the US market for raising $300 million (about Rs 1,200 crore).

The state-run company today also reported a flat net profit in 2006-07 to Rs 983 crore as compared to Rs 971 crore in the previous fiscal.

"The lower rate of increase in profit was due to higher tax provisions and deferred tax liability," PFC chairman V.K. Garg said.

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Govt to notify SEZ norms soon
Tribune News Service

New Delhi, April 23
The government is likely to issue notification within 10 days on the decisions taken by the empowered group of ministers (eGoM) to increase the minimum factory area in special economic zones (SEZs) and put a limit to the size of such zones to 5,000 hectares.

“The notification pertaining to increase the processing area to 50 per cent and putting a limit of 5,000 hectares on their land size, would be issued in the next 10 days,” commerce secretary G K Pillai said on the sidelines of a meeting he held with representatives of some SEZ developers here today.

Pillai clarified that the change in rules would be applicable to all SEZs that were approved after February 10, 2006, when the SEZ Act came into force.

“It will apply retrospectively to all SEZs,” Pillai said.

Replying to a question on what will be the fate of fresh applicants for SEZs, Pillai indicated that since the board of approvals (BoA) has to first clear the proposals presented to it before April 5, 2007, it may take up to one year before the fresh applications are considered.

"As BoA takes up around 40 cases in a meeting, for clearing the backlog 10-12 meetings would be required," he said adding, however, that the government would continue to accept fresh applications.

The BoA is meeting on April 26 to take up issues related to SEZs that have already been notified.

Pillai also pointed out that the commerce and finance ministry were working to resolve their differences on the issue of export obligation on SEZs and also the issue of tax treatment of power units in SEZs.

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Sun group to invest in power
Chander Parkash
Tribune News Service

Badal (Muktsar), April 23
In a significant development, which could give boost to the state’s economy, UK-based Sun Group has decided to invest heavily in various sectors, including power, healthcare, education and infrastructure in Punjab.

Disclosing this here today, Uday Khemka, Director, Sun Group, UK, said his group had decided to set up biomass power generation plant in Punjab. He added that other priorities of Punjab were being studied to work out other investment plans.

Uday Khemka, a grandson of late Maharaja of Nabha state Ripudaman Singh, also said that the group was planning to set up environment-friendly townships in Punjab. The group was also willing to jump into rural development sector in a big way.

“Punjab has a great potential of making progress in every field. The state is as big as a nation and hence it is the right place to make investment,” Uday Khemka said while talking to TNS here today.

“The group has decided to invest in other parts of Punjab also. In the power sector, the group is interested in generating power from biomass and the details for the same are being worked out,” added Khemka.

He added that Sun Group had started the process of taking over the Punwire, a state government company, which had virtually become bankrupt. He added that Sun Group would rehabilitate it shortly and put it in operation again.

He said apart from the commercial venture, the group would also carry out some charity works in the field of education and health.

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Matsushita plugs into Anchor 

Mumbai, April 23
Japanese company Matsushita Electric Works, owner of National and Panasonic brands, has bought 80 per cent stake in Anchor Electricals for Rs 2,000 crore.

The Anchor board members would continue to hold the remaining 20 per cent and play a major role in the management of the company, a top official of the Indian company today.

The reconstituted board of Anchor would have six Matsushita officials, while four members of the Shah family, the promoters of Anchor, will be in the top management body.

The acquisition would help Matsushita gain entry into the “growing, but unorganised and fragmented” Indian electrical market, Anchor Managing Director Atul Shah told reporters here today.

“We decided to partner with Matsushita for its research and development and technology to complement our brand value, network and product line up. The partnership will help us to expand our product category,” he said.

Matsushita expects to recover the Rs 2,000 crore investment in Anchor over a period of seven years, the new Chairman of Anchor, Toshihide Arii said.

Arii is a Matsushita representative.

Matsushita's Asian marketshare is 36 per cent after acquiring stake in Anchor, against 30.5 per cent before.

Anchor's market share in India is estimated to be 60 per cent. — PTI

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Maruti cars cheaper

New Delhi, April 23
Maruti has reduced the price of its products by up to Rs 5,000 following increased tax sops offered by Haryana, where its facilities are located.

The reduced sales tax would translate to a price cut in the range of Rs 3,000 to Rs 5,000 across various models, a company official informed.

Haryana has reduced sales tax from 3 pc to 2 pc, effective April 1, coinciding with the reduction in CST from 4 pc to 3 pc.— PTI

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Levy on cheque payment mooted

Mumbai, April 23
Those who walk into the banking premises for payments through paper cheques should think twice before doing so, soon.

The recent RBI proposal to levy tax on transcations in which paper cheques are used, may well come as a burden on individuals and companies opting for paper cheque payments, since a portion of their deposits will be absorbed by the RBI once the proposal turns final.

The proposal, chalked out by an RBI-appointed committe on behalf of a study — migration of paper — based funds movement to electronic fund transfers, is currently left open for public comments till May 15.

The central bank intitiative has been viewed as an effort to prompt customers switch over to the electronic payment mode, which will, in turn, cut down the operating costs.

However, the percentage of fee expected to be levied by the premier bank through clearing centres operating under its control, is difficult to predict, sources said.

''As of now, for all business account holders in India, it is mandatory to return a 0.1 percentage of their daily transactions above Rs 15,000 (for individuals) or Rs 1,00,000 (for companies) under the banking cash transaction tax (BCTT) scheme.

''The new provision may also impose a tax percentage that comes around this margin,'' a senior bank official on the condition of anonymity said.

This apart, the rural customers who are less exposed to electronic-based payments make up a large pie of the total number of banking customers. They may find it worse to 'migrate' to electronic payments from paper cheques.

The average number of paper cheques, being dealt by the apex bank per day, is over half a billion.— UNI

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Sugar prices set to fall
Farmers may lose payments
Nishikant Dwivedi
Tribune News Service

Yamunanagar, April 23
Sugar prices are all set to fall by Rs 100 to Rs 150 per quintal within the next one month in the country. If the current market prices are any indication, sugar industry would not be able to make full payments to farmers during the next cane crushing season because of the production being much higher than consumption and exports not being encouraging.

Sources said production of sugar during the current crushing season was expected to cross 250 lakh tonne mark as against consumption of 190 lakh tones. The export target of 20 lakh tonnes does not seem viable in wake of falling international prices. Pakistan has levied custom of 30 per cent on sugar which has been discouraging to exports to the neighbouring country.

The government has offered an export subsidy of Rs 1,350 per tonne for mills in coastal areas and Rs 1,450 per tonne for others.

In Haryana, crushing of cane in this season was expected to cross 6.50 crore quintal against 4.34 crore quintal in the last season.

Cooperative mills in the state would be increasing its crushing by 73 per cent and private mills by 30 per cent.

Sources said that the sugar prices in north India have fallen to Rs 1,350 per quintal (without excise duty) from Rs 1750 per quintal in the last few months. According to an official with a sugar mill, the cane prices were higher but sugar prices were falling on account of more production.

The production of cane is expected to be higher during the next season as cane is considered to be more ‘lucrative’ than the traditional wheat and paddy. Since a large stock of sugar would be lying, the industry would not be having money to pay to farmers for their cane during the next season, said the official.

Cane advisor (Haryana State Federation of Cooperative Sugar Mills) RP Singh admitted that industry was heading towards a crisis. “Only those sugar mills with more than 5,000 tonne crushing capacity a day could be viable and the highest capacity of cooperative mill in the state is in Shahbad with crushing capacity of 3,500 tones”, informed Singh. When asked about the payments to farmers for their cane, he said that they have already approached the state government for a grant. 

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Relief for telecom users from unsolicited calls
Tribune News Service

New Delhi, April 23
Providing a major relief to millions of phone users from unsolicited calls from telemarketing agents, TRAI today proposed setting up of a National-Do-Not-Call Registry and also proposed penalty for violators.

The regulator said telecom companies would have to set up a mechanism to receive a request from subscribers who have opted for the Do-Not-Call service.

According to industry sources, telemarketers, people who call to sell you home loans, credit cards, personal loans and other products, are part of a Rs 800 crore per year industry and growing at the rate of 15 to 20 per cent per annum.

As majority of the telemarketers are employed by the banking sector, the TRAI said it has approached the RBI and the Indian Banks’ Association to ensure that no telemarketers are engaged by the banking sector without valid registration certificate issued from DoT and also all telemarketers presently engaged by the banks should register themselves with DoT as other service providers within three months; otherwise, their telecom services may face disconnection.

On receipt of complaint, the service provider of the guilty telemarketer can charge the higher tariff.

If a telemarketer violates the regulation for a third time, service providers will be empowered to disconnect the telephone connection, according to suggestions put forward by TRAI.

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Rupee ends at 9-year high

Mumbai, April 23
The rupee continued to surge against the US dollar and today ended at a nine-year high of 41.67/68, higher by nine paise from previous close of 41.76/77 a dollar, on dollar selling by traders and strong capital inflows.

The rupee last ended around today's closing levels on May 29, 1998.

In volatile trade at the Interbank Foreign Exchange (forex) market, the local currency fluctuated in a range of 41.57 and 41.72 after resuming firm at 41.64/66 month-end demand for dollar from oil companies alternated by short selling by traders.

The rupee's strength was also attributed to indications that the Reserve Bank of India may not intervene to check Indian Unit's surge in the light of continued inflation pressures. Inflation stayed beyond RBI's tolerance level and was quoted at 6.09 per cent for the week ending April 7. — PTI

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BRIEFLY

Ace launched in Nepal
New Delhi, April 23
Auto major Tata Motors today said it has launched its popular mini-truck ‘Tata Ace’ in Nepal. The company has fine-tuned its 700 cc diesel engine powered mini-truck to suit the hilly terrain of the Himalayan country, Tata Motors said in a statement. The company has tied-up with Nepal’s Sipradi Trading to distribute and market the truck in the country, it said, adding that Tata Ace’s post-sales servicing would be backed by 20 centres spread across Nepal. The automobiles major and Sipradi would also set up a Tata genuine parts distribution company to sell spare parts for Tata Motors’commercial vehicle line-up, it said. — PTI

Punj Lloyd
New Delhi, April 23
Punj Lloyd Ltd today said it has secured a contract worth Rs 180.16 crore from Reliance Gas Transportation Infrastructure Ltd. The company will construct 48 inches wide and 122 km long east- west gas pipeline and other associated facilities as per the contract, a statement said. — UNI

Bharati Shipyard
Mumbai, April 23
Bharati Shipyard has bagged an order worth Rs 180 crore from UP Offshore (Bahamas) Ltd in a development that would mark the foray of the Indian firm into South America. The company has signed a contract for construction and supply of two platform supply vessels, Bharati Shipyard informed the BSE. — PTI

Jet Airways
New Delhi, April 23
Jet Airways and Travelocity today announced an exclusive travel agreement which will lead to hotel offerings being available through Jet’s website. The hotel booking service, leveraging Travelocity’s proprietary database of hotels, will compliment the enhanced air booking engine on jet airways.com which attracts over 1.25 million visitors per month. — UNI

Bombay Dyeing
Chennai, April 23
Leading textile manufacturer Bombay Dyeing today announced that it would open 50 exclusive flagship stores across the country at a cost of Rs 50 lakh per store. Company head (domestic business) Arun Bhawsingka said Bombay Dyeing had crossed Rs 400 mark in sales during 2006-2007, which was about 20 per cent increase over the last corresponding year. — UNI

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