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THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS

B U S I N E S S

CPM seeks stringent norms for retail sector
New Delhi, May 30
The CPM today called for licence raj to regulate the foray of corporate sector into the retail sector as it could adversely affect the livelihood of large sections of people, including farmers.

CPM general secretary Prakash Karat addresses a press conferenec in New Delhi on Wednesday. — PTI
CPM general secretary Prakash Karat addresses a press conferenec in New Delhi on Wednesday.

Re surges, NRI deposits dip
Chandigarh, May 30
Despite strengthening of rupee over the past two months, NRI deposits have failed to pick up in the region. Bankers say though there was a growth of over 7 per cent in NRI deposits between March 2006-07, deposits have been sluggish in the past two months.

Zoellick likely to be WB chief
Washington, May 30
US President George W Bush will name former deputy secretary of state Robert Zoellick as the next World Bank head.

In this file photo, a labourer works on a construction site at Kumbharwada, next to Asia's largest slum Dharavi in Mumbai.
In this file photo, a labourer works on a construction site at Kumbharwada, next to Asia's largest slum Dharavi in Mumbai. Asia's most notorious slum went up for sale on Wednesday, in a $2.3 billion project to raze thousands of ramshackle homes and create one of the world's hottest building sites. The filthy and cramped 535-acre slum of Dharavi stands on prime building land in Mumbai, parts of which have some of the world's most expensive real estate, and has long proved an embarrassment to promoting the country's economic capital as a global financial centre. Some 57,000 families, about 300,000 persons, will be moved into free but tiny one-bedroom homes in the area and swathes of land will be cleared for business and high-rise flats bounding some of the city's wealthiest parts. — AFP

HC notice to centre, Haryana over Reliance SEZ
Chandigarh, May 30
The Punjab and Haryana High Court today issued notice to centre, Haryana and others over a petition challenging land acquisition for the proposed special economic zone (SEZ) by Reliance.

NTPC inks Rs 3,750-cr pact for Assam
New Delhi, May 30
NTPC Ltd, the country’s biggest electricity generating utility, today signed a pact with the Assam Government to set up a 750 MW coal-fired plant in the state at an estimated cost of Rs 3,750 crore.



Bollywood actor John Abraham poses at a promotional campaign of his Spring Summer line "John Abraham by Wrangler" in New Delhi on Wednesday.
Bollywood actor John Abraham poses at a promotional campaign of his Spring Summer line "John Abraham by Wrangler" in New Delhi on Wednesday. — AFP

EARLIER STORIES

 
Chinese child models display outfits by local designers at a fashion show in Beijing on Tuesday.
Chinese child models display outfits by local designers at a fashion show in Beijing on Tuesday. China's booming market for children's goods is expected to grow by 12.4 per cent to exceed 100 billion yuan ($12.3 billion) by 2010, while children's clothing would comprise the biggest portion of the market, growing to 30 billion yuan ($4.1 billion) by the end of this decade. — AFP

Adidas to open 100 stores every year
New Delhi, May 30
Setting eyes on becoming the number one sports goods brand in India in the next three years, German firm Adidas is undertaking a major retail expansion that will entail adding over 100 stores every year.

Rupee to trade on Dubai exchange
Dubai, May 30
Investors in west Asia can now trade in Indian currency with the Dubai Gold and Commodity Exchange (DGCX) today announcing the launch of world’s first Rupee Currency Contract.

Lower inflation can bring down lending rates: IBA chief
New Delhi, May 30
Indian Bank Association (IBA) chief executive H.N. Sinor today said the lending rates of banks could drop to a single-digit figure only when the inflation was brought down to 4 per cent.

Circular on service tax ambit soon: CBEC
New Delhi, May 30
The Central Board of Excise and Customs (CBEC) today announced that it would come out with a comprehensive circular sometime between June 12 and 15 clarifying all ambiguities about 100 services that fall under the ambit of service tax.

28 Delhi units bound for HP
Shimla, May 30
Factories that were shut down in New Delhi after a Supreme Court order in 2000 banned industrial units in residential areas, are being relocated in Himachal Pradesh.

IndusInd Bank records profit
Amritsar, May 30
IndusInd Bank has recorded a net profit of Rs 21.40 crore during the quarter ending March 31 as against the loss of Rs 62.40 crore during the corresponding period of last quarter, showing a growth of 134.29 per cent.

 

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CPM seeks stringent norms for retail sector
Tribune News Service

New Delhi, May 30
The CPM today called for licence raj to regulate the foray of corporate sector into the retail sector as it could adversely affect the livelihood of large sections of people, including farmers.

“A system of licensing should be introduced for organised retail. Any retail outlet with floor area over an appropriate minimum floor area should require prior licence from local authorities (city corporations or municipalities),” the CPM general secretary Prakash Karat said here today.

Releasing the party’s proposal on retail trade, he said they were opposed to the entry of MNCs in this sector and Manmohan Singh government should abandon the moves to permit FDI in retail trade through the back door as in the case of joint venture between Bharti and Wal-Mart.

He said the party’s stand on the FDI has now gained larger political acceptance. Karat said they had prepared the proposal on regulating the organised sector in retail trade as large corporate houses had entered this arena.

The CPM general secretary said the proposals would be sent to all political parties and other organisations for wider debate and the party would come to conclusion and its final stand on the basis of such a dialogue process.

The proposal said a dedicated committee/board/department should be set up by the urban local bodies, with representation from street vendors and small retailer associations, which should be empowered to grant licences to organised retailers.

Licences should be given on the basis of a population criterion. The criteria may vary between states and cities depending upon the nature of the retail sector and needs of consumers.

Besides, a system of licensing for organised retailers, a number of steps need to be taken by the government to prevent the emergence of private monopolies in retail trade. A single large format retailer should not be allowed to capture a large market share. For this it is important to restrict the number of retail outlets that a single private entity can open in a city, state as well as region.

In order to prevent the development of big private monopolies it is also important for the government to ensure its presence in the market. Several government marketing agencies exist, both at the central as well as state levels, which need to be revived and made to reinvest in modernising infrastructure. Partnerships between existing government marketing agencies and cooperatives can also be considered, especially in food retail where synergies exist.

A host of measures to regulate and monitor contract farming have been suggested in order to protect the interests of the farmers.

The CPM demanded that necessary changes need to be made in the Model APMC Act of the centre as well as the new APMC Acts adopted by several state governments to incorporate the regulations suggested.

Retail trade contributes around 10-11 per cent of India’s GDP and currently employs over 4 crore persons. Within this, unorganised retailing accounts for 97 per cent of the total retail trade.

A recent KPMG survey report prepared for Ficci states that organised retail, estimated as a $ 6.4 billion industry in 2006, was projected to reach $ 23 billion by 2010. The share of organised retail in overall retail sales is projected to jump from around 3 per cent currently to around 9-10 per cent in the next three years.

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Re surges, NRI deposits dip
Ruchika M Khanna
Tribune News Service

Chandigarh, May 30
Despite strengthening of rupee over the past two months, NRI deposits have failed to pick up in the region. Bankers say though there was a growth of over 7 per cent in NRI deposits between March 2006-07, deposits have been sluggish in the past two months.

Though Punjabis account for almost 24 per cent of the NRI population, inward remittances in the state have been hard hit this year after the RBI reduced the rate of interest on non-resident external (NRE) rupee accounts and foreign currency non-resident (FCNR) accounts. In the past two months, rate of interest on these accounts have gone down by almost 1 to 1.25 per cent. While the banks are offering 4.5 to 5 per cent as interest on the NRE deposits, the interest offered on FCNR deposits is 4 per cent.

Rupee has risen significantly in the past couple of months. A dollar is now equivalent to Rs 41.70 as compared to Rs 44.25 three months ago. Figures available with The Tribune show that though the NRE deposits in the country increased from $807 million in March 2006 to $1,177 million in March 2007, there has been a slowdown in deposits since then.

With NRIs exploring other avenues like real estate and mutual funds for investments, bankers are now concerned. A senior official in Punjab National Bank, associated with the NRI banking division, said though NRI deposits had grown by almost 7.3 per cent in Punjab (between March 2006-07), there was a substantial slowdown in growth since April. Similarly, Canara Bank officials complained of a slowdown in deposits since March, after the rate of interest on NRE accounts was cut from 6 per cent to 5 per cent.

A senior official of State Bank of India explained: “Though a stronger rupee gives NRIs a better exchange rate when they convert dollars to open rupee accounts, they are not enthused by low returns offered in the NRI deposits. In NRE accounts, once the foreign currency deposit is made, it gets converted into rupees and again gets reconverted into dollars at the time of redemption, which means they will now get more dollars at the time of redemption. Interestingly, with the high rates of interest being offered on the NRO (non resident ordinary) accounts, NRIs are now depositing their income here and getting interest between 9 to 9.5 per cent.”

A senior official in Centurion Bank of Punjab, however, said though inflow has slowed down, but in some parts of the region where monthly remittances were received from NRIs towards family maintenance, the appreciating rupee had little impact.

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Zoellick likely to be WB chief

Washington, May 30
US President George W Bush will name former deputy secretary of state Robert Zoellick as the next World Bank head.

Zoellick will succeed Paul Wolfowitz, who is stepping down on June 30 after findings by a special bank panel that he broke bank rules when he arranged for a hefty compensation package for his girlfriend, Shaha Riza, a bank employee.

The White House had yesterday said the nomination process for the next president of the World Bank was almost through but press secretary John Snow did not speculate on any names. Zoellick must be approved by the World Bank’s 24-member board.

Wolfowitz was generally seen as a key architect of the Iraq war, a stance that made him pay the price at the bank as Europeans were upset that Bush would pick someone to run the bank who was closely associated with the war. — PTI

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HC notice to centre, Haryana over Reliance SEZ
Tribune News Service

Chandigarh, May 30
The Punjab and Haryana High Court today issued notice to centre, Haryana and others over a petition challenging land acquisition for the proposed special economic zone (SEZ) by Reliance.

The petitioners, gram panchayats being affected by the acquisition, sought to quash the entire acquisition proceedings instituted vide impugned notification issued under Section 4 and 6 of the Land Acquisition Act, 1894.

It was also prayed that the action of the respondents in transferring the land to Reliance Ventures Ltd and Reliance Haryana SEZ Ltd be declared as without jurisdiction, unaccountable and unjust enrichment at the cost of landowners.

The petitioners submitted that the respondents be directed to return the land to them and pay them fair price at market rates if and when the sale and purchase of said land happened. They asserted that landowners should be made stakeholders in the project on suitable terms and conditions.

The notification, sought to be quashed, was issued on January 29, 2003, and published in the Haryana official gazette. It talked about the setting up of industrial complex which was to be planned and developed as a special economic zone, Phase 1, at villages of Khandsa, Mohammedpur, Jharea, Bharoli and Khurd in Gurgaon district.

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NTPC inks Rs 3,750-cr pact for Assam

New Delhi, May 30
NTPC Ltd, the country’s biggest electricity generating utility, today signed a pact with the Assam Government to set up a 750 MW coal-fired plant in the state at an estimated cost of Rs 3,750 crore.

The Bongaigaon project, NTPC’s first power plant in the north-east region, is expected to start generating electricity from the first 250 MW unit by 2009-end. The second unit is likely to be completed in 2010-11 and the third by 2011-12.

“The project will go a long way in solving power crisis in Assam,” chief minister Tarun Gogoi said after an MoU was signed between NTPC, the state government and Assam Power Generation Corporation Ltd here.

The power station will come up at the existing facilities of the now-defunct Bongaigaon thermal power station of the Assam State Electricity Board.

“The project will give a boost to power generation in the north-eastern region in general, and Assam in particular,” NTPC chairman and managing director T Sankarlingam said.

“This is for the first time NTPC is setting up a power station in Assam and I hope they will able to complete the project ahead of time,” power secretary Anil Razdan said. — PTI

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Adidas to open 100 stores every year

New Delhi, May 30
Setting eyes on becoming the number one sports goods brand in India in the next three years, German firm Adidas is undertaking a major retail expansion that will entail adding over 100 stores every year.

"We are well positioned for growth in the Indian market driven by the sports performance brand. We have set a target of being the number one brand in India by 2010," Adidas India Marketing Pvt Ltd director marketing Hartwin Feddersen said.

At present, Adidas ranks second after Reebok in the Indian sports goods segment, followed by Nike.

He said, Adidas' focus would be on opening more stand alone outlets, which have been driving the growth for last 3-4 years.

"Every year we will add over 100 outlets. We have no plans to slowdown and we will extend our reach to more cities.

That's on top of the priority list," Feddersen said.

Adidas had only 70 stand alone stores in India in 2005, which grew to 165 last year, although its overall retail points, including multi-brand outlets in India is close to 2000.

Asked about the investments for the India expansion plans, he declined to disclose the figure but said: "one of the heavy investment areas is retail and there has to be cost sharing with franchisees."

Adidas, which had taken over Reebok globally, together enjoys over 50 per cent of the market share in India. — PTI

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Rupee to trade on Dubai exchange

Dubai, May 30
Investors in west Asia can now trade in Indian currency with the Dubai Gold and Commodity Exchange (DGCX) today announcing the launch of world’s first Rupee Currency Contract.

The DGCX said in a statement that it would launch trading in the contract on June 7.

“The DGCX Indian rupee contract will, for the first time in history, enable individuals and companies to have the opportunity to hedge and trade their Indian rupee risk on transparent and equal basis that an exchange provides,” exchange chairman Colin Griffith said.

So far, the only market available to hedge rupee risk is the non-deliverable forward inter-bank market but that is not accessible to everyone.

The recent appreciation in the rupee has necessitated the need for an efficient and easily accessible to all, risk management tool, which is exactly what this DGCX contract would provide, it said.

“The contract demonstrates that the DGCX is at the forefront of innovation, both globally and in the region. The DGCX was the first derivatives exchange to go live in west Asia and this addition has attracted interest from major financial institutions and corporates across the world that are looking to hedge their rupee risk,” Griffith said. — PTI

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Lower inflation can bring down lending rates: IBA chief
Tribune News Service

New Delhi, May 30
Indian Bank Association (IBA) chief executive H.N. Sinor today said the lending rates of banks could drop to a single-digit figure only when the inflation was brought down to 4 per cent.

“Banks have to benchmark their interest rate on inflation. The expectation is that once the inflation is brought down to 4 per cent, the interest rate can be pegged at to a single-digit figure,” Sinor said addressing the Bankers-Borrowers Meet, organised by PHDCCI.

Clarifying that the higher interest rates charged by the banks was not resulting in higher profit to the banks, he said the effort of the banks was to bring the operational cost to below 2 per cent.

The IBA official also predicted significant changes in the banking landscape in India by way of mergers of the public sector entities and consolidation of the banking operations in the next three to five years to respond to the needs of the industry and to align with global banking operations.

Pointing that the banking sector in India is too fragmented and small compared to their counterparts in developed countries, Sinor said the foreign banks finance many of the large acquisitions carried out by the Indian corporations’ abroad.

Referring to the rating of small and medium enterprises (SMEs), he said many steps were being taken up by the banks to make the rating transparent and to ensure adequate flow of funds to the sector.

He said the banks could lend only after meeting the statutory requirements such as CRR, SLR and capital adequacy ratio, which was between 9 per cent and 11.75 per cent. 

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Circular on service tax ambit soon: CBEC
Tribune News Service

New Delhi, May 30
The Central Board of Excise and Customs (CBEC) today announced that it would come out with a comprehensive circular sometime between June 12 and 15 clarifying all ambiguities about 100 services that fall under the ambit of service tax.

Announcing this at Assocham-organised national seminar on ‘Service tax: The changing dimensions’ here today, P C Jha,a member of CBEC, said the government was aware of inconveniences that trade and business has been encountering on service tax front and it is in view of this that the board will finalise its circular and clarify its stand on service tax.

He also said the government has already withdrawn 48 circulars and the new circular will completely clarify all issues as it is being given final touches by authorities concerned.

Jha also clarified that new circulars would be issued only by the CBEC.

He stated that ambiguities arising out of service tax imposition would be clarified. He also warned the industry that constitutional validities on imposition of service tax, as regards to works contract and service contract, is misplaced as the government consulted law and justice ministry on the issue.

He, however, promised that grey areas about service taxes would be adequately addressed as the government would earn mandated revenue from service tax, extent of which has already exceeded Rs.37,500 crore in 2006-07.

Jha said the government had started service tax with three services in 1994 and the revenue generation was Rs 50 crore and it has increased manifold since.

For the purpose of better service tax revenue collection, the government would shortly open large service tax paying units and they will emerge in cities like Chennai, Kolkata, Delhi, Hyderabad and Pune. 

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28 Delhi units bound for HP

Shimla, May 30
Factories that were shut down in New Delhi after a Supreme Court order in 2000 banned industrial units in residential areas, are being relocated in Himachal Pradesh.

As many as 28 factory owners from Delhi had applied for land in the hill state to open their units and benefit from tax holidays and surplus power.

The state industries department has accepted their applications and agreed to allocate the land.

"The state government has already identified some 10,000 sq metres of grassland on the edge of Theog town, to allow 28 entrepreneurs to set up units," said a senior official of the department.

Theog is located on the Hindustan-Tibet road at an altitude of over 8,000 ft about 32 km from this capital city. The officials said the new factories are packaging, adhesive manufacturing and IT units.

An investment of about Rs 500 million will be involved in setting up the 28 units, which are expected to generate at least 500 jobs. — IANS

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IndusInd Bank records profit

Amritsar, May 30
IndusInd Bank has recorded a net profit of Rs 21.40 crore during the quarter ending March 31 as against the loss of Rs 62.40 crore during the corresponding period of last quarter, showing a growth of 134.29 per cent.

The bank’s gross income for the year stood at Rs 1,744.39 crore as against Rs 1,377.12 crore last year, recording a growth of 26 per cent. He said the net profit was Rs 68.22 crore as compared to Rs 36.82 crore last year, up by 85.28 per cent. — TNS

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BRIEFLY

Reliance Insurance
New Delhi, May 30
Reliance General Insurance (RGI) has become second largest non-life private insurer, toppling Bajaj Allianz, in terms of premium collections of Rs 221 crore in April. This also catapulted the firm to number one slot in the industry, including public sector, for new premium generation for April, with collections of Rs 151 crore, followed by industry leader ICICI Lombard at Rs 118 crore, data available with Insurance Regulatory and Development Authority (IRDA) show. — PTI

Aircel order
New Delhi, May 30
Nokia Siemens Network today said it has bagged a two-year contract worth Rs 300 crore from telecom service provider, Aircel, to build and operate greenfield GSM network in Kolkata. The contract includes supply of GSM or EDGE equipment, implementation, project management and managed services such as operating and maintaining the network infrastructure, a company statement said here. — PTI

Effort BPO
Mumbai, May 30
India based BPO, Effort BPO Ltd today entered into a joint venture tie-up with a China-based call centre Asia Star and Triple Three to establish a call centre in China. The three partners will initially make an investment of $1 million in the next three months. The joint venture company envisages Effort BPO holding a 51 per cent equity stake while Asian Star will own 24 per cent and Triple Three 25 per cent. — UNI

Haldia plan
Mumbai, May 30
Haldia Petrochemicals today said it would invest Rs 800 crore for expanding its ethylene capacity to 670,000 tonnes from the present 523,000 tonnes. The expansion would increase the company’s polymer capacity by 30 per cent by April, Haldia Petrochemicals’ managing director Swapan Kumar Bhowmik said. — PTI

Patel Engg
Mumbai, May 30
Patel Engineering Ltd today said it has bagged a Rs 518 crore project from National Highways Authority of India to construct roads. The project would be located on NH-7 in Andhra Pradesh under north-south corridor and would be jointly executed by the company and KNR Constructions, Patel Engineering said. — PTI

Oman Air
Dubai, May 30
Buoyed by the growth of Indian travel market, Oman Air will start its direct flight from Muscat to Jaipur from June 1. It will be operating four flights a week to Jaipur, which will be its eighth destination in the country after Mumbai, Chennai, Kochi, Thiruvananthapuram, Hyderabad, Delhi and Lucknow, a company release said. — PTI

JSW Steel
New Delhi, May 30
JSW Steel Ltd will issue Foreign Currency Convertible Bonds (FCCBs) worth $325 million to be listed on the Singapore Stock Exchange. The company’s finance committee of directors, authorised to decide on all matters relating to the proposed issuance of FCCBs, has given its approval and has priced it at $325 million. — UNI

ICRA inks MoU
New Delhi, May 30
ICRA Ltd today signed an MoU with UCO Bank to assign ratings to small scale industries and small and medium enterprises, borrowers of the bank. As per the agreement, the company ratings would serve as an objective and scientific input in decision making for UCO bank, a statement said. — UNI

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