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ECB norms tightened to check capital inflow
New Delhi, August 7
To check strong capital inflows, the government today tightened rules governing external commercial borrowings (ECBs) by Indian companies with immediate effect.

Rising rupee inhibits export target: Nath
New Delhi, August 7
Commerce and industry minister Kamal Nath today said that the strengthening Indian rupee is a deterrent to achieving export target of $ 160 billion during the current fiscal, but refrained from spelling out further measures to help exporters.
Bollywood actors John Abraham (left) and Shah Rukh Khan at the launch of ‘Pepsi My Can’ in Mumbai on Tuesday. The US-based soft drink giant Pepsi has targeted the 'My Can' as a ‘cool, on-the-go’ style statement for India's youth. PepsiCo and Coca-cola account for 99 per cent of India's soft drink market. Bollywood actors John Abraham (left) and Shah Rukh Khan at the launch of ‘Pepsi My Can’ in Mumbai on Tuesday. The US-based soft drink giant Pepsi has targeted the 'My Can' as a ‘cool, on-the-go’ style statement for India's youth. PepsiCo and Coca-cola account for 99 per cent of India's soft drink market. — AFP

LNG Pricing
SC extends stay
New Delhi, August 7
The Supreme Court today extended a stay granted by the Gujarat High Court on a government directive to pool prices of imported liquefied natural gas (LNG) so as to keep the generation cost from the Dabhol power plant low.



EARLIER STORIES

 

Ethics code by BPOs to control attrition
Bangalore, August 7
The BPO industry will bring out a code on ethics and other issues as part of a standard setting practice for the industry, which is also aimed at tackling the “menace” of attrition.

‘Relax education norms’
Bangalore, August 7
Nasscom yesterday admitted attrition was cause of concern and said it could be addressed by relaxing the norms governing the education sector.

Nasscom aims at $10-b export by 2010
Bangalore, August 7
Despite a rising rupee and a host of other problems, the Indian BPO companies continue to garner a larger share in the global BPO business with exports growing to $8.4 billion in 2006-07.

PFC transfers Sasan project to Reliance Power
Chairman-cum-managing director of PFC V.K.Garg (left) exchanges documents with group chairman of Reliance Energy Anil D Ambani (right) after signing agreement, as union minister for power Sushil Kumar Shinde looks on in New Delhi on Tuesday. New Delhi, August 7
The controversial Sasan ultra mega power plant is finally ready to take off with state-run Power Finance Corporation (PFC) today transferring the 4,000 MW project to Anil Ambani group firm Reliance Power Ltd.


Chairman-cum-managing director of PFC V.K.Garg (left) exchanges documents with group chairman of Reliance Energy Anil D Ambani (right) after signing agreement, as union minister for power Sushil Kumar Shinde looks on in New Delhi on Tuesday. — A Tribune photograph

New income tax Act by Dec
New Delhi, August 7
The new income tax code that will simplify and replace the nearly five decades-old law will be introduced in Parliament in the next four months amidst indications that there may be "finetuning" of taxes but no "radical" changes in them.

PE investments to cross $15 b this year: PwC
New Delhi, August 7
Riding high on the Indian growth story, private equity (PE) investments in the country have crossed $2 billion during July alone and can touch $15 billion by the end of this year, a study by global consultancy firm PricewaterhouseCoopers (PwC) said today.

DoT issues notices to telcos
New Delhi, August 7
Department of Telecom (DoT) has issued showcause notices to four mobile operators whose services have been found to be operational in ‘no service zones’ along the international border of the country.

Wipro to open 2 BPO centres in China
Bangalore, August 7
Wipro is setting up two BPO centres in China by next month with a combined employee pool of 300, while another unit in the US will be opened later, Wipro Chief Executive Officer (BPO) T K Kurien said here.

Indo-Swiss MoU on IPRs
New Delhi, August 7
India and Switzerland today signed a memorandum of understanding (MoU) for closer cooperation between the two countries in fostering protection and promotion of intellectual property (IP) rights.



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ECB norms tightened to check capital inflow
Tribune News Service

New Delhi, August 7
To check strong capital inflows, the government today tightened rules governing external commercial borrowings (ECBs) by Indian companies with immediate effect.

According to a statement issued by the ministry of finance, borrowers raising ECBs more than $20 million shall park the proceeds overseas for use as foreign currency expenditure for permissible end-uses.

The changes would not apply to borrowers that have already entered into loan agreements, the statement said.

“All other aspects of ECB policy such as $500 million limit per company per year under the automatic route, eligible borrower, recognised lender, average maturity period, all-in-cost-ceiling, pre-payment, refinancing of existing ECB and reporting arrangements remain unchanged.,” it said.

“These conditions will not apply to borrowers who have already entered into loan agreement and obtained loan registration numbers from the Reserve Bank. Borrowers, who have taken verifiable and effective steps wherein the loan agreement has been entered into to avail of ECB in the previous dispensation, and not obtained the loan registration number, may apply to the Reserve Bank through their authorised dealer,” it said.

The ECB policy is constantly reviewed by the government in consultation with the RBI to keep it in tune with the evolving macro-economic situation, changing market conditions, sectoral requirements, the external sector and the lessons of experience.

Significantly, the government’s move comes 25 days after the Economic Advisory Council, headed by former RBI Governor C Rangarajan, submitted a report on the “Economic Outlook for 2007-08 to the Prime Minister, in which it had suggested three instruments, including putting restrictions on ECB to check capital inflows through borrowing route.

External commercial borrowings and short-term loans increased sharply in 2006-07, with the total quantum of inflows under the category aggregating $21.1 billion, an increase of 246 per cent over 2005-06. With continued interest by Indian corporate in accessing the overseas loan market, the net loan inflows were projected to increase to $25 billion.

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Rising rupee inhibits export target: Nath
Tribune News Service

New Delhi, August 7
Commerce and industry minister Kamal Nath today said that the strengthening Indian rupee is a deterrent to achieving export target of $ 160 billion during the current fiscal, but refrained from spelling out further measures to help exporters.

“The rupee appreciation has impacted exports. The government is concerned with the matter as export is linked to employment,” Nath told newspersons here.

Asked whether the Centre is considering any further package for the exporters to tide over the Rupee crisis, the minister merely said, “The Prime Minister is keeping himself apprised of the situation.”

Nath said the commerce ministry is in constant touch with the Reserve Bank of India on the issue.

The Rupee has appreciated from Rs 45 a dollar in October-November last year to slightly over Rs 40 in July. The hardening of the Indian currency has hurt growth in exports, which has come down to 14 per cent in June from 23 per cent in April.

Last month, the Centre had announced a Rs 1400-crore relief package for exporters hit by the rise in the currency to nine-year highs against the dollar.

Asked whether the government would revise the export target downward for the fiscal 2007-08, the minister said, “I am still hopeful. But rising Rupee is a deterrent in meeting the target.”

“We are more concerned with the manufacturing sector,” Nath said, when asked if he was looking into the woes of the software sector.

Meanwhile, according to a PTI report, the commerce ministry has constituted a team to understand the impact of rupee rise at the ground level and some more incentives could be announced for exporters by August-end, said some officials.

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LNG Pricing
SC extends stay

New Delhi, August 7
The Supreme Court today extended a stay granted by the Gujarat High Court on a government directive to pool prices of imported liquefied natural gas (LNG) so as to keep the generation cost from the Dabhol power plant low.

A Bench headed by Justice Ashok Bhan while issuing notices on new applications filed by Maharashtra government and public sector firms GAIL, IOC and BPCL ordered status quo till August 9 in view of the cases coming up before the Delhi High Court and Gujarat High Court on August 8 and 9, respectively.

The Bench also said the issue of vacating stay on the government directive would be decided on August 14.

Essar Steel had earlier challenged government's decision of averaging the long-term LNG price of Petronet LNG Ltd with the high cost short-term fuel purchase for Dabhol power plant in Delhi High Court. Gujarat State Petroleum Corporation had challenged the order, which raised prices of LNG for existing Petronet customers, in Gujarat High Court.

According to the PSUs, if price pooling was not allowed, they would not be able to sell RLNG purchased at a price in excess of $9 per million British thermal unit (mBtu) from Petronet. Such "distress sale would be huge and a straight loss to it", GAIL said.

The new policy has resulted in price differences in RNLG for existing consumers such as Essar Steel and GSPC and new consumers such as Ratnagiri Gas and Power Pvt Ltd, the owner of the Dabhol power plant.

Petronet LNG Ltd, the primary supplier of the fuel, had moved an application for vacation of stay in view of the apex court's direction on July 31 to do so in case any of the high courts passed any interim order on the issue. — PTI

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Ethics code by BPOs to control attrition
Jangveer Singh
Tribune News Service

Bangalore, August 7
The BPO industry will bring out a code on ethics and other issues as part of a standard setting practice for the industry, which is also aimed at tackling the “menace” of attrition.

Attrition is emerging as the number one worry among BPO companies attending the Nasscom ITES summit here, which are spending a lot of time on finding ways to control attrition and ensure employee retention beyond the average 18-month tenure of an entry level personnel.

Genpact CEO Pramod Bhasin, who is also the chairman of the Nasscom BPO Forum, said the industry was in the process of coming out with a standard policy on hiring, data security, physical infrastructure, human resources, sexual harassment and whistle blowing to establish a code for the industry.

Once a policy is established, the BPO industry feels the issue of hiring can be made more transparent and ensure people are not just jumping jobs,” says Bhasin.

This view is also echoed by other industry captains, who feel BPO companies, are losing money by encroaching on each other’s employees.

Raman Roy, Quatrro BPO Solutions chairman, says a clearly laid-out documentation on hiring as well as employee friendly policies, which focus even more on security, and safety of personnel will help the industry to fight attrition.

When questioned that labour laws already existed to take care of most of the issues, which are set to be codified by the BPO industry, Nasscom president Kiran Karnik said the labour laws were very basic. “We want to set a benchmark for the industry. What we are planning is way ahead of the present standards,” he said.

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‘Relax education norms’
Tribune News Service

Bangalore, August 7
Nasscom yesterday admitted attrition was cause of concern and said it could be addressed by relaxing the norms governing the education sector.

BPO captains at the Nasscom India ITES-BPO Strategy Summit, 2007 here, felt there was a need to update curriculum in educational institutions to make the youth passing out of them “employable”.

Genpect CEO and president Pramod Bhasin said in today’s scenario youth were being trained for specific tasks after passing out from professional institutions.

Bhasin said the present government rules did not allow private industries to start educational institutions. “In such a scenario it becomes imperative to ensure we produce quality human resources,” he said, adding this would allow the country to remain ahead in the BPO sector despite growing competition from other countries.

It has been observed that attrition level is the highest at the recruitment level, which is named as “agent”. In some companies attrition at this level is as high as 70 per cent though the average for the industry is around 50 per cent as far as voice-based BPO is concerned. In case of non-voice based BPO the attrition level is around 25 per cent.

Explaining the situation, Bhasin says at present companies have to spend around $ 300 in training an agent and that this investment is squandered in many cases due to high-attrition levels. He called for allowing a public-private partnership whereby BPO companies could train interested candidates in their free time in the educational institutes so that they could save on costs and also ensure quality employees.

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Nasscom aims at $10-b export by 2010
Tribune News Service

Bangalore, August 7
Despite a rising rupee and a host of other problems, the Indian BPO companies continue to garner a larger share in the global BPO business with exports growing to $8.4 billion in 2006-07.

According to industry estimates, Indian BPO companies have strengthened their position as a global offshore hub by attracting 46 per cent of the global BPO business. Nasscom president Kiran Karnik said despite problems, including the rupee appreciation vis-à-vis the dollar, the Indian BPO industry would meet the export target of $10 billion by 2010.

The industry, however, says the potential is immense as the industry has just scratched the surface. Karnik says the industry is yet to fully penetrate into tier-II and tier-III cities. “The addressable market globally in this sector stands at $150 billion and there is much more that we can do to increase our presence”, he said at the concluding session of the Nasscom-ITeS BPO summit here.

He said Nasscom was taking a number of steps to further improve Brand India. He said emerging BPO industry and the story of the five lakh persons working in it needed to be told in the right perspective instead of focusing on stray cases.

Nasscom is set to organise a series of roadshows which will be held in small towns to generate awareness about the industry. The focus in the first phase will be the North-East region.

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PFC transfers Sasan project to Reliance Power

New Delhi, August 7
The controversial Sasan ultra mega power plant is finally ready to take off with state-run Power Finance Corporation (PFC) today transferring the 4,000 MW project to Anil Ambani group firm Reliance Power Ltd.

"This is the second time that a Letter of Intent is being awarded in Sasan UMPP... I do not want to go into details about the Lanco-Globleq consortium whose bid was disqualified by the Empowered Group of Ministers. I am sure that Anil Ambani will complete the project during the 11th Plan," power minister Sushilkumar Shinde said here.

Ambani, who received transfer documents from PFC, said: "This is a big challenge of creating the biggest UMPP of over 4,000 MW involving an investment of more than Rs 20,000 crore.

"As per the current bid schedule we plan to start the project in 69 months and shall review how the execution can be accelerated. This is a complex project involving mining of coal of over 15 million tonnes annually," he said.

With the completion of this project in Madhya Pradesh, seven states, including Delhi, Rajasthan, Haryana, Punjab and Uttarakhand, would be benefitted.

The Sasan project was the first in a series of nine such 4,000 MW power plants proposed to be set up in the country during the 11th and 12th Plans. Another such project at Mundra in Gujarat has already been transferred to Tata Power Company.

However, it has been delayed by nearly seven months as the Lanco-Globeleq consortium, which initially won the bid in December last year, was disqualified for violation of norms.

The project was later awarded to Reliance Power, a subsidiary of Reliance Energy Ltd, after it matched Lanco's lowest tariff bid of Rs 1.19 per unit. — PTI

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New income tax Act by Dec

New Delhi, August 7
The new income tax code that will simplify and replace the nearly five decades-old law will be introduced in Parliament in the next four months amidst indications that there may be "finetuning" of taxes but no "radical" changes in them.

Over the weekend, finance minister P Chidambaram has been working on drafting the code, which after being tabled in Parliament, will have to go through a process that will take quite some time before it is passed.

The finance minister says that the salaried class pays the maximum taxes and the honest taxpayer need not worry about any harassment. But the long wait for refunds will end once the refund banker system is extended throughout the country.

"Yes, I even worked on Saturday and Sunday. Before the end of the calendar year we will introduce it in Parliament," he told PTI in an interview when asked if he was on course on enacting a new Income Tax Code.

He said the code would begin from a zero base and would aim at simplification of the provisions of the income tax law. It would completely replace the IT Act of 1961, he said.

The history of income tax in modern India dates back to 1860, when the first Income Tax Act was introduced. After Independence, based on Law Commission's report, the present income tax law was enacted in September, 1961. — PTI

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PE investments to cross $15 b this year: PwC

New Delhi, August 7
Riding high on the Indian growth story, private equity (PE) investments in the country have crossed $2 billion during July alone and can touch $15 billion by the end of this year, a study by global consultancy firm PricewaterhouseCoopers (PwC) said today.

The surge in PE investments is the result of huge returns of over 25-30 per cent which Indian firms provide to investors. "This by far exceeds any other market in the developed countries," PwC executive director Sanjeev Krishan said.

Of the total, 55-60 per cent investments are made by overseas PE firms, he said, and added that "for the year ahead, leading PE firms such as ChrysCapital and Henderson Equity Partners have several deals in the pipeline".

Though some concerns have been raised by the PE firms regarding valuations, the sequential growth witnessed by the Indian economy has made them stay interested, the PwC report on 'M&A in the first half of 2007 in India' said.

Private equity investments have been rising steadily with over 200 deals worth over $6 billion during the first half of this year, compared to $7.9 billion in the whole of 2006.

There has also been a shift in sector focus by private equity funds with industries such as real estate, banking and financial services and media and entertainment witnessing tremendous growth in investment vis-a-vis traditional sectors such as IT, ITeS, pharmaceuticals, healthcare and telecom, the report said. — PTI

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DoT issues notices to telcos

New Delhi, August 7
Department of Telecom (DoT) has issued showcause notices to four mobile operators whose services have been found to be operational in ‘no service zones’ along the international border of the country.

The licensor has asked Bharti Airtel, Hutch, Reliance Communications and BSNL why they should not be asked to pay Rs 50 crore (per circle) as penalty for violation of the licensing agreement, official sources said.

As per DoT guidelines, telecom operators are not allowed to provide services within the range of 500 metres along the international border within the country.

“The licensee shall use requisite technology to ensure that the signals become unusable within 500 metres of international boundaries...The measure is for security reasons,” they state.

Earlier, the buffer zone was of 10 km width along the international border where no services were permitted.

The field units of vigilance telecom monitoring cell of DoT found that signals of these four mobile companies were available in the buffer zone of the border areas, the source said. — PTI

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Wipro to open 2 BPO centres in China

Bangalore, August 7
Wipro is setting up two BPO centres in China by next month with a combined employee pool of 300, while another unit in the US will be opened later, Wipro Chief Executive Officer (BPO) T K Kurien said here.

Wipro BPO’s Chinese foray is the second such initiative after Romania, where it has already set up a unit. Wipro BPO also plans to open a centre in the US in the next six to nine months, he said.

Aptech centres

IT education and training institute Aptech plans to open centres in Afghanistan, Jordan, Syria and Saudi Arabia shortly as part of its overseas expansion plans, Aptech CEO and MD Pramod Khera said here.

Aptech is also expanding its Arena animation network in India, where it plans to open another 10 centres by the end of the year, including a Rs-10-crore residential “train the trainer” facility at Karjat near Mumbai. — PTI

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Indo-Swiss MoU on IPRs

New Delhi, August 7
India and Switzerland today signed a memorandum of understanding (MoU) for closer cooperation between the two countries in fostering protection and promotion of intellectual property (IP) rights.

The MoU was signed here by the union minister of commerce and industry Kamal Nath and Doris Leuthard, federal councillor, department of economic affairs of the Swiss confederation.

The MoU envisages setting up of a joint committee to develop a dialogue on issues of IP, including exchange of views, information and experiences at the national level. — UNI

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BRIEFLY

Casio-Reliance Retail tie-up
New Delhi, August 7
Electronics firm Casio has tied up with Reliance Retail and is in talks with other players to expand its distribution network, Casio India head marketing and sales Kulbhusan Seth said. The company has tied up with the Reliance Retail to sell its products through the latter’s outlets and is also in the process of finalising agreements with others, Seth said. — PTI

Elecon bags Rs 409-cr orders
New Delhi, August 7
Elecon Engineering Company Ltd today said it has secured orders worth about Rs 409 crore. A Rs 379-crore contract from Damodar Valley Corporation. Elecon has also received a Rs 20-crore order from Chettinad International Coal Terminal Pvt Ltd for supply of two stacker reclaimers to handle coal at its terminal at Ennore Port. — PTI

Fiat tie-up
Milan, August 7
The Italian industrial conglomerate Fiat and Chery Automobiles of China said today they had signed a preliminary agreement to create a joint auto manufacturing company. The company, located in Wuhu in China's Anhui province, would produce and distribute Fiat and Alfa Romeo models as well as Chery group vehicles. Production, expected to total 175,000 vehicles a year, is projected to begin in 2009. — AFP

DuPont plant
New Delhi, August 7
Science-based products and services provider DuPont today said it will commission a plant at Baddi in Himachal Pradesh to manufacture animal and human healthcare solutions, seeking to earn Rs 50 crore revenue from the business in the next 2-3 years. "The plant is in the testing stage... It would commence production by the end of this month," DuPont India president and CEO Balvinder S Kalsi said. — PTI

Venus Remedies
Mumbai, August 7
Pharmaceutical company Venus Remedies today said it has completed and put on trials the last stage of phase IV of the multi-crore Baddi project, which started in April 2005. The company said the pre-filled syringe (PFS) facility has a production capacity of 10,000 pieces per day in a single shift while the hormones plant has the capacity of making 25,000 pieces a day. — PTI

Motorola pact
Bangalore, August 7
Motorola and Wind River Systems today announced that they have formed a strategic alliance designed to provide integrated end-to-end framework that addresses the full spectrum of high availability of telecom applications. Through this agreement, Motorola's embedded communications computing business and Wind River will work together to deliver bundled hardware and software solutions for next-generation networking designs. — PTI

CEAMA chief
Chandigarh, August 7
Ravinder Zutshi, Deputy MD of Samsung India Electronics, has been elected unopposed as president of Consumer Electronics and Appliances Manufacturers Association (CEAMA) for 2007-2008. Zutshi had earlier held the post of vice-president-North at CEAMA. Zutshi has been Samsung India’s head since its inception in December 1995. — TNS

ICICI Bank cuts deposit rates
Mumbai, August 7 
Close on the heels of SBI mooting a cut in deposit rates, private banking major ICICI Bank, today cut the interest rates on short term deposits. The revised interest rates for maturity of 181-365 days are 6.25 per cent as against 6.50 per cent earlier, while rates for tenure 366 days and up to two years, excluding special deposit schemes, have been revised to 6.25 per cent as against the current 6.75 per cent. However, interest rates on special deposit schemes have been kept untocuhed. — UNI

Bharti gets LoI for DTH
New Delhi, August 7
Telecom major Bharti Airtel today said it has received a letter of intent (LoI) from the ministry of information and broadcasting for its foray into direct-to-home (DTH) services in the country. The company expects to start DTH operations by fourth quarter this fiscal. — PTI

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