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THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE
TERCENTENARY CELEBRATIONS

B U S I N E S S

Inflation below 4 pc; growth up at 9.3 pc
New Delhi, August 31
Amid stringent monetary measures initiated by the RBI, the country’s economy expanded at an impressive rate of 9.3 per cent in the first quarter of the current financial year, while inflation dipped to its lowest level in 15 months at 3.94 per cent. Buoyed by the GDP growth, union finance minister P. Chidambaram expressed confidence that economy would expand by around 9 per cent in the full fiscal and investments would remain buoyant.

Another CRR hike on cards
Mumbai, August 31
Ripples of inflationary risks owing to higher asset prices and larger capital inflows, coupled with the surplus liquidity, may prompt the Reserve Bank to return with further policy actions, which may include another hike in Cash Reserve Ratios (CRR). Indications of further tightening in policy stance were evident in RBI’s annual report yesterday with the regulator contemplating higher food prices as a provocative factor in pushing up the consumer price inflation ahead of wholesale inflation.

TEX SUMMIT
Govt nod to TUFS soon

New Delhi, August 31
The Cabinet may give a favourable nod to the revised technology upgradation fund scheme (TUFS) within a fortnight, which is going to make more segments, including small and medium enterprises (SMEs), in the textile industry not only eligible for interest subsidy but also more competitive in the international arena.





 

World’s Most Powerful Women 
Sonia, Nooyi among top 10

Washington, August 31
Congress president Sonia Gandhi has been placed sixth, a notch behind Indra Nooyi, the Indian-American chairman and chief executive of PepsiCo, in the Forbes list of the world’s 100 most powerful women.
Angela Merkel Wu Yi Indira Nooyi Sonia Gandhi
Angela Merkel (No.1) continue to impress the world with her cool leadership at two back-to-back summits Wu Yi (No. 2) is the vice-premier of world’s largest and most powerful Communist nation Peoples’ Republic of China Indira Nooyi ( No. 5), chairperson Pepsico, has pushed the company a beyond soda-making company Sonia Gandhi (No. 6) is the leader of India’s most powerful political party. Her choice, Pratibha Patil was elected President of India

Talks between Bajaj brothers fail
New Delhi, August 31
Leading industrialist Rahul Bajaj failed to come at a settlement with his brother Shishir Bajaj on the division of the empire within the time alloted by the company law board (CLB).

ArcelorMittal to buy German Co for $499 m 
Brussels, August 31
Steel-maker ArcelorMittal will buy most of German gas distributor Saar Ferngas AG from coal miner RAG AG for $499 million, the companies said today.

HPCL, Mittal’s team to meet Badal
Chandigarh, August 31
The managing director of the Hindustan Petroleum Corporation Limited and a representative of steel king Laxmi Mittal will be reaching here tomorrow to meet Chief Minister Parkash Singh Badal with regard to the Bathinda oil refinery.

Apax to invest 426 cr in Apollo Hospitals
Mumbai, August 31
Apax Partners, a private equity and venture capital firm, has decided to invest Rs 426.4 crore in Apollo Hospitals Enterprise Ltd (AHEL).

Ficci moots 2-tier Central, state GST 
New Delhi, August 31
As the government gets down to the task of outlining a roadmap for the introduction of GST (Goods and Service Tax) by 2010, Ficci has suggested a two-tier GST model - a Central GST and a State GST with the existing taxing powers - rather than a national GST, which replaces both CENVAT and State VAT.

Indo-Thai trade to touch new heights: Nath
New Delhi, August 31
Union commerce and industry minister Kamal Nath has expressed hope that the bilateral trade between India and Thailand would take a growth trajectory that would take trade relations between the two countries to a new height.

BoB slashes house loan interest
Mumbai, August 31
Bank of Baroda (BoB) has reduced the rate of interest on housing loans to individuals and NRIs by up to 50 basis points.

Essar Oil to raise $750 m
New Delhi, August 31
Essar Oil plans to raise $750 million (about Rs 3,000 crore) from overseas to fund expansion of its Vadinar refinery in Gujarat.

CDRI licenses anti-malarial drug to Ipca
Chandigarh, August 31
Central Drug Research Institute (CDRI) has entered into a collaborative-cum-license agreement with Ipca for further development of, a promising synthetic substitute for drugs based on Artemisinin, derived from the plant Artemisia annua.

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Inflation below 4 pc; growth up at 9.3 pc
Tribune News Service

New Delhi, August 31
Amid stringent monetary measures initiated by the RBI, the country’s economy expanded at an impressive rate of 9.3 per cent in the first quarter of the current financial year, while inflation dipped to its lowest level in 15 months at 3.94 per cent.

Buoyed by the GDP growth, union finance minister P. Chidambaram expressed confidence that economy would expand by around 9 per cent in the full fiscal and investments would remain buoyant.

Gross Domestic Product (GDP) growth of 9.3 per cent during the first quarter of this fiscal was a shade lower than the growth rate of 9.6 per cent in the corresponding period last fiscal.

“Although provisional estimates of 9.3 per cent GDP growth are a shade below than the growth last year, but given the circumstances on account of external situation, it is quite satisfactory,” the finance minister told newspersons.

“As long as savings are high, capital formation remains high, it supports the hypothesis that investment will remain buoyant. I am confident that GDP growth rate will remain close to 9 per cent this year as well,” he added.

The GDP growth was driven by manufacturing, construction and services sector and even agriculture sector, a key area of concern for the government, rose by nearly 4 per cent. The high growth in the first quarter comes on top of 9.4 per cent expansion during 2006-07, the fastest in 18 years.

According to the data released by the government, growth in agriculture, forestry and fishing was 3.8 per cent, while mining and quarrying sector grew by 3.2 per cent.

Trade, hotels, transport and communication registered a growth rate of 12 per cent. Finance, insurance, real estate and business services grew at 11 per cent during the quarter.

At constant prices (1999-2000), quarterly GDP for the first quarter is estimated at Rs 7,23,132 crore as against Rs 6,61,335 crore in the same period last fiscal.

At current prices, GDP is estimated at Rs 9,78,760 crore as against Rs 8,50,797 crore in the first quarter of 2006-07, showing an increase of 15 per cent.

Reacting on the GDP figures, Planning Commission Deputy Chairperson Montek Singh Ahluwalia said, “Growth has widely been expected to fall. RBI has expected an 8.5 per cent growth for the year. So, 9.3 per cent growth is good.”

The government had another reason to cheer today as the inflation dipped below 4 per cent at 3.94 per cent during the week ended August 18, for the first time in more than 15 months, as against 4.10 per cent in the previous week.

The annual inflation rate was 5.12 per cent during the corresponding week last year.

The fall in inflation is being seen as an impact of the stringent monetary measures taken by the RBI and improvement in the supply-side management due to certain fiscal measures initiated by the government.

While prices of essential food items like vegetable, fruits, milk, eggs, meat and fish rose, those of most manufactured products and non-food primary articles declined.

The wholesale price index (WPI) for all commodities for the week ended August 18, 2007 rose by 0.1 per cent to 213.6 from 213.4 for the previous week.

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Another CRR hike on cards

Mumbai, August 31
Ripples of inflationary risks owing to higher asset prices and larger capital inflows, coupled with the surplus liquidity, may prompt the Reserve Bank to return with further policy actions, which may include another hike in Cash Reserve Ratios (CRR).

Indications of further tightening in policy stance were evident in RBI’s annual report yesterday with the regulator contemplating higher food prices as a provocative factor in pushing up the consumer price inflation ahead of wholesale inflation.

While the headline inflation, based on movements in Wholesale Price Index (WPI), moderated to 4.1 per cent in August from 5.9 per cent in March this year, consumer price inflation was placed at 5.7-7.8 per cent in June as against 6.7-9.5 percent in March.

“Although inflation has eased since March end, inflationary pressures could potentially persist for several reasons.

Accordingly, a continuous vigil supported by appropriate policy actions by all concerned would be needed to maintain price stability so as to anchor inflationary expectations on a sustained basis,” said RBI in its annual report.

However, the headline inflation, which has been softened to 3.94 per cent as on August 18 from 4.10 per cent last week, is still hovering higher compared to other emerging markets and to advanced economies in 2006-07, and posing concern for the government.

Reserve Bank is also cautious over the hardening of oil prices and about the inflationary pressures emanating from “strong growth in monetary aggregates, elevated asset prices and larger capital inflows” claiming impact on domestic liquidity conditions. — UNI

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TEX SUMMIT
Govt nod to TUFS soon
Tribune News Service

New Delhi, August 31
The Cabinet may give a favourable nod to the revised technology upgradation fund scheme (TUFS) within a fortnight, which is going to make more segments, including small and medium enterprises (SMEs), in the textile industry not only eligible for interest subsidy but also more competitive in the international arena.

“We have finalised the revised TUFS and are now awaiting clearance from the Cabinet, which is likely to take a decision on it in a fortnight from now,” textiles joint secretary Sudripta Roy said on the sidelines of the Textile Summit here.

Stating that focus would be given to technical textiles, processing as well as development of SMEs in the revised scheme Roy said, “We are looking at giving capital subsidy to these sectors since they are the thrust areas for the ministry”.

While Roy did not divulge details on the quantum of the revised scheme, sources said the ministry has asked for Rs 11,000 crore for running the scheme for five more years.

The scheme provides 5 per cent interest subsidy to units for upgrading their technology.

On rupee appreciation affecting textile exports, Roy said, “We are looking at a growth rate of 9 per cent for textile exports in the current year. However, this is not what we had anticipated but we are working to improve the export performance,” he said.

The Textile Ministry had set an export target of $ 25 billion for the current fiscal against $ 19 billion during 2006-07.

Earlier, chairman, Economic Advisory Council to the Prime Minister, C Rangarajan, said, “Given the inherent strength of the Indian economy, the level of external interest and attendant capital flows, the industry may need to factor in this amount of appreciation of Rupee,” he said.

The textile ministry has set a target of an annual growth rate of 16 per cent and an export growth of 22 per cent, which would enable the industry to acquire a 9 per cent share in the global textile market by 2015.

Textile minister Shankersinh Vaghela said issues like infrastructure, exploring new areas like technical textiles and rationalisation of labour laws need to be sorted out to ensure growth of the textile industry.

Addressing the inaugural session of the summit, commerce and industry Minister Kamal Nath said industries should focus on building brands that can compete globally. The two-day Textile summit is being organised to deliberate on problems faced by the sector.

During the summit, working groups would be constituted on textile inputs, human resource development, policy framework and role of government.

The recommendations of the core group would be presented to Prime Minister Mammohan Singh when he addresses the valedictory session of the summit tomorrow.

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World’s Most Powerful Women 
Sonia, Nooyi among top 10

Washington, August 31
Congress president Sonia Gandhi has been placed sixth, a notch behind Indra Nooyi, the Indian-American chairman and chief executive of PepsiCo, in the Forbes list of the world’s 100 most powerful women.

Angela Merkel, the first woman to become chancellor of Germany is No 1 for the second year in a row. the US business magazine said, “She continued to impress the world with her cool leadership at two back-to-back summits.” Chinese vice-premier Wu Yi was at No 2, Ho Ching, chief executive of Temasek Holdings, Singapore’s largest business conglomerate, at No 3 and US Secretary of State Condoleezza Rice at No 4.

Gandhi has jumped to sixth rank this year, up from 13th in 2006. Nooyi has been ranked at the fifth position, down from fourth last year.

However, two other Indian women - Lalita Gupte and Kalpana Morparia of ICICI Bank, ranked at 93rd position last year, have moved out of this year’s list.

In an accompanying list, Forbes named President Pratibha Patil among the most powerful “Women Behind Women”, whom it described as those women wielding behind-the-scenes power.

“Gandhi, the Italian-born leader of India’s most powerful political party, has come far since entering politics in the 1990s. Lawmakers recently elected Gandhi’s choice for president, Pratibha Patil, in a historic vote seen as a step forward for India’s women and girls who endure daily discrimination,” Forbes said.

Abouy Nooyi, Forbes said last February, Nooyi added the title of chairman to her chief executive position at the food-and-beverage giant, maker of Frito-Lay snacks, Pepsi beverages, Gatorade sports drinks, Tropicana juices and Quaker foods; a whopping 17 PepsiCo brands each generate $1 billion or more in annual sales.

Nooyi has pushed PepsiCo to move beyond soda, first by helping to start the company’s fast-food chains in 1997, and later by spearheading the purchase of Tropicana in 1998.

Another person of Indian origin on the list is Vidya Chhabria, chairperson Jumbo Group, UAE, at No 97.

Nooyi and Gandhi have been ranked ahead of Queen Elizabeth II (23rd), Bill Gates’ wife Melinda Gates (24th), talk show celebrity Oprah Winfrey (21st), eBay chairperson Margaret Whitman (22nd), US president aspirant Hillary Clinton (25th) and US First Lady Laura Bush (60th). — Agencies

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Talks between Bajaj brothers fail

New Delhi, August 31
Leading industrialist Rahul Bajaj failed to come at a settlement with his brother Shishir Bajaj on the division of the empire within the time alloted by the company law board (CLB).

The brothers today sought some more time from the principal bench of CLB.

Counsels representing Rahul and Shishir today informed the bench that the two brothers have not been able to arrive at an out-of-court settlement, however, adding that they would carry on negotiations to settle the matter.

Accepting it, CLB chairman S Balasubramanian adjourned the matter to the third week of October. The case would now again come up before CLB on October 22, when the two brothers are expected to report about the outcome of their negotiations.

If they fail to reach a settlement by then, the board would resume its scheduled procedure and hear the case for three consecuitive days from October 23-25, as the four-year-old case has reached the final stages of argument.

Senior counsel and former Attorney General Ashok Desai, representing Rahul Bajaj, hoped that by October the brothers would be able to reach a settlement. — PTI 

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ArcelorMittal to buy German Co for $499 m 

Brussels, August 31
Steel-maker ArcelorMittal will buy most of German gas distributor Saar Ferngas AG from coal miner RAG AG for $499 million, the companies said today.

ArcelorMittal said the purchase of 76.88 per cent of the largest gas supplier in the German states of Saarland and Rhineland-Palatinate would fit well with its energy network in the region.

It owns a 20-per cent stake in Luxembourg gas distributor Soteg, and the new deal will allow it increase that control because Saar Ferngas owns 10 per cent of Soteg.

Saar Ferngas pipes gas to city electricity plants and industrial plants and power stations. A fifth of it is owned by E.On AG, while German public authorities own another 3.12 per cent.

For RAG the sell off allows it refocus on generating electricity from coal and renewable energies, according to RAG chief executive Werner Mueller.

ArcelorMittal will acquire the shares under the same conditions agreed with RWE, the companies said.

The deal still needs approval from ArcelorMittal’s board and EU antitrust authorities, but it should be completed by the year-end . — AP

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HPCL, Mittal’s team to meet Badal
Tribune News Service

Chandigarh, August 31
The managing director of the Hindustan Petroleum Corporation Limited and a representative of steel king Laxmi Mittal will be reaching here tomorrow to meet Chief Minister Parkash Singh Badal with regard to the Bathinda oil refinery.

Both, HPCL and Mittal, are equal partners in the Bathinda oil refinery. Sources said they would discuss various issues related to the refinery with Badal. They would also meet chief secretary Ramesh Inder Singh and other senior officers.

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Apax to invest 426 cr in Apollo Hospitals

Mumbai, August 31
Apax Partners, a private equity and venture capital firm, has decided to invest Rs 426.4 crore in Apollo Hospitals Enterprise Ltd (AHEL).

The board of directors of AHEL today approved issuing up to 70.47 lakh equity shares of Rs 10 each on a preferential basis to funds advised by Apax Partners at a price of Rs 605.07 per equity share, it said.

The company would seek final approval of shareholders at the extraordinary general meeting scheduled to be convened on October 5. — PTI

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Ficci moots 2-tier Central, state GST 
Tribune News Service

New Delhi, August 31
As the government gets down to the task of outlining a roadmap for the introduction of GST (Goods and Service Tax) by 2010, Ficci has suggested a two-tier GST model - a Central GST and a State GST with the existing taxing powers - rather than a national GST, which replaces both CENVAT and State VAT.

In a letter today to the empowered committee of state finance ministers, finance secretary, adviser to the finance minister, revenue secretary and other senior officials of the finance ministry, Ficci has pointed out that ever since the idea of a GST was moved by the Kelkar Task Force, a widely held presumption has been that GST would be levied nationally, replacing both the CENVAT and the VAT now being levied at state levels.

Ficci has stated that a unified tax on goods and services to be administered by the Central Government and sharing the revenues with states may perhaps be a distant dream, for states may not like to forgo their Constitutional taxing powers and reducing themselves to mere spending agencies with little or no power to raise what they spend.

In this perspective, it may be advisable to have, at least in the initial stages, a two-tier GST model - Central GST and State GST with the existing taxing powers.

FICCI has also stressed the need to ensure that over the next two-three years service tax rate and the CENVAT rate are converged at around 12 per cent, ensuring inter alia that the combined tax incidence of GST, including VAT, is around 20 per cent.

The same should cover all segments, with a threshold exemption limit and dispute settle mechanism inbuilt in the model. There must not be any other local levy after the emergence of GST. FICCI is confident that such a tax system would lead to better tax compliance and buoyancy in taxes to the exchequer.

FICCI has also highlighted the need for proper co-ordination between the centre and state governments, determining what sort of services to be levied by State governments and addressing the issue of cross credit of input tax paid on goods and services in the beginning itself to avoid litigations later on.

Further, there should also be a breathing period to implement the GST. The cooling period may be around one year in which corporates and other players can understand the implications of the new system. 

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Indo-Thai trade to touch new heights: Nath
Tribune News Service

New Delhi, August 31
Union commerce and industry minister Kamal Nath has expressed hope that the bilateral trade between India and Thailand would take a growth trajectory that would take trade relations between the two countries to a new height.

He hoped that the FTA negotiations, that are underway covering trade in goods, services and investments, including issues such as rules of origin, trade facilitation, anti-dumping and safeguard measures, dispute settlement mechanism would benefit the two countries.

He stated this while welcoming Kosit Panpiemras, deputy Prime Minister and minister of industry of Thailand during the Indo-Thai bilateral talks here today.

Trade between India and Thailand has grown significantly during 1992-97 from a level of $399.8 million in 1992 to $896.4 million in 1997. Bilateral trade crossed the $1 billion mark during 2000 ($1,122.6 million), a significant increase of 40.2 per cent compared to 1999 ($800.2 million). 

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BoB slashes house loan interest

Mumbai, August 31
Bank of Baroda (BoB) has reduced the rate of interest on housing loans to individuals and NRIs by up to 50 basis points.

The new rates shall be effective for all new housing loans sanctioned on or after September 1.

In case of floating rate option for loans up to 20 lakh, the rates vary from 10 per cent to 11 per cent for different period from five years to 25 years, and for more than 20 lakh, the rates vary from 10.25 per cent to 11.5 per cent.

In case of fixed rate option, the rates for loans up to 20 lakh vary from 11.25 per cent to 12.5 per cent for different period from five to 15 years and for more than 20 lakh, the rates vary from 11.5 per cent to 12.75 per cent, the bank said. — UNI 

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Essar Oil to raise $750 m

New Delhi, August 31
Essar Oil plans to raise $750 million (about Rs 3,000 crore) from overseas to fund expansion of its Vadinar refinery in Gujarat.

Essar, which owns a 10.5 million tons a year refinery at Vadinar, said in a notice to the stock exchanges it would raise the money through issue of foreign currency convertible bonds, global or American depositary receipts, or other instruments overseas.

A company spokesperson said the funds would be primarily used for expanding and upgrading Vadinar refinery’s capacity to 16 million tonnes.

Industry sources indicated that the refinery expansion, costing $1.2 billion, may take place by 2010. In addition, Essar is mulling on plans to build a new 16 million tonne refinery in a special economic zone in Gujarat.

Vadinar refinery currently runs at 7.5 million tonne capacity and is expected to reach full strength by October. Essar will convene an annual general meeting on September 29 for seeking shareholders approval for the proposal.

Essar had, last month, shut the refinery for three weeks to integrate last two secondary processing units. It was restarted on August 14. The refinery is expected to operate at full capacity of 10.5 million tonnes from October when the additional facilities are up and running. — PTI 

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CDRI licenses anti-malarial drug to Ipca
Tribune News Service

Chandigarh, August 31
Central Drug Research Institute (CDRI) has entered into a collaborative-cum-license agreement with Ipca for further development of, a promising synthetic substitute for drugs based on Artemisinin, derived from the plant Artemisia annua.

While CDRI is actively engaged in research areas of national priorities like anti-malarial, tuberculosis and reproductive health along with life style and age-related disorders, Ipca Laboratories is a Mumbai-based fast growing fully integrated pharmaceutical company, leader in anti-malarial drugs in India.

Artemisinin-based combination therapy has been recommended by WHO for the treatment of P. falciparum malaria. The compound, under licensing, is being developed in oral form to meet the new global challenges of the malaria incidence.

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BRIEFLY

BHEL contract
New Delhi, August 31
BHEL today announced it has bagged a contract for 500 MW nuclear power plant at Kalpakkam in Tamil Nadu, being set up by Bhartiya Nabhikiya Vidyut Nigam (BNVL). “Under international competitive bidding, we have bagged a contract for the turbine generator and secondary side equipment for the first prototype fast breeder reactor of 500 MWe rating,” BHEL said. — PTI

Birla Sun Life
New Delhi, August 31

Birla Sun Life Insurance today has launched two micro insurance products -- Bima Suraksha Super and Bima Dhan Sanchay. Bima Suraksha Super is a non-participating, non-linked term plan, while the other one is a non-participating, non-linked term with return of premium plan, Birla Sun Life Insurance said. — PTI

Omaxe Ltd
Mumbai, August 31
Omaxe Ltd today said it has bagged the contract for commercial development of Chawri Bazar Metro Station from Delhi Metro Rail Corporation Ltd (DMRC) for Rs 18.43 crore. DMRC has floated a tender and Omaxe’s offer of Rs 25,51,001 per quarter for 1,529 square metre been accepted, the company informed the BSE. 
— PTI

ONGC-BP pact
New Delhi, August 31
ONGC today said it has entered into an MoU with global oil major British Petroleum (BP), to collaborate in exploration and production business in India and abroad, which includes sharing of knowledge in coal bed methane and deepwater exploration. — UNI

Big FM in US
New Delhi, August 31
Adlabs’ radio initiative, Big FM, today announced its tie-up with the US Asian FM for providing non-music content to NRIs in the USA. “This tie-up marks the foray of Big FM in the international arena. Our effort is to entertain the Indian diaspora, giving them flavour of rado, back home,” Big FM vice-president (business development) Jayyant Bhokre said. — PTI

GMR Energy
Shimla, August 31
GMR Energy has paid highest ever upfront premium of Rs 91 lakh per megawatt to date to secure the 180 MW Holi-Bajoli in Chamba district and plans to add 3,000 MW installed capacity over the next seven years, said director B.V.N. Rao. — TNS

Bajaj Auto
Chandigarh, August 31
Bajaj Auto Limited will launch its new bike 125 cc, fitted with DTS-Si technology next month in the country, said Amit Nandi, general manager (marketing) Bajaj Auto. — PTI 

Fidelity-SBI tie-up
Ludhiana, August 31
Fidelity Fund Management (FFM) entered into an agreement today with the State Bank of India (SBI) for the distribution of its products. S. K. Mishra, general manager (marketing and cross-selling) SBI,and Ashu Suyash, MD and country head, FFM, signed the agreement. FFM's entire suite of mutual funds will now be available at the branches of SBI. Mishra said: "In keeping with SBI’s growth plans into new strategic initiatives, we are adding a new fund partner - Fidelity Fund Management - whose products we will be distributing." — TNS

Fiat plan
London, August 31
Fiat SpA is planning to join hands with India’s top corporate house Tatas in the latter's bid to acquire Ford Motor’s British brands Jaguar and Land Rover, an Italian newspaper reported today. The two companies already have a partnership under which Tata Motors distributes the Italian company's vehicles through its showrooms in India. — PTI

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