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THE TRIBUNE SPECIALS
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B U S I N E S S

Political constraints cripple growth: PM
New Delhi, October 12
Emphasising that the country is at the threshold of a new era of social and economic development, Prime Minister Manmohan Singh warned that the nation and the economy "will not move forward on their own while we dissipate our energies in meaningless controversies."

RIL to invest $8-9 b in Jamnagar
To pursue acquisition mode of growth
Reliance Industries chairman Mukesh D. Ambani at the AGM of the company in Mumbai on Friday.
Mumbai, October 12
Reliance Industries is all set to embark on a new phase of growth on the back of acquisitions around the world, its chairman Mukesh Ambani said at the company’s 33rd AGM here today.


Reliance Industries chairman Mukesh D. Ambani at the AGM of the company in Mumbai on Friday. — PTI

FM to continue reforms in next budget
New Delhi, October 12
Finance minister P Chidambaram today said he would continue to push reforms in his next budget, killing the notion that it would be populist ahead of the election.


‘Speculators driving Sensex’



EARLIER STORIES

 
Satya Prakash Bagla, managing director of Exclusive Motors (centre), Ian Gorsuch (L), regional director, Bentley Motor Cars, West Asia, Africa and India, and Richard Stagg, British high commissioner, at the launch of Bentley’s super luxury convertibles, Bentley Azure and Bentley Continental GTC, in New Delhi on Friday.
Satya Prakash Bagla, managing director of Exclusive Motors (centre), Ian Gorsuch (L), regional director, Bentley Motor Cars, West Asia, Africa and India, and Richard Stagg, British high commissioner, at the launch of Bentley’s super luxury convertibles, Bentley Azure and Bentley Continental GTC, in New Delhi on Friday. — Tribune photo by Manas Ranjan Bhui

Telco panel finalises TRAI proposals
New Delhi, October 12
The Telecom Commission, the policy making wing of Department of Telecom (DoT), is understood to have taken a final view on regulator TRAI’s licensing reform proposals, including the one that there be no cap on number of operators in a circle.

Manufacturing, power push up industry output
New Delhi, October 12
Belying the apprehensions of a slowdown, the industrial production of the country bounced back to 10.7 per cent in August, higher than the unexpectedly weak revised annual growth of 7.5 per cent in July, thanks to buoyancy in manufacturing and better performances posted by power and mining sectors.

SC notice on REL’s plea on SEZ
New Delhi, October 12
The Supreme Court today issued notice on a petition filed by Anil Ambani-owned Reliance Energy Ltd (REL) seeking transfer of a petition challenging acquisition of land by the company for setting up of a special economic zone in Noida, Uttar Pradesh.

No release of wheat in open market: Govt
New Delhi, October 12
The government has no plans to release wheat and other commodities in the open market despite the reported five per cent price hike, which is also not justified, a top government official said.

RCom initiative
Chandigarh, October 12
Reliance Comm (RCom) has announced its collaboration with One Laptop Per Child (OLPC) Foundation, a global alliance to promote e-learning for children. Under the initiative, Reliance Communications would provide internet connectivity, network backbone, logistics and support to the OLPC initiative in India, using its state-of-the-art network that would cover over 25,000 towns and 6,00,000 Indian villages by March 2008.

Corporate Results
HDFC Bank’s profit up 40 pc
Mumbai, October 12
Led by a strong growth in net interest income, private sector lender HDFC Bank today posted a 40.1 per cent growth in net profit at Rs 368.5 crore for the second quarter ended September 30.

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Political constraints cripple growth: PM
T.R Ramachandran
Tribune News Service

New Delhi, October 12
Emphasising that the country is at the threshold of a new era of social and economic development, Prime Minister Manmohan Singh warned that the nation and the economy "will not move forward on their own while we dissipate our energies in meaningless controversies."

In an oblique reference to the Ram Setu controversy whipped up by the Opposition BJP, Dr Singh wondered that "if all the time and energy is spent battling the ghosts of the past, how can we hope to do the day's work efficiently? And I dare say there is a lot of work to be done."

Observing that there is a vast unfinished agenda of development and reform, the Prime Minister told the Hindustan Times Summit here today that there are vital areas of the economy waiting to be reformed and taken forward. These were agriculture and rural development, infrastructure and power, education, health and public service delivery.

He expressed concern, particularly about rural development and education, and declared that these will remain the government's key focus areas for a long time. He said the recent acceleration of economic growth coupled with the advances in social and human development have renewed the hope of banishing poverty, ignorance and disease. At the same time "we cannot rest on our laurels or take our successes for granted. In the past five years, our economy growth has been close to nine per cent. This is unprecedented. This can be sustained in the future too but we cannot take this for granted."

The Prime Minister underlined the need for improving the quality of the education system, the public delivery system especially in health care, sanitation, drinking water and public transport. "India has a long road to travel to join the ranks of even the newly industrialised developing countries."

He said the pace of economic reforms may have slowed because of political constraints but they are very much on track and will be pursued in the remaining term of his government.

Drawing attention to "limitations on our capacities," Dr Singh said "I will not be honest if I did not confess that there are constraints to our ability to go fast and fast enough."

About the medium term risks faced by the Indian economy, he said as India integrates more with the global economy, certain developments in other economies will certainly affect the country as well. "But these are acceptable risks as of now. I feel there is no great danger that these risks will overwhelm us or derail our economy."

He recalled the pulls and pressures faced in 1991 when he as the union finance minister in the then P.V Narasimha Rao government initiated the sweeping economic reforms.

"If we had dithered, if we had yielded to our critics, if we were not firm in our resolve, if we had been overwhelmed by self doubt, we would have taken the country into a whirlpool," the Prime Minister said. "Many people worried that our policies will lead to the de-industrialisation of India. But on the contrary, those reforms unveiled a new era of enterprise and creativity for India."

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RIL to invest $8-9 b in Jamnagar
To pursue acquisition mode of growth
Tribune News Service

Mumbai, October 12
Reliance Industries is all set to embark on a new phase of growth on the back of acquisitions around the world, its chairman Mukesh Ambani said at the company’s 33rd AGM here today.

"Traditionally Reliance has grown by building businesses from scratch. It will now actively pursue an acquisition mode of growth," Ambani said.

As part of its strategy to grow via acquisitions, Ambani said RIL has already made acquisitions in Malaysia and Africa, which are the fore-runners of the company's new growth plans.

RIL's shift in strategy would also mean that the company would be looking at partnership with like-minded companies in a number of businesses, he said.

Elaborating on RIL's new retail initiative, Ambani said the agriculture and rural sectors would be the next major focus of Reliance Industries.

As part of the agro-driven strategy, RIL would be bridging the Indian farmer with global consumers through its organised retailing initiative.

RIL would also concentrate on technological innovations, Ambani said. The company, which had so far grown on the strength of its licensing technologies, is now finding this process very limiting" in the context of technology-driven opportunities and global competitors harbouring Indian aspirations," Ambani said. Consequently, RIL would invest in innovation, according to its chairman.

The company has already set up Reliance Centre for Technology at Navi Mumbai and was in the process of building an Innovation Council at Pune which would have several Nobel Prize winners and global thought leaders, Ambani said.

Defends retail venture

Clearly on the defensive following protests by small retailers in different parts of the country, Ambani said the company's retail initiative would not harm small and local neighbourhood retailers.

He felt that the RIL's retail ventures would not jeopardise small traders. "This initiative had been taken for the benefit and development of rural India and offers wider and better choices for consumers," he said.

He noted that Reliance Retail, which is investing between $5 and $6 billion, launched its first store in November last year and has since opened 300 stores in 30 cities.

Jamnagar ahead of schedule

Ambani stated that the company's new plant at Jamnagar would be completed ahead of schedule and at half the capital cost of refineries built abroad, Ambani added. The plant would have a coke gasification complex by 2012 with a capacity of six million tonnes per year.

According to Ambani, RIL would invest $8-9 billion in the next three to four years in the Jamnagar 'Super Site'. The company's operations at Jamnagar would have two refineries, a six million tonne per annum Integrated Combined Cycle Coke Gasification Complex (IGCC), a olefins complex and an aromatics complex.

He said RIL would expand paraxylene capacity at Jamnagar from 1.9 million tonnes per annum (MTPA) now to 4.5 MTPA in two phases. "With this expansion, Reliance will have 15 per cent of global paraxylene capacity," Ambani said.

RIL would be investing $4 billion in the hydrocarbons sector and was looking at expanding in other markets like Egypt and Russia, he added.

The company has also acquired 8,300 acres in Haryana to develop a special economic zone. According to Ambani, the company's plans to set up SEZs around the country were proceeding smoothly.

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FM to continue reforms in next budget

New Delhi, October 12
Finance minister P Chidambaram today said he would continue to push reforms in his next budget, killing the notion that it would be populist ahead of the election. "I expect to present the budget...It will be a budget which will continue the efforts we made in the last four budgets", he said speaking at the Hindustan Times Leadership Summit here.

Chidambaram's comments come close after UPA chairperson Sonia Gandhi and Prime Minister Manmohan Singh's assertion that the government would last its full term (till May 2009).

"There is no reason to change the course. If we have delivered low growth, there could be a reason to change the course. But on an average we have delivered 8.6 per cent growth rate".

Pointing out that the most pessimistic economic growth projection for this year was 8.5 per cent, he said he does not see any reason for changing the course. "On the contrary, we must remain on the course and I will remain on the course." — PTI

‘Speculators driving Sensex’

Finance minister P Chidambaram today attributed the recent surge in stock markets to speculators and hoped "things will cool down soon" — a prediction reflected in the plummeting Sensex.

"To some extent speculators are taking advantage of the rise in the Sensex... Things will cool down," he said on the sidelines of the Hindustan Times Leadership Summit here. The 30-share BSE index today fell by 395.03 points to 18,419.04, against the record high level of 18,814.07 reached in yesterday's trading.

Chidambaram, who had cautioned retail investors from entering the market when it crossed 18,000 points, said: "Sensex is an index of 30 stocks (and) as such it is a number.

We don't invest our future in Sensex." "Steep rise in Sensex sometimes surprises me, sometimes worries me. I do not think fundamentals change so rapidly day-to-day. Our assessment tells us Sensex is driven by copious inflow of funds," he said.

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Telco panel finalises TRAI proposals

New Delhi, October 12
The Telecom Commission, the policy making wing of Department of Telecom (DoT), is understood to have taken a final view on regulator TRAI’s licensing reform proposals, including the one that there be no cap on number of operators in a circle.

Some of the proposals have been accepted, some tweaked and some have been rejected, sources said.

The commission is of the opinion that auction of additional spectrum is not a considerable idea at the moment, keeping in mind the affordability and low teledensity.

The report of the commission will now be put up before communications minister A Raja at the earliest and depending on his approval, the new licensing policy may be unveiled ‘at any moment’.

Although senior officials were tight-lipped about the details of the proposals that has been finalised by the commission, some of these recommendations, which have been accepted, are bringing down the combined subscriber base criteria from 67 per cent to 40 per cent in the merged entity in case of merger and acquisitions.

Stating that licenses were always ‘technology neutral, sources said the aspirants would have the entry fee of a UASL licence (over Rs 1,680 crore for a pan-India licence) to get the spectrum even if they plan to offer service in fewer circles.

The panel is believed to have opined that giving additional spectrum to operators through auction is not a viable idea, but the corresponding revenue share percentage should increase for higher allocations to serve the twin purposes of its efficient use and non-hoarding of the radio waves.

The current methodology of additional spectrum allocation beyond 6.2 Mhz and to GSM players and 5 Mhz to CDMA players, based on user numbers, in all probability will continue, but with increased subscriber threshold and revenue share.

DoT has not considered TRAI’s recommendation to increase the threshold cap of equity cross holdings to 20 per cent by the same promoter in two separate companies offering services in the same licence area, saying this would not make any difference to the prevailing scenario. — PTI

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Manufacturing, power push up industry output
Tribune News Service

New Delhi, October 12
Belying the apprehensions of a slowdown, the industrial production of the country bounced back to 10.7 per cent in August, higher than the unexpectedly weak revised annual growth of 7.5 per cent in July, thanks to buoyancy in manufacturing and better performances posted by power and mining sectors.

The industrial production was 0.4 per cent more as compared to 10.3 per cent in the corresponding period last year.

The Cumulative Industrial Growth during the first five months (April-August 2007-08), however, dipped to 9.8 per cent from 11.0 per cent recorded during the corresponding period last year, according to the Index of Industrial Production (IIP) released by the government here today.

The power generation during August 2007 grew by 9.2 per cent as compared to 4.1 per cent a year ago, while the growth rate of mining sector improved significantly to 17.1 per cent as against a decline of 1.7 per cent in the corresponding month last year. The manufacturing sector recorded double digit growth rate at 10.4 per cent during August, down from 11.9 pc a year ago.

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SC notice on REL’s plea on SEZ

New Delhi, October 12
The Supreme Court today issued notice on a petition filed by Anil Ambani-owned Reliance Energy Ltd (REL) seeking transfer of a petition challenging acquisition of land by the company for setting up of a special economic zone in Noida, Uttar Pradesh.

A Bench headed by Chief Justice K G Balakrishnan while issuing notice to respondent Sohan Pal Sharma (petitioner before the Allahabad High Court) also tagged the petition with similar matters pending before it.

Sharma had moved the High Court challenging the provisions of the SEZ Act. He had also sought quashing of the agreements and permissions granted by the Uttar Pradesh government to the company. — PTI

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No release of wheat in open market: Govt

New Delhi, October 12
The government has no plans to release wheat and other commodities in the open market despite the reported five per cent price hike, which is also not justified, a top government official said.

“We have no immediate plans to sell anything in the open market, but that again is for the food ministry look into. The hike is not significant and there are enough stocks in the country today anyway. I don’t see any real justification for rise in price,” union cabinet secretary K M Chandrasekhar said on the sidelines of a seminar here today.

Quizzed, whether government plans to release wheat in the open market in view of the spurt in demand and prices during festival season, Chandrasekhar said that public distribution (PDS) system becomes active during such events and they try to ensure that there are lots of outlets to supply essential commodities.

“The prices of pulses too have been reasonably steady in the last few days and not going up and lot of imports have taken place. So prices are holding. If the prices are maintained at reasonable levels, it may not be necessary for the government to intervene, but if the prices show a tendency to go up, we will,” said Chandrasekhar.

He pointed that if one were to look at the international market and compare India, it is like an oasis as far as prices of wheat are concerned as they have been maintained well within the limit.

The cabinet secretary also trashed reports of government planning to import duty-free wheat flour. “There is no such decision at present, but every issue it will depend on prices. If they are maintained, government will not interfere”. — PTI

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RCom initiative
Tribune News Service

Chandigarh, October 12
Reliance Comm (RCom) has announced its collaboration with One Laptop Per Child (OLPC) Foundation, a global alliance to promote e-learning for children. Under the initiative, Reliance Communications would provide internet connectivity, network backbone, logistics and support to the OLPC initiative in India, using its state-of-the-art network that would cover over 25,000 towns and 6,00,000 Indian villages by March 2008.

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Corporate Results
HDFC Bank’s profit up 40 pc

Mumbai, October 12
Led by a strong growth in net interest income, private sector lender HDFC Bank today posted a 40.1 per cent growth in net profit at Rs 368.5 crore for the second quarter ended September 30.

The total income of the bank grew by a robust a 44 per cent over the corresponding quarter last year to stand at Rs 2,845.1 crore.

The country's second largest private sector lender reported a net profit of Rs 262.94 crore and an income of Rs 1,975.75 crore in the second quarter last fiscal.

"Clearly our net interest income (NII) has been the growth driver for this quarter. The NII was up by 47.6 per cent at Rs 1,162.7 crore as against Rs 788 crore in the corresponding quarter last year," HDFC Bank executive director Paresh Sukhtankar told PTI.

This was driven by an average asset growth of 39.4 per cent and a core net interest margin (NIM) of four per cent as against 3.8 per cent in Q2 of FY07.

Exide net Rs 62.24 cr

Exide Industries today announced a net profit of Rs 62.24 crore for the quarter ended September 30 against Rs 43.74 crore for the same period last year, a rise of 42 per cent.

The total income of the company has risen 48 per cent to Rs 668.29 crore for the September quarter, against Rs 453.58 crore in the same period last year, Exide informed the Bombay Stock Exchange.

Idea Cellular

Aditya Birla group firm Idea Cellular Ltd today posted a profit after tax of Rs 502.06 crore for the year ended March 31 where as the same was at Rs 125.60 crore for the previous year.

It earned total revenue of Rs 4,387.33 crore for the year ended March 31, 2007, where as the same was at Rs 2,017.64 crore for the same period last year, the cellular services provider said in a filing to the Bombay Stock Exchange.

The results are not comparable following the court orders sanctioning the scheme of amalgamation of a number of subsidiaries with the company, it said.

The group has posted a net profit after tax of Rs 502.22 crore for the year ended March 31 where as the same was at Rs 211.77 crore for the previous year.

Mastek net up

Software solution firm Mastek today posted consolidated net profit after tax (PAT) at Rs 25.12 crore for the quarter ended September 30, where as the same was at Rs 21.19 crore for the corresponding quarter last year.

The total income of the group was Rs 211.49 crore for the quarter ended September 30, while the same was at Rs 198.92 crore for the same quarter a year ago.

The figures for the quarter ended September 30, are not comparable with the corresponding previous year's figures since with effect from March 9, the company has sold its stake in the JV with Deloitte, Mastek said in a filing to the Bombay Stock Exchange.

On a standalone basis, the company has recorded a net profit of Rs 16.95 crore for the first quarter ended September 30, whilst it was at Rs 17.94 crore for the same quarter a year ago. — Agencies

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BRIEFLY

ICICI Bank cuts interest rate
Mumbai, October 12
ICICI Bank has reduced the interest rate on its special deposit schemes by 0.50 per cent. The revised interest rate on the 390, 590 and 890-day deposits will now be 9 per cent as against the earlier 9.5 per cent, the bank said in a press release issued here today.The revision will come into effect from October 15. — PTI

Inflation slips
New Delhi, October 12
The downward trend in the Wholesale Price Index continued with inflation dipping again to 3.26 per cent for the week ended September 29, as against 3.42 per cent for the previous week raising the hope of RBI softening the monetary policy in its October 30 review.— TNS

A Birla Group
Amritsar, October 12
The Rs 9,000-crore Aditya Birla Group plans to increase the production of cement by 15 million tonnes per annum by 2008-09. Stating this here today, O.P. Puranmalka, group executive president and chief marketing officer (cement business), said at present the company was producing 31 million tonnes and after ramping up its capacity, the company hopes to achieve the target of 46 million tonnes.— TNS

Palador Pictures
Chandigarh, October 12
Palador Pictures, the only Indian firm to have bought legal rights to nearly 1,000 world cinema titles, announced an exclusive tie-up with Tata Sky. Award wining American, European and Asian films will now be available on Tata Sky’s pay-per-view service, Showcase, from today.— TNS

Punj Lloyd
New Delhi, October 12
Engineering and construction firm Punj Lloyd today said it has bagged Rs 389-crore contract to construct the multi-product pipeline from Qatar Petroleum. This order is the fourth project to be executed in the country by Punj Lloyd. With this, the order backlog for the Punj Lloyd group on consolidated basis has gone up to Rs 16,872.46 crore. — TNS

Stake in IFCI
Mumbai, October 12
Foreign fund Goldman Sachs Investments, Mauritius, has offloaded 2.33 per cent stake in the country's oldest financial institution IFCI in open market transactions on the BSE. Goldman Sachs Investments sold off about 2.33 per cent stake represented by 1,48,94,770 equity shares during August 9 to October 3 period this year, IFCI said in a disclosure to the BSE.— PTI

Rajesh Exports
New Delhi, October 12
Rajesh Exports today said it has bagged Rs 743-crore order of gold jewellery from Singapore-based Gold Star Jewellery. The order is to be completed by January-end next year and the company said execution of this order will significantly add to its bottom line. — UNI

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