SPECIAL COVERAGE
CHANDIGARH

LUDHIANA

DELHI



THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
B U S I N E S S

Welcome 2009
Inflation slides to 6.38%

New Delhi, January 1
The New Year began on a cheerful note with the inflation further sliding to a 10-month low of 6.38 per cent raising hopes of the RBI further reducing key policy rates to give another booster to industry, reeling under the slowdown.

Spectrum Issue
FinMin for 100 pc hike in reserve price
New Delhi, January 1
In a development that could delay start of next generation 3G mobile telephony, the Finance Ministry today asked the Department of Telecom (DoT) to double the reserve price for pan-India 3G spectrum to Rs 4,040 crore.

Export woes worse
November growth negative
New Delhi, January 1
The turmoil in the West is once again bearing on the exports from India as can be seen in the official figures. India’s exports fell by 9.9 per cent in November 2008 under the impact of declining consumer demand in the US and other major global markets, with negative growth for the second month running and widening monthly trade deficit by over $10 billion.



EARLIER STORIES





A file photo of a Sri Lankan tea broker tasting teas at a broker’s office in Colombo. Sri Lanka, the world's second biggest exporter of tea, is hoping to buck global commodity prices. Tea export earnings are on track to hit a record $1.4 billion in 2008, buoyed by sustained high wholesale prices, a lack of labour problems and growing demand for the brew. — AFP

India Inc’s pains to multiply: Kamath
New Delhi, January 1
Corporate India is in for a more painful period as profitability will take a hit over the next six months, ICICI Bank CEO KV Kamath today warned and asked the industry to be patient for opportunities as the economy will start recovering in the second half of 2009. “There is pain for another two quarters but I see an environment full of opportunity thereafter,” Kamath, who is all president of Confederation of Indian Industry, said.

Anil Ambani tops ‘billionaire blowups’ list
New York, January 1
Industrialist Anil Ambani continues to be on the focus of US magazine Forbes but this time around for topping the list of 'Billionaire Blowups of 2008' by virtue of turning the biggest loser of wealth in less than a year of being touted as the biggest gainer in the world. Besides ranking him as the sixth richest person in the world with a net worth of $42 billion, Forbes had credited him for having added maximum wealth in its last annual rankings in March.

Bajaj fued ends
Mumbai, January 1
The Bajaj Group comprising of Rahul, Shekhar, Madhur and Niraj Bajaj and their families ,today announced “an amicable settlement with the Shishir Bajaj Group (SKB Group) under a family settlement agreement”.

US finalises $4 b loan for GM
An empty car lot once filled with General Motors automobiles, in Daly City, California on Wednesday after the dealership closed for business. In December as lawmakers and the White House closed in on a deal to extend aid to U.S. automakers, concerns about the survival of the companies and their brands were compounding problems for their cash-strapped dealers. Washington, January 1
The US Treasury said it had finalised a $4-billion emergency loan for troubled General Motors, the biggest US automaker. The department “today finalised the loan transaction for GM and funded the first tranche of $4 billion,” said a Treasury spokesperson.

An empty car lot once filled with General Motors automobiles, in Daly City, California on Wednesday after the dealership closed for business. In December as lawmakers and the White House closed in on a deal to extend aid to U.S. automakers, concerns about the survival of the companies and their brands were compounding problems for their cash-strapped dealers. — Reuters

Auto Scene
Maruti sales fall 10 pc in Dec
New Delhi, January 1
Maruti Suzuki India Ltd on Thursday said its sales had declined by 10 per cent at 56,293 units, including exports during December last year, against 62,515 units in the corresponding period a year ago. The company, however, has seen a 3.6 per cent growth in its exports at 4,264 units in December 2008, against 4,114 units during the same period last year, it said.

Citi’s Pandit to forego 2008 bonus
New York, January 1
Citigroup Inc’s chairman Win Bischoff and chief executive Vikram Pandit won’t receive bonuses for 2008 as part of a series of moves the company announced yesterday as it formalised its bailout agreement with the US government, a media report said today.







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Welcome 2009
Inflation slides to 6.38%
Tribune News Service & PTI

New Delhi, January 1
The New Year began on a cheerful note with the inflation further sliding to a 10-month low of 6.38 per cent raising hopes of the RBI further reducing key policy rates to give another booster to industry, reeling under the slowdown.

Falling prices of food and fuel items pulled down the rate by 0.23 percentage points during the week ended December 20, declining, for the eighth week in a row, from the earlier level of 6.61 per cent.

Besides, the inflation data also capture the impact of reduction in excise duty, announced on December 7, and the cascading effect of cuts in prices of diesel and petrol by the government in the first week of last month.

The slide is due to a fall in prices of food and fuel items pulled down, which has fallen by 0.23 percentage points during the week ended December 20.

The impact of excise duties can also be seen and the cut in prices of petrol and diesel is showing its impact on inflationary pressure.

Economists say the RBI might cut policy rates of CRR, SLR to give a boost to the dipping industrial growth and also to export sector that has been hard hit.

During the week, prices of tea, fruit and vegetables, spices, pulses, salt and imported edible oil declined.

The index of fuel items came down by 0.5 percentage points on account of a decline in prices of jet fuel (ATF) by 13 per cent, bitumen by 7 per cent, light diesel oil by 6 per cent and furnace oil by 3 per cent.

Declining fuel and commodity prices, along with sliding inflation, will induce the RBI to further cut key policy rates. RBI Governor D Subbarao earlier in the week met Prime Minister Manmohan Singh to discuss the issues concerning the economic slowdown.

Sensex off to a rocking start

Mumbai: The markets ushered in the New Year with a broad-based rally cutting across sectors as investors bet on rate cuts by the RBI and a stimulus package by the Centre.

The benchmark Sensex gained 256 points or 2.66 per cent to close at 9,903 while in the broader markets the Nifty was up 74 points to close at 3,033 points.

Among the major gainers today included scrips in the realty, metal and capital goods sectors. Among the realty scrips, Indiabulls Real Estate was up 18 per cent while Unitech gained 9.61 per cent. Among metal scrips NMDC was up 16 per cent while Sesa Goa closed 8.5 per cent higher. 

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Spectrum Issue
FinMin for 100 pc hike in reserve price

New Delhi, January 1
In a development that could delay start of next generation 3G mobile telephony, the Finance Ministry today asked the Department of Telecom (DoT) to double the reserve price for pan-India 3G spectrum to Rs 4,040 crore.

In a note sent to Telecom Secretary Siddartha Behura, the Ministry of Finance said: “The reserve price may be increased from Rs 2,020 crore to Rs 4,040 crore for a pan-India allocation of two blocks of five MHz of 3G spectrum.”

The ministry has asked the DoT to modify the note incorporating revised prices before bringing it to the Cabinet Committee on Economic Affairs. DoT officials, however, expressed concern saying any change in the norms with regard to reserve price of 3G spectrum may require TRAI's nod.

Similarly, the Finance Ministry has also asked to double the reserve price for wireless broadband services, known as WiMAX, to Rs 2,000 crore for pan-India allocation. The DoT had recommended Rs 1,000 crore for the same.

Early this week, the DoT had issued revised schedule for auctioning the 3G spectrum and as most of the domestic players were getting ready to participate in the bidding process. The Finance Ministry's intervention could delay the process. Sources said the ministry has also questioned the rationale of limiting the auction of only four slots of spectrum in each circle.

The DoT had recommended that maximum of four slots or less would be allocated in each circle depending on the availability of 3G spectrum.

Officials said a final decision on 3G spectrum issues would be taken by CCEA. Other than reserve price, the Finance Ministry has kept rest of the eligibility parameters unchanged. — PTI

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Export woes worse
November growth negative
Tribune News Service & PTI

New Delhi, January 1
The turmoil in the West is once again bearing on the exports from India as can be seen in the official figures. India’s exports fell by 9.9 per cent in November 2008 under the impact of declining consumer demand in the US and other major global markets, with negative growth for the second month running and widening monthly trade deficit by over $10 billion.

Official figures released today showed that exports had dropped to $11.5 billion in November this fiscal, from $12.7 billion a year ago, while imports grew by 6.1 per cent to $21.5 billion.

However, exports expanded by 12 per cent in rupee terms with the increase in exporters’ realisations due to about 20 per cent decline in the value of the Indian currency against dollar in the last few months.

Export contracted by 12.1 per cent in October showing negative trend for the first time in the last five years.

Between April-November the exports grew by only 19.4 per cent to $119.30 billion.

During the same period imports rose by 33 per cent to $203.64 billion. The trade deficit for the period has mounted to $84.34 billion from $53.19 billion. Oil continued to be the largest import item during November Oil imports during April- November 2008 were valued at $74,114 million which was 55.7 per cent higher than the oil imports of $47,597 million in the corresponding period last year.

With the US and several European countries slipping into full-blown recession, Indian exporters have run into difficult times, especially since October.

“Manufacturing sectors like leather, textile, gems and jewellery have been hit hard because of demand slump in the US and Europe,” president of the Federation of Indian Export Organisations A Sakthivel said.

He said export growth was likely to remain in the negative territory for the next few months.

“Exporters have tough time ahead unless situation improves in the US and Europe,” said Rakesh Mohan Joshi of the Indian Institute of Foreign Trade.

Joshi said to help Indian exporters the government would have to take strategic and long-term approach.

Total imports during April-November 2008-09 were at $203.64 billion against $153.10 billion in the same period last fiscal.

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India Inc’s pains to multiply: Kamath

New Delhi, January 1
Corporate India is in for a more painful period as profitability will take a hit over the next six months, ICICI Bank CEO KV Kamath today warned and asked the industry to be patient for opportunities as the economy will start recovering in the second half of 2009.

“There is pain for another two quarters but I see an environment full of opportunity thereafter,” Kamath, who is all president of Confederation of Indian Industry, said.

“The most painful things for corporate India in the next few months would be to take profit impact due to loss of inventory valuation,” he said and explained that this was a fallout of the commodities, steel, and oil prices more than halving in a matter of weeks when economic meltdown set in.

The warning coincides with a 22 per cent dip in advance tax in December and announcement of October-December quarter financial results this month.

The second major issue for the corporate world would be management of long-term finance in the face of a sliding interest rate regime that has started now, with inflation dropping sharply in the last few weeks, he said.

In this context, Kamath offered a word caution to the industry on the global acquisition front.

Asked if India Inc should forget global takeovers, particularly in the backdrop of reported funding problems faced by corporate giant like Tata on Corus and Jaguar and Land Rover, Kamath said: “I think India Inc should use the time to basically to do detailing and other work on project they are looking at.” — PTI

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Anil Ambani tops ‘billionaire blowups’ list

New York, January 1
Industrialist Anil Ambani continues to be on the focus of US magazine Forbes but this time around for topping the list of 'Billionaire Blowups of 2008' by virtue of turning the biggest loser of wealth in less than a year of being touted as the biggest gainer in the world.

Besides ranking him as the sixth richest person in the world with a net worth of $42 billion, Forbes had credited him for having added maximum wealth in its last annual rankings in March.

Since then, his net worth has declined to $12 billion, the magazine said in a news report titled ‘Billionaire Blowups of 2008’.

“The biggest loser of all was Anil Ambani. Touted on the cover of our 2008 billionaires issue for having added $24 billion to his fortune in one year, Ambani has dropped $30 billion since then,” the report said.

It further added that three of “his fellow countrymen -estranged brother Mukesh, steel tycoon Lakshmi Mittal and KP Singh of DLF, all of whom ranked earlier among the world’s 10 richest - lost more than $20 billion apiece.”

Noting that 2008 was “a dreadful year for the world’s wealthiest as markets and currencies around the world tumbled,” Forbes said over 300 of the 1,125 billionaires have lost at least $1 billion since March.

While several dozen have lost more than $5 billion, the 10 richest from annual 2008 rankings have lost about $150 billion.

“Stock of his telecom company dropped after his estranged brother helped scuttle a deal with African telecom MTN.” Forbes, however, noted that with $12 billion worth of fortune, Anil Ambani “remains quite wealthy... That is something many others can’t claim”.

The list of 10 billionaire blowups includes two more Indians - wind power major Suzlon’s chief Tulsi Tanti and online gambling firm PartyGaming’s founder Anurag Dikshit. — PTI 

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Bajaj fued ends

Mumbai, January 1
The Bajaj Group comprising of Rahul, Shekhar, Madhur and Niraj Bajaj and their families ,today announced “an amicable settlement with the Shishir Bajaj Group (SKB Group) under a family settlement agreement”.

A press note issued by Rahul Bajaj faction said the petition filed by SKB Group with the Company Law Board was dismissed as withdrawn on December 31, 2008.

“With this, all disputes between both sides stand resolved,” the press note said.

The Bajaj Group shareholding in Bajaj Hindustan Ltd and Bajaj Consumer Care is now with the SKB Group.

The Promoter shareholding of all other companies in the Bajaj Group, including that held by the SKB Group, is now with the four brothers of the Bajaj Group.

This includes companies like Bajaj Auto Ltd, Bajaj Electricals Ltd, Mukand Ltd, Bajaj FinServ Ltd, Bajaj Holding & Investments Ltd, Hercules Hoist Ltd etc, the press note said. — PTI

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US finalises $4 b loan for GM

Washington, January 1
The US Treasury said it had finalised a $4-billion emergency loan for troubled General Motors, the biggest US automaker. The department “today finalised the loan transaction for GM and funded the first tranche of $4 billion,” said a Treasury spokesperson.

The loan is part of a $13.4-billion rescue package the US government approved this month for GM and Chrysler to stave off collapse amid tight credit and dismal sales.

The first segment of the bailout, set to be funded before year's end, was to provide $4 billion each to GM and to Chrysler, the smallest of the Big Three US automakers.

GM was to receive an additional $5.4 billion in mid-January and would be eligible for a further $4 billion from February pending congressional action. Treasury has also provided $6 billion in aid to GMAC, GM’s financial arm.

Under the agreement, the automakers will have to prove their viability by March 31 or the government could require the funds to be repaid within 30 days.

The spokesperson said the agency was “working expeditiously with Chrysler to finalise that transaction and we remain committed to closing it on a timeline that will meet near-term funding needs.” Chrysler is hoping to obtain its $4 billion from the package as soon as possible.

“We recognise the magnitude of the effort by the Treasury Department to complete these multiple financial arrangements quickly and sequentially,” Chrysler said in a statement. — AFP

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Auto Scene
Maruti sales fall 10 pc in Dec

New Delhi, January 1
Maruti Suzuki India Ltd on Thursday said its sales had declined by 10 per cent at 56,293 units, including exports during December last year, against 62,515 units in the corresponding period a year ago. The company, however, has seen a 3.6 per cent growth in its exports at 4,264 units in December 2008, against 4,114 units during the same period last year, it said.

Bajaj Auto

Bajaj Auto on Thursday announced a 33 per cent decline in its sales of two wheelers at 1119,215 with the three-wheelers contributing a marginal three per cent increase at 222,948 units. Bajaj Auto managing director Rajiv Bajaj said the sharp reduction in two-wheeler primary sales reflected the continuing effort to reduce dealer inventories.

Yamaha sales up

Yamaha has reported a nearly three-fold increase in its domestic sales during December at 16,000 units compared with 5,524 units in the same month in 2007. The company witnessed a growth of 13.32 per cent in 2008 at 1,36,468 units as against 1,20,428 units in the previous year.

Hero Honda

Hero Honda has reported a 10.23 per cent decline in its total sales in December at 2,15,931 units compared to 2,40,532 units in the same month in 2007. The company’s sales, however, grew by 9.04 per cent to 36,08,220 units in the calendar year 2008 against 33,09,051 units in the year 2007, it said.— Agencies

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Citi’s Pandit to forego 2008 bonus

New York, January 1
Citigroup Inc’s chairman Win Bischoff and chief executive Vikram Pandit won’t receive bonuses for 2008 as part of a series of moves the company announced yesterday as it formalised its bailout agreement with the US government, a media report said today.

Quoting a memo to employees by Pandit, the leading financial daily Wall Street Journal said senior counsellor Robert Rubin was also foregoing the annual bonus and bonuses for other top executives would be “reduced substantially”.

Citigroup, which has now received $45 billion in federal capital infusions and a government-financed arrangement to insulate it from hundreds of billions of dollars in potential losses, was widely expected to substantially curtail its compensation costs, the Journal said.

Other financial institutions that are receiving taxpayer funds previously have announced that their top executives will forego bonuses for 2008, a year in which Citigroup and other banking companies were battered by losses, it noted.

Terms of the latest capital infusion require Citigroup to award at least 60 per cent of any 2008 bonuses to top executives in the form of deferred stock or cash.

In his memo to employees, the paper quoted Pandit as saying the relatively small 2008 bonus pool reflects the challenging times facing Citigroup, but he struck an optimistic note about 2009.

It is unclear, the paper said, how exactly the lobbying restrictions would work, but any move to curtail the company's government ties could come at a bad time for Citigroup. — PTI

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BRIEFLY

Rupee at 48.76
MUMBAI:
The rupee on Thursday depreciated for the third straight session, down by another seven paise at 48.76/78 against the dollar, chiefly due to no signals from the US and EU due to the New Year holidays there, despite a smart rally in local equity markets. — PTI

L&T Power
MUMBAI
: Ravi Uppal has joined the top management of Larsen and Toubro as managing director and CEO of L&T Power. He was earlier global market head of ABB. Uppal was also a member of the group executive committee of the ABB Group. — UNI

Godrej buys back equities
MUMBAI
: Godrej Consumer Products on Thursday said it had bought back 23.83 lakh shares for Rs 3.11 crore under its buy back offer. In a filing to the NSE, the company said it had bought back shares worth Rs 3.11 crore, representing 20.89 per cent of the Rs 14.9 crore offer. — PTI

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