SPECIAL COVERAGE
CHANDIGARH

LUDHIANA

DELHI



THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
B U S I N E S S

RBI infuses 20k crore 
Mumbai, January 2
The Reserve Bank (RBI) today announced a further easing of money supply with the reduction of key rates and ratio which it said would release Rs 20,000 crore into the banking system.

Banks on firm footing, says Chidambaram
Guwahati, January 2
Union Home Minister P Chidambaram today said the banking system in the country was on a firm footing and would survive the global recession.

Montek confident of 7 pc growth
New Delhi, January 2
Warning that the global economic crisis would continue through this year, Planning Commission deputy chairman Montek Singh Ahluwalia said India would still manage 7 per cent growth in FY'09 which should be a "good performance”.



EARLIER STORIES



MS may cut 15,000 jobs this month: Report
London, January 2
World's top software firm Microsoft is planning a massive reduction in its workforce where up to 15,000 jobs may be axed this month, says a media report.

A boat navigates past the Marina Bay Sands casino resort near the central business district in Singapore on Friday. Singapore has revised downward its 2009 economic forecast and said gross domestic product was expected to shrink 1-2 per cent this year.
A boat navigates past the Marina Bay Sands casino resort near the central business district in Singapore on Friday. Singapore has revised downward its 2009 economic forecast and said gross domestic product was expected to shrink 1-2 per cent this year. — Reuters

Auto Scene
Tata Motors’ Dec sales dip 47 pc
New Delhi, January 2
Automaker Tata Motors has reported a 47.11 per cent decline in its total sales during December last year at 25,219 units, as compared to 47,678 units the same month in 2007.

International call termination charge: BSNL seeks review 
New Delhi, January 2
At a time when country’s telecom regulator Telecom Regulatory Authority of India (TRAI) has started the process for review of termination charges for the telecom operators within the country, BSNL is also seeking a review of the similar charges paid by the foreign telecom operators over the calls terminating in India.

‘Imitrex delay may cost Ranbaxy dear’
New Delhi, January 2
Drug major Ranbaxy Laboratories could suffer a potential revenue loss to the tune of Rs 300 crore due to delay in receiving approval from the US Food and Drug Administration (FDA) for generic version of GSK's anti-migraine medicine Imitrex, according to analysts.

BoA on top
New York, January 2
The world has got its new number one bank with the Bank of America (BoA) completing its acquisition of Merrill Lynch, which has pushed the size of its client assets to more than $2 trillion.







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RBI infuses 20k crore 
Shiv Kumar
Tribune News Service

Mumbai, January 2
The Reserve Bank (RBI) today announced a further easing of money supply with the reduction of key rates and ratio which it said would release Rs 20,000 crore into the banking system.

While the cash reserve ratio - the amount of cash that banks need to keep in reserve - has been cut by 0.5 per cent to 5 per cent, repo and reverse repo rates - the short-term rates at which the RBI lends and borrows from banks - have been cut by 100 basis points each to 5.5 per cent and 4 per cent, respectively.

The RBI said the cuts in repo and reverse repo would come into immediate effect, while the cut in CRR would be effective from the fortnight beginning January 17. “It is expected that the reduction in the policy interest rates and the CRR will further enable banks to provide credit for productive purposes at appropriate interest rates,” it said.

Explaining its rationale for rate reduction, the apex bank said it has been reducing rates from mid-September 2008 when the repo rate under the liquidity adjustment facility (LAF) was cut from 9 per cent to 6.5 per cent, the reverse repo rate from 6 per cent to 5 per cent and the cash reserve ratio was cut from 9 per cent to 5.5 per cent.

“Reflecting these (international) developments, the Reserve Bank has adjusted its policy stance from demand management to arresting the moderation in growth. In particular, the aim of these measures was to augment domestic and forex liquidity and to ensure that credit continues to flow to productive sectors of the economy,” the RBI said in its statement.

“The cumulative amount of primary liquidity made available to the financial system through various measures initiated by the Reserve Bank is over Rs. 3,00,000 crore. This sizeable easing has ensured a comfortable liquidity position starting mid-November as evidenced by a number of indicators,” the bank said.

It noted that the since November 18, 2008, the LAF window has largely been in the surplus mode. “The overnight money market rate has consistently remained within the LAF corridor since November 3, 2008. The yield on the 10-year benchmark G-Sec has declined from 8.66 per cent on September 29, 2008, to 5.31 per cent on January 1, 2009. Taking the signal from the reductions in the repo and reverse repo rates, all public sector banks and several private sector and foreign banks have reduced their benchmark prime lending rates (BPLRs). Notably, the top five public sector banks have reduced their BPLRs from a range of 13.75-14 per cent as on October 1, 2008, to a range of 12-12.5 per cent presently,” the RBI said.

While noting the reduction of inflation based on the wholesale price index, the apex bank said it was concerned that the consumer price inflation ranging between 10.38-11.11 per cent as of October-November 2008 was yet to show moderation.

The apex bank also noted that there were signs of economic activity slowing down. Exports, it said, registered a negative growth in October-November 2008 while the index of industrial production (IIP) was down by 0.4 per cent during October 2008 and the manufacturing sector, too, registered a negative growth of 1.2 per cent for the first time since April 1994, the RBI said. It noted that IIP growth during April-October 2008 at 4.1 per cent was less than half of 9.9 per cent during the corresponding period of the previous year.

The RBI also noted that the services sector that drove growth during the past several years, too, has begun to slow down.

Even while cutting rates, the RBI has expressed concerns of growing credit risk for banks due to deteriorating economic conditions. “The Reserve Bank continues to urge banks to monitor their loan portfolio and take early action, including debt restructuring where warranted, to prevent the rise of bad assets down the road and safeguard the gains of the last several years in improving asset quality,” it said.

Simultaneously, the RBI said the banks should price risk appropriately and ensure that quality enterprises continue to get funding. “The Reserve Bank appreciates that risk management is difficult even in normal circumstances. It is even more difficult in an environment of uncertainty and downturn,” the RBI said.

Mixed reaction to Dose II
Bhagyashree Pande
Tribune News Service

New Delhi, January 2
The stimulus package announced by the government is not bold enough to spur demand in the economy and rejuvenate business activity by creating an environment conducive to growth, Satish Bagrodia, president, PHD Chambers of Commerce, said.

The government could have done much more to boost sagging growth and restore business confidence. The allocation of Rs 30,000 crore for infrastructure is insufficient given the urgency to ensure that money flows into sectors such as roads, airports, power plants and ports. It would boost demand and have a multiplier effect on the economy.

Industry was also looking for a reduction in the total tax burden to induce demand and a further reduction in CRR to 4.5 per cent. Concessions to exporters by way of timely export credit and increase in duty drawback rates across the board would have gone a long way to tide over the current uncertain situation especially as inflation is down to single digits and crude prices have fallen to below $50 per barrel, Bagrodia added.

According to CII, the move will not only make more credit available in the system but will also help in bringing down the cost of credit. This will provide much needed relief to sectors under stress whose demand is affected due to high interest rates and high cost of borrowing for their operations, Chandrajit Banerjee, director general, CII, said.

The additional plan expenditure upto Rs 20,000 crore directed towards critical rural, infrastructure and social security schemes is a welcome move and would help generate employment especially for unskilled and semi-skilled workforce which would have otherwise been affected by the slow down.

According to Assocham secretary general DS Rawat, an across the board cut of 4 per cent in ad-valorem cenvat rate as well as removal of ceiling of ECB and extension of DEPB scheme are welcome measures. However, it falls short of the industry chamber’s expectations as it had anticipated the size of package running into Rs 1 lakh crore as against Rs 20,000 crore to support infrastructure and social security schemes.

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Banks on firm footing, says Chidambaram
Bijay Sankar Bora
Tribune News Service

Guwahati, January 2
Union Home Minister P Chidambaram today said the banking system in the country was on a firm footing and would survive the global recession.

“No bank in the country has collapsed due to the global recession while some of the big names in the banking sector in the US have perished,” he said, adding that credit from banks was the lifeline to country’s economy.

Inaugurating the 11,111 th branch of State Bank of India (SBI) at Sonapur, on the outskirts of Guwahati, Chidambaram said banks and the government must do to the people what they deserve - development, encourage enterprises and growth of the agriculture sector.

“Bank loans mean development. Every section of the people who deserves should be provided with loans to help uplift them,” he said.

Chidambaram stated that the target for providing agriculture loan in the current year had been set at Rs 2.8 lakh crore compared to last year’s figure of Rs 2.4 lakh crore. “When the UPA government took charge, volume of agriculture loan disbursed was only Rs 84,000 crore,” he said.

The former Union Finance Minister said banks in the country had so far provided Rs 24,000 crore education loan to needy students and no other country in the world could parallel that feat. “We want to make sure that no child in the country is deprived of higher education because of his/her parents’ inability to pay the tuition fee,” he said.

He highlighted the role played by the public sector banks in the country in triggering the largest self-help group revolution on the planet. “Public sector banks in the country have given loans to over 30 lakh SHGs and most of those were manned by women. We have found the women entrepreneurs the nest borrower,” he said.

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Montek confident of 7 pc growth

New Delhi, January 2
Warning that the global economic crisis would continue through this year, Planning Commission deputy chairman Montek Singh Ahluwalia said India would still manage 7 per cent growth in FY'09 which should be a "good performance”.

Announcing the second stimulus package, he said the focus was on public investment, particularly in the infrastructure sector, which according to him should be a big booster. The package, the second in a month albeit last for the fiscal, would take the total revenue loss to about Rs 40,000 crore for the exchequer by way of various concessions and sops given to various sectors of the economy, Finance Secretary Arun Ramanathan said.

“Expansion of infrastructure investments in public-private partnership area is a very important part of the effort to mark the contra-cyclical thrusts at a point when there is a bit of global slowdown,” he said, while commenting on additional facility for IIFCL to issue tax free bonds worth Rs 30,000 crore. It is something that will not only stimulate demand in the short term, but lay the foundation for broader investment revival and for broader growth.

Montek said while the crisis has not seen its end, this year could be a difficult one but expressed the hope that the economy would still achieve 7 per cent growth. — PTI 

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MS may cut 15,000 jobs this month: Report

London, January 2
World's top software firm Microsoft is planning a massive reduction in its workforce where up to 15,000 jobs may be axed this month, says a media report.

“Microsoft is preparing to announce the first wide scale layoffs in its 32-year history, with up to 15,000 jobs at risk, according to some predictions,” The Times said in a report published online.

Speculation about job cuts was triggered by a report by Fudzilla, a technology blog site, which said employees were told that the software group was preparing for major layoffs from its global operations on January 15, it added.

Earlier, a brokerage firm Oppenheimer & Co's analyst Brad Reback had asked Microsoft to cut its workforce by 10 per cent or about 9,100 employees.

“Such layoff exercise” would be a healthy move for the company, Reback added. Microsoft had close to 91,000 employees on its payrolls at end of July-September quarter.

Further, The Times report stated that the news of job losses came amid the company being forced to apologise for an embarrassing hiccup with its Zune digital music player. A bug in the device's internal clock in the original 30-gigabyte version failed to cope with the last day of the leap year and thousands of owners were left with a frozen screen on December 31.

The report quoted Microsoft statement as saying: “The issue should be resolved over the next 24 hours as the time change moves to January 1, 2009. We expect the internal clock on the Zune 30 GB devices will automatically reset.” Besides, Microsoft is scheduled to release its second quarter results for the fiscal year 2008-09 on January 22.

Battling the economic crisis, companies in their bid to save costs, have announced over one lakh job cuts in December in the US. — PTI

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Auto Scene
Tata Motors’ Dec sales dip 47 pc

New Delhi, January 2
Automaker Tata Motors has reported a 47.11 per cent decline in its total sales during December last year at 25,219 units, as compared to 47,678 units the same month in 2007.

The homegrown firm’s total passenger vehicles sales stood at 9,838 units in the domestic market in December last year as against 14,316 units in the same month previous year, a decline of 31.28 per cent.

Indica reported sales of 6,749 units, down 28.9 per cent over December 2007, Tata Motors said. Indigo, however, recorded sales of 1,673 units, up 21 per cent over the same month previous year.

Sumo and Safari accounted for sales of 1,416 units, a decline of 58.8 per cent compared with December 2007.

Honda sales up 9 pc

Honda Siel Cars India has reported a 9.04 per cent rise in its sales at 3,667 units in December as against 3,363 units in the same month in 2007.

The sales comprised 2,972 units of flagship sedan City, 386 units of premium sedan Civic, 171 units of luxury sedan Accord and 132 units of SUV CR-V, the company said.

Hyundai Motors

Hyundai Motor India Ltd has said its domestic sales jumped 19.3 per cent to 15,602 units in December last year compared with 13,078 units a year ago.

The company's cumulative sales (including exports) in December were up by 55.7 per cent to 38,402 units compared with 24,664 units in the same period last year, HMIL said in a statement here.

The company’s exports in the month nearly doubled to 22,800, the same stood at 11,586 units during the same month in 2007. — PTI

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International call termination charge: BSNL seeks review 
Tribune News Service

New Delhi, January 2
At a time when country’s telecom regulator Telecom Regulatory Authority of India (TRAI) has started the process for review of termination charges for the telecom operators within the country, BSNL is also seeking a review of the similar charges paid by the foreign telecom operators over the calls terminating in India.

The government-controlled BSNL, responding to the consultation paper brought out by the TRAI earlier this week, has pointed out that the country’s exchequer has been losing almost Rs 5,000 crore annually as the foreign telecom operators are being allowed to terminate incoming international calls at nominal rates in the country.

TRAI had brought out a consultation paper two days ago in which it had sought views from telecom operators and other stakeholders in the sector about reviewing the terminations charges being paid by the telecom operators. Changes in the market scenario due to increase in customer base, increased number of operators and the resulting competition has forced the TRAI to come out with the papers that could lead to reduction in call charges in the new year.

In its response, BSNL has sought an immediate review of termination charges being paid by the foreign telecom operators so that they can be at par with what the Indian players pay.

This has not only adversely affected the financial viability of telecom service providers in India, but deprived the country of valuable foreign exchange to the tune of Rs 4,000-5,000 crore per annum, it added while pointing out that the review could be used to moderate the termination charges for domestic calls for the benefit of Indian consumers.

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‘Imitrex delay may cost Ranbaxy dear’

New Delhi, January 2
Drug major Ranbaxy Laboratories could suffer a potential revenue loss to the tune of Rs 300 crore due to delay in receiving approval from the US Food and Drug Administration (FDA) for generic version of GSK's anti-migraine medicine Imitrex, according to analysts.

“Ranbaxy is likely to suffer a potential revenue loss of up to Rs 300 crore as it has not been able to meet the deadline of the fourth quarter for launching Imitrex in the US market,” Angel Broking Pharma Anal Sarvajeet Kaur said.

Ranbaxy in January last year had said it expected to launch in December 2008 the 25 mg, 50 mg and 100 mg strengths of generic Imitrex in the US with an exclusivity period of 180 days after settling a patent litigation with GlaxoSmithKline (GSK).

However, it has not been able to launch the drug due to delay in getting approval from the USFDA. Industry estimates put Imitrex total annual sales at around $1 billion. — PTI 

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BoA on top

New York, January 2
The world has got its new number one bank with the Bank of America (BoA) completing its acquisition of Merrill Lynch, which has pushed the size of its client assets to more than $2 trillion.

“Bank of America will have the largest wealth management business in the world with approximately 20,000 financial advisors and more than $2-trillion in client assets,” BoA said in a statement after it completed the merger of Merrill Lynch with itself yesterday.

The company is serving to more than 59 million customers and it has more than 18,000 ATMs and online banking with more than 25 million active users. Yesterday, Bank of America had completed its $19.4-billion all-stock purchase of Merrill Lynch. — PTI 

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BRIEFLY

Kingfisher slashes air fares
BANGALORE
:
Kingfisher Airlines has slashed air fares between 21 per cent and 65 per cent on various routes across its network with effect from Thursday. The airline will also offer significant discounts to its traditional corporate customer base, it said. Its frequent flier programme, King Club, will now offer incentives and rewards, including free overseas travel on its newly launched international routes. — PTI

Suzlon plans
MUMBAI:
Suzlon Energy on Friday said it had agreed to sell a 10 per cent stake in its Belgium arm Hansen to a London-based investment firm for an undisclosed amount. The company's Netherlands-based wholly-owned subsidiary AE-Rotor Holding has sold 6.7 crore shares representing 10 per cent in Hansen Transmissions International NV to Ecofin, Suzlon said. However, the financial details of the transaction were 
not disclosed. — PTI

PNB Housing
NEW DELHI:
PNB Housing Finance Ltd, a wholly-owned subsidiary of Punjab National Bank, on Friday said it had reduced interest rates on home loan by up to 1.75 per cent. The rates on loans up to Rs 20 lakh have been reduced by 1.50 per cent to 1.75 per cent with effect from Thursday, the company said. The interest rates on deposits have also been reduced, the statement said. — UNI

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