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B U S I N E S S

Five lakh jobs lost in 3 months: Study
New Delhi, February 4
Five lakh people were rendered jobless between October to December 2008 due to the recession, according to the latest government study. The findings are part of a first-of- its-kind survey conducted by the Labour Bureau of Ministry of Labour and Employment as part of a study on the effect of economic slowdown on employment in India.

SEBI begins interrogation of Raju brothers
Hyderabad, February 4
The probe into the accounting fraud in Satyam Computers reached a crucial stage today with market regulator SEBI finally getting an opportunity to question the disgraced former chairman B Ramalinga Raju, his brother and former managing director Rama Raju and former CFO V Srinivas.

Satyam an isolated case: Nasscom
New Delhi, February 4
IT industry body Nasscom today said the case of fraud in Satyam Computer Services by its founder was an isolated case and not reflective of the IT industry on the whole, which, it said remains robust on values and parameters.



EARLIER STORIES



Actor Shah Rukh Khan displays a Tag Heuer watch at a showroom in New Delhi
Actor Shah Rukh Khan displays a Tag Heuer watch at a showroom in New Delhi on Wednesday. Tribune photo: Mukesh Aggarwal

A Panasonic showroom staff member poses with flat-screen TVs at Panasonic Corp's showroom in Tokyo
A Panasonic showroom staff member poses with flat-screen TVs at Panasonic Corp's showroom in Tokyo on Wednesday. Panasonic said it would launch in April in Japan plasma TVs that are a quarter of the thickness and consume half as much electricity as conventional models, in a bid to stir up demand amid a spreading recession. — Reuters

IT/BPO sector to grow by 16%: Nasscom
New Delhi, February 4
At a time when Indian software sector is in the eye of a storm due to the Satyam fraud, top body for the industry has said that there could be a as much as a 16 per cent growth in this service sector with revenues touching $60 billion despite the global slowdown.

SEZ rules amended; more benefits for developers
New Delhi, February 4
The government yesterday amended rules making it easier for suppliers of goods to Special Economic Zones to claim export incentives, but asked the developers to provide housing to staff and workers within the tax-free enclaves.

Morgan Stanley to cut 1,800 jobs
London, February 4
Investment bank Morgan Stanley is all set to prune its workforce by 1,800 employees, or about four per cent of its global manpower, in the wake of economic turmoil. "Morgan Stanley is preparing to cut up to 1,800 jobs, or about 4 per cent of its global workforce, as the financial crisis continues to take its toll on Wall Street," the Financial Times said.

Nath for extension of tax sops to EoUs
New Delhi, February 4
Commerce and Industry Minister Kamal Nath yesterday said his ministry was in discussion with the Finance Ministry for extension of tax concessions to export-oriented units (EOUs) for another three years.

LIC Housing Fin cuts home loan rates
Mumbai, February 4
LIC Housing Finance (LHFL) today said it has slashed interest rates on home loans by up to one per cent with effect from February 1. With this, the floating rate for loans up to Rs 30 lakh will now be 8.75 per cent as against 9.75 per cent earlier.





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Five lakh jobs lost in 3 months: Study

New Delhi, February 4
Five lakh people were rendered jobless between October to December 2008 due to the recession, according to the latest government study.

The findings are part of a first-of- its-kind survey conducted by the Labour Bureau of Ministry of Labour and Employment as part of a study on the effect of economic slowdown on employment in India.

A sample size of 2,581 units covering 20 centres across 11 states was taken up for the survey. Eight major sectors like textile and garment industry, metals and metal products, information technology and BPO, automobiles, gems & jewellery, transportation, construction and mining industries were also included in the survey.

The total employment in all these sectors had come down from 16.2 million in September 2008 to 15.7 million by December 2008.

Exporting units had observed a higher decline in employment with gems & jewellery sector shedding 8.43 per cent of its work force. This is followed by metals and textile sector which laid off 2.6 per cent and 1.29 per cent of their work force, respectively.

Among the domestic sector units, gems & jewellery sector again witnessed the maximum decline in employment with 11.9 per cent of their work force losing jobs.

This was followed by automobiles and transport sectors who shed 4.79 per cent and 4.03 per cent of their work force.

The study also found that the overall decline in contract workers was observed to be 3.88 per cent during the period in comparison to only 0.63 per cent decline for direct employees.

Contradicting popular belief that the IT and BPO sector during the same period had seen retrenchment the sector had infact increased its employment marginally by 0.33 per cent.

The government, which has so far said that the economic slowdown would have very little impact on the economy other than on parts of the financial system linked to the United States, now agrees with findings of international studies which suggested that developing economies will be impacted by the recession.

"The global slowdown has its implications on the domestic economy...Ministry of Labour and Employment also took a serious note of the economic slowdown and it felt the need to have an assessment of its impact on employment to enable the government to take preventive and ameliorative measures to arrest the decelerating employment in the country," Ministry of Labour and Employment Secretary Sudha Pilla said.

All eight industry sectors had experienced an average decline in earnings by 3.45 per cent during October to December 2008. Overall capacity utilization had reduced by 1.32 per cent per month during the period, with automobile sector witnessing a monthly decline of 7.05 per cent. — PTI

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SEBI begins interrogation of Raju brothers
Suresh Dharur
Tribune News Service

Hyderabad, February 4
The probe into the accounting fraud in Satyam Computers reached a crucial stage today with market regulator SEBI finally getting an opportunity to question the disgraced former chairman B Ramalinga Raju, his brother and former managing director Rama Raju and former CFO V Srinivas.

Armed with a Supreme Court order, a three-member team of officials from SEBI went to Chanchalguda Central Jail here and began interrogating the trio to get to the bottom of the biggest fraud in India’s corporate history.

The SEBI team, led by general manager Sunil Kumar, entered the jail premises at 10 am and was closeted with the prison authorities to discuss the modalities of the three-day interrogation.

The probe by the market regulator will focus on the alleged insider trading by Satyam promoters, diversion of the IT company’s funds to the firms owned by Raju’s family members.

This is the first time since the arrest of Raju brothers on January 9 that SEBI has got access to them.

The stock market watchdog had served summons on the Raju brothers to appear before the SEBI team on January 9, a day after Raju made a disgraceful exit after confessing to the Rs 7,100-crore accounting fraud.

However, Raju brothers surrendered before Andhra Pradesh Director General of Police S S P Yadav on January 9 and were later remanded to judicial custody.

The SEBI then approached a local court, seeking permission to record their statements but the magistrate dismissed the petition on January 23. Later, it challenged the order in the state high court last week.

Appearing for SEBI, Solicitor General of India Goolam E. Vahanvati had prayed for an ex-parte interim order to question the accused but the high court refused to pass such an order without hearing the accused.

The high court had issued notices of admission to the Rajus and posted the matter for hearing on February 9.

In the meantime, SEBI approached the apex court which gave its nod for the three-day questioning.

SEBI officials have already quizzed Satyam's auditors and financial officers and reviewed details of Satyam's bank deposits.

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Satyam an isolated case: Nasscom
Tribune News Service

New Delhi, February 4
IT industry body Nasscom today said the case of fraud in Satyam Computer Services by its founder was an isolated case and not reflective of the IT industry on the whole, which, it said remains robust on values and parameters.

Nasscom president Som Mittal said here, "The board of Satyam is doing a great job. It's a one-off case. Let us move on from what has happened in Satyam". He added that the intrinsic value of the company should be followed.

This is the second time since the Satyam fraud broke out that the software industry spearhead has come out saying that the industry on the whole would not get affected.

Earlier, Nasscom chairman Ganesh Natarajan had said: "We believe the entire IT sector will not be impacted much as we consider this as a specific case of a particular firm."

However, Nasscom had said it would work with the Satyam Task Force to reach out to their customers and employees and guide them through the transition, besides extending all kind of help to the scam-tainted software major.

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IT/BPO sector to grow by 16%: Nasscom
Tribune News Service

New Delhi, February 4
At a time when Indian software sector is in the eye of a storm due to the Satyam fraud, top body for the industry has said that there could be a as much as a 16 per cent growth in this service sector with revenues touching $60 billion despite the global slowdown.

Industry body Nasscom, in a report today, said together with the business process outsourcing (BPO) sector, the revenues are expected to cross $71.7 billion, reflecting a growth of almost 17 per cent.

It said of the above, the export of software and services would account for $47 billion, which would mean a growth of almost 16 per cent. It was of the view that the domestic BPO industry could grow as much as 40 per cent in this fiscal.

There was also a projection of the industry continuing to hire with as many as 2.23 million new direct jobs being created and another estimated eight million indirect jobs being created.

Releasing the report, Ganesh Natarajan, chairman of Nasscom and global chief executive of Zensar Technologies, said, "The current financial year has been challenging for economies across the globe. But the Indian IT-BPO industry has exhibited a balanced growth".

There was further good news for the industry as Nasscom said that it expected the software and BPO industry to grow 15 per cent annually till 2010-11 and that export revenues from it could alone touch $60-62 billion.

Som Mittal, who is the president of the association, said, "Due to our strong fundamentals and as a derivative of the value we add to our global customers, the Indian industry will continue to grow in spite of global slowdown".

According to the report, the industry could account for 5.8 per cent of the country's gross domestic product and IT services exports could grow by 16.5 per cent to $26.9 billion.

It added that while the US market remains the dominant one, exports to Europe have logged the highest growth.

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SEZ rules amended; more benefits for developers

New Delhi, February 4
The government yesterday amended rules making it easier for suppliers of goods to Special Economic Zones to claim export incentives, but asked the developers to provide housing to staff and workers within the tax-free enclaves.

The tax benefits and other concessions to the developers and contractors have been extended to the sub-contractors as well, according to the rules notified by the Commerce Ministry.

"The developer or co-developer shall strive to provide adequate housing facilities not only for the management and office staff but also for the workers of the Special Economic Zones," the notification said.

For giving a boost to the SEZs, the suppliers of goods from the 'domestic tariff area' to the units in the zones will be allowed export incentives like duty drawbacks in the domestic currency. Earlier, this facility was denied since the domestic suppliers could not have foreign currency accounts.

The gems and jewellery units in the SEZs would be allowed to re-import the goods exported if their buyers default on payments. In the face of global downturn, instances of payment default by buyers have come to notice of the government.

"Changes in the SEZ rules are a good development, but we would like other decisions of the empowered Group of Ministers to be notified," Director General of the Export Promotion Council for SEZs and export-oriented units L B Singhal said.

The council has been demanding infrastructure status by the Reserve Bank to the SEZs, extension of tax benefits to the groups having units in the zones and refund of service tax to supplies to the tax free enclaves.

Exports from SEZs, which have attracted investment of over Rs 90,000 crore in the last three years, have crossed $12 billion. — PTI

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Morgan Stanley to cut 1,800 jobs

London, February 4
Investment bank Morgan Stanley is all set to prune its workforce by 1,800 employees, or about four per cent of its global manpower, in the wake of economic turmoil.

"Morgan Stanley is preparing to cut up to 1,800 jobs, or about 4 per cent of its global workforce, as the financial crisis continues to take its toll on Wall Street," the Financial Times said.

Quoting people close to the situation the report said, "the fresh round of job cuts was part of Morgan Stanley's efforts to reduce its staff to reflect sharply lower activity in areas ranging from capital markets to mergers and acquisitions." The daily attributing to people close to the situation noted that the redundancies would be spread across Morgan Stanley's range of businesses and regions, but would not affect its wealth management unit. — PTI

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Nath for extension of tax sops to EoUs

New Delhi, February 4
Commerce and Industry Minister Kamal Nath yesterday said his ministry was in discussion with the Finance Ministry for extension of tax concessions to export-oriented units (EOUs) for another three years.

"In respect of EOU scheme, we have extended the sunset clause by one year and now the income tax exemption under Section 10B of the Income Tax Act is available up to March 2010. We have taken up this issue further for extending the sunset clause by another three years," Nath said at EPCES Export Awards function here.

As part of rationalisation and simplification measures, the Finance Ministry had inserted a sunset clause for SEZ units, which stipulates that no deduction of export profits would be allowed to any undertaking which began manufacturing articles or computer software after March 31, 2009 in an SEZ.

As of now, such undertakings are allowed 100 per cent income tax exemption for a period of 10 years, 100 per cent tax holiday for the first five years, 50 per cent for the next two years and 50 per cent of the profit ploughed back in the capital investment for the next 10 years. — PTI

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LIC Housing Fin cuts home loan rates

Mumbai, February 4
LIC Housing Finance (LHFL) today said it has slashed interest rates on home loans by up to one per cent with effect from February 1.

With this, the floating rate for loans up to Rs 30 lakh will now be 8.75 per cent as against 9.75 per cent earlier.

For loans above Rs 30 lakh, the new rate will be in the range of 9.5-9.75 per cent as against 11.25 per cent earlier, LIC Housing Finance's chief executive, R R Nair said.

The lender expects a loan growth of 15-18 per cent in this quarter while for the full fiscal, the growth is expected to be in the range of 26-30 per cent, Nair said.

The company has also plans to significantly reduce its non-performing assets in the period ahead. It has targeted a net NPA level of 0.5 per cent by end-March while the gross NPAs are likely to decline to 1.5 per cent. — PTI

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BRIEFLY

Cairn to invest $3.8 b in Rajasthan
Barmer:
Cairn India will invest $3.8 billion in three blocks out of its 25 discoveries in Rajasthan, more than double the previously approved cost of $1.5 billion. The development cost of the Mangala, Bhagyam and Aishwariya fields is proposed at $2.9 billion, against previously approved $1.5 billion. Another $940 million would be invested in laying a heated pipeline from Barmer to the Gujarat coast, said an official of ONGC, which has a 30 per cent stake in the Rajasthan fields. — PTI

Essar Offshore bags Rs 1,000-cr order
Mumbai:
Essar Offshore Subsea on Wednesday said it has bagged a Rs 1,000-crore order from ONGC. Essar would modify, revamp platforms of ONGC and install new equipment and facilities in the process complexes of Neelam and Heera at the Western offshore fields of India. — PTI

Blue Dart service
Mumbai:
Blue Dart Express Limited has launched DHL's value- added service 'Duties and Taxes Paid (DTP)'. The value-added service — DTP, aimed at providing multinational and SME exporters the most convenient trading experience and would allow an exporter from India to manage his shipping requirements in a seamless manner, a company release stated. This service comes at an additional flat fee of Rs 900 per shipment. — UNI

PTC India to raise Rs 1,200 cr
Mumbai:
The country's top power trading firm PTC India on Wednesday said it would raise funds up to Rs 1,200 crore through qualified institutional placement (QIP). The company would be raising Rs 400 crore through non-convertible debentures and Rs 800 by issuing warrants, the filing added. — PTI

Motorola posts $3.6-b loss
New York:
Motorola has swung deep into the red for the fourth quarter, even forcing the cell phone maker to suspend dividend. Motorola posted a stunning loss of $3.6 billion for the fourth quarter ended December 31, 2008. The entity had a net profit of $100 million in the year-ago period, it said in a statement. — PTI

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