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CHANDIGARH

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DELHI



THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
B U S I N E S S

Don’t gang up, Patel warns airlines
New Delhi, February 11
A day after major airlines announced fare hikes, Civil Aviation Minister Praful Patel warned them not to indulge in cartelisation. While assuring that state-run Air India will never be a part of any such effort, he said “strong action would be taken against airlines if they acted like a cartel to hike fares”.

Retail Deposits
Private banks woo customers with gifts
Chandigarh, February 11
Retail deposits have now become the growth drivers for banks, both private as well as public sector ones. While the banks are now staying away from high-cost bulk deposits, they are trying to gain retail deposits by offering attractive deposit rates and wooing customers with sops.

‘Financial crisis political in nature’
New Delhi, February 11
While speaking at the 3rd KB Lall Memorial Lecture titled “From Asian to Global Financial Crisis”, Prof Andrew Sheng, who holds the prestigious Tun Ismail Ali Chair at the Faculty of Economics and Administration, University of Malaya, said “after having studied financial crisis all my life, I come to the conclusion that crisis is ultimately political in nature. Ultimately, all financial crises are crisis of governance.”



EARLIER STORIES





Red lantern decorations for the Lunar New Year remain hanging in an office building plaza as pedestrians walk by in Beijing on Wednesday. China's exports fell 17.5 per cent in January from a year earlier, customs authorities said, marking the sharpest drop in more than a decade. — AFP

US Senate okays $829-billion stimulus package
Washington, February 11
The United States Senate yesterday passed Barack Obama's economic recovery plan, the $829 billion stimulus Bill, which the President said would create four million jobs and was vital for riviving the crisis-hit economy.

FDI norms eased to attract capital inflow
New Delhi, February 11
With a view to facilitating greater foreign capital inflows, the government has rolled out a welcome mat for foreign companies investing in India. This entails a change in foreign direct investment (FDI) policy to send a positive signal in the present difficult economic scenario, said Home Minister P Chidambaram after the Cabinet meeting.

Subhiksha denies fund diversion
New Delhi, February 11
Cash-strapped retail chain Subhiksha Trading Services today said there were neither discrepancies in its accounts nor diversion of funds, while acknowledging that salary cheques of some of its employees have not been honoured due to non-availability of liquidity.

Gold soars to Rs 14,550
New Delhi, February 11
Gold skyrocketed to a record-high level of more than Rs 14,500 per 10 gm in the national capital today on frantic buying by stockists and jewellery fabricators, triggered by firming global trends.

ONGC’s plan hits roadblock
New Delhi, February 11
ONGC's plans for oil exploration in a national park in Rajasthan has hit a roadblock with the government deciding to carry out a detailed environmental impact study before granting approval.

JV for cargo hub in Nagpur cleared
New Delhi, February 11
The government today approved the creation of a joint venture firm, comprising Airports Authority of India and Maharashtra government, to construct a multi-modal passenger and cargo hub at the Nagpur airport, keeping its geographical location in mind.

ArcelorMittal posts $2.6-b loss
Luxembourg, February 11
Steel giant ArcelorMittal has reported a huge loss in the last quarter of 2008, and announced on Wednesday that job cuts could exceed a planned total of 9,000.

 





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Don’t gang up, Patel warns airlines
Tribune News Service

New Delhi, February 11
A day after major airlines announced fare hikes, Civil Aviation Minister Praful Patel warned them not to indulge in cartelisation. While assuring that state-run Air India will never be a part of any such effort, he said “strong action would be taken against airlines if they acted like a cartel to hike fares”.

The Director General Civil Aviation (DGCA) also asked the airlines to provide all details on the fare hike. All airlines have been asked to furnish details on the fare hike, officials said, adding that necessary action would be taken, if required, on the basis of reports.

The fare hikes have been most unexpected especially since fuel prices have come down drastically since last year following which carriers were forced to reduce air fares. But they decided to do away with the lowest air fares under the advance purchase schemes.

The Civil Aviation Minister’s statement against any move towards cartelisation among them assumes significance since the government has been accused of going soft on the civil aviation sector. The government’s decision to give a 90-day credit period to private airlines on fuel purchases had come under a lot of flak from Opposition.

Coming out strongly against reports of cartelisation amongst airlines, Patel said action would be taken against airlines if they acted like a cartel to hike fares.

“The ministry is against any cartelisation amongst airlines. We will keep watch and take strict action in any such case. The national carrier Air India will never be a part of it and will ensure that competitive pricing ensures better prices to the passengers. Air India shall act as a counter with better pricing and competitive fares,” he added.

While other leading players decided to stop promotional fares to arrest losses, flag carrier Air India said its fares will be 10 per cent lower than those of Jet Airways and Kingfisher's cheapest rates.

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Retail Deposits
Private banks woo customers with gifts
Ruchika M. Khanna
Tribune News Service

Chandigarh, February 11
Retail deposits have now become the growth drivers for banks, both private as well as public sector ones. While the banks are now staying away from high-cost bulk deposits, they are trying to gain retail deposits by offering attractive deposit rates and wooing customers with sops.

Though the public sector banks are maintaining their retail deposit rates around eight per cent, the private sector banks are offering anything between 9.50-10.5 per cent as rate of interest. In event of the recent global meltdown and fall of private banks in the USA, the deposit mobilisation in the private sector banks here, too, has been hit hard.

So, while the state-run banks have registered a robust growth in deposits over the last two quarters (July-December), the private sector banks have now taken to wooing customers in a big way. From offering free dinner coupons to movie tickets, DVDs and music tracks — the private sector banks are leaving no stone unturned to get retail deposits by lining special road shows and door-to-door campaigns. These banks are also offering incentives to their staff to woo depositors.

Private bankers say that with the financial year coming to a close they are wooing retail depositors so as to make up for the negative growth in retail deposits in the second and third quarter of this fiscal. “In the long run, the perception of private banks will not take a big hit. Good economic sense will prevail and private banks will continue to get good short-term deposits as they are offering almost 1.5 to 2 per cent higher rate of interest than the public sector banks,” said a senior official in HDFC Bank.

Suresh Sethi, president, transaction banking group, Yes Bank, while talking to TNS, said they would now see their retail strategy go full steam. “The retail segment and business banking (SMEs) are now the growth drivers. We are now focusing on how the granular deposit base of the bank can go up,” he said.

Its not just the private sector banks, but the public sector banks, too, which are realising that retail deposits are the way to go in order to raise resources. Ramnath Pradeep, executive director of Central Bank of India, said while public sector banks have decided not to offer higher rate of interest on bulk deposits, retail deposits are the growth drivers for banks. "We are motivating our employees to get more retail customers and start campaigns for mobilising saving accounts, term deposits and recovery," he said.

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‘Financial crisis political in nature’
Tribune News Service

New Delhi, February 11
While speaking at the 3rd KB Lall Memorial Lecture titled “From Asian to Global Financial Crisis”, Prof Andrew Sheng, who holds the prestigious Tun Ismail Ali Chair at the Faculty of Economics and Administration, University of Malaya, said “after having studied financial crisis all my life, I come to the conclusion that crisis is ultimately political in nature. Ultimately, all financial crises are crisis of governance.”

“It takes good governance at the corporate, financial and social level to generate long-run sustainable stability. We have global markets but national mindsets. A major defect of the current international financial architecture is that everyone cared for their own banks,” he said.

While suggesting a solution to the problem, Prof Sheng said, “there is, in fact, only a short window of opportunity of reform before memory of crisis fades and vested interests again capture the need for reform. If we do not reform while the winds are in our favour, the next crisis is inevitable.” “But Asians do have the advantage of being pragmatic and have deep historical and cultural wisdom to accept the facts of life and to adjust accordingly. Asians have to recognise that we live in an inter-dependent world, we need to cooperate to live in an increasingly small and fragile planet. We have national rights, as well as global responsibilities,” Prof Sheng said on the Asian outlook.

“Asia had put its excess savings in the West precisely because its own financial system is not ready to intermediate such savings. Its regulatory structure is still evolving and Asian bureaucrats are neither internationally minded nor prepared psychologically to act in the international monetary order,” he said.

In conclusion, he said “since Asia remains a dynamic fast-growing region, there is no doubt in my mind that for regional growth to be stable, some institutional form of monetary cooperation and regional financial market is inevitable.”

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US Senate okays $829-billion stimulus package

Washington, February 11
The United States Senate yesterday passed Barack Obama's economic recovery plan, the $829 billion stimulus Bill, which the President said would create four million jobs and was vital for riviving the crisis-hit economy.

Amid strong Republican opposition, the Bill was passed by a roll call vote of 61-37. The House of Representative has already passed it.

Since there are sharp differences between the two, leaders of both Chambers of the US Congress House of Representative and the Senate would now have to sit down together for a conference for another round of negotiations so that both the Bills could be merged into one.

Once that is done and reapproved by the House of Representative and the Senate, the Bill officially called the American Recovery and Reinvestment Bill would be sent to the White House for the President to sign it into law. Obama wants to get it done before this weekend.

Meanwhile, like the House of Representatives, the Bill failed to get significant support of the opposition Republicans. Even by frantic lobbying by majority Democrats and those by the White House, the Bill could muster the support of just three Republicans; giving it the numbers to barely scrap through the Senate.

The three Republican Senators who crossed over to support the President in his stimulus package were Susan Collins and Olympia Snowe of Maine and Arlen Specter of Pennsylvania. — PTI

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FDI norms eased to attract capital inflow
Tribune News Service & PTI

New Delhi, February 11
With a view to facilitating greater foreign capital inflows, the government has rolled out a welcome mat for foreign companies investing in India. This entails a change in foreign direct investment (FDI) policy to send a positive signal in the present difficult economic scenario, said Home Minister P Chidambaram after the Cabinet meeting.

The decision taken by the Cabinet Committee of Economic Affairs (CCEA) today involves liberalised guidelines for calculation of total foreign investment in Indian companies and transfer of ownership or control of Indian companies in sectors with caps from Resident Indian citizens to non-resident entities.

When asked about the reason why the government was simplifying rules at this point in time, the Home Minister said the objective was to make FDI policy simple and transparent.

"The foreign investment through (an) investing Indian company would not be considered for (calculating) the indirect foreign investment in (the) case of Indian companies 'owned and controlled' by resident Indian citizens and Indian companies owned and controlled ultimately by resident Indian citizens," a new guideline says.

In another amendment, the CCEA decided that government approval would be required for transferring the ownership of an Indian company that has a joint venture with a foreign firm in any sector covered by FDI caps.

The CCEA approval of changes in FDI norms follows the recommendations of a group of ministers headed by External Affairs Minister Pranab Mukherjee.

In case the joint venture is between a foreign firm and an 'investing company' that is 'owned and controlled' by an overseas entity, the stakes of both companies (the foreign firm and the overseas entity) will be added to arrive at the overall cap, according to the new rules.

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Subhiksha denies fund diversion

New Delhi, February 11
Cash-strapped retail chain Subhiksha Trading Services today said there were neither discrepancies in its accounts nor diversion of funds, while acknowledging that salary cheques of some of its employees have not been honoured due to non-availability of liquidity.

"We are not aware of any such allegations (account discrepancy and fund diversion) at all and this is the first time we are hearing about this. Obviously these allegations are false and motivated and deserve to be treated with contempt," Subhiksha Trading Services managing director R Subramanian told PTI.

Subramanian's comments come in the wake of reports that employees of the retail chain were planning to file case for "dishonouring pay cheques" while alleging the company of "diverting funds and fudging the accounts".

He, however, admitted that the salary cheques of some employees have not been honoured and blamed the situation for non-availability of funds.

"We have admitted that salaries are in arrears since October 2008. Some pay cheques for October and November 2008 dated mid-January 2009 or so were issued based on assurance that we would be receiving some money as an interim measure.

Such money did not materialise and the cheques could not be honoured," Subramanian said.

Subramanian said Subhiksha is trying to raise money for the payment of employees' salaries.

"The company has every intention of honouring the cheques and is attempting to raise money for this. The fact is that salaries are in arrears and this has been already stated, and that cheques are not honoured is only a technicality and not a real issue," Subramanian added. — PTI

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Gold soars to Rs 14,550

New Delhi, February 11
Gold skyrocketed to a record-high level of more than Rs 14,500 per 10 gm in the national capital today on frantic buying by stockists and jewellery fabricators, triggered by firming global trends.

The precious metal spurted by Rs 310 at Rs 14,550 per 10 gram, a level never seen before, following reports that gold in overseas markets advanced for the first time in three days on concerns that the global economy will deteriorate, lifting demand for the commodity as a haven.

The international gold markets, which normally determine prices on the domestic front here, turned extremely bullish after it surged to $913.70 an ounce on the New York Mercantile Exchange, up from $892.40. An ongoing heavy marriage season here further boosted demand for gold among jewellers.

Market players are optimistic that it would remain on a record-making-and-breaking spree for another three months, before setting a new peak. — PTI

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ONGC’s plan hits roadblock

New Delhi, February 11
ONGC's plans for oil exploration in a national park in Rajasthan has hit a roadblock with the government deciding to carry out a detailed environmental impact study before granting approval.

The PSU along with an Italian firm had proposed to carry out seismic survey in the three zones of Desert National Park spread over an area of 3162 sq kms and set up in 1980 for exploring oil in the region. It is already carrying out oil exploration activities outside the park.

However, noting that the techniques used by the companies would have negative impact on the vegetation of the national park, National Board of Wildlife of the environment ministry at a meeting recently decided to conduct a detailed scientific study to find out the impact it would have on the wildlife species in and around park. — PTI

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JV for cargo hub in Nagpur cleared

New Delhi, February 11
The government today approved the creation of a joint venture firm, comprising Airports Authority of India and Maharashtra government, to construct a multi-modal passenger and cargo hub at the Nagpur airport, keeping its geographical location in mind.

The decision, taken by the Union Cabinet, would enable the government to transfer the land owned by the AAI so far to the firm that is a JV between the state-owned airports body and public sector Maharashtra Airport Development Company (MADC) for creation of this hub.

"Approval has been granted to the establishment of the first joint venture (AAI-MADC) and transfer of the land and assets to it," Home Minister P Chidambaram told reporters here. In this JV, AAI would hold 49 per cent and MADC 51 per cent.

The first JV firm would then invite and select a private partner and form a second JV, in which the former would hold 24 per cent equity and the latter 76 per cent, he said, adding that a concession agreement would then be signed between the parties in the second JV. — PTI

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ArcelorMittal posts $2.6-b loss

Luxembourg, February 11
Steel giant ArcelorMittal has reported a huge loss in the last quarter of 2008, and announced on Wednesday that job cuts could exceed a planned total of 9,000.

The group reported a 9-per cent net profit fall for the year to $9.4 billion.

The group said it would continue to cut production in the first quarter of this year in response to the global economic crisis, and that job cuts could exceed 9,000, the figure signalled under a previous plan.

This was because the company was extending a voluntary departure scheme to production workers, finance director Aditya Mittal said.

For the last quarter of last year, the group reported a net loss of $2.6 billion owing to an exceptional charge of $3.1 billion in contrast to a profit of $2.4 billion in the equivalent period of 2007.

The group, by far the biggest steel maker in the world, said it would continue to reduce production in the first quarter of this year because of the effects of the economic crisis on demand for steel. — AFP

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BRIEFLY

Nod to facsimile edition of foreign newspapers
NEW DELHI:
The government has for the first time given approval for the publication of the facsimile edition of foreign newspapers by allowing the publication of “The Wall Street Journal” and “The Wall Street Journal Asia”. The newspapers will be brought out by M/s Wall Street Journal India Publishing Private limited, a wholly owned subsidiary of M/s Dow Jones and Company Inc., USA. The permission for Foreign Direct Investment worth Rs 2.16 crore was given earlier, a press release from the Information and Broadcasting Ministry said. — TNS

Compact Disc plan
Chandigarh:
Chandigarh-based Compact Disc India Ltd will launch an animation feature film on soccer with legendary Brazilain player, Pele at the Cannes Film Festival later this year. An official release from CDIL said that the Cannes Film Festival authorities have agreed to give a red carpet welcome to Pele and the CDIL team. — TNS

Amara Raja, Maruti tie-up
Chennai:
Amara Raja Batteries, a leading manufacturer of industrial and automotive batteries, has tied up with passenger car major Maruti Suzuki India Ltd to launch the co-branded battery 'Amaron MGB'. Amaron brand of Amara Raja Batteries in the automotive battery segment was a brand of 'OEM' fitment for most models of passenger cars from the stable of Maruti Suzuki. — PTI

Wockhardt launches new insulin
Ahmedabad:
Wockhardt has launched Glaritus, a new recombinant long acting human insulin analogue, in India that works slowly for over 24 hours. As per ORG IMS, the current market for analogues in India is Rs 120 crore growing at A rate of 37 per cent per annum. This new insulin has been successfully tested clinically on 300 diabetic patients for safety and is approved by the Drug Controller General of India. — UNI

NTT DoCoMo's open offer for TTML
Mumbai:
Tata Teleservices Maharashtra (TTML) on Wednesday said the open offer to its shareholders by Japanese telecom major NTT DoCoMo has been rescheduled to February 19. The open offer date was slated for January 8, but had to be deferred as DoCoMo was awaiting market regulator SEBI's approval. — PTI

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