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THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
B U S I N E S S

IMF pegs India’s growth at 5.25% for FY 10
Washington, March 18
India's growth is likely to slowdown to 6.25 per cent in 2008-09 on falling corporate investment and deteriorating global outlook, the International Monetary Fund has said.

Plan panel forecasts 7%
New Delhi, March 18
The Indian economy is expected to grow up to 7 per cent in the next financial year riding on the fiscal stimulus measures taken by the government, Planning Commission Member Abhijit said today.

Bonus payments were required, says AIG chief
Washington, March 18
American International Group Inc.(AIG) chief executive officer Edward Liddy gave no indication the insurer would pull back bonuses to employees that have outraged Congress and the Obama administration.

Aircel starts GSM services in Delhi
Maxis Communications’ CEO Sandip Das (L), Bollywood star Lara Dutta and Aircel’s chief operating officer Gurdeep Singh at the launch of GSM services in Delhi on Wednesday. New Delhi, March 18
Delhiites today got a wider basket of mobile operators to choose from, with Aircel-Maxis starting GSM services that includes different schemes with the potential to set off a new tariff war.
Maxis Communications’ CEO Sandip Das (L), Bollywood star Lara Dutta and Aircel’s chief operating officer Gurdeep Singh at the launch of GSM services in Delhi on Wednesday. Tribune photo: 
Mukesh Aggarwal







EARLIER STORIES



BSNL to launch BlackBerry by next month
New Delhi, March 18
State-owned BSNL today said it would launch its BlackBerry services by next month. "We have got all the approvals ... and will launch BlackBerry services by April," BSNL chairman and managing director Kuldeep Goyal told reporters on the sidelines of the programme 'Convergence India'.

Apple offers advanced iPhone
San Francisco, March 18
Apple unveiled its proposed new software for its genre-defining iPhone Tuesday and gave acolytes of the world's most popular smartphone the feature they most wanted: the ability to cut and paste text and pictures on the device.

IOC undecided over RIL’s oil retail call
New Delhi, March 18
Indian Oil Corporation is still wondering whether it is viable to lease the 1,432 petrol pumps that Reliance Industries has offered. While BPCL is not keen at all, HPCL is yet to make up its mind. The economics of having more petrol pumps is something not viable at this point in time despite the fact that the price of oil has gone down considerably, say sources in oil ministry.

Harpal Singh CII plans new industry clusters in North
Chandigarh, March 18
The CII would work on building the northern region as a unified entity, with a common tax regime, so as to attract equitable investment. The premier industry body will work against any barriers in the northern region, be it tax incentives to certain states, or entry tax imposed in other states.                                                             
Harpal Singh

Tata Motors gears up for Nano’s launch
Mumbai, March 18
Ahead of the launch of the world's cheapest car later this month, Tata Motors have roped in banks and several of its dealerships apart from other outlets to mobilise applications for the Nano, according to sources.

Ban on pulses’ export extended
New Delhi, March 18
With pulses production estimated to decline this fiscal, the government today extended import of these products at zero duty and the ban on exports on almost all varieties, for one more year, to increase its domestic supply.

IBM eyes Sun Microsystems
New York, March 18
Technology giant IBM is in talks to buy Sun Microsystems for at least $6.5 billion, Wall Street Journal said in a report.

Mahindras to build special military vehicles
Mumbai, March 18
Mahindra Defence Systems (MDS) yesterday announced the inauguration of its new facility at Prithla at Faridabad to build Special Military Vehicles.

RIL to sell fuel directly in US
Mumbai, March 18
Reliance Industries is looking at selling petrol and diesel from its twin refineries at Jamnagar in Gujarat directly to the USA, the world's largest fuel consumer.

Citi’s chief economist quits
New York, March 18
Citigroup chief economist Lewis Alexander is leaving the troubled financial services entity to join the US Treasury Department, says a media report.





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IMF pegs India’s growth at 5.25% for FY 10

Washington, March 18
India's growth is likely to slowdown to 6.25 per cent in 2008-09 on falling corporate investment and deteriorating global outlook, the International Monetary Fund has said.

Partly reflecting the deteriorating global outlook, IMF, which concluded its India consultations on March 6, in a statement projected India’s growth to moderate to 6.25 per cent in 2008-09 and further to 5.25 per cent in 2009-10.

However, India has forecast growth at 7.1 per cent for 2008-09.

The Fund said corporate investment, the major growth driver during recent years, is expected to slow because of weakening profitability and confidence, and tightening of financing conditions from foreign and non-bank sources.

In a statement, the world body said policy measures to stimulate Indian economy and a good harvest should support domestic demand.

"The uncertainty surrounding the forecast is unusually large, with significant downside risks. The main upside risk stems from a larger-than-anticipated impact of the stimulus measures that the authorities have already implemented." After last year’s record of 9.2 per cent of GDP, the IMF said the capital inflows were expected to decline this fiscal year. Till December 2008 portfolio investment recorded a $11 billion outflow.

External commercial borrowing has slowed considerably, though there has been a mild recovery in portfolio investment since October 2008 and foreign direct investment (FDI) has held up relatively well, it said yesterday.

Even as the reserves have declined this fiscal year, from a historic peak of $315 billion in May 2008 to $252 billion as of February 6, 2009, IMF said the reserves remain adequate compared to India's gross financing requirement and imports.

The Fund said as a result of the global crisis, in 2008, the stock market index declined by over 50 per cent and the rupee depreciated 23 per cent versus the US dollar and 13 per cent in nominal effective terms.

"The real effective exchange rate depreciated by 10 per cent and is in line with its equilibrium value," it said. In early 2009, however, the rupee and the stock market have stabilised somewhat, it added. — PTI

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Plan panel forecasts 7%
Tribune News Service

New Delhi, March 18
The Indian economy is expected to grow up to 7 per cent in the next financial year riding on the fiscal stimulus measures taken by the government, Planning Commission Member Abhijit said today.

Even if the effects of the stimulus packages announced by the government were not included, the economy would grow at 5 per cent in 2009-10 in a worst case scenario as per Planning Commission calculations, Sen told reporters here on the sidelines of a CII summit here.

"We have done a worst case calculation on the basis of no effect of the stimulus and what we know currently about the world economy, on that basis the worst case scenario is about 5 per cent growth," he said.

Though Sen said the impact of any fiscal stimulus is difficult to build in to numbers as "we are not very sure about the pace at which it will take place", he projected the stimulus effect to be between 1.5 per cent and 2 per cent.

Sen said the economy might require more fiscal stimulus, but it would be possible only after the new government takes charge. "We cannot provide any stimulus, at least on the fiscal side, till the next government takes place."

Dr Sen agreed that in the prevailing economic scenario, it was difficult for anyone to talk of fiscal controls, but said this was important if we were to sustain our growth momentum.

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Bonus payments were required, says AIG chief

Washington, March 18
American International Group Inc.(AIG) chief executive officer Edward Liddy gave no indication the insurer would pull back bonuses to employees that have outraged Congress and the Obama administration.

"We have to continue managing our business as a business — taking into account the cold realities of competition for customers, for revenues and for employees," Liddy said in congressional testimony obtained by Reuters. "Because of this, and because of certain legal obligations, AIG has recently made a set of compensation payments, some of which I find distasteful."

AIG is surviving on three federal bailouts worth up to $180 billion, but it paid out $165 million in bonuses. The Obama administration and lawmakers are looking for ways to get the money back.

Following widespread outrage, Treasury Secretary Timothy Geithner said yesterday that AIG would be required to reimburse the government for the bonuses in order to get additional bailout funds.

In a letter to House Speaker Nancy Pelosi, Geithner said it was impossible to prevent the contractual bonuses from being paid and said it might be difficult to recoup the payments.

However, Geithner said the government would "impose on AIG a contractual commitment" to repay the $165 million to taxpayers.— Agencies

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Aircel starts GSM services in Delhi

New Delhi, March 18
Delhiites today got a wider basket of mobile operators to choose from, with Aircel-Maxis starting GSM services that includes different schemes with the potential to set off a new tariff war.

Aircel will offer a lifetime validity scheme for pre-paid mobile customers that allows users to make local calls at Re 1 for the first minute, 60 paise for the second minute and 40 paise for the third minute onwards.

Aircel has launched four different tariff plans targeting different consumer segments — business and corporate, youth and students, migrant population from North-East, Bengal, Bihar and UP and standard package.

The company has announced an investment of $10 billion to cover nationwide cellular network and of this $5 billion has already been invested, Sandip Das, CEO of Aircel, told reporters.

Aircel has pan-India licence and has also been allocated the spectrum, Das said, adding that in the next 24 months the company would cover all 23 circles.

For business users, Aircel has come up with a scheme which would allow them to make calls and messages to local Aircel numbers for free and make STD calls at 50 paise between Aircel to Aircel.

For the youth segment, Aircel offers group messaging at one paisa, group calling at 25 paise, home calling advantage with STD to one Aircel number at 25 paise and ISD to USA/Canada at Rs 2 per minute.

For the migrant population from North-east, Bengal, Bihar and UP, Aircel would allow the consumers to make on-net STD calls at 50 paise, free of cost for the first three months followed by a recharge of Rs 30. It also offers ISD calls at Rs 1.75 to USA/ Canada along with 300 free messages.

With a lifetime validity plan of Rs 99, local calls would be charged at Re 1 for the first minute, 60 paise for the second and 40 paise for the third minute onwards during a call. — PTI

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BSNL to launch BlackBerry by next month

New Delhi, March 18
State-owned BSNL today said it would launch its BlackBerry services by next month.

"We have got all the approvals ... and will launch BlackBerry services by April," BSNL chairman and managing director Kuldeep Goyal told reporters on the sidelines of the programme 'Convergence India'.

BlackBerry services had earlier come under scrutiny after Indian security agencies expressed concern that the data being transmitted through the device could not be intercepted due to the high encryption codes being used by the company.

Goyal clarified that monitoring 3G services has not been put on hold. "It is possible to monitor 3G services ... it has not been put on hold," he said.

3G services provide for high-speed data and video streaming. — PTI

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Apple offers advanced iPhone

San Francisco, March 18
Apple unveiled its proposed new software for its genre-defining iPhone Tuesday and gave acolytes of the world's most popular smartphone the feature they most wanted: the ability to cut and paste text and pictures on the device.

Lack of the cut and paste facility had been one of the main drawbacks of the device, compared to competitors like the Blackberry.

The new software also allows iPhone users to send multi-media messages to other phones, and will enable users to receive turn-by-turn instructions for driving similar to those in use on GPS navigation devices.

iPhone users can also now link to other phones via Bluetooth and automatically be connected to wi-fi hotspots. — DPA

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IOC undecided over RIL’s oil retail call
Bhagyashree Pande
Tribune News Service

New Delhi, March 18
Indian Oil Corporation is still wondering whether it is viable to lease the 1,432 petrol pumps that Reliance Industries has offered. While BPCL is not keen at all, HPCL is yet to make up its mind. The economics of having more petrol pumps is something not viable at this point in time despite the fact that the price of oil has gone down considerably, say sources in oil ministry.

The trouble for private retailer lies with the fact that despite low cost of crude oil, controlled retail pricing at the petrol pump level makes selling unviable, the sources say.

Another reason, sources cite for this partnership, is the economics of running petrol pumps. The margins per pump have fallen significantly because of the density of existing IOC, HP and BPCL network in most cities and highways.

Sources in the dealer network say that even IOC and other pumps are not very viable. The dealer operates on a thin margin, which for petrol is Re 1, and 0.60 paise for diesel. For a new entrant with such thin margins, it is difficult to survive, say dealers.

Reliance and Essar are new entrants and have to open their outlets on highways and far off places where the demand may not be very high thus making the economics of running a pump questionable, add sources.

The joint venture with IOC, if it happens, will help Reliance sell its fuel from two refineries in Jamnagar. The company is facing a glut in demand from its two refineries that cater mostly to export markets.

Another reason why the partnership is sought is that after March 2010, the first Jamnagar refinery of company will seize to be export-oriented unit (EoU). An EoU refinery is exempt from customs and excise duty, but when the goods are sold domestically then the duties increase the retail cost by nearly Rs 10 per litre.

After having spent nearly Rs 5,000 crore on developing the petrol pump network in the country, Reliance Industries is proposing to open some pumps.

Reliance is buying petrol and diesel from refiners such as MRPL and Ruias-owned Essar Oil to reopen its petrol pumps in phases. The source said outlets in Gujarat and Maharashtra will be reopened first.

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CII plans new industry clusters in North
Ruchika M. Khanna
Tribune News Service

Chandigarh, March 18
The CII would work on building the northern region as a unified entity, with a common tax regime, so as to attract equitable investment. The premier industry body will work against any barriers in the northern region, be it tax incentives to certain states, or entry tax imposed in other states.

Talking to TNS here today, the newly elected chairman of the CII northern region, Harpal Singh, said in these difficult economic times, the investment would be better governance and better efficiency-driven, and not incentive-driven. “There should not be tax anomalies in the region. The incentives granted to the tax exempt hill states are detested by other states. We now have to look into the future and see that the northern region emerges without barriers for integrated industrial development,” he said.

The former non-executive chairman of Ranbaxy Laboratories said the integrated approach for building for the future involved regional planning by creating state-of-the-art inter-state infrastructure. “Our focus will also be on skill development in the region, so that the human resources can be moulded as per industry requirements. CII will be starting new skill centres at Alwar (Rajasthan), Jammu and Kashmir and Punjab,” he added.

He said other than the skill centres, CII would also set up new industry clusters across various states in the northern region in 2009-10. "We will start new industry clusters in Haryana, Uttar Pradesh and Rajasthan in order to enhance internal competitiveness of the industry. As of now, nine clusters are operational in Punjab, Jaipur, Faridabad and Gurgaon. The Jalandar Hand Tool cluster had been a huge success story by reporting a saving of over Rs 13.50 crore and Ludhiana bicycle cluster reported a saving of Rs 7 crore with the adoption of cluster approach,” he said.

Talking about his vision to help the recession-hit micro, small and medium enterprises (MSMEs), he said they would revive Business Facilitation Cell for this sector of the industry. “This cell will help the MSMEs connect with emerging markets in this era of downturn, help them improve technology, and help them revise their business models to suit present day needs,” he said.

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Tata Motors gears up for Nano’s launch
Shiv Kumar
Tribune News Service

Mumbai, March 18
Ahead of the launch of the world's cheapest car later this month, Tata Motors have roped in banks and several of its dealerships apart from other outlets to mobilise applications for the Nano, according to sources.

As per the plan that is still being given the finishing touches, those looking to buy the Nano may pick up application forms priced at around Rs 300 and submit them at various branches of the State Bank of India.

Under a finance scheme being put together by Tata Motors and SBI, applicants may have to pay Rs 40,000 as application money while the rest of the amount would be in the form of a loan from the bank.

The loan would be disbursed by the bank on allotment of the car to the applicant. Officials of Tata Motors and SBI are still working out the interest chargeable on the loan. Sources say, interest charged on the loan would be slightly on the higher side from the 10.5 to 11 per cent being charged for auto loans. However reports say, SBI may charge as much as 14 per cent on the loan.

According to analysts, the risk profile of those applying for the Nano is on the higher side since a lot of them would be upgrading from two-wheelers.

Tata Motors expect a long waiting list for the Nano and deliveries could stretch for months, according to officials. As many as four crore people have sought details about the Nano from the Tata Motors' website, according to sources.

The first Nanos will be displayed at Tata Motors dealerships from March 23 and bookings will open from April.

The basic model of the Nano will be priced at Rs 1 lakh ex-factory while air-conditioned models would cost around Rs 1.25 lakh.

Production is expected to begin from Uttarakhand and Pune even as the factory in Gujarat is getting ready, according to sources.

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Ban on pulses’ export extended

New Delhi, March 18
With pulses production estimated to decline this fiscal, the government today extended import of these products at zero duty and the ban on exports on almost all varieties, for one more year, to increase its domestic supply.

At a cabinet meeting here, the Union Cabinet also decided to extend the distribution of imported pulses through the public distribution system for six more months till September 30 this year, Home Minister P Chidambaram said today.

Besides, it was decided to allow state-run trading firms to import 1.5 million tonnes of pulses under a reimbursement scheme, he said.

As such, pulses can now be imported at zero duty for one more year till March 31, 2010, he said.

"The second decision is to extend the ban on exports of pulses except Kabuli Channa for one more year, that is 1/4/2009 to 31/3/2010," he said. — PTI

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IBM eyes Sun Microsystems

New York, March 18
Technology giant IBM is in talks to buy Sun Microsystems for at least $6.5 billion, Wall Street Journal said in a report.

Quoting people familiar with the matter, WSJ said that IBM was in talks to buy Sun Microsystems Inc and the deal would bolster the company's presence in the Internet, software and finance and telecommunications markets. "If the deal goes through, IBM is likely to pay at least $6.5 billion," the WSJ report revealed.

"The two companies have a common interest in that both make computer systems for corporate customers that are not reliant on Microsoft Corp's Windows software, and their product lines are less dependant than rivals' on Intel Corp.'s microprocessor technologies, " the report stated.

Both companies are also strong supporters of open-source Linux and Java software, it added.

However, the daily said the people familiar with the matter have cautioned that even as the talks for the buyout are underway, a transaction might not occur.

Sun Microsystems develops innovative products and services that power the network economy. — PTI

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Mahindras to build special military vehicles
Tribune News Service

Mumbai, March 18
Mahindra Defence Systems (MDS) yesterday announced the inauguration of its new facility at Prithla at Faridabad to build Special Military Vehicles.

According to the company, this facility is the first-of-its-kind in the private sector to manufacture vehicles for the defence forces.

“The Mahindra Special Military Vehicles (MSMV) facility will manufacture specialised vehicles for the armed forces, paramilitary forces and police and is also designed to undertake vehicle development, armouring and conversions. Different lines have been established for different products, ensuring the highest level of quality control and processes," Anand Mahindra, chairman of the company said at the inauguration.

According to the company, the plant also has an advanced facility for R&D, product development, design and prototyping of special vehicles to meet specific customer requirements. The plant will have a capacity of 500 uparmoured vehicles per year and will roll out uparmoured vehicles such as bullet-proof Scorpios, Boleros, the Rakshak, the bulletproof Tourister Bus, Riot Intervention Vehicles and the Marksman light armoured vehicle.

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RIL to sell fuel directly in US

Mumbai, March 18
Reliance Industries is looking at selling petrol and diesel from its twin refineries at Jamnagar in Gujarat directly to the USA, the world's largest fuel consumer.

"We are in discussions with certain parties in US," said P M S Prasad, head of the company's oil and gas business. "We believe the highest value addition to every molecule is through direct sales and yes we are keen on doing that in US." RIL is talking to consumers of gasoline (petrol) as well as US fuel marketers who currently have a deficit, he said but did not give details.

The company recently started gasoline trading operations in the US. Its office located in Houston would trade in gasoline both on the US Gulf Coast and New York Harbor market.

Prasad said RIL was in talks with marketers such as Hess who currently have a product deficit.

Prasad, however, did not say what volumes was Reliance expecting to sell in the US. — PTI

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Citi’s chief economist quits

New York, March 18
Citigroup chief economist Lewis Alexander is leaving the troubled financial services entity to join the US Treasury Department, says a media report.

The Wall Street Journal quoted an internal Citigroup memo saying that Alexander would leave his job in Citi to work on domestic financial issues at the Treasury, which is facing staff shortage.

Lewis Alexander, who has been at Citigroup since 1999 and before that worked at the Federal Reserve, will head to the Treasury "to work on domestic financial issues," the memo stated.

Further, the WSJ report cited a government official as saying that Alexander would be a counsellor to Treasury Secretary Timothy Geithner.

However, Alexander and a Treasury spokesman were not available for comment, while a Citigroup spokesman declined to elaborate on the memo.— PTI

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BRIEFLY

Re gains 19 paise
Mumbai:
A smart rise in equity markets on Wednesday amid fresh capital inflows helped the rupee to recover by 19 paise to close at more than a two-week high of 51.30/31 against the greenback. In fairly active trade at the Interbank Foreign Exchange (Forex) market, the domestic currency opened strong at 51.40/42 a dollar from its previous close of 51.49/51. It later moved in a range of 51.49 and 51.27 before concluding the day at 51.30/31 per dollar. — PTI

Dell launches ultra-thin laptop
San Francisco:
Dell has launched a high-end laptop computer which the company said was the thinnest in the world. With a thickness of 0.65 inches (1.65 cm) and available in onyx and pearl colours, the new Adamo laptop is thinner than Apple's MacBook Air. The laptop is priced at $1,999 onwards. — Xinhua

Ginger Hotels’ plan
New Delhi:
Ginger Hotels on Wednesday said it would open 13 hotels across the country by 2010, taking its total inventory to 30 properties. The budget segment brand of Indian Hotels Company opened a hotel in Mangalore recently and is now looking to expand into cities like Guwahati, Durg, Surat and Chennai in the next phase over the next year.— PTI

DLF Pramerica Life Insurance
Amritsar:
DLF Pramerica Life Insurance Co. Ltd., a joint venture between real estate major DLF and Prudential International Insurance Holdings, on Wednesday opened its branch here. Kapil Mehta, CEO of the company, said they saw immense potential for life insurance business in Punjab and believed that this region was going to be a key growth driver for the company. — TNS

FDI in Orange Realty okayed
New Delhi:
The government on Wednesday allowed a foreign investment proposal by Mauritius-based company IREO for operating a wholly-owned subsidiary in India under the brand Orange Realty. The Cabinet Committee on Economic Affairs (CCEA) approved the proposal of IREO Investment Holdings-III to invest in the National Capital Region-based Orange Realty Pvt Ltd, under which a new subsidiary would be formed.— PTI

Gati discontinues pact with AI
New Delhi:
Warehousing and logistics firm Gati on Wednesday said it has discontinued the arrangement with Air India for using five Boeing 737-200 aircraft under a wet lease agreement and the freight planes have been withdrawn. Gati, in a communique to the BSE, said that "the arrangement under wet lease agreement with Air India for five B737-200 has been discontinued with immediate effect".— PTI

Tata Motors tie-up
New Delhi:
Auto maker Tata Motors on Wednesday said it has tied up with public-sector lender Andhra Bank for providing retail finance facilities to its passenger vehicle customers. "In order to provide an added facility of car finance to its customers, Tata Motors has entered into an understanding with Andhra Bank for financing its range of passenger vehicles," the company said in a statement.— PTI

CII office-bearers
Chandigarh:
Partap Aggarwal, managing director, IDS Infotech, has been elected chairman and Nitin K Peshawaria, proprietor, Alvind Industries, vice-chairman of the CII Chandigarh Council for the year 2009-10. — TNS

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