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Inflation at all-time low of 0.44%
New Delhi, March 19
The annual rate of inflation, measured by the wholesale price index, declined to more than three-decade low of 0.44 per cent for the week ended March 7, as compared to 2.43 per cent for the week ended February 28. It was 7.78 per cent a year ago. Despite the drastic fall in inflation, food and essential items continue to remain expensive.

Montek allays fears of deflation
New Delhi, March 19
Planning Commission Deputy Chairman Montek Singh Ahluwalia today allayed fears of the country sliding into a deflationary phase and termed the current low level of inflation as good for the economy.



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AIG chief urges staff  to return bonuses 
Washington, March 19
Troubled insurance giant American International Group's chairman and chief executive has asked its employees to return at least half of the bonuses paid to them recently, after facing sharp criticism from taxpayers and federal officials against the payments.

Govt’s profligacy may sour foreign investors’ sentiment
New Delhi, March 19
The sentiment of foreign investors is looking sour as they are worried about the government’s market borrowing programme for 2009-10. Different estimates put borrowings between Rs 2.20 trillion to as high as Rs 4.48 trillion for the coming fiscal starting April 1.

Christopher Morgan, senior vice-president, Hewlett-Packard, with company’s vice-president Ravi Aggarwal unveil new laser jet printer in New Delhi on Thursday.
Christopher Morgan, senior vice-president, Hewlett-Packard, with company’s vice-president Ravi Aggarwal unveil new laser jet printer in New Delhi on Thursday. Tribune photo: Manas Ranjan Bhui

Best Nations for Biz
India moves down in Forbes ranking
New York, March 19
India has slipped 11 positions to be ranked 75th in a list of world's best countries for business, compiled by US publication Forbes, as the country lost ground in areas like trade freedom, technology, corporate tax rate and corruption.

Rupee gains 92 paise
Mumbai, March 19
The rupee today shot up by 92 paise, the biggest rise in the year 2009, to close at a three-week high of 50.38/39 against the greenback following heavy dollar sell-off amid expectations of increased capital inflows.

SEBI plans to extend trading hours
Mumbai, March 19
Market regulator SEBI today proposed to extend trading hours in exchanges to align the domestic bourses with international markets and asked various stakeholders for their opinion.

Govt defers new pension schemeNew Delhi, March 19
The common man will have to wait till after the elections to the 15th Lok Sabha to enroll for the new Pension Scheme, which the government was seeking to extend beyond its employees.

EPCOS gaining ground
Chandigarh, March 19
The high teledensity and the popularity of low-tariff mobile plans has acted as a death knell for the PCOs across the country. In order to revive this sagging business, the PCO Association has joined hands with Intel and BSNL to launch a new concept of ePCO.

Toyota to go slow on hiring
Tokyo, March 19
Toyota Motor Corp said on Thursday it will nearly halve its hiring of new graduates next business year to the lowest level in more than a decade as it copes with weak global demand for cars by cutting costs. Toyota plans to hire 1,400 new graduates in the year starting on April 1, down from an estimated 2,733 in the current year.
— Reuters





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Inflation at all-time low of 0.44%
Tribune News Service & PTI

New Delhi, March 19
The annual rate of inflation, measured by the wholesale price index, declined to more than three-decade low of 0.44 per cent for the week ended March 7, as compared to 2.43 per cent for the week ended February 28. It was 7.78 per cent a year ago.

Despite the drastic fall in inflation, food and essential items continue to remain expensive. What has really become cheaper are industrial metals that had skyrocketed, making finished products expensive.

Meanwhile, the government today brushed aside fears of Indian economy slipping into a deflationary phase, stating a sharp drop in inflation this month has more to do with the high base a year ago than any great decline in prices.

"I do not see any sign of deflation right now. Probably, decline in inflation is more due to higher base last year than any significant drop in prices," Cabinet Secretary K M Chandrasekhar told reporters at a Ficci function here.

Pinning hopes on stimulus packages between December and February, government sees signs of recovery in select sectors.

"Automobile, cement, steel and infrastructure sectors are growing," Chandrasekhar said.

Trade Secretary Gopal Pillai said “Inflation is not an issue for the next two to three months and trade is likely to improve from April 2009.”

"We see that there is a lack of demand with high levels of inventory that has led to downward pressure on commodity prices. We need more credit flow to the industry," CII Director General Chandrajeet Banerjee said.

Industry chamber Ficci also urged the RBI to further ease the monetary policy to aid industry.

Ficci president Harsh Pati Singhania said, "What is particularly worrisome is that given the present inflation and the interest rates being charged by banks, the real rate of interest in the economy is at double-digit levels. The banks must lower the lending rates of single-digit levels, if economic activity is to be stimulated.”

He said in view of the evolving situation, the banks must shed their conservative stance with regard to lending to corporates and consumers. In fact, the RBI and the government should embolden and incentivise the banks to direct resources for productive purposes, he added.

Assocham president Sajjan Jindal said, "We are hoping that the RBI will take a cue from it (fall in inflation) and might as well take a few more monetary measures so that India witnesses one more interest cut to boost demand and infuse liquidity in the market." 

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Montek allays fears of deflation

New Delhi, March 19
Planning Commission Deputy Chairman Montek Singh Ahluwalia today allayed fears of the country sliding into a deflationary phase and termed the current low level of inflation as good for the economy.

"It is a good thing that it has come down. It is good for the economy. We said it will come down all the time, so it is not a surprise. What we have been saying is correct that inflation will not be a problem," Ahluwalia said.

Inflation declined to over three- decade low of 0.44 per cent for the first week of March.

Asked if the country was heading towards deflation, Ahluwalia said: "No it is not, definitely not. The objective of inflation policy should be to keep inflation at low and modest levels. It cannot be the objective to have deflationary policies. I do not think we are going to have it." He, however, said inflation may further fall for a short duration of time.

"... for one week if it goes a little bit below you can't call that deflation. But it is true that it has gone down sharply and I think it should remain at a low level," he said.

When asked if inflation could touch sub-zero level, Ahluwalia said, " What happens for one week is not very important, because you can suddenly get a dip for one week if some price goes down. That's not what I call a deflation." — PTI 

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AIG chief urges staff  to return bonuses 

Washington, March 19
Troubled insurance giant American International Group's chairman and chief executive has asked its employees to return at least half of the bonuses paid to them recently, after facing sharp criticism from taxpayers and federal officials against the payments.

"I have asked the employees of AIG Financial Products to step up and do the right thing. Specifically, I have asked those who received retention payments of $100,000 or more to return at least half of those payments," AIG CEO Edward Liddy said in his testimony to the sub- committee of the US House of Representatives.

"We have heard the American people loudly and clearly these past few days," Liddy said adding that some of employees had already stepped forward and offered to give up 100 per cent of their payments.

Liddy, who took the charge of the company in September when the government had injected the first package of $85 billion to bail out the insurance giant, has urged the AIG staff to return the bonuses paid following rising public ire against the payments.

In the testimony, Liddy said he was trying to prevent the uncontrolled collapse of the Financial Products (FP) unit, explaining that there are still $1.6 trillion of toxic asset.

"The financial downside for taxpayers is potentially very large and very real, and that's why we are winding this business down," Liddy said.

Earlier this week, the bonus payment by distressed insurance firm had drawn flak from White House leaders, with President Barack Obama vowing to pursue legal avenue to block these payments.

Liddy said the bonuses of about $165 million had been paid to its executives to prevent the collapse of the FP business and for paying back the taxpayers money quickly. — PTI 

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Govt’s profligacy may sour foreign investors’ sentiment
Bhagyashree Pande
Tribune News Service

New Delhi, March 19
The sentiment of foreign investors is looking sour as they are worried about the government’s market borrowing programme for 2009-10. Different estimates put borrowings between Rs 2.20 trillion to as high as Rs 4.48 trillion for the coming fiscal starting April 1.

However, sources say the total borrowing is set to rise to a record Rs 3.62 trillion next year and Rs 2.2 trillion is a conservative estimate. ICICI Securities estimates that the total supply of federal and state debt in 2009/10 (April-March) would be Rs 4.48 trillion against estimated demand of Rs 3.62 trillion.

Analysts blame the government of wasteful spending, such as spending on subsidies, which has widened the deficits and would need to be cut back. It will be a bitter pill to swallow for the next government that takes power, the analysts say.

The government has issued too many bonds as a result of excessive borrowing programme of the UPA government. There were bonds for oil, fertiliser and even the government’s own borrowing programme was going out of hand, reason analysts. 

Now, the central bank is scrambling to buy back the bonds as demand-supply ratio has destabilised and the values of bonds have fallen drastically.

Yields on 10-year government debt have soared as much as 230 basis points since the start of the year in April.

The apex bank now is in a dilemma with the limited currency reserves of $250 billion. There are two options it can choose from: Buy bonds from the market and help the government achieve the growth target, which has been propped up by stimulus spending, or help strengthen the weak rupee.

The RBI has scrambled for ways to keep a lid on bond yields and has taken to buying back bonds at an auction the day before new debt is issued. It has bought back bonds of a total of Rs 287 billion in four auctions and is scheduled to buy another Rs 100 billion on Friday.

Analysts reason this saying that excess bonds and soaring yields will make government’s own borrowing programme more costly in the future.

The result of the UPA government’s profligacy is that in near future it will become difficult to borrow for new programmes and foreign investors will shy away from the country.

According to Morgan Stanley estimates, outflows totalled $15-$17 billion in the last quarter of 2008 after inflows of about $223 billion between 2004 and 2008.

There will be a return of the global risk appetite, but foreign rating agencies, on whose ratings most investors invest in any country, are rating India lower.

Rating agency Standard and Poor downgraded its outlook on India's credit rating, stating that a cut to junk status is around the corner.

If all other options are exhausted, the central bank could monetise the fiscal deficit, by printing cash to give it directly to the government against debt. However, such a step would probably sour India's reputation even more among foreign investors and create headaches for the new government that takes power in next two months.

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Best Nations for Biz
India moves down in Forbes ranking

New York, March 19
India has slipped 11 positions to be ranked 75th in a list of world's best countries for business, compiled by US publication Forbes, as the country lost ground in areas like trade freedom, technology, corporate tax rate and corruption.

The list has been topped for the second year in a row by Denmark, while India has moved down from its 64th position in Forbes' annual list, which ranks 127 nations on the basis of business climate in a country for entrepreneurs, investors and workers.

The US has moved up two position to be ranked second on the list. Besides, Canada and Singapore have moved up four spots each to number three and four respectively. Other countries in the top 10 this year include New Zealand, UK, Sweden, Australia, Hong Kong and Norway.

Three countries — New Zealand, Australia and Norway — are new to the top-10 this year, while three others — Finland, Ireland and Switzerland — have fallen out of this league.

"Sliding the most this year was Ireland (No. 14, down 12), which even saw plans for a Guinness mega-brewery shelved by parent Diageo as exports slowed," Forbes said, adding Uruguay, Armenia, Paraguay and Latvia also moved down considerably.

China has moved ahead of India to 63rd position in this year's list, up from its 79th spot last year, primarily due to improvements in areas like innovation and investor protection.

The Communist nation has been ranked at top position across the world in terms of investor protection, although it is ranked among the lowest at 122nd in terms of personal freedom.

About India, the report said the country declined on the rankings on four metrics — trade freedom, technology, corporate tax rate and corruption.

In terms of trade freedom, India was ranked among the lowest at 125th position, while it was down to 118th on corporate tax rate front. In technology and corruption, the country slipped to 64th and 71st positions, respectively.

Besides, India is ranked at the 107th spot in terms of monetary freedom, 90th on red tape basis and 54th on personal freedom front. The rankings are, however, better at 30th each on the basis of investor protection and innovation and 44th on intellectual property rights. — PTI 

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Rupee gains 92 paise

Mumbai, March 19
The rupee today shot up by 92 paise, the biggest rise in the year 2009, to close at a three-week high of 50.38/39 against the greenback following heavy dollar sell-off amid expectations of increased capital inflows.

In active trade at the Interbank Foreign Exchange (Forex) market, the domestic currency opened sharply up at 51.04/05 a dollar from the previous close of 51.30/31 due to firm equity markets.

It rallied further to settle the day at 50.38/39 per dollar, a sharp rise of 1.79 per cent. Yesterday, it was up by 19 paise. The rupee moved in a range of 51.10 and 50.30.

Heavy dollar-selling by banks and exporters on expectations of a further fall due to a surprise announcement by the US Federal Reserve yesterday that it would pump in another $1 trillion into the ailing economy, boosted rupee sentiment, a dealer said.

Expectations of more capital inflows after two days of net buying by foreign funds and a weak dollar overseas also helped the rupee rally for the second straight day, he added.— PTI 

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SEBI plans to extend trading hours

Mumbai, March 19
Market regulator SEBI today proposed to extend trading hours in exchanges to align the domestic bourses with international markets and asked various stakeholders for their opinion.

"With the increased integration of the global markets, information originating from different countries has a bearing on Indian securities market," said the Securities and Exchange Board of India (SEBI) in a statement.

While trading on the Asian bourses commences little ahead of the Indian markets, the European and American markets open much later, SEBI said asking various stakeholders for their views on determining optimum market timing, before April 10.

"Some of the exchanges in these countries have adopted longer trading hours, sometimes even extending up to 23 hours.

This has facilitated market participants in these countries to hedge their risk that might arise due to global information flow," SEBI said. — PTI 

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Govt defers new pension scheme

New Delhi, March 19
The common man will have to wait till after the elections to the 15th Lok Sabha to enroll for the new Pension Scheme, which the government was seeking to extend beyond its employees.

Failing to get Election Commission's nod for campaigning and undertaking preparatory activities for launch of the scheme on April 1, the government today announced its decision to defer extension of the scheme to other citizens.

"Keeping in view the Model Code of Conduct for Elections, it has not been possible for PFRDA (pension fund regulator) to continue this information campaign and undertake other preparatory activities as originally scheduled. It has accordingly been decided to defer the date of the extension of the NPS to other citizens," an official statement said here.

The Centre has already implemented the new pension system for its employees who joined on or after January 1, 2004.

In August 2008, the government advised the Pension Fund Regulatory and Development Authority (PFRDA) to extend the NPS to all citizens.

PFRDA has already appointed six fund managers for the citizens scheme — IDFC MF, Kotak Mahindra, SBI, UTI Asset Management, ICICI Prudential Life Insurance and Reliance MF. It has also appointed 23 Points of Presence for managing NPS contributions pertaining to all citizens. —PTI

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EPCOS gaining ground
Ruchika M. Khanna
Tribune News Service

Chandigarh, March 19
The high teledensity and the popularity of low-tariff mobile plans has acted as a death knell for the PCOs across the country. In order to revive this sagging business, the PCO Association has joined hands with Intel and BSNL to launch a new concept of ePCO.

Over the past decade, the strength of PCOs of various telecom operators has declined by almost 70 per cent. From enjoying a strength of 2.5 crore in year 2000, the number of PCOs in India have dwindled to 60 lakh. Officials in BSNL say that initially PCOs were the main revenue generators for them, but now the economic unviability has forced many PCO owners to shut shop.

Talking to TNS here today, Rajendra S.V., president of PCO Association, which has 20 lakh PCO owners as members, said that the total income generated from a normal PCO has dwindled to just Rs 100 a day. "It was thus that we came up with the idea of having ePCOs to revive this business. 

These ePCOs offer multiple online services like railway, airline bus ticket booking, utility bill payments (electricity, water, telephone), mobile recharges, chat and internet browsing facility, insurance and banking, college admission forms, cinemas tickets, DTH TV subscriptions, astrology, matrimonial, shopping etc. We approached BSNL to offer us broadband connections and Intel Technology to help us with the technology and training of PCO owners," he said.

"We had launched these services in August last year in Karnataka on a pilot basis. Since then it has had a resounding success and we have now launched 300 ePCOs," he said, adding that an ePCO had now been launched in Chandigarh. He added that wherever the ePCOs have been set up, the owners have now reported a surge in business, with monthly profits of at least Rs 5,000.

Kamal Kumar, general manager, BSNL Punjab Telecom circle, said that the broadband subscribers in India were just 5 million although there are 60 million Internet users. "It is projected that the number of Internet users will go up to 500 million by 2012 and the broadband connections would increase to 100 million. Thus these ePCOs have a huge market. This will also help in revival of the PCO business," he added.

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BRIEFLY

SpiceJet cuts fares
Mumbai
: Low-cost carrier SpiceJet said on Thursday it has cut fares on all bookings made 30 days or more in advance, by up to Rs 600 a ticket. The reduced fares would cover its entire fleet of 119 flights across 18 destinations, it said in a statement. — Reuters

Essar Power raises Rs 350 cr
New Delhi
: Essar Power has raised an equity investment of Rs 350 crore from Infrastructure Development Finance Co (IDFC) for partly funding its ongoing projects. The funding was done through IDFC Projects Equity, the country's leading infrastructure equity investment manager.— PTI

Oil higher in Asian trade
Singapore
: Oil prices rebounded in Asian trade on Thursday from overnight falls following a bigger-than-expected increase in US energy stocks, dealers said. New York's main contract, light sweet crude for April delivery rose 99 cents to $49.13. Brent North Sea crude April gained 89 cents to $48.55.— AFP

Bill payment via SMS
Mumbai
: Tata Teleservices on Thursday announced the launch of a pre-paid top-up and post-paid bill payment services through SMS. The company has entered into a partnership with mChek to offer this service in the doemstic telecom space, a company statement issued here said. The payment can be made using credit cards, the release said.— PTI

Areva bags Lanco order
New Delhi
: Electrical equipment maker Areva T&D on Thursday said it has bagged an order worth Rs 214 crore from Lanco Infratech for supplying generator transformers to its thermal power plant at Anpara in Uttar Pradesh. The order includes supply of 765 kilo vaults (Kv) generator transformers, 765 Kv to 400 Kv interconnecting transformers and reactors for the switchyard associated with the 1,200 MW Anpara thermal power plant.— PTI

Apollo Tyres buyback
Mumbai
: Apollo Tyres on Thursday said its board has approved buying back of equities worth Rs 122 crore from the existing shareholders. The company's board of directors has approved a proposal to buy back 67 lakh equity shares from the open market at a maximum price of Rs 25 a piece, Apollo Tyres said in a filing to the Bombay Stock Exchange.— PTI

Birmingham-Amritsar flight
London
: Akal Air, a new private airline, is launching flights from Birmingham to Amritsar from next month to cater to the demands of nearly four lakh people of Indian origin living in the West Midlands. Akal Air will deploy a 228-seater Boeing 757 200, departing Birmingham on Wednesdays and Saturdays at 18.30 from April 4.— PTI

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