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THE TRIBUNE SPECIALS
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No blank cheque to Air India: Govt
New Delhi/Mumbai, June 24
Pedestrians walk past Air India headquarters in Mumbai. Prime Minister Manmohan Singh today assured Air India that the government would put its entire weight behind it but with a condition that airline should undertake a full restructuring and shape up by becoming leaner and trimmer.

Pedestrians walk past Air India headquarters in Mumbai. — AFP 

Rain worry for economy
New Delhi, June 24
Economy will see a major impact of deficient rains this season. Much of the buoyancy was due to demand from the rural sector that kept India insulated from the economic downturn that sucked in the world.

Highest paid staffer in Infy not a techie
Bangalore, June 24
Accountants enjoy better compensation package than software engineers in the information technology (IT) behemoth Infosys. The highest paid employee in Infosys is not a techie. Mohandas Pai, a chartered accountant who is director and head (administration and HRD) in Infosys gets remuneration of Rs 2.59 crore per annum.



EARLIER STORIES



BSNL awaits nod for IPO
New Delhi, June 24
State-run largest telecom operator Bharat Sanchar Nigam Ltd (BSNL) is awaiting approval from the government for its maiden initial public offering (IPO). This was stated here yesterday by BSNL chairman and managing director Kuldeep Goyal. He said the company would initiate its valuation process shortly.

Citigroup may hike salaries
New York, June 24
Troubled financial major Citigroup will increase the base salary of its rank-and-file employees by as much as 50 per cent this year to compensate for smaller bonuses, said a media report.

Oil PSUs plan joint cell to check multiple LPG connections
Chandigarh, June 24
With over one crore households in the country suspected of having multiple LPG connections, oil sector public sector undertakings are contemplating setting up a joint cell to tackle the issue.

SBI cuts rate by 50 bps
Mumbai, June 24
State Bank of India, the country's largest lender, today slashed its benchmark lending rate by half a percentage point to 11.75 per cent that would benefit home, car and corporate loan customers.

Telecom sector’s wish list to Raja
New Delhi, June 24
Multiple taxes and duties levied on the telecom sector should be rationalised to help reduce cost, development of infrastructure in rural sector and spectrum roadmap for one billion wireless users in India by 2014-15. These are some of the suggestions made by industry think-tank Confederation of Indian Industry (CII) to the government.

Corporate results
ONGC Q4 net dips 16 pc
New Delhi, June 24
State-run Oil and Natural Gas Corporation (ONGC) has reported a 16 per cent drop in its net profit in the quarter ended March 31, 2009, on LPG and kerosene subsidy payout and one-time liability on a field operated by Cairn.





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No blank cheque to Air India: Govt

New Delhi/Mumbai, June 24
Prime Minister Manmohan Singh today assured Air India that the government would put its entire weight behind it but with a condition that airline should undertake a full restructuring and shape up by becoming leaner and trimmer.

Civil Aviation Minister Praful Patel, who met Singh today and put forward a case for government bailout, said Air India had been asked to give its restructuring plans at the earliest before a committee of secretaries, headed by the Cabinet Secretary.

"The Prime Minister has said the entire weight of the government is behind Air India. It is a national carrier and it is our pride. But there is a condition that Air India must put its best foot forward. The employees must realise that there is a problem and it is a cumulative problem,” Patel said.

He said Air India would require a lot restructuring from within both organisationally, financially and manpower-wise. Until serious steps are taken to improve the functioning and financial viability, it would be difficult for the government to continue supporting the airliner.

The minister said no figures had been given for the bailout and all media reports in this regard were hypothetical and may be based on some sectional views of departments. But he also said bailout did not mean endless cheques being written by government in support of Air India.

Demanding a thorough probe by a joint parliamentary committee (JPC), Shiv Sena-backed trade unions in the National Aviation Company today sought Prime Minister Manmohan Singh's intervention in Air India affairs.

“We demand immediate intervention by Prime Minister Manmohan Singh on the Air India issue. The govt should also appoint a committee, either a JPC or a Parliamentary committee to look into the problems that the national air-carrier faces today and fix responsibility on those who have brought it to such a pass and suggest corrective measures," Shiv Sena's Rajya Sabha MP and Air India union leader Bharat Kumar Raut said.

The unions which have sought the Prime Minister's intervention are All India Cabin Crew Association, Air India Employees Union, Air India Service Engineers Association, All India Executive Cabin Crew Association and Bharatiya Kamgar Sena-Indian Airlines. — PTI

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Rain worry for economy
Bhagyashree Pande
Tribune News Service

New Delhi, June 24
Economy will see a major impact of deficient rains this season. Much of the buoyancy was due to demand from the rural sector that kept India insulated from the economic downturn that sucked in the world.

Farm sector accounts for nearly 17 per cent of India's gross domestic product (GDP) and the GDP growth may drop to 5 per cent this financial year way below the 7 per cent, a government estimate. The government is already running up double-digit fiscal deficits to combat global financial crisis by way of various stimulus packages but with the rains playing truant, it will have little money left to throw into the economy.

Poor monsoon could dent rural demand, hurt corporate profitability and undermine sentiment in financial markets, says Siddharth Shankar, economist, Kassa India.

Companies making automobiles, textiles, FMCG, consumer durable manufacturers drew strength from robust rural market demand. Poor rains will lead to sentiment of the stock market taking a setback and may lead to investors rethinking about investing in India for the time being, say stock market players.

Robust monsoon leads to bumper harvests, which in turn raises farm incomes, and increases demand for goods ranging from television to cars and lends support to factory output. Agriculture sector employs around 60 per cent of the total workforce in India and contributes about 14-15 per cent of the GDP.

“Farm sector contributes about 20-25 per cent of our national income. A decline in agricultural growth will pull the overall growth rate in GDP down,” Shankar says, adding: “In case if agricultural output falls, we will see higher inflation and import of essential items like sugar.”

According to NTPC sources, direct impact of poor rains will mean a setback in hydel power production. Hydropower producer NHPC produces about 5,000 mw and would see some impact. However, power major NTPC that produces around 30,000 mw of power, will not be affected. In fact, they will see more demand for power.

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Highest paid staffer in Infy not a techie
Shubhadeep Choudhury
Tribune News Service

Bangalore, June 24
Accountants enjoy better compensation package than software engineers in the information technology (IT) behemoth Infosys. The highest paid employee in Infosys is not a techie. Mohandas Pai, a chartered accountant who is director and head (administration and HRD) in Infosys gets remuneration of Rs 2.59 crore per annum.

Next in the line is V Balakrishnan, another accountant who is posted as chief financial officer in the organisation. His annual compensation is a whopping Rs 2.36 crore.

S Gopalkrishnan, CEO and managing director of the company, figures below Pai and Balakrishnan in terms remunerations received. His annual package is a “modest” Rs 91.79 lakh. Even Nandan Nilekani, co-chairman of the board of directors of the company, gets less than the two topnotch accountants. Nilekani’s yearly gross remuneration is Rs 90.76 lakh. SD Shibulal, chief operating officer and director, gets Rs 87.31 lakh.

Ramdas Kamath, also a chartered accountant and posted as senior vice-president and head (administration, commercial, facilities, infrastructure and security) is also paid in crores. The company has six people with engineering background who are paid more than Rs 1 crore per annum. Highest paid person in this category is Srinath Batni, director and head (delivery excellence). He gets monthly remuneration of Rs 1.87 lakh.

A statement with regard to gross remuneration received by Infosys employees shows all the 570 employees figuring in the list getting a seven-figure annual package ranging from Rs 2 lakh per month and above.

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BSNL awaits nod for IPO
Tribune News Service

New Delhi, June 24
State-run largest telecom operator Bharat Sanchar Nigam Ltd (BSNL) is awaiting approval from the government for its maiden initial public offering (IPO). This was stated here yesterday by BSNL chairman and managing director Kuldeep Goyal. He said the company would initiate its valuation process shortly.

Facing opposition from BSNL unions over the move, Goyal also said the management would start talks with the unions after getting the government's go-ahead.

"If the government decides we have to go for IPO, then we will talk to the union and evaluate the company," he said.

Once the government clearance comes the public sector undertaking would also initiate steps to appoint merchant bankers as advisers on the IPO.

BSNL has proposed to dilute 10 per cent of the government's equity holding through IPO to raise about $10 billion and has a paid up capital of about Rs 5,000 crore. It had revenues of around Rs 45,000 crore in 2008-09, the reason why the union are opposing the IPO.

They say the company has enough funds to carry out all the modernisation and should not go for an IPO which would dilute the stake. The company has more than Rs 30,000 crore in cash balance and is all set for expansion.

It is also looking for acquisition abroad. "We are looking at some telecom operators in African countries," said Goyal. BSNL had last year had also invited bids for equipment to build 93 million GSM lines valued at over $6.5 billion. Goyal said the financial bids for the same have been opened.

“Ericsson technically qualifies in north and east and Huawei for south," he said.

Reports suggested that the government is likely to announce BSNL’s proposed listing in the upcoming Budget. The IPO is likely to be included as a statement of intent in the Budget, and added that both department of telecom and BSNL would begin working on the initial public offer after the Budget session. 

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Citigroup may hike salaries

New York, June 24
Troubled financial major Citigroup will increase the base salary of its rank-and-file employees by as much as 50 per cent this year to compensate for smaller bonuses, said a media report.

“Citigroup intends to raise workers’ base salaries by as much as 50 per cent this year to offset smaller annual bonuses,” the The New York Times reported quoting people with direct knowledge of the plan.

The report further said most Citigroup employees would make as much money as they did in 2008.

The company, which has received three bailouts from the government, also plans to award millions of new stock options to employees in an effort to retain workers and neutralise a precipitous drop in the value of their stock holdings, it added.

The Citigroup proposals, discussed internally this week, present a crucial test for the Obama administration that has vowed to rein in runaway compensation at companies that have received large taxpayer-financed bailouts.

The report stated that despite Washington’s new role at Citigroup and public anger over big paydays on Wall Street, the administration has little power to prevent the company and others in the industry from raising salaries for rank-and-file employees.

Ups GDP growth for FY 2010

Mumbai: Citigroup has projected that Indian economy would grow at 6.8 per cent in the current fiscal riding on higher investment flow.

Revising upwards its earlier forecast that had said growth would be 5.5 per cent in 2009-10, Citigroup, however, added that any further delay in monsoon would have implications on economic growth, inflation and the proposed Food Security Act. “The upward revision is primarily due to higher investment growth where we believe the worst is over and the stage is now set for some recovery," it said.

Citibank India net up 20 pc

Citibank, though struggling globally, has done well here with its Indian arm reporting 20 per cent rise in net profit at Rs 2,173 crore for the year ended March 31, 2009.

The bank, which has 40 branches at 28 locations, said in a statement on Wednesday its total revenue was up 24 per cent at Rs 10,423 crore amid inflows by way of higher interest income, trading income and fees. — PTI

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Oil PSUs plan joint cell to check multiple LPG connections
Vijay Mohan
Tribune News Service

Chandigarh, June 24
With over one crore households in the country suspected of having multiple LPG connections, oil sector public sector undertakings are contemplating setting up a joint cell to tackle the issue.

Multiple connections, according to a fact-finding committee, leads to idling of equipment, thereby delaying the process of new LPG connections and refill of cylinders by consumers.

A senior executive of an oil company said a parliamentary committee had recommended setting up such a cell and the matter was also raised with the Ministry of Petroleum and Natural Gas.

Pointing out that the action taken by the oil companies did not appear to be adequate, the committee had recommended that in order to fast-track the work, a separate cell comprising officials from marketing division of the three oil PSUs - IndianOil, Bharat Petroleum and Hindustan Petroleum - should be set up.

The proposed cell would also be required to spread awareness among consumers to voluntarily surrender their extra connections and in case that doesn’t work, appropriate penal action would be initiated against the erring consumers.

The committee also recommended that, if necessary, amendments to the existing rules and regulations be made to effectively tackle such cases. 

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SBI cuts rate by 50 bps

Mumbai, June 24
State Bank of India, the country's largest lender, today slashed its benchmark lending rate by half a percentage point to 11.75 per cent that would benefit home, car and corporate loan customers.

The benchmark prime lending rate (BPLR) was revised down by 50 basis points effective June 29, SBI informed the Bombay Stock Exchange.

The BPLR of the bank currently stands at 12.25 per cent.

For a tenure of 181 days to less than one year, the rate was reduced from 6.50 per cent to 6.25 per cent while for one year to less than 2-years, it was cut from 7.25 per cent to 7 per cent.

For two-years to less than 1,000 days, the new rate is 7.25 per cent against 7.50 per cent. — PTI 

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Telecom sector’s wish list to Raja
Girja Shankar Kaura
Tribune News Service

New Delhi, June 24
Multiple taxes and duties levied on the telecom sector should be rationalised to help reduce cost, development of infrastructure in rural sector and spectrum roadmap for one billion wireless users in India by 2014-15. These are some of the suggestions made by industry think-tank Confederation of Indian Industry (CII) to the government.

Manoj Kohli, chairman, CII (National Committee On Telecom & Broadband) and joint managing director and CEO of Bharti Airtel, along with the other industry representatives met Telecom Minister A Raja here on Tuesday and submitted five-point recommendations.

Kohli said: “The industry is fully prepared to take onus of being number one in telecom sector by 2014-15 by participating in second phase of Bharat Nirman. In order to do so, we request the government to provide support on key five challenges”.

The five-point agenda includes roadmap for accelerating inclusive, equitable and sustainable growth of broadband in India to reach 695 million users by 2014 as per CII broadband study ‘India 2009-2014: Broadband roadmap for inclusive growth’.

To achieve rural growth, the CII panel suggested that the government needed to address issues related to tower construction approvals, tower sharing and standardisation, providing backhaul for broadband connectivity to all villages.

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Corporate results
ONGC Q4 net dips 16 pc

New Delhi, June 24
State-run Oil and Natural Gas Corporation (ONGC) has reported a 16 per cent drop in its net profit in the quarter ended March 31, 2009, on LPG and kerosene subsidy payout and one-time liability on a field operated by Cairn.

Net profit dipped to Rs 2,206.76 crore in January-March quarter from Rs 2,627.10 crore a year ago, company CMD RS Sharma said.

Total operating income of the company also fell to Rs 13,833.58 crore from Rs 16,699.21 crore in Q4 of 2007-08 on lower sales.

ONGC's oil production declined to 6.460 million tonnes in Q4 against 6.915 million tonnes a year ago. Gas output, however, increased to 5.347 billion cubic meters from 6.158 bcm, Sharma said.

For 2008-09, ONGC posted a net profit of Rs 16,126.31 crore, down by 3.44 per cent from Rs 16,701.65 crore in FY'08.

Sun TV declares dividend

Media firm Sun TV Network has reported a 13 per cent rise in its consolidated net profit at Rs 368.33 crore for the financial year ended March 31, 2009. The company had a consolidated net profit of Rs 326.69 crore during the 2007-08 fiscal, Sun TV Network said.

Total income of the company rose to Rs 1,106.16 crore during FY'09 from Rs 925.54 crore a year ago.

The media house has declared a final dividend of 20 per cent or Re 1 per share for the 2008-09 fiscal.

On a standalone basis, Sun TV Network posted a net profit of Rs 437.11 crore, up 19 per cent, compared to Rs 366.98 crore last fiscal.

Bharti AXA

Bharti AXA Investment Managers has declared a dividend of 0.85 per cent for its Regular Return Fund. The record date for the fund is June 25, according to a company release.

The fund was launched in January this year and aims to generate regular income through fixed income securities and also generate long term capital appreciation by investing a portion of money in equities, the press note said.

Central Bank of India

Public sector lender Central Bank of India has said its net profit for the year ended March 31, 2009 rose by 6.93 per cent at Rs 635.85 crore, over the same period last year. The bank had a net profit of Rs 594.60 crore in the same period ended March 2008, Central Bank of India said.

Total income of the bank rose to Rs 11,540.97 crore for the year ended March 2009, from Rs 8,804.55 crore in the same period last year. — PTI

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BRIEFLY

Pearson plans for India
New Delhi
: Pearson, the publisher of Financial Times and owner of Penguin, on Wednesday said it would pump in $30 million in India to acquire 50 per cent stake in Educomp's vocational training business and over 17 per cent in a Bangalore-based e-tutoring firm. The investments are aimed at catering to the industry's growing demand for skilled labour force in India and tapping teaching talent in the country to provide tutorials to students, primarily in the US. — PTI

Tech Mahindra
New Delhi
: IT firm Tech Mahindra on Wednesday said it was planning to pay back about Rs 1,000 crore debt for which it is issuing shares on private placement basis. “We have Rs 2,200 crore-odd debt which we took to acquire a stake in Satyam. The purpose we are taking this QIP is to retire the high cost debt,” CEO of Tech Mahindra Sanjay Kalra said. — PTI

LIC to pump in Rs 1.75K cr
New Delhi
: Life Insurance Corporation (LIC) on Wednesday said it would invest Rs 1,75,000 crore, including Rs 50,000 crore in the equity market, during the current fiscal. “We are planning to invest a total of Rs 1,75,000 crore against Rs 1,62,000 crore last year,” LIC managing director Thomas Mathew T said. — PTI 

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