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B U S I N E S S

Gas Row
RNRL moves SC, seeks changes in HC ruling

New Delhi/Mumbai, July 3
Anil Ambani group company RNRL today moved the Supreme Court for modification in the Bombay High Court order to ensure gas supply from Mukesh Ambani-led RIL without going through negotiations.

Increase public spending to prop up economy: Virmani
New Delhi, July 3
Economics and politics make strange bedfellows. What has been suggested in the Economic Survey of 2008-09 does not necessarily mean will find acceptance with the politicians, because good economics does not always make for good politics, said Chief Economic Adviser Arvind Virmani, while talking to The Tribune.

Down, but not out
Satyam still top IT exporter in AP
Hyderabad, July 3
Despite facing the worst crisis in the country’s corporate history, Satyam Computer Services has put up creditable performance in software exports and tops the list from Andhra Pradesh for the year 2008-09.


EARLIER STORIES



Supporters of Pakistan's fundamentalist Islamic party Jamaat-i-Islami (JI) rally against an increase in petroleum prices and electricity shortages in Lahore on Friday.
Supporters of Pakistan's fundamentalist Islamic party Jamaat-i-Islami (JI) rally against an increase in petroleum prices and electricity shortages in Lahore on Friday. Pakistan has increased the prices of petroleum products by 10 to 20 per cent to match the increasing global petroleum prices. — AFP 

Auto LPG dearer by Rs 2 a litre
Chandigarh, July 3
State-run oil marketing companies (OMC) today raised the price of auto LPG by over Rs 2 a litre, two days after raising the petro prices.

India Inc on fund raising spree
Mops up Rs 11,714 cr in Q1
New Delhi, July 3
Funds raised by India Inc at home and abroad went up five-fold in the first quarter of the current financial year at Rs 11,714 crore, with more than half of it being mobilised in the last week of June.

Service tax collection down 7%
New Delhi, July 3
Service tax collection of the government has taken a beating this fiscal with the amount mopped up on this account falling more than 7 per cent to Rs 5,675 crore in the first month of 2009-10 as compared to the the same period last year.

Maruti unveils new Grand Vitara
New Delhi, July 3
The country's largest carmaker Maruti Suzuki India today launched an advanced version of its sports utility vehicle Grand Vitara, priced at Rs 16.67 lakh-Rs 17.97 lakh (ex-showroom, Delhi).

Nano in Nigeria by 2010
Abuja (Nigeria), July 3
Tata Motors, India's largest auto maker, will introduce its small car Nano--considered the world's cheapest--in Nigeria within next 18 months, ahead of its planned launch in Europe. The car would be available for about NGN 360 for the base model, same as the price in the Indian markets. The car carries a price tag of Rs 1.23 lakh to Rs 1.72 lakh (ex-showroom) in the Indian capital for three variants.

52 US banks go belly up in '09
New York, July 3
Seven more US banks have been shut down, pushing the total number of failures so far this year to 52 — more than double the collapses in 2008. In signs of the continuing economic turmoil, seven banks were seized by the authorities on July 2, the highest for any month in 2009.






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Gas Row
RNRL moves SC, seeks changes in HC ruling

New Delhi/Mumbai, July 3
Anil Ambani group company RNRL today moved the Supreme Court for modification in the Bombay High Court order to ensure gas supply from Mukesh Ambani-led RIL without going through negotiations.

Alleging that RIL was not willing to sit across the table as directed by the Bombay High Court for reaching an agreement within a month, RNRL said the court had already gone into the merit of gas supply, including pricing, and hence it should be implemented without leaving the two parties for discussion.

RNRL moved the Supreme Court two days after Reliance Industries said it would move the apex court on the Bombay High Court order that upheld Anil Ambani group's plea for 28 mmscmd of gas at a rate of USD 2.34 mmbtu but asked the two sides to negotiate an agreement for this.

The court also gave the the two companies a month's time to work out firm gas volumes, price, timelines and other commercial details for sourcing the fuel on the basis of MoU between them prior to their split in 2005.

RIL also informed Reliance Natural Resources Ltd through a communication that it would not sign any agreement without the approval of the government.

"We cannot sign any agreement without approval of the government on price, quantity and tenure," RIL had said and added that it was studying the high court verdict.

RNRL lawyer Mukul Rohatgi told reporters in Mumbai that "after categorically ruling in our favour, court cannot ask us again to sit down with a party which is not willing to sit across...not now, or even in the past,"

Rohtagi said the special leave petitions have been filed challenging the last part of the high court order asking RNRL to "again negotiate" after "ruling in our favour in terms of price of gas, tenure and quantity".

The SLPs seek directions from the apex court to amend the Gas Supply Agreement strictly in line with the high court findings and to immediate implementation of the same without any further delay.

The Anil Ambani group company also said the high court had failed to give complete and effective relief to it which could have been achieved by directing amendment of the gas supply agreement instead of leaving it to the parties to work out the agreement.

The SLPs said that the high court ruling solely related to RIL's share of gas and did not have any impact on the government's share of gas or its rights and entitlements.

This arrangement had no monetary impact on the Government of India as RIL was bound to supply gas to RNRL from its share as contemplated by the scheme which was approved by the creditors, shareholders, the Central government, it added.

According to RNRL, the entire controversy arose in view of RIL's consistent and continued conduct of backing out from its commitment.

"This is purely out of commercial greed. Higher gas price being sought by RIL will only further enrich this already very profitable company by windfall profits of additional Rs 50,000 crore...," the petition said. — PTI

RIL files caveat

Mukesh Ambani-run Reliance Industries on Friday filed a caveat in the Supreme Court to ensure it is given a chance to explain itself in a case relating to natural gas supply to Anil Ambani group firm RNRL.

RNRL earlier today moved the apex court seeking modification of the Bombay High Court ruling that suggested firming up gas supply contract through negotiations.

When contacted, an RIL spokesperson confirmed filing the caveat against an ex parte judgment. 

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Increase public spending to prop up economy: Virmani
Bhagyashree Pande
Tribune News Service

New Delhi, July 3
Economics and politics make strange bedfellows. What has been suggested in the Economic Survey of 2008-09 does not necessarily mean will find acceptance with the politicians, because good economics does not always make for good politics, said Chief Economic Adviser Arvind Virmani, while talking to The Tribune.

The survey suggests that reforms should be taken in petroleum, fertiliser and food subsidies to reduce leakages and ensure that all needy get the intended benefit. It further favours decontrolling petrol and diesel prices and to develop a policy response system and financial buffer for use when crude price rises above $80 a barrel.

“The reforms in the oil sector have to be carried out as our import dependence is 75 per cent on oil and all that money is going to a foreign country. So, we have to think of more effective ways of dealing with the use of petroleum products, like for instance, use better pump sets in irrigation so that less diesel is consumed,” said Virmani.

The survey also suggests revitalising the disinvestment programme by selling 5-10 per cent equity in some PSUs so that at least Rs 25,000 crore can be generated in a year.

“This is our suggestion, but the UPA government’s election manifesto has a different approach to disinvestment, so the government has to take steps keeping various political issues in mind,” he said.

“We have suggested that the way to come out of crisis is by taking reforms and not being complacent,” he said.

“We have to take reforms like the way some countries have looked at issues with a pragmatic approach. High growth does not happen on its own, we should not rest on our laurels. Necessary steps like reforms have to be taken to achieve the necessary growth,” Virmani explained.

On the need for fiscal stimulus to prop up the economy, he said, the need for fiscal stimulus is there, but just putting money is not the idea.

“The fiscal deficit issue has to be taken care of in the short term. The spending through various ways has to be done. The growth has suffered because exports and investment demand has gone down. What can be done to offset the international demand is to substitute it by increasing public expenditure by giving stimulus or by reducing taxes so that more money is in the hands of the people. Both or either are going to widen the fiscal deficit. But as a result of these policy actions economy is going to recover,” he said.

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Down, but not out
Satyam still top IT exporter in AP
Suresh Dharur
Tribune News Service

Hyderabad, July 3
Despite facing the worst crisis in the country’s corporate history, Satyam Computer Services has put up creditable performance in software exports and tops the list from Andhra Pradesh for the year 2008-09.

Now renamed as Mahindra Satyam, the company ranked first among the IT exporters from the state, clocking a turnover of Rs 4,231.90 crore, accounting for nearly one-eighth of the total exports from the state.

AP has posted a 24.5 per cent growth in software export revenues during the year, higher than the projected national growth of 20.65 per cent. The total exports stood at Rs 32,509 crore, the Director of Software Technology Parks of India (STPI), Hyderabad, P Venugopal said.

He, however, clarified that the figures were tentative and could change once the process of restatement of accounts was completed. The overall exports figure would change by about five per cent to 10 per cent after the restatement of accounts of Satyam was completed.

Satyam has outperformed IT giants such as Infosys, Wipro and Microsoft, which notched up turnover of Rs 3,094.31 crore, Rs 2,540.90 crore and Rs 1,286.20 crore, respectively. TCS finished fifth in the list. The total software exports from the state during the previous year stood at Rs 26,122 crore.

The year 2008-09 saw 69 new companies, including 60 Indian companies and nine from abroad, being registered as STPI units with projected investment of Rs. 510 crore.

In all, 12,786 new jobs were added taking the direct employment in IT/ITES industry to 2.51 lakh from the previous year’s 2.39 lakh jobs.

The state IT industry has been making conscious efforts to reduce dependence on US markets and focus on other export markets.

The US accounted for 52 per cent of total IT/ITES exports in 2008-09, down from 61 per cent the year before and 69 per cent in 2005-06. The share of Europe has gone up from 20 per cent in 2007-08 to 26 per cent last fiscal. The share of other markets also increased from 15 per cent to 18 per cent while it remained unchanged at 4 per cent for Asia Pacific and the Middle-East. 

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Auto LPG dearer by Rs 2 a litre
Ruchika M. Khanna
Tribune News Service

Chandigarh, July 3
State-run oil marketing companies (OMC) today raised the price of auto LPG by over Rs 2 a litre, two days after raising the petro prices.

Auto LPG in Delhi will cost Rs 26.76 per litre, with effect from today as against Rs 24.37 per litre. In Chandigarh, it will now cost Rs 26.71, up from Rs 24.42 per litre. Across the country, the hike in auto LPG will be around Rs 2.30 per litre, subject to the local taxes.

Though auto LPG was earlier marketed under free market mechanism, the OMCs have introduced a new pricing mechanism it now. They have decided to price auto LPG 40 per cent cheaper than petrol to boost sales.

This free market mechanism for fixing auto LPG prices had led to a sharp decline in sales of this alternate fuel, thus making the marketing companies, IOC, HPCL and BPCL, to devise a new pricing policy for it. The move was initiated because price wise auto LPG was proving less attractive to consumers. “As crude prices started surging, we introduced a new pricing mechanism so as to retain volume growth, even at the cost of sacrificing margins. The new mechanism, however, will be in force till margins are not squeezed below certain minimum level,” a senior IOC official told The Tribune.

According to him, the new pricing mechanism, introduced at the beginning of this fiscal, has already started yielding positive results. The monthly auto LPG sales volume by the three OMCs posted over 25-30 per cent increase as compared to the corresponding period last year.

Officials said that though this surge in sales could be attributed to the increase in number of auto LPG filling stations, but the per pump sales, too, have gone up with more people switching over to LPG vehicles, because of the price difference between petrol and auto LPG, which is around Rs 23 per litre. 

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India Inc on fund raising spree
Mops up Rs 11,714 cr in Q1

New Delhi, July 3
Funds raised by India Inc at home and abroad went up five-fold in the first quarter of the current financial year at Rs 11,714 crore, with more than half of it being mobilised in the last week of June.

In the last week of June, Rs 6,553 crore was raised, which accounted for 56 per cent of the total capital of Rs 11,714 crore mobilised in the first quarter of this financial year, market research firm Prime Database said.

Fund raising through various instruments like rights issues, initial public offers (IPOs) and qualified institutional placements (QIPs) during the first three months of FY'10 rose over five-fold from Rs 2,623 crore in the corresponding period in FY'09, it said.

India Inc's primary market activity also rose on a quarter-on-quarter basis with a Rs 278-crore IPO of Mahindra Holidays & Resorts and a Rs 23-crore follow-on public offer (FPO) of Rishabdev Technocable.

"Most companies have been waiting for a stable or a buoyant secondary market, a pre-requisite for fresh capital raising. There is no paucity of issuers. If the market goes on an upward trajectory post Budget, one can hope for a steady stream of issuances thereafter," Prime Database Chairman and Managing Director Prithvi Haldea said.

With as many as 10 companies raising Rs 11,259 crore through institutional placement in the June quarter, QIPs cornered 96 per cent of the total money mobilised. — PTI

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Service tax collection down 7%

New Delhi, July 3
Service tax collection of the government has taken a beating this fiscal with the amount mopped up on this account falling more than 7 per cent to Rs 5,675 crore in the first month of 2009-10 as compared to the the same period last year.

The service tax collection for the April-May 2009 period is pegged at Rs 5,675 crore as compared to Rs 6,121 crore in the same period last year, the government said in a reply in the Lok Sabha.

The service tax rate was reduced from 12 per cent to 10 per cent as a sop given to sagging economy. The measure was announced in the interim budget as a stimulus to the economy.

The tax collection has also suffered on account of the global financial meltdown which has even hit the indirect tax kitty of the government including the service tax collections. Service tax collection is expected to grow each year with the sector expanding. — PTI

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Maruti unveils new Grand Vitara

New Delhi, July 3
The country's largest carmaker Maruti Suzuki India today launched an advanced version of its sports utility vehicle Grand Vitara, priced at Rs 16.67 lakh-Rs 17.97 lakh (ex-showroom, Delhi).

"Highly popular the world over, the Grand Vitara is one of the global strategic models in Suzuki Range. For all those customers, who are increasingly looking at SUVs, the Grand Vitara 2.4 offers more power and the best in class 4X4 drive at a highly competitive price," Maruti Suzuki India (MSI) Executive Officer (Marketing and Sales) Mayank Pareek said in a statement.

Grand Vitara would come with a 2.4 litre petrol engine in both manual as well as automatic transmission, the company said.

MSI's parent Suzuki has sold over 25 lakh units of Grand Vitara across the worlds since launch, it added. — PTI 

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Nano in Nigeria by 2010

Abuja (Nigeria), July 3
Tata Motors, India's largest auto maker, will introduce its small car Nano--considered the world's cheapest--in Nigeria within next 18 months, ahead of its planned launch in Europe.

The car would be available for about NGN 360 for the base model, same as the price in the Indian markets. The car carries a price tag of Rs 1.23 lakh to Rs 1.72 lakh (ex-showroom) in the Indian capital for three variants.

"Tata Motors will make the Nano available in Nigeria in the next one year to one and a half years," a senior official of Tata Africa Nigeria, Sudeep Ray, said.

"The launching of the Nano was branded everyman behind the wheel and will benefit Nigerians much as public transport systems like metro are not available here.

"The car (Nano) will cost NGN 357,480 (about Rs 1.16 lakh) in Nigeria, which is much less than the price of most second hand saloon cars sold here," Ray said. The cost of an used car usually starts at NGN 500,000 in the country.

Ray, however, declined to give details whether the 'cheapest' car of the world be assembled in Nigeria or it would be sold as a completely-built-unit.

A Tata Motors spokesperson from India said: "The company has said that the Tata Nano can be marketed in other countries, but timelines, modes and countries are yet to be finalised." Earlier in March, Tata Motors had showcased the European version of the Nano, which the company planned to launch by 2011.

Conceived in 2003, Tata Motors had launched the much- hyped 'cheapest' car in India on March 23 this year. The car has cost over Rs 2,000 crore to the company. — PTI

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52 US banks go belly up in '09

New York, July 3
Seven more US banks have been shut down, pushing the total number of failures so far this year to 52 — more than double the collapses in 2008. In signs of the continuing economic turmoil, seven banks were seized by the authorities on July 2, the highest for any month in 2009.

Twenty five banks went belly up in 2008 and many of them failed after the bankruptcy of Lehman Brothers last September.

According to the Federal Deposit Insurance Corporation (FDIC), which is often appointed as the caretaker of failed entities, out of the seven banks, six were based out of Illinois and one was in Texas.

The latest entities to be shut down were John Warner Bank, First State Bank of Winchester, Rock River Bank, ElizabethState Bank, First National Bank of Danville, Millenium State Bank of Texas and Founders Bank, according to the Federal Deposit Insurance Corporation.

Smaller banks are facing the brunt of the financial turmoil as higher unemployment has resulted in increasing defaults. More such entities are expected to collapse in the coming months before the nation's recession-hit economy stabilises. — PTI 

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