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Core sectors grow by 6.5% in June
New Delhi, July 23
Showing signs of improving economic activity, the infrastructure output grew by 6.5 per cent in June. The six infrastructure industries - crude oil, refining, coal, electricity, cement and steel - together grew at an annual rate of 6.5 per cent in June, which is far higher than in May when the core sector grew by 2.8 per cent. The six core sectors grew by 5.1 per cent a year ago in June 2008.

Bonanza for M’rashtra wine cos
VAT reduced from 25% to 4%
Mumbai, July 23
The Maharashtra government has announced a bonanza for wine companies in the state with the cabinet deciding to roll back Value-Added Tax (VAT) to 4 per cent from 25 per cent. The decision to impose VAT to the tune of 25 per cent kicked up a storm since investors in the business had got assurances of tax concessions by the state government.



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A trailer truck driver works at a multi-level parking tower in Tokyo on Thursday. Japan's annual exports slide slowed in June from May, trade data showed on Thursday, suggesting that stimulus spending around the world is propping up global demand.
A trailer truck driver works at a multi-level parking tower in Tokyo on Thursday. Japan's annual exports slide slowed in June from May, trade data showed on Thursday, suggesting that stimulus spending around the world is propping up global demand. — Reuters

Govt: No plan to dilute stake in SBI 
New Delhi, July 23
The government today said it has no proposal to dilute its stake in the State Bank of India through either direct disinvestment or issuing of fresh capital in the market. The government currently has just over 59 per cent stake in the bank which it acquired from the RBI last year.

Corporate Results
Airtel Q1 net up 22 pc
New Delhi, July 23
The country's largest GSM operator, Bharti Airtel, today posted a 24 per cent rise in net profit at Rs 2,517 crore in the April-June 2009, helped by growth in rural customer numbers and foreign currency gains.

Outgoing CEO of German car manufacturer Porsche, Wendelin Wiedeking waves goodbye to the Porsche employees after he gave a farewell statement during an employee meeting at the Porsche headquarters in Stuttgart, on Thursday. Sportscar maker Porsche conceded a months-long power struggle to mass-market rival Volkswagen by axing its CEO and said it would raise at least 5 billion euros ($7.1 billion) in equity as the two prepared for a merger.
Outgoing CEO of German car manufacturer Porsche, Wendelin Wiedeking waves goodbye to the Porsche employees after he gave a farewell statement during an employee meeting at the Porsche headquarters in Stuttgart, on Thursday. Sportscar maker Porsche conceded a months-long power struggle to mass-market rival Volkswagen by axing its CEO and said it would raise at least 5 billion euros ($7.1 billion) in equity as the two prepared for a merger. — Reuters

Satyam Scam
CBI probing ‘hawala’ racket
New Delhi, July 23
After charge-sheeting Ramalinga Raju and others in the multi-crore rupee accounting fraud at Satyam, the CBI is trying to ascertain the role of 'hawala' operators who allegedly brought in crores of rupees from abroad.

Wheat export ban leads to fall in spot prices, futures
Chandigarh, July 23
Ban on export of wheat, poor monsoon and low international prices of the commodity have resulted in a fall in the spot prices and futures trading of wheat. Though there is a good growth in open interest (contracts that have not yet been squared off/ fulfilled by delivery) for wheat, commodity analysts feel that the spot prices and futures trading in the commodity will recover only by the year-end.

Import from China hits Ludhiana bicycle industry
Ludhiana, July 23
The bicycle industry of Ludhiana has been hit hard due to import of cycle parts from China and overall export of the same has also fallen to Rs 600 crore during the last fiscal from Rs 850 crore. Bicycle industry is the backbone of Ludhiana industries and it is because of this reason that Ludhiana is known as ‘Manchester of India’. The global meltdown has also affected the growth of the bicycle industry.






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Core sectors grow by 6.5% in June
Tribune News Service

New Delhi, July 23
Showing signs of improving economic activity, the infrastructure output grew by 6.5 per cent in June. The six infrastructure industries - crude oil, refining, coal, electricity, cement and steel - together grew at an annual rate of 6.5 per cent in June, which is far higher than in May when the core sector grew by 2.8 per cent. The six core sectors grew by 5.1 per cent a year ago in June 2008.

However, the wholesale prices fell for the sixth straight week. Thus, the growth in core sector activity and falling inflation has given rise to expectations from the apex bank, RBI, which is due to revise policy rates on July 28.

On infrastructure front, cement production increased by 12.8 per cent in June against 6.6 per cent a year ago, while coal production rose by 14.7 per cent during the month against 6.1 per cent in June 2008.

Electricity generation grew by 7 per cent in the month under review against a growth rate of 2.6 per cent in June 2008. Crude oil production too registered a rise of 4 per cent in June, while it had dipped by 4.7 per cent in the same month last year.

Production in petroleum refinery products shrank by 3.7 per cent in the third month of the current fiscal compared to 5.6 per cent rise in June 2008.

Finished steel production posted a growth rate of 5.3 per cent in June against 10.4 per cent in the same month last year.

It is expected that the RBI will leave the policy rates untouched in the annual monetary policy that is going be unveiled on Tuesday, say bankers. However, with enough liquidity in the system, the apex bank is likely to pave a way for the government borrowing programme. It is expected that the government will borrow up to Rs 2,41,000 crore in the current quarter.

The inflation rate stood at -1.21 per cent for the previous week ended July 4 as compared to 12.13 per cent during the corresponding week in 2008. The rates of inflation for cereals and pulses eased off marginally on an annual basis by 0.92 basis points and 1.37 percentage points, respectively, to stand at 11.02 per cent and 15.91 per cent on an annual basis.

However, prices of these cereals and pulses continued to rise on a week on week basis and registered 0.2 per cent and 0.3 per cent increase from last week, respectively.

During the week under consideration, prices of vegetables shot up by 4 per cent to 21.83 per cent while fish marine registered the highest increase of 9 per cent.

PTI adds: "In the last three months it (industrial growth) is improving, but we want to ensure that this recovery continues and India returns firmly on the high growth trajectory," said Commerce and Industry Ministry Anand Sharma.

"It is looking good. It is a sign of sluggish recovery.

The signs of stimulus packages can be seen in steel, cement ... consumer durables in particular would also grow and we may see similar trend in IIP (index of industrial production)," Crisil principal economist DK Joshi said.

Sharma said stimulus packages and steps announced in the Budget are having a positive impact on industry. However, he added that growth in the core sector does not mean that India has fully recovered from the impact of the global economic crisis. "... all incentives which we have given will remain in place," he said on the sidelines of a Ficci function.

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Bonanza for M’rashtra wine cos
VAT reduced from 25% to 4%
Shiv Kumar
Tribune News Service

Mumbai, July 23
The Maharashtra government has announced a bonanza for wine companies in the state with the cabinet deciding to roll back Value-Added Tax (VAT) to 4 per cent from 25 per cent.

The decision to impose VAT to the tune of 25 per cent kicked up a storm since investors in the business had got assurances of tax concessions by the state government.

The demand to reduce VAT was backed by Nationalist Congress Party chief Sharad Pawar ahead of a cabinet meeting at Nashik, known as the state's wine country, on Wednesday.

According to sources, the low-tax policy on the state's wine industry would continue for the next 10 years. Apart from low VAT, Maharashtra's wineries enjoy low excise duties as well.

Wineries owned by farmers have been demanding a Rs 250-crore bailout package since the wine industry has taken a beating during the recession.

The Indian Grape Processing Board, an industry body, had stated that the imposition of VAT brought down sales of wine by 60 per cent since 2008. Many small wineries set up in the region of Nashik had threatened to stop buying grapes from farmers in the region if the government did not provide them with concessions.

"The wineries have accumulated a huge stock of unsold wines ever since VAT was imposed," SG Chougule, who heads Indage Wines, said ahead of the cabinet meet yesterday.

Maharashtra, particularly Nashik, is India's wine country with 60 of the 66 wineries in India being located here.

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Govt: No plan to dilute stake in SBI 

New Delhi, July 23
The government today said it has no proposal to dilute its stake in the State Bank of India through either direct disinvestment or issuing of fresh capital in the market. The government currently has just over 59 per cent stake in the bank which it acquired from the RBI last year.

There were speculations in the market about the country's biggest lender seeking the government's nod to tap the market for raising capital for meeting its growth plans. Official sources said the bank has sufficient resources to meet its growth plans and it does not require a fresh injection of funds through equity sale unless it wants to acquire a financial entity.

"There is no proposal at the moment from SBI to raise funds from the capital market which would result in dilution of the government's stake in the bank," the sources said.

In fact, the government can reduce its stake to only 55 per cent in SBI as a Bill to allow it to shed equity up to 51 per cent has lapsed and it is yet to be introduced again in Parliament.

SBI has a capital adequacy ratio 14.25 per cent as of March 2009, against the regulatory requirement of 9 per cent. The SBI share moved up 1.91 per cent at Rs 1,725.90 on the BSE today. — PTI

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Corporate Results
Airtel Q1 net up 22 pc

New Delhi, July 23
The country's largest GSM operator, Bharti Airtel, today posted a 24 per cent rise in net profit at Rs 2,517 crore in the April-June 2009, helped by growth in rural customer numbers and foreign currency gains.

But the company's revenue growth was affected by the drop in mobile termination charge to 10 paise and stiff competition. The consolidated revenue for April-June quarter grew 17.2 per cent year-on-year to Rs 9,942 crore as per US accounting standards. The company joint managing director Akhil Gupta said: "There would be a capex of $2.2 billion during the current fiscal for Airtel's network expansion. The company would take up another $1 billion telecom infrastructure expansion.

Maruti profit accelerates 25 pc

Even after reporting a 25.26 per cent jump in its net profit for the first quarter, the country's largest carmaker, Maruti Suzuki India, today said it is 'cautiously optimistic' for the entire fiscal as a poor monsoon could result in sales slump. The company today posted a net profit of Rs 583.54 crore for the quarter ended June 30, as against Rs 465.85 crore in the April-June period in 2008. Net sales during the first quarter soared 34.01 per cent to Rs 6,340.26 crore from Rs 4,731.03 crore in the year-ago period.

ONGC profit dips 27 pc

PSU major ONGC today reported a 27 per cent drop in its net profit for the first quarter of the current fiscal as it realised lower crude oil price and gave discounts to state refiners.

Net profit in April-June quarter dropped 26.9 per cent to Rs 4,848 crore from Rs 6,636 crore a year ago, company CMD R S Sharma said. Turnover dropped 25.8 per cent to Rs 14,922 crore from Rs 20,123 crore in previous fiscal.

Binani Cement's net up two-fold

Binani Cement has reported a nearly two-fold rise in its net profit for the first quarter ended June 30, 2009, at Rs 106.70 crore over the same period last year.

Net sales of the cement maker also rose to Rs 524.30 crore in the latest quarter from Rs 325.99 crore in the same period last year.

ITC profit Rs 879 cr

FMCG conglomerate ITC Ltd today said its net profit rose by 17.36 per cent to Rs 878.70 crore for the first quarter ended June 30, 2009, over the same period last year. Net income rose to Rs 4,132.92 crore in the latest quarter, against Rs 3,934 crore in the same period last fiscal.

MRPL profit declines 50 pc

Mangalore Refinery and Petrochemicals Ltd (MRPL), a subsidiary of ONGC, today reported a 50 per cent drop in net profit at Rs 420 crore for the April-June quarter on falling refinery margins. Net profit was down from Rs 845 crore in Q1 of 2008-09 fiscal to Rs 420 crore in April-June this year. Turnover dipped 40 per cent to Rs 7,171 crore. — PTI

‘Talks with MTN on’

Bharti Airtel is still in talks with South African telecom giant MTN for a possible merger, a top official said Thursday.

"Talks are going on between Bharti Enterprises, the parent of Bharti Airtel, and South Africa's MTN Group to form a global business combination," Akhil Gupta, managing director of Bharti Enterprises, told reporters. 

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Satyam Scam
CBI probing ‘hawala’ racket

New Delhi, July 23
After charge-sheeting Ramalinga Raju and others in the multi-crore rupee accounting fraud at Satyam, the CBI is trying to ascertain the role of 'hawala' operators who allegedly brought in crores of rupees from abroad.

CBI sources said involvement of hawala operators had surfaced during its probe in Satyam fraud since a lot of money was siphoned off from the company and parked in tax havens.

The same money is alleged to have been brought back into the country through non-banking channels, they said.

The Economic Offences Wing of the CBI is looking into the role of alleged illegal money laundering network with the help of other agencies, including Enforcement Directorate and market regulator Sebi in India, and abroad. — PTI

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Wheat export ban leads to fall in spot prices, futures
Ruchika M. Khanna
Tribune News Service

Chandigarh, July 23
Ban on export of wheat, poor monsoon and low international prices of the commodity have resulted in a fall in the spot prices and futures trading of wheat. Though there is a good growth in open interest (contracts that have not yet been squared off/ fulfilled by delivery) for wheat, commodity analysts feel that the spot prices and futures trading in the commodity will recover only by the year-end.

The government had allowed futures trading in wheat at the commodity exchanges — MCX and NCDEX — after a two and a half year ban, in May this year. Though initially, the two commodity exchanges saw a lot of movement in wheat, the new restrictions on exports have led to a waning interest in the commodity.

Interestingly, though the market sentiment in the commodity had improved earlier in July, when the government lifted two-year-old ban on wheat exports. But 10 days later, the erratic monsoon forced the government to cancel the permission to export nine lakh tonnes of wheat, thus affecting the futures trading in the commodity.

In the past one week, the prices of the commodity have been on the downslide. Ashok Mittal, country head, Karvy Com Trade, informed TNS that there has been a fall in volumes during the past one week. “As compared to 965 lots (of 100 tonnes each) being traded in the first week of July, the volume traded on July 20 has come down to 608 lots,” he said.

Officials in NCDEX, requesting anonymity, informed TNS that the spot price of wheat, after the ban on futures trading was lifted in May was Rs 1,100 per quintal. “This had gone up to Rs 1,150 per quintal, before it fell to Rs 1,050 per quintal, after the ban on wheat exports was reimposed. The drop in spot prices could have been more, but for the huge wheat stocks lying with the government. But we expect a recovery around December and the prices could go up to Rs 1,200,” he said.

However, there is a significant growth in the open interest for wheat. As compared to an open interest of 14,750 tonnes in the beginning of this month, the open interest for August contracts is 17,000 tonnes.

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Import from China hits Ludhiana bicycle industry
K S Chawla

Ludhiana, July 23
The bicycle industry of Ludhiana has been hit hard due to import of cycle parts from China and overall export of the same has also fallen to Rs 600 crore during the last fiscal from Rs 850 crore. Bicycle industry is the backbone of Ludhiana industries and it is because of this reason that Ludhiana is known as ‘Manchester of India’. The global meltdown has also affected the growth of the bicycle industry.

A random survey of the industry reveals that Ludhiana has about 6,000 units, which daily manufacture 50,000 to 60,000 bicycles and the same also accounts for Rs 10 crore worth business. Besides, cycle parts worth Rs 15 crore are manufactured daily by this industry. 

As a matter of fact, out of about 1.15 crore bicycles manufactured in India, 90 per cent are produced in Ludhiana alone. This sector provides direct employment to about six lakh persons. About 3,000 units are engaged in cycle trade in this city and another 1,000 units are working as cottage industry. 

Hero Cycles has the distinction of producing largest number of bicycles in the world and this record has not been broken for the past more than 25 years now.

Avtar Singh, general secretary, Chamber of Commercial and Industrial Undertakings told The Tribune today that bicycle industry has worked to overcome the challenge and keep pace with the growing industrial and consumer sectors. But for the past four years since the steep rise in steel prices, the bicycle industry has received the major setback. 

Last year, the steel prices spiked 55 per cent with little margin of about 5 per cent in bicycle industry as a result of which 25 per cent have closed down their business. The crisis was further precipitated with cheaper import of the bicycles from China. The import from China in 2007 was worth Rs 400 crore which used to be just Rs 50 crore. A number of bicycle manufacturers have opened their offices in China and are making direct export to various countries from there. Some of the companies have closed their offices in Ludhiana, he said.

The major export markets for bicycles and cycle parts manufacturers are Gulf countries, Latin America and Africa. For the past more than six months, the demand from these countries has declined sharply. Avtar Singh has called upon the Union Government to immediately ban the import of bicycles and cycle parts from China and anti-dumping duty should be imposed on the same.

He further impressed upon the Central Government to give a stimulus to the bicycle industry on the pattern of TUF (Technological Upgradation Fund) as given to the textile industry and 5 per cent interest reimbursement of the normal interest charged by leading banks on rupee term loan. In a letter to the Prime Minister and Commerce and Industry Minister, he has sought regulatory mechanism to control steel prices, at least on quarterly basis on the patron of petro prices.

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BRIEFLY

SAP to acquire SAF for $100 m
New Delhi:
Global IT firm SAP on Thursday said it is looking to acquire Switzerland-based software developer SAF AG for around $100 million. "We are in the process of acquiring SAF AG. We are currently in talks and have gone for public bidding. The size of the acquisition is around $100 million," SAP Indian Subcontinent managing director Ranjan Das said. — PTI

Tatas, Fiat to introduce Nano in Latin America
Milan/New Delhi:
Tatas are planning to introduce its small car Nano in Latin America in partnership with Italian auto maker Fiat. Tata Group chairman Ratan Tata in an interview to Italian newspaper 'La Stampa' said both Tata Motors and Fiat are discussing plans to bring Nano into Latin America. Ratan Tata, who is also an independent director at Fiat, said the two companies are also talking about many things, including plans for Iveco, Ferrari and Maserati.— PTI

Dadiseth is Sony India chief
New Delhi:
Japanese electronics giant Sony Corporation on Thursday announced the appointment of Keki B Dadiseth as chairman of the board of Sony India Pvt Ltd and senior adviser to the group. In his new role, Dadiseth will provide leadership to enhance the company's presence in the country and give strategic advice and support to the Sony Group in India, Sony Corporation said. — PTI

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