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THE TRIBUNE SPECIALS
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Monetary Policy Today
RBI revises growth forecast to 6.5 pc

Mumbai, July 27
The Reserve Bank of India in its economic survey ahead of tomorrow's credit policy review has revised upwards its GDP forecast for the economy during the current year to 6.5 per cent from 5.7 per cent. In its report, the apex bank noted that increased capital spending and higher capital inflows would spur the economy during Financial Year 2009-10.

Punjab Infotech in for makeover
Chandigarh, July 27
In yet another effort to revive the sagging Information Technology (IT) investment in Punjab, the government today decided to give Punjab Infotech a major makeover.

Tata Motors’ profit jumps 57 pc
Tata Motors vice-chairman Ravi Kant speaks during a news conference in Mumbai on Monday.Mumbai, July 27
Tata Motors today said its April- June standalone net profit jumped 57.54 per cent to Rs 513.76 crore riding on cost-rationalisation measures and a fall in input prices, although it sold fewer vehicles than it did a year ago.

Tata Motors vice-chairman Ravi Kant speaks during a news conference in Mumbai on Monday. — Reuters



EARLIER STORIES




Bollywood actor Kareena Kapoor at a function organised by Gitanjali group, announcing her as their brand ambassador, in Mumbai on Monday.
Bollywood actor Kareena Kapoor at a function organised by Gitanjali group, announcing her as their brand ambassador, in Mumbai on Monday. — PTI

3G Services
Lukewarm response to state-run telcos
New Delhi, July 27
Poor response received by the two state-run telecom companies from its consumers for subscribing to the 3G spectrum has forced BSNL and the MTNL to look at alternate measures to boost the subscriber base for this high-end service being presently provided in the country exclusively by them.

No relief for Lodha camp; Birla Corp AGM put off
New Delhi, July 27
The Birla-Lodha issue on control of the MP Birla Estate took a dramatic turn today as the AGM of Birla Corporation was postponed till August 24 after the Supreme Court refused to give relief to Harsh Vardhan Lodha, who wanted to chair the meeting.

GAIL to pump in Rs 8,000 cr
New Delhi, July 27
Gas utility GAIL India Ltd today said it will invest Rs 8,000 crore for laying three new gas pipelines by 2012. GAIL will lay the pipelines to connect gas sources to consumers in North India, who till now have no access to the environment friendly fuel, company Chairman and Managing Director U D Choubey told reporters here.

Punjab to raise Rs 500 crore
Chandigarh, July 27
Three state governments, including Punjab, will be raising funds to the tune of Rs 2,000 crore by selling off their 10-year state development loans (SDL), through a yield-based auction, using multiple price auction method, on July 29.

Ericsson to buy Nortel’s wireless biz for $1.13 bn
Toronto, July 27
Ericsson is all set to acquire a major part of Nortel's North American wireless business for $1.13 billion, after the Swedish firm emerged as the successful bidder for the bankrupt Canadian company's CDMA and LTE technologies.

Power crisis hits foundry industry
Production down by 50-60 per cent
Ludhiana, July 27
The fastener and foundry industry in Punjab is in a limping condition today. Thanks to the worsening power situation in the state, production has gone down by 50-60 per cent. Though in 2008, the industries virtually came to a standstill due to global meltdown, with untiring efforts by industrialists there was slow but gradual improvement. The present power situation has crumbled both these industries in the state.





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Monetary Policy Today
RBI revises growth forecast to 6.5 pc
Shiv Kumar
Tribune News Service

Mumbai, July 27
The Reserve Bank of India in its economic survey ahead of tomorrow's credit policy review has revised upwards its GDP forecast for the economy during the current year to 6.5 per cent from 5.7 per cent. In its report, the apex bank noted that increased capital spending and higher capital inflows would spur the economy during Financial Year 2009-10.

"At 6.7 per cent, GDP growth for 2008-09, however, was better than what most had expected, though it reflected a deceleration in relation to the average 8.8 per cent rate recorded during the high growth phase of 2003-04 to 2007-08," RBI said.

However, the apex bank warned that delayed monsoon and continued weakness in export growth would be major risks. The RBI also warned that the government would have to curb deficit. It also warned of inflationary pressures on the economy in the coming quarters.

The RBI also warned that the global economic situation continued to be worrying. "The global economic environment continues to remain uncertain, although the rate of contraction in economic activities and the extent of pressures on financial systems eased in the first quarter of 2009-10," RBI said.

Quoting the IMF, the RBI said the global economy is projected to grow 1.4 per cent in 2009 and expand by 2.5 per cent next year.

Going forward, the RBI warned that the slow progress of the monsoons appear to be worrying.

The apex bank also reported growth in the infrastructure sector. "The core infrastructure sector grew by 4.8 per cent during the first quarter of 2009-10 as compared with 3.5 per cent growth during the corresponding quarter of the previous year, led by growth in electricity, cement and coal. The cement sector recorded acceleration, indicating revival of construction activity," RBI said.

The survey also reported a marginal improvement in the growth of the Index of Industrial Production (IIP) which grew 1.9 per cent in April-May 2009 as against a deceleration of 0.1 per cent in the last quarter of 2008-09. Among the positive indicators stated by the RBI include growth in railway freight and new cell phone connections. Other signs of growth included rise in tourist arrivals.

Other danger signals highlighted in the survey include higher revenue deficit and gross fiscal deficit in the revised estimates for 2008-09 significantly higher than the budgeted levels.

Fall in inflows

The survey said net capital flows fell from $108.0 billion the year before to US$ 9.1 billion in 2008-09, while the current account deficit widened from 1.5 per cent of GDP to 2.6 per cent of GDP during the same period. The impact of a severe external shock on India’s BoP was managed with a loss of reserves of only $20.1 billion (net of valuation) without resorting to any extraordinary measures.

However on a positive note, the survey pointed out to indications suggesting revival in capital flows to India during first quarter of 2009-10, after the net outflows in successive two quarters in the second half of 2008-09.

The apex bank's Industrial Outlook Survey conducted in April-May 2009 also indicates a turnaround in the business sentiment, RBI said.

Apex bank likely to maintain status quo

Mumbai: The RBI is unlikely to tinker with key policy rates in its first quarterly review of the annual credit policy on Tuesday, as either a reduction or increase in rates would disturb the optimum level of liquidity in the economy.

Although food prices are on the higher side, inflation has been in the negative terrain since June on base effect and is not likely to influence the central bank's decision on rates.

RBI in its annual policy announced in April had slashed short-term lending (repo) and borrowing (reverse repo) rates by 25 basis points each with a view to easing money supply.— PTI

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Punjab Infotech in for makeover
Chitleen K Sethi
Tribune News Service

Chandigarh, July 27
In yet another effort to revive the sagging Information Technology (IT) investment in Punjab, the government today decided to give Punjab Infotech a major makeover.

At a meeting of a task group for investor relations chaired by Chief Secretary SC Agrawal today, it was decided to hard sell the state with new vigour and go all out to bring investors to Punjab.

It has been decided to “re-brand” Punjab Infotech. Oligvy and Mather have been asked to prepare its new logo, web site and market collaterals like brochures and audiovisual films. It was also decided that the state government would conduct “road shows” in other states on Punjab IT.

The Chief Secretary was told that an IT investors guide had been prepared by Punjab Infotech. A master presentation showcasing the strengths of the state to be used for umbrella branding by various government departments is also being prepared. A collaboration with NASSCOM is also on the cards for improving investor relations.

Punjab Infotech would also start a single-window clearance mechanism for investors to deal with the issues like land, electricity, water and other clearances.

A group of officers, led by Industries Minister Manoranjan Kalia, would visit Mumbai and Pune to attract potential investors, sources said, adding that the last such trip in November, 2008, to Delhi, Hyderabad and Bangalore had not yielded any substantial results.

Punjab Infotech is also preparing a quarterly weekly “IT Connect”, which will showcase the developments in the state for investors in the last quarter on infrastructure, human resource policy, etc.

Punjab Infotech is starting the “visitor of the month” programme wherein a key representative from renowned IT firms and associations would be invited to the state every month and shown the state’s potential.

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Tata Motors’ profit jumps 57 pc

Mumbai, July 27
Tata Motors today said its April- June standalone net profit jumped 57.54 per cent to Rs 513.76 crore riding on cost-rationalisation measures and a fall in input prices, although it sold fewer vehicles than it did a year ago.

The country's largest automobile maker's total income from operations, however, fell 7.56 per cent to Rs 6,404.63 crore in the first quarter, the company said in a statement.

"The company's continued focus on cost efficiencies, coupled with reduction of raw material prices, inventory reduction and improvement in sales realisation, yielded considerable benefits," Tata Motors said.

The total vehicle sales in the quarter stood at 1,27,340 units as against 1,33,079 units in the year-ago period, a dip of 4.31 per cent.

NTPC net rises 27 pc

State-run power utility NTPC today reported a growth of 27 per cent in its net profit for the first quarter ended June 30 to Rs 2,193.62 crore, over the corresponding period a year earlier.

Net sales of the public sector major also rose to Rs 12,002.68 crore in the latest quarter of the current financial year from Rs 9,539.47 crore of the same quarter last year, NPTC said.

Dabur net up 29 pc

Bouyed by good growth of hair and skin care categories, FMCG major Dabur today reported a 29.35 per cent jump in its consolidated net profit to Rs 91.39 crore in the first quarter ended June 30, 2009 as compared to the same period last fiscal.

The company’s consolidated net sales in the first quarter increased by 22.9 per cent to Rs 742.66 crore, as against Rs 603.98 crore in the same quarter last fiscal.

MRF net zooms 4-folds

Tyre maker MRF today reported a near four-folds jump in net profit for the quarter ended June 30 to Rs 125.70 crore, over the corresponding period a year earlier, following which its shares surged over 16 per cent on the Bombay Stock Exchange (BSE).

Net sales also rose to Rs 1,433.55 crore in the latest quarter of the current financial year from Rs 1,273.06 crore of the same quarter last year, MRF said. The company has announced an interim dividend of Rs 3 per share to its shareholders.

Zydus Cadila profit rises

Pharma major Zydus Cadila today reported a growth of 39 per cent in its consolidated net profit for the first quarter ended June 30 to Rs 124.79 crore, over the same period a year earlier. Consolidated total income of the company also rose to Rs 907.76 crore during the April-June period of this fiscal from Rs 715.62 crore of the same period last year. — PTI

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3G Services
Lukewarm response to state-run telcos
Girja Shankar Kaura
Tribune News Service

New Delhi, July 27
Poor response received by the two state-run telecom companies from its consumers for subscribing to the 3G spectrum has forced BSNL and the MTNL to look at alternate measures to boost the subscriber base for this high-end service being presently provided in the country exclusively by them.

With the process for the auction of the 3G spectrum for the private operators being on the hold for more than seven months now, the two state-owned telecos, were expected to attract consumers for this next generation service that provides high-speed data transfer, high-speed Internet and video conferencing besides whole lot of other features. However, the response which the two have received for this advanced service has not been satisfactory.

As a result, while the MTNL has already invited bids from global telcos to run its 3G operations in Delhi and Mumbai on a franchisee basis for a 10-year period, BSNL is looking at raising the number of its 3G service subscribers to one lakh within two months following which it may also follow suit to the other state-owned operator.

Industry watchers point out that the difficulty being faced by the two state-run telcos in attracting consumers for the 3G service, despite getting such a big headstart, was as a result of most high-end users being with the private telecom operators.

While the two PSUs do have huge consumer bases, but in that the number of high-end users, who would prefer to subscribe to the 3G spectrum services was not very big. Even in the states, where BSNL has an edge over the private telecom operators, the irony is that the high-end users remain with the latter.

As a result, despite attractive schemes being offered by the two and aggressive advertisement campaigns, the high-end users have as of now chosen to stay with their private telecom service providers, waiting and watching for them to roll out the 3G services.

Even after launching 3G services in Delhi nearly six months ago, MTNL has less than 1,000 customers on this technology platform. On the other hand, BSNL has managed to muster a subscriber base of just 10,000 in its first six months of offering the 3G services.

According to reports, MTNL is looking at entering into a revenue- sharing agreement with a successful bidder. However, the successful franchisee would have to give an undertaking that it will not take telecom licences in Delhi and Mumbai during this period.

EGoM meet on 3G spectrum put off

The curse on the 3G spectrum auction for the private players seems to continue with the Empowered Group of Ministers (EGoM), constituted to decide on its pricing, postponing its meeting scheduled for later in the month.

Apparently, the non-availability of Defence Minister AK Antony, who is also a member of the EGoM, has led to the postponement of the meeting scheduled for July 31.

The auction process has been delayed several times since January, when it was scheduled to happen and this is the second time that the EGoM has been formed on the issue.

The EGoM was constituted on July 13 to look into matters relating to pricing spectrum and the number of operators to be allowed in each telecom circle.

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No relief for Lodha camp; Birla Corp AGM put off

New Delhi, July 27
The Birla-Lodha issue on control of the MP Birla Estate took a dramatic turn today as the AGM of Birla Corporation was postponed till August 24 after the Supreme Court refused to give relief to Harsh Vardhan Lodha, who wanted to chair the meeting.

Harsh Vardhan Lodha had moved the Calcutta High Court challenging the Company Law Board interim order that did not allow him to chair the AGM of Birla Corporation. But the High Court judge had refused to hear the matter on personal grounds.

Harsh Vardhan Lodha's father R S Lodha had staked claim to controlling Birla Corporation, citing the purported will of the late Priyamvada Birla, wife of MP Birla, of 1999.

A Bench headed by Justice S H Kapadia, while disposing of both the petitions filed by Harsh and Birla Corporation Ltd, refused to stay the AGM, saying it would not like to interfere when the AGM had commenced since morning today. While chairing the AGM in Kolkata, Director Pracheta Majumdar announced that in view of the CLB order, and the subsequent Supreme Court ruling today, the meeting is postponed till August 24. — PTI 

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GAIL to pump in Rs 8,000 cr

New Delhi, July 27
Gas utility GAIL India Ltd today said it will invest Rs 8,000 crore for laying three new gas pipelines by 2012. GAIL will lay the pipelines to connect gas sources to consumers in North India, who till now have no access to the environment friendly fuel, company Chairman and Managing Director U D Choubey told reporters here.

"The company board at its meeting in Shimla on July 25 approved investment in the three pipeline projects totaling 2,400 km in length and are scheduled for completion in 2012," Choubey said.

After the three pipelines, besides the ones on which construction is already on, would more than double GAIL's pipeline network to 14,400 km. The pipelines would have a capacity to transport 280 million standard cubic metres of gas per day.

GAIL will lay 2,050-km pipeline from Jagdishpur in Uttar Pradesh to Haldia in West Bengal at an investment of Rs 7,595 crore, Choubey said. The project would also involve laying separate spur lines to Baurani and Chappra. GAIL will also invest Rs 250 crore in laying a 275 km Karanpur-Moradabad-Kashipur-Rudrapur pipeline.

Besides, the existing Bajera-Agra-Ferozabad pipeline would be upgraded at an investment of Rs 200 crore, he said. — PTI 

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Punjab to raise Rs 500 crore
Ruchika M. Khanna
Tribune News Service

Chandigarh, July 27
Three state governments, including Punjab, will be raising funds to the tune of Rs 2,000 crore by selling off their 10-year state development loans (SDL), through a yield-based auction, using multiple price auction method, on July 29.

This is the third time during this fiscal that the cash-strapped Punjab government will be selling off its state development loan. During the forthcoming auction, Punjab has floated a loan of Rs 500 crore. In April, the state government had raised Rs 143.05 crore and again raised Rs 500 crore in June. With the state all set to implement the recommendations of the Fifth Pay Commission from this month onwards, Punjab has been raising funds by auctioning its state development loans.

Haryana, too, had managed to raise Rs 1,500 crore through auction of its state development loan in February this year. It had again raised another Rs 700 crore in June.

Other than Punjab, the Karnataka government will be auctioning its SDL to raise Rs 1,000 crore, while the Rajasthan government will be selling its SDL for Rs 500 crore. The auction will be conducted by RBI at Mumbai on July 29, and results will be declared on the same day. RBI will determine the maximum yield at which the bids will be accepted.

The successful bidders will have to make the payments on July 30 itself at Mumbai and at the respective regional offices of RBI. The government stocks will bear interest at the rates determined by RBI at the auctions. Interests will be paid on a half-yearly basis (on Januray 30 and July 30).

Official sources in RBI informed TNS that the SDLs are auctioned by various state governments to raise money for their development activities. Generally, banks bid for these loans. All banks are supposed to invest a certain prescribed percentage of their funds in government securities. Since this investment in government stocks is reckoned as an eligible investment in government securities by banks for the purpose of Statutory Liquidity Ratio (SLR), banks participate in these auctions. These stocks also qualify for ready forward facility.

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Ericsson to buy Nortel’s wireless biz for $1.13 bn

Toronto, July 27
Ericsson is all set to acquire a major part of Nortel's North American wireless business for $1.13 billion, after the Swedish firm emerged as the successful bidder for the bankrupt Canadian company's CDMA and LTE technologies.

The purchase is structured as an asset sale at a cash purchase price of $1.13 billion on a cash and debt free basis, the two companies said in separate statements.

The acquisition significantly expands Ericsson's footprint in North America and also provides Nortel's customers with a strong and reliable supplier for the future, many of which have expressed support for this acquisition.

“Acquiring Nortel's North American CDMA business allows us to serve this important region better as we build relationships for the future migration to LTE," Ericsson president and CEO Carl-Henric Svanberg said.

Svanberg further said: “By adding some 2,500 highly skilled employees, of which about 400 are focused on LTE research and development, Ericsson reinforces and expands a long-term commitment to North America.” On July 25, Ericsson entered into an asset purchase agreement to acquire the parts of the Carrier Networks division of Nortel relating to CDMA and LTE technology in North America. — PTI

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Power crisis hits foundry industry
Production down by 50-60 per cent
Shivani Bhakoo
Tribune News Service

Ludhiana, July 27
The fastener and foundry industry in Punjab is in a limping condition today. Thanks to the worsening power situation in the state, production has gone down by 50-60 per cent. Though in 2008, the industries virtually came to a standstill due to global meltdown, with untiring efforts by industrialists there was slow but gradual improvement. The present power situation has crumbled both these industries in the state.

According to Narinder Bhamra from the Fastener Manufacturer Association of India, due to interrupted and erratic power-supply in the state the fasteners had to bear huge losses. Their productions had drastically come down to 50-60 per cent. Due to late deliveries, they were being slapped late delivery charges (LDC) by companies and government establishments to the tune of 0.05 per cent per week.

"We are unable to meet the orders as there have been two weekly offs when there is no power. In supply chain management grading system, adopted by major players that is based on three major factors- price, quality and delivery, we get poor grades due to late deliveries. Despite our best efforts, we have not been able to convince state government in this regard,” rued Bhamra.

There are about 1,000 fastener units in Ludhiana alone. Other that there, units are being run in Mandi Gobindgarh, Jalandhar and Mohali. The annual turnover of the industry in domestic market alone is about Rs 1,200 crore and exports worth Rs 500 crore gets matured each year.

Sandeep Garg, president of Mould Manufacturers' Association, Punjab, said business was in a miserable condition due to regular power cuts. He said demand and production had gone down by about 50 per cent whereas prices of raw material, including pig iron and coal, had gone up drastically and had to be brought- in at higher rates from other states. "Corrective measures must be taken by the present government to improve power situation in Punjab or there will be closure of several industrial units,” he said.

Yashpal Gossain, president of the Ludhiana Foundry Cluster (comprising Mould Manufacturer Association, Ludhiana Foundry and Small Industry and Ludhiana Foundry Owner Association) said they were helpless in bringing any positive changes trade in the absence of electricity. He said unless the government improved the power situation, there were bleak chances for survival of foundries and furnaces.

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BRIEFLY

RIL-Niko invest $5.98 bn in KG-D6
New Delhi:
Reliance Industries and its Canadian partner Niko Resources have invested $5.98 billion in the oil and gas fields in the Krishna Godavari basin block D6, Petroleum Minister Murli Deora said on Monday. RIL-Niko plan to invest $8.8 billion to develop the Dhirubhai-1 and 3 gas fields, first two of the 18 oil and gas discoveries made in the block KG-DWN-98/3 or KG-D6.— PTI

FDI inflows up 13 pc in April-May
Mumbai:
Foreign Direct Investment in the country has seen 13 per cent increase at $4.2 billion in April-May against the previous two months led by recovery in the global financial markets, a top government official said on Monday. "FDI inflows were higher in April and May (first two months of FY10) at $4.2 billion. In February-March, inflows were about $3.7 billion," Secretary to Department of Industrial Policy & Promotion (DIPP) Ajay Shankar told reporters. — PTI

Financial closure for Butibori project
Mumbai
: Reliance Power on Monday announced financial closure for its 300 MW power project at Butibori near Nagpur in Maharashtra. The project will be financed on a debt-equity ratio of 80:20 with debt component of over Rs 1,500 crore. "R Power received commitments for loans from banks much in excess of the total requirement," it said. — PTI

BGR Energy bags orders worth $80.5 m
Mumbai:
BGR Energy Systems on Monday said it has bagged an order worth $80.5 million from State Company for Oil Projects, Iraq for development of two gas fields. The company has received the contract in the international competitive bidding process.— PTI

Auto conference in Nov
New Delhi
: India will host an international conference on automobile sector aimed at promoting environment friendly vehicles here in November. The prestigious conference, the Environmentally Friendly Vehicle (EFV) will be organised for the first time in a developing country. — PTI

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