Economy 1

Economy: April 2010
India plans ‘Sovereign Fund' to seek energy assets abroad
• In an indication of India turning aggressive in its hunt for energy assets

abroad, the government is drawing up ambitious plans to set up a ‘Sovereign
Fund' that would help its state-run companies pursue acquisition of oil, gas,
coal, LNG and other raw material in other countries in order to compete with
China.
• Oil and Natural Gas Corporation Videsh Limited (OVL) had been told to
pursue at least one major oil and gas asset every year.
• China, with $2.4 trillion of reserves and a $300-billion sovereign fund, has
outpaced India in the global quest for resources to feed the world's fastest-
growing major economies. Chinese companies spent a record $32 billion last
year buying oil, coal and metal assets abroad, while a $2.1-billion investment by
OVL was India's sole energy acquisition. OVL last year bought Imperial Energy
Plc for £1.4 billion ($2.1 billion) in India's biggest energy acquisition.
Ericsson gets $1.3 b contract from Bharti
• Bharti Airtel awarded a $1.3-billion network expansion contract to Ericsson

that would help the mobile operator to deliver enhanced voice quality and faster
data access to its subscribers.
Ericsson will expand and upgrade Airtel's network in 15 of India's 22 telecom
circles to put in place a converged network and expanded coverage in rural
India.
• As part of this contract, Ericsson will supply its industry-leading portfolio of

energy efficient 2G/2.5G radio base stations, circuit and packet core, microwave
transmission and Intelligent Network.
In addition, Ericsson will ensure that Bharti Airtel's core and transport network
is 3G-ready in order to reduce time to market and enable the fast rollout of 3G
services at a later date.
India Infra to invest in Karaikal Port
• Karaikal Port Private Ltd (KPPL), a wholly-owned subsidiary of Marg, an

infrastructure and real estate development company, has finalised its fund
raising plans for its second phase of expansion.
• It is a deep-water port at Karaikal district of Puducherry. It is to be developed

over three phases with the final phase getting operational by 2016. Phase-I of
the development, which is now operational comprises two berths. Phase-II now
under implementation involves a capital expenditure of Rs. 1,500 crore and will
become operational by September 2011.
• India Infrastructure Fund (IIF), which is managed by IDFC Project Equity

Company Limited, will be investing Rs. 150 crore into the equity capital of KPPL
towards Phase-II expansion.
L&T partners Rolls-Royce for LWR
• Larsen & Toubro Limited (L&T) and Rolls-Royce, the global power
systems company, have signed a memorandum of understanding (MoU) for
cooperation to effectively address the projected need for light water reactors
(LWR) in India and internationally.
LWR technology is in use in over 60 per cent of civil nuclear power plants
operating worldwide.
• The two companies have agreed to collaborate on areas including nuclear

instrumentation and controls, engineered products and systems, reactor
components, engineering services, in-service reactor support and waste
management.
Textile industries park to be opened soon
• A comprehensive textile industries park being developed under the Textile

Centre Infrastructure Development Scheme (TCIDS) of the Union
government by Kerala Industrial Infrastructure Development Corporation
(Kinfra) is ready for opening at Taliparamba.
BoB life insurance venture to break-even by 2015
• State-owned Bank of Baroda (BoB) said that its insurance venture India First
Life Insurance that became operational four months ago would break-even by
2015.
• India First Life Insurance, the 23rd player in the life insurance space, is a
three-way joint venture between Bank of Baroda, Andhra Bank and their
British partner Legal & General.
Dhanlaxmi Bank launches credit cards
• Dhanlaxmi Bank, one of the fast growing private sector banks in India, has
announced its foray into retail assets business with the launch of its credit cards
business by introducing Dhanlaxmi Bank Platinum and Gold Credit Cards.
Targeted at its premium customers, both categories of cards offer a host of
innovative features and benefits.
• Dhanlaxmi Bank, for the first time in India is introducing a ‘pay by

transaction' billing mode for credit cards.
Under the programme, instead of a monthly billing cycle, the interest-free credit
period is considered for individual transactions from the day of purchase.
The customer thus enjoys a 45-day interest-free credit period on each purchase
and does not need to time the purchase based on the billing cycle. This feature
also gives the customers the flexibility to decide their own re-payment cycles.
Heartening rebound in world trade
• The World Trade Organization, in a recent report, has said that global trade is
set to rebound in 2010 by 9.5 per cent, after witnessing the sharpest decline in
70 years during 2009.
• Exports from developed countries are expected to increase by 7.5 per cent in
volume terms over the rest of the year (2010). Exports from the rest of the
world (including developing economies) will go up by 11 per cent.
SAR Group to enter mobile handset market
• After having set up strong pan-India marketing and sales network, SAR Group
that manufactures Luminous brand of power and energy storage products is all
set to enter the mobile handset market next month as a new entity, Wynn
Telecom.
ONGC gets CER from UN Agency
• ONGC has taken another stride towards earning green revenue with issuance
of first set of certified emission reduction (CER) from its first registered
CDM (clean development mechanism) project, waste heat recovery project
at Mumbai High.
According to a release, the UN Agency UNFC & CC (UNFCCC) issued the CERs
on March 18. With this, the deck is clear for ONGC to earn revenue from CDM
projects.
Godrej to acquire Megasari of Indonesia
• Godrej Consumer Products Ltd (GCPL) entered into an agreement to

acquire the PT Megasari Makmur Group and its distribution company in
Indonesia for an undisclosed amount.
• The Megasari Group manufactures and distributes a wide range of household

products including household insecticides, wet tissues and air fresheners. Its
products are category leaders in the Indonesian market.
NPCIL-NTPC to build two nuclear plants
• Nuclear Power Corporation of India Limited (NPCIL) and NTPC joint

venture is likely to build two 700 MWe nuclear power plants at a site identified
by the Department of Atomic Energy (DAE).
• Under the agreement, the joint venture will have 51:49 shareholding
between NPCIL and NTPC.
• NPCIL plans to build indigenously developed pressurised heavy water

reactors (PHWRS) of 700 MW capacity each at four locations across the
country.
While two plants each are expected to come up at Rawat Bhata in Rajasthan
and Kakrapar in Gujarat, plans are afoot to finalise sites in Haryana and
Madhya Pradesh for atomic power plants.
Ruchi Group to form venture with Mitsui of Japan
• Ruchi Group signed an agreement with Japanese conglomerate Mitsui to

form a joint venture for setting up steel service centres across the country to
cater to automotive, white goods and construction sector.
Renault-Nissan, Daimler in small-car alliance
• Carmakers Renault SA, Nissan Motor Co. and Daimler AG unveiled a wide-
ranging alliance to help them compete better in the market for small, fuel-
efficient vehicles.
• The partnership comes amid a painful industry-wide slump and will be sealed
with a cross-shareholding giving the three companies small, symbolic stakes in
each other.
• The heads of Renault and Daimler estimated that they would achieve euro 2
billion ($2.7 billion) in cost savings and additional sales from the new alliance
over the first five years.
• Renault and Nissan will each take on a 1.55 per cent stake in Daimler, which in
turn will take a 3.1 per cent stake in each of the other two. The move will add to
Renault and Nissan's existing 11-year-old alliance that has made it the world's
fourth largest automotive group with sales of 6.1 million vehicles last year.
Indian, Russian cos to jointly bid for Sakhalin-III oil fields
• India has decided to join hands with major Russian oil and gas companies to
jointly bid for the prosperous Sakhalin-III oil fields.
• India had already demanded Russia that it should be given a stake in Sakhalin-
III project in Far East Russia and gas fields in East Siberia and Yamal Peninsula
during talks with Mr. Putin.
• Gazprom owns licences for at least eight of the 11 gas fields discovered on
the Yamal Peninsula. OVL already has 20 per cent stake in Sakhalin-I project
and is keen on an agreement with Russia's Rosneft to jointly bid for Sakhalin-III.
• OVL is also looking at Trebs and Titov exploration blocks for which an alliance
with Rosneft is being looked at. ONGC Chairman and Managing Director R. S.
Sharma had stated that his company was in talks with Rosneft, Gazprom and
Sistema for exploration and production possibilities.
Emami plans power plant in Ethiopia
• The Emami Group, which has already marked its footprint in Ethiopia with a
biofuel project, is now planning to invest between Rs. 1,000 crore and Rs.
1,500 crore for setting up a 300 MW power plant, Director Aditya Agarwal said.
Cabinet approval for big ticket disinvestment in SAIL
• The Union Cabinet approved the big ticket disinvestment in Steel Authority of
India Ltd. (SAIL) to mop up about Rs.16,000 crore by selling its equity and
issuing fresh shares to the public.
• SAIL will be first state-owned company to hit the capital market this fiscal as
part of the government's ambitious disinvestment programme to raise the
targeted Rs.40,000 crore.
• As part of the proposal,which was approved by the Cabinet Committee on
Economic Affairs (CCEA), SAIL will raise an additional 10 per cent of the paid-
up equity and the government, on its part, will disinvest 10 per cent of its
holding.
• “The net result will be, after both tranches are completed, the government's
shareholding will be about 69 per cent. Public shareholding will be 31 per cent,''
Mr. Chidambaram said. As of now, public shareholding in SAIL is 14.2 per cent.
• SAIL is now undertaking a Rs.70,000-crore expansion programme to raise its

installed production capacity from 13.82 million tonnes to 23.46 million tonnes
annually.
• The disinvestment is in line with the government policy, sharing ownership of

CPSEs with the public, while also raising funds to finance its different social
programmes.
RIL to buy 40 % interest in Atlas Energy's Shale acreage
• Reliance Industries Limited (RIL) said that its subsidiary, Reliance Marcellus
LLC, has executed definitive agreements to enter into a joint venture with U.S.-
based Atlas Energy,Pittsburgh, Pennsylvania, under which Reliance will acquire a
40 per cent interest in Atlas' core Marcellus Shale acreage position.
Jet Airways to start daily flights to South Africa
• Jet Airways announced that it would commence daily non-stop flights from
Mumbai to Johannesburg, South Africa, from April 14. This new international
route marks the first time that Jet is adding destinations to Africa on its
international route network. In fact, the Jet service will be the first by a private
airline between India and South Africa. Only South African Airways offers four
flights weekly between India and South Africa.
BGR, Orissa Govt sign pact
• BGR Energy Systems has signed a memorandum of understanding (MoU) with

the Orissa Government for setting up a 1,320 MW (2 x 660) power plant at
Bhapur in Nayagarh district, Orissa, at an investment of about Rs. 6,287 crore.
• The Orissa Government is entitled to purchase 12-14 per cent of power

generated from the plant at variable cost as determined by the Orissa Electricity
Regulatory Commission.
BGR Energy Special Purpose Company would be free to sell the remaining
power.
Singapore to host CommunicAsia
• CommunicAsia2010, the most established information, communication and

technology (ICT) event in Asia, will be held in Singapore from June 15 to 18 at
the Singapore Expo. The event brings comprehensive showcase of convergent
technologies for the global infocomm, media and broadcasting industries and will
feature new attractions for exhibitors and visitors from the region, says a
release.
Four PSUs pitch for Maharatna status
• Four major public sector undertaking (PSU) companies — Indian Oil

Corporation (IOC), NTPC, Steel Authority of India Limited (SAIL) and Oil
and Natural Gas Corporation (ONGC) — are aiming for the ‘Maharatna'
status paving way for their financial and boardroom freedom.
• The Union Cabinet had last year set out a criteria for seeking this status.
• Senior officials from the Department of Expenditure, Department of Public

Enterprises, Planning Commission as well as the administrative ministries are
represented on the IMC.
• Officials said the Maharatna status would provide enhanced financial autonomy
for PSUs for taking decisions relating to investments in joint venture companies
and mergers and acquisitions.
• NTPC and SAIL are hunting for captive coal blocks in foreign lands.
• At present, ONGC's investment in any OVL project cannot exceed Rs. 1,000
crore but could stand enhanced to Rs. 5,000 crore if it acquires the Maharatna
status.
GAIL in talks with EIL for city gas distribution
• GAIL (India) said that it had entered into talks with Engineers India Ltd (EIL)
to set up a joint venture to sell CNG to automobiles and piped natural gas (PNG)
to households in cities.
Sany Group opens first plant in India
• China-based Sany Group, a global major in the construction machinery

industry, inaugurated its first manufacturing facility in India at Chakan
near(PUNE).
• The group first entered India in 2003 and has since been involved in the supply
of construction machinery to infrastructure projects including the Adani power
plant, Mumbai International Airport expansion, the Delhi Metro project and the
Indira Gandhi International Airport Project.
Reliance World introduces robotics camp
• Reliance World, in association with robo.in, a division of ThinkLABS, announced

the launch of Robocamp, a summer camp that aims to introduce school students
in classes IV-XII to robotics.
The first phase of this camp will be launched in Chennai on April 19 at Reliance
World stores in Kilpauk and Parrys, and will continue till April 24, says a release.
ADB pegs GDP growth at 8.2 % in 2010
• The Asian Development Bank (ADB) projected the Indian economy to grow by
8.2 per cent during 2010 even as rising prices would remain a concern and pose
a challenge to policy-makers.
• In its flagship annual publication ‘Asian Development Outlook 2010', the ADB
said:
“India's rebound from the global crisis is set to accelerate in 2010, with
estimated growth of 8.2 per cent, although rising price pressures present a
challenge to policy-makers as they steer the economy's recovery.”
NTPC plans plant in Bangladesh
• NTPC will examine the feasibility of setting up a coal based power plant in
Bangladesh as part of the enhanced bilateral cooperation between the two
countries.
• The possibility of setting up the plant which could be in the region of 500-
1,000 MW.
Under the initial plan, power generated from the plant will be evacuated to India
through a transmission network to be developed by the Power Grid Corporation
of India Ltd. (PGCIL).
• NTPC and the Bangladesh Power Development Board will jointly develop the
project.
• At present, Bangladesh has a power generation capacity of 5,000 MW, of which

83 per cent is gas-based.
Coal India selects merchant bankers to acquire overseas assets
• Bank of America-Merill Lynch, Royal Bank of Scotland and Bank of Canada are
the three merchant banks selected for helping the public sector Coal India Ltd
(CIL) which is currently taking efforts to seal strategic partnership deals with
coal companies in three countries — Australia, Indonesia and the U.S. — for
augmenting India's coal supplies.
• An investment of about $1.8 billion is expected to be made in these deals

which may involve the world's single largest coal company, CIL, picking up
shares in the overseas companies against assured supplies of coal, the official
said. While Bank of America- Merill Lynch (and its Indian arm DSP Merill Lynch)
will help with the Australian proposals, Bank of Canada will help conduct due
diligence and evaluation of the proposals from the U.S. and Royal Bank of
Scotland will help with Indonesia.
SEBI moves apex court over ULIP

• In the face of the Insurance Regulatory and Development Authority's (IRDA)
decision of moving court to challenge a ban on unit linked insurance products
(ULIPs) imposed by it, the Securities and Exchange Board of India (SEBI) moved
the Supreme Court and some high courts to guard against any ex-parte decision.
• The caveat comes a day after the government asked both regulators — SEBI
and the IRDA — to move court immediately to resolve differences over who will
have jurisdiction over ULIPs.
• On April 10, SEBI had banned 14 life insurance companies.
• Later on April 14, SEBI came out with a second order that the exempted
existing ULIP schemes of these 14 players from the ban.
Renault sells stake to M&M in the joint venture
• Mahindra and Renault announced the restructuring plans for their 51:49 joint
venture — Mahindra Renault Pvt. Ltd. (MRPL) — through which the Logan car is
manufactured.
• The joint venture was established in 2005 and the Logan is manufactured at
Mahindra's plant in Nashik and sold through more than 100 Mahindra dealers. It
was commercially launched in India in July 2007 and has sold more than 44,000
units.
RIL to invest in Deccan 360
• Reliance Industries Ltd (RIL) announced that the company would be investing
an undisclosed amount in Capt. G.R. Gopinath-led Deccan 360.
• This investment would help Deccan 360 increase the air and surface network
coverage across the country and introduce world-class services and systems to
express end-to-end supply chain logistics space in business-to-business and the
retail sector, said Capt. Gopinath
Kingfisher launches new international routes
• Kingfisher Airlines has launched flights from Mumbai to Bangkok and from New
Delhi to Bangkok. These new routes mark the fourth international route out of
Mumbai and third out of New Delhi. The flights on these routes will be operated
using Kingfisher Airlines' modern fleet of Airbus A320 aircraft featuring a dual-
class cabin with five-star luxury on Kingfisher First and Kingfisher Class, the
premium economy service, says a release.
Mahindra Retail launches Mom & Me store
• Mahindra Retail has launched the Mom & Me store in Chennai. Mom and Me
has developed private labels in order to bring products like ethnic fashion for
women, infant apparel and traditional Indian toys. Mom & Me has stores at
Delhi, Mumbai, Pune, Ahmedabad, Ludhiana, Bangalore, Chandigarh and
Vadodara.
NTPC plans two plants in Kazakhstan

• NTPC announced that it was exploring the possibility of setting up two coal-
based thermal power plants in Kazakhstan and looking at acquisition of coal
assets abroad.
• Kazakhstan, which is a coal rich country, is seeking India's support for
harnessing its dry fuel reserves. Kazakhstan has huge coal reserves, about 33
billion tonnes.
• NTPC was looking at various options of sourcing the dry fuel, including global
coal block acquisition, and has identified countries like Indonesia, Australia,
Mozambique and South Africa for the purpose.
• The company has appointed Australian firm Macquarie as consultant for the
evaluation of Kalimantu coal mines in Indonesia.
• It has also appointed merchant bankers and legal consultants for the due
diligence of a mine in Mozambique.
• NTPC's total coal requirement for the current financial year (2010-11) is about
145-150 million tonnes, of which the company is planning to import 14 million
tonnes.
Rangarajan to head panel on public expenditure
• The Planning Commission announced the setting up of an 18-member expert

committee headed by Prime Minister's Economic Advisory Council Chairman C.
Rangarajan to recommend measures for efficient management of public
expenditure.
• Among its terms of reference, the main brief of the high-level committee is to
suggest an action plan for abolition of the present system of classifying public
expenditure as Plan and non-Plan. This will include detailing of the changes in
the mandate of the various organisational units in the government that deal with
allocation of public resources and the management of public expenditure.
Jaypee's huge outlay on Ganga Expressway project
• The Jaypee Group of Industries announced that it would invest Rs. 70,000
crore in the next five years to build the ambitious 1,047 km long Noida-Ballia
Ganga Expressway project. It also said that the Yamuna Expressway project
would be completed two years ahead of schedule by March 2011.
NTPC-NPCIL sign JV agreement
• Nuclear Power Corporation of India Limited (NPCIL) and NTPC entered into a
joint venture agreement (JVA) to set up nuclear power projects.
• The agreement was signed by S. K. Jain, Chairman and Managing Director,

NPCIL, and R. S. Sharma, Chairman and Managing Director, NTPC.
• NPCIL has comprehensive capability in all facets of nuclear power generation

technology, namely, site selection, design, construction, commissioning,
operation, maintenance and life extension and has plans for significant capacity
addition.
• NTPC, the largest power generation company, with an installed capacity of

31,704 MW has established itself in the field of development of thermal power
projects and has proven track record in engineering, contracts, project
management and power generation and intends to enlarge the area of its
operation by making a foray into nuclear power development.
Economy & Energy: May 2010
ICICI Bank, HDFC Bank not Indian-owned: Centre
• The Central Government said ICICI Bank and HDFC Bank could not be called
Indian-owned banks, setting at rest the debate generated over the nationality of
the top two private sector lenders.
• ICICI Bank had maintained that it continued to be an Indian bank as its

management and board was Indian.
• However, ICICI Bank and HDFC Bank have over 74 per cent foreign holding,
including that of foreign banks and overseas institutional investors.
• Going by the definition, they were certainly banks which were not owned by
Indians, because equity of at least 74 per cent or around 74 per cent was from
outside.
NTPC-BHEL joint venture targets Rs. 7,000 crore orders
• NTPC-BHEL Power Projects Ltd. (NBPPL) signed an agreement with its equal
joint venture partners NTPC and BHEL to meet the target of order bookings
worth Rs.7,000-crore in the current financial year. NBPPL has been jointly set up
by NTPC and BHEL for capacity building in manufacturing of power plant
equipment.
• This signing of MoU was a major initiative taken to ensure fast track growth of
NBPPL by providing greater functional autonomy and empowerment in achieving
the laid down objectives of the company. It would also help the joint venture
partners in achieving financial objectives set in the MoU for the various
parameters, an official statement said. The MoU was signed by NTPC Chairman
R. S. Sharma, BHEL Chairman and Managing Director B. P. Rao and NBPPL
Chairman and Managing Director C. P. Singh.
• NBPPL will be setting up manufacturing facilities in Andhra Pradesh. It has

already taken up EPC work for Namrup gas-based project of 100 MW in Assam
and Palatana gas-based project of 726 MW in Tripura. will also take up execution
of 500 MW Singrauli thermal power plant and 600 MW thermal power plant at
Rayalseema of Andhra Pradesh Power Generation Corporation Ltd.
SEBI issues norms for credit rating agencies
• The Securities and Exchange Board of India (SEBI) has issued transparency
and disclosure norms for credit rating agencies (CRAs) order to impart higher
credibility to the processes and procedures associated with credit rating.
• The CRAs were asked to take necessary steps to implement this circular
immediately and ensure its full compliance at the latest by June 30.
• The half-yearly disclosures, stipulated by the regulator, would be made by the

CRAs within days from the end of the half-year (March/September). The yearly
disclosures stipulated would be made by the CRAs within 30 days from the end
of the financial year. However for 2009-10 only, the half yearly and yearly
disclosures stipulated would be made by the CRAs by June 30.
Greece woes only tip of the iceberg
• After weeks of foot-dragging, mutual contradiction and confusion, a clear plan

emerged ,and members of the European Union agreed to a euro 110-billion
package to stave off Greek bankruptcy.
• The package has been decided upon jointly by the EU and the International
Monetary Fund and the European body will be coughing up 80 billion of the 110
billion-deal, with the rest coming from the IMF.
Videocon barred from doing business with World Bank
• Accusing Venugopal Dhoot-led Videocon of indulging in fraud and corrupt

practices in dealings with it, the World Bank has blacklisted the Indian company
for three years, ending January 11, 2013.
• Videocon Industries has been barred from doing any business with the World
Bank for violating “procurement guidelines”, for three years, beginning January
11, 2010, a notification on the Bank's website said. The World Bank had taken a
similar tough line with Satyam Computer months before the IT company's
founder chairman confessed to an accounting fraud.
• The Videocon group is a conglomerate with interests in consumer electronics,

home appliances, oil & gas, telecom and media, among others.
• The list of debarred entities from India include two Kolkata-based firms B R &
Sons and Hemant Tibrewal, and three Delhi-based entities — Om Prakash Jindal,
Upasana Jindal and SM Scientific Instruments Pvt. Ltd.
• These five entities were debarred by the World Bank in January this year and
the sanctions would be in place for three years till January 2013.
• In January 2009, the World Bank disclosed that it had banned three Indian
firms — Satyam Computer Services, Wipro Technologies and Megasoft
Consultants — from receiving direct contracts from the Bank group under its
corporate procurement programme.
Focus turns to energy efficiency
• Stating that rapid economic growth and industrialisation were the major
challenges that need to be met head on, Union Power Minister Sushilkumar
Shinde said power generation capacity addition during the XI Plan would be
about 74,000 MW, almost close to the original target of 78,577 MW.
• “With best efforts, we would add about 12,000-13,000 MW power generation

capacity over the likely addition of 62,000 MW in the current Five-Year Plan. This
would be at 74,000 MW near to the original target of electricity generation
capacity of 78,577 MW,” Mr. Shinde said at the ‘National campaign for energy
efficiency and conservation' organised by Federation of Indian Chambers of
Commerce and Industry (FICCI).
• In its mid-term review, the Planning Commission had reduced power

generation capacity addition target by over 20 per cent to 62,374 MW for the
current Plan period from the original 78,577 MW. The Plan panel had stated that
“It is anticipated that additional power generation capacity of 45,234 MW can be
commissioned during the remaining period of the XI Plan, noting that 19,207
MW of capacity was added till December 31, 2009,” he added.
• During the X Plan, 21,080 MW was added against the target of 41,000 MW.
• The Minister said “the CDM (clean development mechanism) executive board
has approved our ‘Bachat Lamp Yojana' under which incandescent bulbs are
replaced by energy-efficient CFLs at a cost of Rs. 15 only.” The CDM is an
international organisation for approval of carbon credit projects under the United
Nations Framework Convention on Climate Change. The replacement of all
incandescent bulbs in the country is expected to result in a saving of 6,000 MW
of power.
• The Power Minister said the Government had put in place an overarching legal,
regulatory and policy framework to promote market-based energy efficiency.
Essar Energy begins formal trading on London Stock Exchange
• The shares of Essar Energy Plc, a part of the diversified Essar Group, began
formally trading on the London Stock Exchange, after its 1.3-billion pound public
offer, the biggest since December 2007.
• Essar Energy Chairman Ravi Ruia, Vice-Chairman Prashant Ruia and LSE
Chairman Chris Gibson-Smith, among others, were present at the opening
trading ceremony.
Verdict can impact ADAG's power plans

• With the Supreme Court delivering its much awaited verdict on the gas dispute
between the Ambani brothers, the 2-1 verdict against the younger sibling, Anil
Ambani, could have an adverse impact on the outcome of its power projects,
including the 7,000 MW plus Dadri power project in Uttar Pradesh.
• The Dadri project, hanging fire for years now, will now most likely have to buy
gas at the government approved price of $4.20 per mBtu (million British thermal
unit) as and when the Government makes any such allocation. The verdict has
also rendered Reliance Natural Resources Limited (RNRL) as a shell company as
it at present has little or no projects in hand.
• The Mukesh Ambani-owned Reliance Industries Limited (RIL) hinted that it

might sell gas from its KG-D6 fields to RNRL at $4.20 per mBtu.
• It also said that the tenure of gas supply would have to be drastically cut from
17 years as being sought by RNRL. This could have an impact on the long-term
cost analysis on the power generation plans of its gas-based projects, which are
estimated at 8,000 MW, and projections by the ADAG would have to be re-drawn
and re-done in the changed circumstances.
• There will be no impact of this verdict on its Ultra Mega Power Projects as they
are all coalbased units and already half-way through with their implementation.
• The Supreme Court ruled that the Ambani family MoU could not over-ride the
Government's right to fix price and approve utilisation of gas and had asked the
two firms to renegotiate fuel supply.
• In the 2005 family MoU, RIL was to supply 28 million standard cubic meters
per day (mscmd) of gas to RNRL for 17 years at $2.34 per mBtu. The gas was
sought by RNRL to fire its proposed 7,800 MW power plant in Dadri, Uttar
Pradesh.
Set up loan guarantee authority for education loans'
• The Planning Commission has suggested that the Human Resource

Development Ministry examine the option of setting up a loan guarantee
authority as a separate division within the purview of the proposed National
Education Finance Corporation (NEFC).
• The proposed NEFC aims at refinancing student education loans and

institutional loans at concessional rates with longer repayment, which will help
expansion and new investments in the higher education sector, particularly
universities.
• The NEFC will use the educational cess released by the government, which is
free of cost and also borrows from the market, so that the average cost of funds
advanced as loans is lower than the rate at which it lends to banks. This
differential rate will be the NEFC's margin or profit.
Euro zone crisis: a global problem?

• The Greek debt crisis is spilling over to some other European countries such as
Portugal, Spain and Ireland. There is a sense of foreboding that what started as
a major fiscal problem of Greece will not only morph into an European problem
(bad enough, as it will be) but also become a global problem.
• The Greek crisis has been in the making for at least six months. As powerful
euro zone members led by Germany dithered over a rescue package, the crisis
worsened. A 110-billion euro ($147 billion) bailout package announced jointly by
the IMF and the euro zone countries may not be enough and in any case may
have come too late in the day to effectively contain the crisis within Greece or at
the most in a few other European countries.
• Greece accounts for just 2.6 per cent of the euro-zone's GDP. Yet from its
travails some messages relevant to other countries can be gleamed. Its
problems are primarily due to its perilous economy.
• It has a budget deficit of 13.6 per cent and debt equal to 115 per cent of GDP.
At this stage it can neither loosen its fiscal policy nor spend its way out of
trouble or export.
Indian oil firms on Chavez list
• Venezuelan President Hugo Chavez said his government will sign agreements
with foreign oil companies, including from India, that will lead to $40 billion in
investments in oil projects.
• The companies involved recently won bidding to exploit the areas Carabobo 1
and 3 in the crude-rich Orinoco River basin in eastern Venezuela.
• The government granted operating licences in February to Spain's Repsol;

Malaysia's Petronas;Oil and Natural Gas Corp (ONGC), Oil India Ltd (OIL) and
Indian Petroleum Corp (IPCL);U.S.-based Chevron Corp; Venezuelan company
Suelopetrol, and Japan's Mitsubishi, Inpex Corp and Japan Oil, Gas and Metals
National Corp JOGMEC.
• The companies will be involved in joint companies controlled by the state oil
company, Petroleos de Venezuela SA.
India, Singapore to double trade
• Seeking to put the trade relations between the two countries on a fast track,
India and Singapore decided to double their trade in the next five years from
$16 billion to $32 billion.
• India also asked Singapore to recognise its professionals, such as doctors,

nurses, accountants and architects in Singapore. Both the countries also
launched the second review of the India-Singapore free trade and services
agreement officially known as the Comprehensive Economic Cooperation
Agreement (CECA).
• India also signed a pact with Singapore for greater market access for its
generic (off-patent) drugs in the Southeast Asian nation. The two countries also
set new targets for their economic engagement in terms of further removing
trade barriers and encouraging the flow of people from one country to the other.
• Both contries agreed to work towards doubling bilateral trade from $16 billion
to $32 billion by 2015.
Automatic route allowed for IFCs
• To increase fund flow into the resource-starved core sector, the Reserve Bank
of India allowed infrastructure finance companies (IFCs) to raise money from
overseas markets through the automatic route.
• Created as a new category under the non-banking finance companies a few

months back, IFCs can now raise external commercial borrowings (ECBs) up to
50 per cent of their owned funds automatically.
• The apex bank said, however, ECBs beyond the half the size of their funds
would require its approval.
• Under the present ECB norms, funds can be raised in overseas markets at a
maximum rate of global benchmark interest rate , LIBOR (London Inter-Bank
Offered Rate), plus 200 basis points if the loan is for three years, up to 300 basis
points if the debt is up to five years and 500 basis points if it is above five years.
India, Venezuela ink pact to develop $20-billion oil project
• In a big-ticket investment aimed at giving a boost to its holding of oil and gas
assets abroad, the Oil and Natural Gas Corporation Videsh Limited (OVL), along
with its partners, entered into an agreement with the Venezuelan government to
develop a $20-billion oil project in that country.
• The project is expected to give India 3.6 million tonnes of crude a year. OVL
and its partners signed the agreement with Petroleos de Venezuela SA (PdV) for
development and production of hydrocarbons from the Carabobo project in the
Orinoco region.
• Spain's Repsol-YPF SA, Petroliam Nasional Bhd (Petronas) of Malaysia and OVL
each hold a 11 per cent stake in the consortium that will produce 400,000
barrels of oil a day. IOC and OilIndia Limited will each have 3.5 per cent interest
in the joint venture to develop the Carabobo 1 Norte and Carabobo 1 Centro
blocks, located in the Orino Heavy Oil Belt. CorporacionVenezolana del Petroleo,
a unit of PdV, will hold the remaining equity. About half of the production from
the joint venture, called PetroCarabobo SA, will be upgraded light crude oil for
export.
• The project cost has been pegged at $15–20 billion.
SunEdison, Azure to develop solar project
• North America's largest solar energy services provider SunEdison announced

its entry into the Indian market with the joint development of a 15-MW
photovoltaic solar power plant in Gujarat in collaboration with domestic
independent solar power producer Azure Power. Power generation will begin by
January 2011, says a release.
• As part of the arrangement, SunEdison will participate in financing of the

project and knowledge transfer of global technology expertise to Azure Power. It
will also supply state-ofthe-art monitoring technologies to Azure for projects up
to 25 MW.
• “The Gujarat project is the latest example of SunEdison's focus on enabling the
growth of global solar markets through strong capabilities in project financing,
system design and engineering, low-cost procurement, operations, and
maintenance services,'' SunEdison Energy India Pvt. Ltd. CEO Pashupathy
Gopalan said.
RIL, Russian firm sign MoU on butyl rubber production
• Reliance Industries Limited (RIL) and SIBUR, Russia's leading petrochemical

company, have signed a Memorandum of Understanding (MoU) to set up a joint
venture in India to produce butyl rubber.
• As per the agreement, butyl rubber will be produced at Reliance's integrated

petrochemical site in Jamnagar.
• SIBUR operates across the entire petrochemical value chain, from gas
processing to production of monomers and plastics, synthetic rubbers, mineral
fertilizers, tyres and industrial rubber goods, as well as the processing of
plastics.
• Gazprombank Group is the principle shareholder of SIBUR Holding JSC and

owns more than 95 per cent of the company. SIBUR Holding JSC is managed by
SIBUR LLC, which acts as the holding company's sole executive body.
IT, energy sectors can propel exports to $1 trillion by 2020
• The Federation of Indian Export Organisations (FIEO) said that IT and energy
sectors had the potential to take Indian exports to $1,000 billion or 5 per cent of
the global trade by 2020.
• However, the federation said a concerted strategy needs to be devised by the

Government to meet the challenge.
• The Union Commerce and Industry Ministry aims to take exports to $1,000
billion in the next 10 years from the present $177 billion, FIEO President A.
Sakthivel said.
• India's exports in 2009-10 were estimated at $177 billion.
• IT and IT-enabled exports could increase to $250 billion by 2020. “The growth
will come from new verticals such as healthcare, media and utilities,” he said.
• By 2020, the pharmaceutical market is anticipated to more than double to $1.3
trillion, with the E7 — Brazil, China, India, Indonesia, Mexico, Russia and Turkey
— accounting for one-fifth of the global pharmaceutical sales.
Bank of Rajasthan to merge with ICICI Bank
• Bank of Rajasthan, one of the oldest private sector banks in the country,
announced that it would merge with the largest private sector bank, ICICI Bank.
• Bank of Rajasthan is a listed bank with its corporate office in Mumbai and
registered office at Udaipur in Rajasthan.
SBI Mutual launches PSU fund
• SBI Funds, the joint venture between State Bank of India, and Societe
Generale Asset Management (France), announced the launch of its PSU Fund, an
open-ended equity scheme, which will invest in stocks of the PSU companies.
The new fund offer opens on May 17 and would close on June 14, 2010. The net
asset value (NAV) would be disclosed on every business day.
Jindal Steel buys Omani firm
• In a strategic move aimed at extending the presence of the company overseas,

Naveen Jindalowned Jindal Steel and Power Limited (JSPL) announced the
acquisition of Oman-based Shadeed Iron and Steel Co for $464 million.
• JSPL, through its 100 per cent subsidiary Jindal Steel and Power (Mauritius)
Ltd has decided to acquire Shadeed Iron & Steel Co (Shadeed), it said. “A
definitive share purchase agreement (SPA) and other transaction documents
have been signed at $464 million, including the assumption of liabilities,” it
added.
Abbott buys Piramal's formulations business
• Piramal Healthcare entered into a definitive agreement with Abbot Laboratories

of Illinois, U.S., to sell its domestic formulations business (also referred to as
healthcare solutions business) for a total cash consideration of $3.72 billion
(around Rs.17,500 crore).
• Abbot will pay $2.12 billion on closing of the sale in the second half of 2010
and a further $400 million in each of the subsequent four years after the closing
of the transaction, commencing in 2011.
Hindujas to acquire European bank
• The Hinduja Group, a diversified global business conglomerate, announced that

it would acquire European private bank KBL epb for euro 1.35 billion ( about
Rs.8,770 crore).
• KBL epb, a subsidiary of Belgium-based KBC Group, is one of the largest
onshore private banking groups with affiliated local banks in 55 locations across
ten European countries.
• As part of the deal, the Hinduja Group will acquire KBC's entire interest in the
subsidiary including all the private banking subsidiaries and life insurance
businesses. KBL epb had assets under management of euro 47 billion. The
closing of the transaction is subject to regulatory approvals and is expected to
be completed in the third quarter of 2010, a joint statement said.
Maharatna status for 4 PSUs
• Paving the way for more financial autonomy and freedom in decision making
for big ticket investments in India and abroad, the Central Government has
granted ‘Maharatna' status to four giant public sector undertakings (PSUs) —
NTPC, Oil and Natural Gas Corporation (ONGC), Indian Oil Corporation (IOC) and
Steel Authority of India Limited (SAIL).
• However, while all four blue chip PSUs have been given the new status, only
NTPC would be able to exercise it as it has the requisite number of non-official
directors on its board.
Alstom makes foray into solar energy
• Global leader in equipment and services for power generation, Asltom,

announced joining hands with BrightSource Energy Inc. with an investment of
$55 million to enter the highgrowth solar energy market.
• The company announced investing up to $55 million in BrightSource Energy

with an equity stake that positions Alstom as one of the main shareholders in the
company. This operation takes place as part of a capital increase of $150 million
organised by BrightSource.
• This privately-owned company is a specialist in designing, building and

operating tower based solar thermal power plants with operations in the U.S.,
Israel and Australia.
• BrightSource's technology employs thousands of mirrors to reflect sunlight

onto a central receiver atop a tower to produce high temperature steam at the
highest levels of solar efficiency.
The steam is then piped to a steam turbine and generator which produce
electricity.
BrightSource has contracts for a total of 2,600 MW with PG&E and Southern
California Edison
— California's two largest utilities. To meet this demand, the company intends to
build 14 solar power plants in the U.S. southwest by 2016.
EU seizure of Indian drugs improper: WHO
• India's complaint against the European Union on the unjust seizure of cheap
generic drug consignments meant for Latin America and African nations has
received a boost, with the World Health Organisation terming such action
“misuse of rules” against counterfeit medicines.
• In a statement issued in Geneva, the WHO rapped the EU for seizing the
Indian generic drugs in transit for patent violation.
• India and Brazil have asked the EU and the Netherlands to enter into dispute
settlement consultations over the alleged violation of global rules.
• The two countries raised the issue in 2008 also when Dutch customs
authorities detained Indian generic drugs at the behest of leading Western
pharmaceutical giants.
• Under the WHO dispute settlement provisions, the EU will have to enter into
consultations with India and Brazil as a first step and amicably resolve the issue
within two months. If they fail to reach an agreement through Article 4
consultations, the two countries can call for the establishment of a dispute
settlement panel to adjudicate the alleged violations of trade rules by
Brussels.
GSM operators move TDSAT
• Three leading mobile operators have pre-empted a policy change by

approaching the Telecom Disputes Settlement and Appellate Tribunal (TDSAT)
against the Telecom Regulatory Authority of India's (TRAI) recommendations on
2G spectrum, including a one-time fee for holding radio waves beyond 6.2 Mhz.
• The operators who have approached the telecom tribunal are: Bharti Airtel,
Vodafone and Idea.
• The trio have been voicing their criticism of TRAI's recommendations and have
asked the government to dump the report, which according to them is
“retrograde” and “absurd”. The GSM operators are also critical of capping the
spectrum at 8 MHz in all circles except Delhi and Mumbai where the limit is 10
MHz, as they think it will restrict future growth prospects.
Oriental Insurance in pact with PNB
• Oriental Insurance Company (OICL) and Punjab National Bank launched ‘PNB-
oriental Royal Mediclaim Policy', exclusively for the bank customers.
Ballmer sees big role for India in ‘cloud services'
• Microsoft Corporation said India would play an important role in its overall
cloud services strategy.
• Many IT firms, including NIIT, Cognizant and CDC Software, besides

Bangalore-based Indian Institute of Science (IISc), would be creating solutions
and train manpower based on its cloud computing platform,
• Cloud computing refers to Internet-based computing where applications and

software are accessed over the Internet, resulting results in reduced IT costs.
Today, Microsoft's cloud infrastructure supports over 100-crore customers and
two-crore businesses globally.
• According to the study, the global cloud computing market is expected to cross
$70 billion by 2015. As a result of the growing demand for independent software
vendors, developers and system integrators, additional three-lakh jobs related to
cloud services are estimated to be created in India over the next five years.
Essar to acquire Avaya stake in AGC Networks
• The Essar Group and Avaya, a global leader in enterprise communications

systems, software and services, said they had entered into a definitive
agreement under which the Essar Group would acquire Avaya's entire 59.13 per
cent stake in BSE and NSE-listed AGC Networks (earlier Avaya Global Connect)
for $44.5 million, or Rs.206.19 crore, at Rs.245 a share subject to customary
Indian regulatory requirements and completion of the mandatory open offer.
Economy and Energy: June 2010

Nano rolls out of Sanand plant
• Nano, claimed to be the world's smallest and cheapest car, rolled out of the
assembly line at its
new plant at Sanand, near Ahmedabad, raising the hopes of the lower and
middle class families
in the country of fulfilling the dream of owning a four-wheeler.
• The Sanand plant set up at a cost of about Rs. 2,000 crore, would have the
capacity to produce
2.50 lakh cars per annum to be achieved in phases and was expandable up to
3.50 lakh cars a
year.
South Africa seeks $10 billion bilateral trade by 2012
• Visiting South Africa President Jacob Zuma sought a quantum jump in bilateral
trade to $10
billion by 2012 between his country and India.
• Bilateral trade, valued at $1.3 billion in 2000-01, crossed the $7-billion mark in
2008-09, while
investments in 2008-09 were pegged at $9 billion.
• Addressing the launch of the India-South Africa CEOs Forum, he said India was
South Africa's
largest trading partner in South and Southeast Asia and among the top ten
partners globally.
Wipro targets $100 million from China’s new hydraulics plant
• Wipro Infrastructure Engineering, the information technology giant’s hydraulics
arm, will in six
months launch one of Indian industry’s most ambitious attempts to tap China’s
fast-growing
motor vehicle market, when the gates open at its sprawling new $ 5.7 million
facility in
southern China.
• The company this week formally announced a deal with the local government
in Changzhou to
set up a manufacturing plant to make hydraulic cylinders to cater to the
domestic truck market,
during President Pratibha Patil’s recent visit to Shanghai.
25 % public holding mandatory for listing on bourses
• In a significant step aimed at attracting a larger number of investors and
checking manipulation
in share prices, the Central Government made it mandatory for companies listed
on stock
exchanges to raise public shareholding to 25 per cent over a five-year period by
diluting at least
five per cent each year.
• In line with Finance Minister Pranab Mukherjee's budgetary promise of
ensuring larger floating
stocks of all listed entities, a Finance Ministry statement said the relevant
regulations stand
amended to the effect that “the minimum threshold level of public holding will be
25 per cent
for all listed companies.”
• Under the new norms notified by the Finance Ministry, market analysts expect
about 180
companies, including 35 public sector undertakings (PSUs), to enter the market
for adhering to
the 25 per cent public holding guidelines. In all, there are more than 4,500
companies listed on
the bourses.
India opposed to EU plan on taxing banks
• India has opposed levying any tax on banks to mop up funds for managing
financial turmoils
and organising bailouts in future, the likes of which were put in place by some of
the developed
economies in the wake of the global financial crisis.
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• At a meeting with Presidential Committee Chairman (for the G-20 meeting) Il
Sakong at Busan
(South Korea), Finance Minister Pranab Mukherjee made it clear that instead of a
tax on banks,
India would prefer a regulatory mechanism as was in operation in the country.
• With Australia and Canada also opposing the bank tax proposal which was put
forward by the
European Union and supported by the U.S. and the U.K., the G-20 meeting of
finance ministers
is unlikely to arrive at a consensus on this contentious issue.
• The differences over the bank tax proposal have cropped up because the
fallout of the global
turmoil did not impact the financial systems of India, Australia and Canada in the
same way as
it did in the U.S. and some of the EU countries.
• With many of the European economies saddled with huge public debt owing to
increased public
spending during the crisis years of 2008 and 2009, the levy on banks is aimed at
sparing
taxpayers from chipping in for bailouts in future.
India-SACU to conclude PTA soon: Sharma
• Union Commerce and Industry Minister Anand Sharma said that talks for inking
the
Preferential Trade Agreement (PTA) between India and South African Customs
Union (SACU)
were in the advanced stage and a pact on the issue would be concluded soon.
• The major items of exports to South Africa are petroleum, drugs,
pharmaceuticals and fine
chemicals, transport equipment, electronic goods and machinery. The major
items of imports
from South Africa are gold, coal, coke, inorganic chemicals, non-ferrous metals,
pulp and waste
paper.
Finance Ministry sets up technology advisory group
• The Finance Ministry set up a seven-member committee headed byUIDAI
Chairman Nandan
Nilekani to advise the government on a host of IT initiatives in various areas
such as income
tax, the new pension system and the proposed GST (Goods and Services Tax).
• Announcing the setting up of the Technology Advisory Group for Unique
Projects (TAGUP), an
official statement said that the group has been given a timeframe of six months
to submit its
report and make recommendations on the roadmap to roll out five projects – tax
information
network (TIN), the new pension system (NPS), the National Treasury
Management Agency
(NTMA), the expenditure information network (EIN) and GST.
India and Australia to work jointly in energy sector
• India expressed its willingness to work jointly with Australia in energy,
minerals and power
generation sectors including tie-up for gas supply for new plants to be set up by
both countries
in India.
• India now had the fifth largest electricity generation capacity in the world and
the world's third
largest transmission and distribution network.
Andhra Bank ties up with UAE Exchange
• Andhra Bank announced that it had tied up with the United Arab Emirates
Exchange Centre at
Kuwait in an arrangement under which the bank's customers, NRIs there, can
remit amounts
that will be credited to account holders in India the same day.
Bharti completes acquisition
• In the largest-ever telecom takeover by an Indian firm, Bharti Airtel completed
a deal to buy out
Kuwa
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Tweak rules to tap long term debt for infra fund'
• Recommending that a debt fund of Rs.50,000 crore be set up for financing
infrastructure
projects, an expert panel headed by HDFC chief Deepak Parekh asked the
government to
change rules to allow funding by pension and insurance companies.
• The panel on the infrastructure debt fund has also urged the sectoral
regulators — the Reserve
Bank of India (RBI), the Securities and Exchange Board of India (SEBI), the
Insurance
Regulatory and Development Authority (IRDA), and the Pension Fund Regulatory
and
Development Authority (PFRDA) — to weak their existing laws to enable market
players to use
the large amount of untapped insurance and pension funds.
• Such move would help reduce interest costs and hence cut user-charges since
banks are not able
to provide the required long-term funds for infrastructure projects, the report
said.
• In its report submitted to the Planning Commission, the Parekh Committee
further suggested
that the proposed infrastructure fund with an initial corpus of Rs.50,000 crore be
set up as
venture capital fund (VCFs) to be managed and regulated by SEBI.
• For this purpose, SEBI should be asked to amend its guidelines for VCFs to
enable investment
in the debt market. At present, only a part of VCF is allowed to be invested in
debt, the panel
said.
• The report also said pension and insurance money should be permitted to be
invested in the
fund to provide long-term financing to infrastructure projects coming under the
public-private
partnership (PPP) model.
• The report suggested that the IRDA and the interim pension watchdog PFRDA
be approached to
modify the rules to enable these funds to invest in the infra fund.
• Besides, the report recommended that foreign insurance, pension and
sovereign funds be asked
to invest in the proposed infra fund. For this, the RBI will have to be approached
to create a
special window for these kinds of foreign debt with tenure of 10 years or more.
• Also, the multilateral agencies like the World Bank and the Asian Development
Bank would be
asked to invest in the fund.
• The recommendations of the Parekh Committee assume importance since
infrastructure
upgradation is required to sustain high economic growth and require $1 trillion
during the XII
Plan (2012-17).
L&T, Hindalco among six new SEZs
• The Board of Approval (BoA) of the Commerce and Industry Ministry approved
six new
special economic zones (SEZs), including proposals from L&T and Hindalco. It
also granted
time extension to Mukesh Ambani-led Reliance Industries' (RIL) Haryana SEZ.
• These include TCS, Uttam Galva, Unitech Reality Projects Ltd and the Navi
Mumbai SEZ.
India, Sri Lanka consider energy cooperation
• Sri Lanka President Mahinda Rajapaksa has proposed discussions on
establishing a joint
information mechanism on the possibility of oil and gasfields straddling the
India-Sri Lanka
maritime boundary.
• In a joint declaration, Prime Minister Manmohan Singh assured Mr. Rajapaksa
that this
proposal would receive his government's attention and the matter could be
discussed further
between the two sides.
• The two leaders were briefed on the progress in discussions between the
National Thermal
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Power Corporation of India and the Ceylon Electricity Board of Sri Lanka on a
joint venture to
build a 500-MW coal-fired power plant at Sampur in Trincomalee, incorporating
environmentally friendly technologies.
• Sri Lanka expressed its appreciation of India extending an additional
concessionary line of
credit of $200 million.
• Mr. Rajapaksa appreciated the credit facilities for about $800 million for
railway projects in Sri
Lanka.
• India agreed to assist in the rehabilitation of the Palaly Airport and the
Kankesanthurai Harbour
as also help in renovating the Duraiappah Stadium and constructing a cultural
centre in Jaffna.
• India and Sri Lanka agreed to resume ferry services between Colombo and
Tuticorin and
between Talaimannar and Rameswaram.
• Both leaders welcomed the proposal for the restoration of the
Tiruketheeswaram temple at
Mannar and witnessed the signing of the Programme for Cultural Cooperation for
the period
2010-2013.
LIC to act as registrar for UID project
• Life Insurance Corporation of India (LIC) signed a memorandum of
understanding with the
Unique Identification Authority of India (UIDAI) to act as a registrar for the
delivery of the
unique 16-digit identity numbers to customers, making it the first institution
other than State
governments to sign up with UIDAI.
• UIDAI has envisioned the UID as a number that will make it possible for Indian
residents to
easily establish their identity to facilitate their interaction with various public and
private
agencies across the country. It is to be based on demographic and biometric
data, that is,
photograph, fingerprints (all ten fingers) and iris scan of an individual and hence
prevents
duplication. The UID number has been branded ‘Aadhaar' (foundation).
India investment fund mooted
• Union Road Transport and Highways Minister Kamal Nath asserted that “a very
positive
sentiment” towards India was discernible now among foreign investors,
especially in its
infrastructure domain.
• Mr. Nath said he had suggested to Temasek, a Singapore-based investment
firm with a wide
reach, to explore the possibility of setting up a dedicated India investment fund.
Having first
floated the proposal last October, he would now “raise” the subject again in
follow-up talks.
• On a “conservative estimate,” India's roads and highways sector recorded $2-3
billion worth of
foreign direct investment in the last 12 months. Commitments of this order from
various
countries, including the U.S., were now at various stages of being utilised.
Mid-term appraisal of XI Plan gets Cabinet nod
• The Union Cabinet approved the mid-term appraisal (MTA) of the Eleventh Plan
(2007-12)
projecting a scale-down in average growth from 9 per cent targeted initially to
8.1 per cent
during the five-year period as a consequence of the slowdown in the wake of the
global
financial crisis.
• The MTA, which was endorsed by the full Planning Commission headed by
Prime Minister
Manmohan Singh at its meeting on March 23, will now be placed before the
National
Development Council (NDC), the country's highest policy making body, also
headed by the
Prime Minister, for final approval.
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American Capital forms venture with MSM Energy
• Seeking to garner a share of the Jawaharlal Nehru Solar Mission 2020
initiative, U.S.-based
solar energy giant American Capital Energy announced joining hands with MSM
Energy to
float a 50:50 joint venture company ICE Solar to provide photovoltaic (PV) solar
engineering,
procurement and construction to the Indian markets.
• The company had already bagged a 5 MW solar power project in Gujarat in the
private sector
and had got solicitations from a number of players wanting to venture into solar
energy.
Centre restructures Bharat Bhari
• The Centre laid out a road map to revive the sick engineering PSU Bharat Bhari
Udyog Nigam
Limited (BBUNL) and its four subsidiaries through a process of financial
restructuring and
change in administrative control.
• The Cabinet Committee on Economic Affairs allowed the takeover of Burn
Standard Company
and Braithwaite and Company by the Railways and handed over the refractory
unit of Burn
Standard at Salem in Tamil Nadu to SAIL and merged Braithwaite, Burn and
Jessop
Construction Company with BBUNL.
• These transfers have been backed by a financial package involving an
expenditure of Rs.
1,139.16 crore as non-financial assistance by waiving government loan and
interest of Burn
Standard and assistance of Rs. 14.50 crore to it.
NTPC-BHEL venture plans Rs. 6,000 cr capital investment
• NTPC and Bharat Heavy Electrical Ltd. (BHEL) have finalised plans to
manufacture nearly
5,000 MW of power equipment annually and hope to secure nearly Rs.7,000-
crore worth orders
by the end of this year.
• NTPC BHEL Power Projects (NBPPL), which made a detailed presentation to the
Ministry of
Heavy Industries and Public Enterprises, has outlined a capital investment of
Rs.6,000 crore to
become a major player in the field of power generating equipment, it said.
• NBPPL is a 50:50 joint venture company between NTPC and BHEL for carrying
out
engineering, procurement and construction (EPC) contracts for power projects as
well as for
manufacturing and supplying equipment in India and abroad to meet the needs
of power
equipment in the power sector expansion plans.
Reliance Industries to acquire Infotel Broadband
• Reliance Industries Ltd. (RIL) entered into an agreement to acquire a
substantial stake in Infotel
Broadband Services (P) Ltd investing about Rs. 4,800 crore by way of
subscription to fresh
equity capital at par to be issued by Infotel Broadband to RIL.
• Post-investment, RIL will own 95 per cent of the equity and Infotel Broadband
will become a
subsidiary of RIL.
• The Mukesh Ambani-led RIL and Reliance ADA Group companies owned by his
younger
brother Anil Ambani have agreed on May 23, to cancel all existing non-compete
arrangements
which the two groups entered in January 2006 at the time of corporate de-
merger.
• However, RIL had agreed not to enter the gas-based power generation
business for the period
up to March 31, 2022, with an exception made in respect of RIL's captive gas-
based power
plants.
• RIL sees the broadband opportunity as a new frontier of knowledge economy
in which it can
take a leadership position and provide India with an opportunity to be in the
forefront among
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the countries providing world-class 4G network and services.
ADB forecasts stronger growth for India, China
• Forecasting a “considerable stronger growth rate for Asia, excluding Japan and
Australia even
though the global financial recovery rate is fragile”, Managing Director General of
Asian
Development Bank Rajat M. Nag, said that India and China were expected to
witness the
strongest growth in the Asian continent. He also emphasised on the need for
boosting
consumption rate in Asian countries.
• Mr. Nag said that China's growth in 2010 and 2011 was forecast at 9.6 per
cent and 9.1 per cent
respectively while India's growth was pegged at 8.2 per cent and 8.7 per cent
respectively. He
put the overall growth rate of Asia at 7.5 per cent this year and 7.3 per cent in
2011.
RCom to demerge Reliance Infratel
• Reliance Communications (RCom) proposes to restructure ownersip of its
subsidiary Reliance
Infratel (RInfratel) through a demerger or other options. The boards of directors
of RCom and
RInfratel approved in-principle a proposal to restructure ownership of RInfratel
to facilitate
creation of the world's largest independent telecom infrastructure company, not
owned or
controlled by any telecom operator.
Cairn starts crude oil supplies through pipeline
• Cairn India announced that it had started crude oil supply from its Mangala
oilfield in Rajasthan
to private sector Reliance Industries and Essar Oil through the newly built
heated and insulated
crude oil pipeline.
• Till now Cairn India shipped crude oil via road to the Gujarat coast for onward
journey to
Mangalore Refineries and Petrochemicals Ltd (MRPL) and RIL's Jamnagar
refinery. The
company has now completed the 590-km pipeline from Rajasthan to Salaya in
Gujarat that has
enabled the sale of crude oil to Essar's Vadinar refinery in the State.
• The 14-million tonnes a year Vadinar refinery has contracted 30,000 barrels a
day (bpd) of
Mangala crude oil.
RIL: power business a natural extension
• Mukesh Ambani, Chairman of Reliance Industries Ltd (RIL), said that the
company would look
forward for a constructive cooperation with younger brother Anil Ambani's ADA
Group
(ADAG).
• One of the important developments in these seven months (since the last
AGM) has been the
Supreme Court verdict in May 2010, on the oil and gas allocation and pricing
issues with
ADAG.
• Reliance and ADAG have annulled the earlier non-compete agreement and
have signed a new
non-compete agreement. This new agreement opens up the full range of power
business for
Reliance, except non-captive gas-based power plants until 2022.
• This paves the way for Reliance to participate in the whole value chain of the
power business,
spanning generation, transmission and distribution.
• Reliance is ready to seize the prospect of transforming the Indian electricity
landscape.
IRDA will regulate ULIP schemes
• The Central Government ended a two-month-long turf war between the
Insurance Regulatory
and Development Authority (IRDA) and the Securities and Exchange Board of
India (SEBI),
saying unit linked insurance products (ULIPs) will be regulated by the IRDA.
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• “Life insurance business shall include any ULIP or any such instruments. This
would set at rest
all the issues regarding ULIPs between two financial regulators,” the government
said in a
statement after promulgating an ordinance to make necessary changes in the
law.
• Besides, the government said a high-level committee chaired by Finance
Minister Pranab
Mukherjee would sort out all issues of jurisdiction regarding hybrid products.
• SEBI in April took the market by surprise when it banned 14 life insurance
firms from issuing
fresh ULIP schemes. However, the IRDA asked the life insurers to ignore the
SEBI order and
the matter then went to the Finance Ministry, which advised them to move the
court and in the
meanwhile had asked them to matain status quo. ULIPs account for more than
50 per cent of the
life insurance business and the money collected is invested in equities.
• The ordinance promulgated by President Pratibha Patil amended the RBI Act,
the Insurance
Act, the SEBI Act and the Securities Contracts Regulation Act to bring about
clarity on
regulation of ULIPs. ULIPs are a hybrid instrument that combines both insurance
and
investment. While the Securities and Exchange Board of India saw ULIPs as
investment
products and hence asserted its right to regulate those products, the IRDA treats
them as
insurance instruments.
Manmohan: Double farm growth rate to ensure food security
• Prime Minister Manmohan Singh said the agricultural growth rate must be
doubled to 4 per cent
to ensure food security for the growing population.
• Agriculture growth rate in 2009-10 was 0.2 per cent owing to drought in 399
districts during
last year's kharif. As against this, the government set a target of 4 per cent
agriculture growth
per annum in the 11th Five-Year Plan (2007-12).
• India commands about 2.3 per cent of the world's land area and about 4 per
cent of the earth's
fresh water resources, but feeds 17 per cent of the world population. This puts
tremendous
pressure on our resources and makes the need for newer and better
technologies even more
critical.
Piramal Healthcare to buy Canadian firm's assets
• Piramal Healthcare announced the signing of a definitive agreement to acquire
Canada's
BioSyntech's assets for a consideration of Canadian $3.9 million (about Rs.
17.65 crore).
• BioSyntech is a medical device company specialising in the development,
manufacturing and
commercialisation of advanced biotherapeutic thermogels for regenerative
medicine (tissue
repair) and therapeutic delivery.
India likely to halve poverty rate by 2015: U.N. report
• India is expected to reduce its poverty rate from 51 per cent in 1990 to 24 per
cent in 2015,
slashing the number of extremely poor by 188 million. But progress in the rest
of South Asia is
not sufficient to halve the level of poverty by that target date, according to a
United Nations
report on the Millennium Development Goals for 2010.
• The sharpest reductions worldwide continue to be recorded in East and South-
East Asia, where
the MDG target to halve extreme poverty has already been met, while most of
South Asia is in
danger of missing it.
• The percentage of people living on less than $1.25 a day in East Asia dropped
from 60 in 1990
to just 16 in 2005, and from 39 to 19 in South-East Asia. The rate of poverty in
China is
expected to fall to around five per cent by 2015.
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World Bank aid to India to touch $9.3 billion
• The World Bank's total financial commitment to India's development agenda is
set to touch $9.3
billion by the end of its fiscal year ending June. Spread across 25 new projects,
the loan
assistance is aimed at helping the country sustain the much needed high growth
to lift millions
out of poverty.
• World Bank Country Director in India Roberto Zagha said the total expected
lending this year
(July-June 2010) would include $2.6 billion as interest-free credits from the
International
Development Association (IDA) and $6.7 billion in the form of long-term, low
interest loans
from the International Bank of Reconstruction and Development (IBRD).
• Till date, both IBRD and IDA-aided projects with a total new commitment of
$8.3 billion had
already been approved, while the remaining projects worth $1 billion were to be
presented
before the Bank's board over the next few days, he said.
• He Pointed that huge funding needs of India's fast growing economy such as
the estimated
requirement of $500 billion for infrastructure development alone during the
current Plan period,
RIL to acquire 45 % interest in Pioneer Natural's asset
• Reliance Industries Limited (RIL) announced that its subsidiary, Reliance
Eagleford Upstream
LP, has executed definitive agreements to enter into a joint venture with U.S.-
based Pioneer
Natural Resources Company, Irving, Texas, under which, Reliance will acquire a
45 per cent
interest in Pioneer's core Eagle Ford Shale acreage position in two separate
transactions.
• Pioneer and Newpek LLC, Pioneer's current partner in the Eagle Ford, will
simultaneously
convey 45 per cent of their respective interests in Eagle Ford to Reliance.
Newpek, a whollyowned
subsidiary of ALFA, S.A.B. de C.V., at present owns about 16 per cent non-
operated
interest in Pioneer's core Eagle Ford Shale acreage.
Alstom teams up with NPCIL and BHEL to supply reactor turbines
• Alstom Power, the Nuclear Power Corporation of India Limited (NPCIL) and
BHEL have
entered into a tripartite agreement for supplying turbines for the 700-MWe
pressurised heavy
water reactors that will be built in four locations in India.
• “We have been retained to provide turbines for the 700-MWe reactors for
India's nuclear power
programme. The first order is for Kakrapar in Gujarat,” Guy Chardon, Senior
Vice-President,
Thermal Products, Alstom Power, said.
• Excavation is under way for building two reactors of 700 MWe each at
Kakrapar, 80 km from
Surat. Six more Pressurised Heavy Water Reactors of 700 MWe each will come
up in
Rajasthan, Madhya Pradesh and Haryana, with two reactors for each State.
Differences on economy set to play out in Toronto
• World leaders were gathering in Canada for G8 talks on global security and
development, amid
calls to deliver on past promises and a brewing dispute on how to shore up
fragile economic
recovery.
• Under a tight security blanket, leaders from the Group of Eight richest nations
were meeting in
an exclusive, remote hotel resort in Huntsville, Muskoka, some 220 km north of
Toronto.
GMR bags Male airport project
• GMR Infrastructure Limited (GIL), which bagged yet another international
project to build,
operate, modernise and expand the Male International Airport (MIA), is looking
at more
opportunities to take its expertise in airport infrastructure outside the country.
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• GMR bagged the MIA project in a keenly contested international bid process
participated by
three parties: Aeroport De Paris, France-TAV, Turkey consortium, Zurich Airport-
GVK
consortium and the GMR-MAHB consortium.
• GMR Infra is eyeing new projects in the SAARC region, Western Africa and the
Middle East.
RCom, GTL Infrastructure in Rs.50,000-crore deal
• The Reliance Communications (RCom) and its subsidiary, Reliance Infratel,
have entered into a
Rs.50,000-crore ($11 billion) deal with GTL Infrastructure to create the world's
largest
independent telecom infrastructure company that will be neither owned nor
controlled by a
telecom operator.
• Under the deal, which has the in-principle approval of the Board of Directors of
all the three
companies, the tower assets of Reliance Infratel will be merged with GTL
Infrastructure.
• According to a statement from the Reliance Communications, the company will
continue to
own Reliance Infratel's 200,000-km fibre optic network and related assets,
India's largest optic
fibre network.
• The quantum of cash infusion into the RCom and the share swap ratios for the
RCom and
Reliance Infratel minority shareholders will be finalised in due course with the
help of
independent valuers and advisors.
India joins select club to counter financial frauds
• After nearly a five-year wait, India has finally become a full-fledged member of
the Financial
Action Task Force (FATF), an inter-governmental body responsible for setting
global standards
on anti-money laundering (AML) and combating financing of terrorism (CFT).
• With its induction as the 34th member-country of the global body that chalks
out policies to
counter financial frauds, India will have access to information on suspicious
financial
transactions in Switzerland, China, the U.S. and the U.K. The development
marks a significant
step towards tracing the source of terror financing and black money stashed
away in tax havens
abroad.
• Having gained ‘Observer' status at the FATF in November 2006, India has been
working
towards full-fledged membership. The decision to grant it full-member status
was taken during
the FATF's plenary session held in Amsterdam during June 23-25. According to
an official
statement, the FATF discussed and adopted India's mutual evaluation report,
along with those of
Saudi Arabia and Brazil, “assessing compliance with the international standards
for combating
money laundering and terrorist financing — the 40+9 Recommendations.”
ONGC to sign 17 oil, gas contracts
• Oil and Natural Gas Corporation (ONGC) along with its partners will sign
contracts for half of
the 34 oil and gas blocks awarded in the latest round of auction under the New
Exploration
Licensing Policy (NELP). Of the 70 blocks offered in NELP-VIII, companies bid for
only 36
blocks. ONGC and its partner won 17 areas out of their bidding for a maximum
of 25 blocks.
• Among the 24 deep water blocks that the government had put on offer, only
eight received bids,
all of which were single bids. ONGC and partners bagged seven, while Cairn
Energy of the
U.K. got one block.
• Similarly, of the 28 shallow water blocks on offer, 13 received bids. ONGC got
five of these as
lead partner and one where Oil India Ltd (OIL) was the operator, while BHP
Billiton Petroleum
won three and Cairn Energy got a KG basin offshore block.
• Of the 18 on-land blocks, bids were received for 15, four of which went to
ONGC, while other
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successful bidders included Oil India, NTPC, Esveegee Steel and Jubilant.
• ONGC also won seven deep-sea blocks, five as the sole operator, one as a joint
operator with
OIL and one with the BG Group of the U.K. as the operator. In all, ONGC won 17
blocks — 14
as operator and three as non-operator.
• ONGC's other partners in deep-water blocks included Gujarat State Petroleum
Corp (GSPC),
GAIL India, NTPC and Andhra Pradesh Gas Infrastructure Corp. Shallow water
blocks had
Indian Oil Corp and Adani Welspun Exploration Ltd. as additional partners.
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Economy and Energy: July 2010

TRAI suggests 74 % FDI limit for broadcast carriage services
• The Telecom Regulatory Authority of India (TRAI) recommended that the
foreign investment
limit for broadcast carriage services such as DTH, IPTV, Mobile TV, HITS,
Teleport and MSOs,
which are upgrading to digital and addressable environment, may be raised to
74 per cent. The
existing limit for most of these services is 49 per cent.
• It also said the foreign investment limit for local cable operators, news and
current affairs TV
channels and FM radio be fixed at 26 per cent, while there should be no
restriction on FDI for
uplinking and downlinking of TV channels other than news and current affairs TV
channels.
• TRAI also recommended that all foreign investment less than 26 per cent
would be through the
automatic route, while investments of 26 per cent and above will require prior
approval of the
government.
World Bank approves $430 million to MUTP
• The World Bank approved $430 million to finance the Mumbai Urban Transport
Project
(MUTP) 2A to improve the suburban railway system in the Mumbai Metropolitan
Region – one
of the world's largest urban centres with a population of 18 million in 2001. In
2006-07, an
estimated 6.4 million passengers daily (2.3 billion passengers annually) travelled
on the
suburban railway, which makes it the lifeline of the city.
U.S. House passes financial reform bill
• The House of Representatives adopted legislation to revamp the nation's
financial regulatory
system, voting mostly along party lines as partisan acrimony impeded
cooperation even on the
shared goals of averting economic crises.
• The bill gives government regulators the authority to liquidate failing financial
companies by
breaking them apart, selling assets and forcing creditors and shareholders to
take losses so that
taxpayers do not pay the bill.
• The legislation also vastly expands the regulatory powers of the Federal
Reserve and establishes
a systemic risk council of high-ranking officials, led by the Treasury Secretary, to
detect
potential threats to the overall financial system.
• It creates a powerful new consumer financial protection bureau and widens the
purview of the
Securities and Exchange Commission to broaden regulation of hedge funds and
credit rating
agencies.
• The measure restricts the ability of banks to invest and trade for their own
accounts — a
provision known as the Volcker Rule, for its proponent, former Fed Chairman
Paul A. Volcker
— and creates a new regulatory framework for derivatives, the complex financial
instruments
that were at the heart of the 2008 crisis.
ONGC to intensify work on Western offshore fields
• In a move aimed at giving a major impetus to boosting energy, state-owned
Oil and Natural Gas
Corporation (ONGC) has given the green signal for development of a cluster of
oil and gas
fields in the Western Offshore holding large deposits.
• The ONGC board gave its approval to the proposal to develop a cluster of oil
and gas fields
WO-5, WO-15, WO-16 and B-119/121 fields. The approval came at the meeting
held on June
30, according to an official. The fields in the Western offshore are situated about
140 km from
the West coast of Mumbai and 40 km south of the Mumbai High fields.
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• The conservative estimates of in-place oil and gas in these fields are 8.57
million tonnes and
11.024 billion cubic metres (bcm) respectively. The fields will produce 2.83
million tonnes of
oil and 8.58 bcm of gas over their life.
• The statement said that ONGC planned an innovative methodology of
converting its first drill
ship, Sagar Samrat, of 1973 vintage, into a Mobile Offshore Production Unit
(MOPU) and
using the same for producing oil and gas from these fields.
• On the other hand, the government has given approval for $5.25 per million
British thermal unit
(mBtu) as the price of gas produced from ONGC's C-Series fields in Mumbai
offshore. ONGC
had initially sought $5.5 per mBtu but the Petroleum and Natural Gas Ministry
approved a price
of $5.25 per mBtu.
• Natural gas produced from C-Series fields is sold to GAIL which further
markets it to endusers.
MRPL to export products to Mauritius
• India has signed a three-year agreement to export fuel worth $2 billion to
Mauritius and also
agreed to look into the possibility of setting up a refinery in the Island nation.
• The agreement was signed by Mangalore Refinery and Petrochemical Limited
(MRPL)
Managing Director, U.K. Basu and Mauritius State Trading Corporation General
Manager
Ranjit Singh Soomarooah. It was agreed that MRPL would export 1.1 million
tonnes of auto
fuels, jet fuel and furnace oil annually for three years. Mauritius would buy one
lakh tonnes of
petrol, 3.50 lakh tonnes of diesel and 2.70 lakh tonnes of jet fuel annually for
three years
beginning August 1, Mr. Soomarooah said during the signing ceremony.
Mauritius' Minister of
Commerce and Industry Showkutally Soodhun invited MRPL and its parent firm
Oil and
Natural Gas Corporation for a 50:50 joint venture to set up the Island nation's
maiden refinery.
RNRL to merge with Reliance Power
• In a Rs.50,000-crore deal, the Anil Ambani group announced the merger of
Reliance Natural
Resources Limited with Reliance Power, which will become a beneficiary of the
gas deal signed
with the Mukesh Ambani-led Reliance Industries.
Cairn's Mangala fields output crosses 1-lakh barrel-mark
• Cairn India crossed the 1-lakh barrel-mark of crude oil production from
Rajasthan after Indian
Oil Corporation (IOC) began buying oil from this prolific oilfield.
• The Mangala oilfields in Barmer district of Rajasthan is producing 1.05 lakh
barrels per day
(bpd) and will reach the peak output of 1.25 lakh barrels later this month. This
record output
was achieved after IOC began drawing oil from Cairn's newly constructed
pipeline.
• Cairn now sells oil to Reliance Industries' Jamnagar refinery in Gujarat and
neighbouring
Vadinar plant of Essar Oil. Mangalore Refinery and Petrochemicals (MRPL),
Cairn's first
customer, has temporarily stopped taking the Mangala crude to study
optimisation of the crude,
they said.
• Mangala crude is being pumped into IOC's 1,174-km-long Mundra-Panipat
pipeline for
transportation to the refinery.
Rebound in China's demand for iron ore
• A resurgent demand from China's fast-rebounding economy for Indian iron ore
and raw
materials has helped revive trade between the two countries in the first half of
2010 after a poor
performance last year caused by the financial crisis.
• With an 80 per cent rise in Indian exports, two-way trade hit $ 25 billion in the
first five months
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of this year, officials said. The two countries now expect to beat their $ 60 billion
target for the
year.
• Iron ore, slag and ash accounted for $6.4 billion — 63 per cent of India's net
exports to China.
Chinese imports rose 82 per cent in the first five months of this year, largely
driven by rising
iron ore prices and a revival of Chinese industry following last year's slump. The
only other
significant contribution to India's export basket was cotton yarn and fabrics,
which grew several
fold year-on-year, accounting for $1.07 billion.
NMDC mulls joint ventures with Japanese steel majors
• NMDC is in talks with Nippon Steel and Kobe Steel of Japan for partnership in
two steel plant
projects in Karnataka and Andhra Pradesh. The state-owned firm will also be
investing Rs.3,000
crore to set up a 12-million tonne per annum pipeline in Chhattisgarh to supply
iron ore to its
domestic steel customers.
Easier access for Indian IT professionals in Malaysia
• Malaysia assured India that it would ensure smooth and hassle-free movement
of IT and other
professionals from India and other parts of the world. Both countries also set an
ambitious
bilateral trade target of $15 billion by 2015, indicating enhanced levels of
engagement.
• Bilateral trade between two countries grew at an average growth rate of 23.7
per cent between
2004 and 2008 and it reached as high of $10.5 billion in 2008 just before the
worst effects of the
global financial crisis. However, in 2009, trade declined by 29 per cent and has
shown a
positive growth in the first quarter of 2010-11.
Bharti to invest $600 m in Nigeria
• India's largest cellular service company Bharti Airtel will invest $600 million in
Nigeria's
mobile market following its takeover of Zain Telecom's African business for
around $10.7
billion.
• Bharti Airtel embarked on the largest-ever telecom takeover by an Indian firm
on June 8, when
it completed a transaction to buy Kuwait-based Zain Telecom's businesses in 15
African
countries for $10.7 billion.
• The Africa holdings include Burkina Faso, Congo, Gabon, Ghana, Kenya,
Malawi, Madagascar,
Niger, Sierra Leone, Tanzania, Uganda, Chad and Zambia.
IMF raises global growth forecast
• The International Monetary Fund has raised its world economic growth forecast
from 4 per cent
to 4.5 per cent, reflecting the positive impact of economic activity in the first half
of the year as
much as it did “strong clouds [that] have appeared on the horizon,” according to
an official
statement.
• Specifically the Fund was cheered by the fact that the world economy
expanded at an
annualized rate of over 5 per cent in the first quarter of 2010 and that growth
was stronger than
expected in most countries, including the United States, Europe, Japan, Brazil,
and India. “A
good sign for the future,” according to the IMF, was the finding that in most
cases such growth
reflected stronger private demand.
• In particular the IMF forecasted estimated for advanced countries at 2.6 per
cent for 2010 and
2.4 per cent for 2011, emphasising that these low growth rates implied that high
unemployment
would remain a central issue. In significant contrast however the Fund's growth
projection for
emerging and developing economies was 6.8 per cent in 2010 and 6.4 per cent
in 2011, which
included an upward revision of 0.5 per cent for 2010 and a downward revision of
0.1 per cent
for 2011.
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HCL Info enters cloud computing
• HCL Infosystems launched its end-to-end cloud-based computing solution
service — O'zone —
mainly aimed at enterprises, mid-sized organisations and professionals.
• HCL O'zone will deliver the benefits of reduced capital expenses, increased
data security,
increased flexibility through server consolidation, reduced power and cooling,
green computing
and disaster recovery. The solution will also provide 24x7 technical support to
manage
scalability and deliver optimum performance.
• Meanwhile, HCL Infosystems announced the acquisition of 60 per cent stake in
Dubai-based
NTS Group.
• NTS, a ‘total solutions' provider ranging from IT hardware to software services
and consulting,
has partnered leading enterprises in the region building customised solutions for
a host of
business needs.
RPower ties up funds for UMPP
• Reliance Power announced financial closure of its 4,000 MW Krishnapatnam
Ultra Mega
Power Project (UMPP) being developed by Coastal Andhra Power Ltd. (CAPL), its
whollyowned
subsidiary.
• The estimated cost of the project is Rs. 17,500 crore and is being financed at a
75:25 debt equity
ratio. IDBI Bank is the lead arranger for the debt facility with Power Finance
Corporation
(PFC) acting as joint lead arranger.
• The Krishnapatnam UMPP is the largest power project in South India and will
supply power at
a competitive tariff of Rs. 2.33 per kWh to Andhra Pradesh (1,600 MW),
Maharashtra (800
MW), Tamil Nadu (800 MW) and Karnataka (800 MW).
World Bank approves two loans
• The Centre signed two agreements with the World Bank with latter agreeing to
give $407
million loan to scale up microfinance services in unbanked areas and improve
capacity to
generate quality statistics.
• While $300 million is for ‘Scaling up sustainable and responsible microfinance
project', $107
million has been granted for ‘India statistical strengthening project'.
• The objective of ‘Scaling up sustainable and responsible microfinance project'
is to scale up
access to sustainable microfinance services to the financially excluded,
particularly in underserved
areas of India through, among other things, the introduction of innovative
financial
products and fostering transparency and responsible finance.
• The project will be implemented by the Small Industries Development Bank of
India (SIDBI)
over five years.
• While $100 million is a credit from World Bank's concessionary lending arm
International
Development Association, the remaining $200 million is a loan from the
International Bank for
Reconstruction and Development.
Slow progress in ASEAN talks on services, investments
• India's negotiations with ASEAN for a comprehensive services and investment
agreement are
progressing at a “painfully slow” pace and major member countries fear that a
‘deal with India'
would lead to the services market being taken over by the former.
• Such are the reservations among countries like Singapore, Thailand, Malaysia
and Vietnam that
they are rather opting for Free Trade Agreements (FTA) at the bilateral levels
rather than
rushing in to formalise a multi-lateral deal on services and investments.
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• Under the proposed services and trade agreement, India is demanding
liberalisation of trade in
services and investments, particularly movement of professionals. Once the pact
is signed and
implemented, Indian professionals will be able to increase their presence in
ASEAN countries
substantially. India has already signed the FTA on goods with ASEAN which
came into effect
from January 1, 2010.
• India had recently put in place a comprehensive agreement with South Korea
and is in the
advanced stage of negotiations with Japan. The 27-nation European Union and
India are also
holding extensive talks to clinch a deal on FTA within this year.
8 Indian firms on Fortune 500 list
• Eight Indian companies, including Indian Oil Corporation (IOC) and Mukesh
Ambani-led
Reliance Industries Limited (RIL), have made the cut on the list of the world's
500 largest
companies compiled by Fortune magazine.
• The league of 500 elite companies for 2010 is topped by U.S. retailer Wal-Mart
Stores,
followed by Royal Dutch Shell and Exxon Mobil, in that order.
• The other Indian companies on the list are: Tata Steel, Tata Motors, Bharat
Petroleum
Corporation Limited , Hindustan Petroleum Corporation Limited (HPCL), ONGC
and the State
Bank of India (SBI).
• Tata Motors has made an entry into the list for the first time this year, while
seven other Indian
entities, which were part of the list in the previous year, are also featured. The
list also features
Citigroup, ArcelorMittal, Pepsico and Motorola, led by people with Indian roots.
IOC has the
highest rank of 125 among the featured Indian companies, followed by RIL at
the 175th spot,
SBI (282), BPCL (307), HPCL (354), Tata Steel (410), ONGC (413) and Tata
Motors (442).
Alstom opens largest rotor balancing facility in Tennessee
• Alstom's manufacturing and engineering facility on the banks of the Tennessee
River at
Chattanooga, Tennessee, U.S., inauguration on June 24. It is the world's biggest
facility that will
turn out steam turbines for nuclear and coal-fired electricity generating stations,
gas turbines,
turbo generators, generator stator, gas turbine rotor and final assembly.
• The factory will manufacture the world's largest nuclear steam turbine,
“Arabelle,” that can
yield 1,700-1,800 MWe.
• In 2010, the installed nuclear power capacity from 104 operating reactors in
the U.S. is 101.3
GWe, accounting for 19 per cent of the total electricity generated in the U.S.
• After the Three Mile Island accident of 1979 and the subsequent logjam that
the U.S. found
itself in, it is now preparing to build 17 new nuclear power plants. Four units are
partially built.
The existing U.S. nuclear reactors are ageing, with 70 per cent of them more
than 30 years old
NTPC dumps Bundelkhand project
• NTPC has dumped the proposed 4,000 MW mega power project in
Bundelkhand in Uttar
Pardesh and instead has opted to put up the plant in Madhya Pradesh due to
reported refusal of
the Uttar Pradesh Government to cooperate in setting up the plant.
• NTPC, which has power generation capacity of over 30,000 MW from all
sources of energy, is
planning to augment it to 50,000 MW by March 2012.
New service for LPG refills
• The Petroleum and Natural Gas Ministry launched, ‘Preferred Time LPG
Delivery Scheme,'
which would allow professionals especially working men and women to get
delivery of their
LPG cylinder at their own preferred time for a small premium.
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• Under the scheme, the customer would not have to wait to take delivery of the
cylinder as it
would be delivered at a time of his choice for a small premium of Rs. 50 a
cylinder.
• The scheme is completely optional and customers who do not opt for it will
continue to get their
refills as per the current schedule.
Essar Energy to buy Navabharat Power
• Essar Power Ltd. (EPL), the subsidiary of the India-focused integrated energy
company Essar
Energy plc, has entered into binding agreements for the acquisition of 100 per
cent interest in
Navabharat Power Pvt. Ltd. for an undisclosed sum.
• Essar said EPL will initially acquire 76 per cent of the existing equity with
balance 24 per cent
being acquired upon completion of certain project milestones.
• Navabharat Power is a 2,250 MW coal-fuelled power plant being set up in
Dhenkanal district,
Orissa. The project is being implemented in two phases — Phase I of 1,050 MW
and Phase II of
1,200 MW — at a total estimated capital cost of $2 billion. The project includes
the allocation
of the Rampia Coal block of 112 million tonnes and a 4.7 million tonnes annually
tapering coal
linkage with Coal India Ltd.
Serum Institute offers H1N1 vaccine
• Serum Institute of India (SRI), the largest vaccine manufacturer in India, has
launched an
indigenously developed intra-nasal vaccine, Nasovac, for prevention of H1N1
(swine flu)
infections. The single dose vaccine, fitted at the top of a syringe, is to be sniffed
once in each
nostril making it a painless prevention mode.
World's largest aircraft makes first commercial landing in India
• The first commercial landing of the Airbus A380 — the largest aircraft of the
world — took
place at the newly inaugurated Terminal 3 of the Indira Gandhi International
Airport.
• Organised to commemorate the launch of Terminal 3, the touchdown of flight
EK-516 of the
Emirates Airline from Dubai to Delhi was greeted by a water cannon salute at the
airport.
• A major feature of the new T3 is its A380-compatible runway and passenger
boarding bridges.
• Incidentally, it was the Kingfisher Airlines which first flew in the A380 to India
in 2007.
• The A380, which is the world's only twin-deck, two-aisle airliner, is touted to
be less polluting
to the environment compared to other aircraft. It offers better fuel economy per
passenger mile
than most hybrid passenger cars and also produces less noise.
Venu Srinivasan to head NIFT
• The Union Textiles Ministry has reconstituted the Board of Governors for the
National Institute
of Fashion Technology with Chairman of TVS Motor Venu Srinivasan as the
Chairman of the
panel. It has several prominent representatives of the textile industry as
members.
Tata Steel arm sells stake in Malaysian firm
• Tata Steel said that its Singapore-based subsidiary NatSteel Holdings had sold
27.03 per cent in
Southern Steel Berhad, Malaysia, for a total consideration of around $72 million,
says a
company release.
Pranab proposes three-tier GST
• In a bid to evolve a consensus with States on a unified single rate structure for
the Goods and
Services Tax (GST) over a three-year phase, the Union government proposed a
three-tier tax
structure, to start with, from April 1, 2011.
www.upscportal.com
• Finance Minister Pranab Mukherjee proposed the adoption of a dual rate
structure for the GST,
both at the Central level (CGST) and at the State level (SGST), with the revenue
so garnered to
be shared equally. Accordingly, with its introduction from the next fiscal, goods
will attract a
combined GST at the standard rate of 20 per cent, essential items at a
concessional 12 per cent
and services at 16 per cent.
• This mutually supportive approach, he said, would ensure a single rate for the
CGST and the
SGST in the range of 12 to 20 per cent in the first year of the GST's introduction.
• At the meeting, Mr Mukherjee announced that the Centre would fully
compensate the States for
the revenue loss on account of the CST (Central Sales Tax) reduction in 2009-10
and promised
to “step up the amount of compensation recommended by 13th Finance
Commission should the
need arise, based on a mutually agreed formula” for any revenue loss incurred
on account of
GST adoption.
To unload assets worth $7 billion to Apache
• BP has said it is selling assets in the U.S., Canada and Egypt to Apache Corp.
for $7 billion to
help pay the costs from the Gulf of Mexico oil spill.
• Some or all of the proceeds will go towards a $20 billion fund that BP agreed to
last month
under pressure from the Obama administration. The fund will help pay cleanup
costs and
damages from the spill.
• The company suspended dividend payments of about $10.6 billion for this
year. And it said it
would speed up plans to sell $10 billion in assets. Apache eventually emerged as
a potential
buyer.
• BP has spent about $4 billion so far on containing and cleaning up the oil, as
well as on damage
claims from Gulf businesses.
Three Indian infrastructure projects on KPMG's top 100 global list
• Three Indian projects have been featured in Global consultancy firm KPMG's
infrastructure 100
global project report.
• The three Indian projects are: KG-D6, Mundra and Indira Gandhi International
Airport, Delhi,
KPMG said.
• KPMG said The 4,000 MW Mundra plant, one of the nine Ultra Mega Power
Projects, uses
unfashionable coal, making it the most energy efficient plants vital to India's
continuing
economic development.
• Other global projects also featured in the report are: Venice MOSE Flood
Barrier (Italy), Green
Power Express (U.S.), Mthombo Oil Refinery (South Africa), Incheon Tidal Power
Project
(South Korea), TAV high speed rail link (Brazil), CRCHUM P3 research centre
(Canada), King
Abdullah University of Science & Technology (Saudi Arabia) and Greater
Manchester Waste in
the U.K.
India will be 3rd largest FDI recipient in 2010-12
• The United Nations Conference on Trade and Development (UNCTAD) said
India would
emerge as the third largest recipient of foreign direct investment (FDI) for the
three-year period
ending 2012.
• India is likely to be among the most promising investor-home countries in
2010-12 as well as
the third highest economy for FDI in 2010-12,” UNCTAD says in its World
Investment Report
2010.
• India remained in the list of top ten countries in 2009 to have the highest FDIs
in the world. In
www.upscportal.com
2009, the country received FDI worth $34.6 billion, while the outward FDI was
$14.9 billion,
the report, says.
• The UNCTAD report says the global FDI flows began to bottom out in the later
half of 2009
and has shown a modest recovery in the first half of 2010 with South Asia being
the first to
bounce back from the recent downturn.
• The report also focuses on climate change and in particular the role of
transnational
corporations in supporting the transition of developing countries to a low-carbon
economy.
Low-carbon FDI is significant and its potential huge, says UNCTAD. In three key
low-carbon
business areas alone, FDI flows are estimated to have been $90 billion in 2009.
“A quarter of
the greenfield investments in alternative or renewable power generation were in
the developing
economies including India and Pakistan,” the report says.
GST will make India a $2-trillion economy soon, says Pranab
• Union Finance Minister Pranab Mukherjee expressed confidence that the
proposed goods and
services tax (GST), when successfully implemented, would provide a trillion-
dollar boost and
propel the economy to $2 trillion soon.
• Quoting estimates from the National Council of Applied Economic Research that
the
implementation of a well-designed GST would see an increase of 2-2.5 per cent
in the country's
GDP (gross domestic product), with over 10 per cent increase in exports, Mr.
Mukherjee said:
“The gain from GST will propel India from a $1-trillion economy to a $2-trillion
economy in a
short span of time. Therefore, the successful implementation of GST would
create win-win-win
situations for the Centre-State, industry and consumers.”
• Mr. Mukherjee said that under the three-tier GST rate structure — 20 per cent
for goods, 16 per
cent for services and 12 per cent for essential items — the revenue is to be
shared equally by the
Centre and the States.
• Accordingly, in the first year of implementation (2011-12), the peak Central
GST and State
GST would be 10 per cent each, which would stand reduced to nine per cent in
the second year.
• The objective, would be to bring both GSTs to eight per cent each for goods
and services by the
third year. “In a phased manner, we will be able to achieve a single CGST and
SGST rate for
both goods and services,” he said.
Obama signs historic Bill
• President Barack Obama made sweeping reform of Wall Street institutions a
reality, by signing
into law the Dodd-Frank Wall Street Reform and Consumer Protection Act.
• Explaining why America needed this reform package desperately, the President
said it would
help crack down on abusive practices in the mortgage industry, provide students
taking out
college loans with clear and concise information about their obligations and
supply more
information to ordinary investors about the costs and risks of mutual funds and
other investment
products.
India, Vietnam explore buying BP stake
• India is exploring, in association with Vietnam, the possibilities of buying the
stake of the
British energy player, BP Plc, in a gas project in the Southeast Asian country.
• India has evinced interest in the BP's stake in Nam Con Son gas project
following reports that
the British firm might sell some of its assets in Vietnam and elsewhere to fund
the oil-spill
clean-up operations in the Gulf of Mexico.
www.upscportal.com
Rangarajan lists priority initiatives for sustaining high growth
• The Prime Minister's Economic Advisory Council (PMEAC) projected an
economic expansion
of 8.5 per cent for the current fiscal backed by a ‘substantial jump' in farm
sector growth on the
assumption of a normal monsoon and higher at 9 per cent in 2011-12 while
cautioning that the
high growth momentum would not be sustainable unless short and medium-term
policy
initiatives are in place to tackle high inflation, low productivity in agriculture and
the deficit in
physical infrastructure.
• Releasing the Council's ‘Economic Outlook for 2010-11', which was submitted
to the Prime
Minister, PMEAC Chairman C. Rangarajan noted that inflation, which has
remained a major
source of concern in the economy for more than a year, needed to be tackled as
a priority in the
short-term.
• The farm sector, he said, was expected to grow by 4.5 per cent, industry by
9.3 per cent and
services by 8.5 per cent this fiscal and all these segments would account for the
higher growth
at 8.5 per cent as compared to the earlier projection of 8.2 per cent growth.
• The third area in which medium-term policy initiatives were necessary so as to
maintain the
growth momentum was the large gaps in physical infrastructure. “In the power
sector, as against
a planned target for creating 78,740 MW, it appears we would be lucky to get
62,000 MW by
March 2012. This rests on large capacities being commissioned in 2010-11 and
2011-12. The
failure to create physical infrastructure in time has not only been persistent, but
has also been a
significant contributor to lower competitiveness,” the PMEAC said
WTO rules against EU on hi-tech products'
• The World Trade Organization has ruled in favour of the U.S., Japan and
Taiwan in their
complaint against EU duties on high-technology products.
• The plaintiffs had accused the European Union of violating the WTO's
Information Technology
Agreement by imposing duties on imports of products including television set-top
boxes, flatscreen
panels and printers with multiple functions.
• Brussels countered that the agreement did not apply since the products in
question had taken on
multiple functions.
• For example, the EU maintains that the flat-panel computer monitors cited by
the United States
should properly be classified as video monitors because they can also be used
with DVD
players and thus fall out of the scope of the WTO agreement.
Suzlon Energy to focus on emerging markets
• With the wind energy industry showing signs of a pick-up, Suzlon Energy, the
largest wind
turbine company in India, is receiving a spate of new orders recently.
• Out of 5,000 MW of capacity created by the company, Tamil Nadu accounted
for 1,500 MW.
• As on May 2010, the order book of Suzlon Energy alone is around 1,130 MW
with domestic
orders accounting for 230 MW. The company is looking at promising new
markets for
improving its order book further.
BP changes head amid huge loss
• To save what is left of its reputation, BP has announced that its gaffe-prone
British CEO, Tony
Hayward, will be replaced by an American, the head of mop-up operations in the
Gulf of
Mexico Robert Dudley.
Japanese steel major JFE to take 14.99 % stake in JSW
• JSW Steel announced that it would be making a preferential allotment for a
14.99 per cent stake
www.upscportal.com
to Japanese steel manufacturer JFE Steel Corporation.
• JSW Steel Vice-Chairman and Managing Director Sajjan Jindal said the deal
would result in a
minimum accrual of Rs.4,800 crore and a ‘potential accrual' of Rs.5,700 crore to
the company.
The agreement would enable JFE to appoint a non-executive director on the JSW
Steel board.
Cos sign CBM contract for 7 blocks
• The Centre signed contracts with companies for the seven blocks awarded
under the fourth
round of Coal Bed Methane (a natural gas) Policy-IV having a resource potential
of 330 million
cubic metres of gas which are expected to attract over $150 million investment.
• While four blocks have gone to Essar Oil, one each has been bagged by Great
Eastern Energy
Corporation, Arrow Energy (AS) Pte Ltd. and Oil India consortium, and Arrow
Energy (ST) Pte
Ltd and Tata Power Company consortium.
• These seven blocks are in Assam, Chhattisgarh, Jharkhand, Madhya Pradesh,
Orissa and Tamil
Nadu. With the conclusion of the fourth round of CBM, the government has
signed a total of 33
CBM contracts till date.
UIDAI, Petroleum Ministry sign MoU
• The Ministry of Petroleum and Natural Gas signed a memorandum of
understanding (MoU)
with the Unique Identification Authority of India (UIDAI) to facilitate close
coordination and
cooperation on the latter's ambitious AADHAR project, which is primarily aimed
at curbing
pilferage of PDS kerosene and domestic LPG.
• As per the MoU, oil marketing companies IOCL, BPCL and HPCL will act as
registrars for the
UIDAI on behalf of the Ministry for implementation of the project.
• The 16-digit unique number that the UIDAI will generate will be combined with
the smart card
project of the Ministry for distribution of PDS kerosene and domestic LPG
through biometric
identification of beneficiaries.
• UIDAI chairman Nandan Nilekani said Rs.50 would be given to the oil
companies for every
enrolment done. At present, there were more than 11.5 crore LPG customers in
the country and
it is envisioned that by the year 2015, there would be 16 crore LPG customers.
SEBI allows currency options in stock exchanges
• The Securities and Exchange Board of India (SEBI) allowed exchanges to
introduce currency
options on the U.S. dollar pairing with the rupee, a development that provides
another
alternative to corporates for hedging against currency fluctuations.
• “It has now been decided to permit introduction of options on U.S. dollar-
Indian rupee spot rate
on the currency derivatives segment of stock exchanges,” SEBI said in a circular.
• According to the circular, only dollar-rupee contracts of size $1,000 will be
allowed.
• With this, now exchanges like the National Stock Exchange and MCX (Multi-
Commodity
Exchange) will have to seek regulatory approval, following which they would go
live.
• Currency option is a derivative instrument that gives the owner the right, but
not the obligation,
to exchange money denominated in one currency into another currency at a pre-
agreed
exchange rate on a specified date.
• However, the outstanding positions will be in dollar terms. The available
contracts will be: three
serial monthly contracts followed by three quarterly contracts of the cycle
March/June/September/ December.
www.upscportal.com
Economy and Energy: August 2010

Pranab: no move to create super regulator
• Finance Minister Pranab Mukherjee allayed the apprehensions of some
Opposition members
that the government was trying to compromise the independence of regulators
like the
Securities and Exchange Board of India,, the Insurance Regulatory and
Development Authority
(IRDA), PFRDA, the Reserve Bank of India by setting up a joint committee
headed by the
Finance Minister as the authority to whom the dispute could be referred.
• The legislation was brought with an idea to settle the dispute between two or
more regulators
after they failed to settle it bilaterally, he said replying to the debate on the
ordinance
replacement Bill — Securities and Insurance Laws (Amendment and Validation)
Bill, 2010. “It
is not a case of dispute between the government and the regulator but between
two or more
regulators.” The joint committee would only function with the consent of
Parliament which was
the ultimate authority and there was no move from the government to create a
super regulator.
• Referring to SEBI-IRDA spat, he said while SEBI had asked 14 insurance
companies against
investing in mutual funds without its approval, IRDA had maintained that the
companies could
continue with the practice.
• This misunderstanding between the two regulators was on since January but
the government
issued ordinance in June.
• Initially the two were asked to settle the matter among themselves but when it
did not happen,
the Ordinance was issued, he said.
Adani buys Galilee coal block in Australia
• Gautam Adani-led Adani Enterprises Ltd. (AEL) entered into a pact with
Australia's Linc
Energy to buy the latter's coal assets for Australian dollar 500 million (about
Rs.2,100 crore).
• The royalty payments are estimated at A $2.5 billion (about Rs.10,500 crore),
taking the overall
deal size to Rs.12,600 crore.
• In the recent past, Essar Power bought a coal mine in Indonesia and ICVL, the
PSU consortium
of Coal India, SAIL and NTPC among others, is also scouting for overseas coal
mines. Of late,
Adani has been focussing on its power business and it hopes to achieve
generation capacity of
more than 16,000 MW by the end of 2013.
Centre to acquire RBI's stake in Nabard and National Housing Bank
• After acquiring the Reserve Bank of India's stake in State Bank of India, the
government plans
to pick up the central bank's stake in the National Bank of Agriculture and Rural
Development
(Nabard) and housing finance regulator National Housing Bank (NHB).
• There would be a cash outgo of Rs.1,900 crore for the acquisition of RBI's
stake in both these
institutions and the government has sought Parliament's approval for the
purchase.
• “For making provision for transfer of RBI shareholding in Nabard (Rs.1,450
crore) and NHB
(Rs.450 crore) to the Union Government at the holding cost of Rs.1,900 crore.
This will entail
cash outgo,” the first supplementary demands for grants tabled in Parliament
said.
• At present, the RBI holds a stake of about 72.5 per cent in Nabard and the
remaining lies with
the government. On the other hand, the NHB is wholly-owned by the RBI.
• Nabard, with a paid-up capital of Rs.2,000 crore, was set up as an apex
development bank with
the mandate of facilitating credit flow for promotion and development of
agriculture, smallscale
industries, cottage and village industries, handicrafts and other rural crafts.
• It was the Narasimhan Committee that recommended the transfer of RBI's
stake in State Bank
of India, Nabard and NHB to the government to differentiate the central bank's
role as the
owner of banks and the sector regulator.
• In 2007, the government acquired the 59.73 per cent stake held by the RBI in
the country's
largest bank, SBI, for Rs.35,531.33 crore.
RIL buys 60 % in Marcellus Shale
• Reliance Industries Limited (RIL) said it would acquire a 60 per cent interest in
Marcellus
Shale acreage in Central and Northeast Pennsylvania for a total consideration of
$392 million.
The shale acreage is now held by Carrizo and ACP II Marcellus LLC (an affiliate of
Avista
Capital Partners) in a 50:50 joint venture. Pursuant to the transaction, Reliance
will acquire 100
per cent of Avista's interest and 20 per cent of Carrizo's interests in the joint
venture.
• Reliance Marcellus II, LLC, a subsidiary of RIL, has signed definitive transaction
agreements to
enter into a Marcellus Shale joint venture with U.S. based Carrizo Oil and Gas.
• Upon completion of the transaction, Reliance and Carrizo will own 60 per cent
and 40 per cent
interests, respectively, in a newly formed joint venture between the companies.
Centre plans to divest stake in ONGC, IOC
• Seeking to open the big ticket window of disinvestment, the government has
proposed to raise
Rs.21,000 crore through the sale of 5 per cent government equity in Oil and
Natural Gas
Corporation (ONGC) and 10 per cent in Indian Oil Corporation (IOC) in the
current fiscal.
• Officials said IOC would be the first to be disinvested but only after it makes an
initial public
offer of 10 per cent to raise Rs.9,500 crore for part-financing its capital
expenditure programme
estimated at Rs.75,000 crore.
• This would be followed by sale of 10 per cent government holding amounting
to 19 crore shares
to raise Rs.7,600 crore. Similarly, ONGC will disinvest 5 per cent stake to raise
about
Rs.13,000 crore at the current market price of Rs.1,233 a share. The
government now holds
74.14 per cent in the oil major which would come down to 69.14 per cent after
disinvestment.
Five-member panel to select Tata successor
• The board of Tata Sons has announced the names of the members constituting
the selection
committee set up to decide on a suitable successor to Ratan N. Tata, who is due
to retire as
Chairman of the Tata Group in December 2012.
• The Tata Sons board has formed a five-member selection committee, which
includes N. A.
Soonawala, Shirin Bharucha, R. K. Krishnakumar, Cyrus Mistry and Lord
Bhattacharya.
Task forces to monitor microfinance institutions
• Microfinance Institutions Network (MFIN), a self-regulatory organisation of
microfinance
institutions (MFIs) in India, has decided to set up seven task forces to monitor
and manage the
MFIs and look into credit bureau, transparency, code of conduct, human
resource development,
policy issues, product diversification and media relations.
• Vijay Mahajan, President of MFIN, said the organisation had made significant
progress in
transparency and credit bureau initiatives
U.S. Senate hikes visa fees of Indian firms
• The United States Senate has passed a border security bill that will raise the
visa fees of Indian
companies operating in the U.S. by $2,000 or more, a move that may seriously
impact the
operations of IT-focussed companies such as Infosys, Wipro and the Tata Group.
• The text of the bill for emergency supplemental appropriations for border
security, likely to be
taken up in the House of Representatives next week, says that until September
2014, “The filing
fee and fraud prevention and detection fee required to be submitted with an
application for
admission as a non-immigrant... shall be increased by [$2,250 or $2,000
depending on the
profile of the company] for applicants that employ 50 or more employees in the
U.S. if more
than 50 per cent of the applicant's employees are non-immigrants.”
• The National Association of Software and Services Companies (NASSCOM)
sharply criticised
the bill, estimating the impact on Indian companies could be as high as $200
million to $250
million per annum.
• In a statement, Som Mittal, president of NASSCOM, said: “The money to pay
for this increase
would come primarily from raising fees on H-1B and L-1 visas for highly skilled
workers.
While we understand the need for heightened border security, we believe that
the extra fees will
produce negative consequences for both U.S. and Indian companies.”
Panel suggests Credit Relief Plan for small farmers hit by natural
calamity
• The Parliamentary Standing Committee on Agriculture has urged the Centre to
come up with a
Credit Relief Plan especially for small and marginal farmers affected by natural
calamities like
drought or floods. The plan should come into operation automatically in such
eventualities,
more so, in the context of the alarming frequency with which the natural
calamities were
occurring due to climate change, the Committee has said in its eleventh report
tabled in
Parliament.
• The committee, chaired by Basudeb Acharia, has urged the government to
accelerate the
Rainfed Area Development Programme, set up a National Seed Bank, a National
Fodder Policy,
and above all, a National Contingency Plan to meet situations occurring from
drought, floods
and other such eventualities.
• The committee has suggested that the contingency plans for the 127 agro-
climatic zones that are
being worked out should be factored into the National Contingency Plan for
facilitating microlevel
implementation as and when the situation arises.
• The government must also be prepared with alternate varieties of seeds that
are suitable for
early, late of mid-sowing. For this the government must prepare a buffer of
seeds not only with
government agencies but also with individual farmers. “A National Seed Bank
will go a long
way in this direction,'' the panel has recommended.
• Noting that lack of fodder was the first casualty in a drought situation, the
parliamentarians
appreciated provision of mini fodder kits to farmers and the fact that
government allowed
Rashtriya Krishi Vikas Yojna funds to be utilised for purchase of fodder in the
drought of 2009.
Yet it expressed concern over the shrinking of land area for cattle grazing.
• Seeking implementation of the Soil Health Cards scheme for determining the
health of a
farmer's field, the panel noted that the nutrient-based fertiliser scheme that had
become
operational from April 1, would not serve much purpose in the absence of
authentic field data
on soil fertility. The panel felt that the Diesel and Power Subsidy scheme that
compensated
farmers for higher use of diesel to pump out more underground water during
drought last kharif
should have been better handled.
Controversial ordinance set to become law
• On August 2, the Securities and Insurance Laws (Amendment and Validation)
Bill, 2010, was
passed in the Lok Sabha. Contrary to what many were hoping for, the
government is not
allowing the controversial June 18 ordinance to lapse. The Bill clearly
demarcates the
regulatory turf: the unit-linked insurance plans (ULIPs) will be regulated by the
IRDA.
• A new statutory joint committee to be chaired by the Finance Minister will be
set up. It will
settle all regulatory disputes over hybrid financial products.
• The RBI Governor will be the Vice-Chairman of the new committee, a step
above other
financial regulators. However, it is clear that the Finance Minister will have the
last say.
PSEs exempt from 25 % public holding norm
• In a major drawdown from its stringent listing norms for public sector
enterprises (PSEs)
announced in June this year, the government scaled down the minimum public
shareholding to
10 per cent from the 25 per cent mandated earlier to stay listed.
• Ostensibly, the changes made in the Securities Contracts (Regulation)
(Amendment) Rules.
2010 notified on June 4 is aimed at pre-empting a stampede of public offerings
which would
have resulted in extreme volatility in the stock markets.
• In a fresh notification issued, the Department of Economic Affairs (DEA) said:
“Every listed
public sector company shall maintain public shareholding of at least 10 per
cent...a listed public
sector company which has public shareholding below 10 per cent shall increase
its public
shareholding to at least 10 per cent”.
• With the new norms now in place, about 20 PSEs will not have to mandatorily
bring down the
Centre's equity holding in them. These include SJVNL, Power Finance Corp,
Nalco, PowerGrid
Corp, NHPC, SAIL, NTPC, United Bank of India, IOC, and Oil India, among
others.
Chop-shop' remark causes outrage
• The United States-India Business Council has issued a statement of searing
criticism against a
Senator who described Indian IT major Infosys as a ‘chop-shop.'
• Ron Somers, head of the USIBC, said “It is totally outrageous in this day in
age, when the
world is so interconnected by the Internet, that draconian measures would be
floated by the U.S.
Congress that tar-brushes Indian companies as ‘chop shops'.”
China overtakes Japan to become No. 2 economic power
• After three decades of spectacular growth, China passed Japan in the second
quarter to become
the world's second-largest economy behind the United States, according to
government figures
released early.
• The milestone was reached, when Tokyo said that in the second quarter, the
Japanese economy
was valued at about $1.28 trillion, slightly below China's figure of $1.33 trillion.
The gross
domestic product of the United States was roughly $14 trillion in 2009.
• For Japan, whose economy has been stagnating for more than a decade, the
figures reflect a
decline in economic and political power. Japan has had the world's second-
largest economy for
much of the past four decades, according to the World Bank. And during the
1980s, there was
even talk about Japan's economy some day overtaking that of the United States.
Vedanta to acquire 60 % in Cairn India for $9.6 billion
• London-listed Anil Aggarwal-led mining group Vedanta Resources announced
its decision to
acquire a majority of up to 60 per cent stake in Cairn India for $9.6 billion.
• The deal will give Vedanta Resources access to India's largest onshore oilfield.
Vedanta will pay
$8.48 billion to buy Edinburgh-based Cairn Energy's 51 per cent stake in the
company, the two
firms said in separate statements.
• Vedanta Resources will acquire 31 to 40 per cent interest in Cairn India while
the remaining 20
per cent would be taken by group firm Sesa Goa.
• Vedanta will be the second largest firm after BHP Billiton to diversify from
mining into oil and
gas.
• The zinc, copper and iron ore mining firm will get hold of Cairn India's Mangala
oilfields in
Rajasthan that are now producing 1.25 lakh barrels a day and have the potential
to go up to 1.50
lakh bpd.
• Vedanta's deal will be contingent on government approval, as Cairn's three
producing oil and
gas assets, including the giant Rajasthan fields and seven exploration blocks.
USE to launch trading in currency futures
• United Stock Exchange (USE), India's newest stock exchange for currency
derivatives, said it
would launch its operations in currency futures on August 31.
• “We are commencing operations in currency futures in four currency pairs —
dollar-rupee,
euro-rupee, yen-rupee and pound-rupee from August 31,” Managing Director
and Chief
Executive Officer (CEO) T. S. Narayanasami,said.
• The exchange was promoted by 21 public sector banks and five private sector
banks.
• USE had entered into a strategic partnership with the Bombay Stock Exchange
(BSE), which
holds a 15 per cent stake, to share infrastructure and technical platform, BSE's
Managing
Director & CEO Madhu Kannan, said.
• Apart from banks, Jaypee Capital, MMTC and Indian Potash have also
participated in the
formation of the United Stock Exchange.
Visa fee hike: India may drag U.S. to WTO
• Terming the recent announcement of the U.S. to dramatically hike H-1B and L-
1 visa fee
discriminatory and protectionist, India indicated that it was readying to drag the
U.S. to the
World Trade Organisation (WTO) on the issue.
• “The fee hike is expected to cost Indian companies, mainly IT outsourcing
firms, about $200
million annually. India cannot keep quiet on an issue that hurts its commercial
interests,”
Commerce Secretary Rahul Khullar said
• Under the Emergency Border Security Supplemental Appropriations Act, 2010,
the U.S. has
hiked the fee for certain categories of H-1B and L1 visas by at least $2,000 for
the next five
years stating it would help it foot nearly $550 million, of the proposed
expenditure of $650
million, on increasing security along the U.S.-Mexico border.
India-U.S. clean energy research centre established
• India and the U.S. Formally signed an agreement for cooperation on a joint
Clean Energy
Research Development Centre.
• The agreement follows from the discussions held between Prime Minister
Manmohan Singh
and President Barack Obama during the former's visit to Washington in
November 2009.
• An official statement noted that priority initiatives under the MoU included the
setting up of a
joint research centre to “foster innovation and joint efforts to accelerate
deployment of clean
energy technologies.” The agreement was signed by Indian Ambassador Meera
Shankar and
Deputy Secretary of Energy in the U.S. Department of Energy Daniel Poneman.
Jindal Steel gets land for projects in Bolivia
• Naveen Jindal-owned Jindal Steel, a subsidiary of Jindal Steel and Power,
announced that it had
got 3,000 acres additionally to flag off its $2.1-billion steel and power plant in
Santa Cruz area
of Bolivia.
Exporters, industry welcome new trade policy initiatives
• Exporters, industry and business chambers hailed the new initiatives and sops
worth Rs. 1052
crore announced in the annual supplement of the Foreign Trade Policy (FTP)
stating that these
steps would help India achieve the export target of $200 billion this fiscal.
• In order to give immediate relief, a bonus incentive (over and above the
present benefits) of 2
per cent has been announced by Commerce and Industry Minister Anand
Sharma to various
sectors. The extra sops are 2 per cent of the export value.
• “We are happy that the sectors which were not doing well have been
considered. Extension of
the Duty Entitlement Pass Book (DEPB) Scheme and interest subvention are
welcome steps,”
Federation of Indian Export Organisations (FIEO) President A. Sakthivel said.
Cairn strikes oil in KG basin onshore
• Cairn India said it had struck oil and gas at a block in the Krishna-Godavari
basin, off Andhra
Pradesh coast.
• Cairn India has informed the Bombay Stock Exchange that Cairn Energy India
Pty Ltd.
(CEIPL), a wholly owned subsidiary of Cairn India Ltd., has notified the
Directorate General of
Hydrocarbons (DGH) of a discovery of oil and gas in the Nagayalanka-1z well,
located in the
onshore block KG-ONN-2003/1.
• The block is situated in the Krishna-Godavari basin and was awarded under the
NELP V
bidding round. CEIPL, the operator of the block, has a 49 per cent participating
interest in the
block and ONGC holds the balance 51 per cent participating interest.
SAIL's new unit at Rourkela on stream
• As part of its Rs.70,000-crore expansion programme, Steel Authority of India
Ltd (SAIL)
commissioned a unit procured from Italy-based Danieli at its Rourkela Steel
Plant.
• SAIL Chairman C. S. Verma inaugurated the second ladle furnace of steel
melting shop-II of
Rourkela Steel Plant, the company said in a statement.
• “The ladle furnace is part of a Rs. 197.66-crore scheme for simultaneous
blowing in basic
oxygen furnace (BOF) convertors of steel melting shop-II.
• SAIL is undertaking an estimated Rs.70,000-crore capacity augmentation at all
of its steel
plants. The country's largest steel producer has targeted to install an annual
production capacity
of about 23 million tonnes against the present 14 million tonnes.
• The Rourkela plant produces about two million tonnes of steel and is targeting
to double its
annual capacity in the next two years.
India to fast track free trade agreements with EU, Japan and Malaysia
• With little or no progress in the Doha Round of World Trade Organisation
(WTO) multilateral
trade talks for the last more than one year, India is proactively working on
concluding Free
Trade Agreements (FTAs) with Japan, European Union and Malaysia to expand
its trade basket.
• Union Commerce Minister Anand Sharma said that efforts were on to give a
new push to FTA
negotiations with European Union, Japan and Malaysia and things were expected
to fall in place
within one year.
• Mr. Sharma said before his departure to Vietnam to attend a two-day
Ministerial Meeting of
ASEAN Trade Ministers. India signed trade in goods agreement with the
Association of South-
East Asian Nations (ASEAN) last year. The agreement came into force from
January 1 this year.
However, out of the ten nations that form ASEAN, only four — Vietnam,
Singapore, Thailand
and Malaysia — have operationalised the agreement so far.
DTC Bill on track for implementation
• Unlike the Constitution Amendment Bill on the proposed Goods and Services
Tax (GST) which
remains mired in confusion and controversy owing to the delicate question of
infringing on the
fiscal autonomy of States in indirect taxation, the Direct Taxes Code (DTC) Bill is
on course for
implementation from April 1, 2011.
• Apart from the fact that direct taxes is the sole prerogative of the Centre
without any direct
involvement of the States, the just-in-time Cabinet nod for the DTC Bill has set
in motion the
procedure for the legislative process.
• For one, the first draft had suggested 10 per cent tax on income of Rs. 1.60-10
lakh, 20 per cent
on income of Rs. 10-25 lakh and 30 per cent beyond that. Alongside, however, it
had suggested
tax on some of the long-term saving and investment avenues such as provident
fund which
currently enjoy tax relief even at the time of withdrawal.
• At present, income between Rs. 1.65 lakh and Rs. 5 lakh attracts 10 per cent
tax, while the rate
is 20 per cent for the Rs. 5-8 lakh bracket and 30 per cent for above Rs. 8 lakh.
• On the corporate tax front also, Mr. Mukherjee indicated that the levy is sought
to be retained at
the existing level of 30 per cent, but without any surcharge or cesses on it. This
again, evidently,
is owing to the changes that had to be carried out on the issue of MAT (minimum
alternate tax).
• The Bill seeks to impose MAT at 20 per cent of the book profit as against 18
per cent being
levied currently.
Direct Taxes Code only from April 2012
• In a surprise move and to the disappointment of taxpayers, the government
deferred the
implementation of the Direct Taxes Code (DTC) by a year to April 1, 2012, and
sought to waive
the preferential treatment to women in tax payment in the name of gender
equity.
• Under the Direct Taxes Code Bill, 2010 — tabled in the Lok Sabha by Finance
Minister Pranab
Mukherjee and referred to the Select Committee of Parliament for scrutiny — the
government
has sought to raise the income tax exemption limit from Rs.1.6 lakh to Rs.2 lakh
while retaining
a host of incentives for individuals.
• While senior citizens (above 65 years) will enjoy a higher exemption of Rs.2.5
lakh, women
taxpayers will have no additional relief as they have not been categorised
separately.
• As for corporate taxes, the levy will be at a flat rate of 30 per cent with no
surcharges or cesses.
The minimum alternate tax (MAT) will be levied on book profits at 20 per cent.
U.S. Exim Bank clears loan for Reliance Power
• Reliance Power has won a $917 million loan from the United States Export-
Import Bank
(USEIB) for the purpose of building a coal-fired power plant in India.
• USEIB reportedly reversed an earlier decision to reject the financing request
when its board of
directors unanimously voted to approve the loan for the 3,960 MW Sasan power
plant in
Madhya Pradesh.
NTPC signs MoU with Bangladesh Power
• NTPC signed a Memorandum of Understanding (MoU) with the Bangladesh
Power
Development Board (BPDB) to set up thermal power projects of 1,320 MW in the
neighbouring
country. The outlay on the coal-fired power plants to be set up at Chittagong
and Khulna is
estimated at Rs.13,200 crore. The plants are likely to be installed on a 50:50
equity basis.
• The company's coal requirement is likely touch 165 million tonnes in 2011-12,
of which it may
import 12-15 million tonnes
• NTPC was looking at acquiring coal blocks in Queensland and North South
Wales, Australia,
and had identified 2-3 such properties.
ECONOMY: September 2010

No tax breaks for firms creating jobs outside U.S.
• Persisting with the theme of protecting American jobs, President Barack
Obama in his
latest speech on the economy said that he would press for tax breaks only for
companies
that created jobs on U.S. soil and not those that created jobs abroad.
• His comments also followed in the wake of steps taken by the U.S. Congress to
hike the
fees for H1-B and L visas, mostly requested by Indian companies with U.S.
operations.
Following the passage of this bill and comments by its sponsor, Senator Charles
Schumer,
criticising companies such as Infosys for being “body shops,” Indian companies
and
industry bodies such as National Association of Software and Service Companies
(Nasscom) had warned of negative fallout of protectionism.
Industrial output doubled in July
• Industrial output nearly doubled to 13.8 per cent in July, dispelling fears of a
dip in
demand and giving an impetus to achieving 8.5 per cent economic growth this
fiscal. The
Index of Industrial Production (IIP) data for July, released on Friday, showed
that the
output of capital goods, used by the manufacturing industry, soared to 63 per
cent from
1.7 per cent a year ago. The manufacturing sector output grew 15 per cent in
the month
against 7.4 per cent a year ago, setting at rest doubts on economic expansion
growth.
Concern over Ohio move
• Union Minister for Commerce and Industry Anand Sharma expressed concern
over the
move by the State of Ohio in the United States to ban outsourcing of IT services.
Dhanlaxmi Bank to ramp up NRI deposit base
• The Kerala-based Dhanlaxmi Bank will ramp up its Non-resident Indian (NRI)
deposit
base and devise a strategy to double its business (in the segment) to Rs.1,000
crore by the
end of this fiscal. “We plan to take our NRI deposit base to around Rs.1,000
crore from
the present Rs.400 crore by the end of 2011,” Dhanlaxmi Bank branch banking
& NRI
business head Salil Datar said here recently. The NRI deposit base was around 5
per cent
of the total deposits
RIL completes deal to buy 60% stake in U.S. firm
• Mukesh Ambani-led Reliance Industries Limited (RIL) announced the
completion of its
deal to acquire a 60 per cent stake in the United States-based Marcellus Shale
gas asset
for $392 million.
• RIL had announced on August 5 that it would buy its third Shale gas asset in
the United
States.
• Its subsidiary, Reliance Marcellus II LLC, had signed a definitive transaction
agreement
to enter into a Marcellus Shale joint venture with the U.S.-based Carrizo.
• Carrizo Oil & Gas Inc announced that the company closed its previously
announced joint
venture transaction in the Marcellus Shale with a subsidiary of Reliance
Industries
Limited.
• Joint venture-In connection with the joint venture, Reliance acquired a 20 per
cent
interest in approximately 52,200 net Carrizo acres in Pennsylvania considered
highly
prospective for Marcellus Shale natural gas at a purchase price of $65
million.Reliance
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paid $11.4 million in cash to Carrizo at closing with $1.7 million more expected
later this
year.
Highlights of Direct Taxes Code Bill
• The Federal Bank has announced that its ATM network has been linked to the
IndiaPay
National Financial Switch managed by National Payments Corporation of India
(NPCI).
This is India's largest network of shared ATMs, which connects around 61,200
ATMs
across 44 banks all over India.
No immediate plans to go to WTO court on U.S. visa fee hike issue'
• India said it was trying to sort out the issue of the H-1B and L-1A visa fee hike
and the
outsourcing ban issues through bilateral means with the United States, and had
no
immediate plans to go to the World Trade Organisation (WTO) court.
• The U.S. government recently increased visa fee by $2,000 for certain H-1B
visas and
$2,250 for L-1A and L-1B visas, which India has termed as discriminatory and
against
the spirit of fair trade rules of the WTO. India has also criticised the U.S. State of
Ohio's decision to forbid outsourcing of IT services by government departments.
Doha Round to miss deadlin
• The contentious Doha Round of trade talks of the World trade Organization
(WTO) will
miss the 2010 deadline due to domestic compulsions of U.S. that has made the
agreement
almost impossible.
• Speaking at a seminar organised by the Confederation of Indian Industry on
the issue,
Commerce Secretary Rahul Khullar said the global trade agreement would not
happen
this year as was originally envisaged in the Delhi declaration adopted in
September last
year. “The deal is not going to get done in 2010,'' Mr. Khullar said..
• The multilateral trade agreement under negotiations among 153 members of
the WTO
since 2001 was to be concluded in 2004. Since then, it has missed several
deadlines in the
face of differences between developing and developed countries on giving
commitments
on market opening.
• Recently, the U.S. Congress enacted an Emergency Border Security
Supplemental
Appropriations Act, which hiked the visa fees for short-term Indian IT services
providers.In addition, the U.S. is believed to be considering several more
restrictive trade
measures.
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Wholesale Price Index: new series comes into being
• Consumer items widely used by the middle class like ice-cream, mineral water,
flowers, microwave oven, washing machine, gold and silver will be reflected in
the
new series of WPI inflation to be released. The new series of Wholesale Price
Index
(WPI) for August with additional 241 items and change in the base year from
1993-94
to 2004-05 will be released, a senior Commerce and Industry official said. Better
picture
• With these items, the WPI will measure a total of 676 items against the
existing 435.
“This would give better picture of the price variation,” a senior official said.
BVB to launch chain of restaurants
• Better Value Brands (BVB) has joined hands with Master Chef and gourmet
food expert,
Sanjeev Kapoor, to launch the country's first global chain of Indian restaurants,
called
“Indii.” The Rs. 100- crore joint venture plans to set up 70 Indii outlets across
the
country, and also aims to reach out to the Indian diaspora in different continents
in
the next 12 months, says a release.
Hyundai Motor bags EEPC award
• Hyundai Motor India has been conferred the ‘All India award for export
excellence
2008-09' by the Engineering Export Promotion Council (EEPC). HMIL was
awarded the
Gold Trophy in the large enterprise category, says a release. The Union Minister
of
Commerce & Industry, Anand Sharma bestowed the award to HMIL, at a
function
organised recently in Bangalore, says a release.
Gayatri ties up funds for power project
• Gayatri Projects and Sembcorp Utilities Pte Ltd achieved financial closure for
their
1,320 MW joint venture power project, Thermal Powertech Corporation India
Ltd.,
being set up at Krishnapatnam. Sembcorp is a wholly-owned subsidiary of
Sembcorp
Industries Ltd. The company was executing the Phase-I of the project (2x660
MW) at a
total outlay of Rs.6,869 crore.
Inflation slips to 8.5 % in August under new WPI series
• Switching over to a new series of Wholesale Price Index (WPI) with 2004-05 as
the base
year, the government on Tuesday revealed that headline inflation in August
stood pegged
at a seven-month low of 8.51 per cent as against 9.97 per cent in July under the
old series.
• Since the two WPI series are not comparable in view of the vast difference in
the basket
of commodities and their weight in calculating inflation, data on the old series
released
along with the new index also reflected a drop in the rate of price rise to 9.5 per
cent in
August.
• Under the new WPI series aimed at capturing the price movement in a more
realistic way
in keeping with the times, the decline in inflation was mainly on account of
easing prices
of food items such as vegetables, cereals and pulses.
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Indian Hotels unveils ‘Vivanta by Taj' brand
• The Tata Group's flagship in the hospitality segment, The Indian Hotels
Company Ltd
(IHCL), announced on Tuesday the launch of its new brand, Vivanta by Taj, a
portfolio
of 19 properties across the country in the “upper upscale” segment.
Tata Steel buys into Canadian iron ore mines
• Tata Steel on Tuesday said it would acquire 80 per cent stake in an iron ore
mining
project in Canada for about Rs.1,350 crore, a move that will help the steel
maker boost its
raw material supply.
• The Direct Shipping Ore (DSO) project is owned by Canada-based New
Millennium
Capital Corp, in which Tata Steel holds 27.4 per cent stake. The project contains
64.1
million tonnes of proven and probable mineral reserves.
SAIL, RITES ink pact to float joint venture
• Steel Authority of India Ltd. (SAIL) inked an agreement with RITES, a
subsidiary of the
Indian Railways, for jointly setting up a railway wagon-making unit in Kulti in
West
Bengal at a cost of Rs. 120 crore.
• “The joint venture between the two PSUs is mutually beneficial. It will lead to
many
more such collaborations between them,'' Union Steel Minister Virbhadra Singh
told
reporters here after the signing ceremony.
• “This is a red-letter day in SAIL's history, as every year there is a shortfall of
6,000
wagons. This 50:50 joint venture will help bridge the gap,'' SAIL Chairman C. S.
Verma
said.
• For the project, SAIL will provide its surplus land in Kulti, near Burnpur, in
West
Bengal. The location of the plant would be near the Chittaranjan Locomotive
Works.
SAIL, which has an annual production capacity of about 14 million tonnes, will
also
supply its specialised steel products to the proposed wagon-making unit.
• Railway Minister Mamata Banerjee had earlier said the tentative name of the
factory
would be the Bengal Wagon Industry.
• The present wagon demand in the country is around 25,000 units and it is
expected to
rise further once the dedicated freight corridors start coming up. Meanwhile,
seeking
to further expand their cooperation, International Coal Ventures, a consortium of
PSUs
such as SAIL and Coal India has joined hands with RITES to prepare a feasibility
report
on the possible buyouts of coal blocks in Indonesia and Mozambique.
BoB to take over Memon co-op bank
• Bank of Baroda (BoB) informed the Bombay Stock Exchange (BSE) said that it
has
decided to take over “specific assets and liabilities” of the Mumbai-based Memon
Cooperative Bank Ltd. “Approvals of the Central Government and the Reserve
Bank of
India have been received for the purpose,” it said. The bank will formulate a
scheme
for the take-over, “which will be subject to further approvals of the appropriate
competent authorities.” The RBI had restricted its operations in May 2009.
Memon
Cooperative Bank has 14 branches in Maharashtra and four in Gujarat.
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ABB to acquire Metsys Engineering
• ABB India, announced the acquisition of Bangalore-based Metsys Engineering
and
Consultancy.The deal size is estimated at Rs.8.50 crore.“This acquisition will help
us to
further strengthening our strong position in the metals business and our portfolio
in this
growing sector,” ABB India's Vice-Chairman and Managing Director Biplab
Majumder
said in a statement.
Vishal to sell retail, wholesale divisions
• Discount retailer Vishal Retail has said that it would sell its retail trading
business to
Shriram Group, and the wholesale division to the private equity firm TPG, for a
combined value of Rs.100 crore. In an announcement to the stock exchanges,
Vishal
Retail said the sale, however, does not include the firm's properties in Hubli,
Kolkata,
Dehradun and Jabalpur. Shriram Group is a Chennai-based diversified group,
which
deals in property, finance and insurance.
KEC acquires Jay Railway Signalling
• A week after sealing the $95-million buyout of U.S.-based SAE Towers
Holdings, KEC
International said it was acquiring home-grown Jay Railway Signalling for close
to
Rs.14 crore. “This is our second acquisition in about a week's time. We have
signed a
definitive share purchase agreement to acquire Jay Railway Signalling Pvt Ltd for
Rs.13.96 crore,” KEC MD & CEO Ramesh Chandak told.
Star Union Dai-ichi launches three products
• Star Union Dai-ichi Life Insurance Company has come out with a new
traditional
endowment product ‘Defined benefit endowment plan'. The product ensures
regular
tax -free monthly benefit for 15 years. The company has also launched two new
unitlinked
insurance producdts — Dhan Suraksha 3 and Dhan Suraksha 3 Premium —
which
comply with new IRDA regulations, says a releas
Olive Telecom ties up with BSNL
• Olive Telecom, a leading convergence solutions device developer, has
announced a
strategic tie-up with Bharat Sanchar Nigam Ltd. (BSNL) offering India's first 3G
embedded Zipbook V-X108 bundled with BSNL 3G connectivity nationwide.
Priced at
Rs.20,999, the Olive Zipbook is powered by Intel Pentium N450 processor and
the users
have the Windows 7 OS with Windows works, live and security essentials, says a
company release.
Vedanta open offer for Cairn awaits SEBI nod
• Market regulator Securities and Exchange Board of India (SEBI) has not yet
approved
the open offer made by Vedanta Group to Cairn India shareholders, even as the
target
company formed a two-member panel to look into the offer made to minority
shareholders.
• Billionaire Anil Agarwal-led Vedanta Group is buying Cairn Energy's 40-51 per
cent
stake in Cairn India and has made an open offer for an additional 20 per cent
stake which
will take the deal size to $9.6 billion.
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EPF interest hiked to 9.5%
• Over 4.4 crore workers and employees of the public and private sectors in the
country
will receive an interest rate of 9.5 per cent instead of 8.5 per cent for 2010-11
for their
savings in the Provident Fund account.
ICICI Bank, Kingfisher launch credit card
• ICICI Bank and Kingfisher Airlines announced the launch of ICICI Bank
Kingfisher Airlines
MasterCard Credit Card. The card is powered by a uniquely rewarding miles
programme coupled with exclusive travel and lifestyle privileges for discerning
customers. To cater to the different needs of customers, the card is available in
3
variants — World, Platinum and Titanium — according to a statement issued
here.
Exports rise 23 % in August
• Exports grew by 22.5 per cent at $16.64 billion in August on improved global
demand
and imports too jumped at a higher pace of 32.6 per cent at $29.7 billion,
leaving a
worrisome trade gap of $13.06 billion.
• However, the renewed demand for Indian goods in western and European
markets has
given hope to policymakers of achieving the $200-billion export target for the
current
fiscal.
• “Things are going so far according to our plan and we should be able to reach
our exports
target of $200 billion,'' Commerce Secretary Rahul Khullar told reporters.
Russia, Norway sign Arctic border pact
• Russia and Norway have signed an Arctic border pact, ending a 40-year
dispute over an
energy-rich area in the Barents Sea.
• The Treaty on Maritime Delimitation and Cooperation in the Barents Sea and
the Arctic
Ocean was signed in the Russian northern seaport of Murmansk by the Russian
and
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Norwegian Foreign Ministers in the presence of Russian President Dmitry
Medvedev and
Norwegian Prime Minister Jens Stoltenberg.
No conflict of interest: Srinivasan's counsel
1. In the Indian Premier League and its Managing Director N. Srinivasan being
the
Secretary of the Board of Control for Cricket in India (BCCI), argued senior
counsel
Rohinton Nariman, appearing for Mr. Srinivasan in the Supreme Court.
RBI hikes key policy rates to tame inflatio
• In an aggressive move to tame inflation and inflationary pressure, the Reserve
Bank of
India raised the indicative short-term lending (repo) rate by 25 basis points to 6
per
cent from 5.75 per cent and the borrowing (reverse repo) rate by 50 basis points
to 5
per cent from 4.5 per cent with immediate effect.
• The repo rate is the rate at which the RBI lends money to banks and the
reverse repo
rate is the rate at which banks park their funds with the central bank.
• This is the first mid-quarter policy review since the RBI said it would increase
the
frequency of its policy reviews to eight from four in a year.
• These measures, according to the central bank, would “contain inflation and
anchor
inflationary expectations without disrupting growth and reduce the volatility in
overnight call money rates and strengthen the monetary transmission
mechanism.”
The RBI said in its Mid-quarter Monetary Policy Review.
Cabinet approves Bill to make FMC autonomous
• The Union Cabinet approved for introduction in Parliament the Forward
Contracts
(Regulation) Amendment Bill, 2010, that amends the Forward Contract
(Regulation) Act
and the Multi-State Cooperative Societies (Amendment) Bill, 2010, that seeks to
improve the accountability of cooperatives. Both Bills will be tabled in the next
session of Parliament.
• The FC(R) Act, 1952, provides for the regulation of commodity futures markets
and the
establishment of the Forward Markets Commission (FMC).
• The proposed amendments will enable the FMC, as a regulator, to become an
autonomous body with powers to regulate the market on the lines of the
Securities
and Exchange Board of India. At present it functions under the Department of
Consumer Affairs.
Videocon partners Twitter
• Videocon Telecommunications has entered into an agreement with Twitter to
serve the
communication needs of Twitter users. Videocon customers can stay connected
to the
real time information flow regardless of the location and can tweet by a single
SMS
said, Kevin Thau, Director of Business Development-Twitter, in a release.
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Mines: 26 p.c. of profit for affected people
• The Group of Ministers, headed by Finance Minister Pranab Mukherjee, cleared
the
draft mining bill, which makes it mandatory for miners to share 26 per cent of
their
profits with the people affected by their projects.
• “It is largely approved. One more sitting of the GoM remains, and after which it
will go
to the Cabinet. Whatever we have suggested has by and large been approved,”
Union
Minister for Mines B.K. Handique told journalists after the meeting.Senior
officials said
the Union Ministry of Mines would work on the final draftof the bill.
EU bans import of branded Indian honey
• The European Union has banned the import of branded honey from India after
laboratory
tests showed a high level of lead and antibiotics in the samples, according to Asit
Tripathy, chairman of the Agricultural and Processed Food Products Export
Development
Authority. Proposes a fund, District Mineral Foundation, and the beneficiaries will
be
paid out of it.
India exhorts G-20 nations to coordinate policies
• India exhorted the G-20 member countries to work together to support a
wellfunctioning
international economy by coordinating their policy actions in a manner
that can ensure strong, sustainable and balanced growth.
• Delivering his keynote address at a conference on ‘International cooperation in
times
of global crisis: Views from G-20 countries. Finance Minister Pranab Mukherjee
pointed
out that the financial and economic crisis of 2007-09 had not only exposed the
fragility
of existing global financial and economic institutions and the limitations of
existing
macro-economic policy tools but had also provided an opportunity to the world
for
new thinking in the world of finance and globalisation.
Bharti ropes in IBM for African operations
• Bharti Airtel said it had tied up with technology major IBM for managing its
computing
technology and services for its African operations spanning 16 countries. The
strategic
partnership would enable Bharti Airtel to scale up its network and systems to
cater to
more than 10-crore African customers by 2012.
Jivo Wellness opens second canola oil plant in Delhi
• Jivo Wellness said it was aiming for Rs.100 crore sales over the next two years
from its
‘ Jivo' canola edible oil brand.
• The company, which has tied up with Canada-based Richardson Oilseed Ltd.
for
sourcing canola oil, opened its second bottling plant in the capital.
BHEL secures major orders
• Breaking the myth that the company was piggy bank ridding on the back of
orders from
public sector undertakings (PSUs), Bharat Heavy Electricals Ltd. (BHEL) said it
had
secured 90 per cent of the Rs.59,037-crore orders from clients in the private
sector.
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Essar Steel's retail initiative
• The retail business of Essar Steel through hypermart and expressmart formats
contributes
in good measure to its revenues, company CEO Malay Mukherjee said.
With good monsoon, Centre expects better grain output
• With good monsoon this season, the country expects the grain production
during the
2010-11 crop year to touch, or even exceed, the last best level of 2008. Grain
production
during 2008-09 was 234.47 million tonnes. During 2009-10, the output is
expected to be
about 218 million tonnes
Duty drawback rates slashed for exporters
• The Central Board of Excise and Customs (CBEC) has decided to reduce duty
drawbacks
(tax refund) for exporters of leather, textiles, sports and some other items by up
to 30 per
cent.
• In its new notification, the CBEC has said the new rates will be effective from
September
20.
Shree Textiles opens Linen Club showroom
• Linen Club, the premium brand from Jaya Shree Textiles, a unit of Aditya Birla
Nuvo,
plans to have 100 exclusive showrooms in two years to meet the surging
demand for
linen, according to S. Krishnamoorthy, President, Textile Division, Aditya Birla
group.
India emerging as a major outsourcing hub for engineering services
• The automotive industry will start outsourcing 40 per cent of its engineering
activities to
the engineering service providers by 2015. Nearly 15 per cent of the total
outsourced
automotive engineering services were catered to by subsidiaries of Indian
original
equipment manufacturers
Monetary policy evokes renewed interest
• Last week was eventful for the Reserve Bank of India and its monetary policy.
The
scheduled Mid-quarter Monetary Policy review took place. Two days earlier, the
Centre
announced a new series of Wholesale Price Index (WPI) to measure inflation.
• The connection between the two is fairly obvious. The Monetary policy has
traditionally
been trying to balance its two key objectives of maintaining price stability and
providing
credit for the real sector. Recently, the focus of the policy has shifted towards
controlling
inflation at all costs. The new measure, claimed to capture the rate of price rise
more
accurately, is obviously relevant to the RBI.
Change in name of insurance JV to help boost business
• The recent change in the name of IDBI Fortis Life Insurance Company Ltd., a
joint
venture floated by IDBI Bank, Federal Bank and Fortis Insurance International,
to IDBI
Federal Life Insurance Company Ltd., is expected to help boost the company's
operations
in Kerala. Federal Bank has a very strong presence in South India, particularly in
its
home State, Kerala.
• With its brand name coming into the title of the insurance company, Federal
Bank
expects to grow its insurance business at a much faster pace in the State, its
officials said.
• U.S. exited recession in June 2009
• U.S. President Barack Obama speaks at a discussion on jobs and the economy
hosted
byCNBC in Washington.
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• The U.S. economy exited recession in June 2009, the National Bureau of
Economic
Research (NBER) said
Private sector can help meet skilled workforce target
• Finance Minister Pranab Mukherjee said India was faced with a major challenge
of
creating a skilled workforce of 150 million by 2022 and the National Skill
Development
Corporation (NSDC) had made a good beginning in this regard.
Proposal to set up fertilizer plants
• The Oswal Chemicals and Fertilisers Limited has offered to set up Rs.5,000-
crore urea
plant and Rs.2,000-crore di-ammonium phosphate plant in the State. The offer
was made
by Abhay Oswal, chairman and managing director of Oswal Chemicals and
Fertilisers to
Chief Minister K. Rosaiah during their meeting
OVL bids for two new Russian oil fields
• ONGC-Videsh Ltd. (OVL) has bid for Russia's strategic Trebs and Titov oil
fields, even
as its proposed bidding partner, Rosneft, has pulled out of the race.
• OVL submitted its application through Nord Imperial, which is part of Imperial
Energy,
an OVL subsidiary in Russia, hours before the bidding closed.
• The Indian company is the only foreign bidder competing for what has been
described as
a “jewel” among the Russian oil reserves. OVL faces tough competition from five
Russian rivals — LUKOIL, Russia's No.2 oil producer, TNK-BP, half-controlled by
British Petroleum, Gazprom, Russia's natural gas monopoly, Surgutneftegaz,
Russia's
fourth-largest oil producer, and mid-sized firm Bashneft.
Cairn finds oil in Greenland
• U.K.-based Cairn Energy announced that it had made its first oil discovery off
the coast
of Greenland.
• Edinburgh-based Cairn said its Alpha-1S1 well in the sea between Greenland
and Canada
found oil over a 400-metre section and encountered gas reserves, the company
said
IBM to offer IT support services
• IBM said it had signed a 10-year business transformation and information
technology
(IT) services agreement with Jet Airways. Valued at $62 million, the agreement
will help
Jet Airways achieve significant growth by aligning the company's IT with
business
strategy.
Reliance Brands' venture with Italian firm
• Ermenegildo Zegna Group, a leader in luxury menswear and one of Italy's
family-driven
enterprises, and Reliance Brands, a part of the Reliance Group, have established
a
51:49 joint venture to develop the Zegna brand in India. In the five-year period
2010-
15, more than ten stores across six to seven cities will be opened.
Crisil to buy Pipal for $13 m
• Crisil has signed an agreement to purchase the business of Pipal Research
Corporation
(Pipal), a leading player in the knowledge process outsourcing (KPO) industry for
a
consideration of $12.75 million.
• Crisil's KPO division, Irevna, has consistently been ranked as the leading
financial
services and investment KPO firm by the Datamonitor Black Book of
Outsourcing. The
Irevna-Pipal combination will be uniquely positioned in the high-end analytical
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offshoring space with the widest range of services, geographic locations, and
customer
diversity. Headquartered in Chicago, Pipal's services, clients and delivery
locations are
complementary to Irevna's, enabling the combine to strengthen its leadership in
the KPO
industry.
FII investment cap raised by $10 b in debt markets
• Aimed at bridging the financing gap in infrastructure business and ensuring
India's
growing attractiveness as an investment destination, the government raised the
cap on
investment by foreign institutional investors (FIIs) in the country's debt and
bond markets
by $10 billion to $30 billion.
• According to an official statement here, FIIs will now be allowed to invest up to
$5
billion more in both government bonds and corporate papers after they reach
the existing
cap of $5 billion and $15 billion in the two instruments, respectively. Besides,
FIIs are
permitted to invest $5 billion in bonds of infrastructure companies and
government bonds
with a residual maturity of over five years.
JSW Steel gets Rs.4,800 crore from Japanese firm
• JSW Steel has received Rs.4,800 crore from JFE Holdings of Japan following a
deal in
July this year when JSW sold a 14.99 per cent stake to JFE.
Taj unveils new brand in Sri Lanka
• Taj Hotels Resorts and Palaces announced ‘brand new architecture' for its
existing chain
in Sri Lanka and said that it would look for more sites to expand in the post-war
island
nation. Currently the group has three properties in Sri Lanka. Five-star hotels in
Colombo
and Bentota, a coastal town 65 km south of the Capital, and a four-star hotel at
Seeduwa
near the international airport.
Mahindra Satyam to delist ADRs
• Satyam Computer Services Limited (Mahindra Satyam) announced that it has
notified the
New York Stock Exchange (NYSE) of its intent to delist its American Depositary
Receipts (ADRs).
• A release said, in accordance with the rules and regulations of the U.S.
Securities and
Exchange Commission (SEC), the company intends to file Form 25 (Notification
of
removal from listing) on or about October 4. The company anticipates that the
delisting
of its ADRs from the NYSE would be effective on or about October 14.
Efforts on to expand trade with Canada
• Seeking further strengthening of the strategic partnership between the two
countries,
Union Commerce and Industry Minister Anand Sharma said that bilateral trade
between
India and Canada will triple to $15 billion in the next five years.
• Mr. Sharma, who is currently on a visit to Canada with a high power business
delegation,
also held discussions with the Canadian International Trade Minister, Peter Van
Loan at
Ottawa, on India's determination to gain access to BlackBerry corporate e-mails
and its
threat to ban RIM (Research-In-Motion) if it is denied that access. India is just
one of
several countries that have demanded access to encrypted data over concerns
about
security and cultural sensitivities.
BPCL to diversify into gas, power
• Bharat Petroleum Corporation Ltd (BPCL) has chalked out a five-year strategy
to
diversify its business into other core areas like gas, exploration and production,
power
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generation, increasing its market share and refining capacity, a top company
official
said.
Pranab to launch LIC's Swavalamban scheme today
• Finance Minister Pranab Mukherjee is scheduled to formally launch the
‘Swavalamban
Scheme' of Life Insurance Corporation (LIC) at Murshidabad in West Bengal.
• The Centre has already approved the operational guidelines for the scheme
which was
announced by Mr. Mukherjee in his budget speech for 2010-11. The scheme is
applicable
to all citizens in the unorganised sector who join the New Pension Scheme
(NPS), subject
to their meeting the eligibility criteria, an official statement said here. The
scheme is to be
funded by grants from the Centre.
IDFC launches infra bonds
• Infrastructure Development Finance Company (IDFC), which was recently
accorded the
infrastructure finance company status by the Reserve Bank of India, launched
the
country's first tax-free infrastructure bonds to raise Rs.3,400 crore.
Unilever to buy Alberto Culver
• Consumer goods major Unilever said it would acquire U.S.-based Alberto
Culver
Company for $3.7 billion in an all cash deal, a move that would help in
strengthening
its global position in both hair care and skin care categories.
Kuwait evinces interest in acquiring stake in Indian Oil Corporation
• Eyeing the disinvestment lined up by the UPA-II in Indian Oil Corporation
(IOC),
Kuwait's Petroleum Minister Sheikh Ahmad al-Abdullah al-Sabah expressed the
desire of
his Government to pick up a stake in state-run IOC if the Government opts for
strategic
sale
Supreme Court refuses stay for Vodafone
• The Supreme Court refused to offer any immediate relief to Vodafone, which
has
challenged the Bombay High Court order allowing the government to tax the
company's
$11-billion deal with Hutch.
• The Income-tax Department had raised a demand for Rs.12,000 crore as tax
on the
2007 deal, worth about Rs.55,000 crore.
Reliance Capital plans to enter banking
• Reliance Capital plans to enter the banking sector once the Reserve Bank of
India (RBI)
is ready with its final guidelines for new banking licence.
ADB upgrades India's growth forecast
• Asian Development Bank (ADB) upgraded India's growth forecast for the
current fiscal
to 8.5 per cent from 8.2 per cent in April this year. It, however, expressed
concern over
persistent high inflation and rising value of rupee that could undermine future
economic
expansion.
Tyco to merge Indian energy business into Raychem RPG
• Raychem RPG Ltd. (RRL), a 50:50-joint venture between U.S.-based Tyco
Electronics
(TE) and RPG Enterprises, announced that TE would integrate its energy
business in
India into RRL, thereby measures. creating a single entity.
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International coir fair in Alappuzha in November
• The State Coir Development Department, in association with various
departments and
agencies, will organise an international coir fair from November 25 to 30 in
Alappuzha.
ONGC seeks legal opinion on Cairn-Vedanta deal
• State-owned Oil and Natural Gas Corporation (ONGC) is learnt to have sought
legal
opinion from the Solicitor General of India on its right and legal position in the
$9.6
billion Cairn-Vedanta deal which has run into trouble with the authorities.
Aircel to offer Apollo healthcare services
• Aircel launched the first tele-healthcare delivery on mobile in association with
the Apollo
Hospitals Group. ‘Aircel Apollo Mobile HealthCare' will address the healthcare
needs of
the masses through tele-medicine, providing online interactive healthcare in
real-time
basis by utilising modern technology and telecommunications.
Centre rejects GST's alternative model
• The Centre has rejected the alternative model of Goods and Services Tax
(GST)
suggested by the empowered panel of State Finance Ministers and a few BJP-
ruled
States, which was suggested as a strategy to obviate the need for amendment
to the
Constitution.
Three-fold rise in current account deficit
• India' current account deficit, representing net flow of income out of the
country
barring capital movements, surged three-fold to $13.7 billion in the April-June
quarter
over the same period last year.
• The increase in current account deficit (CAD) during the quarter is due to
higher
imports because of economic recovery and larger payments overseas for certain
services, according to the data on Balance of Payments (BOP) released by the
Reserve
Bank of India (RBI)
Food inflation surges to 16.44 per cent
measures.
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• Continuing its march for the fifth straight week, food inflation surged further to
16.44 per
cent for the week ended September 18 from 15.46 in the previous week, mainly
driven by
higher prices of essentials following supply disruptions on account of heavy rains
and
floods
SBI hikes deposit rates
• State Bank of India (SBI) revised upwards its deposit rates by 25-75 basis
points for
various maturities, effective October 1.
• However, the deposit rates for 15-45 days and 46-80 days would remain at the
current
level of 4 per cent. Further the rate for deposits of 181 days to less than one
year would
be the same at 6 per cent.
Shareholders approve SAIL-MEL merger
• Shareholders of Steel Authority of India Ltd. (SAIL) approved the scheme of
merger of
Maharashtra Elektrosmelt Ltd. (MEL) with the ‘Maharatna' company under
Sec.391-394
of the Companies Act, 1956. The proposal is now under consideration of the
Ministry of
Corporate Affairs.
• At the SAIL's 38th annual general meeting, shareholders also approved the
board
recommendation for final dividend payment of 17 per cent on paid-up equity,
apart from
the interim dividend of 16 per cent already paid earlier this year. This takes the
total
dividend payment for 2009-10 to 33 per cent.
ICICI Bank opens branch in Singapore
• ICICI Bank opened a retail branch in Singapore, with India's High
Commissioner T. C. A.
Raghavan symbolically signing the first account.
Change in name of insurance JV to help boost business
• The recent change in the name of IDBI Fortis Life Insurance Company Ltd., a
joint
venture floated by IDBI Bank, Federal Bank and Fortis Insurance International,
to IDBI
Federal Life Insurance Company Ltd., is expected to help boost the company's
operations
in Kerala. Federal Bank has a very strong presence in South India, particularly in
its
home State, Kerala.
measures.
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ECONOMY
Exports surge 23 % to $16.64 b in August
• India's exports continued to surge for the tenth successive month growing by
22.5 per
cent to $16.64 billion in August as compared to the same period last fiscal.
• However, imports also jumped by 32.2 per cent year-on-year to $29.67 billion
in August,
according to the government data released.
• During April-August this fiscal, exports posted a growth rate of 28.6 per cent
to $85.27
billion on a year-on-year basis. Imports grew by 33.1 per cent to $141.89
billion.
• The trade deficit for the period stood at $56.62 billion, outstripping the deficit
of $40.28
billion logged in the same period a year earlier. In August, the trade deficit
widened to
$13.03 billion as compared to the year-ago period.
• The government is aiming for around 15 per cent export growth in the current
fiscal year
to March 2011 after a drop of nearly 5 per cent in the previous year and is
confident that
it will be able to touch the $200-billion export target set for 2010-11. India's
exports rose
more than 30 per cent each month between November and June. Hailing the
22.5 per cent
growth, Federation of Indian Export Organisations (FIEO), President A.
Shakthivel said it
reiterated FIEO's view that India's exporters were on our course to realise the
export
target or even surpass it to reach $210 billion.
IDBI Bank to finance MSMEs with SIDBI
• IDBI Bank announced a number of new initiatives, products and services on its
7th
Foundation Day, including joint-financing of micro, small and medium
enterprises
(MSMEs) with Small Industries Development Bank of India (SIDBI).
• With IDBI Bank's increasing focus towards the MSME sector, it has entered into
a
special partnership with SIDBI for joint financing of MSME clients across the
country,
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IDBI Bank Chairman and Managing Director R. M. Malla said, while elaborating
on the
Foundation Day initiatives.
• IDBI Bank has extended 7-day banking services to customers in select
branches in five
cities, that is, Mumbai, Delhi, Chennai, Pune and Bangalore.
• The bank will also offer extended banking hours from 8 am to 8 pm in these
five cities
with a view to providing convenience to its customers. A specifically designed
‘Women
International Debit card' is also being launched for its ‘Super Shakti' account
holders.
Deora to pitch for India buying BP's Vietnam assets
• India will seek to “seal the deal'' for buying BP plc's stake in Vietnam gas fields
when the
British energy firm's newly appointed Chief Executive Officer Robert Dudley visits
India
next week.
• ONGC Videsh (OVL) wants to buy BP's 35 per cent stake in the $1.3-billion
Nam Con
Son gas project in Vietnam. Mr. Deora is likely to pitch for India buying BP's
Vietnam
assets. OVL has roped in Vietnam's PetroVietnam for buying BP's stake in two
offshore
gas fields, a pipeline and power project — together referred to as Nam Con Son.
• Block 06.1, where the Lan Tay and Lan To fields currently produce about 14
million
cubic metres of gas a day, was originally allocated to OVL, but due to the foreign
exchange crisis of the 1990s, it had to farm-out some of its stake to BP. Lan To
is now
under development.
• OVL has so far invested $217 million on the gas fields and has government
approval to
invest up to $377.46 million, the official said
Mercedes to enter financing business
• Mercedes-Benz said it was planning to enter the financing services business in
India, a
move aimed to further boost the sales of German luxury carmaker. “We are in
the
preparation phase for a Daimler Financial Services operation in India to support
all the
Daimler commercial vehicle and passenger car brands in the market,” said
Mercedes
Benz India Managing Director and CEO Wilfried Aulbur, without revealing when
the
operations will begin
Pratibha Patil calls for expanding the SCI fleet
• President Pratibha Patil called upon the Shipping Corporation of India (SCI) to
expand its
fleet within a timeframe, lay emphasis on technology and meet the country's
growing
requirements.
• The President was speaking at the golden jubilee celebrations of the SCI. Much
in tune
with the exhortation of Ms. Patil, Minister of Shipping G.K. Vasan announced the
acquisition of 118 new vessels by 2020.
• He said that orders for 28 vessels had been placed, eight of which would be
inducted into
the SCI fleet by the end of the current financial year. The SCI will be acquiring
50 more
vessels by 2015 and 40 more by 2020.
• While congratulating the Navratna public sector undertaking (PSU) on
completing 50
years and establishing the country as a strong maritime nation, Ms. Patil hoped
that the
SCI would play a crucial role in meeting the country's energy requirements,
expected to
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grow manifold in the coming years. She urged the SCI to gear up, underlining
that India
was dependent on import of oil, gas and coal.
Aircel to invest $500 m in 3G
• After bagging 3G spectrum for 13 telecom circles, Aircel is now planning to
launch the
advanced third generation mobile services early next year.
• Aircel, a joint venture between Malaysia's Maxis Communications and India's
Apollo
Hospital Enterprise, where the former holds a majority stake of 74 per cent, is
betting big
on 3G services for which it has already started upgrading infrastructure and is
also
chalking out unique bouquet of services for its subscribers.
• Aircel has won 3G spectrum for 13 circles – Delhi, Mumbai, Andhra Pradesh,
Gujarat,
Haryana, Karnataka, Kerala, Madhya Pradesh, Maharashtra and Goa, Rajasthan,
Punjab,
UP (West) and UP (East).
Bridge & Roof in talks with BHEL for tie-up
• Public sector Bridge and Roof Company (B&R) has begun talks with Bharat
Heavy
Electricals Ltd (BHEL) for a tie- up, which will be utilised in the pre-tender stage,
Chairman and Managing Director Mukesh Jha said.
• He said the tie-up, if it takes place, would bring benefits in the form of
reduction in
project cost and execution time. BHEL is one of B&R's major clients and the
company is
now implementing nearly Rs.1,300-crore worth project for BHEL.
• B&R offers civil, structural and mechanical construction services as well as EPC
and
turnkey packages for oil terminals. It operates in various industrial sectors
including
hydrocarbon, fertilizers, chemicals, power projects including nuclear power
projects,
steel plants and railways.
Centre in favour of more banks
• In line with the Reserve Bank of India's plans to open up the banking sector,
the
government said it was in favour of more banks coming up in the country,
although the
granting of new licences should be linked to the criterion of having branches in
unbanked
areas.
• In August, the RBI came out with a discussion paper on new banking licences
and
regulations to foster greater competition in the sector.
• It had sought feedbacks on the paper, as also the business model for new
banks by
September 30, with a view to promoting financial inclusion.
• India has 27 public sector banks, 22 private sector banks, 31 foreign banks, 86
regional
rural banks, four local area banks, 1,721 urban cooperative banks, 31 state
cooperative
banks, and 371 district central co-operative banks.
Website launched for feedback on XII Plan
• Seeking feedback from the general public, probably for the first time in its
history of
formulating five-year plans, the Planning Commission launched a website to
elicit
suggestions on the ‘Approach Paper' to the XII Plan (2012-17) so as to make the
final
document more inclusive and effective.
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Sanofi makes hostile bid for Genzyme
• French drug-maker Sanofi-aventis made a $18.5-billion hostile takeover offer
for Genzyme Corp,
attributing the move to the American entity's refusal to engage in ‘constructive
discussions'.
• The French firm had gone public with its offer to buy Genzyme in August, when
it had also
hinted at the possibility of an unfriendly takeover attempt. Sanofi-aventis said it
tried to engage in
“constructive discussions with Genzyme,” but the latter's continued refusal to do
so led to the
hostile offer. A meeting between the two companies' CEOs on September 20 on
the proposed deal
had failed. The transaction is valued at about $18.50 billion.
CA Technologies opens centre in Hyderabad
• CA Technologies, a leading IT management software and solutions company,
has decided
to spend $600 million on R&D (research and development) during the current
year with
focus on becoming one of the top companies in cloud computing and
virtualisation
management segments.
• The New York-based company has opened a state-of-art India Technology
Centre at
Hyderabad
Mahindra & Mahindra to set up tractor unit in Telangana
• Giving a major fillip to industrialisation in the backward Telangana region,
Mahindra and
Mahindra (M&M) will soon set up a tractor manufacturing unit at its Zaheerabad
facility in
Medak district of Andhra Pradesh.
• M&M has proposed to invest Rs.300 crore on the tractor manufacturing facility
over the next
three years that will provide direct employment to about 2,000 people and
indirect employment to
another 5,000 persons.
Elder Health Care ties up with Japanese firm
• Elder Health Care, part of the Rs.800-crore Elder group, has entered into an
in-licensing
agreement with Japan's leading advanced skincare, body care and cosmetic
manufacturing
company, POLA Chemical Industries of POLA-ORBIS group, to introduce POLA's
skincare and
cosmetic products in India.
New director for Cisco Services India
• Cisco Services, the consulting and technical support arm of Cisco Systems, has
announced that
Srivalsan Ponnachath has joined as director, Cisco Services India.
Tata Motors buys Italian design house for Rs.11 crore
• Tata Motors said it had acquired 80 per cent stake in Trilix Srl, an Italian
design and engineering
firm, for euro 1.85 million (Rs.11.29 crore). Both companies have in the past
worked together on
several projects, Tata Motors said in a statemen
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Cabinet approves 10 % divestment in SCI
• The Centre embarked on a two-pronged strategy, allowing disinvestment of 10
per cent of
its stake in Shipping Corporation of India (SCI) and allowing it to raise additional
equity
of like quantum.
• The Cabinet Committee on Economic Affairs approved the continuation of 30
per cent
reservation quota of the requirement of Bharat Sanchar Nigam and Mahanagar
Telephone
Nigam for procurement of equipment from debt-ridden ITI, Bangalore-based
public
sector undertaking under the Ministry of Communication and IT.
BMW launches financial services arm
• The BMW Group launched BMW Financial Services as a new business entity in
India. It is
headquartered in Gurgaon. It will offer solutions for retail automobile financing
for BMW and
multi-make customers and financing for fleet owners. The group will invest $50
million (Rs. 203
core) in BMW Financial Services in India, says a release.
Global recovery at a sluggish pace: IMF
• The economic recovery under way has been proceeding broadly as expected,
but
downside risks remain elevated and the global financial system is the Achilles'
heel of
this recovery, according to the International Monetary Fund (IMF).
• In releasing two key documents on the state of the global economy — the
October 2010
World Economic Outlook (WEO) and the Global Financial Stability Report (GFSR)
—
the IMF provided a cautious outlook that comprised both gradual improvements
in
economic conditions and significant uncertainty in Western economies.
India-EU trade agreement by December: Sharma
• The much delayed India-EU Free Trade Agreement for opening up trade,
investment and
services is likely to be signed by December as bilateral negotiations have been
put on the
fast track, Commerce and Industry Minister Anand Sharma said.
• He is heading India's high-level delegation of industry to Germany steered by
the
Federation of Indian Chambers of Commerce and Industry of India (FICCI).
• India had started negotiations with its largest trading partner in June, 2007,
which were to
conclude by the end of 2008. However, differences on the inclusion of items,
which
Indian negotiators described as non-trade issues, bogged down the talks.
• India and the EU had bilateral merchandise trade worth $75 billion in 2009-10.
Maran buys 5 p.c. in SpiceJet as part of deal
• Kalanithi Maran promoted KAL Airways has bought 5 per cent equity in low-
cost air carrier
SpiceJet for Rs.91.52 crore, as part of the deal to acquire 37.7 per cent stake in
the company
signed this June.
• This was an off-market transaction, following which the Chennai-based
industrialist's direct stake
in SpiceJet has now increased to 17.72 per cent, the company said in a filing to
the Bombay Stock
Exchange.
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• The airline, India's second largest low-cost carrier.
Horlicks gets new brand identity
• GlaxoSmithKline Consumer Healthcare (GSKCH), a leading player in the health
food
drinks industry and an associate of GlaxoSmithKline of the U.K., unveiled its
Horlicks
brand in a new avatar.
Bajaj Allianz launches JiyoFit initiative
• Bajaj Allianz has launched a new initiative ‘JiyoFit' that helps customers
maintain a healthy
lifestyle and incentivises them in adopting healthy practices and being fit. The
JiyoFit card will
also serve as an identity card at Bajaj Allianz network hospitals. The JiyoFit
program will provide
Bajaj Allianz customers additional benefits of the association with Yes Bank and
Visa, says a
release.
Tata Communications expands into cloud computing space
• Tata Communications launched InstaCompute and InstaOffice to offer
productivity
enhancing services to Indian businesses. This marks the company's expansion in
to the
cloud space to deliver self-service, pay-as-you-use IT application and data
centre
infrastructure services, accessed through the Internet.
• Instant data centre infrastructure, InstaCompute, provides secure and elastic,
on-demand
computing and storage resources to businesses over the network, as and when
they need
them. Computing and storage is based in India, can be paid for in Rupees or
global
currencies and provides the user with governance and cost controls.
• InstaOffice (powered by Google Apps) brings global Internet-based
collaboration and
office tools to Indian companies, with on-demand ease of use and pricing.
InstaOffice
tools include email and calendar, instant messaging, voice and video chat, as
well as
office document applications which are accessible to businesses when and where
they
need them.
$1-billion innovation fund mooted for inclusive growth
• A $1-billion fund to facilitate innovations for inclusive economic growth in India
has
been proposed.
• The proposal, yet to be approved by the Centre, was agreed to at a recent
meeting of the
National Innovation Council , according to Sam Pitroda, Adviser to Prime Minister
Manmohan Singh on Information Infrastructure and Innovations.
Pranab rules out cap on FDI
• Finance Minister Pranab Mukherjee ruled out any cap on foreign direct
investment in
India.
• Addressing the Woodrow Wilson Center here, Mr. Mukherjee added that while
it was the
responsibility of the Reserve Bank of India to “watch the situation and as and
when it is
necessary to intervene appropriately,” he did not believe that the inflow of FII or
FDI had
distorted market sentiments. “Therefore there is no question of putting any cap,”
on such
flows, he said.
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IMF warns countries against currency wars
• The head of the International Monetary Fund warned global finance ministers
that they
should not use the value of their currencies as an economic weapon.
• IMF Managing Director Dominique Strauss-Kahn said that the global economy
was
continuing to struggle as it tries to emerge from the worst recession since the
end of
World War II.
• “We are gathering at a pivotal moment facing a very uncertain future,” Mr.
Strauss-Kahn
said in remarks to the annual meetings of the 187-nation IMF and its sister
lending
organisation, the World Bank.
34 blocks on offer under NELP-IX
• The government will offer 34 areas, including eight in deep-sea, for exploration
of oil and gas in
the ninth round of auction under the New Exploration Licensing Policy (NELP), Oil
Minister
Murli Deora said.
• NELP-IX will be announced on October 15 and the first road show will be held
in Mumbai on
October 18. The last date for bidding is March 18.
• The NELP rounds have secured $14 billion investment, he said, adding that the
last round, NELPVIII,
attracted investment commitment of $1.1 billion.
• Reliance Industries' Dhirubhai—1 and 3 gas finds in the D6 block in Krishna
Godavari basin off
the east coast has been the biggest success of NELP. The block is currently
producing 60 million
standard cubic meters of gas per day, which has increased the domestic gas
production by about
72 per cent over that of 2008—09, he said.
Kharif acreage up by 6.9% this year
• Thanks to good monsoon, the area under rice cultivation this kharif season has
gone up
by 6.4 per cent. Last year, paddy cultivation had suffered owing to drought in
399
districts during the same period.
• As per the official data released by the Ministry of Agriculture, paddy had been
sown in
35.8 million hectares till October 7, compared to 33.14 million hectares in the
corresponding period last year, showing an increase of 2.7 million hectares over
the same
period.
• Kharif crops have been sown in 102.19 million hectare area as against in 95.75
million
hectares last year, registering an increase of 6.9 per cent.
• There has been a major enhancement in the cultivation of pulses that have
been sown in
11.59 million hectares this year. This is 1.8 million hectares more than that in
the
corresponding period last year.
• The area under coarse cereals is also higher by 2.91 per cent at 21.2 million
hectares
against 20.6 million hectares sown last year.
• The area under sugarcane is higher by 20.41 per cent, while the area under
cotton
increased by 8.9 per cent and jute acreage went up by 9.68 per cent over last
year.
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• The cultivation of oilseeds has shown a marginal increase of 0.32 per cent. The
oilseeds
acreage is 17.5 million hectares this year compared to 17.4 million hectares
sown last
year.
No change in open offer price for Cairn: Vedanta
• In the wake of Cairn Energy forming a panel to secure the interest of minority
shareholders in the sale of its Indian interest, its suitor Vedanta ruled out raising
the open
offer price for minority stakeholders.
• Its open offer itself failed to take off in the absence of clearance from the
Securities and
Exchange Board of India.
• Vedanta is paying up to $8.48 billion for 40-51 per cent stake in Cairn India
that operates
the country's largest oilfields, and its group firm Sesa Goa was to make an open
offer for
an additional 20 per cent stake at Rs.355 a share to minority shareholders of the
target
firm.
Bridgestone to invest Rs. 2,600 cr
• Japanese tyre major Bridgestone is planning to produce truck and bus radial
tyres at its facility in
Kheda, near Indore in Madhya Pradesh. The company is also planning to set up a
new factory at
Chakan near Pune to increase the capacity of PSR (passenger car radials) and
truck tyres.
• Addressing presspersons, Hiromi Tanigawa, Managing Director, Bridgestone
India, said the total
investment in both the facilities would be of the order of Rs. 2,600 crore.
SBI Life launches Saral Maha Anand
• SBI Life Insurance launched its new unit-linked insurance plan, Saral Maha
Anand. The product,
with a minimum annual premium of Rs. 15,000, has been designed to cater to
investment and
protection needs of the middle and low-income segments. The premium can be
paid monthly,
quarterly, half-yearly or annually. The product is exempted from medical
examination and offers
four fund options — Index, Equity, Balanced and Bond — says a release.
Investors in the 18-55
age group can invest in the product.
IIFCL to buy Rs.1,500 cr loans from Union Bank
• State-owned infrastructure lender India Infrastructure Finance Company Ltd.
(IIFCL)
inked a pact to buy loans worth Rs.1,500 crore from Union Bank of India (UBI)
so that
the state-run bank can utilise the funds for other projects in the crucial sector.
• This is the first-ever major agreement on ‘takeout' financing in the country, a
procedure
under which loans made by banks to infrastructure firms are sold to other
institutions so
that the banks recover their much-needed funds ahead of the payment schedule
under the
loan agreement.
• This is done to address the asset-liability mismatch, because loans are made to
infrastructure projects on a long- term basis, whereas deposits of banks are
generally of a
short or medium tenor.
• The company would do takeout financing of Rs.25,000 crore over three years,
he added.
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• “Out of the Rs.25,000-crore takeout financing, we can expect Rs.100 crore of
profit,” he
said.
• Mr. Goel said memorandums of understanding had also been signed with
Allahabad
Bank, Indian Bank, Punjab National Bank and UCO Bank for takeout financing.
RBI chief to head FSDC sub-panel
• Even as the Financial Stability and Development Council (FSDC) is to be
headed by the
Finance Minister, the government sought to allay the apprehensions of the
Reserve Bank
of India (RBI) over the autonomy of regulators by appointing the apex bank's
Governor
as the head of a sub-committee of the body being set up to maintain financial
stability.
• “It [formation of FSDC] will be announced shortly,” Finance Minister Pranab
Mukherjee
said after his meeting with various regulators in the financial sector, namely, the
RBI,
SEBI (for markets), IRDA (for insurance) and PFRDA (for pensions) on the
proposed
FSDC.
• “The Council would have one sub-committee which would be headed by RBI
Governor,”
a Finance Ministry statement later said.
• Following the turf war between SEBI and the IRDA over the jurisdiction on
mutual
funds, the RBI Governor's position was elevated in a recently formed joint panel
that was
set up to resolve the controversy.
• The apex bank's Governor was made Vice-Chairman of the committee, a
higher position
from the earlier status of just being a member.
Industrial growth slumps to 5.6%
• To the disappointment of the government and concern of India Inc., the
growth in
industrial production plummeted to 5.6 per cent in August — the lowest in 15
months —
from 10.6 per cent in the year-ago period, mainly owing to negative growth in
capital
goods stemming from a slump in manufacturing output. The official data on the
Index of
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Industrial Production released revealed that the manufacturing sector, which
accounts for
nearly 80 per cent of the IIP numbers, witnessed a sharp dip in growth to 5.9
per cent
during the month from 10.6 per cent in August 2009. Worse still, the capital
goods
segment strayed into negative territory and slipped by 2.6 per cent as compared
to a
robust growth of 9.2 per cent posted in the same month last year.
• The lowest growth in factory output in previous months was in May last year at
2.7 per
cent. The slump in August this year, however, may be viewed as a one-off
aberration as
economic analysts had earlier projected a likely dip in industrial growth to single
digit
owing to the high base effect of August 2009. Moreover, the marginal growth of
3.7 per
cent posted by the six infrastructure industries during August this year was also
seen as a
signal of lower overall industrial output growth for the month.
India explores joint venture with Russia for silicon wafers
• India will be seeking Russia's assistance in setting up a national disaster
management centre
modelled on a Russian facility, Union IT and Communications Minister A. Raja
said.
• The Minister was ‘highly impressed' by the high-tech National Emergency
Management Centre
he visited. The centre gathers online information about natural and manmade
disasters all over
Russia and coordinates relief and mitigation efforts.
• The two sides agreed to explore the possibility of setting up a joint venture in
India to produce
silicon chips and telecom equipment. The idea came up during the Minister's visit
to the Moscowbased
Micron Company, which boasts an integrated chip-making facility.
Priority areas:-
• “We are looking to Russia, which is among the few countries manufacturing 3G
and WiMax
chips, to assist India in achieving self-sufficiency in this field.
Vodafone selects Nokia Siemens, Ericsson for 3G
• Telecom service provider Vodafone Essar announced that it had finalised
equipment
maker Nokia Siemens Networks (NSN) and Ericsson for deploying and managing
its
countrywide 3G network infrastructure.
• According to the contract, the two vendors will enable swift 3G deployment,
create
synergy between GSM and 3G networks and maintain high speed packet access
(HSPA)
networks in the circles where Vodafone had bagged 3G spectrum, Vodafone said
in a
statement.
• Vodafone has spectrum to offer 3G services in nine circles across the country,
including
in Delhi and Mumbai. While Ericsson has been selected to provide exclusive 3G
services
in Mumbai, Delhi and Kolkata, NSN will implement and manage its 3G network in
the
balance six circles of Tamil Nadu, Gujarat, Maharashtra, Uttar Pradesh (East),
rest of
Bengal and Haryana.
• Vodafone will utilise this latest HSPA technology to deliver services such as
video
telephony, mobile broadband, mobile TV and others.
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RBI divests stake in Nabard
• Amid debate over whether the Reserve Bank of India should hold stake in
lending
institutions or only be a regulator, the central bank has sold almost all its
holding in the
National Bank for Agriculture and Rural Development (Nabard), to the Central
Government.
• “The RBI divested its stake amounting to Rs.1,430 crore in Nabard on October
13. With
this, the RBI's holding in Nabard has come down to one per cent of shareholding
in the
bank. The Central Government now holds 99 per cent of the stake,” the central
bank said
in a statement.
• The move comes more than three years after the central bank sold its entire
stake in the
country's largest lender State Bank of India to the government.
Cabinet nod:-
• The RBI held 72.5 per cent of equity in Nabard, amounting to Rs 1,450 crore.
The
remaining shareholding worth Rs.550 crore was with the Centre.
• Now, the only major institution where the RBI holds a stake is the National
Housing
Bank (NHB). The central bank holds 100 per cent stake in the housing finance
regulator.
• Nabard is the apex rural and farm development bank, whose role is to promote
credit
growth in these areas.
• The move was in line with the Narasimham Committee II report which held
that it was
inconsistent with the principles of effective supervision that the regulator was
also an
owner of a bank.
Tata Aria launched
• Tata Motors has launched Tata Aria, a luxury car having features of a ‘sedan'
and SUV
(sports utility vehicle), in Kerala. It has in-dash GPS-based navigation system,
which
offers guidance to find the destination, and traction control system to maintain
stability
under situations of sudden acceleration. Other features include height-adjustable
driver's
seat, anti-lock braking system, automatic climate control system, darkness
sensing lights
and rain sensing wipers.
India launches IX round of oil, gas assets auction
• India kicked off the IX round of auctioning under the New Exploration Licensing
Policy (NELP),
offering 34 oil and gas blocks, including eight deep water ones, sans tax
exemptions to investors.
• “The New Exploration licensing Policy round IX is being launched in the
background of positive
economic conditions, including revision of the administered price mechanism
(APM) gas price
and market determination for price of petrol,'' Petroleum and Natural Gas
Minister Murli Deora
told reporters at the launch programme. The 34 blocks, which include 15 re-
cycled blocks, cover
a sedimentary basin area of 88,807 sq. km. The deadline for making a bid for
the blocks is March
18, 2011. The previous eight rounds of NELP in 235 blocks have fetched an
investment of around
$14 billion.
• The IX round of auction comes amid indications that the government is doing
away with tax
incentives under the new Direct Tax Code (DTC) proposed to be implemented
from April 1,
2012.
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• “Investors basically want clarity in NELP IX. The position is absolutely clear,''
Petroleum
Secretary S. Sundareshan. The DTC, once in force, would apply to all production
sharing
contracts in the future including under NELP IX, he added. Till it does, the
production sharing
contracts will be governed by the existing income-tax laws.
• Under the current Income-tax Act, companies that started crude oil production
before April 1,
1997, are exempted from paying taxes on profits for seven years. Refineries,
which started
operations after October 1, 1980, and before March 2012, are also eligible for
the same level of
incentive.
• However, no tax breaks are given to natural gas finds, except for the gas that
is to be produced
under NELP VIII blocks and the four coal bed methane (CBM) blocks. The first
roadshow for
NELP IX will be held in Mumbai on October 18. “The discoveries made under the
NELP have
resulted in in-place hydrocarbon reserve accretion of a staggering 642 million
tonnes of oil and
oil equivalent gas,'' Mr. Deora said.
• The VIII round, which closed on October 12, 2009, attracted investment
commitment of $1.34
billion for 36 blocks that received offers. Under NELP VIII, 70 areas or blocks for
exploration
were offered, the biggest licensing round in India. Of the 36 areas bid for, the
government had
awarded 33 blocks to successful bidders.
RBI panel to study functioning of MFIs
• The Reserve Bank of India announced constitution of a sub-committee to look
into the
functioning of micro finance institutions (MFIs), as they have drawn flak for
using
strong-arm tactics to recover loans.
• The MFI tactics have even prompted the Andhra Pradesh Cabinet to approve
an
ordinance to rein them in.
• “We have constituted a sub-committee to look into the functioning of the MFIs
sector and
what bearing they have on RBI policy to take further action,” RBI Governor D.
Subbarao
told reporters after the meeting of the central bank board.
Tata gifts $50 m to Harvard Business School
• India's Tata Group has given a huge $50 million to the prestigious Harvard
Business School
(HBS) to fund a new academic and residential building on its campus, the largest
gift received by
the institute from an international donor in its 102-year-old history.
Nippon Pipe to set up unit in Rajasthan
• Nippon Pipe India Pvt. Ltd. of the Nippon group will set up a steel tube
components project for
automobiles and motorcycles in the Japanese Zone at Majrakath in Neemrana in
Rajasthan. This
is the first such project by a Nippon subsidiary in India.
• Nippon Pipe is a subsidiary of Siam Nippon Steel Pipe Company India Ltd.,
Thailand, which, in
turn, is a subsidiary of Nippon Steel of Japan.
• The Japanese Zone has been developed by the Rajasthan State Industrial
Development and
Investment Corporation Ltd. (RIICO).
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• The annual installed capacity of the unit would be 10,000 tonnes in 2012,
which would increase
to 25,000 tonnes in 2015. In the Neemrana's Japanese Zone, 22 companies
(including Nippon)
have been allotted 303 acres.
Mumbai gets world's largest diamond bourse
• The Bharat Diamond Bourse (BDB), the world's largest, was inaugurated by
Union
Commerce and Industry Minister Anand Sharma.
• “As on today, in 2009-2010, the export of diamonds in this industry from
Mumbai is Rs.
61,000 crore and I am hopeful that within a year, this bourse will achieve a
turnover of
over Rs. 1,00,000 crore,” he said.
• The BDB has been set up to establish infrastructure for promotion of diamond
export,
including jewellery, and provide all support and service facilities to eventually
make
India an international trading centre for gems and jewellery.
• Spread over a 20-acre plot, the complex is designed to house around 2,500
small and
large diamond traders in addition to a Custom House, banks and other service
providers
who will cater for the gem and jewellery trade.
Policy on shale gas before the end of 2011
• The Union Petroleum and Natural Gas Ministry is likely to sign a memorandum
of
understanding with the U.S. in the area of technology related to extraction of
shale gas
during the forthcoming visit of President Barack Obama to India.
BIPA with Sudan comes into effect
• The Bilateral Investment Promotion and Protection Agreement (BIPA) between
India and
Sudan came into effect with the exchange of instruments of ratification (IoR)
between the
two countries.
• According to an official statement, BIPA seeks to promote and protect
investments from
one country in the other country. Such agreements facilitate bilateral investment
flows
and grant benefits of national treatment (NT) and most favoured nation (MFN).
So far,
India has inked BIPA with 79 countries of which 68 are already in force. Sudan is
the
69th nation with which the provisions of the agreement have now come in to
effect.
Sub-panel to submit report on MFIs in three months
• Amid growing criticism over the use of coercive ways of micro finance
institutions
(MFIs) to recover loans, the Reserve Bank of India said its sub-panel looking into
the
functioning of such lenders would submit its report in three months.
• “The sub-committee will submit its report in three months,” the central bank
said in a
statement.
• The RBI has set up a sub-committee of the Central Board of Directors of the
central bank
to study the issues and concerns of the microfinance sector, including interest
rates
charged by the lenders in this area. “Y. H. Malegam, a senior member on the
Central
Board of Directors of the Reserve Bank of India, will chair the sub-committee,”
the
statement added.
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IOC to commission Paradip refinery by early 2012
• Indian Oil Corporation (IOC) said its Rs.29,777-crore Paradip refinery in Orissa
would
be commissioned by March 2012 and cater more to the domestic market rather
than
exports due to rise in domestic fuel demand.
• “The refinery will start producing fuel by March 2012 when it will commission
the
primary units like the crude distillation unit.
• The 1,100-km pipeline will carry fuel produced in the unit to consumers in
Orissa,
Jharkhand, Chhattisgarh and Madhya Pradesh.
Dr. Reddy's to launch Lansoprazole in U.S.
• Dr. Reddy's Laboratories (DRL) will be launching Lansoprazole delayed-release
capsules (15 mg
and 30 mg), a bio-equivalent generic version of Prevacid delayed-release
capsules, in the U.S.
market, says a release. Launch preparations are complete and shipments will
commence shortly,
adds the release.
Emaar-MGF bank guarantee ordered to be confiscated
• The Rs.183-crore bank guarantee furnished by Commonwealth Games Village
builder Emaar-
MGF was on Wednesday ordered to be confiscated on charges of irregularities,
as the
Enforcement Directorate prepared to question top officials of the Organising
Committee for
alleged foreign exchange violations.
• A Rs. 760-crore bailout package given by the Delhi Development Authority
(DDA) to Emaar-
MGF, a private builder, also came under the scanner.
Eurocopter forms subsidiary
• Eurocopter, which belongs to European consortium EADS, announced the
setting up of a
new subsidiary in India, sensing a huge business potential and aiming to capture
50 per
cent of the market share in helicopters.
• Established as the 25th worldwide subsidiary and 10th in Asia, Eurocopter
India Private
Ltd. has decided to take an aggressive plunge. It hopes to expand its market
share from
the current 30 per cent to 50 per cent by 2015.
• “The Indian helicopter sector has been growing at an annual rate of 20 per
cent and our
ambition is to become the country's number one supplier for the civilian,
government and
para-public markets,'' Executive Vice-President (Commerical Helicopters) Joseph
Saporito told a news conference.
• Eurocopter is also competing for the Indian Army/Air Force bid to procure 197
light
utility helicopters.
• At present, Eurocopter said, its AS365 Dauphin was serving for off-shore,
para-public
and government transport, while it offered the EC135, EC145 and AS350
Ecureuil for
medical emergency and law enforcement duties including in naxal-affected
areas.
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LIC, SBI among largest bidders for CIL pie
• Government-owned companies in the banking and insurance segments have
together put
in bids worth nearly Rs.30,000 crores in the initial offer of Coal India, which
closed for
qualified institutional buyers (QIBs) after getting a 22 per cent oversubscription
for this
segment.
• The issue was subscribed 10 times generating over Rs.1.50 lakh crore against
the targeted
amount of Rs.15,500 crore. The IPO, whose response has taken everyone by
surprise,
closes on October 21. The allotment will be on a proportional basis. The issue is
set to get
listed on November 4, a day ahead of Diwali.
Vodafone Essar to launch 3G by early 2011
• Third-largest mobile carrier Vodafone Essar will launch third-generation (3G)
services in the
January-March quarter of 2011 and plans to spend up to $500 million over the
next few years on
its 3G network, according to Managing Director Martin Pieters.
• Vodafone is the second mobile operator to announce specific plans for 3G after
Tata Teleservices,
which earlier announced plans to launch the service on November 5.
• Vodafone owns 67 per cent of Vodafone Essar, with the Essar group holding
the balance. The
Essar group has an option to sell its entire stake to Vodafone for $5 billion by
May 2011.
Rs. 11,218 cr tax notice slapped on Vodafone
• The Income-tax department asked telecom major Vodafone to pay
Rs.11,217.95 crore in taxes
within a month for the acquisition of Hutchison's stake in its telecom joint
venture with Essar in
India in 2007.
• “The IT department issued an order raising a tax demand of Rs.11,217.95
crore on Vodafone
International Holdings BV, treating it as an assessee in default under Sec.
201(1) of the Incometax
Act, 1961, (the Act), for failure to deduct tax as required under Sec. 195 of the
Act before
making a payment of $11.076 billion (around Rs.55,000 crore) to Hutchinson
Telecommunications International Ltd. The tax demand is to be paid within 30
days of the receipt
of the notice of demand,” an official statement said.
Polaris launches learning centre
School of Financial Technology facility in Hyderabad.
• Polaris Software Lab, a leading financial technology company, announced the
launch of first
phase of The School of Financial Technology, with the acquisition of a 50-acre
facility owned by
Catalytic Software Ltd., (CSL) Hyderabad, principal shareholder of CSL being
Catalytic
Software, headquartered in Seattle, U.S.
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FDI dips to $1.33 billion in August
• Foreign direct investment (FDI) dipped by almost 60 per cent to $1.33 billion
in August
this year from $3.26 billion in the year-ago period, says the latest government
data.
Significantly, this is the lowest FDI inflow in this fiscal.
• Industry Department data reveal that in the first five months of 2010-11, the
inflows
declined by 35 per cent to $8.88 billion from $13.76 billion in the same period
last year.
Notably, though there was a smart recovery in the domestic economy and
exports, inflow
of overseas investment has been on the decline since June.
• The overseas investment in June was at $1.38 billion, while that in July was
$1.78 billion.
The FDI in the first two months of this fiscal, April and May was $2.17 billion and
$2.21
billion respectively. Interestingly, a recent UNCTAD survey projected India as the
second
most important FDI destination only after China for multinational corporations.
• As per the data, the sectors which attracted higher inflows were services,
telecommunication, construction activities and computer software and hardware.
Pepsico granted relief
• The Gujarat high court has granted relief to the soft drink manufacturing
company,
Pepsico India Holding Limited, and quashed a criminal complaint against the
company
for having provided drinks “unfit for human consumption.”
Exports at 2-year high
• Reaching a two-year high, exports registered a jump of 23.2 per cent at
$18.02 billion in
September compared to the same month last year, while the massive rise in
imports raised
concerns over widening of the trade gap.
• Asserting that India was on track to surpass the $200-billion exports target,
Union Commerce and
Industry Minister Anand Sharma said that during the April-September period of
this fiscal,
exports aggregated $103.30 billion, a 27.6 per cent increase compared to last
year.
New ULIP from ING Life
• ING Life India, an ING Group company, has announced the launch of its new
unit linked
insurance product, ING Prospering Life.
• The new scheme has several features allowing customers to maximise their
returns even
while having adequate protection. It has a variety of fund options and fund
strategies
providing customers the convenience and control to maximise their returns.
Tata Steel forms venture with NML
• Tata Steel has incorporated a joint venture company in accordance with the
terms of a
joint venture agreement it had signed with New Millennium Capital Corp (NML)
of
Canada in November last.
• Tata Steel had entered into the agreement through its wholly-owned subsidiary
Tata Steel
Global Minerals Holdings Pte. Ltd.
• The joint venture company (JVC) — Tata Steel Minerals Canada Ltd. — will
acquire all
the direct shipping ore (DSO) mining claims and related assets and carry out
detailed
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engineering and construction of facilities and will be responsible for the
operations of the
DSO project. At closing, Tata Steel will own 80 per cent of the joint venture and
NML
the balance.
• NML controls the emerging Millennium Iron Range, located in the Province of
Newfoundland and Labrador and in the Province of Quebec, which holds the
world's
largest undeveloped magnetic iron ore deposits.
Tata buys into U.S. beverage firm
• Tata Global Beverages has said that a U.K.-based subsidiary has acquired a
minority stake in the
equity of ‘Activate', a U.S.-based performance beverage and bottled-water
company.
• In a statement to the stock exchanges TGB (erstwhile Tata Tea) said the
subsidiary had an option
to increase its stake in the next 12 months.
Bank of India ties up with Karvy
• Karvy Stock Broking Ltd. has partnered Bank of India (BoI), for providing
state-of-the-art online
trading services to the bank's customers enabling them to make investments in
equities anytime,
anywhere. BoI's customers with savings/current accounts along with depository
participant
account either with NSDL/CDSL could avail themselves online trading account
from Karvy.
India-China trade set to reach $60 billion target, says Zhang
• China's Ambassador to India Zhang Yan on Wednesday asserted that trade
between Indian
and China was set to achieve the $60 billion target fixed by the two sides by the
end of
this year.
• Trade between the two Asian giants had already reached $45 billion in the first
nine
months of 2010, a 50 per cent increase compared to the same period last year.
ONGC interests will be protected in Cairn deal'
• Union Petroleum and Natural Gas Minister Murli Deora on Wednesday asserted
that interests of
Oil and Natural Gas Corporation (ONGC) would be fully protected while
considering the
application for acquisition of Cairn India by Anil Aggarwal-owned Vedanta Group.
• The Petroleum Ministry has maintained that Cairn Energy, which had on August
16 announced
the sale of 40 to 51 per cent stake in Cairn India to Vedanta for $8.48 billion,
has to seek specific
approval for transfer of control in each of the ten properties it has in India.
• On its part, Cairn Energy had in mid-September applied for specific approvals
in seven
exploration blocks it had won under the New Exploration Licensing Round (NELP)
since 1999
and sought an overarching consent in the case of its three pre-NELP producing
properties
including the giant Rajasthan fields as contracts for them do not have specific
prior-approval
clause.
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Biocon to invest $161 m in Malaysia
• India's biotechnology major Biocon announced an investment of $161 million
in Malaysia for
setting up of a bio-manufacturing and research and development facility,
marking the biggest
foreign direct investment in this sector in the country.
• The facility will be established in Bio-XCell, a biotechnology park in Iskandar,
through a
strategic partnership with Malaysian Biotechnology Corporation, according to the
decision
announced during the visit of Prime Minister Manmohan Singh. The facility,
targeted to be
operational by 2014, would focus on research and development and production.
The documents
between the two parties were exchanged in the presence of Dr. Singh and
Malaysian Prime
Minister Mohd Najib bin Tun Abdul Razak.
The most expensive car Bugatti Veyron is here
• Volkswagen Group company Bugatti Automobiles launched its super premium
sports car
‘Veyron 16.4 Grand Sport', the most expensive car in India so far with a price
tag of
Rs.16 crore onwards. Packed with many exclusive safety and luxury features,
the sports
car will reach the top speed of 407 km an hour and speed of 360 km an hour
with the roof
off.
Centre's fiscal position shows improvement in April-August
• The Centre's fiscal position has improved in the first five months of the current
fiscal,
mainly owing to buoyant revenue collections coupled with a sharp increase in
non-tax
through sale of 3G spectrum.
• In its quarterly report on ‘Public debt management' for the July-September
period this
fiscal released, the Finance Ministry said: “The fiscal position of the government
during
April-August 2010 showed improved performance in terms of key deficit
indicators due
to buoyant revenue collections.”
• The report said that while the increase in non-tax revenue was mainly on
account of
telecom receipts, “tax revenue was added by buoyancy in excise collections
which
showed a growth of 43.3 per cent during April-August 2010.”
• It may be recalled that the government mopped up a whopping Rs.1.08 lakh
crore from
the sale of 3G spectrum and broadband wireless access (BWA), way higher as
compared
to the target of Rs. 35,000 crore. Alongside, with the revival in consumer
demand and
increase in excise duty by way of stimulus withdrawal, indirect tax collection also
turned
buoyant.
Swiss firm to set up grain management academy
• Swiss grain processor company, Buhler, that provides machinery and
technology for rice, pulses
and wheat processing industry in India, plans to set up an academy near
Bangalore to upgrade
skills and offer world-class training in food grain management sector.
• The company, which is celebrating its 150th anniversary, is to invest in India
Rs.100 crore in an
integrated manufacturing unit and other expansion projects in the next four
years as part of its
plans to achieve a turnover of Rs.1,000 crore by 2014.
www.upscportal.com
RBI to examine recovery mechanism of MFIs
• The Reserve Bank of India appointed sub-committee will examine the recovery
mechanism of
microfinance institutions and their interest rate practices, amid criticism of these
lenders charging
exorbitant loans rates and using strong arm tactics for recovery.
• “To examine the prevalent practices of MFIs regarding interest rates, lending
and recovery
practices, to identify trends that impinge on borrowers' interest,” the RBI said in
a notification.
• Earlier this month, the Reserve Bank had appointed a sub-panel, under the
Chairmanship of Y. H.
Malegam, to look into the functioning of MFIs. The committee will submit its
report in three
months. The RBI will examine the conditions under which loans to MFIs could be
classified as
priority sector lending and give appropriate recommendations.
• At present, MFIs charge up to 34 per cent interest rate a year on loans.
PFC to help NPCIL set up nuclear plants
• The Power Finance Corporation (PFC) and the Nuclear Corporation of India Ltd.
(NPCIL) have
entered into a memorandum of understanding (MoU) to facilitate NPCIL to set up
nuclear power
projects. The MoU was signed in New Delhi by PFC Chairman and Managing
Director Satnam
Singh and NPCIL Chairman and Managing Director S. K. Jain.
• Under the MoU, PFC plans to offer debt financing, equity financing and
consultancy services to
NPCIL to facilitate the latter's large capacity addition programme. While PFC is a
leading
financier in the electricity sector, NPCIL is the only player operating nuclear
power reactors in
the country.
• NPCIL now operates 19 nuclear electricity reactors in the country with an
installed capacity of
4,560 MWe. Three reactors, with a total capacity of 2,220 MWe, are in an
advanced stage of
construction. They are two units of 1,000 MWe each from Russia under
construction at
Kudankulam in Tamil Nadu and an indigenous pressurised heavy water reactor
(PHWR) of 220
MWe at Kaiga in Karnataka. In addition, excavation is under way for 700 MWe
indigenous
PHWRs, two each at Kakrapar in Gujarat and Rawatbhatta in Rajasthan. The
NPCIL's installed
capacity will reach 9,580 MWe by 2017, 20,000 MWe by 2020 and 60,000 MWe
by 2032, says a
press release from NPCIL.
• PFC's asset base, cumulative loan sanctions and disbursements as on June 30,
2010 stand at
Rs.85,597 crore, Rs.2,88,932 crore and Rs.1,47,056 crore, respectively, says
the release.
www.upscportal.com
Economy & Energy: November 2010

Services, investment the next step: Manmohan
• Prime Minister Manmohan Singh expressed the hope that early completion of
formalities
for implementing the India-ASEAN Trade in Goods Agreement would ensure that
work
would begin on finalising the other two pillars of an FTA — services and
investment.
“This would be an important step in our goal of comprehensive economic
cooperation,”
Dr. Singh said while speaking at the 8th India-ASEAN summit in Hanoi.
• Dr. Singh commended officials for developing a Plan of Action to implement the
ASEAN-India Partnership for Peace, Progress and Shared Prosperity for 2010-
2015 (This
has been completed with China). Terming it an ambitious road map, he said the
82 action
points reflected the potential and the desire to develop a multi-faceted India-
ASEAN
relationship.
• He invited ASEAN Secretary-General Surin Pitsuwan to visit India to review the
mechanisms and procedures to speed up the pace of implementing the agreed
projects.
• He reiterated his formulation that ASEAN is the core around which the process
of
economic integration of the Asia-Pacific region should be built.
• In order to step up people-to-people contacts, which is “well below potential,”
the Prime
Minister announced visa on arrival facility to people from Cambodia, Vietnam,
the
Philippines and Laos from January 1, 2011.
• Dr. Singh said he was looking forward to the first-ever India-ASEAN Summit in
India in
2012 and hoped the Eminent Persons Group would be set up quickly to
formulate a
vision statement for the meet.
Iran sets deadline for ONGC-Hinduja consortium to decide on gas field
project
• Seeking to put an end to uncertainty, Iran gave ONGC-Hinduja consortium
three-month
deadline to take a final call on its participation in the $7.5-billion gas field in the
Persian
Gulf.
• The Iranian oil company — Petropars — has set a year-end deadline for giving
a final
shape to the project. Petropars had offered ONGC Videsh Ltd. (OVL) and the
Hinduja
group 40 per cent stake in the development of Phase-12 of the giant South Pars
gas field.
• The South Pars Phase-12 (SP-12) project will produce 3 billion cubic feet a day
of gas
from 2014, two-thirds of which will be converted into liquefied natural gas for
exports.
• The remaining one billion cubic feet a day will be for domestic consumption in
Iran.
www.upscportal.com
• Besides, SP-12 will also produce 120,000 barrels per day of condensate and
other
products like LPG and ethane. The gas from the project will be taken by Iran-
LNG,
which is building a $5 billion plant at Tombak Port by 2011 to turn it into liquid
state so
that it can be shipped in cryogenic vessels.
OVL eyeing Exxon Mobil's stake in Angola
• ONGC Videsh Ltd. (OVL) is eyeing U.S. energy major Exxon Mobil's 25 per cent
stake
in a deep-sea block in Angola.
• “We have been making efforts to acquire interest in upstream opportunities in
Angola
since 2002. We keep receiving proposals and we are examining one such
opportunity,''
OVL Managing Director R. S. Butola told on the sidelines of Petrotech 2010.
• Mr. Butola said OVL, which had in 2003 unsuccessfully bid for 45 per cent
stake in the
giant Akpo oilfield in Angola, would certainly be interested in opportunities such
as
Exxon's stake in Block 31. It was too early to say if bidding would happen, he
added
• Angola Oil Minister said his country would favour a joint approach by OVL with
the
African nation's state-owned firm Sonangol. British energy major BP is the
operator of
ultra deep-sea Block 31 where 19 oil discoveries have been made. Sonangol is
the
concessionaire of Block 31.
Reserve Bank tightens norms for home loans
• While taming inflation and inflationary pressure by increasing the policy short-
term
indicative rates by 25 basis points, the Reserve Bank of India (RBI) resorted to
forestall a
housing bubble by hiking the risk weightage for housing loans above Rs. 75 lakh
to 125
per cent.
• Signalling a clear commitment to target the high inflation as well as the
persisting
inflationary expectations, the move would prevail upon banks to increase lending
rates
across the board, especially of housing loans.
• “The equity market is close to its previous all-time peak level. Residential
property
prices in metropolitan cities have gone beyond the pre-crisis peak level. Gold
prices are
ruling at an all-time high level. Although the income levels of households and
earnings of
corporates in India have continued to rise, a sharp rise in asset prices in such a
short time
causes concern,” said RBI Governor D. Subbarao warning of an asset bubble.
• At present, there is no regulatory ceiling on the loan to value (LTV) ratio in
respect of
banks' housing loan exposures. In order to prevent excessive leveraging, the
RBI has
proposed that the LTV ratio for housing loans hereafter should not exceed 80 per
cent.
• The RBI also increased the standard asset provisioning by commercial banks
for all
housing loans with teaser rates to two per cent “in view of the higher risk
associated with
such loans.”
www.upscportal.com
Teaser rates :-
• It has been observed that some banks are sanctioning housing loans at ‘teaser
rates,'
wherein the loans are offered at a comparatively lower rate of interest in the first
few
years, after which the rates are reset at higher levels .
• “This practice raises concern, as some borrowers may find it difficult to service
the loans
once the normal interest rate, which is higher than the rate applicable in the
initial years,
becomes effective. It has been observed that many banks at the time of initial
loan
appraisal do not take into account the repaying capacity of the borrower at
normal
lending rates,” the RBI said.
Panel to study PPP model in power distribution
• Seeking to give a new push to reforms in the power sector, the Planning
Commission
announced constitution of an expert group headed by B. K. Chaturvedi, who
looks after
the power sector, on facilitation of public private partnership (PPP) in power
distribution.
The committee, which would include chief secretaries and power secretaries of
States,
will also have representation from two financial institutions and would be put in
place.Planning Commission Deputy Chairman Montek Singh Ahluwalia told on the
sidelines of a conference on PPP in transmission projects organised by the
Commission.
ONGC plans $10-b investment in new gas discoveries
• Oil and Natural Gas Corporation (ONGC) announced mega plans to invest over
$10
billion in the new gas discoveries off the East Coast to bring them to production.
• Speaking on the sidelines of the Petrotech 2010 conference in New delhi ONGC
Director
(Exploration) D. K. Pande said the corporation was aiming to develop finds in the
KG
basin through four different projects. “We are targeting 25-30 million standard
cubic
metres a day (mscmd) of natural gas production by 2014-15,'' he added.
• The G-1 and G-15 fields would produce 2 mscmd of natural gas from 2011
while S-1 and
Vasistha deep-water project would produce 5 mscmd.
• However, the major push would come from development of finds in and around
block
KG-DWN-98/2, next to Reliance Industries' KG-D6 block.
• Mr. Pande said the block now had ten gas discoveries and ONGC planned to
tie-up nine
of these with six gas finds in neighbouring 1G block to produce 20-25 msmcd
from 2014-
15. “This development will cost $4.5 billion,'' he said.
• Another $5 billion would be needed to develop the ultra-deep sea UD-1
discovery in the
KG-DWN-98/2. This discovery would be developed at a later date. ONGC was in
talks
with energy majors BP, Exxon Mobil, the BG Group and Eni for a strategic tie-up
for
developing the KG basin discoveries.
www.upscportal.com
• Besides, ONGC planned to produce 10,000-20,000 barrels of oil a day from G-
4-6, GS-
29-1 and G-4-5 by 2012-13, he said.
Idea Cellular ties up with Indian Railways
• Idea Cellular has tied up with Indian Railways to promote its ‘Idea Language
Helpline' to help
passengers travelling to other parts of the country. As part of this programme,
the helpline will be
promoted across Indian Railways network for a week. Idea's new campaign aims
at offering a
simple solution to millions of Indians who need to communicate with people
talking different
languages.
Tata DOCOMO's 3G gift for Diwali
• Tata DOCOMO, the GSM arm of Tata Teleservices, will become the first private
operator
to launch its 3G services in the country by simultaneously rolling out the service
across
nine circles this Diwali.
• “Powered with cutting-edge technology support from its partner NTT DOCOMO
of
Japan, Tata DOCOMO's 3G services will change the way consumers use their
mobile
phones, riding on the back of game-changing products, applications and
services,'' a
statement said.
India seeks more oil, gas from Nigeria
• Union Minister for Petroleum and Natural Gas Murli Deora said Africa's largest
crude oil
and gas producer — Nigeria — was willing to increase oil exports to India besides
liquefied natural gas (LNG).
• Mr. Deora said that during a meeting, he took up the issue of GAIL (India) and
Petronet
LNG picking up stake in the $8-billion LNG project at Brass in the Niger delta.
• State-run Nigeria National Petroleum Corp has a 49 per cent stake in the Brass
project.
French energy major Total, Eni of Italy and ConocoPhillips hold 17 per cent stake
each.
• India's energy demand is expected to increase by over 40 per cent during the
next decade
but supply from its ageing oil-fields is expected to increase by around 12 per
cent
necessitating higher import of oil and gas assets abroad.
• India wants to increase its crude oil import from Nigeria, which plans to raise
its
production to 4 million barrels from 2.7 million barrels a day by 2012. India
imports
around 13 million tonnes of crude oil from Nigeria annually.
• Nigeria is the largest crude oil producer in Africa. Nigerian crude oil is light and
sweet
and commands a premium in the international market due to its quality.
India signs $10-billion worth deals with U.S.
• Taking India-U.S. trade relations to new territory, U.S. President Barack
Obama
announced that deals worth $10 billion (nearly Rs.44,000 crore) have been
reached
between India and the U.S. for creating more than 50,000 jobs back in the U.S.
www.upscportal.com
• Among the deals, SpiceJet has purchased 30 737-800 aircraft with a total cost
of $2.8
billion from Boeing and the Anil Dhirubhai Ambani Group purchased power
equipment
for 2,400 MW plants from GE for $2 billion.
• President Obama said, “India can be U.S.'s largest trade partner instead of
12th”.
Indian deals will create 7 lakh jobs in U.S.: CII
• Sourcing by India of military and nuclear hardware, civilian aircraft and
infrastructure
equipment alone from the United States can create nearly seven lakh jobs there
over the
next decade, according to a report by the Confederation of Indian Industry (CII).
• The report, ‘India-A Growth Partner in the Indian Economy,' which the CII
released after
conducting a survey of member firms that have operations in the U.S., says
Indian
business is now engaged across a wide spectrum of sectors in the U.S. and not
just
information technology and IT-Enabled Services.
$10-b infra debt fund to be created
• Seeking to give a massive push to investments in the infrastructure sector,
India and the
U.S. are actively considering setting up a $10 billion infrastructure debt fund
under the
public-private partnership (PPP) model for this purpose.
• Union Commerce and Industry Minister Anand Sharma said the proposal for
such a fund
had been mooted by the India-U.S. CEOs Forum that comprises 12 corporate
leaders
from each side.
• It could help India get resources to finance its $514 billion infrastructure
investment
plans.
• The India-U.S. CEOs Forum is co-chaired by Tata Group chief Ratan Tata and
and Head
of Honeywell Corporation Dave Cote. The Indian CEOs include ICICI Bank CEO
and
MD Chanda Kochhar, Bharti group chief Sunil Bharti Mittal, HDFC chief Deepak
Parekh
and State Bank of India Chairman O. P. Bhatt. India has emerged as an
attractive global
investment destination as its infrastructure sector alone requires investment of
$514
billion for the XI Plan (2007-08 to 2011-12).
• Almost 30 per cent of this investment is envisaged to come from private
sources.
U.S. to help in shale gas technology
• Union Petroleum and Natural Gas Minister Murli Deora said India had inked an
agreement with the U.S. for cooperation in shale gas technology that would help
it exploit
vast untapped unconventional resource.
• India does not have technology to exploit shale gas, an unconventional gas
trapped in
sedimentary rocks and the U.S. is a pioneer in the field.
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• India is targeting the first round of auction of shale gas areas for exploration
before the
end of 2011. India intends to join a boom in shale gas exploration that has
fuelled more
than $39 billion of acquisitions in the U.S. by companies including Reliance
Industries
Ltd.
$175-m worth deals on clean energy signed
• Even as India and the U.S. inked an agreement to establish a bilateral energy
cooperation
programme to promote clean and energy-efficient businesses, Indian and U.S.
companies
inked joint venture deals worth $175 million in the renewable energy sector.
• India provides biggest opportunities in the renewable energy sector and the
Jawaharlal
Nehru Solar Mission 2020 is an initiative which the U.S. companies would like to
be part
of. Around 35 U.S. companies recently participated in the Delhi Renewable
Energy
Conference and exhibited their technology and products.
• U.S.-based Ascent Solar and The Energy and Resources Institute (India) have
entered
into a memorandum of understanding (MoU) to collaborate on off-grid solar
charging
solutions for rural electrification using Ascent solar modules. Nearly $15-30
million in
U.S. exports are projected under this pact.
• Similarly, the other agreements include U.S.-based Team Sustain and UB
Engineering
Limited (India) signing an MoU to collaborate setting up large grid tie solar
photovoltaic
power plants in India which could generate business to around $84 million in
U.S.
exports.
• Azure Power (U.S.) and the Gujarat Energy Development Agency (India) have
announced an investment of $40 million for a 15 MW solar power plant in
Gujarat, a deal
which could generate around $24 million of U.S. exports.
• Ice Solar (U.S.) and Race Power (India) have signed an MoU to collaborate on
setting up
a solar photovoltaic project in Rajasthan which could generate business worth
$15
million in U.S. exports. On the other hand, the India-U.S. Energy Cooperation
Programme will mobilise private sector expertise and resources.
FieldFresh Foods unit on stream
• A fully automated food processing and beverages unit was unveiled in
HOSUR .The
50:50 joint venture by the telecom major Bharti Enterprises and the Philippines-
based
Del Monte Pacific is located on a sprawling 21.4 acre plot.
• The unit aims to create new benchmarks. Culinary products such as ketchups,
sauces,
mustard sauce and mayonnaise will be turned out in the factory.
India, Japan to sign CEPA soon
• India and Japan will ink a comprehensive market opening pact within a month,
amid
indications that both sides had sorted out differences on contentious issues.
www.upscportal.com
• Union Commerce and Industry Minister Anand Sharma said this would be a
move in the
right direction for enhancing trade ties and reduce/eliminate tariffs on over 90
per cent of
the goods traded between the two countries. The treaty that was slated to be
signed during
Prime Minister Manmohan Singh's visit to Tokyo last month but the formal
singing could
not take place as both sides were not able to sort out their differences on some
issues.
• The free trade agreement is likely to boost bilateral trade, which stood at
around $11
billion in 2009-10.
Afghanistan in talks with Indian companies for investment in mining
• Keen to exploit its mineral reserves, Afghanistan is holding talks with Indian
companies
for investing in its mines, even as it was holding road shows in New York and
London to
attract investment.
• Wahidullah Shahrani, Minister of Mines, Islamic Republic of Afghanistan, said
that his
government was in talks with Indian companies like Ispat, Essar, the Tatas and
also
Mittals and Vedanta.
• While the bidding process for a 2 billion tonne iron ore mine, which he said was
the
world's largest undeveloped mine, was now on and would attract investments of
$6
billion.
• The country's mineral potential was valued at $3 trillion and included deposits
of iron
ore, gold, oil and gas, gemstones and copper.
Banks asked to improve asset quality to support 9% growth
• Finance Minister Pranab Mukherjee asked banks to improve the quality of
assets as their
support would be necessary to maintain the higher growth momentum of 9 per
cent or
more in the coming years.
• The banking sector, he said, needed to support this growth momentum as
“India with
growth trajectory heading towards 9 per cent or more in the coming years is
placed at a
critical juncture.”
• As per RBI data, of the six lakh habitations in India, only about 30,000 had
commercial
bank branches.
• Thus, on an average, there were less than three bank branches per 100 sq.
km. of land
area and this ratio was worse for rural areas and for the Northeastern region, he
said
NTPC to commission first unit of Stage-II at Simhadri by March
• NTPC will commission the first unit of Stage-II expansion project of Simhadri
Super
Thermal Power Station by March 2011.
www.upscportal.com
• Regional Executive Director (South) Ambarish Nath Dave said that the
expansion work
taken up to double the capacity of the project to 2,000 MW would be completed
by the
end of 2011-12.
• Two units of 500 MW each in the first phase were synchronised in 2002.
Simhadri, the
first shore-based power plant, is adding two more units each with 500 MW by
investing
around Rs.5,000 crore.
• The power generated from the second phase would be supplied to Andhra
Pradesh,
Karnataka, Tamil Nadu, Kerala and Puducherry. As per the memorandum of
understanding signed with the Ministry of Power, Andhra Pradesh will get 35 per
cent of
the power.
• NTPC, with an installed capacity of 32,694 MW through 15 coal, seven gas and
five joint
venture power stations. The company is gradually diversifying its present fuel
mix.
• Nearly 17,000 MW is now being added through new and existing plants. NTPC
was
making efforts to increase its capacity to 75,000 MW by 2017 and 1.28 lakh MW
by
2032.
India Economic Summit to focus on infrastructure
• The three-day India Economic Summit, organised by the Geneva-based World
Economic
Forum (WEF), beginning November 14 in New delhi witness the assembly of over
700
top national and international corporate honchos along with stalwarts of the
UPA-II
regime and focus on the Indian economy and deal with issues like infrastructure,
inclusive growth and protectionism.
Oilex strikes gas in Cambay Basin
• Oilex of Australia has announced that it has struck huge reserves of natural
gas in the
Cambay Basin in Gujarat, in what is being dubbed as a big discovery after
Reliance
Industries' gas find in the KG basin and Cairn India's discovery in Rajasthan.
• “In-place reserves in the Cambay Basin block near Khambat town,160 km
south of
Ahmedabad in Gujarat, is 16-21 trillion cubic feet (tcf),'' Oilex Managing Director
Bruce
McCarthy said of these reserves, 10 per cent or at least 1.6 tcf are recoverable.
Initial gas
production could be five million standard cubic feet a day, rising up to 50 mscfd
by 2012-
13.
• The Cambay field is a pre-New Exploration Licensing Policy (NELP) block that
was
originally awarded to the Gujarat State Petroleum Corporation (GPSC) and
Canada's
Niko Resources. Oilex stepped in upon exit of Niko. Oilex holds 45 per cent
interest in
the Cambay field while GSPC holds the balance.
Vedanta plans to list Sterlite Energy
• Metal and mining major Vedanta Resources Plc said it was considering listing of
its energy arm
Sterlite Energy and the Zambian copper unit to unlock value for stakeholders
and raise funds.
www.upscportal.com
• On the $9.6-billion Cairn-Vedanta deal, the group was on track to obtain all
regulatory approvals
by the first half of 2011.
Special role for reserve currency countries'
• In words that would be music to Chinese ears, a newly assertive Manmohan
Singh
squarely and unexpectedly took on the U.S. in his speech at the G-20 Plenary in
Seoul.
• Refusing to apportion blame on just one country or the other, he said “reserve
currency
countries have a special responsibility to ensure that their monetary policies do
not lead
to destabilising capital flows, which can put pressure on emerging markets.” The
U.S.
dollar is the main reserve currency country.
• Just a few moments earlier, he had also not spared the surplus countries.
Possibly
referring to efforts at deficit reduction of the type the U.K. has begun, he said,
“If this
(deficit reduction) is not to have a contractionary impact on the world economy,
it must
be offset by reducing current account surpluses elsewhere.” This was aimed at
China,
which has unwarrantedly large surpluses.
• He reverted to the responsibilities of the major global fiscal profligates like the
U.S. and
said “advanced deficit countries must follow policies of fiscal consolidation,
consistent
with their individual circumstances so as to ensure debt sustainability over the
medium
term. This means that fiscal correction need not be frontloaded everywhere.”
• He thus underlined the need for balancing capital flows but stressed the need
of the
developing countries which badly needed investment in infrastructure.
• He added that recycling surplus savings into investment in thus way would
help to
address developmental imbalances. “In other words, we should leverage
imbalances of
one kind to redress imbalances of the other kind.”
• On reforming the IMF he acknowledged the progress made so far in the re-
distribution of
quotas but insisted that “Further moves are necessary in this direction and we
welcome
the decision to comprehensively review the quota formula by 2013 to reflect the
growing
economic weight of the emerging market countries.”
GM's Talegaon engine plant on stream
• General Motors India (GM) inaugurated its new flexible-engine facility at
Talegaon near
Pune. This is GM's first powertrain plant in the world that enables both petrol
and diesel
engines to be manufactured simultaneously.
• The facility represents investment in excess of $230 million and while it has an
initial
annual production capacity of 1.60 lakh engines, it is designed to accommodate
future
expansion. The new plant will produce engines for small passenger cars of the
company
in India and has come up in under two years.
www.upscportal.com
• General Motors India has completed 14 years of operation and today offers a
range of
products under the Chevrolet brand, which was introduced in India in 2003. In
addition to
the Chevrolet Spark and Beat, it produces Captiva, Optra, Cruze, Aveo, Aveo U-
VA, and
Tavera.
Forex reserves cross $300 billion
• The country's foreign exchange reserves breached the $300-billion mark for
the first time since
2008 with an addition of $2.2 billion last week (November 5) on the back of a
healthy rise in
foreign currency. The rise to $300.21 billion puts India, which has attracted $35
billion of foreign
fund flows in capital markets alone this fiscal, in a select group of countries such
as China, Japan
and Taiwan that have forex reserves exceeding $300 billion.
• India's foreign exchange reserves had earlier touched $300 billion in March
2008, before the
setting-in of the global slowdown in September that year.
• Foreign currency assets expressed in U.S. dollar terms include the effect of
appreciation or
depreciation of non-U.S. currencies, such as the euro, the pound and the yen,
held in the reserves,
the apex bank said.
Economy will revert to 9% growth: Pranab
• Union Finance Minister Pranab Mukherjee exuded confidence that the economy
would
soon revert to 9 per cent growth, witnessed in the pre-crisis period, even as
industrial
growth plunged to a 16 month-low of 4.4 per cent in September.
• “In the short term, it is reasonable to expect that the economy will go back to
the robust
growth path of around 9 per cent average that it was on before the global crisis
slowed
[it] down in 2008,” Mr. Mukherjee said at the India Economic Summit.
• For the second consecutive month this fiscal, industry performed poorly in
September. Its
growth plummeted to 4.4 per cent after 6.92 per cent the previous month.
• The manufacturing sector, comprising almost 80 per cent of the Index of
Industrial
Production (IIP), grew at slower rate of 4.5 per cent in September, against 8.3
per cent a
year ago.
• The economy grew at an average rate of 9 per cent per annum from 2004-05
to 2007-08.
After the global financial crisis, it slowed down to an average growth of 7 per
cent
between 2008-09 and 2009-10.
Coca-Cola India launches NESTEA
• Coca-Cola India launched ready-to-drink iced tea brand, NESTEA, a global
brand
licensed to Beverage Partners Worldwide (BPW), a joint venture company of The
Coca-
Cola and Nestle.
• The product, to be manufactured at the Hindustan Coca-Cola bottling plant at
Atmakuru
in Guntur, Andhra Pradesh, is being made available initially in Mumbai through
select
outlets followed by a pan India launch next year.
www.upscportal.com
Dabur buys U.S. firm
• Dabur India acquired 100 per cent equity in U.S.-based Namaste Laboratories
and its
three subsidiaries — Hair Rejuvenation and Revitalization Nigeria, Healing Hair
Laboratories International, and Urban Laboratories International — along with its
South
African arm for $100 million.
• “This acquisition marks our entry into the fast growing $1.5-billion ethnic hair
care
products market in the U.S., Europe and Africa,” said Dabur India Chairman
Anand
Burman in a statement.
Maharatna status for IOC, ONGC and NTPC
• The Centre formally conferred the coveted Maharatna status on Oil and Natural
Gas Corporation
(ONGC), Indian Oil Corporation (IOC) and NTPC.
• Minister for Heavy Industry and Public Enterprises Vilasrao Deshmukh gave
away certificate
conferring the Maharatna status to the heads of ONGC, IOC and NTPC at a
function here.
• The Maharatna status to select PSEs ensures more empowerment in decision
making and
encourages becoming globally competitive
• Navratna for RINL
• Rashtriya Ispat Nigam Ltd., the corporate entity of Visakhapatnam Steel Plant,
joined the
exclusive club of Navratna companies.
Anil Ambani group got undue benefits: CAG report
• The report of the Comptroller and Auditor-General of India on the 2G spectrum
allocation indicates that it was the Anil Dhirubhai Ambani Group (ADAG) that
benefited
the most from the arbitrary and unfair manner in which licences were given in
2008.
• The CAG has found that Mr. Ambani's companies were given undue advantage
over
other players in at least three ways:
• first, the fact that Swan Telecom (now Etisalat DB Telecom), one of the 2G
beneficiaries,
appeared to have been acting as a front company for ADAG's Reliance Telecom
was
ignored by the Department of Telecom;
• second, it got the spectrum before others in the queue;
• And third, Reliance Communications was favoured in the spectrum allocation
while
getting access to a dual technology licence for offering both CDMA and GSM
services.
• The other companies identified by the CAG as having benefited from the unfair
and
arbitrary award of spectrum were the Unitech group (brand name Uninor),
Shipping Stop
Dot Com (India) Pvt. Ltd. (later changed to Loop Telecom), Datacom Solutions
Pvt. Ltd
(later changed to Videocon Telecommunications Ltd.) and S Tel Ltd.
www.upscportal.com
• Axis Bank, the third largest private sector bank, announced the acquisition of
the
investment banking arm of Enam Securities for around Rs.2,067 crore
• “It is proposed that Enam Securities will demerge its investment banking,
institutional
equities, retail equities and related businesses such as distribution of financial
products,
NBFC and the like to a wholly-owned subsidiary of Axis Bank pursuant to a
scheme of
arrangement. Axis Bank will also demerge its investment banking business into
the
wholly-owned subsidiary.”
• The proposed scheme is subject to approvals from the respective shareholders
and
approval from the authorities such as the Reserve Bank of India, the Securities
and
Exchange Board of India and the high courts of Gujarat and Mumbai.
Centre sets up panel on financing infrastructure
• Days after Prime Minister Manmohan Singh announced that India needed $1
trillion for
developing the country's infrastructure, the Centre announced setting up of a
high-level
committee on financing of infrastructure.
• The committee, to be headed by former Reserve Bank of India Deputy
Governor Rakesh
Mohan, will submit its report within 18 months. The committee would suggest
steps for
improving capital markets for garnering long-term savings and facilitating
foreign
investment flow.
• The panel will assess the investments required to be made by the Central and
State
governments, public sector undertakings (PSUs) and the private sector in ten
major
physical infrastructure sector projects. India is aiming to double its investment in
infrastructure to about $1 trillion during the XII Plan (2012-17) from an
estimated $500
billion in the current Plan. The XII Plan envisages investment of around Rs.41
lakh crore
for the infrastructure sector. It is expected that half of the investment target
would come
from the private sector and the balance from PSUs.
• The panel will also identify the regulatory or legal impediments constraining
private
investment in infrastructure and make specific recommendations to facilitate
their
removal.
FTA with Canada will help boost bilateral trade
• The Free trade agreement (FTA) between India and Canada will help push
bilateral trade
to $15 billion in five years, a Canadian Minister said.Bilateral trade was close to
$4.2
billion last year, said Canadian Minister of International Trade Peter Van Loan.
• “Both governments have set a target of increasing the mutual bilateral
merchandise trade
to $15 billion in the next five years. A free trade agreement will help us get
there,”
Axis Bank acquires Enam's arm for Rs.2,067 crore
www.upscportal.com
• Union Finance Minister Pranab Mukherjee on Friday asked banks to focus and
reach out
to the weaker sections of society as a high economic growth without according
benefits to
the poor would not achieve the national goal of inclusive growth.
• Turning to the challenge of developing world-class infrastructure, Mr.
Mukherjee pointed
out that there would be an estimated gap of 30 per cent in the $1 trillion
investment
pegged for infrastructure during the XII Plan (2012-17). “We have to breach that
gap,” he
said. For better coordination among regulators in this regard, the Finance
Minister said
the Ministry had decided to establish the Financial Stability and Development
Council
(FSDC) and a discussion paper had been circulated in coordination with the
Reserve
Bank of India (RBI). “Another important legislation which we are going to have
for
which we have set up a committee, is [the] Financial Legislative Reforms
Commission
(FLRC),” he said. The objective was to update various financial sector related
legislation,
so that it could be in tune with the prevailing condition, he said.
Suzlon goes local in tough China market
• Suzlon Energy, India's largest wind turbine manufacturer, appointed a new
Chinese CEO,
part of a wider strategy to localise for a market it has, so far, found difficult to
enter.
• Suzlon, which has invested more than $300 million in China over the past five
years, has
now a 3.4 per cent market share. It has struggled to compete with bigger
Chinese players,
who have cornered around 80 per cent of the wind power market, and Western
firms like
Vestas and GE. The Suzlon Group is now ranked eighth in the fast-growing wind
sector
here.
Cairn should seek Centre's consent for all properties
• Acting tough after having secured legal opinions from the Law Ministry and the
Solicitor
General of India, Petroleum Ministry indicated that the $8.48-billion Cairn-
Vedanta deal
would only be considered for approval if Cairn Energy sought government
consent for all
the properties and not selective ones.
• Seeking to harden its stand on the issue and virtually rejecting Cairn Energy's
stand, the
Petroleum Ministry has maintained that U.K.-based Cairn Energy will have to file
a
revised application for formal transfer of control of all its 10 properties in the
country.
• Cairn's current application seeking government nod for the deal has left out
the three
producing properties, including the giant Rajasthan oilfields.
Trade curbs will only lead to protectionism — Lamy
• World Trade Organization (WTO) Director General Pascal Lamy warned WTO
member
states against taking trade restrictive measures and asserted that it would only
lead to tit
for tat protectionism.
• Delivering a special address on ‘WTO and Doha negotiations: closing the gaps
and
moving ahead,' organised by the Federation of Indian Chambers of Commerce
and
Banks asked to reach out to weaker sections
www.upscportal.com
Industry (FICCI) ,Mr. Lamy said resorting to trade restricting measures to
address the
challenge of reducing unsustainable and socially unacceptable unemployment
levels was
not the right path. “The macro-economic imbalances do not originate in trade.
Addressing
them through trade restricting measures will not work. It will trigger tit-for-tat
protectionism,'' he remarked.
• Mr. Lamy said recent studies for India showed that nearly 14 million jobs were
created
directly or indirectly as a result of increased exports between 2003 and 2008.
Furthermore, a back-of-the-envelope calculation for India suggested that on the
basis of
the average pre-crisis growth in real merchandise exports, an average of 7.5
million jobs
might be created from exports each year, he pointed out.
Aircel ties up with Blyk of U.K.
• Aircel joined hands with U.K.-based Blyk to offer interactive, youth-focused
mobile
service. Through ‘Blyk on Aircel', mobile subscribers will get a variety of products
and
services.
Vedanta arranges $6 b funding for Cairn deal
• Vedanta Resources plc said it had entered into financing agreements with a
consortium of banks
for $6 billion to fund its proposed buyout of up to 60 per cent stake in Cairn
India.
• London-listed Vedanta Resources planned stake acquisition in Cairn India,
which was announced
in August, is worth as much as $8.5 billion.
• “The financing announced provides the group with funding flexibility. We are
delighted to
announce $6 billion of commitments from leading international banks...,”
Vedanta Chairman Anil
Agarwal said.
Y.V. Reddy's book launched
• The Reserve Bank of India (RBI) Governor D. Subbarao launched the book,
Global
Crisis, Recession and Uneven Recovery, by Y. V. Reddy, former RBI Governor .
• The book is a sequel to Dr. Reddy's best-selling work, India and the global
financial
crisis: managing money and finance. The present book, written at a time of
multiple
challenges for the Indian economy, provides a thinker and experienced policy-
makers'
understanding of the genesis, progression and impact of the financial crisis, and
of the
lessons it offered.
Kerala to host global meet on public sector
• The Department of Industries and Commerce is organising an international
conference at
Kovalam on December 10 and 11 to discuss the relevance of State owned
enterprises
(SOEs).
• The international conference is aimed at drawing the attention of policy makers
in other
countries to the Kerala experience.
www.upscportal.com
M&M acquires 70 % in Ssangyong for $463 m
• Mahindra & Mahindra (M&M) and Ssangyong Motor Company Limited (SYMC)
of
Korea signed a definitive agreement in Seoul for M&M to acquire a 70 per cent
stake in
SYMC.
• A statement from M&M said the total cost of acquisition is $463 million with
$378
million in new stock and $85 million in corporate bonds.
Foreign investors hold 30 % in BSE
• Foreign investors now hold 30 per cent stake in BSE, lower than the
permissible limit of 49 per
cent.
SEBI panel suggests tougher rules for new bourses
• In a move that could make it difficult for corporate entities to set up stock
exchanges, a
Securities and Exchange Board of India committee recommended that only
banks and
public financial institutions could be anchor investors in bourses and stopping
them from
listing or making huge profits.
• According to industry sources, the recommendations would make things
difficult for
FTIL group-founded new bourse MCX-SX, which is allowed to trade only in
currency
futures, and its plea for trading in equity and other segments has already been
rejected by
SEBI on non-compliance with shareholding and other norms.
• The panel suggested a minimum net worth of Rs.100 crore for the stock
exchanges and
allowing only banks and public financial institutions as the anchor or main
investors.
These anchor investors would need to be identified in the application itself by
any entity
seeking permission.
• For anchor investors also, the committee has suggested a minimum Rs.1,000
crore net
worth.
• The recommendation of the Bimal Jalan Committee, if accepted, would derail
the plans
of the country's two premier bourses — the BSE and the NSE — to go public.
• The Jalan committee, which submitted its proposals after months of
deliberations, also
said that disclosure and corporate governance norms for market institutions
should be the
same as that applicable for listed entities.
NTPC inks pact with ADB, Japanese firm
• State-run largest power generation company NTPC on inked a pact with Asian
Development Bank and Japan's Kyuden International Corporation to jointly
develop 500
MW of renewable energy projects across India over the next three years.
• Under the joint venture agreement, NTPC and its partners will set up a new
company to
develop wind power and small hydro-electric power projects. NTPC will be the
leader of
www.upscportal.com
the joint venture with a 50 per cent stake, while ADB and Kyuden International
will
contribute 25 per cent each towards the equity share capital of the company.
The initial
authorised share capital of the company will be Rs.6.50 crore and the paid-up
share
capital will be Rs.1 crore.
• NTPC has set a target for developing at least 1,000 MW of renewable energy .
Reliance communications ties up with Twitter
• Reliance Communications has tied up with Twitter to make the popular
information network
available on SMS. Customers can now enjoy Twitter on SMS free till November
30. Meanwhile,
based on a tie-up with mobile messaging leader Bubble Motion, Reliance has
launched a social
voice blogging service making it fun and easy to become a follower of some of
India's favourite
stars, getting text and voice updates directly from the celebrities with updates
on their day-to-day
lives, says a release.
Huge investment opportunities in infrastructure
• President Pratibha Patil discussed investment opportunities in India and the
UAE with
Sheikh Mohammed bin Rashid Al Makhtoum, Vice President and Prime Minister of
the
UAE and the Ruler of Dubai and Sheikh Mansour Bin Zayed Al Nahayan, the
Deputy
Prime Minister of the UAE and the Minister of Presidential Affairs in Abu Dhabi.
• The President said India was looking at $1 trillion in investments in the
infrastructure
over the next five years and that the government was planning to disinvest up to
$8.7
billion in public sector undertakings.
• Sheikh Mansour will be visiting India soon to discuss investment opportunities
—
interestingly, he also heads the International Petroleum Investment Company,
an entity of
the Abu Dhabi Government responsible for all foreign investments in the oil and
petrochemical sector, Chairman of the Emirates Investment Authority, a leading
Sovereign Wealth Funds in the UAE and a board member of the Abu Dhabi
Investment
Authority that is considered to be the largest Sovereign Wealth Funds in the
world.
Nuclear Power to commission 220 MW Kaiga-4 unit today
• Nuclear Power Corporation of India Ltd. (NPCIL) will commission the 220-MW
nuclear power
plant Kaiga stage 4 project.
• The entire power will be supplied to the Southern Grid. Speaking at the India
Energy Forum in
New delhi,NPCIL Associate Director N. Nagaich said the commissioning of the
project would be
done by NPCIL Chairman and Managing Director S. K. Jain.
• Mr. Jain said NPCIL would stop making nuclear power with capacity of 220 MW
and 540 MW
with the commissioning of the 220-MW of Kaiga unit.
www.upscportal.com
• The new 500-MW Unit-VII of NTPC's Korba project in Chhattisgarh has been
synchronised with
the grid. The Korba project is already having three units of 200 MW each in
Stage-I and another
three units of 500 MW each in Stage-II.
20 km road a day turning out to be a pipe dream
• Construction of National Highways has been far from satisfactory during the
current
fiscal, shattering the dream of building 20 km of road each day.
• Against the target of constructing 952.79 km under various phases of the
National
Highway Development Programme (NHDP) by September 2010, only 680 km
has been
built, about a 70 percent achievement.
FDI inflows drop 26 % in January-September
• Even as global recovery continues to be fragile, foreign direct investment (FDI)
inflows
into India stood at just $15.97 billion during the January-September period,
down 26 per
cent as compared to the same period last year. According to the official data of
Department of Industrial Policy and Promotion (DIPP), in January-September,
2009, the
country attracted FDI worth $21.44 billion.
• The countries that pumped the maximum foreign capital into the Indian
economy during
the nine-month period were Mauritius, Singapore, the U.S., the Netherlands,
Cyprus,
Japan, Germany and France.
• The sectors that attracted the maximum foreign inflows include services
(financial and
non-financial), computer software and hardware, telecommunications, housing,
real
estate, power and automobiles.
• According to the data released by the Reserve Bank of India (RBI) in its latest
bulletin,
FDI flows shrunk by over 23 per cent during the first-half of the current financial
year to
$13.50 billion from $17.55 billion a year ago.
• In contrast to FDI, FII (foreign institutional investment) inflows have surged
due to better
returns that are on offer in emerging markets such as India. During the first-half
of the
financial year, FII's had invested $22.3 billion in Indian stocks and bonds as
compared to
$15.27 billion during April-September 2009, an increase of over 46 per cent.
CEA efforts to renovate power projects
• With the country struggling to meet targets for capacity addition, the Central
Electricity
Authority (CEA) has chalked out a major “National enhanced efficiency
renovation and
modernisation programme” for around 4,900 MW of power projects in the public
sector
during the XI and XII Plans.
• Under this major national initiative, the CEA has recommended that the Power
Ministry
should undertake renovation and modernisation of about 19,000 MW capacity,
life
extension of about 7,300 MW during the XI Plan. Apart from this, it has also
outlined
NTPC synchronises 500 MW unit at Korba
www.upscportal.com
that renovation and modernisation of about 5,000 MW and life extension of
about 16,500
MW should be done during the XII Plan.
• The Power Ministry is also gearing up to launch the National Mission for
Enhanced
Energy Efficiency (NMEEE) which is part of the National Action Plan of Climate
Change. The objective of the mission is to devise efficient and cost-effective
strategies
through demand-side management, initiatives and market transformation.
RIL among world's largest chemical firms
• Reliance Industries Limited (RIL) has been ranked globally at the 20th position
on the ICIS Top
100 Chemicals Companies list. German major BASF topped the list.
• The companies were ranked on the basis of their annual sales figures in the
annual list released by
ICIS Chemical Business magazine. The ICIS is a global information provider for
the chemical
and energy industries.
• While RIL is the only Indian company in the top 20, another Indian company,
Tata Chemical, has
been ranked at 115th in a separate list of companies — titled ‘Bubbling Under' —
that did not
make it into the Top 100.
• The RIL has been also named as the 8th biggest gainer in terms of operating
profits.
• The RIL was ranked 20th on the basis of sales worth $12.3 billion last year,
while top-ranked
BASF had sales of $72.7 billion.
I-T Department introduces new number for taxpayers
• Taxpayers will now have to procure a new number for filing returns and
making any
communication with the Income Tax Department.
• The unique Document Identification Number (DIN), on the lines of numbers
like PAN
(Permanent Account Number) and TAN (Tax Deduction and Collection Account
Number), will be
quoted on “every” income tax-related communication, including the returns to
be filed next year
for the financial year 2010-11.
• “The DIN will be generated by the I-T Department and will be useful,
essentially, for error-free
filing of tax returns, claiming refunds and other communication with the
department by the
assesses,” a senior Finance Ministry official said.
‘Decision on Cairn-Vedanta deal by February'
• The Petroleum and Natural Gas Ministry will take a final view on granting
approval to
the $9.6-billion Cairn-Vedanta deal by February-end, Petroleum Secretary S.
Sundareshan said.
• Cairn Energy had on August 16 announced sale of 40-51 per cent stake in its
Indian unit
to London-listed Vedanta, but chose to be selective in approaching government
for
approval of the deal. It had maintained that the consent of the government was
not
www.upscportal.com
required for transfer of control in a company holding interest in the three blocks
that were
awarded prior to advent of the New Exploration Licensing Policy (NELP).
• However, with the Petroleum Ministry acting tough, Cairn Energy was forced to
retrace
its earlier stand.
Decision on freeing urea sector before this fiscal
• The Union Fertiliser Ministry said decision on decontrolling the urea sector
would be
taken within the current financial year.
• “The Cabinet is yet to consider decontrolling the urea sector. I expect,
whatever the
decision will be, it will be taken before the current financial year,” Fertiliser
Secretary
Sutanu Behuria said.
• The fertilizer industry has been pressing the government to decontrol the urea
sector in
line with the potassic and phosphetic fertilizers.
• With the introduction of the nutrient based subsidy scheme, with effect from
April this
year, the government has already freed potassic and phosphetic fertilizers.
However, in
relation to urea, including its price and movement, it is still controlled by the
government.
• Urea constitutes almost 50 per cent of India's fertilizer consumption.
www.upscportal.com

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Economy 1

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Economy: April 2010

India plans ‘Sovereign Fund' to seek energy assets abroad

• In an indication of India turning aggressive in its hunt for energy assets

Ericsson gets $1.3 b contract from Bharti

• Bharti Airtel awarded a $1.3-billion network expansion contract to Ericsson

• As part of this contract, Ericsson will supply its industry-leading portfolio of

India Infra to invest in Karaikal Port

• Karaikal Port Private Ltd (KPPL), a wholly-owned subsidiary of Marg, an

• It is a deep-water port at Karaikal district of Puducherry. It is to be developed

• India Infrastructure Fund (IIF), which is managed by IDFC Project Equity

• The two companies have agreed to collaborate on areas including nuclear

Textile industries park to be opened soon

• A comprehensive textile industries park being developed under the Textile

BoB life insurance venture to break-even by 2015

Dhanlaxmi Bank launches credit cards

• Dhanlaxmi Bank, for the first time in India is introducing a ‘pay by

Heartening rebound in world trade

SAR Group to enter mobile handset market

ONGC gets CER from UN Agency

Godrej to acquire Megasari of Indonesia

• Godrej Consumer Products Ltd (GCPL) entered into an agreement to

• The Megasari Group manufactures and distributes a wide range of household

NPCIL-NTPC to build two nuclear plants

• Nuclear Power Corporation of India Limited (NPCIL) and NTPC joint

• NPCIL plans to build indigenously developed pressurised heavy water

Ruchi Group to form venture with Mitsui of Japan

• Ruchi Group signed an agreement with Japanese conglomerate Mitsui to

Indian, Russian cos to jointly bid for Sakhalin-III oil fields

Emami plans power plant in Ethiopia

Cabinet approval for big ticket disinvestment in SAIL

• SAIL is now undertaking a Rs.70,000-crore expansion programme to raise its

• The disinvestment is in line with the government policy, sharing ownership of

RIL to buy 40 % interest in Atlas Energy's Shale acreage

Jet Airways to start daily flights to South Africa

BGR, Orissa Govt sign pact

• BGR Energy Systems has signed a memorandum of understanding (MoU) with

• The Orissa Government is entitled to purchase 12-14 per cent of power

Singapore to host CommunicAsia

• CommunicAsia2010, the most established information, communication and

Four PSUs pitch for Maharatna status

• Four major public sector undertaking (PSU) companies — Indian Oil

• Senior officials from the Department of Expenditure, Department of Public

GAIL in talks with EIL for city gas distribution

Sany Group opens first plant in India

• China-based Sany Group, a global major in the construction machinery

Reliance World introduces robotics camp

• Reliance World, in association with robo.in, a division of ThinkLABS, announced

NTPC plans plant in Bangladesh

• At present, Bangladesh has a power generation capacity of 5,000 MW, of which

Coal India selects merchant bankers to acquire overseas assets

• An investment of about $1.8 billion is expected to be made in these deals

SEBI moves apex court over ULIP

• On April 10, SEBI had banned 14 life insurance companies.

Renault sells stake to M&M in the joint venture

RIL to invest in Deccan 360

Kingfisher launches new international routes

Mahindra Retail launches Mom & Me store

NTPC plans two plants in Kazakhstan

Rangarajan to head panel on public expenditure

• The Planning Commission announced the setting up of an 18-member expert

Jaypee's huge outlay on Ganga Expressway project

NTPC-NPCIL sign JV agreement

• The agreement was signed by S. K. Jain, Chairman and Managing Director,