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Nod to 49 pc FDI in asset reconstruction companies
Govt still keen on PSU divestment
Economy to grow by 7.6 pc, predicts NCAER
Board may decrease interest rate on EPF
Piramyd to tap Punjab, Haryana
Assocham favours 3-tier excise duty
HPMC to launch wine, cider in tetrapacks
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IFC may bag stake in Federal Bank
Mumbai, November 9 The International Finance Corporation, the World Bank’s investment arm, is open to acquire ICICI Bank’s entire stake in the Federal Bank, which is the largest shareholder in the bank with a 20.76 per cent stake.
Rel Info to host CDMA summit
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Nod to 49 pc FDI in asset reconstruction companies
New Delhi, November 9 The decision comes a day after US Treasury Secretary John Snow pressed for opening up of India’s financial sector. The move to allow FDI in ARCs paves the way for entry of foreign banks and asset reconstruction companies, who are keenly waiting to enter the Indian market. The new policy on FDI in ARCs would be reviewed after two years, a Finance Ministry press note said. The Foreign Investment Promotion Board (FIPB) would from now on consider applications from companies eligible to invest in India in the equity capital of ARCs registered with Reserve Bank of India (RBI) under the FDI route. The government will allow a maximum foreign equity of 49 per cent in ARCs but investments by FIIs would not be permitted. Where any investment by an individual exceeds 10 per cent equity, ARCs should comply with the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. RBI will shortly come out with a notification under FEMA for the FDI in ARCs. FDI in ARCs would enable foreign players to enter India and help Indian companies in better recovery of NPAs.
US happy
Terming India’s move to increase FDI cap in insurance sector to 49 per cent from the current 26 per cent as step in the right direction, the US today said it was looking at further deepening of bilateral economic ties in financial sectors like banking and credit markets. “I think the proposal to move to higher levels of caps from 26 per cent to 49 per cent is a move in the right direction. We encourage the move,” US Treasury Secretary John Snow told reporters after meeting Planning Commission Deputy Chairman Montek Singh Ahluwalia here. John, who is on a two-day visit to India, said that he discussed issues related to further deepening ties with India on sectors like real estate, banking and credit market and financial services. “We are here to discuss various issues in the financial sector and look forward to continuing the discussion. We had a good discussion,” John said referring to his meeting with Mr Ahluwalia. On the Indo-US economic dialogue the Treasury Secretary said it was going on at an “excellent” pace. Talking to reporter later, Mr Ahluwalia said discussion with Snow was continuation of the issues Prime Minister Manmohan Singh had taken up during his recent visit to Washington. “We had a good meeting. It was basically briefing the US side on the views held by different sections on issues like insurance cap and other financial issues and also exchanging views,” Mr Ahluwalia said.
— PTI
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Govt still keen on PSU divestment
Mumbai, November 9 Mr Chidambaram, who was here to attend a conference, said the government has held discussion in the matter. “We have had discussions about disinvesting small portions of equity in selective profit-making public sector enterprises other than the navratnas,” the minister said. Mr Chidambaram said the government was not worried about the rupee’s appreciation against the dollar. “We have always said that orderly movements in both ways is acceptable. It is only disorderly movement which should cause concern,” Mr Chidambaram said. He noted that the rupee has depreciated against the yen, pound and euro though it had appreciated against the dollar. The rupee has lost 3.7 per cent since the start of October and about 5 per cent since the start of this year. Mr Chidambaram said the market needed to focus on the rupee’s trade-weighted real effective exchange rate. The minister however felt that rising prices of petroleum products would result in inflationary pressures. He said the increase in fuel prices contributed about 60 per cent to the inflationary factors in the country. “As we said before, the pass through of fuel prices will have an impact on inflation. Inflation is roughly now at around 4.4 per cent. The RBI Governor and I have said that we expect inflation to be around 5 per cent and that is unavoidable,” Mr Chidambaram said. The minister noted that India’s widening trade deficit expected to touch $48 billion this year was not a cause for worry. “We can sustain trade deficit of this level, which means that capital goods are being imported and that is good,” he said. Mr Chidambaram said he was hopeful of India managing its fiscal deficit at the targetted 4.3 per cent this year. The minister was optimistic about the quality of the Indian workforce. “The size of our workforce as a proportion of our total population would continue to grow up to 2020 or even 2025 before it needs to decline giving us the advantage of being the largest supplier of human resources,” he said. If India’s workforce is educated and skilled imagine the tremendous contribution it will make to the national output that will propel the country to the front ranks of the world, he added.
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Economy to grow by 7.6 pc, predicts NCAER
New Delhi, November 9 “Growth in 2005-06 is expected to increase to 7.6 per cent from 6.9 per cent last year,” it said in its quarterly review. For the next four years, the economy is poised for sustained growth of 7.7 per cent annum for 2006-07 to 2009-10 period, NCAER said, adding monsoon remains a major risk factor. The main source of improvement in GDP growth this fiscal is expected to be from agriculture, which is likely to grow by 3.4 per cent this fiscal from 1.1 per cent in 2004-05. Industry and services are to improve their performance marginally. “We expect industry and services to grow at 8 and 9 per cent respectively this year,” NCAER said. The think tank said prices are expected to rise more slowly this fiscal compared to last year. “Average inflation is expected to be less than 6 per cent, down from 6.5 per cent last year,” it said. Meanwhile, optimistic on India sustaining 7 to 8 per cent growth, Asian Development Bank (ADB) today said it might scale up assistance to $3 billion annually and is ready for another rupee bond issue for funding private sector. Identifying infrastructure as a major bottleneck impeding higher growth, ADB Vice-President Liqun Jin favoured FDI in the sector and a “balanced development” with participation from private sector. “For Indian economy to maintain 7 to 8 per cent growth, enhancement of infrastructure is very important,” he said. Asking India to open up economy further and go for more FTAs, Mr Liquin said: “It was because of vested interest, domestic industries objected to FTAs.”
— PTI
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Board may decrease interest rate on EPF
New Delhi, November 9 Official sources indicated that the board could agree to the interest rate of around 8 per cent as recommended by the Finance and Investment sub-committee of the EPFO. Under pressure from the Left parties and Communists- backed trade unions, the UPA Government agreed to a 9.5 per cent EPF rate last fiscal, which had resulted in the gap of Rs 716 crore. The deficit was met through the reserve fund which now has a corpus of about Rs 250 crore. To continue to give a higher interest rate to its subscribers, the Board is mulling different investment options. The Board had appointed global consulting firm Mercer for advising on more lucrative investment strategies, including parking funds in equities and postal deposits. The Board, which manages about Rs 1,28,000 crore corpus of workers’ savings, , faces an additional burden of around Rs 927 crore due to the reduced interest rate in SDS. The EPFO’s total corpus of about Rs 1,28,000 crore includes Rs 71,000 crore of the EPF, Rs 52,000 crore of the Employees Pension Scheme and Rs 4,000 crore Employees’ Deposit-linked insurance. The Board will also discuss the valuation reports of the Employees Pension Scheme. The board could also recommend an increase in the contribution to the pension fund from the current 8.33 per cent of the employers’ contribution to 11 per cent. The changes in the pension fund, sources said, were being looked into to facilitate the bridging of the gap because of the raising of the retirement age from 58 to 60 years, calculating the pension on the basis of the average salary of five years instead of one year and scrapping all caps on the salary against which pension is calculated. The idea behind increasing the retirement age is to have four years of relief as the employees would contribute for two more years at a higher level and so the liability will go down. The average of the past five years’ salary would also be certainly lower than the average of last year’s salary.
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Piramyd to tap Punjab, Haryana
New Delhi, November 9 “The Piramyd group plans to invest over Rs 160 crore in the retail sector, mostly in Punjab, Haryana and New Delhi, over the next one-and-a-half years. We have already acquired property in Ludhiana, and have identified sites in Gurgaon and Delhi. In addition, we are looking for properties in other towns like Jalandhar and Amritsar,” said Mr Krish Iyer, Managing Director and CEO of the company ,here today.The company was geared up to expand its business from the present level of four mega stores. The company was open to strategic collaborations, he said, with major foreign players to tap the growing domestic market. The annual size of the domestic organised retail market was estimated to reach Rs 1,10,000 crore by 2010 from Rs 28,000 crore now, said Mr Mridumesh K. Rai, DGM, Strategy and Business Development, PRL, while referring to an industry study done by KSA Technopak. “With the rise in income, young customers even in small towns are looking for all sorts of products under one roof. Besides four metros, we are witnessing an exponential growth of demand for retail products in the northern region,” he said. “ We have decided to tap the primary market with the initial public offer of 90 lakh equity shares worth around Rs 160 crore.” Encouraged with the market response in Ludhiana, Ahmedabad, Nagpur and Pune, he said:“ Piramyd has decided to offer lifestyle and food, home and personal care segments. The company plans to open 17 mega stores and 69 neighbourhood grocery stores in the country under Trumart brand.”
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Assocham favours 3-tier excise duty rates for SSIs
New Delhi, November 9 In a representation submitted to the Finance Ministry of Central Excise Intelligence, Assocham President Anil K. Agarwal said the present excise duty rate of 16 per cent for the SSI sector was very high and bred inefficiencies and distortions in tax collections and, therefore, should be corrected. The new excise tax slabs, as suggested by Assocham, include excise duty rate of 0 per cent for the SSIs sector with annual turnover of up to Rs 1 crore. A 4 per cent excise duty rate should be chargeable from those with turnover exceeding Rs 1 crore and up to the level of Rs 3 crore per annum. For those SSI units with an annual turnover exceeding Rs 3 crore and within the limit of Rs 5 crore per annum, excise duty should be within restricted duty slab of 8 per cent per annum while excise slabs of 16 per cent per annum has been suggested for industries with turnover exceeding Rs 5 crore per annum. Mr Agarwal said that if the suggested duty structure for the SSI sector was implemented, SSI units would turn out to be more competitive to upgrade their manufacturing units.
— UNI
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HPMC to launch wine, cider in tetrapacks
Shimla, November 9 The wine would be launched before the end of next month. The two drinks would be marketed in tetrapacks. HPMC Managing Director C.R.B. Lalit said here today the wine and cider from apple, plum, peer and other fruits would be marketed under the brand names “Kalpa wine” and “Kalpa cider”. The launch would initially be in different parts of the country and the wine would later be exported to other countries. Inquiries had already been received from Brazil, Malaysia and other South-East countries in this connection. It was for the first time in the country that a fruit drink was being launched with a permissible alcohol content. Wine would have 11.75 per cent of alcohol and cider 7.75 per cent of it. The wine would be available only in 200 ml packing.
— UNI
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IFC may bag stake in Federal Bank
Mumbai, November 9 According to a press note issued by the IFC here today, talks were on between ICICI Bank and IFC on acquiring ICICI Bank’s stake. IFC will buy a part or the entire stake of ICICI Bank in Federal Bank, depending upon ICICI Bank board’s decision. The Reserve Bank of India’s (RBI) regulations require ICICI Bank to lower its stake in Federal Bank to 5 per cent. IFC is also keen on acquiring equity stakes in other Indian private sector banks to enable them to meet capital requirements for Basel-II.
— UNI
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Rel Info to host CDMA summit
Navi Mumbai, November 9 Over 100 high-ranking officials from 25 CDMA operators around the world will participate in the summit. The event will have participants from 12 countries, including China, South Korea, United States and Japan. China Unicom of China, SK Telecom of South Korea, Verizon and Sprint of US, Telus Mobility of Canada, Vivo of Brazil and KDDI of Japan will be representing at the summit. Reliance Infocomm Group President Bhagwan D. Khurana said CDMA is today one of the world’s fastest growing wireless technologies, with more than 270 million users in 70 countries and six continents.
— UNI
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