B U S I N E S S

Experts see inflation below 2 pc by March
New Delhi, December 25
Inflation might dip below the two per cent level by the end of the current fiscal due to slackening demand and sharp decline in commodity and manufactured goods prices, say economists.

MPs for further cut in fuel prices
New Delhi, December 25
A Parliamentary committee has said that the recent reduction in prices of petrol and diesel was not enough and that more needed to be done keeping in view a reducing trend in crude oil prices in the international market.

RPL commissions Jamnagar refinery
New Delhi, December 25
Reliance Petroleum today announced commissioning of its only-for-exports oil refinery in a special economic zone at Jamnagar in Gujarat.

Unitech lays off 10 pc staff
New Delhi, December 25
The country's second largest realty firm, Unitech, has reduced its workforce by about 10 per cent, out of a total of 1,700 employees, as part of its cost-cutting measures on the back of a credit crunch faced by the company.

This file photo shows Japanese video game giant Nintendo's game character Super Mario standing at a showroom in Tokyo. Nintendo Co. said on Thursday it would start offering videos through its blockbuster Wii game console, the latest new feature for the Japanese entertainment giant. — AFP

Satyam seeks apology from World Bank
New Delhi, December 25
Days after the World Bank announced that it has debarred for eight years Satyam Computer Services from any business with it, the IT major today demanded an apology from the Bretton Woods-twin for making "inappropriate" statements.

PE investments dip 80% in Oct-Nov
Mumbai, December 25
Private equity (PE) investments have declined by as much as 80 per cent in the first two months of December quarter with the ongoing credit crunch casting its shadow on the investment space of the country.

LICHF’s reverse mortgage scheme soon
Mumbai, December 25
State-run home finance company LIC Housing Finance is awaiting the National Housing Bank's tie-up with insurance companies before launching its reverse mortgage scheme for senior citizens.

Dish TV to add 200 channels
New Delhi: With DTH platform gaining momentum in the country, Essel group company Dish TV is planning to add another 200 channels by next year to its bouquet to maintain its lead in the space. "We have the largest content pipe. We carry about 225 plus channels (now). Going forward, within a year's time, we will increase it to 400-450," Dish TV chief operating officer Salil Kapoor said. — PTI

Experts see inflation below 2 pc by March

New Delhi, December 25
Inflation might dip below the two per cent level by the end of the current fiscal due to slackening demand and sharp decline in commodity and manufactured goods prices, say economists.

"I expect inflation to drop sharply to below 2 per cent by March due to the sharp decline in manufactured goods prices and commodity prices ," HDFC Bank chief economist Abheek Barua said.

The inflation dropped significantly for the sixth consecutive week to 6.84 per cent for the week ended December 6, the lowest in nine months, after rising close to 13 per cent in the month of August.

Barua expects it to further decline to 6.48 per cent for the week ended December 13 and sees more rate cuts by the RBI before its January policy. "I expect a 100 basis point cut in the repo and reverse repo rates," he added.

Axis Bank economist Saugata Bhattacharya also believe that due to the falling demand, except that of primary articles, inflation might drop to 2 per cent by the end of fiscal year 2008-09.

Echoing a similar view, Crisil principal economist D.K. Joshi said, "By March, I expect the rate of inflation may come down to 2-3 per cent due to the slackening demand and the base effect." He added that the sharp decline of commodity prices is leading to the fall of manufactured good prices.

In addition to the fall in commodity prices, the decision of the government to reduce prices of petrol and diesel by Rs 5 per litre and Rs 2 per litre, respectively, and the December 7 stimulus package, that envisages 4 per cent cut in excise duty, will have a cascading effect on prices in the coming months.

Crisil's economist Joshi said the central bank can take more monetary easing measures in the coming days and slash interest rates further.

"I expect the RBI's policy to remain aggressive. It might go for further rate cuts," Joshi added.

RBI has taken a host of measures releasing as much as Rs 3,00,000 crore to fuel growth and with the inflation coming down further, it might take more steps to boost industrial output.

Indicating that the RBI could take more steps to ease liquidity and trigger further softening of interest rates, the Mid-Year Review of the economy tabled by government in Parliament recently said "there is considerable scope for monetary policy easing over the next six to 12 months." Chief conomic adviser Arvind Virmani also said the inflation was under control and would come to an acceptable level of 5 per cent by the end of the fiscal.

Prime Minister's Economic Advisory Council chairman Suresh D Tendulkar expects inflation between 4 and 5 per cent by March and sees 100 basis points cut in short-term lending (repo) and short-term borrowing rates by the Reserve Bank.

"Inflation has started declining. I see it (inflation) between 4 and 5 per cent by March, may be even before that...it is desirable to cut repo, reverse repo by 100 basis points," he said.

On December 17, however, the Reserve Bank said India's inflation 'continues to be above the acceptable level' and the global financial crisis has become more 'widespread' in the domestic economy despite global markets showing signs of recovery.— PTI

MPs for further cut in fuel prices
Vibha Sharma
Tribune News Service

New Delhi, December 25
A Parliamentary committee has said that the recent reduction in prices of petrol and diesel was not enough and that more needed to be done keeping in view a reducing trend in crude oil prices in the international market.

The Standing Committee on food, consumer affairs and public distribution, headed by Lok Sabha MP Devendra Prasad Yadav, has recommended that the effect of reduction in price of crude oil should percolate down to consumers and prices of four major petroleum products — petrol, diesel, kerosene and LPG — reduced in proportion to the reduction in price of crude oil in the international market.

“Public sector oil marketing companies (can) be compensated whenever there is an increase in the price of crude oil so as to offset the losses to be suffered by oil companies,” the committee said.

While prices of crude old in the international market came down substantially from $147 per barrel to around less than $40 per barrel, the committee said complete benefit of this decrease did not percolate down to domestic consumers.

The government recently reduced the prices of petrol and diesel in the domestic market by Rs 5 per litre and Rs 2 per litre, respectively, while price of LPG remained unchanged.

Called this “minimal reduction” in prices of petrol and diesel as not enough, the committee said more needed to be done keeping in view the fact that prices of crude oil in international market was continuing with reducing trend.

The huge under-recoveries of the oil companies has been stated to be the main reason for not decreasing the price in domestic market despite decrease in price of crude oil in international market. Under-recoveries of oil companies are estimated to be around Rs 1,24,000 crore on completion of the whole year.

The substantial devaluation of the Indian currency compared to dollar is another reason attributed for not decreasing the prices of petroleum products in domestic market.

RPL commissions Jamnagar refinery

New Delhi, December 25
Reliance Petroleum today announced commissioning of its only-for-exports oil refinery in a special economic zone at Jamnagar in Gujarat.

The commissioning of the 580,000 barrels per day (29 million tons a year) capacity refinery by RPL, a unit of Mukesh Ambani-run Reliance Industries, will make Jamnagar the biggest oil refining hub in the world.

"RPL commenced its crude processing (today). The secondary processing units are now under synchronization and commissioning," a company press statement said.

"The entire refinery complex is expected to attain full capacity shortly," it said but did not give a specific date.

The new unit has come up adjacent to Reliance's existing 660,000 bpd (33 million tons a year) mostly-for-exports refinery at Jamnagar.

"RPL refinery has been completed in 36 months from concept to commissioning, which is a new benchmark for building a grass-root refinery of this scale and complexity," the statement said.

Company's chairman Mukesh Ambani said: "Commissioning this large and complex refinery in record time... yet again demonstrates the strength of our project management skills." "We, at Reliance, continue to be committed to the long-term potential of the refining sector. We will leverage our competitive advantages of scale, complexity and capability to process a wide range of crude oils and flexibility to produce high quality transportation fuels," he said.

RPL, in which the US energy major Chevron Corp holds 5 per cent stake, will produce petrol and diesel complaint to Euro-IV emission norms. — PTI

Unitech lays off 10 pc staff

New Delhi, December 25
The country's second largest realty firm, Unitech, has reduced its workforce by about 10 per cent, out of a total of 1,700 employees, as part of its cost-cutting measures on the back of a credit crunch faced by the company.

Besides downsizing employees strength over the past 4-5 months, the company is also not filling up vacancies, which were left empty in the process of normal attrition.

"Our normal attrition is there. Naturally we are not looking for replacements... and we have let go trainees in over a period of 4-5 months," Unitech chairman Ramesh Chandra told PTI.

The company's current rate of attrition is about 15-20 per cent per annum, he added.

Asked about the number of people that the company has fired, he said: "It is to the extent of 10 per cent of total workforce and total is about 1,700 people." He, however, said the company has not cut salaries of its employees yet.

Besides, Unitech has also shifted some employees to its newly formed telecom venture from the real estate business. — PTI

Satyam seeks apology from World Bank

New Delhi, December 25
Days after the World Bank announced that it has debarred for eight years Satyam Computer Services from any business with it, the IT major today demanded an apology from the Bretton Woods-twin for making "inappropriate" statements.

Demanding that the World Bank should immediately withdraw its statements, Satyam Computer wanted "it (World Bank) issue a new statement apologising to Satyam for the harm done to the company due to the bank's actions and that it provide Satyam with a full explanation of the circumstances related to the Bank's inappropriate statements."

Satyam Computers, which has courted controversy for its decision to buy Maytas Properties and Maytas Infra and then giving up the idea, said it would evaluate all options in view of both the bank's "inappropriate" public statements and its response to the IT firm's requests.

The World Bank on Monday said it has declared Satyam Computer ineligible for eight years to receive direct contract under corporate procurement programme due to IT major's failure to furnish proper documentation on fees charged for sub-contractors and for providing improper benefits to the bank staff.

"Satyam was declared ineligible for contracts for providing improper benefits to bank staff and for failing to maintain documentation to support fees charges for its sub-contractors," the World Bank said in a statement today.

The bank's decision was effective from September this year and prior to that Satyam was temporarily suspended in February.

The statement by Satyam, however, did not clarify whether the charges made by the World Bank were correct, nor did it talk about contesting the ban.

Meanwhile, independent director on Satyam's Board T R Prasad has told PTI that "it (World Bank's recent remarks) will definitely come up for discussion in the next board meeting".

A day after the bank statement came Satyam shares took a major beating in the stock market. The issues are likely to be raised in the Board meeting on December 29. — PTI 

PE investments dip 80% in Oct-Nov

Mumbai, December 25
Private equity (PE) investments have declined by as much as 80 per cent in the first two months of December quarter with the ongoing credit crunch casting its shadow on the investment space of the country.

The private equity investment in 41 companies during the October-November period stood at $969.22 million, a whopping 80 per cent plunge over the same period last year.

In the last year, there were as many as 71 deals during the corresponding period attracting an investment of $4,753.98 million, as per data compiled by Nexgen Capital, the merchant-banking arm of brokerage firm SMC Global.

"With FII selling offsetting the investment this year and slowdown in the global economy there is a lack of clarity about the entire economic scenario. Hence, PE funds are adopting a wait-and-watch approach before investing," Venture Intelligence Founder and CEO Arun Natarajan said. — PTI

LICHF’s reverse mortgage scheme soon

Mumbai, December 25
State-run home finance company LIC Housing Finance is awaiting the National Housing Bank's tie-up with insurance companies before launching its reverse mortgage scheme for senior citizens.

"We have the product but we are waiting for certain clarifications on tax issues and the insurance tie-up. The taxation issue has been cleared and once the insurance tie-up is done, we will launch the product," LIC Housing Finance director and chief executive R.R. Nair said.

The National Housing Bank (NHB) is tying up with insurance companies, including LIC, for restructuring of reverse mortgage.

Reverse mortgage is a financial product that enables senior citizens who own a house to mortgage their property with a lender and convert a part of the home equity into tax-free income without having to sell the house. — PTI