The Tribune, Chandigarh, India

	Borrowing norms eased for states Tribune News Service New Delhi, August 20 The Central government today gave its approval for further relaxation in the Debt Consolidation and Relief Facility (DCRF) guidelines for the states. The decision, taken at the meeting of the Union Cabinet here chaired by Prime Minister Manmohan Singh, would enable the states to borrow up to 4 per cent of their respective Gross State Domestic Product (GSDP) during the 2009-10 fiscal. The states will not lose the benefits of DCRF, provided they are in compliance with this modified fiscal deficit target. The Finance Ministry would write to the 13th Finance Commission to make appropriate adjustments. The ministry has been fixing the annual borrowing ceilings for states largely in accordance with the fiscal deficit targets recommended by the 12th Finance Commission and accepted by the government. However, in response to the current economic slowdown, the target of 3 per cent fiscal deficit for 2008-09 had been relaxed to 3.5 per cent. Subsequently, it was decided to extend the relaxation in the fiscal deficit target of the states for 2009-10, in order to spur the development of infrastructure and generating employment. In his budget speech of July 6, Finance Minister Pranab Mukherjee had stated that against the backdrop of limited fiscal space because of reduction of CENVAT and service tax rates, government had substantially hiked the Gross Budgetary Support for Annual Plan 2009-10. Bulk of this increased support is to be directed towards public investment infrastructure. The state governments will be permitted to borrow an additional 0.5 per cent of their GSDP. This dispensation would allow the states to borrow over Rs 21,000 crore additionally in 2009-10. Apart from this, the Union Cabinet meeting today approved the conversion of Hindustan Prefab Limited’s outstanding loan and interest thereon as amounting to Rs 128 crore into equity, thereby, increasing its authorised capital from the existing Rs 10 crore to Rs 138 crore. With this approval, the accumulated losses will be set off against equity, and the company is expected to emerge as a viable and a profit-making central public sector enterprise in the coming years. The cabinet also approved the proposal to amend the National Institutes of Technology Act 2007. The amendments would declare the institutes as that of national importance and enable them to award degrees. An approval to enhance the equity share capital of Telecommunications Consultants India Limited in its joint venture company — Tamil Nadu Telecommunications Ltd, from Rs 695.10 lakh to Rs 2238.37 lakh, was also given by the cabinet.
	SBI in expansion mode; to hire 11,000 Tribune News Service Hyderabad, August 20 The country’s largest lender, State Bank of India, is on an expansion mode and is planning to hire 11,000 people during the current financial year. The bank also has plans to open 1,000 branches this year, its chairman OP Bhatt said today. “We have witnessed a lot of growth in every business segment. The contribution of the overseas operations to the bank's balance sheet had increased to over 12 per cent,” Bhatt told reporters on the sidelines of the Global Organisational Development Summit 2009 being held at the Indian School of Business (ISB) here. SBI's credit offtake had picked up from the end of July and the bank was expecting to achieve its targeted year-on-year growth rate of 25 per cent in the current year, he said. However, the existing drought situation could have some adverse impact on credit offtake, the chairman said adding that it was too early to give an estimate in this regard. Bhatt said there was no similarity between housing finance scenario in India and what had led to the sub-prime crisis in the United States, even though all major banks were aggressively pushing the home loan segment at present. The products and the institutions in India and the US were different. Home loans were given in America on the asset value while they were given in India based on the person's income and his ability to repay. "Except for reducing the interest rate, we have not relaxed any conditions for giving home loans", he said. Stating that there was a traction in the home loan segment following reduction in the interest rates, Bhatt said "SBI is now the largest home loan provider. We have surpassed ICICI and HDFC." Replying to a question, he said SBI was awaiting further communication from Reserve Bank of India and the Union government regarding the merger of State Bank of Indore with it. Pointing out that current and savings accounts (CASA) contributed 38 per cent of the SBI revenues, he said that bank's CASA registered a growth rate of 23 per cent as against the industry average of 19 per cent.
	No surrender charge from 5th policy year: IRDA New Delhi, August 20 Insurance regulator IRDA today asked life insurers not to levy any charge on customers if they surrender their policies from fifth year. "No surrender charge can be levied by an insurer for policies surrendered from the fifth policy year and thereafter the policyholder will be entitled to receive the full fund value on such surrender," the Insurance Regulatory and Development Authority (IRDA) said in a circular to all life insurers. Moreover, IRDA gave some breather to insurers by excluding the charges levied by these firms on their customers for incidents like death and disability from overall limit on charges on their ULIP schemes, the products that are invested in the capital markets. "Mortality and morbidity charges may be excluded in the calculation of the net yield," IRDA said. Mortality is the probability of death, while morbidity is the probability of disability. The insurance companies levy mortality and morbidity charges on the customers and these charges increase with the age of the policyholders. "It will positively impact customers benefits. The exclusion of mortality and morbidity charges from the cap will ensure that there is no compromise on growth in sales of valuable life cover," Max New York Life Insurance director and chief marketing officer Debashis Sarkar said. Last month, IRDA put a cap on overall charges that life insurance companies can levy on subscribers of their Unit Linked Insurance Policies (ULIPS). For those products which have maturity of 10 years, insurance companies have to maintain the difference between gross yields and net yields at 300 basis points. When various charges levied by insurers are added on to net yield, it becomes gross yield. "The difference between gross yield and net yield cannot exceed more than 300 basis points," IRDA had said. IRDA further said that fund management charges should not exceed 135 basis points irrespective of the tenor of the contract. There were demand by the life insurance industry to exclude mortality and morbidity charges out of the cap. IRDA said that certain concerns were expressed by the industry on the circular issued last month and meeting of the life insurers with IRDA took place on July 29 to discuss all these issues. — PTI
	Airtel, MTN extend merger talks Tribune News Service New Delhi, August 20 The country’s largest telecom player, Bharti Airtel, and South African telecom giant MTN today announced that they were further extending the period of their exclusive talks for the merger of the two companies. With the first extension time for the merger talks expiring on August 31, Bharti Airtel today issued a statement that said both parties had agreed to extend the exclusivity period for talks till September 30. The two companies had started talks regarding the merger on May 25 last. The statement said no decision to acquire any shares or implement the potential transaction outlined above had yet been made by the Boards of either Bharti Airtel or MTN. Both companies have been in talks over a $23 billion equity swap deal, which would create the third-largest wireless group entity globally, over the past few months. With the extension of talks and due diligence underway, the deal, if any, is expected to be closed not before mid-October. The deal, if finalized, will result in Bharti Airtel getting a 49 per cent stake in MTN and the South African telco a 36 per cent “economic interest” in Bharti Airtel.
	Govt to have one stand on gas row: Moily Tribune News Service New Delhi, August 20 In the midst of controversy over gas pricing, the government today said it would strive for identical stand on litigation between power PSU NTPC and Mukesh Ambani-led RIL, and that between the group firms of the two Ambani brothers. “We will try to see that the government is one on NTPC-RIL and RIL-RNRL issues,” Law Minister Veerappa Moily told reporters emerging from the meeting of group on ministers on the gas issue. “He (Petroleum Minister Murli Deora) will issue a statement tomorrow,” Moily said after an hour and a half-long meeting of the group convened by Finance Minister Pranab Mukherjee. The group was constituted to supervise the government’s stand on the gas litigation between the Ambani brothers’ group firms and that involving state power utility NTPC and RIL. “We have not decided anything... Everything will be presented in the court,” Moily said. The group had met yesterday also, but the meeting had remained inconclusive. While NTPC is fighting to get gas from RIL at a committed price of $2.34 per mmBtu, Anil Ambani group firm RNRL has dragged Reliance Industries for obtaining gas at the same price under a family settlement reached in 2005.
	ADAG blames OilMin for poor investment in oil, gas Tribune News Service New Delhi, August 20 Continuing its attack on Petroleum Ministry, Anil Ambani group today criticised it for its failure to attract top global players for oil and gas exploration and production due to lack of sanctity attached to concluded contracts. "Not even one of the top five international oil majors participated in National Exploration and Licensing Policy rounds (bids) in the past three years... top private foreign players such as Exxon, Shell, Chevron, Statoil, Conoco Phillips have never participated in a single NELP round," Reliance Power CEO J P Chalsani said in a statement. Stating that NELP rounds over the last three years revealed the absolute failure of Petroleum Ministry to attract any global capital flows, he said this was also due to "clear and visible partnership in favour of domestic players like RIL." Another Anil Ambani group firm Reliance Natural Resources Ltd is engaged in a bitter battle with Mukesh Ambani-led RIL over supply of gas at a committed price and the matter is scheduled to come up for hearing before the Supreme Court on September 1. Criticising Director General of Hydrocarbons for alleging that the ongoing RIL-RNRL battle would have a negative impact on global investment flow in India's oil and gas sector, Chalsani said the failure was due to the absence of well-defined, transparent and consistent policy regime of the Petroleum Ministry.
	Dyeing units call off strike Shivani Bhakoo Tribune News Service Ludhiana, August 20 The Punjab government has succeeded in brokering peace with the dyeing and textile industry of this city which is in the dock for causing pollution in the "buddha nullah" by taking the authority to regulate it from the Punjab Pollution Control Board (PPCB) and giving it to the Central Pollution Control Board (CPCB). This was done at a meeting between representatives of Dyeing Associations with Chief Minister Parkash Singh Badal in Chandigarh today. The Association immediately called of its indefinite strike. The entire dyeing industry in city had gone on indefinite strike on August 16 after the PPCB ordered snapping of power connections of 17 units four days back. According to sources, industry members complained that the PPCB had not handled the entire issue appropriately. The CPCB has agreed to send two personnel immediately to study discharge of effluents from the dyeing units. Giving details of the meeting, Tajpur Dyeing Association president Ashok Makkar said the CM had agreed to install a Common Treatment Plant (CTP) for the industrialists in the city within a year and a half. He said they had been assured that the CPCB would take samples from the units till the CTP was not installed. Makkar claimed Badal had also assured that electricity connections of all 17 dyeing units which had been disconnected earlier on the orders of the PPCB, would be restored at the earliest.
	Acer to launch fastest PDA phone Tribune News Service Chandigarh, August 20 An emerging cell phone maker company, Acer Inc., will be launching the world ‘s fastest PDA mobile phone in September. The cell phone, armed with a Snapdragon processor, will have a speed of 1 GHz. This was revealed by the country manager, Acer Smart Handheld Business Group, Richard Tan, while talking to mediapersons here today. “We will launch two other next generation mobile phones in India by September. This will include a handset aimed at the mass market and in the price range of Rs 10,000. It will be the first time that a smart phone at such a reasonable price is be available in the market,” he said. Tan said they already had a portfolio of five smart phones. “The data phone (smart phone) market is just 1.5 per cent of the total mobile phone market in India. We are trying to focus on this market and hope to get a 10 per cent market share in this category by the end of this fiscal,” he said, adding that they are also looking at tying up with telecom operators to offer their handsets as packages. Tan said the company was in the process of expanding its market in India and hoped to retail in at least 18 top cities by the end of this year. “We have launched our product range in Chandigarh and would cover Ludhiana, Ahemdabad, Surat, Baroda, Guwahati and Cochin by September this year,” he added.
	Punjab creates land bank for IT sector Tribune News Service Chandigarh, August 20 The Punjab government has created a land bank for Information Technology (IT) units in the state. Principal secretary industries, Punjab, SS Channy today said over 400 acres of land in Kapurthala and Ropar had been set aside for the setting up of IT units. “Other than this land bank, we have identified certain chunks of government land across the state where the IT units can set up their base,” he said. State industries and commerce minister Manoranjan Kalia said Punjab was inviting top-notch IT companies to the state so that they could see its potentiality. Both were speaking to mediapersons following the release of a book, ‘Doing Business in Punjab- An IT Investor’s Guide’, at a function held here today. Published by Punjab Infotech, the guide is designed to promote the state as an IT investment destination. Kalia informed that to enable IT entrepreneurs establish and operate their business in the state, a ‘single window’ service has also been started by Punjab Infotech.
	14.38 m wireless users added in July New Delhi, August 20 A whopping 14.38 million wireless subscribers were added by mobile operators in July this year, taking the total wireless user base to 441.66 million in the country. According to data released by telecom regulator TRAI, about 14.25 million telephone connections, including wireline and wireless, have been added during the month compared to 11.91 million connections added in June 2008. A total of 12.03 million wireless subscribers were added in June. With this, the overall tele-density in India has reached 41.08 against 39.86 in June 2009, it added. While the total wireless -- GSM, CDMA and WLL(F)-- subscriber base stood at 441.66 million in July, the wireline connections declined by 0.13 million to 37.41 million during the month. The broadband subscriber base reached the 6.80 million million mark. India's mobile user base rose 25 times in the last five years and research firm Gartner expects it to touch 737 million by 2012. With call rates as low as US 1 cent a minute and network expansion by operators have pushed the pace of growth in India's mobile subscriber base, which is increasing by more than eight million a month. — PTI
	India Inc optimistic on recovery by 2010: KPMG New Delhi, August 20 Most of the Indian corporates are hopeful that the economy would revive by 2010 and are lining up fresh investments either for this year or the next, a survey by global financial consultancy firm KPMG has said. About 70 per cent of the respondents according to the survey expect recovery by 2010, India seems to be more optimistic than the average, a survey titled 'Global business reactions to recession and strategies for recovery' carried out by the firm said. While, nearly 50 per cent of those surveyed plan to make new investments either this year or next year, it added. Infact, eight per cent of the respondents also feel that they were not impacted by the global recession at all. — PTI
	Australia inks LNG deal with India Tribune News Service New Delhi, August 20 Australia has won its first long-term liquefied natural gas (LNG) supply deal with India, with India's Petronet LNG signing a 20-year agreement to take gas from the massive Gorgon project. Gorgon joint venture partner Exxon Mobil Corp and Petronet, India's largest LNG importer, signed the deal in Perth last week. Under the sales and purchase agreement, Exxon Mobil will supply about 1.5 million tonnes per annum of its share of LNG from the proposed Gorgon LNG project over 20 years. The gas will be delivered to Petronet's new LNG terminal under construction at Kochi, an Exxon Mobil statement said. Exxon Mobil vice-president Australia LNG Luke Musgrave welcomed Petronet as a foundation customer for the Gorgon project. "This historic agreement is the first long-term sale of LNG from Australia to India," he said.
	AI mulls cut in incentives for staff Mumbai, August 20 The management of cash-strapped Air India has suggested an up to 50 per cent cut from next month in productivity-linked incentive given to employees. "Air India's Chairman and Managing Director Arvind Jadhav has suggested a 30-50 per cent cut in employees PLI from next month," Bharatkumar Raut, President of Shiv Sena-backed All India Cabin Crew Association (AICCA) told reporters here after a meeting with the NACIL management. NACIL is the holding company of both Air India and the erstwhile Indian Airlines. Many employee unions with allegiance to Shiv Sena are, however, opposing the proposal. They include AICCA, Executive Cabin Crew Association, Air India Employees Union, Engineers Association and Bharatiya Kamgar Sena of Indian Airlines. The unions would meet on August 25 to deliberate on the issue. — PTI
	HDFC to raise Rs 4,301 crore Mumbai, August 20 HDFC today announced that it would raise Rs 4,301 crore through issue of non-convertible debentures to qualified institutional buyers. "This is first-of-its-kind Qualified Institutional Placement (QIP) issue as we are offering a combination of debt and warrants," HDFC's Vice-Chairman and Managing Director Keki Mistry told reporters here. "The issue has a size of Rs 4,301 crore and is targeted at domestic investors, including banks, insurance and mutual funds, as we still do not have FIPB approval," Mistry said. — PTI