New Delhi, January 12
It was a double whammy for the economy and the government with no end in sight to food inflation and to add to that the industrial growth numbers for November announced today slumped to 2.7 per cent.

Reacting to the numbers, Finance Minister Pranab Mukherjee said deceleration in industrial growth to 2.7 per cent in November and high inflation could have an adverse impact on the economy and said steps would be taken to grow factory output.

"If IIP goes down and inflation goes up, it will have an adverse impact, but I am not coming to any premature conclusion," Mukherjee told reporters here.

"We shall have to look into and take corrective measures so that IIP numbers revive in the remaining four months," he said.

New Delhi, January 12
Under scanner for loans to new telecom companies, the country’s largest lender State Bank of India today said all necessary procedures were followed while giving loans and asserted that there was no risk to the money.

Responding to a query on CBI probing the role of certain public sector banks, including SBI, for giving loans to new telecom operators, SBI Chairman OP Bhatt said,” ...we look at various procedures like tangible assets, collateral securities etc for not only telecom firms but in other sectors also.

“This we have been doing for so many years it is not a question of how much money we give, it is a question of whether that money is at risk or not,” he added. The CBI suspects that certain banks flouted norms to provide finance to companies, like Uninor and STel, which had received the 2G spectrum and licences in January 2008.

“So this we do as a banker ... and I don't think that anything which SBI has done in this case which justifies any apprehensions or doubts of any kind,” Bhatt added. The public sector banks were understood to have approved Rs 10,000 crore to Uninor (a joint venture between Unitech and Telenor of Norway) and Rs 1,538 crore to STel, on the basis of the licences issued to them by the DoT. The SBI had provided a loan of Rs 8,050 crore to the Uninor during 2009-2010.

The other banks which gave loan to Uninor were Corporation Bank, Allahabad Bank, South Indian Bank, Canara Bank, Oriental Bank, Central Bank of India, Punjab National Bank, Standard Chartered Bank and Yes Bank.

STel got a loan of Rs 1,538-crore from IDBI and IDBI Trusteeship Services Limited, in 2009. — PTI

New Delhi, January 12
Banks in the country have tied-up with telecom operators to provide mobile phone -based banking. State bank of India has tied-up with Bharti Airtel and ICICI Bank has entered into an agreement with Vodafone.

SBI officials said the new entity will harness the power of State Bank’s strengths and Airtel’s mobile telephony to add value to the banking and financial services sector and empower the financially excluded. SBI Chairman O P Bhatt said: “We look forward to taking the benefits of banking to the Indian masses and build a more inclusive society.”

ICICI and Vodafone said that under the tie-up, both entities will offer a bouquet of financial products such as savings accounts, pre-paid instruments and credit products through a mobile phone -based platform. Financial inclusion has been an important goal that aims to provide access to basic financial services to each and every individual across the country.

Sunil Bharti Mittal, CMD, Bharti Airtel, said, “This will be a complete game-changer, leveraging SBI’s exposure in the banking sector along with Airtel’s 150 million strong customer base and ecosystem of over 1.5 million retailers and distributors across India.” The new joint venture will engage Airtel’s retailers as customer service points (CSP) all over the country in a phased manner. Existing and new Airtel mobile customers will be able to visit these outlets and open new SBI bank accounts. Existing SBI customers will also be serviced at these outlets.

Chanda Kochhar, MD, ICICI Bank, said: “Mobile penetration is growing exponentially in the country. Rural market forms a major contributor. There is a huge potential for offering mobile banking in these regions, which will facilitate access to the financially excluded parts of the society and ensure that benefits from various welfare and growth programs of the government reach them along with other financial services and products. Vodafone, with its innovative and customer focus initiatives, is an ideal partner who will help in furthering the cause of financial inclusion in India.”

Marten Pieters, MD & CEO, Vodafone Essar, said: “The RBI move to allow for-profit companies to be Business Correspondents is a welcome move that will enable the population better access to financial services. We are uniquely positioned to aid the financial inclusion agenda of the Indian government and the RBI.”

New Delhi, January 12
Indian Sugar Mills Association (ISMA), the apex sugar industry body, today demanded the government immediately allow export of at least 5 lakh tonnes of sweetener to ensure that mills are able to pay sugarcane farmers.

On the government's recent decision to abolish import duty till March 2011, ISMA said it would have no impact as global prices are higher by Rs 5-6 per kg than the domestic rates.

"Government should at least allow export of 5 lakh tonnes of sugar to ensure that industry is able to pay cane price of Rs 210/quintal," ISMA Director-General Abinash Verma said.

He was replying to a query on the food ministry's decision to refer the issue of allowing export of 5 lakh tonnes under OGL to empowered group of ministers (EGoM) on food for review.

Verma noted that India would have a surplus production of 2.5 million tonnes in 2010-11 (October-September), out of which the government has allowed export of 1.2 million tonnes under Advance License Scheme (ALS).

"There is still surplus of 1.3 million tonnes of sugar which needs to be taken care of. Otherwise, mills would not be able to pay cane price to farmers as surplus sugar would bring down the domestic prices," he said.

Verma said inflation in sugar is also negative, so there should not be any problem in allowing exports. Sugar prices have come down to Rs 32-33 per kg from nearly Rs 50 per kg in January last year.

ISMA has pegged sugar production in 2010-11 sugar year at 25.5 million tonnes against the annual domestic demand of 23 million tonnes. The country had produced 18.8 million tonnes in the previous sugar year.

On imports, Verma said: "there will be no imports till March even at zero import duty as this is a peak production in India. Moreover, global prices are higher by Rs 5-6 per kg than domestic prices". — PTI

Chandigarh, January 12
If the high prices of onions are bringing tears to the eyes of common man, the hike in prices of steel are now threatening to halt the industrial growth. With the price of steel having gone up by almost Rs 7,000 per tonne in the past fortnight, hundreds of small and medium enterprises will be hit.

It is learnt that the price of steel ingot, HR (hot rolled) flats and MS (mild steel) rounds have all gone up by Rs 7,000 per tonne. While the primary steel producers have increased these rates by Rs 3,000 per tonne during the past month, the secondary steel producers have affected an additional hike of Rs 4,000 per tonne on steel products supplied to the industry. It is learnt that in various industrial towns of Punjab, price of steel ingot has now shot up to Rs 35,000 per tonne, of MS round to Rs 38,700 per tonne and of HR flats to Rs 40,000 per tonne.

While the long steel products are used in the construction sector, the flat products are used in automobiles and consumer durables, nut and bolts. “Thus the substantial hike in steel products is bound to have a cascading effect on the prices of automobiles and auto components, consumer durables and also increase the cost of construction. Even the SMEs will suffer huge losses as they work on very small profit margins. The main and secondary producers generally have huge stock piles and can withstand the prices. But we book our orders for only three to six months, based on the steel price at the tine of taking the order. This sudden jump in prices will hit us very hard,” said AL Aggarwal, president of Chandigarh Industrial Fasteners Association.

Sources in the steel industry informed TNS that over the past few months, there was a hike in price of raw materials for steel, mainly iron ore and coking coal. This hike in prices globally was felt by the primary steel producers, who have been forced to increase the prices of various steel products. They said the recent flooding of the coal mines in Australia would again have an impact on the coking coal prices internationally, and they could again be forced to affect another hike on the secondary steel producers.

“For secondary steel producers like us, the increase in prices of imported steel scrap, besides an increase in price of steel by the primary steel producers has forced us to increase prices of steel products,” said Amarjit Goyal, Chairman of Modern Steels. He added that in the past three months, steel scrap prices have gone up by almost $80 per tonne.