New Delhi, September 15
An Empowered Group of Ministers (EGoM), headed by Finance Minister Pranab Mukherjee, is tomorrow likely to consider limiting supply of subsidised Liquified Petroleum Gas (LPG) cylinders to 4-6 per household in a year.

“The EGoM meeting is scheduled for tomorrow afternoon,” an oil ministry official said.

To limit government’s fuel subsidy bill, the EGoM is likely to consider giving every household only 4-6 LPG cylinders at subsidised price of Rs 395.35 in Delhi and asking them to pay market price of Rs 666 per bottle for any requirement beyond that.

This is likely to save the government about Rs 20,000 crore in subsidy outgo annually. The limited supply of subsidised LPG would be for those who own a car, two-wheeler, house or figure in the income-tax list, the official said.

Each 14.2-kg bottle of LPG normally lasts a household 45-60 days and based on this calculation a maximum of six cylinders are considered enough to see a family through the year. At present, records of LPG distributors of public sector companies shows that a vast number of households are taking as many as 20 to 30 cylinders per household each year.

This suggests that large scale diversion of subsidised cooking gas is taking place for use in commercial establishments, such as restaurants and dhabas and as auto fuel.

LPG for commercial use is sold at the market price and packed in different cylinders.

Sources said limiting supply of subsidised LPG cylinders would help cut down losses that state-owned oil firms incur now on selling the fuel at government controlled rates.

The EGoM may also consider the revenue loss that state firms incur on selling not just LPG but also diesel and kerosene.

The three firms lose Rs 5.14 a litre on diesel and Rs 24.42 per litre on kerosene. At current rate, they are projected to post a combined revenue loss of Rs 108,746 crore. The EGoM may decide on how this loss would be bridged.

The government currently bears half the revenue loss and another one-third comes from upstream firms like ONGC. The panel may decide if the current revenue loss sharing formula should continue or be altered. — PTI

New Delhi, September 15
A decision on much-awaited National Manufacturing Policy (NMP) was deferred today in the wake of strong opposition from environment and labour ministries on the proposals for relaxing the green and labour laws in the proposed mega-industrial enclaves.

No consensus could emerge at the meeting of the Union Cabinet on the draft NMP, being pushed by the Commerce and Industry Ministry for giving a boost to the manufacturing sector by providing special dispensation to the enclaves.

"There was a discussion...some ministers had queries and the minister concerned (Commerce and Industry Minister Anand Sharma) answered them... Labour Minister (Mallikarjun Kharge) is abroad," Information and Broadcasting Minister Ambika Soni said .

She said the issue would be brought up before the Cabinet "at the earliest".

Soni said Kharge has expressed his desire to give his suggestions. He has already written a letter to Prime Minister Manmohan Singh expressing his reservation on the policy, sources said.

Environment Minister Jayanthi Natrajan too had strong reservations against the policy, they said.

The Prime Minister has asked Sharma to "individually meet ministers concerned (labour and environment) again and build consensus", they said.

The proposal for giving a boost to the manufacturing by way strengthening Delhi-Mumbai Industrial Corridor Development Corporation (DMICDC) was approved the Cabinet. — PTI

New Delhi, September 15
Health insurance portability service, which would allow policy holders to switch insurers, is all set to be implemented from October 1, Insurance Regulatory and Development Authority (IRDA) said today.

The scheme was proposed to come into force from July 1 earlier, but was deferred for three months due to certain outstanding issues with insurance companies.

“We are ready to implement the health portability plan from October 1, 2011,” Chairman J Hari Narayan said here on the sidelines of aConfederation of Indian Industry (CII) meet here.

Health portability will allow consumers to change their service provider without loosing the basic coverage of health insurance. As per portability rules, consumers will get credit for the time already spent for covering the pre-existing disease along with bonus accrued to him from his past insurer.

On the highest net asset value (NAV) guaranteed products, which are seen as a "risk products", Narayan said IRDA was planning to come up with regulations for it.

"The concern, which I have as regulator is the communication mechanism for highest NAV product that might lead to misconception of the buyer. Therefore, it is a risky product. We are getting details about the matter and we will take a regulatory decision soon," he said without giving a timeline by when the rules would be out.

The highest NAV guaranteed products give consumers a guaranteed return based on the highest NAV that the policy has achieved during the entire term of the insurance plan.

At present, around 20 per cent of the total Unit-Linked Pension Plans (ULIP) comprise sales from highest NAV products.

Referring to the IPO guidelines for life insurance companies, Narayan said the guidelines are almost final. "IPO guidelines are ready as far as IRDA is concerned. However, there are two more nuts that have to be tied-up.

First is the requirement of comments from SEBI, which will come up in a day or two. Second is about a particular matrix for calculation of embedded value (of the company) that will be prescribed by Institute of Actuaries of India," he added.— PTI

Mumbai, September 15
Allaying fears of any serious slowdown in the growth momentum, advance tax collections from top 100 corporates from the nation's financial capital saw 18 per cent jump in the quarter to September.

Mukesh Ambani-led Reliance Industries, which is reported to have paid Rs 2,000 crore for the second quarter, leads the list of advance tax payees.

Besides, steel, software exporters and private banks have also paid higher advance tax for the quarter, according to the sources at the Income Tax Department here.

The list of laggards is topped by State Bank of India amidst slowing credit growth, which is said to have paid less this quarter at Rs 1,700 crore against Rs 1,900 crore in the year-ago period, followed by the oil marketing firms which are bleeding due to rising under-recoveries.

Hindustan Petroleum's advance tax payment came down by a third over the last year to a paltry Rs 30 crore for the September quarter, while its PSU peer Bharat Petroleum saw its tax outgo halving to Rs 100 crore.

Recent macro data like the factory output growth, which fell to a two-year low at 3.3 per cent in August, and repeated comments from India Inc about the difficulties in doing business on the back of high lending rates and a grim global situation, have led to fears about poor financial performances of corporates in the current quarter.

Advance tax payout is a barometer of a company's performance.

RIL, which sold 30 per cent interest in the KG Basin fields to British Petroleum recently, is likely to have paid an advance tax of Rs 2,000 crore against Rs 1,200 crore in the year-ago period, the sources said. — PTI

Mumbai, September 15
The Reserve Bank of India (RBI) is widely seen delivering the last rate increase in its 18-month-long tightening cycle on Friday as inflation pressures continue to remain strong, a Reuters poll of 18 economists showed.

Of those polled, 15 expect a 25 basis point increase in the repo rate, one expects a 50 basis point hike, and two expect no change.

An increase would be the 12th in the current cycle and would take the repo rate, the central bank's key lending rate, to 8.25 per cent, where most economists see it staying until at least the end of the fiscal year. The median expectation for the rate at the end of March has been lowered by 25 basis points from the previous poll, largely due to deteriorating economic conditions.— Reuters

New Delhi, September 15
The Department of Telecommunications' (DoT's) move to issue show-cause notices to some telecom operators in the country might help it to garner resources.

If the licences are cancelled, it could free over 180 MHz of 2G Spectrum across the country, which when auctioned could fetch the government an astronomical amount. These airwaves are used for voice calling.

Reports suggest that even without an auction, these airwaves can fetch the exchequer over Rs 13,000 crore if they are dished out to incumbents at the administered price suggested by the Telecom Regulatory Authority of India (TRAI).

The move from DoT has come at the insistence of Telecom Minister Kapil Sibal. The minister's decision came after TRAI had turned down the telecom department's demand that it reconsider its November 2010 recommendations where it had suggested that government cancel all telecom licences of the operators, which had obtained licences illegally.

The department, which was earlier of the view that cancellation of licences could lead protracted legal battles, has now decided to go ahead with the showcause notice after taking legal opinion.

S Tel, which bagged licences for six circles, has also launched services while Swan (Etisalat DB), Datacom (Videocon) and Loop Telecom have only undertaken token rollouts to protect their permits and have minuscule customer base.

The DoT has decided to issue show-cause notices to nine companies for 85 of the 122 mobile permits awarded by former Telecom Minister A Raja.

London/Zurich, September 15
Swiss bank UBS said a trader had lost it around $2 billion in unauthorised deals, and police in London arrested 31-year old Kweku Adoboli in connection with the case. Adoboli — a director of exchange traded funds and ‘Delta 1’ working in the bank's London office, according to his profile on networking site LinkedIn — was arrested on suspicion of fraud, sources told Reuters.

“I can confirm that an employee of the bank was arrested in London in connection with the statement,” a UBS spokesman said.

UBS said it might post a third-quarter loss after the rogue trades, a huge blow as it struggles to rebuild its credibility after years of crises.

The loss effectively cancels out the $2 billion that the bank had hoped to save in a cost-cutting programme announced last month in which it will axe 3,500 jobs.

It also threatens the future of UBS's investment bank, which is being reviewed by chief executive Oswald Gruebel as part of a wide-ranging restructuring following heavy losses in the credit crisis and a damaging scandal over bankers helping rich US clients dodge taxes.

UBS, which said no client positions were affected, is scheduled to hold an investor day on Nov 17 at which it was expected to announce major restructuring of the investment bank. — Reuters

New Delhi, September 15
India has relaxed its overseas borrowing rules allowing firms to raise Chinese yuan-denominated debt and raised the borrowing limit for companies in an attempt to woo capital inflows amid heightened global uncertainty.

The move will help Indian firms, suffocated by high local interest rates, to raise cheaper debt. Rising cost of credit in the domestic market has impacted investment demand in Asia’s third-largest economy.

“For the first time, we are taking yuan as a currency. There will be a limit of $1 billion to begin with. It is within the $30 billion limit,” R Gopalan, Economic Affairs Secretary at the finance ministry, said on Thursday.

India currently allows overseas borrowing in US dollar, euro, Japanese yen and British pounds.

The decision to add yuan-denominated overseas debt is significant amid increasing significance for the Chinese currency and the development of a rapidly growing offshore yuan market in Hong Kong.

“Cost of borrowing is far less from China,” said another finance ministry official.

The government also raised the amount a corporate can raise without seeking the central bank's approval to $750 million from $500 million during a financial year.— Reuters

New Delhi, September 15
Indian IT giant Wipro and Swedish major Saab and have signed a ‘teaming agreement’ to jointly market an active protection system for land-based attack platforms of the Indian Armed forces.

The two companies will manufacture, deliver and market Saab’s entire suite of the land electronic defence systems (LEDS) in India.

This provides active protection to light and medium combat vehicles as well as to main battle tanks against incoming enemy fire from rocket propelled grenades, anti-tank missiles, mortars and artillery shells.

Saab will bring in its competence and technological knowhow while Wipro will support in aligning this to the Indian requirements.— TNS

New Delhi, September 15
Indian IT giant Wipro and Swedish major Saab and have signed a ‘teaming agreement’ to jointly market an active protection system for land-based attack platforms of the Indian Armed forces.

The two companies will manufacture, deliver and market Saab’s entire suite of the land electronic defence systems (LEDS) in India.

This provides active protection to light and medium combat vehicles as well as to main battle tanks against incoming enemy fire from rocket propelled grenades, anti-tank missiles, mortars and artillery shells.

Saab will bring in its competence and technological knowhow while Wipro will support in aligning this to the Indian requirements.— TNS

BRIEFLY

M&M to sell 8% stake in Holiday Subsidiary
New Delhi: Mahindra & Mahindra on Thursday said it will sell up to 8.09 per cent stake in its subsidiary firm Mahindra Holiday & Resorts India (MHRIL) in the next 16 months, which could be worth over Rs 225 crore. The company said the move is primarily to comply with the statutory requirement for listed companies to reach a minimum threshold of 25 per cent public shareholding.— PTI

Kwality Dairy plans to raise Rs 1,000 cr
New Delhi: Kwality Dairy today said it plans to raise up to Rs 1,000 crore to fund expansion, that includes increasing the processing capacity of its plant in Haryana. "We have chalked out an expansion plan and for that the company is raising the capital. We are planning to raise Rs 1,000 crore either through debt or equity route," Kwality Dairy ED Sidhant Gupta said.— PTI

Legacy to decide on NMDC offer by Sept 20
New Delhi: Australian exploration firm Legacy Iron Ore today said its board would decide next week on NMDC's offer to pick up 50 per cent stake in the company. "The Board of Legacy is currently reviewing the offer and will make an announcement to the market in due course, anticipated to be no later than September 20, regarding its recommendation," it said in a filing to the Australian Securities Exchange (ASX).— PTI

Anti-dumping duty on Chinese imports
New Delhi: India has imposed an anti-dumping duty of up to $0.26 per kg on imports of a hazardous chemical, used in manufacturing of pesticides and dyes, from China to protect the domestic industry. The duty, which has been imposed for five years, is in the range of $0.09-0.26 per kg of 'Para nitroaniline. The levy is imposed after the designated authority Directorate General of Anti-Dumping and Allied Duties (DGAD) had recommended the imposition of the duty.— PTI