New Delhi, February 11
The government will pay Rs 25,000 crore additional cash subsidy to state-owned fuel retailers to make up for part of the revenue they lost on selling auto and cooking fuel below cost this fiscal.

The Finance Ministry on February 7 issued a "comfort letter" to Indian Oil Corp (IOC), Bharat Petroleum Corp (BPCL) and Hindustan Petroleum Corp (HPCL) sanctioning Rs 25,000 crore for part of the revenue they lost on selling diesel, domestic LPG and kerosene below cost, official sources said.

Previously, the government had released Rs 30,000 crore subsidy. With the latest sanction, it has met about 44 per cent of the Rs 124,854 crore revenue the three firms together lost on selling auto and cooking fuel below cost during the April-December period this fiscal.

Of the latest sanction, IOC would get Rs 13,474.56 crore, BPCL Rs 5,987.25 crore and HPCL Rs 5,538.19 crore.

Sources said the Finance Ministry has only issued a comfort letter which the oil companies will account as receivables to post decent third quarter earnings. Actual cash will flow only after Parliament approves supplementary demands for grants or additional spending.

IOC, BPCL and HPCL lost Rs 39,268 crore in revenue on selling diesel, LPG and kerosene at government-controlled rate in October-December quarter. Of this, about Rs 15,000 crore will be made good up upstream firms like Oil and Natural Gas Corp (ONGC) and Oil India Ltd.

Fuel retailers currently lose Rs 9.22 a litre on diesel, Rs 31.60 per litre on kerosene and Rs 481 on every 14.2-kg LPG cylinder.

They lose Rs 443 crore per day of sale of the three fuels.

The Finance Ministry pays cash subsidies to state oil retailers while state-run upstream companies - ONGC, OIL and GAIL India Ltd - sell crude oil and products like LPG products at a discount.

From the previous Rs 30,000 crore dole, IOC had got about Rs 16,100 crore, while HPCL and BPCL's was about Rs 6,670 crore, and Rs 7,200 crore, respectively, the sources added.

Upstream firms have till now paid Rs 45,000 crore in fuel subsidy. — PTI 

Mumbai, February 11
India's newest stock exchange, the MCX Stock Exchange (MCX-SX), today began trading in equities and equity derivatives. The exchange launched its 40-stock index named SX40 which will compete with BSE Sensex and NSE’s NIFTY.

According to a statement issued by MCX-SX, stocks included in the exchange have a free float of at least 10 per cent and a positive net worth. The stocks on the SX40 represent the economy's diverse sectors, the statement said. The base value of SX-40 would be 10,000 and its base date would be March 31, 2010.

Operations of the new exchange began with low volumes with the management insisting that MCX-SX was in no hurry to garner market share. It would not increase volumes by cutting prices, CEO Joseph Massey said at the launch last weekend.

“We have not set any volume level target. This is not a 100-metre race but a marathon,” Jignesh Shah, vice-chairman of MCX-SX added.

MCX-SX has already roped in 700 members out of which 405 have received approval from market regulator SEBI.

There are 1,116 companies currently listed on MCX-SX.

Mumbai, February 11
The foreign investments into Indian markets through 'Participatory Notes', a preferred route for overseas HNIs and hedge funds, stood at Rs 1.51 lakh crore (about $28 billion) at the end of 2012.

According to the latest data released by the SEBI, the cumulative value of P-Note investments in Indian markets (equity, debt and derivatives) was at Rs 1,51,084 crore at December-end.

At the end of 2011, investment by rich overseas entities in the Indian market through P-Notes stood at Rs 1.38 lakh crore.

P-Notes, mostly used by overseas HNIs (High Networth Individuals), hedge funds and other foreign institutions, allow them to invest in Indian markets through registered Foreign Institutional Investors (FIIs), while saving on time and costs associated with direct registrations.

Besides, value of P-Notes issued with derivatives as underlying, was at Rs 1.01 lakh crore at the end of 2012.

The quantum of FIIs investments through P-Notes, however, declined to 11.3 per cent in December from 13.7 per cent in the previous month.

Until a few years ago, the P-Notes used to account for more than 50 per cent of total FII investments, but their share has fallen after SEBI tightened its disclosure and other regulations for such investments.

According to market analysts, after a lull seen in the first half of 2012, overseas entities have come back to India on slew of policy reform initiatives taken by the government.

They said the postponement of General Anti-Avoidance Rules (GAAR) by two years would further boost the investment through this route.

The P-note investments were on a steep uptrend this year till mid-March, but started declining sharply after the government in its Union Budget proposed GAAR taxation regime and certain retrospective amendments for taxing offshore transactions.

P-notes have been accounting for about 15-20 per cent of total FII holdings in India since 2009, lower than 25-40 per cent of such holdings in 2008.It was as high as over 50 per cent at the peak of Indian stock market bull run during a few months of 2007. — PTI 

Participatory Notes: Participatory Notes or P-Notes are financial instruments used by investors or hedge funds that are not registered with the SEBI to invest in Indian securities. India-based brokerages buy securities and then issue participatory notes to foreign investors. Any dividends or capital gains collected from the underlying securities go back to the investors.

New Delhi, February 11
In a crackdown on tax evaders, the Finance Ministry today said the Income Tax Department is issuing letters to more than 35,000 PAN holders who have not filed returns.

It seems the Finance Ministry is gearing up to make sure that income tax is collected properly by using financial intelligence as the letters to 35,170 persons are being sent in the first phase and the IT Department will take appropriate follow-up action.

This number is only the tip of the iceberg as the Income Tax Department has identified that there are over 12 lakh PAN (Permanent Account Number) holders who had not filed income tax returns. The department has set up a nodal cell to monitor such cases.

"In the first batch, letters are being sent to 35,170 PAN holders by the Directorate of Intelligence and Criminal Investigation. There will be online monitoring system to ensure follow-up action and track return filing and tax payment of the target segment", the Finance Ministry statement said.

The high priority cases for action have been identified on the basis of specific 148 codes of information available in Annual Information Returns (AIRs), Central Information Branch (CIB) data and TDS/TCS returns. The exercise also takes into account the Cash Transaction Reports (CTS) of Financial Intelligence Unit (FIU)-India.

The Department said it has identified "target segment of 12,19,832 non-filers linked to more than 4.7 crore information records. Rule base algorithms have been used to identify high-priority cases for follow-up and monitoring".

The letters which have been sent to 35,170 PAN holders contain summary of information about financial transactions along with customised response sheet with a view to know why the person has not filed the income tax return.

Revenue Secretary Sumit Bose earlier in December had warned that there was no advantage of suppressing the true income or avoiding payment of income tax as "sooner or later, the information available with the Income Tax Department will lead the department to the doors of such persons."

Finance Minister P Chidambaram had underlined the need for a non-intrusive tax administration to enable the taxpayer to file return and pay appropriate taxes, the release said, appealing to taxpayers to disclose their true income and pay taxes accordingly within the current financial year.

While income tax collections have been sluggish this year, widening the tax base has been a challenge for the government. The Finance Ministry had pointed out that only 14 lakh people in the whole country are showing incomes in excess of Rs 10 lakh. India’s tax-GDP ratio is among the lowest even in the emerging economies.

New Delhi, February 11
Oil and Natural Gas Corp (ONGC) today reported 17.5 per cent drop in net profit for its third quarter ended December as crude oil output fell.

Net profit at Rs 5,563 crore during October-December, 2012-13 was lower than Rs 6,741 crore in the year-ago period, ONGC CMD Sudhir Vasudeva told reporters here.

He said the profit in Q3 last year was higher due to Rs 3,142 crore one-time exceptional income from cost recovery being allowed on royalty it paid on Cairn India's Rajasthan oil block.

Upstream firms like ONGC bear a portion of the losses retailers incur on selling diesel, domestic LPG and kerosene at government controlled rates. — PTI

Mumbai, February 11
Arvind Lifestyle Brands today said it has acquired India operations of US-based Hanesbrands Inc and is aiming to generate Rs 500 crore revenue in next four years in the niche market.

“We have entered into an agreement to market and sell basic and intimate apparel in India under the Hanes and Wonderbra brands, two of the largest and well-known global apparel brands, under a licensing agreement with US-based Hanesbrands Inc," Arvind Ltd Chairman-cum-Managing Director Sanjay Lalbhai told reporters here. He, however, did not disclose the deal value.

While the overall men's inner-wear brand is estimated at Rs 7,200 crore, the women's inner-wear brand is estimated at Rs 10,800 crore, with 60 per cent in organised sector and 40 per cent in unorganised sector.

“This transaction will help us to enter into the highly lucrative market of branded apparel essentials with lingerie and undergarments. This market segment of branded essentials is estimated at over Rs 18,000 crore and is expected to grow over 18 per cent from thereon year-on-year," Lalbhai said.

Arvind Lifestyle Brands, a subsidiary of Arvind Ltd, had earlier acquired business operations of foreign brands Debenhams and Next & Nautica.

He said the niche market offers a promising business opportunity for the company to consolidate its position in the Indian market.

The company is targeting revenue of Rs 500 crore for Hanes brands, aiming 3 per cent market share, in next four years. — PTI

New Delhi, February 11
Awaiting clearance for their $2 billion deal, executives of United Spirits and Diageo today met officials of fair trade regulator Competition Commission of India (CCI) here.

United Spirits Ltd and UK liquor major Diageo have proposed a $2 billion transaction that would see the British entity picking a majority stake in the Vijay Mallya group firm.

"Companies' executives today held a meeting with CCI officials regarding the deal... It will take some more time for the Commission before deciding on the case," a source said.

CCI has the mandate to keep a tab on anti-competitive practices across sectors and the regulator's approval is necessary for M&A deals in the country.

Capital market regulator SEBI, on January 31, approved Diageo's open offer for acquiring 26 per cent stake in USL. The offer is part of the overall deal.

Meanwhile, Diageo has requested SEBI to allow it to launch an open offer for purchase of shares in USL after receiving all regulatory approvals.

The proposed transaction would see Diageo purchasing 27.4 per cent stake for Rs 5,725.4 crore in USL through a combination of share purchase from existing promoters and preferential allotment of shares.

Besides, the UK-base company has offered to acquire an additional 26 per cent stake for Rs 5,441.07 crore through an open offer for public shareholders. — PTI

New Delhi, February 11
India and Colombia have decided to set up a joint working group (JWG) in five sectors, including pharma, IT, FMCG, auto, engineering and transport, textiles to enhance trade cooperation.

This was decided at the second meeting of joint committee of Business Development Cooperation between India and Colombia held today. Carlos Andres de Hart Pinto, vice-minister of Entrepreneurial Development, Colombia and Commerce Secretary SR Rao met to discuss issues of concern of both sides.

A lot of emphasis was made on improving bilateral trade and investment between the two countries. Specific sectors such as mines and minerals, textiles, engineering, automobile, pharmaceuticals and biotech, transport sector, infrastructure development, strengthening human capital, cluster development of certain sectors, knowledge transfer, services trade (IT, software engineers, BPOs) have been identified for enhancing collaboration and co-operation.

Both sides decided to consider flexibility on Visa issues. Cooperation in tourism sector was also explored.

Mumbai, February 11
Reliance Communications today said it has outsourced operations and management of its network in northern and western India to Ericsson in an $1 billion agreement spread over eight years.

The contract would cover 1 lakh km of fiber and mobile infrastructure in 11 telecom circles of RCom, across North and West of India, including Delhi and Mumbai, a joint statement by the two companies said.

The eight-year agreement is valued at $1 billion, it said adding 5,000 employees of RCom will join Ericsson in this regard.

"Given the complexity of network increasing with platforms, technologies and application offerings, we are banking on the experience, innovation and technical expertise of Ericsson to improve the productivity of our network," RCom's CEO for Wireless Business, Gurdeep Singh said.

As per the contract, Ericsson will manage the day-to-day operations across wireline and wireless networks and will take over responsibility for field maintenance, network operations and operational planning of RCom 2G, CDMA and 3G mobile networks, it added.

Ericsson will be responsible for improving network performance and ultimately service quality. — PTI