New Delhi, August 9
India's exports to Bangladesh via Petrapole land port are facing delays in clearances from regulatory authorities resulting in high transaction costs and making shipments uncompetitive. Similarly, exports to Nepal by road also face delays due to non-cooperation of customs authorities, the Engineering Export Promotion Council (EEPC) said. Shipments are mainly sent to Bangladesh through Petrapole land port and "these consignments are often facing delay for clearing due to overburdening leading to heavy transportation detention charges being levied on them," EEPC India chairman Aman Chadha said.

As per an estimate, now an exporter has to spend additional Rs 6,500 to Rs 8,000 to send the consignment, it said, adding "the solution lies in round-the-clock land port facility and this needs to be upgraded". He also demanded doing away with the practice of taking permission from Customs Commissioner for shipments to Bangladesh by barge. On exports to Nepal, he said the Customs authorities insist on different kind of papers which are not necessary during the time of processing of Bill of Exports (BoE). The BoE is allowed to be processed only when materials physically cross the border. Further, the council said procedures for exports in general through different ports have become cumbersome. There are about 24 steps required by an exporter to complete the process. "The process takes 6 months at the minimum to complete this cycle. It is estimated that over 100 signatures are required and about 16 to 18 hours are required to complete this process," he said. The total transaction cost for a medium sized export consignment of around $20,000 would be between 8.89 and 11.89 per cent, the EEPC said, adding the government should think of a "Single Export Document". "When exports have been declining despite currency depreciation, the country can ill-afford delays in shipments and heavy transaction costs," it added.

New Delhi, August 9
The Comptroller and Auditor-General (CAG) has pulled up oil major ONGC for hiring a drilling rig from Reliance Industries (RIL) without bidding, leading to an avoidable expenditure of Rs 146.71 crore.

The CAG, in its report on the PSUs tabled in Parliament, has questioned Indian Oil Corporation (IOC) for failing to synchronise conversion of gas turbines at its Panipat refinery and for entering into a joint venture with GAIL for exploration and production (E&P) projects leading to infructuous expenditure of Rs 1,258.46 crore.

The CAG has said ONGC hired ‘Actinia’ rig from RIL for six months in 2009 for Rs 146.71 crore on the plea that the rig was urgently needed to drill three wells. However, the actual usage of the rig indicated that hiring was not necessary.

“The entire expenditure of Rs 146.71 crore on hiring of the rig from February to July 2009 was, thus, avoidable,” it stated.

Earlier also, the CAG had in September 2012 criticised ONGC for hiring a deepsea drilling rig Dhirubhai Deepwater KG-1 (DDKG-1) in May 2009 without calling for competitive bids and on untenable grounds.

The CAG said the audit found that the rig was deployed at only one of the three locations that had been put as reason for urgently hiring the rig. The other two locations were drilled by two different rigs.

It pointed out that ONGC awarded a contract on the basis of forged documents submitted by the bidder. The contract was terminated four years later owing to inability of the contractor to implement the project leading to a loss of Rs 114.78 crore to the company. 

Mumbai, August 9
Mid-sized private lender Ratnakar Bank today said it has acquired British banking major RBS' business banking, credit cards and mortgage portfolio for an undisclosed sum.

The deal comprises transfer of 1.2 lakh customers but the asset base involved was not immediately known. All of RBS employees will be retained.

"(We have) agreed to acquire RBS' business banking business, credit cards business & mortgage portfolio in India, subject to approvals from Competition Commission of India," a statement from the unlisted bank, founded in 1943, said.

"Employees of RBS associated with these businesses are proposed to be absorbed by Ratnakar Bank," it added.

The bank's head of strategy and markets, Rajeev Ahuja, said RBS has built a high quality business rich in current accounts and added that the transaction will help the lender fast track growth. The Kolhapur-based bank has 5 lakh customers with a book of Rs 14,500 crore. — PTI

Mumbai, August 9
The economy is facing the spectre of slipping to Hindu rate of growth of the pre-liberalisation era and may fall to an abysmal 3.5-4 per cent growth zone if the weak growth trend lasts for four-five quarters more, warns a Morgan Stanley report.

"The recent monetary tightening and uncertain global capital market environment could mean growth stays low for at least two more quarters. A weak growth trend lasting for four-five quarters would increase the risk of a vicious cycle building, whereby the economy becomes vulnerable and the risk increases of GDP growth sliding to 3.5-4 per cent," a report penned by Morgan Stanley Asia chief economist Chetan Ahya has warned.

It also notes that GDP, which was below 5 per cent during periods ending December 2012 and March 2013, is unlikely to have increased during the first quarter of the current fiscal.

According to Ahya, if the growth slows down further, it will result in sharp rise in non-performing assets of banks leading to risk aversion in the banking sector, increase in challenges relating to fiscal deficit management with weaker revenues and reduced confidence of foreign investors, exacerbating the external funding risks further.

Stressing on the need to overcome from this downward spiral, the report called for accelerated pace of policy reforms. — PTI

Ludhiana, August 9
The Indian industry is worried over the delay in renewal of the United States’ Generalised System of Preferences (GSP) scheme that allows duty-free import of select commodities from developing countries. The delay is causing unrest among the industries exporting goods to the US.

The scheme lapsed on July 31 and now the Indian goods that were enjoying duty-free entry into the US are subjected to regular import duties.

"Although the US Government has assured to fast track the legislative procedure to extend the scheme, the delay is causing uncertainties and affecting business. Now, we are required to pay regular import duties which are hurting us financially," said Gurkirat Singh, an exporter.

“Timely renewal of the GSP is very important. I have stopped taking new orders as it will be difficult for me to quote the price for the new consignment. The price will differ if the policy is not renewed. At present, I am just waiting for the situation to take a positive turn," said another exporter Shivam Aggarwal. Non-renewal of the GSP would aggravate the trade deficit, he added.

The GSP programme not only helps developing countries to expand their economies but it also helps American businesses by lowering the cost of imported goods.

WHAT IS GSP

The US Generalised System of Preferences or GSP is a programme designed to promote economic growth in the developing world by providing preferential duty-free entry for up to 5,000 products when imported from one of 127 designated beneficiary countries and territories. 

New Delhi, August 9
Retirement fund body EPFO has made a case for increase in government's contribution to its pension scheme EPS-95 to 1.79 per cent of basic wages from existing 1.16 per cent for ensuring Rs 1,000 per month to pensioners.

"...it is believed that there is a strong case for increasing the government's contribution from 1.16 per cent to 1.79 per cent to the EPS-95 (Employees Pension Scheme-1995) fund to support a minimum pension of Rs 1,000 per month for all categories of EPF-95 pensioners," EPFO said in a letter to Labour Ministry. — PTI