Mumbai, August 29
In a forthright "last public lecture" before he retires next week, RBI Governor D Subbarao was today sharply critical of the government, blaming its "loose fiscal stance" for the current economic woes, and warned that the root cause of rupee depreciation is "domestic structural factors." While the speed and timing of the rupee's depreciation was due to the markets reacting to US Fed announcements, Subbarao said, "We will go astray, both in the diagnosis and remedy, if we do not acknowledge that the root cause of the problem is domestic structural factors." He said it would be "misleading" to blame recent policy pronouncements of the US Federal Reserve for the decline in rupee, which has slid 23 per cent against dollar this fiscal.

"...there has been a growing tendency to attribute all of this (ferocity of rupee depreciation) to the 'tapering' of ultra easy monetary policy by the US Fed. Such a diagnosis, I believe, is misleading," he said in his last public lecture as RBI Governor.

While some of the growth slowdown was attributable to the RBI's monetary tightening, he said, "India's economic activity slowed owing to a host of supply-side constraints and governance issues, clearly beyond the purview of the RBI." Blaming the "loose fiscal stance of government during 2009-12" for slow growth and high inflation, he said, "Had the fiscal consolidation been faster, it is possible that monetary policy calibration could have been less tight." — PTI

Mumbai, August 29
The benchmark S&P BSE Sensex surged 405 points today, the biggest gain in a week, as the battered rupee recovered on fresh steps by the RBI to ease volatility in the currency markets.

The RBI yesterday allowed the three state-owned oil companies to buy dollars from the central bank.

The 30-share Sensex opened higher and stayed in positive territory until it settled at 18,401.04, a rise of 404.89 points or 2.25 per cent. The gain was the most since August 22, when the index climbed 407 points, or 2.27 per cent.

The broader Nifty index on the National Stock Exchange added 124.05 points, or 2.35 per cent, to 5,409.05. The SX40 index on the MCX-SX closed at 10,849.51, up 219.46 points or 2.06 per cent.

Oil and gas led all BSE sectoral indices higher, followed by metal, FMCG, capital goods and auto shares.

Sesa Goa was the biggest gainer on the index, climbing 13.54 per cent. The other major gainers were HDFC, Hindalco and Reliance Industries.

The three PSU oil companies gave up their initial gains at the close. Indian Oil rose 1.45 per cent to Rs 209.55, Bharat Petroleum climbed 0.45 per cent to Rs 270.05 and Hindustan Petroleum fell 0.31 per cent to Rs 163.55.

US President Barack Obama's statement that he had not yet decided whether to attack Syria in the aftermath of the Assad regime allegedly using chemical weapons, also gave a reprieve to investors.

Asian stocks ended higher as a weaker-than-expected report on US durable goods orders triggered speculation the Federal Reserve may delay easing its monetary stimulus.

Barring China's Shanghai Composite, indices in Hong Kong, Japan, Singapore, South Korea and Taiwan firmed up. European stocks were higher in early trade, with indices in France, Germany and UK moving up.

In the domestic market, 24 Sensex shares gained, led by Sesa Goa (13.54 pc), HDFC (6.3 pc), Hindalco (4.65 pc), Reliance Industries (4.22 pc) and Bharti Airtel (3.89 pc).

Among the sectoral indices, S&P BSE Oil and Gas rose 2.86 pc, followed by S&P BSE-Metal 2.38 pc, S&P BSE-FMCG 2.29 pc, S&P BSE-Capital Goods 2.2 pc and S&P BSE-Auto 2.1 pc.

The market breadth turned positive as 1,274 stocks ended higher while 990 closed lower. Total turnover dropped to Rs 2,190.39 crore from Rs 2,621.36 crore yesterday.

Foreign institutional investors sold a net Rs 1,120.43 crore of shares yesterday, as per provisional data with stock exchanges. — PTI

New Delhi, August 29
Gold prices today fell from record high by plunging Rs 1,575 to Rs 32,325 per 10 gram on profit-selling by stockists driven by recovery in rupee amid a weakening global trend.

Selling pressure emerged at existing higher levels as gold climbed to Rs 33,900 after it touched Rs 34,500 per 10 gram intra-day yesterday with its biggest ever gain of Rs 1,900 in the backdrop of the rupee hitting record low of 68.85 per dollar.

Besides the rupee recovering to 67.30, some retailers selling old scrap gold further influenced the trading sentiment, traders said.

They said the market also received impact of weakening global trend on optimism the US economic data may reinforce the case for the Federal Reserve to slow stimulus.

Gold in Singapore, which normally sets price trend on the domestic front, lost 0.9 per cent to $1,404.88 an ounce and silver by 2.8 per cent to $23.66 an ounce.

Silver followed suit and plunged by Rs 2,790 to Rs 55,710 per kg on poor offtake by industrial users and coin makers at higher levels. — PTI

New Delhi, August 29
Giving a thumbs down to the Food Security Bill, rating agency Moody's today said the measure is credit negative as it will weaken government finances and deteriorate macroeconomic situation.

"The measure (Food Bill) is credit negative for the Indian government because it will raise government spending on food subsidies to about 1.2 per cent of GDP per year from an estimated 0.8 per cent currently, exacerbating the government's weak finances," Moody's said in a statement.

Moody's currently assigns 'Baa3' rating on India, with a stable outlook. 'Baa3' means medium grade with moderate credit risk.

The Food Security Bill was passed by the Lok Sabha earlier this week. The Bill seeks to provide cheap foodgrains to 82 crore people in the country, ushering in the biggest programme in the world to fight hunger.

The annual financial burden after its implementation is estimated to be about Rs 1.30 lakh crore at current cost.

As the Bill is likely to be implemented in the remaining months of the current fiscal, its impact on government finances will be less in 2013-14, but much more in the years to come, Moody's said.

The total food subsidy budgeted in the current fiscal is Rs 90,000 crore, of which Rs 10,000 crore is towards the implementation of the programme.

"It will raise future subsidy expenditure commitments, hindering the government's ability to consolidate its finances," Moody's said, adding, the government subsidies will contribute to the already high food inflation.

The agency further said India's fiscal deficits are already higher than those of its emerging market peers.

It said the high fiscal deficit contributes to the Current Account Deficit (CAD) by keeping domestic demand high and increasing imports.

A high CAD, the difference between inflow and outflow of foreign currency, puts pressure on the domestic currency and fuels prices.

The rupee has depreciated about 25 per cent this year and touched a record low of 68.80 to a dollar yesterday.

The Food Bill seeks to provide highly subsidised foodgrains to 75 per cent of the rural and 50 per cent of the urban population through the public distribution system (PDS).

It will guarantee 5 kg of rice, wheat and coarse cereals per month per person at a fixed price of Rs 3, Rs 2 and Rs 1 respectively. — PTI

‘To hit finances’ The Bill will raise the government’s spending on food subsidies to about 1.2% of GDP from an estimated 0.8% currently The Bill seeks to provide cheap foodgrains to 82 crore people in the country The annual financial burden is estimated to be about Rs 1.30 lakh cr at current cost

New Delhi, August 29
Insurance behemoth Life Insurance Corporation (LIC) has increased its shareholding in the country's largest bank State Bank of India by 2.86 per cent to 13.26 per cent by acquiring 19.57 lakh shares from open market.

At the current market price, LIC would have paid Rs 49.15 crore for acquiring additional stake in the bank.

Shares of SBI closed at Rs 1,489.25 apiece, down 0.6 per cent on the BSE.

Before the acquisition, LIC's stake in the bank was 10.4 per cent, SBI said in a filing to the Bombay Stock Exchange.

After the acquisition of these additional shares, the equity share capital of the LIC has increased to Rs 684.03 crore from Rs 634.88 crore.

In the first quarter ended June of 2013-14, SBI had reported a 13.6 per cent decline in stand alone net profit to Rs 3,241.08 crore due to a rise in bad loans and increased provisioning.

It had a standalone net profit of Rs 3,752 crore in the same quarter last year.

Its total income increased to Rs 36,192.62 crore in the quarter (April-June) from Rs 32,415 crore in the same period a year-ago. — PTI

New Delhi, August 29
The growing telecom market and the correspondingly growing mobile phones market has resulted in a jump in the import of the telecom equipment into the country.

According to the latest figures given out by the Telecom Ministry, import of the telecom equipment rose to Rs 53,971.01 crore in 2012-13, fuelled mainly by the mobile phone market.

According to the details given out by Minister of State for Communications and IT Milind Deora in the Rajya Sabha, the telecom industry had imported telecom gears valued at Rs 52,441.23 crore in FY 2011-12. The minister was, however, not able to give out the exact share of the telecom equipment imported by the private operators.

“Since the total requirement of telecom sector pertains largely to the requirement of the private sector service providers, the information is not maintained,” the minister said.

According to the data, Rs 25,835.15 crore worth of “telephones for cellular networks or for other wireless networks” were imported in FY 2013 compared to Rs 27,715.83 crore worth such phones imported in FY 2012.

While fixed line connections in the country is on decline, the data showed import of line telephone sets with cordless handsets increased to Rs 258.72 crore in FY 2013 from Rs 249.27 crore in FY 2012.

The import of base stations (systems installed on mobile towers) reduced to Rs 202.84 crore in FY 2013 from Rs 772.34 crore in FY 2012.

New Delhi, August 29
Reliance Industries and its partner BP Plc today won approval to invest $3.18 billion in R-Series gas field in the flagging KG-D6 block. RIL-BP plans to quickly bring satellite fields in the KG-D6 block to production to help reverse the decline in output.

The block oversight committee, called Management Committee (MC), headed by upstream regulator DGH, approved plans of RIL and its partners BP plc of UK and Niko Resources to produce 13-15 million standard cubic meters per day of gas for 13 years from D-34 discovery in the KG-DWN-98/3 or KG-D6 block, sources privy to the development said.

The planned output from D-34, which is estimated to hold an in-place reserves of 2.2 trillion cubic feet (Tcf), is equivalent to the combined current production from Dhirubhai-1 and 3 (D1&D3) gas field and MA field in the KG-D6 block.

RIL, the operator of KG-D6 block with 60 per cent interest, had on January 30 submitted the Field Development Plan (FDP) for D-34 field to DGH.

Sources said DGH after examination trimmed down the recoverable reserves to 1.191 Tcf from 1.413 Tcf estimated by the operator.

Also, the peak production of 14.9 mmscmd estimated by RIL was brought down to 12.9 mmscmd by DGH.

The Dhirubhai-34 or D-34 gas discovery in the southern part of KG-D6 block in Krishna Godavari basin was notified in May 2007. The find was declared commercially viable by MC in November 2011.

RIL has so far made 19 gas discoveries and 1 oil find in the KG-D6 block. Of these, D1&D3 gas fields were brought to production in April 2009 while MA oilfield began pumping oil in September 2008. —PTI

Chandigarh, August 29
The Haryana Government has signed memorandum of understanding (MoU) with six independent power producers for setting up six biomass power projects of 63 MW commutative capacity with an investment of around Rs 284 crore.

A spokesman of the Renewable Energy Department said the commutative installed capacity of renewable energy power projects in the state was 186.79 MW out of which capacity addition of 117.19 MW had been added from March 2005 to August 2013. Apart from this, four small hydro projects of 10.8 MW capacity have been commissioned in the state. — TNS

Mumbai, August 29
The government needs to speed up and prioritise polices that can ensure quick revival of the manufacturing sector which can create millions of new jobs, industry body Ficci said today.

"Since manufacturing has to bear a major proportion of job creation in times to come, it is important that an enabling policy framework for attracting skilled, semi-skilled or unskilled workers in the sector is provided," Ficci president Naina Lal Kidwai said, while unveiling the chamber's 12-point 'Manufacturing Mandate' here.

The mandate suggests a 10 per cent manufacturing growth on a long-term basis with a potential to create 67 million jobs directly, provided that some proactive labour market policies are implemented.

The government has set an ambitious target of taking the share of manufacturing in the GDP to 25 per cent from the present under 16 per cent by FY2015-16.

"With 10 per cent manufacturing growth, we can achieve a size of $950 billion by 2025 from the current $250 billion for the sector and take the total employment in manufacturing to 115 million during the period," Kidwai, who is also the country head of British lender HSBC India, said.

The macroeconomic policies like exchange rate, monetary policy and skill development policies should be inextricably linked to the goals and objectives of the manufacturing policy and plan, Ficci said.

"The policies should bring stability in the rupee exchange rate and aid exports which benefit from the declining rupee while looking at ways to reduce imports," Kidwai said.

On taxation, the document asked the government to avoid retrospective amendments in law and said it should be made in rarest of rare cases, as suggested by Shome committee.

On labour laws, the report calls for specific amendments in the Factories Act, Contract Labour Act and Industrial Disputes Act to align them with best international practises and ensure faster employment generation.

On the Land Acquisition Bill, which was tabled in the Lok Sabha today, Kidwai said: "The Land Bill in its current form needs a relook and the system of land allotment should be made totally transparent and e-based." The industry body also wants a single window clearance system both at the Centre and the state level, backed by a law with provisions for time-bound and deemed clearances.

About the free trade agreements, Ficci asked the government to review the existing ones and till the time it is done, the government should have a moratorium on further agreements, it said. — PTI

Mumbai, August 29
State-run Rural Electrification Corporation (REC) plans to raise over Rs 37,000 crore this fiscal through various instruments, a top company official said today.

"We will raise over Rs 37,000 crore from both domestic as well as overseas markets. We may look at various instruments like bonds, ECBs, etc," REC chairman and managing director Rajeev Sharma told reporters here today.

The company is already planning to raise Rs 5,000 crore through issue of tax-free bonds. The bond issue, carrying coupon rate ranging from 8.01 per cent to 8.46 per cent on per annum basis, will open tomorrow and close on September 23. REC is issuing tax-free bonds with a face value of Rs 1,000.

This tranche issue is for an amount of Rs 1,000 crore with an option to retain over-subscription up to Rs 2,500 crore aggregating up to Rs 3,500 crore (tranche 1) and a shelf limit of Rs 5,000 crore by issuance of bonds in one or more tranches.

"The tranche 1 bonds carry a coupon rate of 8.01 per cent for series 1 bonds, 8.46 per cent for series 2 bonds and 8.37 per cent for series 3 bonds on per annum basis. The bonds will be listed on the BSE," REC GM (Finance) Rakesh Arora said.

He said series 1, series 2 and series 3 bonds can be redeemed after 10 years, 15 years and 20 years, respectively from the date of allotment.

"The funds raised will be used for lending for projects in the transmission, distribution and generation sectors," Sharma said.

REC has already sanctioned loan for projects worth Rs 40,000 crore and has already disbursed Rs 13,000 crore, he said. — PTI

New Delhi, August 29
The attrition between the country’s largest coal producer Coal India Ltd (CIL) and the power companies continues with the reports suggesting that the latter owe the public sector undertaking over Rs 10,000 crore.

Reports emerging from the Coal Ministry point out that of the power companies that owe money to CIL, the NTPC, which has been having a long standoff with the coal producer, alone owes over Rs 4,000 crore.

Reports said over 40 power generating companies in the country owe CIL a staggering Rs 10,967 crore. And the majority of the power companies are from the public sector.

The Coal Ministry data said as on April 30, 2013, overall dues to CIL stood at Rs 9,024 crore.

The issue of the rising dues has been taken up on various occasions by the two ministries concerned and last month Coal Secretary SK Srivastava had also written to Power Secretary PK Sinha on the issue.

The two ministries then held a meeting and the power ministry had assured the coal ministry of advising the power generating companies of clearing the dues at the earliest.

Reports said power generator NTPC alone accounts for Rs 4,107 crore, or 37% of the dues, according to the coal ministry.

CIL and NTPC have been at loggerheads for months now over the dispute of quality of coal supplied to it with the latter stopping the payments to the former on account of poor quality of raw material being supplied to the power generating companies.

Earlier in April, NTPC had refused to recognise CIL dues, saying it had already paid for the quality of coal it received. While CIL claimed it had supplied a high quality coal grade, NTPC argued that it had been given a lower quality coal.