NEW DELHI, November 22
In what would come as another setback for the telecom operators of the country, the Empowered Group of Ministers (EGoM) on telecom today accepted the recommendations made by the Telecom Commission (TC) on spectrum auction pricing.

Not accepting a lower auction price as suggested by telecom regulator, Telecom Regulatory Authority of India (TRAI), country’s highest decision-making body of the sector, the TC had recommended 18% higher pricing than that suggested by the TRAI for 1,800 Mhz.

The pricing put forward by the TC was actually the middle path as an internal committee of the Department of Telecommunications (DoT) had suggested a pricing which was another 25% higher than that has been accepted by the EGoM.

Against the TRAI-suggested base price of Rs 1,496.92 crore for 1 MHz of 1,800-MHz spectrum, the Telecom Commission recommended Rs 1,764.79 crore for the same amount of airwaves in the same band. This suggestion has been accepted by the EGoM, which would now take this decision to the Union Cabinet for the final endorsement and then starting the auction sometime early next year.

Earlier, the DoT committee had suggested two different options — a price of Rs 2,203 crore and Rs 2,378 crore based on different methods of calculation for 1 Mhz of spectrum. The EGom price is 20-25% less than the committee.

In the case of 900 Mhz band, which is being auctioned in Delhi, Mumbai and Kolkata, it has again accepted the TC base price which is 25% more than that suggested by the regulator.

The decision of the EGoM has, however, evoked strong reactions from the market with some operators again suggesting that with the spectrum auction pricing being too high, they may opt to stay out of the auction.

Earlier this year, the DoT auction in the same bands had been a complete flop show with the operators staying away due to high base price, which would have made their business models unviable.

Reacting to the EGoM decision Mohammad Chowdhury, Leader — Telecom, PwC India, said, “The reserve price determined for 1,800 MHz and 900 MHz spectrum remains high in our opinion, due to the sector's profitability remaining well below the expected margins for mobile operations in emerging markets. This, coupled with uncertainty around CDMA spectrum pricing, M&A guidelines not yet finalised, and rupee instability, will condition auction interest”.

The EGoM has also directed the DoT to refer the contentious issue of fixing a base price for spectrum in the 800 Mhz band back to the regulator but with a fresh reference.

Rejecting the suggestion of the regulator that there was no need for auction of 800 Mhz and it should be converted into extended GSM band and then sold, the TC had decided to go ahead with the auction. 

New Delhi, November 22
The manufacturing sector is at its lowest point in the past 10 years and the share of manufacturing in overall GDP is at 15.1%, the lowest in a decade, as per a report by Confederation of Indian Industry (CII) along with Boston Consulting Group (BCG).

The report based on research with top executives of manufacturing companies says that slowdown in domestic demand, identified by 83% of the executives, has the biggest impact on the sector in the past 12 months.

The report says despite slowdown, long- term prospects of Indian manufacturing remain robust and 70% of the respondents expect sector growth over next 5 years to be greater than the last 5 years.

It adds that infrastructure constraints continue to hamper manufacturing growth and government policy conceptualisation and implementation leave a lot to be desired.

Jamshyd N Godrej, CMD, Godrej & Boyce Manufacturing and chairman, CII 12th Manufacturing Summit, said, "It is necessary for manufacturing companies to step back and filter out the structural trends effecting manufacturing from the noise of day-to-day firefighting. We believe the context of manufacturing has changed. The new environment is characterised by shocks, swings and shortages."

The report affirms that the shocks to manufacturing are here to stay as the sector is beset by increasing volatility and turbulence. This is borne out by the fact that every four years, half of the top 30 companies have dropped out of the BSE Sensex.

Export is an area where companies are more confident of growing forward and they are giving higher priority to exports as a key demand driver, with a 16% increase compared to 2012. Among the export sectors, textiles and pharmaceuticals are doing better than other sectors.

Rupee depreciation is proving to be a double-edged sword with opinion divided over whether it will boost exports or negatively impact business due to increased costs.

Among the other trends in the report is that continuing global slowdown and dollar strengthening has been identified as among the top two unfavourable global trends to Indian manufacturing.

On the other hand, strong growth of Africa's economy and adoption of digital technology were identified as the most favourable global trends for Indian manufacturing.

Rural India will provide next wave of growth for Indian manufacturing, the report adds, as rural consumption is growing faster than urban consumption. 

New Delhi, November 22
There is more trouble in store for private coal producing companies, including Jindal Steel and Power Ltd (JSPL) and Rathi Udyog Ltd, as the Coal Ministry has decided to deallocate 11 more coal blocks given to private producers for the lack of development.

Reports emerging from the Coal Ministry said working on the recommendations of the Inter-Ministerial Group (IMG) on coal, the government has decided to deallocate the coal mines and in some cases also impound the bank guarantee provided by them.

The IMG after reviewing the performance of 30 coal blocks last month had recommended deallocation of 11 blocks given to companies, including JSPL and Monnet Ispat and Energy.

It has also recommended the deduction of bank guarantee in case of another 19 coal blocks allocated to the private producers.

The coal blocks which were recommended for deallocation include Ramchandi Promotional block allotted to JSPL, which has been in news as a result of it being named by the CBI in its FIR on the “coalgate” scam.

The companies holding these coal blocks had earlier been issued show-cause notices for delaying production.

These companies had been asked last month to make presentations before the IMG on achievement of milestones and reasons for the delays. They included SAIL, NTPC, JSPL, Tata Power and Monnet Ispat and Energy Ltd.

JSPL was asked to make presentation with regard to delaying production from its four coal blocks - Amarkunda Murgadangal in Jharkhand, Utkal B1 and Ramchandi Promotional block in Odisha and Urtan North in Madhya Pradesh.

SAIL was asked to make presentation for Sitanala mine in Jharkhand, and NTPC for Parki Barwadih mine in Jharkhand and Talaipalli mine in Chhattisgarh.

New Delhi, November 22
Seeking deeper co-operation with India, European Union today said both sides need to work on eliminating tariff barriers and regulatory difficulties in their bilateral economic exchanges.

European Commission vice-president Joaquin Almunia emphasised that open exchanges can help in eliminating barriers and increase investment flows.

The Commission is the executive body of European Union (EU), a grouping of about 28 countries.

"We have a strategic partnership with India for many years. Now, with the new challenges and new priorities in our bilateral agenda, this partnership should be deepened," Almunia said.

In response to a query on the barriers in their bilateral economic exchanges, he said there are traditional tariff besides non-tariff barriers and regulatory difficulties.

"There are difficulties in some cases coming from food safety regulations, in some cases obstacles to investments, in other cases obstacles coming from intellectual property rights and tariff barriers," Almunia noted.

His comments come against the backdrop of India and EU negotiating a Free Trade Agreement.

"We are keen to reach a positive conclusion on the FTA negotiations," he added.

According to him, open exchanges can help to eliminate barriers in economic exchanges, counter obstacles and increase trade, services and investment flows.

"... we need to make an effort to pursue a convergent approach so that Indian global companies and European global companies can operate across the world with less barriers," he said.

Meanwhile, Almunia, who is also in charge of competition policy at the Commission, underlined the need for increased co-operation in the area of competition laws. — PTI

Mumbai, November 22
The RBI today said it will sell inflation-indexed bonds worth Rs 1,000 crore through price-based auction on November 26.

Interest at the rate of 1.44% per annum will accrue on the indexed principal value of the bonds from the date of original issue and will be paid half yearly on December 5 & June 5, the RBI said.

The RBI would allot up to 20% of the notified amount of the bonds to eligible individuals and institutions as per the scheme for non-competitive bidding facility.

This is the second round of inflation bonds, after the maiden offering in June.

The bids for the auction should be submitted in electronic format on RBI's core banking solution on November 26, it said.

The RBI will announce result of the auctions on November 26 and payment by successful bidders will be on November 27. — PTI

BRIEFLY

NHPC’s RS 2,368-cr buyback offer to begin from Nov 29
New Delhi: NHPC's buyback of shares worth up to Rs 2,368 crore will start from November 29 and aims at funding the country's largest hydro power producer's expansion plans. The company plans to buyback up to 123,00,74,277 fully paid-up equity shares of Rs 10 each at a price of Rs 19.25 apiece aggregating Rs 2,368 crore from the open market. — PTI

Union Bank raises RS2,000 cr
Mumbai: Union Bank of India on Friday raised Rs 2,000 crore through issuing bonds that are compliant with the global banking norms, Basel III. The paper has a tenor of 10 years and carries a fixed coupon of 9.80% per annum payable annually, it added. —PTI

Google's android platform under EU scanner
New Delhi: European anti-trust regulator is looking at whether Internet major Google's popular smartphone platform Android is violating fair competition norms. Regarding the Android issue, European Commission vice-president Joaquin Almunia said the case is at an early stage and a decision on launching a formal investigation is yet to be taken. — PTI

JLR, Intel join hands on next-gen technologies
London: Intel has collaborated with Jaguar Land Rover to enhance the latter's R&D on future vehicle infotainment technologies. Under the partnership, JLR will set up a new Technology R&D centre in Portland and US, Intel said. JLR's research facility will help lead the development of future vehicle infotainment systems. — PTI

Cairn India surges 5% on buyback plan
Mumbai: Shares of Cairn India Ltd rose by almost 5% on Friday after the company said its Board would meet on Tuesday to consider a proposal to buy back shares. After a bullish opening, shares of the oil explorer further went up by 4.96% to Rs 332.90 on the BSE. At the NSE, the scrip jumped 4.96% to Rs 333. — PTI