New Delhi, December 6
An informal group of ministers, headed by Agriculture Minister Sharad Pawar, today recommended a slew of incentives to the sugar industry, including 12% interest subsidy on Rs 7,200 crore loan that mills can avail of from banks for paying cane farmers. The panel also recommended loan recasting for mills as per RBI norms, incentives for production of raw sugar up to 4 million tonnes and setting up of buffer stock besides doubling ethanol-blending in petrol to 10%. India traditionally produces white sugar, but there are fewer buyers for it in the world market. Raw sugar can be sold easily in the world market. But the panel ruled out an immediate hike in sugar import duty.

Announcing the bailout package, Pawar said banks would provide Rs 7,200 crore loan to sugar mills at 12% interest to sugar mills with a condition that the money would be used for paying cane farmers. “Total interest subvention will be 12%. Out of this, 7% will be (paid) from the Sugar Development Fund, while 5% will come from the Government of India,” he told the media after the meeting.

Mills would have to repay loans in five years, but could get a moratorium on repayment in the first two years, he said. The final call on these measures would be taken by the Cabinet in the next two weeks.

Finance Minister P. Chidambaram, Petroleum Minister Veerappa Moily, Food Minister KV Thomas and Civil Aviation Minister Ajit Singh were present in the meeting.

Chief Ministers of Uttar Pradesh, Maharashtra and Karnataka were also present. Tamil Nadu was represented by the state Chief Secretary Sheela Balakrishnan.

The sugar industry is facing a financial crisis due to higher cost of production and falling sugar prices that have led to cane arrears of Rs 3,400 crore from 2012-13 marketing year that ended in September 2013.

Sources say being an election year the government was particularly keen to resolve the impasse as early as possible.

Indian Sugar Mills Association (ISMA) Director-General Abinash Verma said: "The industry welcomes the initiatives of the Central Government to help the sugar industry to face the financial crisis it is going through. It will help the industry clear arrears of farmers."

He also said it would help the industry to venture into production of a new product - raw sugar - to diversify its product mix and grab opportunities whenever they are available. “But for a long-term solution, the revenue sharing formula for cane pricing should be implemented to rationalise the cane pricing mechanism and make it more transparent,” he added.

New Delhi, December 6
The government today modified the FDI policy allowing unlisted companies to directly list on stock exchanges abroad to raise funds for acquisitions or retiring overseas debts.

As of now, unlisted companies are not allowed to directly list in overseas markets without prior or subsequent listing in Indian markets.

"Unlisted companies shall be allowed to raise capital abroad without the requirement of prior or subsequent listing in India initially for a period of two years," the Department of Industrial Policy and Promotion (DIPP) said.

The statement said necessary changes have been made in the consolidated FDI policy' in this regard. Unlisted companies can directly list abroad only on exchanges in International Organisation of Securities Commissions (IOSCO)/ Financial Action Task Force (FATF) compliant.

"The capital raised abroad may be utilised for retiring outstanding overseas debt or for operations abroad including for acquisitions," the revised FDI policy said.

In case the funds raised are not utilised abroad, it said, the company should repatriate the funds to India within 15 days and park it with a scheduled bank and "may be used domestically". The RBI has already issued a notification in this regard.

The listing company would also have to comply with the instructions on downstream investment and the criteria of eligibility of who can raise funds through ADRs/GDRs would be as prescribed by the government.

The scheme will be implemented on a pilot basis for a period of two years.

The government aims to bring down the CAD to below $56 billion this fiscal, as against $88.2 billion in the last financial year.

Rupee value versus US dollar has been affected severely because of high CAD and other global factors.

New Delhi, December 6
Cars will become costlier from January with major manufacturers Maruti Suzuki and Hyundai stating that they will hike prices from next month, joining the likes of Mercedes, BMW, Audi and Honda.

"Maruti Suzuki will increase prices from January 2014 as input costs have been going up and we cannot continue to absorb all of it. We will pass on some part of it to customers," Maruti Suzuki India (MSI) COO (Marketing and Sales) Mayank Pareek said.

MSI sells a range of vehicles, from M800 to Grand Vitara, priced between Rs 2.13 lakh and to Rs 24.6 lakh (ex-showroom, Delhi).

Hyundai Motor India also said it is looking to take a similar step from next month to offset rising input costs.

"We will increase the prices from January due to the rising input costs and current market conditions," HMIL senior vice-president Rakesh Srivastava said. — PTI

New Delhi, December 6
With new merger and acquisitions (M&A) norms likely to be in place soon, global telecom giant Vodafone is looking at increasing its investment in India through its local arm Vodafone India.

Looking to increase its stakes in Vodafone India, the parent company is planning to invest $3 billion in the next two years to expand its mobile network in rural areas, which would help it improve its subscriber base in the country.

This would be an important decision from Vodafone’s point of view, especially since the telecom operators have reached a saturation point in the urban areas and the growth factor would now be only dependent through the rural segment.

Rural expansion is also important for Vodafone India as it is currently lagging behind Bharti Airtel in its rural presence where the latter has a 24.47% shares as per telecom regulator TRAI’s figures.

Since the telecom operator is also focusing on m-pesa mobile money project, thrust on telecom network in rural India will give enough returns on its investments.

The data released by Telecom Regulatory Authority of India this week suggests that Airtel’s rural mobile market share increased to 24.47% in June 2013 quarter from 23.99% in March quarter of 2013. Airtel, which has both 3G and 4G networks in India, had 85.9 million rural subscribers in June quarter.

On the other hand, rural mobile market share of Vodafone India decreased to 23.93 per cent from 24.02 per cent during the period. Vodafone had 84.01 million mobile customers in rural India.

Idea Cellular is on the third position with 68.73 million rural mobile users. Its mobile market share in rural space increased to 19.58 per cent from 19.21 per cent.

New Delhi, December 6
The Supreme Court today issued notice to the Finance Ministry, RBI, Registrar of Companies and the Institute of Chartered Accountants on a PIL pleading for a multi-dimensional probe into the alleged fudging of accounts by various network audit firms of the UK-based PricewaterhouseCoopers (PwC).

A three-member Bench headed by Justice P Sathasivam also sought the response of the Central Board of Direct Taxes, besides PwC and its audit firms.

According to the PIL, filed by NGO Centre for PIL (CPIL), PwC pumped in Rs 240 crore in the Indian audit companies in 2010-11 in violation of all norms, including FDI and the Foreign Exchange Management Act.

PwC Bangalore was the auditor of the erstwhile Satyam Computer Services for eight years but had failed to detect the fudging of accounts by the company. The US authorities had slapped a penalty of $ 7.5 million on PwC companies for violation of federal securities laws.

BRIEFLY

Forex reserves soar $5 bn to $291 bn
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Re strengthens 34 paise to 5-week high of 61.41 vs $
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Cairn India bids for one block in Sri Lanka
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Bharti Group IT Director Jai Menon quits
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Tata JLR to set up plant in Brazil
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