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A-I, 40 foreign airlines to levy fuel surcharge
US CEOs bullish on India
Indo-China MoU on mining
PSU Boards may get politicians
Law to overhaul IT Act next year, says FM
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EoI from advisers for sale of Maruti stake soon
MFs allowed to access derivatives market
Google sells stock worth
US-based firms eye India for chip plant
Truck fares shoot up by 10-15 pc
Philips aims at Rs 400-crore revenue from software trade
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A-I, 40 foreign airlines
to levy fuel surcharge
Mumbai, September 15 All airlines operating on international routes would jointly take a decision on levying a fuel surcharge at a meeting of the board of Airline Representation next week, an Air-India spokesman said here today. Air-India had a fuel budget provision of Rs 2,000 crore this year but had to levy a fuel surcharge in view of the increase in the international prices of jet fuel, he said. Last year, the airline had to meet an expenditure of Rs 650 crore additionally due to a hike in the aviation fuel prices and 40 per cent of this amount was met from the fuel surcharge levied by the airline, he said. About the fleet acquisition of Air-India Express, he said four 737-Boeing aircraft were being inducted into the existing fleet after which the airline would be able to cater to new destinations such as Hyderabad, Chennai and Delhi.
Adviser for A-I,
IA IPO soon
Meanwhile, the government will soon announce the name of the adviser for the initial public offer (IPO) of flag carriers Air-India (AI) and Indian Airlines (IA), enabling the state-owned carriers to come up with an IPO in the current fiscal itself. Air-India Company Secretary and General Manager S. Venkat told mediapersons here that the Centre had already shortlisted three advisers for the IPO and the final decision an adviser was expected any time. “The Ministry of Civil Aviation has already shortlisted GM Morgan Stanley, HSBC Bank and DSP Merill Lynch. The final decision is expected any day,” he said. On the proportion of stakes that the airline would dilute and the price at which the IPO should be made, Mr Venkat said the adviser would suggest the ministry about those details. Both state-owned carriers are planning for an IPO to fund their fleet acquisition programme and also to enhance the debt-equity ratio. AI has also started negotiating with banks to help finance the acquisition of 50 new wide-bodied aircraft that the airline will be buying from Boeing at an estimated Rs 30,000 crore. Meanwhile, IA has got the approval to acquire 43 new aircraft at an estimated Rs 9,898 crore from Airbus Industries and the deliveries are expected by mid-2006.
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US CEOs bullish on India
New York, September 15 In outlining his economic vision for India, Dr Manmohan Singh drew pointed attention to how India was poised to become an economic powerhouse. Addressing influential American CEOs on Wednesday, Dr Manmohan Singh drew pointed attention according high priority to key infrastructure spheres to bring it on a par with international standards. Briefing mediapersons on the Prime Minister’s interface with the CEOs of American multinationals, including those in the Fortune 500 list, India’s Ambassador to the
USA, Mr Ronen Sen ,said the CEOs were the virtual who’s who of American industry. All of them were members of the India-US CEOs forum set up in July last year. Taken together, they represented a market capitalisation of $1.4 trillion and assets totalling $ 3.3 trillion. Mr Sen said the CEOs were buoyant about India because of the possibilities of tremendous profitability compared to China. Besides, India offers a wide range of sectors from infrastructure to energy. Interestingly, none of them raised any issue relating to Indian politics, including the fact that Dr Manmohan Singh’s Congress-led UPA Government is highly dependent on the Left, which has been a pinprick in opposing some of the economic reforms. The CEOs ,who met the Prime Minister, included News Corporation Chairman Rupert Murdoch and JP Morgan Chase head Willian Harrison Jr. This was Dr Manmohan Singh’s major interaction with business executives after a similar meeting in Paris during the first leg of a week-long foreign trip.
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Indo-China MoU on mining
New Delhi, September 15 Minister of Mines Sis Ram Ola signed the MoU on behalf of the Government of India and the Minister of Land and Resources, Mr Sun Wensheng, signed on behalf of the People’s Republic of China. The MoU is expected to establish a comprehensive framework to promote cooperation on research in the field of metallic and non-metallic minerals, formulation of mining regulation policies, technical assistance and training programmes and also undertaking joint ventures in other countries. Mr Ola said, “It has opened a new chapter in friendly relations and cooperation between the two countries.”
— UNI
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PSU Boards may get politicians
New Delhi, September 15 “We have written to the Prime Minister suggesting change in norms for the appointment of independent directors to include eminent persons from other walks of life (besides the present practice of appointing only professionals and technocrats),” Minister for Heavy Industries and Public Enterprises Santosh Mohan Dev told PTI here. Officials said the Petroleum Ministry has already suggested names of partymen for inclusion as independent directors on the boards of Indian Oil Corp, Oil and Natural Gas Corp, Hindustan Petroleum and Bharat Petroleum. The ministry has turned down a panel of IIM director, a Harvard Business School adviser and an ex-petroleum secretary suggested by a search committee, made up of Public Enterprise Selection Board and Secretary,
Department of Public Enterprises, and suggested its own list. The search committee has called for resume of the persons suggested by the ministry before forwarding its recommendations to the Cabinet Committee on Appointments. “Politicians have never been appointed on a navratna or mini-ratna PSU board, expect once when a youth leader was appointed on board of MTNL when Pramod Mahajan was the Telecom Minister,” said an official. All along only senior bureaucrats — having served not less than 10 years as Joint Secretary — or
university professors, technocrats, institute heads and leaders in the corporate sector, were appointed as independent directors on PSU
Boards. The Oil Ministry restricted professionals to barely one for each PSU and has suggested packing the remaining seats with politicians, the official said.
— PTI
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Law to overhaul IT Act next year, says FM
New Delhi, September 15 “The expert committee I have appointed will divide into four working groups... to look into changes to be made in the Income Tax Act. They will present separate reports and we will prepare a comprehensive law next year,” Mr Chidambaram said in an interview. The expert committee would also examine the reports given by various committees, including the Kelkar Committee, on changes to be made in the Income Tax Act, he said in the interview to the weekly magazine, The Week. Mr Chidambaram admitted there are opportunities for black money to become white, and vice-versa, are numerous on any single day. Also, there are a large number of incomes such as agriculture, which are tax exempted. “Thus, in India, money changes colour every hour. If somebody has a better idea to get this money out, they should suggest it,” he said indicating his difficulty in finding a scheme to deal with black money without amnesty. He, however, ruled out any amnesty scheme to unearth black money even though it is effective. Searches and seizures are generally described as “blunt instruments”, he said adding: “I can only depend on the annual information report, the banking transaction tax, and the third party information. In the system we have today, it is not possible to unearth Rs 10,000 crore of black money. Only an amnesty scheme can do that. But such a scheme is ruled out.” Asserting that the opposition to transaction tax has virtually died down, Mr Chidambaram said it was not a revenue raising measure but an administrative one to “plug a gaping hole.” “No one is affected by this tax except those who want to launder money,” he said. On fringe benefit tax, he said, the demand that it should be repealed cannot be accepted. “It is a presumptive tax. The approach to presumptive tax must be understood.” The
FBT, he said, is based on the universally accepted principle that compensation to employees must be taxed on the basis of cost to company. On Value Added Tax, Mr Chidambaram said he was in constant touch with states, which have not implemented it. Turning to financial sector reforms, dubbed as second-generation reform, Mr Chidambaram said: “I agree it is time for rejuvenating the financial sector, that includes reforms of banking, insurance and pensions.” “The second generation reforms mean the bill to change the pension law and two banking bills,” he said adding political consensus was emerging but it would take some more time. Turning to the bull run, Mr Chidambaram said as long as the price to earnings (P/E) ratio are in the comfort zone, there was no cause to worry. Foreign investors also have great confidence in the Indian market, which was widely believed to be a well-regulated market, he said, adding this along with strong economic fundamentals and good corporate quarterly results were pushing up the Sensex.
— PTI
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EoI from advisers for sale of Maruti stake soon
New Delhi, September 15 At the meeting of Inter-Ministerial Group, the go-ahead was given to the Department of Disinvestment to call the bids and inform various stakeholders, including joint venture partners, about the sale. The Union Cabinet had given its nod to the sale of 8 per cent stake in Maruti on September 2. The government is expected to raise anywhere between Rs 900-1,000 crore from the sale. Only public sector financial institutions would be allowed to bid for the Maruti shares. The disinvestment will be done through competitive bidding with the market price as the benchmark. The government holding will reduce to 10.28 per cent after the disinvestment. It has already expressed its intention to off-load even 10.28 per cent stake in Maruti, which will be left with it after the disinvestment, at a later date. It, earlier, held 45.8 per cent of stake in Maruti.
— PTI
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MFs allowed to access derivatives market
Mumbai, September 15 The MFs are currently
permitted to participate in a limited way in hedging and re-balancing their portfolios in the derivatives market. The MFs will now be considered as trading members like the FIIs in respect of position limits in index futures, index options, stock options and stock futures contracts and their schemes will be treated as clients like sub-accounts of FIIs,
acceding to a SEBI notification issued yesterday. According to experts, this move of the market regulator could release liquidity worth thousands of crores of rupees in the futures and options (F&O) segment of the market. The decision has already had an impact on the markets as the BSE Sensex opened with good gains this morning at 8,208.21 points, up by more than 18 points and crossed 8,250 mark in the first half-an-hour of trading. The mutual funds will be able to increase their exposure to the F&O segment up to 80 per cent, backed by liquid securities or cash, unlike earlier when they could not exceed the limit of 50 per cent backed by cash alone, said an analyst.
— UNI
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Google sells stock worth $ 4.18 billion
San Francisco, September 15 Google went public in August 2004 and announced the follow-on offering in a regulatory filing last month. It had previously said it expected $ 4.11 billion in net proceeds from a shelf offering of 14.16 million Class A shares. The sale marked the largest secondary offering by a US hi-tech firm since at least 1996 and the largest overall since a follow-on stock sale by investment bank Goldman Sachs that drew $ 4.51 billion in 2000, according to tracking firm Dealogic.
— Reuters
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US-based firms eye India for chip plant
Chennai, September 15 In an informal chat with newspersons here today, Union IT and Communications Minister Dayanidhi Maran said the Centre had, in principle agreed to this first-of-its-kind project, which was expected to cost about $ 3
to 4 billion. He was speaking after inaugurating India’s first ever lead-free Integrated Circuit (IC) plating facility at SPIC Electronics (SPEL) Semiconductor Ltd at its premises in Maraimalainagar, nearly 55 km from here. “We have asked them to come out with a detailed
project structure and the Centre had agreed to partake in the investment on joint venture equity basis”, Mr
Maran added. He said the project, conceived two months ago during the ministers visit to the silicon valley in the US, would be a boon to the semi conductor industry as IC chips could be manufactured to 35 nanometer size, which would be the future in technology development. “We have a similar plant in Hyderabad, but it was a low-end plant, where the chips are of 250 nanometer size”. SPEL Semiconductor Ltd will be investing about $ 10 million to double its capacity and expand its product portfolio with a vision to reach a revenue of $ 100 million USD by 2009-10. “We have drawn a five-year plan to expand our capacity and reach the revenue target,” SPEL vice-chairman told reporters after the inauguration of lead-free IC plating facility at the company complex near Chennai.
— Agencies
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Truck fares shoot up by 10-15 pc
New Delhi, September 15 “While diesel became dearer by Rs 2 per litre on September 6 ,the truck rentals in the Capital went up by Rs 50 to 75,” according to an Indian Foundation of Transport Research and Training (IFTRT) study. In a press statement issued here today, Mr
S.P. Singh, Coordinator, IFTRT, said, “ even though the fuel constituted 65 per cent of the truckers’ operating costs, the price hike had only pushed up costs by Rs 30 to 35.” But when the hike in the diesel price was only 7 per cent, truck rentals had been jacked up 10 to 15 per
cent, he added. This had directly increased the transportation cost of fruit and vegetable retail by five paise per kg, it claimed. However, the neighbouring towns of Ghaziabad, Faridabad and Gurgaon have, in fact, witnessed an even higher jump of 15 to 20 per cent in truck rentals.
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Philips aims at Rs 400-crore revenue
Kolkata, September 15 The company currently earns Rs 250 crore through the export of embedded software solutions, which involves research in
architecture designing and information systems for advanced technological features in consumer products and diagnostics, its Managing Director Mr K. Ramachandran, told reporters on the sidelines of the annual general meeting. Philips will also ramp up the staff strength in embedded software business to 2,500 in the next two years from 1,500 at present, Mr Ramchandran said. Philip’s embedded software is presently being operated from Bangalore and the company is spending $ 50 million for its new premises, which will be operational by the third quarter of 2005.
— UNI
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