Mumbai, November 9
The RBI has revised the guidelines on lending to the priority sector, which would now broadly comprise agriculture, small-scale industries, small business/service enterprises, micro-credit, education loans and housing loans.

Under the new guidelines, the priority sector lending target and sub-targets for all banks would now be linked to Adjusted Net Bank Credit (ANBC-Net Bank Credit plus investments made by banks in non-SLR bonds held in HTM category) or credit equivalent of off-balance sheet exposures, whichever is higher, as on March 31 of the previous year.

For this purpose, outstanding FCNR (B) and NRNR deposits balances will no longer be deducted for computation of net bank credit for priority sector lending purposes.

In order to encourage banks to increasingly lend directly to the priority sector borrowers, the banks' deposits placed with Nabard/Sidbi on account of non-achievement of priority sector lending targets would not be eligible for classification as indirect finance to agriculture/SSI, as the case may be, the RBI said.

These guidelines also take into account the revised definition of small and micro enterprises as per the Micro, Small and Medium Enterprises Development Act, 2006.

As per the guidelines, the total priority sector advances for domestic commercial banks would be 40 per cent of ANBC or credit equivalent of off-balance sheet exposures, whichever is higher while for foreign banks it is 32 per cent. Out of this, 18 per cent would be for total agricultural advances for domestic commercial banks.

The advances to SSI would be included in computing performance under the overall priority sector target of 40 per cent for domestic commercial banks while for foreign banks it would be 10 per cent of ANBC or credit-equivalent amount of off-balance sheet exposures, whichever is higher.

While export credit will not be a part of priority sector for domestic banks, foreign banks have a target of 12 per cent for the sector. Advances to weaker sections and differential rate of interest (DRI) scheme will have the target of 10 per cent and 1 per cent, respectively for domestic banks. — PTI

New Delhi, November 9
Despite a record sugarcane production in the country, the Finance Ministry is against its export as it could trigger inflationary trends in the country.

India's sugar production in the season that began in October would likely reach 22.7 million tonnes, up from about 19 million tonnes in the last season.

Agriculture Minister Sharad Pawar has been pitching for sugar export by lifting the ban in place till December end. However, Finance Minister P Chidambaram seems to hold contrary views. He said, “sugar prices are still high especially in North India.”

Mr Chidambaram had opposed Rs 100 hike in MSP for wheat and was in favour of the lower price suggested by CACP.

Finance Ministry officials sugar export and hike in MSP could trigger inflationary trends in the economy, touching all-time high of 5.41 per cent in 2006

India banned sugar exports in July to help check inflation as prices soared, and said the restriction would last until the end of the financial year in March. But, traders have been clamouring for the ban to be lifted so that they can capitalise on favourable global sugar prices and the retail prices are varying from Rs 21 to 25 per kg in the National Capital.

Trade officials say India has the potential to export 2 million tonnes of sugar in the new season to September.

The government is already facing flak from the Left parties on the unprecedented hike in the prices of essential commodities like pulses, petrol, diesel, wheat, and vegetables.

RBI Governor, while announcing the mid-term credit policy, had warned that due to continuing supply constraints of the edible commodities in the domestic and global market, there would be pressure on inflation.

The Finance Ministry is trying to work out fiscal measures to curb the rising prices.

The Cabinet Committee on Prices today deferred to take any decision on sugar export amidst differences within different ministries.

The UPA leaders also discussed the possible political ramification of lifting the ban on sugar export in view of the scheduled Assembly polls in Uttar Pradesh, a major sugarcane producer after Maharashtra.

Paris, November 9
Automaker Mahindra and Mahindra and France's Renault today announced plans to set up a greenfield car manufacturing plant in India, a venture in which Japanese auto major Nissan Motor Co may also join after it ended talks with compatriot Suzuki.

The new Mahindra-Renault joint venture would be export-oriented and extends their existing partnership to build variants of the French firm's low-cost sedan, Logan.

The greenfield facility for which sites are understood to have been identified in Maharashtra and Tamil Nadu would have an initial capacity of 300,000 cars by 2009 and 500,000 within five years.

The new plant would function parallel to their existing JV formed last year for launching Logan. The investment in the existing JV for manufacturing 50,000 Logan cars from M&M's Nashik plant is Rs 700 crore.

While M&M had a 51 per cent stake in the existing JV and Renault the remaining 49 per cent, the two partners would have a 50 per cent stake each in the new venture.

Renault CEO Carlos Ghosn said the partnership could derive further strength from Japanese carmaker Nissan, who might join the venture.

M&M Managing Director Anand Mahindra, who is slated to head the new Mahindra-Renault JV, also said Nissan might join the venture

Nissan announced today it had terminated talks with Suzuki Motor Corp to set up a manufacturing plant in India as it was in discussions with Renault and Mahindra & Mahindra.

If Nissan joins the Mahindra-Renault, then the capacity of the new plant could go up to about 800,000 cars per year by 2012, an M&M official said.

Renault President and CEO Carlos Ghosn said it planned to bring six variants of the Logan, but did not elaborate.

Mr Goenka, however, said the L90 and R90 - a seven-seater multi-purpose vehicle (MPV) - were in the pipeline.

Renault has some exciting products in their lineup including Twingo, Clio and Modus. Its Megane and Laguna are positioned in the upper-end of the car market. — PTI

Chandigarh, November 9
It may set surprise bells ringing, but mobile phones have dialled up new enthusiasm in the tourism and hospitality industry in Chandigarh and Punjab with corporate business flowing in. Rough estimates peg the increase at 33 per cent ever since the skies opened up.

Hoteliers and organisers of a three-day convention by the Federation of Hotel and Restaurant Associations of India believe that all routes to this part of the region have remained practically busy with cell phones allowing for out-of-sight elites and corporate honchos to keep in touch with their offices even while travelling.

The organisers add that as a result the business has improved tremendously. They assert that better air connectivity and the finalisation of mega projects in Mohali and other cities located in Chandigarh’s vicinity is all that is now required to ring in a revolution in the hotel industry here.

The three-day convention starting from tomorrow at Hotel Mountview here aims at projecting Chandigarh as “Destination Next”. Over 800 delegates from across the country are expected to attend it. The Tribune is the media sponsor of the event.

Co-chairman of the Convention Organising Committee Man Mohan Singh Kohli says the profile of the tourists have changed from general to more specific and elite with the open-sky policy. "Earlier, we had people from all walks of life coming to the city for sight-seeing, capital-related business activities and even for treatment at the PGIMER. But now, mobile phones and Shatabdi Express have brought even the corporate bosses to the city. In the process, these have given a boost to the industry”, he said.

He asserts that the business will further improve once commercial and residential mega projects are transformed into reality.

Mr Kohli says economic development in this part of the region is likely to bring in real estate companies into the hotel business. But, there will be no saturation as each unit will create need for itself.

“For meeting the challenge, the hotels existing in the downtown will have to improve their food and beverages arm by opening up round-the-clock fast-food joints and eating houses. The owners should realise that the life of stand-alone restaurants is about to end.”

To compete with the brand names in the hotel line like Café Coffee Day and Barista, the hoteliers will either have to set up their own chains or better still go in for co-branding.

Upgradation from budget to business hotels will also be necessary to house corporate bosses and conferences, says Mr Surinderjit Singh, another hotelier with ventures in Jalandhar and Chandigarh.

New Delhi, November 9
Bajaj Auto Ltd today announced entry into the Indonesian market with the launch of its 180 cc Pulsar DTS-i motorcycle. "Our entry into Indonesia is part of our global plans to help us move from the 4th largest two-wheeler manufacturer in the world to the 3rd largest manufacturer," Bajaj Auto Ltd Executive Director Sanjiv Bajaj said.— PTI

New Delhi, November 9
Ahead of India’s efforts to enter into a free trade agreement with the European Union, Commerce and Industry Minister Kamal Nath is currently in Brussels to dispel doubts about India’s growing strength in the world economy.

India’s economic engagement with the world during the current financial year 2006-07 will exceed $450 billion, if export and import of goods as well as services are combined. Meanwhile, merchandise exports from country are expected to cross $125 billion during the current fiscal, said Mr Kamal Nath while addressing a business conference in Brussels last evening.

“Exports are growing at a healthy growth averaging 25 per cent per annum over the past three years. We crossed $100 billion threshold last year, and during the current year we are poised to export $125 billion worth of goods and $75 billion worth of services. Our imports, too, have risen commensurately”, he said.

Underlining India’s position as the newly emerging power, both in services and manufacturing, Mr Nath said: “The service sector-which now makes up 54 per cent of the economy, contributed more than half the total growth in the economy in the 1990s. But, we are also now among the world’s most competitive producers of steel, automotive components, pharmaceuticals and chemicals offering an unbeatable combination of low cost and high value. India is now emerging as a hub for mission-critical R&D for a range of industries - from life sciences to hardware and engineering.”

India and the European Union (EU), he said, were today in a deep and abiding partnership, with trade and economic relations, providing solid foundation on which this partnership stands.

Mumbai, November 9
Tata Consultancy Services Ltd (TCS) said today it had bagged a contract worth Rs 402 crore from Australia-based Qantas to provide a range of IT application, transformation and maintenance services.

Under the contract, the company would assume full responsibility for more than 75 per cent of the total scope of Applications Services and Transformation (AST) outsourcing programme of Qantas and provide support to all its key IT applications for airport operations and commercial systems.

TCS CEO and Managing Director S. Ramadorai said that TCS would be the lead partner for the transition phase of the entire Qantas AST programme, overseeing activities of many of Qantas internal and external groups involved in IT systems support and maintenance.

Satyam Computer Services has signed a seven-year contract worth Rs 243.19 crore with Australian airline Qantas for providing IT application services.

The agreement covers application development and maintenance services for over 150 applications across a wide portfolio of technologies, the IT major said.

"We are very proud to partner with Qantas, Australia's leading airline, as one of their global service providers and we look forward to leverage our global expertise towards achieving Qantas goals and objectives," Satyam's co-founder and Chief Executive Officer Rama Raju said. — PTI

Mumbai, November 9
Mukesh Ambani group flagship Reliance Industries Ltd (RIL) today said it would raise $2 billion through issue of bonds in the international markets.

The Board of Directors approved a proposal for raising $2 billion (about Rs 9,000 crore), RIL informed the BSE.

The funds could be raised by way of syndicated loan, Foreign Currency Convertible Bonds or any other combination, subject to requisite approvals, it said. — PTI