New Delhi, December 19
Buoyed by strong manufacturing growth, India’s economy grew at an annual rate of 9.1 per cent in the six months up to September, according to a Mid-Year Review tabled in Parliament today.

However, the review expressed concern on the sluggish agricultural growth and emphasised the need for separation of price support to farmers and procurement by the state and subsidy to poor citizens. It also called for reduction in cost of procurement, storage and distribution.

The review said industry grew at 10.9 per cent during the half-year period and services saw a healthy 10.7 per cent increase.

However, the report raised concerns about possible overheating of the economy and said maintaining macroeconomic stability was key to promoting investment and growth.

"Indeed there is need for continuous caution in maintaining macroeconomic stability to support the pick up in investment and growth on an enduring basis. This is particularly so in the current conjuncture with large global macroeconomic imbalances and uncertainty in currency markets," it said.

Though the combination of high economic growth and slow creeping up of inflation in manufactured products has "generated" some concerns, there was no cause for alarm in regard to crucial parameters, the report argued.

Major growth in the manufacturing was in the capital intensive sub-sector, the review carried out by the Ministry of Finance, said and emphasised the need for reforms in the labour legislation and regulatory framework in different sectors, particularly mining.

It said there was a need for "a review of the flexibility or lack thereof in the current labour legislations." The review also said the regulatory reforms of the mining sector continued to remain an unfinished agenda.

It said the buoyancy in the economy has been amply supported by a vibrant external sector that saw engineering goods emerging as the biggest foreign exchange earner, as exports grew by a healthy 34.9 per cent in the first seven months of this fiscal to $69.5 billion.

"By sustaining a high growth of 38.8 per cent and reaching $10.5 billion in the first five months of this fiscal, engineering goods has emerged as the largest contributor to merchandise exports," it said.

The discovery of natural gas in Krishna Godavari basin off the East Coast will help cut the country's increasing import dependence for hydrocarbons, the review said.

India's crude oil production of about 33 million tonnes barely meets one-third demand, while natural gas availability of 90 million standard cubic metres satisfies only half the requirement.

On the disappointing performance of the agricultural sector, which grew by only 2.6 per cent in the first six months of current financial year, the review said the minimum support price (MSP) mechanism has not delivered the desired results and failed to discover the market price.

It called for rapid movements with regard to principle of "user pays" to promote investment in the weak infrastructure sector.

Pegging the investment need at $320 billion in infrastructure during the 11th Five Year Plan, the review expressed concern over problems of shortages of electricity and water supply.

It said the huge amount of investment required for funding infrastructure projects is to be raised through a combination of public investment, public-private partnership and exclusive private investments.

London, December 19
The UK Takeover Panel today stepped into the high-voltage drama over the acquisition of Corus, setting a January 30 deadline for revised offers from its two suitors, after which the Anglo-Dutch steel-maker could come under the hammer.

The British regulatory body today asked the two bidders — India's Tata Steel and Brazil's CSN — to announce their revised offers by January 30, while saying that an auction could be considered if the "competitive situation continues to exist shortly before" the deadline

Currently, both bidders are entitled to revise their offers and the terms of the auction, if required, would be set by the panel, the regulator said.

Each of the parties has accepted the ruling, it said.

Following the panel's decision, Corus said it expected the competitive situation to be resolved, at the latest, on or shortly after the deadline.

Corus has separately decided to adjourn its extraordinary general meeting scheduled for tomorrow to a later date.

Meanwhile, banking sources said no decision had been taken so far by Tata Steel, which is mulling over all possible options.

When asked whether CSN would match in case Tata revises its offer further, a spokesperson for the Brazilian firm said that the company could not "comment on what it might do in hypothetical situations." However, banking sources said the Latin American company was in talks with its financiers and advisers in case it needed more funds to close the deal. — PTI 

New Delhi, December 19
Honda Motor President and CEO Takeo Fukui announced today the company would launch a small car in India.

In his year-end address in Tokyo, Mr Fukui said the company was aiming to produce and sell more than 1,50,000 cars in India annually by the end of 2010.

This is the first time Mr Fukui has officially announced that the company would join the big-volume small car bandwagon in India.

Honda, which is currently doubling capacity at its Greater Noida plant to 1,00,000 units at an investment of Rs 400 crore, is also scouting for a location for a new greenfield plant, possibly to be used for the small car.

Honda has a partnership with the Shrirams in India though it holds around 99 per cent in joint venture Honda Siel Cars India. — PTI 

Amritsar, December 19
With poll in mind, the government is likely to roll back its decision on the acquisition of prime agricultural land for the proposed special economic zone (SEZ). The much-touted Prime Minister's ambitious SEZ project stands virtually cancelled as the government has decided to back out of the MoU signed with DLF.

The business community here is shocked at the government's dilly-dallying attitude over the setting up of SEZ. They are expected to take up the SEZ issue with the Prime Minister during his visit tomorrow.

The Principal Secretary, Industries, Punjab, Mr S.C. Aggarwal, talking to The Tribune on phone said today that project has not been scrapped but the government was having second thoughts on the issue of acquiring land from the private developers. He, however, added that the private developers would have to scout for the land themselves for the SEZ.

The Chairman of CII, Amritsar zone, Mr Gunbir Singh, described the decision of the government as most unfortunate and said it was a major retrograde step, which would hamper the growth of the industry of the holy city. He said the government must immediately review its decision to instill a sense of confidence among the industrialists of this region. He felt that the government should come out with a alternative, wherein it should plan a multi-product SEZ at a suitable location in the periphery of city.

Mr Brij Bedi, an industrialist and a social activist, said the Prime Minister must announce the setting up of a textile park to upgrade textile industry in this border district. He said Amritsar was a major hub of textile industry for almost a century and needed a push the growth of industry.

Lamenting the dismal condition of the industrial area and focal points, Mr Bedi suggested the setting up of a nodal agency to look after the upkeep of the business hub, which not only generates employment but also contributes a lot to revenue of the state and central exchequer.

New Delhi, December 19
Global financer George Soros today cautioned India against going for full rupee convertability because the economy is showing signs of overheating.

Mr Soros, in reply to a question whether India should have full capital account convertibility of the rupee at this moment said “No, I don’t think so.”

India should be careful of capital inflows, he said. But, the country should make rules conducive to attract FDI, Mr Soros said, adding that he faced many hassles when he wanted to invest in India 12 years ago.

"You are in a booming economy, it is the role of the authorities to prevent the boom from getting excessive to avoid overheating," Mr Soros said at a function organised by FICCI.

He, however, said capital controls were effective only at the time of crisis and could not be a perfect arrangement.

An RBI-appointed panel of experts has recommended a five-year roadmap to make the currency fully convertible and the government is considering its implementation.

India's rupee is only partially convertible, meaning that most capital account transactions — investment money flowing in and out of the country — are subject to approval by the central bank.

Mr Soros congratulated India for its civilian nuclear deal with the US. "India's nuclear cooperation with the US is a major step toward economic growth.

The Budapest-born 76-year-old investor, who founded the Open Society Institute, also warned India that it must not get carried away with its "rapid economic development" and neglect serious issues like global warming.

He dwelt on his theory of reflexivity, which has guided him both in making money and in giving money away. The generally accepted theory is that financial markets tend towards equilibrium, and on the whole, discount the future correctly.

"I operate using a different theory, according to which financial markets cannot possibly discount the future correctly because they do not merely discount the future; they help to shape it. In certain circumstances, financial markets can affect the so-called fundamentals, which they are supposed to reflect,” he said.

New Delhi, December 19
Reliance Industries Ltd has discovered huge oil reserves in its gas-rich D6 block in the Krishna Godavari basin off the east coast, Niko Resources of Canada has said.

"The MA-2 well has encountered the thickest hydrocarbon column discovered to date in D6," Niko Resources said. Niko Resources has 10 per cent interest in the block KG-DWN-98/3, also known as D6. Reliance is the operator of the block with 90 per cent interest.

MA-2 is located approximately 2-km from the previous MA-1 oil discovery well.

The MA-1 well in June, 2006, reached a total depth of 3,783 metres and hit 26 metres of net oil pay and 72 metres of net gas pay.

Reliance has till date made about 12 gas discoveries in D6 and put combined reserves in the block at around 50 trillion cubic feet (Tcf). MA-2 is the second oil discovery on D6 after MA-1. — PTI 

New Delhi, December 19
Textile industry has sought extension of interest subsidy scheme for five more years so that the modernisation of the sector could continue at the existing pace.

“Even though the Technology Upgradation Fund Scheme (TUFS) was launched in 1999, it has been only one year that the scheme started to yield any results. It would be too early stop it now,” CITI Chairman Shekhar Agarwal said.

The scheme is ending in March 2007, and the government is unlikely to extend it further.

Initially, not many units had come forward to avail of its benefits but after the phasing out of the quota regime in the world textile trade, the number of applicants under the scheme has gone up substantially.

In fact, this years budgeted subsidy under the scheme has already been exhausted.

From a level of less than Rs 1,500 crore per year some three years back, investment in textiles availing TUFS has grown to Rs 15,000 crore per year and is likely to touch Rs 30,000 crore this year, CITI said.

The industry body said continuation of the scheme would help in meeting the investment required by the sector, which is expected to be Rs 1,94,000 crore during 2007-12. — PTI

Ahmedabad, December 19
ICICI Bank today launched an 'Easy Receive Account' for resident Indians who receive remittances from abroad. ''The product will be available throughout India with focus on Gujarat, Punjab and Kerala for their large NRI remittances,'' said Mr Anup Bagchi, Senior General Manager, International Retail Product Group (IRPG) of ICICI Bank.

The account holder need not have a minimum balance (though one remittance in a quarter is required) and cash withdrawal from any ATM is Rs 50,000. — UNI

London, December 19
The London Stock Exchange (LSE) today described a hostile takeover bid by US stock exchange operator Nasdaq as "wholly inadequate" and called on its shareholders to reject the offer worth £2.9 billion.

A week ago, Nasdaq had formally launched its hostile bid for the LSE, setting shareholders a deadline of January 11 to accept the offer.

Delivering a formal response today, the LSE Board said the approach failed to reflect the business' "powerful earnings".

Chairman Chris Gibson-Smith added: "For the second time this year, Nasdaq is offering a wholly inadequate price for the company and shareholders should reject the offer."

The LSE has fended off four takeover attempts in the past two years, including an initial £2.4 billion offer from Nasdaq in March.

Nasdaq, which is dominated by US technology listings, including online search engine Google, returned with an informal offer worth £2.9 billion in November, but this was also rejected by the Board of Europe's biggest stock market.

The US technology-weighted exchange, which has built up a 28.75 per cent stake in the LSE, is offering 1,243 pence per share for the remaining 71.25 per cent.

Excluding LSE's debt, the deal is worth £2.7 billion. —AFP