New Delhi, January 2
Next month’s union budget will focus on maintaining high growth and give “relief” to sectors under “stress” such as those affected by the rupee appreciation, according to finance minister P Chidambaram.

To address the causes of rupee appreciation Predicts a 9 per cent growth To contain structural bottlenecks and inefficiencies in PDS system To check inflation and food prices

As he prepares his fifth consecutive budget, Chidambaram says he has no no worries other than about some sectors under “stress”, which he would address.

Chidambaram admits that delivery of promised goods and services has not not been satisfactory. But he is of the view that there is enough time for improvement in this area.

Confident of a 9 per cent economic growth in the current fiscal, Chidambaram said: “The thrust of the budget (2008-09) will be to maintain high growth and ensure that the growth process endorses and includes large sections of the people.”

He said: “There is no sector which is worrying me. There are some sectors which are under stress. For example, one reason the rupee appreciation has caused some stress to some sectors. We will address these causes to the extent possible and give them some relief.” His remarks assume significance against the backdrop of the steady rise in the value of the rupee in the last one year touching upto Rs 45 against US dollar in July last year.The commerce ministry estimates that the appreciation could lead to a loss of Rs 53,000 crore to exporters in 2007-08.

Otherwise, the minister felt, all sectors were doing reasonably well in terms of production. “If there is a slow-down in demand in some sectors like housing and real estate, that is a result of a conscious policy to moderate the demand in these sectors.”

Reviewing the performance of the economy in the year that just ended, he predicted a 9 per cent growth of the Indian economy in the current fiscal and dismissed fears that a global depression may affect India.

He said the challenges in the new year were the external financial sector and the food front domestically.

“It has been a good year for the economy despite uncertainty in the external world and some internal difficulties, especially on the food front. The year will return a rate of growth of 9 per cent,” Chidambaram said.

However, the finance minister emphasised that he was not not minimising the challenges ahead. Asked about fears of a global depression affecting the Indian economy, Chidambaram said the most pessimistic outlook has projected a growth of 4.5 per cent to 4.7 per cent in 2008 in world output. “We should not not be affected by the slight dip in the output.”

On the food front, the minister said the government needs to address some structural bottlenecks and the inefficiencies in the system. “There are gross inefficiences in the public distribution system (PDS) in the manner in which we distribute fertiliser subsidies and products such as kerosene and LPG. Some of the inefficiencies are well-known like diversion of items like kerosene in PDS and pilferage. We need to plug the wastages and leakage.”

Talking about inflation, he said the issue was really the food prices. “All other prices are under control. There have been occasional flare ups. We have requested the ministries concerned to do a more rigorous and realistic asssessment of supply and demand met the gaps through import and through adquate supplies in parts of the country where there are inadquate supplies.” — PTI

New Delhi, January 2
In today’s sitting, the Board of Approval (BoA) accorded formal approvals to 24 SEZ proposals, including that of SAIL Salem SEZ in Tamil Nadu, IT/ITES SEZ in Uttar Pradesh of Unitech Hi-tech Projects and Multi Product SEZ in Andhra Pradesh by Indian Farmers Fertilizer Cooperative Limited (IFFCO).

The BoA also accorded ‘in-principal’ nod to four proposals, two each of Vibrant ILFS Consortium and Vibrant Realtors Private Limited in Maharashtra for FTWZ and Multi Services SEZs, respectively.

The BoA also converted ‘in principle’ approval to formal approval for two sector-specific SEZs for engineering and pharma and fine chemicals in Gujarat by Dishman Infrastructure and pharma SEZ in Andhar pradesh by Dr Reddy’s Laboratories.

In today’s meeting, 44 proposals for setting up SEZs, including seven proposals for conversion of in-principle approvals to formal approvals were considered.

Addressing the BoA members, Pillai informed that so far formal approvals have been granted for setting up of 404 SEZs out of which 187 have been notified as on date.

He informed that over Rs 52, 193 crore have been invested in these notified SEZs and that these SEZs are providing direct employment to over 59,356 persons. Employment to over 35, 477 persons have also been provided by the new generation private sector/state government SEZs, which came up prior to the SEZ Act, he said.

This is in addition to the employment provided by the seven central government established SEZs, which is over 1.75 lakh persons, Pillai said.

New Delhi, January 2
Oil and Natural Gas Corp (ONGC) is likely to pay about Rs 17,000 crore this financial year to subsidise petrol, diesel, domestic cooking gas and kerosene.

“During first half of 2007-08 fiscal, we paid Rs 7,448 crore subsidy... for the full year we expect the payout to cross Rs 17,000 crore,” ONGC chairman and managing director R.S. Sharma said.

Under the subsidy sharing mechanism, upstream companies like ONGC, OIL and GAIL bear roughly one-third of the under-realisation on sale of petrol, diesel, domestic cooking gas (LPG) and PDS kerosene. About 42.7 per cent of the under-realisation is borne by the government by way of issue of oil bonds and the rest oil retailers absorb.

Indian Oil, Bharat Petroleum and Hindustan Petroleum are projected to lose Rs 69,753 crore on sale of petrol, diesel, domestic LPG and PDS kerosene as the government has not allowed them to raise prices in line with the price of imported crude.

Petrol is being sold at a loss of Rs 8.74 a litre, diesel at Rs 9.92 per litre, kerosene Rs 20.53 a litre and LPG at a loss of Rs 256.35 per cylinder.

Prime Minister Manmohan Singh has constituted a group of ministers (GoM) headed by external affairs minister Pranab Mukherjee to look into fuel pricing issues.

New Delhi, January 2
Aiming to increase the growth of broadband in the country, telecom regulator TRAI today asked the government to expedite the process of availability of spectrum for third generation (3G) and Wimax services.

In its recommendations on ‘Growth of broadband’ today, the regulator said the government should expedite the decision on TRAI’s recommendations regarding mechanism and pricing of spectrum for 3G and broadband wireless access.

The municipal committees should also be encouraged to include a clause for making multiple dwelling units/ buildings broadband ready by adopting suitable internal wiring while giving clearance for the construction of all such buildings in future, it said.

The government had announced the Broadband Policy in 2004 and fixed a target of nine million broadband subscribers by the end of 2007 and 20 million by 2010.

However, the growth of broadband in the country is very slow and below expected level. With an objective to identify various impediments affecting the growth of broadband and to adopt forward looking approach to address all such problems, TRAI had issued its draft recommendations on ‘Growth of broadband’ in September 2007 and sought the comments of stakeholders.

In its final recommendations, TRAI also said BSNL and MTNL should be encouraged to appoint franchisees for providing broadband services to supplement their efforts and any procedural restrictions/ limitations should be addressed immediately.

It said the government should ensure availability of more number of KU band transponders to roll out broadband services through direct to home platform. Besides this, cable TV operators should be encouraged to provide broadband over their network. — PTI 

New Delhi, January 2
A major US military support provider company set up by an Ohio-based Indian American and his wife in 1984 has been acquired by leading British defence firm BAE Systems for some $ 450 million.

Rajesh K. Soin, who founded Modern Technologies Corp (MTC) with wife Indu Soin in Dayton, Ohio, in 1984, confirmed the deal with BAE Systems — the sixth largest supplier to the US defence department. The Dayton-based NRI was here in connection with dedicating a 55-bed specialty hospital in the name of his father Sukhdev Raj Soin in Banchari village in Haryana's Faridabad district, 80 km from here on the Delhi-Mathura highway.

The acquisition of Nasdaq-listed MTC by BAE Systems is being termed as strategic for the British firm, which is hot on the trail of major military contracts from the US government. MTC provides technical, professional and logistics services to the US defence department and intelligence agencies. The company is rated among the fastest growing US defence technology companies.

Soin is currently the chairman and CEO of MTC. He is probably the only NRI who has a management college - the Raj Soin College of Business — at the Wright State University in Ohio.

BAE Systems will purchase all outstanding shares of MTC at $24 per share and also take over its debt liabilities of over $80 million.

BAE Systems' sales in 2006 exceeded $27 billion. Incidentally, the Indian Air Force (IAF) last month started receiving the first of the 66 BAE Systems Hawk advanced jet trainer (AJT) it has purchased in a deal valued at Rs.80 billion ($2 billion). Twenty-four Hawks will be supplied in flyaway condition and the remaining 42 built under license by state-owned HAL. — IANS

New Delhi, January 2
Market regulator SEBI today ruled out relaxing norms on independent directors for public sector companies, saying corporate governance norms help boost confidence of investors in India Inc.

Contesting the views of ONGC chairman R.S. Sharma that the norms, as contained in the Clause 49 of the listing agreement, come in the way of level-playing field between PSUs and private players, SEBI chairman M Damodaran said they are same for all companies.

Under Clause 49, it is binding upon the listed companies to fill 50 per cent of their boards with independent directors in case they have executive chairman and one-third in case they have non-executive chairman.

“The solution suggested that corporate governance requirement should be less for PSUs is something I cannot persuade myself to agree with,” Damodaran said.

Notwithstanding the difficulties that PSUs face, solution must be found somewhere else and not in diluting corporate governance norms.

The ONGC chairman said the oil navratna was unable to comply with Clause 49 as it requires government approval, which takes a long time. — PTI

Shimla, January 2
The National Bank for Agriculture and Rural Development (NABARD) has sanctioned a loan of Rs 18.76 crore to the state government for execution of 19 minor irrigation projects and 15 rural drinking water supply schemes.

The assistance has been granted under the Rural Infrastructure Development Fund (RIDF) under which the cumulative sanctions have touched Rs 1,690 crore.

The schemes include 12 flow irrigation, five lift irrigation and two deep tubewell schemes in Bilaspur, Kangra, Kullu, Mandi, Shimla, Sirmaur and Solan districts. On completion, these schemes will provide irrigation to 734.77 hectares of land. The 15 drinking water supply schemes will benefit a population of 47,268 in Chamba, Bilaspur, Kangra, Kullu, Mandi, Shimla and Una districts.

In all, the bank has sanctioned 1,272 irrigation projects, 510 rural road projects, 118 watershed development schemes and 339 drinking water supply schemes. Besides, it had also provided funds for construction of 1,213 primary school buildings, 64 science laboratories in schools, 25 information technology projects and 19 veterinary hospitals.

The total sanctions during the current financial year so far amount to Rs 177 crore out of which Rs 146.82 has already been released.

Chennai, January 2
The Tamil Nadu government today directed the cement industry to reduce the price, failing which it will be forced to nationalise all cement factories in the state.

A high-level meeting chaired by Chief Minister M. Karunanidhi today decided to import 100,000 tonnes of cement and decided to distribute it through the state-owned Tamil Nadu civil supplies corporation at cost price to combat the soaring cement prices.

The government warned, “If even after all these steps, private cement manufacturers fail to bring down the price of cement, the government will have no alternative but to take steps to nationalise all cement factories in Tamil Nadu in the public interest.”

The government said that the Tamil Nadu Cement Corporation (TANCEM), through the Minerals and Metals Trading Corporation (MMTC), would issue a global tender to import cement if the need arose.

The import will to a large extent help the state government to solve the problem of the present shortage and bring down cement prices.

At present, according to the cement industry sources here, cement was being sold between Rs 260 and Rs 270 per bag of 50 kgs instead of around Rs 200 in March after the union budget. With sand selling at Rs 30 a cubic feet and other factors like rising labour prices taken into account the construction industry has been badly hit and contractors are finding it difficult to stick to their original cost quotations.

However, the sources said the state government’s proposed move to takeover cement factories would not be legally tenable as cement was fully decontrolled in 1989 by the central government.

They also pointed out that import was practically not possible as ports in Tamil Nadu were not equipped to handle such huge quantities and if imported through major ports in other states like Kandla in Gujarat it would not be cost effective keeping in mind the transportation costs.

New Delhi, January 2
The Rs 117-billion ($2.97 billion) Reliance Power IPO will be launched in mid January. The IPO will offer 260 million shares to the investors at a price band of Rs 405-450 . The company will, for the first time, give retail investors a staggered payment facility in an IPO that will enable him to make a payment in two-three parts after the allotment.

Sources say a staggered payment facility is aimed at getting more investors to invest in the IPO besides giving the individual a facility to apply for the IPO and make full payment only when the shares are alloted.

At present, the SEBI rules allow an individual to invest only Rs 1 lakh in an IPO, but in most cases a small investor does not have enough money to make full payment while applying for the shares. Staggered payment facility is aimed at such investors. — TNS