Petrol price hike by month-end, says oil secy
But Deora non-committal
Mumbai, January 8
The government is likely to raise prices of petroleum products by the end of this month to help oil firms partly offset losses on selling fuel below cost in the wake of international crude prices touching $ 100 a barrel.

New Delhi, January 8
Planning Commission Deputy Chairperson Montek Singh Ahluwalia today urged the NRIs to invest in a big way in health care and education, especially primary education.

“Investment in the health sector apart from rendering service to the humanity was also profitable,” Ahuluwalia said addressing the NRIs participating in a session at the two-day Pravasi Bhartiya Divas.

He also sought similar participation in the area of education, especially primary education, which he said, left much to be desired.

Ahluwalia said the reform process had taken deep roots and the country was bearing the fruits of the actions taken since the policy of liberalisation was launched in 1991.

The economy will clock a growth rate of nearly 9 per cent this fiscal and the 11th plan target has been set at 9 per cent plus annual growth.

Nevertheless, he added, the country did not fare too favourably on social indicators and the government will expand its role in that sector, and withdraw from some others.

He said the perception that the government was withdrawing from areas like health and education was incorrect as the fact was that its role in the coming year would be enhanced.

Chairing the session, Member of Knowledge Commission Deepak Nayyer said high growth would cease to have any meaning if it was not inclusive, which should entail larger investment in social services.

Addressing a session on Investment and Infrastructure, Information and Broadcasting Minister Priya Ranjan Dasmunsi said the country’s growth momentum has thrown a window of opportunity for the investors, including NRIs, to invest in whole array of sectors, especially in Infrastructure.

“If the Indian economy is to maintain its current growth momentum of 9 per cent plus per annum, it must eradicate existing gaps in transport, communications and power, and lower transaction costs to become globally competitive,” he said urging the NRIs to play a leading role in developing the country’s infrastructure.

While saying the government was working on internal reforms to attract Foreign Direct Investment (FDI), Dasmunshi said it was actively considering increasing the cap of FDI in print media from the existing 26 per cent.

Malaysian Minister of Works S Samy Vellu said his country is prepared to invest in the creation of a super highway of India. “We will be able to invest 70 per cent of the cost... This is private sector investment that we can mobilise from Malaysia with a strong support of the government of Malaysia,” he said.

Vellu also highlighted Malaysia’s expertise in construction, especially developing new townships and comprehensive housing including the building of low cost and affordable houses.

New Delhi, January 8
In a kick-start to the budget making process the Finance Minister today held a meeting with industry chambers and the captains of various industries. The industry representatives on their part asked the government to cut personal and corporate tax rates in the coming budget.

The industry has suggested that peak income tax rates should be reduced to 25 percent from the current 30 percent.

The industry has suggested incentives for services sector, tax holidays for acquisitions abroad and imposition of taxes on Chinese-made products.

“The peak income tax rate should be reduced to 25 per cent from 30 per cent and should be levied on more than Rs 5 lakh. Corporate tax rate should be retained at 30 per cent but 10 per cent surcharge on it should be withdrawn,” Assocham president Venugopal N Dhoot said.

The industry placed these demands with the view that these steps were necessary to spur consumption and investment level - key to sustaining economic expansion. Industry sources also said that there were concerns about the demand of products and necessary steps needed to be taken in the coming budget to facilitate growth and keep the momentum going.

The industry also expressed concerns as regards the competition from Chinese products that are flooding the India market and suggested that a 35 per cent import duty on Chinese products should be applied. The idea behind imposition of such duties was also to offset rupee’s appreciation against the yuan, which was in turn making Chinese imports cheaper and making Indian goods dearer in the domestic market.

Although the industry wanted FM to impose 35 per cent import duty on Chinese products, sources quoted Finance Minister P Chidambaram as saying that that rupee appreciation has not been much in terms of real effective exchange rate.

The industry also suggested that more incentive needed to be given for service-based industry as these were the drivers of growth. Sources said Chidambaram was of the view that industry and services sector need to sustain high growth rates, as 4 per cent growth in agriculture alone would not help achieve 9-10 per cent economic growth.

On his part the minister felt that though there were reports of a dip in exports due to rupee appreciation, tax collections did not corroborate this and hence he would have to study the proposal in greater detail if tax on Chinese goods need to be imposed.

The chambers also suggested tax concessions for India Inc making acquisitions abroad.

The pharma industry asked the Finance Minister to expand the scope of tax rebate to third party R&D activities instead of just in-house activities.C

hidambaram is also understood to have said that curbing inflation was a major concern, but the government does not have entire control over crude, food and commodity prices.

Industry players also wanted reduction in excise duty, removal of fringe benefit tax on business promotion expenses, retaining customs duty at 10 per cent and extension of tax benefits for IT sector beyond 2009.

Dhoot also wanted another package for exporters. He said since banks have not reduced lending rates by 50 basis points, as requested by Chidambaram, banks should be given some kind of “help” to go for interest rates cut.

Meanwhile, the Indian automotive industry today asked the government to take steps for rationalising interest rates and stimulate consumption level.

Mumbai, January 8
The government is likely to raise prices of petroleum products by the end of this month to help oil firms partly offset losses on selling fuel below cost in the wake of international crude prices touching $ 100 a barrel.

“When crude prices are going up, how can you expect petrol prices to go down? A marginal hike in the price of petroleum products appears unavoidable. It is on the cards,” Petroleum Secretary M S Srinivasan told reporters here.

Srinivasan said a Group of Ministers (GoM) is meeting on January 17 in New Delhi to deliberate on the issue and its recommendations would go to the Cabinet for final approval.

“All these will take time... the hike is likely to be effected by the end of the month,” Srinivasan said.

Petroleum Minister Murli Deora, however, remained non-committal on the issue. “The GOM, under the chairmanship of External Affairs Minister Pranab Mukherjee, will deliberate on the issue in Delhi. I don’t have any comment to offer.”

Justifying a hike in petroleum products, Srinivasan said total under-recoveries of state-run oil marketing firms such as IOC, BPCL and HPCL stand at Rs 72,000 crore.

“The under-recovery for petrol currently stands at Rs 10 per litre, Rs 9 per litre of diesel, for kerosene it is Rs 19 per litre and for LPG, the under-recovery is Rs 320 per cylinder,” he said. — PTI

New Delhi, January 8
It is the small car market in India that has now caught the attention of all the major auto players. With a very strong middle-class, majority of whom still prefer travelling by a two-wheeler than an expensive car, the auto-makers are looking at exploiting this segment with a slew of cars ranged just above the high-end two-wheelers.

As the Auto-Expo 08 gets underway here from January 10, the focus would be on the offering of small cars. While there is a lot of excitement over the unveiling of the “peoples car” by the Tatas on the opening day itself, two more automakers have announced their intention of entering this segment.

At a press conference here today country’s second largest bike maker Bajaj Auto Ltd (BAL) unveiled its concept passenger car and a light commercial vehicle for the Indian market.

Bajaj Auto expects to launch its small car in the next four years in partnership with Renault and Nissan.

The car is likely to be priced at around $3,000 (Rs 117,000).

Ford India has also announced its plans to capture the small car segment.

BAL is developing both diesel and petrol engines. BAL would also be setting up in Chakan, a new manufacturing unit that will in all probability manufacture the small car and light commercial vehicle.

The initial installed capacity will be 250,000 units and the company will look at exporting the car, BAL managing director Rajiv Bajaj said. Bajaj also said it will launch three two-wheelers in the executive and premium segment during 2008. The company would launch two motorcycles-XCD 125 cc DTS-i Sprint and Discover 150 cc DTS-i-and one scooter 125 cc Blade within this year.

While the main attraction would be the Tatas one-lakh car, Auto-Expo is expected to see at least 25 new launches in all segments with the country’s largest cat manufacturer Maruti Suzuki India Limited (MSIL) unveiling its new concept car,. It would also put on show for the first time Suzuti Splash and the Swift Sedan, which would replace the just-phased out Esteem.

Staying with the small car theme is also the Czech-car maker Skoda. Now part of the Volks Wagon group, Skoda would be launching its hot hatch back Fabia by which it plans to give competition to the likes of swift and UVA.

Fiat India would also be showing off its small cars in Grande Punto and Linea besides bringing in Cinquecento and the Bravo as CBUs.

On the whole the Auto-Expo 2008 is expected to see participation from almost 2000 companies both big and small and both the car manufacturing and auto parts manufacturing segments.

There are expected to be four global launches including the one from MSIL and more than 25 delegations from abroad including France, Brazil, Korea and Japan. 

Chennai, January 8
Automobile giant Ford has now joined the bandwagon to manufacture small cars in India in the next two years to capitalise on the expanding segment in the country.

President and MD, Ford India, Arvind Mathew, also announced here today the company’s plans to invest $500 million to expand its India operations, which would make Ford’s total investment in India to $875 million.

After Chevrolet and Hyundai, Ford will be the third foreign car manufacturer to launch a small car in India.

He said the fresh investments would fund several new initiatives, including the expansion of Ford India’s current manufacturing facility on the outskirts of this city to begin production of the new small car within the next two years.

The construction of the fully integrated and flexible engine manufacturing plant for the small car will go online by 2010. However, details of the small car including its pricing will be finalised later.

Mathew said, “Our investment plan clearly signals Ford’s intent to implement an aggressive and comprehensive growth strategy for the India market.”

The overall investment plan for India has already commenced, and will be implemented in phases over the next three years. The first phase currently underway includes the addition of a diesel engine assembly plant at the Chennai site that will have an initial annual capacity of 50,000 units.

With the production of the small car within the next two years, Ford’s overall annual production at the expanded plant will be 200,000 units by 2010. 

New Delhi, January 8
Hit by supply constraints, infrastructure industries put up a dismal performance in November 2007 - a month that saw growth plummeting to 5.3 per cent from 9.6 per cent a year ago - with crude petroleum becoming the weakest link among the key sectors.

Impacted by sluggish increase in output since September, the cumulative expansion for the April-November period of the current fiscal also declined to 6 per cent as compared to 8.9 per cent in the corresponding months of FY’07.

Crude petroleum, petroleum refinery products, coal, electricity, cement and finished carbon steel form the core infrastructure industries group, accounting for 26.7 per cent weightage in the overall Index of Industrial Production (IIP).

Crude petroleum came out with the worst performance among all these sectors managing a paltry growth of 0.3 per cent in November against a healthy 9.8 per cent in the same month last year. In fact, except coal, growth in all other industries registered a decline during the month.

Petroleum refinery could grow by a mere 5.2 per cent as compared to 16.4 per cent in the year ago period.

Electricity generation also dipped to 5.8 per cent from 8.8 per cent, while cement production grew by 4.5 per cent, declining from 11.8 per cent in November 2006. Finished carbon steel registered a growth of 5.8 per cent in November 2007 as compared to 9.3 per cent in the year ago period.

However, coal production grew by 7.7 per cent in November 2007 from 4.9 per cent in the same month of 2006.

For the April-November period of 2007-08, all the six infrastructure industries registered a decline in growth. While crude petroleum grew by a meagre 0.6 per cent during the eight months as compared to 5.4 per cent, growth in petroleum refinery declined to 8.3 per cent from 13.5 per cent in April-November 2006-07.

Coal and Electricity registered a minor decline in growth to 4.3 per cent and 7 per cent from 4.8 per cent and 7.3 per cent, respectively.

Growth in cement production stood at 7.6 per cent during April-November 2007-08 as compared to 10.6 per cent during the same period of 2006-07. — PTI

New Delhi, January 8
Prime Minister Manmohan Singh has constituted a high-powered group under the chairmanship of V. Krishnamurty, chairperson of National Manufacturing Competitiveness Council (NMCC) for suggesting various measures to ensure the continuing growth of the manufacturing sector in the country, which of late is showing signs of deceleration.

The Finance, Revenue, Commerce, Textiles and Industrial Policy and Promotion Secretaries, Government of India, as well as the Members Secretary of NMCC are the other members of the committee.

The terms of reference of the group include, suggesting policy measures and a continuing mechanism to ensure sustained growth of the Indian manufacturing industries for the next 10-15 years, to suggest policy measures and immediate steps to reverse the recent deceleration in the growth of the manufacturing industries.

The group would also suggest policy measures and immediate steps to boost exports of Indian manufactured goods in the face of appreciation of the rupee and high interest rates, particularly with respect to labour intensive sectors like textiles, leather and handicrafts; and to suggest policy measures to leverage FDI to modernise manufacturing in India and create a strong technological base.

The group is required to submit its report and final recommendations within 3 months.

The first meeting of the group has been scheduled by the Chairman, NMCC on January 11.

New Delhi, January 8
Come February 8 and Air India would become the first Indian airlines to offer direct flight to New York with the flight time reduced to 15 hours.

Air India would also be the first Indian carrier to link up Delhi with JFK airport with its newly acquired state-of-the-art Boeing 777-200LR (longe range).

Air India had, earlier in August last, commenced its non-stop Mumbai-New York flight, which, according to company official, has been quite a success.

Air India would also be offering a special inaugural price with the economy class return ticket pegged at almost Rs 45,000, inclusive of taxes and surcharge. The offer would be valid for tickets booked before January 31.

Air India officials said the 238-seater aircraft would have eight seats in first class, 35 seats in executive class and 195 seats in economy class. The flight will depart from Delhi at12.30 am (local time) and arrive at the JFK at 5.45 am (local time). It would depart JFK at 4 pm arriving Delhi at 4.30 pm (local time) next day. 

New Delhi, January 8
The stage is set for issuance of letters of intent to companies aspiring to start mobile services with communication minister A Raja giving his approval to begin the process of awarding licences.

As part of it, the aspirants can be issued letters of intent (LoIs) any time as the Department of Telecom has almost completed scrutiny of all applications received till September 25 last year, sources in DoT said on condition of anonymity.

About 26 firms, including Unitech, Parsvnath Developers, HFCL, S Tel, Swan, Bycell and Shyam Telecom, are among the companies awaiting licenses to start GSM-based services. Besides, two existing operators — Idea Cellular and Spice Telcom — are also likely to get LoIs for some circles.

Sources said that all those found eligible as on the date of application would be issued LoIs simultaneously. Issuance of LoIs is the first stage in awarding licences. Companies need to accept the LoI and submit the required fees, before they are given mobile licences and spectrum.

DoT took this decision as neither telecom tribunal TDSAT nor the Delhi High Court stayed the process of issuing LoIs to new applicants or allocation of spectrum to existing GSM players or the new licensees.

The decision comes just a day before the crucial hearing in TDSAT on GSM lobby Cellular Operators Association of India’s petition that challenged the government’s decision to allow dual technology for offering mobile services and also spectrum allocation norms as suggested by Telcom regulator TRAI.— PTI

Mumbai, January 8
Mahindra & Mahindra (M&M) today said it has deferred its plan to invest, jointly with Renault and Nissan, in a manufacturing plant in Chennai.

"The company has reviewed its plans, while Renault and Nissan continue to be fully committed to their industrial development plans," Mahindra & Mahindra informed the BSE.

In February last year, the company, along with Renault and Nissan, had announced its intention to set up a manufacturing facility at Orgadam, near Chennai, and signed an MoU with the Tamil Nadu government. The company would now utilise capacity available at its new plant in Chakan and other existing plants to meet its medium-term requirements and hence not participate in the joint plant at Oragadam, M&M said.

It would continue its Mahindra Research Valley (MRV) at Chengelpet and tractor plant plans in Oragadam. However, Renault and Nissan maintain their development plans for the creation of a new industrial plant in Chennai. Besides, Mahindra and Renault continue to have a strong relationship through their existing JV.— PTI