New Delhi, January 10
Jumping onto the small car bandwagon Honda Siel today announced that it would bring a small car into India by 2009.

This as India has emerged as a favourite of the automobile manufacturers globally for investment not only for the local market but also for the export purposes.

Honda Siel would enter into small car segment with the launch of ‘Jazz’ in 2009, company president M Takedagawa told reporters at Auto Expo here.

Meanwhile, NRI industrialist Swraj Paul-led Caparo India said it plans to invest Rs 1,000 crore in the Indian market over the next three years to become the largest automotive technology company in the country.

“The company will invest Rs 1,000 crore over the next two to three years time. We plan to rake in $ 500 million sales from the country by then,” Caparo India CEO Angad Paul said.

The company has already invested Rs 1,000 crore in the country toward setting up 22 manufacturing facilities, including in Pune, Chennai and Singur in West Bengal.

Paul said the company would review the investment figures as and when required. The investment would be made in setting up manufacturing units near the existing ones in Chennai and Singur as also in expanding capacity at the Pune unit.

Incidentally, a major portion of the $ 1.5 billion revenues of Caparo Group come from the UK and the US. The group said “in future, we would like that all three regions contribute equally to our revenues”. India accounts for about $ 150 million at present.

Asked about its planned compact car concept, he said the group was open to bringing it to the Indian market. The group was in the process of introducing a “city car” concept in Europe by this year-end, where Caparo would provide the design and assembling services to carmakers.

The announcement from the group came even as another European major, bus maker Volvo Bus Corporation said it would invest Rs 80 crore to set up a bus body manufacturing plant at Hosakote, Bangalore.

The company has tied up with India’s Jaico Automobiles to form a joint venture company-Volvo Bus Body Technologies India Pvt Ltd, Volvo Bus Corporation Director Akash Passey told reporters at the 9th Auto Expo here.

New Delhi, January 10
India’s eroding cost advantage and lack of government support may pose a threat to the country’s dream of becoming a global hub for automotive industry, research firm KPMG reveals.

In its latest report on Indian auto-manufacturing sector, the release of which coincides with the 9th Auto Expo, KPMG said despite Indian economy beating all growth projections, manufacturing companies are themselves sceptical about coping up with this rapid transition.

The research firm, which interviewed 40 CEOs and CFOs from the Indian automotive industry, said that senior auto executives were concerned about India’s eroding cost advantage and the increasing challenges of rewarding and retaining talent.

“There are also some concerns expressed about government commitment to building the sector. Labour costs are becoming a big concern in an economy that historically was reliant on low wage rates. Companies now report that a shortage of talent is driving up rates and increasing staff turnover,” KPMG said.

Indian Automotive industry is worth around $ 34 billion at present and contributes nearly 5 per cent to the country’s GDP with a capacity to produce 15 lakh vehicles per annum.

New Delhi, January 10
In a move aimed at ending the turbulence in the telecom sector, the government today decided to allocate spectrum to existing GSM players such as Vodafone and also to rival CDMA player Reliance Communications for launching mobile services.

According to a direction given by communications minister A Raja to his ministry officials, the new entrants, on the basis of eligibility and the priority of application, would be considered thereafter.

Among existing GSM players, Vodafone-Essar, Idea Cellular and Aircel would be getting the start-up frequency of 4.4 MHz for some circles at the existing price based on Rs 1,651 crore for nationwide spectrum.

These companies have been waiting for spectrum to start GSM mobile services in some of the circles to cover the remaining areas in the country.

Besides them, RCom that currently offers CDMA-based services, would also get GSM spectrum under the government’s decision of October 19 last year to allow companies to launch operations with both the technologies.

“DoT has decided to issue LoI (Letter of Intent) to all eligible applicants on the date of application who applied up to 25-9-2007,” a telecom ministry statement said here.

DoT has been implementing a policy of first-cum-first served for grant of Unified Access Services Licence (UASL) under which an application, which is received first, will be processed first and thereafter if found eligible, will be granted LoI and then whosoever complies with the conditions of LoI first will be granted UAS licence, it said.

UAS licence authorises licencee to rollout telecom access services using any digital technology, which includes wire-line and/or wireless (GSM and/or CDMA) services. They can also provide Internet Telephony, Internet Services and Broadband services.

Meanwhile, the department of telecom today issued Letters of Intent (LoIs) to nine companies, including Unitech, Shyam Telelink, Datacom and Shippingstop Dotcom for pan-India operations. It also gave LoIs to S Tel, Spice Telecom, Idea Cellular, Swan and Tata Teleservices for a few circles.

The applications of HFCL, Parsvnath Developers and Allianz Infratech have been rejected and that of ByCell and Indiabulls are pending necessary approvals.

Successful applicants would be asked to deposit the required spectrum fee along with bank and performance guarantees to become eligible for allotment of airwaves that are necessary to start mobile services.

DoT gave the LoIs after inviting each of them separately and announcing the decision on accepting or rejecting their application. The applications submitted till September 25, 2007 have been taken into consideration.

Sources said the government has enough spectrum to accommodate at least 5-6 new players after meeting the demands of existing GSM players as well as Reliance Communications which has been permitted to start GSM services under the dual technology clause.

New Delhi, January 10
At a time when the country is working towards providing affordable energy to improve the quality of lives, the restructured and revived Dabhol Power plant (Ratnagiri Gas and Power Pvt Ltd) is running into delays and cost overrun, making the power more expensive to the consumers.

The company, run by the PSUs and the Government of Maharashtra, is facing delays due to mismanagement of funds and lack of proper organisational structuring.

The finance ministry, on behalf of the consortium of financial institutions, has taken up the matter with the power ministry over the way the project is being managed and the cost increases.

The finance ministry has raised concerns over the lack of cohesiveness by the management and non-adherence to the corporate governance norms.

The concern raised about the cost of the project is that originally there was an estimate of Rs 10,038 crore, which included completion cost of Rs 870 crore.

This completion cost, due to delays, has moved up by 2.5 times and is now expected to be around Rs 2,144 crore.

Besides making power more expensive, the common term loan agreement (between the lenders and the company) states that the project cost will not increase upward of Rs 10,038 crore.

At present the lenders have absorbed the cost by waiving interest during construction to the extent of Rs 466 crore.

The finance ministry has also shown concern over the manner in which the board conducts its meetings, stating that there is insufficient notice to the members of the board and that the agenda of the meeting is not circulated well in advance.

The ministry has also objected to the lack of proper internal audit systems and has expressed concern that such a large capital expenditure does not have proper procedures and systems.

The company has not got its accounts audited for the year 2006-07, leaving a lot of ambiguity for reviving such a large project.

As per the restructuring plan finalised by the government, the acquisition cost of the project was financed by term loans of Rs 7,011 crore and equity of Rs 1474 crore.

Banking institutions like IDBI, ICICI Bank, State Bank of India, Canara Bank and IFCI have contributed Rs 500 crore each besides term loans.

The project that was originally scheduled to be completed by September-November 2006 will now be completed by FebruaryMarch 2008.

New Delhi, January 10
In a bid to boost industrial infrastructure, the finance ministry today rolled out a 10-year income-tax holiday to developers who set up industrial parks between April 1, 2006 and March 31, 2009.

As per the Industrial Park Scheme 2008, notified by the Central Board of Direct Taxes today, the industrial park developers will be eligible for 100 per cent tax deduction.

Such deduction would be given for 10 consecutive assessment years out of 15 years after the commencement of operations of such units.

It is up to developers to choose which consecutive 10 years he wants for tax holidays. Similar tax rebate scheme was announced in 2002, but it lapsed in 2006.

Those parks, which were developed, operated or maintained during 2006-07, would have tax assessment year of 2007-08 and would have filed tax returns by now. They can now file a revised tax returns and claim the tax benefits, finance ministry officials said.

As per the criteria under this scheme, an industrial park should have at least 30 units. All units of a person and his associated enterprises will be treated as a single unit.

The industrial park will have to be owned by only one undertaking to avail of the tax benefit. The area allocated or to be allocated to industrial units will have to be at least 90 per cent of the allocable area, the notification said. — PTI

New Delhi, January 10
The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Manmohan Singh, today gave its nod for raising fresh equity through IPO of 1 crore shares, with face value of Rs 10 each, of RITES Ltd.

After the Initial Public Offer (IPO), paid-up equity of RITES Ltd will rise from Rs 4 crore to Rs 5 crore and the government’s holding in the company will be reduced to 72 per cent.

RITES Ltd has entered in newly emerging business of concession of existing railway lines, BOT of rail and infrastructure project, leasing of rail equipment, etc. The IPO will facilitate raising funds for investment for these projects.

The CCEA gave its approval for the Plan Scheme “Research and Development Programme in Water Sector” with an outlay of Rs 295 crore for Eleventh Plan, which would help development of technology to improve the efficiency of the water resources systems, reduce risk/hazard in water resources projects and adopt economic design of water resources projects.

The scheme would also help preparation of manuals, guidelines and updating of BIS Codes in the light of research findings.

The CCEA approved the recommendations of CACP for enhancing the minimum support price (MSP) of copra for 2008 season by Rs 40 per quintal for both ‘milling’ and ‘ball’ varieties over the MSP announced for last season.

The MSP for fair average quality (FAQ) of ‘milling’ copra has been fixed at Rs 3,660 per quintal and for fair average quality of ‘ball’ copra, the MSP has been fixed at Rs 3910 per quintal.

The increase in the MSP of copra is expected to encourage the farmers to step up investment in coconut cultivation and increase production and productivity of coconut in the country, an official statement claimed.

Mumbai, January 10
Investors lost a whopping over Rs 2,00,000 crore today with the benchmark index tanking 287.70 points amid a heavy bout of selling in market.

Combined market capitalisation of all listed companies on the Bombay Stock Exchange plunged by Rs 2,05,148.21 crore from yesterday’s level. The total market valuation stands at Rs 7,10,000 crore plunging from yesterday’s Rs 73,13,000 crore.

The 30-share index, Sensex, account for about 20 per cent of the fall in total market valuation. The blue chip index lost Rs 46,000 crore in its market valuation in today’s fall. Sensex, which zoomed to record an intra-day high of 21,206 points, fell sharply to close at 20,582.08, a hefty fall of 287.70.

ICICI bank emerged as the sole gainer amongst the 30-share index with its market cap gaining over Rs 5,000 crore from the previous day’s close. Its marketcap stood at Rs 1,48,550 crore against yesterday’s Rs 1,43, 485 crore.

Meanwhile, investors in state-run power major NTPC suffered the biggest loss worth over Rs 9,000 crore with its marketcap plunging to Rs 2,19,411 crore. Reliance Communications also lost over Rs 5,000 crore. RCom’s marketcap fell to Rs 1,64,063 crore from Rs 1,69,174.71 crore on January 9.

Among other major loser on the Sensex were-real estate major DLF, L&T, Reliance Energy, Infosys and State Bank of India witnessing a loss between Rs 5,000 crore to Rs 2,000 crore in their respective marketcaps. — PTI

Chandigarh, January 10
Leading public sector Oriental Insurance Company has entered into an agreement with the Oriental Bank of Commerce for marketing of general insurance products through the offices of the bank.

The company has launched two policies for medical insurance and personal accident insurance, especially for the account holders of the bank and their employees.

The health policy is available for all persons in the 3 months-80 years age group and covers hospitalisation and domiciliary hospitalisation expenses.

The personal accident policy is available for persons in the age group of 5 to 80 years and covers death and disablement on account of an accident.

B.K. Sarkar, Director and GM, Oriental Insurance, and S.K. Sharma, GM, Oriental Bank, formally launched the above two policies at a function here.

A.K. Saxsena, GM (Designate) Oriental Insurance, J.P. Nahar, Chief Regional Manager and K.S. Grover, RM, Chandigarh were present.

Chandigarh, January 10
The 102 meeting of the state-level Bankers’ Committee (Punjab) was held here today to review the performance of banks for September, 2007.

Various strategies and action plan for effective contribution by the banking industry to the objectives of the state for unleashing productive energies, creating a new paradigm for inclusive economic growth were discussed.

KC Chakrabarty, Chairman and Managing Director, Punjab National Bank, in his presidential address, told that the process of 100 per cent financial inclusion in Gurdaspur & Mansa, Bathinda, Faridkot, Ferozepur, Muktsar, Sangrur & Tarn Taran and Mohali in Punjab has been successfully completed.

About ‘No Frill’ accounts, Chakrabarty said the rural poor do not have funds for bare necessities of life. For them the PNB has launched a scheme of providing “ab initio Overdraft Facility” up to Rs 2,000- to ‘No Frill account holders.

While reviewing the performance of banks in Punjab,. Chakrabarty told that 140 new branches of commercial banks were opened in the state during the review period, raising the network to 2,964 as at March, 2007.

He further told that the aggregate deposits of the banks registered growth of 16.1 per cent. In absolute terms, deposits increased by Rs 12629 crore from Rs 78304 crore to Rs 90933 crore during the period under review.

Kusamjit Sidhu, Financial Commissioner Cooperation, Government of Punjab was the chief guest. K.C. Chakrabarty, Chairman & Managing Director, Punjab National Bank presided over the meeting.