New Delhi, February 21
The Union Cabinet today took two major decisions where it approved the proposal to invest Rs 9,996 crore ($2.5 billion) in the rights share offering by the State Bank of India (SBI) and setting up of a financial inclusion fund and a financial inclusion technology fund, with a total outlay of Rs 4 billion ($100 million) for the next five years.

The government owns 59.7 per cent stake in the SBI and launched the rights share sale on February 18 hoping to raise $4.2 billion.

Official spokesperson for the government here said the government would issue special marketable securities, instead of an earlier commitment to issue bonds that would qualify for statutory liquidity reserves (SLR) of commercial banks.

In its meeting chaired by Prime Minister Manmohan Singh here, the Cabinet also modified an earlier proposal to invest Rs 100 billion in the rights issue.

Banks in India are required to invest at least 25 per cent of their deposits in government securities under the SLR norm.

As per the clearance, the SBI would be offering one rights share at Rs 1,590 for every five held. The sale would be open for one month.

“On receipt of the approval of the Cabinet, the transaction will be completed within this financial year,” the spokesperson said.

The funds would be used to meet the rising loan demand in a fast-growing economy.

The government is estimated to receive Rs 1,450 crore in dividend and taxes from the SBI in the fiscal, the spokesperson said.

In another decision, the Cabinet approved the setting up of a financial inclusion fund (FIF) and a financial inclusion technology fund (FITF).

The FIF aims at economic betterment of the poor, while FITF will invest in information technology aimed at promoting financial inclusion.

A committee on financial inclusion headed by C. Rangarajan had recommended the two funds.

Finance minister P. Chidambaram, in his budget speech last year, had announced that two funds with a corpus of Rs 5 billion each would be set up with initial funding by the government, the Reserve Bank of India and National Bank for Agriculture and Rural Development.

The FIF is aimed at supporting ‘developmental and promotional activities’ with a view to securing greater financial inclusion, particularly among weaker sections and low-income groups in backward regions, the spokesperson said.

“The FITF would enhance investment in IT aimed at promoting financial inclusion, stimulate the transfer of research and technology in financial inclusion, increase the technological absorption capacity of financial service providers and users and encourage an environment of innovation and cooperation among the stakeholders,” she said.

According to National Sample Survey Organisation’s (NSSO) estimates, 45.9 million farmer households in the country, out of a total of 89.3 million households, do not access credit at all.

Despite the vast network of bank branches, only 27 percent of total farm households are indebted to formal sources, of which one-third also borrow from informal sources.

The agreement will stimulate the flow of capital, technology and personnel from India to Luxembourg and vice- versa.

“It will provide tax stability and reduce any obstacles in providing mutual cooperation,” the spokesperson said. — PTI

Chandigarh, February 21
It’s just eight days before finance minister P. Chidambaram will present the last budget of his government.

Ranjana Gupta from Ludhiana is keeping her fingers crossed, hoping that her household budget will not be stretched, at least this one time.

At a time when prices of most commodities are skyrocketing, and inflation is once again up at 4.07 per cent, Gupta is hopeful that drastic steps will be taken to rein in prices of essential commodities.

“Prices of basmati rice have doubled in the past one year, besides prices of edible oil, wheat flour, pulses, spices, milk and milk products have all shot up by 10-35 per cent. With general elections due in 2009, I hope that some drastic measures will be taken to keep prices in check,” she says.

With the common man now diverting a major portion of his salary to the daily use articles, people like Nand Kishore, a wood contractor from Khanna, is hoping that at least prices of fuel and cooking gas are not increased and rebate on income tax is increased.

“Almost 70 per cent of my earnings are spent on buying groceries and fuel. I hope that the price of LPG is not hiked, and the government takes drastic steps to curtail its shortage. I also pray that the bar on income tax is raised from the present Rs 1.10 lakh, middle class will be overburdened,” he says.

With steel prices having shot up by Rs 9,000 per metric ton in the past three months, many like Anuradha Miglani of Mohali are hoping that prices of cars, scooters, air conditioners and refrigerators do not shoot up.

“We have been saving to buy a car and a refrigerator this year before the summers set in. I am praying that our plans are not shelved with an increase in prices,” she says.

There are others like Ram Singh, an employee of a public sector bank in Patiala, who feel that education cess should be abolished and rate of interest on education loans be reduced.

“In the age of competition, many parents have availed education loans so that children can go to good technical colleges. We hope that the finance minister reduces the rate of interest on education loans from 12 per cent to nine per cent. Even the service tax of 12 per cent on fees paid to coaching centers, should be rolled back.”

Ludhiana, February 21
Waking up to the requirements of global buyers, apparel exporters here have decided to embrace corporate social responsibility (CSR).

The move assumes high significance particularly as units in small and medium category were finding it tough to obtain orders with foreign buyers preferring suppliers who are careful about their social compliance.

Cases of order rejections and of buyers, especially those from the US and Europe, shifting to other countries were getting frequent and adding to the worries of exporters here.

Taking the initiative, Apparel Exporters Association of Ludhiana has come forward to set up a CSR cell that would facilitate improvement in social compliance of garment producing small and medium enterprises.

For units that embrace CSR, it would mean that they provide a good working environment for workers that would ensure non-discrimination, proper wages, no child labour and comply with legal requirements and environment-related norms.

Compliance would not just help them secure more orders, it would lead to better efficiency and reduced costs.

The cell would have around 15 business units as its members in the initial phase and would be supported by organisations like the United Nations’ Industrial Development Organisation, WRAP- a US-based certifying NGO and others.

“The initiative would build a positive image of exporters from India. Buyers in the US and Europe are very particular about CSR and this move would mean more orders as well. Our organisation would provide accreditation to units which comply to CSR and we would also monitor their performance on regular basis,” said director of compliance administration, WRAP.

The CSR cell here would provide technical inputs and have a resource centre that would help enterprises gain complete understanding on legal, environmental and social issues and also solutions.

New Delhi, February 21
India generates 3.3-lakh tonne electronic waste every year. But out of this only nine per cent is recycled in a proper manner that is safe for the environment and health of the people, leaving a whooping 91 per cent e-waste at the mercy of the unorganised sector.

‘Toxic tech: Not in our backyard’ released today by environmental group Greenpeace says the fate of large quantities of e-waste the world-over is unknown.

According to Greenpeace campaigner Ramapati Kumar, figures prove that despite assurances majority of PC and mobile majors in India are not adhering to promises of safe re-cycling of e-waste and the take-back policy is not working.

“Brands are not taking the recycling seriously. Brand responsibility will ensure that hidden flow of e-waste does not become a problem in anybody’s backyard,” he says, adding if not addressed urgently the missing 90 per cent e-waste can pose serious threat to the environment.

Greenpeace says: “Even in regions like the European Union with tough regulation, no precise information is available on what happens to as much as 75 per cent of e-waste generated. In the US, this figure could be as high as 80 per cent or even more”.

It is scrap yard workers in Asia who are bearing the toxic burden of e-waste. The mountain of obsolete electronic products is growing at alarming rate as consumption of electronic devices continues to grow rapidly.

Figures provided by three authorised recyclers in India suggest that currently only around nine per cent of end-of-life products are being recycled properly, says campaigner Saumya Tripathi, adding that hidden flow of e-waste from branded products currently amounts to an average of 91 per cent of past sales.

Dharamsala, February 21
Punjab National Bank (PNB) has today opened its fully computerised branch at Maranda near Palampur in Kangra district.

A spokesman of the bank said earlier there was an extension counter of
the bank here.

It had now been converted into a branch keeping in view of the demand. The new branch was inaugurated by local sub-divisional magistrate C.P. Verma.

New Delhi, February 21
Indian stocks remain expensive as the corporate earnings potential and various macroeconomic factors do not justify the current level of the market, despite its recent downslide, according to Goldman Sachs.

“With valuations still elevated, notwithstanding recent market weakness and domestic investor sentiment bruised by poor performance of the high-profile Reliance Power IPO, we reiterate our underweight stance and expect the market to retrace further, or at best mark out a volatile trading range,” the global investment banking major said in its latest portfolio strategy report for Indian market.

Goldman Sachs analysts said retail investors have been a key driver of the market’s strong rise between August 2007 and January this year, but their “speculative enthusiasm” has been dampened.

Besides, foreign investors are not as influential on price formation as they have been or are perceived to be, they said, adding that further net selling was expected from overseas investors “as more receive FII status and are able to trade around positions more freely”.

While pointing out that it continues to believe in the longer-term investment prospects of Indian market, Goldman Sachs said the earnings growth might not be sufficiently strong to allow the equity market to advance or hold its current level.

Thus, in the context of high absolute and relative valuations, this macro and earnings outlook may not be sufficiently strong to allow the equity market to advance meaningfully or even hold its current level, they added.

Persistent earnings growth that Indian companies have delivered was one of the key drivers of the powerful Bull Run since 2003, not just in absolute but also in relative terms.

However, 2007 looks to be the first year since 2003 when earnings fell short of year-starting expectations, the report said. Furthermore, a shortfall in earnings growth, relative to expectations, could threaten the market’s ability to sustain its premium valuation, it added. — PTI

New Delhi, February 21
The government has come to the rescue of exporters who have been hit hard by the rupee appreciation once again.

A fresh package of Rs 500 crore in the form of interest subvention has been announced to compensate for the reduction in their profits.

Under the scheme, the exporters are given two per cent relief in pre-shipment and post-shipment credit in sectors such as leather and leather products, marine products, handicrafts, textiles and carpets.

“The measures will ensure mitigation of the effect of the rupee appreciation across the export sectors, make them internationally competitive and will also enable them achieve export targets,” the officials said.

The budget is also likely to see a provision for interest subvention to all scheduled commercial banks in respect of the rupee export credit.

The government has already announced Rs 300 crore under the interest subvention scheme for exporters.

The interest subvention is subject to the condition that rates will not fall below seven per cent.

This rate is applicable to the agriculture sector under priority sector lending scheme, the spokesperson added.

The scheme will provide relief to the exporters and mitigate (their) hardships on account of unanticipated and steep rupee appreciation.

The Federation of Indian Export Organisation (FIEO) president Ganesh Gupta expressed hope that a more comprehensive package would be announced soon to offset the continuing rupee appreciation and inherently high transaction costs.

FIEO has also thanked the ministry for extending the service tax refund facility to more taxable services provided by GTAs.

The export of traditional items especially handicraft, textile and carpets have suffered on account of 15 per cent appreciation in the value of the rupee against the dollar in the last 16 months.

The government has earlier announced various packages totalling Rs 5,200 crore to help the exporters.

New Delhi, February 21
Reliance Communications (Rcom) today acquired a Uganda-based Anupam Global Soft, a company holding service provider license, and announced an investment of about Rs 2,000 crore over the next five years to set up telecom network in the African nation.

RCom is planning to offer mobile, fixed line, Internet, national and international long distance services, in addition to Wi-Max and Wi-Fi services in Uganda, a company statement said.

“Uganda telecom market is similar to what India was eight years back. Our expertise in managing among the world’s largest integrated telecom network and deep understanding of diverse consumer segments makes us confident to achieve position to add further value to our two million shareholders,” it said.

The company has already received spectrum and plans to launch mobile services by the end of 2008. “RCom is targeting to invest up to $500 million (Rs 2,000 crore) in establishing a high quality integrated telecom network in Uganda to capture the significant growth potential in the emerging African market.”

This is the third global acquisition for the company and first international acquisition. The move comes a day after the announcement of formation of Reliance Globalcom, the umbrella brand for all its international businesses.

The company plans to connect the African continent with the rest of the world by laying a submarine cable system through its arm Reliance FLAG and would be spending $1.5 billion (Rs 6,000 crore) in building a 1.15 lakh-km fully IP-enabled optic network to reach two-thirds of world population. — PTI

New Delhi, February 21
Bharti Airtel today said it was open to sharing active infrastructure such as antennas, transmission systems and feeder cables with other mobile operators.

“We are open to sharing active infrastructure with other mobile operators, even with the new companies,” Bharti Group chairman and CEO Sunil Bharti Mittal told reporters on the sidelines of an AIMA event.

Telecom regulator TRAI had last year recommended sharing of active infrastructure among all operators.

This recommendation, if accepted by the Department of Telecom (DoT), would reduce expenditure for all the companies and may also lead to further lowering of tariffs.

It would also benefit new entrants in the mobile space by enabling them to share infrastructure of the existing operators.

The DoT has recently issued letters of intent to nine firms, including Unitech, Datacom, and Shyam Telelink.

Mobile service providers already share passive infrastructure such as towers, repeaters and shelters. Bharti Airtel also aims to have 100-125 million subscriber-base by 2010, Mittal said. — PTI