New Delhi, March 27
Local and domestic long-distance mobile call tariffs may drop further, thanks to telecom regulator TRAI's announcement to do away with a fee that private telecom operators pay to state-run BSNL.

After TRAI announced today that private players would be exempted from paying the fee by April 1, Cellular Operators Association of India director general T V Ramachandran said: "The industry is going to pass on the benefit to customers, but it will be to the extent of relief it gets." Private operators were hitherto paying the fee called Access Deficit Charge (ADC) to BSNL at the rate of 0.75 per cent of their Adjusted Gross Revenue or about Rs 600 crore a year.

"We will be passing on the benefit to our customers wherever possible," a spokesperson of leading CDMA operator Tata Teleservices said.

GSM player Bharti Airtel also welcomed the move saying, "We are committed to passing on the benefits of ADC relief to the customers primarily in the rural areas as desired by TRAI." Another major player Vodafone Essar also welcomed the move and said that it, too, would pass on the benefit to customers in an equitable manner and announce it shortly.

Access Deficit Charge (ADC) was paid by private telecom service providers to compensate BSNL for offering services in rural areas at subsidised rates.

Besides, TRAI has also announced the reduction of ADC on international calls to 50 paise from Re 1 at present.

However, BSNL which has been advocating for continuation of this levy got some respite as TRAI has decided to recommend to the government to provide Rs 2,000 crore annually for a period of 3 years to compensate the loss of ADC account.

BSNL was getting Rs 5,000 crore annually through ADC till about two years ago from private players.

The ADC has two parts. First it is 0.75 per cent of Adjusted Gross Revenue (AGR) that service providers pay to BSNL and second, Re 1 per minute on international incoming calls paid to the PSU by international long distance service providers. — PTI 

Bangkok, March 27
A day after acquiring Jaguar and Land Rover from Ford for $2.3 billion, Tata Motors today said it would further invest in the two companies, which reports said could be to the tune of $2 billion.

“Investments are part of business plans. Any company buying another one, invests in developing the business plans,” Tata Motors managing director Ravi Kant said when asked to comment on British media reports that the company would invest up to $2 billion on JLR.

Asked if the amount mentioned in the reports were correct, Kant declined to comment. “I don’t have anything to say on that,” he said.

According to the Times, Tata Motors is expected to invest £1 billion (approximately $2 billion) over the next 4-5 years as it takes charge of its major western brands.

Kant had yesterday said the company had taken bridge loans of $3 billion to fund the acquisition of the two British luxury brands.

He said the company planned to replace the bridge loans with long-term debts and equity contribution with funds to be raised through divestment in-group companies.

Tata Motors today launched its pick-up vehicle Xenon in the Thai market. The one-ton pick-up truck will be sold from across Thailand through the company’s own dealer network. Over 20 dealers have already been appointed and the network is being progressively extended. — PTI

New Delhi, March 27
The government today gave approval to a Rs 1,650 crore investment by Germany's Daimler AG on its proposed joint venture with India's Hero Group for manufacturing commercial vehicles.

Daimler's investment of Rs 1,650 crore will constitute 60 per cent of the equity capital of the joint venture, an official spokesperson told reporters here after a meeting of the Cabinet Committee on Economic Affairs.

The JV will design, manufacture and sell commercial vehicles of above 2 tonnes for Indian as well as overseas market, the official added.

Moreover, the JV would also source components from India for Daimler's global requirements, besides undertaking research and development activity for new products and variants.

The joint venture would initially manufacture LCVs and M&HCV's for the domestic market followed by exports at a later stage.

The vehicles produced would be variants of Daimler Trucks' current product portfolio, which would be fine tuned to suit the Indian market conditions.

Daimler Trucks presently operates in India through a commercial vehicles and bus assembly plant in Chakan, near Pune, Maharashtra.— PTI

Kolkata, March 27
Maruti Suzuki India Limited would launch ‘A Star’ small car in the A2 segment from its Manesar plant at Haryana in October, a company official said.

M.M Singh, managing executive officer (production), said the new car would expand its A2 portfolio along with other models like WagonR and Estilo.

The car would be exported to the European countries in addition to the domestic market.

The company, which has a market share of 55 per cent, today launched Swift DZire, the entry-level sedan car from the Maruti stable. Swift Dzire was being manufactured at the Manesar plant, and was being designed and developed by engineers in India.

Meanwhile, the company today said it was likely to raise the price of Swift DZire to offset high input costs.

“The company is likely to revise the introductory prices in the next few weeks due to high cost of raw materials, but nothing has been decided so far,” Maruti Suzuki’s MD Shinzo Nakanishi said on the sidelines of the launch of DZire here. — PTI

New Delhi, March 27
The Economist Intelligence Unit (EIU) has stated that India’s growth though slowing will continue to remain strong and maintain an average of 7.5 per cent in 2008-09 and 7.2 per cent in 2009-10. 

One of the big risks that will impede growth is inflation due to high-supply side prices like foodgrain and crude oil poor infrastructure and a downturn in global economy slowing down Indian exports.

India’s economic slowdown, to an average of 7.5 per cent in 2008-09, represents moderation to a healthier, more sustainable rate of growth. In the medium term, continued business environment will ensure that India’s growth rate remains the third fastest in Asia, said Anjalika Bardalai, Senior Economist and Asia Editor with the EIU. She was speaking at the 13th Business Roundtable organised by the Economist with the Government of India here yesterday.

What the EIU suggests is that for sustaining growth and staying competitive, India needs to boost manufacturing sector by increasing employment and by exploiting regional dynamics. What also goes in favour of India is that it has established track record of stability, a growing and a sophisticated middle class, which in turn is a big consumer and an improving foreign investment environment.

The EIU is of the opinion that reform and innovation will improve competitiveness in addition to this the business confidence is very high with a strong inward investment and a surging outward investment as well. The direction of reforms of the economy as a whole is steady and this will also contribute to growth. However, the report highlights that the structural reform that weakens India are red tape, bureaucracy, a relatively low integration in the world trade and a weak infrastructure.

Besides this, the EIU has said that infrastructure is the weakest aspect of the business environment and that the prolonged sharp downturn in the global economy would impact India’s exports. The EIU predicts that public and private consumption and domestic investment will continue and the country will be the least trade dependent economies in the region, while remaining relatively insulated from the effects of the US led global slowdown.

Although the short-term outlook certainly includes some considerable risks and challenges, the country’s stability and nearly unparallelled market opportunities will continue to support business confidence and domestic and foreign investment, adds Bardalai.

EIU that ranks countries on various parameters has given India six out of 10 points. It has ranked India 12th in the whole of Asia and Australasia.

New Delhi, March 27
The newly appointed CMD of Air India or the National Aviation Company of India Limited (NACIL), Raghu Menon will focus on providing a better experience on the ground and in the air for the passengers.

Menon, while talking to reporters here today, said: “My main thrust will be to ensure customer satisfaction”. He further added that his vision was to make Air India an airline of international standard. He said completing the merger process and improving the financial health of the airline were the two major issues that need to be tackled.

“It will take another 2-3 years for the merger process to be completed. It should be 60-70 per cent completed within the next year. The financial health of the airline has been affected by the rising cost of aviation turbine fuel and we could report a loss of around Rs 700 crore during the current year mainly on account of the high cost of fuel," Menon said.

Menon will continue as CMD till his superannuation from service, or until further orders, whichever is earlier.

In a separate order, the government has approved the appointment of Vishwapati Trivedi, presently joint managing director, NACIL, ministry of civil aviation, as additional secretary and financial adviser, ministry of home affairs.

The government has abolished the post of joint CMD following the appointment of Menon as the new CMD. The new AI chief will take over at the Air India headquarters in Mumbai on April 1.

He said that he was not in favour of bringing a voluntary retirement scheme to prune staff strength although the idea of government pumping in more equity into the airline is not something that he is against.

Mumbai, March 27
The RBI has asked banks to shore up their capital in order to meet wide areas of risks. The notification came days after reports that private banks, offering products like foreign exchange derivatives, could end up with increased non-performing assets after currencies like Japanese yen and Swiss franc rose against the dollar.

The RBI’s guidelines issued today under the supervisory review process (SRP) has asked the banks to comply with new risk management norms under Basel II.

The RBI has asked the banks to make provision for risks relating to credit concentration, liquidity, settlement risk, reputation, strategy, and under-estimation of credit risk that were not specified earlier.

“The objective of the SRP is to ensure that the banks have adequate capital to support all the risks in their business as also to encourage them to develop and use better risk management techniques for monitoring and managing their risks. This in turn would require a well-defined internal assessment process within the banks through which they assure the RBI that adequate capital is indeed held towards the various risks to which they are exposed. The process of assurance could also involve an active dialogue between the bank and the RBI so that, when warranted, appropriate intervention could be made to either reduce the risk exposure of the bank or augment/restore its capital," the RBI said.

New Delhi, March 27
The Cabinet Committee of Economic Affairs (CCEA) has approved the India-Singapore Comprehensive Economic Cooperation Agreement (CECA) and also raised the ceiling of NTPC to make further investment.

Under the India-Singapore CECA, the government has reserved 14 items as sensitive and import of these items will attract duty. The sensitive items subjected to import duty are discs for laser reading system, still image video cameras and magnetic tapes, amongst others.

The CECA has deleted 16 items from the approved list that qualifies for duty elimination.

The items moved to the sensitive list mostly relate to the chemical and petro-chemical sector and include linear low-density polyethylene, linear medium density polyethylene and nylon moulding powder.

The India-Singapore CECA has already come into operation with a large number of items being traded without duty on either side. The agreement also lays a tariff reduction/elimination roadmap for several other goods.

Meanwhile, NTPC has got a waiver of the ceiling of Rs 1,000 crore for equity investment. Besides, it can establish joint ventures and wholly-owned subsidiaries in India or abroad for participating in the bidding called by state utilities/distribution licensees.

New Delhi, March 27
The northern states - which are perennially short on power - have joined hands in protest against a change in allocation of power. The northern region’s share has been reduced while the eastern region - that is already surplus - has got more.

The states of Punjab, Haryana, Rajasthan, Himachal Pradesh, Uttarakhand and J&K, have collectively lodged a protest with the union ministry of power and the Central Electricity Authority (CEA). The northern regional power committee comprising members of these states said: “The eastern region is trading power at market rates. It was surplus in power and was selling it. Any additional allocation will only increase traded power.”

The northern states feel that the agreement thrashed out between the northern region, the eastern and the order of the ministry of power should be upheld and there should be no change. In case the ministry wants to change the allocations, the northern states have demanded that they be consulted before any change is carried out.

The row is over the allocation of 1,200 megawatt of power from the Tala hydro project set up in joint venture with Bhutan. The ministry of power had announced its allocation formula after consensus from the northern region, the eastern region and the CEA last year.

Sources in the power sector said the eastern region had been consistently writing to the ministry of power expressing dissatisfaction over the allocation of the power project.

The CEA has made fresh recommendations that increase the share of the eastern states and reduce the share of the North.

The northern states like Punjab feel that this gives the surplus eastern region to earn money from the shortages existing in the North.

New Delhi, March 27
The Cabinet today approved a currency swap agreement between India and Japan to exchange and re-exchange a maximum amount of $3 billion for domestic currency at the spot rate to meet temporary balance of payment (BoP) problems faced by the two countries.

An official spokesperson said the agreement would lessen dependence on International Monetary Fund in the event of unlikely BoP crisis.

The Cabinet’s approval for authorising the RBI to sign the pact with the Bank of Japan is a significant milestone to demonstrate India’s commitment to the ‘Look-East policy’ and regional cooperation. Sources said the step would also help India foster strategic economic relationship with Japan

During the Asian financial crisis in 1997, Japan had initiated currency-swapping arrangements with Asian economies to enable them to swap domestic currencies for the US dollars to avert an external payment crisis.

In the decade gone by, Japan has concluded such agreements with all the ASEAN countries. India is the first non-ASEAN country with which Japan wants to have such an arrangement.