New Delhi, March 28
With inflation moving toward seven per cent, the government has begun pulling out all stops to boost domestic supply situation by withdrawing incentives on export of at least 40 items, including steel, cement and non-basmati rice.

In a concerted action involving the ministries of finance, consumer affairs and agriculture, the commerce ministry withdrew or temporarily suspended the tax refund scheme — Duty Entitlement Pass Book (DEPB) — late last night.

"Total number of items on which DEPB benefits have been withdrawn would be running into about 40-50," commerce secretary G K Pillai told reporters here today. While the country was importing cement at zero duty, it has stopped the export incentives as a precautionary measure.

As for steel, he said: "When there is a shortage in the country and prices are high, why give export incentives." Besides measures to discourage exports, the government is considering more fiscal steps to improve supplies and rein in inflation, he indicated.

Pillai said an empowered Group of Ministers would be meeting on April 2 to consider measures for maintaining adequate supply line in the face of global pressure on prices.

"The eGoM would be (reviewing) prices of rice, wheat and procurement of edible oil," he said.

Inflation, based on the Wholesale Price Index, has jumped way above the comfort level of five per cent and touched 6.68 per cent for the week ended March 15.

The government has already reduced duties on import of different varieties of palm oil and the duty cut on soya oil would be one of the options to be considered by the eGoM.

New Delhi, March 28
Power Grid Corp, the country's largest power transmission utility, today said it has signed agreements with World Bank and Asian Development Bank (ADB) for two loans of $600 million each for funding projects.

The loan from ADB is a part of the bank's newly introduced loan facility called multi-tranche financing facility (MFF), under which loan assistance can be availed in a number of tranches depending upon the funding requirement.

"A Framework Financing Agreement for MFF had been signed with ADB for $600 million. The MFF loan will be drawn in two tranches," PGCIL said in a statement. In the first tranche, ADB will lend $400 million to the company, it added.

The loan agreement for $400 million was signed by PGCIL chairman and managing director R P Singh and ADB country director (INRM) Tadashi Kondo in the presence of officials from the finance ministry and the power ministry. The government has extended sovereign guarantee for this loan.

The loan will be utilised to finance part of the fund requirement for a 800 kV High Voltage Direct Current lines under 'North Eastern Northern/Western Region Interconnector-I Project' and a 800kV High Voltage Alternating Current Substations under 'upgradation of transmission capacity from Uttarakhand project.' — PTI

Ludhiana, March 28
Hundreds of electroplating and zinc plating units in the city would shift outside the city following an approval from the government to form a cluster. The Ludhiana Electroplaters Association has identified land for the purpose and is expecting infrastructural development of the cluster to kick off soon.

With the formation of cluster, about 250 electroplating and zinc plating units, which fall under the ‘red’ category, located in residential areas, would move out thereby providing relief to the growing pollution here. The association has invited another 500 units to join them and has asked them to furnish details of their requirements by April 30 after which further processing would take place.

According to Joginder Kumar, president of the association, the units would derive benefits like availability of a common effluent treatment plant, low cost of land and other facilities.

“The units that fall under the red category were facing a constant thereat of closure. Now that the cluster has been approved, they can move out. Considering that the cost of land where we are planning to develop the cluster is lower than the prevailing market rates, we are expecting that units located in designated areas too would join.”

The initial phase of development would be done by industry, for which it would seek help from banks also. The cluster would get Rs 50 crore as grant in aid for the development.

New Delhi, March 28
Panic-stricken investors have started selling off their long positions in agricultural commodities in futures market on fear that the government may ban trading in some more commodities to curb rising inflation.

"A sharp increase in inflation has created panic in the market and traders who had taken long positions in agricultural commodities have started squaring them off," Karvy Comtrade analyst Veeresh Hiremath told PTI.

Inflation rose to 6.68 per cent in the week ended March 15 compared to 5.92 per cent in the previous week.

Market experts said the investors are liquidating positions fearing that the government may take stringent steps such as banning a few commodities in the forward market to arrest the rising prices of domestic food items.

The wholesale price index for food articles rose by 0.2 per cent while that of non-food items went up by 0.6 per cent.

"With the rise in inflation, the last year's sentiments have returned to the market," Hiremath said, adding that the government delisted futures trading in wheat, rice, urad and tur in early 2007.

As inflation has hit 13-month high this time, many traders speculate that the government may take similar steps and ban futures trading in some more commodities such as chana, he said.

"Since chana comes under essential commodities, certainly it derives attention of the government," he added. — PTI 

New Delhi, March 28
India's top corporate Tatas, known for their series of acquisitions including this week's Jaguar and Land Rover deal, has paid a whopping $133 million (Rs 532 crore) in fees to advisers for about 56 buyouts in the past two years.

According to data compiled by leading global financial information provider Dealogic, "The Tata group of companies has paid a total of $133 million in advisory fees to banks advising on acquisitions since 2006." The group has acquired as many as 56 businesses for a total consideration of $20.6 billion in the past two years, according to Dealogic.

Since 2002, the Tata Group has made as many as 106 acquisitions valued at $24.2 billion.

Tata's M&A activities are mostly outbound as only 13 per cent of Tata Group's acquisitions have been domestic - that is targets based in India. The average acquisition size by the Tata Group is $284 million.

The acquisition of Jaguar and Land Rover for $2.3 billion earlier this week is the second largest acquisition by the group, after Tata Steel's acquisition of Anglo-Dutch steel maker Corus for $12.1 billion last year.— PTI

Mumbai, March 28
Finance minister P Chidambaram today said that corporate bonds will play a critical role in the growth of the economy, but absence of a vibrant market in the country for such a security is proving to be a major handicap.

Speaking at a function to launch the country's first electronic trading system for corporate bonds, Chidambaram said, "We need $500 billion over the next five years to develop infrastructure. But absence of a vibrant bond market is a major handicap," he said.

He pointed out that currently, it is mainly the government-owned companies that are issuing bonds and the portion of bonds issued by the corporates is meagre.

The government, however, has taken a series of measures to boost the corporate bond market and many more measures are in the pipeline.

"Sebi is finalising draft regulations on corporate bonds.

It is planning to simplify the issuance and listing of bonds," he said.

The minister said there is a need to develop a seamless pan-India market for corporate bonds, but there are different stamp duty rates imposed by different state governments.

Chidambaram said he has asked the empowered committee of state finance ministers to consider it. Uniform stamp duty will increase the revenues of the states, not reduce it, he said.

Responding to a query as to why the government has imposed restriction on investments by foreign institutional investors in debt instruments, Chidambaram said it was an issue of monetary management. The RBI is cautious about expanding issuance of corporate bonds to the FIIs, he added.

"There is a scope for increase. But it is the regulator which has to take the call," he said. — PTI

Mumbai, March 28
In line with other banks, public sector lender Allahabad Bank will cut its benchmark lending rate by 25 basis points from next month, which will make its home loans cheaper by 0.5 per cent.

"The bank has decided to cut its Benchmark Prime Lending Rate (BPLR) by 25 basis points from the present rate of 13.25 per cent to 13 per cent," the bank said in a filing with the Bombay Stock Exchange.

With the cut, interest rate on housing loan of up to Rs 20 lakh in floating term loan will reduce by 50 basis points for all fresh sanctions with effect from April 1, the bank said.

Already, the bank has announced a cut in the interest rate of fresh housing loans by 25 basis points in both floating and fixed term loans with effect from April 1 for loans up to Rs 20 lakh on all maturities. — PTI

Tiruchirapalli, March 28
Air India has increased its frequency on the Chennai - Tiruchirapalli — Thiruvanathapuram — Sharjah sector to make it a daily service. According to an Air India release here, the initiative was part of the summer schedule of the airline, which would come into effect from March 30.

Previously, Air India was operating six flights a week, except Fridays, on the sector. — UNI

BRIEFLY

TELCON buys 79% stake in Spanish Co
Mumbai: Tata group company, Telco Construction Equipment Company (TELCON), said on Friday it has signed a deal to acquire a 79 per cent controlling stake in Spain-based Serviplem. An agreement has been signed with the existing shareholders of Serviplem to acquire their 79 per cent stake in the company, TELCON said. — PTI

Air Mauritius flights
Nairobi: Air Mauritius will next month launch a weekly flight to Bangalore, the firm announced on Friday. The first flight, scheduled for April 28 under a code-sharing agreement with Air India, will take the Mauritius — Bangalore - Chennai — Mauritius route, it said. — AFP

Stake in S Kumars
Mumbai: Morgan Stanley has increased its stake in apparel manufacturer S Kumars to over 7 per cent for Rs 103.34 crore. Morgan Stanley has acquired 72,72,723 shares amounting to 3.56 per cent in S Kumars through open market transaction on March 17, the company said on Friday. — PTI

BSNL broadband
Chandigarh: The Punjab telecom circle of BSNL will now supply broadband connections on demand and without any installation charges, for a limited period till April 30. S.R . Aggarwal, chief general manager telecom, said on Friday some new tariff plans have also been introduced for this period. — TNS

CII office-bearers
Chandigarh: J.R. Singal, managing director of Eastman Cast and Forge, and Gunbir Singh, managing director of Bambino Holdings, have been elected chairman and vice-chairman, respectively, of CII Punjab State Council for 2008-09. Meanwhile, Partap K Aggarwal, founder of IDS Infotech, has been re-elected chairman of CII Chandigarh Council 2008-09. — TNS

Gold declines by Rs 60
New Delhi: Gold declined Rs 60 to Rs 12,340 per 10 gram on the bullion market here on Friday as strengthening dollar and falling oil reduced the metal’s sheen as a hedge against inflation. Stockists sold gold after the precious metal wiped off most of the gains it recorded in Asia and opened down in London. — PTI