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Keep 33 pc stake in PSBs: Plan panel
India’s growth to slow down: ADB
Fiscal measures will cool inflation: Montek
Soaring food prices to help farmers: study
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Duty on inedible oil to hike soap prices
Hefty pay packages for ISB students
Cross-over Technology
Industrial growth to slip: Assocham
BoB revises foreign currency deposit rates
Paul speaks against immigration cap
US economy may ‘contract’: Fed chief Microsoft asked to pay
700-cr income tax
Tata Motors to list on Tokyo stock exchange
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Keep 33 pc stake in PSBs: Plan panel
New Delhi, April 2 At present, the government has a policy to keep at least 51 per cent majority stake in the public sector banks. “In the medium term, the ability of these banks (public sector) to raise capital for growth without reducing the government shareholding to less than 51 per cent will be severely constrained,” a report of Planning Commission’s High Level Group on service sector said. The group headed by Planning Commission member Anwarul Hoda, which was constituted last year, submitted its report to Prime Minister Manmohan Singh today. The Planning Commission panel also suggested permitting foreign investors to own larger share in insurance companies, de-tariffing of insurance products subject to appropriate regulation, uniform stamp duty for the debt and security markets and reforms in the pension sector. The panel noted that certain key recommendations of the Narasimham Committee on banking reforms remain unimplemented. “The Narasimham Committee had recommended that the minimum government ownership in these banks be reduced to 33 per cent and the banks should become board-managed companies,” it said. The panel also recommended that the provision of statuary liquidity ratio (SLR)- to keep a part of deposits in government securities - should be gradually reduced apart from aligning the cash reserve ratio (CRR) with global benchmarks. It also suggested that the practice of issuing bank branch licenses by the RBI and the government directing banks to lend to specific sectors should be done away, apart from allowing them to participate in the equity derivatives. In the insurance sector, it wanted separate income tax exemption limit for long term insurance products, pension products, apart from close-ended infrastructure mutual funds and long-term bank deposits. Referring to R H Patil Committee report on debt capital markets, the Panel recommended bringing out more products in the bond and derivative market. Seeks rationalisation of service tax on retail
The Planning Commission-appointed committee today recommended rationalisation of service tax for the retail sector to enhance its competitiveness. Recommending a benign tax regime for the retail sector, the high-level committee on services sector headed by Commission member Anwarul Hoda suggested, “The service tax should be limited to the fee element”. At present, the service tax is levied on the gross amount including the salary paid to employees, said the report which was presented to Prime Minister Manmohan Singh earlier. The committee, however, did not take a view on the opening of retail trade to the foreign investment; Hoda said adding’ “We are agnostic as far as FDI in retail is concerned”. For involvement of pvt sector in education
A high level group of the Planning Commission has recommended the involvement of private sector for expanding facilities of higher education. The group, under the chairmanship of Anwarul Hoda, Member Planning Commission, suggested short term and long-term measures to improve and sustain competitiveness in education in the coming years. As per the recommendations of the group, it would be necessary to ensure that the private sector provides scholarships to adequate number of meritorious and disadvantaged students and the private sector institutions should be given freedom in respect of fees. Vulnerable groups, which do not have the means to pay the fees should also be covered in the scheme.
— PTI |
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India’s growth to slow down: ADB
New Delhi, March 3 According to ADB studies inflation will slightly moderate to 4.4 per cent in 2008-09 this fiscal as against 4.5 per cent in 2007-08.The bank also has forecast that India’s growth will be accompanied by high inflation and rising prices of food, clothing and input prices will be the pangs that this surging economy will have to put up with. On the growth front the bank has projected moderation stating that it would be around 8 per cent as against 8.7 per cent in 2007-08. But there is a sliver lining and the growth is expected to be around 8.5 per cent in 2009-10 on the back of consumer spending and growing demand in the domestic market. ADB’s projection is lower than the Prime Minister’s Economic Advisory Council’s expectation of 8.5 per cent for the next fiscal. However, with growth in 2009-10 the inflation is also likely to rise to 5 per cent. Narhari Rao, Chief Economist, ADB, said, “Despite growth moderating, we still feel that Asia, including India, does have favourable policy conditions. We feel that productivity growth linked to economic modernisation and structural transformation will continue.” The report highlights growth outcomes in India over the next two years will partly hinge on the timing and scope for relaxing the current tight monetary policy. This in turn will be shaped by two key factors: the out-turn in domestic food production and trajectory of global commodity prices. The report lists supply shocks beyond the 2007 and 2008 agricultural sowing seasons, rising food prices, tighter monetary policy and a global economic slowdown as major downside risks to the buoyant growth forecast One of the important issues on inflation that is mentioned in the report is that domestic prices of food and fuel will be critical in determining wholesale price inflation. The outlook report warns that inflationary pressures will persist as the local supply of foodgrains and vegetables is expected to remain tight in 2008 due to subdued sowing of the winter crop in 2007 and possibly, the summer crop in 2008. The report expects the rupee-dollar exchange rate to be relatively stable in 2008 and in 2009. India can expect exports to grow strongly at 16 per cent in 2008 this is due to the fact that developed markets will further open up to India’s high-tech service exports and market diversification will deepen. Import growth will also continue to be rapid as the country imports capital goods and intermediates to sustain high levels of investment. |
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Fiscal measures will cool inflation: Montek
New Delhi, April 2 They are not little bits of things and I think they will have an impact (on inflation)”, he told the media persons on the sidelines of a conference to release the report of the High-Level Group on Services Sector. The government has taken a host of initiatives, including scrapping of duty on various edible oils and banning import of non-basmati rice and pulses to contain inflation which increased to 6.68 per cent for the week ended March 15, much above the Reserve Bank’s target of 5 per cent. Pointing out that the steps taken by the government were “the right measures to take”, Ahluwalia said the prices of edible oils have started coming down. “I am very certain that we will be able to bring it under control,” he added. Pointing out that inflation was a global problem and not an India-specific problem, Montek said, “Every country in the world is facing an upsurge in the inflation. Chinese inflation is about 9 per cent much worse than ours. We should recognise that this is an global phenomenon not an easy one.” Meanwhile, after announcing a slew of fiscal measures to contain inflation, the government today said it could take more such steps if the price situation demanded. “The government is conscious of it (high inflation), the measures would be taken wherever situation warrants,” Minister of State for Finance P K Bansal told reporters on the sidelines of a micro-finance function here. The inflation rate for the week ended March 15 touched the 13-month high of 6.68 per cent. When asked what steps could be taken by the Government to tame soaring inflation, Bansal said, “I cannot say what measures would be taken but as I said the government regularly monitors situation and modulates responses accordingly.”
— PTI |
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Soaring food prices to help farmers: study
New Delhi, April 2 “The years of falling food prices were good for consumers, but not so good for farmers. Now, while consumers in urban areas cannot be expected to welcome soaring food prices, the higher prices should theoretically reward farmers with greater profits and better livelihoods,” said IFPRI report titled ‘What goes down must come up: Global food prices reach new heights’. While the real food prices declined by 75 per cent in the the three decades between 1974 and 2005, in the three years since 2005 they have risen by 75 per cent, it said. Prices of wheat, butter and milk have tripled since 2000, and those of maize, rice and poultry have nearly doubled. The food price index of UN’s Food and Agriculture Organisation rose by nearly 40 per cent in 2007 and “prices in 2008 are higher than they have been in decades”, the report said. It said the government should help farmers take advantage of higher food prices to increase productivity and thereby production and incomes to improve their living standards. However, it must also ensure that poor consumers are not pushed into destitution.
— PTI |
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Duty on inedible oil to hike soap prices
Chandigarh, April 2 Sources in the industry informed TNS that with no duty cuts and continuous increase in raw material costs would lead to an increase in prices of consumer goods like soaps and detergents. While the government has now taken corrective measures to rein in prices of edible oils by lowering the import duty, import duty on the inedible oils used in above mentioned fast moving consumer durables still range from 12- 12 5 per cent. While some companies like Hindustan Unilever have already increased the price of its select brand of toiletries, other FMCG manufacturers are mulling an increase in price during this month. Hindustan Unilever has set the ball rolling and prices of Vim bar have witnessed a 10 per cent price hike. Dr R K Sinha, COO, operations and marketing, Godrej Consumer Products, who was in town to relaunch Cinthol soap, said that they would have to take a call soon on the increase in price of its popular brands- Godrej No 1 and Cinthol. He said that after the existing inventory of the company is exhausted, a price hike of 3 to 5 per cent is inevitable. Industry sources say that the inedible oil prices have been rising continuously over the past one year. As compared to last year, price of different categories of inedible oils have gone up by 30 - 50 per cent. In the past two months, itself, there has been a 20 per cent hike in the raw material cost. “With demand of these oils far exceeding the supply, a global increase in prices is being seen. With large tracts of land under oilseed cultivation in Brazil, Mexico and USA now being used for bio-diesel plant cultivation, there has been a shortfall in production,” said an official in Hindustan Unilever. Considering the hike in input costs for these FMCGs, there has been a slowdown in volumes in this industry, said Dr Sinha, while adding that though the growth rate of the industry had remained steady at 30 per cent. |
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Hefty pay packages for ISB students
Hyderabad, April 2 The average domestic salary offered to ISB graduates this year is Rs 19 lakh while the average international package stood at $ 1,44,812, the Deputy Dean of the prestigious management institution Ajit Rangnekar told a press conference today. The ISB, founded in 2001, was recently ranked 20 among the world’s leading business schools. The B-school declined to disclose the highest salary offer made to their students this year. Giving details of the placements for the Class of 2008 comprising 400 students, Rangnekar said the average international offer was on par with what students at top international B-schools attract. The international averages are: USA - USD 138,614; Europe - USD 156,658; Asia Pacific - USD 145,607; Middle East - USD 125,389. As many as 41 new international companies visited the ISB campus for the first time. The 111 international offers are spread across 23 cities across USA, Europe, Middle East, and the Asia Pacific. The offers encompass a wide range of functions and industries such as consulting, manufacturing, real estate, IT, and others. A unique feature of this year is that 81 per cent students made remarkable career shifts. This is the highest percentage of career shifts at the ISB so far. Some of the dramatic career shifts are: Army Colonel to Head of a New Venture, orthopedic surgeon to COO, scientist to Production Head and restaurant owner to Real Estate. The ISB students came from diverse academic and work backgrounds. The Class of 2008 had 10 students from the medical profession. There are 25 per cent women in the Class of 2008, perhaps the largest number in an Indian B-school. The 106 strong women students at the ISB have received several senior roles across industries. Their average domestic salary is Rs 16.44 lakh. |
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Cross-over Technology
New Delhi, April 2 After observing that there was no development on the issue, Telecom Disputes Settlement and Appellate Tribunal (TDSAT) chairman Justice Arun Kumar directed to adjourn it. The tribunal is waiting for the judgment of the Delhi High Court, where the Cellular Operators Association of India has challenged government’s policy on the cross-over technology. Last month, after a long hearing the Delhi High Court has reserved its judgement. During the proceeding today, Additional Solicitor General Vikas Singh, appearing for Department of Telecom, informed the tribunal that there was no improvement in the situation from the last hearing. The tribunal had earlier declined to grant stay on the allocation of spectrum under the cross over technology to Reliance and other players. The tribunal has directed to list the matter on May 8 for the next hearing on this.
— PTI |
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Industrial growth to slip: Assocham
New Delhi, April 2 Industrial production has already slipped by 25 per cent in February-March and captive power stations within the industrial premises are running at half the capacities, as diesel and petrol have turned expensive, Assocham said in its report on ‘Fallout of Worsening Summer Power Situation on Industrial Production in April-July 2008’. “Industrial production suffered heavily in winters of 2007 as power deficit remained within the range of 18-20 per cent. Between February and March 2008, the deficit went up to around 25 per cent, causing industrial production to fall steeply,” Assocham President Venugopal Dhoot said. India’s industrial production growth came down to 5.3 per cent year on year as compared to 11.6 per cent in January 2007. Power deficit in April-July last year stood at 13.4 per cent. While the power supply situation was unlikely to improve because of constraints on the generation side, India Inc’s minimum production loss would be at around 35 per cent. The power utilities are unable to meet demand for electricity by industries, which is growing at around 20-25 per cent, the chamber said. “The states in which power supply to industry would be most hit are Delhi, Uttar Pradesh, Haryana, Madhya Pradesh, Rajasthan, Maharashtra, Andhra Pradesh, Karnataka, Tamil Nadu and Gujarat,” Dhoot said.
— PTI |
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BoB revises foreign currency deposit rates
Mumbai, April 2 For Foreign Currency Non-Resident (Banks) deposits (FCNR(B)) and Non Resident External (NRE) term deposits in US dollar, having a maturity period of 1-2 years, the revised rate has been fixed at 1.74 per cent (1.96), the bank said in a release issued here today. For deposits in pound, euro and yen having the same maturity, the revised rates would be 5.09 per cent (4.81), 3.98 per cent (3.64) and 0.35 per cent (0.35), respectively, the bank said. Deposits having a tenure of 2-3 years, 3-4 years, 4-5 years and five years in US dollar, the revised rates are 1.75 per cent (1.87), 2.06 per cent (2.19), 2.36 per cent (2.48) and 2.65 per cent (2.74), the bank said. Similarly, NRE deposits having a maturity bucket 1-2 years, the rate has been revised to 2.49 per cent (2.71) while for 2-3 years and 3-4 years, the new rates are 2.50 per cent (2.62), 2.81 per cent (2.94) respectively, the bank said.
— PTI |
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Paul speaks against immigration cap
London, April 2 Lord Paul, a member of the Lords Economic Affairs Committee, said he had strong reservations about the Committee’s recommendation that immigration should be measured by the impact on income per head of resident population. “We have a strong economy, we want a competitive economy and one of the things is that jobs will go to the immigrants. So what, as long as the country is happy with low inflation and a strong economy,” he said here. Prime Minister Brown yesterday said the concerns raised were already being tackled by a new points-based system that would allow only highly skilled workers into Britain. He said that immigration had added £ 6 billion to the economy noting that most British businesses that have faced labour shortage had benefited from being able to recruit widely from skilled labour.
— PTI |
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US economy may ‘contract’: Fed chief Washington, April 2 In prepared remarks to the Joint Economic Committee, the top official, however, did not use the word recession and also held out the possibility of the economy strengthening in the second half of the year. “The near-term economic outlook has weakened relative to the projections released by the Federal Open Market Committee (FOMC) at the end of January. It now appears likely that real gross domestic product (GDP) will not grow much, if at all, over the first half of 2008 and could even contract slightly,” Bernanke said in his statement. The world’s biggest economy expanded at a sluggish 0.6 per cent annual pace in the fourth quarter of 2007. Economic woes mounted with multiple crises-credit, housing and financial-hitting the country. “We expect economic activity to strengthen in the second half of the year, in part as the result of stimulative monetary and fiscal policies; and growth is expected to proceed at or a little above its sustainable pace in 2009, bolstered by a stabilisation of housing activity, albeit at low levels, and gradually improving financial conditions,” Bernanke said. — PTI
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Microsoft asked to pay 700-cr income tax New Delhi, April 2 The Commission of Income Tax Appeals, which is hearing a case filed by the IT department, has held that price charged for use of Microsoft’s software in India is royalty and tax is payable on it. It has determined that the royalty income is Rs 2,240 crore for the six years to 2005 (1999-2005) and not Rs 868 crore as originally assessed. Accordingly, official sources said, Microsoft’s estimated tax liability on royalty stands at Rs 700 crore, including interest. Reacting to the decision, Microsoft spokesperson in India said, “The case is an old issue relating to financial year 1999 to 2004 and for an overseas Microsoft entity. Microsoft believes that it is in full compliance with Indian tax laws and the income tax treaty agreement between India and the US.” Since it is an appellate order, Microsoft is reviewing the order and will determine the course of action accordingly, the spokesperson added. — PTI
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Tata Motors to list on Tokyo stock exchange
Tokyo, April 2 Tata, India’s top vehicle maker, last week announced a deal to buy luxury brands Jaguar and Land Rover from Ford Motor Co for about $2.3 billion. Later this year it plans to start selling the Nano, the world’s cheapest car at about $2,500. A spokesman for Tata Motors, India’s top vehicle maker, said he could not comment on the Nikkei report immediately.
— Reuters |
Gold down at Rs 11,820 Rupee recovers 13p Air India operations Lehman raises $4 b Suzlon arm bags order HPSEDC earns profit
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