New Delhi, April 18
Amidst increasing criticism by the Left parties against the free market forces in the wake of price rise, Prime Minister Manmohan Singh today said his government has followed 'hands-off' policies and will remain committed to liberalisation.

"We remain committed to economic reform and liberalisation... in ancient India, a monarch was regarded as a good king if he did not interfere too much in the life of the people. That has been our guiding principle as well," Singh told delegates of the IISS-City India Global Forum attending an international conference here.

Singh said his government was also committed to an environment of freedom "in which creativity and enterprise of our people can find its full and free expression".

Inviting overseas investors to bring in more funds into the country, he said globalisation was both a challenge and an opportunity and India would like to be "an active participant in the process of globalisation".

Prime Minister's assurance to the investors assumes importance in the wake of Left parties, which support the UPA government from outside, launching an agitation against the government, which they said, was promoting "monsters of market forces".

The Left parties have been staging street protests against inflation which has crossed seven per cent mark. They also attacked the government in Parliament on the same issue spiralling prices along with the Opposition.

The Prime Minister asked the overseas investors to stay invested in the country, "because for India the best is yet to come".

Quoting J M Keynes who had said that investment was an act of faith, the Prime Minister said, "I invite you to have faith in India."

The country has followed a "successful strategy" of reintegrating into the world economy, he added.

He said the policy of liberalisation has moved forward since 1991 despite changes in the government over the past 17 years.

"Different political parties have come to power in Delhi but none has reversed the direction of policy we initiated in 1991. India is today more globally integrated and is confident about he said. — PTI

New York, April 18
India’s two leading conglomerates, Tatas and Mukesh Ambani-led Reliance Group, have made it to the league of the world’s 25 most innovative companies, riding on the cheapest commercial car Nano and an aggressive growth path, respectively.

In the list of world’s 25 most innovative companies released here today, Tata group is ranked at the sixth position, while Reliance Industries is at 19th spot.

The list, published in the April 28 edition of BusinessWeek magazine that hit the newsstands today, has been compiled by the US financial publication in collaboration with Boston Consulting Group.

Both Tata and RIL have made it for the first time to the annual list that is topped by Apple Computer, the maker of iPod music players and Mac personal computers.

Apple is followed by Internet search giant Google, Japanese auto major Toyota, industrial conglomerate General Electric (GE) and software behemoth Microsoft in the top five.

About Tata group, BusinessWeek said: “Mumbai-based conglomerate jumps onto our list for the first time, fuelled by its paradigm-busting $2,500 ‘Nano’ car for the masses”.

About RIL, it noted “the Indian petrochemicals giant made it onto our list this year thanks to fans of its aggressive growth. But its ambitious plans to reach into grocery retailing, which is dominated in India by small shopkeepers who have rebelled against corporate entrants, have faltered,” it added. — PTI

New Delhi, April 18
Britain’s clothing and food retailer Marks & Spencer (M&S) will set up of a joint venture firm with Mukesh Ambani-led Reliance Retail at an investment of £29 million (around Rs 230 crore) to mark its foray into India.

The British company will hold a 51 per cent stake in the JV, to be named Marks and Spencer Reliance India Pvt Ltd, while the remaining will be with Reliance Retail.

“India is a very exciting opportunity for Marks & Spencer and a market where there is the potential for M&S to become a major retail brand. Reliance Retail is the ideal partner for us to accelerate our expansion and create the opportunity to open much bigger M&S stores,” Marks & Spencer chief executive Stuart Rose said.

The new joint venture will have the right to operate M&S stores in India, selling items such as homewares and clothing. It will aim to open at least 50 new stores in the country over the next five years.

Planet Retail, Marks & Spencer’s existing franchise partner in India, will continue as a franchisee in respect of the 14 existing stores.

The announcement is part of Marks & Spencer’s plans to grow its international business to 15-20 per cent of group revenues within the next five years. — PTI

New Delhi, April 18
ICICI Bank managing director and CEO K V Kamath today said the CRR hike by 0.5 per cent will have an impact on profitability of banks, but its effect on interest rates is not clear as of now.

"There is going to be profitability impact on banks, that I think is given because whatever is kept aside as CRR, you are not going to get interest on it," Kamath told reporters on the sidelines of convocation function of International Management Institute here.

To a query that whether banks are going to raise rates, Kamath said it is a decision that they will have to take in due course. "You can always increase the interest rates, but there is an issue that there has to be a demand for credit...

You need to see what in competitive context people do before you go for any rate adjustment," he said.

The Reserve Bank yesterday raised the Cash Reserve Ratio (CRR) — the proportion of depositors' money that banks have to park with the banking regulator — by half a per cent to 8 per cent.

The move, which came ahead of RBI's annual credit policy that is to be announced on April 29, would take out Rs 18,500 crore from the banking system.

Kamath said there was ample liquidity in the system and only a small amount was being sucked out. He said "there is a strong pipeline of investment and we are not seeing any slowdown in that so far". — PTI

New Delhi, April 18
The government, after all the hue and cry of rising inflation which is touching 7 per cent mark, has resorted to taking some fiscal actions wherein it has told the Reserve Bank of India (RBI) to curb the excess money in the economy.

The RBI has resorted to using a fiscal measure, which includes an increase in cash reserve ratio (CRR) that was hiked to 8 per cent yesterday.

The increase means that all commercial banks in the country will have to deposit more money with the RBI, which in turn means that they have less money to lend to the customers and invest in trade.

The reasons for excess money in the economy are due to fund flows from western countries. In the US and Japan (the industrialised economies), the banks have resorted to cutting interest rates so that people take credit from the banks and use it for economic activity.

However, when such a situation arises in one part of the world, the banks in other countries resort to increasing the rates to balance the effect of low interest rates, say economists.

The fund flow situation is the same in India, China, Brazil, and Russia where the money is flowing from industrialised economies so that it can be invested in either the stock markets or other businesses.

India is facing the situation of plenty of money coming into the economy but there are not enough goods that are produced, say economists.

This situation of excess money coming in and demanding goods and services leads to inflation, which by definition means too much money chasing too few goods/services.

The RBI, in such a situation, takes measures like hiking CRR as it has been doing in the past. This way the government plans to control inflation though it will take 6 -8 months.

The banks will make credit and loans more expensive because they have less money with them, thus, making it dearer.

The fallout is that people will go slow with making purchases and since businessmen’s profits are hurt, they will produce less. In turn the economy will slow down a little.

New Delhi, April 18
Air travel in the future could become further costly if the suggestion of the Parliamentary Committee on Transport, Tourism and Culture is accepted by
the government.

The committee in its 133rd report tabled in Parliament yesterday has asserted that a higher user development fees would significantly affect the economy and the viability of airlines, and as such has suggested that a minimal amount be imposed on the passengers for using the airports.

“Making air travel expensive by such development fees will have a significant impact on the overall economy, especially on the tourism, commerce and hospitality sectors,” the committee has said.

Calling development fee as a ''new syndrome'' in the aviation sector, the committee has pointed out that the main task of the proposed Airports Economic Regulatory Authority (AERA) will be to determine the quantum of such fees.

It has said that any amount of development fee will definitely increase the cost of air travel which will finally have an impact on the viability of the airlines.

It hoped that that the proposed regulator would definitely play a positive and critical role in determining development fees and it suggested that this proposed fee should be fixed by the AERA and should not dampen the passenger demand.

Patiala, April 18
Noted banker and economist Dr Arun Kumar Trivedi, based in the UK, feels that a multi-pronged strategy is required to control inflation which has hit the common man in India badly.

In an interview with The Tribune, Dr Trivedi said, “There is no single area we can clamp down on to curb inflation. We need to inflict a couple of measures. We have to balance growth and inflation”.

A fellow of the Securities Investment Institute (SII), London , and a life member of the Indian Institute of Banking and Finance, Mumbai, Dr Trivedi says that GDP growth numbers have to be reworked.

He said, “We did see investment or speculator demand in real estate. There are people holding assets with a view to sell them at a profit at a subsequent date. We have been seeing such demand moving out. The government and regulators have to shift their approach to curb inflation, but without sacrificing growth model and growth rate. Profiteers and speculators have to be brought under pragmatic provisions to ensure orderly growth."

A life member of the Indian Society for Training and Development, New Delhi, who has been on a holiday to his native town of Patiala, Dr Trivedi has authored a number of books, including “International Banking Management”, "International Trade Finance", "Treasury Operations and Risk Management", "Credit Risk", and "International Trade Finance — A Pragmatic Approach".

On the banking sector, Dr Trivedi feels that besides repealing and modifying various regulatory provisions, there is a need to build competencies amongst the middle and senior-level operators in the area of risk management, trade finance, structured finance and treasury operations to handle ever- increasing volumes and values.

The government needs to consider bifurcating RBI’s role as a regulator and monetary authority and to bring it well focused system with a central bank and make it comparable with central banks in overseas scenario.

Dr Trivedi, speaking about his latest publication, "International Trade Finance: a pragmatic Approach" said that the book co-authored by him was meeting needs of the global trading system undergoing a period of transition.

Bangalore, April 18
Wipro today reported a consolidated net profit of Rs 3,283 crore for 2007-08, 11.57 per cent more than the same period last year.

It had earned a consolidated net profit of Rs 2,942.3 crore for the year ended March 31, 2007.

Revenues jumped by 33 per cent year-on-year to Rs 19,957 crore, Azim Premji, chairman of the company, said at a conference.

The company declared a final dividend of Rs 4 per equity share on shares of Rs 2 each (200 per cent).

This, coupled with an interim dividend of Rs two per share, would take total dividend to 300 per cent at Rs 6 per share.

BRIEFLY

India, Mexico ink pacts
MEXICO CITY: India and Mexico have signed two agreements for cooperation in civil aviation and energy sectors as part of their efforts to strengthen bilateral ties. Union minister for non-conventional energy Vilasrao Muttemwar and Mexico’s minister for foreign relation Patricia Espinoza and secretary of energy Georgana Kessel inked the agreements here on Thursday. — PTI

Indiabulls joint venture
NEW DELHI: Indiabulls Financial Services on Friday said it has entered into a joint venture agreement with Sogecap, the life insurance subsidiary of Societe Generale of France, for its upcoming life insurance venture. — UNI

Suzlon Energy bags orders
NEW DELHI: Suzlon Energy on Friday said its subsidiary has secured orders totalling 200 MW of capacity for wind farm projects in China. The company said the first order is from Ao Lu Jia New Energy Development for 148.5 MW capacity wind turbine abd the second order is from Beifang Longyuan (North Union) for 50 MW capacity wind turbine. — UNI

RCom adds 1.62 m new users
NEW DELHI: Reliance Communications (RCom) said it added 1.62 million new mobile users in March. A company official said the net additions from January to March this year stood at 4.83 million. RCom added 1.6 million mobile users each for the first two months. — PTI

Infosys in pact with US firm
NEW DELHI: Infosys Technologies on Friday said it has signed a five-year contract with US-based Conseco to provide development and maintenance services to its key business applications. Infosys will support several mission-critical IT systems that power Conseco’s business, including new business, claims and marketing, it said.
— UNI

British Airways offer
NEW DELHI: British Airways (BA) on Friday said its business travellers could opt for an upgrade to first class while flying from India to the UK. The special offer is available to passengers who book a flexible club world return ticket from Mumbai, Delhi and Bangalore for travel until August 31, a BA spokesperson said. — PTI

Forex reserves up
MUMBAI: India’s forex exchange reserve rose by $482 million from $312.3 billion for the week ended April 11 from $311.8 billion in the previous week. Foreign currency assets shot up to $301.8 billion during the period, up $426 million from $301.3 billion, the RBI said in a report here on Thursday. — PTI

Yash Birla’s plan
MUMBAI: Yash Birla group plans to invest Rs 300 crore in the healthcare sector in the next three years through its Birla Wellness vertical, a top company official said here. “We will be investing Rs 300 crore in the next three years to enter the whole spectrum of health and wellness,” Yash Birla Group chairman Yash Birla said. — PTI