New Delhi, May 16
Despite government’s efforts to curb inflation, prices of essential commodities continue to rise. Inflation for the week ended May 3 touched a 44-month high of 7.83 per cent as food continued to remain costly. Even though last week finance minister heaved a sigh of relief stating that inflation was stabilising, the situation continues to worsen and the UPA government continues to be under fire for putting the ‘aam aadmi’ through the hardship.

Now, the finance minister has no choice but to face the situation. He said: “Rising inflation is indeed worrying, but silver lining is that primary article inflation has declined.”

“Our expectation is that inflation will moderate. We are waiting for steel and cement price cuts to come into force. You have to be patient," the finance minister said on the sidelines of industry chamber function here.

Once again, he gave a veiled threat, saying “we reserve the right to take more administrative measures”. Going by the indications from the earlier comments made by the finance minister, there may be more rollback in prices of cement and steel in the coming days. However, surging crude oil continues to play truant and there is nothing much that the government or finance minister can do in the matter. The crude oil on Friday touched the $126 per barrel mark, adding to the rumours that the prices may touch $200 soon.

The finance minister also said, unless global crude oil prices decline, India would continue to witness "pretty high inflation" in the fuel group.

According to experts, the continuing upsurge in inflation is set to increase the dilemma of the government and the RBI on whether to address slowing growth or check rising prices. Meanwhile, the government also revised upwards the inflation figures for week ended March 8 to 7.78 per cent. This is substantial revision from the provisional figure of 5.92 per cent.

Economists say rising crude prices and depreciating rupee is offsetting fiscal measures taken by the government, leading to import of inflation in case of oil. During the week, prices of fruits and vegetables went up by 3 per cent, coffee 6 per cent, maize 4 per cent, spices and masoor by 1 per cent each, atta, coconut oil, khandsari also turned costlier. However, prices of cement, iron and steel fell.

New York, May 16
Warning that the world economy is now "teetering on the brink of a severe global downturn," the United Nations said it expects growth this year to be sharply lower at 1.8 per cent — nearly half of the 3.4 per cent growth estimated only three months ago.

A new report released on Thursday predicts that slowdown will be in all regions, with South and East Asia facing a major downturn where the growth would decline to about 8.5 per cent in the current year from 11 per cent last year. India, it says, too would face a slowdown.

UN said world economic growth next year would, however, be better at 2.1 per cent. The global economy expanded by 3.8 per cent in 2007.

In the African region, if the pessimistic scenario were to work out, economic growth would almost come to a standstill, down to 2.2 per cent in 2008 and 1.1 per cent in 2009, creating a major obstacle to the prospects of these countries achieving the Millennium Development Goals (MDGs). Latin America, which did better than expected in 2007, but had close trade linkages with the United States economy, is expected to suffer strong negative impacts of lowered demands for its exports during 2008 and 2009, leading to lowered growth performance. A worst-case scenario would see the "world economy come to a virtual standstill" if recent financial measures in the US fail to turn the economy around, and house prices continue to fall, with a severe tightening on credit, it warns.

To boost the global economy, the report calls for an internationally coordinated economic stimulus package to support US efforts, centred on the expansion of domestic demand in countries with savings surpluses, especially in Europe, the Arabian Gulf and East Asia.

Releasing the new report, the economists said the global economy has been adversely affected and still threatened by deepening credit crisis in affluent countries triggered by the continuing housing slump, the declining value of the United States dollar, persisting global imbalances and soaring oil and commodity prices.

The report issued by the UN's Department of Social and Economic Affairs says that much depends on developments in the US, which remains the prime driver of the global economy. To counteract inflation in food prices, the economists recommend improving supply and productivity through investment in irrigation techniques, infrastructure, improved seeds and fertiliser, and agricultural research and development.

In addition to removing supply constraints on vital commodities, such as food, and to stimulating global demand, the mid-year report entitled: "World Economic Situation and Prospects 2008" also says that deep reforms are needed in the mechanisms of international financial regulation and supervision if new problems are to be avoided. — PTI 

Chandigarh, May 16
The surplus foodgrain production in the country could open new vistas for exporters, in the wake of a global shortage in food grains. With the food production in the country exceeding the estimates, the government could review lifting the ban on exports.

An indication to this effect was given by the director-general of foreign trade, R.S. Gujral, while talking to TNS on the sidelines of a session with industry delegates at PHD Chamber here today. He said the Cabinet Committee on Economic Affairs would review the food grain availability in the domestic market, and then lift the ban on export of rice and wheat.

“The international prices of rice (non-basmati) have shot up to $ 1,000 a ton as compared to $350 a ton five months ago. Rice is not available with most of the developed countries, as most of the rice-producing nations have banned its export. It is perhaps for this reason that almost 10 lakh tons of rice was exported from India under the garb of transitional arrangements, after fake letters of credit were produced. If we were to lift the ban on rice export, it would bring windfall for the exporters. There has also been a severe global shortage of wheat, and after assessing the buffer stocks and the domestic market conditions, the government could lift the ban later this year,” he said.

Gujral said even though the minimum export price (MEP) of basmati rice had been increased to $1,200 a ton to curb exports, basmati rice is fetching a price of $2,000 a ton, and rice exporters are smiling their way to the bank. “In case the ban on export of wheat and rice and export curbs on milk products is lifted, India will definitely exceed the export target of $ 200 billion,” he said, adding that the export curbs on steel products, rice and milk products would impact the total export revenue.

The DGFT said the hybrid scheme, wherein incentives due for focused products being exported to focused markets are given to non-focused products and non-focused markets, would be implemented soon. Similarly, incentives on export of certain products of higher added value will also be given, after the industrial bodies give us feedback on these products and new markets by June 30, he added. 

New Delhi, May 16
Faced with a whopping Rs 2,00,000 crore revenue loss on fuel sales this fiscal, state-run oil firms have decided not to issue new domestic LPG connections and fix quota for the existing customers so as to make ends meet within the existing collections.

Marketing directors of Indian Oil, Hindustan Petroleum and Bharat Petroleum in a joint petition to the petroleum ministry yesterday suggested cost-cutting measures as their losses on sale of petrol, diesel, LPG and PDS kerosene mounted to over Rs 550 crore a day, a top official said.

Government's bar on oil firms to raise fuel prices despite cost of raw material (crude oil) doubling to over $120 a barrel, is likely to see the three firms end the current year with a revenue loss of Rs 200,000 crore. Last year, the revenue loss was Rs 77,304.50 crore.

"Oil companies are borrowing Rs 3,500 crore per month to keep their operations. Our borrowings (for the three firms) have reached Rs 65,000 crore. We have suggested measures that will at least limit the losses at existing levels," he said.

Stopping issuance of new LPG connections would help limit the Rs 305.90 per cylinder loss. Besides, quota per family will be fixed and expansion of retail network put on hold.

Other measures include stopping import of fuels like diesel, for which high international prices have to be paid.

Though the nation is short in LPG and diesel production this year, the companies have suggested managing demand within the existing production.

The oil companies, who are owned by the government, will need approval of the ministry for the suggestions to come into effect. — PTI 

Mumbai, May 16
Orchid Chemicals, which came into prominence recently for pharma major Ranbaxy acquiring over 14 per cent stake and later forging an alliance, today disclosed over 7 per cent stake purchase by another investor, believed to be acting on part of Pune-based Poonawala group.

According to a stock market disclosure made today to the Bombay Stock Exchange, Pune-based Adurjee & Bros Pvt Ltd has accumulated a 7.22 per cent stake in Orchid Chemicals through open market transactions. This stake is currently worth over Rs 125 crore.

The disclosure named Serum Institute of India Ltd, Chakan Investment Pvt Ltd and Fortune Interncontinental Pvt Ltd as persons acting in concert (PACs) for Adurjee & Bros.

Serum Institute is a leading vaccine maker and is part of Poonawala Group of stud farms fame. Cyrus Poonawala is the Chairman and Managing Director of Serum Institute.

According to the disclosure, Adurjee & Bros acquired 1,499,124 shares of Orchid Chemicals and Pharmaceuticals, accounting for 2.27 per cent stake, on May 14, taking its total holding to 47,56,116 shares, or 7.22 per cent.

According to the latest shareholding pattern data filed by Orchid, Adurjee did not figure among the shareholders having a stake of over 1per cent as on March 31, 2008.

It was not clear whether the stock purchases were financial or strategic investments. Officials of Orchid Chemicals and Poonawala Group could not be immediately contacted for any comment. — PTI 

Shimla, May 16
Telecom major, BSNL, has decided to provide computer on easy instalments along with broadband connection to popularise the service, which has not many takers in the hill state so far.

Stating this here today at a press conference organised to mark the World Telecommunication and Information Society Day, chief general manager of the Himachal Telecom Circle, Anil Kaushal, said lack of computer penetration was the main constraint in expansion of the broadband services. BSNL had extended the facility to as many as 160 stations, but the total number of broadband subscribers was only 12,500. There was a plan to expand the broadband capacity by 50,000 and to ensure that the people took advantage of it, the Nigam had tied up with a private company for providing computers priced in the range of Rs 14,000-Rs 20,000 along with the broadband connection. The subscribers would be required to pay Rs 600 to Rs 700 per month which would also take care of the maintenance of computer.

A similar scheme was in the offing for mobile phone connections under which very reasonably priced handset would be provided along with the SIM card. To ease congestion in the mobile network, the number of base transmitting stations (towers) would be increased from the existing 500 to 1,000 during the year. Similarly, the number of towers for WLL (wireless in local loop) would be raised from 194 to 400.

The total telephone connections in the state stood at 10,12,258, which included 5,20,328 cell phones, 4,09,346 landlines and 82,854 WLL connections. As the hill state was prone to cable thefts, many subscribers were shifting from landlines to WLL connections. The nigam had taken up aggressive expansion of the Data Network using the state-of-the-art MLLN (Managed Leased Line Network) during last year, increasing the number of stations covered from 15 to 165, which would take reliable data connectivity right down to the bloc level.

A convergent billing and customer care system was being implemented under which the subscriber would be given a single integrated bill for availing various services. In the first phase, the system would be implemented in the Shimla Service Area and it would be extended to remaining five areas in the second phase. It would also provide anytime and anywhere bill inquiry facility, online self-registration for various services and a centralised grievance handling mechanism.

New Delhi, May 16
The standoff between the Department of Telecom (DoT) and the advisory body, Telecom Regulatory Authority of India (TRAI), over the issue of the entry of foreign players in 3G services in India may finally come to an end with the Prime Minister taking the decision.

Communication and IT minister A Raja today said that he would meet Prime Minister Manmohan Singh before arriving at any decision to resolve the standoff.

Speaking to reporters on the sidelines of the Telecom Equipment Manufacturer's of India's award function, Raja said: "I, myself, want to discuss the issue with the Prime Minister and finance minister P Chidambaram whether participation of more players in 3G, be allowed or we should go by TRAI recommendation".

The involvement of more players, especially the foreign ones, would fetch more revenue for the government, the DoT feels.

However, TRAI had rejected DoT's proposal to reconsider allowing foreign players to offer 3G telecom services. According to TRAI, the existing licensees are in a better position to deliver 3G services efficiently and at a faster pace given the available infrastructure.

TRAI felt that allowing foreign players would have an adverse effect on the Indian telecom industry at this particular junction when it is poised for a major growth.

BRIEFLY

SAIL Q4 net up 25 pc
New Delhi: Steel Authority of India Ltd (SAIL) on Friday said its net profit for the fourth quarter ending March 2008 increased 24.97 per cent to Rs 2,376.76 crore as compared to Rs 1,901.88 crore for the corresponding period last year. The total income for Q4 FY08 grew 33.37 per cent to Rs 14,168.50 crore as against Rs 10,623.83 crore in the same period a year ago. — UNI

Blue Star’s eco-friendly ACs
New Delhi: Blue Star has announced the launch of a wide range of eco-friendly and energy- efficient variable refrigerant flow air-conditioning system. The VRF is a sophisticated centralised air-conditioning system that cools multi-zone spaces with varying heating and cooling needs through intelligent controls. — TNS

L&T, GE Energy in pact
Mumbai: Engineering and construction major Larsen and Toubro on Friday said it has entered into a strategic partnership with GE Energy for focusing on the Indian power generation market. As per the agreement, GE Energy would provide its power plant main control system products to L&T, the company said in a filing to the Bombay Stock Exchange.— PTI

HSIIDC offers flatted factories
Chandigarh: The Haryana State Industrial and Infrastructure Development Corporation (HSIIDC) has decided to allot 40 units of flatted factories at Sector 59, Faridabad, to the entrepreneurs planning to set up industries involving stream-specific lightweight machinery. A spokesman of the corporation said here on Thursday that the covered area of each industry would be 926 sq ft at a tentative cost of Rs 28.50 lakh. The last date of receiving the application is June 27.— TNS

Exide Industries’ launch
Rohtak: Exide Industries has started its IFC centre and launched IT 650 inverter tubular battery here. The centre was inaugurated by S.Kalla, vice-president (north), Exide Industries, here on Thursday. The Rohtak charging centre will have the capacity to supply 3,000 charged batteries every month.— TNS