New Delhi, May 20
The State Bank of India today assured the government that its decision to stop any fresh loans to finance new tractors and other farm mechanisation activities is only a temporary measure and will be reviewed after the Centre’s debt waiver scheme on farm loans is implemented by June-end.

The SBI’s circular putting on hold all new loans on tractors has created panic not just in the farming community but also in the UPA government, as this decision was seen to undermine the ruling combine’s populist farm loan waiver scheme announced by finance minister P.Chidambaram in this year’s Budget. A worried union minister Vyalyar Ravi asked Chidambaram to intervene as such a decision could have serious political ramifications.

P.K.Bansal, minister of state for finance, got in touch with the SBI authorities after he was swamped by anxious callers who wanted to understand the implications of the bank’s latest circular.

Clarifying that this is SBI’s independent decision, Bansal said he was told that the bank resorted to this measure as it has a large portfolio of tractor loan accounts with high overdues. The State Bank of India is the largest bank in the country and gives the maximum amount of loans to farmers across the country. “The bank has assured us that this is not a permanent measure and will be reviewed after June 30,” Bansal emphasised.

The minister clarified that the Centre’s loan debt scheme also provides relief to distressed farmers who have taken loans for financing tractors and other farm mechanisation activities, adding that as promised, this scheme will be implemented by June-end.

The SBI had said since such farmers can benefit from the finance minister’s Budget announcement of farm-loan waiver of Rs 60,000 crore, the bank cannot afford to give out loans for tractors and farm mechanisation - which account for more than half in the agricultural loan sector. The bank also took this decision as more farmers had stopped repaying loans since the announcement of the debt waiver scheme.

Bansal explained that banks are mandated to give 18 per cent of their total net bank credit to the agricultural sector failing which they have to make an appropriate contribution to the Nabard-managed rural infrastructure development fund.

Although public sector banks have sufficient functional autonomy, the government can indirectly lean on them to ensure that they meet their social obligations. The finance ministry will be forced to resort to such arm-twisting in case other nationalised banks also decide to emulate the example set by the SBI.

New Delhi, May 20
The finance ministry is considering to exempt special economic zones from payment of export duty on steel after the issue has been raised by the commerce ministry and developers, including Reliance and Essar.

"We have received representations for exempting SEZ units from export duty on steel. The issue is with the tax division and a decision is expected shortly," a finance ministry source said.

The Central Board of Excise and Customs on May 10 had levied export duty of 5-15 per cent on various iron and steel products. The notification is also applicable to supplies from the domestic tariff area (DTA) to SEZs, which has hit the SEZ units, especially the manufacturers of engineering goods and auto components.

"SEZ units are already exempted from ban on cement. Since they are meant for generating additional economic activity in the country, the taxes should not be imposed on them as it would hit exports and jobs," Export Promotion Council for EOUs and SEZs director- general L.B. Singhal said.

Several SEZ units manufacturing goods such as auto components have protested the government's move and approached the ministry of finance and the commerce ministry on the issue. — PTI 

Chandigarh, May 20
Notwithstanding the shortage of mustard seed, leading to a hike in prices of mustard oil, the ministry of consumer affairs has relaxed the tolerance limit for the weight in packaged mustard oil.

Highly placed sources have informed TNS that the tolerance limit in weights and measures has been relaxed from 1 per cent to 1.5 per cent. This means that no punitive action will be taken against the mustard oil manufacturer if the weight is 15 ml less than the total content of 1 litre, as specified on the bottle. Earlier, the companies were given a weight relaxation of 10 ml.

With the prices of mustard oil remaining at an all-time high, in spite of the export curbs announced by the government, the consumers are going to pay more and get less oil. The poor mustard production this year (down by 35 per cent) has led to most mustard oil manufacturers taking a call on increasing the prices. Mustard oil is now selling at Rs 68-75 a litre, an increase of Rs 2 a litre.

The mustard seed production in the country this year is estimated at 4.5 million tonnes, down from 6 million tonnes last year. "The supply constraints are likely to continue this year, even as the demand is likely to increase. In this scenario, a hike in mustard oil prices is imminent," says Vikas Puri, managing director of Puri Oil Mills, adding that even NAFED is finding it difficult to procure mustard.

Mustard cultivation has been hit hard this year on account of a low temperature in February-March and unseasonal rainfall. The worst hit are Rajasthan and Haryana, where the low production is coupled with a low oil content in seed. A senior official in Haryana Cooperative Supply and Marketing Federation (HAFED), requesting anonymity, said the oil content in mustard is just 30 per cent, as compared to 32 per cent last year. "The total annual edible oil consumption in India is 120 lakh tonnes, while the total production in the country is just 70 lakh tonnes. But with low production this year, we will be importing much more than 50 lakh tonnes of oil, which will lead to a further price hike," says the official in HAFED.

As a result, the price of mustard has shot up and most of the oil manufacturing companies are finding it difficult to procure mustard. As against a minimum support price of Rs 1,715 per quintal, the mustard is available at Rs 2,400 per quintal. With high input costs, another price hike in mustard oil is inevitable. 

Chandigarh, May 20
Edible oil maker Puri Oil Mills is developing the first botanical biofungicide from allylisothiocyanate (an extract of mustard seed), in association with ITC. This biofungicide will help in preventing diseases in potato and vegetable crops.

The company, alongwith ITC, is now in the process of conducting collaborative field trials for the biofungicide in Uttar Pradesh, Andhra Pradesh and Haryana, and this will be available across the shelf by 2010. Formulations of this mustard seed extract are also being developed to make a mosquito repellant.

Talking to mediapersons here today, Vivek Puri, managing director of Puri Oil Mills, said it plans to set up a manufacturing plant of mustard oil in Gujarat in order to expand production capacity. "The main motive of setting up this plant is sufficient availability of oilseeds in Gujarat. Moreover, it would also help us in tapping the export opportunities," he said. The company has three manufacturing plants at Moga in Punjab, Damtal in Himachal Pradesh and Bahadurgarh in Haryana with a monthly capacity of 1,500 metric tons.

The company is also planning to foray into biofuel sector as part of its strategy to extend its core competitiveness. Having recently diversified into hydropower sector, the company is working on developing 15 MW of power in Himachal with a total project size of Rs 100 crore. They are also producing canal-based power projects of 2.8 MW in Haryana which will be operational by 2009. 

New Delhi, May 20
Anil Agarwal-promoted Sterlite Opportunities, which had quietly hiked its stake in Hindustan Zinc in 2003, is back in action. Hindustan Zinc, which had offered to purchase the residual share of the government in the company, has once again initiated the process. However, there is one hitch. The sale of the company had been challenged in the Supreme Court, where the writ petition has been pending for a long time. The Core Group of Secretaries that met earlier this month had sought the views of Department of Legal Affairs on the residual stake sale.

The Department of Legal Affairs had sought the views of the Attorney General Milon Banerji, who has written that `since there is no stay order or injunction on the company, consequently it cannot be said that there is any legal obstacle in considering the offer of residual stake sale without waiting for the judgment of the public interest litigation.’

The Attorney General has also said that it is open to the government to sell part or whole of the residual share of the company while making it expressly subject to the outcome of the writ petition pending in the Supreme Court.

Anil Agarwal-owned Sterlite Opportunities and Ventures Ltd has offered to purchase the entire shareholding of Hindustan Zinc Ltd, held by the government by paying a fair value for those shares, which they have suggested to be determined on the basis of its current market price.

The core group of secretaries, which had met in mid April, had decided that ministry of mines might send the offer made by the strategic partner, Sterlite Opportunities, for buying the residual shares of HZL, to the Department of Legal Affairs, which will examine the proposal and give its comments on whether there were any legal obstacles to considering the offer without waiting for the judgment in the PIL pending in the Supreme Court.

Besides, the core group of secretaries wanted to know that in case Department of Legal Affairs confirms that the offer of strategic partner could be considered without waiting for the Supreme Court’s judgment, then the ministry of mines may submit the matter to the Empowered Group of Ministers. 

Chandigarh, May 20
The dollar is losing sheen as the currency of world trade. It is being replaced by euro. Industrialists in China, which has emerged as a leading exporter in the world, prefer to strike deals in euro. Fluctuations in its price in the international market has made the major world trade centres turn their back towards the dollar that remained a dominating currency for world trade for several decades.

R.S. Sachdeva, co-chairman, Punjab PHS Chambers of Commerce and Industries, who recently visited China, said world trade was switching over to euro. The dollar was not on their priority list, he added.

A delegation of industrialists from Punjab that visited China recently also faced similar situation. B.S. Anand, senior vice-president, Mohali Industries Association, said: “We were a delegation of 41 industrialists led by V.K. Janjua, director, Punjab Industries. Whenever we talked about business, the Chinese asked for payment in euro,” Anand said.

Sachdeva stated that even in Europe, euro was a preferred currency and countries like Pakistan, which is among the major importing countries, were happy over the decline in the fortune of the dollar in recent years as “now, for importing material they have to pay less,” Sachdeva said.

Euro’s current price is around Rs 65 and the dollar has been fluctuating between Rs 39.50-Rs 42 . A few years ago, the dollar was sold in the black market in countries like India, Pakistan, and Russia. Sources said even the Arab world is preferring euro to dollar as they suffer huge financial losses in case of decline in the price of dollar in the international market.

Similarly, Indian exporters have been raising hue and cry and demanding relief from the Centre because of fluctuation in the price of dollar in the Indian market. Decline in its price in terms of rupee had hit the profit margins of the exporters.

Mumbai, May 20
Wind power major Suzlon Energy has reported a 10.2 per cent rise in net profit for the quarter ended March 31, 2008 at Rs 482.55 crore as against Rs 437.82 crore in the corresponding quarter previous fiscal.

"The Pune-based company may look at selling some stake in REpower in which it holds 34 per cent stake and doubling capacity in China," Suzlon Energy's CMD Tulsi Tanti told reporters here.

Total income of the company was at Rs 2,128.6 crore for the March quarter from Rs 1,608.56 crore for the quarter ended March 31, 2007. — PTI

BRIEFLY

M&S to open up to 50 stores
London: British retailer Marks and Spencer, which has joined hands with Mukesh Ambani-led Reliance Retail in India, on Tuesday said it plans to open up to 50 new stores in the country over the next five years. The new stores would be in addition to the existing 14 franchise stores operated by M&S in the country, the company said while announcing its annual results here.— PTI

Educomp buys 51% in US Co
Mumbai: E-learning solutions provider Educomp Solutions on Tuesday said it has invested $24.5 million for acquiring 51 per cent stake in US-based Learning.com, a provider of web-enhanced instruction. Through this deal, Educomp has got distribution access to over 800 districts and leverages its substantial content development and IT capabilities to reach out to North American markets.— PTI

Jet, United Airlines in pact
Mumbai: Private sector carrier Jet Airways on Tuesday said it has entered into an agreement with the US-based United Airlines for codeshare and frequent flier programme benefits for their customers. The codeshare agreement is expected to begin around November 1, the company said in a filing to the Bombay Stock Exchange. — PTI

L&T bags Rs 635-cr orders
New Delhi: Engineering and construction major Larsen and Toubro (L&T) on Tuesday said it has bagged four orders worth Rs 635 crore for EPC electrical projects from UAE and Oman. The projects will be executed by the Electrical Projects Gulf Operations Vertical of L&T`s Construction Division, the company said in a statement. — UNI

Future Generali initiative
Mumbai: Future Generali, the insurance joint venture between Kishore Biyani-led Future Group and Italian major Generali Insurance, on Tuesday launched Mallassurance, a unique initiative to sell insurance policies at the malls. The policies, both life and non life, will be available through kiosks and Future Money outlets in select malls for a premium of as low as Rs 49, Rs 99 and Rs 199, Future Group CEO Kishore Biyani told reporters here.— PTI