New Delhi, July 8
With Left parties withdrawing support to the United Progressive Alliance (UPA) government today, India Inc hopes the slow-moving economic reforms programme will now be put on fast track.

From key decisions pertaining to the financial sector to further opening up of the Indian economy to foreign investors, the government had its hands tied down by the crucial support from Left parties.

These, the corporate sector feels, can now see the light should the government survive following support from the Samajwadi Party, which has been known to be supportive of the private sector when it was in power in Uttar Pradesh.

“The nuclear deal will now come to a logical conclusion. The economic reforms will re-commence,” said D.S. Rawat, secretary general, Assocham.

An immediate reaction also came from the stock market where equities staged a smart rally and made up for some of the lost ground minutes after CPM general secretary Prakash Karat announced the withdrawal of support.

The sensitive index (Sensex) of the Bombay Stock Exchange (BSE), which had lost 476.03 points in the morning, immediately cut its losses to 208.8 points, or 1.54 per cent.

“Left leaders were creating hurdles in implementing some decisions like foreign direct investment in insurance sector,” said D.H. Pai Panandikar, corporate analyst and former chief, Ficci.

“The government can now think of opening up the insurance sector,” he said, adding one of the important issues, which the Left was consistently opposed to, was allowing 49 per cent foreign investment in the insurance sector.

Senior functionaries of the Confederation of Indian Industry, however, were unavailable for immediate comment, but some members hoped the realignment within the dynamics of the UPA government would result in reforms being put back on track.

“The Left leaders were never creative in their approach about issues of national importance. They were acting more as activists than responsible coalition partners,” said Dalip Kumar, senior economist with the National Council of Applied Economic Research.

“The pace of reforms, however, will depend upon the kind of support which the government now gets from its new allies like the Samajwadi Party,” he added. 
— IANS

Mumbai, July 8
The Indian corporate sector is all set to reap the benefits of India signing the nuclear deal with the US.

A clutch of Indian companies which has honed their skills in undertaking engineering, procurement and construction (EPC) contracts for the public sector Nuclear Power Corporation (NPC) are waiting for the deal to go through before they make major announcements.

Those in the fray include established names like the Tatas, L&T, Kirloskars, both factions of Reliance, Hindustan Construction and new entrants like the GMR group and Punj Lloyd.

Biggies in the power sector like Tata Power, Anil Ambani’s Reliance Infrastructure, and the GMR group have been actively lobbying for private sector companies to set up nuclear power generation plants. So far, this sector is tightly under the control of the NPC.

Prime Minister Manmohan Singh has said the government was still to take a view on allowing the private sector into nuclear power generation. However, the feeling is that the floodgates would be opened for them during the term of the current Lok Sabha.

On the other hand, companies that provide the picks and shovels to nuclear power generation companies are all set to benefit immediately.

Sanjay Kirloskar, managing director, Kirloskar Brothers, told analysts recently that the company had a tie-up with Bechtel to provide pumps for nuclear power plants. Kirloskar Brothers had already provided pumping equipment to existing nuclear facilities like the Kalpakkam, Kaiga and the Tarapur Atomic Power Station plants.

L&T, too, foresees big opportunities following the deal. “At present, the nuclear segment contributes 3 per cent to the turnover. We expect it to go up to 7 per cent in the next few years if the deal is signed,” Anil M. Naik, chairman and managing director, told reporters in Hyderabad today.

New players like Punj Lloyd and the GMR group are actively scouting for partners around the world to be part of the game. These companies are said to be in talks with international majors like Westinghouse and General Electric for tie-ups.

Many of these companies are now in the process of restructuring their business into several verticals so that they are able to dedicate manpower to the emerging opportunities in this sector. Two of the players, L&T and Hindustan Construction Company have already announced a demerger of various divisions.

Already some of the public sector companies have signed preliminary contracts with prominent US nuclear suppliers over the past two years.

Lima, July 8
Reliance Industries (RIL) has signed an agreement with Peru’s Perupetro to jointly explore for oil and gas in the Andean country, the president of Peru’s state-run firm has said.

“We’ll be formalising the agreements reached these past weeks and in the coming days we will provide details of the joint exploration venture in areas that hold oil and gas potential,” Cesar Gutierrez told Peru’s official Andina news agency yesterday.

The two firms are likely to bid in the Peruvian government auction of 22 blocks with hydrocarbon potential, he said, adding that the auction was scheduled to open in September.

Earlier this year, Reliance acquired 90 per cent stake in an oil block in the Andean region of Puno in Peru from Irisn company Pan Andean Resources.

Reliance Industries CEO and president (oil and gas) P. M. S. Prasad had on April 30 said his company had signed an agreement to take 90 per cent in Block 141. Pan Andean will hold the remaining 10 per cent in the block.

Gutierrez said Reliance had an aggressive expansion plan in Peru, which it believes holds great potential in hydrocarbon deposits. — PTI

Islamabad, July 8
Pakistan's economy has been in free-fall mode in the first 100 days of the new coalition government, with inflation at 19.2 per cent, forex reserves plunging by $2.1 billion and the rupee depreciating by Rs.8.3 against the US dollar.

Public debt during this period has swelled by Rs 373.5 billion or by Rs 3.70 billion per day, The News reported Tuesday, saying: “These shocking disclosures based on hard facts were gathered after deep investigation”.

Pakistan's external debt stood at $45 billion as on March 31, 2008, but the rupee depreciated by 11.7 per cent during the March 31-July 7 period, translating into a massive increase in the public debt by Rs 373.5 billion.

Quoting a top official of the finance ministry, The News said every rupee the Pakistani currency depreciated increased the public debt by Rs 45 billion.

Market capitalisation had massively deteriorated by Rs 933 billion from Rs 4,623 billion on March 31, 2008, to Rs 3,690 billion now.

The stock exchange went down by 3,248 points or 21.5 per cent, from 15,126 on March 31, to 11,878 on July 7 “just because of the non-availability of required political stability which guarantees economic activities in the country,” The News said.

Inflation has also “massively increased” up to 19.7 per cent from 14.1 per cent before the installation of the coalition government, it added.

“The fast deteriorating economic indicators show that the economy is not on the radar screen of the government. This is quite evident from the fact that there is no resolve in the corridors of power to provide stable, cohesive political environment to handle the current economic challenges the country is facing,” the newspaper said. — IANS

Chandigarh, July 8
With cellphone operators and mobile phone manufacturers seeing an immense growth potential in the rural sector, they are now devising new ways of trying to grab the largest share of the rural pie.

From launching low-cost handsets to bring down the tariffs and organising street plays to advertise, the real fight among telecom competitors is now being fought in the rural hinterland.

It is believed that of the next 250 million people expected to go mobile, at least 100 million will come from rural areas. Though the rural mobile penetration is highest in Punjab (20.69 per cent), followed by Himachal Pradesh (17.09 per cent), Kerala (10.63 per cent) and Haryana (10.20 per cent), most companies are now sweating it out by hardselling their products and services in the rural areas of the region.

Though state-owned telecom behemoth BSNL still owns lion’s share in rural areas, private competitors are fast closing ranks. Manoj Kohli, president and CEO of Airtel, agrees that rural India represents the next big growth opportunity for mobile service operators. “We are fast rolling out our infrastructure so that we are able to reach out to 90 per cent of villages in the next two years. Brand promotion in these areas is being done through street plays,” he says.

Raghuvesh Sarup, head, GTM, mobile portfolio, too, agrees that the real growth for the company will now be from the rural sector. “We have launched various models of low-cost mobiles, with an entry-level handset available for Rs 1,300. Since these mobiles are user-friendly and sturdy, we enjoy a sizable market share in the rural sector and are working towards creating better solutions on them,” he added.

Spice Telecom, too, has initiated a unique advertising campaign by launching a ‘People Phone’, with lifetime-prepaid connection at Rs 599. The telecom company will also be organising chabeels at the village common places to spread awareness about their products and services. As of now, the company’s rural penetration is 20 per cent, and they are targeting an increase of 50 per cent this year.

Johannesburg, July 8
Amid continued acrimony between the Ambani brothers over a deal with MTN, disappointment has set on shareholders of the South African telecom major as exclusive talks for a possible transaction are drawing to a close today without any clarity, local media said.

“Yesterday’s lack of news will force the two mobile groups to issue some sort of update today, when their 45-day period of exclusive talks ends,” The Business Day reported here.

Among the various probabilities being talked about, the report said: “The safest bet is that they will simply announce an extension to the exclusivity period, precluding any other player from making overtures to MTN." However, some expect “MTN to say the exclusivity is over, enabling it to assess other less complicated offers while it continues to engage with Reliance.”

The report also noted there could be an option to declare the deal is “off completely” and the fourth, but highly unlikely, option “would be news that a deal had been concluded, along with details of how they would structure some kind of share swap.” A day before the deadline, the two warring camps in India engaged in a strong exchange of words with both sides spurning offers of talks made by the other.

RCom-MTN talks have been hit by uncertainties ever since Mukesh Ambani-led RIL claimed right of first refusal in a majority stake in the Anil Ambani group firm and also threatened legal action if any deal with the South African firm breached its rights. The two firms had announced 45-day exclusive negotiations for a possible deal, estimated to create an estimated $70-80 billion worth entity. The talks are scheduled to end today, after which further clarification is expected on the matter. — PTI 

New Delhi, July 8
The government may have managed to break all previous records as far as procurement of wheat for the central pool is concerned, however, it will not be able to achieve the same in case of rice.

Though officials are quite upbeat, the government will not be able to reach the procurement target of 276 lakh tonnes for rice till September, thereby falling short by almost six lakh tonnes for the 2007-08 marketing season.

The officials admit that so far 264.27 lakh tonnes, or rather 260.75 lakh tonne to be precise since Punjab has not given 3.52 lakh tonne of custom milled rice to the central pool, has been procured. And the total procurement is likely to reach around 270 lakh tonnes.

The fact is that rice procurement in the current season has been better than 251.07 lakh tonnes procured during the previous season, rising 9 per cent over the corresponding period last year.

Agriculture experts say farmers, anticipating higher MSP for kharif paddy, may have started holding back so that they can sell their produce at the better price later. The general feeling among the farmers is that paddy MSP will go up to Rs 1,000 and Rs 1,060.

The monthly intake of rice in the country is around 22 lakh tonne and wheat between 10 to 12 lakh tonne. By reducing the quota of rice, the government will not just shed extra wheat it holds and also save rice for strategic reserve.

The government had also decided to create a strategic reserve of 50 lakh tonnes of foodgrains, comprising 30 lakh tonnes wheat and 20 lakh tonnes of rice, after meeting the buffer stock requirement.

This year it managed to procure record quantity of 223 lakh tonnes wheat for the central pool against the targeted 150 lakh tonnes. However, since it may fall in rice procurement, the Centre may not be left with enough surplus stock to create a 20 lakh tonnes of strategic reserve for rice.

The government says rice production is pegged at a record 95.68 million tonnes in 2007-08, compared to 93.35 million tonnes in 2006-07. This year as well everything is expected to proceed well as paddy acreage has gone up.

Meanwhile, the ban on the export of coarse rice and duty on export of basmati is expected to come up for a review in September. With these level of procurement, it is most likely that the ban will not be lifted.

Ludhiana, July 8
Due to shortage in supplies, steel consuming industrial units are getting items like HR coil for about Rs 10,000 per tonne more than the actual price. The wide price differential is giving a tough time to steel consuming industries.

“The price of HR coil is Rs 41,000 per metric tonne but on account of shortage, black marketeers are selling it for not less than Rs 51,000 per metric tonne here. It has cripple our business that was already suffering due to rise in overall steel prices,” said S. C. Ralhan, regional chairman, Engineering Export Promotion Council.

Acute shortage of billets and HR coil is prevailing in markets here. Industrialists said despite relative stability in steel rates after an assurance by large steel manufacturing companies to reduce rates, the unfair practices in local markets had created a much disadvantageous position.

“Stability in rates is giving no benefit to us as local traders and manufacturers are taking undue advantage of the shortage,” they rued. Secondary steel manufacturers have been taking undue advantage of the market scenario, alleged industrialists.

“Ingot is available for nothing less than Rs 40,000 per metric tonne primarily due to scarcity of billets in the market. Industry would not be able to cover up losses it is incurring on account of a continual problem related to pricing,” said an industrialist.

BRIEFLY

KZen Equities services
MUMBAI: KZen Equities on Tuesday launched its investment advisory services to help high network individuals and entrepreneurs to invest in overseas companies. The company will follow a three-step screening process — identifying industry sectors, doing own due diligence and commissioning of independent research team — before zooming in on a company where its clients can invest. — PTI

NDTV stake
MUMBAI: Reliance Mutual Fund has sold shares worth over Rs 86 crore in NDTV through open market transactions. Reliance Capital Trustee, Reliance Media and Entertainment Fund and Reliance Growth Fund has sold over 19.64 lakh shares representing 3.15 per cent for about Rs 86.21 crore on July 2, NDTV said. — PTI

BSNL tariff packs
CHANDIGARH: BSNL (Punjab circle) has launched three new tariff packs for its prepaid cellular customers. They include unlimited voucher of Rs 499 having talk value of Rs 40 with validity of 90 days; unlimited voucher of Rs 999 having talk value of Rs 80 with validity of 180 days and unlimited voucher of Rs 1,999 having talk value of Rs 150 with validity of one year. — TNS

Nabard grants
CHANDIGARH: Nabard has sanctioned a loan of Rs 149.54 crore for 61 irrigation schemes and Rs 12.57 crore for construction of rural bridges in Haryana under the Rural Infrastructure Development Fund. Nabard has also sanctioned Rs 120.51 crore to Punjab for lining of 4,500 km of watercourses and construction of field channels. — TNS

IEEE’s Bangalore chapter
BANGALORE: The Institute of Electrical and Electronics Engineers (IEEE) on Tuesday announced the formal inception of the Bangalore chapter of IEEE Computer Society. This is the fourth such chapter in India after Chennai, Hyderabad and Mumbai, IEEE said in a statement. — PTI