New Delhi, August 13
There will be no respite from rising prices in the immediate future, with PM’s Economic Advisory Council (PMEAC) suggesting that inflation may touch 13 per cent while the GDP growth rate is expected to slide to 7.7 per cent from 9 per cent recorded last year. “For some more time inflation can increase and it could touch 13 per cent. But, by December, it will start declining and is likely to moderate to 8-9 per cent by March 2009 as the effect of tight monetary policy is felt,” said outgoing chairman of the Prime Minister’s Advisory Council C. Rangarajan while releasing the Economic Outlook for 2008-09.

Finance minister P Chidambaram after meeting the chairpersons of PSU banks said: “If the (PMEAC) pegs economic growth at 7.7 per cent, I can confidently say it will be close to 8 per cent.”

The council expects dip in industry and service growth by about 1 per cent in FY 08-09. As per the EAC, agricultural growth is expected to slip to 2 per cent from 4.5 per cent in 2007-08, industrial growth could move down to 7.5 per cent in 08-09 from 8.5 per cent last year, and services growth could go down to 9.6 per cent in 08-09 from 10.8 per cent.

The finance minister said the bankers told him that credit would grow at very brisk pace and productive sectors would not be starved of credit.

Approving the RBI’s tight monetary policy to contain inflation, which has touched the 13-year high mark of 12 per cent, Rangajaran said, inflation could be brought down to 8-9 per cent by March 2009 through co-ordinated policy action.

The former RBI Governor, C Rangarajan, said he favoured further tightening of monetary policy to control inflation. “Though there is a risk of losing growth with this policy stance, but inflation control is a bigger priority and needs to be curbed,” he said.

Justifying the 7.7 per cent economic growth projection for 2008-09, Rangarajan said, there was a slowdown in agriculture, industry and services and the global environment was not very conducive to growth. “Our predictions are very realistic as against some other predictions where growth is expected to be at around 8-9 per cent. It all depends on where you look at the economy from,” said Rangarajan, when asked if the PMEAC’s growth predictions were optimistic. 

New Delhi, August 13
The much-awaited Apple's iPhone, which has become a kind of an icon with the mobile phone users around the world, especially after the launch of its latest version just months ago, could cost a fortune in India.

Although the 8 GB version of the phone is available for as less as $175 in the US, reports suggest that in the lack of subsidy to any of the telecom companies in the country, the same version of the iPhone could cost as much as Rs 31,000.

The 16 GB version could cost between Rs 36,000-37,000.

The two of the largest private telecom operators in the country - Bharti Airtel and Vodafone-plan to bring in the iPhone from August 22.

The above, reports suggested, would be without the exclusive rental plans which are likely to accompany the phones.

In a statement, Bharti last week had said that millions of Airtel subscribers would be able to purchase the iPhone at Airtel's Relationship Centres from August 22.

iPhone is embedded with all 3G features and is twice as fast as the existing mobile phones.

Both the Airtel and the Vodafone official were unwilling to comment on the why the iPhone would cost so much in India when the same version of it was available at almost five times less the price in the US.

Reports, however, suggest that the cost of the phone would be high here as unlike global markets, the Indian service providers would not be in a position subsidise the gadget, like AT&T in the US and O2 in Germany. Moreover, a fear of unlocking (cracking) and a likely flooding of counterfeit iPhones in the market are also likely to keep Bharti Airtel and Vodafone-Essar from subsidising the handset.

In the US, buyers have to sign a service contract for two years with AT&T and the phone has to be activated within 30 days. To discontinue the service, either the phone has to be surrendered or a cancellation fee of $175 (Rs 7,000) has to be paid.

The phone is given free by O2 in the UK, while T-Mobile prices it at a meagre one euro (Rs 67.92) in Germany. AT&T, O2 and T-Mobile are bundling iPhones with their services, resulting in cheaper pricing of handsets to consumers. 

New Delhi, August 13
Despite falling global crude prices, the government does not plan any immediate reduction in domestic fuel prices. India's crude basket price has fallen over eight per cent in two months, the buying averaged $109.88 per barrel, down from $119 a barrel price on June 4, when petrol, diesel and domestic cooking gas prices were raised.

“Fall in crude prices is a happy sign and a welcome development. But there is no scope for reduction in domestic retail prices,” petroleum minister Murli Deora said.

Crude oil prices have fallen to below $113 a barrel this week from an all-time high of $147 per barrel, witnessed last month.

However, retailers Indian Oil, Bharat Petroleum and Hindustan Petroleum continue to lose money on fuel sales. “There still are huge under-recoveries on fuel sales. I don't see how we can reduce retail prices when our companies continue to lose money,” he emphasised.
Fuel prices in India are pegged at $68 per barrel, much lower than the current prices in international market.

The government had raised petrol price by Rs 5 per litre, diesel by Rs 3 a litre and domestic LPG by Rs 50 per cylinder in June 2008.

The fall in international prices would help cut down on the projected revenue loss. At the time of June 5 increase in fuel prices, the revenue loss on sale of petrol, diesel, LPG and kerosene was put at Rs 2,46,600 crore for the full year.

Ludhiana, August 13
The steel consuming industry is unable to enter into long-term contracts with large producers now, who are reluctant to supply hot rolled (HR) coil at prevailing rates. While the prices have not been officially increased, manufacturers alleged that local offices of steel companies are asking them to pay around Rs 12,000 per metric tonne more than the official rate.

While manufacturers in industries like cycle parts and hand tools say they will have to quote higher prices to their buyers, the global downward trend in steel prices has made it tedious for them to enter into long-term contracts.

Orders, too, are likely to suffer if such a situation continues, they fear.

"The prevailing rate of HR Coil is Rs 43,000 per tonne. But at local offices, they are asking for a price higher by Rs 12,000. Now, 40 per cent of the purchase is being given at official rate whereas steel consuming units are forced to buy 60 per cent of their requirement at higher prices," said S.C. Ralhan, regional chairman, Engineering Export Promotion Council.

On account of the "unofficial" hike, worst sufferers are cycle parts units and to an extent hand tool enterprises.

Industrialists said stability in rates for the past two months had generated hopes of smooth functioning which have once again run into troubled waters. Fluctuation in prices makes it difficult to supply material to buyers at agreed rates, they added.

Mumbai, August 13
Cracking the whip on leading retail chain Subhiksha, Maharashtra's Food and Drug Administration (FDA) today cancelled licences of its three packaging firms and extended the suspension period of two trading firms over hygiene issues at its warehouses.

The FDA, responding to an appeal by the company against imposition of a 10-day suspension of the trading licences, has increased the tenure to 20 days.

Terming the order 'totally illegal', Subhiksha said it would appeal in the Bombay High Court against the FDA's decision.

Charging that the order has been framed due to 'vested interests of business rivals', Subhiksha Retail managing director R Subrananian said, "We are in consultation with our lawyers for filing an appeal in the court."

The company warehouses are located at Bhiwandi in neighbouring Thane district. — PTI

Bangalore, August 13
Asha Ramaiah is young, healthy and articulate. But, despite her young age and robust health, no insurance company was ready to insure her for ailments. That is because she is an HIV positive.

Insurance companies were apprehensive that she could fall ill frequently because of her infection and that meant loss of money for them.

But all this is going to change now, thanks to a pilot scheme launched by the Population Services International (PSI), an NGO, in partnership with Star Health and Allied Insurance Company and the Karnataka Network for Positive People (KNP+).

As many as 258 men and women infected with HIV, from six districts of Karnataka, have been insured under the group insurance scheme till now. While work under the scheme is going on for a while, it was formally launched here today.

The event was attended by Karnataka health minister B Sriramulu, Government of India additional secretary and director-general National Aids Control Organisation (NACO) K Sujatha Rao, India Mission director of USAID George Delkun, PSI programme director Sanjay Rao Chaganti and national head of Star Insurance Company C P Uday Chandran.

Later, talking to reporters, Uday Chandran said an annual premium of Rs 750 would be paid by the individuals of the group to get health coverage of up to Rs 30,000. He said while Rs 15,000 would be given toward the cost of treatment, the remaining Rs 15,000 would be given to the insured person in lump sum, in case of any ailment requiring clinical attention. He said health coverage worth Rs 50,000 and Rs 1 lakh were also available for HIV-infected persons. “The premium for the two latter schemes would be naturally higher”, he said.

Asha Ramaiah, who is founder member of KNP+, said they opted for the Rs 30,000 scheme since the two other schemes would be beyond the reach of most of the HIV- infected people.

PSI programme director Chaganti expressed hope that the scheme would become a success and would be replicated in other areas of the country.

Sujatha Rao said the central government was also holding discussions with public sector insurance companies as well as private sector companies for giving insurance coverage to HIV-infected people.

New Delhi, August 13
Rising air fares and pruned number of flights due to record-high jet fuel costs continue to show their negative effect on passenger demand with the number of passengers carried by domestic airlines in India coming down still further in July.

According to statistics, total domestic passengers carried by scheduled airlines was 30.85 lakh in July, around five lakh down from the June figure of 35.34 lakh.

The number of air passengers in the country has been falling ever since carriers increased ticket prices and were forced to cut down on non-profitable routes to compensate for higher ATF bills.

Passengers carried by domestic airlines plummeted by 17 per cent to 35.06 lakh in June from 41.16 lakh just a month back, mainly due to airlines reducing capacity and increasing air fares.

Helped by a friendly policy regime and low fares, the country’s aviation sector has been growing by an average of 27 per cent every year. In comparison, during the first six months of 2008, between January and July, 258.61 lakh passengers travelled by domestic airlines — a growth of just 7.5 per cent.

Even though airlines are working on various options to cut cost of operations to bring down mounting losses, experts say Indian carriers are set to loose $2 billion in 2008. Some carriers have rationalised routes and more are expected to do so. In July, domestic airlines scrapped more than 2,000 weekly flights, nearly one-fifth of the number they operate.

BRIEFLY

Tata Steel JV
Mumbai: Tata Steel on Wednesday said it has entered into a joint venture with Vietnam Steel Corporation (VSC) to build a plant at the Ha Tinh province in Vietnam. The Indian steel giant, through its wholly owned subsidiary in Singapore — Tata Steel Global Holding Pte Ltd, would hold 65 per cent stake in the joint venture and the remaining would be owned by VSC, Tata Steel said in a regulatory filing to the Bombay Stock Exchange.— PTI

JP Associates’ investment plan
Bhopal: Jaiprakash Associates (JP) has signed four MoUs with Madhya Pradesh Government to invest Rs 13,000 crore for setting up two cement manufacturing units, an aluminium production factory and a power plant for generating power. The cement units will be established in Satna and Amarpatan with an investment of Rs 2,000 crore each for producing five million tonne cement, it said.— PTI

Tata Capital in pact with MUS
Mumbai: Tata Capital Ltd has signed a memorandum of understanding with Mitsubishi UFJ Securities (MUS) to establish a basis of cooperation in a wide range of strategic business areas, including cross-border investment banking and global offering of Indian equities. Tata Capital said the MoU was in line with its strategy to reinforce its presence in the Japanese markets and augment the Indo-Japanese Financial corridor. — UNI

Sify data centres
Mumbai: Internet service provider Sify Technologies will set up two data centres in Mumbai and Noida to double its network at a cost of Rs 250 crore. The company has begun work on its data center in Mumbai, which would be spread over one lakh sq ft area. It would be ready in 15 months, the official said. Sify's other data center would come up in Noida, which would be a greenfield project spread over 30,000 sq ft area.— PTI

Voltas buyout
Mumbai: Tata group company, Voltas on Tuesday said it would acquire 51 per cent stake in Rohini Industrial Electricals for about Rs 62 crore. In this regard, both firms have entered into definitive agreement, Voltas said in a filing to the BSE. — PTI