New Delhi, August 14
The rate of inflation surged to 12.44 per cent for the week ended August 2, as compared to 12.01 per cent reported last week. After being nearly stable for four weeks, this rise has come as a major disappointment.

Prices of essential commodities, which include foodgrains, pulses, edible oils, vegetables, dairy products and some other commodities, including kerosene, soap and safety matches, have more or less stabilised.

The Wholesale Price Index (WPI) moved up from 239.6 in the week ending July 26, 2008, to 240.4 in the week ending August 2.

There is also a decline in prices of commodities like edible oils — mustard, cottonseed, groundnut, rice bran, vanaspati and imported edible oils, and oil cake.

Reacting on the inflationary situation and on the economy as a whole, Dr L.K. Malhotra, president, PHDCCI, said to revitalise the economy, new strategies and initiatives had to be evolved to respond effectively to the development needs of the nation.

“In order to rev up the economy, we need to work out strategies and initiatives that can respond effectively to the downside risks arising out of uncertain domestic and external environment. We need to press for a fresh burst of reforms, which will tackle both economic slowdown and rising inflation,” said Dr Malhotra.

There was also a pressing need for undertaking pension reforms, public sector disinvestment, infrastructure development and reforms in agriculture and rural development, he added.

“The uncertainty in the global market, arising out of high food and fuel prices, has worked its way to adversely affect the industry and economy. There is an emerging consensus that the economy is likely to experience a moderate slowdown this year owing to various external and domestic factors,” he said. 

New Delhi, August 14
Finance minister P. Chidambaram today said the impact of revised pay scales for central government employees on inflation was taken into account when the government cleared the recommendations and the Budget deficit targets would also be adhered to.

“The payout is not a new development, it has been factored into when Budget was prepared and Prime Minister's Economic Advisory Council and RBI gave their estimates”, the finance minister said.

When asked about off-Budget liabilities, he said they were separate liabilities. Both, Union Budget and Railway Budget, had a capacity to bear the burden on account of implementation of revised pay scales, he said after the Cabinet meeting.

The burden on Union Budget of the Pay Commission will be Rs 15,717 crore and Rs 6,414 crore on Railway Budget for 2008-09.

Welcoming the pay package for government employees, industry chamber Ficci said the package would help in attracting and retaining talent in the government’s administrative machinery.

Dr Amit Mitra, secretary-general, Ficci, said in an age when public-private partnerships (PPP) were becoming the model of economic reform and change, attracting the best in governance was critical for the next phase of reforms.

“Since the fiscal deficit is at an all-time high, in the absence of a provision in the 2008-09 Budget proposals, the fiscal pressures will be greatly aggravated. In such a situation, Ficci feels that the government will have to initiate and closely monitor serious austerity measures so that the situation does not get out of hand and the fiscal deficit stays within the budgeted target,” he said.

Another industry body, PHDCCI said the long-awaited report would bring cheers to the government employees and defence personnel. At the same time, the focus should be on enhancing the efficiency of the government working and timely implementation of the projects in time, the spokesman added.

PHDCCI president, Dr L.K. Malhotra said the decision of the government to stagger disbursement of arrears in two components, to be given in 2008 and in 2009, would considerably help in holding the price line.

He also mentioned that the functioning of the central government and its allied departments should be considerably toned up, particularly at the grassroots level. 

New Delhi, August 14
The Cabinet Committee on Economic Affairs has approved the modernisation projects for airports at Chennai and Kolkata at a cost of over Rs 3,750 crore. The work is likely to be completed within three years.

The state-run Airports Authority of India, which will retain the ownership of the two airports, will undertake the entire modernisation and expansion activity.

The AAI can create these two airports into models and compete with the private sector to develop world-class airports. They can even compete in the international arena, civil aviation minister Praful Patel said after the Cabinet meeting.

While Kolkata airport would be developed at an estimated cost of Rs 1,942.51 crore and would take 30 months to complete, the one at Chennai would cost Rs 1,808 crore and would be completed within 26 months. Both projects envisage large investments and would be completed in a time-bound manner, Patel said, adding that the upgraded airports would cater to the needs of Kolkata and Chennai for the next two decades.

After completion, the two airports will be on par with those at Delhi and Mumbai. The issues of additional land for expansion plans of the two have been sorted out by both state governments, the minister said.

The modernisation plans for both airports include building of new domestic and international terminal buildings, extension of secondary runways and building of taxiways.

Announcing that the foundation-stone laying ceremony would be held in September, the minister said the initial proposal was to fund 80 per cent of costs for both projects through the internal accruals of AAI.

For the Kolkata project, AAI will invest Rs 1,554 crore or 80 per cent of its own resources and Rs 1,446.4 crore for the Chennai airport. The remaining amount would be raised through commercial borrowings.

The upgraded airport at Kolkata would be able to handle an additional capacity of 20 million passengers per annum (mppa) and Chennai 14 mppa, as estimated by the traffic growth projections.

Besides extending the runways, the two projects would also include connectivity to the city, upgrading of air traffic management and communication-navigation systems and additional parking bays and taxiways. The works would significantly hike the number of aircraft movements per hour.

New Delhi, August 14
The ministry of communication today lambasted the finance ministry for questioning the procedure for 3G guidelines, saying the policy announcement was made after due consultations and there was no departure from the Cabinet decision.

"Since the spectrum pricing formula is auctioned, to which the ministry of finance is fully agreed, and the process, in which the ministry of finance is fully involved, we are consistent with the decision of the Cabinet," DoT said in a strong rebuttal to the issues raised by the finance ministry.

Responding to a communication from finance secretary D Subbarao yesterday, telecom secretary Siddartha Behura shot off a strongly worded letter today, saying: "It is therefore surprising that the ministry of finance has now decided to express its reservations on procedural aspects."

Asked about the issues raised by the finance ministry, telecom minister A Raja today dismissed any possibility of delay in 3G auction, saying: "As we promised, 3G auction will take place within the scheduled time... There will not be any deviation from the announced guidelines."

Charging that the ministry of finance had not been consulted on DoT guidelines on auction and allotment of spectrum for 3G and WiMax telecom services, Subbarao had said: "The issue of guidelines without any consultations with the ministry of finance, either within the forum of Telecom Commission or outside, is inappropriate and contrary to the Cabinet decision." — PTI

Solan, August 14
With a sharp decline in the export of dyes and chemicals and cotton from China in lieu of the Olympics, the textile industry has been forced to opt for costlier options to meet their targets. Since the Chinese government has shut majority of its chemical and textile units the domestic markets have been hit adversely.

The Baddi-Barotiwala-Nalagarh industrial area, which houses at least 12 big textile units and numerous smaller units, too, has been feeling the pinch. “Since cotton accounts for nearly 54 per cent of the raw material content, while the dyes constitute 25 to 35 per cent an increase in their prices would have an appreciable hike on the overall textile industry. Ever since China shrunk its imports the price of basic cotton varieties, which fell in the range of Rs 19,800 to Rs 21,500 per candy, have now touched a whopping Rs 25,400 to Rs 28,000 per candy in the past one year, said Vijay Arora, senior vice-president of the leading textile unit at Baddi.

“Even the advance booking of new cotton, which is available around September, starts from Rs 25,000 to Rs 2,8000 per candy. This has given little hope of revival even after the new crop and even if China starts its production after the Olympics it would be quite some time before the raw material touches the country”, said a senior vice-president of a leading textile industry.

To add to the peril of this industry in the state the neighbouring Punjab has imposed a 4 per cent entry tax on yarn to protect their industry. This had further made units located in the state in competitive. The state government, too, on its part has hiked the Additional Goods Tax on yarn from the existing Rs 3 per 10 kg to Rs 4.50 per 10 kg in February this year. Further with the cost of labour, freight and fuel also registering a hike the industry is going through difficult times, said another entrepreneur.

Mumbai, August 14
The sudden fall in gold prices over the past week has seen buyers return in large numbers even though the traditional peak season for the yellow metal is some months away.

According to the traders, buyers preparing for Dasehra-Diwali and the marriage seasons have begun to stock up and buying interest could go up if gold prices continue to decline. Even investors who had burnt their fingers during the stock market crash are showing signs of switching to the yellow metal after the recent fall.

"There is plenty of interest in picking up gold coins and medallions ever since gold prices fell to Rs 11,800 on Tuesday," says Dhiren Jhaveri, a jeweller from Zaveri Bazaar in downtown Mumbai. Banks like HDFC, which sell gold coins in denominations of 1,2,5 grams and larger are reporting brisk sales as people queued up to buy.

"Buying interest was slack yesterday (Wednesday) as prices had increased marginally," an executive at HDFC Bank at Borivili in suburban Mumbai told The Tribune. However, buyers expect prices to decline slightly in the coming weeks and are lining up to buy.

According to the trade, jewellers anticipating a boom in demand over the coming months were booking 100 gm gold bars with bullion traders. Reports say 100 gm gold bars are running out in big markets like Ahmedabad and Mumbai. Jewellers are known to buy gold bars weighing up to 1 kg. Buyers who pay in advance and make bookings would be able to take delivery over the next few days.

The Ahmedabad market, one of the biggest in the gold trade, has seen a 25 per cent increase in gold consumption in August when prices declined, according to sources. Traders expect as much as 16 tonnes of gold to be bought by jewellers in the city.

Gold jewellers like Jhaveri expect retail sale of gold to pick up over the weekend which coincides with Independence Day followed by Raksha Bandhan.

Soaring gold prices had taken a toll on the imports of the precious metal. According to the Bombay Bullion Association, Indian gold imports fell 59 per cent year-on-year for the month of May. Imports amounted to between 28 tonnes to 32 tonnes as compared to 69 tonnes last year, according to information available from the BBA.

According to the World Gold Council, India is the biggest consumer of gold accounting for 800 tonnes of the yellow metal every year or 20 per cent of global consumption.The official figures, however, belie the fact a big chunk of the gold sold in the souks of Dubai are purchased by Indians with unaccounted money and is brought back to the country via unofficial channels or stashed abroad.

The gold trade also expects demand to pick up if the monsoons continue to hold good for the next few weeks. A bountiful harvest by October would put more money into the hands of the farmers enabling them to buy more gold.

New Delhi, August 14
With increased purchasing power and health consciousness, the Indian masses have caught the fancy of dry fruit growers as well. Paramount Farms, the largest grower and processor of pistachios in the world, anticipating a big change in eating habits of the Indians in near future, has tied up with two leading organisations — the Diabetes Foundation (India) and Global Healthcare Ltd. — to conduct two different studies. An agreement between the three was signed in this regard here yesterday.

The Diabetes Foundation (India) will be conducting a study to evaluate the benefits of pistachio intake on cardiovascular risk factors. Global Healthcare Ltd’s study will determine the effect of dietary consumption of pistachio nuts on vascular structure and function.

“As the people in India are becoming more health conscious and obesity epidemic is looming large on the country, the eating habits are bound to change. And pistachio, being cholesterol and trans fat-free as well as good source of fiber and protein, can be good option for the people who intend to have better eating habits,” said Dominic Engels, vice-president, marketing, Paramount Farms.

New Delhi, August 14
In order to encourage people to choose environment-friendly battery-operated vehicles over polluting petrol and diesel-operated ones, the ministry of new and renewable energy (MNRE) is organising India’s first ever battery-operated vehicles' rally at Panchkula in Haryana.

According to MNRE, two, three and four-wheelers developed and manufactured in India will participate in the rally, being organised to mark the Rajiv Gandhi Akshay Urja Diwas -2008 on August 20.

MNRE, along with Haryana Renewable Energy Development Agency are partners for the rally.

According to the MNRE officials, “battery-operated vehicle rally is being organised for the first time in India and will have a unique impact in clean and green city of Panchkula and Chandigarh. It will attract people to go for battery-operated vehicles that are environmentally clean.”

Rajiv Gandhi Akshay Urja National Marathon of 20 km for men and women will be the other attraction on the ocassion. MNRE adviser N.P. Singh today held discussions with state government officials and informed them that more than 4,000 athletes from all over India were expected to participate in the marathon.

Besides, about 50,000 schoolchildren will also take part in Renewable Energy Rally and Renewable Energy Pledge on the occasion.

BRIEFLY

9 FDI proposals cleared
New Delhi: The government has approved nine FDI proposals amounting to Rs 294.46 crore, including Singapore-based aluminium firm Rio Tinto's Rs 148.57 crore proposal to set up a plant, a finance ministry statement said on Thursday.— PTI

SCI to buy 40 vessels
New Delhi: State-run Shipping Corporation of India plans to purchase 40 vessels, including four very large crude containers, worth $2.5-3 billion in the next three years. "By 2011, we will place orders for about 40 ships worth 2.5 to 3 billion dollar," SCI chairman and managing director S Hajara told reporters here on Wednesday. — PTI

Etihad Airways’ plan
Chennai: The United Arab Emirates' national airliner Etihad Airways would start direct flights to Abu Dhabi from Jaipur and Kolkata from next year. The Indian government had given permission to the airline to operate flights from these destinations, Etihad Airways CEO James Hogan told reporters here on Thursday.— PTI

EIH to pump in Rs 650 cr
Kolkata: East India Hotels (EIH), the flagship company of Oberoi group, on Thursday said it would invest around Rs 650 crore in its two properties in Bangalore and Goa. Based on an investment of Rs 1.4 crore for each room, the total project cost for both properties would be around Rs 650 crore, EIH chairman P.R.S. Oberoi told reporters after the AGM.— PTI

BHEL investment plan
New Delhi: Power equipment major BHEL on Thursday announced an investment of $2.5 billion in the next four years to ramp up capacity to meeting the growing electricity needs. "We will be investing Rs 5,000 crore in the first phase till December 2009 to reach 15,000 MW capacity. Besides, the Board has also approved an investment of similar amount to take the capacity to 20,000 MW by 2012," BHEL CMD K Ravi Kumar said. — PTI

Zinc, lead prices cut
New Delhi: Hindustan Zinc on Thursday cut the prices of zinc by Rs 2,400 a tonne and lead by Rs 10,500 a tonne on account of weak global cues. Zinc would now cost Rs 81,100 a tonne, while lead would now be available at Rs 90,400 a tonne, a circular at the firm's website said.— PTI

Rs 912 cr for leather industry
New Delhi: The government on Thursday approved over Rs 912 crore for development of infrastructure in the fast-growing leather industry during the 11th Plan period. The approval to the 'Indian Leather Development Programme', which will also address concerns on environment, was given by the Union Cabinet here.— PTI