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Fiscal deficit may exceed 5 per cent Warring Bajaj bros reach settlement Sensex tanks 242 points Re tumbles by 74 paise |
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Govt issues oil bonds worth Rs 22,000 cr
National Bulk Handling Corp plans expansion Successful 3G bidders eligible for 2G spectrum MVNO policy before
3G auction
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Fiscal deficit may exceed 5 per cent New Delhi, December 23 The mid-year review of the Indian economy presented to Parliament said, “there is a considerable scope for monetary policy easing over the next six to 12 months to offset the global increase in demand for money that is being transmitted to India... “An aggressive monetary policy may be necessary if the global economic depression continues to adversely affect manufacturing,” the review said. “India will miss its fiscal deficit target by a wide margin and the deficit will increase to at least five per cent of GDP this fiscal due to the stimulus package announced to spur demand in the economy,” said the chief economic adviser Arvind Virmani. As had been reported in The Tribune earlier, sources in the finance ministry had estimated that the deficit would rise to 6 per cent, and maybe more, if stimulus packages keep increasing to prop up the economy. The government, had, in the budget, targeted fiscal deficit to come down to 2.5 per cent of GDP this fiscal, although it was 3 per cent under the Fiscal Responsibility and Budget Management Act (FRBM). Through a slew of measures, the central bank has injected about Rs 3 lakh crore (Rs 3 trillion) into the cash-strapped system. Preparing the country for a significantly slower growth in the second half of the fiscal, the review projected economic expansion at around seven per cent for the year. It attributed the moderation in growth from 9 per cent in the previous fiscal to crisis in the industrialised countries affecting India's external sector, including exports and capital flows. The government recently gave a nod to an additional expenditure of Rs 42,480 crore during the current financial year. The amount includes the Rs 20,000 crore given as a fiscal stimulus package to spur industry. The government also gave a 4 per cent excise duty cut across the board. The government has already sought an additional Rs 1,47,000 crore from Parliament, as the first and second batch of supplementary demands for grants, raising public spending to Rs 9,00,000 crore from Rs 7,50,000 crore originally envisaged in the budget for 2008-09. On the positive side, the review said the decline in commodity and fuel prices would help bring the inflation to 'normal' levels by March 2009. From a peak of 12.91 per cent in August, the inflation has come down to 6.84 per cent in early December. “Inflation is expected to decline to around 4-5 per cent by this fiscal end,” the Prime Minister's Economic Advisory Council's chairman, Suresh Tendulkar said.
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Warring Bajaj bros reach settlement
Mumbai, December 23 Signaling that the fighting factions of family patriarch, Rahul Bajaj, and younger brother Shishir Bajaj have closed in on a settlement, the two sides informed stock exchanges about an agreement which will entitle the latter control of sugar major Bajaj Hindusthan Ltd. People familiar with the development said a final agreement was expected to be signed in the days to come but both sides were keeping it extremely confidential to ensure nothing went wrong this time around. When contacted Rahul Bajaj declined to comment on the development. Shishir Bajaj's side was also equally tight-lipped. In a notice to the National Stock Exchange, Shishir Bajaj said he would acquire shares in Bajaj Hindusthan that Rahul would buy from family members and group companies — Bachhraj & Co and Jamnalal Sons. As per the notice to the NSE, Rahul would acquire over 4.1 crore shares amounting to 29.2 per cent stake in the sugar major by way of inter-se-transfer of shares among the promoters through market transactions. These shares would be acquired at the market price as on December 30, the notice said.— PTI |
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Sensex tanks 242 points
Mumbai, December 23 IT major Satyam Computer today nosedived by 13.55 per cent as rumours of its chairman Ramalinga Raju's resignation flew thick and fast, even as the World Bank barred the company from doing business with it for eight years. Barely two weeks ago, its shares were hammered after it announced a deal to buy out Mytas Properties and Mytas Infra, two companies promoted by Raju's family. The deal was later called off on ivestors' resistance. Realty stocks which have been on a gaining spree last week took a hit and thier sectoral index closed lower by 4.84 per cent amid banks cutting lending rates and anticipation a fresh reduction in key policy rates in the second stimulus package to boost the economy. Another interest rate sensitive banking index also ended lower by 3.76 per cent. The 30-share BSE barometer closed at two-week low of 9,686.75, a fall of 241.60 points or 2.43 per cent from its previous close. In two days, the Sensex had lost over 400 points. The 50-share Nifty of the National Stock Exchange also fell by another 70.65 points or 2.32 per cent to 2,968.65. The market sentiment was down primarily due to weak FII activity amid approaching year-end and long Christmas holidays in the overseas markets.
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Re tumbles by 74 paise
Mumbai, December 23 The domestic currency came under pressure and closed at 48.76/78 with oil refiners stepping up their dollar purchases for their monthly import bill even as global crude oil prices fell below $40 a barrel in Asian trade. Dealers in the foreign exchange market said the rupee has turned weaker against the dollar since December 19 as Foreign Institutional Investors began pulling out from equities due to year-end considerations. In brisk activity at the Interbank Foreign Exchange (forex) market during the day, the rupee fluctuated in a wide range of 48.20 and 48.95. It resumed weaker at 48.20/22 a dollar from its last close of 48.02/03 a dollar. — PTI |
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India likely to miss export target New Delhi, December 23 Textiles Minister Shankarsinh Vaghela, while pointing out the accomplishments of his ministry, which has seen a turnaround in the past few years, said after a good start to the year, there has been a major slump in the exports. He said the global meltdown, along with a strong dollar, was affecting the exporters greatly. The minister did not rule out the possibility of the exports going into the negative when compared to imports. He said the exports had been hit since October last and would not be able to reach its target of 20 per cent higher exports than last year. He also said the textile mill owners affected by high cost of cotton could get some relief in the stimulus package being worked out by the Manmohan Singh government, but there would be no reduction in the minimum support price being offered to the cotton farmers. Later, a senior textile ministry official said, “there is a ground for intervention in the form of stimulus package, but the MSP cannot be reduced”. The government had increased the MSP for cotton by 40-50 per cent, depending on the variety, late August last. This happened when cotton prices were still ruling firm in the international market. However, since then cotton prices around the world have dropped dramatically hitting a six-year low in mid-November. This has also hit exports, both of raw cotton and textiles, in the country. Industry, however, feels that unreasonably high MSP announced by government for cotton in 2008-09 has also played a major role in precipitating the current crisis in the textiles and clothing industry. Textile ministry officials said they were expecting a stimulus package for the mill owners in the form of providing working capital loan for cotton purchase at 7 per cent instead of the current rate of around 12 to 13 per cent. |
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Govt issues oil bonds worth Rs 22,000 cr
New Delhi, December 23 The 16-year bonds carry 6.35 per cent coupon rates, an official statement said. Indian Oil Corporation will get bonds worth Rs 11,975.51 crore, Bharat Petroleum Corporation will receive bonds worth Rs 5,330.76 crore and Hindustan Petroleum Corporation will be issued bonds worth Rs 4,693.73 crore. The investment in these bonds will not be counted against the mandatory requirement for banks and insurance companies to keep part of their deposits in government-approved securities.— PTI |
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National Bulk Handling Corp plans expansion To fund this expansion, NBHC is planning to dilute its equity in the coming months and raise more funds in future. At present, 90 per cent of stake in the company is of FTIL and the remaining 10 per cent is owned by the State Bank of India. The corporation might also raise money from the bourses as and when the market recovers. Talking to TNS here today, Anil K. Chaudhary, managing director and CEO of NBHC, informed TNS that they were planning to build warehousing complexes, each with a capacity of 15,000 to 25,000 metric tonnes. "These complexes will have state-of-the-art warehouses, laboratories and also logistics support. Of the 350 sites that we have identified, 50- 60 will be built and operated by us, while the remaining 300 will be taken on a leasehold basis," he said. Chaudhary, who was here to see the warehousing facilities of the corporation in Punjab and Haryana, said at present NBHC's total capacity was 1.3 million tonnes. "Next year, we will increase our capacity by adding another 2.5 lakh to 5 lakh metric tonnes of storage capacity. In Punjab and Haryana, we have a warehousing capacity of 6 lakh metric tonnes, which we will double by the year 2010," he said. The CEO said they were also going to give more impetus to their warehousing finance scheme, wherein the clients (farmers or traders) can use their warehouses to stock their produce, and, in turn, the warehouse receipt is used as a collateral to secure bank loans. NBHC has already tied up with 29 banks for providing loans to farmers, and will have 40 banks on its board for this purpose by the end of this fiscal. "It is not just farmers who get their produce here to trade it on the futures exchange like MCX, where we certify quality, grade and pack them. Any farmer can use our warehouses and get loans. The bank keeps a margin of 25% (Rs 25) which effectively means a farmer gets Rs 75 as a loan against Rs100 worth warehousing receipt as collateral. He gets the loan at 2-3% below the prime lending rate (PLR)," he added. |
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Successful 3G bidders eligible for 2G spectrum New Delhi, December 23 The assurance came from R. Ashok, member (finance), Telecom Commission, the apex government body for the sector, at a pre-bid conference held today. He said, “for a new entrant in 3G who has obtained a licence, it will be in the queue for 2G spectrum”. Third-generation mobile technology, or 3G, will allow telecom companies to offer high-end services such as high-speed Internet, interactive gaming, ultra fast downloads of movies, video clips and music files, and video calls on the mobile. The Department of Telecom (DoT) is due to conduct a global auction for 3G spectrum from January 16 next and has set a base price of Rs 2,200 crore for spectrum in all service areas. Firms interested to participate in the auction process are required to submit applications between December 26 and January 5. Currently, all telecom services in India are offered using second generation (2G) cellular technology. After the pre-bid conference today and the filing of applications by January 5, the names of those bidders who pass the eligibility criteria will be announced on January 9. A mock auction would be held between January 12 and 13. |
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MVNO policy before 3G auction
Keeping the interest of the consumer as top priority, the government is hoping to come out with the policy on Mobile Virtual Network Operator (MVNO) by early January, before the auction of 3G spectrum commences. "We are hoping to come out with the policy on MVNO before the end of January 5, which is the deadline for application of 3G spectrum," DoT joint secretary J.S. Deepak said while addressing the pre-bid conference for the auction of 3G spectrum. |
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Chandigarh, December 23