New Delhi, October 23
State-owned SAIL today said the Finance Ministry has given its in-principle approval for 20 per cent disinvestment of the steel giant.

The divestment comprises 10 per cent equity dilution by the government and the company issuing additional 10 per cent shares.

"...Ministry of Steel has communicated to the company 'in principle' approval of the Department of Disinvestment for further public offer equivalent to 10 per cent of existing paid-up equity capital by SAIL," the company said in a filing to the Bombay Stock Exchange. It further said the Finance Ministry has also given its approval for disinvestment of "equivalent size of equity held by the Government of India in two discrete tranches, each containing five per cent of FPO plus five per cent offer for sale".

However, the company said the proposal would be subject to approval of the Cabinet. "This is subject to fulfilment of certain conditions, including obtaining approval of the Cabinet Committee on Economic Affairs (CCEA)." The timing of the stake sale and public offer would be decided after CCEA nod, it said.

"After approval of CCEA, the timing for the above offers would be decided considering, inter-alia, SEBI guidelines and prevailing market considerations and also fulfilment of conditions, if any, stipulated in the CCEA approval," the filing added.

Steel Minister Virbhadra Singh had said the process of disinvestment in the company is likely to start in the current fiscal.

The government is likely to raise around Rs 8,000 crore through the disinvestment at current share prices. The amount raised would go to the National Investment Fund created mainly to finance social sector.

SAIL, which will also raise about Rs 8,000 crore through two-phase FPO, will use the fund to part finance its Rs 70,000-crore expansion projects to increase its annual production capacity to about 23 million tonnes by 2012.

The proposed FPO would bring the government's holding in the company down to about 68 per cent from over 85 per cent at present. — PTI

New Delhi, October 23
The Indian government is in for a dilemma as regards tightening of the loose monetary policy. On the one hand, a thriving agriculture economy at home is likely to go slow because of poor monsoon during the kharif season, on the other, the world economy is turning around, though gradually. For the Finance Minister and the RBI Governor, the decision on what is to be done at the moment is a tight rope walk.

RBI Governor D Subbarao today met Finance Minister Pranab Mukherjee, ahead of the RBI’s second quarter policy review to assess the macro-economic situation.

According to estimates by monitoring agency CMIE on agriculture, there will be a contraction in 2009-10 by 23 per cent, as the decline in rainfall causes a 5 per cent fall in sowing. This is likely to result in fall in kharif yields, thereby decreasing agriculture income.

The incomes as yet were strong and the economy did not feel the repercussions of the financial crisis because of thriving economy in the hinterland. But, experts feel, this is likely to get reversed slowly. Industrial growth will also be an area of concern with ICRIER forecasting a growth less than 8 per cent for 2009-10. The factory output rose 10.4 per cent in August from a year earlier when it stood at 1.7 per cent.

Industrial output will not slow down in the coming months, although farm output is expected to be lower by 2.5 per cent in 2009-10 from the previous year.

Inflation, also, is likely to inch higher. For the week ended October 10, the headline inflation was 1.21 per cent. Headline inflation, or the Wholesale Price Index, which was negative a month ago, is expected to reach 6 per ceny by March-end, according to the estimates by PM’s economic advisers.

The RBI Governor had hinted at this dilemma at Istanbul on October 5 in the wake of increasing inflation and signs of economic recovery. “While there is a broad agreement that we need to exit from the present excessively accommodative monetary and fiscal policies, there is less agreement on when and how we should exit,” he had said.

The government, on its part, may hold off with monetary policy tightening until the end of March. Finance Minister Pranab Mukherjee said recently it was premature to exit the fiscal stimulus as the global economy was not showing robust recovery. “Till now the global economic recovery is not as robust as we expected it to be. Unless this recovery takes place, the government would not think of an exit policy for the stimulus,” the FM said.

Chandigarh, October 23
The fall in credit-deposit ratio (CD ratio) in rural and semi-urban areas of Punjab has become a major cause of concern. As against the statutory requirement of 60 per cent, the CD ratio of commercial banks in rural areas is just 47.18 per cent and in semi- urban areas, it is 50.72 per cent.

What is worse is that in the past one year, the overall CD ratio in the state has shown a decline of almost three per cent. In rural areas, the CD ratio declined by 3.61 per cent, while in the urban areas, it has declined by 2.04 per cent. Though the CD ratio in urban areas is high at 94.11 per cent, this has come down from 96.15 per cent in June last year.

Expressing concern at the low credit offtake in Punjab, the RBI has now asked the State Level Bankers Committee (SLBC) to monitor the CD ratio area wise. The move follows the report tabled in the SLBC meeting held here today, where it was declared that the CD ratio in three districts of Kapurthala, Nawanshahr and Jalandhar had shown a decline in the past one year. In Jalandhar, the CD ratio has come down by 1.21 per cent, in Kapurthala by 1.34 per cent and in Nawanshahr by 0.75 per cent.

Already, the CD ratio in these three districts along with the CD ratio in Hoshiarpur is below 40 per cent. In Hoshiarpur, the CD ratio has shown a slight increase, from 29.68 per cent last year to 30.25 per cent this year.

Official sources in the SLBC informed TNS that a special sub committee of district-level consultative committee has been formulated in the four districts where the CD ratio is less than 40 per cent. This sub committee has drawn up a action plan to increase the ratio on a self set graduated basis.

The committee has now suggested that the banks implement area/ block-specific credit schemes; strengthen investment under agriculture and allied activities like dairying, poultry, bee keeping and fishery; and, banks to analyse and monitor CD ratio of each branch and initiate suitable measures to improver the same. It is also suggested that SEZ be established here to attract industrial investment, improve infrastructure for smooth conduct of business; and adopt cluster approach for special package for industry. 

New Delhi, October 23
The government will hold auction of 3G spectrum during January 7-10 next year and is likely to give out soon details of time schedule and eligibility criteria of prospective bidders.

When contacted official sources confirmed that Telecom Minister A Raja has cleared the Information Memorandum (details of timing and eligibility criteria).

The move comes within a week of Raja writing a letter to Finance Minister Pranab Mukherjee seeking his intervention to resolve some of the issues with the Defence Ministry, which has refused to release the required spectrum.

There will be a slippage of about 10-15 days from the original schedule as decided by the empowered Group of Ministers (EGoM) headed by Mukherjee.

Asked whether issues have been resolved with the Defence Ministry, sources said the secretaries in the Ministries of Telecom and Defence are likely to hold discussions in the coming days to sort out the issues.

The Defence Ministry has decided to release 3G spectrum, which is to be auctioned only, and that too in phases. In fact, the armed forces have not released spectrum already in use as envisaged in their agreement with DoT, Raja had said in his letter.

Because of the stand taken by the Defence Ministry, which is not plausible and against the decisions of the empowered Group of Ministers there has been slippage in the original schedule of auction, he had said.

Auction of 3G spectrum was to be completed by this year-end. However, for want for clarity from the Defence Ministry, the Telecom Ministry could not issue the Information Memorandum that lists eligibility conditions, rules of auction and the details of spectrum.

Sources also said by issuing the Information Memorandum the DoT has put the ball in the Defence Ministry's court to release the required spectrum to be auctioned. 
— PTI 

Mumbai, October 23
Market regulator SEBI today opened gates for longer trading hours for stock exchanges, allowing the bourses to extend market hours by around two-and-a-half hours between 9 am and 5 pm. The current market hours stand from 9.55 am to 3.30 pm. " ... it has been decided to permit the stock exchanges to set their trading hours (in the cash and derivatives segments) subject to the condition that the trading hours are between 9 am and 5 pm," SEBI said.

The SEBI further asked the bourses to reset their timings provided they have in place risk management system and infrastructure commensurate to the trading hours.

It is expected the bourses would utilise the full window between 9 am and 5 pm, experts said.

"All stock exchanges are likely to go for the maximum possible trading hours as they have been demanding for trading hours to be extended to 9 am to 9 pm," SMC Capitals Equity Head Jagannadham Thunuguntla said.

It would help brokers and trading community to transact for longer duration and would integrate the domestic market with the international market, Thunuguntla said.

With market regulator SEBI now open for longer trading hours, it is now up to the bourses to take a business call and decide on the duration and when to reset their trade timings.

"There is a serious competition going on between Bombay Stock Exchange and National Stock Exchange, and then there is the new competitor MCX-SX that is coming. I will be surprised if any bourse not utilises the full timing," Thunuguntla said.

The new trading hours would now help integrate the Indian market with Singapore and other Asian markets in the morning hours, and the European market in the evening hours, he said.

"Some trades that had shifted to SGX Nifty (Indian Nifty traded in Singapore Stock Exchange) can now be brought back to the country," he said.

The new arrangement would also help in taking trading position based on information flow from different geographies immediately instead of waiting for the next trading session the following day, he added. — PTI

Tokyo, October 23
Buoyed by good response to its newly launched sports utility vehicle Fortuner in India, Toyota Motor Corp will increase output of the vehicle by 60 per cent from January 2010.

Toyota, which runs Indian operations with the Kirloskar Group in a joint venture, Toyota Kirloskar Motors, had initially planned a production of 500 units a month.

"Fortuner is doing very good and we had to modify our plan for increasing production. We will increase it to 800 units every month by January next year," Toyota Kirloskar Motor (TKM) deputy managing director Sandeep Singh told PTI at the ongoing Tokyo Auto Show here.

The company had earlier planned to increase output of the SUV to 600 units every month by January next year, he added.

Since its launch on August 24, TKM has so far sold about 1,200 units of the Fortuner in the Indian market. It was introduced at a price of Rs 18.45 lakh (ex-showroom, Delhi).

The Indian premium and mid-category SUV market was estimated at 12,000 units in 2008. TKM had earlier this year said that it expects to capture 50 per cent share of the mid-SUV market. The company, last year, sold about 51,800 units of all of its models in India and is expecting to sell about 53,500 units this year. It sells sedans Corolla Altis, Camry and utility vehicle Innova along with the Fortuner in India.
 — PTI 

Mumbai, October 23
Country's largest private sector firm Reliance Industries today tanked more than four per cent after its partner UK-based Hardy Oil and Gas Plc said it plans to abandon work on an exploratory well in the Krishna Godavari basin block.

Stocks went on a downward spiral both on the Bombay and the National Stock Exchange, with shares plunging 4.52 per cent and 4.57 per cent, respectively to touch its intra-day low. — PTI

BRIEFLY

Rupee bounces back
Mumbai: The Indian rupee on Friday recovered 24 paise at 46.50/51 against the US currency on the back of some stability in equities amid a weak dollar overseas. In active trade at the Forex market, the domestic currency initially touched a high of 46.40 a dollar following a smart gain of over 217 points in the Indian benchmark Sensex in morning trade. The rupee later moved in a range of 46.40 and 46.62 in line with the stock movements before concluding the day at 46.50/51.— PTI

SBI Life top pvt insurer
New Delhi: SBI Life, an insurance venture promoted by SBI, has regained the top position among private players with a premium income of Rs 2,391 crore in the first half of this fiscal. The insurer has pipped ICICI Prudential Life in the April-September period of this fiscal which mopped up first year premium of Rs 2,128 crore, according to IRDA figures.— PTI

Coolpad dual-SIM mobile
New Delhi: Chinese mobile handset maker China Wireless Techonolgies on Friday launched its dual-mode touchscreen handset in the Indian market priced at Rs 10,999. Hong-Kong stock exchange-listed China Wireless Technologies' Indian subsidiary Coolpad Communications has an exclusive distribution agreement with Reliance Communications' retail subsidiary, Reliance Webstore. — PTI

Infosys awarded
Bangalore: Infosys Technologies has won the Most Admired Knowledge Enterprises (MAKE) award this year. The company had bagged the award six times in the past. The 2009 Asian MAKE panel has recognised Infosys for developing new products, services and solutions fostering knowledge sharing and collaboration. 
— TNS

BSNL offer for Haryana
Chandigarh: BSNL has launched a new “Pay per second“offer for its pre-paid customers in Haryana. As per new introduced tariff voucher of Rs 45, a customer will enjoy a validity of 30 days with local call charges of 1 paisa for 1 second on any network. He will have to pay only two paise per second for STD call on any network and SMS charges will be 60 paise for local and Rs 1.20 for a national message. 
— TNS

Kribhco dividend
Chandigarh: Krishak Bharati Cooperative Ltd has paid a dividend of Rs 65.91 lakh to Markfed, Punjab, for the year 2008-09. The dividend cheque was presented to Sarvjit Singh, managing director, Markfed by JS Sandhu, chief state manager, Kribhco, Punjab on Thursday. — TNS