New Delhi, December 8
The government today said it would spend proceeds from disinvestment to run select social sector programmes as advised by the Planning Commission and Department of Expenditure.

Under fire from the Left parties, who accused the UPA of using disinvestment as a ploy to bridge the fiscal deficit, Finance Minister Pranab Mukherjee defended the decision to disinvest saying, “Proceeds would be put into the National Investment Fund and during April 2009 to March 2012, they would be available to meet the capital expenditure requirements of selected social sector programmes.” He cited the extremely difficult prevailing situation as the reason for social investment of funds.

“We can’t afford a fiscal deficit of 6.8 per cent we left last year. Financial prudence requires that we should return to Fiscal Responsibility and Budget Management (FRBM)," Mukherjee said in the Lok Sabha, after leader of the CPM in the House Basudeb Acharia served a calling attention notice on the issue, and questioned UPA’s decision to divest government holding in public sector undertakings.

“The government is yet to recover Rs 4.5 lakh crore worth of different taxes from the corporate sector. If it is so concerned about FRBM targets, why can’t it do so? Why favour the corporates at the cost of PSUs?” Acharia told The Tribune.

Earlier, dissatisfied with Pranab’s reply on the matter, the CPM and Samajwadi Party walked out from the House.

Pranab for its part told the Left, “Whatever disinvestment we have done is in absolute conformity with the National Common Minimum Programme which you were supporting when you were our allies.”

He also clarified that the already listed PSUs not meeting the mandatory public shareholding of 10 per cent would be disinvested; and all PSUs having positive net worth would be listed through public offerings out of government shareholding or issue of fresh equity by the company.

The Department of Disinvestment has been asked to consult ministries on the capital expenditure requirements to be raised through fresh equity, the government said adding that the composition of public offerings would be based on this input and each case would be considered on merit and submitted to the government for approval.

So far, over Rs 1,800 crore have been collected in the National Investment Fund which had an additional interest of Rs 334 crore in two years, said the Finance Minister, who also informed the House that the disinvestment of government shareholding in NTPC (to the extent of 5 per cent); SJVN (10 per cent) and Rural Electrification Corporation (5 per cent) through public offering in domestic market was under implementation.

These public offerings are likely to be completed by March 31 next.

New Delhi, December 8
Mobile subscribers may yet again have to wait for getting the luxury of mobile number portability (MNP) with reports suggesting that the service may miss its January 1 dateline.

MNP, which allows consumers to change their mobile operator without having to give up their phone number, had a deadline for January. However, it may only be implemented sometime next year.

This, as some of the old telecom operators had not been able to make preparations to offer the services. Reports suggest that the MNP may finally hit the networks as late as June 2010.

Last week even Prime Minister Manmohan Singh had expressed hope for MNP and said it would give more choice to customers, enabling them to change their operator while retaining the cellphone number, besides encouraging telecom companies to improve the quality of their service. The telecom regulator had earlier said the facility would come into effect from January 1.

Reports said among the old operators barring Vodafone, most of the other incumbent GSM players were not yet ready with their network to offer MNP. State-owned BSNL and MTNL have also not yet upgraded their network to enable MNP.

On the other hand, new GSM players, including Tata DoCoMo and Uninor, were compliant with MNP requirements. To make the system work, all operators have to be ready simultaneously.

Reports suggest that even if all players were able to upgrade their network over the next two to three weeks, it would take another two months to test the system before MNP could be offered to the customers.

The Department of Telecom had given licences to Telcordia and Syniverse to implement the system. All other operators are supposed to upgrade their network to accommodate MNP and then interconnect with the two MNP operators.

Number portability is expected to increase competition in the mobile segment forcing operators to invest more on good quality network.

New Delhi, December 8
Anil Ambani-led Reliance Natural Resources Ltd (RNRL) today suggested that the Reliance Industries Ltd (RIL) value the gas at $4.2 a unit and sell it to RNRL at $ 2.34 and still make a profit of Rs 30,000 crore in 12 years.

This also would not result in any loss of revenue to the government. However, RIL's profit would go up to Rs 75,000 crore if it sells gas at the government fixed rate of $ 4.2 a unit, senior counsel Mukul Rohtagi argued before a special Bench headed by Chief Justice KG Balakrishnan.

"The government will not suffer any loss if it values the gas at $4.2 and RIL sells it to RNRL at $2.34. RIL wants to sell the gas at $4.2 to purely increase its profits without generating any additional benefit to the government," he said.

RNRL has also filed an additional affidavit before the Bench, which includes Justices B Sudershan Reddy and P Sathasivam, to this effect. The government's letter on prices clearly stated that the sale price could be higher than $ 4.2. "This clearly establishes that sale price and valuation price are different and $ 4.2 is for valuation."

Rohtagi said RNRL failed to understand why the government was insisting that RIL sell the gas to RNRL at the rate fixed by it when it did not stand to gain in terms of additional revenue.

In the first few years, 90 per cent of the total gas was for defraying of cost. Therefore, 90 per cent of gas belonged to RIL under the production sharing contract (PSC), which had given full freedom to RIL in the matter of pricing and marketing. The government had valued the gas for the purpose of determining how many gas units were given to RIL to dray its costs.

Under the MoU signed by RIL chief Mukesh Ambani and his brother Anil, RNRL had an unqualified right to get 28 mmscmd of gas for 17 years at $2.34 a unit, which would go up to $3.18 a unit, including transportation and marketing margin, Rohtagi said.

Mumbai, December 8
Private sector lenders ICICI Bank and Kotak Mahindra today announced low rates of 8.25 per cent and 8.49 per cent, respectively, for home loans, intensifying the cut-throat competition sparked by SBI and HDFC.

India's second largest lender ICICI Bank said it would offer a fixed rate of 8.25 per cent for two years for new home loans. The rate would be applicable to loans sanctioned between December 1, 2009 and January 31, 2010, and the first disbursement should be before March 31 2010, the bank said.

From the third year onwards, the bank would charge the floating interest rate depending upon the prevailing reference rate, the lender said.

Unlike rival SBI, which offer low interest rate in two slabs for loans of Rs 5 lakh and Rs 30 lakh, ICICI Bank is offering low rates to all new loans irrespective of amount.

Kotak also said the special offer of 8.49 per cent can be availed for all new loans irrespective of the loan amount for 30 months. But the offer is limited till January 31, 2010.

It will charge floating rates after the 30-month period, which will be decided based on the retail prime lending rate.

Last week, eyeing to corner bigger pie in India's multi-crore rupees home loan market, premier housing finance company HDFC offered 8.25 per cent rate up to March 31, 2012. — PTI

Mumbai, December 8
With the environment ministry all set to give the green signal, the Ashok Chavan government in Maharashtra is pulling out all stops to get the new airport at Navi Mumbai off the ground as early as possible.

According to sources here, the formal approval for the project from the Ministry of Environment and Forests is expected to be given in the next few weeks. The state-owned City and Industrial Development Corporation (CIDCO), which is building the airport on a public-private partnership, is expected to call for tenders shortly after the green signal is received, sources said.

The project was stuck over eradication of mangroves spread over 150 hectares where the proposed airport was to come up. "CIDCO proposes to develop mangroves in alternative areas to mitigate the land given for the project," a spokesperson said. CIDCO's proposal has been informally accepted by the Ministry of Environment and Forests, sources said. The Coastal Regulatory Zone regulations were amended earlier this year specifically for the proposed airport project to go through. However, the formal clearance was held up in red tape, sources said.

The Maharashtra government is expected to call for bids from private operators to build the new airport on the lines of similar projects in Bangalore and Hyderabad. The new airport is expected to have two parallel runways with capacities to accommodate large aircraft like the Airbus A380. The first phase of the new airport is expected to be completed by 2014 and cater to 10 million passengers.

New Delhi, December 8
Investments in mutual fund schemes saw a sharp 68 per cent decline in November to over Rs 45,100 crore over the previous month, as investors preferred to stay away from equity market.

At the end of November, investors poured in funds worth only Rs 45,124 crore in several MF schemes, with the maximum infusion coming into fixed income plans, according to the Association of Mutual Funds of India's (AMFI) monthly report.

At the end of October, the total inflow stood at Rs 1.41 lakh crore.

Despite the slump in the volume of net inflow, investors continued to prefer MFs as an investment option in almost all schemes, except for equities which witnessed a outflow of Rs 1,109 crore during the reporting month.

"While institutional and retail investors are putting in money in fixed income or debt schemes, volatility in the equity market saw investors pulling out from such funds," Kotak AMC head (fixed income and product) Lakshmi Iyer said.

In November, fixed income plans with assured annual returns, saw a maximum investment of Rs 37,649 crore. Besides, liquid or money market funds, with higher liquidity and short maturities, saw inflows worth Rs 8,581 crore.

"With virtually no new fund offers coming in, investors preferred to book profit in equity schemes and invested in debt funds. They are waiting for better valuation to enter the equity market," she added. — PTI

Chandigarh, December 8
The change in dealership partners for Mercedes Benz in four zones across India, coupled with the global downturn, has led to a fall in sales for the luxury car maker.

As against a total of 3,625 units sold by the company in 2008, they have managed to sell just 2,913 units till November this year. Though the company officials say that the main reason for the slow sales is a result of a negative growth rate in sales during January-June and a flat growth between July and October, they agree that the change in dealership partners in Punjab, Mumbai, Pune and Gujarat have also led to slow growth.

Talking to mediapersons here today, while inaugurating the company’s new dealership with Joshi Autozone, Debashish Mitra, director, sales and marketing, Mercedes Benz, said they had a review of their dealership partners earlier this year and decided to have new partners in the four above mentioned places. “In Punjab and Chandigarh alone, where we have now appointed Joshi Autozone as our new dealer, we have sold just 200 units till November, as compared to 250-300 units sold in year 2008. This zone accounts for 10 per cent of the total sales for the company,” he said. Mitra, however, said the company still continued to have the highest penetration amongst the luxury car makers in the country. “The past two months have shown a positive upward trend and we are hopeful of a good growth in the next year,” he added.

BRIEFLY

Oil up in Asian trade
Singapore: Oil prices rose in Asian trade on Tuesday as traders capitalised on a weakening US dollar, analysts said. New York's main futures contract, light sweet crude for delivery in January, rose 35 cents to $74.28 a barrel. Brent North Sea crude for January delivery climbed 57 cents to $77. A weakening greenback was providing impetus for traders to buy crude, analysts said. — AFP

Ranbaxy ends JV with Japanese firm
Mumbai: Pharma company Ranbaxy Laboratories on Tuesday said it has exited from Japan-based joint venture company, Nihon Pharmaceutical Industry. Ranbaxy sold its stake to Nippon Chemiphar for an undisclosed amount after an agreement that allowed Nippon Chemiphar (NC) to buy Ranbaxy's entire stake in Nihon Pharmaceutical Industry (NPI), Ranbaxy said in a filing to the Bombay Stock Exchange. — PTI

OVL pulls out of block in Sudan
New Delhi: ONGC Videsh Ltd, the overseas arm of state-run ONGC, has pulled out of an exploration block in Sudan. "Not just OVL but the entire consortium has decided to exit the Block 5B," Sudan's Minister of State for Energy and Mining Angelina Jany Teny said on Tuesday. OVL has written off investment of $90 million it had made in the block. — PTI

L&T bags Rs 844-cr order
Mumbai: Engineering and construction major Larsen & Toubro on Tuesday said its infrastructure arm has bagged a contract worth Rs 844 crore from Nuclear Power Corporation of India for construction related works at the Kakrapar Atomic Power Project in Gujarat. Larsen and Toubro (L&T) Infrastructure Operating Company, a part of company's construction division, has secured contract for construction of buildings for reactors at atomic power project from Nuclear Power Corporation of India Ltd, L&T said. — PTI