The Tribune, Chandigarh, India

Inflation soars to 4.78 pc in Nov

New Delhi, December 14
Rise in cost of sugar, pulses and some vegetables that were in short supply pushed inflation in November to 4.78 per cent, up three-fold from October level, souring investor sentiments in the stock market.

The wholesale price-based inflation jumped to nearly 5 per cent from 1.34 per cent in October, according to the monthly inflation data released today.

“Inflation has risen so high mainly because the food prices have gone up,” Finance Minister Pranab Mukherjee told reporters here.

Although Finance Secretary Ashok Chawla said the numbers were nothing surprising, the market benchmark Sensex pared early gains to settle 21.48 points down at 17,097.55.

The monthly data, which was released by the government for the second time, shows that potato prices surged by a whopping 141 per cent in the past eight months, followed by sugar 37 per cent, pulses 32 per cent and onion 20 per cent.

Suresh Tendulkar, former chairman of the Prime Minister’s Economic Advisory Council (PMEAC), said the Reserve Bank could take steps to withdraw liquidity to tame rising prices.

The apex bank is slated to announce review of its annual credit policy next month.

Food inflation, according the weekly data announced earlier, was 19.04 per cent in the fourth week of November, the highest in over a decade.

The RBI in its monetary policy review in October revised the inflation forecast to 6.5 per cent by March-end from 5 per cent earlier.

Mukherjee said the rise was more evident in the Consumer Price Index (CPI) than in the Wholesale Price Index (WPI) as “food items have higher weightage” in the CPI. Food articles have a weightage of about 43 to 48 per cent in the CPI, the minister added.

CPI-based inflation for industrial workers rose by 11.49 per cent in October, up from 11.64 per cent a month ago.

“It is not as if we are taken by surprise or that there is any cause for any special emergency measure at this stage,” Chawla said. Rising prices of commodities has always been a matter of concern for the government, he said, adding the government has been taking administrative steps to contain inflation.

“The fact that food inflation was high and that could reflect in the WPI was also known,” Chawla said, adding the government would see whether the rise in inflation was on account of the base effect or is it a trend that is likely to continue.

“In any case, the expectations which the Reserve Bank had put out and which the government has also indicated was that the WPI would be in the region of 6 per cent by March 2010,” he added. — PTI

India, Italy ink pact to boost trade

Commerce and Industry Minister Anand Sharma at a business conference themed 'Italy-India Business Mission 2009' organised by the Ficci in New Delhi on Monday. — Reuters

New Delhi, December 14
India and Italy today entered into an agreement to promote bilateral trade and investments. The agreement was signed between Invest India, a joint-venture firm between the government and industry body Ficci, and Italian National Agency for Inward Investment Promotion and Enterprise Development.

"I expect signing of this Memorandum of Understanding (MoU) will lead to more trade and investment between India and Italy," Commerce and Industry Minister Anand Sharma said while addressing the largest-ever Italian business delegation in India here.

Sharma said the two countries have an immense potential to increase the $8-billion two-way trade.

"Trade and economic engagement surely has much to offer. At $8 billion (trade) it is not doing justice. It is the time for our businesses to engage more," he said.

On the occasion, Italian Minister of Economic Development Claudio Scajola said the businesses should explore trade opportunities, including scientific and technological cooperation in each other's country.

"Italy is happy to transfer knowledge, technology and innovation (to India)," Scajola said adding that renewable energy, telecommunication, infrastructure, banking and insurance are some of the areas of interest in India.

Ficci also signed a pact with Chamber of Arbitration of Milan, aimed at, settling disputes arising out of internal and international transactions. — PTI

Cadbury rejects Kraft takeover bid

London, December 14
British confectionery group Cadbury today rejected a takeover bid from US giant Kraft Foods, describing the offer as insufficient.

Cadbury management said it was offering shareholders maximum value by keeping the company independent, notably as it was raising its long-term financial targets.

"Kraft is trying to buy Cadbury on the cheap to provide much needed growth to their unattractive low-growth conglomerate business model," said Cadbury chairman Roger Carr in a circular to shareholders.

"Don't let Kraft steal your company with its derisory offer." Cadbury said it now foresaw organic growth of 5 to 7 per cent a year, a profit margin of 16-18 per cent by 2013 and double-digit growth in dividends per share starting next year.

Kraft, which has been repeatedly snubbed by Cadbury management, had appealed directly to Cadbury shareholders with details of its offer, now worth about £9.9 billion (11 billion euros, $16.1 billion) in cash and shares, down from an initial £10.2 billion.

Kraft is the world's second biggest snacks group after Nestle. Cadbury is meanwhile the second largest confectionery company behind Mars.

A tie-up between Kraft and Cadbury would merge leading Kraft brands Oreo biscuits and Maxwell House coffee with Cadbury's Dairy Milk chocolate and Trident chewing gum.— AFP

DLF plans integration of DAL

Mumbai, December 14
Country’s largest realty firm DLF is kicking off an integration plan with DLF Assets Ltd (DAL), a separate company set up by billionaire KP Singh, by buying out promoters’ stake in the latter. The DLF promoters had invested in DAL through Caraf Builders & Constructions and DAL has been set up to buy commercial properties of DLF.

In a communique to the Bombay Stock Exchange, DLF said a board meeting would be held tomorrow to consider integration of Caraf Builders & Constructions, which is a promoters group company, with its wholly-owned subsidiary DLF Cyber City Developers. — PTI

Abu Dhabi gives $10 bn to Dubai

Dubai, December 14
The Dubai government said today neighbour Abu Dhabi has agreed to give $10 billion in emergency funds that will go toward paying debts owed by its Dubai World conglomerate.

It said $4.1 billion of the money will be used to pay off the debt from Dubai World's Nakheel property division that are due today.

Announcing this, Sheikh Ahmad Bin Saeed Al Maktoum, chairman of the Dubai Supreme Fiscal Commitee, said the UAE central bank, based in Abu Dhabi, is also prepared to support local banks.

He said the remaining funds would be used for interest payments and working capital of Dubai World through April 30, 2010 on condition that the company successfully negotiates a standstill agreement with creditors as earlier announced.

On November 25, the Dubai government said the state-run holding company is seeking a "standstill" agreement on its debt, including for the Nakheel unit.

Al Maktoum said the government of Dubai would announce a comprehensive reorganisation law, a framework that is based on internationally accepted standards for transparency and creditor protection. — PTI

Citi to repay $20 bn bailout funds

New York, December 14
Citigroup today said it will repay $20 billion bailout money to the US government, a move that will ease strict government regulations on the financial services provider.

Citi, which was among the severely hit by the financial turmoil, had received $45 billion from the government as part of the Troubled Asset Relief Programme (TARP), an initiative which mainly pumped in billions of dollars into battered companies.

Vikram Pandit-led Citi has reached an agreement with the US authorities to payback $20 billion of TARP funds.

Citi has to pay back only $20 billion, since the government got a 34 per cent stake in Citi for $25 billion.

Citi would be the latest to exit TARP after Bank of America, which repaid bailout funds of $45 billion this month. — PTI

Nano Project
SC rejects plea challenging land acquisition

New Delhi, December 14
The Supreme Court today dismissed a plea challenging the land acquisition by Gujarat government for Tata Motors’ Nano car project.

The apex court questioned the locus standi of an NGO and its head in opposing the project which was aimed at producing the cheapest four-wheeler.

"You don't want industrialisation?" a Bench comprising Chief Justice KG Balakrishnan and Justices JM Panchal and BS Chauhan told the petitioners.

When the NGO Rashtriya Kisan Dal's chief HK Thaker alleged around 1,100 acres of fertile agricultural land of 4,000 farmers have been given to Tata Motors at Rs 410 crore by the Gujarat government, the Bench fired a volley of questions at him for filing the PIL.

"How have you come to the court? Do you know whether people, whose land has been acquired have been awarded compensation or not?" the Bench said.

When he replied in negative, the Bench questioned his bonafide for approaching the court. "Then why have you come here? Your bonafide is also doubtful," the Bench said.

It also noted that though the land for the project, which was shifted by the company from Singur in West Bengal after largescale protests, was on the outskirts of Ahmedabad, the NGO from Surendranagar was opposing the land acquisition. — PTI

Lakshmi Foods to invest Rs 600 cr on expansion
Ruchika M. Khanna
Tribune News Service

Chandigarh, December 14
Leading foodgrain processing company, Lakshmi Energy and Foods, is in an expansion mode. In the next three years, the company proposes to double its production capacity and turnover, and also commission a biomass-based power plant.

Taking to TNS here today, IS Gumber, director of the company, said the company has earmarked Rs 600 crore for the expansion. While a sum of Rs 350-Rs 400 crore will be required to increase the production capacity, the company has set aside Rs 250 crore for setting up a 60 MW biomass-based power plant at Khamano. The foundation stone of the power plant will be laid by the Union Minister for New and Renewable Energy, Dr Farooq Abdullah, tomorrow.

“This will be the biggest biomass-based power plant in the world. We hope to commission it by 2011. The power generated from this plant will later be sold to Power Trading Corporation. We already have a 30 MW biomass- based renewable energy plant, which is selling the entire output to Power Trading Corporation,” he said.

Lakshmi Energy and Foods is a city-based company, which processes paddy into non-basmati, besides shelling basmati rice. They are catering to the domestic as well as overseas market. “But with the increase in demand, we are now increasing the capacity of our plant. We are planning to spend Rs 350 crore-Rs 400 crore to raise the paddy-processing capacity of the Khamano plant from 1 million tonnes per annum (MTPA) to 2 MTPA in the next three years,” said Gumber.

He said initially the processing capacity would be raised in a phased manner. “We first propose to raise the processing capacity to 1.5 MTPA by mid 2011. Thereafter, we will raise the capacity to 2 MTPA. While 60 per cent of the expenditure will be met through term loans from banks, 40 per cent of the cost for expansion will be borne through internal accruals,” he said.

Gumber said this year the company was expecting a turnover of Rs 1,300 crore. “With the expansion, we are targeting a turnover of Rs 3,000 crore by 2012,” he added.

Glaxo resumes Andhra operations

New Delhi, December 14
GlaxoSmithKline Consumer Healthcare today said it has resumed operations of its factory in Andhra Pradesh, which it had earlier shut down due to the ongoing political unrest in the state.

"With reference to the earlier announcement...the operation at the said factory have now resumed," GlaxoSmithKline Consumer Healthcare (GSKCH) informed in a filing to the Bombay Stock Exchange.

GSKCH had said its management was reviewing the situation in AP, which is facing political unrest after the Centre agreed to create a separate Telangana state. It had said the temporary closure is unlikely to have much impact on its business. — PTI