New Delhi, December 17
Food inflation galloped to a more than 10-year high of 19.95 per cent as of December 5, prompting an increasingly concerned government to think of stepping up imports to ease prices.

Prices of potato, other vegetables and pulses had driven inflation higher from the previous week's 19.05 per cent.

"Food prices are going up and this is an area of concern ... we have to take appropriate measures to see what best could be done by augmenting the supply through imports," Finance Minister Pranab Mukherjee told reporters even as a Parliamentary committee pulled up his ministry for not taking timely action to check price rise.

Rising inflation may force the Reserve Bank of India to withdraw easy money policy in January review of the monetary policy and jack up policy rates and ratios to withdraw liquidity from the system.

Despite easing of import restrictions by the government to augment supplies, food inflation soared to close to 20 per cent, driven by pulses, milk, wheat and rice, besides costlier vegetables, including potatoes.

On an annual basis, potato prices zoomed 136 per cent and pulses became costlier by over 40 per cent. Onion prices rose 15.4 per cent. Other food items that became dearer include wheat 14 per cent, milk 13.6 per cent, rice 12.7 per cent and fruits 11 per cent.

Food price inflation was triggered by a short supply of essentials owing to lower farm output following drought and floods in many parts of the country in the year.

While pulling up the finance ministry on rising prices, the Standing Committee on Finance in its report called upon the government to take immediate steps to provide relief to the common man.

Besides other things, it asked the government to amend the Essential Commodities Act to check hoarding and speculation.

"The Ministry of Finance...has obviously failed to intervene timely and squarely address this burning issue (price rise) with due seriousness," it said.

The comprehensive wholesale price inflation, which includes manufactured products in addition to food and fuel items, rose to 4.78 per cent in November from 1.34 per cent in October.

"By the end of March 2010, it (inflation) could be close to seven per cent," Prime Minister's Economic Advisory Council chairman C Rangarajan had said earlier this week.

"We need to watch for behaviour of prices in December... possibly some action will be taken (by the RBI), which can have a moderating effect (on inflation)," said Rangarajan, a former Reserve Bank governor.

The RBI, which keeps a close watch on inflation and growth, is slated to come out with third quarterly review of monetary policy on January 29, 2010.

The central bank had already raised the fiscal-end inflation forecast to 6.5 per cent from 5 per cent earlier. — PTI 

New Delhi, December 17
Reliance Industries Ltd (RIL) today contended in the Supreme Court that it would stand to lose more than $38 billion if it sold gas to Reliance Natural Resources Ltd (RNRL) at $2.34 a unit for 19 years.

Arguing before the special Bench headed by Chief Justice KG Balakrishnan, senior counsel Harish Salve said RIL had borrowed about $6 billion on an average interest of 10 per cent. The interest alone would work out to $4 billion, taking the loan burden to $12 billion.

Thus the net return would be only $1.8 billion on an investment of $12 billion. In other words, the return would constitute a mere 2.6 per cent, which was much below the cost of borrowing. If $12 billion was invested in a bank at an interest rate of 8 per cent a year, it would yield $1.8 billion in just two years and $40 billion in 19 years.

How RIL could be expected to make an investment of $12 billion and take all the risks for a return of $1.8 billion after subsidising RNRL to the extent of $ 6.3 billion, he asked. At the same time, RNRL would not pass on the subsidy to the power consumers and instead make huge profits at the cost of RIL, he said.

Rebutting RNRL’s argument that 28 mmscmd claimed to be supplied represented just one per cent of the gas exploration, Salve said it would in fact work out to 35 per cent of the country’s aggregate gas production prior to the commencement of Krishna-Godavari D-6 production and 35 per cent of peak production from KGD-6.“It is also more than 50 per cent of the current production of gas by ONGC.”

On another RNRL stand that non-supply of gas by RIL would render RNRL’s power projects non-bankable, he said, there was no evidence, whatsoever, to show that financing of any power project was declined because gas supply arrangement was considered to be non-bankable. Arguments in the case are slated to conclude tomorrow.

Mumbai, December 17
Following severe criticism from stock brokers and other market participants, both the Bombay Stock Exchange and the National Stock Exchange have postponed the move to increase trading hours till January 4 next year.

A joint statement issued by the BSE and the NSE said the earlier announcements made by them to begin trading from 9 am with effect from Friday has been postponed. The existing practice of the market functioning from 9.55 am to 3.30 pm would continue for the time being, the joint statement said.

According to sources, the one-upmanship by both exchanges to advance trading hours drew the attention of the Security Exchange Board of India which asked representatives of both exchanges to sit together and formulate a joint strategy.

Broking houses were also vociferous in their opposition to increased trading hours on the grounds that they did not have adequate infrastrucuture to cope with the higher work load.

It all began on Tuesday when the Bombay Stock Exchange unilaterally announced that it would be advancing market hours by 10 minutes to 9.45 am. On Wednesday night, the NSE announced that it would bring forward trading hours to 9 am from Friday onwards. The BSE immediately followed suit but said it was doing under pressure from its competitor. As the news sank in, brokers and other market intermediaries came up with a number of objections, including inadequate support from banks.

The RTGS clearance system of the banks, one argument went, begins functioning only from 9.45 am and thus it would not be possible for High Net Worth Individuals to transfer funds to purchase shares at market opening.

Chandigarh, December 17
The industry is slowly waking up to the urgency to develop renewable energy. It is also seeing a huge potential for growth in this sector.

Be it electronic goods manufacturers or financial institutions, everyone is now joining the bandwagon to get the early bird benefit. With the Government of India as well as different state governments giving a huge push to this sector, things are finally looking up.

Talking to TNS, Zubin Irani, managing director of Carrier India, which is into refrigeration and air conditioning solutions, says they have not just taken a lead in providing energy efficient appliances, but are also involved in creating awareness on energy conservation.

“In 2008, more than 80 per cent of our products were BEE (Bureau of Energy Efficiency) labelled. Even before the government made it mandatory for all air conditioners and refrigerators to be star labelled in January 2010, we had already achieved the target. Of the 52 green buildings that have been recognised by BEE, we have provided end-to-end solutions in many buildings,” he says.

With various financial institutions coming to the rescue of those developing such technologies, more research and development is now being done in this field. SK Pawar, AGM, resident representative of EXIM bank, says banks are now making efforts to finance these projects. “We have recently entered into a framework agreement with European Investment Bank under which we have been given a $150 million credit line, which now has to be used in the next three years. We are already in talks with several companies to finance their projects,” he says.

Venkittu Sundaram, managing director, Epuron Renewable Energy, however says the biggest challenge was skilled manpower shortage. “It’s time that the IITs and IIMs should set up special environment chairs, so that quality professionals can be churned out. Since most renewable energy products require a lot of land to be set up, the government should demarcate land in different areas where such projects can be set up. For example, north India is good for setting up hydel and biomass products. India has a huge potential to develop end-to-end solutions in different renewable technologies, which can be exported after economies of scale are achieved,” he says.

Chennai, December 17
The textile industry of Tamil Nadu is feeling the heat of unrest in Andhra Pradesh over the Telangana issue as movement of goods through roads has been disrupted for many days and stocks piling up.

Travel through Hyderabad, a major transit point for northern and eastern states from South India, has become impossible following agitations in different places and the truckers and mill owners are facing huge losses.

As many as 100 trucks loaded with readymade apparels head for the northern part of the country from Palladam, Somanur and Tirupur in western Tamil Nadu everyday with each truck carrying goods weighing between 8 and 16 tonnes.

The recent developments over Telangana has brought vehicular movement to a grinding halt in different parts of Andhra Pradesh. Trucks were neither able to enter nor move away from the Hyderabad highway.

Traffic has been completely disrupted in the interior parts of Ananthapur, Chittor, Cuddapah, Nellore and Tirupati districts and in other places movement of vehicles has been delayed for hours in view of agitations and road blocks.

The timing of the agitations has also hit the textile industry, as it comes when Christmas and New Year are approaching. At this time, readymade products are sold like hot cakes in Andhra Pradesh and eastern India and obstruction of trucks traffic will result in heavy losses for mill owners.

The truck owners also fear that the formation of Telangana would mean that they should spend money in getting permits, since they would have to cross two states, instead of one. The amount for getting permits would be double, said Nallathambi, president of State Lorry Owners Federation of Tamil Nadu.

Transport corporations are incurring heavy losses as they are forced to maintain only skeletal services. Passengers, too, are severely affected, since they are compelled to rely on train services. 

BRIEFLY

Carnation ties up with Fiat group firm
NEW DELHI: Carnation Auto, the multi-brand car service provider promoted by former Maruti Suzuki head Jagdish Khattar, on Thursday joined hands with Fiat group firm Magneti Marelli for servicing premium cars in the country. “By this tie-up, we will now start premium car services for cars costing Rs 10 lakh and above,” Jagdish Khattar said. — PTI

Orchid Chemicals
MUMBAI: Orchid Chemicals on Thursday said it is exploring opportunities for the buy-back of its outstanding Foreign Currency Convertible Bonds (FCCBs).At present, the firm has a debt of about Rs 1,200 crore, besides a liability of $155 million in FCCBs. The company also has a tax liability of $20 million. — PTI

GM India inks pact with SBI
NEW DELHI: Car Maker General Motors India on Thursday entered into an agreement with State Bank of India for auto financing. The SBI will provide retail and wholesale financing to customers for purchasing General Motors India’s vehicles. 
— PTI

Gold recovers by Rs 100
NEW DELHI: A firm overseas trend on Thursday helped gold recover by Rs 100 to Rs 17,300 per 10 gram in the bullion market here on fresh buying by stockists amid marriage season demand. Standard gold and ornaments recovered by Rs 100 each to Rs 17,300 and Rs 17,150 per 10 gram, respectively. — PTI

Vatsayan on TiE global board
CHANDIGARH: Puneet Vatsayan, president, TiE, local Chapter, has been elected to the global board of TiE from among 2,500 charter members in 53 chapters across 12 countries. This is the first time that a representative of an emerging TiE chapter in a non-metro has been elected to the 15-member global body. Puneet has been elected for a two-year term till December 31, 2011. — TNS

McDonalds in Amritsar
AMRITSAR: McDonalds opened its first flagship store in Amritsar. Residents of the city can now savour burgers and refreshing beverages at affordable prices. — TNS