The Tribune, Chandigarh, India

Factory output up 13.5 pc in March
Industry grows at 10.4 pc in FY’10

New Delhi, May 12
Driven by manufacturing sector, industrial production recorded 13.5 per cent growth in March, making it over 10 per cent expansion in six months in a row. Although the factory output declined marginally from 15.1 per cent in February, it is still good enough to ensure 7.2 per cent economic growth during 2009-10, Finance Minister Pranab Mukherjee said.

Industrial growth as measured by Index of Industrial Production (IIP) during 2009-10 works out at 10.4 per cent against 2.8 per cent in the previous fiscal when the global slowdown hit the economy.

"March IIP numbers are not going to impact the GDP growth estimates for 2009-10. We are hoping that during 2010-11, we will close the fiscal with double-digit factory output," Planning Commission Deputy Chairman Montek Singh Ahluwalia said.

Manufacturing, which accounts for nearly 80 per cent of the IIP, grew by 14.3 per cent during March. Mining recorded an increase of 11 per cent and electricity 7.7 per cent.

Referring to a slight decline in IIP in March compared to the previous month's, Commerce and Industry Minister Anand Sharma said, "These are minor fluctuations. We will review as to why some slowdown is there and we will go into the reasons at ways of intervention to correct it." The economists expect the factory output to ease a little bit in the coming months due to the twin impact of withdrawal of stimulus packages and uncertainty about the global economic recovery.

"The risks in the global economies pose a threat to the factory output here. Going forward, we see some decline in the IIP figures as the low base effect wanes. As base effect turns adverse, we will see the growth coming into single digit," HDFC Bank chief economist Abheek Barua said.

The IIP numbers further reveal that 14 out of the 17 industrial groups showed positive growth in March. The sectors, which witnessed negative growth were jute, textile products and wool, silk and man-made fibre textile.

Consumer durables, which was particularly hit by the global crisis, expanded 32 per cent in the month, while capital goods production rose 27.4 per cent. Consumer non-durables, which include FMCG goods like toiletries and cosmetics, however, grew a modest 3.3 per cent during March.

"There could be some months during the year when IIP may post a single-digit growth on the back of strong base effect. We expect IIP to post 9.8 per cent growth for 2010-11 supported by both, consumption and investment demand," Yes Bank chief economist Shubhada Rao said. During fiscal 2010-11, manufacturing sector output accelerated to 10.9 per cent from 2.8 per cent a year ago.

Mining output and power generation rose to 9.7 per cent and 6 per cent, respectively, from 2.6 per cent and 2.8 per cent, respectively, in the previous fiscal. — PTI

Land Acquisition
Bankers line up to get deposits from rich villagers
Ruchika M. Khanna
Tribune News Service

Interestingly, while Punjab has little money in its coffers, it has awarded a compensation of Rs 1.5 crore per acre to the farmers here. An amount of Rs 1,200 crore has been borrowed from the SBI as an infrastructure loan at 8.75 per cent rate of interest. Greater Mohali Area Development Authority has mortgaged its commercial property to avail this loan.

Manauli, Chachu Majra, May 12
Till a few months back, these non-descript villages in the backyard of Mohali were not used to high-flying executives swooping down on their rugged terrain. But over the past month, villagers are not just getting used to these executives coming over in their swanky cars, but have now learnt how to deal with their ‘sweet talk’ about investing their money.

After all, Rs 1,200 crore is a huge money. This bounty is being disbursed by the Punjab government to farmers in these villages, along with residents of Bakarpur, Kishanpura, Matran, Naraingarh and Chat villages, as cost for acquiring their land to set up the Airport City. And this money is now drawing hordes of bank executives, insurance agents, sales executives of sedans and SUVs, besides white goods manufacturers here, with each of them hoping to get some part of the money.

Each of these executives is vying with the other to get the villagers to spend some of the spoils. While the auto and electronics sales executives have already retreated honourably, with little success, the bankers are the ones who are now engaged in a ‘deposit war’. With most villagers unwilling to just spend away their money and insisting on sound investment, bankers and insurance agents are the ones who are now using all tactics to lure the farmers invest in their schemes.

A visit to these villages revealed that private banks like IndusInd Bank are offering a higher rate of interest than the existing market rate. The bank is offering 7.5 per cent rate of interest for a one-year deposit (8 per cent is being offered in case of senior citizens). This has helped the bank garner maximum deposits.

Sources in the bank say that of the Rs 600 crore disbursed to farmers till date, IndusInd Bank has managed to get close to Rs 120 crore as fixed deposits. Seeing the huge potential here, the bank has just opened a new branch here to service its “new and cash-rich farmers” better. Leading NBFC, Muthoot Finance Mohali branch, too, is offering a 10 per cent rate of interest to get deposits from these farmers.

Not to be left behind, public sector banks are using other techniques like cash incentives to get more deposits. Some banks have also roped in staff who belong to these villages to convince the villagers to deposit money in their banks. Though these banks cannot offer a higher rate of interest (than the book rate), some of these banks like SBI have roped in business correspondents to get deposits, who are offering cash incentives to the farmers.

Spectrum Woes: Telcos feel the heat
TRAI’s proposals arbitrary, says Airtel
Girja Shankar Kaura
Tribune News Service

Stocks tank

Telecom stocks, led by Bharti Airtel, fell by up to 9 per cent on Wednesday. Shares of Bharti tanked 8.20 per cent to settle at Rs 261.55 on the Bombay Stock Exchange. During trade, the stock plunged 8.8 per cent to touch an intra-day low of Rs 260.10. Other telecom stocks which closed in the negative territory were Idea Cellular (which settled 8.21 per cent down), Tata Communications (1.15 per cent lower), TTML (3.23 per cent down) and HFCL (0.54 per cent down).

New Delhi, May 12
Telecom regulator TRAI’s recommendations on allocation of 2G spectrum has had the established telecom operators sweating and country’s largest mobile service provider Bharti Airtel has been the first one to cry foul.

In a statement issued here, Bharti termed the TRAI’s proposals on allocation of 2G spectrum as "shocking, arbitrary and retrograde" and said that were against all existing global norms for spectrum allocation.

Yesterday, TRAI had recommended that companies should pay a one-time fee for holding 2G radio spectrum beyond 6.2 mega hertz (MHz) based on 3G prices, a move that will hit established operators dominant on the GSM platform.

Even as reports suggested that telecom companies were looking at legal options if the recommendations were implemented without consultation, the statement from Bharti said, "We are confident that the DoT and the government will take a rational approach and summarily reject these arbitrary, impractical and perverse recommendations".

The recommendations of TRAI would actually turn out to be lucrative for the government as charging operators for 2G spectrum beyond 6.2 MHz at 3G auction rates could well yield additional revenues of Rs 35,000 crore.

This, when added to the already strong bids in the 3G auction presently underway, the government could well end up raking in more than Rs 90,000 crore and help it reduce the fiscal deficit and also reduce the burden on Finance Minister Pranab Mukherjee of borrowing for the same purpose.

Inflation to ease in coming months: FM

New Delhi, May 12
Finance Minister Pranab Mukherjee today said retail price inflation would come down rapidly in the coming months and hoped that the country would exceed the growth projected by the International Monetary Fund.

"I expect inflation based on Consumer Price Index - Industrial Workers (CPI-IW) to decline rapidly as the price of the food items is now declining," he said addressing a meeting of industry chamber CII.

Average inflation based on CPI-IW for the months of February and March 2010 has been about 14.6 per cent, he said, adding that retail price-based inflation is higher mainly because food items make up most of the index basket.

Food inflation, based on wholesale prices, had scaled 20 per cent in December, but has since declined to around 16 per cent now due to arrival of fresh crops in the market.

The government has taken a host of initiatives to deal with rising prices, Mukherjee said, adding, "Inflation erodes real income. It hurts the marginalised and the poor segment of our society the most." As regards economic growth, Mukherjee said, "IMF in its latest World Economic Outlook has projected India's GDP growth to be 8.8 per cent in 2010, and 8.4 per cent in 2011 and I expect an even better performance." The economy was estimated to record a growth rate of 7.2 per cent during 2009-10 despite the impact of unfavourable monsoon on the farm sector, he added. — PTI

Dhuri man bags national technology award
Prabhjot Singh
Tribune News Service

Chandigarh, May 12
Can soap made from rice bran oil help lower cholesterol level? No, say scientists. But, instead of using rice bran oil in making soaps and detergents, if you use it as a cooking oil, then it can help in lowering your cholesterol level.

And the pioneer in processing rice bran oil, AR Sharma, who comes from dusty town of Dhuri in Sangrur district, has been honoured with the national award by the Technology Development Board of the Ministry of Science and Technology.

Former President Dr APJ Abdul Kalam presented the award - Rs 10 lakh and a trophy - to AR Sharma in New Delhi today.

Sharma is the chairman-cum-managing director of the A.P. Organics (P) Ltd, a part of Rs 500-crore A.P. Solvex Group of Companies. The group is the largest producer of refined rice bran oil, a unique health-friendly cooking oil produced from the outer brown layer of rice.

For the past over 50 years, says Sharma, the rice bran oil is used as a premium cooking oil in countries like Japan, Korea, China and Thailand. In Japan, it is popularly known as “Heart Oil” because of its scientifically proven cholesterol- lowering properties.

Unfortunately, though India is the second largest producer of paddy in the world having potential to produce over 12 lakh tonnes per annum of this healthy cooking oil, but it is used more in producing soaps and detergents than as a nutritious and healthy cooking oil.

“Our group enjoys the distinction of being pioneer in development of an eco-friendly and health-friendly cooking oil,” says Sharma, holding that the process used by the group for production of refined rice bran oil is economical and scientifically proven process. The patent for the process is registered with the Government of India in my name,” adds Sharma.

The group now plans to produce nutraceuticals from the residue generated during refining of rice bran oil. The company is working jointly with leading research institutes to develop necessary processes for the same, adds Sharma.

Besides marketing the product in consumer packs under the brand name “Ricela”, the company is also producing and packing for country’s leading edible oil brand “Saffola-Gold” that contains 80 per cent rice bran oil. It is also supplying its product to many other leading companies such as Pepsico for “Kurkure” and “Lays” and Agrotech for its popular edible oil blend “Sundrop-Heart”.

Because of the growing demand for the rice bran oil, the group is set to expand its present capacity of 600 TPD of rice bran oil to 800 TPD in the current year.

Euro zone economy grows 0.2 pc in Q1

London, May 12
The euro zone economy, grappling with a debt crisis, grew 0.2 per cent in the first quarter of 2010, while debt-ridden Spain managed to come out of recession after almost two years.

The euro zone, the grouping of 16 nations that share a common currency euro, had seen a 0.3 per cent GDP growth in the fourth quarter of last year.

The January-March quarter figures came just days after European leaders agreed to a massive $1 trillion rescue package for the euro zone to stabilise the region and prevent the debt crisis in Greece, Portugal and Spain from spreading to other countries.

As per the data, the German economy, the Europe's largest, expanded 0.2 per cent, while France saw an economic growth of 0.1 per cent in the first quarter of 2010. — PTI