New Delhi, May 17
With its weaponry facing rapid obsoletion, the government today proposed to raise FDI in defence production to 74 per cent, saying it would help ensure technology transfer and funds to effectively replace imports, estimated at over $8 billion.

Mooting a discussion for raising FDI from 26 per cent in defence production to the same level as telecom sector, the Industry Ministry also sought to allay security concerns and impact on domestic players, saying effective checks could be put to tackle any "suspect" company.

Leading industry chamber CII, which had earlier asked the government to limit FDI to 49 per cent only, declined comments while no reaction could be obtained from Ficci.

Another industry chamber Assocham said it was a strategic and sensitive sector and opening up FDI from 26 per cent to 74 per cent straightaway "will not be a prudent step".

Increasing FDI cap from 26 per cent to 49 per cent as advocated by some industry associations "will not really help us in getting the best technology partners to invest in India... (by this) we may be accused by posterity of doing too little and too late," the discussion paper said.

"The established players in the defence industry should be encouraged to set up manufacturing facilities... In India with FDI up to 74 per cent," it added.

Later, DIPP Secretary RP Singh said increasing the FDI to 49 per cent would not make much difference as there would not be extra benefits to investors.

Asked whether other ministries had been taken on board, Singh said they would also respond as it was only a discussion paper. "We have to complete the inter-ministerial discussions, and after that we will take further steps depending upon what kind of consensus emerges," he said.

In a bid to give some comfort to domestic players, the paper suggested that there need not be any commitment on procurement from these foreign-controlled entities.

"It is not at all necessary for us to underwrite the production. The FDI policy will not interfere with the prerogative of armed forces to chose an equipment of their choice... (global defence firms too) will have to participate in the Request for Proposal to technically qualify and also compete in the financial bid," it said.

The paper said: "The defence equipment (in the country) available today is of old vintage and needs replacement. Only 15 per cent of the equipment can be described as state-of-the- art and nearly 50 per cent faces obsolescence." India opened up the defence equipment industry to private sector in May 2001, but restricted foreign participation to 26 per cent in this capital intensive sector. India at present imports over $8 billion worth of defence equipment and its defence budget is growing at 13.4 per cent annually since 2006-07. — PTI

New Delhi, May 17
The Ministry of Mines has turned down a request from the Finance Ministry on further dilution of government stake in the National Aluminium Company Limited (Nalco), causing differences to crop up in the government.

Mines Minister BK Handique said his ministry was not in favour of any further equity dilution in the navratna PSU.

"We are not in favour of any further divestment in Nalco. It does not need require any funds. It is doing good," Handique told PTI. He said the aluminium producing company would not be in need of funds for the next two years.

"The Nalco board had earlier expressed views against disinvestment. But, on the request of the Ministry of Finance (Department of Disinvestment), we had asked the board to consider the matter again," he added.

The Department of Disinvestment, which comes under the Ministry of Finance, had asked the Mines Ministry to consider 10 per cent disinvestment in Nalco, a proposal that was forwarded to the firm's board for further deliberation.

"The Ministry of Finance had made a reference to the Ministry of Mines in March 2010 to consider disinvestment of 10 per cent equity, out of the remaining 87.15 per cent of the total paid-up capital held by the government in Nalco," Handique had earlier said in Parliament.

His statement comes days after Orissa Chief Minister Naveen Patnaik said that his party, the Biju Janata Dal, would oppose any move by the Central Government to disinvest Nalco.

Many non-Congress political parties and trade unions are also opposed to the move.

Nalco reported a five-fold jump in its net profit at Rs 391.48 crore for the fourth quarter ended March 31, 2010, as against the year-ago period. — PTI

Mumbai, May 17
As a part of its promotion campaign, Malaysia-based budget airline AirAsia today said it plans to offer 1 million free seats across its global network. The promo offers seats starting from as low as Rs 89 and the passenger will have to pay only airport taxes from Kuala Lumpur to destinations such as Johor Bahru, Alor Setar, Kota Kinabalu, Kuching, Langkawi, Penang and others, a company press release issued here said.

AirAsia has a network of 130 routes spanning 20 countries, including India. Under the offer, a one-way Mumbai-Kuala Lumpur ticket would cost only Rs 3,990 (inclusive of taxes), while a New Delhi-Kuala Lumpur flight would cost Rs 4,490 (inclusive of taxes), the release said.

The seats under this offer are open for booking from May 18 to 23 for the travel period from January 3 to May 8 next year, the release said.

Booking is, however, available on a first-come-first-serve basis and can be made exclusively through the company's website, the release said. — PTI 

New Delhi, May 17
Eyeing strong demand from the automobile sector, Reliance Industries has joined hands with Russia-based petrochemical company SIBUR to produce synthetic rubber at the company's Jamnagar site in Gujarat.

While SIBUR will provide the proprietary technology for butyl rubber polymerisation and its finishing, RIL will supply monomers and provide the JV with infrastructure and utilities, according to a Memorandum of Understanding signed between the two companies.

"Reliance Industries Ltd... And SIBUR, Russia’s leading petrochemical company, have signed a MoU to set up a joint venture in India. This new joint venture will produce butyl rubber at Reliance's integrated petrochemical site in Jamnagar," RIL said.

Commenting on the initiative, a RIL spokesperson said the Indian rubber industry is growing rapidly on the back of automobile demand in India and the sub-continent. "This step reinforces RIL's commitment to the synthetic rubber industry in India," he said.

SIBUR president Dmitry Konov said the creation of new capacity in close proximity to Asian markets provides both SIBUR and Reliance with exciting opportunities.

Rubber consumption in Asia has shown strong growth in recent years, triggered by increased volumes of tyre production, he said. — PTI 

New Delhi, May 17
The Planning Commission today set up a mechanism for quarterly monitoring of infrastructure projects in five sectors, including power and roads, to take corrective steps to expedite implementation.

"We will report (the progress) to the Cabinet Committee on Infrastructure (CCI) so that the government can take a decision ... For implementation of the projects," Planning Commission Deputy Chairman Montek Singh Ahluwalia said while releasing this fiscal's targets for railway, civil aviation and ports, besides power and roads.

The quarterly progress report, he added, would be placed before CCI which is headed by Prime Minister Manmohan Singh.

The important targets for 2010-11 announced by Ahluwalia include additional power generation capacity of 20,359 MW, development of 2,500 km of highways and 1,019 km of new rail lines. During 2009-10, only 9,585 MW electricity generation capacity was added against the target of 14,507 MW and 2,008 km of highways were constructed (target of 3,165 km). As far as railway is concerned, only 85 km of new lines were added during April-December 2009 against the full financial year target of 250 km.

He expressed confidence that investment in the infrastructure sector during the 11th Plan (2007-12) would be close to the target of $500 billion, with private sector contributing about 40 per cent of the amount. The investment target for the infrastructure sector in the 12th Plan (2012-17) is likely to be fixed at $1 trillion, with private sector contributing about 50 per cent of the total estimated outlay.

The focus of the exercise would be on physical targets instead of financial expenditure, Ahluwalia said, adding "this is for the first time that we are going in for quarterly monitoring of the target." — PTI

Chandigarh, May 17
The fall in production of chicks and its high prices have hit the poultry business hard. With this shortage leading to a shortage of broilers and eggs, the prices of all poultry products are unusually high this summer.

With the demand of poultry products falling in the summer, prices tend to cool down at this time of the year. But as of now, retail prices of broiler are ruling at around Rs 140-155 per kg across North India, while prices of eggs are currently ruling at Rs 2.50-3 per egg. There has been a minimal decline in prices of poultry products since the winter months, when broiler was selling at around Rs 150-160 per kg.

Sources in the poultry trade informed TNS that this time the production of chicks by the two main hatcheries in the country has been very low. Because of the bird flu epidemic in the past two years, these hatcheries had deliberately reduced the grand parent stock of the chicks. This, in turn, led to a fall in the parent production of chicks. Sources claim that the production at these two hatcheries has been reduced by 50 per cent and they are unable to supply the parent stock to small hatcheries in the region.

In fact, say sources the hatcheries here are getting parent stocks after a waiting period of six months, and that too only 70 per cent of the order placed by them.

Also, the heat wave, too, has hit the production of chicks. Gunpreet Singh Sagri, director of Sagri Hatcheries, informed TNS that not only were they facing a shortage of parent stock, but were also suffering from a high mortality rate in birds because of the intense heat.

As a result, a day-old chick, which cost Rs 14-15 per bird last year, is now available for Rs 28-29 per bird. GS Bedi, a leading poultry farmer in Amritsar, informed TNS that this had led to a high input cost for farmers. “Besides, the imposition of four per cent entry tax on soya meal, groundnut cake and sunflower oil (used as poultry feed) by the Punjab government has further increased the input costs. A farmer having 10,000 layers in his farm will now have to pay Rs 1 lakh per annum as entry tax. Thus, he has no option but to increase the price of poultry products,” he rued.

New Delhi, May 17
Bids for one set of nationwide third generation (3G) mobile spectrum licences in the country today touched the Rs 16,000-crore mark ensuring that the government would earn a minimum revenue of over Rs 65,000 crore from the auction.

As of today, 176 rounds of bidding have been completed, the Department of Telecommunications (DoT) said on its website. Nine mobile operators, including Bharti Airtel, Reliance Communications and Vodafone's Indian unit, are participating in the auction.

Bidding for the 3G spectrum, which would allow firms to offer high-speed Internet and other premium services such as video calling on mobile phones, started on April 9.

Delhi has again taken the lead from Mumbai in the last two rounds and the cost for the 3G licence in the national capital stood at Rs 3,155.97 crore followed by Mumbai at Rs 3,089.50 crore.

With spectrum still in excess demand for Delhi, an increment of Rs 31.55 crore has been added for the next round of bidding. Incidentally, the demand for spectrum in Mumbai went into negative today and there is no increment for the next round.

Telecom Minister A. Raja said on Friday the auction was expected to conclude in a few days.

The base price for one set of pan-India licences was set at Rs 3,500 crore. The government will sell four such licences - three from the auction and one set to state-run telecoms firms which would have to match the highest bid price paid by the private operators - plus one extra licence each in five of the 22 telecom zones. 

New Delhi, May 17
India has become the first country to have certification system - Tracenet - for organic products. India aims to export $1 billion worth of organic products in the next five years considering their greater demand. According to the Agricultural and Processed Food Products Export Development Authority (APEDA), Tracenet, world's first software on organic products that can trace details of each consignment up to the farm level, will increase credibility of Indian organic food in the global market.

It is not just exports, APEDA officials say India also needs to develop markets for organic produce within the country so that farmers get remunerative prices. The system was launched on Saturday for full implementation at the 10th anniversary of the implementation of National Programme for Organic Production (NPOP).

It is now imperative for all operators to be certified through this system, which will enable to keep track of the origins of organic products.

The software can be easily accessed anywhere by stakeholders in supply chain of organic export from farmers to certificate bodies, Commerce Secretary Rahul Khullar said, adding that it would help establish the credibility of organic certification and deliver commercial assurance.

Mumbai, May 17
Engineering firm Larsen & Toubro today posted a growth of 44 per cent in its net profit to Rs 1,438.10 crore for the fourth quarter ended March 2010, over the same period last year.