New Delhi, June 17
Food inflation continued to hold out above 16 per cent for the eight straight week ending June 5, prompting the RBI to say it could increase interest rates to arrest price-line ahead of a scheduled policy review next month.

Week-on-week, food inflation showed a marginal decline to 16.12 per cent on cheaper fruits and vegetables, but the overall rate of price rise surged to double digits in May (10.16 per cent).

"Inflation is a big worry to the central bank... The (monetary policy) action can be done before the policy or after," RBI Deputy Governor KC Chakrabarty told reporters in Mumbai, although RBI sent signals to the contrary yesterday when it announced a move to release Rs 20,000 crore into the banking system.

Referring to yesterday's announcement on buyback of three government securities (G-secs) worth Rs 20,000 crore, he said this was done to ease the temporary liquidity crunch in the system owing to around Rs 1.4 lakh crore cash outflow due to payments for 3G and broadband licences and advance tax outgo.

Finance Minister Pranab Mukherjee, earlier in the week, had expressed the hope that food prices would decline by mid-July in view of the likelihood of a good monsoon.

Monsoon accounts for 80 per cent of the annual rains the country receives. Nearly 60 per cent of area under cultivation is rain fed. Last year, crop output was hit by poor monsoon.

"After July, the trend of monsoon (will become)... Known. Inflationary pressure would start coming down," he had said.

Experts, too, are of the opinion that decline in food prices would depend mainly on the performance of the monsoon.

Economists believe food inflation is going to remain volatile for a few more weeks till there is clarity on the monsoon front.

Week-on-week, prices of fruits and vegetables fell by six per cent and tea became cheaper by two per cent during the week under review. Fruits cost 14 per cent less. However, prices of urad rose six per cent and that of maize, bajra and gram inched up by one per cent each.

When compared to the same period a year ago, prices of potato fell 35 per cent and that of onion by 17.80 per cent. Pulses, however, became costlier by 34 per cent and milk by 21 per cent.

"Food inflation will remain volatile unless there is clarity on food production which is largely dependent on monsoon. This week it eased, next week it may spike," said HDFC chief economist Abheek Barua.

Food inflation has been hovering above 16 per cent since the start of the year. Prices of edibles had started rising last year and peaked to over 20 per cent in December 2009. Last year, food output was hit by poor monsoon. —PTI

New Delhi, June 17
Within days of a truce with younger brother Anil, Asia's richest man Mukesh Ambani will address shareholders of Reliance Industries tomorrow and is expected to announce mega investment plans, possibly in power and telecom sectors.

The cash-rich company has its options open to enter telecom, power and finance sectors that were hitherto no-go areas as spelt out in a separation agreement between the two brothers on June 18, 2005.

But, the non-compete pact was scrapped last month as part of a truce reached shortly after the Supreme Court verdict denying cheap gas to Anil Ambani-led RNRL from Mukesh-run RIL on the basis of a family agreement.

The bonhomie has also led to speculation that RIL may pick minority equity in three companies, including Reliance Communications, led by Anil and that younger Ambani, along with his wife Tina and mother Kokilaben, would attend the RIL AGM tomorrow.

Mukesh may use his address to RIL shareholders at Mumbai's Birla Matoshree auditorium, the first after the Supreme Court judgment on the bitter gas dispute, to spell out how the $2-3 billion of surplus cash the company is generating every year will be put to use.

Friday also marks five years to the day since matriarch Kokilaben Ambani brought about a family settlement, dividing the Reliance group empire between the two brothers.

What is keenly watched is whether Mukesh will make any comments on the dispute over pricing and supply of gas from RIL's KG-D6 fields to Anil Ambani Group's power plants.

Mukesh has so far not made any comments during the four-year long gas dispute. RIL's statement issued after the Surpeme Court judgment too did not have any comment from Mukesh on the row. — PTI

Mumbai, June 17
The Reserve Bank of India (RBI) is all set to free up savings bank deposit rates of banks thus allowing them to set their own rates, Deputy Governor KC Chakrabarty said here today.

Speaking to reporters at an event on financial inclusion, Chakrabarty said the central bank felt that de-regulating interest rates would result in rates becoming more competitive.

"We are in favour of deregulating all interest rates but a decision will be taken after debating this," Chakrabarty said.

He, however, felt that difference in interest rates won’t see big variation between banks. “This is a highly competitive market (where) prices do not vary much,” Chakrabarty said. He, however, added that market conditions would determine the rates offered by banks. At present, the savings bank rate set by the RBI is 3.5 per cent.

According to the RBI official, the apex bank was also working towards taking banking services to households across the country. Banks, he said, have been asked to prepare a three-year road map towards this end.

He further added that the central bank continued to be concerned about inflation. “If things change fast, there will be more measures depending upon the environment,” he said.

Jalandhar, June 17
Forward trading in natural rubber by a well-organised and well-connected mafia has forced the rubber industry to die a slow death. The unbridled rubber-mafia has been hoarding the natural rubber stock, besides jacking up the prices by creating artificial demand. The laxity of the Central and state governments towards the unpredictable prices of the natural rubber has left the rubber industry in this part of the region on the verge of closure.

Worst hit is the rubber industry in northern states, including Haryana, Punjab and Delhi that consumes almost 60 per cent of the total rubber produced in the country. Kerala is the main rubber producing state and contributes 95 per cent to the national rubber production.

The forward trading by the mafia that has captured the national rubber market, following which the rates of raw rubber have witnessed a drastic hike in the past. The prices of rubber have increased up to Rs 175 per kg from Rs 40 per kg.

Talking to The Tribune, chairman of All-India Rubber Industries Association (NR) Mohinder Pal Gupta claimed that the Centre should ban forward trading and fix maximum retail price for the rubber on same pattern at par with other crops.

Moreover, the government should encourage the rubber plantation in eastern states like Tripura and Assam, so that the monopoly of Kerala is broken.

President of the Jalandhar Rubber Goods Manufacturers Association BB Jyoti claimed, “The micro, small and medium rubber units have faced the heat and are left with no option but to stop the production.” He claimed that the natural rubber market was in the grip of a strong bull rally and the units were not able to bear the daily price rise.

He said the import of the Styrene Butadiene Rubber (SBR), a nearest substitute of the natural rubber, be allowed to bring down the natural rubber prices. The SBR is nearly 25 per cent cheaper to the natural rubber.

The government should scrap import duty on rubber and hike the existing import of finished goods, pointed out Viney Gupta, a local industrialist. He revealed that the import duty on natural rubber was 20 per cent, while it is only 7.5 per cent on the finished goods.

The industrialists demanded that the cess imposed almost from 10 years and value added tax (VAT) should also be abolished. Members of the associations have also demanded more representation of the industrialists in the Central Rubber Board.

Shimla, June 17
The state committee of the PHD Chamber has termed the hike of 13 to 17 per cent in power tariff for industrial and commercial consumers a setback for industry and said it would not help the state in attracting new investments.

Chairman of the committee Dhian Chand said the increase in tariff ranging from 40 to 50 paise per unit for industrial units was not justified as the industrial sector was the main source of income but the state power utility was not deploying even 3 per cent of its manpower to serve it. The decision was not in line with the state’s image of a power surplus state and it would discourage the prospective investors.

Irregular supply and frequent breakdowns of power had of late become a regular feature but the utility had failed to put in place any effective mechanism to address the problem.

He said it was not necessary to raise the electricity tariff at this point of time and the fact that it was to come into force retrospectively from April 1 was all the more unacceptable as the additional burden could not be recovered from customers.

A member of the Chamber, Umesh Akre, expressed his displeasure over the dual tariff system for the commercial consumers. He underlined the need for single tariff based on actual power consumption.

BRIEFLY

Rupee gains 24 paise
Mumbai: The Indian rupee on Thursday ended higher by 24 paise at 46.30/31 against the US dollar on the back of persistent capital inflows. The Indian rupee resumed slightly lower at 46.55/56 per dollar at the Interbank Foreign Exchange market on mild dollar demand from banks. It had closed yesterday at 46.54/55. However, it recovered sharply to 46.28 per dollar before closing at 46.30/31 per dollar.— PTI

Cognizant buyout
Bangalore: Leading global information technology firm Cognizant on Thursday said it has acquired Galileo Performance, a Paris-based provider of IT testing consulting services. The terms of the transaction, however, were not disclosed. "The acquisition will enable Cognizant to bring world-class testing services to the French market, and the addition of French-speaking consultants will help us better serve our customers in the region," said Francisco D’Souza, CEO, Cognizant. — PTI

Sun gets nod for epilepsy drug
New Delhi: Drug maker Sun Pharmaceutical Industries on Thursday said it has received the US health regulator's nod for marketing a generic version of the Keppra injection, used for treating epilepsy, in the American market. The company received the approval from the US Food and Drug Administration to market the Levetiracetam injection, a generic version of UCB's patented drug Keppra, in the American market.— PTI

BlackBerry 8530
Mumbai: Cellular service provider Tata Teleservices Limited (TTL) and Research In Motion have come up with BlackBerry Curve 8530 smartphone for the CDMA customers on Tata Indicom network. The handset will be available at all authorised Tata Indicom retail stores across the country and will have a combination of pre-paid and post-paid plans, Tata Indicom said. — PTI

Borges forays into India
New Delhi: Spanish FMCG player Borges on Thursday announced its foray into the Indian market, with the launch of its olive oil brands, aiming to become a Rs 100-crore firm in the country within the next three years. The $-700 million company has earmarked an investment of up to 60 crore for marketing its products by 2013.— PTI

Quippo-WTTIL in pact with IBM
New Delhi: IBM on Thursday said it has signed a five-year, multi-million dollar deal with Quippo-WTTIL for managing the telecom tower company's IT infrastructure. As part of the deal, IBM will provide technical support for Quippo-WTTIL's IT infrastructure system, including managing the hardware, mailing and infrastructure management software applications, it said. — PTI