The Tribune, Chandigarh, India

	Industrial growth falls to 7.1 per cent in June New Delhi, August 12 Industrial growth slipped to a 13-month low of 7.1 per cent in June as manufacturing output dropped, but economists did not see this turning into a trend. Also, this is for the first time in nine months that industrial expansion, as measured by the Index of Industrial Production (IIP), was in single digit, as two other segments — mining and electricity generation — too posted lower numbers than a year ago. In fact, the plan panel hoped that the June figures for industrial growth will not be a trend for remaining months of this fiscal. "I will not conclude from the June figures that this is going to be trend for rest of the year. A lot of individual components seems to be showing reasonably good growth," Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters here. Experts attributed the sluggish pace of growth to high base effect. The expansion in factory output was quite high at 8.3 per cent a year ago and it makes even a large hike now seem modest. "One has to take into account that the base effect of low growth in industrial production last year is now dying out and so we will see a relatively subdued IIP figure for two-three months. Maybe, from October-November, the figures will again pick up," Axis Bank chief economist Saugata Bhattacharya said. Crisil chief economist DK Joshi also said industrial growth will pick up in July. "We believe that the economy will clock an industrial growth of 9 per cent for the year. The June figures are down but we believe for July it will go up. However, volatility will remain and we will continue to see this kind of ups and downs," he said. Economists are, however, divided whether the economy will register 8.5 per cent growth for this fiscal, as expected by the government. "For a year as a whole, it (IIP) does not necessarily have to be in double digit, in order to achieve 8.5 per cent GDP growth. But we do want double digit industrial growth," Ahluwalia said. Slowdown in industrial growth became quite evident when key infrastructure sectors, having a weightage of more than 25 per cent in IIP, slowed to 3.4 per cent in June, the lowest performance in 10 months. While growth in manufacturing, which constitutes around 80 per cent in IIP, fell to 7.3 per cent in June against eight per cent a year back, mining output expanded by 9.5 per cent against 14.2 per cent and electricity generation was up by merely 3.5 per cent against eight per cent. Within manufacturing, consumer durables like auto etc continued to show a remarkable growth. The sector expanded by 27.4 per cent in June from 16.2 per cent a year ago. Of 17 industries in IIP, 13 posted a positive growth. — PTI
	M&M close to buying SsangYong Mumbai/New Delhi, August 12 Auto major Mahindra & Mahindra today said it has been chosen as the preferred bidder by the beleaguered South Korean vehicle maker SsangYong Motor for acquisition and the deal is likely to be finalised by November this year. "I think what this deal does for us is provide us with a tremendous opportunity to accelerate our progress towards our stated intention of becoming a globally recognised player in the specific niche of utility vehicles," M&M vice-chairman Anand Mahindra told reporters here. He said the deal to acquire a majority stake in the Korean firm is likely to be finalised by November this year but did not disclose the financials involved. M&M said it intends to make SsangYong Motor function as an independent entity with Korean management. Meanwhile, SsangYong Motor (SM) Strategy Department Manager Chung Yong-won told PTI over phone from Seoul: "We have selected Mahindra as the preferred bidder and they are expected to sign the agreement by the end of this month." As per the "preferred bidder" status, M&M would require to enter into a memorandum of understanding, followed by a confirmatory due diligence process and signing of definitive agreements thereafter. — PTI
	SBI hints at hike in deposit, lending rates New Delhi, August 12 The country's largest lender State Bank of India today said it will take a call on hiking deposit rates and lending rates for existing borrowers by at least 25 basis points. "There is an upward bias on interest rates ... on the both deposit and lending rates. We will review deposit rates and benchmark prime lending rate," SBI Chairman O P Bhatt told reporters here while announcing the first quarter results of the bank. When asked about the quantum of the likely hike, Bhatt said, "It has to be minimum 25 basis points." He, however, did not say when the bank would review the rates. "The deposit rates have almost bottomed out for the industry and there is definitely an upward bias as far as advances are concerned because of the way the RBI is managing the inflation and liquidity," he added. Bhatt also said that the bank is planning to raise Rs 20,000 crore from rights issue this fiscal. If rights issue does not happen, options are also open for raising the fund through preferential issue and follow-on offer, he added. Profit up 21.5 pc The State Bank of India today reported a 21.54 per cent growth in consolidated net profit to Rs 3,467.09 crore for the first quarter ended June 30, 2010, over the same period last year. The bank had a net profit of Rs 2,852.45 crore in the year-ago period, SBI said in a filing to the Bombay Stock Exchange. SBI's total income, however, decreased marginally to Rs 32,808.06 crore in April-June quarter of 2010 from Rs 33,132.7 crore in the same quarter last fiscal. On a standalone basis, SBI net profit grew 25 per cent to Rs 2,914.2 crore in the first quarter, up from Rs 2,330.37 crore in the year-ago period. — PTI
	Polymer currency notes soon? Anuja Jaiswal Tribune News Service Chandigarh, August 12 While handling currency notes, we hardly ever think about their proper upkeep. But it may come as a shocker that the Reserve Bank of India destroyed almost 25 per cent of the currency bills (11,962 million pieces of various denominations) that were in circulation in 2008-09 because they were either damaged or soiled. If this isn't enough, sample these figures: The RBI, Chandigarh alone, which covers the states of Punjab, Himachal Pradesh, Haryana and UT of Chandigarh, destroyed 49.93 crore pieces of notes worth a whopping Rs 2,951.59 crore in 2008-09. This figure went up to 64.90 crore pieces, valuing Rs 5,164.89 crore, in 2009-10, and is expected to rise even further this year. But all this might change if the latest reports about the RBI making a paradigm shift from paper currency to plastic (polymer) are true. Bankers in the region are hopeful that besides putting a check on the growing menace of circulation of counterfeit currency in the region, it’ll resolve the perennial issue of destruction of soiled notes to a great extent. According to officials, destruction of soiled notes is a major task that goes on round the year. While all the currency chests in the country are equipped with note-sorting machines, RBI is in the process of installing desktop note-sorting machines in non-currency chest branches also to streamline the process and make it faster, say officials. A senior RBI official said soiled notes are no longer burnt as was done earlier and are now destroyed by shredding them in special shredders. “Pellets of the minced paper are then handed over to industrialists at some nominal cost and the same are used as fuel for furnaces”, he said. “Polymer notes have a longer life and will be cost-effective,” says TR Verma, Lead Bank Manager, Punjab National Bank, Panchkula. He said since polymer notes are humidity-resistant, waterproof and cannot be torn easily by hand, their shelf life is much more than the conventional paper notes. Besides, he said, counterfeiting polymer notes is much more difficult and a costlier process. Agreeing that the life of currency notes will increase with the shift to polymer, B Akbaraly, DGM, Central Bank of India, Chandigarh Zone, says that as for checking counterfeit currency one will only have to wait and see. “If counterfeiting can be checked with introduction of polymer notes then there are only advantages with it’s introduction”, he said, adding that handling them will be hygienic too.
	Food inflation rises to 11.4 pc New Delhi, August 12 After showing signs of moderation, food inflation returned to pinch household budgets at 11.40 per cent in the last week of July as prices of cereals, fruits and milk rose. With the exception of two weeks in July when it was in single digit, food inflation has been in double digits ever since the government started bringing out separate data for the segment from late last year. Inflation in food items was 9.53 per cent in the previous week. Analysts and experts, however, believe that the return to double digits was expected and that the rate is likely to go down in the next few months as a good monsoon brings bountiful kharif harvest. "Food inflation is not a surprise at all... Last year in this week it fell sharply and then increased again so increase in the food price inflation is pure (low) base effect," Planning Commission Deputy Chairman Montek Singh Ahluwalia said. A low base effect is when low numbers of last year make even a small rise now seem large. Ahluwalia said the food prices are likely to move on a downward spiral in a month. "A number of measures have been taken (to manage inflation). In a month or so, we would definitely see that (food) inflation rate would come down," Ahluwalia said. — PTI
	Nippon Paint to set up unit in Haryana Ruchika M. Khanna Tribune News Service Chandigarh, August 12 Japanese paint major Nippon Paint, which forayed into the Indian market in 2006, is looking at infusing Rs 250 crore for its operations here by 2013. The amount will be spent on setting up a new manufacturing facility for decorative plants in Haryana, besides expanding its existing facility in Chennai and product portfolio. Talking to TNS, Ramakanth Akula, president decorative, Nippon Paint, said in order to improve its supply chain and facilitate its foray into North India, the company is looking at setting up a new facility in the North. “We are in talks with the Haryana government and could set up this new facility either in Bawal or Rohtak. We are hoping to invest upwards of Rs 70 crore for this project,” he said, adding that the company has already invested Rs 250 crore in India. Akula was in town to announce the launch of Nippon Paints in Punjab market. “We are also scaling up the production capacity at our Chennai plant. This plant was commissioned last year and has a capacity to produce 20,000 kilo litres (KL) of emulsions paint per annum, which we are increasing to 40,000 KL per annum. Though we are currently present only in the emulsions category, we are now looking at expanding our product portfolio and getting into wood coatings,” he said. He added that since wood coatings is one of the fastest growing categories, Nippon Paint was looking at a major growth in sales from this product range. “The wood coatings will be manufactured at our facility in Chennai. The production will begin in October, with 50,000 litres being manufactured daily. This will later be scaled up, as the demand rises,” he said. Akula said though the company has entered only select markets in the country, they are looking at a pan India rollout soon. “After our Punjab foray, we are also looking at entering the key markets of Delhi and Mumbai by the end of this year. We presently have a dealer network of 500, which will be scaled up to 700, by the end of the year,” he said.
	Ex-servicemen retain toll plazas Girja Shankar Kaura Tribune News Service New Delhi, August 12 Ex-servicemen have managed to retain some toll plazas on national highways despite the National Highway Authority of India (NHAI) having come out with new regulations, wherein toll collection points are to be auctioned after taking over the management from the former servicemen. The NHAI had in June last came out with a new policy whereby the toll plazas across the country would be put on block with 50 going in the first round of auction. The Tribune had earlier reported that over 35,000 ex-servicemen would lose their livelihood as a result of the new policy. The NHAI earlier had an understanding with the directorate general of Resettlement of the Army whereby the management of the toll plazas was given to the ex-servicemen recommended by the directorate. At least 25,000 ex-servicemen are running NHAI-owned toll plazas while another 10,000 provide logistical support. As per the latest information given out by the Ministry of Road Transport and Highways, the NHAI has handed back the management of five toll plazas to ex-servicemen, but apparently after they bid for the these toll collection points. This has been done on the Operation, Maintenance and Transfer (OMT) contract and the ministry has admitted that “this has been done as per the as per existing guidelines where by the NHAI has to engage fee collecting agencies through competitive bidding system”. The NHAI had decided to take over the toll plazas from the ex-servicemen and auction them to the private parties through an open bidding in a bid to earn more money from them. The decision of the NHAI to auction the toll plazas to private players came despite the fact that ever since their management has been taken over by the ex-servicemen, there has been a substantial increase in toll collection. The ministry felt that allotting such jobs to ex-servicemen led to revenue losses and inefficient management. However, reports said the collections at the ex-servicemen run toll plazas had gone up from previously 15 per cent to 80 per cent. Informing Parliament recently, the ministry said the main reasons to have composite contract for maintenance of road and collection of user fee was to have better coordination between the various arms working under the same organisation.