Geneva, September 7
India has replaced the US as the second most important foreign direct investment (FDI) destination for transnational corporations during 2010-2012, according to a survey conducted by UNCTAD.

In its latest 'World Investment Prospects Survey 2010-2012', the United Nations Conference on Trade and Development said transnational corporations remain buoyant about investment prospects in China, India and Brazil.

According to the survey, India is the most important FDI destination next only to China. India replaced the US as the second most important destination for FDI by transnational companies last year following severe recession in the US. In the last survey, the US was the second most important destination and this time the country has slipped to fourth position.

Global FDI flows are expected to jump from $1.2 trillion this year to $1.3-$1.5 trillion in 2011 and $1.6-2.0 trillion in 2012.

"The results point to a recovery in global FDI flows in 2010 and further growth in 2011 and 2012," UNCTAD said.

Basing its results on the responses from 236 leading transnational corporations and 116 investment promotion agencies, it forecasts an upswing in the international foreign direct investment flows.

"The crisis was less destructive to FDI than had been feared" despite the worsening economic situation and growing recession in the industrialised countries, UNCTAD said.

Notwithstanding the squeeze in the investment budget during the worst economic crisis in the last 80 years, there has been perceptible shift in the TNC's geographical focus to developing and transition economies.

The emerging countries weathered the downturn better than their industrialised country counterparts. Further, the developing countries are leading the global recovery and are also contributing to the TNC strategies. — PTI

New Delhi, September 7
Largest mortgage lender HDFC today launched controversial teaser rates for home loans in its new avatar, a day after country's largest lender SBI hinted at the possibility of extending this product beyond September.

HDFC today launched a dual rate home loan (DRHL), which is part fixed and part floating. The new DRHL-4 offer will be applicable to all new home loan customers, who apply on or before September 30 and take at least part disbursement before October 31.

"Under this offer, home loans will be available at a fixed rate of 8.5 per cent up to March 31, 2011, 9.5 per cent for period between April 1, 2011 and March 31, 2012 and the applicable floating rate for the balance term," it said.

The new offer comes after the discontinuation of its old scheme, DRHL-3, under which home loans were provided at 8.25 per cent for the first year, 9 per cent for the second year and at a floating rate afterwards.

Yesterday, SBI had said it might continue its 8 per cent concessional home loan, popularly known as teaser rates, beyond September 30.

SBI had earlier extended its 8 per cent special home loan scheme, for a month with some changes. Under the existing scheme, the loan attracts an interest rate of 8 per cent in the first year, and 9 per cent in the second and third years.

From the fourth year onwards, home loans up to Rs 50 lakh are charged 9.25 percent interest rate, while higher loans carry 9.75 percent interest rate. Meanwhile, the country's largest private lender ICICI Bank had discontinued its teaser home loan rates a few months back. — PTI

New Delhi, September 7
Country’s largest carmaker Maruti Suzuki India Ltd’s (MSIL) parent company Suzuki Motor Corp today said its Indian subsidiary will invest 35 billion yen (Rs 1,925 crore) to set up a third plant at Manesar in Haryana.

Addressing the shareholders of Maruti Suzuki India (MSI) at the AGM, the Suzuki Motor Corp chairman, Osamu Suzuki, said, “We had not estimated the pace at which car demand would grow (in India)," adding that the new plant will have an annual production capacity of 2.5 lakh units.

“With this plant, the total output from MSI will be 1.75 million units,” Suzuki said. Currently, the company has a total annual output of 1.2 million units.

He did not specify a timeline for the third unit to be operational.

The new factory will be the third unit at Maruti's complex in Manesar and will lift the company's total production to 1.75 million units a year.

At present, MSIL which is 54.2 per cent owned by Suzuki, is building a second plant at Manesar at an investment of Rs 1,700 crore, which will also have an annual capacity of 2.5 lakh units.

“The second plant (at Manesar) will be ready by January 2012,” he added.

The first unit at Manesar has a production capacity of three lakh units.

Car sales in India hit a record high in July on the back of soaring demand in rural areas, jumping 38 per cent to 158,764, compared with 115,084 in the same month last year.

The Gurgaon plant has a total capacity of 7 lakh units annually.

Chandigarh, September 7
The hike in prices of MS rounds and wire rods by the major steel producing companies has hit the small and medium enterprises (SMEs) in the region, especially those that use steel as a raw material.

Last week, major steel producers in the country rolled back the concession of Rs 800-Rs 1,000 per tonne being given to the secondary steel producers, thus leading to the price of MS Rounds shooting up to Rs 32,800 per metric tonne. The price of steel ingot has shot up to Rs 28,800 per metric tonne and that of HR Flats has shot up to Rs 32,700 per metric tonne.

This hike in prices has not just led to the squeezing of profit margins but has forced the SMEs to rework their contracts with the suppliers. Moreover, this has led to hedging of steel by the traders, especially in Mandi Gobindgarh and Ludhiana. “With the steel prices becoming volatile and expectation of a price hike, hedging of steel products has already started,” rued a steel furnace owner in Mandi Gobindgarh, while requesting anonymity.

“The micro and small steel based units are likely to suffer huge losses as they have booked advance orders for three to six months, based on the steel price at the time of taking the order. With the arbitrary price hike by the major steel producers, we lose out on our profit margins. The major steel producers already have huge stock piles and these stocks have not been moving because of the sharp hike in prices. This hike would not serve any purpose,” said A.L. Aggarwal, president of the Chandigarh Industrial Fasteners Association.

On the other hand, the steel producers say that the rising prices is a result of global increase in steel prices and the huge gap in demand and supply. They say that while the annual demand for steel is increasing by 13 per cent, the growth in production is just seven per cent.

“Also, the prices of raw material - coal and iron ore have gone up drastically. In the past decade, the price of iron ore has gone up from $300 to $3,000 per metric tonne, while those of coal has gone up from $50 per metric tonne to $250 per metric tonne. This has directly affected the price of steel,” said J . Mehra, director, Essar Steels, the largest steel producer in the country.

New Delhi, September 7
MetLife India Insurance Company today launched a new equity-linked insurance product, Met Smart Platinum, which complies with new IRDA guidelines.

Met Smart Platinum is a market linked product and is targetted at individuals to meet the changing financial needs at various stages in their life. The plan covers and individual till 99 years of age, the company said. The product offers the customers the option to choose the distribute allocation of desired percentages of their investment between a high risk fund (Flexi Cap) and a low risk fund (Protector II) depending upon their risk appetite, the statement added. — PTI

New Delhi, September 7
An expert group has called for carving out two separate accounts -- PF and annuity -- in the employee provident fund scheme to meet the challenge of fund depletion in the pension scheme and introducing greater transparency for subscribers.

Under the existing scheme, the pension is paid out of the pension fund, which is managed by Employees' Provident Fund Organisation (EPFO).

The Employee Pension Scheme (EPS) 1995, covering 4.45 crore formal sector workers, has become the government's area of concern due to surging deficit that had reached Rs 22,000 crore by March 31, 2006, as per the latest data available.

The committee, headed by former additional Labour Secretary S K Srivastava, has proposed a provident fund-cum-annuity scheme in which two accounts would be maintained for each member — a PF account and an Annuity Contribution (or pension) Account (ACA).

Among other things, the committee feels that the move will help reduce mounting deficits in the EPS as EPFO will pay off the annuity amount by purchasing a scheme for the subscriber and save various costs in the process.

Annuity refers to a scheme sold by insurers designed to provide payments to the holder at specified intervals, usually after retirement.

The old age regular benefit to the members, under the new arrangement, would be provided in the form of annuity purchased through the accumulation in ACA.

The expert group report is likely to be discussed on September 15 at the meeting of Central Board of Trustees (CBT), the apex decision making body of EPFO.

Currently, a subscriber of Employees' Provident Fund (EPF) gets only one account, but he is eligible for both provident fund and pension.

At present, 8.33 per cent of workers' salary is contributed towards EPS to which government contributes 1.16 per cent of an employees' pay, which adds up to 9.49 per cent of the salary.

In the proposed scheme, a higher percentage of 13.5 of employee's salary would go to pension account, which would include a government subsidy of 2 per cent. — PTI

Washington, September 7
US President Barack Obama kicked off his embattled Democratic party's election campaign by announcing a $50 billion plan to create jobs and boost economic growth by modernising roads, railways and airport runways.

"Today, I am announcing a new plan for rebuilding and modernising America's roads, and rails and runways for the long term," he said in a Labour Day speech on Monday in Milwaukee, Wisconsin, two months ahead of November elections in which poll watchers suggest Democrats could lose their control of the Congress.

"We used to have the best infrastructure in the world. We can have it again," he said to loud cheers from a crowd of union workers.

The proposal envisions, over a six-year period, rebuilding 150,000 miles of roads, 4,000 miles of rail and 150 miles of airport runways. It also would include modernising America's air traffic control system in an effort to reduce delays and travel time.

"This will not only create jobs immediately. It's also going to make our economy hum over the long haul," said Obama.

"Now, the plain truth is, there's no silver bullet or quick fix to the problem," he cautioned. But "I'm going to keep fighting, every single day, to turn this economy around; to put our people back to work; to renew the American dream for your families and for future generations."

Obama is expected to announce Wednesday in hard-hit Cleveland, Ohio, another $100 billion plan to permanently extend the tax credit for research and development.— IANS