Chandigarh, November 22
After three years and a lot of hue and cry, the government has admitted that three public sector units (PSUs) - State Trading Corporation (STC), Minerals and Metals Trading Corporation (MMTC) and PEC - who were entrusted with export of non-basmati rice on government-to -government accounts, did not follow a transparent procedure for non-basmati rice exports in 2007-08.

In a statement to the Lok Sabha on November 19, Commerce and Industry Minister, Anand Sharma, said that the matter has been referred to the Central Vigilance Commission (CVC) for its advice. “With the exception of Mauritius, the exporting PSUs of the department of commerce did not follow transparent procedure for selection of domestic associates or determination of the price at which the rice was exported,” Sharma’s written statement said.

All these exports had taken place between December 2007 and March 2009. The Indian government had banned rice exports from October 2007, to stave off shortages at home. Subsequently, the curbs were partially eased as output and government stocks grew, and exports of non-basmati rice were allowed only on government-to-government accounts, to be routed through PSUs like STC, MMTC and PEC.

The Tribune had earlier highlighted the procedural lapses and irregularities in export of rice to under-developed countries from India. Though these government-to-government exports were touted as diplomatic goodwill gestures, these deals were commercial transactions, ensuring that middle-men and firms became direct beneficiaries.

In 2007, there was a conditional lifting of this ban by allowing export of 10 lakh tonnes of non-basmati rice to 21 African countries. This clearly specified that the exports were to be carried out through designated public sector undertakings like State Trading Corporation STC, MMTC and PEC.

However, documents available with The Tribune, show that that all these exports were being referred to a third party - a private trading company.

In one invoice available with The Tribune, though the exporter is PEC LTD, and the invoice refers to a third party, a Delhi-based private trading firm. On the other hand, while the consignee is the Ministry of Foreign Affairs and International Cooperation, Government of Sierra Leone, the actual buyer was a commodity trader based in Switzerland.

In another invoice available with The Tribune, the Ministry of Foreign Affairs and International Cooperation, Government of Sierra Leone, has sought the permission from Government of India to purchase 30,000 metric tonnes of Indian white rice for immediate shipment. This invoice further ‘requests the government that the concession to export be given to a Delhi-based trader whom we have nominated as they have the past experience to do so’.

Show-cause notices have also been slapped on the officials allegedly responsible for hugely disproportionate profits to private parties and denial of legitimate profits to PSUs, the statement by the commerce minister said. The possibility of collusion cannot be ruled out, the statement added.

New Delhi, November 22
Ratings agency, CRISIL today said it has placed 12 microfinance institutions (MFIs) on rating watch. The move has negative implications as the implementation of the Andhra Pradesh ordinance has triggered a chain of events that can permanently damage the business models of MFIs.

These include SKS Microfinance, Spandana Sphoorthy, Vedika Credit, Grameen Financial, Equitas among others. SKS Micro stock price has fallen sharply after the ordinance but recovered a few days later. Crisil said the ordinance will impair MFI growth, asset quality, profitability, and capital-raising ability. The Rs 25,000-crore microfinance industry plays an important role in extending formal financial services to 28 million of India’s under-served rural poor; with the decline of the sector, the flow of credit to this segment of the population will be curtailed.

The ratings agency said that the Andhra ordinance has been highly unfavourable for the industry resulting in a precipitous drop in the collection efficiency and profitability of MFIs, especially those operating in Andhra. Further, the flow of funding to the entire sector from the banking system has been severely constrained.

Consequently, the liquidity position and growth prospects of many MFIs, including those operating outside Andhra Pradesh have been affected. Structurally, the regulatory jurisdiction and framework for MFIs remains unclear, with actions by multiple authorities increasing the challenges for the industry. Another risk is that other states may initiate state-level legislation similar to the Andhra ordinance.

Collections in Andhra have plummeted below 20 per cent, from nearly 99 per cent prior to the ordinance, with MFIs finding it difficult to make contact with borrower groups, and having to move to a monthly repayment cycle in line with the ordinance.

Fresh disbursements in Andhra have been negligible over the past few weeks. CRISIL believes that this would lead to a sharp increase in delinquencies for MFIs that have significant Andhra exposure.

So far, MFIs with limited or no Andhra presence have maintained good collection levels, though their disbursement growth has reduced sharply. MFIs’ ability to raise external funding is currently significantly constrained. Access to fresh loans from banks and financial institutions, which form a significant proportion of the sector’s total funding, has dropped materially.

New Delhi, November 22
Concerned over abrupt escalation in air fares by some airlines during high demand, officials of the Civil Aviation Ministry and the Directorate General of Civil Aviation (DGCA) will meet in New Delhi soon to review the issue.

“The DGCA has been serious about it. We also expressed our concern and intervened... regarding sudden fare escalation (by some scheduled Indian carriers),” Civil Aviation Minister Praful Patel said on Monday.

He said officials of the Ministry and the DGCA would meet soon to review the issue.

The fares of some airlines went up by as much as 25 per cent post-Diwali.

Mr. Patel’s statement came days after the DGCA directed the scheduled domestic airlines to furnish route-wise tariff on their entire network in the beginning of each month, in a bid to prevent them from hiking prices abruptly whenever there was heightened demand.

In a circular, the DGCA asked the airlines to “furnish a copy of the route-wise tariff across its network in various fare categories, in the manner it is offered in the market, to DGCA on the first day of every calendar month”.

The circular said that any “significant and noticeable change” in the established tariff already filed, should be reported to the DGCA “within 24 hours of effecting such changes”.

The regulator also asked the airlines to publish air fares on their websites or in daily newspapers on a regular basis.

With suspicions towards cartelisation among airlines emerging after some of them withdrew their low-end air fares last year, the DGCA had then directed all scheduled domestic carriers to give details and justification for their decision to ‘simultaneously’ raise prices.

In February 2009 also, the regulator had shot off letters to all domestic carriers asking for information regarding the hike in airfares and to ensure transparency through advertising.

“Insufficient and inadequate information available in the public domain on airfares” and reports of scheduled airlines charging excessive high tariff for flights across their network during the high demand period was “causing lot of inconvenience to the travelling public and drawing adverse comments on airfares”, the latest DGCA circular said.

It also asked the airlines to maintain all records pertaining to established tariff in its office for inspections. — PTI

New Delhi, November 22
The Society of Manufacturers of Electric Vehicles today said it expects electric two-wheeler market to witness 100 per cent growth following a Rs 95-crore incentive package for the remaining part of the 11th 5-year Plan.

According to a scheme approved by the Ministry of New and Renewable Energy (MNRE), the government will provide financial incentive for each electric vehicle sold in India during the remaining part of the 11th Plan - 2010-11 and 2011-12.

The scheme, effective from November 11, envisages incentives of up to 20 per cent on ex-factory prices of the vehicles, subject to a maximum limit.

The cap on the incentive will be Rs 4,000 for low-speed electric two-wheelers, Rs 5,000 for high-speed electric two- wheelers, Rs 60,000 for seven seater three-wheeler and Rs one lakh for an electric car.

"This could have an immediate impact on sales of electric two-wheelers. In terms of monthly sales, we expect an immediate doubling of sales," Society of Manufacturers of Electric Vehicles Director Sohinder Gill said.

Moreover, those electric vehicle makers who were getting frustrated, will now feel encouraged to grow the market further, he added.

"We have convened a meeting of our members in this week to see how quickly we can pass on the benefits to consumers.

Although these incentives are for the manufacturers to carry out R&D activities and to increase capacities, we will surely pass on partial benefits to the buyers," Gill said.

On an average electric two-wheelers are priced between Rs 25,000 and Rs 40,000 depending on the speed range.

As per the notification by the MNRE, the government will take up "dissemination of two wheelers, three wheelers and four wheelers Battery Operates Vehicles (BOV) and R&D and technology demonstration and other activities in the area of Alternative Fuels for Surface Transportation at a total cost of Rs 95 crore during the remaining period of the 11th Plan".

For this fiscal, the government will support 20,000 units and 10,000 units of low and high speed two-wheelers respectively, while it will be 80,000 units and 20,000 units in 2011-12. — PTI

London, November 22
Indian oil explorer Jubilant Energy today said it will raise $85 million through institutional placement and plans to get listed on the London Stock Exchange (LSE) on November 24.

The company would place 69,379,430 new shares with institutional investors at 77 pence per share to raise gross proceeds of $85 million, Jubilant Energy said in a regulatory filing to the LSE.

Jubilant Energy, engaged in upstream E&P (exploration and production), is also mulling the admission of its entire issued share capital to trade on the AIM market of the LSE, which is expected to take place on November 24, the filing added.

The proceeds of the listing, would be used to progress Jubilant’s exploration and development of oil and gas assets, to accelerate Jubilant’s ongoing and future exploration programme and for general corporate purposes.

“The money we are raising will enable us to carry out our work programme targeting near term value enhancing opportunities in the region as well as some of the high impact exploration potential across our acreage,” Jubilant CEO Ajay Khandelwal said.

Jubilant is currently part of a diversified Indian business group (Wider Jubilant Group) founded by Shyam Bhartia and Hari Bhartia with a presence in approximately 50 countries and revenues of around $1 billion for fiscal year 2010.

Jubilant has built up a balanced portfolio of oil and gas assets through participation in licensing rounds since 1995, with presence in the proven and prolific hydrocarbon basins of Krishna Godavari, Cambay, Cauvery and Assam-Arakan, India.— Reuters

BRIEFLY

Ind-Swift PAT up 74%
Chandigarh: Ind-Swift Laboratories, one of India’s leading pharma company, reported growth of 74% in net profit for the quarter ended September 30. Total sales up 8.33% at Rs 212.83 crore from Rs 196.46 crore. — TNS

CIL in BSE-500 index
Mumbai: The Bombay Stock Exchange today said that it will include the scrip of Coal India Ltd in its BSE-500 index, effective November 25. The BSE will also add the scrip of Syndicate Bank Ltd in its BSE-200 index. — PTI

TCIL stake sale
New Delhi: The government has decided to sell 30 per cent stake held through Telecommunications Consultants of India (TCIL) in Bharti Hexacom. — PTI

Zensar buys US firm
Mumbai: Software services provider and RPG Group company Zensar Technologies today said that it has entered into a definitive agreement to acquire US-based IT solution firm — Akibia — for $66 million. — TNS