The Tribune, Chandigarh, India

	Food inflation soars to 18.32 pc FM asks states to remove supply side bottlenecks Sanjeev Sharma Tribune News Service New Delhi, January 6 As food inflation threatened to touch a one-year high and with no immediate solution in sight to resolve the hot potato issue, Finance Minister Pranab Mukherjee today sought to pass on some of the onus of inflation management to the states and asked them to look into the widening gap between wholesale and retail prices. A Finance Ministry statement said Mukherjee had asked state governments to urgently look into the supply management of items that are driving the current round of food inflation in the economy, in particular looking at the local factors that are widening the gap between the wholesale and retail prices. The Finance Minister said that the state governments need to ensure that all bottlenecks in the supply chain are removed so that food prices can be brought down quickly. The Finance Minister was reacting to the recent figures of food inflation which has shown a rising trend in the last few weeks and was at 18.32 per cent for the week ending December 25, 2010. He said that food inflation for the week ending on December 25, 2010, has more than doubled from its level of 8.6 per cent on November 20, 2010. Mukherjee said that much of this inflation has been due to significant increase in the prices of a few primary items like fruits and vegetables, milk, meat, poultry, eggs and fish. He said that in fact, in the week for which the data has been released today, three-fourths of food inflation is explained by inflation in vegetables, and nearly one-fourth is explained by inflation in milk. While there are some weather-induced supply constraints on some of these items, which go against the seasonal decline normally seen at this time of the year, a large part of price rise is due to widening gap between the wholesale and retail prices and the growing demand for these products due to rising income levels, the Finance Minister said. Reacting to the food inflation figures, industry body CII said it is unfortunate that the moderating trend in primary article inflation has been reversed in December 2010. Hardening prices of fruits and vegetables are largely responsible with onion prices alone hardening by over 45 per cent in a single month. CII said agricultural reforms in the form of implementation of the APMC Act in a manner that farm gate prices are not distorted by the time it reaches retail level need urgent attention. Assocham said the fear is that food inflation will spill over to broader prices and put pressure on the RBI to tighten monetary policy. It said industry needs to be prepared now for a much larger frontloaded rate hike series than what was expecting as the curve could shift upwards in view of the food inflation seeping to core inflation. According to Assocham, the government’s claim of stabilising the inflation at about 5.5 per cent by the end of the current fiscal, seems to be eluding. Growth may be the victim if the speed of inflation continues. Assocham criticised the poor price surveillance mechanism of the government and said around 70 per cent of the realised price is cornered by the intermediatries and the government’s poor price surveillance in addition to inadequate supply chain infrastructure, has been exposed. This has been brought out in the recent enormous price rise for onions. The supply side constraints remain matter of concern. It will further fuel the prices of essential goods and services and also impact the profit margin of corporates.
	BlackBerry seeks more time to offer solution New Delhi, January 6 Blackberry has asked for 18-24 months to provide a complete solution for interception of its Enterprise Mail, but with a condition that its services would not be banned, a guarantee that the government declined to give. "Research in Motion (RIM), maker of BlackBerry, can provide the infrastructure in India for BlackBerry Enterprise Servers (BES) services in a time frame of 18-24 months provided it is confirmed that the services will not be banned in India during the period," the Canada-based company said at a meeting with the Department of Telecom (DoT). The company was earlier given time till January 31, 2011, to provide solution for Lawful Interception of contents sent or received on the device. The DoT has, however, refrained from giving any guarantee to RIM officials that their services would not be banned in case they fail to provide solution. The government said creating RIM infrastructure for BES services in India will not only enhance the possibility of accepting such service from security point of view but that may also be of the commercial interest of the company. Therefore, RIM should seriously consider to create infrastructure for BES in India and condense the implementation time to a much shorter time frame to create such an infrastructure, the DoT officials said. The company informed the government that interception and monitoring in readable format is possible at the BlackBerry Enterprise Server (BES) located at the enterprise, which is availing enterprise e-mail services through the phone platform. — PTI
	Guidelines for 3G services soon Tribune News Service New Delhi, January 6 Under pressure from the telecom operators who have been waiting to get a clearance from the security agencies to launch their full 3G services, the government has said it would soon come out with the guidelines to govern the services. The guidelines for the next generation 3G mobile services that includes video calls would address all security concerns raised by the Home Ministry. "3G issue is almost resolved, soon you will be able to see new guidelines," Telecom Minister Kapil Sibal said here late yesterday. The statement from the minister comes after his meeting with Home Minister P. Chidambaram over the issue and a day after the latter sought to downplay problems in beginning the 3G mobile services saying the telecom operators can roll out 3G telephony while working on the modalities to provide monitoring facilities to the security agencies. The statement from Sibal is of significance for the telecom operators in the country, whose restlessness has been growing over not being able to launch full fledged 3G services due to the concerns raised by the security agencies, which want a real time interception facility be made available to them by the operators for them to monitor the 3G video calls. The DoT had earlier issued notices to some of the telecom operators asking them to stop the rollout of the 3G services, which includes video calling facility. It also asked them to put on hold the new services till they adhered to security norms for legal interception. The DoT had sent a letter to TTSL and RCom asking them not to launch 3G services on commercial basis. A demonstration for the interception had also been organised by Reliance, Tata Teleservices and Bharti during which it came out that that online delivery of video call intercepts "in real time" could not be carried out by any of the telecom operators for any of the security agencies.
	Citi fraud: Police seeks details from NSE, BSE Tribune News Service New Delhi, January 6 The Gurgaon police has written to the two major stock exchanges, National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE), to seek details of transactions carried out by three brokerages Norman Martin, Religare and Bonanza through whom the Citibank fraud accused, Shivraj Puri, was operating in the stock market. The investigation officer of the Gurgaon Police in the Citibank fraud case informed the city court that the NSE and BSE have been asked for details of stock market transactions involving the main accused in the scam, Shivraj Puri. The firm, Norman Martin is owned by Puri’s father, Raghuraj Puri.
	India to grow by 8.8 pc: IMF Washington/New Delhi, January 6 The International Monetary Fund (IMF) expects Indian economy to grow by 8.8 per cent during the current financial year, up from 7.4 per cent a year ago, mainly driven by robust growth in farm sector and pick up in consumption. The multilateral lending agency, however, expressed concern over rising prices and underlined the need for controlling inflationary expectations by more monetary actions by the Reserve Bank. "Indian economy is projected to grow by 8.8 per cent in 2010-11...This year's growth is already benefiting from the rebound in agriculture and pick up in private consumption and employment prospects have improved and disposable income continues to rise," the IMF said in a report after Article IV consultations with the Indian officials. The economy expanded by 8.9 per cent during the first half of the current fiscal and, according to the government estimates, may revert to the pre-global crisis level of 9 per cent growth. However, the IMF has projected moderation in growth from the current high levels to 8.1 per cent next fiscal. Listing rising prices as a major area of concern, the IMF said the RBI could take more monetary steps to contain inflationary expectations. "We see room for further rate increase (by RBI) but at the same time it has to be done gradually and needs to be looked at continuously," senior Resident Representative of the IMF Sanjaya Panth told reporters in Delhi. The inflation, according to IMF, could moderate to 6.5 per cent by March end. Besides inflation, high capital inflows and uncertainty in the global economy are the other areas of concern that could impair growth. "Risks to growth are broadly balanced with downside risks relating mainly to the global economy. Surging capital inflows could further spur investment but could complicate macroeconomic management", the report said. In 2010, the overseas portfolio investment more than doubled to $39 billion from $18 billion a year ago. According to Panth, "the current inflows are in comfortable zone and there is no need for capital control. However, inflows could increase absorptive capacity in future." Following the global financial meltdown, the growth rate of the India economy slipped to 6.7 per cent in 2008-09 from over 9 per cent in the previous three years. Driven by stimulus packages provided by the government, the growth rate picked up to 7.4 per cent during 2009-10. — PTI
	High cotton yarn prices hit knitting industry K.S. Chawla Ludhiana, January 6 Although readymade garments industry, particularly knitting industry, is flooded with orders from domestic and foreign markets, the rise in the prices of cotton yarn and other man-made yarns is causing lot of difficulties to the industry. The cotton yarn prices, which came down to Rs 205 per kg from Rs 250 after the suspension of export of cotton yarn by the Union Government, has again risen to Rs 230 per kg. Similarly, there has been increase in prices of polyster and acrylic yarns by Rs 10 per kg. Acrylic yarn was being sold for Rs 262 per kg. Source close to the textile industry disclosed today that polyster fibre had witnessed a rise from Rs 60 to Rs 95 per kg in three months. Ajit Lakra, president, Ludhiana Knitters Association, told The Tribune that the small-scale units manufacturing knitting garments were in real trouble and their survival was becoming difficult due to the rise in the prices of yarns. Besides, the banks had also raised the rate of interest by half per cent on lendings. Lakra said there was no dearth for the demand for cotton and man-made fibre garments within the country and from overseas countries. They had huge orders for the goods but were finding it difficult to make the commitments in view of the rise in the prices of the yarns. Profitability had come down and the small-scale units in particular were hit hard. Lakra, who, himself is a leading exporter of readymade garments, said demand from the USA had been revived and European countries were also making sizeable purchases from the Indian manufacturers. There was a big demand from the Middle-East countries as well. The export of garments from Ludhiana last year was to the tune of Rs 1,100 crore, he added. He further disclosed that Tripur cotton complex in Tamil Nadu, which is the biggest complex in the country, was facing problem of getting dyed cotton and man-made fibre cloth as the pollution control board in Tamil Nadu had shut down a number of dyeing units for causing pollution in the complex and the state. They were not purchasing dyed cloth and yarns from Ludhiana. Lakra has urged the Union Government not to open the registration of cotton yarn for export purposes and allow the local industry to meet the demand. Meanwhile, the cotton prices in the markets of Punjab, Haryana and Rajasthan continue to rule high - Narma was being sold at the rate of Rs 4,800 to Rs 5,100 per quintal. The sources rule out any fall in the cotton prices in near future. The Ministry of Commerce and Industry has allowed the registration of cotton for export from January 1 as 25 lakh bales of cotton can be exported under the decision of the government to allow export of 55 lakh bales of cotton during the current year. As many as 30 lakh bales of cotton has already been exported. The export of cotton has resulted in the unprecedented hike in the prices of cotton in the markets in the country.
	Gold declines for fourth day New York, January 6 Gold today fell for a fourth day in a worst run in seven weeks, as a stronger dollar and data signalling a recovery in the US economy curbed demand for the metal as an alternative investment and protection of wealth. The gold fell $5.80, or 0.4 per cent, to $1,367.90 an ounce, after touching a low of $1,366.20. Silver followed suit and lost 0.2 per cent to $29.19 an ounce. In the previous two days, the gold tumbled 3.5 per cent, the biggest fall in 11 months. The dollar rose to a one-week high against the euro before a report tomorrow that may show US payrolls rose for a third month. Reports this week showed orders placed with factories and manufacturing improved in the US. — Bloomberg
	Metro Tyres to set up unit in Manesar Ruchika M. Khanna Tribune News Service Chandigarh, January 6 Metro Tyres is on an expansion spree. The Ludhiana-based tyre manufacturer will now be setting up an automobile tubes plant at Manesar, besides increasing the production capacity of its motorcycle tyre plant. The company is looking at investing Rs 50 crore in the green field project that will come up at Manesar. This plant will have a capacity to manufacture three lakh tyres per month and contruction of this facility will start by the end of this fiscal. Talking to TNS, Rummy Chhabra, MD, Metro Tyres, said the new facility would be commissioned by March 2012. “As we look at setting up this plant and expansion of our existing motorcycle tyre manufacturing plant, we are planning to raise money from private equity firms. We are also in a position to re-invest the cash flow into expanding our capacities,” he said. Chhabra said they were also planning to increase the production of the motorcycle tyres from 1,50,000 tyres per month to three lakh tyres per month. The company expects to double sales of motor cycle tyres to Rs 100 crore this year, riding on the back of robust growth witnessed by the country's two-wheeler industry. He added that they were looking at capitalising on the expected growth in replacement market - or remoulding worn tyres and selling them at cheap rates. At present, the company sells motorcycle tyres worth Rs 50 crore. The share of motor cycles tyres in the company's total sales stands at 10 per cent, while 90 per cent of its sales (three crore tyres per annum) comes from cycle rickshaw and bicycle tyre segment. To cater to the burgeoning demand for two-wheelers tyres, the company is in the process of ramping up its production capacity at its Ludhiana plant with an investment of Rs 35 crore. "This investment will be made for increasing production capacity of motor cycles tyres," he said.