The Tribune, Chandigarh, India

	Pre-Budget Exercise Stimulus must continue: India Inc FM wants more private participation in infrastructure development Sanjeev Sharma Tribune News Service New Delhi, January 11 In what may be an indication of government priorities for the forthcoming Budget in February, Finance Minister Pranab Mukherjee flagged off two major concerns of the government in a pre-budget meeting with the industry. One of these relates to the pace of development of infrastructure and the second to investments in Research and Development (R&D). The industry, on its part, asked the FM to continue with the stimulus package, cut taxes and maintain peak rate of import duties and sought abolition of surcharge and cess. Mukherjee said that investment in infrastructure sector is the key to sustainable and inclusive growth. He said India’s spending on R&D as a ratio of GDP is very low in comparison to other emerging economies. He said the government would not be able to achieve its objectives without the complementary efforts of the private sector, be it in the form of Public Private Partnership (PPP) or purely private initiatives. He asked for the suggestions from industry to enhance and strengthen private sector participation in infrastructure and R&D initiatives. Mukherjee asked for specific short-and-medium term suggestions for sustaining double digit growth in industry and for stepping up the growth of manufactured exports. He asked for industry’s specific observation about the corporate tax collections in the current financial year, which are not keeping up with the anticipated trend. Industry body CII suggested that rising inputs costs, tight liquidity conditions and rising interest rates pose a downside risk to growth. The emphasis for Budget 2011-12, should therefore be to maintain and even accelerate the pace of economic recovery and speed up employment generation. CII President Hari Bhartia asked the government to continue with the existing peak rate of customs duty (10%). Status quo was also recommended for the general rate of 10% excise duty and 10% services tax, since these are on a par with the proposed Central GST rate of 10%. Given that GST implementation is getting delayed, CII sought to reduce CST from 2% to nil , since no credit is available on this tax. CII also sought a cut in direct tax rates with a reduction in the corporate tax rate from 30% to 25% together with abolition of surcharge and cess. On policy issues that can be addressed in the Budget, CII has said in order to encourage FDI, some of the remaining sectors where limits on foreign investment remained can be opened up in retail and defence. CII suggested some critical reforms required in the agriculture sector to address the issue of supply constraints in the medium to long term including the need to introduce common market for agricultural produce across states; rationalise the APMC Act and promote PPP investments in agriculture by providing viability gap funding in agri-focused infrastructure and agricultural extension. In addition, investment-linked tax incentives need to be made available to cold chains and warehouses across all categories of food products. Ficci President, Rajan Bharti Mittal urged the Finance Minister to tailor the direct and indirect tax measures in the ensuing Union Budget to support domestic demand and ensure that there is no roll back of the stimulus measures at a time when the global economy is still not out of the woods. Mittal emphasised the need for incentivising employment generation in the industry and suggested abolition of surcharge and education cess, moderation of the corporate tax rate, removal of the cascading impact of Dividend Distribution Tax, rationalise MAT as a specified percentage, retention of the peak customs duty rate of 10%, reduction in the CST rate from 2% to 1% with effect from April 1, 2011, incentives for the private sector’s contribution to agricultural growth, impetus to exports, IT and the software sectors, and tax breaks for large scale private investment in the social sector. Assocham President, Dilip Modi suggested the creation of a separate agriculture budget to ensure focus and execution and a phased move away from consumption to capital subsidies.
	Auto sales grew 31% in 2010 Tribune News Service New Delhi, January 11 Automobile industry’s sales grew by 31 per cent in 2010. With December sales growing 29 per cent over the same period in 2009, the Society of Indian Automobile Manufacturers (SIAM) said here today that 14.82 million units were sold in 2010 as against 11.32 million units in 2009. Asking the government to maintain the current exercise duty structure on small cars to boost demand in the current year, SIAM said that the growth was due to increasing dispensable incomes, low interest rates and increase in sales base at par with the pre-recession era. "Sales of passenger vehicles segment grew by 31.34 perc ent, commercial vehicles segment by 45.24 percent, three-wheelers by 22.03 percent and two-wheelers by 30.51 per cent," said SIAM . According to figures domestic passenger car sales jumped by 28.91 per cent to 1,48,681 units in December 2010, compared to 1,15,337 units in the same month in 2009. The motorcycle sales in the country during December 2010 grew by 27.13 per cent to 7,53,358 units from 5,92,589 units in the same month previous year. Passenger vehicle sales grew by 31.34 percent and stood at 2.38 million, including 1.87 million passenger cars, 312,953 multi-utility vehicles (MUVs) and 202,834 multi-purpose vehicles (MPVs). Other segments like two-wheelers and three-wheelers also showed impressive sales growth of 22.03 per cent and 30.51 per cent, respectively. SIAM president Pawan Goenka asked the government not to increase the current duty structure of 10 per cent on small and compact cars, as the cost increase will ultimately be passed on to consumer, thus effecting sales in 2011. According to him, the auto-industry contributed 86 per cent more excise duty than last year, while overall, the sector contributed 26 per cent of the total duty earned by the government. During the downturn of 2008-09, the government provided stimulus package to the industry where excise duty on small and compact cars was reduced to eight per cent from 12 per cent. Later the duty was increased to 10 per cent in 2010-11 budget. Automobile sales numbers for the current fiscal year in the period of April-December also reported good growth of 28.68 per cent - 11.35 million units as against 8.82 million units in the corresponding period of 2009. While April-December sales for passenger vehicle segment grew by 31.38 per cent and stood at 1.80 million as compared to 1.36 million units in the same period of 2009, utility vehicle grew by 20.82 per cent (233,350 units) and multi-purpose vehicles by 50.58 per cent (156,525 units), SIAM said.
	MNP to rescue in event of telcos’ licence cancellation Tribune News Service New Delhi , January 11 The Supreme court issued notices to 11 telecom companies on Monday - seeking to know why licences issued to them in 2008 should not be cancelled for delay in roll out obligations. If the licences are indeed cancelled, Mobile Number Portability (MNP) will come to the rescue of the affected customers, say ministry officials. The court issued notices to the government and the 11 companies on a PIL (Public Interest Litigation) filed by an NGO - the Centre for Public Interest Litigation (CPIL) seeking cancellation of 2G licences given by former Telecom Minister A Raja. Telecom firms are required to cover 10 per cent of their service area within a year of receiving airwaves. The Department of Telecom (DoT) has fixed January 20 as the deadline for MNP launch. DoT is confident that all operators will launch the service on time. According to licence conditions , operators are required to roll out their services in 90 per cent of the service area in metros and 10 per cent in district headquarters within 52 weeks from the date of award of licences.
	Punj Lloyd bags Bihar govt contract New Delhi, January 11 Infrastructure major Punj Lloyd today said it has won a contact from Bihar government for a water treatment plant to supply 6.224 million litres of drinking water per day to fluoride affected areas at Kharagpur. "Punj Lloyd Delta Renewables, a Group Company ...today announced winning an EPC contract for a centralised water treatment plant... awarded on a turnkey basis by the Public Health Engineering Department of the Bihar government," the company said in a statement. “...will strengthen our footprint in Bihar, where we secured India's largest solar based EPC contract to construct 850 water treatment plants across the state,”. CEO, Tariq Alam said.
	Sugar production to increase by 10 lakh quintals in Punjab Kulwinder Sandhu/TNS Moga, January 11 Sugar production in Punjab is likely to increase by about 10-lakh quintals to 28 lakh quintals during the current year with a prolonged crushing season for sugar mills. Total area under sugarcane cultivation increased to 84,000 hectares from 60,000 hectares this year. According to a senior official of the agriculture department, sugarcane production this year has been estimated at 325 lakh quintals from 211 lakh quintals in the last year. The sugar recovery from sugarcane juice is also expected to rise to 9 per cent from 8.59 per cent in the last year. Experts say increase in area of sugarcane cultivation is a good sign for agriculture diversification. The wheat and paddy cycle has badly affected underground water and soil fertility. Installed crushing capacity of the 9 co-operative sugar mills in the state is 15,766 tonnes a day, while that of the 7 mills under private sector is 31,000 tonnes a day. The state government has fixed the state assured price of advanced, medium and late variety of sugarcane at Rs 200, Rs 195 and Rs 190 per quintal for the current crushing season with an average increase of Rs 20 per quintal in all the three categories.
	Profitability lures more growers to cotton crop Chander Parkash/TNS Abohar, January 11 In 2010, cotton was like ‘White Gold’ for Punjab’s farmers. Prices jumped from Rs 2,900 a quintal in January 2010 to touch Rs 5,100 a quintal by the year end. This unprecedented rise in prices of raw cotton not only helped farmers earn some profit, but has also led to hope that paddy growers might shift to paddy cultivation. Incidentally, this crop shift is needed in Punjab as the underground water table is depleting rapidly. Before the introduction of BT cotton in Punjab, cotton crop failed repeatedly. This contributed to widespread environmental degradation and poverty. A section of growers found themselves in perpetual debt trap. Some growers even committed suicide. “High prices of raw cotton will attract paddy growers to cotton cultivation,” said Kattar Singh Jeeda, President, North India Cotton Growers Association, Punjab. State agriculture department officials have intensified efforts to persuade paddy growers to shift to cotton. The department also plans to reintroduce the crop in Amritsar, Jalandhar, Ludhiana and Tarn Taran districts. Area under the crop has been confined to just 9 districts over many years, said Ashok Kapur, former president, Northern India Cotton Association. Bhagwan Bansal, President, Punjab Cotton factories and Ginners Association, said if Punjab government rationalised the tax structure, cotton trade would be boosted, further attracting growers.
	Tata Steel plans FPO, may use funds to retire debt New Delhi, January 11 Tata Steel today said it plans to come out with a follow-on public offer for 5.7 crore shares, which might be used to retire a substantial portion of the company's $10.7 billion debt liability. However, the company did not announce the dates for the proposed share sale issue.“... The committee of directors of the company, at its meeting held on January 11, 2011, approved a further public issue of 57 million ordinary shares of Rs 10 each of the company for such price as may be determined through the book-building process,” Tata Steel said in a filing to the Bombay Stock Exchange. At the closing price of Rs 647.60 for Tata Steel shares on the BSE today, the FPO is expected to fetch Rs 3,691.32 crore. At present, the company's market capitalisation stands at Rs 58,427.39 crore. When asked for further details on the proposed share sale plan of the company, a Tata Steel spokesperson refused to offer comment beyond the information given in the regulatory filing. The price band for the share sale and the minimum bid lot for the issue will be decided by the company in consultation with the book running lead managers (BRLMs), the filing added. “FPO price is the key, as the market is not performing well and Tata Steel's stock has also going down for some time now. My guess would be that the company would be offering a 5-10 per cent discount,” Consortium Securities AVP Vishwesh Choudhary said. — PTI