The Tribune, Chandigarh, India

Monetary Policy Review — Jan 25
Industry to be hit by rate hike: Sharma
Commerce Minister writes to FM; says monetary policy not the best tool to control prices
Sanjeev Sharma
Tribune News Service

New Delhi, January 18
Just a week before the RBI monetary policy review, where it is expected to further hike interest rates, Commerce and Industry Minister Anand Sharma today voiced his opposition to raising interest rates to control inflation.

In a letter written to the Finance Minister Pranab Mukherjee, Sharma said, “The high inflation in primary articles, particularly, vegetables is more on account of supply side constraints and monetary policy may not be the most suitable intervention to deal with the situation.”

However, the Finance Ministry has all along maintained that the central bank is an autonomous body and monetary policy is a matter that is decided by the RBI independently although consultations do take place with the Finance Ministry.

Batting for the industry which also been asking the government and RBI not to raise rates further which will hurt growth, Sharma said that a selective restriction on credit may be necessary to check inflationary pressures, but the imperative of easy credit flow for industrial sector, especially infrastructure and manufacturing is crucial for the economy.

Sharma pointed to the slow growth in industrial production reflected in the llP figures of November 2010, which has grown at 2.7 per cent, the lowest in the last 18 months. An analysis of llP data shows a sharp decline in production of consumer durables, industrial machinery, cement and petroleum refinery products.

Making a case for supporting industry, Sharma said, “While the Government is taking remedial measures to rein in inflation, industrial sector clearly needs sustained support to enable complete recovery from recession.”

His letter pointed out that the addition to capacities has not been at an appropriate level to ensure to sustained targeted growth in GDP. Manufacturing sector has actually witnessed a decline in investment in 2008-09 and capacity addition has been much below the 11th Plan targets in power, roads and other infrastructure sectors.

An analysis of data indicates that inflation in manufactured items is moderate,

Averaging 4 .7% in the last 4 months, despite an increase in global commodity prices.

“I understand that next week, RBI is proposing to undertake the credit policy review. I am sure that you will be alive to the need of sustained industrial growth while reviewing the policy rates”, the Industry Minister said in the letter to the Finance Minister.

Inflation has become a major challenge for the UPA government and there has been a debate on how to balance growth and inflation. India's headline inflation rose an annual 8.43 pc in December.

TRAI to bring out paper on 4G services
Tribune News Service

4G Explained

The fourth generation (4G) of mobile networks will turn the current mobile phone networks into internet-based networks.

The technology is set to deliver 100 Mbps to a roaming mobile device globally, and up to 1 Gbps to PCs, TVs and desktops.

It allows for video conferencing, streaming picture perfect video and much more.

It will truly harmonise global roaming, super high-speed connectivity, and transparent end-user performance on every mobile in the world.

New Delhi , January 18
Even as telecom operators in the country are yet to fully start the 3G mobile services, the Telecom Regulatory Authority of India (TRAI) today said it would come out with a consultation paper on fourth generation mobile (4G) services by the middle of this year.

“I expect 4G to come in India next year. TRAI will bring out a consultation paper on 4G in the middle of this year,” TRAI Chairman, JS Sarma, told reporters on the sidelines of a function organised by Assocham-Deloitte to release a study on Mobile Value Added Services.

The Department of Telecommunications (DoT) has 4G spectrum available, and would be in a position to offer the spectrum to the operators. The 4G services could be launched in the country by 2012.

TRAI would look into various aspects, including spectrum band to be allotted for 4G service and the quantum and modes of allotment to the operators. The paper would throw up various questions for the industry and other stakeholders to deliberate.

Sarma announced that TRAI and MVAS consultation paper will be put up for comments or suggestions within 15 days.

Central Bank of India to raise Rs 2.5k cr in 3 months
Ruchika M Khanna/TNS

Chandigarh, January 18
The Central Bank of India expects to raise Rs 2,500 crore through its rights issue in three months. The bank has already got the approval from the RBI and the government for taking this route to raise its capital adequacy ratio.

“Based on market conditions, we will be able to come up with our rights issue before the end of this financial year. RBI has already approved our public issue, and sent the case back to the government for approval. We are hoping that all approvals will come in by the end of this month,” said executive director of Central Bank of India, R K Dubey.

On September 30 2010, the bank had a capital to risk weighted assets ratio (CRAR) of 11.65 per cent. The rights issue will boost the Tier-I capital to 8 per cent and the overall CRAR to around 14 per cent. “The government owns 80.20 per cent stake in Central Bank of India and it will subscribe to the rights issue in proportion to its shareholding,” he added.

“We are going ahead to open branches in 131 districts across India, where we do not have a branch earlier. Since we do not have much presence in the North East and in Jammu and Kashmir, we propose to open 52 branches in the North East and 14 in Jammu and Kashmir. In six months, we will be opening an additional 350 branches, so that we have 4,000 branches across the country,” he said.

The executive director also said that they were looking at opening 8- 10 branches abroad.

Direct tax mop up to cross Rs 4.3 lakh cr

New Delhi, January 18
The government expects to exceed the direct tax collection target of Rs 4.30 lakh crore for 2010-11 on the backdrop of high economic growth of 8.9 per cent recorded during the first half of the current fiscal.

Pinning hopes on higher tax realisation in the fourth quarter, Central Board of Direct Taxes (CBDT) chairman Sudhir Chandra today said, "we are hoping to exceed the budgeted target for net direct tax collections this fiscal." According to certain estimates, total direct tax collections could be around Rs 4.5 lakh crore as against the budgetary estimate of Rs 4.3 lakh crore.

Encouraged by the high economic growth, Finance Minister Pranab Mukherjee recently raised the direct tax collection target by Rs 20,000 crore to Rs 4.5 lakh crore for the current fiscal.

Direct taxes mainly include corporate tax, income tax and wealth tax.

Indian economy has grown by 8.9 per cent during the first half of the current fiscal and according to estimates the growth rate during 2010-11 might go up to 9 per cent, up from 7.4 per cent recorded in the previous fiscal.

Rising economic growth is apparently having a positive impact on the tax collection figures.

The overall mop-up has been boosted by "good collections" under the Tax Deducted at Source (TDS) category, a senior I-T officer said.

The direct tax kitty has already risen by 19.47 per cent to Rs 2.99 lakh crore during the first nine months (April-December 2010) of this fiscal, making up for 69.53 per cent of the annual target.

During the first nine months of the current fiscal, the collections of corporate tax jumped 22.07 per cent to Rs 2.03 lakh crore.

Personal Income Tax grew at 14.57 per cent to Rs 92,295 crore during the period compared to Rs 83,178 crore in the same period last fiscal. The amount includes the Securities Transaction Tax, residual Fringe Benefit Tax and Banking Cash Transaction Tax. — PTI

India mulls anti-dumping duty of 40% on Chinese glass fibre

New Delhi, January 18
India is considering imposition of anti-dumping duty of upto 40.9 per cent on the import of glass fibre, used in automobiles, electrical insulation and heat resistant fabrics, from China to protect domestic players.

After concluding that "the domestic industry has suffered material injury," the Directorate General of Anti-dumping and Allied Duties (DGAD) has recommended the duty of upto 40.9 per cent on the import of glass fibre and articles (from China).

"...the Authority (DGAD) is of the view that imposition of duty is required to offset dumping and injury," DGAD said.

On an application from domestic industry, the DGAD, an arm of the commerce ministry, had initiated an investigation into the dumping of the fibre from China.

The restrictive duty would range from 7.6 per cent to 40.9 per cent on the CIF (cost, insurance and freight) value of imports of the fibre from China, it said.

The DGAD found that during the period of investigation (April 2008 - Sept 2009), the imports increased to 25, 831 tonnes from 5,800 tonnes in 2005-06.

The country has already imposed duty on imports of fabric, yarn, nylon tyre cord and several chemicals from China.

Countries initiate anti-dumping probe to determine whether their domestic industries have been hurt because of a surge in cheap imports. — PTI

Domestic air traffic highest in Oct-Dec; IndiGo pips AI

New Delhi, January 18
Domestic air traffic continued its robust growth for the October-December quarter, as leading no-frill carrier IndiGo again pipped Air India for the third place in terms of travellers flown.

The quarter saw 147.05 lakh passengers take flight, up from 134.78 lakh in April-June, 2010, 119.84 lakh in July-September and 118.54 lakh in January-March, official figures released today showed.

While Jet Airways and its wholly-owned subsidiary JetLite together carried 38.13 lakh passengers, it was followed by Kingfisher and Kingfisher Red combine which carried 27.81 lakh.

IndiGo flew 25.89 lakh passengers taking the third position, while Air India (Domestic) carried 25.42 lakh travellers. These airlines were followed by SpiceJet with 20.01 and GoAir with 9.79 lakh. In December alone, these airlines together flew 52.13 lakh passengers, with Jet-JetLite leading the way and Kingfisher and IndiGo following it.

Jet-JetLite jointly held 26 per cent of the entire domestic market share. The Jet group was followed by Kingfisher with 18.9 per cent, IndiGo with 17.6 per cent, Air India 17.1, SpiceJet 13.6 and GoAir 6.7, figures showed.

The highest seat factor of 93.3 per cent was bagged by IndiGo, followed by other no-frill carriers SpiceJet with 87.8, GoAir with 87 per cent and JetLite with 84.8. Seat factor is the average percentage of seats filled on each flight.

Air India recorded the lowest seat factor at 78.8 per cent, while Jet Airways recorded 80.1 and Kingfisher 85.9. — PTI

Questions on corruption await Indian CEOs in Davos

New Delhi, January 18
About 125 Indian CEOs and five senior ministers travelling next week to Davos for the World Economic Forum annual meet will have to answer some unsavoury questions about corruption and ‘governance deficit’ in India.

"I don't think we can hide anywhere...There will be a lot of questions on governance, which will be asked (at Davos)," CII President Hari Bhartia said here.

CII, which is a partner of the Geneva-based World Economic Forum (WEF), has announced formation of a National Council on Moral Issues headed by noted industrialist Adi Godrej.

The council will deliberate on how companies should follow their own ethical behaviour and will suggest to the government ways to reduce personal interface for seeking project approvals from different authorities. — PTI

New proposals on 2G spectrum pricing soon

New Delhi , January 18
The Telecom Regulatory Authority of India (TRAI) today said that it will come out with fresh proposals on 2G mobile phone spectrum pricing in the next few days. Speaking to the reporters on the sidelines of an industry function, its Chairman JS Sarma said that proposal could be sent over the next few weeks.

In May, TRAI had suggested that mobile operators in the country pay a one-time fee for holding 2G radio-spectrum beyond 6.2 Mhz and that it be based on 3G prices.

However, this was opposed by telecom operators due to its negative revenue implications and the operators has sent in their opposition to the Department of Telecommunications (DoT). — TNS

Ministry for import of clean coal technology

Lucknow, January 18
The coal ministry is pursuing a proposal to import Coal-to-Liquid (CTL) technology from South Africa to ensure environment-friendly utilisation of coal, Coal Minister Sri Prakash Jaiswal said.

Following frequent snubs by the Environment Ministry, which is closely scrutinising coal ministry projects leading to delays, the coal ministry was now concentrating on clean coal technology, said Jaiswal.

The minister said that on a recent visit to South Africa, the ministry had zeroed in on two technologies - underground coal gasification and CTL.

“We have zeroed in on CTL. A proposal has been prepared and would be pushed through very soon,” confirmed Jaiswal. — TNS