Ludhiana, February 23
Traders fear that the government might raise import duty on gold and silver in Budget. If a duty hike is announced, it will be the third successive year of such a move.

The industry fears that an increase in the import duty may lead to smuggling and inflow of gold in the country through NRIs.

“We expect that import duty on gold and silver will be increased this year. Even the high prices did not deter the spirits of the consumers from buying these shinning metals which may lead to an increase in the import duty,” said Ram Parkash, president of Ghumar Mandi Jewellers Association.

Despite a manifold increase in prices, the duties were not reviewed between 2004 and 2009. In 2009, the government raised the duty on silver from Rs 500 to Rs 1,000 per kg.

The duty on gold bars was raised from Rs 100 per 10 gram to Rs 200 per 10 gram and on other forms of gold (excluding jewellery) from Rs 250 per 10 gram to Rs 500 per 10 gram.

In 2010, the import duty on gold was raised by Rs 100 to Rs 300 per 10 gram and by Rs 500 to Rs 1,500 per kg on silver. If the duties are increased then NRIs might play a substantial role in bringing gold to India.

“Lot of Punjabis are settled abroad and if import duty is increased then gold will flow into the country through them," added another jeweller Sikhri Chand from Sarafan Bazar. Another jeweller from Chaura Bazar said there is a speculation that the import duty on both gold and silver may be increased.

“Gold may be smuggled into the country if the import duty is increased which may lead to wide gap between the global and Indian prices,” he added.

Chandigarh, February 23
With China a formidable threat to the Indian small and medium exporters, exporters are looking at the Finance Ministry to offer them a competitive edge through the taxation structure.

Exporters want the Budget to extend the focus market scheme. They also want loans at a comfortable rate of interest; besides rail freight concessions and reduction in Customs duty on raw material to reduce input costs.

A K Kohli, senior vice-president, Punjab Chamber of Small Exporters, said that interest on export finance should be brought down. “Currently, the interest rate is around 10 per cent, with a 2 per cent interest subvention. We hope that the government allows for an additional 2 per cent interest subvention, especially for labour intensive industries like textile, hand tools and agricultural implements, which comprise almost 35 per cent of the total exports from the region,”

He added the industry also wanted concessions in rail freight to exporters located at long distances from the ports, besides a reduction in the dividend tax on companies.

Vishal Malik, proprietor, Lasany International, a leading medical equipment exporter from the region, said the duty drawback should be increased, which presently varies from 2-10 per cent. “We hope that the government includes more countries in the focus market scheme, which will give a fillip to exports,” he added.

Exporters, who are importing large quantities of raw material, especially in the textile and the auto parts/ cycle parts manufacturing sector, look forward to a reduction in the Customs duty on these raw materials.

Neeraj Bansal, a leading cycle parts exporter from Ludhiana, said that if the government wanted to give an edge to Indian exporters over the Chinese counterparts, it will have to reduce the Customs duty on steel.

“This will reduce the input costs and our pricing in the global market will be on a par with prices of Chinese manufacturers. The government should impose export duty on iron ore, so that more of this is available to the domestic industry,” he added.

New Delhi, February 23
With crude oil prices touching a two-and-a-half year high of $108 per barrel, India has called for regulating oil markets, particularly paper trading, to avoid excessive volatility impacting importing nations.

“Given the dual role that crude oil now plays both as a physical commodity and a financial asset, we need to improve our understanding of the inter-linkages between the physical and financial markets, if we are to address the issues of price volatility and price discovery in the oil markets,” Petroleum Minister S Jaipal Reddy said at an International Energy Forum (IEF) meeting in Riyadh.

Speaking at the IEF, Extraordinary Ministerial Meeting at Riyadh (Saudi Arabia) yesterday evening, he said oil price discovery cannot be left entirely unregulated.

“One thing is certain: price discovery of such a vital and finite resource as oil cannot be left entirely unregulated, whether in the commodity derivatives markets or the financial markets," he said.

Most developing economies were faced with huge economic hardship during the unprecedented oil price rise in June 2008, when international oil prices exceeded $145 per barrel. — PTI

New Delhi, February 23
State-owned Oil India Ltd (OIL) is trying to evacuate personnel from the strife-torn Libya, where death toll in anti-government protests has crossed 300. OIL is the operator of two exploration blocks in scrub desert area of Western Libya.

The blocks, where Indian Oil Corp was an equal partner, had turned out to be dry and OIL had decided to relinquish them. “We were in the process of surrendering the blocks when the unrest broke out in Libya. 2-3 OIL personnel are stuck in Libyan capital of Tripoli,” a senior company official said. OIL is in touch with the Ministry of External Affairs to bring the personnel back. “We are in constant touch with them. They are safe and we are trying to evacuate them as soon as possible,” the official said.

OIL had, some weeks back, applied to Libyan authorities for relinquishing the two onshore blocks - Block 86 and Block 102(4) in oil-prolific Sirte Basin. It had an office at Hay Al Andalus - Ali Shehtri Street in Tripoli.

OIL was the operator of the two blocks and held 50 per cent stake in the venture, while the rest was held by state refiner IOC. OIL-IOC had won the blocks in the Libyan Exploration and Production Service Agreement (EPSA IV) Bid Round I in 2004.

The official said OIL also has interest in Area 95/96 (Block 2/1, 2 & 4) with Algerian oil firm Sonatrach. — PTI

Jhajjar, February 23
Rohtak Member of Parliament (MP), Deepender Hooda, today performed the ground-breaking ceremony to launch the construction of Panasonic India’s new factory project at village Dadri-Toi here. The company will invest about Rs 1,000 crore and provide employment to 4,000 persons.

The MP said the 76-acre facility this would be the first Panasonic eco ideas factory in India, . Construction will commence in April, 2011 and would be completed by April, 2012. Mass production will begin in August, 2012. The factory would house facilities to manufacture about 10 lakh sets of ACs, four lakh sets of washing machines and 25,000 sets of welding and cutting machines every year.

The MP claimed this factory would prove a big milestone in development of the Jhajjar district. Like Maruti-Suzuki, which had changed the face of Gurgaon, Panasonic Company, would also contribute in developing Jhajjar into an industrial hub.

Managing Director HSIIDC, Rajeev Arora, said it was a matter of great satisfaction that Panasonic had decided to establish its factory. Daizo Ito, President, Panasonic India said Panasonic has confidence in the developing economy of India.He hoped the company will get all co-operation to fulfil its objectives.

Chandigarh, February 23
Real estate developer Tata Housing Development Company today proposed to set up two residential projects in Punjab and Himachal Pradesh with an estimated investment of Rs 1,000 crore. "We have plans to set up two (residential) projects in Punjab and Himachal Pradesh, which will involve an investment of Rs 1,000 crore," company’s MD and CEO Brotin Banerjee told reporters here today.

Tata Housing, which is a subsidiary of Tata Sons Limited, is keen to build affordable and value homes in Punjab on Public Private Partnership mode over an area ranging 30-60 acres of land and a luxury housing project in Himachal Pradesh up to 10 acres of land. "About 60 to 65 per cent of our investment (Rs 1,000 crore) will be made in Punjab and rest in HP," he said.

Stating that the company was looking to develop affordable homes in Ludhiana, Jalandhar and periphery of Chandigarh, he said the company wanted to develop this project on PPP mode in the wake of high land prices in the state.

"Land is quite costly in the state (Punjab) and it will not be feasible to develop low cost housing project viable…we are trying to develop houses in affordable segment in Punjab on PPP mode and we have also held preliminary meetings with state government officials in this regard," he said. — PTI

New Delhi/Mumbai, February 23
Indian banks are hoping they get the government's nod to issue tax-free infrastructure bonds and some tax concession for 2011-12.

Public sector banks are also looking for the finer details of the government's capital infusion plans, which will boost capital adequacy and raise the government's stake to 58 per cent in many banks.

Currently only Industrial Finance Corp, Life Insurance Corp, Infrastructure Development Finance and some other non-banking infrastructure finance firms are allowed to issue tax-free bonds.

The lucrative tax-free bonds are a hit with investors, and with India's push for fast infrastructure growth, banks sense a huge opportunity.

The government plans to spend $1.5 trillion over a decade to overhaul its creaky infrastructure and bring the power supply, pot-holed roads and crowded railway network up to speed with the aspirations of one of the world's fastest growing economies.

"In the infrastructure sector, there is a problem of funding. So how to intensify the banks in terms of higher amounts of allocation for the sector (should be addressed in the budget)," M Narendra, Chairman at state-run Indian Overseas Bank told Reuters.

It will provide greater funding flexibility and better asset and liability management for banks and will benefit those with higher infrastructure exposures such as ICICI Bank, Punjab National Bank, Axis Bank, Yes Bank and Kotak Mahindra Bank, Citigroup analysts wrote in a note.

The banks can currently claim a tax levy only on 7.5 per cent of the money they set aside for sour loans, but with increased pressure from various quarters, the government may decide to raise the limit to as much as 50 per cent, bankers and analysts said.

"It makes sense," said Vaibhav Agrawal, an analyst with Angel Broking. He explained that having a better tax structure, instead of an arbitrary percentage figure, will be benefit banks. A reduction in effective tax rates will be a positive for all, particularly State Bank of India, the nations' top lender, Citigroup said.

Banks are also expecting a doubling of tax-free investment limit to Rs 2 lakh that will increase deposit mobilisation, and a shrinking of the lock-in period to 3 years from five will put fixed deposits at par with equity-linked savings schemes, Angel Broking said in a pre-budget note.

Indian banks will also keenly watch the fiscal deficit figure -- seen at around 4.8 per cent of gross domestic product according to a Reuters poll.

New Delhi, February 23
The Telecom Regulatory Authority of India (TRAI) which was under the scanner for alleged inaction in 2G Spectrum allocation scam, today told the Supreme Court that it had from time to time recommended to the government action against erring companies, including cancellation of licences of Idea cellular and Spice telecom for some circles.

The agency said the two companies failed to fulfill roll-out obligations and their merger was in violation of rules.

“TRAI wrote to DoT that Idea and Spice are in violation of the terms and conditions pertaining to roll-out obligations and the merger between the two companies is in violation of the guidelines for the Intra-Service area merger," it said in its its 19-page affidavit.

"The licences of Idea in Punjab and Karnataka service area and Spice in respect of Maharashtra, Haryana and Andhra Pradesh service area may be cancelled," the regulator said. The regulator also submitted it had recommended to the government in November last year to take punitive action against the telecom companies for not fulfilling their roll-out obligations.

“The authority wrote to DoT stating that 69 licenses out of 130 did not fulfill the mandatory roll-out obligations and recommended that immediate necessary action be taken by the DoT against them," TRAI said.

TRAI filed its response after apex court had questioned its role for remaining "silent" when the telecom companies failed to fulfill the roll-out obligations for 2G Spectrum.

"Why did TRAI not take action? Why was it silent for around one year and seven months? TRAI is treated as the highest regulatory authority in telecom sector and even in terms of the consumer. What was it doing?," the court had said.

Responding to the court's query, the Tribunal said that being a recommendatory body, it has been suggesting to the government from time to time to take action against the erring companies but it is for the government to decide whether action should be taken against them or not.

TRAI said it had written to telecom companies for not fulfilling their roll-out obligations and has been seeking report from service providers from time to time. — PTI

Mumbai, February 23
Credit offtake from public and private sector banks in the country grew over 24 per cent for the one-year period ended February 11, indicating an upswing in the industrial activity, says the RBI. According to the apex bank, for the one-year period ended February 11, credit offtake stood at Rs 38.98 lakh crore as against Rs 31.43 lakh crore a year ago. During the period, deposits went up to Rs 51.87 lakh crore from Rs 44.51 lakh crore as on February 12, 2010, shows the latest data from the Reserve Bank.

This is a rise of over 16.5 per cent on an annual basis. RBI, in its annual monetary policy at the beginning of the fiscal, had estimated that credit offtake to grow by 20 per cent this fiscal.

However, in December 2010 the apex bank expressed concerns at the widening ratio between the credit and deposit rates of banks. This has the potential to affect the supply of liquidity in system due to higher lending by the banks vis-a-vis lower deposits.

In its recent third quarterly monetary policy review, RBI had noted that the deposit growth moderated during 2010. Consequently, deposit growth increased to 16.5 per cent by end-December 2010, close to the indicative projection of 17 per cent for 2010-11.

However, annual nonfood credit growth has been above the Reserve Bank's indicative projection of 20 per cent since early October 2010, rising to 24 per cent by end-December 2010, it said. — PTI