New Delhi, April 8
Against the backdrop of an anti-graft campaign spearheaded by Anna Hazare, Finance Minister Pranab Mukherjee today admitted that corruption has hit the poor and favoured steps to effectively tackle this menace.

"It is not sufficient to have good intentions and good policies. They have to be implemented and acted upon. That requires collective efforts," he said while addressing the CII National Conference.

The minister pointed out that "governance failures and corruption in the system" had hit the poor the most and added, "an inclusive development agenda cannot succeed without addressing these issues".

"It is evident that the fruits of growing prosperity are not being enjoyed equally by all our citizens. There are gaps in our development efforts and in our governance practices, ...across sectors and in different regions and segments of the country," Mukherjee said.

According to the finance minister, the country's economic development should be more holistic to bring about sustained improvement in living standards across masses, including access to affordable healthcare and social security, among other things.

"It is equally important that the available public resources are effectively used. We are acutely conscious that if these resources have to bear fruit, we will have to tackle issues of governance and service delivery," he added.

The government has formed a ministerial panel on corruption, headed by Mukherjee, which is deliberating inclusion of various features in Lokpal bill to tackle corruption. — PTI

Mumbai, April 8
State Bank of India (SBI) new Chairman Pratip Chaudhuri today said it would continue with the policy of amalgamation of its associate banks for building scale.

"The path or this course of merging associate banks would continue," Chaudhuri said in the first press meet here after assuming charge yesterday.

"We did one merger every two years because we had to give more time for absorption of that network, of people in the parent bank but we are equally convinced about the need and correctness of doing that and we will pursue that," he said.

SBI did first ever amalgamation of its associate State Bank of Saurashtra in 2008 followed by State Bank of Indore in August last year.

"And now we have the experience of merging an associate which was 100 per cent owned by SBI and another bank which was not 100 per cent owned and there was some public ownership," he said, adding, "So, there is enough experience and enough learning".

"We think that the merger when completed does deliver value, synergies and does generate economies of scale without hurting individuals or depositors' interest," he said.

SBI has five associate banks — State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Mysore and State Bank of Hyderabad.

SBI plans consolidation of remaining 5 associate banks with itself in the next 12-18 months, the Finance Ministry had earlier informed a Parliamentary Committee.

Among these, the State Banks of Bikaner and Jaipur, State Bank of Mysore and State Bank of Travancore are listed companies.

Besides, Chaudhuri, Deputy Managing Directors Hemant G Contractor, A Krishna Kumar and Diwakar Gupta also assumed charge of Managing Directors yesterday.

Contractor would look after international banking operation of the bank while Kumar would take care of national banking. However, Gupta would be Chief Finance Officer.

Senior most Managing Director R Shridharan would continue to look after the existing portfolio.

With this, the country's largest lender SBI with 25 per cent market share would have four 4 Managing Directors for the first time after amendment in the SBI Act.

Citing meeting with the Reserve Bank after taking over the charge Chaudhuri said "they (RBI) mentioned that the consolidation whatever in the Indian banking space has happened has been only in the private sector that too in consolidating the weak banks particularly in the public sector except the associate banks there has not been significant consolidation." — PTI

Chandigarh, April 8
Escalating cost of land for developers and poor returns on investment are emerging as major obstacles to the development of realty sector in Greater Mohali. This is especially true of numerous real estate projects coming up on the Kharar- Landran road.

Land prices on this region have risen almost 100 per cent in six years. With developers as well as those who had initially invested in these projects failing to get buyers, most projects have remained non-starters.

Although developers are putting money in their projects and have started construction and development work in most townships, projects are still struggling to find buyers.

“When most of these projects were launched in 2006-2008, the real estate sector was booming. Since the Punjab government, too, was aggressive about planned development here by floating new sectors, many investors pumped in money, hoping for good returns. At that time, the response for most projects was phenomenal, mainly because the prices at that time were quite affordable as compared to the older sectors in Mohali and even Chandigarh,” a realtor said.

He added that with most developers seeking Rs 18,000 - Rs 20,000 per square yard in their recently launched phases, investors have shied away. In fact, even those units that are in the re-sale are not fetching more than 15 per cent profit on investment.

A senior official TDI official said that the cost of land acquisition for developers here had gone up from Rs 25 lakh per acre to Rs 2 crore - Rs 2.5 crore per acre, in the last six years.

“With the state government itself acquiring land at Rs 1.5 crore per acre, the farmers here are demanding higher rates than those offered by the state government. With this cost having gone up, the developers have increased their selling price by almost three times,” he explained. However, he said that the situation would take a turn for the better, especially in wake of the high prices being fetched in Mullanpur area (referred to as new Chandigarh), where there was still no infrastructure development.

Amarjit Sethi, a leading realtor in Chandigarh, said that with these developers coming up with innovative payment schedules and willing to offer better quality and services in the new phases, realty sector here could witness a boom. 

New Delhi, April 8
The Indian automobile industry on Friday reported 26.17 per cent growth in vehicle sales during 2010-11, mainly riding on the back of robust economic growth, more focus on rural areas and new model launches.

The Society of Indian Automobile Manufacturers (SIAM), however, forecast a slowdown in the rate and predicted a 12-15 per cent growth in 2011-12.

It also said the Indian industry was expected to overtake Brazil to become the sixth largest auto market in the world during this fiscal. Figures released by SIAM show that total vehicles sales in India in FY11 stood at 1,55,13,156 units compared to 1,22,95,397 units in the previous financial year.

"We have ended the year on a reasonably high note. We have reached a very strong base after a consistent good growth in the last six quarters," SIAM President Pawan Goenka said.

He said a variety of factors, including good GDP growth, higher spending on infrastructure development, strong consumer confidence, government's focus on rural areas, moderate price hike by the auto makers despite steep rise in commodity rates and introduction of new models, helped the industry register the gains in the last fiscal.

There were 24 new launches in the passenger vehicles segment last fiscal. For the two-wheelers, it was 16. Besides, the passenger vehicle and two-wheeler industries saw 40 and 7 refreshed versions respectively, Goenka said.

Talking about the outlook for 2011-12, Goenka said: "We expect the growth for the industry to moderate and settle down at around 12-15 per cent this year. This year, we hope to overtake Brazil and become the number 6 automobile market in the world."

Last fiscal, domestic auto sales were driven equally by all the segments. The passenger car sales rose by 29.73 per cent to 19,82,702 units from 15,28,337 units in the April-March period of the earlier fiscal.

Market leader Maruti Suzuki's sales during last fiscal jumped by 26.24 per cent at 9,66,447 units, while its rival Hyundai Motor's sales increased by 13.95 per cent to 3,58,904 units. Tata Motors witnessed a rise of 27.21 per cent at 2,56,202 units, SIAM said.

Total two-wheeler sales in FY11 also increased by 25.82 per cent at 1,17,90,305 units compared to 93,70,951 units in FY10, it added. Motorcycle sales in the country during 2010-11 were up 22.86 per cent at 90,19,090 units as against 73,41,122 units in 2009-10.

The country's largest bike maker Hero Honda's sales rose 14.73 per cent to 49,26,390 units. Bajaj Auto saw sales climb 35.52 per cent to 24,14,603 units in FY11.

Kolkata, April 8
The Chief Economic Advisor to the Union Finance Ministry, Kaushik Basu, has said although inflation has not gone out of hand, it is still not in the government's comfort zone.

"WPI inflation figure is 8 per cent compared to 11 per cent this time last year. It is not going out of hand, but not in the comfort zone," Basu said at an interactive session here last night.

In April and May this year, it was expected that inflation would be below 8 per cent and7 per cent, respectively, after which it would stabilise at around 5 per cent, Basu said.

While the RBI had been following a tight monetary policy to control inflation, the government is also doing its best, he said. He said while RBI action usually takes six to nine months to have an effect on the system, it is three months before the impact of steps taken by the government are felt.

Although India was on a high growth trajectory, inflation and corruption were the two big clouds looming over the country, he said.— PTI 

Mumbai, April 8
With Air India announcing plans to become operationally profitable in four years, nearly 20 of its lenders today expressed support to it indicating that they were willing to consider recasting its entire Rs 40,000 crore debt.

At a three hour-long meeting here, the airline management made a detailed presentation on the plan saying it has set a target of enhancing revenues by Rs 5,000 crore and slash costs by Rs 4,000 crore per annum.

Air India CMD Arvind Jadhav shared with top executives of banks details of the turnaround plan and the financial re- structuring plan which aims to make the cash-strapped carrier operationally profitable by 2015, senior officials said.

The bankers would form "a small group from within the consortium to move forward in this matter", they said.

The airline is saddled with a debt of about Rs 40,000 crore of which Rs 18,000 crore is working capital loans taken from a consortium of banks, while the balance Rs 22,000 crore worth of loans is towards payment of new aircraft ordered.

"It was the first meeting that all the lenders had with the AI management. SBI Caps and Deloitte made a presentation and we have to get back to them with our views.

Hopefully, we will have the second meeting in 10 days," Bank of Baroda (BoB) General Manager Arun Tiwari told reporters.

SBI Caps was mandated last year by a consortium of nearly 10 lenders to thrash out a turnaround strategy for the ailing national carrier.

Another BoB officer N Ramani said "almost 90 per cent of the proposals are fine with us and we are keen that the airline is back to good health." On whether the proposal is to recast only the Rs 18,000 crore working capital loan, he said "this is not a piecemeal proposal”. — PTI