New Delhi, May 27
The Inter-Ministerial Group (IMG) today suggested two major steps to control inflation including opening up multi-brand retail to foreign companies and changes in agriculture marketing laws to bridge the margin between farm gate prices and retail price.

The IMG warned that though it was important to allow the entry of FDI into this sector in a properly regulated fashion and there is a need to guard against the risk of these new corporations becoming monopolistic and charging high prices.

“We are taking a clear position on FDI in multi-brand retail. Of course, it is a recommendation, not policy,” chief economic advisor and IMG chairman Kaushik Basu told reporters here.

The debate on opening up the retail sector has been going on for a while now but is being strongly opposed by the domestic lobby that says that large MNC retail formats like Walmart coming in will wipe out the neighbourhood kiryana stores, which are huge in numbers and form an important constituency.

The IMG, Basu added, favours formulation of a model Agriculture Produce Marketing Committee (APMC) law, which could be adopted by the states to remove supply bottlenecks.

The IMG said that the APMC Act ought to be amended so as to enable farmers to bring their products to retail outlets and also allow retailers to directly purchase from the farmers, without facing blockades by incumbent traders. The APMC system has abetted monopolistic behaviour and reduced the choices available to small farmers. The well-intentioned APMC law helped cartelisation and collusion amongst incumbent traders, the group said.

The group IMG recommended that the government considers this at the earliest. Its logic is that India’s retail sector continues to be primitive and there is evidence that there are large losses that occur as products pass through the supply chain from farm to the retail customer.

This will get new technology and expand organised retail and provide remunerative prices for farmers and fair prices for consumers especially during the peak marketing season.

Once large corporations begin to source their products from Indian outlets it is very likely that they will gradually take these products to sell in their outlets in other countries, opening up exports.

The IMG said that correcting the margin between the price that farmers get and price that consumers pay is not going to solve the problem of inflation for all times to come but it can have a sharp desirable effect in the short run of bringing down food inflation.

New Delhi, May 27
Recommending conditional approval for the Cairn-Vedanta deal, a Group of Ministers today said the two companies must agree to treating royalty on mainstay Rajasthan block as cost recoverable, and agree to paying cess.

Sources privy to the deliberations said the GoM felt that as a pre-condition for the nod, Cairn or its successor should consent to paying cess on the all important Rajasthan block as well as agree to cost-recovery of Rs 18,000 crore in royalty that ONGC pays on the fields.

Cairn should also withdraw arbitration proceeding it has initiated, disputing its liability to pay Rs 2,500 per ton cess on its 70 per cent share in the Rajasthan block.

The recommendation of the GoM headed by Finance Minister Pranab Mukherjee will go to the Cabinet Committee on Economic Affairs (CCEA) in two weeks time, Oil Minister S Jaipal Reddy told reporters after the 75-minute long meeting.

"It (GoM) has looked at various aspects of the (USD 9.6 billion) deal. It has taken a view on the matter. This view will be presented to the CCEA. GoM is not going to meet again," he told reporters here. "The recommendation was unanimous." He refused to any details of deliberations at the GoM.

Cairn will also have to seek consent of state-owned Oil and Natural Gas Corp's (ONGC), which holds stake in 8 out of the 10 properties held by Cairn India in the country.

Also, Vedanta will need a security clearance from the Ministry of Home Affairs.

Cairn holds 70 per cent interest in the Rajasthan block but does not pay any royalty. — PTI

Mumbai, May 27
To encourage Indian companies to expand their global footprint and showcase entrepreneurial skills, the Reserve Bank of India today relaxed norms for overseas direct investments.

The regulations relating to overseas direct investments, RBI said in a circular, are being liberalised "with a view to providing more operational flexibility to Indian corporates having investments abroad".

The modified norms will provide greater freedom to domestic companies like Tatas, Bharti and Reliance to increase their commitments in overseas joint ventures and subsidiaries and also help them repatriate funds without seeking prior approval RBI nod.

"The move is in recognition of entrepreneurial ability of India Inc by the Reserve Bank. It is a welcome step and will help companies grow on a global stage", said Ashvin Parekh, partner and national leader (financial services) Ernst & Young.

Expressing similar views, Diljeet Titus, senior partner of law firm Titus & Co, said, "the relaxation of investment norms will encourage overseas acquisitions. It will be of great help to infrastructure companies which are looking for mining rights". — PTI

Chandigarh, May 27
Airtel and Aircel have upped the war quotient in the mobile data space, with the launch of the iconic iPhone 4 today, in a bundled package with a two-year connection.

The two operators have launched both the versions of the phone (16 GB for Rs 34,500 and 32 GB for Rs 40,900), and are offering tariff plans which will allow a sizeable waiver on the monthly tariff plans.

Shashi Arora, CEO, Airtel- Mobility (Upper North), said: “The market is witnessing an increasing demand for devices that deliver the ultimate user experience — through a good user interface, rich feature capabilities and innovative applications,” he added. Airtel has launched iPhone4 today at Chandigarh, Ludhiana, Jalandhar, Shimla and Srinagar, besides 30 other cities.

Aircel, too, is looking at wooing a large number of hi end customers through its bundled offer with iPhone. Gurmeet Makkar, business head, Punjab, Jammu and Kashmir and Himachal Pradesh, said that they were expecting a good response from this launch. “We are also offering a 100 per cent return on the cost of buying the handset, by giving freebies over two years. For the phone that costs Rs 40,900, we are giving freebies and waiver on monthly rental worth Rs 41,090 over two years,” he said. In North India, Aircel has launched iPhone 4 in Chandigarh, Amritsar, Jalandhar, Ludhiana, Jammu and Srinagar.

Idea, though, not chosen by Apple as partner, has come up with special plans for data downloads. In Punjab telecom circle, the company is offering GPRS 1GB at just Rs 29 per month.

New Delhi, May 27
The country’s largest hydro-power producer NHPC today reported 3.64 per cent rise in profit to Rs 2,166.67 crore for 2010-11 financial year, helped by lower interest expenses and higher other income. The state-run company had a profit of Rs 2,090.50 crore in 2009-10.

Geneva, May 27
Amid differences to liberalise global trade through the Doha pact, WTO members of the emerging economies like India and the rich countries have agreed, at the minimum, to open markets to least developed nations.

Trade Ministers from India, European members, the US, Australia and China met informally at the sidelines of OECD meeting yesterday.

“The meeting saw a unanimous resolve that a package of deliverables (for) the interests of least developed countries be accorded priority and efforts be made to fast track negotiations in those areas for conclusion by December,” Commerce Minister Anand Sharma said.

WTO Director General Pascal Lamy made a plea to the member countries to agree on a step-by-step deal if the full scale agreement under Doha is not achievable. — PTI

BRIEFLY

RCom raises final tranche from CDB
New Delhi: Reliance Communications on Friday said that it had drawn the third and final tranche of Rs 1,200 crore from the Rs 8,700 crore loan facility signed with China Development Bank (CDB) towards refinancing of 3G spectrum fees. The facility includes Rs 6,000 crore for refinancing 3G spectrum fee payment by RCom and Rs 2,700 crore for equipment imports from Chinese vendors. The drawn amount will also be used to refinance RCom's short-term borrowings resulting in sustantial savings in its interest costs apart from extending RCom's debt maturity profile. The loan facility, which is fully underwritten by the CDB, is being funded by a syndicate of Chinese Banks or financial institutions including the CDB.— TNS

Adani’ s Rs 7K crore power project in Bihar
Patna: Adani Power Ltd has submitted a Rs 7,000 crore proposal to the Bihar government for setting up a 1,320 (610x2) MW thermal power station in the state and mining coal from the Urma Pahari coal mines in Jharkhand to feed the project. APL Chairman Gautam Adani submitted this proposal at a meeting with Bihar Chief Minister Nitish Kumar at the state secretariat here last evening, an official spokesman said. — PTI

Mylan to rebrand Matrix Lab
Mumbai: US-based pharmaceutical firm Mylan on Friday said it is planning to rebrand its Indian subsidiary Matrix Laboratories and commercially launch prescription products in the country within one year. "We are planning to rebrand our subsidiary Matrix Laboratories as Mylan and commercially launch prescription drugs in India with one year," Mylan Chairman and CEO Robert J Coury said. — PTI