New Delhi, July 13
As the dust settles after the much-awaited Cabinet reshuffle with no change in the top portfolios, industry and markets expect the Finance Minister Pranab Mukherjee to take steps to control inflation and restore investor confidence to arrest fears of a slowdown.

With the Finance Ministry being the nucleus of government’s economic policy and the Pranab Mukherjee himself chairing several Group of Ministers (GoMs) on important economic and political issues, the Finance Minister is one of the most important members of the UPA II.

With the government completing two years in office, the last few months have been quite turbulent with several scams hitting the government and a perceived policy paralysis setting in. This has hurt the economy with investments slowing down and growth prospects already reeling under the impact of high inflation, rising interest rates and high crude prices getting further affected.

Jyotirmoy Jain, adviser and head, banking and finance division, Assocham, says the economy is going through a difficult phase with rising inflation, high fiscal deficit and government revenues showing signs of dipping.

According to Jain, the main priority of the Finance Minister will be to restore confidence of investors and industry by taking up approval of projects which are not being cleared. He said that this was causing a slowdown in the economy and also leading to cost overruns.

Among the other immediate steps, Jain listed were making economic data more reliable for RBI and government policy action and fiscal measures to control inflation.

Slowdown in investments and continuous interest rate hikes are leading to a slowdown in industrial growth which recent data has showed.

Jagannadham Thunuguntla, strategist and head of research, SMC Global Securities said controlling inflation should be by far the FM’s top priority.

The other important measures include managing the fiscal deficit, meeting tax collection targets, increasing disinvestment activity, addressing slowing GDP and IIP numbers and bringing back the confidence of foreign investors.

Industry chamber Ficci has outlined some measures which the government should undertake. These include pursuing roll out of GST by sensitising the states, pushing up the share of manufacturing in GDP in the next 10 years through a National Manufacturing Policy, focus on specific sectors like agriculture reform, infrastructure development and FDI into specific sectors like retail, real estate

Chandigarh, July 13
North India will be a major focus area for Yes Bank, the fastest-growing private bank in the country. Yes Bank is looking at expanding its branch network in Haryana and developing its knowledge banking initiatives in Punjab.

The bank gets 45 per cent of its total business from North India, and is expecting to increase revenue from here with the commissioning of the Delhi-Mumbai Industrial Corridor (DMIC). With Haryana being a key state to attract investment along the DMIC, the bank is expanding its operations there by adding 30 more branches by 2015.

Nikhil Sahni, president, branch banking, Yes Bank, said the bank already has 39 branches in Haryana. “We are looking at having 70 branches in Haryana in the next four years. Besides, food and agri business, telecom and automobile sector will continue to aid in the growth of the bank here,” he said. Sahni was in the city for the inauguration of Yes Bank’s branch banking operations in Haryana. The inauguration was done by Haryana CM Bhupinder Singh Hooda, who urged that banks should take a lead in achieving the goal of inclusive development by not confining themselves to urban areas but also reaching out to people in rural areas.

The bank is also working with the Indian Council of Agriculture Research (ICAR) and Punjab Agricultural University (PAU) to develop a business strategy for starting agriculture insurance for maize and potato crops in Punjab. “We are now looking at developing an insurance product, which will be launched by Agriculture Insurance Company, for the maize and potato crops in Punjab, and for horticulture and floriculture crops in Uttarakhand,”he added.

Talking to The Tribune, Jaideep Iyer, senior president, Financial Management of the bank, said Yes Bank has emerged as the fastest growing private sector bank in the country. “Last year, our advances stood at Rs 34,200 crore and deposits at Rs 45,000 crore, and the bank’s business grew by 64 per cent. 

New Delhi, July 13
Even as some other sectors of the economy face a slowdown, the education sector has become a $50 billion industry and attracting increasing number of investments.

Shantanu Prakash, MD & CEO, Educomp Solutions, told The Tribune that the demand for education services is growing at a phenomenal rate as there is an urgent need for high quality education systems for students.

Prakash said the market size can be quickly gauged from the fact that there are 460 million children below the age of 20, making India by far the largest home for learners in the world. Today, education is widely recognised as among the hottest sectors (currently $50 billion opportunity annually) on back of a huge demand for products and services and due to the recession-proof nature of this sector.

According to a study by Finpac Financial, India comprises of large section of middle-income families having strong perception that education is the only way to reach higher strata and thus is an education-oriented country.

IIT and IIM, being dream courses, face stiff competition in entrance exams. This has lead to emergence of several companies in the test reparation market whose size has been pegged to the tune of $68 billion, the report adds.

The report says that as almost the entire organised education industry producing the formal qualifications are guided by the regulations and run in the Trust format, there is very little scope for making investments at that end. So, to take advantage of education opportunity, test preparation industry is proving to be the only way for PE funds to invest.

Within the education space, this industry has received the most attention due to its super growth during the past decade - helped by the India's demographic dividend and being an unregulated industry. Career Point has already hit the stock markets with a successful IPO attracting demand of $1.20 billion. 58 PE deals have already happened in the industry.

As the only industry in which investments continued to growth through the 2008-09 downturn, private equity and venture capital investors continue to be bullish about investing in education companies, says a study by Venture Intelligence. According to data from Venture Intelligence, PE investors have already invested $93 million across 10 education companies so far in 2011.

In a survey conducted for the report, the investors chose vocational education and test preparation companies as among their favourite sectors within the industry. These were followed closely by educational technology and tutorial firms.

New Delhi, July 13
Auto component maker Motherson Sumi Systems Ltd (MSSL) today said it will acquire an 80 per cent stake in Germany's Peguform Group from Cross Industries AG. It, however, did not disclose the quantum of the deal.

Acquisition will be carried out jointly with group firm Samvardhana Motherson Finance Ltd, the company said.

Commenting on the acquisition, Samvardhana Motherson Group (SMG) Chairman and MSSL vice-chairman VC Sehgal said: "Apart from the synergies that SMG would bring to the acquired entity, the product range of Peguform complements our polymer product range in India .

There are obvious synergies in terms of customers served which will further strengthen the position of the group as a global module supplier to automotive OEMs."

Addressing the media here, Sehgal said the deal would be closed by September-October. "We will announce the value then only".

He added that the acquisition would be funded through debt, for which it has tied up with a consortium of Indian banks.

Cross Industries would continue to hold a 20 per cent shareholding, the statement added.

The acquisition would be carried out through a special purpose vehicle in which MSSL will hold 51 per cent and Samvardhana Motherson Finance Ltd will hold a 49 per cent share, it said.

This SPV would acquire 80 per cent of the shares of Peguform Group, while 20 per cent of the shares would remain with the existing shareholder, Cross Industries AG.

Trading sentiment turned bullish as gold climbed $12.90 to $1,567.55 an ounce in global markets as concerns that the escalating debt crisis in Europe may slow down global economic growth, boosted the metal's demand as an alternative investment. — PTI

New Delhi, July 13
Raising concerns about the health of power distribution utilities, Planning Commission Deputy Chairman Montek Singh Ahluwalia today suggested introduction of different electricity tariffs for peak and off-peak hours.

Peak period refers to the time when electricity is high compared to ordinary time

Power distribution companies in the country are estimated to have incurred a staggering loss of about Rs 70,000 crore in the last fiscal and the amount is expected to be as much as Rs 1,16,000 crore by 2014-15.

Speaking at the power ministers conference on distribution reforms here, he said it is easy to have a "time of the day tariff", where the rate is slightly higher for the peak period.

"The real issue is the difference between peak and non-peak is sufficiently large to actually encourage a switch.

That probably requires higher tariffs during peak period and may be even lower tariffs during non-peak periods," he said. Peak period generally refers to the time when electricity is high compared to ordinary time.

Power Secretary P Uma Shankar noted that electricity distribution losses are expected to reach as much as Rs 1,16,000 crore by 2014-15. — PTI