New Delhi, July 22
After nearly five months wait, the government today cleared UK's BP Plc buying 30 per cent stake in most of Reliance Industries' oil and gas blocks, including the showpiece KG-D6 gas fields, for $7.2 billion.

The Cabinet Committee on Economic Affairs (CCEA), headed by Prime Minister Manmohan Singh, today approved BP buying stake in RIL's 21 blocks, sources said.

The CCEA could not meet on its scheduled day yesterday as the Oil Ministry had not circulated the agenda in time.

RIL, India's most-valuable company, had on February 21 agreed to sell 30 per cent stake in 23 out of its 29 oil and gas blocks to London-based BP Plc for $7.2 billion, and may get an additional $1.8 billion if the two explorers find more hydrocarbons.

The CCEA approved sale of stake in only 21 blocks as exploration status in the two remaining blocks was in dispute.

BP will have to furnish a bank guarantee and performance guarantee as has been prescribed under the production-sharing contract.

The deal, that may increase to $20 billion with future performance payments and investment, will give Reliance access to BP's expertise in deep-water drilling and accelerate development and production at its fields particularly the under-performing eastern offshore KG-D6.

For BP, which has been struggling to battle back from the disastrous Gulf of Mexico oil-spill disaster last year, the transaction is a chance to enter a market where energy demand is growing at 5-8 per cent.

Officials said Reliance had on February 25 applied for government nod for the stake sale. New Exploration Licencing Policy, under which Reliance had won the oil and gas blocks, allowed for sale or assignment of participating interest (farm-out), which is routinely approved by the Oil Ministry.

But the ministry, even though competent to approve the deal, decided to refer it to the CCEA.

Reliance may use BP's deepwater expertise to tackle the technical issues in the sub-surface of KG-D6 block.

Dhirubhai-1 and -3 gas fields in the KG-D6 block have seen output falling to 39 million cubic meters per day from 50 mmscmd achieved in March last year. Reliance has been forced to restrict oil production from the MA field, in the same area, to about 15,000 barrels per day due to high water and gas cut.

Besides addressing the reservoir issues in KG-D6, BP is expected to help Reliance quickly put into production 9 satellite gas discoveries, for which Reliance has been struggling to piece together a viable development plan.

While the Europe's second biggest oil firm will pay $7.2 billion in three tranches in FY12, some analysts said Reliance will not be liable to any income tax on the receipts.The $7.2 billion deal is seen as the biggest FDI into India. — PTI

New Delhi, July 22
The Indian as well as the international experience suggests that there is no long run trade-off between growth and inflation, according to a Finance Ministry note.

Explaining this, it states that any attempt to push growth above potential will only lead to higher inflation but no durable growth and employment gains. In the short run, lowering inflation can have a dampening effect on growth but is positive for sustained medium to long-term growth. According to the Finance Minister Pranab Mukherjee, inflation is likely to moderate only by March next year.

Other emerging economies are also facing challenges of high inflation between 6 to 20 per cent. The reasons for persisting inflation in India have changed, points out the note. Though food inflation was earlier the main concern, it has now dropped and sources of inflation have now switched to non-food with much of it due to imported commodity inflation. International prices of oil, food, metals and fibres have increased by 24 per cent in the last one year.

As most observers, including OECD in its latest survey expect, India is capable of faster sustained growth approaching 10 per cent annually or more, based on demographics, related high savings, continued high investment and productivity gains.

The Finance Ministry has also indicated that its preferred approach is to increase administered prices such as oil only gradually while protecting the poor sections through direct income raising support such as NREGA and more targeted subsidies.

It also argues that if the price increases were not passed on then the effect would show up in the larger fiscal deficit which would cause higher general inflation, which is a worse outcome.

The Ministry has also indicated that growth outlook for this year may be lower than was estimated in the Economic Survey at around 9 per cent. The apparent slowdown in headline year-on- year growth rates on a quarterly basis, plus movements in other high-frequency indicators such as a slowing revised series of industrial production index, lower Purchasing Managers Index (PMI) and slowing automobile sales point towards a lower growth rate.

Taking all these factors into account, the note says there is probably a need to revisit the growth outlook for the year. On the supply side, agriculture is likely to grow around 3-4 per cent on the back of a near normal monsoon and expected strong supply response to higher prices for food in the recent past. In services, barring the sub-sector, financing, insurance, real estate and business services there is strong growth but industry will slow down.

On the demand side, private consumption and exports are strong but corporate investment is moderating. There is a slowdown in corporate investment because the capex of the corporate sector is led by the profit cycle which was affected by cost escalation of inputs. However, the capex component of infrastructure sector remains strong.

On exports, though there has been a surge this may not be sustained on account of problems in Europe and slowdown in global trade volumes and effects of commodity prices.

Mumbai, July 22
The RBI today said it would soon put into circulation new coins in five denominations, ranging from fifty paise to Rs 10. The fifty paise, Re 1 and Rs 2 coins would be of ferritic stainless steel containing iron and chromium, while the Rs 5 coins would be made of nickel brass with a varying composition of copper, zinc and nickel. The Rs 10 coins would be made of copper and nickel.

Fifty paise is the lowest valid denomination in the country now after 25 paise coins were withdrawn from circulation from June 30.

All the new coins would be circular in shape, with a shape and outside diameter between 19 to 27 millimetres. The coins would shall bear the Lion Capitol of the Ashoka Pillar and the word 'India' in English on one side and their denominational value on the obverse side. —PTI 

Melbourne, July 22
Scandal stricken News Corp suffered a fresh setback today when Australian Competition Commission said its $2.7 billion takeover bid of Austar raised "significant" monopoly issues and delayed decisions on it till September.

The takeover bid by Foxtel, part owned by Murdoch's News Corp would have given the company an almost undisputed sway in pay TV operations in Australia.The delay in takeover bid was a second setback to Murdoch's News Corp within weeks as the company had to abandon its plans to take full control of the money spinner London-based Satellite Broadcaster, BSkyB.

The Australian Competition Commission ruled that the merger of Foxtel and Austar, its major rival in Australia was likely to lead to "substantial lessening of competition in the pay TV market"."The proposed merger would therefore effectively create a monopoly subscription television provider across Australia", 'Sydney Morning Herald' reported quoting a statement issued by the Commission.

The Australian Commission plans to pronounce a final verdict in September, but the issues relating to monopoly raised by it have put question marks on the bid by Foxtel.

While News Corp owns 25 per cent of Foxtel, the remaining 75 per cent is owned by telecom giant Telstra (50 per cent) and Packer owned Consolidated Media Holdings (25 per cent).

Though the Murdoch-owned News Corp is struggling to overcome a phone hacking scandal in Britain, the Commission chairman Graeme Samuel said there was not the slightest connection of any nature between his decision and the storm in UK.— PTI

BRIEFLY

Airtel hikes tariff of pre-paid pack
New Delhi: Bharti Airtel on Friday announced an increase in the pre-paid tariff rates of its 'Advantage' pack. The company announced that users of advantage packs, which are based on per minute billing, will have to pay 60 paise per minute for local and STD calls to mobile phones and 90 paise for local and STD calls to landlines. Furthermore, Re 1 and Rs 1.5 will be charged for local and national SMSes, respectively. — PTI

Suzlon to buy remaining stake in REpower
New Delhi: Suzlon Energy on Friday said it plans to purchase the remaining minority stake in German entity REpower Systems AG for euro 63 million. Suzlon has 95.16 per cent stake in REpower and now plans to buyout the remaining less than five per cent shareholding.— PTI

Havells India opens office in Dehradun
Dehradun: Havells India on Thursday inaugurated its new branch office in Dehradun in order to tap vast opportunities in Uttarakhand, which is witnessing huge infrastructural and industrial development. The office was inaugurated by Rakesh Mehrotra, Regional Head, North, Havells India Ltd. — TNS

S Tel tariff plan
Shimla: S Tel has announced a series of attractive plans under a common umbrella of “Chote Miyan Bade Miyan” to offer uncomplicated and hassle-free tariffs for its subscribers in Himachal Pradesh. All products under the first range ‘Chote Miyan’ will have a validity of 30 days and talk time of Rs 10. Similarly, the products under the ‘Bade Miyan’ range will have a validity of 90 days and talk time of Rs 30. — TNS