The Tribune, Chandigarh, India

	Demand to fall on RBI rate hikes Government will take decisions to compliment RBI action in tackling inflation: FM Sanjeev Sharma/TNS New Delhi, July 27 The rate tightening cycle is India over the last 15 months is probably the steepest in the world with Reserve Bank of India (RBI) among the most aggressive central banks. Subbarao’s message through yesterday’s hike was that inflation was not seeing signs of abating, growth has moderated has not yet plunged and the government is not doing enough to tackle inflation by fiscal and policy measures, so the RBI needs to step in. Incidentally, the RBI Governor’s term is expiring in the next few months and unless he gets an extension, this may have been Subbarao’s last monetary policy statement. The impact of the RBI’s aggressive rate hikes will hurt growth, industrial activity, new investments, credit demand, consumer demand and dampen the mood in the markets. Analyst say that the RBI has clearly chosen to attack inflation while choosing to give up growth in some measure. “Taking this into account the policy rate has gone up by 4.75 per cent in 15 months – by far the highest rate hike globally, says Sushil Jiwarajka, President, Infrastructure and Logistics Federation of India (ILFI). Dipankar Mitra, analyst with Motilal Oswal says the macro-economic situation in the current year was similar to that in the mid-nineties. “On an assessment of growth, inflation and policy rates, FY12 appears close to the mid-nineties when high inflation and high policy rates co-existed with moderately high growth”, says Mitra. RBI is clearly trying to curb demand to control inflation. Says D K Aggarwal, chairman, Sanlam Investments, “We expect the pressure would be felt on sectors like automobile, realty, banking. RBI in a conscious effort is trying to calm down the private consumption demand by increasing the policy rates thereby discouraging producers to pass on the higher cost”. With interest rates rising continuosly, a problem area is raising capital companies are switching to external debt. CII said that high domestic interest rates are driving industry to borrow in foreign currency, which could potentially be risky in the event of exchange rate fluctuations. Adds Aggarwal, “We have seen that corporates are moving to non-banking resources for their credit needs especially long-term with external commercial borrowings as dollar denominated borrowing now costs much less compared to high interest rates in India. The ratio of bank credit and non-bank credit now stands at 51:49 for the 1st quarter compared to 64:36 in the corresponding period”. Industry is worried that growth will slow down so much that it may become difficult to revive it again. CAPITAL ISSUE? CII has said that high domestic interest rates were driving industry to borrow in foreign currency, which could potentially be risky in the event of exchange rate fluctuations.
	HCL Q4 net up 52%; ready for queries on Murdoch row Sanjeev Sharma Tribune News Service New Delhi, July 27 The country’s fourth largest software company, HCL Technologies today said that it was co-operating with the UK authorities in the investigation into the phone hacking scandal at the News of the World. Anant Gupta, president, infrastructure, HCL Technologies told The Tribune that the company had been very transparent and was working with the UK authorities. He said that HCL does not store email data in India or outside for News International. News International is the company that owned News of the World which was shut down following the phone hacking scandal. News International is the newspaper arm of News Corp owned by Rupert Murdoch. He said the company was working with the London Metropolitan Police in their investigation. He added News International was a client and HCL did have a IT contract. He also said that it will answer any queries that came its way from UK Parliament. There have been reports that the HCL Tech was facing queries on some e-mails that may have been deleted at New of The World HCL posted a strong quarter with consolidated profit rose to Rs 511 crore for April-June, compared with a profit of Rs 337 crore a year ago. Revenue rose 27.5 percent to Rs 4,300 crore, on an average exchange rate basis. Gupta said that the various geographies, verticals and horizontals had shown strong growth. He said the company invested in the market at the right time and was taking market share from other software companies. He said there was a lot of skepticism last year when HCL Tech was investing since the macro situation was not good. However, he said the company strategy had yielded dividends. The company was now getting a large number of deals and booking revenues from the churn in the industry. Gupta said that 55-70 per cent of business was coming from the churn as clients were switching from the traditional incumbent vendors, both Indian and foreign.
	Noida authority, builders woo farmers with sops, incentives Greater Noida, July 27 With the high court setting the deadline for August 12, the Greater Noida Industrial Development Authority (GNIDA) and builders today initiated frantic negotiations with farmers, who have challenged acquisition of their land, offering them annuity, cash incentive and other sops. The authority held talks with affected farmers and their leaders and briefed them about the new rehabilitation policy and benefits, GNIDA officials said. The Allahabad High Court had yesterday said the farmers had an option to reach out-of-court settlement by August 12 after which their petitions would be taken up by a larger bench. Beside land compensation under the new scheme, farmers will get annuity of Rs 23,000 per acre for 33 years, the officials said, adding that the farmers can also collect one-time payment if they desire. “The rate will be Rs 2.76 lakh per acre,” they said. A majority of the farmers feel that the land is now unfit of cultivation but were wary of negotiating with the builders. Builders, whose projects now face an uncertain future, deputed their agents to contact the farmers. The builders have offered Rs 2,000 to Rs 3,000 per sq m of additional amount. “However, it is only the authority which can solve our abadi land disputes so the farmers want the negotiations to be held through the body instead of directly with the builders,” said Sukhvinder Bhatti, a farmer. “We do not want to create hindrance in the development of the city. We too want development. But our main concern is that we should get share in profit,” said another farmer Raj Kumar. A majority of farmers in villages other than from Shaberi have taken land compensation through mutual agreement which they had spent on marrying their children or buying luxury cars and building houses. “Now they will prefer the option of settlement as they cannot refund the money,” said another farmer Tej Singh. Acquisition of more than 3,000 hectares of land, spread across nearly a dozen villages, has been challenged.— PTI THE REVISED PROPOSALS Under the new scheme, besides land compensation farmers will get annuity of Rs 23,000 per acre for 33 yrs A majority of the farmers feel that the land is now unfit of cultivation but were wary of negotiating with the builders Builders have offered Rs 2,000 to Rs 3,000 per square metre of additional amount
	Toyota to invest Rs 1,650 cr in incresing capacity New Delhi, July 27 Japanese car maker Toyota today said that it would make an investment of nearly Rs 1,650 crore to ramp up production capacity at its Indian joint venture. Company officials said Toyota Motor Corp, present in India through a joint venture with the Kirloskar Group as Toyota Kirloskar Motor (TKM), will invest Rs 898 crore to expand production capacity at its two plants by 2013. Another group firm will put in an additional Rs 750 crore to set up aluminum casting and machining lines by 2014. Its production capacity would increase by one lakh units to 3,10,000 units per year and would also help in increasing the localisation of components by 2014. T TKM is at present expanding the capacity at the two facilities in Bangalore to 210,000 units from 150,000 lakh units by 2012. The production enhancement has been necessitated by the response the company has received to its recent sedan launch of Etios and hatchback Etios Liva, officials said. The first plant will manufacture multi-purpose vehicle Innova and sports utility vehicle Fortuner. The second plant will roll out sedans Etios and Corolla Altis and hatchback Liva, the company said. TKM MD Hiroshi Nakagawa said: “In line with the growing demand for our vehicles, we have decided to further expand production. Etios and Etios Liva demand has been encouraging and we are gearing up to cater to a larger number of new customers.”
	Ambition of having steel plant in India remains a dream: Mittal New Delhi, Jul 27 He may be the world's largest steel producer but Lakshmi Mittal's dream to have a plant in his homeland (India) continues to be a distant dream, thanks to regulatory hurdles. "In India, we have got couple of ambitions and they are all ambitions at this time because the progress is slow," Mittal said in a conference call with reporters, while speaking on ArcelorMittal's second quarter results. Expressing hopes that some day his plans will be realised and his company ArcelorMittal will begin construction of steel plants in the country, he, however, further said, "I do not know how and when." After its failure to make any headway in setting up two large plants of 12 million tonnes per annum capacity in Jharkhand and Orissa, ArcelorMittal shifted its strategy in the country last year to setting up smaller projects with potential investment of $1.5-$3 billion range. The Jharkhand and Orissa plants were supposed to attract an investment over $10 billion each. However, the Lakshmi Mittal's firm is now banking on its Karnataka project, where it has plans to set up steel mill of 6 MTPA in two phases, along side a captive 750-MW power plant. "We continue to march slowly... I hope it will be slow and steady (progress)," Mittal said, adding, "We are making progress in India." Land acquisition has been sailing smoothly for the Karnataka plant, which entails an investment of Rs 30,000 crore ($6.5 billion), an official of the company had said earlier this month. The official had further said that about half of the required land has been acquired by the Karnataka Industrial Areas Development Board and ArcelorMittal was waiting to get possession. The company, which follows calender year, today posted a 10 per cent dip in net income (profit) for the second quarter ended June 30, 2011 at $1.535 billion against a profit of $1.706 billion.— PTI
	Vodafone, Idea raise pre-paid tariff by 20% New Delhi, July 27 Two leading mobile operators, Vodafone Essar and Idea Cellular, are understood to have increased pre-paid tariffs by up to 20 per cent, in line with the recent Bharti Airtel move. According to industry sources, the tariffs were increased few days ago. A Vodafoane spokesperson declined comment. Idea officials said the company was in the silent period due to pending quarterly financial results and did not offer any comment. Vodafone and Idea are pan India operators and have hiked pre-paid tariffs in certain circles. The details of new tariff could not be obtained. Last week, Bharti Airtel, the largest telecom operator by subscriber base, had raised rates for pre-paid users by 20 per cent for certain packages across several circles.— PTI
	Review cotton export cap: Badal to PM Chandigarh, July 27 Punjab Chief Minister Parkash Singh Badal today sought the personal intervention of Prime Minister Manmohan Singh for lifting the cap on cotton exports in the 2010-11 Kharif marketing season. Badal has sought permission for additional exports of about one million bales to ensure a remunerative price to cotton growers for their produce during the ensuing 2011 kharif marketing season. In a letter to the PM, Badal apprised him that Punjab is one of the major cotton producing states of the country and it produces about 20 lakh bales of cotton annually. The Cotton Advisory Board of India estimates, total cotton production in the country during 2010-11 at 339.3 lakh bales, while domestic consumption is pegged at 240 lakh bales.— PTI
	Corporate Results OIL net up 70% to Rs 849 cr on higher prices, raised output New Delhi, July 27 State-owned Oil India Ltd (OIL) today reported 69.55 per cent jump in its net profit at Rs 849.961 cr in the April-June quarter, over the same period a year ago, on back of increased output and higher oil prices. During the same period a year ago the company's net profit stood at Rs 501.11 crore, the company said. The company got a gross price of $116.32 per barrel for 0.957 million tonnes of crude oil it produced in Q1. This was higher than $78.10 per barrel gross billing in the same period previous year. OIL gave a discount of $56.77 per barrel in April-June quarter as compared to $28.42 a barrel earlier. Canara Bank net drops 28% Canara Bank today posted 28 per cent decline in net profit to Rs 725.8 crore for the first quarter ended June 30, 2011.Total income of the bank increased by 31 per cent during the period to Rs 7,707.5 crore from Rs 5,894.8 crore in the corresponding year-ago period. Dabur net up 20% Dabur India’s quarterly profit rose by a fifth aided by overseas performance that helped counter inflation pressures in the domestic market. Dabur reported a consolidated profit of Rs 128 crore for April-June quarter on a sales of Rs 1,200 crore that rose 31.5 per cent. Its standalone profit for itsbusinesses in India rose only 2 per cent to Rs 91.10 crore. The overseas acquisitions of Turkey's Hobi Kozmetik Group and Namaste Laboratories of the US in the second half of last year boosted sales and profits at Dabur. "We are closely watching the inflation situation...and monsoon," CFO S Raghunathan told Reuters. Birla Corp net falls 5.41 per cent Net profit of Birla Corporation Limited of the M P Birla group decreased by 5.41 per cent at Rs 111.88 crore in the first quarter of this financial year over the corresponding period last fiscal. Turnover of the company also declined marginally by 1.51 per cent at Rs 642.12 crore in the quarter as compared to Rs 651.99 crore in the same quarter a year ago.— Agencies
	Top-level staff crunch hits SEBI New Delhi, July 27 Market regulator Securities & Exchange Board of India (SEBI) , which regulates markets doing average business of over Rs 1 lakh crore a day and assets totalling over Rs 70 lakh crore, is facing a major staff crunch in its top management team. The market regulator is left with just about half the strength in its top management, comprising whole-time board members and executive directors, due to retirements of previous officials and delay in fresh appointments. Normally, SEBI board has three whole-time members and one chairman, in addition to two independent members and nominees of RBI, Ministry of Finance and Ministry of Corporate Affairs. However, SEBI is now left with only one whole-time member, after the retirement of two whole-time members — M S Sahoo and K M Abraham — earlier this month. In addition, the terms of three Executive Directors — K N Vaidyanathan, J N Gupta and Pradyna Saravade— also ended earlier this month and the replacements have not been appointed as yet. Another Executive Director, J Ranganayakulu, will also complete his tenure next month. Till last month, Sebi had a total of eight EDs, out of which term of three has already ended and one more would complete his tenure next month.— PTI
	Coal India gains 7% on overseas mine buy buzz Mumbai, Jul 27 Bucking the weak trend in broader market, Coal India shares today spurted by nearly 7 per cent on reports that the state-run coal producer is in advanced stages of talks to acquire about 30 per cent stake in an Indonesian coal asset. The stock settled 6.72 per cent higher at Rs 399.15 on the Bombay Stock Exchange. During the day, the stock surged by 7.21 per cent to touch a high of Rs 401. On the NSE the stock settled at Rs 398.90, up 6.67 per cent from its previous close. Analysts said that the acquisition buzz has led to attract investors towards the stock which saw a good trading session despite a weak broader market trend. The firm had started negotiations with Indonesia's Golden Energy Mines for buying asset.— PTI