The Tribune, Chandigarh, India

	Sensex tumbles to 2-yr low despite rate hike pause Nifty closes below 4,700 for first time since 2009 Mumbai, December 16 Erasing initial gains, the Bombay Stock Exchange benchmark Sensex today fell to 2-year low, losing 345 points, as RBI expressed concerns over growth but did not ease liquidity, although it paused lending rate hike. Initially, Sensex gained nearly 150 points but fell sharply to end with a loss of 345.12 points, or 2.18 per cent to close at 15,491.35, a closing level last seen on November 3, 2009. Similarly, the broad-based National Stock Exchange index Nifty lost 92.75 points to 4,651.60. The last hour selling followed the RBI raising the flag on growth concerns, but leaving CRR unchanged. Marketmen said investors were expecting RBI to lower it from 6% to infuse liquidity in the market. "Growth is clearly decelerating. This reflects the combined impact of several factors — the uncertain global environment, the cumulative impact of past monetary policy tightening and domestic policy uncertainties," the RBI said in its review. Sensex heavyweight Reliance Industries lost 3.43% and Larsen & Toubro 5.33%. SBI was down 3.67% and Sterlite Industries 4.28%. Others losers included BHEL, Coal India, DLF, HDFC Bank, Hero MotoCorp, ICICI Bank, TCS, Tata Steel and Tata Power. All the 13 sectoral indices ended with losses of up to 4.36 per cent, while 27 of the 30 BSE Sensex stocks closed with losses. — Agencies
	India Inc hails move to hold key rates New Delhi, December 16 Welcoming the Reserve Bank of India's decision to put a pause on the rate hike, India Inc on Friday said the central bank's move would help improve business sentiments and boost industrial output and growth. "The indication of a reversal in rate cycle is a welcome step and is a clear departure from the monetary tightening phase," said Rajiv Kumar, secretary general of the Federation of Indian Chambers of Commerce & Industry (FICCI). In its midquarter review of the monetary policy, the Reserve Bank kept key rates unchanged Friday after 13 successive hikes since early 2010. Confederation of Indian Industry (CII) director general Chandrajit Banerjee said the RBI's move would help regain the growth momentum. "The RBI's guidance that monetary policy actions from now on will respond to the slowdown in growth is reassuring. However, the policy does not reflect the urgency of the situation where industrial growth is contracting and the investment outlook is subdued," he said. Banerjee urged the central bank to reverse its monetary tightening policy by cutting key policy rates in a bid to boost industrial output. "Given that the need for improving sentiments and to stimulate growth is urgent, RBI could have used the current opportunity to send strong signals that growth will not be sacrificed further even while inflation is being controlled. In any case, inflation has started to soften, which is most welcome," he said. The central bank's review came against the backdrop of India's annual rate of inflation falling to 9.1 percent in November, while the food inflation fell to 4.35 percent for the week ended Dec 3. But factory output declined 5.1% in October. — IANS
	‘Incredible’ India? Hardly, say business leaders New Delhi, December 16 Frustrated executives while away time in five-star hotels waiting for deals that never come, and civil servants play video games in their offices — growing signs of the reform limbo and crisis of confidence behind India's economic malaise. Policy paralysis, corruption scandals and a government fearful of political backlash to any bold moves have combined with the global slowdown and worsening domestic finances in the last few months to derail Asia's third-largest economy. India now faces the worst-case scenario that was touted earlier this year — stubbornly high inflation, slowing growth, a mounting fiscal deficit, a rupee that risks freefall — and both policymakers and the Reserve Bank of India have few levers to fix it. For years, Indian entrepreneurs have boasted they can do business despite the government — adeptly working around potholed roads, clogged ports and reams of regulatory hurdles. But government inertia —what many politicians see as "playing safe" — is taking its toll on corporate confidence. Entrepreneurs once feted in Bollywood movies as national heroes, whose million-dollar homes and jetset lifestyles were a beacon for millions of India's aspiring middle classes, no longer seem capable of driving the $1.6 trillion economy. "We may have seen phases of economic growth slower than this in the two post-reform decades, but never has the entrepreneurial mood been so low," an editorial in a leading national newspaper said. It's echoed across offices of business leaders from Mumbai to Delhi. One foreign executive described increasingly strained telephone conversations over the past year with his US-based CEO as deals became mired in red tape and ministerial inertia. "They always understood that India was difficult to do business in. But not this difficult," said the executive, who asked not to be named as he was not authorized to speak for his company. The banking sector is now under strain from bad loans. — Reuters
	RBI saves Indian stock market's trillion dollar tag, for now New Delhi, December 16 The Reserve Bank of India’s policy action may have failed in containing the Sensex slide to a two-year low, but its intervention in rupee movement has helped Indian stock market retain its trillion-dollar tag, at least for now. The market went into a tailspin Friday as the central bank's decision to keep the interest rates unchanged did not help the sagging investor sentiment. In the process, the value of Indian stock market, measured in terms of the collective value of all listed shares, fell to Rs 54,11,301.50 crore — which is just over US $1 trillion level at current currency rates. In dollar terms, the Indian market would have lost its trillion dollar valuation tag, if the rupee had managed to at least hold onto the record sub-54 level it hit Thursday. — PTI
	Rupee slide halts after RBI steps in Mumbai, December 16 A day after the RBI's swift move to stem the fall of rupee, the domestic currency notched up a smart gain of 94 paise settle the day at 52.70/71 against the dollar on fresh selling of the US currency. In early trade the rupee shot up by a whopping 143 paise to 52.21 at the interbank foreign exchange. Moving in tune with stock markets, it, however, lost some of the gains later in the day. Dealers said fresh selling of dollars by banks in view of restrictions imposed by the RBI helped the rupee surge against the dollar. — PTI
	Hard to give timeframe for ONGC, BHEL divestment: Govt Beijing, December 16 The government said Friday it could not give a timeframe for the completion of disinvestment process in public sector firms ONGC, BHEL and NBCC because of various factors including market conditions. "Disinvestment proposals of Oil & Natural Gas Corp, Bharat Heavy Electricals Ltd and National Building Construction Corp are at various stages of implementation. "It is difficult to give any timeframe for completion of the transactions as the same would depend on a number of factors like appointment of independent director, preparedness of the company as well as the market conditions," minister of state for finance SS Palanimanickam said in a written reply in Lok Sabha. He added during 2011-12 disinvestment of 5% paidup capital of Power Finance Co has been completed and government has realized Rs 1,144.55 crore from the proceeds. Besides, the government has approved disinvestment of 5% stake in ONGC, 5% in BHEL and 10% in NBCC, Palanimanickam said. "Realization from sale of shares would depend on the market conditions at the time the sale takes place, therefore, it may not be realistic to estimate the amount to be realised," he added. To another query, he said the government has no plan to abolish the securities transactions tax (STT), levied on equity trades. He said the total collection of STT in financial year 2010-11 was Rs 5,985.07 crore, "which would represent the estimated revenue loss if there is no levy of STT". At present, the rate varies from 0.025% to 0.25%, depending upon the type of security traded and transaction — whether sale or purchase. To yet another query, he said that total investment by foreign institutional investors till November this fiscal stood at Rs 8,503.7 crore. Replying to another written query on the Public Procurement Bill, Palanimanickam said: "The government intends to introduce the bill in Parliament during the current financial year." The bill intends to regulate public procurement by all ministries and departments of the central government, central PSEs, autonomous and statutory bodies controlled by the central government and other procurement agencies. — PTI
	DoT to issue show cause notice to telcos New Delhi, December 16 The department of telecom is in the process of issuing show cause notices, asking as to why 35 licences of various firms should not be terminated for failing to meet rollout obligations, Parliament was informed Thursday. "Show cause notices for termination of 16 UAS (unified access services) licenses have been issued for violation of the rollout obligations. The government is in the process of issuance of the notices for termination of UAS licenses to another 35 licenses," minister of state for communications & IT Milind Deora said in a written reply to the Lok Sabha. He said the Telecom Regulatory Authority of India has recommended cancellation of 53 telecom licenses and also recommended to seek legal opinion once again on the issue of cancellation of another 30 licenses. Without naming them, Deora said the case of two companies recommended by TRAI for cancellation is subjudice. The licences recommended for cancellation belong to Aircel, Dishnet Wireless (now Aircel), Etisalat DB, Idea Cellular, Sistema Shyam, Spice Communications, Vodafone Essar Spacetel, Loop Telecom, Videocon and Unitech Wireless, he added. However, he did not commit any timeframe for a final decision on cancellation of licenses. "For taking a decision on TRAI’s recommendation the opinion of other ministries/departments is also required”, he said. — PTI
	RIM Q3 net sales slump 71% on service outages Waterloo/New Delhi, December 16 BlackBerry smartphones-maker Research In Motion has reported a nearly 71% decline in net income to $265 million for the third quarter ended November 27, 2011, primarily due to the recent service outage that hit users worldwide. The company had posted a net income of $911 million for the three months ended November 27, 2010, Research In Motion (RIM) said in a statement. RIM attributed the substantial decline in net income to the widespread internet services outage in October, which hit BlackBerry users across the world, besides the previously announced charge on its unused PlayBook inventory. RIM has also posted lower-than-expected revenues of $5.2 billion in Q3, down 5.45% from the same period last year. — PTI
	Air India debts mount to Rs 43,000 crore Trivandrum, December 16 Noting that Air India is passing through a deep crisis with its total debt touching a whopping Rs 43,000 crore, the government on Friday expressed confidence that it would be able to wipe out the debts with active cooperation of management and employees. AI has also a net loss of Rs 18,000 crore accumulated in the past three to four years, Civil Aviation Minister Vayalar Ravi said. Giving details of the carrier's indebtedness, he said AI's outstanding loan stood at Rs 20,000 crore on account of purchasing new aircraft and Rs 20,000 crore for taking loan for operational purposes. However, Ravi expressed confidence the government would be able to overcome the crisis and wipe out its debts with the active co-operation of the management and employees. — PTI
	Gold dips to 6-wk low below Rs 28k New Delhi, December 16 Gold fell below the Rs 28,000 per 10 grams level for the first time in six weeks on Friday, losing Rs 375 to Rs 27,765 per 10 grams on sustained selling amid reduced offtake at higher levels and a weakening global trend. Falling for the 5th straight day, gold prices declined to Nov 3 levels as stockists offloaded positions. — PTI