The Tribune, Chandigarh, India

	Govt confident of raising Rs 40k cr via stake sale New Delhi, December 27 The government is confident it will meet its target of raising Rs 400 billion (40,000 crore) this fiscal year by selling shares in state-run firms, a senior finance ministry official with direct knowledge of the matter said. The government is working on a plan to raise funds by pledging stakes held in tobacco-to-hotels group ITC, industrial conglomerate Larsen & Toubro and Axis Bank, the senior official said on Tuesday. These funds would be placed with a new investment vehicle that would buy back the government's stake in state-run firms, said the official, who spoke on the condition of anonymity. The shares in ITC, Larsen & Toubro and Axis Bank are held through the Specified Undertaking of the Unit Trust of India (SUUTI). "The whole impression that SUUTI (route) will not materialize is wrong. We are still working on the modalities," the official said. "We’re going to meet the disinvestment target." So far this fiscal year, New Delhi has managed to raise only about US $250 million through the sale of a stake in Power Finance Corp in May. With the stake sale programme failing to take off and tax revenue under pressure from slowing economic growth, worries about India's public finances are growing. On Monday, the government announced to sell Rs 150 billion of bonds on December 30 in an unscheduled auction to fund an "emerging cash requirement". The official said the unscheduled auction is part of the borrowing for the second half of the fiscal year that ends in March 2012, which has been advanced. In September, the government increased its borrowing target for the second half of the fiscal year to Rs 2.2 trillion from the budgeted Rs 1.67 trillion, but said this was unlikely to affect the fiscal deficit target of 4.6 percent of gross domestic product. The financial markets are not so sure. A Reuters poll last month showed that the fiscal deficit for the current fiscal year is widely expected to reach 5.5 percent of GDP, which would force the government to borrow an extra Rs 353 billion. "No doubt, there is pressure on the fiscal deficit front. But we are still to decide about our borrowing requirements," the official said. "Once we work that out, we will notify it." — Reuters
	Downturn temporary, Indian economy will rebound: FM Tribune News Service New Delhi, December 27 Finance Minister Pranab Mukherjee said Tuesday the Indian economy would soon revert back to the path of higher growth trajectory. He added instructions had been issued to all the ministries and departments to adhere to their expenditure ceilings. Addressing a meeting of the consultative committee attached to the finance ministry, Mukherjee said the present downturn was only temporary. Elaborating on the economic outlook, he said the world economy was going through turbulent times. “The eurozone crisis, the downturn in external demand resulting in slowdown in exports, currency volatility and the current account deficit, among others, have also affected the Indian economy”, he said. “It was, however, reassuring to note that the pause in the Indian growth story was brief”, Mukherjee added. He said food inflation had come down to 1.8% and there was moderation in inflation in general and the savings rate had also gone up. Members of the consultative committee participated in the discussion and demanded that efforts should be made to stop the migration of agricultural labourers from villages to cities. In order to achieve this, setting-up of agrarian industries in rural areas should be encouraged, they said. Some members said efforts should be made to reduce agriculture’s dependence on the monsoon. “Enough incentives should be given to produce oilseeds and pulses indigenously”, they added. They said credit to agriculture should also be increased and cash subsidy should be given directly to the beneficiaries. Some members demanded there was a need to bring in foreign direct investment to “give justice to farmers”. “The central government should arrive at a proper mechanism in close coordination with state governments. Some key sectors like power, civil aviation, health, infrastructure and telecommunications need priority and higher investments”, they said.
	New telecom M&A norms likely to be in place soon Girja Shankar Kaura/TNS New Delhi, December 27 The new merger and acquisition norms for the telecommunications industry could soon be in place, leading to consolidation in the sector, with the highest decision making body in the industry accepting the Telecom Regulatory Authority of India’s proposals on the issue. While not ruling out levying a one-time fee on operators holding spectrum beyond 6.2 megahertz and favouring an auction-based pricing for future spectrum allocations, the Telecom Commission has accepted recommendations to relax rules for mergers and acquisitions in the sector and allow spectrum sharing among telcom operators, paving the way for consolidation in the 14-player market. The TRAI had earlier proposed steep increases in spectrum prices and a one-time fee on spectrum beyond 6.2 megahertz, which would see bigger carriers like Bharti Airtel and Vodafone pay crores of rupees to the government. They may have to shell out more than Rs 17,500 crore as one-time fee on excess spectrum, based on recommendation of a fee of Rs 4,571.87 crore on each mega hertz beyond 6.2 MHz. "We will be furnishing our recommendations to the government now and after that those items, which need cabinet approval, will go to the cabinet," Chandrashekhar said after a meeting of the commission on Tuesday. Mergers and acquisitions will get automatic clearance if the combined market share of the new entity is less than 35% and spectrum holding is less than 25%. TRAI had proposed that companies should be allowed to merge if their combined subscriber or revenue market share does not exceed 60 per cent, although its consent would be required for any merger that would create a company with a market share of between 35 and 60 per cent. The Telecom Commission has also decided to fix license fee for operators at a uniform eight per cent of their revenue, from a variable fee of six to 10 per cent currently, Chandrashekhar said, adding the new fee would be implemented in two phases. The commission has also "by and large" accepted the regulators proposal to allow firms to share radio spectrum, Chandrashekhar said. The policy maker will finalize all other decisions within a week, Chandrasekhar said. The Telecom Commission will then send all these decisions to the Telecommunications Minister Kapil Sibal and subsequently it will see the cabinet's nod to implement them.
	Gold tumbles on weak global cues, down by Rs 200 New Delhi, December 27 Gold tumbled on Tuesday by Rs 200 to Rs 27,840 per 10 grams on fresh selling by stockists in tandem with a weakening global trend and fading demand. Silver followed suit and lost Rs 300 to Rs 52,200 per kg on reduced offtake by industrial units and jewellers. The trading sentiment turned bearish after gold fell to its lowest level in a week in global markets, dropping alongside stocks and other commodities on concern that Europe's debt crisis may escalate and weigh on global growth. In Singapore, gold fell below the crucial US $1,600 level by losing 1 per cent to $1,591.20 an ounce, the lowest since December 20 ,and silver by 1.3 per cent to a one-week low of $28.73 an ounce. — PTI
	Car sales will bounce back in 2012: Deloitte New Delhi, December 27 Reversing the declining trend of the recent months, car sales are likely to bounce back as inflation and interest rates are expected to come down in 2012, according to research firm Deloitte. Passenger car sales have fallen in the past few months due to various poor macroeconomic factors such as restrained growth of real disposable income, high interest rates and rising fuel prices, said the Deloitte report, Driving Through BRIC Markets — Lessons for Indian Car Manufacturers. "Car sales have declined, registering de-growth since July 2011, compared with the previous year and is not expected to recover unless the macroeconomic factors become attractive. In fiscal 2011-12, car sales are expected to grow by a meagre 2-3 per cent against 30 per cent in 2010," it added. The report pointed out that fuel prices have increased by up to 34 per cent since deregulation in 2010. Besides, persistent inflationary pressures have resulted in continuous rise in lending rates by banks and they are around 13-14 per cent for new car loans. Deloitte said India has very low penetration of cars and hence sales are bound grow in future. — PTI
	TRAI seeks views on short-range communications spectrum Tribune News Service New Delhi, December 27 The Telecom Regulatory Authority of India has floated a consultation paper seeking views of the stakeholders on spectrum allocation for short-range communication technologies used for residential and enterprise intra-telecommunication or in limited areas where cellular network is not available. In the consultation paper brought out by it on Tuesday, the telecom regulator has sought the industry's view on whether telecommunications system (CTS) technologies could coexist with the existing cellular systems. The consultation paper has been brought out as the regulator is of the view that unlike the landscape of India's telecommunications network, market growth has not been observed in residential and enterprise intra-telecommunications or CTS in the country due to limited wireless options available. In a statement issued here, TRAI said: "For intra-telecommunication requirements for residential and enterprises, wireless platform is the most widely used solution which also complements wireline networking solutions”. “This consultation paper discusses the issues of current allocation of spectrum for telecommunications system technologies," it added. A majority of solutions used in telecommunications system technologies is in 2.4 Ghz spectrum. This spectrum band is also used to operate wireless Local Area Network for computing devices. TRAI has also sought discussion on issues like current allocation of spectrum for telecommunications system technologies, requirement for identification of additional band of spectrum and the possibility of delicensing of 1800-1900 or 1910-1920 MHz bands for low power CTS applications. At present, some cellular operators players have been allocated a certain amount of spectrum in 1800 Mhz for 2G services and 1900 Mhz for 3G services. The telecom regulator has asked stakeholders to provide their written comments on the issues raised in the consultation paper by January 31 and counter comments on the comments by February 10, 2012.
	SBI, other banks hike NRE deposit rates New Delhi, December 27 The country's largest lender, State Bank of India, and a few other banks including Kotak Mahindra Bank, on Tuesday announced a sharp hike in interest rates offered on nonresident external (NRE) deposits. SBI raised the interest rates on fixed deposits by non-resident Indians of less than Rs 1 crore with a maturity of one to two years to 9.25% as against 3.82% earlier. However, NRE term deposits above Rs 1 crore and of the same maturity will attract 9% interest with effect from January 1, 2012, SBI said in a statement. It added term deposits between 2-3 years and 3-5 years' tenure will also earn 9.25% interest. The revised deposit rates will apply only to fresh deposits and on renewal of maturing deposits, it said. No interest is payable if the deposit is withdrawn before one year, it said, adding that in other cases of premature withdrawal, the interest paid shall be 0.5% below the rate applicable for the period the deposit has remained with the bank. Banks are offering such high rates because of the sharp depreciation of the rupee in the past few months. There has been a considerable spike in inflows since the rupee fall, one analyst said, opining that such high rates will not last long. Mumbai-based Kotak Mahindra Bank has also hiked interest rates on NRE deposits with a maturity of one to two years to 9.25% with effect from today, while the rate for deposits of 2-3 years' tenure will be 9%, the bank said. Another lender, Federal Bank also revised interest rates on NRE deposits of select maturities. — Agencies
	Sensex sheds 97 pts; TCS, Reliance down New Delhi, December 27 In lacklustre trading, the stock market on Tuesday suffered mild losses with a 97-point decline in its barometer Sensex as bluechips like Reliance Industries, TCS, State Bank of India and Tata Motors turned weak. The 30-share benchmark index settled at 15,873.95 points, down 96.8 points or 0.6%, after moving in a narrow range for most of the trading session. Experts said that the trading was lacklustre in the absence of any major global cues, as many world markets are closed and the trend was also negative in a few Asian markets like Japan, South Korea, China and Taiwan. — PTI
	US corporations gear up for major tax battle Washington, DC, December 27 Huge US corporations are forming lobbying groups to try to influence what could become the hottest Congressional debate over comprehensive tax reform in a generation. The newest organization calls itself the Tax Reform Coalition. Backed by companies including American Express Co and Xerox Corp, it filed paperwork with Congress last week to register as a lobbying group. The coalition's registration suggests it will have a broad portfolio, lobbying on "issues related to corporate tax reform," but no one involved would answer questions on Friday. It joins an increasingly crowded playing field of lobbying groups and politicians strategizing for what Washington will look like in 2013 following national elections in November 2012. — Reuters
	Tata Power to buy out BP Energy’s stake in JV New Delhi, December 27 The price of compressed natural gas may be hiked by up to Rs 2 per kg in the next few days as rupee devaluation has pushed up input cost. City gas retailers including Indraprastha Gas Ltd, which supplies CNG to automobiles and piped cooking gas to households in the national capital, are likely to announce fuel price revision over the weekend, sources privy to the development said. IGL had last raised CNG in Delhi by Rs 2 per kg to Rs 32 per kg from October 1. The sources said the hike was necessitated because IGL and other city gas firms were being forced to buy expensive imported LNG as supplies. Also, the rupee depreciation has made raw material — natural gas from Reliance, state-owned GAIL and imported LNG — even costlier. — PTI