New Delhi, February 14
The moderation in inflation continues with headline inflation falling to an over two-year low of 6.55 per cent in January with expectations rising that the Reserve Bank of India may weigh this and start cutting interest rates from April.

However, experts are expecting inflation to move up again from April as the base effect and seasonal factors tide over. Headline inflation, as measured by the wholesale price index (WPI), had stood at 7.47% in Dec 2011. It was 9.47% in January last year. The latest numbers are the lowest since Dec 2009 when headline inflation was at 7.15%.

Meanwhile, Finance Minister Pranab Mukherjee said he expected inflation at March-end would be closer to 6%. “I’m now confident moderation in inflation would continue in the coming months, though softening in the prices of manufactured goods despite the rapid decline in nonfood primary inflation, may be more gradual”, he added.

There has been a significant decline in January food inflation, which is negative at (-)0.52% for the first time in the present round of inflation. The manufactured inflation has declined to 6.49% from 7.41% in the preceding month. Inflation in fuel and power group of items has also declined, though only marginally.

Crisil in a note said that core inflation (non-food manufacturing) has now declined for the second consecutive month. While the impact of past rate hikes on demand slowdown has begun to reflect in overall inflation, households’ inflation expectations continue to remain high. According to the RBI’s latest survey, over 76% of households expect inflation towards the end of 2012 to be higher than a year ago. The expectations will come down only when inflation stabilizes at low levels.

Crisil Research’s forecast for WPI inflation for 2012-13 is at 5.8%. Lower inflation vis-à-vis 2011-12 is mainly due to a high base and low pricing power of corporates (led by sluggish domestic demand).

‘9% GROWTH MUST’: Inaugurating the 44th annual session of the Indian Labour Conference on Tuesday, Prime Minister Manmohan Singh underlined the significance of attaining a nine per cent growth rate to create greater job opportunities and to “get rid of the chronic curse of poverty.”

Mumbai, February 14
Tata Motors reported a stronger-than-expected 40.5 percent rise in quarterly profit as strong sales at Jaguar Land Rover more than made up for weakness in its home market, sending up its stock to its highest level in more than a year.

Rising demand for luxury models, especially in China and other emerging markets, has swelled Tata's profits over the past few quarters as demand for cars waned in India.

Tata Motors, part of the salt-to-software Tata conglomerate, said consolidated net profit rose to Rs 34.06 billion in the three months to December 31 from Rs 24.24 billion a year earlier. Revenue rose 44% to Rs 452.60 billion.

Analysts on average had forecast a net profit of Rs 26.13 billion on revenue of Rs 416.73 billion, according to Thomson Reuters I/B/E/S.

Revenue at Jaguar Land Rover rose nearly 41% to £3.75 billion, the company said, led by surging demand for its new Range Rover Evoque SUV. Tata, which also makes the ultra-cheap Nano, bought Jaguar Land Rover in 2008 from Ford Motor Co for US $2.3 billion.

Net profit at the company's India business dropped by more than half to Rs 1.74 billion, it said, with higher costs and spending on marketing squeezing margins.

Tata Motors assembles some Land Rover models in India for the local market, and has said it is exploring the possibility of manufacturing other models for export.

Shares in Tata Motors, which the market values at about $15 billion, rose as much as 5.6% to Rs 272.70, their highest level since December 2010, before closing up 3.7% at Rs 267.95. — Reuters

Gurgaon, February 14
Petroleum & Natural Gas Minister S. Jaipal Reddy said Tuesday the finance ministry should compensate oil marketing firms for the massive losses they were incurring. Addressing reporters here, he said his ministry had written to the finance ministry in this regard and he supported the oil retailers on the matter.

Replying to a query, Reddy asserted there was no move to deregulate diesel prices in the country. He, however, added subsidy on diesel could be reduced at an “appropriate time”. “Deregulation of diesel in its entirety is very difficult proposition but at appropriate time we may look at reducing subsidy on diesel. But that time hasn't come," he said.

State-owned oil firms will need to raise diesel price by Rs 11.35/litre if the government was to free its pricing like it was done in case of petrol in June 2010. Even petrol rates have not moved in tandem with cost since its deregulation.Oil firms lose Rs 3-3.20 a litre on the fuel currently. 

New Delhi, February 14
The Telecom Regulatory Authority of India has suggested capping foreign holding at 74% in telecom tower companies, a proposal if accepted could dissuade buyouts by overseas companies.

The possible new rule will be significant for no.2 mobile carrier Reliance Communications, which is trying to sell its tower business unit to raise funds, and is said to be in talks with US private equity giants Blackstone and Carlyle.

It could also mean New York-listed American Tower, the only major foreign telecoms tower company in India, will have to look for a local partner when the proposal becomes rule.

A Reliance Communications spokesman said the company cannot comment on "speculation". American Tower could not be reached immediately for a comment.

India allows foreign firms to own up to 74% of mobile operators, but there is no restriction on holdings in tower companies. The regulator is now proposing to bring tower companies under the so-called "unified licence" regime that now covers only the carriers.

In draft proposals released last Friday, TRAI sought industry comments on the "maximum time" that should be given to tower companies to comply with the new foreign holding conditions.

After consultation with the industry, the regulator will send its final proposals to the government, which has to approve them before they become effective. The proposals are not binding on the government. India's telecoms tower sector is highly fragmented although the top six companies control about 90% of the business. — Reuters

New Delhi, February 14
The Indian government is investigating whether the Indian units of US Internet giants Google Inc and Yahoo Inc may have violated the country's foreign exchange laws, the Wall Street Journal said in report.

Notices have been sent to the Indian units that they are being investigated for potential violations, the paper said. It cited a senior official at a division of the Indian finance ministry, which monitors foreign exchange transactions and money-laundering activities.

A spokesman for Google in India said the company has not yet received the notice and therefore could not comment on specific details, the Journal said in its report.

Neither Google nor Yahoo in India were available for comment when contacted.

On Friday, the enforcement directorate issued a foreign exchange violation notice to internet giant Google for alleged irregularities in transfer of funds to its foreign entities.

The directorate has asked the Indian arm of the company to explain to it all the permissions the company has obtained from RBI in this regard and its source of income in the country along with I-T returns filed earlier.

"We have an obligation to our shareholders to set up a tax efficient structure and our present structure is compliant with the tax rules in all the countries where we operate. We make a very substantial contribution to local and national taxation and provide employment for close to 2,000 people in India," a Google spokesperson said when contacted for comments over the latest enforcement directorate action.

The enforcement directorate, according to sources, is investigating if the internet search giant violated the norms laid down by the Reserve Bank of India with regard to transfer of funds abroad, including in Ireland and also receiv ing similar investments from foreign shores.

The agency has obtained relevant data in this regard from the Reserve Bank and would take up any possible penal action under the Foreign Exchange Management Act (FEMA) after going through the documents.

Google India, along with other social networking websites, is embroiled in a raging controversy over monitoring the content on the Internet and of those websites depending on user generated contents, which arose after Telecommunications Minister Kapil Sibal had asked the social networking websites to "screen" the contents.

The company also filed a compliance report in this regard in a Delhi court recently. — Agencies

Chandigarh, February 14
Aiming for stability in assets and liability ratio, banks in the region are on a “warpath” to attract bulk deposits (deposits of over Rs 10 crore) from the state government, various government boards and corporations, local bodies, besides education and health institutions and business houses.

Be it state-owned or private sector banks — each one is in the race for this “deposit mobilization”, especially now as the financial year draws to a close. By offering 10-10.2 per cent as a finer rate of interest (0.5-0.7% higher than the 9.5% average card rate), these banks are vying with each other to get maximum deposits at their disposal.

With banks vying to get the maximum deposits, the boards and corporations/ institutions and state government departments, who are seeking bids from all banks for the rate of interest to be offered, are hoping for making a quick buck through higher rates of interest bring offered on their short term deposits.

It is learnt that the cash-rich boards and corporations in the region like the urban development authorities of Punjab and Haryana, housing boards, warehousing corporations, mandi boards, Hafed and Markfed are seeking bids from banks to avail this “annual incentive”. Others like the Sutlej Jal Vidyut Nigam, Greater Mohali Area Development Authority and even cash-rich gurudwaras are offered bulk deposits to banks for a short term.

Sources in the banking sector told The Tribune though most public sector banks are offering interest on the card rate, except when their treasury division gives them a go ahead to seek more deposits to maintain the assets (loans) and liabilities (deposits) balance, it is the private banks that were calling the shots in order to get the maximum deposits. Recently, a private bank offered a 10% rate of interest to the Municipal Corporation of Chandigarh for a deposit of Rs 70 crore for a one-year period.

A senior official in the Central Bank of India zonal office here told The Tribune while private banks were going all the way to gain bulk deposits, most public sector banks were offering just the card rate on deposits of over Rs 10 crore.

It may be noted that a few years ago the Reserve Bank of India had instructed banks not to seek bulk deposits at finer rates of interest (those higher than the card rate).

The central bank had then cautioned banks against relying on these bulk deposits as it could lead to a funding crisis, as was the case in the United States, and had asked banks to focus more on core deposits.

SAIL 3rd qtr net slides 43%
Steel Authority of India Ltd posted a worse-than-expected 43% slump in quarterly profit. Net profit in the Oct-Dec quarter fell to Rs 6.32 billion from Rs 11.07 billion a year earlier. Net sales fell 4.9% to Rs 105.94 billion.

Reliance Infra Q3 PAT up
Reliance Infrastructure Ltd posted a consolidated profit after tax of Rs 408 crore in the quarter ended Dec 2011, marginally up from Rs 405 crore in the year-ago period. Net sales jumped 20% to Rs 3,103 crore (Rs 2,580 crore).

DLF plans `8,000 cr township
Realty major DLF Ltd plans to develop a 450-acre integrated township, DLF Garden City, in Gurgaon within 2-3 years. The Rs 8,000 crore project, to be launched soon, will comprise group housing, commercial and plotted development.