New Delhi, April 17
In a rare show of tough talk, public sector oil companies including Indian Oil Corp went public on Tuesday with an ultimatum of sorts that it will raise petrol prices by more than Rs 9 a litre unless the government either compensates petrol losses or cuts central excise and state taxes.

Since the PSUs are majority owned by the government, they are neither prone to belligerent talk nor are they usually in the business of serving ultimatums to the government. Their going public with the present missive seems to be preparing the ground for a petrol price hike. The fuel retailers and exasperated by the inability to pass on petrol hikes, which is a deregulated product, following recent opposition from UPA allies like the TMC. The missive comes on a day when the RBI once again reiterated the need to hike petrol prices.

Given the inability to hike petrol prices and the losses being borne, oil companies have asked the government to declare petrol a regulated product temporarily and provide hundred percent cash compensation to the OMCs. This looks unlikely since the government has indicated on several occasions that ultimately it wants to move ahead on decontrol of fuel products since incessant subsidies are not feasible. Going back on the only deregulated product, petrol, may be seen as a regressive move.

The other alternative that has been suggested is to reduce excise duty on petrol from Rs 14.78 per litre by an amount equivalent to the under-recoveries on MS and simultaneously advise the states to reduce the rates of sales tax, which vary from 15% to 33% (that works out and varies from Rs 10.30 per litre to Rs 18.74 per litre).

Indian Oil said in as many words that “the current situation where OMCs have to import crude oil at $121.29 per barrel and sell it at $109.03/barrel is no longer sustainable.

The OMCs said continuation of such pricing will only impede the ability of the companies to import crude oil and may affect product supply-demand balance or else they will hike the price of petrol by Rs 8.04 per litre (excluding state levies) with immediate effect. The companies are awaiting the government’s response and should no relief come forward, they will have no option but to effect the increase in prices. IOC, together with HPCL and BPCL, is losing Rs 49 crore a day on petrol sales alone. 

New Delhi, April 17
Indian industry on Tuesday welcomed the Reserve Bank of India's decision to cut some key lending rates by 50 basis points, saying it would boost investments and sentiments of the economy.

Confederation of Indian Industry (CII) director general Chandrajit Banerjee said the cut in repo rate by 50 basis points is a welcome move that was much needed given that GDP growth is moderating and IIP growth is declining.

“The repo rate cut will provide the boost to investment as well as send a strong signal that turning around growth is of pivotal importance”, he added.

Anurag Mathur, MD of Cushman & Wakefield India, observed: “After a lukewarm budget the real estate market finally has something to cheer about with the RBI’s repo rate cut of 50 basis points today. The resultant reduction in interest rates that banks are expected to pass on to consumers will provide a positive boost to market sentiment and result in some transaction activity in the residential sales markets. For the whole of last year, end buyers had to defer their purchase decisions as they were facing the double-edged sword of rising interest rates and stubborn price levels”.

CRDAI national president Lalit Jain stated: “ We’d like to see the credit regulators bringing in positive measures now, which will help in bringing more investors into the real estate sector of the country and will help in sustaining the growth pattern of the industry.

FICCI president R.V. Kanoria said the RBI’s recognition of the need to bring growth back on track by cutting the repo rate by 50 basis points was a welcome move. “FICCI hopes the government will take cognizance of the need to rein in fiscal deficit and contain expenditure on subsidies by taking corrective measures, particularly in the pricing of oil products. This is necessary to avoid any negative implication on inflation”, he added.

Anuj Goel, executive director of KDP Infrastructure, said: “As the housing loan interest rate reduces, it facilitates to home seekers to buy house and ultimately it’ll be beneficial for the real estate industry. However, the move will only benefit new borrowers while the existing ones will have to grapple with the old rates. Banks should allow existing home loan customers to reduce their interest burden by allowing them to reprice their existing loans at lower rates”.

Rajeev Talwar, group executive director of DLF, noted: "It's a big move forward and by cutting the interest rate the central bank has empowered the buyer which will be a very positive step for our sector."

Mumbai, April 17
FMCG major ITC on Tuesday replaced Mukesh Ambani-led Reliance Industries Ltd as the most influential stock on Indian bourses. Based on its weightage on the stock market's benchmark index, RIL slipped to the second position after ITC.

At close on Tuesday, ITC grabbed the top slot in terms of BSE Sensex weightage, which is measured by the value of a company's free-float or non-promoter shares that can be freely traded in the market

ITC has a weightage of 9.25%, followed by Reliance Industries that has a weightage of 9.23%. Infosys slipped to the third place and commands 7.98% weight in Sensex after the company's shares crashed 13% on last Friday when the company gave a muted revenue guidance for FY2013.

On the NSE's Nifty index also, ITC surpassed Reliance Industries with the FMCG major having 8.15% weightage, while the energy giant had 7.72% weightage. — PTI

New Delhi, April 17
India's monsoon is likely to have average rainfall in 2012 despite fears the El Nino weather pattern may emerge in the second half of the season, the country's top weather official said, pointing to a third straight year without drought.

The June-September monsoon, vital for agricultural output and economic growth, irrigates around 60% of farms in India, the world's second-biggest producer of rice, wheat, sugar and cotton. Agriculture accounts for about 15% of India's nearly $2 trillion economy, Asia's third biggest.

"Rain could be normal this year due to the absence of any strong signal that could inhibit occurrence of a healthy monsoon," L.S. Rathore, director-general of the state-run India Meteorological Department (IMD), told Reuters in an interview.

The IMD forecast is the basis for the government's official forecast which will be released in the last week of April with more details.

According to the IMD classification, rain between 96-104 percent of a 50-year average of 89 centimetres is considered normal. The last time there was a drought with rain below this range was 2009 and before that, in 2004.

"The apprehension that El Nino will impact the monsoon badly seems misplaced as this weather pattern is likely to emerge only towards end-August, one of the two wettest months. Besides, El Nino is just one of the many factors that come into play," Rathore said.

El Nino, an abnormal warming of waters in the equatorial tropical Pacific, is linked with poor rains or a drought-like situation in Southeast Asia and Australia.

The La Nina weather pattern, which is associated with heavy rains in south Asia and flooding in the Asia-Pacific region and South America, and drought in Africa, ended in March.

In the interim before El Nino appears, Rathore said a neutral condition continues over the tropical Pacific.

"On a number of occasions, the monsoon turned out to be normal despite the emergence of El Nino. There’s no direct, one-on-one relationship between the success of the monsoon and the occurrence of El Nino," he said. — Reuters

Chandigarh, April 17
National Bank for Agriculture and Rural Development (Nabard) will now be directly providing financing to district central cooperative banks (DCCBs) in Haryana, who can then refinance this money to any individual and in the bargain become financially viable.

This is the first time that the premiere agriculture lending bank is extending a direct line of credit to the DCCBs in order to support lending by them. Generally, Nabard advances money to the state cooperative banks, who in turn lend them to the DCCBs. The latter then give away these loans as short term crop loans.

The new initiative, where not just the cooperative members, but any individual can avail the loan, has been started in Panipat on a pilot basis. The district central cooperative bank in Panipat has got Rs 15 crore for re-financing to any individual or a producer organization.

“This is a new financial product being introduced in DCCBs in order to support lending by them. This is market driven, and we will offer finance to these district banks at the rate of 10.25 per cent. These banks can then offer loans at the existing market rates. We’ve earmarked Rs 120 crore for disbursal to DCCBs in Haryana this year, with the hope this will help strengthen the financial condition of these banks,” said K. Sayeed Ali, chief general manager, Nabard’s regional office in Haryana.

Ali said Nabard has also received a proposal from the Karnal DCCB for a direct line of credit of Rs 50 crore. “However, we’re still examining the proposal. It’s only after we’re sure the bank has more than 60% of this finance as fixed deposits that we can allow it to avail of this finance,” he added.

Ali said other than providing direct credit to the DCCBs, Nabard will now also provide finance to the state owned corporations in Haryana, especially those involved in warehousing and power sector, thus helping in create rural infrastructure.

“We have received a proposal to finance Rs 37 crore to Haryana Vidyut Prasaran Nigam under this new initiative called Nabard Infrastructure Development Assistance (NIDA). This again will be a market driven financial product, where we’ll finance state owned organizations and corporations at the existing market rates of interest,” Ali added.