New Delhi, July 25
The poor monsoon is casting a shadow on growth forecasts of an economy already reeling under several problems.

The deficient rains are leading analysts to chart out various scenarios and the worst case scenario is a drought and its impact on growth. The GDP estimates for such a situation are being projected as low as 5.4 per cent for financial year 2013.

A research report by Bank of America Merrill Lynch says the possibility of a full-scale drought is undoubtedly rising by the day with the south west monsoon deficit at a worrying 22 per cent of normal.

It estimates that a full-scale drought poses a 40 basis points downward risk to its FY 13 growth forecast of 6.2 per cent, which already factors in poor rains.

The report elaborates that the drought of 2012 may occur in a regime of high lending rates in sharp contrast to those of 2002 or 2009 when lending rates were soft. A drought will push up inflation to 9 per cent by the end of the year. Estimates are that agricultural growth may become nil, and trade , transport and communications may shrink by 75 basis points.

Anand Rathi Securities in a report says that the deficient monsoon is raising an alarm and given that India is already hit with high inflation and low growth, a failed monsoon could become the proverbial straw that broke the camel’s back.

If the monsoon fails, a drought situation could emerge in which the report states that GDP growth could come down to 5.4 per cent and agri sector contracting. By December, food inflation could touch as high as 18 per cent and headline inflation at 10 per cent.

Fertiliser and pesticides demand has already been impacted due to the weak monsoon. A research report by Espirito Santo Securities says that demand for agri-inputs has been seriously impacted by a weak monsoon, late sowing, changing crop patterns, on top of a 25-30 per cent hike in complex fertiliser prices and hike in prices of agrochemicals.

Mumbai, July 25
A major fraud unearthed in New York earlier this month where an exporter allegedly tried to palm off synthetic laboratory-made diamonds as real gems has forced trade to set up checks and balances to prevent a recurrence.

Sources said a consignment of 600 stones sent to an importer in New York earlier this month consisted entirely of laboratory-made cultured stones. The closely-knit diamond export trade comprising mainly of Gujarati and Palanpuri Jains from Rajasthan have gone into a huddle over the matter. Though the exporter has not been named, the person is under watch and efforts are on to ensure that such an incident does not recur, say those in the trade.

As part of the damage-control process, four organisations representing different segments of the diamond trade have come together to form a committee to prevent fraud in future. The first meeting of the committee comprising the Gem and Jewellery Export Promotion Council (GJEPC), the Bharat Diamond Bourse (BDB), the Mumbai Diamond Merchants Association (MDMA) and the All-India Gem & Jewellery Trade Federation (GJF) held its meeting a few days ago to plan its strategy.

"Since the diamond trade is carried out largely on the basis of trust any incident of fraud can badly harm the country's reputation," says Gaurang Sanghrajka, a member of the MDMA.

The diamond trade is using social pressure and the weapon of community action against those who stray from the straight and narrow path, say members of the newly formed committee. "In order to protect.... confidence of consumers ..... there should be zero tolerance towards anyone trying to pass off synthetic diamonds as natural," Sanjay Kothari, vice-chairman, GJEPC, said in a statement.

The umbrella body is roping in testing laboratories and setting up infrastructure to carry out random testing of suspect consignments in order to prevent fraud from recurring. Members of various associations are being asked to keep an eye on each other and report suspicious behaviour to the respective organisations.

According to those in the trade, technological improvements are making it more and more difficult for even the trained eye to detect synthetic diamonds from real stones. The Gemological Institute of America (GIA) says that both natural and the synthetic stones are chemically identical. However, the difference would be obvious when the stones are tested in the laboratory as natural stones are not completely flawless as compared to cultured stones.

New Delhi, July 25
Even as the government today rubbished Indigo Airlines’ co-promoter Rahul Bhatia’s allegation that the government was “tinkering” with aviation policies to benefit “select few” (read Air India and Kingfisher Airlines), voices against the government’s “selective policies” are growing.

After Bhatia, the International Air Transport Association (IATA) has joined the chorus, charging cash-strapped Air India with distorting the market through low fares while on monetary life support from the government.

“...Air India is on government-provided life support of financial bailouts and other forms of protection. Long-term state-aid has not rehabilitated the business and in the meantime it is having a destructive impact on the market The government aid must not be a blank cheque. Clear accountabilities and timelines for management, employees (including the pilots) and everybody involved have to be set and transparent disclosure is needed to measure progress,” IATA Director-General Tony Tyler said, objecting to the government’s protectionist attitude towards Air India.

He also advised the government to draw lessons from restructuring of Japan Airlines.

Bhatia had recently questioned “benefits and relief” to some “inefficient airlines”.

Refuting Bhatia’s charges, Civil Aviation Minister Ajit Singh said all airlines were being allocated routes in a fair manner, adding that all requests had been dealt with objectively in a fair manner to ensure that every airlines gets its share as per its demand without prejudice.

Regarding Air India, Singh said being its owner the government was well within its rights to promote the national carrier and prepare it for competition. “Air India was highly under-capitalised at the time of merger in 2007 and has therefore been provided support in the form of equity to correct the skewed debt-equity ratio. The government has not subsidised Air India,” he said.

New Delhi, July 25
Petrol and diesel prices were today increased in seven states such as West Bengal and Maharashtra and that of domestic LPG in six states as state-owned oil firms recalibrated rates to reflect changes in local levies.

The exercise also resulted in petrol and diesel prices being reduced in 11 states such as Karnataka, Goa, Gujarat and Odisha from today.

While there will no change in price of petrol in Delhi, Kolkata would see an increase of Rs 2.52 a litre to Rs 76.13 per liter. Petrol in Mumbai will cost Rs 75.14 from today as against Rs 74.23 per litre till yesterday. But in Chennai, rates have been cut by Rs 0.97 per litre to Rs 72.19.

The changes in prices of petrol are over and above the Rs 0.70 per litre hike that was effected from July 24.

Diesel price in Delhi would remain unchanged at Rs 41.29 per litre but it would be raised by Rs 0.92 per litre to Rs 44.66 in Kolkata and by Rs 0.89 to Rs 45.28 a litre in Mumbai.

But in Chennai, rates have been cut by a marginal 12 paisa to Rs 43.83 a litre.

This follows state-run fuel retailers recalibrating surcharge calculations to align with changes made in local levies like entry tax on crude oil, surcharge on sales tax and CST/purchase tax on inter-company sale, by state governments. Rates of PDS kerosene have been marginally raised in 8 states like Assam, Bihar and Maharashtra but cut in nine states including Gujarat, Jharkhand, West Bengal and Odisha.

The recalibration of “state surcharge” has been done under a scheme to compensate fuel retailers for irrecoverable taxes such as entry tax on crude, surcharge on sales tax and CST/purchase tax on inter-company sale of products levied by state governments or local authorities. — PTI

New Delhi, July 25
Maruti Suzuki India today said it has run out of stock of the two best selling models, Swift and DZire, which are produced at the Manesar plant where it has declared lockout following violence last week.

The company has, however, ruled out stopping bookings for these models.

"We do not have any stock of Swift and DZire at our factory. About 10,000 cars of both the models are on transit and that is the inventory at present," Maruti Suzuki India (MSI) Chief Operating Officer (Marketing and Sales) Mayank Pareek said.

When asked if MSI would stop taking orders for these models, he said: "Our booking is going on and we will not stop it. We have informed the dealers and customers about the situation.”

He said at present Swift has a booking order of 55,000 units, while DZire has 65,000 bookings. Out of these, 80 per cent are for the diesel variants. There is no order backlog for SX4 and A-Star models, which are also produced at the Manesar plant. — PTI

Hyderabad, July 25
Strongly opposing the UPA government’s proposal for partial disinvestment of the Rashtriya Ispat Nigam Limited (RINL), the corporate entity of Visakhapatnam Steel Plant (VSP), about 36,000 employees, including 16,000 permanent staff of the steel plant, went on a day-long strike yesterday.

All-India Trade Union Congress (AITUC) leader D Adinarayana claimed that all the employees' associations, including CITU and INTUC, were opposed to the government's move to disinvest 10 per cent stake in the RINL.

"Today, it may be just 10 per cent disinvestment. Later, the government may go for higher stake dilution and slowly it may sell majority share. The employees' interests will be affected if the disinvestment is allowed to continue," the union leader said.

He said the union would write to Prime Minister Manmohan Singh and other Central Cabinet ministers, seeking reconsideration of their decision on the disinvestment plans.

The Department of Disinvestment had recently decided to put on hold the Rs 2,500-crore Initial Public Offering (IPO) based on the bankers’ advice in the wake of gloomy market conditions. The IPO was supposed to hit the market by July-end. The first phase of the road shows for the IPO was conducted last month in London, Hong Kong and Singapore.

The Centre wanted to offload 10 per cent of its equity in RINL to achieve its total target of Rs 30,000 crore during the current fiscal from disinvestment in the profit-making Public Sector Units.

Despite the strike, the management has taken care to ensure that all critical functions go on smoothly. "There will be some impact on the production. We have made some stop-gap arrangements. Production loss can be quantified at a later stage," a senior VSP official said.

VSP Chairman and Managing Director AP Chowdhary had earlier appealed to the unions to desist from the strike as it would adversely affect the steel production.

Hyderabad, July 25
Facebook has said its user base in India has grown from 8 million in 2010 to 50 million now and most of the people access the site through mobile phones, prompting it to rethink its business model.

While for other countries it was the desktop which was first used to get in to the portal, in case of India it was the mobile phone, said Kirthiga Reddy, Facebook Director, online operations and head of office, India.

Most of the people in the US started on desktop and moved to mobile, she said, adding that India is causing the company to rethink its model.

"Because many people are going to Facebook first on mobile and they might never go to desktop again," Reddy said.

The situation has prompted Facebook to come out with many innovations so that the site can be accessed through any mobile phone, she added.

"Facebook had a user-base of 8 million when it started its office in India in 2010. It has grown to 50 million users since then," Reddy said, adding that currently translation in India is available in eight languages.

Replying to a query, she said as per studies children below 13 tend to access Facebook when their parents are using the site.— PTI

New Delhi, July 25
HCL Technologies today posted 67.3 per cent jump in net profit at Rs 854.1 crore for the fourth quarter ended June 30, on the back of strong order pipeline.

The IT services major had posted a net profit of Rs 510.5 crore in the same quarter last year.

The company follows a July-June financial year.

Its total income rose to Rs 5,919.1 crore during the reporting quarter from Rs 4,299.5 crore in the corresponding quarter last fiscal, a rise of 37.7 per cent, the company said.

Revenues increased 31.2 per cent in 2011-12 to Rs 21,031.2 crore from Rs 16,034.2 crore in the previous fiscal.

New Delhi, July 25
A Group of Ministers (GoM) today approved a compensation package sought by Air India from US aircraft maker Boeing for a four-year delay in delivery of Boeing 787 Dreamliner planes.

"The GoM considered it and now we will send it to the CCEA (Cabinet Committee on Economic Affairs). ... It will be taken up whenever the next CCEA meeting is held," Civil Aviation Minister Ajit Singh said after a meeting of the GoM headed by Home Minister P Chidambaram.

A meeting of the CCEA is likely to be held tomorrow. The Minister refused to reply to queries on the amount of compensation to be paid by Boeing on grounds of confidentiality of the agreement between the aircraft manufacturer and the national carrier.

He said the Air India had negotiated a compensation package with Boeing because the planes were to be delivered in 2008, that is about four years delay. The earlier agreement was for a delay of six months and certain amount was agreed upon. That has been enhanced now.

The GoM is understood to have looked at the terms of compensation and the amount to be paid by Boeing as per the latest agreement with Air India that was approved by its board on May 28.

Deposing before a parliamentary committee, then AI CMD Arvind Jadhav had said, "We have slapped a compensation claim of $ 710 million. Obviously, they have confirmed $145 million they will pay as compensation for the delay..." The Parliamentary report was made public in March 2010.

The Dreamliner aircraft would be inducted by Air India only after the CCEA approves the compensation package. Three of these planes, painted with Air India logo and livery, are ready to be flown to India. They are parked at Boeing factories in the US.

The national carrier had placed orders to buy 27 B-787s in 2005 and, as per the original schedule, the US aircraft manufacturer had to commence delivery of these aircraft from September 2008.