New Delhi, November 16
India will struggle to meet its already swollen deficit target this year after a dismal response to this week's auction of mobile phone licences and a battle to sell stakes in state companies, finance ministry officials privately concede.

Global rating agencies have threatened to downgrade India's sovereign credit rating to junk if it fails to put its fiscal house in order.

Analysts said while the disappointing auction would likely not be a deciding factor, it underscored the challenges facing the government in trying to slash the deficit.

Just last month, subdued tax revenue and higher spending on subsidies forced the government to revise its fiscal deficit target to 5.3% of gross domestic product for the current financial year from a previous target of 5.1%.

In setting the new target, the government was banking heavily on generating billions of dollars from the auction of second-generation (2G) mobile phone licences. But the auction this week yielded just under 25% of the targeted Rs 400 billion, catching officials off-guard.

Finance Minister P. Chidambaram said on Friday he was still confident of meeting the 5.3% target, although his officials expressed scepticism, saying the poor auction result may have pushed the government's already tough deficit target even further out of reach.

"The task has become more difficult. Some out-of-the-box measures are needed to save the situation," a senior finance ministry official with direct knowledge of the matter told Reuters.

Other finance ministry officials interviewed by Reuters this week gave similar assessments. The officials declined to be identified as they are not authorised to speak to the media.

Seven private economists polled by Reuters said they now expected the fiscal deficit for the year to end-March 2013 to grow to 5.5-6% of GDP.

"Slippage is now inevitable. How much slippage happens depends on whether they can actually cut down on any spending area," said Sonal Verma, an economist at Nomura.

FISCAL CREDIBILITY AT STAKE: The government still has some options to get it closer to its fiscal goal.

It could sell its stakes in private firms such as Axis Bank, infrastructure company Larsen & Toubro and hotel and tobacco conglomerate ITC. It can also ask for special dividends from cash-rich, state-run companies.

Besides selling still-unsold telecom spectrum - another auction is possible before March - it could even consider liquidating its land holdings, finance ministry officials said.

But the officials said it was unclear just how much revenue that would generate and whether it would be enough to meet the 5.3% fiscal target.

Last year, the fiscal deficit overshot the target of 4.6% by 1.2 percentage points. Another big slippage this year could further erode the nation's fiscal credibility.

"It is not business as usual. Everybody is under pressure to meet the (deficit) target," said a finance ministry official. "Time is running out." — Reuters

New Delhi, November 16
The Comptroller and Auditor General of India (CAG) has asked oil ministry not to approve any of Reliance Industries Ltd’s investment plans for the flagging KG-D6 gas field unless the company gives it unfettered access to audit its spendings.

In a strongly worded letter, the CAG referred to media reports about the ministry giving nod to RIL's annual capital expenditure for the KG-D6 gas field that have been pending for past three years, to advise the ministry not to approve any investment except those of "emergent nature".

"It is well within the knowledge of the ministry that any increase in capital expenditure is likely to have significant adverse impact on government's financial interests," CAG wrote to oil secretary on November 9.

Sources, however, said contrary to reports, the ministry is yet to sign on resolutions approving capital expenditure on the KG-D6 block for the 2010-11, 2011-12 and 2012-13 fiscal years pending resolution of the CAG’s audit of spending on the block.

The oil ministry wants Reliance Industries to give CAG "unfettered access to account books" and pending that it has not approved the firm's investment proposals including annual budget for three years.

"We would like to strongly recommend that pending complete submission of all supporting records by the operator relating to expenditure for previous years upto 2011-12 and comprehensive and detailed scrutiny thereof to verify that the government's financial interests have not been adversely affected in any, the oil ministry may examine all relevant issues closely and carefully before considering the desirability of any future approvals of capital expenditure through the annual work programme and budget, development plans or otherwise, except those of an emergent nature," CAG wrote. — PTI

Ahmedabad, November 16
The Gujarat High Court has refused to set aside an order which cancelled Amul's registration of its trademark ‘TRIX’, on which a US firm has claimed its right. In July this year, the Intellectual Property Appellate Board had directed Registrar of Trademarks to cancel Amul's registration of the TRIX trademark.

A division bench of chief justice Bhaskar Bhattacharya and justice J.B. Pardiwala, in a recent judgement, dismissed the petition filed by Kaira District Cooperative Milk Producers Union Ltd, owner of Amul, seeking cancellation of the TRIX trademark registered in favour of US food giant General Mills.

Amul, 35 years after registering the trademark and after General Mills' entry into Indian market as late as in 1995, had questioned the US firm's right over TRIX.

The Gujarat Cooperative Milk Marketing Federation (GCMMFL), which markets milk and milk products under Amul brand under a licence from the petitioner, registered TRIX (coined from the word “tricks” from the concept of appearing and disappearing tricks as in magic show) as a trademark in 1977.

"In 1986 we launched a chocolate under the TRIX trademark. We advertised it in a manner that it was so tasty the bar just disappears/melts in the mouth quickly," according to the petition.

However, Amul stopped using TRIX in 1987. The US food giant's subsidiary, General Mills India Pvt Ltd, came into existence in 1995. In 2005, it applied for registration of the TRIX trademark, claiming it was holding the same trademark since 1910 in various countries.

Since Amul already owned the trademark, General Mills India's application for registration was rejected.

Meanwhile, the US firm forayed into the Indian market by introducing a snack under the trademark ‘DIP-TRIX’. At the same time Amul also planned a re-launch of its TRIX brand for a wafer chocolate, which was introduced in 2007.

This led to a legal battle between the two giants. Amul objected to unauthorized use of TRIX by General Mills. The US giant challenged Amul's claim over TRIX by filing a rectification application with Intellectual Property Appellate Board (IPAB), Ahmedabad.

On July 16, 2012 IPAB directed the Registrar of Trademarks to cancel Amul's right over the trademark. The dairy brand challenged the board's verdict in the HC, arguing that IPAB had erred in its ruling.

"The board, despite taking on record and recognizing invoices of the year 2007 for the sale of wafer chocolates under its registered the TRIX trademark, clearly erred in allowing the said application," Amul claimed. — PTI

New Delhi, November 16
The agricultural sector and advances taken by commission agents in Punjab and Haryana have become the principal growth drivers for Central Bank of India. The bank has registered a significant increase in its net profit during the first six months of the current fiscal year.

Talking to reporters on Friday, zonal manager B. Akbaraly said the bank had achieved a commendable growth of 26% in its profit till date in this fiscal. As against a net profit of Rs 525 crore between April-Sept 2011, profit in the same period rose to Rs 666 crore.

“The growth drivers for the bank have been the agriculture advances, advances extended to rice shellers and advances given to commission agents under special schemes launched by the bank,” he said.

In the second quarter (July-September 2012), the bank’s net profit in this zone, comprising Punjab, Haryana, Himachal Pradesh, Jammu & Kashmir and Chandigarh, stood at Rs 330 crore as against Rs 244 crore in the same period last year.

Akbaraly added the focus in the third and fourth quarter of this fiscal would be on increasing the bank’s corporate advances portfolio and recovery of NPAs.