New Delhi, April 1
Signalling the persistent weakness in the economy, core sector data and HSBC Purchasing Managers Index (PMI) came in with disappointing numbers on Monday, erasing hopes raised by their better performance in previous months.

Core sector data or the production of eight core sector industries contracted by 2.5 per cent in February, the first time in 2012-13.

Sector-wise performance revealed that the biggest decline of over 20 per cent in the month was witnessed in case of natural gas, followed by coal (- 8%), electricity generation (- 4.1%) and crude oil (- 4%).

The output growth of the core sector industries was 7.7 per cent in February 2012.

The negative performance in reporting month pulled down the cumulative growth in 11 months of 2012-13 ended February to 2.6 per cent against 5.2 per cent during the corresponding period in 2011-12.

The eight industries include crude oil, petroleum refinery products, coal, electricity, cement and finished steel and have a weightage of 37.9 per cent in the overall Index of Industrial Production (IIP).

The eight core sector industries had grown by 3.1 per cent in January and 2.5 per cent in the previous month.

The HSBC PMI Index was no better as it showed that manufacturing witnessed the slowest rate of expansion in 16 months in March as power outages hampered production activity and decline in new business orders.

The HSBC India Manufacturing Purchasing Managers' Index (PMI) - a measure of factory production - stood at 52 in March, down from 54.2 in February.

Persistent power cuts weighed on the manufacturing sector. Moreover, the volume of incoming new work increased at the slowest pace in 16 months and export orders expanded at the slowest pace in seven months, HSBC said.

The index has remained above 50, below which it indicates contraction, for more than three years now. The PMI reading for March showed that manufacturing operating conditions in the country has improved at the slowest rate since November 2011.

Tokyo, April 1
India's economy is capable of absorbing $50 billion in foreign direct investment (FDI) per year, Finance Minister P. Chidambaram said here today, adding the government was committed to reforms to tackle a large current account deficit.

Addressing a news conference during a visit to Tokyo promoting India as investment destination, Chidambaram also reiterated that growth in Asia's third-largest economy was expected to accelerate in the current fiscal year to March 2014.

"FDI flows into India are quite positive... think we can absorb, easily absorb $50 billion of FDI every year into India," said Chidambaram who is regarded as a market-friendly reformer.

The country's financial account, which includes FDI, portfolio investment and overseas borrowing by companies, showed a surplus of $31.1 billion in the December quarter for the fiscal year ended March 31.

The government is struggling to boost the economy, which has posted its weakest growth in a decade. Removing investment barriers, many of which date back to before India started opening up its economy in the early 1990s, has been key to the government's push to restoring investor confidence.

"A new trade policy will be announced in about three or four days and that will show that we are committed to reform," said the Harvard-educated former lawyer.

Chidambaram repeated his recent pledge that the government would simplify "outdated" foreign investment caps in a bid to attract more investors and tackle its large current account deficit, but stopped short of specifying which sectors he wants to reform.

The current account deficit widened to a record high 6.7 per cent of GDP in the December quarter, driven by heavy oil and gold imports and muted exports, in a worse-than-expected performance that will keep the rupee currency under pressure.

The government has previously said it plans to open up the pensions sector to foreign investors, and raise the investment limit in the insurance sector to 49 per cent from 26 per cent.

"The current account deficit is indeed large and a matter of concern," said Chidambaram. "For 2012-13 (it) has been fully financed by foreign exchange inflows, without touching our foreign exchange reserves. In fact we may have even added to our foreign exchange reserves," he said.

Chidambaram also said the Indian economy was expected to grow 6.1-6.7 per cent in the current fiscal year, an improvement on the estimated 5.0-5.5 per cent growth recorded last fiscal year, a figure the minister said he was not satisfied with. — Reuters

New Delhi, April 1
Japanese auto giant Suzuki Motor Corp (SMC) has increased its stake in Indian subsidiary Maruti Suzuki India Ltd (MSIL) by 2 per cent to 56.21 per cent following the merger of its engine and transmission maker Suzuki Powertrain into country’s largest carmaker.

In a filing to the BSE today, MSIL said SMC’s stake in the Indian subsidiary has increased to 56.2 per cent from 54.2 per cent due to a share swap agreement with the domestic car market leader to acquire Suzuki Powertrain India Ltd (SPIL).

Prior to the merger, SMC held 70 per cent stake in SPIL, while the rest was held by MSIL.

Country’s largest carmaker had in June last year announced plan to merge SPIL with itself in order to prepare itself to meet increasing demand for diesel vehicles. At that time, SPIL was supplying three lakh diesel engines and transmissions every year to MSIL.

As per the merger agreement, the swap ratio was fixed at 1:70, which meant SMC received one share of MSIL of Rs 5 each for every 70 shares of Rs 10 each it held in SPIL.

MSIL made a fresh issue of 13.17 million shares to SMC in lieu of the Japanese parent's 70 per cent holding in SPIL.

The understanding between the two companies said that there would be no cash outflow from MSIL as the merger was effected through a share swap agreement.

SPIL's turnover in 2011-12 stood at Rs 4,550 crore with a net profit of Rs 150 crore. It also had a debt of Rs 550 crore, which went into MSIL's book.

New Delhi, April 1
Car makers Honda Cars India and Hyundai Motors India today said they have hiked prices of their vehicles by up to Rs 10,000 to offset increased cost of on board diagnostic compliance changes (OBDC).

While Honda Cars India Ltd (HCIL) said its hike will range from Rs 1,000 to Rs 10,000 across models, Hyundai Motor India Ltd (HMIL) said the price increase will be between Rs 575 and Rs 2,830.

HCIL said its hatchback Brio will be dearer by Rs 2,000 from the existing price of Rs 4.10 lakh. The automatic variant of the car will see the steepest hike of Rs 10,000 from the current price of Rs 5.74 lakh.

The company's City sedan will cost Rs 3,000 more. It is currently priced at Rs 7.26 lakh. The sports utility vehicle CR-V will be costlier by Rs 1,000.

Due to the price hike, HMIL's entry level compact car Eon will be costlier by Rs 2,500 from its current starting price of Rs 2.77 lakh. Santro will cost Rs 2,830 more from its existing starting price of Rs 2.97 lakh.

The price hike in i10 ranges between Rs 600 and Rs 900. It is currently available at a starting price of Rs 3.74 lakh. HMIL's premium hatchback i20 will now be costlier by Rs 575. The petrol variant of i20 starts at Rs 4.84 lakh, while that of diesel is 5.99 lakh. — PTI

New Delhi, April 1
Vodafone India today said the decision of the Department of Telecommunications (DoT) not to give extension to licences beyond 2014 suffered from "several fundamental flaws, contradictions and jurisdictional errors".

While pointing out that although the non- extension of licence would interrupt services in the three lucrative service areas - Delhi, Mumbai and Kolkata, Vodafone said the company never sought extension of its licences for free.

DoT has rejected the demand of Vodafone India for licence extension in three circles on March 21 and asked the mobile operator to bid for airwaves to continue their services there.

The DoT in its response to Vodafone seeking extension has said in clause related to extension of licences, companies should not read 'may' as 'shall' extend licence.

"The said rejection suffers from several fundamental flaws, contradictions, jurisdictional errors and errors apparent on the face of the record, which have rendered the said rejection legally unsustainable," Vodafone India resident director (regulatory affairs and government relations) TV Ramachandran said in a letter to DoT.

Vodafone India had sought extension of its licence period for the three circles, which were due for renewal in November 2014 under Clause 4.1 of the licence agreement. The government can extend the period of licence by 10 years at one go if the request is made by the operator during the 19th year of the licence period.

Vodafone pointed out that DoT’s claim that it was rejecting the application on the ground that it has not come to settle "new" terms and conditions was not correct as no terms and conditions have been provided by the department to 
the company.

The company said DoT has "misinterpreted National Telecom Policy (NTP) 2012 and wrongly applied provisions of NTP stating that spectrum and licences are already de-linked".

“The rejection of application shows that DoT has acted against public interest, as it will lead to disenfranchising 50-60 per cent of the market leading to disruption of services,” Ramachandran said in the letter to DoT.

The recently introduced policy should not be applicable to Vodafone India as the new policy does not have retroactive effect, the company said in its letter to DoT. “Any subsequent change in policy cannot apply to licences granted earlier and rights which have been protected under such licences,” Ramachandran said.

New Delhi, April 1
GAIL India Ltd today said it has booked half of the 4.6 million tonne of LNG production capacity at Cove Point LNG project at Lusby in Maryland, US.

GAIL Global (USA) LNG LLC, a US affiliate of GAIL (India) Ltd, signed a 20-year terminal service agreement with Dominion Resources Inc to book 2.3 million tonne per annum liquefaction capacity in the Cove Point LNG project, the two companies announced today.

Dominion plans to start construction on the 5.25 million tonne per annum facility in 2014 and put the liquefaction facilities in service in 2017.

Cove point will be a premier facility in terms of direct access to the Marcellus and Utica Shale plays, two of the most prolific shale gas basins in north America. — PTI 

Mumbai, April 1
Investor wealth soared by nearly Rs 1.73 lakh crore to Rs 63.78 lakh crore during 2012-13 on the back of rising stock prices helped by foreign fund inflows.

The BSE Sensex gained 1,431.57 points or 8.23 per cent in 2012-13 fiscal.

Led by the rally in the stock market, the investor wealth soared by Rs 172,945 crore to Rs 63,87,886 crore on March 28, 2013, from Rs 62,14,941 crore in the previous fiscal 2011-12.

In 2012 calendar year, the investor wealth had surged 27 per cent to around Rs 67.7 lakh crore.

The Sensex has, however, fell by nearly 4 per cent or 745 points in the first three months of the current calendar year.

Analysts said possibility of early General Elections and concerns over the pace of economic reform process have dented market sentiments.

Foreign Institutional Investors (FIIs) have infused a net amount of about Rs 9,494.47 crore in the Indian stock market in March.

FIIs had pumped in $4.57 billion (Rs 24,440 crore) in February and $4.05 billion (Rs 22,000 crore) in January.

Market participants said the upsurge in foreign fund inflows is on account of a slew of measures taken by the government, including the postponement of General Anti-Avoidance Rule (GAAR) implementation by two years to April 1, 2016.

Also, easing of interest rates by RBI has boosted FIIs inflow in the Indian equity market.

Last month, RBI had slashed its short-term lending rate or the repo by 0.25 per cent to 7.5 per cent in its mid-quarter monetary policy review.

FII investment in the country's equity market had reached Rs 1,27,455 crore in 2012. — PTI

New Delhi, April 1
Coal India Ltd (CIL) has agreed to renew fuel supply pacts with the existing non-power consumers.

The clearance for renewing the fuel supply pacts came at a recent Board meeting of the state-run coal producer.

Following the clearance, the CIL wrote a letter to its subsidiaries saying, “After detailed deliberations, the Board accorded its approval for renewal of FSAs (Fuel Supply Agreements) with the existing non-power consumers (including captive power plants) for further period of three months”.

The letter said the issue of renewal of the FSAs with the existing non- power consumers due to expire in March/April on completing the term of five years was placed for consideration before the company’s Board meeting held a fortnight ago.

The Coal Ministry had earlier stated that CIL has also entered into FSAs with power producers under which the PSU has signed pacts with 56 power plants so far.

A total of 143 FSAs are to be signed by CIL in respect of identified power projects of 60,000 MW capacity, which have been assured for coal supply during the 12th Five-Year Plan period.