New Delhi, August 12
Duties on import of gold, silver, oil and non-essential consumer goods are set to go up shortly as Finance Minister P Chidambaram today said these imports will be suppressed along with other measures like ramping up NRI deposits to save the sliding rupee and contain Current Account Deficit (CAD). Making a statement in Parliament, he said measures would also be taken to enhance capital flows by allowing public sector financial institutions to raise quasi-sovereign bonds to finance infrastructure and liberalising ECB guidelines.

The measures include permitting PSU oil companies to raise additional funds through ECBs (External Commercial Borrowings) and trade finance and relaxing the non-resident deposit schemes. "Notifications in respect of tariff rates will be laid before Parliament in the usual course. Administrative measures, as and when taken by the competent authority, will be put in the public domain", Chidambaram said. He said with these measures the government would be able to contain CAD to $70 billion or 3.7 per cent of the GDP and there would be enough inflows to finance the current account gap. The CAD touched an all-time high of 4.8 per cent of the GDP in 2012-13, mainly on account of high gold and oil imports.

The Finance Minister said investors and analysts have raised concerns about the CAD. Their concerns are reflected in the pressure on the exchange rate. The RBI has taken a number of measures to increase the interest rate at the short end and this has contained the depreciation of the rupee to some extent. “However, we believe that we have to do more to contain the CAD, to reduce volatility in the currency market and to stabilise the rupee”, he added.

There have been extensive consultations among the Ministry of Finance, the Ministry of Commerce and Industry, Ministry of Petroleum the Reserve Bank of India, he added.

There was some relief on the CAD front with the trade deficit coming in lower. The rupee, however continued to be weak today breaching the 61 mark again even as the government measures were announced.

However, there are no signs of a industrial recovery yet with industrial growth contracting for the second straight month. Crisil said in a report that the weak IIP numbers suggest that GDP growth for the first quarter would be below 5 per cent.

New Delhi, August 12
There was mixed news for the economy today as industrial output contracted for the second straight month for June while the trade deficit narrowed due to improvement in exports.

The Index of Industrial Production (IIP) for the month of June shrunk by 2.2 per cent. This is the second straight contraction in industrial production. Manufacturing sector, which constitutes about 76 per cent of industrial production, shrank 2.2 percent from a year earlier. Capital goods production, a barometer for investments in the economy, contracted an annual 6.6 percent in June from a year earlier.

Industry said the contraction in industrial growth was a matter of concern. Chandrajit Banerjee, Director-General, CII, said the June IIP growth, which has gone into negative territory for the second time in the past two months, was a matter of concern and does not bode well for early revival of the sector. “If we factor in the base effect, the performance of industry looks even more disheartening”, he said.

Ficci president Naina Lal Kidwai said the de-growth in manufacturing would hurt employment. She said the figures for June were a matter of concern and indicated that supply side bottlenecks and weak consumer demand were weighing down on industrial growth.

"The continuous de-growth in manufacturing will impact the employment scenario and manufacturing can be revived by stimulating demand, lowering the interest rates and expediting investment projects", she added.

The silver lining on the economic data was the fall in trade deficit to $12.26 billion, down by 30 per cent compared to last year.

Rafeeque Ahmed, president, Federation of Indian Export Organisations (FIEO), said the double-digit growth in exports has been due to incentives announced by the government and depreciation of the rupee.

Crisil said imports declined partly due to a contraction in gold imports, on the back of recent restrictions imposed on it. However, if imports have to be brought down to a sustainable level, India will need to rein in its coal imports.

Siddharth Shankar, Adviser, Kassa group said the IIP numbers showed that the industry was still pessimistic about future. The only silver lining in the whole things is the stability in the consumption pattern.

Mumbai, August 12
Lenders to liquor baron Vijay Mallya's failed Kingfisher Airlines have formally taken possession of its swank corporate office located outside the Mumbai airport.

Led by SBI, the consortium of lenders who have lent nearly Rs 7,000 crore to the airline, formally took possession of the building last week. SBI officials confirmed today that the lenders have taken possession of the building located on a 28,850-sq ft plot.

The two-storeyed building with a glass exterior located outside the Mumbai airport is likely to be put up for auction, according to sources. However, since buildings in the vicinity of the airport are not allowed to increase their height, the property may be worth just about Rs 100 crore, according to real estate agents in the area.

In recent times, lenders to the airline have sold some of the shares in group companies like Mangalore Chemicals which Mallya had pledged as collateral.

Another marquee asset Mallya pledged with the banks is the Kingfisher Villa in Goa where he used to host his famed annual parties. Banks are likely to take up this asset and put it up for auction as well, according to analysts here. 

New Delhi, August 12
At least three large European banks' dealings with Indian companies and individuals are being probed for alleged round-tripping of funds by using certain multi-layered transactions in violation of SEBI norms.

It is suspected that some portfolio managers at these banks, which have significant presence in Indian financial markets, could have helped their Indian clients to route their money back into India in disguise of foreign funds through use of investment vehicles across various jurisdictions.

The regulator fears that some promoters might also have been involved in such practices to boost share prices of their companies by showing a strong FII interest, a senior official said.

SEBI is coordinating with other regulators and agencies in India and abroad as part of investigations into this case, where some well-known companies and industrialists are also suspected to be involved, the official added.

Two of these three banks are from Switzerland and one is from the UK, sources said, adding they might not be involved directly and it could be the case that their employees were dealing with the clients directly without keeping the banks in the loop.

Still, the banks could face action on the negligence ground if allegations of wrongdoing come true, a senior official said, while refusing to divulge the identity of the banks and their Indian clients. — PTI

New Delhi, August 12
Reflecting the continuing poor sentiment in the automobile sector, car sales fell 7.4% in July on a year-on-year basis, the ninth straight month of fall, as the slow economic growth, high fuel and interest costs kept the buyers away.

The domestic sales of the Utility Vehicles (UVs) fell in the negative territory for the first time in July since May 2009. Various government measures like higher duties on such vehicles and making diesel fuel progressively more expensive has hit the sales of the UVs, which for the past few years have emerged as the darling of the “big car” loving Indian population.

Data released today by the Society of Indian Automobile Manufacturers (SIAM) showed that 1,31,163 units were sold in July from 141,646 units in the corresponding period of 2012.

Total passenger vehicle sales, which includes, cars, utility vehicles and vans, in the month under review went down by 8.31 per cent at 1,86,239 units from an 203,119 units in July, 2012.

Motorcycle sales too declined by 1.52% to 8,09,312 units in July from 8,21,821 units in the same month previous year.

Total sales of commercial vehicles declined by 14.93% to 55,301 units from 65,008 units in the year-ago period, the SIAM said.

Total sales of vehicles across categories registered a decline of 2.08% to 14,15,102 units in July 2013 as against 14,45,112 units in the same month of 2012, it added.

Mumbai, August 12
State Bank of India today reported a 13.6 per cent decline in standalone net profit to Rs 3,241.08 crore for the quarter ended June 30, 2013, due to increased provisioning for rising non-performing assets.

The country's largest bank had a standalone net profit of Rs 3,752 crore in the same quarter last year.

New Delhi, August 12
The GSM mobile operators’ umbrella body, Cellular Operators Association of India (COAI), today welcomed the DoT’s guidelines to state governments for installation of mobile towers.

The guidelines would help eradicate the confusion and inconsistencies with various local and state level authorities regarding the installation and operations of mobile towers, the COAI said.

The guidelines are also focused on speedy development of the national telecom infrastructure and have been finalised after consultations and deliberations with the respective state government officials and relevant stakeholders.

The guidelines issued by the DoT encourage a nominal one-time fee, single-window clearance, and electricity connection on priority for mobile towers, which the COAI feels would help get over the previous complex system. The guidelines also do not suggest any exclusion area where towers may be installed or located.

“We are working closely with the DoT to ensure that all safety norms are made universal and fears of the public about the telecom towers are removed,” said Rajan S Mathews, Director-General, COAI.

The finalisation of the guidelines for installation of telecom towers and establishment of a portal indicating all emissions levels of all antennae will provide comfort to citizens about the safety of the towers and its emissions, Mathews said.

According to the COAI, another positive aspect of the guidelines was a clear distinction and segregation of emission (EMF) aspects from structural requirements. The guidelines also clarify that no suo motu demolition or sealing of a mobile tower for EMF related issues will be permitted without the consent of the TERM Cell. 

BRIEFLY

Retail inflation dips marginally
New Delhi: Retail inflation dipped marginally to 9.64 per cent in July from 9.87 per cent in the preceding month as prices of cereal, pulses, fruits and sugar softened. The food inflation in July softened to 11.24 per cent from 11.84 per cent in the previous month. — PTI

RBI auctions bills worth Rs 22,000 cr
Mumbai: The RBI on Monday sold short-term bonds worth Rs 22,000 crore to check volatility in the forex market by sucking out liquidity. Bills with maturities of 34 days and 35 days of Rs 11,000 crore each were put up for auction, the RBI said. — PTI

Amazon.in unveils computers in India
Bangalore: Amazon.in, an affiliate of global retail giant Amazon.com, on Monday launched computers and accessories store for customers in India. Shoppers will be able to shop across 7,000 plus products from over 180 brands with the help of Amazon.in, Amazon said. — PTI

IKEA stores
New Delhi: Swedish furniture major IKEA has identified four states — Haryana, Andhra Pradesh, Maharashtra and Karnataka — to set up single brand retail stores as part of its Rs 10,500-crore investment in India. This was disclosed by IKEA CEO Mikael Ohlsso here on Monday. — PTI

L&T garners Rs 4,160-cr orders
New Delhi: L&T Construction said on Monday it has won orders worth Rs 4,160 crore across multiple business verticals in the current quarter. The scope of the projects includes civil, structural, mechanical, electrical among others. — PTI