The Tribune, Chandigarh, India

Industrial growth enters positive zone after 3 months
Retail inflation slows to 8.1% in February from 8.8% in January
Sanjeev Sharma
Tribune News Service

New Delhi, March 12
Industrial growth entered the positive territory after three months in January by growing 0.1% while consumer inflation moderated to a two-year low of 8.1% in February on the back of fall in food prices.

During February, the easing of food inflation aided in moderation in headline consumer inflation to 8.1% from 8.8% in January. Core inflation also decelerated to 7.9% from 8.1% in the previous month supported by a base effect.

Industrial growth recovered after contracting for three months in a row although industry and experts said there were no visible signs of an economic recovery.

CII said the marginal improvement in the industrial production numbers is small consolation considering that the manufacturing sector continues to be in the red for the fourth consecutive month, indicating that the slowdown is yet to show any visible sign of bottoming out.

"What is extremely worrisome is that the decline in investment and consumption demand is showing no signs of reversing, which could stem the downtrend and trigger an upturn in investment cycle," CII said.

The marginal improvement in the Index of Industrial Production (IIP) was mainly on account of higher power generation and mining sector output, while manufacturing declined.

Analysts said IIP numbers do not provide much comfort. Aditi Nayar, senior economist, ICRA, said the marginally positive IIP growth for January 2014 does not provide much comfort, given that both capital goods and consumer durables have contracted for yet another month.

They also pointed to data volatility in categories like vitamins and cashew.

Bhupali Gursale, economist, Angel Broking, said despite the moderation in CPI inflation and lacklustre IIP data, RBI is expected to maintain status quo on monetary policy rates in its upcoming April policy review.

SEBI tightens norms to check money laundering

Mumbai, March 12
Market regulator SEBI today tightened norms aimed at countering money laundering and terror financing through the capital markets and asked market entities to conduct detailed risk assessment of their clients, including those linked to countries facing international sanctions.

The market intermediaries have also been told to appoint designated directors to ensure compliance with new norms, who would face penal action for any lapses.

Besides, stock exchanges have been asked to monitor the compliance of various entities through half-yearly internal audits and inspections and keep SEBI informed on these issues.

The new norms have come ahead of General Election scheduled for April-May. Such periods typically see a spurt in money laundering, including through the capital markets.

Norms for record-keeping by market entities have been streamlined and would require client details to be "preserved and maintained" for five years after the business relationship has ended or the account is closed.

So far, client details had to be preserved for 10 years.

Details that now need to be stored include evidence of the identity of clients and their beneficiary owners, such as copies of passports, driving licences and other identity cards, and account files and business correspondence.

Market intermediaries can use a third party to carry out due diligence and determine the identity of clients and the beneficial owners of funds being handled by them.

While a strong defence mechanism exists in the Indian capital market regulatory system against money laundering or terror financing activities, a review became necessary to consolidate various initiatives undertaken by SEBI and the government over the years on this front.

Besides, certain changes and additional safeguards made it necessary to tackle challenges thrown up by technological and market advances and to harmonise the guidelines with new standards set by global bodies such as the FATF (Financial Action Task Force). — PTI

New guidelines

Market entities have been asked to conduct risk assessment of their clients

Market intermediaries have also been told to appoint designated directors to ensure compliance with the new norms

Stock exchanges have been asked to monitor the compliance of various entities through internal audits and inspections

Maruti-Suzuki deal
SEBI seeks explanation from Maruti
Market regulator exploring legal options under the SEBI Act
Girja Shankar Kaura
Tribune News Service

New Delhi, March 12
Despite Maruti Suzuki India Ltd’s (MSIL) efforts to explain its decision to allow its Japanese parent Suzuki Motor Corp (SMC) to set up a fully owned subsidiary to operate the Gujarat plant, the confrontation could end up in another crisis for the country’s largest carmaker.

While MSIL officials said efforts were under way to talk and explain to its investors, which include mutual fund houses, that the decision to allow SMC’s full-fledged entry into the country would in no way be detrimental to MSIL’s interests, the situation seems to be going out of proportions.

Reports suggested that after a group of investors approached SEBI over the issue last week, the market regulator has reportedly sought an explanation from MSIL over the decision to make its Gujarat plant an arm of the Japanese parent. The regulator is exploring legal options under Section 11 of the SEBI Act.

Section 11 of the SEBI Act empowers the market regulator to take steps for protecting investors’ interests, said a source with direct knowledge of the matter.

In a second letter dated March 5, 16 fund houses and insurers owning 7% stake in MSIL, have urged the company's Board to exercise their fiduciary responsibility and proceed with the Gujarat project under the ownership of Maruti Suzuki.

"The decision of the MSIL board is ill-conceived in its entirety and results in outsourcing of the core manufacturing activity that is fundamental and critical for MSIL," the investors had said in a letter to Maruti Suzuki.

As per investors, a calculation shows that if Suzuki scales up the plant to 1.5 million cars by 2020, an investment of 18,000 crore will be recovered from MSIL (as per the proposed business plan).

Investors likely to move CLB

Under the deal, Suzuki Motor Corporation will set up a fully owned subsidiary to operate the Gujarat plant

16 fund houses and insurers, owning 7% stake in Maruti Suzuki, have urged the company's Board to exercise their fiduciary responsibility and proceed with the Gujarat project under its ownership

These investors are likely to move the Company Law Board (CLB) if Maruti Suzuki India refuses to review the business proposal

Airtel to hike fixed-line broadband tariff
Tribune News Service

New Delhi, March 12
Airtel's fixed-line broadband customers will have to shell out more for Internet services from next month as the service provider has hiked the charges, by up to 40% in certain plans. The increase in tariff will be effective from April 1.

According to TRAI data, Airtel with 9.1% share is the second largest shareholder in the broadband market.

BSNL had 68.9% market share in the Indian broadband market as on November, 2013 while MTNL had 7.6% market share. India has 14.47 million wireline broadband subscribers.

Market watchers said the move reflects the changing market conditions which could mean higher tariffs for the customers.

Airtel is increasing the tariff at a time when rivals are offering special schemes to attract fixed broadband customers.

The company has reportedly informed its customers that due to an increase in input cost, the rent will be revised from Rs 250 to Rs 349 with effect from April billing circle.

BRIEFLY

Telecom user base rises to 92.20 cr in January: TRAI
New Delhi: The total number of telecom subscribers in the country rose marginally to 92.20 crore in January, on the back of increase in rural subscribers, sectoral regulator TRAI said on Wednesday. The overall user base stood at 91.51 crore at the end of December 2013, Telecom Regulatory Authority of India said. — PTI

SpiceJet shares rise over 3% on Boeing deal
Mumbai: Shares of SpiceJet rose by over 3% on Wednesday after the company placed an order for 42 737 MAX jets with the US aircraft maker Boeing for $4.4 billion (Rs 26,000 crore). After surging 7.49% to Rs 15.20 in intra-day trade, it finally closed at Rs 14.61, up 3.32% on the BSE. — PTI

P&SB hosts College of Agri Banking meeting at Noida
Chandigarh: Punjab & Sind Bank hosted the 92nd meeting of Prashikshan Samanvya Samiti of College of Agriculture Banking, RBI, at the National Institute of Banking Studies and Corporate Management, Noida, on Tuesday. The meeting was chaired by US Paliwal, principal general manager, RBI. The focus of the meeting was to review the use of Hindi in training programmes conducted by Staff Training Colleges of public sector banks. — TNS

WEF announces Young Global Leader awards
Shimla: Anurag Thakur, Member of Parliament and national president of Bhartiya Janta Yuva Morcha, has been selected as Young Global Leader-2014 by the World Economic Forum (WEF) in recognition of his contribution in the field of politics, sports and women empowerment. Along with Thakur, the WEF has also selected film-maker Farhan Akhtar, Azim Premji’s son Rishad Premji, Flipkart CEO Sachin Bansal, Tata Starbucks’ CEO Avani Davda and HCL chief executive Roshni Nadar Malhotra for the award. — TNS