New Delhi, October 14
With inflation touching a five-year low, Finance Minister Arun Jaitley today said steps taken by the government had contributed to the fall and promised reforms in the food market, a new monetary policy and fiscal consolidation to achieve a low inflation rate.

Jaitley said WPI for September at 2.38% shows that inflation fell significantly dipping to a 5-year low. Data for consumer price inflation for September at 6.46% released yesterday had also shown a decline.

Taking credit for the fall in inflation which has been a bugbear of the economy, Jaitley said, “It is heartening to note that we have been able to bring food inflation under control. Growth in vegetable and protein prices that have been contributing to the recent increase in inflation rates has shrunk thanks to the steps taken by the government”.

The Finance Minister added that the government is committed to continuing reforms in food markets that will improve supply responses and keep inflation low and stable. At the same time, fiscal consolidation and a new monetary policy framework will help bring down inflationary expectations. “We are confident that soon we will achieve a low and stable inflation rate,” he added.

A steep fall in fuel prices along with easing food prices led to a sharp fall in headline inflation for September to a five-year low of 2.38%.

Coming around the festival season of Diwali, the sharp drop in inflation with an expected cut in petrol and diesel prices will be a relief for the common man and the economy, which has been struggling against a stubborn inflationary spiral for a few years now. Inflation numbers in the next couple of months will be boosted by the base effect of last year.

The Wholesale Price Index (WPI) based inflation was at 3.74% in August and 7.05% in September 2013. As per data released by the government today, the food inflation fell to a nearly 33-month low of 3.52%.

Assocham president Rana Kapoor said, “With WPI-based inflation touching a five-year low and the retail level of price rise too reaching the lowest since January, 2012, we could not have asked for more in so far as this key area of the macroeconomic picture is concerned. Falling crude oil prices have played a decisive role in taming inflation and fortunately, the outlook on this score looks on the positive for India”.

Crisil said in a note that over the next 2 months, headline CPI inflation could ease further due to a base effect from last fiscal, lower crude oil prices, revival of monsoon and proactive measures by the government keeping food prices under control, and a stable currency.

The government is committed to continuing reforms in food markets that will improve supply responses and keep inflation low and stable. At the same time, fiscal consolidation and a new monetary policy framework will help bring down inflationary expectations
Arun Jaitley, finance minister

New Delhi, October 14
Shares of DLF lost more than a quarter of its market capitalisation in a single trading session, leaving investors poorer by $1.2 billion following the SEBI order yesterday barring the company and its top brass from the capital markets for a period of three years.

DLF shares ended down 28.46% at Rs 104.95 on the BSE and were down 27.98% at Rs 105.80 on the NSE. The shares fell to a record low from the time of its listing when it had a market cap of more than Rs 1 lakh crore.

Analysts said the SEBI order, Competition Commission’s penalty of Rs 600 crore and controversy over land deals in Haryana would continue to put pressure on the stock amid investor concerns.

Deutsche Bank said in a note that this is another regulatory and judicial pronouncement against the company over a short period, after the Supreme Court in late August asked the company to deposit Rs 630 crore within 3 months. “While we remain cognizant of the possibility of reversal or dilution of the order in securities tribunal or higher courts, we believe this issue is likely to remain an overhang for sentiment until final resolution,” it said.

“We believe the SEBI order will not materially alter the company’s operations. However, it will push forward any plans for further equity issuance and also postpone value-unlocking in rent-yielding commercial portfolio through REITs.

There also investor concerns over the large debt that the company has and with equity being ruled out, it may have to sell some non-core assets. 

New Delhi, October 14
India’s exports rose by a marginal 2.73% to $28.9 billion in September, but trade deficit more than doubled to $14.2 billion in the month due to a surge in gold imports.Trade deficit in September, 2013 was $6.12 billion.

Gold imports in the month under review increased manifold to $3.75 billion compared to $682.5 million in same month last year. Overall imports jumped by about 26% to $43.15 billion.

During April-September period, exports registered a growth of 6.47% to $163.7 billion.

Imports during the period grew by 1.57% to $234 billion, leaving a trade deficit of $70.39 billion in the first half of the current fiscal.

India’s export growth had slipped by 2.35% at $26.95 billion in August. — PTI

Helsinki, October 14
Finnish mobile manufacturer Nokia wants early permission to sell off its plant in Chennai and put the money from the deal in escrow account till the time its tax dispute with Indian government is resolved.

“We have said that if we are allowed to sell the factory, any money we get from the sale, we would put it in the escrow account. It won’t be ours. We would put it in a place until the tax dispute is resolved,” Barry French, executive vice-president, marketing, Communications and Corporate Affairs, Nokia, said.

In first comments by a top executive after Nokia’s last week’s decision to suspend operations at its mobile manufacturing unit near Chennai, French expressed concern over the status of the plant and its declining value.

“What is particularly crazy is that the value of the facility is going down literally every day,” he said.

“It would be in the interest of everybody that we get what value we can get from the amount,” he added. — PTI

New Delhi, October 14 
Diesel price is likely to be cut by close to Rs 2.50 a litre, the first reduction in more than four years, after code of conduct for Assembly elections is lifted.

“You know there is election code of conduct... We will take the right decision at the right time,” Oil Minister Dharmendra Pradhan said here.

Diesel is a government-controlled commodity on which oil companies started to make maiden profit only last month. But since election code of conduct had come into place, a cut in prices necessitated by the sharp drop in oil prices was put off. — PTI 

BRIEFLY

Indirect tax collection up 5.8% in April-September
New Delhi: Indirect tax collection inched up 5.8% in the April-September period of this fiscal. Indirect tax collection, comprising excise, customs and service tax, stood at Rs 2,41,811 crore in the first six months of 2014-15 fiscal as against Rs 2,28,619 crore in the corresponding period a year ago, the Finance Ministry said. The growth at 5.8% is far less than 25% annual increase envisaged in the Budget for the full 2014-15 financial year. — PTI

Bajaj Auto posts Q2 profit of Rs 591 crore
New Delhi: Bajaj Auto on Tuesday reported a net profit of Rs 590.90 crore for the three months ended September, hit by a one-time expense of Rs 340.29 crore related to Pantnagar plant in Uttarakhand. Net sales during the period under review stood at Rs 5,826.85 crore as against Rs 5,061.49 crore in the year-ago quarter, the company said. — PTI

Govt clears 25 FDI proposals worth Rs 1,546 crore
New Delhi: The Finance Ministry has approved 25 FDI proposals, including six of single-brand retail trade, envisaging a total investment of Rs 1,546.12 crore, and referred a Rs 1,800-crore pharma proposal to the Cabinet for consideration. — PTI

Re falls 31 paise vs $ to 1-week low of 61.41
Mumbai: Tracking equity markets, the rupee on Tuesday wiped out initial gains and ended 31 paise down at a one-week low of 61.41 against the greenback on fresh dollar demand from banks and importers. Persistent foreign capital outflows also affected the the rupee sentiment, forex dealers said. — PTI

SEBI fines Glaxo for delayed disclosure in Indian listed arm
Mumbai: SEBI on Tuesday slapped a fine of Rs 25 lakh on Glaxo Group Ltd, a promoter entity of drug maker Glaxo Smithkline Pharmaceuticals, for failing to make timely disclosures about its aggregate shareholding to the company and the stock exchanges. Glaxo Group "neglected the duty of making timely disclosures" to the stock exchanges the BSE and the NSE, on various occasions, the SEBI said. — PTI

SEBI finds ex-Tata Finance MD guilty of illegal trades
Mumbai: In a high-profile case dating back to over 12 years, SEBI has found former Tata Finance managing director Dilip Pendse had executed "illegal transactions" in stocks of four firms, including Infosys and erstwhile Telco. The order prohibits Pendse from accessing capital markets for two years. — PTI