NATIONAL UPDATES
Sri Lanka assures India of political settlement, 7 pacts signed
The visit by Sri Lanka’s president assured India of a political settlement for minorities and quicker rehabilitation of the displaced Tamils as New Delhi announced a host of initiatives for reconstruction of war-hit provinces of the island country including building 50,000 houses, rail network and a thermal power plant. And it provided both sides the opportunity to signal a readiness to take the bilateral relationship to a new level. It was the first time in a quarter century that New Delhi played host to a Sri Lankan head of state who arrived without the burden of a raging ethnic conflict back home.
The two sides signed seven pacts to boost bilateral cooperation across a range of areas, including security, energy, railways and cultural exchange.
- In steps to enhance friendly relations, India agreed to open consulates in Jaffna and Hambantota, launch a CEOs forum to invigorate trade ties and start an 'India-Sri Lanka Knowledge Initiative' to expand collaboration in educational sector.
- A major initiative to undertake a programme of construction of 50,000 houses for Internally Displaced Persons in the Northern and Eastern Provinces. Colombo promised to resettle all 300,000 war displaced people within six months of defeating the Liberation Tigers of Tamil Eelam, it has now set August as the deadline for closure of relief camps housing the refugees.
- Both leaders condemned terrorism in all its forms and manifestations. They also agreed to strengthen the security and legal framework of their bilateral relationship. To this end, the leaders witnessed the signing of two Agreements
- For improving connectivity, the two sides signed an agreement for the reconstruction of the Madu-Talaimannar railway line and agreed to fast-track other rail projects for which India has pledged $800 million lines of credit.
- Recognising the need to speedily restore the traditional links between the two countries, both leaders agreed to resume the ferry services between Colombo and Tuticorin and between Talaimannar and Rameswaram. They directed their respective officials to put in place the mechanisms to start these services at an early date
- Recognizing the considerable benefits from greater economic cooperation between the two countries, the two leaders noted the progress achieved under the India – Sri Lanka Free Trade Agreement. They agreed that it would be timely to build on this achievement through a more comprehensive framework of economic cooperation, best suited to the two countries. In this context, they directed the concerned officials of the two countries to hold intensive consultations towards developing a framework for sustainable economic partnership between the two countries and addressing outstanding issues.
- Another new initiative that was fleshed out during the talks entailed India's National Thermal Power Corporation (NTPC) collaborating with the Ceylon Electricity Board of Sri Lanka for building a 500 MW coal-fired plant at Sampur (Trincomalee). The two sides agreed to finalise all relevant arrangements for the power plant within three months as India pledged another $200 million for the project. A memorandum of understanding (MoU) on conducting feasibility studies for interconnecting electricity grids of the two countries was also signed. Deep sea power cables could be used to integrate the grids of the two countries.
- Increased development cooperation was reflected across other pacts inked that included an MoU on developmental projects and setting up of a women's trade facilitation and community learning centre by SEWA, an Ahmedabad-based NGO.
Keshub Mahindra Convicted In Bhopal Case
Twenty-six years after the world's worst industrial disaster that killed an estimated 25,000 people, a Bhopal court today convicted eight former top managers of Union Carbide India (UCIL), from whose factory deadly gas had leaked out into the city. Those convicted include Keshub Mahindra, 85, former non-executive chairman of UCIL. He is presently chairman of Mahindra
& Mahindra.
Chief Judicial Magistrate Mohan Tiwari awarded the maximum sentence, of two years imprisonment, to all of them on the charge of causing death by negligence. They were entitled to apply for, and got, bail almost immediately.
Warren Anderson, the then Chairman and CEO of Union Carbide Inc, however, is not on the list, as he is formally still an absconder and did not subject himself to trial. The 89-yearold Anderson lives in the US.
Leakage of deadly methyl isocyanate (MIC) gas from UCIL’s plant in Bhopal on the night of December 2-3, 1984, had also left tens of thousands of others injured and maimed. In the years that followed, people exposed to the gas kept dying.
The guilty, including the managing director, the production manager and the plant supervisor, were also ordered
to pay a fine of Rs 1 lakh each. Of the eight convicted, one, R B Roychoudhury, had already died. The court also fined the former Indian unit of Union Carbide a sum of Rs 5 lakh.
The company executives were originally charged with culpable homicide but — to the outrage of survivors and victims’ — the Supreme Court in 1996 reduced the charge to death by negligence, with maximum imprisonment of two years.
Victims and members of human rights group are not happy with the verdict announced by Mohan Tiwari.
Dow Chemical bought Union Carbide in 1999 but says all liabilities related to the accident were cleared in a $470 million out-of-court settlement with the Indian government in 1989.
In a statement issued after the verdict, Union Carbide washed its hands off the case and said its executives in the
US were not part of the case, since the charges were divided long ago into a separate case. Furthermore, Union Carbide and its officials are not subject to the jurisdiction of the Indian courts since they did not have any involvement in the operation of the plant, which was owned and operated by UCIL (Union Carbide India Ltd). Adding that the operation and management of the plant on a day to day basis was done by UCIL.
Mallya files papers as JD(S)-backed candidate
LIQUOR baron Vijay Mallya and former industrialist and coal minister Santosh Bagrodia filed his nomination papers as JD(S)-backed independent candidate for the June 17 biennial elections to Rajya Sabha from Karnataka and Rajasthan,. Mr Mallya would need the support of 20 more MLAs for his victory in the first round besides getting 27 votes from JD(S). But both Congress and the BJP parties have made it clear that they will support Mr Mallya. Congress leader Oscar Fernandes has already filed his nomination from Karnataka for the elections to fill four vacancies for which five candidates are contesting. Opposition Congress fielded its second candidate for the polls with T V Maruthi, a businessmen, also filing his nominations on the last day for filing of papers.
India, Canada to sign nuclear deal
INDIA AND Canada will sign a civil nuclear agreement during Prime Minister Manmohan Singh's forthcoming visit to the G-20 Summit in Toronto later this month. The four-day visit commences on June 26. The agreement will be signed after a bilateral meeting between Mr Singh and his Canadian counterpart, Stephen Harper, who will be hosting a special dinner in honour of the prime minister on June 27. The two countries will also review their bilateral economic and cultural ties.
Indian Art Attains Glory
A PAINTING by Syed Haider Raza sold at Christie's for £2.4 million (Rs 16.42 crore), making it a record for any modern or contemporary Indian work of art. Saurashtra, a 7-foothigh, richly-coloured abstract dating from 1983, had been expected to sell for £1.3-1.8 million.
This comes after a collection of 152 works by one of the country’s priciest modern artists, FN Souza, on Wednesday night fetched £5.4 million with fees, exceeding a presale upper forecast of £2.3 million, based on hammer prices.
The work, with his famous bindu, embodied a growing and strong India. Now, he has taken India and its art to greater heights: the bindu symbolising the growing importance of Indian art.
NAC focus: Food security, tribals
Tribal development will be one of the top priorities of the reconstituted National Advisory Council (NAC) along with focus on disadvantaged groups. The group held its first meeting on Thursday with Sonia Gandhi back as chairperson.
The issue of food security and natural resource management, land rights and land reforms, right to health and right to education, urban poverty, rural regeneration, the northeast and the plight of internally displaced people came up at the meeting.
The members of NAC pointed out that the issue of tribal rights and development had to be located in a larger context than just the Naxalism issue.and it needs to be addressed as they were a ‘disadvantaged group’ and not because Naxalism was dominant in central tribal belts.
Former Goa minister Mickky in hot water
FORMER Goa tourism minister Mickky Pacheco has been charged with culpable homicide, not amounting to murder, abetting suicide and destruction of evidence in the Nadia Torredo death case. Nadia, a ‘close friend’ of Mickky, died on May 30 — 15 days after ‘mistakenly’ consuming large quantities of rat poison for toothpaste.
Tribunals for economic disputes, offences likely
THE government plans to set up special dispute resolutions panels and courts to resolve economic offences and disputes, as it looks to make a clear distinction between cases of general and specialised nature. The proposal will now be discussed and finalised by the law ministry. It may require changes in existing legal framework.
This initiative follows a suggestion made by the Prime Minister’s Council on Trade and Industry, which called for a special dispute resolution mechanism to administer all existing and future economic legislations. The first meeting of the reconstituted council was held on May 26. The meeting, chaired by the prime minister, was attended by eminent industrialists such as Rata Tata, Mukesh Ambani, RP Goenka, Azim Premji, Sunil Mittal, Deepak Parekh, Rahul Bajaj, NR Narayanamurthy and Kumaramangalam Birla.
World's tallest rail bridge in Jammu & Kashmir
UPCOMING railway line connecting Srinagar with the plains will have the world’s tallest as well as India’s highest railway bridge. Safety norms forced the Railways to stop implementation of the major stretches of the Katra-Qazigund part of the prestigious project. An IIT team recently visited Reasi district and found the ongoing construction on the 359 meters high bridge fulfilling all the safety norms. This bridge is taller than the Eiffel Tower. Located at Kauri hamlet, around 40 kms from Reasi, it is being implemented by Afcons Infrastructure Limited. Once ready it will beat surpass the record of Millau Viaduct in France that is the highest cable stayed road bridge in the world. Its construction was stopped on July 12, 2008, forcing Railways to appoint a sevenmember team to examine the safety concerns. Its height from the bottom of the Anji gorge will be 180 meters with a span of 2200 meters.
A national project, linking Kashmir with Jammu has been a long pending dream of the policy makers in Delhi. While Jammu is already linked with Udhampur, caving in of certain tunnels delayed the start of the Udhampur-Katra stretch that is otherwise ready. The rest of the track has two sections, one connecting south Kashmir Qazigund with north Kashmir Baramulla which is functional for over a year now. Completion of the Qaigund-Katra section will complete the project but will take many more years and lot of money.
And now, power generation from poultry litter!
Small and medium enterprises (SMEs) engaged in poultry farming in Haryana will soon use poultry litter to generate power for the state power grid. The initiative, by a cluster of over 150 poultry farms in Haryana’s Barwala belt, will
convert poultry litter into power, thereby both checking environmental pollution and adding to the power availability
in the region. The project is being implemented by Green Industry Bio Energy Private Limited, a special purpose vehicle (SPV) formed by Emergent Ventures and US-based Indus Terra. The project will have a debt equity ratio of 70:30. The SPV is attempting to get debt from the India Renewable Energy Development Agency. The HREDA is a facilitator.
INTERNATIONAL UPDATES
Iran says new curbs fit to be thrown into ‘dustbin’
A defiant Iran described new UN sanctions as a “used handkerchief that should be thrown into the waste bin” and said it would continue uranium enrichment that world powers suspect may be aimed at developing nuclear weapons.
In Vienna, Iran’s envoy to the International Atomic Energy Agency (IAEA) Ali Asghar Soltanieh dismissed Wednesday’s UN vote as another dark chapter of mistakes and miscalculations and said he hoped the major powers would reconsider their “mistakes”.
A US-drafted sanctions resolution was adopted by 12 votes to two in the UN Security Council on Wednesday, with Lebanon abstaining and Brazil and Turkey voting against.
Although swiftly hailed by the US, Britain and France who cosponsored the resolution, the sanctions drew an immediate, scornful reaction from Iranian president Mahmoud Ahmadinejad.
4m Pakistanis under Taliban rule: Amnesty
Amnesty International has said millions of people in the lawless region live in a “human rights-free zone” without legal protection and are subjected to abuses by the Taliban.
“Nearly four million people are currently living under the Taliban in northwest Pakistan without rule of law and are effectively abandoned by the Pakistani government,” Amnesty’s interim secretary-general Claudio Cordone said.
In a report titled “As if Hell Fell on Me: The Human Rights Crisis in Northwest Pakistan”, the London-based rights organization asked the Pakistan government and Taliban to comply with international humanitarian law. According to Amnesty, at least 1,300 civilians were killed in the fighting in northwest Pakistan in 2009.
Taliban rain death in Af-Pak
A suicide bomb ripped through a wedding party for a family with ties to police in the Taliban’s heartland in Afghanistan, killing at least 40 people and wounding dozens more.
Iran aid ships to challenge Israel
Iran challenged Israel by declaring that it will send three aid ships to Gaza. Iran informed that its Navy would be ready to escort the ships delivering humanitarian assistance to the residents of Gaza. In the latest bid to break the blockade imposed on Gaza by the Israel, Iran also declared that it will send a plane carrying 30 tonnes of medical equipment to Egypt for onward delivery to Gaza. two ships would head for Gaza this week, followed at a later date by the third one. The cargo on one of the vessels would include food, medicine and appliances. They will despatch a navy hospital ship for the people of Gaza, which will have onboard doctors, nurses and all the medical equipments required for emergency surgeries and procedures. The vessels will be guided in coordination with the Turkish government. The third vessel would be equipped with an onboard operating theatre and would head for the Palestinian territory at a later date. The Red Crescent had called for more than 20,000 relief workers to accompany the first two vessels.
ECONOMY, BANKING & FINANCE
Industrial growth surges 17.6 per cent in April
Industrial output continued on the double-digit growth track for the seventh straight month in April, surging by a faster-than-expected 17.6 per cent from a year earlier, the strongest since the 17.7 per cent recorded in December 2009.
The strong rebound in the Index of Industrial Production (IIP) estimates in April, aided by a low base, was possible on account of a strong showing by the manufacturing sector, led by the capital goods sector and the consumer durables segment.
Manufacturing output, which has an 80 per cent weight in the industrial output index, surged 19.4 per cent on an annual basis in April compared with 0.4 per cent growth a year earlier.
Growth was led by a whopping 73 per cent increase in production of capital goods while consumer durable goods output grew 37 per cent during the latest month. Mining output rose 11 per cent, compared with 3.4 per cent a year earlier.
Power generation increased 6 per cent in April, slower than a 6.7 per cent rise a year earlier.
Responding to the data, India Inc. expressed the hope that the robust industrial growth trend in April will help the economy grow by 8.5 per cent in this fiscal.
Rs 4,800-cr Infotel buy signals Mukesh Ambani's telecom re-entry
Reliance Industries Ltd (RIL) made a dramatic return to the telecommunications sector by buying Infotel Broadband just hours after the Nahata family owned company became the sole winner of pan-India broadband airwaves in an auction. It will mark the first major diversification by India’s largest private sector firm after its entry into retail four years ago, and comes less than three weeks after the Ambani brothers decided to annul agreements that prevented each from operating in sectors where the other was present. Mukesh Ambani-run RIL said that it will acquire a 95% stake in Infotel Broadband for Rs 4,800 crore by subscribing to fresh equity.
The auction of broadband wireless access (BWA) spectrum delivered the government an unexpected bonanza of Rs 38,543 crore ($8.25 billion), twice the amount predicted by analysts. Infotel Broadband Services alone emerged as the successful bidder for Rs 12,848 crore in all the 22 circles of the auction for broadband wireless access (BWA) spectrum conducted recently by the Department of Telecommunications (DoT). In the BWA space, no other player could bag pan-India spectrum.
In comparison, India’s largest telco by customer and revenues, Bharti Airtel, paid about Rs 12,300 crore for 3G frequencies in 13 circles.
The combined revenues for the Centre from the 3G auction that ended last month and the sale of BWA spectrum is Rs 1.06 lakh crore. The government expected to get Rs 35,000 crore. The net impact will be that lower government borrowing will be made up for by larger corporate borrowing to fund the bids.
RIL now controls more spectrum than any of the established telecom players, and will pay, per MHz of spectrum, one-fifth of what 3G bidders have.
Infotel-RIL deal
• RIL to buy 95% stake in Infotel Broadband, the only company to bag pan-India BWA licence
• Infotel to pay Rs 12,848 crore for BWA airwaves
• It has secured 20 MHz of spectrum in every single one of India’s 22 telecom circles
• Bid to be funded through RIL's Rs 4,800-crore equity investment and debt of Rs 8,000 crore
• RIL to roll out wireless broadband services using upcoming 4G technology platform LTE
IMPACT ON FISCAL DEFICIT
• 3G and BWA auctions fetch Rs 1.06 lakh crore for govt against estimates of Rs 35,000 crore
• Auction proceeds expected to bring down fiscal deficit for FY11 to 4.5% of GDP against govt estimates of 5.5% of GDP
• Budgeted fiscal deficit for FY11 to come down to Rs 3,10,146 crore from Rs 3,81,408 crore
RBI weighs letting MFIs become ‘biz correspondents’
The Reserve Bank of India is considering a proposal put forward by profit-oriented microfinance institutions (MFIs) to allow them to be business correspondents of banks for financial inclusion. This issue is currently under examination and in doing so possible risks such as conflicts of interest, co-mingling of funds, misrepresentation and other agency-related risks would need to be weighed against possible safeguards for consumer protection.
MFIs have managed to provide finance to over 2.2 crore poor rural households. However, about 80% of funds are disbursed through profit-oriented MFIs registered with RBI as NBFCs, which are not allowed to use the banking system to lend loans. Hence, they do not contribute directly to the financial inclusion in the strict sense of the term.
Financial inclusion primarily represents access to a bank account backed by deposit insurance, access to affordable credit and the payments system
If the central bank considers the NBFC-MFI demand to allow them to function as business correspondents for banks for financial inclusion, the level of financial inclusion could go up significantly. Currently, several non-bank entities such as kirana shops and village heads, among others, are allowed to operate as business correspondents for banks, especially in areas where banks do not have a reach. According to official figures, only about one third of Indians currently have access to any formal finance.
Nod to Phase-II of scheme on tech education upgrade
The government has approved the proposed investment of Rs 2,430 crore to initiate the second phase of the Technical Education Quality Improvement Programme (TEQIP). About 200 engineering colleges, selected on a competitive basis, would be given assistance to bring their standards close to those of the Indian Institutes of Technology.
Of the total project expenditure of Rs 2,430 crore in the second phase, the World Bank will contribute Rs 1,395.50 crore, the Centre’s contribution according to 11th five-year Plan is Rs 500 crore, while the states and private unaided institutions will invest Rs 518.50 crore and Rs 16 crore, respectively
The institutes benefiting by this programme would include Centrally-funded institutions such as National Institute of Technology, along with a small number of eligible private unaided institutions. The project will also support universities that affiliate project institutions. The project will be open for competition and participation by all the engineering institutions approved by the All India Council for Technical Education.
Govt open to changes in 25% holding norms
THE government is open to any modification or amendment in the new norms making minimum 25% public holding in listed companies mandatory.
The new rule implies that any company listing its securities on a stock exchange will be required to have public float of at least 25%. Already, listed companies having a public float of less than 25% have to mandatorily raise their public shareholding by a minimum of 5% every year till it reaches 25%.
Concerns have been expressed in different quarters that the new norm will lead to flooding of public offers and dampen the market sentiments and lead to delisting of shares by multinational companies. According to an estimates, listed companies, including PSUs, will have to come out with public offers worth Rs 60,000 crore this fiscal.
A recent study by Crisil Equities said there are 179 listed companies that have public shareholding below 25 %.
The finance ministry had put this proposal in public domain for stakeholder comments in February 2008 with the intent of deepening and broadbasing the stock market and checking volatility in stock markets by reducing concentration of shares in a few hands. The proposal received a fresh impetus with the finance minister Pranab Mukherjee announcing in his budget 2009-10 speech that the norm would uniformly apply to all listed companies without any exception.
Govt to list 35 PSUs; targets Rs 1.5 lakh cr in 5 yrs
The government on Wednesday said that it would list 35 public sector companies on stock markets over the next five years. The move would generate about Rs 1.5 lakh crore in revenues for the Centre. This move is waiting for the finance ministry’s approval.
Banks borrow big, SBI creates a flutter with CD offer
BANKS continued to be net borrowers on Wednesday, raising Rs 66,170 crore from RBI at 5.25%. This is the third consecutive day when banks have borrowed over Rs 60,000 crore from the central bank by pledging government securities. This is repo window through which banks raise funds by pledging government securities.
State Bank of India (SBI), stepped in to raise money by issuing certificate of deposits (CD). The bank had raised Rs 725 crore though CD issuances on Tuesday at 5.90% for six months and looking at raising another Rs 1,000 crore.
Over the past one-and-a-half year, SBI has had surplus liquidity in the range of Rs 35,000-50,000 crore. Any borrowing by SBI, therefore, creates panic. The tight liquidity condition since the beginning of this month is on account of Rs 68,000-crore outgo that telecom companies have to pay to government as licence fee for third generation bandwidth. Money market analysts feel that panic has been aggravated also because banks had not accounted for the outgo on account of auction of broadband wireless access (BWA) spectrum to telecom companies. They expect an outgo in the range of Rs 20,000-30,000 crore which will take its toll on liquidity. The comforting aspect is that the outgo due to BWA, may be by the end of the month.
National Housing Bank To Request RBI To Raise Lending Ceiling To Rs 10 Lakh
National Housing Bank, or NHB, said it will request RBI to encourage banks to lend more to housing finance companies (HFCs) under priority sector status. Loans classified as priority sector are cheaper than normal rates. Banks offer around 100 basis points discount for its priority sector loans to housing finance companies.
Banks give indirect housing loans to HFCs for on-lending to individuals. At present, such loans up to Rs 5 lakh have been classified as priority sector lending. NHB plans to suggest the central bank to raise the ceiling to at least Rs 10 lakh.
NHB, which is wholly owned by RBI, is the central agency for promoting and regulating housing finance companies. NHB plans to push the Rs 10-lakh cut-off simple as the government offers 1% interest subvention on housing loans up to Rs 10 lakh.
It may be recalled that under the government’s stimulus package, RBI increased the cut-off amount for priority sector indirect housing loans to Rs 20 lakh from Rs 5 lakh. The norm was in force till March 31, 2010. However, banks’ direct housing loans up to Rs 20 lakh continued to earn priority sector status.
The Rs 5-lakh limit for priority sector lending was originally fixed to encourage lenders to channel housing loans to economically weaker segment (EWS). But experts in the real estate field said it is difficult nowadays to restrict the project cost for EWS dwelling units to Rs 5 lakh.
Irda tightens norms for appointment of corporate agents
Tightening norms for the appointment of corporate agents, insurance regulator Irda has said that agents handling big clients can now only be appointed by officials designated by the company’s board. According to the IRDA, the appointment can be made only by the CEO, CFO or chief marketing/sales officer, among others, designated for the purpose by the board of the insurer. Irda, in a circular issued on Monday night, said the decision to appoint a “person holding a valid licence as a corporate agent, on transfer from other insurer, will be taken only in the corporate office of the insurance company. And The officer shall obtain and record the reasons leading to cancellation of Corporate Agency Agreement with the earlier insurer” The insurers are mandated to submit a list of officers designated for licensing corporate agents by 30 June, and they are required to scrutinize the agent’s track record prior to his/her appointment. It also said that insurance companies have to get contact details of all policyholders, inform each of them that their agent has quit, and give assurances that alternative arrangements are being made to service them. The process of inspection of corporate agents should be completed by 30 September of every year, starting 2010. A day after issuing instructions for inspection, Irda struck off its list 4,261 corporate agencies which were due for renewal on or before March 31, 2010, but have not been renewed till date.
In the cases where banks have been appointed as insurance agents, insurance companies have been asked to ensure that the bank is not forcing customers to buy insurance by bundling the cover with any banking product.
Tax exemption limit on gratuity raised to Rs 10 lakh
The government on Friday raised the income tax exemption limit on gratuity from Rs 3.5 lakh to Rs 10 lakh, with effect from May 24. The new rule will apply to employees who retire, become incapacitated, are terminated or die on or after May 24, 2010. Earlier, the Parliament had approved raising the limit of gratuity to be exempted from income tax. The Payment of Gratuity (Amendment) Bill, 2010, was passed by the Parliament in this regard in the budget session. While the sixth pay commission had raised the limit for central government employees, the Cabinet later enhanced the ceiling for the private sector employees as well.
4 highway projects get Cabinet nod
Four highway projects worth Rs 2,536.16 crore got the Cabinet Committee on Infrastructure (CCI) nod covering Bihar, Gujarat, Madhya Pradesh, Uttar Pradesh and West Bengal.
For West Bengal, the CCI approved four-laning of the 78-km long Krishnanagar-Bahrampore section of the NH-34. The CCI also approved the two-laning of the Muzaffarapur-Sonbarasa section of NH-77 in Bihar. Other approvals include the four-laning of the Jetpur-Somnath section of the NH-8D in Gujarat and two-laning of the Jhansi-Khajuraho section of NH-75 in Madhya Pradesh and Uttar Pradesh.
Chhattisgarh to set up 11 industrial parks
The Chhattisgarh government will set up 11 industrial parks in various cities across the state. industrial parks for different sectors would be set up at 11 places. The sectors include gems and jewellery, herbal and medicine, food processing, metal, apparel, aluminium, plastic, gramodyog (village industry), pharmaceutical and so on.
Private freight terminal (PFT) gets finalised
The Ministry of Railways has finalised a policy on private freight terminal (PFT) the main aim of which is to enable rapid development of network of freight terminals with private sector participation. The policy is also likely to lead to integration of rail transport with supply chain to provide efficient and cost-effective logistic to end-users and a new business opportunity to investors to get railway access to handle third-party cargo. The main features of the PFT, which will be allowed to handle all cargo except for outward coal, coke and iron ore, include terminals being allowed to come up on a greenfield or brownfield basis but only on private land.
New real estate exposure norms for urban co-op banks
Reserve Bank of India has revised the norms for urban cooperative banks for giving loans to the housing and real estate (RE) segment. Working capital loans to small contractors against hypothecation of construction material are exempted from the existing norms that allows UCBs to use 15 per cent of the total deposits for giving loans for housing and commercial real estate, RBI said. The 15 per cent ceiling was reckoned on total deposits at the end of March 31 of the previous financial year. The exposure to compute the ceiling will include fund and non-fund based facilities extended to customers.
Rs 1,400-cr green urban transport project launched
The Urban Development Ministry has launched a Rs 1,400-crore green urban transport project called the Sustainable Urban Transport Project (SUTP).
The Global Environment Facility, The World Bank and the United Nations Development Programme are providing both technical and financial assistance for its implementation. This is the first time that such multiple international funding agencies have come together for a transport project in India. Under the project, green urban transport will be introduced in select cities to overcome pollution and other hazards of the existing urban transport system, including traffic impediments for pedestrians.
The Government has given high priority to improved urban transport since the launch of the JNNURM (Jawaharlal Nehru National Urban Renewal Mission). More than 12,000 buses have been sanctioned for 60 cities under the mission for the improvement of public transport, while capacity building efforts for better public transport were also being made.
Independent transport body would be established or better governance and planning of public transport.
Centre keen on nodal vendor for mobile cos
THE Centre has mooted a proposal to set up a company that will be owned by all telecom operators and will be responsible for managing, maintaining and building communication networks for them. All international equipment suppliers—Nokia Siemens, Ericsson, Huawei, and Alcatel Lucent, among others—will execute contracts for all service providers through this company, if this proposal becomes reality, a department of telecom (DoT) .
The proposal is based on the premise that getting telcos and gear makers to operate within such a set-up will address security concerns arising out of foreign, especially Chinese, telecom equipment companies building and managing telecom networks in the country.
At present, he networks of India’s largest firms—Bharti Airtel, Reliance Communications (RCOM), Vodafone, Tata Tele and Idea—are being managed by international equipment suppliers such as Ericsson, Nokia Siemens, Huawei or Alcatel-Lucent. RCOM has outsourced its GSM network management to China’s Huawei while Loop Telecom has tied up with another Chinese firm, ZTE, for its GSM rollout across India.
BPOs eye rural market, new biz models to outdo rivals
FOR INDIA’S over $15-billion BPO industry, the next big shifts include hiring more resources in the markets they serve, moving away from traditional voice-based low margin business and leveraging the rural market for creating another delivery layer that could further reduce costs. India is already losing around 70% of all incremental voice, call centre business to newer rivals such as Philippines.
at the BPO Strategy Summit 2010, hosted by software lobby Nasscom, was how best Indian outsourcing service providers can innovate to improve customer engagement, take advantage of the changing business landscape and expand geographically.
Nod for mid-term appraisal of XIth Plan
The mid-term appraisal (MTA) of the Eleventh Five-Year Plan (2007-12), which scaled down the average growth target of the economy to 8.1% from 9%, has been approved. The MTA will now be placed before the National Development Council (NDC), the highest policy making body in the country headed by the Prime Minister. The commission had lowered the growth rate for the current plan to 8.1% from 9% in the wake of the global financial crisis that slowed the rate of economic expansion. The commission had projected in the MTA that the economy would expand by 8.5% in the current fiscal.
Pulses, milk push up inflation to 16.74%
FOOD price inflation rose for the second week running due to a rise in the prices of essential commodities such as fruit, pulses and milk, defying the government’s efforts to tame runaway food prices.
An index tracking wholesale food prices climbed to 16.74% for the week ended May 29 compared with 16.55% in the previous week. The unabated increase in the prices of essential items is expected to force the Reserve Bank of India to tighten the liquidity in the system in the first quarter review of monetary policy on July 27.
In April, the wholesale pricebased inflation stood at 9.59%, slightly lower than the March number. The RBI has pegged the wholesale price-based inflation at 5.5% by the end of this fiscal.
Cotton acreage shrinks in TN, rises in Karnataka
Tamil Nadu has seen a drop in cotton actreage this season in the backdrop of an expectation that the area under the crop would rise across India. Tamil Nadu, Karnataka and Andhra Pradesh account for over 7% of the national output. Cotton acreage (according to Cotton Advisory Board data) in Tamil Nadu stood at 1.09 lakh hectares in 2008-09 but slipped to 1.04 lakh hectares in 2009-10 and is pegged at 95,000 hectares in 2010-11.
In Karnataka, estimates indicate there would be around 25-30% of acreage diversion from maize and potato to cotton, notably in Hassan district.
Govt raises support price for pulses to perk up production
To promote pulses production, centre has raised their minimum support price by between 14 and 30 per cent even as it effectively pegged the support price for paddy at the same level as last year. THE government on Thursday raised the minimum support price of paddy by Rs 50 per quintal to Rs 1000 per quintal in what may push up its food subsidy bill, pegged at Rs 5 5,578.18 crore in the current fiscal.
The Cabinet Committee on Economic Affairs, presided by the Prime Minister, Dr Manmohan Singh, went beyond the recommendations of the Committee for Agricultural Costs and Prices (CACP) in raising the MSP for pulses, particularly for arhar (tur).The CACP had recommended an MSP of Rs 2,800 a quintal for arhar against Rs 2,300 last year. But, the Government decided to fix it higher at Rs 3,000, an increase of roughly 30 per cent. The MSP for moong has been raised by nearly 15 per cent to Rs 3,170 and that of urad of the same order to Rs 2,900.
The Agriculture Ministry has estimated the production of pulses at 14.77 million tonnes against 14.57 million tonnes. In addition, at least four million tonnes have been imported. Hike in support price would lead to higher acreage under pulses and thus improve availability in the coming season. The government procured 33 million tonne rice last year.India’s total rice production is around 98 million tonne. Pulses were a major contributor to the inflation with prices rising 31 per cent, contributing significantly to the overall annual food inflation that touched16.74 per cent for the week ended May 28. With regard to pulses, India holds a unique record of being the largest producer, importer and consumer in the world.
In addition, an incentive of Rs 5 a kg for tur, urad and moong will be given if they are sold to the procurement agencies during the harvest/arrival period of two months.
The Union Cabinet also approved the extension of cotton seed’s validity as an essential commodity beyond the initial period of six months by another six months from June 22, 2010, onwards.
Banks need okay to deal with politically exposed people
THE Reserve Bank of India (RBI) has said banks should obtain senior management approval to continue business relationship with an existing customer who has subsequently become a politically exposed person and that banks should conduct customer due diligence (CDD) on politically exposed people (PEP). The central bank has also said banks should apply enhanced CDD to customers who are close relatives of PEPs, and accounts of which a PEP is the ultimate beneficial owner.
Banks have to conduct proper know your customer (KYC) to avoid being used for money laundering and financing of terrorism. In the past, banks had been asked to follow risk management procedures on continuous basis for PEP accounts.
RBI has defined politically exposed persons as those individuals who are, or have been, entrusted with prominent public functions in a foreign country such as heads of states or of governments, senior politicians, senior government or judicial or military officers, senior executives of state-owned corporations or important political party officials. RBI had advised banks to gather information on any person of this category desiring to do business with the bank and check all the information available on theperson in the public domain.
The Nationalisation and after
JULY 19, 1969, was an important day in the history of Indian banking. 14 major Indian scheduled commercial banks in the private sector, each having deposits of Rs 50 crore or over, were nationalised on that day.
The main objectives were ‘to control the heights of the economy and to meet progressively, and serve better, the needs of development of the economy in conformity with national policy and objectives’. The immediate tasks set for the nationalised banks were mobilisation of deposits on a massive scale and lending of funds for all productive activities, irrespective of the size and social status of the borrower, particularly to those in the weak sectors of the economy.
On April 15, 1980, six more private sector banks with total deposits of not less than Rs 200 crore each were nationalised, extending further the area of public control over the country’s banking system.
almost 25 years later, in 1994, with the governments all over liberalising their economies partly on account of pressure from multilateral agencies which funded their growth plans, policy makers again opened up to the private sector and gave licences to set up nine new private banks. They also allowed the nationalised banks to offer equity shares to the public, thus shedding its pure nationalised state. Subsequently, some new private banks merged with others and two other new banks have come up too. Now the government is considering giving licences for more private banks.
Japan’s economy grows 5% in Q1
Japan’s economy grew more than initially estimated in the first quarter, data showed, with exports keeping a recovery on track as signs emerged that domestic demand is strengthening.
A fourth straight quarter of expansion saw gross domestic product in the January-March period grow at an annualised 5%, beating last month’s estimate of 4.9% and expectations of 4%.
Over 1 million .com, .net domain names in India
India has registered a total of 1.037 million .com and .net domain names, according to the latest Domain Name Industry Brief (DNIB) by VeriSign. The first quarter of 2010 saw over 193 million domain name registrations across all the Top Level Domain Names (TLDs) — an increase of 11 million domain name registrations as compared to the first quarter of 2009. New .com and .net registrations were added at an average of 2.7 million per month in the first quarter of 2010 for a total of 8.1 million new registrations in the quarter reveal the findings of the first quarter of 2010 DNIB.
Information Technology and Innovation Foundation (ITIF) estimates that assuming ecommerce continues to grow just half as fast as it grew between 2005 and 2010, then by 2020, it will add $3.8 trillion to the global economy.
Govt forms advisory group for IT infrastructure
The government constituted the Technical Advisory Group for Unique Projects (TAGUP) under the chairmanship of Nandan Nilekani to develop information technology (IT) infrastructure in five key areas, including the Goods and Services Tax (GST) and the New Pension System (NPS). The group headed by Nandan Nilekani, chairman, the Unique Identification Authority of India, will advise on the technology architecture and ways for co-ordination between centre, states and local governments, possibility of introducing open protocols and utilisation of open source components of other e-government projects, security challenges of malicious attacks on the system. It will make recommendations on human resource including modification in government rules, procedures, appropriate placement of tasks and allocation of responsibilities within the government, contracting, commercial terms and charges including procedures for competitive bidding, pricing models and suggestions on user charges. It will also suggest a road map from start up to going concern for each of these projects, which would also focus on legal or regulatory change, if any and protection of individual’s right to privacy with focus on safeguards in the IT systems to protect legal and constitutional rights.
TAGUP will comprise Securities & Exchange Board of India Chairman C B Bhave, IT Secretary R Chandrasekhar, former Pension Fund Regulatory Development Authority Chairman D Swarup, former Central Board of Direct Taxes member S S Khan, former Central Board of Excise & Customs member P R V Ramanan and ICICI Foundation for Inclusive Growth President Nachiket Mor.
Finance Minister Pranab Mukherjee, in his Budget speech for 2010-11, had announced setting up of TAGUP for an effective tax administration and financial governance system through creation of IT projects, which are reliable, secure and efficient. Other projects, apart from GST and NPS, are Tax Information Network, National Treasury Management Agency and Expenditure Information Network.
Singapore denies ticket to unrated LIC
LIC, India’s largest financial institute has been denied by Singapore, to set up a subsidiary there unless and until it produces a credit rating by any international agency. About a year back LIC had asked Singapore so that it can set up a company there to sell life insurance policies and it seemed the talk was progressing well with the local authorities. There is one representative office of LIC in Singapore run by the state owned insurer .which was pretty hopeful about getting a license ,but the Singapore Authorities insisted that LIC needs to produce rating from any international agency to sell insurance policies there and they made it clear on the last round of negotiation.
LIC had raised the point that it is a unique entity and functions with a meager capital of just5 crore in comparisons of other insurance companies all over the world, and that’s why the conventional rating measures would not apply to them. LIC gets its financial strength from the fact that every single policy issued by them is backed by the government otherwise they are bound by law to plough back profits. Their entire profit is shared by the policy holders and the government.
LIC had hired management consultants in the past and they have said that the guarantee from the state government is the semi or quasi capital, and the government should convert that into real capital by giving LIC a corporate entity.
State agency to implement Rs 17,000-cr Climate Change
The Orissa government, which has come out with a draft Action Plan on Climate Change entailing an investment of around Rs 17,000 crore, has proposed to put in place a Climate Change Agency to ensure effective implementation of the plan.
Orissa is the first state to have formulated the Climate Change Action Plan. And it envisages an outlay of around Rs 17,000 crore in 11 key sectors over the next five years.
The chief minister had constituted a high-level coordination committee headed by the chief secretary to steer the preparation of the draft Action Plan. Eleven working groups were constituted on agriculture, coastal zones and disasters, energy, fisheries and animal resources, forestry, health, industry, mining, transport, urban planning and water resources.
India Chem 2010 to showcase industrial development
Road shows to promote the event will be held in Latin American countries, Europe as well as within the country.
The Union Minister for Chemicals and Fertilizers, Mr M.K. Alagiri, inaugurated the curtain raiser of India Chem 2010, the sixth international exhibition-cum-conference covering the chemical, petrochemical and allied industries, to be held in Mumbai
Theme of the event was ‘Sustaining the India Advantage.
Shetty fined Rs 1 cr by Sebi for insider trading
INDIA’S securities market regulator, the Securities and Exchange Board of India, or Sebi, charged Manmohan Shetty, the former managing director of Adlabs Films, with insider trading for selling shares of his firm in violation of rules while fining him Rs 1 crore for the offence. Sebi has accused Mr Shetty of violating the insider trading rules formulated by the regulator that bars senior management personnel, such as directors and other officers and employees, from trading in the stocks of their companies for 24 hours after information about the outcome of a board meeting is made public.
STYA PAUL passes away
Stya Paul, a renowned freedom fighter, educationist and industrialist, passed away. He was 91. Paul was the founder chairman of Apeejay Education Society that runs a large number of schools and other institutes across north India. Paul was jailed during the 1942 Quit India Movement. He was the elder brother of London-based industrialist Lord Swraj Paul.
SPORTS
The World’s Most Watched Sporting Event Kicks Off
Most awaited event of the year 2010 i.e. FIFAWorld Cup 2010 is going to start . The FIFA will have a wonderful opening ceremony of the FIFA World Cup 2010 which is being hosted first time by the South Africa or any African nation.
South Africa is ready to host this great event and making history by hosting this mega event of the Soccer world / Football world. The Football is one of the most played and watched game of the world with more than 200 nations playing the Football.
In India ESPN has the right to telecast the World cup matches 2010 while on internet one can watch most of the Football world cup matches at ESPN360.com. 32 teams are participating in the world cup 2010 which has qualified among the to 32. The World Cup 2010 of Football will conclude on the 11th of July 2010.
To see its schedule list, visit FIFA 2010
Verma ineligible to fight for BAI top post: Azhar
Mohammad Azharuddin fired a salvo at Badminton Association of India (BAI) president VK Verma, saying the BAI chief is not eligible for re-election. Azhar referred to the sports ministry guidelines which fix the terms of a national sports federation president to 12 years and said it’s time to go for Verma, having been at BAI’s helm for as many years.
Ganguly to lead Lara for MCC against Pakistan
Sourav Ganguly will captain Marylebone Cricket Club (MCC) in a side featuring cricket great Brian Lara when they face the touring Pakistanis in a T20 fixture at Lord’s on June 27. The match will be the first time that MCC, which owns Lord’s, has played a T20 fixture. Among those also confirmed to play for MCC are Sri Lanka left-arm pace bowler Chaminda Vaas and Australian One-day specialist Ian Harvey. It will also be the first time Pakistan captain Shahid Afridi.
For better read, download its pdf June 8-14 Current Affairs
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