Investment plans: Vedanta group chairman Anil Agarwal. (Photo: Abhijit Bhatlekar/ Mint)
Kolkata: Vedanta Aluminium Ltd, a unit of Vedanta Resources Plc., on Wednesday announced plans to invest Rs20,000 crore in West Bengal. The company said it would build a 650,000-tonne smelter and a 3,000MW power plant in the state in three years.
“For me, it is like coming back home. I spent my early childhood in Kolkata,” Vedanta group chairman Anil Agarwal said, soon after his company Vedanta Aluminium signed an agreement with the West Bengal Industrial Development Corporation for the proposed project.
The smelter and the power plant would be built at Bidhanbag near Raniganj in Bengal’s Burdwan district. Bidhanbag has a defunct smelter, now owned by the Vedanta group. “We have so far revived three companies. It is an opportunity for us to revive yet another company,” Agarwal said. Vedanta Aluminium said it would need close to 1,000 acres for the two plants. It already owns 270 acres there, and would need 700 acres more.
It is not clear yet whether the government would acquire land for the company or it would buy it on its own. “It has not been decided, but a lot of surplus land is available there and we feel we’ll receive tremendous co-operation from local people,” Agarwal said.
Chief minister Buddhadeb Bhattacharjee said his government would help set up downstream facilities near the Vedanta factory. “We will try to mobilize small and medium enterprises to create processing facilities in an aluminium park nearby. We have requested Vedanta to supply primary aluminium to the park.”
Fertilizer imports soar as firms shun capacity hike
Mumbai: India’s fertilizer subsidy bill is spiralling out of control as the government resorts to higher imports amid rising prices and as local producers refuse to boost capacities.
In 2007-08, fertilizer imports by India, the world’s second biggest consumer, are estimated to jump to 10 million tonnes (mt), a quarter of the total demand, due to a global surge in key raw material and energy prices.
“Supply-demand gap is likely to cross 16mt by end of the 11th Five Year Plan (2007-12),” the Fertiliser Association of India said last month, adding investment in the domestic industry was imperative to ensure target growth in agriculture.
Most producers blame the crippling pricing policy and consequent lack of returns for staying away. Manufacturers sell fertilizer to farmers at below-market rates, and are compensated by the government for the difference.
Urea, the most-used fertilizer in the country, is locally produced at an average cost of Rs10,000 a tonne, analysts said. It is sold to farmers at Rs4,800 a tonne.
However, the government is forced to import urea at nearly Rs16,000 a tonne to bridge the shortfall.
“Unless there’s a clear policy in terms of allowing us to increase prices, investments in the sector will not come,” said V. Ravichandran, managing director, Coromandel Fertilisers Ltd.
India’s fertilizer subsidy is pegged at Rs45,000 crore for 2007-08, but with global input and energy prices on a steep incline, this is seen rising to Rs70,000 crore next year.
The government, under pressure to maintain fiscal discipline, has budgeted for only Rs31,000 crore.
“In its anxiety to cut subsidy, the government doesn’t pay the subsidy amount or pays at a much later date. The industry is made to bear the large interest cost of working capital,” said R.S. Nanda, chief operating officer at Nagarjuna Fertilizers and Chemicals Ltd.
-Prashant Mehra and Bharghavi Nagaraju/ Reuters
Rajya Sabha gets first media advisory panel
New Delhi: The first media advisory committee of the Rajya Sabha was constituted on Wednesday.
Harish Khare of ‘The Hindu’ has been appointed chairman of the committee , while M.V. Meenakshisundaram of ‘PTI’ is the secretary of the committee.
Urmilesh (‘Hindustan’) is the vice- chairman and Saurabh Shukla (‘India Today’) joint secretary of the 11-member committee, a Rajya Sabha secretariat release said.
The primary function of the committee is to advise the Rajya Sabha secretariat regarding admission of newspapers and media persons to the press gallery of the house.
Other members of the committee are: S.H. Shams (‘Daily Pasban’), Vijai Pratap Rai (‘Rashtriya Sahara’), R. Rajagopalan (‘Vaartha’), Vijay Naik (‘Sakal’), Kalyan Barooah (‘Assam Tribune’), Rahul Srivastava (‘NDTV’) and Rakhee Bakshee (‘DD News’).
Cabinet may take up mineral policy today
New Delhi: The much-awaited national mineral policy is likely to be taken up by the cabinet on Thursday.
“The Union cabinet is likely to take up the mineral policy tomorrow. But, it is not sure whether it will deal with the issue of iron ore exports,” a source said.
The mineral-rich states of Chhattisgarh, Orissa and Jharkhand have been clamouring for a phasing out of exports, saying that a precious national mineral resource cannot be frittered away. The chief ministers of these states argued that the domestic steel industry was poised to grow by 13% annually and so it would be highly prudent that the mineral be conserved and leveraged to meet the growing needs of the domestic steel industry.
They raised the issue during their meeting with Prime Minister Manmohan Singh recently. In their joint memorandum, the chief ministers said: “We strongly advocate that the export of minerals should be phased out since minerals are non-renewable and finite resources.”
I-T dept moves court against STAR group
Mumbai: The income-tax department on Wednesday moved the Bombay high court against the STARr group for allegedly evading tax running into hundreds of crores of rupees.
A division bench admitted the petition filed by the department seeking direction to Star group to pay the tax amount, legal sources said.
About 10 channels owned by the group, including STAR Movies, STAR Plus, STAR World and Channel V, have “evaded” tax approximately amounting to Rs2,600 crore, according to the department. The I-T department’s contention was that the group had links with Indian companies and so should pay taxes here despite being based overseas, said the department’s legal representative Beni Chatterji.
BJP criticizes Budget, terms it communal
New Delhi: The principal Opposition, Bharatiya Janata Party (BJP), on Wednesday attacked the Union Budget terming it “communal” and compared Prime Minister Manmohan Singh with Mughal ruler Aurangzeb, saying Singh was trying to bring back jazia.
“The prime minister said Muslims have the first right on government resources. After Aurangzeb, Manmohan Singh is the first person who said so. This is like bringing back jazia. We believe in justice for all and appeasement to none,” BJP leader V.K. Malhotra said in the Lok Sabha.
“In the Budget, government said if a Muslim student goes for higher education he would be entitled to scholarship. Why is it that there is nothing for a poor Hindu student or a dalit student? Doesn’t it amount to encouraging conversion?” the BJP leader said. “No communalisation of budget and no jazia,” he told the House.
GM may invest $200 mn in Indian engine plant
Mumbai: General Motors Corp. (GM), aiming to win 10%of India’s vehicle market by 2010, may invest as much as $200 million (Rs810 crore) in setting up its first local engine plant.
The world’s largest auto maker is still studying possible locations for the factory, Karl Slym, managing director of its local unit, said on Wednesday. A decision will be announced soon, spokesman P. Balendran said.
An Indian engine plant would allow GM to cut costs because the government slaps an import duty of as much as 80% on units shipped in from abroad. The tariff has hindered GM as it seeks to win market share from Suzuki Motor Corp. and Hyundai Motor Co., the two biggest car makers in India.
Detroit-based GM plans to begin trial production at its new factory in Talegaon, western India, next week, Balendran said. The plant, costing more than $300 million, will have a capacity of 140,000 vehicles a year. The car maker’s only current Indian plant, in Gujarat, has an annual capacity of 85,000 vehicles.
RBI tells public not to make currency garlands
Mumbai: As part of its efforts to ensure clean bank notes, or paper currency, to the public, Reserve Bank of India (RBI) has asked the public not to use bank notes for making garlands, decorating pandals and places of worship.
“Such actions deface the bank notes and shorten their life. Bank notes should be respected as they are a symbol of the sovereign and not misusing them enhances their life,” the central bank said in a statement issued on Wednesday.
The central bank had discontinued the practice of stapling notes a few years ago. “The Reserve Bank has been taking all measures to supply clean bank notes across the country ,” the central bank added.
Foreign investment up to 49% in comexes
New Delhi: The government on Wednesday issued a notification allowing 49% foreign investment in commodity exchanges or comexes.
The cabinet had announced the decision to allow foreign investment in commodity exchanges in January. As per the guidelines issued by department of industrial policy and promotion (DIPP), investment by registered foreign institutional investors (FIIs) under the portfolio investment scheme will be limited to 23%, while that under the foreign direct investment (FDI) scheme will be limited to 26%.
The DIPP, under the ministry of commerce and industry, said FDI will be allowed with specific prior approval of the government. No foreign investor or entity, including person acting in concert, will hold more than 5% of the equity in these companies, it said.
The guidelines also stipulated that FIIs have to purchase stake in commodity exchanges through the secondary market.
FDI in PSU refineries hiked to 49%
New Delhi: Giving effect to the cabinet decision on relaxing FDI policy, the government on Wednesday issued six notifications raising foreign investment limits in sectors including civil aviation and petroleum refinery.
The other sectors for which FDI norms have been relaxed are industrial parks, credit information companies and titanium mining. In case of public sector refineries, the FDI would be allowed “up to 49%, with prior approval of foreign investment promotion board... without involving any divestment or dilution of domestic equity in the existing PSUs”. FDI up to 100% would also be allowed in mineral separation of titanium-bearing minerals and ores, its value- addition and integrated activities subject to prior government approval.
Flows into Indian equity funds slow in February
Mumbai: A weak Indian stock market hit inflows into domestic equity funds in February but did not trigger major redemptions, data from the Association of Mutual Funds in India (AMFI) showed.
Existing stock funds collected Rs5,000 crore in February, the lowest since September and 60% less than January. But the outflow of Rs3,730 crore was half of last month and lowest since July 2006, the data showed.
“There is a slowdown in inflows because of the market volatility but it has not dramatically brought redemptions to the market,” R.S. Srinivas Jain, chief marketing officer of SBI Funds Management Pvt. Ltd, said.
“We as a fund house have seen redemptions but not significant. In fact there is a dip in the month of February in the percentage of redemptions vis-a-vis what we had in January and in December,” he added.
A 21% drop in the benchmark BSE Sensitive Index till so far in 2008 has wiped out nearly a fourth of the net values of equity funds but has not dampened interest, with many investors looking to dips as buying opportunities.
No plans to amend SEZ Act, Kamal Nath says
New Delhi: Despite mounting pressure from the Left allies, the government on Wednesday made it clear that it has no plans to amend the Special Economic Zone (SEZ) Act, saying it is “working well”.
Replying to supplementaries to a host of questions on SEZs in the Rajya Sabha, commerce and industry minister Kamal Nath said SEZs have become important engines of economic growth.
“At the moment, there is no proposal to amend the SEZ Act. It has worked well, it is working well. It is providing growth in employment and is one of the important engines of economy,” he said.
The minister’s reply triggered angry reactions from the Left, Bharatiya Janata Party and some Congress members, who claimed that SEZs have become real estate business as norms are being violated.
Nath said the government will look into specific instances of “misuse or abuse” of the Act if pointed out.
Mascon Global buys two US firms for $55 million
Mumbai: IT services provider Mascon Global Ltd on Wednesday said it will acquire two US-based companies for $55 million (Rs222.75 crore).
The company’s board of directors has approved the acquisition of Jass and Associates Inc. and SDG Corp. for a consideration of $55 million, of which $35 million would be paid in cash and the remaining through issue of global depository receipts (GDRs), the company informed the Bombay Stock Exchange.
Suven Life ties up with Eli Lilly for research
Mumbai: Pharmaceutical firm Suven Life Sciences Ltd on Wednesday said it has signed an agreement with US-based Eli Lilly and Co. to collaborate on the pre-clinical research of molecules used in the treatment of central nervous system disorders.
Suven would receive research funding as well as potential discovery and development payments of up to $23 million (Rs93.15 crore) per candidate plus royalties on net sales of products that may be commercialised from the collaboration, it said in a filing to the Bombay Stock Exchange.
Indian link traced in UK credit card fraud
London: International credit card scamsters, including those based in India, siphoned off a significant portion of £535 million (Rs4,349.55 crore) from British account holders last year, according to figures released here.
The Association of Payment Clearing Services said the 25% initial rise in fraudulent use of British credit and debit cards in three years was mainly due to stolen and counterfeit cards used abroad.
There have been several instances of British consumers reporting money withdrawn from their accounts in India, the Philippines, Australia and Canada.
Patni sees more revenue from Asia-Pacific
Bangalore: Software services firm Patni Computer Systems Ltd is stepping up sales to Asia-Pacific, a senior company official said on Wednesday, to offset a possible slowdown in its main US market.
Patni, which gets more than three quarters of its revenue from the US, expects 9% of its revenue to come from Asia-Pacific, including Japan, in three years from 5% now, Deepak Khosla, its head for the region, said.
“We are giving it more focus and more attention now,” Khosla said.
New York-listed Patni is also looking for acquisitions in Australia and Japan to boost growth, he said but declined to give details.
IOC keen on buying ADB stake in Petronet
New Delhi: State-owned oil refining and marketing firm, Indian Oil Corp. (IOC), has expressed interest in buying out Asian Development Bank’s (ADB) 5.2% stake in Petronet LNG Ltd, company chairman Sarthak Behuria said.
However, if the state-run promoters of Petronet are not allowed to raise stake in the company for fear of it becoming a public sector unit, Behuria suggested selling ADB’s shareholding to the public.
Behuria’s suggestion may find takers in other promoters—GAIL (India) Ltd (GAIL), Oil and Natural Gas Corp. Ltd (ONGC) and Bharat Petroleum Corp. Ltd (BPCL), which want to block “backdoor” entry of steel czar Lakshmi Mittal into the nation’s largest liquefied natural gas (LNG) importing firm.
“We have written to Petronet CEO Prosad Dasgupta about our interest in ADB stake and that if that was not possible it should be divested in favour of Indian public,” Behuria said.
Petroleum secretary M.S. Srinivasan, who is also the chairman of Petronet, is against the four promoters buying ADB’s stake and may instead back Dasgupta’s move to get Mittal or Chevron Corp. of US on board.
Dasgupta had in response to GAIL chairman U.D. Choubey’s written request for buying out ADB’s stake stated that the multilateral agency’s stake should be given to a third party such as Mittal or Chevron, who in exchange are willing to offer LNG to Petronet.
IOC, GAIL, ONGC and BPCL together hold 50% stake in Petronet.