New Delhi: Moving ahead with its cooperation with the US in the aviation sector, the government is likely to sign a bilateral aviation safety agreement next year to enable certification of each other’s products and technology.
“We are working in right earnest to get the agreement concluded by 2010,” civil aviation secretary M. Madhavan Nambiar said at the ongoing Indo-US Economic Summit here.
In order to conclude the pact, the regulatory authorities of both the countries are already in talks.
The agreement would enable India-made products to be sold globally as the strict American standards are accepted worldwide.
Loans for hotel, hospital not under CRE exposure
Mumbai:The Reserve Bank of India (RBI) on Wednesday proposed to exempt bank loans extended for the construction of hotels and hospitals from commercial real estate (CRE) exposure.
The recommendation was made by the regulator in the draft guidelines on classification of exposures as CRE exposures.
Additionally, the draft proposes to exempt loans extended against the security of factory land and buildings for the purchase of plant, machinery and raw material, from the CRE exposure of banks.
The draft has been released following queries from banks and others on whether certain exposures should be treated as CRE exposure, RBI said.
Also, in the light of switching over to the Basel-II accounting framework, which has specific provisions relating to such exposures, RBI decided to review the definition of CRE exposures, it said.
“If both the repayment and recovery of loan is primarily dependent upon either the level of real estate rentals or the real estate prices, it will be classified as Commercial Real Estate Exposure,” RBI said in its draft guideline. “On the other hand, if the repayment depends on other factors such as operating profit from business operations, quality of goods and services, tourist arrivals, etc., the exposure would not be counted as commercial real estate even if the land and building are taken as collateral and might be used in the recovery of the loan.”
Unsecured exposures where the prime source of repayment has direct correlation with the level of real estate prices and rentals will also be classified as CRE, it added.
Pan masala firms underprobe over duty evasion
New Delhi: Pan masala firms have come under the scanner of the directorate of revenues intelligence (DRI) for alleged undervaluation of certain raw materials at the time of import, leading to large-scale duty evasion. Sources in the agency said the matter came to light after the agency raided a leading Jodhpur-based firm which was into production of pan masala.
As per the modus operandi, dubious firms are created in some country other than the place from where the raw materials are sourced, they said.
“In the particular case, the real origin of import was Indonesia, but it was received by a proxy firm in Dubai. From there, new sale receipts were made and the consignment was sent to India. The new receipts had grossly undervalued the cost of the consignment thereby leading to duty evasion,” a senior DRI official said.
Asia’s growth to recover in 2010: BNP Paribas
Tokyo: Asian economic growth, after slowing this year, will probably rebound in 2010 as government spending and interest rate cuts spur demand, BNP Paribas SA said on Wednesday.
Asia, excluding Japan and China, will grow 4.3% next year after a 1.4% expansion in 2009, Richard Iley, an economist at the bank, wrote in a report.
Asian governments are planning more measures to boost growth as a slump in global demand hurts exports, deepening the region’s economic slowdown. South Korea has pledged about $30 billion (Rs1.46 trillion) in extra spending and tax cuts since September. China may follow a 4 trillion yuan (about Rs29 trillion) spending package announced November with a second plan as early as this month.
The scale of the global policy response—monetary and fiscal—should ensure the recovery is more V than U-shaped, Iley said. In many instances, economies will experience a 6-7 percentage points swing in growth rates.
Mahindra FDI proposal, 33 others get govt nod
New Delhi: India has approved 34 foreign direct investment (FDI) proposals worth Rs1,615 crore, including that of vehicle maker Mahindra and Mahindra Ltd, the finance ministry said on Wednesday.
The government, however, again deferred a proposal by News Corp.-controlled Dow Jones Co. to publish facsimile editions of newspapers, including ‘The Wall Street Journal’, in the country, the ministry said in a statement.
Mahindra’s proposal to set up a joint venture (JV) for land defence systems, with foreign investment of Rs28.94 crore was approved, it said. The Indian firm and BAE Systems Plc. have a JV to build such equipment in the country.
Reliance stops oil supply to Iran from Jamnagar
Singapore:Reliance Industries Ltd (RIL), stopped supplying gasoline to Iran after US senators asked their nation’s Export-Import Bank to suspend loan guarantees for the company’s refinery, a non-profit organization said.
RIL provides about 25% of Iran’s refined oil imports, or about 10% of its total gasoline consumption, Mark Dubowitz, executive director for the Foundation for Defense of Democracies, said in an emailed statement on Wednesday. The Export- Import Bank has approved loan guarantees of $900 million (about Rs4,374 crore) to expand the Jamnagar oil refinery in Gujarat.
Mumbai-based RIL said in an emailed statement that it doesn’t comment on specific transactions as a corporate policy and to maintain business confidentiality.
Tilaiya UMPP: selection of developer on 20 Jan
New Delhi: The Tilaiya power project has been further delayed, with the meeting for selection of the final developer for the 4,000MW ultra mega power project in Jharkhand rescheduled for 20 January.
The meeting, which was scheduled for 15 January, has been rescheduled due to the absence of members in the high-level selection committee, which includes representatives from Bihar and Jharkhand governments.
Five companies—NTPC Ltd, Reliance Power Ltd, Lanco Infratech Ltd, Jindal Power Ltd and Sterlite Energy Ltd— of the 11 pre-qualified bidders, submitted their bids for the project.
Sri Lanka readies for final blow against LTTE
Colombo/Sydney: Sri Lanka’s army drove the Liberation Tigers of Tamil Eelam (LTTE) rebels from defence lines in the north-east of the island nation as the group said it will overcome the challenge of losing control of its political headquarters last week.
Troops are attacking the LTTE from the north and the south of Elephant Pass, the strategic causeway to the Jaffna Peninsula, the defence ministry said on its website. Rebel units were forced to retreat south from Muhamalai on Tuesday, it said.
The fall of the Kilinochchi headquarters on 2 January is a setback, N. Nadesan, the political head of the LTTE, said on Tuesday.
Sri Lanka’s army has driven the LTTE into the north-east of the island nation as it tries to end the 26-year-old conflict.
The army has 50,000 soldiers advancing in Mullaitivu district, the last stronghold of the LTTE, Keheliya Rambukwella, a cabinet minister and defence spokesman, said in a interview in the capital, Colombo, on Tuesday.
It’s the last onslaught, Rambukwella said, adding that the government is dismantling the LTTE’s infrastructure of terrorism.
Still, the group is a guerrilla outfit and even 2,000 members in the jungles can be quite effective.
Bird flu under control in Assam: minister
Guwahati: The bird flu situation in Assam was “stable” and nearly 434,000 birds, including commercial and backyard poultry, were culled till December, state veterinary minister Kher Sing Engti said on Wednesday.
No unusual mortality was reported from any part of the state since 24 December, Engti told the assembly in a written reply.
Of the total birds killed, 332,000 were from 250 commercial farms, Engti said.
To combat spread of bird flu infection, the government had taken steps in accordance with the action plan of the Centre and it included culling of poultry and ducks within the 3km radius of epicentre where bird flu was detected, he said.
Engti said bird flu broke out in Kamrup (rural) district and spread to nine other districts.
SC stays warrant against Raj Thackeray
New Delhi: The Supreme Court on Wednesday stayed the non-bailable warrant issued by a Jharkhand court against Maharashtra Navnirman Sena (MNS) chief Raj Thackeray for his alleged statements and hate campaign against north Indians.
A bench headed by Chief Justice K.G. Balakrishnan also exempted Thackeray from his personal appearance in the Jharkhand court.
The apex court passed the direction on a petition filed by the MNS chief seeking transfer of the various cases filed in the courts of Bihar and Jharkhand against him for his alleged statements and hate campaigns against north Indians.
Thackeray had also sought the transfer of these cases outside Bihar and Jharkhand to ensure a free and fair trial.
Bill to check corruption sheds important clauses
New Delhi: Two major provisions, which could have helped check corruption in public offices “more efficiently”, have been dropped from the Prevention of Corruption (Amendment) Bill, 2008, passed by the Lok Sabha on 23 December, Karnataka lokayukta justice N. Santosh Hegde said.
The provision to check undue favour to any third party from government money has been removed from the Bill, which was passed along with seven other Bills in a span of 17 minutes on the last day of the winter session.
The Bill had the provision that if a public servant allows any third party to make profit from government funds or deal even as the official does not get any direct benefit, it should be considered as an offence of corruption. The other provision that was dropped is about the prosecution of retired government servants without government sanction, Hegde said.
“Now, both the vital provisions have been dropped. So the basic purpose of the Bill is diluted. This will allow many public servants to go scot free,” Hegde said.
Notice issued to I-T dept on India Comnet’s plea
New Delhi: The Supreme Court on Wednesday sought reply from the Income-tax (I-T) department on a petition filed by software exporter India Comnet International, seeking tax exemption on interest income on deposits of export sale proceeds kept in its foreign currency account.
A bench headed by justice S.H. Kapadia issued notice to the department on the plea questioning whether the interest income of the firm from exports deposited in its foreign currency account qualifies to be profit or gain.
The company, engaged in software exports in the Madras Export Processing Zone, had claimed tax exemption to the tune of around Rs3 crore under section 10A of the I-T Act during 2003-04.
However, the department had disallowed the claim. The department’s findings were upheld by the commissioner of income tax (Appeals), the Income Tax Appellate Tribunal and the Madras high court.
According to the company, the entire income, including interest received on deposits of the export sale proceeds in the foreign currency accounts, as permitted by the Foreign Exchange Regulation Act under the banking regulations, constituted profit or gain.
S&P: 2008 slump erased $17 trillion in stock value
New York:The nightmarish stock market performance in 2008 erased some $17 trillion (Rs826 trillion) in share value worldwide, a Standard and Poor’s (S&P) report said on Tuesday.
The S&P’s estimate is based on the value of its Global Broad Market Indices, comprising 46 major stock indices around the world.
Emerging market indices fell 54.72% and developed markets dropped 42.72% for the year, according to S&P.
The losses, coming in a year that was the worst in many countries since the Great Depression, were moderated somewhat by a modest rebound in December, with 19 of the 21 emerging markets and 22 of the 25 developed markets posting gains during the month.
“A glimmer of hope—that is how we can define December,” says Howard Silverblatt, analyst at S&P and author of the report.
Among the worst performers in 2008 were the “Bric” countries: Brazil (down 57.35%), Russia (73.67%), India (64.51%), and China (53.21%), according to S&P.
Morocco was the best performer among emerging market countries, limiting its loss to 15.85%. The second best performer was Israel, with a loss of 34.68%.
In developed markets, Ireland was the worst with a loss of 69.94%, followed by Greece (66.50%) and Norway (66.07%).
S&P said its Japan index was the best among developed nations with a loss of 29.22%, followed by Switzerland (30.60%) and the US (38.68%).
Bank of India postpones perpetual bond issue
Mumbai: State-run Bank of India has postponed its Rs200 crore perpetual bond issue indefinitely, two people close to the matter, including a bank official, said on Wednesday.
“We had received commitments for the entire amount, but considering the jump in yields, it’s not fair to those investors to issue the bonds now,” the official said on condition of anonymity.
The bank will wait for the market to settle down “which may happen in a week or 10 days,” the official added.
Bank of India was to sell the bonds on Friday with a coupon rate of 9.10%, and an option to retain oversubscription.
On Wednesday, bond yields shot up to near one-month highs, spooked by excess supplies hitting the market as a result of the government’s unexpected announcement to borrow a higher-than-expected Rs50,000 crore between 5 January and 31 March.
Terror attack: SP may withdraw support
New Delhi: Charging the United Progressive Alliance (UPA) government with failing to take decisive action against Pakistan in the wake of the Mumbai terror strikes as promised, the Samajwadi Party (SP) on Wednesday threatened to “consider withdrawing support to the government”.
Talking to reporters here, SP general secretary Amar Singh said he has requested for a meeting with UPA chairperson Sonia Gandhi to discuss the situation.
“During an all-party meeting held 40 days ago, the government had promised party chief Mulayam Singh Yadav that decisive action against Pakistan will be taken within 15 days...that deadline is over,” Singh said.
He said he would demand a meeting of the SP-Congress coordination committee to discuss the issue. “Our leaders are upset at the weak stand of the government against Pakistan... Our parliamentary board will be meeting tomorrow (Thursday) and we may consider withdrawing support to the UPA government,” he said.
Fabindia buys 25% in ‘East’, eyes UK market
New Delhi: New Delhi-based retailer Fabindia Overseas Pvt. Ltd said it has acquired a 25% stake in the UK-based retailer East Llc., in a bid to gain access to the country’s market with a large Indian population.
“We saw a market for our products in the UK with its large population of eastern and Indian origin people,” said Fabindia’s managing director William Bissell. He said the deal was sealed on Tuesday but he declined to reveal the total value of the deal citing a confidentiality agreement. ‘The Economic Times’ reported the acquisition on Wednesday.
East operates more than 50 stores in London with an annual revenue of £30 million (Rs217.5 crore).
“We felt the valuation was attractive in that market due to the downturn,” Bissell said, adding that creating a business from scratch in that country would have been expensive.
“Greenfield projects (in the UK) are very expensive,” he said.
Fabindia sells ethnic Indian dresses and handicraft products through its network of about 100 stores in India. It also has around half-a-dozen outlets in West Asia and Italy.
IT ministry not for doubling 3G prices
New Delhi: Differences in the inter- ministerial panel on pricing of next generation (3G) mobile telephony spectrum have widened, with the ministries of industry and information technology (IT) rejecting doubling of the fee to Rs4,040 crore.
This has forced the department of telecommunications (DoT) to place all the options before the cabinet committee on economic affairs (CCEA) for a final call.
According to sources, the department of industrial policy and promotion and ministry of IT have supported the reserve price of Rs2,020 crore, as was originally recommended by DoT.
Last week, the finance ministry had asked DoT to double the reserve price for pan-India 3G spectrum.
Recently, DoT had issued a revised schedule for auctioning the 3G spectrum to 30 January.
Asked whether DoT may extend the auction date further, officials said it would depend on the CCEA decision. In case the reserve price is finalized by the cabinet by next week, the government would go ahead with the schedule.
Tea exports rise 9% as Kenyan supplies decline
Mumbai: Tea shipments from India, the world’s largest producer, gained 9% in the 11 months to November after output gained and a drought cut supplies from rival Kenya, the world’s biggest exporter.
Overseas sales climbed to 175.5 million kg between January and November from 160.4 million kg a year earlier, the state-owned Tea Board of India said on its website. Exports rose 21.5% in value to Rs19,800 crore in the period as prices gained 11% on an average to Rs112.8 per kg, the board said.
India’s exports may rise 28% in 2008 to 200 million kg from a year ago because of reduced shipments from Kenya, Tea Board chairman Basudeb Banerjee said in June.
Production in Kenya, the biggest black-tea exporter, fell 16% in the first eight months of 2008 from a year earlier on poor weather, the Tea Board of Kenya said in September.
WTO talks should step back: Schwab
Geneva: Outgoing US trade representative Susan Schwab said on Wednesday negotiations on a global trade deal should step back from the limelight over the coming year and focus on quiet confidence-building.
“I think there is an opportunity right now to step back, review where we are in the Doha Round and take some time to move forward,” she told journalists after a farewell meeting with the World Trade Organization (WTO) director general Pascal Lamy here.
Schwab, a key player in the faltering attempts to open up global markets for agriculture, industrial goods and services since she took office in 2006, is due to stand down on 20 January with the departure of the George Bush administration in the US.
Schwab said that despite the repeated failure of high-profile meetings of ministers in recent years that were aimed at forging an agreement, a lot of incremental technical progress had been achieved in negotiations to prepare for each of those gatherings.
“I don’t think that suspension is the answer so much as quiet behind-the- scenes kind of work,” she explained after being asked about the possibility of suspending the Doha negotiations in 2010.
Some trade specialists have suggested that the current global economic downturn is conducive to protectionist sentiment and that it would be risky to to relaunch free trade talks while industrialized, emerging and developing nations are more intent on defending their own economies.
Schwab admitted that there were still “a variety of irreconcilable differences” that had prevented a new ministerial meeting taking shape at the WTO last month.