BackNo relief yet for airlines reeling under jet fuel costs
No relief yet for airlines reeling under jet fuel costs
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New Delhi: India’s airlines—which say they would lose over Rs8,000 crore ($2 billion) in the year to March 2009—will have to continue to battle difficulties as the government did not give them any immediate tax relief on jet fuel, prices of which have shot up in the recent past.
Industry representatives that included Naresh Goyal, chairman of Jet Airways India Ltd, and Vijay Mallya, chief of Kingfisher Airlines Ltd, accompanied civil aviation minister Praful Patel on Wednesday to lobby with Prime Minister Manmohan Singh, finance minister P. Chidambaram and Planning Commission deputy chairman Montek Singh Ahluwalia, but had to return empty-handed. “I cannot expect a relief of Rs5,000 crore in one meeting," Patel said later, referring to the sales tax states get on jet fuel that carriers want to be reduced.
The aviation ministry wants the government to notify jet fuel as a so-called declared goods, which will then reduce sales tax to 4% from 25% now. It also seeks to rationalize excise duties on the fuel and fiscal interventions to reduce prices. The airlines in turn have promised to maintain fare prices at “reasonable levels".
The prime minister, Patel said, was "sympathetic", but has said the government would like to wait for a decision of the empowered group of state finance ministers which is expected to meet on 16 June to discuss reducing sales tax on jet fuel, which varies between 4% and 30% among states.
The decision cannot be taken unilaterally in a “federal structure," Patel said. “This is not the first and the last meeting. It is the start of process."
Industry captains met with the aviation minister before meeting the prime minister. Jet has said, according to an official present in the earlier meeting who did not wished to be named, it was losing Rs9 crore a day.
Kingfisher’s Mallya said that if taxes were not reduced soon, operations would become unsustainable, forcing routes rationalization. "That’s basically it," he reportedly said.
Integrated approach to child labourers’ rescue
New Delhi: The ministry of labour has formalized protocols to prevent, rescue, repatriate and rehabilitate child labourers. These rules are aimed at coordinating tasks and formalizing inter-departmental links of various government agencies involved in child labour rescue and rehabilitation.
Several departments are involved in such operations, including police, labour, health, social welfare and education departments, besides district administration and municipal authorities. “Right now, it is possible for each department to say that they have a limited role and step out after that. We want all departments to be involved from the begining to the end of the process," says S.K. Dev Verman, joint secretary at the labour ministry. Krishnamurthy Ramasubbu
PM pitches N-deal; Left calls it playing with fire
New Delhi: Prime Minister Manmohan Singh on Wednesday made a strong pitch for the Indo-US nuclear deal, saying it was crucial for ending nuclear apartheid against India. He hoped that progress will be made in the months ahead on the agreement, which has “run into some difficulties".
Addressing civil servant probationers in New Delhi, Singh said that the deal will open up new possibilities of cooperation, not only with the US but also with other nuclear powers cush as Russia and France.
But disagreeing with Singh, the Left parties maintained that the nuclear deal is not in the national interest and the government will have to face the “Left fire" if it goes ahead with it.
Communist Party of India national secretary D. Raja said the Left parties’ position remained the same and the government will suffer if it decides to go ahead with it. Ruhi Tewari
RBI raises limit in trade of oil bonds
Mumbai: The Reserve Bank of India (RBI) on Wednesday raised the quantum of secondary market trade of oil bonds, held by public sector oil marketing firms, by Rs500 crore daily. The Indian central bank said it will buy and sell oil bonds up to ₹ 1,500 crore in the secondary market through public sector banks. Earlier, the limit was Rs1,000 crore. This is for both rupee and foreign exchange liquidity to the oil companies. Anita Bhoir
NSEL to use govt IT network for spot trading
New Delhi: National Spot Exchange Ltd, or NSEL, which plans to roll out online spot trading business in agricultural commodities across the country in August, will use the information technology (IT) infrastructure of the government for disseminating information to farmers on the prices of agricultural produce.
The government has decided to set up more than 100,000 information and communication technology-enabled common service centres, or CSCs, in rural areas in a public-private partnership model. Infrastructure Leasing and Financial Services Ltd, or IL&FS, has been appointed as the national service agency for executing this project.
“Using this network, we plan to connect 500,000 villages across the country," Anjani Sinha, managing director and chief executive of NSEL, said on Wednesday. He said farmers with no access to the Internet and awareness about spot exchanges, too, can make use of the service as there will be representatives of CSCs to help them.
Besides, farmers will not be required to pay brokerage fee. A revenue-sharing model between the government, IL&FS and NSEL will be worked out consequently.
NSEL, which is jointly promoted by Financial Technologies group, promoter of the Multi Commodity Exchange of India, and the National Agricultural Cooperative Marketing Federation of India Ltd has received licences to start online trading in August in Maharashtra, Karnataka and Gujarat. Sangeeta Singh
3i Infotech buys 51% in?Mumbai?software?firm
Mumbai: Software services firm 3i Infotech Ltd said on Wednesday it has acquired 51% in Mumbai-based software solutions firm Fineng Solutions Pvt. Ltd, with an option to buy the balance later. 3i did not disclose the financial details of the transaction. Reuters
NIIT, Genpact tie up for training centres
New Delhi: Computer education company NIIT Technologies Ltd has entered into a joint venture (JV) with Genpact Ltd, a business process outsourcing company, to set up training centres in India, China and the Philippines. The venture has an equity capital of Rs25 crore and NIIT will own 75% of it. The training centres will offer programmes in business processes, language, business communication and in finance, accounting, banking and insurance.
The shares of NIIT closed at ₹ 135.35 each on Wednesday, up 9.37%, on the Bombay Stock Exchange. Staff Writer
Shipping Corp net profit drops 20% in fiscal 2008
Bangalore: The net profit of state-run Shipping Corp. of India Ltd, or SCI, dropped 20% to Rs813.90 crore in the 12 months to March 2008 from Rs1,014. 58 crore a year earlier as losses from running container ships and zero revenue from sale of old ships nixed the firm’s operating profits and revenue.
The company’s revenue declined to Rs4,084.36 crore during 2007-08 from Rs4,210.36 crore a year ago.
“Things have not gone well for us this year," said B.K. Mandal, finance director of SCI. “Our container ships have incurred substantial losses, oil tankers have not done too well. To top it all, there were no revenues from sale of old ships."
India’s biggest firm by fleet size and revenue earned Rs83 crore through sale of old ships last year.
Mandal said that freight rates were not good in the container segment, but declined to reveal the extend of losses incurred by SCI in this business. SCI is the only Indian shipping firm operating mainline container services.
Oil tanker rates were “soft" but dry bulk carrier rates were buoyant during the year due to demand from China and India. Mandal said that SCI has taken measures to trim losses in the container business including axing services that were not remunerative. P. Manoj
JSW Steel says profit margins down 5-10%
New Delhi: JSW Steel Ltd has faced a 5-10% erosion in profit margins over the last three-four months due to rising raw material prices, according to its managing director Sajjan Jindal.
“There is a huge cost effect at JSW Steel, the profit margin is definitely going to be impacted," Jindal said at a press conference on Wednesday. JSW Steel has committed to hold steel prices unchanged till July.
Meanwhile, Jindal, who is also the newly elected president of industry lobbying body Assocham, asked the government to scrap Press Note 1 to send positive signals to foreign investors. Under Press Note 1, if a foreign partner in a joint venture company wants to set up another joint venture or a wholly owned subsidiary in the same field of business, it will have to obtain a no-objection certificate from the Indian partner.
Jindal has also asked for broad basing of the public distribution system to include edible oil and pulses to control inflation. Staff writer
India added 6.28mn GSM connections in May
New Delhi: The Cellular Operators Association of India, or COAI, representing the mobile service providers adopting global subscriber module, or GSM, said 6.28 million connections were added during May. This takes the total number of mobile users in India to 205.46 million, a cumulative increase of 3.15% compared with the number of users in April. The official number of mobile users for CDMA-backed telecom firms, Reliance Communications Ltd and Tata Teleservices Ltd, were not available.
Bharti Airtel Ltd continued to lead the pack with 66.8 million connections with 32.52% market share, to be followed by Vodafone Essar Ltd with 4.74 million users and 23.10%. Spice Communications, whose promoters are looking to sell their stake in the company, had 4.4 million subscribers and a 2.19% market share and its proposed suitor Idea Cellular Ltd had 26.14 million connections with a 12.72% market share. State-run Bharat Sanchar Nigam Ltd had 18.01% market share with 36.99 million connections. R. Jai Krishna
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