New Delhi: Spiralling prices in the global market will push the fertilizer subsidy bill by more than 100% to Rs1 trillion, chemicals and fertilizer minister Ram Vilas Paswan has said.
“Last year we paid Rs45,000 crore subsidy. This year, we started from Rs60,000 crore and today (on Monday) subsidy is estimated to increase to Rs1 lakh crore (trillion) for the same quantity of fertilizer,” the minister said.
Paswan said he had already written to Prime Minister Manmohan Singh and finance minister P. Chidambaram demanding higher fertilizer subsidy.
Spiralling costs: Chemicals and fertilizer minister Ram Vilas Paswan. (Photo: Madhu Kapparath/ Mint)
Substantial jump in the fertilizer subsidy bill will have a bearing on the fiscal deficit, which the Centre plans to reduce from 3.1% of the gross domestic product in 2007-08 to 2.5% in the current fiscal. Paswan, however, ruled out any increase in fertilizer prices, by pointing out that “if you increase the rate of fertilizer, the indirect effect would be on the price of foodgrains” as cost of production would go up.
The government provides subsidy on indigenous as well as imported fertilizers to benefit the farmers and ensure that price of foodgrain remain within the reach of common man and the manufacturers get reasonable return on their investment.
Referring to rising prices in the global market, the minister said the cost of importing diamonium phosphate is Rs51,000 per tonne, while it is supplied to farmers at Rs9,300 per tonne. In case of urea, he said as against the import cost of Rs22,000 per tonne, the government is supplying to farmers at Rs4,830 per tonne.
Paswan said as the government has subsidized the prices of petrol, diesel and cooking gas, which are very high in the international market, “the way out for fertilizer is also subsidy”.
In order to meet the rising fertilizer subsidy outgo, the government had last year issued fertilizer bonds worth Rs7,500 crore to 23 fertilizer firms.
The government may have to come out with similar bonds in the current year to compensate the fertilizer firms.
Essar plans petrochem project in Gujarat
New Delhi: Indian conglomerate Essar Group is planning an integrated petrochemical complex with its refinery expansion plans at Vadinar in Gujarat, an official said.
“We are planning an integrated petrochemical complex with our refinery expansion plans, which will have a big naphtha and off-gas cracker,” S. Stalin, CEO, syngas business at Essar Group, said on Monday. Asked about the capacity of the new unit, he said: “We are at advanced stages of finalizing the proposal. In two to three months, we will finalize the capacity and select the technology for the proposed plan...the size will depend on the kind of crude we process and the products we are getting.” He did not give a timeframe for the petrochemical project.
Essar runs a 210,000 barrel per day (bpd) refinery in Gujarat and has plans to raise the capacity to 680,000bpd in 2010.
Dahej expansion on schedule: Petronet
New Delhi: The country’s biggest liquefied natural gas (LNG) importer Petronet LNG Ltd said it’s on schedule to complete doubling the capacity of its Dahej terminal in Gujarat by December.
The expansion will allow the company to start importing 10 million tonnes (mt) of LNG annually, managing director Prosad Dasgupta said on Monday.
Imports, including purchases from Australia and spot cargoes, are expected at 7.5mt this year, he said.
Petronet is building two new storage tanks and an additional jetty at the Dahej facility to handle larger ships.
The company plans to construct a 2.5mt-a-year terminal in Kochi before switching its expansion focus to gas-fired power plants. State-owned Petronet plans to build a 1,200MW power plant near Dahej at Rs3,100 crore, Dasgupta said.
India, Pakistan to resume talks on pipeline
New Delhi/Singapore: India plans to resume talks with Pakistan next week over a proposed $7.4 billion (Rs29,526 crore) pipeline to transport natural gas from Iran, petroleum and natural gas minister Murli Deora said on Monday. As talks are poised to resume on the project that’s been delayed for a decade, Pakistani President Pervez Musharraf has offered his country as a midpoint for a rival oil pipeline to China from the Persian Gulf.
“Pakistan and China should be linked by road, rail, fibre optics and with an oil-gas pipeline,” Musharraf said on Monday in a speech at Tsinghua University in Beijing. “I have raised this with your leaders. We used to talk about an Iran-Pakistan-India pipeline. Why can’t it be an Iran-Pakistan-China pipeline?” Musharraf may be banking on China, the world’s biggest oil user after the US, to hedge Pakistan’s bets as talks resume on building a 2,100km pipeline to carry Iran’s fuel to India.
The project stalled because India couldn’t agree with Iran on the price for the gas or the fees to pay Pakistan for transporting the fuel.
Lewis Kaden named ArcelorMittals director
London: The world’s biggest steel maker, ArcelorMittal, nominated Lewis B. Kaden as lead independent director.
Kaden is currently vice-chairman of Citigroup Inc., Luxembourg-based ArcelorMittal said in a statement distributed by ‘Business Wire’ on Monday.
His appointment will be ratified at a company board meeting next month, ArcelorMittal said.
World steel demand to grow 6.7% in ’08: IISI
London:World steel demand will grow by 6.7% year-on-year to 1.28 billion tonnes (bt) in 2008, research group International Iron and Steel Institute (IISI) said on Monday.
This would be a record for steel use, industry data show. China, India, Russia and Brazil will be the main drivers of growth as Western economies slow down, IISI said, releasing its forecast from a meeting in St Petersburg.
“The underlying assumption behind this forecast is that although some weakening in the US and EU economies is expected, demand for steel will remain healthy, thanks in part to the emerging markets, which will maintain their own dynamism,” IISI chairman Ku-Taek Lee said in a statement. Total world steel use will be 1.282bt this year, up from 1.201bt in 2007, while use in 2009 was seen at 1.363bt, the group said.
Tele Atlas to form joint venture in India
Helsinki:Tele Atlas NV, the digital-map producer that agreed to be bought by TomTom NV, will form a joint venture with Kalyani Group to expand in India. Tele Atlas will acquire a “substantial” equity stake in the Kalyani Net Ventures Ltd unit as part of the deal, the Den Bosch, Netherlands-based company said on Monday in a statement distributed by ‘Hugin’ newswire.
The business will be renamed Tele Atlas Kalyani India.
Sify to raise $57 mn to fund growth
Chennai: Sify Technologies Ltd, a leader in consumer, Internet and enterprise services in India with global delivery capabilities, announced on Monday that it has, effective 24 March, entered into a Subscription Agreement with Infinity Satcom Universal Pvt. Ltd, an Indian entity, to sell 12,817,000 equity shares at $4.46 (Rs178) per share. The aggregate proceeds from this sale, which will be used to fund the company’s growth and development, is $57 million.
The share purchase by Infinity Satcom Universal was approved by the company’s shareholders at the extraordinary general meeting on 17 March. The purchasing company is an entity controlled by Ananda Raju Vegesna, an executive director of Sify Technologies, and brother of Raju Vegesna, the company’s managing director and CEO.
Yes Bank mulling QIP to raise $300 mn by Dec
Mumbai: New generation lender Yes Bank Ltd plans to raise $300 million (Rs1,197 crore) by December for its expansion plans. “We will be raising around $150 million each in our tier I and tier II structures. This exercise should be completed by December,” Yes Bank’s managing director and CEO Rana Kapoor said. While all options are being considered, it is understood that the private lender is zeroing in on the qualified institutional placement (QIP) route to raise these funds.
Yes Bank is currently fine-tuning its expansion plans over the next one-two years, aimed at strengthening its position in the domestic market.
Aditya Birla Group ups stake in 2 Canada firms
Mumbai: Aditya Birla Group on Monday informed that it has increased its stake from 75% to 95% in the two joint venture companies in Canada viz. AV Cell Inc. and AV Nackawic Inc. at a total consideration of around Canadian $9 million (Rs35.15 crore)
The Group has acquired the additional 20% stake in these two companies from Tembec Group, its joint venture partner in these entities. While Grasim Industries Ltd has acquired the additional stake in AV Cell increasing its holding in AV Cell from 25-45%, PT Indo Bharat Rayon Indonesia, has acquired the additional 20% stake in AV Nackawic.
Tembec’s decision to dilute its stake in these two entities is part of their effort to focus resources on its core business units. Says Shailendra K. Jain, director, pulp and fibre business of Aditya Birla Group, “this transaction fits very well with our strategy of securing cost-effective pulp requirements of the VSF business.
The longstanding relationship with Tembec will continue as before and we at Aditya Birla Group are indeed happy that Tembec will remain a much valued shareholder in both the companies”.
He also said “the conversion of the AV Nackawic plant from Paper Grade pulp to Rayon Grade pulp is progressing well and is expected to be completed in July 2008”.
US brokerage firm enters India real estate
New Delhi: Even as the real estate market in India is showing signs of cooling off, the US-based residential real estate brokerage firm Century 21 Real Estate Llc. has launched operations in India.
Century 21 comes to India just a year after Australian real estate consultancy firm L J Hooker entered the country.
Century 21 has signed a master franchisee agreement with New Delhi-based real estate brokerage firm DGS Realtors Pvt. Ltd to license Century 21 in India.
The company would operate through the franchisee model in India. It plans to have 1,000 franchisees across the country in the next five years.
The US firm believes that the Indian real estate market is still very attractive. “While real estate demand has gone down, I think it is more of a suppression in demand and not absence of demand,” Ajay Rathore, country head, Century 21 India, said. “This is just a correction. Speculators have exited the market which is good for us.”
Real estate consultancy firms are also expecting residential prices and retail rentals to see a price correction up to 15% in some markets such as Gurgaon and Noida where the supply outsrips the demand.
TOI’s Chennai launch sparks price war
Chennai: ‘The Hindu’—published by Kasturi and Sons Ltd—has reacted sharply to the Chennai debut of the ‘Times of India’ (‘TOI’) —published by Bennett, Coleman and Co. Ltd (BCCL)—by bringing its cover price down and also effecting an upward revision in its vendor commission.
This comes at a time when newsprint prices, which form the bulk of newspaper production costs, have increased by more than 35% in the last few months.
The other competitors—‘The New Indian Express’, published by Express Publications (Madurai) Ltd and the ‘Deccan Chronicle’, brought out by Hyderabad-based Deccan Chronicle Holdings Ltd—have not yet participated in the price war.
But, Express Publications relaunched its product last Friday with a complete makeover in terms of design.
However, Aditya Sinha, editor-in-chief of ‘The New Indian Express’, said the revamp had nothing to do with the entry of ‘TOI’. “We wanted to give it a new life. The product was terribly, terribly old-fashioned and it had to reflect the modern times,” Sinha said. “It is just a coincidence.”
He also maintained that they were not willing to reduce the cover price further. It is currently priced at Rs1.50.
‘The Hindu’ has reduced its cover price from Rs3.25 to Rs2.50 on weekdays to match the competition from ‘TOI’, which is priced at Rs2. On weekends, ‘The Hindu’ would sell for Rs3 from Rs4.50, while ‘TOI’ is priced at Rs3.
“If you look at the other markets, with the entry of ‘TOI’, the market leaders or incumbent newspapers have always reduced their cover prices. It is a question of market and competitive dynamics,” N. Murali, managing director, Kasturi and Sons, said.
Commenting on the price cut by ‘The Hindu’, Ravi Dhariwal, CEO of BCCL, said: “‘The Hindu’ has to do what it has to and we will do what we have to.”
Goldman strategist says US earnings are ‘awful’
London: The US corporate earnings season got off to an “awful” start and stocks will continue to fall, according to Goldman Sachs Group Inc.
“Early signs are awful,” a team led by New York-based David Kostin, Goldman’s US investment strategist, wrote in a note on Monday. “We expect generally disappointing results and a swath of lowered profit guidance that will drive the Standard and Poor’s (S&P) 500 Index lower in coming weeks.”
Wachovia Corp., the fourth largest US bank, reported an unexpected loss on subprime-infected mortgage holdings and slashed its dividend.
The S&P 500, the benchmark index for American equities, dropped 2.7% to 1,332.83 last week after General Electric Co. said the credit market crisis caused an unexpected earnings decline, while slowing economic growth and rising energy prices eroded profit at United Parcel Service Inc. and Alcoa Inc.
Kostin last month said he expected the S&P 500 to fall to 1,160 in the “near term” before rebounding to 1,380 by year’s end.
Analysts surveyed by ‘Bloomberg’ have cut their projections for first-quarter earnings at S&P 500 firms every week since 4 January. They now predict a 12.3% drop, compared with an estimate for an increase of 4.7% at the start of 2008.
‘Developing countries may not ink eco pact’
London: The head of the United Nations’s scientific panel on climate change said in an interview published on Monday that developing countries were unwilling to sign up to a global deal on cutting carbon emissions because rich countries were not leading the way.
“Looking at the politics of the situation, I doubt whether any of the developing countries will make any commitments before they have seen the developed countries take a specific stand,” Rajendra Pachauri of the Nobel Prize-winning Intergovernmental Panel on Climate Change told ‘The Guardian’.
Pachauri said while Germany was setting a positive example and Britain was doing “quite well”, there were still “reasons for dismay” at many rich countries’ failure to cut their carbon emissions.
He said China and India, countries regarded as essential signatories for any climate deal to have an impact, “would like to see some level of ambition on the part of the developed countries before they make any voluntary commitments of their own.”