New Delhi: The government has de-reserved another 79 items from the list exclusively reserved for production in the small-scale sector (SSI). As a result of the decision, the list of items reserved would be reduced to 35. The move is expected to raise the competitiveness of the industry, increase the flow of credit and facilitate technology upgradation.
The government has de-reserved 500 items from the list since 2005. Any unit with investment less than Rs10 crore in the manufacturing sector and Rs5 crore in the services sector comes under the micro, small and medium enterprise definition.
Inflation accelerates to 4.11% on rising food prices
New Delhi: Inflation accelerated to the highest in more than five months as prices of fruits, spices and salt increased.
Wholesale prices rose 4.11% in the week ended 26 January from a year earlier, faster than the previous week’s 3.93%, the ministry of commerce and industry said on Friday. Inflation accelerated in the week as prices of manufactured goods, accounting for 64% of the wholesale price index, rose 0.3% from the previous week.
On the monetary side, the Reserve Bank of India (RBI) kept the benchmark interest rate unchanged last week on concerns that rising fuel and food prices may fan inflation. The central bank has also allowed the rupee to appreciate to reduce the cost of imports and curb price gains.
That’s helped the government damp inflation, which reached a more than two-year high of 6.69% in the same week a year earlier.
Inflation is a sensitive issue in the $906 billion (Rs35.88 trillion) economy and rising prices may cause the main ruling Congress party to lose votes in 10 states where elections are due this year.
Prime Minister Manmohan Singh has capped fuel prices, cut import duties and supported RBI’s move to keep borrowing costs at a five-year high to check inflation.
“Any changes on interest rates will get pushed to the second half of the fiscal year as the Reserve Bank is expected to maintain a wait-and-watch stance,” said Indranil Pan, chief economist at Mumbai-based Kotak Mahindra Bank Ltd.
The Union cabinet again avoided taking a decision on raising fuel prices this week, in a move to protect poor and contain inflation. Petroleum and natural gas minister Murli Deora said on 31 January the cabinet may consider revising prices this week.
The government has capped petrol and diesel prices since June 2006 even as crude rose 57% last year and reached a record $100.09 a barrel on 3 January
“Given the political sensitivity of inflation, the government seems to have decided that it can live with a little less growth but just can’t afford any increase in prices,” Pan said.
The government on Friday revised the inflation rate for the week ended 1 December to 3.89% from 3.75%. The government revises the inflation rate after a delay of two months on additional price data.
-Kartik Goyal/ Bloomberg
RBI norms for forex derivatives soon
Mumbai:Amid reports of firms making losses on hedging foreign exchange products other than the dollar, the Reserve Bank of India (RBI) may soon come out with guidelines on forex derivatives, which is widely expected to discourage banks from trading in foreign currencies other than in rupee-dollar.
“We are working on the guidelines of forex derivatives,” an RBI spokesperson said. The apex bank, however, made it clear that it has not issued any directive so far to banks trading in exotic forex products, which had reportedly resulted in companies making losses to the tune of Rs 1,000 crore.
Exotic hedging structures involve conversion of dollar receivables into other currencies such as the Swiss Franc or Japanese yen, after taking a view on the movement of those currencies.
Companies with export receivables hedge foreign currency exposures in a bid to prevent losses due to an appreciation in the rupee. However, firms started complaining when they suffered losses owing to appreciation of other currencies as well.
Yes Bank Ltd’s managing director and chief executive Rana Kapoor said the companies’ losses were due to lack of understanding among ‘customers’ about the hedging products.
Record gold prices take sheen out of imports
Mumbai: India’s gold imports slumped for the fourth straight month in January after a rally to a record curbed jewellery demand in the world’s biggest consumer of bullion. Purchases in January declined to 4.8 tonnes from 62 tonnes a year ago, according to the Bombay Bullion Association that represents 230 trading firms. Imports in December plunged 71% to 14 tonnes from a year-ago month.
Gold rose to a record after the Federal Reserve pared the target rate for overnight lending between banks to 3% on 30 January. Gold for immediate delivery traded at $909.63 (Rs36,021) per ounce as of 1.07pm in Mumbai, an 89 cent decline from late Thursday in New York.
Caparo to build body structure of Tata Nano
London: The body structure of the new Rs1 lakh Tata Nano car will be built by non-resident Indian industrialist Lord Swraj Paul-owned Caparo Group.
Selected inner structural panels will be pressed and assembled by Caparo at a new facility in Singur, adjacent to the Tata Nano’s manufacturing plant in West Bengal.
Caparo, the manufacturer of the world’s highest performance road-capable hyper car, the Caparo T1, will supply 60% of these assemblies, with the rest being manufactured in-house by Tata. To meet Tata’s ambitious cost targets, Caparo has installed a new semi-automated production line with zero fault forward quality control systems.
“The body technology is relatively conventional, but the manufacturing technology is the result of very sophisticated analysis to ensure high-quality, low-cost production,” Caparo Group CEO Angad Paul said.
‘Benazir’s death caused by bomb, not bullet’
Islamabad: Pakistan’s opposition leader Benazir Bhutto died from hitting her head on the escape hatch of her vehicle as a result of the impact of a suicide bombing, Scotland Yard has said, rejecting a claim by her husband that a bullet wound killed her.
“Available evidence suggests there was no gunshot wound to her head,” Abdul Majeed, an inspector general of the Pakistani police, told reporters here on Friday. Majeed read out the Scotland Yard report, which was submitted to the Pakistani government on Friday.
The London police force assisted Pakistani authorities in trying to determine the cause of Bhutto’s death on 27 December.
Firstsource, Barclays ink outsourcing pact
Mumbai:Firstsource Solutions Ltd, a business process outsourcing service provider, on Friday said it has signed a five-year outsourcing partnership agreement worth up to $80 million (Rs316.8 crore) with British banking giant Barclays Plc. for supporting its operations in the US.
As per the outsourcing agreement, Firstsource would manage Barclays’ operations centre in Colorado Springs and would provide customer care and collection support to its US cardholders, Firstsource Solutions said in a filing to the Bombay Stock Exchange (BSE).
Shares of Firstsource ended the day at Rs50.85, up 0.89% on BSE.
Gyanendra attacks govt pledge on monarchy
Sydney: Nepal’s King Gyanendra has denounced the government’s pledge to abolish the monarchy after elections in April and said most citizens in the Himalayan kingdom don’t back a republic. The decision “doesn’t reflect the majority view of the people,” Nepalnews.com cited Gyanendra as telling Japanese reporters earlier this week in the capital, Kathmandu. “This isn’t democracy.”
The coalition government, which includes the Communist Party of Nepal (Maoist), agreed in December to amend the constitution to declare the country a republic, subject to ratification by the National Assembly after the 10 April ballot.
DRDO?gets?nod?to?export home-grown products
Bangalore: The Centre has allowed the Defence Research and Development Organisation (DRDO) to export home-grown radars and missile systems such as the Akash to countries in West Asia, Africa and Latin America.
The defence research agency has around 20 products, some of those for civilian purposes, for export to friendly countries such as Malaysia.
“There is lot of interest for our products. It is more affordable and lifecycle costs are cheaper,” said Prahlada, chief controller (R&D) of DRDO. “The Western companies may sell the products cheap, but charge really high for spares and service,” he added.
India has an inventory of small radars for battlefield surveillance, locating weapons and missiles, unmanned aerial vehicles and surface to air missiles for export. These products would be displayed at the Defexpo, India’s largest military exhibition, to begin on 16 February in New Delhi.
Ministry seeks opinion on Reliance demerger
New Delhi: The petroleum and natural gas ministry has sought the law and justice ministry’s opinion to ascertain if Mukesh Ambani-run Reliance Industries Ltd’s (RIL) move to assign first right on gas produced from the Krishna-Godavari (KG) fields to a firm run by younger brother Anil violated the official contract for the fields.
The family agreement that split the Dhirubhai Ambani empire between the two brothers, as has been upheld by the Bombay high court, had created rights, including claim over majority of the output from RIL’s KG-D6 field, in favour of Anil Ambani’s Reliance Natural Resources Ltd (RNRL). The oil ministry now wants to know if such a move amounted to assignment of participating interest, officials familiar with the development said.
Govt hopes to open SBI rights issue on 18 Feb
New Delhi: The government hopes to open subscriptions for a $4.2 billion (Rs16,632 crore) rights issue in the country’s largest lender State Bank of India (SBI) on 18 February, a finance ministry official said on Friday.
Raising capital: SBI chairman O.P.Bhat. (Photo: Ashesh Shah/Mint)
The comment came as India’s primary market was hit by withdrawals of two initial public offerings in less than 24 hours, with Emaar MGF Land Ltd and Wockhardt Hospitals Ltd shelving their issues due to stock market volatility.
The finance ministry official, who did not wish to be named, said there was no problem with SBI’s issue despite market turbulence and the Centre remained committed to signing up for its share.
Last month, SBI said it will issue one share at Rs1,590 for every five held. SBI shares closed 1.7% up at Rs2,191.45 on BSE on Friday.
Petition against Trai admitted in apex court
New Delhi:The Supreme Court (SC) has admitted a petition challenging rules that allow the country’s telecom regulator to set tariffs for television broadcasters, one of who is arguing that such powers are violative of the freedom of expression and speech as well as the freedom to practice trade or profession of one’s choice.
On the backfoot: Trai chairman Nripendra Mishra. (Photo: Ramesh Pathania/ Mint)
While tussles between the Telecom Regulatory Authority of India (Trai) and broadcasters have been common in the past, the powers of Trai to regulate broadcast networks on the basis of constitutional provisions will now be deliberated before SC for the first time.
A division bench of Justice H.K. Sema and Justice Markandey Katju allowed the petition, filed by SET Discovery Pvt. Ltd, that will now be treated as an appeal on a July 2007 judgement by the Delhi high court. Before approaching SC, SET Discovery and fellow broadcaster Star India Pvt. Ltd had questioned the validity of Section 11(2) of the Trai Act, 1997, at the Delhi high court. Section 11(2) gives Trai the power to fix rates for telecom services in India. SET Discovery had argued in its petition at SC that the definition of telecom service in the Trai Act should not be interpreted to cover the television broadcast business.
Like the print media has the guarantee of Article 19(1)(a) of the Constitution that envisages the right to the freedom of free speech and expression, the SET Discovery petition contends that the same guarantee should extend to it since it distributes news channels (such as those offered by NDTV Ltd) and be seen as “electronic press”. Trai confirmed it has been issued a notice that is focused on the ownership of SET Discovery because it can claim constitutional privileges only if it is an Indian firm. “The notice has been granted to us on a limited issue based on the question whether the petitioner is a foreign company or not,” said Nripendra Misra, Trai chairman.
India to retaliate against non-tariff trade barriers
Bangalore: India on Friday warned that it will retaliate against countries that seek to impose non-tariff barriers to trade on its exporters. Without taking names, commerce and industry minister Kamal Nath told exporters at a meeting here that India has become a key market to some of these countries, which could not afford to lose out on it. He was replying to questions about some countries creating hindrances to trade by invoking labour laws, packaging standards and safety measures.
Govt bans export of non-basmati rice
New Delhi: The government has decided to place a complete ban on the exports of non-basmati rice. In October last year, the Centre had banned non-basmati rice exports, but allowed exporters to honour existing orders. With the latest notification, the government has prohibited exports even under this condition. “According to our estimates, we have surplus rice in the country and there is no reason to totally shut down exports.The decision is a definite setback to rice exporters and will affect their credibility,” said G.K. Gupta, president of the Federation of Indian Export Organisations.
Bhel gets Rs3,400 crore, 1,000MW order in UP
Mumbai: Bharat Heavy Electricals Ltd (Bhel), whose boilers and turbines generate about two-thirds of India’s electricity, said it won a Rs3,400 crore contract for a power project in northern India. Bhel will build a 1,000MW thermal power project for the Uttar Pradesh Rajya Vidyut Utpadan Nigam Ltd, an emailed statement said.