Eighteen people were killed on Wednesday after a chimney collapsed at a Balco plant at Korba in Chattisgarh. A Chinese firm Sepco had outsourced the contract for making the chimney to an Indian company called GDCL. The accident comes at a time when the Indian government is considering new guidelines for Chinese power equipment manufacturers like Sepco.
Prime Minister Manmohan Singh attended the G-20 summit in Pittsburgh on Thursday and Friday amidst reports that member nations were close to an agreement on coordinating their economic policies. Before he left for the summit, the prime minister had called for reform in institutions like the IMF and talked about the need for a strong stance against protectionism. India has been demanding voting rights at both the World Bank and the IMF.
India and Japan will restart stalled negotiations on a free trade agreement despite old obstacles. India wants its pharmaceutical companies to get greater access to Japanese markets. But Japan doesn’t recognize US FDA standards for Indian drugs and wants clinical trials for the drugs to be held in Japan. Japan is also seeking a bilateral agreement on government purchases. But India is unlikely to agree to such an agreement after an UNCTAD study found it would give Japan an advantage. Negotiations will resume on the 29 September.
In what could be a sign of economic recovery, Indian companies are paying more than twice as much in taxes in the second quarter compared to the first quarter. Advance taxes paid by Indian firms rose to Rs44,010 crore in the quarter ending in September from just Rs20,720 crore rupees in the previous quarter. Second quarter tax collections for Indian companies this year are 14.7% higher than in the same quarter last year.
On Tuesday Sebi modified its regulations for corporate takeovers. Under the new rules, companies that buy GDRs and ADRs with voting rights issued by an Indian company, will have to make an open offer to buy an another 20% of the shares. The previous rules for open offers rules came into effect when one company bought more than 15% of the equity in another company. The old rules also did not apply to GDRs and ADRs.
And Tuesday’s announcements could have an impact on the merger deal between Bharti and MTN. As part of the deal, MTN is supposed to receive a 36% stake in Bharti-25% through GDRs and 11% through cash. And though experts are divided, most believe the new norms will make the deal more complicated.
This week the World Bank cleared its largest ever loan for India. Out of the loan’s $4.3 billion, $2 billion will be used to inject capital into some public sector banks. Another $1.2 billion will be for the government’s India Infrastructure Finance Company or IIFCL. $1 billion will go to the government-owned Power Grid Corporation and the remaining $150 million will go to a rural water and sanitation project in Andhra.
Wholesale prices rose for a second week. The wholesale-price index climbed 0.37% in the week ended 12 September from a year earlier. The bad monsoons are expected to further drive inflation.
Air India has dumped its plan to restructure a deal for Airbus 320 planes. It will now to stick to its original plan of inducting the 15 planes by the end of next year. Earlier, the loss-making airline had asked for a restructuring plan to make payments easier.
General Motors and Reva Electric Car Company will jointly develop an affordable electric car for the Indian market. Reva already makes small electric cars for domestic and foreign markets, while GM’s Volt will be launched next year.
Ford Motor has entered India’s small car market with a bang. On Wednesday, it unveiled the Figo, its first small car for the Indian market. Figo, which is Italian slang for ‘cool’, will be assembled at Ford’s Chennai factory.