The Mint report for 17 September 2009

The Mint report for 17 September 2009

New Delhi: On Thursday the Union Cabinet took a whole host of decisions starting with an approval of a Rs17,700 crore loan from Japan for the Western Dedicated Freight Corridor. The main condition is that all prime contractors must be Japanese.

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The Cabinet approved a rail ministry proposal for paying productivity-linked bonuses to some non-gazetted employees for 2008-09. It also extended the term of the 13th Finance Commission by three months to January. But most interesting of all was its decision not to oppose the Delhi High Court ruling on de-criminalising homosexuality.

The environment ministry has proposed a new autonomous National Environment Protection Authority. The move has been prompted by continuous sparring between the executive and the judiciary over environmental issues.

The environment ministry is hoping Parliament will approve its proposal in the winter session later this year. Earlier it had also proposed a green tribunal that would subsume many court-appointed committees.

After 14 continuous weeks of fall, inflation has risen in the first week of this month. The Wholesale Price Index went up 0.12% in the week ending 5 September compared to a year earlier. That could be bad news for India’s economy at a time when a drought is driving up food prices and slowing down its growth prospects.

Air India is trying to get flying fit. The troubled airline has been told to shape up so it can get a $1 billion equity infusion from the government. And Air India has started the process by putting an end to loss making routes and making sure its remaining flights are full. Also Air India’s board plans to meet next week to make a decision on wage cuts, something unions strongly oppose.

India’s ambitious road building plans could get funding from pension funds and private equity firms in America. Road transport minister Kamal Nath says the funds are likely to provide $10 billion over the next three years for Indian road projects. A recent study from Goldman Sachs estimates India will need $1.7 trillion to build infrastructure over the next decade.

Petronet LNG plans to raise $1 billion in debt to build power plants of its own. It will raise the money from foreign and local banks by the end of next year and plans to build the plants next to its import terminals at Dahej in Gujarat. Petronet is India’s largest importer of liquefied natural gas and plants to use the fuel for its proposed power plants.

The Indian Commodity Exchange could start trading next month. Its founders have confirmed they have buyers for a 10% stake in the exchange and expect to get regulatory approval in the next few days. The exchange will trade futures in gold, natural gas and other commodities.

Scientists in the US and the Czech Republic say they’ve developed a system that can help gauge the likelihood of a terrorist attack. Writing in Friday’s issue of the journal Science, they say that if you go to a country from where terror attacks originate and conduct a simple poll of citizens there to measure how much they disapprove of the leadership of a second country, you can estimate a risk of a terrorist incident in that second country.

The new study is the result of a poll that asked people from 19 Middle Eastern countries their views on the governments of nine major countries including India.

Markets made only modest gains on Thursday. The Sensex rose 34 points to close at 16,711 and the Nifty went up 7 points ending trade at 4,966.