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ECONOMY
Exports surge 23 % to $16.64 b in August
• India's exports continued to surge for the tenth successive month growing by 22.5 per
cent to $16.64 billion in August as compared to the same period last fiscal.
• However, imports also jumped by 32.2 per cent year-on-year to $29.67 billion in August,
according to the government data released here on Friday.
• During April-August this fiscal, exports posted a growth rate of 28.6 per cent to $85.27
billion on a year-on-year basis. Imports grew by 33.1 per cent to $141.89 billion.
• The trade deficit for the period stood at $56.62 billion, outstripping the deficit of $40.28
billion logged in the same period a year earlier. In August, the trade deficit widened to
$13.03 billion as compared to the year-ago period.
• The government is aiming for around 15 per cent export growth in the current fiscal year
to March 2011 after a drop of nearly 5 per cent in the previous year and is confident that
it will be able to touch the $200-billion export target set for 2010-11. India's exports rose
more than 30 per cent each month between November and June. Hailing the 22.5 per cent
growth, Federation of Indian Export Organisations (FIEO), President A. Shakthivel said it
reiterated FIEO's view that India's exporters were on our course to realise the export
target or even surpass it to reach $210 billion.
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IDBI Bank Chairman and Managing Director R. M. Malla said, while elaborating on the
Foundation Day initiatives.
• IDBI Bank has extended 7-day banking services to customers in select branches in five
cities, that is, Mumbai, Delhi, Chennai, Pune and Bangalore.
• The bank will also offer extended banking hours from 8 am to 8 pm in these five cities
with a view to providing convenience to its customers. A specifically designed ‘Women
International Debit card' is also being launched for its ‘Super Shakti' account holders.
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grow manifold in the coming years. She urged the SCI to gear up, underlining that India
was dependent on import of oil, gas and coal.
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• The French firm had gone public with its offer to buy Genzyme in August, when it had also
hinted at the possibility of an unfriendly takeover attempt. Sanofi-aventis said it tried to engage in
“constructive discussions with Genzyme,” but the latter's continued refusal to do so led to the
hostile offer. A meeting between the two companies' CEOs on September 20 on the proposed deal
had failed. The transaction is valued at about $18.50 billion.
• M&M has proposed to invest Rs.300 crore on the tractor manufacturing facility over the next
three years that will provide direct employment to about 2,000 people and indirect employment to
another 5,000 persons.
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Cabinet approves 10 % divestment in SCI
• The Centre on Tuesday embarked on a two-pronged strategy, allowing disinvestment of
10 per cent of its stake in Shipping Corporation of India (SCI) and allowing it to raise
additional equity of like quantum.
• The Cabinet Committee on Economic Affairs on Tuesday approved the continuation of
30 per cent reservation quota of the requirement of Bharat Sanchar Nigam and
Mahanagar Telephone Nigam for procurement of equipment from debt-ridden ITI,
Bangalore-based public sector undertaking under the Ministry of Communication and IT.
• This was an off-market transaction, following which the Chennai-based industrialist's direct stake
in SpiceJet has now increased to 17.72 per cent, the company said in a filing to the Bombay Stock
Exchange.
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• The airline, India's second largest low-cost carrier.
• The world should have their shares,” Mr. Pranab Mukherjee told PTI here on Wednesday.
• NELP-IX will be announced on October 15 and the first road show will be held in Mumbai on
October 18. The last date for bidding is March 18.
• The NELP rounds have secured $14 billion investment, he said, adding that the last round, NELP-
VIII, attracted investment commitment of $1.1 billion.
• Reliance Industries' Dhirubhai—1 and 3 gas finds in the D6 block in Krishna Godavari basin off
the east coast has been the biggest success of NELP. The block is currently producing 60 million
standard cubic meters of gas per day, which has increased the domestic gas production by about
72 per cent over that of 2008—09, he said.
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• The area under sugarcane is higher by 20.41 per cent, while the area under cotton
increased by 8.9 per cent and jute acreage went up by 9.68 per cent over last year.
• The cultivation of oilseeds has shown a marginal increase of 0.32 per cent. The oilseeds
acreage is 17.5 million hectares this year compared to 17.4 million hectares sown last
year.
• In the wake of Cairn Energy forming a panel to secure the interest of minority
shareholders in the sale of its Indian interest, its suitor Vedanta on Monday ruled out
raising the open offer price for minority stakeholders.
• Its open offer itself failed to take off on Monday in the absence of clearance from the
Securities and Exchange Board of India.
• Vedanta is paying up to $8.48 billion for 40-51 per cent stake in Cairn India that operates
the country's largest oilfields, and its group firm Sesa Goa was to make an open offer on
Monday for an additional 20 per cent stake at Rs.355 a share to minority shareholders of
the target firm.
Bridgestone to invest Rs. 2,600 cr
• Japanese tyre major Bridgestone is planning to produce truck and bus radial tyres at its facility in
Kheda, near Indore in Madhya Pradesh. The company is also planning to set up a new factory at
Chakan near Pune to increase the capacity of PSR (passenger car radials) and truck tyres.
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• To the disappointment of the government and concern of India Inc., the growth in
industrial production plummeted to 5.6 per cent in August — the lowest in 15 months —
from 10.6 per cent in the year-ago period, mainly owing to negative growth in capital
goods stemming from a slump in manufacturing output. The official data on the Index of
Industrial Production released here on Tuesday revealed that the manufacturing sector,
which accounts for nearly 80 per cent of the IIP numbers, witnessed a sharp dip in growth
to 5.9 per cent during the month from 10.6 per cent in August 2009. Worse still, the
capital goods segment strayed into negative territory and slipped by 2.6 per cent as
compared to a robust growth of 9.2 per cent posted in the same month last year.
• The lowest growth in factory output in previous months was in May last year at 2.7 per
cent. The slump in August this year, however, may be viewed as a one-off aberration as
economic analysts had earlier projected a likely dip in industrial growth to single digit
owing to the high base effect of August 2009. Moreover, the marginal growth of 3.7 per
cent posted by the six infrastructure industries during August this year was also seen as a
signal of lower overall industrial output growth for the month.
• The Minister was ‘highly impressed' by the high-tech National Emergency Management Centre
he visited here. The centre gathers online information about natural and manmade disasters all
over Russia and coordinates relief and mitigation efforts.
• The two sides agreed to explore the possibility of setting up a joint venture in India to produce
silicon chips and telecom equipment. The idea came up during the Minister's visit to the Moscow-
based Micron Company, which boasts an integrated chip-making facility.
• Priority areas
• “We are looking to Russia, which is among the few countries manufacturing 3G and WiMax
chips, to assist India in achieving self-sufficiency in this field.
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• Vodafone will utilise this latest HSPA technology to deliver services such as video
telephony, mobile broadband, mobile TV and others.
• “The New Exploration licensing Policy round IX is being launched in the background of positive
economic conditions, including revision of the administered price mechanism (APM) gas price
and market determination for price of petrol,'' Petroleum and Natural Gas Minister Murli Deora
told reporters at the launch programme here. The 34 blocks, which include 15 re-cycled blocks,
cover a sedimentary basin area of 88,807 sq. km. The deadline for making a bid for the blocks is
March 18, 2011. The previous eight rounds of NELP in 235 blocks have fetched an investment of
around $14 billion.
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• The IX round of auction comes amid indications that the government is doing away with tax
incentives under the new Direct Tax Code (DTC) proposed to be implemented from April 1,
2012.
• “Investors basically want clarity in NELP IX. The position is absolutely clear,'' Petroleum
Secretary S. Sundareshan. The DTC, once in force, would apply to all production sharing
contracts in the future including under NELP IX, he added. Till it does, the production sharing
contracts will be governed by the existing income-tax laws.
• Under the current Income-tax Act, companies that started crude oil production before April 1,
1997, are exempted from paying taxes on profits for seven years. Refineries, which started
operations after October 1, 1980, and before March 2012, are also eligible for the same level of
incentive.
• However, no tax breaks are given to natural gas finds, except for the gas that is to be produced
under NELP VIII blocks and the four coal bed methane (CBM) blocks. The first roadshow for
NELP IX will be held in Mumbai on October 18. “The discoveries made under the NELP have
resulted in in-place hydrocarbon reserve accretion of a staggering 642 million tonnes of oil and
oil equivalent gas,'' Mr. Deora said.
• The VIII round, which closed on October 12, 2009, attracted investment commitment of $1.34
billion for 36 blocks that received offers. Under NELP VIII, 70 areas or blocks for exploration
were offered, the biggest licensing round in India. Of the 36 areas bid for, the government had
awarded 33 blocks to successful bidders.
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• Nippon Pipe is a subsidiary of Siam Nippon Steel Pipe Company India Ltd., Thailand, which, in
turn, is a subsidiary of Nippon Steel of Japan.
• The Japanese Zone has been developed by the Rajasthan State Industrial Development and
Investment Corporation Ltd. (RIICO).
• The annual installed capacity of the unit would be 10,000 tonnes in 2012, which would increase
to 25,000 tonnes in 2015. In the Neemrana's Japanese Zone, 22 companies (including Nippon)
have been allotted 303 acres.
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• The RBI has set up a sub-committee of the Central Board of Directors of the central bank
to study the issues and concerns of the microfinance sector, including interest rates
charged by the lenders in this area. “Y. H. Malegam, a senior member on the Central
Board of Directors of the Reserve Bank of India, will chair the sub-committee,” the
statement added.
• A Rs. 760-crore bailout package given by the Delhi Development Authority (DDA) to Emaar-
MGF, a private builder, also came under the scanner.
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• At present, Eurocopter said, its AS365 Dauphin was serving for off-shore, para-public
and government transport, while it offered the EC135, EC145 and AS350 Ecureuil for
medical emergency and law enforcement duties including in naxal-affected areas.
• Vodafone is the second mobile operator to announce specific plans for 3G after Tata Teleservices,
which earlier announced plans to launch the service on November 5.
• Vodafone owns 67 per cent of Vodafone Essar, with the Essar group holding the balance. The
Essar group has an option to sell its entire stake to Vodafone for $5 billion by May 2011.
• “The IT department on Friday issued an order raising a tax demand of Rs.11,217.95 crore on
Vodafone International Holdings BV, treating it as an assessee in default under Sec. 201(1) of the
Income-tax Act, 1961, (the Act), for failure to deduct tax as required under Sec. 195 of the Act
before making a payment of $11.076 billion (around Rs.55,000 crore) to Hutchinson
Telecommunications International Ltd. The tax demand is to be paid within 30 days of the receipt
of the notice of demand,” an official statement said.
Polaris launches learning centre
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• Polaris Software Lab, a leading financial technology company, on Friday announced the launch
of first phase of The School of Financial Technology, with the acquisition of a 50-acre facility
owned by Catalytic Software Ltd., (CSL) Hyderabad, principal shareholder of CSL being
Catalytic Software, headquartered in Seattle, U.S.
• Asserting that India was on track to surpass the $200-billion exports target, Union Commerce and
Industry Minister Anand Sharma said on Monday that during the April-September period of this
fiscal, exports aggregated $103.30 billion, a 27.6 per cent increase compared to last year.
• In a statement to the stock exchanges TGB (erstwhile Tata Tea) said the subsidiary had an option
to increase its stake in the next 12 months.
• The Petroleum Ministry has maintained that Cairn Energy, which had on August 16 announced
the sale of 40 to 51 per cent stake in Cairn India to Vedanta for $8.48 billion, has to seek specific
approval for transfer of control in each of the ten properties it has in India.
• On its part, Cairn Energy had in mid-September applied for specific approvals in seven
exploration blocks it had won under the New Exploration Licensing Round (NELP) since 1999
and sought an overarching consent in the case of its three pre-NELP producing properties
including the giant Rajasthan fields as contracts for them do not have specific prior-approval
clause.
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• The company, which is celebrating its 150th anniversary, is to invest in India Rs.100 crore in an
integrated manufacturing unit and other expansion projects in the next four years as part of its
plans to achieve a turnover of Rs.1,000 crore by 2014.
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• “To examine the prevalent practices of MFIs regarding interest rates, lending and recovery
practices, to identify trends that impinge on borrowers' interest,” the RBI said in a notification.
• Earlier this month, the Reserve Bank had appointed a sub-panel, under the Chairmanship of Y. H.
Malegam, to look into the functioning of MFIs. The committee will submit its report in three
months. The RBI will examine the conditions under which loans to MFIs could be classified as
priority sector lending and give appropriate recommendations.
• Under the MoU, PFC plans to offer debt financing, equity financing and consultancy services to
NPCIL to facilitate the latter's large capacity addition programme. While PFC is a leading
financier in the electricity sector, NPCIL is the only player operating nuclear power reactors in
the country.
• NPCIL now operates 19 nuclear electricity reactors in the country with an installed capacity of
4,560 MWe. Three reactors, with a total capacity of 2,220 MWe, are in an advanced stage of
construction. They are two units of 1,000 MWe each from Russia under construction at
Kudankulam in Tamil Nadu and an indigenous pressurised heavy water reactor (PHWR) of 220
MWe at Kaiga in Karnataka. In addition, excavation is under way for 700 MWe indigenous
PHWRs, two each at Kakrapar in Gujarat and Rawatbhatta in Rajasthan. The NPCIL's installed
capacity will reach 9,580 MWe by 2017, 20,000 MWe by 2020 and 60,000 MWe by 2032, says a
press release from NPCIL.
• PFC's asset base, cumulative loan sanctions and disbursements as on June 30, 2010 stand at
Rs.85,597 crore, Rs.2,88,932 crore and Rs.1,47,056 crore, respectively, says the release.
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