Fin Commission concerned over subsidies in AP

Vijay Kelkar, chairman of the 13th Finance Commission, Monday voiced concern over subsidies provided by Andhra Pradesh, saying these could potentially jeopardise the state’s recent impressive fiscal achievements.While acknowledging the need for ensuring food security to the poorest of the poor, he told Chief Minister Y.S. Rajasekhara Reddy that this aim can be best secured through improvements in the income and human capabilities of all citizens. “Subsidies detract scarce resources towards the development of these capabilities and their prudent control and management is therefore essential,” he said while addressing a meeting with the chief minister, his cabinet colleagues and senior officials. Andhra Pradesh is the biggest consumer of central food subsidy. “In addition, the state government subsidises the consumer price of rice, the fiscal burden of which is projected to be Rs.1,900 crore in 2008-09 budget estimates,” Kelkar said. “In the same year, the state also intends to subsidise AP Transco (electricity utility) to the tune of Rs.2,385 crore, again for providing subsidised power to agriculture.” Kelkar made the observations after the chief minister sought higher transfer of resources from the centre for continuing various programmes like free electricity to farmers, farm loan waivers, “Arogyasri” or community health insurance and massive irrigation programme “Jalayagnam”. Kelkar said the fiscal projects presented by the state for the period 2010-15 prima facie indicate a worsening in the state’s fiscal management. He further voiced concern over intra-state disparities in income.more »

Bajaj unveils Discover 100 CC..


In a bid to increase its market share in the 100 cc category, two-wheeler major Bajaj Auto on Wednesday launched its popular selling model "Discover" in the entry level segment. Bajaj held a marketshare of 43 per cent in the premium 150 cc segment contributed by sales of its premium bike 'Pulsar' and a nine per cent market share in the entry level segment through "Platina" as of April-June 2009. With the latest launch, the company hoped to garner a significant market share in the segment this fiscal, Bajaj Auto Ltd Deputy General Manager Chandrasekar R told reporters here at the unveiling of the bike at a media conference. The new bike, equipped with its patented DTS-SI technology and priced at Rs 40,000 ex-showroom. (Agencies)more »

L&T Q1 net profit triplesto Rs 1,598 cr


India's largest engineering and construction firm, Larsen & Toubro Ltd, said its quarterly profit tripled, helped by an exceptional gain from sale of its investment in UltraTech Cement. Net profit rose to Rs 15.98 billion ($328 million) in its fiscal first quarter ended June from Rs 5.02 billion a year ago. It made a profit of Rs 10.2 billion on sale of its long-term investment in UltraTech, the company said. Net sales rose to Rs 73.6 billion from 69 billion. A Reuters poll of 11 brokerages had forecast net profit of Rs 5.48 billion, on net sales of 81.1 billion. (Agencies)
Inflation rises
to -1.21%more »

Govt rejects single tax & levies demand of telecom


New Delhi.

The Government has rejected the telecom industry’s plea for a single tax regime, giving a big blow to the private GSM operators long-pending demand. A committee was constituted to study the structure of taxes and levies in the telecom sector and it recommended to continue with the single tax regime which was accepted by the Government, Minister of State for Telecom and IT Gurudas Kamat said in a written reply in Rajya Sabha on Monday. He said several Union and State Governments offices as well as individual subscribers owe Rs 4,748.96 crore and Rs 1,179.84 crore to state-run telecom firms BSNL and MTNL, respectively. The levy rationalisation committee was set up in the Budget 2007 to study the taxation and levies in the telecom sector, which is about 30 per cent of the total revenues..more »

$3 billion loan to overcome bankruptcy


CIT Group Inc’s board approved a deal late Sunday with major bondholders to keep the company out of bankruptcy with a USD 3 billion rescue loan. The emergency financing is intended to give the ailing company time to restructure some of the billions of dollars in debt payments coming due this year, the Times reported, citing anonymous sources. CIT representatives could not immediately be reached for comment. New York-based CIT had been negotiating with key bondholders — including bond manager Pimco — in an attempt to avoid a bankruptcy filing. Jeffrey Peek, the company’s chairman and chief executive, was actively involved in the talks, according to a person briefed on the matter. The person spoke on condition of anonymity because the talks are confidential. CIT has been scrambling to raise USD 2 billion to USD 4 billion after the federal government refused to bail out the company. ..more »

‘Share dips 18 per cent in 9 years’


The contribution of manufactured goods exports in India’s total overseas shipments has declined by 18 per cent during 1999-2000 and 2008-09, a study by industry body Assocham said today. Increasing competition and demand saturation in economies of scale have adversely impacted manufactured goods exports, it said.
“India’s manufacturing sector contribution in the GDP is around 17 per cent as compared to 35 per cent in China.
In South Korea, Malaysia and Indonesia the share of the sector in GDP is around 30 per cent,” Assocham President Sajjan Jindal said.more »

HDFC Bank cuts lending rate by 25 basis points


The country’s second largest private sector lender HDFC Bank today slashed benchmark lending rate by 25 basis points to 15.75%. Benchmark Prime Lending Rate has been reduced to 15.75% per annum with effect from July 20, HDFC Bank said on its website. The cut in lending rate follows the reduction in the fixed deposits rate effective from May 18. In the past six months, the PLR has been reduced by 75 basis points. The bank last reduced its PLR in December 2008, when the rate was brought down by 50 basis points to 16%. Private sector lenders mostly give loans below PLR. However, some of the corporate loans are linked to the benchmark rate. Thus, to study the relevance of PLR in the changed scenariomore »

Rupee up 22 paise to 48.50 a dollar

The Indian rupee strengthened by 22 paise at 48.50 in opening trade on Monday on expectations of increased foreign fund inflows as markets may open higher in tandem with firming trends on the other Asian equity markets. However, dollars’ demand from importers capped rupee’s gains to some extent. At the Interbank Foreign Exchange (Forex) market, the domestic unit was quoted higher at 48.50 a dollar, a gain of 22 paise over the previous close of 48.72/73. Rupee weakened by 6 paise on Friday despite the firm equity markets. Meanwhile, the BSE Sensex ended 494.67 points, or 3.47 percent higher on Friday, while Hong Kong’s Hang Seng index was up 2.25 percent in morning trade today.
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‘Don’t kiss, say namaste’

While in India, do as the Indians do and mind your manners, say ‘namaste’ and don’t kiss women while greeting them - that is the message given to British companies keen to set up shop in the country. The UK India Business Council organised a crash course in etiquette this week for companies based in and around Birmingham, and told them that it was important to understand how people in India operate.
At the Insight India Day organised by UKIBC with bank major HSBC, the companies were told that many British companies and executives were making ‘big mistakes’ when they travelled to India to explore business opportunities. Sharon Bamford, chief executive of UKIBC, said, “The most important thing people need to learn is the reality of what India is like.