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Union Bank, PNB cut base rates;OBC ups deposit rates

Written By Unknown on Kamis, 31 Januari 2013 | 23.25

Making home and auto loans cheaper, Punjab National Bank and Union Bank of India today cut their minimum rates of lending or the base rates by 0.25 percent each to 10.25 percent, following the Reserve Bank cutting its key rates two days ago.

Also read: Rate cut limited if CADs remain at current level: RBI

"Our asset liability committee met today and we decided to cut our base rate by 0.25 percent to 10.25 percent following the RBI decision," Union Bank of India Chairman and Managing Director D Sarkar told reporters here. The New Delhi-headquartered Punjab National Bank also informed the BSE that it will be reducing its rate by a similar measure to 10.25 percent effective February 9. "We have decided to pass on the benefit of the rate cut to our customers but have not taken a call on the deposit rates," PNB Chairman and Managing Director KR Kamath told reporters in the capital.

Meanwhile, another state-run bank Oriental Bank of Commerce today announced that it has increased deposit rates on select bulk maturities from tomorrow by 25 bps. The bank will be offering 25 bps more to its bulk depositors, including NRO deposits of less than Rs 1 crore in different maturities of less than one year. The bank also said that following the recent RBI guidelines on bulk deposit categorisation it has merged term deposits of under Rs 15 lakh and above but less than Rs 1 crore.

The move to cut base rates by two state-run banks comes within two days of the RBI cutting short-term lending rate. IDBI Bank, State Bank of India and the Royal Bank of Scotland have already cut their base rates. Others, like HDFC Bank and Federal Bank have opted for reducing rates by up to 0.50 percent in particular categories of loans. However, both PNB and UBI did not cut their deposit offerings. Analysts feel that cutting the base rates ahead of a reduction in cost of funds will hurt the banks' margins even as they are faced with a slowdown in the deposit mobilisation during the fiscal.



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India's domestic air traffic shrank by 2.1%: IATA

Domestic air traffic in India last year shrank 2.1 percent below the 2011 levels due to weak economic growth and exorbitant operational costs, including high taxes, global airlines' body IATA said today.

However, the overall domestic air travel markets expanded four per cent in 2012 compared to 2011 with China as well as Brazil registering "strong growth" and "smaller expansion" of 0.8 percent in the US domestic market which constitutes almost half of global domestic travel.

"Indian domestic travel shrank by 2.1 percent on 2011 levels. Weak economic growth was exacerbated by increasing operational costs, insufficient infrastructure, high taxes and onerous regulation," International Air Transport Association said announcing the full-year traffic results for 2012.

The growth in capacity (number of aircraft seats offered) in Indian domestic sector fell drastically to 0.3 percent from 16.2 percent in 2011, while average load factor (filling up of seats on offer) was 72.9 percent, it said. However, the global domestic air travel markets expanded four per cent. China registered 9.5 percent growth and Brazil 8.6 percent, in contrast to 2.1 percent contraction in India, the latest study showed.

Japan's domestic market expanded by 3.6 percent, but was still seven per cent below pre-tsunami levels. The overall global traffic data showed a 5.3 percent year-on-year increase in passenger demand and a 1.5 percent fall for cargo.

Demand in international markets expanded at a faster rate of six percent than domestic travel at four percent. In both cases emerging markets were the "main drivers of growth".

Growth and high aircraft utilisation combined to help airlines deliver an estimated USD 6.7 billion profit in 2012 despite high fuel prices. "But with a net profit margin of just one per cent, the industry is only just keeping its head above water," IATA chief Tony Tyler said.



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Axis Bank closes QIP issue, mops up Rs 4,726 cr

Moneycontrol Bureau

Private sector lender Axis Bank successfully mopped up Rs 4,726 crore through the qualified institutional placement (QIP), which closed on Thursday. This equity capital raising was a part of the total of Rs. 5,537 crore, which includes a preferential offer to certain promoters of Axis Bank .

"Large global houses and long term institutions like pension funds, insurance companies and mutual funds have reposed their faith in the bank. We believe that the success of our fund-raise signals the belief in the India promise and the renewed interest global investors have in high quality companies and issuers from India," Shikha Sharma, MD & CEO, Axis Bank said in a release.

This offering, according to the release, has led to a redistribution of the bank's shares with the weight of long only institutions rising significantly. Following this QIP, the shareholding of the promoters will stand at 33.5%, other resident shareholders at 19.3% and global institutions (including GDRs) at 47.2%.

The board of directors of the bank approved the proposed share sale at their board meeting held on December 17, 2012. India's third largest private sector lender had closed its third quarter earnings with a capital adequacy ratio of 13.73%.

In the last one month, Axis Bank shares climbed 11% as against 2% rise of the Bank Nifty, the broader index for banking stocks.



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Mahindra Navistar to export HCV trucks to South Africa

Commercial vehicle maker Mahindra Navistar Automotive will start exporting Heavy Commercial Vehicle (HCV) trucks to South Africa next year, a top official today said.

"We have plans to export our HCV trucks to South Africa during next fiscal. (Currently) our products (trucks) are being tested for export market," company's MD & CEO, Nalin Mehta told reporters here today.

The products, which will initially be exported, will be in 16 and 25 tonne capacity, he said, adding that the products would be manufactured here.

Mahindra Navistar, which has installed production capacity of 40,000 trucks, has so far sold 7,000 trucks since commencing production in June 2011 in the domestic market.

On expansion, he said the company will inject a sum of Rs 250 crore in next 2 to 3 years on adding new product line and stepping up capacity.

"A sum of Rs 250 crore will be invested in next 2-3 years which will be spent on launching new models of commercial vehicles," he said.

The company has already invested Rs 1,050 crore in commercial vehicle business.

Mahindra Navistar, having 5-6 percent market share, has 10 products in its portfolio and plans to roll out 3-4 models with new investments, he said.

About buying the 49 percent stake of Navistar's Group, he said that the acquisition by Mahindra & Mahindra in Mahindra Navistar Automotives and Mahindra Navistar Engines would be completed within 2-3 weeks.

Mahindra & Mahindra had announced to buy Navistar's 49 percent stake in both joint ventures for Rs 175 crore. He also added the Navistar Group will continue to provide technical assistance to Mahindra.

Asked about impact of slow growth in GDP on commercial vehicle (CV) industry, he said the industry "degrew" by 17-18 percent in current fiscal due to slowdown in the economy. The CV industry size exceeding 3.5 tonne capacity in the country stands at 4.5 lakh units.

"Worst is over now as interest rates will come down (after RBI reducing policy rates) and inflation is also down. The positivity (in the economy) is building up. In next six months, the things will get better," he said.



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JSW Ispat merger approved by JSW Steel shareholders

JSW Steel today said its shareholders have approved merger of JSW Ispat Steel with itself, paving the way for the company to become second largest steel producer in the country.

In a filing to the BSE, the Sajjan Jindal-led company said that 99.99 percent shareholders voted in favour of merging JSW Ispat with the company in the meeting, held yesterday.

Now, a formal nod of the Bombay High Court is required to complete the merger process. Post merger, JSW Steel will have an annual production capacity of 14.3 million tonnes and become second largest domestic producer after SAIL.

According to the merger plan, shareholders of JSW Ispat will get one JSW Steel share for every 72 shares they hold. Moreover, JSW Ispat will transfer its Kalmeshwar undertaking and JSW Steel will transfer its downstream undertaking to JSW Steel Coated Products. Besides, JSW Building Systems will also be merged with JSW Steel.

Announcing the merger in September, JSW Steel chairman Sajjan Jindal had said that "this merger will give us a lot of synergy in operation and economies of scale. We can now go for brown-field expansion at Vijayanagar in Karnataka and Dolvi in Maharashtra."

Besides, it will also reduce the cost of borrowing for JSW Ispat and the merged entity is likely to get Rs 250 crore benefit from it. Moreover, the net debt level of the merged entity would be around Rs 25,200 crore with a debt to equity ratio of 1:1.15.

Post-merger, promoters of JSW Steel will hold 35.12 percent in the merged entity, while company's second largest shareholder JFE Steel holding will come down to 14.92 percent. JFE had 15 percent stake in JSW Steel till the time of merger announcement.

JSW Steel had acquired 41 percent stake in debt-ridden Ispat Industries from Pramod and Vinod Mittal, brothers of the steel czar L N Mittal, in December 2010 for about Rs 2,157 crore. Ispat Industries was subsequently named as JSW Ispat.

JSW Steel later increased its stake to 46.75 percent and remains the single-largest shareholder in JSW Ispat. The Mittal brothers will own around 3 percent stake in the merged entity. Before the merger announcement, the Mittal brothers had nearly 20 percent stake in JSW Ispat.

The trigger for the merger was JSW Ispat clocking a net profit of Rs 478.24 crore during the April-June quarter of 2012, which was its first one in last few years.

After returning to profit making, JSW Ispat would now be eligible to lay claim of deferred tax benefits of about Rs 2,088 crore, which would be a huge gain to JSW Steel.



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Etihad will benefit more from Jet-Etihad deal: Experts

Jet Airways today said that they are not sure when the deal with Etihad will be completed. However, CNBC-TV18 has learnt that the Jet board may finalise the deal tomorrow and an announcement can be expected.

Etihad is likely to buy 24 percent stake in Jet Airways between Rs 750-800 per share, which is at a premium to the current market price. There will be no major change in the management structure and Naresh Goyal will continue as chairman of Jet Airways but the Jet board will be expanded to make way for 3-4 seats for Etihad representatives.

Talking about the deal in an interview to CNBC-TV18, Kapil Kaul, CEO, South Asia CAPA believes the benefits to Etihad outweigh the benefits to Jet Airways. He further added, Jet is a very valuable asset especially in the market which is going to perhaps be the fastest growing market for next two to three decades.

Also read: Jet-Etihad deal may close tomorrow; stock up over 2%

Saroj Datta, former executive director, Jet Airways said, since Jet and Etihad have parallel routes, so one will now have to see how Jet, Etihad will integrate the parallel routes.

Below is the edited transcript of Saroj Datta and Kapil kaul's interview on CNBC-TYV18

Q: It seems like it is almost a done deal. It was a matter of getting the blessings from the government officials today and perhaps as early as tomorrow is when the deal will finally be inked. Take us through what this could really mean in terms of Jet Airways, for a company that was against foreign direct investment (FDI), that fought against FDI for years together and today it is finally made up its mind to go ahead with Etihad?

Datta: Jet Airways was the first one with foreign airline partner way back in 1993 when FDI or foreign direct investment in airlines in India was permitted. Jet Airways started its operations with Gulf Air and Kuwaiti Airways as business partners with 20 percent share each. It was only when the policy changed in April 1997 that Naresh Goyal had no option to buyback the shareholding of Gulf Air and Kuwaiti Airways. Since 1997 the FDI policy has been no foreign investment in domestic airlines in India.

Now that it has opened up and there is a requirement for funds for the Indian domestic carriers, at least for some of them. Also with Naresh Goyal's huge contacts and huge relationship with the Gulf Carriers has enabled him to push ahead with the possibility of an investment by Etihad in Jet Airways.

Q: This is going to be a game changer as far as the Indian aviation sector is concerned; there is no doubt about that. Who is it going to benefit more Etihad for getting into this lucrative market or Jet Airways at least for the time being getting this investment which is much needed?

Kaul: I would think the benefits to Etihad outweigh the benefits to Jet Airways. It seems that the money that they will get, about USD 330 million and there are other strategic benefits as we have mentioned in our report. However, Jet is a very valuable asset to have. It is not like acquiring any other asset. It has a 20 year old experience in India, over 100 million passengers, roughly about 116 planes, 3.4-3.5 billion dollar turnover.

As well access to large infrastructure and it is a technology driven company, so it is a very valuable asset in the market which is going to be perhaps the fastest growing market for next two to three decades. To get a foothold in a market like India which is just about couple of hours from your main hub and getting access to this huge pool of traffic.

So, it is extremely valuable for Etihad. As we mentioned in our report had Jet not made some strategic mistakes since 2004, they would not have gone because there is a strategic compulsion to get this deal done.

Q: We are now talking about synergies and there has been a lot of talk about joint sort of go-to market strategy on the part of Jet and Etihad, especially when it comes to the international routes, etc. Take us through what the possible synergies could be and how you see these two companies integrating operations more efficiently?

Datta: That is a very difficult question to answer at this point because we don't know the details of what the agreement between Jet and Etihad is going to say. In terms of either the management composition, board composition or the operations of the two airlines.

Q: On the basis of the information that we currently have which is that Naresh Goyal remains the Chairman, that the board will perhaps be expanded and there will be three to four representatives of Etihad on the board of Jet Airways on the basis of just the preliminary information that we currently have what would you say?

Datta: This basic information that you are talking of is very important but is not totally convenient to give an answer to your question because today Jet and Etihad have parallel operations on various routes. Etihad is operating to 10-12 domestic Indian points; direct services to Abu Dhabi. Of course those same services are going beyond to points in Europe, UK and North America.

So, how these parallel operations will be integrated is not something which I as an outsider of the company can make any serious comments on. It wouldn't be right for me to try and do that either.

Q: This is not just going to be a complex exercise from a regulatory point of view. We do know that there will have to be a substantial change as far as the shareholding pattern is concerned on account of what tailwinds owns. There is always this talk of synergies etc, but sometimes, it can go horribly wrong and this is going to be a complex one to put together, isn't it?

Kaul: If you look at the drivers for Etihad, it is that they would like to feed long haul flights and their other ambition is to create a travel hub for inter-continental travel from Abu Dhabi. According to the strategic blueprint of Etihad, it is largely to feed two objectives. There would be an integration of the networks and it would have to feed each other. It would make sure that there would be an alignment in the initial stages as close as possible and at a later stage, maybe closer. Those are essential details. Network alignment would be critical. What are the contours of the deal, what would be visible immediately, what could be visible later, that wouldn't be known. However, that is critical because they would want to feed traffic to their long haul flights and that is essential.

Q: Speaking of visibility, you also eventually see Jet Airways being de-listed?

Kaul: I think so. If at all Etihad goes up to 49 percent, I see a possibility of de-listing.

Q: Would you think that, that is an eventuality, that we will come to sooner rather than later?

Datta: Anything is possible. I don't think I would like to hazard a guess at this point.



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Cut duty on iron ore to zero: Tata Steel

Written By Unknown on Rabu, 30 Januari 2013 | 23.25

Tata Steel today demanded that import duty on iron ore be cut to zero for rescuing the domestic industry which is facing scarcity of the raw material and regulatory hurdles.

"The Indian steel industry is facing problems due to shortage of iron ore and continued delays in project approvals. The industry will benefit from proactive actions on these fronts in the Union Budget," Tata Steel Managing Director H M Nerurkar told PTI.

He said the first six months of the current fiscal have seen 40 percent jump in steel imports and in order to protect interests of the domestic industry, the Budget needs to revisit last year's hike in excise duty and take steps to discourage dumping of products in India.

"In line with the Government's policy of reducing the import duty on raw materials for making steel, import duty on steel grade limestone, dolomite (which is presently 5 percent) and iron ore (which is currently 2.5 percent) should also be reduced to zero," Nerurkar said.

He added given the priority accorded to infrastructure in the 12th Plan, and "the expectation that the private sector would contribute half of the envisaged investment of Rs 50 lakh crores, the Budget should also look at introducing special incentives to encourage capital goods industries".

Finance Minister P Chidambaram is scheduled to present Budget 2013-14 on February 28. The domestic industry is battling with a number of problems including raw material security after a ban on iron ore mining in some parts of key producing states on concerns over environmental issues and illegal mining.

Also steel projects, including those planned by ArcelorMittal, Posco and many others, worth around Rs 3 lakh crore could not take off because of various issues like land acquisition, delay in environmental clearances, among others.

India's total steel making capacity, including that of the secondary producers, at the end of 2011-12 stood at 89.29 million tonnes per annum (MTPA) and is projected to expand to 200 MTPA by 2020.



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Manoj Kohli to become Airtel MD to revive mobile business

In a major top-level management restructuring, Bharti Airtel is set to appoint Manoj Kohli as its managing director to revive its mobile business.
    
Bharti Airtel's founder Sunil Mittal, who is currently its chairman and managing director, will become executive chairman of the company, after Kohli moves to his new role.
    
Kohli currently heads the firm's international operations as its chief executive officer and is also a joint managing director of the company. A company veteran, he is currently based in Nairobi, the headquarters of Bharti Airtel's African operations.
    
In a filing to stock exchanges, Bharti Airtel said the board changes will be considered at the company's board meeting tomorrow.
    
Gopal Vittal, the new CEO of Bharti Airtel's India business, will be named joint managing director. He was named chief executive after the firm's India CEO Sanjay Kapoor stepped down two weeks back.
    
Vittal will take over as the CEO in March.
    
The management rejig comes at a time when the company is looking at improving profitability while increasing both 3G and 4G subscriber base.
    
Bharti Airtel is also grappling with uncertain regulatory environment and bleeding business in Africa.
    
The company is scheduled to announce its financial results for the third quarter of 2012-13 on February 1.
    
Shares of the company closed at Rs 344.65 on the BSE, down 1.22 percent from its previous close.

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Tata Housing unit announces sale of 100 units

Smart Value Homes Limited (SVHL), a 100 percent subsidiary of Tata Housing Development Company Limited (THDCL), today announced sale of 100 units of the recently launched New Haven here within 15 days of launch.

New Haven is the first project in the city by Smart Value Homes Limited, which aims at being the first green township.

The project offers all amenities essential for modern day living - swimming pool, a well-equipped gymnasium, retail shopping facilities and an indoor games room, THDCL MD an CEO Brotin Banerjee said in a statement here.



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Central Bank of India to get capital support of Rs 2,406 cr

State-owned Central Bank of India today said it proposes to raise Rs 2,406 crore by issuing preference shares to the government.

The board has approved raising of additional equity capital up to the extent of Rs 2,406 crore by way of issue equity shares in favour of Government of India on preferential basis, Central Bank of India said in a filing on the BSE. This is subject to regulatory and shareholder approvals, it added.

Earlier this month, the government approved infusion of Rs 12,517 crore in around 10 state-owned banks over the next three months.

"Pursuant to the Budget announcement made by the Finance Minister on March 16, 2012, we are infusing additional capital into the public sector banks. We will infuse before the end of this fiscal year a sum of Rs 12,517 crore," Finance Minister P Chidambaram had said.

"We think about 9-10 banks will get the money...this will enable the banks to maintain the Tier I CRAR (capital to risk-weighted assets ratio) at a comfortable level and will be compliant to stricter capital adequacy norms of Basel III whenever Basel III is implemented," he had said.

The government infused about Rs 20,117 crore in public sector banks during 2010-11, and Rs 12,000 crore in 2011-12.



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COMPAT adjourns hearing on cement cos plea against CCI

The Competition Appellate Tribunal today adjourned hearing on the plea of 11 cement companies seeking stay on Rs 6,307 crore penalty imposed by fair trade regulator CCI on the grounds of cartelisation.

A three member COMPAT bench - headed by its chairman Justice V S Sirpurkar - would now hear the matter from February 18 to 20. COMPAT is hearing the amended petitions of the companies after CCI served them separate copies of its order providing them with complete details on production, pricing, dispatches and sales.

On October 11, COMPAT had directed CCI to give fresh copies of its order levying penalties on 11 cement companies for cartelisation. In its earlier order CCI had not disclosed various facts about matters such as production, dispatches and pricing.

The companies, which include UltraTech and ACC, were also asked to file their amended petitions before the tribunal after getting the fresh order. On June 21, CCI had slapped Rs 6,307 crore penalty on 11 cement makers. The industry body CMA was also fined Rs 73 lakh.

The cement companies charged with cartelisation include Lafarge India, India Cement, JP Associates, Binani Cement, Ambuja Cement, Madras Cement and J K Cement. "The act and conduct of the cement companies establish that they are a cartel. The Commission holds that the cement companies acting together have limited, controlled and also attempted to control the production and price in the market in India," CCI had said in its 258-page order.

CCI had found "cement manufacturers in violation of the provisions of the Competition Act, 2002 which deals with anti-competitive agreements including cartels". The order was passed following probe by its Director
General (Investigation) on a complaint filed by Builders Association, which has hailed the order saying "it was long-pending and the penalty could have been higher".



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Jet seals wage pact with ground staff

Jet Airways facing some headwinds on the labour front, has given a wage hike of up to Rs 18,000 to its around 7,500 ground staff, sources said today.

The decision comes amidst reports of its pilots meeting in Delhi on Friday to discuss wage hike and long-pending arrear issues with the management.   The Naresh Goyal-promoted airline, which is on the verge of closing a stake sale deal with Etihad, has already signed a tripartite agreement with one of its employees unions, the All India Jet Airways Officers Association, they said.

"The salary hike, which is effective retrospectively from April 2011, is in the range of Rs 10,500-18,000 per month across categories," a union leader told PTI here. The association, which changed its affiliation to the Nationalist Congress Party in 2011 by dumping the Shiv Sena, claims representation of 7,500 employees out of the nearly 13,000 workforce of the carrier.

Sources also said that the NCP leaders played a major role in the wage settlement negotiations. The wage agreement is expected to benefit around 7,500 ground employees which include reservation staff, cargo, cabin, ground service, security among others, they said.

The settlement with the management was reached after intense negotiations over 20 months, sources said, adding, "it will be effective till March next year (2014)." As per the agreement, wages of the A1 category employees
have been raised by Rs 13,000, Grade A2 by Rs 11,750 and those in Grade A3 will now get Rs 9,750 more per month.

Similarly, the salary of Grade A4 have been hiked by Rs 8,750 and that of Grade A5 by Rs 8,750 per month. "Besides, other allowances such as the one for night shift, service pay for those completing 15 and 10 years respectively, meal allowance etc have also been hiked substantially, giving a total hike to these employees in the range of Rs 10,500-18,000 per month," sources said.

The last time Jet signed a wage revision with employees was in 2010 for three years - FY 11-13 - but it failed to meet the obligation, citing recession in the industry and only gave an adhoc hike of Rs 3,500 a month, they said. "The arrears arising out of the wage revision for April 2012-January 2013 will be paid in two tranches next fiscal.

But, the company will not pay any arrears for the April 2011 - March 2012 period, as it had already given an interim hike of Rs 3,500 per month at that time," the leader said. Meanwhile, the airline's technicians who were on a symbolic protest by sporting black bands against management's proposal to freeze wage hikes for the next three years, have called off their agitation and agreed to come on to the negotiation table on February 7, he added.



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Etihad keen to close India deals soon

Written By Unknown on Selasa, 29 Januari 2013 | 23.25

Etihad is looking at closing its India investment in its trip and executives are in India from January 30 onwards, reports CNBC-TV18 quoting sources.

Just yesterday Commerce and Industry Minister Anand Sharma had indicated that he will be meeting an Etihad delegation on January 31 to discuss their India plan. But that's not the only meeting on Etihad's agenda.

Sources also add that after a comprehensive meeting with Jet Airways executives and promoters, Naresh Goyal and family, Etihad is looking to draft and sign a term sheet soon.



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CCI to consider approval to RIL's KG-D6, 46 other blocks

The newly formed Cabinet Committee on Investment is likely to consider tomorrow clearing 47 oil & gas blocks, including Reliance Industries'
producing KG-D6 gas fields, where defence approval has either been withdrawn or withheld.

The Cabinet Committee on Investment (CCI), which was constituted to expedite the clearance for infrastructure projects of Rs 1,000 crore or more, is scheduled to meet for the first time tomorrow evening, official sources said. On agenda is clearance to 47 oil and gas blocks.

The Oil Ministry wants CCI to relax stringent conditions that Defence Ministry has put for exploration in 32 blocks and clearance of 14 blocks which have been declared "No-Go" areas. Sources said companies like RIL have already invested USD 15 billion in these blocks since 2000 and the Ministry of Defence has now withdrawn or withheld clearance to them.

Of the 47 blocks, RIL's KG-DWN-98/3 or KG-D6 block falls in 14 areas which the Ministry of Defence has declared as "No-Go". The reason for classifying the Krishna Godavari basin block, where UK's BP Plc has 30 per cent interest, as 'No-Go' area is that it overlaps with a proposed Naval base.

KG-D6, which was awarded to RIL in 2000 by the Cabinet after clearance from all ministries concerned, has been producing oil since September 2008 and gas from April 1, 2009.

RIL-BP's Mahanadi basin block NEC-OSN-97/2 where sizeable gas discoveries have been made, also has been classified as "No-Go" area as it is close to missile launching range/air force exercise area. Sources said the other 12 "No-Go" blocks are with ONGC, Cairn India and Australia's BHP Billiton and reasons cited for withdrawing clearance include being close to missile launching range, overlapping with proposed Naval base, overlapping with Naval firing range and Air Force exercise area.

Besides the 14 "No-Go" blocks, the defence ministry has imposed stringent conditions in respect of 32 exploration blocks. Sources said the stringent conditions imposed include companies not locating any pipelines or structures on sea surface in the blocks cleared for exploration and production activities.

Subsea/submerged permanent structures, if any, are to be located more than 100 meters below sea surface or outside the DRDO/Indian Air Force danger zone area (on sea surface) or Naval exercise areas, they said adding the conditions were impractical. For one block, clearance has been denied by the Commerce Ministry.

Sources said the Oil ministry in the Cabinet note has argued that non-clearance of blocks will lead to disputes and may severely impact the future growth of the sector.



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Cabinet Committee on Investment meeting on Jan 30

The first ever meeting of Cabinet Committee on Investment is likely to take place on January 30. It seems that the committee may discuss clearances for exploration & production in New Exploration Licensing Policy (NELP) blocks, reports CNBC-TV18 quoting sources.

It is learnt that the cabinet is meeting on Thursday and may take up the pending proposal of reviving Scooters India . The government is looking to infuse about Rs 200 crore in the ailing 3-wheeler company. 

Speaking to CNBC-TV18 Montek Singh Ahluwalia expressed confidence that the Cabinet Committee on Investment will be able to clear project hurdles within the next six weeks.



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Govt working on Vodafone tax issue resolution: FM

Finance minister P Chidambaram today expressed confidence that the government will find a resolution to the Vodafone tax issue. He told reporters after meeting global investors here that the issue figured only peripherally and came up as a question.

"I did clarify to them that Vodafone has formally offered to engage with the government of India in discussions. They had two rounds of discussions with the officials of government of India. "I am confident that we will find a resolution to the Vodafone issue so that we can put it behind us and move forward," he said.

Vodafone has been slapped with an income tax demand notice of Rs 11,200 crore on its 2007 acquisition of Hong Kong-based Hutchison Whampoa's stake in its Indian telecom business. The liability arose following the then Finance Minister Pranab Mukherjee amending the Income Tax Act, 1961 with retrospective effect to undo the Supreme Court judgement that had ruled in favour of the company.

The government is working towards a solution based on recommendations of the Shome panel which suggested that either the government should withdraw the retrospective tax amendment or waive the penalty in case it had to recover the taxes.



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IDBI Bank cuts lending, deposit rates by 0.25%

Within hours of Reserve Bank reducing the key policy rates, IDBI Bank today slashed its lending and deposit rate by 0.25 per cent."The new base rate or minimum lending rate (at 10.25 per cent) will be effective from February 1," the bank said in a release.

The base rate is the minimum lending rate below which banks cannot offer any loan to customers. IDBI Bank was the first one to cut lending rates following the announcement of the RBI to reduce short-term lending rate by 0.25 per cent and deciding to slash Cash Reserve Bank (CRR) by same margin to inject Rs 18,000 crore of liquidity into the system.

Mumbai-based IDBI Bank has reduced the benchmark prime lending rate (BPLR) and fixed deposit rates on select maturities by 0.25 per cent.

"IDBI Bank has taken this proactive step keeping in view the policy measures announced by the RBI in its third quarter review of monetary policy today," it said. The reduction in interest rate is expected to positively impact loan growth both in retail and corporate segments.

Various other banks including the market leader State Bank of India (SBI) said that they would take a call on reducing interest rates in coming days.

National Housing Bank (NHB) has earlier announced cut in lending rates by 0.25 per cent benefiting the home loan borrowers.



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Bharti Airtel bids for Myanmar licence: Sources

Bharti Airtel , India's top mobile phone operator, has bid for a telecoms licence in Myanmar as part of plans to expand in overseas markets, two sources with direct knowledge of the matter said.

The Myanmar government earlier this month invited expressions of interest for two mobile phone licences - a first step towards increasing mobile penetration from 5-10 percent to 80 percent in three years.

The deadline for submitting bids was last Friday.

"We are always open to opportunities provided there is a strategic fit and the market offers significant potential," Bharti Airtel said in a statement, without confirming or denying that it has bid for a licence.

The world's fourth-biggest mobile phone operator by number of subscribers, Bharti also operates in Sri Lanka and Bangladesh in South Asia and 17 African countries.



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AI puts Dreamliner planes for sale, leaseback

Written By Unknown on Senin, 28 Januari 2013 | 23.25

Air India has put all its newly- acquired Boeing 787-8 Dreamliner planes for sale and leaseback and invited bids from prospective lessors by February first week, even as all of these aircraft remained grounded across the world.
   
Air India and other Dreamliner operators across the world have grounded their entire fleet of 50 B-787s delivered so far following a directive from the US Federal Aviation Authority after a fire risk reportedly caused by a battery problem.
   
In spite of this, the national carrier has gone ahead with its plan of sale and leaseback, which has already been approved by the government as part of its turnaround and financial restructuring plans.
   
Sale-leaseback is an arrangement in which an owner sells an asset to a leasing firm and, at the same time, leases it (as a lessee) on a long-term basis to retain exclusive possession and use. This frees capital tied up in a fixed asset, while the lender obtains a guaranteed lease.
   
The airline can also claim tax deductions as the asset was no longer owned but leased, which would help it in streamlining its operations and cut costs.
   
Air India has invited quotations from lessors on or before February 5 on a Request for Proposal (RFP) which said it "would sell the aircraft to the lessor and immediately leaseback them under an operating lease for a period of 12 years, with an option to extend."
   
Though the Indian flag carrier has received six Dreamliners between September and December last and is expected to get one this month, it announced in the RFP the sale and leaseback of seven of them. However, delivery of the seventh plane could be deferred due to the prevailing problem.
   
Air India plans to sell all its 27 Dreamliner aircraft to a lessor and lease them back to operate by paying monthly rentals, a common fund-raising practice among airlines.
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Panel formed to study applications for CIL restructuring

The Coal Ministry has formed a panel to examine the applications received for appointing consultants for the restructuring of Coal India.

The development comes on the heels of the government inviting bids for appointment of advisors to restructure the nation's largest coal producer.

"For examination/evaluation of the applications received in the Ministry in context of restructuring of Coal India (CIL), a committee has been constituted," an official memorandum said.

The six-member panel would be chaired by Advisor (Projects) in the Coal Ministry, it said. The committee, would "examine/evaluate the applications received in Ministry of Coal in context to re-structuring of Coal India Ltd, and to prepare a comparative statement for shortlisting the applications," and "any other issue as may be deemed necessary by the Committee", it added.

The Planning Commission and many high-level panels, including Expert Committee on Road Map for coal sector reforms - also known as T L Shankar Committee - have recommended the restructuring of CIL keeping in view the rapidly increasing demand of coal and the need for enhancing coal production and to make the coal sector competitive.

The Planning Commission has earlier suggested spinning off CIL subsidiaries into separate entities so that each one of them can pursue its own goals, amid growing supply deficit of coal.

World's largest coal miner CIL has seven subsidiaries such as Bharat Coking Coal Ltd (BCCL), Central Coalfields Ltd (CCL), and Eastern Coalfields Ltd (ECL) and Central Mine Planning and Design Institute Ltd. The coal producer has 3.71 lakh employees.

The Planning Commission has estimated that the coal import could go up to 185 million tonnes (MT) at the end of the 12th Plan based on total coal demand of 980 MT and domestic supply of 795 MT. Imports could further increase if the domestic production does not grow by 8 per cent as projected. India's coal output was 540 MT during 2011-12 against the demand of 640 MT.



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Overseas roadshows for NTPC's Rs 13,000-crore share sale

Government has started roadshows in five countries, including the US, the UK and Japan, for promoting the proposed Rs 13,000-crore stake sale in power producer NTPC .

"The roadshows are on in the US, the UK, Japan, Singapore and Hong Kong and one of the teams is expected back in a day or two," a top Power Ministry official told PTI.

Asked about the date of the offer, the official said that Department of Divestment will decide that. This was a proposal by the Department of Divestment, Ministry of Finance.

The government hopes to garner close to Rs 13,000 crore from this offer. It has set a target of raising Rs 30,000 crore in 2012-13 through stake sale in PSUs out of which it has already netted Rs 6,900 crore so far.

In November last year, the government approved 9.5 percent stake sale in NTPC. It currently holds 84.5 percent stake in the company, which would come down to 75 percent post the offer. NTPC will not raise any fresh equity through this offer.

Last week, the government returned three coal blocks to NTPC which were taken back due to delay in developmental work. This move is aimed at boosting the valuation of the company for the share sale.

The three coal blocks - Chatti-Bariatu, Kerandari and Chatti-Bariatu (South), all in Jharkhand - were forfeited in 2011. NTPC reported nearly 22 percent jump in its net profit at Rs 2,596.76 crore in the third quarter ended December, 2012 as against Rs 2,130.39 crore in the same period a year ago.

At present, NTPC has a generation capacity of 39,674 MW. Shares of the company today closed at Rs 157.75, down 0.97 percent on the BSE.



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Labour trouble brews in Jet Airways

As its promoters finalise a stake sale deal with Gulf carrier Etihad, labour unrest seems to be brewing in Jet Airways with its technicians (rpt) technicians wearing black bands to protest an alleged move to freeze salary hikes and the pilots deciding to meet on the same issue
shortly.

A section of Jet technicians started a 'symbolic' protest by wearing black bands last Friday to protest the "management's proposed move to freeze wage hike over the next 2-3 years", sources among the agitators said here.

  British Airways in talks with IndiGo for alliance: Source

"Though we have signed the salary contract, the final date of payment has not been committed by the management. We have called a meeting of pilots in Delhi on February one to discuss the issue," a source said, adding this would be followed up by one in Mumbai a few days later.

When contacted, a Jet Airways spokesperson said the airline "has always adopted a conciliatory open door policy with all its staff including its technicians.

"In addition, a management team is in constant dialogue and discussions with the technicians, in explaining to them the commercial and other challenges given the present economic state of the global aviation industry at large and the airline in particular. This is expected to address the issues under discussion, but would also help resolve all future issues through this mechanism."

The spokesperson said "as a socially conscious corporate, the airline is aware of all its obligations. Jet Airways has always made salary disbursals as per a pre-determined schedule of dates, which are internally communicated to the staff. Jet Airways has always met and will continue to honour all its obligations to its employees and external stakeholders alike."

However, the agitators said apart from the proposed salary hike freeze, there were several issues like non-payment of arrears which were being negotiated with the management. "But every time we have taken up these issues with the management, their only response has been that the company does not have the money to pay," the source said



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Reforms like FDI in retail welcome: Pascal Lamy, DTO

World Trade Organisation (WTO) Director General Pascal Lamy spoke with CNBC TV 18's Rituparna Bhuyan. Lamy had a word of praise for reforms like retail FDI and subsidy control measures undertaken by India. 

Pvt investors to pour in $1.1tn in emerging mkts this year

Pascal Lamy said, "These reforms, I can tell you have not gone unnoticed. The signal is that foreign direct investment (FDI) for instance whether in retail, banking or in insurance is more welcome than before which is good news for Indian economy."

He added, "This sort of reform, short-term is always a bit painful because some like it others don't like it. However, I believe seeing from where I am that it is a very important investment in the future."



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TDSAT reserves order on Vodafone plea on spectrum fee

Telecom tribunal TDSAT today reserved its order over the plea of Vodafone seeking interim relief against the levy of one time spectrum fee by the government.

A single member bench of P K Rastogi is expected to pass its interim order tomorrow. The tribunal reserved the order after hearing the submissions of the Department of Telecom and Vodafone on the issue.

Additional Solicitor General A S Chaindok represented DoT, while Senior Advocate Abhishek Manu Singhvi was from the Vodafone side. On January 21, the Telecom Disputes Settlement and Appellate Tribunal had issued notice to DoT asking it to file the reply within four weeks over the main petition of Vodafone.

The tribunal had also given three weeks time to Vodafone to file rejoinder over DoT's reply. Vodafone is opposing DoT's move to levy one time charge on spectrum allocated to it beyond the initial allocation of 4.4 Mhz that was issued to it along with licence. The government had asked Vodafone to pay Rs 3,599 crore and its first instalment of around Rs 2,093 crore, was to be paid by today.



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Expect Etihad to increase stake, delist Jet Airways: CAPA

Written By Unknown on Minggu, 27 Januari 2013 | 23.25

Kapil Kaul, CEO-South Asia, Centre for Asia Pacific Aviation (CAPA) estimates, on CNBC-TV18, that Etihad may increase its stake to 49 percent in Jet Airways and delist the airline to avoid following the mandated procedures involved in a company listed on the stock exchange.

Also Read: Etihad may value Jet Airways stake at $1.25bn; stock up 3%

SpiceJet is not desperate to sell stakes immediately: CEO

Below is the edited transcript of  Kapil Kaul's analysis  on CNBC-TV18

Q: Do you believe the Etihad deal will strategically benefit Jet Airways and could be the first deal in India where we see a foreign carrier boards an Indian carrier?

A: The deal looks certain. We expect a formal announcement to be made in the next week or 10 days. Most of the issues have been sorted out. There are some formalities which need to be concluded. So, this could be the first deal of this kind.

Incidentally, Jet Airways was the beneficiary of the foreign direct investment (FDI) in '90s is again the first beneficiary of FDI. It is quite a strategic deal and one must not see it only from the perspective of Jet-Etihad. It will structurally bring in a lot of changes across the entire sector.

One has to wait and watch what will be the final contours of the deal will be. I would really want to see that within the near-term Etihad increases its stake to 49 percent. I see Jet Airways being delisted when Etihad reaches 49 percent. But the contours of the deal and the structure that's been agreed make it a very important deal not only for Jet Airways, but for the entire sector.

Q: What makes you say that this will ultimately culminate to the point where Jet Airways will actually be de-listed from the Indian stock markets?

A: I don't expect Etihad to continue holding a 49-percent stake in a company that is listed. But one has to wait and watch. Etihad would not like to go through the kind of disclosures and other processes mandated for a listed company. So, I would think that the chances of de-listing exist.

Q: Strategically, how will Jet benefit from shifting its international hub from Brussels currently to Abu Dhabi to avail of  the lower ATF prices and a joint go-to market strategy as far as the internationalisation of routes is concerned?

A: I would be surprised if they shift their Brussels hub. I don't expect that to happen in the first phase. That will actually mean that the entire network strategy would have to completely change and I don't see that happening at all in the first phase, may be in the second phase.

You could expect them to move out of Brussels and look at some other European point which might add value to their US and onward European network, but we don't see them shifting to Abu Dhabi.



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Ceat forms JV with Bangladesh co; to invest USD 67 million

RPG Group's tyre-making arm Ceat today announced formation of a joint venture company with the Bangladesh-based AK Khan & Company to set up a manufacturing facility in the neighbouring country.

The facility, which will come up at the investment of USD 67 million, is expected to be functional by December 2014, Ceat said in a statement. The 110-tonne per day facility will roll out tyres for trucks, LCVs and 2/3 wheelers for the Bangladeshi market.

Also Read: Apollo Tyres opens global R&D centre at Netherlands

The joint venture, in which Ceat will hold 70 percent stake, is a part of the long-term strategy for both the partners to have a presence in the growing tyre market in Bangladesh, the release said.

"This strategic partnership will enable us establish a leadership presence in the large tyre market of Bangladesh," Ceat Managing Director Anant Goenka said. Under the agreement, Ceat will provide technical and business expertise and manage the JV operations, while AK Khan will bring in knowledge of Bangladesh market besides providing the strength of "goodwill and local presence".

"The plant will earn valuable foreign exchange for the country by exporting approximately 20 percent of its output to the region and rest of the world," AK Khan Managing Director Salahuddin Kasem Khan said.



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Zurich wants Google Switzerland to pay more tax: Report

Tax authorities in Zurich are demanding that Google pay more tax, a Swiss newspaper reported on Friday, citing undisclosed sources with knowledge of the matter.

A decision by Zurich to open talks with Google may indicate that Switzerland intends to take a tougher stance on multinational companies which have minimised their tax bills by chanelling revenues through low-tax jurisdictions.

Zurich, where Google runs its largest office outside of the US, gets "virtually no" corporate tax from the Internet search giant, and is negotiating a higher tax level, according to Friday's edition of Tages-Anzeiger.

Google could not be reached for comment. Tax authorities in Zurich said they could not comment on individual companies.

Firms like Google, Starbucks and Vodafone are being steadily targeted by governments scrambling to mend holes in their budgets caused by the financial crisis.

Switzerland is also coming under pressure from the European Union (EU) to ensure multinational companies are paying an appropriate rate of tax.

The Alpine state, which is not part of the EU, has been criticised by Brussels for allowing cantons, or states, to give favourable tax rates to multinational firms providing they meet certain local criteria such as job creation.

Zurich's reported talks with Google follow an agreement by Brazil's Vale SA, the world's second largest miner by market value, to pay 212 million Swiss francs to the Swiss federal government, and 663 million reais to Brazil's Minas Gerais state, to settle tax cases dating back to 2006.

Switzerland has previously refuted the EU claim that its cantonal tax system amounts to unauthorised state aid.

Zurich tax authority director Bruno Faessler told Reuters that while different Swiss cantons were free to set the rates of corporate tax they applied, he denied they are negotiated with companies.

"Companies are taxed on their net profits and their capital if their head office is in Zurich," he said.

"If not, profits of their branches and their properties in the city of Zurich are subject of taxation."

On Thursday, France said it will seek payment of back taxes from big Internet companies who have used legal loopholes to reduce their tax bills.

French authorities are currently conducting a tax probe of Google and retail search engine Amazon


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Air India trashes report ranking its safety amongst worst

National carrier Air India today termed as 'questionable' a report released by a German aviation think-tank ranking it as the third worst airline among 60 global carriers in terms of safety.

"The ratings arrived at by the Jet Airliner Crash Data Evaluation Centre (JACDEC) is questionable considering that airlines like American Airlines, Aeroflot, US Airways etc which have a worse track record of hull-losses as well as fatalities, are rated safer than Air India," the state-run airline said in a statement.

Also Read: Financial, aviation sectors to get astro support

Air India has been rated the world's third least safe airline among 60 global carriers after China Airlines and TAM Airlines by Hamburg-based JACDEC that monitors plane crashes around the world. The annual safety ranking "is strongly refuted", the statement said, adding the data utilised by the agency for arriving at the rankings "is factually incorrect".

"The agency has quoted three hull-losses against Air India in the last 30 years. However, Air India has had only one crash on June 1985, resulting in hull loss and 329 deaths. This crash was a result of terrorist action rather than poor safety," the airline said.

Other than this crash, Air India has had an excellent safety track record during the period considered by JACDEC, it added. Air India is the first airline in the country and among the first 10 in the world to have the IOSA (IATA Operational Safety Audit) certification which is a benchmark for aviation safety norms, the airline noted.

The airline's engineering department is FAA and EASA- certified and one of the strengths of Air India is its adherence to all safety norms and procedures, the statement said adding the domestic aviation regulator, DGCA, maintains a strict surveillance besides monitoring of all operators in India.



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Crisil downgrades Bharti Airtel credit ratings

Rating agency Crisil has downgraded telecom major Bharti Airtel's rating after the government imposed a one-time fee for spectrum it holds beyond a threshold. "CRISIL has downgraded its ratings on Bharti Airtel long-term debt programmes and bank facilities to 'CRISIL AA+/Stable' from 'CRISIL AAA/Negative'. The rating on the company's shortterm debt and bank facilities has been reaffirmed at 'CRISIL A1+'," the agency said its ratingstatement on Thursday.

The agency is of the view that Bharti Airtel's gearing will not improve significantly as on March 31, 2013, despite an equity infusion through an initial public offer (IPO) in its subsidiary, Bharti Infratel. "Furthermore, potential cash outflows towards one-time spectrum fees and licence renewal fees are likely to result in its capital structure taking longer to improve than CRISIL's previous expectations," CRISIL said.

The government has imposed Rs 5,201 crore one-time spectrum fee on Bharti Airtel for spectrum that the company was allocated apart from the airwaves that it received bundled with licence. The agency,however, said that Airtel's operating performance in India is expected to improve on the back of its strong market position, healthy operating efficiencies, and expectation of reduced competition.

The agency said that despite intense competition, Bharti Airtel's Indian operations witnessed a moderate growth of 7.6 per cent in its subscriber base to 185.9 million as on September 30, 2012, from 173 million as on September 30, 2011. "The company reported a strong operating margin of around 32.2 per cent in the first half of 2012-13.

Its average realised revenue per minute has remained stable at about Re
0.44," CRISIL said. The agency said that debt levels on the company remained higher than CRISIL expectations at Rs 70,500 crore as on September 30, 2012, as against Rs 69,000 crore as on March 31, 2012. For Bharti Airtel's Africa business, CRISIL said it expects the bsuiness to gradually improve its operating efficiency driven by steady improvement in the utilisation of network



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Hero Moto yet to break deadlock with workers

Hero MotoCorp , world's largest two-wheeler maker continues to have labour trouble as wage negotiations between the management and the workers failed to break the deadlock. After the union members meeting on Tuesday, some of the workers of the Dharuhera plant also decided to 'go slow' on production starting from Wednesday.

The move delayed the company's production starting Thursday. The marathon talks between the management and the Gurgaon union to break the impasse over wage settlement doesn't seem to end. After the meeting on Friday, the two sides still seem to be locked in negotiations to reach a common ground on the final terms of the settlement.

Workers are demanding an adequate compensation as productivity has gone higher since 2009. The management meanwhile chose to remain tight-lipped on the meeting but maintained they were hopeful of a resolution soon.


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Air India trashes report ranking its safety amongst worst

Written By Unknown on Sabtu, 26 Januari 2013 | 23.25

National carrier Air India today termed as 'questionable' a report released by a German aviation think-tank ranking it as the third worst airline among 60 global carriers in terms of safety.

"The ratings arrived at by the Jet Airliner Crash Data Evaluation Centre (JACDEC) is questionable considering that airlines like American Airlines, Aeroflot, US Airways etc which have a worse track record of hull-losses as well as fatalities, are rated safer than Air India," the state-run airline said in a statement.

Also Read: Financial, aviation sectors to get astro support

Air India has been rated the world's third least safe airline among 60 global carriers after China Airlines and TAM Airlines by Hamburg-based JACDEC that monitors plane crashes around the world. The annual safety ranking "is strongly refuted", the statement said, adding the data utilised by the agency for arriving at the rankings "is factually incorrect".

"The agency has quoted three hull-losses against Air India in the last 30 years. However, Air India has had only one crash on June 1985, resulting in hull loss and 329 deaths. This crash was a result of terrorist action rather than poor safety," the airline said.

Other than this crash, Air India has had an excellent safety track record during the period considered by JACDEC, it added. Air India is the first airline in the country and among the first 10 in the world to have the IOSA (IATA Operational Safety Audit) certification which is a benchmark for aviation safety norms, the airline noted.

The airline's engineering department is FAA and EASA- certified and one of the strengths of Air India is its adherence to all safety norms and procedures, the statement said adding the domestic aviation regulator, DGCA, maintains a strict surveillance besides monitoring of all operators in India.



23.25 | 0 komentar | Read More

Zurich wants Google Switzerland to pay more tax: Report

Tax authorities in Zurich are demanding that Google pay more tax, a Swiss newspaper reported on Friday, citing undisclosed sources with knowledge of the matter.

A decision by Zurich to open talks with Google may indicate that Switzerland intends to take a tougher stance on multinational companies which have minimised their tax bills by chanelling revenues through low-tax jurisdictions.

Zurich, where Google runs its largest office outside of the US, gets "virtually no" corporate tax from the Internet search giant, and is negotiating a higher tax level, according to Friday's edition of Tages-Anzeiger.

Google could not be reached for comment. Tax authorities in Zurich said they could not comment on individual companies.

Firms like Google, Starbucks and Vodafone are being steadily targeted by governments scrambling to mend holes in their budgets caused by the financial crisis.

Switzerland is also coming under pressure from the European Union (EU) to ensure multinational companies are paying an appropriate rate of tax.

The Alpine state, which is not part of the EU, has been criticised by Brussels for allowing cantons, or states, to give favourable tax rates to multinational firms providing they meet certain local criteria such as job creation.

Zurich's reported talks with Google follow an agreement by Brazil's Vale SA, the world's second largest miner by market value, to pay 212 million Swiss francs to the Swiss federal government, and 663 million reais to Brazil's Minas Gerais state, to settle tax cases dating back to 2006.

Switzerland has previously refuted the EU claim that its cantonal tax system amounts to unauthorised state aid.

Zurich tax authority director Bruno Faessler told Reuters that while different Swiss cantons were free to set the rates of corporate tax they applied, he denied they are negotiated with companies.

"Companies are taxed on their net profits and their capital if their head office is in Zurich," he said.

"If not, profits of their branches and their properties in the city of Zurich are subject of taxation."

On Thursday, France said it will seek payment of back taxes from big Internet companies who have used legal loopholes to reduce their tax bills.

French authorities are currently conducting a tax probe of Google and retail search engine Amazon


23.25 | 0 komentar | Read More

Crisil downgrades Bharti Airtel credit ratings

Rating agency Crisil has downgraded telecom major Bharti Airtel's rating after the government imposed a one-time fee for spectrum it holds beyond a threshold. "CRISIL has downgraded its ratings on Bharti Airtel long-term debt programmes and bank facilities to 'CRISIL AA+/Stable' from 'CRISIL AAA/Negative'. The rating on the company's shortterm debt and bank facilities has been reaffirmed at 'CRISIL A1+'," the agency said its ratingstatement on Thursday.

The agency is of the view that Bharti Airtel's gearing will not improve significantly as on March 31, 2013, despite an equity infusion through an initial public offer (IPO) in its subsidiary, Bharti Infratel. "Furthermore, potential cash outflows towards one-time spectrum fees and licence renewal fees are likely to result in its capital structure taking longer to improve than CRISIL's previous expectations," CRISIL said.

The government has imposed Rs 5,201 crore one-time spectrum fee on Bharti Airtel for spectrum that the company was allocated apart from the airwaves that it received bundled with licence. The agency,however, said that Airtel's operating performance in India is expected to improve on the back of its strong market position, healthy operating efficiencies, and expectation of reduced competition.

The agency said that despite intense competition, Bharti Airtel's Indian operations witnessed a moderate growth of 7.6 per cent in its subscriber base to 185.9 million as on September 30, 2012, from 173 million as on September 30, 2011. "The company reported a strong operating margin of around 32.2 per cent in the first half of 2012-13.

Its average realised revenue per minute has remained stable at about Re
0.44," CRISIL said. The agency said that debt levels on the company remained higher than CRISIL expectations at Rs 70,500 crore as on September 30, 2012, as against Rs 69,000 crore as on March 31, 2012. For Bharti Airtel's Africa business, CRISIL said it expects the bsuiness to gradually improve its operating efficiency driven by steady improvement in the utilisation of network



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Ceat forms JV with Bangladesh co; to invest USD 67 million

RPG Group's tyre-making arm Ceat today announced formation of a joint venture company with the Bangladesh-based AK Khan & Company to set up a manufacturing facility in the neighbouring country.

The facility, which will come up at the investment of USD 67 million, is expected to be functional by December 2014, Ceat said in a statement. The 110-tonne per day facility will roll out tyres for trucks, LCVs and 2/3 wheelers for the Bangladeshi market.

Also Read: Apollo Tyres opens global R&D centre at Netherlands

The joint venture, in which Ceat will hold 70 percent stake, is a part of the long-term strategy for both the partners to have a presence in the growing tyre market in Bangladesh, the release said.

"This strategic partnership will enable us establish a leadership presence in the large tyre market of Bangladesh," Ceat Managing Director Anant Goenka said. Under the agreement, Ceat will provide technical and business expertise and manage the JV operations, while AK Khan will bring in knowledge of Bangladesh market besides providing the strength of "goodwill and local presence".

"The plant will earn valuable foreign exchange for the country by exporting approximately 20 percent of its output to the region and rest of the world," AK Khan Managing Director Salahuddin Kasem Khan said.



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Expect Etihad to increase stake, delist Jet Airways: CAPA

Kapil Kaul, CEO-South Asia, Centre for Asia Pacific Aviation (CAPA) estimates, on CNBC-TV18, that Etihad may increase its stake to 49 percent in Jet Airways and delist the airline to avoid following the mandated procedures involved in a company listed on the stock exchange.

Also Read: Etihad may value Jet Airways stake at $1.25bn; stock up 3%

SpiceJet is not desperate to sell stakes immediately: CEO

Below is the edited transcript of  Kapil Kaul's analysis  on CNBC-TV18

Q: Do you believe the Etihad deal will strategically benefit Jet Airways and could be the first deal in India where we see a foreign carrier boards an Indian carrier?

A: The deal looks certain. We expect a formal announcement to be made in the next week or 10 days. Most of the issues have been sorted out. There are some formalities which need to be concluded. So, this could be the first deal of this kind.

Incidentally, Jet Airways was the beneficiary of the foreign direct investment (FDI) in '90s is again the first beneficiary of FDI. It is quite a strategic deal and one must not see it only from the perspective of Jet-Etihad. It will structurally bring in a lot of changes across the entire sector.

One has to wait and watch what will be the final contours of the deal will be. I would really want to see that within the near-term Etihad increases its stake to 49 percent. I see Jet Airways being delisted when Etihad reaches 49 percent. But the contours of the deal and the structure that's been agreed make it a very important deal not only for Jet Airways, but for the entire sector.

Q: What makes you say that this will ultimately culminate to the point where Jet Airways will actually be de-listed from the Indian stock markets?

A: I don't expect Etihad to continue holding a 49-percent stake in a company that is listed. But one has to wait and watch. Etihad would not like to go through the kind of disclosures and other processes mandated for a listed company. So, I would think that the chances of de-listing exist.

Q: Strategically, how will Jet benefit from shifting its international hub from Brussels currently to Abu Dhabi to avail of  the lower ATF prices and a joint go-to market strategy as far as the internationalisation of routes is concerned?

A: I would be surprised if they shift their Brussels hub. I don't expect that to happen in the first phase. That will actually mean that the entire network strategy would have to completely change and I don't see that happening at all in the first phase, may be in the second phase.

You could expect them to move out of Brussels and look at some other European point which might add value to their US and onward European network, but we don't see them shifting to Abu Dhabi.



23.25 | 0 komentar | Read More

Hero Moto yet to break deadlock with workers

Hero MotoCorp , world's largest two-wheeler maker continues to have labour trouble as wage negotiations between the management and the workers failed to break the deadlock. After the union members meeting on Tuesday, some of the workers of the Dharuhera plant also decided to 'go slow' on production starting from Wednesday.

The move delayed the company's production starting Thursday. The marathon talks between the management and the Gurgaon union to break the impasse over wage settlement doesn't seem to end. After the meeting on Friday, the two sides still seem to be locked in negotiations to reach a common ground on the final terms of the settlement.

Workers are demanding an adequate compensation as productivity has gone higher since 2009. The management meanwhile chose to remain tight-lipped on the meeting but maintained they were hopeful of a resolution soon.


23.25 | 0 komentar | Read More

Crisil downgrades Bharti Airtel credit ratings

Written By Unknown on Jumat, 25 Januari 2013 | 23.25

Rating agency Crisil has downgraded telecom major Bharti Airtel's rating after the government imposed a one-time fee for spectrum it holds beyond a threshold. "CRISIL has downgraded its ratings on Bharti Airtel long-term debt programmes and bank facilities to 'CRISIL AA+/Stable' from 'CRISIL AAA/Negative'. The rating on the company's shortterm debt and bank facilities has been reaffirmed at 'CRISIL A1+'," the agency said its ratingstatement on Thursday.

The agency is of the view that Bharti Airtel's gearing will not improve significantly as on March 31, 2013, despite an equity infusion through an initial public offer (IPO) in its subsidiary, Bharti Infratel. "Furthermore, potential cash outflows towards one-time spectrum fees and licence renewal fees are likely to result in its capital structure taking longer to improve than CRISIL's previous expectations," CRISIL said.

The government has imposed Rs 5,201 crore one-time spectrum fee on Bharti Airtel for spectrum that the company was allocated apart from the airwaves that it received bundled with licence. The agency,however, said that Airtel's operating performance in India is expected to improve on the back of its strong market position, healthy operating efficiencies, and expectation of reduced competition.

The agency said that despite intense competition, Bharti Airtel's Indian operations witnessed a moderate growth of 7.6 per cent in its subscriber base to 185.9 million as on September 30, 2012, from 173 million as on September 30, 2011. "The company reported a strong operating margin of around 32.2 per cent in the first half of 2012-13.

Its average realised revenue per minute has remained stable at about Re
0.44," CRISIL said. The agency said that debt levels on the company remained higher than CRISIL expectations at Rs 70,500 crore as on September 30, 2012, as against Rs 69,000 crore as on March 31, 2012. For Bharti Airtel's Africa business, CRISIL said it expects the bsuiness to gradually improve its operating efficiency driven by steady improvement in the utilisation of network



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NTPC's $2 billion share sale likely on February 7: Sources

The government's share sale in state-run power producer NTPC to raise roughly USD 2 billion is likely to take place on February 7, three sources with direct knowledge of the situation said on Friday.

The government, which owns 84.5 percent of NTPC, plans to sell a 9.5 percent stake in the company to institutional investors through an auction of shares.

The floor prices for the auction is likely to be announced a day ahead of the sale, said the sources, who declined to be named as they were not authorised to speak to the media.

Officials at the Department of Disinvestment, responsible for handling state stake sales, could not immediately be reached for a comment.



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Budget 2013-14: Steps be taken to widen tax base, says India Ratings' Pant

By Devendra Kumar Pant
Chief Economist, India Ratings

The FY14 budget will be presented in the backdrop of the most uncertain global economic situation in recent times. Global growth has remained fragile and likely to remain so during most of 2013-14. 

The fiscal cliff resolution in the US will have repercussions for the global economy. The Euro zone is expected to be stagnant next fiscal, other advanced economies are also likely to follow similar growth trends.

While, developing economies are expected to grow in FY14, their growth is likely to be lower than their peak growth performances of recent times. Global growth has significant impact on India's growth in general and manufacturing sectors in particular.

India is facing fiscal cliff of its own and India Ratings expects central government's fiscal deficit in FY13 to touch 5.8% of GDP (FY13 budget estimate: 5.1% and government's recent estimates of 5.3%). There is an urgent need to move back to the path of fiscal consolidation. While government acknowledges it, some difficult steps have to be taken to move back to fiscal consolidation path. Problem has to be solved both from revenue and expenditure side.

To increase revenue, steps should be taken to broaden tax base, mere increasing of tax rate will not solve the problem. Hiking tax rates will reduce compliance and give incentive to tax evasion. A low and stable tax regime is a necessary condition for improving the investment climate.

Inability to settle issues related to compensation for central sales tax (CST) is a major stumbling block for implementation of goods and services tax (GST), we expect budget to move towards agreement on CST and finally to implementation of GST. Twin deficit (fiscal and current account) is exerting pressure on growth of Indian economy.

Significant fiscal consolidation was achieved during FY04-FY08, which was revenue driven on the back of high economic growth. We expect budget to make the environment conducive to economic growth by improving investor's sentiments and capital inflows. While the direct investments are preferred mode of capital inflows, the portfolio inflow will have significant impact on exchange rate of Rupee.

India is a net commodity importer, exchange of rupee has a direct bearing on subsidy burden. While the dollar price of commodities is exogenous to India, strength of Rupee will provide comfort to subsidy payment.

On the expenditure front, subsidies should be targeted. A detailed roadmap to control fuel subsidy is the need of the hour. Middle and upper income sections of the society are major beneficiaries of fuel subsidy. While the best way to tackle fuel subsidy especially diesel subsidy would be to raise retail prices of diesel to eliminate subsidy.

The government could settle for second best alternative of increasing taxes on diesel vehicles, especially high end passenger cars. Government could go for a combination of gradual monthly increase in retail price and increase in taxes on diesel vehicles. The subsidy to poor section of the society should not be curtailed. Physical infrastructure — roads and power — has to improve. Road completion targets are missed repeatedly and coal issues is affecting power generation. Power deficit is associated with economic losses.

A government estimate in FY05 pegged economic losses due to power shortages at INR3,000bn. Improvement in physical infrastructure should be one focus point of budget. India has very poor record of human development and missed Millennium Development Goals.

Skill shortage is another inhibiting factor for adoption of modern technology and sustainable growth. While over the years government with the support of the World Bank is implementing Sarva Shiksha Abhiyan, which is yielding results, the higher education sector is in dire need of attention.

The private sector participation in education is limited due to not-for-profit status of sector. The budget should focus on this developmental aspect. Foreign university bill is pending with the parliament since last two years. Unless skills of population are not improved, we will not be able to reap the benefits of demographic dividend.

Movement of Indian economy to a high growth phase during FY04-FY08 was due to structural improvements — high savings and investment rate. Incrementally public sector contributed to a sizeable proportion of it. Since FY09, the savings rate started falling due to expansionary fiscal policies (higher deficit) and higher inflation also had an impact of household savings.

The budget should address this and adopt policies conducive to increasing the savings rate.



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Fiat eyes sale of 25,000 units; 1% market-share this year

Italian carmaker Fiat said on Friday that it plans to more-than double its market-share above the 1-percent mark, as well as sell over 25,000 units this year, by ramping up its distribution network and launching new models.

"We sold slightly more than 10,000 (in 2012), but it was a year of transition. In some regions, we were not present at all. We wish to have 1 percent of the market which is estimated to touch 2.6 million units this year. Our objective is to sell 25,000 units," Fiat India managing director Enrico Atanasio told PTI.

Citing Fiat's market-share across various regions it operates in like Latin America (18 percent), Europe (close to 10 percent), North America (15 percent, including Chrysler), Atanasio said, "Can I be at 1 percent? I would be the lowest in the world. You cannot be the lowest in a market which today is the seventh largest in terms of size worldwide."

He said the company which called off its sales and marketing partnership with Tata Motors in 2012, will launch two luxury SUV models 'Wrangler' and 'Grand Cherokee' in the domestic market this year under the Jeep brand, besides a premium hatchback 'Abath', towards the end of the year.

The Jeep brand will be fully imported, while the 'Abath' will be manufactured locally at the Ranjangaon plant near Pune, Atanasio said. Speaking on the sidelines of the launch of the first exclusive dealership in Mumbai, he said that the next few weeks will see a massive wave of inaugurations to take the total number of dealerships to 65 by March-end and 100 by the end of the year.

Explaining the reason for calling off the alliance with the Tatas, Atanasio said that though the partnership was a good one, there was a need to take the brand to the next level. He also pointed out the benefits Fiat derived through its erstwhile partner and said that at least 30 of its dealerships are from Tata Motors, where the dealers expanded to include a Fiat showroom as well.

Asked about the impact of the recent policy movements on the diesel front, which is the Fiat's portfolio's major focus, Atanasio said that diesel was "unstoppable" given its benefits. "A few customers will move to petrol, but it is not a concern, since diesel would still comprise more than 50 percent of new sales," he said.

"The Pune plant has an installed capacity for 1,30,000 units per year which can be expanded to 2,00,000 units," he said, adding the Tatas also plan to use the facility as an export hub. In 2012, Fiat exported a "few hundred units" to South Africa, Nepal and Sri Lanka from the plant, he said, stressing that going forward, it would focus on meeting domestic demand.

The company also has plans to launch its own entry-level SUV by 2015, he said, without giving any details.



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AI trashes report that ranks its safety amongst worst

National carrier Air India today termed as 'questionable' a report released by a German aviation think-tank ranking it as the third worst airline among 60 global carriers in terms of safety.

"The ratings arrived at by the Jet Airliner Crash Data Evaluation Centre (JACDEC) is questionable considering that airlines like American Airlines, Aeroflot, US Airways etc which have a worse track record of hull-losses as well as fatalities, are rated safer than Air India," the state-run airline said in a statement.

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Air India has been rated the world's third least safe airline among 60 global carriers after China Airlines and TAM Airlines by Hamburg-based JACDEC that monitors plane crashes around the world. The annual safety ranking "is strongly refuted", the statement said, adding the data utilised by the agency for arriving at the rankings "is factually incorrect".

"The agency has quoted three hull-losses against Air India in the last 30 years. However, Air India has had only one crash on June 1985, resulting in hull loss and 329 deaths. This crash was a result of terrorist action rather than poor safety," the airline said.

Other than this crash, Air India has had an excellent safety track record during the period considered by JACDEC, it added. Air India is the first airline in the country and among the first 10 in the world to have the IOSA (IATA Operational Safety Audit) certification which is a benchmark for aviation safety norms, the airline noted.

The airline's engineering department is FAA and EASA- certified and one of the strengths of Air India is its adherence to all safety norms and procedures, the statement said adding the domestic aviation regulator, DGCA, maintains a strict surveillance besides monitoring of all operators in India.



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Ceat forms JV with Bangladesh co; to invest USD 67 million

RPG Group's tyre-making arm Ceat today announced formation of a joint venture company with the Bangladesh-based AK Khan & Company to set up a manufacturing facility in the neighbouring country.

The facility, which will come up at the investment of USD 67 million, is expected to be functional by December 2014, Ceat said in a statement. The 110-tonne per day facility will roll out tyres for trucks, LCVs and 2/3 wheelers for the Bangladeshi market.

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The joint venture, in which Ceat will hold 70 percent stake, is a part of the long-term strategy for both the partners to have a presence in the growing tyre market in Bangladesh, the release said.

"This strategic partnership will enable us establish a leadership presence in the large tyre market of Bangladesh," Ceat Managing Director Anant Goenka said. Under the agreement, Ceat will provide technical and business expertise and manage the JV operations, while AK Khan will bring in knowledge of Bangladesh market besides providing the strength of "goodwill and local presence".

"The plant will earn valuable foreign exchange for the country by exporting approximately 20 percent of its output to the region and rest of the world," AK Khan Managing Director Salahuddin Kasem Khan said.



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DGCA to look into tariff structure of Indian carriers

Written By Unknown on Kamis, 24 Januari 2013 | 23.25

DGCA would look into the tariff structure of Indian airlines in view of the wide range of the base prices of air tickets, after the Supreme Court observed that the price bands were too wide and directed it to examine the matter.

Efforts would be made to compress these price bands, which range from 12 to as high as 22 set by different airlines on each sector, and make air fares more transparent so that the travelling public are clear about the cost of travel, official sources said here.

While there was a need to make the price bands more transparent, there should also be some rationale behind the huge differences between the highest and the lowest air fares in these price bands, they said.

Justifying the higher price bands, airline industry sources said that they have to take into account, apart from the actual costs of air travel, the variable costs on inputs like jet fuel, whose prices continue to rise, and staff costs.

While the Airlines Passengers Association of India (APAI) has welcomed the apex court's directions, some aviation experts have also objected to the inclusion of congestion charges or extra charges of Rs 50 for giving a printout of the ticket.

"When most airlines are showing high on-time performance, then why should they charge congestion charges," asked Debashish Saha of the Aeronautical Society of India. Giving an example, he said there used to be severe congestion earlier at the IGI Airport with planes hovering for 30 minutes before being cleared to land.

"Now it has three operational runways and there are generally no delays, barring the foggy days. Then what is the justification for the congestion charge," he asked. Regarding the price for a ticket printout, Saha said under the Carriage by Air Act, it is the contractual obligation of an airline to provide a ticket to the passenger. "Why should an extra fee be levied?"



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Wal-Mart studying India's investment conditions

US retailer Wal-Mart Stores Inc is studying the conditions attached to India's decision to open its supermarket sector to foreign investors before finalizing a decision to invest, a government statement said on Thursday.

India threw its doors open to foreign supermarket chains last year in the teeth of fierce domestic opposition, but attached strict conditions, including on sourcing, in the policy.

The CEO of Wal-Mart International, Doug McMillon, told Trade Minister Anand Sharma at a meeting in Davos that the firm was "excited about India" but studying the conditions before making an investment announcement, the statement said.

Sharma said the firm should not be "unduly concerned" about the prospect of a policy reversal.



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EGoM discusses removing curbs on No of spectrum bids

The Empowered Group of Ministers on Telecom today discussed the number of slots operators should be allowed to bid for in the upcoming spectrum auction.

Sources said the Department of Telecommunications (DoT) has proposed removing restriction on the number of slots that a company should be allowed to bid in the auction for both CDMA and GSM spectrum.

The DoT is of the view that auction would witness aggressive bidding if restrictions on the number slot is removed.

"EGoM discussed the number of slots that CDMA and GSM players should be allowed to bid for. However, no decision could be finalised," a source said.

"Companies whose licences are coming up for renewal will be any way like new players," the source said, adding that there were no demand for spectrum in 1800 Mhz (GSM) and 800 Mhz (CDMA) in the November auction and therefore removal of restriction is the proposal.

"Only procedural matters were discussed," Telecom Minister Kapil Sibal told reporters after the EGoM meeting.

In the last auction held in November, new operators were mandatorily bid for a minimum of 4 blocks of 1.25 MHz each and a maximum of five for GSM spectrum. It was a minimum of two and a maximum of three in case of CDMA airwaves.

The source said that most of the discussions in the EGoM were around court case related to auction, Supreme Court direction and DoT's preparation for it.

Decision about the fees that is to paid to auctioneer, Times Internet with E-Procurement was approved by the EGoM in its last meeting, sources added.



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CCI gives its consent to Kotak-Barclay deal

Fair trade regulator CCI has approved Kotak Mahindra Bank's proposal to acquire Barclays Bank's unsecured loan business in India, saying the deal would not have any adverse impact on competition.

The proposed transaction involves Kotak's acquisition of business instalment loans portfolio of Barclays India and Barclays Investments and Loans (India) Ltd.

Business instalment loans are provided by Barclays to individuals, sole proprietorships, partnership firms and companies for business needs or working capital requirements.

In its order dated January 22, Competition Commission of India (CCI) noted that "the proposed combination is not likely to have an appreciable adverse effect on competition in India

The regulator observed that the size of the business instalment loans portfolio of Barclays in India "is relatively insignificant".

"There are also other players in the Indian banking and financial services sector providing similar loans," CCI said.

"In view of the foregoing, it is observed that the proposed combination is not likely to give rise to any adverse competition concern in India," it added.

Barclays and Kotak had reached an agreement on the proposed deal in December, last year. Following this the entities had approached CCI for approval on January 2, 2013.



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Consumers should be offered lowest mobile call rates: Sibal

A day after mobile charges were hiked by leading operators, Telecom Minister Kapil Sibal today said consumers should be offered the lowest call rates.

"We want consumers to be offered calls at lowest rates," Sibal told PTI.

Bharti Airtel , India's largest mobile phone operator, and Idea Cellular have raised call charges mostly by way of a reduction in free minutes or air-time available on most plans.

Others like Vodafone are likely to follow suit soon.

Another mobile services provider Uninor, however, said it has no plans as of now to increase call rates.

"As a young operator focused on the mass market through basic services on a pre-paid only platform, Uninor has made a commitment to remaining 'Sabse Sasta' for its customers. This has been our position so far and will continue to be so in all the circles we operate in," Uninor said in a statement.

Meanwhile, government sources said the Centre is likely to approach sectoral regulator Trai regarding yesterday's hike in call rates.

"We will nudge Trai to do something," a source said.

 Meanwhile, Trai Chairman Rahul Khullar said, "Forbearance does not mean that we have closed our eyes. Forbearance reposes faith on operators and we realise there is competition in the market."

The Telecom Regulatory Authority of India (Trai) had decided to continue with forbearance in tariff regime that gives freedom to decide on call and other services rates.

Indian mobile phone industry, known for the lowest telecom services rates, is witnessing a hike in call rates now.

The hike in call charges come as companies face thousands of crore in one-time surcharge on airwaves they hold beyond a threshhold.



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Slowdown at Hero's Gurgaon plant continues for second day

Workers at two-wheeler major Hero MotoCorp's Gurgaon plant continued to slow down output for the second consecutive day Thursday demanding a wage hike, resulting in an estimated total production loss of around 1,000 scooters.

"We noticed some deliberate tampering of the settings of production equipment by workers at our Gurgaon plant Thursday as well, which has marginally compromised the day's output," a Hero MotoCorp (HMC) spokesperson said.

The spokesperson, however, declined to share the quantum of production loss.

There has been no impact on production at the company's Dharuhera plant, he added.

"We are confident of making up any marginal shortfall in production even as we remain committed to engaging in talks with the union to reach at an amicable solution," he said.

According to sources, the workers have resorted to slowdown of one production line, which produces scooters.

"The slowdown has impacted scooter output. The plant usually rolls out 2,500 units of scooters every day. However, due to the slowdown, there has been a total loss of around 1,000 units in the last two days," a source said.

HMC has three production lines at the plant and rolls out around 7,000 two-wheelers every day.

The management and the workers will meet again for fresh rounds of talks tomorrow in the presence of Haryana Deputy Labour Commissioner (DLC) to break a five-month long deadlock over wage settlement.

"They are resorting to labour action even while the conciliation proceedings are going on with the labour department...This kind of immature and irresponsible activity by the union does not really reflect well on the conducive atmosphere in which we have been striving to reach at a reasonable, sustainable and sensible settlement in a patient manner," the spokesperson said.

However, Hero MotoCorp Workers Union (HMCWU) President Kawalpreet Singh denied that workers have resorted to any slowdown of production.

The initial wage negotiations, which started during late-August 2012 after submission of the demands, remained inconclusive and fell apart on January 21. The matter was referred to the DLC of the region for further deliberations. Workers are demanding a monthly wage hike of up to Rs 18,000 over a three-year period.

However, HMCWU, which is representing the nearly 1,200 permanent workers, claims that the management is offering a hike of around Rs 6,500 per month spread over three years, which was the hike for the company's Dharuhera plant's workers during the three-year agreement signed in 2011.

The permanent workers are also observing silent protest by wearing black badges and are not taking tea and snacks provided by the company to press for their demand. Their colleagues at the Dharuhera plant are too wearing black badges during work in their solidarity.



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RINL issue unlikely to hit markets this fiscal

Written By Unknown on Rabu, 23 Januari 2013 | 23.25

State-run Rashtriya Ispat Nigam's (RINL) Rs 2,500-crore initial public offer is unlikely to hit the market in current fiscal as it has to start the process anew following expiry of the offer document filed with SEBI.

"The company had filed red herring prospectus with SEBI on October 8 hoping to launch IPO on October 16. Now, it has gone past three months and with this, it has lost validity. This calls for submission of documents afresh which take some time," a Steel Ministry official said.

"Taking the time required for RINL to file offer document into consideration, it is unlikely that the issue will be launched within the current fiscal," he added.

The RINL issue has already been deferred thrice since the filing of the draft prospectus with market regulator SEBI on May 18 last year. First, it was put on hold as a result of volatile market conditions and then due to a major explosion, which took place during the trial of a new oxygen control unit near the steel melting shop at Vizag Steel Plant (VSP).

Finally, in October last year, it was deferred following disagreements on the pricing of issue with merchant bankers. The issue was supposed to kick-start the government's Rs 30,000 crore disinvestment process for the current fiscal that has mopped up a little over Rs 6,900 crore so far.

Ten PSUs that include Oil India , NTPC , BHEL and SAIL are on the list of the government's disinvestment programme. RINL is the second largest state-owned steel maker in the country producing three million tonnes per annum (mtpa) at its lone facility at Visakhapatnam. The capacity is being raised to 6.3 mtpa in the current fiscal.

The Cabinet Committee on Economic Affairs in January had approved disinvestment of 10 percent of government's 100 percent stake in the firm.



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AC mkt has been stagnant for past 2-3 years: LG officials

Slowing down of the economy and delay in real estate projects are among the reasons that have led to stagnation in the air conditioner market for the past few years, top officials of consumer durables manufacturer LG India said today.

"The market has been almost stagnant for the last 2-3 years due to delayed projects in the real estate sector," Saurabh Baisakhia, Business Head, Air Conditioners, LG India, said.

LG Electronics' Head, Corporate Marketing, Sanjay Chitkara added that erratic weather, power cuts and slowing economy were the other reasons for the said market scenario. Baisakhia noted that with an increase in possession of homes in the coming years, he expected the industry to look up as there is scope for "business to improve."

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However, the commercial sector was doing well with an increase in office spaces and this segment contributed to about 15 per cent of the South Korean company's total business, he said.

LG had set its focus on key buying factors and was therefore working to provide the right value proposition to the customer including good payback options, he added. Announcing the launch of a new range of ACs including the Inverter V series, he said split AC segment contributed to 75 per cent of the 3.2 million units strong AC market.

Responding to a question, he said he would "not rule out the possibility" of window ACs being phased out gradually in the coming years. Its market share has been constantly declining in the last few years, he added.

South India contributed to about 26 per cent of the company's overall market share while it stood at 23 per cent at the national level.



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Investment in commercial realty to touch $1tn by 2030: JLL

Investors are increasingly putting in more capital into commercial real estate, particularly in the Asia Pacific region and direct investments in this segment are likely to more than double to USD 1 trillion by 2030, says a Jones Lang LaSalle report. 

Investors are already responding to shifting economic conditions by funnelling more capital into commercial real estate, particularly in the Asia Pacific region, it said.

The report estimates that direct commercial real estate transactional market will exceed USD 1 trillion per annum by 2030, compared with nearly USD 450 billion in 2012. 

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Asia Pacific has outpaced other regions in real estate activity since the global financial crisis, achieving commercial real estate investment volume in 2012 equal to 77 per cent of the previous peak reached in 2007.

The Americas have only reached 62 per cent of that level, while Europe's investment volume is 46 per cent of its peak amount.

"While real estate asset values have shown no immunity to the financial shocks of recent years, real estate nevertheless is emerging as a preferred option for many investors," Jones Lang LaSalle President and CEO Colin Dyer said. 

The report - The Advancement of Real Estate as a Global Asset Class, - said that since 2008, strong economic growth in the Asia Pacific region contrasted with recessionary contraction in Europe and North America has fuelled real estate activity.

Rein in hopes of high returns on property

"The Asia Pacific region is emerging as the long-term winner in the global contest for investment capital, boosted by the rise of domestic pension funds and private wealth," the report said. 

Higher returns are convincing many investors to increase exposure to real estate and increased allocations to real estate also reflect investor efforts to reduce risk by diversifying away from the traditional portfolio mainstays of
bonds and equities, the JLL report said. 

However there are some operational challenges like low levels of liquidity and in some cases undeveloped capital markets currently constrain institutional investment in the region.
    
This is partly the reason why most western institutions are underweighted in the Asia Pacific region relative to the size of its real estate markets.
    
Over the long term, JLL expects relative portfolio weightings to move in favour of the region as high rates of savings, rapid urbanisation, the inexorable rise of the middle classes and evidence of improving transparency increase investor confidence and interest in the region.



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Govt constitutes GoM to review urea pricing policy

Facing a mounting subsidy burden and imbalanced use of fertilisers, government has constituted a Group of Ministers (GoM), which is likely to be headed by Agriculture Minister Sharad Pawar to look into urea pricing.

Apart from Pawar, the GoM will include Finance Minister P Chidambaram, Fertiliser Minister M K Alagiri and Oil Minister M Veerappa Moily.

"The government has formed a GoM, which is most likely to be headed by Sharad Pawar and it will look into the modified New Pricing Scheme (NPS) III for urea as well as consider earlier proposals for de-regulating the sector," a senior Fertiliser Ministry official said.

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Urea is the only fertiliser that remains under full price control. Its current retail price is Rs 5,360 per tonne. The proposal to hike urea prices was made to redress imbalanced use of soil nutrients and reduce government's subsidy burden.

Another senior official in the ministry said the department of fertilisers is not in favour of raising the prices of the key nitrogenous crop nutrient as the farmers are already facing high prices of phosphatic (P) and potassic (K) fertilisers.

"After the Cabinet Committee of Economic Affairs's (CCEA) decision in June 2012 to send the proposal back to the GoM on urea prices to be reviewed again, the Ministry had some three months back sent its revised proposal to Prime Minister's Office (PMO) and it has been with them since then," the official said.

PMO acted on the proposal last week and asked a GoM to be formed to reconsider the urea pricing policy. The constitution of the GOM comes in the backdrop of stiff resistance by Fertiliser Ministry in raising urea prices
and bringing the sector under the nutrient based policy (NBS) like P&K fertilisers.

In June last year, CCEA had deferred the ministry's proposal to increase the retail prices of urea by 10 per cent. It had sent the proposal back for review to the then GoM, which was headed by then Finance Minister Pranab Mukherjee.

Earlier, the government had plans to decontrol the urea sector by bringing it under the nutrient based subsidy (NBS) scheme. A committee headed by Planning Commission member Saumitra Chaudhary had also suggested freeing of the sector. However, the proposal hit a road block as the Fertiliser Ministry, among others, opposed it in view of rise in retail prices of P&K fertilisers after they were decontrolled in April 2010.



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