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Airlines can charge preferred seats, check-in bags: Govt

Written By Unknown on Senin, 29 April 2013 | 23.25

In a move that would raise the cost of air travel, the government today said it has allowed airlines to charge passengers for preferred seats on a flight, check-in baggages and meals, among other things.

"Civil Aviation Minister Ajit Singh has decided to permit scheduled airlines to unbundle certain services and to charge fees for these services separately," an official release said.

The services for which the airlines would be free to charge passengers include preferential seating, meals, snacks, drinks (barring drinking water), check-in baggages, use of airline lounges, carriage of sports equipment and musical
instruments and valuable baggages which have higher carrier liability.

The practice was launched in 2008 by some US carriers which were facing financial crunch. Their decision to charge for even the first checked baggage had then received flak from air travellers, but the practice still continues with the airlines generating revenue worth millions of dollars.

Also read: Jet-Etihad deal to make industry efficient: Ajit Singh

The release said the Minister's decision was based on recommendations of an independent consultant, which said, "Unbundling of services ... has become a necessary aspect of exercising more control over operational costs and running a successful airline".

"The objective of the decision is to facilitate airlines to offer low base fare for price sensitive travellers, while at the same time offer choice to service seekers at a price," it said.

The decision would "allow the passengers to benefit from lower base fares and to customise the product to better suit their requirements and budget while allowing airlines to develop more sustainable operations in an environment of
wafer-thin margins," the release said.

The airlines which decide to levy charges on these services would have to file details of services to be unbundled and the fees to be charged for them to the aviation regulator Directorate General of Civil Aviation (DGCA).

"DGCA may not fix fee for unbundled services but shall have the right to intervene and stop charging if regulatory principles are violated by the airlines," the release said.

It said the airlines would have to maintain transparency and inform the travelling public and agents what fee was being charged for which of the 'unbundled services'. The charges for would be a fixed amount and announced well in advance by the airlines "which shall not vary with the base fare for a particular flight".

The customers should be given the opportunity by the airlines to pick and choose which amenities they want to receive and pay for, the release said.

Observing that the airlines would be free to levy fees for these services, travel industry sources said there would now on be no difference between a no-frill and a full service carrier, once these charges on meals and preferred seats are implemented.

Without naming any airline, they said some of them were already selling the seats on the front three rows of each flight, along with those on the 12th or the 13th row located near the emergency exit, which gave larger leg-space.

On the fees proposed to be levied on the use of airport lounges, the sources said this practice was prevalent in several countries where, apart from the travellers on first and business classes and frequent flyers who are entitled to enter the lounge, a non-entitled passenger could also avail of the lounge services by paying a certain amount.



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Ruchi Soya in JV with Kagome, Mitsui for tomato products

Moneycontrol Bureau

Soya products and refined cooking oil maker Ruchi Soya Industries is expanding into the tomato market with a joint venture with Japan's Kagome Co and Mitsui & Co.

According to the company around 17 million tons of tomatos are produced in India each year, second only to China. However, only 1 percent of that is further processed.

The JV company Ruchi Kagome aims to focus on this untapped market and make products like tomato ketchups, pasta sauces and purees.

Ruchi Soya will have 40 per cent stake in the venture and the rest will be held by a special purpose company created by Kagome and Mitsui, in which Kagome (processed tomato business leader in Japan) will hold 66.7 per cent and 33.3 per cent stake will be held by Mitsui, a trading investment and services firm.

The company will set up a factory in Maharashtra at an initial investment of Rs 44 crore and initial production will begin from mid-2014, Dinesh Shahra, Ruchi Soya's MD and founder told reporters in a press conference.

It will directly procure from farmers and the aim is to gain 20 percent market share in the processed tomato segment in 5 years, he added.

In the first phase, the JV will tap the business-to-business channel and then target consumers.

It will initially focus on market areas around Mumbai, the National Capital Region and Bangalore.

Ruchi Soya shares gained near 7 percent post the announcement and finally closed up 0.6 percent at Rs 69.50.



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A synopsis of what Nomura expects from RBI credit policy

Moneycontrol Bureau

The Reserve Bank of India (RBI) is going to announce its fourth quarter (January March) credit policy on May 3. Speculations are rife that the central bank may cut the policy (repo) rate in the range of 25 50 basis points in a bid to revive the sputtering growth engine.

Repo is the rate at which banks borrow from RBI's daily borrowing window or known as LAF (Liquidity Adjustment Facility) in the banking parlance.

Sonal Varma and Aman Mohunta two economists from Japanese research firm Nomura are of opinion that the RBI may be prompted to cut rates due to three-pronged reasons: lower rate of wholesale price index (WPI) based inflation, weak growth and narrow trade deficit.

Here is what they had to say:


• A 25bp repo rate cut: We expect the RBI to cut its repo rate by 25bp to 7.25%, in line with consensus expectations. The RBI had stated in March that "headroom for further monetary easing remains quite limited." However, lower WPI inflation (80bp below the RBI's projection in March), continued weak growth and a narrower trade deficit should have collectively created space for further easing. Additionally, while a cut in the cash reserve ratio to allow for better policy transmission is possible, we do not consider this part of our base case scenario (Consensus and Nomura: 4.00%).

•     Economic projections: We expect the RBI to project GDP growth at around 6% y-o-y in FY14 (year ending March 2014. up from 5.0% in FY13. Our forecast is for a lower 5.6%. We expect the RBI to project WPI inflation at between 5.5% and 6.0% y-o-y by March 2014 (6% in March 2013) on lower global commodity prices, a lagged impact of weaker demand and the forecast of a normal monsoon.

•  Developmental and regulatory policies: We expect the RBI to announce a phased reduction in the hold-to-maturity (HTM) limit for banks from the current 25% to 23% (same as the statutory liquidity ratio). It could also tighten asset-quality norms for non-banking finance companies and on gold loans.

•     Forward guidance: We expect the tone of forward guidance to shift from hawkish to neutral. We expect the RBI to signal that there is some scope for further rate cuts, but only contingent on signs of a sustainable moderation in CPI inflation and the current account deficit.

Outlook:

In our view, the global commodity price outlook is key to the trajectory of WPI inflation. A steady fall in global commodity prices, if sustained, would help ease input cost pressures and thus aid a further fall in WPI inflation in the coming months, providing the RBI even more headroom to cut rates (see: Asia Special Report: Lower commodity prices a boon for Asia, 19 April 2013).



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Fees for check-in bags to slightly push airline rev: Expert

The Directorate General of Civil Aviation (DGCA) earlier today announced that it was permitting scheduled airlines to charge for certain unbundled services separately like preferred seats on a flight, check-in baggage and meals among other things, thereby helping the airlines increase their ancillary revenues.

So now going forward consumers would have to be prepared to pay marginally higher for tickets.

Jitendra Bhargava, Former ED, Air India when questioned on how he read this he said, "Fundamentally, this is a move that must be welcomed. It takes India on to the practices that are followed globally."

Also read: Airlines can charge preferred seats, check-in bags: Govt

However, he adds, for there to be any significant change in Indian carrier's revenues government will have to look at more fundamental systemic issues that can put Indian carriers on a stronger financial model, especially issues of Aviation Turbine Fuel (ATF), airport charges.

Although he agrees that this current move would increase the revenues for the airlines marginally and help those customers who can afford to pay extra for these services.

Below is the verbatim transcript of his interview on CNBC-TV18

Q: How exactly are you reading this move that has been announced by the government? What will this mean? Should consumers expect air fares to go up?

A: For passengers who can afford to pay an extra bit for getting a preferred seat with more leg space and for food, use of lounge etc. it is good news.

But for a normal passenger who travels with checked- in-baggage that would mean that he is going to pay in additional sum to an airline. On the other hand, it may discourage people from going with check-in-baggage but will have preferred to go with hand baggage because there is there is a cost involved for an airline for handling of a check-in-baggage.

This decision of the government or the ministry has come in at a time when AirAsia is coming in. AirAsia has been charging for all these services. So one can always wonder as to why did we not move in to this model, six months or one year ago when AirAsia was not being considered or was not planning to come into Indian market.

The other aspect is that one could say that these are tinkering, which will have marginal kind of revenue growth for the airlines and financial burden for the passengers.

However, the ministry ought to be looking at are bigger issues; fundamental systemic issues that can put Indian carriers on a stronger financial model. Issues of Aviation Turbine Fuel (ATF), airport charges are handled whereas these unbundling service issues I would categorise as small kind of feeders or a feed being given to the airlines, which isn't going to take them very far.

Q: This is a very small step that has been undertaken by the civil aviation ministry. They have opened up the sector in terms of foreign direct investment (FDI) but moves like this - allowing increasing ancillary revenue are just small steps. Do you think that this is going to enable airlines to reach that 20 percent global level which has been set by players because we are talking about AirAsia, Etihad and Jet now, do you think they will be able to compete, is it still a level playing field as far as the domestic players are concerned?

A: I don't think so. It is still a far, distant dream I would say for Indian carriers to scale 20 percent as far as ancillary revenues are concerned because for example sale of products on flights, there are various kind of franchise's that are given out. Those kinds of things haven't been attempted by most of the Indian carriers.

Lounge, tickets, preferred seating; food etc on board will not amount to a significant sum for the airline. One way of looking at it is that it is a welcome revenue for the airline. But if the question is can it help airlines come out of a scenario, for example when AirAsia comes in you get into a regime of low fairs once again, which will severely impact the finance of the airlines which have seen an upward movement thanks to the demise of Kingfisher. The fundamentals of the airline industry have to be looked at by the government.

I would only describe this current move as tinkering and nothing more than that. It would certainly help people who can afford for example for more leg space at the moment you request an airline or you go to the airport sufficiently in advance. But with this move one would  be able to pay and get a seat with leg space or a window seat for that matter or check-in baggage, as many bags I want to check-in. So, those kinds of things are coming in,

Fundamentally, I would say this is a move that must be welcomed. It takes India on to the practices that are followed globally. However for any significant change in Indian carrier's revenues to come in, it will come in through major significant issues, which are unfortunately not receiving the attention of the government.



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3G row: HC asks Bharti Airtel to respond to BSNL's plea

The Delhi High Court today asked Bharti Airtel to respond to a plea of state-owned BSNL seeking to implead itself as a party to a plea filed by the private telecom major against imposition of penalty of Rs 350 crore for offering 3G services in areas where it lacked licenses.

Justice Rajiv Shakdher issued the notice to Bharti Airtel on the plea of Bharat Sanchar Nigam Limited (BSNL) and posted the matter for further hearing on May 9. BSNL is opposed to Bharti Airtel's plea against the order of the Department of Telecommunication (DoT) asking the private firm to stop providing 3G services by entering into intra-circle roaming (ICR) pacts with other telecom companies.

Earlier, the Supreme Court had directed the DoT not to take any coercive step against Bharti Airtel Ltd. It had also asked the telecom company not to extend its roaming services to new customers in seven circles where it does not have licenses for 3G spectrum. The apex court is scheduled to hear the case on May 9.

Bharti Airtel Ltd had moved the apex court after the division bench of the High Court vacated its stay on the operation of a DoT notice against BCL for providing 3G services outside its licensed circles.

The DoT had on March 15 imposed a penalty of Rs 350 crore on Bharti Airtel, saying such ICR pacts were illegal and amounted to sub-letting of 3G spectrum.

The DoT had also issued similar orders to Vodafone and Idea directing them to scrap 3G intra-circle roaming pacts. A penalty of Rs 550 crore and Rs 300 crore respectively were imposed on them for alleged violation of 3G service license norms.

Vodafone and Idea have separately filed petitions in the Delhi High Court challenging the department's order on which the high court has passed an order identical to that passed by the apex court in Bharti Airtel's case.



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CCI directs MoEF to accord clearances on Sail's Gua mine

The Cabinet Committee on Investment has directed the Ministry of Environment and Forests to accord clearance to Sail 's Gua iron ore mine, a site in Jharkhand which is crucial in the PSU's Rs 43,000 crore expansion plans.

"The Committee (CCI) has directed that after obtaining requisite information from the state government, clearances be issued by the Ministry of Environment and Forests within one month," a source said.

Sail's Gua mine, which supplies ore to its steel plants in Burnpur and Durgapur (both in West Bengal), among others, was commissioned in 1958 and has estimated reserves of 142 million tonnes.
    
The mine has remained closed since June 2011 in absence of environment and forest clearance, hitting the iron ore production of the state-run company hard. Sail had applied for forest clearance for 635.986 hectares of area. The state-run firm plans to invest Rs 3,000 crore to quadruple capacity to 10 mtpa and put up a four mtpa pelletisation plant.
    
Sail has already submitted the mine wildlife conservation plan to the Ministry of Environment and Forest. Mining was to start after getting clearances from the Jayanthi Natarajan-led Ministry.
    
Though the mine has a production capacity of 2.4 million tonnes per annum (mtpa), it could produce only half a million tonne in 2011-12 for want of forest and environment clearances for most part of the year.
    
However, this prolific mine is crucial for the company to feed its plants in country's eastern region, where Sail is investing Rs 43,000 crore to jack up its steel-making capacity by 5.44 mtpa. Sail has already spent Rs 33,000 crore into these plants.
    
Gua mine started operations in 1919 and was a captive mine for IISCO  (till its merger into Sail in 2006) for its Burnpur plant. Due to non-availability of sinter making facility at Burnpur, the fines generated in the due course of production got accumulated in the mine and remained unutilised.



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Marriot gung-ho on expansion as hospitality sector limps on

Written By Unknown on Sabtu, 27 April 2013 | 23.25

India's hospitality sector has been struggling for traction through 2012, but international hotel chain Marriott seems to have had no such trouble, reports CNBC-TV18's Farah Bookwala .

International hotel chain Marriott has, over 15 years in India, opened only 18 properties, mainly because the focus has been on profitability. And this has paid off.

Over the last five years, revenues and profits have shown 15-18 percent yearly growth. In 2012, its revenue per available room grew 5 percent Y-o-Y, when the industry saw it fall 6 percent, making India the second-fastest growing country in the Asia Pacific region.

So, to take things to the next level, Marriott plans to open six more properties in the country in 2013 as part of an aggressive expansion exercise undertaken in the country .

50 hotels are under development, and will open their doors by 2015, giving the chain 15,000 rooms, against the curent 4,000.

Rajeev Menon, VP - South Asia and Australia, Marriott Hotels India says, "The different brands we operate have great reputation. Be it JW Marriott as a luxury hotel or a 4-star such as Courtyard . It is very well established. Also it has a lot to do with our very strong loyalty programmes. We now have 400,000 members in India alone."

JW Marriott, the flagship 5-star brand and Courtyard by Marriott, its 4-star brand will lead this expansion.

Of the 24 hotels that will be up and running by the end of 2013, 11 will be Courtyard by Marriotts, and five will be JW Marriotts. In addition, Marriott will bring in two new brands from its global portfolio -- luxury brand Ritz Carlton, and mid-tier brand Fairfield.

So that's two new hotels in Banglore this year. Marriott says Fairfield will lead the next expansion thrust in the future

Menon says, "We see great opportunities for Fairfield. And therefore we have gone into a joint venture with Samhi Hotels that is currently developing properties around the country. We believe Fairfield, between today and 2015, could see 8-10 operational hotels with another very strong pipeline of about 20--25 hotels for the future."

Under this JV, Marriott will develop Fairfield hotels at a cost of USD 25 million.
While the Marriott group operates all its properties in India solely through management contracts, the group is now looking to experiment with the franchising model for its brand Fairfield as it would enable them to scale up the brand quickly.

However, the management is firm that the franchising model will remain a small part of their operating model and that franchise contracts would be entered into only with select developers.



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Amazon shares hit on growth concerns

Amazon.com Inc's stock sank on Friday on concern about slowing growth at the world's largest Internet retailer.

Late Thursday, the company reported slower revenue growth and offered a disappointing outlook for this quarter, exacerbating uncertainty about the health of its business beyond the United States.

Amazon faces a sluggish European economy and inconsistent efforts to break into emerging markets such as China, where competition from the likes of Alibaba is intense.

"Amazon's now growing at about 2x eCommerce, compared to 3x a year ago," Doug Anmuth, an analyst at JP Morgan, wrote in a note to investors following the company's results.

Traditional retailers are losing less market share to Amazon than they used to as they increase selection online, price-match more aggressively, and work to combat showrooming, Anmuth argued.

Amazon shares were down 7.3 percent at USD 254.63 late on Friday morning on the Nasdaq.



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Bajaj Auto awaits final rules on quadricycles

Even as Bajaj Auto waits for a government-appointed committee to come up with the final rules on quadricycles, the two-wheeler major continues to face opposition over the RE60 in India from competitors who have raised safety concerns amongst other dissenting voices. 

However, CNBC-TV18 learnt exclusively that the company is seeing interest picking up from export markets .

The deputy Prime Minister of Singapore will be visiting Bajaj Auto on May 4 to discuss export potential for the RE60. Singapore is not the only country. Similar interest has been expressed by countries both from the Latin Americal as well as the African region. This export interest is coming in for Bajaj at a time when its domestic competitors are becoming increasingly vocal.

Earlier on Friday, Maruti pointed to the safety concerns in the RE60, which is Bajaj Auto's four-wheeler and comes under a new classification of vehicles called the quadricycle.

Tata Motors ' Karl Slym, in two different tweets, said, "The number of wheels do not automatically make us better. It is adherence to tried and tested safety and emission norms. Why? The government and industry have been accelerating efforts in traffic safety and environment now we consider the quadricycle."

What all these companies are pointing to is that the safety and other norms for quadricycles and cars are different at the moment. Something which Bajaj Auto refutes by saying that a quadricycle is not really a car and that it should be sufficient if the Indian norms follow globally established norms.

The governments report clarifying what the guidelines and specifications are for the quadricycle category is awaited.



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Make best use of your kids' time with online ready reckoner

The e-commerce space is in a frenzy of activity in the last few years- the rush of money, consolidation and a lot media buzz. The latest hot spot in this market is the children's category which has remained a relatively untapped segment in India.

Three entrepreneurs- Vishal Gupta, Prashant Sinha and Asif Mohamed who decided to jump in with their venture, mycity4kids.com, spoke to CNBC-TV18's Young Turks about their e-commerce experience.

Launched in 2010, this online portal for children-related services gives parents access to information about schools, activity classes and even reviews of services by fellow parents. With more than a million parents visiting the website currently and over 40,000 service providers being listed across six major cities, mycity4kids.com has already clocked in revenues of Rs 3 crore.

Below is an edited transcript of the show on CNBC-TV18

Deepa Singh, a 36-year-old mother of two who shifted to India after living for four years in the US, searched high and low for preschools in her neighbourhood till she logged on to mycity4kids.com. "mycity4kids.com is like a one-stop shop for a parent. I plan to enroll my older child at a few events or summer camps and plan to admit my younger child at a mother-toddler programme or a preschool."

Targeting parents like Deepa, Vishal Gupta, Prashant Sinha and Asif Mohamed set up the website as a ready reckoner for facilities and programmes for children between 1 to 14. With an initial investment of Rs 50 lakh including personal savings, the trio was clear. Of focusing on the children's market from the start.

Vishal Gupta, co-founder, mycity4kids.com says, "The biggest USP of our site is that it has been formed using the perspective of a parent. Every service-provider on our site has been profiled by us and contains all the required information."

"This information has been presented in the manner that parents would go about looking for such information. So for classes to aid a child's concentration, the search results on our site would offer everything from classes on chess, the Rubik's Cube to learning the abacus."

Not just parents, but investors saw potential in the concept and mycity4kids.cin has raised USD 1 million in angel funding from YourNest Angel Fund an early-stage venture capital firm in 2012. The team is now toying with the idea of raising another round of funding this year. Currently free for users, mycity4kids.com charges service providers and advertisers and has managed to clock up revenues of Rs 3 crore.

"For the consumer, the site is completely free as of now. Attempts are on to provide as much of personalisation as we can. So, based on how you surf through the site and depending on information you are looking for, we try to personalise your experience and give you information that is more relevant," adds Asif Mohamed, co-founder, mycity4kids.com: 

Providing information to parents across six cities - Delhi, Mumbai, Hyderabad, Chennai, Bangalore and Pune - the trio's the plan is to now cater to 10 more cities by March 2014. To generate additional revenues, mycity4kids.con provides a range of solutions to SMEs operating in the children's market ranging from response management, payment and local promotion solutions for a price of Rs 2,500 to Rs 1 lakh a year.

Prashant Sinha, co-founder, mycity4kids.com says that he foresees the model going to more cities and across different tiers. "So, there are different problems that are being solved. The first problem is to help similar businesses get online.  We are also trying to aid businesses promote themselves in and around the locality and collect payments."

With the target in sight, the trio is ready for game, set and match. As their customer base grows, the site could move to a pay-for-use model, adding funds to the company's kitty and the next phase of growth could see them making a play for the product market as well.



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Shades of grey: Many myths of media freedom

R Jagannathan
Firstpost.com

The sudden collapse of the Saradha Group in Bengal is yet another reminder of the fact that a huge chunk of Indian media is run by tainted money. The group set up several news channels and print publications in Hindi and Bengali, among other languages, and the failure of the core chit fund business means journos have been turfed out of jobs.

The Sahara Group, which has been running illegal money-raising schemes and asked by Sebi to wind up two of them, is still playing ducks and drakes with the legal system. It runs several print and TV channels. One cannot but wonder about the future of its newsroom if push comes to shove.

We can multiply such examples in every state, and we can also draw similar conclusions from the fact that many news organisations are run by political parties not known for their probity. Among them, the YSR Congress' Sakshi channels. Their boss in still in jail. Once again, Sakshi is not the exception. Every state has political parties, with dubious sources of funding, running media.

The question is this: if large parts of media, possibly even the overwhelming part by volume, are run with funny money, how can Indian journalism ever be credible? The abuse that many senior journalists get on social media including Firstpost is often the result of readers/viewers being unable to believe that any story is the result of honest journalism.

Can this change in the current climate of suspicion that all news media are dominated by vested interests?

The answer lies, first, in acknowledging this truth. We are in bed with powerful interests. It also lies in admitting to two shades of grey in terms of credibility and bias.

First, one has to question the presumption that there can ever be completely neutral and unbiased journalism in a situation where media has to be funded by someone. The best we can hope for is that the limited bias inherent in a media house owned by some moneyed interest or the other will be countered by opposite biases in some other media houses.

Second, we also have to doubt the assumption that somehow media can be both credible and commercially viable at the same time. Good journalism costs money; a serious investigation into wrongdoing can swallow lakhs of rupees and months of painstaking effort to bring to fruition. This can be paid for only by readers or advertisers. But how many readers are willing to pay Rs 15 daily for a Times of India? How many advertisers will be willing to pay you good money if, at some point, they are going to be targeted for their own wrongs?

This leads me to my first conclusion: Collectively media can be independent, by neutralising each other's biases, but individually we will have limitations on perfect credibility.

This is why people may watch Sakshi even though they know it is an YSR Congress channel. Ditto for Sun TV, which may have a DMK bias, and Jaya TV (AIADMK). As a society, by letting each one play out their biases, we end up getting a better approximation of the truth.

Biases emanate from multiple sources.

The first bias is the personal one. If I like Narendra Modi and you don't, our journalism will reflect our respective biases. We may couch our writing with arguments this way or that, but underlying it all will be our personal biases. Personal bias (predilection would be my preferred word) cannot be eliminated, and often we would not be human if we don't believe in anything or anyone. We have to live with it.

The second source of bias is related to how journalism is funded. In India, there are many categories of funding sources. Here are some of them.

#1: Big business with surplus cash. This is the main legitimate source of media funding. The Aditya Birla Group has a stake in TV Today, the Reliance group has funded the promoters of Network18 (publishers of Firstpost), and Kotak Mahindra has a stake in Business Standard, and so on. The inherent blind spot for these media houses is that they wouldn't be seen as being objective about the activities of their financial backers. The problem here is not the source of funding alone but perception.

#2: Politically funded newspapers. This is where the bulk of Indian journalism gets tainted, because political funding is always the result of backdoor funding unless something is specifically designated as a party mouthpiece. Media writer Vanita Kohli-Khandekar says that "more than a third of news channels are owned by politicians or politico-affiliated builders. An estimated 60 percent of cable distribution systems are owned by local politicians." These news organisations will have clear political biases, not to speak of business biases where the business interests of their political patrons are concerned. Most Indian politicians are also aligned to business interests.

#3: Plain and simple crooked money. Given the size of India's black economy, there are not enough legitimate businesses which can use these hidden cash. Investing in media is one way to launder black money. Media investments are not only small (for crooks, that is), but also have the ability to yield big dividends in terms of political clout and respectability to owners. As Shekhar Gupta writes in The Indian Express today: "If you have a couple of news channels and newspapers, a few well known (and well connected) journalists as your employees, give them a fat pay cheque, a Merc, and they solve your problem of access and power. They also get you respect, as you get to speak to, and rub shoulders with top politicians, even intellectuals, at awards and events organised by your media group. It is the cheapest ticket to clout, protection and a competitive edge."

#4: Mainstream media houses helped by covert compromises, even blackmail. There are many legitimate media houses, both in English and in regional media, that do regular journalism unaligned to politics. But to make themselves viable, they use covert strong-arm tactics to earn revenues. The Zee-Jindal case is alleged to be one such example, but it is a well-known fact that many in the regional media play this game to stay afloat. Their message to advertisers: "If you don't advertise, we may write nasty things about you."

#5: Formal alliances of media and business interests. In order to protect their commercial interests, some media groups such as The Times of India have sections where news is paid for, and advertisers are given private treaties that more or less guarantee them some good publicity in return for advertising revenues. This model has now been taken up by many other media houses and is no longer unique to The Times. In any case, almost all publications create specific sections just for the advertiser and call them marketing supplements, or advertiser-sponsored supplements.

#6: A ready source of rentals. Some media houses what obtained cheap land in the past from government are able to stay afloat by using rental incomes from property. The Indian Express lives partly of incomes from its real estate in Mumbai, and so does the Statesman. The Free Press Journal exists as a newspaper only to legitimise the real estate interests of its owners.

The short-point is this: media is compromised in many ways, and credibility can only be a shade of grey.

The larger question that journalists need to ask themselves is this: can real journalism ever be fully viable without compromises?

My own (partial) answer is that digital journalism, by bringing down content costs dramatically (due to very low distribution costs) is one solution. Not surprisingly, powerful vested interests, including governments, want to control freedom on the net. They are not lovers of freedom.

But the long-term answer surely must lie in non-commercial funding structures that reduce dependence on big business, tainted money or dubious compromises.

The writer is editor-in-chief, digital and publishing, Network18 Group

Moneycontrol.com is part of the Network 18 Group, which owns TV18, Firstpost etc.



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'Think Learn' a venture focused on educating India

The India story is linked closely to its demographic profile. We are not just the world's largest democracy but also the youngest. This advantage could turn to be liability if the government and the private sector turned focus on scaling employability and providing basic education.

A 33 year old Byju Raveendran decided to focus on the not sought after competitive examination market to help students prepare and crack the entrance exams from engineering to medicine to the IAS and even the SAT and GMAT. He gave up his American dream for a chance to change the way students think and learn.

Founded in 2008 Think & Learn is grown from addressing the needs of 250 students to over 20,000 students today. With the launch of the K12 tablet Byju hopes to capture even bigger market through distance learning.

Every weekend in Bangalore over 2000 students assemble in a classroom to get ready to bell the cat. The man cracking the whip is Byju Raveendran. A CAT topper and National Mathematics Olympiad winner, Byju decided to ditch the IIMs to start Think & Learn, the parent company of Byju's classes.

For Byju having grown up in a family of teacher's education seemed to be a natural fit. What started as a CAT training institute with just 250 students in 2008 today prepares students for UPSC, engineering entrances, GMAT and the GRE.

Realising that there is an upper limit to the number of students he can reach out to if he continues with a brick and mortar model, Byju started identifying best teachers across India. Today it reaches out to students in different parts of the country through VSAT centers. However, what is different about Byju's class?

Raveendran differentiates his classes with others. He believes that all the other coaching institutes basically identify the patterns and make them practice 100s of question so that they get familiar with all the previous questions. However, he does not concentrate on that. He basically teaches students the principles so that they can solve any question. He teaches them how to expect questions, how to predict questions rather than solve questions made by someone else. "We mainly train them is that they will be in a position to expect questions and more than questions its not just about doing well in the exam they will clearly understand the concepts so that they will be able to frame those questions," he said.

With 60 centers pan India Byju's class isn't cheap with students shelling out anywhere between Rs 6000-50,000 a year. Having already grossed revenues of Rs 14 crore Think & Learn received its first round of funding, a whooping USD 10 million in December 2012 from the Manipal Group.

What made the Chairman of Manipal Global Education Services and the Former Infosys CFO Mohandas Pai bet on Byju was that he had a great business for India and his idea was truly transformational.

Pai heard of him first, when in Manipal we found a rush of young people going to a class. When he enquired as to why they are doing that he found that there was a person by the name of Byju Raveendran who is taking classes for them to enable them to pass their classes in IAM. Students were very happy with him and the success rate was extraordinarily high. "Then we contacted him and requested for a meeting, he came and he spoke to us and he explained. We found that he was a wonderful entrepreneur who has hit upon a successful idea and who has made sure that the idea actually worked. He has tested it out, he has led from the front, done many things himself, he has opened to change, he has changed the way of doing things based upon responses" said Pai.

With financial backing, Byju is all set for the next growth phase and is betting on the power of tablets to take his classes to students anytime, anywhere. These K12 tablets launched in February this year are preloaded with adaptive text, animation videos and practice tests. Currently the content is only available for engineering and medical entrance exams in Bangalore. The team of Think & Learn is now working on adding courses and taking the tablet pan India by next year.

Raveendran informed that for the next three years he will be getting into the school education segment. There he will be coming out with products in maths and science through tablet, which will be in a completely adaptive platform. Revenue numbers which we are expecting over the next three years is close to Rs 100 crore. In the last three years we have been doubling our revenue without any investment. With investment as well as with lot more brilliant minds coming together, joining he hopes to come out with products across test preparation segments as well as into school segments in maths and science through tablets.

With an eye on scoring revenues of a Rs 100 crore over the next three years Byju is all set to kick-start Think & Learn foraying to the school segment to prepare students from class eight onwards by supplementing their school studies. The bigger goal however for this state level player is to teach students how to learn.



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Forex reserves fall by USD 485 mn to USD 294.76 bn

Written By Unknown on Jumat, 26 April 2013 | 23.25

The country's foreign exchange reserves were down by USD 485.9 million to USD 294.76 billion for the week ending April 19, in the wake of fall in core currency assets, the Reserve Bank said today.

The forex reserves had gone up by USD 1.4 billion to USD 295.25 billion in the previous reporting week. Foreign currency assets, a major component of the forex reserves, were down by USD 489.2 million to USD 262.41 billion, according to Reserve Bank's weekly statistical supplement.

Foreign currency assets expressed in US dollar terms include the effect of appreciation or depreciation of the non-US currencies, such as the euro, pound and yen, held in the reserves, the apex bank said. The gold reserves remained unchanged at USD 25.69 billion during the week. For the week under review, the special drawing rights (SDRs) were up by USD 2 million to USD 4.347 billion, while the country's reserve position with the IMF was also up USD 1.3 million to USD 2.311 billion, the apex bank data showed.



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Antique maintains buy on SpiceJet; target Rs 60

Moneycontrol Bureau

Brokerage house Antique Stock Broking has maintained its "buy" rating on SpiceJet with a price target of Rs 60 for the stock. The broking firm believes the Jet Airways -Etihad deal has the potential to re-rate aviation industry in India and SpiceJet could see substantial upside from current levels.

"The strong premium by foreign player signals the interest in latent growth Indian aviation market and we believe Spicejet is the next best candidate among the listed players to attract investments considering country's growing aviation market with strong promoter support and its lean balance sheet. The company has gained market share from 12 percent in the financial year 2010 to 19.2 percent in third quarter of financial year 2013. It is expected to continue to outperform domestic market with higher load factor and growing fleet," said the Antique note to clients.

"The company has very high sensitivity with fuel cost as it currently accounts for 45-50 percent of its sales. Considering relatively fixed nature of other cost, the full year profit for FY14 has delta of Rs 40 crore for rupee 1 per litre change in domestic fuel cost. We believe with increasing market share, focus on operational efficiency and relatively strong balance sheet should re-rate the valuations of the company," said the note.



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Localisation was key contributor to Q4 net: Maruti Suzuki

Internal measures taken on cost, the weakening yen and commodity prices helped achieve good Q4 results, says, Ajay Seth, CFO, Maruti Suzuki . Maruti Suzuki's Q4 net soared 80 percent year-on-year to Rs 1,148 crore. Talking to CNBC-TV18, Seth says the company has increased selling prices in January, which also helped achieve these numbers.

He added that as the yen has fair amount of bearing on the company's margins, it has already hedged 30 percent of its hedge books of yen, and intends to increase this to about 50-60 percent in the coming months.

Here is the edited transcript of the interview on CNBC-TV18.

Q: Your numbers have been good at a time when the overall market is bad. Can you explain the reasons.

A: We had mentioned it earlier in the half-yearly conference that we are working towards our internal programmes on how to manage costs well. Localisation for us was a very key component. We have been saying that this will bring us significant results aided by the weakening yen and also commodity prices softening.

So, internal measures that we took on cost, the weakening yen and commodity prices helped us to achieve these results. We also had some minor correction on our selling price. We have increased selling prices in January. That has also helped us to achieve these numbers.

Q: These numbers are coming at a time when the overall market got totally hammered. Can you give us a sense of the kind of discounting that happened in FY13 compared to FY12?

A: Overall discounts this year were slightly high than last year. However, the discounts in the fourth quarter this year were lower than discounts in the fourth quarter of last year. So, we had this benefit of seeing a slightly declining discount trend in the fourth quarter. Hopefully, moving forward, we may see the trend of discounts getting corrected a bit.

Q: Also, in FY14, the diesel share of your overall production is going to go up to 40 percent. In terms of overall realisations, do you see healthier numbers and this stellar run that you have reported this time around to continue in FY14 as well?

A: There will be some increase in overall realisations as the percentage of growth compared to the volume growth but most of it has already been factored in this year because this year if you see, the realisations have been growing much faster than the volume growth. Next year also, you will see that trend but it will not be to the extent that you saw this year. Most of the base has already been corrected.

Q: The Bank of Japan announced its massive stimulus package, following which there was a significant depreciation in yen and of course you benefited tremendously. Going forward, could you give us a sense of your hedging strategy?

A: We have been continuously watching the yen. For us, this is the most important currency because it has fair amount of bearing on our margins. We have already hedged about 30 percent of our hedge books of yen. We intend to increase this hedge book to maybe about 50-60 percent in the coming months.



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Hind Copper eyes better margin, Rs 273-cr PAT in FY14

Hoping for higher margins, Hindustan Copper expects to better its net profit this fiscal at Rs 273.05 crore on the back of Rs 1,651 crore gross sales. The state-owned firm is expected to clock Rs 225.18 crore net profit in 2012-13, it also said in a MoU with Mines Ministry for the current fiscal.

The expected net profit for FY'13 is a little higher than the MoU target of Rs 224.61 crore with the Mines Ministry for the year. Hindustan Copper is yet to come out with its audited financial results for 2012-13.

The company had reported Rs 323.44 crore net profit in 2011-12. The PSU hopes its gross margin to improve to Rs 569.37 crore from Rs 444.26 crore in 2012-13. Gross sales of the company is likely to be Rs 1,399.11 crore in 2012-13, down from Rs 1,638.18 crore a year ago. It hopes to produce 39 lakh tonnes ore and 35,200 tonnes of metal concentrate in the current fiscal. Shares of Hindustan Copper closed at Rs 100.45, down 1.03 per cent, on the BSE.

Also read: MCX Copper April Fut has support at Rs 386-383: GEPL



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Open to amending JPC draft report if convinced: Chacko

In a bid to end the confrontation in JPC, its Chairman P C Chacko, under opposition fire, today expressed willingness to consider amendments to the controversial draft report on 2G spectrum scam which gave a clean chit to the Prime Minister and the Finance Minister.

Chacko told PTI that any amendment could be considered if the opposition members convince him through discussion about any wrong thing in the draft instead of indulging in politics. He also expressed readiness for a probe into the leakage of the report to the media, amidst opposition's allegations that he was responsible for it.

"The aim should not be to reject the report. They should say we want to amend the report. They should convince the committee on the need to redraft the report...I am open to get convinced. But convincing comes subsequently. First, they should be ready for a discussion," he said in an interview.

Also read: 2G scam: Opposition seeks removal of JPC chief PC Chacko

He said he was ready to have a marathon meeting "continuously day and night" to debate the report in the committee as he has to table it in Parliament by May 10.

His comments came a day after 15 opposition members in the 30-member panel accused him of being "partisan" and demanded his removal as they criticised the draft report for giving clean chit to Prime Minister Manmohan Singh and Finance Minister P Chidambaram. Accusing opposition parties of indulging in politics, Chacko, a Congress leader, said if they maintain their present stance, it would mean that the report is not palatable to them. "They are damaging the healthy parliamentary practice," he said.



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ICICI Bk rules out money laundering, sees transaction error

Moneycontrol Bureau

India's largest private sector lender - ICICI Bank has not traced any evidence of alleged money laundering cases within it. It has just completed its internal investigation based on charges made by a media sting operation on top three private sector lenders. However, the bank has hinted at some transactional errors that may have occured during the process.

"The internal inquiry committee has submitted its reports," said Chanda Kochhar, CEO and MD of ICICI Bank in a conference call while announcing the fourth quarter earnings .

"No actual transaction has taken place. No other transaction has been found in respect of money laundering. There are indications of transactional errors but no case of money laundering. The external inquiry being carried out by Deloitte, is not yet finished. However, initial reports did not find any evidence of money laundering," she said.

A month back, Cobrapost.com, an investigative news website, ran a sting operation alleging that ICICI Bank, HDFC Bank and Axis Bank were involved in money laundering practice. Immediately after that, all banks came out with press statements giving clarifications and ordering internal and external investigations.

At ICICI Bank, there are around 18 employees allegedly involved in the Cobrapost expose. The bank has identified around 20 branches across India to be involved in the case.

"Based on our internal inquiry report, we have not yet taken the final call on those 20 employees. We will do it after all final investigation reports come. We will take measures accordingly," said Kochhar replying to a moneycontrol.com's query.

Earlier, HDFC Bank and Axis Bank had too refuted the claim of alleged money laundering practice. They did not trace any such case in their respective investigation. In their quarterly earnings conference calls, both banks had mentioned of not finding any evidence of alleged money laundering so far. 

The Reserve Bank of India (RBI) had discussed the issue with all those banks. Currently, it is investigating the matter. RBI deputy governor KC Chakrabarty had hinted at taking corrective measures to fix the problem. However, he had ruled out any systemic risk arising out of it.

Last week, Rajiv Takru, the secretary at the department of financial services - government of India, met the RBI in Mumbai. After the meeting, he said that the central bank report pointed out some "aberrations", and assured action against the erring parties.

saikat.das@network18online.com



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Monnet Ispat Energy raises Rs 175 cr

Written By Unknown on Kamis, 25 April 2013 | 23.25

Monnet Ispat & Energy today said it has raised Rs 175 crore by issuing shares on preferential basis.
    
The decision was taken in the meeting held last month, the company said in a filing to BSE.
    
"Consequent to requisite resolutions having been passed by the shareholders in the extra-ordinary General Meeting Committee of the Board, in its meeting held on March 30, 2013, has made allotment of 1,75,00,000 Cumulative Redeemable Preference Shares of Rs 100 each," the company said.
    
The shares of the company were trading at Rs 200 a piece on BSE, 48 percent high from the previous close.

Also read: Will raise $100m via FCCB; cheer restart of mining: Guj NRE



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Tata Housing announces housing project for senior citizens

Tata Group's realty firm Tata Housing Development Company today announced its foray into housing for senior citizens with launch of first project in Bangalore with an investment of about Rs 70 crore.

The 4.5 acre project 'Riva Residences' will have 187 units where only a person with age of 55 and above can reside. The project is part of Tata Housing's 25 acres township.

"Tata Housing's mission is driven by the desire to delight our customers by providing quality life spaces through continuous innovation. In the same spirit, Riva is our effort to create a special offering for the seniors of our society," Tata Housing MD and CEO Brotin Banerjee said in a statement.

The project has been planned with modern utility-based design facilities, services and ambiance to specially cater to the requirement of its senior residents.

Also read: Housing prices up by avg 20% in Delhi-NCR during Jan-March

When contacted, a company's senior official said that there would be 187 dwelling units in the project dedicated for senior citizen.

The total investment on this project would be Rs 70 crore and expected revenue is about Rs 95 crore, he added.

Asked about the selling price, the official said it would be Rs 45 lakh all inclusive for one bedroom flat with 800 sq ft area and Rs 65 lakh for two-bed room flat having 1,200 sq ft area.

The company plans to develop more housing projects for the senior citizens across the country, he added.

Tata Housing, a subsidiary of Tata Sons, currently has 55 million sq ft of area under various stages of planning and execution and an additional 19 million sq ft in the pipeline. It is offering products ranging from Rs 5 lakh to Rs 14 crore.



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NIIT Technologies signs Rs 344 cr contract with AAI

NIIT Technologies today said it has signed a Rs 344 crore multi-year contract with the Airports Authority of India for implementation of airport operations control centers across 10 cities, in partnership with communication specialist SITA.

"It has signed a multi-year contract with the Airports Authority of India (AAI) for the implementation of airport operations control centers (AOCC), in partnership with SITA, the global air transport IT and communication specialist," the company said in a statement.

The airport management system and resource management system will be implemented and integrated by NIIT Technologies solution which has been supplied by SITA.

Also read: IT will continue to underperform in May series: Thukral
    
The systems and their interfaces will help improve airport management by consolidating multiple sets of information and providing accurate real-time data from just one source, it added.

"We are delighted to have been chosen as a partner by AAI for the complete integration of IT systems enabling efficient utilisation of airport infrastructure at the 10 airports in respective cities," NIIT Technologies President (Asia-Pacific and Middle East) Arvind Mehrotra said.

The project will be executed within the next 15 months at the airports in Chennai, Kolkata, Ahmedabad, Pune, Thiruchirapalli, Thiruvananthapuram, Calicut, Mangalore, Guwahati and Jaipur, it added.



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New SC bench commences hearing Mittal, Ruia's plea

After recusal of two judges, a new Supreme Court bench on Thursday commenced hearing the pleas of Bharti Cellular Ltd CMD Sunil Bharti Mittal and Essar Group promoter Ravi Ruia in a case of alleged irregularities related to allocation of additional 2G spectrum in 2002.

Before Mittal could start his arguments, the CBI and an NGO on Thursday raised preliminary objections that the matter should not be heard by a newly constituted bench comprising Chief Justice Altamas Kabir and Justice S S Nijjar and instead be referred to the same bench on whose direction the probe was conducted leading them to be named as accused in the case.

However, the Chief Justice said the preliminary objections could be considered after hearing Mittal and others who have challenged the 2G trial court's order summoning them as accused.

"Until we know the facts, how can we understand the case. After we hear it, you can give us the preliminary objections," the bench said when CBI counsel KK Venugopal told the Court that the matter be left to the bench headed by Justice G S Singhvi who has been monitoring the probe into the 2G spectrum scam case.

Justice Nijjar was included in the bench as earlier on April 15 and April 18, Justice Vikramajit Sen and Justice AR Dave had recused themselves from hearing the matter without giving any reason.

Senior advocate Harish Salve, appearing for Mittal, opposed the objection of the CBI and said the chargesheet in the case of additional spectrum had been filed and with the filing of the police report (charge sheet), the monitoring had come to an end.

"Once the chargesheet has been filed, the question of monitoring does not arise as it leads to snapping of the link (of the case) with the court(monitoring the probe). The umbilical cord is gone," Salve said.

"Today, that bench is aware of the matter. My case is that this matter should stand or fall on its own merit. This matter has to be argued on its own merit," he said.



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Nalco declares Rs 193.29 cr interim dividend for FY13

Aluminium major Nalco today declared an interim dividend of Rs 193.29 crore for 2012-13, which includes central government's share of Rs 156.68 crore.

The cheque for interim dividend was handed over to Union Mines Minister Dinsha J Patel by NALCO CMD Ansuman Das in New Delhi, a company release said. R H Khwaja, Secretary, Gauri Kumar, Special Secretary, Arun Kumar, Joint Secretary and other senior officials of the Ministry and NALCO were present on the occasion.

Also read: Is a key pillar of India's economy in jeopardy?

It may be noted that after the recent divestment of shares through OFS (Offer for Sale), the union government holds 81.06 percent shares of Nalco. The remaining shares are held by over 66,000 shareholders, including banks, financial institutions and individual shareholders. Since inception, NALCO has paid Rs 4,390.31 crore as dividend, including Rs 3,816.30 crore as share of Government of India, the release added.



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Etihad-Jet ink RoFR clause in share-purchase deal

Abu Dhabi-based Etihad and Jet Airways have signed a right to first refusal (RoFR) as a part of the share-purchase agreement , reports CNBC-TV18, quoting sources. The RoFR is subject to FDI regulations and is also applicable not only to equity but also to assets and international routes.

Sources say that the RoFR also has a lock-in period of six years and Etihad has the right to seek damages on the event of a breach in the contract. The date of the preferential allotment is expected to be announced in a few weeks and subject to regulatory clearances, the deal is expected to be completed in three months time.

Jet Airways on Wednesday signed a deal to sell 27.3 million shares to Etihad for Rs 754.74 per share.



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60 Goa mines would be able to work once ban is lifted: CM

Written By Unknown on Rabu, 24 April 2013 | 23.25

The Goa government today said that atleast 60 out of the 90 mines could be operational in the state once the Supreme Court lifts ban on mining activity. "Of the existing mines, 60 mines would be able to operate while the rest may have issues like proximity to the forest areas and others," Chief Minister Manohar Parrikar told the State Legislative Assembly today.

The Chief Minister was responding to a question tabled by Independent legislator Vijay Sardesai about the renewal of mining leases in the state. Parrikar told the House that the government has renewed one mining lease in the state collecting the stamp duty, while the process is on to renew leases of seven more mines.

"The state has collected Rs 304 crore in the form of stamp duty from the mining leases, which were till then working on deemed renewal clause as former governments never bothered to renew them," the chief minister said. Responding to a question by Sardesai, Parrikar clarified that although the leases have been renewed, the mining operations cannot start unless all the required permissions are in place.

He said that the SC has been hearing the petition on mining activity in the state. The chief minister said that once the activity is allowed and if mining lease is found to be indulged in illegal extraction, the lease will stand cancelled. The mining activity in 90-odd leases in Goa came to a halt since last year after the SC order, pending inquiry by Central Empowered committee on allegations of illegal mining.



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Foreign airways' deals won't save aviation space: Expert

While hailing the Jet-Etihad deal announced on Wednesday, Saroj Datta, former executive director, Jet Airways , says foreign airways will not be able to revive Indian aviation sector.

"(Potential deals taking shape) is impossible to comment on. Jet's deal with Etihad doesn't have any immediate relationship to what other carriers could get. Valuations will also depend on what will happen in the future; how they see the airlines growing and so on and so forth. However, foreign deals will not automatically bring in a lot of money to get over the financial problems of the Indian Aviation industry," adds Datta in an interview to CNBC-TV18.

Another issue one needs to focus on, according to Datta and aviation expert, R Krishnan is enhanced bilateral rights. Datta believes inking the deal based on bilateral rights is not  a good idea as in the recent past the Indian aviation has complained about excess number of seats due to which traffic growth has slowed.

Jet Airways announced a deal with Abu Dhabi-based carrier Etihad Airways for Rs 2,060 crore (roughly USD 379 million) after months of negotiations. Jet has approved the allotment to Etihad of 27.3 million shares at Rs 754.74 each on a preferential basis.

Below is the edited transcript of Datta, Krishnan and Kanu Gohain, Ex-DGCA's interview to CNBC-TV18.

Q: What is your view on this deal, the fact that it has come in at very good valuations and going forward how it could impact the aviation sector?

Datta: It is a very good deal for Jet Airways because Jet will now be able to reduce their debt with the funds they get from Etihad and acquire new aircraft and so on. However, to ink the deal with additional bilateral right is something which should not be resorted to. The aviation industry has in the recent past complained about the excess number of seats in the Indian market and with the surplus capacity that has been operated, traffic growth has become slower.

Therefore, putting in additional seats will be even more difficult and we don't want to see a situation of shares dropping further to levels where airlines are not going to breakeven. It will have consequences not only for Jet and Etihad. It is important to know the plan that they implement and whether it is Abu Dhabi's half for Jet or India's half for Etihad. Also, it is important to know whether Etihad continues operating in the four-five points that they do. All these questions need answers and the pricing could become more difficult because if truly the capacity increases greatly, it is almost inevitable that the prices will drop and airlines will then be in difficulty. Not that they are not today but they will continue to have problems.

Q: What does the valuations tell you about the other impending deals that could get struck, do you see more players coming in on board into the Indian markets into other companies like SpiceJet etc and do you see any of that happening anytime soon within this calendar year itself?

Datta: That is an impossible question to answer because valuations that Jet has been able to get from Etihad for this 24 percent doesn't have any immediate relationship to what other carriers could get. Valuations will also depend on what is the future; what will happen in the future; how do they see the airlines growing and so on and so forth. However, foreign deals will not automatically bring in a lot of money to get over the financial problems of the Indian Aviation industry.



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Etihad confirms takes 24% stake in Jet Airways for $379m

Abu Dhabi's Etihad Airways confirmed it had taken a 24 percent minority stake in Jet Airways for USD 379 million.

The Gulf carrier said in an emailed statement it would subscribe to 27.3 million new shares at Rs 754.74 per share.

Jet said in a brief statement to the stock exchange earlier on Wednesday that its board had approved the allotment to Etihad.

Etihad, which is on an aggressive expansion drive, will also make a $150 million equity investment in Jet's frequent flyer programme and spend $70 million to buy Jet's three pairs of Heathrow slots through the sale and leaseback agreement announced in February.

Jet's majority ownership will remain with Indian nationals and Jet's founder and non-executive chairman Naresh Goyal will hold 51 percent of the airline after the deal, which is subject to shareholder approval, the statement added.

As part of the deal Jet will establish a hub in Abu Dhabi and expand its reach through Etihad Airways' global network.



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Tata Comm partners Mercedes AMG Petronas

Tata Communications today said it has partnered with Mercedes AMG Petronas, to deliver trackside connectivity for the team at all Formula One race locations. With the new partnership, Tata Communications becomes the 'Official Managed Connectivity Supplier' to the team, the company said in a statement.

Tata Communications will work closely with the team to deliver high-speed, high quality and secure trackside connectivity, it said. This will enable the team to transfer vital real-time data from the Silver Arrow cars at any Grand Prix location to its headquarters in the UK, three times faster than at present, the statement said. "Formula One relies on data and the ability to transfer our data from the track back to our factories in Brackley and Brixworth quickly and securely.

The Tata Communications global network will play a key role in the team's performance and our ability to react over the race weekends," Mercedes AMG Petronas Team Principal Ross Brawn said. In February 2012, Tata Communications announced a multi-year technology service and marketing agreement with Formula One Management to deliver connectivity to all Formula One race locations. It also provides global hosting and content delivery services to the official Formula One website Formula1.com.



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Maruti to discuss merging of 7 subsidiaries with itself

Country's largest car maker Maruti Suzuki India today said it will consider amalgamation of the company's seven wholly-owned subsidiaries with itself at the upcoming board meeting.

In a filing to the BSE, the company said the board, in its meeting scheduled to be held on April 26, 2013, shall consider the proposal of amalgamation.

The seven wholly-owned subsidiaries, which are engaged in different businesses are Maruti Insurance Business Agency, Maruti Insurance Agency Services, Maruti Insurance Distribution Services, Maruti Insurance Agency Logistics, Maruti Insurance Agency Solutions, Maruti Insurance Agency Network and Maruti Insurance Broker.

The development comes at a time when MSI has witnessed a change at the top management with Kenichi Ayukawa taking over as the Managing Director and Chief Executive Officer in place of Shinzo Nakanishi, who retired from the post on April 1, 2013 on attaining retirement age.



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Axis Bank appoints KPMG for money laundering inquiry

Moneycontrol Bureau

Axis Bank has appointed KPMG, one of the big four consulting firms to carry out a forensic investigation into the alleged money laundering case. According to Somnath Sengupta, executive director of the bank, the lender has however not suspended its employees who were allegedly involved.

"KPMG is conducting an external investigation into the alleged money laundering case. We have moved 20 employees, who were allegedly involved, to the administration department (from their respective vertical). We have deactivated their employee IDs. All inquiries are already initiated. So far, we have not found any evidence of money laundering in the bank," he told reporters while announcing the bank's fourth quarter earnings .

However, he was not sure of any specific date within which reports of those investigations will appear. The bank has identified 12 branches, which are susceptible to such allegations. These branches are across India.

A month back, Cobrapost.com, an investigative news website, ran a sting operation alleging that three private sector lenders including ICICI Bank , HDFC Bank  and Axis Bank  were involved in money laundering cases. Immediately after that, individual banks came out with press statements giving clarifications and ordering internal and external investigations.

On Tuesday, HDFC Bank said that it had suspended around 21 employees for their alleged involvement in the case. However, it will evaluate their suspension once the final reports of all investigation are out.

"While we had our own internal audit, we have ordered for a forensic investigation by consultancy firm Deloitte. At the same time, the regulator too is doing its own scrutiny. As of now, there is no transaction of this type (money laundering), which any of these audits receives. There is no systemic risk," Paresh Sukthankar, executive director at HDFC Bank, had said on Tuesday.

The Reserve Bank of India (RBI) too discussed the issue with those banks. Currently, it is investigating the matter. RBI deputy governor K C Chakrabarty too hinted at taking corrective measures to fix the problem. However, he ruled out any systemic risk due to it while refusing to divulge details of investigation.

Last week, Rajiv Takru, the secretary at the Department of Financial Services - Government of India, had met RBI in Mumbai. After the meeting, he said that the central bank report pointed out to some "aberrations", and assured action against the erring parties.

saikat.das@network18online.com



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IIFL raises alternate investment fund of Rs 628 crore

Written By Unknown on Selasa, 23 April 2013 | 23.25

Diversified financial company India Infoline on Tuesday said it has received commitments of Rs 628 crore for an alternate investment fund (AIF).

In a statement, the company has claimed that the commitments of Rs 628 crore it has received for the IIFL Income Opportunities Fund is the country's largest AIF fund raising till date.

An AIF invests in non-traditional assets that are not found in conventional investment portfolios. The IIFL Income Opportunities Fund will invest in debt and debt-related instruments issued by 'good corporate groups; secured against quality assets and are structured to provide periodic cash flows, the statement said.

IIFL Wealth Management's chief executive and managing director Karan Bhagat said the management fees for the fund is among the lowest and added that unlike its peers, the company has decided not to charge a performance fees.



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Draw investments by leveraging sectoral competencies: CII

Attracting investments by leveraging sectoral competencies of northern India is key to revive and accelerate economic growth to the desired levels of 8-9 percent, newly elected chairman of industry body CII (Northern Region) Jayant Davar said on Tuesday.

"Revival of economic growth will provide employment avenues to millions leading to accomplishment of overall goal of attaining long term inclusivity, sustainable growth and social development for the states, the region and the country as a whole," Davar said.

He said that to achieve the objective a holistic approach on the part of government, industry, institutions, civil society, media and citizens was needed, wherein each has to continually play its role earnestly both in present and future. He said that the CII-NR has adopted "Reviving Growth in North - Present and Future" as its theme for the current fiscal. "CII's focus in north for 2013-14 will primarily be on six areas namely - strengthening positive governance, enhancing MSME's competitiveness, creating north as a manufacturing hub, ensuring sustainable development and achieving inclusivity through skill development, corporate social responsibility and affirmative action for the benefit of SC/ST," Davar said.

He said that manufacturing and MSMEs were the most critical contributors and vehicles for economic development, job creation and inclusive growth and north has tremendous potential to become the Manufacturing Hub of India. "We just need to brand it as a preferred investment destination for manufacturing. For this, CII has planned seconnd Invest North in August at Delhi," he said. The chairman said that MSMEs constitute about 70 percent of CII's membership.

"We need to handhold MSMEs and provide them expert advice and guidance on aspects like finance, credit, taxation, government schemes and marketing support. CII is launching a dedicated MSME helpdesk comprising a team of professionals at its Chandigarh headquarters," he said.

Davar listed some proposals for MSMEs for which CII would actively engage with the central and state governments and agencies like purchase and price preference policy, implementation of MSMED Act in totality, re-defining the ceiling of micro, small, medium enterprises to enhance their competitiveness. Elaborating the agenda for UP, the chairman said that strong policy advocacy and reforms would continue to remain the cornerstone of work in the state.

"To attain positive governance, CII will work with the UP government to strengthen single-window-clearance agencies and their IT enablement to improve ease of doing business and promote e-governance in the state. CII would also continue to work with the state for speedy reforms in power distribution, GST, APMC, Land Leasing Act," he said.



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India to become third largest market in 3 years: LG

Korean consumer durables major LG expects the Indian market to become its third largest in the world within next three years with an estimated revenue of over Rs 25,000 crore. The company's wholly-owned subsidiary LG Electronics India had clocked a turnover of Rs 16,000 crore in 2012 and the country is currently its fifth biggest market globally.

"I want to be an optimist on turnaround of the Indian economy. Our company's rise is also dependant on the overall economic sentiment here. Still, I believe that India will go up to the top three markets for LG in the next three years," LG Electronics India managing director Soon Kwon said.

With a sales revenue of Rs 16,000 crore, the Indian operations is at present contributing about 6 percent of the global turnover, he added.  When asked how much revenue LG Electronics India expects in the next three years, Kwon said: "It has to be at least Rs 25,000 crore for it to be in the top three markets." 

Without sharing any specific number, he said India's contribution to global revenue will also will increase "much more from 6 percent in the next three years".

Currently, the US is the largest market for LG globally, followed by its home market South Korea, Brazil and Russia.  Talking about exports, Kwon said,

"We are at present exporting to over 70 countries around the globe and it is around 10 percent of our total sales. Exports is growing and we do not want to lose any business opportunity." 

Speaking after unveiling the LG Tech Show-2013, he said the company is expecting its total revenue to grow by 20 percent in 2013, riding mainly on robust performance by its home appliances division.

In order to boost its sales in future, the company is looking to increase the portfolio of goods produced locally at its two Indian plants at Greater Noida in Uttar Pradesh and Ranjangaon in Maharashtra.  "Currently 90 percent of our products are manufactured in India, while the rest comes from different plants located outside. We have plans to increase the localisation in coming months," Kwon said.

The company is currently importing products like front loading washing machines and large frost free refrigerators.  "During the second half of this year, we will start assembly of the front loading washing machines," he said.

Kwon said LG will take a decision by the second half of the year on discontinuation of manufacturing of CRT ( cathode ray tube) television sets.
LG Electronics India today launched a new range of flat panel TVs It also showcased a new TV, which is claimed to be the world's slimmest one, and a pocket photo printer at the Tech Show.

The company, which has around 4,000 people on its rolls, is spending Rs 700 crore this year on marketing and promotional activities. It will be 15 per cent higher than what it spent during 2012. 

Earlier January, Kwon had said the company will put in around Rs 1,500 crore in 2013 on engineering, R&D, developing new products, refreshing equipments, advertising and other promotional activities.



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Suzlon implements USD 1.8 billion debt recast plan

Wind turbine maker Suzlon on Tuesday said it has implemented the USD 1.8 billion (Rs 9,500 crore) debt restructuring package that includes preferential allotment of shares to its lenders.

The completion of the Corporate Debt Restructuring (CDR) package would pave the way for Suzlon to normalise "business operations" and improve overall performance.

Besides lenders' owning shares of Suzlon, the plan would also provide a two-year moratorium on principal and term-debt interest payments.

Suzlon said the CDR package has been fully implemented with the signing of the Master Restructuring Agreement (MRA), and the preferential allotment of equity shares to its lenders.

The debt recast of Rs 9,500 crore (USD 1.8 billion), one of the biggest by an Indian company, was formally approved in January this year by the company's domestic lenders -- a consortium of 19 banks.

"The package covers a 10 year door-to-door back-ended repayment plan; reduction in interest rates by approximately 3 percent; a two year moratorium on principal and term-debt interest payments; enhancement of working capital facilities, and equity allotment to the CDR lenders," the company said in a statement.

As part of the debt recast, Suzlon's promoters have infused Rs 125 crore. According to Suzlon, the first phase of the allotment for 30.24 crore shares at an issuance price of Rs 18.51 per piece to the lenders was completed on Tuesday.

The new shares issued would be subject to a lock-in period of one year from the date of allotment. Suzlon Group Head (Finance) Kirti Vagadia said the "focus is now 100 percent on normalising business operations, driving results from Project Transformation, focusing on the execution of our enviable USD 7 billion orderbook, and delivering a healthy performance in FY 2013-14". In October 2012, Suzlon had announced plans to restructure its debt under CDR mechanism.

The company allotted an additional 1.2 crore equity shares on preferential basis to Samimeru Windfarms Private Ltd in consideration of an amount of Rs 22 crore contributed by Samimeru as a part of the promoter contribution under the CDR package, the statement said.

"The total new allocation takes the share capital base of the company to 209 cr shares, up from 178 cr shares," it added.



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Find if profit motive caused dip in RIL's KG-D6 gas: Govt

With output from Reliance Industries ' eastern offshore KG-D6 fields dropping to an all-time low, a Parliamentary panel today asked the Oil Ministry to find out if the decline was due to commercial consideration or price of gas.

The Standing Committee on Petroleum and Natural Gas, in its report tabled in Parliament, noted with concern that the output from KG-D6 has been declining since 2010-11."From a peak of 80 million standard cubic meters per day, the gas production from KG-D6 has gone down to 16 mmsmd," it said.

Stating that it has not been informed of any valid reason for lower production of gas in KG-D6 block, the panel said it has noted RIL's demand for higher natural gas price."The Committee would strongly urge the Ministry to adequately satisfy itself and convince the nation that the fall in production of natural gas in KG-D6 block is not due to commercial consideration or  price at which the gas is to be sold," the report said.

It asked the ministry to seriously look at the fall in output and take urgent steps to increase production. "The Committee also expects the Ministry to apply the provisions of Production Sharing Contract (PSC) with the contractor (RIL) strictly in letter and spirit in respect of latter's failure to deliver committed production of natural gas from KG-D6," the report said.

RIL produced 39.31 mmscmd of gas from Dhirubhai-1 and 3 (D1&D3), the main gas fields in KG-D6 block, in first year of production 2009-10 as against a target of 27.62. The output in 2010-11 was 48.13 as opposed to a target of 53.40 mmscmd.

Thereafter, production fell to 35.33 mmscmd in 2011-12 as compared to the target of 61.88 mmscmd and to 13.06 mmscmd  presently as against a target of 80 mmscmd. The main reason for the fall was water and sand ingress in wells.

MA oilfield in the same block saw output price to 7.76 mmscmd in 2010-11 before dropping to 5.36 mmscmd this year. The  committee said as part of corrective measures, RIL has been asked to drill more wells and install a compressor to increase the gas recovery.



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SBI launches pre-paid card, expects to garner CASA deposits

Moneycontrol Bureau

India's largest lender State Bank of India  (SBI) on Tuesday launched a pre-paid card christened as "SBI Smart Payout Card" for students, employees, workers, and contract labourers. Customers don't need to open any bank account to subscribe to these cards.

"The exercise is aimed at financial inclusion. It will help garner low cost current and savings account (CASA) deposits. Using such cards customers can transfer money from one place to the other. Especially for contract labourers who work in urban areas, it is very useful," said R K Saraf, deputy managing director Corporate Strategies & New Businesses, SBI.

According to Saraf, the KYC (Know Your customer) norms are also relaxed here. This will enable the product to reach its target audience.

For example, a customer needs a basic proof of identification. Any KYC compliant SBI customer can introduce a new customer. An employer too can endorse its employee's application. These cards can be used in all existing SBI group ATMs and 65,000 points of sales (PoS) at free of cost.

The pre-paid card bears a charge of Rs 9-20 per transaction in case of other banks' ATMs. The pre-paid card can be loaded with Rs 10,000 at a time with a monthly cap of Rs 25,000. SBI will charge Rs 102 as fees for issuing the card with a validity of 10 years.

"We will abide by the standard RBI norms on KYC. However, we will not impose any stringent norms. We are also in talks with companies (SMEs) to sell cards among their employees. Companies can even give salaries via such cards," Saraf told reporters here in Mumbai.

Currently SBI has a base of 11 crore debit cards while the base expands to 13.6 crore for the entire SBI group. On standalone basis, SBI is adding around 15-16 lakh debit cards every month. At group level, it is about 20 lakh.

saikat.das@network18online.com



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Steel production up 6.5% in March: World Steel Association

Written By Unknown on Senin, 22 April 2013 | 23.25

Domestic steel production grew by 6.5 per cent in March -- the fastest pace of growth in the last three months -- to 6.86 million tonnes (MT). The country, world's fourth largest steel producer, had produced 6.44 MT in March, 2012, industry body World Steel Association said in a release today.

Steel production grew by 3.8 per cent in January while in February it dropped by 0.5 per cent over the year ago period. India produced 6.6 MT steel in January and 6.2 MT in February, 2013.

Meanwhile, global steel production grew by one per cent in March to stand at 134.88 MT against 133.49 MT a year earlier. China produced nearly half of the global production at 66.29 MT during the month, clocking 6.6 per cent growth over the same month last year, the World Steel Association figures revealed.

During the January-March period of current year, global steel production went up by 2.3 per cent to 388.696 MT from 380.058 MT in the corresponding period a year ago.

Also read: Angel Broking's top picks from metal & mining sector



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ABB to acquire US based Power-One for over USD 1 bn

Power and automation technology firm ABB today said it will acquire US-based solar energy company Power-One for over USD 1 billion (around Rs 5,400 crore) to become a global leader in solar photo-voltaic inverters.

"ABB and Power-One today announced that their respective boards have agreed to a transaction in which ABB will acquire Power-One for USD 6.35 per share in cash or USD 1,028 million equity value, which includes Power-One's net cash of USD 266 million," the company said in a statement.

The transaction would position ABB as a leading global supplier of solar photo-voltaic inverters to a market forecast to grow by more than 10 per cent per year until 2021, the statement said.

This rapid growth is being driven by rising energy demand, especially in emerging markets, rising electricity prices and declining costs, it said.

"The combination of Power-One and ABB is fully in line with our 2015 strategy and would create a global player with the scale to compete successfully and create value for customers, employees and shareholders," ABB Chief Executive Officer Joe Hogan said.

ABB's leading portfolio in power and automation, global footprint and service organisation makes it a natural player in solar photo-voltaic inverters, he said.

"For many years ABB has brought its solutions to the solar photo-voltaic inverters industry and is on track to generate sales of more than US 100 million of these products in 2013," he added.



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Maran stake rises to 22.05% in SpiceJet

SpiceJet on Monday said its promoter Kalanithi Maran's stake in the no-frills airline has increased by nearly 6 percent to 22.05 percent due to allotment of equity shares following conversion of convertible debentures. Maran's stake has risen from 16.27 percent to 22.05 percent, SpiceJet said in a regulatory filing to the stock exchange.

The overall holding of promoters in the airline also climbed to 52.14 percent from 48.59 per cent at the end of March quarter. The company has allotted 35,931,453 equity shares to Maran following conversion of 13 million Unsecured Compulsorily Convertible Debentures for an aggregate value of Rs 130 crore.

SpiceJet had allotted these equity shares of Rs 10 each on April 18 to Maran pursuant to conversion of Unsecured Compulsorily Convertible Debentures of the face value of Rs 100 each, at a conversion price of Rs 36.18 per equity share.

The airline currently operates more than 350 daily flights to over 50 Indian cities and eight international destinations.



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CCI clears 13 power projects, 25 oil blocks

Moneycontrol Bureau

Pushing the government's reform agenda further, the cabinet committee on investment (CCI) today cleared 13 power projects and 25 oil blocks, which will provide much needed to boost to the struggling power and oil and gas sectors. 

Out of 20 projects, CCI cleared 13 power projects worth Rs 33,000 crore, which were stuck due to various reasons including environmental concerns. About 31 oil and gas blocks worth USD 2.7 billion were stuck, of which CCI gave clearance to 25 oil blocks worth 461 crore. Of course, 16 were cleared with normal condition, 9 with special conditions and six blocks did not get clearance. 

Going further, the government further said that investment worth $1.9 will be undertaken for exploration and production (E&P) activities over the next five years.

Clearance of these blocks will come as a huge respite for upstream companies like ONGC and Reliance Industries as it will help them to go ahead with explorations.  

"Exploration and production (E&P) players those who had already signed the production sharing contract (PSC), but they have been waiting for the government approval - majority of these players are in Bay of Bengal, a few also in the West Coast, which is a good development. … Now they can atleast with the approvals in place they would be able to go ahead with the preparations like hiring rigs and hiring equipments and giving contracts and sub-contracts," Narendra Taneja, Energy Expert told CNBC-TV18.

He further added that this will also send out a good message to overseas E&P players looking to invest in India.

However, the Cabinet Committee on Economic Affairs (CCEA) once again delayed decision on coal pool pricing mechanism for imported coal by two weeks. Sources informed that a Group of Ministers headed by either P Chidambaram or Sharad Power will be constituted to look in to the coal pool pricing mechanism. The GoM will finalize the proposal on the coal pool pricing mechanism within a week.



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CCI's 25 oil block clearances to benefit Reliance, ONGC

After clearing five "No-Go" areas for oil and gas exploration, the Cabinet Committee on Investment (CCI) today eased stringent conditions imposed by Defence Ministry on another 25 blocks, freeing USD 4.61 billion investments.

"The CCI at its meeting held today cleared 25 exploration and production blocks for continued exploration of oil and gas, out of 31 blocks where work had been stopped on account of security restrictions imposed by Ministry of Defence," an official statement said here.

While the statement did not give break-up of the blocks cleared, the 31 blocks where restrictive conditions were imposed included 13 of Reliance Industries -BP combine, 15 of state-owned Oil and Natural Gas Corp ( ONGC ) or its lead consortium, two blocks of Santos of Australia and one block of Cairn India -led consortium.

For these blocks, the Defence ministry had imposed stringent conditions like asking companies not to locate any pipelines or structures on sea surface in the blocks cleared for exploration and production activities.

Subsea/submerged permanent structures, if any, were to be located more than 100 metres below sea surface or outside the Defence Research and Development Organisation (DRDO)/Indian Air Force (IAF) danger zone area (on sea surface) or Naval exercise areas.

The oil industry saw these conditions as impractical and after discussions, the conditions have been substantially diluted now.

"Out of 31 blocks, 9 blocks have been fully cleared and 16 blocks have been cleared with specific conditions. Due to clearances given at this meeting, investment already made to the extent of USD 2.71 billion will be put to use and further investment to the extent of USD 1.9 billion will be made in the exploration activities in the next 3-5 years," it said.



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CCEA rejects coal pool pricing scheme for now

The government today buried a proposal to pool prices of imported and domestic coal to make the fuel affordable to new power plants, owing to sharp opposition to the scheme.

"Price pooling is out of the window," a source attending the Cabinet Committee on Economic Affairs on the issue said here.

While no formal reason was given for burying the proposal, the source said power projects commissioned before 2009 will continue to get coal at pre-fixed (below market) rates.

New projects commissioned after 2009 largely have a cost-plus mechanism for calculation of electricity tariff and so any higher imported cost of coal will be passed through to the consumers, he said.

Private power producers wanted the sub-market domestic coal prices to be averaged out with international price of imported coal so as to have a uniform fuel price and remove the disadvantage new projects faced as compared to older ones. The pooling was being opposed for various reasons by older power plants and domestic coal producers.

"For the remaining 24,000 MW projects it is work in progress...remaining being which have tariff based linkages, which have no PPAs or which have tapering linkages," the source said.

The committee, which was looking into the issue, will come back to CCEA (Cabinet Committee of Economic Affairs), he added.



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No scam in allocation of coal blocks: Jaiswal

Written By Unknown on Minggu, 21 April 2013 | 23.25

There was no irregularity in the allocation of coal blocks and the Opposition is unnecessarily creating an uproar over the matter, Union Coal Minister Sriprakash Jaiswal today said.

Jaiswal, who was here to take part in a protest against power crisis, said the matter is already under CBI investigation.

On the issue of Congress nominee for PM post, Jaiswal said the decision in this regard is always taken by party's top leadership and there is no point discussing these things now. Jaiswal further said the JPC report on 2G scam has established the fact that both the Prime Minister and Finance Minister had no role in the entire matter.



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'India-EU FTA may lead to Euro cars flooding in Indian mkt'

The proposed India-EU free trade agreement may pave a way for some European car majors to flood the Indian automobile market with their vehicles, a senior official of Honda Cars India Ltd (HCIL) said here today.

The Indian government should create "a level playing field" for the auto industry in the country, Honda Cars India Ltd (Marketing and Sales) Senior Vice-President Jnaneswar Sen said. "This kind of FTA is going to remove that level playing field...Europe (automobile market) is not growing. It is only de-growing. It is very easy for some of them to sell the same cars here," he said.

Speaking to reporters after the launch of Honda's sedan 'Amaze' here for Andhra Pradesh market, Sen said, "This (FTA) is going to impact everyone in terms of investment, employment generation. All we want is a level playing field." "It is not just car manufacturers, but also others, such as suppliers of spare parts, who will be affected by the (proposed) FTA," he added.

Speaking on 'Amaze' he said, "With the launch of 'Amaze', equipped with both petrol and diesel technologies, we are expanding and reaching out to new customer segments." EU is demanding heavy duty cuts to ensure sale of its automobiles. However, the auto industry in India is strongly opposed to duty cut in the sector. Notwithstanding the differences resulting in delay in inking of India-EU free trade agreement, Commerce and Industry Minister Anand Sharma had yesterday said the negotiations are progressing "very well".



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Audi braces for stagnation in Europe: CEO

Germany's Audi is bracing for long stagnation in Europe, though trusts that continued growth in China will help offset slumping auto demand in its core region, its CEO said on Saturday.

It will take at least three to five years until European countries will have fully overcome their debt problems, Rupert Stadler told reporters at the Shanghai auto show.

By contrast, China's passenger car market could in future grow to 20 or 25 million autos per year from about 12 or 13 million, also boosting business of premium manufacturers, the CEO said.

"Audi keeps growing," Stadler said, declining to be more specific. The VW-owned brand will "soon" increase dealerships in the world's biggest car market to about 500 from 300, sales chief Luca der Meo added.



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New legal strains in Kingfisher jet repossession row

Indian airports have claimed international law must take a back seat to local courts in a row with foreign aircraft leasing firms over the future of grounded Kingfisher Airlines jets, according to government minutes seen by Reuters.

The stance taken by Mumbai and Delhi airports could further complicate the leasing firms' attempts to recover jets supplied to Kingfisher, as other creditors also try to recoup some of the USD 2.5 billion of debt left when the airline, set up by liquor baron Vijay Mallya, halted flights in October.

That in turn could affect leasing firms' willingness to deal with Indian airlines in future, or at least make financing for local carriers more expensive, aviation analysts said.

Aircraft leasing firms like ILFC are at the heart of the USD 100 billion-a-year passenger jet industry. Their role has grown dramatically as cash-pinched airlines try to contain their capital spending, and experts say lessors now account for about 40 percent of the modern jetliner fleet.

An international treaty aimed at making it attractive for leasing firms to invest offers lessors similar rights to repossess unpaid jets as in the United States.

The treaty, the Cape Town Convention, is a key part of efforts to harmonize trade with developing countries that now dominate demand for Airbus or Boeing planes.

However, efforts by foreign lessors to repossess over a dozen Airbus jets parked at airports around India have been hampered by disputes over competing claims and confusion over the power of international agreements to trump local courts.

Both lessors and airports are owed money by Kingfisher, along with staff, tax authorities and other creditors. Lessors say the jets do not belong to Kingfisher and can't be touched.

At the March 26 meeting attended by airport officials, as well as government and tax authorities, it was agreed that jets already de-registered by India must be released, according to minutes of the gathering held at the aviation ministry.

"The concerned airport operators shall release all the de-registered aircraft to the respective owners/lessors immediately so that these aircraft can fly out of the country," the document said.

Despite this, lessors led by US-based ILFC have so far said most of the jets leased to Kingfisher remain stranded.

The chairman of Airports Authority of India, VP Agrawal, sought to defuse the row by announcing after the meeting that India is bound by international convention to let the planes go.

However, representatives of Mumbai and Delhi airports argued inside the talks that Indian laws prevailed over international laws, which meant they could not ignore a "stay" or freeze order from the Delhi High Court, according to the minutes.

Officials at the airports could not be reached for comment.

Bertrand Grabowski, a member of the board of managing directors at Germany's DVB, a leading transport lender, said it was not clear that the international treaty would be upheld.

"Some of us, including DVB, are still sceptical that the Cape Town Convention will completely change the situation in India because courts tend to read the law so that Indian law prevails," he said. "We will need a few more months to evaluate carefully the situation."

Regulator backing

Arun Mishra, Director General of Civil Aviation, pledged to help ensure that aircraft financing in India was not disrupted.

"The government of India is fully committed to protecting the interest of the lessors so that the leasing business is not hampered in India," Mishra told Reuters.

Mishra said the regulator had recently de-registered 19 of Kingfisher's red-liveried jets, once famed for lavish but costly onboard service, and a total of 53 since 2009.

According to the minutes, however, airports convinced regulators at the March 26 meeting to consult them before de-registering any further Kingfisher jets. Two applications to de-register planes are still pending, according to the document.

Asked about the move, Mishra said it would not introduce any new conditions for de-registering the planes.

"It is not a regular thing; just that we need to be aware of all the facts. There are court cases going on between the lessors and airport operators. But we are not a party to these, so we are unaware of the facts," he told Reuters.

When Hungary's Malev went bankrupt last year, much of its fleet turned up overnight in Ireland, a traditional hub for air finance, after lessors quickly snapped up their planes.

The aviation industry argues that access to competitive finance relies in part on making rapid repossessions possible.



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