TOKYO, Dec 28: The Tsunamis that ravaged the coasts of the Indian Ocean inflicted at least hundreds of millions of.......more

ICICI bank to disburse
Rs 7,000 cr agri credit
by March 2005

MUMBAI, Dec 28: ICICI bank is likely to disburse Rs 7,000 crore as agricultural lending in 2004-05 as against Rs 4,000......more

Essar to invest in steel
project in Bengal:
Buddhadeb

KOLKATA, Dec 28: Essar group has evinced interest to invest in a steel project in West Bengal....more

ONGC aims to start
commercial production
of CBM by March, ‘07

KOLKATA, Dec 28: Oil and Natural Gas Corp (ONGC) aims to start commercial production of Coal-Bed Methane (CBM).......more

NEW DELHI, Dec 28: The dynamics of corporate warfare is no longer confined to the boundaries of markets as the year.........more

IOC to give gail 10 pc
in Iran liquefaction plant

NEW DELHI, Dec 28: Indian oil corp will give gas utility GAIL (India) Ltd a 10 per cent stake in the liquefaction plant it.......more

India should transit to
lower import duty
structure: Montek

NEW DELHI, Dec 28: Planning Commission deputy Chairman Montek Singh Ahluwalia today made out a strong case.....more

‘Satyam has potential
to grow to 50,000 empl
in few years’

NEW DELHI, Dec 28: Nyse-listed Satyam computers today said the company has the potential to grow from its current.......more

Asian economy seen wounded but not
sunk by Tsunami tragedy

TOKYO, Dec 28: The Tsunamis that ravaged the coasts of the Indian Ocean inflicted at least hundreds of millions of dollars in damage and will likely force a re-think of 2005 spending priorities, economists said today.

The killer waves triggered by the world’s most powerful earthquake in four decades were particularly brutal to tourism and fishing, two of the most lucrative industries for southern Asia.

But there was relief that, save for some damage in Male, the Maldives capital, the tragedy mostly spared the major cities, where national infrastructure could have been torn apart and the death toll would have been even more catastrophic.

"First and foremost, this was a human tragedy," said Glenn Maguire, chief economist for Asia and Australasia at french investment bank societe generale.

"With the enormous displacement of people, which has not been of this magnitude in some time, there will be a serious relaxation of fiscal policy, not just for those countries directly affected but those that will open up their aid budgets," he said.

"The economic impact of it will certainly be large but it should not be enough to derail the momentum of the region in 2005."

Malaysia’s state public order and traffic chief Lee Shuan Fat put losses in his country’s worst-hit northern state of Kedah at 5.61 million dollars.

Malaysian fisheries director-general Junaidi Che Ayub said initial figures showed about 1,000 fishermen in the Penang area were affected by the Tsunami and that damage to the industry would be "significant."

"We are only beginning to grasp the magnitude of the disaster in terms of loss of life, material damage and economic impact across the region," World Bank president James Wolfensohn said.

Experts believe that in the long term, the worst-hit nations in raw economic terms may be Thailand and Sri Lanka given the damage to their important and growing tourism industries.

Chua Hak Bin, senior regional economist at DBS bank in Singapore, estimated damage in Thailand could be in the region of 100 million dollars, meaning 0.1 per cent of its economic growth would be shaved off.

But considering the massive loss of life, including at Thailand’s top resort Phuket, the economic impact is "quite limited," Chua said.

"This is sort of a freak accident," Chua said. "It hasn’t hit the critical infrastructure of the cities."

Economists said the tragedy was unlikely to discourage either tourists or business travellers permanently as few people other than the most traumatised are fearing a new round of Tsunamis.

"In the long-run, these natural disasters are viewed as a one-off, not the same way terrorist attacks are," Maguire said.

Noguchi predicted the impact to Asia’s economy would be smaller than during the 2003 outbreak of SARS, which killed almost 800 people, mostly in Hong Kong and China. (AFP)

ICICI bank to disburse Rs 7,000 cr agri
credit by March 2005

MUMBAI, Dec 28: ICICI bank is likely to disburse Rs 7,000 crore as agricultural lending in 2004-05 as against Rs 4,000 crore in the last fiscal.

"ICICI bank will meet targets of agri lending this year. The total disbursement is likely to reach Rs 7,000 crore as against Rs 4,000 crore in the last fiscal", bank’s managing director and CEO K V Kamath said here today.

Agricultural financing should not be driven by regulatory obligations as agri lending was a profitable proposition, he said at a CII conference on agriculture.

Kamath said agri credit is a mechanism, like any other lending, where a reasonable return can be expected and a dedicated agro group has been set up by ICICI bank to study the credit delivery system.

"The increased intermediation cost and risks involved are pushing up the cost of agri lending for banks. We need to reduce the number of intermediaries and scale up agriculture insurance products to lower the cost elements of agri credit", he said.

On a query on banks hesitating to finance innovative agricultural projects, he said such projects cannot be financed by debt capital but should be by way of venture capital.

"The bank is working out options of venture capital and these innovative projects should be fashioned in such a way as to convince venture capital companies," he added. (PTI)

Essar to invest in steel project in Bengal: Buddhadeb

KOLKATA, Dec 28: Essar group has evinced interest to invest in a steel project in West Bengal, Chief Minister Buddhadeb Bhattacharjee said today.

The Essar group, Mr Bhattacharjee said, conveyed its interest for the project during a meeting with him last week.

Essar, he said, will be taking Coal Bed Methane (CBM) gas from Ranigunj for the project.

Sources said the specifics for the project and the amount of investment is being worked out.

Mr Bhatterjee, who was speaking at the 150th annual general meeting of Bengal Chamber of Commerce, said the Tata’s, who have evinced interest for a automobile unit in the state, also want to set up power generation projects in the state.

The Tata’s, he said, has already sent a technical team to examine the feasibility of the automobile project.

However, he said, the State Government is examining the legal aspects for such private sector investments in the power sector before giving the go-ahead order.

The State Government, he said, has adopted a look east policy and has also finalised a project for constructing a new bridge between Raichak and Kakragachi with Japanese funding. The bridge will minimise the time for going to Haldia.

The project has already got Government of India approval and waiting for the approval from the Japanese side, he said.

The State Government, he said, has also approached the Centre with a feasibility study to expand metro railway services from Rajarhat to Ramrajatala.

The State Government, he said, has also sent a proposal to Government of India’s Tourism Department for development of tourism potential in the Dooars and Terai region.

The state, he said, is looking for an investor and consultant to develop the Sunderbans.

He said the State Government will complete restructuring of 16 public sector units under it, including Webel and great eastern hotel by March 2005 with the help of Central fund.

Work for restructuring some transport corporations will be undertaken after that, he said.

He said the State Government will meet Commerce Minister Kamal Nath during his visit to Kolkata on January 11 and urge him to help in setting up cold storages in the state and to come out with a modernisation package for the tea gardens. (UNI)

ONGC aims to start commercial production
of CBM by March, ‘07

KOLKATA, Dec 28: Oil and Natural Gas Corp (ONGC) aims to start commercial production of Coal-Bed Methane (CBM) by March, 2007 and is planning to outsource services from overseas firms for CBM production in six blocks located in the Bengal basin.

"The company has targeted to start commercial production of CBM in Jharia block by March, 2007," A K Biswas, general manager (basin manager, CBM-BPM), told reporters here today.

The company, which has six CBM blocks under the Bengal basin, has also planned to give service contract to overseas firms for production of CBM, he said.

"We are considering to give service contract for all the 30 wells in six blocks. The tendering process will start in January next,’ Biswas said.

Stating that the rate of flow of CBM was very low, he said ONGC wanted to avail the ‘multi-lateral, multi-branch drilling technology’ through the service contractor ``as this technology increases both the production rate and overall recovery’’.

The 30 wells were situated in six blocks - Raniganj (West Bengal), Bokaro, Jharia, north Karanpura, north Karanpura (west) and south Karanpura (all five located in Jharkhand).

Besides, the company also had three CBM blocks in Madhya Pradesh (Satpura), Gujarat (barmer) and Maharashtra (Vidarbha).

"One of these three blocks may also be given under the service contract to start commercial production, which will start with Jharia and be taken up in others gradually," he said.

Asked about viability of CBM projects, Biswas said countries like US, Australia, China and Canada had successfully ventured into the field and India, having large estimated reserves of CBM, should be able to follow suit.

But, cost control from all possible avenues was a pre-requisite to make the CBM production economically viable, he said.

For the CBM venture, ONGC had equity partnership with Coal India Limited in Jharia and Ranigunj blocks while Indian Oil Corporation had 20 per cent stake in Bokaro and north Karanpura blocks.

Meanwhile, the company has decided to commence exploratory work at Bokaro by next ten days, Biswas said.

He said the Damodar Valley Corporation and West Bengal Infrastructure Development Corporation have evinced interest in the CBM projects for availing the gas supply from the blocks located in the eastern zone. (PTI)

2004 - coporate battle scene shifts from market to court

NEW DELHI, Dec 28: The dynamics of corporate warfare is no longer confined to the boundaries of markets as the year 2004 saw courts become the preferred place to settle disputes over money and economic policies of Government.

The much talked about Birla-Lodha fight over the Rs 5,000 crore M P Birla group, the fight for control over liquor company Herbertsons Ltd between Vijay Mallya’s UB group on one side and the Chhabria group on the other, the contentious issue pertaining to ban on sale of Gutka and the Rs 800 crore excise demand on Tobacco Giant ITC - all ended up in courts.

While the Birla-Lodha fight is still making rounds of the lower courts and the High Court in West Bengal, the Supreme Court’s jurisidiction was invoked in many important economic and corporate issues.

The Supreme Court encouraged an amicable solution between Mallya and Chhabrias but Reliance Infocomm was not so lucky as it was asked by the Apex Court to pay up the entire demand of Rs 182.7 crores raised by Bharat Sanchar Nigam Ltd, which alleged the private service provider had caused a revenue loss to it by re-routing international calls as local ones.

After directing the Reliance group company to pay up the money, the Apex Court referred the matter back to the High Court for adjudication of the dispute between the two.

The multi-tier litigation over disputes on several fronts between the Beleagured Dabhol Power Corporation on the one hand and Maharashtra State Electricity Board (MSEB) and Maharashtra Electricity Regulatory Commission (MERC) on the other took a lot of time of the Apex Court.

On a petition filed by Centre for Indian Trade Unions (CITU), the Apex Court decided to examine in entirety the decade-old issue pertaining to the validity of the Power Purchase Agreement (PPA) between MSEB and DPC.

What came as a major relief to the financial institutions reeling under the heavy burden of Non-Performing Assets (NPA) was the Supreme Court’s ruling upholding the constitutional validity of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interests (SARFAESI) Act, 2002.

However, the court struck down the clause making it mandatory for the companies defaulting in repayment of loans to pre-deposit 75 per cent of the defaulted amount with the court before challenging an order under SARFAESI Act by the fis ordering attachment of the assets for sale to recover the non-recovered loan.

The court also reserved its verdict on the constitutional validity of the Competition Commission Act, enacted in accordance with the WTO mandate. It had taken strong exception to the appointment of a bureaucrat as the head of the Commission which had vast adjudicatory powers and, worse, its decrees were to be enforced by the High Court.

The Government agreed to make changes but till the last call did not carry them out making the court to hear parties on merits of the issue.

Sugar mills, which faced financial crunch with politics over cane price, suffered a setback as the Supreme Court upheld the power of the State Governments to fix cane price.

The court ruled that a State Government could provide for State Advised Price (SAP) on the purchase of sugarcane by mills over and above the Statutory Minimum Price (SMP) fixed by the Centre under the Sugarcane Control Order, 1966.

Carrying the impression that amendments to the patents act could fuel a multi-fold increase in the price of medicines including the life saving drugs, a petition was filed in the supreme court challenging the amendments alleging they would restrict grant of production licence to pharma companies. The court agreed to examine the issue and issued notice to the Union Government.

The ban imposed on the sale of Gutkas - a proven cause for many diseases - by Governments of Maharashtra and Andhra Pradesh came to be undone as the Supreme Court set aside the State Government notifications; saying the State Legislature had no power to enact the law on the issue, which fell squarely in the domain of the Centre.

To add to the drama of corporate battles in the court rooms, an unassuming counsel of Tobacco Giant ITC took away the original copy of the judgement pronounced by the court quashing a whopping Rs 803 crore excise demand.

The court was furious to say the least and withdrew its judgement within minutes of pronouncing it, sending chills down the spine of ITC. Within an hour the judgement was found. The very next day the court pronounced the very same verdict without any fuss. (PTI)

IOC to give gail 10 pc in Iran liquefaction plant

NEW DELHI, Dec 28: Indian oil corp will give gas utility GAIL (India) Ltd a 10 per cent stake in the liquefaction plant it plans to set up in Iran for export of LNG produced from gigantic South Pars Gas Field to India.

IOC, along with Iranian firm petropars, will develop one of the 28 phases of South Pars Gas field, convert gas into liquid form at the liquefaction plant and ship liquefied natural gas to India and other countries.

"GAIL will be given 10 per cent stake in the liquefaction plant in lieu of its offtake of one-third of 9 million tonnes of LNG planned to be produced from 2008-09," a top IOC official said.

IOC will hold 40 per cent stake in the development of the gas field with the remaining being with operator petropars. In the liquefication plant, IOC would have 60 per cent and petropars the remaining 40 per cent stake. Of IOC’s 60 per cent stake, GAIL is being given 10 per cent.

This follows GAIL chief Proshanto Banerjee lodging a protest with the Ministry of Petroleum over IOC going solo in the project. "In the case of Iran, there was a clear understanding that every project was to be done in a consortium. IOC, ONGC and GAIL were to take consortium approach for oil and gas exploration and production, petrochemicals and LNG projects," Banerjee said.

IOC and Petropars will submit a plan to develop phase-12 of South Pars Gas field to National Iranian Oil Co (NIOC) by February 28.

Petropars is a subsidiary of NIOC, which owns the 500 sq mile South Pars Field that is estimated to hold 436 trillion cubic feet of gas reserves.

The official said IOC is to lift 4.5 million tonnes of LNG for 25 years for marketing in India. The balance shall be delivered to NIOC where ioc will have the first right of marketing, which otherwise would be marketed by NIOC itself.

"GAIL would be given 3 million tonnes LNG from NIOC’s share," he said.

Development of phase 12 and tied-up liquefaction facilities may cost over 3 billion dollars and will take four years to complete.

Banerjee had written to Petroleum Secretary S C Tripathi asking "the ministry to direct IOC to adhere to the consortium approach and the opportunity with Petropars should be pursued by all four state-owned oil and gas companies with their roles and responsibilities clearly worked out."

IOC’s South Pars deal is a separate negotiation from Yadavaran oil field for which OVL is trying for 20 per cent equity in lieu of India buying 5 million tonnes per annum of LNG.

Petropars is a subsidiary of National Iranian Oil Co. NIOC has 60 per cent stake in Petropars and Iran’s IDRO (Industrial Development and Renovation Organisation) Pension Fund the remaining 40 per cent. (PTI)

NEW DELHI, Dec 28: Planning Commission deputy Chairman Montek Singh Ahluwalia today made out a strong case for general reduction of import duties in budget 2005-06, saying this will improve the efficiency of the industry and would be constistent with the Free Trade Area(FTA) agreements that India has signed or those which are in the offing.

The general rate of duty must come down. While we must go faster in some areas, there is need for a general transition to lower duties , Dr Ahluwalia said participating in a special interactive sesssion with businessmen.

The session was organsied by the Federation of Indian Chambers of Commerce and Industry (FICCI) as part of its 77th Annual General Meeting(AGM). The objective of the session was to deliberate upon the ground level policy processes affecting business and to provide an opportunity to captains of industry to offer constructive suggestions.

He said India still has one of the highest rate of duties and while it has reduced customs tariffs over the past few years, other countries have followed suit.

Dr Ahluwalia clarified that there was no move on the part of the Government to expand controls on the phamaceutical industry. He said media reports to the contrary were incorrect. There has to be a rational range of controls. Drug prices, however,need to be monitored , he said.

Responding to issues relating to the fertiliser sector, Dr Ahluwalia said the feratiliser industry was completely mucked up . He said there were irrational controls and there was a case for rationalisation of the price structure.

Dr Ahluwalia said there was also a case for rationalising the subsidies given to the fertiliser industry. The efficiency of the phosphatic fertiliser industry leaves much to be desired.

Saying that the fertiliser industry holds the key to rapid agricultural growth, Dr Ahluwalia said there were several distortions in agriculture which need to be corrected. Besides, problems such as the water level need to be addressed.

Talking about labour reforms, Dr Ahluwalia said many State Governments were keen to provide greater flexibility in this regard in special industrial zones.

The well known economist said there was need for upgrading of ITI’s and asked industry to come out with concrete proposals of how these could be upgraded. There was need for public-private partnership in this regard.

Another area where there could be greater public-private partnership relates to R and D activities. The infant industry argument was valid for joint promotion of R and D. This was also true in view of the opening up of the Indian economy.

He said particular industries having problem with taxation should not present their case with the detailed duty structure they would like to have. Instead, they should indicate to the Government on which slab of the excise duty structure they would like to be.

There is need for moving from three slabs of excise duties to two and ultimately to one.

Dr Ahluwalia welcomed the upbeat mood of the industry and its response to policy. (UNI)

‘Satyam has potential to grow to 50,000 empl in few years’

NEW DELHI, Dec 28: Nyse-listed Satyam computers today said the company has the potential to grow from its current employee strength of 20,000 to 50,000 in a few years.

"There is a significant growth potential in the market for companies like Satyam. In a few years’ time, we have the potential to move from 20,000 to 50,000 employees", S Ramalingam Raju, CMD, Satyam computers, said at FICCI AGM here.

However, this would depend on how the market behaves and the opportunities available.

"If the industry continues to grow at the current rate of 30-31 per cent every year, exports of IT services alone will touch one trillion dollars in the next 15-20 years," he said.

Hyderabad-based Satyam had recently opened a development centre in Hungary and a marketing office in Brazil. It had also announced a sponsored ads issue of USD 360 million.

He said India should leverage its lead in services sector to boost its manufacturing sector like China which has asked its companies to set up production units in the country itself instead of outsourcing. (PTI)

SBI group clocks about 25 pc growth credit demand

MUMBAI, Dec 28: State Bank of India Chairman A K Purwar today said SBI group has posted about 25 per cent growth of credit demand till date and its lending rates will remain stable in the short run.

"We have seen a year-on-year growth of 25 per cent in credit demand for the group," Purwar told reporters after inauguarating State Bank of Indore’s Commercial Branch here.

This (rise in credit demand) was one of the reasons for relatively tight liquidity conditions in the money market, the SBI Chief said.

Asked about revision in the interest rate, he said the bank has recently revised rates on deposit and some lending products upwards and in the backdrop of some easing in inflation, they (rates) would remain stable in short run.

On the SBI group’s infotech ventures, Purwar said it would be a joint venture company slated to be in place before March 2005.

SBI has received approval from the Government and Reserve Bank of India for it venture and it had zeroed on joint venture partner, he said.

But he did not name the partner nor stated if SBI would hold majority in the proposed it JV.

The bank had sought approval from the Government and RBI for the proposed general insurance venture, he said.

Referring to merger of group entities, SBI Chief said the virtual merger is what we are working on through common core banking platform, accounting and coordination for high value transactions. (PTI)

Cold wave intensifies after fresh snowfall in Valley

SRINAGAR, Dec 28: Cold wave intensified in Jammu and Kashmir as the Valley experienced fresh snowfall, as mercury dipped to 0.5 degree celsius here this morning.

Kupwara and Baramulla districts of north Kashmir witnessed heavy snowfall, while it was mild in Srinagar and south Kashmir areas, official sources said today.

Residents of Srinagar woke up to an intermittent light snowfall in the morning.

A five-inch thick blanket of snow covered the famous Ski Resort of Gulmarg in Baramulla district where it was snowing well past noon today, they said.

Gulmarg, 55 kms from here, is hosting winter games and the fresh snowfall has brought cheers to the faces of the participants camping there for the past week.

The fresh snowfall has, however, snapped Gulmarg from rest of the Valley as the road leading to the hill resort was buried under snow and efforts were on to clear the road, the sources said.

Areas on the periphery of Gulmarg were covered under one feet of snow, while the Tangmarg also witnessed five inches of snow till this afternoon.

The entire Kupwara district was covered by a snow blanket with six inches to two feet of snow recorded at several places, disrupting traffic and power supply in the border district, the sources said.

Many a roads leading to the forward areas of the district were closed in view of the heavy snowfall, they said adding the infiltration routes along the Line of Control also got blocked by the snow.

Gurez in Bandipora sector of Baramulla district was cut off from the region by heavy snowfall, the sources said adding heavy snow was also recorded in famous hill resorts of Sonamarg, Yousmarg and high altitude areas of Badgam district in central Kashmir.

Reports from south Kashmir said one to two inches of snow was recorded in the twin districts of Anantnag and Pulwama including the famous health resort of Pahalgam.

However, the traffic on the all important Srinagar-Jammu National Highway, the only road linking Kashmir with rest of the country, was plying normally.

Although mild snow and rains lashed the 300-km long highway between Qazigund to Banihal, the arterial road was traffic worthy, the sources said.

The fresh snowfall has led to intensification of the cold wave with day’s temperature recorded yesterday was 5.2 degree celisus - two degrees below normal, weather office said.

The minimum temperature recorded in Srinagar this morning was 0.5 degree celisus.

The weatherman yesterday forecasted heavy to moderate snowfall and rains in all places in Kashmir valley and a few places in Jammu region for the next 24 hours.

There was no let up in the weather and therefore the forecast might continued for next few days, the sources said adding detailed report of the forecast would be available with the office later in the evening as the data is being completed. (PTI)

2004: big ‘leap’ year for Reliance Infocomm

LUCKNOW, Dec 28: 2004 has been a year of milestones and achievements for the Reliance Infocomm, the country’s youngest yet largest mobile operator with a subcriber base of about 10 million.

Company’s wireless business head Kamal Nanavaty said here today that Reliance has "challenged the market with revolutionary tariffs and shrunk distances for its subscribers, both mobile and fixed wireless phone users."

"Under specific tarrif plans, Reliance subscribers can now talk unlimited at any time, from anywhere across the country-free," Mr Nanavaty said.

He said following the colourful handset revolution this year, Reliance Infocomm shook the market by introducing a series of colour handsets at prices beginning from Rs 4,999.

"With close to 25 handsets, Reliance was able to offer a wide choice to its subscribers," he said.

Reliance has made the net access possible even in semi-urban and rural areas with most handsets doubling up as modem for internet connectivity.

"Leap-frogging from presence in about 2,000 towns and cities, Reliance has begun to spread the benefits of mobile telephony far and wide by polling out its network expansion to cover more than 5,000 towns and cities by March next," he added. (UNI)

S Korea extends tax reduction on consumer goods

SEOUL, Dec 28: South Korea extended on Tuesday a period of lower taxes on autos and 13 other consumer goods until June next year, in a bid to stimulate weak local demand.

The cabinet gave the green light to the Government’s plan for a six-month extension on the reduction in special excise tax at a meeting early on Tuesday, the Finance Ministry said in a statement.

Other goods subject to the tax reduction include cameras, watches, furniture and fur coats.

South Korean policy planners have crafted a series of stimulus steps including extra Government spending and a number of interest rate cuts in a bid to end a two-year slump in local consumption.

Consumers spending has been in the doldrums since late 2002, when a spending boom fuelled by credit cards turned sour leaving many people behind on their payments.

South Korea’s economy is expected to grow 4.0 percent next year after a 4.7 percent rise this year, the Central Bank has said. (AGENCIES)

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