No proposal to hike sugarcane SMP.........

Maruti, Shriram tie up for rural car finance.........

TVS to roll out gearless scooter, sub 1 tonne goods carrier...........

Volvo to expand dealership network; to add 7-9 dealers........

Tax holiday withdrawal to hurt profitability: IOC

NEW DELHI, Mar 10: Indian Oil Corp today said the move to withdraw tax holiday to new refineries will result in lowering of profitability of its Rs 24,000-crore Paradip refinery in Orissa.

"The rate of return on capital invested in the 15 million tons a year refinery cum petrochemical plant will be lower by 1.5-2 per cent," IOC Chairman Sarthak Behuria told reporters here.

Finance Minister P Chidambaram had in his Budget for 2008-09 proposed to end seven-year income tax holiday for refineries commissioning after April 2009. The proposal would affect all proposed new refineries except that of Reliance Petroleum Ltd, a subsidiary of Reliance Industries Ltd, which expects to commission a 580,000 barrels per day export-oriented unit at Jamnagar by third quarter of the new fiscal.

The end of tax-breaks may mean up to Rs 5,000 crore outgo, company Director (Finance) S V Narasimhan said.

Oil and Natural Gas Corp (ONGC), which had planned a new 300,000 b/d refinery at Kakinada in Andhra Pradesh and doubling of capacity of its expanded Mangalore refinery to 600,000 b/d, is already reviewing its plans. "We are working on revised financials," company Chairman R S Sharma said.

India had planned to add 2.14 million b/d to its existing 2.98 million b/d capacity by 2012 to become a global refining hub.

Behuria said investment proposal for the Paradip refinery is likely to be cleared by May/June.

"We are making a representation to the Finance Minister. When there is an intent to make India a refining hub, why are we robbing it of tax incentives that are crucial for the survival of the units," he said.

The sunset clause for the tax holidays for oil refineries would impact new refineries planned by IOC, Bharat Petroleum, Essar Oil and the one by steel baron Lakshmi N Mittal in tie-up with Hindustan Petroleum.

Behuria said the Paradip refinery would be commissioned sometime in 2011-12.

"New refineries may get impacted which intend to serve domestic market," KMPG’s Manish Kumar said. "Tax incentives help manage fluctuations. Currently, we are in the era of high margins but once they are lower, the incentives or lack of them will start impacting their profitability."

HPCL-Mittal’s 180,000 b/d Bhatinda refinery would come on stream in 2010, BPCL’s 120,000 b/d Bina plant would be completed by December 2009. Mittal along with Total of France was also looking at the possibility of setting up an export-oriented 300,000 b/d refinery at Vizag.

Essar Oil, the country’s newest refiner, has announced plans to more than treble its Vadinar refinery capacity to 680,000 b/d by end 2010 from existing 210,000 b/d. (PTI)

Chidambaram presents Karnataka Budget in Lok Sabha

NEW DELHI, Mar 10: Finance Minister P Chidambaram today presented the Karnataka Budget 2008-09 in the Lok Sabha, showing the estimated receipts and expenditure for the year and seeking a vote on account for six months for meeting the expenses of the state which is under President’s rule.

According to Mr Chidambaram, Karnataka is expected to have a closing balance of Rs 92.27 crore at the end of 2008-09, reflecting a revenue surplus of 1.19 per cent and a fiscal deficit of 2.84 per cent of GSDP.

The Budget Estimates place the revenue receipts at Rs 46,188.70 crore, while the state’s share of central taxes, duties and grants- in-aid from the Centre adds up to Rs 12,811.12 crore.

The revenue expenditure is projected at Rs 43,216.05 crore, leaving a revenue surplus of Rs 2,972.65 crore. On the capital account, the receipts are estimated at Rs 9,273.45 crore and the expenditure at Rs 13,326.09 crore.

The plan outlay for the year is estimated at Rs 21,751 crore which is substantially higher than the current year’s outlay of Rs 17,782.56 crore. The increase is due to hike in allocation for agriculture, rural development, education, water supply and sanitation, housing, urban development, welfare of SCs, STs and OBCs and social security and welfare sectors.

Central assistance in the form of grants to the state plan has been projected at Rs 2,058.04 crore and the state’s own resources, including loan from various sources, are projected at Rs 19,693 crore.

The regular Budget is expected to be presented in the state assembly by the government that will be elected in the next few months.

Mr Chidambaram also presented the supplementary demands for grants for the state for 2007-08.(UNI)

No contractual obligation to give
spectrum beyond 6.2 MHz:Raja

NEW DELHI, Mar 10: There was no "contractual agreement" between Government and telecom operators to allot spectrum beyond 6.2 Mhz, a move that could hurt GSM players like Bharti, Vodafone and Idea Cellular, Telecom Minister A Raja told the Lok Sabha today.

"There is no contractual agreement to give spectrum beyond 6.2 MHz. We are releasing more spectrum based on subscriber base as suggested by telecom regulator TRAI," Raja said in the House while replying to a question.

Spectrum is radio frequency used for offering wireless telecom services.

Currently, spectrum allocation norms, which were revised in August 2007, are being followed while the Teleconm Enginering Centre (TEC) report is awaited.

The minister said that the GSM lobby Cellular Operators Assoctaion of India (COAI) had expressed grievances over the new allocation norms as they wanted old methodology be continued.

Raja also ruled out auctioning of spectrum saying this was not feasible based on previous experiences especially in 1993 when operators were not able to fulfil their roll out obligations.

Since then revenue sharing regime is being followed for spectrum charges.

"At present the service providers are paying spectrum charges based on percentage/share of Adjusted Gross Revenue (AGR). The pricing of spectrum is reviewed from time to time, taking into account various relevant aspects, and suggestions thereof," the minister said.

In order to ensure optimum use and equitable allotment of scarce spectrum resources, the criteria for allotment is based on the number of subscribers in an operator’s network and their usage of network.

"These criteria are reviewed from time to time taking into account relevant factors and technological developments," Raja said.

In reply to another question, Raja said there was no proposal in the Government or TRAI to revise roaming charges for mobile phones. "However, operations are discussing revision of packages," he said.

Raja said the Government has Rs 15,000 crore is the Universal Service Obligation Fund of which Rs 5383 crore has been spent on rural telephony and the balance fund would be spent in due course of time.

"Government, through BSNL, has undertaken the task of increasing teledensity in the rural areas," he said adding that the targets for the year 2009-10 would be fixed in due course.

In a written reply to a separate query, Raja said all major broadband service providers, including MTNL and BSNL, have met the benchmark of ensuring that the subscriber gets a download speed of 80 per cent of the subscribed speed. (PTI)

No proposal to hike sugarcane SMP

NEW DELHI, Mar 10: The Government today said there is no proposal to increase the support price of sugarcane in the near future.

"Demand has been received for increasing the statutory minimum price (SMP) of sugarcane for the sugarcane growers of Karnataka," Minister of State for Consumer Affairs, Food and Public Distribution Akhilesh Prasad Singh said in a written reply to Lok Sabha.

Singh said there has been a demand to enhance sugarcane price for 2007-08 season by at least Rs 200 per tonne, as one time measure, for 46 sugar mills working in Karnataka.

There has also been demand for additional payment of Rs 300 per tonne and also to fix SMP at Rs 1,200 per tonne for sugarcane, he added.

The minister, however, replied in negative when asked whether the Government proposes to announce the increase support price of sugarcane in the near future.

In reply to a separate query, Minister of Agriculture, Food and Public Distribution Sharad Pawar said the Government has not decided to permit oil companies to manufacture ethanol directly from cane juice.

Last year, the Government had allowed sugar factories to produce ethanol directly from sugarcane juice to augment availability of ethanol and reduce over supply of sugar. (PTI)

Maruti, Shriram tie up for rural car finance

NEW DELHI, Mar 10: Stepping up efforts to penetrate deeper into the semi urban and rural India, country’s largest car maker Maruti Suzuki India today inked a pact with Shriram City Union Finance with an initial allocation of Rs 1,000 crore.

The tie-up would focus on financing of entry level cars from Maruti portfolio, which include the M800, Omni and Alto models, the company said in a statement.

"Maruti Suzuki is keen to expand its presence in rural and semi urban markets. We have the right products and an excellent network across the country to support it. However there is still lot to do in the direction of finance availability especially beyond metro towns," said MSI Chief General Manager (Sales) R S Kalsi.

He said the tie-up with Shriram Group was a step towards providing a transparent, hassle free finance options to the company’s countryside customers.

"At the onset of this association we have allocated Rs 1,000 crore for four-wheeler financing. We look forward to our association with Maruti Suzuki to be of advantage to customers as well as both companies," Shriram City Executive Director Subhasri Sriram said.

Initially, this arrangement would be available in Kerala, Karnataka, Tamil Nadu and Andhra Pradesh and subsequently extended countrywide, the statement added.

The agreement is a joint initiative of the two companies to provide competitive car finance to people in Tier-II and Tier-III cities across the country, it said. (PTI)

TVS to roll out gearless scooter,
sub 1 tonne goods carrier

CHENNAI, Mar 10: After foraying into the three-wheeler segment, country’s two-wheeler major TVS Motor Company Ltd today said it will soon launch a gearless scooter in 8-9 months and a sub-one-tonne goods carrier by next year.

"Next year we will launch a sub-one tonne goods carrier and a diesel-powered three-wheeler," TVS sr vice president (International

Business and 3 Wheelers) H S Goinde said.

When asked about this sudden shift in focus from being a two-wheeler company to manufacturing three-wheelers, Mr Goindi said "the recently launched three-wheeler will contribute only Rs 200 crore to the company’s turnover which is not a very significant amount. The focus is still the two-wheeler segment and this is just to add to company’s profits."

Two-wheeler sales have been constantly under pressure as it sold only 13,773 motorcycles in February this year compared to 19,194 units last year, a decline of 28.24 per cent.

Yesterday, TVS launched its 200cc three-wheeler named ‘TVS King’ priced between Rs 90,000 to Rs 1.30 lakh.

Apart from the domestic market, TVS Motor will also export its TVS King to countries like Sri Lanka, Bangladesh, Latin America, Nigeria and others.

Country’s No 2 motorcycle maker, Bajaj Auto Ltd, is the top three-wheeler maker.

Others in the segment include Mahindra & Mahindra, Piaggio, Force Motors and Atul Auto.(UNI)

Volvo to expand dealership network; to add 7-9 dealers

NEW DELHI, Mar 10: To tap the growing automobile market of the country, Volvo Car India is expanding its dealership network with plans to open 7-9 dealerships during the current year.

To start with, the company today announced the opening of its flagship dealership, spread over an area of 6,000 sq mt, here.

The New Delhi dealership would be followed by opening of Chandigarh and Mumbai dealerships, the company said in a statement.

"Inaugurating our flagship dealership in India will be a memorable moment for us at Volvo Car India for a long time. We believe all the three dealers have the necessary capability and experience to assist us in achieving our business objectives," Volvo Car India Managing Director Paul de Voijs said.

The dealerships, designed in accordance with the brand’s internationally applied premium standards, would present Volvo’s exclusive range to the Indian customer.

"All the three dealerships will have the same visual identity and design as other Volvo dealerships around the globe based on their programme - Volvo Next Face (VNF). The programme was specifically produced to create a modern and uniform appearance for Volvo’s dealers in the world over," the company said.

Volvo Car India, a division of Ford Motor Company, launched two of its flagship models -Volvo S80 and Volvo XC90 in the country in September 2007. (PTI)