Mahindra & Mahindra Signs Mou With Government Of Maharashtra To Invest An Additional Rs 1500 Crore I

Mahindra & Mahindra Ltd has announced that the Company on March 31, 2008 signed a Memorandum of Understanding (MoU) with the Government of Maharashtra to further boost their investment at its upcoming Chakan Greenfield project. The Company will invest an additional Rs 1500 crore to the already earmarked Rs 2500 crore. The total sum of Rs 4000 crore will be utilized towards the development and production of all vehicles slated to be rolled out from the proposed Greenfield.

M&Ms Greenfield at Chakan will house the manufacture of medium and heavy commercial vehicles, to be produced by joint venture Company Mahindra International and other products slated to hit both the domestic & global markets at strategic timelines.
A memorandum of understanding to this effect was signed on March 31, 2008 by Mr. V K Jairath, Principal Secretary (Industries), Government of Maharashtra and Dr. Pawan Goenka - President Automotive Sector, M&M in the presence of Mr. Vilasrao Deshmukh, Honourable Chief Minister, Government of Maharashtra, Mr. Keshub Mahindra Mahindra Group Chairman, Minister of Industry, Mr. Ashok Chavan, Mr. Johnny Joseph, Chief Secretary, and other dignitaries.

Mr. Keshub Mahindra, Chairman of the Mahindra Group, said M&Ms new investment at the upcoming Chakan facility, besides contributing to the states economic growth will also produce jobs for the locals in that region. We have always been at the forefront to add value to the Indian automobile industry. This project is in keeping with this tradition of mutual growth.

Dr. Pawan Goenka, President, Automotive Sector - M&M said, We are very pleased to expand our activity in the State of Maharashtra. We had decided to make the state the launch pad for our commercial vehicles. The additional investment plan of Rs 1500 crores, will allow us to create a world class manufacturing facility for 300,000 vehicles. The Chakan Greenfield is a significant step for us to contribute to the Indian automobile industry.

Havells To Invest Rs 400 Cr In Expansion Projects

New Delhi: Electrical goods manufacturer Havells India said it will invest Rs 400 crore for increasing its capacities in the country, besides foraying into a new segment.

The company is entering the new segment of manufacturing electrical-motors and is augmenting its capacities in lighting and cables segment. It has earmarked a budget of around Rs 400 crore for the purpose and has already spent Rs 200 crore in current fiscal, Havells India Ltd Joint Managing Director Anil Gupta told PTI.

Havells is setting up a green-field plant in Rajasthan to manufacture electrical motors ranging from .25 horse power to 500 horse power. The company has already spent Rs 150 crore in the plant and will invest Rs 50 crore more in it, he said.

"Manufacturing Industries located in the region provide us excellent opportunity to sell electrical motors here and it also synergies with our products," he said.

The company has also purchased around 17 acres of land near its facility in Alwar to expand the manufacturing capacity of high tension cables and domestic cables.

Loan Waiver And Agricultural Investment

The Rs 60,000-crore agricultural loan waiver by the Finance Minister has generated widespread debate. The reason goes back to farmers’ debt-related distress and even suicides. If the issue is debt-related distress, one must ask why it is so. There is no guarantee that the farmers will not borrow the ensuing year. More specifically, long-term prospects are sacrificed at the cost of short-term gains.

It is established now that the farmer is generally required to repay his/her debt immediately after the harvest. This means the farmer is trapped in a regressive market mechanism in two ways. First, with no other means of repaying the debt, he/she is forced to sell the produce immediately after the harvest — quite often to the creditor or to his agent — probably at a pre-arranged price or in pre-decided quantities.

Second, the sale of crops immediately after the harvest means that the farmer probably receives less for his/her produce than what he/she could have obtained when the market prices stabilise. As more and more farmer-debtors wish to convert their harvest into cash, crop prices tend to get further depressed.

Act of commerce

While all this is true of farmers, in general, the case of cash-crop farmers deserves special attention. Interestingly, those who go for cash crops such as tobacco, sugarcane or cotton are not typical small farmers. They are the ones with relatively large land holdings and risk appetite, for whom farming is a commercial operation. The anticipated incentives in the output market are the motivating factors for hard work as well as for high input costs. The results are, however, not always as expected.

During harvest time, the supply of crops often overshadows demand and, thus, prices go down. This is due to the pressure created by both formal and informal lenders for loan repayment, post-harvest. As a consequence, average input costs are sometimes higher, or just marginally lower, than the average revenue, leaving little or no cash surplus for loan servicing.

Small farms

It is hard to generalise a small farm as one with not more than two hectares of land across the whole of India. Physical land under assured irrigation is much more productive than the area with no assured irrigation.

Thus, a small farmer with less land but assured irrigation may be financially better off than another farmer with much larger land holding but no assured irrigation.

Take the case of eastern India and some parts of the south. The basic unit for organising production in the rural areas is either the farm or the village, depending on how rural society is structured.

In this region, agriculture is characterised by small farms in alluvial lowlands; too many people on too little land; production largely for subsistence; and a heavy dependence on cereals and other food staples. Farming with simple handheld tools or ploughs pulled by animals is common. Many farmers are owner-tenants and tenants.

Rice, usually grown under wet conditions, is the staple food crop in these regions. Controlled irrigation facilities are poorly developed, yields are often low, and double-cropping (planting and harvesting two crops in one calendar year) is not universally practised. Although high-yield varieties of wet rice have been introduced since the 1960s, this has not increased production as predicted.

In northern India, irrigation schemes have helped stabilise annual yields and increase overall production, but the average rice yield per hectare in the mid-1990s was only about half that of Japan.

Nevertheless, Asian countries produce about 90 per cent of the world’s rice. China and India alone account for nearly 60 per cent of the world total.

Low productivity and water management

The average rice yield is 2.9 tonnes per hectare in India. In comparison, the average rice yield (in tonnes per hectare) is 6.8 in the Republic of Korea; 6.2 in Japan; 6.3 in China; 4.3 in Indonesia; and 3.8 in DPR Korea.

The key issue is: Why has productivity remained so low in India, particularly in the eastern region, despite availability of modern rice technology? Experts argue that the above differences in yield are a result of poor water management. Irrigation, drainage and flood control investments can alter the water regime and, in the process, the plight of millions of small farmers. Together, they constitute the concept of water management. The high magnitude of poverty in this region is partly explained by poor water management.

Admittedly, achieving food security has been the overriding goal of agricultural policy in India. The introduction and rapid spread of high-yielding rice and wheat varieties in the late 1960s and early 1970s resulted in steady output growth for food grains.

Public investment in irrigation and other rural infrastructure and research, together with improved crop production practices, has helped significantly increase food grains production.

Declining investments

However, the benefits of the Green Revolution are waning now. Public investment in agriculture is declining, and the annual increment to gross capital formation is now lower than in the early 1980s.

This trend is the same across all the States, not just the poorer ones. More interestingly, the increasing shares of total public expenditure on agriculture are allocated to input subsidies (on fertilizers, electricity, irrigation, and credit, for example), rather than to productivity-enhancing investments such as research and public investment in irrigation. The share of input subsidies in public expenditure rose from 44 per cent in the early 1980s to 83 per cent by 1990.

Private investment in agriculture has increased modestly in recent years, but is nowhere near enough to fill the gap caused by the decrease in public spending. Unfortunately, the agricultural loan waiver can hardly be used to create these investments.

NYSE Euronext May Be First To Invest In Idrs

MUMBAI: Indian Depository Receipts, the revised guidelines for which were formulated in mid-2007, have found no takers so far. It may just turn out that NYSE Euronext, the world’s largest exchange group, will be one of the first to make use of this listing window available in India, for overseas companies.

NYSE Euronext chief executive officer Duncan L. Niederauer said he could potentially list the exchange’s stock in other markets where companies listed on his exchange wanted to go.

“It wouldn’t shock me if US or European companies listed on NYSE Euronext have aspirations to list their stock in Asia, one of the hottest markets these days. We, as an exchange, can potentially list our shares in those markets in order to show the way to our companies, but there’s nothing imminent,” said Niederauer.

NYSE Euronext is currently listed on Euronext in Paris and New York Stock Exchange. It in turn has nearly 4,000 companies listed on it, across the six countries in which its family of exchanges is located.

“India, China, Japan and some ASEAN countries could be potential markets for our companies, and if our customers want help there, that can steer us as well,” said Niederauer, who visited Malaysia and Singapore before coming to India. This is Niederauer’s first trip to Asia after taking over as CEO of NYSE Euronext in December, following predecessor John A. Thain’s move as chairman and chief executive officer of troubled US investment bank Merrill Lynch.

“I treat this trip as an opportunity to do due diligence of these markets,” said Niederauer, who also has meetings lined up with National Stock Exchange (NSE) and Multi Commodity Exchange of India (MCX), in which NYSE Euronext has a 5% stake each.

“We’re not here to buy up exchanges. We’re here to forge alliances with them. We run a huge technology platform that could help many exchanges in the region (Asia) tide over their capacity issues. And we are open to only partner in technology initially, and maybe later translate that into an investment,” said Niederauer.

On when the NSE listing will take place, Niederauer said, “That’s Ravi’s decision.” Ravi Narain is the chief executive officer of NSE.

“Historically, stock exchanges were considered nationalistic utilities. However, now that their nature has changed to a dynamic industry, where there is rapid consolidation, it’s best to position them differently. It’s necessary that they have a public currency. If Ravi asked me, I would encourage him to list the exchange,” said Niederauer.

Bharat Forge To Open Manufacturing Facility In Baramati

Mumbai: Forged and machined components manufacturer Bharat Forge inked a memorandum of understanding with the Maharashtra Government on March 27 for opening a centre for advanced manufacturing facility at Baramati. The centre, spread over 100 acres, will be opened at an investment of Rs 350 crore. With a forging capacity of 30,000 tpa, the plant will manufacture crankshafts for marine and power, landing gear, engine and structural parts for aircraft and helicopters, connecting rods for locomotives and equaliser bars, spindles and other heavy components for machines used in construction activity. The company had a strong global presence and any automobile would have at least two components made by it. The facility was the first major project outside Pune and the company was positive of strengthening Baramati''s position as a fast growing industrial centre.

NTPC Waived From Equity Cap Guidelines For Bidding

New Delhi: In a move that could give greater operational flexibility for power major NTPC Ltd, the Centre has freed the State-owned utility from the Rs 1,000-crore investment cap in firming up alliances or setting up subsidiaries to bid for power projects. The Cabinet Committee on Economic Affairs on March 27 gave its approval to waive the ceiling for equity investment by NTPC to set up financial joint ventures and wholly-owned subsidiaries in India or abroad for participating in bidding called by state utilities and distribution licensees. The clearance would facilitate participation of NTPC in bidding for the development of power projects initiated by Government utilities and result in greater competition and establishment of more public sector power projects, the spokesperson said after the CCEA meeting

KS Oils Acquired 50,000 Acres Of Palm Plantation In Indonesia

KS Oils Ltd has announced the acquisition of 20,000 hectares (50,000 acres) of Palm plantation in Indonesia. With an investment of Rs 230 crores spread over the next 3 years, the Company is ensuring backward integration to secure raw material supplies and avoid global price volatility. This will help the Company in reducing raw material costs significantly and also signals the Companys strategic intent of being a global player.
K S Oils has acquired a single palm plantation over a vast area spread across 50,000 acres of green land in Indonesia. The Company has set up operations and the plantation will be developed over next 3 years. The investments in the plantation will ensure, that agricultural best practices and environment friendly methods are used in the cultivation; while the focus will be on scientific methods of plantation to increase productivity and yield, due care will be taken to enrich the surrounding eco-system.
Indonesian palm plantations are among the most efficient and productive plantations across the world and hence our decision to invest; with spiraling commodity and raw material prices, owning raw material source is the right strategy to derisk in the long term. We thank our Private Equity partners for providing strategic inputs and deep insights which helped us clinch the deal. This is another important step in our global ambitions.
With current investments in the project pegged at Rs 230 crores over a three year period, the plantation will yield 80,000 Mt annually. This will substantially bring down the raw material costs for K S Oils which is currently importing palm oil to refine and sell along with its main product of mustard oil in Northern and Eastern India. The investment has been routed through the Companys wholly owned subsidiary in Singapore. The plantation yield of 80,000 Mt. represents 2.5% of Indias current palm oil imports, which today stands at 3.6 million tonnes annually.

Panoramic Universal Acquires Resort Near Mumbai

Panoramic Universal Ltd has informed that the Company has acquired Rishi Garden Resort at Panvel near Mumbai. It is a perfect weekend get away from Mumbai with a water park. The resort is spread over 15 acres of land consisting of 25 cottages and a conference hall. It has been a favorite destination for MICE, Corporate Picnic and family get-togethers. The resort shall be renamed as Panoramic Resort.
The resort is ideally located on Goa Alibaug highway and is a few kilometers away from the Maha Mumbai SEZ as well as the proposed new international airport at Kopra-Panvel area.

Henderson Equity Invests In Sharda Worldwide

New Delhi: Henderson Equity Partners announced investment of $21.5 million (about Rs 84 crore) in Mumbai-based agrochemical company, Sharda Worldwide Exports.

The company aims to have a leading presence in the majority of geographies and the funds raised are envisaged to increase our presence in the US and Europe, said R V Bubna, Director, Sharda Worldwide Exports Pvt Ltd.

"Our team has consistently demonstrated its ability to garner a sizeable market share in key geographies and we believe that Sharda is now on a critical growth path which will position it as one of the leaders in this industry,” he said.

The company advised by Ernst & Young, however, refused to disclose the equity stake being picked up by the UK-based private equity firm.

The company markets off-patent agrochemicals across 50 countries and across the herbicide, fungicide and insecticide sectors, he said, adding it follows an asset-light strategy sourcing through a global network of cost-competitive suppliers ensuring quality control from production to dispatch.

Commenting on the investment Vishal Marwaha, Partner of Henderson Equity Partners said, "We believe that the sector and the company will be strong beneficiaries of increasing regulation of agrochemicals and increasing crop acreage."

The company is very well positioned to make acquisitions of niche product registrations in the regulated markets, he said.

Fiat To Increase Ranjangaon Capacity

Mumbai: Fiat India Automobiles Pvt Ltd, a 50:50 joint venture between Fiat Group of Italy and Tata Motors, has decided to increase its production capacity at its greenfield plant at Ranjangaon near Pune. FIAPL will be infusing an additional Rs 2,341 crore over and above the on-going investment of Rs 1,679 crore. With a total investment of Rs 4,020 crore, the Ranjangaon facility will now manufacture two lakh cars, three lakh engines and three lakh related parts and accessories. FIAPL on March 24 inked a MoU with the Government of Maharashtra to increase the production capacity and for backward integration at its Ranjangaon plant. The joint venture company will be manufacturing cars, engines and transmissions for both the partners.

Fiscal Report: Investors Gaining Only On Half Of Portfolio

Mumbai: If stock market be considered a game of snakes and ladders, there has been almost one snake for every ladder in the current fiscal, which is about to end with just six days of trading left.

On the face of it, this might appear to be an even score, but it means that an investor who entered the the beginning of the fiscal has suffered losses on one stock out of every two purchased.

According to an analysis of market values of close to 2,360 companies that were listed on the bourses at the beginning of the current fiscal and whose shares are still being actively traded, the market value has taken a hit or remain almost unchanged for nearly half of them.

While close to 1,100 companies have seen their market capitalisations actually dropping from the levels at the beginning of the current fiscal, that of more than 150 companies are almost unchanged from those levels.

The analysis does not include companies that were listed on the bourses during the fiscal through IPOs, de-merger or as part of other corporate decisions. There were close to 2,500 stocks being traded actively at the beginning of the current fiscal, while the number has grown past 2,700 at present.

Besides, the list of the prominent losers in the course of the current fiscal includes blue-chips like TCS, Infosys, Wipro, Satyam, Tata Motors, Hindustan Zinc, HCL Technologies, M&M, Cipla, Dr Reddy's Labs and Indian Hotels.

Together, 1,101 companies have lost close to Rs 2,62,000 crore since the beginning of this fiscal. However, the total gains registered by the remaining companies stand at about Rs 14,00,000 crore, mainly due to huge gains recorded by blue-chips like Reliance Industries, ONGC, NTPC, Bharti Airtel and SBI

Maruti Suzuki To Infuse Rs 9,000cr More

Mumbai: Maruti Suzuki India Limited (MSIL), the leading car maker in the country, will pump in Rs 9,000 crore more in India, most of it in research and development (R&D), warehousing, marketing, logistics and design. The company has already set aside a corpus of Rs 9,000 crore, which will be used primarily to enlarge production. MSIL will infuse Rs 9,000 crore in India which will be over and above the earlier investment programme announced by the chairman (Osamu Suzuki) last year. The investment will cover its other round of expenses for opening a world class R&D and design facility, improving warehousing facilities and marketing channels, upgrading our logistics support and similar ventures, which will improve the company''s overall business presence in India. The company is planning to open giant regional warehouses, which will cater to sectoral markets in each of the distribution zones.

Sebi Allows Short Selling Of Shares By All Institutional Investors

In a major development market regulator on Wednesday, 19 March 2008, the Securities and Exchange Board of India (Sebi) allowed short selling of shares by all institutional investors from 21 April 2008.

It will also introduce a scheme for lending and borrowing securities from the same day, Securities and Exchange Board of India (Sebi) said.

Currently, only individual retail investors are allowed to short sell, or sell shares that they do not hold but expect to buy later.

Review Tata, Virgin Deal, GSM Players Urge Dot

New Delhi: GSM operators have urged the Department of Telecom to reinvestigate the deal between Tata Teleservices and Virgin Mobile for a possible violation of the Foreign Direct Investment (FDI) norms.

In a communication to DoT, the Cellular Operators Association of India said that rules regarding Mobile Virtual Network Operators should be made clear and no operator should be allowed to take a back-door entry into the telecom sector. The DoT had earlier given a clean chit to the Tata-Virgin deal.

However, COAI wants the issue to be examined once again. “The arrangement between Virgin Mobile India and Tata Teleservices has implications from the perspective of the foreign direct investment policy of the Government of India. The FDI Policy limits foreign investment in the telecom services sector and completely bars it in the retail sector. It is important, therefore, to examine whether the mobile services being provided by Virgin Mobile India meet the restrictions imposed by the FDI Policy,” said the COAI letter.

COAI has also urged DoT to clarify the rules for providing MVNO and franchising. “Virgin Mobile India claims to be a franchisee of Tata Teleservices offering in India the “Virgin Mobile” brand of services of Tata Teleservices. It is well known that the brand “Virgin Mobile” belongs to the Virgin Group of companies based in UK. It is equally well known that the mobile services that have been launched in India by Virgin Mobile India are the same services that the Virgin Group already offers, as an MVNO, in other parts of the world under the same brand. It is counter-intuitive that a group with a well-known brand of mobile services would first transfer its brand and expertise to Tata Teleservices and then take the same brand and expertise back for use in India under a franchising arrangement, unless this double loop is deployed to overcome a regulation,” COAI said.

Centre Planning IT Investment Regions

Hyderabad: The Central Government is charting out a policy for the creation of IT investment regions under the public private partnership (PPP) model to be driven by the State Governments and supported by the Centre.

Typically, such IT investment regions would be spread across several sq km and host special economic zones and related infrastructure and help attract more investments, according to the Union Secretary for Information Technology and Communication, Jainder Singh.

The objective of the centres is to provide better infrastructure and thereby de-congest rapidly growing major cities in the country, Singh said at the inaugural session of the Hyderabad IT Summit.

The objective of these IT investment regions, to be anchored by State Governments, would be to enable IT companies expand their operations and also scale up to the next level of technology outsourcing business, he said.

IT exports

Referring to the Indian IT exports, Singh said that the exports are poised to touch $40 billion during 2007-2008 as against $31 billion in 2006-2007, and now contributes to about 5.4 per cent of the country’s Gross Domestic Product (GDP) and 25 per cent of country total exports.

The Chairman of FICCI IT, Ashank Desai, said that there is immense untapped potential for outsourcing and India barely addresses about a 10th of the overall market. While IT contributes to about 5 per cent of GDP, this could go up to about 15 per cent by 2010.

Outlining some of the corporate social responsibility initiatives of the company, the Chairman of Satyam Computer, B. Ramalinga Raju, said that the Indian IT industry is at an inflection point and has the potential to become a $1- trillion business employing more than 100 million people.

The Chairman of Electronics ad Computer Software Export promotion Council (ESC), Sanjiv Narayan, said in spite challenges such as rupee concerns, wage inflation and attrition, the IT sector has managed a significant growth this year.

Coal India To Invest Rs 1,500 Cr To Set Up Washeries

Kolkata: To ensure supply of washed coal to customers, state-owned Coal India would make a capital expenditure of Rs 1,500 crore to set up 28 washeries in its subsidiaries in the 11th Plan.

"CIL has decided to set up 28 washeries in the first phase which together will have a capacity of 97 million tonne. It would require an investment of Rs 1,500 crore," company chairman Partha S. Bhattacharyya told reporters here.

The washeries, to be owned by CIL, would be built and maintained by companies for a charge, he said.

CIL has already sent bid documents to subsidiaries which were in the process of identifying locations for setting up the washeries.

Tenders inviting bids for setting up washieries would be floated in 6 to 8 months time and contracts, which would be for 10-years, would be awarded within 2008-09.

All the 28 washeries would come up within the 11th Plan, he said.

Tender for setting up washeries in the second phase would be floated during 2009-10.

The CIL chairman said that rejects in the washeries would be used for setting up pit-head power plants which would be smaller in size.

Kribhco Plans To Set Up Rs 4,000 Cr Power Project In Bihar

Bhubaneswar: Krishak Bharati Co-operative (Kribhco), Gujarat-based fertiliser cooperative major, is looking at commissioning a 1,000 mw joint venture project in Bihar in association with the Bihar State Electricity Board (BSEB) with an investment of Rs 4,000 crore.

Kribhco''s first power JV, a 1,000 mw project in association with the Chhattisgarh State Electricity Board (CSEB), is on track. As in the case of the Chhattisgarh project, Kribhco will hold 51 per cent in the second project also. Around 1,000 acres will be required for setting up the power plant. Additionally, Kribhco is foraying into other businesses such as setting up a jetty at its Hazira power plant and has entered into a tie-up with the Railways for container services. The projected will be funded mainly through loans from banks and financial institutions. Formation of a special purpose vehicle could also be on the cards for the Bihar venture. Kribhco authorities have also initiated dialogues with Power Trading Corporation for their foray into power selling. Kribhco plans to set up the Chhattisgarh power plant by the end of 11th Plan. As for the Bihar venture, it is yet to fix any date.

NTPC To Set Up Rs 4,375 Cr Power Plant In Kokrajhar

Guwahati: National Thermal Power Corporation (NTPC) has decided to infuse Rs 4,375.35 crore in setting up a 750 mw coal-based thermal power project at Salakati in Kokrajhar district in Assam. The project will be set up at the site of the existing non-operational Bongaigaon Thermal Power Station.

A transfer agreement has been executed between NTPC, the Assam government and Assam Power Generation Corporation (APGCL) for transfer of the existing infrastructure of 240 mw Bongaigaon Thermal Power Station of APGCL to NTPC. All key inputs and clearances, including environmental nod, have been obtained for the project. Site specific studies have been completed.

Larsen & Toubro To Ramp Up Manufacturing Capacity

Mumbai: Engineering and construction company Larsen & Toubro Ltd said that it is all set to ramp up its manufacturing capacity of super-critical boilers and super-critical turbine generators to 4,000 MW per annum.

Super-critical boilers and turbines are integral components of energy efficient, coal-based power plants. The company will manufacture and market the critical components for large power plants through two separate joint ventures with Mitsubishi Heavy Industries (MHI) of Japan. L&T holds 51 per cent in the JVs with MHI holding 49 per cent. The joint ventures will have an investment of Rs 1,500 crore, an L&T release said.

The project had begun at the existing facilities in Hazira last year and two new workshops have been constructed. To further add capacities by 4,000 MW, the new dedicated facilities will come up at Hazira.

L&T has developed capabilities to become a single-point solution provider for the power sector. The company is engaged in total EPC contracts for power projects as well as manufacture of complete condensing and feed heating systems for power projects.

L&T-MHI will have product configuration catering to super-critical power plants, ranging between 500 MW and 1,000 MW. The engineering design centre for the boilers is based in Faridabad, near New Delhi, and that for steam turbines in Vadodara, Gujarat.

The new fabrication and manufacturing facilities will be an extension of present complex. The foundation stone for the upgraded facility was laid at Hazira on Wednesday in presence of A.M. Naik, Chairman and Managing Director, L&T, and Ichiro Fukue, Representative Director, Mitsubishi Heavy Industries Ltd.

Hikal: Robust Prospects

Hikal undertakes research & development, manufacturing and marketing of specialty chemicals and caters to the pharmaceutical and crop protection industries. It collaborates with innovator companies and offers solutions in contract research, custom synthesis and custom manufacturing. Its basket of offerings includes active ingredients, intermediate chemicals and R&D services to the leading MNCs.

Hikal has manufacturing facilities at Panoli (Gujarat), Taloja and Mahad (Maharashtra). These are supported by research centres and pilot plant facilities at Bangalore and Taloja.

The company has been strengthening its research and development backbone by earmarking substantial investments in Pune and by setting up manufacturing facilities adhering to international standards with US Food and Drug Administration approvals. It appears to be positioning itself as a custom research & manufacturing company, providing services right from gram scale to commercial scale, enabling it to garner better business and manage quick scalability.

It appears to be moving in the right direction as, in this calendar year, it has entered into a long-term contract manufacturing agreement with Bayer CropScience AG, Germany, for manufacture and supply of active ingredients for crop protection products, and with Pfizer, a leading pharma multinational, for manufacture and supply of active pharmaceutical ingredients. It recently signed an agreement with Alpharma Inc, a US-based global specialty pharmaceutical company, for manufacture and supply of active pharmaceutical ingredients for the veterinary sector.

On a consolidated basis, the restructuring exercise of Marsing & Co, the Denmark headquartered pharmaceutical marketing and distributing company, needs to be monitored. This has the potential to boost Hikal’s overseas prospects.

At the current price of Rs 375, the stock has corrected by 8 per cent in the last one month and is trading at a PE of 12 (trailing four quarters numbers) and appears to hold potential.

Investors may keep a watch on this one and consider adding it to their portfolios once market conditions appear to stabilise.

Sun TV Launching Two More FM Stations

Chennai: The Sun Network group, which is targeting revenues of Rs 100 crore ($25 million) from its FM radio operations by 2010, is launching two more stations in Allahabad and Jabalpur under the "S FM" brand.

With this the group's total number of stations on air goes up to 27.

The group, promoted by Kalanidhi Maran, has rights to 45 FM station licences and the remaining 18 stations will go on air before June 2008, company officials said. Each station involves an investment of around Rs 1-1.5 crore.

Institutional Investors Must Pay Margins: SEBI

Mumbai: Institutional investors will now have to pay margin on their share transactions in the cash segment from April 21, in the same way as applicable to other investors, the Securities and Exchange Board of India said in a circular issued on Wednesday.

SEBI also operationalised short selling and securities lending and borrowing from the same date, April 21. It had specified the broad framework for this in December 2007 but had not operationalised it, pending clarifications from the tax authorities.

Currently, margin payment in cash transactions is applicable to retail investors and to those who do proprietary trading. It is a percentage of the value of the stocks that investors have to pay upfront upon placing their order with their brokers.

This is being done “in order to provide a level playing field to all the investors in the cash market as in the case of the derivatives market,” said SEBI.

While some market players thought that this margin prescription for institutions was done keeping in mind the current fragile health of several financial institutions worldwide, sources close to SEBI said that the measure was thought about a long time ago.

This must be seen in the context of short selling and securities borrowing and lending being made operable from April 21, said a source close to SEBI.

“This has been done for greater balance and integrity in the markets,” he said. “With short selling we are encouraging a converse view of the market, and we feel that margins for cash trades provide a balance.”

“There is a fear that people may go berserk with short selling and exceed their limits,” he added.

All institutional trades in the cash market would be margined on a T+1 basis with margin being collected from the custodian upon confirmation of the trade, said the SEBI circular: “Subsequently, with effect from June 16, 2008, the collection of margins would move to an upfront basis.”

The stock exchanges shall issue the necessary guidelines in this regard and shall put in place the necessary systems said SEBI.

“Institutional investors will now have to make arrangements to pay margins. From a broker’s perspective it would be like handling retail trades and paying margin money to the exchanges. If brokers can collect money from custodians there is no extra cost, it is only an increase of administrative work,” said Anita Gandhi, head of institutional business at Arihant Capital Markets.

There could be a slight decrease in volumes, but in any case the margin money will be released on the T+2 date, said an official at a mutual fund.

Short selling by institutions resuming next month will help deepen and broaden the market, said analysts. Short selling had been banned by the regulator in the wake of the Ketan Parekh scam in 2001.

Short selling refers to the sale of stocks which the seller does not own at the time of selling.

Ghana Backs India's UN Bid, Eyes Indian Investment

New Delhi: Ahead of the India-Africa Forum summit in April, Ghana Tuesday backed India for a permanent UN Security Council seat and launched a charm offensive to attract Indian investment in the resource-rich West African country.

"We recognise the might of India. We have excellent ties with India. Ghana and Africa support India for a (permanent) place in the UN Security Council," Ghana Vice-President Alhaji Aliu Mahama, who is leading a 42-member business delegation to India, told reporters here.

"We see India as a true partner with whom we can do business and learn a lot. Ghana is a place to do real business," said Mahama, while flaunting Ghana as a gateway to the markets of the resource-rich West Africa.

Showcasing Ghana, which has huge reserves of gold, diamond, manganese, bauxite and cocoa, as one of the 10 reforming economies of the world, the Ghanaian vice-president underlined a business-friendly environment in his country and envisaged a win-win partnership with India.

"Africa has a lot to gain from you. There are several business opportunities for Indian businessmen in Africa. It's a win-win situation," said Mahama, who was a businessman before he became vice-president.

"Business people are running the country. Private sector can play a big role in creating new jobs," he said while fondly remembering Indian teachers who mentored him in school.

He identified agriculture, oil and mining, financial services, IT, industries, tourism and civil aviation as key areas in which Ghana is looking for Indian foreign investment.

The discovery of the first major oil deposit last year, estimated to be anywhere between 250 to 650 billion barrels, has the potential of turning Ghana into an "African tiger".

Ghana, a former chair and active player in the African Union, also struck an upbeat note about the first-ever India-Africa Forum summit in April, which will be attended by 14 African countries.

Mahama will meet his Indian counterpart Hamid Ansari and discuss with him a host of bilateral and global issues.

"The relationship between India and Africa goes back centuries. There is now a wish for a formalised relationship between India and Africa," he said.

"We need to re-explore the relationship and identify two-three concrete steps that will cement and entrench the relationship."

"It's like being in a marriage. We need to remind each other we love," said Robert Ahomka-Lindsay, chief executive officer of Ghana Investment Promotion Centre.

Making a riveting presentation pitching Ghana as 'Africa's Golden Gateway', he beckoned Indian businessmen to take the first flight to Accra and soak in new opportunities in his country.

"Take the first flight. We are waiting to welcome you," he said while letting in on the one-stop shop Ghana has set for clearing all foreign investments.

Dabur Aims At Rs 1000 Cr Revenue From ''New-U'' Brand

New Delhi: Dabur Retail''s H&B Stores'' brand ''New U'' is in the process of launching some of the world''s most sought after cosmetic and personal care brands in in India.A new image from Dabur, the brand which has for a long time been associated with traditional products like chawanprash is tying up with international brands to launch a new range of products.

These tie-ups won''t be exclusive though and while good brand display and greater visibility for its products are prompting these international brands to join in, Dabur Retail is hopeful that having a wide variety of brands and products under one roof will be the crowd puller.Dabur also plans to launch its private label under the ''New U'' brand name encompassing most personal care and beauty product categories. Dabur retail also plans to open 6 New U stores in the Delhi NCR region by the end of 2007-08 with revenue estimation of around Rs 1000 crore by 2010. The company plans to open a total of 150 outlets by 2009-10 with an investment of Rs 140 crore from the parent company Dabur India Ltd.

Bajaj Cap Plans To Mobilise $50 Mn For Expansion

Bangalore: Bajaj Capital is looking at mobilizing $50 million to expand its network despite turbulent global market conditions. According to market sources, a few private equity funds have shown interest in the company and a decision is expected during the next quarter.

Sources indicate that Citigroup Venture Capital and Barings Private Equity are among the funds which have evinced interest to fund Bajaj Capital. In addition to being an investment advisory and financial planning company, Bajaj Capital is also a Sebi-approved Category-I Merchant Banker. Of late, the company has 170 outlets across the country and is understood to be expanding. Early this year, Bajaj Capital forayed into online trading under the Just Trade brand, which also offer online investment advisory services. With this launch, Bajaj Capital offers stock broking, mutual fund and IPO services through a common online platform.

Godrej To Put In Rs 360 Cr More In FMCG Arm

Mumbai: Godrej Industries decided to further put in up to Rs 360 crore in Godrej Consumer Products. Earlier, on December 4, 2007, Godrej Industries had said it would invest up to Rs 100 crore in Godrej Consumer Products. Additionally, Godrej Consumer Products is mobilizing Rs 400 crore on a rights basis. The proceeds of the rights issue would be utilised for funding capital expenditure, payment of certain debts, investing in subsidiary - Godrej Netherlands BV and its joint venture Godrej SCA Hygiene.

Tata BP To Raise $78 Mn For Solar Energy Investments

Mumbai: Tata BP Solar, a joint venture between Tata Power and BP Solar, has signed an agreement with Calyon Bank (Credit Agricole CIB) and BNP Paribas to raise Rs 3.1 billion to fund its 128 MW solar cell expansion project. The project, located in Bangalore, is in an advanced stage of implementation, eventually totalling 180 MW solar cell manufacturing capacity. The current production line''s manufacturing capacity is some 50 MW per annum.

Tata BP, India''s leading solar photovoltaic and solar water heater manufacturer, delivers products and solutions that serve both the Indian and global markets, earning substantial foreign exchange earnings for India while also increasing product supply locally. During 2006-07, Tata BP achieved Rs 6.7 billion sales revenue and is poised to exceed $208.7 million during 2007-08. India''s growing solar market currently consumes about 1 per cent of the world''s photovoltaic products.

FII Activity On 17-03-2008

The FIIs on Monday stood as net seller in equity. The gross equity purchased was Rs3,545.60 Crore and the gross debt purchased was Rs0.00 Crore while the gross equity sold stood at Rs3,674.40 Crore and gross debt sold stood at Rs0.00 Crore. Therefore, the net investment of equity reported was (Rs128.80 Crore) and net debt was Rs0.00 Crore.

FII Activity On 14-03-2008

The FIIs on Friday stood as net seller in equity. The gross equity purchased was Rs3,457.70 Crore while the gross equity sold stood at Rs3,630.20 Crore. Therefore, the net investment of equity reported was (Rs172.50 Crore)

Jindal Stainless Mulls Rs 6,000cr Expansion

Haryana: Jindal Stainless mulls to invest Rs 6,000 crore over the next two years to expand its manufacturing capacity. The bulk of this investment will be made in the phase-II development of its stainless steel plant in Jajpur, Orissa. They will invest about Rs 5,600 crore for setting up capacity of 8 lakh tonnes per annum of steel in Jajpur. The plant will be commissioned by 2012. The company will borrow Rs 3,200 crore from Indian and foreign banks for the project, while Rs 1,000 crore will be raised via external commercial borrowings. Another Rs 1,200 crore will be infused via internal accruals. The promoters will invest equity of the balance amount of Rs 200 crore. The investment in Hissar plant will be made mainly via internal accruals. With new capacity being planned in two phases of 0.8 million tonnes each in Orissa, the total capacity of the company will be 2.5 million tonnes by 2012, making Jindal one of the largest integrated stainless steel manufacturers in the world.

Maharashtra Inks Agreement With Cummins For Unit In Satara

Mumbai: The Maharashtra Government has tapped Rs 1,776 crore in the latest round of investments. On March 15, seven memorandum of understanding were signed by the Industries Department for opening diverse manufacturing facilities in the State, which will come up in the next three years. Over last the three years, the State Government, which has attracted an investment of Rs 1.14 lakh crore, has cleared 93 mega projects. The Maharashtra Chief Minister, Mr Vilasrao Deshmukh, said that the majority of investments were coming up in relatively backward districts such as Aurangabad, Nagpur and Satara. Cummins group inked three MoUs with a total investment of Rs 900 crore. The group would be setting factories in 150-acre area near Phaltan, Satara for producing engines for trucks and buses and generator sets.

iGATE Global Solutions To Invest $1.8 Bn In Australia

Melbourne: India based global integrated technology and operations company iGATE Global Solutions Ltd. will be investing $1.8 million and creating up to 40 new jobs in the picturesque and affluent historic gold mining city of Ballarat in Australia. Ballarat, only 70 minutes drive from Melbourne, has not only been seeking Indian students and migrants, but also investment from Indian companies.

Investment Barriers Must Go

The Third Ministerial meeting of the South Asian Association for Regional Cooperation Free Trade Agreement (SAPTA) hosted by India on March 3, 2008 in New Delhi, saw India pruning its ‘Negative List’ from 744 items to around 500, for the Least Developed Countries (LDCs) of the South Asian region such as Bangladesh, Bhutan, Nepal and Maldives.

India has been on an overdrive in eliminating duty on a range of items to LDCs under the FTA route in recent years and now maintains just 500 items in the ‘negative list’ where duty concession could not be exchanged.

It is true that regional cooperation is a sure-fire route to consolidating gains of development among contiguous countries as the North Atlantic Free Trade Agreement (NAFTA) had demonstrated in the case of the US, Canada and Mexico. Though SAARC has been in force for over two decades, progress and performance on many fronts remain patchy because of lack of political will.

Business Line spoke to the Minister of State for Commerce, Jairam Ramesh, on a range of issues that have hobbled this grouping from achieving tangible gains. Ramesh had visited Bangladesh, Sri Lanka and Pakistan and is due to visit Nepal, Bhutan, Pakistan and Afghanistan before end-June 2008.

Always outspoken, Ramesh minces no words when he declares that “India’s globalisation is incomplete without closer engagement in South Asia. India cannot do bypass surgery on South Asia-this notion in India that we can be a global player and couple our economy with the American economy bypassing our own neighbours - we can’t couple with America and decouple from South Asia - is not possible. We need to understand that the foundation of our globalisation rests on closer regional cooperation in goods, services and, most importantly, in investments.”

Deploring the glacial pace of movement on these matters as well as on border trade, Ramesh says, “I have been trying to get across in the last two years that the notion of border trade to build infrastructure and to promote trade in the border - it is really trade at the border, as I don’t like the epithet border trade - we must move from border trade that is restrictive and list-based, to MFN (most favoured nation) trade at the border. We have to build infrastructure for this”. He concedes that India has fast forwarded tariff liberalisation programme (TLP) for LDCs within SAARC - brought it to zero for the LDCs and has only a negative list and this also “we decided to prune substantially”.

“In Petrapole (India-Bangladesh border trade area in West Bengal) I can get Grameen mobile phone but not BSNL. In Nathula, I can get China Telecom but not BSNL because of some outdated security regulations which we have to give it up”.

Excerpts from the interview with Ramesh: On Non-Tariff Barriers (NTBs): We have conducted a detailed analysis of 50 NTBs that we had asked our trading partners to notify - both non-tariff and para non-tariff barriers. A majority of them had been notified by Pakistan, Bangladesh, Nepal and these countries had notified bulk of the barriers that India imposes. This was shared by all members of SAFTA.

The main thing is that our testing and certification procedures (TCPs) for import of items such as food and textiles have to undergo a major change. This process has already begun. We have accepted the principle of mutual agreement our standards institutions recognising their counterparts in other SAARC members. Once we have this Mutual Recognition Agreements of standards across the border, we accept the TCPs of these countries which are accredited to the Bureau of Indian Standards (BIS), and then much of what is recognised as NTBs will actually go.

There is no doubt that our import procedures are somewhat complicated and non-transparent. We are going to do documentation on that so that exporters in these countries who complain would be satisfied.

We do recognise that we impose NTBs to protect our industry. After all, the fact that we do not allow import of palm oil through Kochi and Beypore port is an NTB. We should not be defensive about NTBs which we impose because of domestic compulsions. We must recognise it and we must be upfront about it.

India, being a dominant power in the region, has the responsibility to address opaqueness and non-transparency because this will, substantially, earn goodwill.

On trade in services and Investment: We have got the Research and Information System (RIS) study on the potential for trade in services, which is the next phase after trade in goods. RIS is going to draft a SAARC Framework Agreement on trade in services by June 30, 2008. We also have a SAARC Framework Agreement on Investment Promotion, which is under discussion.

On investment, we still don’t allow FDI from Pakistan. I have written to the Prime Minister that just as we have removed the ban on FDI from Bangladesh, we must now remove the ban on Pakistan. It does not make sense to talk about a draft SAARC Framework Agreement on Investment Promotion if India imposes barriers on investment. SAFTA has progressed but the more important issue to address is investment. Pakistan and Bangladesh are worried that because of SAFTA if they open up trade, it will work to their detriment.

As it is, Bangladesh’s exports to India are about one-tenth of its imports from India. In the case of Pakistan, its imports from India are about two-times of its exports to India. So there is a very substantial trade deficit both these countries have with India and similar is the case with Nepal.

The only way the trade deficit issue can be addressed is through investment. By aggressively pushing Indian companies into these countries and making investments there and using these countries to buy back from them is the next big thing we can do.

It is not just Indian companies going into these countries for investment. Sri Lankan companies are now investing in India. Brandix Apparel in Visakhapatnam, a Sri Lankan joint venture, is planning to invest $1 billion over the next seven years. MAS, another textile company from Sri Lanka, is planning to invest about $200 to $250 million in the next two to three years. A large number of Bangladeshi firms in pharmaceuticals and textiles want to invest in India and I am sure that Pakistan companies too would be willing to do the same.

When I visited Maldives recently, a number of Maldivian entrepreneurs showed interest to invest in tourism in India. Why can’t we allow them to invest in Lakshadweep, Minicoy and Andaman and Nicobar Islands leveraging their expertise in this brand of tourism?

On border trade: We have an ambitious Rs 950-crore proposal to build infrastructure in 14 land customs stations in the border areas with Bangladesh, Pakistan, Nepal, Myanmar and China to create modern facilities of our international trade at these LCS. We have a number of proposals to open up more LCS in the North-East to improve connectivity with China, Bangladesh, Myanmar and we are pursuing them diplomatically.

We intend to establish a Land Ports Authority. A Bill to this effect is to be introduced in the current session of Parliament to manage all the land ports efficiently through infrastructure improvements. We need to improve rail links in South Asia. We need a multi-modal transport initiative to improve connectivity among neighbours to bring about closer integration.

Govt Approves Essar, Teikoku Investment Plans

New Delhi: India on Friday approved 18 foreign direct investment proposals worth Rs 1553 crore ($384 million), including by Essar group, Japan's Teikoku Piston Ring Co and French insurer Societe Beaujon.

The finance ministry said in a statement India's Essar group plans to set up a holding company with foreign equity at a cost of Rs 560 crore and invest in India's booming financial sector.

Teikoku plans to set up a wholly owned venture in India with an initial investment of Rs 40 crore to make auto parts.


Paris-based Societe Beaujon plans a Rs 191 crore investment in an insurance company in India, the ministry said.

Jindal Stainless To Make Investments In Proposed Units

Mumbai: Jindal Stainless Ltd said on Thursday it would invest up to Rs 500 crore over two-three years in a wholly-owned unit it would set up in India.

The company would also invest up to $100 million in another wholly-owned unit planned in Singapore, it said in a statement.

Education Major Pearson To Enhance Investment In India

Chennai: Education major and Financial Times publisher Pearson will increase its investment and involvement in India substantially. Speaking to Business Line, Khozem Merchant, Deputy Chairman, Pearson India, said, “We want to roll out our services in a way that establishes our footprint as that of an education company.”

Emphasising that Pearson’s education services were much more than just textbooks, Merchant said that worldwide, the company has a significant presence in testing and assessment, tuition, professional tuition, accreditation and validation and online education and its accreditation

“That’s about $5 billion of educational services, and we want to try and reproduce some of those in India, which we believe will be achievable with partnerships,” he said.

In India, the company’s presence is confined to the field of higher education and a schools’ publishing division but the education space is vastly larger than that, he added.

The partnerships could take the form of equity arrangements, joint ventures or licensing.

The talks are at a very initial stage and the company still needs to identify which parts of the country are potential markets for the expertise Pearson has to offer and with who best it can partner.

Merchant said the company had not yet arrived at an estimate of the investments needed for expanding its presence in India. Pearson has a “fairly fundamental commitment to this market, which will be supported by capital but more importantly by an extraordinarily deep reservoir of educational services,” he said.

Pearson not only produces the material for its services but also puts in place the processes by which the learning is dispersed.

On queries about Indian content, he said there is quite a considerable amount that is specific to India but also content from elsewhere with minor modifications. “So much of the desire in the Indian industry is for a global workforce,” he said, adding that Pearson’s aim is to come here in a meaningful and substantial way to fill the talent crunch.

“Part of the task ahead is to roll out our brand of Pearson,” says Merchant, in reply to a query that Pearson itself is not familiar while its units, publisher Penguin and Financial Times, are well-known.

A press release from Pearson says that Penguin Books India sales in 2007 grew 72 per cent and were just short of Rs 100 crore, and that the schools division boosted Pearson Education sales in India by 61 per cent.

Budget: The Missing Long-Term Investment

The Budget 2008-09 seems to have been designed based on a one-size-fits-all formula, focusing on small and marginal farmers, consumers, social development, education and health, infrastructure, and a large number of tax-payers. The budgetary proposals have reduced overall tax burden by Rs 1,39,593 crore over the Budget estimate of Rs 54,83,122 crore for 2007-08.

The major reductions have been effected in excise duty on production of consumer goods and customs duties on import of raw material, capital goods and inputs for industry. These concessions are expected to augment demand for consumer goods and services, likely to result in higher production and larger employment.

The next step, of raising I-T exemption limits and the limits for seniors, will enhance household incomes and may result in higher savings capacity and greater consumption. As such, the economy may face demand pressures and a surge in inflation in 2008-09 unless there is an adequate supply of goods and services. In a nutshell, the above relaxation in the Budget will only result in a short-term spurt in economic growth.

Capital expenditure

Government capital expenditure is a pace-setter for long-term investment in infrastructure, construction activities and investment in heavy industries.

Surprisingly, the Budget proposes massive cuts in capital expenditure, from Rs 1,22,621 crore as per the revised estimates for 2007-08, to Rs 92,765 crore, budgeted for 2008-09, reflecting an absolute downward slash of Rs 29,856 crore.

Alternatively, capital expenditure will form just 12.3 per cent of total Central expenditure in 2008-09, against 18 per cent in 2007-08. The Budget, thus, will result in a drastic slump in the proportion of government investment compared with the 19.3 per cent for 2004-05, 23.5 per cent 2003-04 and 18 per cent for 2002-03. Such a fall in investment expenditure can result in lower demand for investment goods.

However, overall investment in the economy would grow due to entry of private sector in power generation, communication and manufacturing industries.

Capital expenditure in public sector would not have been sized down if interest payment by government had not increased from Rs 1,71,971 crore in 2007-08 to Rs 1,90,807 crore in 2008-09 and total debt service was not as high as Rs 5,26,038 crore in 2008-09. This is a consequence of heavy market loans, short-term borrowings and other borrowings of government from non-RBI sources.

Borrowing to repay

A cruel fact is that more than a third of government revenue is swallowed by debt servicing and that the government often resorts to market borrowing to pay debts. On top of borrowings, in the present Budget, the Government has issued bonds instead of giving subsidies to Food Corporation, and the oil and fertiliser sectors.

This is a mechanism to contain the deficit financing for the present but, in the long term, the Government will have to redeem these bonds by, again, resorting to borrowing.

Though the revenue deficit is declining and is placed at 1.1 per cent of GDP for 2008-09, we have to be cautious and vigilant on bulky revenue expenditure on current account. The Government has shown a commendable performance by reducing revenue deficit consistently but by next two years revenue account should show surplus of at least 2 per cent.

This surplus can be used for capital expenditure and is achievable if receipts from PSU disinvestment are used to repay government debt.

MMTC Signs Agreement With Swiss Firm For Gold Refinery

New Delhi: MMTC has signed a pact with Swiss metal company PAMP to set up a gold refinery in Sohna, Haryana. The alliance is being set up with an initial investment of $50 million in the first phase, and is likely to be operational later this year. The refinery will have an initial gold refining capacity of 360 tonnes and gold medallion manufacturing capacity of 16 tonnes. MMTC will hold 26 per cent in the joint venture and the private partner 24 per cent. PAMP is currently the largest importer of gold. There are 29 organisations comprising some banks, which are importing gold. The company has planned the idea of setting up of a regulator for the mining industry on the lines of a regulator in the telecom industry.

Mahindra Intertrade Sets Up Electrical Steel Plant In Gujarat

Vadodara: Mahindra Intertrade Ltd (MIL), a wholly owned subsidiary of Mahindra & Mahindra Ltd (M&M), on March 12 opened an electrical steel processing plant here. The company has initially infused Rs 30 crore on the plant, set up in 10 acres, to operate as a one-stop shop for processed electrical steel requirements. It will manufacture laminations for transformer cores, giving a high-tech processing back-end for transformer OEMs located in Gujarat, which has recently saw soaring growth in the power sector led by MNCs such as ABB.

The plant''s location near Vadodara ensures proximity of the facility to power transformer manufacturers most of whom are located in Central and Western India. The domestic transformer industry is set to gain from the strong demand hoped from reforms in the power sector. The Government has also transferred focus from adding generation capacities to strengthening the distribution system. MIL had opened the country''s first steel service centre Mahindra Steel Service Centre, in 1993, near Pune together with its Japanese partners Mitsubishi Corporation and Nissho Iwai Corporation for home appliances and transformer industries.

FII Activity On 12-03-2008

The FIIs on Wednesday stood as net seller in equity. The gross equity purchased was Rs4,610 Crore and the gross debt purchased was Rs0.00 Crore while the gross equity sold stood at Rs5,782.40 Crore and gross debt sold stood at Rs0.00 Crore. Therefore, the net investment of equity reported was (Rs172.40 Crore) and net debt was Rs0.00 Crore.

IOL Chemicals To Invest Rs 75 Cr In Ulcer Drug

Mumbai: IOL Chemicals & Pharmaceuticals Ltd said on Wednesday it will invest Rs 75 crore to manufacture anti-ulcer drug rabiprazole.

Vedanta Group Investing Rs 20,000 Cr In Bengal

Kolkata: The $ 6.5-billion turnover Vedanta Group will set up aluminium manufacturing capacities in Burdwan district of West Bengal at an investment of Rs 20,000 crore. Budget

A `Memorandum of Development’ in this regard was signed here today between the Vedanta Group and the West Bengal Industrial Development Corporation Ltd.

Among those present at the development agreement signing ceremony were the West Bengal Chief Minister, Buddhadeb Bhattacharjee, West Bengal’s Minister of Industries and Commerce, Nirupam Sen, and the Chairman of the Vedanta Group, Anil Agarwal.

As part of its roadmap in this regard, the Vedanta Group has acquired, and will revive, the now-defunct West Bengal Aluminium Corporation that was set up in 1952 with an installed capacity of 30,000 tonnes per annum (tpa).

Along with this, Vedanta will also set up new capacities with a view to taking the total smelter capacity to 6.5 lakh tpa. Additionally, a power plant of 3000 MW capacity would be set up in two phases of 1,500 MW each. The twin projects will require 1,000 acres of land and are scheduled for completion within the next two years.

Speaking on the occasion, Buddhadeb Bhattacharjee, said the State Government has proposed to set up an aluminium park close to the Vedanta project. Investors would be encouraged to set up aluminium downsteam units in the aluminium park.

Bhattacharjee said aluminium was a “green metal” and had the potential to replace wood in various applications. People should be encouraged to use more aluminium, especially in the context of the growing problem of global warming, he said.

Nirupam Sen said work on the project could take off immediately on the 270 acres of land that is already in the possession of Vedanta. The State Government would make available additional land that would be required for setting up the twin projects.

Anil Agarwal said the project would meet the requirements of downstream units in the small and medium sector. He expressed happiness that the project was being set up in West Bengal, which was home to India’s first integrated aluminium manufacturing plant.

GAIL Plans Arm For City Gas Supply

New Delhi: GAIL (India) Ltd will establish a separate subsidiary for its city gas distribution (CGD) and compressed natural gas (CNG) corridor business. It said that the yet to be named company will have an initial equity of Rs 200 crore and corresponding to this amount debt shall be arranged amounting to Rs 300 crore (considering 1.5:1 debt:equity ratio). The establishing of the subsidiary will also help in part for compliance of requirement of unbundling of the business for GAIL, which may come in future. To start with, 17 cities have been selected for such projects entailing an initial investment of Rs 500 crore by 2012. The subsidiary company will engage in distribution and marketing of CNG as fuel for vehicles (inter-city as well as intra-city), piped natural gas for domestic/commercial/ industrial purposes and auto LPG as fuel for transport vehicles in various cities in India and abroad.

The new subsidiary will also form partnership with gas producers/strategic partners for implementation of the city gas projects as per the strategic decisions taken by GAIL. The subsidiary company will also take up investment in and establishing of infrastructure in various cities and along the national highways for building CNG corridors which includes, among others, natural gas compressor stations, laying of the pipelines from city gate station(s) to the consumption areas and associated facilities, setting up of distribution points/retail outlets for CNG/auto LPG and transport gas through mobile cascades/lorries.

India May Overtake UK As Favoured Investment Destination

London: India may soon overtake Britain as a favoured investment destination in the world unless Chancellor Alistair Darling cuts taxes in Wednesday's budget, a leading consultant agency has said in its report.

Businessmen here have demanded a radical overhaul of corporate tax. Thousands of people of Indian origin are keenly awaiting the budget amidst reports that non-domicile residents in Britain are expected to be taxed 30,000 pounds.

In its report titled "Finding its way: a return to the competitive path for Britain?'', Ernst & Young recalled that in its European Attractiveness survey for 2007, UK had been overtaken by India and Russia and equalled by Poland.

Chris Sanger, Head of Tax Policy at Ernst & Young, said: "Other countries and regions in Europe have stolen a march on the UK by offering fiscal incentives and tax breaks that are proving to be a great success.”

Although Gordon Brown as Chancellor announced the reduction in the main rate of corporation tax from 30 per cent to 28 per cent from next month, many would argue that is just not enough to make the UK a competitive place to do business.

In a report titled, 'UK business tax: a compelling case for change', the Confederation of British Industry said that the UK had "now reached a tipping point''.

MSP Steel To Invest Rs 400 Cr For New Plants

MUMBAI: MSP Steel & Power Ltd said on Monday it plans to invest Rs 400 crore in setting up two 5 million tonnes per annum iron ore beneficiation plants in Madhya Pradesh.

Mastek Acquires US-Based Systems Task

Mumbai: IT solutions vendor Mastek Ltd has bought Systems Task Group (STG) International a provider of enterprise solutions for the property and casualty (P&C) insurance industry in an all-cash consideration of $29 million (Rs 116 crore). The take over will enable Mastek, which has a strong presence in the life and annuity segment of the insurance business, to gain a foothold in the P&C insurance space. As per Celent Research, IT spending by P&C insurers is expected to cross $20 billion by 2010 from $16 billion in 2007. STG''s contribution will be reflected in Mastek''s consolidated performance partly in fiscal 2007-08 and fully in fiscal 2008-09.

FII Activity On 10-03-2008

The FIIs on Monday stood as net buyer in equity. The gross equity purchased was Rs5,447.60 Crore and the gross debt purchased was Rs0.00 Crore while the gross equity sold stood at Rs4,340.80 Crore and gross debt sold stood at Rs0.00 Crore. Therefore, the net investment of equity reported was Rs1106.90 Crore and net debt was Rs0.00 Crore.

KMOMLI Mulls Health Product

Kolkata: Kotak Mahindra Old Mutual Life Insurance (KMOMLI) Limited, a joint venture between Kotak Mahindra Bank and London-based Old Mutual plc is mulling to unveil a standalone health insurance product in the first half of 2008-09.The health insurance that they are going to unveil will be probably in the form of a Unit Linked Insurance Plan (ULIP) and is likely to offer cashless transcation facility to the subscribers. The new health insurance product will also give an option to the subscribers for infusing in equity but it will not exceed 50 per cent. At present, Kotak does not have a full-fledged health insurance product but has health covers for disabilities, critical illness and major surgeries. These health covers come in the form of rider with Kotak''s Life insurance products to those subscribers who pay an extra premium for them. Kotak Life Insurance which now has 110 branches in India is also aiming to expand its pan-India network to over 200 branches by March 2009.

Reliance Retail To Infuse Rs 180cr In Jewellery Stores In AP

Hyderabad: Reliance Retail Limited, a wholly-owned subsidiary of Reliance Industries Limited (RIL), will be opening its jewellery format stores across 12 locations in Andhra Pradesh in the next three years. The company was planning to pump in Rs 180 crore in Andhra. The locations identified by the company for opening jewellery stores include Vijayawada, Visakhapatnam, Warangal and Nellore. Reliance Jewels is another milestone in its effort to bring a unique shopping experience with assured purity of gold and certification of diamonds. The Hyderabad store was opened at an investment of Rs 25 crore.

Mastek Makes Second Insurance Acquisition In USA

Mastek Ltd on March 08, 2008 has announced the acquisition of Systems Task Group (STG) International Ltd, an IP-based enterprise solutions provider to the North American property & casualty (P&C) insurance industry. This acquisition is the second such initiative by Mastek during the current financial year, and follows the acquisition of another insurance-focused IT Company Vector Insurance Services in July 2007. Under the terms of the agreement, Masteks wholly owned US subsidiary MajescoMastek will hold 100% equity stake in STG. The consideration for this acquisition will be paid partly in cash and partly by way of future cash earn outs. Following this transaction, STG will operate as STGMastek.

Headquartered in New York with a fully integrated offshore competency centre in Mumbai (India), STG leverages its enterprise applications Renaissance suite and ParadigmASP to provide the full spectrum of solutions and services to customers in the North American P&C insurance industry in the areas of policy and billing administration, claims processing, and point-of-sales administration, The Company has about 350 employees with significant P&C insurance domain expertise and a robust customer base that includes over 35 small and mid-sized American insurance carriers.

Keeping in view that Mastek already has an intellectual property (Elixir™) and a growing market presence in the life & annuity segment that was accelerated by the acquisition of the US-based Vector Insurance Services (now VectorMastek) in July 2007, this latest transaction in the non-life segment is expected to noticeably strengthen Masteks market position and expand the opportunity pipeline in the overall insurance vertical.

Mahindra Earmarks Rs 2,250 Cr To Develop New Vehicles

Mahindra & Mahindra (M&M) has decided to spend Rs 2,250 crore in the next two years to develop new vehicles to be unveiled by 2009 end. The company has been developing four new platforms simultaneously in the utility and multi-purpose vehicle space aimed to further strengthen its presence in the non-car market.

The company has two highly successful offerings in this segment - Scorpio and Bolero. Of the Rs 4,500 crore investment planned for the company''s Chakan project, which is a part of the company''s planned capital expenditure of Rs 6,400 crore till 2010, about Rs 2,250 crore will be used to fund development of new vehicles including the Ingenio, a premium sports utility vehicle (SUV), a pick-up and a mass market platform.

The Ingenio multi-purpose vehicle (MPV), which so far has seen an investment of Rs 550 crore, will be the company''s most ambitious project after Scorpio, launched six years ago. The premium SUV project will be based on a completely new platform targetted at the Rs 14-18 lakh price bracket. The aim is to have a presence in the premium SUV segment, which has so far seen a growth of more than 60 per cent this year. The segment has been dominated by players such as Ford (Endeavour), Honda (CR-V) and Toyota (Land Cruiser Prado).

Although the SUV segment is small in size, at 1,200 units a year in the domestic market, the demand for fuel-efficient SUV''s globally in markets such as Europe and the US is very upbeat. M&M will launch its SUVs in the US in 2009, while Scorpio, christened as Goa, is sold in the European market. The mass market platform will address the demand for cargo movers designed to handle goods as well a passenger carrier too. The company is also looking at the pick-up market and planning to have a significant presence in the segment.

The A To Z Of Investing In Chinese Shares

Part-time world traveller and full-time investor Jim Rogers has been very bullish on China over the last two years. And this optimism clearly comes out in his latest book, A Bull in China - Investing Profitably in the World's Greatest Market.

"I'm such a believer in China's long-term prospects that I brought in a Chinese nanny to rear my daughter, Happy, born in 2003 and already a happy Mandarin speaker. As I've counselled before and will counsel again: get out of the dollar, teach your children Chinese, and buy commodities," he writes.

The question that crops up here is how foreign investors can invest in China to make money out of Rogers' optimism. Unlike other stock markets, China follows a split-share system.

As Rogers points out, "The answer, for the Chinese, is a 'split-share' system that allows Chinese companies to issue different classes of shares to domestic and foreign investors. It's an unwieldy, yet workable compromise that keeps investors coming while making the government's economic watchdogs feel relatively secure."

The split-share system starts with A shares. "On an individual basis, these are available to domestic Chinese investors only. They are denominated in renminbi, not freely convertible to international currencies. Since November 2002, Qualified Foreign Institutional Investors (QFIIs) such as large banks, funds, and securities companies with at least $10 billion in management, have been allowed to buy up to 10 per cent of a company's shares (still held in Chinese currency)," writes Rogers.

Then comes the B shares. As Rogers points out, "This class of shares was first created in the mid-1990s to be sold solely to foreigners using foreign currency. At that time, Chinese companies were attracted to the idea because foreigners eager to invest in China were at first willing to pay more per share than their domestic counterparts. So a bubble developed - but eventually popped, until people were practically giving away B shares… B shares are denominated in Hong Kong dollars on the Shenzen exchange and US dollars on the Shanghai exchange. Generally speaking, due to lower demand, the long-term performance of the B share market has lagged far behind the A share market even when the same company issues A and B shares with identical voting and dividend rights."

H shares are another form of Chinese shares. These are essentially shares of mainland Chinese companies listed on the Hong Kong stock exchange. "Many of China's best A-list companies have previously preferred the prestige and fund-raising potential of listing abroad - and that usually means listing in familiar Hong Kong. Sometimes companies can sell at better prices on foreign exchanges than at home; at other times, companies simply benefit from the exposure," writes Rogers.

The H shares are freely available to all foreigners. Similarly, shares of Chinese companies listed on the Singapore exchange are known as S shares. N shares are shares of Chinese companies listed in either the New York Stock Exchange or the NASDAQ, L shares are shares listed on the London Stock Exchange or the Alternative Investment Market (AIM) board in London and J shares are shares listed on the Tokyo stock exchange.

So, a foreign investor looking to invest in China has a lot of choice.

As Rogers writes, "A foreigner may be prohibited from buying A shares in a company listed in china, but could buy B, H, L, N, J, or S shares in the same company. Interestingly enough, Chinese domestic investors bear the brunt of the risk in China's developing market since they can invest only at home while most foreigners have more choices."

Ireland’s Saon Group To Invest €10 M In India

Pune: Ireland-based Saon Group, an online recruitment company, is all set to invest €10 million in the Indian market for setting up online city-centric job portals.

Talking to presspersons, Leslie Buckley, Chairman, Saongroup.com, said it had started its India operations in Pune in September 2007 with MyJobsinPune.com. The site is attracting more than 5,000 visitors daily with 10,000 new job seekers registering every month. It has on an average 3,000 clients advertising 4,000 jobs monthly from entry level to mid-management level for players in the IT/ITES, manufacturing, automobile, retail and BFSI sectors. The company also launched MyHyderabadJobs.com Web site recently and would now be looking at setting up the Mumbai Web site.

The company would cover five cities in the next 18 months. According to an industry study by Juxt Consult in 2007, job search is the second most preferred activity among Indian Internet users. Also, according to a survey by the Internet and Mobile Association of India, the number of users seeking jobs online had increased from 6.5 million in 2005-06 to 9.2 million in 2006-07.

Investors Must Be Encouraged To Stay For Longer Term: FM

New Delhi: Defending his budget proposal to increase short term capital gains tax rate, Finance Minister P Chidambaram today said it would encourage the investors to hold on to their investments for a longer period in the markets, which are currently volatile.

"The idea is because of volatility in the market, we must encourage investors to stay invested for longer term, and I am doing precisely that by raising short term capital gains tax from 10 to 15 per cent," Chidambaram said during his post-Budget interaction with industry chamber Assocham.

In this context, the Finance Minister recalled legendary investor Warren Buffett's advice to investors: Correct approach to the stock market is put your money in the stock market and then say stock market is closed for 10 years. And look for returns after ten years.

He said by raising the short term capital gains tax, he is also equating the levy to dividend distribution tax of 15 per cent.

"From shareholders point of view if we hold a share and receive a dividend, that dividend is subject to 15 per cent dividend distribution tax. When he sells a share and makes profit or capital gain, why should he not be subject to the same tax as 15 per cent," he asked.

He said short term capital gains and long term capital gains are not distinguished in many jurisdictions and even capital gains and income are not differentiated in many countries.

But in India, these distinctions are there historically, Chidambaram said adding the Budget has not done away with these distinctions.

India Insure Looks To Acquire Broking Firms

India Insure, Hyderabad-based insurance broking house, , is planning to acquire a couple of broking companies in the country. India Insure, which provides expert advice and assists in placing the appropriate insurance policy with the chosen insurer, was the first company to get a broking licence from the Insurance Regulatory and Development Authority in January 2003. Additionally, the insurance broking firm is the first broker to be upgraded from direct to composite status in 2006. The company has chosen to focus on the corporate and institutional market though it has been permitted to handle retail and individual business. Currently only 25 per cent of the corporate insurers are approaching insurance companies through broking houses. Three years down the line this percentage will increase to over 75.

FII Activity On 05-02-2008

The FIIs on Wednesday stood as net seller in equity. The gross equity purchased was Rs3,551.10 Crore and the gross debt purchased was Rs0.00 Crore while the gross equity sold stood at Rs4,023.90 Crore and gross debt sold stood at Rs0.00 Crore. Therefore, the net investment of equity reported was (Rs472.80) Crore and net debt was (Rs0.00 Crore).

Nippon To Invest Additional Rs 450 Cr In India Ops

Chennai: Nippon Paints, Japan-based international paint major, is planning to infuse additional Rs 450 crore in India operations in a phased manner. Till now, Nippon Paints has put in Rs 80 crore in its new green-field manufacturing facility at Sriperumbudur, near Chennai. The plant, which is set to go on stream from October this year, can manufacture 20,000 kilo litres of decorative paints a year. The company will invest another Rs 100 crore by 2009 for expanding its footprint in the Indian market. The company has also acquired 31 acres in Gurgaon to set up a new plant once the volumes pick up in India. This may involve an investment of around Rs 350 crore. Nippon India is among the smaller players in the Rs 7,500-crore Indian market for decorative paints. The company forayed into this market in mid-2006.

FII Activity On 04-03-2008

The FIIs on Tuesday stood as net seller in equity. The gross equity purchased was Rs3,420.30 Crore and the gross debt purchased was Rs0.00 Crore while the gross equity sold stood at Rs4,103.90 Crore and gross debt sold stood at Rs0.00 Crore. Therefore, the net investment of equity reported was (Rs683.50) Crore and net debt was (Rs0.00 Crore).

Accent’s On Long Term, Invest Well

By now, most of us would have a fair idea of the additional cash that is going to be available with you the next financial year, thanks to changes introduced in the Union Budget 2008.

For those who aren’t yet clear, here’s a look-in on some of the major Budget recommendations and their broad impact on the individual investor’s finances:

Income tax slabs revised.

Impact: Positive; will increase liquidity. Move is expected to leave more money in the hands of the salaried class, taking into account inflation.

Short term capital gain tax (u/s 111A/115 AD) hiked.

Impact: Negative; will reduce liquidity. Alarming as the move is for active day traders, this will ultimately go in favour of personal financial planning by reducing the urge to realise short-term gains on the market. Investors will stick to long-term financial goals, rather than go for emotional profit booking.

Tax treatment of income from reverse mortgage changed - henceforth, such income will not be taxable.

Impact: Positive for the elderly; will leave more money in their hands. Move will benefit the elderly who have immovable property but no regular cash inflow.

Section 80 C basket enlarged by adding five-year time deposit in an account under Post Office Time Deposit Rules, 1981 and deposits in an account under Senior Citizens Savings Scheme Rules, 2004 for not less than 5 years.

Impact: Positive; more options for savings. Move will encourage small savings, besides giving the investor more options.

Service tax introduced on asset management services provided under unit-linked insurance plans (Ulips).

Impact: Neutral in short term; negative in long term. This could work against investors accumulating their retirement corpus through Ulips. Over the long term, it has the potential to reduce the corpus significantly.

It is the last point that we will dwell upon at some length. Let us consider its impact on the maturity value of a Rs 10 lakh investment in any Ulip for ‘n’ number of years.

The insurer charges a nominal 1.5 per cent per annum as fund management charges and it is assumed the fund will grow at a compounded growth rate of 12 per cent p.a. The first column projects the maturity value prior to the Budget proposal and the second column projects the maturity value post the proposed introduction of service tax on asset management services at 12.36 per cent of the fund management charges.

As the table shows, the maturity value of the funds invested is significantly eroded following the budgetary changes.

As always, it would be in the interest of investors to understand the possible impact of the changes introduced before settling for any investment option.

Electrotherm Plans Rs 100 Cr Investment

Chennai: Enthused by the market response for its battery-run YObykes, Electrotherm (India) Ltd is planning to invest at least another Rs 100 crore in its electric vehicles division Indus Elec-Trans.

According to Avinash Bhandari, Director-Operations, Electrotherm, the funds will be utilised for R&D to develop new models and for adding facilities in its plant at Kutch.

Three verticals

The Rs 730-crore BSE-listed company is into three verticals – engineering, steel division and electric vehicles. Its engineering division, the mainstay of the company, manufactures melting and refining furnaces, heating and hardening equipment used in steel and foundry industry and the steel division is making products, including TMT bars, construction steel, stainless steel and DI pipes.

Bhandari was in Chennai to launch the company’s flagship e-bike YOSpeed. With this launch, the product is now nationally present, he said. Priced at Rs 36,000, YOSpeed is available in five colours. The 750-W vehicle can seat two and can achieve a maximum speed of 45 kmph. “A normal 4-6 hour recharge can run the bike 60-70 km,” he said.

The company currently has over 200 dealers across the country. In the last two years, the company has sold over 45,000 units. Now, with the national presence, “we expect to sell over one lakh units next financial year,” said Bhandari. The company has also tied up with ICICI and Citibank for vehicle financing.

After-sales service

To a question on facilities for repairing, servicing and availability of spares, he said since the technology is in-house and 80 per cent of the product is indigenised, there is no difficulty. Apart from having company-trained engineers and mechanics at its dealer workshops, Electrotherm is in the process of educating road-side garages and mechanics on the nitty-gritties of the vehicle and fixing small problems.

In 2006, the company diversified into electric vehicle manufacturing and invested Rs 60 crore for developing the technology in-house and creating a 2.8-lakh-bikes-a-year capacity at Kutch.

In March 2007, ICICI Venture Funds invested Rs 82 crore for 14.98 per cent stake in the company.

FII Activity On 03-03-2008

The FIIs on Monday stood as net seller in equity. The gross equity purchased was Rs3,800.90 Crore and the gross debt purchased was Rs0.00 Crore while the gross equity sold stood at Rs4,045 Crore and gross debt sold stood at Rs0.00 Crore. Therefore, the net investment of equity reported was (Rs244.10) Crore and net debt was (Rs0.00 Crore).

NTPC To Infuse $1.8bn In New Power Plant

MUMBAI: State-run power producer NTPC Ltd said on Feb 29, it will pump in $1.84 billion in establishing a 1,320 megawatt power plant in Bihar. The company said on Feb 28, it planned to establish a power plant with a similar capacity in a joint venture with a utility owned by the neighbouring state of Uttar Pradesh.

HDFC To Infuse Rs 4,000cr To Keep Up Stake In HDFC Bank

MUMBAI: Housing Development Finance Corporation will infuse over Rs 4,000 crore in HDFC Bank to maintain its shareholding in the leading private sector lender, following its proposed amalgamation with the Centurion Bank of Punjab. The board of directors of HDFC Bank had earlier said that in the event of the amalgamation with Centurion Bank of Punjab, it would consider making a preferential offer to its promoter, Housing Development Finance Corporation Ltd, to enable HDFC to maintain its shareholding percentage in the bank. On February 23, HDFC Bank and Centurion Bank of Punjab had accorded, in principle, to merge to create the country''s largest private sector financial institution in terms of branch network. The Board of Directors at its meeting approved the draft scheme of amalgamation and the merger pact and reaffirmed the share swap ratio and the issuance of one equity share of Rs 10 each of the HDFC Bank for every 29 equity shares of Re 1 each held in Centurion Bank of Punjab Ltd.

Ramco Systems To Infuse Rs 90cr In Chennai Centre

Chennai: Ramco Systems will pump in around Rs 90 crore in a new software development centre in the heart of the city. The centre will be ready in the next 18-24 months and can accommodate around 2,000 employees. The Chennai-based IT company recently sold part of its building to its parent, Ramco Group, for Rs 43.22 crore. The year 2008-09 will witness Ramco Systems turning profitable. The recently unveiled full-fledged software-as-a-service ERP will enable the company to have better results from next year.

The new solution enables clients to subscribe for a software module on a monthly fee. For instance, a small automotive component company need not purchase the entire ERP package. Instead, it can start with a finance module and extend to purchase, sales and inventory management depending up on the growth. In the next 18 months, Ramco hopes to have around 10,000 users for the new product. This will bring in revenues of around Rs 6.5 crore every month.

Left, Opposition Pick Holes In Budget Proposals

New Delhi: In the biggest ever one-time sop in independent India, Union Finance Minister P Chidambaram on Friday waived off farm loans worth Rs 60,000 crore to 4 crore small and marginal farmers.

United Progressive Alliance Chairperson Sonia Gandhi congratulated the government for the loan waiver package for farmers announced in the Union Budget.

"Hamare UPA sarkar ne jo kisano ke liye kiya hai, jo karz ki mafi ker rahe hain woh ek krantikari kadam hai. Ek aithihasik kadam hai. Mein Prime Minister badhai deti hoon aur hamare sabhi kisan bhaiyon ko bhi badhai deti hoon (UPA government has done a commendable job by announcing the loan waiver for farmers. This is an historic step. I congratulates the Prime Minister and the farmers)," Sonia said after the presentation of the Budget in Parliament.

The Communist Party of India-Marxist (CPI-M) is not entirely happy with the Budget. Its Politburo member Sitaram Yechury said the loan waiver package won't be of much help to farmers.

"This loan waiver is concerned only with those farmers who have taken loans from nationalised banks, cooperatives or governmental institutions. This is unfortunately only 1/3rd of the overall farming community. Two thirds of them are victims of private moneylenders. While 1/3 rd will get relief, which is welcome, but no measures have been taken for relief for the others. The bulk of suicides of the farmers are taking place in those sections," he said.

But Prime Minister Manmohan Singh justified the waiver.

"Our farmers are our biggest businessmen. They produce some of the most essential commodities and if they are depressed then it is not good for the country. I sincerely believe that our government has been generous in terms of its response. It is also an unorthodox response but considering the amount of depression that prevails in the agricultural sector, this is in response that is fully justified," the Prime Minister said.

The Opposition, too, looked to drill holes in the UPA's last Budget. Janata Dal (United) leader Digvijay Singh said that the Budget is an election-oriented one and does not help the common man.

"The same things which they have done today could have been done fours years back also. Of course we could have done the same thing. We did not do it so we paid the price. It is not at all a good Budget. I consider it a samvedaanheen (without compassion) Budget because 25,000 farmers have lost their lives. Had this waiver come earlier their lives would have been saved. It is not too late. It is a question of vote since you are looking for vote you are doing all this. But you are not concerned with the common man," Digvijay Singh said.

On Populist Track, Income Tax Slabs Raised

New Delhi: Finance Minister P Chidambaram announced major – and arguably populist – changes in the income tax slab.

The threshold of exemption for all income tax assesses has been raised from Rs 1,10,000 to Rs 1,50,000.

The minimum benefit to a person with an annual income of Rs 1.5 lakh at the threshold will be around Rs 4,000.

New tax slabs will be:

* 10 per cent for 1,50,000 to 3,00,000

* 20 per cent for 3,00,000 to 5,00,000

* 30 per cent above 5,00,000

Threshold for small service providers has been raised from Rs 8 lakh to Rs 10 lakh.

For women, the income tax limit goes up from Rs 1.45 lakh to Rs 1.80 lakh.

An additional deduction of Rs 15,000 under Section 80D has been allowed to an individual who pays medical insurance premium for his/her parents.

Senior Citizens Saving Scheme 2004 and the Post Office Term Deposit Account have been added to the basket of saving instruments under Sec.80(C) of the Income Tax Act.

Chidambaram also introduced an additional deduction of Rs 15,000 for taxpayers towards payment of medical insurance for parents. This would be in addition to the Rs 1 lakh limit for savings under Section 80C of the Income Tax Act.

Rs 60,000 Cr Farmer Loan Waived | No Waiver For Vidarbha

New Delhi Finance Minister P Chidambaram on Friday announced a Rs 60,000-crore relief package for farmers, including complete waiver of loans given to small and marginal farmers.

Presenting his last Budget before the General Elections, Chidambaram announced waiver of Rs 50,000 crore worth of loans to small and marginal farmers and a settlement scheme for other farmers that would cost the exchequer another Rs 10,000 crore.

Loans for marginal farmers holding one hectare land and small farmers holding upto two hectares of land to be waived. Agriculture loans disbursed by rural banks, RRBs and Cooperative banks before March 2007 and overdue on December 2007 will also be waived.

Chidambaram said that according to estimates, three crore marginal and small farmers would benefit from the Government's amnesty.

Under the one-time settlement scheme that will benefit another one crore farmers, the Government will give a rebate of 25 per cent on payment of outstanding loans.

The agricultural credit of scheduled banks is estimated at Rs 2,40,000 crore in the current fiscal and it would go up to Rs 2,80,000 crore in 2008-09.

Implementation of debt waiver and debt relief will be completed by June 30 this year.

The Finance Minister has also announced agriculture credit target to be Rs 2,80,000 crore for 2008-09. The agriculture growth for whole year estimated at 2.6 per cent.

Chidambaram has announced Rs 644 crore for National Agriculture Insurance Scheme, which will be continued pending evolving an alternative crop insurance scheme.

PC On Poll Mode; Waives Farm Loans, Ups Tax Slab

New Delhi: Finance Minister P Chidambaram on Friday presented a Budget which waived off loans worth Rs 60,000 crore to small farmers, hoped for an 8.8 percent growth and announced several social sector schemes.

Chidambaram, presenting the fifth and last full budget of the UPA government, allotted more funds on health and education.

He began his speech with concerns over inflation, which he blamed on domestic and global factors, and said the intention of his government was to make growth more inclusive with a focus on social sectors and agriculture.

"The economy is expected to grow by 8.7 percent," he said, referring to the growth for this fiscal projected by the Economic Survey tabled by him a day earlier. "But I personally think, the growth would be slightly higher at 8.8 percent."

Maintaining that keeping inflation under check was one of the “cornerstones” of the Government's policy, Chidambaram said the 11th Five Year Plan had begun on a robust note.

"Keeping inflation in check will be cornerstone of UPA government's policy," he said. "More can be done to improve inclusive growth," he said.

Best education for all

Chidambaram announced a 20 per cent hike in education budget—from Rs 28,674 crore to Rs 34,400 crore—and the setting up of more IITs and IIMs. Three new IITs will be set up in Andhra Pradesh, Bihar and Rajasthan.

Chidambaram also proposed setting up of national knowledge centres and allotted Rs 100 crore to the Information Technology sector.

“We must encourage our students to take up studies in science” and announced various scholarships for students pursuing the subject," he said

He also announced Rs 13,100 crore for Sarva Shiksha Abhiyan, Rs 8,000 crore for mid-day meal scheme and Rs 4,554 crore for secondary education scheme. With a clear emphasis on rural education, FM announced 410 additional Kasturba Gandhi Vidyalaya will be set up in backward blocks.

Axe the tax

Chidambaram announced major – and arguably populist - changes in the income tax slab. He said the threshold of exemption for all Income Tax assesses will be raised from Rs 1,10,000 to Rs 1,50,000, eliciting applause from the Parliamentarians. Personal income tax exemption slab for women will be at Rs 1.8 lakh.