CM

YK
ND-ND
BUSINESS
16 THE HINDU SATURDAY, MARCH 1, 2014
NOIDA/DELHI
BRIEFLY
Core sector growth
slows to 1.6%
NEW DELHI: Poor output of
coal, petroleumrenery
products and natural gas
dragged down core sector
growth to 1.6 per cent in
January from8.3 per cent
in the same month a year
ago. The index of eight core
industries grew 2.1 per cent
in December.
The eight core industries
fertilizers, cement, steel,
electricity, crude oil, coal,
petroleumrenery
products and natural gas
have a combined weight of
about 38 per cent in the
Index of Industrial
Production (IIP). Core
sector growth was 2.4 per
cent during the April-
January period of this
nancial year compared
with 6.9 per cent in the
same period of 2012-13.
PTI
U.S. economy
expands at 2.4 %
WASHINGTON: The U.S.
economy grew at a 2.4 per
cent annual rate in the
October-December
quarter, signicantly
slower than rst thought,
reecting slower consumer
spending than initially
estimated.
The severe winter weather
is expected to slow growth
further in the current
quarter, but as the snows
melt, economists believe
growth will rebound.
The Commerce
Department says the
downward revision froman
initial 3.2 per cent estimate
for the fourth quarter
primarily reected a
downgrade in consumer
spending. AP
Two-point drop in
consumer price index
NEW DELHI: Retail ination
for industrial workers
eased to 7.24 per cent in
January compared to 9.13
per cent in the previous
month and 11.62 per cent in
same month last year
mainly on account of
softening in prices of food
items.
According to a Labour
Ministry statement here,
food ination stood at 8.94
per cent in January as
against 11.49 per cent in the
previous month, and 14.08
per cent during the
corresponding month of
2013. The Consumer Price
Index Industrial
Workers (CPI-IW) for
January declined by two
points, and was pegged at
237 points. PTI
EXCHANGE RATES
Indicative direct rates in rupees a unit
except yen at 4 p.m on February 28
Currencies TT TT
Buying Selling
U.S. Dollar 61.57 61.89
Euro 84.90 85.35
Pound Sterling 102.81 103.35
Jap Yen (100 Units) 60.39 60.72
Chinese Yuan 10.00 10.09
Swiss Franc 69.79 70.17
Singapore Dollar 48.60 48.86
Australian Dollar 55.16 55.46
Canadian Dollar 55.33 55.63
Swedish Kroner 9.59 9.64
Danish Kroner 11.38 11.44
NewZealand Dollar 51.80 52.08
Hongkong Dollar 7.93 7.97
Malaysian Ringitt 18.81 18.93
Kuwaiti Dinar 218.42 220.33
UAEDirham 16.76 16.85
Bahraini Dinar 163.02 164.47
Qatari Riyal 16.95 16.98
Saudi Riyal 16.45 16.49
Omani Riyal 159.43 161.17
Source: Indian Bank
BULLION RATES
February 28 rates in rupees with
previous rates in brackets
Chennai
Bar Silver (1 kg) 47,000 (47,430)
Retail (1 g) 50.30 (50.80)
24 ct gold (10 g) 30,800 (30,650)
22 ct gold (1 g) 2,880 (2,865)
Delhi
Silver 46,560 (48,300)
Standard gold 31,300 (31,500)
Sovereign 25,500 (25,500)
Import tariff value on
gold, silver hiked
NEW DELHI: The Government
on Friday hiked the import
tariff value on gold and
silver to $433 per 10 gram
and $699 a kg, respectively,
taking into account the
volatility in the precious
metals global prices. Till
Thursday, the import tariff
value on gold was $421/10
gram, while on silver it
stood at $663 a kg. PTI
MUMBAI: Voltas and Dow
Chemical Pacic (Singapore)
Pte Ltd. have agreed to set up
a joint venture company in
India to tap the growing wa-
ter and waste water treat-
ment market. The proposed
new company, Voltas Water
Solutions Private Ltd., will be
an equal partnership joint
venture.
The company will market
and distribute standard pack-
aged water treatment sys-
tems and waste water
treatment systems to resi-
dential and commercial com-
plexes and light industrial
markets.
The entitys operations
would include designing, pro-
curing, testing, marketing,
selling and servicing of such
standard water treatment
systems and waste water
treatment systems. The wa-
ter and waste water treat-
ment market targeted by the
new company is largely cater-
ed to today, by unorganised
players. The new joint ven-
ture will provide a branded
and differentiated product
line, with a focus on quality
and service delivery, Voltas
said.
Special Correspondent
Voltas, Dow Chemical
form joint venture
To tap the growing
water and waste
water treatment
market
NEW DELHI: Rejecting allega-
tions of money laundering,
Reliance Industries, on Fri-
day, said the investment
made by Biometrix was from
loans raised from the Singa-
pore branch of ICICI Bank.
Biometrix investment
Circulating what it said
were disbursement notices
issued by the Singapore
Branch of ICICI Bank to Bio-
metrix to cover the entire
amount
investment by the rm in
Indian entities, RIL said un-
acceptable controversy and
disrepute has been inicted
on it by false and defamatory
allegations. In a statement,
the company said AAP leader
Prashant Bhushan had made
false and baseless allega-
tions against it in proceed-
ings led in November, 2012,
in the Delhi High Court.
These allegations have been
appropriately responded to,
and the disbursement notices
of ICICI Bank have been
placed on record, it said.
Reporting Mr. Bhushans se-
lective leaks of old informa-
tion already residing in
judicial proceedings is mis-
leading global public at large
and defaming and maligning
our corporate reputation.
RIL rejects money laundering charge
NEW DELHI: The scal decit in
the 10 months through Janu-
ary, 2014, has overshot re-
vised estimates of Rs.5.24
lakh crore for this scal pro-
vided by Finance Minister P.
Chidambaram in his interim
Budget last week.
According to the data re-
leased by the Controller Gen-
eral of Accounts (CGA) on
Friday, the scal decit dur-
ing April-January 2013-14
worked out to be Rs.5.32 lakh
crore or 101.6 per cent of the
revised estimates.
The government had in the
Budget for 2013-14 proposed
tobring downthe scal decit
to 4.8 per cent of GDP or
Rs.5.42 lakh crore. This g-
ure, however, was revised
downwards in the interim
Budget to Rs.5.24 lakh crore
or 4.6 per cent of the GDP.
Withactual gures for Feb-
ruary and March yet to come,
it would be difficult for the
government to restrict the
scal decit, which is a reec-
tion of governments market
borrowings to revised level.
As per the CGA data, the
revenue decit during the 10-
month period through Janu-
ary was Rs.3.79 lakh crore or
102.3 per cent of the revised
estimate.
Governments total expen-
diture, however, was only
79.8 per cent of the revised
estimates of Rs.15.90 lakh
crore. The data further re-
vealed that revenue receipts
during April-January period
were Rs.7.22 lakh crore or
70.1 per cent of the revised
estimates. PTI
Fiscal decit exceeds
revised Budget estimates
NEW DELHI: The government,
on Friday, decided not to
withdraw Vodafone concilia-
tion talks for settling the
Rs.20,000-crore tax dispute
until a separate case over
transfer pricing is settled by a
tribunal.
The Union Cabinet, at its
meeting on Friday, agreed
not to take any hasty deci-
sion, and decided to fast-
track the transfer pricing dis-
pute case of Vodafone India
Services pending with the In-
come Tax Appellate Tribunal
(ITAT). Once the ITAT expe-
ditiously solves the transfer
pricing case, the Cabinet will
review the conciliation proc-
ess, a senior Finance Minis-
try official said.
Vodafone is locked in twin
tax disputes with the govern-
ment. One pertains to its
2007 acquisition of Hutchi-
son Whampoas stake in
HutchisonEssar, and the oth-
er is the transfer pricing case
involving Vodafone India
Services. The Cabinet has
decided not to take any hasty
decision on review of concil-
iation talks with Vodafone,
he added.
The decision regarding the
Vodafone conciliation offer
may have to be taken by the
next government as the ITAT,
which will hear the transfer
pricing case from March 19,
will take a few months to de-
cide on the dispute.
The Cabinet had in June,
2013, approved a Finance
Ministry proposal to go in for
conciliation with Vodafone to
resolve the capital gains tax
dispute related to its acquisi-
tion of Hutchison Wham-
poas stake in Hutchison
Essar. While the basic tax de-
mand is Rs.7,990 crore, the
total outstanding is
Rs.20,000 crore after includ-
ing penalty.
Earlier this month, the Fi-
nance Ministry circulated a
draft Cabinet note seeking to
withdraw the conciliation
talks after Vodafone demand-
ed that the Rs.3,700 crore
transfer pricing row be
clubbed with the capital gains
tax case. It followed a notice
under the Bilateral Invest-
ment Promotion and Protec-
tion Agreement by Vodafone
International Holdings BV to
the government over the tax
dispute. The Supreme Court
had ruled in Vodafones fa-
vour in2012, saying it was not
liable to pay any tax over the
acquisition of assets in India
from Hong Kong-based
Hutchison. The government
changed the rules later in
2012 to enable it to claim tax
retrospectively on concluded
deals. PTI
Govt for fast-track solution to
Vodafone transfer pricing row
Will not withdraw
conciliation talks
on Rs.20,000 crore
tax dispute until
the transfer
pricing dispute
is settled
NEW DELHI: The government,
on Friday, cleared disinvest-
ment in two blue-chip state-
owned companies Indian Oil
Corporation (IOC) and Bha-
rat Heavy Electricals Limited
(BHEL), which would fetch
over Rs.7,300 crore to the ex-
chequer in the current scal.
The decision to go ahead
with the stake sale of 10 per
cent in IOC and 5 per cent in
BHEL was taken by the Em-
powered Group of Ministers
on disinvestment, headed by
Finance Minister P.
Chidambaram.
No timeline for the stake
sales, however, has been de-
cided as yet, sources said.
The government will be
selling 10 per cent stake in
IOC to state-run ONGC and
Oil India Ltd (OIL) at a dis-
count of 10 per cent, which
would fetch about Rs.5,300
crore to the exchequer.
The sale of 10 per cent
stake or 24.27 crore shares
will be through an off-market
transaction, with ONGC and
OIL buying 5 per cent stake
each.
The two companies
(ONGC and OIL) will now
work out the deal, and the
stake sale will happenshortly.
It should be happening in the
next few days. The govern-
ment advises the board, and
the two boards will meet and
decide. It will be an off-mar-
ket deal, Oil Secretary Vivek
Rae said.
IOC shares closed at
Rs.248.10, up0.06per cent on
BSE on Friday.
We expect to raise around
Rs.5,300 crore from the IOC
stake sale, Disinvestment
Secretary Ravi Mathur said.
As regards BHEL disin-
vestment, the government
will sell 5 per cent of its stake
through a block deal to state-
owned LIC, which would
fetch about Rs.2,045 crore to
the exchequer.
BHEL disinvestment will
happen this scal through the
block deal to LIC, Mr. Math-
ur added.
At the current market price
of Rs.167.20, the sale of 5 per
cent stake, or 12.23 crore
shares, in BHEL would fetch
about Rs.2,045 crore to the
exchequer.
The Department of Heavy
Industries, which is the ad-
ministrative Ministry of the
company, has, for long, op-
posed the proposed disinvest-
ment in state-run BHEL,
citing unfavourable market
conditions.
In August, 2011, the Cabi-
net had cleared selling gov-
ernments 5 per cent stake in
BHEL through the follow-on
public offer (FPO). The gov-
ernment holds 67.72 per cent
stake in the Navratna
company.
However, market condi-
tions led to a delay in the is-
sue, and the company in
April, 2012, withdrew the
draft prospectus led with
the Securities and Exchange
Board of India.
The government has so far
raised about Rs.5,093.87
crore through the stake sale
in PSUs. As per the revised
estimates in the InterimBud-
get, the disinvestment target
was lowered to Rs.16,027
crore in this nancial year
fromRs.40,000 crore. PTI
IOC, BHEL stake sale to fetch
over Rs.7,300 crore this scal
Cabinet clears disinvestment in the two bluechip companies
ONGC, OIL to buy 5 per cent each
in Indian Oil Corporation
Centre to sell 5 % stake in BHEL
through block deal to LIC
MUMBAI: Indias decision to
grant additional 20 per cent
increase in the weekly entit-
lements to Dubai to 65,200
seats has evoked criticism.
This is another example of
very ad hoc manner of allo-
cating bilaterals, which is
completely delinked to na-
tional goals and interests. In-
dia is increasingly
outsourcing its international
traffic to Middle East coun-
tries. This has strategic impli-
cations, Kapil Kaul, CEO,
South Asia, Centre for Asia
Pacic Aviation (CAPA), said.
Bilaterals are national as-
sets and allocation should be
only drivenby a well structur-
ed Cabinet-approved policy
and not driven by under-pre-
pared and non-transparent
methods that remain in prac-
tice since 2004. CAPA rmly
believes that such decisions
should have been left to the
new government. Indias
aviation strategy is, at pre-
sent, against national inter-
ests, Mr. Kaul said.
According to analysts, India
should not open up just be-
cause the UAEor Middle East
carriers are expanding. The
move would adversely affect
Indian airlines, they said.
Echoing CAPAs observa-
tion, Air India officials said
that the decision would se-
verely impact Air Indias
North American operations
due to lack of passengers.
Withthe additional entitle-
ments to Dubais Emirates,
the total weekly seats entitled
to the UAE has gone up to
over 1,30,000 seats per week.
Enhancement of seat quo-
tas with Dubai is a good thing
for both countries. It will in-
crease competition, and help
bring down fares. The winter
of 2014 may see the arrival of
Emirates A380s, which will
further reduce the airfares to
India, said Amber Dubey,
Partner, and India Head of
Aerospace and Defence at
global consultancy KPMG.
Grant of extra ying
seats to Dubai draws ak
Special Correspondent
NEW DELHI: The Cabinet Com-
mittee on Economic Affairs
(CCEA), onFriday, decided to
continue the Rs.670-crore
scheme for promoting spices
cultivation during the XII
Plan (2012-17), a step that is
likely to boost spices exports
to $3 billion by March 2017.
The Cabinet Committee
of Economic Affairs has ap-
proved the proposal of the
Department of Commerce for
continuation of Central Sec-
tor Scheme Export-Oriented
Production, Export Develop-
ment & Promotion of Spices
of Spices Board in the XII
Plan period...with some mod-
ications as recommended by
the Expenditure Finance
Committee. The projected
outlay of the scheme is Rs.670
crore during the ve-year pe-
riod of the XII Plan, an offi-
cial statement said.
The scheme aims to en-
hance spices export by build-
ing processing capabilities,
expansion of markets, in-
creasing production and pro-
ductivity of cardamom,
modernising spice cultivation
and post-harvest operations.
This will attract youth to
spices cultivation, promote
organic cultivation, address
food safety concerns of im-
porting countries, market
and productivity driven re-
search, skill development,
transfer of technology, it
added.
Special Correspondent
Rs.670-cr spices promotion
project cleared
MUMBAI: The S&P BSE Sensex
closed above the psycholog-
ical barrier of 21000-mark on
Friday. It closed at 21120.12
with a gain of 133.13 points.
On the National Stock Ex-
change (NSE), the 50-share
Nifty closed at 6276.95, up by
38.15 points. From the inter-
imbudget day on February 17
till date, the Sensex gained
656.06 points.
Predominantly positive
opinion polls, which indicate
the possibility of emergence
of a strong and stable govern-
ment post elections is keep-
ing the market mood
buoyant, said Sudip Bandyo-
padhyay, Managing Director
and CEO, Destimoney Securi-
ties. Global cues have also
been generally positive and
supportive. Domestic corpo-
rate news ow and macro in-
dicators have also been by
and large positive, Mr. Ban-
dyopadhyay added.
Global markets nished
mixed for the week. While
U.S. indices ended in the
green, European and Asian
indices closed in the at to
negative.
Back home, among the
sectors, capital goods stood
out with a gain of 5 per cent
plus, said Sanjeev Zarbade,
Vice President- Private Cli-
ent Group Research, Kotak
Securities.
The Finance Minister low-
ered some excise duty on au-
tomobiles and capital goods
which gave a boost to con-
sumption, said Mr. Arun Kej-
riwal, a leading stock market
analyst.
Rupee up 23 paise
PTI reports:
The rupee on Friday rose
23 paise to an over ve-week
closing high of 61.75 against
the U.S. dollar on exporters
selling the American curren-
cy and positive cues fromdo-
mestic equities.
Special Correspondent
Sensex regains 21000-mark
KOLKATA: Lubricant-maker
Tide Water Oil Co. (India)
Ltd. announced on Friday
that it hadsigned a memoran-
dum of understanding with
JX Nippon Oil & Energy Cor-
poration, Japan, for setting
up a 50:50 joint venture in
India. The JV will be respon-
sible for marketing, distribut-
ing and manufacturing the
ENEOS brand of lubricants
in India and neighbouring
countries, besides catering to
the factory and service ll re-
quirements of, mainly, the Ja-
panese original equipment
manufacturers.
Now, Tide Water manufac-
tures the product under a li-
censing pact with the
Japanese company which
owned the brand.
Tide Water also has its own
brand Veedol.
JX Nippon Oil & Energy
Corporation is the largest oil
company having interests in
rening, manufacturing and
selling petroleum products
and in the energy sector.
Tide Water
plans JV with
JX Nippon
Special Correspondent
MUMBAI: Housing Develop-
ment Finance Corporation
Limited (HDFC) raised $300
million through external
commercial borrowing (ECB)
from a consortium of four
lenders.
The borrowing facility has
a tenor of ve years. The rate
of interest on the facility is
linked to U.S. dollar Libor
plus a spread of 1.75 per cent.
HDFC has swapped the fa-
cility in Indian rupees for the
entire tenor of the loan,
HDFCsaid in a release.
HDFC raises $300 m
through ECB