At a time when many airlines are taking steps to save on increasing costs, no-frills carrier SpiceJet has announced a fresh round of low fares starting at as low as Rs 99 across its network. “We want to encourage people to continue to fly in these hard times to close their business deals and visit their families and friends,” SpiceJet Chief Commercial Officer Samyukth Sridharan said in a statement on Tuesday (October 21).

SpiceJet’s step comes even as the civil aviation industry is facing a major downturn and increased costs. In fact, not long ago many airlines have hiked their fares. SpiceJet’s special fares would be available till tickets last and bookings are open till March 2009, a statement from the airline said.

In addition to this, the carrier is also introducing fares for Mumbai to Delhi starting at Rs 3,225, including taxes. There has been demand for a bailout package for the airline industry, which is facing mounting losses. To save on cost, full service airline Jet Airways and Kingfisher Airlines a few days back had formed an operational alliance. Jet even announced retrenching its 1,900 staff but immediately revoked the termination.

(With inputs from agencies)

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“Yesterday, the RBI has cut repo rates and we hope some more reductions take place in rates,” HDFC Chairman Deepak Parekh said. The Reserve Bank had yesterday cut its key short-term lending rate by one per cent to eight per cent. 

Asked whether interest rates could be expected to decline now, Parekh said it is likely that deposit rates could get reduced first followed by a softening in lending rates. 

On the present liquidity situation in the system, Parekh said, “the current liquidity is enough.”

Real estate prices should decline, Parekh said, when asked of his outlook on the sector. “Sales are dull presently,” he said.

Discounts given by developers have not been able to attract buyers, he said.

High interest rates (at 12 per cent) were not affordable for the common man, the HDFC chief said, adding that interest rates should be at around 8-9 per cent, which would then be affordable for the common man.

“Residential buyers are staying away and will stay away till interest rates come down. Demand can pick up only if interest rates come down,” Parekh said. 

According to him, cost of projects under construction has increased because of rising raw material prices.  Funds crunch has derailed many real estate projects, he said. 

“Every year in Mumbai, two property fairs are held. The property fair held recently got a very poor response. Very few people turned up for the fair,” he said. 

(Agencies)

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The Indian JV ICICI-Prudential has also increased its market share to 14 per cent from 10 per cent, till August 2008, the UK giant said in a third quarter Interim Management statement. In India, the new business sales jumped 34 per cent to 173 million pounds for the first nine months, compared with the same period a year ago.

“In an extremely competitive market, for year to date August 2008, ICICI-Prudential has increased its market share to 14 per cent from 10 per cent. India remains one of the cornerstones of our Asian growth strategy. Our joint venture with ICICI is highly productive and value enhancing,” it said.

Commenting on the third quarter, Prudential Group’s Chief Executive Mark Tucker said the overall group new business was up 15 per cent. “Our sales in Asia were up nine per cent over last year and up 21 per cent excluding Taiwan… This is a very good overall result and we are well positioned to continue to achieve profitable market share growth, outperforming our competition, even in these very challenging markets,” Tucker said.

Prudential’s total group insurance grew 15 per cent with Annual Premium Equivalent (APE) reaching 2.3 billion pounds for the nine months ended September 30, 2008. Asia accounted for 1.03 billion pounds of the total APE. APE sales comprise regular premium sales plus one-tenth of single premium insurance sales.

On the other hand, in the Asia Asset Management segment, the net inflows came down 63 per cent at one billion pounds. The statement noted that the Asian markets have suffered in the short term in the wake of the global financial turmoil.

“We are unlikely to achieve our goal of doubling 2005 new business profit a year early in 2008. It remains our expectation that this will be achieved in 2009, assuming a return to more normal market conditions during the year,” Tucker added.

Noting that the company expects global financial market conditions to remain highly challenging for some time, Tucker said, “However, our retirement-led strategy underpinned by our diversified geographic presence and product capability together with strong brand recognition ensures that we remain very well positioned to outperform over the market cycle.”

(With inputs from agencies)

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Despite consolidation in equity markets, the domestic unit moved in a range of between 48.9500 and 49.1550 during the day. It had closed at 48.99/49.00 a dollar on October 20. 

Forex dealers said the activity was not much as investors remained sideline but the rupee moved  erratically on the alternate bouts of small dollar buying and selling.

They said rupee drew some support from a fresh surge in equity markets which helped the currency to remained steady at close.

The Indian benchmark Sensex today gained another 460 points or 4.5 per cent while Asian markets witnessed mixed pattern trading during the day.

Foreign Institutional Investors (FIIs) pulled out over USD 1.0 billion from equity during last week, taking the total capital outflow to nearly USD 12 billion so far in the current calendar year.

(Agencies)

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Oil companies, who are projected to lose Rs 1,47,592 crore on sale of petrol, diesel, domestic LPG and kerosene, are virtually living on borrowed funds and need liquidity.

“Airlines have to clear their outstanding within the agreed 60-day credit period. Commitments (to pay within 60 days) have to be met,” he said but ruled out stopping jet fuel supplies to airlines.
    
“We know that airline industry too is going through a tough phase. There are credit problems and we do not want them to go off the skies,” he said.     

Deora, who had private meetings with Goyal and Mallya in the past couple of days, said the airlines need to do cost cutting. “They have to tighten their belts and reduce expenditure… One of the solutions could be that airlines share passengers instead of running empty flights,” he said.     

Airlines, who are running in the red because of economic slowdown and high fuel costs, have sought cut in central and state duties on jet fuel.
    
“I am sure we will be able to find a solution,” Deora said. “Finance Minister, Praful Patel everyone is cooperating in the endeavour.”     

Jet’s total outstanding to IOC, the nation’s largest oil firm, stood at Rs 859 crore, of which it had defaulted on payment of Rs 330 crore, which was due after the expiry of 60-day period. Of this, it yesterday paid Rs 100 crore.
    
Similarly, Kingfisher owed Rs 110 crore to IOC, of which Rs 60 crore remained unpaid even after the expiry of the credit period. It paid Rs 12 crore yesterday.

Jet owes Rs 284.3 crore to Bharat Petroleum while Kingfisher owes Rs 246 crore to BPCL and Rs 525 crore to HPCL. Deora had personally brokered the 60-day credit deal between Jet’s Naresh Goyal and IOC Chairman Sarthak Behuria. Deora said he felt hurt when Goyal did not keep his word on making timely payments.
    
He said both Jet and Kingfisher had to clear their outstanding at the earliest as state-run oil firms themselves were passing through difficult times.

“Our companies have a social obligation to fulfil. They sell subsidised cooking gas to households and even more subsidised kerosene to poor. They have been living on borrowed funds and need funds to keep these subsidised sales going,” an official said.
    
IOC, BPCL and HPCL together lose about Rs 280 crore on sale of petrol, diesel, domestic LPG and kerosene. The three companies had not received oil bonds, which are used to compensate for half of the losses they make on fuel sales, for past three quarters.
    
The combined borrowings of the three, which stood at Rs 48,400 crore in March 2007 and Rs 66,900 crore in March 2008, has increased to Rs 1,10,000 crore in October. They lose Rs 2.85 a litre on petrol, Rs 7.26 on diesel, Rs 29.19 on kerosene and Rs 335.03 per LPG cylinder and are projected to lose Rs 1,47,592 crore in revenues this fiscal.
    
The official said Aviation turbine fuel (ATF) was priced at import parity rates (as if the fuel were to be imported) because around 80 per cent of the crude oil used to make the fuel was imported at international rates.
    
Pricing of ATF was de-regulated on April 1, 2001 and since then has been governed by fluctuations in the global oil market. Over the base price, customs duty of 5 per cent, excise duty at the rate of 8 per cent, 3 per cent education cess and sales tax at an average of 25 per cent is levied. State taxes and excise duty amount for about one-third of the price of ATF.

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Market men said the sentiment was boosted by market regulator Sebi’s remarks that it “disapproved” of overseas investors short-selling equities using offshore derivatives. They said major players and general investors resorted to buying on expectations that the government might take more market friendly measures. Many also anticipate investor friendly measures by RBI in its monetary policy later this week.

A firming global trend in the backdrop of US officials moving towards a second fiscal stimulus package also played a part, they said. Consumer durable stocks surged on expectations of sales of household items picking up during the ongoing festival and marriage season. Its index rose by 8.95 per cent at 2271.82, the maximum among all indices. Realty sector index was a close second at 8.32 per cent at 2632.93 points.

Information technology stocks gained 6.03 per cent at 2906.83, as sector majors Infosys Technologies rose by Rs 50.55 at Rs 1,348.35, Tata Consultancy Services by Rs 63.95 at Rs 561.10 and Satyam Computers by Rs 28.45 at Rs 317.45.

Teck index rose by 101.64 points at 2282.64 after stocks of Oracle Fin rose by Rs 43.85 at Rs 489.35, Rcom by Rs 26.10 at Rs 258.20, NDTV by Rs 3.90 at Rs 101.85, Sun TV by Rs 6.70 at Rs 173.40 and Zee Enterprises by Rs 2.95 at Rs 147.75. The oil and gas index recorded a 251.78 points gain at 6774.28 as market heavy Reliance Industries shot up by Rs 75.75 at Rs 1,397 and Aban Offshore by Rs 44.95 at Rs 1111.60.

The metal sector index surged by 214.40 points at 6101.76, Bank index by 146.51 points at 5842.23, power index by 73.18 points at 1751.40, FMCG index by 59.78 points at 1957.36, auto index by 50.75 points at 3123.27, PSU index by 54.04 per cent at 5268.67 and Healthcare index by 43.33 points at 3303.82. The Small-cap index moved up by 83.46 points at 4196.28, and Mid-cap index by 80.89 points at 3587.24.

(With inputs from agencies)

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According to a release issued by GE Transportation on Tuesday (October 21), the company was recently shortlisted by the Indian Railways to compete for this tender. “GE and BHEL along with Indian Railways intend to form a Joint Venture company for this purpose,” it added.

GE Transportation plans to supply diesel locomotives based on the company’s global Evolution Series locomotive platform and this series locomotive is said to deliver five per cent higher fuel efficiency, the press release said.

“We are excited about the prospect of expanding our relationship with Indian Railways and to partner with BHEL, one of the leading technology companies in India,” GE Transportation President and CEO Lorenzo Simonelli said. “BHEL’s know-how, customer centricity and local operations will help us deliver our product to Indian Railways in a timely and cost-effective manner,” Simonelli added.

BHEL has been a leading supplier of propulsion systems and locomotives to Indian Railways. It manufactures approximately 160 electric locomotives and supplied over 4,000 sets of electric propulsion systems to Diesel Locomotive Works. “GE is known to build the world’s most reliable and fuel-efficient diesel locomotives to-date,” BHEL’s Chairman and Managing Director K Ravi Kumar said.

(With inputs from agencies)

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“No papers of secret nature have been sent to these companies (Reliance and Niko),” Petroleum Minister Murli Deora said in a written reply to a question in Rajya Sabha in New Delhi.

To a question by Samajwadi Party’s Amar Singh and Abu Asim Azmi, External Affairs Minister Pranab Mukherjee-headed Empowered Group of Ministers, in a meeting on May 28, 2008, took decisions regarding the sectors to which natural gas expected from Reliance-Niko’s KG-D6 field would be sold.

“Reliance and Niko being the parties to the production sharing contract (for the eastern offshore KG-D6 field) are required to implement the decisions taken by the EGoM,” he said.

“In order to operationalise the decisions taken on sale of natural gas by the contractors (Reliance and Niko), the minutes of EGoM meeting were sent to them for implementation,” he said.

The decisions taken in the EGoM meeting were also disseminated through a press release and put on oil ministry’s website. “Since the contents of the communication were also put in the public domain, there was no secrecy attached to the communication.”

The same EGoM had last year approved a price of USD 4.2 to be produced by Reliance-Niko from KG-D6.

To another question, Deora said the production sharing contract provides for pricing of gas on the basis of sales on arms-length principle. The formula or basis on which the prices shall be determined for the purpose of determining the Government take is required to be approved by the Government prior to sale of natural gas to the consumers/buyers.

“Accordingly, Reliance submitted a proposal on May 18, 2007 for approval of gas price formula, which was arrived at by following a bidding process,” he said.

Government constituted an EGoM to consider issues relating to pricing of natural gas produced from fields awarded under New Exploration Licensing Policy (NELP) regime.

“The price basis/formula for the purpose of valuation of natural gas has been approved by the Government in case of block KG-DWN-98/3 (also known as KG-D6) of Reliance-Niko.

“The price obtained from the basis/formula comes to USD 4.2 per mmBtu for crude price greater or equal to USD 60 per barrel,” he said.

State-run Oil and Natural Gas Corp (ONGC) is supplying gas produced from fields given to it on nomination basis at a price of Rs 3.2 per cubic meter to the consumers of fertiliser and power sectors, which is equivalent to USD 2.02 per mmBtu at an exchange rate of Rs 40 to one USD.

(Agency)

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“Even though the global financial crisis will cause a sharp deceleration of economic activity, the comprehensive crisis management actions being undertaken should allow Europe to avoid a worse outcome,” the IMF’s Europe director Alessandro Leipold said in Brussels.

He nevertheless called on European governments “to follow up with bold steps on their recent commitments,” notably with pump-priming budget decisions.

Earlier this month the IMF predicted that growth in the eurozone, the 15 nations that share the euro, would slow sharply to 1.3 per cent this year from 2.6 per cent in 2007 and fall further to just 0.2 per cent next year.

These projections “remain broadly valid,” Leipold told a news conference.

Saying that inflationary pressures were falling swiftly, the IMF official called on the European Central Bank (ECB) to lower its interest rates.

“With upside risks to inflation rapidly dissipating, the recent concerted easing of monetary policy was appropriate and there is scope for further easing going forward,” he said.

Inflation in the 15 nations sharing the euro slipped for the second month running in September, easing to 3.6 per cent from a record 4.0 per cent in July.

However, the rate remains well above the ECB’s comfort zone, which it defines as a level of close to but less than 2.0 per cent.

(Agency)

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Out of the 310 million, GSM subscriber base stood at 233 million, with a market share of 75 per cent. The increasing addition of mobile phone shows that it has become an essential commodity oblivious to cyclical downturn, according to an industry analyst.

India has been adding mobile users at a blistering pace ranging from seven to nine million, but the 10 million addition milestone is special as it has come at a time when not only convulsions of global financial crisis but also fears of impending recession are leading consumers to be thrifty.

In the CDMA technology base, Anil Ambani’s Reliance Communication is the market leader. India is the world’s fastest-growing market for wireless services and the second-largest market for such services after China, with growth fuelled by cheap handsets and call rates as low as one US cent a minute.

(With inputs from agencies)

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In the 11th annual list of 50 most powerful women in business, Nooyi is followed by food maker Kraft Foods’ Chief Executive and Chairman Irene Rosenfeld and leading grain processor Archer Daniels Midland’s Chief Executive Pat Woertz, at the second and third positions, respectively.

Writing on 52-year-old Nooyi, who is also the Chairman of snacks and beverages major Pepsico, the magazine said that Chennai-Born Nooyi has moved swiftly to offset slowing beverages sales in North America by expanding the international business, which accounts for about 26 per cent of the company’s revenues.

“She is also pushing healthier products like orange juice with omega-3 fatty acids. In a tough market, the stock is flat vs a year ago,” it added. 

Other names in the top ten include Xerox’s CEO Anne Mulcahy (4th), Well Point’s CEO Angela Braly (5th), Avon Products’ CEO Andrea Jung (6th), President of Procter & Gambles’ Global Business Units Susan Arnold (7th), Harpo’s chairman Oprah Winfrey (8th), Sara Lee’s chairman and CEO Brenda Barnes (9th) and Xerox’s President Ursula Burns (10th). In the previous list, Rosenfeld was ranked at the fifth place while Woertz was placed at the sixth spot.

On 55-year-old Rosenfeld, Fortune noted that she is plowing money into brand building, empowering local managers in developing countries, and launching more ready-to-eat fare such as heat-and-serve Deli Creations flatbread sandwiches. 

“This year the stock, which has remained relatively flat, replaced AIG on the Dow, and Warren Buffett recently upped his stake to nine per cent,” the report said.

(Agencies)

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The 30-share index, was down by 238 points at 12357.75 after dipping to 12153.55 within minutes of opening following emergence of buying in heavy weight stocks such as ICICI Bank, SBI among others.

The National Stock Exchange benchmark Nifty was down by 59.05 at 3791 after losing 135 points in opening trade. 

Shares of ICICI Bank were bank were in positive zone, gaining Rs 2.50 or 0.51 per cent to Rs 495.80 at 1115 hrs after Bank’s CEO KV Kamath denied that any current market condition (of US) will not pose any challenge to the bank’s capital position.

In the opening trade, the shares of the bank were trading down by nine per cent to Rs 458.

FM holds emergency meeting with SEBI chief

Meanwhile, the Finance Minister P Chidambaram held emergency meeting with SEBI chairman CB Bhave in New Delhi today, as markets tumbled in the opening trade on weak global cues following the US Congress’ rejection of the $700 bailout package.

Earlier, in an attempt to diffuse the tension that has gripped the Indian markets, market regulator SEBI allayed fears of the US financial crisis affecting Indian markets, saying there was no panic as it was monitoring the situation very closely.

SEBI Chairman CB Bhave made statement just before his meetings in North Block.

“There is no panic in Indian market and we are monitoring the situation closely,” he told reporters in New Delhi.

“Our market is resilient. Our clearing system has proved to its ability to deal with stock market fluctuation,” Bhave said.

Within minutes of Bhave’s statement, the stock markets recovered early losses as the BSE Sensex was ruling at 12,397, down by 197 points.

Panic grips Asian markets

Panic gripped markets after US lawmakers unexpectedly rejected a $700 billion bailout plan for the
financial industry, with Asian stocks opening sharply lower on Tuesday (September 30) after Wall Street’s biggest fall since the crash of 1987.

A week that started badly with the rescue of three banks in Europe followed by the distressed sale of big US lender Wachovia to Citigroup got worse after the U.S. Congress was unable to agree on a rescue package.

Stocks in Asia dropped roughly 4 percent on Tuesday amid mounting fears about the health of the global economy, with China’s two biggest banks opening more than 8 percent  lower.

Australian shares tumbled 5.4 percent on Tuesday. The  benchmark S&P/ASX 200 index fell 3.01 percent to 4662.6  by 0320 GMT, adding to Monday’s (September 29) 2 percent  drop.

“Well if your view is a long term view, certainly then  our evaluation is very attractive at this point, the fundamentals locally remain quiet strong. We are in a clean out process in the US It is just a matter of working its way through the economy, so if you do start seeing that the US congress does come back and approves this particular bill well it could be a sharp turn around for the markets,” said Savanth Sebastian, economist from Commsec Equities.

An unusual crowd of investors packed the stock exchange’s viewing room in central Sydney to witness the downfall. “I am worried for the sake of the whole financial situation of Australia as well, very worried, her future, my future,” said investor Craig Gill, referring to his  young daughter.

The Reserve Bank of Australia (RBA) pumped extra cash  into the money market and prepared to lend more US dollars as risk aversion reached new extremes following the shock rejection of a US bailout plan.

Such was the turmoil that investors were increasingly betting the central bank would also have to cut official rates as soon as next week, and by an aggressive 50 basis points.

With major banks around the world too scared to lend to each other, the RBA sought to ease some of the strain at home by adding A$1.95 billion ($1.6 billion) in repurchase agreements, above the estimated daily need of A$1.87  billion.

Japan’s Nikkei stock average fell nearly 5 percent on Tuesday to touch a three-year low.

Exporters and banks were particularly hard hit, as Tokyo followed the lead of the Dow Jones industrial average, which posted its largest point decline ever and  its biggest daily percentage slide since the 1987 stock market crash.

The benchmark Nikkei fell as low as 11,160.83, or 4.9 percent, its lowest since June 2005. But by midsession it had pulled back slightly to 11,199.07, down 4.6 percent.

The broader Topix also fell 4.6 percent to 1,076.57. It  earlier had tumbled 5 percent.

Japanese financials were predictably battered, but  traders noted the nation’s megabanks still remained above lows hit earlier this year.

Japanese authorities said they regretted the failure of  the US plan but hoped the U.S. Congress would pass a new  bailout plan soon. “We understand that the U.S. government will continue to debate measures further so in that respect we hope they will come up with a solution to this impasse. However the the global financial markets remains extremely nervous so we need to remain at a high leave of alertness, monitor closely the markets and cooperate with financial authorities domestically and overseas to deal with this appropriately,” Top Japanese spokesman Takeo Kawamura told  reporters.

Seoul shares tumbled on Tuesday, with the Korea Composite Stock Price Index down 2.08 percent to 1,426.12 points as of 0315 GMT, after losing as much as 5.5 percent to touch a session low of 1,376.72 points.

Foreign investors were net sellers of 136 billion won  ($114.8 million) and institutions bought a net 100 billion won worth of shares as of 0103 GMT.

Retail investors picked up a net 19 billion won. “The shares are falling worldwide after the US    congress rejected the US bailout plan. However, the impact on the domestic market would be limited compared to the US market. We cannot avoid some bad impact, but the decision by the US congress may for the long-term mean solution and it could be understood as postponing the voting,” said Rommel Lee, retail research manager at Goodmorning Shinhan Securities.

South Korea’s Financial Services Commission said it would ban the short-selling of shares for the time being.

Hong Kong shares also opened lower on the news, with Hang Seng Index falling 2.81 percent to 17378.78 at 0315 GMT.

The US Senate will consider the proposed bailout on Wednesday (October 1), with the House expected to return to the issue on Thursday (October 2).

Agencies

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Investors panicked as the countdown on the House vote signalled the lawmakers would torpedo the plan that President George W Bush’s administration argued was crucial to avert a wider economic collapse.

New York’s main contract, light sweet crude for November delivery, tumbled USD 10.52, or 9.8 percent, to close at USD 96.37 a barrel. Earlier it had fallen as low as USD 11.85. 

In London, Brent North Sea crude for November dropped USD 9.56 to settle at USD 93.98 a barrel. Its intraday low was USD 92.64.

New York oil prices accelerated their decline in late trade, as the market digested the ramifications of the House’s rejection of the emergency Wall Street bailout. The House of Representatives voted 228-205 to reject the emergency legislation.

A “disappointed” Bush has summoned top aides to plan the next steps, the White House said.

The oil market selloff was driven by worries that further economic turmoil in the world’s largest economy could significantly dampen global oil demand.

Augustine Faucher at Economy.com said, “The US is looking at a severe recession if Congress fails to pass some sort of package.”

“Oil prices should remain under downward pressure,” said James Williams, analyst at WTRG Economics. ”Oil traded for the last five years on fear of supply interruptions. It is now trading on fear of economic collapse,” Williams said.

PTI

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Its passage in the US house of Representatives was considered only a formality, after American President George W Bush fought opposition from within his party to get them to agree on the bill.

The rejection of the bill sent shock waves across the financial markets, including the Wall Street, plunging stocks by 705 points, with the Dow losing as much as 600 points at one point.

The bill was defeated in the House by a 228-205 margin with “no votes” from both the Democratic and Republican sides.

Both the Presidential hopefuls John McCain and Barack Obama had supported the bailout package worked out with just over a month to go for the November 4 Presidential election.

The 110-page Bill, intended to ease a growing credit crisis, came after a frenzied week of political squabbling that culminated in an agreement between the Bush administration and the Congress early yesterday (September 29).

(Agencies)

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“ICICI Bank is aware that rumours are being repeatedly being circulated in certain centres regarding the financial strength of the bank.

“The bank states that these rumours are baseless and malicious,” ICICI Bank CEO and Managing Director KV Kamath said today.

Kamath also sought a SEBI probe into the manipulation of its shares through a systematic pattern of rumours.

The statement comes admist reports that the bank’s customers were queuing up before its branches in some cities particularly in Karnataka and Andhra Pradesh fearing that ICICI were facing major financial crunch.

Debunking suggestions that there could be a ‘run-on-the-bank’, ICICI statement gave detailed financial position to establish that it was in a very sound position with assets of over Rs 4,84,000 crore and a networth of over Rs 47,000 crore.

PTI

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Although the fall would not lead to any easing in monetary policy, there may also not be any further tightening of key rates by the Reserve Bank of India, if the declining trend continues, analysts said.

Inflation fell despite a low base of 3.72% and rise in indices in all broad categories. In the food articles group, imported edible oil prices which had been rising quite a bit, declined by four per cent, giving some breather to the Government. Besides, prices of fruits, maize and spices went down.

A Finance Ministry statement said inflation rate of 30 essential commodities, however, increased to 7.52% during the week from 6.90% in the earlier week. There was an increase in the prices of sugar, salt, wheat, arhar, urad, jowar and bajra, it added. Axis Bank Economist Saugata Bhattacharya said, “Inflation will drop gradually and I expect it to reach 10% by the middle of January.”

Earlier in the day, Prime Minister’s Economic Advisory Council Chairman Suresh Tendulkar said inflation rate may have peaked. RBI may not further tighten the monetary stance if inflation has peaked, he said.

While indices rose in all major categories, be it primary articles, manufactured products or sub-groups of food articles, non-food articles, minerals, textiles, the index of fuel category remained unchanged.

Analysts said the impact of fall in global prices could be seen from the next week, which means inflation may fall further, if other factors remain as they are now. It was the price hike in petroleum products which had catapulted inflation to double digit figures and it has never returned to single digit after that.

The Finance Ministry’s statement also said, “In the primary articles group, the annual point to point inflation declined to 10.07%, as compared to 10.79% reported last week and 11.83% for the week.”

Out of total of 98 articles in the primary articles group, 19 articles have shown a decline in prices in the current week as compared to August 16, the statement said. Prices of various articles including rice, maize, moong, masur, onions and potatoes declined during the week.

In the manufactured group’s category, there was no increase in prices of 296 items out of total of 318 commodities, the Finance Ministry added. Analysts saw a status quo in the RBI’s interest rate policy, even if inflation continues to decline.

Interest rates have hardened in the past few months as the central bank increased Cash Reserve Ratio (CRR) and short-term lending (Repo) rate by 1.5% and 1.25% respectively since April to tame inflation.

Earlier in the week, Reserve Bank’s new Governor D Subbarao had defended the tight monetary policy. “Not tightening the monetary policy…would have eroded confidence in the economy,” he had said. Meanwhile, inflation for the week ended July 18 was revised to 12.19% from the provisional estimate of 11.91%. (PTI)

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“I welcome this that crude prices have come down,” Deora said. However, he added that the government was not considering any fuel price revision at the moment.

Petroleum Secretary R S Pandey said that crude prices are expected to fall even further.

“Over the last one and a half months, crude prices have come down from the peak of $147 per barrel. The Indian basket of crude reached an average $95.47 a barrel, which is a welcome relief. We expect prices to fall further, which would be a real relief,” Pandey said.

“If crude stays at current levels for the entire financial year of 2008-09, the extent of under-recoveries is estimated at Rs 1,62,254 crore. But even this figure is very high,” Pandey said.

According to June data, estimated under-recoveries of state-run oil firms Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum stood at Rs 2,45,305 crore. If crude prices stay at current levels, under-recoveries for the entire year are estimated to fall to Rs 1,62,254 crore, Pandey said.

Currently, oil firms are losing Rs 400 crore per day on sale of petrol, diesel, domestic LPG and kerosene, down from last month’s Rs 450 crore a day.

When asked about compensation to oil PSUs on their under-recoveries, Pandey said, “If the Indian basket of crude touches $67 a barrel, then there would be no subsidies for oil firms”.            

(Agencies)

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The Department of Telecom (DoT) has said that any person who holds a Unified Access Service Licence (UASL) or Cellular Mobile Telecom Service Licence or who has previous experience of running 3G telecom services can bid for spectrum.

DoT has already started the process of appointing an agency to conduct auction of spectrum and by September 30, the agency will be in place.

For those with experience of running 3G, the new condition mandates that they give an undertaking to obtain UASL as per DoT guidelines. This means that non-licence holders for 3G spectrum would have to pay Rs 1,651 crore as pan-India fee.

As far as annual spectrum charges are concerned, DoT has amended the norms and now the companies would have to pay the charges at the rate of one per cent on the “incremental revenue due to 3G services” after a period of one year and the method for this shall be notified separately.

Similarly in the Broadband Wireless Access (BWA) services also, the DoT has amended the guidelines and introduced new frequency band of 2.3 GHz band in addition to the previously notified 2.5 GHz band for spectrum allocation.

It also changed the roll out obligations for BWA services and removed the clause of covering specific areas at the end of two years from spectrum allocation date and retained only five years periodicity for fulfilling obligations.

(PTI)

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Yahoo plans to open up more with the first major redesign of its home page since May 2006. The changes will enable Yahoo users to plant more mini-applications known as “widgets” on personalised versions of the home page, said Ash Patel, executive vice president of the company’s audience product division.  

(Agencies)

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“That uncertainty is being reflected in [customers’] ability to increase their spending. Even when budgets are released they’re not sure if they’ll get the returns…so they are not able to kick off projects,” Gopalakrishnan said.

Last year, Infosys posted revenue of Rs 167 billion, reporting a 20% year-over-year rise. The report said that another IT major Tata Consultancy Services had also stated similar concerns earlier. However, he said that Infosys isn’t seeing any rise in cancellations or demands for price cuts from its clients. The company is maintaining its margin guidance for the fiscal year.

Besides, the WSJ report also quoted Gopalakrishnan saying that the company’s 407.1 million pound offer for UK-based enterprise-software consulting company Axon Group PLC is a “fair valuation of the company” and that the offer had Axon management’s support. He further added that it is possible that a rival bid may arise, but did not mention that whether Infosys would raise its offer if new bidder emerges. (PTI)

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