Stay abreast of the fast moving economic super-power — India!
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Stay abreast of the fast moving economic super-power — India!
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Exporters get interest relief on credit, higher refundsWeekly reports on Indian economy and business
Government Policy & Infrastructure This week brought in some good news as the Government offered a ‘relief’ package to exporters hit by the relentless rupee appreciation, with special focus on sectors that have been affected the most by rupee appreciation. - Chillibreeze Business Research Team Government Policy & infrastructureFDI cap review on the cards The Government is likely to complete the review of direct and indirect holding of foreign direct investments caps (in all sectors) by the end of this month. Official sources indicated that the entire exercise, including a revision in the definition of indirect holding, is likely to be completed and forwarded to the Cabinet in the next two weeks. The FIPB was keen that the Indian parties who do not have the right to sell shares (basically warehousing shares for others) should not be counted as indirect Indian holding for ascertaining the sectoral caps. July 14, 2007 The income-tax collection is likely to rise in the current fiscal to touch Rs 87,570 crore from Rs 82,510 crore last year, according to industry body Assocham. The number of income-tax payers will jump from 25 million to 30 million. By 2010, the chamber has projected 44.7 per cent hike in the income-tax collection for the Finance Ministry, thereby collections reaching Rs 1,19,443 crore mark with number of tax payers exceeding 45 million. The chamber also said that the share of income-tax in the tax revenue of the Government has risen from 10 per cent to 17 per cent in the last 15 years. One of the reasons of a higher number of people falling under income-tax net in future is widening of the service tax base. Currently, services account for about over 54 per cent to the GDP. As for the corporate tax, the chamber estimates that by 2010 the figure of corporate tax would reach Rs 2,04,784 crore from Rs 14,6497 crore in 2006-07, registering a growth of nearly 40 per cent. July 14, 2007 Exporters get interest relief on credit, higher refunds The Government on Thursday unveiled a ‘relief’ package for exporters reeling under the relentless rise of rupee vis-À-vis the US dollar in recent months, with special focus on sectors that have been affected the most by rupee appreciation. The Finance Ministry’s package essentially comprises three components –— interest relief on export credit, which means that the Government will bear interest cost to the extent of 2 percentage points , increase in duty drawback rates in nearly all items and an administrative action to enable the Commerce Ministry to expeditiously settle deemed export benefit reimbursement claims. Announcing the features of the package, the Finance Secretary, Dr Duvvuri Subbarao, said that the Government has been especially “sympathetic” to sectors that are less import intensive and are unable to take advantage of cheaper imported inputs, but have high value addition possibilities. July 13, 2007 Infrastructure sector posts 8.7% growth in May Buoyed by high growth rate in petroleum refinery product output and higher production of finished carbon steel, the index for infrastructure industries registered a growth of 8.7 per cent in May this year compared with 7.2 per cent in May 2006. Growth in petroleum refinery products peaked to 14.9 per cent in May this year compared with 12.1 per cent during the same month of the previous year. During the first two months of the current fiscal (April-May), the overall growth rate of refinery products is estimated at 15 per cent (12.6 per cent). July 13, 2007 Rs 50K cr needed for Mumbai Mumbai needs up to Rs 18,000-50,000 crore just to take care of its infrastructure. This is besides what the city needs for planned redevelopment, according to the Remaking of Mumbai Federation, a body of associations and eminent personalities. The federation will lead a delegation to a conference in Shanghai to attract international investment and partnerships. The conference will see at least 300 delegates in the field of urban development sharing technical and design expertise on tall buildings and urban habitats. "The federation is looking at a joint venture route for faster and better planned growth, while releasing enough funds for much-needed up-gradation of infrastructure," said Lalit Gandhi, chairman and managing director, Lok Housing and Constructions Ltd. The idea is to create a single planning, regulatory and decision-making body on a public private partnership basis which will oversee the sector-by-sector development of the city. The body would focus on 'vertical development' of the city, leaving scope for adequate open spaces for public use. July 11, 2007 Govt weighs hike in viability gap funding In a move which could lend great support to private players, the government is considering increasing the limit for viability gap funding beyond 20%. Metro projects in the country would be the biggest beneficiary if the proposal comes through. The ministry of urban development is in talks with both — the finance ministry and the Planning Commission — over the proposal for increase in the VGF cap. According to sources in the government, while the Planning Commission is in favour of the move, the finance ministry is also considering it. If the proposal comes through, it would open more fund-flow into the transport sector, which is under pressure due to lack of finance. As per the present guidelines, the VGF funding for a public-private partnership (PPP) project is just 20% of the project cost. The remaining part is jointly financed by the state and the private parties. Metro rail projects are taking the VGF route due to their high-cost structure. The Mumbai metro connecting Ghatkopar and Versova is an example of a PPP project. Similarly, the West Bengal government is also scouting for private players for developing new metro lines and extension of the existing metro. Many states are coming up with proposals for bus rapid transit systems on PPP model. Delhi, Bhopal, Indore, Ahmedabad and Chennai are several such cities wanting to have modern bus systems. July 10, 2007 EconomyRe nears 9-year high The rupee climbed towards a nine-year high on Thursday, but suspected RBI intervention and dollar buying by oil refiners halted its ascent, traders said. At 10:25 am (0455 GMT), the partially convertible rupee was at 40.36/37 per dollar - near a nine-year peak of 40.28 it hit in May. It closed on Wednesday at 40.40/41. Heavy capital inflows have pushed the rupee up by more than 9.5 per cent so far in 2007, making it Asia's best performing currency and forcing the central bank to intervene heavily to protect exporters' margins. Infosys Technologies, India's number-two software exporter, on Wednesday cut its full-year earnings forecast in rupee terms and said the currency's sharp rise was hurting its operating margins. Foreigners have bought Indian shares worth more than $7.5 billion so far in 2007, compared with $8 billion for the whole of 2006. Reserve Bank of India Governor Yaga Venugopal Reddy said earlier this month the central bank was facing severe policy challenges in managing capital flows and analysts expect overseas borrowings to be tightened to help curb inflows. The RBI bought $2.06 billion through currency market intervention in April, taking the total purchases to $24 billion for the six months from November. It is widely suspected of selling rupees over the past month to keep the dollar above 40 rupees. July 12, 2007 Surviving in the global village Over the past few years, it has become increasingly difficult to discuss the development of SMEs without making a link to the globalisation of markets and thus of the economy. Ease in international trade barriers, economic liberalisation, globalisation, privatisation, disinvestments and deregulation have thrown several challenges (and opportunities) for SMEs in India. Thus, globalisation is an advantage as well as a challenge for SMEs. Talking about challenges, Pramodh Menon, Senior VP – Commercial, Cisco India & SAARC, says, "Indian SMEs have become part of a global supply chain. To stay competitive in this environment, SMEs must adopt collaborative technologies. They need to use their network as a platform for more effective and personalised global business collaboration.” The impact of globalisation on SMEs is a result of direct and indirect interaction with foreign firms through forward and backward linkages. Through backward linkages, foreign firms work with host country firms to supply inputs, such as raw materials, products or services. These are part of the foreign firm's global value chain. On the other hand, with forward linkages, host country firms are contracted by foreign firms to channel products and services to final consumers as distributors or intermediaries for foreign firms. Indirect interaction takes place when foreign firms compete with host country firms for resources and markets. Other forms of indirect interaction may come from the movement of labour between foreign firms and host country SMEs. The greater the interaction between the two, the higher the likelihood that foreign owned firms will influence the performance of local firms. Says Suman Bose, Country Director-India, Dassault Systems PLM Sales, "SMEs are being forced to adopt a global context, even if they are not involved directly. They are being forced to re-do their products and they will have to source profitably to offer consumer-surplus pricing, scout for new sales channel including internet, and explore cross border financing to lower cost of capital." It is feared that globalisation will constrain small businesses which are at the source of most job creation in most industrialised countries. There are also those SMEs who fear the vanishing of trade barriers and are being forced to sell their products and services to customers at lower prices; because if they don't, some vendor in another part of the world will take away the customer. July 10, 2007 Another action-packed month for fund-thirsty India Inc Indian companies continue to be on a capital-raising spree. After the record breaking amount of money mopped up in June through public issues, this month too promises to be an action-packed one. In the first week of July, India Inc raised around $1.4 billion, or close to Rs 6,000 crore, from markets here and abroad. The two notable issuances were from IDFC and Indiabulls Real Estate (IREL), apart from HDIL’s IPO and BEML’s follow-on public issue. IDFC raised around $519 million (Rs 2,100 crore) via a qualified institutional placement (QIP) issue, while IREL raised $400 million via a global depository receipts (GDR) issue. IDFC’s deal is the largest in the QIP space, since the option of raising money through this route was approved by the Securities and Exchange Board of India last year. QIP issues are public issues, but they don’t have a retail component. Only qualified institutional buyers are allowed to participate. The size of such deals is getting bigger. Only two public issues in 2007 were bigger than IDFC’s QIP issue — the Rs 9,187-crore DLF issue and the Rs 8,750-crore ICICI issue last month. Since April 2006 there have been only 7 IPO/FPOs in the domestic market with issuance greater than Rs 1,000 crore, while three QIP issues fall in this category. Clearly, there is enough depth in the QIP route to avoid the retail route altogether. Also, companies save on issue expenses. The $400-million, or roughly Rs 1,640-crore, GDR issue of Indiabulls Real Estate once again highlights the tremendous resource raising capability of this company which came into being over a year ago. Only DLF, Unitech and Hiranandani have surpassed IREL in terms of raising funds. Recent months are reinforcing the trend that foreign investors have greater faith in the Indian growth story than local investors. Indian companies are often able to raise far greater amounts in foreign markets than Indian markets, as is the example of the real estate sector. Of the top 5 real estate issues, four were done in foreign markets — three on AIM and one on the Luxumbourg Stock Exchange. Even a QIP issue is subscribed to largely by foreign investors. Another interesting point is increasing diversity an Indian company is looking to raise capital enjoys at this point. Private equity, QIP, an AIM listing – any of these can be used to raise substantial funds like a few thousand crores. Till the 90s, Indian companies largely had only the domestic IPO/FPO market to go for raising money. The GDR market sizzled for a brief while in the mid-90s and then dried out. With these new options, alongside a vibrant ADR/GDR and domestic public markets, equity capital seems to be on tap. No wonder, the secondary markets hit a new high last week. July 9, 2007 Sector SpecificsEnergyOil breaches $77 to hit 11 month high Oil rose on Friday, hitting an 11-month high above $77 a barrel on speculative buying as North Sea production problems and forecasts for rising demand tightened the supply outlook. Oil has gained more than $6 in two weeks on a wave of buying by funds during the US summer vacation season, when demand for gasoline peaks in the top oil-consuming country. Adding to supply jitters was a report by the International Energy Agency which forecast oil demand growth will grow more quickly in 2008 than this year. Dealers remain anxious over supplies from countries such as Nigeria and Iran, but most traders attribute much of oil's latest rally to a fresh infusion of fund money. "There is no lack of crude supply fundamentally, but funds are betting on a more bullish market, hence a great deal of buying," said Tetsu Emori of Astmax Futures in Tokyo. OPEC members also maintain markets are well supplied and have rejected calls to ramp up production when the group next meets in September. July 14, 2007 Dabhol gets natural gas for power gen State-run gas firm GAIL (India) has delivered the first ever gas to the Dabhol power plant in Maharashtra, paving the way for the beleaguered unit to switch from expensive naphtha to the cheaper green fuel. Gas was transported through a 577-km pipeline from Dahej in Gujarat where Petronet LNG is importing 1.25 million tonnes of natural gas in liquefied form (LNG) from Qatar. This is the first time the Dabhol plant has received gas supplies since beginning operations in May 1999. But it will not be before next weekend that the plant starts generating electricity from gas as the system gradually shifts from liquid fuel to gas. GAIL chairman and managing director U D Choubey said GAIL's Dahej-Uran-Dabhol pipeline was a landmark as it was completed in a record eight months despite several obstacles, notably opposition from farmers in Maharashtra and Gujarat, difficult terrain and bad weather. Ratnagiri Gas and Power Pvt Ltd, the new owner of the project originally promoted by bankrupt US energy major Enron, will by month-end start generating about 1,400 MW of electricity from gas. It will scale up to peak capacity of 2,184 MW by the year-end when a third unit is commissioned. Dabhol plant's Phase-I (740-MW) began operating on naphtha in May 1999, but was shut down in May 2001 after its sole customer Maharashtra State Electricity Board refused to buy expensive power. After Enron's bankruptcy, the project was taken over by RGPPL -- a joint venture between state-owned power major NTPC Ltd, GAIL and Indian banks. July 13, 2007 Gas pricing row to end within a month: Deora Oil minister Murli Deora on Thursday said the government will resolve the debate over how gas from auctioned acreages should be priced within a month. This is the first official statement since the government faced the conundrum and came on a day that saw Anil Ambani lobbying top bureaucrats for the second time pushing for government intervention against market-pricing. The government has been caught in the debate arising from two sets of legal tussles — between entities promoted by Ambani brothers and NTPC versus Mukesh Ambani’s RIL. In the eye of the storm is huge gas field being developed by RIL off the Andhra coast. Anil Ambani has rejected $4.33/m-Btu price that RIL has found through a competitive bidding by fertliser and power firms. His argument is that the price is high and will raise power and fertlisers cost and push up fertliser subsidy burden. At $2.5 mBtu, the price at which Anil wants gas as this was offered by RIL to NTPC, the government’s share of gas from Andhra offshore will be worth $1.2 billion and royalty $1.6 billion. But at $4.5 mBtu, the figures jumps to $9.6 billion and royalty to $2.9 billion. Any incremental rise in fertiliser subsidy ($7.4 billion) from market price of gas can be met from this income and still there will be plenty left in the kitty. Even at a market price, gas will be cheaper than alternatives like naphtha ($15.3 mBtu), fuel oil ($9.36) and LNG ($7.91). This will save Rs 6,400 crore in fertliser subsidy. July 13, 2007 SMEs should play greater role in energy mgt Calling for sharing of responsibility to conserve energy, experts today said SMEs should play a greater role in energy management, at par with their global counterparts. The objective of the two day seminar starting today is to create awareness about techniques for effective energy management that facilitate reduction in both thermal and electricity consumption, CII said in a release here. July 12, 2007 'Regulator should determine gas prices' The Planning Commission, which has been directed by Prime Minister Manmohan Singh to provide an independent view on the gas pricing and allocation issues, has held that market prices of gas should be determined by an independent regulator in the absence of a gas market. Bids received from power and fertiliser companies cannot be taken as market driven prices as the fuel cost for both the sectors are passed on automatically to the consumer. Hectic parleys are currently on and stakeholders from the gas producing and gas consuming industries are busy making presentations to build their case. It is learnt that RIL chairman Mukesh Ambani met members in the Planning Commission on Monday to discuss issues related to KG basin gas pricing. This follows a presentation in mid-June by Anil Ambani of ADAG on the same issue. RIL and ONGC are slated to make official presentations on the issue to the committee of secretaries on Tuesday. The Planning Commission’s view is likely to be taken into consideration during the PM’s energy coordination committee meeting on the issue. July 10, 2007 Power reforms: Govt faces tough questions The Friday ruling of Delhi High Court in which it took a serious note of the observations made by the Comptroller and Auditor General’s report on power privatisation process here could force the government to answer some serious questions. The CAG in its report for 2002-03 had indicated that the state has suffered a loss of over Rs 6,000 crore due to decisions take during the unbundling of the Delhi Vidyut Board (DVB). The report had pointed that there was a significant dilution of the transmission and distribution (T&D) loss targets. This alone, according to the CAG, had caused a loss of Rs 3,928.70 crore. The report also questioned the process of choosing consultant to map the privatisation process in Delhi and pointed that the details of asset valuation were not made available to the auditors themselves. According to the report, the government received bids from Hyderabad’s Administrative Staff College of India (ASCI), SBI Caps and ICICI for consultancy work but SBI Caps was appointed without an attempt to assess and define the scope of work. ‘‘Transco raised a bill of Rs 77.47 crore for stores transferred to discoms but could not realise any amount so far. Further, Rs 2.06 crore worth of scrap/dead items recoverable from discoms were not taken into account,’’ said the report. The report has also raised objections over the selection of consultants and amount recovered from private companies by Transco for stores and material. The CAG report had reviewed the process of unbundling DVB, the modalities of transfer of assets, reduction of technical and distribution losses, the rationality of incentives provided and the impact of various assumptions on tariff. Delhi government had privatised the distribution of power in 2002. July 8, 2007 Banking & FinanceFinancial super-markets, boutique investment outfits will survive’ Financial super-markets and boutique investment outfits will both survive in the Indian market, thanks to growing demand for their services. Players in each group will, however, have to offer certain special services in order to ensure their sustained presence in a competitive environment, said Ms K. Kamala, Vice-President, National Stock Exchange, here on Saturday. She was addressing a meeting organised by ANMI and ICAI here on Saturday. The comment may be seen in the backdrop of growing competition among securities broking companies, thanks partially to foreign players who have trooped to India in recent years. “There has been a lot of demand for investments. Many of the foreign companies that are coming here are very strong, both financially and operationally,” she said, adding that all interested parties should come together in order to make the capital market a safer place, especially so for the common investor. The NSE Vice-President underscored the need to view the capital market in an integrated manner – not in isolation or simply in terms of transactions. “Mere execution of orders is not sufficient. What is needed is value-addition. Investors need more than just buying and selling of securities,” Ms Kamala said, while referring to the current practice by investors of approaching a wide range of players for various services. The reference was to different banks, brokers and insurance companies that investors are often required to go to. Integration of services, however, will require capital. Therefore, players willing to integrate their services may well have to consolidate their operations. Such consolidation will also allow them to compete more effectively, she said. Jul 15, 2007 Asian banks shine post-crisis Ten years after Asia’s financial crisis crippled many of the region’s banks, lenders face new potential risks that analysts say they are in better position to handle this time around. Most Asian banks are booking big profits on strong loan growth amid the region’s economic surge, and while a crisis may not be looming, lenders need to gird themselves against possible jumps in inflation and a Chinese or Indian economic slowdown, among other risks. “Everyone has become very dependent on China and if we saw any economic difficulties in China, the Asian countries will be very hard hit because they are very reliant on exports to China,” said Peter Tebbutt, senior director at Fitch Ratings. “Banks would be hurt by any significant economic difficulties here in Asia, but they wouldn’t be hurt anywhere to the extent they were hurt back in 1997,” he said, citing sound capitalisation, diverse loan books and less foreign currency lending as the reasons for their new-found strength. Asian economies, particularly South Korea, Indonesia and Thailand, were caught out 10 years ago when foreign investors pulled their cash out of the region, a currency exodus that led to the collapse of currency pegs and asset prices. Banks who had lent to a number of enterprises during the preceding economic boom were left holding the bag in the form of bad loans and a big build-up of foreign currency debt they couldn’t finance. “They were really — particularly in Indonesia and Korea — houses of cards back then,” Tebbutt said. Lenders like South Korea’s Kookmin Bank and Shinhan Financial , Thailand’s Bangkok Bank and Kasikornbank and Indonesia’s Bank Mandiri and Bank Danamon are all in good shape, and analysts and bankers said times have changed from 10 years ago. But bank analyst Deborah Schuler of Moody’s Investors Service said notable risks to disrupt the current rosy picture are high oil prices — and the resulting inflation — and a pile of foreign currency reserves in Asia hunting too few investment ideas which could lead to asset price bubbles. “Things are good in Asia and India and China will continue to provide GDP growth to the region — but some sort of downturn is probably unavoidable,” Schuler said. July 14, 2007 Moody’s assigns stable rating for Indian banks Moody’s rating agency has given stable outlook for India’s banking industry, stating that the rating is driven by relatively “solid financial metrics amid a benign operating environment conducive to credit growth”. In its banking system outlook on India, released in Hong Kong today, Moody’s Investor Service said the stable rating outlook for Indian banks reflects the country’s robust credit growth against the backdrop of a favourable economic milieu, as well as improvements in the banks’ overall financial metrics and strong deposit franchises. Stating that implicit government support for systemically important banks has lifted the global local currency (LLC) deposit ratings of most rated banks, it said Moody’s new rating approach in assigning Bank Fundamental Strength Ratings (BFSRs) and deposit/debt ratings through its joint default analysis methodology has benefited most of the Indian banks. Moody’s said there is scope for consolidation in India’s relatively crowded and fragmented banking system, which is likely to increase as competition intensifies. It further said the Indian economy continues its growth trajectory with GDP growing at 9.4 per cent during the fiscal year ended March 2007. This robust macroeconomic environment continues to bolster the financial performance of Indian banks, which are faced with “a broad-based credit demand, with the industrial sector having picked up and the corporate sector showing increased credit appetite, together with robust growth in retail loans and in mortgages in particular”. It also voiced concern over the banks’ still relatively undiversified earnings profile geared towards interest income, as well as sizeable portfolios of fixed income securities that bring about elevated interest rate risk. July 12, 2007 PE firms beat India Inc on the M&A turf The private equity (PE) juggernaut, which has been scorching the global deal street, has come of age in India. For the first time, the value of PE deals in a single month has overtaken that of strategic merger & acquisitions (M&A). June reported $1.8 billion worth of PE deals in the country — the highest in a single month — overtaking strategic M&A deals at $1.72 billion. As per the latest deal tracker by advisory firm Grant Thornton, there were 36 PE deals during June totalling $1.81 billion as against 24 deals worth $1.56 billion during May. June witnessed the country’s largest management buyout, where PE major Blackstone acquired BPO firm Intelenet in a $200-million deal. The month also reported the first global buyout by an Indian PE fund, where ICICI Venture Capital — the private equity arm of ICICI Bank — acquired a majority stake in the US-based clinical research company, Radiant Research. During the first half of this year, India has clocked 350 strategic M&A deals worth $48.5 billion in addition to 202 PE deals worth $6.92 billion. This marks almost a five-time jump in the value of strategic M&As compared to the first half of 2006, even though the number of deals remains the same. At the same time, the total value of PE deals in the first half has doubled compared to about $3.5 billion during H1 last year, with a 50% jump in the number of such deals. July 9, 2007 SEZsGovt's nod to RIL's Navi Mumbai SEZ; 27 others Undaunted by criticism by a Parliamentary panel, the government on Thursday cleared 28 fresh SEZ proposals, including the Navi Mumbai promoted by Reliance Industries Chairman Mukesh Ambani, taking the total number of approvals to over 500. The Board of Approvals gave formal approvals to 21 Special Economic Zone (SEZ) proposals and seven 'in-principle' cases. The Navi Mumbai SEZ proposal of Ambani and his close aide Anand Jain was finally given the nod after the Centre received a green signal from the Maharashtra government. The state government was asked to give its views on the report of Revenue Department, which raised issues that included rights of the villagers in the area. The Parliamentary Standing Committee, headed by senior BJP leader Murli Manohar Joshi, had asked the government last week to put a freeze on fresh notifications until the SEZ Act and the rules were changed. The committee observed that the government was showing "undue haste" in clearing SEZs, ignoring interests of farmers and other stakeholders. July 12, 2007 41 SEZs coming up for approval tomorrow Within a week of Parliamentary Committee asking the government to put a freeze on notification of SEZs, the Board of Approval (BoA) will meet tomorrow to consider 41 cases that would take the total clearances above 500. The BoA, headed by Commerce Secretary G K Pillai, will consider granting formal clearances to Mukesh Ambani-promoted Navi Mumbai Special Economic Zone (SEZ) and Hindalco aluminium SEZ in Orissa. The proposal for a multi-product SEZ in Chhindwara, Commerce Minister Kamal Nath's Lok Sabha constituency, is also coming up for a nod. The Navi Mumbai SEZ was deferred twice on issues, including protection of villagers' rights, raised by the Revenue Department. The Maharashtra government has given its clean chit on these issues. The SEZ proposals of other prominent companies listed for tomorrow include that of Unitech, Parasvnath and Videocon. Videocon proposes to set up a biotechnology SEZ at Siliguri in West Bengal for which a foundation stone was laid last month. The Standing Committee of Parliament headed by senior BJP leader Murli Manohar Joshi had said that no further zones should be notified till the SEZ Act and rules are amended to address concerns of displaced farmers. "Undue haste in approving SEZs and their proliferation has contributed to the resistance against the policy. There is an imperative need to understand the cause of farmers' agitation and grievance," the committee said. Of the 41 proposals listed for tomorrow's meeting, 31 require formal clearance while the others are coming for in-principle sanction. So far 339 tax-free enclaves have been given formal approvals and 162 in-principles. Of the 339, 127 have been notified. July 11, 2007 InternationalIndia Inc climbs on Fortune Global 500 list Five Indian companies, including Indian Oil Corp (IOC) and Reliance Industries, have improved their rankings in the Fortune Global 500 list this year, giving India Inc much to cheer about. Three other incumbents - Bharat Petroleum, (BPCL) Hindustan Petroleum (HPCL) and Oil and Natural gas Corp (ONGC) - have also improved their position, climbing higher on the ranking ladder. Mukesh Ambani-owned Reliance, which is the only private sector company on the list, also figured as among the 25 fastest climbers - improving its position by 73 ranks from 342nd in 2006 to 296th position in 2007 - with a ranking of 23. State-run IOC continued to maintain its position as the highest ranked Indian firm on the 500 top corporates worldwide, gaining 48 positions compared to 17 last year. Reliance holds the 269th position in terms of sales, 179th in profits, 299th in term of assets and it 190th in shareholder equity as it features as the 350 largest company among the top 500 corporates. IOC, on the other hand, is ranked 135th in terms of sales, 249th in profits and 380th in terms of assets. It is the 364th largest company in the world. Meanwhile, BPCL moved up 43 position to the 325th rank while HPCL was placed 336th, up 32 position, and ONGC gained 32 position to be ranked 369th. State-run State Bank of India which made its debut on the top global companies list last year, moved up three positions to 485th. The US-based retail giant Wal-Mart tops the list, nudging aside last year's topper energy major Exxon Mobil to the second spot, a Fortune Global 500 statement said of the list which would be published in the August issue of the magazine. July 12, 2007 AgricultureHigher advance targets set for agri, SSI, priority sectors The State-Level Bankers' Committee, West Bengal, at a meeting here on Wednesday, finalised the Annual Action Plan for 2007-08 by setting higher advance targets for agriculture, SSI and the overall priority sector for the year vis-à-vis 2006-07. Thus, the target for agriculture advance has been set at Rs 5,000 crore in 2007-08 as compared to Rs 3,850 crore in 2006-07, thus envisaging a growth of 39.7 per cent, for SSI sector at Rs 3,000 crore Rs 1,513 crore). The banks in West Bengal, as P.K. Gupta, CMD of United Bank of India indicated, would be keen to extend assistance to 1 lakh bargadars and another 1lakh pattadars in the current year, as suggested by the State Government. The performance of 2006- 07 included, among others, achieving higher CD ratio at 66 per cent, 23 per cent growth in deposits, 39 per cent rise in priority sector advances and 26 per cent growth in SSI advances. The advances to weaker sections increased by 43 per cent and to women entrepreneurs by 46 per cent. July 13, 2007 Urea distribution policy upsets Gujarat farmers Farmers in Gujarat are up in arms against the new urea distribution policy formulated by the ministry of chemical and fertilisers wherein each district will be having only three distribution-cum-warehousing centres. The move is aimed at bringing the urea distribution under 100% government regulation. The companies manufacturing fertilisers have been asked to identify three centres from where urea will be distributed to the farmers by the respective cooperative societies. Sources said there are more than 3,000 warehouse-cum-distribution centres across the state from where farmers used to procure urea and other fertilisers as per their requirement. The Krishak Bharati Cooperative (Kribhco) has been distributing urea and bio fertilisers from around 1,500 centres across the state. With the new policy in place, the state will have less than 100 distribution centres. If the farmers are to be believed, then the regulation of urea distribution is likely to increase financial burden on the farmers. Small and marginal farmers from the far-flung villages are the worst-affected as they have to cough up hefty transportation charges to bring in the urea consignment from the distribution centres. “The Centre has fixed district-wise quotas and thus, there is no need to regulate the distribution of fertilisers,” said president of South Gujarat Farmers Association, Kasan Patel. According to him, the annual requirement of fertilisers across the state is around 8.5 lakh tonne. This year, the government has fixed only 6.8 lakh tonne quota for the state. However, there is still a shortage of 1.5 lakh tonne. Not only the farmers, even the companies manufacturing fertilisers are the feeling the heat of the new distribution policy. The companies were allowed to sell up to 50% of their production in the region of their choice. However, with government regulation, the companies are now busy looking for the potential centres in each district for distributing urea and other fertilisers. July 12, 2007
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