Events of the fortnight
Former Samajwadi Party
leader Amar Singh, after being arrested in the cash-for-votes scandal. He
joined a growing band of VIPs in Tihar Jail: former telecom minister A. Raja
and DMK leader Kanimozhi, both accused in the 2G spectrum scam, former
Jharkhand Chief Minister Madhu Koda and Commonwealth Games chief Suresh
Kalmadi.
Former Samajwadi Party leader Amar Singh, after being arrested in the cash-for-votes scandal. He joined a growing band of VIPs in Tihar Jail: former telecom minister A. Raja and DMK leader Kanimozhi, both accused in the 2G spectrum scam, former Jharkhand
CORPORATE
The Union Cabinet has cleared the draft National Land Acquisition and Rehabilitation & Resettlement Bill, 2011, designed to replace the antiquated Land Acquisition Act, 1894. A new law became imperative after a spate of agitations across the country over issues related to land acquisition and compensation.
Tata Motors' Group CEO and MD Carl-Peter Forster has quit due to 'personal circumstances'. At the request of the board, he has agreed to continue as a non-executive member. Prakash Telang, MD, India operations, and Ralf Speth, CEO of Jaguar Land Rover, will represent their operations on the board.
Fiat India will no longer sell its cars under the same roof as joint venture partner Tata Motors but will set up its own showrooms in 20 cities. In August, the joint venture sold 1,069 Fiat cars and 16,829 Tata cars.
Car sales are skidding ahead of the festival season. For the second consecutive month, top carmakers have reported lower numbers in August. Maruti Suzuki's sales were down 16.8 per cent on August 2010 to 77,086 units in August this year. Tata sold 16,829 units of the Nano, a drop of 33.25 per cent against the August 2010 numbers. Hyundai Motor India sold 26,677 units, down 6.7 per cent from 28,601 in August last year. The industry blamed high fuel prices, interest rates, and, in the case of Maruti, labour unrest. Honda Siel Cars, Toyota Kirloskar and M&M were among those which increased sales with the help of price cuts and launches. Honda inccreased sales of its City by 35 per cent to 5,819 units by cutting the price. In August 2010, it had sold 4,251 units. It is recalling 72,115 units manufactured between 2005 and 2007.
The Comptroller and Auditor General, or CAG, has criticised Reliance Industries for violating the production sharing contract in its D6 block in the Krishna Godavari basin. The report criticised the oil and gas major for hoarding D6 exploration acreage despite lack of rigs. RIL may have to surrender a quarter of the total area and pay $200 million as penalty. The offshore KG basin was expected to meet a quarter of India's natural gas requirements, but lowerthan-expected production has left the nation more dependent on expensive, imported LNG to fuel power and fertiliser plants.
The CAG has also criticised the civil aviation ministry and Praful Patel for the decision to buy 111 aircraft worth $46,548 crore for Air India and concluding pacts favouring foreign carriers, when Patel was heading the minsitry. It has also criticised the manner in which AI and India Airlines were merged.
In the latest ultimatum to Switzerland's banks, the US has demanded details of its citizens with accounts worth at least $50,000 between 2002 and 2010 in these banks. The US suspects the Swiss bank accounts are being used to avoid tax. Last year, the US forced Swiss bank UBS to reveal the details of around 4,450 clients. This time, its targets are Credit Suisse and nine other smaller Swiss banks. Switzerland has a $2 trillion offshore financial industry.
The US jobs growth has hit another low, stagnating in August at 9.1 per cent. Even if the US Federal Reserve Chairman Ben Bernanke cuts borrowing costs, his new stimulus measures may not help the 14 million unemployed Americans.
Amazon, the world's biggest online store with revenues of $34 billion in 2010, is planning its own tablet. It will be priced at around $250. It is also redesigning its web site, emphasising its digital goods over physical ones.
Yahoo's board fired its chief executive, Carol A. Bartz, for failing to deliver results. Bartz turned over Yahoo's search operations, drawing 600 million visitors, to Microsoft, but the deal failed.
ECONOMY
GDP growth is likely to be in the region of 7.5-8 per cent in 2011/12, said Moody's Investor Service in its latest annual sovereign report. Inflation could slow down to about seven per cent. The rating agency has not changed the country's sovereign credit outlook.
At least one business school is planning to make Anna Hazare's movement against corruption a case study. XLRI School of Business and Human Resources will look into various aspects of the movement, particularly Hazare's leadership. Politicians of two states that pride themselves on economic development are mired in corruption cases. In Andhra Pradesh, former Chief Minister Y.S.Rajasekhara Reddy's son Jaganmohan Reddy is trying to explain to the Central Bureau of Investigation his sudden rise in wealth. In Karnataka, former Bharatiya Janata Party minister Janardhana Reddy was arrested on charges of illegal mining.
India has cleared off the $5 billion it owed Iran for petroleum purchases, using a Turkish bank. BT fi rst reported (July 24) how the payments got stuck when the usual route was blocked.
49% Dip in hiring by Indian IT and ITeS companies in August, compared to July, following the crisis in the US and Europe. But sectors such as FMCG, banking, telecom and automobiles stepped up recruitment by 14 per cent, compared to July, according to a survey by MyHiringClub.com
2.8 million The number of high net worth individuals, or HNIs, in Asia, a rise of 140 per cent, by 2015. HNIs are those with investible assets of $1 million or more, excluding their first homes. Key sectors to benefit from this prosperous club include asset management, autos, consumer goods, healthcare, leisure and property, according to the latest report from CLSA Asia-Pacific Markets.
MARKETS
The Reserve Bank of India has come to the rescue of borrowers who wish to prepay home and car loans. Following its advice, banks have agreed not to levy prepayment penalties on fl oating rate loans. These charges are sometimes as high as fi ve per cent of the loan amount. The removal of penalty gives customers the freedom to shift loans to other banks if they get better interest rates.
ONGC is about to sell fi ve per cent or up to 426.77 million of its shares via a follow-on public offer, or FPO, on September 20. Originally, the FPO was planned in the fi nancial year 2010/11, but was deferred to April 5, 2011, as the company did not have the number of independent directors required, according to the listing rules of the market regulator. After the FPO, the government's stake in ONGC will shrink to 69.14 per cent from the present 74.14 per cent.
COMING UP
The new manufacturing policy, which plans to usher in mega manufacturing industrial zones and help create 100 million jobs, is taking final shape. The policy aims at increasing the share of manufacturing from 16 per cent of GDP at present to 25 per cent by 2025. The Centre for Monitoring Indian Economy has modified its earlier forecast of 34.2 per cent rise in profit of this sector for the quarter ended September 30. Now it expects profit to fall by 5.7 per cent.
Say goodbye to pesky calls: The Telecom Regulatory Authority of India's new norms will be effective from September 27. Telemarketing firms that call or text reluctant consumers may have to pay fines up to Rs 2.5 lakh.
The Union Cabinet has cleared the draft National Land Acquisition and Rehabilitation & Resettlement Bill, 2011, designed to replace the antiquated Land Acquisition Act, 1894. A new law became imperative after a spate of agitations across the country over issues related to land acquisition and compensation.
Tata Motors' Group CEO and MD Carl-Peter Forster has quit due to 'personal circumstances'. At the request of the board, he has agreed to continue as a non-executive member. Prakash Telang, MD, India operations, and Ralf Speth, CEO of Jaguar Land Rover, will represent their operations on the board.
Fiat India will no longer sell its cars under the same roof as joint venture partner Tata Motors but will set up its own showrooms in 20 cities. In August, the joint venture sold 1,069 Fiat cars and 16,829 Tata cars.
Car sales are skidding ahead of the festival season. For the second consecutive month, top carmakers have reported lower numbers in August. Maruti Suzuki's sales were down 16.8 per cent on August 2010 to 77,086 units in August this year. Tata sold 16,829 units of the Nano, a drop of 33.25 per cent against the August 2010 numbers. Hyundai Motor India sold 26,677 units, down 6.7 per cent from 28,601 in August last year. The industry blamed high fuel prices, interest rates, and, in the case of Maruti, labour unrest. Honda Siel Cars, Toyota Kirloskar and M&M were among those which increased sales with the help of price cuts and launches. Honda inccreased sales of its City by 35 per cent to 5,819 units by cutting the price. In August 2010, it had sold 4,251 units. It is recalling 72,115 units manufactured between 2005 and 2007.
The Comptroller and Auditor General, or CAG, has criticised Reliance Industries for violating the production sharing contract in its D6 block in the Krishna Godavari basin. The report criticised the oil and gas major for hoarding D6 exploration acreage despite lack of rigs. RIL may have to surrender a quarter of the total area and pay $200 million as penalty. The offshore KG basin was expected to meet a quarter of India's natural gas requirements, but lowerthan-expected production has left the nation more dependent on expensive, imported LNG to fuel power and fertiliser plants.
The CAG has also criticised the civil aviation ministry and Praful Patel for the decision to buy 111 aircraft worth $46,548 crore for Air India and concluding pacts favouring foreign carriers, when Patel was heading the minsitry. It has also criticised the manner in which AI and India Airlines were merged.
In the latest ultimatum to Switzerland's banks, the US has demanded details of its citizens with accounts worth at least $50,000 between 2002 and 2010 in these banks. The US suspects the Swiss bank accounts are being used to avoid tax. Last year, the US forced Swiss bank UBS to reveal the details of around 4,450 clients. This time, its targets are Credit Suisse and nine other smaller Swiss banks. Switzerland has a $2 trillion offshore financial industry.
The US jobs growth has hit another low, stagnating in August at 9.1 per cent. Even if the US Federal Reserve Chairman Ben Bernanke cuts borrowing costs, his new stimulus measures may not help the 14 million unemployed Americans.
Amazon, the world's biggest online store with revenues of $34 billion in 2010, is planning its own tablet. It will be priced at around $250. It is also redesigning its web site, emphasising its digital goods over physical ones.
Yahoo's board fired its chief executive, Carol A. Bartz, for failing to deliver results. Bartz turned over Yahoo's search operations, drawing 600 million visitors, to Microsoft, but the deal failed.
ECONOMY
GDP growth is likely to be in the region of 7.5-8 per cent in 2011/12, said Moody's Investor Service in its latest annual sovereign report. Inflation could slow down to about seven per cent. The rating agency has not changed the country's sovereign credit outlook.
At least one business school is planning to make Anna Hazare's movement against corruption a case study. XLRI School of Business and Human Resources will look into various aspects of the movement, particularly Hazare's leadership. Politicians of two states that pride themselves on economic development are mired in corruption cases. In Andhra Pradesh, former Chief Minister Y.S.Rajasekhara Reddy's son Jaganmohan Reddy is trying to explain to the Central Bureau of Investigation his sudden rise in wealth. In Karnataka, former Bharatiya Janata Party minister Janardhana Reddy was arrested on charges of illegal mining.
India has cleared off the $5 billion it owed Iran for petroleum purchases, using a Turkish bank. BT fi rst reported (July 24) how the payments got stuck when the usual route was blocked.
49% Dip in hiring by Indian IT and ITeS companies in August, compared to July, following the crisis in the US and Europe. But sectors such as FMCG, banking, telecom and automobiles stepped up recruitment by 14 per cent, compared to July, according to a survey by MyHiringClub.com
2.8 million The number of high net worth individuals, or HNIs, in Asia, a rise of 140 per cent, by 2015. HNIs are those with investible assets of $1 million or more, excluding their first homes. Key sectors to benefit from this prosperous club include asset management, autos, consumer goods, healthcare, leisure and property, according to the latest report from CLSA Asia-Pacific Markets.
MARKETS
The Reserve Bank of India has come to the rescue of borrowers who wish to prepay home and car loans. Following its advice, banks have agreed not to levy prepayment penalties on fl oating rate loans. These charges are sometimes as high as fi ve per cent of the loan amount. The removal of penalty gives customers the freedom to shift loans to other banks if they get better interest rates.
ONGC is about to sell fi ve per cent or up to 426.77 million of its shares via a follow-on public offer, or FPO, on September 20. Originally, the FPO was planned in the fi nancial year 2010/11, but was deferred to April 5, 2011, as the company did not have the number of independent directors required, according to the listing rules of the market regulator. After the FPO, the government's stake in ONGC will shrink to 69.14 per cent from the present 74.14 per cent.
COMING UP
The new manufacturing policy, which plans to usher in mega manufacturing industrial zones and help create 100 million jobs, is taking final shape. The policy aims at increasing the share of manufacturing from 16 per cent of GDP at present to 25 per cent by 2025. The Centre for Monitoring Indian Economy has modified its earlier forecast of 34.2 per cent rise in profit of this sector for the quarter ended September 30. Now it expects profit to fall by 5.7 per cent.
Say goodbye to pesky calls: The Telecom Regulatory Authority of India's new norms will be effective from September 27. Telemarketing firms that call or text reluctant consumers may have to pay fines up to Rs 2.5 lakh.
