BJP demands rollback of hike in petrol, diesel prices

Accusing the UPA government of "plundering" the common man, the opposition BJP today demanded a rollback of hike in prices of petrol and diesel. "We condemn the government for hastily raising prices of petrol and diesel even as international prices for the crude oil have come down. We demand its immediate rollback," party spokesperson Prakash Javdekar told reporters outside Parliament. "They (UPA) sought votes during election in the name of aam admi. They have betrayed the people and are indulging in loot and plunder," he added. The BJP leader also accused the Centre of doing "nothing" over a "drought like situation" prevailing in the country and demanded the government implement a contingency plan if rains do not happen. "Farmers are suffering because of no rains. The government has done nothing and is simply tormenting the farmers. If rains do not take place, government should implement a contingency plan," Javdekar said.

DoCoMo eyes further investments in Asian carriers

Japan's NTT DoCoMo Inc said it is in talks with some Asian mobile carriers for possible capital investment as it aims to seek growth overseas to counter maturing cellphone market at home. DoCoMo's recent overseas investments include a 26 percent stake in Tata Teleservices, India's sixth-largest mobile operator, a 30 percent stake in Bangladesh telecom operator Axiata and a 16.5 percent stake in Malaysian operator U-Mobile . "Our main target is Asia, and there are some other (promising) countries there. We are in contact (with carriers in those countries," NTT DoCoMo Chief Executive Ryuji Yamada told Reuters in an interview on Thursday. He did not elaborate. Yamada also said he has not given up offering Apple Inc's iPhone to its subscribers. In Japan, Softbank Corp is the only carrier that offers the popular handsets at the moment.

Govt revokes coal supplies to 25 pvt power cos

India has cancelled allocation of coal supplies to 25 private power companies for not setting up plants that can annually generate 1,292 megawatts, the coal minister said on Friday. The country had assured coal supplies to several private firms for setting up their power plants. These firms are required to enter into fuel supply agreement with Coal India Ltd, a state-run monopoly coal producer. "However, it was noted that despite considerable lapse of time a large number of them did not set up the power plant despite having been accorded coal linkages by the ministry," Sriprakash Jaiswal told reporters. The companies, whose licenses have been cancelled, were expected to consume 5.844 million tonnes of coal every year. Jaiswal said the government may cancel the coal linkages of another 19 companies if they fail to provide details on their project status to Coal India in 15 days. The government, however, has asked 7 other firms to sign a fuel supply agreement with Coal India, Jaiswal added.

Govt revokes coal supplies to 25 pvt power cos

India has cancelled allocation of coal supplies to 25 private power companies for not setting up plants that can annually generate 1,292 megawatts, the coal minister said on Friday. The country had assured coal supplies to several private firms for setting up their power plants. These firms are required to enter into fuel supply agreement with Coal India Ltd, a state-run monopoly coal producer. "However, it was noted that despite considerable lapse of time a large number of them did not set up the power plant despite having been accorded coal linkages by the ministry," Sriprakash Jaiswal told reporters. The companies, whose licenses have been cancelled, were expected to consume 5.844 million tonnes of coal every year. Jaiswal said the government may cancel the coal linkages of another 19 companies if they fail to provide details on their project status to Coal India in 15 days. The government, however, has asked 7 other firms to sign a fuel supply agreement with Coal India, Jaiswal added.

Libor fall bails out Hindalco, JSW

The fall in the London Interbank Offered Rate (Libor) — the world’s most widely used reference rate for short-term lending — has come to the rescue of two prominent Indian companies which have recently breached their overseas loan agreements. Hindalco Industries and JSW Steel were each faced with a 100-basis point (one basis point is one-hundredth of a percentage point) rise in interest costs after they breached their loan covenants. However, with the six-month Libor currently quoting at 1.1% against 3.2% during the same time last year, the overall interest outgo for the two companies will come down. Till the financial crisis squeezed the global credit markets, Indian companies often raised cheap debt from overseas markets to fund their acquisitions and local capital expenditure. Hindalco Industries CFO Sunirmal Talukdar told that the company has already reached an agreement with its banks to change the covenant, while JSW Steel is still in negotiations with its lenders on relaxing the terms linked to its two foreign currency loans of $325 million. JSW expects to complete the talks this month, said joint managing director Seshagiri Rao. Mr Rao said the spread over Libor, on the foreign currency loans taken by JSW, could rise 100 basis points. But this will not immediately hike the final interest outgo. For the tenure of the loan post-September 2011, the company is in talks with lenders for bringing down the interest rates. According to a research report by Macquarie, “The JSW management is focused on reducing leverage to 1.5x from 1.8x in the next two years, but it will still be able to complete its steel expansion to 11 million tonnes by March 2011.” Covenants, in banking parlance, are typically terms and conditions associated with a loan that lenders insist on, to protect their exposure. A breach of covenants — usually triggered by external circumstances, including bad market conditions or internal problems faced by a company — attracts either a payment of a fee by the company to the banks, or a higher coupon rate on the loan contracted with the banks. In some extreme cases, banks can even ask the corporate to pre-pay the loan. In some cases, covenants spell out the acceptable limits for key financial ratios like the debt-to-Ebidta (earnings before interest, depreciation, taxation).

Budget bounty for infra, social sectors

Though under tremendous pressure to manage resources, the UPA is expected to enhance social sector and infrastructure spending in its budget for 2009-10 , in line with its strategy to beat the impact of global economic downturn. Sources pointed out that UPA-II budget is all set to provide an additional Rs 40,000 crore gross budgetary support from the interim budget (Rs 2,85,000 crore) and a significant increase of Rs 81,617 crore from the last fiscal (Rs 2,43,386 crore) for development programmes. According to top government sources, the sectors likely to get major focus would be social sector and infrastructure which will get major chunks of the additional allocations. Finance minister Pranab Mukherjee, reiterating the government’s commitment to give a boost to economic activity in rural areas , is expected to enhance further funding to the rural sector with an additional Rs 10,000 crore going to meet the growing demand of the flagship National Rural Employment Guarantee Scheme (NREGA) which turned out to be major vote-catcher for UPA. Sources indicate that expansion of the programme as well as raising the wages under NREGA have been kept in abeyance since the scheme is already taking around 12% of the national spending. Another pet scheme during UPA’s last tenure—the National Rural Health Mission (NRHM)—is likely to get an additional Rs 1,000 crore so as to provide better health services to the rural India. This will be in addition to the Rs 12,070 crore already allocated in the interim budget. With renewed focus on winning rural masses , the Rajiv Gandhi Grameen Vidyutikaran Yojana is likely to get an additional Rs 1,500 crore which has already been allotted Rs 6,000 crore in the interim budget. The scheme will focus on house-to-house electrification which would boost rural economy, sources said. The Pradhan Mantri Swasthya Suraksha Yojana is likely to be allocated Rs 1,100 crore. Under the scheme, the government envisages setting up of six new AIIMS-like institutions and upgradation of 13 existing government medical colleges. A provision of Rs 647.92 crore had been made for the scheme in the interim budget. Another flagship programme, the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), which has seen initial successes and is considered important for modernising urban areas, will get an additional Rs 1,200 crore against Rs 11,842 crore allocated in the interim budget. A chunk of this money would go for providing housing for the urban poor, sources said. The flagship programmes like the Sarva Shiksha Abhiyan, the Mid-Day Meal Scheme and the rural sanitation programme, may not get a substantial hike in allocations beyond what was given in the interim budget. SSA had got an impressive allocation of Rs 13,100 crore while Rs 8,000 crore was given for the Mid-day Meal Scheme. The rural sanitation programme had got Rs 1,200 crore in the interim budget. With the President highlighting the need to focus on women’s literacy and education, the government is likely to earmark Rs 7,000 crore to set up model schools in backward blocks and improve quality of education under SSA.

GAIL's mega gas highway plan

The Indian economy is slowly moving towards gas-based economy and that is where pipelines become one of the first priorities for the government. To address the issue the first names comes in mind is the government-owned gas transporter GAIL, which has proposed to set up a gas highway but that may also translate into another cess for the common man. With availability of 80 million cubic meters of gas from Reliance Industries' D-6 block in the Krishna Godavari basin, India's gas supplies will be doubled and to carry about 220 million square centimetre of gas per day, the government has already proposed the concept of a gas highway. Well, it seems that state owned gas transporter GAIL wants to implement it. GAIL has already sent the proposal for setting up a 6000 km gas highway that will attract an investment of about Rs 30,000 crore and to arrange the funds for the gas highway, GAIL has asked for budgetary allocation or putting a cess of 35 paise tp per square metre of gas. Presently 43 per cent of the capacity of about 9000 km of gas pipeline caters to western India and eastern and southern parts together account for 26 per cent of the total capacity that too is confined majorly to power and fertiliser sector. But GAIL has proposed to end the regional and sectoral discrepancy with the gas highway and analysts believe it’s a good move. Meanwhile, with a cess of 35 paise only Rs 1600 crore can be collected. But what is important here is that GAIL is already expanding its 7000 km pipeline by another 7000-8000 km and if the government nominates GAIL for another 6000 km gas highway, the gas utility will become one of the biggest players, as far as gas transporting is concerned.