PM sees limited scope for accelerating stimulus

Prime Minister Manmohan Singh on Saturday said the scope and options for acceleration of stimulus package for the recovery of the economic crisis are "limited." "Our response (of stimulus packages) was to a specific domestic situation. It is true that we have limited scope for accelerating stimulus package and our options are limited because of factors like substantial fiscal deficit and Reserve Bank's monetary policies. As of now inflation is not a problem," he said at the end of his two-day visit in Pittsburgh. He was replying to a question whether government would consider withdrawing the stimulus package in view of signs of recovery or whether it would inject a fresh dose. "I would not like to announce package or policy from the foreign soil" he said in reply to a specific question whether steps for stimulating the economy would be taken up. On stock markets picking up in the last few days, the Prime Minister said it was reflective of the economic recovery in the country. The economic fundamentals were basically strong, he added. At the Summit, Singh strongly pitched for continuance of the global stimulus package. The Summit declaration also favoured continuance of the policy and going slow on exit strategy. In his introductory statement at the press conference, the Prime Minister said the Summit was a productive meeting and its purpose was to review what has happened and chart the way forward. This Summit, he said, was not meant to be a trillion dollar summit but there was a comprehensive discussion among the leaders on a wide range of issues. Singh said some of the important issues discussed were that there will be no premature withdrawal of the global stimulus package and the emergency financing for the fund has been successfully completed. "We now have to address the issue of the fund quota increase by early 2011. We have agreed to shift 5 per cent share to countries that are under-represented," he said. Singh also said the Summit has agreed to help the World Bank and other regional development banks to find necessary resources on a review of their capital needs in the first half of 2010. He said the Summit has agreed on a new framework for discussing global macro balances and the contributions individual countries can make through their own policies with a new process of peer review or discussion in the G-20. The leaders also discussed the important issue of climate change and the G-20 has called for a successful outcome in the UN's Framework Convention on Climate Change in Copenhagen. The Prime Minister said the Summit also agreed that the countries should work for an early resolution of Doha round to counter protectionism. The success of the Delhi ministerial meeting in reviewing the process of negotiations was appreciated, he said. Singh said the leaders agreed that the G-20 will henceforth be the premier forum for international economic issues. This is an important development broadening the global governance structure, the Prime Minister said. Answering a question, the Prime Minister said there was no economic crisis in India and it was true that because of the global economic meltdown Indian exports were affected. "But still the economy clocked a growth rate of 6-6.5 per cent. As such there is no crisis in India," he said. On the G-20 decision to shift 5 per cent voting rights to emerging economies, he said that could result in developing and emerging economies getting over 50 per cent of those rights or near about it. The BRIC (Brazil, Russia, India and China) countries requested for seven per cent voting rights but were given 5 per cent. "The demand was seven per cent and five per cent was agreed. Obviously it was a compromise," he said. About the peer review in the G-20, he said this would help in bringing up policies of major developed and developing countries for review in the G-20. "This will give an opportunity to pick up holes in their policies. This will be an advantage," he said. This reflects the governance reforms that India has been seeking in international financial institutions, he said. To a question on whether the US was not keen on the successful completion of the WTO round, Singh said Obama certainly has stated that US was as much interested in its success as others. "I have no reason to doubt his sincerity," he said. To a similar question on protectionism, Singh said obviously the G-20 countries were worried about protectionism raising its head in some developed countries and there was no doubt about it.

US court rules in favour of Orchid, rejects restraining order

Drug firm, Orchid Chemicals & Pharmaceuticals today said a US court has rejected Wyeth's request for a temporary restraining order (TRO) to prevent the Indian company from launching the generic version of the antibiotic injections, Piperacillin and Tazobactam in the US. "The court rejected Wyeth's request and denied the TRO," the company said in a filing to the Bombay Stock Exchange (BSE). In its memorandum opinion and order, the court found that "Wyeth has failed to demonstrate a likelihood of success on the merits" of its claim that the US Food Drug Administration's (FDA) approval to Orchid's generic application violated laws. The company further said it is pleased with this result and will protect abbreviated new drug applications (ANDA) for its Piperacillin and Tazobactam injections and also continue to supply the products to its distribution partner, Apotex Corp. Earlier, Wyeth had filed a motion in the US District Court of Columbia seeking TRO to refrain Ochid from launching the drug in the US market. Wyeth sells Piperacillin and Tazobactam injections under the brand Zosyn and the drug has a total market of more than $1.3 billion.

Govt mulls 10% cess on minerals' royalty

The government is considering levying up to 10 per cent cess on royalty charged on minerals like iron ore, copper and lead that would be used to promote scientific mining practices — an idea opposed by the mining industry. The proposal for the levy is part of a draft bill being formulated to replace the Mines and Minerals Development Regulation Act (1957), a senior ministry official said. "The central and state governments may levy and collect a cess on major and minor minerals respectively, at a rate not exceeding 10 per cent of the royalty in such a manner as may be prescribed," the official added. The proceeds would go to the proposed 'National Mineral Fund' and 'State Mineral Fund' for promoting scientific management of mining and mine closure, local development and preventing illegal mining among others, the official added. The mining industry, however, has opposed such a levy, saying it would hit hard the margins of firms which have already been asked to pay up to 10 per cent royalty on the market price of minerals such as iron ore. Opposing such an additional levy, the president of the miners' body FIMI, Siddarth Rungta, said, "We have to pay up to 10 per cent royalty on minerals like iron ore now. Government should not overburden us with further levy." Industry analysts say the cess, estimated to mop up around Rs 1,500 crore, would be an extra burden on the mining firms and may push up the cost of vital minerals. Last month, the government notified market-linked royalty rates on major minerals like iron ore. Iron ore would attract a maximum royalty of 10 per cent on the prevailing market price. Earlier, the royalty was linked to production. FIMI had opposed market-linked royalty on minerals and instead asked the government to hike the levy in the production-linked system. On copper, the royalty rate has been revised to 4.2 per cent from 3.2 per cent of the prevailing London Metal Exchange (LME) prices, while on zinc and lead it is 8 per cent and 7 per cent from 6.6 per cent and 5 per cent, respectively. The government is expected to place the bill to enact a Mines and Minerals (Scientific Development and Regulation) Act in the winter session of Parliament.

NTPC seeks confirmation on marketing margin from RIL

State-run NTPC has asked the Power Ministry to seek confirmation from the Oil Ministry/EGoM on payment of marketing margin, on the gas it will buy from Reliance Industries, even though it has agreed to pay the levy. NTPC after months of dithering this week signed pacts to buy 0.61 million metric standard cubic meters per day (mmscmd) of gas from RIL's KG-D6 fields at $4.20 per million British thermal unit (mBtu) price plus $0.135 per mBtu marketing margin. The company, which was opposed to paying marketing margin, on September 23 wrote to Power Ministry saying NTPC's board while approving signing of the Gas Sale and Purchase Agreement (GSPA) with RIL had decided to take up the matter of marketing margin separately with the appropriate government authority. NTPC said it had sought legal opinion on Oil Ministry's advice that marketing margin was purely a commercial issue between the seller and the buyer. The legal opinion stated that "this issue is a commercial issue and NTPC would need to look at it accordingly... NTPC should take up the issue of marketing margin separately through the Ministry of Power with the appropriate authority in the government." The move comes amid the tussle between Ambani brothers on the issue which had Mukesh Ambani-run RIL slap a notice for discontinuing supplies after younger brother Anil Ambani Group company stopped paying the levy on gas it buys from KG-D6.

Modicare eyes Rs 200-cr sales by FY11; enters F&B segment

Direct selling company Modicare has entered into the food and beverages segment and aims to double its sales to Rs 200 crore by the next fiscal on the back of its newly-launched products. The company, which launched 30 products under the personal and home care categories, also introduced 'Fruit of the Earth Premium Tea', marking its entry into the food and beverage (F&B) segment. Modicare is targeting sales of Rs 130 crore this fiscal, marking an increase of 30 per cent growth over last year. Besides, the company said it is planning to introduce a children's supplement by the end of this year and fruit concentrates by 2010 under its F&B category. "We will launch more wellness products soon and are also mulling at bringing out a Ginseng herb-based product," Modicare Vice President (Marketing) Manisha Amol said. Among the products launched by the company are car wash solution, multi-purpose cleaning liquid, toothpaste, coconut oil, cosmetics and disposable razors. Modicare is a Rs 100 crore company with 34 centres across India which supply products to over 2,600 cities.

Twitter nears deal to raise $100 mn: report

Micro-blogging site Twitter is close to securing $100 million funding from about seven investors, a move which will make it a billion-dollar entity, says a media report. Attributing to people familiar with the situation, The Wall Street Journal said, Twitter Inc is nearing a deal to garner as much as $100 million that would buy the fast- growing Internet-messaging company more time to chalk out its business model. The investor group, expected to pump in funds into Twitter, are likely to include mutual-fund Giant T Rowe Price Group Inc and private-equity firm Insight Venture Partners, the report said. The group of investors may also include firms that have previously made investments in the company, including Spark Capital and Institutional Venture Partners, it added. The proposed funding companies are valuing Twitter — which has yet to generate more than a trickle of revenue — at about $1 billion, the report said attributing to the people familiar with the plan. "That's more than triple the valuation Twitter received during its last round of capital raising in February, underscoring how quickly the company has grown," WSJ stated. Twitter offers micro-blogging, which allows users to send short text messages, among others, on various multimedia platforms.

R-Infra sees serious competition from BSNL, Railways

Planning to hit the market with an IPO to raise about Rs 5,000 crore, Anil Ambani group firm Reliance Infratel has said it could face serious competition from government-owned Bharat Sanchar Nigam (BSNL) and the Indian Railways in the telecom tower business. "If BSNL ...Begins to engage in significant amounts of site sharing with other operators or otherwise offer passive infrastructure sharing availability, this could create a significant new competitor to our Company," Reliance Infratel said in its draft prospectus filed before the market regulator Sebi. The company proposes to raise money through the public issue to expand its telecom tower business by setting up 16,000 telecom infrastructure sites at an estimated cost of Rs 4,623 crore. Besides BSNL, the largest service provider in the country, Reliance Infratel expects competition from the Indian Railways which offers mass communication facilities to the cellular and broadcast operators through its dedicated telecommunication infrastructure arm. Reliance Infratel also expects tough competition from its private sector rivals, especially from an alliance of the major national telecom infrastructure players. "Certain of our competitors are larger and may have access to greater financial resources than we do, or may act in unison with each other to our disadvantage," the DRHP said. Besides, increasing competition is also expected to make acquisition of high quality telecom tower assets, and securing rights to land for its telecom towers, more costly, the DRHP said. "Further, we believe there may be large international passive infrastructure operators that are considering or have taken steps toward entry into the Indian market," it added. "We believe that other Indian wireless service providers may be considering spinning off their passive infrastructure networks as well, which could further increase competition within our industry," the DRHP said. On December 8, 2007, Bharti Infratel, Idea Cellular and Vodafone Essar announced the formation of an independent tower joint venture company, Indus Towers, which will provide passive infrastructure services in India to all operators on a non-discriminatory basis. The growth and demand for cellular telecommunication services in India will lead to an increased impetus to the sharing of passive telecommunications infrastructure, as cellular telecommunication operators will increasingly need to outsource their passive telecom infrastructure needs.