NEW DELHI l TUESDAY l DECEMBER 6 l 2011 V O L X X X V I I N O 2 3 9 1 8 P A G E S I R s 4 . 0 0 READ TO LEAD P2 P7 N E W S EAGER FOR LONG-TERM LNG SUPPLY CONTRACTS FROM PARTNERS LIKE QATAR: REDDY P U B L I S H E D In the news INDICES BSE Sensex Closing Up/down 16,805.33 ▼ 41.50 S&P CNX Nifty 5,039.15 ▼ 11.00 Audit, accounting firms boost hiring as demand soars Accounting and auditing firms have stepped up hiring on an increased demand from their clients to strengthen processes and systems on rising risks of fraud, report Nikita Upadhyay and Baiju Kalesh in Mumbai. Corporates are emphasising on greater scrutiny of their operations during times of slowdown as there is more focus on managing costs and reducing redundant costs. ■ Details on Page 4 China services growth slows China’s services sector cooled in November to its weakest growth in three months, an HSBC purchasing managers’ index showed on Monday. The index fell to 52.5, a sharp decline from October’s 54.1. ■ Details on Page 6 IDFC PE, SBI Caps may buy into Atlanta arm IDFC Private Equity and SBI Capital Markets may together pick up a 12% stake in Atlanta Limited’s wholly-owned subsidiary Atlanta Tourism Ventures that will develop a R9,500-crore theme park at Surat in Gujarat. ■ Details on Page 4 F R O M : A H M E D A B A D ■ FM talks to Phased entry for foreign retailers helped create top class infrastructure while giving locals time to adapt and compete Dheeraj Sharma Exclusive! The ratings game Perils for Sarkozy in trying to preserve a credit rating ■ Page 6 C H A N D I G A R H fe Bureau New Delhi, Dec 5 T HE Congress party on Monday formally agreed to postpone its plan to allow 51% foreign direct investment (FDI) in multi-brand retail, the sole big-reform step the party has attempted since it was returned to power as the pulling force behind the UPA-II coalition in the 2009 elections. WithrecalcitrantallyTrinamoolCongress(TC)refusing to support the Cabinet decision on retail FDI despite much cajoling, finance ministerPranabMukherjee on Monday informed leader of oppositionintheLokSabha Sushma Swaraj and CPI(M) leader and Rajya Sabha MP Sitaram Yechury that the policy would be put in abeyance till a political consensus is evolved. But eventhatwasnotenoughfor the Opposition parties to declarethattheywouldnowdesist from disrupting Parliament on the issue as it reconvenes on Wednesday . SHOPPING FOR PEACE ■ Opposition yet to call off protest, says it will wait until the promised all-party meeting on allowing FDI in retail ■ West Bengal chief minister Mamata Banerjee had announced on Saturday was the decision was on hold ■ Government expected to make a statement in the House on Wednesday as Parliament reconvenes All Swaraj would say was to wait till the all-party meeting on Wednesday morning. Mukherjee is expected to make a statement in Parliamentontheday . Shares in retail companies fell as the government Decision pounds retail cos’ stocks Stocks of retailers including Pantaloon Retail, Trent, Vishal Retail, Koutons Retail, Shopper Stop and Provogue fell up to 11% as the government put its decision to allow foreign direct investment in the sector on hold. These stocks had recorded smart gains on November 25, a day after the Cabinet decided to allow 51% foreign direct investment in multi-brand retail. ■ Full report on Page 11 France, Germany for new European treaty Countdown to a crisis ERMANChancellor Angela Merkel and French President Nicolas Sarkozy pushed for a rewrite of the European Union’s governing treaties totighteneconomiccooperationasafirststeptoending the debt crisis. With the fate of the currency shared by the 17 euro countries at risk, Sarkozy told reporters in Paris that Europe’s two biggest countries agreed to back automatic penalties for deficit violators, a European monetary fund and monthly summit meetings. He said theyaimedtoreachconsensus by March. “Our decisions were to craft new rules to avoid a repeat” of the crisis, Sarkozy said after the two met over lunch at Sarkozy’s Elysee ■ Why the latest summit, after 4 previous rescues: Previous bailouts haven’t helped. Italy’s yields are soaring. A German bond auction has flopped. ■ Differences between Germany and France: Germany feels fiscal integration is key to trust. France feels it would be a surrender of sovereignty. ■ Can France & Germany fix Europe on their own? No. The treaty which built the EU must be amended, which needs clearance from individual parliaments. palace.“Thiscouldbeanew treaty signed by the 27 or at the level of the 17, and with whatever other country wants to join.” Safeguarding banks, limiting the damage to Italy and Spain and finding additional rescue funds may hinge on the response to Franco-German demands for closer economic integration and tougher policing of fiscal rules. Markets climbed last week as investors looked toward the latest plan to rescue the euro, betting that a new regime of budget rules at the summit may clear the way for more intervention from the ECB. With an EU summit in Brussels looming December 9, US treasury secretary Timothy Geithner arrives in Frankfurt on Tuesday to prod political leaders and the European Central Bank holdsa policy meeting December 8. Bloomberg Green tape tangles 400 projects ■ Building, mining, power projects await environment clearance Kirtika Suneja New Delhi, Dec 5 E NVIRONMENTAL clearance delays are rising again, pushing up the number of pending infrastructure projects. There are now 400 projects in mining,hydroandthermalpower, and building and constructionpendingsignaturesatdifferentlevelsintheministryof environment and forests (MoEF). The figure had eased to245inAugustthisyear. Among pending projects, the maximum (209) are in building and construction, followedbymining((143).The share of thermal power projectscomesnextat32followed by13hydro-powerprojects. The maximum number of C H E N N A I H Y D E R A B A D Sushma, Yechury; statement in House on Wednesday G Learning Chinese lessons B A N G A L O R E ECB sets sights on shoring up banks Retail FDI put on hold as UPA seeks consensus Paris, Dec 5 EDIT P8 BY SPECIAL ARRANGEMENT WITH FOREST BUMP State Number of projects pending clearance Tamil Nadu Haryana Uttar Pradesh Rajasthan Orissa 106 90 34 32 28 projects awaiting environmentalnodarebasedinTamil Nadu — 106 projects — of which 102 are in building and construction. Haryana followswith90projects,allinthe construction sector. In Jharkhand, Orissa, UP and Rajasthan,miningprojectshave beenheldupthemost.Noprojects are pending for the northeastern states of SikkimandTripura,showing corporates don't plan mega projects for these states and that smaller projects get clearedfaster.Somehigh-profile projects yet to receive the nod includes Indian Oil's rubberunitatPanipat,Hindalco's proposed modernisation of existingaluminaandsmelter plantatRenukoot,DalmiaCements'limestonemineexpansion in Tiruchirapalli and Apollo Tyres' thermal power plant in Kancheepuram, amongothers. “The projects are perceived to be pending for environmental clearance for varying durations, mainly due to non-submission of complete information by the project proponents in the environmental impact assessment (EIA) report and environmental management plan (EMP) required for the projects submitted for environmental clearance and non-compliance of the procedures,” said environment minister Jayanthi Natarajan. ■ Continued on Page 2 announced the pause in bringing in the policy widely hailed by economists and commentators. The proposed reform would have benefited farmers and consumers alike, while rooting out exploitative middlemen and creating integrated supply chains including cold storage facilities for food items. While farmers would benefit from remunerative prices for their produce, consumers would have a wider choice of quality products to choose from, if not at reduced prices. Sources said that Mukherjee told Swaraj and Yehchury that the government would have a relook at the policy once there is consensus on the issue. TC chief and West Bengal CM Mamata Banerjee had preemptively announced the “holdback”decisiononSaturday . ■ Continued on Page 2 ■ See Edit: Pensioning off UPA, Page 8 ■ FDI policy no substitute for state laws, Page 9 P16 MANAGING DIRECTOR ADITYA K O C H I M O N E Y & B A N K I N G PURI WANTS HDFC BANK TO EMULATE WELLS FARGO K O L K A T A Prices crash, potatoes rot in Mamata’s West Bengal as govt dithers on FDI in retail Sandip Das NewDelhi,Dec5:Threemillion tonnes of potatoes from last year's harvest are turning inedible in mandis, open air storage points and across thousandsof vegetableshops as India harvests a second year of bumper crop, more than a third of which is from West Bengal. The country's warehouse capacity is grossly short to accommodate fresh arrivals, forcing farmers to dump the crop just about anywhere. The government's plan to allow foreign direct investment in multibrand retail was pinned on developing the necessary storage capacity to handle such gluts and iron out price differences. West Bengal chief minister Mamata Banerjee took the lead on Saturday to force the UPA government to hold back the approval for multibrand retail. Despite the scale of wastage,thepotatostormhas begun to cool food inflation. ■ Details on Page 15 L U C K N O W M U M B A I P U N E PMO outlines action plan for aviation min Nirbhay Kumar New Delhi, Dec 5 I NDIA'S beleaguered civil aviation sector will now be monitored directlybythePrimeMinister's Office (PMO). Sources said in a recent communication to the aviation ministry the PMO has listed 12 , important agenda points for Vayalar Ravi's ministry . Each comes with a timeline and a progress update plan, which must be filed by the fifth of every month. The monitoring is unusual as the PMO usually intervenesonlyoninter-ministerial issues and where the problem is too complex for the ministry concerned. The agenda gives top billing to measures with a macro impact on the sector. These include framing a policy for fixing airport tariffs, putting in place regulations on airline tariffs, examining the aviation turbine fuel tax regime and finalising the turnaround plan for Air India. The development comes PLANE TALK ■ PMO sends agenda to ministry, which must update it every month ■ Airport tariff, ATF pricing, Air India revival in 12-point agenda ■ PMO for expert team, professional management at Air India within a week of the country's airline bosses meeting Prime Minister Manmohan Singh to present their grievances. The airline chiefs had urged the PM to consider concessions in jet fuel — which accounts for 40% of input costs — and lower airport charges. ■ Continued on Page 2 ■ France & Germany look set to fudge it again, Page 8
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