Supreme Court rejects Reliance Natural Resources plea on hearing

The Supreme Court on Thursday refused to take up a gas dispute between RIL and RNRL for final hearing on Sep 1, rejecting the latter's plea for expeditious hearings.The Supreme Court on Thursday refused to take up a gas dispute between Reliance Industries (RIL) and Reliance Natural Resources (RNRL) for final hearing on September 1, rejecting the plea of Anil Ambani Group company for expeditious proceedings. RNRL on Wednesday had served notices to the oil ministry and RIL in this regard and argued that the gas supply dispute between RIL and RNRL concerns power projects of national importance, representing a capacity of 12,000 mw power and an investment of over Rs 50,000 crore.

A bench headed by Chief Justice KG Balakrishnan said it would decide on the date of final hearing on September 1, when it would consider various petitions related to the dispute. The Supreme Court is scheduled to hear cross-appeals by both Ambani group firms on September 1, as also a petition by the Petroleum Ministry against a Bombay High Court order that asked RIL to supply gas to RNRL at $2.34 per million British thermal unit (mmBtu) against the officially prescribed $4.2 per mmbtu.

The RNRL prayer came up for mentioning and the company's counsel Mukul Rohtagi requested that final hearing be taken up on September 1, as the entire Bombay High Court record was before the apex court and nothing was left to be filed.

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Nasscom projects single digit export earnings for IT, ITeS

For the first time in the history of the Indian software exports, the sector will grow at a single digit rate.

According to figures released by the IT industry body Nasscom, the IT-BPO export revenues are expected to grow between 4-7% to stand between$48-50 billion in the financial year 2009-2010. In the last financial year, the IT export revenues grew by 16.3% to clock revenues of $46.3 billion. On Wednesday, Nasscom released industry figures for the financial year 2008-09 along with the outlook for the current fiscal.

Som Mittal, president, Nasscom told FE that the growth projections have been arrived at considering the fact that the economic downturn has led to severe cuts in the IT budgets across the globe, especially in discretionary spending.

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Abbott buys Wockhardt's nutritional arm

Mumbai-based drug major Wockhardt Ltd, which is battling a debt pile of over Rs 3,700 crore, has sold its nutritional businesses and a few facilities to Abbott Laboratories of the US for around $130 million (nearly Rs 626 crore) in cash.

Wockhardt has well-known products in the paediatric nutritional category such as Farex, Dexolac and Nusobee infant formulas. The transaction also includes nutrition manufacturing facilities in Lalru and Jagraon. Wockhardt had acquired nutritional supplement maker Dumex India Pvt Ltd, along with its products Protinex and Farex, in June 2006.

Wockhardt, as part of its exit from non-core businesses, had earlier sold its German business Espharma to Germany’s Mova GmbH, a subsidiary of Lindopharm GmbH.

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Tata Motors beats Street, net rises 58%

Tata Motors on Monday said its net profit grew 58% to Rs 513.76 crore for the first quarter ended June 30, compared with Rs 326.11 crore a year earlier, on a stand-alone basis (ie, excluding Jaguar Land Rover acquired in 2008).

The better-than-expected performance was largely driven by a one-time income of Rs 319.36 crore following its diveof shares in group firm Tata steel to pre-pay foreign currency loans. A 24% reduction in raw material costs, a cut down on inventory and an improvement in sales realisation also helped, resulting in an operating margin of 11.4%, compared with 7.1% a year earlier.

Tata Motors’ revenues for the quarter stood at Rs 6,404.63 crore, a decline of 7.6% vis-à-vis Rs 6,928.44 crore in the same quarter last year.

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Right time for banks to expand their role: Finance Minister

Finance minister Pranab Mukherjee struck a bullish note on Saturday to tell Indian banks this is the year to push for growth and expansion. In his first major speech in India’s commercial capital after presenting the Budget in Parliament in July, the minister told the packed house of financial sector and corporate leaders at the FE India’s Best Banks Awards on Saturday, “Look for new opportunities”.

Mukherjee said Indian banks are well poised to take the chances coming their way. Without going into specifics, the minister struck the right chord with the expectations of bankers and industrialists, who all said domestic banks must expand their footprint to become globally effective. He spelt out the government’s position that the economy has been able to weather the global slowdown and, therefore, it was the right environment for the banks to expand their role. “We have noted that better-then-expected GDP numbers for the financial year 2008-09 improved the sentiments in the market and industrial production is showing improved performance in the last two months of the current financial year.”

The minister was, therefore, sure this was the time for banks to move up a gear. “It is often said that testing times bring out the best in a person and in an entity.

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Wipro net rises, guidance flat

The country’s third-largest software firm, Wipro, beat its own guidance and outperformed market forecasts to post a 12% rise in net profit at Rs 1,016 crore for the quarter ended June 30, compared with the same quarter last fiscal. This is in line with its two bigger rivals, TCS and Infosys, whose quarterly numbers also surpassed market expectations.

The company’s revenue stood at Rs 6,274 crore, up 5% year-on-year, but down 2.7% sequentially, according to Indian GAAP. However, net profit was marginally up sequentially at 0.6%. Revenues from IT services, which accounted for over two-thirds, were at Rs 4,825 crore, an increase of 10% y-o-y, but down 2.2% sequentially. In dollar terms, Wipro’s IT revenues stood at $1,033 million.

The company attributed growth in the quarter to deals won in India and the Middle East.

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Clinton visit ends on a high note

The US and India said on Monday they had agreed on a defence pact that takes a major step towards allowing the sale of sophisticated US arms to New Delhi.

US secretary of state Hillary Clinton, at the end of her first visit to India as Washington’s top diplomat, said Delhi had also approved two sites for US companies to build nuclear power plants. “We have been told that sites for two nuclear parks have been earmarked for us,” Clinton said.

India and the US also inked two agreements, including one that facilitates the launch of US satellites from Indian launch vehicles and another in the field of science & technology.

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Dipping profit, mounting wage bill ring alarm bell for BSNL

Even as the telecom industry in the country is scripting success stories with private players posting double-digit growth, Bharat Sanchar Nigam Ltd (BSNL), country’s second largest firm by subscriber base, is fast racing downhill into trouble.

Company officials have estimated that during the current fiscal, the company will post losses of around Rs 4,500-5,000 crore on the back of higher wage bill and operating expenses.

In its worst performance since its inception in October 2000, the state-owned company has posted a 95% decline in its net profit during 2008-09 at Rs 104 crore.

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Clinton to talk Corporate Social Responsibility with India Inc

India Inc’s initiatives in corporate social responsibility (CSR) will dominate the discussions between visiting US secretary of state Hillary Clinton and a 10-member team led by Tata Group chairman Ratan Tata on July 18.

Clinton has shown a desire to understand India Inc’s ongoing and intended CSR projects. She would later spell out the US schemes in this respect. The 10-member team comprises RIL chairman & managing director Mukesh Ambani, Piramal Healthcare director Swati Piramal, Godrej & Boyce CMD Jamshyd Godrej and National Dairy Development Board chairman Amrita Patel. Names of the rest are being finalised.

Sources told FE that “The US consulate called upon Ratan Tata to organise a group of leading industrialists not exceeding 10 for the meeting.

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First Reliance Industries Ltd shipment of petrol from Jamnagar new refinery to New York

Reliance Industries Ltd has sent its first shipment of petrol in two years to the US from its new plant, a ship broker said

Hess Corp chartered the tanker King Douglas to transport petrol to New York, starting June 28, Singapore-based Millennium Chartering Pte, a ship brokerage, reported last month. Lorrie Hecker, a spokeswoman for Hess, and Manoj Warrier, a Reliance spokesman, declined to comment.

The cargo, signalling a new source of global supply, will arrive as US petrol inventories are climbing and prices are falling.

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Rain paralyses Mumbai: trains, flights delayed

For the third time in ten days, heavy rains disrupted normal life in Mumbai on Tuesday. Earlier, heavy rains had paralysed the city on July 4 and 8, causing great hardship to office-goers and students. Traffic movement on roads, railways and airports was disrupted with the city recording 98 mm rainfall on Tuesday, while the suburbs notched 123 mm of rainfall. The city’s meteorological department has forecast heavy to very heavy rains accompanied by strong gusty winds in the city over the next 48 hours.

A spokesperson for Mumbai Airport said that all incoming flights were delayed by 15-20 minutes on account of poor visibility (about 800 metre) and due to gusty winds over the city on Tuesday. While traffic jams hit office-goers on the two highways serving the city and on other important roads, trains on the western, central and harbour railway lines were running 15-25 minutes behind schedule.

Water logging was reported from many low-lying areas like Dadar, Khar, Santacruz, Goregaon, Malad, Kandivli, Andheri, Jogeshwari (western suburbs), Byculla, Mazagaon, Sion, Wadala, Vikhroli and Ghatkopar (all eastern suburbs).

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Government employees asked to travel only by Air India

In an effort to shore up revenue streams for Air India, the finance ministry on Monday ordered all central government employees to fly only on the state-owned flag carrier for their official travel both domestic and international.

This is one of the steps the government is taking to lend confidence to a clutch of lenders the airline plans to tap for medium-term loans. Senior finance ministry officials said a revenue stream for the airline was better than leasing planes to augment its fleet, given the weak aviation market leasing would provide little comfort to the lenders.

The order states: “For travel to stations not connected by AI, officials may travel by AI to the point closest to their eventual destination, beyond which they may utilise the services of another airline, which should also preferably be an alliance partner of the national carrier.”

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Sreedharan quits after Metro mishap

Quickly beginning its damage control exercise after an under-construction bridge of the Delhi Metro Rail Corporation (DMRC) collapsed early on Sunday, killing five persons and injuring 15 others, the Centre has decided to examine the causes of the mishap.

“Our department will take a review and find out the causes. This is a very unfortunate incident,” minister of state for urban development Saugata Ray told reporters. He said all precaution will be taken to ensure that such incidents do not recur.

Saturday’s incidence, which may dent the prospect of Delhi Metro as a showcase project for urban transport system, also prompted DMRC chief E Sreedharan to resign taking moral responsibility.

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154 new State Bank of India branches on Sunday

State Bank of India will simultaneously open 154 branches—the most ever on a single day—and 1,540 ATMs across the country on Sunday. The new branches include one in finance Minister Pranab Mukherjee’s Jangipur parliamentary constituency in West Bengal.

“The branches will be inaugurated online by the finance minister,” said an officer of India’s largest bank connected with this mammoth exercise. The synchronised launch will eclipse the record 101 branches SBI opened in one day last July, which were inaugurated by then finance minister P Chidambaram.

Mukherjee will open the new branches spread across India by going online from Omarpur, a town in his constituency. SBI’s IT officials are working overtime to connect all the branches through satellite network by setting up a temporary hub in Omarpur.

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Google plans operating system to take on Microsoft Windows

Google Inc, owner of the most-visited Internet search engine, plans to release a computer operating system (OS) to challenge the dominance of Microsoft Corp’s Windows. The software will be based on the Chrome Web browser, Mountain View, California-based Google said.

It will be designed at first for low-cost laptops called netbooks. The company is in talks with partners on the project and computers running the software will be available in the second half of 2010, it said.

Google’s new OS aims to take on Microsoft’s flagship Windows product, which runs about 90% of the world’s personal computers. The plan escalates the two companies’ rivalry, which extends to Web browsers, Internet search and business applications such as word-processing and spreadsheet programs.

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Andhra Pradesh terminates metro contract with Maytas

The Andhra Pradesh government has terminated the Rs 12,000-crore-plus contract awarded to Maytas Infra for the Hyderabad Metro Rail project for reneging on contractual commitments.

Andhra Pradesh chief minister YS Rajasekhara Reddy in a statement on Tuesday announced the state’s decision to cancel the concession agreement with Mytas Metro Ltd, the special purpose vehicle formed to execute the project.

The contract for the Metro Rail Project was awarded to a Maytas Infra-led consortium in a global tendering. The other consortium members were Nava Bharat Ventures Ltd, Italian-Thai Development Public Company Ltd and Infrastructure Leasing & Financial Services Ltd.

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A Budget of missed opportunity

Budget 2009-10 was long on promises, but as the UPA government’s response to the most difficult year for the Indian economy in a decade, it fell short on action.

The finance minister eschewed politically sensitive topics like setting a disinvestment target, but held out the promise that all public sector companies would have to tap the stock markets more.

Similarly, he set up an expert committee to advise the government on a sustainable system of pricing petroleum products without acting on the suggestions in the Economic Survey. And, even as he set a fiscal deficit target of 6.8% the highest in 16 years he said the government remained committed to fiscal prudence and would act on the recommendations of the 13th Finance Commission due in October.

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Low deficit,11priorities put Pranab on tight rope

Finance minister Pranab Mukherjee has set himself a basket of 11 priorities to address in the first Budget of the new government. This includes an at least 4% growth rate for agriculture, increasing investment in infrastructure to more than 9% within the next five years, and an integrated energy policy, besides a direct assistance to the poor to create a social safety net.

Latest estimates of government revenue and expenditure show all this will have to be done within the constraint of keeping the Centre’s fiscal deficit at less than 6.5% of the GDP as anything higher could impact sovereign ratings.

The best piece of news that Mukherjee will receive on Monday, as he drives for a quick Cabinet meeting to ratify the Budget before he addresses the Lok Sabha,

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Populist tinkering now, vision later

The flamboyance of former railway minister Lalu Prasad gave way to a rather conservative Rail Budget 2009-10 presented by UPA’s new railway minister Mamata Mamata, who decided to continue with most of Prasad’s policies but clipped the freight loading to a more realistic target of less than 6% over that achieved in 2008-09.

For 2009-10, Mamata has estimated her cash balance will be 26.5% lower at Rs 14,201.27 crore. Accordingly, in her first Rail Budget presented under the UPA on Friday, she has decided to be prudent on the financial front, eschewing the lure of cutting passenger fares. She also left freight rates untouched. But she has managed to fulfill her earlier promise of providing monthly season tickets of Rs 25 to those with a monthly income of less than Rs 1,500—called izzat—along with announcing fare concessions to students and youth while promising on-board infotainment on the Rajdhanis and Shatabdis.

Her largesse has been concentrated on West Bengal. She has extracted a series of projects for the state, including a new locomotive unit, a coach factory and another 1,000 MW

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