China will politely resist Obama's G-20 proposal

China will find it hard to object to US President Barack Obama's drive for a more balanced global economy at a G-20 summit this week, but will resist any sweeping reforms that risk checking its headlong growth.

US calls for exporting nations to consume more will shift the spotlight back toward China's managed currency regime and whopping trade surplus after a year in which these were put to one side, displaced by the imperative of recovering from the global financial crisis.

That the United States is ready to put pressure on Beijing became clear this month when, for the first time since time since China joined the World Trade Organisation in 2001,it invoked a "special safeguard" clause to slap duties on Chinese-made tires

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Air India won't get Rs 15,000 crore bailout

The government has indicated that a bailout package for the crisis-ridden Air India will not be possible beyond $1-1.5 billion (Rs 5,000-5,500 crore) against the $3 billion sought by the airline. A hectic reworking of the capital restructuring possibilities is underway and is expected to be submitted by June 22.

“An equity infusion of up to Rs 1,500 crore, plus a soft loan of Rs 3,000-3,500 crore will be considered on a priority basis. There is no chance of the Airline receiving a package of Rs 14,000 to 15,000-crore package,” a very senior source in the civil aviation ministrty said. “In fact, the civil aviation ministry and Air India are currently involved in the preparation of exact details and a package. It is expected to be submitted around June 22 and thereafter the government will take a final decision,” top government sources told FE on Sunday on the condition of anonymity.

On Saturday, the civil aviation ministry held initial discussions in this regard with the National Aviation Company of India Ltd (Nacil), created through Air India-Indian Airlines merger in 2007.

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Ministries speed up to keep new government in top gear

After a two-month lull forced by the Lok Sabha polls, Monday saw the government machinery swing back into action to prepare the ground for the new government, likely to be sworn in on Saturday. Now that Prime Minister Manmohan Singh and his council of ministers have resigned, and President Pratibha Patil dissolved the 14 th Lok Sabha, officials worked overtime to prepare priority action plans for their new ministers.

Monday was also a hectic day for Congress leaders,who strained every nerve to sketch the new Cabinet, ahead of a meeting with their alliance partners on Wednesday.

“The Prime Minister has asked all ministries to come up with measures that need to be considered and implemented on a priority basis in the first three months of the new government.

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Satyam names new Chief Executive Officer

The government-appointed interim board of Satyam Computer Services on Thursday selected AS Murty as CEO. Murty, who is currently chief delivery officer, has been with Satyam since 1994. He will draw an annual salary of Rs 5crore.

The six-member board also announced the appointment of Tata Chemicals former MD Homi Khusrokhan and Murugappa group former CFO Partho Datta as special advisors to the board. As Datta will oversee the company’s financial operations, the board decided not to appoint a separate CFO at this juncture.

In a statement issued after its two-day meeting, the board also confirmed a sanction of Rs 600 crore to meet the company’s working capital requirements.Satyam has been staring at an acute shortage of cash ever since the dramatic disclosure on January 7of a Rs 7,800-crore accounting fraud by Satyam founder B Ramalinga Raju.

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Permanent Satyam employees number stands at 43,622: Provident Fund Organisation

The Provident Fund Organisation(PFO), Hyderabad, has put the official count of Satyam Computer Services permanent employees at 43,622. Officials of the regional office in Hyderabad lodged a complaint with the CID on Thursday against B Ramalinga Raju, the founder and former chairman of beleaguered outsourcing giant Satyam Computer, and former chief financial officer V Srinivas for not depositing Rs 7.5 crore, the employees’ share of the PF collected by Satyam for December 2008.

For the record, the government-appointed board of directors for Satyam had earlier asserted that the number of Satyam employees tallies with the 52,000 figure as was claimed by the Ramalinga Raju-led management. The Hyderabad PFO’s figure is in line with the public prosecutor’s argument in court that Satyam had close to 40,000 employees on its rolls.

According to sources in the PF department, the office would be filing a case against Raju and Srinivas for breach of trust as the company has already deducted the employees’ share of the PF, but failed to deposit it with the PF office.

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EAC sees monetary tightening

Even as global ratings agency Moody's warned on Monday that India's sovereign ratings outlook could be lowered (from the current ‘stable' outlook) if the country's fiscal policy fails to check external shocks or aggravates inflation concerns, the government is finally beginning to accept the prospect of economic growth moderating to around 8% this fiscal, from 9.0% GDP growth in 2007-08.

The Prime Minister's Economic Advisory Council (EAC), in its upcoming economic outlook report, is likely to pare GDP growth projections for 200809 to 7.5-8%, from its earlier estimate of 8.5%. The key reasons for tempering expectations, according to the EAC, are soaring inflation, rising crude oil prices, as well as the slowdown in industrial activity and food grain supplies.

In its quarterly review of monetary policy last week, where key rates were raised again, the Reserve Bank of India already lowered GDP growth projections to 8% from its earlier estimate of 8 8.5%. The EAC's economic outlook report is expected to suggest further tightening of monetary policy. So, another round of rate hikes appears imminent, say government officials.

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Rs 35,000 crore bonds to bail out oil cos

The finance ministry will issue around Rs 35,000 crore worth of oil bonds to partially cover the total under-recoveries of the oil marketing companies on domestic sales of petroleum products (petrol, diesel, LPG and kerosene) during 2007-08. The compensationworksouttobe50%,as against petroleum ministry's demand of 57.1%, of the total under-recoveries of the oil marketing firms for 2007-08, pegged at Rs 77, 303 crore. As of now, oil bonds of the face value of Rs.20,333 crore, covering the period April-December 2007, have been issued to the oil companies.

The decision was taken at a meeting between finance minister P Chidambaram and his petroleum ministry counterpart Murli Deora on Tuesday. "We have asked 57.1% oil bonds. And they (the Finance Ministry) are not ready for it. So we have requested him (Chidambaram) to issue as much as possible," Deora told reporters after meeting the Finance Minister.

It may be recalled that the Cabinet Committee on Political Affairs (CCPA) had considered the matter in its meeting held on February 14, 2008. While approving the group of minister's decision for a marginal price increase in respect of petrol and diesel, the ministers of finance and petroleum were authorized to decide in consultation with each other on the portion of the under-recoveries for 2007-08 to be covered by oil bonds.

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Oil price heat burns private retailers

The unprecedented increase in crude oil prices, by almost 75% in the last one year, has virtually wiped out the private sector's presence in domestic fuel retailing. Global crude prices rose to $120 a barrel on Monday. This has pushed up the cost of India's import basket to an all time high of $112.56 a barrel, compared to last fiscal's lowest price of $62.91 on May9,2007.

Private sector majors in the fuel retailing space-Reliance Industries Ltd and Shell-have, therefore, begun shutting down most of their petrol pumps across the country. Fuel sales at these outlets have dropped to almost nothing given the huge difference between their prices and those of government subsidised fuel sold at pumps belonging to public sector oil marketing companies IOC, BPC and HPCL.

These three public sector retailers currently sell petrol at a loss of Rs 13.97 a litre and diesel at a discount of Rs 20.97 a litre. However, part of this revenue loss is made up by the government through oil bonds and subsidy share from upstream firms like ONGC and GAIL.

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Tatas go ahead with BlackBerry

Tata Teleservices (TTSL) has decided to proceed with the roll out of BlackBerry services, without waiting for the government permission.

The company has told the government the delay was costing it "significant loss of business opportunity and recurring revenues."

The company's step is significant as it was TTSL's application seeking permission to launch the BlackBerry services that alerted the government that the services gave no means for lawful interception. The department if telecommunication had therefore denied TTSL permission to start the services.

Other operators like Bharti Airtel, Vodafone Essar, BPL and Reliance Communications currently offer BlackBerry services. Apparently, these companies never sought the government's approval for launching the services.

The operators maintain that around the time they launched the services there was no specific provi sion mandating an approval. However, the officials contest the point.

In a recent communication to the department of telecommunications (DoT)-a copy of which is with FETTSL has written, "we are proceeding with the rollout of BlackBerry services and undertake that whatever solution is arrived at by the government through its deliberations with the BlackBerry suppliers and the operators currently offering such services will be applicable to us also, in the manner that it is made applicable to the other operators."

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Steeldons battle gear to fight inflation,cut prices

Steel companies and the government on Thursday worked out a plan that will ensure adequate supply of steel in domestic markets and spare curbs on current export commitments of the companies. The companies in turn agreed to reduce prices of long products, like TMT bars, by Rs 2,000 per tonne and corrugated sheets by Rs 500-1,000 per tonne. These products account for about 25% of the domestic steel demand.

The companies also agreed to use imported hot rolled coils to manufacture high grade steel for exports. The meeting-attended by representatives of Sail, RINL, Tata Steel, JSW, Jindal Steel and Power Ltd, Essar, Ispat, Bhusan Steel & Power and the steel ministry officials-decided to exclude domestically produced HR coils from exports, thereby easing local supply constraints.

Sources said the decision will avert a 10% export tax on steel exports. Another proposal being toyed with is to scrap the 5% import duty on steels.

"Producers of long steel products like TMT bars, prices of which had increased sharply, have agreed that they will roll the prices back.

It is expected that these companies, including Tata and state-run RINL, will provide a relief of Rs 2,000 per tonne to ensure that the common man is not hit," steel secretary R S Pandey said after the meeting.

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Dynamic babudom is pay panel's tune

With a view to improving government efficiency, the Sixth Pay Commission has suggested a wide-range of measures for civil servants. The suggestions include rewarding high achievers, offering market-driven salaries to specialised talent, overhauling pension rules to attract contract labour, shifting to post-based selection to hire people with the best domain expertise, providing greater flexibility to existing employees and de-layering the government machinery to obtain fewer pay scales.

Bucking the trend of giving uniform pay hikes, the commission has suggested that high performers-who would be judged on improved delivery to end users by an external independent agency--should be given a 1 percentage point higher increment. This performance-linked incentive scheme would also work as a substitute for bonus (whether linked to productivity or ad-hoc), honorarium and overtime allowance.

The commission has also suggested changes in existing appointment procedures to ensure a younger and more dynamic bureaucracy, with a result-oriented approach. Another significant suggestion has been of appointing outside experts on a contract basis, beside government officials, for posts that require technical or specialised expertise.

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