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India`s inflation rate may be revised to 10%: Economist

New Delhi, May 26: India`s inflation rate may be revised to 10 percent from the latest estimate of 7.82 percent as data for prices of different commodities is updated, London-based publication ‘The Economist’ has said.

"Delays in data collection in India can mean big revisions to inflation... The latest wholesale price rate inflation rate might therefore be pushed up to 9-10 percent," noted the economist in its cover story on global inflation.

India faces the challenge of high inflation in the coming months, especially due to rising international crude oil and food prices.

"Prices are also rising partly because loose monetary conditions in emerging economies have boosted domestic demand," the prestigious journal said.

India revised inflation figures for the week ended March 15 to 8.02 percent from the earlier estimate of 6.68 percent.

Referring to ban on futures trading in agricultural commodities, it said, "In reply to: the short run such measures may help cap inflation and avoid social unrest, but in the long run they do more harm than good."

Preventing rising prices reduces the incentive for farmers to increase supply and for consumers to curb demand, thus prolonging the very imbalance that has stoked prices.

It further said if measured correctly, five of the ten biggest emerging economies could have inflation rates of 10 percent or more by mid-summer.

"Two-thirds of the world`s population may then be struggling with double-digit inflation."

Tuesday May 27, 03:51 AM CPM lists 4 factors for panchayat losses

Chief Minister Buddhadeb Bhattacharjee will press Prime Minister Manmohan Singh again to amend the Land Acquisition Act of 1894 to allow for a better compensation package for those whose land is acquired.

"I will again request the Centre to amend the Act," Bhattacharjee is reported to have told members of the CPI(M) state committee on Monday, the second day of a meeting to review the party's debacle in the panchayat elections.

The state committee, representing all districts in the state, discussed the possible reasons for the unexpected erosion of the party's grassroots votebank, considered the foundation of its uninterrupted 31-year-old rule in the state.

Last year, after the Nandigram police firing, the state had written to the Centre requesting changes to the Act.

On Monday, the chief minister and CPI(M) general secretary Prakash Karat submitted their views.

"More than the landowners, it is the landless labourers and unrecorded sharecroppers who are affected by land acquisition, and we must address the problems of this section," Bhattacharjee is reported to have said. "This is why the Act needs to be amended."

Officially, the state committee cited four factors for the panchayat debacle.

First, the party had failed to tackle properly the campaign against the Left Front government's industrialization programme.

"We failed to rebut the Opposition's lies and falsehoods with proper statistics and data," the state committee said in a statement.

Second, the opposition had succeeded in creating confusion over the land acquisition issue.

Third, despite ensuring the people's participation in the functioning of the panchayat, there had been local shortcomings that the party had failed to redress.

Fourth, the disunity within the Left Front had been damaging.

"However, the state committee feels that the reversals are not permanent and can be tackled," the statement said.

The party has asked its 26,000-odd branch committees across the state to discuss the reasons for the people's dissatisfaction with the CPI(M) and the government and a report will be compiled by July end.

"We will then be able to give a clearer picture," CPI(M) state secretary Biman Bose told reporters after the two-day state committee meeting.

UTV New Media acquires 76% stake in ITNation

Mumbai, May 26: UTV New Media, the digital media arm of UTV Software Communications Ltd, on Monday announced its foray into the digital media space acquiring a controlling stake of 76 percent for Rs 15 crore in 'ITNation', a leading online infomediary.

"UTV New Media envisages an investment of around Rs 120 crore over the next two years into a combination of the internet space with a portfolio of ten portals targeted at specific needed gaps in the Internet space. UTV will acquire 20,000 music titles including Jodhaa Akbar and upcoming Akshay Kumar starrer 'Singh is King'," TN Prabhu, CEO of UTV New Media said in a statement here today.

The investment will also include online technology space with ITNation and in the online business space with utvi.com, the business website for the recently launched UTVI Business Channel, he said.

The intention is to create digital assets such as images, music, ring tones and videos for the catalogues. Also in place are relationships and arrangements with 65 mobile operators across the world to distribute the mobile content, he added.

SBI card voted most trusted brand: Survey

Mumbai, May 26: SBI card, a joint venture between State Bank of India and GE Money, has won the gold award as India's most trusted brand in the credit card category in Readers Digest trusted brand 2008 survey.

SBI card is one of the largest credit card issuers in the country with over 3.2 million credit cards in circulation, a release here stated.

Readers Digest Asia trusted brands survey was launched in 1999 and has been carried out annually for the past ten years. The survey was conducted in Asia across eight markets and 43 categories.

Commenting on this achievement, Nirupam Sahay, chief marketing officer, SBI card, said SBI card was mission-inspired to make life simple for its customers through convenient and customized services.

Vodafone CEO arun sarin step down officialy today.
Vodafone CEO to step down in July
London, May 27: Vodafone group's chief executive Arun Sarin will announce on Tuesday that he will step down in July and hand over to his deputy, Vittorio Colao, Britain's Daily Telegraph newspaper reported.

The timing of Sarin's departure, after five years in charge of the British-based mobile phone group, will be announced alongside record headline full-year profits of about 13 billion pounds ($25.71 billion) and will surprise analysts and investors, the paper said.

No one at Vodafone was available for comment. Colao currently runs Vodafone's European operations.

Ambani may transfer RCom stake to MTN’

Mumbai, May 27: A proposed deal between South Africa`s MTN Group and Reliance Communications may result in a transfer of Chairman Anil Ambani`s two-thirds stake in the Indian firm to MTN, a newspaper said on Tuesday, citing sources.

That would trigger an open offer from MTN for another 20 percent of Reliance Communications, as Indian law mandates such an offer to shareholders after an acquisition of more than 15 percent of a company.

MTN would become a holding company of India`s No 2 mobile operator, and Ambani would in return get around a third in the South African firm, and keep an indirect holding of nearly 20 percent in Reliance Communications, the paper said, citing sources.

The transaction would be a share-swap deal, the paper said, with the offer to minority shareholders in cash.

"In effect, the Anil Dhirubhai Ambani Group will become the largest shareholder of the combined entity, likely to be christened MTN Reliance," the paper said, citing unidentified sources.

A spokesman for Reliance Communications declined comment.

MTN and Reliance Communications on Monday said they were in exclusive talks aimed at a potential combination of their businesses, that could create a USD 66 billion telecoms giant.

Ambani was on vacation in South Africa, the paper said, and may meet with MTN officials shortly.

Bear Stearns Bombshell: Top Brass Misplayed an Overleveraged Hand, Says WSJ

May 27, 2008 11:02am Investing, Recession, Banking
Related: BSC, JPM, LEH, WM, CFC
In part one of a planned three-part series, The Wall Street Journal goes into painstaking detail today about the "final days" of Bear Stearns. The story reveals indecision among Bear's top management about the solution to their mortgage-related problems and repeated failures to raise capital when opportunities presented themselves.

To summarize: Bear bet big, and lost.

The Bear saga may provide some cautionary notes for Lehman Brothers, the target of both rumors and a critical campaign by noted short-seller David Einhorn.

Lehman Brothers refutes Einhorn's critique and says he is cherry-picking data to support his nefarious intents.

Left unsaid: Policies enacted by the Fed in the wake of Bear Stearn's demise give Lehman options that weren't available to Bear.

PM refers Gujjars’ ST status demand to Law Ministry

New Delhi, May 27: Prime Minister Manmohan Singh on Tuesday referred the Gujjar community’s demand for Scheduled Tribe status to Union Law Ministry. At an emergency meeting with senior cabinet ministers, the PM decided to refer Rajasthan Chief Minister Vasundhara Raje’s letter to the Law Ministry in which she had recommended four to six percent special reservation for Gujjars.

The meet further decided to write to Raje, asking her to elaborate on specific proposals she made in her letter to the Prime Minister. The PM had called the emergency meet in the wake of the Gujjar row spiralling out of control.

Earlier, Gujjar leader Kirori Singh Bainsla vowed to continue the struggle until their demand for ST status was met. Bainsla had also asked the Centre to examine his community’s demand for ST status, saying they would not settle for anything less.
The Rajasthan High Court today issued a contempt notice against Bainsla for allegedly violating its order restraining the community leadership from taking law into their hands. Meanwhile, the Gujjars have reportedly created a "tiger force" to check "suspicious elements" and ensure supply of essential commodities to areas under their control. They have also intensified their agitation across northern India.

While responding to questions on Vasudhara Raje’s proposal to PM for special reservation for Gujjars, Bainsla said, "Our basic demand is to get the ST status which is notified under Article 342 of the Constitution.”

"I have stated it before and I will state it again that the talk of the letter of the Chief Minister to Prime Minister Manmohan Singh is a total farce as it does not refer to the issue of ST status but reportedly mentions something about nomadic tribes," Bainsla, who is camping in Karwadi village in Bharatpur district with his supporters, said. "I have not seen the letter and there are many versions of it... Somebody told me it was a reminder to the PM of the letter which was sent earlier," he added.

Raje, in her letter on Monday night to the Prime Minister, recommended four to six percent reservation for Gujjars in the category of denotified class of tribals/nomadic tribes. Gujjars could also be considered as economically poorer than OBC, the letter stated.

Bainsla said "the Centre should examine our demand.” “The agitation will go on... What the Gujjars want is notified ST status and nothing less than this," he added.

Asked about the contempt notice issued by Rajasthan HC directing him to appear before it on May 30, he said, "If conditions permit then I will definitely go to the Court and put forward my side."

Politics over dead bodies

Meanwhile, there were reports of shortage of ice slabs to preserve the bodies of the 12 Gujjar men killed in police firing with the district administration asking an ice factory in Hindaun subdivision to shut down.

An order dated May 26 issued by the Subdivisional Collector has been sent to the factory and locals said ice slabs were not being allowed to reach the agitation site.

While nine dead bodies have been kept in wooden coffins, the remaining three have been placed in aluminum trunks covered by tarpaulin sheets.

A team of doctors is currently stationed in Bayana as the district authorities are holding talks with the agitators to carry out post mortem of the bodies.

Amidst reports of a group of Jats from the nearby Pali, Churari and Dharsi villages having joined the agitation, Bainsla asked his supporters to stay united.

Claiming the support of politicians including Mulayam Singh Yadav, Sharad Yadav, Lalu Prasad and Ram Vilas Paswan to his cause, the Gujjar leader said that "a very sensitive time has arrived as the community has to now decide the course of action and events in the times to come."

"We have been kept out of the mainstream for centuries. In 60 years of independence, we have had no official in the civil services from our community," Bainsla said.

Reliance, HPCL renew interest in Bihar sugar mills

Patna, May 28: Notwithstanding the Centre's directive prohibiting production of ethanol from sugarcane juice, Reliance Industries Ltd and Hindustan Petroleum Corporation Ltd have renewed their interest in taking over three state-controlled sick sugar factories in Bihar.

Both RIL and HPCL deposited 10 percent of the bid amount for the three sick sugar factories, official sources confirmed.

While the RIL deposited Rs 5.70 crore with the state government for the take-over of the Motipur unit in Muzaffarpur district, the HPCL paid Rs 4.5 crore and Rs 5 crore for Lauriya and Sugauli sugar mills respectively.

RIL has emerged as the highest bidder at Rs 57 crore for the take-over of the Motipur unit. Similarly, the HPCL emerged the highest bidder at Rs 45 crore for Lauriya unit and Rs 50 crore for Sugauli sugar mills in East Champaran district, sources said.

The Centre's no to production of ethanol from sugarcane juice had earlier dealt a severe blow to Bihar government's plan to develop the state as an ethanol hub losing five investment proposals worth around Rs 14,000 crore for setting up new sugarcane juice-to-ethanol manufacturing units.

The Centre's opinion was made known through insertion of explanation (3) in clause 3 (sub-clause) in the sugarcane (control) amendment order, 2007 of the Union Ministry of Consumer Affairs, Food and Public Distribution that came into effect from December 28 had prevented Bihar from going ahead with the ethanol project, the sources said.

The Centre's directive had led to the state losing five major investment proposals through which 15 new sugarcane juice-to-ethanol manufacturing facilities were to be set up in Bihar, the sources said.

The Bihar State Industrial Promotion board had approved all these projects and cabinet sanction for all but three had also been obtained, they said.

State Minister for Sugarcane Industries Gautam Singh said that deposit of 10 percent of the bid amount for the three units by big players like RIL and HPCL was 'a positive development' and it would help others to overcome their inhibition and take a re-look at the prospects offered by the state.

''We are expecting some more proposals for developing the sugar industry in Bihar,'' he said.

The second round of bidding process for sick units, including Siwan (Hathua distillery, new Siwan, Samastipur, Sikri, Banmankhi, Goraul, Warsaliganj, Bihta and Gurari, is expected to be initiated next month.

''The SBI caps is preparing a fresh document for request for qualification (RFQ) so that the advertisement for re-bid process may be taken up sometime in June.

No oil cess on Income Tax: Finance Ministry

New Delhi, May 28: The Finance Ministry on Wednesday dismissed the reports that suggested that the government is planning to levy a cess or surcharge on Income Tax and Corporate Tax to bail out oil firms suffering due to the surge in crude oil prices.

In a press statement released by the ministry, it said that the Centre never considered the move and added that the media was responsible for spreading false reports.

The new proposal follows Finance Minister P Chidambaram`s reluctance to cut duties on crude oil and petroleum products unless alternate source of revenues are identified. However, the cabinet will be meeting tomorrow to decide on the issue.

Petroleum Minister Murli Deora met Chidambaram on Tuesday but failed to convince him of the urgency to cut import and excise duties to avoid the Rs 2,00,000 crore revenue loss expected on petrol, diesel, domestic LPG and kerosene this fiscal.

BPCL and HPCL have cash to buy crude oil only till July while Indian Oil can finance imports till September. The three firms face huge liquidity crisis as they are unable to realise full value of products sold.

Sources said a cess or surcharge like the one levied after the Kargil war, may be imposed on income and corporate tax to make up for the cut in customs duty on crude oil to zero from 5 percent and an excise duty cut on petrol and diesel.

Petroleum Ministry is proposing to raise petrol price by Rs 10 a litre, diesel by Rs 5 per litre and that of LPG by Rs 50 per cylinder cut the Rs 580 crore per day loss made by the three oil firms by one-third.