Parliament logjam on FDI ends...Debate and vote next week
The UPA government has finally blinked as opposition stuck to its earlier position of demanding a debate and vote in both the houses of Parliament on the issue of FDI in retail. The Opposition, however, has assured to allow a smooth functioning of the Parliament after the change in government's position. The logjam ended on Thursday as government relented to BJP’s demand for a debate and voting on FDI in retail issue in Rajya Sabha too, as demanded by the BJP-led opposition.
The Government declared on Wednesday itself that it has no problems over having a discussion over FDI under Rule 184 after Parliamentary Affairs Minster Kamal Nath had consultations with key opposition members Sushma Swaraj and her Rajya Sabha counterpart Arun Jaitely over the ongoing impasse in the parliament. The government was cornered into an agreement for a debate and subsequent voting in Rajya Sabha after the Upper House was stalled by the opposition for 5 days straight by an opposition which saw JDU, Left and BJP converging.
Discussion on the issue in Lok Sabha has been slated for December 4 and 5, the date and timing for discussion in Rajya Sabha isn’t fixed yet. Lok Sabha Speaker Meira Kumar received 30 notices for discussion under the Rule 184 and admitted the motion to allow for discussion. The opposition agreed to end the logjam when UPA agreed to have a discussion in Rajya Sabha as well. According to reports it is a first of its kind trial of strength in the 15th Lok Sabha.
India GDP grew 5.3% in July-Sept quarter
The Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation has released the estimates of Gross Domestic Product (GDP) for the second quarter (July-September) Q2 of 2012-13, both at constant (2004-05) and current prices, alongwith the corresponding quarterly estimates of Expenditure components of the GDP.
The details of the estimates are presented below.
ESTIMATES OF GDP BY ECONOMIC ACTIVITY
At constant (2004-05) prices
Quarterly GDP at factor cost at constant (2004-05) prices for Q2 of 2012-13 is estimated at Rs. 12,93,922 crore as against Rs. 12,28,982 crore in Q2 of 2011-12, showing a growth rate of 5.3 per cent over the corresponding quarter of previous year. The economic activities which registered significant growth in Q2 of 2012-13 over Q2 of 2011-12 are ‘construction’ at 6.7 per cent, ‘trade, hotels, transport and communication’ at 5.5 per cent, ‘financing, insurance, real estate and business services’ at 9.4 per cent, and ‘community, social and personal services’ at 7.5 per cent. The growth rates in ‘agriculture, forestry & fishing’ is estimated at 1.2 per cent, ‘mining and quarrying’ at 1.9 per cent, ‘manufacturing’ at 0.8 per cent, ‘electricity, gas and water supply’ at 3.4 per cent in this period.
According to the First Advance Estimates of Production of Foodgrains, Oilseeds and other Commercial Crops for 2012-13 released by the Department of Agriculture and Cooperation on 24.9.2012, production of rice, coarse cereals, pulses and oilseeds are expected to decline by 6.5%, 18.4%, 14.5% and 9.6% respectively during the Kharif season of 2012-13 as compared to the production of these crops in the Kharif season of 2011-12. Apart from production of kharif crops, the growth in ‘agriculture, forestry & fishing’ estimates of GDP in Q2 are based on the anticipated production of fruits and vegetables, other crops, livestock products, forestry and fisheries.
According to the latest estimates available on the Index of Industrial Production (IIP), the index of mining, manufacturing and electricity, registered growth rates of 1.8 per cent, 0.2 per cent and 2.8 per cent, respectively in Q2 of 2012-13, as compared to the growth rates of (-) 4.1 per cent, 3.4 per cent and 10.5 per cent in these industries in Q2 of 2011-12. The key indicators of construction sector, namely, cement and consumption of finished steel registered growth rates of 5.1 per cent and 2.3 per cent, respectively in Q2 of 2012-13...Read More
India's rating outlook is stable: Moody's
In its annual credit analysis on India, Moody's says that the Baa3 sovereign rating is supported by credit strengths which include a large, diverse economy, strong GDP growth as well as savings, and investment rates that exceed emerging market averages. The rating is constrained by the credit challenges posed by India's poor social and physical infrastructure, high government deficit and debt ratios, recurrent inflationary pressures and an uncertain operating environment. The report is an annual update to the markets and does not constitute a rating action. It summarizes India's sovereign credit profile according to the four broad factors that underpin Moody's Sovereign Bond Ratings Methodology: Economic Strength, Institutional Strength, Government Financial Strength, and Susceptibility to Event Risk. India's rating is based on an assessment of moderate economic and institutional strength, low government financial strength and low susceptibility to event risk. Moody's notes that although India's GDP growth remains above that of its rating peer, it has slowed from about 8.4% in FY 2010 and FY 2011 to 5.3% in the first half of 2012. Persistent domestic inflation and wide fiscal deficits precluded domestic policy loosening to combat the global growth downturn over the last year.
Starting in September 2012, the government has announced measures to spur infrastructure development, allow increased foreign investment, and rein in the fiscal deficit. However, in Moody's view, given the delayed timing and still modest scope of these measures, growth may remain subdued in the near term amid continued domestic political uncertainty and a global slowdown. India's fiscal position has long been a constraint on its rating. The government's annual deficits tend to be among the highest within the Baa range, and have proven relatively more vulnerable to growth downturns due to elastic revenues and rigid expenditures. Although absolute debt levels have risen steadily, the government's debt to GDP ratio has been declining over the last few years, partly due to higher inflation. Moody's assessment of low government financial strength is based on its expectation that the government's debt and interest payment burden will remain high relative to its annual revenues over the medium term. The stable outlook on India's rating is based on Moody's expectation that the economy's structural strengths - a high household savings rate and relatively competitive private sector - will ultimately raise the GDP growth rate from around 5.4% in FY 2013 to 6% or higher in FY 2014, with this higher growth improving fiscal and balance of payments metrics. However, Moody's cautions that unanticipated domestic political turmoil, a further worsening in global growth and financial conditions, or a surge in food and other commodity prices could all affect the pace and timing of the recovery.
Direct Cash Transfer scheme to be launched on January 1, 2013: FM
Finance Minister, P. Chidambaram, describing direct cash transfer subsidies as being a game changer today said that the scheme would begin from January 1, 2013. He added that the scheme would bring efficiency into the system as subsidies would be directly transferred as cash into the beneficiaries’ account. The cash transfer scheme which would be rolled out under Aadhar scheme, is to be launched in 51 districts across 16 states. FM said that government has identified 42 schemes under food, fertilizer and LPG which could be brought the purview of direct cash transfer scheme. FM hopes that Aadhar scheme has 80% penetration in these 51 districts. Infrastructure is in place for the rollout of the scheme.
Bharti Infratel IPO to open on 11 December
Bharti Infratel Limited is proposing an initial public offer of 188,900,000 equity shares of face value of Rs 10 each ("Equity Shares"). The Price Band has been fixed between Rs.210 and Rs.240 per share. The issue opens for subscription on Tuesday, December 11, 2012 and will close on Friday, December 14, 2012 for Non Institutional Bidders and Retail Individual Investors and on December 13, 2012 for QIB Bidders. The Anchor Investor Bid/Issue Period shall be one working day prior to the Bid/Issue opening date. The Issue comprises of a fresh issue of 146,234,112 Equity Shares by the Company (the "FRESH ISSUE") and an offer for sale of 42,665,888 Equity Shares by certain shareholders (the "OFFER FOR SALE"). The Issue will constitute 10% of the post-issue paid up Equity Share capital of the company. The Company, in consultation with the selling shareholder and the Joint Global Coordinators and Book Running Lead Managers (the "JCBBRLMs"), the Book Running Lead Managers (the "BRLMs") and the Co-Book Running Lead Managers (the "CBRLMs") have fixed the price band between Rs.210 and Rs.240 per Equity Share for the IPO. The minimum bid lot has been fixed at 50 Equity Shares and in multiple of 50 equity share thereafter. The Retail Discount decided on per share basis is Rs 10 per Equity Share. The Retail Discount will not exceed 5% of the Issue Price. The Issue has been assigned a 4/5 grading by CRISIL Limited indicating that the fundamentals of the Issue are above average relative to other listed equity securities in India. The IPO grade is assigned on a five point scale from 1 to 5 with IPO grade 5/5 indicating strong fundamentals and IPO grade 1/5 indicating poor fundamentals. For details, please see the section "General Information" on page 80 of the RHP...Read More
One number wonder....Dial *99# to access your banking needs
P Chidambaram, Honourable Finance Minister of India launched NPCI’s National Unified USSD platform (NUUP) based mobile banking service in the presence of Shri Narendra Singh , CMD of Bank of Maharashtra and Shri A P Hota, MD & CEO of NPCI at Pune during the inaugural session of Bancon 2012 on November, 24, 2012. National Unified USSD Platform (NUUP) offered on a short code *99# is a service which would take banking services to every common man in this country. The service would allow every banking customer to access banking services with a single number across all banks – irrespective of the telecom service provider, mobile handset make or the region.
Benefits of NUUP
- *99# one number for every Indian to access banking services.
- 90% of phones used in the country are GSM phones and this service works on all GSM phones irrespective of handset make, cost, operating system or even the telecom service provider
- Works on basic voice connectivity – unlike an application GPRS connectivity is not required
- The customer need not download any application on the phone
- Question and answer driven interaction – simple for everyone to understand
Benefits to the Bank
- *99# service can be used at BC POS terminals to serve the rural populace
- Access to all telecom service providers through a single integration with National Payment Corporation of India
- Easier adaption to mobile banking due to simplicity of service and technology
- Easier to promote a single code *99# for banking services across all banks.
Current Status of Service
- Service live with 23 banks and two telco (BSNL and MTNL)
- IMPS fund transfer service is available and NPCI is awaiting permission from RBI to enable other banking services like ‘Balance Enquiry’, ‘Mini Statement’ and ‘Request for Cheque Book’.
|List of Banks live on NUUP (23 Banks)|
|Andhra Bank||State Bank of Bikaner & Jaipur|
|Allahabad Bank||State Bank of Hyderabad|
|Bank of Baroda||State Bank of India|
|Bank of India||State Bank of Mysore|
|Canara Bank||State Bank of Patiala|
|Federal Bank||State Bank of Travancore|
|ICICI Bank||Syndicate Bank|
|Indian Bank||Union Bank of India|
|IDBI Bank||UCO Bank|
|Karur Vysya Bank||Union Bank of India|
|Oriental Bank of Commerce||Vijaya Bank|
|Punjab National Bank|
‘Given that mobile phones have become hugely popular in India, mobile financial services offers a great opportunity for enabling financial services to all Indians at an affordable cost and thus enabling rapid financial inclusion. A common platform for all banks instead of each bank having to develop a platform is a strategic move by NPCI to help banks and let them focus on customers to enable this service while NPCI manages the technology behind the platform’ Said Sri A P Hota.
Young political leaders will be game changers of tomorrow: Frost & Sullivan
The global political landscape is on the brink of sweeping change with profound implications for businesses, economies, societies, cultures and, at the most fundamental level, personal lives. "Gen-Next" leaders are assuming power globally, establishing their handprint on structures, practices and outlooks. "Countries like India and China, where the baton is being passed onto a younger generation of political leaders, will be the game changers of tomorrow," explained Archana Amarnath, Programme Manager, Visionary Innovation Research Group, Frost & Sullivan. "These leaders will be the ones calling the shots, making the rules, and holding massive authority and control – a power that comes from leading 35 per cent of the global population in 2025." Frost & Sullivan has studied the impact of this generational political shift in its recently released, ground-breaking book titled "New Mega Trends: Implications to our personal lives." The Mega Trend will drive a cross-pollination of ideas; urbane, techno-savvy young leaders will embrace the corporate mantras of growth and innovation in political governance. Transparency and professionalism will seep into the political world. New leaders, with a global outlook, will be more receptive to the private sector assuming a larger role in multi-sectoral, development initiatives.
This makeover is expected to go much further and deeper; in addition to structural reform, it will trigger changes in attitude as well. In a recent article "New Mega Trend: The World Stands at the Cusp of Political Generation Change," which offers an in-depth examination of how a new generation of leaders is re-shaping the destiny of their countries and of the world at large, Amarnath remarked, "The next generation of politicians will have a very different set of principles and priorities. Corruption in the developing world will decline as politicians become better educated and intolerance of corruption increases among the young. Democratic agendas could be pushed into nations which currently do not practice it – in some cases forcibly, as has recently been seen in Egypt and Libya." Frost & Sullivan is pioneering research into key "New Mega Trends" that will transform the way in which corporations and individuals think, operate and strategise. What are the potential risks and opportunities that will follow in the wake of these New Mega Trends? What impact will they have at the micro and macro level? How can they be effectively harnessed? "New Mega Trends," written by Frost & Sullivan Partner Sarwant Singh and published by Palgrave Macmillan, is currently available in bookstores across the UK, Europe, the US and Asia.
Americans concerned about Egypt, Arab Spring: New Poll
A significant majority of Americans are concerned about the rise of the Islamist government of Mohammed Morsi in Egypt, and nearly two-thirds of U.S. voters favor cutting aid to Egypt if the country abrogates its peace agreement with Israel, according to a recent poll (Charts) conducted by Greenberg Quinlan Rosner Research on behalf of The Israel Project. Moves by Egypt to undermine democracy or not protect religious freedom also are reasons to cut U.S. aid, with Democratic voters seeing those moves as equally compelling as violations of the Camp David accords, while GOP voters are slightly more concerned with Egypt’s keeping peace with Israel.
The upheaval in the Middle East known as "The Arab Spring," has coincided with a significant jump in the percentage of American support for Israel, which is up by eight points during the past year, to 68%.
The number of Americans expressing support for strengthening or maintaining America’s relations with Israel also rose eight points, to 81% of voters in November 2012 compared to 73% of registered voters in November 2011, with nearly half of American voters now saying they want to "strengthen" the U.S. relationship with Israel. Increasing support for a close and growing U.S.-Israel alliance permeated views on wider Middle East policy throughout the survey. Fifty-nine% of American voters say the United States should work more closely with Israel in the Middle East, versus just 24% who say the U.S. should work more closely with Arab states such as Egypt and Saudi Arabia...Read More
The top 5 mistakes buyers make
So you're ready to meet the challenge of buying a new home? With some common-sense planning, you can avoid these 5 common buyer mistakes and steer yourself towards success:
1. Impulse buying In order to skip this mistake, do some serious research on your specific needs. For example, how do the local schools rate? Are there parks or recreation facilities that fit your needs? Can you tolerate the traffic? Is there sufficient shopping? In other words, rate areas in terms of what is important to you personally. You might find your "dream house" only to discover that re-sales are terrible, the schools are abysmal, traffic is a nightmare, or that aircraft patterns go right over the front yard! Bottom line – make your dream home earn its stripes. Before you commit to a long term relationship, make certain you are compatible.
2. Not setting any limits Don't make the classic mistake of buying into more than you can afford. Needless to say, your first responsibility is to pay for your mortgage, taxes, and insurance. If you're set on upgrades or remodeling, can you fit them into your budget? What about furnishings? Can you afford the extra furniture for those extra bedrooms or for that huge new living room? And what about utilities? Those cathedral ceilings are breathtaking, but have you considered the additional energy costs?
3. Not getting pre-approved for a mortgage Speaking of monthly payments, most experts consider it crucial for buyers to seek pre-approval from a lender before even looking to purchase. While pre-approval does not necessarily mean you are approved for a loan, at the very least it establishes precisely what you can afford. Once you're armed with that information, you can avoid the heartbreak of finding the perfect home only to discover that it's beyond your reach! In addition, pre-approval substantially improves your status as a buyer in the eyes of a seller.
4. Not working with professionals OK, so you've found a lender. Now you need to complete your professional support team. Too many buyers believe they can do this on their own, and they disregard professional input. Avoid a nightmare later by assembling a group of professionals who will suit your needs, who will represent you, and whose expertise you respect. Begin your search with a buyer's agent. Resist the urge to call the number on the for sale sign. The seller's agent works for the seller! You need an agent who will work on your behalf, who will negotiate with your interests in mind. Will you need a real estate attorney? It's a good idea to find a suitable lawyer as your search begins, rather than in the midst of it. To say that real estate documents are confusing is an understatement. A real estate attorney is best suited to protect you from unexpected terms or surprises when it's time to sign on the dotted line. And what about a home inspector? Which brings us to the next mistake…
5. Cutting corners on the home inspection Lenders require a home inspection before they will approve a loan. But the bank generally pays only for standard home inspections that cover structural components such as walls, support, electrical, and piping. Buyers are wise to pay for more thorough inspections to include roof integrity, sewage, or leaks. The point is, a minor investment with your own inspector is a small price to pay in exchange for enormous deficiencies later. Ultimately, with smart planning and a realistic approach to home buying, you really can enjoy the dream of owning your perfect home!
Healthy Body Mass Index: You may still be overweight
Even if you are well within the generally accepted healthy Body Mass Index (BMI), you could still be diagnosed as obese, according to a latest study by VLCC, a leading wellness brand in South Asia and the Middle East. The pan-India study, covering a sample size of nearly 7000 men and women, has concluded that despite people staying in the "healthy" BMI range, there is noticeable percentage of individuals diagnosed with or already suffering from associated Medical Disorders related to Obesity. On the occasion of Anti-Obesity Day (26th November), an initiative that the organization launched 13 years ago, VLCC released a knowledge paper on ‘Waist-Height Ratio and Body Fat % Synergy’ that ascertains a linkage between Waist Circumference-to-Height Ratio (WHtR) and Obesity. Speaking on the path-breaking research, Vandana Luthra, Founder & Mentor, VLCC, "As pioneers in the Wellness domain in South Asia and Middle East it is incumbent upon us to take active interest in propagating awareness about the dangers of Obesity and related issues. It has been our endeavor, through constant research and study, to understand the underlying factors that cause Obesity, the effects Obesity can have on an individual’s health as well as to lay down recommendations for preventive healthcare.
As it is difficult to measure Body Fat% on one’s own, for this measurement requires specialised equipment like a Body Composition Analyzer, WHtR is an easier to measure and more accurate screening tool for Overweight or Obesity related lifestyle diseases." The detailed research, conducted over a period of one year, has clearly established a correlation between Waist-Height ratio with the Body Fat%. The Waist-Height ratio in both the genders could be demarcated at a particular value, which highlighted the need for a "Preventive Healthcare Approach" before the Medical Condition becomes severe. This value also flashed the corresponding Healthy Body Fat% limit. This knowledge paper has clearly addressed the limitations faced on using other ‘obesity indicators’ like BMI, Waist-Hip ratio, and Waist Circumference. The study also helped establish borderline value of WHtR >0.50 as indicative of increased obesity related health risks for men and women. The trend of body fat % in each WHtR range was studied...Read More
Ministry envisions India as a global leader in wind energy: Dr. Farooq Abdullah
The conference on Wind Energy titled ‘Wind Power India 2012’, an International Conference and Exhibition kick started with its second big edition today at the Chennai Trade Centre. The event was formally inaugurated by Dr. Farooq Abdullah, Minister for New and Renewable Energy, Government of India. The 3-day event was organized by Indian Wind Turbine Manufacturers Association (IWTMA), General Wind Energy Council (GWEC), and World Institute of Sustainable Energy (WISE). The International conference witnessed the convergence of stakeholders from across the Wind Energy sector, Government authorities, policy makers and exhibitors from across the world providing a great forum for deliberations on the roadblocks hindering the development of renewable energy and seeking the government’s support to address the policy shortfalls impeding wind energy to grow to its full potential.
Wind energy has been the fastest renewable energy sector in the country. With a cumulative installed capacity of over 18000 MW wind power currently accounts for almost 70% of the total installed capacity in the renewable energy sector. About 3200 MW of new wind power capacity has been added during the last financial year (2011-2012) alone which is the highest in a year, so far. The 12th five year plan proposes and envisages around 15000 MW of grid interactive renewable power capacity additions from wind energy alone. In his welcome address, Mr. Ramesh Kymal, Chairman, IWTMA said, "India has experienced significant growth in the renewable energy sector.
It is pertinent to know that of the total 25,000 GW of present installed capacity, wind power has contributed 70% in positioning India as a global leader in the renewable energy sector. The ever increasing demand for electricity in India has been the foremost driver for growth of wind energy in the country". Mr. G.M Pillai, Founder Director General, WISE, in his speech said that as per the National Action Plan on Climate Change (NAPCC), 15% of all energy is to come from renewable energy by the year 2020. This translates to about 8000 MW of power per year which wind energy is capable of achieving. The Indian wind energy sector is facing immense challenges due to the withdrawal of Accelerated Depreciation (AD) and Generation Based Incentive (GBI), and this needs to be implemented on an urgent basis...Read More
Production of crude steel increases to 73.79 MT in 2011-12: Beni Prasad
The Minister of Steel, Shri Beni Prasad Verma has said that production of steel has been consistently increasing since last several years. As per the available information, production of crude steel has increased from 70.67 MT in 2010-11 to 73.79 MT in 2011-12. The present National Steel Policy was formulated in the year 2005. However, in view of the changed scenario, globally as well as domestically, the Ministry of Steel has decided to formulate a new National Steel Policy which will inter-alia address a number of issues having bearing on development and growth of steel industry in the country. In a written reply in the Rajya Sabha today Shri Verma said, Steel is a deregulated sector. As such, the decision to enter into joint venture/tie-ups/acquisitions/direct investment resulting into flow of FDI into the country, is taken by entrepreneurs based on their review to expand their business. The Government in such cases offers the policy framework, facilitating and encouraging such inflow.
Power Sector is facing numerous challenges: Jyotiraditya scindia
The minister of state (independent charge) for power Shri Jyotiraditya scindia informed Rajya Sabha today that Power Sector is facing numerous challenges and efforts are being made by the Government to address them. These challenges include inter-alia shortage of fuel such as coal and gas, poor financial health of Distribution Companies (DISCOMS), transmission and distribution losses, etc. Several steps have been initiated by the Government to meet the challenges of adequate power supply. These include inter alia setting up of additional generation and transmission capacity along with steps to ensure adequate supply of fuel such as coal and gas, schemes for financial restructuring of the state distribution companies (DISCOMS) so as to ensure their long term viability, the minister said. The estimation of demand is made by the Central Electricity Authority (CEA) through Electric Power Survey (EPS) which is conducted by CEA every five years to forecast the electricity demand in the country on short, medium and long term basis. Partial End Use Methodology (PEUM), which is a proven method for demand forecasting has been used for forecasting the demand for the 17th EPS by CEA. Therefore, the estimation of electricity demand is not a reason for power sector crisis in the country, the minister added.
Direct Cash Transfer will eliminate corruption by intermediaries: Jairam
The Minister of Rural Development Jairam Ramesh said that the scheme of direct cash transfer will usher in a new revolution in the country. Addressing an International Workshop on Cash Transfer here, he said that some civil society members have termed this as bribe giving, which is a bogus and ludicrous argument and added that it is rather an answer to the incompetent Army of corrupt delivery agents. Saying that the current system of delivery is not delivering, Shri Ramesh also rejected the notion that the direct cash transfer scheme would abdicate government`s commitment to welfare state. He said, the scheme will rather make the welfare State more efficient by rooting out corruption being practised by an army of incompetent and insensitive intermediaries. The Minister stressed that the cash transfer scheme underscores the instruments of the welfare state, which are subsidy, scholarships or pensions, which should be delivered in a better fashion. Terming the new mission as a Cooperative partnership between the Centre and the States, Sh Ramesh also pitched for Independent Concurrent Evaluation of the Scheme. The direct cash transfer scheme will be officially launched from 1st January 2013 in 51 districts spread over 16 States. It will cover 29 welfare schemes at the beginning and most of them will be scholarship schemes.
Govt adopts multi-pronged strategy to augment gas supplies
The minister of State (Independent Charge) for Power Shri Jyotiraditya Scindia today informed the Lok Sabha that at present, around 85 MMSCMD (Million Metric Standard Cubic Meter per Day) of gas is required at 90% PLF, against which 35 MMSCMD gas is being supplied to the gas-based power stations in the country. A number of gas based power projects are at an advanced stage of construction and a few projects were expected to be commissioned during 11th Plan itself. However, these projects have been delayed due to declining production of KG D6 gas, as gas to these projects could not be allocated so far.He further informed he House that in case of existing plants are operated now a reduced level of gas supply e.g., from 90% Plant Load Factor (PLF) requirement to 40% requirement, this would result in a likely increase in overall cost of electricity from gas base plants to the tune of around 30%. Replying to a question, minister said that Government of India has adopted a multi-pronged strategy to augment gas supplies and bridge the gap between supply and demand for the domestic market as under:
- Ministry of Petroleum & Natural gas (MOP&NG) is taking necessary steps to augment production of natural gas from the gas fields/wells.
- MOP&NG is taking necessary steps to increase availability of gas from domestic sources by awarding gas blocks for Exploration & Production (E&P) activities in various sedimentary basins of the country under the New Exploration Licensing Policy (NELP).
- MOP&NG is encouraging Import of gas in the form of Liquefied Natural Gas (LNG) and also making efforts for import of gas through International pipeline projects.
No specific proposal for relocation of any ongoing gas based power projects to foreign countries have been received by the Government.
Veerappa Moily clarifies on shortfall in gas production by RIL
The Minister of Petroleum & Natural Gas Dr. M. Veerappa Moily informed the Rajya Sabha in a written reply today that the average gas production from KG-DWN-98/3 (KG-D6) block during the current year (2012-13 upto October, 2012) was about 29.81 Million Standard Cubic Meter Per Day (MMSCMD) as against 86.73 MMSCMD approved in the Field Development Plans (FDPs) of D1, D3 & MA fields in this block, which are currently on production. The decline in gas production from KG-D6 block is due to the following reasons:
- Out of a total 18 gas producer wells in D1 & D3 fields, 6 wells have ceased to produce gas due to water loading/sand ingress in wellbores.
- Out of a 6 oil/gas producer wells in MA field, 2 oil/gas producers have ceased to flow oil/gas due to water ingress in wellbores.
- Non drilling of the required number of gas producer wells in D1 & D3 fields by the Contractor in line with the Addendum to Initial Development Plan (AIDP) approved by the Management Committee (MC).
Further, the Contractor has submitted the following reasons for less gas production as compared to AIDP of D1 and D3 fields:
- Considering the reservoir behavior based on existing wells in main channel area, as well as the reservoir characteristics in overbank areas of D1 & D3 fields, any additional wells in D1 & D3 fields, may not help improve either production rate or recovery.
- Substantial variance in Reservoir Behavior and Character has been observed vis-à-vis the prediction, and there seem to be reservoir constraints in achieving the gas production rates.
- Pressure decline is several times higher than originally envisaged.
- Early water production in some of the wells was not predicted in initial reservoir simulations, though overall field water production is small.
- The Contractor’s inability to firm up appropriate drilling locations on plea of geological complexities.
He also emphasized government have not accepted the contention of the contractor and have ordered proportionate disallowance of cost of production facilities amounting to US$ 1.005 Billon for not fully implementing approved AIDP. RIL has initiated arbitration proceedings on the disallowance and Government of India have also appointed an arbitrator.
FMCG brand extensions more successful than new product launches: Nielsen
Extensions of existing fast moving consumer goods (FMCG) brands are five times more successful than launching a new brand in India, according to a new study released by Nielsen, a leading global provider of insights and information into what consumers watch and buy. Nielsen’s study of top brands in 46 FMCG categories and 82 brand extensions in food and non-food categories shows that in addition to promoting brand equity, brand extensions can grow incremental sales up to 38% and contribute as much as 30 percent to parent brand sales. "Innovations are driving FMCG growth in India," said Arun Chogle, client business partner, Nielsen India. "Brand extensions, or stretching your existing brand, increase your chances of innovation success. Not only do brand extensions leverage the equity of the parent brand, but they also lead to faster adoption and deliver higher marketing efficiency."
Nielsen identifies five ways brand extensions are successful in India:
- Brand stretches gain share and build distribution faster than new launches. One example from Nielsen’s review of brands launched in the past two years shows that while eight new, national body lotion brands reached a share of 0.3 percent, seven national brand extensions increased that figure almost four-fold, delivering a four percent market share.
- Brand stretches are two times more likely to succeed in a highly fragmented category. Nielsen’s findings show that developing categories with fragmented shares, or developing categories with lower penetrations, were more successful than established category sizes of greater than Rs. 3000 Crore.
- Sixty-five percent of successful brand stretches have a premium index lower than the parent brand. Keeping under the price premium index of parent brands is likely to increase the chance of success. Nielsen’s results show that brand leaders that priced below the parent premium at the entry stage were more successful than those priced above the parent brand.
- Strong parents beget strong children. Nielsen’s study shows that when the parent brand was a leader in the category, 59% of brand extensions were also successful. When the parent brand was not among the top five players, 35% of brand extensions were successful. "Building the core is important, but advertising support is critical for both the parent and the child," said Chogle.
- Successful stretches leverage four factors: Advantage delivers new, or distinct, benefits to the category. Recognition ensures strong parent-brand awareness levels in terms of functionality, imagery and personality. Relevance makes certain parent attributes relevant in the new category andCredibility delivers on brand promises.
Kashagan Oil Field- Negative for ONGC, Positive for ConocoPhillips: Moody's
According to a report published by Vikas Halan, Vice President - Senior Analyst, Moody’s Investors Service Singapore Pte Ltd and Thomas S. Coleman, Senior Vice President, Moody’s Investors Service, Inc, the Kashagan project has been a high-profile, but ultimately a high-cost venture for ConocoPhillips. On Monday, Oil & Natural Gas Corporation (ONGC, Baa1 stable), through its fully owned subsidiary ONGC Videsh Limited (OVL), announced that it would acquire ConocoPhillips’ (A1 stable) 8.4% participating interest in Kashagan Field in Kazakhstan for US$5bn. The acquisition would be funded with debt and would increase ONGC’s consolidated net debt by at least US$5bn, a credit negative. ONGC has been struggling to generate positive free cash flows given its already high capital expenditure program (approximately US$7.5bn for the year ended March 2012). Additionally, ONGC’s share of India’s high fuel subsidy was US$10bn for the fiscal year ended 31 March, and we expect it to rise to US$12bn this fiscal year.
For the 12 months ended 31 March, ONGC generated free cash flow of US$145mn and had US$3.2bn of debt and nearly US$5bn of cash. We expect ONGC to increase its net borrowings by approximately US$5bn to fund this acquisition. The companies expect the acquisition, subject to relevant regulatory approvals, priority rights and consortium preemption rights, to close in the first half of 2013.The acquisition would mark ONGC’s entry into the oil-proven North Caspian Sea of Kazakhstan. According to the company, the acquisition would likely add an average annual production of about 7.3mn barrels for more than 25 years, with a peak of about 11.7mn barrels. ONGC produced nearly 450mn barrels of oil and gas for the year ended 31 March and thus, the acquisition would add less than 2% to its annual production. But the acquisition also bears significant strategic importance to India in terms of contributing to the country’s energy security. India imports nearly 80% of its crude annually, and this acquisition is a step toward reducing its reliance on imports...Read More
10 Lakh LPG connections issued since cap on Subsidized Cylinder
The Minister of State for Petroleum & Natural Gas Panabaaka Lakshmi informed the Lok Sabha in a written reply today that Public Sector Oil Marketing Companies (OMCs), namely, Indian Oil Corporation Limited (IOC)] Bharat Petroleum Corporation Limited (HPCL) have reported that 10,17,290 LPG connections have been issued after issue of orders on capping of subsidized cylinders. They have also reported that during the period from 2009 to September 2012, action has been taken against 1480 established cases of diversion against the erring distributorships under the provisions of Marketing Discipline Guidelines. Reply to another query, the Minister said that the demand of commercial LPG cylinders has increased at par with domestic LPG cylinders during the last three years...Read More
Enterprises still cautious in adoption of APM SaaS: Survey
Despite escalated industry talk about APM SaaS, a CA Technologies sponsored survey found a majority of enterprises are taking a cautious approach to its adoption today; the adoption rate is expected to increase in the next year driven by application complexity and the DevOps movement as more comprehensive, full-featured APM SaaS solutions become available. Conducted by IDG Research Services online among members of the CIO Forum on LinkedIn during August 2012, the survey titled, "When It Comes to Application Performance, the User is Still King," polled more than 100 IT managers and executives. The research found most organizations (61 percent) have no plans to implement APM SaaS. Twenty-four percent use APM SaaS in some capacity, but only four percent use an APM SaaS vendor to monitor all of their critical applications. "We believe one reason for cautious adoption is that many APM SaaS offerings are limited in functionality and therefore don’t meet the needs of the enterprise," said Mike Sargent, general manager, Enterprise Management, CA Technologies.
"The ability to proactively identify issues and rapidly diagnose root causes is where the value is, and today’s APM SaaS offerings don’t provide this level of capability." Approximately 15% of respondents plan to implement APM SaaS within the next year, with more than half planning to have their managed service provider deliver it. The survey also found use of on-premise APM and APM SaaS is expected to rise as the DevOps movement matures. By introducing APM early in the application lifecycle, survey respondents expect to derive multiple benefits including improved application quality, reduced risks and costs, and accelerated time to market for new services. As more comprehensive, full-featured APM SaaS solutions become available that can provide equivalent capabilities to on-premise solutions, broader adoption in large enterprises is expected to increase.
Weak growth momentum in recovery phase: BluFin
BluFin, the Financial Information and Content Company, announced the November numbers for the BluFin Business Cycle Indicator (BCI) which provides "real time" information on the state of the business cycle in the Indian economy. The BluFin Business Cycle Indicator flattened slightly in November after a month-on-month increase for three straight months. The current score is 160.0 compared to 160.3 in October. However, the implied year-on-year growth rate continues to be positive at 2.5%, suggesting the Indian economy is growing as compared to the previous year. The latest BCI data indicate a weak recovery from a bottomed- out business cycle. The weakness is primarily due to a slowdown in the consumer sectors while production of basic and intermediate economic goods continues to improve. Commenting on the November numbers, Dr. Surjit Bhalla, Senior Advisor, BluFin said, "The shallowest recovery, certainly in the last six years, and possibly the last twenty. The consoling feature is that across the world, one is witnessing similar "recoveries". The good news just might be that this is a basing period, and that once the turnaround happens, it will be steadily sharp. In my view, a full fledged recovery in the business cycle is on the horizon."...Read More
Despite reforms, macroeconomic scenario clouded: ICRA
Macroeconomic fundamentals remain clouded despite the lower-than-expected shortfall in monsoon rainfall; recent easing of headline inflation; and reform measures announced by Government of India (GoI) in the past two months. Although measures such as the revision in the price of diesel and easing of norms for Foreign Direct Investment (FDI) in various sectors initiated since September 2012 boosted investor sentiments and aided in a strengthening of the Indian Rupee, the currency has weakened sharply in the past month, adding to macroeconomic uncertainties. To an extent, a narrower-than-expected shortfall in south-west monsoon rainfall has assuaged concerns regarding food inflation. Nevertheless, an anticipated rise in food inflation in the coming months based on an adverse base effect and higher minimum support prices (MSP) for rabi crops would keep inflationary expectations elevated.
Despite the considerable slowdown in economic growth over the last 15 months, core inflation remains above 5%. In our view, a weaker Rupee and a generalisation of inflationary pressures related to high food prices would result in core inflation remaining firm. ICRA continues to expect WPI inflation to average 7.5-7.7% in FY13. The pace of growth of real GDP at factor cost is likely to have eased to 5.0% in Q2FY13 from 5.5% in Q1FY13. While the weak monsoon onset and late sowing are likely to have dampened yields, heavy rainfall in mid-August to mid-September 2012 may have adversely impacted the standing crops. As against a 2% shortfall in sowing, the First Advance Estimates of Crop Production released by GoI indicate a 7% decline in the production of kharif crops, which suggests that growth of agriculture & allied activities is likely to be low in the second half of 2012...Read More
RBI sets up technical committee to review presentation of accounts
The Reserve Bank of India (RBI) has constituted a technical committee to review the form of presentation of its balance sheet and profit and loss account. The committee will also review the style and content of the management commentaries on financial statements and notes to the accounts, and make recommendations to effect changes, if necessary, by appropriate legislative/regulatory modifications. Several changes have been brought about over the years in the presentation and the explanatory notes to RBI accounts with a view to improving the disclosure, transparency and information content. The existing format of the balance sheet and profit and loss account is being reviewed to keep pace with the changing times and meet the market expectations for bringing in more clarity and lucidity for the wider readership, while aligning with the best international practices.
The terms of reference of the committee are:
- Whether the existing presentation of two separate balance sheets of issue and banking departments needs to be merged into a single balance sheet of the RBI;
- Whether it is necessary to have separate p