BUDGET 2008-09

Direct Taxes

Personal Income Tax ( PIT )

• The PIT rates have not been changed, however the basic exemption (i.e income
upto which no tax is payable) has been increased to Rs1,10,000/-from the existing level of Rs.1,00,000/-. The basic exemption for woman assessee has gone upto Rs1,45,000/- from the existing level of Rs.1,35,000/ and for senior citizens it has gone upto Rs.1,95,000/- from the existing level of Rs.1,85,000/-. This would result in a tax saving of Rs1,000/- per annum and Rs. 2,000/- for senior citizens.

• The Comparison of existing and proposed slabs are as follows:
Existing Slabs Proposed Slabs

0 to 1,00,000 : 0% 0 to 1,10,000 : 0%
1,00,001 to 1,50,000 : 10% 1,10,001 to 1,50,000 : 10%
1,50,001 to 2,50,000 : 20% 1,50,001 to 2,50,000 : 20%
2,50,001 and above : 30% 2,50,001 and above : 30%
Surcharge of 10% for income Surcharge of 10% for income above above Rs10 lacs Rs10 lacs
Education cess of 2% Education cess of 2% plus 1%

• Deduction u/s 80D for expenses incurred for payment of Medical Insurance premium is increased to Rs. 15,000/- per annum from the existing limit of Rs. 10,000/- per annum. In case the premium is paid in respect of a senior citizen the limit is increased to Rs. 20,000/- from the existing Rs.15,000/-.

• Deduction u/s 80E in respect of interest on education loan is now extended even for interest on education loan taken for the purpose of higher study of the spouse and children. Earlier it was restricted only to the interest on self higher education loan.

• Capital gains tax would be liable to be taxed on profits realized on sale of work of art, drawings, paintings and sculptures. This has been brought in by excluding the above from the definition of personal effects which is not liable to capital gains.

• Capital gains exemption u/s 54EC that can be availed by a person by investing in NHAI/ REC Bonds will henceforth be restricted to a maximum investment of Rs.50 lacs per annum. Earlier there was no such limits in the statute. Thus the maximum exemption that can be availed in a year u/s 54EC will be restricted to Rs.50 lacs only.


• The dividends to be received on equity shares would marginally go down as the companies now need to pay higher dividend distribution tax (DDT). This has been made by amending Sec 115-O. The DDT on dividend from equity shares have gone upto 15% from the existing 12.5%.

• The income to be received on mutual fund units would marginally go down as the mutual funds now need to pay higher dividend distribution tax (DDT). This has been made by amending Sec 115-R. The DDT payble by mutual funds will now be :
- 25% on income distributed by money market or liquid funds.
- 12.5% on income distributed to individuals and HUF’s by a fund other
than money market or liquid funds.
- 20% on income distributed to others by a fund other than money market
or liquid fund.
The exemption of DDT on income distribution from equity oriented funds would
continue.

• The threshold limit for not levying Banking Cash Transaction Tax for individuals has gone upto to Rs. 50,000/- per withdrawal from the existing Rs. 25,000/- per withdrawal.


Corporate Income Tax (CIT)

• Tax rates have not been changed, it continues to be at 30%.

• Small & Medium enterprises, i.e companies or firms having taxable income less than Rs 1 crore will not be liable to surcharge. For those whose taxable income is more than Rs 1 crore the surcharge will continue to be at 10%.

• Additional educational cess for secondary and higher education at 1% is introduced on both basic tax and surcharge. This overall takes the education cess payable from existing 2% to 3%.

• Companies that are enjoying tax holiday u/s10A or 10B will now be liable for Minimum Alternate Tax. Thus STPI Units and EOU units will now have to pay MAT of 11.33% of their book profits. This can be taken credit as per prescribed guidelines when they start paying normal tax. This move in effect has partly preponed the end of 100% tax holiday regime from year 2009 to 2007.


INDIRECT TAXES
Service Tax

• Exemption limit for small service providers to be raised from Rs.400,000 to Rs.800,000 ;
• Extension of service tax to: services outsourced for mining of mineral, oil or gas; renting of immovable property for use in commerce or business (residential properties, vacant land used for agriculture and similar purposes, and land for sports, entertainment and parking purposes & immovable property for educational or religious purposes to be excluded); development and supply of content for use in telecom and advertising purposes; asset management services provided by individuals; design services; services involved in execution of a works contract with an optional composition scheme under which tax will be levied at only 2% of the total value of works contract;
• Exemption to: Services provided by Resident Welfare Associations to their members who contribute Rs.3000 or less per month for services rendered, services provided by technology business incubators, their incubates whose annual business turnover does not exceed Rs.50 lakhs to be exempt for first three years; clinical trial of new drugs to make India a preferred destination for drug testing;
• Department of Telecommunications to constitute a committee to study the
present structure of levies on telecom industry

Sales Tax

• 1 % reduction in Central Sales Tax. (from 4% to 3%).

Customs

• Peak customs duty rate on non-agricultural items reduced from 12.5 to ten per cent;
• All coking coal fully exempted from duty;
• Duties on seconds and defective reduced from 20 to ten per cent;
• Customs duty on polyester to be reduced from ten per cent to 7.5 per cent;
• Three per cent import duty to be levied on private importers of aircraft including helicopters;
• Export duty on iron ore and concentrate at the rate of Rs.300 per tonne. Export duty on Chromium proposed at Rs. 2000 tonne;
• Import duty of 15 specified machinery to be reduced from 7.5 per cent to five per cent;
• Import duty on medical equipment cut to 7.5 per cent;
• Import duty of 3 per cent on private aircraft.


Central Excise

• Excise duty on cement reduced from Rs.400 per tonne to Rs.350 per tonne for cement bags sold at Rs.190 per bag at retail market. Those sold above Rs.190 will attract excise duty of Rs.600 per tonne;
• Duty on pet food reduced from 30 per cent to 20 per cent;
• Duty on sunflower oil to be reduced by 15 per cent;
• Duty reduced on watch dials and movements and umbrella parts from 12.5 to five per cent;
• No change in general CENVAT rate;
• Ad volarem duty on petrol and diesel to be brought down from 8% to 6%;
• Small-scale industries excise duty exemption raised from Rs one crore to Rs 1.5 crore;
• Excise duty for plywood reduced from 16 per cent to eight per cent;
• Food mixes to be fully exempted from excise duty;
• Excise duty for plywood reduced from 16 per cent to eight per cent;
• Bio-diesel to be fully exempted from excise duty;
• Water purification devices, small and big, fully exempted from excise;
• Additional CVD duty on crude and refined edible oils eliminated;
• Duty on farm sprinklers cut to 5 % from 7.5%;
• Excise duty on cigarettes increased by 5%;
• Excise duty on Pan Masala without tobacco as mouth fresheners reduced from 66 per cent to 45 per cent;

Today's NEWS

The Centre has increased the excise duty on sugar by Rs 9 a quintal. The levy will come into effect from March 1 and has nothing to do with the Budget being presented in Parliament on Friday.

LIC Housing Finance is looking to combine its reverse mortgage plan with a whole-life annuity provided by a life insurer

National Thermal Power Corporation Ltd (NTPC) has informed the BSE that it has signed a joint venture agreement with UPRVUNL, on Thursday for implementation of 2x660 MW coal based thermal power project at Meja in Allahabad in Uttar Pradesh.
The project would be implemented by the proposed joint venture company on build, own and operate basis

Parsvnath Developers Ltd on February 28 announced the start of construction of 'Parsvnath Preston' a high-end group housing residential project, in Sonepat, Haryana. The expected realization from the project is over Rs 500 crore in next 3 years. The project is spread over a saleable area of 2.2 million sq. ft.

NIIT Technologies has signed a share purchase agreement for acquisition of 100 per cent share capital of Softec GmbH, Germany.
NIIT Technologies Ltd has informed BSE that the Company has signed such a share purchase agreement with shareholders of Softec GmbH.

American car-maker Ford is expected to finalise the deal with Indian conglomerate Tata for the sale of luxury brands, Jaguar and Land Rover, by next week.

Essar Oil on Thursday said it would raise $2 billion through issue of securities in domestic and international markets.
The firm would issue equity shares, convertible debentures, American Depository Receipts (ADRs) and Foreign Currency Convertible Bonds (FCCBs), among others, it said in a filing to the Bombay Stock Exchange.

Indiabulls Real Estate (IBREL), the real estate arm of the Indiabulls group, has decided to take majority stake in Dev Property Developers, (DPD) the London-listed property fund, in order to gain majority control over two of its prized properties in Mumbai. IBREL has bought over 90% in DPD for about Rs 1,100 crore. The stake has been purchased from three FIIs — Government of Singapore, Fidelity and HSBC.

US car-maker Ford is expected to finalize the deal with the Tatas for the sale of the luxury brands, Jaguar and Land Rover, by next week, reports agency source.
The two sides are expected to sign a deal worth around USD 2 billion next Wednesday or shortly afterwards.

CitiFinancial, its consumer finance unit, which is also reeling under the burden of rising bad loans, is considering closing about 100 of its 450 branches in India.

In terms of cost-cutting, the bank is relocating ATMs. Citibank is relocating around 30 ATMs from high-cost locations to low-cost areas,” said banking sources.

The Department of Telecommunications, Ministry of Communications & Information Technology, Government of India has granted licences to 4 subsidiaries of Unitech for providing Unified Access Services (UAS) in respect of 12 telecom circles.

Autoline Industries announced that `Autoline Industries, Pune` and `Sharjah Cement & Industrial Development Co. (SCIDC), (UAE)`, have entered into shareholders` agreement on Feb. 28, 2008 with Autoline Industrial Parks, Pune a subsidiary company of the company. This joint venture has been formed for the purpose of setting up and development of industrial parks relating mainly to auto ancillary units, design engineering units, etc.

MARKET TODAY.....

GLOBAL CUE IS RED AND CONSIDERING BUDGET MARKET WOULD BE VOLATILE,IT WOULD BE PRUDENT BE CAUTIOUS,CRUCIAL LEVEL OF NIFTY IS 5200-5250-5300-5400 ABOVE FROM 5400 LEVEL COULD EXPECT 5550 LEVEL, SECTOR TO BE WATCH OUT FOR HIGHER ROLL OVER METAL AND POWER EQUIPMENT..........

Factbox: Major pending economic reforms

The Congress party-led coalition will present its fifth budget on Feb. 29, which is expected to focus on farms, education, healthcare and tax reforms, and unveil medium-term measures to fight food-price inflation.Finance Minister Palaniappan Chidambaram, a member of the left-leaning coalition elected in May 2004, is also expected to boost investment in infrastructure, particularly roads, ports and power, in the 2008/09 budget. The fiscal year runs from April 1 to March 31.

Following are details of pending reforms that economists and the government say are necessary to sustain economic growth of around 9 percent annually for several years and reduce poverty in Asia's third-biggest economy.

PRIVATISATION: Stake sales in state-run firms. The Congress-led coalition has abandoned privatisation, bowing to pressure from its communist allies.

BANKING: The government has said ownership in state-run banks will not fall below 51 percent, which analysts say acts as an obstacle for growth in the sector. Current government holdings in state banks range from 51 percent to total ownership.Private banks can offer up to 74 percent to foreign investors while public sector banks cannot offer more than 20 percent.

RETAIL: India limits foreign, multiple-brand retailers to wholesale or franchise and licence operations. Talk of easing foreign investment rules has cooled, prompting Tesco Plc to shelve plans for India.

AVIATION: Although foreign funds can invest in Indian airlines, India bars overseas carriers from doing so. A move to allow foreign airlines into the local market has been opposed by the government's communist allies.

FARMING: The government wants to double farm incomes by 2010. Initiatives include doubling the rate of growth of public and private investment in agriculture, launching fresh irrigation projects and developing wasteland for productive use.

INFRASTRUCTURE: According to policy makers, India will need investment of about $500 billion to upgrade infrastructure in the world's second-most populous country. Cutting red-tape is seen as necessary to attract investments.

FOREIGN INVESTMENT: The foreign ownership limit in insurancehas been stagnant at 26 percent despite a long-standing policyproposal to raise it to 49 percent.

PENSION FUNDS - A move to allow 26 percent foreign investment in pension fund management companies awaits the approval of parliament.

BUDGET - India oil cos to save 930 mln rupees/yr on freight cut

State-run oil retailers are expected to save around 930 million rupees a year from 5 percent cuts to petrol and diesel freight rates announced in Tuesday's rail budget.
Leading oil marketing firm Indian Oil Corp is only expected to gain by around 200 million rupees in the next fiscal year from April as it uses its own pipeline network for transporting fuels, a company spokesman said.
Hindustan Petroleum Corp's director of finance, Bhaswar Mukherjee, said his firm would be better off to the tune of 380 million rupees in 2008/09.
"On the basis of estimated numbers for next fiscal we will save 80 million on petrol and 300 million on diesel," he said.
Bharat Petroleum Corp will save around 350 million rupees, its director finance S. K. Joshi said.

What you want from FM in the Coming Budget?????

This section is meant for expressing your personal feeling regarding coming Budget.........OR put it in this way....If you are FM then what will be your Budget????
Please feel free to write...........

"NEXT BILLION"

'The next-billion' market is a large, untapped market waiting to consume; the US$ 150 billion that Indian households now spend, will cross US$ 325 billion by 2015, as per The Boston Consulting Group.
European foundry equipment makers - Laempe & Mossner, and Kuka Roboter, among others - are keen on boosting their Indian operations.
Significantly, VTB Group - Russia's second biggest lender - has become the country's first bank to open a branch in India as part of its strategy to establish a global presence, and plans to invest US$ 100 million in 2009.

Telecommunication companies can now share their active infrastructure

The department of telecommunications (DoT) has approved industry regulator Trai’s recommendations to allow service providers share active infrastructure. The move will help telcos to lower tariffs and reduce their expenditure by well over 50%.
At present, Indian telecos are permitted to share only passive infrastructure like towers, repeaters, shelters and generators. Sharing of active infrastructure will allow operators to share key electronic components such as antennas, feeder cables, nodes, radio access network, transmission systems and backhaul.
The change in the policy implies that new entrants who are allotted spectrum can completely ride on the infrastructure of existing players and launch services within a short span. The entry of these new players is also likely to trigger a tariff war, which can result in a further reduction of call rates. Subscribers in India already enjoy the lowest cellular tariffs across the world.
Active infrastructure sharing will play a major role in expediting the rollout of mobile network across the country, especially in rural India. Rural rollouts carry a higher operation expenditure. The telecom department has now sought an endorsement from the Telecom Commission, is the apex decision making body, for the proposal. Active infrastructure sharing will become a policy only after clearance from the telecom panel, which is expected soon.
Telcos have been seeking the government’s permission for sharing active infrastructure. During a recent meeting on the scrapping of the access deficit charge, several telcos had pointed out that they would pass on the cost benefits due to active infrastructure sharing to their customers.
Apart from savings on operational costs and capital investment, the move will enable operators provide mobile services to their subscribers wherever their own network signal is not available. It will also help them increase their coverage area and improve quality of service with almost no additional expenditure.
“Based on mutual agreement, service providers may have active infrastructure sharing limited to antenna, feeder cable, Node B, radio access networks and transmission system, but sharing of allocated spectrum is not possible. DoT will be amending the licence conditions of UASL/CMTS (unified access service licence and cellular mobile telephone service.
Details of the active infrastructure sharing will be put on the web by service providers,” DoT wrote to the Telecom Commission on February 14. The note said DoT has accepted Trai’s recommendations on active infrastructure “with a different approach”.
DoT has also accepted Trai’s proposal that there will be no mandated sharing of infrastructure. But the entire process will be transparent and non-discriminatory, it said. The mode of commercial agreement has been left to the telecom service providers.
Trai had recommended for an amendment in the licence conditions to allow service providers to share their backhaul from base trans-receiver station (BTS) to base station controller (BSC). It has noted that such a sharing is permitted on optical fibre as well as radio medium at certain ‘nodes’.
DoT, in its note to the Telecom Commission, has added that no such amendment was required as the licence conditions already allowed operators to share backhaul from BTS and BSC. “For this, there is no need to amend licensing conditions of UASL clause number 33 (ii) and CMTS clause number 34 (ii). However, no sharing of spectrum at access network side is permitted,” the DoT communique said.

News

SEBI seeks clarifications from proposed IPOs of 25 firms including Reliance Infratel, JSW Energy and Oil India.

Sun Pharma gets USFDA approval to market generic Demadex® Tablets

DLF plans to invest about US$5bn to build more than 25,000 hotel rooms in next 7-8 years.

The Dabur Group is reportedly evaluating a range of options for Dabur Pharma including a sellout.

RIL, ADAG Group among 37 in race for developing 8 airports in Andhra Pradesh.

BSNL has shortlisted six companies – GTL Infra, Quipo, Essar, XL Telecom, TVS and Aster Teleservices – to hire cell towers.

Mahindra Group plans to enter film production.

An interim order by the Supreme Court on Wednesday that sugar mills in Uttar Pradesh pay growers Rs 115-123 a quintal led to a fall in shares of companies based in the Northern State

Biggest ever annual plan for Railways announced

The Minister of Railways, Shri Lalu Prasad on Tuesday announced biggest ever annual plan for the Railways. The Ministry of Railways proposes to invest Rs 37,500 crore, which is 21% more than the previous year.
The plan size includes a total budgetary support of Rs 7874 crore including Rs 774 crore to be provided from the Central Road Fund. The annual plan will have Internal and External Budgetary Resources (IEBR) funding of 79%.
Under this plan, priority has been given to enhancement of rail capacity, modernization of the railway, throughput enhancement on High Density Network routes, traffic facility works and expansion and development of the network. Construction of flyovers, bypasses, Intermediate Block System (IBS), upgradation of goods shed etc, traffic facilities works will be completed on priority.
The outlay for doubling works has been increased to Rs 2,500 crore, traffic facility works to Rs 984 crore and an outlay of Rs 1535 crore has been proposed for projects under implementation by Rail Vikas Nigam Limited (RVNL). Provision of Rs 1730 crore for new lines, Rs 2489 crore for gauge conversion, Rs 626 crore for electrification and Rs 650 crore for Metropolitan Transport Projects has been made.
On safety related plan heads, provision has been made for Rs 3600 crore for track renewals, Rs 1520 crore for signal and telecommunication works, Rs 700 crore for Road Over Bridges and Road Under Bridges and Rs 600 crore for manning of unmanned level crossings.
The Railway Minister also sought additional funds to the tune of Rs 1712 crore from Ministry of Finance for national projects of Udhampur-Srinagar-Baramulla, Jiribam-Imphal Road, Dimapur-Kohima, Azra-Byrnihat and Kumarghat-Agartala new line, Bogibeel Rail-cum-Road Bridge and Lumding-Silchar-Jiribam, Rangia-Murkongselek gauge conversion.
During the year 2300 km broad gauge lines are likely to be completed. The target for construction of broad gauge lines in 2008-09 is 3500 km. The construction of new line between Kakapore and Badgam in the Kashmir valley has already been completed and the remaining portion in the valley will be completed in 2008-09.
Expressing gratitude to the Hon’ble Prime Minister for deciding the funding of National Projects in the North Eastern region, through 25% funds from Railways Gross Budgetary Support and balance 75% as an additionality, he proposed to create a non-lapsable Northeast Rail Development Fund to expedite track construction process in this region.

37 FDI proposals in broadcasting sector cleared

Thirty-seven FDI proposals pertaining to the information and broadcasting sector were approved by the Foreign Investment Promotion Board during 2007, Mr P.R. Dasmunsi, Minister of Information and Broadcasting, told the Lok Sabha on Tuesday.
The Minister also informed the House that the tax review proposals received by the Ministry included the Multiplex Association of India’s demand to bring down customs duty on imported equipment such as xenon bulbs, cinema digital and analogue sound processors. It has also sought tax relief for small budget films. The Government has been urged to bring the rate of depreciation, currently at 15 per cent for plant machinery and furniture, and 10 per cent for building, at par with the 40 per cent applicable to public transport and tourist taxis.
The Government proposes to set up 93 All India Radio transmitters and 41 Doordarshan transmitters during 2007-2008 and 2008-2009. It has also planned 100 low power transmitters to be up in the North-Eastern States, the Minister informed the House. The estimated cost for the AIR is Rs 182 crore and for Doordarshan is Rs 198.37 crore.

Indian Pharmaceutical Industry: In the pink of health

R&D is a fast evolving segment of Indian pharmaceutical industry. Innovation, international partnerships, collaborations, inflow of funds, clinical trials partnerships and co-development deals are changing the landscape of R&D. However, the potential is far greater and to aid the harnessing of this potential, the Times Group organised the ET Bio-Pharma Development Summit in Mumbai.
Dr Swati Piramal, director, Nicholas Piramal, was the chairperson of the forum, with the keynote speaker being Dr Ted Bianco, director, Wellcome Trust. The highlight of the event was the special address delivered by Kapil Sibal, union minister for science and technology and earth sciences.
Dr Piramal delivered the opening address to a house full of delegates. She highlighted the need of innovation in R&D and how India can excel in the same. Her address was followed by an interesting speech made by Dr Ted Bianco, director, Wellcome Trust, UK.
He provided an insight into early stage R&D through translational research funding and management of intellectual property arising thereafter. Then, it was time for Mr Sibal’s speech. He termed the new disease pathogens the terrorists of the 21st century and said there was an urgent need to safeguard public health.
He also made a strong case for growth of R&D in case of Indian pharmaceutical industry and how it could be harnessed in India to provide affordable cure. The minister stressed on the need for a forward-looking drug policy and government subsidies to boost innovation in the country.
Malvinder Singh, MD and CEO, Ranbaxy Laboratories, the speaker for the second session, gave a address on the future of generics. He informed that the global bio-generic industry was worth $60 billion today. Indian pharma industry can capitalize on this opportunity and grow to become $100 billion industry in the coming years. He pointed out that having 50 NCEs being produced by 15-20 companies is not economically sustainable.
Industry needn’t duplicate infrastructure as it would be feasible to unite through partnerships and collaborations, he said. He also stressed upon the need for an enabling regulatory framework, which moves away from the price control regime.
He pointed out that at present, R&D done internally by the companies alone qualified for weighted deduction under section 35(2AB) of Income tax act. He urged that the government to facilitate innovation by extending this benefit to outsourced R&D as well. The third session was a panel discussion providing an HR perspective on strategies for human resource management.
Dr Ganesh Shermon, partner & country head, human capital advisory services, KPMG India, Rajorshi Ganguli, director, HR, Dr Reddy's Laboratories, Sanjay Muthal, president, HR, Nicholas Piramal and Shiv Raman Dugal, chairman, Instiute of Clinical Research of India, were the distinguished speakers forming the panel. Various strategies needed to drive excellence in research and cross-functional areas were discussed.
The next session emphasising on what's next in Indian bio-pharmaceuticals was moderated by Utkarsh Palnitkar, national head of health and science industry, Ernst & Young, India. One of the speakers - Dr Ramani Aiyer, chief scientific officer, Actis Biologics - highlighted the new trends in bio pharma. He also delved into the concepts of angiogenesis, gene therapy, recombinant proteins and follow-on biologics .
Kavita Khanna, president, Bharat serums & Vaccines, was the next speaker in the session and gave her views on the way forward in public-private partnerships. She presented a case study on 'Kala Azaar' (Leishmaniasis), to explain how public private partnership was being proposed to eradicate the disease by 2010. Adnan Naseemullah, a student of university of California, Berkeley, was one of the invitees to the session. He spoke about the growth and development of the Indian pharmaceutical industry and highlighted the variations in research strategies followed by the industry.
The post lunch session was a two-speaker special session held by Dr S K Gupta, dean and director, Institute of Clinical Research of India (ICRI) and Dr Anand Bidarkar, VP, Siro Clinpharm India. They delved into the various clinical research strategies to maange research and development in India.
Dr Gupta provided the statistical data on the infrastructure which is available for clinical research in India and how can India emerge as a world-class destination for conducting quality clinical research. Dr Bidarkar explained how MNCs were taking advantage of Indian clinical R&D to shorten their drug development timelines.
He also highlighted how Indian companies could look at outsourcing to overcome their competitive disadvantages.
The concluding session of the day was the CEO round table. Presided by Dr Piramal, with Pratibha Pilgaonkar, CEO, Rubicon Research, Dr Naveen Rao, MD, Merck India and Dr Ajit Dangi, president and CEO, Danssen Consulting, being the other participants in the discussion.
Dr Piramal posed various questions to the panel relating to scope of R&D in India, possibility of doing a Nano in pharma and cost of innovation. Dr Naveen Rao, MD, Merck India, expressed the need for big pharma companies to look at India and its cost-effective resources. He also stated that partnerships offered an attractive method of risk and reward sharing.
Ms Pilgaonkar pointed out that SMEs in Indian pharma industry at an early stage need the support and funding from big players in the industry to become agents of research and innovation. Dr Dangi stressed on the need for world class intellectual property (IPR) regime, lowering of transaction costs and a liberal price policy in the country.
Strengthening of the infrastructure of Drug Controller General of India, approval of various protocols for clinical trials, framing of laws on cloning and neutraceuticals were other issues discussed by the panel discussion. Dr Piramal projected that by 2010, India would have discovered at least five new drugs . Her personal bet on the cost of innovation of a new drug in India stood at less than $50 million.
The session concluded after a question and answer session where the audience put forth their questions to the panelists.

Corporate Announcements

Listing of equity shares of Gujarat Glass Ltd
Trading Members of the Exchange are hereby informed that effective from February 28, 2008, the equity shares of Gujarat Glass Ltd (Scrip Code: 532949) are listed and admitted to dealings on the Exchange in the list of 'B1' Group Securities.

Listing of equity shares of Manjushree Extrusions Ltd
Trading Members of the Exchange are hereby informed that effective from February 28, 2008, the equity shares of Manjushree Extrusions Ltd (Scrip Code: 532950) are listed and admitted to dealings on the Exchange in the list of 'B1' Group Securities.

Sun Pharma gets USFDA approval to market generic Demadex® Tablets
Sun Pharmaceutical Industries Ltd has announced that USFDA has granted final approval for the Company's Abbreviated New Drug Application (ANDA) to market its generic version of Hoffman la Roche's Demadex®, torsemide tablets.These generic torsemide tablets are therapeutic equivalents of hoffman La Roche's Demadex® Tablets and include four strengths: 5 mg, 10 mg, 20 mg and 100 mg. These strengths of torsemide tablets have annual sales of approximately USD 35 million in the US.Torsemide is a diuretic, indicated for the treatment of edema associated with congestive heart failure, renal disease, or hepatic disease. Use of torsemide has been found to be effective for the treatment of edema associated with chronic renal failure. Torsemide is also indicated for the treatment of hypertension alone or in combination with other antihypertensive agents.The Company expects to reach the market shortly with these products.

NTPC - Updates
National Thermal Power Corporation Ltd (NTPC) has informed BSE that the Company has signed a loan Agreement of Euro 68.56 million with the Nordic Investment Bank (NIB) on February 15, 2008, a multilateral financial institution owned by the Nordic and Baltic countries, to part finance the capital expenditure of its projects. The loan has a maturity of 12 years including availability period of 3 years. The loan carries a floating rate of interest linked to EURIBOR and is without sovereign guarantee. This is the first loan that NTPC has tied up with NIB.

Bharat Forge to raise Rs 300 Crores through a Preferential offer to the Promoters
Bharat Forge Ltd has informed BSE that the Board of Directors of the Company at its meeting held on February 27, 2008 approved a Preferential Issue of Convertible Warrants subject to requisite approval by the Shareholders and the applicable guidelines to the Promoters Group.Pricing of the issue will be governed by the Guidelines for Preferential Issue in terms of the applicable SEBI Guidelines.The Company will raise Rs 300 crores through the issue of these convertible warrants. The proceeds will form a part of the corpus that will serve a two-fold purpose of funding the Company's ongoing organic growth programme in the capital goods and non auto space as well as enhancing the Promoters stake in the Company.

Bharat Forge Ltd has informed BSE that the Board of Directors of the Company at its meeting held on February 27, 2008, subject to the required approvals being obtained, including approval of the Members of the Company and subject to applicable guidelines, has approved the following:1. Issue of convertible warrants, to Promoters Group of an aggregate value of Rs 300 crores; and2. Borrowing by way of External Commercial Borrowing / Rupee Term Loan of upto Rs 400 Crores.

Market Prediction

GLOBAL MARKET IS MIXED MARKET COULD OPEN IN NEGETIVE NOTE BUT LONG POSITION CAN BE BUILD UP FROM 5220 AND ABOVE WITH FINAL S L 5200 WITH A TARGET OF 5300-5340,SECTOR TO BE WATCH OUT POWER EUIPMENT LIKE SIMENS AND ABB,BHARTI AND ICICIBANK IS HAVING SHORT POSITION SO SHORT COVERING EXPECTED,BUDGET IS ALSO KNOCKING SO BE CAUTIOUS IN ROLL OVER POSITION UPTO 72-75% ROLL OVER IS DONE,15-20% MORE EXPECTED .

Reducing Industry Costs with Gold

It is easy to overlook the critical role gold plays in important manufacturing industries, but gold has many special technical attributes that mean it is the best, if not the only, material for certain practical applications. In recent years over 400 tons of gold has been used each year in vital industrial uses, about 12% of annual demand. In this article we will take a look at the use of gold in four key application areas: automotive pollution control, the electronics industry, in medicine and in emerging uses in nanotechnology.

The automotive industry is no stranger to precious metals. According to catalyst manufacturer Johnson Matthey, 4.24 million oz. (119 tons) of platinum was used in 2007 for automotive emissions control catalysts. Similar amounts of its sister metal palladium are used in this application too. This precious metal containing catalyst sits in the exhaust system of the vehicle, and through a reaction with the catalyst, the harmful gases of carbon monoxide, hydrocarbons and oxides of nitrogen are converted to the safe products carbon dioxide, water and nitrogen. Similarly, diesel engines have a diesel oxidation catalyst to remove pollutants which in this case includes particulate matter.
For gold, use by car manufacturers up to now has been limited to the on-board electronic items. These contain a small amount of gold which is critical to the reliable and efficient functioning of the microchips and contacts found in a car's ABS anti-lock braking system and safety air bags.

Replacing Platinum with Gold
Yet gold is currently around half the price of platinum. If a way could be found to at least partially replace platinum with some gold in automotive catalysts, huge potential cost savings could be realized by the industry. Following the announcement in 2007 by a silicon valley-based startup company called Nanostellar Inc, that it had developed a break-through diesel oxidation catalyst material that contains platinum, palladium and gold, it looks like that opportunity is now available on diesel engined vehicles.
Diesel engines have long been identified as major polluters, especially when compared to the gasoline engines and gas-electric hybrid vehicles. This is one of the major reasons why we don't see many diesel powered cars in the US, even though diesel engines have 20% to 30% better fuel efficiency than gasoline engines and better fuel efficiency than same-size gas-electric hybrids during highway driving. The implementation of 2007 diesel emissions control regulations in the U.S. promises to clean up diesel engines and has resulted in strong interest by automotive manufacturers to bring diesel cars to the U.S. On the other hand, 55% to 60% of European passenger vehicles are powered by modern, clean diesel engines.
A big cost concern in diesel emissions control remains the use of platinum. In recent years, the industry has introduced the use of palladium to partially replace the four-times more expensive platinum. Nanostellar claims that its material, called NS Gold, enables diesel engine manufacturers to reduce noxious emissions by 40% over platinum only products. This claim is important even with the recent increase in gold prices as platinum prices also continue to rise and the spread between platinum and gold prices continues to widen (see the illustration below).

Replacing Platinum with Gold
Yet gold is currently around half the price of platinum. If a way could be found to at least partially replace platinum with some gold in automotive catalysts, huge potential cost savings could be realized by the industry. Following the announcement in 2007 by a silicon valley-based startup company called Nanostellar Inc, that it had developed a break-through diesel oxidation catalyst material that contains platinum, palladium and gold, it looks like that opportunity is now available on diesel engined vehicles.
Diesel engines have long been identified as major polluters, especially when compared to the gasoline engines and gas-electric hybrid vehicles. This is one of the major reasons why we don't see many diesel powered cars in the US, even though diesel engines have 20% to 30% better fuel efficiency than gasoline engines and better fuel efficiency than same-size gas-electric hybrids during highway driving. The implementation of 2007 diesel emissions control regulations in the U.S. promises to clean up diesel engines and has resulted in strong interest by automotive manufacturers to bring diesel cars to the U.S. On the other hand, 55% to 60% of European passenger vehicles are powered by modern, clean diesel engines.
A big cost concern in diesel emissions control remains the use of platinum. In recent years, the industry has introduced the use of palladium to partially replace the four-times more expensive platinum. Nanostellar claims that its material, called NS Gold, enables diesel engine manufacturers to reduce noxious emissions by 40% over platinum only products.
The potential to use gold in this type of application has long been considered, but until now the technical challenges concerning catalyst durability have prevented gold's use. That is, the gold nanoparticles used in the catalyst tend to mould together when exposed to the elevated temperatures in the exhaust system. The result? The catalyst efficiency falls off dramatically. Nanostellar has a unique catalyst technology to prevent that process from occurring.

Rational Design
The interesting question is how a startup company with limited funds was able to leapfrog an industry that annually spends hundreds of millions of dollars on emissions research. Nanostellar believes the answer is a process called Rational Design. This method of working combines computational nanoscience and advanced synthetic chemistry to speed up the pace of development for nano-engineered materials. It is a dramatic departure from traditional materials research which is an empirically based trial-and-error method, consuming significant laboratory work and testing resources with no assurance of success.
Nanostellar is receiving endorsement from a wide range of important quarters. To begin with, acknowledging the transformational nature of this technology, The World Economic Forum recently selected Nanostellar as a 2008 Technology Pioneer and invited it to attend the 2008 annual meeting of the World Economic Forum in Davos, Switzerland. Previous Technology Pioneers have included Google and Napster. The gold mining industry has also backed the company's efforts. The World Gold Council, a marketing organisation funded by the world's leading gold mining companies has invested in Nanostellar joining other existing equity investors, which include 3i, Khosla Ventures and Monitor Ventures, among others. The Council is providing the company with significant marketing and business development support, designed to increase uptake of NS Gold by OEMs. Within the automotive industry Nanostellar has also received very positive encouragement and is currently pursuing the commercial application of the technology with a number of end-users.
With this encouraging support from investors, commentators and industry, the omens look good for Nanostellar and for gold's role in automotive emission control.

HIGHLIGHTS OF RAILWAY BUDGET 2008-09

2007-08: Review of Performance and Revised Estimates
· Double digit growth in traffic earnings maintained in first nine months
· Growth in passenger earnings 14%. Growth in originating passengers 5.6% - better than budgeted growth.
· Incremental loading of 43 million tonnes (MT) in first nine months; likely to be 62 MT for the year.
· Revised target for loading 790 MT. Expected growth in goods earnings 14%
· In Revised Estimates Goods Earnings, Passenger Earnings, Sundry and Other Coaching Earnings fixed at Rs 47,743 cr, Rs 20,075 cr, Rs 2637 cr and Rs 2,200 cr respectively.
· Gross Traffic Revenues at Rs 72,755 cr - 16% higher than the previous year and 2% higher than the Budget Estimates.
· Ordinary Working Expenses register savings of Rs 966 cr.
· Operating Ratio likely to improve from the budgeted 79.6 to 76.3 per cent –best in last four decades.
· Return on Capital – an all time high of 21 per cent.
· Cash Surplus before dividend expected to be a record Rs 25,000 cr.
· Net Revenue expected at Rs 18,416 cr and surplus after payment of dividend expected at Rs 13,534 cr.
· Likely year end fund balances Rs 20,483 cr – 27% more than budgeted target.

2008-09
Initiatives in Passenger Business
Improvements in ticketing
· Termination of queues at ticket counters targeted in two years
· Increase in UTS counters to to 15,000 and ATVM s to 6000 over two years
· Ticket booking on mobile phones.
· Extension of Jansadharan Ticket booking seva
· E-ticket for waitlisted passengers
· Ticket on ‘Go Mumbai Card’ in Mumbai Suburban.
Passenger Amenities
· Provision of on-line coach indication display board; on-line train arrival departure information board; on-line reservation availability information board.
· Provision of discharge-free green toilets in all 36,000 coaches in XI Plan Period at a cost of about Rs 4,000 cr.
· LHB design coaches for all Rajdhani and Shatabadi trains over next few years.
· Provision of LHB coaches with stainless steel bogies in Mail/Express trains.
· Special stress on cleanliness - on-board cleaning in passenger trains.
· Extending the public address system in passenger coaches of select mail/express trains.
· Increase in the height of a number of platforms;
· Provision of platform shelters at all D category stations.
· Provision of foot-over bridges at all high-level platforms.
· Increase in length of 30 more platforms.
· Provision of multi-level parking, lifts and escalators at major stations.
Concessions
· Senior citizen concession for women enhanced to 50% from existing 30%.
· Free MST to girl students up to graduation level in place of 12th standard and for boys up to 12th standard in place of 10th standard
· Ashok Chakra Awardees also to be provided the facility of traveling in Rajdhani and Shatabadi trains on card passes issued to them.
· AIDS patients traveling to nominated ART centres for treatment to be given 50% concession in second class passenger fares.
Initiatives in Freight Business
· Target for loading kept at 850 Million Tonnes (MT) in 2008-09 – incremental loading of 60 MT or more, consecutively for the fourth year.
· Blue Print prepared for High Density Network: Phased execution of capacity augmentation including dedicated freight corridors, doubling, third and fourth lines, bye passes, flyovers, automatic signaling works etc over next 7 years at cost of about Rs 75,000 cr
· Coal routes: Most routes to be made fit for 25t axle load trains. Focus on throughput enhancement works serving important coal links- many new works proposed.
· Port Traffic – Mission 300 MT: Top priority being given to port rail connectivity projects.
· Steel Udyog – Mission 200 MT: targeted traffic of 200 MT by 2011-12. New and dedicated iron ore routes to be upgraded/constructed for 25-ton to 30-ton axle load trains. Throughput enhancement works of doubling and trebling of lines also being undertaken.
· Cement Industry – Mission 200 MT: targeted traffic of 200 MT by 2011-12. New lines, throughput enhancement through gauge conversion and extension of lines to serve cement clusters in various regions.
· Container Business- Mission 100 MT : Increased investments expected in container rolling stock and ICD s by CONCOR and other operators
· Dedicated Freight Corridor: Work on Eastern freight corridor from Ludhiana to Dankuni (Kolkata) and Western freight corridor from Delhi to JNPT to start in 2008-09.
· Procurement of Rolling stock: All-time high of 20,000 wagons, 250 diesel and 220 electric locomotives to be manufactured.
· New design wagons of high capacity to be produced.
· New Wagon Leasing Policy and new Wagon Investment Scheme formulated to increase availability of wagons in the system.
· Discounts for development of Bulk and non-bulk goods terminals
· Railways to mark presences in Door to Door Logistics services
· Empowered Strategic Business Unit to be set up at the Apex Level- single window system for emerging business opportunities and client support
Planning for Railways new Profile
· Vision 2025 document setting the road map for coming 17 years – customer centric and market responsive strategic initiatives and action plans
· Information Technology Vision 2012- radical changes in technology and processes through seamless integration of IT applications on a common platform with focus on improvement in operational efficiency, transparency in working and better services to the customers
· Multi-Departmental Innovation Promotion Group at Apex Level
Other Initiatives
· Public Private Partnership schemes to be launched for attracting investment of Rs 1,00,000 cr over the next five years for developing world class stations, rolling stock manufacturing, multi modal logistics parks, running of container trains etc
· Commercial use of Railway land by Rail Land Development Authority to give boost to Railway Revenues.
Railway Security
· 5700 vacant posts of constables and 993 vacant posts of sub-inspectors to be filled up. 5% posts of constables and 10 % of sub-inspectors in the above vacancies reserved for women.
· 973 additional posts created.
· Integrated security plan drawn up to strengthen railway security through installation of CCTV s, metal detectors, baggage screening system, explosives detection and disposal system, etc.
Railway Safety
· Rail accidents have reduced remarkably despite substantial increase in the gross traffic volumes.
· Multi-pronged scheme to strengthen railway safety through automatic devices like, anti-collision device, on line monitoring of rolling stock through acoustic bearing detectors and wheel impact load detector, EOTT device, digital ultrasonic flaw detecting machine, etc.
· Fire resistant material to be used in coaches.
· More ROBs/RUBs to be constructed at Railways’ initiative; PPP initiatives to be explored for construction of ROBs/RUBs.
· Unmanned level crossings at busy sections to be manned on a fast track basis.
Social Welfare
· One time exercise of appointing Railway Porters working on stations as gangmen and to other group ‘D’ posts after due screening
· Mother- Child Health Express: to be run on a pilot basis at concessional fares in collaboration with Rajiv Gandhi Foundation for providing medical facilities to mother and child
Special Recruitment Drives
· 99% identified backlog vacancies for SCs/STs filled up due to special campaign launched since 2004.
· Appointment of candidates from SCs/STs/OBCs exceeded their respective quotas in group D appointments
· Minorities welfare cells to be opened in Railway Board and in zonal railways for promoting minorities welfare.
· Urdu also being introduced as a medium of examination for group D posts in states where Urdu is the second official language.
Staff Welfare
· Per-capita contribution to Staff Benefit Fund to be increased by ten times from Rs 35 to Rs 350 for 2008-09.
· Previous service tenure of employees working earlier in any public sector enterprise, autonomous body or any other agency under State Government or Central Government, whose prior service has been counted for pensionary benefits, will be eligible for post-retirement complementary passes as per the norms being set.
· 13 new works at a cost of Rs 101 cr sanctioned for improving health services.
· Northern Railway Central Hospital at Delhi to be made centrally air-conditioned.
· 2 divisional hospitals at Jaipur and Hubli to be upgraded to central hospitals.
· A new divisional hospital at Ranchi, and an OPD block at ICF to be constructed
Passenger Services
· 10 new Garib Raths to be introduced.
· New Trains : 53 pairs
· Extension of Trains : 16 pairs
· Increase in Frequency : 11 pairs
· Special train from Anandpur Sahib and Patna Sahib to Gurudwara Sachkhand Sahib during tercentenary function of Shri Guru Granth Sahib Gurta Gaddi.
· Special train between Pune and Delhi for Commonwealth Youth Games being held in Pune from 12th October to 18th October 2008.
· 300 additional services in Mumbai suburban
Annual Plan 2008-09
· The Annual Plan of Rs 37,500 cr is the largest ever Annual Plan so far
Ø Support of Rs 7,874 cr from General Revenues.
Ø Internal Resources of Rs 21,126 cr.
Ø Extra Budgetary Resources of Rs 8,500 cr.
· Thrust areas of Annual Plan include activities relating to throughput enhancement of high density network routes, improvement and expansion of traffic facility and network, construction of flyovers, bypasses, IBS, upgradation of goods shed.
· Outlay on project Planheads : New Lines Rs 1,730 cr, Gauge conversion Rs 2,489 cr, Electrification Rs 626 cr, Metropolitan Transport Projects Rs 650 cr.
· Outlay on Safety related Planheads: Track renewal Rs 3,600 cr, Bridges Rs 600 cr, Signal & Telecommunication works Rs 1,520 cr, Road over/under bridges Rs 700 cr and manning of unmanned level crossings Rs 600 cr.
· Outlay for Rolling Stock : All time high of Rs 11,045 cr
· Outlay for Passenger Amenities Rs 852 cr – the highest so far.
· Important Targets : New Lines 350 kms, Gauge Conversion 2150 kms, Doubling 1000 kms.
· National Projects : Funds to be made available by Ministry of Finance based on the actual progress of works during the course of the year. Rs 1,712 cr asked for from Ministry of Finance.
· The number of National projects increased from 4 to 8.
· MUTP Phase II to be started at a cost of Rs 5000 cr, financed jointly by Railways and State Government of Maharashtra, with multi-lateral funding
Other Important Announcements
· ‘Ordinance for Land Acquisition Act’ to be passed for expeditious acquisition of land for important railway projects on the pattern of NHAI Act.
· Indian Rail Bijli Company Ltd.- a joint venture with NTPC for 1000 MW thermal power plant at Nabinagar District of Aurangabad, Bihar.
· A new rail coach factory to be set up in Kerala.
· A new wagon re-construction unit to be set up at Garkha in Chapra District.
· Modernization and development of Jamalpur Workshop
· Modernization of Lilluah workshop , Perambur loco workshop, Ajmer loco workshop
· Railways to takeover Mokama and Muzaffarpur wagon factories.
Budget Estimates 2008-09
· Freight loading target: 850 million tonnes, freight output: 550 BTKM s.
· Revenues in Freight, Passenger, other Coaching and Sundry other earnings to be Rs.52,700 cr, Rs.21,681 cr, Rs.2,420 cr and Rs 5000 cr respectively.
· Gross Traffic Receipts to be Rs.81,901 cr – an increase of 12.6 per cent over RE.
· Ordinary Working Expenses to be at Rs.50,000 cr.
· Cash surplus before Dividend to be – Rs.24,783 cr after making an ad-hoc provision of nearly Rs 5,000 cr for anticipated recommendations of the VI CPC.
· Operating Ratio is expected to be 81.4 % – even after impact of ad hoc provision for VI Pay Commission recommendations
Proposals relating to freight rates and passenger fares
Passenger
· Reduction in passenger fares.
· One rupee discount per passenger for fares up to Rs. 50 in Non Suburban Second Class (ordinary and mail /express)
· 5% discount across the board for passenger fares beyond Rs. 50 for all Non Suburban Second class (ordinary and mail/express ).
· Increase in discount for travel in new design high capacity reserved coaches
· Rationalization of AC class fares completed.
· Relativity index of fares for AC-I class reduced from 1150 to 1000 and from 650 to 600 for AC-II tier. Reduction in fare:
o AC I 7%
o AC II 4%
o For popular trains and during peak period the above reduction will be half as in the previous year
Freight
· No across the board increase in freight rates.
· Highest class 210 reduced to 200 concluding rationalization process.
· 5% reduction in freight rates for Petrol and Diesel
· Fly ash- reduction in classification from class 140 to 120; 14 % reduction in freight rate .
· Liberalization of Traditional Empty Flow direction incentive scheme
· 30 % discount on entire traffic in place of incremental traffic booked from goods shed
· Some commodities excluded
· Increase in discount on incremental traffic booked from private sidings from 30% to 40%
· Composite base freight rate to be charged for all unclassified commodities in place of highest class:
Tank Wagons Class 200
Flat Wagons Class 180
Open (including Hopper) Wagons Class 160
Covered Wagons Class 150
· 6% freight concession for traffic booked from other states for stations in North Eastern states.
· Special lump sum rates for Merry-Go-Round (MGR) services for customers who will provide track, OHE and terminals at both ends.

Cheap Palm Oil May Overtake Soy on China Crop Loss, India Sales

Palm oil, the world's most-used cooking oil, is also the cheapest, a discrepancy that won't last long as demand rises across Asia's biggest countries.
An ingredient in curries, stir-fries and Skittles candy, Malaysian palm oil costs 17 percent less than soybean oil on the Chicago Board of Trade. Tobin Gorey, a commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney, said the two may soon be even money, raising the prospect of at least a $1.7 million profit from a $10 million investment.
Rising incomes mean billions of people in Asia's developing economies seek palm oil for fried and processed foods, according to the U.S. Department of Agriculture. Crude oil at $100 a barrel is boosting demand for alternative fuels such as diesel from vegetable oil. As consumption rises, supply in China may drop after the worst snowstorms in five decades damaged crops in January, the government reported.
``We may have a case of mass shortage of vegetable oil in China,'' said Rudolphe Roche, a manager at Schroders Plc's $6 billion agricultural commodities fund in London. ``This means they will continue to import from the rest of the world.'' Palm oil, produced in Malaysia and Indonesia, will benefit the most because its proximity to China lowers shipping costs, he said.
Rising prices will increase expenses at Nissin Food Products Co., Japan's biggest instant-noodle maker, and increase profits at Kuala Lumpur-based Sime Darby Bhd., the world's largest publicly traded owner of palm plantations. About 36 percent of the world's cooking oil comes from crushed palm kernels, more than any other plant, USDA data show.
``Ninety-three percent of all the palm oil in the world is going to food demand,'' William Doyle, chief executive officer of fertilizer maker Potash Corp. of Saskatchewan Inc., said in a Feb. 19 interview. ``It's enormously powerful, and we don't see this backing off.''

The Precedent
The last time palm oil was this cheap, in April 2007, prices rallied for two months because of increasing demand, gaining 38 percent to 2,855 ringgit ($889) a metric ton on the Malaysia Derivatives Exchange to reach parity with Chicago prices. Contracts for May delivery ended at 3,698 ringgit a ton (52 U.S. cents a pound) on Feb. 22 in Malaysia. May soybean oil finished at 63.02 cents a pound on the CBOT.
``There is no reason why the price of soybean oil and palm oil cannot be the same,'' said Edgare Kerwijk, chief financial officer for Biox Group BV in Rotterdam, which has put on hold plans for three biodiesel projects in the Netherlands and the U.K. due to higher prices. ``The discount will narrow'' for palm oil, he said.
U.S. manufacturers will increase consumption of soybean oil for energy by 22 percent to 3.4 million pounds in the 2007-2008 marketing year, the USDA forecasts. The total equals 16 percent of U.S. use.

Food Inflation
Soaring food prices are fueling inflation. China's consumer-price gains accelerated to 7.1 percent in January, the fastest pace in more than 11 years, the statistics bureau said Feb. 19. U.S. inflation quickened to 4.3 percent in January from 4.1 percent in December, the Labor Department said Feb. 20.
China's January snowstorms and rains, the worst in 50 years, affected as much as 48 million mu (7.9 million acres) of rapeseed crops, almost half the total area planted, the China National Grain and Oils Information Center said Feb. 14.
China, the biggest annual buyer of cooking oils, raised palm oil imports 18 percent in January to 360,000 metric tons, compared with a year earlier, according to customs figures. India boosted imports 75 percent to 366,353 tons that month, and imports of all cooking oils may gain 15 percent to 5.4 million tons in the year ending Oct. 31, according to a Bloomberg News survey of six traders and analysts.

U.S. Imports
``With the strong demand coming from the substitution effect this year, the discount should narrow further from here,'' said Ben Santoso, a plantations analyst at the brokerage arm of DBS Group Holdings, Singapore's largest bank. He said palm oil may reach the same level as soy.
Even the U.S., the world's largest soybean grower and exporter, is buying more palm oil. Soyoil is hydrogenated in some foods to make them last longer on store shelves, a process resulting in trans-fats that may raise the risk of heart disease, according to the Food and Drug Administration.
``Trans-fats are a big reason for more palm oil imports,'' Anne Frick, a senior oilseed analyst for Prudential Financial Inc. in New York, said in a Feb. 20 e-mail.
U.S. palm oil imports may rise 13 percent to 790,000 tons in the 2007-2008 marketing season after a 17 percent gain the previous year, according to the USDA.

Less Momentum
To be sure, world production of palm oil will gain 10 percent to 40.6 million tons in the year ending Sept. 30, the USDA estimates. To ABN Amro Holding NV, based in Amsterdam, that's a sell signal.
``We've turned bearish on the palm oil sector,'' said Nirgunan Tiruchelvam, an analyst at ABN Amro Asia Securities in Singapore.
Food consumption is driving the higher prices. Nisshin Oillio Group Ltd., Japan's biggest producer of edible oils, started selling palm-based product for home use on Feb. 18. The company expects sales of imported palm oil to rise 10 percent to 20 percent this year, said spokesman Yasuko Hoshino.
``Palm oil is conquering new markets,'' said Dorab Mistry, director at Godrej International, India's biggest vegetable oil importer, who has traded the commodity for more than 30 years.

Market Around the Globe

Indian equities are among the worst performers in the global markets since January 2008. Among the major markets only Hong Kong markets have seen as much negative growth this year as the benchmark indices Nifty and Sensex.Analysts feel the FIIs’ withdrawal is a major factor for the negative performance of the Indian markets. They also attribute the fall to corrections of other major markets in the last quarter of 2007. The best performing markets this year have been the markets in Middle East, Latin America and Africa. The 50-share S&P CNX Nifty index of the NSE registered a year-to-date negative growth of 17.91 per cent while BSE Sensex was down by 15.67 per cent; only Hong Kong’s market has seen similar erosion in value, Hang Seng has lost 17.25 per cent.

Romanian, Vietnamese and Croatian market top the list of worst performing markets ahead of Nifty, Hang Sheng and Sensex.
Even among the BRIC nations – Brazil, Russia, India and China – India was the worst performer. While Brazil gave out a positive return of 5.30 per cent, China’s Shenzhen dipped 2.6 per cent and Russia-RTS declined 9.20 per cent.

Muscat was the best performer in 2008 so far after it scored a return of 13.9 per cent, followed by Mauritius 11.2 per cent, Nigeria 11.01 per cent and Kuwait 10.8 per cent.

The US markets were better off than Asian markets with S&P 500 index reflecting a negative growth of 7.85 per cent, Dow Jones Industrial Average of 6.66 per cent and Nasdaq Composite index of 13.16 per cent as it faces the scare of big write-downs by the banks due to the sub prime lending as well as chances of the world’s largest economy entering a phase of economic recession.

FIIs net sellers
FIIs have been net sellers so far this year and have off loaded shares worth $2.86 billion (Rs 11,539 crore) from the Indian market. Last year the FIIs had invested $17.23 billion in the Indian market.
“The fall appears sharper because Indian market is the last where the FIIs pulled out while it began to happen earlier elsewhere,” said Mr Nipun Mehta, Co-founder & CEO of Unitis Tower Wealth Advisors, a private wealth management firm. “Secondly in the last quarter of 2007 Indian market didn’t fall rather gained while all other markets had fallen after the sub-prime crisis reports began to surface.”

Best performance
Muscat was the best performer in 2008 so far after it scored a return of 13.9 per cent, followed by Mauritius 11.2 per cent, Nigeria 11.01 per cent and Kuwait 10.8 per cent.
Even, the Karachi 100 index has performed better and has shown a positive growth of 5.92 per cent this year so far despite the political uncertainty in the country in recent times.
Japan’s Nikkei representing the second largest market in the world has shown a negative growth of 7.85 per cent. German’s Dax was down 14.21 per cent, French’s CAC index has gone down by 12.62 per cent and UK’s FTSE dipped by 9.53 per cent.

US better off
The US markets were better off than Asian markets with S&P 500 index reflecting a negative growth of 7.85 per cent, Dow Jones Industrial Average of 6.66 per cent and Nasdaq Composite index of 13.16 per cent as it faces the scare of big write-downs by the banks due to the sub prime lending as well as chances of the world’s largest economy entering a phase of economic recession.

R-Power bonus shares at 3:5

Reliance Power Ltd, the company, which raised Rs 11,000 crore last month in India's biggest initial public offer (IPO), will issue free shares in a ratio of three shares for every five held to compensate investors for the slump in the stock price after listing.

The free shares won’t be given to Chairman Anil Ambani and the founder group, including Reliance Energy Ltd, holding a combined 90 per cent stake.

Reliance Power, which attracted a record Rs 756,000 crore worth of bids, slumped as much as 21 per cent when it listed on February 11 as a global sell-off in equities dried up appetite for new shares. The rout prompted Indian companies to scrap Rs 7,200 crore of initial share sales.

India’s benchmark Sensitive Index declined 16 per cent from the day the IPO opened on January 15 until the day before listing. Reliance Power shares have never closed above Rs 450, the maximum offer price. Individual investors had to pay Rs 430 for each share in the IPO.

“I have been personally concerned by the notional losses to millions of our investors as a result of a dramatic adverse change in sentiment in global and domestic capital market after the pricing of our IPO,” Ambani said. “The board endorsed my concern and approved the bonus issue.”

The bonus issue will reduce the cost of acquiring Reliance Power shares to Rs 269 for individual investors, 40 per cent lower than the IPO price. For large shareholders, the rate will fall to Rs 281 a share, Ambani said.

Anil Ambani’s personal holding in Reliance Power will fall to 40 per cent from 45 per cent to enable Reliance Energy’s stake in the company to be maintained at 45 per cent. The dilution in his shareholding represents a “contribution” of Rs 5,000 crore in favour of investors in Reliance Energy and Reliance Power, Ambani said.

Business Standard adds: On whether this contribution attracted gift tax or not, corporate lawyers said the tax was not applicable to share transactions.

Reliance Power gained 7.5 per cent on February18, the most since listing, after the bonus plan was announced. The stock closed 1.2 per cent lower at Rs 416.85 in Mumbai trading on February 22.

The unit of Reliance Energy Ltd, India’s second-largest power producer, sold out its record Indian initial share sale in less than a minute. Anil Ambani embarked on the Reliance Power IPO following a break with brother Mukesh and the splitting up of the Reliance empire founded by father Dhirubhai Ambani.

Meanwhile, Reliance Power has sought an enquiry by the Securities and Exchange Board of India (Sebi), the market regulator, into “hammering” of the stock price, Ambani said.

“Seven Mauritius-based investors went on selling within 4 minutes of the listing even when the market was falling,” he said. “I can understand people selling when the price is rising. There’s more than meets the eye.”

The company plans to set up 13 plants with 28,200 Mw of generating capacity in five years, a third of India’s planned new projects. Ambani, who will use the money to fund his $28 billion plan, became the second-richest man in India after his Reliance Energy quadrupled in value last year.

The Anil Dhirubhai Ambani Group has filed to sell shares in Reliance Infratel Ltd, the transmission-tower unit of Reliance Communications Ltd, India’s second-largest operator of wireless services. The company plans to sell 89.1 million shares, or 10.1 per cent of Reliance Infratel, according to a release sent to the Bombay Stock Exchange on February 4.

“There’s no rethink on the IPO. We’re waiting to hear from Sebi,” Ambani said.

Market Watch

Stock Market Prediction
The stock market hardly had a chance to wake up to the opportunities before the Union Budget announcements for 2008-09.
The “irrational exuberance” of the third quarter of 2007-08 lost its steam early in January and the market is yet to recover fully from the wounds of the crash.
Easy money-driven rally is not on for Dalal Street now.
Apart from the consolation of remaining “technically” in a bull market, the equity street is still far from reflecting optimism.
Bulls have tenaciously kept the Sensex bound within a range for the past three weeks, but did not have the heart to step into another adventure, lest it might again turn sour.
This week, the last before the Budget, Dalal Street may remain sedate and let the chances of revaluations largely go by.

It'll be a green opening but as always. I'm expecting a two-sided movement again! Things are too volatile to even predict stuff now! One doesn't know whats gonna happen in the next hour.
But a green opening is expected because Asia will mirror America's strong closing on Friday.

The dramatic recovery in the US market in the last half an hour of trade on Friday could provide some respite to bulls across key Asian markets, including India, when trading resumes on Monday. The Dow Jones Industrial Average ended 96.72 points higher after trading weak for most part of the session on bailout reports of bond insurer Ambac, which guarantees more than $500 billion in debt.
Some Good news are moving around
HDFC-CBoP Merger( Swap Ratio 29:1)
Reliance Bonus

Corporate Announcement
Essar Shipping - Outcome of EGM
Essar Shipping Ltd has informed BSE that the members at the Extra Ordinary General Meeting (EGM) of the Company held on February 23, 2008, have approved the following by way of Special Resolutions:
1. Issue, offer and allotment of equity shares, FCCBs, GDRs etc., upto an aggregate amount not exceeding US$ 1 billion in terms of the resolution at item No. 1 of the notice of the EGM.
2. Change of name of the Company to Essar Ports & Logistics Ltd.
3. Ratification / enhancement of the loans / guarantee limits upto US$ 100,000,000.

Reliance Energy - Outcome of Board Meeting
Reliance Energy Ltd has informed BSE that the Board of Directors of the Company was held on February 24, 2008.The following media release issued by Reliance Power Ltd, which, inter alia, incorporates the decisions of Board of Reliance Energy Ltd, which is self explanatory:"Reliance Power Ltd has informed BSE that the Board of Directors of the Company at its meeting held on February 24, 2008, has approved a proposal for issuing free bonus shares to all categories of shareholders, excluding the promoter group (comprising of Reliance Energy Ltd. and the ADA Group), in the ratio of 3 shares for every 5 shares held, subject to necessary approvals.The proposed bonus offering will result in reduction of the cost of Reliance Power shares below the IPO price as follows:

Rs 269 per share for retail investors, 40% lower than the IPO price of Rs 430.
Rs 281 per share for other investors, 37% lower than the IPO price of Rs 450.

In a related development, Mr. Anil D Ambani, Chairman, Reliance ADA Group, on February 24, 2008 simultaneously announced a voluntary contribution of 2.6% of his shareholding in Reliance Power to Reliance Energy Ltd., to protect the Company from any dilution of its existing 45% stake in Reliance Power, as a result of the bonus proposal.

HDFC-CBoP MERGER

Boards of HDFC Bank and Centurion Bank of Punjab (CBoP) on Saturday agreed to merge to form a joint entity. The share-swap ratio for the merger will be decided by both the boards on Monday, after getting the valuation report. They will meet again on February 28 to finalise the details of the merger, a joint statement from the lenders said. "The two Boards have resolved to pursue the merger subject to satisfactory due diligence, a fair share-swap ratio and all the requisite statutory, regulatory and corporate approvals," said a statement issued by both the banks. It is understood that configuration of board and other issues will be decided on February 28. However, a banking source said the swap ratio will be fixed in the vicinity of 25:1. That means, for every 25 shares of Re 1 each of CBoP, one share of HDFC bank will be given. Ernst & Young and Dalal & Shah have been appointed to determine the share swap ratio, HDFC Bank said in a statement. The merger will create a bank with 1,148 branches, surpassing second largest bank ICICI Bank with 955 branches. CBoP has 394 branches and HDFC Bank 754 branches as on Dec 31 2007, the statement said. The merger will increase the number of customers of HDFC Bank from existing level of 10 million to 12.5 million. Both HDFC Bank and Centurion Bank got the license in mid-nineties along with IDBI Bank, UTI Bank, Global Trust Bank, Times Bank and Bank of Punjab, when government liberalised its banking policy. Later Times Bank was merged with HDFC Bank in 2000. And, when Centurion Bank faced financial crisis in 2003, it was rescued by Sabre Capital of Rana Talwar, who earlier headed Standard Chartered Bank’s global operations. After restructuring the capital of Centurion Bank, Talwar successfully completed two merger deals to strengthen the bank. First Bank of Punjab was merged with the bank in 2005 and later Lord Krishna Bank in August 2007. At present, Bank Muscat owns 14.02% and Sabre Capital 3.74% in CBoP. Centurion Bank shares, which ended one percent down on Friday valuing the bank at Rs 10,500 crore, have risen 13% since Wednesday close. During same period, HDFC Bank's stocks lost 4%. Once the two banks iron out the merger process, they will approach the RBI for approval. However, it is understood that both the institutions have already taken informal permission from the central bank.

Market News as on 22nd Feb

MARKET
According to Investment Guru, Marc Faber, the emerging markets may get oversold in the next six months and then see a rally. New highs are pretty much out of question, he told CNBC-TV18. Some EMs can still drop 30-40% from the current levels, he added.
Precious metals are still relatively attractive, Faber said. The Sensex may test 14,000 before slipping to 12,000 levels he said.
COMPANIES ANNOUNCEMENT
GlaxoSmithKline Pharmaceuticals fixes Book Closure for Dividend
GlaxoSmithKline Pharmaceuticals Ltd has informed BSE that the Register of Members & Share Transfer Books of the Company will remain closed from April 04, 2008 to April 21, 2008 (both days inclusive) for the purpose of payment of dividend.

Medi Caps - Updates
The Company has entered into a Joint venture arrangement with M/s. Mission Pharmaceuticals for setting up a plant at SEZ in Pithampur (Dist DHAR) for manufacturing softgel Capsules with the total proposed investment of Rs 20 crores and out of which the Company has already contributed total Rs 55 lacs in the current financial year.

Mascon Global - Updates
With reference to the news item appearing in a leading financial daily titled "Mascon may buy Sam Pitroda's C-SAM by June", Mascon Global Ltd has informed BSE that the Wholly Owned Subsidiary (WOS) of the Company is trying to have a relationship with C-SAM INC for IP relationship. The Company will furnish necessary details in due course.

Kaashyap Technologies - Outcome of Board Meeting
Kaashyap Technologies Ltd has informed BSE that the Board of Directors of the Company at its meeting held on February 22, 2008, inter alia, has discussed the following:

1. Acquisition of Logic Bytes Inc.,The Board considered the report submitted by the management and approved, the same. As per the report submitted by the Management, Logic Bytes Inc., is also in possession of Health Care Software and the take over will enable the Company to make foray into the Health Care Business in the near future. The Board further authorised the Chairman or any one Director to negotiate and finalize the consideration not exceeding USD 4 million. The Chairman or any one Director has been authorised to sign the necessary documents to complete the transactions.

2. New VentureIn order to diversify into the business of Unique Content Transformation providing Newspaper Publishers, Broadcasters, Content Aggregators, Media Monitoring Companies, Telecos, STM Publishers and Government Organizations with Real Time and Project based BPO / CPO / KPO Services the Board has formed a committee to look into the business. The committee has been requested to submit a detailed report on the potential market along with other details like competitors etc.

3. IP TVThe Board also considered the option of its venture into IP TV business at length.The Board decided to take a decision on the Agenda 2 and Agenda 3 at the Board meeting slated for February 29th for issue of Bonus / dividend / bonus warrants / rights to the shareholders.

HDFC Bank - Board Meeting on Feb 23, 2008
HDFC Bank Ltd has informed BSE that a meeting of the Board of Directors of the Bank will be held on February 23, 2008, to consider, in-principle, a possible merger between Centurion Bank of Punjab Ltd and HDFC Bank Ltd.

Power Grid Corporation Board to consider interim dividend
Power Grid Corporation of India Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on March 05, 2008, inter alia, to consider, declaration of Interim Dividend for the Financial Year 2007-08.Further the Company has informed that, March 11, 2008 has been fixed as the Record Date for the purpose of payment of interim dividend, if declared.

Bank of Baroda - Notice of Strike on Feb 25 & 26, 2008
Bank of Baroda has informed BSE that the Bank is informed by Indian Banks' Association, that United Forum of Bank Unions, which is a joint forum of five industry-level Workmen Unions (viz. AIBEA, NCBE, BEFI, INBEF and NOBW) and four Officers' Association (viz. AIBOC, AIBOA,INBOC and NOBO) has served a notice of strike informing their decision to go on a nation-wide strike on February 25 & 26, 2008.In view of the above, the Bank has taken necessary steps in terms of the existing guidelines for smooth functioning of Bank's branches / offices on the days of strike, in the event the strike materializes on February 25 & 26, 2008.

JSW Steel - Updates on Scheme of Amalgamation
JSW Steel Ltd has informed BSE that the Hon'ble High Court of Judicature at Mumbai has sanctioned the Scheme of Amalgamation of Southern Iron & Steel Co. Ltd with the Company. The Order sanctioning the Scheme was pronounced in the Court on February 22, 2008.The written order sanctioning the Scheme is expected to be received shortly. Once the order of the High Court is filed with Registrar of Companies, Maharashtra, the scheme will become effective.

Mercator Lines - Updates
Mercator Lines Ltd has informed BSE that the Company on February 22, 2008 has sold and delivered one of its 1986 built Aframax Tanker of DWT 100488.


NEWS

• Asian stocks fell, with the region's benchmark set for its seventh weekly drop this year, on renewed concern the U.S. will enter a recession.
• Hexaware has declared its fourth quaret results. It Q4 consolidated net loss stood at Rs 81 crore. Its consolidated net sales at Rs 259.18 crore
• The Centre on Thursday approved a fresh Rs 500 crore assistance to help exporters make up for the loss in orders due to strengthening of the rupee.
• After shunning Bengal a year ago following the trouble over land acquisition, the Bharat Forge group is back in the state with a bundle of projects.
  Group company Kalyani Steels Ltd proposes to set up a one-million-tonne speciality steel plant and a 500-megawatt captive power unit at an investment of Rs 6,500 crore.
• IT firm Hexaware Technologies has taken a Rs 103 crore hit in the fourth quarter ended December 2007 because of unwinding of the exotic forex contracts it had entered into in currencies other than the rupee. This led to a net loss of Rs 81 crore for the period.
• Reliance Communications Ltd. (RCL) on Thursday acquired Uganda based Anupam Global Soft (U) Ltd., a company holding public infrastructure provider licence (PIPL) and public service provider licence (PSPL), issued by the Uganda Communications Commission.
• Realty major, Housing Development (Q, N,C,F)* & Infrastructure (HDIL) sold a commercial land in Andheri (in the western suburb of Mumbai) to Mack Star Marketing, a private company, for around Rs 9 billion, reports Business

READ IT

We would have loved to say, Thank God, its Friday and relax for the weekend. But, speculation on Reliance Power’s bonus ratio, which will be decided on Sunday will hold center-stage. Buzz is that some short covering could take place and the Reliance Power stock may end above its issue price today.

But global markets are not very supportive for the time being. We expect a weak opening, unless Asian markets stage a rebound before the opening bell. IT stocks may remain in the limelight in the near term in case the rupee remains weak. Watch out for Centurion Bank of Punjab amid reports that it will be acquired by HDFC Bank, though both the companies have yet not confirmed any merger talks.

Shipping and auto parts companies may also be in action amid reports of some favourable proposals in store in the upcoming budget for the two sectors. Jai Corp. and Infotech Enterprises may also attract some attention on positive news flow. Bank of Rajasthan could be in action on expectations of a placement at a significant premium.

FIIs were net buyers of Rs2.09bn (provisional) in the cash segment yesterday while local institutions pulled out Rs1.41bn. In the F&O segment, FIIs were net buyers of Rs3.76bn. On Wednesday, they were net buyers of Rs567mn. Mutual Funds were net sellers of Rs1.91bn on the same day.

Crude oil futures dropped for the first time in six days, falling 1.5% to close near the US$98-a-barrel mark, as government data showed that US crude inventories have risen more than expected.

Light, sweet crude for April delivery, the new front-month contract, declined $1.47 to close at $98.23 a barrel in New York. Earlier, it fell to an intraday low of $96.87. Natural gas moved lower despite that its inventories fell.

The Energy Information Administration reported that US crude inventories rose 4.2mn barrels in the week ended Feb. 15, outstripping the increase of 3.2mn barrels that analysts had expected.

Government has convened a meeting of major steel producers next week to sort out issues impeding their mega investment plans in the country.
The Ministry is anticipating investment in the sector to the tune of Rs 2800 billion by 2011-12. Government is expecting the steel production to reach more than 100 million tons by 2011-12.

Foreign Trade Policy : 2004-09

Objective :
The new Foreign Trade Policy (FTP) takes an integrated view of the of the overall development of India’s foreign trade to achieve the following objectives:
1. To double India’s %age share of global merchandise trade to 1.5% by 2009, for which exports from India have to be $ 175 billion by 2009 & annual compounded growth rate required would be 21% (global export growth rate estimate : 4-5%).
2. To act as an effective instrument of economic growth by giving thrust to employment generation, especially in semi-urban and rural areas.
Strategies :
The strategies include:
1. Unshackling of controls -creating an atmosphere of trust and transparency .
2. Simplifying procedures and bringing down transaction costs .
3. Adopting the fundamental principle that duties/levies should not be exported .
4. Identifying and nurturing different special focus areas to facilitate development of India as a global hub for manufacturing, trading and services.

Export promotion schemes
Target Plus : Under the scheme exporters achieving a quantum growth in exports and exceeding the overall normal export target growth target of 16% fixed for 2004-05, would be entitled to duty free credit based on the the incremental exports. For incremental growth of over 20%, 25% and 100%, the duty free credits would be 5%, 10% and 15% of FOB value of incremental exports.
Served from India : For creating ‘Served from India’ brand to be instantly recognized and respected, under this scheme, individual service providers who earn foreign exchange of at least Rs.5 lac and other service providers who earn foreign exchange of at least Rs.10 lac will be eligible for a duty credit entitlement of 10% of total forex earned by them. In case of stand alone restaurants, the entitlement shall be 20% and for hotels, it will be 5%.
EPCG :
a : additional flexibility to fulfil export obligation under EPCG scheme to reduce difficulties of exporters.
b: technological upgradation under EPCG scheme has been facilitated and incentivised.
c : transfer of capital goods to group companies and managed hotels now permitted under EPCG. d: in case of movable capital goods in the service sector, the requirement of installation certificate from Central Excise, has been done away with.
e: export obligation for specified projects shall be calculated based on concessional duty permitted to them, for improvement in viability of the project.
Status Holder Categorization : The new rationalized scheme of categorization of Status Holders as Star Export Houses has been introduced as under: For 1 Star, the required export turnover over 3 years should be : Rs.15 cr, for 2 Star : Rs.100 cr, for 3 Star : Rs.500 cr, for 4 Star : Rs.1500 cr, and 5 Star : Rs.5000 cr The Star Export houses shall be eligible for a no. of privileges such as fast track clearance procedures, exemption from furnishing of bank guarantee, eligibility for consideration under target plus scheme etc. Export Oriented Units: Such units to be exempted from service tax in proportion of exported goods and services. They can retain 100% of export earnings in EEFC accounts. Income tax benefits on plant and machinery shall be extended to DTA units which convert to EOUs. Import of capital goods shall be on self-certification basis for EOU.
Free Trade and Warehousing Zones (FTWZ):
A new scheme to establish FTWHZ has been introduced with a view to create trade related infrastructure to facilitate the import/export of goods/services with freedom to carry out trade transactions in free currencyto make India, a global trading hub. FDI would be allowed up to 100% in such zones. Each Zone would have minimum outlay of Rs.100 cr and 5 lac sq mt. built up area. SEZ benefits would be available to units in such zones. The maximum period for which goods will be allowed to be stored would be 2 years. If importers fail to re-export within this period, they will have to pay customs duties and sell the goods in the domestic market. Customers in India would also be allowed to purchase goods, provided payment is made in convertible foreign currency.
2nd hand Machinery : Import shall be permitted without any age restrictions and minimum depreciated value for plant and machinery to be re-located into India has been reduced from Rs.50 cr to Rs.25 cr.
Service Export Promotion Council : An exclusive council to be set up to map the opportunities for key services in key markets and develop strategic market access programmes in coordination with sectoral players and recognized nodal bodies of the services industry. Procedure simplification and rationalization : All exporters with minimum export turnover of Rs.5 cr and good track record to be exempt from furnishing bank guarantee in any of the schemes. All goods and services exported, including those from DTA units, shall be exempted from service tax. Validity of all licences/entitlements issued under various schemes, has been increased to a uniform 24 months.

Spending on apparel hits global benchmark

Spending on apparel in India has grown over the last five years, touching the global benchmark of 5 per cent of the total income, says consultancy firm Mckinsey.
However, apparel is seen struggling for a larger chunk of the consumer's wallet share, driven by other emerging categories such as electronics and travel.
Corporate honchos, who recently met in Mumbai for the India Fashion Forum, dwelled on the ways to encourage consumer spend on apparel and infuse more fashion quotient through innovation.
Partnering with fashion designers or exploring strategic merchandising options were considered as possible avenues to boost the average ticket price in apparel.
Kishore Biyani, CEO Future Group, said that the mobile industry is taking away part of the consumer spending on fashion, thus changing the popular dictum to 'Roti Kapda Makan Aur Mobile'.
Citing the example of the Rs 40,000 crore mobile handset industry, he said, "Innovation is going to be the biggest consumption driver and India needs successful store and fashion brands to drive this growth."
The average replacement cycle for cellphones has shrunk to 18 months with almost two thirds of all mobiles bought for their style statement.
D Shivkumar, vice president and managing director, Nokia India, said, "Mobile manufacturers have innovated by introducing new features such as torches, cameras and radios. Companies need to change before the consumer and Indianise features for durable conversions, especially at the bottom of the market."
Biyani emphasised that conventional events such as Diwali are losing their relevance and there is a need now to create new buying occasions as consumers are finding new ways of consumption such as travel, healthcare, education and electronics.
For instance, this year Big Bazaar beat its internal target by selling 1,28,000 jeans as against 38,000 cellphones during its Republic Day offer.
According to a Mckinsey study, inspite of the low spending ability on apparel, consumers are open to credit, but are restrained by credit availability.
Ireena Vittal, head retail practices, McKinsey said, "Forty five per cent of consumers are below 25 years and are looking for credit availability, while most credit finance schemes are targeted towards salaried customers."
The window of opportunity for brand owners is to partner with fashion designers or bollywood and television, which are the biggest influences for buying decisions.
Last year, Shopper's Stop entered into a merchandising arrangement with Farah Khan's Om Shanti Om for its four in-house brands Mario Zegnottio, Haute Curry, Vettorio Fratini and Push & Shove.
Asserting that fashion brands need to shun inhibitions about unprofessionalism in Bollywood, B S Nagesh, managing director Shopper's Stop said, "The company generated Rs 6 crore through merchandise sale and another Rs 10 crore through PR. We could drive better margins since the merchandise arrangement was for private labels."

Market News as on 22nd Feb

New mining policy in 2 months
MUMBAI: The govt plans to have a new mining policy in two months, T Subbarami Reddy, the country's junior minister for mines told reporters at an industry conference on Friday. Reddy also said that royalty rates on mining of iron ore and other ores would be changed.

Railway Budget 2008

NEW DELHI: Setting the tone for an ‘Election Budget’, railway minister Lalu Prasad is likely to reduce both passenger fares and freight rates, riding a strong revenue growth and reduced operational costs. Rail fares are likely to be cut by 3% to 5% while freight rates for petroleum, steel and iron ore may come down by 4% to 5% due to reclassification of goods. Since this will be the last full-fledged Railway Budget before the general elections, scheduled for next year, the railway minister is expected to go all out with populist measures, ministry sources said. According to officials at the Rail Bhawan, there will be no deviation from the trend of not hiking freight and passenger rates as the Railways is right on track to meet the twin objectives of reducing operational cost and increasing revenues. Between April 2007 and January 2008, earnings from freight and passenger traffic have grown 11% and 14%, respectively, giving enough cushion for Mr Lalu Prasad to cut rates. The turnaround time of most trains has been reduced by using the same coaches in more than one sector. The strategy has helped the Railways increase profit without hiking passenger fares or freight rates. A possible cut in passenger fares is likely to cover all categories while short-distance travel charges may see some rationalisation, the sources said.

Market News on 21 Feb' 08

WORLD MARKET

Asian markets trading firm; Hang Seng up 333 points

Asian markets were trading firm. Hong Kong's HangSeng rose 1.41% or 333.02 points at 23,923.60.
Japan's Nikkei gained 2.12% or 282.14 points at 13,592.51.
Taiwan's Taiwan Weighted shot up 1.73% or 136.71 points at 8,031.18.
Singapore's Straits Times advanced 1.24% or 37.59 points at 3,064.42.
South Korea's Seoul Composite was up 0.92% or 15.47 points at 1,703.38.

Oil Jumps Past $101 a Barrel on View That the Fed, Seeing Weaker Growth, Will Slash Rates

Oil futures rallied again Wednesday, pushing briefly past $101 a barrel after the Federal Reserve lowered its forecast for economic growth this year, convincing energy investors that the central bank will slash interest rates further. At the pump, meanwhile, gas prices rose another 2 cents overnight.
The Fed said damage from the housing slump and problems in the credit markets will slow economic growth to between 1.3 percent and 2 percent this year, down from a previous forecast for GDP growth of between 1.8 percent and 2.5 percent.
Oil prices are still within the range of inflation-adjusted highs set in early 1980. Depending on how the adjustment is calculated, $38 a barrel then would be worth $96 to $103 or more today.
Two new economic reports Wednesday suggested the economy is cooling. The Labor Department said its Consumer Price Index, a measure of inflation, rose by 0.4 percent last month, more than economists expected. The Commerce Department, meanwhile, said construction of new homes and apartments rose by 0.8 percent in January, but that applications for building permits, an indicator of future activity, fell by 3 percent.
The reports come a week after the Energy Department, the Organization of Petroleum Exporting Countries and the International Energy Agency all lowered their oil demand growth forecasts for this year.

Japan's Export Growth Unexpectedly Quickens to 7.7%

Japan's export growth unexpectedly quickened in January, as rising demand for cars and steel from China and Russia made up for falling U.S. sales. Exports, the engine that drove almost half of the economy's expansion last quarter, rose 7.7 percent, from December's 6.9 percent gain, the Finance Ministry said today in Tokyo. The median estimate of 18 economists surveyed by Bloomberg was for a 6.6 percent increase. Shipments to Asia and Europe rose to records for the month, as growing consumer classes in China, India and Russia create new customers for exporters including Mitsubishi Motors Corp. and Matsushita Electric Industrial Co. Exports to the U.S. fell for a fifth month amid the worst housing slump in 26 years.

Dubai International to invest $5 bn in India, China, Japan

INDIAN MARKET

• It’s well known that Anil Ambani’s Reliance Power lost 17% to close on Rs 372.50 against the issue price of Rs 450 on its debut on the stock exchanges. But what’s not known is that a handful of Mauritius-based foreign institutional investors (FIIs) and a domestic bank offloaded their entire or almost entire shareholding in the company within minutes of the opening bell.
• Reliance Communications on Wednesday said it is consolidating its international businesses under Reliance Globalcom, the newly incorporated umbrella brand for all its overseas businesses.
• The battle for the Mumbai Trans Harbour Link climaxed on Wednesday with Anil Ambani pipping his sibling Mukesh to bag the project.
  A consortium led by Anil won the contract for the Rs4,000 crore project with a promise to build it in four years and recover the costs in five years, 11 months and one day, a ‘concession period’ of nine years, 11 months, one day.
• India's fifth-largest IT company by revenues, HCL Technologies, on Wednesday announced the acquisition of US-based software product company, Capital Stream, for $40 million, in an all-cash deal.
• Blackstone has acquired 10.4% stake in logistics major Allcargo Global Logistics (AGL) for Rs 242 crore.
• Franklin Resources Inc has acquired 49 per cent stake in Vietcombank Fund Management, an investment management firm currently focused on private equity investment in Vietnam.
• Sun Pharmaceutical Industries, India’s biggest drugmaker by market value, has acquired 9.4 per cent stake in Israel’s Taro Pharmaceutical Industries for $38 million, raising its total holding to 34.4 per cent.
• Commercial production of Tata Motors’ “Nano” automobile is expected to begin in October to be preceded by trial production of the car in June-July, Ravi Kant, Managing Director, Tata Motors, said after a visit to the project site at Singur in West Bengal’s Hooghly district on Wednesday.
• Tata Consultancy Services (TCS) has announced a $120 million contract from automotive major Chrysler for application, maintenance and support services.
  The IT services will be in the area of sales and marketing and shared services for Chrysler.
• Reliance Power today announced that the company will allot the proposed bonus shares only to investors who will make the balance payment before February 26.
  According to a release issued by the company to the BSE today, the bonus shares of investors who do not pay the call money by the due date will be kept in abeyance.

BUDGET

Chidambaram may announce cut in excise duty rates across the board from 16 per cent to 14 per cent or sector-specific duty cuts in the budget .
Sectors like pharmaceutical, textile machinery, food processing, paper and auto including two wheelers, tyres are expected to get relief in excise duty.