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2 THE ECONOMIC TIMES | N EW DELHI | WEDNESDAY | 30 MAY 2012The Political Theatre

Out-of-court Muslim QuotaWhen the Andhra Pradesh High Court struck down the 4.5% central sub-quota for minorities on Monday,

it was not the first time it did so. The court had thrice earlier rejected the sub-quota, which the Andhra

government has been pushing at the state level since 2004. A look at the four attempts:

Attempt 1 Attempt 3July 7, 2004 April 17, 2007

May 18, 2007

June 11, 2007

June 23-26, 2007

July 2, 2007

July 6, 2007

August 13, 2007

Sept 21, 2004

November 18, 2004 November 7, 2005

June 20, 2005

5%

Decision

challenged in

AP High Court

TWO-MONTH-OLD YS Rajasekhara

Reddy govt grants 5% reservation to

Muslims in govt jobs and educational

institutions, based on a report

prepared by the Commissionerate of

Minority Welfare.

ANDHRA GOVT directs BC panel to

specifically identify socially & educationally

backward groups among Muslims.

STATE GOVERNMENT makes

IAS officer PS Krishnan

advisor, asks him to identify

backwards among Muslims.

KRISHNAN SUBMITS his report,

which is sent to the Commission

COMMISSION CONDUCTS own survey in

just three days, covers just six districts.

COMMISSION SUBMITS

its 204-page report

ORDINANCE ON 5% Muslims reservation

STATE PASSES Andhra Pradesh

reservation in Favour of Socially

and Educationally Backward

Classes of Muslims Act, 2007.

Act challenged once again.

SEVEN-JUDGE AP HC bench strikes down

Act as unsustainable

AP GOVERNMENT

approaches AP Backward

Classes Commission

COMMISSIONsubmits report.

AP GOVT issues

ordinance

reserving

5% jobs and

seats in

educational

institutions for

Muslims.

FIVE-JUDGE bench strikes down the

Ordinance/Act as unconstitutonal andviolative of Articles 15(4) and Article 16(4)of the Constitution.

HC SAYS: The ordinance is religion specific.

It imposes illegitimate, discriminatory and

grossly burdensome impact on citizens,

on those belonging to the existing notified

Backward Classes and on those who are not

members of Backward Classes, as well. Theinference is therefore compelling that the

entirety of the state action manifested in

the provisions of the Ordinance, is a crude

camouflage to shield what is clearly a naked

and exclusively religion-based programme

of reservation in educational institutions and

public employment.

COURT ALSO faults the AP Backward Classes

Commission, says report is a performance

on command. The prior non-publication

of criteria and data collected by the BC

Commission renders the report illegal and

contrary to its Act and principles of fairness

ORDINANCE IS challenged.

Case sub-judice, but

ordinance

replaced

by an Act

FIVE-JUDGE bench strikes

down the government order as

wholly unconstitutional.

Says: ONE OF the groundsthe Act classifies

beneficiaries and non-

beneficiaries is on the

basis of religion, which is

unconstitutional.

NOT ONLY unscrupulous persons

embracing Islam would get the benefit

of reservations, but that would result

in depletion of opportunities of

enjoying reservations by those Muslim

groups who are otherwise entitled to

the benefit of reservation in pursuance

of the impugned enactment.

ACT BASED exclusively on the

faulty report of the BC Commission.

Court finds that in many cases the

Commission had not conducted any

survey at all. It merely quoted an

Anthropological Survey of India study

and the Krishnan report.

May 28AP HC strikesdown the Centralsub-quota forbeing purelybased on religion

Attempt 2

Attempt 4December 2011

Centre declares 4.5%

minority quota in Central

jobs & educational

institutions, just days

before the UP polls

May 29

Andhra govt appeals to the SC

SC BENCH headed by the then CJI

KG Balakrishnan refers case to a

Constitution bench, stays HC judgment.

SC says: As an interim measure, the

5% reservationshall continue(but)

shall not be extended to Other Muslim

groups. This is a temporary measure

till the matter is decided.

Centredecides tochallengeorder inSupreme Court

THE COURT holds that the

government can add/subtract

a group from the backward

classes list only after the

case has been examined

by the states Backward

Classes Commission. This

was not done. Earlier, the

Anantaraman and the

Murlidhara Rao commissions,

which had examined the

issue, concluded that as

a class, Muslims are not

socially and educationally

backward

THE COURT SAYS:

THE GOVERNMENT has

decreed reservations for the

entire Muslim community

(which is not) a homogenous

group; there are caste-

like stratifications... Thecommissionerate acted in

undue haste (and) the process

was totally vitiated since it

did not determine any specific

criteria for the purposes of

identifying Backward Classes

(among Muslims).

SHIV VISVANATHAN

One of the classic sociological es-says that everyone decries but se-cretly believes in is AK Ramanu-jans Is there an Indian Way ofThinking? The original text wasdedicated to the poets father. Themodernist in Ramanujan was in-trigued that his father could simul-taneously believe, practise andpursue astrology and astronomy.The latter saw no contradiction init. The poet believed that this waspossible because Indians love tocompartmentalise. New thoughtdoes not replace the old, but itmerely occupies a new niche. TheIndian mind seems full of differentideas which cohabit happily, but do

not converse with each other.Threatening this affable way was

a western mode of correctnesswhich affected many modernistsand Marxists. They believed thatreligion and Marx could not coexistor that rationalism and religioncould not be friends. Ideological di-vides were imposed where Marx-ists thought that Usha Uthup was abourgeois habit. Earlier, beautycontests were met with similar pub-lic indifference. Legend has it thatwhen Sushmita Sen won the MissUniverse contest, CPM and the Ben-gali upper class received the newswith stoical indifference. Bour-geois was bourgeois be it Uthup orSen, and like Kipling, they decidedthat never the twain shall meet.

Fortunately, Uthups affection,exuberance and the power of mu-sic overcame CPMs contradic-tions. Uthup did more to make theCPM cosmopolitan than anybunch of newspaper editors. TheUthup question, however, haunts a

universe of political correctness.We do not realise that culture asconsumption overcomes the ten-sion of culture as production. Mu-sic and cricket can create loyaltiesthat no ideology can divide. Reli-gion as practice did the same thing.During Durga Puja, it was endear-ing to see the sickle and hammer inDurgas hands. I want to empha-sise that this is not contradictoryas Marxist ideologists saw it, or

segmentary as Ramanujan con-ceived it. It was in fact a plural uni-ty of culture. Diversities demandcomplex unities, syncretic wholeswhich rose above endemic contra-dictions.

Like cricket, Hinduism is a way oflife and invites syncretism. It cre-ates a rainbow collection of loyal-ties which is very different fromloyalties of a uniform kind. Itshows the universe of the fan be-yond class or caste. Fans have a to-temic relation to a team. Team Kol-kata summons such a coalition ofdifferences the more disparatethe better. The Kolkata team is amix of devotees. It has film stars asfans lined up to watch the finalJuhi Chawla, Genelia and RiteshDeshmukh, Sonali Bendre andChunky Pande y. Team Kolkata cre-ates a Calcutta which is richerthan a Bengali Bengal. Calcuttawas as much a home for Biharis,Punjabis, Oriyas as for the Benga-lis. Look at it another way. Shah-rukh, who has loved and lived inMumbai, is often treated as analien there; yet Calcutta gives hima hospitality that Mumbai couldlearn from. A Sourav Ganguly isopen in a way Thackeray is not.

Hospitality creates loyalties anddefies logic in a way editorials can-not tolerate. Both CPM and Mama-ta join the party in a spirit that ourgrammarians cannot tolerate.Bengal has done today what Indiawill do tomorrow creating a rain-bow of loyalties. Where else willMamata, Shahrukh, Bollywood,CPM, subaltern and diasporic allcome together to create an alchem-ical marriage of devotees, fans, be-lievers and loyalists? There is nohypocrisy or contradictions inthis. Mamata can be as subalternas she wants and can still love Ben-gal, Shahrukh and Cricket in thisorder. CPM can be as political as itlikes and argue that cricket over-comes contradictions. To con-demn this is silly. Cricket sum-mons larger loyalties. Modernistlogic like political correctness canbe segmented and petty. Here TeamKolkata gives an important lesson.You can be Indian and still be aBengali, a Mumbai man, a Marx-

ist, Muslim, and love cricket.There is no segmentation here,just a celebration of all our diversi-ties. Like cricket, patriotism is atheory of hospitality: celebratethis as a real victory and forget po-litically correct strictures whichwant logic, correctness and seg-mentation. This is the Indian wayof thinking.

The author is a social science nomad

Mamata is Right inCelebrating Victoryof Team Kolkata

Look Whos Grinning

The wrangling within the CPM Kerala unit may

be embarrassing for the party, but polit bureau

member Sitaram Yechury may have reason to

not mind former CM VS Achuthanandans fre-

quent diatribes. Thats because Yechury is be-

lieved to have favoured for long a reduced role

for the secretary of the partys Kerala unit, Pin-

arayi Vijayan, who has the backing of the par-

tys general secretary Prakash Karat.

No Jaya Ho Chorus in BJPNot everybody in the Bharatiya Janata Party is

thrilled at the prospect of film star-turned-

politician Jaya Prada joining their ranks. A two-

time member of the Lok Sabha from Rampur,

Jaya Prada, recently met BJP president Nitin

Gadkari, who is believed to be favourably in-

clined to her inclusion in the party. Mukhtar

Abbas Naqvi, a vice-president of BJP, however,

fears that he will have to look for another con-

stituency if Jaya Prada joins the party and if he

decides to contest the next Lok Sabha polls. A

few other leaders in the party also appear un-

comfortable with the chequered career of Jaya

Prada, who was expelled along with Amar

Singh from the Samajwadi Party, which she had

joined after leaving the Telugu Desam Party.

Poli Buzz

ROHIT CHANDAVARKARMUMBAI

The defence ministry has asked the M aharashtragovernment to hand over the land on which theAdarsh society building was located, claimingthat it owned the land. The claim comes a monthafter a judicial commission investigating theAdarsh scam concluded that the land belonged tothe Maharashtra government.

Dismissing the findings of the commission, thedefence ministry served a legal notice to the stategovernment on Monday, saying if the land wasnot handed over within two months, it will file acivil suit against the Maharashtra governmentin the Supreme Court.

The judicial commissions conclusion that theland belonged to the Maharashtra governmentwas set to make the prosecution case weak. Thebiggest charge against the Adarsh scam accusedwas that they fraudulently transferred ownershipof land from the defence ministry to state govern-ments revenue department. MoDs claim over theland, hence, will be a shot in the arm for the prose-cution in the Adarsh scam case.ET accessed a copy of the notice served by the

defence ministry, where the history of the

Adarsh land has been recounted. MoD hasclaimed that in 1796, the island of Colaba wasclaimed as military territory and civilians wereforbidden from carrying out any kind of con-struction on the Colaba island without military

permission. In 1821, an order bythe Governor-General declaredColaba as a cantonment area. In1911, the government reclaimed1,145 acres. The notice then ex-plains how various committeesappointed by the governmentopined that the entire island wasa military cantonment area.

Taking advantage of the ab-sence of the entries in the Mili-

tary Land Register maintainedby the defence estate office ofMoD and the absence of entries

in the records maintained by the Government ofMaharashtra (GoM), the promoters of Adarsh So-ciety and several others, including top officials ofthe Army acting without authority, orchestratedcorrespondence and made admissions...that theproperty belonged to GoM, so as to deprive theUnion of India of its lawful right, title and interestin the property...MoD said.

Hand over Adarsh Land,it Belongs to Us: MoD

MoD will file acivil suitagainst theMaharashtragovernment inthe SupremeCourt if theland is nothanded over

within twomonths

Guest Column

BHARTI JAINNEW DELHI

Congress president Sonia Gandhi hascalled a meeting of the partys highestdecision-making body, amid concerns

that the government may not follow up therecent petrol price hike with more correc-tive measures.

The Congress Working Committee willmeet after nearly a year on June 4, at atime when a section of the party as well asthe coalition it leads are resisting the

tough measures needed to tide over the ec-onomic crisis.

Defence minister and core committeemember AK Antony on Tuesday amplifiedthis perception when he said the move toraise petrol prices was not a correct step.Speaking in Keralas Neyyattinkara,where an assembly bye-election is due, hesaid, oil companies should have shownsome propriety.

According to analysts, Antonys state-ment confirms that the government did notkeep the party in the loop over the quantumand the timing of the petrol price hike. It al-

so belies the expectation that Pulok Chat-terjees appointment as principal secretaryto the prime minister would bridge the g apbetween the government and the party.

The defence ministers statement camejust a day after petroleum minister JaipalReddy dashed hopes that the governmentwould reduce its ballooning fuel subsidybill, as he ruled out a revision in the pricesof diesel, kerosene and LPG.

With Congress ministers clearly on thedefensive since the petrol price hike, it isfeared that the partys partners in the rul-

ing coalition will be emboldened to blockkey economic decisions. The governmentmay, therefore, be forced to keep on holdimportant reform measures such as for-eign direct investment in multi-brand re-tail and opening up of the pension and in-surance sectors.

The CWC meeting is expected to provide apointer to the direction that the Congress-led government would take over key issues.If the party chooses the soft option of buck-ling under coalition pressures, the govern-ment may have to step up its focus on entitle-ment programmes at the cost of economic

reforms. A large section of the CWC is like-ly to point to the upcoming presidential polland the electoral tests in BJP strongholdsof Gujarat and Himachal Pradesh later thisyear to argue against tough measures that

could derail the coalition at the Centre.With price rise seen as a major factor be-

hind Congress debacle in the recent as-sembly polls in Uttar Pradesh, Goa and Pun-jab, besides the municipal polls in Delhi andMumbai, CWC members are expected to de-mand steps to soothe frayed nerves of thecommon man. The party may, therefore, de-mand a cut in taxes and levies on petroleumin Congress-ruled states lessen the burdenof the petrol price hike.

According to a senior Congress leader,AK Antony report probing the reasons for

the partys poor show in the assembly pollsis unlikely to be placed before the CWC.The report has been submitted to the Con-gress president and it is entirely her pre-rogative to decide to act on the report, theleader said.

The political impact of Congress rebel Ja-gan Reddys arrest in a disproportionate as-sets case is also likely to be discussed, espe-cially in view of the impendingbye-elections in the state. Only a decisive in-tervention by the Congress president at thisstage can encourage the government tobring the economy back on the rails.

Tough Decisions Unlikely at CWC

SITTING PRETTY: Sonia Gandhi

OUR POLITICAL BUREAUNEW DELHI

The Centre will challenge the And-hra Pradesh high court order strik-ing down the 4.5% sub-quota for mi-norities in the Supreme Court.

We will go to the Supreme Courtby way of a Special Leave Petitionagainst the Andhra Pradesh highcourt order, said law and minorityaffairs minister Salman Khurshid.The minister claimed that the highcourt order was not a political set-back for the central government.

On Monday, the Andhra Pradeshhigh court had struck down thecentral governments order cre-ating a 4.5% sub-quota for minori-ties within the OBC quota, on the

grounds that it was unconstitu-tional to provide reservations onreligious grounds alone. The highcourt held that no evidence wasshown to it to justify the classifi-cation of these religious minori-ties as a homogeneous group or asmore backward deserving spe-cial treatment.

The government would like toaddress the matter with a sense ofurgency. The attorney-general willcome only next week and we cantake a call on how to go about it. Wewant to go as quickly as possible,Khurshid said. The law ministeradmitted that the court was correctin saying that a community cantbe given reservation only on the ba-sis of religion. But, this decisionwas not made on the basis of reli-gion. We made the reservationwithin the quota for OBCs on thebasis of proportion of population.

Khurshid stressed that the gov-ernment did not include any newcaste from minorities in the OBC

list but did it entirely on the basisof the Mandal Commission, whichformed the basis of the 27% reser-vation for OBCs. Backward mi-norities have not got more thanthey are already allowed to get asper their population. 4.5% of res-ervation is only among thosecastes included in the OBC listfrom minorities. It is only theirshare in the 27% reservation,

Khurshid said.Khurshid also made the argu-

ment that while the Constitutionstates that religion cannot be the

only criteria for giving reserva-tion to a community, minority isnot just a religion; it is also linguis-tic. The expression of the word mi-nority is both religious and lin-guistic. The government hadnotified this sub-quota for minori-ties on the eve of the UP assemblyelections; the move was seen asCongress effort to woo the statessubstantial Muslim population.

Regarding the court's criticismthat the government handled theissue casually, Khurshid said itwas not clear whether the courtwas referring to policy aspect of theissue or the advocacy aspect. Hesaid it was not the first time that th eAndhra Pradesh high court hadstruck down such an order. This isthe fourth time that the AndhraPradesh high court quashed thestate governments efforts to intro-duce a minority sub-quota.

Addressing the question on theimpact of the Andhra Pradesh highcourt order on students who are

seeking admissions to IITs on thebasis of the sub-quota, Khurshidsaid, I have spoken to the HRDminister (Kapil Sibal). He says thatthe selection to IITs is not complet-ed. But those who secure admissionin IITs can go to the SupremeCourt. He said that the govern-ment will like to take up the matteras quickly as possible, to ensurethat students are not affected.

Centre Set toChallenge HCs

Quota OrderIts proportionate sub-quota for Backwardminorities identified by Mandal Commission,clarifies law minister Salman Khurshid

COURT-BOUND: Salman Khurshid

AMRIT

NAGESHWAR PATNAIKBHUBANESWAR

Rebellion broke out in the Biju JanataDal, with 27 MLAs and three minis-ters huddling against party presidentand chief minister Naveen Patnaikfor his autocratic style of functioning.

The rebels met at the residence ofRajya Sabha MP Pyarimohan Moha-patra in the state capital. Patnaik hadrecently sidelined Mohapatra,known as uncle in political circles.According to one of the MLAs whotook part in the meeting, Mohapa-tras intention was to take stock of

loyalist legislators, if he were to bro-ker a deal with opposition parties toform an alternate government. How-ever, according to another rebelMLA, Mohapatra would be satisfiedif Patnaik ends his one-upmanship.

This is the worst crisis for Patnaiksince BJD came to power in 2000. Therebel meeting was held when Patnaikwas in London to attract foreign in-vestments to resource-rich Odisha.He is scheduled to return to the stateon Friday. BJD has 103 MLAs in theassembly and the support of four Na-tional Congress Party MLAs in the147-member assembly. Forming analternate government is not an easytask to achieve if Mohapatra has thesupport of only 30 MLAs.

The ministers who attended themeeting were food supplies and con-sumer welfare minister SaradaNayak, women and child develop-ment minister Anjali Behera, trans-port minister Sanjib Sahoo. DeputySpeaker Sananda Marandi was alsopresent in the meeting. Among prom-inent MLAs who turned up were Mu-

kund Sodi, Bibh uti Balabanta Ray, Su-sant Singh, Sanjib Pradhan, SrinathSoren, Manoranjan Sethi, RajendraSahoo, Bhagaban Kanhar, SarojiniHemraum, Kamalakant Nayak, Ji-ban Pradip Das, Sudarsan Jena andPravat Biswal.

The MLAs refused to officiallyspeak to the media on what tran-spired at the meeting.

Federal FrontHero FacesRevolt at Home

OUR POLITICAL BUREAUNEW DELHI

Veteran Congress leader NDTiwari gave his blood samplefor DNA test in a paternitysuit on Tuesday, the deadlineset by the Supreme Court. Hehad been refusing to give thesample for months despitedirections from courts.

The sample, which tookmore than four hours to col-lect and seal, was later hand-ed over to joint registrar ofDelhi High Court R Gopalan.

The paternity suit was filedby Rohit Shekhar in 2008 inDelhi High Court seeking itsdirection to declare Tiwarias his biological father.

Shekhar and his mother Uj-jawala Sharma were presentwhen the blood sample wastaken at Tiwari's residencein Dehra Dun.

The Supreme Court had onMay 24 rejected Tiwari's pleathat he was too old to give bloodsample. It does not mean thatblood is not running in hisbody, it said.

Tiwari GivesBlood Sample

ZAHID

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3WWW.ECONOMICTIMES.COM

Corporate

EIH Net Down 33% in Q4 at.45 Cr, FY12 Net Up 90%MUMBAIEIH Ltd, which runs hotels under the

Oberoi and Trident brands, on Tuesday report-

ed a 32.7% lower net profit for the fourth quar-

ter at . 45.13 crore as compared to . 67.06

crore a year ago. Total income for the quarter

was up 1.6% from . 322.28 crore to . 327.35

crore. Net profit for the fiscal year, however,

grew 89.7% from . 64.54 crore a year ago to

. 122.42 crore, as the luxury hotel group bene-

fited from the improvement in revenue per

available room and reduction in interest costs.

The companys consolidated net profit for the

year grew from a net loss of . 12.75 crore a

year ago to . 122.55 crore. Total consolidated

income for the year grew 9.95% to . 1,416.13

crore from . 1,288.04 crore last year.

Fortis Healthcare Q4 NetJumps 41% to .42 CroreNEW DELHI Fortis Healthcare reported a con-

solidated net profit of . 42 crore for the quarter

ended March 2012, up 41% from the same quar-

ter previous year. The Delhi-based companys

global sales also tripled to .1,279 crore during

the quarter with its international business con-

tributing about half of its tota l sales. The reve-

nues of the two quarters are not comparable

because this years quarterly number includes

the groups international business that has

been merged with thelisted Indian company.

The companys share price closed at . 103.35,

up 2.02% to at the Bombay Stock Exchange.

Ipca Laboratories Posts Q4Profit of . 77 CroreMUMBAIDrug firm Ipca Laboratories on Tues-

day reported a net profit of . 76.61 crore for

the fourth quarter ended March 31, 2012. The

company had posted a net profit of . 58.57

crore for the quarter ended March 31, 2012, Ip-

ca Laboratories said in a filing to the BSE. The

net sales of the company stood at . 553.11

crore in the quarter under review. It stood at

. 473.78 crore in the same period of previous

fiscal. The financial figures of the current quar-

ter and fiscal are not comparable with those of

the previous financial year due to amalgama-

tion of Tonira Pharma with the company with

effect from April 1, 2011, it said.

SAIL Fourth Quarter NetRises 3% to . 1,577 CroreNEW DELHI Beating market expectations,

state-owned SAIL on Tuesday reported a

growth of 3% in its standalone net profit to. 1,576.98 crore for the quarter ended March

31, 2012. Analysts were expecting a fall of 16-

30% in SAILs standalone net profit due to in-

crease in input costs. The largest domestic

steelmaker had reported a net profit of

. 1,530.61 crore in the corresponding quarter

of 2010-11. Net sales of the company was up

12.17% to . 15,079 crore during the reported

quarter as compared to . 13,339 crore of dur-

ing the same period last fiscal, it said in a filing

to the BSE.

Jindal Stainless Q4 NetDips 71% to .19 CroreNEW DELHI Bruised by a sharp increase in raw

material prices that coincided with production

capacity increasing, Jindal Stainless fourth

quarter standalone profits fell 71% to . 19

crore compared to . 66 crore for the same peri-

od previous year. Net sales for the quarter end-

ed March 2012, grew 25% to . 2,154 crore from

. 1,728 crore in the same period previous year.

For the year, Indias largest stainless steelplayer reported a consolidated net loss of . 104

crore for the year 2011-12, as against a profit

of . 318 crore during the same period last year.

Short Takes

CHANCHAL PAL CHAUHANNEW DELHI

The runaway petrol price,which has singed many, hasfound an unexpected benefi-

ciary in the Indian auto market:motorcycles and scooters. Withcustomers looking for cheaper mo-bility options over pricier cars fol-lowing the steepest-ever jump infuel prices last week, the demandfor more affordable motorcyclesand scooters is likely to go up in thecoming months.

Traditionally, the demand fortwo-wheelers has been stable in theIndian market, but a spike in fuelprices or interest rates alwaysbring them into play in a much big-ger way.

With each jump in fuel price, thecost of running a car goes up tre-mendously. Based on the changingeconomic scenario, where inflationis already forcing people to curtailspending, customers look forcheaper transport options to man-age their budgets, said a senior ex-ecutive of Hero MotoCorp, Indiaslargest two-whee ler company.

Petrol now costs a record . 73.18 alitre in New Delhi and . 78.57 a litre

in Mumbai after Thursdays 11%hike of . 7.50 by oil companies.Demand for motorcycles as a

means for personal transporta-tion has been strong in India. Butin a grim economic scenario,where both vehicle and fuel pricesare shooting up, customers fallback on cheaper mobility optionslike bikes and scooters. As theeconomy expands, everybodyneeds mobility and since theycant afford expensive transport,they stick to affordable options,

said Sageraj Bariya, managingpartner of Equitorials, an inde-pendent research firm.

Indias top-selling bike, the 100ccHero Splendor, starts at an ex-showroom price . 42,950 in NewDelhi while the cheapest car in thecountry, Tatas Nano, is priced at. 1,43,284, according to the compa-nies websites. Hero Pleasurescooter sells for . 41,700 in Delhiand Maruti Suzukis lowest-pricedcar, the M800, sells for about. 2,04,902 (ex-showroom, Delhi).

It is clear that the difference in ba-sic prices and the total cost of oper-ating them has started influencing

demand patterns in the Indianmarket.

Motorcycle manufacturers aregaining at the expense of car com-panies like Volkswagen, GeneralMotors, Honda Siel, Tata Motors

and Ford Motors, who have postedlower sales in the recent past asconsumers are putting off theirplans of buying new cars. Thedwindling demand for cars is al-ready forcing carmakers and itsapex body, Society of Indian Auto-mobile Manufacturers, to cut itsfull-year growth forecast of 10-12%for this fiscal.

The high interest rates, coupledwith rising fuel prices and a jumpin car prices, have knocked downcar sales to decades lowest of 3.4%in April while the two-wheeler seg-ment grew at a fairly healthy paceof 11% in the same month.

The impact becomes clear as de-mand for scooters has been consis-tent and strongest across all seg-ments of passenger vehicles with avisible strong shift in urban cen-tres. While customers were bat-tling high interest rates in times ofdouble-digit inflation, the steepest-ever increase in fuel price shouldspur demand for fuel-efficient

scooters and bikes, said Atul Gup-ta, vice-president of Suzuki Motor-cycle India Pvt Ltd.

High Petrol Prices to BenefitTwo-Wheeler CompaniesWith customers looking for cheaper mobility options, demand for two-wheelers is likely to go up

Racing AheadWith customers

looking for cheaper

mobility options overpricier cars, the

demand for two-

wheelers is likely

to go up in the

coming months

The high interest

rates, coupled with

rising fuel prices and

a jump in car prices,

have knocked down

car sales to decades

lowest of 3.4% in April

The growth in the two-

wheeler segment in April11%

10-12%

The dwindling

demand for

cars is already

forcing

carmakers and

its apex body

to cut its full-

year growth

forecast of

for this fiscal

Petrol price

in Delhi

a litre

`73.18

OUR BUREAUCHENNAI

In the race to hire and retain g ood talent,companies are waking up to a niche areathat can be a make-or-break tool for staffretention and satisfaction: The quality of

welcome that a company provides to newrecruits on their first day at work.

A pleasing reception area and somesmiling faces will be helpful, but compa-nies are realising that there is more to theright welcome than that. And the chal-lenging economic environment, whichmakes it important for companies to re-tain talent and prevent extra costs causedby attrition, has increased the need toprovide the right welcome to new staff.

Progressive companies are realisingthe importance of making Day One amemorable one for fresh recruits, at

whatever level. The manner in which anew employee goes through the initialformalities of joining a company and thefirst day at work is turning to be of strate-gic importance, said R Kannan, CEO ofAssessPeople.

It can be little things like being shownwhere the canteen is or how to get foodcoupons, but these make a big impact on anewcomer about the overall culture of acompany. These little things say how acompany actually connects with its peo-ple, and progressive companies will notmind sinking time and effort into theseaspects, said Kannan.

Handling new recruits is never easythese days, say HR professionals, and oneof the reasons is that the youngerrecruits sometimes feel difficult to easilymesh with what Kannan calls the threeother generations in the company.

These days there are four generations ofstaff in a company those who are below25, those between 26 and 35, those in the36-45 range and those above that. Opiniondiffers between all these categories on is-sues from whether or not to have a dresscode to work-life balance. Therefore, anymajor slip on handling new recruits onDay One can be a big turn-off for thefreshers concerned, said Kannan.

Shobana Rajaseker, HR head AparajithaCorporate Services, said companies aretaking special care to ensure that new em-ployees are given a comprehensive intro-duction and clarity on all routine proc-esses as soon as they join. She said theimportance of good induction has only in-creased, considering the aspect of deploy-ing staff at the clients end in some sectors,and that induction practices are gettingstronger in a broad range of sectors.

Day One is Key to Retention, Feel Cos

OUR BUREAUNEW DELHI

The delivery of the much-awaited Dreamliner aircraft,the first of which was supposed to arrive in India thisTuesday, seems to have been further postponed as civilaviation minister Ajit Singh said Air India would not takethe planes till the government decides on the monetarycompensation Boeing owes the national carrier for a four-year delay in de livery.

We will not be in a position to take delivery of the aircraftas the compensation package for the delay in delivery of theplane has not been decided as of now, Singh said.

The Air India board had on Monday held a detailed discus-sion on the issue of compensation, including the amount tobe claimed and how and decided to forward the decision to

the government for approval.When asked how long will Air India wait for

the Dreamliners or Boeing 787 aircraft now, asenior Air India official said, It would de-pend now on how long the government takesto approve the compensation amount.

Meanwhile, an official from the aviationministry was of the view that the mattershould be resolved within two-four days.Delivery should be deferred only by a veryshort period of time, may be two-four days,not more as the AI team is already in the USto conduct various pre-delivery checks,he said.

The compensation amount could vary fromanywhere between $145 million and $800 mil-lion, though sources refused to divulge theexact figure. The national carrier had placed

an order to buy 27 B-787s and as per the original schedule, theUS aircraft maker was to commence delivery of these air-craft from September 2008. Delivery of the Dreamliners wasdelayed due to various factors, including labour trouble inBoeing.

Sources said

the compensa-tion packagewould notmean Boeingwriting acheque to AirIndia, but themost likelyprocess, whichis yet to be fi-nalised, wouldbe to adjust theprice with thedelivery ofeach aircraft.

OUR BUREAUBANGALORE

Nearly half of Indias employers are strug-gling to fill critical positions because of asevere talent crunch, according to a studyon talent shortage by staffing firm Man-power Group.

Although the situation has improved overlast year, 48% of employers in the country arefacing hiring challenges this year as againstthe global average of 34%, the study said.

Talent is particularly scarce in information

technology, marketing, public relations andcommunications, and engineering, it said.Alarmingly, employers are less concerned

about the impact talent shortage is having onclients and investors, with only 48% employ-ers reporting talent shortages as opposed to67% last year, said Sanjay Pandit, managingdirector at Manpower India.

According to the study, the shortage inskilled workers is across the spectrumfrompersonal assistants and call-centre oper-ators, to researchers, engineers and account-ing staff. The job categories of labourers anddoctors, which were in demand last year, donot feature in this years list.

Owing to high growth in the IT sector andincrease in the social media presence of orga-nisations, there has been a surge in the de-mand for IT staff and marketing/communi-cations staff, Pandit said.

The study covered 1,500 employers in India,who were part of the 8,786 employers polledin the Asia Pacific reg ion and 40,000 globally.

Employers in Asia Pacific cited shortage ofcandidates, lack of technical skill, candi-dates refusal to relocate, poor image of theoccupation, weak soft skills and demand forhigher remuneration as reasons for trouble

in filling jobs.Our social structure forces us to take up ajob that pays better, has a growth path and ispermanent in nature, said Kunal Banerji,CEO of executive search firm Absolute HRInternational. This is very different fromthe western concept where one works for sixmonths and can afford to take a break and hasno social stigma to his work, Banerji added.

The Manpower study, however, said thatregulatory reforms, government initiativeto promote skills development, a nd a drop indemand from European markets have easedIndian employers struggle to get the rightcandidate.

48% of Employers Struggle to Find theRight Candidates: Manpower Survey

Air India Wont TakeDreamliners UntilCompensation Fixed

Thecompensationamount couldvary fromanywherebetween $145million and$800 million,said a sourcewithoutdivulging theexact figure

Talent ShortageTop skills that are hardest to find in 2012

IT Staff

Marketing/Public Relations/Communications Staff

Secretaries, OfficeSupport Staff &Admin Assistants

Sales Representative Researchers (R&D)

InsuranceStaff

FinanceStaff

Call CentreOperators

Engin eers Teachers

In the article titled Ashok LeylandFin Eyes PE Stake which appeared onETs edition dated May 29, the name of thecompany is Hinduja Leyland Finance andnot Ashok Leyland Finance. The error isregretted.

A Clarification

7/31/2019 ET_30May

3/7

6 THE ECONOMIC TIMES | N EW DELHI | WEDNESDAY | 30 MAY 2012Corporate

JOJI THOMAS PHILIPNEW DELHI

The telecoms department(DoT) has shot off clarifica-tions to seven ministries,

which had opposed various pro-posals in the new telecom policy, as

it attempts to get Cabinet approvalfor the revised rules that will re-place the existing decade-oldframework.

It is learnt that the Union Cabinetdid not approve the National Tele-com Policy when it met last week asit wanted the communicationsministry to address the concernsraised by different government de-partments on the new rules. Thecommunications ministry hasnow moved a supplementary Cabi-net note citing its response to theobjections of each of the minis-tries, officials aware of the devel-opments told ET.

The DoT has reiterated to the de-partment of economic affairs thatthe primary goal of the new frame-work would be to maximise publicgood by making available afforda-ble, reliable and secure telecomand broadband services and addedthat direct revenue generalisationwould continue to be a secondaryobjective. At the same time, it hasalso clarified that all future licenc-

es and spectrum would only bemade available through market-re-lated processes.

It has also assured the depart-ment of economic affairs that itwould seek fresh Cabinet approv-

als before implementing proposalsin the new policy that have finan-cial implications such as plans tooffer domestic telecom equipmentmakers loans for five-year periodon subsidised terms in addition toa 10-year income tax holiday andconcessions on excise duty andVAT. The DoT has also agreed toseek separate approvals for otherpolicy initiatives including theproposal to set up a . 10,000 croretelecom R&D fund and a . 3,000

crore mobile equipment manufac-turing fund to support local hard-ware manufacturers.

Apart from objecting to clauses inthe policy that called for large fi-nancial outlays, the economic af-

fairs department had also opposedthe new framework consideringrevenue generation as a secondaryobjective.

The DoT has told the CommerceMinistry that its plans to give pref-erential access and tax cuts to in-digenously manufactured tele-coms equipment, and alsomandate that mobile phone compa-nies buy a bulk of the networkshardware from domestic compa-nies, was only an extension of the

Union Cabinets February 2012 de-cision to offer concessions to do-mestic IT and electronics manufac-turers.

The commerce ministry had op-posed this on the grounds that it

was against the provisions of theTrade Related Investment Mea-sures ( TRIMs) agreement underthe , of which India is a signatory.The commerce ministry had alsosaid that providing subsidies touse domestically manufacturedequipment was against the princi-

ples of the Agreement of Subsidiesand Countervailing Measures(ASCM).

The DoT has approved and incor-porated sector regulator Trais rec-ommendations that mobile phonecompanies be mandated to source80% of their network equipmentand other related infrastructurefrom domestic manufacturers by2020 into the new policy. The pro-posed new rules also states that mo-bile phone companies that fail tosecure network related hardwaredomestically will be subject to fi-nancial penalties equivalent to cer-tain percent of their imports.

In a bid to address the concerns ofthe department of financial servic-es, the DoT has said that the newpolicy will give telecom an infras-tructure status, even as it has delet-ed a clause that said that mobilephone companies would be eligiblefor financing from organizationslike India Infrastructure FinanceCompany Ltd (IIFCL). The financeministry had said that the Empo-

wered Committee would take a fi-nal view on this issue and hadsought that the specific referenceto IIFCL be deleted from NTP-12.

In a related development, the tele-coms department has assured the

Information and Broadcasting(I&B) ministry that delinking li-cences from spectrum in the futurewould not apply to the broadcast-ing sector. It has further added thattransport of triple play services voice, video and data though a tele-com link did not imply unification

of licencing. On convergence,where the proposed policy envisag-es to leverage Cable TV infrastruc-ture for last mile wireline tripleplay services, the DoT has said thatspecific steps would be worked outlater in consultation with the I&Bministry.

The Information and Broadcast-ing (I&B) ministry had objected tothe proposed new telecoms policyon two counts. It sought clarity ofconvergence of local TV networkspost digitalization and argued thatthe plan to delink licenses fromspectrum would have far reachingimplications on its guidelines foruplinking and downlinking of TVchannels and also the next phase ofFM Radio permits auctions. Li-cense of 839 FM channels are to beawarded by way of ascending e-auction process under FM Phase-III. As per policy, the successful bid-ders will automatically get the ra-dio spectrum after issuing Letter ofIntent by the I&B Ministry. Theprocess of e-auction channels is al-

ready underway and the proposedprovision would derail the entireprocess of e-auction and FM chan-nels and create confusion amongstprospective bidders, the I&B min-istry had said.

DoT Replies to Queries on NTPSends clarifications to seven ministries, which had opposed various proposals in the new telecom policy

Call Waiting

DoT has reiterated to the

department of economic

affairs that the primary goal

of the new framework would

be to maximise public good

it has also clarified that all

future licences and spectrum

would only be made available

via market-related processes

It has also said that it would

seek fresh Cabinet approvals

before implementing propos-

als in the new policy that have

financial implications

INDU NANDAKUMARBANGALORE

Troubled PC-maker Hewlett-Packard's business process out-sourcing subsidiary in India,MphasiS, is expected to reportanother weak quarter earningson Friday. Continued weakne ssin the work it gets from HP which contributes more than halfof MphasiS's revenues is ex-pected to continue to be a drag, es-pecially with the large-scale lay-offs recently announced at HP,which after a long period of man-agement musical chair, is tryingto find its feet again.

It is unclear if HPs recent an-nouncement about plans to lay off27,000 employees by the end of fis-cal 2014 will have a significant im-pact on MphasiS upcoming earn-ings. Analysts have projected a1-2% growth in sales in dollarterms during the April quarter.

The Bangalore-based company,once touted to be a strong conten-der in the mid-cap space, has beenlagging its peers over the past fewquarters. HP contributed 58% toMphasiS revenue in the previousquarter. During the three months

to January 31, 2012, MphasiS sawrevenues from HP fall 4%.

MphasiS' performance largelydepends on stability from its HPchannel, said Manik Taneja,Emkay Global Financial Servic-es. We will have to wait and seewhat impact non-HP businesscould have on the firm.

Emkay estimates revenues to beat . 1,365 crore, and net profit to be

at . 186 crore.Dont expect any signs of reviv-

al from MphasiS during thisquarter, a Mumbai-based ana-lyst said, on conditions of ano-nymity. The firm has been work-ing hard to keep its cost undercontrol, so this should reflect inits margins.

During the first quarter endedon January 31, 2012, MphasiS hadreported 18% decline in its netprofits at . 185 crore versus . 227crore a year before. At least fivebrokerages ET spoke to said they

expected a 50 ba-sis point expan-sion in MphasiSoperating profitmargins becauseof continued costreduction effortsby the firm.

What is going tobe critical is thenon-HP businessthat the companycan generate andif that can com-

pensate any potential loss ofbusiness and pricing from HPsbusiness. The management es-timates that the channel will

grow by 3-4% sequentially in dol-lar terms and this momentumwill continue in the foreseeablefuture, SBICAP Securities ana-lyst Dinesh Mehta and AnkitPande wrote in a report in theirlatest client note on MphasiS.Out of the 28 new clients Mpha-siS won during the previousquarter, 18 came through the di-rect channel.

Falling HP Biz mayDrag MphasiSQuarterly Earnings

The cosability to

generatenon-HPbusiness iscritical foroffsettingpotential lossof businessand pricing

from HP

OUR BUREAUMUMBAI

Poweredby Jaguar LandRover, Ta-ta Motors, Indias largest auto-maker reported a massive 136%surge in consolidated net profit to. 6,234 crore, making up for a sub-dued performance by the auto gi-ant in India.

The net profit of Tata Motorsmore than doubled for fourth quar-ter ended March, driven by over48.2% growth in Jaguar Land Rov-er volumes which contributedabout 95% of profits of its Indianparent. The company revealed thenet profit also included tax creditof around. 1,800 crore. During Q4FY-12, we recognized GBP 217 mil-lion of deferred tax assets (addi-tional GBP 171 million through re-

serves), on account of sustainedimprovement in business per-formance and certainty of futureprofitability outlook, said the re-sults presentation on the websiteof Tata Motors

JLRs parent, Tata Motors, couldnot keep pace with its standaloneprofits declining on account ofsluggish market condition.

The EBIDTA margins for Q4 de-clined marginally by 30 basispoints to 14.3%, when the market

expected a jump of over 100 basispoints. One basis point is one hun-dredth of a percentage.

The consolidated net revenuesfor the quarter jumped 44.3% at. 50,908 crore largely driven byJLR. The continued strong reve-nue and profit performance washelped by strong volume growth,improved product & market mix.China and developing marketsshowed strong demand but the sit-uation in Europe and other devel-oped markets remains under pres-sure, the company said.

Thanks to the sustained demand,JLR plans to increase the capitalexpenditure for FY13 to 2 billionpounds from its earlier plan of in-

vesting 1.5 billion. This increasedcapex will go towards its invest-ment in its Chinese JV with Cher-ry Automobile and a new engineplant in Wolverhampton.

To meet rising demand and fu-ture product launches, the compa-ny has added 1,000 new employeesat each of Halewood and Solihull

plants, in additionto a third shift.

JLR also ap-proved the consoli-

dation of busi-nesses of JaguarCar Ltd & LandRover into one le-gal entity to benamed JaguarLand Rover Ltd inMarch 2012, this islikely to be effec-

tive from this fiscal.JLR registered net sales of 4.1

billion for Q4, which was up 51.5%from 2.73 billion it posted for thesame period last fiscal and the op-erating profit jumped 61.5% to 605million.

While things look good on theJLR front, the pressure on the do-mestic market is continuing.

Tata Motor's standalone profit af-ter tax for the fourth quarter de-clined marginally by 1.4% to . 565crore compared to . 573 crore forthe same period last year, but forthe full fiscal year FY-12, the netprofit declined 31.4% at . 1,242.2crore.

An analyst who did not want to bequoted said: tough times in the do-mestic market will continue. TataMotors will have to bring in newerproducts such as the Nano diesel to

improve its volumes which are in-creasingly under pressure.

There are hardly any positivetriggers in the domestic market.Pressure on commercial vehicleswill remain, since the cost of ac-quisition has gone up due to in-crease in excise duty and very highinterest rates, the cost of operationhas also gone up with the increasein road tax. And due to inflation-ary pressure, the freight rates arealso under pressure, this all willput pressure on truck buying, theanalyst added.

On the truck front, the companyis seeing demand pressure forsome medium and heavy trucks,but a good monsoon and increase

spend in infrastructure with an ex-pected moderation of interestrates, may result in demand pick-ing up, the company in a statementsaid.

Tata Motors consolidated reve-nue for FY-12 stood at . 1,65,655crore up 35.6% compared to. 1,22,128 crore registered in FY-11.And the consolidated net profit forFY-12 stood 45% higher than FY11,at . 13,517 crore.

JLR Drives Tata Motors Net up 136%UK co posts 48.2%

growth in volumes;

contributes 95% of

parents bottom line

CABINET YET TO OKAY POLICY, WILL GIVE NOD ONLY AFTER MINISTRY ADDRESSES CONCERNS

Cyrus P Mistry, executive deputy

chairman of Tata Sons, has been in-

ducted to the Board of Tata Motors as a

director, the company said in a state-

ment on Tuesday. A director of Tata

Sons since 2006, Mistry was appoint-

ed as deputy chairman of Tata Sons in

November 2011. Apart from Tata Mo-

tors, Mistry also holds a director's po-

sition in Tata Industries, Tata Steel, Ta-

ta Power Company, Tata Teleservices

and Tata Consultancy Services.

Mistry Inducted onTata Motors Board

OUR BUREAUMUMBAI

Shipping Corporation of India(SCI) plunged into a massive lossfor the year ended March 2012 asfuel and interest costs soared.

Mumbai-based SCI posted a lossof . 428 crore compared with a netprofit of . 567 crore in the year agoperiod. Bunker fuel costs morethan doubled, while finance costsrose as much as six times to . 387crore. SCI's total revenue for theyear rose 13% to . 4,308 crore.The results are in sync with thetrend globally. Many of the ship-ping companies across the globeare posting losses. Going for-ward, we have restructured someof our liner services, but we arenot very sure that the bulk mar-ket will improve. Tanker and off-shore division should grow in thecoming months, S Hajara,chairman, SCI told ET. SCI loss in

the Jan-March quarter alone was. 355 crore. The companys reve-nue for the full year rose 13% to. 4,308 crore. Shares of SCI rosemarginally to close at . 55.65 in anotherwise flat BSE ahead of theresults.

SCI had said that the companywas looking to acquire around 62vessels in the 11th plan period ex-tending from 2007-2012 at an esti-mated cost of $5 billion, but aslow down in the global economyand excess supply of vesselsforced it to nearly halve it to 36.

The increase in crude oil pricesover the last year led to a sharphike in prices of bunker fuel,which is a type of fuel oil that isused in ships. Singapore's bench-mark bunker price BK 380 rose toas much as $719 per t onne in May.Bunker fuel costs, on an average,form nearly one-third of the totaloperating costs for shipping com-panies.

SCI Posts . 428-cr Losson Fuel, Interest Costs

PRESS TRUST OF INDIAON BOARD PMS AIRCRAFT | YANGON

Dismissing any comparison withthe 1991 external debt crisis,Prime Minister ManmohanSingh on Tuesday said the fall ofrupee is a matter of concern butwas confident it will not last verylong. He said the rupee deprecia-tion was taking place against thebackdrop of the global economicproblems and the Euro zone debtcrisis and expressed optimismthat solutions will emerge at theG-20 Summit in Mexico nextmonth.

The sharp fall of rupee is a mat-ter of concern. But I don't thinkwe are anywhere near the 1991 sit-uation. The fall of rupee is takingplace against the backdrop ofglobal economic problems and

the Euro zone debt crisis.This is a phenomenon which is

not going to last very long, hetold reporters while returning af-ter a three-day visit to Myanmar.After touching a record low of56.38 to a dollar, the value of rupeehas been fluctuating in the lastfew days. On Tuesday, it closed at55.67. Since early March, the ru-pee has depreciated by over 10%.In 1991, India faced its worst ex-ternal debt crisis and was forcedto pledge gold abroad to redeemloans with the IMF.

The Prime Minister, who will beattending the G-20 Summit nextmonth, said global economicproblems and the Euro zone cri-sis will be solved. In nextmonth's G-20 meeting in Mexico,hopefully some credible solutionwill emerge, he said. The PrimeMinister said the prevailing eco-nomic situation was hurtingemerging economies like Indiaand South Africa. Faced with

roadblocks in pushing the reformagenda at home, the PM said thatthe path of economic liberalisa-tion is contentious and rarelypainless. Singh said that whilepursing the economic reforms,special measures should be takento help disadvantage people.

The path of economic reform isoften contentious and rarelypainless. In the process of open-

ing up, special measures need tobe taken to help disadvantagedsections of society who are notyet empowered to benefit fromthe fruits of growth and globali-sation, he said.

Singh emphasised the need foreconomic development withoutthreatening environment or thedelicate ecological balance.

At home, the Manmohan Singh-led UPA government is up againstthe tough challenge of pushingthe economic reforms agenda inthe face of opposition from its keyallies. The pending reforms in-clude FDI in retail, deregulationof diesel and cooking gas prices,and taxation policy changes.

Referring to bilateral economicties, the Prime Minister said:Myanmar is a critical partner inIndia's 'Look East' policy and isperfectly situated to play the roleof an economic bridge betweenIndia and China and betweenSouth and South-East Asia.

Singh said India and Myanmarshould work together to create aregional economy that can be-come a hub for trade, investmentand communication in the re-gion. Better communication isthe best way of promoting eco-nomic integration and there ismuch we can do to revive andbuild arteries of communica-

tion, he added.Singh informed that Myanmargovernment has invited India toassist in the development of twoareas contiguous to our border,namely the Naga Self Adminis-tered Zone of the Sagaing Regionand the Chin State. We hope toimplement small developmentprojects that have been success-ful elsewhere.

Rupee Fall Will

Not Last Long: PM

CONFIDENT: Manmohan Singh

Tata Motor'sstandalone

profit aftertax for the

fourthquarterdeclinedmarginallyby 1.4% to. 565 crore

OUR BUREAUMUMBAI

Dilip Shanghvi, who has built SunPharma into Indias most valuabledrugmaker in less than three dec-ades, has stepped down as its chair-man in favour of Israel Markov, theformer CEO of Taro Pharma, in amove intended to reinforce theMumbai-based companys trans-

formation into a generic drug-mak-er with global ambitions.Taro Pharmaceutical Industries,

an Israeli drug-maker, was ac-quired by Sun Pharma in 2010 aftera three-year battle between Sangh-vi and Taros earlier owner, BarrieLevitt. The successful consumma-tion of the take-over signalledSuns determination to emerge as aglobal player in the generic drugmarket.

Markov, who headed Taro be-tween 2002 and 2007, is the secondprofessional with a global pedigreeto join Sun. Shanghvi, who set upSun Pharma in Kolkata in 1983 andwho will continue as managing di-rector, had hired Kalyan (Kal) Sun-daram from GSK as the company'sCEO in 2009.

On Tuesday, Sun Pharma report-ed a 59% jump in its net sales at. 2,329 crore as against . 1,463 crorefor the fourth quarter ended March

31 2012, backed bystrong growth inthe US marketand an above av-erage perform-ance from its Is-raeli subsidiary,Taro.

The company re-ported a consoli-dated net profit of

. 820.21 crore compared to . 442.75crore for the same period of previ-ous fiscal. For the year ended March31, 2012, the company posted a netprofit of . 2,587.25 crore compared to. 1,816.06 crore in 2010-11. The brand-

ed generics business in India grewby 14% this quarter at . 695 crore.The company is clear that it wantsto go global, it wants to build leader-ship which are global, and these ap-pointments are also reflective ofthat thought, said Ajit MahadevanPartner Life Sciences, E&Y. SunPharma has managed to turnaround its Israel i subsidiary. Taro'sFY 2011 net sales were $506 million,an increase of 29% over last yearand a net profit of $183 million.

However, the company wanedthat these numbers were not sus-tainable. The growth in sales andprofit in the quarter was derivedfrom price increase on select prod-ucts in the US and may not be sus-tainable, said Sudhir Walia Wholetime Director, Sun pharma in an

analyst call. Sun Pharma stockclosed 0.7% down on the BSE onTuesday at . 565.65.

Sun also said it is still in the proc-ess of acquiring minority shares ofTaro Pharma and said it remainsinterested in acquiring 100% of thecompany. T he minority sharehol-ders of Taro have demanded thatSun Pharma increase its offerprice from the current $24 whichthe company is offering. Sun hasgiven no indication of doing this.

We are interested in acquiring100% of the company through buy-ing out the minority shareholders.Now there is a very rigidly followedprocess in the US and in Israel toprotect the interest of the minorityand that is something that we willfollow fully, said Shanghvi.

Sun Pharmas Dilip Shanghvi Steps DownFormer Taro CEO Israel

Markov to take over as

chairman; Sun Founder

to continue as MDMove intendedto reinforce thecompanystransformation

into a genericdrugmakerwith globalambitions.

HITESH RAJ BHAGATNEW DELHI

Samsung launched its top-of-the-line smartphone Galaxy S III inEurope on Tuesday, hoping to doeven better than its previous mod-el and take the g ame further awayfrom Apple.

Due to be launched in India onWednesday, the Galaxy S III hasgarnered upwards of 9 million pre-orders worldwide (the iPhone 4Smanaged about 4 million), and thiskind of pre-launch buzz was neverseen from a non-Apple device.Whats even more interesting isthat the Korean company is readyto take on Apple at its own game, in-cluding the hype that surrounds alaunch. Having become the worldslargest mobile phone manufactur-er (by unit sales) in April this year,

Samsung is now ready to have an-other go at Apple, which is still byfar the more profitable.

Samsung plans to use Galaxy S IIIto win over customers from theiPhone camp. The S III whips theiPhone 4S on specs and may evenhave a leg-up on the yet to belaunched iPhone 5.

According to the Daily Mail,Trusted Reviews concluded the

S3 is light years ahead of Applesprofitable darling.

But Apple loyalists are quick topoint out that its never been aboutthe hardware specifications, butmore about the experience and in-tuitiveness of the platform. Whilethat may be true, it seems thatSamsung is sparing no effort to im-prove its overall user experienceas well.

The Galaxy III provides a natu-ral, ergonomic shape, a dazzling

4.8-inch super AMOLED screenand a great camera. It also bringssome firsts into the smartphonearena: a screen that stays on aslong as you keep looking at it, wire-less charging, HD video playbackin a small screen while you do oth-er tasks and automatic calling of acontact when you hold it to yourear. The reviews and first impres-sions that are pouring in so far arequite ecstatic. CNET calls the Gal-axy S III the Ferrari of androidphones, one that's pretty muchunrivalled in the speed and powerstakes right now.

Matt Warman, The Telegraphs(UK) consumer technology editor,praised the S III by calling it thefirst phone where he almost forgotthat he was actually using a phoneand not a full-fledged computer.

Prominent gadget blog Engadget

says that the power and storage-hungry Android user simply can-not go wrong with this purchase.Slashgear calls the S III one of thebest performing, most usable An-droid devices around, if not thebest. On Wednesday, well havemore details on the device, includ-ing the final price (expected to bein the range of . 36,000-38,000) andstore availability.

Galaxy S III Takes on iPhone,

to Hit Indian Stores Today

OUR BUREAUNEW DELHI

Shareholders of Escorts Ltd haveapproved a controversial restruc-turing proposal that envisagesthe merger of one subsidiary andtwo affiliates with the tractormaker, a Punjab and HaryanaHigh Court-appointed commit-tee said on Tue sday.

The decision, taken at an ex-traordinary general meeting inPanchkula in Haryana on May 21,will help promoter Rajan Nanda

and his family consolidate theircontrol over the flagship firm to alittle over 41%. The Nanda familyowns 12.43% stake in the compa-ny. The EGM was co nvened on theorders of the court and it took thecourt-appointed committee aweek to count all the votes.

The proposal was ratified bythe more than three-fourth of the

shareholders present in the meet-ing, Escorts executive vice-pres-ident and company secretary GBMathur told ET.

The three firms are wholly-own-ed subsidiary Escorts Construc-tion Equipment Ltd (ECEL), andassociate firms Escorts FinanceInvestments & Leasing Pvt Ltd(EFILL) and Escotrac Finance &

Investments PvtLtd (Escotrac).

The three firmsand the flagshipcompany havecrossholdings.While Escortsowns 49.81% inEscotrac andEFILL, the twocompanies own49.81% in eachother. Escotracand EFILL own12.83% and 6.5%,

respectively in Escorts.Experts say ratification of the

merger strengthens position ofthe Nanda family and puts at restany hostile takeover moves bypredators. There were reportsover the past few months that anIndian business group with inter-ests in automotives and softwarewas eyeing Escorts.

Escorts Shareholders

OK Rejig Proposal

Decisionto helppromoterRajan Nandaand his

familyconsolidatetheir controlover theflagship firmto a littleover 41%

One subsidiary and

two affiliates to be

merged with the

tractor maker

7/31/2019 ET_30May

4/7

Markets + FinanceDollars in Mind, QFIs Get toInvest $1 b in Corp BondsECONOMY15

Market TrendsStock Indices

SENSEX 16438.58 0.13%

NIFTY 4990.10 0.09%

NIKKEI 8657.08 0.74%

HANG SENG 19055.46 1.35%

AbsoluteChangeCurrencies

US DOLLAR 55.68 0.49

EURO 69.79 0.33

Oil

DUBAI CRUDE $ 104.70 0.05

Gold (. /10gm)

GOLD SPOT: MUMBAI 29235 155

GOLD SPOT: DELHI 29510 50

Bond Yields

10-Y GOI 8.52 0.01%

STRAIT TIMES 2801.85 0.52%

Aditya Birla Money Asks

Non-performers to LeaveThe broking industry is abuzz with talk that

Aditya Birla Money, the broking outfit of Ad-

itya Birla Financial Services, has asked severaljunior and mid-level executives to leave in the past few

months. According to sources in broking circles, about

200 junior and mid-level executives mostly relation-

ship managers have been asked to go though senior

officials at Aditya Birla Financial Services denied this.

Weve only done a normal process of removing non-

performers. But weve not thrown out 200 employees...

That number is grossly incorrect, said a senior official

of Aditya Birla Financial Services.

Contributed byShailesh Menon

Heard on the Street

Weak Rupee not a Worry for JPForeign investment bank JP Morgan will hold a more

positive view on the weak rupee instead of narrowly fo-

cusing on currency-led EPS gains. According to analysts

at JP Morgan, weak rupee will allow companies to front-

load their investments in improving their business mod-

els. Companies such as TCS and HCL Technologies are

looking to bring their investments forward, whether in-

to new markets, new delivery models, realising poten-

tial in emerging areas such as cloud, mobility, analyticsand strengthening sales and marketing that fortify the

medium-to-longer-term health of the companys busi-

ness model.

Morgan Stanley Upgrades RILMorgan Stanley has upgraded Reliance Industries from

Underweight to Equalweight, maintaining its target

price at . 703 citing attractive valuations. The stock has

underperformed the market by about 10% since Re-

liance announced its share buy-back programme be-

cause of continued concerns about its E&P business and

weaker outlook for refining and petrochemicals. The

market is now already discounting most of the concerns

about the stock, the Morgan Stanley report said. Abso-

lute valuations are now attractive and, on a relative ba-

sis, the stock is trading in line with historical levels, sug-

gesting limited downside, the report added.

Barclays Overweight on CILBarclays has assigned an Overweight rating to Coal In-

dia on the back higher price realisations. Coal Indias

fourth quarter results were significantly ahead of our

estimates and the consensus forecasts. The key high-light was a sharp increase in realisations even after ad-

justing for . 1,000 crore of incentives booked in fourth

quarter, said analysts at Barclays. The sharp spike in re-

alisations was the result of several factors, including an

increase in premiums for non-power volumes and pos-

sibly also on the back of the roll-over to a GCV-based

pricing mechanism.

Brokers Call

DIVYA RAJAGOPALMUMBAI

Three global giants are interest-ed in purchasing Dutch firmING Asset Managements In-

dian mutual fund business, whichmay be carved out of the Asian oper-ations and sold separately.

South Koreas Mirae, Vanguardand US-based Pramerica have heldtalks with ING on the issue, peopleclose to the transaction toldET.

ING is selling its Asia-Pacific insur-ance and asset management busi-nesses to help repay the assistanceprovided by the Dutch governmentin 2008 at the time of the global finan-cial markets meltdown. The compa-ny is hoping to raise $7 billion.

The Indian business is tiny com-pared with the Asian operations,having assets of only . 797 crore as ofApril this year and is barely profit-able. A separate sale is likely to fetch

only . 40 crore, an industry officialestimated. ING and Mirae did not re-spond to the email query sent by ET.A Vanguard spokesperson said thenews was not true.

A lot of players are below thethreshold of meaningful acquisi-tions, and lot of these companiesmight not add much value to thosewho acquire them, said Dhirendra

Kumar, founder and chief executive,Value Research.

Mirae wants to expand in India bybuying up smaller firms and hadheld talks in the past with funds suchas Taurus. A purchase of ING willadd to Miraes meagre assets of . 500crore and help it touch the . 1,500-crore mark. Vanguard, on the otherhand, has been looking to enter In-dia, and an acquisition will give thecompany a small but important baseto start operations.

The Indian mutual fund industrymanages asset worth . 6.80 lakhcrore, according to Sebi data. Butgrowth in the past few years has beenslow and anaemic, given extremelyvolatile market conditions, a slow-ing economy and a government pa-ralysed by allegations of corruptionand insipid leadership.

The industry is highly fragmentedwith many players operating on wa-fer-thin margins. Only the top half-a-

dozen funds manage to make money,and the exit ofFidel ity has increasedthe clamour for consolidation in theindustry. The US giant sold its busi-ness in India to L&T Finance earlierthis year, the second major exit afterStanCharts sale to IDFC in 2009.

Prospects of a revival hinge uponbetter sentiment and higher inflows.While the first depends upon govern-

under management stagnating at a4% CAGR over the past three years.

Mutual fund investment in Indiacontinues to be low across both re-tail and institutional segments.AUM as a percentage of GDP ispegged at 8%, compared with 79%in the US and 39% in Brazil.

[email protected]

ment, corporate and global develop-ments, the second appears a muchtougher proposition given the ac-tions of institutional and retail in-vestors. A recent McKinsey reportsays that retail investment inflowsinto mutual funds are just 57% ofwhat they were during the pre-crisisperiod. Institutional inflows have al-so come down with the overall asset

Global Giants Eye INGsFund Business in IndiaS Koreas Mirae, Vanguard & US-based Pramerica seen in talks to buy Dutch firms business here

OUR BUREAUMUMBAI

Benchmark indices ended marginally

higher on Tues day, giving up most oftheir gains in the second half of thetrading session, tracking the rupee,which ended lower because of themonth-end dollar demand by impor-ters and corporates.

The Sensex closed up 0.13% at 16438.58points, off the days high by 105 points, asthe rupee shed 49 points to end at 55.67versus the dollar. The Nifty ended up a

tenth of a percent at 4990.1. TCS, MarutiSuzuki, Coal India and Wipro wereamong the gainers, rising 1.4-2.72%,while losers included Cipla, Bharti Air-tel, Sterlite and ITC.

Markets are not yet out of thewoods, said Sonam Udasi, researchhead, IDBI Capital. The hike in petrol

prices was perceived as a reformistmove but, going forward, if theresnothing more in terms of reforms wecould see a 50-point swing either ways.

Rajesh Baheti, MD, Crosseas CapitalServices, said activity was being seen inout-of-the Nifty puts up to strikes of 4500in June series which indicated peoplewere buying cover against a possible fallto lower levels.

Sensex Pares Intra-day Gainson Month-end Dollar Demand

Market ReportThe simplest solution will be forGermany itself to leave the euro ---

P. Boone and S. Johnson

@economonitor

Economonitor

The grip of deleveraging resembles

a boa constrictor. Slowly, slowly air

is squeezed out of financial markets

@PIMCO

Bill GrossMD, Pimco

Tweet BazaarET brings you select tweets from

economists, policy makers, market

experts et al on the unfolding eventsthat move the world and markets

Steady slide in euro should

eventually offer some support to

region, but not enough, or quickly

enough, to make a difference

Spain bond yields at danger levels.

Gov says it doesnt need euro

funded bank bailout. But is arguing

for collectivisation of euro risks

@ robinbew

Robin Bew

Editorial Director, EconomistIntelligence Unit

7/31/2019 ET_30May

5/7

15WWW.ECONOMICTIMES.COM

Economy

Fin Bill Gets Prez Assent,Voda Notice May Follow Soon

NEW DELHI The Finance Bill 2012

has received presidential assent,

clearing the way for the govern-

ment to send a tax notice to Voda-

fone. President Praibha Patil gave her assent

to the bill on Monday. The Bill was passed by

the Lok Sabha on May 8 and the Rajya Sabha on

May 16. It includes the controversial retro-

spective amendment to the income tax lawthat the government is likely to invoke to tax

Vodafones acquisition of Hutch India. The ret-

rospective amendment gives government the

right to tax transfer of Indian assets even if the

deal is entered into outside India.

25 FDI Proposals Worth.2,973 crore Cleared

NEW DELHI The government on

Tuesday said it has cleared 25 for-

eign direct investment (FDI) pro-

posals, including that of AIF III of

Mauritius and Microqual Techno of Mumbai,

worth . 2,973.40 crore. The applications were

cleared after recommendations of the Foreign

Investment Promotion Board, headed by Eco-

nomic Affairs Secretary R Gopalan, the Finance

Ministry said. As per the ministry, application

of AIF III to bring in FDI worth . 1,000 crore has

been approved. The Mauritius-based firm pro-

poses to induct foreign investment in the units

of a fund constituted as a trust. Microqual

Techno plans to increase foreign equity in itswireless telecommunications business. The

proposal is worth . 522.90 crore. The proposal

of Mauritius-based Mozart for infusion of for-

eign investment in an existing company in the

pharmaceuticals sector has also been ap-

proved. The company has proposed to bring in

. 300 crore.

Industrial Production mayRise to 6.9% in FY13: CMIE

MUMBAI Indias industrial produc-

tion is expected to accelerate to

6.9% in FY13, from 3.9% estimated

for FY12, an economic think-tank

said. The growth will pick up due to easing of

supply constrains, particularly in the mining

sector, and further acceleration in electricity

generation, Centre for Monitoring Indian

Economy said here. The performance of the

manufacturing sector is also expe cted to im-

prove in FY13, owing to an increase i n the

purchasing power of both the urban and the

rural consumers, improvement in availabil-ity of raw materials and huge capacity addi-

tions, the CMIE report said. We expect the

mining sector to stage a good recovery and

pull up overall industrial produ ction in FY13.

Output in mined products is expected to grow

by 5.5% in FY13, after falling 2% in the pre-

ceding year.

Short Takes

OUR BUREAUNEW DELHI

T

he government on Tuesday set aseparate $1-billion corporate bondinvestment limit for individual for-

eign investors. It also allowed them toopen rupee accounts and removed the re-striction on the un-invested funds in a bidto boost capital inflows to bridge the cur-rent account deficit.

The finance ministry also expandedthe list of countries from which such in-vestments will be permitted, hoping toentice investors with high yields availa-ble on Indian paper.

A separate sub-limit of $1 billion hasbeen created for QFI investment in corpo-rate bonds and mutual fund debtschemes, Thomas Mathew, Joint Secre-tary (Capital Market Division), Ministryof Finance, said.

FM Pranab Mukherjee had in the bud-get allowed qualified foreign investors, orQFIs, to invest in Indian corporate debt.

The foreign investment limit in corpo-rate debt, which will now increase by $1billion to $21 billion, will boost debt in-flows even as portfolio investments arelikely to remain muted till there is uncer-tainty over the rupee.

The finance ministry hopes to sell Indi-an bonds to investors in Bahrain, Oman,

UAE, Kuwait, and Saudi Arabia in roadshows beginning June 10.

We are looking at 6-14 months to see theoptimisation of QFI inflows, Mathew said.

The scheme was earlier open to only res-idents of countries that are members ofFinancial Action Task Force, or FATF, aglobal body to check money launderingand terror funding.

The North Block has now relaxed the el i-gibility condition to allow investors fromGulf Cooperation Council (GCC) and alsothe European Commission to invest in In-dian debt if they meet the local rules.

Several enquiries were received fromEC and GCC, requesting for inclusion of

their residents as QFI,Mathew said.

Such investors willnow be able to open non-interest bearing rupeeaccounts with author-ised banks in India forremitting funds for in-vestments. At present,QFIs can invest onlythrough a commonpooled account of theirdepository participant.

The finance ministry has also decided todrop the five-day investment window.Currently, if an investor is not able to de-ploy the funds brought in within five daysthen the balance has to be sent back to hishome nation. This was a big dampener be-cause of the high cost of funds transfer.

The income tax department will issue

the tax details separately. The changeswill become operational once the RBI andSebi issue relevant notifications withinseven days.

Dollars in Mind, Finmin LetsQFIs Invest $1b in Corp BondsFinmin allows investment from residents of Gulf nations and drops 5-day investment window

investors willnow be ableto opennon-interestbearing Re

accounts withbanks in Indiafor remittingfunds forinvestments

Who are qualifiedforeign investors (QFIs)?

A resident of a country thatis a member of the Financial

Action Task Force (FATF) or

member of a group which,

in turn, is member of this

global body against money

laundering and terror funding.

Resident of a country signatory

to International Organization of

Securities Commissions (IOSCO)

or has signed a bilateral

agreement with Sebi.

Where can they invest?QFIs are now allowed to invest in

all the three important segments

of capital market mutual funds,

equities and corporate debt

Why has this been done?Indias current account deficit is said to have

widened to over 3.6% of GDP

The capital flows needed to fill this current

account gap have been muted

With weak appetite for risky assets very low,the government is trying to spur debt flow

Investment First

DHEERAJ TIWARI &DEVIKA BANERJINEW DELHI

The government's infrastruc-ture financing arm, IIFCL,should shift its focus to creditenhancement and long-termlending to utilize its resourcesbetter instead of competingwith banks, the Planning Com-mission has said.

The apex planning body hasalso suggested that the ReserveBank of Indias norms limitingexposure to a business groupand to a single company shouldnot apply to IIFCL as all lend-ing done by it has implicit sov-ereign guarantee. Capital ade-quacy norms should also berelaxed, the plan panel has sug-

gested. The commissionsideas were discussed at a meet-ing with finance ministry offi-cials last Friday.

Credit enhancement, essen-tially a guarantee given byIIFCL, enables insurance com-panies and pension funds tobuy bonds issued by infras-tructure companies as theguarantee leads to a highercredit rating for the tool.

IIFCL has become just likeany other lending agency. Itneeds to focus on long-termcredit growth and takeout fi-nancing schemes, said a seniorofficial in the Planning Com-mission. Takeout financing re-fers to practice of lenders to theinitial stage of a project sellingtheir loans to other financiers.

Currently, IIFCL is not fulfill-ing the purpose for which itwas set up, the official said.

The commission's proposal,however, is likely to be opposed

by the Finance Ministry thathas questioned the feasibilityof stopping all direct lendingby IIFCL.

As of now, we are trying to getasp ecial status within the cate-gory of NBFC that carry out in-frastructure financing. Let thepilot projects on credit enhan-

cement work. We will come outwith a full-fledged scheme byDecember and then we can lookat curtailing other portfolio, afinance ministry official said.

An expert panel set up to esti-mate investment requirementsfor the infrastructure sectorfor the 12th plan period (2012-17) has raised doubts aboutavailability of funds for thesector in the absence of effortsto promote takeout financingand develop the countrys lack-lustre bond market. The com-mission has estimated an in-vestment deficit of . 14.6 lakhcrore over the next 5 years forthe sector.

While commercial banks hadstepped up lending to the sectorin the last 3 years, they will notbe able to sustain the momen-tum, according to the panel, un-less companies like IIFCL fillthe void by providing capitalfor longer duration at lower in-terest rates.

IIFCL Chairman SK Goel re-fused to comment on the plan-ning commissions ideas butclarified that the company is fo-cusing on takeout financing

and instru-

ments, such astaxable bonds,to meet the fi-nancing re-quirements ofinstrastruc-ture.

We financemostly public-private-part-nership, or PPP,

projects that constitute 80% ofthe total lending. We cannot bethe lead bank and our mandateis limited with focus towardsroad, power and transport sec-tor, he said.

The commission has also saidthat IIFCL should not offerloans below commercial ratesfor tenures similar to that ofbanks. There is need to dee-pen the bond market, raise cap-ital from long-term tools for fi-nancing infrastructure. IIFCLneeds to re-define itself if thefunding needs of infrastruc-

ture have to be met, the Plan-ning Commission official said.IIFCL is expected to play a ma-

jor role in infrastructure fi-nance, as the government hasproposed a trillion dollar in-vestment in infrastructureover the twelfth five year plan,beginning 2012.

Push TakeoutFinancing: PlanPanel to IIFCL

FinanceMinistry has,

however,questionedthe feasibilityof stoppingall directlending byIIFCL

RBI should ease

exposure, capital

adequacy norms

for infra lender,

says commission

OUR BUREAUNEW DELHI

The debt-ridden textile sector canlook forward to some relief as thegovernment has allowed restruc-turing of . 35,000-crore loans.

Following a meeting with Fi-nance Minister Pranab Mukher-jee, Textiles Minister AnandSharma said, The RBI will nowbe discussing the restructuringof loans.

Sharma also discussed fundingof export incentives that he pro-

poses to announce in the annualForeign Trade Policy on June 5.The meeting was also attended bycommerce secretary and the di-rector general of foreign trade.

According to Sharma, the totaldebt of the sector has risen to . 1.5lakh crore, of which . 35,000 croreneeded immediate restructuringand the government would soon

direct the banks to do the same.

An inter-ministerial committeewould be set up soon to help fast-track the restructuring. Further,it was decided that the restructur-ing package would be on a case-to-case basis and would be taken upby each bank separately.

Though the industry demandfor restructuring . 1-lakh-croreloans was not granted, still vari-

ous sector stakeholders, such asthe Apparel Export PromotionCouncil, welcomed the move.

This was much-needed and willhelp the industry to continue giv-ing employment to over 11 mil-lion workers and to meet exporttarget of $17,000 million set for2012-13, said A Sakthivel, Chair-man of AEPC.

More changes could be on the an-vil as the finance ministry and theRBI would be considering a 2-yearmoratorium on term loans, normson non-performing assets and con-

version of depleting working capi-tal into working capital term loansrepayable over 3-5 years.

The sector has been hit badly bythe global slump, a sharp fall incotton yarn prices and rise in wag-es. Besides, textile units have beenunable to repay their loans and ar-range for working capital due toincreases in bank interest rates.

FM Okays Resetting of. 35k-cr LoansRESPITE FOR TEXTILES SECTOR

The government is unlikely

to review its decision on al-

lowing cotton exports as do-

mestic prices have re-

mained stable after the

export ban was lifted last

month and there is no ap-parent scarcity in the local

markets. The group of min-

isters that lifted the export

ban on April 30 was sched-

uled to meet in three weeks

to reassess the situation.

No Going Back onCotton Exports

ALL IS WELL

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17WWW.ECONOMICTIMES.COM

Money & Banking

Retired CMDs and senior officials of state-

run banks are a busy lot these days. Re-

cently, the finance ministry has issued a

circular to all PSU banks that the interview

panel which selects officers for internalpromotions should have one external

member with experience in banking. The

ministry has also directed banks to com-

plete the promotions and transfers by

June itself so that the offi cers can be trans-

ferred before the beginning of the aca-

demic year. As a result, a number of banks

are conducting interviews and have in-

vited retired senior officials as members

on the panel.

DK MEHROTRA MOVES IN TO THECHAIRMANS CABIN AT LIC

After having waited for more than a year,

acting chairman DK Mehrotra has finally

moved to the chairmans cabin at Life Insur-

ance Corporation. The position is lying va-

cant for more than a year now. The govern-

ment had appointed Rakesh Singh,

additional secretary, member of finance, to

head LIC in May first week, but later Meh-

rotra was given the charge. The wait for the

cabin has come to an end. But when will the

wait to be appointed chairman officially

come to an end?

CYBER HACKERS TURN UP THE HEAT ONTHE RESERVE BANK OF INDIA

Cyber hackers got the better of the Reserve

Bank of India website last Thursday when

the central banks board members met in

Mussoorie, and the rupee fell to its lowest

to 56.38 per dollar. Investors, analysts and

dealers who looked for more information

on what the Board discussed were dis-

appointed due to lack of access to the web-

site. The governor had hinted at more mea-

sures being on the cards to minimise

speculation and increase inflows. But the

minutes could only be read the next day

when the website was restored.

RUMOURS GALORE AS DEUTSCHE BANKHUNTS FOR GUNIT CHADHAS SUCCESSOR

Speculation about who would succeed Gu-

nit Chadha at Deutsche Bank in India is get-

ting intense. Insider Ravneet Gill head of

corporate banking seems to be the topcontender. But there are murmurs that two

outsiders are also being considered for the

post. One may be the golf-loving country

head of a European bank and the other a

deal-maker from an American bank.

Theres also another rumour doing the

rounds Anshu Jain, who is taking over as

the co-CEO of Deutsche Bank may choose

to send a German to get a first-hand experi-

ence of India.

Interview Panel ofPSU Banks willSoon Have anExternal Member

Current Account

Current Yield

Even though, traditionally, global Indi-ans have kept away from the Indianmarket, of late, they have started park-ing their savings in NRI deposits. InFY11 and FY12, their outstanding in-vestments crossed $50 billion. A higherinterest rate, amid the near zero inter-est rates back home and a weak rupee,has made such deposits very attractivefor most of the depositors. With the for-eign exchange reserves pile shrinking,the Reserve Bank has further liberal-ised interest rates on these deposits.

More NRIs ParkTheir Funds Here

Payment and settlements of financialtransactions has undergone a seachange. A number of electronic plat-forms like real-time gross settlement

system or RTGS and National Elec-tronics Fund Transfer or NEFT havecome up over the past few years. Be-sides, settlements through credit cardsand debit cards and electronic cl