THE HINDU I BANGALORE, FRIDAY, AUGUST 9, 2013

The Government hasnt said that we are going to be launching a sovereign bond.
ARVIND MAYARAM, Economic Affairs Secretary

,,
J. Venkatesan months, the RBI has instituted several measures to contain the volatility in the foreign exchange market. On a review of the impact of these measures and for effective liquidity management, it has been decided that the RBI will auction Government of India Cash Management Bills, RBI said in a release. The latest move on weekly auction of cash management bills comes even as the earlier measures of the RBI did not bring about the desired results. However, the Thursday release of RBI did not provide any details on how long it intends to carry on the CMB auctions.

BUSINESS
We are not (thinking of hiking lending rates) because we are witnessing a surge in deposits.
PRATIP CHAUDHURI, Chairman, SBI

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SHORT TAKES
Rajan to be Officer on Special Duty at RBI
NEW DELHI: Reserve Bank of India Governor-designate Raghuram Rajan will work as Officer on Special Duty (OSD) in the central bank for three weeks before taking over as head of the institution. Dr. Raghuram Rajan is ... appointed as Officer on Special Duty in the Reserve Bank of India for a period of three weeks prior to his taking over as Governor, RBI on September 5, 2013, to provide for an overlap with the present Governor, the Finance Ministry said. He has been appointed for a three-year term and will succeed D. Subbarao. PTI

RBI steps in again to drain liquidity

The central bank will auction cash management bills ACTING TOUGH

Sterlite gets nod from National Green Tribunal to operate Tuticorin plant
NEW DELHI: The National Green Tribunal on Thursday permitted Sterlite Industries to carry on its activities in its copper smelting plant at Tuticorin, subject to certain directions. The Tribunal comprising Justice Swatanter Kumar, Chairperson and Expert Members, Dr. D. K. Agrawal, Dr. G. K. Pandey and Dr. R. C. Trivedi allowing a petition from Sterlite challenging the order of closure passed by the Tamil Nadu Pollution Control Board, A view of the Sterlite plant in Tuticorin,Tamil Nadu. said Shutting down an in- PHOTO: N. RAJESH dustry amounts to civil evidence to show that there caused health hazards to death of the company. was no possibility of leak- the people residing 6-8 km age of gas or excessive emis- away from the appellantEvidence sion from any other companys unit. It could not The Tribunal said A di- industry except the appel- be prevented as according rection of closure in rela- lant-company. The Respon- to the Respondent-Board tion to a running unit not dent-Board, in fact, has not itself, the event had already only results in stoppage of even brought its case with happened and it was not an production but has far reac- reasonable probability in anticipated action. We have hing economic, social, and contradistinction to the no hesitation in coming to labour consequences. Be- above beyond reasonable the conclusion that the pufore directing the civil doubt. nitive order dated March death of a company, the deIt said the action taken 29, 2013, passed by the Recision-making authority is by the Board on March 29 spondent-Board is not susexpected to have before it directing closure of the ap- tainable in law. some reliable and cogent pellant-companys unit was evidence. There should be a not as much of a preventive Expert Committee The Tribunal said the direct nexus between the direction with reference to leakage of gas, the source of precautionary principle as Special Expert Committee leakage and its effect/im- it was a punitive measure, constituted by it on May 31 pact on ambient air quality recourse to which was tak- should supervise and overand public health. en on the premise that see the manufacturing The Tribunal said there there was excessive emis- process and industrial acis no direct or even indirect sion on March 23 and it had tivity, including pollution-

FM may unveil more measures

MUMBAI: Finance Minister P. Chidambaram is likely to

Special Correspondent
MUMBAI: With rupee consistently breaching the 60-mark against dollar of late, the Reserve Bank of India (RBI) has unveiled fresh liquidity-sucking measures to shore up the Indian currency. The central bank said it would auction Government of India cash management bills for a notied amount of Rs. 22,000 crore once every week on Mondays. Cash management bills are auctioned to help smoothen the temporary liquidity mismatches of the Central Government. These are exible short-duration instruments, and tend to pay higher yields than bills with xed maturity. The RBI said the duration of the auction for next week would be 35-day and 34-day bills of Rs. 11,000 crore each. The duration of the auction will be announced one day prior to the date of auction, it added. The auctions will be conducted using Multiple Price Auction method, and the

SEBI noties buyback norms

MUMBAI: The Securities and Exchange Board of India, on Thursday, notied buyback norms under which it would be mandatory for companies to repurchase at least 50 per cent of their offers. The norms aimed at safeguarding the interest of public shareholders. The companies will now have to complete their buyback offers within six months, from 12 months now. Those not able to meet the target will be barred from launching another offer for a period of one year. PTI

unveil next week more measures to support rupee which had hit all-time low of 61.80 against the dollar. I think you should wait till the end of the week...the Finance Minister will be talking about this later, Economic Affairs Secretary Arvind Mayaram told reporters in reply to a question. He was asked whether the government would come out with more measures to support the rupee. The RBI has taken a slew of measures in the past couple of weeks to contain rupee depreciation. PTI

Royal Eneld to launch Continental GT in U.K.

NEW DELHI: Royal Eneld, a part of the Eicher Motors Group, will launch its new model Continental GT in the U.K. next month as it looks to tap global customers in the mid-sized motorcycle segment. The Continental GT will be launched in the U.K. in September. This is a product for the global audience and is one of the big steps we are taking to be a global player in the mid-sized segment, Eicher Motors Managing Director & CEO Siddhartha Lal said in a conference call. PTI

Cash Management Bills will have the generic character of Treasury Bills. Since the rupee hit the 61.21 per dollar onJuly 8, the RBI had been intervening in the foreign exchange market to curb speculation. However, on July 15, it announced a slew of measures to suck out liquidity in the system. On July 23, it announced additional measures to curb liquidity. Last Tuesday, the rupee hit another historical low of 61.80 a dollar. The markets were awaiting some more measures from the RBI to contain volatility in the foreign exchange market. Over the last two

related issues of the appellant-company and submit a report to the Tribunal and the Board bimonthly (once in two months). The Tribunal also constituted a Special Committee of the Secretary (Health), Government of Tamil Nadu, Member Secretary-Pollution Control Board, Tamil Nadu, Director General of Health Services of Tamil Nadu, Vaiko and two independent experts, one from the eld of environment and the other from public health, to be nominated by the MoEF. This committee should conduct a study and place on record the causes for the health hazards that are resulting in and around the industries and the industrial clusters such as SIPCOT. The Tribunal said the committee would give the reasons why the young ladies in those villages in Tamil Nadu are suffering from termination of pregnancies and why the people are suffering from ailments such as throat and eye irritation and suffocation in breathing. This committee shall further place on record the recommendations for remedying such environmental injury and health hazards. These recommendations shall be placed before the Tribunal within a period of six months.

Companies Bill passed

Special Correspondent
NEW DELHI: Rajya Sabha, on Thursday, ratied The Companies Bill, 2012, as passed by the Lok Sabha about eight months ago. As and when consented to by President Pranab Mukherjee, the new legislation will replace the 57-year-old Companies Act, 1956. Piloting the Bill, Corporate Affairs Minister Sachin Pilot said the new regime would seek to usher in more transparency and governance in the corporate bodies besides creating the necessary environment for growth in the present global structure. In 1956, there were just about a few thousand companies in the country. The number had now grown to more than a million now, he pointed out. The government was in favour of a fewer regulation and self-regulation by the business houses, he added. The objective was also to help small one-person companies to access facilities and credit, besides ensuring one minimum woman director in certain prescribed class of companies. The effort would also be to encourage these companies to give employment to all sections of society.

Pay up, FM warns service tax defaulters

Special Correspondent
NEW DELHI: Finance Minister P. Chidambaram, on Thursday, exhorted service tax defaulters to take advantage of the voluntary compliance encouragement scheme (VCES) and come clean on their tax dues with no penalty, no interest or else, face punishment. In a veiled but terse warning to defaulters while unveiling the VCES campaign running up to December 31 this year, Mr. Chidambaram said: Pay your service

BHEL Haridwar starts producing stator bars

DEHRADUN: BHEL Haridwar became the rst unit to introduce manufacturing of 800 MW supercritical generator stator bars with the inauguration of the hi-tech CNC Roebel machining centre on Thursday. The rst bar is expected to be rolled out by November. With the installation of this machining centre, BHEL has become Indias rst company capable of making stator bars of 800 MW supercritical generators. It is noteworthy that for the rst time in Indian history, bar manufacturing is being done by using steel conductors in place of copper, Executive Director Prakash Chand said. Staff Correspondent

Sachin Pilot

tax...this is an opportunity to put the past behind you and come cleanWe think that it is perfectly right and this was an opportune moment to give a once in the life-time opportunity for those who are defaulters to come clean, that is the purpose of this campaign. Pointing out that about 10 lakh non-lers or stop-lers of service tax were in a way defaulters and they are liable to punishment, the Finance Minister noted that the Service Tax Act enacted by the government already

provided for monetary penalty and punishment. Those who have collected service tax in excess of Rs.50 lakh and not deposited to government faces punishment of imprisonment up to seven years, he said. Citing an instance to drive home the seriousness of the default in this regard, Mr. Chidambaram said: One person has been arrested in Kolkata. It seems the message is not going to people. You cannot collect money which is [the] governments and keep it with yourself as

if it was some kind of working capital for you. As per the voluntary compliance scheme, service tax defaulters are required to pay at least 50 per cent of their arrears for the veyear period ending 2012 and the balance in another six months, without interest. Till date, 1,400 declarations have been led with the defaulters owning up to a payment of Rs.650 crore to the government. Earlier, Mr. Chidambaram released a booklet containing Frequently Asked

Questions (FAQs) on the service tax VCES as also a logo of the campaign. The FAQs were based on inputs received from various agencies and quarters and would be of immense use for the compliers, he said. The objective of the voluntary scheme is to encourage disclosure of tax dues and compliance of service tax law by persons who have not paid their dues for the period from October 2007 to December 2012, either on account of ignorance of law or otherwise.

JPMorgan faces criminal probe over mortgage bonds

NEW YORK: JPMorgan, on Wednesday, said it was facing a federal criminal probe relating to mortgage-backed securities sold in the run-up to the nancial crisis. The New York-based bank said it received notice in May that the civil division of the U.S. Attorneys office for the Eastern District of California had concluded JPMorgan violated certain federal securities laws in connection with the sale of mortgage-backed securities. The probe, along with one by the offices criminal division, relates to securities backed by sub-prime mortgages and so-called Alt-A mortgages, loans that are less risky than subprime loans, but riskier than prime loans. JPMorgan Chase & Co. made the disclosure in a regulatory ling. AP

The Bill, as ratied by Parliament, prescribes an expenditure of 2 per cent of prots on CSR (corporate social responsibility) activities in their respective areas of operation. These would have to be outcome and timeline-driven with details posted on websites. It provides for formation of welfare trusts which could buy shares of the company and be part of the decision-making process, Mr. Pilot claried in response to questions that there was no provision for giving representation to employees on the board of directors. Once enacted, the law will also provide for faster liquidation, mergers and acquisitions. He promised to consult all stakeholders while framing the rules.

Cannot tolerate high ination to promote growth: RBI study

MUMBAI: The Reserve Bank

Hero MotoCorp targets 50 new markets by 2020

GURGAON: Hero MotoCorp on Thursday said it planned to enter 50 new markets by 2020 with a target of 20 manufacturing facilities across the globe and an overall annual turnover of Rs.60,000 crore. As part of its ambitious global expansion plans, the company said it would have six assembly lines spread across three continents by next year. We will be selling in 50plus countries by 2020. To top it all, I am talking of an annual turnover of Rs.60,000 crore, Hero MotoCorp Managing Director and CEO Pawan Munjal told reporters here at the companys plant. In the scal ended March 31, 2013, the companys turnover was around Rs.24,000 crore, he added. The company, which had recently made a foray into the African continent by launching bikes in Kenya, said it would be entering more new markets. Earlier, its export market was restricted to Colombia in Latin America and neighbouring countries Sri Lanka, Bangladesh and Nepal. Between January and March 2014, we will launch some more additional markets, some in Africa, some in the Caribbean and Central American countries, he said. Hero MotoCorp, which rolled out its 50 millionth bike here on Thursday, said it was now eyeing the 100 million mark. I am now looking ahead at 100 million cumulative gure by 2020 with 20 manufacturing facilities across the globe, Mr. Munjal said. PTI
BG-MYBG

of India, on Thursday, said it could not adopt a policy of tolerating higher ination in order to promote growth because such a stance would not yield the desired results. While lower real interest rates can stimulate growth and investment, the central bank cannot adopt a policy of higher ination tolerance as the means to lower real rates because beyond a threshold, the negative impact of ination on growth outweighs its positive impact, the RBI said, citing a

study. The study was conducted in the backdrop of criticism that the central bank was following an antiinationary monetary policy stance to the detriment of growth. ...tolerating higher ination with growth-supportive monetary policy response is unlikely to stimulate growth to the desired extent since the adverse impact of higher ination on growth would more than offset the favourable impact of growth-supportive monetary policy, it said.

It further said the adverse growth impact of high ination was seen to operate primarily through compression of consumption demand, since investment demand is more sensitive to lower real rates than higher ination.

Empirical evidence
While this paper nds empirical evidence that lower real interest rates can stimulate growth and investment, it does not recommend a policy of higher ination tolerance as the

means to lower real rates, it said. In India, the study added, the incremental capital output ratio has increased in recent quarters and correspondingly, the implicit marginal productivity of investment has also declined. As a result, lower levels of real interest rate would have also contributed to the slowdown in growth. The real interest rate refers to the difference between the actual interest rate and ination. PTI

Decision on NHPC stake sale deferred

NEW DELHI: The government, on Thursday, deferred a decision on 11.36 per cent stake sale plan in NHPC. The proposed stake sale would fetch about Rs.1,850 crore to the exchequer at current market prices. The decision on NHPC stake sale has been deferred, a source said after the meet-

ing of the Cabinet Committee on Economic Affairs (CCEA) headed by Prime Minister Manmohan Singh. The source said there were differences between the Power Ministry and the Disinvestment Department over the stake sale in NHPC. The Power Ministry wanted the stake sale to happen on-

ly when market conditions improved. The government had selected three merchant bankers Credit Suisse, HSBC and SBI Cap for managing NHPC stake sale. The paidup equity capital of the company, as of March 31, 2012, was Rs 12,300.74 crore. PTI

Rupee rebounds 42 paise on central bank intervention

The rupee, on Thursday, recovered from an all-time closing low, adding 42 paise to end at 60.88 against the dollar amid expectations the government would announce fresh steps to support the rupee. A rebound in local equities, a weak dollar overseas and fresh dollar sales by exporters also aided the rupee. The rupee opened higher at 61.20 a dollar from its previous close of 61.30 at the interbank foreign exchange market. It declined to 61.40 and bounced back to 60.82 before settling at 60.88, a rise of 42 paise. The rupee had tumbled 53 paise on Wendesday. PTI Our Mumbai Correspondent writes: Many market participants also conrmed that the RBI intervened in the forMUMBAI:

NTPC arm to supply 250 MW of power to Bangladesh from next month

Special Correspondent
NEW DELHI: Supply of 250 MW of power to Dhaka will commence next month. State-owned NTPC Vidyut Vyapar Nigam (NVVN), a subsidiary of NTPC, is expected to start supplying power to Bangladesh from September. NVVN has been nominated as the nodal agency for supply of power to Bangladesh. The development comes

Biotech lab opened at SVCE

CHENNAI: An ultramodern computational systems biotechnology laboratory, sponsored by Cognizant Technology Solutions (CTS), was opened at the biotechnology department of Sri Venkateswara College of Engineering, Sriperumbudur (Tamil Nadu). It was inaugurated by Sairamkumar Jayaraman, Senior Director, CTS. Special Correspondent
CM YK

close on the heels of Bangladesh Joint Secretary (Power), Mohammad Anwar Hossain, handing over the sovereign guarantee to NVVN CEO Nand Kishore Sharma in Dhaka on August 7. A sovereign guarantee is an instrument of payment security against supply of the 250 MW for 25 years from various power stations of NTPC under the Power Purchase Agreement (PPA) signed between NVVN and

BPDB in February last year. The energy agreement with Bangladesh is on similar lines with other neighbours like Bhutan, Nepal and Sri Lanka. It is learnt that the Bangladesh Power Development Board (BPDB) has already entered into negotiations with the Indian authorities, including the Power Ministry, for supply of another 250 MW in the near future.

per cent each, all other sectoral indices ended in the positive territory. The BSEs mid cap stocks gained smartly by 1.34 per cent while small cap stocks Sensex recovers gained by 1.32 per cent. Meanwhile, stock indices On the National Stock also recovered on bourses, Exchange (NSE), the 50with the Bombay Stock Ex- share Nifty gained 46.55 change (BSE) 30-share sen- points to close at 5565.65. sitive index (Sensex) closing at 18789.34, a gain of Needed breather Markets got a much 124.46 points. Except oil & gas and needed breather as the Nifhealthcare, which lost 0.21 ty recovered more than half percent after a at start. And for second day in a row, market breadth was positive, said Jayant Manglik, President - Retail Distribution, Religare Securities Limited. Though a recovery in the rupee has triggered some bounce in equities, the overall move lacks conviction and the bears are still in control, said Mr. Manglik.

eign exchange market through public sector banks to curb volatility in the value of the rupee against major currencies.