Financial Express

  • Rise in Chinese coking coal price in March may hit India

    Chinese domestic coking coal prices are expected to rise $14 per tonne next month, which could trigger problems for the Indian steel industry whose demand for coke is expected to touch 85.34 million metric tons by 2011-12. "Chinese domestic coking coal prices are expected to rise by 100 yuan ($14) per tonne for March delivery, pushed up by strong demand for coke,' the Metal Bulletin reported. Coal producers in China are talking about raising prices next month in the face of strong demand as steel mills gradually ramp up production after the snowstorms, it quoted Chinese trading sources as saying. Currently, coking coal is transacting at 1,300-1,400 yuan per tonne in Shanxi province, China's largest coal and coke producer. This is double the price paid in the middle of last year. Indian Steel Alliance sources said that rise in Chinese coking coal prices could generate problems for the Indian steel industry as domestic firms are considerably dependent on the neighbouring country for coke. Recent force majeure announcements by BHP Billiton and Rio Tinto at several hard coking coal mines in Queensland, Australia, have also seriously affected many Asian steel mills and caused a global shortage of coking coal supply.

  • Striking a note of caution

    India's growth is unlikely to slip below the 9% rate in the next few years, says the finance ministry's Economic Survey, but the downside risks have become stronger this year. Among those risks are the international subprime crisis and a slackening of growth in agriculture and manufacturing within the country. The other is the political opposition, because of which the Survey tabled in Parliament by finance minister P Chidambaram on Thursday has had to tuck away its 12-point list of reforms in a box, outside the main narrative. The more significant of these reforms are in the financial sector: allowing the public float of at least 10% in all public sector units, permitting FDI in retail, raising the FDI cap in insurance, besides 100% foreign investment in greenfield rural agricultural banks. The Survey says if the current growth trend persists "

  • India has ample wheat stocks

    India, the world's biggest producer of wheat after China, has enough stockpiles of the grain to meet demand, a finance ministry report said before tomorrow's federal budget announcement. The state-run warehouses had 7.7 million metric tonne on January 1, the report issued on Thursday in New Delhi said. When combined with the arrival of imported wheat, supplies will be sufficient in the financial year ending March 31, the report said. Still, the South Asian nation may import 2 million tonne in the year starting July 1 after dry weather pared output, the US Foreign Agricultural Service said. The country bought 1.8 million tonne a year earlier, supporting a rally in prices of wheat that topped $12 a bushel for the first time in Chicago this week. Wheat for May delivery fell as much as 27.25 cents, or 2.2%, to $12.2275 a bushel in after-hours trading and stood at $12.45 at 12:05 pm Singapore time. The price on Wednesday rose as much as the expanded daily trading limit of $1.35, or 11%, to a record $13.495 after plunging by the same permitted amount. India's production may drop 1.3 million tonne to 74.5 million tonne in the March-April harvest after farmers planted the crop on a smaller area compared with a year ago, the Foreign Agricultural Service said in a report dated February 20. The government, which needs 1 million tonne of the grain each month to distribute to the poor, will start purchases of the new crop in April. It plans to buy 15 million tonne from the farmers, up 35% from a year earlier.

  • A new era of agricultural renaissance begins

    It's a significant budget in India's agricultural history because it addresses some of the key issues facing our small and marginal farmers today. So far, we had an uncoordinated and piecemeal approach to this big problem, but P Chidambaram has addressed it in a holistic manner now. For example, the debt waiver and one-time settlement is an important step for the revival of agricultural sector. Our name is in the mud today. We are called a country of farmer suicides and not Green Revolution. That is why I think Chidambaram has taken a very bold step to put small and marginal farmers back on the track. They were thrown out of the credit system so far. So this is a very important step. There is still a problem, though. According to the Economic Survey, nearly 42% of the debt is not from institutional sources. About 49% farmers are indebted, including 60% marginal farmers. Out of them 42% have taken money from moneylenders, traders and relatives. This waiver does not cover them, so you still have a problem at hand. Until our credit system and insurance systems are further improved, people will be still forced to go to moneylenders because our support is not holistic. If a farmer has committed suicide, his family might need money to pay for the doctor's fee and medicines. So they require consolidated support, and not fragmented support. This debt waiver is a good beginning for them. I think those farmers who are not covered under this scheme and have taken loans from moneylenders should be given smart cards by state governments with the help of the Central government. These smart cards should entitle them to inputs like seeds and fertilisers. It means if we can't waive their loans because of lack of verification, they can still get help for farming because they have some land. Now the second important malady of the Indian agriculture as diagnosed by the Economic Survey is the degeneration of natural resources. Chidambaram has mentioned that we must strengthen our soil testing laboratories. He has provided more funds and mobile testing soil vans. He has accelerated irrigation projects and is going to offer new national irrigation finance. Another very important budgetary provision is pricing of fertiliser on nutrient basis, not just on NPK. Plants need 14 nutrients. Therefore, he is providing subsidy on nutrients and not only on fertilisers on an experimental bases in Haryana and the Union Territory of Chandigarh. Thereby, he has taken a few steps to overcome the problem of natural resource degeneration. Thirdly, schemes on rural growth, rural education, communication and the National Rural Employment Guarantee Scheme will cover all the rural districts of India, which can be a very important source of income generation for the whole country. So all in all, I would say that a very serious beginning has been made to end the era of farmer suicides and to begin a new era of agricultural renaissance. There are also many other older schemes in places. All these schemes should work in convergence and synergy. They should not work in isolation. Now I think people have been awakened. The fact remains the approach to food security must be pan political because all of us need food.

  • February a mixed bag for auto companies

    Mar 1 February, which is generally a lean month for car manufacturers as prospective buyers tend to postpone their purchase in anticipation of excise duty cuts in the Budget, saw market leader Maruti Suzuki India Ltd (MSIL) register flat sales in the domestic market at 59,311 units as compared to 59,095 units in February last year. Two-wheelers continued their year-long trend of decline in sales with major Companies witnessing a single digit negative growth. Analysts however, predict that sales will revive with a reduction in excise duty, both on smaller cars and two-wheelers, from 16% to 12% and simultaneous reduction in prices by various manufacturers with effect from March 1. While leading car manufacturers like MSIL, Hyundai Motor India Ltd, Tata Motors and General Motors reduced prices between Rs 7,000 and Rs 20,000 depending on the models, two-wheeler major Hero Honda, TVS Motor and Honda Motorcycle and Scooter India Ltd have also announced reduction in prices by Rs 1,000 to Rs 2,500. During February 2008, General Motor India witnessed a growth of 80% at 5,563 units as against 3,087 units during the same period last year. Sales of premium car manufacturer Honda Siel Cars India (HSCI) also grew 7.2% to 3,774 units during this period as compared to 3,521 units in February last year. Even Skoda India witnessed a growth of 102% at 1,303 units as against 644 units in February 2007. This is in contrast to the two-wheeler industry that has once again failed to recover from the woes of high interest rate and liquidity crunch. Sales of Hero Honda declined 5.37% to 2,65,431 units in February 2008 as compared to 2,80,515 units during the same month last year and that of Bajaj Auto dipped by 8.4% to 1,59,508 units as against 1,74,220 units in February 2007. The entry-level 100 cc segment has been badly hit after high delinquency forced major banks to withdraw finance availability in certain clusters across the country. According to industry estimates, the segment witnessed a decline of about 13%, which had offset stable sales in the 125 cc segment and above, resulting in an overall dip of 10% in the motorcycle industry. No wonder, players are now shifting focus to executive and premium bikes as the segment is comparatively less price sensitive and is giving higher margins to all manufacturers.

  • Osram to distribute cheaper CFLs in three states

    For promoting usage of energy saving compact fluorescent lamps (CFLs) in the country, leading lamp manufacturer Osram will distribute more than 2 million CFL units to poor families in Mahrashtra, Haryana and Andhra Pradesh. A unit of CFL will cost around Rs 10- 15 while actual cost of the unit is around Rs 300. Osram has already carried out the ground works for the project, which is expected launched over the next few weeks. "We have signed MoUs with respective state electricity boards and the project would be financed through carbon credit generated through the clean development mechanism (CDM) under United Nations Framework Convention on Climate Change (UNFCC),' Gagan Mehra, managing director of Osram India told FE. However the company is yet to decide volume of carbon credit needed for the implementation of the project. Osram model for CDM is an arrangement under the Kyoto protocol for reducing CO2 emission in the lighting industry. The company in collaboration with state electricity boards will distribute special CFL bulbs with a longevity of 15 thousands hours amongst the poorer section of the population. "We have identified as present districts such as Visakhapatanam in Andhra Pradesh, Sonepat and Yamuna Nagar in Haryana and Pune in Maharashtra for distribution of CFL units and gradually the programme would include other districts in the state,' Mehra said. Osram would be importing most of the components of the CFLs to be distributed in the three states and it would be assembled at the Sonepat plant of the company. "As the project would be in operation for seven to 10 years in three states, after two years of implementation, we plan to manufacturer the CFLs at our plant,' Mehra said. Mehra admitting that despite the low energy consumption by CFLs, the disposal of these bulbs has been a key issue. "All the manufacturers of CFLs are working out a strategy for proper disposals of these bulbs with the Electricity Lamp and Components Manufacturers Association of India (ELCOMA),' he said.

  • UP govt determined to move ahead with Expressway project

    Even as the Opposition parties in Uttar Pradesh, especially the BJP and the Samajwadi Party (SP) continue to rally against Uttar Pradesh chief minister Mayawati's pet project, the Ganga Expressway, the state government remains unmoved in its bid to go ahead with the project. The Opposition's scathing attack on the BSP government for allegedly giving undue benefits to the contractor of the project, JP Industries, at the cost of the farmers, as well as rendering thousands of hectares of fertile land into concrete waste are being seen by the government as a ":absolutely baseless and superfluous':. An official in the industries department said, according to the concept paper prepared by the irrigation department and an estimation of state public works department, embankments to be built along the proposed Ganga Expressway will save around 3.40-lakh hectare land from floods. ":It is expected that this 3.40-lakh hectare of land, which is single crop yielding due to floods at present, will be converted to multi-crop fertile land after the completion of the expressway and embankments. Hence, thousands of farmers will be able to reap benefits of at least double crop,': the official said. The proposed 1,047-km, access-controlled, 8-lane expresway from Ballia to Greater Noida is to be 155 metre wide, including the width of the embankments and service roads. According to the government records, the proposed land-parcels to be given to developer for development, which is around 12,281 hectare, largely includes infertile and barren land.

  • Govt rules out plan to bring large agri firms in tax net

    The government on Monday said there was no proposal to bring the big agricultural firms under the tax net.

  • What's holding India back?

    Failure to reform a bloated civil service is putting the country's huge economic achievements at risk

  • Wait over, Mineral Policy gets Cabinet nod

    The Union Cabinet on Thursday gave approval in principle to the long-awaited National Mineral Policy. The new policy is likely to attract foreign direct investment to the tune of $250 million per annum. It is expected open up country's huge untapped mineral deposits besides helping mineral-rich states earn more revenue as it talks about progressing towards an ad-valorem duty structure. An amendment Bill would be introduced during the Budget Session to bring about suitable amendments in the Mines and Minerals (Development and Regulation) Act, 1957.

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