Indian Holocaust My Father`s Life and Time - Eight HUNDRED Twenty Two
Palash Biswas
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The Governement is all Set to Destroy all Government companies to Disinvest them!Meanwhile,Shares of United Breweries, United Breweries Holdings and Kingfisher Airlines (KFA) rose at the Bombay Stock Exchange (BSE) on news of stake sales by promoter Vijay Mallya in a bid to generate cash for his debt-laden airlines, KFA. While shares of UB were up 0.7% at Rs 549.95, scrips of UB Holdings and KFA also appreciated by 1.0% to Rs 67.50, and 0.9% to Rs 16.65, respectively after news that Dutch beer manufacturer Heineken was in talks with UB for enhancing its stake in the Indian liquor manufacturer. Heineken owns 37.4% in UB.Spokespersons for both UB group and Heineken said their companies would not comment on market speculation Mallya has been under pressure from KFA's banker-lenders to inject some liquidity of his own before they committed further infusion of capital in the airline, which carries a debt of Rs 7,000 crore.
On the other hand, Unable to bear the "agony" caused by continued non-payment of their dues, 8 Air India unions today sought immediate intervention of the Prime Minister to resolve the situation failing which they threatened to proceed on strike from April 2. Eight unions of Air India, representing a large chunk of the over 28,000 staff, today threatened to go on strike from Monday to protest a delay in salary payments and sought Prime Minister Manmohan Singh's intervention to resolve the situation.As the management called the agitating employees for talks tomorrow, civil aviation minister Ajit Singh tried to calm the protesters by saying that the government has "stood by them" before and would continue to do so.
"We are looking into the matter and we will come out with a solution," he added.
With the CAG's observations on the coal sector sparking off a controversy, the Coal Ministry has intensified efforts to set up an independent regulator that will have a firm say in allocation of coal blocks and ensure strict enforcement of mining regulations.
The Independent Coal Regulatory Authority Bill 2012 likely to be considered by the Union Cabinet next week also seeks to empower the proposed regulator to decide the fuel's prices and to suspend or cancel authorisations of errant coal producers.
Good news breaks as Eight core sector industries grew by 6.8 per cent in February, the rate way better than January's 0.7 per cent and ahead of the 6.4 per cent growth recorded a year ago. This was largely driven by coal, cement and electricity.
However, in the first 11 months of the current year, growth in the core sector as a whole slowed to 4.4 per cent from 5.8 per cent in the corresponding period last year.
Economists, conseque-ntly, remain cautious on inferring that the economy has recovered. Canara Bank's chief economist Manoranjan Sharma said, "The figures are far too volatile to say that there is a recovery. We need to see a sustained trend to conclude that."
Dun & Bradstreet's senior economist Arun Singh concurred: "From this one-time spike, it is too early to say that the economy has recovered. Only after RBI starts cutting rates, a recovery could start."
The core sector has a weight of 37.9 per cent in the index of industrial production.
What contributed to the spike in February growth was increased coal supply to thermal power, cement and steel plants. Coal output grew by 17.8 per cent, which in turn translated into higher power generation and higher steel and cement production.
Electricity output grew by 8 per cent in February. Output from coal-based power plants was 60.98 billion units, 13 per cent more than the corresponding period last year.
Though supplies improved, yet coal availability in power plants remained critical at 35 million tonnes in February, when the requirement was 39 million tonnes.
The increase in electricity output was contributed largely by hydroelectric plants, especially in the south. Hydel generation in February was 7.24 billion units.
The improved energy output helped production growth in cement. Cement output grew by 10.8 per cent (the growth a year ago was 6.5 per cent). But steel output growth slowed to 4.3 per cent from 18.5 per cent.
Core sectors that saw sharp drops included natural gas, whose output in February fell by 7.6 per cent. Crude output grew by 0.4 per cent after five months of decline.
Fertiliser output grew by 4.1 per cent, but the rate was slower than the 4.8 per cent growth a year ago.
The eight major unions, representing a cross-section of staffers ranging from pilots, engineers to ground staff, wrote to Prime Minister Manmohan Singh, saying they would implement "no pay no work" policy from April 2 as the management was "withholding" their "legitimate wages".
The decision to go ahead with their proposed strike came after the unions failed to secure any "firm proposal" from the carrier for clearing their dues at a meeting with the management here today.
"We will no longer be able to bear this agony which has been thrust upon us for no fault of ours. Therefore, we reiterate that if the management continues to withhold our legitimate wages, we will not be able to discharge our duties from April 2. We appeal to you for your kind and urgent intervention to resolve the situation," the unions' joint memorandum to the Prime Minister said.
After a meeting last Thursday, the management had given a written commitment for a staggered payment of their dues beginning March 29 through May 25 and most, barring the pilots who demanded complete payment before April 1, had agreed.
The memorandum has been sent on the day when the civil aviation minister again said that the national carrier Air India was making operational losses of Rs 10 crore everyday.
"The total loss of Air India every day on its operations is approximately Rs 10 crore."
The BSE benchmark Sensex on Wednesday fell 136 points on funds selling ahead of settlement in the derivatives segment amid lingering fears of short-term capital gains tax on funds selling equities to foreign investors.The outlook of the market is looking bearish due to confusion over General Anti-Avoidance Rules (GAAR).Pranab has hinted to mdify the rules to appease the Industry.The key benchmark index Sensex once again slipped below 17,000 to 16920.61 before making a recovery and ending at 17,059. Market experts say that the volatility in the market is triggered by weak global cues, expiry of March derivatives contracts and short covering in the later trading session on the domestic bourses.Apart from the GAAR overhang, the sentiment was also hurt by weakness in the global markets. Asian equity benchmarks closed lower today amid growing concerns about economic growth in China. Economic reports out of the US this week have also not been all that great. At the same time, economists and market experts warn about continued troubles for the debt-strapped euro area economies.Hwever, Brokers said foreign investors remain concerned about the new rule that aims at preventing tax avoidance through participatory note (P-note) route, under which foreign funds buy Indian equities on behalf of overseas investors.There were reports yesterday that the government has clarified that it plans to use the new rules under GAAR only to focus on those avoiding taxes, leading to a spurt in the market. However, brokers said, concerns remain.Besides, they said the rupee's falling to a 2-month low and weakening trend in the global markets further dampened the market mood.Also, investors squared positions as the market will have last settlement of the current fiscal (2011-12) in the derivatives segment on Thursday.
The index had closed on Wednesday at 17,121.62. However, it retreated around 63 points on Thursday. During the day, the market breadth - which indicates the overall health of the market - remained strong. On BSE, 1,539 shares gained and 1,270 shares declined. A total of 105 shares were unchanged.
The government is likely to accelerate the process of setting up a coal regulator and speed up the auction of blocks in response to the leaked draft report of the CAG that said the government lost Rs 10.7 lakh crore of revenue by giving away coal blocks to companies instead of inviting bids, power utilities and sector experts said.
The fact that allocation of blocks has been under the scanner has renewed hopes that the government may soon work on reforms to bring about more transparency in coal pricing and auction, they said. "There has always been a need for regulator to separate coal allocation and pricing from politics. Its case becomes stronger as putting in place a regulator would bring about more transparency in resource monetisation and pricing," GMR Group's chief financial officer A Subbarao said.
Power utilities have been demanding more coal blocks auction as not a single coal or lignite block has been awarded for captive use to private companies since October 2008 despite an acute fuel shortage. India has potential reserves of 350 billion tonne, making the country the world's fourthmost coal-rich nation. But the country is a net importer of coal since Coal India, the state utility that supplies power to about 85% of the local capacity, has clocked a dismal 4% year-on-year growth in the past five years. Talking to reporters on Thursday , coal minister Sriprakash Jaiswal said that the government may finalise guidelines auctioning coal blocks through the competitive route in 2-4 months and would subsequently start the auctions.
Meanwhile, British hedge fund TCI has stirred up hornet's nest. FII circles in India have begun to ask blunt questions about Governance issues of listed PSUs.Business line reports:
Institutional Investors Advisory Services (IiAS) organised a client conference recently on the issue.
FIIS' FEARS
According to sources, at the conference foreign investors expressed strong reservations about governance practices of the Indian Government-owned companies.
Mr Shriram Subramanian, Managing Director of InGovern Research Services, India's first institutional proxy advisory told Business Line that the TCI letter to Coal India and subsequent actions by the independent Directors of Coal India, in opposing the move to long-term fuel supply agreements, show that activism could pay.
"The larger issue is that the Government plays the role of regulator, majority shareholder and manager in PSUs. This needs to be set right," he added.
TCI'S ACTIVISM WELCOMED
Institutional investors needed to be more vigilant and engage with companies in a constructive manner to set right many of the corporate governance issues that dog India Inc.
According to Espirito Santo, in an environment where enforcement is still weak, TCI's rare example of activism is welcome.
Mr Surabh Mukherjea, equity head at Ambit Capital, said the message that the Government did not care about the corporate governance was significantly underlined.
"As it is Indian law is skewed in favour of the promoters. TCI's move has re-emphasised the need for revaluation of governance risks for global investors in India," he said.
Historically relevant ministries exercised near total control over PSUs, Espirito noted. "The extent to which that has changed depends on the sector and company. But board authority in most PSUs remains pretty weak.
"They often have no say in CEO selection, appointment of other directors, and key strategic decisions — instead the concerned Ministry takes the decision.
"In theory, governance reforms now allow the board to perform an obstructive role, but in practice this is rarely the case."
Espirito further said that "the governance conflict is greatest where the companies are involved in resources of national strategic importance, like coal, steel, oil, fertiliser, etc."
http://www.thehindubusinessline.com/markets/article3251605.ece
The Times of India said yesterday the government gave about 100 companies "undue benefits" between 2004 and 2009, citing a draft report by the Comptroller & Auditor General. The CAG responded in a letter to Prime Minister Manmohan Singh that the news report contained discussion notes that don't even constitute a preliminary draft.
The allegations raised the specter of a 2008 phone-permit scandal that sparked the nation's biggest graft probe, stalled legislation and contributed to the rout of Singh's Congress party in a key state election this month. A former minister, bureaucrats and businessmen were charged with corruption after the CAG told lawmakers in 2010 that mobile-phone licenses were sold at "unbelievably low prices" to "ineligible bidders," depriving the state of as much as $31 billion.
"This government is facing death by a thousand cuts," said P. Phani Sekhar, a fund manager at Angel Broking Ltd. based in Mumbai. "Every week there is more bad news. The government's reputation is completely in tatters."
The newspaper report sparked protests in the lower and upper houses of parliament yesterday morning as politicians from opposition parties sought a discussion.
Meanwhile,Dragged down by payments for 3G, BWA spectrum auction and higher expenses, state-run telecom firm BSNL's cash reserve dwindled to Rs 2,500 crore in 2010- 2011 from a hefty Rs 30,000 crore two years back.Government is doing everything to make an AIR India out of Coal India to benefit Private Power Companies.Coal regualator is being introduced to revolutionise Coal sector which eventually would dilute the Coal Blocks scam case on the one hand and on the other hand , it woul tame Coal India management to work for the Private Sector. mind youn the Government has confirmed that all aviation companies but only INDIGO are in a situation called AIR INDIA.
"As per the audited books of account, cash reserve of BSNL has gone down from Rs 30,343 crore as on March 31, 2010 to Rs 2,500 crore on March 31, 2011," Telecom Minister Kapil Sibal told Lok Sabha in a written reply.
BSNL incurred net losses of Rs 6,384 crore during the financial year ended on March 31, 2010, he added.,
The main reasons attributed for the steep decline were payment of Rs 18,500 crore towards 3G spectrum and broadband wireless access (BWA) spectrum auction price and payment of Rs 5,301 crore to LIC towards group leave encashment scheme.
Payment of Rs 2,900 crore on implementation of revised pay scale and Rs 392 crore in tax liabilities also added to the burden of the telecom firm, he added.
Decline in revenue and increasing expenditure resulted in losses for the telecom firm, Sibal said.
Stiff competition from private operators and decreasing average revenue per user accounted for decline in revenues, while increased expenditure resulted from large legacy work force whose wages accounted for 50 per cent of the revenue, he said.
In response to another query, Minister of State for Communications and IT Milind Deora said BSNL had Rs 5,231 crore as outstanding dues from customers as on November 30, 2011. The company has recovered Rs 988 crore against the outstanding dues in the same period.
BSNL has sought continuation of support from the government towards rural wireline connections on phasing out of access deficit charge (ADC).
"Telecom Regulatory Authority of India (telecom regulator) has made an interim recommendation of Rs 600 crore as support," he said.
Struggling to survive in the highly competitive telecom sector, BSNL had offered to surrender its BWA spectrum to the government after its plans to rollout WiMAX-based services using these airwaves through a franchisee model flopped.
The government had also appointed Sam Pitroda, an advisor to the Prime Minister on infrastructure, to give a report on restructuring the PSU.
The panel in its report recommended a 30 per cent divestment in the company and voluntary retirement for 100,000 employees among others. Unlisted BSNL has over three lakh employees.
Sibal said the government is taking various steps to improve the financial health of the company.
Consolidation of infrastructure, strengthening of revenue streams through focus on broadband and enterprise business, focus on customer care and push on data usage are some steps the company is taking in this regard, he said.
Kingfisher Airlines' problems seem to be never ending: While an income tax (I-T) tribunal directed it to clear its dues in weekly installments from April 7, a government official said the civil aviation regulator might take action against the troubled airline, if its employees and vendors were not paid soon.
But the cash-strapped carrier is likely to get more time to repay its service tax dues. Also, it named three independent directors on its board to comply with rules, after the last of its independent directors quit last week amid growing concerns over its survival.
The Bangalore bench of the I-T Appellate Tribunal directed Kingfisher to pay the remaining amount of the outstanding demand of Rs 349 crore to the I-T department in weekly installments of Rs 9 crore, starting from April 7. Kingfisher was also directed to furnish a bank guarantee against the weekly installments.
The bench had ordered Kingfisher to make a payment of Rs 44 crore of the outstanding demand on or before yesterday, which the airline complied with. It directed the department to lift the attachment of bank accounts immediately, so that Kingfisher could start smooth functioning and would be in a position to make the payments.
Spelling more troubles for Kingfisher, a government official in the know said: "The directorate general of civil aviation is likely to take action against Kingfisher, if it does not clear the dues of vendors or make salary payments to its employees soon. There is a concern whether the airline will be able to operate even the current truncated schedule." He said the decision was likely to be conveyed to the airline chairman, Vijay Mallya, at a meeting that could happen as soon as this week.
Meanwhile, Kingfisher named Manmohan Singh Kapur, Lalit Bhasin and Shrikant Ruparel as new independent directors on its board.
While Kapur is a former chairman and managing director of Vijaya Bank, Lalit Bhasin is an accomplished lawyer and head of law firm Bhasin & Co. Ruparel is a former managing director of Kolhapur Sugar Mills and was on the State Bank of India board for 18 years. Indian rules require at least half of the directors on a publicly listed company to be independent.
"We cannot kill Kingfisher. We might give it some more time, if it pays some dues by March 31," an official said. Kingfisher, which has cut down its operations substantially and has asked most staffers to stay at home, has agreed to pay Rs 10 cr of its Rs 76-cr service tax dues this financial year.
IndiGo is an anomaly in the Indian market – it is the only profitable domestic airline this financial year (ending 31-Mar-2012). The carrier is however, like its peers, feeling the pressure in a tough operating environment. President Aditya Ghosh this month noted the carrier would see a decline in FY2012 profits, with the results substantially impacted by high fuel costs.
"Margins were under huge pressure because average price of fuel is now higher than what it was in 2009. There has been a growth in revenue and we will turn out to be profitable at end of the year. It will be much smaller profit than we have done in the previous year,'' he said in an interview with Business Standard. The carrier reported an 18% increase in profit to INR6.5 billion (USD130 million) in FY2011 but expects the FY2012 result to be a "fraction" of this figure. "For us profitability means that we are able to get spare parts on time, pay salaries on time, maintain integrity of schedules and plan for growth," he stated.
IndiGo co-founder Rahul Bhatia confirmed the LCC "will end the year making money". He also dismissed comments made by Kingfisher Airlines chairman Vijay Mallya that the only profitable airlines in the Indian market are the ones conducting sale-and-lease back transactions. "Saying that all of our money comes from sale and leasebacks is silly," Mr Bhatia said, adding: "If sale and leaseback is the only formula to profitability, I don't think we have the IP rights on this and everybody can do it and I think everybody does it." Dr Mallya indirectly questioned IndiGo's profits, stating, "So far, there has been a downhill for civil aviation except for one airline that defies the odds and claims to be profitable".
As confirmed by India's Minister of Civil Aviation, Ajit Singh on 22-Mar-2012, all scheduled Indian airlines except IndiGo are incurring losses, based on returns filed by airlines with the Directorate General of Civil Aviation (DGCA). Mr Singh noted the industry has reported INR260 billion (USD5.1 billion) of operational losses in the 2007-2010 period, with an INR100 billion (USD2.0 billion) loss anticipated in 2011/12. "The spiraling cost of Aviation Turbine Fuel (ATF), global economic slow down and low yields due to intense competition and the consequent widening gap between revenue and expenses have contributed greatly to losses," he said.
espite only entering the market less than six years ago in Aug-2006, IndiGo has rapidly soared up the ranks to become the second largest domestic carrier, overtaking Air India and Kingfisher Airlines on the way. In doing so, IndiGo has overtaken more well-established carriers that have expanded not only organically but through acquisitions and with a mixed-product that offers both full service and low cost products. And the growth for IndiGo is expected to continue, with the airline likely to remain the fastest growing airline in India in 2012, as it continues to add capacity on both domestic and international routes, with the latter expected to generate a growing proportion of total revenue.
IndiGo held a 21% domestic market share at the end of 2011, behind Jet Airways/JetLite, and up 4 ppts on a year-on-year basis. For the second consecutive year, the carrier reported domestic passenger growth of almost 40% to 11.8 million, with total passenger numbers exceeding the 12 million-passenger mark following the launch of international operations in Sep-2011.
According to DGCA monthly traffic data, IndiGo handled over 1 million passengers for the first time in May-2011 (with 1.1 million passengers), a feat replicated in Jun-2011, Oct-2011, Nov-2011, Dec-2011, Jan-2012 and Feb-2012, with over 1.1 million passenger in each of these months.
Meanwhile, the carrier is progressing with investment and capacity additions planned for 2012 despite current challenges in the market, with Mr Ghosh commenting in an interview with CNBC-TV18 that the carrier will be "adding a few destinations" in 2012. "We'll open up a few more destinations and we would be adding more frequencies in the destinations that we are already flying to," he said.
He separately said: "I am firmly of the view that we can not have a situation where capacity goes down and there is less number of planes flying when the market is growing at 15% as that would lead to a rise in fares. If fares start rising there will be an impact on the number of people flying and the whole growth story will start crashing down".
29 MAR, 2012, 01.58AM IST, SARITA C SINGH & HIMANGSHU WATTS,ET BUREAU
Coalgate: Jaiswal to surrender pricing powers to an independent regulator
NEW DELHI: The coal sector is poised for "revolutionary" changes as the ministry will surrender pricing and supervisory powers to an independent regulator, which will minimise malpractices, Coal Minister Sriprakash Jaiswal told ET. But he played down Comptroller and Auditor General (CAG) Vinod Rai's latest assertion that his audit team does not make fundamental errors.
Jaiswal also said the NDA regime under Atal Behari Vajpayee would have to explain the allocation of 35 coal blocks if the final CAG report is critical about coal allocation. The auditor's leaked draft report estimates that the government's award of 155 coal blocks resulted in gains of 10.7 lakh crore to various companies between 2004 and 2009. The gains are largely notional as many firms have not started production.
The draft report was rubbished by sections of the government, but CAG Vinod Rai declared on Tuesday that his team was known for doing a thorough job. The minister said Rai's remarks were about the general system of auditing, not about the coal sector. He, however, agreed that the coal sector did not have a sparkling image and there was room for improvement.
"There is a huge scope for improvement in the sector and Coal India. There will be fewer allegations against the ministry and Coal India after the regulator is put in place. The appointment of a regulator would lead to revolutionary changes," he said.
Jaiswal said the ministry was not concerned about the draft report of the CAG as all the blocks were given to companies only after necessary approvals from state governments and administrative ministries.
"I am not aware of the draft report. We are not concerned about CAG allegations. Let them come out with a final report. CAG has himself expressed concerns by writing to the PMO. Even if the allegations are made, NDA government will have to first answer about allocation of the first 35 blocks that were allocated during their tenure," he said.
The coal sector has been under the spotlight since last year when a severe fuel shortage pushed the country to the brink of a major crisis as many power stations hit critically low stocks after floods submerged mines and drenched mined coal. Strikes and protests aggravated the problem by disrupting supply.
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Private power producers led by Ratan Tata and Anil Ambani raised the issue of coal scarcity with the prime minister as investments worth billions of dollars are at risk because of fuel scarcity.
Jaiswal said the situation would improve and Coal India would be able to meet demand.
He said the coal ministry had already recommended to the cabinet the proposal to set up an independent regulatory authority that will have the power to grant and cancel mining licences, decide coal prices, set performance standards, monitor coal quality, ensure compliance by mining companies, promote carbon-free technologies and advise the government on policies.
"The potential is enormous."
The appointment of a regulator would make the system more transparent and accountable, and would be a strong deterrent for malpractices in the sector, he said.
It would also encourage competitive exploitation of coal reserves with a fair process, improve pricing practices and help companies use best practices and most modern equipment, he added.
http://economictimes.indiatimes.com/news/news-by-industry/indl-goods-/-svs/metals-mining/coalgate-jaiswal-to-surrender-pricing-powers-to-an-independent-regulator/articleshow/12447842.cms
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