INDIA COUNTRY BRIEF 100129

Basic Political Developments

Telangana Joint Action Committee has extended the deadline for the resignations of political leaders from Telangana till February 7 in view of Thursday's statement of Union Home Minister P Chidambaram that “The Centre will constitute a committee to look into the Telangana issue, within a week.”

A six-point charter with terms and reference for a committee to lay a road map for Telangana is ready. The file has been approved by Finance Minister Pranab Mukherjee, Home Minister P Chidambaram and Law Minister M Veerappa Moily. It will be taken to the prime minister on Friday for final clearance.

Samajwadi Party (SP) general secretary Mohan Singh today ruled out Amar Singh’s expulsion from the party. He said "We are just watching Amar Singh. We don't want to fall into his trap. He is not a 24-hour political worker and wants the ladder of the Rajya Sabha seat till alternative arrangements are made."

The Bharatiya Janata Party (BJP), a key partner of the Shibu Soren government in Jharkhand, today expressed unhappy over the decision not to hand over the money laundering scam case involving former chief minister Madhu Koda to the Central Bureau of Investigation (CBI).

Shiv Sena chief Bal Thackeray today criticised Reliance Industries chairman Mukesh Ambani for his recent remark that Mumbai belongs to all Indians. Mr Thackeray wrote in an article in the party mouthpiece 'Saamna' that ''Marathi people have as much right over Mumbai as Mukesh has over Reliance group of companies. The only difference is that Mukesh's right is for business, whereas the right of Marathi people is for pride.''

Former Union Minister and Nagpur Member of Parliament Vilas Muttemwar today said a delegation of pro Vidarbha leaders is likely to meet Prime Minister Manmohan Singh and Congress president Sonia Gandhi on February 3 in New Delhi.

Communist Party of India (CPI) General Secretary A B Bardhan today in Patna hinted at the possibility of emergence of a Third Front for Bihar assembly polls to be held towards the end of the year. He said "Being a political party we have to face elections. At present, we have three alternatives -- to go all alone, to go along with other left parties or to go with other parties together with left allies."

National Economic Trends

The Reserve Bank of India (RBI) on Friday projected an impressive 7.5 percent growth for the Indian economy in the current fiscal even as it hiked the outlook for annual inflation rate to 8.5 percent by end-March. The central bank had earlier pegged the growth rate at 6 percent and inflation at 6.5 percent.

The Reserve Bank of India today advised the Union Finance Minister to at least partially roll back the stimulus that was provided to help the industry cope with the financial crisis. It said "For short-term economic management and medium-term fiscal sustainability..., it is imperative, that the Government returns to a path of fiscal consolidation. The consolidation can begin with a phased roll back of the transitory components."

The Reserve Bank of India on Friday increased mandatory cash reserve of banks held by it by 75 basis points in a bid to suck excess liquidity to combat rising inflation. The RBI also upped its economic growth projection to 7.5 per cent from its earlier estimate of 6 per cent for the current fiscal.

Business, Energy or Environmental regulations or discussions

Netherlands-based ING said on Friday that ING Group NV completed the sale of its Asian private banking unit to Singapore's OCBC, the biggest deal in the private banking sector since the financial crisis. The sale, which is in line with its strategy to focus on fewer franchises and reduce the group's complexity, will give it an estimated net profit of approximately 300 million euros ($421 million).

ICICI Bank's Managing Director and CEO Chanda Kochhar today ruled out an immediate hike in lending rates after the Reserve Bank announced measures to squeeze money.

Tata Steel today said it has formed a 51:49 joint venture with Japan’s Nippon Steel for production and sales of automotive cold-rolled flat products at Jamshedpur. The Tata Steel-Nippon Steel joint-venture will meet localisation needs of Indian automotive customers for high-grade CR steel sheets.

A top NTPC official today said NTPC has undertaken 17 projects across the country for capacity addition of 17,930 MW of power in the road map to achieve 75,000 MW generation capacity by 2017, "In a road map to growth we have 17 under-construction projects spread across India for generation of 17,930 MW of power, out of which 14 projects are of NTPC and four through joint ventures, which are in different stages."

Infrastructure major Punj Lloyd today said it has bagged a Rs 1,100-crore order for highway development in Andhra Pradesh. As per the terms of the order, bagged from GMR Hyderabad Vijayawada Expressways Ltd, Punj Lloyd will

develop 116.5 km stretch of National Highway (NH) 9 between Hyderabad and Vijayawada on an EPC (engineering, procurement and construction) basis.

Media reports today said a day after US President Barack Obama reiterated his plans for creating new jobs, amid rising double-digit unemployment in the US, India’s nearly $60-billion outsourcing industry remained hopeful that its top export market will continue to grow with more companies seeking to cut costs by outsourcing work to low-cost locations.

ACC in a communique to the Bombay Stock Exchange today said it has acquired Vizag-based Encore Cement and Additives (ECA) for an undisclosed sum. "The acquisition will help the company (ACC) further strengthen its presence in coastal Andhra Pradesh."

Activity in the Oil and Gas sector (including regulatory)

Sources today said Oil and Natural Gas Corp (ONGC) has bid for Venezuela's Carabobo oil auction along with Spain's Repsol YPF SA and Petroliam Nasional Bhd of Malaysia. Other members of the consortium pieced together by ONGC Videsh - the overseas arm of state-owned firm, include Indian Oil Corp and Oil India Ltd.

Militant Activity/Terrorism (Particularly in Bangalore, Mumbai, Noida, Chennai, Coimbatore)

Two security force personnel were killed in an encounter between militants and troops in Kishtwar district in Jammu and Kashmir early today.

Police said suspected Maoists have killed trade union leader of SAIL's Kalta mines Thomas Munda, who was kidnapped on January 25 in Orissa's Sundergarh district today. The Maoists had left behind a poster claiming that 40-year-old Munda was a "police informer" and had been given the "death sentence".

Labor/Social Unrest

Officials said two policemen were today injured when locals indulged in stone pelting at a police team which tried to prevent forceful closure of a market in Firozabad district of Uttar Pradesh.

Full Text

Basic Political Developments

Telangana: JAC extends resignation deadlineJanuary 29, 2010 09:22 ISThttp://news.rediff.com/report/2010/jan/29/andhra-crisis-jac-extends-resignation-deadline.htmThe Telangana Joint Action Committee has extended the deadline for the resignations of public representatives from Telangana till February 7 in view of Thursday's statement of Union Home Minister P Chidambaram that The Centre will constitute a committee to look into the Telangana issue, within a week.

The JAC however decided to continue the protests to build pressure on the Centre and made it clear that if the Centre failed to come out with a clear statement on the formation of Telangana, the JAC will call for immediate resignations by the legislators and MPs from the region.

The decision was taken at a stormy meeting of the all-party JAC which continued well into the night. Telangana Congress leaders R Damodar Reddy and Basavaraj Saraiah were completely isolated in the meeting as all other participants wanted to go ahead with the resignations on Friday.

The Congress leaders, who had welcomed Chidambaram's statement as a move forward, wanted the JAC to extend the deadline to give time to the Centre to come out with a detailed statement on the formation of a committee. Damodar Reddy insisted that the committee would be meant only to go in to the demand for Telangana state and nothing else. But other parties specially the Telangana Rashtra Samiti and Telugu Desam insisted that Chidambaram's statement was nothing but a tactics to put the Telangana issue in 'cold storage'. "We are all going to resign and you will also have to resign", other participants told the Congress leaders.

Sources said that an angry Damodar Reddy took objection to the criticism saying, "when we have brought the issue this far, can't we achieve Telangana state. After we have forced the Centre to accept our demand, it is improper to talk this way".

Finally the TJAC passed a resolution making it clear that the deadline was being extended on the request of the Congress party. TJAC convenor Professor Kodandaram told the media after the meeting that steering committee meet will be held on Friday to chalk out the programs and mode of protest till February 7.

Earlier the JAC had fixed the deadline of January 28 for the central government to come out with a clear statement and time frame for carving out Telangna state. Apart from the non Congress political parties the mass organizations were also unhappy with the decision to postponed the resignations by ten days. The Students Joint Action Committee gave vent to its frustration and disappointment by taking out a "funeral procession" with Chidamaram's effigy and decided to intensify its agitation for Telangana state.

Security was tightened in Hyderabad and prohibitory orders were imposed banning processions, rallies and meetings till Monday. Additional police forces were deployed at the Andhra Pradesh Legislative Assembly building.

PM set to approve roadmap for TelanganaJanuary 29, 2010 12:08 ISThttp://news.rediff.com/report/2010/jan/29/andhra-crisis-pm-set-to-approve-roadmap-for-telangana.htmA six-point charter with terms and reference for a committee to lay a road map for Telangana is ready. The file has been approved by Finance Minister Pranab Mukherjee, Home Minister P Chidambaram and Law Minister M Veerappa Moily. It will be taken to the prime minister on Friday for final clearance.

The name of the judge likely to head the committee has also been finalised; only the tenure and headquarters of the committee remain to be resolved.

The government is believed to have informally spoken to two former Supreme Court judges. Justice B N Srikrishna is most likely to accept the post, according to highly placed sources.

Six major points have been shortlisted as the terms and conditions of the road map for Telangana. These points, which need to be comminicated to the judge before he gives his assent to head the committee, have been taken from policy statements Chidambaram has made in the last two months on the Telangana issue.

There were differences among the ministers at one point during the discussions. A senior minister felt the committee's chairman could frame the terms of reference, which did not go down well with the other ministers present at the meeting.

The Centre feels the Hyderabad issue should be left to the committee to decide. Whether it will serve as a dual capital for seven years or Andhra Pradesh would have a new capital with central financial assistance is still under consideration.

Impressing the importance of the charter, Chidambaram convinced the other ministers that the document would would satisfy both the pro-Telangana and pro-Andhra groups.

The charter will give the committee's chairman full power to choose his team; experts from the state's gas, oil, water, town planning and agriculture departments will be co-opted for a fixed tenure, sources said.

Cautious SP won't sack Amar Singh for nowJanuary 29, 2010 17:18 ISThttp://news.rediff.com/report/2010/jan/29/cautious-sp-wont-sack-amar-singh-for-now.htm

Samajwadi Party, locked in a clash with former party general secretary Amar Singh, on Friday ruled out his expulsion from the party and is preparing for a battle of wits so that he does not enjoy the privileges of an 'unattached' member in Rajya Sabha.

"We are just watching Amar Singh. We don't want to fall into his trap. He is not a 24-hour political worker and wants the ladder of the Rajya Sabha seat till alternative arrangements are made," party general secretary Mohan Singh told PTI.

Alleging that Amar Singh would be "nowhere" without the Rajya Sabha seat, the party spokesman said that SP was "not in a hurry" to take disciplinary action against him.

The party also made light of the dissenting leader's challenge that he was capable of winning Lok Sabha elections from the seats held by party supremo Mulayam Singh Yadav's kin, including son Akhilesh, in Uttar Pradesh after contesting against them.

"Why did he not contest an election earlier? He is like a wrestler who has never entered any ring and if suddenly he faces an opponent then there is more chance of an injury to him. He should contest some local election first," Mohan Singh said.

The party general secretary was sarcastic when asked to comment on Amar's claim that he had even damaged his kidney while promoting the cause of the party.

"The problem is that one could donate a kidney but not the brain. It cannot be replaced," he remarked.

BJP upset as Jharkhand refuses CBI probe against Koda Fri, Jan 29 12:46 PMhttp://in.news.yahoo.com/43/20100129/818/tnl-bjp-upset-as-jharkhand-refuses-cbi-p.htmlRanchi, Jan 29 (IANS) The Bharatiya Janata Party (BJP), a key partner of the Shibu Soren government in Jharkhand, is unhappy over the decision not to hand over the money laundering scam case involving former chief minister Madhu Koda to the Central Bureau of Investigation (CBI).

'The state government's decision is a shameful act and unfortunate. BJP will take up the issue with the central party leaders,' senior BJP leader Saryu Rai told reporters.

The state government led by Soren's Jharkhand Mukti Morcha (JMM) had Thursday, in an affidavit to the Jharkhand High Court, said there was no need for a CBI probe against Koda and five former ministers.

'The probe against Madhu Koda and others are going in the right direction. The vigilance bureau is a competent investigation agency and there is no need to hand over the investigation to CBI,' the government affidavit said.

The court had asked government to clarify its stand over a CBI probe against Koda and five former ministers while hearing a public interest litigation (PIL).

State BJP spokesperson Sanjay Seth also expressed unhappiness over the government stand.

'The party is of the view that the CBI should be handed over the probe for speedy investigation,' he said.

Durga Oraon had filed a PIL in 2008 seeking a CBI probe against Koda and five of his ex cabinet colleagues, Enos Ekka, Harinarayan Rai, Kamlesh Singh, Bandhu Tirkey and Bhanu Pratap Sahi. In the petition, Oraon had alleged that Koda and the former ministers were amassing assets beyond their known sources of income and a CBI probe should be ordered to investigate the matter.

Jharkhand vigilance bureau has also lodged Disproportionate Assets (DA) cases against Koda, Kamlesh Singh, Enos Ekka, Hanarinarayan Rai, Bandhu Tirkey and Bhanu Pratap Sahi.

Koda, who is at the centre of a Rs.2,500-crore money laundering scam, is in jail since Nov 30 after his arrest by the state vigilance bureau. Income Tax and Enforcement Directorate officials Oct 31 raided 69 places in eight Indian cities, including houses owned by Koda.

Kamlesh, Ekka and Rai are also in jail in DA cases.

Tirkey, who is an independent legislator, is also supporting the Soren government.

Opposition parties in the state have been demanding that the BJP make its stand clear on the issue.

'Now the BJP should make its stand clear over the government's decision not to hand over the Koda case to CBI. The BJP is part of the Soren government and it had made a CBI probe an issue in the past,' said Pradeep Yadav, a legislator of the Jharkhand Vikas Morcha-Prajatantrik (JVM-P).

Bal Thackeray attacks Mukesh Ambani for his remarksMumbai | Friday, Jan 29 2010 ISThttp://news.webindia123.com/news/articles/India/20100129/1434839.htmlShiv Sena supremo Bal Thackeray today criticised Reliance Industries chairman Mukesh Ambani for his recent remark that Mumbai belongs to all Indians.

Mr Ambani had stated that the controversy over making Marathi mandatory for issuing taxi permits in Mumbai was 'unfortunate' and the metropolis belongs to all Indians.

''Marathi people have as much right over Mumbai as Mukesh has over Reliance group of companies. The only difference is that Mukesh's right is for business, whereas the right of Marathi people is for pride,'' Mr Thackeray wrote in an article in the party mouthpiece 'Saamna'.

''Mumbai is the capital of Maharashtra and will remain the capital of Maharashtra. Only Marathi people will have the first right on Mumbai,'' Thackeray said.

''Why did Pandit Mukesh Ambani leave out Ahmedabad, Rajkot and Jamnagar when he said Mumbai, Chennai, Delhi belong to all Indians?'' the Sena chief quipped. ''The Ambanis became business tycoons due to Mumbai and Maharashtra. Mukesh's father and my late friend Dhirubhai Ambani always acknowledged this. Then, why Mukesh has left the path treaded by his father?,'' Mr Thackeray asked.

''No one, whoever maybe the industrialist, should dare to stare at Mumbai and Marathi Manoos,'' he warned.

Pro Vidarbha leaders to meet PM, Sonia on Feb 3http://www.ptinews.com/news/490863_Pro-Vidarbha-leaders-to-meet-PM--Sonia-on-Feb-3Nagpur, Jan 29 (PTI) A delegation of pro Vidarbha leaders is likely to meet Prime Minister Manmohan Singh and Congress president Sonia Gandhi on February 3 in New Delhi, former Union Minister and Nagpur MP Vilas Muttemwar said here today.

"Maharashtra Pradesh Congress Committee chief Manikrao Thakre has conveyed a message of the Congress president that I should meet Sonia Gandhi in New Delhi," Muttemwar, who is on the forefront of the separate Vidarbha agitation, told PTI.

But instead of meeting myself alone, I have conveyed that we will meet in an all party delegation either on February 3 or 4 in Delhi. An all party meeting has been convened here on February 2 and the delegation would leave same day for Delhi, he said.

Muttemwar informally met the Prime Minister on January 27 as part of his demand for separate Vidarbha.

Bardhan hints at Third Front in Biharhttp://www.ptinews.com/news/490497_Bardhan-hints-at-Third-Front-in-BiharPatna, Jan 29 (PTI) CPI General Secretary A B Bardhan today hinted at the possibility of emergence of a Third Front for Bihar assembly polls to be held towards the end of the year.

"Being a political party we have to face elections. At present, we have three alternatives -- to go all alone, to go along with other left parties or to go with other parties together with left allies," Bardhan, who was here to take part in CPI state council, told reporters.

"We will be sitting again towards the end of March or early April and discuss on the issue of nature of alliances for the assembly polls... Emergence of a Third Front before Assembly polls can't be ruled out at this stage," he said.

National Economic Trends

Indian economy will grow 7.5 percent but with high inflation: RBI Fri, Jan 29 11:47 AMhttp://in.news.yahoo.com/43/20100129/836/tbs-indian-economy-will-grow-7-5-percent.htmlMumbai, Jan 29 (IANS) The Reserve Bank of India (RBI) Friday projected an impressive 7.5 percent growth for the Indian economy in the current fiscal even as it hiked the outlook for annual inflation rate to 8.5 percent by end-March.

The central bank had earlier pegged the growth rate at 6 percent and inflation at 6.5 percent.

'Assuming a near-zero growth in agricultural production and continued recovery in industrial production and services sector, the baseline projection for gross domestic product growth for 2009-10 is now raised to 7.5 percent,' the central bank said.

'Keeping in view the global trend in commodity prices and the domestic demand-supply balance, the baseline projection for wholesale price inflation for end-March 2010 is now raised to 8.5 percent.'

RBI Governor D. Subbarao, while presenting the third quarterly update of the monetary policy before chief executives of commercial banks, said he also expected the country's growth rate of 7.5 percent to be sustained in the next fiscal.

'As with growth, we shall formally announce our inflation projection for 2010-11 in our monetary policy in April. But on the assumption of normal monsoon and global oil prices remaining around the current level, it is expected inflation will moderate from July.'

RBI advises Finmin for phased roll back of stimulushttp://www.ptinews.com/news/491003_RBI-advises-Finmin-for-phased-roll-back-of-stimulusMumbai, Jan 29 (PTI) With budgetary preparations on in full swing, the Reserve Bank of India today advised the Finance Minister to at least partially roll back the stimulus that was provided to help the industry cope with the financial crisis.

"For short-term economic management and medium-term fiscal sustainability..., it is imperative, that the Government returns to a path of fiscal consolidation. The consolidation can begin with a phased roll back of the transitory components," RBI Governor D Subbarao said while unveiling the third quarterly review of the monetary policy.

RBI's advise has come at a time when Finance Minister Pranab Mukherjee is busy preparing the budget for 2010-11 to be unveiled on February 26 in the Lok Sabha.

The government had announced three stimulus packages, envisaging a revenue sacrifice of Rs 1.

RBI hikes CRR by 75 bps to 5.75%29 Jan 2010, 1115 hrs IST, AGENCIEShttp://economictimes.indiatimes.com/news/economy/policy/RBI-hikes-CRR-by-75-bps-to-575/articleshow/5512352.cmsMUMBAI: The Reserve Bank of India on Friday increased mandatory cash reserve of banks held by it by 75 basis points in a bid to suck excess liquidity to combat rising inflation.

However, short-term lending and borrowing rates between RBI and banks were kept unchanged, leading to speculation that banks' commercial lending rates may not change.

The apex bank also upped its economic growth projection to 7.5 per cent from its earlier estimate of 6 per cent for the current fiscal.

The 75-basis point increase in cash reserve ratio to 5.75 per cent is expected to suck out at least Rs 36,000 crore from the system. The move is to check food inflation spreading to other sectors.

The Reserve Bank of India (RBI) said the CRR would be increased by 50 basis points from February 13 and a further 25 basis points to 5.75 percent from February 27.

According to RBI estimate, inflation is likely to touch 8.5 per cent by this fiscal-end from over 7 per cent in December. Earlier in October, the apex had projected the rate of price rise to be at 6.5 per cent by March-end.

The bank rate, used by banks to price long-term loans, remained unchanged at 6.0 percent.

"Though the inflationary pressures in the domestic economy stem predominantly from the supply side, the consolidating recovery increases the risks of these pressures spilling over into a wider inflationary process," it said in its third quarter review.

Central Bank of India Executive Director Arun Kaul said CRR hike is more than market expectation, definitely liquidity would go down and may have some impact on interest rate.

The Reserve Bank of India called on the government to get its fiscal house in order and said monetary policy would be ineffective unless the government rolls back its borrowing, which is on track to hit a record 4.5 trillion rupees ($96.9 bln) this fiscal year.

Taking a cue from RBI's monetary policy stance, banks might not hike their auto, home and education loans in the near term. Increases in CRR could push bond yields up, and weigh on shares of banks as well as sectors such as auto and property on concerns loan demand may slow.

The cash reserve ratio was cut by 4 percentage points in five moves between October 2008 and January 2009 as the central bank moved to support the economy during the global financial crisis.

Business, Energy or Environmental regulations or discussions

ING, OCBC complete Asian private banking deal Fri, Jan 29 05:18 PMhttp://in.news.yahoo.com/137/20100129/744/tbs-ing-ocbc-complete-asian-private-bank.html Enlarge Photo People walk in the ING office in Taipei October 20, 2008. ING Group NV completed... ING Group NV completed the sale of its Asian private banking unit to Singapore's OCBC, the biggest deal in the private banking sector since the financial crisis.

Netherlands-based ING said on Friday the sale, which is in line with its strategy to focus on fewer franchises and reduce the group's complexity, will give it an estimated net profit of approximately 300 million euros ($421 million).

The new unit will be called Bank of Singapore Ltd and will be led by Renato de Guzman, former head of ING Asia Private Bank, OCBC said in a statement.

Guzman said in a statement the private bank plans to grow and capture greater market share in existing and new markets.

Oversea-Chinese Banking Corp agreed to buy the ING unit for $1.5 billion in October last year in a deal which would elevate it to Singapore's second-ranked bank by assets.

ING said it will continue its private banking activities in China through its stake in Bank of Beijing, in India through ING Vysya Bank and in Thailand through TMB Bank.

Its private banking activities in the Benelux and in central and eastern Europe belong to its core businesses, it added.

OCBC beat HSBC Holdings Plc in the bidding and the deal helped more than triple its private banking assets to $23 billion.

With the acquisition, OCBC now has 200 private bankers and may add another 30, Guzman said at a news conference.

"We have all the elements to be able to build Asia's global private bank," he said. "First goal is to be number one in our home market -- Southeast Asia."

Guzman said the new unit wanted to grow its business in Hong Kong and Taiwan and build a stronger onshore private banking business in China. The private bank also plans to expand in the Middle East and Europe, he said.

OCBC chief executive David Conner said the private bank would be "earnings accretive" this year and will boost its return on equity. "Asia's exceptional economic growth and savings rates will no doubt generate a surge of private wealth creation,".

OCBC shares closed down 1.9 percent, underperforming the benchmark Singapore market which closed down 0.5 percent. ING shares were up 1.9 percent at 1046 GMT, slightly outperforming the DJ Stoxx banking index, up 0.7 percent.

ICICI Bank says lending rates not to go up soonhttp://www.ptinews.com/news/490699_ICICI-Bank-says-lending-rates-not-to-go-up-soonDavos, Jan 29 (PTI) India's largest private sector lender ICICI Bank's Managing Director and CEO Chanda Kochhar today ruled out an immediate hike in lending rates after the Reserve Bank announced measures to squeeze money.

"I do not see any immediate impact on interest rates.

There is so much liquidity (in the system)...Government borrowing is almost over and whatever is there, is there for investment," Kochhar told PTI on the sidelines of World Economic Forum (WEF) meet here.

The Reserve Bank in its third quarter monetary policy review raised by 75 basis points (to 5.75 per cent) the mandatory deposits banks need to park with the apex bank to tame inflation. The move is likely to suck Rs 36,000 crore out from the system.

Kochhar said the RBI's move is a good effort to maintain a balance between growth momentum and managing certain challenges like inflation.

Tata Steel forms JV with Nippon Steel29 Jan 2010, 0152 hrs IST, ET Bureauhttp://economictimes.indiatimes.com/news/news-by-industry/indl-goods-/-svs/steel/Tata-Steel-forms-JV-with-Nippon-Steel/articleshow/5511414.cmsMUMBAI | KOLKATA: Tata Steel, in continuation of an industry-wide trend, said it has formed a 51:49 joint venture with Japan’s Nippon Steel for production and sales of automotive cold-rolled flat products at Jamshedpur. In the past two months, India has seen a technical tie-up between Japan’s JFE Corp and JSW Steel and a co-promoter agreement between Uttam Galva and ArcelorMittal to collaborate on manufacture of auto grade steel. JSW’s tie-up will help the company produce high-grade skin panels, now being imported, for cars and bikes.

Similarly, Sumitomo has also inked an agreement with Bhushan Steel for sourcing hot rolled coils from the latter’s new plant in Orissa. This will be processed into auto-grade steel and sold under Sumitomo brand name. Incidentally, Sumitomo supplies sheet metal to most Japanese auto-makers including Honda, Mazda, Suzuki and Nissan.

The Tata Steel-Nippon Steel joint-venture will meet localisation needs of Indian automotive customers for high-grade CR steel sheets. For Japanese steelmakers, interest in local manufacturing in India is a pure business decision. By 2010-11, India could likely produce 2 million cars annually with an accent towards small cars.

“Post recession, the world is moving away from big cars toward small cars. For domestic steel makers, it represents a huge opportunity to supply automotive steels,” said Manoj Agarwal, MD of Adhunik Metaliks, a maker of forging quality auto steel.

Automakers in India import nearly 75% of high-grade automotive steel for outer panels of cars and other vehicles. Globally, cars are getting lighter with an eye on emission standards and higher mileage, especially with fuel getting dearer.

NTPC undertakes 17 projects to have 75,000 MW capacity by 201729 Jan 2010, 1433 hrs IST, PTIhttp://economictimes.indiatimes.com/news/news-by-industry/energy/power/NTPC-undertakes-17-projects-to-have-75000-MW-capacity-by-2017/articleshow/5513092.cmsAHMEDABAD: State-run utility NTPC has undertaken 17 projects across the country for capacity addition of 17,930 MW of power in the road map to achieve 75,000 MW generation capacity by 2017, a top company official said here.

"In a road map to growth we have 17 under-construction projects spread across India for generation of 17,930 MW of power, out of which 14 projects are of NTPC and four through joint ventures, which are in different stages," NTPC DGM (Finance) Sulochana Muralidharan told reporters yesterday.

"Land, water, fuel supply and power purchase agreements all are in place for these projects, which are expected to come up progressively in next 2-3 years say under the Eleventh or early Twelfth year plan," she said.

"We also invited bids for 9,632 MW of capacity which are in 11 projects, and we expect the awards to happen within a period of 6 months to one year," Muralidharan said.

Then we have 4,245 MW capacity projects where feasibility reports are ready and these projects are very soon going to be awarded for which NIT is to be issued, she said.

At present NTPC generates 30,644 MW power, but our target is to reach 75,000 MW capacity generation by 2017, she added.

Punj Lloyd bags Rs 1,100-cr highway development work in AP29 Jan 2010, 1721 hrs IST, PTI

http://economictimes.indiatimes.com/news/economy/infrastructure/Punj-Lloyd-bags-Rs-1100-cr-highway-development-work-in-AP/articleshow/5513636.cmsNEW DELHI: Infrastructure major Punj Lloyd today said it has bagged a Rs 1,100-crore order for highway development in Andhra Pradesh.

As per the terms of the order, bagged from GMR Hyderabad Vijayawada Expressways Ltd, Punj Lloyd will develop 116.5 km stretch of National Highway (NH) 9 between Hyderabad and Vijayawada on an EPC (engineering, procurement and construction) basis. The construction period is 27 months, the company said in a statement.

Earlier, the National Highways Authority of India (NHAI) had awarded the project on Build, Operate and Transfer (BOT) Toll basis to GMR Hyderabad Vijayawada Expressways Ltd with a concession period of 25 years.

Indian companies unfazed by Obama's anti-outsourcing call29 Jan 2010, 0615 hrs IST, Pankaj Mishra, ET Bureauhttp://economictimes.indiatimes.com/infotech/ites/Indian-companies-unfazed-by-Obamas-anti-outsourcing-call/articleshow/5511170.cmsBANGALORE: A day after US President Barack Obama reiterated his plans for creating new jobs, amid rising double-digit unemployment in the US, India’s nearly $60-billion outsourcing industry remained hopeful that its top export market will continue to grow with more companies seeking to cut costs by outsourcing work to low-cost locations.

On Wednesday, Mr Obama vowed in his first State of the Union speech that he will make creation of local jobs his top priority in 2010, and hinted that his government could end tax breaks for companies creating jobs overseas.

This is not the first instance of Mr Obama upping his anti-outsourcing rhetoric. In May last year, he had said American companies’ shipping jobs overseas will be required to pay more taxes, and that tax-deferral benefits for such companies will be ended. “It’s a tax code that says you should pay lower taxes, if you create a job in Bangalore, India, than if you create one in Buffalo, New York,” Mr Obama had said.

Som Mittal, president of Nasscom, the country’s association of software exporters, said Mr Obama has several short- and long-term pressures to cope with, but that does not mean any significant impact for the outsourcing industry. “We will be their solution and not the problem,” he said in an interview.

The proposed ‘jobs bill’, which is aimed at creating more local employment in the US, is focused at reviving manufacturing, retail and construction jobs. Last year, Mr Obama had suggested that his government would end tax incentives for American companies creating jobs overseas by removing ‘deferred tax’ on foreign income for these companies. However, no specific proposal has been brought forward to outline the execution of this move.

Mr Obama also mentioned that his government would double America’s exports and also work on the bilateral trade agreements. “These cannot be achieved by following protectionism,” said Mr Mittal.

Experts argue that such protectionist measures are short-sighted because many US companies derive significant revenues from outside the country, and any protectionist stance could lead to a backlash in other markets. Some of the top outsourcing customers, include Citigroup, GE and JP Morgan.

For instance, Citigroup in 2007 generated 52% of its revenues outside the US, and over 60% of its workforce operated from abroad, as its banking business spanned 100 countries. Citigroup’s international revenues stream kept pace through 2008, despite the financial crisis, and amounted to a whopping 74% of the total revenues. Outsourcing experts such as Rodney Nelsestuen, senior research director at US-based TowerGroup said with top US banks seeking to reduce their operational expenses outsourcing could rise, and not contract as feared.

“Outsourcing will increase as a measure to reduce operating costs to offset other cost increases such as a (still not approved but only proposed) new tax,” said Mr Nelsestuen. “The pass-through of an additional cost of business will likely be distributed throughout the customer and supply chain, resulting in higher cost financial services, lower margins, strategies to reduce operating costs, here is where outsourcers will see an expansion of outsourcing, not a contraction,” he added.

Indeed, when Mr Obama proposed that he will attempt to recover over $100 billion from top US banks by introducing new taxes, local sourcing experts said there was no clarity on such proposals to analyse any impact on offshoring. “Increased tax could lead to generally lower investment and greater cost reduction initiatives (such as offshoring),” said Andy Efstathiou, director of US-based research firm NelsonHall’s banking sourcing program.

“Actual bank behaviour would depend on the nature of the tax, the administration has not stated how it intends to implement the tax, it has stated the tax would only last for a few years,” he added.

Will Obama's attempt to curb outsourcing to India backfire?

ACC acquires Encore Cement and Additives29 Jan 2010, 1657 hrs IST, PTI http://economictimes.indiatimes.com/news/news-by-industry/indl-goods-/-svs/cement/ACC-acquires-Encore-Cement-and-Additives/articleshow/5513534.cmsNEW DELHI: Cement major ACC today said it has acquired Vizag-based Encore Cement and Additives (ECA) for an undisclosed sum.

"The acquisition will help the company (ACC) further strengthen its presence in coastal Andhra Pradesh," ACC said in a communique to the Bombay Stock Exchange.

Promoted by a few technical and management professionals, ECA has a slag grinding capacity unit of two lakh tonne per annum at Viskhapatnam.

Slag is used to make Portland cement and ACC has two such cement plants in Orissa and Chattisgarh.

Following the acquisition, ECA has now become a wholly-owned subsidiary of ACC, the statement said.

ECA has a long-term agreement with Vizag Steel Plant, which ensures steady supply to the firm.

ACC has 16 plants across India manufacturing 26 million tonnes of cement per annum.

Activity in the Oil and Gas sector (including regulatory)

ONGC bids for Venezuela oil block29 Jan 2010, 1633 hrs IST, PTIhttp://economictimes.indiatimes.com/news/news-by-industry/energy/oil-gas/ONGC-bids-for-Venezuela-oil-block/articleshow/5513453.cmsNEW DELHI: Oil and Natural Gas Corp (ONGC) has bid for Venezuela's Carabobo oil auction along with Spain's Repsol YPF SA and Petroliam Nasional Bhd of Malaysia.

Other members of the consortium pieced together by ONGC Videsh - the overseas arm of state-owned firm, include Indian Oil Corp and Oil India Ltd, sources in the know said.

The consortium is believed to have bid for Carabobo Norte I, one of the three blocks that were on offer, they said.

Bidding for Carobobo round closed yesterday that also saw a consortium made up of the US energy major Chevron, Venezuela's Suelopetrol and Japanese firms Mitsubishi, Jogmec and Inpex putting a bid.

Royal Dutch Shell Plc too submitted an offer but UK's BP Plc did not make a bid. It wasn't immediately clear if Italy's Eni SpA - the other qualified company for the auction -had bid.

The Carabobo bidding is for three areas spread over seven promising blocks in the heavy and extra-heavy Orinoco oil belt in eastern Venezuela. Results will be known by February 10.

Each of the three blocks would require an investment of up to USD 30 billion and each winning bidder would form a joint venture with state oil producer Petroleos de Venezuela

SA (PdVSA). PdVSA would have a 60 per cent stake, while the winning companies would have a 40 per cent stake.

Sources said Repsol and Malaysia's Petronas will hold 25 per cent interest while OVL would hold 10.1 per cent. IOC and OIL would have 2.45 per cent a piece.

Militant Activity/Terrorism (Particularly in Bangalore, Mumbai, Noida, Chennai, Coimbatore)

Two jawans killed in fierce gunbattle with militantshttp://www.ptinews.com/news/490223_Two-jawans-killed-in-fierce-gunbattle-with-militantsJammu, Jan 29 (PTI) Two jawans were killed in a fierce gunbattle between militants and troops in Kishtwar district early today.

Acting on a tip off, troops of 11 Rashtriya Rifles launched a search operation in Sondar forest belt in Taksham area of the district, nearly 300 kms from here, a senior army official said.

During the search, militants fired on the troops and threw grenades, he said, adding the encounter took place as troops fired back.

In the gunbattle, two jawans were killed. Three militants are in the cordon, the official said.

Maoists kill abducted CITU leader in Orissahttp://www.ptinews.com/news/491029_Maoists-kill-abducted-CITU-leader-in-OrissaRourkela, Jan 29 (PTI) The body of CITU leader of SAIL's Kalta mines Thomas Munda, who was kidnapped on January 25 by Maoists, was found in the Renjeda forest in Orissa's Sundergarh district today, police said.

"The body was confirmed to be of Munda," Sub-Divisional Police Officer (SDPO) Bonai Sundershan Sethi said.

The Maoists had left behind a poster claiming that 40-year-old Munda was a "police informer" and had been given the "death sentence".

Family members of Munda who stayed in Toda had appealed to the Maoists through the media to set him free as they had earlier released three others -- Ananda Masi Horo, Harinath Munda and his brother, Narendra Munda after their abduction.

Labor/Social UnrestTwo policemen injured in mob attackhttp://www.ptinews.com/news/491025_Two-policemen-injured-in-mob-attackFirozabad (UP), Jan 29 (PTI) Two policemen were today injured when locals indulged in stone pelting at a police team which tried to prevent forceful closure of a market, officials said here.

Policemen Pratap Singh Solanki and Omveer Singh sustained injuries when the police used mild force in an attempt to prevent some people from downing the shutters of the shops and blocking the national highway, SP Raghuveer Lal told reporters.

"Those involved in stone pelting and ruckus are being identified and stern action inculding invoking NSA would be taken against them," the SP said.