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CURRENT AFFAIRS FOR I.A.S. (PRE.) 2011

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Ericsson gets $1.3 b contract from Bharti• Bharti Airtel awarded a $1.3-billion network expansion

contract to Ericsson that would help the mobileoperator to deliver enhanced voice quality and fasterdata access to its subscribers. Ericsson will expandand upgrade Airtel’s network in 15 of India’s 22telecom circles to put in place a converged networkand expanded coverage in rural India.

• As part of this contract, Ericsson will supply itsindustry-leading portfolio of energy efficient 2G/2.5Gradio base stations, circuit and packet core, microwavetransmission and Intelligent Network. In addition,Ericsson will ensure that Bharti Airtel’s core andtransport network is 3G-ready in order to reduce timeto market and enable the fast rollout of 3G services ata later date.

India Infra to invest in Karaikal Port• Karaikal Port Private Ltd (KPPL), a wholly-owned

subsidiary of Marg, an infrastructure and real estatedevelopment company, has finalised its fund raisingplans for its second phase of expansion.

• It is a deep-water port at Karaikal district ofPuducherry. It is to be developed over three phaseswith the final phase getting operational by 2016.Phase-I of the development, which is now operationalcomprises two berths. Phase-II now underimplementation involves a capital expenditure of Rs.1,500 crore and will become operational by September2011.

• India Infrastructure Fund (IIF), which is managed byIDFC Project Equity Company Limited, will beinvesting Rs. 150 crore into the equity capital of KPPLtowards Phase-II expansion. (Locate In Atlas)

L&T partners Rolls-Royce for LWR• Larsen & Toubro Limited (L&T) and Rolls-Royce, the

global power systems company, have signed amemorandum of understanding (MoU) forcooperation to effectively address the projected needfor light water reactors (LWR) in India andinternationally. LWR technology is in use in over 60per cent of civil nuclear power plants operatingworldwide.

• The two companies have agreed to collaborate onareas including nuclear instrumentation and controls,engineered products and systems, reactorcomponents, engineering services, in-service reactorsupport and waste management.

Textile industries park to be opened soon• A comprehensive textile industries park being

developed under the Textile Centre InfrastructureDevelopment Scheme (TCIDS) of the Uniongovernment by Kerala Industrial InfrastructureDevelopment Corporation (Kinfra) is ready foropening at Taliparamba.

BoB life insurance venture to break- even by2015• State-owned Bank of Baroda (BoB) said that its

insurance venture IndiaFirst Life Insurance thatbecame operational four months ago would break-even by 2015.

• IndiaFirst Life Insurance, the 23rd player in the lifeinsurance space, is a three-way joint venture betweenBank of Baroda, Andhra Bank and their British partnerLegal & General.

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Dhanlaxmi Bank launches credit cards• Dhanlaxmi Bank, one of the fast growing private

sector banks in India, has announced its foray intoretail assets business with the launch of its creditcards business by introducing Dhanlaxmi BankPlatinum and Gold Credit Cards. Targeted at itspremium customers, both categories of cards offera host of innovative features and benefits.

• Dhanlaxmi Bank, for the first time in India isintroducing a ‘pay by transaction’ billing mode forcredit cards. Under the programme, instead of amonthly billing cycle, the interest-free credit periodis considered for individual transactions from theday of purchase. The customer thus enjoys a 45-day interest-free credit period on each purchaseand does not need to time the purchase based onthe billing cycle. This feature also gives thecustomers the flexibility to decide their own re-payment cycles.

Godrej to acquire Megasari of Indonesia• Godrej Consumer Products Ltd (GCPL) entered into

an agreement to acquire the PT Megasari MakmurGroup and its distribution company in Indonesia foran undisclosed amount.

• The Megasari Group manufactures and distributes awide range of household products includinghousehold insecticides, wet tissues and airfresheners. Its products are category leaders in theIndonesian market.

Renault-Nissan, Daimler in small-car alliance• Carmakers Renault SA, Nissan Motor Co. and Daimler

AG unveiled a wide-ranging alliance to help themcompete better in the market for small, fuel-efficientvehicles.

• The partnership comes amid a painful industry-wideslump and will be sealed with a cross-shareholdinggiving the three companies small, symbolic stakes ineach other.

• The heads of Renault and Daimler estimated that theywould achieve euro 2 billion ($2.7 billion) in costsavings and additional sales from the new allianceover the first five years.

• Renault and Nissan will each take on a 1.55 per centstake in Daimler, which in turn will take a 3.1 per centstake in each of the other two. The move will add toRenault and Nissan’s existing 11-year-old alliance thathas made it the world’s fourth largest automotivegroup with sales of 6.1 million vehicles last year.

Cabinet approval for big ticket disinvestmentin SAIL• The Union Cabinet approved the big ticket

disinvestment in Steel Authority of India Ltd. (SAIL)to mop up about Rs.16,000 crore by selling its equityand issuing fresh shares to the public.

• SAIL will be first state-owned company to hit thecapital market this fiscal as part of the government’sambitious disinvestment programme to raise thetargeted Rs.40,000 crore.

• As part of the proposal, which was approved by theCabinet Committee on Economic Affairs (CCEA), SAILwill raise an additional 10 per cent of the paid-upequity and the government, on its part, will disinvest10 per cent of its holding.

• “The net result will be, after both tranches arecompleted, the government’s shareholding will beabout 69 per cent. Public shareholding will be 31 percent,’’ Mr. Chidambaram said. As of now, publicshareholding in SAIL is 14.2 per cent.

• SAIL is now undertaking a Rs.70,000-crore expansionprogramme to raise its installed production capacityfrom 13.82 million tonnes to 23.46 million tonnesannually.

• The disinvestment is in line with the governmentpolicy, sharing ownership of CPSEs with the public,while also raising funds to finance its different socialprogrammes.

Jet Airways to start daily flights to South Africa• Jet Airways announced that it would commence daily

non-stop flights from Mumbai to Johannesburg, SouthAfrica, from April 14. This new international route marksthe first time that Jet is adding destinations to Africaon its international route network. In fact, the Jet servicewill be the first by a private airline between India andSouth Africa. Only South African Airways offers fourflights weekly between India and South Africa.

Singapore to host CommunicAsia• CommunicAsia2010, the most established information,

communication and technology (ICT) event in Asia,was held in Singapore from June 15 to 18 at theSingapore Expo. The event brings comprehensiveshowcase of convergent technologies for the globalinfocomm, media and broadcasting industries andfeature new attractions for exhibitors and visitors fromthe region, says a release.

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Four PSUs pitch for Maharatna status• Four major public sector undertaking (PSU) companies

— Indian Oil Corporation (IOC), NTPC, Steel Authorityof India Limited (SAIL) and Oil and Natural GasCorporation (ONGC) — are aiming for the ‘Maharatna’status paving way for their financial and boardroomfreedom.

• The Union Cabinet had last year set out a criteria forseeking this status.

• Officials said the Maharatna status would provideenhanced financial autonomy for PSUs for takingdecisions relating to investments in joint venturecompanies and mergers and acquisitions.

• NTPC and SAIL are hunting for captive coal blocks inforeign lands.

• At present, ONGC’s investment in any OVL projectcannot exceed Rs. 1,000 crore but could standenhanced to Rs. 5,000 crore if it acquires theMaharatna status.

Sany Group opens first plant in India• China-based Sany Group, a global major in the

construction machinery industry, inaugurated its firstmanufacturing facility in India at Chakan near(PUNE).

• The group first entered India in 2003 and has sincebeen involved in the supply of construction machineryto infrastructure projects including the Adani powerplant, Mumbai International Airport expansion, theDelhi Metro project and the Indira GandhiInternational Airport Project.

RIL to invest in Deccan 360• Reliance Industries Ltd (RIL) announced that the

company would be investing an undisclosed amountin Capt. G.R. Gopinath-led Deccan 360.

• This investment would help Deccan 360 increase theair and surface network coverage across the countryand introduce world-class services and systems toexpress end-to-end supply chain logistics space inbusiness-to-business and the retail sector, said Capt.Gopinath

Mahindra Retail launches Mom & Me store• Mahindra Retail has launched the Mom & Me store

in Chennai. Mom and Me has developed private labelsin order to bring products like ethnic fashion forwomen, infant apparel and traditional Indian toys.

Rangarajan to head panel on public expenditure• The Planning Commission announced the setting up of

an 18-member expert committee headed by Prime

Minister’s Economic Advisory Council Chairman C.Rangarajan to recommend measures for efficientmanagement of public expenditure.

• Among its terms of reference, the main brief of the high-level committee is to suggest an action plan for abolitionof the present system of classifying public expenditureas Plan and non-Plan. This will include detailing of thechanges in the mandate of the various organisationalunits in the government that deal with allocation ofpublic resources and the management of publicexpenditure.

Jaypee’s huge outlay on Ganga Expresswayproject• The Jaypee Group of Industries announced that it would

invest Rs. 70,000 crore in the next five years to build theambitious 1,047 km long Noida-Ballia Ganga Expresswayproject. It also said that the Yamuna Expressway projectwould be completed two years ahead of schedule byMarch 2011.

ICICI Bank, HDFC Bank not Indian-owned: Centre• The Central Government said ICICI Bank and HDFC

Bank could not be called Indian-owned banks, settingat rest the debate generated over the nationality ofthe top two private sector lenders.

• ICICI Bank had maintained that it continued to be anIndian bank as its management and board was Indian.

• However, ICICI Bank and HDFC Bank have over 74per cent foreign holding, including that of foreignbanks and overseas institutional investors.

• Going by the definition, they were certainly bankswhich were not owned by Indians, because equity ofat least 74 per cent or around 74 per cent was fromoutside.

SEBI issues norms for credit rating agencies• The Securities and Exchange Board of India (SEBI)

has issued transparency and disclosure norms forcredit rating agencies (CRAs) order to impart highercredibility to the processes and proceduresassociated with credit rating.

• The CRAs were asked to take necessary steps toimplement this circular immediately and ensure itsfull compliance at the latest by June 30.

• The half-yearly disclosures, stipulated by theregulator, would be made by the CRAs within daysfrom the end of the half-year (March/September). Theyearly disclosures stipulated would be made by theCRAs within 30 days from the end of the financial




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year. However for 2009-10 only, the half yearly andyearly disclosures stipulated would be made by theCRAs by June 30.

Greece woes only tip of the iceberg• After weeks of foot-dragging, mutual contradiction

and confusion, a clear plan emerged ,and members ofthe European Union agreed to a euro 110-billionpackage to stave off Greek bankruptcy.

• The package has been decided upon jointly by theEU and the International Monetary Fund and theEuropean body will be coughing up 80 billion of the110 billion-deal, with the rest coming from the IMF.

Videocon barred from doing business with WorldBank• Accusing Venugopal Dhoot-led Videocon of indulging

in fraud and corrupt practices in dealings with it, theWorld Bank has blacklisted the Indian company forthree years, ending January 11, 2013.

• Videocon Industries has been barred from doing anybusiness with the World Bank for violating“procurement guidelines”, for three years, beginningJanuary 11, 2010, a notification on the Bank’s websitesaid. The World Bank had taken a similar tough linewith Satyam Computer months before the ITcompany’s founder chairman confessed to anaccounting fraud.

• The Videocon group is a conglomerate with interestsin consumer electronics, home appliances, oil & gas,telecom and media, among others.

• The list of debarred entities from India include twoKolkata-based firms B R & Sons and Hemant Tibrewal,and three Delhi-based entities — Om Prakash Jindal,Upasana Jindal and S M Scientific Instruments Pvt.Ltd.

• These five entities were debarred by the World Bankin January this year and the sanctions would be inplace for three years till January 2013.

• In January 2009, the World Bank disclosed that it hadbanned three Indian firms — Satyam ComputerServices, Wipro Technologies and MegasoftConsultants — from receiving direct contracts fromthe Bank group under its corporate procurementprogramme.

Verdict can impact ADAG’s power plans• With the Supreme Court delivering its much awaited

verdict on the gas dispute between the Ambani

brothers, the 2-1 verdict against the younger sibling,Anil Ambani, could have an adverse impact on theoutcome of its power projects, including the 7,000MW plus Dadri power project in Uttar Pradesh.

• The Dadri project, hanging fire for years now, willnow most likely have to buy gas at the governmentapproved price of $4.20 per mBtu (million Britishthermal unit) as and when the Government makes anysuch allocation. The verdict has also renderedReliance Natural Resources Limited (RNRL) as a shellcompany as it at present has little or no projects inhand.

• The Mukesh Ambani-owned Reliance IndustriesLimited (RIL) hinted that it might sell gas from its KG-D6 fields to RNRL at $4.20 per mBtu.

• It also said that the tenure of gas supply would haveto be drastically cut from 17 years as being sought byRNRL. This could have an impact on the long-termcost analysis on the power generation plans of itsgas-based projects, which are estimated at 8,000 MW,and projections by the ADAG would have to be re-drawn and re-done in the changed circumstances.

• There will be no impact of this verdict on its UltraMega Power Projects as they are all coal-based unitsand already half-way through with theirimplementation.

• The Supreme Court ruled that the Ambani family MoUcould not over-ride the Government’s right to fix priceand approve utilisation of gas and had asked the twofirms to renegotiate fuel supply.

• In the 2005 family MoU, RIL was to supply 28 millionstandard cubic meters per day (mscmd) of gas to RNRLfor 17 years at $2.34 per mBtu. The gas was sought byRNRL to fire its proposed 7,800 MW power plant inDadri, Uttar Pradesh. (Locate In Atlas)

Set up loan guarantee authority for educationloans• The Planning Commission has suggested that the

Human Resource Development Ministry examine theoption of setting up a loan guarantee authority as aseparate division within the purview of the proposedNational Education Finance Corporation (NEFC).

• The proposed NEFC aims at refinancing studenteducation loans and institutional loans atconcessional rates with longer repayment, which willhelp expansion and new investments in the highereducation sector, particularly universities.

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• The NEFC will use the educational cess released bythe government, which is free of cost and also borrowsfrom the market, so that the average cost of fundsadvanced as loans is lower than the rate at which itlends to banks. This differential rate will be the NEFC’smargin or profit.

India, Singapore to double trade• Seeking to put the trade relations between the two

countries on a fast track, India and Singapore decidedto double their trade in the next five years from $16billion to $32 billion.

• India also asked Singapore to recognise its professionals,such as doctors, nurses, accountants and architects inSingapore. Both the countries also launched the secondreview of the India-Singapore free trade and servicesagreement officially known as the ComprehensiveEconomic Cooperation Agreement (CECA).

• India also signed a pact with Singapore for greatermarket access for its generic (off-patent) drugs in theSoutheast Asian nation. The two countries also setnew targets for their economic engagement in termsof further removing trade barriers and encouragingthe flow of people from one country to the other.

• Both contries agreed to work towards doublingbilateral trade from $16 billion to $32 billion by 2015.

Automatic route allowed for IFCs• To increase fund flow into the resource-starved core

sector, the Reserve Bank of India allowedinfrastructure finance companies (IFCs) to raisemoney from overseas markets through the automaticroute.

• Created as a new category under the non-bankingfinance companies a few months back, IFCs can nowraise external commercial borrowings (ECBs) up to 50per cent of their owned funds automatically.

• The apex bank said, however, ECBs beyond the halfthe size of their funds would require its approval.

• Under the present ECB norms, funds can be raised inoverseas markets at a maximum rate of globalbenchmark interest rate , LIBOR (London Inter-BankOffered Rate), plus 200 basis points if the loan is forthree years, up to 300 basis points if the debt is up tofive years and 500 basis points if it is above five years.

Bank of Rajasthan to merge with ICICI Bank• Bank of Rajasthan, one of the oldest private sector

banks in the country, announced that it would mergewith the largest private sector bank, ICICI Bank.

• Bank of Rajasthan is a listed bank with its corporateoffice in Mumbai and registered office at Udaipur inRajasthan.

SBI Mutual launches PSU fund• SBI Funds, the joint venture between State Bank of

India, and Societe Generale Asset Management(France), announced the launch of its PSU Fund, anopen-ended equity scheme, which will invest instocks of the PSU companies.

Jindal Steel buys Omani firm• In a strategic move aimed at extending the presence

of the company overseas, Naveen Jindal-owned JindalSteel and Power Limited (JSPL) announced theacquisition of Oman-based Shadeed Iron and SteelCo for $464 million.

• JSPL, through its 100 per cent subsidiary Jindal Steeland Power (Mauritius) Ltd has decided to acquireShadeed Iron & Steel Co (Shadeed), it said. “Adefinitive share purchase agreement (SPA) and othertransaction documents have been signed at $464million, including the assumption of liabilities,” itadded.

Abbott buys Piramal’s formulations business• Piramal Healthcare entered into a definitive agreement

with Abbot Laboratories of Illinois, U.S., to sell itsdomestic formulations business (also referred to ashealthcare solutions business) for a total cashconsideration of $3.72 billion (around Rs.17,500crore).

• Abbot will pay $2.12 billion on closing of the sale inthe second half of 2010 and a further $400 million ineach of the subsequent four years after the closingof the transaction, commencing in 2011.

Hindujas to acquire European bank• The Hinduja Group, a diversified global business

conglomerate, announced that it would acquireEuropean private bank KBL epb for euro 1.35 billion( about Rs.8,770 crore).

• KBL epb, a subsidiary of Belgium-based KBC Group,is one of the largest onshore private banking groupswith affiliated local banks in 55 locations across tenEuropean countries.

• As part of the deal, the Hinduja Group will acquireKBC’s entire interest in the subsidiary including allthe private banking subsidiaries and life insurancebusinesses. KBL epb had assets under managementof euro 47 billion. The closing of the transaction is




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subject to regulatory approvals and is expected to becompleted in the third quarter of 2010, a jointstatement said.

Maharatna status for 4 PSUs• Paving the way for more financial autonomy and

freedom in decision making for big ticket investmentsin India and abroad, the Central Government hasgranted ‘Maharatna’ status to four giant public sectorundertakings (PSUs) — NTPC, Oil and Natural GasCorporation (ONGC), Indian Oil Corporation (IOC)and Steel Authority of India Limited (SAIL).

• However, while all four blue chip PSUs have beengiven the new status, only NTPC would be able toexercise it as it has the requisite number of non-officialdirectors on its board.

EU seizure of Indian drugs improper: WHO• India’s complaint against the European Union on the

unjust seizure of cheap generic drug consignmentsmeant for Latin America and African nations hasreceived a boost, with the World Health Organisationterming such action “misuse of rules” againstcounterfeit medicines.

• In a statement issued in Geneva, the WHO rappedthe EU for seizing the Indian generic drugs in transitfor patent violation.

• India and Brazil have asked the EU and theNetherlands to enter into dispute settlementconsultations over the alleged violation of globalrules.

• The two countries raised the issue in 2008 also whenDutch customs authorities detained Indian genericdrugs at the behest of leading Western pharmaceuticalgiants.

• Under the WHO dispute settlement provisions, theEU will have to enter into consultations with Indiaand Brazil as a first step and amicably resolve theissue within two months. If they fail to reach anagreement through Article 4 consultations, the twocountries can call for the establishment of a disputesettlement panel to adjudicate the alleged violationsof trade rules by Brussels.

GSM operators move TDSAT• Three leading mobile operators have pre-empted a

policy change by approaching the Telecom DisputesSettlement and Appellate Tribunal (TDSAT) againstthe Telecom Regulatory Authority of India’s (TRAI)recommendations on 2G spectrum, including a one-time fee for holding radio waves beyond 6.2 Mhz.

• The operators who have approached the telecomtribunal are: Bharti Airtel, Vodafone and Idea.

• The trio have been voicing their criticism of TRAI’srecommendations and have asked the government todump the report, which according to them is“retrograde” and “absurd”. The GSM operators arealso critical of capping the spectrum at 8 MHz in allcircles except Delhi and Mumbai where the limit is 10MHz, as they think it will restrict future growthprospects.

Ballmer sees big role for India in ‘cloudservices’• Steweve Ballmer CEO of Microsoft Corporation said

India would play an important role in its overall cloudservices strategy..

• Many IT firms, including NIIT, Cognizant and CDCSoftware, besides Bangalore-based Indian Instituteof Science (IISc), would be creating solutions andtrain manpower based on its cloud computingplatform,

• Cloud computing refers to Internet-based computingwhere applications and software are accessed overthe Internet, resulting results in reduced IT costs.Today, Microsoft’s cloud infrastructure supports over100-crore customers and two-crore businessesglobally.

• According to the study, the global cloud computingmarket is expected to cross $70 billion by 2015. As aresult of the growing demand for independentsoftware vendors, developers and system integrators,additional three-lakh jobs related to cloud servicesare estimated to be created in India over the next fiveyears.

Essar to acquire Avaya stake in AGC Networks• The Essar Group and Avaya, a global leader in

enterprise communications systems, software andservices, said they had entered into a definitiveagreement under which the Essar Group wouldacquire Avaya’s entire 59.13 per cent stake in BSEand NSE-listed AGC Networks (earlier Avaya GlobalConnect) for $44.5 million, or Rs.206.19 crore, at Rs.245a share subject to customary Indian regulatoryrequirements and completion of the mandatory openoffer.

Nano rolls out of Sanand plant• Nano, claimed to be the world’s smallest and cheapest

car, rolled out of the assembly line at its new plant at

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Sanand, near Ahmedabad, raising the hopes of thelower and middle class families in the country offulfilling the dream of owning a four-wheeler.

• The Sanand plant set up at a cost of about Rs. 2,000crore, would have the capacity to produce 2.50 lakhcars per annum to be achieved in phases and wasexpandable up to 3.50 lakh cars a year.

South Africa seeks $10 billion bilateral tradeby 2012• Visiting South Africa President Jacob Zuma sought a

quantum jump in bilateral trade to $10 billion by 2012between his country and India.

• Bilateral trade, valued at $1.3 billion in 2000-01,crossed the $7-billion mark in 2008-09, whileinvestments in 2008-09 were pegged at $9 billion.

• Addressing the launch of the India-South Africa CEOsForum, he said India was South Africa’s largest tradingpartner in South and Southeast Asia and among thetop ten partners globally.

Wipro targets $100 million from China’s newhydraulics plant• Wipro Infrastructure Engineering, the information

technology giant’s hydraulics arm, will in six monthslaunch one of Indian industry’s most ambitiousattempts to tap China’s fast-growing motor vehiclemarket, when the gates open at its sprawling new $5.7 million facility in southern China.

• The company this week formally announced a dealwith the local government in Changzhou to set up amanufacturing plant to make hydraulic cylinders tocater to the domestic truck market, during PresidentPratibha Patil’s visit to Shanghai.

25 % public holding mandatory for listing onbourses• In a significant step aimed at attracting a larger number

of investors and checking manipulation in shareprices, the Central Government made it mandatory forcompanies listed on stock exchanges to raise publicshareholding to 25 per cent over a five-year period bydiluting at least five per cent each year.

• In line with Finance Minister Pranab Mukherjee’sbudgetary promise of ensuring larger floating stocksof all listed entities, a Finance Ministry statement saidthe relevant regulations stand amended to the effectthat “the minimum threshold level of public holdingwill be 25 per cent for all listed companies.”

• Under the new norms notified by the FinanceMinistry, market analysts expect about 180companies, including 35 public sector undertakings(PSUs), to enter the market for adhering to the 25 percent public holding guidelines. In all, there are morethan 4,500 companies listed on the bourses.

India opposed to EU plan on taxing banks• India has opposed levying any tax on banks to mop

up funds for managing financial turmoils andorganising bailouts in future, the likes of which wereput in place by some of the developed economies inthe wake of the global financial crisis.

• At a meeting with Presidential Committee Chairman(for the G-20 meeting) Il Sakong at Busan (SouthKorea), Finance Minister Pranab Mukherjee made itclear that instead of a tax on banks, India would prefera regulatory mechanism as was in operation in thecountry.

• With Australia and Canada also opposing the banktax proposal which was put forward by the EuropeanUnion and supported by the U.S. and the U.K., the G-20 meeting of finance ministers is unlikely to arrive ata consensus on this contentious issue.

• The differences over the bank tax proposal havecropped up because the fallout of the global turmoildid not impact the financial systems of India,Australia and Canada in the same way as it did in theU.S. and some of the EU countries.

• With many of the European economies saddled withhuge public debt owing to increased public spendingduring the crisis years of 2008 and 2009, the levy onbanks is aimed at sparing taxpayers from chipping infor bailouts in future.

• report and make recommendations on the roadmap toroll out five projects – tax information network (TIN),the new pension system (NPS), the National TreasuryManagement Agency (NTMA), the expenditureinformation network (EIN) and GST.

Andhra Bank ties up with UAE Exchange• Andhra Bank announced that it had tied up with the

United Arab Emirates Exchange Centre at Kuwait inan arrangement under which the bank’s customers,NRIs there, can remit amounts that will be credited toaccount holders in India the same day.

Bharti completes acquisition• In the largest-ever telecom takeover by an Indian firm,

Bharti Airtel completed a deal to buy out Kuwa.




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Tweak rules to tap long term debt for infra fund• Recommending that a debt fund of Rs.50,000 crore be

set up for financing infrastructure projects, an expertpanel headed by HDFC chief Deepak Parekh askedthe government to change rules to allow funding bypension and insurance companies.

• The panel on the infrastructure debt fund has alsourged the sectoral regulators — the Reserve Bank ofIndia (RBI), the Securities and Exchange Board ofIndia (SEBI), the Insurance Regulatory andDevelopment Authority (IRDA), and the Pension FundRegulatory and Development Authority (PFRDA) —to weak their existing laws to enable market players touse the large amount of untapped insurance andpension funds.

• Such move would help reduce interest costs andhence cut user-charges since banks are not able toprovide the required long-term funds for infrastructureprojects, the report said.

• In its report submitted to the Planning Commission,the Parekh Committee further suggested that theproposed infrastructure fund with an initial corpus ofRs.50,000 crore be set up as venture capital fund(VCFs) to be managed and regulated by SEBI.

• For this purpose, SEBI should be asked to amend itsguidelines for VCFs to enable investment in the debtmarket. At present, only a part of VCF is allowed to beinvested in debt, the panel said.

• The report also said pension and insurance moneyshould be permitted to be invested in the fund toprovide long-term financing to infrastructure projectscoming under the public-private partnership (PPP)model.

• The report suggested that the IRDA and the interimpension watchdog PFRDA be approached to modifythe rules to enable these funds to invest in the infrafund.

• Besides, the report recommended that foreigninsurance, pension and sovereign funds be asked toinvest in the proposed infra fund. For this, the RBIwill have to be approached to create a special windowfor these kinds of foreign debt with tenure of 10 yearsor more.

• Also, the multilateral agencies like the World Bankand the Asian Development Bank would be asked toinvest in the fund.

• The recommendations of the Parekh Committeeassume importance since infrastructure upgradation

is required to sustain high economic growth andrequire $1 trillion during the XII Plan (2012-17).

L&T, Hindalco among six new SEZs• The Board of Approval (BoA) of the Commerce and

Industry Ministry approved six new special economiczones (SEZs), including proposals from L&T andHindalco. It also granted time extension to MukeshAmbani-led Reliance Industries’ (RIL) Haryana SEZ.

• These include TCS, Uttam Galva, Unitech RealityProjects Ltd and the Navi Mumbai SEZ.

LIC to act as registrar for UID project• Life Insurance Corporation of India (LIC) signed a

memorandum of understanding with the UniqueIdentification Authority of India (UIDAI) to act as aregistrar for the delivery of the unique 16-digitidentity numbers to customers, making it the firstinstitution other than State governments to sign upwith UIDAI.

• UIDAI has envisioned the UID as a number that willmake it possible for Indian residents to easily establishtheir identity to facilitate their interaction with variouspublic and private agencies across the country. It isto be based on demographic and biometric data, thatis, photograph, fingerprints (all ten fingers) and irisscan of an individual and hence prevents duplication.The UID number has been branded ‘Aadhaar’(foundation).

India investment fund mooted• Union Road Transport and Highways Minister Kamal

Nath asserted that “a very positive sentiment”towards India was discernible now among foreigninvestors, especially in its infrastructure domain.

• Mr. Nath said he had suggested to Temasek, aSingapore-based investment firm with a wide reach, toexplore the possibility of setting up a dedicated Indiainvestment fund. Having first floated the proposal lastOctober, he would now “raise” the subject again infollow-up talks.

• On a “conservative estimate,” India’s roads andhighways sector recorded $2-3 billion worth of foreigndirect investment in the last 12 months. Commitmentsof this order from various countries, including the U.S.,were now at various stages of being utilised.

Mid-term appraisal of XI Plan gets Cabinet nod• The Union Cabinet approved the mid-term appraisal

(MTA) of the Eleventh Plan (2007-12) projecting a scale-down in average growth from 9 per cent targeted initially

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to 8.1 per cent during the five-year period as aconsequence of the slowdown in the wake of the globalfinancial crisis.

• The MTA, which was endorsed by the full PlanningCommission headed by Prime Minister Manmohan Singhat its meeting on March 23, will now be placed before theNational Development Council (NDC), the country’shighest policy making body, also headed by the PrimeMinister, for final approval.

Centre restructures Bharat Bhari• The Centre laid out a road map to revive the sick

engineering PSU Bharat Bhari Udyog Nigam ©Limited(BBUNL) and its four subsidiaries through a process offinancial restructuring and change in administrativecontrol.

• The Cabinet Committee on Economic Affairs allowedthe takeover of Burn Standard Company andBraithwaite and Company by the Railways and handedover the refractory unit of Burn Standard at Salem inTamil Nadu to SAIL and merged Braithwaite, Burnand Jessop Construction Company with BBUNL.

• These transfers have been backed by a financialpackage involving an expenditure of Rs. 1,139.16 croreas non-financial assistance by waiving governmentloan and interest of Burn Standard and assistance ofRs. 14.50 crore to it.

Reliance Industries to acquire InfotelBroadband• Reliance Industries Ltd. (RIL) entered into an

agreement to acquire a substantial stake in InfotelBroadband Services (P) Ltd investing about Rs. 4,800crore by way of subscription to fresh equity capital atpar to be issued by Infotel Broadband to RIL.

• Post-investment, RIL will own 95 per cent of the equityand Infotel Broadband will become a subsidiary ofRIL.

• The Mukesh Ambani-led RIL and Reliance ADAGroup companies owned by his younger brother AnilAmbani have agreed on May 23, to cancel all existingnon-compete arrangements which the two groupsentered in January 2006 at the time of corporate de-merger.

• However, RIL had agreed not to enter the gas-basedpower generation business for the period up to March31, 2022, with an exception made in respect of RIL’scaptive gas-based power plants.

• RIL sees the broadband opportunity as a new frontierof knowledge economy in which it can take aleadership position and provide India with anopportunity to be in the forefront among the countriesproviding world-class 4G network and services.

RCom to demerge Reliance Infratel• Reliance Communications (RCom) proposes to

restructure ownersip of its subsidiary Reliance Infratel(RInfratel) through a demerger or other options. Theboards of directors of RCom and RInfratel approvedin-principle a proposal to restructure ownership ofRInfratel to facilitate creation of the world’s largestindependent telecom infrastructure company, notowned or controlled by any telecom operator.

IRDA will regulate ULIP schemes• The Central Government ended a two-month-long turf

war between the Insurance Regulatory andDevelopment Authority (IRDA) and the Securities andExchange Board of India (SEBI), saying unit linkedinsurance products (ULIPs) will be regulated by theIRDA.

• “Life insurance business shall include any ULIP orany such instruments. This would set at rest all theissues regarding ULIPs between two financialregulators,” the government said in a statement afterpromulgating an ordinance to make necessarychanges in the law.

• Besides, the government said a high-level committeechaired by Finance Minister Pranab Mukherjee wouldsort out all issues of jurisdiction regarding hybridproducts.

• SEBI in April took the market by surprise when itbanned 14 life insurance firms from issuing fresh ULIPschemes. However, the IRDA asked the life insurersto ignore the SEBI order and the matter then went tothe Finance Ministry, which advised them to movethe court and in the meanwhile had asked them tomatain status quo. ULIPs account for more than 50per cent of the life insurance business and the moneycollected is invested in equities.

• The ordinance promulgated by President Pratibha Patilamended the RBI Act, the Insurance Act, the SEBIAct and the Securities Contracts Regulation Act tobring about clarity on regulation of ULIPs. ULIPs area hybrid instrument that combines both insurance andinvestment. While the Securities and Exchange Boardof India saw ULIPs as investment products and henceasserted its right to regulate those products, the IRDAtreats them as insurance instruments.




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Manmohan: Double farm growth rate to ensurefood security• Prime Minister Manmohan Singh said the agricultural

growth rate must be doubled to 4 per cent to ensurefood security for the growing population.

• Agriculture growth rate in 2009-10 was 0.2 per centowing to drought in 399 districts during last year’skharif. As against this, the government set a target of4 per cent agriculture growth per annum in the 11thFive-Year Plan (2007-12).

• India commands about 2.3 per cent of the world’s landarea and about 4 per cent of the earth’s fresh waterresources, but feeds 17 per cent of the worldpopulation. This puts tremendous pressure on ourresources and makes the need for newer and bettertechnologies even more critical.

Piramal Healthcare to buy Canadian firm’sassets• Piramal Healthcare announced the signing of a

defin i t ive agreemen t to acquire Canada’sBioSyn tech’s assets for a considerat ion ofCanadian $3.9 million (about Rs. 17.65 crore).

• BioSyn tech is a medical device companyspecialising in the development, manufacturing andcommercialisation of advanced biotherapeuticthermogels for regenerative medicine (tissue repair)and therapeutic delivery.

India likely to halve poverty rate by 2015:U.N. report• India is expected to reduce its poverty rate from 51

per cent in 1990 to 24 per cent in 2015, slashing thenumber of extremely poor by 188 million. Butprogress in the rest of South Asia is not sufficientto halve the level of poverty by that target date,according to a United Nations report on theMillennium Development Goals for 2010.

• The sharpest reductions worldwide continue to berecorded in East and South-East Asia, where theMDG target to halve extreme poverty has alreadybeen met, while most of South Asia is in danger ofmissing it.

• The percentage of people living on less than $1.25a day in East Asia dropped from 60 in 1990 to just16 in 2005, and from 39 to 19 in South-East Asia.The rate of poverty in China is expected to fall toaround five per cent by 2015.

World Bank aid to India to touch $9.3 billion• The World Bank’s total financial commitment to

India’s development agenda is set to touch $9.3 billionby the end of its fiscal year ending June. Spread across25 new projects, the loan assistance is aimed athelping the country sustain the much needed highgrowth to lift millions out of poverty.

• World Bank Country Director in India Roberto Zaghasaid the total expected lending would include $2.6billion as interest-free credits from the InternationalDevelopment Association (IDA) and $6.7 billion inthe form of long-term, low interest loans from theInternational Bank of Reconstruction andDevelopment (IBRD).

• Till date, both IBRD and IDA-aided projects with atotal new commitment of $8.3 billion had already beenapproved, while the remaining projects worth $1billion were to be presented before the Bank’s boardover the next few days, he said.

• He Pointed that huge funding needs of India’s fastgrowing economy such as the estimated requirementof $500 billion for infrastructure development aloneduring the current Plan period,

RIL to acquire 45% interest in PioneerNatural’s asset• Reliance Industries Limited (RIL) announced that its

subsidiary, Reliance Eagleford Upstream LP, hasexecuted definitive agreements to enter into a jointventure with U.S.-based Pioneer Natural ResourcesCompany, Irving, Texas, under which, Reliance willacquire a 45 per cent interest in Pioneer’s core EagleFord Shale acreage position in two separatetransactions.

• Pioneer and Newpek LLC, Pioneer’s current partner inthe Eagle Ford, will simultaneously convey 45 per centof their respective interests in Eagle Ford to Reliance.Newpek, a wholly-owned subsidiary of ALFA, S.A.B.de C.V., at present owns about 16 per cent non-operated interest in Pioneer’s core Eagle Ford Shaleacreage.

Differences on economy set to play out inToronto• World leaders were gathering in Canada for G8 talks

on global security and development, amid calls todeliver on past promises and a brewing dispute onhow to shore up fragile economic recovery.

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• Under a tight security blanket, leaders from the Groupof Eight richest nations were meeting in an exclusive,remote hotel resort in Huntsville, Muskoka, some 220km north of Toronto.

RCom, GTL Infrastructure in Rs.50,000-croredeal• The Reliance Communications (RCom) and its

subsidiary, Reliance Infratel, have entered into aRs.50,000-crore ($11 billion) deal with GTLInfrastructure to create the world’s largestindependent telecom infrastructure company that willbe neither owned nor controlled by a telecom operator.

• Under the deal, which has the in-principle approval ofthe Board of Directors of all the three companies, thetower assets of Reliance Infratel will be merged withGTL Infrastructure.

• According to a statement from the RelianceCommunications, the company will continue to ownReliance Infratel’s 200,000-km fibre optic network andrelated assets, India’s largest optic fibre network.

• The quantum of cash infusion into the RCom and theshare swap ratios for the RCom and Reliance Infratelminority shareholders will be finalised in due coursewith the help of independent valuers and advisors.

India joins select club to counter financial frauds• After nearly a five-year wait, India has finally become

a full-fledged member of the Financial Action TaskForce (FATF), an inter-governmental bodyresponsible for setting global standards on anti-money laundering (AML) and combating financingof terrorism (CFT).

• With its induction as the 34th member-country of theglobal body that chalks out policies to counterfinancial frauds, India will have access to informationon suspicious financial transactions in Switzerland,China, the U.S. and the U.K. The development marksa significant step towards tracing the source of terrorfinancing and black money stashed away in tax havensabroad.

• Having gained ‘Observer’ status at the FATF inNovember 2006, India has been working towards full-fledged membership. The decision to grant it full-member status was taken during the FATF’s plenarysession held in Amsterdam during June 23-25.According to an official statement, the FATFdiscussed and adopted India’s mutual evaluationreport, along with those of Saudi Arabia and Brazil,“assessing compliance with the international

standards for combating money laundering andterrorist financing — the 40+9 Recommendations.”

TRAI suggests 74 % FDI limit for broadcastcarriage services• The Telecom Regulatory Authority of India (TRAI)

recommended that the foreign investment limit forbroadcast carriage services such as DTH, IPTV,Mobile TV, HITS, Teleport and MSOs, which areupgrading to digital and addressable environment,may be raised to 74 per cent. The existing limit formost of these services is 49 per cent.

• It also said the foreign investment limit for local cableoperators, news and current affairs TV channels andFM radio be fixed at 26 per cent, while there should beno restriction on FDI for uplinking and downlinkingof TV channels other than news and current affairsTV channels.

• TRAI also recommended that all foreign investmentless than 26 per cent would be through the automaticroute, while investments of 26 per cent and above willrequire prior approval of the government.

World Bank approves $430 million to MUTP• The World Bank approved $430 million to finance the

Mumbai Urban Transport Project (MUTP) 2A toimprove the suburban railway system in the MumbaiMetropolitan Region – one of the world’s largest urbancentres with a population of 18 million in 2001. In 2006-07, an estimated 6.4 million passengers daily (2.3 billionpassengers annually) travelled on the suburbanrailway, which makes it the lifeline of the city.

U.S. House passes financial reform bill• The House of Representatives adopted legislation to

revamp the nation’s financial regulatory system,voting mostly along party lines as partisan acrimonyimpeded cooperation even on the shared goals ofaverting economic crises.

• The bill gives government regulators the authority toliquidate failing financial companies by breaking themapart, selling assets and forcing creditors andshareholders to take losses so that taxpayers do notpay the bill.

• The legislation also vastly expands the regulatorypowers of the Federal Reserve and establishes asystemic risk council of high-ranking officials, led bythe Treasury Secretary, to detect potential threats tothe overall financial system.




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• It creates a powerful new consumer financialprotection bureau and widens the purview of theSecurities and Exchange Commission to broadenregulation of hedge funds and credit rating agencies.

• The measure restricts the ability of banks to investand trade for their own accounts — a provisionknown as the Volcker Rule, for its proponent, formerFed Chairman Paul A. Volcker — and creates a newregulatory framework for derivatives, the complexfinancial instruments that were at the heart of the 2008crisis.

MRPL to export products to Mauritius• India has signed a three-year agreement to export fuel

worth $2 billion to Mauritius and also agreed to lookinto the possibility of setting up a refinery in the Islandnation.

• The agreement was signed by Mangalore Refineryand Petrochemical Limited (MRPL) Managing Director,U.K. Basu and Mauritius State Trading CorporationGeneral Manager Ranjit Singh Soomarooah. It wasagreed that MRPL would export 1.1 million tonnes ofauto fuels, jet fuel and furnace oil annually for threeyears. Mauritius would buy one lakh tonnes of petrol,3.50 lakh tonnes of diesel and 2.70 lakh tonnes of jetfuel annually for three years beginning August 1, Mr.Soomarooah said during the signing ceremony.Mauritius’ Minister of Commerce and IndustryShowkutally Soodhun invited MRPL and its parentfirm Oil and Natural Gas Corporation for a 50:50 jointventure to set up the Island nation’s maiden refinery.

Rebound in China’s demand for iron ore• A resurgent demand from China’s fast-rebounding

economy for Indian iron ore and raw materials hashelped revive trade between the two countries in thefirst half of 2010 after a poor performance last yearcaused by the financial crisis.

• With an 80 per cent rise in Indian exports, two-waytrade hit $ 25 billion in the first five months of thisyear, officials said. The two countries now expect tobeat their $ 60 billion target for the year.

• Iron ore, slag and ash accounted for $6.4 billion — 63per cent of India’s net exports to China. Chineseimports rose 82 per cent in the first five months of thisyear, largely driven by rising iron ore prices and arevival of Chinese industry following last year’s slump.The only other significant contribution to India’sexport basket was cotton yarn and fabrics, which grewseveral fold year-on-year, accounting for $1.07 billion.

NMDC mulls joint venture with Japanese steelmajors• NMDC is in talks with Nippon Steel and Kobe Steel of

Japan for partnership in two steel plant projects inKarnataka and Andhra Pradesh. The state-owned firmwill also be investing Rs.3,000 crore to set up a 12-million tonne per annum pipeline in Chhattisgarh tosupply iron ore to its domestic steel customers.

Easier access for Indian IT professionals inMalaysia• Malaysia assured India that it would ensure smooth

and hassle-free movement of IT and otherprofessionals from India and other parts of the world.Both countries also set an ambitious bilateral tradetarget of $15 billion by 2015, indicating enhanced levelsof engagement.

• Bilateral trade between two countries grew at anaverage growth rate of 23.7 per cent between 2004and 2008 and it reached as high of $10.5 billion in 2008just before the worst effects of the global financialcrisis. However, in 2009, trade declined by 29 per centand has shown a positive growth in the first quarterof 2010-11.

Bharti to invest $600 m in Nigeria• India’s largest cellular service company Bharti Airtel

will invest $600 million in Nigeria’s mobile marketfollowing its takeover of Zain Telecom’s Africanbusiness for around $10.7 billion.

• Bharti Airtel embarked on the largest-ever telecomtakeover by an Indian firm on June 8, when itcompleted a transaction to buy Kuwait-based ZainTelecom’s businesses in 15 African countries for $10.7billion.

• The Africa holdings include Burkina Faso, Congo,Gabon, Ghana, Kenya, Malawi, Madagascar, Niger,Sierra Leone, Tanzania, Uganda, Chad and Zambia.(Locate In Atlas)

IMF raises global growth forecast• The International Monetary Fund has raised its world

economic growth forecast from 4 per cent to 4.5 percent, reflecting the positive impact of economicactivity in the first half of the year as much as it did“strong clouds [that] have appeared on the horizon,”according to an official statement.

• Specifically the Fund was cheered by the fact that theworld economy expanded at an annualized rate of over5 per cent in the first quarter of 2010 and that growthwas stronger than expected in most countries,

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including the United States, Europe, Japan, Brazil, andIndia. “A good sign for the future,” according to theIMF, was the finding that in most cases such growthreflected stronger private demand.

• In particular the IMF forecasted estimated foradvanced countries at 2.6 per cent for 2010 and 2.4per cent for 2011, emphasising that these low growthrates implied that high unemployment would remain acentral issue. In significant contrast however theFund’s growth projection for emerging and developingeconomies was 6.8 per cent in 2010 and 6.4 per cent in2011, which included an upward revision of 0.5 percent for 2010 and a downward revision of 0.1 per centfor 2011.

HCL Info enters cloud computing• HCL Infosystems launched its end-to-end cloud-

based computing solution service — O’zone — mainlyaimed at enterprises, mid-sized organisations andprofessionals.

• HCL O’zone will deliver the benefits of reduced capitalexpenses, increased data security, increased flexibilitythrough server consolidation, reduced power andcooling, green computing and disaster recovery. Thesolution will also provide 24x7 technical support tomanage scalability and deliver optimum performance.

• Meanwhile, HCL Infosystems announced theacquisition of 60 per cent stake in Dubai-based NTSGroup.

• NTS, a ‘total solutions’ provider ranging from IThardware to software services and consulting, haspartnered leading enterprises in the region buildingcustomised solutions for a host of business needs.

World Bank approves two loans• The Centre signed two agreements with the World Bank

with latter agreeing to give $407 million loan to scale upmicrofinance services in unbanked areas and improvecapacity to generate quality statistics.

• While $300 million is for ‘Scaling up sustainable andresponsible microfinance project’, $107 million hasbeen granted for ‘India statistical strengtheningproject’.

• The objective of ‘Scaling up sustainable andresponsible microfinance project’ is to scale up accessto sustainable microfinance services to the financiallyexcluded, particularly in under-served areas of Indiathrough, among other things, the introduction ofinnovative financial products and fosteringtransparency and responsible finance.

• The project will be implemented by the SmallIndustries Development Bank of India (SIDBI) overfive years.

• While $100 million is a credit from World Bank’sconcessionary lending arm International DevelopmentAssociation, the remaining $200 million is a loan fromthe International Bank for Reconstruction andDevelopment.

Slow progress in ASEAN talks on services,investments• India’s negotiations with ASEAN for a comprehensive

services and investment agreement are progressingat a “painfully slow” pace and major member countriesfear that a ‘deal with India’ would lead to the servicesmarket being taken over by the former.

• Such are the reservations among countries likeSingapore, Thailand, Malaysia and Vietnam that theyare rather opting for Free Trade Agreements (FTA) atthe bilateral levels rather than rushing in to formalisea multi-lateral deal on services and investments.

• Under the proposed services and trade agreement,India is demanding liberalisation of trade in servicesand investments, particularly movement ofprofessionals. Once the pact is signed andimplemented, Indian professionals will be able toincrease their presence in ASEAN countriessubstantially. India has already signed the FTA ongoods with ASEAN which came into effect fromJanuary 1, 2010.

• India had recently put in place a comprehensiveagreement with South Korea and is in the advancedstage of negotiations with Japan. The 27-nationEuropean Union and India are also holding extensivetalks to clinch a deal on FTA within this year.

8 Indian firms on Fortune 500 list• Eight Indian companies, including Indian Oil

Corporation (IOC) and Mukesh Ambani-led RelianceIndustries Limited (RIL), have made the cut on the listof the world’s 500 largest companies compiled byFortune magazine.

• The league of 500 elite companies for 2010 is toppedby U.S. retailer Wal-Mart Stores, followed by RoyalDutch Shell and Exxon Mobil, in that order.

• The other Indian companies on the list are: Tata Steel,Tata Motors, Bharat Petroleum Corporation Limited ,Hindustan Petroleum Corporation Limited (HPCL),ONGC and the State Bank of India (SBI).

• Tata Motors has made an entry into the list for thefirst time this year, while seven other Indian entities,




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