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DECEMBER 2011
Hike in MSP of Wheat Proposed by
Agriculture Minstry
The Agriculture Ministry on 20 October 2011 proposed a hike of
Rs 115 per quintal in the minimum support price (MSP) of wheat
to Rs 1285 per quintal to cover rising farm input cost and
encourage farmers to increase acreage. The Ministry circulated
a CCEA note among various ministries recommending Rs 1285
per quintal as MSP for wheat for the 2012-13 marketing year
begining 1 April 2012.
Wheat’s support price for 2011-12 was Rs 1170 per quintal,
including a bonus of Rs 50 per quintal.
The government announced the support price for more than 20
crops just before the sowing season. The government buys wheat
and paddy from farmers at the MSP to ensure assured returns to
growers. The MSP also acts as benchmark price for the market.
The Ministry recommended a significant hike in wheat MSP in
view of rising input cost of labour, electricity, diesel and fertilisers.
Since the UPA government came into power in 2004, the MSP of
wheat has been raised from Rs 630 per quintal to Rs 1170 per
quintal.
Country’s wheat production touched an all-time of 85.93 million
tonnes in the 2010-11 crop year. According to experts, higher
support price played a big role in the record wheat output.
Centre Approves 21 New Textiles Parks
Union Ministry of Commerce, Industry and Textiles sanctioned
21 new Textiles Parks under the Scheme for Integrated Textiles
Parks with a project cost of 2100 crores rupees to be implemented
over a period of 36 months. The approval came in the 4th week of
October 2011. Among these 21 new Textiles Parks, 6 were
sanctioned in Maharashtra, 4 in Rajasthan, 2 each in Tamil Nadu
and Andhra Pradesh, 1 each in Uttar Pradesh, Gujarat, Tripura,
Himachal Pradesh, Karnataka, Jammu & Kashmir and West
Bengal.
Minister for Commerce, Industry and Textiles Anand Sharma as
Chairman of the Project Approval Committee under the Scheme
accorded approval. Earlier, Inter Ministerial Project Scrutiny
Committee which examined 55 proposals for new Textiles Parks
in the country gave its recommendations for the setting-up new
textiles parks. Proposals received were scrutinised by an inter
ministerial Project Scrutiny Committee on the basis of project
cost, land size, net worth of investors, employment generation
and value chain to be developed by the industry. Government
also sought to ensure balanced regional development, promote
textiles industry in North Eastern States and in States where the
industry is in a nascent stage of development and promote textiles
parks in cooperative & handloom sectors. Government received
a huge response to the roadshows held at Chennai, Bangalore,
Hyderabad, Ahmedabad and Mumbai for seeking proposals for
Textiles Parks under the Scheme for Integrated Textiles Parks
for development of common infrastructure and the Technology
Upgradation Funds Scheme (TUFS).
Government enhanced the allocation under TUFS from Rs. 8000
crores to 15404 crores rupees under the 11th Five Year Plan. The
new Textiles Parks would leverage an investment of over 9000
crores rupees and provide employment to 4 lac textiles workers.
Government would finance common infrastructure with a subsidy
upto Rs. 40 crores per Textiles park.
Considerable demand for Textiles Parks in India and given the
success of the Scheme in the 11th Five Year Plan, Textiles Ministry
would be seeking a higher allocation under the 12th Five Year
Plan. Of the 40 textiles parks sanctioned under the 11th Five Year
Plan, 24 Textiles Parks have started operations and have attracted
investments of 18880 crores rupees, with a Government subsidy
of 1420 crores rupees.
About Textiles Parks
The product mix in these parks would include apparels and
garments parks, hosiery parks, silk parks, processing parks,
technical textiles including medical textiles, carpet parks,
powerloom parks. The focus of Government has been to ensure
value addition through aggregation to best utilize India’s raw
material surplus in cotton and cotton yarn for enhanced labor
employment and export earnings. The Scheme for Integrated
Textiles Parks seeks green field investments in textiles sector on
a public private partnership basis with the objective of setting
up world class infrastructure for Textiles industry.
GVK Airport Holdings Acquired
108000000 Equity Shares Worth Rs10
Each in MIAL
GVK Airport Holdings Private Limited, a subsidiary of GVK Power
& Infrastructure Limited (GVKPIL) on 18 October 2011 acquired
108000000 equity shares worth Rs10 each (amounting to a 13.5%
equity stake) in Mumbai International Airport Pvt Ltd (MIAL).
The stakes were acquired from Bid Services Division (Mauritius)
Limited for a sum of US$231 million.
GVK bought the stake for $231 million (Rs 1,140 crore), valuing
MIAL at around Rs 8500 crore. After the acquisition, GVK’s stake
in MIAL stood at 50.5 per cent. While the Airports Authority of
India owns 26 per centin MIAL, Bid Services Division (Mauritius)
and the Airports Company of South Africa hold 13.5 and 10 per
cent, respectively.
The acquisition is the second-biggest by the GVK group to
consolidate its position in the airport business. In August 2011
the group had increased its stake in Bangalore International
Airport Ltd (BIAL) to 43 per cent, by acquiring 14 per cent stake
from Siemens for Rs 614 crore. The deal valued BIAL at Rs 4300
crore.
About MIAL
MIAL is executing an airport modernisation project worth Rs
9800 crore. The construction of the integrated passenger terminal
is underway and will be complete in mid-2013. In the first quarter
of 2011-12, MIAL made a net profit of Rs 57.8 crore, against Rs
40.1 crore in the same period in 2010. The airport handled 29
million passengers last year and sees around 700 flight movements
daily.
Airtel Launched Race Pack for F1 Fans
Bharti Airtel on 12 October 2011 announced the launch of its
special Formula One Race Pack for F1 fans in Bangalore. Bharti
Airtel is a leading global telecommunications company with
operations in 19 countries across Asia and Africa.
Bharti Airtel which is the title sponsor for the 2011 Formula One
Airtel Grand Prix of India introduced this pack as a prelude to the
forthcoming Grand Prix slated to be held in Greater Noida (Uttar
Pradesh) on 30 October 2011.
Any new Airtel pre-paid customer in Bangalore would receive a
30 days trial offer on F1 value-added services like watching free
Formula One race clips on mobile TV and playing exciting racing
games.
Local Airtel calls are priced at 30 paise per minute and the pack
would be valid for 60 days from the date of activation. Airtel prepaid
mobile customers subscribing to the pack would also get a
chance to win A-Ticket, an ultimate F1 experience for two. The
pack would also be inclusive of air travel and five-star hotel stay
to the Grand Prix on 28 October 2011.
Overnite Express Launched "Overnite
Priority" Service
Overnite Express launched a new premium service, Overnite
Priority on 17 October 2011 with an assured next business-day
delivery feature besides a money back guarantee attached to it.
The new service was launched in response to the market’s desire
for such an assured service platform. The latest service offering
is being considered to be a significant step in the direction of
customer satisfaction and innovation-leadership.
Overnite Express put in place a team of dedicated trained
executives who would be specially looking after this service
segment and would be tracking the movement of consignment
from receiving till final delivery. The client would be apprised of
the delivery by an SMS.
Overnite, over the years evolved from being a basic courier
service provider delivering documents and parcels to an
integrated door-to-door time-bound service provider. The express
delivery service (EDS) industry was valued at Rs.10,000 crore
and was growing at around 25 per cent annually.
Policy for Acquisition of Raw Material
Assets abroad by CPSEs
The Cabinet on 13 th October approved the policy for acquisition
of raw material assets abroad by Central Public Sector Enterprises
(CPSEs).
The main features of the policy are as under:
• The following will be applicable to CPSEs in Agriculture,
Mining, Manufacturing and Electricity sectors having
a three year record of making net profits.
• CPSEs will examine proposals, undertake due diligence
and obtain approval of Board of Directors in a
transparent manner.
• Powers delegated to the boards of Maharatna and
Navratna proposed will be enhanced and enhanced
powers available only for acquisition of raw material
assets abroad.
• Coordinating Committee of Secretaries (CCoS) headed
by the Cabinet Secretary proposed to be constituted.
Proposals (i) where the administrative Ministry/CPSE
requests for a coordinated view and (ii) involve
Government funds to be put up before the CCoS.
• CCoS will facilitate quick and coordinated decision
making, coordinate grant of concessional credit to
foreign enterprise/Government, recommend
Government funding and decide about the nature of
the Government funding on case to case basis. The
CCoS to be serviced by the Department of Public
Enterprises (DPE).
• CPSE/Ministry will submit proposals to the DPE which
will convene a meeting of the CCoS. The CPSE/Ministry
to nominate a nodal officer. Recommendations of CCoS
will be placed before CCEA by the DPE.
• Existing Empowered Committee of Secretaries (ECS)
mechanisms shall continue to function. Ministries
presently not having ECS proposed will be authorized
to have an appropriate ECS mechanism.
• The Ministry of External Affairs and its Missions
abroad will be associated right from the beginning of
the process.
• The Government to, in due course, will consider
constituting a dedicated, Sovereign Wealth Fund.
The approval of the policy for acquisition of raw material assets
abroad by CPSEs is expected to significantly enhance the
capabilities of CPSEs to acquire raw material assets abroad and
thus protect long term economic interests of the country.
Background
The availability of adequate quantities of raw materials is a prerequisite
not only for the growth of the manufacturing sector in
particular and the economy as a whole, but also from a strategic
perspective. Some countries have already taken the lead in
acquiring sources of raw material assets globally. The acquisition
of raw material abroad will also help in improving the energy
security of the country. The matter requires a timely response
before global raw material assets are no longer available, or are
available at exorbitant prices.
It was, therefore, decided that in the long term interests of the
country, a policy statement in clear terms needed to be
pronounced to convey to all concerned the commitment of the
Government to take all necessary measures towards acquisition
of raw material assets abroad by CPSEs.
This policy emanates from the recommendations of
National Manufacturing Competitive Council and wide interministerial
consultations.
IVRCL Bag Orders Worth Rs 5.52 Bn
Infrastructure firm IVRCL Limited’s buildings, transportation and
water divisions bagged orders worth Rs 5.52 billion.
The building division won orders worth INR 418.51 crore, which
include construction of low cost housing for urban poor in Delhi,
civil and structural steel works at Bhilai steel plant in Chhattisgarh
and infrastructure for a reserve battalion Central Industrial
Security Force in Tamil Nadu.
The transportation division won orders for widening to 2-lane
and improvement in km 0.00 to km 45.535 of Govindapalli- Salimimahupadar
road awarded by Chief Engineer, Orissa. The water
division bagged INR 59.31 crore for the Muzaffarpur water supply
project in Bihar.
ICAR and CIMMYT Sign MoU to
set up Borlaug Institute for South Asia
Indian Council of Agricultural Research (ICAR) and International
Maize and Wheat Improvement Centre (CIMMYT) signed MoU
to set up Borlaug Institute for South Asia. The Institutes will be
established at Ludhiana in Punjab, Pusa in Bihar and Jabalpur in
M.P.
The Minister of Agriculture and Food Processing Industries Shri
Sharad Pawar said that the establishment of Borlaug Institute for
South Asia in India will enable to harness the best of international
science in meeting food security challenges and will become an
agricultural hub for the South Asia region.
Shri Pawar said, “Ludhiana in Punjab is located in the agroecological
zone which can be safely called the “wheat bowl” of
India. This region had been at the forefront of Green Revolution
and has been the region of high productivity. However, the region
is facing problems of high ground water withdrawal and the
consequent water scarcity, and climate change effects such as
terminal heat. Agricultural productivity in the region has hit a
plateau. The Center of Borlaug Institute at Ludhaina will have to
concentrate on these issues and introduce newer verities that
will be high yielding, more water and nutrient-efficient, terminal
heat-resistant and, therefore, will produce more with fewer
inputs.”
About Borlaug Institute at Pusa in Bihar Shri Pawar said, this
center can concentrate on the research priorities of Eastern India
and Maize-based agricultural systems should be the focus of
research at this center. He said, Jabalpur in Madhya Pradesh is
another strategically located agro-ecological zone of Central India
from where substantial productivity gains in agriculture,
particularly wheat and maize can come. This is also the region
with substantial Kharif and Rabi fallows which can be put to
cropping with judicious combination of crop, cropping system
machinery and inputs, Shri Pawar added.
The Institute will create state of the art research facilities to
support the maize and wheat R&D and broaden the range of
varieties and tools available to farmers. It will also strengthen
local crop breeding programmes to meet food production
challenges.
Proposal to Bring India Infrastructure
Finance Company Ltd. Approved
The Union Cabinet approved the proposals to bring India
Infrastructure Finance Company Ltd. (IIFCL) under regulatory
oversight of Reserve Bank of India, to enhance its professional
capability and to increase its capital base.
The details are as follows:
1. IIFCL to be brought under the regulatory oversight of
RBI by registering it as an Non-Banking Finance
Company– Infrastructure Finance Company ( NBFC-
IFC).
2. To increase the authorized capital of IIFCL from Rs.2000
crore to Rs.5000 crore with a proviso that it may be
further increased to Rs.8000 crore with the approval of
the Finance Minister.
3. To broad base the Board of IIFCL.
4. Once IIFCL is brought under regulatory oversight of
RBI, to dispense with the Oversight Committee.
5. To modify the Scheme for Financing Viable Information
Projects (SIFTI).
Bringing IIFCL under the Regulatory Oversight of RBI with clearly
defined prudential norms would be financially prudent and would
safeguard the long term sustainability of the institution. Increase
in the authorized capital would enable IIFCL to expand its financial
assistance to the infrastructure sector and meet the needs of
increased CRAR. Inclusion of members with expertise in
accounting and audit, risk management infrastructure financing
etc. would strengthen its management and professional
capabilities.
Background
The performance of IIFCL was reviewed by the Economic
Advisory Council to the Prime Minister (EAC to PM) and it has
made, the following recommendations:a)
Considering the systemic significance of IIFCL and its
linkages with other financial intermediaries, it is
important that it be placed under the regulatory
oversight of the RBI as a Financial Institution like
NABARD/SIDBI/EXIM Bank/NHB.
b) The IIFCL Board should be broad based and
professionals from the field of accounting and audit,
infrastructure finance, risk management etc. need to be
inducted in it. The membership should be increased to
14-16, in line with the practice followed for NABARD/
SIDBI etc.
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