INDIA COUNTRY BRIEF 111108

Basic Political Developments

Trinamool Congress on Tuesday sought to down play the threat of pullout, saying the situation should not be seen as "us versus them".

Former Karnataka chief minister B S Yeddyurappa on Tuesday was granted bail by the Karnataka high court.

Concerned over embezzlement of funds meant for MNREGA, the Centre is planning to set up special courts across the country to expedite cases related to irregularities in the rural employment scheme.

Pro-Telangana leaders have dismissed the speculations over an autonomous regional council for the region.

Telangana Congress leaders on Monday decided to write a letter to party president Sonia Gandhi, Prime Minister Manmohan Singh urging them to initiate the process towards taking a decision on the separate state.

Prime Minister Manmohan Singh began a meeting with Trinamool Congress on Tuesday to heal a rift over a fuel price hike last week seen as crucial to shrink a widening budget deficit.

National Economic Trends Reserve Bank today said it does not intend to interfere with the exchange rate and its

monetary policy stance in the coming months would be determined by movement in inflation. "In exchange rate policy, Rupee is a floating currency. It remains that exchange rate is market determined and there is no intent to intervene with a particular exchange rate in mind," RBI Deputy Governor Subir Gokarn said.

The Finance Ministry today said it has started receiving banking and tax-related information from Switzerland following revision of a tax treaty, a development that will help India in combating the black money menace and bring back funds stashed abroad. "We are getting information from Switzerland...they will also provide information regarding tax-evasion cases," a senior Finance Ministry official said.

Business, Energy or Environmental regulations or discussions

India has requested Swiss government to provide details of Swiss firm Belvoir which allegedly made indirect investments in Swan Telecom under probe in 2G scam.

NTPC plans to seek bids in next two to three months for long-term supply of imported coal of up to 20 million tonnes per annum.

Soham Renewable Energy India Pvt Ltd announced on Monday that SBI Macquarie Infrastructure Fund has invested Rs 125 crore in the Bangalore-based company's renewable platforms.

RINL and power equipment manufacturer BHEL will soon sign an agreement to form a joint venture for putting up a high-end seamless tube mill at Vizag.

Activity in the Oil and Gas sector (including regulatory)

About 38 per cent or Rs 26.22 in petrol price of Rs 68.64 a litre in Delhi is because of central and state government taxes.

State-owned fuel retailers reported a net loss of over Rs 8,000 crore in July-September quarter and are borrowing heavily to even buy crude oil.

Petrol prices may fall by next week. RS Butola, the Chairman of Indian Oil Company (IOC), India's largest fuel retailer says that oil companies will cut petrol prices by November 16 as long as the global trend of falling gasoline prices continues.

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

Three policemen were injured when Maoists attacked their make-shift camp at Cone village in Latehar district of Jharkhand on Tuesday.

Tension gripped the Andhra Odisha Border (AOB) and the Agency areas of the district with intensified combing operations by the police and the Maoists gearing up to observe Lalgarh Agitation Day on November 13.

Police said six villages in Belthangady taluk form part of the Kudremukh National Park In all, “naxalites” are said to be active in 11 villages in the taluk.

Police said two hardcore Naxalites have been arrested by police from Bihar's east Champaran and Rohtas districts.

Labor/Social Unrest

Full Text

Basic Political Developments

Trinamool seeks to downplay threat of pullouthttp://www.rediff.com/news/report/trinamool-seeks-to-downplay-threat-of-pullout/20111108.htmAhead of the party's meeting with Prime Minister Manmohan Singh over the fuel price hike, Trinamool Congress on Tuesday sought to down play the threat of pullout, saying the situation should not be seen as "us versus them".

"I don't think there is a situation us versus them. That is not the way democracy runs," party leader and Railway Minister Dinesh Trivedi told mediapersons in New Delhi.

He said party chief Mamata Banerjee "was very very candid that this (the fuel hike) is just a concern which needs to be taken to the honourable Prime Minister's doorsteps and I have no doubt the honourable Prime Minister himself also would be equally concerned."

Trivedi said the entire idea is to talk and find a solution so that the common man is not burdened.

"I am absolutely certain given the Prime Minister's stature, given his commitment to the country at large... I don't think so we should unduly get excited about certain things because we are in a mature democracy," he said.

Party MPs led by senior leader Partho Chatterjee will meet the Prime Minister later on Tuesday after their threat of pull-out over the fuel price hike.

Trinamool Congress, with 18 members in the Lok Sabha, is the largest ally of the Congress-led United Progressive Alliance government at the Centre.

"After meeting the Prime Minister, they will return to Kolkata on November 9 and report to Mamata who will take the final call," a senior party leader had said on Monday.

Government plans special MNREGA courts to check corruption

http://economictimes.indiatimes.com/news/economy/policy/government-plans-special-mnrega-courts-to-check-corruption/articleshow/10656194.cms

NEW DELHI: Concerned over embezzlement of funds meant for MNREGA, the Centre is planning to set up special courts across the country to expedite cases related to irregularities in the rural employment scheme.

Rural Development Minister Jairam Ramesh today said the Centre would consult with the Supreme Court about setting up special MNREGA courts to punish those found guilty of misusing funds meant for the rural poor.

The move comes in the backdrop of reports that the UPA Government's ambitious rural job guarantee scheme is marred by corruption. Recently, Ramesh had written a hard-hitting letter to Uttar Pradesh Chief Minister Mayawati asking her to recommend a CBI probe against state officials for their alleged role into embezzlement of MNREGA funds.

The concept of MNREGA courts has already been put into use by Andhra Pradesh where they would function from January next year, the Minister said.

"Andhra Pradesh has passed an ordinance in August this year for setting up special courts in order to ensure that officials against whom action is taking as a result of social audit do not use the judiciary to delay the process," he said.

"I think it is a good initiative and it is worthwhile adopting this system in other states. We will consult the Supreme Court in the matter as well," Ramesh told reporters on the sidelines of a workshop on social audit in MGNREGA with state governments here.

According to the Andhra Pradesh Social Audit (Punishment of Corrupt Practices) Ordinance 2011, the corrupt persons and those indulging in irregularities would be noticed during the social audit of NREGS and the proposed law provides for arresting the accused.

The ordinance proposes to set up mobile courts to try the cases of corruption and punish the guilty at the earliest.

After 23 days in jail, Yeddyurappa gets bailhttp://www.rediff.com/news/report/after-23-days-in-jail-yeddyurappa-gets-bail/20111108.htmFormer chief minister B S Yeddyurappa was on Tuesday granted bail by the Karnataka high court. He has spent 23 days behind bars after being arrested over a land scam.

Justice B V Pinto granted the bail after hearing his bail plea, on the condition that the former CM furnishes a bond of Rs 10 lakh and a surety of the same amount.

Justice while dealing with the fears allayed by the complainant in this case stated that the chance of Yeddyurappa tampering with the evidence would not arise. This is mainly because all the evidence has been documented. This point had also been raised before the Lokayukta court.

The judge on that occasion had stated that if Yeddyurappa remains out then he would tamper with the evidence as he is a very powerful person.

The other aspect that went in Yeddyurappa's favour is the fact that Justice Pinto states that there are certain technical issues concerning this case. The sworn affidavits don't make an averment to the authenticity of the documents that have been produced in this case.

Yeddyurappa's legal team is now trying to prepare the paperwork by Tuesday evening to secure his release.

Yeddyurappa was arrested on October 15 after a Special Lokayukta court cancelled his bail and issued an arrest warrant against him. He was arrested over charges that he had denotified land while misusing his powers ass the CM, to help his family make financial gains.

Yeddyurappa may be released soon but his legal battles will continue. He is facing at least eight other cases, including one based on the charges made against him in the Lokayukta report on illegal mining. The report had forced Yeddyurappa to step down as the CM.

Yeddyurappa's legal team has already filed anticipatory bail pleas in all other cases against him.

Yeddyurappa's arrest had its dramatic moments. After surrendering to the court, he was taken to jail and then shifted to a hospital, after he complained of chest pain.

But he had to go back behind bars after the doctors pronounced him fit after a couple of days.

Pro-T leaders rules out regional councilhttp://timesofindia.indiatimes.com/city/hyderabad/Pro-T-leaders-rules-out-regional-council/articleshow/10650910.cmsHyderabad: Pro-Telangana leaders have dismissed the speculations over an autonomous regional council for the region, that have started doing the rounds, as yet another ploy to suppress the T-movement. They also pointed out that it was a tried and tested formula and said that nothing short of a separate Telangana state is acceptable to the four crore people of the region.

Sources said the regional council would not be the final but the first step towards finding a lasting solution to the Telangana tangle. While the proposal drew a howl of protests from T-protagonists, TRS MLA K Taraka Rama Rao questioned the rationale behind forming a separate Telangana Regional Council (TRC). "What would a toothless council do to assuage the feelings of the people? It's bound to be a failure," he said.

Pro-Telangana leaders have expressed doubts as to what might a nominated body do to convince the Centre on the larger aspirations of the people when the views of elected representatives from the region have not been taken into account. "The Centre is fooling the people yet again as the creation of a TRC was included in Act 7 of 1956 when Andhra Pradesh was formed on November 1, 1956," pointed out former TRS MP B Vinod Kumar.

In fact, two regional councils - one for AP and the other for the erstwhile greater Punjab - were included with adequate constitutional safeguards way back in the 60s. "So, the question of a new regional council for Telangana doesn't arise," reasoned Vinod. Apart from autonomous regional councils, special packages and safeguards for administrative purposes, too, were provided.

Much before Jharkhand was carved out of Bihar, a Jharkhand district autonomous council was constituted in 1994 with Shibhu Soren as chairman. "Allocations were made, funds granted and special administrative powers given. There was a separate budget for the hill districts of Uttar Pradesh with a hill districts council in place before a separate Uttarakhand was formed," said

Kakatiya University professor and Telangana political JAC Warangal district convenor T Papireddy.

Having come this far, pro-Telangana parties and organisations are unlikely to accept the regional council; and there is the threat of them intensifying their struggle for a separate Telangana. "The proposal to have three regional councils for three regions is nothing but belittling the separate T-movement," bemoaned TRS politburo member K Rajaiah Yadav.

They also ridiculed the sparring over the status of Hyderabad. "Shillong which was the capital of undivided Assam till 1972 was made capital of Meghalaya and Dispur became the new capital of Assam. The Seemandhra leaders' concerns over losing Hyderabad is ridiculous," said Vinod.

Meanwhile, Congress leaders from Telangana were tightlipped over the regional council speculations. The proposal has gained momentum with senior Congress leader D Srinivas tipped to become the first chairman of the council.

Telangana Congress leaders' missive to Sonia, PMhttp://timesofindia.indiatimes.com/city/hyderabad/T-Cong-leaders-missive-to-Sonia-PM/articleshow/10650913.cmssHYDERABAD: Telangana Congress leaders on Monday decided to write a letter to party president Sonia Gandhi, Prime Minister Manmohan Singh, Union home minister P Chidambaram and AICC general secretary Ghulam Nabi Azad urging them to initiate the process towards taking a decision on the separate state issue as assured by the leadership.

The leaders, who met at the residence of panchayat raj minister K Jana Reddy, urged the party high command not to delay the issue any further. Attended by MPs, K Keshava Rao, Gutta Sukhender Reddy, S Rajaiah, T Balram Naik, G Vivekananda, MLAs T Lingaiah, Ch Pratap Reddy, MLCs K R Amos, K Yadava Reddy, and senior leaders K Kamalakar Rao and M Sridhar Reddy, the meeting decided to wait for a week for the response after dashing off the letter.

If party high command fails to respond within a week's time, then the steering committee of the Telangana Congress will meet on November 13 to decide the further course of action. The leaders also appealed to their colleague Komatireddy Venkatareddy, who began an indefinite fast on November 1 for Telangana, to call off his fast in view of his fragile health condition. They said the party was in the thick of deliberations on the Telangana issue and that there was no need for him to continue with his fast. However, they are aware that Komatireddy is firm on continuing the fast.

Meanwhile, the Congress leaders are planning to contact Azad and urge him to speak to Reddy and appeal to him to call off the strike. AICC secretary and MLC P Sudhakar Redddy has already briefed the AICC general secretary Azad about the deteriorating health of Komatireddy.

During the day, many leaders including MLC D Srinivas, Keshava Rao, former speaker K R Suresh Reddy, Sudhakar Reddy, PCC president Botsa Satyanarayana , former minister Md Shabbir Ali and Jana Reddy met Komatireddy, who was shifted to Nims from Nalgonda on Sunday, and appealed to him to call off his fast.

" We have already informed the high command about the situation in the region. We are hopeful that the exercise going on in Delhi will lead to the settlement of the Telangana issue once for all," Srinivas, Botsa, KK and Jana Reddy told the media.

Prime Minister Manmohan Singh meets with allies over fuel price hikehttp://economictimes.indiatimes.com/news/politics/nation/prime-minister-manmohan-singh-meets-with-allies-over-fuel-price-hike/articleshow/10655866.cmsNEW DELHI: India Prime Minister Manmohan Singh began a meeting with the biggest ally in the federal coalition government on Tuesday to heal a rift over a fuel price hike last week seen as crucial to shrink a widening budget deficit.

Mamata Banerjee, whose Trinamool Congress party governs the eastern state of West Bengal, has threatened to pull out of Singh's United Progressive Alliance (UPA) last week unless he reversed a rise in gasoline prices.

There was no official word from the meeting yet, but most expect the allies to broker a compromise which could carry a hefty price tag for an already burdened exchequer.

Banerjee has demanded a 190 billion rupee ($3.9 billion) package for her heavily indebted state, according to Indian media reports. Party sources told Reuters on Tuesday that the exact details of a package were still being worked out.

"She wants to be populist, without thinking of the consequences," said D.H. Pai Panandiker, the head of the RPG Foundation, a New Delhi-based think tank.

"She wants all the goodies, and she does not want to accept that everything has a price, that nothing comes for free."

The package could include a "credible economic recovery programme" to beef up West Bengal's manufacturing industry and infrastructure, Dipak Dasgupta, the principal economic adviser to the ministry of finance, told Reuters.

Freeing up heavily subsidised fuel prices is viewed as a badly needed measure to help tame India's fiscal deficit, which swelled to nearly 71 percent of its full-year target in the first half of the year.

Rattled by street protests and facing major state elections next year, Congress party chief Sonia Gandhi may feel the need to shore up the government's centre-left credentials.

National Economic Trends

RBI not to intervene in foreign exchange market, says Deputy Governor Subir Gokarn

http://economictimes.indiatimes.com/news/economy/policy/rbi-not-to-intervene-in-foreign-exchange-market-says-deputy-governor-subir-gokarn/articleshow/10656149.cmsMUMBAI: Reserve Bank today said it does not intend to interfere with the exchange rate and its monetary policy stance in the coming months would be determined by movement in inflation.

"In exchange rate policy, Rupee is a floating currency. It remains that exchange rate is market determined and there is no intent to intervene with a particular exchange rate in mind," RBI Deputy Governor Subir Gokarn said here.

Gokaran said the Rupee, which is a partially convertible currency, has depreciated because of global conditions.

"...capital reallocation around the world has impacted many currencies, and we have stayed with our policy," he said.

The Rupee has depreciated against the US dollar by about 9 per cent this year.

The Rupee today weakened by 37 paise to trade at Rs 49.48 against the dollar as the US currency strengthened in the overseas markets.

On the possibility of halting the policy rate hike in its next policy review due on December 16, he said it would depend upon inflation rate.

"We gave the guidance two weeks ago (in mid-year monetary policy)...Unless there is something dramatic that happens to change it, that guidance remains. So let us say, the guidance remains the same until further notice at this stage," Gokarn said.

RBI had since March 2010 raised key rates 13 times with a view to calm down the inflation which was still hovering near the double-digit mark.

The Deputy Governor further said that RBI's projection on inflation has take into account international crude oil prices.

Since the time deregulation of petrol prices, "we assume that the pass through will be more or less full. The new element in this calculation (on inflation projection) is exchange rate movement".

On the rate of price rise, he said the structural drivers of inflation are still strong and the RBI expects it to remain high through October and November.

Headline inflation stood at 9.72 per cent in September. The government is yet to announce the inflation data for October.

India starts getting banking information from SwitzerlandPTI | 07:11 PM,Nov 08,2011

http://ibnlive.in.com/generalnewsfeed/news/india-starts-getting-banking-information-from-switzerland/891979.htmlNew Delhi, Nov 8 (PTI) The Finance Ministry today said it has started receiving banking and tax-related information from Switzerland following revision of a tax treaty, a development that will help India in combating the black money menace and bring back funds stashed abroad. "We are getting information from Switzerland...they will also provide information regarding tax-evasion cases," a senior Finance Ministry official said. India and Switzerland had signed a protocol in August last year seeking to revise the Double Tax Avoidance Agreement (DTAA). The European nation, the official said, has communicated to India that all legal requirements and procedures for giving affect to the protocol had been completed. Geneva has also communicated to New Delhi, "The protocol comes into affect from October 7, 2011 and now it would be possible for India to obtain banking information in special cases from Switzerland commencing from April 1, 2011". On a query whether Swiss authorities would provide more information on 700 bank accounts allegedly held by Indians in HSBC Bank, Geneva, Swiss Ambassador to India Philippe had said yesterday that his Government would respond to all legitimate requests by India. As per the treaty, both the governments are entitled to release data in cases which has been defined in the treaty, the Ambassador had said. Currently, the Indian government is looking into looking into details of Swiss bank accounts provided by French authorities. As per a Swiss National Bank data, Indians held Rs 9,295 crore in 2010 in banks of Switzerland. MORE

Business, Energy or Environmental regulations or discussions

CBI asks details of Swiss firm linked to Swan Telecomhttp://www.thehindu.com/news/national/article2609164.ece?homepage=trueAgainst the backdrop of allegations that some government officials had stakes in Etisalat DB Telecom, India has requested Swiss government to provide details of Swiss firm Belvoir which allegedly made indirect investments in Swan Telecom under probe in 2G scam.

In its Letters Rogatory sent to Swiss authorities, the special court hearing the 2G case has requested competent authorities in Switzerland to provide documents relating to incorporation along with Memorandum and Article of Association, details of Directors, shareholders and ultimate beneficiary owners of the company.

The LR has also sought details and documents in respect of the share class pertaining to the investment of $4 million by Mavi Investment Fund Limited Mauritius in Swan Telecom, which later became Etislat DB Telecom, through Delphi Investment.

It sought details of the bank accounts of BTS Belvoir Investment and also of any funds transferred by it to Mavi Investment during the period 2005-10.

It requested the Officer of Registrar of Companies to examine its own officers regarding nominee shareholders of BTS Belvoir since January 2007 till date and also examine Alastair Guggunbuhi, one of the Directors of the company besides providing the ‘Know Your Customer’ documents.

The LR also communicated to the Swiss authority that two group companies of BTS Belvoir Group were incorporated in Mumbai and alleged that Guggenbuhi was “personally linked to the investment of four million dollars by Delphi Investment in Swan Telecom and is also aware of its ultimate beneficiary owners.”

The LR said that during investigations it has come on record that at the time of incorporation, the sole founder share of Delphi Investment Limited, Mauritius was held by Conqueror Limited which transferred it to Mavi Investment on December 11, 2007.

According to the document, Delphi Investment Limited made a payment of four million dollars to Reliance Telecom Limited towards purchase of 10,791,000 equity shares of Swan Telecom Private Limited.

NTPC to invite bids for long-term coal imports in 2-3 monthshttp://economictimes.indiatimes.com/news/news-by-industry/energy/power/ntpc-to-invite-bids-for-long-term-coal-imports-in-2-3-months/articleshow/10653256.cmsNEW DELHI: To meet its rising fuel demand, country's largest power producer NTPC plans to seek bids in next two to three months for long-term supply of imported coal of up to 20 million tonnes per annum.

"We will seek bids for supply of imported coal for a period of 15-20 years. The amount will be up to 20 million tonnes per year," NTPC CMD Arup Roy Choudhury told reporters here today on the sidelines of a CII conference.

He said bids wills be invited in next two to three months.

According to Choudhury, NTPC needs to securities imported coal, which accounts for about 10 per cent of the company's total requirements.

Recently, severe coal shortages due to multiple factors had hurt power generation at various NTPC plants.

"As of now, our plants are generating the full (power) as demanded from us," he said.

Noting that imported coal would not be the solution for the country due to its cost, he said that domestic coal production needs to be increased.

"The main issue is whether the power we generate is affordable or not," he noted.

State-run NTPC has an installed capacity of over 35,000 MW.

SBI Macquarie invests Rs 125 crore in Soham Renewable Energy Indiahttp://economictimes.indiatimes.com/news/news-by-industry/energy/power/sbi-macquarie-invests-rs-125-crore-in-soham-renewable-energy-india/articleshow/10654861.cms

BANGALORE: Soham Renewable Energy India Pvt Ltd announced on Monday that SBI Macquarie Infrastructure Fund has invested Rs 125 crore in the Bangalore-based company's renewable platforms.

The investment, which is a part of a total commitment of Rs 375 crore for current and future projects, will also be utilised to acquire licenses along with partly-constructed and fully-commissioned projects, the company said in a statement.

"The investment will be utilised towards building up five projects of 67 MW which are in the pipeline. The rest, Rs 250 crore, will be towards growth through the inorganic route," Sanjith Shetty, chief financial officer, Soham Renewable Energy told ET.

SBI Macquarie's investment follows that of global investment and technology firm D.E. Shaw, which pumped $15 million in the company in 2008, the proceeds of which were utilised to fund its expansion plan over the next five years.

Debt is expected to be tied up from financial institutions such as State Bank of India, ICICI, Axis Bank, IDBI and Syndicate Bank, amongst others, some of which has already been sanctioned. The company hopes to complete the projects it has on hand, and go through with its acquisitions by 2014.

"We need about Rs 300 crore in debt, but we do not really see debt as an issue at the moment. Interest rates are high right now because of the the inflationary scenario, but we expect things to improve in the next year or two. The rates will cool down soon, and therefore, we are concentrating on building up at the moment," Shetty said.

The CFO also said the company was also considering enhancing its liquidity position through an initial public offering or through a trade sale within the next three to five years.

"We may look to list and give favourable exits to our investors, but that would depend on how many projects we have up and running," Shetty said.

India's energy sector continues to be a favourable investment destination for risk capital players, even as demand outpaces sluggish supply in one of the world's fastest growing economies.

In March 2010, a consortium of investors, led by Morgan Stanley Infrastructure Partners, purchased a 44% stake in power generation and engineering services firm Asian Genco for $425 million, the biggest private equity transaction in India in almost two years,

Separately, in March earlier in the year, General Electric's Energy Financial Services announced it plans of developing 500 mega watts of wind power in the country, with Greenko Group Plc - a London Stock Exchange's Alternative Investment Market-listed renewable energy company - at an estimated cost of $115 million.

India has stated its goal of adding 17 GW of renewable energy between 2012 and 2017, and 100 GW in total energy capacity over the same period.

Fortis India's $665 mn U-turn hard to justifyhttp://economictimes.indiatimes.com/news/news-by-industry/healthcare/biotech/healthcare/fortis-indias-665-mn-u-turn-hard-to-justify/articleshow/10655630.cmsMUMBAI: The brothers behind hospital operator Fortis India know a thing or two about selling family businesses. Back in 2008 they sold their stake in Ranbaxy, the pharmaceutical group their grandfather founded, in a $4.6 billion deal. But their latest move looks less shrewd. In a surprise U-turn, Fortis India has decided to acquire a Singapore-based sister firm -- currently owned by the brothers themselves. The market is unimpressed. Shares in Fortis have fallen over 12 percent since the deal was announced last month.

There are three reasons for investors to be jittery. One is that there is an obvious difference of interest between the brothers and minority shareholders. Malvinder and Shivinder Singh own 100 percent of the target, Fortis Healthcare International, and 80 percent of the buyer. That means they will effectively cut their exposure to the acquired group by a fifth -- while releasing $665 million of cash for themselves. The brothers haven't said what they plan to do with that extra liquidity.

True, the price of $665 million, backed by an independent valuation, looks fair. The implied enterprise value of 13 times next year's forecast EDITDA is below similar transactions in Asia that went for closer to 20 times. But that merely increases the worry that the brothers know something other investors don't.

Secondly, it's not entirely clear these companies belong together. Fortis has declined to put a number on the synergies. There may be some cost savings in procurement and back office operations, or some revenue gains if patients are more drawn to an international brand. But the drop in share price shows that investors don't place great value on those.

Finally, there is the strategic reversal. Fortis previously said it would focus on investing at home, and hasn't explained the change of tack. The Indian operation has EDITDA margins of 12.8 percent, higher than the 11 percent margins of the business being acquired. India's growth in healthcare is likely to outpace the mature markets like Australia and Hong Kong that come with the Singaporean sister company. Overall, minority shareholders would probably have got a better deal if the cash had been spent at home.

RINL, BHEL to set up seamless tube mill at Vizag for Rs 2K crorehttp://economictimes.indiatimes.com/news/news-by-industry/indl-goods-/-svs/engineering/rinl-bhel-to-set-up-seamless-tube-mill-at-vizag-for-rs-2k-crore/articleshow/10654384.cmsNEW DELHI: State-owned steel maker RINL and power equipment manufacturer BHEL will soon sign an agreement to form a joint venture for putting up a high-end seamless tube mill at Vizag, entailing over Rs 2,000 crore investment.

"The proposal has already been discussed in the Board and will be considered in the next meeting. Hopefully, the joint venture agreement will be shortly signed," Rashtriya Ispat Nigam Chairman and Managing Director A P Choudhary told media.

The shareholding pattern of the joint venture is yet to be finalised, he said, but added that since the mill would be located inside RINL's Vizag facility, RINL would have a majority stake in the venture.

"The mill will have four lakh tonnes per annum seamless tube installed production capacity. Total investment here will be over Rs 2,000 crore," Choudhary said.

High-end seamless tubes find application in the energy, oil & gas and water sectors among others. The RINL Chief said that Bharat Heavy Electricals will meet its need of seamless tubes from the mill.

"After meeting the requirements of the domestic market, we will also export tubes to destinations like the Middle East and others," he said.

The growing domestic market for seamless tubes has the potential to grow bigger with government's thrust on creating infrastructure.

Choudhary said that once the joint venture agreement is signed between the partners, the entity would start tendering for the plant and machinery. The tendering process is likely to start before the end of the current fiscal.

"It might take two to two-and-a-half years from the start of the tendering for the plant to be operational," he said.

RINL's lone facility at Vizag has three million tonnes per annum (mtpa) installed capacity. It is at an advanced stages of commissioning 3.3 mtpa additional capacity.

Activity in the Oil and Gas sector (including regulatory)

38% of new petrol price reflects central, state taxeshttp://economictimes.indiatimes.com/news/news-by-industry/energy/oil-gas/38-of-new-petrol-price-reflects-central-state-taxes/articleshow/10653596.cmsNEW DELHI: About 38 per cent or Rs 26.22 in petrol price of Rs 68.64 a litre in Delhi is because of central and state government taxes.

State-owned oil firms had last week hiked petrol price by Rs 1.80 a litre, the fifth increase this year as oil imports became costlier due to fall in rupee value.

The new rate is based on a basic price of petrol, without including any taxes, refining cost or margin, of Rs 41.38 per litre, oil company officials said.

The retail selling price is calculated by adding customs duty, central excise rates and VAT to the basic price which is nothing by the average of international oil rate.

On Rs 41.38 a litre base price, a customs duty of 2.5 per cent or Rs 1.04 per litre is levied.

Beyond this, the central government levies Rs 6.35 per litre basic cenvat duty, Rs 6 per litre special additional excise duty and Rs 2 per litre additional excise duty towards highway cess. The excise duty after including education cess at the rate of 3 per cent, totals up to Rs 14.78 per litre.

The central taxes do not increase when the base rate is raised because these are fixed rates.

However, VAT, which in Delhi is at 20 per cent, rises with every increase. Earlier, VAT on petrol was Rs 10.62 per litre, but after the hike, it totals to Rs 11.44 a litre.

In the case of diesel, the total taxes account for only Rs 7.66 of the retail price of Rs 41.29 in Delhi. The taxes include Rs 0.76 in customs duty, Rs 2.06 in excise duty and Rs 4.84 state VAT.

There is no central excise duty on diesel apart from the Rs 2 per litre cess for highway construction. Custom duty is 2.5 per cent.

Oil firms net loss at over Rs 8,000 cr in Q2http://economictimes.indiatimes.com/news/news-by-industry/energy/oil-gas/oil-firms-net-loss-at-over-rs-8000-cr-in-q2/articleshow/10654976.cmsNEW DELHI: State-owned fuel retailers, which last week raised petrol price by Rs 1.80 per litre, reported a net loss of over Rs 8,000 crore in July-September quarter and are borrowing heavily to even buy crude oil.

Hindustan Petroleum ( HPCL) last week posted a net loss of Rs 3,364.48 crore in the second quarter while Bharat Petroleum (BPCL) reported a net loss of Rs 3,229.27 crore.

Indian Oil ( IOC), the nation's largest fuel retailer, will declare quarterly results tomorrow and analyst estimate a net loss in the range of Rs 1,650 crore to Rs 5,000 crore.

The losses reported in the quarterly earnings are primarily because they lose Rs 333 crore per day on selling diesel, kerosene and domestic LPG at rates which are way below cost of production.

On top of these, they had accumulated a loss of Rs 2,468 crore on selling petrol, a commodity which was decontrolled or freed from government control in June last year. Mounting losses due to rupee dipping below Rs 49 to a dollar from Rs 45-46 earlier this fiscal, led to the fifth hike in petrol price this fiscal.

The losses on fuel sales mean the companies did not generate enough cash to buy crude oil (raw material for making fuel). The shortfall is being met through borrowings, which currently stand at a unprecedented Rs 119,282 crore and equals a fourth of India's borrowing target of Rs 4.7 lakh crore for 2011-12 fiscal.

Oil Minister S Jaipal Reddy had last week stated that under-recovery (revenue loss) on diesel, LPG and kerosene will total to a whopping Rs 132,000 crore for the full fiscal and unless these are made good, the retailers would be bankrupt.

The government till last year met at least half of these by way of cash subsidy and another one-third came from oil and gas producers like ONGC.

ONGC, which reported a net profit of Rs 8,642.23 in the second quarter, has already protested against government move to raise its share of subsidy saying its Rs 170,000 crore investment target for the 12th Five Year Plan period (2012-17) would be jeopardised.

Worldover, oil and gas explorers fund their exploration and production expenses from internal resources as banks are unwilling to fund the risky business. Also, cost of oil field services goes up proportionately with rise in crude oil prices.

For the current fiscal, the finance ministry has so far provided only a letter promising to give Rs 15,000 crore to partly compensate Rs Rs 43,526 crore loss retailers incurred in Q1. For the second quarter, when the retailers reported a revenue loss of Rs 21,374 crore, the finance ministry has not yet given any such assurance.

Petrol prices could be reduced by November 16Shweta Rajpal Kohli, Updated: November 08, 2011 19:34 IST http://www.ndtv.com/article/india/petrol-prices-could-be-reduced-by-november-16-147987 New Delhi: Petrol prices may fall by next week. RS Butola, the Chairman of Indian Oil Company (IOC), India's largest fuel retailer says that oil companies will cut petrol prices by November 16 as long as the global trend of falling gasoline prices continues.

In an exclusive interview to NDTV, Mr Butola says that oil companies are committed to passing on any benefit from lower prices to consumers, even though oil marketing companies have already incurred a loss of around Rs. 2,500 crore on the sale of petrol this year.

The IOC chairman said global gasoline prices were down from $125 to $115 per barrel and there wasn't much volatility in rupee anymore.

The announcement could be exactly what the government needs.

The decision to increase petrol prices by Rs. 1.82 a litre last week provoked a confrontation with Mamata Banerjee, who is the biggest partner in the union government after the Congress. Ms Banerjee said her party was not consulted before the price hike. Her MPs met with the Prime Minister this evening to demand better coordination within the UPA. They say the Prime Minister saw their point of view. (Read: Meeting with PM was good say Mamata's MPs)

Ahead of that meeting, Ms Banerjee had said that while she did not want to threaten or blackmail the government, the possibility of her pulling out of the government - or forcing her ministers to resign - was real. The crisis, however, seems to have been averted. That's partly because Ms Banerjee who is the Chief Minister of West Bengal, is desperately seeking funding from the centre for her state which is in a deep financial crisis

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

Three policemen injured in Maoist encounter in Jharkhandhttp://www.rediff.com/news/report/three-policemen-injured-in-maoist-encounter-in-jharkhand/20111108.htmThree policemen were injured when Maoists attacked their make-shift camp at Cone village in Latehar district of Jharkhand in the wee hours on Tuesday.

The ultras attacked the camp of the security men past midnight triggering an encounter which continued till 4 am, Superintendent of Police D B Sharma told reporters in Latehar.

Three policemen suffered injuries in the attack, while some Maoists were believed to have suffered bullet wounds in the encounter, he said.

More than thousand bullets were exchanged between the two sides, he said.

Maoists plan counteroffensive operation http://ibnlive.in.com/news/maoists-plan-counteroffensive-operation/200344-60-114.htmlExpress News Service , The New Indian ExpressVISAKHAPATNAM: Tension gripped the AndhraOdisha Border (AOB) and the Agency areas of the district with intensified combing operations by the police and the Maoists gearing up to observe Lalgarh Agitation Day on November 13.For the past few days members of the Galikonda Area Committee of the banned CPI (Maoist) have been pasting posters at Chintapalle, GK Veedhi and few other parts of the district and have called upon tribal people to observe Lalgarh Agitation Day and fight against the proposed bauxite, laterite and china clay mining in the Agency areas on the lines of the Lalgarh agitation in West Bengal.However, the people of Chintapalle, GK Veedhi and a few other areas have been living in fear for the past few days. Police forces (Greyhounds and Special Party Teams) are combing the Maoist strongholds on the suspicion that Maoist leaders from Chhattisgarh and Odisha are holding meetings on launching a Tactical Counter Offensive Campaign (TCOC) against security forces to consolidate their stranglehold on AOB.Speaking to Express, G Srinivas, SP, said that they would continue the combing operations for some more weeks as the Maoists were planning a major offensive in the AOB areas.According to sources, Maoists went hitech during Martyr's Week this year and showed tribal villagers video clippings of 'heroic' deeds of their cadre who lost their lives fighting the police. The Maoists are desperate to garner the support of tribals, a majority of whom are not keen on joining the extremist movement.After a lull, Maoists struck terror and gunned down a forest ranger of AP Forest Development Corporation (APFDC) at Lankapakalu in GK Veedhi mandal a few weeks ago. Recently, they have held `praja courts' at various places in the Agency areas against the proposed bauxite mining and demanding distribution of APFDC's coffee plantations to the tribal people. In preparation for People's Liberation Guerrilla Army (PLGA) Week from Dec 2 to 8, the Maoists met in the AOB areas a few days ago. On a tipoff that some Maoist top guns attended the meet, police have intensified combing of the forest areas.

Three groups are active in the region: police http://www.thehindu.com/news/cities/Mangalore/article2608773.eceSix villages in Belthangady taluk, including Naravi where a police constable died during an encounter on October 8, form part of the Kudremukh National Park In all, “naxalites” are said to be active in 11 villages in the taluk.

Dakshina Kannada'a link to “naxalites” first came to the fore on December 25, 2006 when Naravi Dinakar was killed in Kermadi near Kigga in Shimoga district. Dinakar was a resident of Kotyanadka in Belthangady taluk in Dakshina Kannada. Vasanth, who also hails from Kotyanadka, was killed in an encounter in Moodlupady near Hebri in Karkala taluk on February 28, 2011.

Incidentally, these two “naxalites” are related to Sundari, who is among the 20 people that the police are looking for. While Sundari was married to Dinakar, she was the younger sister of Vasanth. Sundari is among the three “naxalities” mentioned in the first information report related to October 8 encounter in which constable Mahadeva S. Mane was killed.

That the naxalites have a presence in the district was emphasised when pamphlets issued by the Communist Party of India (Maoist) asking people to boycott elections were found in some villages near Venoor in Belthangady taluk in April 2009.

Barring these, no other incidents had been reported. According to Superintendent of Police Labhu Ram, there are about three “naxalite” groups that are active in Dakshina Kannada. The district police and the Anti Naxal Force (ANF) personnel have been regularly conducting combing operations.

Mr. Ram says the police have been keeping track of movement of the “naxalite” groups and also conducting public contact programme in the “naxalite” affected areas.

Deputy Inspector-General of Police and the ANF Commander Alok Kumar says the State Government is taking steps to streamline the working of the ANF. Mr. Kumar, who has just returned after an eight-week course in Strategic Management at the Cambridge University, U.K., says work is on to develop an exclusive force for the naxal operations.

At present, the ANF, which comprises personnel from the erstwhile Special Task Force involved in Anti Veerappan operations and the Karnataka State Reserve Police personnel, work with the force for about three months.

Two hardcore naxalites arrestedhttp://www.indianexpress.com/news/two-hardcore-naxalites-arrested/872657/Share | Larger | SmallerAgencies Two hardcore Naxalites have been arrested by police from Bihar's east Champaran and Rohtas districts, police said on Tuesday.

Acting on a tip-off, police raided a place at Ujirpur village in east Champaran district yesterday and arrested Santosh Kumar, wanted in connection with several operations carried out by the Maoists, the police said.

Another naxalite identified as Dularchand Yadav was arrested from Rohtas district yesterday, they said.

Yadav was an accused in the murder of the Bikramganj DSP Akhileshwar Prasad in 2007.

Labor/Social Unrest