Business News (52)
Banks may cut retail lending rates. This is thanks to the Reserve Bank of India cutting a key reserve ratio. The RBI, on Tuesday, surprisingly cut the statutory liquidity ratio (SLR), which requires banks to park a slice of their deposits in Central and State government securities, from 24 per cent to 23 per cent.
The SLR cut can enhance liquidity in the system by about Rs 62,000 crore. This has to be seen in the context of deposit growth lagging credit expansion and the need for creating capacity among banks to handle possible liquidity pressures.
Banks are unlikely to cut short-term deposits rates due to competition from liquid schemes of mutual funds, but they could revisit the long-term deposit rates in view of the SLR cut. The central bank, however, left key policy rates, repo rate (the interest rate at which banks borrow funds from RBI) and reverse repo rate (the interest rate at which banks park surplus funds with RBI) unchanged at 8 per cent and 7 per cent, respectively.
The RBI Governor, Dr D. Subbarao, reasoned that the SLR cut will not only help banks channel credit to productive sectors of economy but also get rid of high-cost bulk deposits. A CRR cut, on the other hand, has an across-the-board impact and would have meant infusing surplus liquidity beyond what is required.
Despite the clamour for a cut in policy rates from industry and banks to promote investment and growth, the RBI did not oblige as the primary focus of monetary policy remains inflation control. The RBI has raised the inflation projection for FY13 from 6.5 per cent, as set out in the April monetary policy statement, to 7 per cent.
The SBI Chairman, Mr Pratip Chaudhuri, observed that resources unlocked on account of the SLR cut would largely go to the retail sector as large term-loan proposals are few across banks and working capital demand from good corporates is already low.
“Hence, for a bank like ours, the option is to accelerate retail credit growth. There could be greater competition in retail and this can be backed by a rate cut…So there could be a reduction in retail lending rates,” Mr Chaudhuri added.
Bhubaneswar Municipal Corporation (BMC) has decided to bring 21 Gram Panchayat Offices (GPOs) and two revenue villages under its jurisdiction to enable the capital city get a metropolitan status.
In a major decision at the BMC meeting on Monday, it was decided that the GPOs on the outskirts of Bhubaneswar would be included under BMC’s jurisdiction for reaching a population beyond 10 lakh. This would thus enable Bhubaneswar get the metropolitan status.
“If we manage to get a metropolitan status, it would help us in getting Central grants, which we don’t get now,” BMC Commissioner Vishal K Dev said.
The two revenue villages proposed to be included in the Capital are Daruthenga and Mendhasala. The GPOs proposed to be included for the metro plan are Shishupal, Raghunathpur, Dhauli, Madanpur, Kalyanpur and Chandaka.
A proposal was also made at the meeting to adopt mobile tracking system for disposing of garbage across the city.
In a bid to make garbage disposal system efficient, online monitoring would be put in place. There would be strict vigilance on sanitation workers for timely collection and disposal of garbage.
“On the eve of Local Self-Governance Day on August 31, instructions have been issued to make the City garbage-free. Cleanliness and sanitation of the City will be the top priority of the corporation,” BMC Mayor Ananta Narayan Jena said.
There have been numerous complaints about the location of the BMC office. “The present office, situated on the outskirts of the City, makes it difficult for the people to visit the office. In view of this problem, we have decided to open five zonal offices,” Dev said.
The five zonal offices will be located at Kapileshwar, Rental Colony, Unit-8, Laxmisagar and Kalyan Mandap (temporary) in Chandrasekharpur.
“These zonal offices will have adequate staff support” Dev added.
There was also a proposal to tackle dengue and malaria menace in the City. “BMC, along with Health Department, will be taking steps to check mosquito menace in the City,” Jena said.
It was also decided that the BMC will construct four new community centres and one Kalyan Mandap in the City.
The first round allotment for the MBA and MCA colleges of the State under the Odisha Joint Entrance Examination (OJEE) was a poor show.
There are around 3,000 seats for the MCA colleges in the state and around 3,500 for the MBA colleges. But the seat allotment in the first round for the MBA colleges stood at 1,700. Similarly, the seat allotment for the MCA colleges was around 1,200.
“The students are shifting to other states when it comes to these courses. No one wants to spend a fortune on these courses and compromise on the quality of education they get,” said an OJEE official.
This lack of interest on the part of the students shows the quality of education imparted by the MBA and MCA colleges in the State. The final round allotment is yet to be declared and there is still an option for withdrawal left for the students. So the numbers may dip further by the time the final allotment is made. The OJEE officials were looking forward to complete the allotment of the final engineering seats, but the impending court cases have put off the final date. The final allotment was supposed to be declared on July 30, but it has now been postponed to August 4.
There have been around 1,800 withdrawals after the first allotment, showing the general shift in the student’s faith in the technical education in the State. The OJEE officials have asked the students to take admission only after the final allotment has been made so that the seat positioning is clear and students will have no confusion about which college to join.
The State Government, which is finalising its first ever parking policy for urban centres, is contemplating to tax multiple vehicle ownership as part of a host of enforcement and interventions it has planned.
As the number of vehicles has witnessed a sharp rise in the last one decade after the urban planning has failed to cope with the growth, the policy looks at arresting the trend. It proposes to raise registration rates for multiple car ownership.
The policy, which says that raising rates for owning subsequent cars could act as a deterrent, also recommends treating driving offences with greater severity.
The policy looks at entrusting greater responsibility with local police for enforcing parking regulations. Adequate number of police personnel will be deputed for surveillance and enforcement of parking regulations in each zone. Making available tow truck to facilitate eviction of offending vehicles will also be the job of the police.
While tow trucks are proposed to be requisitioned from private enterprises, operating expenses are to be recovered through penal fees collected from violators. It will be the responsibility of the police and the ULB to train and employ persons as parking wardens, who will monitor the space usage on behalf of the police. The wardens will be instructed to issue parking violation notices and record reason, time and location so that notices can be sent and action taken.
The use of automated systems would be encouraged for the enforcement agency to identify wrongly parked vehicles and impose penalty. The policy also mandates the ULBs for preparing city level planning by consulting local development authority, police, transport, railways and national highway authorities.
A major highlight of the policy is the restriction on parking along roads. The document stipulates that on-street parking will not be permitted at locations on primary and secondary road network where carriageway width is 7 metres and less. Similarly, street parking would not be allowed on roads where volume-capacity is low and speed limit is less than 15 km per hour.
As per the policy, bus routes would be declared as no-parking zones to ensure better operational conditions for buses. Currently, cars park right in front of the bus stops forcing them to stop in the middle lane and holding up the traffic on other lanes. Declaring these routes as parking free zone will clear the flow of traffic, it says.
Effort will be made to develop park and ride facilities at all public transport interchanges in the city.
The government has stopped short of declaring a drought but rolled out a relief package which includes subsidised diesel for irrigation, funds to ensure drinking water, seed subsidy for resowing crops and augmentation of fodder supply.
"The number of rain-deficient districts this year is more than in 2009," said agriculture minister Sharad Pawarafter chairing a meeting of the Empowered Group of Ministers (EGoM) on drought. The meteorological department will update its forecast for August and September later this week.
Pawar is slated to individually meet chief ministers of six states - Rajasthan, Gujarat, Maharashtra, Punjab, Haryana and Karnataka -- this week to asses the situation. The EGoM is slated to meet again after this ground level assessment. He said that 64% of the total areas comes under deficient or scanty rainfall this year.
"Out of 627 districts, 306 received deficient rainfall while 94 districts received scanty rains. Normal and excess rains have been reported in 169 and 55 districts, respectively. We have shared detailed contingency plans with states for 320 districts," he said.
He said that the government has decided to release 1,440 crore for Karnataka, Maharashtra, Rajasthan and Gujarat under integrated watershed management programme and another 453 crore to Karnataka, Maharashtra, Rajasthan and Haryana under the National Rural Drinking Water Programme.
Apart form that, the centre has also allocated 38 crore as interim assistance for states facing drinking water problems like Maharashtra, Karnataka and Rajasthan. However, no immediate relief measures were announced for Gujarat, which has received less than 30% rains.
"So far, no state has declared a drought. Whatever feedback and report we get from states, we are ready to provide them with assistance accordingly," he said.
Meanwhile, Forward Markets Commission (FMC) has imposed special margins to curb price volatility in Potato, Soya bean, Soya meal and Turmeric contracts. It has also decided that no fresh positions will be permitted in the Potato contracts during the staggered delivery period of 15 days.
The RBI on Tuesday said rainfall deficit of 21% is likely to hit production of kharif crops, mainly coarse cereals and pulses, and could put pressure on prices of these commodities.Headline inflation persisted above 7% during the first quarter of the fiscal due to a rebound in food rates as well as high fuel prices.
The government has stopped short of declaring a drought but rolled out a relief package which includes subsidised diesel for irrigation, funds to ensure drinking water, seed subsidy for resowing crops and augmentation of fodder supply.
"The number of rain-deficient districts this year is more than in 2009," said agriculture minister Sharad Pawarafter chairing a meeting of the Empowered Group of Ministers (EGoM) on drought. The meteorological department will update its forecast for August and September later this week.
Pawar is slated to individually meet chief ministers of six states - Rajasthan, Gujarat, Maharashtra, Punjab, Haryana and Karnataka -- this week to asses the situation. The EGoM is slated to meet again after this ground level assessment. He said that 64% of the total areas comes under deficient or scanty rainfall this year.
"Out of 627 districts, 306 received deficient rainfall while 94 districts received scanty rains. Normal and excess rains have been reported in 169 and 55 districts, respectively. We have shared detailed contingency plans with states for 320 districts," he said.
He said that the government has decided to release 1,440 crore for Karnataka, Maharashtra, Rajasthan and Gujarat under integrated watershed management programme and another 453 crore to Karnataka, Maharashtra, Rajasthan and Haryana under the National Rural Drinking Water Programme.
Apart form that, the centre has also allocated 38 crore as interim assistance for states facing drinking water problems like Maharashtra, Karnataka and Rajasthan. However, no immediate relief measures were announced for Gujarat, which has received less than 30% rains.
"So far, no state has declared a drought. Whatever feedback and report we get from states, we are ready to provide them with assistance accordingly," he said.
Meanwhile, Forward Markets Commission (FMC) has imposed special margins to curb price volatility in Potato, Soya bean, Soya meal and Turmeric contracts. It has also decided that no fresh positions will be permitted in the Potato contracts during the staggered delivery period of 15 days.
The RBI on Tuesday said rainfall deficit of 21% is likely to hit production of kharif crops, mainly coarse cereals and pulses, and could put pressure on prices of these commodities.Headline inflation persisted above 7% during the first quarter of the fiscal due to a rebound in food rates as well as high fuel prices.
French carmaker Renault is constructing asmall car from ground up to take on the likes of MarutiSuzuki's Alto, Hyundai India's Eon and Chevrolet's Spark, in the segment that makes up for about 40-45% of India's car market.
Work has begun on the car codenamed "A Entry" under the leadership of Gerard Detourbet, Renault's low-cost car specialist. The car will be powered by an 800cc engine.ET learns that Renault has started working on the smallest engine yet in its global portfolio codenamed B4A, which is likely to deliver a mileage of over 20 km a litre. The entry-level car segment in India ranges in the price bracket of Rs 1.5 lakh to Rs 4 lakh.Three persons close to the development told ET that the small car is likely to be rolled out from the RenaultNissan Alliance plant in Chennai. The new car may hit the market in 2014-15.
The 'A Entry' car is a global product and is being developed keeping emerging markets in mind, a source said."The internal target is to get the ARAI rating of 24-26 km per litre, with the car delivering at least 20 km per litre in city driving conditions," said one of the persons who confirmed the development.
DETOURBET TO SPEARHEAD PROJECT
Renault India spokesperson Rajiv Mitra told ET: "We might look at a car below the Pulse in future."
About specific queries on the timeframe, engine specs, these are all speculations at this point of time. As a company policy we don't comment on speculation by the media."
Renault had appointed Detourbet, who had in the past delivered on cost, quality and reliability with the Logan, to spearhead this project in November last year. After a series of studies, the French carmaker has decided to begin work. The key development is currently underway at the Renault Nissan Technology & Business Centre India in Chennai.
A person close to the development said the thought process of developing a small car for India began way back in 2006, when Renault got the first taste of the Indian market with the Logan. It realised that to make it big in the Indian market, the small car platform was absolutely critical.
"The European small car, Clio, would have been very expensive; so Renault knew the company will have to develop an entry-level car platform for the emerging markets led from India," the person said.
At the height of the economic meltdown in 2008, when projects and investments were put on hold, the two key projects that continued were the 'A Entry' and Electric Car platform.
For about a year or so, Renault relied on Bajaj for an entry-level car, but soon realised the need to develop an entry-level platform on its own for the emerging markets, irrespective of the development of the ultra low-cost car at Bajaj.
Renault has used its India base to build on its vendor base, critical for any project that builds a car from ground up. In India, the carmaker used the Duster SUV to develop its vendor base and test their capability on cost and quality, said another person in the know of the development.
"The Duster program was used to track quality vendors from India, who could satisfy a lot of parameters of cost, quality, reliability and scalability," an executive said.
Mirroring its past offerings, such as small cars Micra and Pulse and yet-to-be launched sedan Scala and Sunny, which are rebadged, the 'A Entry' car platform is also likely to be shared with Japanese major Nissan for its small car project Datsun, said a person close to the carmaker.
"But the alliance partners may move beyond re-skinning and the differentiation might be more pronounced than the existing projects which are rebadged," said the person requesting anonymity.
And all these key developments are happening out of the first joint R&D centre from Renault Nissan alliance anywhere in the world.
Even as these developments were happening in the backdrop, Renault's presence in the marketplace has remained minimal.
In 2011, Renault managed to sell merely 1,500 cars in India. However, thanks to the good response to Duster, it is now aiming to sell 30,000 units this year.
After its failed attempt with the Logan joint venture with Mahindra & Mahindra, Renault started from a clean slate in 2011.
In its second coming, Renault started with the launch of executive sedan Fluence and premium compact SUV Koleos. Over time, it has expanded its portfolio with the Pulse, Duster and Scala for India.
Renault entered the small car market with the Pulse, which is nothing but a rebadged Micra. Pulse has not managed to sell more than 500-600 units a month in a segment where Maruti Suzuki's Swift sells about 15,000-18,000 units a month.
Experts say there is a huge opportunity in the entry-level car segment. Even if 5-10% of 13 million two-wheeler users graduate to cars, that opens up a big market in itself to capture. And an 800cc car, if delivered in a proper package, could bring in big volumes for Renault in India, opines industry analysts.
"There is still a big vacuum between the two-wheeler and entry-level cars to tap into. It is readymade opportunity for anyone, provided you get the package right. If any company is able to offer a complete package of fuel efficiency, looks, comfort and safety, they will succeed," said Abdul Majeed, leader, automotive & transportation, PwC.
