January 2013

Government of India announced Minimum Support Price for Cotton

The Union Government on 2 October 2012 announced a revised Minimum Support Price (MSP) for cotton and this would help in inducing stabilisation in cotton price. Cotton has witnessed a sharp decline in the past and remained operational round about its minimum support price. After the review meet conducted on 2 October 2012, by the Union Textiles Minister, Anand Sharma the revisions were done. The decided minimum support price of medium staple cotton has gone up to 3600 rupees per quintal from initial rate of 2800 rupees. Similarly, the MSP for long staple cotton has gone up to 3900 per quintal from 3300 rupees. This rate is fixed for the fiscal year 2012-13.

The Cotton Advisory Board has declared that the estimated production of cotton in the country for this year would be about 334 lakh bales, out of which the national consumption would record to 260 lakh bales. The surplous 70 lakh bales would be available for exports purposes. The government has formulated a contingency plan to procure 90 lakh bales of cotton under MSP operations in the season of cotton production in the year 2012-13. To carry on with this procurement process, it has also operationlised 288 procurement centers across all the nine cotton growing states of the nation. The working capital requirement was raised to 15000 crore rupees by the Cotton Corporation of India (CCI) for operationlisation of the MSP fixed. To control the MSP plan a special MSP cell has also been created at the CCI’s corporate office and it is headed by the A. Chokalingam, Director Marketing. To alleviate the distress of farmers from NAFED and CCI, the government would be taking serious steps for price stabilization and operationlisation of the MSP decided.

Criteria of Selection of Procurement Centers

• Centers that would cross the expected arrivals of 50000 quintals of cotton
• It should have an existence of market yard that is functional
• Weighbridge should be available in the market
• Ginning and pressing factories must be available in proximity to the center, with availability of facilities for fire fighting

Amul loses

TRIX to U.S. giant

The Gujarat High Court has refused to set aside an order which cancelled Amul’s registration of its trademark ‘TRIX’, on which a U.S. firm has claimed its right.

In July this year, the Intellectual Property Appellate Board had directed Registrar of Trademarks to cancel Amul’s registration of TRIX trademark.

A Division Bench of Chief Justice Bhaskar Bhattacharya and Justice J. B. Pardiwala, in a recent judgment, dismissed the petition filed by Kaira District Co-operative Milk Producers Union Ltd., owner of Amul, seeking cancellation of trademark ‘TRIX’ registered in favour of U.S. food giant General Mills.

Amul, 35 years after registering the trademark and after General Mills’ entry into Indian market as late as in 1995, had questioned the U.S. firm’s right over TRIX. Gujarat Co-operative Milk Marketing Federation (GCMMFL), which markets milk and milk products under Amul brand under a licence from the petitioner, registered TRIX (coined from the word TRICKS from the concept of appearing and disappearing tricks as in magic show) as a trademark in 1977.

“In 1986 we launched a chocolate under ‘TRIX’ trademark. We advertised it in a manner that it was so tasty that the chocolate bar just disappears/melts in mouth quickly,” according to the petition. However, Amul stopped using TRIX in 1987. The U.S. food giant’s subsidiary, General Mills India Pvt. Ltd., came into existence in 1995. In 2005, it applied for registration of trademark TRIX claiming that in various countries it was holding the same trademark since 1910. Since Amul already owned the trademark, General Mills India’s application for registration was rejected. Meanwhile, the U.S. firm made a foray into the Indian market by introducing a snack under the trademark ‘DIP-TRIX’. At the same time, Amul also planned a re-launch of its TRIX brand for a wafer-chocolate, which was introduced in 2007. This led to a legal battle between the two giants. Amul objected to unauthorised use of TRIX by General Mills. The U.S. giant challenged Amul’s claim over TRIX by filing a rectification application with Intellectual Property Appellate Board (IPAB), Ahmedabad. On July 16, 2012, the IPAB directed the Registrar of Trademarks to cancel Amul’s right over the trademark. The dairy brand challenged the board’s verdict in the HC, arguing that IPAB had erred in its ruling. “Rectification application could not have been allowed as there was use of its registered trademark ‘TRIX’ in December 2005 by AMUL leading to sale in May 2007 (of wafer chocolates) — that is during the statutorily required period of non-use for a period of five years and three months before the date of rectification application,” it said. However, the Bench did not find any error with the board’s conclusion. India, China to step up infrastructure cooperation

Chinese officials said on Tuesday that next week’s Strategic Economic Dialogue (SED) in New Delhi would help both countries deepen cooperation on investment and infrastructure projects, with one of the largest-ever delegations of Chinese officials set to travel to India for the November 26 talks. Chinese Foreign Ministry spokesperson Hua Chunying told reporters that representatives from Chinese “government agencies, enterprises and financial and research institutions” will travel to New Delhi, with a view to “stepping up communication and coordination of macro-economic policies, and deepening and expanding mutually beneficial cooperation in investment, infrastructure, high technology, energy conservation and environmental protection”.

The delegation will be led by Zhang Ping, who heads the National Development and Reform Commission (NDRC), the top planning body. He will chair the talks along with Montek Singh Ahluwalia, Deputy Chairman of the Planning Commission. Officials said close to 200 Chinese officials will travel to India, including representatives from the NDRC, Ministry of Commerce, the Foreign Ministry, Ministry of Railways and State-run companies.

Rail corridors

At the first round of the SED in Beijing in September 2011, both sides discussed cooperation in railways, which might pave the way for Chinese involvement in India’s plans to set up high speed-rail corridors. Sources said top officials from CNR, one of China’s biggest railway companies that has played a key role in China’s high-speed rail expansion, will travel to New Delhi next week. Besides railways, separate working groups on infrastructure, energy, environment and high-tech sectors will meet during the November 26 dialogue in New Delhi. Officials said the idea behind the SED was to go beyond trade issues and look at the bigger picture and macro-level cooperation. Trade issues will not be the focus of the SED — a separate Joint Economic Group dialogue headed by Commerce Ministers of both countries discusses bilateral trade issues, officials said. As a new leadership in China takes over, officials here have stressed their desire to expand trade and commercial engagement with India — an issue that found prominence at Monday’s meeting between Prime Minister Manmohan Singh and Chinese Premier Wen Jiabao in Cambodia.

Ms. Hua, the Foreign Ministry spokesperson, said both leaders had agreed to “seize the opportunities of development” and to “step-up cooperation in infrastructure”. “The Chinese government,” she said, “will continue to encourage reputable Chinese enterprises to invest in Indian projects”. Chinese officials stress that the leadership transition will not affect ties with India, and that there will be continuity in all areas, whether related to political, military or trade issues. Government officials who handle foreign policy and trade have not stepped down at the recently concluded National Congress, during which the Communist Party’s top leadership retired. Officials in government will continue serving until March, when the Parliament meets to appoint new officials. Mr. Wen, the Premier; Mr. Zhang, head of the NDRC; and State Councillor Dai Bingguo, the “Special Representative” on boundary issues, will all continue in office until March. Union Coal Ministry decided to deallocate Four Coal Blocks allotted to 15 Firms

The Union Coal Ministry in the fourth week of November 2012 decided to deallocate four coal blocks allotted to 15 firms, including JSW Steel and Bhushan Steel and Strips. The four coal blocks are as following:- Gourangdih ABC coal block in West Bengal, New Patrapara coal block in Orissa, the Lalgarh coal block in Jharkhand and north Dhadu coal bloack. The ministry also asked the Monnet Ispat to deposit a bank guarantee of 62 crore rupees. The Gourangdih ABC coal block in West Bengal was allotted to Himachal EMTA Power Ltd and JSW Steel Ltd. The Coal Ministry in its letter to the company stated that it has decided to forfeit 50 per cent of the Bank Guarantee related to the development of coal block as per the recommendation of Inter-Ministerial Group. The Ministry also decided to deallocate New Patrapara coal block in Orissa and to return the full bank guarantee amount without any deduction.The Coal Ministry in another letter to Monnet Ispat said that the Bank Guarantee as calculated by Coal Controller is to be deposited by the allottee company within one month from the date of letter failing which the block may be deallocated. In case of Domco Smokeless Fuels, the Ministry decided to deallocate the Lalgarh (North) coal block in Jharkhand. With regard to North Dhadu coal block jointly allocated to four firms, the Ministry has decided to deallocate the North Dhadu coal block in addition to the forfeiture of full bank guarantee.

Union Cabinet of India cleared Proposal for Spectrum Sharing

The Union Cabinet of India on 8 November 2012 approved levy of about 31000 crore rupees as one-time spectrum charge to be implemented on all incumbent telecom operators like Bharati Airtel, Vodafone, Idea and others. The proposed charges had been implemented to create a level ground between the old players and the new players of the telecom sector. The Finance Minister of India P Chidambaram declared that the recommendations of the EGoM (Empowered Group of Ministers) was cleared and the GSM operators would have to pay for the airwaves that they hold beyond the 4.4 Mega-Hertz, the price determined at the auction and the operators holding more than 6.2 mega hertz airwaves would have to pay a retroactive fee from July 2008 onwards. The CDMA operators would have to pay for the airwaves that they hold beyond 2.5 Mega-Hertz as per the validity of the permits offered to them.

Retail Inflation in India rose to 9.75 percent in October 2012

The data on retail inflation was released by the Government of India on 11 November 2012. The retail inflation in India rose to 9.75 percent in the month of October 2012 after being measured on the scale of Consumer Price Index (CPI). The retail inflation was marginal as it witnessed a rise of 0.02 percent of the noted rise of 9.73 percent in the month of September 2012. The rise in rural India the consumer price inflation rose to 9.98 percent from the 9.79 percent recorded in September 2012. The inflation in urban India was recorded to be 9.46 percent in October from 9.72 percent recorded in the previous month. Reaching close to the double digit mark, the inflation witnessed the maximum price rise on Sugar that rose at 19.61 percent per year and was followed by edible oil and fat which saw a rise of 17.92 percent, whereas pulses and cereal grains witnessed a rise of 14.89 percent. Prices of vegetable grew by 10.74 percent in October 2012, and the rates of meat, eggs and fished went up by 12.18 percent. Costs of cloths, beds and footwear went up by 10.47 percent year after year. All India Provisional General (all groups) the CPI numbers for the month of October 2012 for urban, rural and combined level were recorded as 122.6, 126.7 and 124.9 respectively.

Japan to fund multi-billion dollar CBIC project soon

Japan has said it will soon announce funding for the multi-billion dollar Chennai-Bangalore Industrial Corridor (CBIC), the third mega project that will be quarter-backed by Tokyo. The other two projects that Japan is backing are the Delhi-Mumbai Industrial Corridor (DMIC) and the Dedicated Freight Corridor (DFC). The announcement of the CBIC project has led to considerable enthusiasm among most south Indian states with Andhra Pradesh wanting its extension to Krishnapatnam port and Karnataka asking for the inclusion of Chitradurga with the State government planning to set up a manufacturing hub between Chitradurga and Tumkur. Kerala is the only south Indian State which has so far not expressed a desire to be included in the project, according to government sources.

The feasibility study for the CBIC is likely to be financed from a 184 billion yen Official Development Assistance (ODA) from Japan which will also fund the second phase of the DFC. This was conveyed by Japanese Prime Minister Yosihiko Noda during his second meeting in as many days with Prime Minister Manmohan Singh on the sidelines of the Association of South East Asian Nations (ASEAN) summit and related meetings with its dialogue partners, including India.

New Delhi is putting immense faith in CBIC, heralding a renewed round of industrialisation in the south, with T. K. A. Nair, Adviser to Dr. Singh, regularly reviewing its progress. The project was first made public during the India-Japan annual summit in 2010.

The project will initially focus on Phase-II of the Chennai Outer Ring Road, Chennai-Bangalore Expressway, modernisation of airports in Chennai, Bangalore and Sriperumbudur and ports in Chennai and Ennore, in addition to a high-speed rail link between Chennai, Bangalore and the Avadi rail link. Simultaneously, State governments and the Centre will deliberate on easing customs procedures and enhanced use of IT and automation.

According to official sources, the Prime Minister welcomed the ongoing projects under the ODA but emphasised that India’s priority was investment by Japanese business in infrastructure projects such as the Delhi Metro which other cities wanted to emulate. This is the same message he gave to Chinese Prime Minister Wen Jiabao on Monday.

Rare earths

After Dr. Singh’s visit was put off, the two countries on November 16 signed an MoU on rare earths and inked a pact on social security. The pact of rare earths too was first publicly aired during the 2010 summit. It is a fall-out of tensions between Japan and China which led to Beijing clamping down on rare earth exports to Tokyo.

India signed 70 million US Dollar loan agreement with World Bank

Government of India on 22 November 2012 signed a 70-million US Dollar loan agreement with World Bank for financing the Karnataka Health Systems Development as well as Reform Project. Primary objective of this project is improvisation of public-private collaboration, health services delivery and financial aid for vulnerable groups and underserved in Karnataka. The agreement was signed by the Joint Secretary, Department of Economic Affairs and India Operations Advisor of World Bank in New Delhi.

The components of the project include:

• Strengthening present health programs of the Government of India
• Innovations in the health financing as well as service delivery
• Project management, evaluation as well as monitoring

Additional financing of this project is scheduled to be implemented till 31 March 2016.

Economic Growth Declined in July-September Quarter of 2012-2013 Fiscal Year The economy of India grew just by 5.3 percent in July-September quarter of fiscal year 2012-2013, revealed the Central Statistical Organisation. The economy dropped down the rate of growth because of poor performance of the agriculture as well as manufacturing sectors and it is persistently indicating slowdown signs.

In the previous fiscal year, the gross domestic product (GDP) had grown by 6.7 percent in the same quarter. In the first quarter of 2012-2013, the economy had grown by 5.5 percent. By the end of the July-September quarter, i.e., on 30 September 2012, the manufacturing sector had grown marginally by just 0.8 percent in comparison to 2.9 percent in the same quarter last year, the Central Statistical Organisation revealed.

The output of the farm sector expanded merely 1.2 percent in this quarter in 2012-2013 financial year in contrast to 3.1 percent in same quarter last year. The economic growth for the time period of April-September in this financial year is 5.4 percent in contrast to 7.3 percent in previous fiscal year. In this quarter in the present fiscal year, hotels, transport, communications as well as trade showed slow pace at 5.5 percent in comparison to 9.5 percent last year in the same quarter.

The construction sector showed signs of improvement where the growth was 6.7 percent as against 6.3 percent last year. Apart from this, the rate of growth in certain service sectors such as real estate and insurance was 9.4 percent as against 9.9 percent in last year’s quarter.

Finance Minister of India P. Chidambaram concluded that the only way to overcome the situation was through increased production as well as innovation. Petrol Price in India slashed by 95 Paise due to fall of Prices in International Market

Petrol Prices in Indian market on 15 November 2012 was slashed by 95 paise per litre. The decision came up as a result of the fall in oil prices in the International Market. The Indian market witnessed a second slash in the rates of petrol since 9 October 2012, in October there was a cut of 56 paise per liter in the price of petrol. This slash in the petrol prices would bring down the prices of petrol in different states of the country and would vary from state to state due to the difference in the state and local taxes of different states. With this fall in rates of petrol in Delhi went down to 68.19 rupees to 67.24 rupees per litre. In Mumbai the price went down by 1.20 rupees and the petrol there would cost 73.53 rupees per litre, in Chennai the price went down to 70.57 rupees from 71.77 rupees. Kolkata saw a slash of 1.19 rupees per litre in the petrol prices and it would be available to the consumers at a rate of 74.55 rupees per litre. Global Gasoline Rates helps in creating a benchmark in fixing the price of petrol in the domestic market.

The gasoline rates also witnessed a fall in rates globally but declined and non-stagnant value of Rupees against the US dollar and would have an impact on the petrol prices in the coming future. The volatility of Rupees against the value of exchange rates of US dollar is being closely monitored to get out of the uncertainties about the direction in which future decisions would head towards. The Union Government of India in June 2010 deregulated the prices of petrol by offering freedom to the oil companies for fixing the petrol rates following the costs prevalent in the international market. But this deregulation in the petrol prices also had no impact in getting the Indian Oil Companies in getting out of the losses with which they are overburdened and this happened because of the buckling political pressure on the oil companies to have a check on curbing growing inflation in Indian market.

Retail Inflation in India rose to 9.75 percent in October 2012

The data on retail inflation was released by the Government of India on 11 November 2012. The retail inflation in India rose to 9.75 percent in the month of October 2012 after being measured on the scale of Consumer Price Index (CPI). The retail inflation was marginal as it witnessed a rise of 0.02 percent of the noted rise of 9.73 percent in the month of September 2012. The rise in rural India the consumer price inflation rose to 9.98 percent from the 9.79 percent recorded in September 2012. The inflation in urban India was recorded to be 9.46 percent in October from 9.72 percent recorded in the previous month. Reaching close to the double digit mark, the inflation witnessed the maximum price rise on Sugar that rose at 19.61 percent per year and was followed by edible oil and fat which saw a rise of 17.92 percent, whereas pulses and cereal grains witnessed a rise of 14.89 percent. Prices of vegetable grew by 10.74 percent in October 2012, and the rates of meat, eggs and fished went up by 12.18 percent. Costs of cloths, beds and footwear went up by 10.47 percent year after year. All India Provisional General (all groups) the CPI numbers for the month of October 2012 for urban, rural and combined level were recorded as 122.6, 126.7 and 124.9 respectively.

RBI revises definition of infra lending

The Reserve Bank of India (RBI) on Tuesday revised the definition of ‘infrastructure lending’, which would make sectors and sub-sectors eligible for infrastructure lending by banks and financial institutions with immediate effect. The exposure of banks to projects under sub-sectors which were included under the RBI’s previous definition of infrastructure — as per the circular of November 30, 2007, but not included under the revised definition, will continue to get the benefits under ‘infrastructure lending’ till the completion of the projects. However, “any fresh lending to those sub-sectors from the date of this circular will not qualify as ‘infrastructure lending’, the RBI said in a notification to all banks and financial institutions. The Government of India had notified a master list of infrastructure sectors/sub-sectors in March 2012 to avoid multiplicity of definitions among various regulators which gives rise to confusion and difficulties. The sectors and sub-sectors come under revised infrastructure lending are:

Transport: Roads and bridges, ports inland waterways, airport, railway track, tunnels, viaducts, bridges, including supporting terminal infrastructure such as loading/unloading terminals, stations and buildings, urban public transport (except rolling stock in case of urban road transport).

Energy: Electricity generation, electricity transmission, electricity distribution, oil pipelines and oil/gas/liquefied natural gas (LNG) storage facility (including strategic storage of crude oil) and gas pipelines, including city gas distribution network.

Water and sanitation: Solid waste management, water supply pipe lines, water treatment plants, sewage collection, treatment and disposal system and irrigation (dams, channels, embankments and the like) and storm water drainage system.

Communication: Telecommunication (fixed network) including optic fibre/cable networks which provide broadband / internet and telecommunication towers. Social and commercial infrastructure: Educational institutions (capital stock), hospitals (capital stock), including medical colleges, para medical training institutes and diagnostics centres and three-star or higher category classified hotels located outside cities with population of more than one million.

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