Govt lifts ban,allows Pakistanis to invest in Indian companies 

FIPB Route Likely,Norms To Be Notified Soon 

TIMES NEWS NETWORK 

New Delhi: Suddenly,the horizon in the neighbourhood appears to be brightening.For the first time ever,India on Friday decided to allow foreign direct investment (FDI) from Pakistan a step that signals growing warmth in the relations between the two nuclear-armed neighbours.
Until now,Pakistan was the only country from where FDI was not allowed.The decision to allow FDI may not lead to an immediate rush of investments from Pakistan,but it does show that the two sides are now eager to do business and significantly raise the level of trade and economic engagement between them.India has taken an in-principle decision as part of trade normalization process to allow foreign direct investment from Pakistan, commerce,industry and textiles minister Anand Sharma told a news conference here after a meeting with his Pakistani counterpart Makhdoom Amin Fahim.Procedural requirements are underway and it will be notified soon, Sharma said.No further details were available but officials had earlier told TOI that after the rules are amended,investments can come through the foreign investment promotion board (FIPB) route into sectors where foreign investment is allowed.
FIPB has representatives from all ministries,including home,and scrutinizes proposals which are referred to it.As confidence levels rise,you will see more companies willing to set up ventures in both countries.Initially companies will prefer trading, said a senior government official,who did not wish to be identified.
Right now,the focus is on trade and sectors like tourism,education,health and hospitality.

50 Weeks To Bonhomie 



Done Deals 

Pakistan moves towards grant of full most-favoured nation tag to India Wagah-Attari land trade route upgraded,second gate opened Anand Sharma becomes first Indian trade minister to cross border for bilateral talks;his counterpart Makhdoom Amin Fahim undertakes first bilateral journey by Pak minister in 30 yrs India helps Pakistan get benefits for textiles exports to Europe 3 pacts signed to remove trade barriers Trade shows held in Lahore,Delhi 

In The Pipeline 

Business visa norms to be eased in a few weeks Talks underway on trade in electricity,diesel Preferential trading arrangements planned Steps initiated for banks from both countries to open branches Third route for trade via Munabao-Khokharapar may be opened 

Pak honcho lauds Aman ki Asha project 


With governments of India and Pakistan pushing for liberalizing trade norms,Bashir Ali Ahmed,president of International Textile Manufacturers Federation,is positive that regional trade between the two countries will grow manifold.In an interview to TOI,Ahmed said,With the world economy going through a bad phase,we (India and Pakistan) have a big responsibility to the world and to the region.Aman ki Asha played a huge role in initiating the process

Questions on Governance 

LIC bought shares worth.8,000 crore in various state-run banks.Investors are questioning governance in state-run companies,including in Coal India and oil marketing companies such as IOC,which face price controls.But LIC says these investment practices are in line with its objectives.These investments are in line with the objectives set up by the corporation and are done with a long-term view, said an LIC spokesperson.We have tried to maintain a healthy balance considering the weightage of public sector in the index. An ET study of the Sensex shows PSUs have a weightage of 14.28% with the rest accounted for by the private sector.The BSEs PSU index had underperformed the broader market falling 18.4% in fiscal 2012 when the benchmark Sensex declined 10%.On a single company basis there could be some problem,but on portfolio basis they would make 12-15 % return on a long-term basis, said Abhijit Gulanikar,chief investment officer,SBI Life.The public sector insurer,which is mandated to invest 50% of its funds in government bonds,bought gilts worth.95,000 crore last fiscal when it had an investment corpus of.2 lakh crore.Other corporate bonds bought totalled.45,000 crore,said the people quoted above,who did not want to be identified.Other assets,including loans,accounted for.20,000 crore.As long as LIC is investing within the norms laid down by the regulator there is nothing to worry about, said Shashwat Sharma,partner,KPMG.But the insurer has breached the investment norms laid down by the regulator in some companies.Its demand to raise the 10% ceiling on holding in a particular company was rejected recently by the regulator.

New Facilities to be Set Up 

We need to set up new facilities and provide better resources to enhance the quality of education, said Pankaj Chandra,director,IIM-Bangalore.Different IIMs rolled out the 54% increase in seats over three years in different ways.For instance,IIM-Ahmedabad increased the number of seats from 250 to 385 over the three-year period.Though the increase was spread out,B-schools have had to expand existing infrastructure,including classrooms,hostels and other facilities.If we dont increase fees we might be able to meet our operational expenses,but it wont be enough for capex, said Ashok Banerjee,dean (new initiatives & external relations ),IIM-Calcutta.Added Chandra: For institutes not funded by the government,it is natural to increase fees.But we are very conscious that we dont want to increase until its necessary. IIMs in Lucknow,Rohtak,Ranchi and Kozhikode and ISB Hyderabad have not increased fees this year.Some B-schools have waiver schemes for financially weak students.At IIM-A,for instance,around 25% of the students in the first year (class of 2013) have received some form of fee waiver this year.At IIM-Calcutta,22% of the students have received waiver.Conversely,this increases the bill for those who are able to pay.

BANKS DEFAULTED ON TWO OCCASIONS 
Pensioner wins fight for delayed dues 

Indifference Of Bankers Highlighted 

Karthika Gopalakrishnan TNN 

Chennai: Highlighting the plight of pensioners denied dues because of the indifference of bank officials,S S Radhakrishnan,64,has won a favourable order from the District Consumer Disputes Redressal Forum.
A bench of V Gopal,president,and L Deenadayalan,member,has ordered Indian Overseas Bank (IOB) to pay interest at the rate applicable to credit card loans (of 24%) on the enhanced pension amount which was belatedly paid and a compensation of 10,000.
In his complaint,Radhakrishnan of Besant Nagar said his pension was credited to the account he held with an IOB branch in his locality.His pension was revised from 6,021 to 13,609 with effect from January 1,2006 as per a resolution of the Union government.
A subsequent memorandum from the department said 40% of the arrears would have to be paid by September 30,2008 while the remaining would be done in 2009-10.However,Radhakrishnan said the arrears of 30,761 were credited after a delay of 14 days on October 14,2008 instead.Though the Union government had issued a similar memorandum that the second installment of arrears be credited before November 30,2008,this was done only in May 2009 after a delay of 152 days.The amount due in this case was 1,05,342.Finding strength in Radhakrishnans contentions,the bench ruled that the delay in crediting the revised pension arrears amounted to deficiency in service.
Allowing the complaint,the bench directed bank authorities to pay interest at the rate applicable to credit card loans for 30,761 from October 1 to October 14,2008 and also for 1,05,342 from December 1,2008 to May 2,2009.The bench also directed that Radhakrishnan be paid 10,000 as compensation for mental agony and 3,000 as cost of the complaint.
I have got my money.There are officials from several banks who are not doing their job even now.Retired people may not know they are not getting their rightful dues because to the indifference of bank staff.Lakhs of pensioners might benefit from this judgment, Radhakrishnan said.karthika.gopalakrishnan@timesgroup.com

• 16 Apr 2012
• Hindustan Times (Delhi)
• Rachit Vats rachit.vats@hindustantimes.com

No plain milk: Amul to take legal action over Cadbury’s ad

MUMBAI: Is plain milk not enough? The question has become a bone of contention between dairy major Amul and confectionery giant Cadbury, owned by Kraft Foods. Amul will be taking the legal route against Cadbury for promoting its flagship health drink Bournvita in a misguided way. Amul claims Cadbury’s campaign saying milk alone is not nutritious puts the entire dairy industry in a poor light and misguides consumers.

The Cadbury campaign advises consumers to mix supplements such as Bournvita to raise Vitamin D levels.

“Milk is the best source of vitamins and has enough nutrition,” said RS Sodhi, managing director, GCMMF (Gujarat Cooperative Milk Marketing Federation Ltd). “Cadbury has tried to degrade milk’s virtues and is misguiding consumers to promote its own supplement.”

No Big Hikes,Bonus for MF Staff this Year 

Some fund houses pushing for paycuts,downsizing 

SHAILESH MENON MUMBAI 

Four CEO exits in a month,abysmal pay hikes,ban on bonuses and whispers of downsizing the Indian mutual fund industry is going through one of its roughest patches in a decade.Fund house managements are taking a hard look at slow AUM (asset under management ) growth,scheme underperformance,low profits and rising costs.Boards of trustees of several MFs are pushing for paycuts,skipping bonuses,increasing variable component in salaries and forewarning employees of a possible right-sizing.According to industry sources,which include views from over half-a-dozen domestic fund houses,and a few leading HR consultants,the best and the biggest domestic fund houses are offering just about 9-12 % increments to top performers.Bonus payouts,which are performance-linked,are being kept aslow as 12-20 %of salaries.Theres little to reward employees this year, said the CEO of a banksponsored fund house.March and April are important months for fund companies that follow a two-year lap calendar .Fund houses strive hard to maintain high assetbases and NAVlevels in March as itbecomes a reference pointfor the following year.However,average AUM of the Indian fund industry fell over 2% to.6.64 lakh crore in the March quarter.Asset bases of fund houses like IDBI Mutual,JM Mutual,Kotak Mutual Fund,L&T Mutual and Religare Mutual,among others,dipped 10-35 % during the threemonth period starting January.The sales and marketing departments have not been able to bring in investors;fund managers have also not showcased any extraordinary performance, the person said.

Boards Try to Cut Operational Costs 

A few corporate marketers have managed to bring in money;theyll be given a 25% bonus and small increment, added the person.In the bullish years of 2006 and 2007,even mid-sized fund houses paid bonuses in the range of 40-50 %;increments were in the range of 20-30 % in those years,as per data sourced from various HR consultants.Increments and bonuses in asset management companies have fallen significantly this year.Fund houses have failed to grow their assets or put up good fund performance;its not going to be a very rewarding time for fund professionals, said E Balaji,MD & CEO,Randstad India.Boards of most fund houses are now trying to reduce their operational costs.Many of them are planning to cut flab in their marketing,sales and other support departments.According to Balaji,most fund houses are only resorting to selective replacement hiring to fill up senior-level vacancies.Mutual fund and investment banking have been the worst-hit trades in the financial services industry.We may see a downsizing this year.Cuts may come initially in out-of-flavour verticals like aviation,mining and renewable energy, said R Suresh of Stanton Chase.In the last one year,brokerages made news for sacking employees and folding up bases in smaller towns as trading volumes shrank.The crisis in mutual funds came to the fore with the exit of four CEOs in quick succession.Piyush Surana of Daiwa Asset Management,Arindam Ghosh who headed Mirae Mutual Fund,and Rajan Krishnan of Baroda Pioneer Mutual Fund have resigned in the past three weeks.Sameer Kamdar,who was supposed to head ASK Asset Management,resigned last week after a two-year wait for Sebi approvals.Were not sure whats making them leave... the real reasons could be pressure on performance,cost-cutting or differences in strategies, Balaji of Randstad India said.According to the CEO of a large corporate fund house,FY12 was probably the worst year in the history of funds in India.The industry was hit badly by frequent regulatory changes,volatile equity markets,disinterested distributors and outflow of bank money from debt schemes.We missed all our targets last year, he said.

 
With this attitude,this hostility from the Argentine authorities,there will be consequences that well see over the next few days.They will be in the diplomatic field,the industrial field,and on energy 

JOSE MANUEL SORIA Spanish industry minister 

Indias Tremendous Potential 

This basically turns the spotlight back on the tremendous opportunity Indias growth story has even under the given conditionsIf India plays its cards correctly through policy measures we can actually achieve much more in the next 5-10 years, said Saugata Bhattacharya,chief economist with Axis Bank.Added Samiran Chakraborty,chief economist with Standard Chartered India: This shows that India is no longer an emerging economy.It has already emerged.But beyond that there are not many conclusions one can take from the data. The PPP system allows GDP comparisons to be made by asking how much money would be needed to purchase the same goods and services in two countries and using that to calculate an implicit foreign exchange rate.Under this method,a dollar should be able to buy the same amount of goods anywhere in the world and exchange rates should adjust accordingly.It also strips away distortions that come with market exchange rates,which are often volatile,affected by political and financial factors that do not lead to immediate changes in income and tend to understate the standard of living in poor countries.The Economist magazines proprietary Big Mac Index,which takes the price of a McDonald burger across 120 countries to calculate the real price of their currencies,is another crude way to measure PPP.India was included in the index recently.It showed that the Indian rupee was undervalued by 62% against the US dollar in January.PPP methods help adjust income to prices for a meaningful comparison on quality of life in countries with widely different prices and incomes.The PPP comparison is more useful while comparing the standards of living between countries, said Ulrich Bartsch,a senior macroeconomist in the World Banks India office,adding that while the per capita GDP in PPP terms shows that India still has some distance to go to reach Japanese levels,the difference is less than the comparison of per capita GDP in nominal dollar terms would indicate.India,according to the IMFs calculations,was able to overtake Japan in 2011 because its economy grew 7.24% whereas in the case of Japan,it shrank 0.75%,hit by a tsunami that ravaged the country and exacerbated the adverse impact of global economic slowdown.While India may have beaten Japan under this particular system of calculation,under more conventional methods of measurement,it has to travel a long distance to catch up.Under the regular method of GDP calculation,Indias economy is well behind Japan.Even assuming an average economic growth rate of 7.5% over the next five years,the Indian economy will be only $2.9 trillion compared with Japans $6.69 trillion.For the fiscal year to end-March 2013,official forecasts are for GDP growth of around 7%,slightly higher than the 6.9% expected in the previous year and much lower than 8.4% the year before.Economists reckon that India will continue to lag behind when it comes to matching living standards of its population with more developed western and Asian economies.Yet,with its demographic advantage and prospects of sustainable high growth over the next five years,the country is expected to consistently improve its global economic standing.