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| Petroleum minister Deora: Reluctant
to roll back the hike |
If
a straw poll were to be conducted now, Murli Deora would stand
a fair chance of emerging the most unpopular Cabinet minister
in the country. His "crime": raising the prices of petrol
and diesel. Most other politicians would have given in to the
populist demand to partially roll back the price increase, but
Deora has stood his ground (at least till the time of going to
press), logically justifying his unpopular but economically sound
decision, and demanding, instead, that state governments reduce
the sales tax they levy on oil products. A successful businessman,
he knows the importance of keeping his books balanced; and he's
not likely to sacrifice his native instincts without a fight.
Deora is also an extremely well networked
leader. He has never attempted to hide his close and long-time
ties with the late Dhirubhai Ambani and his family. There were
whispers, even within his own party, when he was appointed petroleum
minister, but Deora took it in his stride and carried on as if
nothing had happened.
The man,
who ran the Congress in Mumbai for 22 years between 1981 to 2003,
retains his influence even though he was replaced in this role
by Gurudas Kamat. His close ties with the Nehru-Gandhi family
and his proximity to India's industrial elite has made him an
influential 'go-between' and one of the Congress' most capable
fund raisers. Any unfulfilled ambitions? He won't admit it, but
his failure to become Chief Minister of Maharashtra is believed
to be the big disappointment in his life.
As he undertakes a roadshow to explain the
rationale behind the oil price hike, Deora tells Business Today:
"I have a role to play in securing India's energy stability.
Our Prime Minister and Finance Minister talk of 8-10 per cent
GDP growth; that will not happen without stable energy costs.
But I am also a compassionate minister. I'll ensure that consumers
are not badly hurt."
-Kushan Mitra
NUMBERS
OF NOTE
$10 billion
(Rs 45,000 crore): The US' trade
deficit with India in 2005
$1.2 billion
(Rs 5,400 crore): Total investment planned by financial services
company Dawnay Day, to set up a chain of 30 four-star hotels in
India. It will invest $200 million in the first phase over the
next five years
91: The
number of people who died in group suicides arranged over the
internet in Japan-up from 55 in 2004, according to Japan's National
Police Agency
Rs 1,314 crore:
The Delhi government's budget for the Commonweatlh 2010 games
237 megabytes:
The size of the tax return filed by GE electronically; this is
equivalent to 24,000 pages
$1.65 billion
(Rs 7,425 crore): Amount Pfizer earned from sales of Viagra
last year
16: The
number of times the US Federal Reserve has raised interest rates
since June 2004. It currently stands at 5 per cent
Rs 4,000 crore:
The amount Indian Oil Corporation will gain from the June
5 fuel price hike
300,000: The
number of employees India's software services sector hopes to
add in 2006-07; the top two firms-TCS and Infosys-are expected
to hire more than 50,000 people, says Nasscom
$48 billion
(Rs 216,000 crore): The amount of capital financial system
reforms in the country can free up every year, according to a
McKinsey report released on June 1
 $125
million (Rs 562.5 crore): The price tag, the highest everasking
price, for a private residence in the US, and, perhaps, the world,
located in Palm Beach, Florida. The seller is Donald Trump, who
bought healthcare executive Abe Gosman's palace at a bankruptcy
auction for $41.25 million in 2004
2.8 billion:
Number of people likely to watch the 64-match FIFA World Cup 2006
globally. Of this, around 1.2 billion, or 17 per cent of the world's
population, will tune in for the final to be played on July 9
NOTED
 RESIGNED:
Verghese Kurien, from the chairmanship of the Institute
of Rural Management, Anand. He had resigned as chairman of the
Gujarat Cooperative Milk Marketing Federation last month, after
being its founder-chairman for 32 years.
REJECTED: By
the Arcelor board of directors, a revised bid by Mittal Steel
to take over the company, as inadequate and undervalued.
RANKED: As #
1, Genpact, in a list of top 15 third-party ITES-BPO companies
based on revenues, by Nasscom. WNS and Wipro BPO are in second
and third positions, respectively. Nasscom says the domestic market
for ITES-BPO witnessed a significant increase in demand, with
the estimated value of work outsourced (by domestic clients) growing
over 55 per cent to $860 million (Rs 3,870 crore) in 2005-06.
COMING UP: In
India early next year, stores by luxury goods giant Gucci, which
has sewed up a deal with the New York-based Murjani Group to set
up shop in India.
READY: BSE, with
a platform for trading in corporate bonds. It is now waiting for
approval from the Securities and Exchange Board of India to formally
launch the same.
ANNOUNCED: Bonus
issue in the ratio of 1:1, wherein one share will be issued for
every share held, by engineering major Larsen & Toubro.
 ELECTED:
SEBI chief M. Damodaran as Chairman of the Emerging Markets Committee
(EMC) of the International Organisation of Securities Commissions
(IOSCO) at its annual conference held in Hong Kong. IOSCO is the
world's primary forum of international cooperation for securities
regulatory agencies.
AWARDED: By Unilever,
a seven-year contract to Accenture for its global HR operations.
The range of services to be provided by the IT major include recruitment,
payroll management and performance management, in 100 countries.
The rollout is expected to start in a phased manner across the
Unilever world, with the first phase set to begin from the second
half of 2006 till 2009.
HOME
LOAN PARTY TO CONTINUE
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| Real estate: A correction is round the
corner |
The
Reserve Bank of India (RBI) is getting worried; it has stipulated
strict norms for housing loans. The risk weight on banks' exposures
to commercial real estate has been increased from 125 per cent
to 150 per cent. It has also increased the provisioning requirement
for residential housing loans beyond Rs 20 lakh and all commercial
real estate loans from 0.4 per cent to 1 per cent of the loan
amount.
The question is: will these adversely affect
housing loan approvals by banks? Suresh Menon, General Manager,
HDFC, doesn't think so. "We have been sanctioning 99 per
cent of our housing loan applications for the past 20 years; that
will not change, even though we have reduced the default period
from 180 days to 90 days," he says. "We have our own
standard norms and will continue to maintain housing loan approval
rates of 60-68 per cent," adds Rajan Ghotgalkar, Corporate
Head (Retail Banking), IDBI, adding: "Even rising interest
rates will not cool the demand for housing loans, unless they
cross 12-13 per cent." Chanda Kochhar, Executive Director,
ICICI Bank, agrees. "Income levels of the Indian middle class
have gone up," she says.
That's good news for the economy, but house
buyers will do well to exercise caution.
-Namita Johri
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