More than 1,500 consumers have switched over from Reliance Infrastructure to Tata Power already while 3,000 connections have been scheduled for switchover and another 2,000 switchover applications are still pending.
On 15 October 2009, the Maharashtra Electricity Regulatory Commission (MERC) had passed an interim order stating that Tata Power Ltd (TP) would be allowed to supply power to existing Reliance Infrastructure Ltd (RelInfra) customers who wished to switch power utilities.
Since the MERC order has been passed—as of information available for November 2009—more than 1,500 switchover connections in the city have been completed, since the process started in October 2009. The total number of applications pending for switchover from RelInfra to TP is believed to be 5,000, till the end of November 2009.
Out of these 5,000 applications, switchover dates have already been finalised for 3,000 applications in November 2009. These 3,000 applications were those where no issues had to be resolved. The remaining 2,000 applications pending with TP will be cleared this month.
Sources close to the issue say that TP has been maintaining an average switchover rate of around 60 connections per day; it has processed 100 applications on certain days—the company is eventually gearing up to provide 100 to 200 connections on a daily basis. TP has also set up a team of seven to eight members who would supervise the switchover process. Recently, TP added a section to its website where the status of a pending switchover application can be checked.
TP officials could not be reached for immediate comments on this issue.
— Amritha Pillay
The use of the mobile phone as an instrument for conducting financial transactions and the potential it has for financial inclusion and growth is being recognised by the apex bank, which has however called for caution in m-commerce adoption
The Reserve Bank of India (RBI) has said that use of mobile commerce
(m-commerce) must be made easy for the common man and it should be facilitated carefully—and well-measured—keeping in mind the concerns over money laundering, financial terrorism and the stability of the payment and settlement systems.
Speaking at the India Telecom 2009 conference, RBI’s deputy governor Dr KC Chakrabarty said, “While e-commerce has skipped the majority of the population due to the cost of setting up such channels, m-commerce has the capability to be inclusive due to the widespread use of mobile phones.”
The current guidelines for mobile banking permit banks to provide mobile banking transactions and mandate that all transactions have to originate from one bank account and terminate in another bank account.
“We all agree that the benefits of m-commerce should reach the common man at the remotest locations in the country. However, the extent and the manner in which m-commerce should be facilitated calls for a cautious and well-considered approach,” he added.
In India, out of the 32 banks which have been given approval to provide mobile banking facilities, only 21 have started providing these services. However, there is not much activity in this space, resulting in low transaction volumes, Dr Chakrabarty added.
According to the deputy governor, the reason for low uptake of mobile banking facilities are the requirements of end-to-end encryption that makes implementation expensive. Transaction limits —which range between Rs5,000 and Rs10,000—also have to be revised upwards.
The other issue banks face in providing mobile banking is that they are required to tie up with individual service providers for enabling such services. Banks face difficulties in entering into such partnerships. Again, mobile service providers do not open up channels for facilitating mobile banking services by banks.
“The successful partnering of banks and mobile service providers would also need the resolution of the issue related to customer ownership,” the deputy governor added.
Dr Chakrabarty also spoke about the growing use and transaction volumes of electronic services in the country. Presently, electronic clearing services (ECS) transaction volumes amount to about 2.5 lakh transactions in 2008-09, up from 1.4 lakh in 2006-07.
The number of bank branches offering national electronic funds transfer (NEFT) service has increased from 42,900 to 54,200 in 2008-09. The aggregate value of transactions increased to Rs2,51,956 crore from Rs77,446 crore during the same period.
— Aaron Rodrigues
Cement suppliers from the western and southern regions of the country have been witnessing a rise in cement prices over the past month. However, analysts believe that the price rise could be short-lived as the main reason for the rise is the temporary supply problem and the peak demand period.
Over the past one month, cement prices in the western and southern regions of India have risen by an average of Rs7 to Rs12 per bag. The prices have risen due to diversion of wagons carrying cement towards food grain transportation, coupled with the peak demand period.
With this rise in cement prices, stock prices of cement companies have also enjoyed a jump. The Moneylife Cement Index has risen by 14% from 3 November 2009 to 4 December 2009. ACC’s stock price was up by 16% during this period; Shree Cement went up by 20%; JK Cement by 25%; India Cements and Madras Cement by 18% each; Ambuja Cements shot up 12% and UltraTech Cement zoomed 13%.
However, this rise in cement prices is likely to be short-lived. “The shortage of wagons and the peak demand season have caused this price rise. Once the peak demand period is over, prices are likely to be on a downturn once again,” said Amit Srivastava, analyst, Karvy Stock Broking.
The period from November to March is the peak demand period for the cement industry. Cement prices in the western and southern regions are likely to witness the current monthly average rise of around Rs7 to Rs12 per bag up to March 2010.
The current cement price in the western region is around Rs195 per bag. Local dealers in the region believe the price may increase if the demand increases. “The main reason for the rise in price is the problem with the cement movement (due to shortage of wagons),” said a Gujarat-based cement dealer. Cement prices in the western region have increased from Rs190 to Rs195 per bag over the past month.
In the southern region, specifically Hyderabad, prices have increased from Rs140 to Rs155 per bag. A few months back, cement prices were coming down, with the southern region worst affected. In a short span of time—between August to October 2009—cement prices had fallen from Rs230 per bag to Rs140 per bag, leading to a sharp fall in cement stocks. The Moneylife Cement Index fell by 12% from 602.91 on 3 August 2009 to 533.50 on 30 October 2009.
Analysts believe that this rebound in cement prices had to happen as prices had fallen drastically in a very short span of time. But this revival in prices is not likely to sustain, said Mr Srivastava.
While the southern and western regions are witnessing this temporary rise in prices, cement prices in the northern, central and eastern regions of the country have been unaffected by this phenomenon. Current cement prices in Delhi have fallen from Rs248 to Rs240 per bag over the past month. Dealers from the region expect prices to fall further.
The transportation problem has proved to be a blessing in disguise for the cement industry, which was suffering from the early effects of an oversupply in the market. “Cement manufacturers have reduced their operating capacity utilisation to maintain the demand-supply situation. It has helped reduce their inventories,” added Mr Srivastava.
— Amrita Pillay