Audit chief faces questions by JPC over presumptive loss estimate of Rs1.76 lakh crore over unfair allocation of licences, spectrum
New Delhi: The Comptroller and Auditor General (CAG) today faced some tough questioning at a meeting of the Joint Parliamentary Committee (JPC) on the presumptive loss of Rs1.76 lakh crore to the exchequer which it had estimated in the 2G spectrum allocation, with some members questioning its mandate to look into policy decisions to arrive at the figure.
Comptroller and Auditor General Vinod Rai, who briefed the JPC on the allocation and pricing of telecom licences and spectrum during the period 1998 to 2009, maintained that the auditor acted within its constitutional mandate, PTI reports.
During the meeting of the Committee, some members pointed out that the Telecom Rregulatory Authority of India (TRAI) had taken a "definite decision" that spectrum 800-900-1800 Mhz bands should not be auctioned.
"That being a decision of the TRAI and that being a policy decision, how come the CAG has come to the notional loss of Rs1.76 lakh crore...policy is not a matter that is a subject matter of audit. It is a government decision," JPC chairman PC Chacko told journalists, while informing them about the proceedings.
He said some members wanted to know whether the CAG had taken into account the policy prescription of the government before arriving at the figure of presumptive loss.
When asked about the reaction of the CAG on the issue, Mr Chacko said Mr Rai maintained that the government auditor acted "within mandate" while looking into the 2G spectrum allocation issue.
Sources said that during the three-and-a-half-hour long meeting, Congress member Manish Tewari sought to know the constitutional mandate of the CAG in looking into the policy decisions of the government. To this, Gurudas Dasgupta (CPI) said that besides following the mandate, the CAG also follows certain conventions.
Aditya Birla flagship company records highest-ever sales, but profit cut by high commodities costs
New Delhi: Hindalco Industries today reported a 37.4% dip in consolidated net profit for FY11 at Rs2,456 crore, primarily on increased expenses for raw materials and a higher interest outgo. The Aditya Birla Group flagship company registered a net profit of Rs3,925 crore in 2009-10.
Cost of raw materials for the company, which produces aluminium and copper, rose to Rs47,416 crore in FY11 from Rs38,100 crore in the previous year, PTI reports.
The Hindalco stock dropped more than 2% to Rs192.90 in trade on the Bombay Stock Exchange, as the benchmark Sensex ended 0.19% lower.
"Interest expenses increased from Rs1,104 crore to Rs1,839 crore mainly due to a one-time debt issuance cost related to the refinancing of $4.8 billion at Novelis in December 2010, and consequent higher interest in Q4," the company said.
Net sales, however, rose by 19% to Rs72,078 crore, its highest-ever, compared with Rs60,708 crore in the previous fiscal, on increased volumes and improved prices.
The company's aluminium business recorded a 17% increase, contributing Rs56,084 crore to net sales. The copper business accounted for Rs15,887 crore, up by 26% over the previous fiscal.
Strong Nifty resistance at 5,540, beyond which the rally may continue till 5,600
The market opened in the positive today and looked strong in the first hour, before dipping on successive weak corporate results. The Sensex and the Nifty opened at 18,320 and 5,494 respectively, and hit their intra-day highs at 18,380 and 5,509 in early trade.
But the sentiment changed shortly afterwards and the indices dropped quickly to their lows, after which the market struggled to recover. The Sensex touched an intra-day low at 18,200 and the Nifty at 5,459. At the close, the indices were still in the red; the Sensex down 34 points at 18,232 and the Nifty 3 points lower at 5,473. The advance decline ratio on the National Stock Exchange was 1,049:659
The Nifty's immediate resistance is at 5,540. We expect the market to go up to 5,600 if it is able to cross 5,540 which seems like a struggle right now. The announcement of GDP (gross domestic product) data on Tuesday and a possible diesel and cooking gas price hike this week will affect the near-term market movement.
Higher GDP data may cause the Reserve Bank of India (RBI) to continue its tightening cycle which will again weigh on the markets. RBI will undertake a mid-quarter monetary policy review on 16 June.
The annual monsoon rains have reportedly hit Kerala two days earlier than expected, boosting prospects for a good crop. Good rains would help ease food inflation and boost rural income.
The top five gainers on the Sensex were Cipla (3.55%), Reliance Communications (up 2.94%), DLF (2.58%), HDFC (1.90%), Bajaj Auto (1.03%). While the major losers were Mahindra & Mahindra (5.34%), Hindalco Industries (2.33%), ONGC (1.63%), Tata Motors and Jindal Steel (0.96% each).
Mahindra & Mahindra's (M&M) March 2011 quarter performance was weak. Although sales grew by 28%, the operating profit grew by only 2% over the previous corresponding quarter. M&M says that with both input costs and interest rates rising, the current economic environment is quite challenging. The company expects to rise to this challenge through continuous focus on new product introduction, process innovation and cost control. M&M plans to launch eight new vehicles in FY2012.
Sun Pharmaceutical was the top major gainer on the Nifty (up 4.83%) after good fourth quarter results that came out on Saturday. Sales and operating profit grew by 23% and 18% respectively over the corresponding period a year ago.
Reliance Industries (RIL) dropped 0.70% after reports that it would buy a regassification liquified natural gas (R-LNG) unit from Royal Dutch Shell and Petronet LNG at double the price. The move comes in the wake of shortage of natural gas from its D6 fields in the Krishna-Godavari (KG) basin.
Asian markets were mixed. The Hang Seng, Straits Times and Taiwan Weighted were positive, whereas the other Asian indices ended in red.