Finance Ministry want ailing banks, insurers out of CCI purview

Finance Ministry has asked Corporate Affairs Ministry to exempt ailing insurance and banking firms from the scope of Competition Act

New Delhi: The Finance Ministry has asked Corporate Affairs Ministry to exempt ailing insurance and banking firms from the scope of Competition Act, Parliament was informed, reports PTI.
The Competition Act, 2002 does not provide exemption to any sector, including banking, from its ambit.
"The Department of Financial Services has approached this Ministry (Corporate Affairs) for granting exemption to loss making and failing organisations in the insurance sector and the banking sector from the purview of Competition Act, 2002," Minister of State for Corporate Affairs RPN Singh said in a written reply to the Rajya Sabha.
However, no such specific communication has been received from the Department of Telecommunications (DoT) seeking exemption in telecom sector, he added.
He was replying to a question on whether government was deciding to bring all sectors, including telecom and banking, under the ambit of Competition Commission of India (CCI).
To resolve conflict between regulators, he further said, "in the proposed Draft National Competition Policy, a Cabinet Committee on Competition has been proposed to inter-alia to look into conflicts between regulators".
The draft policy is at a consultation stage at present, Singh said.
The CCI is empowered by sections 3 and 4 of the Competition Act, to check anti-competitive practices and abuse of dominant position.


Economy & Nation Exclusive
Protection Vs power

The country needs power urgently and in a large scale but if the indigenous equipment makers cannot meet the requirements, the government will have to relax the rules for greater imports
In the last few years, China has made great strides into the Indian electrical equipment market at the cost of indigenous makers, due to price, delivery and varying performance of such imported goods.
The Arun Maira Committee, after a detailed study on the effect of such imports on the Indian manufacturing scene, had recommended that importers of these power equipments need to pay a 14% duty. Now, BP Rao, chairman and managing director of BHEL has categorically stated that this quantum of duty is not adequate enough to protect the local industry to survive and develop.  He has further contended that the actual net effect of protection in real terms is less than 5% and therefore not sufficient.
He has not spelt out what exactly he needs, but, perhaps increasing the duty to 20% from the current 14% may give a brief relief!
Leading Indian companies, who have plans to generate their own power, like Adani, Jindal and Reliance have sourced their requirements for their plants from Chinese suppliers like Dong Fang, Harbin and Shanghai Electric, due to price and delivery considerations. So far, the Chinese supplies have also not caused any major concerns in terms of performance.
So, with the continued order position from India and other importers, China has been able to improve its quality, increase production capacity and equipments have performed reasonably satisfactorily.
Indian manufacturers need to have full government support to perform by increasing their production capacity apart from qualitative improvement in performance. They need to match if not surpass Chinese equipment in every way so that Indian power generators and users give a ‘preferential’ treatment for makers like BHEL.
In a separate development, BHEL-associated projects in Tamil Nadu have made good progress.  The North Chennai Thermal Power Project is likely to go on stream in October with the second unit slated to start in December this year. Also, the Vallur 1000MW plant is ready to commence power generation soon and its second unit a little later, though they have not specified the date.
Even the Tamil Nadu Electricity Board-Neyveli Lignite Corporation Tuticorin 1200 MW plant is progressing smoothly, and BHEL is the main equipment supplier.
However, BHEL’s project with the Tamil Nadu government, for setting up two units of 800MW plants at Udangudi has not got off the ground, though it was signed in 2007, apparently due to some issues and the later having decided to go on its own despite entreaties from BHEL. In fact, the Tamil Nadu government had accused BHEL for “lack of cooperation”, details of which were not made public, presumably because of the fair amount success achieved elsewhere by BHEL.
It is imperative that the government seriously reconsiders the element of protection for the domestic industry, and raises the import duty element from 14% to possibly 20% as the first step.

Second would be to pull up all the power equipment manufacturers for not only increasing their capacity but to introduce latest technology to compete with China effectively. The country needs power urgently and in a large scale but if the indigenous makers cannot meet the requirements, the government will have to relax the rules for greater imports.

(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce and was associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US. He can be contacted at [email protected].)


DLF sells 17 acres of Mumbai land to Lodha for about Rs2,700 crore


Lodha Developers would pay Rs1,200 crore to DLF and take over liabilities of around Rs1500 crore incurred by DLF unit Jwala at the NTC Mill property in Worli since 2005
New Delhi: In a big-ticket land deal, realty company DLF has sold 17 acres of prime land in Mumbai to Lodha Developers for about Rs2,700 crore, nearly four times higher than the price at which the company had bought this parcel seven years ago in 2005, reports PTI.
DLF had bought the land from National Textile Corporation for Rs703 crore. The company decided to sell this piece of land as part of the strategy to exit from non-core business.
"Lodha Developers has entered into a binding agreement to acquire DLF's wholly-owned subsidiary Jwala Real Estate, which is the owner of the strategic 17-acre Mumbai textile mill property at Worli," Lodha said in a statement.
"The acquisition is for a consideration of Rs1,200 crore for both equity and debentures of the company. In addition, Lodha is also expected to take over about Rs1,500 crores of liabilities that Jwala has incurred for the development since it purchased the property from NTC in 2005," it added.
The valuation of DLF's land is lower when compared with Indiabulls' deal in 2010 for 8.39 acre of NTC land for Rs1,580 crore.
"The acquisition is 3-4 times cheaper than deals recently done by other real estate players. At a cost of Rs5,000 per sq ft, this land acquisition gives Lodha significant competitive advantage to build a mixed-use development over 5 million sq ft at the prime location of Worli," Lodha said.
With this current deal, DLF has raised nearly Rs8,000 crore from sale of non-core-assets (hotel plots and IT SEZs/ Parks) in the last couple of years. The divestment proceeds are largely utilised to reduce net debt, which stood at Rs22,680 crore as on 30th June.
DLF, the country's largest realty firm, has also put on block two other major non-core assets -- luxury hotel business Amanresorts and wind energy -- and expects about Rs3,000 crore from these two deals.



David N

5 years ago

Lets hope the deal will not go the way of BPTP or RMZ Corp which bought big ticket items and are now facing legal action from PE investors! If Lodha were also to bring in equity from PE players it could face music since market is not so rosy to build and sell quickly.

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