The FSDC sub-committee, which is headed by RBI chief D Subbarao, is scheduled to meet on 8th December. The agenda for the meeting includes “creation of a framework for decision-making involving the agencies that will be involved in the decision-making process, with clearly defined responsibilities and a mechanism for information exchange and coordination”
New Delhi: A high-level Finance Stability and Development Council (FSDC) panel will firm up a crisis management framework to deal with the impact of global financial problems at its meeting in Kolkata later this week, reports PTI.
“We will discuss the Financial Stability Report and decide steps to deal with the global crisis,” said a senior finance ministry official ahead of the meeting of the Finance Stability and Development Council (FSDC) sub-committee.
The FSDC sub-committee, which is headed by Reserve Bank of India (RBI) governor D Subbarao, is scheduled to meet on 8th December. The panel includes the heads of regulating agencies like the Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority (IRDA), Pension Fund Regulatory and Development Authority (PFRDA) and finance ministry officials.
According to sources, the FSDC will also discuss various scenarios with regard to the sovereign debt crisis in Eurozone countries and the possible steps to neutralise the impact of global problems on India.
The agenda for the meeting includes “creation of a framework for decision-making involving the agencies that will be involved in the decision-making process, with clearly defined responsibilities and a mechanism for information exchange and coordination”.
The effort, sources said, would be to develop a mechanism to deal with “sudden shocks” in the balance sheets of financial institutions, which could be on account of natural or man-made crises. The institutions would include banks, non-banking financial companies, mutual funds, primary dealers, merchant bankers and pension funds.
At its earlier meetings, the FSDC sub-committee had asked the regulators to make an assessment of the impact of the sovereign debt crisis on the Indian financial system.
With worsening of the sovereign debt crisis in Europe, especially in countries like Greece and Italy, it has become imperative for India to develop a framework to deal with the problems as the government is not in a position to provide a stimulus to boost growth.
Finance minister Pranab Mukherjee had recently said, “I am not in a position to provide that level of fiscal stimulus which I was able in 2008-09, but certain policy changes can improve the situation a little bit, which we are doing.”
According to RBI deputy governor Subir Gokarn, “In recent weeks, the macro-economic environment has become particularly turbulent. Global conditions have contributed to a significant rebalancing of portfolios as a result of rapidly changing risk perceptions and appetites.”
“This has led to increased instability and volatility in financial markets, particularly currency markets... While overall macroeconomic conditions may cause concern, we need to take an integrated and forward looking view of positive and negative indicators and future risks while thinking about appropriate policy responses,” he said.
ONGC, which partners Cairn India in its crown jewel oilfields in Rajasthan and seven other properties in India, has waived its pre-emption rights over the deal and has given a no-objection certificate, paving the way for conclusion of the $8.71 billion deal in the next few days
New Delhi: State-owned explorer Oil and Natural Gas Corporation (ONGC) has given a no-objection certificate (NOC) to British oil firm Cairn Energy’s sale of a majority stake in its Indian unit to Vedanta Resources, paving the way for conclusion of the $8.71 billion deal in the next few days, reports PTI.
ONGC, which partners Cairn India in its crown jewel oilfields in Rajasthan and seven other properties in India, has waived its pre-emption rights over the deal and has given a no-objection certificate, sources privy to the development said.
The board of ONGC had in September agreed to waive its pre-emption rights if Cairn India gave a written undertaking to share royalty and pay its share of oil cess on crude oil produced from the Rajasthan fields.
ONGC, being the licencee of the Rajasthan block, pays 20% royalty on not just its share of production, but also on the 70% share of Cairn India. It wanted this payment to be treated like other project costs and taxes and recouped from revenues earned from oil sales, a demand opposed by Cairn India.
Cairn India also felt the Rs2,500 per tonne oil cess was a liability of the licencee and was opposed to deviating from the signed contract to share any of this burden.
However, the firm’s current and future promoters, Cairn Energy and Vedanta, ordered it to accept the twin demands, which the government had made a precondition for giving its nod to the $8.71 billion deal.
Sources said the legal document, wherein Cairn India as well as its current and future promoters commit to accepting the conditions, was held up for two months over minor technicalities, but was signed a few days ago, after which ONGC gave its NOC.
The home ministry had on 25th November given security clearance to a Vedanta takeover of the operations of India's biggest onland oil discovery in more than two decades and other properties of Cairn India.
The two approvals complete the last of a long list of formalities and conclusion of the Cairn-Vedanta deal is likely to be announced within days, they said.
Cairn Energy had in August last year announced the sale of its 40% interest in Cairn India to Vedanta.
After much debate, the Cabinet Committee on Economic Affairs (CCEA) in June this year agreed to give approval to the deal subject to Cairn Energy and its successor agreeing to pay oil cess on Cairn India’s 70% stake and make royalty payments on the Rajasthan fields cost-recoverable.
The CCEA had also made the deal conditional on security clearance of Vedanta, as well as ONGC waiving its so-called pre-emption rights.
Meanwhile, Vedanta said in a statement that it “has now satisfied the conditions under the Sale and Purchase Agreement for the acquisition of a controlling stake in Cairn India”.
It added, “Vedanta and Cairn Energy Plc are working towards the closing of the Transaction and a further announcement will be made in due course.”
Cairn Energy said in a separate statement: “As previously announced, Cairn intends to return a substantial proportion of the proceeds from the sale to shareholders. A further announcement in this respect will be made in due course.”
The company said it will retain about 22% shareholding in Cairn India after the Vedanta transaction.
The delay has been attributed to various reasons including delivery schedule of certain components from Russia and the ongoing protests in Kudankulam against the nuclear power plant
New Delhi: The delay in commissioning of two nuclear power plants at Kudankulam has led to escalation in cost to the tune of Rs2,653 crore, reports PTI.
The approved completion cost of the Kudankulam Nuclear Power project was Rs13,171 crore, officials said.
“The completion cost is now expected to be Rs15,824 crore and the project is expected to be completed in 2012-13,” they added.
The delay has been attributed to various reasons including delivery schedule of certain components from Russia and the ongoing protests in Kudankulam against the nuclear power plant.
The total expenditure on the project till September this year has been Rs14,122 crore.
As per the original plan, the first unit was to be commissioned in December 2007, which was revised to mid-2010.
This was further revised to September 2011 when the anti-nuclear protests broke out in Kudankulam.
The first Inter-Governmental Agreement for setting up two 1000MW light water reactors was signed between India and the erstwhile USSR in 1988.
A supplement to the agreement was signed with the Russian Federation in 1998. The ground breaking for the Kudankulam project took place in September 2001 and the first pour of concrete took place in March 2002.
NPCIL and Russia’s Atomstroy Export formally inked a deal for building two more civil nuclear reactors of 1,000MW each at Kudankulam last year.
A total of 12 Russian nuclear power reactors are expected to come up in India of which six would be built between 2012 and 2017.