Economy
Mumbai Hotel Industry hit by water crisis
Appeals to the Maharashtra Chief Minister to resolve the water supply crisis
 
The hotel industry in Mumbai heavily relies on the water supplied by private tankers, in addition to what it gets from the Brihanmumbai Municipal Corporation. On average, hotels in Mumbai required 50-60 tankers each day to meet its operational needs. However, the Mumbai Water Tankers Association is has now gone on an indefinite strike. As a result, hotel operations throughout the city have been severely affected. Hotels, dependent on tankers, have not received any water supply through tankers for over 24 hours. This is affecting many critical areas, according to industry sources:
 
Fire Safety: Hotels are forced to use the water stored in our fire water tanks to meet operational requirements.
 
Hygiene & Sanitation: Water supply is now restricted for toilet flushing, showers, washbasins, laundry and kitchen usage.
 
Food preparation: Restaurants are being shut down in order to conserve water used in kitchens.
 
Guest facilities: Swimming pools and fitness facilities in hotels have been closed due to lack of water.
 
The industry argues that guests in Mumbai are global citizens and investors with business dealings. Besides, hotels are also committed to hosting many important events and conferences over the next few weeks. The current lack of water supply will cripple the operations. It remains to be seen whether this is high enough in the priority of the state administration given how bad the drought situation is across the state 

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Timber cartels in Himachal causing huge losses, says auditor
Shimla : The cash-strapped Himachal Pradesh State Forest Development Corp Ltd had accumulated losses of Rs.52.75 crore till the end of fiscal 2014-15 due to cartelisation by purchasers, the Comptroller Auditor General of India (CAG) has said.
 
The CAG said the cartels resulted in the loss of Rs.18 crore on sale of deodar alone in the timber surplus state.
 
The corporation incurred continuous losses during the last four years ended March 2015 and its accumulated loss increased from Rs.31.66 crore in 2010-11 to Rs.52.75 crore in 2014-15, according to a CAG report.
 
Commenting on the scale of the losses in the sale of timer, the auditor said the comparison of rates of timber obtained in auction vis-a-vis market rates during 2010-2015 showed differences ranging between 60 and 105 percent which indicated that the corporation is not receiving competitive rates in auctions.
 
Directing the government to go for e-auction to attract more bidders and to counter cartel formations, it said the bidders are currently getting huge margins either due to limited competition or a cartel formation.
 
"Had the attempts been made to realise better sale rates through wide publicity the corporation could have earned additional revenue of around Rs.18 crore on sale of deodar timber only (which constitutes 8.62 per cent of total volume) after allowing a margin of 50 per cent to cover the selling expenses and profit."
 
It said against constant increase in retail sale rates (during 2013-14 the rates were not revised by the corporation) the rates obtained during auction decreased during 2014-15 as compared to the 2013-14.
 
Taking over of uneconomical lots of trees which were in difficult areas in contravention to the guidelines resulted in avoidable loss of Rs.1.52 crore on account of interest on royalty, extension fees and royalty paid on rotten trees, the auditor pointed out.
 
Picking holes in the timber grading, it said only 0.5 per cent was graded 'A'.
 
"There were no checks on the process of classification and potential revenue loss assuming 25 percent wrong classification works out to Rs.71.64 crore."
 
The corporation, which enjoys monopoly in extraction and sale of timber, in its reply to the auditor in October last year said its suggestions and recommendations would be incorporated in the new policy on timber marketing.
 
Himachal Pradesh is a storehouse of biodiversity and is most vulnerable to climate change as the Himalayan glaciers have been retreating due to global warming.
 
According to a Forest Survey of India report of 2011, out of the state's geographical area of 55,673 sq.km, 3,224 sq.km is under very dense forests, 6,381 sq.km under moderately dense forests and 5,074 sq.km under open forests. 
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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Nifty, Sensex weak – Weekly closing report
Nifty will have to stay above 7,800 for the bulls to gain strength
 
We had mentioned in last week’s closing report that Sensex, Nifty were still on an uptrend but that bulls were tiring. We had also mentioned that Nifty should stay above 7,870 for the market to head higher. The markets ended flat on Friday, the closing day of the week indicating that interest rates and fundamentals of shares are likely to be the deciding factors of share price appreciation in the near future, apart from a favourable monsoon. The trends of the major indices during the week’s trading are given in the table below:
 
 
Depressed by negative Asian markets, along with unwinding of long positions, key indices of the Indian equity markets traded in the red during the late-afternoon trade session on Monday. The BSE market breadth was heavily tilted in favour of the bears -- with 1,580 declines and 952 advances. The key Indian indices had ended on a flat-to-negative note during the previous trade session on April 22. Initially on Monday, the indices had opened on a flat note as they were dragged lower by negative Asian markets and a weak close of the US exchanges on Friday. Besides, investors were seen cautious ahead of the US FOMC (US federal open market committee) meet slated for April 27-28. The US FOMC meet assumes significance as it will decide the future course of the US interest rates. 
 
Foreign direct investment (FDI) inflow to India touched a record level of $51 billion during the April-February period of the last financial year, the government said on Monday. "We have had a record inflow of FDI in this country, more than $51 billion from April to February, and that is the highest ever," the Department of Industrial Policy and Promotion (DIPP) Secretary Ramesh Abhishek said here at an event hosted by industry chamber Ficci on intellectual property rights (IPR). Credit rating agency Moody's Investors Service said earlier this month that India's rising FDI inflows help reduce the current account deficit and also the external financing needs.
 
Key Indian stock market indices, which opened lower on Tuesday, surged in the afternoon session following strong global cues. Good buying was observed in metal, auto, realty and banking sectors. There was underlying caution among the investors before the meetings of the central banks of the US and Japan this week. The Fed is expected to keep interest rates unchanged but investors will keep a close eye on the Fed Chair's comments regarding future outlook.
 
Aditya Birla-led aluminium manufacturer Hindalco said on Tuesday it will accept the Australian company Metal X's improved takeover offer for its Australian subsidiary Aditya Birla Minerals Ltd. Metal X has announced its "intention to improve its ongoing takeover offer for acquiring the shares of ABML under the relevant laws of Australia", Hindalco said in a stock exchange filing. Metal X has offered one fully paid ordinary share in Metals X Ltd for 4.5 ABML shares and Australian $0.08 in cash for every ABML share held, it said. "Further, the company (ABML) has informed that Hindalco has communicated to ABML its intention to accept the aforesaid offer subject to receiving the approval of RBI and no bona fide superior proposal being announced by a third party within five business days of Metals X announcing its intention to make the aforesaid offer," the filing added. "Aditya Birla is an underperforming company and its shareholders have seen substantial loss of wealth over the last few years," said Metals X chief executive and managing director Peter Cook. "However, Metals X believes its underground mining experience, technical capability, financial capacity and experience in operating Western Australian mines make Metals X almost uniquely placed to take on the Nifty challenge," he said. Hindalco shares closed at Rs103.25, up 4.93% on the NSE.
 
The logjam in parliament, coupled with caution ahead of US monetary policy review and mixed Asian indices, depressed the Indian equity markets on Wednesday. Consequently, the key indices of the Indian equity markets traded flat on Wednesday. The BSE market breadth was slightly tilted in favour of the bears -- with 1,308 declines and 1,220 advances. Investors were seen cautious ahead of the US FOMC (US Federal Open Market Committee) meet and the Bank of Japan (BoJ) monetary policy review. The US FOMC meet assumes significance as it will decide the future course of the US interest rates. A hike in interest rates is expected to lead away Foreign Portfolio Investors (FPIs) from emerging markets such as India. Besides, the unwinding of long positions ahead of the futures and options (F&O) expiry and the ongoing logjam in parliament dampened sentiments. Investors are worried that the logjam might postpone key economic legislation from getting passed.
 
American credit rating agency Moody's on Wednesday retained India's outlook at 'positive' saying the country's history of double-digit inflation, high government debt levels, weak infrastructure and a complex regulatory regime have constrained its credit profile.
 
Profit booking, coupled with the logjam in parliament and negative global cues, subdued the Indian equity markets on Thursday. The sell-off was accelerated by the decision by the Bank of Japan (BoJ) to maintain the status quo in its monetary policy. This led to key indices of the Indian equity markets closing the day's trade in the red. The BSE market breadth was tilted in favour of the bears -- with 1,672 declines and 854 advances. 
 
The US Federal Reserve said that it will maintain the target range for the federal funds rate at 0.25%-0.5%, but gave little clue on the timing of its next rate hike. The US Labour market conditions "have improved further" even as growth in economic activity "appears to have slowed", the Fed said in a statement on Wednesday after wrapping up a two-day policy meeting, noting that it will continue to "closely monitor" inflation indicators and global economic and financial developments. The Fed currently expects that the US economy will expand "at a moderate pace" and the labour market indicators will "continue to strengthen," according to the statement. The Fed raised its benchmark interest rate by 25 basis points to 0.25%-0.5% in December, the first rate hike in nearly a decade, marking the end of an era of extraordinary easing monetary policy. But the turmoil in financial markets and a slowdown in global economy since the start of the year have raised increasing concerns about the strength of the US economy, forcing Fed policymakers to hold off on any further rate hikes since then.
 
On Friday, the markets ended flat. The markets will be guided by interest rates and corporate earnings and weakness, if any, in the global markets.

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