Telecom minister Kapil Sibal had asked the Department of Telecom (DoT) to evolve guidelines to reduce the element of its discretion while deciding penalty for violation of licence conditions and make the process as scientific as possible
New Delhi: No more penalties will be levied on telecom operators till reasonable procedure is evolved, telecom minister Kapil Sibal has said, a move that will give big relief to the industry, reports PTI.
“I have passed an order that no fine will be imposed henceforth till such a time we evolve reasonable procedures for imposition of fine. If the government fines Rs50 crore, then people will go to court, nothing comes to the government, not useful for anybody,” he said at an award function of a popular business television news channel.
Mr Sibal had asked the Department of Telecom (DoT) to evolve guidelines to reduce the element of its discretion while deciding penalty for violation of licence conditions and make the process as scientific as possible.
As of now, the DoT has been levying maximum penalty of up to Rs50 crore for all cases of violations of licence conditions.
Mr Sibal said irrespective of whether penalty was imposed or not, there would be complaints filed against the department.
“...If somebody does not impose penalty... complaint will be filed where they will say look you have been bought over by such and such person...When files come to me, if I reduce penalty, then complaint will be filed that the minister has been bought,” he said.
“So in this environment, don't blame the government alone ...there is an environment of suspicion...in that context it is difficult for a bureaucrat to deliver,” he added.
Mr Sibal’s reply came in response to telecom czar Sunil Mittal’s question asking the government to take a balanced view of maximising revenues and industry’s well-being.
“...My department has the right to impose penalty and it goes from Rs0 to Rs50 crore. It is always Rs50 crore...I have written to officials in my ministry to decide, write reason for record, why penalty should be Rs50 crore” Mr Sibal said at the function in Mumbai.
“And therefore, you must evolve guidelines to decide what the penalty should be for violation of rules.... Let the government evolve the guidelines,” he added.
The minister had earlier said “mindless imposition of maximum penalty in each particular case would send a wrong message to the industry and dampen the fragile environment”.
It would be needless litigation and delay in realisation of penalty, the minister had said.
“A sharp downward revision in the forecast for the mining index from 4.4% to 3.2%, manufacturing sector from 7.5% to 6.9% and electricity from 9% to 8.7% has led to a further decline in our GDP forecast for this fiscal from 7.9% earlier to 7.8%,” CMIE said in its monthly report
Mumbai: Leading research firm Centre for Monitoring Indian Economy (CMIE) has scaled down its gross domestic product (GDP) forecast by a notch to 7.8% for this fiscal from the earlier forecast of 7.9%, reports PTI.
“A sharp downward revision in the forecast for the mining index from 4.4% to 3.2%, manufacturing sector from 7.5% to 6.9% and electricity from 9% to 8.7% has led to a further decline in our GDP forecast for this fiscal from 7.9% earlier to 7.8%,” CMIE said in its monthly report here.
Earlier, the Reserve Bank of India (RBI) had also reduced its forecast for real GDP growth sharply from 8% to 7.6%.
Rating agency Crisil has also revised its growth estimate from 7.7%-8% to 7.6%.
“The data releases continue to bring in news of an economy that seems to be in trouble. The index of industrial production growth has slowed down to 2%-4% and the wholesale price index-based inflation growth has remained riveted to 9.5% in spite of sustained efforts by the RBI to rein in inflation by raising interest rates,” the agency cited as its reasons for the sharp downturn in the economic growth.
“The persistent fall in the IIP (Index of Industrial Production) and the high inflation rate almost seem to suggest that the economy is headed towards stagflation,” it warned.
However, this is clearly refuted by the robust growth in sales of companies, which grew by a handsome 25% in the first half of the year.
Sales of manufacturing companies adjusted for inflation indicates that the IIP under-estimates growth in the manufacturing sector by about 33%. In the first half, the real sales of manufacturing companies grew by about 9%, indicating robust demand for industrial goods, it pointed out.
Profit margins of the corporates have declined because of an increase in raw material cost and interest rates, but these are still robust and way above the low margins seen in the years 1999 to 2002, the report said, adding the net profit margin of the listed non-finance companies fell to 6.4% in June 2011, but between March 1999 and December 2002 they never touched 6%.
The performance of the corporate sector is sharply at variance with what the two principal official statistics- the IIP and the inflation seem to indicate, CMIE said.
Growth in corporate sales indicates that consumption demand continues to grow well. Kharif sowing this year was higher than last season. Agricultural production is expected to grow by 2.9% after a robust 6.6% growth last year. This again, indicates robust domestic consumption demand in FY 11-12, CMIE said.
The lack of availability of coal has pulled down the mining index and has also led to thermal projects getting delayed. This has pulled down the electricity generation forecast. Consequently, the outlook for industrial growth has moderated substantially, CMIE stated.
Out of the 30-Sensex firms, 19 companies have witnessed a decline in their respective foreign institutional investors (FIIs) holding, while in the remaining 11 stocks, foreign fund houses have consolidated their stakes during the July-September quarter of current fiscal compared to preceding (April-June) quarter
New Delhi: Overseas investors have scaled down their exposure in 19 Sensex companies, including RIL (Reliance Industries), Tata Motors and SBI (State Bank of India), during the second quarter amid rising concerns of economic slowdown and weakening of the rupee, reports PTI.
Out of the 30-Sensex firms, 19 companies have witnessed a decline in their respective foreign institutional investors (FIIs) holding, while in the remaining 11 stocks, foreign fund houses have consolidated their stakes during the July-September quarter of current fiscal compared to preceding (April-June) quarter, according to data available with the Bombay Stock Exchange (BSE).
However, FIIs have increased their stakes marginally in 16 Sensex firms during the June quarter this fiscal and reduced exposure in the remaining 14 companies.
Market analysts attributed the decline in FII holding to challenging macro-economic conditions and weakening rupee.
“FIIs are shying away from the Indian firms on concerns of macro economic conditions and depreciating rupee," CNI Research CMD Kishor Ostwal said.
Interestingly, metal companies such as Hindalco Industries, Tata Steel and Jindal Steel & Power (JSPL), country’s largest lender SBI and drug firm Cipla have witnessed maximum reduction in their FII holdings.
In contrast, FIIs increased their holding in auto stocks such as Mahindra & Mahindra, Maruti Suzuki, Hero MotoCorp and Bajaj Auto. However, Tata Motors was an exception to this category.
The FII holding in Hindalco fell from 30.83% to 28.24% at the end of the July-September quarter and during the same period, FII shareholding in Tata Steel declined from 17.06% to 14.61%.
In addition, foreign fund houses’ stake in JSPL fell from 23.03% to 21.88%. Besides, SBI has seen a plunge of overseas investors’ stake by 2.23 percentage points to 8.65% during the second quarter of financial year 2010-11.
Drug maker Cipla saw a fall of 1.16 percentage points to 13.57% and FII stake in Tata Motors dropped by 1.1 percentage points to 21.88%.
On the other hand, overseas investors have consolidated their stake in Mahindra & Mahindra by 2.8 percentage points Hero MotoCorp by 1.13 percentage points, Maruti Suzuki by 0.54 percentage points and Bajaj Auto by 0.13 percentage points.
FIIs shed its holding in country’s most valued firm RIL by marginally 0.05 percentage points to 17.32% in the second quarter of current fiscal.
Meanwhile, the barometer index Sensex crashed by 2,392 points or 13% in the second quarter to close at 16,453.76 at the end of September.
Mirroring the volatility in the global economy, FIIs were not very consistent while investing in the Indian market. In July, they invested a hefty sum of Rs8,030.10 crore in the equity market and again infused Rs485.40 crore in August. In September, they pulled out Rs158.30 crore, according to the data of the stock market regulator Securities and Exchange Board of India (SEBI).
The rupee started tumbling after the downgrade of the US credit ranking in August 2011, amid a real threat of Greece defaulting on its sovereign debt.
The value of the domestic currency versus the dollar slid from 44.40 per dollar in July to Rs45.50 in August, 47.60 in September and 49.30 in October. It touched an all-time low of 52.73 last week.
Other blue-chip firms where FIIs have reduce their stake are—Sterlite Industries by (0.93 percentage points), Bharti Airtel (0.45 percentage points), Jaiprakash Associates (0.73 percentage points), Hindustan Unilever (0.65 percentage points) and ICICI Bank (0.44 percentage points).
Further, FIIs shed stakes in BHEL, Coal India, Infosys, Wipro, Larsen & Toubro, Tata Power and NTPC.
Apart from the 30-Sensex firms, FIIs have cut their exposure to the three listed Indian air carriers—Jet Airways, Kingfisher Airlines and SpiceJet—amid concerns over escalating operational costs because of high crude oil prices, weakening rupee and other factors.
However, overseas investors increased their stakes in DLF, HDFC, HDFC Bank, ITC, ONGC, Sun Pharma and TCS.