Economy
S&P hails reforms, but says no change in rating outlook now

S&P said its views of April, when it downgraded India's outlook to negative, and of June, when it used strong words for actions by policy- makers to avoid a downgrade to junk status, remain unchanged

 
Mumbai: Ratings agency Standard & Poor's (S&P), which in June had threatened to downgrade India's sovereign ratings to junk status, on Monday welcomed big-ticket reform measures by the Government over the weekend, saying the steps would serve as a medium-to-long term positive for the macroeconomic conditions, reports PTI.
 
"If the measures proposed by the Government are implemented, we would expect a medium-to-long-term positive impact on the macro-economy," Takahira Ogawa, Director for sovereign ratings at S&P said in a note.
 
The agency, however, maintained that its views of April, when it downgraded the country's outlook to negative, and June, when it used strong words for actions by policy- makers to avoid a downgrade to junk status, remain unchanged.
 
In a string of bold initiatives, the Government, accused of a "policy paralysis", first announced a steep 12%, or Rs5 per litre, increase in the regulated diesel prices on Thursday and a cap on subsided cooking gas usage.
 
The next day, it followed this up with a liberalisation of foreign holding caps in the aviation, multi- brand retail, non-news broadcast media and power exchanges. It also announced a plan to divest its stake in five companies.
 
In the note, Ogawa raised questions over the efficacy of these measures. "We believe that the Government's recent announcement on foreign direct investments is an encouraging development, but at this stage it is still uncertain whether these measures can be implemented or nor." 
 
He specifically pointed out to the liberty given to a particular state whether it wishes to adopt the changes in the multi-brand retail FDI or not.
 
"Hence, the actual impact from this measure might be less than expected," he said on FDI in multi-brand retail.
 
Similarly, the proposed divestment of PSUs, he said, "depends on the actual implementation of the plan."
 

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Tata Motors unveils six heavy duty trucks; says diesel hike concern for truckers

Noting that there is a lot of competition in the transport business, Tata Motors said, though transporters are concerned about the steep hike in diesel prices, their ability to pass this on to clients depend on the market

 
Mumbai: India's largest vehicle maker Tata Motors on Monday said the recent steep diesel price hike is a matter of concern for transporters but termed the move as a significant part of the reform measures essential for the economy, reports PTI.
 
"Transporters are very concerned; it is a large increase on a single day. But their ability to pass on the hike to their clients would depend on the market. If it remains the way it has been in the first half, it would be difficult," Ravi Pisharody, executive director for commercial vehicles at Tata Motors told reporters after launching six new heavy trucks.
 
Noting that there is a lot of competition in the transport business, he said it is the load factor that makes the industry viable.
 
"They are looking at that. If the load factor goes up as we are seeing some improvement particularly in September and the government's reform agenda picks up steam, then there will be an increase in transportation of goods which will in turn lead to investment in infrastructure and the resultant increase in load factor," he said.
 
He said that Tata Motors expects a 15-20% surge in its commercial vehicles sales in the second half over the first half and pointed out that traditionally the second half is stronger, particularly the last quarter.
 
"However, for the full year, we are likely to end up with slight decline in the MCV and HCV sales," he said.
 
The company launched six new heavy and medium trucks and an intelligent vehicle and driver management solution called Tata FleetMan Telematics Services.
 
The top-end version of the Tata Prima range has now been further extended with the launch of two new engine capacities of 380HP & 230HP.
 
The company did not give the price details of any of the new models.
 
To a equation on price increase for the commercial vehicles, Pishrody said there is no plan at least for the next two-three months as the company has already revised the prices in the first and second quarters.
 

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High Court asks BCCI to maintain status quo on Deccan Chargers

The Bombay High Court directed to maintain status quo and said no further action can be initiated against Deccan Chargers team till the next hearing

 
Mumbai: In a minor relief to the beleaguered Deccan Chargers, the Bombay High Court on Monday directed the Board Of Control For Cricket In India (BCCI) to maintain status quo regarding the termination of the Indian Premier League (IPL) franchise, owned by Deccan Chronicles Holdings Ltd, reports PTI.
 
Deccan Chronicles had approached the High Court on Saturday challenging the decision taken by BCCI in Chennai on Friday at its emergency IPL Governing Council meeting to terminate the contract of the cash-strapped Deccan Chargers.
 
According to Deccan Chronicles petition, the decision of BCCI was illegal and bad in law. It further sought for interim relief from the High Court to stay the termination on the grounds that BCCI was already planning to invite tenders for the team from Hyderabad.
 
BCCI, however, informed the High Court that it was not inviting tenders for Deccan Chargers team.
 
"The BCCI intends to invite tenders for new teams for cities like Ahmedabad, Vizag (Visakhapatnam) and Coimbatore. No new tenders are going to be called for Deccan Chargers now," the affidavit stated.
 
Justice SJ Kathawalla today posted the matter for further hearing on 24th September and directed for status quo to be maintained and no further action to be initiated against Deccan Chargers team.
 
According to BCCI, it had made every effort to save the beleaguered franchise which also rejected the sole bid that was received at the auction held in Chennai on 13th September.
 
"BCCI was compelled to hold an emergency meeting of the IPL governing council late Friday evening to discuss certain developments due to Deccan Chargers' default," Board Secretary Sanjay Jagdale had said in a press release.
 
Jagdale had further stated that the governing council took note of the sudden change by the franchise and also the fact that any further extension of time would seriously jeopardise the interests of the players.
 
Deccan Chronicles Holdings had received a bid of Rs900 crore by PVP Venture Capitals but surprisingly chose to reject it at the auction as it considered the price and terms unsuitable.
 

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