Tata Motors moves Supreme Court on Singur land issue

The automaker approached the apex court as the Calcutta High Court had on Monday refused to pass an interim stay order observing that the Tata Motors petition had no specific statement as to when the process of land distribution would start

New Delhi: Tata Motors today approached the Supreme Court challenging the Calcutta High Court order refusing its plea to restrain West Bengal government from distributing land to farmers in Singur, reports PTI.

The petition was mentioned before a vacation bench comprising justices P Sathasivam and AK Patnaik which posted the matter for hearing on Wednesday. The bench accepted the plea of Tata’s counsel to file the petition later in the day.

The counsel submitted that the company is seeking a direction for the state government not to create third party interest in the land.

The Calcutta High Court had yesterday refused to pass an interim stay order observing that the Tata Motors petition had no specific statement as to when the process of land distribution would start.

The high court had noted the petitioner had submitted that if the prayer was not allowed and land distributed, the original petition challenging the Singur Land Rehabilitation and Development Act, 2011 would become infructuous.

Tata Motors had moved an ex-parte petition seeking stay on distribution of land expressing apprehension that it would be given back to ‘unwilling’ farmers within a day or two.

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Cairn agrees to lower Vedanta deal value by Rs3,800 crore

Cairn Energy will sell its 40% stake in its Indian arm to Vedanta at Rs355 per share instead of Rs405 a share agreed in August last year. It will now get gross proceeds of Rs27,007 crore (about $6.02 billion) instead of Rs30,811 crore ($6.84 billion) it was initially expecting

New Delhi: In the first indication of Cairn Energy Plc’s willingness to accept government’s conditions for selling its Indian unit to Vedanta Resources, the Edinburgh- based firm yesterday agreed to lower the sale price by over Rs3,800 crore, reports PTI.

Cairn Energy will sell its 40% stake in Cairn India to Vedanta at Rs355 per share instead of Rs405 a share agreed in August last year. It will now get gross proceeds of Rs27,007 crore (about $6.02 billion) instead of Rs30,811 crore ($6.84 billion) it was initially expecting.

“Cairn and Vedanta have agreed to certain adjustments to the transaction sale and purchase agreement for the sale of part of Cairn Energy Plc’s shareholding in Cairn India, involving the removal of the non-compete arrangements and associated fee,” the two firms said in separate statements.

The Scottish explorer has for the past 10 months denied need for government approval to what it called a corporate transaction. It also rejected both the requirement of nod and pre-emption of partner Oil and Natural Gas Corporation (ONGC), which holds stake in 8 out of 10 properties of Cairn India including the crown-jewel Rajasthan block.

The government has refused to give its approval to the deal which was initially valued at $9.6 billion (including the mandatory open offer Vedanta Group had to make to minority shareholders of Cairn India) unless Cairn agreed to the requirement of partner consent.

Cairn and its successor have to agree to making royalty ONGC pays on entire crude output from Rajasthan despite owning only 30%, as recoverable from sale of oil. ONGC had cited provisions of the contract months before the deal was announced, to demand that royalty be made cost recoverable.

A Group of Ministers (GoM) headed by finance minister Pranab Mukherjee last month decided to make cost recovery of royalty and Cairn India agreeing to pay Rs2,500 per ton cess on its 70% share in Rajasthan as preconditions for the government consent for the deal.

Both the conditions had material impact on the deal and Cairn Energy on Monday announcing that it is willing to forego Rs50 per share non-compete fee it was charging Vedanta, indicated its willingness to accept these conditions for the sake of the deal.

The GoM’s recommendations are to go to the Cabinet Committee on Economic Affairs for approval later this week.

Cairn said the transaction will now take place in two tranches: Cairn Energy will sell 10% out of its 62.2% stake in Cairn India by 11th July and another 30% upon receipt of the government approval.

But will selling a 10% stake without government permission not violate production sharing contract (PSC) is to be seen.

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Inflation a major problem for Indian economy: FM

Finance ministry Pranab Mukherjee, addressing a meeting of Indian and American corporate leaders, think-tank members and policymakers in Washington said, “We do not believe, one is to be dispensed for the other. Yes, we can have a moderate rate of inflation and at the same time, reasonable developed growth. The monetary and fiscal policy must move in tandem. In India, we are doing so”

Washington: Finance minister Pranab Mukherjee on Monday said inflation poses a major challenge to the Indian economy and projected that the rate of inflation is going to be more than 6.5% this year, reports PTI.

“There are problems (with the Indian economy) and one of the major problems is inflation,” Mr Mukherjee said, addressing a meeting of Indian and American corporate leaders, think-tank members and policymakers at a conference on the ‘US-India Economic and Financial Partnership’ jointly organised by the Confederation of Indian Industry (CII) and Brookings Institute, a Washington-based think-tank.

“Inflationary pressure is putting a serious constraint,” said the finance minister, who arrived in Washington on Monday leading a high-powered Indian delegation for the second India-US Economic and Financial Partnership discussions being held here.

“We do not believe, in theory, one is to be dispensed for the other. Yes, we can have a moderate rate of inflation and at the same time, reasonable developed growth. The monetary and fiscal policy must move in tandem. In India, we are doing so,” he said.

“Therefore, in the short term, I would like to emphasis that in India, the growth potential is there. The rate of saving and rate of investment is reasonably high. The various structural reforms which we have undertaken and which will come in course of time, that will ensure that investment-friendly environment which can attract investment from various parts of the world,” he said.

Referring to concerns expressed by various quarters about undesirable blips in economic data from time to time, Mr Mukherjee said, “Sometimes questions have been raised, particularly looking at a figure in a short campus of time.

(For example) Whether foreign institutional investment (FII) in the current financial year is slowing down. Every year, the first quarter FII investment slows down, particularly in equity. But in the later part of the year, it makes up. This is not in one year, but year after year. Therefore, we need not be unnecessarily overly worried.”

Inflation, Mr Mukherjee reiterated, is an important constraint to India’s economic growth, which the government has to tackle.

“To be very frank, what shall be acceptable and what can be a tolerable level of inflation is very difficult to define.

But in our economy, we feel that if we can keep the inflationary pressure within 5% to 6%, it could be ideal, but we can live with 6% to 6.5%,” he said.

“This year I do hope it will be a little more, not because of near supply constraints on the agricultural front, which was one of the major reasons for inflationary pressure of the previous and current year, which we have substantially addressed by taking appropriate measures,” he said.

“But international commodity prices, including food and fuel, is causing severe constraints,” he said.

“The food prices have started coming down. We have taken steps very recently. And have reduced subsidy burden by adjusting the price of oil and also providing relief to the consumers by doing away with central taxes and appealing to provincial governments to reduce their taxes on petroleum and petroleum products. I do have hope that it will have some impact. But this is going to be a major problem and it would have its impact on the overall growth scenario,” Mr Mukherjee said.

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