AP govt to issue notice to HPCL over fire in Vizag refinery

Hyderabad: The Directorate of Factories of Andhra Pradesh will be seeking an explanation from the Vizag facility of the state-owned Hindustan Petroleum (HPCL), on the recent fire in the refinery-cum-petrochemical complex there, which left 24 workers dead, a senior official said today.

According to G Bala Kishore, Director of Factories, the department is investigating into the blaze following which they will issue a notice to the facility seeking an explanation for the accident.

"Notice is yet to be served. Investigation has to be completed. We are short of details. After we come to know the facts of the case, we will issue notices," Kishore told PTI, adding that they will also look into the safety measures undertaken by the facility.

"The nature of accident is intriguing. They (HPCL management) will have to give us a clarification. Based on their reply to our notice, we may seek Government permission to prosecute them," the official added.

On August 23 a massive fire broke out at the sprawling HPCL complex in Vishakhapatnam, when mostly staffers from private companies were at work.

Prima facie, a gas leak in the sea cooling water system was attributed to the fire even though probe is on into the incident.

Besides Vishakhapatnam, (East Coast) with a capacity of 8.3 Million Metric Ton Per Annum (MMTPA), HPCL operates another refinery in Mumbai (West Coast) with a capacity of 6.5 MMTPA.

HPCL currently operates two major refineries producing a wide variety of petroleum fuels and specialities.

Meanwhile the Vizag Refinery which is currently operating at 50 percent capacity after the fire mishap is expected to take some more time to scale up to full of its capacity, HPCL Executive Director VVR Narasimham said.

Mutual funds witness Rs 50,000 cr outflows in July

New Delhi: Investors pulled out a net amount of more than Rs 50,000 crore from various mutual fund schemes in July -- the highest outflow in five months.

The huge pull-out of funds during July followed a net withdrawal of Rs 48,403 crore in the preceding month, taking the total outflows for two consecutive months to close to Rs one lakh crore.

As per the latest data available with market regulator Securities and Exchange Board of India (Sebi), the net outflow of Rs 50,067 crore during July was the highest withdrawal by investors in mutual fund (MF) schemes in a single month since March, when investors had redeemed Rs 1.08 lakh crore.

This has left the MFs' net mobilisation of funds from investors so far in the current fiscal (April-July) at about Rs 45,539 crore.

Mutual fund is an investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets.

At gross level, mutual funds mobilised Rs 7.8 lakh crore in July, but also witnessed redemption worth Rs 8.27 lakh crore -- resulting into a net outflow of Rs 50,067 crore.

This has brought down the total assets under management of mutual funds to Rs 7.6 lakh crore as on July 31, from Rs 8.11 lakh crore in the previous month.

The BSE's benchmark Sensex plunged by 232 points, or 1.2 percent, during the period under review.

"During the financial year 2013-14 so far (April-July), mutual funds net mobilised Rs 45,539 crore as compared to Rs 1,33,976 crore mobilised in corresponding period of 2012-13," Sebi noted.

In the entire fiscal 2012-13, mutual funds had garnered Rs 76,539 crore from investors while a net amount of over Rs 22,000 crore moved out of the mutual funds' kitty during the preceding year.

PTI

G20 Summit: PM leaves for St.Petersburg

New Delhi: Prime Minister Manmohan Singh on Wednesday left for St.Petersburg to attend the eighth G20 Summit during which he is expected to push for a coordinated plan to avoid disruption in India and other large developing economies by imminent phasing out of fiscal stimulus by US Federal Reserve.

While the dispute between Russia and the US over the conflict in Syria is likely to overshadow the two-day summit starting tomorrow in the Russian city, splits between emerging markets and the US over its winding down of stimulus and the slowing growth of India and other four BRICS countries are expected to remain in focus.

Brazil, India, Russia, China and South Africa--grouped in the informal BRICS bloc seen as an alternative economic powerhouse--all go into the meeting experiencing slowing growth, embattled currencies and huge capital outflows.

In a statement before leaving for the Summit, Singh called for an "orderly exit" from unconventional monetary policies being pursued by the developed world for the last few years to avoid damaging growth prospects of the developing world.

Singh, who has attended all the previous G20 summits since the first meet in Washington in 2008, is due to return home on Saturday evening.

Raghuram Rajan unveils big initial package, promises more

Mumbai: New RBI Governor Raghuram Rajan Wednesday came out with a slew of measures, including more trade settlement in rupees to rescue the battered financial markets and hinted at a shift in focus from inflation control, doggedly pursued by his predecessor, to boosting growth.

Shortly after he took over as the 23rd Governor of the central bank, Rajan, 50, addressed the media with a prepared statement in which he laid out a detailed road map for his innings in the short term, which he called a "big initial package."

He also rescheduled by a few days the date for his much-anticipated first monetary policy statement to September 20.

The new Governor set up a number of committees for revising and strengthening monetary policy framework, financial stability, financial inclusion, NPAs and an outside panel of experts headed by former Governor Bimal Jalan to screen applications for new bank licenses.

Rajan said the new bank licences will be issued around January next year.

Apparently reflecting a shift in the approach from his predecessor D Subbarao, who had serious differences with the government of late, Rajan said the primary role of the bank is monetary stability to sustain confidence in the value of the rupee.

"Ultimately, this means low and stable expectations of inflation, whether that inflation stems from domestic sources or from changes in the value of the currency, from supply constraints or demand pressures.

"...But we have two other important mandates; inclusive growth and development, as well as financial stability," he said.

Asked about Subbarao's focus on targeting inflation, Rajan said he would reserve his comments till September 20.

Rajan said the bunch of reforms has been unveiled today to enhance growth.

"I think there are so many low-hanging fruits in the economy that if we only pluck them we can accelerate growth substantially."

The former IMF chief economist and economic advisor to the Finance Ministry said there were some positive developments in the economy which will help to boost growth.

The measures disclosed to support the rupee include liberalisation of the financial market by enhancing the limits for exporters to re-book cancelled forward exchange contracts and opening a special concessional window for swapping foreign currency non-resident (FCNR) deposits and dollar funds.

"My sense is that we certainly don't need false optimism. But I think there is good reason to believe that in the medium run, the future of the country is strong," he said.

Asked about Standard and Poor's downgrade threat, he said the international rating agency "nearly reiterated what has been its long standing claim about there being one-third possibility of a rating downgrade...It is not something new. So I won't read too much into the statement."

The measures announced by Rajan include enhancing the re-booking limit on cancelled forward exchange contracts for exporters to 50 percent, extending a similar facility to importers and introducing cash settlement in 10-year interest rate future contracts to develop the money and G-sec markets.

Rajan indicated the RBI will take steps to reduce the Statutory Liquidity Ratio (SLR) and introduce greater regulatory and supervisory control over the domestic operations of foreign banks. He promised to give freedom to banks to open branches without prior RBI permission.

The new RBI chief also said he will steadily liberalise the markets and lift restrictions on investment and position-taking, together with SEBI, and will examine introduction of interest rate futures on overnight interest rates.

While the RBI has enhanced the re-booking limit on cancelled forward currency contracts to 50 percent for exporters, importers will be allowed a 25 percent limit.

The central bank will push for more trade settlements in rupees and open up the financial markets for those who receive rupees to invest it back in.

Rajan said the RBI will raise the overseas borrowing limit of 50 percent of unimpaired Tier I capital to 100 percent for banks and will introduce cash-settled 10-year interest rate future contracts.

The central bank will also examine introduction of interest rate futures on overnight interest rates; steadily but surely liberalise markets, restrictions on investments and position-taking; and issue inflation-indexed savings certificates tied to CPI to retail investors by end November.

He stressed on the need to reduce the requirement for banks to invest in government securities in a calibrated way and will push foreign banks to set up wholly owned subsidiaries.

Rajan proposes to collect credit data, examine large common exposures among banks and encourage banks to clean up their balance sheets.

Referring to the announcements, he said, "This is a part of my short-term time-table for the Reserve Bank. It involves considerable change, and change is risky. But as India develops, not changing is even riskier. We have to keep what is good about our system, of which there is a tremendous amount, even while acting differently where warranted."

He also announced a committee headed by RBI Deputy Governor Urjit Patel to strengthen monetary policy framework. The panel will submit its report in three months.

Rajan said that a committee under former Governor Bimal Jalan would screen bank license applicants after an initial compilation of applications by the RBI staff.

He said new bank licences will be announced "within, or soon after, the term of Deputy Governor Anand Sinha, who has been shepherding the process. His term expires in January 2014."

Financial sector expert Nachiket Mor will head a panel to suggest steps to promote financial inclusion. Another committee, to be headed by Deputy Governor K C Chakrabarty, will take a close look at rising NPAs and suggest steps to improve the recovery of bad debts.

"While the resumption of stalled projects and stronger growth will alleviate some of the banking system difficulties, we will encourage banks to clean up their balance sheets and commit to a capital-raising program where necessary. The bad loan problem is not alarming yet, but it will only fester and grow if left unaddressed," Rajan said.

Stressing that India is a fundamentally sound economy with a bright future, the new RBI chief said, "Our task today is to build a bridge to the future, over the stormy waves produced by global financial markets. I have every confidence we will succeed in doing that."

DBT for LPG to be extended to 289 districts by Jan 1

New Delhi: After the success of the pilot programme in 20 districts, the scheme to pay domestic cooking gas (LPG) consumers cash subsidy will be extended to 289 districts in the country by January 1.

Under the scheme, Rs 435 is deposited in bank accounts of household LPG consumers in advance so as to help them purchase a 14.2-kg LPG cylinder at market price, which is more than double of Rs 410 per bottle rate in Delhi.

The moment the refill is bought, the subsidy prevalent on that day will be credited to Aadhaar-linked bank account of LPG consumer for another cylinder. In all, cash subsidy is provided for nine refills in a year under the Direct Benefit Transfer for LPG (DBTL) Scheme.

An official statement said DBTL has been extended to 34 districts like West Godavari in Andhra Pradesh, West Goa, Shimla in Himachal Pradesh, Kottayam in Kerala, Hoshangabad in Madhya Pradesh, Amravati in Maharashtra and Ludhiana in Punjab.

"Government has decided to extend the DBTL Scheme in 235 more districts by January 1, 2014 in phases depending on Aadhaar penetration. With this roll out, almost half the country, covering 289 districts, will get covered," it said.

The DBTL in 54 districts currently covers 21.9 million LPG consumers and as much as Rs 222 crore subsidy has been transferred through 5.3 million transactions into the bank accounts of the LPG consumers so far.

"In order to avail transfer of cash subsidy into the bank account, Aadhaar number of the LPG consumer has to be linked to the LPG consumer number and bank account for which a three months grace period from date of launch is being provided," the statement said.

A three month grace period has been given to get Aadhaar number and link it with their bank accounts. After the grace period, only consumers with Aadhaar number-linked bank accounts will get cash subsidy, it said.

By January, almost all the state capitals will be covered under the scheme. This would mean more than half of the 14 crore LPG consumers in the country will come under DBTL. An estimated Rs 27,000 crore will be transfered to consumers through DBTL in a year.

The statement said during the grace period all consumers will continue to get LPG cylinders at subsidised rate. After the grace period is over, all LPG consumers have to pay for LPG cylinders at market rate. Linkage via Aadhaar number is required for the transfer of cash subsidy.

"Thus, only those who have linked their Aadhaar numbers to both their bank account and LPG consumer number will be able to receive cash subsidy in their bank accounts. After the grace period is over, consumers will receive cash subsidy as and when they link their Aadhaar numbers for the balance entitlement," it said.

From next month, 44 districts including Vizag in Andhra Pradesh, Chandigarh, Ambala in Haryana, Kinnaur in Himachal Pradesh, Ranchi in Jharkhand, Udupi in Karnataka, Lakshadweep, Bhopal and Indore in Madhya Pradesh, Nagput and Thane in Maharashtra, Amritsar and Bathinda in Punjab, Ajmer in Rajasthan and Ariyalur in Tamil Nadu will be covered.

In the Phase-VI from November 1, 46 districts including Daman, Faridabad in Haryana, Dhanbad in Jharkhand, Uttara Kannada in Karnataka, Dewas in Madhya Pradesh, Pune in Maharashtra, Puri and Cuttack in Odisha, Yanam in Puducherry, SAS Nagar (Mohali) in Punjab, Udaipur in Rajasthan, Madurai in Tamil Nadu and Kolkata in West Bengal.

From December 1, 40 districts including Porbandar in Gujarat, Karnal in Haryana, Bangalore in Karnataka, Ujjain in Madhya Pradesh, Kolhapur in Maharashtra, Firozpur in Punjab, Jaipur in Rajasthan, Cuddalore in Tamil Nadu and Hugli in West Bengal will be covered.

In the last phase beginning January 1, 105 districts including nine in Delhi, Ahmedabad in Gujarat, Gurgaon in Haryana, Belgaum in Karnataka, Gwalior in Madhya Pradesh, Mumbai, Jodhpur in Rajasthan, Thanjavur in Tamil Nadu, Lucknow in Uttar Pradesh and Murshidabad in West Bengal will be covered.