CCI imposes Rs 1,773 crore fine on Coal India

 
The Competition Commission of India (CCI) has imposed a fine of  Rs 1,773 crore ($290 million) on state-run miner Coal India for abusing its dominant position and imposing unfair conditions in fuel supply agreements with customers.

CCI on Tuesday issued a "cease and desist order" to the state miner and directed it to modify clauses in its fuel supply contracts related to sampling and testing transportation charges and compensation on supply of stones.

Officials at Coal India-the world's largest coal miner by output-were not immediately available for comment.

The company, which accounts for 80 per cent of the country's coal output changed its pricing system last year allowing it to charge higher prices from some customers.

However, it still sells domestic coal at discounts of between 45 and 70 per cent to international prices.

The CCI had launched a probe earlier this year after complaints from state utilities Maharashtra State Power Generation Co. and Gujarat State Electricity Corp against the miner and its units.

Chidambaram seeks Vodafone's views on tax issue in writing: Official

 
Finance Minister P Chidambaram has asked UK-based Vodafone Group, which is facing a tax liability of over Rs 11,200 crore in India, to give its view on the long-pending matter in writing, a senior official said on Tuesday.

"Finance Minister P Chidambaram has asked Vodafone to give its view on the tax matter in writing," said the Finance Ministry official.

Vodafone Group Plc's Chief Executive Vittorio Colao had met Chidambaram last week.

The British telecom major is facing a tax liability of over Rs 11,200 crore, along with interest, on its 2007 acquisition of Honk Kong-based Hutchison Whampoa's stake in Indian telecom major Hutchison Essar.

The government had proposed a non-binding conciliation to the telecom major to sort out the tax dispute.

Although the company had been expressing its keenness to reach an amicable settlement with regard to the tax issue, there were differences over the rules under which the dispute should be taken up.

While the British telecom major has indicated its preference to conciliation under the United Nations Commission on International Trade Law, India has proposed settlement under the Indian Arbitration and Conciliation Act.

The Supreme Court last year had ruled in Vodafone's favour, saying the British company was not liable to pay any tax over its 2007 acquisition of mobile phone assets in India.

The government, however, changed the rules to enable it to make retroactive tax claims on already-concluded deals, drawing criticism from global business groups.

Following amendment to the I-T Act of 1961 last year, the Income Tax Department had issued a letter in January to Vodafone International Holdings BV stating that the company was required to pay the tax.

Vodafone replied, saying that they DID not owe anything to the Indian Government. Vodafone earlier wanted to take India to international arbitration but later offered conciliation on the issue.

Indian rupee rises 28 paise to 2-month high at 61.13 against US dollar

 
The Indian rupee surged to its highest level in nearly four months in intra-day trade and fell back to close with a 28 paise gain at 61.13 against the dollar today, boosted by stocks that climbed to a record after BJP won three out of four state assembly elections.
Support for the Indian rupee also came as foreign investors continued to buy local stocks and exporters sold dollars.
At the interbank foreign exchange market, the rupee commenced sharply higher at 60.90 a dollar from the previous close of 61.41 and immediately touched 60.84, a four-month high, on the back of a strong rally in local stocks.
The gains were trimmed and the local currency dropped to the day's low of 61.21 on dollar demand from importers before closing at 61.13, a two-month high. Previously, the rupee had touched an intra-day high of 60.45 on August 12, and it had closed at 61.07 on October 11.
"The recent gains in the currency are mainly attributed to the assembly elections. BJP, which is widely seen by investors as being more business friendly, swept recent state elections. Dollar weakness also continued to contribute to the gains in the rupee," said Abhishek Goenka, CEO of India Forex Advisors.
The benchmark 30-share S&P BSE Sensex rose for the third straight session, adding 329.89 points, or 1.57 per cent, to a record closing of 21,326.42. Overseas investors bought shares worth Rs 863.77 crore on Friday, according to provisional data with the stock exchanges.
The dollar index, consisting of six major global rivals, was down by 0.03 per cent.
"The Sensex and the Nifty rose to a record high today as main opposition party BJP won in three out of four key state elections," said Pramit Brahmbhatt, CEO of Alpari Financial Services (India). "Investors welcomed the party open heartedly as it is widely seen as more stable and business friendly under the leadership of Narendra Modi."
Forward dollar premiums improved further on sustained payments from banks and corporates.
The benchmark six-month forward dollar premium payable in May edged up to 249-251 paise from 248-250 paise previously and far-forward contracts maturing in November inched up to 486-488

Govt aims to garner Rs 18,000 cr from PSU disinvestment

The government will garner about Rs 18,000 crore from seven approved disinvestment in public sector units and an Exchange Traded Fund (ETF). The government expects to raise Rs 500 crore from Engineers India, Rs 5,000 crore from Indian Oil, Rs 3,000 crore from Hindustan Aeronautics, Rs 1,000 crore from RINL and Rs 2,000 crore from NHPC. Besides, a 5 per cent stake sale in BHEL is expected to fetch Rs 2,000 crore and 4 per cent in Power Grid would garner Rs 1,500 crore to exchequer, Minister of State J D Seelam said in a written reply in the Lok Sabha. The Cabinet Committee on Economic Affairs (CCEA) has cleared the proposals of disinvestment all the seven companies, Seelam added. Besides, the CCEA has also created setting up of a CPSE ETF with a corpus of Rs 3,000 crore. In the current fiscal, the government plans to raise Rs 40,000 crore by way of disinvestment. So far in current fiscal it has realised only Rs 1,325 crore through stake sale in six companies.

Indian economy sees positive change in growth momentum: OECD

Indian economy is seeing a tentative positive change in momentum while most of the major economies are witnessing improved growth prospects, Paris-based think tank OECD said on Monday. Besides India, China and Russia too are showing similar trends. "In the emerging economies, the CLIs point to growth around trend in Brazil and to a tentative positive change in momentum in China, Russia and India," OECD said. The Organisation for Economic Cooperation and Development (OECD ) is a grouping of mostly developed nations. The latest conclusions are based on its Composite Leading Indicators (CLIs), that are designed to anticipate turning points in economic activity. India registered a higher-than-expected economic growth of 4.8 per cent in the September quarter, helped by better agriculture and factory output. In the June quarter, GDP expansion had touched a four-year low of 4.4 per cent. According to OECD, India's CLI in October stood at 97.6 unchanged from the previous month. The level was the same in July and August as well. "CLI for Canada indicates a positive change in momentum. In the US, the CLI points to growth around trend. In the euro area as a whole, in France and in Italy, the CLIs continue to indicate a positive change in momentum," OECD said.