Fuel price cut

BL reports

State-owned oil marketing company Indian Oil Corporation Ltd (IndianOil) said on Wednesday that it was facing an extra burden of Rs 8 crore per day due to recent fuel price cut. "We are losing an additional Rs 8 crore a day on sale of petroleum products after the recent price cut. Our total revenue loss per day is now close to Rs 53-54 crore," Mr Sarthak Behuria, Chairman and Managing Director, IndianOil, said.

The Government reduced prices of two petroleum products - petrol and diesel - by Rs 2 per litre and Re 1 a litre on November 29. The company is losing Rs 2.1 per litre on sale of diesel, Rs 132 per cylinder on cooking gas, and Rs 13.81 per litre on sale of kerosene. However, the company is making a profit of Rs 1.67 a litre on sale of petrol while it was about Rs 4 per litre prior to the price cut.

What happened to Rangarajan Committee report (pdf)?

Builders want more regulation in steel and cement

BL reports

The 22nd All India Builders Convention, which concluded here recently, called for establishment of an independent Ministry of Construction as the construction activity, with major thrust on infrastructure, being the key to achieve double-digit economic growth.....

Under free economy, consolidation in cement and steel industry has gathered momentum, resulting in "unfair, monopolistic trade practices detrimental to the construction industry," a press release said. A resolution called for establishment of a Steel Regulatory Authority and a Cement Regulatory Authority on the lines of SEBI, IRDA and TRAI.

How lobbying starts

BS reports

Even as the government is mulling an umbrella legislation to block investments on security grounds from other countries, 32 Chinese firms in India have come together to form the Chamber of Chinese Enterprises in India (CCEI), which will lobby for Chinese commercial interests here.

The chamber, set up recently in the capital, is the initiative of the Embassy of the People's Republic of China and headed by Hongsen Wang, managing director, Sino Steel India Pvt Ltd.

The formation of this chamber is also relevant in the context of complaints from China on discrimination against Chinese companies by the Indian government.

Sources in Sino Steel India said the chamber would work for the interests of Chinese enterprises and promote high-level business and political talks between the two sides. Currently, there are around 50 Chinese companies in India.

The CCEI will help Chinese companies resolve trade problems with the Indian government.

"It will help Chinese enterprises in appearing as a collective entity and the chamber will represent the companies’ interests to the Indian government," sources said.

According to Ficci Secretary General Amit Mitra, the formation of the Chinese chamber indicated the increasing presence of Chinese companies in India.

An interesting space to watch. (Remember Adam Smith quote here)

Doing business with India

BL reports

The Supreme Court has ordered the Union Government to allow export of pulses by two firms, which were refused permission to send their consignments on the grounds that a ban had been imposed on such shipments from July 22.

Dismissing an appeal by the Centre against rulings of the Gujarat and Delhi High Courts, a bench comprising Mr Justice S.B. Sinha and Mr Justice Markandey Katju, said any prohibitive order promulgated by statutorily could only have prospective effect.

The bench, however, said the Delhi High Court order declaring a notification issued by the Centre on July 4 as ultra vires, was not sustainable. The July 4 notification permitted export of pulses for which irrevocable letter of credit had been opened before June 22, when the ban was decided to be imposed.

Contracts

The case relates to contracts for export of 415 tonnes of pulses signed by Asian Food Industries and for shipment of 3,000 tonnes of chickpea by Agri Trade India Services Ltd, which won a tender floated by the Trade Corporation of Pakistan.

Asian Food had received orders from the Gulf and executed contracts between April 22 and May 2. It also received 20 per cent of the contract amount totalling $2,94,942 as advance for supplying pulses. As per the contract, it had to ship 107 containers, of which 20 were sent between June 22 and 24. The rest were to be sent from Kandla Port between June 23 and June 26.

However, as the Centre took a decision to ban pulses export on June 22 and issued a notification on June 27. This led to the port authorities refusing to allow the consignments despite being cleared by the Customs authorities.

Permission refused

Subsequently, the Centre came up with a notification on July 4 allowing exports of contracts for which the LC were opened before June 22.

Though Asian Food took up the issue with various authorities, it was refused permission resulting in the firm moving the Gujarat High Court. The High Court in its order said the shipments should be allowed as the Customs authorities had cleared and permitted loading of the goods on the ship. Moreover, the bill of lading had also been filed.

In the other case, Agri Trade signed an irrevocable letter of credit on June 24 and on June 2, it filed invoices with the Customs authorities. But again, Kandla port authorities said they would not allow the shipment in view of the ban. A writ was then filed in the Delhi High Court, which asked the authorities to permit the shipment.

It's not difficult to see why a ban should only come to effect prospectively. Forcing people to break the perfectly legal contracts they entered into won't do any good for a country's reputation. Wonder why it's more difficult for some to see that it's equally bad for a government to force people not to get into some contracts in first place.

Tariff

FE reports:

Lavin also said, although India had lowered its peak tariffs to 12.5%, average tariffs at 34% were still very high. Moreover, there were some products on which duties were more than 100%. In comparison, the US had average customs duties of just 4%, he said.

Corporate rivalry at play in Singur: CPM

FE reports:

The CPI-M on Monday hinted that corporate rivalry could be behind the recent land acquisition row in Singur where the Tatas are planning to set up their ambitious Rs 1 lakh small car project.

Without naming any company in particular, CPI-M leader Sitaram Yechury set the cat among the pigeons by saying there could be more than meets the eye for the motivation to turn the Tatas’ land acquisition process into a raging controversy. “There may be some whose interests would be hurt when the Rs 1 lakh car comes out. It is for the media to find out who could be behind all this,” Yechury said.

For the record, Yechury refuted the charges that farmers were getting a raw deal, asserting that the “highest level of compensation” was being granted. Comparing the deal with similar ones in Maharashtra, Yechury pointed out that CIDCO paid only about Rs 24,000 an acre in the state, while Singur farmers were getting Rs 8.4 lakh an acre for single-crop land and around Rs 12 lakh for multi-crop land.

Don't know how true this is. But who knows!

Tasting anti-dumping duty medicine

Being a victim often offers better perspective. FE reports:

Shrimp exporters have questioned the very relevance of the anti-dumping duty imposed by the US in the wake of latest reports of payouts of around $100 million by the US government to its domestic shrimp industry.

A major part of the payouts under the Byrd law of distributing revenues from dumping duties collected, exporters said quoting US reports, will go to a select few big firms, making the whole issue of dumping a farce.

According to analysis, around 60% of the money would go to 20 top seafood firms, they said. This would mean that a large section of the industry there would have very little benefit from the whole exercise of imposition of anti-dumping duty to ‘protect’ the domestic industry.

Of course, India leads the world in using anti-dumping measures.