General insurers told to restrict motor tariff discount at 20%

FE reports

In a further twist to tale in the detariffing drama in the domestic general insurance industry Insurance Regulatory & Development Authority(Irda) has asked the general insurers not to reduce premium beyond 20 % for motor (own damage) portfolio for next six months.

The regulator while approving the new rates of the general insurers for the detariffing period starting from January 1 has directed the general insurers to seek special permission from the regulator if the rate of discount is more than 20 %.

``The insurers have to justify their demands by giving supporting data for giving a higher discount,’’ said the Irda note to insurers.

Government may offer export subsidies to check sugar prices

FE reports

The government is likely to intervene if sugar prices continue to fall, a senior government official said on Tuesday.

The government may offer export subsidies once the exports are liberalised further and may also offer cane price subsidies to stabilise prices and help companies to pay the farmers, the official said. "Prices have been falling consistently and the outlook going forward remains the same. It is a matter of concern now, the Centre may have to intervene," the food ministry official told NewsWire18. He said falling sugar prices could lead to non-payment of cane prices by companies, which would hurt the farmers' interest.

Sugar prices have been falling consistently and are now over Rs 200 per 100 kg lower than last year's levels. Experts attribute the fall to a possible glut in the country in wake of a bumper sugar output, at over 23 mt, expected in 2006-07 (Oct-Sept). The country produced 19.3 mt of the sweetener in 2005-06. In June, wholesale prices in northern region had topped Rs 2,000 per quintal, while retail prices had touched a high of Rs 2,500 per quintal.

The government had then banned white sugar exports in a bid to check supplies, curb soaring prices and tame inflationary pressure.

Govt will bear additional power cost burden: Andhra CM

BL reports

The Andhra Pradesh Chief Minister, Dr Y.S. Rajasekhara Reddy, on Monday said that the additional burden created on the power sector due to purchase of power from Central generating stations and other utilities would not be passed on to the consumer.

Speaking to reporters here Dr Reddy assured that the Government would "beg, borrow or steal" if necessary for purchase of power and it was not contemplating any hike in power tariff to bridge the gap due to additional purchases.

We will charge the tax payers instead.

CMs form cartel to ban iron ore exports

FE reports

Chief ministers of mineral-bearing states are forming a pressure group to press their demands. As a prelude to the formation of such a group, chief ministers of three states , Chhattisgarh, Jharkhand and Orissa, met here last week and deliberated on various issues relating to minerals like iron ore, bauxite, chromite and coal.

The meeting resolved that there should be a complete ban on iron ore exports and that coal-bearing states should be empowered to levy tax on power generated at the coal pithead for export purpose. It also suggested that at least 12-20% power from generating stations be allotted to the mother states at concessational rates.

Sell-off agenda on the back burner

FE reports

With the ruling DMK government, which came to power in May 2006, making it unequivocally clear that it would not privatise or disinvest the government's holdings in any profit-making state public sector enterprise (PSE) in its election manifesto, it is curtains for the disinvestment process in the state.

The previous government had taken a few steps to close down or disinvest in PSEs. However, the current government, according to sources, is toeing quite a different line. It wants the profit-making PSEs to be put on a fast growth track and at the same time, it is trying to revive still viable, but loss-making units, through strategic alliances or fresh capital infusion.

Even though the earlier government had set the divestment ball rolling by identifying a handful of PSEs for potential privatisation or closure, the process was grounded due to political compulsions. According to available industry information, the state had 59 PSEs with a total investment of Rs 6,192 crore. Of this, over 33 units were identified as loss-making or sick.

Govt seeks more control over pricing of drugs

BS reports

A new pharmaceutical policy, moved by Chemicals Minister Ram Vilas Paswan for Cabinet approval, aims at bringing 34 per cent of all drugs marketed in the country under price control.

It aims at slashing the average market prices from 10 to 30 per cent for low-end brands and from 30 to 60 per cent for high-end ones.

A proposal to check the prices of patented medicines and select medical devices through government-industry talks has also been made.

The proposals, if cleared, would make way for government control over 17,000 specific formulation packs worth around Rs 7,000 crore, industry sources said.

The proposal for more price control, which has been vehemently opposed by the industry, came after the ministry decided to go by a Supreme Court (SC) order asking the ministry to formulate appropriate criteria to ensure that essential and life-saving drugs did not “fall out” of price control.

GSM, CDMA oprs, BSNL oppose ceiling on roaming tariff

New Delhi, Jan 1. (PTI): Telecom regulator TRAI's move to fix a new ceiling on roaming tariffs is being unilaterally opposed by State-run BSNL as well as private GSM and CDMA operators, as they want market forces to determine the rates.

Roaming tariff should be under forbearance and market forces should determine the tariff, officials of BSNL, GSM industry body COAI and CDMA operators association AUSPI said ahead of TRAI's open house tomorrow to review roaming rates.

In fact, there should not be any ceiling on incoming or outgoing national calls. There is forbearance in mobile tariff as there is enough competition in the mobile service segment, the same should be applied to roaming services as well, a BSNL official said.

While BSNL's is buttressing its argument, saying that roaming service is in itself not a 'market', but is a mere mechanism to connect a customer who is out of the home network, the CDMA and GSM operators hold the view that TRAI's interference on micro-management of tariffs is unnecessary on this front.

Cellular Operators Association of India (COAI) said the tariff offered under different packages for different services like rental, local call charges, NLD, roaming and SMS charges are decided based on the overall ARPU (average revenue per user) under each tariff package.

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