Rubber replantation subsidy may be hiked to Rs 24,500/ha

BS reports

The Central subsidy for replanting rubber is likely to be enhanced to Rs 24,500 a hectare in the 11th Plan period against Rs 20,000 in the previous Plan.

The finance committee of the government is yet to approve the hike in subsidy and an announcement to this effect is expected soon. The subsidy, when enhanced, would work out to 25 per cent of the per hectare development cost.

Earlier, the Rubber Board had proposed a rise in the subsidy to Rs 30,000 a hectare, but the government had asked to reduce it to the lowest because of a spurt in prices in the last couple of years.

The board had also proposed to enhance the subsidy for new plants to Rs 24,500 a hectare. But, it is not likely to happen and the subsidy for new plants is set to remain at Rs 12,000 a hectare.

The government considers that the recent spurt in prices are an encouraging factor for growers and sees no justification in a steep increase in the subsidy.

Semiconductor companies want more subsidies

BS reports

Last month, the Union Cabinet gave in-principle approval to the policy, which included a combined 25 per cent subsidy and tax incentives on the capital expenditure in the first 10 years of a fabrication plant.

However, the subsidy component is now being examined by a Group of Ministers owing to the huge financial implications involved. The Centre has announced that the policy will be out before the budget.

“We are seeking one-time investment to support semiconductor manufacturing. We are urging the government to set aside Rs 10,000 crore for this purpose. Three years down the line, this sector will pay back Rs 40,000 crore through revenue and employment opportunities,” Khare contends.

He pitches for semiconductor manufacturing strongly based on three factors — the demand for electronic products in the country, the ecosystem and international market dynamics.

Cartels, entry barriers & limited players spoil Indian banking: CCI | FE

FE reports:

According to government sources, in a presentation made suo motu to three deputy governors of the central bank recently, the CCI pointed out that during the last 10 years, the RBI had given licences to only two private banks - Yes Bank in May 2004 and Kotak Mahindra Bank in February 2003. During the same period, however, other sub-sectors like insurance and mutual funds had seen 24 and 14 new players, respectively.........

Strict licensing norms for branches and automated teller machines and restrictions on locations had created high entry barriers, the CCI pointed out. Further, it hinted at banks working as a cartel under the Indian Banks’ Association banner in setting interest rates for savings account deposits at 3.5%.

Walmart, Reliance and Kirana shops

Surjit S Bhalla writes in BS

Thankfully, technology changed and the world became flat. Which meant that politicians, across the world, had less and less influence on the activities of individuals in the service of themselves (aam aurat is too aam to be selfless like the Gods). So the economies started to grow, and this further diminished the size, and the effectiveness, of the Bombay Club.

But old habits die hard; most likely because people are loath to let go of “unearned” profits. It is in this context that some of the major initiatives of the UPA government have to be viewed. Let us start with the most blatant of them all—the recent missive by Ms Sonia Gandhi, the political leader of the government. She has been “reading in the media about Wal-Mart’s proposed entry into India … the desirability to first study the possible impact of ‘transnational supermarkets’ on the livelihood security of those engaged in small-scale retail operations … you may consider having the relevant issues properly examined before further decisions are taken” (emphasis in the original Sonia Gandhi letter to the PM). This gentle reminder to the PM has put protection of the poor aam fruit- and vegetable-selling aurat as the top concern of this government. Economic reforms (globalisation) have only helped the rich. Time for aam aurat to have her day. Such a nice government you say. Let us elect them again (provided they have electorally correct sleeping partners).

But wait a minute. Nowhere in this high command directive is mention made about big Indian businesses entering the retail trade of selling “fruits, vegetables and the like”. Last I heard Reliance had entered the fruit- and vegetable-selling market, and even by international standards, Reliance is Big Time Big. So how does the Reliance entry into the retail trade not hurt your kirana shopkeeper but Wal-Mart does? Sorry, one never gained an answer by asking logical questions from our “in the name of the poor” politicians.

Government unlikely to accept South Indian tea growers’ plea

FE reports

The Central government is unlikely to consider the demand of the South Indian tea growers seeking higher amount for tea replantation and rejuvenation on par with Darjeeling, jeopardising the proposed replanting exercise under the Special Purpose Tea Fund expected to take off from April.

Union minister of state for commerce Jairam Ramesh told FE he had received requests from some quarters in the South, including United Planters Association of South India (Upasi), for hiking the present subsidy limit and also raising the amount from Rs 2.73 lakh per hectare as proposed for Darjeeling. But the centre was unlikely to make changes in the present plan and things would go ahead as proposed, he said.

Sick fertiliser units to get Rs 1k crore | FE

FE reports

Board for Reconstruction of Public Sector Enterprises (BRPSE) has given its nod to revive closed fertiliser units of Fertiliser Corporation of India (FCI) and Hindustan Fertiliser Corporation (HFC).

The proposal will be forwarded to the Cabinet within a fortnight. A senior official at the Department of Fertilisers (DOF), however, said efforts would be made to bring back eight plants of the two companies through public sector participation if the present plan does not work. Expression of interest would also be invited from private sector players, he added.

Orissa to set up venture capital fund for IT firms

BS reports

Taking a leaf out of Karnataka, Orissa is exploring the possibility of setting up a Venture Capital Fund (VCF) for small and medium IT enterprises in the state.

This is in line with plans to set up a National Venture Capital Fund (NVCF) for IT SMEs, which is currently pending with the Planning Commission.

The Karnataka government has already set up a VCF with the Small Industries Development Bank of India (SIDBI) with a corpus of Rs 15 crore to promote the Software Technology Parks of India (STPI). Known as the country's silicon valley, Karnataka is the first state to accept the NVCF proposal and has become a role model for other states.

Currently, Orissa STPI has a catalogue of 100 registered IT/ITeS companies, of which only five per cent are in the big league and the remaining are IT SMEs. State STPI officials said they were aware of the NVCF formation proposal and are already making efforts to establish a state venture capital fund (SVCF).

With whose money? Why?