Top bankers hail work of outgoing RBI Governor D.Subbarao

RBI Governor D Subbarao demits office on September 4, after being at the helm for five years that saw the beginning of the global recession from which it is yet to recover

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Mumbai, Sept 2:  

Top bankers have hailed the contributions of the outgoing Reserve Bank Governor Duvuuri Subbarao saying he did his best during a tenure that was marked by difficult times for the economy.

“I think the Governor’s (five year) term has been in one of the most difficult environments globally and domestically.

“If you look at the world and our country today, there is so much change that you have to be at your feet and I can’t imagine anybody else doing a better job (than Subbarao),” Axis Bank Managing Director and Chief Executive Shikha Sharma said.

Subbarao demits office on September 4, after being at the helm for five years that saw the beginning of the global recession from which it is yet to recover.

Within a fortnight of him assuming office, global investment bank Lehman Brothers filed for bankruptcy and the hit pulled the global banking system down to an unprecedented credit crisis which eventually led to the worst recession since the Great Depression.

This was followed by a difficult period which saw RBI working in close coordination with the government and other financial sector regulators, as also other central banks, to ring-fence the economy.

While the fiscal and monetary stimuli ensured that the economy did not fall off cliff, this soon gave way to a spike in inflation. This saw rise in policy rates from October 2010 for a year or so even as growth started coming down.

As Subbarao’s term moved close to ending, worries over slowing growth and stubborn inflation complicated the matter for the central bank. His problems got compounded with the fall of the rupee beginning May-end. It declined to a low of 68.85 intra-day to the dollar early last week.

“I’ve the highest respect for him. He has been through difficult times and let’s put it this way: in hindsight, it’s very easy to judge anybody...I do believe he did a great job,” Aditya Puri, who heads the second largest private lender HDFC Bank, said.

“One thing that has not been fully talked about during his tenure is that he has reduced CRR and SLR by 4 percentage points, which to my mind, in a tenure of five years is very significant,” said Pratip Chaudhuri, the chairman of the country’s largest bank State Bank of India.

Chaudhuri, who favoured doing away with CRR, added that its reduction was one of the reasons for the economic buoyancy during early part of Subbarao’s stint.

“To some extent, the buoyancy which we saw in the economy in the previous two years, could be attributed to that,” Chaudhuri said

ICCR spent ‘unauthorised’ Rs 8.5 cr on sending 34 delegations to 70 nations: CAG

Such cases of unauthorised expenditure were found in the case of tours led by well-known dance, music and theatre and folk artistes.

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New Delhi, Sep 3:  

If you thought taxpayer money was flowing only into dull and drab sectors such as coal, mining among others, think again. The Indian Council of Cultural Relations (ICCR) spent an “unauthorised” Rs 8.15 crore on sending 34 delegations to 70 countries during 2009-10 to 2011-12.

A report by the Comptroller and Auditor General (CAG) on autonomous bodies, tabled in Parliament on Tuesday, found that that in several cases, the ICCR had split the estimated expenditure to avoid obtaining requisite approvals. As per the delegation of financial powers of the council, expenditure beyond Rs 15 lakh requires approval of its president.

However, the ICCR followed a practice of “splitting expenditure to avoid obtaining approval of the president, ICCR, during approval of budget estimates”, the audit report found.

For instance, two separate estimates of Rs 14.73 lakh and Rs 23.21 lakh were submitted for a tour to China in April 2012 by the 38-member theatre group led by Ratan Thiyam. Similar cases of splitting expenditure were found in the case of tours led by well-known dance, music and theatre and folk artistes, such as L Subramaniam, Ila Arun, Penaz Masani, Tanushree Shankar, Uma Sharma among others.

The CAG report also found that the council was not following Government instructions that officials should only travel by Air India.

During 2009-12, ICCR incurred 98.32 per cent expenditure on air travel by airlines other than Air India, the report said.

It also noted that the ICCR, which is under the administrative control of the Ministry of External Affairs (MEA), had opened three Indian Cultural Centres and was in the process of opening another eight without the Ministry’s approval. Also, it was operating the posts of Director, ICC, in various countries without requisite sanction by the Finance Ministry.

The CAG report noted that in the absence of guidelines for appointment of external directors, the ICCR had taken ‘arbitrary’ decisions. It quoted the instance of appointment as directors of three journalists and an academic, “who were working for different private agencies and their pay was fixed as per their earning in the private sector.”

Also, the council incurred significant expenditure on procurement of services by private firms, such as SEHER, Modern Stage Service Pvt Ltd, etc., without following general financial rules.

The ICCR was set up in 1950 to establish, revive and strengthen cultural relations with other countries.

With Rs 7 lakh cr investment in limbo, Gujarat has lowest implementation growth

Ahmedabad, Sept 3:  

Gujarat has recorded the lowest investment implementation rate as only 46 per cent of the total investment projects in the western state are under implementation while the rest remained non-starter as of March 2013, apex industry body Associated Chambers of Commerce and Industry of India (Assocham) said on Tuesday.

"Of the total investment proposals worth over Rs 13.7 lakh crore attracted by Gujarat as of March 2013 from various public and private sources, about 54 per cent worth over Rs 7.4 lakh crore remained non-starter," according to an analysis of investments carried out by Assocham.

In Gujarat, over 40 per cent of investment projects are in the announcement stage alone while implementation of six per cent has been stalled due to various reasons and there is no information of about eight per cent of projects.

With 82 per cent of investment projects under implementation, Haryana has recorded the highest rate of implementation of investments amid industrialised states in India.

Jammu and Kashmir (81.4 per cent), Punjab (79 per cent), Assam (72 per cent) and Chhattisgarh (69 per cent) are amid top five states that are currently witnessing a high rate of implementation of investments.

“A staggering 43 per cent of total investment projects worth a humongous Rs 52 lakh crore attracted by states across India remained non-starter as of March 2013, while over 34 per cent of these investments are stuck at the stage of announcement. Implementation of about six per cent of projects has been stalled and there is no information of the remaining (three per cent) projects,” said Mr D.S. Rawat, Secretary-General, Assocham.

Across India, investments worth over Rs 69.5 lakh crore, or 57 per cent of the total investment proposals of over Rs 122 lakh crore were under implementation as of March 2013, suggesting that investments across states have been kept on hold owing to prevalence of global recessionary trends and slowdown of Indian economy which desperately needs investments.

The prevailing unstable external and internal economic conditions, high inflation, credit availability and its cost along with a host of local problems like delays owing to land acquisition have been affecting the investment scenario in India. The only states that try to address genuine concerns of investors to possible extent see higher implementation rates.

Bhutan rolls out red carpet for Indian IT industry

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Hyderabad, Sept 3:  

Bhutan has rolled out the red carpet for the Indian IT industry to participate in its ambitious information technology development programme.

The Bhutanese Prime Minister, Lyonchhen Tshering Tobgay, who visited Hyderabad as part of his maiden visit to India after he took over, said Bhutan was endowed with natural beauty.

Now Bhutan would pursue a programme to build on its natural foundation and tread the path of modernisation, led by IT.

“Show us the path. We will first take baby steps in this direction, followed by giant strides. It will be a profitable proposition for you,” he told a meeting of CII here today.

He welcomed Indian IT companies to set up operations in Bhutan. “I assure you we will give you the very best option and incentives to do business in Bhutan. You can feel the sense of my enthusiasm…I am open for business,” he said, adding that Bhutan would welcome a IT-led business delegation to the country.

Tobgay also identified renewable energy as another area for cooperation between the two countries.

The Prime Minister, who visited the CII Green Building here, was impressed with the work India was doing in the area of green building campaign.

The CII said India, which was engaged in capacity building in energy efficiency sector in Sri Lanka, could undertake a similar exercise in Bhutan, besides assisting it in the green building movement, certification and materials manufacture. The trade body identified waste management as another area that India could work jointly with Bhutan.

Former Gujarat Metro chief Sanjay Gupta to launch PE fund

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Ahmedabad, Sept 3:  

Bureaucrat-turned-entrepreneur Sanjay Gupta, who resigned recently as Executive Chairman of the Rs 22,000-crore Metro-link Express for Gandhinagar and Ahmedabad (MEGA), to return to his own businesses, is floating a private equity fund to initially raise Rs 250-300 crore from India and abroad to fund his enterprises as well as those of others.

Gupta, who last week said he was following in N. R. Narayana Murthy's footsteps while returning to his businesses, told Business Line here that in his fresh endeavour to raise a PE fund, he is following the example of the Tatas to fund his own companies, besides those of others.

He has already approached the Securities and Exchange Board of India (SEBI) in this regard and hopes to obtain its regulatory approvals in the next couple of months for operationalising the fund.

His PE fund, called Let India Fly for Ever, or LIFE, will focus on the media, hospitality, healthcare and lifestyle businesses. This is being done with a vision to accelerate the growth of upcoming SMEs and profit-focused start-ups from different industry sectors.

The first scheme to be launched under this PE fund is titled ‘India Aspiration Scheme’ which will focus on SMEs and industries with a turnover between Rs 20 crore to Rs 200 crore. The LIFE fund falls under Category II–AIS SEBI regulations.

In view of entrepreneurs facing challenges in finding growth capital, LIFE will infuse capital in select enterprises to overcome bottlenecks and accelerate the country’s growth, Gupta said.

Apart from infusing financial support to the SMEs, LIFE fund will also provide business intelligence and a support network pertaining to a range of businesses depending upon their need and situation.

An IAS officer of the 1985 batch of the Gujarat cadre, Gupta had resigned after Narendra Modi became the Chief Minister in October 2001. The former bureaucrat, known for his networking expertise and turning around the GSPC Group, joined the Adani Group as an Advisor and later became an entrepreneur. He had joined MEGA, the special purpose vehicle for the Metro project, in April 2011. “Following its financial closure achieved last week, anybody can now implement the project,” he added.

Before stepping down as Metro chief on health grounds and to focus on his string of businesses, Gupta said a consortium of 10 public banks headed by Punjab National Bank (PNB) had sanctioned a debt of Rs 4,700 crore, of which Rs 3,100 crore has been allocated for Phase-IA, that would be implemented by August 2017.

Gupta is the promoter of business conglomerate Neesa Group with interests in a 1,200-room hotel chain, infrastructure, food and agritech, real estate, construction, IT and media business.

Raghuram Rajan to take over as RBI Governor on Thursday

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Mumbai, Sept 3:  

Raghuram Rajan will take over as the RBI Governor on Thursday. He takes over at a time when the country is battling a rapid fall in the rupee, high inflation, low growth and burgeoning current account deficit.

A former chief economist with the International Monetary Fund and economic advisor to the Finance Ministry, 50-year-old Rajan will take over a difficult assignment from Duvvuri Subbarao on his completing five years in Mint Road.

Rajan has already said that he has no magic wand to face the challenge before the country but would deal with them one at a time.

The Government, which was at the receiving end of Subbarao’s unrelenting focus on inflation control at the cost of low interest rates, would hope that the new incumbent would reverse some of those policies.

“We have enough ideas. It is not just the currency, it is financial inclusion, it is growth. I think there is a lot to do. There are challenges in the economy... These things are not going to be overcome overnight. There is no magic wand.

But there are undoubtedly solutions to many of the problems that the RBI can tackle and the job is to go ahead and do it.

“We will do it one step at a time. Make sure that it progresses every day,” he told reporters yesterday on his last day of office at the Finance Ministry.

Rajan, who was appointed as the Chief Economic Advisor in the Finance Ministry in August last year, brings to the RBI a vast experience gained at the IMF and during the brief stint in the government.

Known for his frank views, Rajan, who will be the 23rd Governor of the Reserve Bank of India (RBI), was acclaimed for predicting the 2008 global financial crisis. In 2005, he had delivered a lecture critical of the financial sector, arguing that a financial disaster might be looming.

Bajaj Hindusthan appoints Anand Kumar Kanodia as CFO

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New Delhi, Sept 3:  

The country’s largest sugar firm Bajaj Hindusthan today appointed Anand Kumar Kanodia as the new Chief Financial Officer (CFO).

The decision was taken at the meeting of the Audit Committee held today, the firm said in a filing to the BSE.

Kanodia will replace Manoj Maheshwari, who will continue as a whole-time director of the company in new role as Director and Group CFO, it said.

The company also said that its Board has approved the extension of current financial year by six months till March 31, 2014 instead of September 30, 2013.

The company has reported a net loss of Rs 157.47 crore in the first quarter of the current fiscal ended on June 30.

Bajaj Hindusthan has 14 sugar plants in Uttar Pradesh with a sugarcane crushing capacity of 136,000 TCD (tonnes crushed per day) and a distillery capacity to produce 8 lakh litres of alcohol a day.

The company scrip closed at Rs 12.63, down 5.96 per cent at the BSE.