State-owned telecom operator Bharat Sanchar Nigam Ltd (BSNL) will extend the broadband Internet facility to all districts and blocks of the country by March 2009, an official statement said here Monday.

“Broadband coverage will be extended to 148,000 villages in the next six months from the current 30,000 villages. BSNL provides broadband services in 3,261 cities, which will be expanded to 5,000 cities by March next year,” the statement said.

Currently, BSNL covers about 95 percent of the district headquarters and about 44 percent of the blocks.

Communications and IT Minister A. Raja recently announced the government's plans to initially connect 5,000 blocks by wireless broadband soon after the allocation of the spectrum, with support from the Universal Service Obligation (USO) fund.

Villages within a 10 km radius of a block headquarters will be covered by such connectivity - which will benefit institutional users like schools, public health centres, village panchayats and community service centres - meant to provide e-governance and data services to rural areas.

BSNL has already floated zonal tenders to procure 93 million lines to extend coverage of its GSM mobile services to all villages in the country with a population of more than 1,000.

It has extended 11 million GSM connections in the rural areas covering about 256,000 villages.
In order to boost telephony in rural areas, BSNL recently has introduced a tariff plan called Gramin 75, under which fixed monthly charges have been reduced from Rs.110 to Rs.75.

The plan applies to exchange systems with a capacity of between 1,000 and 29,999 lines. Fixed monthly charges of Sulabh Plan under fixed/WLL (wireless local loop) service in exchange systems of more than 29,999 lines have also been reduced from Rs.120 to Rs.99, the statement added.

MUMBAI, Sept 16 (Reuters) - India's insurance regulator is investigating whether American Insurance Group Inc's (AIG.N: Quote, Profile, Research, Stock Buzz) financial crisis will have any impact on its two Indian insurance joint ventures, a senior official said on Tuesday.

AIG is the minority partner with India's Tata Group in two ventures, holding 26 percent each in Tata AIG Life Insurance Co Ltd and Tata AIG General Insurance Co Ltd.

"We are looking into the whole issue, assessing the impact, but as of now both the companies are complying with the solvency requirement," R. Kannan, a board member of the Insurance Regulatory and Development Authority told Reuters.

The solvency margin is the extent to which an insurance company's assets exceed its liabilities. Indian regulations require a solvency margin of 150 percent, and both of the joint ventures have margins well above that, he said.

Indian laws permit foreign firms to hold up to 26 percent in insurance firms.

AIG was thrown a $20 billion funding lifeline by New York state officials on Monday but its longer-term surival depended on additional funding, which will be hard to get as the global financial sector meltdown spreads.

On Monday, investment bank Lehman Brothers (LEH.N: Quote, Profile, Research, Stock Buzz) filed for bankruptcy protection while its rival Merrill Lynch (MER.N: Quote, Profile, Research, Stock Buzz) has agreed to be sold to Bank of America (BAC.N: Quote, Profile, Research, Stock Buzz) for $50 billion.

NEW DELHI: Unfazed by US presidential candidate Barack Obama's remarks on outsourcing, industry body Nasscom on Friday said Indian software exports are unlikely to be affected by this as offshoring is a key economic decision for US companies. "We are not sure whether he had meant outsourcing in the software sector or the manufacturing sector.

But I don't think the software exports will be affected or slow down... Such decisions (to outsource) are determined by economic considerations by (US) companies and they will find a way to remain competitive. Outsourcing is one of those ways," Nasscom President Som Mittal told PTI when asked if Obama's comment is targeted at software services exports from countries like India. India's software exports led by companies like TCS, Infosys and Wipro draw over 70 per cent of revenue from the US market. The software and services exports segment grew by 29 per cent to register revenues of $40.4 billion in 2007-08, up from $31.4 billion in 2006-07.

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US presidential candidate Barack Obama on Friday said if elected to the post, he would not give any tax sops for companies that outsource work out of the country. "I will start giving them (tax breaks) to companies that create good jobs right here in America", Obama had said in his acceptance speech. "US companies are facing shortage of talent to drive the growth. It is in their interests, Mittal said. Mittal said unemployment is an emotional issue and technology companies in US are certainly not facing any unemployment problem.

They all are hiring for growth. "So where is the question of unemployment", Mittal said while asking the industry not to overreact on the issue. "These are political statements made by a candidate.. I don't think we should react too much to it," he said. Asked if Nasscom would hire any professional agency to influence the US policy makers on the benefits of outsourcing, he said "there is no need. We always provide supportive data to think tanks and other associations to supplement out position and would continue to do that", he said.

NEW DELHI: Far-reaching changes in the company law to improve investor protection, corporate governance and use of electronic documents would become a reality once the proposed amendments to the companies Bill are carried out. Changes in the law to this effect were cleared by the Cabinet here on Friday. The proposed amendments would enable incorporation of single-person companies and allow up to 100 partners in partnership firms compared to 20 now. The amendments mandate that at least 33% of the members on the board of companies should comprise independent directors.

The proposed changes would be introduced in Parliament during the forthcoming winter session, science & technology minister Kapil Sibal said after the Cabinet approved the amendments. Briefing newspersons after the meeting, he said the aim of the changes was to overhaul the company law and bring it in line with the times. The proposed amendments have been approved by the Cabinet four years after a decision to review the six-decade-old company law was mooted. Many changes are based on the recommendations of the Irani Committee. Amendments to the Companies Bill, 2008, coupled with the new law on limited liability partnership (LLP) firms would bring about a sea change in the way companies are regulated, Mr Sibal said.

The Bill calls for substantial reduction in government control on the affairs of companies, by promoting an era of self-regulation and shareholder democracy. Electronic documentation is being made mandatory in several cases to make information accessible to shareholders. With the ministry of corporate affairs high on its e-governance initiative, the new company law promotes easy access of corporate data over the Internet. In a major boost for individual entrepreneurs to set up their own companies, the proposed law allows formation of one-person companies, a shift that will change the present requirement of at least two persons.

Partnerships are set to gain a major advantage with the Bill extending the present threshold of 20 partners to a maximum 100, a move which is likely to promote the setting up of firms with high expertise and domain specialisation. The Bill recognises insider trading by company officials like company CEO, CFO and company secretaries as a criminal liability. Giving away with the regulatory overlaps coming in the way of operation for companies, the Bill demarcates a jurisdictional domain for legislations such as company law, Sebi Act and Banking Regulation Act. Officials told ET the new company law will apply to all companies while Sebi Act will be applicable to listed companies in matters such as issue and trading of shares and payment of dividend to shareholders. In such cases, special laws such as the Sebi Act will have overriding powers, Mr Sibal said in response to queries. Appointment of managing directors and decisions on internal affairs of companies will be left to shareholders, with the government shunning its regulatory oversight in such matters. The policy adopted under the new law substitutes governmental control in internal corporate processes by shareholder control. Transition of private companies to public companies and vice versa will get easier. To speed up the process of resolving corporate disputes, the Bill provides for setting up special courts to deal with various company law offences.

The Bill has introduced a revised framework for regulation of insolvency of a company in cases of its liquidation. The new law seeks to provide a single forum for approval of mergers and acquisitions. While high courts are responsible for clearing M&As, officials say the new law enables the sectoral regulators to approach courts for enabling hassle-free clearance for companies. The Bill will set up a separate framework for enabling fair valuations of M&As that will require valuations being done by registered valuers

The successful conclusion of negotiations on the Indo-Asean free trade agreement (FTA) should lift some of the gloom over the collapse of the Doha Round of WTO talks. Equally, if not more importantly, it should dispel the notion of India as a difficult trade negotiator, a tag that western countries, notably the US, have frequently attached to us. The agreement with the 10-member Association of South-East Asian Nations (Asean) has been six years in the making and is the fourth regional trade agreement after the FTA with Sri Lanka, Thailand and the Comprehensive Economic Cooperation Agreement with Singapore.

Under the deal, beginning January 2009, tariffs on 80 per cent of the commodities traded between the two sides will be reduced and will be finally eliminated by 2015. Clearly, it is not that India is unwilling to lower tariff barriers as some western countries have alleged; it is simply that trade negotiations must have an element of give-and-take or reciprocity in WTO parlance. Without that, no country will be willing to lower tariffs unilaterally, whatever the benefits of unilateral reduction in textbook economics. Issues such as rules of origin aimed at ensuring that third country exports do not get the benefit of zero tariff, and India’s willingness to allow freer import of sensitive products such as palm oil, tea, coffee and pepper did pose a problem initially.

But given the widely divergent positions on the most contentious issue — the negative list on which no tariff cuts are to be made — where India initially wanted a list of over 1,400 items and Asean, a much smaller number, the final list of 489 negative items, is remarkable progress. It is a measure also of what dogged trade negotiations can achieve, provided both sides are serious. Of course, bilateral trade agreements are much easier than multilateral negotiations. The deal will give a fillip to bilateral trade between two of the fastest-growing parts of the world, which is currently only $35 billion, less than a fifth of that between China, which already has an FTA with the trade group, and Asean. This is expected to go up to $50 billion by 2010 and once talks for trade in services and investment are also concluded by end 2009, it is bound to increase even further.

In an otherwise gloomy environment, the Reserve Bank of India today appeared a tad bullish on the prospects of growth during the current financial year.

In its annual report for 2007-08, released today, RBI pointed to the grim global situation, higher risks to inflation “that appear to be persistent” and said there is fiscal pressure, both at the Centre and at the state level.

At the same time, it said that the Indian economy is expected to witness a slight moderation in the growth, which continues at an elevated level.

While maintaining that the pressure on the oil and food price front has not completely eased, it added, “Given the current structure of the Indian economy, whereby services constitute the predominant share of GDP, the adverse impact of fuel price pass-through on the GDP (gross domestic product) growth in India may be somewhat lower relative to other EMEs (emerging market economies).”

Last month, RBI had lowered its GDP growth forecast for the year to 8 per cent, even as the other agencies such as the PM’s economic advisory council are not so bullish. During the first quarter, the economy is estimated to have grown 7.9 per cent.

On inflation, the report said a realistic endeavour would be to lower it from over 12.5 per cent to close to 7 per cent by March 2009.

It also said that the high prices of crude oil, gas and coal will put pressure on coal and electricity prices. Metal prices provide the only good news, while edible oil and iron and steel may cost more.

The surge in inflation also indicates more pressures on domestic demand, growth in monetary aggregates above the indicative policy trajectory, rise in incremental non-food credit-deposit ratio of banks and evolving fiscal situation.

Despite a series of monetary tightening measures, bank credit rose 26 per cent up to August 15, as against 20 per cent being targeted by RBI. Similarly, deposits rose 22 per cent, compared with the RBI target of 17 per cent.

The central bank also advised caution on bad debt. “In conjunction with the interest rate cycles, the banking system need to be vigilant to future non-performing assets (NPAs) and the US-like sub-prime woes.

In addition to pressure from higher subsidies, RBI once again warned of the adverse fiscal impact due to the Rs 66,600 crore farm debt waiver and the Sixth Pay Commission award. For the states there was another warning bell in the form of lower devolution of central taxes due to a cut in the excise and Customs duty on petroleum products.

MUMBAI: Life companies have expressed concern that sale of insurance cover by mutual funds could undermine the distribution infrastructure of life companies. They have also complained to the regulator that such a move would end up violating guidelines of the insurance regulator. This is the latest in the ongoing turf war between the mutual fund and the life insurance industry.

Mutual funds have been attacking insurers over the lack of transparency and high charges in unit-linked insurance plans — insurance products that mimic mutual funds. Insurers have responded saying they are only exploiting the failure of the mutual fund industry to build a distribution force to sell to retail.

Mutual funds have decided to get back at insurers by introducing systematic investment plans (SIPs) with a built-in life insurance cover. The insurance covers on the SIP were small and given away without any charge to the investor. Now, the mutual funds have submitted a proposal where they will sell insurance cover against which premium will be collected. Speaking to ET, Life Insurance Council chief executive SB Mathur said: “Insurance companies are spending hundreds of crores on training agents to sell insurance. If mutual fund distributors are allowed to sell insurance without adequate training, the sanctity of the training would be lost.

” According to Mr Mathur, so far the insurance cover has been restricted to the target investment value (the total amount expected to be saved under a systematic investment plan). However, if mutual funds were given too much flexibility in the level of insurance cover, it could weaken the quality of underwriting and safeguards followed by life insurance companies. Insurers also point out that according to IRDA guidelines, any buyer of insurance should be made aware of the name of the company from which he is buying insurance.

In the past, the regulator had barred people from naming products in such a manner that it is identified predominantly with the distributor. The other issue raised by life insurers is that of the social obligation of insurance companies. The directive to sell over a fifth of their policies in the rural sector has forced companies to invest in rural areas where costs are averaged out because of sales in urban areas. Mutual funds have no such obligation and sell largely in urban areas. Insurers say allowing them to distribute insurance can lead to cherry-picking by mutual funds.

The SC Monday stayed proceedings against auction portal eBay India and its chief Avinash Bajaj for allegedly permitting the sale of an MMS clip showing two students from a Delhi school indulging in a sexual actNew Delhi: The Supreme Court today stayed the proceedings against auction portal eBay India and its chief Avinash Bajaj for allegedly permitting the sale of an MMS clip showing two school students from a Delhi school indulging in a sexual act.A bench headed by Justice Altamas Kabir, while issuing notice to the Delhi government, stayed the proceedings under Sections 67 and 85 of the Information Technology Act, 2000.While Section 67 bans publishing obscene information in electronic form, Section 85 allows the prosecution of a person responsible for the business of a company over violations.Bajaj, the then managing director of baazee.Com (now Ebay India Pvt Ltd), was arraigned for allowing the MMS clip, recorded on a mobile phone camera, to be uploaded on the company's auction site in 2004. Bajaj, a US citizen, had subsequently sold baazee.Com to eBay in 2004.Challenging the Delhi High Court judgment that quashed proceedings under the India Penal Code on May 29 but permitted prosecution under the I-T Act, Bajaj contended that mere listing could not be construed as a crime under the act.Bajaj in his petition stated that Section 67 of the Act, does not define the term obscenity and thus liability cannot be fixed on him for merely listing of the 2.37-minute clip video clip even if it was obscene."Even assuming that video clip is obscene, mere 'listing' cannot be obscene for the purpose of Section 67 of the Act merely because the video clip may be obscene," he said while seeking quashing of all the proceedings against him. According to the petition, the apex court in its ruling had held that mere 'listing' cannot be treated as obscene and what is required under law was an overt act. Thus for the purpose of interpretation of the term 'causes to be published' under the statue, a specific over act was essential, he said, adding mere inaction does not constitute 'cause' unless there was culpable negligence.No such over act of publication can be attributed to him either in person or as the managing director of the company, Bajaj added.Offering a partial relief to former managing director of Bazee.Com, the High Court had dropped charges of selling and distributing obscene book or object with an intention to blackmail.It had dropped sections 292 (selling of obscene material) and 294 (obscene act) under IPC but made it clear that the case under the I-T Act, for selling the video clip, would continue against Bajaj."As far as Bajaj is concerned, since the IPC does not recognise the concept of an automatic criminal liability attaching to the Director where the company is an accused not even a prima facie case for offence under sections 292 and 294 is made out..," the High court had stated.The High Court rejected the submission made by the prosecution that Bajaj was responsible for the illegal display of the clip both in official as well as in his personal capacity.In December 2004, the Delhi police had registered an FIR against Bajaj and his company Bazee.Com India Pvt Ltd for illegally displaying the video clip.

NEW DELHI: Leading biscuit maker Britannia said on Monday it is contemplating raising the prices of its products by 8-12% to cope with the rising input costs. “We have seen an increase of around 20% in input costs in various categories since last year or so.

If the inflationary trend continues, we may have to hike prices of our products,” Britannia industries V-P (Sales, Marketing and Innovation) Neeraj Chandra said. “We cannot predict the time period or the percentage of hike,” he said, adding the rise would be around 8 to 12%. The company, at the same time, would continue to add its production capacity and increase investment for brining out new products and formats.

He said biscuit industry is a “mass and scale based one and, therefore, the rising input costs cannot be absorbed over a longer period of time.” He cited the prices of wheat, sugar and crude oil as the primary factors behind rise in cost prices

MUMBAI: Though Infosys-Axon deal is being hailed as the largest outbound acquisition by an Indian IT company, some market participants believe it will have no major financial impact on the IT bellwether. They agree that this is a strategic buy in the consulting and package implementation space, but express concern on any sharp appreciation in the rupee against various currencies and a prolonged recession in major user economies.

The announcement of the Axon buy did little for Infosys ADR on Monday and it ended down 4 per cent at $39.90 on the Nasdaq, trailing the weakness in US markets. Infosys announced acquiring UK-based Axon Group in a 407-million pound (Rs 3,310 crore) all-cash deal after market hours Monday. The deal is expected to be consummated by November 2008, with the payment being made in December, and would add to its earnings from January 2009, Infosys said.

Infosys shares looked up at start Tuesday on the back of the news and a slide in the rupee to a 17-month low against the dollar. But the stock ended off the day's high on account of profit booking. "Infosys' proposed take over of Axon Group may be a tad expensive, and not exactly be a value buy, but it is a better investment than making cash sit idle in your balance sheet. This should essentially take the pressure off the management and give them the elbow room to now look at better fitting plays, something that they had been avoiding so far," said Anagram Stock Broking. However, the broking house is worried that the Eurozone may face more slowdown than the US.

Hence, investing in a company that draws majority of its earnings from the zone may not be a very good buy. Kotak Securities believes Axon is a strategic fit for Infosys, which has been consistently looking to expand its consulting and package implementation capabilities and its presence in Europe.

Kotak has maintained a 'buy' on the stock for a target of Rs 2,027 and is certain that the deal will allow Infosys to gain in terms of acquisition of marquee customers, wider reach, improved transformational capabilities and incremental abilities to bid for larger deals. "Infosys values Axon at nearly 2 times CY07 revenues and about 20 times CY07 earnings, which is fair in our view. Axon's revenues and PAT have grown by 43% and 68% CAGR, respectively over the past 5 years, albeit partly due to acquisitions," said the broking house.

NEW DELHI: The industrial climate is "getting difficult" in West Bengal where the government needs to address the Singur issue if the state wants to remain an investment destination, CII President K V Kamath said today. After attending an industry leaders' meeting with Finance Minister P Chidambaram, Kamath said before going into any state, an industry undertakes due diligence on the environment in the state. However, the environment in West Bengal "is getting difficult," he said, adding it would "certainly bring difficulties in the minds of the industry" scouting for new locations.

"This is something that needs to be addressed if the state continues to be magnet for industry," Kamath said. He said the Singur issue did not figure in the discussion with Chidambaram because, "our view is that this is something that is best handled at the state level at this point of time".

He hoped the industry group (the Tatas) and the state would work on resolving the issue. Last week, Ratan Tata had threatened to take the Nano project elsewhere if the protests did not end. Trinamool Congress cadres led by its chief Mamata Banerjee have laid a siege to the Tata Motors factory in Singur demanding return of 400 acres of land to farmers. "In any location if industry finds that it is not able to execute the project or commission the project, I think it is a matter of concern and I am sure the concerned industrial group and the state government will find a solution which is amicable," Kamath said

Singur : Work at the Tata Motors small car plant here continued to suffer on Tuesday because of thin attendance of contract workers, as an indefinite sit-in by the Trinamool Congress partymen entered the third day.

"Attendance of the company officials was around 85 per cent, but only 20 per cent contractual workers turned up," a Tata Motors spokesman told PTI.

TC chief Mamata Banerjee said the agitation would not be called off unless the state government agrees to the party's demand for return of 400 acres of land to farmers who were allegedly forced to give up their property.

The busy Durgapur expressway near the Tata Motors plant remained closed because of the dharna, causing a traffic snarl.

Home Secretary Ashoke Mohan Chakraborty said police in Hooghly has been asked to talk to the TC leadership for reopening one side of the expressway.

MUMBAI: Reliance Communications Ltd on Tuesday announced the launch of its DTH venture, Reliance BIG TV Ltd, which boasts of world’s most advanced MPEG4 Direct-to-Home platform. Reliance Big TV is targeting 40 per cent market share within a span of one year. It will offer a bouquet of 202 channels with digital quality picture and sound.

Currently, DTH accounts for only 4 per cent in Indian market compared to 95 per cent analogue cable services. “The huge potential of a quality and value offering in the home entertainment service market offers us a unique opportunity to tap the strengths and synergies of telecommunications and entertainment sectors embedded within Reliance ADA Group.

With the launch of BIG TV DTH, we aim to accelerate the growth momentum enhancing value of many million shareholders of Reliance Communications,” Chairman of Reliance ADA Group, Anil Ambani, was quoted as saying in a release. The upfront charges of BIG TV services would be between Rs 1,490 and Rs 3,990 (plus installation charges) depending on the scheme a subscriber opts for.

To create its customers base, Reliance ADA is planning a huge ad campaign across the nation to promote BIG TV. At the same time, it will tap its existing 61 million customer base in India (in different business verticals). The company has 2,000 plus stores in India to offer subscription. Besides, it has 500 plus channel partners to disseminate product information.

It is the largest home entertainment service rollout in India, which is available in over one lakh outlets across 6500 towns, says a release by the company. According to Sanjay Behl, group head – brand & marketing, Reliance Communications, BIG TV is based on four pillars. “It is magnanimous in nature. It brings some surprise offers in terms of subscription. We want to make it contagious so that the product gains ground through people to people talks.

Finally, we have made it extraordinary by introducing certain advanced technology in it,” claimed Behl. Some unique features of Big TV includes ‘subscription video on demand’ on 50 channels, adaptability to any tv set, more than 30 exclusive movie channels. Added Arun Kapoor, CEO, Reliance Big TV, “through BIG TV, your favourit programme can get recorded even when you are not at home and your TV set is not switched on. Till date, this system is existing in US. Reliance Big TV is planning to add more features into it. Tuesday on NSE, Reliance Communications stock ended at Rs 399.80, down by 3.06 per cent from the previous close

NEW DELHI: India's largest private telecom company Bharti Airtel on Sunday said it has crossed the 75 million customer mark to become the fourth largest in-country mobile operator in the world. Bharti Airtel is now behind China Mobile, China Unicom and American AT&T in terms of subscriber base, a company statement said. The subscriber figure includes customers from all business units of the company, mobile services, telemedia services and enterprises services, the statement said.

The mobile services devision has a customer base of 72.07 million as of July, 2008, it added.

The mobile business provides mobile and fixed wireless services using GSM technology across 23 telecom circles. Commenting on the landmark Bharti Airtel CEO and Joint Managing Director Manoj Kohli said, "We are happy to have achieved this milestone of being the largest integrated telco in the country, in customer terms. For us, the benchmark of real leadership is customer delight and would like to thank all our customers for placing their faith in us.

" The company had crossed the 60 million customer mark in February 2008 and the 50 million mark in October 2007, thereby becoming one of the fastest growing telecom companies in the world, the statement added. China Mobile with 414.5 million customers as on June 2008 is at the No 1 position followed by China Unicom with 170.7 million subscriber base. AT&T is marginally ahead of Bharti with a subscriber base of 72.9 million in June this year

HYDERABAD: Valuation of insurance companies is back on the regulator’s radar. The Insurance Regulatory and Development Authority (IRDA) is on course to develop commonly-accepted benchmarks and disclosures to value insurance companies as this would be crucial when Indian partners dilute their shareholding.
The present regulation requires Indian promoters with a majority shareholding to dilute their stakes through an initial public offering (IPO) at the end of the tenth year of operations. The value of insurance companies hinges on several assumptions which could result in wide variations. It is different from valuing, say, brick-and-mortar companies listed on the stock exchange. Their valuation is generally based on the price-earning multiple — a measure of the price paid for a share relative to the profit earned per share. A high PE multiple suggests that investors expect higher earnings growth in the future. But this exercise is much more complex for insurers.

Once an insurance company receives the premium from the policy holder, it has to fork out money for commission and other marketing expenses. The balance is invested in debt and equities and interest is added to the original investment. Then, on the date of valuation the solvency margins and mathematical reserves are deducted from this corpus. Solvency margin is the excess of assets over liabilities that an insurer maintains as a prudential measure in the interest of policy holders. Mathematical reserve is the provision made by an insurer to cover liabilities on long-term insurance contracts.

The balance amount in the corpus is used to pay claims and the net money that is available is the profit. If the insurance product is a participating product — eligible for bonus — only 10% of the profit belongs to the shareholder. The balance is used to declare bonus and belongs to the policy holder. If it is a non-participating product, the entire profit belongs to the shareholder. Hence, the profit can vary widely as the actual experience may differ from what has been assumed in pricing — cost, claims experience, investment yield and so on.

In the worst-case scenario, the projected profit will be much lower than what has been assumed in the pricing. Valuation of insurers, hence, hinges on the assumptions and hidden profit which can fluctuate wildly. “It is important for the industry to follow some uniform method in estimating various components. This, in turn, will bring some closeness in the final outcome on valuation between various companies. Internationally, this issue has gained prominence with professional bodies setting valuation norms.

Rating agencies event comment on these norms. In the days to come, the same will happen in India,” Irda member actuary R Kannan said. Irda chairman J Hari Narayan also reckons that issues such as valuation of companies will take the centre stage when the industry consolidates through mergers and acquisitions. Mr Narayan’s predecessor C S Rao had set up a panel to suggest ways to value insurance companies. Irda may now set up a broad-based committee to look at such issues.

“There is a case for significant improvements in transparency and disclosure standards of the insurance industry. As a run up to the prospective initial public offerings, there is a need to agree on common disclosure practices, financial ratios and operational benchmarks so that there is a consensus among analysts to have a proper valuation for different companies”, Watson Wyatt managing director R Krishnamurthy said. Currently, the new business achieved profit — which reflects the value of a company’s earnings potential under a set of assumptions — is used for the valuation of insurers.

Another method is the embedded value method or the value of the existing business in the books of the company. India’s insurance sector accounts for around 5% per cent of the GDP and has the largest number of life insurance policies in force in the world

New Delhi : The government has initiated the process to look for a successor to head the telcom regulatory body TRAI, whose present chairman Nripendra Misra retires on March 21, 2009.

Department of telecom has sought permission from the cabinet secretariat to constitute a search committee for the selection of TRAI chairperson.

In a letter to cabinet secretary K M Chandrasekhar, Telecom secretary Sidhharth Behura has sought approval for the constitution of this committee which will be headed by cabinet secretary and the members would be principal secretary to Prime Minister, secretary (personnel) and secretary (telecom).

The search committee of each department is always constituted prior to the selection for all appointments to the post of chief executives as per a Department of Personnel and Training order.

Telecom Minister A Raja has already given his consent to the setting up of such a committee.
The purpose of the selection committee is to interview the candidates from a wide range of fields and ensure involvement of senior officials in selection to the key posts and also do wide advertisement for attracting the suitable talent for the crucial appointment.

As per TRAI Act, the telecom regulator will have a chairman, two whole time members and two part time members appointed by the Central Government.

The tenure of TRAI chairperson is three years.

Mumbai : Strong domestic demand is likely to push up the private corporate investments in the current financial year but in a slower-pace owing to a deceleration in global and domestic economies, the Reserve Bank said.

"The private corporate investment in 2008-09 is likely to increase, although it may grow at a slower pace... Corporate's incentives to invest are likely to remain strong in 2008-2009, namely high domestic demand and high capacity utilisation rates amidst improved profitability of last few years," RBI said in its August bulletin.

The capital investment intention of companies in the domestic market having institutional assistance upto the last fiscal amounted to Rs 1,48,350 crore as against Rs 1,25,248 crore envisaged for 2007-08, the apex bank said.

In the current fiscal, the proposed investment aggreagtes to Rs 1,73,173 crore, if the capital spending envisaged by companies raising funds from sources other than banks and foreign investors was added, RBI said.

"If the aggregate capital expenditure in FY 09 were to surpass the level indented for the year 2007-08, the fresh envisaged capital expenditure in 2008-09 must be above Rs 71,934 crore," the apex bank said

NEW DELHI: Mahindra & Mahindra on Monday said it has formed a joint venture with Chinese tractor manufacturer Jiangsu Yueda Yancheng.

The homegrown auto major would invest 26 million dollar in the joint venture firm -- Mahindra Yueda Yancheng Tractor -- where M&M would hold 51 per cent stake, while the rest would be with the Chinese partner.

According to the agreement, the tractor related assets and current liabilities from Yancheng tractors would be transferred to the JV company. The net assets transferred to the JV is valued at 50 million dollar.

MUMBAI: Google India, the domestic subsidiary of the high-profile Silicon Valley web search company, is facing defamation charges from a Mumbai-based firm, Gremach Infrastructure Equipments & Projects.

The company has filed a lawsuit against Google for hosting a series of articles on its blogging site, campaigning against its mines in Mozambique. In an interim order, the Bombay High Court has asked Google India to furnish information about the blogger. The case’s outcome will have far-reaching implications for the development of cyber law in India. In its petition filed, Gremach said a series of articles titled “Toxic Writer” were posted on Google’s blogging site between January and February.

The article amounted to a “hate campaign” against the company, according to Gremach. The Indian firm had acquired 75% stake in 11 coal mining licences in the African country in September 2007. When contacted, a Google spokesperson said: “The case is sub-judice. We are not able to comment.” A source in Gremach said the company “suspects corporate rivalry behind the hate campaign” and has sought help from the Mumbai Police’s cyber crime cell. However, the investigations by the local police hit a dead end after Google’s India office refused to co-operate, he added.

Gremach then moved the Bombay High Court against Google India, seeking information about the blogger. Interestingly, group company, Austral Coke, whose initial public offering closed on Wednesday, is engaged in a legal battle with Gujarat NRE Coke over certain claims in Austral’s IPO prospectus. Gujarat NRE had questioned the veracity of some information in the prospectus.

A corporate lawyer said Indian courts would have to decide on whether Google will have to disclose the blogger’s identity. In the US, the courts usually do not compel websites to divulge bloggers’ identity. “This is for the first time a blogging platform company is being sued in India,” said Anoop Narayanan, a partner in corporate law firm Majmudar & Co. “As we do not have any specific laws on this, the Indian court will have to consider the direct liability of Google, taking into consideration how important the disclosure is to the plaintiff (Gremach),” he added.

In 2006, Yahoo was accused by human rights activists of providing information to the Chinese police about bloggers who were later jailed for writing ‘anti-China’ articles. A blog or a web log is an online diary published on a web page. Hundreds of companies, including market leaders Google and Yahoo, provide a platform to anyone with an e-mail identity to post articles/pictures on the internet.

Often these blogs are misused, as anonymous bloggers, including corporates, use them to spread misinformation about rivals. Only companies providing web logging platform and internet service providers have access to the bloggers internet protocol number -- a unique number assigned to each computer -- only they can divulge the blogger’s identity.

Bloggers all over the world have been prosecuted by governments for unsubstantiated articles. Many have been jailed. At the same time, platform providing companies have faced flak for providing information on bloggers to investigating agencies from pro-freedom of speech activists

MUMBAI: Foreign exchange reserves dipped $5.5 billion during the week ended on August 8, 2008, with the Reserve Bank of India (RBI) selling dollars to rein in the value of the rupee.
The monetary tightening measures undertaken by the central bank also have had their impact, as the money supply growth has declined, for the first time this fiscal, to below 20%. According to the latest RBI data, total foreign exchange reserves, including gold and SDR, dipped $5,464 million to $300 billion.

Foreign currency assets and reserves with the International Monetary Fund (IMF) dipped $5,456 million and $8 million, respectively. The value of gold and SDRs — the currency with IMF — remained unchanged during the week.

The regulator, after several years of buying dollars in the forex markets, has now started selling dollars. Though there were strong portfolio inflows, fuelling dollar mop-up by the central bank, oil importer demand for dollars, of late, has gone up sharply forcing the central bank to be net sellers of the greenback.

As result, total reserve with the central bank has dipped almost $10 billion since the beginning of the fiscal. The slowdown in reserves pile-up has also saw decline in money supply, to an extent. This is because, whenever the central bank sells dollars, it simultaneously impounds rupee funds from the system.

As a result of the monetary tightening, the annual growth in money supply (year-on-year, or Y-o-Y) has, for the first time in the recent months, has slipped below 20%. As per the latest RBI data, the Y-o-Y growth in money supply slipped to 19.6% as on August 1, from a high of close to 23% a few months ago.

The total stock of money in the system amounted to Rs 41,79, 900 crore as on August 1, up Rs 32,479 crore over the previous fortnight’s levels