World Bank seeks details on unused tsunami funds

PROJECT HIT: Residents of many areas such as Srinivasapuram oppose proposal for construction of new tenements. 

                

CHENNAI: Bottlenecks in the implementation of the Emergency Tsunami Reconstruction Project has prompted the International Bank for Reconstruction and Development (World Bank) to write to the State government seeking details of the exact amount of credit that will be unutilised.

“It is likely that a certain portion of the credit may remain unutilised,” it said in a recent communication to the State government.

According to a senior State government official, “The deadline for the projects is December 2011, but some of them in Chennai are yet to take off on account of the unwillingness of the beneficiaries. Around 50 per cent of the projects in Chennai are not likely to take off as vested interests are creating problems by mobilising the beneficiaries against the projects.”

As part of the emergency tsunami reconstruction project, a total of 7,320 tenements were proposed to be constructed between Light House and Srinivasapuram within 200 to 500 metres from the sea.

As biometric identification was a challenge, 5,040 tenements could not be constructed with World Bank funding.

About Rs.293 crore of the fund is unutilised because of the reluctance of the beneficiaries in the area, according to officials.

An assessment by the World Bank found that construction of 828 houses in Dommingkuppam and 2,048 tenements at Okkiam Thoraipakkam may not be completed within the project period.

The Bank Task Team estimates that an amount of US $100 million may remain unutilised by the closure of the project in December 2011. The World Bank has also requested the State government to indicate the disbursement projections to the Department of Economic Affairs, Union Ministry of Finance.

Source: The Hindu,Aloysius Xavier Lopez,— Photo: S.S. KumarMay 22,2010
 

India pavilion at Shanghai expo gets huge footfall

Source :22 May 2010, 0030 hrs IST,IANS


BEIJING: The India pavilion has become one of the hottest spots at the Shanghai World Expo with average 25,000 visitors every day thronging the stalls of Indian handicrafts and cuisine and jiving on Bollywood songs and dance.

Visitors are amazed at the bamboo-made dome with a diameter of 34.4 metres. It is a recurrent theme in Hindu, Buddhist, Islamic, Jain, Sikh and Christian architectures throughout India, says India Pavilion director D.K. Nangia.

A visit to the world's largest bamboo-made dome paves the way for mutual understanding between China and India. More than 60,000 plants sit on its roof, which collects rainwater for use in the pavilion, he said.

"Environmental degradation has reached a horrific level. The stress of living in high-cost urban areas leads to impatience and that needs to be controlled. So, our stress in the pavilion is harmony, which is a trademark of India," Xinhua quoted Nangia as saying.

For this purpose, bamboo is used in the construction of the dome for its low cost and inherent strength, he explained.

The interiors based on the theme of "Living in harmony through the ages" displays India's urban planning system, philosophy, scientific achievements, arts and cultures.

An eye-catching holographic audio visual showcases the Seven Chakras (circles of energy) and how the ancient system inspires urban development.

"This unique feature of the India Pavilion represents the country's long tradition of living in harmony with nature," Nangia said.

He said the Expo was a good platform to link the "India Tiger" and "China Dragon", especially at grassroots levels.

"I appreciate the progress we are witnessing in China, and I have seen that people in China react very fast. The way Shanghai authorities have moved to create a green area around the Expo is something we should be proud of."

Besides India, 188 other countries have been taking part in the six-month-long event which kicked off April 30.

Abbott to Buy Piramal Generics Unit for $3.72 Billion

                                                          

 Source: Lena Lee and Shannon Pettypiece,may21,2010

Abbott Laboratories will buy Piramal Healthcare Ltd.’s branded generic-medicine unit in India for $3.72 billion, making it the country’s biggest drugmaker and tapping into a market expected to more than double by 2015.

Abbott said it will pay $2.12 billion upfront and $400 million annually for four years from 2011 for the unit, which sells retail-ready pharmaceuticals in India, Sri Lanka and Nepal. The Abbott Park, Illinois-based company will pay cash for the transaction, expected to close in the second half of 2010.

The acquisition announced today will be the second-largest takeover in India’s health-care industry and give Abbott a 7 percent stake in the $8 billion Indian pharmaceutical market. The move fits into Abbott’s strategy of broadening its business beyond brand-name pharmaceuticals in the U.S. and Europe, where sales are slowing because of generics competition and pricing pressure from governments.

“They are putting in place the next wave of growth drivers -- not for next quarter, but for 2012, 2013 and beyond,” said Rick Wise, an analyst with Leerink Swann Co. in a telephone interview. “I think this is a high-quality asset that does terrific things for Abbott on a long-term basis.”

Growing Market 

In India, the pharmaceutical market is expected to increase as much as 16 percent a year through 2014, according to IMS Health Inc. The $300 billion U.S. market will grow at a slower rate of 3 percent to 6 percent over the same period, said IMS.

The slower growth in the U.S. and Europe has Abbott and other drugmaker turning toward developing countries to increase sales. Tokyo-based Daiichi Sankyo Co. bought 64 percent of Ranbaxy Laboratories Ltd., India’s largest drugmaker, for about 488.7 billion yen ($5.45 billion) in 2008, the biggest takeover in the South Asian nation’s pharmaceutical industry, and Pfizer Inc. has been licensing products from Indian generic-drug maker Aurobindo Pharma Ltd.

“This is certainly not the last deal that you will see in India given that the country is poised to become one of the biggest pharmaceutical markets in the world,” said Nitin Agarwal, an analyst at IDFC Securities Ltd. in Mumbai, who rates Piramal “outperform.”

The Piramal unit Abbott is purchasing is set to have $500 million in sales next year and will grow at 20 percent a year, said Abbott Chief Executive Officer Miles White in a conference call with analysts today. Piramal’s products include medicines for infections, heart disease, pain, and respiratory conditions.

Scarcity of Assets 

“There is a scarcity of high-quality assets in this market and we believe Piramal is among the best,” White said. “These markets are so significant in the future growth of our industry that it is important for us to be there early and in a meaningfully strong way.”

Abbott gained 46 cents, or 1 percent, to $46.94 at 4:01 p.m. in New York Stock Exchange composite trading. Piramal dropped 12 percent to close at 502.75 rupees in Mumbai trading.

Moody’s Investors Services said it has placed Abbott’s A1 senior unsecured credit rating under review for a possible downgrade as a result of the acquisition. It affirmed Abbott’s Prime-1 rating.

The U.S. drugmaker paid a “hefty premium” of about 50 percent for the business, based on Piramal’s market value, likely because there were other bidders involved, said Larry Biegelsen, an analyst with Wells Fargo, in a note to clients.

Standalone Business 

Abbott plans to operate the Piramal unit as a standalone business reporting to its so-called established products division. After the acquisition, the company will have 7,000 sales representatives across India, more than the 2,500 current employees in the country.

The unit, called Healthcare Solutions, makes and sells generic medicines for conditions including respiratory and heart disease in India. Piramal’s other businesses include contract- manufacturing and drug-ingredient production.

Sales at the Piramal division making branded generics rose 25 percent to 20 billion rupees ($426 million) in the year ended March 31, the company said on May 7. The unit accounted for more than half of the drugmaker’s total full-year revenue.

“I don’t think we were in a position to take it global. A company like Abbott has the strength and aspirations to do that,” Piramal chairman Ajay Piramal said. “There aren’t too many markets growing at 25 percent annually and it’s a good opportunity” for Abbott to be in India, he said.


Revenue will rise about 20 percent a year, reaching more than $2.5 billion by 2020, Abbott said.


Solvay Acquisition 

Abbott, which was advised by Morgan Stanley on the Piramal acquisition, had $8.8 billion in cash and equivalents at the end of 2009, more than doubling from a year earlier, according to its annual report.
The drugmaker completed its 4.8 billion-euro ($6 billion) acquisition of Brussels-based Solvay SA’s pharmaceuticals unit in February. The company said May 11 it agreed to license at least 24 generic medicines from the Zydus Cadila unit of Ahmedabad, India-based Cadila Healthcare Ltd. and sell them in emerging markets.

Abbott said the transaction announced today is subject to approval from Piramal Healthcare shareholders and won’t affect its per-share earnings guidance for 2010.

Piramal will repay 13 billion rupees of debt using proceeds from the sale and make a special dividend, Chairman Ajay Piramal said at a briefing in Mumbai. The proceeds will incur a 22 percent capital gains tax to be paid to the Indian government, he said.

To contact the reporters on this story:
Source:
  Lena Lee in Singapore at llee42@bloomberg.net;
Shannon Pettypiece in New York at spettypiece@bloomberg.net.
Last Updated: May 21, 2010 16:07 EDT

BWA auction set to start on Monday

Source :PTI, May 22, 2010, 01.14am IST

NEW DELHI: The government on Friday approved the provisional results for the 3G spectrum sale that fetched it a staggering Rs 67,719-crore bonanza, paving the way for starting the auction of the broadband wireless access (BWA) airwaves from May 24.

According to official sources, a committee headed by cabinet secretary KM Chandrasekhar, approved the 34-day long auction process, which concluded on May 19. Other members of the committee are finance secretary Ashok Chawla, telecom secretary PJ Thomas and Planning Commission member secretary Sudha Pillai.

With this, the 3G auction process comes to end and all the winners, including two telecom PSUs, have been asked to pay within 10 days from now. DoT officials said the last date for payment is May 31.

NRIs Permitted to buy and sell properties in india

 
Source :: Ashish Gupta, TNN

Non-resident Indians (NRIs) are permitted to buy and sell property in India. The acquisition and transfer of immovable property by NRIs should be in accordance with the Foreign Exchange Management Act (FEMA).

The property should be purchased through a registered conveyance deed. In case the property is purchased on the basis of a Power of Attorney, an agreement to sell and the Power of Attorney should be executed by the seller in favour of the buyer.

However, they are not formally registered with the office of the registrar. As such, no stamp duty is to be paid for the purchase.

The Reserve Bank of India (RBI) has granted permission to foreign citizens of Indian origin, whether resident in India or abroad, to purchase property in India for residential or commercial purposes.


NRIs can easily purchase & transfer property in India

The purchase consideration should be met either out of inward remittances in foreign exchange through normal banking channels or out of funds from NRE/FCNR accounts maintained with a bank in India.

Foreign citizens of Indian origin, purchasing residential property in India under the general permission are required to file a declaration with the central office of the RBI at Mumbai within a period of 90 days from the date of purchase of the property or final payment of purchase consideration along with a certified copy of the document evidencing the transaction and bank certificate regarding the consideration paid.

The RBI has granted general permission for such a sale. However, where the property is purchased by another foreign citizen of Indian origin, funds towards the purchase consideration should either be remitted to India or paid out of a NRE/FCNR account.

NRIs can easily purchase & transfer property in India


The RBI has granted general permission to let out a property in India. The rental income is eligible for repatriation .

The RBI has also granted general permission to certain financial institutions providing housing finance and authorised dealers to grant housing loans to NRIs for acquisition of a house for self-occupation subject to certain conditions.

The purpose of the loan, margin money and the quantum of loan will be at par with those applicable to housing loans for residents.

Repayment of the loan should be made within a period not exceeding 15 years out of inward remittances or out of funds held in a NRE, FCNR or NRO account.

NRIs can easily purchase & transfer property in India

In addition to these, properties other than agricultural land, farm houses, an plantations can be acquired by foreign citizens of Indian origin provided the purchase consideration is met either out of inward remittances in foreign exchange through normal banking channels or out of funds in a NRE or FCNR account maintained with a bank in India.

A declaration is to be submitted to the central office of the RBI within a period of 90 days from the date of purchase of the property or final payment of purchase consideration . They can also dispose off such properties.

The RBI has also granted general permission to foreign citizens of Indian origin to acquire or dispose off properties - up to two houses - as gift from or to a relative who may be an Indian citizen or a person of Indian origin whether resident in India or not, subject to compliance with applicable tax laws.

The RBI also permits non-resident persons (foreign citizens ) of Indian origin to transfer as gift property held by them in India to relatives and charitable organisations subject to the condition that the provisions of any other law, including the Foreign Contribution (Regulation) Act 1976 are complied with. 

 

Source :2 : http://panindiaproperties.blogspot.com/

India needs 6,800 more hospitals, NRHM has many glitches: Survey

Source :25 Feb 2010, 2306 hrs IST,IANS


NEW DELHI: India needs over 6,800 more hospitals in rural areas to provide basic health facilities to people, the annual Economic Survey released Thursday said. The survey also said that several glitches in the flagship National Rural Health Mission needed to be ironed out to improve health infrastructure.

"There is still a shortage of 4,477 primary healthcare centres and 2,337 community healthcare centres as per the 2001 population norms," the survey said.

This means the requirement for hospitals will be much more if the population figure in 2010 is taken into account.

The annual survey presented in parliament said: "Almost 29 percent of the existing health infrastructure is in rented buildings. Poor upkeep and maintenance, and high absenteeism of manpower in the rural areas are the main problems in the health delivery system."

It said NRHM is trying to address all these problems but needs to iron out several glitches to implement the scheme which has been in operation since 2005.

The survey also said that through the mission, the government aimed at bettering the health infrastructure vis-a-vis population, but the "ratio of population to health centres remained low with the targeted number of new health centres not being established".

"Basic facilities were still absent in many health centres with many PHCs (primary health centres) and CHCs (community health centres) being unable to provide guaranteed service such as in-patient services, operation theatres, labour rooms, pathological tests, X-ray facilities and emergency care."

The survey said: "An assessment of the health related indicators would suggest that significant gains have been made over the years. However, India fares poorly in most of the indicators in comparison with developing countries like China and Sri Lanka.

"The progress in health has been quite uneven, across regions, gender, as well as space."

Underlining some NRHM shortcomings that have also been pointed out by the Comptroller and Auditor General (CAG), the survey said: "Release of funds to state health societies and consequently to district and block levels require further streamlining to ensure prompt and effective utilisation of funds".

The survey said: "Village level health and sanitation committees were still to be constituted in nine states".

It also said that in nine states, the stock of contraceptives and other medicines as mandated by the NRHM was not found and there was a shortage of service providers at different levels.

The survey also said that efforts are on to better the indicator and the infant mortality rate is expected to reach 30 per every 100,000 live births against the current level of 53 by 2012.

Bimal Jalan: Reform of global financial system

 
Source : BS :Bimal Jalan /  May 22, 2010, 0:34 IST


By any reckoning, the global financial system is once again in turmoil. A couple of years ago, after the sub-prime fiasco, it was the US that was in trouble, and there were serious doubts about the future of the dollar as a reserve currency. Today, it is the euro, the currency of the European Union (EU), that is facing a crisis because of the acute fiscal problems of Greece and some other European countries.

In the wake of the US crisis, and now the so-called “Euro-mess”, there has been a lot of talk about an urgent need for financial and regulatory reforms. However, nothing much has happened. Presidents, prime ministers and finance ministers have met in various fora like G-20, OECD, the International Monetary Fund (IMF) and the World Bank, and expressed their grave concerns. However, except for rescue packages for individual countries in trouble, a global programme of action is still lacking.


In this context, it is useful to recall that this was also the case in the 1990s. The decade, in fact, saw many more financial crises than the previous five decades since the Great Depression. In addition to East Asia and Russia, other countries across the world, like Argentina, Brazil, Mexico and Turkey, were also badly affected.

As is the case now, exchange rates of major currencies like the dollar, the euro and the yen were highly volatile, and capital flows had become unstable and unpredictable. There were innumerable meetings among leading countries with the objective of setting stronger standards and codes, and putting in place a more sustainable exchange rate regime. But then, as now, nothing much happened — except “bailout” packages for the affected countries.

One major difference between the situation in the 1990s and the present one is that the most affected countries back then were developing nations and countries in Eastern Europe. Financial systems in industrialised countries, on the other hand, were generally considered to be safe. Today, barring nations like China and India, all major countries of the world are experiencing problems and calling for urgent global reforms.

Where do we go from here? It is important to recognise that, irrespective of what political leaders from different parts of the world say in their public speeches or communiqués, each country is likely to do what it considers to be best for itself. This is perhaps as it should be. In this background, the primary objective of global financial reforms should be to develop transparent “rules” of financial transactions among sovereign countries to promote international trade, commerce and capital flows. For the present, it may also be useful to concentrate on some “basics”, rather than trying to cover the whole field.

In view of constraints of space, let me just mention a few reforms that should be put in place as soon as possible.

First and foremost, it is important to agree on a globally acceptable exchange rate system. At present, there is significant volatility in the exchange rates of major currencies, particularly the dollar, the euro and the yen. Different countries follow different systems, ranging from freely floating exchange rates to declared or secret crawling pegs, with or without a band. One possible approach is to have a “dual” exchange rate system — one for three or four major currencies (selected in terms of their percentage share in currency transactions), and one for the rest of the world. Exchange rates among the top three or four currencies may be “fixed” but adjustable by agreement to reflect major changes in global trade. For the rest, currencies may be “pegged” or “floating” as a particular country decides. A similar system needs to be put in place for countries in the eurozone, with appropriate variations for a Union of independent states.

Second, an upper limit should be fixed for permissible levels of both fiscal and current account deficits as percentage of GDP. If a country exceeds that level, it should come under surveillance and scrutiny of an international financial agency like IMF.

Third, banks that are too big to fail, and whose international assets and/or deposits are more than “X” per cent of total global assets/deposits, should remain banks. They should not be permitted to issue other kinds of securities, which effectively “create” money without adequate deposits. Their minimum reserves-to-deposit ratios may be fixed by global consensus.

Fourth, profits or capital gains of foreign institutional investments (FIIs) and reversible capital flows of less than one year should be taxed at the same rate as domestic corporate profits.

Fifth, investment banks should be just that — they should be free to advise and raise funds for their clients, but they should not be permitted to issue securities (backed by other institutions’ securities).

Finally, Articles of Agreement of Bretton Woods financial institutions —IMF and the World Bank — should be completely overhauled. IMF should have the primary responsibility for surveillance of agreed financial rules and procedures, and for issuing an annual report on compliance. It should also assume the role of a “rating agency” for stability and transparency of the financial system of its members. The World Bank, on the other hand, should go back to its original role as a guarantor of loans raised by member countries from commercial sources. Direct lending should be confined to the International Development Association, its soft-loan arm.

These are a few aspects of the global financial system that require urgent attention. There is plenty of room to add or make changes in the above list. What is needed now is to convene a Bretton Woods II with experts and representatives of major industrial and developing countries, and agree on a programme of action. Perhaps India and China, two emerging powers of the 21st century, could take a lead in developing a global consensus as early as feasible.

ICICI may not need FIPB nod for BoR merger

Source :BS Reporter / Mumbai May 22, 2010, 1:06 IST

ICICI Bank, may not need a go-ahead from the Foreign Investment Promotion Board (FIPB) to complete the intended merger with Bank of Rajasthan (BoR). The foreign holding in ICICI is 67 per cent.

Banking sources said the government’s Consolidated Foreign Direct Investment Policy, effective April, stipulated that in case of Indian companies in sectors such as banking, where foreign investment is capped at 74 per cent, FIPB approval will be required if control of an Indian entity (BoR in this case) is passed on to a non-resident entity.

Sources said ICICI Bank might have got a new classification as an Indian-controlled foreign bank, but it is not a non-resident entity as defined by the Foreign Exchange Management Act.

In addition, they said, another clause in the new FDI policy document allowed a merger of Indian companies once a court approved it. There was, however, a rider that the foreign shareholding in the new entity should not breach the sectoral cap.

In case of ICICI Bank, foreign holding is estimated at 67 per cent and following the merger with BoR, this would only decrease. In contrast, foreign investment in banking companies is capped at 74 per cent.

Banking sources said that given the stipulations, ICICI Bank may not need FIPB approval for the transaction. In any case, they note, the Reserve Bank of India will vet the transaction and will also look at compliance with the sectoral cap.

The issue is also expected to be discussed by the ICICI Bank board when it meets on Sunday to finalise the swap ratio for the merger.

Based on the preliminary agreement between the country’s largest private bank and some shareholders of BoR, anyone holding 4.7 shares of the old-generation private sector lender will get one share of ICICI Bank.

In this form, the deal, if approved, would increase ICICI Bank’s equity capital by 3.07 per cent, to 1.15 billion shares. The final swap ratio will, however, be based on the valuation and due diligence done by Haribhakti & Co, the valuer appointed jointly by the two banks.