Gold set for worst May in 30 years, markets edge up

Many commodities were set to end May with their worst showing in years as investors sold off in the sector amid doubts about demand for raw materials and as Europe grappled with a simmering debt crisis.

Some markets inched higher on Thursday, but that did little to ease the losses inflicted during the rest of the month as investors worried about a fragile U.S. economic recovery and hesitation in China to aggressively pump up a similarly sluggish economy.

The Thomson Reuters-Jefferies CRB index, a global benchmark for commodities, was set to end the month with a 10% loss and at its lowest point since September 2010.

Amid the gloomy market sentiment, some investors had correctly bet on the falling markets.

"I'm happy, I'm making a lot of money on that. My managers have been positioned on the short side," said Gabriel Garcin, portfolio manager at Europanel Research & Alternative Asset Management in Paris, which invests in European hedge funds.

Gold was on track to post its worst May performance in 30 years, with bullion's safe-haven appeal crushed by a firmer dollar as Europe's woes pushed the euro to two-year lows.

U.S. crude was due to post its biggest monthly percentage drop since late 2008, Brent oil its steepest in two years and London copper its longest losing streak in a year.

"Until markets can see some light at the end of the tunnel, there's no compelling reason to be too long in risk assets," said Vishnu Varathan, market economist at Mizuho Corporate Bank.

"It does look there is a clear risk that you could see an extended sell-off beyond this month if the euro zone situation doesn't get resolved in an acceptable manner."

Commodities have seen strong outflows from investors in recent months, a sharp contrast to the massive inflows during most of the past decade as institutional investors sought to capture strong growth in emerging markets and diversify their portfolios.

Poor performance last year and early this year have led investors to get frustrated and exit some of the best-known commodity hedge funds, a handful of which have shut down after heavy redemptions.

April saw USD 1.1 billion of outflows in overall commodity investment after USD 2.2 billion the previous month, Barclays has said.

OIL MARKET STILL NERVOUS

London Brent crude edged up near USD 104 a barrel, after hitting a 2012 low of USD 102.85 on Wednesday, but the market was still nervous about the demand outlook and euro zone crisis. For the month, Brent is down more than 13%, the biggest fall since May 2010.

U.S. oil rose just above USD 88 a barrel, but off more than 16% this month, its worst showing since December 2008.

Key industrial metal copper rose slightly, regaining the USD 7,500 per tonne level after hitting a 2012 trough of USD 7,422.75 earlier.

Copper, also worn down by a slower economy in top consumer China, has lost nearly 11% in May, its third monthly loss in a row, the longest monthly losing streak in a year.

"Markets are still divided on what kind of stimulus China will be able to provide. In any case it doesn't look like it will be a credit bonanza that the global economy can feed off on," Varathan said.

Gold

Spot gold inched higher above USD 1,570 an ounce, but was looking to stretch its losses to a fourth month, matching a similar run from October 1999 to January 2000 when gold traded below USD 300.

Rather than acting as a safe haven and moving in line with the dollar and government bonds, as it did for much of 2011, gold has traded more in line with other commodities of late.

The hunt for safe-haven assets in Europe spread to Austrian and French bonds, although European shares and the euro regained some stability.

In agricultural markets, both Chicago corn and soybeans moved higher, although not enough to purge losses this month which are the biggest since September, amid weakness elsewhere.

Chicago Board of Trade July soybeans has lost 8.4% this month and corn has slumped 15%.

Arabica coffee futures on ICE hovered above a 22-month low and was set for a 7.6% loss in May while robusta coffee on Liffe consolidated near an 8-1/2-month high and was poised for a 10.5% monthly jump.

House-hunters beat bandh for Mhada lottery

Mumbai: For Vinayak Pagare, a 40-something businessman owning a travel agency, early afternoon is normally the time he meets prospective clients in his Thane office. But, this Thursday was different for Pagare. Notwithstanding the bandh call to oppose petrol price hike, Pagare and his wife were at Rang Sharada auditorium at 11 am where the lottery to sell 2,593 Maharashtra Housing and Area Development Authority (Mhada) flats was being conducted. 

    "I know winning a lottery is pure luck, but being present at the venue and hoping against hope to win a home were more pressing concerns than that of the bandh,'' said Pagare, after spending a disappointing one-hour watching the giant screen roll out names of successful winners of Mhada lottery. 

    This is the third time Pagare didn't win a flat inthe lottery. 

    Pagare was not the only one. A large number of Mumbaikars—though not in lakhs as in earlier lotteries—had beaten bandh concerns to turn up at the venue. "I wanted to see how the lottery was conducted and was hoping my family wins a flat,'' said Maya Korde, a 30-something film artiste from Goregaon. She, along with her kin, had applied in 10 projects. S B Ballal, a retired professional and his wife, had come all the way from Pune to reach the venue at 11am. 

    The bandh apart, Mhada's decision to reject 11,179 applications over discrepancies in details provided saw angry protests by applicants. According to an aggrieved applicant, Dr Ashok Sabale, "Either Mhada is confused about its own rules or the software is faulty. How can applications of a couple be rejected merely for bearing the same bank account number? Is it not obvious that a working couple like us could hold a joint bank account but have separate PANs?'' 

    Mhada had rejected all six applications made separately by Sabale and his wife. Satish Gavai, Mhada's chief executive officer dismissed the protests as stray incidents. "We were very clear that no concessions would be given this year and that every applicant should hold a unique bank account and a PAN card. We did this as only agents have the financial capacity to apply in multiple projects,'' said Gavai. 

    Prabhu Khot, an accountant who volunteered to work as an observer in the lottery, won an LIG flat in Malwani. Khot won the lottery after applying three times. Similar was the case with Renuka Bhopale, a Mhada employee, who won an MIG flat in Malwani. 

Next draw in 2013 

Mhada is planning another lottery to sell 4,272 flats in 2013. Of these, the bulk of 2,486 flats will be located in Virar for Land MIG flat purchasers. The rest of the flats are located in Kole Kalyan (Santa Cruz), Charkop, Malwani, Powai, Mulund and Kurla and will comprise Economically Weaker Section, LIG and MIG buyers. There will no flats for the HIG.

QUICK CHECK: Hopefuls at the lottery

Economy gasps as growth sputters to 9-yr low of 5.3% 6.5% GDP Rate In 2011-12 Way Below Govt’s Estimates

New Delhi: India's economic growth has come down to a nine-year low of 5.3% in the January-March quarter of this year, showing up in bolder relief than ever before the signs of the severe stress in the economy, and prompting calls for urgent action to reverse the trend. 

    Data released by the Central Statistics Office (CSO) on Thursday showed growth in 2011-12 stood at 6.5%, much lower than the 8.4% posted in the previous year. It was below the government's previous estimate of 

6.9% and way off the mark of estimates handed out periodically by top government policymakers. 

    The Indian economy, once the star among emerging market economies, has steadily slowed since the January-March quarter of 2010-11, and on Thursday after digesting the January-March growth figure of 5.3%, some economists cut their growth estimates for 2012-13. 

    The manufacturing sector growth fell 0.3% in the March quarter compared to an expansion of 7.3% in the corresponding period the previous year. Agriculture posted a growth of 1.7%, sharply lower than the 7.5% growth in the March quarter of 2010-11 For the full year, the manufacturing sector grew 2.5% in 2011-12 compared with 7.6% in 2010-11. 

SLUGGISH ELEPHANT March quarter GDP growth at 5.3%, against 9.2% in Q4 of 2010-11 

Manufacturing scrapes the bottom with 0.3% decline, agriculture grows just 1.7%, services slow down to 7.9% from 10.6% 

Overall 2011-12 growth at 6.5%, lower than estimates of 6.9% Economists are scaling down growth projection 

for 2012-13 

Industry in gloom. Says govt should pull out all stops to stem the slide 

Growth in core sectors slows to 2.2% in April 

    Growth in the eight core industries slowed in April, pointing to a rut. Coal, crude oil, natural gas, refinery products, fertilizers, steel, cement and electricity grew 2.2% in April, lower than the 4.2% posted in the same month last year. P 19 

Govt in denial? FM hints that the worst is over 

    The finance ministry seemed to be in denial on Thursday, with officials saying India was still growing faster than many Eurozone countries. Pranab Mukherjee too suggested the worst was over, saying the factors for sluggishness had "bottomed out". P 19 Experts urge govt to step up reforms

New Delhi:The slide in the economic growth has led to calls for quick action on the part of the government. The sluggishness in the services sector, which accounts for nearly 60% of GDP, emerged as a worry for policymakers already burdened by the slowing economy and stubborn inflation. Data showed the services sector growth slowed to 7.9% in the March quarter compared with a10.6% expansion in the sameyear-ago period. The domestic demand-driven economy has been hit hard by high inflation, interest rates, rising global commodity prices, lack of economic reforms and delay in implementation of projects. This, in turn, has hit business confidence, forcing domestic players to explore investment options overseas. 

    Policymakers have consistently blamed the global economic environment and the lack of cooperation from the opposition in approving key economic legislations as reasons for the slowdown. The March quarter data came on a day when the opposition had called for a shutdown to protest the sharp increase in petrol prices. Analysts say the disappointing growth numbers could spoil the mood further and heighten the anxiety. 

    Finance Minister Pranab Mukherjee termed the March quarter data as disappointing but said the figures should be seen in the light of overall global developments. He attributed the slowdown to tight monetary policy and the weak global sentiment affected growth in domestic private investment. 

    But economists pointed to two key risks which included uncertainty about the monsoons and the European debt crisis and said the need of the hour was to step up reforms and ease supply bottlenecks.

COME AGAIN? 

There are several reasons that growth is almost universally predicted to be sustained at a high rate of 8-9% per annum and more, over the next few decades... —PRANAB MUKHERJEE ON AUG 6, 2011

MHADA lottery 2012 declares 2,593 winners; check your luck

Mumbai: The Maharashtra Housing and Area Development Authority (MHADA) has announced the lucky-draw results for MHADA lottery 2012, for the sale of 2,593 flats in Mira Raod, Sion, Borivali, Kurla, Charkop areas of Maharashtra. The results are available at the Board's front office at Bandra.

https://lottery.mhada.gov.in/results/publishdata/MUMLOTMAY2012/draw/MUMLOTMAY2012.html#WinnerList

https://lottery.mhada.gov.in/results/publishdata/MUMLOTMAY2012/draw/MUMLOTMAY2012.html#WaitList

MHADA is expected to upload the results over website: http://mhada.maharashtra.gov.in/.

MHADA lottery 2012 are mainly targeted at low-income group (LIG) and middle income group (MIG) category - only 172 for high income group (HIG).

To avoid any scam-like situation, MHADA had cancelled over 6,000 applications over discrepancies in the details provided in the application.

Mhada rejects 11k lottery applications

Mumbai:The Maharashtra Housing and Area Development Authority (Mhada) has rejected 11,179 forms of those who had applied for 2,593 flats to be sold through lottery on Thursday. This is the first time that the authority has cancelled so many forms before the lottery was held.      Now, the number of applications has dropped to approximately 1.4 lakh from the earlier over 1.5 lakh.      Mhada officials said the rejection followed a major scam wherein an inquiry committee found that 425 winners of the 2011 lottery had submitted fake addresses and bank account numbers. While 100 winners resubmitted their papers for fresh scrutiny, the committee found that nearly 30 applicants had won the lottery more than once since 2006. Mhada is soon expected to file a FIR against the applicants who submitted fake papers and brokers who are involved in the scam.      According to a Mhada Act provision, the board is supposed to scrutinize the documents before including them in a lottery. However, the board does not invite any enclosures from the applicants as the form is filled online, and hence, the procedure for scrutiny is dropped. This works to certain applicants' advantage as they fill forms repeatedly. "To avoid a repeat of 2011, we insisted that every applicant submits address proof and Permanent Account Number this time," a Mhada spokesperson said.      An analysis revealed that Pratiksha Nagar in Sion was the preferred location for middle-income group category buyers. Mhada has received more than 18,000 applications for the 84 flats in Pratiksha Nagar. Projects at Malwani, Malad received the highest low-income group applications—14,787 for 282 flats while Vinobha Bhave Nagar received 14,339 applications for 137 flats. Powai with 55 flats was the preferred location for 11,897 high-income group buyers.      TURNED DOWN  • Four forms rejected due to wrong names on Demand drafts  • 6,385 applications rejected as a single person has applied under various income groups for same and different projects  • 618 rejected as a single person has applied under SC, ST and general categories for the same project  • 3,995 had same bank account numbers but different names  • 177 bore same Permanent Account Numbers but different names

Pain in Spain drags India Re to new low of 56.23

Currency Loses Over Re 1 In 2 Sessions Mumbai:The rupee breached the 56-level once again to end the day at 56.23 — its lowest close and near its all-time intraday low of 56.38 seen last week. The rupee weakened against the dollar which gained in the international market after trouble in Spain's banks pulled the euro down to atwo-year low.      "Intervention by the Reserve Bank of India prevented the rupee from sinking to a new low against the dollar. Although the domestic currency had come close to its previous low, which is seen as a resistance level, there was no major supply and import demand persisted," said a dealer with a private bank. The rupee, which closed at 55.68 on Tuesday, opened weaker and quickly slipped past the 56-mark to trade around 56.20. Dollar sales by the central bank helped pull back the currency to 56.14 levels, however, fresh bad news from Europe dragged the rupee down to close at its low of 56.23.      Following Wednesday's decline, the rupee has lost more than one rupee in the last two trading sessions and continues to be the worst performing Asian currency although the Indonesian Rupiah and the Malaysian Ringitt also weakened against the dollar.      This week saw some positive developments in Greece where surveys showed that elections may throw up a probailout party. owever, Spain is now turning out to be a bigger worry than Greece. On Wednesday, the Spanish government said that it would infuse 19 billion euros into distressed real estate lender Bankia SA whose troubles had led to a run on Spanish institutions. Also the Bank of Spain warned that the country may sink deeper into a recession. Dealers are worried about Spain because it is a much larger economy and may prove more difficult to bail out by the larger economies of northern Europe.      According to David Joy, chief market strategist, Ameriprise Financial, the present global situation reflects the triumph of fear over valuation. "In Brazil, the Bovespaindex is trading at 9.4x expected 2012 earnings. The S&P 500 is trading at 12.7x. In Europe, the Euro Stoxx 50 index is trading at a 8.9x P/E ratio. Each of these represents a meaningful discount to their long-term averages, but these are not average times. Three full years into the economic recovery, investors' first reaction remains to flee, not to fight," he said in a note.  BROKEN BY BANKIA  tIndian currency weakened due to the euro plunging to a two-year low on bank trouble in Spain, which is turning out to be a bigger worry than Greece  tSpanish govt will infuse 19bn euros into distressed Bankia  tDealers are worried as Spain is a much larger economy and difficult to bail out  tIn the domestic forex market, RBI intervened with dollar sales that prevented the rupee from sinking to another intra-day low tThe slide has ensured rupee's status as the worst  performing Asian currency

INDIA :By 2016, road to Thailand via Myanmar?

Nay Pyi Taw: As India sought to expedite its infrastructural projects in Myanmar, Prime Minister Manmohan Singh and president U Thein Sein for the first time set a deadline, 2016, for trilateral road connectivity which will make it possible to drive right up to Thailand from India via Myanmar. 

    After the Prime Minister's "restricted'' meeting with Thein Sein, who received Singh at his resplendent palace wearing the traditional Burmese g a u n g b a u n g head gear, foreign secretary Ranjan Mathai announced that "efforts would be made to establish seamless trilateral connectivity by 2016". 

    Singh, who had a one-onone with Thein Sein before the delegation talks, said India would undertake the repair of 71 bridges on the Tamu-Kalewa Friendship Road. Road to Thailand, a bridge to Asean nations for India 

Nay Pyi Taw: India and Myanmar have set 2016 as the deadline for a trilateral road connectivity plan. This will make it possible to drive down right up to Thailand. 

    India had earlier helped Myanmar build Tamu-Kalewa Friendship Road and now the plan is to link it with a place called Yargyi which will effectively link Moreh in India to Mae Sot in Thailand. 

    "The two leaders decided that India would undertake upgradation of the Kalewa-Yargyi road segment to highway standard, while Myanmar would undertake upgradation of the Yargyi-Monywa stretch to highway standard by 2016," Mathai said, adding that the two leaders welcomed the revival of the Joint Task Force on the trilateral highway. Indian officials believe that this highway will truly become the bridge between India and Asean countries and place it at the heart of India's Look East policy. Myanmar is the only Asean country with which India shares land boundary. 

    The two leaders decided to constitute a joint working group to determine the technical and commercial feasibility of crossborder rail links and the commercial feasibility of direct shipping links between the two countries. 

    The two sides also discussed the possibility of Indian participation in development of key infrastructure projects such as the Dawei port in Myanmar. 

Manmohan seeks more military cooperation 

Nay Pyi Taw: India is looking at more military cooperation with Myanmar, including an effective intelligence sharing mechanism. In his meeting with president Thein Sein, PM Singh also raised the issue of insurgent activities in India's northeast. The issue was discussed in detail, Indian officials said. "It is felt that we must have necessary intelligence sharing and also must intensify cooperation between our armed forces," foreign secretary Ranjan Mathai said. "The PM raised the issue and the president reiterated that no Indian insurgent group will be allowed to operate from Myanmar and that he fully understands our requirements," he added. TNN

Ratan Tata India’s Most Powerful CEO, Mistry Debuts at No. 15

Vijay Mallya, Sunil Mittal and Anil Ambani among big losers in ET-Corporate Dossier listing

Tata Sons Chairman Ratan Tata heads the ET-Corporate Dossier ranking of India Inc's Most Powerful CEOs for the fourth year running. Set to retire by the end of the year, Tata will leave a vacancy at the top, just as former Infosys chairman NR Narayana Murthy dropped off the list of Most Powerful CEOs only when he ceased to be a chief executive. This year's ranking includes Cyrus Mistry for the first time, at No. 15, by virtue of his appointment as vice-chairman and chairmandesignate of Tata Sons. The annual ranking includes a few other major changes as well, owing mainly to the tumultuous environment that has left several business houses severely mauled. While Mukesh Ambani has managed to retain his position at second place, brother Anil has fallen six positions to 11. Sunil Mittal has had an even more drastic fall, to 16th position from No. 3 last year, mirroring the state of the telecom sector. Kumar Mangalam Birla has, however, not let his problems over the 2G issue eclipse his success in the other sectors, such as retail. The 500 senior executives interviewed by IMRB for the survey have placed him third in the power rankings, up from seven last year. Vijay Mallya has been ejected from the top 10, along with fellow MP Naveen Jindal. Mallya and Jindal have been ranked at 43rd and 17th positions, respectively. Azim Premji has remained rock steady at No. 4 while the fifth position is occupied by banker Chanda Kochhar, who is not only India Inc's Most Powerful Woman but also the list's top professional CEO. After retiring from ICICI Bank, KV Kamath appears in a new avatar in the top 10 this year — as executive chairman of Infosys. The other non-promoter CEO in the top 10 is L&T's AM Naik, who has climbed a massive 23 positions this year, from 30 to seven. The list also features a ranking of global Indian business leaders, with London-based LN Mittal at the top, and Indra Nooyi of Pepsi-Co and Nikesh Arora of Google at No. 2 and 3, respectively. Nobel laureate Amartya Sen heads the separate ranking of global thought leaders. 

For the complete listing of India Inc's Most Powerful CEOs, see today's issue of Corporate Dossier

1.38L APPLY FOR 2,593 APARTMENTS 53 Mumbaikars to fight over each Mhada flat this yr

Mumbai: More than 1.38 lakh prospective buyers submitted their applications for a Maharashtra Housing and Area Development Authority (Mhada) flat at Axis Bank branches on Thursday, the last day to apply for the 2,593 flats on sale. 

    Mhada officials say the response is overwhelming as compared to 2011. In 2011, with 1.31 lakh applicants vying for 4,034 flats, there were roughly 32 applicants trying their luck for each flat. In 2012, the number 

has almost doubled to roughly 53 applicants per flat, as 1.38 lakh applicants vie for a share of 2,593 flats located at Mira Road, Sion, Kurla, Powai, Charkop and Borivli. The final list of category-wise successful applicants will be declared on May 28-29, after the forms are scrutinized for eligibility. Of the 2,593 flats, 1,726 flats are in Mira Road, while 867 are in Sion, Kurla, Borivli, Powai and Charkop. 

    A majority of the flats belong to the low-income group category and only 172 are for the high-income group. 

    To avoid last year's fiasco, where over 300 applicants had submitted fake addresses, Mhada has this year insisted on applicants submitting address proof and a photocopy of their Permanent Account Number. 

    The lowest range of Mhada houses starts from Rs 15 lakh in Kurla and 19 lakh in Malad for 200 sq ft, plus apartments meant for the low-income groups. Even the most expensive 700 sq ft plus two-bedroom apartments for high-income groups cost Rs 55 lakh in Powai and Rs 57 lakh in Borivli, which is far below the market rate of such houses. 

    In comparison, data of under-construction and ready-tomove-in houses by private developers in Mumbai shows that the least expensive house in Mumbai costs Rs 60 lakh, while the price of an average house is as high as Rs 2.18 crore. 

    The response to the lottery is akin to that witnessed in the past three years. In the year 2010, Mhada sold 5.2 lakh forms for over 3,400 flats, of which 3.28 lakh were deposited at Saraswat Bank branches. Similarly, in 2009, 7.56 lakh forms were sold for over 3,000 flats and of these, 4.33 lakh forms were deposited at the bank. In 2008, 1.89 lakh forms were sold for over 2,000 flats and 65,000 forms were deposited at the bank.

Indian cos’ debt more than doubles in 4 yrs

Telecom Rollout, Power Projects & Under-Recoveries Push Up Borrowings

Mumbai: A slew of factors-—funding of under-recoveries by oil marketing companies, investments by power, infrastructure and energy companies, rollout of telecom networks and mergers & acquisitions— drove the debt levels of top 50 Indian companies to Rs 8.5 lakh crore during last fiscal, more than double in four years. 

    A lacklustre stock market and regulatory bottlenecks forced corporates to rely on borrowed capital to fuel their growth plans, increasing the collective debt by 18% over fiscal 2010-11, an analysis by Crisil Ratings showed. 

    In comparison, in FY11 a significant part of the total debt, Rs 7.3 lakh crore, was due to the financing of 3G spectrum by telecom players. Cellular operators paid Rs 1.07 lakh crore for 3G spectrum and broadband airwaves. In FY08, the aggregate debt of the 50 companies, rated by Crisil, stood at Rs 3.8 lakh crore. 

    But in FY12, "debt levels increased primarily in oil & gas and power sectors," said Sudip Sural, director, Crisil Ratings. "In the energy sector, a significant portion of the debt was on account of short-term borrowings by oil marketing companies for funding the rising levels of under-recoveries. And in the power sector, the incremental debt moved in tandem with the increased pace of project execution, mainly in generation and transmission." 

    Seshagiri Rao, joint MD & CFO, JSW Steel, said that when corporate growth is strong, companies often go for expansion, part financed by internal accruals. 

    But a dip in economy impacts business performance and then companies opt for debt financing. Even as the debt level has increased, in an environment of high interest rates, a slowing economy and sluggish revenue growth, the ability to service this debt will remain a challenge, industry observers said. 

    For example, Tata Steel, which has a debt of about Rs 47,700 crore on its books, said that it plans to raise around Rs 19,000 crore as debt to fund its Rs 37,000 crore, sixmillion tonne Odisha project. And in the telecom sector, Vodafone India, which incurred a capex of Rs 6,220 crore in FY12 and had a net debt of Rs 30,000 crore, plans to up its investments in the country. 

    Crisil Ratings predicts the debt level of 50 large corporates rated by it will rise albeit marginally, by about 3-5%, in FY13. 

    However, a lot hinges on government policies, especially in the upcoming sale of 2G spectrum, land acquisitions and mining policies, and investment policy in the fertilizer sector, which could shoot up debt levels further, Sural said. 

    For example, pending government clearances, several projects are stuck at various stages of implementation. Hindalco's greenfield aluminium smelter and 900 MW captive power project, which are linked to Mahan coal mine in Madhya Pradesh, have hit roadblocks on environment approvals. And Ahmedabadbased Adani Group has put its power projects in Gujarat and MP on hold till uncertainties over coal linkages are resolved. 

    Although top corporates are better placed to withstand the challenges of servicing higher debt levels, "the conditions at small and medium size companies could be more difficult," said Dhananjay Sinha of Emkay Global, a domestic broking house. "Build up of inventories and financial dislocations arising from impairment of cash slows are likely to impact this segment more significantly."

MHADA LOTTERY Over 2.1 lakh e-applications submitted for 2,593 houses

Mumbai: The Maharashtra Housing and Area Development Authority (Mhada) has received more than 2.1 lakh applications for 2,593 flats. 

    For the fifth year running, the Mhada has received an enthusiastic response for the flats put up on sale throughout the city. 

    On Wednesday, the last day for online submission, 64,349 forms were received for flats in Mira Road and 1,49,490 applications were submitted for in Sion, Powai, Charkop and Borivli. "Approximately, 1.5 lakh forms have already been deposited in Axis Bank. We expect more applicants 

to come forward on Thursday, which is the last date for submission," said a senior Mhada official. Of the 2,593 flats, 1,726 are in Mira Road while 867 are in Sion, Kurla, Borivli and Charkop. A majority of the flats belong to the low-income group category and only 172 are for the high-income group. 

    The lowest range of Mhada houses (200 sq ft) starts from Rs 15 lakh in Kurla and 19 lakh in Malad. Flats in the high-income group (700 sq ft) cost Rs 55 lakh in Powai and Rs 57 lakh in Borivli. Last year over 1.30 lakh applicants were vying for 4,034 Mhada apartments, while in 2010, 3.28 lakh people applied for 3,449 houses in Mumbai.

Petrol price up 7.92 to 78.58, sharpest hike ever

UPA Allies Call It Unilateral, Ask For A Rollback

NewDelhi:By the time you read this, the price of petrol would have gone up by more than Rs 7.50 a litre across the country. The increase, the steepest-ever, came a day after Parliament's Budget session ended and PM Manmohan Singh talked about the need for "difficult decisions". 

    After adding state taxes, petrol will cost Rs 73.18 a litre in Delhi, Rs 78.58 in Mumbai, Rs 77.88 in Kolkata and Rs 77.53 a litre in Chennai. This marks an increase of around 10% and puts a squeeze of roughly Rs 6,000 a year on a family that spends an average of Rs 5,000 per month on petrol. 

    This is the first upward revision in petrol price since November 4, 2011. The highest increase till now had been Rs 5 per litre. State-run oil marketers twice raised prices by this amount—on May 15, 2011 and May 24, 2008 when the petrol price crossed the Rs 50 a litre mark for the first time. 

    The decision immediately drew 

howls of protest and demands for rollback from parties across the political spectrum, including UPA allies such as Trinamool Congress chief Mamata Banerjee. But the West Bengal chief minister also made it clear that she would not rock the UPA boat. 

    Consumers too voiced their anguish even as they thronged petrol pumps for a "cheaper" tank-up one last time. Police had to be called in to control the spiraling queues in many pumps in Delhi and elsewhere. 

    The announcement of price revision came while oil minister S Jaipal Reddy is away in Turkmenistan to attend a ceremony for signing a fournation gas pipeline deal. 

    Finance minister Pranab Mukherjee laid the onus of the hike on oil marketers. "The decision has been taken. Petrol is a deregulated commodity," he said. 

Congress gambles with middle-class patience... 

    The government seems to be testing the patience of the middle class. But the timing of the shocker of a raise, after seven-and-a-half months, seems political. The next political challenge, elections in BJP-ruled Gujarat and Himachal, are in November and the Congress is hoping the angst will die down by then or better still, the middle class will come to terms with the 'new normal' in petrol prices. P 12 

...But will take credit for 

    1.50 cut expected soon 

    Consumers can look forward to a cut of more than Re 1 in petrol prices by the end of this month, given the trend in the Singapore bulk market. Indeed, government sources said the reduction was already factored in by the state oil firms. "Unless there's a dramatic fall in the rupee's value against the dollar, a reduction of 1 or 1.50 per litre is quite certain. After taxes, it would be around 2 a litre," a source said. P 12 

Re slides to 56.01/$, hits markets, foreign travel 

The rupee continued its free fall against the US dollar, plunging to a new record low of 56.23 on Wednesday. It closed at 56.01. The rupee's weakness now threatens to push India out of the trillion-dollar market capitalization club. The sensex fell 78 points, to end below 16,000. Meanwhile, Indians travelling abroad are spending less since costs, in rupees, have jumped 15-20% in a month. P 19 Do or die measure, contend oil firms 

New Delhi: The government had freed petrol prices in June 2010 when crude came down to around $40 a barrel from a historic high of $147 per barrel in July 2008. But in practice, oil companies do not move without a signal from the parent oil ministry which officially continues to deny any control. 

    Sources said the increase was stage-managed. Oil companies usually review prices on the fifteenth and last day of each month. But Wednesday's increase was announced midweek to take advantage of Reddy's absence after the Parliament session. 

    Reddy reportedly gave his go-ahead for raising petrol prices before leaving for Turkmenistan. His absence gave an opportunity for the government to distance itself from the rise and reinforce the impression that it did not control its price as it was a deregulated fuel. But oil companies described the hike as a "do-or-die" measure. R S Butola, chairman of market leader Indian Oil Corporation, argued that the price had to be increased steeply since they had not revised it for the last seven months even though global prices of crude went up 3.5% and petrol in bulk markets rose 14.5%, even as the rupee continued its slide against the dollar. 

    "All three retailers together piled up a loss of Rs 2,321 crore between the last price hike in November and March 31. Since March alone, we have taken a hit of Rs 2,330 crore. The rupee too has fallen some 3-4%. The government would not have compensated these losses as petrol is a deregulated product," he said. 

    The IOC chairman refused to comment when asked whether he had secured the ministry's nod earlier to raise petrol prices. "We had told the government either it takes back control over petrol or we would have no option but to raise the price steeply. We did what we had to do. There was no choice left for us," he said.

India Plays Spoiler as Global Markets Rally Re’s new low pulls down stocks; Mathematical models show currency could fall below 60 to $

 India stood out like a sore thumb, with the rupee crashing to a new low and stocks falling while the rest of the world rallied on hopes that Europe, the epicentre of financial turmoil, may shift its stance to growth from austerity. 

The effect of the Reserve Bank of India's (RBI) move to curtail currency arbitrage on Monday was short-lived as policy inaction led to Morgan Stanley lowering its forecast for economic growth. The slide resumed when the demand for US dollars from oil importers and a government department hit the market, said traders. 

Finance Minister Pranab Mukherjee left the fate of the currency to market forces, saying, "The government is taking a series of steps. However,managing rupee is market-related... There is a lot of volatility." 

Investors worry that policymakers are running out of ammunition to protect the currency, which is already down about a quarter since last July despite curbs on speculation. 

"It seems all grim," Morgan Stanley's Ridham Desai said in a note. "The macro mix exposes India to global events more than it may choose to." 

Morgan forecasts current account deficit — the excess of imports over exports — and fiscal deficit to fall this year, which will help equities. 

The rupee fell 0.7% to 55.39 per dollar at close, after touching an all-time low of 55.47. The Sensex lost 1% to end at 16,026.41, its lowest level since January 9, and is off 13% from its February 21 high, Bloomberg data shows. 

Fitch Ratings' downgrade of Japan's long-term local currency by a notch, and Morgan Stanley reducing India's growth forecast to 6.3% from 7% for fiscal 2013 weakened investor sentiment. While stocks and currencies of most countries are weakening as investors fear Greece's exit from the euro could lead to a financial catastrophe, India is faring worse since its deteriorating macroeconomic fundamentals are multiplying woes. The enormous demand for imported products, with the government subsidising oil prices, and the sudden stoppage of overseas fund flows are pressuring the rupee. The government needs to lure foreign investors with friendly policies. 

"The next target we are looking at is 56 per dollar," said Navin Raghuwanshi, senior VP, Development Credit Bank. India may be De-coupled 

"Sixty per dollar looks very ambitious at this point, though with what we have seen in the recent past, nothing seems impossible. I think, alarm bells may start ringing at 56-57 per dollar, and the regulators may do something drastic at that point to stop the fall." 

The Stoxx Europe 600 Index rose 1.2% and the MSCI All-Country World Index climbed 0.5% on hopes that Wednesday's meeting of European leaders in Brussels could throw up some plan to save the euro. European leaders will do "everything necessary" to keep Greece in the euro grouping, German Finance Minister Wolfgang Schaeuble had said. But India may be de-coupled since it faces its own set of macro troubles. 

The RBI has probably used up most of the tools at its disposal since December last, when rising current account and fiscal deficit triggered an outflow of US dollars. It eased interest rates for non-resident Indians and forced corporates to bring in their dollar earnings. There could be a few more measures up the central bank's sleeve like forcing Indian corporates with surplus in overseas operations to bring in the dollars, though it may be read as a sign of desperation. "The measures taken yesterday were rendered ineffective," said Hariprasad, head of treasury, Centrum Direct. "Rupee is a purely domestic story now, driven by the fundamentals. There is nervousness in the market, and it is very difficult to forecast the levels now. It is a unidirectional fall and markets are looking up to the government now for some clues." Some valuation models of banks show that the currency could fall to 63 to the dollar. Goldman Sachs, which raised the year-end currency target to 50 per dollar from 49, its model shows a lower level. The so-called Goldman Sachs Dynamic Equilibrium Exchange Rate Model, which reflects the global context that captures factors in both the developed and developing world, shows the rupee may fall to as low as 63.5. 

Even the global markets may turn shaky as the Greece sovereign crisis, which has been playing for two years, explodes if the second election in months also leads to a fractured mandate. Some fear that the financial markets may remain volatile with banks shrinking their balance sheets to reduce risk. "Global economies will de-lever for what seems like forever," Bill Gross, managing director and co-CIO of PIMCO, said in a tweet. 

"QEs can only do so much. Careful," he said referring to quantitative easing by the Federal Reserve, a euphemism for printing notes.

RBI may take big bang steps to tame rupee Currency Hits New Low Of 55.47 Against $

Mumbai: The foreign exchange market is bracing itself for sledgehammer measures by the Reserve Bank of India given the sharp depreciation in the rupee in the last few sessions. The rupee further weakened against the dollar to close at 55.40 after hitting 55.47 intra-day on Tuesday following a downgrade of Japan by rating agency Fitch. 

    The rupee, which opened stronger against the dollar, soon started weakening steadily to close at the day's low. Dealers said that none of the central bank's measures to steady the rupee have had an impact. RBI has exhausted close to $20 billion of its reserves in supporting the rupee. It has allowed corporates to pay more on external borrowings, freed interest rates on non-resident deposits, and cracked down on banks going long on the dollar. 

    The most recent measure by RBI was curbs on trade in currency derivatives. Yet the rupee continues to weaken largely on the back of a world-wide dollar rally. 

    The most drastic measures could be limits on dollar purchases which could reduce pressure from importers. It was also widely expected that the central bank would open a separate window to sell dollars directly to oil companies thereby eliminating a large chunk of demand. 

    Besides increased demand for dollars from exporters who are leaving no position "unhedged", the local unit is coming under pressure because of sales by foreign institutional investors who turned net sellers in April 2012. 

    Forex dealers are waiting for the outcome of the Greek election on June 17 which will provide a pointer to whether Greece would continue to remain in the Eurozone. The main concern of the markets is of a disorderly exit—one where there is complete confusion over financial contracts with investors being forced to write off billions. According to Nick Firoozye, Senior Interest Rates Strategist, Nomura, the Greek exit from the euro would be not at all orderly. "Approximately 20% of the world's reserves are in euro, and a larger notional amount of euro swaps are traded that that of than dollar. That is a significant underpinning of the global financial market. An exit would almost automatically be disorderly: you would need to determine the governing law of individual contracts and obligations; whether redenomination is allowed or whether default is inevitable on some, as well as the obligations of central banks and governments. These issues are not at all straightforward —we can try and be as prepared as possible but it is not going to be easy in any way." 

GREXIT DILEMMA

Siddhartha Sanyal | Chief India economist, Barclays 

On Greek exit: The rupee is set to stay under pressure in a risk-off scenario and even a Greek exit from the euro will not improve it in the near term. The hopes of the rupee being favoured with oil prices coming off have not materialized and the only way out at the moment for the rupee seems to be further policy intervention 

On rupee: The exchange rate will be 56 by next month and 54 in three months

Dharmakirti Joshi | Chief economist, Crisil 

On Greek exit: Nervousness in Europe increases volatility in the forex market. We do not know how the situation will unfold in Greece... but the general result would be risk-aversion. The bad news is that our trade deficit is very high and most of our imports are price-inelastic. The good news is that the forex reserves and financial institutions are strong and, with 

    depreciation, Indian 

    assets become 

    attractive 

On rupee: The rupee could firm up to 49 in 8-10 months if there are measures to bring stability to the currency

Shubhada M Rao | President & chief economist, 

Yes Bank 

On Greek exit: The lingering Eurozone concerns may see another bout of intensification (of pressure on the rupee) around mid-June... If Greece fails to come to a consensus, the risk-off environment will prevail. The piecemeal measures and direct intervention by RBI have not been able to arrest the rupee's slide... Perhaps, an incisive and bigbang approach is needed now 

On rupee: The fair value of the rupee should be in the 52-53 range

India may grow 7.8% in ’13: OECD

New Delhi: The Indian economy is expected to grow 7.8% in calendar 2013, but continued policy uncertainty would weaken investment sentiment and result in softer near-term growth and an erosion of longer-run prospects, the Organisation of Economic Cooperation and Development (OECD) said in its economic outlook released on Tuesday. 

    The latest report is optimistic about India's growth prospects against the backdrop of a fragile and uneven global economic recovery. 

    Several other think tanks and economists have cut India's growth estimates due to the slowdown in industrial growth and government's stalled economic reforms. The government expects the economy to expand 7.6% in the current fiscal year which ends in March, but economists say growth could be lower due to the slowdown and the subdued business environment. 

    "A moderate cyclical pick-up in investment is projected in the near term... Later this year and into the next, growth is set to pick up to around trend rates, supported by the delayed effects of the recent monetary policy easing," OECD said in its 2012 Economic Outlook. However, still-high inflation will limit the room for significant further relaxation. The recent widening of the current account deficit will unwind as domestic demand remains relatively subdued and external demand strengthens, the report added. 

    The report said inflation is projected to edge down only gradually, remaining uncomfortably high for some time. "The decision by the government not to raise regulated petroleum prices in line with increases in international oil prices has resulted in oil marketing companies incurring large financial losses," the report said. "It is expected that regulated prices will need to rise significantly this year, contributing to higher, if transitory, inflation. In addition, despite the slowdown, the economy may not be operating with significant spare capacity, as weak investment and inertia in implementing important structural reforms have likely dragged down potential growth," the report said. 

    It said that although inflation has moderated from double-digit rates, it remains relatively high and expected increases in regulated prices of some oil products will add to price pressures that will continue to weigh on household consumption. 

FISCAL PRESCRIPTION 

tOECD remains bullish on growth despite uneven recovery globally 

tPolicy paralysis to hurt investor sentiments, cut near-term growth 

tVital structural reforms would boost confidence, allow a more accommodative monetary policy 

tInflation to remain very high for some time before reducing gradually

Banks’ bad loans rise 54% in FY12 Public Sector Banks Show Sharper Increase In NPAs Than Private Ones

Mumbai:Reflecting the stress in India Inc, net non-performing assets (NPAs) of banks at the aggregate level rose by 53.5% during the quarter ended March 2012, from about Rs 39,200 crore at the end of March 2011 to slightly over Rs 60,100 crore at the end of March 2012. Of the 28 top banks which have announced their results, the rise in net NPAs during the last quarter over the previous quarter was 3.5%, an analysis by Angel Broking showed. 

    One of the main reasons for this sharp jump in NPAs is the loans due to state electricity boards and also Air India. On the sectoral front, metals, textiles and infrastructure sectors were among the major ones to contribute to this slide, banking analysts said. A recent report by PwC India pointed out that while these sectors are under pressure, "banks are also wary of lending to other troubled sectors like aviation, telecom and power, to which they already have sizeable exposure." 

    The sharp rise in NPAs in the banking system, although was expected, has taken a toll on the stock prices of most of these banks with the BSE's banking index now down 11.2% on the year and 11.4% on the month. Among the top banks, SBI is down 16.6% on the year to Rs 1,942 now, and ICICI Bank has lost 22% to Rs 805, but HDFC Bank is up 10.2% to Rs 500 now. 

    Acloser look at the results also throw up some perceptible trends within the banking sector, analysts said. "First of all, gross NPAs of PSU banks have increased to 3.02% of loans by the end of March 2012, from 2.25% a year ago. Similarly, net NPAs have gone up from 1.1% to 1.5% during the same period, indicating that the banks have not been able to provide fully for the fresh NPAs from their operating profits," said Vaibhav Agrawal, VP-research, Angel Broking. 

    The rate of increase in provisioning for bad loans have also not been on a par with the rate of rise in NPAs, leading to a situation where 14 of the 22 PSU banks have provisioning ratio of less than 70%, the minimum rate set by the RBI. 

    Another interesting trend seen among banks is that while PSU banks have seen their loans go bad at a faster clip than their private sector peers, the latter have been steadily improving their asset quality over the past two years. "This is remarkable. Right since the Lehman crisis, private banks have stopped aggressively chasing loans, significantly tightened up their asset appraisal systems and exited or de-focused from risky segments such as unsecured personal loans," Agrawal said. 

    The good news, according to analysts, is that going forward NPA levels are expected to come down. This is because a large number of loan accounts have turned bad because of technical reasons, which is NPA recognition by the core banking solutions, and going by previous experience a substantial chunk of these loans will be recovered soon.

Iran reminds India PM of ‘brotherly ties’

Ahmadinejad Calls Up Manmohan As India Cuts Oil Imports Under US Pressure

New Delhi: In the middle of all the talk here about further reducing crude imports from Iran, and barely a week after US Secretary of State Hillary Clinton's visit to India, Iranian President Mahmoud Ahmadinejad quietly called PM Manmohan Singh urging him to expand bilateral ties in "different fields". 

    Ahmadinejad's call is being seen as a gentle reminder to New Delhi that Iran is looking at the moves being made by India at the highest level. Ahmadinejad spoke to Singh on Monday evening and while he did not get into specifics, he is said to have told the PM that the two countries enjoy "deep brotherly relations" and together they would witness "bright future". 

    In his conversation with Singh, Ahmadinejad insisted that bilateral cooperation between India and Iran would lead to considerable achievements for both nations. Singh too said that widening ties with Iran was on the basis of "national interests". Calling for expansion of cooperation with Iran, he said New Delhi attaches great importance to ties with the country. 

    And, in yet another sign that Iran is trying to reach out to India, despite the oil cut, government sources also said that Tehran is likely to send its foreign minister Ali Akbar Salehi soon to invite Singh for the 16th NAM summit, to be held in Tehran in August, and also for bilateral talks with Ahmadinejad. 

    Iran's foreign ministry joint secretary Ahmed Sobhani, who handles India, is here for the next round of dialogue between the political committees formed by the two countries and is likely to touch upon the issue of a possible meeting between the two leaders later this year. 

    Ahmadinejad's call to Singh comes at a time when India is being seen as giving into pressure from the US to cut its crude imports. While the imports have gone down considerably, the government has painstakingly denied being under pressure from the US and has attributed it to purely financial and commercial considerations. 

    Iran has not reacted officially to India's move to reduce its oil imports, but Ahmadinejad's call to Singh does suggest that Tehran is concerned about any drastic cut. The government has also said in Parliament that it is trying to diversify its crude import sources to "reduce its dependence on any particular region of the world". 

    India depends on Iran for 12% of its 80% crude imports. Iran is one of the most important countries for India in handling war-torn Afghanistan after the ISAF forces pull out in 2014.

Gloom to Deepen: India Inc

ET Poll of Business Leaders As the UPA approaches the third anniversary of its 2nd term in office, big hopes from its victory have all but disappeared 

• Many CEOs actively considering investing overseas 

• UPA expected to retain power in 2014 general elections due to lack of alternative

 India Inc expects the economic climate to turn worse before its gets better, with a deteriorating fiscal situation and a drop in foreign investments likely to define the country in the medium term, an ET Poll of CEOs to gauge business confidence has revealed. 

Along with dimming confidence in the government's ability to steer the country out of the economic morass it finds itself in, the poll of 50 bosses of some of India's most respected companies shows surprising patience — even sympathy — for the UPA, with more than half the respondents expecting it to retain power in the next general elections in 2014. 

Finance Minister Pranab Mukherjee, under whose watch the economy has slipped and who has been criticised by some for presiding over a bad fiscal slippage, high inflation and slowing growth, emerges from the poll looking good. On a scale of one (very poor) to 10 (excellent), Mukherjee is rated six and higher by as many as 29 CEOs. The UPA's troubleshooterin-chief also gets the most votes — at 16 — as the best finance minister in the present situation, 10 more than his predecessor P Chidambaram and far higher than his boss Prime Minister Manmohan Singh, widely viewed as the father of India's economic reforms. Mukherjee also ranked higher than Singh and Gandhi family scions Rahul and Priyanka as a possible prime minister. 

Most poll participants chose to remain anonymous. 

While all this may be music to the ears of the septuagenarian parliamentary veteran, what will not be is the finding that the government's policies and the prevailing economic environment do not inspire too many corporate bosses to step up investments. Twenty-four of the 50 CEOs polled said they were not planning any capital expenditure in India. 

Some are actively considering investing overseas, a prospect that should worry Mukherjee. Harsh Goenka, chairman of conglomerate RPG Enterprises and who was willing to go on record, sums up the mood. "We are increasingly investing outside India. The US and Latin America are much more business-friendly," he says. 

While India Inc looks overseas, the government will not have the comfort of foreign investors looking favourably at India. A resounding majority — 39 CEOs — said they expected foreign direct investment flows to slow down, the government's recent attempts to soothe frayed investor nerves by putting on hold some of its recent controversial tax proposals having no impact on sentiment. 

Low on Confidence, Lower on Certainty 

Forget reforms, forget investments, forget new projects for now. Business confidence is low and the future hazy. Retrospective Tax to Hit India's Image as Biz-friendly Country 

India's attempts to retrospectively tax past overseas M&A transactions and impose an anti-tax avoidance regime have been slammed by foreign investors and governments, many of whom have warned of damage to India's image as a stable and friendly place to do business. The ET Poll showed a majority of CEOs agreeing with that assessment, with a majority of participants of the view that the government was 'going after' Britain's Vodafone Group Plc. 

However, a significant minority — 19 CEOs — disagreed with that view, an indication the government's efforts to force the UK-based mobile phone giant to stump up thousands of crores in taxes were not being universally derided. 

West Bengal Chief Minister Mamata Banerjee, however, is evoking some derision, with as many as 25 CEOs casting her as the biggest stumbling block to growth. Banerjee, a key UPA ally viewed lately as a thorn in its flesh, was notable in her opposition to opening up India's supermarket sector to foreign players and has opposed several other reform moves. 

By becoming the lightning rod of industry criticism, she has managed to help the Congress look good, despite its problems with corruption scandals, leadership crises and governance issues. As many as 26 CEOs said they saw the Congress retaining power in the next general elections, largely because of a lack of alternatives. Asked by ET what the government could do to regain the initiative and spur investor confidence, each CEO had a different prescription. The common wish-list was for coalition politics to work better so that national concerns such as corruption, Maoist violence and the Lokpal Bill are sorted. Some wanted urgent reforms in banking and insurance, power and taxes, while others want FDI in multi-brand retail and aviation to be allowed. 

Rajiv Lall, MD and CEO of IDFC, said the government should introduce administrative reforms that will improve the delivery of public projects and services. 

"Remove hurdles that are before big projects. Some of the environmental groups need to be investigated and punished. They should not be tolerated and they are harming India's interests," says Raju Shroff, chairman of chemicals firm United Phosphorus.

Property tax relief for new city bldgs

Mumbai: Succumbing to pressure from citizens, the BMC on Thursday tabled a watered-down property tax system before the standing committee, ensuring that taxes will be lower than those proposed earlier. Residents of pre-1996 buildings will see rates double, while those living in buildings built from 1996 to 2004 will see rates rise by 10 to 70%. Residents of newer buildings, those built after 2004, will see rates drop 30 to 60%. 

    The new tax system – which will be in effect from April 1, 2010, when the BMC started giving provisional bills – has been brought in to rationalize taxes. 

    Under the former, ratable value system, property tax was calculated according to the rent a unit commanded during the first year of its existence. New system based on Ready Reckoner rates 

Mumbai: Since the old system was based on the first-year rents, older buildings paid far lesser taxes than newer ones, until the property tax chart became lopsided. Older buildings, especially those in the island city, paid much lower taxes than many suburban constructions. 

    The civic standing committee on Thursday approved the new capital-value system, which bases taxes for all buildings (old and new) according to 

the Ready Reckoner rate. Bills will be issued retrospectively within the next three months. The civic body will return the excess money charged in provisional bills with 6.25% interest. 

    The watered-down taxation system for residential units will be based on a formula that takes into account 0.00348% of the Ready Reckoner rate and not the proposed 0.00412%, which had been struck down by the standing committee earlier this year. 

    The new rates will affect 6.62 lakh residential units of the 14 lakh in the city. Of the 6.6 lakh units, 3.87 lakh (or 27% of 14 lakh) will see reductions ranging from 30-40% and 50-60%. The reduced rates will especially benefit buildings that came up after 2005. Redeveloped buildings will be treated as new buildings. 

    Another 2.75 lakh units (19%) will see property rates rising up to 100%. Most are old houses that pay Rs 2,000 a year in tax; their rates will increase to Rs 4,000. The maximum number of such structures are found in the Andheri-Parle (West) area (50,000), the Bandra-Khar-Santa Cruz (West) area (34,000) and the Esplanade-Fort-Colaba area (11,000). 

    The remaining 7.4 lakh of the city's 14 lakh units are less than 500 sq ft (including in slums and chawls) and hence won't see any change in billing. 

    The buildings that will see lower increases or reductions are those that mushroomed after 1995, when the slum rehabilitation scheme was announced. Around 1998-99, buildings started mushrooming in Bandra, Khar, Santa Cruz, Andheri, Malad, Kandivli, Borivli and Dahisar. Around 2004, suburban Goregaon began getting new buildings. 

    In the island city, cessed buildings began to be redeveloped around 1998-99. Around 2004-05, mill areas in Dadar, Worli and Parel saw development. At the same time, Malabar Hill and Nepean Sea 

Road began getting new residential buildings. 

    The upside of the new system is that citizens can calculate their own taxes and pay them online. The civic body, which hopes for a better recovery, aims to increase revenue collection by Rs 356 crore. Currently, it collects Rs 2,800 crore from 55% of the properties. Officials are hopeful for an 85% recovery. (See box for payment formula.) 

    The suburbs will benefit more, said officials, due to the presence of more new buildings. However, the overall impact of the new system, said officials, will take some time to be ascertained. "As of today, we have just fixed the rate of property tax at 0.00348 % However, its area-wise impact across the suburbs will take time to be assessed. This, however, is auniform rate that doesn't differentiate between the suburbs and city, and hence the difference in rates will reduce," said an official. 

    Additional municipal commissioner Rajiv Jalota said the new system would ensure transparency since citizens will compute their own taxes. "People will be able to verify and calculate the taxes based on their property. This should ensure better recovery," he said. 

    The BMC is deliberating a suggestion to not issue a penalty for delay in payment of taxes this year and is likely to extend the due date to March 2013. 

RATIONALIZING THE TAX 

    Till now, property taxes were based on the rent a unit attracted during the first year of its existence. Buildings built in the 1940s and earlier, paid according to rents frozen in the 1940s 

    As rents ballooned, newer buildings paid higher taxes 

    With all buildings (old and new) now paying tax according to the Ready Reckoner rates, taxes will be rationalized. Older buildings will see increases, newer buildings reductions 

CALCULATING THE NEW TAX 

    Capital value = Built-up area in sq m* x Ready Reckoner rate x user type (residential or commercial) x construction type x age x floor Property Tax = Capital value x 0.00348% of Ready Reckoner rate * Carpet area x 1.2

High Court restrains Mhada from selling 1% flats through lottery

Mumbai: The Bombay high court on Thursday asked the Maharashtra Housing and Area Development Authority (Mhada) not to put up all its flats for sale through lottery to be held on May 31, but to set aside 1% for the disabled. This is the second year that the HC has sent the order to the government agency. Currently, 2,593 flats are up for allotment. 

    A division bench of Chief Justice Mohit Shah and Justice Nitin Jamdar was hearing a petition filed by an NGO, India Centre for Human Rights and Law, stating that Mhada reserved only 2% against the required 3% of its flats for the disabled. The NGO's advocate, Kranti L C, argued that in 2010, the State Coordination Committee on Disability had directed Mhada to increase the quota from 2% to 3% but the agency was yet to comply. "As they had not done it last year, the court had restrained the sale of 1% of its total flats. Similar direction should be passed this year," he said. 

    Kranti also submitted that though the court had directed Mhada to rework its definition of disability to be inclusive of seven categories provided in the Persons with Disabilities Act, the agency have out flats to just two categories, blind and low vision. 

    Deferring the hearing beyond vacation, the judges directed Mhada to amend its definition of disability as well not to draw lots for 1% of its total flats.

Chavan nod for Mhada JV policy

Mumbai: Chief minister Prithviraj Chavan on Wednesday gave a green signal to the Maharashtra Housing and Area Development Authority (Mhada)'s new policy to jointly develop affordable houses with private players by giving them a higher FSI in lieu of transferring the ownership of land to the housing board.

    According to the new policy, land owners/developers will be given a higher share of the floor space index (FSI) of 2.5 if they jointly develop plots of 2,000 sq m with Mhada. Developers will now get 1.75 FSI instead of the usual 1. In return, the private land will have to be transferred in Mhada's name and the developer will have to construct flats for Mhada from the latter's share of 0.75 FSI, for which the housing body will pay at the prevailing construction cost.

Mhada sets up new website for flat applicants

Mumbai: The Maharashtra Housing and Area Development Authority (Mhada) has set up an alternative website––www.mhada.org-––for prospective buyers to download application forms for Mhada flats. 

    The new website was set up as technical glitches had marred prospective buyers efforts to access https://lottery. mhada.gov.in, the link to download the forms for two consecutive days till Thursday. 

    With both websites working smoothly, Mhada on Friday received 26 applications for flats at Mira Road while 86 applications were received for flats in Kurla, Borivli and Sion. 

    Mhada has invited online applications for the sale of 2,593 flats across the city from May 3 to May 24. Even as the technical glitches 

were rectified, the minister of state for housing Sachin Ahir said he had sought a detailed inquiry report in the matter from Mhada vicepresident, Satish Gavai. Sources said the technical snag arose as there had been a delay in registering the domain name for the Mhada website. According to the procedure, one has to give 48 hours' notice, which did not happen. Apart from this, the anti-hacking software was not compatible and thus did not load. 

    Mhada, however, has defended its website. "Since it is the first day of applications, there is a lot of rush and the website could not take such a huge load," said Vaishali Wagh, public relations officer, Mhada. 

    With real estate rates at astronomical levels, Mhada houses are in demand as they cost less than half of what private builders charge. This can be gauged from the fact that 12,216 houses for sale in the past four years attracted more 

than nine lakh applications. 

    To eliminate errors in filing of application forms experienced in the previous lotteries, two years ago, online filing was made compulsory. "I wasted the entire morning to access the website. I hope this does not happen again," said Sunil Apte, a government employee. 

    "This is the second year in a row that a premier agency like Mhada has been unable to beef up its website. I dread to think of the various difficulties I would encounter if I do win a flat," said Aaruni Shah, who works for a film production firm.

Reliance Fined 6,600 cr for D6 Output Fall Trouble Escalates Oilmin chides Mukesh Ambani co for wilfully drilling fewer wells than committed

 The government has slapped a hefty penalty of about . 6,600 crore ($1.235 billion) on Reliance Industries for the steep fall in gas output from the KG-D6 block, sharply escalating the oil ministry's raging dispute with the Mukesh Ambani-controlled company. 

The oil ministry sent a notice to Reliance Industries late on Wednesday, admonishing it for the decline in production and said the company had violated the production sharing contract (PSC) and wilfully drilled fewer wells than what it had committed in its approved plan, called the Amended Initial Development Plan (AIDP). The company says unexpected geology caused the decline in production and data has established that drilling more wells would not help, but the oil ministry has firmly rejected this. 

"This is to bring to your notice that you have failed to fulfil your obligations under the terms of the PSC and have deliberately and wilfully caused breaches, which have led to immense loss and prejudice to the government and the people of India. You have, over a period of time, failed to adhere to the terms of the PSC and have repeatedly failed to meet your targets under the PSC," the oil ministry said in the sternly worded notice. 

The oil ministry spokesman declined comment while RIL did not respond to emailed queries. Exploration industry executives said the ministry's action would hit investment in the sector and force companies such as ONGC and GSPC, which operate blocks adjoining RIL's D6 block, to account for such an eventuality when they develop their fields. RIL has had a rocky relationship with the Centre ever since Jaipal Reddy replaced Murli Deora as oil minister in January last year. Its approvals have been delayed; top company executives have had to wait for months to meet bureaucrats; and its proposed pricing formula for coal bed methane has not been cleared for a long time. The penalty of $1.235 billion has two components: $457 million for lower production in 2010-11, and $778 million for 2011-12 when output fell further. Gas Output Likely to Dip Further 

Gas production is expected to dip further in the current fiscal. The government wants to deduct the amount from Reliance's share of profit from the field as it feels the company should be punished for building excessive infrastructure, which is now idling. RIL executives say the same facilities will be fully utilised and help cut costs drastically when it develops 16 new discoveries in the same block. 

RIL had initiated arbitration in November last year in anticipation of financial penalties for falling gas output. But the oil ministry rubbished the arbitration notice, saying it had not taken any adverse action. The company had argued the PSC allows it to recover its entire investment from the sale of gas, independent of the actual production. 

The ministry has a different view. "You have also failed to take any steps and efforts to achieve the targets of gas production envisaged in the approved AIDP and have been interested only to recover your costs. You have been instructed time and again … to adhere to the commitments in terms of the approved AIDP. However, you have till date failed to satisfactorily respond and perform its obligations in terms of Good International Petroleum Industry Practices," it said. 

The oil ministry allows companies to recover their investment from the sale of oil and gas they discover. If the company does not discover any oil or gas, it loses all the money. In the case of Reliance, the oil ministry says it has to restrict the recovery of costs. India's national auditor, the Comptroller and Auditor General (CAG), had earlier criticised the oil ministry for being too lenient with private oil companies such as Reliance Industries and Cairn India. The CAG, however, had not quantified the loss caused to the government in the D6 block.

Poor adaptability may hit India story

Ranks 23 Out Of 60 Nations In Change Readiness, Experts Say It's Key To Sustained Growth

If India seems to be struggling to manage inflationary pressures and facing a policy paralysis of sorts, blame it on the country's poor preparedness to absorb change. The country's future prospects, too, look gloomy if a newly-devised index is any indication. 

    The Change Readiness Index captures the capability of individual governments, the privatesector andcivilsocieties in 60 developing countries to respond effectively to change. It ranks India at a low 23, way behind neighbouring China at 13. 

    The index has been devised by Overseas Development Institute, a UK-based development think tank, and KPMG International. It weighs countries on their economic, governance and social capabilities to handle change, tracking key parameters such as investment climate, labour markets, public administration, risk management and active civil society participation. 

    The ability to cope with change, analysts believe, is a good indicator to determine whether a country would have "sustained growth in the long run". India is on its most shaky ground as far as social capability is concerned, with a ranking of 39. That puts it behind all other BRICS nations—Brazil, Russia, China and South Africa. This puts to question the country's investment in human capital—education, skill training and safety nets to reduce citizens' burden arising from labour market volatility, crime and social disruptions. 

    The index throws up a few surprises with countries that have seen recent upheavals being ranked higher. Tunisia, for instance, stands at No. 2 and Syria at 14. "Syria's ranking is unexpected, given its current state," admits the report, pointing outthatthiscould mean that it is equipped for sustainable development once peace is re-established. 

    The index also shows that better outcome measures may not necessarily translate into better change adaptability. This is best brought out through the disparity between Brazil and Chile in South America. While Brazil may seem like the more robust economy, Chile, with its efficient financial market and investment attractiveness, leads the 60 nations in the index and has better mechanisms to adapt to change than Brazil, ranked at 31. 

    The report points out that adaptability to change has emerged as an important facet, given the recent impact of the food, fuel and financial crises.

Rupee breaches 53-mark vs $, may fall to 55

Mumbai: The rupee on Wednesday breached a major resistance level, falling below the 53-mark against the dollar for the first time this year in intra-day trade. The plunge led forex dealers to believe that the currency is now headed toward 55 levels against the dollar. 

    With the trade deficit worsening due to lower-than-expected exports and foreign investors continuing to sell, there does not appear to be any support for the rupee in sight. The local currency has been the second worst performer in April vis-à-vis the US dollar. 

    Although the rupee firmed up to 52.55 earlier in the day, it soon slipped to 53.03 following a sell-off in the equity market and with the dollar gaining overseas. TNN

Mhada lottery for 2,593 flats on May 31

Mumbai: After almost a year's break, the Maharashtra Housing and Area Development Authority (Mhada) will conduct a lottery for the sale of 2,593 flats on May 31. Of these, 1,726 flats are in Mira Road while 867 are located in Sion, Kurla, Borivli and Charkop. 

    It seems Mhada has learnt its lessons as the flats put up for sale are ready for occupation. 

    A majority of the flats belong to the low-income group category and only 172 are for the high-income group. Applications can be downloaded from the Mhada website from May 3. The last date to submit completed application forms in Axis Bank with the earnest money deposit is May 23. 

    The flat winners will have to pay 3.09% as VAT and 1% as service tax in addition to the cost of the house. TNN

Born too soon? Doomed in India

Over 3L Of 35L Pre-Term Babies Died In 2010, Figure Highest In the World

New Delhi: India recorded the highest number of deaths of preemies, or babies born before time, in 2010. 

    India ranked worst in a global report card "Born Too Soon," published jointly by the World Health Organization and Save the Children, with records suggesting 35 lakh children were born pre-term in the country in 2010. Of these, 3.03 lakh children died due to complications associated with being born before time. 

    Nigeria is ranked second on this list, accounting for 83,400 deaths of pre-term babies. In comparison, Pakistan 

recorded 72,000 infant deaths due to pre-term complications, China 57,200, Bangladesh 

36,900 Afghanistan 21,200, Nepal 10,400 and Sri Lanka 600. 

    About 13% of all births in India were pre-term. And nearly 35% of all global pre-term babies were born in India. The countries with the highest number of pre-term births are India (35.19 lakh), China (11.7 lakh), Nigeria (7.7 lakh), Pakistan (7.48 lakh), Indonesia (6.75 lakh), and the US (5.17 lakh).

    The report says prematurity is the leading cause of newborn deaths, and now the second leading cause of death after pneumonia children under five years. It pointed out that globally, 1.5 crore babies are born too soon every year. In absolute numbers, more than one in 10 babies were born pre-term. 

    Over 10 lakh children died due to complications of preterm birth. Many of those who survived faced a lifetime of disability, including learning disabilities and visual and hearing problems. Save the Children India CEO Thomas Chandy said many factors such as early marriage, inadequate nutritional intake by the pregnant and lack of adequate health interventions were among the reasons for such a high rate of pre-term pregnancy, exposing both mother and baby to risk.