Highlights of  Current Economic Scene

AGRICULTURE  

According to latest Crop Weather Watch Report published by Ministry of Agriculture as on December 28, 2007, rabi sowings have seen a drop in coverage of major crops due to dry weather and severe shortage of di-ammonium phosphate (DAP) at the time of sowing. The wheat plantation, so far during this year, has covered 249.34 lakh hectares as against that of 263.31 lakh hectares during the same period last season and 279.84 lakh hectares for the whole of 2006-07. Area under rapeseed-mustard has dropped at 81.94 lakh hectares over last year cumulative figure of 90.43 hectares. Besides, acreages for sunflower have declined from 10.33 lakh hectares to 8.63 lakh hectares, for groundnut from 4.95 to 4.69 lakh hectares, for safflower from 3.38 to 2.87 lakh hectares and for linseed from 4.95 to 4.69 lakh hectares. While sown acreages covered under gram have fallen from 76.52 lakh hectares to 75.12 lakh hectares, the total area sown under all the rabi pulses has dipped from 124.32 lakh hectares to 121.32lakh hectares, However, area under the plantation of urad has gone up from 5.42 lakh hectares to 6.75 lakh hectares, that of moong from 3.0 lakh hectares to 3.16 lakh hectares and lathyrus from 4.51 lakh hectares to 4.89 lakh hectares. On the other hand, area under coarse cereals like jowar has touched 46.16 lakh hectares as against the 47.12-lakh hectares of the corresponding period of 2006, while acreage under maize has gone up from 7.41 lakh hectares to 9.78 lakh hectares and that of barley from 6.39 lakh hectares to 6.89 lakh hectares.

Food Corporation of India (FCI), the government’s grain procurement and distribution agency, is earning Rs 85 lakh per month (annually Rs 10.25 crore) from renting out its surplus storage capacity created by the deficit of stocks. FCI has storage capacity of 24.1 million tonnes spread across various states of which 15.1 million tonnes is owned while rest is hired. Due to low stocks, it has surplus storage capacity in excess of 2 million tonnes of which it has rented out 407,085 tonnes to various companies and state agencies. The surplus warehouse space is located in states like Haryana, Uttar Pradesh, Uttarakhand, Rajasthan, Maharashtra, Gujarat and Andhra Pradesh.

Food Corporation of India (FCI) has set a tentative procurement target of 27.6 million tonnes for rice for the current season. The rice procurement by governmental agencies had slipped down form 27.6 million tonnes in 2005-06 to 25.1 million tonnes in 2006-07. FCI has 11.92 million tonnes during the current marketing season (October-September) by December 26, 2007 as compared with last year’s corresponding quantity of 12.18 million tonnes interpreting shortage of 260,000 tonnes. The gap in rice procurement is significantly lagging behind from last year purchase but it has been picking up slowly owing to higher purchase from states such as Uttar Pradesh and Orissa. 

As per the notification dated on December 24, 2007 issued by the Director-General of Foreign Trade, India has extended a ban on the import of palm oil (either refined or non-refined, but not processed chemically) to all ports in southern Kerala due to adverse effect implied on the prices of coconut oil. As per the industrial experts, the ban on palm imports was needed during the year upto June 2007 –08, in the back drop of coconut oil prices dropping over the past two years and in anticipation of better coconut production in the domestic economy. However, the Kochi ban has increased the transport cost to Kerala.

The central government has plans raise the quantum of sugar stocks for which it would pick up the tab to help ailing mills swamped by excess inventories. It would also extend freight incentives to domestic sugar mills so that sugar exports would increase.

The state government of Bihar has announced a cash subsidy of Rs 47 crore to help mills located in the state to clear their sugarcane arrears and has also reduced the zonal development commission payable by mills on sugarcane from 1.8 per cent to 0.45 per cent in the ongoing sugar season. Each one of the 9 sugar mills operated by the state would get a cash subsidy of Rs 7 per quintal for the total sugarcane crushed in the last season. Mills in the state owe Rs 90 crore to farmers for the sugarcane they purchased from them during last season. In spite of the provision of this subsidy, sugar mills in the state would still owe about Rs 47 crore to farmers, which are expected to get cleared once they receive the central government announced interest free loans against excise payments. Besides, the state has reduced the per quintal sugarcane price three varieties from Rs 120 to Rs 98 from Rs 115 to Rs 93 and from Rs 111 to Rs 86 for the current sugar season (October-September) 2007-08.

According to spice board, export of spices and its products from India during April – November 2007 has increased by 26 per cent in terms of value and 20 per cent in terms of volume over the figures of the corresponding period of 2006. Total shipments of spices and its products during the first 8 months of the current fiscal year have been estimated to be 2,86,302 tonnes valued at Rs 2,840.03 crore as against 2,38,334 tonnes valued at Rs 2,255.13 crore during the same period a year ago. It has been recorded that there is a tangible increase in the exports of pepper, curry powder & paste, condiments, mint products and oleoresins.

According to Rubber Board projections, domestic rubber output would reach to 895,000 tonnes while consumption is pegged at 891,000 tonnes during 2008-09 (April – March), whereas carryover stocks would be around 180,000 tonnes. Consequently, the prices of commodity are expected to remain under pressure during the next year. Global rubber industry output is expected to be at 10.31 million tonnes in 2008 as compared with 9.80 million tonnes a year ago. Consumption is estimated to be at 9.97 million tonnes as compared with that of 9.73 million tonnes in the previous year.  Natural rubber import in India is expected to be over 90,000 tonnes in financial year 2007-08 as compared with 87,000 tonnes in last year.

According to the estimates calculated by the Finance Ministry and Department of Fertilisers, the fertiliser subsidy bill for the current financial year is likely to be around Rs 45,000 crore as against the earlier estimates of Rs 48,000 crore, including arrears of Rs 8,000 crore that was carried forward from the previous fiscal year. The fall in subsidy estimates is due to rupee appreciation that has absorbed part of the rise in international fertiliser prices and anticipated lower import. As per the estimates, around 6.7 million tonnes of urea would be imported, while the imports of diammonium phosphate (DAP) and muriate of potash (MOP) are likely to be around 3 million tonnes each by the end of March 2008. The total imports would be lesser by around 2-3 per cent by the end of the financial year. It is prescribed that the government’s subsidy bill would go up by at least 30 per cent for the next financial year, on account of rising global prices of DAP and MOP, which have a share of 50 per cent on the total subsidy bill.

According to report by Kotak commodity, the prices of agricultural commodities are expected to remain firm in 2008 on the back of low global inventories, decrease in acreage and shift in use of biofuel due to high oil prices. It is determined that wheat prices would follow firm global cues. While, higher demand of maize would keep prices firm in domestic market. Prices of oilseeds would be pushed up due to decline in sowing of oilseed crop in rabi season. Turmeric prices are likely to prevail at higher levels until its arrival starts, whereas, arrival delays in peeper could stroke bullish sentiments in the domestic market. Sugar prices, on the contrary, are expected to nosedive during the year.

Industry

The growth of 13.3 per cent in manufacturing sector pushed up the index of industrial production by 11.8 per cent during October 2007 as against 4.5 per cent in October 2006. Mining sector and electricity sector grew by 3.7 per cent and 4.2 per cent during the month. Out of the 17 industries, sixteen industries has registered positive growth. The only industry group, which have registered a negative growth Metal products and Parts. As per use-based classification, the sect oral growth rates in October 2007 over October 2006 are 6.2 per cent in basic goods industries, 20.5 per cent in capital goods and 14.2 per cent in intermediate goods. Consumer goods rose by 12.5 per cent due to substantial increase in the production of consumer durables and consumer non-durables. Consumer durables which was languishing since May 2007 has reported a smart turnaround in October 2007 with a growth of 9.3 per cent as against a marginal rise of 0.2 per cent in October 2006.

Infrastructure

The index of six core infrastructure industries having a combined weight of 26.7 per cent in the index of industrial production registered a slower growth of 4.5 per cent as compared to 9.9 per cent in October 2007. The dismal performance of crude petroleum which decline by 0.1 per cent as against a growth of 9.3 per cent last year, and comparatively lower growth performance of refinery products, electricity, cement, stee lall contributed for the lower rate of growth. However, coal production for the third month in succession registered a faster growth with its production rate registering a growth of 9.2 per cent in October 2007 as against a low growth of 1.9 per cent in October 2006.

Inflation

The annual rate of inflation calculated on a point to point basis, stood at 3.45 per cent for the week ended December 15, 2007 as compared to 3.65 per cent for the previous week or 5.73 per cent as on December 16, 2006. Primary Articles group declined marginally to 222.7 from 223.2 for the previous week. Food articles group decline due to lower price of bajra and fruits and vegetables Index of Fuel, power, light and lubricants remained stationary at the previous week’s level of 328.6. The index of manufactured products dipped by 0.2 per cent due to decline in the prices of textiles, chemicals and chemical products etc.

The final WPI for all commodities had been revised upward from 215.1 to 215.3 for the week ended October 20, 2007. As a result the rate of inflation calculated on a point to pint basis stood at 3.11 per cent as compared to 3.02 per cent provisional.

Banking

Over Rs 1,000 crore is lying unclaimed with banks in India in around 1.03 crore inactive accounts. Banks term money lying in accounts that have been inactive for over 10 years as unclaimed deposits. Interestingly, a bulk of this money is lying in saving deposit accounts. Public sector banks account for more than 90 per cent (Rs 941 crore) of such deposits.

India ’s largest bank State Bank of India is set to further consolidate its position as a banking behemoth with the government and the bank management pushing a proposal to merge its associate banks with the parent. According to officials, which is dominant shareholder of the bank, has approved the plan of merging six associate banks and is keen to see the process being completed swiftly.

Pune-based Janseva Sahakari Bank is acquiring the Koregaon Co-op People’s Bank. The merger will be effective from January 1, 2008. The bank has also proposed the merger of Dindayal Nagarik Sahakari Bank (Khandwa, Madhya Pradesh). If accepted by the RBI, Janseva will be the first non-scheduled urban co-operative bank to become multi-state through the M&A route. Established in 1972 Janaseva Bank has deposits of Rs 566 crore against the lending of Rs 331 crore. With 18 branches and more than 20,000 members it has presence in Pune, Satara, Sangli, Mumbai, Thane and Raigarh.

Insurance

The country’s insurance sector is likely to touch Rs 2,00,000 crore mark by 2010 as against the current Rs 50,000 crore. Both life and non-life insurance sectors are likely to grow by over 200 per cent while the private sector business is likely to grow at 140 per cent due to adoption of aggressive marketing techniques, state-owned insurance companies would grow at 35-40 per cent during the same period, according to industry body Assocham.

Financial Sector

Capital Markets

Primary Market

The largest commodity futures bourse in the country, Multi Commodity Exchange of India (MCX), is all set to hit the primary market with an initial public offering (IPO). MCX would sell 10 per cent  stake, through a mix of fresh shares and an offer for sale, to raise around Rs 500-600 crore.

In terms of number of issues and proceeds raised, the Indian markets have been placed fifth-largest and the seventh-largest, respectively amongst the global markets, according to Ernst and Young data. Globally, IPOs raised a record capital of $255 billion till November in 2007, according to the data. There were as many as 1,739 IPOs during January to November 2007, while another 91 public issues are estimated to have hit the capital markets during December. In India , the largest IPO during the year was by realty giant DLF, which raised about Rs 9,187.50 crore (over $2 billion). E&Y said the strength of the Indian economy, stock market, corporate profits and private equity fuelled IPOs in 2007. During 2006, the Indian market had seen 78 IPOs raising $7.23 billion while in 2007 they raised $8.3-billion through 95 initial public offerings (IPOs).

Transformers and Rectifiers (India) Ltd, a manufacturer of transformers ranging from power generation, transmission, distribution transformers, industrial transformers and a wide range of specialty transformers, on December 28, 2007 made its debut on the capital markets at a premium of 69.89 per cent on the NSE and 50.77 per cent on the BSE. On the NSE, it touched an intra-day high of Rs 790 and a low of Rs 682.30, before closing the day at Rs 726.10. It made a total turnover of Rs 270.9 crore on the NSE. On the BSE, it hit an intra-day high of Rs 813.75 and a low of Rs 685.20 but closed finally for the day at Rs 728.

The Securities and Exchange Board of India (Sebi) has disposed of a complaint against the IPO by Anil Ambani-promoted Reliance Power Ltd (RPL) by asking the promoters to lock-in the entire 20 per cent of their contribution for five years. The Sebi order clears the hurdles ahead of the mega IPO of $2.5 billion to $3 billion, which is expected to hit the markets early next year.   

Secondary Market

The markets witnessed a smart rally last week with the benchmark indices, the BSE sensex and NSE nifty surging by 5.5 per cent each.  In the last week of 2007, the BSE sensex closed with the week-on-week gain of 5.5 per cent at 20,207 and nifty was up 5.43 per cent at 6079 points.  The rally in the market is attributed to the short covering ahead of expiry of derivates contracts in the month of December.  Positive cues from the global markets and strong buying from FIIs and domestic funds led significant up moves across sectors. Small cap stocks witnessed more buying compared to large caps -the BSE Small-cap Index was up 9.2 per cent.    The BSE sensex began the week with a bang on Monday by rising 691 points, and thereafter rallied past the 20,000 mark to touch a high of 20,324.

All the sectoral indices of BSE gained over the week, BSE Metal the highest gained 9.17 per cent on account of rising commodity prices in the international markets, followed by consumer durables-8.51 per cent and BSE Reality by 8.07 per cent. Due to the buoyancy in the markets, there has been buying across sectors.

Foreign institutional investors (FIIs) turned net sellers on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) in the current calendar year so far, while net inflows in the current calendar year, according to the Sebi data, have been at an all-time high of Rs 66,800 crore.  The category-wise turnover data by BSE and NSE, according to the client code or the client type, show net outflows of Rs 2,656 crore, while the data collated by Sebi show net FII inflows of Rs 66,800 crore.  The huge gap between the two figures is because of the compilation of FIIs inflows. The Sebi definition pertains to all activities undertaken by FIIs in the Indian securities market, including trades done in the secondary and primary markets. The FII purchase and sales data compiled by Sebi show the aggregate purchases at Rs 7.97 lakh crore and sales at Rs 7.30 lakh crore, with the purchase netting to Rs 66,800 crore. BSE and NSE show aggregate purchases of Rs 7.28 lakh crore and sales of Rs 7.31 lakh crore, with the sales netting to Rs 2,656 crore.  FIIs were net buyers of Rs 18,854 crore on the secondary markets till October 2007 and turned net sellers, leading to outflows of Rs 13,689 crore in November and Rs 7,825 crore in the current month so far.

FIIs have been net sellers in the last two months to make up the losses on account of the US sub-prime defaults. The secondary market inflows also dried up because of the ban on fresh investments through participatory notes (P-notes) by Sebi last month.  The FII inflows into the primary market compiled by the Business Standard Research Bureau indicate that the net inflows came through the conversion of foreign currency convertible bonds (FCCBs), private placement to qualified institutional placements (QIPs), initial public offers (IPOs), follow-on overseas offers and preferential offers.    Out of the total net inflows in 2007 so far, a whopping 70 per cent or Rs 47,001 crore were invested through three instruments - FCCBs, QIPs and IPOs. The remaining 30 per cent were invested through overseas offers, preferential offers and conversion of warrants. FIIs preferred the primary route largely on account of attractive valuation in the primary issues, says Sudip Bandyopadhyay, the director and CEO of Reliance Money.  Some FIIs are booking profits in the last few months to compensate for losses in other markets and some others are selling it to give dividends and bonus to their investors.    Deven Choksey, the director of Kisan Ratilal Choksey Shares and Securities, said, of late, FIIs had been net sellers in the Indian markets to make up losses in the other markets.  

Fresh investments through participatory notes (P-notes) are flowing into the cash market in huge quantum. The rush of investments is because foreign institutional investors (FIIs) have enough headroom to invest through P-notes.  Sources said some of the recent high-profile IPOs had seen a good amount of money coming in through P-notes, with FIIs, P-notes issues falling within the Sebi’s stipulation. Sebi has restricted P-notes investments in the derivatives market, asking the investors to unwind their positions within 18 months. At the same time, the regulator has permitted P-notes investment in the cash market up to 40 per cent of the FIIs assets under custody.   

The Sebi has amended the equity listing agreement, asking companies to set up an agency to monitor the utilisation of issue proceeds.  In a circular, Sebi has said that it has been decided to amend Clause 49 of the equity listing agreement, requiring the issuer company to place the monitoring report before its audit committee. The audit committee will review the reports and the statements indicating material deviations in the utilisation of issue proceeds and makes appropriate recommendations to the board of the company.       

Investors wealth on the Indian bourses has crossed the Rs 70,00,000-crore milestone for the first time in history. The total wealth, measured in terms of cumulative market capitalisation (m-cap) of all the listed companies on the Bombay Stock Exchange (BSE), has surged to a record high of Rs 70,38,538 crore ($1.7 trillion), the latest data available with the bourses show.  This marks a ten-fold surge in the total market value in just about four-and-a-half years. It stood at about Rs 7,00,000 crore in May 2003. 

The much-awaited real estate investment trusts (REITs), which invest directly in real estate projects after collecting funds from investors through stock exchanges, are set to see their entry in Indian markets after Sebi putting out draft rules for such trusts on December 28, 2007. According to Sebi, Banks, public financial institutions, insurance companies and corporate houses can be trustees of REITs, which should be created under the Indian Trusts Act.

Derivatives

The last settlement of 2007 featured very low volumes but buoyant sentiment as short-covering transformed into what appeared to be selective bullishness. The New Year promises to start on a muted but positive note with the FIIs playing a key role as always.   

Index strategies. Most market regulars appeared to be on holiday in the last week of the settlement as volumes fell drastically in both cash and derivatives markets. There was a fair amount of carryover nevertheless. 

The index futures' high positive carries seem to reflect that expectation. The Nifty closed at 6,080 in spot and the January contract was settled at 6,118 with February at 6,110 and March at 6,100.  There was a fair amount of open interest (OI) expansion. There is not enough differential between the January-February contracts to translate into calendar spreads.    Among other indices, there was no OI in anything except near-term contracts. The Bank Nifty January future was settled at 9,917.6, while the BankNifty closed at 9,828 in spot. The January Junior futures settled at 12,455 while the spot index closed at 12,365. The CNXIT settled at 4821 while the spot closed at 4,824. Also, the daily volatility of most futures contracts (not just indices) is also showing a pattern of volatility that exceeds the cash market considerably. .  In the options market, the put call ratio in terms of OI is now around 1.27. This is a healthy level indicating a fair amount of bullishness. OI has expanded across both puts and calls but overall it is still at a low level, reflecting the low overall trading volumes. This asymmetry reflects bullish sentiment and it affects the return to risk ratio in favour of puts. The most popular option is the 6,000p.  

Government Securities Market

Primary Market

On December 26, 2007, RBI auctioned 91-day and 182-day T-bills for the notified amounts of Rs.500 crore each. The cut-off yields for 91-day and 182-day T-bills were 7.35 per cent and 7.60 per cent respectively.  

Secondary Market

Call money rates are currently close to the RBI repo rate of 7.75 per cent. The tight liquidity situation ahead of the year-end was evident from the large recourse to the RBI’s Repurchase window at the weekend Liquidity Adjustment Facility Auction. At the auctions, there were 24 bids for Rs 33,865 crore on repo.  Daily trade volume in NDS OM remained low at about Rs 4,500 crore. But yield spreads remained narrow. The yield spread between 91-day Treasury bill and 10-year YTM was 50 basis points. The inter-yield spread between one-year and 29 years was only about 45 basis points.

According to bankers, the narrow spread was partly on account of the rush by foreign banks and insurance companies into long-term securities in anticipation of the RBI’s easing of liquidity. Many foreign banks that swapped their dollars parked in long-term Government securities. The chase for long-term securities pushed down the yields of some securities above 10 years. The securities preferred included the 11.60 per cent 2020 per cent at an YTM of 8.04 per cent, about five basis points more than the benchmark 13-year security. Besides, insurers also chased long-term securities. Among the preferred securities were the 8.33 per cent 2036 at an YTM of 8.22 per cent. In fact, many of the life insurers have quietly exited from the equity markets and preferred to wait for the FIIs to begin selling again. The fall in nominal yields has begun reflecting in the one-year real yields. One-year real yield dropped below 4 per cent to 3.95 per cent for the first time in almost 8 weeks. Besides, the fall in real yield was largely due to demand for Government papers due to slack credit offtake. Investment deposit ratio remained above 52 per cent so far this financial year and credit deposit ratio below 50 per cent.

Bond Market

Vijaya Bank tapped the market by issuing lower tier II bonds to mobilise Rs 200 crore by offering 9.35 per cent for 10 years. The bond has been rated AA+ by care and fitch.

PNB Housing Finance Ltd tapped the market by the issuance of bonds by offering 9.30 per cent 10 years for an amount of Rs 100 crore.  The bond has been rated AA+ by crisil and care.

Bank of Baroda is tapping the market by issuance of upper tier II bonds by offering 9.30 per cent for 15 years, with a step-up of 50 bps if call is not exercised at the end of 10-years for an amount of Rs 500 crore. The bond has been rated AAA by crisil.

Foreign Exchange Market

The rupee remained firm against the dollar to Rs 39.43 over the weekend due to inflows from non-resident Indian investors and inward remittances overwhelmed oil demand. Forward premia up to one month, though hardened to 2.4 per cent, in view of large arbitrage flows. The arbitrage flows were mainly driven by foreign banks attempting to take advantage of the tight liquidity because of advance tax payments. The rupee closed at Rs.39.44 per us dollar on December 28, 2007 as compared with Rs. 39.57 per us dollar as on December 20, 2007. The Rupee moved between Rs.39.39 and Rs.39.49, with a standard deviation of 4 paise during the week. The six-month forward premia closed at 1.72 per cent (annualized) on December 28, 2007.

Commodities Futures derivatives

The year 2007 was disappointing for commodity futures and the new year may be worse if the government doesn’t pull up its socks in time. Falling volumes, absence of any initiatives to develop the market and a lack of clarity on many policy related issues have dampened the enthusiasm of players, intermediaries and even exchanges.  One of the important decisions being awaited include giving more powers to the market regulator. The parliamentary committee has recommended more powers to FMC, over those originally suggested by the government. The bill to amend the Forward Contract Regulation Act is pending and needs to be reintroduced in the parliament with changes incorporating the parliamentary committee’s recommendations. According to FMC Chairman B C Khatu, since the market has already grown, giving more powers to the regulator would not hurt anyone’s interest. This should be done with a sense of urgency.

According to Jim Rogers, founder of Rogers International Commodities Index (RICI), the Indian government needs to be taught the meaning of the commodity market to become a top investment destination though it may have a bigger size than the stock market in India .  In the present circumstances, India does not stand a chance to match China , not even for the next five years, in terms of investment opportunities in commodity markets, and one must be very careful because the India government very often interferes and causes problems.

According to analysts, gold prices will rise to a record in 2008, increasing for an unprecedented eighth consecutive year, as investors seek protection from accelerating inflation.  Gold will probably average $800 an ounce, compared with $696 this year, according to the median estimate of 37 traders, analysts and investors surveyed by Bloomberg News.  Gold has gained 30 per cent to $827.20 an ounce in London this year, its best year since 1979, when the Iranian revolution crippled crude-oil exports and US inflation surpassed 13 per cent. 

According to a report by Kotak Commodity, most agricultural commodities will move up during 2008. The report states that factors such as production problems in Canada and Australia (two nations from where India imports pulses and wheat) and the potential for restocking in India and China could firm up the prices. So, the prices of agri commodities are expected to remain firm in 2008 on the back of low global inventories, decrease in acreage and shift in use of biofuels due to high oil prices.

Consumers may continue to pay a hefty premium in 2008 for wheat, maize, edible oil, pepper, turmeric and cardamom. According to report released by United States Department of Agriculture World Agricultural Supply and Demand Estimates (WASDE), the inventory of wheat for 2007-08 are projected lower by 32 million bushels this month, reflecting higher expected domestic use and exports.

Corporate Sector

Leading foreign funds like Fidelity, ABN Amro, HSBC, Nomura Asset Management Fund and Emerging Market Fund have together bought around 7.5 per cent in India ’s third-largest cement firm India Cements for Rs 592 crore.

German auto major Daimler will hold 60 per cent stake in its commercial vehicle joint venture in India , with the Hero group holding the remaining 40 per cent. The total investment in the project will be around Rs 3,500 crore.

Consumer electronic goods maker Videocon Industries is planning to generate 5,000 MW power at en estimated cost of Rs 25,000 crore and is scouting for land in Gujarat, West Bengal and Chhattisgarh. Recently the company has signed memoranda of understanding with West Bengal and Chhattisgarh government to set up power projects.

L&T has bagged three contracts worth Rs 749 crore in Oman . The biggest contract is for the Muscat Golf course valued at Rs 433 crore. The contracts from Dhofar Power and Muscat Electricity Distribution for substations and associated works are worth Rs 315 crore.

Telecom

Mobile tariffs for national long distance calls, which are already the lowest in the world, are set to drop further by 5-10 per cent. This is because from April 1, 2008, telecom companies will no longer have to pay a portion of their total revenues towards access deficit charge (ADC), the levy that is used to fund the BSNL’s operations in rural parts of the country.

International investors, led by Singapore government’s investment arm Temasek, have picked up 8 – 10 per cent stake in Bharti Infratel for $1 billion. Infratel is the recently hived off telecom tower subsidiary of Bharti Airtel. Apart from Temasek, the list includes the Investment Corporation of Dubai , Goldman Sachs, Macquaries, AIF Capital, Citigroup and India Equity Partners.

Information Technology

UK-based Barclays Bank plans to set up a captive unit in India . The bank’s third party BPO partner Intelenet is setting up a 1,000 people BPO centre for the bank in Noida.

*These statistics and the accompanying review are a product arising from the work undertaken under the joint ICICI research centre.org-EPWRF Data Base Project.