Daily Economic News - 24 April 2014

Finance Ministry to seek Rs 7,000 crore more for bank capitalisation

According to the Reserve Bank of India, state-run banks will need about Rs 4.15 lakh crore - Rs 1.40-1.50 lakh crore of equity and Rs 2.65-2.75 lakh crore in nonequity capital - to meet higher capital requirements under Basel III. The RBI has already postponed the local deadline to fully implement the international regulations by a year to March 31, 2019. The finance ministry will make a pitch for infusing another Rs 7,000 crore of capital in state-run banks when the next government readies its budget for this fiscal year. the government had announced Rs 11,200 crore for bank capitalisation in the fiscal year that started on April 1, less than the Rs 14,000 crore provided in 2013-14.

(Source: The Economic Times)

Projects hit as government fails to notify rules under Land Acquisition Act

Nearly four months have passed since the new Land Acquisition Act came into force, but development projects continue to be stalled since the government has failed to notify the rules to implement the law. No land has been acquired for public purpose under the new law so far because of ambiguity in rules. The law is considered - disastrous for industry as the time frame for acquisition is as high as over 50 months, by which time projects will undergo huge cost escalation.
According to the CII, land acquisition is likely to cost 3-3.5 times more and the rehabilitation and resettlement costs are also likely to go up by about three times, a concern that is shared by some government officials. The most important feature of the law is that it requires the developers to get the consent of up to 80% of the people whose land is acquired for private projects and of 70% of the landowners in the case of public-private partnerships projects. Besides, it provides for compensation as high as four times in rural areas and two times in urban areas.

(Source: The Economic Times)

World Bank nod to $1,100 million loan for rail corridor

The World Bank has sanctioned a loan of USD 1,100 million for construction of 393 km long double line between Mughalsarai - Bhaupur section of Eastern Dedicated Freight Corridor project.
Dedicated Freight Corridor Corporation, a special purpose vehicle (SPV), is engaged in planning, construction, operation and maintenance of the dedicated freight corridors and in the first phase, the two corridors, namely, Eastern Corridor from Ludhiana to Dankuni (1839 kms) and the Western Corridor from Dadri to Jawaharlal Nehru Port (JNPT) (1499 kms) are being constructed.
The entire Western Corridor is being funded by Japan International Cooperation Agency (JICA), while the Eastern Corridor from Mughalsarai to Ludhiana is being funded by the World Bank.

(Source: The Economic Times)

India produces 7.25 MT steel in March: World Steel Association

India, the world's fourth largest steel maker, produced 7.25 million tonnes (MT) or just over five per cent of the total global output in March. The country, however, beat world's average production growth rate in March. While India clocked a 3.9% growth rate in production, world's average growth rate was at 2.7%. India had produced 6.98 MT steel in March last year. China produced nearly half of the global steel production at 70.3 MT in March, up by 2.2% compared to the same month last year. Japan's production stood at 9.7 MT and South Korea's production was 6.1 MT.

(Source: The Economic Times)

Government's ethanol fuel blending plan falls short of target

The government's ambitious plan to blend petrol with 5% ethanol has fallen far short of target, creating problems for sugarmills, which supply the alcohol, and the chemical industry, which is complaining that there is a big shortage in the market. Against the requirement of 105 crore litre of ethanol for mandatory 5% blending with petrol, oil companies have contracted just 62 crore litre, half of which is yet to be lifted from depots.
Ethanol Blending Programme (EBP) was launched to promote green fuel and reduce the oil import bill. The sugar industry has estimated that oil companies could have easily saved Rs 370 crore on their oil import bill if they had blended the 62 crore litre supplied by sugarmills in the past year. The programme has been marred by legal and pricing hiccups throughout last year. To meet their annual demand, oil companies floated two tenders in January and July last year to procure ethanol from sugarmills last year. The Indian sugar industry has the capacity to produce 250 crore litre of alcohol annually. Its major buyers are chemical industry, whose demand is 60 crore litre, potable alcohol industry, which sources 110 crore litre, and oil companies need around 100 crore litre annually.

(Source: The Economic Times)

Thaiindianet.Team

24 April 2014