Government hikes import duty on gold; ETFs to park some holdings with banks

NEW DELHI/KOLKATA: The government on Monday announced a slew of measures including a hike in import duty on gold and platinum to discourage their consumption. The finance ministry directed gold exchange-traded funds to park a part of their gold holdings with banks so that some demand for these metals is met from domestic sources. It also eased the terms of gold deposit schemes of banks to encourage individuals to deposit their idle gold, which will help increase domestic supply.

See details ET 22nd Jan 13

Government hikes import duty on gold to 6% to curb demand

NEW DELHI: With spiralling demand for gold draining huge amount of foreign exchange, government today hiked the import duty on it from 4 to 6 per cent, a decision that immediately sent prices shooting up. Simultaneously, the government also raised the duty on platinum by a similar percentage from 4 to 6, Economic Affairs Secretary Arvind Mayaram told reporters here as government appealed to the people to moderate their demand for gold.

See details ET 22nd Jan 13

Anil Ambanis Reliance Communications in middle of network sharing deal with Mukeshs RIL
MUMBAI: Anil Ambani's flagship company Reliance Communications (RCOM) is negotiating a network sharing deal with elder brother Mukesh's Reliance Industries that is slated to launch fourth generation (4G) services or high-end data services on mobiles this year. While talks between both sides are at a preliminary stage, Reliance Industries is playing hard to amid internal debates on how and when to launch services. The negotiations are largely over pricing with RIL striking a hard bargain, two executives aware of the development said.

If a deal eventually happens, it is likely to involve RIL leasing capacity on 30,000 out of the 48,000 towers held by Reliance Infratel, the infrastructure arm of Reliance Communications. But any such deal may be at a heavily discounted rate, they said.

See details ET 22nd Jan 13

FMCG companies like HUL, Dabur woo ragpickers to clean up sachets & lighter plastic packaging
MUMBAI: An unlikely partnership between profitable FMCG companies like Hindustan UnileverBSE 1.28 % and DaburBSE 0.27 % and penniless ragpickers is now offering a hint of a fix to India's 12,000 tonnes a day plastic junk pile-up. In an early pilot, HULBSE 1.28 % is trying to create market value for discarded sachets and lighter plastic packaging so that ragpickers find incentive to collect them from the streets. It has also partnered with a company in Chennai to turn such flexible plastic waste into fuel oil at a viable cost. HUL's factory in Pondicherry has been using this fuel to power its boilers. A company spokesperson declined to comment. In the past, ragpickers have helped clean the city of bottles and cans as they get value for it, but largely ignored sachets and lighter plastic packaging that don't fetch any money. But these are big sources of pollution. For example, 2,100 crore worth of shampoo sachets are consumed every year. That figure stood at only 630 crore a decade ago. The Indian Institute of Packaging, a government body, has been advocating that ragpickers be incentivised by leading consumer firms to collect used plastic packets as well. "Brand owners have to take some initiative," says NC Saha, director of IIP. Dabur too has partnered with global packaging firm TetraPak India to mobilise ragpickers to collect discarded packaging of food products. It recycles the waste to create a variety of products, including roofing sheets, office stationery, etc. This isn't restricted to just Dabur brands. Managing waste "Involving ragpickers, we have thrashed out an arrangement for door-to-door collection of waste," says Dabur India's senior ED Jude Magima. "The programme was initially rolled out at the stockist and warehouse level, where ragpickers would collect all the damaged packs from these stockists and warehouses, sort and segregate them and sell them to paper mills.

" Over one lakh ragpickers, who earn Rs 75-100 a day, help partially clear Mumbai of the 8,000 tonnes of waste of all kinds generated daily, says IIP's Saha. The municipal corporation, by itself, will be unable to manage such large volumes of junk. "In smaller towns and pilgrimage places, it's very difficult to manage our waste management initiative," says Ramesh Chauhan, chairman of Bisleri International. Two years ago, Bisleri put in place an elaborate recycling chain that linked ragpickers with companies that could buy and recycle the scrap they collected. An expert committee set up by the ministry of environment and forests almost two years ago had suggested that consumer product makers using plastic packaging should partner local municipality bodies to ensure recycling of waste. The Union environment ministry too had notified new rules for plastic waste management that require municipal authorities to fix a minimum price for carry bags as well as ban the use of plastic sachets for storing, packing or selling chewable tobacco. India should take a cue from Germany's 'polluters pay' programme where manufacturers charge consumers a bit more to incentivise for return of sachets, IIP's Saha adds.

See details ET 22nd Jan 13

India's $100-billion low-cost IT business model 'maxed out', must invest in proprietary software: Constellation Research
BANGALORE: India's $100-billion IT industry must grow beyond mere low-cost delivery of technology work by investing in re-usable, proprietary software if they are to survive fundamental shifts in the outsourcing marketplace, according to latest study from Constellation Research. Increasingly, clients are looking for service providers who can offer business solutions rather than technology services and such a change calls for greater degree of innovation from IT firms, noted the study titled Clients Want Outcomes, Are Indian IT Services Vendors Ready?, released on Monday. "Most IT services firms think in terms of getting the job done for the client instead of creating repeatable and reusable offerings," said Ray Wang, chief executive officer and principal analyst of Constellation Research. "Customers now require more than just staff augmentation, infrastructure, testing and advice." Ever since the 2008 global financial crisis, growth has been erratic at Indian IT firms, with even the larger

companies struggling with clients' reluctance to spend in an uncertain economic environment. From a little around 17% growth in 2011-12, the sector growth slowed down to just about 11% in the current financial year. According to the study, the current business model of Indian IT services have "maxed out" amid clients' changing preferences, thanks to commoditisation of services, vendor consolidation, erosion of offshore cost advantage and intense competition from global multinational corporations. "Indian players no longer have a sizable advantage in cost structures as most Western competitors have built massive resource bases in India. Meanwhile, Indian players have had to invest in onshore capabilities local to their customers, thus increasing labour costs," noted the study that surveyed Indian IT firms as well as over 50 corporations who are large buyers of technology services. "It is high time for Indian IT services firms to walk their decade-old talk of 'moving up the value chain'. Increasingly, clients are looking for technology service providers to help them achieve specific business outcomes, Wang said. In fact, according to his research, so long as IT services companies deliver on promised outcomes, clients do not care what database, hardware or internal middleware is used to deliver the solution. Recently, iGate, one of the tier-II software services exporters, ran a multi-million dollar advertising campaign in the US asking corporations to insist on business outcomes rather than paying IT firms for the number of hours put in by software engineers.

See details ET 22nd Jan 13