Water Policy draft favours privatisation of services

The Union government has begun consultations on a new National Water Policy that calls for privatisation of water-delivery services and suggests that water be priced so as to “fully recover” the costs of operation and administration of water-resources projects, documents available with The Hindu show.

Recently circulated to water experts for consultations, the 15-page draft National Water Policy suggests that the government withdraw from its role as a service provider in the water sector. Instead, it says, communities and the private sector should be encouraged to play this role. The proposals could mean sharp rises in the cost of water for both rural and urban users — an outcome the policy suggests will help curtail misuse of a precious but scarce resource.

The draft policy calls for the abolition of all forms of water subsidies to the agricultural and domestic sectors, but says “subsidies and incentives” should be provided to private industry for recycling and reusing treated effluents. It also proposes that subsidy to agricultural electricity users be curtailed, saying it leads to a “wasteful use of both electricity and water.”

Similar World Bank proposals

In 2005, a World Bank paper made similar recommendations, arguing that “if India is to have sustainable economic growth, the role of the Indian water state must change from that of builder and controller to creator of an enabling environment, and facilitator of the actions of water users large and small.” The paper called for, among other things, “stimulating competition in and for the market for irrigation and water and sanitation services”.

The draft policy calls upon the government to ensure access to a minimum quantity of potable water for essential health and hygiene to all citizens, available within easy reach of the household. Significantly though, it does not suggest that these be turned into enforceable rights through new laws.

For expeditious resolution of inter-State disputes, the draft policy suggests the establishment of a permanent tribunal at the Centre.

In a major departure from the past, the policy also suggests that people displaced by large water projects should be made partners in progress and given a share in the benefits comparable to the project-benefited families. In fact, the policy suggests that the cost of rehabilitation and compensation to the project affected families be “partly” borne by the project-benefited families through “adequate pricing of water.”

So I recommend buy call on JAIN IRRIGATION at 100 rate and ILFS ENGG at 70 rate and IVRCL infra at 44 range

REPORT ON KALINDEE

Kalindee Rail Nirman (Engineers) Limited, popularly known as "KALINDEE" today stand as Premier and Trusted agency in execution of Railway Track, Signaling & Telecommunication projects on turn key basis. It has rich and varied experience of more than three decades. It has earned a good reputation by sustained good performance in quality, accuracy and on- schedule compliance with utmost dedication, sincerity, and cooperation. There is vast scope for expansion of Kalindee’s business in building Railway Transport infrastructure for urban, passenger and freight traffic in line with the Government Of India’s huge investments for rapid development in these areas.
Kalindee have projects are from Maharashtra State Power Generation Co for a plant in Nagpur that is about Rs 51 crore, then we have got project from South-Eastern Railway for a new track line and that is about Rs 32 crore. We have also got a deal from Jaipur Metro and some order from DMRC etc. So, total project value as of today on company's hand is about Rs 650 crore.
We can buy kalindee at 110 rate for a short term target of 130-140 in 2 months time frame

MY EVER TIME FAV APOLLO HOSPITAL ROCKING

My favourite pick from mid cap healthcare sector Apollo hospital is doing good in past one quarter.Investors with 2 year waiting period can buy it at 650 levels. Apollo Hospitals is in talks with Parkway Holdings, a Singapore-based hospital operator, on a prospective tie-up to expand in the Indian sub-continent, Middle East and Africa, Apollo Group Chairman Pratap Reddy said here today.

"We are now talking to them (Parkway) on what is the final plan," Reddy told reporters on the sidelines of the 2nd Annual Conference of Global physicians of Indian Origins (GAPIO).

6300 CRORE TAX LIABILITY FOR ESSAR OIL

The Ruias-controlled Essar Oil, which runs the country’s second-biggest single location crude oil refinery at Vadinar in Gujarat, will have to shell out Rs6,309 crore as sales tax to the Gujarat government.

Dealing a blow to the company’s balance sheet for the coming year, the Supreme Court on Tuesday set aside a Gujarat High Court order wherein the latter had asked the state government to consider Essar Oil’s request to grant it the sales tax incentive.

According to a release from Essar Oil: “The Supreme Court has upheld the stand of the state government as a result of which Essar is not entitled to the deferment scheme. It needs to be clarified that the scheme was not for sales tax exemption in toto, but was only for a deferment of payment of sales tax. In view of the judgment, the payment of tax which was to be made in deferred instalments, may face some changes in the timeline.”

So I recommend to avoid essar oil from buying as this may impact the balance sheet of essar heavily.Lets wait for further clarity from essar oil management

Under a special state government scheme - the Capital Investment Incentive to Premier/Prestigious Unit Scheme, 1995-2000 - Essar Oil was eligible for a tax deferment incentive of up to Rs9,100 crore for 17 years, provided the company would start commercial production from its proposed unit within a specified timeframe.

Essar Oil, which was building a 9-million tonne per annum crude oil refinery at Vadinar in Gujarat, was supposed to complete it by April 2003. However, the company failed to start work as a crippling cyclone hit the refinery site in 1998 and later, a pending case involving an NGO held up its construction.

Though the company restarted the project in 2004 and completed the process by November 2006 after resolving all the irritants, the state refused to consider it under the eligible parties for the sales tax deferment facility.

With the Supreme Court ruling going in state’s favour, Essar Oil will have to cough up the entire amount it enjoyed as benefits of sales tax deferment so far, which according to an Essar Oil release is Rs6,309 crore.

While this is just the tip of the iceberg, analysts say the judgment can actually open up a Pandora’s box for Essar Oil as the company is in the midst of a corporate debt restructuring (CDR). In fact, the current SC judgment can go against the conditions laid down by the company’s lenders during the restructuring exercise.

The Draft Red Herring Prospectus (DRHP) filed by Essar Energy during its listing read: “It is a condition of Essar Oil’s Master Restructuring Agreement (MRA) that Essar Oil obtains the benefits of the sales tax deferral.”

It further said: “In the event Essar Oil is unable to receive further extensions from the CDR lenders or the ongoing sales tax incentive litigation, this may be considered to be an event of default under the MRA. The CDR lenders will then have an option to demand payment of all outstanding amounts or convert such outstanding amounts into shares of Essar Oil.”

INFLATION AT TWO YEAR LOW.

The Whole Sale Price Index (WPI) for the month of December was at 7.47 per cent versus 9.11 per cent in November.

Food inflation stayed in the negative for the second week running despite a slight uptick in prices because of the high statistical base of the last year.

A sharp drop in inflation will allow the Reserve Bank of India to start monetary easing. Inflation in food articles was -2.9% for the week ended December 31, data on Thursday showed. It stood at -3.36% during the previous week and 19.1% in the corresponding week last year.

Infosys Q3 net up 33 pct, cuts FY12 forecast

INFOSYS Ltd beat market forecasts with a 33 percent rise in quarterly profit as a weak rupee boosted margins, but it cut its full-year revenue outlook because of the debt crisis in Europe, its second-biggest market.

India's export-driven software services companies are bracing for a slower pace of outsourcing contracts due to the lingering debt crisis in Europe.

Bangalore-based Infosys, India's second-largest software services exporter, forecast dollar revenue growth of 16.4 percent for the fiscal year to March 31, down from 17.1 percent to 19.1 percent projected in October.

"The global economy, driven by slower growth in developed markets coupled with the European crisis, could impact the growth of the IT industry," Infosys Chief Executive S. D. Shibulal said in a statement.

India's $76 billion IT services industry competes with Accenture Plc and IBM for orders to maintain information technology infrastructure and build software applications.

More than half of Infosys's revenue is generated from the United States.

Global spending on information technology will rise at the slowest pace in three years in 2012 as Europeans, worried about the region's sovereign debt crisis, are cutting back on investments, research firm Gartner Inc said last week.

Gartner predicted global IT spending would rise 3.7 percent in 2012, down from its earlier estimate of 4.6 percent. The forecast for Western Europe was slashed to a 0.7 percent drop in spending from a previously expected rise of 3.4 percent.

Infosys which is also listed in New York, said consolidated net profit rose to 23.72 billion rupees in the third quarter ended December 31 from 17.8 billion rupees a year earlier, helped by an 8 percent fall in the rupee.

Revenue rose 30.8 percent to 92.98 billion rupees, as the company, whose customers include BP Plc , Procter & Gamble Co and Volkswagen AG , added 49 clients.

A Reuters poll of 10 brokerages had forecast a profit of 23.1 billion rupees on revenue of 92.2 billion rupees.

The rupee was the worst performer among Asian currencies in 2011, losing nearly 16 percent against the dollar.