DAILY SECTORS ALERT: 05.06.2012

[rupeedesk]

DAILY SECTORS ALERT: 05.06.2012

* AUTOMOBILE: Finance ministry is looking to raise excise duty on vehicles using diesel to discourage consumption of the subsidised fuel and bolster its tax revenue. Automobile components maker Valeo is setting up two new plants in Gujarat and Tamil Nadu.

* AVIATION: Civil aviation ministry has proposed to cut state taxes on jet fuel. Air India is set to come up with a voluntary retirement scheme in the next three months to reduce costs. Government infused 12 bln rupees in Air India on Monday. The airline will now pay 2.5 bln rupees as salary to all employees by Wednesday.

* CORPORATES: Two former executives of Reebok India have accused Adidas of attempting to hammer down the valuation of the Indian unit to reduce its payout to the minority shareholder.

* ECONOMY: Rating agency CRISIL has lowered its forecast on India 's gross domestic product growth in 2012-13 to 6.5% from 7.0%. Finance Minister Pranab Mukherjee said there is a need to address fiscal and current account gaps and growth issues.

* FDI: Government is drawing up plans to ease foreign direct investment norms in single brand retail.

* GOVERNANCE: Government may announce sops like interest subsidy for sectors such as textiles and carpets in the Foreign Trade Policy, to provide a cushion against the global slowdown.

* INFRASTRUCTURE: Prime Minister Singh has called a meeting of all infrastructure ministries such as power, ports, railways, shipping, aviation, steel, mines, roads, to review targets set for 12th Five Year Plan (2012-2017).Government is considering relocating the UK arm of India Infrastructure Finance Co to the Netherlands to save taxes and make it more viable. OPG Power Ventures to invest 30 bln rupees to set up three new power plants in Gujarat and Tamil Nadu.

* MUTUAL FUNDS: Association of Mutual Funds in India is lobbying with SEBI to weed service taxes out of the expense ratio.

* OIL & GAS: Delhi government has withdrawn a proposal for 5% hike in value-added-tax on compressed natural gas.  India is hoping to secure oil and gas exploration blocks in Afghanistan on the basis of its goodwill with the country. It may also participate in the upcoming auction of six blocks to the north of Mazar-i-Sharif. Government is considering allocation of all domestic gas intended for supply to power producers to GAIL (INDIA) for the purpose of price pooling.

* PHARMACEUTICALS: Government has initiated a process to reduce the Indian drug industry's growing dependence on China for raw materials, including the critical penicillin.

* STEEL: India 's per capita consumption of steel has gone up by around 25% in the last five years to 57 kg in 2011 against 45.8 kg in 2007.

* TELECOM: A Cabinet note prepared by the telecom department proposes to make it compulsory for all operators to match the auction-determined price for their existing 2G airwaves for the remaining period of their licences. The Empowered Group of Ministers on the auction of telecom spectrum will meet today to decide on the reserve price for the auction. Vodafone has cut 3G tariff rates by around 60% in Mumbai as a promotional offer.