Government reduces wheat import order
New Delhi: The government has reduced its wheat purchase order almost by 50 per cent from global buyers to 511,000 tonne from 9, 20,000 tonne. The government had placed orders with three firms from among the seven that had bid. These include Cargill, Toepfer and Riaz Trading - at a price about 54 per cent higher than what the government had offered to Indian farmers a few months ago.

The government has approved purchase of 511,000 tonne of wheat at a price ranging between $317 and $330 per tonne, with the average working out to $325.

Last month, seven firms together had offered to supply 920,000 tonne of wheat at a price ranging between $317 and $370 per tonne in the 1 million tonne import tender floated by the State Trading Corporation.

In rupee terms, the current average price works out to Rs13,162 per tonne which excludes port handling and transportation charges, which work out to about Rs500 per tonne. In comparison, the government has paid Rs8,500 per tonne to farmers for their wheat, including a bonus of Rs1,000.

Even if the cost of transporting wheat from Punjab to a consumption centre in Chennai or Maharashtra, which works out to Rs1,000 per tonne, plus the carrying cost of Rs200 per month per tonne are factored in, domestic wheat would have cost about Rs11,000 per tonne (on a price of Rs9,400 which is the post-tax purchase price of Food Corporation of India, the government's procurement agency) in August.

Last year, India imported 5.5 million tonne of wheat at an average cost of about $205 a tonne, after procurement fell to 9.2 million tonne.
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Infrastructure sector grows 8.7 per cent in May
New Delhi: The index for infrastructure industries registered a growth of 8.7 per cent in May this year compared with 7.2 per cent in May 2006.

Growth in petroleum refinery products stood at 14.9 per cent in May this year against 12.1 per cent during the same month of the previous year. During the first two months of the current fiscal (April-May), the overall growth rate of refinery products is estimated at 15 per cent (12.6 per cent).

Production of finished carbon steel went up by 11.8 per cent in May (10.7 per cent), though for the April-May 2007 period the growth rate slowed down marginally to 10.1 per cent (10.4 per cent).

Electricity generation increased by 9.3 per cent (5.1 per cent) in May this year. During the April-May 2007 period, electricity generation improved by 9 per cent (5.5 per cent).

Cement production increased by 9.4 per cent (6.8 per cent) in May this year. However, for the April-May 2007 period, the over all growth rate in cement production stood at 7.4 per cent (9.4 per cent).
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SC gives tax relief to MNCs' captive BPO units
New Delhi: The Supreme Court has held that captive business process outsourcing (BPO) units of MNCs are not liable to be taxed in India if they are billing the subsidiaries on an "arm's length" basis or without giving any preference.

The judgement was delivered in a case between US investment bank Morgan Stanley and the income tax department.

The income tax department had held that outsourcing activities of Morgan Stanley Advantage Services (MSAS), the firm's Indian arm, must be taxed.

The apex Court held that MSAS was not a permanent establishment (PE) and as it was performing only back office operations in India it could not be taxed under PE rules, upholding an order of Authority for Advance Ruling (AAR).

The court also held that MSAS would be a service PE in India under the India-US Tax Treaty on account of the services to be performed by executives deputed by Morgan Stanley and not on account of stewardship activities.

The ruling will benefit foreign companies like GE, HSBC, and Standard Chartered Bank that outsource back office functions to their Indian units.
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Oil at 11-month high above $76
London: Oil touched another 11-month high rising above $76 on Tuesday marking the 10th straight day of gains. At 1534 GMT London Brent crude was up 59 cents at $76.37 a barrel having earlier hit $76.46, the highest since Aug 10, 2006. US crude was up 60 cents at $72.79.

The rising price of oil coincided with rising tensions between Iran and US after an Iranian newspaper, quoting a senior adviser to Supreme Leader Ayatollah Ali Khamenei, said Iran was producing centrifuges for refining uranium domestically, limiting the impact of United Nations sanctions.

The US Navy said it had sent a third aircraft carrier to the area where its Fifth Fleet is operating, including waters close to Iran.
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