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ing Bill, which seeks to ensure that not just the nation, but the owners of land-bearing minerals directly benefit from its economic value. Excerpts: Could you define the word profit for the coal mining companies in this profitsharing mechanism? Profit in this context will be profit from mining operations only, as per the standardaccountingprocedures and nomenclatures. The GoM has provided certainty to the non-coal mining companies through the royalty clause, but for coal miners, a 26% profit sharing is seen as steep and the industry fears that this will impact the downstream users as the cost will be passed on to the con-
sumers. What is your assessment of the situation? I cannot confirm your assertion that for coal it is 26% since the matter has to go to the Cabinet. But for the sake of argument, I can say that the coal ministry calculated that 26% is less than the royalty paid for coal. This is because the coal prices are administeredprices.Thereisa separate push to rationalise coal prices. I think there is a Planning Commission suggestion in this regard. So there is a move to push the increased price onto consumer anyway . The revenue sharing may be a trigger for this. Will the profit be calculated after tax, or before? Again, would you clarify on the tax treatment of this profit sharing. I think the phrase being
I cannot reply to such hypothetical situations. Which company are you referring to? Isnt it also related to administered prices? Earlier, in an interview to us, you had talked about differential treatment to different minerals based on their profitability and consumption cycle. How does this new draft address the needs of different minerals requiring different treatment? If, as you say, the amount is equal to royalty for metallic minerals, that already has the inbuilt mechanism to takecareof theeconomicsof different minerals. How will be the profit sharing formula applicable in case of a company with divergent businesses and in case of a company
with many subsidiaries? In your hypothetical example, it would be in respect to coal operations? I suppose the administered price would be a basis for calculating the profit at the mine level. These can be detailed out in sub-legislation. You have been an advocate of promoting exploration activity in the mining sector for which you have been asking for first come first serve basis licence to ensure exploration activity in case of unknown mineral deposits. How has this issue been tackled in the new draft and how will the bidding process be structured for all the mining licences of different stages? The basis of this is that if an areaisknownformineralisation,abiddingprocesscanbe
structured based on the quality of the data. But if we are starting at the stage of reconnaissance, or the economics do not particularly favour makingtheefforttogoforbidding, then first-in-time is the default option. So, for the Reconnaissance Licence and the High Technology ExplorationLicence,bothof which target unknown areas, the Chawla Committee has actually said that first-in-time is therightmethodology . How has the new draft accommodated the recommendations of the Ashok Chawla panel, especially on the profit sharing and bidding process? The Chawla Committee has favoured the flowback of funds for local area development and bidding in areas of known mineralisation ... so, I guess, we are in sync.
bandied about was an amount equal to 26 % of PAT of the previous year. So, the tax treatment is clear. Its an expense which can be budgeted. But this is not to say I am confirming the precise formulation, since the matter has to go to the Cabinet. How will this formula work for coal mining
firms which are not making any profit. For example, there are some mines of Coal India which are not making any profit. In such a scenario, how will the local population be compensated? In a broader context, how will this profit sharing mechanism work in times when firms are suffering losses?
MUSIC TO EARS
Top cities expected to witness aggressive bidding in FM-III auctions
Company Numer of Minimum Minimum channels reserve price revenue available for (R crore) price phase III (R crore) auctions 2 1 1 4 3 2 2 3 2 2 35.20 31.42 12.27 18 14 14 5.1 5.1 2.56 7 70.40 31.42 12.27 72 42 28 10.2 15.3 5.12 14
Category A+ (Metros) Mumbai Delhi Chennai Category A Hyderabad Lucknow Pune Nagpur Category B Patna Agra Vijayawada
FE Trade winds
D E C I P H E R I N G B I L AT E R A L T R A D E
GERMANY
Year EXPORT % growth Indias total export % growth % share IMPORT % growth Indias total import % growth % share TOTAL TRADE % growth Indias total trade % growth % share TRADE BALANCE Indias trade balance -46,075.20 -59,321.19 -88,521.83 -118,400.95 3.81 252,256.26 4.04 9,609.75 149,165.73 3.48 6,023.63 103,090.53 2005-2006 3,586.12 2006-2007 3,984.81 11.12 126,414.05 22.62 3.15 7,552.64 25.38 185,735.24 24.52 4.07 11,537.45 20.06 312,149.29 23.74 3.7 2007-2008 5,121.53 28.53 163,132.18 29.05 3.14 9,884.83 30.88 251,654.01 35.49 3.93 15,006.36 30.07 414,786.19 32.88 3.62 2008-2009 6,388.54 24.74 185,295.36 13.59 3.45 12,006.02 21.46 303,696.31 20.68 3.95 18,394.56 22.58 488,991.67 17.89 3.76
In $ million
2009-2010 5,412.89 -15.27 178,751.43 -3.53 3.03 10,318.18 -14.06 288,372.88 -5.05 3.58 15,731.07 -14.48 467,124.31 -4.47 3.37 -109,621.45
Note:Since 2006-07, Petroleum figures are being computed from Import Daily Trade Returns to generate country-wise/ port-wise tables. Up to 2005-06, consolidated petroleum import figures were being received from the petroleum ministry
The 120 largest German companies in India employ 173,000. Over and above, they have created about 300,000 jobs through exclusive agents, dealers, vendors, franchisees and suppliers
already involved in India is revealed in a new statistical report which states: Taken together, the 120 largest German companies in India currently employ 173,000 staff. Over and above, they give employment through exclusive agents, dealers, vendors, franchisees and suppliers in the range of 300,000 jobs. This means the German companies are a major employment generator in India. More than half of the companies expect sales to surge by over 20% in 2011-12, while about 30% of them anticipate an increase of 10-20%. According to the envoy, the two countries complement each other: India has in abundance of what Germany needs, for example, young, highly skilled and creative IT people. Germany can provide state-of-the-art technologies and longstanding experience in providing solutions to complex problems and processes. Both countries have identified certain areas for cooperation which include post-harvest infrastructure, good quality seed and planting material, cooperation in animal science, agricultural machinery and the entire food processing sector. In 2008, Germany and India had established a bilateral working group on agriculture, covering the whole production line from agriculture to food processing and consumer protection. The next meeting of the group is provisionally planned for November this year where the Indian delegation will also have an opportunity to visit Agritechnica 2011 the worlds largest agricultural machinery and equipment exhibition, said Matussek. Several interesting projects, including the Siemens railway locomotive project in India that has been deferred four times, are in the pipeline. The R1,300-crore plant, to be set up at Madhepura in Bihar, is crucial for global locomotive suppliers as it comes with a 10-year offtake assurance, giving an instant foothold to bidders in the lucrative Indian market. Germany accounts for close to 10 % of total foreign collaborations approved in India with more and more Indian companies acquiring highquality German technology to meet their growing needs. It is also one of the most-preferred investment destinations for Indian companies, especially in sectors like automotive, pharmaceuticals and electrical equipment. Speaking on the potential for cooperation in the infrastructure sector, the envoy said, Germany can help India in fulfilling its infrastructure needs. Maharashtra, with a 57 % share of German investments, remains the most attractive trade destination of the country in India. Pune has lately become the hotbed for investments, followed closely by Karnataka and Gujarat. Delhi and Andhra Pradesh have experienced a drop in German investments, whereas Tamil Nadu and Karnataka are gaining popularity due to the conducive investment environment.
STATFACTS
(2010 est)
GDP - purchasing power parity GDP - real growth rate GDP - per capita (PPP) Exports Imports
Huma Siddiqui