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Sectoral Analysis

	June 22, 2009

Telecommunication: 3G spectrum reserve prices doubled



Paving the way for unleashing of next generation mobile telephony, the government on Friday fixed reserve price of Rs 4040 crore for auction of 3G spectrum, a move that would help it garner at least Rs 32,320 crore.



A consensus between Finance Minister Pranab Mukherjee and Telecom Minister A Raja was arrived as the two met Prime Minister Manmohan Singh for the approval of the reserve price, based on which the process of bidding would start soon.



Initially six private operators apart from state owned MTNL and BSNL would be allowed to offer 3G services that enables high speed internet, videos and many other value-added services on mobile phone.



Power



World Bank approves $180-mn loan for power plants in India



The World Bank on Friday last approved a $180-million loan for the renovation and modernisation of old, polluting and inefficient coal-firepower plants in India, in a move that could help lower carbon emissions.



"The project, which is expected to lower carbon emissions and boost power production at these plants, is co-financed with a $45.4-million grant from the Global Environment Facility (GEF)," the funding agency said in a statement.



This would be the first step in a decade-long Indian plan to augment power supply by rehabilitating a range of old coal-fired plants even as the country moves to more climate-friendly options for energy generation in the long term, the World Bank said.



With the proposal, around 200-220 MW capacity each of the three coal-fired power plants at Bandel in West Bengal, Koradi in Maharashtra, and Panipat, Haryana will be modernised.



"If scaled up effectively to the remaining similar units needing rehabilitation, India could be looking at emissions cuts anywhere between 10 to 13 million tonnes of CO2 equivalent each year," Mikul Bhatia, World Bank Energy Specialist and project team leader, said.



Currently, around 80 per cent of the electricity supplied to homes, farms and factories in India come from coal-fired generation plants, one-third of which are old, inefficient, and emit harmful gases into the atmosphere, it said.



Retail



India most attractive retail market: Survey



Providing good growth potential for global retailers amid the economic slowdown,

India has been ranked as the most attractive nation for retail investment among 30 emerging markets by US-based global management consulting firm AT Kearney.



According to the entity's Global Retail Development Index (GRDI), India is followed by Russia (2), China (3), United Arab Emirates (4) and Saudi Arabia (5). India was placed at the second spot last year. Similarly, the other four countries in the top five have improved their ranking, with the United Arab Emirates jumping 16 places from the previous year's 20th rank.



Noting that “larger, resilient developing countries sit atop the 2009 GRDI as they are most likely to lead the economic recovery,” the report said that India had become the most attractive destination for retail investment for the fourth time in five years.

“In India, slower retail sales are causing Indian retailers to delay expansion plans and restructure their operations. But this has opened the window of opportunity for global retailers and many, including Wal-Mart, Carrefour and Tesco, are continuing expansion plans as Indian consumers grow increasingly affluent, brand-conscience and familiar with global retail formats," the report said.



“Low inflation and rent reductions of up to 40 per cent in tier-II and tier-III cities also help make India the most attractive retail investment destination in the 2009 GRDI,” the report said.



A report by the Indian Council of Research in International Economic Relations (ICRIER) submitted to the Indian Government last year said the nation's retail market was estimated to be of $322 billion in 2007 and was expected to reach a figure of $590 billion by 2011-12.



Sectoral notes



IMF wish list for India: The International Monetary Fund (IMF) wants India to gradually eliminate the norms that make it mandatory for banks and other saving funds to park a portion of their funds in government securities.



US fast-tracks hi-tech trade with India: The United States has announced a new programme to fast-track high-technology trade with India from which General Electric's India division will be the first Indian company to benefit.