Economy News Notes

The Reserve Bank of India (RBI) has decided to permit banks to grant permission to companies, including unlisted companies, to hedge the price risk in respect of any commodity (except gold, silver, platinum) in the international commodity exchanges/markets.
Before permitting the corporates to undertake hedge transactions, the banks would require them to submit a brief description of the hedging strategy proposed, including, instruments proposed to be used for hedging, the names of the commodity exchanges and brokers through whom the risk is proposed to be hedged and the credit lines proposed to be availed.

In a three-pronged bid to check the burgeoning current account deficit, halt depreciation of the rupee and partly make up the shortfall in revenue collections, the Central Government on Tuesday tweaked the duty structure on precious metals to mop up an additional Rs.600 crore during the last quarter of the current fiscal.
Through a CBEC (Central Board of Excise & Customs) notification, the fixed amounts of excise and customs duties on gold, silver and platinum stand changed to ad-valorem rates with immediate effect.
Giving a rationale for the change in duty rates, CBEC Chairman S. K. Goel said: “The old rates were fixed 4-5 years ago. In the last few years, prices have increased substantially so the change has been made to bring duties in line with market prices.”

The successfully concluded $8.48-billion Cairn-Vedanta deal has come “under cloud” following instances of serious human rights violations, default of payment, environmental damage in its mining and metal projects in India, as pointed by the Internal Security section of the Home Ministry against Vedanta and its group of companies.
It said in February 2010, the Church of England decided to disinvest from the company on ethical grounds alleging human rights violations.
- Apart from this, the note states that in 2007, Norway's Government Pension Fund – globally known as “Oil Fund” — had divested/sold Vedanta Resources from its $350 billion Sovereign Wealth Fund for ethical reasons, blaming it for environmental damage and human rights violations in India.
- In March 2009, the note states, thousands of tribals protested against Vedanta Resources Alumina refinery being set up in the Lanjigarh area of Orissa and vowed to stop the $874 million project on account of environmental concerns.
All efforts to get a response from the Vedanta group to the alleged charges did not evoke any response.