Today's Biz Bit

• Middle East-based Switz Group, owned by Mumbai’s Khorakiwala family, is set to buy Modern Foods from Hindustan Unilever. According to sources, the deal, worth about Rs. 100 crore is expected to be announced shortly. Switz Group is a foods major with operations in Dubai, Saudi Arabia and Muscat. (ET)

• In a relief to around 2.5 million HIV patients and generic firms like Cipla and Ranbaxy, GlaxosmithKline (GSK) has pulled out the patent applications of two anti-AIDS medicines in India. While GSK has formally withdrawn the application of Abacavir, it is learnt that the co’s other drug, Trizivir, is deemed withdrawn after it made a request to the patent office not to examine its case. Indian firms like Cipla, Ranbaxy and Hetero, among others, already market one or both these drugs in India. If GSK had secured the patent, they would have had to pay a royalty to the company. (ET)

• According to sources, DoT will issue LoIs to 16 cos for starting mobile services within a couple of days. Each co. will have to pay Rs 1651 crore licence fee for a pan-India licence and wait in queue for spectrum, which will be allotted once the defence forces vacate a part of their spectrum.

• In a surprise move, DoT has awarded a pan-India GSM licence to Reliance Communications (RCOM). The licence will guarantee that RCOM will be in queue for GSM spectrum ahead of the 46 others that have applied for licences recently. (ET)
  

• TVS Logistics Services has spread its operations to the US by floating a JV with Global Rush, a local group. The venture will provide sourcing, export and import logistics services to automotive manufacturers and suppliers in India and US. (ET)

• Peak Customs duty on non-agricultural products is likely to be reduced to 7.5% from 10% in Budget 2008. This is in line with the country’s voluntary commitment to cut duties to the Asean levels, 4.5-5.5%, by 2010. This would bring down duties on several items like air-conditioners, refrigerators, washing machines, picture tubes, specified plastics and some other capital goods. (ET)

• The urban development and power ministries have proposed raising the ceiling for calculation of wealth tax payable by employers. At present, an employer has to pay wealth tax on company houses leased to employees earning Rs 5 lakh and more per year. The ministries have proposed that with salaries growing by almost 15% in the past year, the wealth tax should kick in only for salaries of Rs 10 lakh and above. The MoF is likely to consider the proposal as part of the budget package. (ET)

• The MoF has sought a fresh look at the DTAAs that India has signed with various countries to make the pacts favourable for Indian investments abroad as much as they are for the incoming capital. (ET)

• One day before the winter session of Parliament was scheduled to close, the government yesterday introduced the much-awaited Land Acquisition (Amendment) Bill and Resettlement and Rehabilitation (R&R) Bill, 2007 in the Lok Sabha. Both Bills are critical given the growing controversies over land acquisition by the private sector and the lack of clarity over compensation to land losers.The Land Acquisition (Amendment) Bill seeks to limit the government’s role in land acquisition to government projects narrowly defining “public purpose” as government projects. The Resettlement and Rehabilitation (R&R) Bill seeks to set up a land acquisition compensation disputes settlement authority and delineate the compensation packages to be awarded when land is acquired. Companies have been kept outside the purview of both Bills. The R&R Act will, however, be applicable to the private sector if the land is acquired by the government for a private party to meet land contiguity norms. Apart from land owners, both Bills give rights of compensation to tenant farmers, agricultural labourers and even non-agricultural labourers whose livelihood will be impacted by the acquisition of land and displacement. (BS)

• Auto components major Bharat Forge is joining hands with NTPC Ltd to set up a new greenfield manufacturing facility in the country. The JV will look at manufacturing power plant equipment, including turbines, components and accessories, through technological tie-ups with other manufacturers. A strategic partner may also be roped in later. (FE)

• A nation-wide study conducted by ICRIER and commissioned by the govt. has found in its draft report that organised retail will not kill kirana shops. The study, conducted to gauge the impact of big corporate houses entering retail, shows that small shops in the vicinity of large retail chains can regain profitability even if they initially see a decline in business. ICRIER, which was initially slated to submit its report by August, will now be submitting it in January. ICRIER has broad-based its study to include the functioning and profitability of the unorganised retail segment in the vicinity of big retail chains. This would provide a benchmark to view whether or not traditional trade, located near the emerging retail chains, is able to perform as it would have if organised retail hadn’t emerged in a particular area. (FE)

• Kuwait Petroleum Corp (KPC) is in talks with Indian private and public sector undertakings to build large-scale refinery and petrochemicals projects in the country. The co is in talks with Reliance Industries and others, including Indian Oil Corporation Ltd for the proposed projects. (BL)

• With the general budget round the corner, the MoF held out some hope for taxpayers by indicating that it could review direct tax rates and structures in the coming days on the back of buoyant revenues and some increase in voluntary compliance. A further dose of good news is that the Ministry has virtually ruled out any increase in the maximum marginal rate on the personal income-tax front as that may affect voluntary compliance. (BL)