Week In Review

Updated: May 18 2003, 05:30am hrs
Infosys Settles Phaneesh Case For $3 Million
The sexual harassment case filed by an ex-Infosys employee based in the US, Reka Maximovitch, against the company and its former director and head of worldwide sales

Phaneesh Murthy has been settled out of court for $3 million. But the whole episode has indeed become messy and it may well trigger another round of legal battle with Infosys saying it might consider taking action against Mr Murthy and he in turn alleging that the company has withheld substantial amount of shares owed to him.

Infosys chairman and chief mentor Narayana Murthy said at a press conference that the company had paid $1.5 million to Ms Maximovitch in an out-of-court settlement to terminate the sexual harassment litigation filed by her.

The balance $1.5 million comes from a consortium of three insurers, whose identity Infosys officials declined to reveal.

The case has cost Infosys almost $ 1 million in legal fee. Narayana Murthy said Ms Maximovitch demanded compensation well in excess of what Infosys has paid. Phaneesh Murthys contribution towards the settlement is nil.

India Has Road Map For Talks: Sinha
India has worked out the entire road map for talks with Pakistan, external affairs minister Yashwant Sinha said but made it clear that it was adopting a step by step approach and the dialogue would first begin only at the official level.

We have clearly worked out the entire road map. Every step is clear in our mind. There is no confusion in the government of India and we will proceed according to the plan, Sinha said.

The minister declined to spell out the details, but his comments indicated that India remained serious about resumption of talks with Pakistan.

Dismissing suggestions that Indias peace initiative was taken under American pressure, Mr Sinha in an interview to NDTV 24X7 emphasised that Pakistan must put an end to cross-border terrorism for any positive outcome. An end to cross-border terrorism is a practical necessity, he said.

BSNL, MTNL Roll Back Tariffs Partially
Under pressure from the government, Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) on Tuesday partially rolled back the increase in fixed-line tariffs implemented from May 1. BSNL has restored the number of free calls from 50 to 75 per month for rural subscribers and 30 to 50 for urban subscribers.

MTNL has also said that it will offer 60 free call every month against 30 announced earlier. BSNL also halved fixed-to-cell tariffs to Rs 1.20 per minute from 1.20 for 30 seconds. Communications minister Arun Shourie told reporters that the move would cost BSNL Rs 3,476 crore this year. This will severely impact expansion plans related to rural telephony and upgradation of network, Mr Shourie said.

BSNL would lose Rs 2,600 crore on account of the change in pulse rate for calls from fixed lines to cellphone and Rs 876 crore for increasing the number of free calls. MTNL, on the other hand, faces a loss of Rs 140 crore annually on account of increasing the number of free calls.

India Ready To Import 5 mt LNG From Iran
India has agreed to import five million tonnes of liquified natural gas (LNG) from Iran in two phases. On its part, the Iranian government has agreed in principle to award a discovered oil field in Iran to ONGC Videsh Limited, the overseas arm of Oil and Natural Gas Corporation.

Top petroleum ministry officials added that Iran has also agreed to favourably consider Indian Oil Corporation participation in an aviation services project in a new international airport (close to Tehran) being considered by Oil Industry Investment Organisation.

MoF Offers Tax Sops
Yielding to the textile lobby, the ministry of finance has approved a package for textile industry which involves raising tax exemption limits on several sensitive items. The powerloom sector will also be given procedural relief.

A senior finance ministry official added that tax exemption limits are being raised for woven fabrics, garments, readymade garments, shoddy blankets, mono-filaments and terry towels.

The official said that a notification to give effect to the decision taken at a high-level meeting called by finance minister Jaswant Singh will be issued shortly.

Inflation To Turn Soft From Second Quarter: Jalan
The RBI governor, Bimal Jalan, ruled out the possibility of a change in repo rate, but hoped that inflation would turn soft from the second quarter of the current fiscal.

We maintain the same position that repo rate is flexible, but there is no proposal right now to change it from five per cent, Jalan said after a meeting of the central board of RBI in Kolkata.

Repo rate is the rate at which the RBI borrows overnight funds from banks. The current rate at which the apex bank borrows is five per cent.

There was apprehension in the market that considering the existing liquidity in the market, rates might be changed. The meeting of the central board discussed, among other things, the recently announced Monetary and Credit Policy for 2003-04.

Asked to comment on whether the prevailing inflation rate of over six per cent had peaked or would decline, Jalan said, We should see some relief on this account in the second quarter, but obviously it is not possible to be very definitive, we have to watch the situation.