Intellectual Thoughts by Sanjay Panda


FMC Corporation Announces Agreement to Acquire Cheminova for $1.8 Billion


  • Cheminova a Denmark-headquartered multinational crop protection company.
  • Broadens market access in key geographic regions.
  • Expands position in existing crop segments and accelerates access to additional crops.
  • Provides new technology applications, including research and formulation expertise.
  • Enhances portfolio with complementary products and technologies
  • Accretive to adjusted earnings in the first full year.
  • Modifies previously announced separation process  ( Alkali + Lithium to be listed as a separate entity as FMC Minerals) with new plan to divest Alkali Chemicals only.  proceeds used to reduce acquisition-related debt.

source: FMC website

Environment ministry use bureaucratic loophole to ease ban



The Union environment ministry has, using a bureaucratic loophole, lifted a ban on expansion and setting up of factories in eight critically polluted industrial  belts. The moratorium was imposed based on the performance of the clusters on a Comprehensive Environmental Pollution Index (CEPI) developed by the Central Pollution Control Board and introduced by the United Progressive Alliance (UPA) government in 2009. It measures industrial belts on a scale of zero to 100.  A reading above 70 is termed “critically polluted”and a moratorium imposed on expansion. After imposing a round of moratoriums on many industrial belts, the UPA government continued to review improvements undertaken to reduce pollution. Industrial belts that improved with time were periodically taken out of the banned list.

But eight of these showed worsening trends: Ghaziabad (Uttar Pradesh), Panipat (Haryana),
Singrauli (Uttar Pradesh and Madhya Pradesh), Vapi (Gujarat), Indore, (Madhya Pradesh),
Jharsuguda (Odisha), Ludhiana (Punjab) and Patancheru-Ballaram (Andhra Pradesh). InSeptember 2013 the government noted, “The CEPI scores indicate (for the eight clusters) thateven after a period of two-and-a-half years of implementation of action plans, there is noimprovement in the environmental quality.” The moratorium on these eight industrial clusters remained.

With pressure building within the UPA to ease the moratorium, the environment ministry asked the Central Pollution Control Board to review the index itself and come up with another formulation within four months. Now, the NDA government has cited a delay in the review of the index to allow new factories and expansion in the polluted industrial zones on merit, practically doing away with the moratorium.

The government order of June 10 reads, “The report with respect to the entire CEPI concept i.e. taking into account all constituents as originally formulated in 2009, is yet to be received from CPCB. It is felt that re-assessment of CEPI  taking into account all its constituents as originally formulated in 2009 are a must before taking a view on re-imposition of moratorium in any centrally polluted area.”It adds, “It has, therefore, been decided to keep in abeyance until further orders…to the extentnit related to the re-imposition of moratorium in eight centrally polluted areas till CPCB reassessesthe CEPI taking into account all constituents of index as originally envisaged in 2009,” the order further stated.

Till the CEPI index is reviewed, the ministry will consider environment clearance of all the projects in these areas. The environment ministry has asked the CPCB to prepare a report on CEPI index within a year instead now which would permit the government to clear expansion and new industrial activity in these zones till the revised index is decided.

Source- Business  Standard

Monsoons likely to be Critical Factor for the Indian Monetary Policy



The  farm sector accounts for 14 percent of India's nearly $2 trillion economy, with two-thirds of its 1.2 billion population living in rural areas.  Half of India's farmland still lacks access to irrigation & depends on the vagaries of the monsoons.  

Poor rains generally hit summer crops such as rice, soybean, corn and cotton, raising food prices and pressuring economic growth that has nearly halved to below 5 percent in the past two years.  Rains are vital to rejuvenate  the  economy which is  battling its longest economic slowdown since the 1980s and to cool inflation that has averaged nearly 10-11 per cent for the past two years.

The Met Department has predicted  that the  rains will be 95 per cent normal this year and it is likely to revise its estimate later  in end June  according to the movement of the rainfall. If  official rain forecasts come true  then inflation  likely  to fall  below 8 per cent .

The likely fall in inflation, coupled with stability in the rupee and a slight pick up in growth    may lead RBI to be more balanced in its monetary policy making. The RBI has been repeatedly saying it will balance out concerns between the sagging growth and inflation even though it considers reining in the prices as a key objective. The RBI has raised its key rates three times  since  last September but took some growth-oriented measures like the decision to lower the SLR, which is likely to release an additional Rs 40,000 crore  ( $6.5B) for lending.