Responding to charges of cartelisation against the industry, newly-elected CII President K V Kamath on Thursday said corporates must ask themselves whether their actions in a demand-driven market was causing distress to others.

"The government is sending a clear signal. We have to respond," he said when asked to comment on Prime Minister Manmohan Singh's veiled warning against cartelisation.

Kamath said his predecessor Sunil Bharti Mittal has already said that CII abhors cartelisation. "That's our response."

However, industry must respond to the call given by the government to join it in the fight against inflation, he said at CII press conference o Thursday.

The Prime Minister, while addressing the CII annual session on Wednesday, had said that the industry, "particularly in sectors characterised by significant market power in the hands of a few producers have a societal obligation to assist the government in moderating inflationary expectations".

Few sectors like cement and steel are facing charges of forming cartels to make profits from high demand. Steel prices have gone up by close to 50 per cent in the last 12 months forcing the government to take several administrative and fiscal measures to rein in prices.

Responding to the Prime Minister suggestion of sober compensation for the industry leaders, Kamath said sharp wage increase was responsible for corporate lifestyles. He said the increase in salaries, particularly of white collar personnel, would not be sustainable if India has to maintain its competitive advantage.

"We cannot have 12-15 per cent wage inflation. This has happened because we have not been able to create enough skilled workforce."

Kamath said the industry has to take this message, which will increasingly come under the corporate governance norms.

High salaries of CEOs has become a subject of debate and it is for the second time in a year that the Prime Minister has touched upon the issue.

Courtesy : FINANCIALEXPRESS.COM

World oil prices on Thursday rose by over one dollar in Asian trading, dealers said, after previous sharp falls overnight in response to a bigger-than-expected rise in US crude reserves.

In morning trade, New York's main contract, light sweet crude for June delivery surged 1.57 dollars to 115.03 dollars per barrel from 113.46 dollars at the close of floor trading during US hours on Tuesday.

At current levels, New York oil prices are down nearly five dollars from the record trading high of 119.93 dollars struck on Monday.

The latest price surge may be short-lived if the dollar continues to recover against the major currencies and worries over energy demand flare up again, dealers said.

"I imagine anyone who is bullish is looking at this opportunity to buy but I expect it to be short-lived," said Rowan Menzies, head of research at investment firm Commodity Warrants Australia.

"I think the dollar will firm and people will start getting more and more concerned about demand," he said. The US Federal Reserve on Wednesday cut the fed funds rate by a further quarter-point, as expected, to 2.0 per cent.

The US central bank also decided to lower the discount rate it charges banks by 25 basis points to 2.25 per cent.

The dollar was generally stable after the widely expected rate cut.

The US currency fell to a record low of 1.6019 to the euro on April 22 but has since recovered, changing hands at around 1.5634 in Asian trading on Thursday.

Courtesy : FINANCIALEXPRESS.COM