B U S I N E S S	Tuesday, July 14, 1998
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	Expedite FDI approvals: panel NEW DELHI, July 13 — Calling for restoring investors’ confidence, the Parliamentary Standing Committee on Industry has asked the government to accelerate Foreign Direct Investment (FDI) approvals, particularly in the infrastructure sector...		Japanese stocks, yen recover TOKYO, July 13 — Japanese stocks and the yen staged strong recoveries today amid optimism that Prime Minister Ryutaro Hashimoto’s resignation after a disastrous election showing would speed up revival... Food processing units in soup NEW DELHI, July 13 — Profitability of food processing units is likely to be adversely affected by the recent duty hikes . With the food processing sector accounting for over 3 per cent of the weightage of the... Punjab to have 2 more dry ports
	Centre taking steps to protect biodiversity NEW DELHI, July 13 — The Centre today told the Supreme Court that it was taking all necessary measures to protect biodiversity in the country in the wake of the patenting of “Basmati rice” by a firm... HP apple growers fear glut

Expedite FDI approvals: panel NEW DELHI, July 13 (PTI) — Calling for restoring investors’ confidence, the Parliamentary Standing Committee on Industry has asked the government to accelerate Foreign Direct Investment (FDI) approvals, particularly in the infrastructure sector. Stating that the foreign investment scenario was far from satisfactory, it said the Indian industry, already reeling under recession, had been groping for direction.“The need of the hour is to put the process of approving the FDI proposals, particularly in infrastructure, power and telecommunication, on acceleration so that the mood of the investor is not put off by the time he gets the nod to invest”, the committee said in its 25th report. On divesting the equity of public sector units (PSUs), it said there was a need for a Central implementation mechanism, which could monitor the implementation aspect of disinvestment.“Feasibility of handing over this job to the Disinvestment Commission may be examined”, it added. Referring to the proposal of the government to divest up to 74 per cent of its equity in non-strategic PSUs, the report said that disinvestment should be taken as a last resort and “as far as possible it should not go beyond 49 per cent”. The committee, headed by Raghavji, regretted that the Foreign Investment Promotion Board (FIPB) had not undertaken any exercise to address the problems faced by investors after their proposals were approved. “Perhaps, this could be the reason for the wide gap between proposals approved and the actual inflow of FDI,” it said. As against the total direct investment approvals worth Rs 1,60,255.44 crore, the actual inflow of FDI stands at Rs 36,420.71 crore up to April 1998 since the economy was opened up to foreign investors seven years back. The committee noted that while the overall approvals of FDI proposals stood at 52 per cent, the actual inflow was much lower at 22 per cent.Out of the actual inflow, infrastructure, power and telecom sectors accounted for 50 per cent.Regarding the enhancement of investment limit for small scale industries (SSI) from Rs 60 lakh to Rs 3 crore, the committee said this had proved counterproductive, endangering the survival of lakhs of tiny and small units. It recommended that the investment limit should be rolled back to the level of Rs 1 crore so that “lakhs of SSI units could be saved from being extinct”.The committee said the policy of levying excise duty on maximum retail price (MRP) as against ex-factory price should be scrapped forthwith in order to provide succour to the SSI units. Though the annual turnover limit for excise duty exemption was revised upwards to Rs 50 lakh from Rs 30 lakh earlier, the decision to levy excise on MRP had negated the advantage, it said.The report also called for withdrawing the 8 per cent excise duty on branded spices and edible preparations to save hundreds of small units involved in the production of these items.

Centre taking steps to protect biodiversity NEW DELHI, July 13 (PTI) — The Centre today told the Supreme Court that it was taking all necessary measures to protect biodiversity in the country in the wake of the patenting of “Basmati rice” by a firm in the USA. Making a statement before a Division Bench comprising Dr Justice A.S. Anand and Mr Justice D.P. Wadhwa which resumed hearing on a public interest petition in the “Basmati rice” patent case. Attorney General Soli J. Sorabjee said laws dealing with biological diversity were “under formulation” to fulfil obligations under the convention on biodiversity. Sorabjee said draft outlines of the proposed laws have already been formulated and circulated among different ministries, expert groups and non-governmental organisations for comments. Referring to patents already registered in the USA regarding “Basmati rice”, the Attorney General told the court that the government had engaged top lawyers who had successfully represented India in the “turmeric patent case” to fight this case also. He said steps had also been taken for an examination of patents in the USA. The government, he said, was bringing out further legislation - Plant Varieties and Farmers Protection Act - which was at the stage of formulation. The purpose of this Act was to ensure that foreign commercial interests did not indulge in bio-piracy of indigenous plants, Sorabjee said.

Japanese stocks, yen recover TOKYO, July 13 (Reuters) — Japanese stocks and the yen staged strong recoveries today amid optimism that Prime Minister Ryutaro Hashimoto’s resignation after a disastrous election showing would speed up revival. The benchmark Nikkei 225 stock average closed up 270.33 points, or 1.68 per cent at 16,360.39, bouncing back from an early morning drop of nearly 2 per cent.Similarly, the yen recovered to 142.47 after earlier sinking by about three yen to 144.50, but Japanese government bonds ended weaker. Mr Hashimoto announced at an afternoon news conference he would resign as president of the Liberal Democratic Party (LDP) — the first step to giving up his role as Prime Minister — to take responsibility for his party’s routing in yesterday’s upper house election.The focus is now shifting to who will take his place. LDP secretary-general Koichi Kato said a replacement would be named on July 21.

Food processing units in soup From Gaurav Choudhury Tribune News Service NEW DELHI, July 13 — Profitability of food processing units is likely to be adversely affected by the recent duty hikes . With the food processing sector accounting for over 3 per cent of the weightage of the Index of Industrial Production (IIP), duty hikes may translate into an inflationary push. The Budget has provided no tax relief to any category of food products , except instant food mixes.New excise duty has been imposed on several consumer goods like packaged tea, roasted chicory and coffee substitutes, cheese, butter, milk powder, branded spices , branded snacks and namkeens.The excise duty on milk powder, butter , cheese may have a dampening effect on the industry with cheaper options like margarine most likely to gain the market share. Industry observers say that the increase in excise duty on malt from 8 to 13 per cent and the shift in the levying of the duty from ex-factory prices to maximum retail prices is likely to adversely affect companies like SmithKline Beecham . Nestle India Limited may also have to bear the brunt of the excise duty hikes and the hike is likely to be passed on to consumers in the form of higher prices.The proposal of imposing excise duty on chocolates on MRP and not on ex-factory prices may affect the margin of companies like Cadbury and Nestle. The chocolate industry being extremely price sensitive, it may not be easy to pass on the burden to consumers.Moreover, over 50 per cent of cocoa requirements being imported, the customs duty of 8 per cent on cocoa beans is also likely to push up the costs.As far packed tea is concerned,excise duty of 8 per cent is also likely to have price implications, observers feel. About 65 per cent of the total tea production of Tata Tea accounts for packed tea.The only tax sop has been given to instant food mixes where excise duty has been brought down from 18 per cent to 8 per cent .

Growers fear apple glut NEW DELHI, July 13 (PTI) — Apple growers in Himachal apprehend a glut following a bumper crop almost after a decade. This may lead to a crash in prices adversely affecting the Rs 3,500 crore apple economy of the state, says an apple grower from Rampur, J.S. Mehta. “We have to spend an extra 30 to 40 per cent on packaging as the cost of cartons and other packaging material has gone up,” he said. A senior state Horticulture Department official, here to meet Union Agriculture Ministry officials, told PTI the apple output this year is likely to be over two crore boxes (3.6 lakh tonnes) as compared to over 80 lakh boxes (1.44 lakh tonnes) last year. The state government has already enhanced the support price for apples, to be procured by the HPMC and Himfed jointly, from Rs 3.50 to Rs 3.75 a kg.Chief Minister Prem Kumar Dhumal has issued instructions to these agencies to open procurement depots from July 20 instead of August 1 in rural areas to ensure that benefits flow to growers in the lower belt.Growers from Shimla, Kulu and Mandi districts are flocking to the Azadpur fruit and vegetable market here to negotiable deals with commission agents. “Agents are not forthcoming in giving advances this year except supplying wooden cartons. This has made our task difficult,” they complain.Carton prices have gone up from Rs 17 to 30 this year, Mehta said. “Costs of other packaging material has also gone up.” Added to this are transport costs, which take the price of each carton to around Rs 35. Besides, agents have raised their commission from 6 to 8 per cent. However, commission agents denied the growers’ charges saying they were unable to advance money to growers due to escalation in costs and unavailability of finances.

Punjab to have 2 more dry ports From Our Correspondent AMRITSAR, July 13 — The Punjab State Warehousing Corporation plans to increase the export cargo from Punjab by at least 20 per cent annually.Managing Director Karan A. Singh, addressing a meeting of exporters and importers of this district here today, said that with the issue of the notification by the Ministry of Finance last month the dry ports at Amritsar and Jalandhar would also handle imported cargo for this area. These would become operational soon. The export and import trade in Punjab has shown an annual growth of 10 to 15 per cent while the “containerised” trade has registered a higher growth of 13 per cent. The corporation, he said, plans to totally containerise” foreign trade at Amritsar, Jalandhar and Ludhiana. At present over 40,000 containers were used during the last financial year and with the shipping companies providing containers at the door-step, it would further facilitate the trade.Amritsar dry port will be further modernised by providing better handling equipment. The warehousing corporation has taken up the matter with the railway authorities for starting an export special for different ports from here. The suggestion of the local exporters for allowing road movement of containers will be looked into, he said. The corporation has drawn up plans to set up two more dry ports in Punjab — one at Bathinda and another near Chandigarh — for providing local traders especially cotton exporters, a direct link with the ports. The corporation was also setting up a refrigerated cargo complex at Ludhiana to facilitate exports of processed food including meat and mushrooms. The complex would be operational in the next few months.

Biz briefs Training From Our Correspondent LUDHIANA, July 13 — A training programme on export procedures and documentation was organised here by the Small Industries, Service Institute, Government of India, and the Punjab Small Industries and Export Corporation to impart elementary training to budding entrepreneurs. It was inaugurated by Mr K. Shiva Parsad, Additional Deputy Commissioner, Ludhiana. Award for SCL Tribune News Service CHANDIGARH, July 13 — Semiconductor Complex Limited (SCL), been conferred an award for excellence in microelectronics by the Department of Electronics (DoE). The Chairman-cum-Managing Director of SCL, Dr M.J. Zarabi, received the award on Saturday at a function held at Vigyan Bhawan, New Delhi. Bank branch From Our Correspondent LUDHIANA, July 13 — Allahabad Bank opened a branch at Khanna today. This is the first airconditioned and fully computerised branch in Khanna. The 36th branch of the bank in Punjab was inaugurated by Chairman and Managing Director, Harbhajan Singh. Anniversary Tribune News Service CHANDIGARH, July 13 — City-based Today Advertising Ltd celebrated its 10th anniversary by holding a function at Panchkula last night. Chief Executive Sunil Kumar said the company pioneered the concept of mobile showrooms for the rural segment of Punjab and Haryana, besides organising theme-based exhibitions.

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