|Saturday, July 1, 2000,
Poor policies, rigid institutions
hit IT growth in India
Uco Bank comes out of the
policies, rigid institutions hit IT
NEW YORK, June 30 A country report by Standard & Poors has cautioned that a successful information technology (IT) sector in India does not necessarily portend an economic transformation, citing poor public policies and rigid institutions as major inhibiting factors.
The report titled Information Technology in India: Yet Another Missed Opportunity, said the beneficial impact of the IT industry may be limited to a few modernised sectors in an economy still run largely along traditional lines.
India has had more success in creating innovative IT applications than in building a flexible economy and physical infrastructure that is able to take advantage of them, the report said.
S&Ps credit rating for India remained unchanged as positive which was upgraded from stable in March this year. The report, which the agencys analysts said was the first of its kind in looking at a countrys specific sector rather than the country as a whole, was necessitated by the growth of Indias IT sector which could indirectly affect future credit ratings.
Assessing the long-term impact of the countrys IT sector, services of which were mostly exported currently, the report cited historical examples of scientific developments in the country that largely bypassed the general population but whose benefits were fully utilised by the people of other nations.
Indias restrictive laws and regulations and very-high trade barriers restrain the level of competition in the economy, limiting the incentive for firms to boost productivity through the use of IT, said Joydeep Mukherjee the S&Ps Sovereign group analyst, and also the lead author of the report released here yesterday.
He wrote in the report that the limited and sometime non-existent commercial orientation of public-sector enterprises in the country also led them to ignore the opportunities offered by IT. As a result, the report said, public sector units, ranging from government-owned commercial banks to state electricity boards, continue to operate with antiquated technology and have little incentive, let alone funding, to upgrade.
Its ironical that Indian firms and public institutions are slower than their foreign counterparts to take advantage of IT products, most of which originates in their own country, Mukherjee told IANS adding that Indias long-term competitiveness against other countries, especially China, may suffer in relative terms.
The report questioned whether more of the benefits resulting from IT development in India will flow to other sectors of the Indian economy or to companies in other countries.
It stated that a faster pace of economic reform, including privatisation, would maximise IT impact on the countrys economic growth, exports and living standards. This along with a reduction in the fiscal deficit of the countrys state and central governments would improve its overall credit rating.
Failure to reform the countrys bloated public sector and to further deregulate the private sector could keep IT as a small, modern enclave in a still-poor economy, the report cautioned, adding that under such a scenario, the country would miss a rare opportunity to transform its largely backward economy and alleviate poverty.
On the brighter side, the report said IT was changing political attitudes toward business and foreign investment. Its (ITs) success will further erode resistance against foreign investment and should contribute to liberalising rules for such inflows in unrelated sectors.
Noting that growing exports from the IT and relates services sector were likely to play a growing role in enhancing Indias external resilience, the report said that if properly promoted, the sector could have a similar impact on India as the shift in foreign direct investment (FDI) into export sectors had on other Asian economies in the early 1990s.
Low FDI is one reason why Indian exports grew by only 130 per cent during the last decade compared with 250 per cent growth in Chinese exports and over 200 per cent in Philippine exports.
Noting that the IT
sector was sure to flourish in the future, the report
said that the extent to which India as a country and its
credit rating also flourish will be determined by the
willingness of its public and private institutions to
take full advantage of its tremendous potential.
may touch 11 pc
NEW DELHI, June 30 Projections of a double-digit industrial growth for 2000-01 today helped overcome disappointing estimates that the Indian economy slowed down marginally during 1999-2000 to 6.4 per cent as against 6.8 per cent GDP growth in 1998-99.
While the revised estimates of annual national income, released by the Central Statistical Organisation put the growth at 6.4 per cent compared to the earlier estimated GDP growth of 5.9 per cent, Industry Secretary Ajit Kumar said industrial growth was expected to touch 11 per cent this year as against 8.3 per cent recorded last year.
As against an industrial growth of 3 to 8 per cent during the past five years, Ajit Kumar said in April this year, it grew at the rate of 12.3 per cent compared to only 5 per cent in the corresponding period last year. This was possible due to remarkable growth in the manufacturing sector which grew at 14 per cent.
We have done extremely well so far in the current financial year and we expect to end the year with 11 per cent growth rate, he said.
There was also cheer on the foodgrains front with production touching a record 205.91 million tonnes in 1999-2000 as compared to 203.04 million tonnes in the previous year.
Wheat production recorded an all time high of 74.25 million tonnes during the year, up by 3.47 million tonnes from last year, Agriculture Minister, Mr Nitish Kumar said.
Rice production during kharif and rabi seasons was also higher at 88.25 million tonnes compared to 86 million tonnes in 1998-99.
The record production was despite the devastating cyclone in Orissa and drought in Gujarat, Rajasthan and parts of Andhra Pradesh.
Pulses and oilseeds production, however, were down this year due to the drought in western parts of the country.
Keeping the good monsoon predictions in mind, the Government had set a foodgrain production target of 210 million tonnes for the current fiscal year.
According to the revised estimates released by the CSO, sectors which contributed to the revised GDP growth rate included trade, hotels, transport and communication.
Cut NABARD interest rates: Haryana
NEW DELHI, June 30 Haryana Cooperation Minister Kartar Singh Bhadana today urged the Centre to direct NABARD to reduce the rates of interest as the RBI advances NABARD loan at lower rate of interest.
Addressing a meeting of state cooperation Ministers convened by the Union Government here to discuss the National Cooperative Policy, Bhadana suggested that a national-level cooperative institution like NABARD should be set up for safeguarding the interests of credit cooperative societies in the states. The Union Government at present was providing adequate financial assistance to the industrial sector through IFCI, IDBI, ICICI and SIDBI.
He said while a businessman had to pay only 12 per cent or less interest on the crores of rupees he seeks as loan from banks, a small farmer still pays 14 to 15 per cent interest on loans of only a few thousands of rupees.
He urged the Centre to give a financial assistance of Rs 7,500 crore to cooperative banks, on the lines of that given to commercial banks, to help them clear the balance sheet.
Mr Bhadana cautioned the Government against reducing assistance to the cooperative institutions saying it would adversely affect them. He also opposed the suggestions that some cooperative institutions should be converted into companies saying the principles and conception of cooperative was very sacred which should be protected at any cost. He said the cooperative institutions function on the basic principle of open membership, one member, one vote and charges lower rates of interest on the shares. These institutions were not constituted with the aim of earning profits like the private companies.
The Minister informed
the meeting that recently NABARD had declared Haryana
State Cooperative Apex Bank as the best bank at the
national-level for 1998-99 on the basis of its
outstanding performance. The Ambala and Kurukshetra
Central Cooperative Bank had also been adjudged best
banks at national-level for 1997-98 and 1998-99,
respectively. He said all 17 central cooperative banks
were earning profit despite the imposition of the norm of
non performing assets.
Uco Bank comes out of the red
SHIMLA, June 30 After incurring losses for the past nine years, UCO Bank finally out of the red. It earned a net profit of Rs 36.64 crore for the year 1999-2000, the accounts for which were approved by the board of directors today.
Mr S.D. Uppal, Assistant General Manager of the bank, said that last year bank had suffered a net loss of Rs 67.77 crore. This year the operating profit increased to Rs 177 crore from Rs 38 crore.
The NPA of the bank came down from 10.83 to 8.7 per cent during the year and the total deposits grew by 14.34 per cent to reach 18,360 crore as against the national average of 13.6 per cent. The advances swelled by Rs 1374 crore, an increase of 19 per cent.
Referring to the position in Himachal Pradesh Mr Uppal said the deposit up by 17 per cent to touch Rs 667 crore and advances Rs 141 crore. Out of the Rs 74 crore was advanced in private sector and Rs 23 crore in the agriculture sector.
The net profit came to Rs 3.19 crore. The bank managed to reduce its NPA by Rs 6.18 crore this year and it would further brought down by Rs 7.10 crore during the current year.
CHANDIGARH, June 30 The Finance Minister of Punjab, Capt Kanwaljit Singh, today approved the setting up of an Indian Institute of Information Technology (IIIT) in Mohali. This was announced at a software exporters meet which was chaired by the Finance Minister and attended by Mr Adaish Partap Singh Kairon Minister Excise & Taxation, Mr Jagir Singh Chief Parliamentary Secretary and other senior officials.
The Finance Minister said that there is a need to set up a representative office in California to keep in touch with potential investors in high technology and also engage a public relations firm in the USA to constantly market Punjab.
Mohali will be an exclusive economic zone where industry will be given uninterrupted power supply, said an official release here.
In another development, Chaudhary Swarna Ram, Tourism Minister, Punjab announced today that the Centre has given its nod to a tourist complex at Ferozepur and a yatri nivas at Mohali.
The Government will also set up a heritage hotel and a yatri nivas at Patiala, he said.
With the assistance of Himachal Government, the Punjab Government will start a rope-way from Anandpur Sahib to Nainadevi temple.
told to use hyacinth
HARIKE (Ferozepore), June 30 The Punjab Government is understood to have approached several paper mills to procure water hyacinth, which has virtually eaten up the wetland lake here causing serious ramifications to its environmental condition.
As the hyacinth can also be used as raw material to produce paper and cardboard, the authorities have approached a few Goindwal-based industrial units to make use of the weed that poses threat to the wetland. Highly placed sources in the Punjab State Council of Science and Technology revealed that the authorities are in touch with a few industries, which are willing to lift hyacinth from the wetland.
As of now, the council proposes to get the wetland lake cleared off from the hyacinth with the help of the Army. Once this is done, the hyacinth would be dried up and lifted by the paper mills for industrial use.
The council is also keen to offer free transportation of the hyacinth to the industrialists, who are keen to make use of it.
It the council succeeds in its efforts, this would further encourage paper mills in the state to weed out hyacinth for industrial use elsewhere too. This will go a long way to check the environmental threat arising out of the hyacinth, which has its origin in Latin America.
Meanwhile, the Principal Secretary of the Council, Mr Rajan Kashyap is learnt to have written a series of letters to some industries. He has also asked the forest officials and the district administration to use their good offices to tie up with paper mills in view of the proposed army operation scheduled to start next month.
Presently, the council is relying on weevils, an insect of Latin American origin that is considered as natural enemy of the hyacinth to check the growth of the weed. The irrigation department is learnt to have left weevls in the catchment areas to destroy the roots of the hyacinth. However, little success has been made in this on account of massive growth of the hyacinth.
Officer at the council, Mr Satnam Singh Ladhar, explained
that the hyacinth, which was brought to the country by
the Britisher for ornamental use turned out to be a bane
for Indian environment. Also known as blue
devil, the hyacinth has eaten up vegetation and
lakes, he said.
2 shortlisted for AI
NEW DELHI, June 30 (PTI) Two major consultancy firms were today shortlisted by the government for global advisor (GA) for privatisation of Air India, official sources said here.
The two firms, whose names were not disclosed, were chosen from a total of four companies which had bid for the post, which entails advising the government on the entire process of disinvestment and selection of a strategic partner for the national carrier, the sources said.
The four firms are J M Morgan Stanley, Lazard Capital jointly with SBI Caps, Solomon Smith Barney and Sumitomo Bank with Industrial Development Bank of India.
ICSI to update syllabus
CHANDIGARH, June 30 Dr S.P. Narang, Secretary, Institute of Company Secretaries of India, has said in a statement that to meet the challenges of the cybernated environment, the ICSI is proposing to update its curriculum for the students which will be of immense help to the corporate world.
Referring to the news item Jobs shrink for company secretaries, he said the headline has created misgivings in the minds of prospective students and those currently pursuing the CS course. The news item gives the impression that because of shrinking job opportunities we have thought of revising the syllabus.
Rakesh Lohumi writes
from Shimla: There is no factual error in the report, Mr
Narang himself stated that the number of candidates had
come down from 30,000 to 21,000 over the past three years
due to shrinking job opportunities. That the situation
would change after the proposed amendment to the
Companies Act was also mentioned in the news items.
Back to work under Sun
BANGALORE: There is nothing quite like coming back home to work under the Sun. This seems to be the mantra of 28 per cent of the Indians working with information technology (IT) global leader Sun Microsystems worldwide.
More and more employees in the USA are asking to relocate in India at our global engineering centre here, says Avinash Agarwal, Director, India Engineering Centre, who himself returned a year ago.
There is a perceptible trend among our colleagues abroad who want to come back. First, there is no place like home, family and culture. Secondly, what was lacking was work on cutting edge technology, which is not the case now.
Thirdly, salaries and facilities that make it possible to maintain a certain quality of life, Bhaskar Pramanik, CEO, Sun Microsystems, India, told IANS.
Indian on Ernst & Young list
NEW YORK: Indian American K. Paul Singh, Chairman and CEO of Primus Telecommunications, is among the 10 Ernst and Young Entrepreneurs of the year.
Singh, whose company is based in McLean, Virginia, has been chosen by the prestigious consulting company for the Greater Washington Program 2000.
Since founding Primus in 1994, Singh has seen revenues grow from $ 1 million annually to $ 1 billion in 1999. He has also established a foundation that helps first generation immigrants and provides grants to high school and college students to encourage entrepreneurship.
The Ernst and Young winners were announced at a gala awards ceremony held in Virginia on Thursday. The event was the culmination of an intensive search to identify and recognise the Greater Washington Areas outstanding entrepreneurs. These winners are now eligible to participate in Ernst and Youngs National Entrepreneur Of The Year awards competition, a highly respected programme honouring outstanding owners of fast-growing companeis.
Student sells site for $ 12 m
FREMONT (California): He was a young man with a simple dream to build a website focussed on games that would be savvy enough to satisfy the hard-core gamer and yet simple enough to make updating content a breeze.
Now Harsha Jayasekera, a 21-year-old college student who immigrated here from Sri Lanka three years ago, is $ 12 million richer. He has sold his site MegaGames.com, to an online media firm.
I was very, very proud and very happy, Harshas mother, Sriyanganie Jayasekera, told the California newspaper India-West.
When the site was
launched, it attracted around 800,000 visitors. Six
months later MegaGames.com was clocking numbers closer to
30 million page views a month, becoming one of the
largest game sites on the web. Soon other Internet
companies started taking notice of the site and one
offered Jayasekera $2 million. He turned it down.
Reliance hikes BSES offer price
MUMBAI, June 30 (UNI) Reliance Industries Ltd. (RIL), together with its wholly owned subsidiary, Reliance Power Ventures P. Ltd. (RPVL), today announced an upward revision in the open price for further acquisition of equity shares of BSES Ltd, from Rs 234.60 per share to Rs 255 per share. The revised price represents a premium of nearly 10 per cent to the original offer price, and a premium of 4 per cent to the closing price of the BSES share today. The revised price of Rs 255 also represents the closing price of the BSES share on the date the public announcement of the open offer was made by RIL and RPVL.
Information solutions by Siemens
BANGALORE, June 30 (PTI) In a move towards becoming a total solutions provider in the field of private communication network systems, Siemens Limited today announced its new line of information and communication solutions Hicom 150 E Office and Euroset Line 8i.
The Hicom 150 E Office communication systems aim at consolidating Siemens position in the mid segment.
Eveready net falls 75 pc
CALCUTTA, June 30 (PTI) Eveready Industries India Limited (EIIL) has posted steep fall of 75 per cent in net profit to Rs 8.51 crore while registering about 5 per cent increase in turnover in 1999-2000. The total income during the year increased to Rs 832.92 crore from Rs 795.39 crore in the previous year while the net profit fell from Rs 34.84 crore in 1998-99.
NSE.IT, HDFC Bank sign MoU
MUMBAI, June 30 (PTI) NSE.IT, a wholly-owned subsidiary of the National Stock Exchange, and HDFC Bank have come together for providing payment gateway services to brokers of NSE and clients operating through the proposed broker plaza.
18.9 pc growth by Central Bank
CHANDIGARH, June 30 (TNS) Central Bank of India recorded a growth of 18.9 per cent to reach Rs 51,677 crore, the total deposits recorded a growth of 17 per cent over the previous year to Rs 35,872 crore. The share of savings deposits in aggregate deposits improved to 31 per cent during the year and the cost of deposits came down to 7.69 per cent.
Kesoram invests 337 cr
CALCUTTA, June 30 (UNI) Kesoram Industries Limited, has approached the Central Government seeking permission to change the basis for providing depreciation on the assets of its cement divisions. The Company had invested Rs 337 crore towards expansion of cement capacity and setting up of two coal based captive power plants of 15 MW capacity each at its Kesoram and Vasavadatta Cement plants.
Apollo plans healthcare portal
CHENNAI, June 30 (PTI) Apollo Hospitals here said today that their proposal to venture into a healthcare portal, Apollo Life.com, had been cleared by the Hospitals board. Boston Consulting Group has been engaged to advise and set up the infrastructure required for the purpose of building the portal.
ITI ties up with Ericsson
BANGALORE, June 30 (PTI) The Rs 2,000 crore ITI Limited today joined hands with Ericsson for jointly exploring and pursuing business opportunities in India with a view to marketing and selling Ericsson IP (Internet Protocol) telephony platform as well as other products of Ericssons Data Switching family.
Archies joins hands with Yahoo
CHANDIGARH, June 30 (PTI) The Haryana Government has extended the date for filing documents for the assesment years 1998-99 and 1999-2000 under the self-assessment scheme implemented by the Department of Prohibition Excise and Taxation to August 31. The scheme has been introduced for dealers having an annual turnover of up to Rs 50 lakh, an official statement said here today.
PATIALA, June 30 (TNS) Banks of this district have been urged to expedite loans for self-employment and welfare schemes. This was stated by Mr Jasbir Singh Bir, DC, while addressing bank coordinators and senior officers of various departments at a meeting held at the Red Cross Bhavan here yesterday.
CHANDIGARH, June 30 (TNS) The PHDCCI and WWICS organised a seminar on Canada-new business horizons here today. Mr Ashok Khanna of the PHDCCI said with the Exim Policy in place, there are wider areas of cooperation for businessmen in Canada and in this region. Lt-Col B.S. Sandhu, MD, WWICS, highlighted business facilities available in Canada.
NEW DELHI, June 30 (PTI) Indias foodgrain production touched a record 205.91 million tonnes in 1999-2000 compared to 203.04 MT in the previous year. Wheat production recorded an all-time high of 74.25 MT during the year, up by 3.47 MT from last year, Agriculture Minister Nitish Kumar said today.
Price index up
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