New Delhi, August 20
Inflation threatened to breach the 8 per cent mark and stood at 7.96 per cent for the week ended August 7 even though the government exuded optimism that the prices will be reined in within the next couple of weeks.

The brunt of the rising inflation continues to be borne by households with soaring prices of vegetables, petrol, diesel and aviation turbine fuel.

The government, however, put up a brave face exuding optimism that the price-management strategy, initiated in the form of customs and excise duty cuts in petroleum products, will yield positive results by the early next month.

“The recent cut in customs and excise duties on oil products should take some pressure off inflation...and prices will start decelerating,” Chief Economic Advisor Ashok Lahiri told newspersons here. Dr Lahiri said there was no reason for any “wild expectations on inflation.”

The Wholesale Price Index (WPI) increased by 0.3 per cent to reach a level of 186.6 per cent as compared to 173.4 per cent in the same period a year ago.

For the period under review (week ended August 7), the prices of aviation turbine fuel increased by a whopping 11 per cent while diesel increased by five per cent and petrol by two per cent.

Economists said the rise in inflation could hold out dangerous portends if the volatility in the prices of international crude oil continued unabated.

Singapore, August 20
Global oil prices rallied to fresh highs on Friday with the US crude approaching $ 49, driven by escalating violence in Iraq and unabated demand growth from China and India.

US light crude for September rose 28 cents to $ 48.98 a barrel, the highest in the 21 years that oil futures have traded on the New York Mercantile Exchange, after jumping 3 per cents on Thursday.

The market, which later eased to $ 48.79, has set records in all but one of the past 16 trading days. The October contract gained 16 cents to $ 47.80 a barrel.

“It’s a typical play before expiry, pulling up the contract to its highest,” one trader said. “Fifty dollars looks realistic.”

Surging economies in India and China are continuing to drive oil demand, heightening competition for supply with the top consumer, the United States.

China’s demand for oil continued to gain strength from a year earlier, with a 175 per cent surge in July imports of light diesel to 159,513 tonnes, customs data showed. Yet light diesel imports shrank 38 percent compared with June.

Crude oil imports for the month jumped 41 per cent to 9.6 million tonnes, as its half-year imports soared 71 per cent from a year earlier, the figures showed on Friday. Countries, most of whom are oil consumers, are starting to hurt,” said David Thurtell commodity strategist with Commonwealth Bank of Australia.

As oil prices race towards $ 50, Opec President Purnomo Yusgiantoro said on Friday he was concerned with the continuing rise, but added the cartel had not yet seen a cost-driven increase in inflation.

But he hinted that Opec, which would gather next month before meeting other oil producers, would decide on a significant move towards resolving the problem of record oil prices.

Meanwhile, the Indian Prime Minister, Dr Manmohan Singh, today said the country must focus more on alternatives to crude oil and the Ministry of Non-conventional Energy Sources must accelerate the development and deployment of frontier technologies like hydrogen and fuel cells.

To start with, in rural areas “we will work to replace the use of diesel in agricultural pumpsets and tractors, by bio-fuels,” Dr Manmohan Singh said.

The litmus test used today to determine the effectiveness of such technology development programme is whether a country is a net foreign exchange earner in technologies, products, process and services, the Prime Minister said in his address after the release of postage stamp on Rajiv Gandhi, whose 60th birth anniversary was today. — Reuters, UNI

New Delhi, August 20
Price of vegetables, fruits and other perishable commodities across the country is likely to touch a new high with the truck and tempo operators’ unions threatening to launch a nationwide indefinite strike from tomorrow.

The traders have begun piling stocks as the nine-day long strike of 1997 still haunts them. They claim that due to delay in rains this year, the prices of potato, onion, tomato and other vegetables have increased by over 200 per cent during the past one month.

The unions are protesting against the Finance Minister’s decision to impose a 10 per cent tax on the “services provided by the transport agents.”

Addressing a press conference here today, Mr R.D. Bansal, president, All-India Transporters Welfare Associations (AITWA), said: “The strike will begin from 6 am tomorrow and transportation of milk, water and life-saving drugs only would be exempted. We will not be responsible for the rise in price of essential commodities.”

The associations have claimed that on an average a truck operator already pays over Rs 2 lakh annually in the form of sales tax, excise duty, permit fee, besides paying hefty amount to corrupt officials. Imposition of 10 per cent tax would be unbearable for the industry.

Meanwhile, the Finance Ministry has clarified that the service tax had not been imposed on the truck owners or operators but on booking agents. 

New Delhi, August 20
The government today announced to reduce customs duty on non-alloy steel from 10 per cent to 5 per cent with immediate effect, aimed at bringing down the steel prices in the domestic market.

“Customs duty on non-alloy steel (other than seconds and defectives) of headings 7201, 7203 to 7217 of the Customs Tariff, has been reduced from 10 per cent to 5 per cent,” said a notification tabled by Finance Minister P. Chidambaram in both Houses of Parliament.

Besides, the government has exempted melting scrap of iron and steel (other than stainless steel or heat-resistant steel) from customs duty. Earlier, five per cent duty was imposed on the products.

Customs duty on ships for breaking up was reduced from 15 per cent to 5 per cent. “CVD exemption has now been withdrawn on such ships and additional duty of customs (CVD) as applicable will now be payable on import of such ships,” the notification said.

The government would suffer a revenue loss of Rs 305 crore on account of duty cuts in the remaining months this fiscal.

Steel prices, besides those of petroleum products and vegetables, have been major factors behind the rise in inflation.

On August 3, steel companies had hiked the price of hot and cold-rolled products by Rs 500-1,000 per tonne.

This is the second fiscal sops in just three days that the government announced to stem inflation, which touched 7.96 per cent during the week ended August 7.

Karnal, August 20
The Small Industries Service Institute (SISI), Karnal, has prepared a cluster development programme for the modernisation of rice mills in terms of technology upgradation, infrastructure development, market development and capacity building of the owners of rice mills in Karnal and Kurukshetra districts.

The United Nations Industrial Development Organisation (Unido) in association with the National Institute of Small Industries and Extension Training has facilitated the preparation and further implementation of this cluster development programme.

Revealing this to The Tribune here today, Mr B.N. Kapur, cluster development executive of the SISI said, “I have already drafted the action plan after a diagnostic study of all rice mills located in these two districts that had been approved by Unido for implementation”.

He said the basic problem faced by rice millers in Karnal and Kurukshetra was the non-standardised machinery resulting in higher broken percentage of rice, high consumption of power, unnecessary expenditure on extra manpower, non-utilisation of machinery and manpower for more than six months in a year and more pollution.

It was also found that there was lack of technological knowhow, professionalism and knowledge of the latest trends in milling technology and management system among the rice millers, he said.

There are 221 rice mills in running condition and around 90 dead or non-performing rice mills in Karnal district. But, only 19 out of them meet the standards and export rice to countries like Japan, Korea and Australia. The other mills in Karnal district are in need of an improvement in parboiling technology; rice curing, storage and drying techniques to gain more profits through export of basmati as well as non-basmati varieties of rice.

The thrust area for modernisation of these mills calls for using parboiling technologies that require less water and generate less effluents, using husk as a soil conditioner and substituting rubber rollers with HDPE reinforced rubber rollers for reducing the percentage of broken rice.

To provide latest technical developments in the field of rice processing technology as per the action plan, the SISI is organising a workshop on ‘Recent Trends in Rice Processing’ and ‘Rice Milling Technology and Value Addition’ on August 22 and 23 at Karnal.

Mumbai, August 20
The State Bank of India (SBI) has unveiled major plans to expand abroad. According to chairman A.K. Purwar, the bank will raise $ 750 million from international financial markets to fund its expansion.

Mr Purwar said the SBI plans to raise a $250 million loan within two or three months and between $250 and $500 million by December through a bond issued abroad.

According to Mr Purwar, the SBI plans to increase its share of profits from overseas operations to about 20 per cent within two or three years. At present, foreign operations account for 5 to 6 per cent of the bank’s profits.

The SBI’s plans include the purchase of a foreign bank to accelerate its business overseas. In May last, it borrowed $ 250 million from the international market.

Flanked by Mr N.R. Narayana Murthy, chairman, Infosys Technologies, on the occasion of the SBI selecting Infosys Finacle to power its global operations across 20 countries, Mr Purwar told reporters that the deal with Infosys is pegged at $35 million.

Mr Purwar said the cost of setting up core banking solutions overseas would be around $ 34 million. A similar amount would be spent on the core banking solutions on the domestic front, he said. The SBI chairman said the bank would open 2,000 branches for the core banking by March 2005.

In a reply to a question, Mr Murthy said Infosys Finacle has been used in the ICICI and ABN Amro’s global operations. The SBI is the third bank, which is using the company’s services for setting up its overseas solutions, he said.

Chandigarh, August 20
Four mega projects, with an investment of more than Rs 1,000 crore, have been approved by an empowered committee constituted under the chairmanship of the Punjab Chief Minister, Capt Amarinder Singh.

M/s Vipul Infrastructure Development, would set up a 500-acre mega industrial infrastructure project. The project would be set up in and around the Ludhiana, Jalandhar and Ropar districts with a total cost of more than Rs 600 crore.

The committee also approved grant of a special package of incentives to M/s Dumex India Pvt Ltd at Jagraon in Ludhiana district for setting up a manufacturing plant for infant, child food and other nutritional products with a fixed capital investment of over Rs 100 crore. The project is likely to employ 1,000 persons and expected to be completed within a period of two and half years.

The committee also approved two other projects, M/s Guru Teg Bahadur Ltd at Dasuya in Hoshiarpur district and M/s Rana Sugar Mills in Amritsar.