New Delhi, March 2
The government today announced a promotional package for micro and small enterprises (MSEs) promising to raise the corpus of the Credit Guarantee Fund to Rs 2,500 crore in the next five years.

The eligible loan limit under the scheme will be hiked to Rs 50 lakh and the credit guarantee cover from 75 per cent to 80 per cent for micro enterprises for loans up to Rs 5 lakh, minister of small scale industries & agro and rural industries Mahabir Prasad informed the Rajya Sabha today.

As much as 80 per cent guarantee cover would be provided to MSEs operated or owned by women, the minister said in a statement he tabled at the fag-end of the day.

The fund would continue to be managed by the Credit Guarantee Fund Trust for Small Industries (CGTSI) — which will be renamed Credit Guarantee Fund Trust for Micro and Small Enterprises.

The minister also announced that the government would soon enact legislation on limited liability partnerships covering micro, small and medium enterprises to facilitate infusion of equity and venture capital funding in these enterprises.

The Small Industries Development Bank of India (SIDBI) will strengthen its credit operations for micro enterprises and cover five million additional beneficiaries over five years beginning 2006-07. The government will provide grant to SIDBI to augment the bank’s Portfolio Risk Fund for this purpose.

SIDBI’s direct lending operations would be expanded by increasing the number of branches from 56 to 100 in two years to cater to the credit needs of more clusters of MSEs.

For comprehensive and speedier development of such MSE-clusters, the existing guidelines of the small industries cluster development programme — to be renamed the micro and small enterprises cluster development programme — would be reviewed. The ceiling on project cost would be raised to Rs 10 crore.

Four training-cum-product development centres for agro and food processing industries would be set up at identified existing Small Industries Service Institutes.

Vertical Shaft Brick Kiln technology would be promoted for adoption by MSEs engaged in manufacturing bricks to make them energy efficient and eco-friendly. For this, a one-time capital subsidy — limited to 30 per cent of the cost or Rs 2 lakh, whichever is less — would be provided to micro and small brick manufacturing enterprises.

A technology mission will be established to assist micro, small and medium enterprises in technology upgradation, energy conservation and pollution mitigation, the minister said. — UNI

New Delhi, March 2
Upstream oil regulator DGH said today ONGC has made a natural gas discovery off the Andhra coast, but wanted the state-run firm to conduct fresh tests to ascertain its commerciality.

"There is no doubt gas has been discovered but since the discovery well was abandoned without conventional testing, this being the third such abandonment in the block, we wanted to be doubly sure before making any announcement. We want them to do fresh tests," Director-General of Hydrocarbons V.K. Sibal told reporters here.

A dispute had arisen between DGH and ONGC on the discovery in well UD-1 in Krishna Godavari basin deepsea block KG-DWN-98/2 after Sibal earlier said he disallowed the find.

ONGC, on the other hand, stuck to its guns, saying its assessment of over 14 trillion cubic feet of in-place reserves was based on MDT test, which is done globally to check discoveries, conducted in presence of DGH representative.

Meanwhile, the government today signed production-sharing agreements with winners of the 52 oil and gas blocks auctioned under the sixth round of New Exploration Licensing Policy.

ONGC signed production-sharing contracts (PSCs) for 24 blocks — 12 deep sea, two shallow water offshore and 10 onland.

Reliance Industries signed PSC for seven prime deepsea blocks, while Santos of Australia inked the pact for two deepsea blocks. — PTI

New Delhi, March 2
Jindal Steel and Power Ltd (JSPL) said today it would invest $2.1 billion (about Rs 9,500 crore) to set up steel plants in Bolivia for which it had reached an agreement with the Latin American nation.

"We have reached an agreement with the Bolivian government to set up a six-million tonne sponge iron plant, 10-million tonne pellet plant and 1.7-million tonne steel plant at an investment of $2.1 billion in the country," JSPL director, finance, Sushil Maroo said.

El Mutun is one of the world's biggest iron-ore mines with proven reserves of 40 billion tonnes of medium- grade quality ore.

Jindal, who won the bid in June last year, would be allowed to exploit 50 per cent of the El Mutun reserves. The company would also set up the supporting infrastructure for the proposed projects, including a 450-MW power plant.

The Bolivian government has agreed to sell natural gas to JSPL at $3.91 per million BTUs (British thermal units) for steel making which would account for 70 per cent of the total power requirements of the projects.

The agreement with Bolivia was help up earlier as Jindal wanted subsidised price on fuel and better tax conditions.

In June, 2006, JSPL emerged as the only company, which met the qualifying criteria set by the Bolivian government to exploit 50 per cent of the El Mutun reserves. This was followed by negotiations with the government on various clauses.

The project would allow Bolivia to develop a steel industry and the proposed investment was the single largest in Bolivian history.

The mines are located in the south-east of Bolivia about 50 km from the Brazilian border.

JSPL is a part of the Rs 20,000 crore Jindal group and has a turnover of Rs 3,000 crore having wide business interests in steel production, mining, power generation and coal and diamond exploration. — PTI

New Delhi, March 2
In a bid to clamp down on ‘illegal’ use of Internet telephony, the Department of Telecom (DoT) has directed Internet service providers (ISPs) to stop providing service to all call centres and business process outsourcings (BPOs) not registered with the department.

While TRAI has not yet completed the consultative process on review of Internet services, the DoT has sought to pre-empt TRAI’s recommendations by sending out the directive.

The business process industry association of India (BPIAI), which is an affiliated association of the CII, has strongly opposed this decision and has sought a rational way out, a statement said.

This move would directly affect an estimated 2,000 smaller call centres across the country, and might force their closure, putting about 50,000 persons out of job, mostly in smaller towns.

The association has proposed that all unregistered call centres running voice operations be allowed up to 90 days for filing registration applications with the telecom department.

The DoT, in turn, must accept or reject registrations within a time-bound period of 30 days.

New Delhi, March 2
The Foreign Investment Promotion Board (FIPB) is understood to have asked Hong Kong's Hutchison Telecom International Ltd (HTIL) for details about the 15 per cent stake held by minority shareholders Ashim Ghosh and Analjit Singh in its Indian mobile venture Hutch-Essar.

FIPB has also sought details from Bharti Airtel regarding Vodafone's stake in the company, sources close to the development said.

Vodafone and Bharti had last month announced an agreement under which Bharti agreed to buy back 5.6 per cent direct stake from Vodafone for $1.6 billion on deferred payment basis, while the UK mobile giant would be retaining the balance indirect equity in the group.

The FIPB move comes on the heels of the British giant approaching the Board late last month for approval to acquire controlling stake in Hutch-Essar from HTIL as well as for its investment plans for telecom business in the country.

Vodafone, which has agreed to acquire HTIL's stake in Hutch-Essar for $11.1 billion in cash and about $2 billion in debt assumptions, needs FIPB clearance under the government guidelines. The deal is subject to FIPB approval for Vodafone's exit from Bharti as well as acquisition of HTIL's stake in HEL. — PTI

Shimla, March 2
Doing exceptionally well on the economic front, Himachal Pradesh is on way to achieving a growth rate of 9.3 percent, higher than the growth of 9.2 at the national level, during the current financial year.

The economic review for the year presented by chief minister Virbhadra Singh in the Vidhan Sabha today painted a rosy picture of the state’s economy. It attained growth rate of 8.5 per cent in 2005-06 against a target of 8.2 per cent. The gross state domestic product on current prices increased to Rs 25,435 crore in 2005-06 from Rs 23,024 crore in the previous year. As per advanced estimates, it was likely to reach Rs 28,298 crore during the current year.

The per capita income, which touched Rs 33,805 in 2005-06, was likely to increase to Rs 36,783 during the current year, 26 per cent higher than the national per capita income. While the consumer price index for the state increased by 5 per cent during April to November 2006 as against 5.3 per cent at the national level.

The secondary sector, comprising manufacturing, construction and electricity and water supply, registered a growth of 14.1 per cent last year, which was higher than the national growth. However, the primary sector, which included agriculture and allied services, witnessed a growth of only 2.6 per cent mainly on account of unfavourable weather conditions.

The foodgrain production decreased from 14.88 lakh tonne in 2004-05 to 12.73 lakh tonne last year. The agriculture sector provides employment to 69 per cent of total workers of the state and generates 20 per cent of the gross state domestic product.

During the past four years, 8,500 new industrial units with an investment of over Rs 22,000 crore and a potential to provide employment to three lakh persons had been approved.

Chandigarh, March 2
Debt swapping — from high-cost loans to low-cost loans for refinancing; going in for secured financing; and, aggressive marketing strategies have helped in the complete financial turnaround of Haryana Financial Corporation (HFC).

Till two years ago, HFC was running into losses because of bad debts. But this year, the corporation has managed to earn a profit of Rs 10.58 crore. The non-performing assets (NPA) have also been reduced significantly (from Rs 249.95 crore in 2004-05 to Rs 194 crore now). The corporation is hoping that by the end of this financial year, the NPAs would be further reduced to Rs 170 crore. HFC has so far been able to recover outstanding dues to the tune of Rs 214.09 crore during the past two years.

The corporation has also shown a quantum jump in the total advances extended to the industry in Haryana. As against just Rs 24 crore extended as loans in year 2004-05, HFC has extended advances to the tune of Rs 170 crore this year.

Senior officials of the corporation informed TNS that the main reasons for the turnaround has been the debt-swapping of high-cost loans with low-cost loans. With this, the cost of borrowings from SIDBI and various public sector banks have been reduced from 12 per cent to 8.91 per cent. “This has been possible with the premature payment of high-cost borrowings to the tune of Rs 168 crore in the last two years. Besides debt-swapping, we have also made this premature payment through our internal accruals and loans from HUDA,” said the official.

The asset base of HFC has also been re-built through secured financing by the corporation. HFC is now advancing loans only to units set up in the industrial estates of HSIIDC and HUDA, where over evaluation of property is not possible. 

New Delhi, March 2
Having phased out its only luxury segment sedan Baleno recently, Maruti and its parent company, Suzuki Motor Company, would showcase its new offering , SX4 sedan, at the Geneva Motor show next week. Reports suggested that the SX4 sedan had nothing in common with Baleno.

The SX4 sedan is expected to be launched in India in the next three months to take on other manufacturers like Hyundai, Honda and General Motors.

This would be Suzuki’s second world car after Swift, which would be made available to the Indian consumer almost simultaneously after its global launch. It would be unveiled at the high-profile global auto show that gets under way at Geneva from March 8.

Although Maruti officials were tightlipped about the expected price of the new luxury model reports suggested that the SX4 would be Suzuki’s showpiece as it transforms from a global compact car giant to a complete car maker across segments.

MUL officials said here that their focus for the success of SX4 would be markets in North India, specially Punjab Haryana and Chandigarh. After the success of Swift and the new Zen, the SX4 sedan would be another bold step forward by MUL.

The new sedan is expected to be built at Maruti’s new manufacturing facility at Manesar. It will be offered in the A3 segment, which currently accounts for 15 per cent of the Indian passenger car market.

New Delhi, March 2
Car lovers who swear by the Honda badge will have to pay up to Rs 45,000 more, as Honda Siel Cars India Ltd is set to start charging the central sales tax on its models since the tax holiday it enjoys in UP is ending this month.

"Since inception, we have been exempted from the 4 per cent central sales tax in UP related to the amount of investments we make in the state. That is coming to an end," HSCI senior general manager Jnaneswar Sen said.

He said once the holiday was over the company would start charging the tax from its customers, thereby increasing the prices of its sedans — City, Civic and Accord.

"With the announcement in the Budget that CST will be reduced to 3 per cent effective April 1, we will be charging that amount to the customers," he said.

This will mean that 'City', which is priced at Rs 6.75 lakh, can be costlier by Rs 20,250. 'Civic', priced at Rs 10.88 lakh, would be dearer by about Rs 32,644 and 'Accord', which is tagged at Rs 14.92 lakh, may cost Rs 44,760 more.

He, however, said the company had not fixed the exact amount and the timeframe for the price hike. — PTI