Friday, April 9, 1999
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B U S I N E S S | Friday, April 9, 1999 |
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Punjab ST hike to hit
auto industry WTO rules against India |
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India’s growth rate
to be 4.8 per cent: World Bank UN survey lauds India |
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‘Treat hotels as
industry’
Modifications in health insurance
plans urged Reduce govt expenditure, says
Kelkar SFC staff demand bailout package SBP counter at Anandpur Sahib |
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Punjab ST
hike to hit auto industry CHANDIGARH, April 8 — The Punjab Government’s recent decision to hike sales tax on cars, trucks, buses etc from 3.5 to 8 per cent will hit hard the automobile industry. The prices of cars in Punjab have gone up by Rs 10,000 to Rs 40,000 per vehicle. Stating this, a PHDCCI
representation to the State Government has said that it
is wrong to assume that by increasing the rate of sales
tax it would get a substantial increase in revenue. At
present the annual revenue collection is about Rs 150
crore on the sales of automobiles alone and it is bound
to come down by more than 95 per cent in a year because
of lower rates of sales tax in Chandigarh, Haryana and
Himachal.Besides, the Government may lose revenue on
account of registration charges and road tax of new
vehicles as the buyer would get the vehicle registered in
the neighbouring States. The “entry tax” will
also adversely affect the collection of registration
charges and road tax. |
India’s growth rate to be 4.8 per cent: World Bank WASHINGTON, April 8 (PTI) — India successfully weathered the South-East Asian economic crisis to emerge as the most sought after investment destination in the region last year but needs to push ahead with reforms to prevent an economic slowdown, the World Bank has said. Despite a substantial fall in the overall foreign investment flow to South-East Asia, investment flows to India soared, the bank said in its annual Global Development Finance report released yesterday. “This despite concerns over its nuclear tests.” “Foreign direct investment (FDI) to the region equalled $ 4.4 billion in 1998, down from $ 4.7 billion in 1997. India, which received 80 per cent of the region’s FDI flows in 1998, experienced a rise in flows,” the report said. On the flip side, the report said, against India’s expected GDP growth rate of 5.8 per cent in 1998-99, the growth rate will be 4.8 per cent in 1999-2000, much less than the 6.5-7 per cent rate needed for a fall in poverty levels. It identifies fiscal imbalances at both Central and State levels, reforms in the public sector, including the civil service, tax administration and expenditure allocation, as major areas of concern that have to be addressed for growth to take off. China and Mexico were the other nations that not only survived the crises but also saw their economies grow last year, the report said attributing this to their huge domestic markets and tight capital curbs. On the whole, the bank said India is among the few nations that weathered the economic crises “relatively well.” Recent estimates suggest that a GDP growth of 5.8 per cent may be achieved during fiscal year 1998-99. “In spite of sanctions that followed the tests in May 1998 and deterioration of market sentiment, India successfully launched a five-year Resurgent India bond attracting more than $ 4 billion from NRIs,” the report said. “But trade and fiscal balances deteriorated. The trade deficit widened and, despite low oil prices, the current account deficit may reach 2.5 per cent of GDP in 1998-99 compared to 1.6 per cent in 1997-98.” Moreover, the Central Government’s “chronic” deficit may rise to 6 per cent of GDP in 1998-99, above the targeted 5.6 per cent because of a shortfall in revenues, it said. Explaining why so far East Asia’s financial crisis has had only “a limited impact” on South Asia, the bank said, “India, the dominant economy in the region, was protected by its large market and capital account curbs that dampened the effects of turbulence in international capital markets.” Throughout 1998 the
currency was allowed to drift lower to safeguard
competitiveness of exports, and the real effective
exchange rate fell 10 per cent between August 1997 and
December, 1998, it said adding that this could result in
higher consumer prices for 1998-99. |
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WASHINGTON, April 8 (AFP) — The World Trade Organisation has ruled against India in a dispute with the USA, finding that Indian import restrictions violate WTO regulations, US officials have said here. A statement from the office of the US Trade Representative yesterday said a Geneva-based WTO panel rejected India’s claim that its balance of payments situation justified the restrictions. “It is time for India to adhere to its WTO obligations and open its market by removing these measures,” insisted US Trade Representative Charlene Barshefsky. “Such measures would stimulate investment, competition and economic activity in India.” The decision stipulates that countries with restrictions based on a precarious balance of payments situations must lift them when their trade picture improves, according to the USTR. The International Monetary Fund had determined in 1997 that India no longer had balance of payments difficulties that could justify import curbs. A country’s balance of payments records all of its economic transactions with the rest of the world. The USA sought a WTO
ruling to challenge Indian restrictions on imports of
consumer goods and agricultural, textile and
petroleum-related products, which it said constituted the
largest barrier to increasing US exports to the Indian
Market. |
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NEW DELHI, April 8 (PTI) — The 1999 United Nations Economic and Social Survey of Asia and Pacific region has praised India for achieving a 6 per cent economic growth in 1998 despite Asian currency crisis which has spread worldover. Distinct improvement in the performance of both agriculture and industrial sectors in the fiscal1998 has pushed the overall growth rate at 6 per cent as against 5.1 per cent in 1997, the survey released here today said. Aided by a good summer monsoon, food grain production was estimated to have exceeded the record 199 million tonnes produced in 1996. As a result, output of agriculture grew by 3 per cent in 1998 as opposed to a contraction observed in the previous year. The industrial sector continued to benefit from the government’s sustained effort to abolish licensing for both domestic production and exports and consequent increase in private investment, it said. Infrastructure, especially electricity generation, picked up significantly in 1998, which helped the industrial sector to maintain its tempo and grow by an estimated 5.5 per cent, the same rate as previous year. The survey was critical of the India’s export growth which had contracted to a mere 0.5 per cent in 1998 fiscal year. The survey said that due to relative insulation of capital market, Indian economy was not much affected by the Asian economic crisis. Rates of investment and savings maintained their high magnitude of more than 25 per cent in 1998 and consumption expenditure was buoyant. Elaborating on trade performance, it said there were exceptions to the poor trend as software exports grew by 50 per cent year-on-year in the first quarter of 1998. Another saving grace was that trade deficit increased only marginally to 5 per cent of GDP in 1998 from 4.3 per cent in 1997 inspite of poor export performance. It said the overall net
capital flows declined to $ 9.8 billion in 1998 from $
10.4 billion in 1997 even after the mopping up of huge $
4.2 billion from the Resurgent India Bond. |
SFC staff
demand bailout package NEW DELHI, April 8 — Several State Financial Corporations (SFCs) face closure unless the Central Government steps in with a bail out package, the All-India State Financial Corporation Employee’s Federation has said. The Federation in a memorandum to the Union Finance Minister, Mr Yashwant Sinha, has said the promoters of the SFCs—the State Governments and financial institutions like the IDBI and SIDBI —were indifferent to the problems faced by the corporations. Mr C.B.C.Warrier, Advisor to the Federation, told newspersons here that the SFCs required at least Rs 2,000 crore to become viable. The SFCs were established under an Act of Parliament (SFC Act 1951) with the objective of providing finance to small and medium scale industries. The SFCs with an investment of over Rs 30,000 crore had huge non- performing assets (NPAs) and this was a result of political interference. Mr Warrier said there was no fixed tenure for the Chairman and Managing Directors of the SFCs and they were normally drawn from the bureaucracy. With chief executive officers changing every five to six months the SFCs were suffering, he claimed The Federation has urged the Finance Minister to amend the SFCs Act, 1951, bringing the administrative control of the SFCs directly under the Central Government. Mr Warrier said the SFCs
should be recapitalised by raising the authorised capital
upto Rs 500 crore and the Central Government should
provide a one-time equity support of Rs 500 crore. |
‘Treat
hotels as industry’ PANIPAT, April 8 — The Industries Minister, Haryana, Mr Shashi Pal Mehta while addressing a State level meeting of the Hoteliers of Haryana here today said that Haryana Government would study the report of Maharashtra and Uttar Pradesh Government by which they have declared the hotels as Industry in their respective states. After studying the report the matter of declaring the hotels as industry in Haryana would be put up before the Chief Minister for consideration. The President of Hotel and Restaurant Association of Haryana, Mr Manbeer Choudhary, informed that Maharashtra and Uttar Pradesh Government have recently declared hotels as industry in their respective states. He said that the Haryana Government does not recognise the hotels as industry in the state and thus no facility or incentive like exemption in Sales Tax for seven years; Loans at lower rate of interest by Haryana Finance Corporation and HSIDC; subsidy and exemption of electricity duty to new projects for seven years had been granted. He demanded that these facilities should be given to the hoteleirs after declaring the hotel as an industry in Haryana. Mr Manbeer Choudhary
said that if the hotels were notified as industry, it
will not earn foreign exchange but will also generate
employment for the trained jobless youths. |
Modifications in health insurance plans urged NEW DELHI, April 8 (PTI) — Modifications in health insurance schemes aimed at providing economic incentives for being healthy and not claiming frequent medical reimbursement could create more awareness on the importance of a healthy lifestyle, Planning Commission Deputy Chairman k. c. pant said today. The premium of health insurance may have to be adjusted on the basis of the health status of the person and age of the person and his or her family at the time of entry into health insurance, Pant said inaugurating the sixth conference of the Central Council for Health and Family Welfare. Yearly “no claim bonus” or adjustment of the premium could be made on the basis of the previous year’s hospitalisation cost reimbursed by the insurance company, pant suggested. Such measures would help create more awareness over the importance of remaining healthy through preventive measures. Guidelines on what are the services for which reimbursement cost will be borne by the insurance company may have to be discussed, drawn up and implemented. Also needed are appropriate mechanisms through which insurance premiums for people below the poverty line are to be met, Pant said. The three-day conference, to be presided by Health Minister Dalit Ezhilmalai, will discuss among others, the draft national health policy. Both Pant and Ezhilmalai said areas of concern which need to be addressed at the meeting include the high incidence of communicable and non-communicable diseases; wide disparities in primary health care services, rates of population growth and infant mortality in different parts of India; and inadequate health care in rapidly expanding urban slums. Pant said emphasis in the coming years should be on optimising coverage and quality of primary health care services by identifying and rectifying critical gaps in infrastructure, manpower, drugs and diagnostic facilities in primary health care centres. “Nagar palikas” and panchayati raj institutions that have become operational in many States should be involved in local planning and monitoring of programmes related to sanitation, health, and women and child development. On the problem of inadequate manpower and equipment in government secondary and tertiary care centres, Pant pointed out that some States have started levying user charges for diagnostic and treatment services offered in such centres to people above the poverty line to meet their recurring costs. Some States are also taking up experimental projects to set up pay clinics and pay cabins for generating funds. If found successful,
income from such pay clinics could be used as subsidy to
treat patients below the poverty line. Daewoo launches cheaper Matiz
cars NEW DELHI, April 8 — Daewoo Motors India Limited today announced the launch of cheaper versions of its small car Matiz.The 796 cc Matiz will now be available in the range of Rs 2.50 lakh to Rs 3.27 lakh a company statement said. The ex-factory price of
the non-airconditioned version Matiz Standard (SS) has
been fixed at Rs 250,778, while that of Matiz Deluxe (SD)
air-conditioned with a stereo system has been fixed at Rs
285,963.Matiz Executive (SE), having power windows, a
central door lock and a music system, has been priced at
Rs 327,630.Matiz Premium (SP), the fully loaded version
with power steering, rear window defogger, rear wiper and
a roof rail, has been priced at Rs 346,148 (ex-factory).
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Reduce govt expenditure, says Kelkar MUMBAI, April 8 (PTI) — The Reserve Bank of India’s manoeuvrability in respect of interest rates is restricted by the Central Government’s huge fiscal deficit, Finance Secretary Vijay Kelkar said here today. Addressing members of the CII, Kelkar said “the trick is to reduce government expenditure.” Reduction of revenue deficit and doing away with subsidies would give the central bank more room to fiddle with the interest rates, he said. However, he admitted that interest rate policies were in RBI’s domain. The RBI governor Dr Bimal Jalan, has ruled out further signals for pushing down interest rates in the monetary and credit policy for 1999-2000 to be announced on April 20. Kelkar also expressed anxiety about the rising oil prices and said a sustained increase would be worrisome. Queried about the asset reconstruction companies in the banking sector, Kelkar told the CII members that they would have to wait for the Verma Committee to submit its recommendations. So far as implementation
of the second Narasimhan Committee recommendations was
concerned, he said “we will do it one by one.”
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NEW DELHI, April 8 (PTI) — Reliance Industries Ltd (RIL) is planning to buy the sick company SM Dyechem Ltd’s glycol division. Several financial institutions have approached RIL for buying the glycol unit in order to revive SM dyechem which has been declared sick by the BIFR. Following Reliance’s plans to buy out the unit, the BIFR has asked IDBI, operating agency for SM dyechem, to prepare a revival scheme for the company, a BIFR statement said. SM Dyechem has also approached IPCL and Finolex for the sale of its Glycol unit but only RIL has expressed interest in taking over the unit. SM Dyechem Chairman SM Shetty has informed the BIFR that all discussions with RIL were being held through the institutions and if they (RIL) backed out, no other buyer was likely to be found for this unit. RIL has indicated that it could buy the division for Rs 274 crore on a deferred basis with payment in the 9th, 10th and 11th years, the present discounted value of which works out to Rs 75 crore. IDBI has informed the BIFR that RIL had offered Rs 75 crore for the major part of the unit and the rest was likely in fetch Rs 25 crore. However, the company as a whole was valued at Rs 130 crore. The other divisions of
SM Dyechem are foods and soya. |
SBP
counter at Anandpur Sahib CHANDIGARH, April 8 — On the tercentenary celebration of the birth of the Khalsa at Anandpur Sahib, State Bank of Patiala today opened a special counter at Gurdwara Shri Keshgarh Sahib. Bhai Manjit Singh, Jathedar, Takht Shri Keshgarh Sahib inaugurated the centre. Mrs Prem Lata, DGM, Mr
J.S. Mann, AGM, State Bank of Patiala, Zonal Office,
Chandigarh, said the special counter will cater to the
needs of visiting devotees for coins and currency notes
of various denominations as also provide foreign exchange
facility, including encashing of traveller cheques to the
visiting NRIs. |
ONCE upon a time, Indians returning from a visit to the United States would talk of their trip to Disneyland or a similar amusement park, the thrill of going up on a roller coaster, the hair-rising descent or the excitement of riding on the Columbia sailing ship. But today, the amusement industry in India is developing so fast that almost every major city boasts of amusement parks and water parks that draw huge crowds of children and adults, particularly during the summer holidays. Since every ‘ride at these parks is meant to pump up your adrenaline, the faster the ride, the better the thrill.However, safety is the key to the success of such “amusement”. In the United States, where an estimated 290 million people visit these amusement parks annually, the number of injuries treated at hospital emergency rooms every year is around 3,800. Out of this, about 75 require hospitalisation. Fatalities average 2 in a year. This is despite the fact that most States have stringent laws to monitor the safety of these rides. In addition, those who manufacture the ‘rides’ and those who run them at amusement parks follow strict inspection and maintenance procedure because an accident would mean paying very huge compensation through law suits. In January this year, for example, a court in the US awarded punitive damages of $ 1 billion in a case filed against a manufacturer of a kart, following the death of a 32-year old woman. In 1992, the go-kart had burst into flames while she was driving it. Since carelessness at these parks can cost lives, we need to have a comprehensive central law that would provide for stringent standards for maintenance and inspection of these parks and to impose penalties for violations. The Bureau of Indian Standards should be entrusted with the job of drawing up the standards immediately. The law should also provide for a safety advisory body to which parks should report details of every accident, however, minor. Users should also be encouraged to report safety violations and accidents. Since safety consciousness is very low in our country, these steps should be taken immediately and not after a major tragedy. Already at an amusement park in Bangalore, two deaths have been reported. In one case, a girl’s ‘dupatta’ apparently got caught in the wheels of a go-kart, strangulating her. In another, a boy drowned in the ‘water park.’ Proper safety measures could have prevented both accidents. Sometime ago a friend in Delhi talked about how a ride was started even before the safety restraint was put on her child’s seat. The attendant, who was supposed to ensure that, had completely overlooked the child. “If I hadn’t stopped the ride, the consequences could have been serious”, she said. Running an amusement park is no fun. It requires meticulous care, even careful study of the effect of the ‘rides’ on the riders. In Pennsylvania, two young girls sustained vaginal injuries while going down a 40-foot vertical drop water slide. In Texas, a roller coaster ride left a 16-year old, paralysed for life. In Ottawa, Canada, an alteration to the ‘rocket launcher’ using a nylon extension strap that did not meet the technical specifications led to the death of a 21-year old man. The supervision of these parks is as important as maintenance and inspection of gadgets. The staff should not only be trained to pay heed to safety, but to handle emergencies in case of accidents. In Texas, USA, one woman was killed and other injured recently, when a raft capsized as it dipped through an area of rapids, trapping the riders upside down in four feet deep waters. While others manager to remove the seat belts and escape from underneath the raft, one woman could not and died. Victims spoke of delay on the part of the staff in coming to their rescue. These amusement parks should also have adequate first-aid and emergency medical facilities. In the USA the rides are certainly far more daring, but their emergency medical facilities are excellent. How good are the provisions at amusement parks in India? It’s time consumers asked questions about these facts before buying the tickets. In the meanwhile, here
are a few safety tips for consumers: (a) Dress suitably
for the rides. Avoid saris, long, flowing skirts,
scarves, dupattas, children’s dresses that have
strings at the neck or the waist. (b) Instruct children
to keep hands, legs and arms inside the car. (c) Never
try to get off a ride before it comes to a complete halt.
(d) Always ensure that the attendant fastens properly,
seat belts, shoulder harness, lap bars or any other
safety device required. (e) Never force a reluctant child
to go on a ride. If your child panics mid-way though a
ride, instruct the operator to stop immediately. (f)
Never leave a child unattended and never violate safety
instructions. |
Profit of REC goes up 222 pc NEW DELHI, April 8 (TNS) — The government owned Rural Electrification Corporation (REC) would divert more funds for improving of quality of power supply in rural areas. Speaking to newsmen here today, Chairman and Managing Director of REC, Mr Divakar Dev said that the corporation has identified this as the thrust area and stepping it up further both in terms of funds and geographical coverage. The corporation would also focus more on factors which are seen to be causing delay in projects. Mr Dev said that a majority of projects get delayed due to time and cost overruns. The corporation has registered 222 per cent increase in profits during 1998-99 as compared to the previous year. Unaudited profits for 1998-99 stood at Rs 390 crore as compared to Rs 121 crore during 1997-98. Regarding defaulting states, Mr Dev said that REC has offered a package wherein the states could pay a part of the outstanding dues immediately and pay the rest in instalments. So far four (Haryana, Andhra Pradesh, UP and Orissa) have accepted the package enabling the resumption of REC credit flow to these states in a substantial way. Mr Dev said that the total outstandings of REC has gone down to Rs 1753 crore as of now from Rs 2604 crore in March 1998. Bhiwani Textile to expand CHENNAI, April 8 (PTI) — The Haryana-based Bhiwani Textile Mills is planning to expand its capacity from six lakh metres per annum to nine lakh metres through modernisation and expansion, now underway at a cost of Rs 35 crore. The plan was disclosed at a press conference here last night by the Executive President D.S. Agarwal, while launching a new product. The mill spent nearly Rs 1 crore on R & D of the new fabric, which, Mr Agarwal claimed, required no detergents while washing. Infosys results on Internet BANGALORE, April 8 (PTI) — Infosys Technologies Ltd today said that it would webcast live on the Internet a video presentation on the company’s performance for the year ended March 31, 1999. The performance of Infosys for fiscal 1999 will be presented by N.R. Narayana Murthy, Infosys Chairman and other senior officials on April 9 at 10.30 a.m., a company release said. The video presentation will be webcast live on www.itlinfosys.com and www.broadcast.com. Wipro to acquire Acer’s 45 pc equity BANGALORE, April 8 (PTI) — Wipro Limited will acquire Acer Computer International’s 45 per cent financial equity in the joint venture (JV) company, Wipro Acer Ltd, as the two companies today announced reorientation of their partnership in India. Top Wipro and Acer officials told a news conference here that Acer would open a full fledged national subsidiary office in India. However, Wipro would continue to distribute and service Acer systems, they said. Chief Executive of Wipro Acer, Suresh Vaswani, said Wipro Acer had targeted a turnover of Rs 280 crore in 1999-2000. “Both Wipro and Acer recognise that the computer industry needs continual improvement in operating efficiencies,” said Vice-Chairman of Wipro Ltd, Arun K. Thiagarajan. “This strategic step of removing the overhead of a legal jv entity will result in substantial cost benefits for our customers,” he added. Acer Computer International is part of the $ 6.5 billion Acer group, the world’s third largest PC manufacturer. Wipro Infotech is part of the Rs 1,830 crore (1997-98) Wipro Corporation operating in services, technology products and consumer products. BFL Software nets Rs 25 cr profit CALCUTTA, April 8 (UNI)
— BFL Software Limited has registered a net profit
of Rs 25.07 crore during the last financial year.
Official sources at registered office here said after a
board meeting at corporate office in Bangalore today
income from operations stood at Rs 98.64 crore and other
income at Rs 1.55 crore during the financial year ended
March 31, 1999. Total expenditure, including written off
infrastructural expenditure amounting Rs 1.04 crore,
stood at Rs 67.43 crore and after interest payment of Rs
69.98 crore, gross profit stood at Rs 32.06 crore, which
was 32 per cent of the total income, they said. The
provision on account of depreciation amounted to Rs 6.64
crore and that of taxation to Rs 0.46 crore during the
year leaving a net profit of Rs 25.07 crore, which was
25.02 per cent of the total income, they added.
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| Bank of Baroda AMRITSAR, April 8 (TNS) — The Bank of Baroda has taken a lead in the banking industry by opening Prime Minister Rozgar Yojna club here. Mr Harbhajan Singh, Project Manager, District Industries centre inaugurated the club. Johnson
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