Thursday, December 30, 1999
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B U S I N E S S | Thursday, December 30, 1999 |
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End competitive populism,
resolve Chief Secretaries
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Change needed for second
generation reforms Move to boost IT acquisition Daewoo to break even in 2001-02 Traders observe bandh in Delhi ICICI may invest in power projects Eicher ties up with overseas
companies SBP hi-tech branch |
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End competitive populism,
resolve Chief Secretaries NEW DELHI, Dec 29 — Chief Secretaries of North Indian States today resolved to shun competitive populism and enhance inter-State cooperation through frequent interactions for specific identified projects in power, roads and tourism. A resolution to this effect was adopted by the Chief Secretaries of Haryana, Himachal Pradesh, Jammu and Kashmir, Punjab, Madhya Pradesh, Uttar Pradesh and Delhi at a ‘Chief Secretaries’ Summit’ organised by PHDCCI here today. The resolution also underlined the need for right-sizing the Government in the context of increasing deficit on revenue account in the Centre and the States. Besides, power generation and distribution would be privatised in letter and spirit to augment resources and supply. A blue print would be prepared for transparent policies, a bankable power purchase agreement (PPA) and other related issues, the resolution said. Finance Secretary of Punjab, Mr Lakhan Pal said that for 64 items sales in Punjab has been higher than the rest of the States. Chief Secretary of Haryana, Mr R S Verma said that both the state governments and the Centre has to work in tandem for generating employment opportunities and revamping the consumer protection measures. Chief Secretary of Himachal Pradesh, Mr A K Goswami said that all the 266 commodities where uniformity on floor level have to be achieved in the case of sales tax, the State has already brought down rates on 161 items. For the remaining 55 items, the detailed discussions are being held and the rates would be brought down soon. President of PHDCCI, Mr Ashok Khanna referred to the need for effective and time bound implementation of the project and for bringing down the transaction cost, and time and cost over-runs. Mr Khanna called for evolving a pragmatic FDI policy which can accelerate the inflow of investment and at the same time provide a level playing field to the domestic players. He also referred to the need to amending out-dated laws for growth of business. The resolution adopted by the Chief Secretaries also identified small industries, tourism , agro-processing, IT and IT enabled activities, and promotion of trade as the focus areas for creating employment opportunities. There was also consensus
to bring about uniformity in the tax rates and procedures
to prepare the States for introduction of VAT and
eliminate competition based only on subsidies and
incentives. |
Change needed for second generation reforms NEW DELHI, Dec 29 (PTI) — Two architects of economic liberalisation have warned that second generation reforms will derail without a change in mindset of politicians and drastic labour, judicial and State-level reforms. “Before second generation reforms, we need second generation politicians... We have a problem of mindset which is of late 19th and early 20th century,’’ former Finance Minister P. Chidambaram has said. Agreeing with Chidambaram, Planning Commission Member Montek Singh Ahluwalia said first the priority should be to complete the first generation reforms and “time has come to put second generation reforms in clear time-table.’’ The two were participating in Karan Thapar’s ‘Talk Back’’ programme in Doordarshan to be telecast tomorrow. Chidambaram and Ahluwalia, who was Finance Secretary since the inception of reforms in 1991 till last year, spoke in detail on several critical issues including mounting fiscal deficit, disinvestment and population growth. Listing out three priority areas for second generation reforms, Ahluwalia said the first relate to taking reforms to State levels as excepting one or two States, none have moved forward. Secondly, labour market reforms were crucial as this is one area which had been put in the “back burner’’ so far, he said adding without “flexible labour laws’’, the country could not move onto 7-8 per cent growth. Above all, what was most crucial was the judicial reforms, Chidambaram said, adding “they were simply in a mess. We may get high marks for fairness and independence of judiciary which is by no means a small achievement, but when it comes to speedy justice, we get poor marks.” Elaborating, he said the most crucial area was governance and blamed the slow process of decision-making to “multiplicity of departments and players and very colonial and bureaucratic way” that had made decision-making a “painfully slow process”. Wondering why a new Information Technology Department had been created, Chidambaram said, “I think we need to abolish a number of departments straightaway”, so that levels of decision-making are at two or three levels. “We cannot centralise all decisions in the Prime Minister’s Office. We must give authority to others to take decisions,” he said. On mounting fiscal deficit (FD), both Chidambaram and Ahuluwalia said “it is very critical” and this could be best tackled by generating more wealth and revenue and drastic cut in subsidies, as there were limitations to cutting other expenditure. Despite successive governments making efforts to bring down the FD, Ahluwalia said, “we have not made much headway as we need to go beyond making statements.” Chidambaram said the Government should fix a time-table to implement the privatisation policies by 2005 which would be a “good time-frame for all that needs to be privatised”. He regretted that the Government did not have a clear-cut policy on disinvestment as it was speaking in three different voices. While on the one hand, the Government was talking about disinvestment and privatisation, on the other it was mulling revival of the sick and untenable NTC mills. Chidambaram said the governments which had moved forward to taking hard decisions in the liberalisation process had to pay for it by losing the general elections and there were only few politicians like Chandrababu Naidu in Andhra Pradesh and Digvijay Singh in Madhya Pradesh who had emerged successful due to market reforms policies. But on the other hand, the Congress and United Front Governments at the Centre had to face defeat for their reform policies, he said. On being asked by the questioner whether the Government had moved enough to disinvest majority equity in any enterprise, Ahluwalia observed that there could be various methods to disinvestment and that the Centre had already been talking about privatisation in the public sector. Ahluwalia expressed concern that the government’s movement in this regard was “far too slow’’, though it has planned strategic sales in three or four major public sector undertakings which would possibly happen. He said privatisation
would mean selling the majority shares for change in
management, while disinvestment would mean selling to
bring in private shareholders, individuals and
institutions to hold part equity and not changing
management. |
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NEW DELHI, Dec 29 (PTI) — The domestic infotech industry today said the Government decision to allow Indian companies to buy out foreign software companies through the automatic route would result in a spate of acquisitions in the coming years. “We welcome Government’s decision as it has long been pending now and relaxation in norms will herald a series of acquisitions by software companies next year”, Nasscom President Dewang Mehta told PTI. Mehta said the growth of Indian software companies should be organic as well as through acquisitions. The increase of cap to $ 100 million is a very positive step taken by the Government, as is the decision to offer one time blanket approval for those software companies which are yet to float ADR/GDR, he added. The Government yesterday allowed acquisition of foreign software companies by Indian companies through the automatic route as part of liberalisation of norms for overseas investments. However, the automatic facilities will be available to only those companies which have already made international offering of their shares by floating either American Depository Receipt (ADR) or Global Depository Receipts (GDR), up to $ 100 million. Commenting on the easing of acquisition norms, Mr Rajinder S. Pawar, Chairman of NIIT, said, “It is a welcome step on the part of the Government to allow acquisition through automatic route. It will further motivate the software companies in India”. Pawar said the decision reflected an attitude of openness towards the software companies and the increase of limit for automatic route from $ 25 million to $ 100 million was a good starting point. Mehta, however, hoped that the Government would now go a step further and increase the limit for automatic route to $ 500 million. Mr Arun Kumar, President
and Managing Director, Hughes Software, said the move
would enable the software companies in India to take
corporate decisions based on sound business principals. |
Daewoo to break even in 2001-02 NEW DELHI, Dec 29 (PTI) — Daewoo Motor India will break even in the fiscal 2001-02 as the demand for its products was picking up in both the domestic and global markets, Company Managing Director S.G. Awasthi told reporters here today. The company has bagged orders from Italy to export 2,500 Matiz cars and there was a backlog of 1,500 cars in the domestic market, Awasthi said, adding that with the growing sales, the company would start making profits from 2002 onwards. He said the first consignment of 500 Matiz cars would be sent to Italy early next year followed by 500 units every month. Daewoo would try to strike a balance between domestic supply and exports, he added. Awasthi said the company
had targeted to fully utilise the 72,000 units plant
capacity during the next fiscal out of which production
of small car Matiz would be in the range of 50,000-60,000
units. |
Traders
observe bandh in Delhi NEW DELHI, Dec 29 — Trading activity in the Capital were affected as major markets remained closed today to protest against the introduction of uniform sales tax rate policy. Traders claimed that a Rs 100 crore business loss would be incurred as a result of the strike. Nearly three lakh retail traders, belonging to more than 400 trade bodies of major wholesale and retail markets of Delhi resorted to the closure against the implementation of uniform sales tax from January, Confederation of All-India Traders, said in a release. “Traders fear that implementation of the scheme will ruin the old distributive character of Delhi,” the release said, adding that implementation of the new policy would cause a loss of 65 per cent in sales tax revenue. The traders’ body
demanded a simplification of the tax procedures, the
release added. |
ICICI may invest in power projects NEW DELHI, Dec 29 (PTI) — ICICI is keen on equity investment in new power projects, its Chief Executive K.V. Kamath said here today. “ICICI is talking to various private power companies to have equity stake in them and intends to have equity tie-ups in more power companies,” Kamath told reporters after signing a loan deal with NTPC. However he declined to give the details of the power companies with whom ICICI was talking for equity tie-up. “It is too early to give details,” Kamath said. He said power was one of
the key infrastructure sectors that was going to have
tremendous growth in the next 10 years. |
Eicher ties up with overseas companies NEW DELHI, Dec 29 (PTI) — Eicher Tractors has tied up with Ricardo of the UK, Valtra of Finland and an Austrian company Steyre to manufacture technologically advanced tractors in the 30-60 horse power (HP) range.The company is planning to launch a 35 HP tractor in March 2000, a 60 HP tractor in April-June and another 50 HP tractor soon after in technical collaboration with Valtra and Steyre, Eicher Managing Director R.C. Jain told PTI here today. Valtra and Ricardo will
provide technical support for upgrading tractor engines
while Steyre will give technology for manufacturing
advanced gear-boxes. |
SBP
hi-tech branch CHANDIGARH, Dec 29 — Mr M. Sitarama Murty, Chief General Manager, State Bank of Patiala today launched the computerised operation of its Sector 7 branch at Panchkula. Mr J.R. Devgan, Deputy General Manager, Haryana zone said that more branches in Haryana are being computerised in the near future. He said its advances to the priority sector were 66 per cents against 40 per cent national goal. Its overall achievement of annual action plan was 142 per cent which is the highest performance amongst the major banks functioning in Haryana. Mr Murty said the bank
will play an active role in the development of the State
of Haryana by opening more branches. He said the bank has
already issued more than 5,000 Kisan cards. |
Year will begin on a bright note WITH the shutters for the year having being pulled down by the FIIs it is the few remaining operators whose sporadic buying and selling bouts are swaying the market. Hence, a high level of volatility can be expected in the forthcoming truncated settlement during the course of which the millennium transition will take place. However, the undercurrent remains positive and barring antics by our political fraternity, it is widely expected that the ongoing boom at the Indian bourses will gain strength during the first quarter of the calendar year 2000. However, lest the euphoria takes over your senses, remember, historical evidence suggests most major stockmarket crashes have been preceded by senseless euphoria. Those who need to refresh their memories would do well to remember the euphoria created in the early nineties by the fraudulent scamsters, and more particularly the so called Big Bull and his cronies. After all, those who forget history are condemned to repeat its mistakes. As for the coming settlement, traders would do well to maintain a low profile as there will be sharp volatility on thin volumes, a scenario not exactly conducive for well timed trades. However, compulsive traders can consider taking up long positions at the ‘active’ counters of Hughes Software at Rs 3585 (square up at Rs 3,660) and BFL Software at Rs 1105 (square up at Rs 1170). Short positions, albeit very risky at this stage could be considered by compulsive traders at the counter of Reliance Petroleum at Rs 71 (cover up at Rs 61). There is no dark horse
bet this week although there are some good portfolio
picks for the taking. Take a closer look at Reckitt &
Coleman for starters. Finally, as the millennium draws to
a close spare a thought for our fellow Indians stranded
aboard the hijacked IA plane. Hopefully the new
millennium will begin on a bright note not just for the
Indian bourses, but more importantly for the great Indian
nation. |
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| Punjab mela LUDHIANA, Dec 29 (TNS) — A Punjab mela will be organised in Punjab pavilion at Pragati Maidan New Delhi from January 5 to February 6 in order to provide national and international exposure to the industrial products. Godrej Infoindia.net Micron |
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