|B U S I N E S S||
Thursday, February 25, 1999
Haryana outlay hiked by 28
Survey projects better
power subsidies to shoot up
panel rules out hike in dividend
outlay hiked by 28 per cent
NEW DELHI, Feb 24 The Annual Plan for the fiscal year 1999-2000 for Haryana a was today finalised at Rs 2300 crore,a 28 per cent hike over the latest estimates for the actual plan expenditure during the current financial year.
This was decided at a meeting between the Deputy Chairperson of the Planning Commission and the Chief Minister of Haryana, Mr Bansi Lal, here today.
Of this Rs 1019.93 crore will be the aggregate Central assistance under various heads.
Mr Pant complimented the state for realising the food grain production target during 1997-98, reforms in the power sector and performance in the education sector.
Mr Pant, however, drew attention of the state on the decrease in oilseed production and performance in fisheries subsector.Despite having extensive network of irrigation facilities the states average efficiency in irrigation system was not more than 35 per cent .
Mr Pant said that there was a definite need for improving the old irrigation systems. The state needs to devolve administrative and financial powers to the Panchayati Raj institutions to accelerate the pace of development process at the grassroots level.
While making sectoral allocations for different sectors, the highest priority has been given to the development of basic infrastructure of irrigation, power, road and road transport which comprises 64 per cent of the Plan outlay i.e. Rs 1,472 crore out of a total of Rs 2300 crore.
A sum of Rs 581 crore, which constitutes 25.3 per cent of the total outlay, has been provided for the expansion of irrigation facilities for agriculture sector and flood control in the State.
An amount of Rs 501 crore, which is 21.7 per cent of the Plan outlay, has been kept for the generation, transmission and distribution of power. It includes an externally aided project viz Haryana Power Restructuring Project with an outlay of Rs 150 crore.
The transport sector, which includes construction of roads and bridges and extension of transport services, has been allocated Rs 390 crore which is 17 per cent of the total outlay.
During 1999-2000, an outlay of Rs 1013.83 crore has been approved for externally aided projects which is 198 per cent higher than the revised outlay of Rs 511.97 crore during the plan period 1998-99.
The Basic Minimum Services
Programme, which includes improvement and extension of
basic services like primary education, primary health
care, safe drinking water supply, link roads and
nutrition, have been provided an amount of Rs 120 crore
during the Annual Plan 1999-2000.
NEW DELHI, Feb 24 (PTI) The Economic Survey today projected better production of foodgrains this year but warned against low growth rate achieved during the nineties for it was just equal to the annual population growth rate.
Growth in foodgrains output during the nineties at 1.7 per cent is a matter of grave concern since it is just equal to the annual population growth, the survey said adding that as compared to the decline in the growth rate by 3.5 per cent in the preceding year, that 1998-99 performance would only be a modest recovery.
The decline in foodgrains production in 1997-98 to 192.4 million tonnes from a peak production of 199.4 million tonnes in 1996-97 is likely to be offset, to some extent, by an output of 195.2 million tonnes expected in 1998-99.
Crop productivity levels need to be enhanced, particularly in Bihar, Orissa and eastern Uttar Pradesh.
The survey has projected 3.9 per cent annual growth rate in agriculture production during 1998-99 as compared to a 6 per cent decline the previous year.
The government would have to play a leading role in establishing appropriate infrastructure for storage and processing of agricultural products.
Overall prospects of achieving over 195 million tonnes foodgrains output for 1998-99 were bright mainly due to rabi crops sown in November-December 1998. Though rice and coarse cereal output for kharif 1998 were no better than they were in 1997.
Rabi foodgrains output is likely to be 96.5 million tonnes which is higher by 5.2 million tonnes as compared to rabi 1997-98 production level.
Kharif rice output in 1998 would be marginally lower than kharif 1997 output of 71.6 million tonnes because of excessive rain in late October which adversely affected the standing paddy crop in Punjab and Haryana.
Subsidy for urea in 1998-99 was estimated at Rs 6983 crore out of a total fertiliser subsidy of Rs 9983 crore. Recent urea price hike would bring down the total fertiliser subsidy bill to some extent.
Despite launching a seed multiplication programme, India currently imports nearly two million tonnes of edible oils and about a million tonnes of pulses to meet domestic demand.
Unless there is a major seed technology breakthrough resulting in higher productivity, dependence on imports is likely to increase. This is an area of serious concern, the survey said.
Bulk of the countrys agricultural exports conforms to traditional items despite diversification in products exported and spread of destinations.
NEW DELHI, Feb 24 (PTI) Government-sponsored employment generation and anti-poverty programmes, which have proliferated over the years, should be unified for better management, evaluation and monitoring, according to the Economic Survey.
Each scheme is well
intentioned but their multiplicity has led to needless
duplication, high overhead costs, confusion at field
levels and insufficient benefits to the people, it
said. The survey also asked the government to
reformulate anti-poverty strategy which is
fiscally sustainable and more finely targeted to those
who cannot benefit from opportunities offered by growth
and economic reforms.
NEW DELHI, Feb 24 (PTI) The Economic Survey today cautioned that hidden power subsidy for agriculture and domestic sector would shoot up to Rs 31,599 crore in the next financial year and state electricity boards (SEBs) would incur a whopping loss of over Rs 13,800 crore in 1998-99.
The introduction of the proposed national minimum agricultural tariff of 50 paise/kwh, even if implemented will leave uncovered a substantial portion of the subsidy provided to the sector, the survey said.
Restoration of financial health of SEBs and improvement in their operational performance remain a critical constraint in the future development of the power sector, it said adding that SEBs are required to achieve a rate of return of not less than 3 per cent of their fixed assets in service.
Managerial and financial inefficiencies in state sector utilities have adversely affected capacity addition and system improvement.
While SEBs do not have enough resources to finance future programmes, they are also unable to raise investible funds from alternative sources due to their poor financial and commercial performance.
Also, the inability of SEBs to pay their dues, in full, to central power utilities adversely affect the finances and investment plans to these CPSUs, the survey said.
The hidden subsidy for the agriculture sector and domestic sectors had increased from Rs 7,248 crore in 1991-92 to Rs 24,257 crore in 1997-98.
The SEBs have continued to suffer from high transmission and distribution losses which stood at 22.3 per cent in 1995-96 and increased to 23.4 per cent during 1996-97.
The losses are extremely high when compared with the international average of less than 10 per cent for the advanced countries of the world.
These transmission and distribution losses are due to the sparsely distributed loads over large rural areas, substantial energy sold at low voltage levels, inadequate investment in distribution systems, improper billing and high pilferage.
The total power generation during the April-November 1998 period was 290.4 billion KWH, higher than 273.6 billion KWH achieved during the same period last year.
Thermal power plants at
present account for 79.9 per cent of the total power
generation while hydro plants contribute 17.7 per cent
and the rest 2.4 per cent accrues from nuclear power
plants, it said.
NEW DELHI, Feb 24 The business community today said that the Economic Survey 1998-99 revealed mixed trends of the economy.
The President of the FICCI, Mr Sudhir Jalan said that encouraging features, such as, pick up in growth of agriculture sector, buoyancy in the domestic capital goods sector and improvement in the foreign exchange reserves is interspersed with negative macro indicators like decline in the rates of savings and investments, lacklustre performance of the infrastructure sector, major slowdown in the growth of industry, continued sluggishness in the capital market and steep decline in the growth of exports and foreign direct and portfolio investments.
Referring to the advance estimate of GDP growth of 5.8 per cent for the year 1998-99, Mr Jalan said that this slightly improved growth is based on the revised series of computation (1993-94) prices.
Even this rate of growth fell short significantly compared to the 6.5 per cent annual growth targeted for the Ninth Plan.
Mr Jalan said that the Economic Survey reflects the determination of the government to go ahead with the reform process . The emphasis on state level reforms is most important, he said.
The President of the PHDCCI, Mr Ashok Khanna said that the survey confirms the slump in industrial activity with a sharp fall in industrial growth at 3.7 per cent in 1999 compared to 6.9 per cent in the same months of 1998. However, the partial recovery in the capital goods segment is a source of encouragement , Mr Khanna added.
Mr Khanna said that a point of dichotomy that appears in the survey is the sharp increase in some agricultural commodities, which raised inflation rates during early part of the year. At the same time it also points out the high growth rate achieved by the agriculture sector at 5.3 per cent during 1998-99. This means that while supply increased, price has risen to, Mr Khanna said.
The President of the Assocham, Mr K.P. Singh said that the Economic Survey has laid out a virtual road map for a second wave of economic reforms.
On the basis of a general overview of the current economic scenario, the survey has identified radical reform measures in infrastructure, agriculture and factor markets, Mr Singh said.
The survey has, however,
refrained from pointing out some warning signals even
though these are apparent. It has pointed out that
monetary growth at 19.8 per cent exceeded the
corresponding figures in the previous year nearly three
NEW DELHI, Feb 24 (PTI) The Railway Convention Committee today overruled the Finance Ministrys proposal to hike the Indian Railways dividend payment to 7.5 per cent for 1998-99 and recommended retaining it at the earlier 7 per cent.
The committee has thus rejected a proposal of the Finance Ministry for increasing the dividend to 7.5 per cent on the entire capital invested on the Railways from the general revenues, irrespective of the year of investment.
The Finance Ministry had proposed that dividend paid by the Railways needs to be increased and for the year 1998-99, the Railways should pay dividend at the rate of 7.5 per cent on capital-at-charge irrespective of the year of investment.
In its second report
presented to both the Houses, the parliamentary committee
headed by Basudeb Acharia, has also recommended that all
other concessions now available on residential buildings,
new line subsidies etc to the Railways from the general
revenues should be allowed to continue on the existing
basis for the current fiscal.
signs up Kapil Dev
NEW DELHI, Feb 24 Samsung India has signed a two-year contract with Kapil Dev for all its advertising pertaining to the World Cup. The company is preparing a campaign for World Cup using Kapil Dev in its print campaign as well as films.
Samsung India has also
signed up with ESPN & Star Sport as exclusive sponsor
in Consumer Electronics for World Cup Cricket Media
Sponsorship. The company will also sponsor cricket
specials in programmes like World Cup
Flashback and Inside Cricket on ESPN
& Star Sports. The total World Cup promotional
campaign is estimated to cost the company $ 5 million.
of the small sector-II
SAS NAGAR: Industrial unit owners here say the SSI sector will have to take the lead as Punjab is land-locked, far away from ports and its financial health does not permit big investments in infrastructure.
Mr R.S. Sachdeva, President of the Mohali Industries Association and Mr Jagjit Singh General Secretary of the MIA, say there are major impediments to rapid industrial growth.
The SSI sector is imprisoned in avoidable bureaucratic hurdles. More than 70 per cent of the working hours of an entrepreneur are wasted in wading through clerical formalities under a host of laws, including those relating to central excise, sales tax, the ESI, the Bonus Act, the Factories Act, octroi, income tax and banks. There is need cut down such fomalities.
There are also imbalances in the taxation policies, they say. The rationalisation of sales tax rules should be done. Besides, the ground work for the introduction of VAT should be initiated for converting smaller assesses into licensees.
They say the octroi collection system and truck operators unions are also adversely affecting business. It is necessary to adopt a progressive method of collection of octroi by introducing entry tax. Truck operators unions should be abolished or regulated.
Banks too are not extending the desired to the SSI sector. The Punjab Financial Corporation needs drastic restructuring. It should collect deposits as a bank with the sole objective of providing low-cost funding to the SSI sector.
JALANDHAR: Recession is adversely affecting the second largest industrial city of Punjab. Leather goods, sports and hand tools units here earn large amounts of foreign exchange for the country.
Mr Atamjit Singh Bawa, Joint Managing Director of a leather goods company, argues that this time recession has hit the industry for a longer period, which is not common. The main factors are: tight spending power of the consumer and over production/supply of products. New products have entered the Indian market through multinationals. Indian industry is not yet able to compete with multinationals because of restricted trade policy for the past 50 years.
Mr Gautam Kapoor of Black Jack India feels that the government and industry should work together to come out of this situation. Bureaucrats must have a business-like attitude towards business and businessmen.
By reducing income tax the Central Government has started collecting more tax from people. Similarly sales tax should be brought down to an affordable level.
The interest rates for the domestic industries should be brought down on a par with international rates so that domestic industries become more competitive in selling their products.
Customs authorities at various ports need a shaking-up as they need to be liberal in their approach and not create hassles for honest importers or exporters.
He suggests the state government should create more focal points, advertise them and allot them at market rates.
The sports industry here wants rationalisation on taxes. The President of the Sports Forum, Mr Ravinder Dhir, argues that even though the Ministry of Human Resources and Development has agreed in principle to declare sports goods as educational items but due to the apathy of the bureaucracy and frequent change of government at the Centre, it has not been implemented. The sports industry is on the verge of collapse due to a disparity in the taxation system and unavailability of raw materials like willow wood and cane.
The President of the Jalandhar Chamber of Commerce and Industry, Mr Avnesh Arora, argues that a professional approach and rationalisation of taxes can only revamp the industry.
PATIALA: This princely city is not likely to come on the industrial map of the state for quite some time and its traditional cutting tool industry is grappling with recession.
The industrial initiative taken by the setting up of a thriving cutting tool industry could not be maintained, by more inputs into the area from the state government, says Patiala Chamber of Industries President N.S. Khurana.
He says while severe competition, non-supply of scrap material from abroad and slump in large projects for which the cutting tools were used have caused recession in the industry. There is not much hope for the city as it is not linked with the main railway line and there is no big industry which can support ancillary units.
In the past four years only about 50 units have come up on 600 plots available in the Industrial Estate. Most of these units were shifted here, he adds.
Industrialist D. C. Sharma says Patiala should be declared an industrially backward district so that more people could invest here. However, this would only succeed if the government reviews its policies and makes subsidy available to the small sector quickly. Right now it takes four to five years to get subsidy by which time small industries become unprofitable. The government should involve the small scale sector more while giving rate contracts for government agencies.
The steel industry of Gobindgarh faces an acute crisis due to the new excise policy of the state government. Mr Ved Prakash Gupta, a businessman, says mills are closing down or reducing their capacities as the government has started charging excise duty on the capacity of the rolling mills. Besides, the steel industry has to compete after getting coal and iron ore from Bihar. With mills being set up near the source of raw materials in Bihar, this is becoming increasingly difficult.
The millers demand that
the Railway Ministry should review rail tariff on steel,
besides bringing the tariff of raw materials being
transported by the Punjab industry from far off places to
a reasonable limit.
CHANDIGARH, Feb 24 A delegation of the Federation of Small Scale Industries led by Mr M.R. Mittal, Chairman, met the Secretary Industries, Mrs Anuradha Gupta, here yesterday and told her that since there is no industrial policy in Chandigarh, industrialists are confused about the rules and regulations prevailing in the city. It demanded that possession of 1981 units should be given at the earliest to ease out pressure on existing plots and to curb misuse to open government land.
Ownership rights to CITCO shed holders were to be given to allottees after 15 years of allotment as per the terms of allotment but in some cases more than 18 years have passed, but ownership rights have not been given. As a result people are unable to mortgage their property and raise bank loans. Non-participation of officers in single window committee meetings came up for discussion at the meeting.
It was requested to remove
the contractor clause in Chandigarh Administration
purchases for small scale industry to encourage healthy
competition and eliminate middle men. The Secretary
promised to take time-bound decisions on demands. She
said that soon she would hold a meeting of the Industrial
Advisory Committee where all the points would be
discussed in detail.
MUMBAI, Feb 24 (PTI) The following were interbank forex and RBI rates (in rupees per unit)
US $ Rs 42.55/57
Stg £ Rs 68.10/12
Euro Rs 46.79/82
Jan Yen (per 100) Rs 35.06/09
The RBI reference rate was Rs 42.49.
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