Saturday, February 27, 1999
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B U S I N E S S | Saturday, February 27, 1999 |
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Great expectations from Budget
’99 CHANDIGARH, Feb 26 — What are industry’s main expectations from the BJP Budget? The PHD Chamber of Commerce and Industry has pinned high hopes on Yashwant Sinha. Maruti to launch four new models |
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Hassles: octroi &
‘Inspector raj’ Where’s
uniform sales tax policy? |
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Management
programme concludes ‘Monitor
guest houses’ Cautious
offloading on Budget eve Indian
Shaving Products net up |
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Great expectations from Budget
’99 CHANDIGARH, Feb 26 — What are industry’s main expectations from the BJP Budget? The PHD Chamber of Commerce and Industry has pinned high hopes on Yashwant Sinha. It expects that in view of ongoing economic slump, the Budget will infuse dynamism in the economy and restore investor confidence. Industry expects the Budget to go beyond stating the income and expenditure of the nation, and spell out the future course of reforms. What should the government do in the Budget to arrest industrial slowdown and reverse the slackness in demand? Some of the measures that industry expects are: *A workable charter of action in respect of pending Bills in Parliament and other legislative imperatives. *Tariff reforms must continue. Adjust tariffs and excise duties in the inverted duty structure wherever existing to encourage value addition. * Eliminate wasteful non-merit subsidies. * Make the entire gamut of economic legislation simple, pragmatic and relevant to changed economic conditions. * Improve credit availability for core and infrastructure sectors. * Greater government investment needed in areas such as agriculture and infrastructure. * To boost the small scale sector, set up a Technology Development Fund and an effective sub-contracting exchange. * Set up task forces to modify investment rules in infrastructure. * Review patent laws and institute modified patents regime urgently. * Review economic legislation and pass pending Bills as a confidence restoring measure. * The increasing trend in government’s revenue expenditure and the slow down of capital expenditure needs to be reversed. Cut the size of the government. * Provide impetus to the subdued stock market. * Anti-dumping mechanism needs to be strengthened and the procedures for investigations need to be quickened. * A tax reforms committee should be established to review the various taxes at the State level. * Foreign equity in the insurance sector should be permitted. On the expenditure front, the situation demands higher public investment in infrastructure and construction. However, this too may be difficult proposition. Prune
non-plan-developmental expenditure wherever possible. |
Maruti to launch four new models NEW DELHI, Feb 26 (UNI) — Maruti Udyog Limited (MUL) is readying four new models for the Indian market, including a small car, which will be rolled out by 2000-end. Company sources told UNI that MUL would be addressing new market segments with the new passenger cars. “The first new car would hit the city streets before 2000-end, followed by one new model every six months.” The models are at present on the design boards. Besides a new small car, the company would also be foraying into the top-end luxury segment. “It is extremely tough meeting the Maruti 800 base-price. Even the small car would be priced over Maruti 800,” the sources added. The final price tags of all the four vehicles are being worked out. The new models would be positioned between the existing market segments. “We are positioning one car between 800 and Zen, another between Zen and Esteem and so on.” However, MUL will not be addressing the multi-utility segment. Despite repeated attempts, the management refused to comment. Prior to the launch of the new cars, MUL will launch the engine upgrades of all its existing models in April 2000. The upgrades will be fitted with direct fuel injections to meet the year 2000 emission norms. MUL has already appointed Denso Corporation of Japan to provide the crucial fuel injection systems, company sources said. The automobile giant is spending close to Rs 300 crore for the purpose. The MUL board has already approved the proposal for the introduction of new models but the final roll-out schedule is yet to be decided. “The small car supplement will be in the 900cc to 1000cc category but sleeker and much better looking,” the sources said. Maruti has, till December 31 last year, doubled the interest payment on bookings to 20 per cent per annum. Besides, cash sops are being offered to dealers to prop up sales. The efforts seem to have paid off as sales of its passenger cars shot up by 45 per cent in January 1999 to touch 24,379 units from 16,817 units in the previous month. The growth was
significant, especially in the Maruti 800 and Zen
segments, with the two categories witnessing a 56 per
cent and 72 per cent surge respectively over the previous
month. |
Hassles: octroi &
‘Inspector raj’ LUDHIANA, Feb 26 — Punjab’s recession hit industry is facing a serious situation created by various alleged acts of omission and commission by the State Government. The role of the small sector in the development of the State and its economy hardly be underestimated. There are as many as 1.93 lakh small scale units with a fixed capital investment of Rs 2,505 crore. They produce goods worth Rs 10,500 crore every year and provide employment to about 8.18 lakh persons. However, the government appears to have done precious little to help the industry grow. If anything, obstacles have been raised every step of the way which hamper its growth, complain the sources in the industry. During the elections, the ruling Akali-BJP combine made a series of promises. But as soon as it came to power, it changed its tune, complains Mr Harish Khanna, President of the Ludhiana Small Scale Manufacturers Association. It had promised to abolish octroi, instead, the octroi rates have recently been revised upwards substantially. It was also promised that “Inspector raj” would be ended. Instead, Inspectors have tightened their noose around the neck of the small sector units in this industrial capital of Punjab, complains Mr Khanna. Today, as many as 26 Inspectors of different departments keep watch on the units. The figure does not include flying squads sought to be created by the Labour Department. “Flying squads and enforcement wings attached to the State Electricity Board, pollution control board, sales tax department etc are also a source of undue harassment and imposition of huge penalties on them,” he says. The Punjab Government
declared 1998 as the “year of the industry,”
but in practical terms, it did nothing to promote
industry. “I want to challenge the government to
spell out any policy decision or programme initiated in
1998 which might have benefited trade and industry in the
state,” says Mr Khanna. Despite the levy of
additional taxes, coffers of the State Government are
empty today, populist measures had played havoc with the
finances of the state. Supply of free electricity and
water to the agriculture sector alone drains out Rs 1,300
crore from the treasuries of Punjab every year. Such
policies may help the political parties to consolidate
their vote banks but they break the backbone of the
State’s economy, says Mr Khanna. |
Where’s uniform sales tax policy? FARIDABAD: The Faridabad-Ballabgarh complex which occupies the ninth position on the industrial map of the country is facing a crisis due to recession and lack of infra-structural facilities. Neither the expansion of capacity of the existing units has taken place nor new ones have come up during the past several years. More than 100 units including those of tools, electronics, electrical products, textiles, dyeing and printing have closed down making 10,000 workers jobless. According to a spokesman of the Faridabad Industries Association, the growth took place only up to 1972. Since then none of the industrial units have diversified or expanded their capacity. A new trend particularly on the Delhi-Mathura national highway has started. A large number of units have started selling land making way for setting up of hotels, restaurants and entertainment centres. Faridabad has become a “milching cow” for the government. Although Rs 440 crore is collected from Faridabad as sales tax and Rs 480 crore as Central Excise little comes back for its development. Even the share of the Faridabad Municipal Corporation which is in the midst of a financial crisis on account of sale of liquor is not being given. It is alleged that the government is not coming to provide special grant to Faridabad as its Municipal Corporation is controlled by the opposition party. Mr Hardip Mahajan, Chairman of the Faridabad Chamber of Commerce and Industry, said the bad shape of roads resulted in damage to transport vehicles, obstruction in movement leading to loss of the working hours. Although Haryana has agreed to levy uniform sales tax with Delhi, U.P. and Himachal Pradesh, it has not been implemented in the State. As a result the Haryana industry is in a disadvantageous position while competing with U.P. and Delhi. The autoparts industry in
Faridabad is also in trouble due to lack of demand from
Telco and Ashok Leyland whose production has nosedived
due to recession. |
Tips from students CHANDIGARH, Feb 26 — Students of the University Business School, Panjab University, today organised a seminar on “The expectations of business from Union Budget 1999-2000”. Dr Manoj K. Sharma, Reader, emphasised that no doubt yesterday Sinha’s hands are tied by his political allies, should see that economics prevails over politics. Saurabh Sehgal proposed that further rationalisation of excise duties is necessary, while on some non-essential items import duty should be increased. Dinesh drew attention to the growing problem of public debt, especially the commercial borrowings. Preeti Sharma suggested further widening of the tax base with tight administrative machinery. She advocated internal borrowing to avoid debt trap. Gaurav Sharma raised a concern for rising interest payment which are eating substantial part of resources. Divya Malhotra and Akash Jain raised the issue of deficit financing and expected that Finance Ministers should use deficit financing as a tool to finance developmental activities. This will help the corporate sector. Anmol Grewal said efforts be made to declare agriculture as industry. Anjali Kaushal stressed the importance of development expenditure to improve the business environment in India. Jagandeep said the Finance Minister cannot reduce subsidies by one stroke. Richa Chopra stressed the need for reforms in agriculture sector along with consolidation of industrial and monetary sector reforms. Amit Kaushik and Vishal Shukla stressed the importance of public enterprises and wanted some steps to give more autonomy to P.S.Us. Virender Singh wanted more outlay for the social sector. He suggested that the corporate sector be given concessions in case they undertake some social activities. Preet Aman warned the country may land in a South East Asia type crisis if measures are not taken to control the short-term loans. Prof R.P. Gupta, Chairman,
stressed the need for incentives for small scale
industries and export-oriented units. |
Management programme concludes CHANDIGARH, Feb 26 — A teacher must bringout best out of students, said Mr N.S. Rattan, IAS, Secretary Technical Education, Govt of Punjab while speaking at the valedictory session of a two-day management faculty development programme organised by the Centre for Management Training and Research (CMTR) at S.A.S. Nagar today. Two-day training programme was focused on the teaching technology of management education. Twelve participants from institution affiliated to Punjab Technical University were exposed to various techniques such as the case study method, role playing, business games and experiential learning used in imparting management education. Mr P.K. Verma, Executive
Director, Punjab Tractors Ltd., advised the business
schools to come closer to the reality by increasing
interaction with the industry. Dr S.P. Singh former
Chairman of University Business School, also addressed
the participants. |
‘Monitor guest houses’ CHANDIGARH, Feb 26 — A general body meeting of the Hotel & Restaurant Association of Chandigarh here today expressed concern at the high cost of running hotels and restaurants, lower room occupancy and obsolete (1954) bye-laws. Upcoming units are on the verge of closure. Due to an up-swing in the cost of food, vegetables, fruits, milk etc and return being comparatively low, hospitality industry is passing through a recessionary phase. The meeting wanted that
the mushroom growth of guest houses needs to be
monitored. The association urged the Chandigarh
Administration to expand the terms of reference of the
committee looking into various aspects of the industry. |
Sensex sheds 47 points MUMBAI, Feb 26 (PTI) — Equities drifted further downwards pushing the sensex by over 47 points on the stock market today following sustained selling pressure from operators and lack of support from institutional investors. Foreign institutional investors (FIIs) and Indian financial institutions participated by doing negligible deals ahead of presentation of Budget proposals. Operators continued to adopt a cautious approach as analysts ruled out bearish trend in the post-Budget sessions. Steady at the outset, prices gradually moved downwards when operators preferred to square up positions by selling stocks wherever they were long after the midsession. The BSE sensitive index opened fractionally up at 3284.21 but later generally moved downwards to the day’s low of 3228.94 before closing at 3233.86 as against yesterday’s close of 3281.29, netting a loss of 47.43 points. The BSE-100 index dropped by 19.50 points to 1435.09 from previous close of 1454.59. The cautious approach by FIIs and domestic institutions forced operators to wind up their positions and the market could improve if the Budget contained any sops to the industry, marketmen said. The BSE has kept a special session tomorrow from 10.25 a.m. to 4.00 p.m. on the occasion of the Budget presentation. While shares of multinational, pharmaceuticals and fast moving consumer goods (FMCGs) companies suffered a sharp setback, software scrips made a headway on select buying support from institutions. The BSE-200 index slipped by 4.41 points to close at 332.36 and the Dollex by 1.73 points to 130.23 from their previous close of 336.77 and 131.96 respectively. The total volume of business was better at Rs 1216.20 crore compared to yesterday’s turnover of Rs 1047.84 crore. Among the top traded scrips, Pentafour Software again took the first place with a turnover of Rs 172.73 crore followed by ITC Rs 107.71 crore, Satyam Computer Rs 97.23 crore, RIL Rs 91.87 crore and Zee Telefilms Rs 68.42 crore. Pentafour Software
declined by 11.50 to 803.50 and ITC by 24.25 to 775.
Satyam Computer, however, firmed up by 14.75 to 920, RIL
by 0.20 to 139.40 and Zee Telefilms by 24.75 to 662.25. |
Indian Shaving Products net up NEW DELHI, Feb 26 (PTI) — Indian Shaving Products Ltd (ISPL), a subsidiary of Gillette U.S.A, has reported a growth of 89 per cent in net profit at Rs 13.10 crore for the financial year ended December 1998 (nine months) compared to Rs 6.94 crore in the corresponding period last year. For 12 months ended March 1998, ISPL has reported net profits of Rs 11.51 crore. While total income was up by 25 per cent at Rs 162.19 crore during the period compared to Rs 121.72 crore in the previous fiscal, for the fiscal 1997-98, ISPL income was Rs 166.63 crore, a company statement said today. ISPL has changed its accounting period from April-March to January-December. The Board of Directors have recommended a dividend of 22 per cent for nine-month period, which works out to 29 per cent on an annualised basis. ISPL’s good performance in 1998 was accompanied by roll out of Gillette series in India which include wet shaving category, Gillette Sensor which grew by 43 per cent. “ISPL product
portfolio underwent a dramatic expansion with the launch
of Gillette series and the entry of the company in male
toiletries” it said. |
Duty evasion by Ludhiana companies NEW DELHI, Feb 26 (PTI) — Customs sleuths have detected duty evasion amounting to Rs 97.45 lakh by two Ludhiana-based companies on import of acrylic staple fibre. The firms had filed a total of seven bills of entry for the clearance of acrylic staple fibre misdeclaring the country of origin as Taiwan whereas it had originated from Thailand, Commissioner of Customs Vijay Zutshi said here today. Import of acrylic staple fibre originating from the USA, Thailand and South Korea attracts anti-dumping duty which is levied whenever it is noted that a particular commodity from any country is being exported to India below its normal value which could affect the local industries manufacturing that item. Zutshi said the importer
had admitted to evasion of customs duty and voluntarily
deposited Rs 97.45 lakh. |
No workman sacked: OCM CHANDIGARH, Feb 26 — The OCM Woollen Mills management has described as baseless the charge of Mr Stayapal Dang that 2,000 workers have been dismissed. The management has charge-sheeted in total 25 workmen, who had taken the law into their hands and were harassing the mills staff and workers with the help of comrades and others. Even these 25 workmen have not been dismissed so far and have only been charge-sheeted pending a fair and judicious enquiry based on which action will be taken against them. The families of the
workmen staying in the mill for fear of goonda elements
visit their bread-winners. There is no pressure on the
workers to stay in the mills. |
ACC files papers MUMBAI, Feb 26 (PTI) — The Associated Cement Companies Ltd (ACC) has filed documents with SEBI for its rights issue of equity to mobilise over Rs 187 crore. The rights issue would be at a price of Rs 55 per Rs 10 share. ACC closed at Rs 1,113 per Rs 100 share at the BSE yesterday, which works out to Rs 111.30 per Rs 10 share. The rights issue was cleared by ACC shareholders earlier this year, but financial institutions had blocked the company’s proposed preferential allotment to Tata Sons Ltd, the promoters. The shareholders had also approved splitting of Rs 100 shares into Rs 10 shares. ACC has drawn up a
resources mobilisation programme for the purpose of
expansion including through acquisitions. |
Bata declares lockout FARIDABAD, Feb 26 —
The management of Bata India yesterday declared lockout
in their Faridabad factory. The action follows one-day
strike observed by the employees on Wednesday. It is
learnt that there is a dispute between the workers and
management over production target after installation of a
new machine. The factory has a strength of 950 workers. |
| Briefs |
Cadbury India net
rises Crisil lowers
Vardhman rating Navneet
Publications net up 38 pc Glaxo, Burroughs
to pay 50 pc |
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Gold
rises Price index |
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