Proposal to provide relief for housing NEW DELHI, Jan 20 — With a view to keeping its promise to build two million houses a year, the Urban Affairs Department has submitted a list of proposals to the Finance Ministry for providing maximum relief for housing activities.

IMF now admits failure in Asia
WASHINGTON, Jan 20 — The recovery of the Asian economies from the financial crisis that ravaged the region may be delayed by the troubled Japanese economy as well as the dramatic drops in commodity prices, the International Monetary Fund has said in a report.

Japan gets tough on sanctions
TOKYO, Jan 20 — In an apparent stiffening of its position, Japan has sought to include ongoing projects in India in the ambit of economic sanctions and said further funding of these projects will be considered only “on a case-by-case basis”.

$ 400,000 aid from ADB
NEW DELHI, Jan 20 — Asian Development Bank has proposed a technical assistance of $ 400,000 for an Urban and Environmental Infrastructure Fund as a part of ADB’s Country Assistance Plan for India.

Grant for 2 Punjab towns
NEW DELHI, Jan 20 — The government will provide Rs 1 crore each to select cities for improving infrastructure as part of efforts to boost tourism industry in the country, Tourism Minister Madan Lal Khurana said here today.

Rs 25,000 cr tech fund established
NEW DELHI, Jan 20 — The government also decided to set up a Rs 25,000 crore technology upgradation fund from April 1 to modernise the weaving and processing sectors of the textile industry, besides jute, cotton ginning and pressing units.

Bonus issue for Infosys okayed
BANGALORE, Jan 20 — An extraordinary general meeting of software giant, Infosys Technologies Ltd here today approved a bonus issue in the ratio of 1:1 (one share for every one share held), and increase of authorised share capital from Rs 30 crore to Rs 50 crore.

Bakht: 10 PSUs to be wound up
CHENNAI, Jan 20 — The Centre has decided to wind up 10 ‘non-performing’ and ‘non-functioning’ public sector units in the country, the Union Industry Minister Sikander Bakht said today.

GDP growth likely to be below 5 pc

Astra Club launched

Cabinet clears corporatisation of airports
Japanese company to join Panipat power project
Tribune News Service

NEW DELHI, Jan 20 — The Cabinet Committee on Economic Affairs today approved the selection of Marubeni Corporation of Japan as a joint venture partner by Indian Oil Corporation for implementation of the proposed 301 mw power project at Panipat.

The Union Cabinet in a significant step approved the corporatisation of five international airports in the four metros and Bangalore. The upgradation of these airports is expected to cost around $ 4 billion.

The IOC power project based on heavy residue from its refinery at Panipat is expected to cost Rs 1600 crore. The equity pattern proposed for the joint venture project entails 26 per cent holding by IOC, 26 per cent by Marubeni and 48 per cent by financial institutions, associates and public.

The implementation of the project is expected to increase the profitability of IOC and mitigate the problem of power shortage in Haryana.

Addressing newspersons after the Cabinet meeting, the Civil Aviation Minister, Mr Ananth Kumar, said the aim behind corporatisation of major airports in the country was to bring them on a par with major international airports abroad.

The decision to corporatise the five airports was announced by the Prime Minister on October 24 at the annual meeting of the FICCI. The Government was examining the possibility of corporatising another eight airports in the country.

All major airports in the country are now run by the Airports Authority of India, which is an autonomous body created by an act of Parliament. With corporatisation, these five airports would become independent entities with specific focus on a particular airport.

The five airports account for 74 per cent of the country’s air traffic.

The AAI, which has under its control 120 airports, out of which 69 are functional and the rest are quasi-functional, would continue to be responsible for the air traffic management even after the corporatisation of the airports.

Mr Kumar said the AAI has already floated international tenders for appointing global consultants for beginning the financial and managerial structuring of the corporate entities and it has been specified that it would be mandatory to have an Indian consultant.

The Minister said the upgradation of facilities at the airports would also help generate more revenues as India was emerging as a major skyway for exporters in the region. Last year, air cargo accounted for 7,50,886 tonnes out of which 69 per cent was international cargo.

Mr Kumar said there was also a proposal to set up a regulatory authority for the sector.

The Cabinet also approved that “Fundamental Rules and other Rules and Regulations” may be amended to provide that a specialist in medical or scientific field who had attained the age of superannuation on or before May 1, 1998, and is on extension in service could be allowed to continue till he or she attains the age of 62. This would be on a selective basis.

The continuation of the scheme of Maulana Azad Education Foundation in the ninth Five year Plan, replacement of four NGO schemes by a revised umbrella scheme, and an outlay of Rs 261 crore for National Child Labour projects over the ninth Plan were among the approval given by the CCEA today.

The CCEA also approved the liberalisation of the technology import regime to facilitate inflow of appropriate technology with procedural simplifications and greater delegation of powers of approval.

Rs 165 cr loss at Nathpa project?
Tribune News Service

CHANDIGARH, Jan 20 — The Union Government and the Government of Himachal Pradesh will lose Rs 165 crore on the ambitious 1500 MW mega-project Nathpa Jhakri Power Corporation due to a sudden change in the cement configuration.

The move will increase the concreting costs by over 110 per cent due to the use of slag cement instead of free-of-cost flyash, claims Mr Vishwa Moham Bhatt, President, All India Association of Cement Users.

The increased funding requirements of the project are still awaiting approval from the World Bank and other international development institutions.

“The Government has been promoting the use of flyash by offering excise waivers. Flyash cement has been used extensively by NJPC in its civil works. Mega-Projects like the Bhakra and Hirakud stand testimony to its reliability and strength.

“We fail to understand why an untested product like slag cement is being used by NJPC at such inflated costs,” said Mr S.K. Gupta, a noted civil engineer.

The main beneficiary from this move will be a Delhi-based company. Slag cement is produced by only four cement manufacturers in the country, all situated in the Raipur cement belt. All plants are of mini-mill scale and locational distance of the project site is above 2000 km. This will make the project more vulnerable to further cost overruns, claims Mr Bhatt.

Govt to lower tax collection target
Tribune News Service

NEW DELHI, Jan 20 — The government is likely to set a lower tax collection target in the coming Union Budget.

Speaking at a meeting of tax experts organised by the (FICCI) here, the Revenue Secretary, Mr Javed Chowdhury said that “the buoyancy in revenue collections for the next year assumed in the Budget would have to be significantly lower than the assumption of a 20 per cent increase for the 1998-99 Budget.”

While indicating that the Budget would, “pleasantly surprise” the industrial community by offering much simpler excise tariff structure than what exists today, Mr Chowdhury said that .

He also indicated that customs duty in specific sectors could be increased to provide domestic industry. The pace of lowering of duties — even in excess of WTO requirement — should not create a situation where relatively efficient sectors of Indian economy are also endangered, he said.

For several items across many sectors, it has been observed that the export price is not even covering the normal international variable cost of production, it is felt that the government must address this situation.

Lock-in period for equity goes

NEW DELHI, Jan 20 (PTI) — The government today further relaxed rules for availing income tax concessions for venture capital funds by removing the minimum lock-in period and investment stipulations.

According to the relaxations, which would come into effect on April 1, 1999, the lock-in period of three years of equity shares before transfer has been done away with, an official release said here.

The stipulation of investment of 20 per cent, 50 per cent and 80 per cent over a period of three years by the venture capital company in a venture capital undertaking has also been dispensed with.

The scope of permissible activities for venture capital undertakings have also been expanded to include the business of developing, maintaining and operating any infrastructure facility.

At present income by way of dividends or long term capital gains of a venture capital fund or a venture capital company form investments made by way of equity shares in a venture capital undertaking is exempt from tax.

Proposal to provide relief for housing

NEW DELHI, Jan 20 (PTI) — With a view to keeping its promise to build two million houses a year, the Urban Affairs Department has submitted a list of proposals to the Finance Ministry for providing maximum relief for housing activities.

Minister of State for Urban Affairs Bandaru Dattatreya told a press conference that unless more concessions were given to the housing sector, it would be difficult to meet the target of constructing 20 lakh houses every year as mentioned in the national housing policy.

He suggested concessions to individuals to build houses and encouragement for rental houses to reduce strain on the housing sector and for setting up satellite townships to decongest big cities, besides extending various tax concessions.

The minister said a committee had been set up under chairmanship of the Additional Secretary in the Urban Affairs Ministry to frame guidelines for attracting private developers for building houses in 30 acres in the national Capital.

Answering a question related to the recent Ordinance repealing the Urban Land Ceiling Act, he said the Centre will issue recommendatory guidelines to States within a fortnight suggesting them to ensure that land, earlier tied up in the ceiling Act, was released to the market for the benefit of the poor.

IMF now admits failure in Asia

WASHINGTON, Jan 20 (PTI) — The recovery of the Asian economies from the financial crisis that ravaged the region may be delayed by the troubled Japanese economy as well as the dramatic drops in commodity prices, the International Monetary Fund (IMF) has said in a report.

The report released yesterday, named the “IMF-supported programmes in Indonesia, (South) Korea and Thailand: A preliminary assessment”, is the first attempt by the IMF to evaluate its role in the Asian economic crisis, official Japanese news agency Kyodo reported.

Government guarantees and faulty regulatory and supervisory systems created weak financial orders in South Korea, Indonesia and Thailand, which led to the deep recessions in Asia and slowed down growth around the world, the IMF said.

When the crisis first hit Thailand in 1997, IMF analysts had incorrectly assumed shock waves would be contained in that country itself. The IMF had to correct itself when investors began pulling out of neighbouring countries as well.

However, the report has defended IMF policies in reacting to the crisis, saying “the economic events during the crisis have defied expectations.” The IMF has put together multi-billion dollar rescue packages for the crisis-ridden economies.

Critics however say the IMF has imposed unnecessarily high interest rates on its borrowers, when it should be offering lower rates. This type of money tightening could severely depress economic activity, they add.

Japan gets tough on sanctions

TOKYO, Jan 20 (PTI) — In an apparent stiffening of its position, Japan has sought to include ongoing projects in India in the ambit of economic sanctions and said further funding of these projects will be considered only “on a case-by-case basis”.

Responding to the Indian plea to “positively consider” the financing needs of the ongoing projects during Foreign-Secretary level talks between the two countries here, a Japanese Foreign Ministry spokesman ruled out immediate easing of sanctions and said continuation of financial assistance as well as resumption of regular aid programme must not be taken for granted any more.

The aid to New Delhi would be considered “on a case by case basis,” he added briefing reporters on the outcome of Foreign Secretary K. Raghunath’s discussions with the Japanese side.

$ 400,000 aid from ADB
Tribune News Service

NEW DELHI, Jan 20 — Asian Development Bank has proposed a technical assistance of $ 400,000 for an Urban and Environmental Infrastructure Fund as a part of ADB’s Country Assistance Plan for India.

It is intended to outline programme for urban development and environmental improvement projects as well as policy reform supporting the private sector’s involvement in urban infrastructure development.

The Ministry of Urban Affairs and Employment has suggested modifications in the terms of reference of the technical assistance. These include a national-level fund to be administered through the Housing and Urban Development Corporation with a line of credit from ADB. An advisory committee is to be set up under the Secretary, Urban Affairs and Employment, with a view to steering urban sector reforms. Similar funds could be created in selected States which take up an urban reform agenda as a time-bound programme to promote commercialisation of urban infrastructure and development activities.

The Ministry of Urban Affairs has also recommended incorporation of the concept of Capital Fund at the municipal level to leverage funds for the State and national level funds.

Grant for 2 Punjab towns

NEW DELHI, Jan 20 (PTI) The government will provide Rs 1 crore each to select cities for improving infrastructure as part of efforts to boost tourism industry in the country, Tourism Minister Madan Lal Khurana said here today.

Fifty different cities will be selected initially for this grant which will have a matching contribution from the state governments, he said addressing a seminar on new tourism policy organised by FICCI.

“In the first year, Jammu, Anandpur Sahib, Agra, Amritsar and Kanyakumari will be among the 50 cities earmarked for this grant,” he said adding that several states including Kerala, Rajasthan and Uttar Pradesh have given their consent.

Tourism Finance Corporation of India (TFCI) Chairman P.V. Narasimham asked the government for a capital injection of Rs 100 crore by way of either quasi-equity or debt into the corporation for on lending to tourism sector.

Indian Association of Tour Operators (IATO) President and Stic Travels Managing Director Subhash Goyal stressed on the need to have a strong airline network for the development of tourism advocating entry of foreign airlines to India.

Message from Brazil: fixed rates fail
From Charlotte Denny in London

REPORTS that the Brazilian central bank will continue the real’s floatation for the time being came as no great surprise to the markets. After a humiliating about-turn last week, when the bank devalued the real an then gave up defending the currency’s peg against the US dollar, any attempt to fix a new rate would have been an invitation to speculators to attack. The bank has now declared it will intervene only to cushion abrupt moves.

Brazil is the latest in a succession of governments during the last 18 months’ turmoil who have sworn to defend their currencies only to be forced into a U-turn after pouring away foreign reserves in a fruitless defence of fixed rates.

The message seems clear: fixed exchange rates fail when macro-economic fundamentals are out of line.

But Brazil’s neighbours, many also linked to the US dollar, appear to have taken the contrary message to heart. Instead of looking at ways of floating currencies, some are investigating how to bind themselves even more closely to the mighty greenback.

Reports suggested that Argentina is considering abandoning its currency and adopting the dollar. The idea is not as dramatic as it sounds — Panama has been using the dollar as its currency since 1904. Argentina has already bound the peso’s value to the dollar through a currency board.

Under this arrangement the central bank must hold enough foreign money to buy the entire stock of the national currency at the fixed rate. That makes speculative attacks difficult, because the bank could always buy all the pesos on the market. The disadvantage is that the US Federal Reserve dictates Argentina’s interest rates.

In reality Argentina is proposing a one-sided currency union - without any representation on the central bank. The goal is to conquer inflation, even if the price is loss of economic sovereignty.

Commentators wondered if the timing of President Carlos Menem’s kite-flying was meant to underline the resolve not to be the next tumbling currency. — The Guardian

Rs 25,000 cr tech fund established

NEW DELHI, Jan 20 (PTI) — The government also decided to set up a Rs 25,000 crore technology upgradation fund (TUF) from April 1 to modernise the weaving and processing sectors of the textile industry, besides jute, cotton ginning and pressing units.

Textile Minister Kashiram Rana told a press conference that the five-year fund was being set up after the Cabinet Committee on Economic Affairs (CCEA) cleared it this morning.

Though spinning units in composite mills would be eligible to avail the fund, stand-alone units would not be eligible as they were covered under a Rs 750 crore modernisation fund during 1987-1991.

Under the scheme, the government would give an interest subsidy of 5per cent on loans availed from financial institutions.

Guidelines for the fund would be framed by an inter-ministerial steering panel, which would monitor it.

The government would soon come out with a special package for revival of the 117 sick national textile corporation (NTC) mills and the cotton technology mission, aimed at raising cotton productivity from the present 280 kg per hectare to at least the global average of 580 kg and improving quality.

The package would be approved by the Cabinet soon, he said.

Bonus issue for Infosys okayed

BANGALORE, Jan 20 (PTI) — An extraordinary general meeting of software giant, Infosys Technologies Ltd here today approved a bonus issue in the ratio of 1:1 (one share for every one share held), and increase of authorised share capital from Rs 30 crore to Rs 50 crore.

Responding to share-holders’ queries at the meeting, Infosys Chief Managing Director N.R. Narayana Murthy, said the company’s focus continued to be in the area of banking.

Infosys, he said, was proceeding according to plans and ‘Y2K’ business was decreasing and would gradually wind down.

The increased authorised share capital, Murthy said, would cover the company’s planned American depository receipts.

Murthy said the issue of buyback of shares was not a priority for the company, but added that Infosys would go for IT if it was with regard to productive investment, new markets, more profits and multiple revenue schemes.

Infosys was offering 26 scholarships for PhD in computer science and associated fields, he added.

Bakht: 10 PSUs to be wound up

CHENNAI, Jan 20 (PTI) — The Centre has decided to wind up 10 ‘non-performing’ and ‘non-functioning’ public sector units (PSUs) in the country, the Union Industry Minister Sikander Bakht said today.

Already a decision had been taken to disinvest in four PSUs and three more units would soon be added to the disinvestment list.

“We want to reduce the pressures on the governance as far as business activities are concerned”, he said.

Replying to a question, he said there would be no disinvestment in Maruti Udyog Limited.

GDP growth likely to be below 5 pc

MUMBAI, Jan 20 (PTI) — The slowdown in industrial activity has intensified and the GDP growth is likely to be below 5 per cent in 1998-99, according to ICICI securities and Finance Company Ltd (I-Sec).

The kharif crop was much below expectations and hopes of a minor growth in agricultural production rest on the winter rabi output, I-Sec said in its “macro economic update: October-December 1998”.

Industrial growth in the first seven months averaged 3.6 per cent compared to 6.2 per cent in the previous year.

Astra Club launched
Tribune News Service

NEW DELHI, Jan 20 — General Motors India today launched Astra Club, the sixth variant of Opel Astra in New Delhi.

The car, priced at Rs 8.75 lakh in Delhi, will be available across the country in two weeks time, the Vice-President, Marketing of GM India, Mr Rajeev Chaba, told mediapersons here.

Astra Club offers top-end features, including electric sun roof,special two-tone paints, leather seats, special alloy wheels, a CD changer with a six-speaker system, a chrome exhaust tip, special badging, wider tyres and specially designed sun screen.

Lupin Labs’ net grows 24 per cent
MUMBAI, Jan 20 (PTI) — Lupin Laboratories Ltd has posted a net profit of Rs 18.87 crore for the six months that ended December 31, 1998 — 24 per cent higher than the earnings in the previous corresponding period.

The total turnover recorded during the period amounted to Rs 368.70 crore as against Rs 318.33 crore last year.

Lupin Group Chairman Desh Bandhu Gupta attributed this growth to the increased sales in domestic formulations and active pharmaceutical ingredients (API) businesses.

While API sales increased by 19.3 per cent to Rs 176.38 crore as compared to Rs 147.90 crore last year, the domestic formulation sales went up by 16.7 per cent to Rs 177.33 crore as compared to Rs 151.93 crore last year.

Lupin has maintained its global leadership position in ethambutol with a market share of 70 per cent, exports and local sales grew by 44 per cent and 36 per cent, respectively.

The company also maintained its sales of ceftriaxone in the export market and doubled it in the domestic market, while sales of another API, cefotaxime, picked up in the last six months.

Vashisti Detergents net up
MUMBAI, Jan 20 (PTI) — Vashisti Detergents Ltd (VDL), a HLL Group company, has posted a net profit of Rs 1.16 crore for the third quarter of 1998-99, an increase of 61 per cent compared to the corresponding period of previous year. VDL said the higher profitability reflected the favourable impact of productivity improvement and cost control measures, which have helped it to achieve higher volumes. On a cumulative basis, the net profit for April-December 1998 has also shown significant increase at Rs 3.62 crore as compared to net profit of Rs 1.82 crore in the whole of 1997-98.

Indal net profit falls
CALCUTTA, Jan 20 (PTI) — Sales and operating revenue of Indal during the third quarter of the current fiscal declined to Rs 274.9 crore as against Rs 292.6 crore in the corresponding period last fiscal (a decline of Rs 17.7 crore). According to the company spokesperson, the Q3 results of Indal were adopted at a board meeting held here. The net profit of the company in 1998-99 Q3 was also down to Rs 9.8 crore from Rs 12.6 crore last year. Company’s exports were also down at Rs 47.6 crore in the third quarter as against Rs 55.7 crore in the corresponding period last year.

Adani Exports JV with Wilmar
NEW DELHI, Jan 20 (UNI) — Adani Exports Limited, the ‘superstar trading house’ with a turnover of Rs 2400 crore, has finalised a joint venture with the Singapore-based Wilmar Trading Pte Limited for trading and processing of edible oils in the country. The 50:50 joint venture with an equity capital of $6 million will tap the synergies of the two companies to explore opportunities in the trading and processing of edible oils and oil seeds. Wilmar Trading is engaged in trading and manufacturing of edible oil and oil seeds and have manufacturing facilities in Malaysia, Indonesia and China, according to a press release here.

Shaw Wallace performs well
NEW DELHI, Jan 20 (UNI) — Shaw Wallace and Company announced it is selling its consumer products division to Henkel for a consideration of Rs 51.05 crore as part of the liquor major’s plan to get out of the non-core areas. This was announced here in a statement after Shaw Wallace’s board meeting which finalised its accounts. Meanwhile, Shaw Wallace has substantially improved its financial performance in the second quarter ending December 1998 by reporting a net profit of Rs 91 lakh. The liquor major had reported a net loss of Rs 4 lakh in the corresponding quarter last year. In the six months ended December 1998, Shaw Wallace has reported a total net profit of Rs 100 lakh against a net loss of Rs 91 lakh in the corresponding period last year.

Mahindras
MUMBAI, Jan 20 (PTI) — A consortium of companies led by Mahindra Realty and infrastructure developers, today signed an agreement with New Tirupur Area Development Corporation Ltd (NTADCL) for setting up India’s first private integrated water and sewerage project. The consortium signed the agreement in Chennai today.

Tuffs Shoes
Tribune News Service
CHANDIGARH, Jan 20 — Tuffs shoes has launched a ’99 shoe collection with all new light cushioned design (LCD) technology, which acts as an impact absorber and a comfort device. The shoe ranges from Rs 1099 to Rs 1299.

IT seminar
Tribune News Service
CHANDIGARH, Jan 20 — A seminar , organised here today by Innovative Hi-tech Solutions Pvt Ltd in association with Lotus Corporation and presided over by Mr B.R. Bajaj, Director, Punjab Information Technology task force, highlighted how the government can leverage information technology for a more effective and responsive administration. The seminar also focussed on critical issues like improving the current services offered to the people of Punjab by the government. The seminar was attended by top government officials of Punjab and Haryana.

Commodities
From Our Correspondent
CHANDIGARH, Jan 20 — Wheat 645 to 650, dara 655, superior 665 to 670, maize 530 to 550, sarson 1800 to 2000, taramira 1750 to 1800, toria 1600 to 1700, rice basmati 2800 to 4500, parmal 850 to 1100, sella 850 to 1100, maida (per bag 90 kgs) 725, suji 725, atta 665 to 670, urd (per quintal) 1700 to 2000, urd dal 1700 to 2100, moong 2000 to 2300, moongdal 2000 to 2300, moongdhuli 2400 to 2700, masoor 1600 to 1800, malkamasoor 1600 to 1800, kablichanna 1900 to 2500, kalachanna 1200 to 1400, dalchanna 1250 to 1500, arhar 2100 to 2300, rajmashchitra 2200 to 3400. Sugar: M-grade 1510to 1540, S-grade 1410 to 1470.