‘Fund small, medium units’
NEW DELHI, June 30 — The President of PHDCCI, Mr Ashok Khanna today urged the Finance Minister to take immediate corrective measures and direct state financial institutions to release adequate funds for the restoration of health of small and medium enterprises in Northern India.

National Dairy to sell share to Tetra
NEW DELHI, June 30 — European Multinational Tetra Laval will soon have a second fully-owned company in India when it buys National Dairy Development Board’s share in Hindustan Packaging Limited.

Tisco to raise 250 crore through shares
CALCUTTA, June 30 — Tata Iron and Steel Company Limited is planning to raise Rs 250 crore by issuing preference shares to meet long term investments.

Banks record 16 per cent rise in deposits
CHANDIGARH, June 30 — The economy of India has shown signs of recovery during the first two months of 1999-2000 and the exports have started looking up with growth rate 10.07 per cent in March ‘99, thus pushing up the cumulative export growth figures for the fiscal to 3.70 per cent as against 2.6 per cent last year said Mr Rashid Jalani, CMD, Punjab National Bank, who presided over the 69th meeting of the SLBC, Haryana, convened by the PNB.

• Allahabad Bank net rises by 4.5 per cent

Fresh FDI proposals decline

CALCUTTA, June 30 (PTI) — With an alarming fall in fresh investment proposals for 1998-99, the third consecutive year witnessing a decline in gross and net fresh investments and the number of projects completed, the investment scenario in the country is depressing, a recent survey said.

The 18th quarterly investment survey, conducted by the Centre for Monitoring of Indian Economy, said the gross fresh investment proposals in 1998-99, which declined to 2,01,742 crore from Rs 2,33,631 crore in 1997-98, was accompanied by a 27 per cent fall in foreign direct investment (FDI) and a marked decrease in the inflow of FII and GDRs.

The consistent decline in net fresh investments from Rs 2,39,595 crore in 1995-96 to Rs 74,063 crore in 1998-99, was mainly attributed to the shelving of large projects.

Stating that there were “no signs of recovery” apparent from the current trend, it said the low investment flow had mostly affected the manufacturing sector.

The sector witnessed an “alarming” decline of Rs 32,625 crore in net fresh investments due to the “shelving of many large steel, petroleum refinery and cement projects,” it said.

Along with lower fresh investment proposals, projects worth Rs 45,478 crore were completed in 1998-99 declining steadily from the 1996-97 level of Rs 76,130 crore.

However, total outstanding investments as of April 1999 posted a marginal increase to Rs 12,81,273 crore against Rs 12,22,819 crore a year ago.

The investment blues were reflected in the FDI, FII and GDR inflow which together accounted for $ 1.9 billion during 1998-99, significantly lower than $ 5.4 billion in the previous year, the CMIE said.

The Rs 8,648 crore FDI inflow during 1998-99 was about 27 per cent lower as compared to the same period in 1997-98. The average monthly inflow during this period, Rs 721 crore, was far less than the monthly average of Rs 985 crore per month recorded during the previous year.

The lower FDI inflow was accompanied by a net FII outflow of $ 386 million in 1998-99 against a net inflow of $ 1650 million in 1997-98.

However, the net FII inflow has lately started picking up with an increase of $ 142 million in May, 1999, over the previous month, despite the political uncertainty prevailing in the country, the report said.

Maharashtra and Gujarat have been the biggest beneficiaries of the fresh investments during 1998-99.

Of the Rs 2,01,742 crore gross fresh investment proposals, these two states attracted nearly Rs 35,000 crore each. They were followed by Karnataka which attracted Rs 21,675 crore investment.

However, abandoning of 12 large projects worth Rs 21,300 crore saw the outstanding project investment in Karnataka declining, it said.

IGNOU to have Internet
Tribune News Service

NEW DELHI, June 30 — IGNOU has teamed up with Satyam Infoway Limited to provide internet access to its computing students for its project, Virtual Campus Initiative (VCI).

IGNOU will provide all its students, registering in the school of computer and information sciences, courseware on CD from the forthcoming semester which will also include software for Internet access. The Internet access enabled by Satyam Online, will help the students have online interaction with faculty members, peergroups and external experts.

According to Prof Abdul W. Khan, Vice Chancellor, “IGNOU has decided to take the lead in harnessing the internet for furthering its mandate of providing world class distant learning infrastructure in the country.”

‘Fund small, medium units’
Tribune News Service

NEW DELHI, June 30 — The President of PHDCCI, Mr Ashok Khanna today urged the Finance Minister to take immediate corrective measures and direct state financial institutions (FIs) to release adequate funds for the restoration of health of small and medium enterprises (SMEs) in Northern India.

At a meeting with Mr Yashwant Sinha, he said SMEs having contributed so significantly to the export kitty once, are languishing today because of many inhibitive factors including banks’and state FIs reservation in providing timely funds , shortage of power, basic raw material and problems arising out of excise duties.

Mr Khanna, who presented a detailed note to the Finance Minister in this regard, said most of the SME units located in the northern region employing a large workforce are grievously suffering today due to lack of adequate pro-active role of the Central and State Governments and financial and inout providing agencies.

A recent random survey conducted by the PHDCCI showed that as high as 12 per cent of SMEs in the region have either closed shop or are in the process of doing so due to lack of funds and basic inputs and other inhibitive factors.

The PHDCCI President also urged the Finance Minister that the Centre and State Governments of the northern region need to initiate a short and long term restoration package for the SMEs and ensure smooth funding by FIs.

The closure of such units, the survey revealed, has been hastened due to lackadaisical attitude of the governmental support. Mr Khanna said the situation, if not redressed immediately, will lead to considerable unemployment and socio-economic imbalance in the region.

PHDCCI will also organise a conference on problems being faced by SMEs in July here. It will be inaugurated by the Finance Minister.

National Dairy to sell share to Tetra
Tribune News Service

NEW DELHI, June 30 — European Multinational Tetra Laval will soon have a second fully-owned company in India when it buys National Dairy Development Board’s (NDDB) share in Hindustan Packaging Limited.

The Union Government has decided to allow the state-owned NDDB to sell its 80 per cent share holding in Hindustan Packaging Ltd to Swiss packaging giant Tetra Laval.

It may be recalled that the Industry Ministry has been encouraging multinationals to set up wholly-owned subsidiaries in industries where they already have joint ventures in India. There is no provision asking the multinationals to quit from their existing joint ventures before setting up new fully-owned or majority-owned companies.

The decision is seen as a betrayal of NDDB by the government which had earlier allowed Tetra to set up another wholly-owned subsidiary to make packaging material. Hindustan Packaging makes packages for popular cooking oils like “Dhara”.

After the government allowed Tetra to set up its fully-owned company, Tetra stopped taking interest in Hindustan Packaging and introduced new technology and new products in its new company. Relations between Tetra and NDDB had soured after Tetra refused to supply new technology to Hindustan Packaging unless it was given a majority ownership. NDDB owned 80 per cent and Tetra owned 20 per cent of Hindustan Packaging.

After the government allowed Tetra Laval to set up its fully-owned company, NDDB offered to buy Tetra’s 20 per cent ownership in Hindustan Packaging. NDDB had hoped to find another collaborator who could supply technology and upgrade Hindustan Packaging’s outdated plant. However, Tetra refused to sell its 20 per cent share in Hindustan Packaging.

Finally, NDDB had no choice except to sell its 80 per cent shares in Hindustan Packaging to Tetra Laval at a price of Rs 1,250 per share. If Tetra had sold its shares in Hindustan Packaging to NDDB after it set up its own fully-owned company, NDDB could have found other partners.

According to industry sources, this is a dangerous trend. If India allows multinationals to have their own way, every Indian joint venture partner will have to sell out to their multinational partner despite having a majority stake in the venture.

Tisco to raise 250 crore through shares

CALCUTTA, June 30 (UNI) — Tata Iron and Steel Company Limited (Tisco) is planning to raise Rs 250 crore by issuing preference shares to meet long term investments.

Senior Vice-President and Executive Director (Finance) said to enable the issue of the preference shares, the company plans to increase its authorised capital from Rs 440 crore to Rs 690 crore.

It has not yet been decided on when these shares will be issued and whether it will be bodies corporate, financial institutions, banks, foreign investors, mutual funds, trust or other entities.

Citing the reason for going for preference shares, Mr Hussain said it had become an attractive avenue of investment, offering good scope for the issuer to reduce the overall cost of funds without reducing the post-tax yield to the investors.

The company will issue 25 lakh cumulative redeemable preference shares of Rs 100 each which will confer on the holders. The right to a fixed preferential dividend from the date of allotment, at a rate to be fixed at the time of the issue.

Daewoo not to make Matiz engine in India

SEOUL, June 30 (PTI) — South-Korean auto major Daewoo Motor Corporation (DMC) will not start the production of engines and transmission equipment for its small car Matiz in India till the Indian subsidiary’s sales volume of Matiz crosses the one lakh per annum mark, a senior company official said here.

“Producing engines and transmission systems for Matiz in India will not be economically viable for the company as sales volume in the country are very low at present,” DMC Director (Planning and Coordination) Sang Do Lee said.

“We will continue to supply these parts from Korea till the volume reaches at least one lakh units annually,” he added.

The Indian arm of DMC, Daewoo Motors India Ltd (DMIL), has sold about 8,000 Matiz since its launch in November last.

Banks record 16 per cent rise in deposits
Tribune News Service

CHANDIGARH, June 30 — The economy of India has shown signs of recovery during the first two months of 1999-2000 and the exports have started looking up with growth rate 10.07 per cent in March ‘99, thus pushing up the cumulative export growth figures for the fiscal to 3.70 per cent as against 2.6 per cent last year said Mr Rashid Jalani, CMD, Punjab National Bank, who presided over the 69th meeting of the SLBC, Haryana, convened by the PNB.

Mr Jilani said as many as 569 foreign direct investment (FDI) and technical collaboration proposals have been received with an investment of Rs 2,195 crore. The total exports from Haryana have been steadily rising from Rs 1,796 crore in 1994-95 to Rs 2,961 crore in 1997-98.

The total deposits of the banks in the State has risen from Rs 12,318 crore as on March ‘98 to Rs 14,287 crore showing a growth of 16 per cent compared to 15 per cent during the same period last year. The advances have also increased from Rs 5,374 crore to Rs 6,136 crore during the review period, thereby showing a growth of 14.2 per cent as compared to 13.3 per cent last year.

Mr Jilani expressed satisfaction over the performance of banking sector in the State as well as achievement of Annual Credit Plan. The banks disbursed Rs 3,770.47 crore up to March, ‘99 against cumulative target of 3,777.11 crore.

Mr R.S. Verma, Chief Secretary, Government of Haryana in his address expressed happiness over the performance of banks particularly as far as growth in industrial sector and the weaker sector is concerned. Regarding poor recovery in government sponsored schemes, he expressed his concern and assured the bankers that all possible assistance would be provided by the State Government in recovery of the dues.

Prominent among those who attended the meeting were: Mrs Veena Eagleton, Financial Commissioner, Institutional Finance and Credit Control, Mrs Keshni Anand Arora, MD, HFC, Mr N.R. Kannan, CGM Nabard, Mr S.C. Vohra, GM, PSB, V.K. Aggarwal GM, PNB and Mr A.K. Bhargava, GM, PNB.

Allahabad Bank net rises by 4.5 per cent
Tribune News Service

CHANDIGARH, June 30 — The net profit of Allahabad Bank increased by 4.5 per cent to Rs 133 crore during 1998-99 as against Rs 129.21 crore in the previous year.

In view of the improved profitability, the Board of Directors have approved a dividend of Rs 27.14 crore to be paid to Government of India, Mr U.S. Ghose, General Manager of the bank said.

He informed that the bank has engaged a leading management consultant, Arthur Andersen and Associates, for organisation restructuring role-clarification at different tiers and reporting relationship.

During the year, the yield on investments of the bank has improved to 11.19 per cent as against 10.99 per cent last year while the average cost of deposits declined to 7.76 per cent from 7.95 per cent in 1997-98, he said.

Net non-performing assets were reduced by 2.55 per cent to 12.54 per cent in 1998-99 from 15.09 per cent in the previous year whereas the capital adequacy ratio was 10.38 per cent as against the norm of 8 per cent, he said.

Total deposits of the bank increased to Rs 15,510 crore from Rs 13,541 crore while advances grew by 18.8 per cent to Rs 7,321 crore from Rs 6,160 crore in 1997-98.

The productivity, measured by business (fortnightly average) per employee improved to Rs 90 lakh during 1998-99 from Rs 77 lakh during the preceding year.

During the year, the bank has increased nine branches and 12 extension counters, he said.

Forex
US $ Rs 43.36/37
Stg £ Rs 68.27/29
Euro Rs 44.77/79
Jap yen (100) Rs 35.86/88

NHPC donation
NEW DELHI, June 30 (PTI) — National Hydroelectric Power Corporation has contributed Rs 2.30 crore to the National Defence Fund. This includes Rs 2 crore by the Corporation and Rs 30 lakh from employees contribution.

Price index
SHIMLA, June 30 (PTI) — The consumer price index number for industrial workers base 1982-100 registered an increase of four points during the month of May 1999 and stood at 419, according to Labour Bureau sources.

Century Enka
MUMBAI, June 30 (UNI) — Crisil has assigned the PI+ rating to the Rs 15 crore commercial paper programme of Century Enka Limited. Meanwhile, Rs 124 crore non-convertible debenture issue of CEL has been upgraded to A+ from A-.