Wednesday, March 17, 1999
today's calendar
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B U S I N E S S | Wednesday, March 17, 1999 |
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spotlight today's calendar |
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Panel approves modified IRA
Bill
Envoy
suggests corridor to Asia |
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PPGM
may merge with Crompton |
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Panel approves modified IRA Bill NEW DELHI, March 16 (PTI) — The Standing Committee on Finance today approved a modified Insurance Regulatory Authority Bill with dilution of foreign equity stake to 26 per cent as against 40 per cent originally recommended by the government. In its report tabled in Parliament today, the committee’s Chairman Murli Deora said it was against allowing an additional 14 per cent stake to non-resident Indians, overseas corporate bodies and foreign institutional investors as provided in the original Bill due to fear of “backdoor entry” of foreign companies in the domestic insurance sector. The report contained four notes of dissent cautioning the government against allowing foreign entry while opening up the insurance sector as it would gradually lead to majority ownership by foreign companies. As experience shows there would be incremental increase in foreign shares in the subsequent Budget and “eventually led by the garden path, we would reach the magic figure of 51 per cent in due course thus permitting the foreign companies with vast experience and tendencies spread throughout the world to take over the insurance business,” CPM member Biplab Dasgupta said in his dissent note. The other dissent notes were submitted by Jaipal Reddy (Janata Dal), Gurudas Das Gupta (CPI) and Rupchand Pal and Venkata Radha Krishnan (both CPM). Equity holding Recommending that the Bill be retitled as “Insurance Regulatory and Development Authority Bill, 1998”, the committee suggested the domestic insurance company, which should be allowed to hold up to 74 per cent equity initially, be asked to divest to 26 per cent in a phased manner within 10 years instead of six as provided in the original Bill. This recommendation has been made as the committee felt that though general insurance companies started making profits after four or five years, life insurance companies took a much longer time to break-even. While retaining the original suggestion of minimum paid up capital of Rs 100 crore for any new life or non-life insurance companies, the committee recommended the minimum requirement of paid-up share capital should be exclusive of deposits and preliminary expenses that might have to be incurred by a company at the time of incorporation. In his dissent note, Jaipal Reddy called for implementation of all safeguards suggested by LIC and GIC while opening up the insurance sector. Those who favoured the
opening up of the sector in the 45-member standing
committee have argued that the Indian market currently is
underinsured, he said, adding life insurance premium in
India had grown up only by 1.29 per cent of GDP as
against that of Malaysia’s 2.25 per cent and
Germany’s 2.65 per cent. |
Navjot lands
in tax net PATIALA, March 16 — Ace cricketer Navjot Singh Sidhu has been caught in the tax net even as his employer — the State Bank of Patiala — has “attached” his salary for February at the behest of the Income Tax Department. Top sources in the bank have confirmed that they have received the orders regarding the attachment of his account. The “attachment” orders are signed by Mr Kulwant Singh, Joint Commissioner (Special Range), Income Tax Department, who is also the assessing officer of Sidhu’s case. Navjot Sidhu has defaulted in paying income tax of more than Rs 13 lakh. Sidhu is employed as Manager (scale-3) in the Public Relations Department of the bank. While Sidhu was not available for comments as he is away to Calcutta playing in a crucial Ranji Trophy super league match for his State against Bengal. His wife left the city for Coimbatore yesterday to attend a family function. Navjot Sidhu’s lawyer could not be reached for comments. The sources say that the
“take home” salary of Navjot Sidhu will
continue to be “attached” till further orders
from the Income Tax Department. |
Envoy
suggests corridor to Asia CHANDIGARH, March 16 — For the Japanese, India ranks third for long-term and fifth for short-term investment, and is the number one future market. On the second day of his visit to Chandigarh today, Japan’s Ambassador to India, Mr Hiroshi Hirabayashi, avoided criticism — fondly voiced yesterday — and lavished praise on India during an interaction organised by the PHDCCI and attended by officials of both Punjab and Haryana, among others. Appreciating Atal Behari Vajpayee’s recent bus journey to Pakistan, the Ambassador suggested the establishment of a corridor to the rest of Asia. The Japanese delegation, which included businessmen, made it clear that they valued southern and western India more than the North, and within the North, Haryana more than Punjab. While the Japanese were familiar with Haryana’s industrial towns like Gurgaon, Bawal and Manesar, Mohali sounded unfamiliar. Haryana’s Secretary Industries, Mr M.L Tayal, was quick to point out that of the total 180 Indo-Japanese joint ventures 77 were located in Haryana. Punjab’s Secretary Industries, Mr R.I. Singh, talked in brief of the software technology park and opportunities in the information technology sector. Elaborating, Punjab official Rakesh Singh said 25 companies now subscribed to global connectivity, 19 engineering colleges in the state produced enough technical manpower and information technology will be a compulsory subject from the coming session. An interesting suggestion came up from industrialist R.K. Saboo for the Japanese team: Set up a training institute in Chandigarh. PHDCCI President Ashok Khanna supported the suggestion as he advocated the case of “dynamic North”. The Japanese delegation
also called on the Chief Ministers and the Governors of
Punjab and Haryana. |
Gold, silver crash on Chirac’s remark NEW DELHI, March 16 (PTI) — Crash-like conditions prevailed on the bullion market today when both precious metals, silver and gold, tumbled down on stockists offering influenced by French premier Jacques Chirac’s comment and closed with notable losses. Marketmen said his statement yesterday that the International Monetary Fund would sell some of the gold reserves to lessen the debt burden on Latin American countries took the prices to significantly lower. They said likewise conditions in upcountry markets also influenced the market sentiment. In Hong Kong, gold dropped by $ 4.75 an ounce at $ 287 on stockists selling and silver lost 11 cents at 513 cents an ounce. The volume of business was fair. Silver .999 (ready) dropped sharply by Rs180 at Rs 7670 per kg and weekly delivery by Rs 165 at Rs 7700 per kg. Silver coins also dipped by Rs 100 at Rs 10,400/10,500 per 100 pieces. Standard gold and ornaments recorded a huge loss of Rs 50 each at Rs 4380 and Rs 4230 per ten gram respectively. Sovereign was also traded Rs 50 lower at Rs 3750 per piece of eight gram. The following were
today’s quotations: silver .999 (ready) 7670 and
delivery 7700. Silver coins buyer 10,400 and seller
10,500. Standard gold 4380, ornaments 4230 and sovereign
3750. |
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NEW DELHI, March 16 (PTI) — The Board for Industrial and Financial Reconstruction (BIFR) has proposed merger of sick Punjab Power Generation Machines Ltd (PPGM) with Crompton Greaves Ltd (CGL). Under the revised rehabilitation scheme, PPGM will be merged with CGL in the ratio of 20:1. ie 20 shares of PPMG for every share of CGL. CGL, which is also the promoter of PPGM, will finance Rs 10.88 crore rehabilitation proposal through internal accruals of Rs 7.16 crore and Rs 3.72 crore income tax benefit for taking over the losses of the company. Out of the revival scheme, Rs 3.5 crore is for capital, while Rs 6.88 crore has been set aside for one time settlement of financial institutions’ dues and Rs 50 lakh for working capital. The entire one time settlement amount will carry interest at 12 per cent from April, 1998, and under the rehabilitation scheme promoters have to organise the necessary working capital facility from their own accruals or banks. As per the revival plan,
cash requirement of PPGM will be Rs 12 crore which would
be met by CGL internal accruals as the liquidity of CGL
after the revival is expected to be satisfactory.PPGM is
in the business of hydro power plant business on a
turnkey basis and railway wagon transportation. The
company had started making losses since 1992-93 due to
low order book. |
‘Telecom policy not from back date’ NEW DELHI, March 16 (PTI) — The government today said the proposed new telecom policy will not be implemented with retrospective effect and existing cellular and basic licence holders will have to honour their licence agreements. “We will enforce the terms and conditions of the licence agreement as they have been signed before,” Communications Minister Jagmohan told the Rajya Sabha during question hour. Stating that the government was firm on enforcing the licence agreement, which the operators had wilfully entered into, he said the plea that the former had violated licence agreement by giving last mile linkage to Internet service providers (ISPs) was totally “untenable”. ISPs have been given the right only for data transmission, while basic telecom operators have been given the right for voice transmission, Jagmohan said. He also denied any pressure from the Prime Minister’s Office (PMO) on the Department of Telecom (DoT) on the issue of licence fees. On the Internet services, he said the department had so far issued 84 licences to ISPs with the total subscribers in the country crossing 2.25 lakh. The caller line identification presentation analog (Clip-A) facility will be available in all telephone exchanges by June 2000. The facility has already
been introduced in 42 per cent of the telephone exchanges
covering 94 lakh subscribers in the country, Jagmohan
said. DoT will charge Rs 50 per month for the service. |
NEW DELHI (TNS): Indian products imported by Pakistan through third countries should be opened to direct bilateral trade, the President of the Federation of Indian Export Organisations (FIEO), Mr Navratan Samdria, said here on Tuesday. Addressing a press conference after leading a business delegation to Pakistan, Mr Samdria said that there is a need to set up joint venture companies between India and Pakistan “with a view to optimising the comparative advantages of both countries through equity participation and technology transfer”. “It would be practical to replace the existing positive list of 594 items allowed for import from India into Pakistan with a negative list prepared on the basis of protection required for their domestic industries and open all other items for free trade.” The 65-member business delegation had held discussions with chambers, officials and businessmen at Karachi, Islamabad, Rawalpindi and Lahore during the visit from March 7 to 15. Mr Samdria said the setting up of dry ports on border cities like Amritsar and Lahore could greatly facilitate trade. “A proposal was also advocated to set up bonded warehousing cum display centres on both sides of the Attari-Wagha border to facilitate trade,” he said. A ferry feeder service be opened for passengers and goods between Mumbai and Karachi. Businessmen on both sides felt the visa procedures should be simplified and the city specific restriction removed. Power crisis ISLAMABAD (Agencies): Pakistan is losing more than two billion rupees per month due to its growing surplus power and is banking on a possible deal with India to sell this surplus. “If a commercial deal with India is not materialised at this stage, the country will continue losing around Rs 2.5 billion per month because we have neither any other outside consumer, nor any immediate possibility of its utilisation at home,” a senior official of the Ministry of Water and Power was quoted as saying. The surplus power in the country has gone up to 3,000 MW and is expected to rise to 4500 MW in another six months thus pushing the Nawaz Sharif government in an almost desperate position to find a buyer at the earliest, media reports have said. Carpet kids The International Labour Organisation has announced a $ 2.9 million programme to fight child labour in Pakistan’s carpet industry. The programme is jointly funded by the US administration, which will contribute $ 2 million and the Pakistan Carpet Manufacturing Export Association, which will spend $ 900,000. The money will be used to set up 300 schools, all in eastern Punjab Province where 80 per cent of the carpet weaving industry is located. There is international outcry against the use of children to weave carpets in Pakistan, resulting in loss of sales and fall in foreign exchange earnings for Pakistan. Carpet exports earn about $ 175 million annually for Pakistan. The big buyers are the USA, Germany, Japan and Britain. Payphones Pakistan’s Telecard Ltd has announced plans to spend $ 200 million for setting up the country’s first wireless payphone service. Company Director Shahid Firoz says his firm is awaiting approval for the project from the Pakistan Telecom Authority, and once it is given, the project would see the light of the day two years. “The total project is
for 125,000 payphones and this envisages an investment of
roughly $ 200 million, Firoz was quoted as saying. |
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| UTI MUMBAI, March 16 (PTI) — UTI has reduced the time lag between the fixation of sale or repurchase price and the net asset value in respect of its four open ended equity schemes. For the schemes, Master Plus’ 91, Mastergain’ 92, Grand Master’ 93 and Primary Equity Fund’ 95, the sale and repurchase prices of a particular day will be based on NAV at the end of the previous two working days. Canara Bank Rupee card Draft payments |
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