Wednesday, November 24, 1999
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B U S I N E S S | Wednesday, November 24, 1999 |
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Centre to discourage wheat, sugar
imports SHIMLA, Nov 23 — The Centre will soon rationalise the “unrealistic” duty structure to discourage import of commodities like wheat and sugar and take steps to encourage their open sale to reduce further piling up of buffer stocks. Cane price hike to cripple sugar mills CHANDIGARH: The big hike ranging between Rs 13 and 15 per quintal in sugarcane prices ordered by the Haryana Government for the current crushing season will “cripple the state’s sugar mills industry, particularly in the cooperative sector, which is already facing huge losses. |
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Speculators, not FIIs, behind
volatility: UTI Glide
offers free Internet training
ADB ups Asian growth targets Govt
to introduce rolling settlement Award
for Premji India
braces up for Seattle round
Deficit may slip beyond 4-5 pc Nikko
hotel for Delhi ITC
lends a helping hand More
scrips on NSE |
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Centre to discourage wheat,
sugar imports SHIMLA, Nov 23 — The Centre will soon rationalise the “unrealistic” duty structure to discourage import of commodities like wheat and sugar and take steps to encourage their open sale to reduce further piling up of buffer stocks. Stating this at a press conference here today, Mr Shanta Kumar, Union Minister for Consumer Affairs and Public Distribution, said a paradoxical situation had arisen due to the irrational import duty structure. On the one hand the record agricultural production had created a problem of storage of foodgrains in the country, on the other wheat and sugar were being imported. Under the World Trade Organisation agreement the country could not ban the import of these commodities, but the import duty could be revised to discourage the imports. Simultaneously, efforts would be made to dispose of the buffer stocks through open sale so that adequate storage space was available for the next wheat crop. An important aspect was that imported wheat and sugar were cheaper than the local produce and could have a bearing on market prices. As such the Government would keep the interest of consumers in mind while taking any decision. The situation was no different in case of edible oils in which the country was not self-reliant. Over 40 lakh tonnes of refined edible oil was being imported and it was much cheaper. The farmers producing oilseeds like soyabean had been hit hard as the indigenous edible oil industry was unable to compete with the imported oil. The Government was considering various options like importing oil seeds or crude oil instead of refined oil to safeguard the interest of farmers and edible oil industry. Expressing concern over the flooding of market by substandard and duplicate goods, he said the abject lack quality control had shattered the faith of consumers. There was an urgent need to strengthen the bureau of Indian standards to exercise effective control over quality of products and restore the faith of consumers who were paying through their nose. Mr Shanta Kumar categorically stated that there was no move to discontinue supply of levy sugar through the public distribution system. However, an elaborate exercise was being undertaken to revamp the PDS and weed out bogus ration cards. A Bill to amend the Essential Commodities Act was likely to be introduced in Parliament during the winter session. Referring to Himachal, he said there was an urgent need to increase the storage capacity by about 22,000 tonnes for stocking of foodgrains. As per norms a State should have a capacity for storing at least three months’ requirement of foodgrains but Himachal had only one month’s storage capacity. The Centre would also
help the State in building cold storages for stocking
apples and potatoes. There were at present 14 principal
distribution centres for supplying essential commodities
to the State which were insufficient. About eight to 10
more such centres would be opened shortly. He said he had
also urged the Centre to sanction more cooking gas
agencies in the State. |
Ford gets 5,400 orders for Ikon NEW DELHI, Nov 23 (UNI) — Ford Motor Company President and CEO Jacques Nasser today exuded confidence that Indian customers would not base their opinion on Ford Ikon for the failure of Ford Escort to make much headway in the country’s car market. “We have never stated that our Indian joint venture will never launch new models and phase out the old ones. At the moment, we can give this much guarantee to Ikon’s customers,’’ Mr Nasser told mediapersons here today. Mr Nasser is on a two-day visit to the country to launch Ford Ikon. He parried questions on phasing out of the vehicle, stating that it all depends on customers. Ford India has sold only 15,000 Ford Escorts in two and a half years. Asked about the crowded mid-size car segment, Mr Nasser claimed that Ikon would create a benchmark in this category. Managing Director Philip G. Spender said the company invested Rs 1700 crore in its plant at Maraimalai Nagar near Chennai so far and achieved a localisation level of 70 per cent in Ikon. The company has set a target of selling 20,000 Ikons in the first year itself. The company has received 5,400 orders for the new vehicle till now. Earlier in the day, Mr Nasser called on Mr A.B. Vajpayee. Later, Mr Nasser handed over keys of Ikon to eminent film personality Subhash Ghai. Besides, the visiting
head of the 150 billion-dollar auto giant also gave Ikons
to LML Limited Director Sanjeev Shriya and Lease Plan
India Managing Director Veerle Behets. |
Cane price hike to cripple
sugar mills CHANDIGARH: The big hike ranging between Rs 13 and 15 per quintal in sugarcane prices ordered by the Haryana Government for the current crushing season will “cripple the state’s sugar mills industry, particularly in the cooperative sector, which is already facing huge losses. According to official sources, an increase of rupee one per quintal in surgarcane prices will have an adverse impact of Rs 1.16 crore on the working of the industry. Haryana has 10 sugar mills in the cooperative sector and three in the private sector. Four of the 10 cooperative mills at Panipat, Rohtak, Bhuna and Kaithal have already incurred huge losses running into several crores of rupees. Two mills are breaking even while the remaining four are in profit. According to informed sources, the increase of Rs 15 Rs 13 and Rs 13 per quintal in the prices of early, mid and late varieties of sugarcane respectively over last year’s prices of Rs 95, Rs 93 and Rs 91 per quintal would increase losses of the four loss-making mills manifold. Even the two mills now breaking even would slip into the red, while the profit-making four mills may either wipe out their profits or even start suffering losses. In view of sufficient sugar stocks in the country and the unlikelihood of the commodity’s prices going up, the new burden on the Haryana sugar mills in the form of increased cane prices would deepen the crisis in the industry. Out of the three private sector mills, the one at Yamunanagar is the oldest and the biggest in the state. The other two are newly set-up mills. Haryana’s step in effecting a big increase in cane prices will have an immediate impact in Punjab too. The two states have normally been keeping parity in cane prices. Even last year’s price of Rs 95 a quintal for early varieties in the two states was Rs 10 per quintal higher than that prevailing in Uttar Pradesh. In fact, Chief Minister Om Prakash Chautala had declared that he would fix Rs 125 per quintal as the cane price if his Indian National Lok Dal came to power. Now the Opposition has demanded that he should fulfil his promise. The price hike has been
criticised even by Dr R.S. Kanwar, a former Additional
Director of Research (Agriculture) of Punjab Agricultural
University. He said it had been done on political grounds
and not on a technical or scientific basis. He said since
the hike would adversely affect the sugar industry, the
Haryana government should reconsider its decision. |
Anyone can get foreign currency MUMBAI, Nov 23 (PTI) — The Reserve Bank of India (RBI) today clarified that any person can receive foreign currency from any person resident outside India and who is on a visit to the country, for services rendered or in settlement of any lawful obligation. Such acquired foreign currency, if in excess of 2000 US dollars, have to be sold within seven days of receipt to an authorised dealer, RBI said in a statement here today. The foreign exchange so received could be in any form: currency notes, cheques, drafts and travellers’ cheques. The Government of India
has permitted residents to retain, if they so desire,
foreign currency/currencies upto US dollar 2000 or its
equivalent in aggregate. |
Honda to set up unit at
Manesar NEW DELHI, Nov 23 — Honda Motor Company (HMC) today signed a memorandum of understanding with the HSIDC for setting up a two wheeler manufacturing facility at Manesar, Gurgaon. The project will be operated by Honda’s newly incorporated wholly-owned subsidiary Honda Motorcycle and Scooter India (Pvt) Ltd, which had been approved by the Foreign Investment Promotion Board FIPB in August,1999. The Deputy Chief Operating Officer, Asia and Ocenian Operations of HMC, Mr Satoshi Toshida said the initial project cost of 5 billion yen will essentially be met out of equity finance by the parent company. Honda expects to
commence production by the later half of 2001 at the new
plant.Initial production capacity will be 1,00,000 units
per annum which will be increased to 3,00,000 units by
2004. The project proposes to employ around 1800 persons. |
PNB officials in CBI net NEW DELHI, Nov 23 (PTI) — The CBI has registered a case against two top officials of Punjab National Bank (PNB) and two executives of a group of companies for allegedly causing a loss of over Rs 13 crore to the bank through short term loan advancement during 1994-95. The FIR lodged here recently named the then PNB Chairman Rashid Jilani, then Managing Director of PNB Capital Services M.K. Menon, Director of Solarson Industries K.K. Bajoria and its President (Finance) K.C. Aggarwal, CBI sources said today. The agency also made Solarson Industries and Willard India, another company of the B.P. Bajoria group as the accused. According to the FIR, the bank had advanced Rs 3 crore to Solarson following a request by the B.P. Bajoria group in January, 1994, for a short-term loan for a project to manufacture halogen auto lamps and compact fluorescent lamps with a proposal by the company to bring out a rights issue of fully convertible debentures of Rs 9.1 crore. However, the company failed to bring any rights issue and repay the loan even after repeated extensions sought on flimsy grounds. The agency further alleged that another loan of Rs 10 crore was advanced to Willard against the proposed rights issue in November 1994 by the bank’s Capital Service without verifying means and worth of the company. The bank officials were
charged with abusing their official position to provide
benefit to the group for a rights issue which was nowhere
in sight. |
Glide offers free Internet
training CHANDIGARH, Nov 23 — Glide Chandigarh’s first private digital ISP, has decided to offer free Internet training for people with little or no conceptual and working knowledge of the Internet. Professionals, teachers, businessmen, lawyers, engineers, school and college students and even housewives are eligible. The programme is aimed
at enabling the web-ignorant individuals to understand
the basic concept behind the Internet, i.e. how data
travels from computer to computer, around the world and
explore its delight. It then makes them familiar with
various uses and functions of the Internet. A group of 10
to 20 persons undergoes a two hour session on Internet
training. |
Speculators, not FIIs, behind volatility: UTI NEW DELHI, Nov 23 (UNI) — Mr P.S. Subramaniam, Chairman, Unit Trust of India, today said it is not the foreign institutional investors but the speculators who are to be blamed for volatility in the stocks markets. “Gross FII flows as a percentage of delivery based turnover is in the range of 15.50 per cent. FII activity is amplified by the speculators taking advantage of this information of market sentiment,’’ Mr Subramaniam said. Pointing out a direct correlation between the Sensex and FII flows, he said the monthly FII activity as percentage to cumulative FII holdings stands at a healthy average of positive 0.80 per cent. However, Mr Subramaniam cautioned that the FII activity can have an impact on the monetary and credit policy of the country. “There is a potential impact which might lead to prudent economy management.’’ Addressing a session on “Impact and Role of FIIs in Emerging Market,’’ hosted by SEBI here, he said FIIs can be attracted and retained by focusing on corporate and economic performance. “Money flows where the returns are,’’ he quipped. FII would show long term commitment provided the economy and corporates improve their performance, experts at the meeting said. Moreover, the depth of the stock markets needs to be increased to accommodate more institutional investors. They would provide the needed cushion during high periods of volatility in the stock markets. Mr Subramaniam was
joined by stock exchange regulators from Argentina,
Malaysia and Chile in stating that FIIs have brought
about a whole list of benefits to the bourses and the
economy in general. |
ADB ups Asian growth targets MANILA, Nov 23 (AFP) — The Asian Development Bank (ADB) sharply upgraded this year’s regional economic growth forecasts to 5.7 per cent today. The Manila-based bank boosted the original projection of 3.8 per cent owing to the strong recovery by the humbled economic tigers of South Korea and South-East Asia and robust growth in China. The bank research papers presented at a workshop here also saw Japan “beginning to emerge from the recession” and detected sustained growth in South Asia. “The 1999 performance appears to be the beginning of a cyclical upswing as prospects for 2000 also appear strong supported by a higher rate of growth of world GDP and trade,” the ADB said in the report released four days ahead of a summit meet of South-East Asian leaders here. The bank said the Asian economy would also grow by 5.7 per cent in 2000. However, the ADB warned the region, which grew by 2.3 per cent in 1998, against slackening in reform efforts “if growth momentum is to be maintained and social costs of any future downturns are to be minimised.” Downside risks for this
year’s recovery are “now minimal” with the
stability of the US and Japanese economies, the peaceful
political transition in Indonesia and projected higher
consumption in the three months to December. |
Govt to introduce rolling settlement NEW DELHI, Nov 23 (UNI) — Finance Minister Yashwant Sinha today said the Government proposes to introduce the rolling settlement system in the physical segment to raise the country’s equity market trading practices closer to international standards. Rolling settlement, a vital component of the capital market reform, would bring in certainty of trades, reduce risk and delay in settlement and keep excessive speculation under control, the Finance Minister said, while inaugurating a meeting of the Emerging Markets Committee of the International Organisations for Securities Commissions (IOSCO). All trades in the dematerialised segment were already being settled on rolling settlement. Mr Sinha said regulatory institutions of international quality were required to cope with volatility. All emerging markets should nurture well capitalised and technically empowered institutions comparable with institutions of developed capital markets. There was a need to encourage firms to adopt a management philosophy that increased the focus on the investor, in terms of improving disclosure requirements and establishment of a culture of appropriate corporate governance and accounting standards. Apart from the need for evolving these, it was necessary that the regulators coordinate and cooperate among themselves, within and outside the country, the Finance Minister said. Mr D. R. Mehta, SEBI Chairman who is also Chairman of the Asia Pacific Regional Committee of IOSCO, called for best international practices to make the markets modern in systemic terms. He suggested steps to contain risk and volatility and multiplicity of regulatory agencies within a country. Corporate governance was yet another matter for concern. Unless the companies made efforts to maximise the shareholders value, the capital markets were unlikely to grow and improve qualitatively. Mr Paul K Melly, Chief
Executive of Kenya’s Capital Markets Authority and
Chairman of the Emerging Markets Committee (EMC) of
IOSCO, said there was need to build a global financial
system as there would be no one market that could resist
on a sustainable basis the pressure of globalisation. |
Award for Premji BANGALORE, Nov 23 (PTI) — Azim Premji, Chairman, Wipro, has been selected as “Chief Executive of the Year” by the Indian Institute of Materials Management (IIMM). Premji’s leadership, vision and pragmatism were the guiding factors that helped Wipro Corporation to become one of the most competitive and successful Indian companies, IIMM said in a press release The award will be presented at the national convention of the IIMM, the premier body of professionals dealing with materials management, supply chain management and logistics, to be held at Hyderabad, from November 25 to 27. The Andhra Pradesh Chief Minister Chandrababu Naidu will present the award. The objective of the
convention is to create the awareness about the changing
scenario in view of the influence of e-commerce and
information technology and to deliberate the role of
materials manager in meeting the expectations of
enterprise. |
India braces up for Seattle
round NEW DELHI, Nov 23 — India is bracing up for the WTO Seattle round of talks from November 30 to December 3 and if the preparatory works are any indication it will be a leading voice of the developing world at the ministerial meeting. A sequel to the Uruguay Round agreement, which came into effect under the aegis of the WTO on January 1, 1995, the meeting will be reviewing the built-in agenda of the Marrakesh agreement, implementation issues, new issues and non-trade issues. The meeting at Seattle has been called to identify issues and sectors that should be taken up for negotiation from January, 2000. High on the list of agenda are further talks on trading in agricultural products, services, implementation issues like trade related intellectual properties, textiles, anti-dumping duties and subsidies and non-trade issues like linkage between trade and environment and labour. The Government realising that the international agreements have far-reaching impact on the daily lives of the common man has over the last few months held discussions with industry representatives, the Opposition and political leaders. To quote the Union Commerce and Industry Minister, Mr Murasoli Maran: “The errors of the past or the mistakes that we might have made in the Uruguay Round shall certainly not be repeated”. India is of the view that the Uruguay Round agreements have not so far resulted in appreciable benefits to developing countries and therefore, the first priority should be to take a close look into the implementation of existing agreements and to initiate corrective steps. The Indian delegation at the Seattle round will emphasise on the removal of inequities and the imbalances in the existing agreements, to ensure that the agreements are implemented in letter and in spirit so that the benefits which were to accrue to all the countries do in fact materialise and the special dispensation which developing countries were to receive in the implementation of various clauses in different agreements, does not remain merely on paper. India would plead in particular that the special provisions in the anti-dumping agreement and the Dispute Settlement Understanding, which were meant to safeguard the interests of developing countries be implemented in letter and spirit. Another point of contention with the developed countries for India would be the emerging prominence of non-tariff barriers, which include sanitary and phytosanitary measures, technical standards, environmental considerations anti-dumping and countervailing measures. India would press the point that in the interests of transparency, it would be logical to postulate that internationally accepted standards should prevail rather than a plethora of standards put in place by different countries at different points in time. The agreement on agriculture is another point in the agenda which would be of special interest to India. According to officials, the spirit behind the agreement was a gradual scaling down of subsidies and tariffs in order to facilitate international trade in agriculture products. However, this has not happened and instead it is estimated that the subsidies given by some developed countries to the agriculture sector has actually increased beyond the pre-Uruguay Round levels. The tariff reductions have also been cosmetic. India’s stand would be that in agriculture any declaration which does not make specific reference to the problems of large predominantly agrarian economies, especially relating to food security, poverty alleviation and rural employment, would not be acceptable. Another point irking India is the fact that the agreement on textiles and clothing has not taken off as in the sector very little market access has materialised and there has been no acceleration in the growth of exports of textiles and clothing from developing countries. Services is another area where liberalisation has been confined to areas of interest to only the developed countries. India would push for a positive development in this sector, particularly the movement of service providers and professionals. The charge of “eco-imperialism” would also be echoed by India at the meeting as there is a feeling that trade is seldom the cause for environmental degradation and the developed countries are using it as a “Trojan Horse” to perpetuate protectionism. Similarly, the fact that labour standards are widely used as a smoke-screen to hide the erosion of comparative advantage would be highlighted at the meeting. To quote Mr Maran:
“India will not fear to negotiate but will not
negotiate out of fear”. |
Deficit may slip beyond 4-5 pc NEW DELHI, Nov 23 (PTI) — India’s fiscal deficit is likely to slip beyond the estimated 4 to 5 per cent of GDP this fiscal mainly on account of the mounting oil import bill and interest burden. “The country’s oil import bill is expected to be more than double in the current financial year to touch Rs 54,000 crore against Rs 24,000 crore last year,” PNB Gilts, a primary dealer in government securities, said in its latest report. The sharp rise, due to the hike in international prices, is likely to have serious repercussions on the Indian economy if the burden is not passed on to consumers. PNB Gilts said the mounting interest burden is due to the heavy government borrowing, which stood at Rs 82,130 crore. During the current financial year, the pace of the government borrowing has been faster compared to the previous years. On the positive side, the PNB Gilt report said the growth in industrial production was higher at 6.4 per cent in the first half of the current year compared to 4 per cent in the previous year. Though the higher growth was contributed by all three sectors — mining, manufacturing and electricity — the apparent industrial recovery has been mainly led by the consumer durable segment registering a 12.8 per cent growth as compared to 1.9 per cent in the same period last year. The capital goods sector
also recorded an increase of 9.2 per cent over and above
the 11.1 per cent growth. |
Nikko hotel for Delhi NEW DELHI, Nov 23 (PTI) — Japanese hospitality industry is set to make its debut in India with the formal launch of Metropolitan Hotel Nikko in New Delhi, through a collaborative agreement with Delhi-based Sunair Hotels Ltd. “Europe is experiencing an economic slowdown but Asia continues to grow and this is our first step to make our mark in India,” Kenji Uda, Vice-President and General Manager, Development of Nikko Hotels said here last night formally announcing the tie-up with Sunair. The five-star deluxe hotel with 175-rooms will commence operations in March-April next year. Nikko Hotels, one of the largest hotel chains in Japan, is a subsidiary of Japan Airlines (JAL). Nikko and Sunair will have a management contract for operating Metropolitan Hotel Nikko, New Delhi. Shashi Vagale, President Sunair Hotels Ltd, said the hotel was built with an investment of Rs 80 crore. “We have invested Rs 80 crore in the Delhi project and we are also game for participation in other metros with Nikko,” Vagale said. Sunair and Nikko are looking at possible opportunities in other metros and resort centres to expand operations in India. Uda said Nikko was keen
on acquisitions to expand the total number of hotels from
current 53 to 100 by 2001. |
ITC lends a helping hand CALCUTTA, Nov 23 (UNI) — ITC Limited has joined the select band of responsible corporate citizen of the country by deciding to contribute over 1 per cent of its net profit to social welfare. Responding readily to the nation’s call for help in times of natural calamities and national priorities, ITC had donated Rs 1 crore to the Army Central Welfare Fund for soldiers who fought at Kargil and their dependants, sources said. It has also contributed Rs 25 lakh towards the Orissa Chief Minister’s Relief Fund to help those devastated by the massive cyclone in the State. During the past two
years, the ITC education trust has donated Rs 2 crore to
the Indian Institute of Technology, Delhi for setting up
a business school that will fulfil the growing need for
quality management education in the country. It has also
committed Rs 5 crore to the Indian School of Business
being set up in Hyderabad. No plan to cut interest on PF NEW DELHI, Nov 23 (UNI) — Mr Yashwant Sinha said today his ministry had not received any proposal to cut the interest rate on provident fund (PF) deposits. The Planning Commission
had suggested to the Finance Ministry a two per cent cut
in the interest rate on PF from the present 12 per cent. |
More scrips on NSE MUMBAI, Nov 23 (PTI) — NSE today announced the addition of some more securities on the capital market segment of the exchange available for trading from November 24. The additional
securities in the physical segmenet were the equity
shares of KPIT System Ltd, Polaris Software Lab Ltd and
14 per cent redeemable cumulative preference shares of S
Kumar’s Synfab Ltd. In the depository segment
equity, shares of Ahmedabad Electricity Co. Ltd, Carrier
Aicon Ltd, Citicorp Securities & Investments Ltd,
Mahindra Ugine Steel Co Ltd, MTZ (India) Ltd, Polaris
Software Lab Ltd, Honda Siel Power Products Ltd and Zee
Telefilms Ltd will also be available for trading at the
NSE. |
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| GAIL Tribune News Service CHANDIGARH, Nov 23 — The AIOE (All-India Organisation of Employers) Industrial Relations Award for the year 1998-99 has been bagged by GAIL. The company was selected out of a long list of nominations by the FICCI award jury headed by Justice P.N. Bhagwati. Cavin Kare Colgate Barila Markets shut J&K Bank Bank of India |
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