‘Give education loans’ MUMBAI, Sept 5 — RBI has directed public sector banks to provide education loans to students pursuing full-time graduate/post-graduate professional courses in private college at the maximum rate of 12 per cent annum.

Stop populism, IMF tells Pak
ISLAMABAD, Sept 5 — The beleaguered Sharif Government is in a fix after an IMF review committee that visited Pakistan recently demanded that the government wind up most of its populist schemes, including a much-vaunted housing scheme, to reduce the ballooning debt burden of banks.

Action plan to push up exports
NEW DELHI, Sept 5 — FICCI today demanded immediate notification of export import (exim) policy provisions as “inordinate delays were badly hitting the sagging export growth”.

Reliance fund to be open-ended
MUMBAI, Sept 5 — Reliance Growth Fund, due for redemption in October 2002, is being converted into an open-ended growth scheme from September 27, 1999.

New telecom corporation needed: CII
NEW DELHI, Sept 5 — An apex chamber has said the Communication Ministry should set up a separate corporation for rapid growth of long distance telecom services (DLD), including creation of necessary infrastructure.

• Trigent gets Rs 4 cr

‘The British have left us with file raj’
By Nirmal Sandhu
Tribune News Service

CHANDIGARH: “One per cent of the population takes decisions that shape the destiny of 100 crore people ... Things can’t get worse ... People are dying to come out of the clutches of the system ... We need a JP to rescue them”.

That comes not from a doublespeak politician or a disillusioned scholar, but from an NRI tycoon who has made half a billion fortune from his businesses spread over the USA, the UK, the UAE, Libya and India. Nearer home, H.S.Narula (46) is better known for his Ebony stores in Chandigarh, Delhi and NOIDA, reaching a Rs 30 crore turnover in just five years.

Narula’s DS group (named after his father, Darshan Singh) has interests in construction, hotels and restaurants, real estate, trading in agro-products, besides retailing. In an interview with Business Tribune, “HS”, who was in Chandigarh on Friday, shares his business experiences, revealing inner rage hidden behind a quiet exterior. Here are excerpts:

Q. How did it all begin?

Ours is a refugee family from Pakistan which after partition settled in Delhi, although I was born at Samana. My father took up construction business. After college, I wanted to go abroad to study business management. But my father dissuaded me as my brother had already gone to Germany. I stayed on and requested my father that “you will not stop me from doing whatever I want to”. In 1975, I again thought of going abroad. After some initial disappointments like the RBI refusing to give me foreign exchange, I managed to land in Iran. I took up construction work which flourished. I moved over to Iraq, Libya and in 1981, I entered the UK. By now my business interests had spread to real estate, hotels and trading. As long as you want to work, avenues are open everywhere except in India.

Q. How did you manage to operate in such diverse work cultures?

I am very adaptable. I am a bottomline person. Currently I work in four different business cultures — in Gulf countries, Britain, America and India. I even change my accent accordingly. Within India, North Indians are so different from South Indians. A South Indian colleague works within the given guidelines. He is content with his work and the money he gets. A North Indian, on the other hand, is outgoing and enterprising. He cannot be restricted. He always looks for greener pastures. That is perhaps one reason why software and other multinationals head for South India.

Q. How is doing business in India different from that in other countries?

Rules and regulations in India have been made in such a way that officials take advantage by harassing businessmen. There are established norms — if you do this, this would happen. Accountability in government departments is not there. Everybody has a right to stop you.

While setting up Ebony in Chandigarh we lost six to eight months in procedures. The British have left us with “file raj”. Even if a genuine officer says yes to a project, an inquiry would start. If he says no, nobody questions him. There is no inquiry. If the Chandigarh Administration is keen that such projects should flourish, clearances should be automatic.

In Dubai about 30 per cent of the population is from the Indian subcontinent. Ninety per cent of the economy is run by these people. Businesses are very competitive. There is no interference. In a government construction project there the profit margin is 4 to 5 per cent. In India it is 20-25 per cent because of built-in corruption. All are suffering and paying for this.

In the USA if I have to develop a housing colony on a 50-acre piece, I deal with a single official and get all clearances immediately without any bribe. They ask for bonds. If the developer does not create the necessary infrastructure, the bonds are encashed. No court cases, no inquires. Associations of residents take care of maintenance, waste collection, pollution etc. If anything goes wrong, an alert media spares nobody. Here you build a colony in five to 10 years by being nice to everybody.

Q. Why are you here if there is so much wrong in this country?

I believe time for change has come. Pressure is building up to change all this. People are disillusioned. In certain Delhi colonies residents themselves maintain law and order. Newspapers often carry reports of criminals caught by residents. Inner anger is driving people to change the state of affairs. Ten per cent of the population is eating up resources meant for the remaining 90 per cent. If things don’t improve now, there would be chaos.

Q. How is your management style?

I delegate powers. I adopt a project, devote six-seven months to it and then move on to the next. I don’t borrow easily. My only love affair — other than the one with my wife — is with my work. I have told my three sons: You will not inherit any wealth if you don’t learn to earn. They travel in economy class. My wife, Surina, is a free-lancer and is raising money for street-children.

CAG: no records kept of foreign trips

NEW DELHI, Sept 5 (PTI) — The Comptroller and Auditor General (CAG) has criticised State Ministers and officials for widespread irregularities in foreign travel and suggested a regulatory mechanism for this purpose.

“Adequate systems for regulating foreign travel are lacking. In several States there is no nodal department for this purpose. The governments do not have complete details and records of the foreign travels undertaken by the Ministers, officials and other persons,” CAG said in its 1997-98 audit reports for various State governments.

“The monitoring of the advances taken by the persons going abroad is very lax as a result, huge amounts of advances are outstanding and in many cases aven TA bills were not submitted long after completion of the tours,” CAG added.

The Andhra Pradesh Industrial Corporation was given an advance of Rs 30 lakh for arranging the visit of a 10-member delegation led by the Chief Minister to Malaysia and Singapore in May 1997 but it spent only Rs 10.67 lakh and did not refund the balance Rs 19.33 lakh.

“Tours without the approval of the Government of India are commonplace. The permission of the Prime Minister was not taken in the case of several Ministers’ visits,” CAG said.

Goa spent Rs 35.27 lakh on foreign travels of the Chief Minister, Ministers and officials during 1997-98. Tours were undertaken without approval of the Ministry of Finance.

Quoting instances of breach of rules for foreign travel, CAG report said, the “Darjeeling Gorkha Hill Council (DGHC) in West Bengal had gone to the extent of prescribing its own daily allowance rates (DA), without any regard to the rates prescribed by the Government of India”.

Daily allowances at an enhanced rate and overstay by DGHC officials caused excess expenses to over $ 32,550.

CAG said, there was no control over the DA disbursed and claimed by the persons and “payment of DA to Government officials at rates applicable to public sector employees was also common”.

Officials could only claim DA at the rate applicable to government servants even when the cost of foreign travel was borne by public sector establishments, it added.

Existing DA and other allowances for foreign travel were more than adequate to meet personal expenses, CAG sources said.

Officials and ministers had little reason to complain about support provided during travel as accommodation arrangements — a major expense incurred while travelling overseas — were taken care of by the Indian embassies and commissions.

Andhra tops in aid for projects

NEW DELHI, Sept 5 (PTI) — Andhra Pradesh topped in getting external assistance for development projects in 1997-98 with 9.8 per cent share followed by Maharashtra with 3.4 per cent, an Assocham study has revealed.

Another major gainer was West Bengal whose share of total external assistance went up from 1 per cent in 1990-91 to 6.6 per cent, it said.

At the same time, States like Bihar and Madhya Pradesh were able to get less than 1 per cent of the total external assistance. Six States — Andhra Pradesh, Tamil Nadu, Orissa, Rajasthan, Haryana and Punjab — received over 37 per cent of the assistance.

The share of external funds given to State-level projects doubled in the 90s from 31.4 per cent (Rs 1,936 crore) in 1990-91 to 60 per cent (Rs 5,096 crore) in 1997-98.

This was at the cost of Central Government projects which garnered Rs 3402 crore in 1997-98 compared to Rs 4236 crore in 1990-91.

Another important change in the nature of external assistance has been the areas of assistance with social sector, water resource management, roads, environment and forestry receiving a greater share over the years.

Stop populism, IMF tells Pak

ISLAMABAD, Sept 5 (PTI) — The beleaguered Sharif Government is in a fix after an IMF review committee that visited Pakistan recently demanded that the government wind up most of its populist schemes, including a much-vaunted housing scheme, to reduce the ballooning debt burden of banks.

The IMF and the World Bank have objected to schemes such as the Prime Minister’s Transport, self-employment and the ‘Mera Ghar’ schemes since these are likely to further stretch the overburdened banking sector of the country, English daily Frontier Post said yesterday quoting official sources.

These multilateral bodies fear that such “politically motivated” schemes will only increase banks’ ballooning bad loans, it said. Most of these schemes, including the Mera Ghar scheme, were launched recently in a bid to boost Mr Sharif’s sagging popularity in the wake of the Kargil defeat.

The IMF review committee visited Islamabad last week to take stock of Pakistan’s economy before giving a go ahead for a crucial US $ 280 million loan to the cash-strapped country. The World Bank had earlier provided a huge sum to the State Bank of Pakistan for restructuring the ailing banking sector.

Finance Minister Ishaq Dar had recently conceded at a recent press conference that bad loans of public sector banks were rising at the rate of 8 per cent. Media estimates have revealed that total bad loans have climbed to Rs 225 billion from Rs 140 billion when Mr Sharif came to power.

The report in the Post comes days after other reports claiming that the two and-half-year old Sharif government had pruned the outlay for development schemes in the 1999-2000 budget by Rs 8 billion.

Total allocation for development schemes in the budget was Rs 116 billion, only 3.5 per cent of Pakistan’s GDP. Allocation for developmental projects is less as a major chunk of the budget goes into debt servicing (nearly 45 per cent) and defence expenditure (22 per cent).

‘Give education loans’

MUMBAI, Sept 5 (PTI) — RBI has directed public sector banks to provide education loans to students pursuing full-time graduate/post-graduate professional courses in private college at the maximum rate of 12 per cent annum.

The loan amount would be Rs 15,000 for students getting admission under the free/merit quota and Rs 50,000 for students admitted under the payment quota or the actual fees payable,whichever is less.

One of the conditions is that the student’s annual family income should not exceed Rs 1 lakh from all sources, RBI said in a recent circular to the banks.

Repayment of the loan will commence immediately after two years of completion of the course the student is studying in or six months after the student borrower has secured employment and starts earning, whichever is earlier.

The total period for repayment, including the above period of two years or six months, as the case may be, should not exceed five years from the date of completion of the course by the student, the circular said.

The scheme may be reviewed and revised from time to time so that it meets the objective of a cess to credit at reasonable interest rates but consistent with the overall interest rate policies of the country.

RBI said the scheme, effective from August 1, 1999, is meant to provide financial assistance by way of loans to the meritorious and indigent students to encourage them to pursue full-time studies in medical and dental, engineering, chemical technology, management, architecture, including interior decoration, law, computer science and applications.

The scheme will be expanded to cover other professional courses if any, if required. Students who have secured admission against quota of seats meant for NRI/foreign students will not be eligible for assistance under the scheme.

RBI said a student availing of the facility will have to submit a certificate every year from the college authorities regarding fees payable by him and the loan amount will be remitted by the lending bank to the college concerned.

A loan granted in each academic year would be treated as a separate loan account for determining the rate of interest, security, etc.

RBI said the assistance from the bank should be available to a student for the entire duration of the course subject to the student continuing to fulfil the eligibility criteria and being allowed to keep the terms according to the rules of the university concerned.

The student will not be required to submit a fresh application for loan every year, but will only submit to the bank proof of his continuing to fulfil the eligibility criteria.

HAL can make small aircraft

EXPERTS are of the view that the Hindustan Aeronautics Limited (Bangalore) has engineers and scientists who can manufacturer a small commercial aircraft. But this is possible only when there is no interference from politicians. The knowledge of Indian aviation engineers is second to none but unfortunately they are not being given free hand to manufacture commercial aircraft.

According to analysts, India’s urgent need is a small aircraft. HAL should be given approval to manufacture small aircraft, which will undertake operations on feeder routes.

No country can produce world class aircraft straightaway. Even the USA and European countries had to spend decades before qualifying to produce Boeing or Airbus aircraft. Similarly India can manufacture small large aircraft provided there is no arm twisting from within.

There was time when cricket bats, balls and tennis balls were imported. Now international matches are played with Indian-made balls and bats. But these are now exported and even English Test stars use Indian bats and balls.

Similar will be the situation in the aviation world if engineers are allowed the freedom the tourism and aviation industry can change the face of the country. What is of importance is that the politicians should have no say at least in the affairs of the twin industries.

When Madhavrao Scindia was the Minister for Civil Aviation, he wanted Gwalior to be the maintenance base for wide-bodied aircraft. But the project did not take off as Scindia quit the ministry. Similarly, Minister for Civil Aviation Ananth Kumar has suggested a base for Indian Airlines in Bangalore. Now the project is lying in the cold storage because of elections.

The national carrier needs a base. But whether it should be in Bangalore or any other city should be left to the experts to decide instead of a minister who wants to serve his constituency.

Concorde

“Style is the man’’, it is said. But British Airways has different slogan. It says: “Style is the product”. With this analogy, the airline has decided to have new seats, new bathrooms, new interiors, new tablewear and a new lounge for Concorde at Heathrow. The airline emphasises that providing a new look is the need for the jet to get into the next century in style.

“We want to make the interior of Concorde as elegant as its exterior”, said Bob Ayling, the airline’s Chief Executive. With this as the airline’s guiding principle, the boss wants not only the involvement of passengers but also their complete satisfaction.

Action plan to push up exports

NEW DELHI, Sept 5 (PTI) — FICCI today demanded immediate notification of export import (exim) policy provisions as “inordinate delays were badly hitting the sagging export growth”.

Outlining a four-point action plan to push up exports, the apex chamber also wanted the transaction cost to be reduced and said batter coordination between the Commerce and Finance Ministries would facilitate in this regard.

“Due to a lack of coordination between the Ministers of Commerce and Finance, implementation of many of the policies announced in the exim policy are getting unduly delayed,” FICCI said in a statement here.

Stating that policy announcements and issuance of notifications should be simultaneous, FICCI said it was necessary to remove uncertainties that were not conducive for export growth.

The duty entitlement pass book scheme (DEPB) should be made fully transparent and clear guidelines based so as to avoid different interpretations and delay in implementation.

“Even the determination of DEPB rates and the like should be based on well-laid down norms so that no export item remains uncovered or pending,” FICCI said.

Demanding overhauling of present legislative frameworks that determine export procedures, it said “even the language of such rules and regulations is clumsy, complicated many a time beyond the understanding of even a fairly well-educated person.”

Pidilite Ind

THE financial year ending on March1998 was marked generally by unimpressive performances by most of the Indian corporates. However, certain companies have not only managed to retain their regular trends but also recorded improved performances. Pidilite Industries, well-known mainly for its Fevicol brand is one of them. Pidilite Industries with a dealership network spanning 30,000 dealers and over 3 lakh retail outlets, ranks as the market leader in adhesive products, accounting for nearly 60 per cent of the market share.

Over the years, it has also grown to become the largest manufacturer of resins in India. Pidilite Industries has also active participations in the fabric colour market, and they sell acrylic colours under the Fevicryl brand. The company has been able to achieve a decent turnover. Factors such as the falling raw materials prices as well as the reduced interest burden have also had a significant effect on the increasing net profits. The financial records for the year ending March 1988, Pidilite Industries posted total sales and net profits of Rs 293.70 crore and Rs 26.67 crore, respectively. The EPS there form was worked out to Rs 21.8.

The financial records for the next nine-month period ending on December 1998 showed total sales and net profit at Rs 252.80 crore and Rs 29.36 crore, respectively. With branded products increasingly contributing to the total sales in the coming years, and the company being able to continuously retire its debts due to the ruling of lower interest rates, the company should continue to perform well. Considering all these factors, the scrip does guarantee decent returns in the near future.

Pentafour Soft

Pentafour Software Ltd (PFL) is a leading player in the software industry. The company can boast of excellent results during the year ended March 1998. Sales and net profit of the company stood at Rs 284.56 crore and Rs 68.37 crore, respectively, thus yielding an EPS of Rs 33.9. For the nine-month period that ended in December 1998, the company posted sales and net profit at Rs 347.98 crore and Rs 78.89 crore, respectively.

It is reported that the company, during the last quarter of the year ending 1999, has recorded substantial increases in its financial figure, which should boost its already encouraging performance. The company has benefited predominantly from its multimedia division, which is responsible for more than half of its turnover.

The business software division consists of banking, insurance, technology solutions and ERP. The ERP division is recognised as the major cash cow in the business software division. The order book of the company is very healthy with reference to the next year and a half. The banking division has many orders lines up from the likes of Dubai Corporation Bank, Invest Bank and National Bank, etc. It is also implementing a project for a Fortune 500 financial major.

PFI plans to shift its CD-Rom project to the Dubai Airport Free Zone and cash in on the potential market of UAE and Europe. The company appears to be headed in the right direction and one could witness better growth in the future. Investment in the scrip is advisable for medium to long term gains.

Hitech Drilling

A Tata group company, Hitech Drilling Ltd (HDL) is engaged in providing drilling and related services which is applicable for the production of oil and other hydrocarbon and mineral resources. The company provides services for both on and offshore in the country. On the financial front, the company can boast of a decent track record. For the year that ended in March 1998, HDL posted sales and net profit at Rs 153.25 crore and Rs 19.20 crore, respectively, thus resulting in an EPS of Rs 9.4. For the nine-month period that ended in December 1998, sales and net profit stood at Rs 119.02 crore and Rs 28.55 crore, respectively.

The company benefits from the fact that it earns in dollars and the expenditure is in rupees, thus resulting in better profit margins. The company is under contract with ONGC, whereby its drilling rig, HITDRILL-1, is with the latter and the same is to end soon. The company has been on the look out for more rigs. HDL’s floating production unit, TAHARA, is said to be performing well and at present it is under contract with Hardy Exploration and Production. The company enjoys the benefits of strong parental support.

Considering its strong financials and good prospects, the scrip could provide good gains in the medium to long term. Thus, hold on to the scrip.

Reliance Ind

I am holder of Reliance Industries shares with Folio No. 64340107, certificate No 10715822. I was to receive bonus shares in 1997. Despite many reminders, I have not received the shares.

Vinod Kumar
Karnal

II

I am holder of 314 shares of Reliance Industries with LF. No 057156643. I have not received dividend for the period 1998-99 despite many reminders.

R.K Gupta
Phagwara

Pal Peugeot

I am holding debentures of Pal Peugeot Ltd with Folio No PPD-003896 and have been writing to Registrar, Karvy Consultants, 21, Road No 4, Street No 1, Banjara Hills, Hyderabad with copies to Pal Peugeot about the non-receipt of the interest. Now four instalments (1.7.97 to 30.6.99) of interest are due. Karvy Consultants coined reply is that they have forwarded the case to the company, but the Pal Peugeot is mum.

Narinder Mohan
Chandigarh

UTI

I am holder of Raj Lakshmi Unit Plan (II) Membership Advice No. 401950070001623, Unit Trust of India, Ludhiana. I applied for the change of address vide my application dated 12-11-98, followed by subsequent written reminders. I have not yet received any information from the U.T.I Ludhiana.

P.C Gupta
Manimajra

Reliance fund to be open-ended

MUMBAI, Sept 5 (PTI) — Reliance Growth Fund, due for redemption in October 2002, is being converted into an open-ended growth scheme from September 27, 1999.

The scheme, launched in September 1995 as a closed-ended equity scheme, has recorded a 20.42 per cent appreciation in its net asset value (NAV) as on March 31, RIL sources said.

To avail of the benefits accorded to the mutual fund sector in the Budget for 1999-2000, the open-ended scheme has two plans — dividend and growth, the sources said adding that the dividend plan would have a reinvestment option.

As subscription and redemption of units will be at the NAV-based prices on an ongoing basis, the fund has already opted for desisting on the Bombay Stock Exchange and accordingly, the exchange has suspended trading in the units from May 24.

Sikh Trust credit card launched

LONDON, Sept 5 (PTI) — The world’s first credit card, exclusively for followers of a specific religious denomination, the Sikh trust card, was launched here today.

Chairman of the Sikh Trust Giani Sarwan Singh said the card would be operational initially in Britain. It would be later extended to Canada, the USA and India.

The card has been jointly launched by Mastercard, the Bank of Ireland and the Sikh trust.

Mr Singh said the Bank of Ireland would give ten pound sterlings to the trust for every card sold, with some proceeds going to charities of the community.

New telecom corporation needed: CII

NEW DELHI, Sept 5 (PTI) — An apex chamber has said the Communication Ministry should set up a separate corporation for rapid growth of long distance telecom services (DLD), including creation of necessary infrastructure.

A task force set up by the CII has recommended setting up of this corporation simultaneously with corporatisation of DoT.

The DLD policy should be aimed at building necessary infrastructure throughout the country as an alternative to the existing DoT network with DLD services emphasising on building the infrastructure till January 1, 2003, the task force headed by D.M. Khanna said.

Long distance services should be viewed from three aspects — carriers carrier who would contribute to building infrastructure, service providers and resellers who would be leased circuit holders and buyers of time from service providers.

Trigent gets Rs 4 cr

MUMBAI, Sept 5 (PTI) — Bangalore-based software company, Trigent Software Ltd (TSL), has got venture capital funding to the tune of one million dollars (about Rs 4.3 crore) from city-based Marigold Capital Management Ltd (MCML).

With the funds coming in the form of equity, TSL plans to make an entry into the Japanese, West Asia and European markets, and consolidate its presence in the USA, TSL Chairman and Managing Director Dharat Khatau told PTI here today.

Inflation up
NEW DELHI, Sept 5 (PTI) — The inflation rate moved up by 0.11 percentage points to 1.67 per cent for the week ended August 21, following a sharp rise in the prices of edible oil and fuel. The annual inflation rate, based on Wholesale Price Index (WPI), rose during the week to 1.67 per cent compared to 1.56 per cent last week. It was, however, less than one-fourth of 8.39 per cent in the corresponding period last year.

Jindal V. Steel
NEW DELHI, Sept 5 (UNI) — ICICI Ltd, one of the financial institutions having a sizeable exposure to the Jindal Vijayanagar Steel Ltd, has agreed to change the period of amortisation for the troubled steel project. JVSL is one of many steel plants in the private sector facing liquidity problem. ICICI changed the amortisation period keeping its own interest in consideration since any adamant attitude on the part of the financial institutions could mean a death knell for the plant which in turn would mean a damaging impact on the bottomline of the the financial intermediary. The JVSL project is coming up at Bellary in Karnataka.

IDBI
NEW DELHI, Sept 5 (PTI) — In a major strategic move on the liability front, the IDBI has decided to raise Rs 500 crore through Mumbai Interbank Offered Rate (MIBOR) linked bonds to meet its short-term fund requirements. This is the first time a financial institution is issuing MIBOR-linked instruments in the country.

Investment down
BEIJING, Sept 5 (PTI) — Foreign investment to China has dwindled by a whopping 27 per cent in the first half of this year, affecting the fastest-developing country’s efforts to sustain a high economic growth.