|Monday, January 24, 2000,
indirect tax system
104 join Maruti rally for women
Top CEO of the year
EMI, Warner to merge
Punjab sugar mills losses
touch 338 crore
LUDHIANA, Jan 23 There is need to review research and development in sugarcane, its milling management and policies of the Punjab and Union governments to save sugar industry from collapse.
These were the views expressed by certain expert members of the sugar recovery check committee constituted by the State Government while talking to this reporter here yesterday. The experts felt political considerations had resulted in higher sugarcane price at Rs 5 per quintal, thus putting additional burden on the sugar mills both in the cooperative and private sectors. Their accumulated losses are estimated at over Rs 338 crore.
Of the 21 sugar mills in the State, 14 are in the cooperative sector and seven in the private sector. It is learnt that the sugar mills in the cooperative sector incurred a loss of Rs 70 crore last year. The loss is likely to go up to Rs 100 crore this year.
A member of the sugar recovery check committee said that up to the seventies sugar recovery from sugarcane was less than 8.5 per cent. However, with the release of better sugarcane varieties, the average sugar recovery increased to 11 per cent, which also proved to be the ground for establishing more sugar mills in the State. With this the crushing capacity also increased.
Surprisingly, before 1983 when only 25 per cent of the total sugarcane production was utilised for extracting sugar, sugar recovery was maximum, but now when 60 per cent of sugarcane is used for the purpose, it has led to a decline in the quality of cane and lower recovery of sugar.
Sugar recovery now on an average hovers between 8.5 and 9.3 per cent primarily because the sops provided to farmers are economically lucrative, resulting in all sorts of cane (with top and trash) coming to the mills.
Another expert feels the losses can be minimised by increasing sugar recovery from cane, decreasing the cost of sugar production and efficient sale realisation. There is need for better sugarcane varieties with higher sugar content and resistant to pests and diseases, besides ensuring that sugarcane is crushed at the peak season level and there are minimum sugar losses from field to the mills and during processing.
Of the total cost of production of sugar, 60 per cent is the cost of sugarcane. As the price paid to farmers is according to the variety and not according to the actual sugar content, the sugar mills should ensure that only healthy sugarcane comes to them, the cost of material other than sugarcane too is minimised and the mills efficiency is increased.
Talking about the recent import of sugar from Pakistan, the experts said that it was a blunder. Any change in policy should not damage the sugarcane grower or the sugar industry in the long run. Proper estimates based on scientific studies should be prepared keeping in view the production of sugar in the near future before allowing its import, said an expert.
The experts also felt
that the levy price system was not taking into
consideration the efficient mills as uniform prices were
set for all. The subsidy on sugar for the public
distribution system (PDS) should be removed as it is
being borne by the sugar industry and ultimately by the
self-regulatory indirect tax system
CHANDIGARH, Jan 23 Reducing the excise duty rates to 5.10 & 16 per cent for merit, mean and demerit goods respectively apart from the super demerit rate of 20 per cent and nil duty rates against 8, 16 & 24 per cent has been suggested to the Union Finance Minister by the PHDCCI in its pre-Budget memorandum on indirect taxes.
The primary emphasis of the 15-point memorandum is to introduce a self-regulating record-based indirect tax system which is simple, transparent and assessee friendly while making tax evasion extremely difficult and costly.
Special excise duty on specified goods in the second schedule should be abolished because many items are extensively used by consumers and attract excise duty based on retail price.
Last budgets provision for extending SSI exemption to goods bearing the brand name of another manufacturer if the unit is located in the rural areas should be implemented. The PHDCCI has proposed extending this benefit to backward district, non-industry districts and growth centres identified by the Ministry of Industry.
One of the other procedural simplifications suggested is to allow duty payment on a monthly basis preferably by the 15th of the succeeding month instead of clearance of goods for every individual consignment. Appropriate safeguard for revenue realisation should be made while introducing such a procedure.
Welcoming the retail price-based excise duty assessment for a large number of goods identified under the packaged commodity rules, the chamber has urged the Finance Minister to allow realistic and liberal abatement margin because the present deduction permissible is inadequate.
A related problem experienced by trade and industry is on account of sale to institutions on the basis of special rates and not retail price printed on the package. To overcome the problem, the PHDCCI has suggested issue of notification for determining excise duty on the negotiated contract prices for institutional to the Railways, DGS & D besides defence canteens.
On Customs duty, the
Chamber states that levy of the lowest duty should be on
raw materials and highest for finished products. Also,
abolition of the 10 per cent surcharge on basic customs
duty imposed on a temporary basis in the Budget of last
year has been suggested.
Maruti rally for women
CHANDIGARH, Jan 23 Ms Kirandeep Sandhu was adjudged the overall winner of Maruti Udyogs car rally titled Womens Power Drive 2000 held here today. She bagged a cash award of Rs 15,000 along with a trophy.
Ms Kookie Bawa was the first runner-up and Dr Rana Singh was the second runner-up, both getting Rs 10,000 and Rs 5,000 respectively, besides trophies.
As many as 104 women turned up to participate in the car rally, flagged off by Mr Shashi Kapoor, Regional Manager, Maruti Udyog at Chandigarh Club.
The drive stretched to 67 km in and around the city. The driver along with her navigator and family members were given clues to reach various stops before returning to Chandigarh Club.
There were penalty points for a male driving the vehicle, neglecting traffic rules and for speeding. Weightage was given to safety considerations like the wearing of seat belts and proper usage of the rear view mirrors.
A quiz to test the participants knowledge of the latest Maruti additions was also held. The overall winner was selected on the basis of these criteria.
A dance competition held
for both Children and the participants drew an
enthusiastic response. The best singer, the best joke,
the best maintained car and the oldest participants and
on-the-spot story telling competition were the other
attractions. Prizes were given to the winners.
NEW DELHI, Jan 23 (UNI) Chairman and Managing Director of Punjab National Bank Rashid Jilani has proceeded on leave till his term expires on March 6 while the CBI is probing charges of financial irregularities against him.
This follow allegations that his functioning may hamper investigations.
Mr Devi Dayal, Special Secretary at the banking division of the Finance Ministry, told the Delhi High Court that Jilani went on a months leave from January 14 and is expected to prolong it.
He will not be functioning as PNB Chairman and Managing Director. Therefore the question of the CBIs investigations being hampered may not arise, Mr Dayal said in an affidavit submitted to a Division Bench comprising Justice Devinder Gupta and Justice S.K. Agarwal.
The court was hearing a PIL petition filed by advocate O.P. Saxena, President of the All-India Lawyers Forum for Civil Liberties.
The CBI had sought the Governments concurrence in March, 1997, for registering a regular case against Jilani following the allegations that he and other officers failed to protect the banks interests in the recovery of dues from Shree Shakti Mills Limited.
After objections by the Advisory Board on Bank Frauds (ABBF), set up by the RBI, the CBI decided to close the case in January, 1998. But following fresh complaints from various quarters, the CBI decided to examine the matter afresh last month.
Jilani is also accused
of irregularities in the sanction of short-term deposits
and bridge loan facilities to Willard India Limited and
Solarsons Industries Limited. An inquiry held by the RBI
held him accountable and the Central Vigilance Commission
(CVC) was informed accordingly.
PNB offices get ISO certificates
AMRITSAR, Jan 23 Mr K.R. Chabria, Executive Director of PNB, here yesterday, handed over certificates of ISO 9002 for quality services to the incumbents of six branches/administrative offices of the Punjab Zone.
The branches are The Mall, Patiala, IBB, Amritsar, Regional Office, Amritsar, Civil Lines, Jalandhar, Sector 17-C, Chandigarh and Rajpura township.
Talking to newsmen, he said PNB has introduced high-tech customer specific packages which include adoption of quality system, total branch automation, ATM, telebanking, remote access facility, SPMO, SWIFT, EFT, VSAT, extended service, dawn-to-dusk banking, express counters for issuance of DDs and Tatkal Suvidha Kandras.
Referring to profitability, he said PNB in Punjab has distinction of having no loss-making branch. All 487 branches of the zone are profit earners.
JALANDHAR, Jan 23 (PTI) Former Union Finance Minister Manmohan Singh today said Punjab must immediately initiate major steps like streamlining the state electricity board, transport corporation and attracting labour-intensive industry if it wants to pull itself out of the serious economic crisis.
Punjab Chief Minister Parkash Singh Badal has himself conceded time and again that the state of affairs of Punjabs economy is very bad. Little needs to be said any further, Dr Manmohan Singh told reporters when asked to comment on the fiscal crisis engulfing Punjab.
He said major and drastic steps were necessary to streamline the tax collection system and tax administration. The electricity board and the transport corporation also need to be streamlined, he said.
Dr Manmohan Singh, who is Leader of the Opposition in the Rajya Sabha, said small and marginal farmers in Punjab were facing hardships, but the State was doing precious little to ameliorate their lot.
There is immediate need for a big push towards setting up industrial and employment-oriented units. After all, there is a limit to what agriculture can do, he said.
Dr Manmohan Singh was here to attend the Shaheed Parivar Fund function organised by the Hind Samachar Group of Newspapers.
Dr Manmohan Singh said a premier institution like Punjab Agriculture University (PAU), responsible for bringing about Green Revolution and foodgrain self-sufficiency in the country, was now starved of funds and had no money for any meaningful serious research.
The PAU was spending bulk of funds on its employees salaries and must get funds and re-orient itself for bringing about a second Green Revolution, he said.
The former Union Finance Minister laid stress on setting up agro-based and export-oriented units. Punjab should have taken a lead in the information technology (IT) sector, which was a key sector for growth, he added.
Asked to comment on the Centres move to introduce uniform sales tax regime in the country to end unhealthy race between States adopting varying rates of tax on commodities, Dr Manmohan Singh said, The future lies in moving towards the value-added tax (VAT) system.
When asked how he rated
the handling of Punjabs economy by the Akali
Dal-BJP regime, Dr Manmohan Singh said, I
dont want to be dragged into Punjab politics,
but only to add, If we were there (in power) then
things would not have come to such a pass.
gets 120 crore from Centre
ROPAR, Jan 23 The Punjab Government has received Rs 120 crore from the Union Government as compensation for losses suffered by it during 1993-94 for the crisis disposal of paddy. The paddy was stored in mill campuses of state procurement agencies.
Announcing this here today, Mr Madan Mohan Mittal, Punjab Food and Supplies Minister, said that this brought relief to the rice millers as a number of arbitration cases were pending against them for recovery.
Mr Mittal said the Union Government had also allowed the millers to use bags of 95 kg instead of 50 kg.
Mr Mittal also appealed to the millers of the state to cooperate with the state procurement agencies to start milling in full swing as the Union Food Minister, Mr Shanta Kumar, had agreed to make space for the rice by lifting 10 lakh tonnes of foodgrain from Punjab in a month.
NEW DELHI, Jan 23 (PTI) The Government is considering a proposal to subsidise wheat exports to make it internationally competitive and reduce the bulging stocks of the grain in the state account.
We have come to the conclusion that countries which are into large scale exports of wheat are providing export subsidy ranging between 33 and 40 per cent and if we are to make our grain competitive in the international market we, too, will have to provide subsidy, Secretary, Department of Public Distribution M.D. Asthana told PTI.
He said extending
subsidy to exporters would not be in violation of any of
the WTO provisions and the Government only had to decide
whether it can afford to subsidise exports and if
so to what extent.
Top CEO of
NEW DELHI, Jan 23 Mr Yogendra Prasad, Chairman and Managing Director, NHPC, has been honoured by the Institution of Engineers for his contribution towards the promotion of hydro development in the country. Yogendra Prasad had been associated with the power sector for the past over three decades.
NEW DELHI, Jan 23 (PTI) Central Vigilance Commissioner N. Vittal, has asked the chambers of Commerce, especially CII, Assocham and FICCI, to come together and sign an anti-bribery convention and ensure that their members do not bribe. The proposal has drawn a blank so far.
In an interaction with PTI journalists, Vittal said industry should come together and emulate the 34 OECD countries which have signed such a convention.
The CVC termed obsolete laws and time-consuming bureaucratic procedures as breeding ground for corruption and suggested that there should be no law on the statute book for more than five to 10 years unless re-enacted after careful examination.
This will automatically ensure that obsolete laws do not clutter the system, he said observing that a committee appointed by the government had already suggested that out of 2,500 administrative laws, about 1300 should be scrapped.
Voicing concern over banking secrecy practices saying they helped wilful defaulters to escape punishment, Vittal was of the view that the names of rich people who were cheating the banks should be made public. The RBI has recently taken certain steps in this regard, he said.
LONDON, Jan 23 (Reuters) Britains EMI Group Plc and Time Warner Inc.s music arm are set to merge, creating the worlds biggest record company with a powerful foothold on the Internet, industry sources said today.
The tie-up between EMI and Warner music group will forge a combined group worth some $ 20 billion and make EMI a long standing target of takeover speculation a majority-owned unit of Time Warner.
by K.R. Wadhwaney
IA unions resent plan to reduce retirement age
MR.V.K. VERMA is the new Commercial Director of Air India. He has taken over from Shanu Mukerjee whose tenure of one months extension will officially end on January 31, 2000.
Mukerjees long cherished innings in the national career was virtually non-controversial. He did try for further extension but his efforts did not bear fruits.
For this post there were more than 10 candidates but Verma scraped through. So far based in Delhi as a Regional Director, he will now be stationed at Mumbai.
Delhi will continue to be an independent station. The cabin crew will continue to operate from Delhi instead of moving to Mumbai, as was feared some time ago. Most of the air hostesses have heaved a sign of relief as they have been firmly settled here. But there is a likelihood of down-grading the post of Regional Director. The decision on this matter will be taken within fortnight.
Resentment: Indian Airlines has been without any labour unrest. But several unions are up in arms against the managements decision to roll back the retirement age from 60 to 58 years. As Chairman-cum-Managing Director Anil Baijal, who himself is not affected by this roll back, is said to have prevailed upon few members of the board that reverting to 58 years will bring about sizeable saving in the airline.
Several unions and staff members have sought intervention of Mr Atal Behari Vajpayee. Raising many objections against the arbitrary decision, the unions have alleged that the CMD has taken this step when the quorum of the Board of Directors was incomplete.
It is a fact that the airline is heavily over-staffed. The reduction in age will be a cost-cutting exercise. But why the authorities had appointed 500 persons in various capacities during the last two years?
The airline is passing through a critical phase following the recent hijacking. The discontinuation of flights between India and Nepal has caused an enormous loss. It is not known when the flight will be resumed. If these are resumed, the Government of India would have to appoint security personnel at the Kathmandu air port where the security arrangements even after hijacking are below international standards.
If unions resort to go slow tactics on roll back exercise, it would cause damage to the reputation of the airline. This is the time to buy peace instead of annoying bona fide workers.
Another ticklish situation has arisen in the airlines. This pertains to a pilot. He is already working as an inspector in the Directorate General of Civil Aviation (DGCA). He is paid by the DGCA for the checks that he undertakes on airlines pilots. But the airlines Chairman has sent him on deputation as a pilot in the Alliance Air.
The CMDs decision
has been challenged by Alliance Air chief. Irked at
CMDs persistence, the Alliance Air chief submitted
his resignation some days ago. He may be persuaded to
continue till March 31 when he is scheduled to retire.
The New Bull
OUR grapevine was among the earliest to scent the trail of the New Bull. Seems the tax authorities have picked up this trail. Market circles in Mumbai are agog with rumours of a Rs 25 crore settlement between the New Bull and the tax authorities. Sounds mind-boggling, doesnt it?Kodak
Kodaks market penetration is increasing rapidly, or so the grapevine has it based on a recently tabled FII report. It seems that the figures for this quarter will lead to a re-evaluation of how this company is perceived. Watch out then, for a photo-finish to the financial year.
Amidst all the concentrated buying by some FIIs at this counter, some of the smartest operators at the BSE have used the upswing in its share-price to make a profitable exit pooh-poohing the FII perception about the bright prospects of this PSU. They retort-Ask anyone whos suffered MTNLs service!
Why are the shares of
this finance company rising and fairly rapidly at that?
This was a common question till a fortnight ago.Well, who
do you think is cashing in on the IPO mania through
financing at cut-throat rates? No prizes for guessing
I sent 200 shares of VNEL for exchange with Videocon International Ltd to Videocon Service Ltd on August 20, 1999 with Folio No. M0055122. Till to date shares of Videocon International Ltd have not been received by me despite many reminders.
I have purchased a Bajaj scooter on 30.12.98 vide Irw No. 1555 dated 30.12.98 and receipt No 348 of the same date from Ashoka Automobiles Hamirpur (HP). Inspite of repeated reminders ICICI bonds of Rs 25000 have not been made available.
We are joint shareholder of 100 shares of Suraj Diamonds (I) Ltd Our F. No. is 105739, Cert No 261830, Distinctive No: 33899664-763. We lost these shares in April/May 1999. We have been writing since then to the company for issue of duplicate shares.
I hold 100 debentures of Torrent Gujrat Biotech Ltd vide Folio No TGG 00036990 of Rs 55 each. They were due for partial redemption on 24-02-1999. I had written several reminders to the company but till date I have not received either the redemption warrant nor the interest.
Lloyds Finance Ltd., 104 AVG Bhawan, Connaught Place, New Delhi, has not paid after 31.3.1999 quarterly interest at 17 per cent P.A., on Deposit Receipt 397027817/2 dated 9.5.1997 of Rs 32,000 for 36 months, No response made to our four letters.
by J.C. Anand
Time to book profit
THE corporate sector has performed well and the third quarter results are even better than the market expected. According to one analysis based on the third quarter results of 210 companies, the net profit has increased by 63.5 per cent and sales by 20.6 per cent. The software companies have performed exceedingly well. Yet the stock market has ignored these results and Indices are even lower than what they read a fortnight back. Even during this fortnight, the market is expected to move around within a narrow range. No significant rise should be expected.
This is, however, in accord with what had been stated in this column last fortnight. The market has already moved up quite high and there is not much score for further rise till the Budget is presented to Parliament in February, 2000. It is also on the card that the Budget proposals are likely to be stiff and harsh and may even depress the stock market. Both Prime Minister and the Finance Minister have repeatedly declared that no soft options are left to the Government to buoy up the economy. The economy is in a bad shape and the government is anxious to place it on a relatively stable basis. Our economy is in danger of falling into a domestic debt trap.
The first step to salvage the economy has already been taken by cutting down interest rates by 1 per cent on public provident fund and postal deposits etc. This is a move in the right direction. The market does not expect any sops for the corporate sector except for some steps in the direction of economic liberalisation. At present FIIs are also keeping away from the market and their role in January is rather negative. It will be after the presentation of the Budget that the FIIs may get active.
Another reason for the rather stagnant stock market is that P/E ratios of some of the top companies is so high that any further rise in their market valuation is not possible for the present. Satyam has a P/E ratio of 133:5, Infosys has the P/F ratio of 178:3 and Wimco is 308.2. Almost 95 per cent of business done in these scrip is trading rather than investment buying. The traders book their profits as soon as the market prices of these scrips go up. Good results declared by these companies and their sustained profitability are watered down by excessive trading and fast profit-booking.
Non-Info sector companies have also reported excellent results. Reliance Industries has reported a 56 per cent rise in its net profit. Gujarat Ambujas net is up by 89 per cent. Essel Packaging has reported a rise of 40 per cent and Ciba Speciality Chemicals and Eveready have also reported good results. While ACC and Vanavil Dyes have reported poor results.
When one moves away from the stock market indices to individual corporate units, some companies have done very well. Vikas, WSP, Global Tele, Sterlite Industries have maintained their upward movement in the market. Indeed, Sterlite moved up from Rs 340 per share to Rs 544, in less than a week. Speciality Chemicals shares are maintaining their depressed market rating. BASF India has declined to Rs 122 and Colour Chem to Rs 1950. Clariant too has been stagnating around Rs 200 for its Rs 10 face value share. Long-term investment in these speciality chemical shares should be rewarding but the investor may have to wait at least a year or so.
There is need for
caution in the present market. Some profit-taking is
quite in order in some Info-sector shares. This sector is
expected to perform well but the present market prices
are so high that it is tempting to book partial profit in
these scripts and invest in the good companies in
non-Info sector industries. I expect the market to move
down in the coming weeks, and so profit booking appears
to be wise.
to 3.11 pc
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