|Saturday, May 13, 2000,
Industrial output posts 8 pc
UAE bans meat imports from 10
How rogue IT firms operate
Haryana local area tax
targets non-tax payers
Stay invested in soft
NEW DELHI, May 12 (PTI) Led by a remarkable recovery in the manufacturing sector, industrial production during 1999-2000 posted an 8 per cent growth as against 3.9 per cent recorded during the previous year.The manufacturing sector grew by a 9 per cent during April-March, 1999-2000, compared to only 4.3 per cent same period last year, according to quick estimates of the Index of Industrial Production (IIP) released by the Central Statistical Organisation (CSO) today.
Other sectors which attributed to higher industrial growth during last financial year were the electricity sector which grew at 6.6 per cent compared to 6.5 per cent in 1998-99 and the mining sector registering a growth rate of 0.6 per cent as against a negative 1.7 per cent.
For March 2000, the industrial production registered a growth rate of 8.6 per cent compared to 4.4 per cent in March 1999.
The manufacturing sector, which accounts for nearly four-fifths of the total weight of the IIP, grew by a whopping 9.6 per cent in March, 2000, as against 5.4 per cent last year.
Among the use-based category, the recovery was led by consumer durables and intermediate goods.
Consumer durables posted a growth rate of 12.2 per cent during last financial year as against 4.7 per cent in 1998-99. The sector during March grew at 6.7 per cent.
The consumer non-durables goods sector during 1999-2000 showed a growth rate of 4 per cent as against a meagre 1.8 per cent growth in 1998-99, the estimates said.
The sector during March, grew by a 6.5 per cent compared to only 1.7 per cent during the corresponding period 1999.
While the intermediate goods sector posted a growth of 15 per cent during April-March, 1999-2000 compared to only 5.9 per cent in the same period last year, the sector during March this year, grew by 19 per cent compared to 7.5 per cent in the same period last year.
The only sector in the use-based category which registered a fall in the growth rate was the capital goods sector. The sector during the last financial year grew at 4.8 per cent compared to growth of 11.8 per cent in 1998-99, the data said.
During March, 2000, the sector showed a negative 1.8 per cent growth compared to 11.8 per cent growth in the corresponding period last year.
The basic goods sector during 1999-2000 grew at the rate of 5.1 per cent compared to a meagre 1.4 per cent growth during the same period last year, while registering 4.7 per cent growth in March, 2000 compared to only 0.1 per cent growth in the same period last year.
DUBAI, May 12 (INS) The United Arab Emirates (UAE) has banned the import of meat from 10 Indian companies as they failed to meet the countrys health standards.The 10 companies from Delhi, Mumbai and Hyderabad have been banned from sending meat by the Secretariat General of UAE Municipalities, but news reports said the companies are trying to submit the proof of compliance to health standards to re-enter the market.
According to local newspapers, the Secretariat General of Municipalities regularly sends inspectors to check the health standards maintained by meat exporters to the UAE. Companies and abattoirs not complying with the specified regulations are banned from exporting their products. This time round the 10 Indian firms were found to be wanting and were therefore banned from exporting any meat to the UAE.
However, meat importers say the ban is not permanent and can be lifted once the companies improve their health and hygiene standards and get approval from the secretariat.
UAE imports 2,500 tonnes of frozen and chilled meat and meat products every month. Market sources said about 14 tonnes of meat is imported daily from India, Pakistan and Somalia. Of this 9-10 tonnes is imported from India and Delhis share is six tonnes. Most of the banned companies are from Mumbai, from where four tonnes of mutton and beef are imported by the UAE daily.
from Delhi cannot fully meet the demand in the UAE
because there are only two flights from Delhi to Dubai
whereas Mumbai has a lot of direct flights to
Dubai, a leading meat importer was quoted as
NEW DELHI, May 12 (PTI) A group of economists, including former Planning Commission member Arun Ghosh, today alleged that the Government was going ahead with disinvestment of Indian Petro Chemicals Ltd (IPCL) in such way to hand it over to Reliance Industries.
It does appear that the entire IPCL exercise is being conducted only to hand over IPCL to Reliance so that it can become a private monopoly. And that too at throwaway price, the economists under the banner Working Group on Disinvestment Issues told a press conference.
The group said there should be completely independent valuation of company shares to be divested and no interested party directly or indirectly should be involved in the process of valuation.
A valuation carried out by the group, based on replacement costs, shows that the shares of IPCL should be at least Rs 265. If we take into account that with 25 per cent share the partner will be handed over control, the share value, purely by normal commercial practice, should be not less than Rs 500.
The valuation of IPCL shares that has been done by the Government suggested that 25 per cent stakes in IPCL could be sold only at a share value of Rs 160.
Why financial companies
like Merill Lynch should be allowed to value assets of
public sectors undertakings as they can be broker later
in the sell-off deal, Prof CP Chandrashekhar from
Jawaharlal Nehru University said.
local area tax targets non-tax payers
CHANDIGARH, May 12 Will the recently imposed Local Area Development Tax (LADT) in Haryana negate the self-professed gains of the industrial policy announced with fanfare by the Chautala Government last year?
Industrialists in Haryana fear so. Their apprehension is that the 4 per cent tax on raw material consumed by them to manufacture various finished products would make their goods uncompetitive in the national market.
The rationale behind the imposition of LADT as given by official sources is that with the abolition of octroi, the civic bodies have been bereft of financial resources. LADT would cover those manufacturers who, despite using infrastructure of Haryana, do not contribute anything to the State kitty by way of taxes as they take their goods out of the State.
The Government says LADT will be used to help the civic bodies financially and its proceeds will be used for the development of various local areas.
Under the Local Area Development Tax Ordinance, the entire State has been virtually declared as local area because now an area falling in the jurisdiction of a zila parishad (corresponding to a revenue district) will be considered as a local area for the purposes of imposition of LADT.
Interestingly, octroi was chargeable only within the municipal limits and was collected by a civic body. LADT would go to the consolidated fund of the State.
The Senior Vice-President of the Haryana Chamber of Commerce and Industry, Dr N.C. Jain, says even on a conservative estimate the tax liability of a medium-level manufacturer would go up by at least Rs 1 lakh per annum.
The Excise and Taxation Commissioner, Haryana, Mr Raj Kumar, says LADT is not an additive tax. Any manufacturer who pays sales tax or central sales tax in Haryana can set off LADT liability against the ST or CST.
LADT would not be imposed on goods purchased within the State. He said apprehensions expressed by certain quarters in this regard were baseless. The State had also taken care of small manufacturers by exempting those manufacturers from LADT who imported goods less than Rs 10 lakh per annum from outside the State.
Similarly LADT would not be imposed on traders. Any unit exporting more than 75 per cent of its production and IT industry would also be exempt from LADT.
NEW DELHI, May 12 (IANS) There are about 100 firms, mainly NBFCs, that have changed their names to suggest they are in the field of the booming information technology sector even though they have little, if anything, to do with the IT business.
According to analysts, the modus operandi being adopted is simple. Before changing the name of the firm, the promoter of such a company will buy whatever floating stock is left in the market.
The new identity is then adopted, after which a few computers are bought and some technical staff hired to make the office appear as if it is in the IT business.
The next step is to set up an overseas branch in either tax havens like Mauritius or in duty-free ports like Dubai or Singapore.
Through illegal transactions, some money is subsequently transferred from the overseas office to the domestic firms account so as to show some software exports in the books.
This is then followed by spreading rumours in the market that the firm has received huge export orders. This is enough to send the stock prices of these listed companies soaring, giving ample opportunity to the promoters to offload their stocks at an undeservingly high price. The holder of these promoters may once again resort to a public offering.
The present IT
euphoria, which holds the potential of yet another scam,
needs to be stemmed immediately. Among others, the
quality, quantity, format and delivery of information
disclosure have to improve substantially, says
Prithvi Haldea, MD, Praxis Consulting.
NEW DELHI, May 12 (PTI) Kothari Pioneer Mutual Fund is optimistic about the infotech sector stocks and feels that at current levels, stocks in this sector look attractive.
With the infotech growth story intact and stock prices down by 25-50 per cent, the sector looks attractive at current levels, Chief Executive Vivek Reddy said in the Funds April-2000 performance report.
He said infotech companies continue to power ahead with good sales and profit growth and after the recent fall in the infotech stocks, the valuations are attractive.
There has been a drastic fall in the infotech stocks with most of the frontline scrips like Infosys, Satyam Computers, Wipro, NIIT, Mastek down by 40-50 per cent from their peak levelled in February this year.
BSE sensex was down by 31 per cent from the peak level of 6,165 touched on February 14 to 4,251 yesterday and S&P CNX Nifty down 25 per cent from a high of 1,744 to 1,304.55 yesterday.
In the last three months (Feb-April), Kotharis Infotech Fund NAV was down by 16.05 per cent to Rs 32.32 for the growth scheme and Rs 22.10 for the dividend scheme, while its new Internet Opportunities Fund provided negative returns of 11.84 per cent with NAV of Rs 8.64 at the end of April, since its inception on February 21, 2000 (at the peak of the market).
The fund has focussed only on fundamentally sound infotech companies and has taken corrective action when we have seen fundamentals deteriorate thereby affecting long term potential, the report said.
We believe that current portfolio has the right composition for achieving sustainable long-term returns and hence have not made major changes, Fund Manager R. Sukumar for Infotech Fund said.
On the overall market view, the report said that the sell-off in India has been broad-based though infotech/media stocks have been the hardest hit.
NEW DELHI, May 12 (PTI)
Parliament today passed the National Housing Bank
(Amendment) Bill increasing its authorised capital to Rs
350 crore with an enabling provision to further raise it
to Rs 2000 crore. The Bill also provides for offering
shareholding to financial institutions apart from RBI.
Other salient features of the amendment are entrusting
the bank with the responsibility to develop mortgage
market and establishing an Appellate Tribunal.
NEW DELHI, May 12 (PTI) The World Bank has suggested dismantling of state water supply boards and public health engineering departments (PHEDs) by separating service provision from regulatory mechanism in order to commercialise the water supply function.
Disaggregating existing state providers, involving the private sector in management of the commercialised entities and rationalisation of water tariff reflecting the cost of service provision should encompass water sector reforms, the Bank said in its report on water sector reforms in India.
The irrigation department should similarly be disaggregated by function, separating water planning and environmental management functions from service delivery and further disaggregating the service delivery entity into river basin units, the World Bank said.
The Government should provide technical assistance, create financial incentives and levers encouraging change and make targeted adjustments in the institutional structure and legislation, it said.
The Bank suggested establishment of meaningful water prices, requiring significant increases in prevalent water rates, for irrigation, urban and rural water supply reflecting at least the costs of service provision and charged volumetrically.
Tariff rationalisation is a pre-requisite for increasing financial flows to the sector. Tariffs should reflect costs and any subsidies should be explicit and well-targeted, it said.
Tariff levels should reflect efficient levels of service and costs of excess agency staff should not be included in the tariff rates, the World Bank said adding service providers should not simply be allowed to pass on their inefficiencies to consumers in the form of higher tariffs.
Stating that the current approach of top-down development of water resources and fragmented supply-oriented framework was responsible for water crisis, the Bank suggested that tariff increases should be undertaken periodically and should be indexed to inflation while also establishing specific targeted measures to protect the poor.
This could include life-line blocks and community-based credit systems to enable the poor to spread payments over time, it said.
The World Bank also suggested increasing of agricultural power tariffs and charging them volumetrically to establish incentives for groundwater and power conservation.
The Bank suggested removal of agricultural price and marketing distortions in commodity and input markets that currently encourage excessive water use and regional imbalances.
pollution taxes and other incentives, including `polluter
pays approaches and price structures, would
encourage adoption of water conservation, treatment,
reuse and pollution control practices, it said.
Monsanto to tie up with Markfed
CHANDIGARH, May 12 (TNS) A team of Monsanto, a multinational engaged in agriculture seed and pesticides business, will hold negotiations with Markfed for a tie-up for manufacturing of agro chemicals and supply of quality seeds of maize, soyabeen and cotton (gold white) and other crops approved by the Central Government.
Mr D.S. Bains, Managing Director of Markfed said here today that it would be final round of talks between Monsanto and Markfed as already initial discussion had been held in this connection in Mumbai. Markfed would involve PAU, Ludhiana before signing any agreement in this connection. Mr Bains said that only seeds of those high yielding varieties would be procured from Monsanto for distribution in Punjab which had been approved and cleared by the Union Government authorities concerned.
Pentamedia to float ADRs
CHENNAI, May 12 (PTI) Pentamedia at its general body meeting today decided to float $ 200 million ADRs or GDRs for its future acquisition plans. The permission from the shareholders is important as it will enable the company to approach the Ministry of Finance as and when any suitable offer comes forth.
Digital India branch in Europe
BANGALORE, May 12 (PTI) Digital India, has announced the registration of a new branch office in Europe, to be located in Central Geneva. A comprehensive presence in Europe has a high priority status in the companys overall corporate strategy to expand its global network and strengthen marketing reach, a company release said. Registered on April 29, this office comes on the heels of the establishment of the companys London branch, which marked the first step in its foray into the Pan-European market.
Bharti Tele to be listed overseas
BANGALORE, May 12 (PTI)
The over Rs 1,000 crore Bharti Group plans to
acquire one or two companies to touch a telecom
subscriber base of one million by the end of this fiscal,
even as it is set to for an overseas listing of Bharti
Tele-Ventures, a subsidiary of Bharti Telecom. We
are open to acquiring one or two companies, as we have
the resources and capacity, Chairman and Group
Managing Director of Bharti Enterprises, Sunil Bharti
Mittal, told reporters here. He said Bharti Tele-Ventures
would be listed overseas in this calendar year but the
stock exchange has not been finalised. The Group
projected a turnover of between Rs 1,400 crore and Rs
1,500 crore this financial year.
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