Monday, August 14, 2000,
Chandigarh, India



Guidelines for opening up of STD sector
Government fixes one-time entry fee of Rs 100 crore
NEW DELHI, Aug 13 — In an effort to bring down long distance call charges, the government today announced guidelines for opening up the STD sector from August 15 with 49 per cent stake by foreign firms, a Rs 100 crore entry fee and 15 per cent revenue sharing. 

Shoppers hit by hoax e-mail 
Safeway has become the latest company to suffer an Internet security breach when customers were sent an e-mail appearing to come from the supermarket chain advising them to shop elsewhere. 

Rakhi on the Net
NEW DELHI, Aug 13 — Festivity is in the airs and the Net is not far behind in capturing the eyeballs of the surfers and creating a bond between netizens.

You’ve Got Mail
MUNICH, Aug 13 — Ever since film stars Tom Hanks and Meg Ryan fell in love via e-mail in the hit movie “You’ve Got Mail”, the general public has fallen in love with e-mail itself.

Car loans to be more expensive
MUMBAI, Aug 13 — Indian car-buyers are likely to find loans more expensive to procure, with leading automobile finance companies poised to increase interest rates.




Guidelines for opening up of STD sector
Government fixes one-time entry fee of Rs 100 crore

NEW DELHI, Aug 13 (PTI) — In an effort to bring down long distance call charges, the government today announced guidelines for opening up the STD sector from August 15 with 49 per cent stake by foreign firms, a Rs 100 crore entry fee and 15 per cent revenue sharing. The government has allowed a foreign equity up to 49 per cent, but stipulated that the foreign stake should not exceed 49 per cent during the entire licence period of 20 years, extendable by another 10 years, Communications Minister Ram Vilas Paswan told reporters today.

The Government has also fixed a one time entry fee of Rs 100 crore and allowed inter and intra-circle traffic of long distance calls.

The guidelines also stipulated Rs 400 crore should be given as bank guarantee which would be refunded on the basis of fulfilling roll out obligations such as full coverage of the circle including the uneconomic and remote areas.

The government has taken these decisions on the basis of the recommendations of TRAI after the high-power telecom commission had last week considered the recommendations.

A revenue share of 15 per cent has been fixed for the sector including a blanket 10 per cent on gross revenue, and 5 per cent for universal service obligations (USO).

Mr Paswan said the Department of Telecom would be the licensor in all these cases.

Elaborating on the equity pattern allowed in the sector, he said an equity cap of 49 per cent in the STD sector and for end-to-end bandwidth providers has been fixed.

However, infrastructure providers in dark fibre, right of way and duct space have been allowed to bring up to 100 per cent foreign equity. This sector has been opened without any restriction on the number of players and without entry fee.

Although there will be no restriction on the number of entrants and no entry fee for end-to-end bandwidth providers, a foreign equity cap at 49 per cent and an annual licence fee in the form of 15 per cent revenue share has been imposed.

To make only the serious players enter the field, the government has scheduled that the paid-up capital of the companies entering the sector should be Rs 250 crore and the net worth of the firm to the tune of Rs 2,500 crore.

The guidelines have been fixed in a month’s time after Prime Minister Atal Behari Vajpayee had announced on July 15 at the state IT Ministers conference that the sector would be opened for competition by August 15 without any ceiling on the number of players and ending the state monopoly.Top

Shoppers hit by hoax e-mail 

LONDON: Safeway has become the latest company to suffer an Internet security breach when customers were sent an e-mail appearing to come from the supermarket chain advising them to shop elsewhere. Up to 1,000 customers telephoned to complain on Saturday after a hacker appeared to have accessed a Safeway database containing details on 25,000 shoppers, The Sunday Times reported.

The hoax e-mail — signed “from the Safeway team” and headed with the company’s e-mail address — announced a 25 per cent price increase and told customers that if they were unhappy they should shop at rivals Tesco or Sainsbury, the newspaper said.

“The message does seem to have been sent out by our own computer system and we’re trying to track the source,” a Safeway spokesman told the newspaper. “We are investigating whether the computers may have been hacked from outside or whether there may be an internal source.”

The e-mail is the latest incident to expose Internet security failures in Britain. Last month Barclays was forced to shut down its online banking service when it discovered that some customers were getting access to other accounts. — ReutersTop


Rakhi on the Net
Tribune News Service

NEW DELHI, Aug 13 — Festivity is in the airs and the Net is not far behind in capturing the eyeballs of the surfers and creating a bond between netizens.

A number of sites dedicated to rakhi have come up to enable people to send rakshabandan, cards, wallpaper and gifts.

The site,, has features like history of rakhi. It mentions the stories associated with this festival, various rituals and customs associated with the festival and special recipes prepared during the festival.

Another site,, has a dedicated section for rakshabandhan for rakhi gifts.



You’ve Got Mail

MUNICH, Aug 13 (DPA) — Ever since film stars Tom Hanks and Meg Ryan fell in love via e-mail in the hit movie “You’ve Got Mail”, the general public has fallen in love with e-mail itself.

At once fast, informational, spontaneous, and serious, e-mail is used today to transmit everything from love letters to binding legal correspondence. E-mail, in short, has brought about a true renaissance in written communication around the world. But does that mean that traditional letters are a thing of the past?

“In our company, e-mail has replaced internal office mail and faxes,” says Peter Gottal of Siemens, based in Munich. “For sending information quickly, a traditional letter simply doesn’t cut it.”

Gottal, like others, believes we’re witnessing a cultural change that may impact written communication in general.

Ironically, during the rise in popularity of e-mail over the past few years, many post offices are reporting a surge in their traditional businesses.

“The post office is among the companies profiting most strongly from the advent of the Internet,” says Norbert Schaefer, a representative of the German Post Office. “You have to remember that the items ordered on-line are shipped by post offices, as are the bills.” The volume of advertisment mail is also constantly increasing.Top


Car loans to be more expensive
From Sai Prasan

MUMBAI, Aug 13 — Indian car-buyers are likely to find loans more expensive to procure, with leading automobile finance companies poised to increase interest rates.

Finance firms are toying with the idea of raising the interest rate on car loans following the RBI’s recent decision to hike the bank rate, the rate at which it lends to commercial banks, by one percentage point to 8 per cent.

ICICI Personal Financial Services, the automobile loan division of ICICI (formerly the Industrial Credit & Investment Corporation of India), will increase auto finance rates by half a percentage point within a fortnight, a company source told the Internet portal here today.

The RBI decision to raise the bank rate has been seen as the precursor of an uptrend in interest rates.

The company now charges interest of between 15.5 per cent and 16.5 per cent, depending on the automobile model for which a loan is sought.

ICICI’s auto car loan wing does business of Rs 850 million a month. The company’s decision will go into effect immediately after it is announced. The source explained that margins were low and costs high in the auto finance business. So auto finance companies have no option but to increase interest rates, he argued.

Apple Finance Assistant Vice-President Pramod Kuckian echoed the point. He said the margins at auto finance companies were by and large thin, leaving them no choice but to increase interest rates.

But other car finance companies like Kotak Primus, Citibank and Standard Chartered Bank are still mulling over an interest rate increase. A Kotak Primus executive confirmed that it was still discussing the matter.

Sources at car finance companies said the small and medium-sized financiers were waiting for the bigger companies to increase interest rates. Once one or two of them do so, the others would follow suit, they said.

The automobile industry has an estimated annual turnover of Rs 80 billion. Some Rs 55 billion in automobile sales are financed, according to some estimates. The top car finance companies include ICICI, Kotak Primus and Tata Finance which account for around 60 per cent of the financing business.

However, some car finance companies plan on absorbing the higher interest costs.

Tata Finance Deputy Manager (Marketing) Nobert Mascarenhas said his company could withstand the extra financial burden as it made a reasonable profit margin.

Moreover, the high interest rates on used cars would compensate for the all-round increase in interest rates, he added. — IANSTop


by K.R. Wadhwaney

No more Sahara for employees

SAHARA Airline is no longer a “parivar”. Cracks have appeared in the family, which is promoted by the “chit fund’ king, Mr Subrota Roy. The rift has surfaced because of appointment of an outsider in the airline.

For years, since liberalisation of skies, Mr Uttam Kumar Bose, a soft-spoken and competent official, had been conducting the functions of the airline as Chief Controller. Mr Bose’s “blues” began as Mr Parvez Damania stepped into the airline in a senior capacity.

Mr Bose has gone on record as saying that he “resigned from the group on most cordial terms”. But the public notice, issued by the airline, projects him as a “villain”. The notice says that “his services have been terminated for being involved in anti-organisational activities and irregularities. The airline Director Damania is also reported to have said Mr Bose was working for another company even while being a Sahara employee”.

A number of employees, particularly cock-pit crew and cabin crew, are not exactly happy with the functioning of the airline. They say the working conditions are not exactly as conducive as they ought to be.

The recent difference of opinion between Mr Damania and Mr Bose may cause further disharmony among several sections of the airline. As it is Jet Airways has already marched ahead of Sahara which is currently flying much lower than what it was two or three years ago.

Quite a few senior Sahara staff hold the view that there was no need to issue a “public notice” since Bose had already resigned. “The issuance of such a notice has brought a blot on the airline”.

Trade wings: Mr Avinash Anand, one of the most seasoned operators in travel trade, has taken over as Managing Director (tours) of the Trade-Wings Tours.

When Mr Anand joined Sita World Travel (India) in 1973, he was sent to open their first overseas office in New York. During his tenure there, he saw Sita’s turnover increase from $ 10,000 to $ 2 million.

Mr Anand resigned from Sita after working for 27 years. When Kuoni Travel bought Sita, Mr Anand was appointed as Adviser. Always in mainstream of tourism and travel trade, he chose to join Trade-Wings, one of the leading tour operators in the country.Top


Melstar set for rebound

STARTING as usual from where we left off last week, when we had forecasted “Again, we re-iterate, once the uncertainty factor is discounted, domestic mutual funds and institutional investors will find value for money especially in the ICE sector that continues to be where all the action, and more importantly, the growth potential lies.”

The resurgence witnessed on Tuesday after a long drought in the market was partly on account of the same and partly perhaps on account of settlement closing considerations at the NSE. Yet, its too early to get out the bugles as the market continues to remain in uncertain terrain.

The remarkable resurgence of Infosys Technologies which led the resurgence on Tuesday has brought considerable cheer to a beleaguered market.

Traders can thus again strike while the iron is hot and those with a bullish temperament can consider long positions at the counters of Wipro at Rs 2319 (square up at Rs 2585) and Mastek at Rs 1722 (square up to Rs 1809). Bear operators could consider taking up short positions at the counters of ITC at Rs 789 (cover up at Rs 751) and Reliance at Rs 341 (cover up at Rs 322).

The dark horse pick of this week is Melstar Infotech whose share price appears set for a rebound given its sound fundamentals. Finally, the optimal strategy for this week is an extension of the last week — continue buying selectively.Top


US women not very keen on cybersex
From Steve James

NEW YORK: More men than women shop online. Two-thirds of women believe cybersex is cheating, and many older surfers are using e-mail to cut phone bills, a major survey on US Internet habits has said.

The results of the surveys by the respected Harris Market Research Organisation and by Online Pollsters Media Metrix and Jupiter Communications, give a vivid snapshot of how Americans use the Internet now it has moved beyond the novelty stage to become part of many people’s lives.

An estimated 76 million Americans are active Internet users, while 135 million people enjoy Net access through schools, libraries, and shared facilities.

“What it points to is that those who came to the Internet later view it with a more practical eye,” said Ron Bel Bruno, Senior Editor of Yahoo Internet Life Magazine, which is publishing the Harris Poll in its September edition.

“We who came earlier were fascinated by the technical aspects, but they (new comers) are saying “what can it do for my life or my budget? I’m not interested in games and shooting people with little guns, I want to improve my life.”

In the survey, conducted by Harris Interactive via the Harris Poll Online and made available to Reuters on Friday, 2,565 US Internet users answered a variety of questions from June 23-27, 2000. The poll has a 2 per cent margin of error.

Bel Bruno said one of the most fascinating findings was that, far from the image of Internet surfing as an impersonal and solitary activity, the survey showed it is actually helping people reach out.

Seventy-six per cent of respondents said e-mail has put them in better touch with friends and family, while a staggering 87 per cent of “wired” women over 55 are keeping in touch online.

“People are hanging up their phones,” said Bel Bruno, pointing to the finding that 68 per cent of respondents say using e-mail or instant messaging has reduced their long-distance phone bill. An exceptionally high segment (81 per cent) of women over 55 benefit most from these savings.

Other findings:

  • On sex: Fifty per cent of respondents believe that having cybersex is synonymous with infidelity — 60 per cent of women, 41 per cent of men.
  • On politics: Thirtytwo per cent say the net will help them in the November Presidential elections. The effect will be greater on men (40 per cent) than women (24 per cent).
  • On shopping: Seventyone per cent of men have made a purchase online, while 58 per cent of women have done so. Young males, people with at least a bachelor’s degree, and people who earn more than 75,000 are the most likely web shoppers. — ReutersTop


by R.N. Lakhotia

Q: I had taken a loan of Rs. 2,50,000 from my employer in the year 1991 and repayment of its principal amount had started in the same year. I had not claimed refund of income tax paid against the interest amount of Rs 5,000 when the interest amount for this year was Rs 28,450. In the latter years I had been claiming refund against the accrued yearly interests which ranged between Rs 5,000 to 30,000 as per the limit for self occupied house.

Payments against the principal amount have been completed in the year 1999 and from 2000 to 2003 I shall pay the interest installments. Total accrued interest during the years 1991-92 to 1999-2000 is Rs 1,15,300 and no further addition to this will be made. So far, I have claimed the refund of income tax against Rs 75,000. So, kindly provide the following clarifications.

1. Will the interest amount of Rs. 28,500 be carried forward with the accrued interest of the succeeding years to avail its refund in the year 2000-2001 when I am paying the interest installments and no more interest is being added to the total accrued interest.

2. Am I eligible to claim the refund of income tax for an interest amount of Rs 30,000 against the remaining interest amount of Rs 40,300.

3. Can I claim refund of the unabsorbed losses due to the income tax payments against interest during the years 1991-92 to 1999-2000 u/s 71-B by filing return in the year 2000-2001.

— S.K. Kapoor, Mandi (HP)

Ans: The deduction in respect of payment of interest on housing loan is allowed as a deduction on yearly basis. Hence, the deduction which will correctly be allowed to you would be the interest accruing for a particular assessment year. It is not relevant whether you have actually paid the interest for that year during the year or not. Therefore, please claim deduction from your income on account of interest on loan only to the extent of interest on loan accrued during the year whether paid or not paid.

Q: Is income arising from investment of gratuity, provident fund and leave encashment received from a semi-government department fully exempt from income-tax?

— B.S. Sain, Hoshiarpur

Ans: The income arising from investment on deposits made by an employee of Central Government or State Government or public sector company are exempted in respect of the money deposited under the deposit scheme for retiring employees. You have to strictly find out whether your semi-Government department falls within the purview of the definition as contained in section 10 (15) (iv) (i).

Q: I have an income of Rs 1,00,000, the tax comes out to Rs 9,000+Rs 900 surcharge @ 10% (i) To save this tax whether I have to invest Rs 45,000 or Rs 49,500. (ii) I have three PPF a/cs, one in my own name and two in the name of minor sons whether I can claim rebate u/s 88 by depositing in all these a/cs.

— Inder Paul Singla, Tapa

Ans: The calculation of surcharge would be done after deducting from the gross amount of tax payable the permissible tax rebate on maximum sum of Rs 60,000 in respect of investment made by you in public provident fund in your name as well as in the name of your two sons.Top



From Byas Anand

NEW DELHI: Evergreen churner of blockbusters Yash Chopra, promoter of Yash Raj Films, is directing his way into the corporate world by setting up a hi-tech shooting studio in the cine capital Mumbai.

The director, the man behind poetic love stories such has Kabhie Kabhie, Silsila, Lamhe, Chandni and Dil to Pagal Hai, is planning to initiate talks with the leading names in the business across the globe for setting up the venture, Mr Yash Chopra told UNI.

Currently busy with the post-production activities of his next release ‘Mohabbatein’ starring Amitabh Bachchan, Shah Rukh Khan and Aishwarya Rai, Mr Chopra said the first step towards the venture is likely only after Divali, when the new film is lined up for release.

When asked if he was planning an initial public offering (IPO) for his company Yash Raj Films, he said, “I have not lined up anything. I am currently busy with my film”.

He is also working towards increasing the frequency of his new releases. “I am now looking at making at least one or two movies a year”.

Mr Chopra, who is also known for the hard-hitting social and action movies like Dhool Ka Phool, Waqt, Deewar, Kala Pathhar, Trishul and Darr, is the latest name in the film industry to join the corporate world.

Salman Khan

Salman Khan, who has already launched an entertainment-cum-event management company, is also reportedly planning to invest in a new post-production studio, replete with all the facilities. The studio is said to have a preview theatre, fancy equipment, and latest dubbing and recording facilities.

Bollywood action hero Sunil Shetty had also announced plans to foray into the infotech world by floating an entertainment and media dotcom venture.

Besides, he is planning to launch an initial public offering for his chain of departmental stores — Mischief.

Sunil has already initiated talks with around 20-25 companies from Britain and Silicon Valley for finalising the modalities of the IT venture.

Ajay Devgan

Recently, Ajay Devgan and Kajol had announced a Rs 2.5 crore float for Devgan Entertainment and Software Limited (DESL) at Rs 10 each. The post issue capital will be Rs 10 crore with the promoters holding a 75 per cent stake. The proceeds of the issue would be used to fund the company’s Internet and portal ventures.

DESL plans to launch an exclusive portal on Indian entertainment which will give exhaustive information about the country’s entertainment industry. It will educate surfers on the history, terminology, films, artistes, producers, directors, technicians and places of entertainment. The portal will also enable B2B transactions for people interested in the movie industry.

Subhash Ghai and Dheeraj Kumar have also announced mega IPOs for their respective production ventures — Mukta Arts and Creative Eye.

Creative Eye had also sought foreign participation for setting up modern post-production studio and production of mega TV serials, involving large working capital, for Indian as well as international market. The proposal, cleared by the Foreign Investment Promotion Board (FIPB), envisaged initial foreign investment of about Rs 5.14 crore. — UNITop


by J.C. Anand

The game is now played by traders only

DURING last week’s trading, in spite of many ups and downs, the market indices closed to the previous week’s closing. The Sensex climbed up by 115 points on a day’s trading but all these gains were eroded in the next two days trading.

The stock market game is, at present, being played by traders, with little part from the long-term investors. Mutual Funds and institutions are relatively quiet. FIIs made some purchases in a day’s trading but became inactive for the rest of the week.

It has been estimated that during last financial year, delivery-based business constituted only 15 to 18 per cent of the entire stock exchange business. It appears that during the current year, it may dwindle to a mere 8 to 10 per cent. But real gains, as it has been seen, are made by long-term investors who rely on their own, rather than borrowed funds.

The stock market prices of many, of the blue-chip vintage, have gone so low that a long-term investor can pick them up for future and handsome gains. Colour-Chem is one such scrip which is quoted at present at a market rate which has been the lowest for last 10 years. It is a speciality chemicals share belonging to the Clariant group. The company is also likely to be merged in Clariant India in the next two years time.

Colour-Chem has an equity capital of Rs 1,165 lakh and a book value of Rs 1,189 for its Rs 100 face value share. It had an EPS of Rs 181.5 for its annual results for the year ended March 31, 2000. It declared a dividend of 65 per cent. Its first quarter results this year were below expectation but it is likely to report good results during its accounting year ended March 31, 2001. The scrip is quoting in Rs 985-900 range. It is a safe and rewarding long-term investment.

The company manufactures dyes, speciality chemicals and intermediates for pesticides and additive products for the plastic industry. It is also a bonus candidate. It also exports many of its products to the Clariant International.

Two other companies, Clariant India and Ciba Speciality, are also quoting at low market prices. These companies are also manufacturing speciality chemicals. In case the market prices of these companies go down further, they may be picked up.

Vardhman Spinning is quoting around Rs 46 or so in the market and has good management and fundamentals. It declared a 42 per cent dividend for its financial year ended March 31, 2000. Even though, the cotton prices are high this year, the company is expected to maintain its profitability. Its first quarter results are also satisfactory. The same applies to Mahavir Spinning belonging to the same management.

Rallis India is quoting around Rs 62 or so and it appears to me to be a good pick up. Its first quarter results are not very satisfactory yet because of good rain, the company is expected to maintain its profitability. The company has a book value of Rs 114 and declared dividend of 60 per cent for the year ended March 31, 2000. It had an EPS of a little over Rs 20.

Sterlite Industries is still under the shadow of the report that it has backtracked in its tender to the government for one the fibre-cable item. Its market price has drifted from Rs 900 to Rs 690 after touching Rs 650 in trading. It appears to be a good long-term investment for it has been calculated that its possible loss in bad tendering would not be more than Rs 50 million. This is a very minor amount considering the high profitability and status of the company.

There are also unconfirmed but reliable reports that Vikas WSP’s account are alright and charges against it have no substance. The company too has reaffirmed the validity of their audited accounts in interview on the CNBC and ZEE cables.


  • With steel prices firming up, Tisco will be a major beneficiary, a well-known fund adviser has recommended accumulation its shares with a long-term perspective.
  • Watch the price movements at the Essel Packaging counter, which could witness hectic activity in the coming weeks.
  • While other infotech stocks remained weak, Sonata Software was steady on the back of some very positive announcements, comments an eminent researcher.
  • A fund manager is reportedly very bullish at the ICICI counter and believes that it has potential to perform well in the long-term.
  • Many competent players have recommended Reckitt and Coleman in these volatile conditions.
  • Book profit at the Hero Honda counter, which despite declaring good results has come under selling pressure after a moderate rally in the past few trading sessions.
  • In the EMCG sector Nestle tops the list of priorities of many players, informs a market researcher.
  • Government’s decision to put an end to the monopolistic hold of VSNL in the long distance telephony segment saw the stock come under huge selling pressure and a renowned punter is of the view that it will continue to remain depressed for some more time.
  • Sell NIIT, which has disappointed market participants with its lacklustre performance.
  • Market operators are confused about the movements at the BSES counter, in a recent development UTI has refused to avail Reliance’s open offer.
  • Old economy stocks like SBI have once again caught investor fancy; report a well-known market analyst.
  • Market participants are hoping for a quick revival in sentiment at the Satyam Computers counter, informed a Mumbai-based broker.Top


Inflation rises
NEW DELHI, Aug 13 (PTI) — The annual rate of inflation based on the WPI continued to rise and stood at 6.40 per cent during the week ended July 29 as against 6.26 per cent in the previous week. The rate was 2.20 per cent in the corresponding week last year. The inflation rate has been high compared to last year as state-controlled prices of products like petroleum have gone up sharply.

Wipro babies
NEW DELHI, Aug 13 (TNS) — Six millennium babies have been selected by Wipro from across the country and given an educational bond of Rs 1 lakh each, citation and gift hamper. The bond money will be managed for a decade by the ICICI and the accrued amount will be given to the parents for the education of these children.

Bank loans
— Mr K.S. Janjua, Financial Commissioner, Punjab, inaugurated the 84th branch of the PADB at Mahilpur. Later he inaugurated the new building of Central Co-operative Bank at Dehana village. Mr Janjua said till 1999-2000 PADB’s have disbursed loans worth Rs 2,700 crore.


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