Monday, August 28, 2000,
Chandigarh, India


Film actress Twinkle Khanna at a garment showroom after its inauguration by her in New Delhi on Sunday. — PTI photo
Film actress Twinkle Khanna at a garment showroom after its inauguration by her in New Delhi on Sunday. — PTI photo

Package for industry in J&K on anvil
NEW DELHI, Aug 27 — An industrial package for Jammu and Kashmir is on the anvil as the Union Commerce and Industry Ministry has chalked out a proposal addressing the special requirements and potential of the state.

15 per cent IA fare hike on cards
MUMBAI, Aug 27 — Indian Airlines may consider a fare hike at its board meeting to be held in Delhi on August 29.
“The fare hike is not listed on the agenda but it could come up for discussion. No methodology has been worked out but it could be pegged at 15 per cent”, an IA official said.

BSE sensex likely to face resistance at 4600 level
MUMBAI, Aug 26 - The blue-chip index on the BSE is expected to face resistance around the 4600-point level as the domestic operators are waiting for the market to go higher before booking profit in heavyweight counters in the old economy sector.

Nine-month old Chace Pugh of Carlton, Ga, stares at UGA VI, the Georgia macot, while having their picture taken at the annual Georgia Picture Day in Stegeman Colisuem in Athens on Saturday — AP
Nine-month old Chace Pugh of Carlton, Ga, stares at UGA VI, the Georgia mascot, while having their picture taken at the annual Georgia Picture Day in Stegeman Colisuem in Athens on Saturday — AP photo





Package for industry in J&K on anvil
From Sumir Kaul 

NEW DELHI, Aug 27 — An industrial package for Jammu and Kashmir is on the anvil as the Union Commerce and Industry Ministry has chalked out a proposal addressing the special requirements and potential of the state.

Highly-placed sources in the ministry said the new package, which would be sent to the Union Finance Ministry soon, would give major thrust to areas like electronics, software and food processing industry.

The sources said besides this, forest-based industry, minor forest produce and medicinal herbs and plants are also likely to be covered by the package.

The package, which was discussed by Union Commerce and Industries Minister Murasoli Maran and Chief Minister of Jammu and Kashmir Farooq Abdullah earlier this week, will also try to give boost to handicrafts and handlooms of Kashmir and gems and jewellery of the Ladakh region.

The sources said special assistance for food processing parks and electronic and software parks is envisaged under the package.

Special assistance for growth centres and export promotion industrial parks has also been mentioned in the proposals.

The sources said the ministry would be seeking help from the Union Finance Ministry for exemption of excise duty and special assistance from financial institutes and banks for setting up projects in the state.

The Commerce and Industries Ministry has constituted a committee to suggest ways and means to boost exports from the state in a bid to rebuild the economy of Jammu and Kashmir ravaged by militancy.

The committee set up by Minister of State for Commerce and Industries Omar Abdullah is an effort by the Centre to bring the derailed economy of the state back on the track besides providing more employment opportunities to youth of the state.

The committee, which is headed by the Economic Adviser of the ministry, has members from the Commerce Department, the World Trade Organisation cell in the ministry, the small scale industries, the Textile Ministry (including horticulture and handicrafts), FICCI, CII, Assocham and the Software and Electronics Export Committee.

The committee has been asked to submit its report within three months to the ministry suggesting ways to boost the exports of the existing products, the sources said.

The sources said the Indian Institute of Foreign Trade (IIFT) would also hold discussions with Kashmir University and Jammu University to start a course in international trade for the students of the state.

The recommendations of the commitee would form the basis for the second part of the industrial package for the state from the Centre. — PTITop


15 per cent IA fare hike on cards

MUMBAI, Aug 27 (PTI) — Indian Airlines (IA) may consider a fare hike at its board meeting to be held in Delhi on August 29.

“The fare hike is not listed on the agenda but it could come up for discussion. No methodology has been worked out but it could be pegged at 15 per cent”, an IA official said.

After the crash of an Alliance Air Boeing 737-200 at Patna, “things have not been so good”, with a fall in load factor as well as rise in costs of aviation turbine fuel since April 2000, he added.

In July alone the airline is estimated to have suffered a loss of Rs 30 crore, while the fuel bill alone was up by Rs 10.5 crore per month.

Private airlines like Jet Airways and Sahara Airline are waiting for IA to decide on the fare hike.

The board is also to discuss the purchase of three of Air India’s Airbus A-300 B-4 aircraft which have been put up for sale as well as to dry lease five aircraft - three Boeing D-737 200 for Alliance Air and two A-320 for IA, the official said.

The airline is trying to negotiate for the 737s, which are 12 years old, for induction over a two-year period.Top


BSE sensex likely to face resistance at 4600 level

MUMBAI, Aug 26 - The blue-chip index on the BSE is expected to face resistance around the 4600-point level as the domestic operators are waiting for the market to go higher before booking profit in heavyweight counters in the old economy sector.

“The level of 4600 points will act as a major resistance in view of the

further depreciation in the value of the rupee and the possibility of an oil price hike in the country,” a stock market analyst said.

“The technology counters, which staged smart rally in the week will, however, not see major sell off as the new economy companies are not sensitive to an oil price hike or rupee depreciation,” the analyst said.

The benchmark 30-share sensitive index or Sensex opened the week on a positive note and moved in a closed range. It finally closed at 4,416.86, registering a gain of 69.82 points or 1.6 per cent over its previous week’s close.

The market opened the week with a bang and thereafter the index went in a range bound movement following speculation of an oil price hike in the domestic market and further weakening of the rupee against the dollar.

“The weakening of the rupee pushed up the software counters on hopes that it will improve the IT companies bottomline since most of their earnings are in foreign exchange,” the analyst told IANS.

The operators, however, rushed to cover up their positions in old economy stocks as companies in the sector are likely to be hit by the appreciation in the value of the dollar.

The rupee continued to remain volatile for the better part of the week as the deadline, set by the RBI, for exporters to convert half of their export earner’s foreign currency accounts balances into rupees expired on Wednesday.

Forex dealers said though the forex market has witnessed conversions of $850 million as a result of the RBI directive, the dollar supply in the market has not increased commensurate with the conversions.

“The effect of the RBI instructions on the rupee has been negligible and there continues to be shortage of dollar in the market which may trigger panic buying in the coming days,” a forex dealer with a nationalised bank said.

The rupee closed the week firm at 45.85 against it previous week’s close of 45.79 per dollar.

FIIs, meanwhile, continued to pump in investment in the market all through the week, encouraging the domestic operators to enlarge their portfolios. The net investments by the foreign funds Rs 15.72 billion till Thursday.

The stocks in the software sector witnessed a good increase in the value after several weeks of downtrend. — IANSTop


From Ashok Kumar in Mumbai

Keep eye on P/E ratio of IT scrips

India’s woes of yesterday are turning into its joys of today. In the rapidly changing ‘New Economy’, driven as it is by the Information Technology Revolution the legacy of the British rule — the English language has given Indians the cutting edge in the global software market. Similarly, the population explosion which remains problematic even as of date, has translated into a higher probability of much required skilled IT manpower emerging. There are other such instances too, but the really facing us today is — what are the kind of services that India has to offer the world on the IT front?

The advances in information sciences has resulted in outsourcing of services, which has created in its wake a new segment called IT enabled services. The adjective IT highlights the fact that IT infrastructure is the key to its growth. The entire range of IT enabled services vary from pure and simple data entry to customer interaction,which is complex and requires intelligence. The key drivers of IT enabled services are outsourcing and outlocation. Not having any pretentions of being any more IT savvy than what the nature of my work dictates me to be, I picked up the telephone and rang Mr Arora, currently the Managing Director of Melstar Information Technologies Limited and formerly with IBM.

Mr Arora very patiently explained to me that outsourcing means that some functions can be done more economically externally. Given the advances made in technology, especially information sciences, the world has shrunk. Outsourcing is the term used for obtaining services from another organisation (or third party). Outsourcing has become a large market; currently it amounts to over $ 100 billion in value. It has resulted in a big business opportunity because companies can now outsource service requirements using technology and infrastructure to low cost centres. IT enabled services help companies to support information requirements, both internally and externally with the help of computers and telecom networks.

Outlocation, on the other hand, is the term used for obtaining services outside the national borders of a company. Outlocation helps companies to lower costs, take advantage of the global 24-hour clock, find the most optimum global talent, and achieve economies of scale by concentrating resources. Finally, the growth of the Web is stimulating the growth of IT-enabled services by allowing companies to centralise services and/or operations at the globally most optimal location while providing access to customers anywhere in the world. Providing services through the Web is also significantly reducing transaction costs. India is best positioned to offer competitive cross-border IT enabled services and enterprise IT solutions, scoring on multiple parameters.

A repeat of what happened in the first few months of this year. Furthermore, even with the topline stocks, ensure that you are getting value for money when you invest in these stocks. For starters, keep an eye on their P/E ratios!Top


Infosys, Satyam good only for traders

THE small investors, as a class, find themselves in a difficult situation, not knowing where to invest for safe and good return for their hard-earned money. This particularly applies to those who are either on the verge of retirement or have actually retired. The small investors may be classified into two categories. The investors who are not interested in the stock market and trust only the banks or the mutual funds or the debentures floated by the companies full in the first category. Second category stands for those small investors who are interested in long-term investment in the stock market. Both categories find themselves in the dilemma.

Those who prefer investment in the fixed deposits of banks or companies feel helpless. The banks offer only 9 to 11 per cent return for fixed deposits depending on the length of the period. When the inflation rate is about 7 per cent, and the interest accruing from the fixed deposits is exempt from income tax only up to Rs 12000 under Section 80 L, the investor’s funds get continuously eroded.

Those who invest in company fixed deposits or debentures have even greater reason to feel nervous. In a lot of cases, the deposits lack safety. A long delay is also caused in many cases for the return of the invested capital on the maturity of the fixed deposit. In the case of debentures, usually the market price of the debentures gets depreciated by 20 to 25 per cent. There is no income tax relief under Section 80L for the interest accruing from the company fixed deposits and debentures.

Those who prefer to invest in the mutual fund schemes are not in a much better position. As the recent experience shows, the investor is never sure when a mutual fund reneges on its schemes. The UTI, for instance, tried its best to deduct income tax from the monthly income schemes which had been assured income tax free return to the investors. Only when SEBI put its foot down on the UTI proposal, the UTI was prevented from going back on its obligations to the monthly income schemes holders who had invested some three to four years back.

Recently, the UTI has terminated its Rajlakshmi Unit Scheme 92 before it was to run its declared closing period. The scheme had been floated in 1992 for infant female children. Under the scheme, the infant in whose name, say 600 units of Rs 100 were invested in 1992 was to get Rs 1,26,000 in 2012. Now the UTI has terminated the scheme and has offered the unit-holders to convert the terminal value of the scheme as investment in children’s College-and Career Fund or in any other scheme of the UTI.

This is a volt face on the part of the UTI and its breach of assured word with the investors in the scheme. This also reflects on the credibility of the UTI as a mutual fund. It will be wise for the UTI management to reconsider their decision in respect of the termination of the scheme.

There are at least two cases where the sponsoring mutual funds honoured their word with the investors even when they will have to suffer heavy losses. The first case is that of BOI Double 2 plus (1990) and the second is that of CAN Bonus Scheme. But the UTI has its own ethics.

The second category of small investors face a different kind of dilemma. The small investor does not find good investment proposition in the stock market which could bring him good dividend return with some prospect of appreciation. There are, no doubt some shares like Canfin Homes and Herdilla Chemicals and GNFC which provide for more than 10 per cent tax- free return but the old economy shares are under such cloud that no one wants to invest in such shares.

Investment in the new economy shares is equally problematic. No doubt that the growth rate of the new economy shares is very high but these shares have a very high P/E ratio and are quoting at rates which make them beyond the capacity of small investors as long-term investments. Rs 5 face value share of Infosys is quoting around Rs 8200 and has P/E ratio of 148.6 Satyam’s Rs 2 face value share is quoting around Rs 559 and has a P/E ratio of 19.9. The speculative frenzy (or one may call “madness”) is now over, and no one expects these shares to attain the old heights. These shares are good for trading and not as long-term investments.



by K.R. Wadhwaney

6 new aircraft on Gulf routes soon

AIR India will shortly augment its fleet by procuring six dry-lease A-310 aircract. These aircraft will largely be deployed on the Gulf routes from December this year. The traffic on these routes is heavy and the national carrier can increase its revenue considerably before this financial year ends on March 31, 2001.

The tenders with technical details and financial bids have already been received by AI which, after undertaking in-house study, will buy the aircraft.

Before the new aircraft are pressed into service, they will be tried by AI’s engineers. AI officials are optimistic that deployment of additional fleet will help the carrier to take a positive step forward in the cycle of turn-around.

Airline’s proposal has already been approved by the board. Had the board acted about a year earlier, the airline would have been on a firmer road than it has been.

While emphasising the need for customer care, airline Chairman Ravindra Gupta allayed fears on privatisation which would not lead to any indiscriminate retrenchment.

The airline’s Managing Director Michael Mascarenhas said the carrier, with a small and ageing fleet, could not withstand competition without a programme of fleet expansion and upgradation of its assets.

With a view to boosting morale of the jawans at the Line of Control (LoC) on the Kashmir border, AI presented one-lakh “rakhis”, which were made by visually-impaired women of the Utkarsh Job Development Centre.

Defaulters: A number of foreign carriers are defaulting in paying income-tax for earnings made in this country. These airlines successfully hoodwink income-tax and RBI authorities by not opening Indian accounts. They also avoid filing tax returns. The payments are settled abroad. This is in gross violation of the RBI norms.

At least three airlines have been slapped evasion charges. The airlines are said to have lodged a protest with the ministry. But the fact is that many foreign carriers are taking undue advantage of lax rules of the tax and the RBI.Top


Chastity belt for couples

ROME: An Italian psychologist has put microprocessors to work to produce a 21st century version of the chastity belt which he expects will find a market among suspicious modern couples.

Attached to the elastic of a normal pair of men’s or women’s underpants, the “chastity timer” records the frequency and length of time that the undergarments are removed.

“There will certainly be a market for it,” says Prof Giuseppe Cirillo. “Couples who want to demonstrate their fidelity will wear it.”

Agreeing to don the cigarette-packet sized contraption, which records the opening and closing of the elastic, would be a reassuring gesture on the part of a husband or wife travelling for business, he said.

At the end of the trip spouses would have an exact record of the periods of time during which their partner might have been subjected to temptation.

“If it says the boxer shorts were off for 20 minutes or an hour, then there is no excuse,” Prof Cirillo, the founder of a Rome-based school of courtship and seduction, said.

Prof Cirillo’s aim is to develop a more advanced device which would sound an alarm on the partner’s mobile phone if the closing mechanism remained open for longer than five minutes.

“I have spoken to telecommunications engineers and they say it is perfectly feasible,” he said. — The Guardian

Taste of India in California

ARTESIA (California): Ethnic Indian merchandise is the rage on America’s current fashion scene. Places like Chinatown, Korea Town and Little Saigon may have etched their places in the minds of people residing in metropolitan Los Angeles, but “Little India” is not far behind.

Artesia, a litte town in the state of California, has proved beyond doubt that it has become hip and not taboo to sport a bindi and mehndi not to speak of bangles and assorted Indian jewellery and dresses.

Artesia’s Chamber of Commerce recently organised a Taste of India Festival, an all-day event, that succeeded in attractinig more than 6,000 people, who sampled a little bit of everything that India had to offer.

More than 35 booths, many of them businesses and several others selling Indian apparel, jewellery and music did brisk business, as did many of the restaurants of offering Indian cuisine.

Sikh youngesters danced the bhangra at their booth, kids enjoyed the fun rides of the carvinal, while nearby, adults were seen carrying large bags filled with fruits and vegetables from the Indian grocery stores.

The e.India stall advertised free T-shirts in exchange for filling out their forms. Merchants like Rajesh Patel and Sanjay Sabarwal, corporate sponsors like Nuntv, the State Bank of India, and, the Artesia Bakery, the Bangle Bazar and Music Warehouse Inc were some of the few who helped to organise the event. — IANSTop


HCL Tech may split stock in 2:1 ratio

NEW DELHI, Aug 27 (PTI) — HCL Technologies is likely to offer a 2:1 stock split for its 27.95 crore equity shares, following which each shareholder will receive two equity shares of par value Rs 2 for every share of Rs 4 par values held on the record date. “The Board of Directors is considering a 2:1 stock split to make the share more affordable for both retail investor as well as employees of the company, leading to increased retail interest and higher liquidity.” Chairman and CEO of HCLT Shiv Nadar told PTI here today.

NIIT to source manpower for Singapore

NEW DELHI, Aug 27 (PTI) — The Infocomm Development Authority of Singapore (IDA) today entered into an agreement with NIIT for sourcing 1,000 skilled IT manpower from the latter’s training centres in China, India, Indonesia and Malaysia for companies in Singapore, within a year. “Under the MoU Singapore firms interested in employing IT manpower can give their specifications and requirements to NIIT, which in turn will tap it from its base of alumni and trainess.” Suren Singh Rasaily, senior UP and head of NIIT’s eduction and training business said here.

ICI initiates B2B for fertiliser catalysts

NEW DELHI, Aug 27 (PTI) — ICI India has chalked out a major business to business (B2B) intiative for fertiliser and refinery catalysts and polyurethanes. “We have established linkages with our customers via Internet in Synetic as a part of our B2B plan, “Aditya Narayan, Managing Director, ICI India told PTI.

Satnam Overseas to set up units in USA

NEW DELHI, Aug 27 (PTI) — Satnam Overseas will set up wholly-owned subsidiaries in the USA and Saudi Arabia to aggressively market its “Kohinoor” brand in these countries, the company’s Joint Managing Director Gurnam Arora said. “We have already invested Rs 7 to 8 crore in setting up warehouses and storing facilities in the USA and Saudi Arabia and will start marketing “Kohinoor” there,” he told PTI. Top


Inflation rises
NEW DELHI, Aug 27 (PTI) — The annual rate of inflation rose to cross the 6 per cent mark once again and stood at 6.03 per cent during the week ended August 12, because of a 0.2 per cent rise in the all commodities index. The inflation rate based on wholesale price index rose to the 6.03 per cent level from 5.75 per cent in the previous week. The rate was 2.56 per cent in the corresponding week of the previous year. The wholesale price index for “All commodities” (Base 1993-94-100) stood at 152.9 during the concerned week as against 152.6 in the previous week.

Transport Corp
NEW DELHI, Aug 27 (PTI) — The MRTPC has hauled up Transport Corporation of India’s courier division GATI for unfair trade practices and directed it to pay a compensation of Rs 20,000 to a customer. The two-member Bench comprising Mr R.K. Anand and Mr M. Mahajan directed the courier major GATI to pay Rs 20,000 to its client for the loss or damage suffered due to delay in delivering a consignment booked by it with the respondent.

Maruti meeting
NEW DELHI, Aug 27 (UNI) — The Board of Directors of Maruti Udyog which is currently reeling under a massive demand crunch, will meet here on Monday to assess the current market situation and devise strategies to overcome the crisis. The meeting, which will commence at 10.00 a.m. will also assess the company’s performance in the current fiscal, company sources told UNI here today.

M&M Bijlee
MUMBAI, Aug 27 (PTI) — Mahindra and Mahindra will begin commercial production of its electric three-wheeler, Mahindra Bijlee, early next year. “The production of the 10 seater Bijlee will commence at the company’s Coimbatore plant in the middle of the fourth quarter of this fiscal”, Soami Saran, President of Mahindra Alternative Technologies a wholly-owned subsidiary of M&M told PTI here today.

CEOs forum
NEW DELHI, Aug 27 (PTI) — Mr N.R. Narayanamurthy, Chairman and CEO of Infosys Technologies, will lead a “US-India CEOs forum on IT and pharmaceuticals and biotechnology” in New York on September 7, with the objective of strengthening business ties between India and USA.

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