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| Thursday, October 4, 2001, Chandigarh, India   
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Rise in drug prices on cards BG to buy Enron India assets
Financing most sought after Banks may shy away
from margin trading
Hudco to foray into banking sector
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Talks on to save Swissair Dabur CGU Life in
pact with ABN Amro Maruti
to offer shares to FIs Tea business in doldrums OPEC oil price slips again 2600 industrial units set up
in Haryana NFL pays 30 per cent
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Rise in drug prices on cards New Delhi, October 3 According to the NPPA the immediate provocation for the move is the brazen violation of the Drug Price Control Order by pharmaceutical companies. Insulin, intravenous fluids and widely used drugs for which ceiling prices have been fixed by the NPPA, are being sold at a price 15 to 20 per cent higher. Dextrose (5 %) 500 ml drip is being sold at Rs 20 to Rs 25 above the ceiling price. Similarly, anti-hypertension drug for angina (80 mg, 10 tablets) is priced higher than the ceiling price. Compounding matters for the consumer is the trend among some pharma majors to unilaterally revise prices. This, when the order stipulates that manufacturers of bulk drugs should submit details in the prescribed proforma to the NPPA and state drug controller. Sources say the move by the NPPA to ‘ease out’ of the price-fixing mechanism would be a precursor to the gradual elimination of ceiling prices, allowing the market forces to rationalise the drug prices. Furthermore, as an incentive to pharma majors, the criterion of a turnover ceiling of Rs 20 crore may be changed. NPPA Chairman BS Baswan told The Tribune that the need of the hour was to fix a premium on quality and to gradually scrap the ceiling prices while ensuring that the Authority intervened when required to regulate the prices. In exercise of the powers conferred by Section 3 of the Essential Commodities Act, the Union Government introduced the Drugs (Prices Control) Order 1995 vide notification No. SO 18(E) dated January 6, 1995 of the Ministry of Chemicals and Fertilisers. The order was promulgated for regulating the equitable distribution and availability of bulk drugs at a fair price to consumers. The prices of Scheduled Drugs is arrived at after adding up retail price and local tax. Sources say local tax ranges from 4 to 7 poer cent “but still the label price is inflated.” Action can be taken against offenders under sections 3 and 7 of the Essential Commodities Act. Also, the Union Government through the NPPA has the powers to make recovery of the overcharged amount from the defaulter firm. However, a tug of war between the Drug Controller’s Office and the NPPA has affected the enforcement of the guidelines. Sources in the Drug Controller’s Office take refuge under the plea that even in cases where irregularities have been detected sanction of prosecution is not forthcoming. It is also alleged that in such matters, district magistrates and police rarely exercise their powers. Two wrongs can’t make a right, so goes the saying, but in the rush to deregulate pharma prices it would be the consumer who would likely emerge the loser, is the general feeling among the senior officers of the
NPPA. |
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BG to buy Enron India assets London, October 3 Enron Oil and Gas India Limited (EOGIL) has a 30 per cent interest in the Tapti gas field and the Panna Mukta oil and gas field north west of Bombay, and a 62.4 per cent interest in the CB-OS/1 exploration licence further north off the state of Gujarat. Enron’s majority owned Dabhol Power Co project, currently embroiled in a dispute with local customers over pricing of its electricity, is not part of the deal. The acquisition depends on some regulatory consents, and on confirmation from EOGIL joint venture partners to allow it to continue as operator of the fields. This could be a problem, because according to industry sources in Bombay speaking after BG’s announcement, ONGC, the state-controlled energy group which is one of EOGIL’s partners, still wants to take over operatorship. ONGC declined to comment. But in August company officials expressed an interest in the operatorship. BG said the deal would make it the biggest upstream energy foreign investor in India, with interests in fields that produce 10 per cent of the nation’s existing needs and have significant expansion capacity. “There is currently a deficit between the supply of gas, which is currently all indigenous gas, and the need for gas within India,’’ said David McManus, BG’s Executive Vice-President with responsibility for India. Some energy analysts see demand doubling in India over the next 10 years, making it one of the world’s fastest growing energy market. BG is already developing Liquefied Natural Gas (LNG) import facilities and last month its 65 per cent owned Gujarat Gas Company struck a deal to buy gas from another west coast field, Lakshmi, with British group Cairn Energy and its partners there. “What this additional gas will do is create the marketplace in advance of LNG imports coming in behind it and in fact will fill the supply deficit that currently exists,’’ said McManus. Enron has been looking to exit the upstream sector in a number of countries worldwide to focus on its core energy marketing and trading skills. BG’s pipeline interests in India date back to its time as British Gas, a former state-owned gas utility. BG has since spun off its UK utility connections into Lattice PLc and Centrica. But it continues to pursue a strategy of monetising its gas production down through the supply chain into pipelines, power stations and LNG elsewhere in the world, styling itself as an “integrated gas major’’. The deal would add 5 per cent to its total production profile with some 19,000 barrels of oil equivalent a day of which 60 per cent is currently gas. The company recently outlined plans to grow production at 11 per cent a year over the period 2000-2006, one of the fastest growth targets in the sector.
Reuters |
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Financing most sought after New Delhi, October 3 Manufacturing is only the second preference for the entrepreneurs followed by wholesale and retail trade, restaurants and hotels, and construction. Analysis of new registration of companies under the Companies Act, 1956, during July brings out that the highest number of companies registered under the Industrial Classification were “financing, insurance, real estate and business services” (537) followed by “manufacturing” (501) and “wholesale and retail trade, restaurants & hotels” (420). During the month under review 1,842 companies were registered in India under the Companies Act, 1956, as against 2,346 companies registered during the corresponding month of the previous year and 1,852 companies during the previous month. Of the 1,842 companies registered during the month, 1,833 companies were limited by shares. Besides, nine companies were registered as guarantee companies during July, 2001. The total authorised capital of the companies limited by shares put together amounted to Rs 479.1 crore. As many as 1,833 companies, limited by shares, registered during the month consist of 117 public limited companies with an authorised capital of Rs 259.3 crore and 1,716 private limited companies with an authorised capital of Rs. 219.8 crore. The highest number of companies, limited by shares, registered during the month were from Maharashtra (420) and Delhi (383). Maharashtra, Delhi, Tamil Nadu, West Bengal, Karnataka, Andhra Pradesh and Gujarat together accounted for nearly 83 per cent of the total number of companies registered during the month. Thirty one companies ceased functioning, during July, either by going into liquidation or their names having been struck off under Section 560 of the Companies Act. Out of them, seven were public limited companies and 24 private limited. |
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Banks may shy away from margin trading Mumbai, October 3 However, operational and infrastructural inefficiencies of Indian banks coupled with their risk management incapability would restrict their active participation in the financing of margin trading system, feel experts. The margin trading system which institutionalise speculation in the market and facilitate leverage trading might infuse liquidity in the sagging capital market. But the success would depend upon the extent of banks’ current exposure to the capital market, efficiency to manage risks, their preparedness to assume risks and the infrastructure to handle the business, said Ms Deena Mehta, former President of the BSE. The existing exposure limit in capital market of 5 per cent of the outstanding advances as at the end of the previous fiscal year has also been one of the detrimental factors as banks which are active in capital market lending are already well above the stipulated ceiling for such activity. Monitoring of end use of funds and checking diversion of funds by the borrowers and giving ‘margin call’ would also be difficult for Indian Banks in view of the present risk management and surveillance capability of Indian Banks, Ms Mehta said. According to Bharat Kotecha, Vice President of Investors Grievance Forum, the margin requirements of 40 per cent may not be sufficient considering the volatility in the Indian market. There should also be an on-line monitoring system for price movement in the market to give margin call and to ensure the margin requirement, he added. No doubt, in the absence of deferral products in the market like badla there is need for alternate route of providing funds for share purchase but only a transparent and an efficient mechanism to fund investors will ensure long term liquidity and development of capital market. The margin trading would provide liquidity in the capital market and prove to be yet another successful measure to ensure the development and integration of Indian Capital market with the global equity markets, provided an efficient mechanism of financing margin trading is in place.
UNI |
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Hudco to foray into banking sector New Delhi, October 3 “In line with the earlier initiative for the India Habitat Centre in Delhi, we are working closely to create state-level habitat centres”, the Chairman and Managing Director of Hudco, Mr V. Suresh told newspersons here today. Discussions were already on with Jammu and Kashmir, Rajasthan, Uttar Pradesh, Maharashtra, Karnataka, Andhra Pradesh, West Bengal and Orissa, he said. The groundwork was also on for the proposed entry of Hudco in the banking and insurance sectors of the country. “Hopefully, by the end of this year we should have completed the groundwork required for the purpose. There is a lot of potential in these sectors,” Mr Suresh said. The housing finance major was also in the process of firming up a memorandum of understanding (MoU) with the Ministry for Defence for the development of residential and commercial neighbourhoods and infrastructure development, he said. Hudco had earlier entered into a similar MoU with the Department of Railways. The corporation has registered a net profit of ( profit after tax) of Rs 106.93 crore as compared to Rs 96 crore in the previous
year. The company has paid a dividend of Rs 20.87 crore against Rs 18.53 in the previous year. |
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Talks on to save Swissair Berne, October 3 The government sources said the aim was to find fresh bridge financing for struggling Swissair, which has grounded its entire fleet because of a severe cash crunch. The loan would be provided by Credit Suisse together with public authorities, possibly without the participation of Switzerland’s top bank UBS. But a UBS spokesman said the bank was also present at the meeting. He declined to comment further. A Credit Suisse spokesman said CS Chairman Lukas Muehlemann, who also sits on Swissair Group’s board, was meeting officials in Berne. “I can confirm that Lukas Muehlemann has made efforts to organise a meeting between the Federal Government, the two banks and the SAirGroup on the situation of the SAirGroup,’’ he said. Swissair Group was formerly known as SAirGroup.
Reuters |
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Dabur CGU Life in pact with ABN Amro New Delhi, October 3 As part of the agreement, ABN Amro's 10 branches across India will offer life insurance and pension products of Dabur CGU to the bank's customers, a statement by Dabur CGU said here. "With this tie-up we will fulfil an important need of our customers —life insurance, pension and annuity products," said Romesh Sobti, Executive Vice-President and country representative of ABN Amro Bank India. "We will soon offer specially packaged products with easy payment options backed by expert advice on life insurance and pension products to our customers." Stuart Purdy, Chief Executive Officer of Dabur CGU Life Insurance, said the alliance would ensure wider distribution network across the country. "Selling insurance products through banks is a key aspect of our network," he said. Dabur CGU joint venture is the second attempt by both the companies to enter India's liberalized insurance market. A large number of domestic and international companies have entered the Indian insurance market that was opened up in 1999 after the government passed legislation ending a 44-year state monopoly. Analysts expect the market to expand significantly with the entry of the new players. Only five percent of India's one billion people have life insurance and the vast majority are urban residents.
IANS |
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Maruti to offer shares to FIs Nagpur, October 3 This accounts for 10 per cent of 49.5 per cent shares of the government in MUL while 50.5 is held by Japanese motor giant Suzuki, Joshi told reporters here. “If banks and financial institutions in the country don’t come forward, the same will be offered to
partner company Suzuki”, the minister said. On the general disinvestment scenario, Joshi said he had submitted a “road-map” on the subject to the Cabinet for consideration which would decide the number of loss making units out of 47 public sector companies under his ministry to be taken up for disinvestment each year. Out of 240 PSUs 100 were incurring huge losses to the exchequer and government has finally arrived at a conclusion that “it is no more government’s business to run a business”, Joshi quipped. The strategy also includes restructuring and disposing of the units. However, strategic industries like defence production units and railways will not come under the purview of disinvestment, he clarified. By and large, workers were now accepting the voluntary retirement scheme, he claimed, citing examples of HMT, Bangalore where 6000 employees out of a total workforce of 19,000 have opted for VRS.
PTI |
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Ban
polythene or face action, says DC Rohtak, October 3 Mr Anil has convened a meeting of traders associations of Rohtak on Friday to apprise about the Act and the government intension to implement it effectively in Haryana. Chief Minister Om Prakash Chautala has told the DCs that there was an indiscriminate use and littering of plastic carrybags in the urban areas. Under the Act, the traders, retailers and vendors have been prohibited from using polythene carrybags manufactured from recycled plastic for packing the goods sold by them. Mr Malik said the Zila Parishad, Panchayat Samiti or Gram Panchayat have also been empowered to issue in writing to prohibit of stacking of biodegradable garbage. Mr Anil Malik said the non-observance of the provisions of the Act, 1998 would invite severe penal action. |
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Tea business in doldrums Amritsar, October 3 Mr Rajinder Kumar Goel, president of the tea traders association disclosed that the annual turnover of Rs 150 crore had come down to Rs 80-90 crore and almost half of the factories for shifting and grading of tea granules were closed here. The establishment of new factories at Jalandhar, Ludhiana and various other cities of Punjab add to the woes of the tea traders here. |
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OPEC oil price slips again Vienna, October 3 The basket price, an average of seven world crudes, was down from 20.44 the previous day, said OPEC officials, who base the daily basket price on the previous working day’s world crude prices. Under a price mechanism system aimed at keeping prices within a $22-28 range, OPEC could cut production by 500,000 barrels a day if the basket price remains below $22 a barrel for 10 trading days in a row.
AFP |
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2600 industrial units set up
in Haryana Yamunanagar, October 3 He said that the Haryana Government has provided a congenial atmosphere to set up industry in the state, with the resume a number of foreign companies have opted the Haryana State. Mr Chautala said that Haryana will be power surplus state within two next years. |
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NFL pays 30 per cent New Delhi, October 3 The Minister congratulated NFL for its performance during the year. The dividend announced for the financial year 2000-01 by NFL is 30 per cent of profit after tax. During the financial year 2000-01, NFL achieved a record sales turnover of Rs 2808.74 crore. During the initial five months of the current financial year, NFL plants located in Nangal, Bhatinda, Panipat and Vijaipur produced 12.89 lakh tonnes of urea.
UNI |
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ICICI Bank Quiz contest Delphi’s plan Hyundai sales Sterlite Optical Chyawanprash Mobile printer |
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Lenzing
fibre industry held a fashion show in Mumbai recently,
introducing the fibre through Indian garment and clothes.
India has a competitor in the fibre industry and it is from
Lenzing,Austria, leaders in the manufacture of Viscose fibre
for more than sixty years.
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