Thursday, October 4, 2001,
Chandigarh, India







THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
B U S I N E S S

Rise in drug prices on cards
New Delhi, October 3
Prices of medicines could rocket sky-high as in the Drug Price Control Order 2001, to be made public soon, the National Pharmaceutical Pricing Authority (NPPA) intends to scrap the ceiling price of 50 per cent of drugs (formulations).

BG to buy Enron India assets
London, October 3
UK gas and oil producer BG PLc today said it had agreed to buy US-based Enron’s oil and gas assets off India’s west coast for $ 388 million to complement its 10-year-old interests in gas distribution there.

Financing most sought after
New Delhi, October 3
In the days of economic slowdown and sluggish industrial growth, entrepreneurs have chosen to enter the field of financing, insurance, real estate and business services. Manufacturing is only the second preference for the entrepreneurs followed by wholesale and retail trade, restaurants and hotels, and construction.

Banks may shy away from margin trading
Mumbai, October 3
The margin trading system introduced recently to infuse the much needed liquidity in the Indian stock markets may provide an investment avenue for banks in view of their rising deposits and lacklustre credit growth.

Hudco to foray into banking sector
New Delhi, October 3
Housing and Urban Development Corporation Ltd (Hudco) will create state-level habitat centres in line with the India Habitat Centre in Delhi.

Ban polythene or face action, says DC
Rohtak, October 3
Deputy Commissioner Anil Malik advised traders, retailers and vendors today to exhaust the stocks of polythene carrybags by October 15 failing which the penal provisions of the Haryana Non-biodegradable Garbage (Control) Act would come into force.


 

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.
(28k, 56k)

 


EARLIER STORIES

 

Talks on to save Swissair
Berne, October 3
Top officials of Swissair, the collapsed Swiss flag carrier, and Credit Suisse Group, the country’s number-two bank, were meeting Swiss Government Ministers today to discuss the future of Swissair.

Dabur CGU Life in pact with ABN Amro
New Delhi, October 3
Dabur CGU Life Insurance, a joint venture between the CGU group of Britain and India's consumer goods major Dabur group, said on Wednesday that it had tied up with ABN Amro Bank to retail insurance products.

Maruti to offer shares to FIs
Nagpur, October 3
Maruti Udyog Limited (MUL) would offer shares worth Rs 400 crore as rights issue to banks and financial institutions as part of disinvestment this year, Union Minister for Heavy Industries Manohar Joshi said today.

Tea business in doldrums
Amritsar, October 3
The two hundred years old business of tea is now in doldrums here. The wrong policies of the government has landed this tea trade into a jeopardy. Agitated tea traders demanded the waiving off the 2 per cent and 8 per cent consumer sale tax (CST) on green tea and black tea respectively.

OPEC oil price slips again
Vienna, October 3
The basket oil price used by OPEC to set its output slipped again to $20.30 below the $22 floor of the cartel’s target range for a seventh trading day, its secretariat said today,

2600 industrial units set up in Haryana
Yamunanagar, October 3
More that 2600 industrial units have been established in Haryana in last two years, claimed the Chief Minister of Haryana, Mr Om Prakash Chautala. While addressing public meeting at grain market Sadhura he said that with these units the revenue of the state has been increased.

NFL pays 30 per cent
New Delhi, October 3
Union Minister for Chemicals and Fertilisers S.S. Dhindsa received a dividend cheque of Rs 7,99,83,110 from NFL, here today.


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Rise in drug prices on cards
Ramesh Ramachandran
Tribune News Service

New Delhi, October 3
Prices of medicines could rocket sky-high as in the Drug Price Control Order 2001, to be made public soon, the National Pharmaceutical Pricing Authority (NPPA) intends to scrap the ceiling price of 50 per cent of drugs (formulations). Currently, 67 formulations are on the list; no pharmaceutical company can sell drugs containing these formulations above the stipulated ceiling price.

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
UK gas and oil producer BG PLc today said it had agreed to buy US-based Enron’s oil and gas assets off India’s west coast for $ 388 million to complement its 10-year-old interests in gas distribution there.

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
Tribune News Service

New Delhi, October 3
In the days of economic slowdown and sluggish industrial growth, entrepreneurs have chosen to enter the field of financing, insurance, real estate and business services.

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
The margin trading system introduced recently to infuse the much needed liquidity in the Indian stock markets may provide an investment avenue for banks in view of their rising deposits and lacklustre credit growth.

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
Tribune News Service

New Delhi, October 3
Housing and Urban Development Corporation Ltd (Hudco) will create state-level habitat centres in line with the India Habitat Centre in Delhi.

“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
Top officials of Swissair, the collapsed Swiss flag carrier, and Credit Suisse Group, the country’s number-two bank, were meeting Swiss Government Ministers today to discuss the future of Swissair.

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
Dabur CGU Life Insurance, a joint venture between the CGU group of Britain and India's consumer goods major Dabur group, said on Wednesday that it had tied up with ABN Amro Bank to retail insurance products.

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
Maruti Udyog Limited (MUL) would offer shares worth Rs 400 crore as rights issue to banks and financial institutions as part of disinvestment this year, Union Minister for Heavy Industries Manohar Joshi said today.

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
Our Correspondent

Rohtak, October 3
Deputy Commissioner Anil Malik advised traders, retailers and vendors today to exhaust the stocks of polythene carrybags by October 15 failing which the penal provisions of the Haryana Non-biodegradable Garbage (Control) Act would come into force.

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
Our Correspondent

Amritsar, October 3
The two hundred years old business of tea is now in doldrums here. The wrong policies of the government has landed this tea trade into a jeopardy. Agitated tea traders demanded the waiving off the 2 per cent and 8 per cent consumer sale tax (CST) on green tea and black tea respectively.

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 oil price used by OPEC to set its output slipped again to $20.30 below the $22 floor of the cartel’s target range for a seventh trading day, its secretariat said today,

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
Our Correspondent

Yamunanagar, October 3
More that 2600 industrial units have been established in Haryana in last two years, claimed the Chief Minister of Haryana, Mr Om Prakash Chautala. While addressing public meeting at grain market Sadhura he said that with these units the revenue of the state has been increased.

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
Union Minister for Chemicals and Fertilisers S.S. Dhindsa received a dividend cheque of Rs 7,99,83,110 from NFL, here today.

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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BIZ BRIEFS

ICICI Bank
Chandigarh, October 3
ICICI Bank today announced an increase in its interest rates on Fixed Deposits. The revised rate on deposit upto six months will be 8.25 per cent, between one year and less than five years 8.5 per cent and on deposits between five years and less than ten years duration 8.75 per cent. For the senior citizens, the interest rate for deposits from one year to less than five years will be 8.75 per cent and 9 per cent interest will be paid for deposits from five years to less than 10 years. Rates on NRE deposits have also been revised. TNS

Quiz contest
Chandigarh, October 3
Somnath Ghosh, Chemical Engineer, Fertilizer Corporation, Delhi and Basab Bhattacharya, Economic Intelligence Unit won the ‘Brainbuster Quiz Contest’ organised by Aptech Limited and Rediff.com . The quiz contest which covered 300 cities across the country concluded at Mumbai. Roshan Abbas, VJ, awarded PCs worth Rs 40,000 each to the winners.
TNS

Delphi’s plan
Bangalore, October 3
Delphi Automotive Systems world’s leading supplier of automotive components and systems, is planning a foray into the mobile entertainment and communication systems in India with the proposed launch of new technology products soon, a senior company official said today. Delphi here today showcased for the first time in India mobile entertainment and communication systems and new technology products ranging from entertainment to vehicle safety. PTI

Hyundai sales
Chennai, October 3
Reflecting a significant slowdown in retail car buying in September, Hyundai Motor India car sale fell by 18.2 per cent at 6781 units. However, in the first six months (April-September) of the current financial year 2000-2001 HMIL had sold 45,834 units, a growth of about 4.5 per cent over the same period last financial year when the sale stood at 43,847 cars, a company release here said. UNI

Sterlite Optical
Mumbai, October 3
Sterlite Optical Technologies members have passed a resolution at the annual general meeting to buy back equity shares of the company at an aggregate amount not exceeding Rs 800 million and up to a maximum price not exceeding Rs 250 per share. UNI

Chyawanprash
New Delhi, October 3
The first microbiology tested chyawanprash from Surya Herbal Limited has become the first ayurvedic company to be accredited with ISO 9001, 2000 version. TNS

Mobile printer
New Delhi, October 3
Canon today announced the launch of its latest mobile printer in India, which offers cordless printing. “The BJC-55 incorporates the best of Canon’s technologies to offer anytime, anywhere printing. PTI

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