Saturday, October 20, 2001, Chandigarh, India






THE TRIBUNE SPECIALS
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TERCENTENARY CELEBRATIONS
B U S I N E S S

Maruti enters the used car segment
Bangalore, October 19
Maruti today plunged into the used car market, formally launching the operations to be driven under the brand name “Maruti True Value”. True value was one of the four services business in the automotive sector that Maruti had entered. 

Govt may invite fresh bids for NFL selloff
Ropar, October 19
The Union Government is considering a proposal to invite fresh bids for disinvestment in National Fertilisers Ltd (NFL), the second largest producer of fertilisers in the country.

Internet telephony from April 1, says Mahajan
New Delhi, October 19
Communications and Information Technology Minister, Mr Pramod Mahajan, said Internet telephony would be allowed from April 1, 2002. While maintaining that the disinvestment in Videsh Sanchar Nigam Ltd was on, Mr Mahajan said he wanted to provide cheaper and technologically advanced services to the customers.

Government to review Indo-Nepal treaty
Ludhiana, October 19
The Government of India has initiated steps to review the Indo-Nepal treaty which governs trade between the two countries. The present Indo-Nepal Treaty is due to expire in December after a five-year term.



EARLIER STORIES
  CII unveils agenda on VAT system
Chandigarh, October 19
The Confederation of Indian Industry (CII) has expressed serious concern over the fact that neither the states nor the industry are yet adequately prepared for a smooth transition to the VAT regime. The VAT system presents a competitive and uniform taxation structure which is particularly relevant in the WTO setting.

Andhra Bank opens Housing Fin branch
Chandigarh, October 19
Andhra Bank opened a specialised Housing Finance branch in Sector 34-A here today. Mr R.S. Gujral, Home Secretary, Union Territory, Chandigarh inaugurated the branch. Mr A. Muralidhar, Zonal Manager, Andhra Bank, New Delhi Zone, presided over the function.

CORPORATE NEWS

Philips net at Rs 87 m
Mumbai, October 19
Philips India Ltd has posted a net profit of Rs 87 million for the quarter ended September 30, 2001 compared with a net loss of Rs 40.50 million in the corresponding period last fiscal.

ROUND-UP

Boeing net up 7 pc
Washington, October 19
Boeing reported a 7 per cent rise in third-quarter net profit but warned plane deliveries will plunge after the terror attacks, which forced it to cut 20,000-30,000 jobs.

  • Sun Microsystems posts $ 180 m loss

  • Rolls-Royce slashes 5,000 jobs


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Maruti enters the used car segment

Bangalore, October 19
Maruti today plunged into the used car market, formally launching the operations to be driven under the brand name “Maruti True Value”.

True value was one of the four services business in the automotive sector that Maruti had entered. The other businesses to be shortly launched by the company included auto insurance, auto finance and lease and fleet management.

Mandovi Motors, a leading Maruti dealer in the country, was the first to launch the scheme. Maruti Udyog Limited Managing Director Jagadish Khattar told newspersons here that the scheme would be launched in Delhi next week with four dealers starting the operations.

Mr Khattar said the company had two years ago decided to look into new business in the field and consequently zeroed on the four.

He said the used car market in the country was on par with the new car market of over 600,000 unlike in the West where the sale of used cars was double than new cars. The used car business was aimed to expand the family of Maruti customers besides reinforcing Maruti’s image of a reliable and trustworthy company. “We wish to extend the relationship and emotional contact we enjoy with our customer”, he added.

Asked about Maruti coming out with options of providing LPG fuelled cars, he said the company would wait for the LPG networks to increase. Further the situation post April 2002 when the controlled price of LPG would be removed should also be reviewed, he added.

He said the company hoped to handle 18,000 used cars in five years.

Under the scheme, a Maruti dealer would accept purchase of vehicles less than four years old or have done upto 60,000 km and have not changed two previous owners. Designated engineers from Maruti would be present at the True Value outlets and conduct a standard 120 point check. Under the scheme, the seller would have the option to be paid in cash or get a True Value in exchange or a brand new Maruti car in exchange. The used car would be refurbished and offered for resale under the Maruti True Value brand. It would also carry a one year warranty with three free services.

Replying to questions, he said the company maintained its 60 per cent market during the first six months of the current fiscal and had during this period wiped off the loss of Rs 106 crore incurred during the first six months of the previous year.

Rights issue

New Delhi: “We hope to complete the preferential right issue by March, 2002 to be followed by a public offering”, Disinvestment Secretary, Mr Pradip Baijal, said.

It has also fixed the size of the issue at Rs 400 crore while the price and premium for renunciation would be worked out in consultation with global advisor. PTI, UNI

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Govt may invite fresh bids for NFL selloff
Lalit Mohan

Ropar, October 19
The Union Government is considering a proposal to invite fresh bids for disinvestment in National Fertilisers Ltd (NFL), the second largest producer of fertilisers in the country. The process of disinvestment was started last year, after global tenders were issued, offering 51 per cent equity in the NFL. Earlier, around four private companies had offered to buy the stake in the company.

However, after the Balco fiasco, the government dithered on the process of disinvestment in NFL and is now planning that some government organisation should buy the stake in NFL to bail out the company from the financial crisis. The profits of NFL, which was enlisted as a mini ratna company, have dipped from Rs 250 crore five years ago to Rs 11 crores last year.

Mr Sukhdev Singh Dhindsa, Union Minister for Chemicals and Fertilisers, in an exclusive interview with this correspondent, endorsed the fact that the government now wants that Kribhco should buy the stake in NFL. To facilitate it, the government would call for fresh bids for equity in NFL, so that Kribhco, which has reserves worth Rs 1,500 crore, can also bid. Mr Dhindsa was here to attend a function organised by the Punjab Heritage Foundation and Environment Society.

Giving further information about the reforms in the fertiliser sector, Mr Dhindsa said the report of the Y.K. Alagh committee, on the methods of reassessment of the capacity of fertiliser units, allegedly withdrawing excess subsidy, has been recovered. On the basis of the findings of the committee, the investigation in certain cases was being handed over to the CBI.

The report of the Expenditure Reforms Committee, which was constituted to reduce the burden of subsidy on the government, has also been received. The Government of India is at present, giving subsidy to the tune of Rs 13,975 crore in the fertiliser sector. The committee has recommended that the subsidy on fertilisers should be reduced by increasing the cost of urea at a rate of 7 per cent per annum.

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Internet telephony from April 1, says Mahajan
Tribune News Service

New Delhi, October 19
Communications and Information Technology Minister, Mr Pramod Mahajan, said Internet telephony would be allowed from April 1, 2002.

While maintaining that the disinvestment in Videsh Sanchar Nigam Ltd was on, Mr Mahajan said he wanted to provide cheaper and technologically advanced services to the customers.

He said the decision to advance the date for opening up Internet telephony had been taken to coincide with the ending of monopoly of the VSNL over the ISD communication.

The Department of Telecommunication (DoT) has already sent a communication to the Telecom Regulatory Authority of India (TRAI) seeking its advice on Internet telephony, the minister said.

On the decision of Carnegie Mellon University to withdraw from the Rs 1,000-crore Sankhyavahini project, Mr Mahajan said efforts were on to create extra bandwith. Bharat Sanchar Nigam Ltd was reviewing the option, including looking for a joint venture partner.

Stating that the university’s decision has been communicated to the DoT and the Prime Minister, he said the US university’s withdrawal was not a “setback”.

Creating excess bandwith would make access to the Internet easy and the project was expected to be beneficial for the promotion of educational and research activities in the country.

The minister said the government was also launching a major scheme called ‘Vidyavahini’ under which information technology facilities would be promoted in 60,000 schools over the next two years.

“We have 1,06,000 secondary schools out of which 60,000 have buildings, electricity and IT savvy teachers. So we have decided through Vidyavahini to link all these schools by creating a bandwidth of 128kbs”, Mr Mahajan said.

The minister also informed that the merger of the Communication and the IT Ministries had reached the final stage with the government sending the proposal to the President for his assent. The new ministry would be called the Ministry of Communication and IT.

He clarified that the Information and Broadcasting Ministry would not be merged with the new ministry. The new ministry would have three departments — Telecom, IT and Post.

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Government to review Indo-Nepal treaty
K.S. Chawla

Ludhiana, October 19
The Government of India has initiated steps to review the Indo-Nepal treaty which governs trade between the two countries. The present Indo-Nepal Treaty is due to expire in December after a five-year term.

The textile industry, especially the acrylic-based industry, has suffered a loss of Rs 500 crore during the past five years. Ludhiana alone has suffered a loss of Rs 200 crores and as many as 20 spinning units have been closed down. The first time the treaty was signed on December 6, 1991 for a period of five years for providing access to the Indian markets free of basic and auxiliary customs duty and quantitative restrictions. On April 1, 1993, protocol with reference to the Article V of the treaty was replaced by a new part which provided access to the Indian market free of basic and auxiliary customs duty and quantitative restrictions.

On December 3, 1996 a new protocol with reference to Article V of the treaty provided access to the Indian market free of customs duties and the quantitative restrictions for all articles manufactured in Nepal, specifically, “synthetic or blended yarn and fabric” permitted for imports without the condition of its having Nepalese origin of raw material.

The Indo-Nepal treaty has affected the synthetic yarn (acrylic yarns), vanaspati and ball bearings and some other consumer goods. Due to the amendments in the treaty, there has been a sudden surge in the import of higher quantities of various products in India from Nepal.

To protect the domestic acrylic fibre industry, the government imposed anti-dumping duty on the supplies of acrylic fibre from south- east Asian countries like Thailand, Korea and Japan. With the last amendment in the real, government’s preventive measures against the dumping of acrylic fibre are negated, as to circumvent these provisions, these countries are now exporting acrylic fibre to Nepal, which after spinning, finds its markets in India, thereby defeating the purpose of the anti-dumping duty. The Nepalese spinners get the advantage on both the accounts on duty free imports of fibre from these countries and then duty-free export to India as a result of this amendment. Mr S.P. Oswal, Chairman of the National Textile Committee of the CII, today said there was surge in the imports from Nepal and this should be brought under normal duties. He said the CII was making recommendations to the government that certain items should be treated separately. The last treaty was a one-sided affair as there was no provision for review if there was a surge in the imports.

The domestic industry wants that the sensitive items which have high import contents, along with high incidence of import duties on the inputs, should be classified into sensitive list and their imports from Nepal should only be permitted when subjected to an appropriate rate of import.

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CII unveils agenda on VAT system
Tribune News Service

Chandigarh, October 19
The Confederation of Indian Industry (CII) has expressed serious concern over the fact that neither the states nor the industry are yet adequately prepared for a smooth transition to the VAT regime. The VAT system presents a competitive and uniform taxation structure which is particularly relevant in the WTO setting. As the April 2002 deadline for the move for most states approaches, the CII has prepared a 10-point list of recommendations which, it feels, would significantly help in VAT preparedness.

Various state governments have expressed apprehensions that a switch to VAT could lead to revenue losses. Allaying such concerns, the CII points out that international experience on VAT has shown positive results in terms of revenue. Practically none of the countries which have introduced VAT have lost revenue. The states exchequer should also benefit because the tax base will be widened and the entire value addition occurring after the first point of sale will be captured under VAT.

The scenario in the northern states shows that VAT laws have not yet been finalised though draft documents are in place in Haryana, Delhi and Punjab. In Punjab, the CII has partnered the state government in drawing up an action plan to develop VAT preparedness in the state. A task force with four members each from industry (CII) and the government has been constituted to work on issues related to VAT.

Meanwhile, the CII (Northern Region) organised a Manufacturing Technology Mission to select member companies in Gurgaon and Noida on 18-19 October 2001.

Over 30 senior manufacturing-related personnel from the CII member companies comprised the delegation which visited world-class companies like Maruti Udyog, and LG Electronics.

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Andhra Bank opens Housing Fin branch
Tribune News Service

Chandigarh, October 19
Andhra Bank opened a specialised Housing Finance branch in Sector 34-A here today. Mr R.S. Gujral, Home Secretary, Union Territory, Chandigarh inaugurated the branch. Mr A. Muralidhar, Zonal Manager, Andhra Bank, New Delhi Zone, presided over the function.

Andhra Bank with turnover of Rs 26,000 crore has a growth rate of 27.82 per cent under deposits, and 31 per cent under advances, has the lowest NPAs of 2.55 pc among the public sector banks.

The bank plans to open six branches in Punjab and Haryana shortly, said Mr Murlidhar. The bank has already more than 1000 branches all over India.

This specialised branch will cater to the housing finance needs of the residents of Chandigarh, Panchkula, Mohali and nearby areas.

Mr Gujral asked the bank management to provide housing loan at cheaper rates.

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CORPORATE NEWS

Philips net at Rs 87 m

Mumbai, October 19
Philips India Ltd has posted a net profit of Rs 87 million for the quarter ended September 30, 2001 compared with a net loss of Rs 40.50 million in the corresponding period last fiscal.

Aventis Pharma net up

Aventis Pharma Ltd has posted a net profit of Rs 152 million for the quarter ended September 30, 2001 compared with Rs 123 million in the corresponding period, last fiscal.

Sonata Software net falls

Sonata Software Ltd has posted a net profit of Rs 61.83 million for the quarter ended September 30, 2001 compared with Rs 87.92 million in the corresponding period, last fiscal.

ITC net soars

ITC has posted a net profit of Rs 3,336.1 million for the quarter ended September 30, 2001 compared with Rs 2,586.20 million in the corresponding period last fiscal.

Sun Pharma net surges

Sun Pharmaceuticals Industries Ltd has posted a 49.66 per cent increase in net profit at Rs 48.19 crore for the quarter ended September 30, 2001 as compared to Rs 32.2 crore in the same period last fiscal. Agencies

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ROUND-UP

Boeing net up 7 pc

Washington, October 19
Boeing reported a 7 per cent rise in third-quarter net profit but warned plane deliveries will plunge after the terror attacks, which forced it to cut 20,000-30,000 jobs.

Net profit totalled $ 650 million.

July-September quarter, up from $ 609 million in the same period a year earlier.

Revenue surged 15 per cent to $ 13.687 billion.

Boeing took a net charge of $ 63 million for the first wave of 12,000 job cuts, which are to be completed by December 14, a total 20,000 to 30,000 posts are to be axed by the end of 2002. AFP

Sun Microsystems posts $ 180 m loss

San Jose, October 19
Stung by both the sluggish economy and sales slowdown following the terrorist attacks, sun Microsystems lost $ 180 million as sales slid 43 per cent in its fiscal first quarter.

For the three months ended September 30, Sun lost six cents per share, compared with a profit of $ 456 million, or 14 cents a share, in the same period last year, the high-end computer and software maker said yesterday.

Excluding special items, Sun lost $ 158 million, or five cents a share.

The results beat Wall Street’s reduced expectations. AP

Rolls-Royce slashes 5,000 jobs

London, October 19
Aero-engine maker Rolls-Royce Plc today said it would cut 5,000 jobs and reduce output across the group as the airline industry reels from a dramatic slowdown in demand for air travel.

Rolls-Royce said it would stick to previous targets for underlying earnings in 2001, but had lowered previous estimates for sales in some of its key businesses for the following year.

The company said the job cuts would see 3,800 workers go in Britain and 1,200 redundancies overseas. Rolls-Royce employs 43,000 workers in total.

Rolls-Royce is the latest company to suffer from a slump in the aviation industry, which was intensified by the September 11 attacks in the United States, when hijacked passenger planes crashed into landmark buildings, killing thousands. Reuters

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BIZ BRIEFS

Seminar
Shimla, October 19
At the two-day national seminar on “Commerce education in the new millennium” the participants emphasised on the areas relating to information technology and e-commerce common curriculum for commerce education at graduation and post-graduation level, new financial instruments in the capital market, according standards, corporate governance and communication skills, here today. OC

Vikson Finance
Chandigarh, October 19
Vikson Finance and Investment, started their On-line Depository Services today. It will benefit investors in trading at NSE/BSE & “F&O”. Mr V. Kumar of Vikson discussed with the investors regarding risk free trading strategies in the newly introduced “Future and Options” market. TNS

Procter & Gamble
Chandigarh, October 19
Procter & Gamble Home Products announced the launch of the new Pantene Pro-V range in India, which gives consumers five ‘end-looks’ for their hair. The product is a solution to this hair-misdiagnosis and the subsequent dissatisfaction with current hair, because New Pantene Pro V focuses on hair solutions rather than hair problems. TNS

Education loan
Bathinda, October 19
Mr S.S. Rahul, AGM, State Bank of India, Zonal Office Ludhiana, said that SBI could grant loan of Rs 5 lakh to students for education and the amount of loan could be extended to Rs 15 lakh if students want to go abroad for higher studies. He said this at a meeting in Muktsar. OC

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