Tuesday, October 23, 2001, Chandigarh, India






THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
B U S I N E S S

Credit policy pro-growth: Sinha
New Delhi, October 22
Finance Minister Yashwant Sinha today described the RBI’s monetary and credit policy as “bold and pro-growth” and said it would infuse much needed liquidity in the markets.

  • Industry welcomes cut

  • No change in investors’ preference

Bonds to dilute oil pool deficit
New Delhi, October 22
The government today said it will float tradeable bonds to oil companies to dilute the Oil Pool Account deficit before dismantling the administered price mechanism for petroleum products by April 1, 2002.

Eurasia Hongkong plans expansion
Chandigarh, October 22
Eurasia Hongkong , a ship management company, plans to expand its number of ships, by at least 75 per cent. This will open more opportunities for Indians who aspire to join merchant navy in the company which has almost 95 per cent of its staff from India.

Take action against defaulters: AIBOC
Chandigarh, October 22
All-India Banks Officers Confederation urged the government to take immediate steps for the recovery of NPAs in the banks. The AIBOC demanded that the defaulters should be tried under criminal offence, and the recovery of the banks’ dues should be on the lines of recovery of land revenues. 



EARLIER STORIES
 

Punjab plans livestock co-ops
Chandigarh, October 22
Taking advantage of 6,200-odd milk producers’ co-operative societies Punjab Milkfed proposes to set up ‘’livestock improvement co-operatives’’. A two-member team, comprising Mark O’Conner and David Sellars from the LIC — Livestock Improvement Corporation — New Zealand will visit Punjab on October 28 to study the ground conditions for the proposed joint venture.

SBP launches festival loan scheme
Chandigarh, October 22
State Bank of Patiala today launched a new scheme “SBP-Utsav” for granting loans to permanent employees of State/ Centre Government Public Sector Undertakings, Corporations and Private Sector Undertakings for celebrating festivals of their choice like Durga Pooja, Divali, Gurpurab, Christmas, Id etc.

1 lakh visit CII fair
Ludhiana, October 22
The four-day long CII fair, which concluded here today, evoked good response from customers and businessmen. The organisers said in view of the recession and the impact of the war in Afghanistan, the response was more than expected.

ANALYST’S DIARY

It’s the timing that matters
A
few months ago, a broking house we are professionally associated with requested us to compile a research report on BSES. Mr Avinash Ahuja, who heads our research team, got cracking on this assignment and presented a report. Hereunder are some excerpts therefrom.

CORPORATE NEWS

HDFC Life declares first bonus
Chandigarh, October 22

The Directors of HDFC Standard Life today declared the company’s first bonus for participating policyholders. It declared a reversionary bonus at the annual rate of 4.25 per cent of the sum assured for all Endowment Assurance policies issued in the calendar year 2000, that were still paying premiums on December, 31 2000, and still in force on September, 30 2001.

  • Warren Tea net dips

  • Unichem net jumps

ROUND-UP

FIR lodged against Jindal Industries
Kolkata, October 22
The Steel Authority of India Limited has lodged a First Information Report with the Faridabad Police Station in against Jindal Industries Limited for dishonouring a cheque of Rs 3,42,22,498 issued in lieu of the delivery of materials.

  • ‘Kutumb’ for ‘Kahin Diya Jale...’

  • Usha ties up with Hunter Fan

  • Reliance to market Lycra fibresTop







 

Credit policy pro-growth: Sinha

New Delhi, October 22
Finance Minister Yashwant Sinha today described the RBI’s monetary and credit policy as “bold and pro-growth” and said it would infuse much needed liquidity in the markets.

“The RBI has come out with a forward looking policy for the next six months. Overall, the credit policy announced by the RBI today is pro-growth and it is now up to the trade and industry and the government to play their part,” Sinha said welcoming the busy-season policy.

Sinha told reporters that the decision to cut bank rate by 50 basis points and CRR by 2 per cent would make available about Rs 6,000 crore additional funds to banks for lending.

It is for the first time that CRR has been brought below 6 per cent. This will increase liquidity and increase lendable surpluses with banks, he said.

The Finance Minister expected that the impetus given in the RBI policy would result in growth rate on the higher side of the band projected by the Central bank.

Industry welcomes cut

Leading industry bodies and trade associations today welcomed the credit policy announced by the RBI saying reduction in the bank rate and CRR would certainly lead to reduction in lending rates.

CII President Sanjiv Goenka said “it was an ideal combination of measures and would send positive signals to the stock market and industry which was expecting a reduction.”

CRR reduction would immediately release Rs 8,000 crore into the system and would play a greater role in inducing banks to begin cutting deposit and lending rates, Goenka said.

FICCI, while welcoming the cut in bank rate, said “this must lead to reduction in prime lending rates (PLRs) by at least one percentage point.”

FICCI President Chirayu Amin said “the overall monetary policy stance of providing adequate liquidity for growth and revival of investment demand, flexibility in interest rate regime, maintaining option for further reduction in interest rates will greatly help the economy to overcome the present slackness.”

Assocham President Raghu Mody termed the measures as “bold and investor friendly” and said the RBI Governor has been pragmatic in taking into account the present milieu in the world as well as the domestic economy.

Fieo President K.K. Jain also welcomed the reduction in the bank rate and CRR and expressed hope that the commercial banks will pass on the benefits to the industry and exporters in particular.

CII president also welcomed the implementation of prudential measures of the RBI, including the setting up of credit informtion bureau to collect, process and share credit information on the borrowers among banks and FIIs.

No change in investors’ preference

The RBI Governor Bimal Jalan today said the bank rate cut will not change the basic pattern of investors’ preference for deposits.

“We do not see a fundamental change in the structure of investment with this measure (rate cut) introduced by us”, Jalan told reporters here after announcing the apex bank’s mid-term review of monetary and credit policy for 2001-02. PTI
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Bonds to dilute oil pool deficit
Tribune News Service

New Delhi, October 22
The government today said it will float tradeable bonds to oil companies to dilute the Oil Pool Account deficit before dismantling the administered price mechanism for petroleum products by April 1, 2002.

The Oil Pool Account, a complex mechanism to maintain stability of oil prices in the domestic market despite vagaries of international market prices, would have Rs 13,000 crore as deficit, which is the amount payable to the oil companies by the Government.

The Petroleum Minister, Mr Ram Naik, told newspersons after a meeting with the Finance Minister, Mr Yashwant Sinha, here that the government would initially liquidate upto 80 per cent of the oil pool deficit by issuing tradeable bonds to oil companies.

It has also been decided that from April 1, 2002, whatever subsidy is given on kerosene and cooking gas would be provided for in the Union Budget.

The government is committed to bringing down subsidies on kerosene from the existing 41 per cent to 33.3 per cent and on cooking gas from the existing 45 per cent to 15 per cent.

Mr Naik felt that such a sharp reduction in subsidy rates would be quite a burden on the customer and he may not be able to bear it.

He said in monetary terms the reduction in subsidy would mean increasing the price of kerosene by Rs 1.20 and that of LPG cylinder by Rs 90 to Rs 100.
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Eurasia Hongkong plans expansion
Shveta Pathak
Tribune News Service

Chandigarh, October 22
Eurasia Hongkong , a ship management company, plans to expand its number of ships, by at least 75 per cent. This will open more opportunities for Indians who aspire to join merchant navy in the company which has almost 95 per cent of its staff from India.

Captain H S Gill, Resident Manager of Paramount Shipping and Management Company, who looks after the Indian operations of the Schulte group disclosed this to The Tribune here today.

Capt Gill was on a three-day tour to the region on a recruitment drive. The Bernard Schulte group owns and manages more than 350 ships, including tankers, general carriers and bulk cargo vessels. For managing operations in the East, the group established Eurasia ship management company in Hongkong.

The region assumes importance as it forms 10 per cent seafarers. “Despite being far from the sea, people in the region contribute substantially to the global requirements”, said Capt Gill.

India seafarers, however, are at threat from the Chinese and those from the East Europeans, due to their being comparatively cheaper. “India has around 45,000 active seafarers and the number is almost stagnant for the last decade. Infact, a marginal downfall in the numbers has been witnessed and it is the high time India should start working towards improving this industry which fetches huge amounts of foreign exchange to the country”, said he. 
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Take action against defaulters: AIBOC
Tribune News Service

Chandigarh, October 22
All-India Banks Officers Confederation (AIBOC) urged the government to take immediate steps for the recovery of NPAs in the banks. The AIBOC demanded that the defaulters should be tried under criminal offence, and the recovery of the banks’ dues should be on the lines of recovery of land revenues. The defaulters list should also be published said Mr R.C. Agarwal, Joint General Secretary, the AIBOC in the press conference here today.

Mr Agarwal said the government’s move to privatise the public sector banks is not in the interest of the country. It will result in closure of more than 22000 branches of rural and semi-urban areas and will push the industry to pre-69 period.

He also felt that the industrial houses are trying to privatise the banking industry with an intention to capture its business of more than 16 lakh crore, 57,000 branches, more than 9 lakh officers and workmen and several billion worth assets with the result they donot required to pay their dues which otherwise will become NPA.

Mr Agarwal also said the VRS in the banks was brought as a part of the privatisation move. However in spite of huge benefits offered to the officers and workmen, on an average 12 per cent have opted for VRS. This has resulted in a financial burden of Rs 15000 crore due to monetary compensation paid to VRS optees and additional work load on the remaining officers and employees.
Top

 

Punjab plans livestock co-ops
P.P.S. Gill
Tribune News Service

Chandigarh, October 22
Taking advantage of 6,200-odd milk producers’ co-operative societies Punjab Milkfed proposes to set up ‘’livestock improvement co-operatives’’.

A two-member team, comprising Mark O’Conner and David Sellars from the LIC — Livestock Improvement Corporation — New Zealand will visit Punjab on October 28 to study the ground conditions for the proposed joint venture. Earlier, Punjab Milkfed delegation had visited Australia, New Zealand and Singapore in August last for selection of genetic material, dairy farm technology and explore export markets for Milkfed products in and around Singapore.

If the proposals are mutually acceptable, Punjab will set up a livestock improvement project on a 300 acre farm in Ropar district. The milk producers’ societies have a membership of nearly 4 lakh. The per member milch animals average is three. Though Punjab has been into artificial insemination for decades and nearly 70 per cent cattle is cross-bred, it is being felt that genetic improvement is imperative to further raise milk production. Dairy is also perceived as a viable economic alternative to agriculture.

Only last week the society for the advancement of research in animal sciences and college of veterinary sciences at Punjab Agricultural University, Ludhiana, held a national symposium on import and utilisation of exotic germ-plasm of dairy cattle. Veterinary scientists like M S Oberoi had cautioned on the introduction of new diseases of dairy animals due to import of germ-plasm. He suggested setting up of a microbiology laboratory exclusively to evaluate bovine semen and advocated accredited centers for certifying ‘’healthy’’ semen. The participants were made aware of the regulations governing imports and what was required in the post WTO regime.
Top


 

SBP launches festival loan scheme
Tribune News Service

Chandigarh, October 22
State Bank of Patiala today launched a new scheme “SBP-Utsav” for granting loans to permanent employees of State/ Centre Government Public Sector Undertakings, Corporations and Private Sector Undertakings for celebrating festivals of their choice like Durga Pooja, Divali, Gurpurab, Christmas, Id etc. The loan amount can range up to Rs 25,000 and carries rate of interest of 14 per cent to 14.75 per cent. The loan is repayable in 10 equal monthly instalments.

The scheme has come as a Bonanza to the employees on the eve of festival season and has become instantly popular. A function was organised in its Rajindra Hospital branch and another at Bahadurgarh branch where J.R. Devgan, General Manager (Operations) of the bank has launched the scheme and handed over loan disbursement cheques to 40 employees of various organisations. Mr S.K. Sareen , DGM, was present on the occasion.
Top

 

1 lakh visit CII fair
Tribune News Service

Ludhiana, October 22
The four-day long CII fair, which concluded here today, evoked good response from customers and businessmen. The organisers said in view of the recession and the impact of the war in Afghanistan, the response was more than expected.

More than one lakh people from the city and the neighbouring towns, including Jalandhar and Amritsar, visited the fair. They made inquiries to purchase products worth more than Rs 15 crore. Companies are hopeful that the actual purchases in the coming weeks would be near about this figure. They also sold products worth a more than Rs 1 crore also.

Huge crowds were seen at the stalls in different sections. Mr Pikender Singh, Exhibition in charge, said out of 130 companies about 40 per cent had participated for the first time in the fair.
Top

 

BHEL joins Global Compact
Tribune News Service

New Delhi, October 22
BHEL has joined the United Nations’ “Global Compact” — a partnership between the UN, the business community, international labour and NGOs. Global Compact would provide a forum for BHEL to work in tandem with other members for upgrading corporate practices.
Top

 
ANALYST’S DIARY

It’s the timing that matters
Ashok Kumar

A few months ago, a broking house we are professionally associated with requested us to compile a research report on BSES. Mr Avinash Ahuja, who heads our research team, got cracking on this assignment and presented a report. Hereunder are some excerpts therefrom.

Although BSES began as a power distribution company, over the years, it has expanded its scope of operations to power generation too. It makes business sense, for this reduces the company’s dependence on state electricity boards and other companies for power requirements—and, potentially, improves operating margins. The company’s status as the exclusive power distribution licencee in north Mumbai is opening up new business opportunities for it. BSES has the ‘right of way’ to lay electrical cables in north Mumbai, a network it is using to set up an optical fibre cable backbone. BSES plans to use this backbone to provide high-speed bandwidth facilities, which companies can use for value-added telecom activities such as voice and data transfer. It has also launched its Internet service, powersurfer. net, in Mumbai. It is still early for the telecom initiatives. The network and subterranean ducting that BSES controls is an asset of strategic value. If the company manages to use it well, it could give it a large upside.

BSES is currently implementing a bevy of infrastructure projects ranging from power generation and distribution to upgradation of electricity grids to telecom and coal washeries. It will be investing Rs 873 crore to upgrade and modernise its electricity distribution system over a five-year period. The company has already made a capital expenditure of Rs 182 crore of its five-year plan to strengthen its distribution systems. With an exclusive licence to distribute power in north Mumbai and a 500 MW power plant in Dahanu, Maharashtra, BSES is one of the few companies in the country that produce as well as distribute power. In 2000-01, the Dahanu plant recorded a plant load factor of around 90 per cent (a measure of a power plant’s operational efficiency) higher than the industry average of around 68 per cent. The company’s T&D (transmission and distribution) losses at around 10 per cent are significantly lower than the industry average of 18 per cent.

Fine thus far, but what about the flip side? BSES has been embroiled in a dispute with TEC over the payment of stand-by electricity charges to the Maharashtra State Electricity Board (MSEB) since November 1998. MSEB has an agreement to provide TEC stand-by electricity. TEC, in turn, has a similar pact with BSES. MSEB is demanding Rs 182 crore from TEC for providing the facility, which TEC is asking BSES to pay. BSES has paid TEC Rs 30 crore, but expressed an inability to pay the rest without hiking tarrifs. The matter is currently with the Maharashtra Electricity Regulation Commission, and an unfavourable ruling could dent BSES’s profits-but only temporarily.

The country is grappling with an economic slowdown. Core sector growth continues to slacken. In its core business, the contracts division is facing a slowdown. The division undertakes project work for power companies. The company registered a decline in income despite a full order book. BSES is making losses in all the three subsidiaries in Orissa. The company hopes that one of them will break even by Q4 FY2002 and the other two in another year or two. The company is negotiating with different users to increase the consumption of power in the state. BSES is not too upbeat about freeing of returns in the distribution business. There are only two power sector companies — Tata Power and BSES — that are earning 16 per cent rate of return as of now. Others like Ahmedabad Electricity Company and CSES are not even earning close to that. The question of higher return arises only when players achieve this rate of return.

Overall, the positives seem to outweigh the negatives. The company’s foray into telecom is a positive signal for the company. New power capacity will reduce BSES’s dependence on TEC, as well as boost revenues. And then, there is the Reliance connection, which crops up every now and then, and drives up the stock. Although I have my personal reservations about any the benefits for BSES from an alliance with the Reliance group, the road ahead, otherwise appears well lit. Does all this mean one should buy into this stock immediately? Not really, it is timing that matters in the market.Top

 
CORPORATE NEWS

HDFC Life declares first bonus

Chandigarh, October 22
The Directors of HDFC Standard Life today declared the company’s first bonus for participating policyholders. It declared a reversionary bonus at the annual rate of 4.25 per cent of the sum assured for all Endowment Assurance policies issued in the calendar year 2000, that were still paying premiums on December, 31 2000, and still in force on September, 30 2001.

Commenting on the level of bonus Mr Deepak Parekh, Chairman, said “we have set an attractive and realistic level of reversionary bonus for the current economic environment.

Warren Tea net dips

Warren Tea Limited reporterd a lower net profit of Rs 7.82 crore during the second quarter of 2001-2002 against Rs 9.64 crore in the corresponding quarter of previous fiscal.

Unichem net jumps

Unichem Laboratories Ltd. has reported a 38 per cent jump in its net profit during the second quarter of the financial year 2001-02, over the similar period in previous year. Agencies 
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ROUND-UP

FIR lodged against Jindal Industries

Kolkata, October 22
The Steel Authority of India Limited (SAIL) has lodged a First Information Report with the Faridabad Police Station in against Jindal Industries Limited for dishonouring a cheque of Rs 3,42,22,498 issued in lieu of the delivery of materials.

According to a press release the Jindal Industries Ltd. Had issued the cheque on Punjab National Bank against supplies of materials which was dishonoured because the signatories were authorised to issue cheque up to Rs one crore only.

The SAIL supplied the materials to Jindal Industries Ltd. directly from Bokaro Steel Plant. The release said that there was no complaint about their supplies to the private company. UNI

‘Kutumb’ for ‘Kahin Diya Jale...’

MUMBAI: “Kutumb”, another daily soap from Ekta Kapoor’s Balaji Telefilms will be telecast on Sony Television from October 29 replacing “Kahin Diya Jale Kahin Jiya” on the 9.30 pm slot.

With this, Ekta’s production house will cover the daily soap prime time slot between 9 pm and 11 pm on two main satellite channels during weekdays — 9 pm-10 pm — Kkusum and Kutumb on Sony, while 10 pm to 11 pm — Kahaani Ghar Ghar Ki and Kyonki Saas Bhi Kabhi Bahu Thi on Star Plus.

Sony is no doubt upbeat with another Balaji show joining its bandwagon. The channel’s programming strategy is to build up the 9 pm-10 pm prime time band and maintain the lead in TRPs in their Friday night lineup and the Sunday mythologicals like Sri Krishna, Sree Ganesh and Mahabharat, says Nachiket Pantvaidya, Vice-President — Programming and Production. UNI

Usha ties up with Hunter Fan

NEW DELHI: Usha International today announced a tieup with US major Hunter Fan Company to launch premium, co-branded fans called Usha Hunter in India.

Usha International will import Hunter fans and sell these in the Indian market, along side the Usha branded fans here. PTI

Reliance to market Lycra fibres

NEW DELHI: Lycra, the much sought after fancy fabric of youngsters, will now be available in India following a strategic partnership between Reliance Industries and DuPont Apparel and Textile Sciences.

A memorandum of understanding signed by the two sides today provided for the exclusive distribution and development of the market for DuPont Lycra stretch fabric in India.

Terms of the partnership include an arrangement under which Reliance would use its countrywide distribution network to leverage its long-standing customer relationships in the textile industry built on its Recron polyester products to develop and promote Lycra in India. TNS

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BIZ BRIEFS

Goodwill Network
Yamunanagar, October 22
Godwill Network launched its operations in Haryana. About 200 associates attended the launch seminar at Jagadhri yesterday. Mr Parjinder S. Sandhu, Managing Director, said they were providing course from Cambridge and Oxford Universities, the UK and California University (USA), under special programme to provide international quality IT education. TNS

SBI branch
Chandigarh, October 22
The SBI Chandigarh circle has fully computerised its Focal Point, Rajpura branch. The branch was inaugurated by Mr D.K. Sood, Manager (commercial) Hindustan Levers, Rajpura, today. The bank also launched its multi-optional deposit scheme, savings plus scheme salary plus scheme for individual customers. TNS

Markfed
Chandigarh, October 22
Markfed will organise a workshop on bulk food storage at the CII tomorrow. Co-operation Minister Ranjit Singh Brahmpura will inaugurate the workshop. TNS

Connect phone
Chandigarh, October 22
Connect launched its basic telephone services at Hoshiarpur today. The company has already launched its operations in Mohali, Patiala, Ludhiana, Khanna, Jalandhar, Phagwara, Amritsar and Chandigarh. TNS
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