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Thursday,
December 20, 2001, Chandigarh, India  
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Sinha
hints at reforms in financial sector
Banks wage
war against defaulters Concessions
fail to boost exports |
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Markfed to
modernise storage infrastructure Chamber’s
proposals for Haryana units East
West opens office in city Vintron
opens 60 retail showrooms
Notification
banning Pan Masala quashed
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Sinha
hints at reforms in financial sector New Delhi, December 19 Inaugurating the 81st annual session of
Assocham , Mr Sinha expressed confidence in the resilence of the Indian
economy, and said a 7 per cent plus GDP growth was “achievable on a
sustainable basis” provided “we are able to forge a partnership with
the intended beneficiaries of the economic reforms programme”. The
Finance Minister said the transformation in the mindset of the nation,
where anything under 7 per cent growth was unacceptable, will
automatically take care of the absence of consensus as “the people’s
pressure to perform will be on”, and added that time had come for us
to take quantum leaps in technology and devise policy measures to reap
the gains of efficiency improvements. Mr Sinha ruled out sectoral protection measures as the government had already committed itself to bringing down import tariff to ASEAN levels for imparting a competitive edge to the industry. “The
choice is not between an open and a partially open economy but between a
highly regulated and an open economy”, the Finance Minister said and
regretted that there was still an insistent clamour for protection from
some quarters. The government, had adopted a two-track approach towards investment in infrastructure projects. One was to create an enabling environment for the private sector to pump investments and two, wherever the private sector fights shy, the government would step in to fuel infrastructure investment needs. Mr Arun Shourie, Minister for Disinvestment and the Department of Development for North-East region regretted the misinformed opposition to disinvestment and in the current atmosphere of distrust, it would be unrealistic to expect raising of the disinvestment target to Rs 60,000 crore as suggested by the industry. Instead, the government would be happy if the modest expectation of Rs 2,500 crore proceeds from disinvestment was achieved during the year. The
Minister said, the government policy for aggressive disinvestment was
being scuttled by deep-seated vested interests of government servants
and contractors and lamented that the levels of public discourse in
India had stopped to such levels where owning responsibility for
solutions was being cynically avoided. Mr Shourie called for abiding by the rules and institutions laid out for governance and closer interaction between the industry and the Judiciary to create a better understanding of economic and industrial management among judges. He said the need of the hour was to focus on areas of reform not requiring legislative changes and appealed for industry-government partnership in blocking obstacles in the way of reforms.
SEBI Act
PTI adds: The government would bring in a bill to amend SEBI
Act and granting the capital market regulator more powers in the next
session of the Parliament. “The amendment to the SEBI Act is under
consideration. We are going through the procedures,” Finance Minister
Yashwant Sinha told reporters on the sidelines of a Assocham summit here
today. “We will hopefully be able to take it up in the next session
and not in this session,” he said.
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Banks
wage war against defaulters
New Delhi, December 19 “Wilful
defaulters should be jailed,” an angry Finance Minister Yashwant Sinha
said after reviewing public-sector banks, whose financial health has
been suffering under piles of non-performing assets (NPAs). Mr Sinha
asked banks to adopt a ‘twin approach’ of stringent action against
defaulters while providing reliefs to small borrowers who were eager to
pay back the principle amounts. The government also mooted an ‘Asset
Reconstruction Company’ (ARC) with a capital of Rs 200 crore while
encouraging HDFC and SBI to set up credit information bureaus for
disseminating information to banks about potential defaulters. Centre also sought to bring legislative changes through Insolvency and Securitisation bills to enable banks and FIs to recover their loans faster and reduce NPAs. The gravity of the problem can be perceived if one considers the thinning of profit margins on account of higher NPA provisions and tightening of asset classification rules by central banks worldwide including RBI in the near future. A
snapshot view of banks reveals that SBI Group’s gross NPAs mounted to
Rs 21,054 crore, which is 37.2 per cent of Rs 56,608 crore accumulated
by all the PSU banks till September. SBI alone amassed Rs 16,069 crore gross NPAs while its net NPAs were at Rs 6,346 crore or 6 per cent of its advances. SBI was followed by Bank of Baroda with gross NPAs of Rs 4,034 crore, Punjab National Bank (Rs 3,672 crore), Bank of India (Rs 3,629 crore) and Central Bank (Rs 3,240 crore). Canara
Bank, Dena Bank, Indian Bank and Union Bank of India also had gross NPAs
of over Rs 2,000 crore. While the larger banks could absorb the shock better, NPAs also plagued the financial healths of half a dozen weak banks. In percentage terms, Dena Bank topped the list with gross NPAs of 26 per cent of its advances, followed by United Bank of India (21 per cent), Indian Bank (20 per cent), Punjab & Sind Bank (19 per cent) and Allahabad Bank (17 per cent). The
ongoing economic slowdown may be responsible for temporary fiscal
disorder of FIs but the habit of not paying back loans is incurable and
the NPAs amassed as a result have been slowly crippling India’s
financial sector. IFCI, whose NPA amounted to over 20 per cent last fiscal, decided to crack down on defaulters. “We
have filed over 100 legal suits against defaulters. We have also issued
33 recovery certificates to specialised agencies to recover loans,”
IFCI Chairman V.P. Singh said. Banks too have initiated similar moves,
albeit silently and on a less aggressive scale, after RBI’s One-Time
Settlement (OTS) scheme failed to yield desired results. Allowing banks to continue with their own OTS schemes, Sinha asked banks to take the help of Lok Adalats to settle claims from borrowers apart from the conventional methods through the Debt Recovery Tribuals (DRTs). Notwithstanding
the difficult situations, some of the weak banks approached government
for bailouts. The government, however, told the weak banks to fight
their NPA-wars till the last breath. PTI
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Concessions
fail to boost exports
New Delhi, December 19 Apart from high cost of financing and various
other domestic factors, slowdown in exports, that came down to $ 20.96
billion in April-September this year against $ 21.39 billion during the
corresponding period last year, could be largely attributed to a global
recession, compounded by the terrorist strikes in the USA that floored
India’s high-growth IT sector. Coinciding with the pronounced slowdown, induced by absence of domestic demand, the decline in exports, against a 12 per cent growth target, came as a major blow to the government, forcing the Ministers of Commerce and Finance to start a joint initiative. Even as the government announced some concessions, including those on the front of export credit and duty drawback scheme in last two months, foreign exchange earners of the nation saw about 2 per cent fall in export growth so far during the current fiscal. So much so that the Finance Minister is forced to concede that realisation of indirect taxes particularly the Customs levy would be far too short of target. Exports,
which were hovering at double digit growth rates until April, fell to a
single digit and then into negative from July-August. PTI
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Markfed
to modernise storage infrastructure Chandigarh,
December 19 Mr Bains said Markfed is
likely to enter into a joint venture with Australian grain business
company Ausbulk who will visit Punjab next month. “We have planned
to put up a pilot project initially in joint venture with company for
which we are willing to spend around Rs 10 crore”, he said. He said the twin objective of the delegation was to find a consortium partner to participate in tenders likely to be floated by FCI for setting up bulk grain handling, storage and transportation facilities and for modernising foodgrain infrastructure facilities in Punjab. The
delegation also explored the possibilities of modernising our rail
road system for handling food grain as this might form a part of the
scope of tender which is likely to be floated under the National
Foodgrain Handling Storage and Transportation policy. “Efficient
wagon designs alone can reduce the weight of one wagon from 24 metric
tonnes in India to 17.2 MTs as it is there and hence improve the
loadability of each wagon from 48 MTs to 63 Mts. Our visit to
Queensland railroad in Brisbane is likely to fructify into a very
meaningful association”, he said. He also said that Markfed has explored the scope of exporting potatoes and kinnows to Singapore and will be sending the first trial consignments within this season. That
apart, the delegation also saw Pakistani kinnows being sold in
Singapore and Markfed hopes to match the prices to reach the Chinese
market in February , that is, around the Chinese new year. “We are
hopeful that we will find a good market for kinnnows and potatoes in
the South East Asia”, said Mr Bains. Mr J.S. Walia, Chairman,
Markfed, Mr S.S. Brar, Secretary Co-operation Punjab and Mr Birinder
Singh, Chief Manager Foodgrains and International Trade were the other
delegation members.
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Chamber’s
proposals for Haryana units Chandigarh, December 19 In a note submitted to the
committee, Mr P. K. Jain, Vice-President, PHDCCI, has said that the
draft composite application form prepared by the Haryana Government
needs to be pruned down considerably. He has also given recommendations
for the government’s decision of imposing cess on milk plants and the
decision of the Irrigation Department banning the discharge of trade
effluent and sewage in a canal.
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East
West opens office in city Chandigarh, December 19 Mr
S.S. Sandhu, a technocrat and a career engineer; Mr Gurbir Singh, a
Canadian; Mr J.S. Bhaika and Mr Amandeep Singh, both MBAs belonging to
Chandigarh, are on the Board of the company which specialises in
facilitating immigration as well as grant of student visa to Canada,
Australia, New Zealand and other countries.
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Vintron
opens 60 retail showrooms Chandigarh, December 19 According
to Mr Manish Agrawal, Director Operations, these showrooms will
provide a platform for the end user to touch and feel the product
range available to make a more conscious decision to buy right
product. Vintron is a primary manufacturer of board level products,
keyboards, mouse, modem, UPS, speakers and personal computers.
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Transport award Tourism fair Multiple Zones Britannia milk ‘Birla Plus’ |
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Video:
An
annual growth rate of over 7 per cent achievable, says the
Finance Minister.
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