SPECIAL COVERAGE
CHANDIGARH

LUDHIANA

DELHI


THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
B U S I N E S S

EPF rate cut to 8.5 per cent
TUs threaten stir; loss to exchequer still pegged at Rs 206 cr
New Delhi, August 9
In a major jolt to more than 30 million salaried employees, the Employees Provident Fund Organisation (EPFO) board today reduced the provident fund interest rate to 8.5 per cent, amid protests from the trade unions threatening to launch nationwide agitation.

Union Labour Minister Sis Ram Ola with members of the EPF Board before their meeting in New Delhi on Monday Union Labour Minister Sis Ram Ola with members of the EPF Board before their meeting in New Delhi on Monday.
— PTI photo

Rumours cause run on South Indian Coop Bank
RBI freezes assets
Mumbai, August 9
Rumours of South Indian Cooperative Bank going bust caused thousands of depositors to queue up outside the branch’s offices across Maharashtra today and yesterday.

Sebi begins probe into GTB trading
Mumbai, August 9
The Securities and Exchange Board of India (Sebi) has launched a full-fledged probe into the trading in Global Trust Bank stock following allegations of insider-trading just before it was placed under moratorium last month.


A member of the New York City Police Department’s Emergency Services Unit guards the New York Stock Exchange building on Monday A member of the New York City Police Department’s Emergency Services Unit guards the New York Stock Exchange building on Monday. New information surfaced that in addition to financial locations, Al Qaida has also targeted tourism heliports in New York. — Reuters


A woman looks at a soccer ball made of pure gold at Mitsukoshi Department Store in Tokyo on Monday
A woman looks at a soccer ball made of pure gold at Mitsukoshi Department Store in Tokyo on Monday. The department store started to sell the golden ball at a price of $1,82,000 (20.04 million yen) as a part of main features for its bargain sale. A customer bought it just after the opening of the sale. — AFP


EARLIER STORIES

 

India third largest fertiliser producer
New Delhi, August 9
India has emerged as the third largest producer of fertiliser in the world with the rapid increase in the installed capacity for production of nitrogen to 119.98 lakh MT and 54.20 lakh MT of phosphatic nutrient as on March 31, 2004.

Mani Shankar Aiyar Global oil price fluctuations irk Aiyar
New Delhi, August 9
Petroleum Minister Mani Shankar Aiyar has asked Finance Minister P Chidambaram to replace the existing ad valorem duty structure on petrol and diesel with specific duties to minimise the impact of the surge in global crude oil prices. Mr Aiyar has also asked the Ministry to exempt domestic cooking gas LPG and kerosene from customs and excise duties.

BANK ACCOUNT

GTB posts loss of Rs 812 crore
Mumbai, August 9
The troubled Global Trust Bank has posted a net loss of Rs 812.38 crore for the year ended March 31, 2004. The total income for the FY-04 stood at Rs 515.25 crore while the total expenditure stood at Rs 594.04 crore.

  • BoB in Malaysia

  • Bank of Punjab

  • Union Bank of India

AUTO SCENE

Merc makers plan mini-bus for India
Bangalore, August 9
DaimlerChrysler India Ltd., the wholly-owned subsidiary of the German auto major, will soon introduce 8-10-seat mini buses in India for the light commercial transport segment.

  • Rover in talks with Tata

  • Sonalika Tractors

Graphic: Foreign Direct Investment, January 1991 to March 2004 

The setting sun reflects on office buildings in Sydney on Monday The setting sun reflects on office buildings in Sydney on Monday. Australia's central bank said on Monday it expected to increase interest rates again in the current economic expansion and was closely watching inflation, which appeared to be bottoming at a higher-than-expected rate. — Reuters

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EPF rate cut to 8.5 per cent
TUs threaten stir; loss to exchequer still pegged at Rs 206 cr
Tribune News Service

New Delhi, August 9
In a major jolt to more than 30 million salaried employees, the Employees Provident Fund Organisation (EPFO) board today reduced the provident fund interest rate to 8.5 per cent, amid protests from the trade unions threatening to launch nationwide agitation.

After a four-and-a half hour stormy meeting, the board in a majority decision decided to reduce the interest rate from the existing 9.5 per cent to 8.5 per cent as an interim measure.

The Chairman of the Central Board of Trustees and Union Labour Minister Sis Ram Ola told reporters that “there was a broad consensus on the rate, which would come down from 9.5 per cent now to 8.5 per cent.” At the fourth meeting of the EPFO board, which met here to decide the interest rate, it was decided that the interim dividend would be reviewed in the last quarter of the fiscal year.

Even with the rate of interest fixed at 8.5 per cent, it is estimated that the loss to exchequer will amount to Rs 206.45 crore.

Secretary of the All-India Trade Union Congress G. L. Sachdev told The Tribune that the government with the support of the employers had fixed the interim interest rate. “All trade unions are opposed to this and the Act does not provide for an interim interest rate,” he said.

Terming the government’s action as “unfortunate” and a result of “arm-twisting by the Union Finance Ministry”, he said this was the first time that the decision had been taken by a majority voting.

However, the Congress-affiliated Intuc, siding with Mr Ola, said, “8.5 per cent is okay with us.”

Left unions, including Citu and Aituc, also expressed displeasure at the interest rate cut and said it would organise nationwide protests on August 30. The BJP Bharatiya Mazdoor Sangh threatened to stage a demonstration in Delhi on August 20.

Describing the cut in the PF rate as a “betrayal” of the working class by the UPA government, BJP spokesperson V. K. Malhotra said the decision was “anti-poor.”

“When we had pegged the interest rate at 9.5 per cent, the Congress and the Left parties had launched an agitation against the NDA government, but they are eating their words,” he said.

He accused the Left parties, which are supporting the government from outside, of “crawling and betraying the working class.”

Terming the decision as “unfortunate”, CPM leader Nilotpal Basu said the decision had been taken “unmindful of the concerns of the common people.”

Stating that the Left parties would stage a protest against the decision, he said they would collectively discuss the matter.
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Rumours cause run on South Indian Coop Bank
RBI freezes assets
Tribune News Service & PTI

Mumbai, August 9
Rumours of South Indian Cooperative Bank going bust caused thousands of depositors to queue up outside the branch’s offices across Maharashtra today and yesterday.

Following a run on deposits, the Reserve Bank of India today froze the assets of South Indian Cooperative Bank Ltd restricted its granting of fresh loans, renewal of advances and fixed a ceiling of Rs 1,000 on withdrawals from savings or current account.

The queues began in a small way on Sunday at a handful of branches open on weekends and increased today. Bank officials informed the media that Rs 6 crore was withdrawn by edgy depositors by Monday afternoon. The rumour quickly spread in housing colonies populated by residents from Kerala and Tamil Nadu, who form a bulk of the bank’s depositors. The grapevine had it that the bank’s non-performing assets (NPAs), or dud loans, ran into several thousand crores of rupees and the institution was not in a position to pay off depositors.

The run on the bank worsened during the day with the Reserve Bank of India making a guarded statement on its financial health. “We are looking into the matter,” a Reserve Bank of India (RBI) spokesperson said without giving any indication about the bank’s NPAs and other financial liabilities.

Later, a team from the Reserve Bank of India descended on the bank’s offices to inspect its books, further adding to the panic. South Indian Cooperative Bank has 13 branches in Mumbai, Thane and Raigad districts of Maharashtra.

Its Chairman Raghavan Sarathy said in a statement that the bank had enough liquidity as well as cash with Maharashtra State Cooperative Bank to meet the demand of depositors.

Bank Secretary P. Krishnakumar told reporters here that the total deposits and advances of the bank for the year ended March 2004 stood at Rs 251 crore and Rs 139 crore, respectively, while gross NPAs were 32 to 35 per cent of the advances.

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Sebi begins probe into GTB trading
Tribune News Service

Mumbai, August 9
The Securities and Exchange Board of India (Sebi) has launched a full-fledged probe into the trading in Global Trust Bank stock following allegations of insider-trading just before it was placed under moratorium last month.

Sebi Chairman G. N. Bajpai told reporters here that the regulatory body was examining trading data to determine whether bank officials sold stock.

The government had placed the ailing private sector bank under a three-month moratorium on July 24 and later initiated its merger with the Oriental Bank of Commerce.
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India third largest fertiliser producer
Tribune News Service

New Delhi, August 9
India has emerged as the third largest producer of fertiliser in the world with the rapid increase in the installed capacity for production of nitrogen to 119.98 lakh MT and 54.20 lakh MT of phosphatic nutrient as on March 31, 2004.

The rapid build-up of the fertiliser production capacity in the country has been achieved as a result of a favourable policy environment facilitating large investments in the public, cooperative and private sectors, an official press note said today.

With this, the country had achieved near self-sufficiency in the production capacity of urea and DAP. India could now manage its requirement of these fertilisers from the indigenous industry, the note quoted the annual report of the Department of Fertilisers, Ministry of Chemicals and Fertilisers.

The domestic fertiliser industry has attained the level of capacity utilisation that compares favourably with others in the world. The capacity utilisation during 2002-03 and 2003-04 was 87.2 per cent and 88.6 per cent for nitrogen and 72.8 per cent and 67 per cent for phosphate, respectively.

The capacity utilisation of the fertiliser industry is expected to improve through revamping, modernisation of existing plants and closure of unviable capacity of sick fertiliser units.

According to the report, the department was in the process of formulating a long-term fertiliser policy which would aim at a phased deregulation of the fertiliser sector.

A committee was constituted under the chairmanship of the Secretary, Fertilizers, with representatives from the fertiliser industry, media and others to examine responses to the draft policy.

The availability of urea, which is the only fertiliser under price and partial movement control of government, remained satisfactory throughout the kharif 2003 season and rabi 2003-04. DAP and MOP, the major decontrolled and decanalised fertilisers are freely imported.

In kharif 2003, 4.65 lakh MTs of DAP and 10.81 lakh MTs of MOP were imported.

Regarding joint ventures abroad, the report points out that due to constraints in the availability of gas, which is the preferred feedstock for the production of nitrogenous fertilisers and the near-total dependence on imported raw materials for the production of phosphatic fertilisers, the government has been encouraging Indian companies to establish joint venture production facilities, with buy-back arrangement, in other countries, which have rich reserves of natural gas and rock phosphate.
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Global oil price fluctuations irk Aiyar

New Delhi, August 9
Petroleum Minister Mani Shankar Aiyar has asked Finance Minister P Chidambaram to replace the existing ad valorem duty structure on petrol and diesel with specific duties to minimise the impact of the surge in global crude oil prices.

Mr Aiyar has also asked the Ministry to exempt domestic cooking gas LPG and kerosene from customs and excise duties.

“With a view to insulate consumers from excessive volatility in international oil prices, we request you to please consider replacing the existing ad valorem duty structure on petroleum products with specific duties,” he wrote to Mr Chidambaram.

The hike in prices of global crude oil, on which India is 70 per cent import dependent to meet its requirement, have led to rise in petrol and diesel prices by Rs 3.10 and Rs 2.42 a litre (in Delhi) in June-July.

While petrol and diesel prices were hiked by Rs 1.10 and Rs 1.42 per litre from August 1, another hike of Rs 1 to 1.5 per litre looks imminent with crude touching an all-time high of close to $ 45 a barrel.

Every time crude prices go up, they have a cascading affect on the domestic retail prices due to levy of ad valorem duty structure. The tax component in retail price, expressed in percentage, go up every time there is an increase in the cost of raw material, sources said.

Specific duty would not only be able to contain the cascading effect of current duties, but also protect revenue mobilisation targets. — PTI
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Bank Account

GTB posts loss of Rs 812 crore

Mumbai, August 9
The troubled Global Trust Bank has posted a net loss of Rs 812.38 crore for the year ended March 31, 2004.

The total income for the FY-04 stood at Rs 515.25 crore while the total expenditure stood at Rs 594.04 crore, the private sector bank, which is under a moratorium since July 24 and is proposed to be merged with the Oriental Bank of Commerce, informed the National Stock Exchange today.

The provisioning and contingencies for the reporting year stood at Rs 708.19 crore, the bank said after its board meeting in Secunderabad.

BoB in Malaysia

Bank of Baroda (BoB) today announced it is opening an office in Kuala Lumpur tomorrow, marking its entry into South-East Asia. It will cater to information and liaison requirements of Malaysian and Indian businesses, a release said. It said the bank is also planning to start an office in Bangkok and is awaiting approval from regulatory authorities.

Bank of Punjab

Private sector Bank of Punjab today said it has joined India’s largest shared ATM network, Cashnet TM and announced online mobile recharge for its customers. With this tie-up, nine million cardholders of Bank of Punjab will have access to all 3100 ATMs of the consortium bank.

Union Bank of India

Union Bank of India today launched the core banking solution (CBS) service in their Sector 40 C, Chandigarh branch. Mr I.D. Gupta, a customer of the branch, inaugurated the CBS. This facility will enable the customers to avail online banking in 361 branches across the country. — TNS, Agencies
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Auto Scene

Merc makers plan mini-bus for India

Bangalore, August 9
DaimlerChrysler India Ltd., the wholly-owned subsidiary of the German auto major, will soon introduce 8-10-seat mini buses in India for the light commercial transport segment.

The Pune-based subsidiary will import the mini-buses in completely built unit form from the auto major’s manufacturing facility in Spain under the EPCG (export promotion capital goods) scheme.

The mini-bus, christened Viana, will be priced around Rs 2.3 million. The vehicles will be customised at the Pune facility from September-October to meet specific requirements of Indian customers.

“The mini-buses will be mainly targeted at the hospitality and tourism sectors. Tourist operators and five-star hotels in select cities have shown interest in buying Viana as it accommodates 8-10 persons and provides luxurious transportation,” DaimlerChrysler India managing director Hans-Michel Huber said.

Several customers of the company’s Mercedes Benz cars, especially multinationals and top Indian corporates, have expressed willingness to buy Viana to ferry their VIP guests.

“Though we are consolidating our presence in the premium D segment for passenger cars with Mercedes Benz variants, we are keen on entering the light commercial vehicle segment in India with a niche product like Viana,” Huber said.

“With the Indian economy on the upswing, we see demand for mini-buses going up from the hospitality sector as more business executives and high-profile tourists will make trips to tourist destinations and health resorts after or during their official engagements.” The German official, who was here for the launch of the new look Mercedes-Benz C-class, said the parent company would be outsourcing auto components and software applications worth $100 million from India this year.

Rover in talks with Tata

Hit by low sales British car maker MG Rover is reportedly holding talks with its Indian partner, Tata Motors, for cutting the price of its latest model, CityRovers in addition to other measures to boost sales, media reports said today.

In the first six months only 4,600 CityRovers were sold in Britain, against a target of 20,000 cars, forcing Rover to slash the price by £ 1000, the Telegraph reported.

MG Rover began selling Tata’s Indica cars as CityRovers in the UK to compete in the country’s super-mini car market.

“Going into a partnership saved the company any added costs of developing a new car. But in the first six months of its launch, the car has failed to attract the British customer,” the newspaper said.

Sonalika Tractors

Tractor maker Sonalika will soon begin exports of higher horse power (HP) Ceres range of Renault tractors, manufactured at its Hoshiarpur plant, and hopes to clock almost 10-fold increase in foreign shipments by 2007 at 10,000 units.

“We are expecting a tremendous growth in exports and feel we can be competitive in foreign markets. Together with Renault, we are looking at selling tractors with horse power between 70 and 100,” Sonalika group chairman L.D. Mittal said.

Mr Mittal said Sonalika is looking at exporting its Solis range of hobby tractors to the US. — Agencies
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Foreign Direct Investment, January 1991 to March 2004

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BRIEFLY

BPO circular
New Delhi, August 9
Yielding to pressure from the IT-enabled Business Process Outsourcing (BPO) units, the Finance Ministry today withdrew its controversial circular on taxation of the sector. Several taxpayers, law firms as well as chartered accountant firms had made representations to the Finance Minister that the January 2 circular was not clear enough and was giving rise to various controversies, particularly with reference to “core” and “non-core” activities. — UNI

StanChart MF
Chandigarh, August 9
Standard Chartered Mutual Fund (SCMF) today announced the launch of an IPO for Standard Chartered All Seasons Bond Fund (SCASBF). The public issue for SCASBF will be open for subscription from August 9 and close on August 27. — TNS

Tube Products
Chandigarh, August 9
The Mohali plant of Tube Products of India has started off with the total productivity management initiative. This system will improve the entire production process as per the company press note. The plant was acquired by the Murugappa Group as a part of the Tube Investments of India in November 1999. — TNS

SBI Housing
Chandigarh, August 9
The State Bank of India (SBI), Chandigarh Circle, opened its first specialised housing finance branch in Mohali. Mr A D Chaudhri, Chief General Manager, informed that last year, the circle achieved a growth of 28 per cent and gave 10,526 housing loans amounting to Rs 439 crore. — TNS

TV audience
Chandigarh, August 9
Audience Measurement and Analytics (P) Ltd today launched Asia’s first online TV Audience Rating Service in India called aMap (Audience Map). This rating service collects TV viewership data every morning between 2 am and 4 am by its central servers making a cellular telephone call to the meters installed in sample homes.
— TNS
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