SPECIAL COVERAGE
CHANDIGARH

LUDHIANA

DELHI


THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
B U S I N E S S

Deficit, oil prices may spoil India’s growth party
New Delhi, February 27
Expressing serious concerns about the harmful effects of tightening world interest rates and continuing volatile international crude oil prices, Economic Survey 2005-06 has warned the government to keep a watch on the fiscal deficit.

IT salaries highest in Bangalore: survey
New Delhi, February 27
Bangalore, followed by the twin cities of Hyderabad and Secunderabad, lead the way in attracting IT professionals with good pay packets. Gurgaon and Delhi, interestingly trail behind Mumbai and Pune, according to a survey.

Survey for labour reforms
New Delhi, February 27
The Economic Survey urged the policy-makers to take a cue from China and called for labour reforms to accelerate investment, particularly in industry and export-oriented sectors.

Shah Rukh Khan gestures at the launch of a promotional campaign for Compaq Presario computers in Mumbai
Shah Rukh Khan gestures at the launch of a promotional campaign for Compaq Presario computers in Mumbai on Monday. Khan launched the Compaq promotional titled, Yeh Hui Na Baat, which starts on March 1. Compaq Presario is offering an HP printer with every desktop and a mobile Internet card, worth Rs 6,500 free of cost, with a notebook PC. — AFP

Survey for reforms in security market
New Delhi, February 27
Recognising the ongoing bull run continuing in the Indian stock market, with the stock market index registering 36 per cent returns in 2005 as against 11 per cent in 2004, the Economic Survey has hinted at the need for reforms in the security market.

Chennai airport to go for overhaul
New Delhi, February 27
The two consortia, which have been selected for modernising Delhi and Mumbai airports, comprising Airports Authority of India and select private parties, would be handed over the airports by the second half of 2005-06 fiscal.



A model presents an ensemble from ready-to-wear Fall/Winter, 2006/2007, collection by French fashion house Balmain in Paris
A model presents an ensemble from ready-to-wear Fall/Winter, 2006/2007, collection by French fashion house Balmain in Paris on Sunday. — AP/PTI


EARLIER STORIES

 

Check power crisis to achieve growth rate
Chandigarh, February 27
India Inc is coming of age as predicted in the Economic Survey presented by the UPA government today. The survey has brought cheer and hope for higher growth in the manufacturing and service sectors.

Arcelor unveils growth plan to fight Mittal bid
Paris, February 27
European steel group Arcelor unveiled a three-year growth plan on Monday as it urges its shareholders to reject an unsolicited $22.6 billion offer by global sector leader Mittal Steel Co.

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Deficit, oil prices may spoil India’s growth party
Tribune News Service

New Delhi, February 27
Expressing serious concerns about the harmful effects of tightening world interest rates and continuing volatile international crude oil prices, Economic Survey 2005-06 has warned the government to keep a watch on the fiscal deficit.

“With increasing dependence on imported crude and growing openness India is no longer insulated from the rest of the world in price developments. A continuing firming up of global interest rates beyond a point poses the risk of dampening the domestic investment boom,” it warned.

In a report card on the economy, India reaffirmed fiscal and revenue deficits could be met and contained within the budgeted estimates. The Fiscal Responsibility and Budget Management Act (FRBMA) continues to provide a strong institutional mechanism for making sustained progress at fiscal consolidation.

The revenue deficit for the states is pegged at 0.7 per cent of GDP and gross fiscal deficit 3.1 per cent of GDP for the 2005-06 Budget estimates. For the Centre, the figures are projected at 2.7 and 4.3 per cent of GDP for revenue and fiscal deficits, respectively.

Buoyant revenues in the states in 2004-05 (RE) indicate that the process of deepening of the fiscal reforms and restructuring of public finances as envisaged by the Twelfth Finance Commission (TFC) have had a head start. Maintaining its increasing trend since 1990-91, except in 1998-99, the share of direct taxes in central tax revenues is expected to increase 47.9 per cent 2005-06 (BE) as against 43.3 per cent in 2004-05 (RE).

With its commitment to finance social projects like employment guarantee, the government will not find it easy to keep a cap on the fiscal deficit target.

State and federal deficits combined, which totalled nearly 10 per cent in 2001-02, were estimated at 7.7 per cent of gross domestic product this financial year, the report said. That would be lower than 8.4 per cent in 2004-05.

Cautioning against complacency in the face of sustained industrial growth, the survey has asked the government to ‘unburden’ industry from high level of taxes to help it become globally competitive and focus on investments in infrastructure sector to sustain high growth of GDP.

“To be competitive globally, the Indian industry needs to be unburdened from the high levels of taxes and distortive exemptions that provide perverse incentives,” the survey presented in the Parliament said.

Lamenting over slow progress on the infrastructure front, it said, “The 10th plan capacity addition target of 41,110 MW was revised down to 36,956 MW at the time of the Mid-Term Appraisal. The likely achievement is expected to be around 34,000 MW, which is about 83 per cent of the original target.”

Making a strong case for toning up the tax system, it said higher revenues have accrued even with unchanged or lower rates.

Meanwhile, welcoming the high growth forecast of Economic Survey, Finance Minister P Chidambaram said government will cut deficits as per FRBM Act but high global oil prices and upward pressure on interest rate posed “risks” to the economy.

He also identified three “downside risks”— government’s deficits, high global oil prices and upward pressure on interest rates.

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NRI remittances hit the top

Noting the limited success in attracting foreign direct investment, the survey said during the current fiscal till November, total FDI approvals were just Rs 5,947 crore. On the other hand, the NRI remittances, $21.7 billion were highest in the world, and domestic savings as percentage of total GDP has also increased to 30.1 per cent.

It said the growth in manufacturing was largely input driven and the growth in productivity was hardly noticeable.

“Sustained efforts to remove bottlenecks hindering productivity and efficiency would boost the manufacturing sector substantially,” the survey added.

Pointing to the decline in industrial growth in the first nine months of this fiscal to 7.8 per cent from 8.6 per cent last year due to the lacklustre performance of the mining and electricity sector, the survey said inadequate investments in sectors like gas and coal was the main contributor.

The survey is, however, bullish about the future. It said with the improvement in the investment scenario and liberalisation of norms, the overall productive capacity of the industrial sector is likely to increase substantially.

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IT salaries highest in Bangalore: survey
Tribune News Service

New Delhi, February 27
Bangalore, followed by the twin cities of Hyderabad and Secunderabad, lead the way in attracting IT professionals with good pay packets. Gurgaon and Delhi, interestingly trail behind Mumbai and Pune, according to a survey.

The survey studied the average salaries of IT professionals across regions and sectors and also looked at trends in job opportunities and sentiments about impact due to the anti-outsourcing backlash.

The average cost to company (CTC) for Bangalore stood at Rs 6 lakh per annum — the highest in the country, followed by Rs 4.7 lakh in the twin cities of Hyderabad & Secunderabad, along with Pune.

These were some of the findings of the Cyber Media Dice ‘Salary Survey’ conducted by market research agency TNS India. The survey was conducted online among more than three thousand IT professionals who are registered with www.CyberMediaDice.com across 15 cities in India.

The study also noted that for IT professionals, a management background may not hold good against post-graduation with technical background when it comes to earning the big bucks. An engineer armed with a technical masters degree garners annual average CTC of Rs 8.62 lakh per annum while an MBA candidate’s CTC stands at Rs 6.33 lakh per year.

For the Indian IT professional, the booming Indian telecom industry seems like a more attractive option compared to the Indian IT industry, with the average CTC being 6.2 lakh and 5.0 lakh, respectively. Highest compensation for IT professionals can be found in the telecommunications sector, followed by IT and then banking, finance and insurance.

Uncertainty still looms at large when asked about the number of years they wish to spend with their current company, as more than half of the respondents were not sure about their stint with current employer in the future. Less than 10 per cent want to continue for more than three years.

On an average the tech professionals worked for three companies; professionals with more than 6 years of experience worked for on an average 4 different companies. Key motivators for leaving current employer or switching employers were better growth prospects and remuneration.

In spite of India buzzing with opportunities and most IT professionals seem to believe so, two thirds of the respondents ‘would consider’ or were ‘actively exploring’ overseas job opportunities. Those with more than 11 years of experience were among the highest number of professionals who were currently not exploring overseas jobs.

Another fact that has emerged from this survey is that when women tech professionals were quizzed about exploring job opportunities aboard, 44 per cent of the respondents said that they prefer to work here in India as compared to only 28 per cent of their male counterparts.

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Survey for labour reforms
Tribune News Service

New Delhi, February 27
The Economic Survey urged the policy-makers to take a cue from China and called for labour reforms to accelerate investment, particularly in industry and export-oriented sectors.

“Perhaps, there are lessons to be learnt from China in the area of labour reforms. China, with a history of extreme employment security, has drastically reformed its labour relations and created a new labour market,” the survey said. In a move to mollify Left criticism, the Survey pointed out that though there have been several layoffs and open unemployment in the Chinese market, high rates of industrial growth have helped in redeployment.

“Indian labour laws are highly protective of labour, and labour markets are relatively inflexible... Consequently, these laws have restricted labour mobility,” it pointed out.

Taking note of rampant strikes and lockouts, where Left-ruled West Bengal was on the top, the survey has underlined the need for labour law reforms to enhance productivity and competitiveness of the Indian industry.

Noting that the number of strikes and lockouts in the January-September, 2005, period stood at 340, which came out to more than one strike per day, it said West Bengal experienced maximum instances of industrial unrest ,followed by Tamil Nadu and Gujarat. The industrial disturbances were concentrated mainly in textiles, engineering, chemicals and food products industries. It, however, noted that there was a decline in the number of strikes and lockouts during 2000-04. “The number of strikes and lockouts went down 13.6 per cent from 552 in 2003 to 477 in 2004, with a sharper decline in strikes than in lockouts.

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Survey for reforms in security market
Tribune News Service

New Delhi, February 27
Recognising the ongoing bull run continuing in the Indian stock market, with the stock market index registering 36 per cent returns in 2005 as against 11 per cent in 2004, the Economic Survey has hinted at the need for reforms in the security market.

“How far the securities market will support investment, and hence how far investment will be stepped up in the coming months and years will also depend on further improvements made in the securities market architecture, including disclosure, trading technology and policies on derivative trading,” it said.

Meanwhile, Sensex ended 81 points up at a new closing peak of 10,282.09 points on sustained FII inflows, as the survey projected 8.1 per cent GDP growth and prescribed tax and labour reforms to boost industrial growth.

It pointed out that the regulators should strengthen the investigation and surveillance process so as to have a steady stream of success in enforcing rules, and punishing wrongdoers, with well-prepared and well-argued cases that are upheld by the courts.

Concerned over the recent IPO scams, the survey stated the reforms should prevent multiple bids by individuals seeking to profit from the quota for “retail investors at the discretion of merchant bankers or the government by considering a pure auction for price discovery at the IPO, in much the same manner as the secondary market functions.

Notably, 55 IPOs came in the market, roughly four IPOs every month, to raise Rs 30,325 crore from the primary market.

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Chennai airport to go for overhaul
Tribune News Service

New Delhi, February 27
The two consortia, which have been selected for modernising Delhi and Mumbai airports, comprising Airports Authority of India (AAI) and select private parties, would be handed over the airports by the second half of 2005-06 fiscal.

The Economic Survey for 2005-06, tabled in Parliament today, said that ‘in principle’ decision has also been taken to modernise the Chennai airport through the same joint venture route. Due to monopoly nature of the airports and their economic importance, efforts are afoot to set up an independent Airport Economic Regulator for tariff setting and monitoring of performance standards, it said.

The survey says that as per preliminary estimation, the capital investment for modernisation of Delhi and Mumbai airports would be Rs 7,961 crore and Rs 6,131 crore respectively, over a period of 20 years in four stages of five years each.

As regards the other airports in the country it said the construction of greenfield airports at Hyderabad and Bangalore had begun and ‘in principle’ approval granted to set up a similar airport in Goa.

Approvals have also been received for construction of new international terminals at Ahmedabad and Trivandrum airports, while proposals for construction of greenfield airports at Navi Mumbai, Kannur, Ladhowal near Ludhiana and Pakyong near Gangtok were in the pipeline.

The AAI was also considering development non-metro airports and appointed financial consultants and global technical advisors for 10 airports at Ahmedabad, Amritsar, Goa, Guwahati, Lucknow, Madurai, Jaipur, Mangalore, Trivandrum and Udaipur. Techno-economic feasibility study for these 10 airports have already been received.

The work on these airports would be taken up in a phased manner at an estimated cost of Rs 1,437 crore for the first phase between 2006 and 2008. Besides, 15 more non-metro airports have been identified which include Agatti, Aurangabad, Bhopal, Nagpur, Bhubaneshwar, Coimbatore, Indore, Khajurahho, Patna, Port Blair, Rajkot, Trichy, Vadodara, Varanasi and Vizag.

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Check power crisis to achieve growth rate
Ruchika M. Khanna
Tribune News Service

Chandigarh, February 27
India Inc is coming of age as predicted in the Economic Survey presented by the UPA government today. The survey has brought cheer and hope for higher growth in the manufacturing and service sectors.

Mr Krishan Goyal, Chairman, CII Chandigarh Council, and Director of Modern Steels, Mandi Gobindgarh, said that the government has presented a robust growth of economy. “India is on a sound economic track. The Finance Minister has mentioned that infrastructure development would boost the overall growth rate, but what has to be seen is how fast the government can build infrastructure,” he said.

As mentioned in the Economic Survey, the industrialists feel that without tackling the power crisis in the country, it would be difficult to move on to a higher growth rate. Mr S P Gupta, President of Haryana Chamber of Commerce and Industry (HCCI), and Director of Liberty Group, said that the power crisis all through this financial year had adversely affected the manufacturing sector.

“The industry had virtually come to a grinding halt when power supply to industrial consumers was cut. The government has to improve power supply position so that the growth rate reaches a 10 per cent mark,” he said.

“By including infrastructure in the priority sector and getting the rich agriculturist in tax net, the country can continue on its upward growth trend. By focussing on consolidation and improving compliance rather than increasing tax rates, and more incentives to Small Scale Enterprises (SSE) like removal of tax on cash withdrawal, increasing limit for excise to Rs 3 crore, ensuring faster resolution of non-performing assets etc., will further give a fillip to growth,” said Mr R.S. Sachdeva, Co-Chairman of PHDCCI.

Even as the robust growth in industry is bringing cheer, the fact that poor growth in agriculture (2.3 per cent) is a cause of concern. Dr K.S. Aulakh, Vice-Chancellor of Punjab Agricultural University (PAU), said that agriculture needs “protection” under WTO regime and a “special package” to rid farmers of indebtedness, interest-free credit and selective waiver of debts.

“Also, greater share for agriculture research from GDP that accrues from farm sector, and higher public investments from GDP is required. A tax holiday for agro-processing units for value addition to farm produce, “tax parity” in northern states for equal opportunities to develop industry, and, hike in minimum support price for wheat commensurate with spiralling input costs, can help tide over the agrarian crisis,” he added.

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Arcelor unveils growth plan to fight Mittal bid

Paris, February 27
European steel group Arcelor unveiled a three-year growth plan on Monday as it urges its shareholders to reject an unsolicited $22.6 billion offer by global sector leader Mittal Steel Co.

The group, led by Chief Executive Guy Dolle, is kicking off a tour of capitals to meet investors and try to convince them there is more value in keeping Arcelor independent than by accepting Mittal’s proposed shares-and-cash offer.

Mittal founder Lakshmi Mittal has already met Arcelor shareholders and claims wide support for a bid that would create a steel group with capacity of more than 100 million tonnes and with global market share of about 10 per cent.

Mittal is due to brief the governments of France, Spain and Luxembourg about further details of the plans to weld the two groups together, against politicians’ fears of job losses and further erosion of national control over a key basic industry.

Arcelor said in a statement it was aiming to increase annual earnings before interest, tax, depreciation and amortisation (EBITDA) each year from 2006 to 2008 and beyond, with a target of Euro 7.0 billion ($8.29 billion) by 2008, excluding exceptional items.

The world’s number two steel maker said it would return to shareholders all gains from the sale of non-strategic assets and any acquisitions would have to have a return on capital of at least 15 per cent.

Arcelor said it would continue its progressive dividend policy with a payout ratio 30 per cent and would have sustainable and resilient free cash-flow generation of Euro 4.4 billion per year. — Reuters

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BRIEFLY

Moser Baer
Mumbai, February 27
Compact disc maker Moser-Baer (I) Ltd today said Woodgreen Investment Ltd and three affiliates of Warburg Pincus partners LLC have acquired 4.26 per cent stake in the company. Woodgreen Investment, along with Bloom Investments Limited, Ealing Investments Limited, Randall Investments Limited and Elm International Ltd (affiliates of Warburg Pincus) have acquired 47.50 lakh equity shares of the company, it informed the Bombay Stock Exchange. — PTI

Petronas order
Mumbai, February 27
Larsen & Toubro Ltd (L&T) today said the consortium of Frankfurt-based Lurgi AG, L&T and Malaysian construction company KQKS has received an order from Petronas Penapisan (Melaka) Sdn Bhd for building a lube oil plant. The plant is to be incorporated into two existing complexes owned by Petronas. Construction of the plant will be carried out by local companies, L&T-ECC and KQKS Malaysia. The company’s scope of work against this order is valued at $198 million. — UNI

JK Paper
Mumbai, February 27
Paper manufacturing company JK Paper Limited today declared an interim dividend of 14 per cent for 2005-2006. The Board of Directors has recommended an interim dividend of 14 per cent that is, Rs 1.40 each on equity shares of Rs 10 per share, the company informed the Bombay Stock Exchange. — PTI

Punjab Chem
Mumbai, February 27
Punjab Chemicals & Crop Protection Ltd has acquired IA & IC Chem Pvt Ltd for Rs 46.18 lakh. In line with its plan to launch new herbicides and fungicides, the company informed the stock exchanges that the acquisition also included a plant in Maharashtra. — PTI

Hutch plan
Chandigarh, February 27
Hutch today introduced a pre-paid plan which offers local Hutch-to-Hutch calls at 25 paise for a rental of Rs 9 per week. This rate is applicable to calls made over the weekend and on weekdays between 11 p.m. and 7 a.m. Mr Arun Kapoor, COO, Hutch, Punjab, said subscribers in Punjab and Chandigarh availing this offer could also make local mobile calls at 49 paise and local landline calls at 99 paise throughout the week. — TNS

Punj Lloyd
Mumbai, February 27
Punj Lloyd Ltd has been awarded a Rs 86-crore building structure project by Global Health Pvt Ltd, which is setting up a high end, multi-specialty Institute of Integrated Medical Sciences and Holistic Therapies in New Delhi. The project is expected to be completed within 14 months, the company said. — UNI
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