Thursday, August 20, 1998
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B U S I N E S S | Thursday, August 20, 1998 |
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Counter-guarantee for Hinduja
Power Key
industry sectors to be monitored |
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Visit India package to
attract tourists Devalued
rouble may hit commodities |
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Mobilise domestic savings
for power Cabinet
to study sugar delicensing today Rs
2,500 crore can be saved on travels Check
tax evaders, says Finance Minister Hind
Motors rolls out multi-purpose vehicle
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Counter-guarantee for Hinduja Power NEW DELHI, Aug 19 (PTI) — The government today issued a counter guarantee for the 1040 MW thermal power project in Visakhapatanam promoted by the Hinduja group. This is the sixth “fast-track power project to get central guarantee and covers foreign debt of $ 818 million in the $ 1.2 billion project. In the last two weeks, the Finance Ministry had signed counter-guarantees with the Mittals for their 1084 mw project at Bhadravati in Maharashtra and a 250 mw project in Tamil Nadu. The agreement today was signed between Gajendra Haldia of the Finance Ministry and Managing Director of Hindujas’ national power company A. Gavisidappa. The Hindujas hold 51 per cent equity in the project with the remaining held by UK-based National Power. The Project authorities are yet to sign the fuel supply agreement with the Coal India Ltd (CIL). The Hindujas have sought about $ 650 million loan from the Japanese export and import bank and about $ 150 million from ECGD of London. Japanese multinational Sumitomo is the engineering, procurement and construction contractor for the project. Ashok Hinduja, President of the Hinduja group (India), said the coal supply agreement would be signed “very soon” and the project’s financial closure would be achieved by the year end. “We see no problems regarding the coal supply agreement or with the Railways,” he said. Haldia said there were some inter-ministerial issues to be resolved as the Railways had reservations about the penalty clause in the fuel transportation agreement. “These are inter-departmental issues and would be resolved within a couple of days,” he said. The coal for the project would be supplied from Mahanadi coal fields, a subsidiary of CIL. The levelised tariff for the project would be Rs 2.1 per unit calculated at the exchange rate of Rs 35 per dollar. The first 520 MW unit of the project to be completed in two phases would be commissioned in 38 months from the date of financial closure. Industrial Development Bank of India (IDBI) has committed a term-loan of Rs 600 crore, besides being advisory for syndicating the remaining portion of the total rupee debt of Rs 1500 crore. The equity capital of the project is around Rs 1800 crore, of which Hinduja’s would bring Rs 900 crore. Ashok Hinduja
said their equity would come as foreign direct investment
from overseas corporate bodies. |
Visit India package to attract
tourists ANANDPUR SAHIB, Aug 19 — The Centre will offer a “visit India package”, including concessional air and rail travel, from April 1,1999, to March 31,2000, to attract tourists particularly Indians abroad, for bidding farewell to the 20th century in their motherland. This was announced here today by Mr Madan Lal Khurana, Union Minister for Tourism , after laying the foundation stone of a Rs 7 crore 3-star hotel project jointly floated by the ITDC and Punjab Tourism. Addressing a gathering , Mr Khurana said the hotel’s restaurant and rooms would become operational by March 1999 to cater to the needs of those coming here to attend the tercentenary celebrations of the birth of the Khalsa. The project’s progress would be closely monitored. Punjab Chief Minister Parkash Singh Badal said a Dashmesh Martial Sports Academy would be set up here to provide training to youth in martial arts. Work on the Rs 7-8 crore project would start soon. Giving details about the tercentenary celebrations of the birth of the Khalsa, Mr Badal said a national level committee is being formed with Prime Minister A.B. Vajpayee as its president and leaders of various political parties and religions as its members to decide on celebrations. Plans are being finalised. The model of the Rs 300-400 crore heritage complex, Nishan-e-Khalsa, is ready. Anandpur Sahib town and its adjoining area are being developed. The local railway station is being upgraded. A hospital will also be built here. Roads are being widened, Mr Badal added. He announced Rs 5 lakh for lawyers’ chambers here. Mr Khurana, who also laid the foundation stone of a Rs 1 crore reception centre, announced a Rs 1 crore grant for providing lighting in various gurdwaras here. Ms Jagir Kaur, Punjab Minister for Tourism , said a tourism policy had been formulated and sent to the Cabinet for approval. Prof Manjit Singh,
Jathedar of Takht Sri Keshgarh Sahib, and Mr M.M. Mittal,
Food and Civil Supplies Minister, also addressed the
gathering. |
Key industry sectors to be
monitored NEW DELHI, Aug 19 — The Prime Minister will convene a meeting of the apex Chambers of Commerce and key economic ministries for reviewing the progress in different sectors of the economy, the Union Finance Minister Mr Yashwant Sinha said here today. Stating this to a 15-member delegation of senior industrialists of the Associated Chambers of Commerce and Industry of India (Assocham) today, he said the government was identifying 30 key industry sectors to keep a close vigil on their performance. The ministry had evolved a mechanism for coordination with industry and other infrastructure ministries so that projects in the government sector were implemented immediately after September 15, Mr Sinha informed the industrialists. He said there were positive signs of the revival of the economy such as a 19 per cent increase in excise collections in July and 48 per cent hike in disbursement of the funds by financial institutions in the first quarter as against minus 16 per cent last year. Responding to Assocham president L. Lakshman’s suggestion for an economic agenda on the basis of consensus among all political parties, Mr Sinha said that consensus among all parties had already emerged and “ even the change in government will not derail the economic reforms “. Advocating a government-industry partnership for the revival of the economy, he said India was the only country besides China heading for an over 6 per cent GDP growth. The captains of industry raised several issues. These included unsustainability of the US 15 billion dollar trade deficit, inflation, delay in introduction of new legislations, opening of the insurance sector and declining FDI and FII flows. The declining trend in the
FDI would be reversed only if the government made its
policy direction clear and unambiguous. It was imperative
that the scope for approval under the automatic route was
expanded to make these transparent and non-discretionary,
the industrialists pointed out.
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Devalued rouble may hit commodities NEW DELHI, Aug 19 — Russia’s decision to devalue the rouble is unlikely to hit Indo-Russian trade but may have a bearing on the commodities market, as in the rest of the world. A majority of Indo-Russian trade is not done at the official rate and there is a rupee account under which India exports Rs 3000 crore worth of goods every year to that country. This arrangement has been in place since 1993 and would continue for 12 years. A majority of the exports, around 80 per cent, is covered under the rupee-rouble debt account and only about 20 per cent of the country’s exports to Russia is done at the official rate. On the import side, Russia’s trade is done on the dollar account and the devaluation of rouble is likely to benefit India. According to official figures, the total bilateral trade between India and Russia stood at Rs 5100 crore for 1997-98. Indian exports consist mainly of tea, tobacco and pharmaceuticals while the imports comprise fertiliser and newsprint. According to trade analysts, on the demand side Russia’s huge population consumes large volumes of imported livestock and other commodities. Commodity traders fear that the devaluation of the rouble could trigger off inflation in Russia and put pressure on its imports. “A weaker rouble reduces Russia’s buying power on world markets and that could reduce Russian imports” a trade analyst told the TNS. Tea is one commodity that could be affected the most as India exports nearly 50 per cent of its total tea exports to Russia. In 1997, the country exported 90 million kg of tea to Russia, which was an increase of nearly three times over the 38 million kg exported to that country in 1996. An indication of the future trend was available yesterday when prices crashed by almost Rs 3 to 5 for Assam teas at the Guwahati auction. The Guwahati tea auction cater largely to the Russian market. On the brighter side, the devaluation of the rouble would make imports from Russia cheaper. Russia is a major producer of aluminium, nickel and platinum group metals and exports of industrial and precious metals could increase because a weaker rouble would make Russian good cheaper on world markets. On the whole, the devaluation of the rouble has not triggered off major alarm bells in the country. At the highest level, the Union Finance Minister, Mr Yashwant Sinha, did not think that the devaluation of the rouble was a major cause for anxiety. Without mentioning the rouble, the Union Finance Minister, Mr Yashwant Sinha, told newspersons here that the falling value of the Japanese yen was the biggest worry for the country. Since the yen had started stabilising of late, he felt the worst had been overcome. “Things are settling
down in Japan. The Japanese Government has taken a number
of steps to see that the yen strengthens. The worst is
behind us”, he added. |
Mobilise domestic savings for power NEW DELHI, Aug 19 - The Associated Chambers of Commerce and Industry of India (Assocham) has urged the government to allow financial institutions to lend in excess of 40 per cent of the cost in power projects. A paper “Alternatives of Financing Power Projects”, prepared by Assocham, says that there should be full income tax exemption for investments from equity raised from the capital market. Steps should also be initiated to widen the base of debt instruments for mobilising household savings to enhance the flow of funds to this sector. The paper estimates that the investment requirements for the power sector to increase to Rs 160,980 crore during the ninth plan and to Rs 491,824 crore by the end of the 10th plan. As equity investments in the power sector have a high risk element because of poor financial position of the purchasers of power, namely SEBs, adequate equity resources from the capital market would be forthcoming if 100 per cent tax relief to equity investments is provided. Commercial bank lending ,
unlike bonds, is not expected to be the main source of
debt finance mainly because banks are resistant to
provide finds for long term maturities , while provident
and pension funds are not permitted to invest in the
infrastructure sector. |
Cabinet to study sugar delicensing today NEW DELHI, Aug 19 (PTI) — A proposal to delicense the sugar industry has been listed for discussion by the Cabinet which is scheduled to meet here tomorrow, official sources said. However, Industry Minister Sikander Bakht would not be able to stress his point on the sector’s delicensing as he will be in Jaipur to attend a BJP executive committee meeting, the sources said. The proposal has been mooted as a sizeable number of those who hold licence for starting sugar units have not put up the mills leading to sectoral monopoly and occasionally shortages. Earlier, this week Mr Bakht told a private television channel that a decision on sugar delicensing would be taken before the month-end. Though the licensing norms were relaxed last year, entrepreneurs wishing to start new units are required to fulfil certain obligations, including getting certificate from state governments on cane availability and tying up with financial institutions for capital. The Department of Sugar
and Edible Oil, whose view has also been sought on the
matter, has given a go-ahead for the move provided the
distance between two sugar factories was 25 km to ensure
adequate cane availability. |
Rs 2,500 crore can be saved
on travels NEW DELHI, Aug 19 — Effective management of business travel can lead to annual savings of up to Rs 2500 crore for Indian corporates, says an American Express survey. The survey, covering over 400 companies across India, states that Indian corporates rank travel and entertainment (T&E) as the second largest controllable expense after employee salaries. The average company surveyed spent Rs 16,546,200 on T&E in 1997 which is higher than the annual expenditure incurred on data processing, taxes or advertising. Worldwide, T&E constitutes a significant segment of corporate expenses and in India these expenses are growing at a rate of over 10 per cent. This is expected to exceed $ 3 billion a year by the 2000. A key factor for the increase is the development of domestic and international business trade, the survey states. The primary categories of T&E expense are air travel (28 per cent), hotel accommodation (27 per cent), meals and entertainment (14 per cent) and taxi/rail (30 per cent). Moreover, survey respondents report that international travel now accounts for one thirds of total T&E spending. The survey results indicate that nearly two-thirds of Indian companies surveyed have developed a formal or written travel policy. However, coverage of these travel policies is not comprehensive, with only half of travel policies providing direction on key issues of travel arrangements. Only 18 per cent of the companies distribute the travel policy to all travellers. In addition, only 5 per
cent of travel agencies receive a copy of the travel
policy. As many as 24 per cent of companies take no steps
to ensure that employees are familiar with travel policy,
the survey states. |
Check tax evaders, says Finance Minister NEW DELHI, Aug 19 (PTI) —Finance Minister Yashwant Sinha today asked Excise and Customs officials to deal with tax evasion sternly and said a three-tier simplified excise tax rate would be finalised before the next budget. “We should deal with dishonest tax payers as firmly as possible. In this the field formations of the Central Board for Excise and Customs (CBEC) have a major role as they have to distinguish between tax payers and evaders”, Sinha told taxmen at a conference here. “Our intention is not
to punish honest tax payers”, Sinha said while
inaugurating the two-day Customs and Central Excise All
India Chief Commissioners Conference here. |
Ashok hotel stone laid CHANDIGARH, Aug 19 — Mr Madan Lal Khurana laid the foundation stone of a 5-star ITDC hotel, Chandigarh Ashok, in Sector 17 here today. He said the recent resolution of the Political Affairs Committee (PAC) of the Akali Dal on the Udham Singh Nagar issue had pained him. Khurana said he would not
let down Mr Badal “whatever sacrifice I may have to
make.’’ The Akali Dal-BJP alliance is not just
political, but a social and cultural alliance.
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Hind Motors rolls out
multi-purpose vehicle NEW DELHI, Aug 19 — Hindustan Motors (HM) today rolled out HM RTV, a multi-purpose vehicle , designed and customised for driving conditions in rural India. HM RTV is being manufactured in technical collaboration with OKA Motor Company of Australia at HM’s new plant at Pithampur in Madhya Pradesh. The heavy duty vehicle with a rear wheel drive has a 4 cylinder , 1995cc, 56 HP diesel engine. The vehicle can carry a payload of up to 2.0 tonnes and costs Rs 3.47 lakhs. HM RTV has as all synchromeshed gearbox which allows it to run at a continuous low speed of 5 km per hour on rural tracks and at a speed of 90 km per hour on normal roads. The new plant has been set up at a cost of Rs 44 crore and has an installed capacity of manufacturing 7000 HM RTVs per annum. The launch of the RTV
precedes the anticipated launch of the Mitsubishi Lancer
in the luxury segment and the standard Ambassador. |
Eicher Motors
grows 6 pc Eicher to launch
new tractors NIIT plan to
acquire US firm IEC software net
profit up SRF prepays 16.5
crore NCDs |
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NISE chief’s
arrest stayed Diesel Zen PNB counter Gold up Karameter 9 TV models Office Expo Montek Singh |
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