Wednesday, December 9, 1998
today's calendar
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B U S I N E S S | Wednesday, December 9, 1998 |
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spotlight today's calendar |
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Giving teeth to Consumer
Protection Act FIPB
awaiting comments on Rothmans
PEC
students get IBM scholarships ACC
to make rights issue Corp
Bank to implement prudential norms Daewoo-Samsung
swap to have no effect |
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Shell’s
no to oil exploration in India AI
records 129 crore loss |
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Giving teeth to Consumer Protection Act NEW DELHI, Dec 8 (PTI) — The government is considering strengthening the Consumer Protection Act, 1986 and make it more effective and purposeful by reducing disposal time of cases by consumer courts, Lok Sabha was informed today. Minister for Food and Consumer Affairs S.S. Barnala, in reply to questions by members who complained of delays in disposal of cases by consumer courts, said during question hour that proposals to streamline the Act have been sent to the Law Ministry. To a specific question by Geeta Mukherjee (CPI) that in West Bengal cases were delayed because of absence of Judges, the Minister said it was upto the state governments to appoint Judges and the Centre has asked states to appoint more Judges in consumer courts. Of the 14,666 consumer cases filed so far, 8,667 have been disposed of and 5,999 cases were pending as on November 1, he said. Ports: The government is taking a series of steps to lure back the container traffic it lost to Sri Lankan ports and intends to spend a substantial sum of money during Ninth Plan on dredging at ports to facilitate large ships. This was stated by Union Surface Transport Minister M. Thambi Durai in the Rajya Sabha while replying to a host of supplementaries during question hour. Admitting that India had lost container business to Sri Lanka due to high levels of siltation and inefficient cargo handling, Thambi Durai said the government would spend Rs 16,000 crore in the Ninth Plan to bring ports to global standards. Stating that the problem related to the inability of very large ships to berth on ports due to high siltation, he said Rs 530 crore would be spent on dredging at the Kochi and Tuticorin ports to solve this problem. Textiles: A massive technology upgradation scheme in the textile industry would be launched across the country at an estimated cost of Rs 25,000 crore, Textiles Minister Kashiram Rana informed Rajya Sabha today. The technology upgradation fund (TUF) scheme, scheduled to be implemented from April next year, is awaiting Union Cabinet’s approval, Rana said while answering supplementaries during question hour. The fund is being created to facilitate modernisation for enhancing viability and competitiveness of the industry, he said. Power: Government today admitted in the Rajya Sabha that Power capacity addition from private sector in the Ninth Plan may not reach anticipated levels due to the continued financial ill-health of state electricity boards. Replying to supplementaries during question hour, power Minister P.R. Kumaramangalam said fate of private projects was linked to commercial viability of state electricity boards and unless they become financially viable, private sector efforts may not fructify to the desired extent. Realising this problem, the state-owned National Thermal Power Corporation (NTPC) has revised its capacity addition target for the Ninth Plan to 17,000 MW, the minister said. Inflation: Annual rate of inflation based on consumer price index for industrial workers (CPI-IW) has touched 18.6 per cent in October, Finance Minister Yashwant Sinha told Rajya Sabha today. Prices of some primary
articles, particularly, vegetables recorded a sharp
increase since July, pushing up inflation based CPI to
18.6 per cent, Sinha said in reply to a written question. |
FIPB awaiting comments on Rothmans NEW DELHI, Dec 8 (PTI) — The Foreign Investment Promotion Board (FIPB) is awaiting the Finance Ministry’s comment before taking up the Rothmans of Pall Mall proposal to set up a 100 per cent subsidiary in India to manufacture cigarettes, a top industry ministry official said yesterday. “We are awaiting the ministry’s comments. Once it is received, we have no problem in taking it up,” Industry Secretary T.R. Prasad told reporters at the sidelines of a seminar on patents here. The Rothmans proposal, envisaging setting up of a wholly-owned subsidiary with an initial authorised capital of $ 150 million, has been dogged by controversy for over eight months ever since it was scheduled to come up before the FIPB. The proposal has been referred to the Revenue Department in the Finance Ministry as the Industry Ministry wants a thorough examination of the foreign exchange outflow on account of various licensing arrangements. The Revenue Department is expected to assess possible revenue gains in case Rothmans undertakes the Commerce Ministry’s condition that 75 per cent of its output be exported in value added form. The Commerce Ministry, to which the issue was referred by the FIPB, gave a conditional clearance to the cigarette multinational to set up the 100 per cent subsidiary, saying it should export 75 per cent of its production in value-added form. The FIPB had put off its decision on the Rothmans proposal on September 5 for four weeks as it felt that certain clarifications were needed in terms of guaranteed quantity of tobacco to be bought in India by the company. The board has also asked the company to give its commitment on export of raw tobacco, processed tobacco and cigarettes from the country. The subsidiary plans to purchase and export tobacco from India and also bring Rothmans’ international brands in India. During the last week of August, the government had permitted 100 per cent Foreign Direct Investment (FDI) in cigarette industry. The FIPB had earlier deferred decision on Rothmans pending recommendations of an intra-ministerial committee on the need to cap foreign equity for cigarettes. Chief Ministers of
Maharashtra, Karnataka, Andhra Pradesh and Orissa have
written to the Prime Minister seeking intervention to
clear the Rothmans’ proposal so that the tobacco
farmers in these states could benefit. |
PEC students
get IBM scholarships CHANDIGARH, Dec 8 — IBM-ACE, the world’s leading computer education organisation has instituted scholarships for select students. The IBM-ACE national merit scholarships are awarded based upon a All-India aptitude tests conducted in August and September. IBM-ACE, Chandigarh students have won all the five such scholarships, which were awarded by Mr Narendra Khurana, General Manager, IBM Education. Mr Arvind Gupta of IBM-ACE explained the structure of IBM-ACE and the role of IBM, IIT-Kanpur and Lotus in the programme. Mr Mukul Mathur of Tata IBM and Ms Harmeen Kashyap, Global Services were the other speakers on the occasion. Mr Khurana said that IBM-ACE is a global university offering 6,000 computer related courses covering the aspects of Information Technology. He said every year more than 2,00,000 students in over 56 countries attend at least one IBM class. Mr Khurana said that the Chandigarh Centre has 20 students which started recently having two courses i.e a ten months’ course for whole timers and 18 months’ part time course. Mr Anubhav Babbar and
Pankaj Atri, both of Punjab Engineering College (PEC) got
the national scholarship for IBM-ACE. IBM plans to raise
the number of scholarships from the next session. |
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MUMBAI, Dec 8 (PTI) — The Associated Cement Companies (ACC) would shortly make a rights issue of equity shares to the existing shareholders after sub-dividing its equity shares, in a bid to meet the total capital expenditure requirements over the next two years, arising out of its growth plans. To fulfil these requirements, the Board of Directors of ACC today also proposed to make a preferential offer of naked warrants/equity shares to the promoter group, to be structured so as to enable the Tata Group to increase its shareholding from 13 to 20 per cent. The rights issue of equity shares would be in the ratio of one for every four shares held at a price of Rs 55 per share, meaning at a premium of Rs 45 per share on the sub-divided share of the face value of Rs 10 each. ACC share presently has a face value of Rs 100. ACC in a statement said the issue price represents a discount of around 35 per cent to the current market price of the company’s shares as quoted on the stock exchange. The issue would increase the equity capital by only 25 per cent from the present level of Rs 137.57 crore to Rs 171.96 crore and provide equity funds of Rs 189 crore to the company. The Tata companies would
get upto 90 lakh naked warrants/equity shares, price of
which would be about Rs 110 per share as per the relevant
SEBI pricing formula, through the proposed preferential
issue. |
Corp Bank to
implement prudential norms CHANDIGARH, Dec 8 — Corporation Bank has decided to implement the prudential norms announced by the Reserve Bank of India recently during the mid-term review of monetary and credit policy for 1998-99 in the current year itself. Announcing this at press meet at Mangalore after the mid-term review conference held by the bank with its regional heads, Mr R.S. Hugar, Chairman and Managing Director, said the bank would be able to absorb the total impact of the new prudential measures on provisioning and capital adequacy requirement due to its financial strength, quality assets and prudent management. The bank has achieved 92 per cent of cash recovery target fixed for the first half of the year and hopes to effect cash recovery of over Rs 50 crore for the full year which is 20 per cent higher than previous year. On the non-interest income front, the bank has drawn up strategies to reach Rs 200 crore level in March ‘99 showing a growth of around 40% over the level of the previous year. In the forex business, the bank has set a business turnover of Rs 49000 crore for the current year, which reflects a growth of 32% over the previous year level. The bank has brought to its fold as many as 70 corporates during the current year, taking the overall corporates availing of its cash management services to 680. The bank is confident of
completing the Y2K compliance project in all its 230 TBA
branches by March ‘99. |
Daewoo-Samsung swap to have no effect NEW DELHI, Dec 8 (UNI) — The proposed swap between Samsung Motors and Daewoo Electronics would have no immediate effect on the Indian market, senior Daewoo officials said today. “The swap would initially be only for the Korean markets and at a later date, there might be a possibility of Daewoo rolling out Samsung cars in India, but for the time being, there is no such plan,” company officials said. This is the second Korean car company which the Daewoo Group has purchased after the cash-strapped Sangyong Motors. The Samsung Group had agreed to swap its floundering auto affiliate, Samsung Motors, with Daewoo Group affiliate Daewoo Electronics in response to strong government urging. The business swap was
announced following the meeting between President Kim
Dae-Jung and Chaebol owners at the Blue House. Both
companies are expected to iron out the finer details at a
later date. |
Commercial
sale of Viagra unlikely in India NEW DELHI, Dec 8 — Viagra — the much talked-about anti-impotency drug — is unlikely to be commercially available in India due to the absence of adequate patent legislations. “ It makes no commercial sense to market Viagra or any other of Pfizer’s new drugs in India in the absence of patent protection”, Viagra’s discoverer Dr Simon Fraser Campbell said here today. Pfizer’s statement comes at a time when the government is considering to introduce a Patent Bill in Parliament, permitting exclusive marketing rights (EMRs) to drug and pharmaceutical firms. However, Dr Campbell said that “five years is too short a period for any drug firm to recover its investments”. Substantiating his arguments, Dr Campbell said the industry average on research expenditure for developing a new drug is about $ 500 million. “It takes on an average 10 to 13 years to develop a new drug”, he added. “Unless we have patent protection it makes no commercial sense to market the drug as the company has to recover the investments made on research and development it”, he pointed it. Developing new drugs is a high risk business and only one out of 10 drugs being researched actually finds its way into the market. “We also have had some spectacular failures in which huge amounts of money were spent on trying to develop new drugs”, Managing Director of Pfizer Limited Mr Ian Young said. Citing the instance of Viagra, Dr Campbell said the first proposal in this regard was made in December, 1985, whereas the approval for the commercial use of the drug was achieved only in March, 1998. Pfizer Limited, spends
about 15 per cent of its total sales — roughly $ 2.5
billion per annum — on research and development
programme in 50 disciplines. |
Mushroom
Park near Lalru planned CHANDIGARH, Dec 8 — Punjab Government has given a green signal to Punjab Agri & Export Corporation and Agro Dutch Food Ltd to set up a ‘Mushroom Industrial Park’ in Punjab near Lalru with a view to promote the cultivation of ‘mushroom’ for improving the income generating capacity of the farmers and boosting agriculture exports from Punjab. It was decided in the meeting presided over by Punjab Chief Minister, Mr Parkash Singh Badal which was attended among others by Punjab Finance Minister, Capt Kanwaljit Singh, Agriculture Minister, Mr Gurdev Singh Badal, Rural Development & Panchayat Minister, Mr Nirmal Singh Kahlon, senior officers of the State Government and Managing Director, Agro Dutch Foods Limited. After discussions it was decided to start a ‘Punjab mushroom school’ on Dutch pattern for training the young boys and girls to equip them with all kinds of techniques and skills regarding components for mushroom growing, composting and canning for export purposes. This school will impart six month training with 50 students in each batch and a stipend of Rs 1000 to each trainee with boarding and lodging would be given free of cost by the Agro Dutch Food Limited. There is a plan of making 2000 farmers as entrepreneurs initially under this scheme with a target of mushroom production to the extent of 12,000 metric tonnes. It will fetch foreign exchange to the tune of Rs 60 crore. Punjab, at present exports
mushroom to other countries to the extent of Rs 45 crore
out of Rs 75 crore exported from all over the country.
This product has markets in the USA and European
countries. |
Shell’s no to oil exploration in India NEW DELHI, Dec 8 (PTI) — Global oil major Shell has said that it will not bid for oil exploration blocks under the new oil exploration policy (NELP) barely a month before the government is scheduled to start road shows for these blocks. “In view of other opportunities, we are not interested to bid for new blocks in India,” Dr Derek J. Corbishley, Chief Executive of Shell India Production Development told PTI. Petroleum Minister V.K. Ramamurthy had earlier announced that the government would start road shows for the 48 oil blocks including the offshore, on shore and deep sea, on January 10 as part of measures to attain oil security through enhanced crude production. Stating that deep water exploration was an expensive proposition as each drilling costs about $ 20 million, Corbishley said “we have looked at data on these blocks which just gives broad overview of geology. If we have to bid we wish to accumulate more data.” He said in view of the depressed oil prices international oil companies were in the process of “reappraising” their plans and that Shell was no exception to it. Shell official said his company had withdrawn from the proposed Rs 10,000 crore joint venture refinery project with the state owned Bharat Petroleum Corporation (BPCL) as the refinery marrings had come to very low levels. Oil industry experts said
refinery margins globally had come down to as low as $ 1
a barrel from a generally acceptable level of 4 to 5
dollars a barrel, thereby prompting many oil majors to
“rethink” on new projects.
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NEW DELHI, Dec 8 (PTI) — Air India’s losses soared to Rs 129.08 crore during the first half of the current financial year on increased expenditure and reduction in yield, the Rajya Sabha was informed today. Rising interests costs, increased competition and operational costs, rise in wage bill and other staff costs, depreciation in rupee value and spurting landing, handling and navigational charges were other reasons for the losses, Civil Aviation Minister Ananth Kumar said in a written reply. During 1997-98, the corporation had accumulated a loss of Rs 181.01 crore, he said, adding among efforts made to improve the airline’s performance were marketing efforts to generate additional revenue, reduction in expenditure, network rationalisation and abolishment of posts abroad. A committee of experts had been set up under Finance Secretary Vijay Kelkar to comprehensively examine reasons for the loss and suggest strategies to turn around the company. Replying to a question on disinvestment of Air India, the minister said recommendations of the disinvestment panel were under the government’s consideration. The Civil Aviation Ministry had also recommended disinvestment of 40 per cent of government’s stake from Pawan Hans in line with the policy to disinvest from public sector undertakings he said. On steps to make Indian
Airlines more viable, Kumar said his ministry had decided
to increase utilisation of aircraft, productivity of
commanders and their availability. |
Kinetic without Honda NEW DELHI, Dec 8 (UNI) — Honda Motor Company Limited (HMC) of Japan is working towards striking off its name from Kinetic Honda scooters pursuant to the Japanese auto major’s decision to pull out of its joint venture with the Pune-based Kinetic Engineering Limited. Besides, Honda is also looking at the feasibility of setting up a separate assembly unit for its scooters in India, HMC Deputy General Manager Koji Wanaka told UNI here. On the company’s decision to remove its name off the scooters being manufactured in India, Mr Wanaka said, “though the time frame for the same is yet to finalised, the company has decided that since there is no financial participation from Honda in the venture, it would be marketed as a local brand, sans the Honda name.” However, the Japanese major would continue to give technical assistance to the project. “We had started the scooter venture with Arun Firodia and spent a lot of money and time in ensuring that it was a success, since it is our baby, Honda will continue to give technical assistance to Firodias, a new technical collaboration agreement in this regard is yet to be signed.” Mr T. Fujisaki, another Honda representative and President of Hondasiel Cars India Limited also aired similar views saying that Kinetic Engineering will be allowed to retain and use the Honda name on its scooters till final procedures for taking off the name is finished. “The time frame has not been finalised but eventually the Honda name has to be taken off.” On the plans to set up a separate scooter assembly unit in India, Mr Wanaka said, “the possibility is always there.” “We would not deny anything for the future. The possibility is always there...we are an entrepreneur, we have to expand, but for the time being, our priority is to give technical assistance to the Kinetic scooter project,” he added. Mercedes Benz NEW DELHI (PTI): The famed jeep and grand cherokef multi-utility vehicles of US auto major Chrysler may well hit Indian roads in near future as Mercedes Benz India Ltd (MBIL) is considering introducing these vehicles in the country. MBIL’s plan in the outcome of the worldwide merger — the fourth largest in corporate history — between Germany-based Daimler Benz and Chrysler to form Daimler-Chrysler, a company official said here. Esteem NEW DELHI (UNI): Market leader Maruti Udyog Limited’s Esteem sales skidded off the tracks hitting a major breaker during November 1998 to record a 26.8 per cent drop as Ford Escort sales moved into overdrive speeding away with a 116 per cent growth in retails over October 1998. According to industry estimates, the effects of competition has started showing on the market leader with its sales dropping and the company resorting to major production cuts. Capacity NEW DELHI (UNI): Hit hard by the sluggish demand and slump in economy, capacity utilisation of four wheelers has dropped from 74 per cent 1995-96 to 54 per cent in 1997-98, according to Industry Minister Sikander Bakht. However, installed capacity during the period has gone up from 918,000 units to 1,296,000 units, Mr Bakht said. Capacity utilisation of
two and three wheelers has also fallen from 80 per cent
in 1995-96 to 72 per cent in 1997-98. Installed capacity
of two and three wheelers has also been on the rise
during the period growing from 3,552,000 units to
4,592,000 units. |
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| Video album CHANDIGARH, Dec 8 (TNS) — Maa Durga Creations, an organisation promoted by Gaurav Marya and Shalini plans to invest in entertainment business like TV serials, video albums and different events. They have started with a video film which is conceived by Ashok C Bali a name in performing art. The album will carry eight numbers by Saurabh Jain, a Sa Re Ga Ma (Zee TV) star and will hit market in January. Mr Gaurav said the company will launch Club City Card in January which will cover different events in the city like star nites, musical nites and film premieres etc. The company expects 800-1000 customers and the cost of the card will be Rs 4999. Nerolac Paints Resort Ranbaxy SBP |
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