Indo-Lanka free trade pact on cards
NEW DELHI, Dec 25 — A proposed bilateral free trade agreement between India and Sri Lanka promises to be a trend setter for other countries in the SAARC, whose attempts to forge a similar multilateral pact in the region has failed to take off due to the Indo-Pakistan conflict.

Chill brings cheers for hosiery
LUDHIANA, Dec 25 — Wintry chill and the heavy fog which has accompanied it in the entire northern region during the past couple of weeks has brought cheer to the woollen hosiery industry of Ludhiana.

• Ashok Khanna PHDCCI chief

• Gold recovers

Indo-Lanka free trade pact on cards
From T.V.Lakshminarayan
Tribune News Service

NEW DELHI, Dec 25 — A proposed bilateral free trade agreement between India and Sri Lanka promises to be a trend setter for other countries in the SAARC, whose attempts to forge a similar multilateral pact in the region has failed to take off due to the Indo-Pakistan conflict.

The agreement on free trade is likely to be signed during the three-day visit of Mrs Kumaratunga to India beginning on Sunday.

Last minute negotiations on the proposed agreement are still on between the two countries and the pact when signed would help Colombo in a big way in restoring the balance of trade, which is loaded heavily in India’s favour.

Free trade between the two countries is expected to cover a large basket of products expect those items which are produced in Sri Lanka.

Mrs Kumaratunga was recently quoted in a published interview as saying that the proposed agreement “helps us a great deal because it opens out a large market which has been closed to us for a long time.”

The agreement is a result of the Prime Minister, Mr Atal Behari Vajpayee’s unilateral initiative at the last SAARC summit in Colombo where he spoke of removing quantitative restrictions on exports to India. It was also discussed in detail at a recent session of the sub-commission on trade and economic cooperation of India and Sri Lanka.

What shape the pact takes remains to be seen as there have been apprehension in Colombo that the markets of Sri Lanka would be swamped by Indian goods.

Mrs Kumaratunga has, however, described the fears of Indian dominance over Sri Lankan markets as misplaced saying the interests of the domestic industry would be protected.

Sri Lanka exports to India in 1997, was worth around $ 40 million compared to India’s export of $ 500 million worth of goods to that country.

A senior Sri Lankan economist, Dr J.B. Kelegama, has been quoted as saying that the proposed fast track trade agreement was “superfluous” as India has already liberalised its import policies and reduced tariffs dramatically. According to Dr Kelegama, import tariff structure in India was not very much higher that what prevailed in Sri Lanka.

The proposed agreement follows the establishment of the Bangladesh, India, Myanmar, Sri Lanka, Thailand-Economic Cooperation (BIMST-EC) forum which would work as an important engine of greater economic cooperation and progress within the BIMST-EC sub region. The forum established in a meeting in Bangkok in June 1997, was expanded with the inclusion of Myanmar last week in Dhaka.

Initially the economic forum has identified six sectors for cooperation namely, trade and investment, technology, transportation and communication, energy, tourism and fisheries.

These trade initiatives assume significance as it provides an opportunity to India to forge economic cooperation with neighbouring countries, independent of the influence of Pakistan.

Single authority for IT services sought

NEW DELHI: PTC India Foundation (PTCIF), a country chapter of the US-based Pacific Telecommunications Council, has called for a single regulatory authority and a single ministry to deal with the converging technologies and services in information technology, telecommunication and broadcasting.

In a set of recommendations submitted to the Prime Minister’s group on telecommunications, the PTCIF has suggested delinking of network operation from the services, single licence specifying only areas of operation, facilitation of convergence of services and technologies, opening up of long distance with priority to existing operators and replacement of licences with revenue sharing arrangements in the new telecom policy which the group is in the process of drafting.

The PTCIF suggested a telecom density of 10 per 100 by 2006 and of 25 by 2010. It warned that otherwise the service would be confined only to rural areas thereby widening the gap between the rich and the poor within the nation. This would increase public resistance to economic reforms.

The foundation suggested strengthening of the TRAI which should determine the number of operators and criteria for selection. — UNI

‘IT man of year’

NEW DELHI: Managing Director of computer software major NIIT Ltd Rajendra S. Pawar has been named the dataquest “IT man of the year for 1998” for his contribution to growth of information technology (IT) sector in India.

He is currently a member of Prime Minister’s task force, entrusted with developing India into a global IT superpower by 2008.

He is credited with having created and led NIIT into a global leader in IT services, education and trading. NIIT today offers services in about 25 countries including USA, Japan, UK and Singapore, the company said.

A visionary, Mr Pawar foresees India playing a pivotal role in the IT-related disciplines in the next century. — PTI

123India

CHANDIGARH: 123India has launched 123India Mail (http://mail.123india.com), a free web-based e-mail service for Internet users. The service will give users one e-mail address for life, whether they switch from one ISP to another, change jobs or change their access providers. 123India Mail caters to a wide spectrum of users — business travellers, students, professionals and anyone looking for the convenience of a free e-mail address which they can keep for life. — TNS

Internet-2

NEW DELHI: The Department to Telecommunications (DoT) will invest in the proposed sanghya vahini project aimed at ushering in Internet-2 into the country, a top government official said here.

A Rs 150 crore company is being set up to establish Internet-2 in the country and DoT will be making the initial investments in the venture, National Informatics Centre Special Secretary Dr N. Seshagiri, said today.

Internet-2, the second phase of Internet will offer better video and audio than what today’s internet offers as the net will have 2.5 to 10 giga bit capacity.

“We will bring Internet-2 in the country before the end of next year, simultaneously the USA will be bringing the technology for the world, Mr Seshagri said. — PTI

Essma Woollen dispute resolved
Tribune News Service

AMRITSAR, Dec 25 — Mr Balramji Dass Tandon, Minister Labour, Employment and Local Self Governments settled the dispute between the management and workers of local Essma Woollen Mill GT Road and its branch at Ram Tirath Road.

According to Mr Tandon a lock-out took place in the mill after a dispute between the management and workers on May 15. After removal of the lock-out, many workers refused to join the duty. Such workers were dismissed on November 15 after proper enquiries, as a result the mill was not working for the last seven months.

According to the settlement, the above said workers will get the compensation of their break period i.e. gratuity, bonus, leave benefits and Rs 4000 as ex-gratia grant will also be paid to the each worker. Despite this, the management will ensure re-employment of such workers in one week to bring the mill in working condition. But the workers will have to hand over the possession of their quarters before getting these facilities, he said.

Chill brings cheers for hosiery
From A.S. Prashar
Tribune News Service

LUDHIANA, Dec 25 — Wintry chill and the heavy fog which has accompanied it in the entire northern region during the past couple of weeks has brought cheer to the woollen hosiery industry of Ludhiana.

Down in the dumps for a rather extended period of time due to a variety of reasons, the mood is now buoyant in this woollen hosiery capital of India. The severe cold has brought customers rushing to the hosiery manufacturers and dealers in the mega city. The once deserted sales counters in the factories as well as the main markets of Ludhiana are now a beehive of activity and goods worth hundreds of crores of rupees which had piled up with them since October are now getting cleared steadily.

“A feeling of impending doom had been hanging over the woollen hosiery industry for the past two and a half months”, says Mr Girish Kapoor, a leading manufacturer of hosiery goods. The off-take of woollen hosiery was very slow because of the late onset of winter. The festivals like Dussehra and Divali fell in the months of October and November when the weather was still warm. The first spell of “wedding season” also fell in December. And to top it all, the winter too took its time in arriving. All these factors led to very sluggish sales of woollens in October, November and the first half of December.

“The mood was so despondent that in a large number of cases, the retailers began returning goods to the manufacturers”, says Mr Jagmohan Singh, another maker of quality hosiery goods. “There are no sales” was the most common phrase heard in the industry.

The situation was further complicated by two leading hosiery manufacturing houses of Ludhiana who produced goods worth hundreds of crores of rupees and dumped them with the retailers. “Their intense competition led to overproduction and oversupply in the market,” say knowledgeable market watchers here. “And when they asked for payments for the goods supplied, the retailers began returning the stocks. This forced them to extend by more than a month the last date for payment”.

All this created a panic-like situation in the industry. Most of the manufacturers of hosiery goods either cut back on their production drastically or stopped it altogether. “We have reduced our production and are now preparing to switch over to cotton knitwear much ahead of our normal schedule”, says Mr Raj Awasthi, another leading manufacturer of woollen and cotton knitwear including sportswear and leisurewear. A large number of manufacturers began offering their products on a discount even before the commencement in right earnest, of the regular sales.

But the onset of winter has brought about a sea change in the situation. “Things have looked up sharply”, say Mr Ripan Jain and Mr Parveen Jolly, who specialise in the manufacturing ladies shawls and men’s quality fashionwear respectively. “There is now hope that things will normalise before long and all the goods piled up with retailers will be cleared...” They are confident that another spell of wedding season coupled with Lohri in the first half of January will see them through. “We are now receiving enquiries even from far off places like Lucknow,” says Mr Ashok Jain. “We are wondering whether or not to recommence production to meet the renewed demand for supplies.”

Boom time for consumer electronics

NEW DELHI, Dec 25 (UNI) — The consumer electronics industry witnessed booming business in the year that was but profit margin declined for most manufacturers.

Perhaps the most noticeable trend in 1998 was that consumer electronics became a volume-driven business. Status symbols of middle-class people like colour televisions (CTVs) and refrigerators became ordinary commodities which could be bought even on roadsides.

The consumer had the best of times while global and Indian brands battled among each other with technology-oriented products and innovative marketing strategies.

Prices remained under most people’s reach, exchange schemes proliferated and new products reached new markets. Significantly, several companies realised that rural markets can no longer be neglected.

As Mr K.S. Raman, President of the Consumer Electronics and Television Manufacturers Association (CETMA), said: “the industry must increase penetration level of TVs in rural markets from the present level of 9 per cent. Unfortunately, Indian manufacturers have not yet realised that as much as 60 per cent of total TV turnover is going to be in rural markets of the future.’’

He said the present sale of about 90 lakh TV sets with an annual turnover of Rs 4,500 crore is expected to shoot upto 1.5 crore TVs by the year 2005.

So when 34 sectors of the Indian economy showed negative growth in production and 26 in sales due to continued slowdown in demand, colour televisions, refrigerators, airconditioners, washing machines, air coolers besides audio and cassette tape recorders showed a respectable upswing in production and sales.

The CTV segment clocked a 20 per cent increase in its turnover during first half of the current fiscal year compared to same period last year.

The Rs 2,500 crore audio products industry marked 15 per cent upswing during April to October despite absence of uniform guidelines on sales tax for state governments. However, outlook for the near future was a continued 15 per cent growth.

Industry sources say the trend in these two segments can be fuelled if banks and non-banking financial companies give up their reluctance to fund the consumer electronics sector. Those involved in production of black and white TVs are also earning benefits under duty entitlement passbook scheme (DEPB) be raised to 28 per cent from the present 20 per cent.

In the refrigerator market, Godrej GE and Kelvinator (now taken over by Whirlpool Corporation) continued to lead the Rs 2,000 crore market with 37.4 per cent share. Late entrants Videocon and BPL have now created a niche market by concentrating on the latest frost-free range of refrigerators whose share is expected to grow from 15 per cent to 35 per cent in the next few years.

Electrolux, a new entrant, is now planning to launch both the Kelvinator and Electrolux brand of refrigerators under the no-frost category.

Imports ‘ruining’ sugar industry
From Jatinder Sharma
Tribune News Service

ROHTAK, Dec 25 — Sugar will be bitter for all Indians and sweet for Pakistanis, Europeans, Brazilians, Mexicans and Thais.

The Indian sugar industry has said that on the pretext of cheap imports foreign producers aided by massive subsidies in their home countries, will make the country’s sugar industry bankrupt.

“The subsidised cheaper imports totalling 16.5 lakh tonnes out of which nine lakh tonnes are from Pakistan, were not only draining the country’s precious foreign exchange but could cause irreparable damage to millions of farmers, sugar mill workers and the Indian industry. Consumers will be targeted later by international conspirators with high prices for sugar after damaging the indigenous production capability”, the Indian sugar industry said in a memorandum submitted to Prime Minister Atal Behari Vajpayee.

Surprisingly, cooperative sugar mills at Rohtak, Meham, Jind, Karnal and Sahabad had last year exported two lakh quintals of sugar to Pakistan at the rate of Rs 1210 a quintal. Now, Pakistan is exporting sugar to India at a cost of less than Rs 900 per quintal.

The sugar industry says that the “dumping” of sugar will damage India more than any war. The huge cane price arrears that the sugar industry owe to growers, will cause unrest and force 45 million Indian cane growers to never cultivate sugarcane again. Two million workers will lose their jobs.

Farmers and mills are likely to produce 155 lakh tonnes this year. A false propaganda of rains ruining the sturdy sugarcane crop has been encouraged, but the expert opine that excessive rains may, in fact, increase sugar output, the industry said.

A level-playing field and liberalisation as recommended by the high power committee can make India a regular and sizeable exporter of sugar.

In the dumping price war, overseas producers and speculators have won. India has fixed the import tariff for sugar at 5 per cent only. The European Union has import duties of 300 per cent, Mexico 173 per cent and Thailand 104 per cent. The multinational sugar companies and commodity traders, who have no commitment to Indian sugar sector, are taking advantage of the low import duty here and depressed world prices to make quick profits.

While no action can be taken against a person hoarding imported sugar, the domestic sugar, on the other hand, is subject to controls at every stage, it added.

HC approves Shaw Wallace plan
for repaying debt
Tribune News Service

CHANDIGARH, Dec 25 — The Calcutta High Court has approved the Shaw Wallace’s debt repayment scheme envisaging a time-bound repayment of debt under provisions of Section 391 of the Companies Act.

Justice S.K. Sinha sanctioned the scheme proposed by Shaw Wallace.

Approval of the scheme heralds the process of freeing Shaw Wallace from the crippling debt liability, said Mr Ravi Jain, Managing Director, Shaw Wallace.

Shaw Wallace had sought the court’s permission to commence repayment under the scheme immediately as the company has maintained a corpus for such repayment over the past one year. However, a section of the creditors went in appeal against the order of Justice Sinha. The appeal will be taken up by the court in January next year. Shaw Wallace has meanwhile given an undertaking to the court in respect of suspending implementation of the scheme till January 15, 1999.

The draft scheme prepared by Shaw Wallace envisaged paying all creditors having claims up to Rs 10 lakh within a period of 6 months from the effective date. Creditors having claims exceeding Rs 10 lakh were to be paid over seven instalments spanning a period of 27 months from the effective date. It was proposed that no interest would be payable after June 30, 1996.

The court has also stayed the operation of the Company Law Board (CLB) order of July 27, 1998 appointing four directors (two on behalf of CLB and two on behalf of the Central Government) on the Board of Directors of Shaw Wallace.

Milkfed MD gets Vikas Jyoti award
Tribune News Service

PATIALA, Dec 25 — Local Milkfed milk plant Managing Director S.S. Sandhu has been conferred with the nation’s Vikas Jyoti award and the National Integration award by the Indian Economic Development and Research Association.

A Milkfed press release here today said both awards had been conferred on Mr Sandhu by Union Minister of State for Social Justice Maneka Gandhi and Union Minister of State for Urban Development Bandaru Dattatreya at a function held in New Delhi on December 22.

Mr Sandhu’s ability raised milk procurement during the year 1997-98 as much as 27 per cent. An increase of 11 per cent in the overall fluid milk, an improvement of Rs 44 lakh in the financial position.

Mr Sandhu said the milk plant had obtained BIS certificate from Bureau of Indian Standards for the manufacturing of different type of cheese such as processed cheese, pizza cheese, cheese single, cheese spread and mozzrella cheese. He said the milk plant has now gearing up to meet ISO:9002/IS-15000 specifications in order to compete at the international level.

Govt to off-load 74 pc stake in Modern Food

NEW DELHI, Dec 25 (PTI) —The Government today decided to privatise public sector Modern Food India Ltd by selling 74 per cent of its equity.

Announcing the decision taken at the meeting of the Union Cabinet, Finance Minister Yashwant Sinha told reporters that the equity would be sold to a strategic partner. MFIL is the first PSU where the government decided to off-load majority stake, reversing the earlier decision to divest only 50 per cent stake.

Agency on cold storage recommended

NEW DELHI, Dec 25 (PTI) — A parliamentary committee has criticised the lack of coordination among different procurement agencies and the state governments concerned and recommended a nodal agency to supervise storage of perishable commodities.

Expressing concern about the government’s muted response in setting up cold storage units, the Standing Committee on Food, Civil Supplies and Public Distribution said it should evolve a coordinating agency along with the Central Warehousing Corporation (CWC) as a nodal agency for various agencies involved in the construction of cold store, temperature-controlled storages and pre-cooling facilities.

Ashok Khanna PHDCCI chief
Tribune News Service

NEW DELHI, Dec 25 — Mr Ashok Khanna, a prominent industrialist of Chandigarh, has been elected as President of the PHD Chamber of Commerce and Industry (PHDCCI) for 1998-99.

Mr Khanna is the Chairman and Managing Director of Khanna Watches Ltd. He is the Chairman of Khanna Quartz Limited, Director of Industrial Cables India Ltd and Jaycee Coach Builders Ltd and Vice Chairman of Khanna Charitable Trust.

Mr Khanna was awarded the IEC Udyog Kulpati Award for outstanding leadership in watch components industry and IES Udyog Rattan award for the contribution towards industrial development.

Gold recovers

NEW DELHI, Dec 25 (PTI) — Prices of both the precious metals, silver and gold recovered on the bullion market today. The quotations: Silver .999 (ready) 7360, delivery 7370, coins buyer 10,400, seller 10,600. Standard gold 4235, ornaments 4085 and sovereign 3725.