Monday, December 28, 1998
today's calendar
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B U S I N E S S | Monday, December 28, 1998 |
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spotlight today's calendar |
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Euro launch on January 1 IOC,
ONGC, BPCL and GAIL to buy back shares |
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FICCI
sets up forum on direct selling
HC
notices to Textiles Ministry, AEPC Bulls
bring joy to bourses Inflation
falls to 7.01 per cent |
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ST
amendments to hit industry THE proposed rule 28-B of the Haryana General Sales Tax Rules, 1975 though aimed at providing incentives to new and the sick industrial units does not extend to the eligible industrial units the benefit of tax exemption on the purchases which is not in conformity with the provisions contained in Section 13-B of the Haryana General Sales Tax Act, 1973. Another significant aspect of the proposed rules is that the state government does not intend to promote expansion and diversification of the existing units as the expression “eligible industrial units” is now sought to be defined differently. In the previous rule 28-A, the benefit of tax exemption used to be provided to new industrial units, units undertaking expansion or diversification and the sick industrial units while in the present set of rule 28-B no benefit is proposed to be given to the units undertaking expansion or diversification. What is now sought to be included in the definition relating to “new industrial unit” is the units which are or have been set up in the state during the operative period as also those independent units which the existing or the new industrial unit sets up in the State. The condition imposed is that the units so set up shall not be dependent on the existing or new industrial units in any way. This is absolutely a new concept that the state government seeks to introduce to the statutory definition of the term “new industrial unit”. Importantly, the state government seeks to add two new clauses to the definition of the expression “eligible industrial unit” as proposed in clause (e) of sub-rule (2) of rule 28-B which did not exist in rule 28-A of the Haryana General Sales Tax Rules, 1975. Clause (II) obliges the unit seeking the benefit of tax exemption to obtain clearances, if any, as may be necessary, from the Central or State Government and/or other authorities. The other condition imposed in sub Clause (VII) of clause (e) of sub-rule (2) of rule 28-B is that the unit seeking the benefit of exemption should not be in default under the Haryana General Sales Tax Act, 1973/Central Sales Tax Act, 1956, and also should not be in default whatsoever with Haryana State Industrial Development Corporation/Haryana Financial Corporation/Haryana State Electronics Development Corporation/Haryana Agro Industries Corporation/Haryana State Land Development Bank/Haryana State Co-operative Bank/any other Apex Cooperative institution of Haryana. What is equally
significant to note here is that the law relating to
yearly renewal of exemption certificate or the
entitlement certificate, as the case may be, is sought to
be retained. Similar provision for renewal of exemption
certificate existed in rule 28-A also. Practically, this
requirement of renewal of exemption certificate from year
to year serves no useful purpose more than adding to the
paper formalities. It would be more appropriate if the
exercise involving renewal of exemption certificate or
the entitlement certificate is clubbed with the process
of assessment. All that is required for renewal of the
exemption certificate can well be furnished during the
course of assessment proceedings before the assessing
authority and that the points required to be considered
as proposed in sub-rule (8A) of rule 28-B can more
effectively be adjudicated upon at the time of assessment
itself. This will surely lessen the paper formalities and
lead to avoidance of repetition of filing of documents. |
Euro launch
on January 1 NEW DELHI: The Euro will be launched on January 1, 1999 as the single currency knitting together 11 countries of the European Union which will become the European Monetary Union (EMU). Four countries of EU have remained out of the EMU for the present — Britain, Denmark, Sweden and Greece. EMU will impose severe restraints on the member countries in framing their individual fiscal and monetary policies as these would have to be subordinated to common criteria which will help the Union hold together. The exchange rates between the national currencies of the 11 countries and the Euro would be announced by December 31 by the European Central Bank which will be the supreme monetary authority in EMU. It comprises the central banks of the participating countries. The single currency is expected to bring substantial productivity and growth benefits through decreased transaction costs, increased allocative efficiency and elimiantion of exchange risk premia in interest rates, according to the World Bank. It would promote greater flow of investments within the Union and deepen the European capital markets. The leading members like Germany and France had over the last few years resorted to fiscal tightening, at the risk of increasing unemployed, to conform to the criteria laid down for membership of EMU. Early this month, the 11 countries effected a cut in interest rates to ease money supply and promote growth of the economies which have begun to reel under the effects of a global downturn. This had become necessary after USA cut its rates thrice within two months. With stray left-oriented governments in Europe, reduction of unemployment is being given priority in economic policies to achieve better growth. All the countries of EMU would be compelled to move in tandem in future in regard to fiscal consolidation and structural reforms though this should boost growth prospects and the investment climate for the European Union as a whole. Whether the Euro would be a strong and stable currency is the question posed by monetarists. Given the size of the common market, the European’s share in output and world trade, Euro is set to become a rival to the dollar once its stability is firmly established. For this, the countries of EMU would have to keep inflation low and budget balances sustainable. The World Bank expects the Euro, over the medium term, to appreciate relative to the dollar, in line with the larger current account deficit of the United States. The consensus, it notes, is that the Euro will slowly become a major international reserve currency. Some developing countries will be more directly exposed to potential impacts of the Euro, due to their close and expanding links though trade and capital flows, currency arrangements and geographical proximity. Impact is likely to be strongest in countries where trade in manufactured goods with EU is highest, according to the World Bank. The RBI has already instructed banks to offer deposits in Euro from next year, to facilitate transactions. India’s trade with EU is over 20 per cent of its total exports and EU countries account for over 60 per cent of investment flows to this country. Indian exports, like imports from EU would have to be denominated in Euros while the emergence of Euro would create a shift in the holding pattern of international reserves. The Euro area has a
population of 295 million and accounts for 20 per cent
world GDP and one-fifth of global trade in goods. (IPA) |
IOC, ONGC, BPCL and GAIL to buy back shares NEW DELHI, Dec 27 (PTI) — The government will take to the buyback route in four oil public enterprises and franchise Chennai and Calcutta Telecom circles to cash rich Mahanagar Telephone Nigam (MTNL) to mop up Rs 10,000 crore. The four oil PSUs are cash-rich Indian Oil Corporation (IOC), Oil and Natural Gas Corporation (ONGC), BPCL and GAIL which have huge reserves to fund buyback of shares from the market and buyback of shares of these enterprises is expected to fetch Rs 5,000 crore, official sources told PTI. IOC had free reserves of Rs 10,151 crore, ONGC Rs 18,637 crore, BPCL Rs 2350 crore and GAIL Rs 2292 crore totalling about Rs 34,000 crore at the end of last financial year, 1996-97. The franchising move which would earn a revenue of Rs 5,000 crore, follows the suggestion made by the Tamil Nadu Chief Minister M. Karunanidhi to Union Government that the Tamil Nadu Telecom circle be handed over to MTNL for improved and efficient service, sources said. MTNL which has expressed its desire to takeover Chennai and Calcutta telephone operations, proposed to participate in the next round of bidding for basic services which will cover these two metropolis. The generation of Rs 10,000 crore from these measures is expected to greatly help in controlling fiscal deficit which has been widening particularly with massive shortfall in indirect collections. Coupled with this, the government expects to garner Rs 1,500 crore from Kar Vivadh Samadhan scheme defying all expectations that fiscal deficit, which is targetted to be 5.6 per cent of GDP, would go awry. Because of economic slowdown and industrial recession, there was bound to be some slippages in fiscal deficit targets, sources said adding it would certainly not be as bad as it is made out to be. Sources said besides the four oil companies, few other cash rich PSUs like Nalco and BHEL might be considered for buyback of shares in the second stage. The whole exercise of identifying the companies that have the reserves to buyback and determining the exact quantum of amount to be raised are expected to be finalised by January end. In view of the capital market being bearish in both domestic and international, buyback route would be better than disinvestment route as it (buyback) would entail captive buying in which government would pay from its reserves and later extinguish its shares. Another advantage would be
that government equity would remain the same in the PSUs
as a proportion to total equity unlike disinvestment in
which government equity comes down. |
London ICSA,
ICSI sign MoU NEW DELHI, Dec 27 — The Institute of Company Secretaries of India (ICSI) and the Institute of Chartered Secretaries and Administrators (ICSA), United Kingdom, today signed a memorandum of understanding. Following the MoU, the members of ICSI desiring to pass the qualifying examination conducted by ICSA will be eligible for paper-wise exemption in 14 out of 17 papers in the ICSA examinations. Likewise, the ICSA members
desiring to pass the qualifying examination conducted by
ICSI will be eligible for paper-wise exemption in 17 out
of 20 papers in the ICSI examination. |
FICCI sets up forum on direct selling NEW DELHI, Dec 27 (PTI) — The Federation of Indian Chambers of Commerce and Industry (FICCI) has constituted a specialised and highly representative forum on non-traditional retailing to promote healthy direct selling concept. The forum, under the Chairmanship of Samir Modi, Managing Director of Modi Care, has adopted a code of conduct for the member companies to uphold principles of fair trading, the chamber said in a statement here today. The chamber will soon set
up a consumer redressal cell to look into genuine
consumer grievances and problems as an off-shoot of the
forum, the statement added.
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HC notices to Textiles Ministry, AEPC NEW DELHI, Dec 27 (PTI) — The Delhi High Court has issued notices to Textiles Ministry and Apparel Export Promotion Council (AEPC) on a petition filed by an association of exporters, alleging financial irregularities by AEPC. Petitioner all-India garment exporters common cause guild submitted that the council had not deposited the entire money forfeited from exporters to the government for the last three years, in violation of law. AEPC has forfeited Rs 42 crore from defaulting exporters during this period, which should have been deposited in the government account, the petition alleged, adding that only Rs 11 crore had been deposited. The guild has also challenged AEPC decision authorising its executive committee to contribute to charitable funds, saying this was contrary to the council’s objective and the government’s approval should have been taken in this regard. The petitioner alleged that imposing conditions of earnest money deposit or bank guarantee for quota allotted to the exporters for participation in Berlin Fair was “illegal” and the amount should have been returned to exporters. The guild sought an
investigation into the alleged financial irregularities
by Comptroller and Auditor General of India (CAG). |
Second-hand
wheels make smart deals TELCO may have billed its latest offering, Tata Indica, as “India’s most eagerly awaited car” but for a large majority the most eagerly awaited set of four wheels is still a second-hand vehicle procured from one of the flourishing, Sunday-morning “car bazars”. Says Kirpal Singh, a dealer in second-hand vehicles, “Most of our customers are salaried, middle-aged householders looking for a car to take their families out occasionally. They usually settle for pre-’94 Maruti 800s in the Rs 90,000-1,10,000 price bracket. Of late, though, the number of young, double-income couples visiting us has also gone up.” One such couple, Mrs and Mr Arun Sharma, were seen carefully inspecting the vehicles lined up at the car bazar on Chandigarh’s Madhya Marg. Talking to them revealed their priorities: Maruti 800, post ‘95, single owner. The immense popularity of Maruti 800 amongst second-hand car buyers can be gauged from the manner in which it holds its price year after year with well-maintained four-year-old machines commanding a figure in the vicinity of Rs 1,25,000 i.e. almost 60 per cent of the price of a new car. This despite the fact that the 800 is the “most easily available commodity” in the bazar. Infact, most of the other models lined up for sale are also Maruti-Suzuki products viz Zen, Esteem and Omni, while the one-time icons of Indian motoring — Premier Padmini and HM Ambassador — find few takers. About the prevailing prices of second-hand cars, dealers aver the pre-launch hype surrounding Santro and Matiz has eroded the resale values of the Zen and the 800 considerably. Prices of the Maruti Zen went down by almost Rs 20,000 compared to those prevailing a few month’s back while the fall in the prices of the 800 was limited to about Rs 10,000. However, reflecting the public’s lukewarm response to new cars, prices of second-hand Maruti cars have stabilised now. Still, they apprehend that in the coming months, the success of Telco’s Indica could trigger another downslide in the prices of second-hand cars. Another factor that has been instrumental in eroding the resale value of cars is the easy availability of finance and a host of attractive schemes for buying new cars. In contrast, buyers of second-hand cars have few options for sourcing finance. The big companies are not keen on financing second-hand car purchases while car-loans from the work-place or banks involve innumerable hassles. Thus, a person is left with the two equally unpalatable choices — either to dip into one’s own savings or to approach the unscrupulous small-time financiers. This has prompted many prospective buyers to go in for new cars, leading to a decline in the demand for used cars. With competition
increasing in the small-car segment, prices of new cars
are likely to remain stable for some time. Together with
the fore-mentioned factors, this is bound to have a
depressing effect on the prices of used cars. Therefore,
from here on, deals in second-hand wheels can only get
smarter! |
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MUMBAI, Dec 27 (PTI) — The Christmas week brought joy to the bourses with the bulls tightening their grip on fresh purchases by foreign institutional investors (FII’s) and domestic funds. The halt in the four-day air attacks by the USA and the UK on Iraq acted as the catalyst to investors and the sensex was pushed up by 88.36 points at BSE. The market also got a boost when the controversial Patents Bill was introduced in Rajya Sabha during the just concluded winter session. Companies (Amendment) Act Bill and buyback of shares with some alterations gave fresh support to the depressed market. FII’s, who had reduced their purchases on account of Christmas holidays and the year-end, re-entered the market as the Patents Bill was being introduced and created fresh positions to book profits at a later date in softwares, pharmaceuticals and consumer goods shares in the process lifting the index substantially. Cement shares were also in limelight following reports that the government was considering using cement in a big way in highway constructions. There was mild reaction when the Patents Bill was deferred to be tabled in the Lok Sabha during the Budget session whereby FII’s booked profits at higher levels in some of the heavyweighted shares. Domestic funds restricted their activity on Thursday to squaring up positions for the settlement and on account of long weekend holidays for Christmas. Infosys Tech was in limelight following reports that board of directors had considered bonus issue in the ratio of one share for every share held. The scrip flared up by Rs 239.50 to Rs 2915.25. Pentafour Software was also in good demand from FII’s and domestic funds, rising by Rs 44.00 to Rs 656.00. Satyam Computers also traded both ways on demand and offerings. The scrip finally settled with a rise of Rs 23.75 at Rs 653.75. NIIT gained by 86.75 to 1548.25. Shares of Tata Group
companies fared better with Telco, Tisco, Tata Tea and
Tata Chem showing handsome gains on informed buying.
Among the multinational companies Britania and Castrol
were in the forefront on all round bull support. |
Inflation falls to 7.01 per cent NEW DELHI, Dec 27 (PTI) — Annual rate of inflation slid further to 7.01 per cent for the week ended December 12 as prices of food articles continued to return to normalcy from their recent highs. Inflation, based on the wholesale price index (WPI), fell by 0.63 percentage points to 7.01 per cent (provisional) during the week from 7.64 per cent (P) recorded in the previous week. However, it was still much higher compared to 4.31 per cent recorded in the same week last year. Inflation has fallen by
about 1.85 percentage points in the last six weeks after
it touched a three year high of 8.85 per cent. |
UTI US-64 dividend for the year ending June 98 not-received. Duplicate dividend still awaited inspite of sending undertaking for issue of duplicate warrants of the following certificates 400970200592561 and 62, 4009400 10042906, 40098001018929 and 40195014002459. Din Dyal Garg II I have not received US-64 dividend of the following certificates inspite of sending request for issuing duplicate warrants. 49311317800, 400970200592628 and 29, 400950140234012. Reshma Devi III I deposited Rs 8500 in MISG-91 scheme of Unit Trust of India on 15-5-91. The scheme terminated on 1.7.98, but no amount has been refunded till todate in spite of several reminders. Parmila Rani I am getting notices again and again from Sardar Sarovar Narmada Ltd. (SSNL) for the non-payment of call money. I had already intimated to them vide my letters dt. 18.9.98, 10.3.97, 18.4.95 and 28.10.94 that I had paid the call money of Rs 2500 in time vide DD No. SB 160114559 dt 1.7.94 deposited at Indian Bank, Sector 7-C, Chandigarh. Neither they have sent me the “Interest Warrants” since 1994 nor they had given reply of my any letter. S.S Setia Videocon Intl I had enclosed 2 No Bonds Certificates, Regd Folio 3429 each of 100 bonds distinctive Nos. 5422801 to 5422900, Certificate No. 54229 and distinctive Nos. 5421601 to 5421700 and certificate No. 54217 for early remittance of redemption amount @ Rs 100 per bond due on 20.2.98. I have sent reminders to the firm, but no response from the company. Gian Chand Goyal Anubhav I have deposited Rs 15000 with Anubhav Plantation Limited, Chandigarh dated 30.9.1996 vide receipt No 20593 account Anubhav Finance Shri Priyanka & Company for five years. Company has issued post dated cheques, but interest cheques has bounced after repeated reminders. I am getting neither interest nor amount. Neeru Goel Dee Pharms I was allotted Doctors Bond certificate No 2812 Dee-Pharma Ltd B-142, Okhla Phase-I, New Delhi 110020, due for maturity on 17th August 1998 (Maturity Amount 20,000). I sent two reminder, but no reply is received from the company. Prem Kumari Modern Syntex We deposited Rs 10,000 in Modern Syntex towards non-convertible debenture and Rs 25,000 in Modern Derim Ltd for non-convertible debentures for 1½ years. The aforesaid companies are facing financial crunch and are not paying the amounts deposited for a the said period. P.S Nanda JCT I deposited a sum of Rs 15,000 with JCT Ltd., New Delhi under their FDR No USHO 438/109649 dated September 26,1997 for one year. The repayment of the deposit had fallen due on September 26 and the FDR in original duly descharge was sent to them an August 20. Since then a spate of reminder has been sent but no response has been received. Usha Tayal RBI Bonds I invested Rs 1 lakh in Reserve Bank of India Bonds through State Bank of India Mall Road Main Branch, Patiala. The application for the same is regd at S.No 44, with in SBP Patiala and cheque for the amount was encashed on 29/6/98. I have not received the above Bonds nor any initimation of the same inspite of innumeral personal efforts. P.S. Sidhu |
BEIJING: The International Monetary Fund (IMF) has significantly upgraded its growth forecast for China and sought to defend Beijing against charges that official gross domestic product (GDP) estimates were exaggerated. The IMF in its interim world economic outlook has hiked its forecast for China’s growth this year by 1.7 percentage points to 7.2 per cent. It also revised its outlook for 1999 from 5.5 per cent to 6.6 per cent. The IMF report noted that doubt had been cast on the accuracy of China’s GDP calculations by referring to the relatively slow growth in electricity production and freight traffic. The IMF said it was ‘unclear how slow or negative growth in other indicators of activity relate to the more buoyant data for GDP’. Its upgrade in the growth estimate for the year partly reflects Beijing’s heavy spending, amounting to 2.5 per cent of GDP, on infrastructure projects and its loosening of monetary policy. But the IMF report warned that Chinese authorities had to ensure infrastructure spending was not mis-directed on to poor-quality projects which would exacerbate on economic slowdown and noted that non-state sector investment was weak and that exports remained subdued. — PTI Investment funds SHANGHAI: China’s securities watchdog has approved a new fund-management company, paving the way for the launch of the country’s second batch of investment funds, the official Shanghai Securities News reported. But analysts called for a re-evaluation of the current fund management system amid reports of insider dealing that hurt shareholders’ interests. The China Securities Regulatory Commission (CSRC) ‘in recent days’ gave the green light to Penghua Fund Management Co. Ltd, which will manage the first fund since the inaugural batch of five listed successfully between April 7 and July 30. Previous ones — all issued as 15-year closed-end funds were issued within around two weeks of CSRC approval for the management company. The new fund-management firm is registered in Southern Shenzen city with a capital of 80 million Yuan ($ 9.6 million). — AFP Isuzu TOKYO: Isuzu Motors Ltd, Japanese truck maker and an affiliate of General Motors Corp. (GM) of the United States, said it would cut 4,000 jobs at group firms to strengthen its financial base. The programme calls for trimming 10 per cent of the group’s 40,000 —worker payroll by March 2000, while introducing next April a new pay system that would tie manager salaries to work performance, it said. The plan also mandates slashing the number of affiliated marketing companies to 30 from the current 68 by March, 2001. — PTI Social tension HONG KONG: Warning by Hong Kong tycoons that party politics are harming business will spark resentment against the rich and increase social tensions during a recession, commentators said. Billionaire Li Ka-Shing on
Tuesday sparked controversy by saying he had pulled out
of a $ 1.3 billion investment because he was concerned
about the political climate in Hong Kong. |
Like floods in August-September, fog disrupts air travel in December-January every year. But Civil Aviation authorities, generally manned by officials with no more than little knowledge, stay unconcerned and unmoved. The result: total choas at the Indira Gandhi International Airport (IGIA). For the past fortnight or about, more than 100 national and international flights, including those of foreign carriers, have been delayed or diverted or cancelled. Passengers suffer and airlines incur heavy losses as they are obliged to provide stranded passengers lodging and boarding in five star hotels. There are days when all five star hotels in the capital are fully occupied and passengers have to undergo further torture of staying in substandard hotels or stay put at the airport, where facilities are appalling. There are countries, which are much colder than Delhi. Fog does descend there also. But those countries, which care for passengers and for their own reputation, combat this eventuality as ultra-modern gadgets have been installed at airports to land or take-off even in near-zero visibility. They consider it an insult to close the airports because of weather problems. Unfortunately and sadly, the Indian authorities care little for passengers and for their own reputation. The IGIA does not have some of the latest gadgets to help commanders to land or take-off when visibility is ‘poor’. What is cause for the concern is that the obsolete Instruments Landing System (ILS) had been functioning erratically, adding insurmountable problems to commanders. In early 1990, the proposal for importing the ILS Category III, which helps aircraft to land or take-off in virtual zero visibility was mooted. The cost of the system was about Rs 40 crore then. All seemed settled when one senior Civil Aviation official put a “spoke” into the proposal giving “paucity of funds” as a reason. Instead he suggested that the two national carriers, Indian Airlines and Air India, should re-scheduled their flights during this period in December-January. He failed to realise that annual disruptions caused losses which were several times more than one-time expenditure of Rs 40 crore and reputation. Following the recent criticism because of unprecedented disruptions, the Minister for Civil Aviation, Mr Ananth Kumar, is reported to have said that the IGIA would be upgraded to the Category-III ILS before 1999. Aviation experts hold the view that all international airports should be immediately upgraded because safety of passengers is much more important than any other consideration. India has already earned a lot of negative publicity and the government can longer be “penny wise and pound foolish”. An alliance Singapore Airlines (SIA) and Air Canada have reached an understanding to develop allinance to help improve service for air travel between Canada and southern Asia. The partnership is expected to strengthen their alliances with several other airlines. A memorandum of Understanding (MoU) confirming the alliance has been signed by Michael Tan, Executive Vice-President (commercial) of SIA, and Robert Milton, Executive President of Air Canada. The agreement is expected to be finalised by March, 1999. This alliance will provide passengers more travel options. The airlines’ schedules and passengers’ services will be coordinated to provide travellers with easy one-stop check-in and conveniently scheduled flights between Canada and Singapore. In addition, reciprocal accumulation and redemption of each airline’s frequent flyer programme rules will result in substantially increased benefits for the two airlines. SIA has also augmented its
cargo services worldwide. Considered fourth largest cargo
company in the world, it has a fleet of B-747 -400F
frieghters, named Mega Arks. This is the largest and the
most advanced commercial cargo aircraft in the world.
Mega Arks has a range of 8,245 km, carrying cargo of 117
tonnes. |
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