Tuesday, December 29, 1998
today's calendar
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B U S I N E S S | Tuesday, December 29, 1998 |
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spotlight today's calendar |
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Recovery prospects gloomy:
Sinha Subsidy
cut on kerosene, LPG before March 31 |
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Telecom system to be
revamped
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States
ignore DGS&D rate contract Trade
Fair ends
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Recovery prospects gloomy: Sinha NEW DELHI (PTI)— Economic recovery appears gloomy in the new year as all parameters barring prices plummeted in 1998 which witnessed political uncertainty and stagflation. Finance Minister Yashwant Sinha himself admitted in Parliament that the situation is “difficult” as the economy is plagued by mounting fiscal deficit continuing industrial slowdown, higher inflation, shortfall in customs and excise revenue. With consumer price index touching all time high of 18.6 per cent in October, there appears to be no respite from inflation. “Don’t judge us by onions and potatoes (prices),” Sinha said adding it was to the government’s credit the economy would achieve over 5 per cent growth in a year when several fast growing Asian countries were expected to register negative growth. But economic analysts who do not subscribe to this view, are critical of the macro-economic management. They claim the economic situation is “disturbing” and it is mainly attributable to “weak policy initiatives”. Even though Sinha had earlier expressed confidence that fiscal deficit will be pegged at the targetted 5.6 per cent of gross domestic product, economic intelligence services projections indicate it would be at least 6.5 to 7 per cent putting more pressure on inflation. The economic growth which has already been scaled down from 7 per cent to 6.5 per cent for the Ninth Plan, is expected to be between 5 and 5.5 per cent this fiscal as against the projected 6.5 to 7 per cent at the beginning of the year. The latest monthly economic review said the gross fiscal deficit would be around Rs 104,000 crore for 1998-99 which is 13,000 crore more than budgeted Rs 91,025 crore. At this level fiscal deficit would be around 6.6 per cent of the GDP. It said the fiscal deficit would rise further by the shortfall in public sector disinvestment. As against the target of Rs 5,000 crore the government has realised only Rs 225 crore till November through PSU disinvestment. It forecast that for the second year running fiscal deficit would overshoot the budgeted amount due more to shortfalls in tax receipts than due to overspending. A silver lining in revenue collections is the 19 per cent increase in direct tax collections during April-October as they aggregated Rs 19,280 crore as against 16,209 crore in the corresponding period last year. Income tax grew by 9 per cent to Rs 8,717 crore and corporate tax receipts increased by 31 per cent to Rs 10,350 crore. But the indirect tax collections have fallen short of the target by around Rs 7,000 crore (13 per cent) in the first seven months in this fiscal year. While excise collections
showed a 7 per cent growth totalling Rs 26,480 crore
against the 21 per cent increase budgeted this year. The
customs duty collection at Rs 22,480 crore showed a tardy
growth of only one per cent, way below the 17 per cent
growth budgeted for the year. |
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BANGALORE, Dec 28 (PTI) — Communications Minister Jagmohan today announced that the Centre would soon change the administrative pattern in the Department of Tele-Communications to bring in dynamism and improve quality of work. After inaugurating the 8000 lines C-DoT Max-XL Exchange at Yelahanka here, Jagmohan said the Ministry was at present studying the administrative cadre in the department. “We are going to rationalise it so that administration acquires speed”. This would enable the department to meet the “new requirements and challenges”, he said. He said along with change
and upgradation of technology, change in administrative
pattern was also necessary and added that the Centre
intended to delegate and rationalise powers at local
level to speed up the decision-making process. |
Price rise issue takes centrestage NEW DELHI, Dec 28 (PTI) — It was a year of sharp price rise with inflation based on the whole sale price index standing at around 6.9 per cent in January-November as compared to 5.3 per cent last year and that on consumer price index at 12.3 per cent in January-October as against 7.2 per cent in 1997. Prices have rarely been at the centrestage of a political controversy, but these turned out to be so for the BJP-led government in 1998 when soaring prices of essential commodities cost them three state elections. Despite prices of onions becoming an election issue in the latter part of the year, inflation based on wholesale price index (WPI) managed to stay well below the double digit mark throughout the year due to a slump in demand in the economy. However, the inflation based on the lesser used consumer price index for industrial workers (CPI-IW) shot up to an all time high of 18.6 per cent in October. The second highest ever inflation rate on CPI was also recorded during this year in September at 16.3 per cent. The previous highest was 16.1 per cent in January 1991. Inflation had risen during September-October as agricultural production wavered initially due to extreme heat wave in Northern India and later excessive rains in the post-monsoon period. The slowdown in the economy came as a face saver to the government, which was facing the flak on the vegetable price rise issue, as prices of manufactured items remained more or less static due to a slump in demand suppressing overall inflation during the year. During the year so far (upto December 12) prices of primary articles rose by 11.5 per cent compared to just 3.5 per cent rise in manufactured products. The administered prices also remained under tight leash during the year, as prices of fuel, power, light and lubricants, which are mostly the commodities whose prices are controlled, rose during the year by a paltry 1.2 per cent. Despite depressed prices of manufactured products during the year, WPI inflation rose to a three-year high of 8.85 per cent in the first week of November on sustained increase in prices of vegetables and edible oils. Prices of agricultural commodities, however, showed some signs of relenting towards the last two months of the year, relieving the pressure on inflation. Inflation came down by about 1.85 percentage points in the last six weeks of the year as the increase in prices of agricultural products, especially vegetables started easing. During the period, prices of vegetables fell from 139.6 per cent to 81.4 per cent. Inflation was ruling at
7.01 per cent (December 12) towards the end of the year
compared to 5.63 per cent at the beginning of the year. |
ISLAMABAD: Federal Information and Broadcasting Minister Mushahid Hussain has urged former Prime Minister Benazir Bhutto to tell the truth about her foreign accounts following a disclosure made by former NWFP Chief Minister Aftab Ahmed Sherpao. Talking to mediapersons here last evening, Hussain said, Benazir should follow the footsteps of Sherpao and reveal the truth before the month of Ramzan ended. Responding to allegations levelled by the Opposition Leader in the National Assembly, Mushahid termed them baseless, false and concocted. “Benazir is aware of the fact that the Ehtesab cases against her are about to be decided so she is making a hue and cry. The way she is behaving in the courts along with her party workers expresses her desperate efforts to keep herself politically alive,” Hussain said. The Minister further went on to say that the issues being highlighted by Benazir were non-issues. He said the Prime Minister had already acted on the said issues and this was causing a great deal of disappointment to the Leader of the Opposition. “She was talking about signing the CTBT, which we did not sign. She said Pakistan would be isolated after nuclear test. Her forecast also proved wrong. She was also talking about worsening economic conditions wrongly because the economic situation is now on the way to improvement.” The Information Minister said the basic difference between Nawaz Sharif and Benazir Bhutto was of make. “Benazir lives, thinks, maintains bank accounts in foreign. Her culture is foreign and her public-relationing is with foreign media.” Contrary to that,”Nawaz Sharif is made in Pakistan, his legitimate business concerns are in Pakistan and he thinks of Pakistan,” Mushahid said Talking about the accountability process, Mushahid said, Nawaz Sharif had made an offer to Benazir Bhutto on September 8, 1996 in the National Assembly for even handed accountability of both the sides. “Benazir did not respond.” He said the Prime Minister had so far paid Rs 3.1 million as taxes during 1993-96. What Benazir and Asif Zardari have paid so far should also be known to the nation? Mushahid said that 19 bank accounts and 18 properties of Benazir and Zardari had been discovered so far. They should be least tell the people the truth, he added. — ANI Jewellery KARACHI: Gold jewellery smuggled in from India has flooded the Pakistani market, taking away at least 40 per cent of the total business, jewellers said. The all Pakistan Jewellery Manufacturers and Exporters Association has urged the government to take immediate steps to stop the smuggling from India to protect the local manufacturers. A leading jewellery manufacturer said the smuggled jewellery of 18 to 20 carat gold was being sold at bullion markets in the cities of Karachi, Lahore, Multan, Hyderabad and Islamabad. “Indian jewellery is popular among Pakistani customers due to its good finishing and delicate workmanship,” he said. A local jewellery exporter said the gold jewellery was being smuggled into Pakistan through the Gulf state of Dubai. — ANI Oil refinery KARACHI: Pakistan and Iran will both sign an amended joint venture agreement for the setting up of a six-million tonne annual capacity oil refinery along the Hub coastal area next month. The agreement, which had earlier been signed in 1996, did not include a crucial clause guaranteeing the Rate of Return on Equity (RRE). Now the authorities have approved a guarantee of 25 per cent RRE to the project which is estimated to cost $ 1.150 million, sources said. They said the guaranteed
RRE would now be made a part of the pact to set up the
Iran-Pak Refinery Ltd (IPRI). The National Iranian Oil
Company (NIOC) and the State Petroleum Refining and
Petrochemical Corporation will be the main partners in
the joint venture agreement and would raise $ 385 million
equity, sharing 50 per cent each. —ANI |
Sen: information key to decentralisation CALCUTTA, Dec 28 (PTI) — Nobel laureate Amartya Sen today said dissemination of information was the key to make the planning process functional and to decentralise the economy. Stating that democracy was the only suitable mode for the decentralisation process to operate, he said the flow of information from the local bodies to the Centre was necessary to make the planning process effective and functional. Addressing the inaugural session of the West Bengal State Planning Board on “Decentralisation: Devolution and Participation” here, the renowned economist said several East European countries had also realised the need for the proper flow of information from the grassroots to the apex level. Citing an example in this context, Sen said China could have averted the worst ever famine during 1958 in which 39 million persons were killed, if the central planners were made aware of the fact that food supplies at the local levels were actually in surplus and not in deficit. Apart from information, Master of Trinity College, Oxford, also identified autonomy and motivation as equally responsible for the successful implementation of the decentralisation process. On the issue of motivation, Sen said the decentralisation process might hit roadblocks if the local bodies were motivated enough to provide information to the apex bodies. In this context, he explained that private ownership was extremely essential for motivating local bodies, since this was inextricably linked to incentives. However, Sen said there existed no casual relationship between the flow of information and incentives. While he was not overtly critical of the West Bengal experience of decentralisation in the past twenty years, he, however, chose to suggest that the state was improving the manner in which the process was carried out here. Besides Sen, others who spoke at the occasion were Pranab Bardhan, Economics Professor at University of Berkeley, USA, Bimal Jalan, Governor of the RBI, and Asim Dasgupta, Vice-Chairman of the State Planning Board and Minister for Finance of the West Bengal Government. The West Bengal Chief
Minister Mr Jyoti Basu, offered his inaugural remarks at
the conference. |
Subsidy cut on kerosene, LPG before March 31 CHENNAI, Dec 28 (PTI) — The Union Government would take a decision on reducing the subsidy on domestic gas (LPG) and kerosene before March 31, Petroleum Minister Vazhapadi K. Ramamurthy said here today. “The government had already accepted the recommendations of the expert group on the liberalisation of oil industry to cut down subsidy on petroleum products — except kerosene and LPG. We had to take a decision on these two before March 31, 1999,” he told newspersons. The group had recommended that the subsidy on kerosene should be reduced to 30 per cent and LPG to 15 per cent by 2002. It had also suggested that subsidy should be reduced in phases, starting from this financial year, he said. He said the diesel prices would be reduced from January 1 and the quantum would be decided in a couple of days. Ramamurthy said his
ministry had also cleared the joint venture between the
Indian Oil Corporation (IOC) and the Reliance Group for
setting up a refinery with some amendments. |
Floating interest rate by HSIDC CHANDIGARH, Dec 28 (UNI) — Haryana State Industrial Development Corporation (HSIDC) would advance term loans to the entrepreneurs borrowers at floating rate of interest, a concept introduced for the first time by any state level financial institution. Corporation Managing Director Y.S. Malik said here today that this decision was not only in tune with the market trend but also aimed at bringing down the rate of interest substantially compared to fixed rate of interest charged by the corporation. The corporation has linked the floating rate of interest to its cost of funds raised at variable rate. Mr Malik said that this would help the corporation in two ways, lowering in the rate of interest and reducing interest rate risk. He said that the floating rate of interest would be 16.5 per cent compared to fixed rate of interest at 18.5 per cent, charged from medium scale units. Corporation Managing Director said that the effective floating rate of interest to the borrowers, who pay on time would come to 15.5 per cent after considering the timely repayment rebate. The floating rate of
interest to small scale borrowers was 15.5 per cent and
the effective rate, after timely repayment rebate, comes
to 14.5 per cent. |
States
ignore DGS&D rate contract CHANDIGARH, Dec 28 — After strenuous efforts for 16 years, the All-India PVC Manufacturers Association has succeeded in getting the rate contract issued by the Directorate General of Supplies and Disposals (DGS&D) New Delhi —the mother organisation for purchases in India. Recently a three-day conference of All-India State Chief Public Health Engineers and heads of implementing agencies in-charge of urban water supply and sanitation sector held at Chandigarh evolved a suitable strategy for achieving the objective envisaged for the Ninth Plan i.e. March 2002. The funds required for this task are assessed to be about Rs 51,000 crore. It was decided to make best use of this opportunity of DGS&D rate contract for PVC pipes said Mr S S Gupta, Association President in a press release. All the supplies under the rate contract shall be guaranteed for quality and material of highest order and according to specifications. Mr Gupta pointed out that states of Punjab, Haryana and Rajasthan are the worst in this respect, who have recently made purchases of AC pressure pipes worth crores of rupees ignoring the aspects of health hazards. Mr Gupta said the DGS&D rate contract for PVC pipes with 100 per cent guarantee of quality and specification are cheaper by four to five times than all other conventional pipes like CI, GI, MS and AC pressure pipes. He said that the centre
and state governments and all indenting and implementing
agencies should switch over to the use and purchase PVC
pipes for water supply schemes and sanitation to curtail
expenditure. |
Trade Fair
ends FARIDABAD, Dec 28 —The eight-day fifth Trade Fair — Farindex-98 concluded at Sector 12 grounds here last night. Mr Bansi Lal, Chief Minister, gave away the prizes to the best exhibitors at the closing ceremony. In the pavilion category the Rural Development Agency and the National Thermal Power Corporation (NTPC) shared the first prize and Whirlpool and the National Hydro-electrical Power Corporation shared the second prize. According to an estimate
trade enquiries worth Rs 50 crore were generated. More
than 400 large, medium and small industrial units from
various parts of the state, especially Faridabad, had put
up their stalls. |
STOCKS MUMBAI, Dec 28 (PTI) — Sensex soared by 91.28 points to cross the 3000-mark resistance barrier as equities spurted sharply on bull charge by foreign institutional investors (FIIs) and leading domestic institutions on the Bombay Stock Exchange (BSE) here today. FIIs entry into the market sent ripples among the investors and leading institutions and speculators created fresh positions on the first day of the current account to book profits later. Shares of Tata Group were in the limelight, being bolstered by Indica car project, and almost all Tata scrips flared up on bull support. Even though the carry forward charges were higher at 24 per cent per annum, speculators and bears covered up their short positions. Speculators were interested in software and pharmaceutical companies while banks and mutual funds bought heavyweighted shares of Bajaj Auto, sbi, United Phosphor, Voltas and Cadbury. Satyam Computers, Pentafour Software and Zee Telefilms shot up sharply on bear covering. Trading on the bse on-line
trading (Bolt) system was delayed today upto 10.30 a.m.
due to a snag in the computer system.
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| McDonald NEW DELHI, Dec 28 (TNS) — McDonald’s fifteenth family restaurant was opened in Connaught Place. As an inauguratory offer, the first 500 customers visiting the restaurant will receive a surprise gift from McDonald’s, a release said. BIS chief ViewSonic PNB Gold steady Garments fair
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