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	B U S I N E S S	Tuesday, July 28, 1998
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Task force set up to
regulate NBFCs
NEW DELHI, July 27 — A task force will be set up to correct existing inadequacies in the regulation of non-banking financial companies (NBFCs) and recommend safeguards by September 15 to protect the interest of small depositors, Finance Minister Yashwant Sinha informed the Rajya Sabha today...
Power tariff decision hailed
CHANDIGARH, July 27 — The CII has welcomed the decision taken by Mr Parkash Singh Badal to review sympathetically the recent hike in the power tariff...

Panel says no to PSUs
NEW DELHI, July 27 — The Disinvestment Commission today refused to process three public sector undertakings (PSUs), including MMTC Ltd, referred to it until the government clarifies its position on various issues raised by the panel, including the setting up of an implementation mechanism for its pending recommendations...
Drug industry can ‘face patent regime’
NEW DELHI, July 27 — The Indian drug industry is on a strong footing to face the International Patent Regime as 70 per cent of its requirements are being met indigenously, the Minister of Chemicals and Fertiliser, Mr Surjit Singh Barnala, has said.

Top position for Ludhiana
NEW DELHI, July 27 — Industrial entrepreneurs memoranda entailing an investment of Rs 20,393 crore have been filed in Punjab between August, 1991, and June-end this year...
Resurgent India Bonds to raise $2b
CHANDIGARH, July 27 — The State Bank of India (SBI) has kicked off roadshows within the country and abroad for marketing its Resurgent India Bonds (RIBs) which are expected to net $2 billion...
Hero Honda gets nod for buyback
NEW DELHI, July 27— Shareholders of Hero Honda Ltd today approved a proposed move by the promoters for a buyback of 10 per cent of the company’s equity and its 1:1 bonus issue...

Task force set up to regulate NBFCs
NEW DELHI, July 27 (PTI) — A task force will be set up to correct existing inadequacies in the regulation of non-banking financial companies (NBFCs) and recommend safeguards by September 15 to protect the interest of small depositors, Finance Minister Yashwant Sinha informed the Rajya Sabha today.
Replying to a calling attention on the failure of the government to check frauds allegedly indulged in by NBFCs, Sinha agreed to consider demands by members to set up a separate agency within the RBI framework to deal with the large number of complaints from depositors.
Sinha said the task force would be headed by Banking Secretary C.M. Vasudev and have representatives from the RBI and other connected organisations.
It will be given six weeks’ time to submit its report, he said.
Admitting the 1997 legislation to regulate NBFC fell short of requirements, Sinha proposed to involve state governments too as NBFCs have mushroomed even in small towns.
In this connection, he said he would convene a meeting of state Finance Ministers in September-end to work out modalities.
Noting under the present legislation the complaint procedure was “dilatory”, Sinha said the task force would work out modalities for confiscating and attaching property of defrauding NBFCs so as to secure depositors’ interest.
As defrauding amounted to cheating and breach of trust, the minister said the task force would go into the aspect of the RBI moving criminal court whenever there were complaints about NBFCs. The RBI would be empowered to file on its own criminal cases against such NBFCs.
Justifying the need to reform the sector, he said NBFCs had an important role as these could mobilise much-needed resources for the economy.
At the same time, unless small investors felt secure, the purpose of NBFCs would get defeated, he said.

Panel says no to PSUs
NEW DELHI, July 27 (PTI) — The Disinvestment Commission today refused to process three public sector undertakings (PSUs), including MMTC Ltd, referred to it until the government clarifies its position on various issues raised by the panel, including the setting up of an implementation mechanism for its pending recommendations.
“We have to give the final report by August 28. New PSUs referred to us last week can be taken up only after getting the government’s response on pending issues, commission chairman G.V. Ramakrishna told PTI, adding that a clear response from the government would help the Commission in better formulation of its recommendations.
On July 24, the government had referred two state-owned trading houses — MMTC Ltd and State Trading Corporation of India Ltd (STC) and the Project Equipment Corporation — to the panel for its recommendations on disinvestment.
The commission sent a communication to the government about its stance on examining more PSUs till the issues raised by it were settled, panel sources said.

Power tariff decision hailed
Tribune News Service
CHANDIGARH, July 27 — The CII has welcomed the decision taken by Mr Parkash Singh Badal to review sympathetically the recent hike in the power tariff. The CII was represented by Mr S.P. Oswal, Chairman & Managing Director, Vardhman Spinning & General Mills Ltd, and Mr Piyush Bahl, Regional Director, CII (Northern Region), at the meeting convened by the Chief Minister this morning.Mr Oswal stressed the need for setting up an independent state electricity regulatory commission and ensuring transparency and predictability while arriving at the real cost of power.
Taking into account inflation and development work to be pursued by PSEB, he said the power tariff should not be hiked beyond 10 per cent.
Mr Amarjit Goyal, Chairman, Punjab Committee, PHDCCI, welcoming the CM’s announcement suggested that a power tariff regulatory commission should be constituted to look into the whole aspect of increase in the power rates at regular intervals on the basis of facts and figures provided by the PSEB and the industry.
Mr Goyal appealed to the state government to sit down with the industry and evovle a durable formula to consider such matters on a scientific basis.

Drug industry can ‘face patent regime’
Tribune News Service
NEW DELHI, July 27 — The Indian drug industry is on a strong footing to face the International Patent Regime as 70 per cent of its requirements are being met indigenously, the Minister of Chemicals and Fertiliser, Mr Surjit Singh Barnala, has said.
Addressing the consultative committee of MPs attached to his ministry here recently, the minister said the government would make representation before the world body to protect the interests of the Indian drug industry.
The indigenous drug industry is also being protected against the dumping by foreign companies through a mechanism with the Commerce Ministry where affected companies bring such cases to its notice for consideration of levying appropriate dumping on such imports into India.
The performance of the National Pharmaceutical Pricing Authority (NPPA) was also taken up at the meeting and Mr Barnala informed the members that the pharmaceutical sector had performed fairly well with the production increasing by 650 per cent since 1981-82.
Exports had made significant progress and at present more than Rs 4000 crore worth of drugs are exported every year.
Mr Barnala said the NPPA had fixed or revised the prices of seven bulk drugs and 497 formulations packs within a period of less than one year since its inception in August 1997. No application was pending with the NPPA for formulation pricing for more than two months.
He said the speedy disposal was possible because of the procedural improvement.
Members of the consultative committee suggested that there was a need to form bodies like the NPPA at regional and local levels to ensure the enforcement of drug control order.
The members also wanted that the prices of imported drugs need better scrutiny to check inflated quoting.
To counter the possible adverse impact of the WTO-IPR regime they felt that the drug companies should be asked to spend a higher percentage of their profit on research and development. Members wanted that the government should examine the possibility of providing cheaper medicines to the people living below poverty line.

Top position for Ludhiana
Tribune News Service
NEW DELHI, July 27 — Industrial entrepreneurs memoranda entailing an investment of Rs 20,393 crore have been filed in Punjab between August, 1991, and June-end this year, Industry Minister Sikander Bakht informed the Rajya Sabha here today. Ludhiana had the highest number of proposals with 450 IEMs. These proposals entail an investment of Rs 6705 crore and the proposed number of people who would get employment from these ventures is estimated at 117,923.
Patiala was also a hot favourite for industrial proposals as 419 IEMs were filed in this district.
The Following is the district-wise list of IEMs filed for Punjab during the period August 1, 1991 to June 30, 1998:
District IEMs filed - Investment - Proposed - employment
(Rs in crore)
Amritsar 132 1476 24670
Bhatinda 32 441 4138
Faridkot 19 135 4333
Ferozepur 40 254 4762
Gurdaspur 31 245 4939
Hoshiarpur 48 1582 23476
Jalandhar 134 606 48712
Kapurthala 10 62 12590
Ludhiana 450 6705 117923
Patiala 419 5531 101975
Ropar 157 2062 31493
Sangrur 124 870 25639
Fatehgarh Sahib 60 333 9030
Moga 2 10 45
Muktsar 3 80 904
Nawan Shahr 1 0 20
Mansa 1 1 61
Total 1663 20393 414710

Resurgent India Bonds to raise $2b
Tribune News Service
CHANDIGARH, July 27 — The State Bank of India (SBI) has kicked off roadshows within the country and abroad for marketing its Resurgent India Bonds (RIBs) which are expected to net $2 billion.
“The proceeds from the issue will be spent on finding infrastructure projects,” Mr K.K. Narula, SBI Chief General Manager, Chandigarh Circle, told newsmen here today.
Subscription to the bonds will open on August 5 next and close within 30 days, though the SBI has reserved its right to close it any time after 10 days depending on the response.
The SBI has started roadshows at Dubai and other places in Golf countries for the bond issue, which will also be marketed in NRI-dominated areas in Germany, the USA, the UK and Canada. The bonds have several attractive features, including tax exemption on interest received and repatriability for both the capital and interest.
The bonds are offered in three currencies — US dollar, pound sterling and German marks — with interests of 7.75 per cent, 8 per cent and 6.25 per cent respectively. The interest can be collected cumulatively or twice a year.

Hero Honda gets nod for buyback
NEW DELHI, July 27 (PTI) — Shareholders of Hero Honda Ltd today approved a proposed move by the promoters for a buyback of 10 per cent of the company’s equity and its 1:1 bonus issue.
At the 15th annual general meeting held here, shareholders gave their nod to the proposal, subject to government approval of share buyback, company sources said. Promoters of Hero Honda, the Delhi-based Munjal family, had earlier told a Board meeting on June 25 that the company proposes a buyback of shares in anticipation of an “amendment in the Companies Act”.
Sources said the shareholders also approved the 1:1 bonus issue on the company’s share capital of Rs 19.97 crore.
Hero Honda, which has a market share of 36 per cent in the motor cycle segment, registered a sales growth of more than 51 per cent in 1997-98 over the previous year.
In 1997-98, the turnover of the company rose by 51.5 per cent over the previous year to Rs 1160.72 crore and the net profit by 52 per cent to Rs 76.60 crore while earnings per share (EPS) registered a 52 per cent rise to Rs 38.36 per share.
“Considering the past performance of the company and the inherent strength it has acquired...The projected 30 per cent growth for the current financial year (1998-99) is considered realistic,” the company said.

Biz briefs
Basmati issue
NEW DELHI, July 27 (PTI) — India is yet to take up with the World Trade Organisation (WTO) the issue of a Texan company, Ricetec, being given the patent for Basmati, Commerce Minister Ramakrishna Hegde informed the Rajya Sabha.
Ombudsman
Tribune News Service
NEW DELHI, July 27 — Mr S.K. Soni, formerly Chairman of the Oriental Bank of Commerce, has taken over as Banking Ombudsman in New Delhi having jurisdiction for Delhi, Haryana, J&K and Ghaziabad district of U.P.
Shaw Wallace
NEW DELHI, July 27 (PTI) — The Company Law Board (CLB) today decided to appoint four government directors in addition to the existing five Directors on the board of Manu Chabbaria’s Shaw Wallace and Company (SWC). The CLB also directed the liquor company to appoint committees to look into investments, accounting, audit and management of the company by the reconstituted board.
Oil royalty
NEW DELHI, July 27 (PTI) — The government today introduced a Bill in the Lok Sabha seeking powers to fix royalty more frequently for crude from offshore and onshore fields to encourage oil exploration. The Bill was introduced by Petroleum Minister V.K. Ramamurthy.
Satex ‘98
NEW DELHI, July 27 (PTI) — A four-day conference is to be held in the Capital from tomorrow to evolve measures to promote technological and economic cooperation amongst South Asian nations. The first ever South Asia technological and economic exchange (Satex ‘98) will recommend mechanisms for cooperation.

Gold declines
NEW DELHI, July 27 (PTI) — Weak conditions prevailed on the bullion market today as silver and gold, declined on lack of buying support in the face of fresh arrivals and closed with losses. Standard gold and ornaments declined by Rs 5 each at Rs 4320 and Rs 4170 per 10 gram, respectively. Sovereign also lost Rs 25 at Rs 3500 per piece of eight gram. Following were today’s quotations: Silver .999 (ready) 8350 and silver delivery 8330; silver coins buyer 10,500 and seller 10,700; standard gold 4320, ornaments 4170 and sovereign 3500.
Licence fee
NEW DELHI, July 27 (PTI) — A final decision on cellular operators’ demand for a moratorium on payment of licence fees and extension of licence period will be taken only after considering all aspects of the issue, Minister of State for Communications, Kabindra Purkayastha, informed the Lok Sabha today. Tata Tea
Tribune News Service
CHANDIGARH, July 27 — The ICRA has assigned an LAAA rating to the Rs 75 crore NCD programme of Tata Tea Limited (TTL). The rating indicates highest safety. TTL’s gross sales have increased from Rs 683 crore in 1996-97 to Rs 868 crore in 1997-98.
L & T
MUMBAI, July 27 (PTI) — Larsen & Toubro Ltd has raised Rs 150 crore through a private placement of call rate linked debentures and fixed rate debentures at 13.5 per cent.
ICICI
NEW DELHI, July 27 (PTI) — The government has asked the ICICI to prepare a report for improving power transmission and distribution in the Capital as part of the programme to modernise the Delhi Vidyut Board (DVB), the Lok Sabha was informed today.
Fests cost 40 cr
NEW DELHI, July 27 (PTI) — A sum of Rs 40 crore was spent on organising festivals of India in nine countries since 1982, Minister for Human Resource Development Murli Manohar Joshi informed the Lok Sabha today.