Friday, November 6, 1998
today's calendar
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B U S I N E S S | Friday, November 6, 1998 |
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spotlight today's calendar |
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Tiff
delays LML bikes launch NFL
pays dividend |
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Telecom rates may be
notified in January
Haryana
lists projects for investment |
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Ashok Leyland enters
Central American market Car
loan interest rates decline
Coal
India, Voltas sign contract |
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Telecom rates may be notified in
January NEW DELHI, Nov 5 — Telecom Regulatory Authority of India (TRAI), the official watchdog of the country’s telecom sector, is likely to notify the rates of telecom tariffs by January next year. The TRAI Chairman, Justice S S Sodhi, said here today that the process of consultation with various parties would be over by December. Justice Sodhi, however, said that the tentative dates of implementation cannot be announced beforehand as “fixing of the date of implementation will be a part of the consultation process”. TRAI is scheduled to have a series of meetings with various parties, including the Department of Telecommunication (DoT), the Association of Basic Telephone Operators (ABTO), the Cellular Operators Association of India (COAI). Open house meetings will be held in eight places across the country. Every meeting will have two separate sessions on the quality of services and tariff proposals. Through open house discussions, TRAI proposes to decide on the determination of tariffs, the effective dates of implementation of the various proposals, phasing of the revised tariffs and finalisation of cost basis, Justice Sodhi said. A draft consultation paper on “quality of service parameters” has also been prepared which will be made available to the public for open house discussion, he said. The regulatory authority had prepared a consultation paper on telecom pricing which was circulated to service providers, institutions, non-governmental organisations and individuals for comments. Till October 21, the last date of receipt of comments, TRAI had received comments from 121 sources which included 27 service providers and their organisations, 44 from institutions and NGOs and 50 from individual consumers. It has been suggested that the tariff rebalancing should be gradual and be reviewed periodically in the light of its impact on demand, traffic and revenue generation. Moreover, DoT has suggested that the reduction in surplus generation could be in the range of 38 per cent to 55 per cent. Some private operators have envisaged the reduction to be 30 per cent. Also, it has been pointed out that the growth of teledensity could be affected due to the hike in access charges and local charges, which affect lower end users. Regarding long-distance calls, DoT has suggested that instead of 50 per cent reduction, there should be a 15 to 20 per cent reduction in the STD/ISD rates. Also, the reduction to eight hours from the existing 17 hours peak will adversely affect DoT’s revenue. VSNL has said that any
reduction in the collection charge will not be in
conformity with the concept of cost-based international
call collection charge. Therefore change should be
equally distributed over a three year period. |
First private power plant in North India GURGAON, Nov 5 — North India’s first private sector power plant will be made formally operational on November 7. The 25 MW power plant at Sih Sikenderpur village has been set up by Magnum Power Generation Ltd (MPGL) at a cost of about Rs 50 crore. The plant will supply around 5 lakh units of electricity to the Haryana Vidyut Parsaran Nigam (HVPN) at a rate of Rs 2.44 per unit. Mr Y.P. Gulathi, Vice-President of MPGL, said four 6.3 MW generators had been installed at plant to produce 1.76 lakh units of electricity every day which would be supplied to HVPN for distribution. These generator sets can work non-stop for 5.44 lakh hours without any hassle of maintenance. MPGL would earn a gross profit of Rs 16 crore while the net profit would be Rs 8 crore a year. As per the agreement, the company would be selling power to HVPN worth Rs 54 crore a year in the first five year. According to Mr Gulathi,
the company had raised a loan of Rs 10 crore from the
Haryana Government and Rs 16 crore from the capital
marked by floating equity shares, while almost an equal
amount to the company by the State Government in the form
of power supply loans. |
Credit card launched NEW DELHI, Nov 5 — American Express today launched its first credit card in India with a monthly interest rate of 1.99 per cent. Announcing the launch of the card, Vice-President and Country Manager, Mr Sanjay Rishi said that interest rate of 1.99 per cent lower than rate charged by many of the credit cards. The card has balance
transfer service which allows card members to transfer
their outstanding balances from other credit cards to the
American Express credit card. There is also the benefit
of an introductory interest rate of 1.45 per cent per
month for the first six months, which will be available
to card members from the day the card is issued. |
Haryana lists projects for
investment CHANDIGARH, Nov 5 — The Haryana Government has identified various projects to attract investment. Industries Minister, Shashi Pal Mehta, said that the projects were electronic industries such as medical electronic equipment, electronic weighing machines, agri-electronic instruments, mini-micro relays, hybrid circuit, protective devices like thermistors, varistors, surge, suppressors, transducers, digital microwave radio equipment, liquid crystal displays, speciality cables, digital MUX equipments, FAX, fantalum capacitors, floppy disk drive and development of software. He said the projects also included automobiles and auto ancillaries, handloom, hosiery, textiles, readymade garments texturised polyester yarn, terry towels, worsted woollen suiting, food processing and agro-based industries such as integrated paddy processing, rice-husk board, mushroom, asparagus cultivation, vegetable chips, egg powder, sunflower oil and floriculture and power projects, elevated express highways, bye-passes, road bridges in the infrastructure related fields. Mr Mehta said
Haryana’s new industrial policy aimed at increasing
the annual industrial growth rate from 7.7 per cent to 12
per cent.
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NFL pays dividend NEW DELHI, Nov 5 — National Fertilisers Limited (NFL) has paid a dividend of Rs 49.88 crore to the government. Union Minister of Chemicals and Fertilisers Surjit Singh Barnala presented the dividend cheque to the Prime Minister here today. During the financial year
1997-98, NFL achieved an annual capacity utilisation of
114 per cent, sales turnover of Rs 2,221 crore and net
profit of Rs 236.18 crore. |
Car loan interest rates decline NEW DELHI, Nov 5 (PTI) — Cut-throat competition among auto financiers has brought down interest rates on car loans to dismally low levels, bankers said warning that unless the rates were pushed up it would be difficult to sustain the business. Senior bank officials in both public sector and foreign banks told PTI that interest rates on auto finances were facing a downward pressure since the beginning of this financial year and had reached unsustainable levels. “Now the only way is up if the business is to yield profitable returns,” they said. The average rates on car loans are hovering at around 16 per cent as against the normal rates of over 19 per cent. “These are irrational
levels,” said an official in the Bank of America.
“With the yields coming down, there is a lot of
pressure on banks and finance companies to hike their
rates.” For banks the cost of funds is around 13 per
cent. “And then we have to lend at 16 per
cent,” explained the official. For them the margins
are as slim as between 1.5 and 2 per cent. |
Tiff delays LML bikes launch NEW DELHI, Nov 5 (UNI) — The ongoing bitter spat with partner Piaggio has forced LML Limited to delay the launch of its motor cycles by over five months. Besides, the company has also decided to roll out just one model from Piaggio’s Gilera range of bikes. The rest of the three bikes will be rolled out in collaboration with Daelim of South Korea, senior company officials said. The company had earlier planned to roll out four models from the Gilera range, including the Eaglet, between January 1999 and June 1999. However, with the partners now engaged in a bitter battle, the launch has been delayed and LML is announcing its foray into bikes with the Daelim motor cycles. While company sources pointed out that the delay was on account of the tiff between the two partners, company officials attributed it to the technical corrections and modifications that had to be incorporated on the models. “There has been a
slight delay in the foray but that was on account of some
technical problems and has nothing to do with the
tiff,” LML Executive Director (Marketing) R K
Caprihan told UNI here. |
Maruti 800 production reduced NEW DELHI, Nov 5 (PTI) — Maruti Udyog Ltd (MUL) today said the reason for slashing production of its small car ‘Maruti 800’ during the first seven months of current fiscal was to increase production of its ‘Omni’ model to meet the growing demand for the van. “The flexible manufacturing facilities at our plant allow us to vary the product mix as per our requirement. For instance, as the production of the Omni went up by 6,940 units during the period, the production of Maruti 800 went down by 2,752 units,” the company said in a statement here. Despite the passenger car segment recording a negative growth of 2 per cent in the first half, MUL achieved an increase of 4.9 per cent in production and four per cent in sales, the statement said. While production and sales of Maruti 800 and Omni went up by 3.08 per cent during the first seven months, production of mid-size car Esteem grew by 20 per cent. Production of Maruti Zen,
now facing stiff competition from Hyundai Santro and
Daewoo Matiz, was up by 5 per cent during the period. |
Ashok Leyland enters Central American market CHENNAI, Nov 5 (PTI) — Recession-hit Ashok Leyland Ltd (ALL) has entered the Central American market by beginning exports to Honduras and plans to join hands with a local manufacturer for an assembly plant there based on completely-knocked-down parts. The move formed part of the company’s bid to revitalise its export strategy and sustain volumes in the light of the global market for trucks and buses coming under intense competition and price undercutting, S. Ganapathy Subramaniyam, General Manager of ALL said today. The first consignment of Ashok Leyland cargo based on the Italian Iveco engine was received well in Honduras and the buyer, an Iveco distributor in Central America, had come back to place more orders, he said. The company was working on a three-pronged strategy in the overseas market, namely to consolidate in the existing markets, upgrade and introduce models in these markets and selectively enter new markets. Ashok Leyland was functioning as the principal export vehicle for the Iveco technology in the bottom-end of the global market, including emerging economies. The company registered a 40 per cent growth in exports in 1997-98 by despatching 2144 vehicles as against 1509 in the previous year. Domestic recession took a heavy toll of its topline and bottomline, with the turnover coming down to Rs 858.68 crore in the first half of the current year leading to a net loss of Rs 36.73 crore. Ashok Leyland, Subramaniyam said, was increasingly taking to the CKD assembly route as against direct exports and was tying up with local partners in each region. This had three advantages that provided the leverage on the brand equity of the local partner, obviated the risks of transporting vehicles over long distances and assured a steady demand from the region, he said. Ashok Leyland already had assembly tie-ups in South Africa, Kenya and Egypt. It was scouting for such partners in other countries as well. R Cowsik, Deputy General Manager in charge of exports, said Ashok Leyland’s focus would remain on countries which were similarly placed as India in terms of technology and road infrastructure. The global heavy vehicle
market operated on three tiers with regard to technology
and the company was targeting the lowest. While all
wanted to graduate to higher tiers, there was always a
technology gap and it would be unwise to try out the
western or European market. |
Coal India, Voltas sign contract MUMBAI, Nov 5 (PTI) — Coal India has signed a contract with Terex Corportion and Unit Rig, both of the USA, and Voltas Limited for supply of 160 rear dump trucks worth Rs 67 crore. Unit Rig, a division of Terex Corporation, will supply dump trucks within 14 months, according to a Voltas release here. The 120 tonne capacity dump trucks are to be deployed in Coal India’s northern coal fields and south eastern coal fields open cast mines to increase production from 257 to 350 million tonnes by the turn of the century. This was the single largest order ever placed for surface mining equipment won in the face of a fierce global competition and the order is based on a turnkey contract, including erection, and commissioning of the machines, as well as training, spares and technical support. The order is being funded
as part of a $ 1 billion loan from the World Bank. |
What to do about wealth disparities? Mr. William H. Gates, Dear Mr Gates, An astonishing calculation comes from Professor Edward Wolff of New York University and presents an important opportunity for you. Professor Wolff, a wealth economics specialist, estimated that your net wealth is greater than the combined net worth of the poorest 40 per cent of Americans (106 million people). That includes their home equity, pensions and mutual funds, but excludes their personal cars. When Professor Wolff made his analysis, your net worth was only $40 billion. Now, according to the latest Forbes listing of billionaires, your assets exceed $51 billion and that may be outdated, given the most recent surge in Microsoft stock. So it is fair to assume that the mostly second-hand cars of these 106 million Americans can now be included and then some. All this wealth makes you the world’s number one working rich person. Apart from the more than medieval size gap between your wealth and theirs, it is more than a little worrisome that tens of millions of Americans have so little net property worth, some after a lifetime of labour. As Jeff Gates, author of the new book, The Ownership Solution, says: Capitalism is very good at creating capital but terrible at creating capitalists. The USA now has the sharpest wealth disparity of any western nation. The wealth of the top one per cent is greater than that of the bottom 90 per cent of Americans. As author Gates observes: The implications attending inaction are staggering fiscally, socially, politically and even environmentally. If you knew the range of Gates’ experience in Washington and the business community, you would conclude that his normative conclusion was not a random thought. As might be expected, on a worldwide plane, wealth disparities are staggering. According to the United Nations Development Programme, the assets of the world’s 358 billionaires were greater than the combined incomes of countries with 45 per cent of the world’s people (about 3 billion human beings)! All these chasms are widening against a background of modern and accelerating technology, declining trade barriers, mobility of capital, medical advances and presumably a greater awareness of what history’s most tragic mistakes, avarice, monopolies and cruelties can produce. As one illustration, last year, more people in the world died (nearly six million) from tuberculosis and malaria than in any previous year. The growth in gross global GNP and capability did not stop these diseases of poverty from their mass destruction. Concentration of power and wealth and the gross insensitivity of economic and political leadership had a good deal to do with these preventable casualties. There is obviously a problem of distributive justice that has not been given the attention it deserves by the leaders of global capitalism. I saw a T-Shirt being distributed at a conference recently with the message: “A Rising Tide Lifts All Yachts.” A telling phrase for our times. Warren Buffett, possibly the world’s number two working rich person with assets exceeding $33 billion, is your dear friend and fellow card player. Let me suggest that you team up with him to sponsor, plan and lead a conference of billionaires and multi-billionaires on the subject of “National and Global Wealth Disparities and What to Do About it.” The quantity, quality and distributional dimensions of economic output will drive participants to come to grips with the fundamental purposes of economic systems and their economic indicators. With the dual sweep of the Gates-Buffett hands, the serious and consequential plight of humanity would become a matter of high alert for those business colleagues and acquaintances of yours who aspire to move from success to significance. During our brief meeting earlier this year at the Time-Warner 75th anniversary dinner in New York, you replied that you were open to communication (by e-mail, you smilingly suggested). I look forward to your response. Sincerely, (Third World
Network Features) |
THE serpentine queues, panic buying and even hoarding of salt in large quantities following rumours of salt shortage, clearly indicate the fear psychosis that has gripped Indian consumers in the wake of an unprecedented and steep rise in the price of onions. The fact that even on Monday, repeated assurances by the Government of adequate salt supplies did not quell the frenzy of buying in Bihar, Uttar Pradesh and Delhi and that the panic spread to even more states including West Bengal, Tripura, Haryana and Punjab, only reflects lack of consumer confidence in the government’s ability to ensure adequate supply of essential goods at reasonable prices. In order to understand the consumer behaviour, one has to look at the circumstances in which they have been placed in the past several months. First came the large scale adulteration of mustard oil, sending panic waves. This led to an acute shortage of the commodity, leading to its high price. Other edible oils too registered a hike in price. And then came the unprecedented rise in the price of onions, taking it beyond the reach of most consumers. And even as consumers tried to do without onion, its other humble partner, the potato, followed the onion course by registering a steep rise in price. As an extended south-west monsoon, unseasonal rains and speculative tendencies turned more and more vegetables costlier, consumers turned to arhar dal, but the price of this pulse had also gone up sharply. As consumers debated whether rice would be the next commodity to register price hike, came the rumour that salt was disappearing from the market, pressing the panic button. The fact that the cyclone in Gujarat had adversely affected salt production in the state only gave credence to the rumour. Shortage as a result of unseasonal rains, floods, droughts, are not a new phenomenon in the country. Nor the rise in prices as a result of such shortages. But this time, the price rise, in case of onions, for example, had no bearing on the reported shortage of 10 to 15 per cent, thereby completely eroding the government’s credibility in so far as its ability to control prices was concerned. And then the vast difference (over 1000 per cent) between the price at which the farmers sold the onions and the price at which it was available to retail consumers only underscored further, the government’s failure to crack down on middlemen who manipulated prices. In fact it is this feeling that the government was soft on hoarders and blackmarketeers, that gave the traders in the Northern States that experienced panic buying of salt, the courage to sell salt, priced at Rs 6 a kg at as much as Rs 60 a kilogram. Fortunately, the government seems to have learnt its lesson from the onion crisis because at least this time, it has been quick to act. While the Centre reassured consumers of adequate stocks of salt, the state governments have begun to haul up hoarders and blackmarketeers, thereby sending a message that this time they would not tolerate exploitation of consumers. However, in order to regain consumer confidence, the government has to do much more than quell the panic on salt shortage. It should not only give the highest priority to ensuring supply of essential commodities at reasonable prices, but show that it means business. It should set up an independent price-watch committee of consumer activists, and independent experts in the field of agriculture, horticulture and food processing, who would regularly monitor the food situation and directly advise the Prime Minister on the steps that need to be taken to avert a crisis. There should be similar committees at the state level to coordinate the work and ensure smooth flow of food from a surplus state to a deficient state. The government should also take this opportunity to break the stronghold of middlemen on prices. It is equally important to take certain long-term measures to encourage farmers to grow more by providing incentives, adequate credit and attractive insurance schemes. Efforts must be made to provide proper storage and food processing facilities so that farmers get remunerative prices even when there is surplus food production. In the last one week or so a private company has started selling cut and ready to use frozen onions. The government should encourage production of such frozen and dehydrated vegetables that would not only ensure proper utilisation of surplus food but also adequate availability in times of shortages. Consumers, in the
meanwhile, should send a clear signal to the government
that it can no longer ignore consumer interest. In 1960,
the consumer movement in India began in response to steep
rise in the prices of essential commodities. Today,
consumer groups all over the country need to revive that
movement against price rise and campaign for a
comprehensive national policy that would ensure food for
all at reasonable prices. |
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| Forex rates MUMBAI, Nov 5 (PTI) — The following were interbank forex and RBI rates (in rupees per unit.) U.S. $ Rs 42.30/31 The RBI reference rate was Rs 42.35. Fire Expo Office-bearers SBI |
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