CMIE projects industrial growth rate at only 4.5 pc
MUMBAI, Nov 10 — Industrial growth for the fiscal ending March 1999 will be only 4.5 per cent and the increase in agricultural production will not be more than 1.2 per cent, the Centre for Monitoring Indian Economy has said.

RBI to bring down ratio of govt securities to 30 pc
MUMBAI, Nov 10 — The RBI today announced that it would be bringing down the ratio of government securities in the permanent category to 30 per cent for the financial year ending March 1999.

Banking

WB praises India for poverty reduction
NEW DELHI, Nov 10 — The World Bank has complimented India for its track record on poverty alleviation and said the economic reforms has further helped in reducing poverty in the country.

China beats India in attracting FDI
WASHINGTON, Nov 10 — China attracted a record $45.3 billion in foreign direct investment last year — almost one-third of the total investment in developing countries — leaving main rival India far behind with a meagre $3.2 billion.

WB praises India for poverty reduction

NEW DELHI, Nov 10 (PTI) — The World Bank has complimented India for its track record on poverty alleviation and said the economic reforms has further helped in reducing poverty in the country.

“India, over the long-period has been quite successful in reducing poverty. Even though it has not been spectacularly successful compared to East Asia, it has a reasonable track record of growth and poverty reduction,” a new World Bank report on aid assessment released today said.

The policies have improved in India in the 1990s and has an environment which is more conducive to poverty reduction and growth, the report “Assessing Aid: What Works, What Doesn’t and Why” said.

Rating India among countries which had good policies but high poverty, the report said though democracy per se was not a factor in reducing poverty, countries with better civil liberties performed better.

“Foreign aid has a strong impact on growth in developing countries with sound policies and institutions like macroeconomic stability, openness to trade, secure property rights, absence of corruption,” it said.

The report said official development assistance (ODA) has declined by one-third in real terms in the 1990s mainly due to widespread pessimism about aid.

Donors in 1996 tended to give small amounts of assistance to countries with truly good policies, the report said. “To maximise poverty reduction, aid should ideally taper in with reform, when in fact it tends to taper out,” it said.

“It is ironic and tragic that the volume of aid is declining while the environment for effective aid is improving,” it added.

The report, however, said the World Bank’s International Development Assistance (IDA) had a better track record by allocating in favour of good policies and governance in contrast to aid overall.

The report said there would be large gains in focussing aid on poor countries with good policies. For example $ 10 billion in new assistance would lift a million people per year out of poverty. But if focussed on poor countries with good policies, the same amount would lift nearly four times as many.

In good policy environments, aid is a high-return investment that permanently raises income and reduces poverty.

Citing the example of Zambia, the report said aid has proved quite ineffective in inducing reform in the country. Though Zambia’s foreign aid increased steadily - reaching 11 per cent of real (purchasing power parity) GDP in the 1990s, the policy got worse throughout the period, it said.

CMIE projects industrial growth
rate at only 4.5 per cent

MUMBAI, Nov 10 (PTI) — Industrial growth for the fiscal ending March 1999 will be only 4.5 per cent and the increase in agricultural production will not be more than 1.2 per cent, the Centre for Monitoring Indian Economy (CMIE) has said.

The first five months have registered a growth of only 3.5 per cent in the index for industrial production (IIP), requiring an IIP expansion of more than 5 per cent in the remaining six months of the year.

The growth in consumer goods has been particularly poor, CMIE stated in its monthly review of the Indian economy, adding that production expanded by a mere 1.7 per cent in the first five months of financial year 1998-99.

The energy sector has also recorded a major slowdown in September, with coal production declining by 1.4 per cent due to poor offtake in the current year.

Crude oil production reduced by 7 per cent, while power generation which grew by 8 per cent in previous months recorded a growth of only 2.6 per cent in September. Hydel power generation also declined by 5 per cent.

The damage due to heavy unseasonal rains, witnessed in Karnataka, Andhra Pradesh, Maharashtra and Gujarat will, however, not affect its projections of 1.2 per cent growth, CMIE said.

The interim results of over 1,300 companies also indicate a continuation of the depressing performance.

The corporate sector recorded a sales growth of 11.5 per cent, while profits declined by 6 per cent. Expenses of manufacturing companies grew at a faster pace compared to their sales.

Profits of these companies declined by 12.6 per cent, while those for manufacturing companies was down by a whopping 30 per cent.

The performance of the Indian private sector was much worse, CMIE said adding that the private sector recorded 17 per cent lower profits. However, multinational companies, excluding non-resident Indian-owned companies, recorded a 14 per cent increase in profits.

The growth in sales of top 50 business houses declined from 10 to 5 per cent, while their profits declined by 22 per cent as against an increase of 3 per cent in the previous year.

China beats India in attracting FDI
By Vasantha Arora

WASHINGTON, Nov 10 — China attracted a record $45.3 billion in foreign direct investment (FDI) last year — almost one-third of the total investment in developing countries — leaving main rival India far behind with a meagre $3.2 billion.

The “World Investment Report 1998: Trends and Determinants”, released here today by the United Nations Conference on Trade and Development (UNCTAD), says that FDI by transnational corporations (TNCs) may reach a record $430-440 billion in 1998. It had already risen considerably in 1997. In terms of inflows, FDI showed a 19 per cent increase to $400 billion while outflows grew by 27 per cent to $424 billion.

The 1998 increase is projected despite slower world economic growth and the crises in financial markets, the report says.

It draws attention to the critical developments that call into question the sustainability of China’s inward investment boom as well as important changes emerging in FDI across the Asian and Pacific region attributable to the current financial crisis.

However, China’s FDI in 1997 was $4.5 billion more than what it had received in the previous year. India too raised its quota from 2.3 billion in 1996 to $3.2 billion in 1997. FDI in South Asia rose to another record level last year of about $4.4 billion ($3.3 billion in 1996), mostly reflecting a 37 percent gain in inflows to India.

Even the Asian countries in crisis performed better than India. Indonesia attracted $5.3 billion, Malaysia $3.7 billion and Thailand $3.6 billion last year.

While the Indian FDI volume is rising rapidly, it remains, for example, less than the FDI flows to much smaller economies such as Chile. India has the potential to secure very significant gains in FDI, the report says, adding flows to other economies in the region remain low.

FDI in Pakistan has relatively stagnated for some years due to administrative bottlenecks and weak economic conditions. Islamabad received $800 million in foreign investment last year against $770 million in 1996.

Asked to comment on the low rate of foreign investment in India, Dr. Karl P. Sauvant, leader of the team that prepared the report, said if New Delhi maintained its current policy, it would be quite successful in attracting foreign capital.

Briefing the press on the report, he said India had been making unceasing efforts to attract FDI and it was succeeding. Its success was reflected in the increased inflows. However, it was getting less compared to other countries, including China and Brazil, which received over $16 billion last year.

Dr Sauvant said the reason for low inflow into India could be that the investors were trying to assess the situation there before entering in a big way.

FDI in Asia and the Pacific reached a formidable $87 billion in 1997 ($80 billion in 1996), while FDI outflows from the region rose to $51 billion. East and Southeast Asia accounted for more than 90 percent of the FDI inflows and outflows in 1997. — IANS

Banking
Reaching out to the aged

MUMBAI (PTI): The RBI has prescribed a procedure for banks to follow to enable the old, sick or incapacitated account holders to operate their bank accounts.

In a circular issued recently, the RBI has identified two categories of such customers — one who is too ill to sign a cheque and cannot be physically present in the bank to withdraw money from his account but can put his thumb impression on the cheque or withdrawal form and the other who is not only unable to be physically present but is also unable to put his thumb impression due to certain physical defect or incapacity.

The RBI, in such cases, has asked the banks to get the thumb or toe impression of such account holders identified by two independent witnesses, one of whom should be a bank official.

The customer must indicate to the bank who would withdraw the amount from the bank and the withdrawee should accordingly furnish his signature to the bank.

Allahabad Bank

NEW DELHI (TNS): Mr K.L. Arora, Dy General Manager, Allahabad Bank, New Delhi, on Tuesday launched “Allahabad Bank green card” at Rohad village in Jhajjar district for the districts of Rohtak, Jhajjar and Sonepat. The green card scheme is applicable to those farmers who own minimum 5 acres irrigated agriculture land and would enable adequate and timely credit support to them, not just to meet cultivation costs but also domestic needs.

The green card with a credit limit of up to Rs 1 lakh will have a revolving cash credit facility available from any branch of the bank in the district with no restriction on the number of withdrawals.

On this occasion, 314 green cards amounting to Rs 2.50 crore were issued to farmers.

Mr J.S. Kakar, Asstt General Manager, Chandigarh, said the bank plans to launch the scheme in Punjab also this month covering six districts.

PSB

CHANDIGARH (TNS): Mr S.S. Kohli, Chairman-cum-Managing Director, Punjab & Sind Bank, who is on a visit to Amritsar with the study group of Parliament on the welfare of SC/ST has stated that bank has the working to the tune of Rs 12,500 crore at the end of September, 1998. The half yearly results have shown 12 per cent growth in the deposits section. As far as advances are concerned the bank has given a growth of 15 per cent against the industry achievement of 1.7 per cent. The profits of the bank for the first half year are Rs 32 crore i.e. 8 per cent higher than the previous year.

RBI to bring down ratio of government securities to 30 per cent

MUMBAI, Nov 10 (ANI) — The RBI today announced that it would be bringing down the ratio of government securities in the permanent category to 30 per cent for the financial year ending March 1999.

The announcement was made in an RBI report titled “Trend and Progress of banking in India (1997-98”.

The RBI said that it would be its endeavour to ensure that banks across the country reprice the securities according to their market value. Efforts would be made to increase the ratio of current investments in approved securities progressively to 100 per cent within the next three years, applying international norms.

Using the Narasimham Committee’s Report as its base for assessing the efficiency of the country’s financial sector, the RBI said that the former’s focus on improving efficiency and accountability was right, and added that it was also essential to meet “higher capital adequacy ratio”, particularly in relation to servicing of loans.

The RBI has also agreed with the Narasimham Committee that the Basle Capital Adequacy Accord is no longer adequate and that there is a need to modify it. The accord sets a minimum capital ratio, not a maximum insolvency probability. It also does not have a static framework.

Citing the currency crisis in South East Asia, the RBI report said that “the lack of transparency” had led to the release of “ever-green” loans, and these had affected the performance of assets in the region.

Emphasising that in many respects the NPA norms in India are considerably tighter than those abroad, the RBI said in most developed nations, a distinction was made between “collateralised and non-collateralised” NPAs and accordingly, “lower provisions are allowed for collateralised NPAx”. In India, the bank said that the concept of NPAs did not allow for such concessions.

CLB order to Okara Agro

NEW DELHI, Nov 10 (PTI) — The Company Law Board (CLB) has directed defaulting Okara Agro Industries to revise its repayment scheme as per directions of the Delhi High Court. CLB member AK Doshi also asked the company to apply to the Delhi High Court for sale of immovable property in order to repay the deposit holders.

JK Paper launches Finesse

CHANDIGARH, Nov 10 (TNS) — JK Paper today launched “Finesse”, the first ever retail pack of premium quality bond paper in A4 size. ‘Finesse’ will be sold at gift and card shops, supermarkets, computer hardware and accessories, airports, tourist places, among others.

NIIT bags $ 10 m order

NEW DELHI, Nov 10 (TNS) — NIIT Limited has bagged a prestigious over $10 million software order from an US technology based training company. The order for building educational multimedia titles for National Education Technology Group (NETG) is the single largest educational multimedia order awarded to an Indian software company.

Netafim jv plant set up

NEW DELHI, Nov 10 (TNS) — Netafim Yiftah, one of the group companies of Netafim, Israel, has established a joint venture in India with Excel Industries Limited, and Jalbindu Agritech Ltd, the Umargam-based manufacturer of certain drip irrigation systems. The joint venture under the name of Netafim Irrigation India Private Limited has set up plant at Umargam, Gujarat which has commenced production.

CII seminar
CHANDIGARH, Nov 10 (TNS) — The CII will organise a seminar on “Indo-German Investment” on November 11 in co-operation with the Indo-German Chamber of Commerce and the Indo-German Investment Promotion Service.

Televisa
CHANDIGARH, Nov 10 (TNS) — Mexican broadcaster Group Televisa SA, the world’s largest Spanish-language television programmer, has signed a five-year-renewal agreement with the Associated Press Television News (APTN).

Mul-T-Lock
CHANDIGARH, Nov 10 (TNS) — Guarantee Enterprises Ltd has launched Mul-T-Lock, an Israeli product, to check a car theft. It is available at car dealers.

Country Club
NEW DELHI, Nov 10 (TNS) — Country Club, the flagship brand of Phil Corporation Limited is offering a variety of colourful and interesting gift hampers of Country Club Nuts for the coming season.

Premier LPG
NEW DELHI, Nov 10 (TNS) — Premier LPG Ltd has introduced instant money back guarantee card to its consumers, the first of its kind in India.

Godrej
NEW DELHI, Nov 10 (TNS) — Godrej has now entered the field of personal asset security by launching fire doors and Avanti security doors simultaneously in all parts of the country.