Monday, October 5, 1998
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B U S I N E S S | Monday, October 5, 1998 |
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Government ceases to be
efficient: Chelliah Cellular
phone |
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Close supervision of Swraj
to head |
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G-24 calls for more
development funds
35
crore sale target for khadi Inflation
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Cellular phone comes in cordless NEW DELHI, Oct 4 (PTI) — A cordless phone that can function as a cellular phone is all set to be introduced in India by the Telecom provider “Modi Telstra” incorporating state-of-the-art features. The dual mode phone will enable subscriber to pay less for calls when operated within cordless range of fixed phone by automatically switching over from cellular to fixed. It will switch back to cellular mode once out of the range of fixed phone, Dilip Modi, Executive Director of Cellular Business of the Modicorp, told PTI. The dual mode phone named “personal communicator” is currently being offered in Australia by Telstra, equity partner of Modi Corp in cellular business. Personal communicator is
likely to be offered in the Calcutta and Karnataka where
Modi Corp offer cellular service. |
Government ceases to be efficient: Chelliah NEW DELHI, Oct 4 (PTI) — Noted economist Raja Chelliah has said that the Government ceased to be an efficient or reliable means for implementation of public policy and said it should liberalise reducing further its controls and delicense all industries except those in defence and strategic areas. “The Government is a rent seeking superstructure with the benefits flowing from it being much less than the total costs of sustaining it,” he said adding net value of governance was minimal excepting in the country’s defence. The Government should retire from producing private goods and wherever state enterprises have to operate they have to compete with private companies, Dr Chelliah said in a publication “India a look ahead” being brought out by the “ASSOCHAM” Dr Chelliah advocated decentralisation of public expenditure so that there could be more local control. With government activity reduced and elimination of duplication of services by Centre and States, the surplus Government staff should be shed in a five-year period, he said. The Government staff should be compact in size and equipped with modern electronic aids and paid better, he said adding introduction of a reward and punishments system related to performance in consultation with unions of employees could make the public servants more accountable and productive. Tax administration should be reformed and modernised to increase productivity of tax system and reduce harassment, he said. Dr Chelliah attributed the decline in the quality of governance and soaring costs to surplus staff which casts an unjustified burden on tax payers, inefficiency arising from lack of control on excessively large staff whose accountability was very low. The extension of Government activity and intervention into too many (non public goods) areas means unjustified cost and hindrance to beneficial private activity, he said. He also called for a moral regeneration of society where apart from maintaining law and order, the Government had to act as a arbitrator, regulator and promoter through policy actions and a mitigator of inequalities. Today, the Government in India has ceased to be an efficient or reliable means for implementation of public policy , he said adding it is a rent seeking superstructure. Benefits flow from it are much less than the total costs (visible and hidden) of sustaining it. The net value of governance is minimal excepting the defence of the country, he added. Dr Chelliah regretted that in a 20 year period the government expenditure on administrative services and interest payments had ballooned to 34.3 per cent of total expenditure, amounting to 9.43 per cent of the GDP “this means that these two items use up nearly 50 per cent of total revenues of government sector”. Interest payments alone
amount to 5.66 per cent of GDP. Expenditure on education
and health accounted for less than 16 per cent of the
total. |
Close supervision of banks needed: WB WASHINGTON, Oct 4 (PTI) — World Bank has asked commercial banks worldwide to put in place defence mechanism to mitigate its risk exposure and introduce a deposit insurance scheme, which included maintaining minimum capital adequacy norms. “Banks with limited liability have to be adequately supervised to prevent excessive risk taking,” the bank’s world development report 1998-99 said. It said crisis gripped many countries and most governments found it difficult to rescue their financial institutions. Highlighting the need for defence mechanism for mitigating risks, the World Bank said banks should ensure that they do not engage in excessive risk oriented activities and opt for deposit insurance scheme. “Charging insurance premium or imposing minimum capital requirements that vary with the riskiness of a banks assets can help reduce their risks”, it said. On the insurance deposit scheme, it said since the scheme was instituted “Bank runs” (bankruptcy) have become a rarity in the United States. United States had to
introduce deposit insurance scheme in the 1930s after
great depression when central bank failed to act as
lender of last resort. |
Swraj to head Business Council NEW YORK, Oct 4 (PTI) — Leading non-resident Indian industrialist and chairman of the Caparo group of companies Lord Swraj Paul has been appointed chairman of the Business Council of Parliamentarians for Global Action. The decision to appoint Britain’s roving business ambassador Lord Paul as Chairman was taken on Friday at a meeting of the Parliamentarians at the UN headquarters here. The council maintains dialogue and contact between Parliamentarians and business people. He has asked non-resident
Indians to prepare themselves, and especially their
children, to meet the challenges of the next century if
they want to be successful. |
G-24 calls for more development funds WASHINGTON, Oct 4 (PTI) — The Group of 24, representing developing members of International Monetary Fund (IMF) and World Bank, have called for a “prompt and general allocation” of special drawing rights (SDRs) - money issued by the IMF and distributed to member states. The G-24 has also called for “substantial funding” of international development association during its next replenishment, for which negotiations are scheduled to be completed this year. “A fresh allocation of SDRs is urgent, given the tight international financial situation and the difficulty in accessing international financial markets by many developing countries.” The G-24 said in a communique here yesterday. The Group, in its meetings on Friday and Saturday, also expressed support for intensified consideration of special arrangements for crisis prevention and resolution through regional funds and other forms of bilateral or regional cooperation among members of the Group. The G-24 ministers renewed their demand for better representation for developing countries in international institutions and for “symmetrical treatment” of developed and developing countries by the international organisations. Efforts of the developing countries to cope with the present global crisis need to be supported through early adoption of coordinated monetary and fiscal policies, and appropriate structural reforms in major industrial countries, the communique said. The G-24 ministers called for meaningful measures for debt alleviation and reiterated their support for the enhanced structural adjustment facility. They noted that debt
workouts for the heavily indebted poor countries are slow
and inadequate and urged consideration of further
financing measures, including further contributions by
the IMF from the ESAF Trust Reserve Account. |
WASHINGTON (PTI): The International Finance Corporation (IFC) has announced that it will remove Malaysia from its index of stocks available to foreign investors. This is because of Malaysia’s imposition of capital controls earlier this month and the lack of clarity on what the controls mean for international investment, IFC said. Because many investors are compelled to maintain Malaysian share exposure under the controls and need to track appropriate benchmarks. IFC will continue to calculate an IFC investiable Malaysia index on a stand-alone basis, it said. Malaysia will continue to form part of the IFC Global (IFCG) composite and IFCG Asia indices that assess performance of the most active stocks in their respective bourses from a domestic investor’s perspective. As on September 25, IFCI Malaysia was 5.9 per cent of the IFCI composite index and 21.6 per cent of the IFCI Asia index. Singapore MUMBAI (PTI): Singapore was emerging as a cruising hub of the East with an increasing number of investors landing in Singapore by sea, according to Director Singapore Tourism Board, Vimal Harnal. The number of passengers using Singapore as a cruising hub had grown by 12.3 per cent (7.87 lakh visitors), during 1996-97 as against an increase of 9.1 per cent in 1995-96, he said while speaking at a joint presentation by the Singapore Tourism Board and the Singapore’s leading cruise company, Star Cruises. “Cruising is one of the fastest growing travel options out of India and Singapore is made even more enjoyable by the ease with which nearby topical and exotic destinations can be reached, he added. Acquisitions HONG KONG (AFP): US and European Corporations are on a shopping spree for troubled Asian companies and could provide a big chunk of the $ 234 billion needed to recapitalise the region, a report said. Keeping a close eye on potential acquisition targets should also provide a guide to the best-value shares in Asia’s sagging stock market, the report by Credit Lyonnais Securities Asia (CLSA) said. “There has been 600 mergers and acquisition deals in the year to date worth some $ 5 billion and that trend will accelerate over the next years,” CLSA micro strategist Peter Sutton said in a briefing. Merger process JAKARTA (PTI): Indonesian Government will begin the process of merging four state owned banks this week and the process is expected to be completed within two years, Finance Minister Bambang Subianto said. “The merger process will start as soon as possible sometime this week,” Bambang informed after meeting President B.J. Habibie. As part of its agreement with the IMF on September 11, the Government had agreed to start the merger and restructuring process soon, according to Japanese news agency Kyodo. Surplus SEOUL (AFP): South Korea posted its tenth consecutive current account surplus in August, but economic indicators shook government hopes of an early end to recession. The current account surplus shrank to $ 2.26 billion in August from a $ 3.61 billion surplus a month ago. It was the lowest surplus figure this year. The Central Bank of Korea
(BoK) attributed the drop to falling exports and rising
interests on external debts. Exports have contracted
since may under the strain of Asia’s economic
crisis. |
CCI earns Rs 28 crore BATHINDA, Oct 4 — The Cotton Corporation of India Limited (CCI) has earned a profit of Rs 28.18 crore excluding taxes after achieving annual turnover of Rs 1048 crore in the year 1997-98. According to a press note issued here today, the CCI authorities said that in the last one decade the CCI had earned a profit of Rs 320 crore after deducting all sorts of taxes. The CCI had also started the processing of contamination free cotton to the extent of 10 per cent of its total purchase to supply this quality cotton to the 100 per cent export oriented units. The organisation had also earmarked Rs 11 crore in this year for improving the yield and reducing the cost of cultivation for benefitting the cotton growers of the country. The CCI sales to the private sector mills was 65.04 per cent this year as compared to 56.8 per cent last year and its performance had been rated as an excellent. The CCI would purchase raw
cotton in large quantity for getting remunerative prices
for the growers and it would generate profit from the
exports, the press note added. |
35 crore sale target for khadi AMRITSAR, Oct 4 — The Punjab Government has fixed the sale target of different types of khadi, cotton, woollen and silk at Rs 27 crore, Rs 3.81 crore and Rs 3.77 crore respectively while the sale target for polyvastra has been fixed at Rs 48 lakh. This was disclosed by Mr Sucha Singh Langah, State Industries Minister after inaugurating the special rebate khadi campaign at Khadi Bhawan, here today. In Punjab, khadi sector provides employment (direct and indirect) to more than 9,000. The production of khadi in the state is likely to touch Rs 25 crore during the current financial year. Mr O.P. Bhardwaj, Chairman
Punjab Khadi and Village Industries, Mr Karm Chand
Kaushal, Chairman Punjab Khadi Institute Federation said
that the Government of India, in order to boost khadi
sales provided special rebate on khadi items for 90 days. |
AN experienced bureaucrat, an effective public relations and marketing man as also a shrewd judge in studying figures (balance-sheets), the Chairman and Managing Director P.C. Sen has let Indian Airlines have best of both the deals. With already introduced austerity measures — reduction of expenses in overtime and closure of some of the unprofitable booking officers —and sizable additional revenue through increased fares, 11.2 per cent to be precise from October 6, IA should again fly in calm skies to regain profitability and thereby turnaround. IA was a profit-making organisation till 1989. But it plunged into losses mainly due to grounding of the A-320 fleet, merger of Vayudoot, foreign exchange fluctuations, open sky policy and absence of a level playing field — which meant unlike its competitors, IA continued to serve a larger share of the unprofitable routes. The weather was rough. But IA, in a booklet in 1997-98, said that targeting growth, overcoming challenges and achieving the unachievable were some of the reasons for ‘us to be on cloud nine! IA made a net profit of Rs 50 crore as against a loss of Rs 258.46 crore in 1993-94. This was an ample testimony to the fact that commitment and undeterred purpose could successfully overcome even the biggest problems. Airlines’ happiness, however, was short-live as Indian rupee continued to get severe beating in international currency market. This resulted in additional financial burden through increased landing and route navigational faces, repairs and maintenance of fleet as also considerable rise in hotel rates for crew and increased aircraft lease charges. Disturbed by this unseeming development, IA first undertook austerity measures. Then, amidst this turbulent weather, the Government saw the plight of the airline and decided to agree to an increase in fares by 11.2 per cent. Another flight Scandinavian Airlines System (SA) will operate yet another flight from Delhi to Copenhagen and back to make it five in a week, according to the airline’s general manager (India and Nepal) Bengt Callinggard. “We are more than satisfied with our performance and we are optimistic of launching yet another successful flight”, said Callinggard. According to Callinggard, SAS had picked 60 per cent load last year. “Now we have 70 per cent load of passengers”, said Callinggard, adding: “There is enough scope and opportunity to add another flight.” The new SAS
has been introduced at an event in Stockholm. The
airline’s president Jan Stenberg revealed the
results of the most extensive change programme within the
airline. On the eve of the new millennium this makes SAS
even better positioned to meet the increasing competition
in the air travel market.The new Boeing 737-600 aircraft
is considered an investment in comfort and environment,
according to airline officials. |
THE South-East Asian financial crisis is now developing into a global crisis. The International Monetary Fund (IMF) has sounded the alarm. The global economic barometer indicates bad conditions for the economy in different parts of the world — turbulence, slowdown in economy, threat to international payment system, lower stock prices, high inflation, weakening of the banking systems. This crisis is likely to affect almost all countries, though in varying degrees. The IMF has revised its 1998 world economic growth forecast down from 2.5 per cent to 2 per cent. The crisis may even flow into the next year, and the forecast for 1999 is only 2.5 per cent growth. During the last week, the stock markets in Europe, USA and in the South East Asian countries have crashed. The worst hit is the Japanese currency and stock market. Russia, as the IMF report states “has replaced Asia as the epicentre of global financial market pressures” and its economy is expected to decline by 6 per cent. The USA economy would also slow down in 1999 from 3.5 per cent to 2 per cent. India has weathered the storm well so far, but not one should expect the economy and the stock market to perform better than it is doing now. It, too, can slow down further under the weight of pressures from sharp decline in exports, US sanctions, sharp depression in many sectors of industry and political turmoils. If the year 1998 has been bad, the next financial year may not be any better for the economy and the stock market. It is clearly the time for some profit-taking in scrips which have made substantial gains. The stock market is not expected to improve in the coming months. The post-Divali behaviour of the stock market is likely to be erratic and disappointing. I am moved to this analysis by at least three major considerations. First, in the context of the global economic crisis, the flow of FII funds as well as direct foreign investments would dry up at least for some period of time. The FII purchases have been in the past as a tonic for the Indian stock markets. Starved of this support from the FIIs, even the top blue-chip equities would lose their shine. Any further sales by the FIIs in the Indian market would bring down the stock market indices. The second consideration is the situation in which the Unit Trust of India finds itself at the present time. It was a known fact for quite some time that the Net Asset Value of UGS-64 scheme was lower than its purchase and sale prices offered by the UTI. But it is now that this declining NAV of the UGS-64 has attracted a formal enquiry from the SEBI and has come into full glare of public notice. The UTI has been sustaining the stock market during the last six months or so in the face of heavy sales by the FIIs. But now, it may not be possible for the UTI to do so. In fact, the UTI may be downsizing its equity holding in this scheme by 4 per cent by offloading it in the next couple of months. Considering that approximately 4 per cent of this Rs 22,000 crore Fund’s equity would be placed in the market, though a large part of it may be parted away through private dealings with the managements of the corporate sector, the stock market is bound to move downward steeply. The UTI’s role in the coming months is likely to be that of a “seller ” than that of a “buyer”. The third consideration is the persistent slow down in some sectors of industry. Except for the two-wheelers and light-weight trucks, the automobile industry is in a bad shape. The same applies to the iron and steel industry, the textiles, cement and shipping sectors. The second quarter results of the corporate sector are not likely to be encouraging the stock market. According to a poll conducted by Reuters, which is based on the views expressed by 27 firms of top securities, the first half results of the corporate sector would be, with some exceptions, bad. The profit-after-tax (PAT) of ACC is expected to be down by 11.9 per cent, of Arvind Mills by 58.5 per cent, of Grasim by 19 per cent, of Larsen and Toubro by 12.2 per cent, of Tata Chemicals by 4 per cent and of Tisco by 55.5 per cent. SAIL’s loss is likely to be around Rs 5 billion and to Telco around Rs 360.9 billion. Glaxo (PAT up by 52.2 per
cent), Bajaj Auto (PAT up by 15.6 per cent) Nestle (PAT
up by 39.6 per cent), SBI (PAT up by 25.7 per cent) would
be reporting good results.
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NEW DELHI, Oct 4 (PTI) — Unabated rise in prices of essential commodities, including fruits, vegetables and edible oils, pushed up annual rate of inflation sharply to 8.55 per cent during the week ended September 19. During the week under review, inflation based on wholesale price index (WPI) rose by 0.40 points to 8.55 per cent (provisional) from 8.15 per cent (provisional) last week. Overall WPI also spurted by 0.2 per cent. The sharp rise in
inflation was fuelled by the 1 per centage point increase
in non-food articles and 0.8 per cent increase in food
articles. |
DCM I was allotted 10 redeemable non-convertible debentures (NCDs) of Rs 1000 each of DCM Ltd. under L.F. No. 201818. The redemption was due on 7.8.98 but inspite of repeated requests DCM Ltd. has not made the payment. C.B
Gupta II I invested Rs. 10000/- with DCM, Ltd, New Delhi in NC debentures, Series ‘A’ for 17 months 25 days. Its redemption was due in the middle of August, 1998. Despite sending the debenture certificate duly discharged on 13.7.98 the said company did not redeem NC debentures Bearing No. 006020. Shakuntla
Rani Prakash Ind. I and my mother invested with M/s Prakash Industries, New Delhi towards NC debentures folio No. 520818 and 520819 worth Rs 20,000 for 18 months in December 1996. Maturity of which stands in June 98, but till date no payment of principle amount or its accruable interest, totalling Rs 26,000 is received. Girish
Kapoor, Videocon Intl. I sent 100 bonds of Videocon International with Folio No. 50003501, Bond No 54988 for redemption to Videocon Services Ltd. Despite many reminders, I have not received the redemption money. Subhash
Chander Sarpal II I sent for redemption 100 Bonds to Videocon International, Aveangabad on 27.1.98 with folio No 60003563 and Distinctive No 0005524701-0005524800. Till date I have not received the amount in spite of many reminders. Serela
Devi Mittal ITC Bhadrachalam I purchased 100 shares of I.T.C Bhadrachalam bearing share certificate No. 843242 in Nov. 1997 vide Folio No. S006-307. These could not be transferred in my name for want of authentication of alteration. On the advice of the company the said share certificate were sent to Stock Exchange Corporate of India Ltd., Bombay on 21-01-98 and reminder was sent on 10-8-98 but with no result so far. Bhanu
Partap Uno refund I booked Uno car vide priority booking No. 16/007755 and control No. 158980. I asked for cancellation in December ’97 duly under registered cover and subsequently reminded on 16.4.98 but no refund of Rs 21000 was made even after the lapse of 10 months, although I also approached to the local dealer M/s Sandhu Automobiles Pvt. Ltd. Ludhiana. Prof.
H.S Bali Dee Pharma I and my daughter purchased Doctor’s Bonds in March 98 No. 108 and 3622 for Rs. 20,000 each at a discount price of Rs 14700 from Dee Pharma, which matured on August 17, 1998. Despite many reminders, the company is not responding and making payments. Dr
Ajit Gupta Nuchem The Company Law Board passed an order dated 17-5-97 against M/s Nuchem Ltd. to payment of fixed deposit in instalment and first instalment of F.D.R was to be paid out by Sept. ’97 but despite repeated reminders no payment was released in respect of FDR No 61515 dt. 20-1-96 and FDR No. 62182 dt. 24.2.96. N.P.
Garg Cauvery Electro. I sent Rs. 25,500 to the Cauvery Electronics Ltd., in 1991 as application money for 1700 shares. After more than a dozen letters to the company, I complained to SEBI, Mumbai who registered my complaint on 27.7.1996. But even SEBI has not done anything till date despite three registered reminders to it. So my money is lying with the company for the last 7 years without any interest or dividend and nothing is heard about the principal amount even. Mohinder
Paul |
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