Drastic cut in fiscal deficit needed: PM
NEW DELHI, Oct 15 — Mr Atal Behari Vajpayee said today the high fiscal deficit needed to be drastically cut as otherwise macroeconomic management would continue to be difficult.

PSEB panel to look into industry issues
CHANDIGARH, Oct 15 — On the basis of a memorandum submitted by PHDCCI, Mr S.K. Tuteja, Chairman, Punjab State Electricity Board, held a meeting with representatives of industry here today.

HSBC Sec: bad days
ahead for economy
NEW DELHI, Oct 15 — The HSBC Securities has projected further deterioration in the Indian economy with an increase in the fiscal deficit and a decline in gross domestic product growth rate in the current fiscal year.

UTI fiasco: where is accountability? After the Morgan-Stanley fiasco, which all but put the foreign mutual funds out of the reckoning in the Indian market, most retail investors had got around to being increasingly dependent on the US-64 scheme of the UTI, which continued to dole out liberal dividends year after year. Corporates back UTI

TRAI extends deadline
NEW DELHI, Oct 15 — Telecom Regulatory Authority of India today extended by a fortnight the deadline for submitting comments on its tariff proposals for various telecom services.

Sovereigns steal Divali show
NEW DELHI, Oct 15 —Sovereigns were in the limelight on the bullion market today on persistent buying by domestic buyers for Divali festival and recorded further gains. However, gold and ornaments were weak on lack of buying support.

If Japanese spend, economy can pick up
Japan is the second-biggest economy in the world. The collapse of prospective growth from 2.1 per cent to a contraction of 2.5 per cent — and still falling — is an unprecedented shortfall of nearly 5 per cent.

HDFC net up 16 pc
CHANDIGARH, Oct 15 — During the first six months of the financial year, HDFC has reported a profit before tax of Rs 177.76 crore, an increase of 14 per cent over the corresponding period in the previous year.

Drastic cut in fiscal deficit needed: PM

NEW DELHI, Oct 15 (PTI) — Mr Atal Behari Vajpayee said today the high fiscal deficit needed to be drastically cut as otherwise macroeconomic management would continue to be difficult.

“There is a need to rein in the fiscal deficit which appears unacceptably high,” he said adding this required concerted action to reduce government expenditure, greater revenue buoyancy and improvement in the tax-GDP ratio.

Making his observations on the economy at the first meeting of the recently constituted Economic Advisory Council, Mr Vajpayee, however, struck a positive note saying the recent data showed Indian economy would achieve a 6.3 per cent growth this year as against 5.1 per cent in the previous year.

But there was a lot that need to be done, and “we face a host of problems in infrastructure, in exports, fiscal areas, in deregulation of public enterprises and in reducing price rise,’’ he told the council and sought its help in articulating policies to effectively deal with these immediate concerns.

The council, which he heads, met today to take stock of the economy and the current international economic scenario that had a bearing on the country. The council members included I.G. Patel, P.N. Dhar, Ashok Desai, Montek Singh Ahluwalia, Arjun Sengupta and G.V. Ramakrishna.

He said direct tax net should be widened besides eliminating exemptions and plugging leakages.

Noting that losses in public enterprises were a fiscal drain which were not affordable, Vajpayee said public sector restructuring should be undertaken with a credible disinvestment programme.

Touching upon the international economic scenario particularly the East Asian meltdown, Vajpayee said the country’s financial sector should be further strengthened and made more resilient to shocks.

While there was a need to rein in fiscal deficit to acceptable levels, it should be combined with high growth.

“We have to get to the growth path which is needed to address poverty alleviation,” he said adding fruits of growth should percolate to the grassroots.

GDP must grow at 7 to 8 per cent over the next three years. Besides industrial growth should reach 12 to 13 per cent in the medium term, exports 12 to 15 per cent in dollar terms and step up investment in both public and private in agricultural sector by giving a boost to agro-processing industries.

“For achieving all these, clearly, long term policy changes are necessary,” he said adding key concerns in the short-term was to reactivate growth impulses in Indian industry and kickstart the economy without generating further fiscal pressures and rekindle inflationary forces.

HSBC Sec: bad days ahead for economy

NEW DELHI, Oct 15 (PTI) — The HSBC Securities has projected further deterioration in the Indian economy with an increase in the fiscal deficit and a decline in gross domestic product (GDP) growth rate in the current fiscal year.

The stock broking arm of the HSBC group also predicts rise in interest rates by 100 basis points in the current fiscal year and increase in inflation rates.

It has also downgraded the banking sector from neutral to underweight as most banks are likely to be affected by the economic slowdown and higher interest rates, leading to rise in bad loans.

In its monthly update for October it expects India’s fiscal deficit to worsen to 7 per cent of the GDP from its earlier forecast of 6.2 per cent. The government has projected fiscal deficit of 5.6 per cent in the current fiscal year.

It expects GDP growth of 3.6 per cent in the current fiscal from its earlier forecast of 3.8 per cent.

PSEB panel to look into industry issues
Tribune News Service

CHANDIGARH, Oct 15 — On the basis of a memorandum submitted by PHDCCI, Mr S.K. Tuteja, Chairman, Punjab State Electricity Board, held a meeting with representatives of industry here today. It was decided to constitute a committee consisting of Mr Gursaran Singh, Co-Chairman, Punjab Committee of PHDCCI, Mr K.L. Khurana of Ranbaxy Laboratories, and three members of the PSEB to look into the demand of industry to do away with the relation between contract demand (KVA) and connected load (KW) as also the linked issue of minimum monthly charges. The committee will submit its recommendation by November 30, 1998.

Mr Tuteja said the dispute settlement committees of the PSEB will be recast for giving representation to the industry.

World Food Prize for Indian farmer
Tribune News Service

This year’s World Food Prize has been awarded to an entrepreneur from India, B.R. Barwale, founder and Chairman of Maharashtra Hybrid Seeds Company — better known as Mahyco. He was specifically honoured for promoting private enterprise in India’s agricultural sector. The award was announced at a press conference in Washington on October 13.

Born in 1931, Badrinarayan Ramulal Barwale is a farmer, entrepreneur and a visionary. Beginning his career soon after Independence, he transformed his small family farm into a productive enterprise which began to provide superior seeds to neighbouring farmers. He rapidly expanded the range of crops covered and began to contract with other farmers to produce seed for him to market. He also began an aggressive research programme to screen, test and develop new high-yielding varieties, meeting the needs of Indian producers and consumers.

In 1964 Barwale founded Mahyco. Employing innovative research techniques and providing quality seed, Mahyco flourished. Today Mahyco is the largest of nearly a hundred crop-genetics companies in India.

Barwale oversees an operation that produces and markets more than 300 hybrid varieties of rice, wheat, corn and sorghum, oilseeds, fruits and vegetables. From its headquarters in Jalna, Mahyco operates 16 production centres in seven Indian States.

A recipient of numerous awards, including the National Award for R&D Effort and the Businessman of the Year Award by the Priyadarshini Academy, Barwale is a globally recognised entrepreneur and agricultural expert. Today Barwale is less active in his company, yet remains committed to building facilities for education and health care that help the rural population of the area where he first got his start.

The World Food Prize was conceived by Dr Norman E. Borlaug, recipient of the 1970 Nobel Peace Prize. Since 1986 the World Food Prize has honoured outstanding individuals who have made contributions to improving the quality, quantity, or availability of food throughout the world. The previous laureates include Dr M.S. Swaminathan, architect of India’s “Green Revolution” (1987), He Kang, a former Minister of Agriculture in China (1993), and Dr Muhammad Yunus, founder of the Grameen Bank in Bangladesh.

TRAI extends deadline

NEW DELHI, Oct 15 (PTI) — Telecom Regulatory Authority of India (TRAI) today extended by a fortnight the deadline for submitting comments on its tariff proposals for various telecom services.

“Time for submitting written submissions by interested parties has been extended from October 7 to 21,” an official release said.

TRAI had given time till October 7 for submitting written comments by telecom operators, interested parties and the public while releasing the consultative paper on tariff proposals, “Telecom pricing”, on September 9.

UTI fiasco: where is accountability?
By Ashok Kumar

After the Morgan-Stanley fiasco, which all but put the foreign mutual funds out of the reckoning in the Indian market, most retail investors had got around to being increasingly dependent on the US-64 scheme of the UTI, which continued to dole out liberal dividends year after year. However, the bubble seems to have finally burst and it is now a well-known fact that there is a negative balance of Rs 1,098.49 crore in the reserves of the US-64 scheme.

Now, were the US-64 corpus be marked to market at this stage, the underlying value for each unit would work out to Rs 9.9 as compared to its sale price of Rs 14.55 and repurchase price of 14.25 now. This effectively means that UTI is charging a premium of 47 per cent on units sold. Now, the top brass at UTI, would like to have us believe that there would be fresh sales of units, and perhaps an improvement in market conditions too. UTI could then write back the provision of Rs 3,566 crore it has made, and its reserves would emerge out of the red again. Not surprisingly, the shaken unitholders are taking this prediction with a huge pinch of salt.

Adding fuel to the fire are some of the pronouncements of UTI’s new Chairman, P.S. Subramanyam, particularly the one that US-64 is not an NAV-driven scheme; the premium charged over the net assets value is because of ‘Brand UTI’, which means security and safety to investors, and in turn, the hidden value of the scheme. If only the situation were not so grim, it would have bordered on the hilarious. So, what exactly is the present scenario? Well, as long as fresh investors get into the scheme with a resale price in excess of Rs 14, they are actually paying for assets which are worth less than Rs 10. Furthermore, the new investors who are getting into the scheme are making sure that the ones getting out make the grade, the repurchase price being always lower than the resale price. In this way, the US-64 bandwagon staggers on, but the million dollar question here is — for how long?

Now, imagine a not altogether unlikely scenario, where fresh sales in the scheme slow down substantially. It is quite likely then that the Trust will find it difficult to honour redemptions at the current level of Rs 14.25. This will then induce UTI to push the repurchase price closer to the real NAV, and then, UTI’s ‘all is well’ facade will be impossible to maintain. Of course, were the BSE sensex to traverse an upward path of at least 1000 odd points, things might not be so bad after all for the Trust and its unit-holders.

Finally, as always this fiasco too indicates the absolute lack of accountability in India. A former UTI Chairman who now waxes eloquent on the overexposure of the fund to equity has a lot of answering to do about the dubious purchase of the shares of Reliance Industries at a negotiated price, well in excess of its then prevalent market rate, during his tenure at the helm of the Trust. Perhaps it is no coincidence then that this fiasco has been preceded by a share fall in the share price of Reliance Industries. Further aggravating matters at the bourses is the sustained selling pressure being maintained by the FIIs who see a golden opportunity to unseat UTI from the numero uno position in the struggling Indian mutual fund segment.

Corporates back UTI

NEW DELHI, Oct 15 (PTI) — Corporate giants, including ITC, Tata Sons and Hindalco, will not withdraw their investments from the UTI and will back it solidly against any redemption pressures.

FICCI President K.K. Modi told newsmen today that discrete enquiries by the chamber revealed that many large corporations had sizeable investments in UTI and they would not dilute their investments in it.Modi indicated that Tata Sons, ITC and Birla group companies Indian Rayon, Hindalco and Grasim, besides Bombay Dyeing, Max India, Arvind Mills, SRF and Goetze India will be “solidly supporting” the Trust.

Sovereigns steal Divali show

NEW DELHI, Oct 15 (PTI) —Sovereigns were in the limelight on the bullion market today on persistent buying by domestic buyers for Divali festival and recorded further gains. However, gold and ornaments were weak on lack of buying support.

On the other hand, silver made another dive on lack of buying in the face of steady inflow of fresh stocks.

Marketmen said the market was directionless as jewellers were uncomfortable with the sale during this festival season which was much below the expectation.

The following were today’s quotations: silver .999 (ready) 7260 and delivery 7390, Silver coins buyer 11,200 and seller 11,300, standard gold 4355, ornaments 4205 and sovereign 3750/3800.

If Japanese spend, economy can pick up
From Victor Keegan in London

Japan is the second-biggest economy in the world. The collapse of prospective growth from 2.1 per cent to a contraction of 2.5 per cent — and still falling — is an unprecedented shortfall of nearly 5 per cent. It has created a black hole in the global economy that is sucking in every other country.

Japan’s trading position in Asia ensured that the entire region suffered. Domestic investors in Thailand, Malaysia and Korea sent capital abroad. Overseas investors took fright and sent their money to safe havens, creating a huge exodus of money from the region.

When Russia decided to default on its bonds — the first government to do so — the hedge funds were scared and the avoidable recession in Japan billowed into a global problem the world’s leaders can’t cope with.

This is the digital revolution’s first serious recession, and all the worst fears about what might happen have come true.

Japan has other, very serious problems, like a near-bust banking system, but consumer spending is at the core.

If everyone started spending again the economy would pick up. Consumers would buy more goods from their own factories and from those of East Asia. The stock market would recover, providing a much-needed increase in collateral for loans. The yen might sustain its recent recovery, thereby making currencies in the Pacific Basin more competitive, removing the daunting prospect of a Chinese devaluation.

Japan is still very rich, with more household savings than any other country. Government debt, at only 30 per cent of gross domestic product, is far below that of most European countries.

If consumers won’t spend, government must do it for them. If the yield on government bonds is a guide to international credit-ratings, Japan’s, at less than 1 per cent, makes it one of the safest in the world.

Japan also has the strongest trade balance in the world, a current surplus of $ 112 billion, compared with a US deficit of $ 186 billion. So what’s the problem?

Why won’t they spend? Pensions worries, and being too stunned to do anything have a part in it but it is also because Japan is facing falling prices. Customers have a vested interest in delaying purchases because they will be cheaper later.

Small wonder that everything the politically paralysed government has done has fallen flat, from tax cuts (which are simply saved) to advertisements on tube trains exhorting everyone to spend.

— The Guardian

HDFC net up 16 pc
Tribune News Service

CHANDIGARH, Oct 15 — During the first six months of the financial year, HDFC has reported a profit before tax of Rs 177.76 crore, an increase of 14 per cent over the corresponding period in the previous year. After providing Rs 30 crore for taxation, profit after tax amounted to Rs 147.76 crore as compared to Rs 127.90 crore during the corresponding period in the previous year — an increase of 16 per cent.

By Pushpa Girimaji
96 per cent of Divali burns caused by ‘anars’

I come back to the subject of firecrackers once again this Divali. Remember those innocuous looking “caps” that come in individual packs or in rolls or strips that children love to burst either by using them in a toy gun or by rubbing or striking them against a hard surface? It bursts with a loud bang, accompanied by sparks. Well, these have become very popular once again, but watch out! Paediatricians say that they could cause immense harm when fired close to a child’s ear. Besides, children tend to stuff them into their pockets and that’s where the danger lies. They could well ignite in the pocket due to friction, causing burn injuries.

In the USA, following a large number of such accidents caused by these “caps” used in toy guns, a Consumer Products Safety Commission regulation limits the decibel level of caps to a maximum of 158 decibels. It is also mandatory for packs of “caps” to carry a label, warning users not to fire closer than one foot to the ear. The commission also warns parents to ensure that children do not keep them in their pockets.

Another equally harmless looking product is the match stick that burns with a red or a green flame. But many of them are so poorly made that when struck against the match box, sparks fly in different directions, injuring the user. Sometimes the match stick also breaks into two even as it ignites. It could well cause a major fire or burn injury depending on where it falls.

In fact in 1985, when Prof Dinesh Mohan of the Centre for Biomedical Engineering, Indian Institute of Technology, filed a petition before the Supreme Court seeking a ban on “flower pots” or “conical anars”, consumers were surprised. Till then anars were believed to be relatively safe. However, studies conducted by Prof Mohan and his colleagues had identified these anars as the culprits in 96 per cent of burn injuries during Divali, partly because of the poor quality and partly because of the carelessness of the user. But the four-member expert group appointed by the Supreme Court to examine the issue opined that instead of a blanket ban, the government and the firecracker industry should aim at quality control and education of consumers.

Today, it is not known whether the number of anar-related accidents have come down, but what is known is that not every flower pot sold in the market is of standard quality. If you look at the quality specifications for conical anars formulated by the Bureau of Indian Standards, you will find that while filling the pyrotechnic composition in the flowerpot, it is most important to avoid formation of cavities or sections of loose powder or air bags that may cause explosion. If this is not strictly adhered to, the “anar” could well explode.

Similarly, the BIS standard for fireworks rockets specifies that when fired from a vertical position supported by an external contrivance, the rocket shall not deviate to an angle of more than 10 degrees from the vertical. But then, BIS specifications are not mandatory and you will find rockets to be one of the most hazardous of fireworks available in the market today.

This year, before you purchase fireworks, ponder over these facts: (a) Pyrotechnic devices of poor quality certainly spell danger. But even good quality firecrackers are not safe because accidents to happen. Besides, as Prof Mohan points out, even if manufacturers achieved 95 per cent efficiency in quality control procedures, the remaining five per cent of faulty fireworks would still amount to a large number, given the quantity of firecrackers produced in the country during Divali. And every year, an estimated 100,000 persons suffer minor and major burn injuries during Divali. (b) Traders who store them for sale are also at risk. Only last week, 14 persons died, and many others were injured in Vijayawada in Andhra Pradesh when firecrackers stored in a house accidentally caught fire. (c) Firecrackers are a public safety hazard when exposed for sale in crowded markets. (d) In the absence of restrictions on the maximum permissible decibel levels for firecrackers, the sound pollution caused during Divali reaches alarming proportions. (e) They also contribute to atmospheric pollution, aggravating respiratory diseases and allergic conditions.

Do you still want to celebrate Divali by playing with these pyrotechnic devices?

Staff gesture
CHANDIGARH, Oct 15 (TNS) — As a goodwill gesture on the occasion of approaching Divali, staff members of the State Bank of India, Sector-30, here distributed sweets and fruit among disabled inmates of Chandi Kusht Ashram, here. They have also contributed Rs 3,150 towards the Prime Minister’s Relief Fund this month.

Kemna Elect
NEW DELHI, Oct 15 (TNS) — Kemna Electronics has launched its range of laser related products. The product range include laser diode modules, line generators and lens systems, infra-red high power laser diodes, communication laser diodes and photodetectors among others.Kemna Electronics is a part of the multi-billion Kemna Group. The group has an estimated turnover of 6 billion DM.