Thursday, September 10, 1998
today's calendar
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B U S I N E S S | Thursday, September 10, 1998 |
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spotlight today's calendar |
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Duty payback period Banks
told to aid |
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India seeks German power
packages SAARC
nations to cut tariffs |
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Govt
seeks divestment panel’s views 5
Shimla NBFCs flout RBI rules RBI
allows foreign currency payments Dabur
India to sell off 60 pc stake in subsidiary Car
security system launched Gold
imports from UK rise 507 pc Ficci:
cut expenditure Markfed
plan to set up vodka, Basmati units |
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Duty payback period to be cut: FM MUMBAI, Sept 9 (PTI) — The government will reduce the period of duty payback for exporters by a month to 60 days and also pay penal interest from the 61st day, Union Finance Minister Yashwant Sinha today said. Addressing a meeting of the Federation of Indian Export Organisations (FIEO) here, he said the Centre had already taken a decision to pay its dues to exporters under various duty payback schemes and an amendment to the law in this regard was pending. He said simplification of procedures was more important than duty or tax concessions to exports.“We (the government and businessmen) are not in combat with each other. I am pleading with customs and excise officials to be facilitators and not road blocks,” he said adding that the ministry was taking a re-look at procedures with the goal of export promotion and revenue collection. He said urgent steps were needed to boost exports, which was a national priority. The zero growth in exports witnessed in the first quarter was also likely to increase the current account deficit to 2-2.4 per cent of the GDP, he added.The Finance Minister also called for a micro-approach to export promotion saying “we have been talking generally. Instead let’s concentrate on individual markets and individual problems. ”“Look beyond issues of duties and concessions and instead focus on quality, price that is less elastic to market forces and individual customers,” Yashwant Sinha told exporters here.Let the ‘Made in India’ label come to signify reliability and dependability in terms of quality and delivery schedules, he stressed, adding a lot remained to be achieved in these areas. “The international situation is not bright at this point of time and has compounded the intensity of domestic problems. However, India is an island of tranquillity in a sea of turbulence,” he said exhorting exporters to take advantage of the situation prevailing in international markets. Competitive currency devaluations were of no significant advantage as the importer was also monitoring the situation carefully and would demand discounts from the exporter whose currency has depreciated.“We may not have grown like the Asian Tigers at 10 and 12 per cent per annum, but it is our steady progress and stability that makes India one of the most attractive destinations for foreign capital,” he added. On the subject of dumping,
he said the industry should come to a consensus and take
a holistic view as any additional duty that is beneficial
to one is detrimental to another. |
India seeks German power packages BONN, Sept 9 (PTI) — India today asked German investors to come out with “financial packages” for setting up projects in its power sector and said global tenders would be floated soon for several large transmission and distribution projects in the country.Power Minister R. Kumaramangalam said though several German companies like Siemens had an ‘active role’ in the Indian power sector and there was need for financial packages to be tied up with the projects. Kumaramangalam made these comments in his intervention during a closed-door meeting President K.R. Narayanan had with German businessmen, who included Chief Executive Officers of 26 companies. The visiting minister is understood to have asked Germany to follow the examples of France and the United Kingdom in coming out with financial packages in the power sector. He expressed surprise at Germany not being involved in any of the three FDI related private sector power projects for which India signed counter-guarantees last month. Kumaramangalam said the power sector was growing at a very high pace of 10 per cent or about 9,000 MW a year and indicated the country faced a shortage of 16,000 MW during peak demand.Mr Narayanan, who is on the fourth day of the five-day state visit to Germany, said: “Change of governments four times in three years has not halted the economic reforms in any way. “Economic reforms is an irreversible process in the Indian scenario,” Narayanan said in his extempore remarks while explaining the current economic situation in India.German businessmen in their brief remarks highlighted the problems faced by the investors due to what they called frequent changes in the legal and economic framework in the last three years, special conditions for investments in the automobile industry and the 4 per cent additional Customs duty for imports into India. Dr Scnieder, chairman of the Bayer group, said Indian duties were “still high” compared to levies in neighbouring countries.Kumaramangalam said the 4 per cent additional Customs duty was not a non-tariff barrier and was intended to generate revenue. Even the Indian industry
is up in arms against this duty which is likely to be
there for some more time, he said. |
Banks told to aid SSI sector MUMBAI, Sept 9 (PTI) — The RBI has asked banks to implement a high-level committee recommendations for greater and smooth delivery of credit to the small scale industries (SSI) sector. The recommendation of the one-man S.L. Kapur Committee relate to delegation of more powers to branch managers to grant ad hoc limits, simplification of norms for assessment of credit requirements, opening of more specialised SSI branches, enhancement in the limit for composite loans to Rs 5 lakh, strengthening the recovery mechanism, paying more attention to backward states and special programme for training branch managers for appraising small projects. The directive to banks following the RBI’s acceptance of the report submitted on June 30, 1998, also relates to making customer grievance machinery more transparent and simplification of procedures for handling complaints and their monitoring. The RBI has said banks should introduce tri-lingual loan application forms (Hindi, English and local language) and also to straightaway use the application forms prescribed for facilities up to varying amounts. The RBI has advised banks to adopt the committee approach for sanction of applications and to dispose of loan applications in a timebound manner. It has indicated that applications for amounts upto Rs 25,000 should be disposed of within a fortnight and those for amounts above Rs 25,000 within eight to nine weeks. In its circular, the RBI
has also asked banks to delegate powers to branch
managers to grant ad hoc facilities to the extent of 20
per cent of the limits sanctioned subject to the usual
lending discipline. This would ensure that most of the
credit proposals are decided at the branch level, it
said. |
SAARC nations to cut tariffs COLOMBO, Sept 9 (PTI) — The SAARC countries have agreed to reduce tariffs on 2,459 items and “wider and deeper” cuts are expected in future to ensure that the region is converted into a South Asian free trade area (SAFTA) by the year 2001, Commerce Minister Ramakrishna Hegde has said. Speaking at ‘India Day’ at the second SAARC trade fair here today, the minister said besides removing tariff lines under the South Asian preferential trade arrangement (SAPTA), efforts were on to remove non-tariff barriers which were obstructing the growth of intra-regional trade.India had taken a lead in this direction and removed import restrictions on over 2000 items of trade interest. Further, the government had raised the ceiling for Indian joint ventures in SAARC countries under the fast track from $ 4 million to $ 15 million.He said steps were being taken to harmonise customs procedures and standards, quality and measurements and improvement of infrastructural facilities in the areas of transport and telecommunications. “I am hopeful that the time is not far when the trade environment in the region would be the envy of all regional groupings,” he said.To hasten the development, the SAARC nations should desist from raising bilateral contentious issues, he said.Hegde warned against “excessive” dependence on US dollar by developing countries saying it could be “suicidal” in the context of the South-East Asian currency crisis. Efforts should be made to break away from shackles of “economic imperialism” being imposed by the dollar, Hegde said adding that possibilities of global counter-trade should be explored as it could help insulate India against any currency crisis. In a hard-hitting speech
at the second SAARC fair here, he said it is time for
developing countries to take note of the serious economic
crisis in South East Asian markets which has had an
impact on the global economy. |
Govt seeks divestment panel’s views NEW DELHI, Sept 9 (PTI) — The Finance Ministry has sought the Disinvestment Commission’s views on its proposal to float a non-government company for privatisation of top public sector undertakings, banks and financial institutions. The core group of Secretaries (COS) on disinvestment had asked the Finance Ministry on Friday last to obtain views of the Disinvestment Commission on its proposal to create a special purpose vehicle (SPV) for offloading government equity in excess of 49 per cent in identified PSUs. When contacted commission Chairman G.V. Ramakrishna told PTI that “We received yesterday a communication from the Finance Ministry for our comments on SPV. But before this we had
communicated our views to the group of ministers on
disinvestment.”While Finance Secretary Vijay Kelkar
had suggested that the disinvestment panel chief should
head the SPV, a company to be created with an equity base
of just Rs 10,000 to expedite the privatisation
programme, Ramakrishna had opposed the move saying it was
against “public policy.” |
High court orders prompt CHANDIGARH, Sept 9 — Mr Justice SC Malte of the Punjab and Haryana High Court today dismissed a batch of petitions of the accused in a multi-crore fertiliser scandal for quashing the investigation and directed the Punjab Vigilance Department to probe the scandal thoroughly and promptly. Swaran Singh, Director of Modern Agro Industries, Jalandhar, is the main accused in the alleged scandal in which are involved several officials, besides former minister Raj Khurana and sitting MLA Amrik Singh.It was alleged that the accused used to claim subsidy on fertilisers without manufacturing these and show fictitious sales through forged documents in connivance with officials, including a former Director of Agriculture. The clinching nature of evidence was that raw material needed for the manufacture of fertilisers was not even imported, but huge stock was shown to have been transported in vehicle with fictitious registration numbers. The numbers turned out to be of, scooters and small vehicles, which possibly cannot transport fertilisers shown in the documents.The scam was unearthed due to a persistent follow-up by the kisan wing of the Shiromani Akali Dal (Mann), which pursued the matter even at the level of the High Court. The FIR was registered on
April 30, 1998 at the Patiala vigilance bureau.
Immediately the accused rushed to the High Court for a
stay of the investigation.With today's decision the
bottlenecks in the investigation stand cleared. |
5 Shimla NBFCs flout RBI
rules CHANDIGARH, Sept 9 — At least eight non-banking financial companies in this region — five of them Shimla based — are accepting deposits from the public without complying with the RBI conditions. In a press release here today the RBI cautioned the public against dealing with these companies: Him Parvesh Finance Ltd, Himachal Housing & Fiscal Services, Himalayan Fincap Ltd, Navoday Hire Purchase & Deposits Ltd, and Him Advances & Savings (P) Ltd — all based in Shimla — Meridian Financial Services (P) Ltd of Solan, Endowment Investment (India) Ltd of Chandigarh and R.K. Satyadarshi Savings & Finance India Ltd of Jalandhar. A non-banking financial
company must be registered with the RBI and have funds of
not less than Rs 25 lakh. It must have obtained a credit
rating from one of the approved credit rating agencies
and the rating should not be below the minimum investment
grade - “A” or its equivalent in the case of
equipment leasing hire purchase finance companies and
“A” in the case of loan and investment
companies. |
RBI allows foreign currency payments MUMBAI, Sept 9 (PTI) — The Reserve Bank of India (RBI) today allowed all non-resident Indians (NRIs) and foreigners, visiting India to make payments to anyone residing in the country in travellers’ cheques or foreign currency or cheques drawn on banks abroad for services rendered, goods sold or in settlement of any lawful obligation. Clarifying this, the apex bank said no specific permission is required from the central bank for this purpose. However, residents would have to sell the foreign currency to an authorised dealer within seven days. Residents are permitted to
hold foreign currency up to $ 2,000 or its equivalent for
numismatic purposes. |
Dabur India to sell off 60 pc stake in subsidiary NEW DELHI, Sept 9 (PTI) — The Rs 800 crore Dabur India Limited (DIL) today declared a dividend of 35 per cent. It also decided to sell off its stake in the confectionary joint venture with Agrolimen by March 1999. The annual general meeting held today approved selling off 60 per cent stake in Agrolimen, 100 per cent subsidiary status for Dabur Foods besides authorising the Board of Directors to form a joint venture for branded pharmaceuticals.In a significant change of guard, V.C. Burman took over the company’s chairmanship from A.C. Burman, who is now chairman Emeritus of the company, a press release said. “We will finalise a professional Chief Executive Officer by December this year to delegate the day-to-day functioning of the company to professionals. Our vision is to be among the top FMCG companies in the country,” said Chairman V.C. Burman.In another resolution, Finance and Accounts Head P.D. Narang was appointed as a whole-time director of the company who will look after existing joint ventures, acquisition and divestment plans besides other functions. Also, an employee stock option plan was ratified, wherein a maximum of 5 per cent of issued and subscribed equity share capital will be put under the scheme, which will be executed through a welfare trust under preferential allotment basis, the release said. The AGM approved selling off 60 per cent stake in General De Confetaria, Dabur’s joint venture with Agrolimen of Spain, to exit the gums business.The other decisions ratified in the AGM include the approval for dilution of DIL’s 49 per cent stake in Excelsia Foods, a joint venture with Osem of Israel and formation of another joint venture with Antonio Puig for the Samara range of cosmetics. The decisions on existing joint ventures as well as getting into new ones confirm to the recommendations of management consultants McKinsey, appointed last year to streamline Dabur India’s varied businesses.McKinsey identified branded formulations, natural gums, cosmetics and other “marginal” brands like Level and Dental Care (oral care brands) as areas DIL needed to get out from. It suggested that DIL
retain its core competencies in ayurveda and
healthcare.Accordingly, the company is also looking for
multinational joint venture partner for its branded
pharmaceuticals. The joint venture should be in place by
March 1999. |
Car security system launched CHANDIGARH, Sept 9 — Mr Umesh Deshpande, Managing Director, Autocop (India), today launched Autocop- XS, a remote controlled car locking system priced at Rs 3950-4950, for sale in Haryana, Himachal Pradesh and Chandigarh. Autocop manufactures car security systems in technical collaboration with Kenwoo Ind. of Japan at Nasik. The company is now working on a tie-up with Maruti Udyog, Hyundai, Daewoo Motors and Telco etc. for installation of security system in luxury cars. The company did Rs 20 crore business last year. The company also launched “Autocop remote car power window” (priced at Rs 6,000-12,000) for the first time in India. By using a remote control
one can roll glass windows up and down.Addressing a press
conference here Mr Deshpande said his company would soon
launch home security system. |
Gold imports from UK rise 507 pc NEW DELHI, Sept 9 (PTI) — Gold and silver imports into India from the United Kingdom rose by a massive 507 per cent in 1997-98 to Rs 1,360 crore compared to Rs 224 crore in 1996-97, according to the Directorate General of Commercial Intelligence and Statistics (DGCIS). As a result, India’s trade deficit with the United Kingdom increased sharply by 260 per cent to Rs 1,118 crore during the year compared to Rs 311 crore in 1996-97.While India’s exports to the UK were estimated at Rs 7,578 crore, showing a growth of 4.28 per cent, imports from the UK were valued at Rs 8,696 crore, representing an increase of 14.75 per cent. The total volume of trade
between the two countries was estimated at Rs 16,274
crore, registering a lower growth of 9.63 per cent
compared to 12.97 per cent in 1996-97. |
Ficci: cut expenditure CHENNAI, Sept 9 (PTI) — The Federation of Indian Chambers of Commerce and Industry (Ficci) has said the government must reduce its non-plan expenditure while stepping up plan outlays. “There is strong need for a paradigm shift in the government expenditure. This is necessary to provide a kickstart to the economy which is faced with a serious demand slump,’’ chamber President K.K. Modi said, while delivering the 25th Frank Moraes memorial lecture here today. Pointing out that the plan expenditure of the Union Government formed only 4.28 per cent of the gross domestic product (GDP), Modi called upon policymakers to increase it to at least 6 per cent. This should be done by
increasing outlays for public works, housing and
infrastructure, even if it would result in a slight
increase in the fiscal deficit, he added.Such
governmental investments would lead to a multiplier
effect giving rise to further investment of three to four
times the size of public expenditure. |
Markfed plan to set up vodka, Basmati units BATALA, Sept 9(PTI) — Markfed Chairman Jagdish Singh Walia said here today that Markfed would set up a basmati rice mill at a cost of Rs 4 crore in this industrial town. Talking to reporters here,
he said Markfed would also set up a vodka distillery unit
in collaboration with certain non-Indian residents(
NRIs). A delegation of Markfed led by Cooperation
Minister Punjab Ranjit Singh Brahmpura, and including
Managing Director G.S. Sandhu would visit Holland, the
UK, the USA and Canada to conduct a study in this regard
next month.Markfed would also set up terri-towel, potato
processing and vacuum free dryer units in the state. |
Shareholders agitate at CESC AGM CALCUTTA, Sept 9 (PTI) — The shareholders of CESC Limited, the RPG-Group controlled Power Utility, today blamed the management for “inefficiency” which led to a situation of net loss of Rs 115 crore for the year 1997-98.Venting their frustration at the company’s decision to skip dividend payout for the year, the shareholders expressed anguish at the way the company had borrowed resulting in a high interest burden. At the company’s 20th annual general meeting here, the shareholders demanded the removal of state government nominee and CPI (M) Parliamentarian, Dipankar Mukherjee, from the Board of CESC. They alleged that the government nominee always failed to turn up at the company’s AGMs.Replying to shareholders, CESC Chairman R.P. Goenka said the loss had occurred due to non-revision in tariff rates, and during the last 47 months, there had been only 2 per cent revision in tariff. The operating costs had become unbearable for the company, he explained.He also lamented that the vexed issue of fuel surcharge was yet to be resolved. However, Goenka expressed hope that the company would see profits in 1998-99.The CESC Chairman admitted the delay in completing the second unit Budge Budge plant, and added that the unit would be put into stream at the end of current financial year. IFCI issue opens today NEW DELHI, Sept 9 (PTI) — The Industrial Finance Corporation of India (IFCI) plans to mobilise Rs 200 crore through private placement of its preference shares opening for subscription tomorrow. The preference shares will be placed with banks, state financial institutions and various provident funds. The shares will have a coupon rate of 10.75 per cent with a maturity of five years. The interest rates will be free of tax. The preference shares, will be listed in leading stock markets. The issue will close on Monday. Usha Beltron downgraded MUMBAI, Sept 9 (PTI)
— Crisil has downgraded the outstanding ratings of
Usha Beltron Ltd and also removed it from the rating
watch.The company’s Rs 20 crore non-convertible
debenture issue and fixed deposit programme have been
downgraded to A- from AA- following its merger with group
company Usha Martin Industries Ltd (UMIL). |
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| Rahul Bajaj NEW DELHI, Sept 9 (TNS) — Bajaj Auto Chairman and Managing Director Rahul Bajaj has been unanimously elected Chairman of the Council of the World Economic Forum. The council members include E. Neville Isdell, CEO, Coca-Cola Beverages, USA, Kim Woo-Choong, Chairman Daewoo Corporation, Korea, and Kenneth L. Lay, Chairman and CEO, Enron Corporation. In 1982 Bajaj Auto became the first company from India to join the World Economic Forum.” I am pleased at the confidence my fellow council members have shown in choosing me to be the Chairman”, Mr Bajaj said. Monsanto denial Confed Air France Forex rates Gold falls |
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