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| Sunday,
April 1, 2001, Chandigarh, India   
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EXPERT’S COMMENTS
Share trading falls 80 pc in the region
Coop bank to start telebanking Unions keep vigil on Markfed |
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Industry welcomes
Exim policy Ketan
always let money do the talking Vaiseshika
gets ISO 9001
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EXPERT’S COMMENTS The Minister of Commerce announced Export Import policy for 2001-02, which is in continuation of the five-year policy which has been in existence from 1997 onwards. The Commerce Minister acknowledged the role of exporters in nation building and complimented them for achieving a growth of 18 per cent during the current financial year. The impact of these developments will be felt during the new financial year’s
economic trend. His vision is to achieve 1 per cent of the world trade share by 2004-05, i.e. to reach $756 with the growth rate of 18 per cent for the next three years. This can be achieved through export and import friendly schemes, availability of export finance at international rates of interests through a safer institutional mechanism and continuous improvement of infrastructure at ports etc. Procedural simplification with regard to the working of the DGFT has been highlighted and it has been done especially with reference to issuance to of import licences through electronic filing and online processing and they must be strengthened. Strengthening of the Annual Advance Licensing Scheme and Advance Licence is a welcome step. The issue of high transaction cost that the exporters have to bear has been raised time and again and it is good to note that the Minister acknowledged this in his address. The Minister has also acknowledged that the exporters have genuine demand with regard to export credit, withdrawal of Income Tax benefits under the 80HHC. We are
concerned that no concrete suggestion has been put forward for compensations for example the concern over the market access initiative, which was announced previously. We hope that this time, it will really pick up and be more actively pursued. For the first time the
involvement of the state governments actively in developing the trade, especially in the agro-sector, is being emphasised and this will have a faster trend towards integrating more players in the main stream of India’s international trade. A group of ministers is at present involved in evolving a long-term agricultural export policy. It is a good initiative but must be done with in a specified timeframe specially for
foodgrains. The applicability of the duty exemption and the EPCG scheme for the agro- sector is also a welcome step. While the farm to port approach in the agri- economic zones and the processed agri-export policy is a very good thinking but it requires major infrastructure support to farmers and mandis. In terms of godowns, food transportation and refrigeration and preservation. We would need to give access to our farmer to a prompt information system regarding basic price of the produce in the national and international level etc. Business-cum-Trade Facilitation Center and trade portal is an appropriate initiative especially in view of the fact that more and more business will be done through e-commerce. For this purpose, active participation of industry along with the authorities concerned and regular meetings on the key issues must be held to enable quick action. The new provisions and facilities which are offered through the special economic zones, like the option for them to bring back their proceeds in 365 days and retain 100 per cent of proceeds in the EEFC are welcome steps. While the support to the EPCG is much needed we propose that 100 per cent exporting units which are not registered as 100 per cent EOUs should also get the same benefits to support them. The Minister announced the removal of the QRs on the remaining 715 items and with this we now join the rest of the world except the four countries in which QRs still exist. The Minister is quite optimistic that there will not be surge of imports with the complete removal of the QRs based on the fact that the non-oil imports have so far witnessed a
negative growth. But the government must lay more emphasis on strengthening BIS so that cheap and spurious goods do not enter the market and can contribute towards developing competitiveness of the Indian manufacturers. The government has initiated steps which are to maintain a system of checks and balances to ensure that the real players of the country have a definite comfort level. Measures like the imposition of the safeguard duties, imposition of temporary QRs and the anti-dumping authority are well in place. Along with liberalising the trade regime in India the government is putting in place an early warning system, has constituted a standing group with all key bureaucrats functioning as a war-room for
tracking, collating and analyzing data specially on the 300 sensitive items. Lastly the Minister compared India to China which I feel is not a realistic comparison. This is specifically with regard to the rules and regulations that are presently in practice in China concerning labour laws specially in the SEZs. The Indian industry needs many new proactive policy initiatives to really give the industry its cutting edge. The author is the Chairman of the International Trade Committee on Exim policy |
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Share trading falls 80 pc in the region Chandigarh, March 31 In LSE, which has 298 brokers with 140 working, hardly 10-15 are doing some business. There are around 30 terminals (connected to NSE, BSE or CSE) in Chandigarh, Panchkula and Mohali, where trading is done, the market that used to buzz with activity has suddenly become sceptical and is witnessing an extremely cautious trader who does not want to indulge into buying or selling. “Though we have not come across cases where brokers have defaulted, however, officially atleast five brokers have closed their business”, said Mr Tarvinder Dhingra, Vice-President, LSE. The number of brokers who are not getting any business these days is infact much more, say the brokers. Huge losses have been suffered though neither the brokers nor the investors are willing to come forward to reveal the same. In the city alone, which is home to mainly service class people, there are big investors who indulge into a one time trading between Rs 50 lakh and one crore. According to market sources, the maximum individual losses in the region on account of decline in the value of scrips, have been more than Rs 60 lakh. The city brokers, however, thank their cautionary nature which has helped most of them survive through the excessive volatility which was witnessed for the first time in last 7-8 years. “The unexpected crisis has given a lesson to the brokers to be even more careful”, says Mr Sanjay Tandon, a leading city broker. The brokers, he says are much more vulnerable than the client and stand very high chances to loose. Trading is all a matter of reliability and most of the orders which are given to the brokers are a verbal deal. In such case, an upswing while means more orders placed with the broker, a decline which has been very sharp and sudden this time, has seen those placing order moving out and refusing to take the responsibility of the deal. This leaves the broker , who purchases once he gets the order, with no other option than to suffer losses. “Though we do exercise caution while finalizing the deals, it is only is only in terms of credibility which the client has”, says Mr Ranjan Chawla, MD, Competent Group. He, though unwilling to disclose the identity of his client, cited a case where one of his clients, enjoying a reputed position in the city’s whos who circle, backed out after placing an order worth lakhs. It is learnt that, at one point of time atleast 60 per cent of the terminals here were out of operations due to defaults in payments. Distress sale of the major scrips is being witnessed in the market, though ofcourse those expecting the market to recover do say ‘it is the buyers time’. Though losses which traders or investors here have suffered are not even 10 per cent of what those in major stock exchanges suffered, there is a need to be more organised and careful, advise the market experts. That the broker should not compromise on payment terms, he should also take care to complete all the formalities well in time, apart from, ofcourse, being cautious about the selection of buyers, the brokers opine. So far as the buyer is concerned, they say that while the possibility of losing in the market cannot be ruled out, a seasoned investor who buys according to his capacity does not stand to loose much.
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Coop bank to start telebanking Shimla, March 31 Stating this here today Mr K.K. Kaushal, Chairman of the bank, said the introduction of telebanking would enable customers to carry out monetary transactions from one account to the other through telephone. They would be able to pay electricity and water bills telephonically using special codes. The banks which went online last month, would also start Internet banking over the next four months. Mr Kaushal said the bank had entered an arrangement with Mastercard and Bank of Punjab for launching its debit and credit cards shortly. Its ATM facility would also become functional over the next fortnight at the main branch and the Secretariat branch. Referring to the performance of the bank he said the net profit was set to cross the Rs 30 crore mark during 2000-01 as against the previous year’s profit of Rs 24 crore. During the past 30 months the deposits of the bank had taken a quantum leap from Rs 650 crore to Rs 1,150 crore. More than 100 loan schemes had been launched as a result of which annual advances had shot up from around Rs 25 crore to Rs 150 crore. The non-performing assets, which stood at 35 per cent three years ago, came down to 16 per cent last year and were likely to be less than 10 per cent this year. Similarly the capital adequacy of the bank was as high as 19 per cent as against the norm of 8 per cent. The recovery percentage had
improved from 30 to 85 per cent. There was no irregularity in purchase of computers and the project for switchover to online banking was assigned after following the due process. In fact, by not pursuing the proposal approved by the previous Board of Directors the management had saved Rs 6.25 crore in the project.
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Unions keep vigil on Markfed Chandigarh, March 31 Union sources in Markfed told TNS that the two government nominees, the Financial Commissioner, Cooperation, Mr K.S Janjua, and the Principal Secretary, Finance, Mr K.R. Lakhanpal, were not even sent a notice of the meeting. So they did not attend. At the meeting, the Board shot down an item (number 7) on wheat export. It ruled that the Managing Director (at present Mr D.S. Bains) should not be authorised to send officers/officials on foreign tours. The Board, however, appreciated the efforts for the export of wheat made so far. The frequent foreign visits of the officers and officials of Markfed, particularly the present Managing Director during the past 18 months at Markfed’s expense, was a topic of hot discussion. How much benefit actually accrued to the organisation was another matter though a justification, thereof, was on record. Mr Bains alone made over half-a-dozen trips to several countries stretching from Sri Lanka to the USA, Canada, South Korea, the UK, Dubai, Oman and the UAE invariably to participate in “food festivals”. It is pertinent to mention that several officers and officials of Markfed had made numerous visits abroad since July 1997 till date at the cost of Markfed. As per the Senior Accounts Officer (Salary), these trips have cost Markfed a whopping Rs 71,83,912. Another purpose, besides attending “food festivals” was “for setting up of agro-based industrial products” or “attending grain council conferences”. The foreign jaunts statement of the Minister of Cooperation, Mr Ranjit Singh Brahmpura, (a copy is available with The Tribune) virtually reads like Markfed’s “Who’s Who” ever on the move abroad. The agenda note (item 7) mentioned that the Union Ministry of Consumer Affairs and Public Distribution had declared Markfed as a canalising agency for exporting wheat on the same terms and conditions as applicable to several other agencies. The validity of this sanction, granted on March 5, was till March 31. Another agenda item, number 6, that was likely to snowball into a controversy, though approved by the Board, pertained to the installation of machinery and equipment to update the existing machinery in Markfed’s HDPE plant at Anandpur Sahib for fabrication of polythene covers for the storage of wheat during the coming procurement season. A proposal to this effect had been considered earlier as well but was rejected by the competent authority. It was likely to meet the same fate again, the sources disclosed. What really caught the attention of the Markfed unions smelling stink was item number 10, seeing the Board’s approval to contribute Rs 2 crore to the Punjab Chief Minister’s Relief Fund out of the Cooperative Education Fund/Cooperation Development Fund/Common Good Fund. The Board, either out of ignorance or goodwill, approved this. But, the unions maintained this was an improper act. The fund(s) out of which Rs 2 crore was sought to be siphoned to the Relief Fund was “statutory” and “non-discretionary”. If at all markfed wanted to contribute to the Relief Fund, it should do so from its “unattached profits” shown to be Rs 9.40 crore or so. Any diversion from the listed sources in the agenda was “illegal”. Though the agenda note explained that similar contributions were made in the past as well out of the Cooperative Development Fund and the Common Good Fund , the Registrar, Cooperative Societies had disagreed with the system. He had stated this could be done subject to the condition Markfed should restore and fully provide for the Cooperative Development Fund out of profits for 1998-99 and subsequent years.
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Industry welcomes
Exim policy New Delhi, March 31 President of the Federation of Indian Export Organisations (FIEO), K.K. Jain said while the intention of the policy is good, unless the transaction cost of 18 per cent to 20 per cent is reduced to reasonable levels, it would be difficult for exporters to withstand international competition. Mr Jain also expressed concern that nothing had been done in respect of the exporters plea to extend validity of the Special Import Licence. Besides there is no special benefit for the recognised status holders. Moreover, the imposition of the bank guarantee condition for regularisation of shortfall under the EPCG scheme, and charging of 24 per cent interest on such regularisation was quite disadvantageous for the exporters. The emphasis on agricultural exports, and setting up of Agricultural Export Zones, he said, “was refreshingly new in the overall thinking of exports in the country”. President of FICCI, Chirayu R. Amin said the massive emphasis on agricultural exports will altogether transform the agro-economy in the country and bring greater efficiency. “The Minister’s policy initiative in this regard is virtually tantamount to giving industry status to agriculture”, Mr Amin said. Expressing hope that a broad policy consensus emerges shortly and the new schemes are implemented without much delay, he said India should be able to raise its share in global trade to at least 1 per cent by 2004-05. President of PHDCCI, Sushil Ansal said giving primacy to agriculture exports which has particular significance for northern India, involving state governments in the export effort and simplification of procedures are welcome steps. With the removal of QRs, domestic industry faces competition with imported products and to meet the situation on a short term basis, Mr Ansal suggested that where the cost of imported product is less than 50 per cent of the cost of production of the domestic industry, certain triggering mechanism should be developed to restrict such imports. |
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Ketan always let money do the talking Mumbai, March 31 He schmoozed with India's captains of industry, political party leaders, elected politicians. And he partied with the glitterati of Bollywood, as India's massively popular cinema industry is known. Yet, incredibly, there are virtually no newspaper or magazine pictures, no TV news clips, of Parekh. And interviews are rare. In the absence of any public persona, the legend grew that Parekh was some sort of financial Wizard of Oz, working the levers of power always from behind a curtain. What's publicly known about Parekh isn't enough to fill an index card. A soft-spoken, bespectacled father of two, Parekh is a religious man who starts every day with a visit to the temple. A chartered accountant by training, he chose instead to carry on the family tradition of stockbroking. It was only three years ago that Parekh, then 35, began taking huge positions on his books, prompting one business paper to refer to him as a "one-man army" for his ability to move the market. Parekh spotted the boom in Indian software stocks early, and made his first paper fortune. His ambitions grew along with his purported wealth, which enabled him to begin functioning as a venture capitalist and merchant banker. The merchant bank he founded handled the initial public offerings (IPOs) of several companies in the media sector, which Parekh suspected would repeat the success of his earlier bets on Indian software stocks.
Reuters |
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Vaiseshika
gets ISO 9001 Chandigarh, March 31 Vaiseshika Electron Devices has been awarded the latest version of the ISO standard certification for the manufacturing of electronics and electrical calibration standards, which are essentially import substitutes and have been used in the most prestigious defence projects of India, like the light combat aircraft project of the Hindustan Aeronautics Limited; Satellite Launch Vehicle Project of the Vikram Sarabhai Space Centre and MIG and Jaguar aircraft of the Indian Air Force. |
co
by Pushpa Girimaji
Standards meant to protect consumers’ interests The government has finally realised the folly of removing pack size restrictions on certain goods of mass
consumption. In a reversal of its earlier decision, it has re-introduced standardisation in the volumes in which pre-packed or bottled mineral water and water can be sold in the country. As per the notification issued by the Ministry of Consumer Affairs on February 28, 2001, amending the Standards of Weights and Measures (Packaged Commodities) Rules, 1977, it is now mandatory for bottled or packed mineral water and drinking water to be sold only in certain prescribed standard quantities or volumes. These are 100 ml, 150 ml, 200 ml, 250 ml, 300 ml, 330 ml (in case only) 500 ml, 750 ml, 1 litre, 1.5 litre 2, 3, 4, 5 litres and thereafter in multiples of five litres. In other words, selling packed or bottled water and mineral water in any other volume than the ones prescribed constitutes a violation of the Standards of Weights and Measures Act under which the Rules are framed. The amendment came into force from March 29, 2001. Such standardisation is meant to protect consumers from being misled on quantity and thereby, price. Let me explain. Suppose there is no
standardisation of pack sizes or volumes, one manufacturer may sell say, 120 ml of water, another, 138 ml and yet another,142 ml. Most likely, the container size will be the same or
will seem to be of the same size, thus giving the consumer the impression that they all carry the same quantity or volume. Suppose all the three packs carry the same price tag, the package containing the maximum amount of water would be the cheapest, but a consumer may not realise it by looking only at the size of the container. That’s why while specifying the standard sizes, the government has ensured that there is sufficient gap between two sizes so that the difference in quantity is discernible to the consumer from the size of the pack. Absence of standardisation also gives manufacturers scope for manipulating quantity and price. Since price plays a very important role in the choice of the consumer, a manufacturer wanting to increase the price of his product may well keep the same bottle size and the price tag, but decrease the quantity. If the quantity is reduced from one litre to say 900 ml, most likely, the consumer will not notice it. Of course the volume or the quantity has to be specified on the package, but how many consumers read that or get to read it before every purchase? Even if they read the label, wide variation in pack sizes and prices makes it extremely difficult for the consumer to compare prices or calculate the unit price. It’s for these reasons that the Standards of Weights and Measures (Packaged Commodities Rules) 1977, prohibits the sale of certain commodities, except in such standard quantities as are specified in schedule 3 of the Rules. Prior to 1994, 38 commodities were listed in the third scheduled, which meant that all these goods had to be pre-packed for sale only in prescribed quantities. And the list included cereal products, baby foods, biscuits, cereals and pulses, coffee and cocoa, tea, cooking oils, salt, non-soapy detergents, cosmetics, hair oil, ice cream, jams, sauces, ketchups, aerated softdrinks and non-alcoholic beverages, spices, soaps, mineral water, toothpaste, spices, cement, paints, etc. Even though these were reasonable restrictions meant to protect the interests of consumers, some of the multinational companies interested in doing business in India reportedly expressed reservations about them. That was the time the government was bending backwards to get them to invest here and so it decided to re-examine the utility of standardisation of pack sizes in the context of the economic liberalisation policy. And sure
enough, 18 products were removed from the list. These included mineral water, cereal products, jams, jellies, ketchup, sauces, fruit juices, squashes, cosmetics, spices and ice cream. Now after nearly seven years, the government has re-introduced standardisation in the pack size of mineral water and has also added drinking water to the list. Thanks to the poor quality of water supplied by municipalities, the packedwater industry has grown enormously in the last seven years. And when the
Health Ministry notified, following consumer complaints, mandatory ISI quality certification for them, the Consumer Affairs Ministry also examined the effect of removing pack size restrictions. They were certainly not happy with what they saw: There were for example, packs of 130 ml, 135 ml, 140 ml, 165 ml and the difference in quantity was not distinguishable from the size of the container. Such size
variations also rendered price comparison difficult. Manufacturers are, however, positively unhappy with the notification and are lobbying hard for its withdrawal. Whether this time consumer interest will prevail depends on the counter pressure that consumers and consumers groups put on the government. In fact consumers should demand that the government re-examine its 1994 decision in respect of other 17 products too.
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by Praful R. Desai Vacant land Q: Does the suit plot fall within the meaning of the team ‘premises’? Ans: The S.C. in Kamla Devi v Laxmi Devi (2000 (2) RCJ 604) was considering the point. A combined reading of the definitions of the term ‘landlord’, ‘premises’ and ‘tenant’ shows that the terms ‘premises’ implies the subject matter of tenancy in respect of which there is jural relationship of landlord and tenant and in respect of which the quantum of rent is agreed to between them. When, in any case, the question arises, whether an open plot of land or a plot of land with structures thereon was let out, the Court has to determine the same on the facts of that case. In the instant case, the structure (latrine) was raised by the respondent unauthorisedly which was the subject matter of the earlier suit wherein mandatory injunction for demolition of the same was prayed by the appellants. The structure (latrine) admittedly does not belong to the appellant. It belongs to the respondent who can at any time demolish the same. While giving the suit plot on rent under compromise, the appellant agreed that instead of demolition, it might be used by the respondent. But the appellant did not acquire any right in the structure (latrine) constructed unauthorisedly by the respondent. From the terms of the compromise in earlier suit for mandatory injunction, it is evident that only the open plot of land measuring 9’x7’ was let out which does not fall within the meaning of the term ‘premises’ as defined in S.2 (i) of the Delhi Act. The building which was let out to the respondent is a different premises under a different agreement. The suit plot cannot be treated as part of that building, as a separate tenancy was created in respect of the suit plot under the compromise. It follows, said the S.C. that the suit plot does not fall within the meaning of the term ‘premises’ under the Delhi Act, and therefore, S.50 of the Act, outside the jurisdiction of the Civil Court will not be applicable to this case. Within the result, the S.C. held that the suit is maintainable.  |
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