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Sunday,
May 13, 2001, Chandigarh, India  
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No question of reversing reforms: PM
Broker owing 1 cr eludes investors
Trade fair: how they do it in China Delhi School
of Business centre in city |
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Washington accord may
hit Indian engineers It’s time for ‘Badla’ to go Montek Singh to be
EVO Director
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No question of reversing reforms: PM New Delhi, May 12 “There cannot be any change in the direction that India has adopted for itself. The need of the hour is to further strengthen the national consensus for reforms...” the Prime Minister said while inaugurating the golden jubilee international seminar of the National Sample Survey Organisation here today. Saying that a broad consensus on the economic reforms existed already, Mr Vajpayee added that the process of economic reforms was initiated by a Congress government. It was later carried forward by two United Front governments. In different ways, state governments ruled by various political parties are also pursuing economic reforms of their own. “Thus, there is a broad consensus on the need for reforms for achieving faster and more balanced growth” he added. Lauding the role of the statistical organisation, Mr Vajpayee said it was often said a picture is more powerful than a thousand words. The same is true of numbers. In this regard he pointed out the survey which revealed that there has been a reduction of as much as 10 percentage points in the poverty ratio from 36 per cent in 1993 -94 to 26.1 per cent in 1999-2000. This shows that the economic reforms initiated in the nineties are beginning to achieve the desired results of poverty elimination. The advantage of an autonomous body like the NSS was that its survey could not be termed as partisan. Since the economic reforms programme had started yielding the desired results like reduction in the level of poverty, there was no need for questioning the basic direction of reforms process. “We may have to fine-tune our policies and programmes based on our experience of the past decade. We certainly should correct the mistakes, wherever mistakes become apparent. We should effectively respond to changes in the global economic environment to defend the nation’s interests”, he said. It was important to identify the specific economic and social factors, which have contributed to the reduction of poverty in the nineties. This would help accelerate reforms to achieve a further significant reduction in poverty by the end of this decade, Mr Vajpayee said. The Prime Minister said the results of the employment and unemployment survey of the NSSO have also corroborated the essential soundness of economic reforms. They have revealed that the unemployment rates among the educated in rural and urban areas have come down since 1993-94. The reduction in the unemployment rate is more pronounced amongst women in both rural and urban areas. “These are the kinds of successes on which we must build on in the coming years”, he added. Andhra Pradesh Governor and Chairman of the NSSO, Dr C.Rangarajan, said the system lacks a comprehensive and strong Statistics Act as the present collection of Statistics Act, 1953 was weak. |
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Broker owing 1 cr eludes investors Chandigarh, May 12 The investors, meanwhile, are planning to move SEBI for action against the firm, but are reluctant to approach the police or talk openly to the press. The Managing Director of the company, it is learnt, is in Ludhiana but could not be contacted despite repeated attempts. When this correspondent visited the local branch office of the company, a few investors and one of the ex- employees who had come to enquire about his due salary were present in the premises. They said the details of accounts and one computer had already been taken away, and they are in the process of taking the other things also. More than 30 persons were trading through the Sector 8 based Manmohan Gandhi Share and Stock Broker. "For the past nearly two months, we have been trying to contact him through the manager of the local branch office who is in constant touch with him in Ludhiana", said an investor who claims that the firm owes him and his family more than Rs 6 lakh. The investors said the MD had told them that he had suffered heavy losses due to the share market crisis. Another investor alleged that the firm had been irregular with payments for the past several months , "though he used to be very particular when it came to collection". The last payment received by one of the investors was in the last week of March, which they say acted as a ray of hope that the remaining payments would also be done. "However, we are getting merely assurances and the share dealer owes at least Rs1crore to people here", said another investor on the condition of anonymity. The firm did not give any contract notes (mandatory for registered firms) to its clients after transactions. "We are not even sure if the company was registered with SEBI or not". A contract note, bears details of transactions done between the broker or sub broker and the investor. This note, in violation of SEBI's guidelines, is at times avoided with a view to saving on tax. The MD, said the sources, is also the Director of a firm HK Finance and
Capital (which has an NSE ticket) , and two companies were floated by him and some of his family members. A few investors said they had met him at Ludhiana (he has offices in Ludhiana, Jalandhar and Ambala cantt) where they were assured that he would make the payments in instalments. The manager of the local branch office said: "The office might be closed shortly, but we may continue". Regarding the amount due to the investors shedenied the allegations saying no amount was due. However, she refused to contact the MD and comment on other issues. |
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Trade fair: how they do it in China IN the past 20 years of being in the international trade I have been to several international fairs. But the one I attended in China recently was quite unique and interesting. The moment you land in Hongkong, it was written all over about the fair and how to complete the formalities. You could submit your passport for the visa to China at the airport itself and collect it the same evening from any of China travel offices in the city centre. The same office had all the information about the trains, buses or coaches to go to Guagzhou, the city in China where this fair was held. You could book your ticket or hotel here. It’s amazing to see the pace of development in China. The high rise buildings, the beautiful airport, first class five star hotels and everything that the West has. The roads are well marked and traffic moves smoothly. The automat machines at the airport and the stations to change the currency make life easier for a traveller plus saves time. The moment you reach the hotel in Guagzhou, there are free coaches available to take you to the fair. One doesn’t have to wait in a long queue for registration. You are given a free CD ROM covering all participants and products of the fair. What a massive fair it was! From a pin to a plane, whatever that country produces was displayed in the fair. Such a wide display of products is rare to see. It was the most wonderful presentation of the “one-stop-shop” concept. For retailers nothing can be better than finding all products under one roof. The fair attracted millions of visitors from all over the world. Here are some of the highlights of the fair: 1. Thanks to worldwide promotion, everyone seemed to know about the fair. 2. Easy availability of the visa. 3. Simple ways of hotel bookings to suit all budgets. 4. Warm welcome feeling all over the city. 5. Easy registration for the fair. Visitors often dread wasting time on waiting. 6. No payment to get the directory about the fair. It was high-tech available on the CD-ROM. 7. Computers installed all over the fair to surf and search products you need to see. 8. The wide range of products included consumer goods, electrical, electronics, food, machinery, medicinal products, jewellery, textiles, readymade garments, ceramics and pottery. 9. Each exporter had a beautiful catalogue about his company & the product. Maybe it was mandatory to have one. 10. There was an English-speaking person at each stall. 11. Each visiting card had e-mail address and the website so you could know their company and products. It may not sound very important but when you are catering to the international community simple things that make them comfortable matter. There was an excellent cooling system inside the halls so everyone felt comfortable. People were extremely courteous & polite and I think that’s the culture of the East. Let me take the liberty to compare this fair with the ones we have in our country. We have several export promotion councils that try to do their own promotions & in the process the impact is diluted. If the government takes the initiative to make it a national event to promote all our products together it will have a tremendous impact. When we have several fairs at different dates, many buyers can’t travel so many times in a year. Our fairs are for a short duration of three to four days only & if the dates don’t suit someone they just have to forget the fair. We don’t give special travel benefits or attractive hotel rates as part of the promotion as each agency works independently without thinking of sharing the benefits. We don’t provide any free information about the fair, its participants or commuting facilities to the foreigners who can place millions of dollars worth of orders. It may not cost them much, but everyone likes some perks. Despite being such a talked about I.T. country we don’t provide any self-search system to visitors which could save a lot of time. There is need to promote Indian exports in a more aggressive manner as the product strength and the variety we have to offer to the world is rare to find anywhere else. It’s only a matter of better management. The writer is a Director, Amans Atlantic Limited |
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Delhi School
of Business centre in city Chandigarh, May 12 This centre will fulfil aspiring candidates from the region to qualify for an internationally accredited degree in Master of Business Administration in International Business. Successful candidates will be awarded MBA from Maastricht School of Management , the Netherlands. Addressing a press conference during the inaugural ceremony, Mr B K Sharma, Director of the Chandigarh chapter, said the centre will commence in September this year. MAT written test for this centre is scheduled for June 26. On completion of one year, students of Chandigarh and Delhi centre will travel together to Netherlands for the convocation, said Mr Sharma. |
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Washington accord may
hit Indian engineers Chandigarh, May 12 The accord has been signed by certain engineering organisations in Washington to put a check on the employment of engineers in their countries from the non-signatory countries. This accord will certainly hamper the movement of engineering graduates from India who go in a big number to Western countries for better job. Revealing this, Dr Udesh Kohli, India Representative, UN Secretary General, in New Delhi, said engineers of the countries signatory to the accord would only be eligible for employment in the member countries after April 1, 2004. Dr Kohli was here to speak at the Northern Regional Convention of the All-India Management Association on the topic "Implications of the WTO on Indian Business" held in the CII convention centre. He was trying for the formation of Engineering Council of India, an umbrella organisation of all engineering groups in India, to prepare the case to be a part of the Washington accord. Otherwise, the Indian engineers, not certified as engineers under the Accord, would be ineligible for employment in the member countries. Though the implementation of the WTO agreement has opened up the world market creating more avenues of employment but the measures like the Washington accord could defeat the spirit behind the WTO. Earlier, Dr Aquil Busrai, Executive Director of the India and SAARC Countries, Motorola Limited, said India would benefit most by the WTO. Supporting the WTO outrightly and forcefully, he said there was no need to be scared by the agreement. As India was a biggest producer of intellectual labour force, it would be having a tremendous opportunity for employment of its men in knowledge and services based sectors. Indian Industrialists should learn to stand up on their legs without the government support. As the WTO has become a reality, protectionism would no more be able to save the Indian industry and its owners. They would have to compete and prove their competency. Instead of being scared by the cheap products from China, South Korea and elsewhere, try to reverse the trend by producing further cheaper but quality items to create scare in China, he said while urging the Indian industrialist to face the challenge boldly and intelligently. Dr G.S. Kalkat, former Vice Chancellor of PAU, said "our real problem was that 66 per cent population engaged in agriculture had only 25 per cent share in the gross domestic product while the remaining 34 per cent had a share of 75 per cent. There was a need to shift about 25 lakh hectares from paddy and wheat crops to oil seeds and pulses of which India was the largest importer. But it was a difficult task as in the wheat and paddy surplus states like Punjab, Haryana, western Uttar Pradesh, suitable varieties were not available for growing oil seeds and pulses. It would take 7-8 years to prepare suitable varieties of pulses and oil seeds for irrigated areas. Mr Dharm Vir, Secretary, Food and Supplies, said there was a need of time-bound action plan to face the challenges of the WTO. Dr V.S. Sheshadari, a Joint Secretary in the Ministry of Commerce, who deals with the WTO, told The Tribune, the "war room" which had been created a few months to keep a close watch on the imports and dumping of goods from abroad under the garb of WTO agreement, had tightened up the system to collect statics in this connection. Earlier, it used to take eight to nine months to collect the relevant data about imports and it was a long period to react to any adverse situation created by excessive imports but at present the data was collected within a month or so. Everything was now online. Earlier, Lieut General J.F.R. Jacob, (retd),Governor, Punjab and the Administrator of the Union Territory, Chandigarh, inaugurated the seminar and Mr G.S.Deep, Chairman of the Chandigarh Chapter of the Management Association, welcomed him. Those who addressed were Dr K.N. Pathak, Vice Chancellor, Panjab University, Dr ( Col) P.K. Vasudeva, Mr Harpal Singh, Dr Naresh Kumar and Dr A.
Sahay. |
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It’s time for ‘Badla’ to go COME July 2 we will usher in a new paradigm in which the weekly settlement will be history and the home-grown “Badla” system, which was recently (rather inappropriately) re-christened BLESS (Borrowing and Lending Exchange Settlement System), will take its final bow. It is “Badla” that has provided the much-needed liquidity in our system. The system has had its drawbacks but many would argue that it was never a badly conceived product and that its failure was more a result of poor regulation than anything else. Nevertheless the guiding principle in discarding the system, i.e., the removal of the futures element in the cash market is sound. But the moot question is that can the markets, which have seen so much of battering, will survive without Badla. I think the weeding out of Badla will be beneficial for the long-term growth of the markets, but in the short term banning Badla could kill an already comatose markets. So what are the options that the Securities and Exchange Board of India has? In my opinion, SEBI should enforce rolling settlement with the daily carry over facility in the top 200 scrips from July 2 for a minimum period of three months. This will serve three purposes. First it will make the settlement uniform for those scrips on all exchanges, which means if a trader wants to carry over a scrip from one settlement to another he cannot avoid paying the margin. Earlier the traders used to avoid paying margins by shifting positions from the Bombay Stock Exchange (BSE) on Friday to The National Stock Exchange (NSE) and back to BSE on Tuesday, this probably was the biggest malaise in the system. Secondly, it will give SEBI time to develop and educate the small investors about arcane things such as Options and Futures, which obviously small investors are not aware of. Thirdly, and it is the most important factor, it will give time to SEBI to see what kind of circuit limits scrips need to be set up on the bourses. The current 16 per cent, limits either side will lead to utter confusion in rolling settlement scenario, because it is normal for a scrip to hit the 16 per cent filter during the course of the day leading to leaving a lot of positions uncovered. Suppose a trader has gone short (selling at a higher price and buying back at a lower price) on a scrip which hits the 16 per cent upper filter (a situation where there are only buyers and no sellers) in that case it will be impossible for him to cover his position. Similarly, if a trader has gone long (buying at a lower price and selling at a higher price) in a scrip which hits the 16 per cent lower filter, he will not be able to bail himself out by selling the shares. Moreover increasing the circuit limits beyond 16 per cent would increase the volatility and hence the risk. So during the course of these three months SEBI can decide on what circuit limits need to be developed to suit the Indian markets under a rolling settlement regime. |
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Montek Singh to be EVO Director New Delhi, May 12 “Ahluwalia has accepted the offer of the IMF’s Executive Board and will become the first Director of the Fund’s independent evaluation office (EVO) effective from August 2001,” an IMF release said today. The IMF Executive Board, which had approved setting up an independent EVO on April 2000, decided to offer Ahluwalia the position of EVO Director on April 13, 2001, it said. The EVO Director is required to report all the findings of the unit to the IMF Executive Board. A former Finance Secretary, Ahluwalia is currently a member of the Economic Advisory Council to the Prime Minister. Mr Ahluwalia has also worked at the World Bank.
PTI |
Why stamp duty is evaded THE rate of stamp duty imposed under the Indian Stamp Act is highly irrational. Evasion of stamp duty by way of under-hand and under-value sales in property transactions, is a naked truth. The revenue authorities fix the minimum rates of land and property for the registration purposes to check this evasion. As per Section 47A(1) of the Indian Stamp Duty Act 1899, it is illegal and ultra-vires to fix a price for the purpose of calculating stamp duty for registering documents. Still this practice prevails in contravention to various court orders. As per the Act, it is mandatory for the registering authorities to register documents as put up before them for the registration with the consideration money as settled between the seller and the buyer. In a landmark judgement, the apex court of the country accepted the writ petition of Mohabir Singh and others by declaring the guidelines and instructions issued by the district collectors about fixing the minimum price of agricultural/urban property for registering purposes as illegal and ultra-vires of Section 47A(1) of the Indian Stamp Act 1899. In a similar order in 1990, the Punjab and Haryana High Court quashed similar orders of the State of Punjab with cost and later in 1996, the Full Bench of the court quashed such guidelines and instructions issued to the registering authorities by the Deputy Commissioners. These guidelines are totally indifferent to ground realities. As a rough calculation of sample study, value of a Sector 17 showroom measuring about 400 sq yds calculated at the price fixed by the revenue authorities, for the calculation of stamp duty, comes to Rs 2 crore, which is different from the actual market value, particularly when the building is in possession of some tenant (as is the case in almost all buildings) at a nominal rent of a few thousand rupees a month. The assessment of actual market value of the property depends upon various factors such as annual rental return, kind of litigation in case of disputed property and location of the property. Only logical way, of assessing the amount of stamp duty for the registration of a property, should be based upon the amount actually settled between the seller and the purchaser. However by rationalising the rate of stamp duty to moderate and practically feasible level the authorities may be able to get the same or even more revenue collection, besides checking drastically the generation of black money. At the same time they are also saved from indulging in the illegal practice of arbitrarily fixation of property prices for the purpose of registration. |
Courts to impose fee on complainants THE best thing about the consumer justice system today is that it is free. But it will not remain so for long if the government goes ahead with the proposal to impose a complaint fee. As against regular law courts that symbolise delays and huge expenses for the litigant, the consumer courts promise a system of consumer justice that is free of any court fee, besides cumbersome and time-consuming procedures. But today, the government has sought to change this basic character of the consumer courts and introduce through the Consumer :Protection (Amendment)bill, a provision that will make it possible for consumer courts to impose a fee on complainants. The proposed amendment says: “Every complaint filed under sub section (1) shall be accompanied with such amount of fee and payable in such manner as may be prescribed”. According to the Ministry of Consumer Affairs, this is meant to help state governments earn some revenue for running these courts and once the amendment is notified, it will work out an appropriate and graded fee structure. As of now, the thinking is that complaints where the value of goods or services in question and the compensation sought is above Rs 50,000, the complainant should be asked to pay a fee . Now if one looks at the data compiled by the Ministry of Consumer Affairs, the total number of cases filed before all the consumer courts in the country put together — the National Commission,32 State Commissions and 569 District Forums — comes to over 16 lakh cases in the last 15 years. In other words, on an average, roughly over one lakh cases are being filed annually by consumers before these courts. Now out of these, most complaints of high value in terms of the amount involved are filed by commercial establishments or large companies. Once the proposed amendment is notified, all complaints pertaining to services hired for commercial purposes would be outside the ambit of these courts. And that will leave only a small percentage of cases of ‘high value’ on which a complaint fee can be imposed. Such cases filed before all the consumer courts in the country would not be more than 10 per cent of the total number of cases or roughly 10,000 cases per year. The revenue earned from this small number would not really amount to much, particularly when one considers the cost of maintaining the records of such receipts. So why impose it all? Also, once such a provision is introduced in the Act, then there is sure to be a demand from state governments for imposition of fee on all consumers and subsequently to increase the amount at regular intervals. That would certainly not serve consumer interest. Besides, these courts were constituted to provide consumers with a justice system that was free of cost and charging a complaint fee would alter this fundamental concept. If at all state governments want to earn some revenue for running these courts, then it would be far more logical to make a provision in the Act that would empower the consumer courts to direct the opposite party found guilty of providing deficient service or defective goods, to pay the courts too, costs. The government can prescribe a specific formula for working out the costs for this purpose. If you look at the amendment bill, the government has come up with a number of proposals to expedite the adjudication process. Since adjournments given by the courts were leading to delays, the amendment has specifically mentioned that no adjournment should ordinarily be given and where given in special circumstances, the court should justify it through a speaking order. It has also provided for the courts to award costs to the complainant for the inconvenience caused on account of such adjournment. Similarly, in order to ensure that the court proceedings do not come to a grinding halt in the absence of the President, the amendment provides for the senior most member to act as President. At the district as well as the state level, consumer courts consist of a President and two members. At the national level, the court consists four members besides the President. Another new provision is for admission of complaints filed before the court. That is, within 21 days of filing a complaint, the court has to scrutinise it and either admit or reject it. And once admitted, it cannot transfer it to any other court or tribunal. The court also cannot reject a complaint without giving the complainant an opportunity of being heard. The amendment also prescribes a period within which notice is to be issued to the opposite party and complaints decided. In short, all these amendments are a reiteration of the government’s commitment to provide speedy consumer justice. The proposal to impose a complaint fee on the other hand, runs contrary to the promise that it would also be free. |
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SBI deposit Bon Ton |
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