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| Sunday,
June 10, 2001, Chandigarh, India   
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Advani releases IT, biotech policies
Chinese goods threat to Punjab units subsides
Snooping eyes in your PC
LSE to start trading in derivatives |
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Ease lending norms for SSI
units Canara Bank net profit rises 21
pc Uco Bank nets 33
cr
by A.K. Sachdeva
Lawyers and consumers at
loggerheads
Smoke signals
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Advani releases IT, biotech policies Shimla, June 9 Mr Advani was speaking at the valedictory function of the Shimla Knowledge dot com and IT and BT exhibition and business summit here today. He said that Himachal possesses great advantages which could help it in its foray. IT and BT. It is one of the most beautiful states in the country with huge potential for tourism much of which is still untapped. Use of IT could help greatly in harnessing this potential to benefit domestic and foreign tourists, the hotel and travel business and the management of its tourism centres. IT can specially help in making tourism sustainable and eco-friendly. The valedictory function was marred by sudden rain which forced the organisers to curtail it. He said that the Central Government had fully recognised the strategic importance of Information Technology and Biotechnology in nation building endeavour and the Prime Minister, Mr Atal Behari Vajpayee, has given the insightful and inspiring slogan to the nation. “IT is India’s Tomorrow”. Some people have slightly modified that phrase to — “BT is Bharat’s Tomorrow” to convey the promise of Biotechnology in the new century, he added. He said that one of the first major initiatives of the government, upon assuming was to set up a National Task Force on IT. The task force prepared a blueprint for India’s progress in software development, exports, manpower training and also in the hitherto neglected area of hardware design and manufacturing. It also pointed to the huge potential before India in the emerging area of IT-enabled services. Based on the recommendation of the Task Force, the government for the first time created a separate ministry of IT. Mr Advani said that the shining successes of Indian IT entrepreneurs in India and also of those Indians who have been working in silicon valley and elsewhere in the USA, have
greatly heightened India’s reputation globally. He said that the past three years have been the center and the state governments working in tandem to promote IT in different parts of the country. He stressed for attracting private investors and promoters with a prove experience in higher education and also explore the prospects of collaborating with reputed educational institutions in India and abroad. The Chief Minister, Mr Prem Kumar Dhumal, speaking on the occasion said that the state government had set up separate departments of information and technology and bio-technology to give boost related to these two vital sectors. He said that Nasscom’s has projected that IT software and services industry in the state of Himachal Pradesh could grow at an accelerated pace to achieve an annual revenue of Rs 20,000 crore by the end of this decade. Mr Gulab Singh Thakur, Speaker, Vidhan Sabha, Members of Council of Ministers, Chairmen and Vice Chairmen of various boards and corporations and senior officers of state government were present on the occasion among others. Earlier, Mr Advani was accorded a rousing welcome on arrival, prominent to receive him at Anandale Heliped were Dr Suraj Bhan, Governor, Mr Prem Kumar Dhumal, Chief Minister, Speaker, Vidhan Sabha, Mr Gulab Singh, Mr Vidya Sagar, Agriculture Minister, Mr Rajan Sushant, Minister of State for Revenue and Bio-Technology, Mr Hari Narain, Minister of State for Town and Country Planning, Mr Jai Kishan, President, State BJP and Mr A.K. Puri, DGP. Mr J.P. Nadda, Health Minister and Mr Ravinder Ravi Minister of State for Technical Education accompanied Mr Advani from Chandigarh.
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Chinese goods threat to Punjab units subsides Chandigarh More than the Chinese threat, however, it is the slowdown of the economy triggered by a number of factors, including post-liberalisation increased capacities and cut-throat competition, both in the indigenous and international markets and decline in demand which have created a crisis situation in the industrial and business sectors. This situation has resulted in closure of a number of industrial units, particularly small-scale and ancillary units in the state. The latest to suspend operations is the Mohali-based colour picture tube manufacturing unit, employing a work force of around 1500. A sharp fall in picture tube demand, financial problems and expiry of the sales tax exemption granted by the Punjab Government are the main reasons for the suspension of operations of this colour picture unit. The state government is reportedly examining the whole issue to find a solution. According to Mr Ramesh Inder Singh, Principal Secretary, Industries, Punjab who has held a series of meetings with industrialists associations of the State, the Chinese goods are, no doubt, much cheaper than the Indian products. But their durability and quality are poor. For Indian consumers, they are turning out to be one-time buy items. A specific example of how the Chinese goods are not meeting the requirements of the Indian buyer is provided by the cheap Chinese bicycles, which at one time had virtually caused a panic among Ludhiana’s cycle manufacturers. Since the imported cycles are made of comparatively light material, they are not durable and do not meet the needs of the Indian buyers who prefer sturdy stuff, of which Indian cycles are made of, to last longer. Nevertheless, Ludhiana’s cycle manufactures are now trying to modify their own product to bring down their prices and weight but without compromising durability and quality. Mr Ramesh Inder Singh told IPA that these and other factors would not allow the threat posed by the cheap Chinese goods to become a “sustained threat” to the Punjab industries. He said that the State government was making efforts and was also urging the industrialists to upgrade technology to become competitive. Besides, industrialists organisations also must become watchdogs to report about the dumping of foreign goods in the wake of removal of quantitive restrictions on imports under the WTO stipulations to enable the government to take remedial measures. The government had already set up a WTO cell in the State Industries Department to monitor the developments. Mr Singh disclosed that the State Government had taken up with the Government of India the issue of import of acrylic yarn from Korea, China and some other countries through Nepal. Acrylic import through Nepal was creating a crisis in the state’s yarn manufacturing and allied industries. The Stage government wants the Centre to seek necessary changes in the Indo-Nepal treaty so that only those goods, which are manufactured in Nepal, were allowed duty-free import into India. Nepal should not be allowed to be used as a channel for the import of goods manufactured in other countries.
IPA
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Snooping eyes in your PC New Delhi, June 9 Snooping eyes can now be installed in your PC and you may never come to know about. Even if you did, you cannot remove it. The private eyes inside the computer, eBlaster, introduced in the country works in a super stealth mode, monitors, records each and every key movement, secretly sends organised reports to specified e-mail and it also takes screen snapshots. “eBlaster is about getting people to use their PCs responsibly and appropriately,” said Mr Umesh Gupta, MD Softalk Technologies, which has introduced the software in the country. The software has been developed by Spectrosoft of Florida. According to a survey 83 per cent of the employees who have access to a computer, misuse it for visiting unsolicited websites, chatting, playing games, drafting personal letters, resumes or watching the latest cricket scores. “It is like setting a camera inside the computer, monitoring everything...it compiles and reports to the specified email address,” Mr Gupta said. He said the software runs on a super stealth mode to ensure that it is completely hidden from anyone except the user. It will not appear in the windows system tray, task manager, or in the add/remove programmes menu. eBlaster recording are protected by chosen hotkeys and advanced password protection. The software is flexible and allows one to specify the times and days of the week to record activity and send reports. It works with all kinds of Internet connection — modems, cable modems, DSL and LAN. The software monitors all computers and only not those connected to the Internet. “eBlaster will not automatically connect to the Internet, if a scheduled report is due to be sent and the computer is not connected to the Internet. The software would delay the delivery of the report until it detects an Internet connection has been made,” he said. This part of the stealth operation of the software is designed to avoid possible detection of the programme by the user of the computer being recorded. He said: “Some people may call eBlaster spy software package. However, we advocate letting the child or employee know their actions are subject to being recorded.” “It is not about invading privacy. It is not about trying to catch someone doing something, they should not be doing. It is about getting people to use their PCs responsibly and appropriately,” he said. In the USA, 75 per cent companies monitor their employee’s computers and is fast spreading to the home segment.
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LSE to start trading in derivatives Ludhiana, June 9 He was talking to the mediapersons after the seminar on ‘Trading in Derivative Products ’ held here today. The seminar was jointly organised by the LSE and Master Capital Services Limited to create awareness among the brokers and investors about trading in derivatives. Mr Dhingra disclosed that the SEBI has agreed to provide tickets for trading in derivatives to small exchanges after getting a security of Rs 1.20 crore. The sub-brokers would have to buy a ticket for Rs 7.5 lakh to trade in derivatives. The LSE would buy a ticket from BSE or NSE initially. Mr R.C. Singhal, president, LSE, while inaugurating the seminar, said,“
There is a lot of potential in the derivatives market. The investors will have less risk as compared to earlier trading. The chances of financial scandals will be also less in the new system of trading.” Mr Prashant Bhatnagar of NSE made a detailed presentation on the ‘Index Futures and options.’ He pointed out that due to lack of centralised control and transparency, the forwards trading has been banned. Now the investors would be able to trade in ‘futures’ and ‘options’ only. Regarding the trade in ‘options,’ he said, “The buyers of the options will have a right to buy a specified quantity of the shares at a price on exercising the option on or before the expiry date of the contract. However, to obtain this right the buyers will have to pay a premium to the seller.” Mr T. Venkat Rao, Manager, NSE, Mr Manjit Singh, Executive Director, LSE and Mr Harjit Singh Arora also participated in the seminar.
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Ease lending norms for SSI
units IT
is an irony that the SSI sector which is the most vulnerable to the threat of competition is being treated very harshly by banks. Lending has been made very restrictive by imposing unmanageable conditions. Those who are availing bank credit are being charged interest which is not justified by any standard. Working norms are almost the same as for larger and comfortable units although working conditions are widely different. Through erroneous rating norms SSI units are charged interest from 3 to 4 per cent above the PLR. On the other hand, the banks are talking of lending on sub PLR. This is sheer discrimination with the SSI sector and is a sure recipe to make them fall behind competition. To make the matters worse quantum service charges are abnormally high with least guarantee of service. Rating norms include current ratio; Total Outside Liability (ToL)/Tangible Net Worth (TNW); Profit before depreciation; Interest and Tax (PBDIT); Profit after Tax (PAT)/Net Sales; Return on Capital employed; Inventory and receivables/Sales. Apart from higher interest borrower can be denied extended finance if the lower ratings make him fall below the hurdle level. Some major banks have 8 categories for this purpose and level below 5 is not considered permissible to extended finance. Service charges are also too high by any standard. The banks mainly S.B.I. charges recital charges of Rs 10,000 for any documentation. For instance if one offers property for mortgage he would have to shell out Rs 10,000. this charge is invariably applicable to all borrowers with limits above Rs 25 lakh. Processing charges have been increased from Rs 100 per lakh of limit to Rs 250/lakh per year. This is too high without any justification whatsoever. Upfront fee of 1 per cent is charged on term loan. There is an interesting observation here. Earlier banks used to get refinance from SIDBI which was beneficial to borrowers as interest rate got reduced. The banks used to keep 0.25 per cent of this fee with themselves and pass on 0.75 per cent to SIDBI. Now banks hardly get any refinance from SIDBI. Even then they are charging upfront fee of 1 per cent without passing any amount to other agency. This is quite unfair. Cheque collection charges and DID mode are too high. Some efficient banks ensure collection within one week. This is almost a norm. Banks charge 1 per cent interest for using their money for one week. This translates into much more than “Pathan rate of interest”. No bank gives credit without collateral security. An interesting anomaly lies here. If a borrower grows in business over a period of time his property to be offered as collateral does increase accordingly. So far all purposes his growth is stuck at a particular level. Logically borrowers’ credibility built over years should ensure finance without collateral security. Larger units with requirement of several hundreds of crores obviously can’t offer matching security. Similar treatment should be given to progressive SSI to ensure their healthy growth. The banks should consider unsecured loans from members of family and friends as quasi capital. This will ensure their working ratios under rating norms. The banks do not consider credit of salaries and interest charged on the capital of partners as part of profit. This is unfair. This also reduces the ratios under ratings. The banks should rationalise the norms which match the working of SSI unit at average norms. Too much of risk aversion is not business. Some risk always remain even if the rating is very high. So risk perception which is out of tune with reality should not make the working of the SSI units unmanageable. |
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Canara Bank net profit rises 21 pc Bangalore, June 9 Cmd, R. V. Shastri told a news conference after a meeting of Board of Directors, which adopted the balance sheet, that global business (deposits and advances) had increased from Rs 71,548 crore to Rs 86,901 crore, an increase of 21.5 per cent. Global deposits recorded 23.1 per cent growth to reach Rs 59,070 crore and global advances (net) 18 per cent to touch Rs 27,832 crore. Operating profits amounted to Rs 1,131 crore, as against Rs 923 crore during 1999-00, a 22.5 per cent growth “This growth has been after accounting for an additional expenditure of Rs 175 crore towards the amortised cost of special VRS and outgo of Rs 64 crore towards leave encashment under the scheme”, Shastri said. The capital adequacy ratio, as on March 31, 2001 improved to 9.84 per cent compared to 9.64 per an year earlier. Gross NPA declined from Rs 2,334 crore to Rs 2,243 crore, bringing down ratio from 9.47 per cent to 7.80 per cent. Net NPA ratio also showed a decline from 5.28 per cent to 4.84 per cent.
PTI |
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Uco Bank nets 33 cr Kolkata, June 9 “The Rs 33 crore net profit comes after providing Rs 140 crore for voluntary retirement and staff-related provisions,” Chairman and Managing Director V.P. Shetty told reporters here. The banks operating profit increased by a 21 per cent to Rs 214 crore after accounting for VRS-related amortisation and if that was not taken into account, operating profit growth would have been a whopping 50 per cent, Shetty said. Shetty said they were in talks with Birla Sun Life, HDFC Standard, LIC and quite a few other insurance companies for marketting their products. “Once the regulation for corporatisation is clear then it will be better to talk about tie-ups,” he said.
PTI |
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by A.K. Sachdeva Q: We are registered as a dealer under the provisions of the Punjab General Sales Tax Act, 1948 and the Central Sales Tax Act, 1956. We are engaged in the business of purchase and sale of foodgrains and cereals. For the assessment year 1998-99, we filed our periodical sales tax returns with the assessing authority disclosing a turnover of Rs 35,40,500 on which payment of tax, if any due, was paid. Initiating proceedings under sub-section (2) of section 11 of the Punjab General Sales Tax Act, 1948, the assessing authority alleges that the returns furnished by us are neither correct nor complete. It has been stated in the notice that we have suppressed turnover during this period and thus we have avoided payment of tax. The assessing authority relies upon the information allegedly received from the office of the Marketing Committee. What we think is that the information of the Market Committee is not true and therefore no reliance can be placed upon it by the sales tax authorities. Kindly advise if the assessing authority is entitled to proceed with the case without proving the truthfulness of the information? Whether we are entitled to have the opportunity of cross-examination to get at the truth before the information allegedly received from the market committee is acted upon? — Rakesh Trading Co., Sangrur A: It is a well established principle of law that information received from a third party cannot be straightaway used by the sales tax authorities unless the person sought to be proceeded against is provided with an opportunity of hearing including cross-examination of the witness. Therefore the assessing authority is duty bound to ensure that opportunity of cross-examination is extended to the assessee before the information gathered from the market committee is relied upon for the purpose of levy of tax etc. The queriest is well advised to make an application in writing to the assessing authority requesting specifically for the opportunity of cross-examination of the witness on whose statement the returns furnished are sought to be rejected. The attention of the assessing authority can be invited towards the well known decision of the Supreme Court of India that is reported as 39-STC-478. Q: Kindly let us know the position of a registered dealer under the provisions of the Haryana General Sales Tax Act, 1973 selling tax paid goods in the course of inter-state trade or commerce as to whether he is entitled to claim the benefit of adjustment of tax? — M.L. Sharma, Hisar A: The state Government has recently promulgated a notification in exercise of the powers conferred upon it by sub-section (5) of section 8 of the Central Sales Tax Act, 1956 to the effect that the tax paid at first stage within the State would be adjustable towards the tax liability on inter-state would be adjustable towards the tax liability on inter-state sales of such goods. However no refund of the excess amount of tax paid at first stage would become permissible. It may be recalled here that the provisions of rule 24-A of the Haryana General Sales Tax Rules, 1975 providing for the adjustment of tax paid at first stage or refund of tax have since been admitted from the statute book and as such the
adjustment, if any, would henceforth the governed by the notification issued under section 8(5) of the Central Act which comes into operation from February 12, 2001. |
co
by Pushpa Girimaji Lawyers and consumers at loggerheads AS expected, the reaction from lawyers to the proposed changes in the Consumer Protection Act restricting their appearance before consumer courts has been swift and sharp. Besides condemning such a move, they have reportedly threatened to go on a countrywide agitation against it. It’s a pity that the lawyers have decided on this course of action because I am sure they will get neither support nor sympathy for their cause. Even within the legal fraternity, I am sure not all lawyers are inclined to put self interest before everything else and would see reason and logic behind a very positive step meant to protect the interests of consumers in the country. In fact the amendment bill introduced in the Rajya Sabha on April 26 is not keeping lawyers out of the consumer courts altogether as was demanded by consumer groups. It is only restricting their presence by permitting the engagement of legal practitioner by an opposite party only if the complainant himself or herself is a lawyer or hires a legal practitioner or has no objection to the opposite party engaging one. This, I think, is a very reasonable restriction. However, to understand the purpose behind the proposed amendment, one must go into the basic objective underlining the CPA, which is to provide consumers with a parallel justice system which, unlike the regular courts, is affordable. Since the biggest burden on a litigant before the regular courts is the lawyer’s fee, when the CPA was drafted, every effort was made to keep the procedure before the courts simple, so that a complainant need not engage a lawyer. The composition of the consumer courts was also structured to ensure the simplicity of the adjudication process. While the judicial member saw to it that the disputes were resolved in accordance with prescribed rules of law, the non-judicial members were to prevent excessive technicality in the administration of justice. However, the courts turned out to be far different from what was envisaged under the law. The procedure before many of these courts became highly technical and there were too many adjournments granted at the behest of lawyers. The judicial member and lawyers played a dominant role and the consumer was totally out of his depth in these courts. Worried, the Consumer Affairs Ministry at the Centre sponsored a comprehensive study on the working of these courts. The report submitted by the Indian Institute of Public Administration after studying the working of these courts in five states only confirmed what consumers were saying about them. The report said the atmosphere in some of the district forums did not appear to be conducive for a consumer to put forward his case in an informal manner. The whole proceeding appeared to be formal and “court like” and this discouraged the consumers from arguing their own case as they felt that it would be better for them to engage advocates to get the decisions in their favour. Advocates were found dominating in many of the forums and only a few consumers were found arguing their own cases. The report also quoted consumers as saying that lawyers had made the redressal system expensive. This and other studies by consumer groups also highlighted the opinion of consumers that the entry of lawyers had put them at a disadvantage in a forum meant for them. The dominance of black coats made them nervous and when pitched against top lawyers hired by opposite parties, they found the battle to be unequal. Imagine the plight of the consumer when the lawyer representing the opposite party advances a lengthy argument on how certain procedures in the Civil Procedure Code must prevail to fill the grey areas in the CPA! Following these reports, the government took some corrective steps. It got the IIPA to conduct workshops for non-judicial members to help them participate more actively in the process of dispute resolution. The biggest complaint in many of the district forums was that the judicial members and the lawyers completely ignored the non-judicial members. Since in some cases the selection of non-judicial members unsuitable for the job also contributed to the problem, the government also tried to impress upon the state governments to select only those candidates capable of handling the work. The consumer courts were also told to move away from technicalities and to redress complaints without giving adjournments. But all these did not bring about the desired results. As consumer courts began to resemble regular law courts in every respect, the government saw reason in restricting the presence of advocates in these courts. But consumer courts have become a great source of revenue for lawyers and they are not going to accept it so easily. And being a powerful lobby, they will try their best to dissuade the government from going ahead with this particular amendment. But will consumers allow them to have their way? This is a battle worth watching! |
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Allahabad Bank Ebony showroom Biotech boom Milkfed Remson group ICICI Bonds Nova Petro CII seminar |
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