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| Saturday,
July 7, 2001, Chandigarh, India   
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Punjab
opposes decentralised procurement CII for
boosting Indo-Pak trade ties
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SBI to
provide liquidity against US-64 units Bring
Ludhiana on international air map ONGC
raises stake in Cairn Energy
Haryana
Fin Corpn comes out of red India to
gain by China’s entry into WTO
Badla
— old habits die hard
Fiji
financial records missing
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Punjab opposes decentralised procurement New Delhi, July 6 The Standing Committee of Union Ministers and Chief Ministers of 10 states, constituted in May at the behest of Mr Atal Behari Vajpayee, to find out ways to bring down the rising subsidy bill on account of handling foodstocks in the country, decided to continue with the present centralised system till a consensus is evolved on the issue. The Centre’s view was that the decentralised food procurement system (DFP) would make procurement more efficient and reduce wastage. It cited the examples of Madhya Pradesh, West Bengal and Uttar Pradesh where the scheme was successful. The Punjab Chief Minister, whose state contributes the maximum quantity in the Central pool, said decentralised procurement should not be imposed on any state. The state agencies did not have the wherewithal and the resources to undertake such large scale procurement and the Food Corporation of India should be in the picture. He felt the FCI should be made more efficient. Mr Badal said only those states which are ready to introduce DFP on their own voluntarily should do it. Agriculture Minister Nitish Kumar, who is the Convener of the committee at the meeting, said: “The present system of procurement through the FCI and the mechanism of minimum support price will continue, but the states wanting to introduce DFP will be encouraged.” Though it had been agreed to continue the centralised system till a consensus with the states was evolved, efforts would be made to convince the states about the benefits of the DFP. He allayed fears that decentralised procurement would put a heavy financial burden on the states. The states would be given the necessary funds and assistance to switch over to the DFP. Punjab was joined by Maharashtra and Kerala which said steps should be taken to make the FCI efficient rather than dispense with its services. Maharashtra Chief Minister Vilasrao Deshmukh said the DFP can be viable only in case of surplus and self-sufficient states and food deficit states cannot undertake the responsibility of procurement for public distribution system. Food Minister Shanta Kumar, who has been the force behind introducing the DFP scheme, said the Centre would strive to remove apprehensions about the proposal among the states and build a consensus on the issue. Mr Yashwant Sinha, in his concluding remarks, said there was an urgent need for enlargement of foodgrains procurement in view of bumper harvests and the states and the private sector have to play a major role in it. The committee also discussed the need to continue the food for work programme
wherever necessary. It was decided to constitute a committee under the chairmanship of the Rural Development Minister to review the programme.
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CII for boosting
Indo-Pak trade ties New Delhi, July 6 The need to forge sound bilateral ties with Pakistan further emphasised in the emerging context of the world economy and new international economic order, where countries
within regional groups are found to be taking steps towards promoting trade within their neighbours. The CII has suggested a four-pronged process to accelerate confidence building measures, encourage mutual sourcing, remove infrastructural and logistic inadequacies and improve connectivity to forge
economic ties with Pakistan. The CII said business communities of the two countries have expressed that the existing environment does not favour a situation of steady growth in bilateral trade. Ascribing political factors as major deterrents for enhancing Indo-Pak trade and economic cooperation, CII has recommended formal institutionalisation of a Joint Parliamentary Conference as a first step towards building confidence between the business communities on both sides of the border. Another important measure to forge a relationship of trust and optimism will be to explore holding bilateral summits of Economic Ministries at regular intervals. The CII has also stressed that the government of Pakistan should encourage investment in Pakistan by the India enterprise and work towards removing all non-policy hurdles. The CII said “Buying From Pakistan” was an important aspect for taking forward the economic relationship between the two countries. However, it should not be viewed as concessional arrangement, and should instead be viewed from the angle of pure commercial advantage, the chamber said. In the interest of broad-based industrialisation and widening the export basket, it has stated that the Government of Pakistan needs to encourage the Pakistani enterprises to import from India all their requirement of raw materials, intermediate goods and components.
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SBI to provide liquidity against US-64 units Mumbai, July 6 There has been panic among the 20 million investors of US-64, particularly the small investors, following the July 2 announcement of UTI to freeze the sale and repurchase of the US-64 units for six months. Individuals can avail a loan of up to 60 per cent of the face value of the units from the bank branches, an SBI release said. The maximum loan amount could even go upto Rs 20 lakh for units in demat form, it said. The bank has not made the terms of financing more stringent and loans would be given on the same terms and conditions as applicable to financing against shares and debentures, SBI added.
PTI
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Bring Ludhiana on international air map Chandigarh, July 6 The British Airways has approached the state government to put Ludhiana on international air circuit provided it is allowed to use the air strip to fly civilian aircraft. The state government is keen to link Ludhiana with London via Delhi. Bringing of Ludhiana on international air map can open new avenues of development for the state. As air transport facility is not available in the state from Delhi, multinational companies avoid to make any sort of investment in Punjab. Raja Narinder Singh, Punjab Civil Aviation Minister, told The Tribune that he had also taken up the matter with Mr Sharad Yadav. Mr Yadav had promised to help the state government. Besides, the Union Government has also been requested to allow the Uzbekistan and Turkmenistan airlines to start flights to Toronto from Amritsar. Both these airlines fly to London from Amritsar. As these flights have become very popular with Punjabis, the government wanted to extend this facility to Punjabis living in Canada. Raja Narinder Singh said both airlines make 14 sorties from Amritsar in a week. The minimum waiting period to get a seat in these airlines is one month. Mr Yadav has also been requested to put Chandigarh on the international circuit. He said Mr Yadav agreed with the state government that for the development of modern industry in this region, there was a need of a proper air transport service. Mr Yadav had his reservation about putting Chandigarh on the international air circuit because it was not viable, it is learnt. In Halwara, Amritsar and Chandigarh required infrastructure is available to start the international flights. There is a very good airstrip at Halwara air base and and also at Raja Sansi airport. The government is also examining the case to renew contract with Pawan Hans for hiring its helicopter for some more time. Earlier lease signed with this company ended recently. He said the government had also got some better proposals this time. One company has offered to provide a helicopter with airconditioned and sound-proof cabin facility. The proposal to set up the state civil aviation authority is also stuck up for want of funds. Four clubs have six aircraft in running condition. There are 22 trainees with these clubs to learn flying. Raja Narinder Singh said he had sought a grant of Rs 1 crore from the Punjab Government to make clubs viable for all times to come.
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ONGC raises stake in Cairn Energy
New Delhi, July 6 “ONGC has hiked its stake from 10 per cent to 40 per cent in the Lakshmi oil find in the CB-OS/2 oil and gas block in Gulf of Khambat,” Cairn Energy India Pty Ltd Executive Director Rich Paces said. Subsequent to increase in stake by ONGC, Cairn Energy’s equity in the field has come down 50 per cent from 80 per cent previously. In the three-way joint venture, British company, which is the operator of the field has an 80 per cent interest in the consortium, ONGC 10 per cent and Tata Petrodyne 10 per cent. However, ONGC has an option to increase its stake by 30 per cent if a commercial discovery is made. Cairn Energy’s stake would then be reduced to 50 per cent, Paces said. When contacted a senior ONGC official confirmed increasing the stake. “We have studied the extent of oil and gas reserves in the four discoveries made so far by the joint venture and have decided to increase stake in the Lakshmi find.” The consortium plans to invest $ 200 million in developing the block. It is planning to drill around 11 wells in the block during 2001, company sources said. Cairn Energy led consortium has made four hydrocarbon discoveries in the block where 3D seismic survey has been carried out on the 1,500 sq km block.
PTI
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Haryana
Fin Corpn comes out of red Chandigarh, July 6 While stating this here today, Commissioner and Secretary, Industries and Chairman, HFC, Mr S.C. Chaudhary said that the corporation had adopted various liberal measures during the recent past in order to smoothen the flow of financial assistance to the entrepreneurs. He said that a number of investor friendly initiatives have been taken for the benefit of industrial units in the State. He said that consequent upon an amendment in the State Financial Corporation’s Act, the Corporation could now provide financial assistance for a wide range of activities as a result of which the Corporation had introduced various schemes viz., scheme for commercial complexes, shopping malls, scheme for financing IT sector related projects, scheme for vocational training institutes, technology upgradation scheme for textile industry and scheme for financing of activities relating to marketing of Small Scale Industries products. Further, ceiling on project cost under National Equity Fund Scheme (NEF) of SIDBI had been raised from present level of Rs 25 lakh to Rs 50 lakh. He said that under this scheme, soft loan assistance upto maximum of Rs 10 lakh is made available to the borrowers at the rate of 5 per cent service charge per annum. Mr Chaudhary said that there was an upward trend in the overall portfolio of the corporation. He said that the sanction of loans by the corporation had increased from Rs 88 crore during 1999-2000 to Rs 127 crore during 2000-01. Further, during the year 2000-01, the Corporation had disbursed loans to the tune of Rs 55 crore, he added. He said that in order to improve the recovery and to help the borrowers who are in crisis due to financial crunch, liquidity problem and prolonged industrial recession, the corporation had introduced one time settlement scheme and adopted modified RBI scheme for recovery of dues relating to Non-Performing Assets (NPAs). He said that the corporation had also re-introduced the scheme of clearance of default in one go under which the penal interest outstanding against the borrower be waived if the borrowers opt to clear 50 per cent of the overdue amount by May 31, 2001 and the balance 50 per cent by March, 2002 in equal monthly instalments along with instalments falling due in between. He said that these schemes had helped many ailing units to tide over their financial problems, reduced corporation’s NPAs and as a result the corporation recovered more than Rs 400 crore in the last two years. |
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India to gain by China’s entry into WTO New Delhi, July 6 And, in case of disputes, the efficient WTO dispute settlement mechanism could be invoked without affecting bilateral ties at the political level they say. “China’s presence in the WTO will help India to bargain better with regard to several provisions like trade-related intellectual property rights, FDIs and trade in services as we face similar problems relating to these issues,” says Professor N.S. Siddharthan of the Institute of Economic Growth. Discounting fears that Chinese goods would flood the Indian market with Beijing’s entry into the WTO, Siddharthan says, “China not being a member of the WTO has not affected its trade with India. By and large, India is not discriminating against China. Therefore, China by becoming a member might not radically alter the situation.” “It is in India’s interest to have China as a disciplined member of a rule-based organisation sooner rather than later,” says economist Jairam Ramesh. “New Delhi should take a leadership role in ensuring that China becomes part of the multilateral trading system in the next six to eight months, says Ramesh, who is also Secretary, Economic Affairs of the Congress. The World Bank estimates that China’s entry into the WTO will accelerate economic growth at the global level. China’s share in world exports will double in five years from the present 3.7 per cent to around 7.3 per cent and imports from 3.4 per cent to 7.2 per cent. Doubling of China’s external trade will be complemented by opening up of hitherto closed sectors of its economy like telecommunications, financial services and technical and professional services to external investors. China, the 10th largest trading nation in the world with volume of annual international trade estimated at $ 470 billion is keen to join the organisation. Negotiations over the entry, however, have been dragging for 15 years mainly over the issue of Beijing’s classification as a developed or developing country. Four other counts on which China’s integration into the multilateral trading body stands delayed pertain to differences over anti-dumping laws, trading rights to foreign companies, safety regulations and service sector. China may not become a member before 12-15 more months, observes Ramesh. Ramesh, who was on a 10-day visit to China recently on a programme drawn up by the Chinese government to educate the National Peoples Congress and Peoples Congress members on the WTO says “For the Chinese entry into WTO is not an economic necessity, not just part of an economic modernisation programme .... It is a statement of politics with the forces to bring China into the mainstream within the framework of international law.” Pointing out that the WTO is not about trade, but about trade law — rules and regulations that govern the conduct of international trade, Ramesh says: “Most people in India do not recognise that.” The WTO dispute mechanism is well-established and disputes can be resolved expeditiously without invoking bilateral ties. Like other countries, including India, there is no monolithic view on the WTO in China, there are some who have reservations about joining it, Ramesh said at a presentation on the subject here recently. China’s Ministry of Foreign Trade is in the forefront to bring China into the WTO. Comparing India’s trading system with China’s, Ramesh observes, “the Chinese have liberalised far more than Indians.” Referring to the propaganda by some sections in India that the country’s interests would be served if it got out of the WTO, Ramesh cautioned, “if we got out of the WTO and renegotiate, price extracted from us would be far more than what we are willing to pay.”
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by Ashok Kumar Badla — old habits die hard Historical evidence indicates that every time the much flouted and abused ‘Badla’ system has been banned thus far, it re-emerges stronger. However, this time around, it does seem to be curtains for ‘Badla’ and the Indian markets are onto ‘Options and Futures’ trading which is the norm in most international markets. While we have received a lot of invitees to seminars on the latter topic, methinks its an exercise in futility as it will be a while before the retail investor even understands the system and I personally believe that any such new system is best explained a practical backdrop rather than a theoretical one. The fact that most pivotal stocks have moved into the rolling settlement mode has triggered a shift to non-rolling stocks. Now doesn’t it this suggest that as far as we. Indian investors are concerned, suggests that old habits die hard. One of the beneficiaries of this development has been the media sector stocks. There is no denying the fact that the media and entertainment segment in India is a potential multi-bagger. However, whether that potential gets translated into actual performance at the bourses is a million-dollar question. Since we track IPOs and their postlisting performances for around a year quite closely, we have a fair insight into what is lacking among the major companies in this segment — It is corporate governance! There is no organised or professional management set-up worth the name, and this is one of the prime reasons why these stocks get a lower discounting than their figures seem to suggest they deserve. Now, this is not really surprising, because in the absence of the corporate governance factor, the financial figures put out by the company also lack credibility. Take for example a media and entertainment company that made a fairly high profile IPO not so long ago and whose soap operas are very popular on television. Its share price had sky-rocked on listing though the buzz on the street was that it was the crowned market manipulator of that day and time who was behind the zooming share-price. The reason — well, it seems that he had bailed out the IPO on the last day by pumping in big bucks to complete the subscription formalities. Of course, that manipulator is now hopefully headed to where he deserves to be, but the buzz on the street is that the company’s latest guardian angel (!) is none other than the original scamster. It does seem that the company and its management are itching for trouble, and when one does that, it comes along and not in small quantities at that but in a flood. Moving on to the anecdote, it seems a leading analyst visited the company and was amazed to find strangely dressed men and women sprawling all over the company’s premises and corridors and even in the lifts. Boy, he though — talk about capacity utilisation. He walked up to the entrance and was asked what he wanted. He said he was there to meet the CEO. The retort was — “Aisa koi serial nahin hain”. Shocked the analyst sputtered the name of the CEO, only to be asked whether he was an actor or junior artiste and in which serial he was acting. Needless to say, the shaken analyst knew when he was beaten and beat a hasty retreat. Doesn’t this remind you of a famous fable you had been told as a kid, one titled ‘Alice in Wonderland’? |
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