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Tuesday,
November 26, 2002, Chandigarh, India  
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High fiscal deficit dangerous: IMF
Courier, Net hit postal dept’s growth
Impact of corporate scandal worse than September 11
Bike sales jump, scooter’s skid
Expedite amendment to SEBI Act: panel |
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Simplify rules to attract more FDI
Massive investments needed for 8 pc growth
BoB takes over Benaras State Bank
Increase rates on small savings: banks
BSNL opens Internet connections Qantas
acquires Air NZ stake Bajaj Elect to exit dye casting trade
No proposal to bifurcate SAIL: govt BHEL bags order
Alembic to unveil Italian products
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High fiscal deficit dangerous: IMF New Delhi, November 25 “It is not a time bomb. But high fiscal deficit has certainly posed danger of short-term risks to the economy”, First Deputy Managing Director of IMF Anne Krueger told newspersons here. She warned that the combined fiscal deficit of the country, which at present stood at around 10 per cent was not sustainable. “It ( high fiscal deficit) could stunt growth, push up inflation, harden the interest rates, crowd out private investment and choke government borrowing in the short term”, Ms Krueger said, adding that there were no instances where a country could sustain a fiscal deficit of 10 per cent of the GDP for too long. Ms Krueger was here to take part in the G-20 Finance
Ministers’ conference. While fundamentals of the Indian economy were strong, with low inflation and high foreign exchange reserves, an increase in the demand of investment would imply a rise in the interest rates.” As and when that happens, there will be crowding out of the private sector choking growth”, the Deputy Managing Director of the IMF said. Ms Krueger pointed out that there was no well-defined benchmark for foreign exchange reserves. “There is no ideal level and there is no rule that covers everything. That is a judgement that has to be made by the competent authorities”, she said. She did not lay down any specific policy prescription but said “how it is addressed, whether by reduction in expenditure or increase in taxes, is a political choice”. Ms Krueger acknowledged that economic growth had picked up in India since 1991 and it was important that measures were taken to achieve the objective of an 8 per cent growth. “We recognise that India has a higher rate of economic growth since it started reforms in 1991 and that is the way to go”, she said while expressing hope that the stalled disinvestment process would be revived after three months as indicated by the government.
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Courier, Net hit postal dept’s growth Chandigarh, November 25 According to statistics, the department has incurred Rs 1,500 crore losses during 2001-02 which are expected to remain almost at the same level this year. The Punjab circle suffered Rs 33.86 crore losses during that period. Department officials lament that approximately all rural branches of the department were running into losses, and with the implementation of the Fifth Pay Commission recommendations, the condition has deteriorated. Mr Vijay Bhushan, Principal Chief Postmaster General, Punjab & Chandigarh says: “We are continuously losing our core business of mail delivery with the progress of telecom Internet. However, we are trying to add new services to improve our bottomline such as e-post, collection of telephone bills, electricity bills and other consumer bills. But the circle may not show profit in the near future.’’ Insiders in the department blame the policy of the Finance Ministry for the present scenario. They feel had the government allowed the department to invest its deposits like other financial institutions, it could have turned into a profit making institution. Unlike the telecom department, the Centre had shown little interest in the department. The Department’s employees union lament that no recruitment had been made since 1984, resulting in deteriorating of services especially in the rural areas. Instead of working as bill and deposit collecting agency for other departments and the Central Government, it should be reorganised to strengthen communication network and tap the vast small savings in the rural areas. Mr Bhushan disclosed that the Punjab circle had collected Rs 338.20 crore through small saving certificates and Rs 5765.95 crore through other schemes by June 30, 2002. However, the share in the courier segment was on a decline. The Punjab circle was ranked at the fourth level, preceded by the Maharashtra, Delhi and Kolkata circles. After announcing the launch of e-post from next month the department has decided to launch e-post service from all head offices, he said. It has also planned to collect telephone bills of Spice and Connect services, distributing and collecting electricity bills through post offices that would start at Patiala soon. |
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Impact of corporate scandal worse than September 11 New Delhi, November 25 Speaking at a session of the India Economic Summit, Mr Premji said that the US GDP had reduced by 0.36 per cent and eight trillion of wealth has been lost with long term implications for the US and other economies. The common feature of all the companies with good corporate governance was that all of them “had systems in place”. In India, the issue needed to be addressed at three levels: regulatory, structural and cultural. It is important to establish common accounting standards, establish genuinely independent boards and having a set of well-articulated value system in the companies. “In the final count a culture, which respects integrity and right forms of acounting, is the key to success”, Mr Premji said. According to Vice-Chairman of Goldman Sachs Asia Mr Kenneth Courtis, investment bankers have to deal with many clients in the same sector, which may leade to several internal conflicts. These internal conflicts, Mr Courtis suggested, would have to be managed well in order to regain the confidence of the investor. Chairman and Managing Director of Bajaj Auto Limited, Mr Rahul Bajaj suggested that transparency and full disclosures were not just ethical issues but essential requirements for the survival of large corporates. While guidelines were
necessary, there was no substitute for good character, he said.
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Bike sales jump, scooter’s skid
New Delhi, November 25 A total of 28.76 lakh two-wheelers were sold during April-October, 2002, against 23.39 lakh vehicles a year ago, data compiled by the Society of Indian Automobile Manufacturers (SIAM) showed. Motor cycles and step-thrus went into overdrive clocking an impressive 40.3 per cent growth at 21.54 lakh units during the review period over 15.35 lakh units a year ago. This was led by Hero Honda Motors whose sales increased by 28.9 per cent to 9.81 lakh units. Bajaj Auto recorded a 34.7 per cent rise at 5.02 lakh units during the review period. Sales of TVS Motor Company jumped by a massive 87.5 per cent to 4.07 lakh units. This was due to rising sales of its 110cc model Victor. Yamaha posted a 42.1 per cent growth at 1.75 lakh units as its 125cc model Enticer caught the imagination of motor cycle enthusiasts. Sales of LML soared by 87.6 per cent to 42,320 units. The firm has been witnessing some sort of revival after rolling out 110cc motor cycle Freedom. Motor cycles having 75cc-125cc engines constituted the majority 87.3 per cent of the total sales at 18.81 lakh units while those having 125cc-250cc engines comprised 10.5 per cent at 2.25 lakh units. Motor cycle sales of Kinetic Engineering rose by 16 per cent to 30,389 units while that of Royal Enfield went up by 24.8 per cent to 14,381 units. Scooter and scooterette sales, however, skidded by 9.31 per cent to 5.17 lakh units during April-October, 2002. Sales of Bajaj Auto remained almost flat at 2.10 lakh units while Kinetic Motor and LML dived by 13.7 and 43 per cent to 60,719 and 46,191 units. TVS Motor, however, bucked the trend and posted a 8.5 per cent rise at 99,997 units while sales of Honda Motorcycle and Scooter India zoomed by a whopping 261.6 per cent to 75,115 units. Kinetic Engg and Majestic Auto recorded a rise of 51.8 and 68.6 per cent to 19,412 and 5,863 units. Scooters and scooterettes having less than 75cc and those having 75cc-125cc engines had posted 18.1 and 55.3 per cent growth in sales at 1.53 lakh and 1.73 lakh units. But those having 125cc-250cc engines suffered a 42.1 per cent decline to 1.90 lakh units which pulled down overall sales in this segment. Moped sales slipped by 12.4 per cent to 2.03 lakh units as all players recorded negative growth. Sales of TVS Motor plunged by 5.45 per cent to 1.44 lakh units while Kinetic Engg and Majestic Auto also went down by 37.1 and 9.7 per cent to 28,333 units and 31,525 units.
PTI
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Expedite amendment to SEBI Act: panel
New Delhi, November 25 “An appropriate amending legislation should be brought before Parliament in the interest of investors expeditiously,” the Parliamentary Committee on petition said in its report. Although the Mitra Committee, set up by RBI and SEBI, had insisted on a separate Investor Protection Fund, the Department of Company Affairs has felt no necessity of the legislation but suggested amendment of SEBI Act to include those provisions, it said. According to a petition of Investor Grievance Forum, more than Rs 50,000 crore of savings of retired pensioners, women and salaried class people have been locked up in various securities scams. Although the high-level committee on capital markets (HLC) having representation from RBI, SEBI and DCA has taken important and effective decision to plug the loopholes in regulatory mechanism, the report said the parliamentary panel was amazed to learn that its terms of reference is not specific towards protection of investors. The panel also said that despite stringent SEBI norms, a large number of vanishing companies have come to fore in bourses. “There is an apparent need to modify the rules and regulations so as to discourage illegal siphoning of funds by companies through issues raised in capital market,” it said. The Parliamentary Committee noted that 176 companies have been identified as vanishing companies as on December 2001, who have mobilised Rs 958.90 crore. SEBI has issued prohibitive orders against 88 companies and 339 promoters from accessing the capital market for a period of five years. The committee also said a time bound action plan may be chalked out and followed by SEBI to take time bound action against the brokers and sub-brokers who do not maintain the code of conduct given in SEBI’s regulations. PTI
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Simplify rules to attract more FDI
New Delhi, November 25 “Simplification of rules (FDI) and procedures for getting more FDI, empowering the FIPB, creating a more credible foreign implementation authority, were necessary,” V.K. Singh said. Sectoral caps is just one part of the report in which he has made various recommendations, U.K. Singh said at the sidelines of the India Economic Summit here. “My concern is that only a very small part of the report has been picked up. My committee has made various recommendations. Hiking sector limits is not the most important part of the report,” he added. He hoped that his report would soon be considered by the Group of Ministers on FDI. Earlier, speaking at a session here, he said differential subsidies should be removed so that the least developed countries could benefit from the process of trade liberalisation. “It is imperative for us to ensure how quickly we can deal with distortionary subsidies so that the gains of trade liberalisation can be equally distributed across all countries,” he said.
PTI
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Massive investments needed for 8 pc growth
New Delhi, November 25 While Minister of Law and Justice and Coal, Ravi Shankar Prasad used the occasion to present a report card of the government highlighting the achievements during the last few years, former Finance Minister P. Chidambaram said that the present government cannot take credit for a single major achievement during the last 12 months. Reaching magic number of 8 per cent growth would require massive investment in agriculture and manufacturing, which is currently not forthcoming. Mr Chidambaram noted that there have only been intentions and announcements by the present government but no concrete action. Mr Prasad, on the other hand, identified bio-technology, housing and tourism as the areas where major potential exists while major areas of where reforms have undertaken are agricultural and the road sector.
TNS
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BoB takes over Benaras State Bank
Kolkata, November 25 After announcing the bank’s financial performance in the eastern region this year, BoB General Manager T.P. Banerjee told UNI here that though the formal merger between the two banks took place on June 19 last, steps were still underway to formalise the conversion of all the 105 Benaras State Bank (BSB) branches in the eastern and the western Uttar Pradesh regions, besides one each in Delhi, Mumbai and Kolkata, into BOB branches. “We are still not very much clear about the financial positions of the 23 erstwhile BSB branches, situated mostly in the rural areas of UP,” Mr Banerjee said. However, he did not rule out the possibility of merger of these with some of the nearby existing BOB branches with immediate effect.
UNI
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Increase rates on small savings: banks New Delhi, November 25 The association will also submit a petition to the President of India on issues, including privatisation of public sector banks, corporatisation of the IDBI and an increase in the interest rates on small savings and saving bank deposits. “The government is considering bringing down the government equity in public sector banks from the existing 51 per cent to 33 per cent in the name of reforms. The association said the interest rates on small savings and saving bank deposits should be increased. “Deposits in the banks are reducing owing to the declining interest rates as it is against the interest of investor. The interest rates on loans which are being reduced are not a rational move”, said Mr Chakraborty.
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BSNL opens Internet connections Ferozepore, November 25 After launching the mobile phone service by calling up his regional manager Mr G.S. Gill GMT, Ferozepore told media persons that in the first phase 7000 connections would be released to the customers. Meanwhile, the BSNL has also opened up its connections to the Internet facilities that were closed due to lower capacity of the server. In order to enhance the capacity, the telephone exchange was recently upgraded.
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Qantas
acquires Air NZ stake Wellington/Sydney, Nov 25 Qantas, one of the few profitable airlines since the
September 11, 2001, attacks, plans to spend around NZ $ 550 million
($276 million) for the stake, which will ensure the long-term
viability of the troubled state-owned New Zealand carrier. The
agreement will see the airlines codeshare on the domestic and
international routes, ensuring improved aircraft utilisation and
ending intense competition on services between Australia and New
Zealand, which has put pressure on earnings. Reuters |
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Bajaj Elect to exit dye casting trade New Delhi, November 25 The company has already initiated a massive operational restructuring by dividing operations in five strategic business units and the decision to exit pressure dye casting is a part of this exercise.
PTI
No proposal to bifurcate SAIL: govt New Delhi, November 25 The Minister of State for Steel B.K. Tripathy said the government plans to bring out of voluntary retirement scheme for employees of SAIL to reduce expenditure. All employees of SAIL will be eligible for voluntary retirement, he added.
UNI New Delhi, November 25 The Rs 16 crore order is for one of the most critical constituents of the refinery.
UNI |
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