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Tuesday,
April 22, 2003, Chandigarh, India  
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Economy to grow by 6 pc, inflation to fall: RBI
SC admits BSNL plea on sales tax
BSES net dips 42 pc
Unemployment in Haryana rises |
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Money transfer facility for Longowal
Poor people do more for Third World
Airline Debit Card unveiled
Investment by foreigners National Insurance signs MoU with Vijaya Bank Exempt Khadi from
VAT
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Economy to grow by 6 pc, inflation to fall: RBI
New Delhi, April 21 “The GDP growth of 6 per cent is based on the Indian Meteorological Department’s forecast of 96 per cent rainfall in the coming monsoon,” RBI Governor Bimal Jalan told reporters here. With better monsoon, he said “agriculture will rebound with 4-4.5 per cent growth.” Agriculture faltered last fiscal with a negative growth of 3.1 per cent due to the decade’s worst drought. The RBI also expects the inflation to fall from July and end the fiscal at 5-5.5 per cent. “The inflation will be around 6-6.1 per cent during the first quarter. We expect it to soften in the second quarter starting from July,” Jalan said, adding that the inflation was expected to end this fiscal at about 5-5.5 per cent. The assumption was based on the fall in price of international crude prices to $22-23 a barrel. Inflation was hovering at 6.17 per cent in the week ended April 5. The prices started going up since January after the war clouds over Iraq. Although the higher GDP growth and inflation forecasts would be the basis of the Slack Season Credit Policy to be announced on April 29, Jalan declined to comment on the interest rate scenario. “Wait for a few days,” he said. The RBI had reduced the benchmark bank rate by 0.25 per cent to 6.25 per cent in the October Busy Season Credit Policy. The RBI and the government were reviewing plans to prepay foreign debts in this fiscal. “We are encouraging private and public sector companies to prepay foreign debts,” he said.
PTI
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SC admits BSNL plea on sales tax
New Delhi, April 21 BSNL has contended that imposition of the local tax is illegal as the telecom service provider has already been paying service tax worth about Rs 1120 crore annually to the Centre. Admitting BSNL’s petition, a Bench comprising Mr Justice K.G. Balakrishnan and Mr Justice P.V. Reddy issued notices to the Union Government, the Telecom Regulatory Authority of India (TRAI), all the states and the Union Territories, seeking their replies on the issue. Challenging the Constitutional validity of the states and the Union Territories’ directives for recovery of the sales tax, BSNL counsel Harish Salve said telecom service only “involves transfer of data and voice and not the transfer of goods”, and, therefore leving of any sales tax on it, was invalid. If the states’ demand for sales tax was to be accepted, the BSNL has to pay an arrear of about Rs 2560 crore to them, its counsel said adding it would not only put enormous financial burden on the Nigam but would be a “serious blow” for expending the teledensity, which at present is only 3 per cent in the country. TNS
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BSES net dips 42 pc
Mumbai, April 21 BSES net profit for the fourth quarter ended March 31, 2003 has declined by 21.46 per cent to Rs 25.07 crore as compared to Rs 31.92 crore of the previous corresponding period. The company’s total income has decreased from Rs 2,782.67 crore in 2002 fiscal to Rs 2776.70 this year. The total income for the quarter has decreased from Rs 659.24 crore in financial year 2002 to Rs 646.87 crore in the comparable quarter this year. BSES board of directors have recommended a divided of Rs 4.4 per share on fully paid up equity share of Rs 10 each. PNB profit up
Punjab National Bank, Ludhiana Region has recorded a nearly 40 per cent rise in the net profit for the fiscal ended March 31, 2003 at Rs 34.80 crore as compared to Rs 24.91 crore posted in the previous year. This was stated by Mr A.K. Loomba, Senior Regional Manager, Ludhiana Region. The deposit of the region has increased to Rs 1272 crore during the year ended March, 2003, from Rs 1,160 crore last year, thus showing an increase of Rs 112 crore.
UNI, TNS
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Unemployment in Haryana rises Chandigarh, April 21 According to Economic Survey of Haryana (2002-03), a number of job seekers registered with employment exchanges in Haryana has though remained stagnant to about 8 lakh between 1998 and 2002, but officials admit that the actual number of the unemployed youth might have crossed 20 lakh in the state. The officials admit that most of the unemployed youth have already stopped registering their names with the exchange, as they are unable to find jobs in the private or public sector. Most of the companies are using the placement agencies to recruit manpower and there is almost no recruitment in the public sector. Interestingly, the state economy has registered an average annual growth of over 6 per cent for the past four years. The exports have crossed the Rs10,000 crore mark, registering 25 per cent growth over the previous year. But due to negative growth in the agriculture sector and less growth in the manufacturing sector, the unemployment in Haryana is on rise. Prof M.R. Agarwal, Department of Economics, Panjab University, says,‘‘the worldwide recession that has hit small scale units, service and agriculture sectors in the state is one of the reasons for limited growth in employment. Secondly, the state government has failed to make adequate capital investment in the agriculture and infrastructure sectors, resulting in lower growth in employment.’’ He points out that between 1998 and 2002 the number of employed persons in the government and semi-government sectors declined from 4.24 lakh to 4.10 lakh. During the same period, a number of the employed youth in the private sector marginally increased from 2.33 lakh to 2.55 lakh. The sources in the economic and statistical department claimed that about 5 lakh educated and uneducated youth were adding to the unemployment figures every year, but the total number of new employment opportunities in the state was just few thousands every year.
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Money transfer facility for Longowal Sangrur, April 21 Under this, any one could receive money within a few minutes, sent by his relatives abroad to India through the designated post offices. He said earlier this service was available in Sangrur, Sunam, Dhuri, Barnala and Malerkotla in this district. Any person abroad could send up to Rs 1.22 lakh in one transaction in a month. BATHINDA: Mr C.B. Garg, Superintendent, Post Offices, said that the department had tied up with Western Union Money Transfer. He said the facility was started last year and had been extended to Mansa and Rampura Phul post offices. Mr Garg said the service was reliable, fast and risk free and customer had to fill only a simple form. He said up to 12 transactions were allowed for a customer in one year.
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Poor people do more for Third World There is a new and unexpected force behind the global movement of money. Restaurant workers, taxi drivers and au pairs are increasingly stepping in where bankers and bureaucrats refuse to tread. World Bank figures show that last year, for the first time, more money flowed from relatively poor migrant workers in rich countries than the combined total of government aid, private bank lending and IMF/World Bank aid and assistance. The total value of these remittances to developing countries reached $80 billion, double the aid provided by rich nations. Sending money home dwarves the $16bn of net government and bank lending. Migrant workers sending money home is not new. What is new is the scale and importance to developing
countries. Today hundreds of millions of poorly paid people are propping up the finances of developing countries. “In 1995, remittances amounted to only one-third of debt flows. Last year they completely dwarfed them,” said Philip
Suttle, author of the World Bank’s Global Development Finance report. This rescue act has come not a moment too soon. The past two years have seen a calamitous collapse in conventional flows to developing countries. In the 1990s, financial orthodoxy believed that private flows to developing countries would make aid redundant — but the private sector is running scared of investing in developing countries. True, while equities are crashing worldwide, the emerging markets sector is the one area that has experienced a boom. And last February,
Gazprom, the Russia gas company, raised $1.75bn, the largest bond from an emerging market corporate borrower ever. But most emerging investment is directed at three countries — Russia, India and China. Total foreign direct investment
(FDI), still the single biggest category of financial flow, is falling rapidly. Net FDI slipped back from a 1999 peak of $179bn to $143bn last year as lenders drew in their claws after the dotcom crash and 11 September. And of this, an overwhelming $109bn goes to 10 large countries. Surprisingly, rather than receiving investment, developing countries are actually exporting capital. The rich elites of poor countries are racing to ship their money into safer western havens “In aggregate, developing countries are actually net capital exporters to the high-income world. And frankly, that’s probably not something that’s consistent with meeting the millennium development goals (of halving world poverty by 2015),” said the World Bank’s
Suttle. Not all these flows are bad. Some reflect so-called `south-south’ flows of growing businesses in developing countries, such as the Mexican cement company which has invested in Indonesia and even the US. But the scale of this trend is more than a cause for concern. In smaller countries such as Bangladesh, Colombia, Ecuador, Pakistan, and parts of India, remittances play a significant developmental role. India and Mexico are the largest recipients of remittances — $10bn each — followed by the Philippines with $6.4bn. India’s earnings from this source are nearly double the $5.8bn it earns from the much-vaunted software industry. Morocco, Egypt and Turkey receive around $3bn each, while Lebanon, Bangladesh, Jordan, the Dominican Republic, El Salvador and Colombia get around $2bn. The effect on some smaller countries is remarkable. More than 37 per cent of Tonga’s GDP is remitted by its migrant workers; in Lesotho, it’s 26 per cent. Between 10 and 20 per cent of the annual income of Yugoslavia, Jamaica, Albania and Nicaragua comes from expatriates. Restaurant owners have funded schools and taxi drivers paid for hospitals in rural India and Bangladesh. There is much evidence that the Bangalore boom in Indian technology was greatly aided by the expertise of expatriate IT workers shipped off to Silicon Valley in the 1970s who `reinvested’ back home. India has just started to offer dual citizenship for people of Indian heritage going back six generations, to cash in on this. The transfer of skills, contacts and energy may be as important as the finance itself. It is calling on Clare Short, the UK’s International Development Secretary, to investigate the feasibility of remittance-backed development bonds for infrastructure and venture capital investment. It’s already happening. Remittances are a more stable type of private capital flow and also a much-needed source of foreign exchange. This stability is reflected in the securitisation of remittance flows by emerging market banks. For example, in August 2001, Banco do Brasil issued $300m of five-year bonds using future remittances of yen from Brazil’s 1 million expatriates in Japan as collateral. Standard & Poor’s rated the bond BBB+, several notches above even the sovereign foreign currency rating. Whether migrant working is a sustainable method of developing poorer countries is debatable. But for now, if people in such countries want schools, hospitals and libraries, the best they can do is wait for a letter from abroad. The Guardian
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Airline Debit Card unveiled
Mumbai, April 21 Addressing a press conference, Indian Airlines Chairman and Managing Director Sunil Arora said IA will offer a 10 per cent discount on return tickets bought with the airline debit card from any of the authorised agents of the domestic carrier. The domestic carrier has become the first airlines to enter into an arrangement with industry leader and global giant, MasterCard International and also with one of the leading banks of the world-ABN Amro Bank to bring the debit card segment amongst the payment card users in India. The card, Mr Arora said, is the result of a “chance encounter” with Mr Sonny Sannon, the President, South Asia, Middle East & Africa of MasterCard International. The card, which, being launched in Delhi, Mumbai, Kolkata, Chennai, Hyderabad, Pune, Baroda, Bangalore and Noida, would be offered to the new and existing customers of ABN Amro Bank, Mr Sannon said.
UNI
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Ash L’Oreal ambassador
Mumbai, April 21 “I am absolutely delighted and very excited to be associated with L’Oreal Paris. The brand’s tag line ‘because you’re worth it’ has always been very close to my heart,’’ Aishwarya was quoted as saying in a release issued by L’Oreal Paris here. The actress will represent L’Oreal’s products for skin care, hair colour and other cosmetics.
UNI
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Investment by foreigners The Reserve Bank of India on Saturday announced a slight easing of the rules under which foreign funds and expatriates are required to seek permission to invest in domestic companies. The RBI said these investors would now need permission to invest further when their acquissitions brought the overal foreign investment in a company within 0.5 percentage points of the limit for such holdings. This compares with the earlier
threshold of 2 percentage points. This means that if the aggregate foreign fund investments reach 19.5 per cent in a state-run bank, where the foreign limit is 20 per cent, no further foreign investor purchases will he allowed without the central banks permission. Under the previous rules he central bank’s approval would have been required when the aggregate holdings reached 18 per cent. India limits foreign portfolio investment in companies with sectoral caps which range from 20 per cent to 74 per cent. The new rule applies to shares of companies having an equity base of Rs 1,000 crore (Rs. 10 bn) or more. Reuters |
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National Insurance signs MoU with Vijaya Bank New Delhi, April 21 The MoU was signed by Mr H.S. Wadhwa, Chairman and Managing Director, National Insurance Company and Mr M.S. Kapur, CMD, Vijaya Bank. As per the agreement, Vijaya Bank will sell insurance products of the National Insurance Company. “We have around 200 products which will be sold by the bank . The bank may also have a separate counter for selling our products”, said Mr Wadhwa.
TNS |
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Exempt Khadi from VAT New Delhi, April 21 KVIC, which had requested the Chief Ministers of all states and Union Territories for exempting KVI products from state taxes or VAT, is pursuing the issue with the Empowered Committee on VAT and the Union Finance Ministry.
UNI |
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