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Saturday,
August 23, 2003, Chandigarh, India  
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Infrastructure
growth slips to 2.6 pc Jalan
hints at GDP revision Cola row
to hit US investment
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Move on
H1B visa to affect IT industry Ludhiana
to have largest malting facility Allow
steel import, say units Indian
economy to grow 5.5 pc, says IMF
Refund
security in 60 days, says Trai
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Infrastructure growth slips to 2.6 pc
New Delhi, August 22 Infrastructure industries grew by 3.6 per cent during the first four months of this fiscal compared to 7.2 per cent in April-July 2002. According to data released by the Commerce and Industry Ministry, the aggregate growth of crude petroleum, refinery, coal, electricity, cement and finished steel slipped to 2.6 per cent in July from 4.7 per cent in June, 4 per cent in May and 3.9 per cent in April this fiscal. The main reason for the low growth in infrastructure was the fall in electricity generation by 1.9 per cent in July compared to a growth of 6 per cent in the year-ago month. Crude petroleum production also grew sluggishly by 0.4 per cent last month compared to 8.6 per cent in July, 2002, while coal output was up by only 2.7 per cent compared to 12.6 in the last year. Growth in the Cement sector was only 3.4 per cent last month compared to 23.4 per cent in the year-ago period, while finished steel output was up by 7.7 per cent compared to 14.4 per cent in last year. The only silver lining was the petroleum refinery sector which recorded higher 7.5 per cent growth last month compared to 5.4 per cent in July, 2002. All six core sectors recorded lower growth during April-July this year while crude petroleum output fell by 1.5 per cent during the first four months compared to 7.6 per cent in April-July, 2002. Petroleum refinery production was lower at 2.1 per cent in the four months compared to 6.1 per cent in the same period last year. Electricity generation grew by 2.7 per cent till July compared to 4.2 per cent in the year-ago period. The coal sector growth dipped to 3.4 per cent during the early months compared to 8.0 per cent in April-July 2002. Cement production grew by 4.5 per cent till July this fiscal, compared to 11.5 per cent in the year ago period. Growth in finished steel production also came down to 7.6 per cent during the first four months compared to 10.5 per cent in April-July, 2002.
— PTI
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Jalan hints at GDP revision
Mumbai, August 22 "The monsoon has been better than expected; inflation has come down and the GDP can be revised upwards during the mid-term review of the credit policy in October to be carried by my successor Y.V. Reddy", he said at a luncheon meeting here today. "The GDP, the monsoon and other factors will be taken into consideration during the mid-term review and changes, if any, accordingly decided," he added. Jalan said inflation has been under control and "there is no turbulence and we expect the soft interest regime to continue."
— PTI
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Cola row to hit US investment
Chennai, August 22 Prof N. Richard A. d’Aveni, Professor of Strategic Management, Amos Tuck School, Dartmouth College, USA, told reporters here today that Chief Executive Officers in US corporations would consider the atmosphere in India as ‘unfriendly’ for further investment. It was not a question of US corporations mixing pesticides in soft drinks but the quality of water available in India and the environmental pollution. It might be possible to remove the pesticide in the water before using the same for the making of soft drinks. But the basic question was the poor quality of water and environmental pollution in India, said Prof d’Aveni, considered to be one of the top five global strategic thinkers. It was the responsibility of the government to ensure safe water for the consumption of its citizens, he noted, claiming that the ongoing debate side-stepped the real issue. Prof d’Aveni, who is here in connection with a meeting organised by Rai University, Delhi campus, said American policy makers were aware of the Chinese economic and military power and would like a more balanced economic power in India for their own interest. If the current trend continued, the Chinese economic growth would become unstoppable and it could emerge as a strong contender for the superpower status of the USA. Hence, the US policy makers might try to avoid this. Opining that India had the power and potential to emerge as a potential economic power, he said India should evolve its own entrepreneurship culture and emerge as a global player.
— UNI
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Move on H1B visa to affect IT industry
New Delhi, August 22 "The IT industry is concerned. We are having some discussions, Indian Embassy in the US has also been involved," he told PTI on the sidelines of a conference on distance learning. "It’s an issue that substantially affects the US industry. Therefore US associations and chambers also are taking it up because they have been the beneficiary," he added. While Nasscom has not estimated the impact on the Indian industry or movement of professionals due to lower number of H1B visas, he said, "it depends on what numbers finally come out. It’s not going to have any immediate impact as these visas are extendable for three years. There are already people with these visas. They will continue to be there". However, the new visas will get restricted. There can be an impact over a period of time, he said.
— PTI
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Ludhiana to have largest malting facility New Delhi, August 22 “The state’s economy will see a major improvement because of encouraging response from the corporate sector towards our efforts for the diversification of agriculture in the state,” Punjab Chief Minister, Capt Amarinder Singh, said here today. He expressed hope that the project would offer economically-viable options to the farmers and also be good for the ecological balance in the state. Diversifying to malting barley from wheat would not only enhance soil fertility but also save underground water due to less intensive irrigation, he said. The Chief Minister said the state would provide assistance to make the project viable since it was an inherent part of the process of diversification of agriculture undertaken by the Punjab Government. Mr Ume Brauninger of Schmidt-Seeger AG of Germany said the Rs 113 crore plant embodying state of the art tower malting technology was being promoted by Gresons Exims Limited to build world-class tower malting plant with computerised technology and sophisticated tower malting process. Mr Himmat Singh of the Punjab Agro Industries Corporation said the project would be contracting with 5,000 farmers for 40,000 acres through the
corporation. The plant would be located on 34 acres. The raw material requirement of 80,000 MT of malting barley would be sourced exclusively from Punjab as North India was most suitable in agro climatic conditions for growing malting barely. “The farmers will get an advantage as the yield of malting barley is comparable to wheat, whereas, overhead expenses of irrigation and fertilisers are far less. The farmers can sow this crop later than wheat and since this crop does not need heavy soil, farmers can grow more than two crops,” he added. Gresons Exims will not only provide quality seeds, pesticides and know-how, but also other facilities like subsidised cattlefeed and cess to credit from banks for contracting farmers. The company would also initiate other facilities like crop insurance, cattle insurance and kisan credit cards for contracting farmers. “We will engage foreign agro experts to do extensive research not only to develop new seeds with good characteristics and high yield but also encourage better agricultural practices like identifying right soil and usage of natural manure, besides reduced but efficient use of seed, water, pesticides and fertilisers to get more yield with lower input costs,” said Mr Barinder Pal Singh of Gresons
Exims.
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Allow steel import, say units Patiala, August 22 Industrialists addressing a press conference here, said both steps would go a long way in creating a level-playing field for smaller units and save such units from being exploited by the primary-steel making units. Chamber President Dinesh Gupta alleged that primary manufacturers were manipulating the steel market which had resulted in a severe fluctuation of steel prices varying from Rs 12 a kg to Rs 25 a kg over the last few months. Mr Gupta alleged that the primary manufacturers of steel, who had earlier patronised the secondary steel manufacturers by providing them with ingots, blooms and billets, were now adopting a strategy to eliminate the secondary units. As part of this strategy the primary manufacturers had become successful in getting a ban imposed on imported rolling material along with melting scrap. Melting scrap had always served as a cheap source of alternative rolling material for these secondary units. The industrialist said besides this, the primary manufacturers had also gradually stopped supplying any sort of semi-finished product such as blooms and ingots, besides other heavy material, to the re-rolling sector forcing it to seek raw material from induction furnaces only. The primary suppliers were also raising sponge iron prices arbitrarily by linking them to their finished goods rate so as to raise the cost of production of steel furnaces. The chamber President said an artificial surge in steel prices had been created in the recent past by the primary steel manufacturers even though their cost of production had not increased as their units were based on iron ore. While this strategy had paid big dividends to the big players, it had proved suicidal to the small units as they were being forced to procure their raw material only from induction furnaces making their goods uncompetitive.
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Indian economy to grow 5.5 pc, says IMF
New Delhi, August 22 “The projection (of 5.5 per cent growth) for 2003-04 incorporates a recovery in agriculture, but there is potential for an even stronger rebound in this sector,” the Washington-based lender said in its annual review of Indian economy yesterday. However, the IMF expressed concern at the growth rate which “was still off mid-1990 levels of 6.5 per cent which had implications for reducing poverty”. On the fiscal deficit, which was 5.9 per cent last fiscal, exceeding the target of 5.3 per cent, the IMF said: “India’s large deficits and public debt are exacting an economic cost in terms of foregone growth. The large fiscal imbalances leave little room for manoeuvre in the face of shocks and have tended to result in ad hoc policy changes, which increase investment uncertainty.” The IMF noted the recent resilience of the Indian economy and said despite a weak global environment and a severe drought during 2002-03, the economy grew at a rate that compares favourably with that of most other countries. “Inflation is expected to be around 4.5 per cent by end-2003-04,” it said and viewed the maintenance of easy monetary conditions as appropriate. Noting the “unprecedented accumulation of reserves, which reached $ 83 billion in mid-July and an appreciation of the rupee vis-a-vis the dollar by around 4 per cent in the year to mid-July 2003’’, IMF forecast that: “the external current account is projected to remain in surplus.” The lender further called upon India to use the current favourable external and interest rate environment to build political consensus to accelerate fiscal and structural adjustments. “Owing to the current fiscal situation and need to contain systemic risk, they encouraged the authorities to move away from government-orchestrated rescue packages of these institutions, with little conditionality,” it said. The IMF praised the government for financial sector reforms but said it needed to broaden the scope of the market for interest rate derivatives and tighten the regulatory treatment of state-government guaranteed loans. It also called for early action on lifting restrictions on agricultural marketing and trade and reforming the public distribution system and minimum support prices. Pointing out that state finances have improved only moderately, the IMF suggested that much more needs to be done in the areas of reforming the tax system, divesting public enterprises and reducing subsidies and losses in the power sector. In this context, the IMF regretted “the delay in the introduction of VAT.”
— UNI
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