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Tuesday,
August 26, 2003, Chandigarh, India  
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IMF warns India of high fiscal deficit
Health Ministry seeks apology from Pepsi
Puncom to buy 25 pc equity from public
Export of steel to Pakistan sought |
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Power Grid to install telecom network in Haryana
RITES records highest ever turnover of 322 cr
RBI says soft interest rate bias to continue
Financial bids for HCL by September
‘Desi Viagra’ most preferred cash
crop
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IMF warns India of high fiscal deficit New Delhi, August 25 “India’s large fiscal deficits and public debt are exacting an economic cost in term of foregone growth”, the IMF said in its latest country report. At the same time, the multi-lateral funding agency, pegged India’s GDP growth at 5.5 per cent for the current fiscal year 2003-04 which will be primarily driven by a recovery in agriculture. “The projection for 2003-04, which was broadly in line with the consensus forecast, incorporates a recovery in agriculture. But there is a potential for even a stronger rebound in this sector,” it said. The external current account situation is expected to remain in surplus, the report said and projected that the rate of inflation is expected to be in a moderate range of 4.5 per cent during the fiscal year. On fiscal deficit, the IMF said that “there would be detrimental effects on growth through crowding out of critically needed spending on fiscal and social capital and through pre-emption of resources for private investments”. “Large fiscal imbalances leave little room for manoeuver in the face of shocks aned have tended to result in ad hoc policy changes, which increase investment uncertainties”, it said. Laying out the policy imperatives for India, the IMF said that India should focus on hastening the pace of fiscal and structural adjustments buoyed by the strong external and interest rate environment. “The strategy of postponing consolidation while attempting to stimulate growth is risky”, it said adding that top priority should be given in building a consensus to implement VAT within the current fiscal year. Underlining the need for tax reforms, it said that fiscal positions of the states have only made a marginal improvement.
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Health Ministry seeks apology from Pepsi New Delhi, August 25 “Your advertising is misleading as only a part of one sentence given in the statement of the minister before the Lok Sabha has been used in the advertisement”, the ministry said in a letter to the company. “You are advised to issue an unconditional apology and publish the same prominently in the same newspapers where your advertisement has appeared,” said Mr Deepak Gupta, Joint Secretary (Health and Family Welfare), in the letter written to Pepsico Chairman Rajeev Bakshi. Mr Gupta asked for the withdrawal of the said advertisement and any other further campaigns proposed to launch. “It is obvious that the remaining part of the sentence has been wilfully concealed with questionable motives”, the letter said. Mr Gupta said using the minister’s name for promoting the sale of the company’s product was “extremely unethical and violative of the established norms of advertisements.”
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Puncom to buy 25 pc equity from public Chandigarh, August 25 The final decision will be taken in the AGM, scheduled to be held on September 28. The company officials claimed that the decision would help the share holders gain in a big way, besides assisting the company to assert in the stock market. After offering VRS to over two third of the employees, the management will save Rs 9 crore to Rs 10 crore annually in the salary expenses. Mr Viswajit Khanna, Managing Director of the company, disclosed that after getting over Rs 40 crore order from Railnet, the company was set to come out of the red. The company with over Rs 95 crore cash reserves, had registered net loss of about Rs 15 crore during the financial year 2002-03 as against about Rs 5 crore net profit reported during the previous year. However, after the fall in market interest rate, the company’s income from interest had drastically come down. He said during the first quarter this year, the company had recorded operational profits of Rs 2 crore. He said: ‘‘Our priority is to develop new software products and technologies in association with other companies. We have already entered into agreement with Alcatel, an Italian company to develop STM technology that has helped us to grab Rs 40 crore order from the Railways.’’ Similarly, he said, power plants were being developed in collaboration with another partner from Australia. Mr Khanna said as part of the restructuring plan, the software division was strengthened. The company is expecting to get substantial orders in the business of ‘e governance,’ smart cards from state governments and banks. The management has also decided, he said, to sell or rent out surplus land of the company to generate additional resources. |
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Export of steel to Pakistan sought Mandi Gobindgarh, August 25 Mr R.P. Bhatia senior vice-president of the association, said here today that there was great scope for the export of steel from this region to Pakistan and the same would help in the development of secondary steel industry of this border state. The demand for the export of steel to Pakistan through the Wagah border has come in the wake of hue and cry from the small-scale industry over the unprecedented hike in the steel prices in the country. The small industrialists have also approached the Prime Minister against the hike. The secondary steel plants in this part of the country have also been protesting against the rise in prices of steel raw material by the primary steel units in the country. Mr Bhatia pointed out that there was a need to boost the export of steel. He said India had to compete with international steel players like Japan, Korea, China and CIS countries. Mr Bhatia maintained that despite the availability of good quality iron ore, cheap labour and less production cost, the country was lagging behind these countries. This was because very less priority was being given to the steel sector, besides high cost of energy. In China, the special laws had been framed for the labour and the power rates were also low compared with our cost of power supply. Mr Bhatia said there was hardly any scope for the establishment of an integrated steel plant in future and the need was to encourage steel production through sponge iron-cum induction furnace route which required minimum gestation period and less capital. He said since steel plants in Punjab were located away from the ports, they should be given freight subsidy against steel scrap from ports to factories. |
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Power Grid to install telecom network in Haryana Chandigarh, August 25 It will enable the corporation to extend its connectivity to Haryana and towns of Punjab, Himachal Pradesh, Jammu and Kashmir, said Mr R.P. Singh, Chief Managing Director, Power Grid, here today. Addressing a media conference, he said the availability of bandwidth on the corporation’s network in Haryana would further spur competition and bring down the prices of telecom services. Earlier, the MoU was signed between Mr Harbakhsh Singh, Secretary (IT), Haryana, and Mr R.P. Singh. He said the corporation was in the process of establishing state-of-the-art broadband telecom network of about 20,000 km in the country costing Rs 974 crore on its transmission infrastructure which would connect more than 60 cities. He said the corporation had planned to invest Rs 71,000 crore in the next 10 years in this sector. He said since the returns from telecom business were more than 25 per cent against around 15 per cent in the power transmission, the corporation was diversifying its activity to that area. He disclosed that the corporation would invest Rs 450 crore in the next four years to strengthen power transmission network. The corporation would upgrade Ballabhgarh substation and implement transmission schemes viz Rihand- II transmission system of about 600 km and establish substations at Kaithal, Narwana, Fatehabad and Gurgaon. It would not only ensure delivery of Haryana’s share of power from the northern grid but also strengthen the state grid. He said the corporation which had earned a net profit of Rs 650 crore in 2002-03, had fixed a target of Rs 850 crore net profit during the current financial year. He said the corporation was also having talks with the Punjab Government to set up optical fibre lines to increase the bandwidth in the state. Earlier, the Chief General Manager of the VSNL (Northern Region), Mr K.K. Kheterpal and Dr Harbakhsh Singh also signed an agreement to lay communication network, along with national highways and other roads.
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RITES records highest ever turnover of 322 cr New Delhi, August 25 The turnover includes Rs 53 crore arising out of the settlements made during the year related to projects executed in Iraq. The turnover from consultancy fee has grown by 35 per cent to Rs 162 crore in the domestic segment and by 21 per cent to Rs 48 crore in the foreign segment, according to an official release. RITES’ export and overseas leasing business earned Rs 44 crore. The pre-tax profit of Rs 100 crore is the highest ever earned by the company. The net profit after tax rose to Rs 54.4 crore against Rs 39.1 crore during the previous year. The company declared 125 per cent final dividend in addition to an equivalent interim dividend paid earlier. RITES, a Mini Ratna under the Railway Ministry, has the distinction of being a profit earning PSU since its inception 29 years ago, it said. The company secured new contracts worth Rs 423.4 crore during the year as against Rs 233.4 crore in the previous year. The compounded Annual Growth Rate (CAGR) for the last 10 years in turnover has been 19.4 per cent while for net profits, it is 23.2 per cent. For the eleventh consecutive year, the department of Public Enterprises has rated RITES as “Excellent” in its performance evaluation under the MoU signed between RITES and the Government of India for the year 2001-2002. The company has obtained ISO 9001-2000 quality management certification for its entire range of activities. RITES has been selected by FIEO for the Niryat Shree Gold Trophy for the year 2001-2002 and the Bronze Trophy for the year 2000-2001 for its high export performance in the service sector, it added. Addressing the twenty-ninth Annual General Meeting of the company, Managing Director D.C. Mishra said in the face of an extremely competitive international scenario, RITES succeeded in securing challenging and prestigious assignments during in Tanzania, Malaysia, Mozambique, Botswana, Bangladesh, Sri Lanka and Vietnam besides ongoing projects in UK, Colombia and Malawi.
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RBI says soft interest rate bias to continue
New Delhi, August 25 “The soft interest rate bias is continuing. It will continue,” Jalan told reporters, implying that lending rates would either remain at the present level or come down further. The bank rate, at which RBI lends funds to banks, was slashed by 0.25 per cent to 6 per cent in the last April slack season Credit Policy. Although RBI had reduced bank rate, it kept Repo Rate untouched until last Saturday when it was slashed by 0.50 per cent to 4.5 per cent. The reduction in Repo Rate could be seen in the wake of fall in inflation rate to 3.95 per cent in the week ended August 9, which means a decline in the real interest rate in the economy. On top of this, monsoon has been satisfactory in most parts of the country. Jalan had earlier said the decision to cut Repo Rate would be taken once the inflation and monsoon picture was clear. With good monsoon this year, it is expected that economy will go on to post a higher growth. This would imply greater demand for credit. Bankers have indicated that the Repo Rate cut would trigger another round of cuts in lending rates to boost investments in the country. —
PTI
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Financial bids for HCL by September
New Delhi, August 25 The inter-ministerial group on disinvestment which met here recently, decided to go ahead with financial bids without awaiting the response from lenders. Sources said the meeting resolved that transaction documents had incorporated a provision for protection of lenders by way of substitution of guarantee. Bids for the copper major were delayed as the government resolved to settle the issue of guarantee extended to the bond and debenture holders. Lenders stood to lose the protection of guarantee which would cease upon disinvestment forcing the government to ask the company to settle the matter with the former. Company Chairman and Managing Director B.K. Menon who had been asked to negotiate with lenders is reported to have held two rounds of meetings with creditors earlier this month. The management had informed the creditors about the impending privatisation exercise underway and had sought their approval for the same. The rethinking on the issue has been prompted by the fact that such approvals were not required till the bidding process was over and therefore there was no need to wait any further. The government has decided to sell its entire 98 per cent equity in the copper major along with management control to a strategic partner. —
PTI
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