THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
B U S I N E S S

RBI, Finance Ministry peg higher inflation rate
New Delhi, March 25
The Reserve Bank of India (RBI) and the Union Finance Ministry today said the inflation rate would be higher than the targeted 4-4.5 per cent, though adding that there were enough cushions in the system to tackle the spiralling prices.

EU defends outsourcing
But India must grant access to EU products

New Delhi, March 25
The European Union today defended outsourcing, saying that it is an integral part of the free global trade but cautioned that shifting of low-end jobs to developing countries, particularly India, must be reciprocated by these nations by granting market access to high-end products of the EU.

Gail, Tata Power, BP tie up
To bid for Dabhol Power Plant
New Delhi, March 25
Gail India Ltd has joined hands with Tata Power Co and British Petroleum to bid as a group for bankrupt US energy firm Enron Corp’s Dabhol power plant and LNG import terminal in Maharashtra.

Lockout at Samtel unit in Parwanoo
Parwanoo, March 25
Samtel Colour declared a lockout on March 22 at its deflection yokes factory in Parwanoo. It has forced hundreds of workers to come out on the roads. A TNS team, during its visit to the unit today, found that lockout notices had been pasted outside the main gate, denying workers entry to the premises.

A man loads crates of small Pepsi bottles in a truck in Mumbai
A man loads crates of small Pepsi bottles in a truck in Mumbai on Wednesday. Coca-Cola and Pepsi are fighting to increase sales of their fizzy drinks in the country with small bottles and price cuts after a pesticide scare last year caused sales to plummet. — Reuters


A P6 Haier pen phone is shown at the Cellular Telecommunications and Internet Association trade show in Atlanta
A P6 Haier pen phone is shown at the Cellular Telecommunications and Internet Association trade show in Atlanta on Wednesday. Haier is preparing to launch its first mobile phone in the US.
— Reuters

EARLIER STORIES

EU slaps $611 m fine on Microsoft
March 25, 2004
Dollar falls below 45 mark against Rupee
March 24, 2004
Bharti to pump in Rs 2,000 cr
March 23
, 2004
Archies to focus on retail distribution
March 22, 2004
India set to take lead in poultry sector
March 21, 2004
Bank of India told to pay $82 m in BCCI case
March 20, 2004
India leader of outsourcing: Gartner
March 19, 2004
Import of Chinese tyres hits industry
March 18, 2004
Infosys centre for Czech Republic
March 17, 2004

ONGC shares go for a song
March 16, 2004

 


Govt to promote organic farming in Himachal
New Delhi, March 25
The Centre is aiming to explore the potential of billion dollar organic product market in the global market. It has identified hilly states like Himachal Pradesh, Uttaranchal, Mizoram, Sikkim, Nagaland, Meghalaya and parts of Madhya Pradesh to promote organic farming.

Indian Airlines may land in black by year-end
New Delhi, March 25
After being in the red for years which also forced the government to think of privatising Indian Airlines (IA), it is expected to end the year 2003-04 with an operating profit of Rs 15.25 crore.

Tax relief for development finance firms sought
New Delhi, March 25
The domestic industry has called for providing tax concessions to development financial institutions (DFIs) to facilitate better long-term corporate financing. “There are thousands of mid-sized Indian companies today looking for fresh investments for which they need long-term competitive finance.

New magazine for franchise, retail industry
New Delhi, March 25
Publishing house Exchange4media today launched a new business magazine, “Franchise Plus”, which targets those looking for business opportunities in franchising, retailing, distribution and real estate.

CORPORATE NEWS

Eicher demerger plan gets nod
Mumbai, March 25
Eicher Ltd today informed the BSE that its shareholders had approved, with requisite majority, the composite Scheme of Arrangement between the company and Eicher Motors Ltd and Malbros Investments Ltd.

  • Bharti to raise $100 m

  • Crisil acquires 9 pc stake in Caribbean firm

  • Moody’s changes Tata Motors’ outlook

Video
Microsoft launches BizTalk Server 2004.
(28k, 56k)

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RBI, Finance Ministry peg higher inflation rate

New Delhi, March 25
The Reserve Bank of India (RBI) and the Union Finance Ministry today said the inflation rate would be higher than the targeted 4-4.5 per cent, though adding that there were enough cushions in the system to tackle the spiralling prices.

Top Finance Ministry officials revised upwards the inflation rate for the current fiscal, pegging it in the region of 4.7 per cent. However, they said there was no cause of alarm and the situation was manageable.

“The inflation rate would be less than 5 per cent and could be in the region of 4.7 per cent,” the Chief Economic Adviser to the Finance Ministry, Mr Ashok Lahiri, told reporters here.

Finance Minister Jaswant Singh had stated in his Interim Budget speech that the inflation rate for the fiscal would be between 4 and 4.5 per cent.

Meanwhile, RBI Governor Y.V. Reddy, who had also forecast this level of inflation earlier, today told reporters in Mumbai that the inflation rate would be between 5 and 5.5 per cent.

Dr Reddy as well as Dr Lahiri attributed the upward revision in the inflation rate, as measured by the Wholesale Price Index, to the spurt in international commodity prices, which had hardened by 20 per cent. However, Dr Reddy also said there were enough cushions in the economy to tackle any unwarranted situation.

“Liquidity conditions are easy,” Dr Lahiri said but admitted that hardening of international primary commodities prices would have an adverse impact on the Indian economy. He said the macro-economic fundamental of the economy were strong but parried questions whether this would lead to the hardening of interest rates.

Dr Lahiri said: “On a point-to-point basis, the inflation rate would be lower than last year,” he said. Talking about the rise in prices of sugar in global markets, Dr Lahiri said the weight of sugar in WPI was small. “It is manageable. I would not be worried,” he said.

When asked to comment on apprehensions in the markets that the interest rates would go northwards, Dr Lahiri said in that case, the private sector should undertake borrowings to make investments. — UNI
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EU defends outsourcing
But India must grant access to EU products

New Delhi, March 25
The European Union today defended outsourcing, saying that it is an integral part of the free global trade but cautioned that shifting of low-end jobs to developing countries, particularly India, must be reciprocated by these nations by granting market access to high-end products of the EU.

Expecting economic growth of the EU to be in the range of 2-3 per cent this fiscal, European Commissioner for Enterprise and Information Society Erkki Liikanen told mediapersons here that it is much tougher to defend open trade when the growth is low. ''Hopefully, India will be growing at a much faster rate. So it is not difficult for it to open trade much more.’’

Advocating reciprocity of trade between the nations, Mr Liikanen said any politician is challenged by many factors in his constituency and when he is questioned that jobs are being moved to those countries which have restrictive trade structure, he succumbed to pressures.

''We say when we lose lower-end jobs, we should have much more market access for high-end products.’’

When asked as to what does he expect India to do in exchange of outsourcing from the EU, he said it’s a matter to be discussed by EU Trade Commissioner Pascal Lamy but the general principle must be of reciprocity.

Taking dig at the rising backlash against outsourcing in the US, which many analysts say are due to the heightened campaign for the Presidential election, the EU official said despite elections being held at many levels almost every day in the union the outrage against shifting of jobs is not as pronounced as in the United States. — UNI

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Gail, Tata Power, BP tie up
To bid for Dabhol Power Plant

New Delhi, March 25
Gail India Ltd has joined hands with Tata Power Co and British Petroleum to bid as a group for bankrupt US energy firm Enron Corp’s Dabhol power plant and LNG import terminal in Maharashtra.

“We will sign a tripartite collaborative agreement before the end of this month,” a senior GAIL official said here.

Though the three companies are yet to decide on how much each one will hold in the consortium bidding for Enron’s Indian assets, they have broadly reached an understanding that GAIL, if they win the bid, will operate the 2.5 million tonne LNG import and regassification facility at Dabhol while Tata Power will run the 2,184 MW power plant. BP is interested in supplying liquefied natural gas (LNG), they said.

Foreign shareholders had offered to sell the stalled $ 2.9 billion project for which there are four prospective buyers — the consortium of Tata Power, BP and GAIL; Reliance Industries Ltd; BG Group Plc; and Royal Dutch/Shell.

Enron owns 65 per cent of Dabhol, while General Electric Co and privately held Bechtel group Inc each own 10 per cent.

Maharashtra State Electricity Board — the sole buyer of the power generated by the project — holds the remaining 15 per cent of Dabhol Power Company, which set up the 2,184 MW plant. — PTI
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Lockout at Samtel unit in Parwanoo
Poonam Batth
Tribune News Service

Parwanoo, March 25
Samtel Colour declared a lockout on March 22 at its deflection yokes factory in Parwanoo. It has forced hundreds of workers to come out on the roads.

A TNS team, during its visit to the unit today, found that lockout notices had been pasted outside the main gate, denying workers entry to the premises.

Treasurer of the Samtel Workers Union Sunil Kumar said the dispute between the union and management was over the revision of wages. As per the agreement between the two, the wages of the employees had to be revised every three years, but there had been no such revision after July, 2000.

While the management was firm on its stand of linking the wage revision with a threefold increase in productivity, the workers maintain that this was not part of the agreement.

The irked workers today assembled in front of the factory. They were protesting against the management's decision to suspend 14 employees and chargesheet 36 others on March 17 for allegedly not obeying the company's rules.

They alleged that not only some of the machines had taken out from the premises but the management was also taking work from the employees on contract elsewhere. In fact, they had stopped giving them work since March 15. Then they reported the matter to the local police when the machines were being taken out on the pretext of repair.

SHO Shamsher Singh denied that the workers were beaten by some bad elements.

One worker disclosed that the production of the component was underway at Vinay Industries, Datiar, and Essel and Metronic groups at Parwanoo. The help of a posse of outside security agency was finally taken to effect a lockout on March 22. When the workers of the third shift tried to get in, they were denied entry.

Business Head of Samtel Colour Alok Chatterjee said the company had been negotiating wage revision in terms of the productivity keeping in view the competition. While the workers agreed to improve their productivity, but they were declining to sign any agreement with the management in this regard.

While an official of the management said the workers were given an increase of Rs 193 in the DA and an increase of Rs 20-40 in the wages in July, 2003 , the workers said the nominal hike in wages was as per the Minimum Wages Act and the management had no role to play in it.

Mr Chatterjee said following the intervention of the Labour Commissioner, Shimla, negotiations were on between the management, the workers union and the Deputy Labour Commissioner to find an early solution to the problem.
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Govt to promote organic farming in Himachal
Tribune News Service

New Delhi, March 25
The Centre is aiming to explore the potential of billion dollar organic product market in the global market. It has identified hilly states like Himachal Pradesh, Uttaranchal, Mizoram, Sikkim, Nagaland, Meghalaya and parts of Madhya Pradesh to promote organic farming.

Speaking at a three-day National Conference on Organic Farming for Sustainable Production, Chairman of the Farmers’ Commission Som Pal called for adopting an eco-friendly technologies in the agriculture sector.

The conference has been organised by the Horticulture Society of India in collaboration with the Indian Agricultural Research.

Mr Som Pal said at present, the area under organic farming in the country is estimated to be about 2.5 lakh hectares covering fruit crops like pineapple and banana, vegetables and oilseed crops such as mustard and groundnut. In case of foodgrains, organic wheat is grown over small areas primarily for meeting export needs.

The worldwide market fruits areexpanding at an annual growth rate of 15-30 per cent over the past three years. The present global market is estimated at Rs 26 billion. The share of India so far was only a negligible Rs 89.42 crore.
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Indian Airlines may land in black by year-end
Tribune News Service

New Delhi, March 25
After being in the red for years which also forced the government to think of privatising Indian Airlines (IA), it is expected to end the year 2003-04 with an operating profit of Rs 15.25 crore.

The revised estimates of the airline, which were approved by its Board of Directors at a meeting here yesterday, indicated a net loss of Rs 41.25 crore, which is a great improvement over the loss of Rs 196.56 crore incurred in 2002-03, an IA release stated.

Indian Airlines has been incurring losses for the past three years, primarily due to a massive hike in the price of aviation turbine fuel (ATF) since March, 2000, and in the aftermath of events such as the September 11 terrorist attacks in the US, outbreak of SARS and the Iraq war.

“While the ATF prices were largely stable between 1996 and March, 2000, varying between Rs 14,500 per kilolitre (KL) and Rs 15,200 per KL, it rose to Rs 18,000 per KL by the end of March, 2000,” the release said, adding that by September, 2000, prices of ATF shot up to Rs 22,500 per KL. Even after deregulation, prices of ATF continued to be substantially higher than the pre-revised price of Rs 15,200 per KL in March, 2003, the price of ATF is hovering around Rs 21,500 per KL now.

During 2003-04, Indian Airlines rationalised some of its flights by delinking Rajkot-Vadodara from Mumbai-Rajkot-Vadodara-Mumbai flight and provided direct connection to both Rajkot and Vadodara from Mumbai on daily basis.

According to the release, the financial year 2004-05 is expected to be better than the financial year 2003-04 due to improvement in traffic and general health of the economy coupled with anticipated increase in capacity and consequent improved utilisation.
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Tax relief for development finance firms sought
Tribune News Service

New Delhi, March 25
The domestic industry has called for providing tax concessions to development financial institutions (DFIs) to facilitate better long-term corporate financing.

“There are thousands of mid-sized Indian companies today looking for fresh investments for which they need long-term competitive finance. If a portion of long-term funds, such as provident fund, pension, gratuity and postal savings, is made available to the DFIs, it will facilitate better corporate financing”, the President of the Federation of Indian Chambers of Commerce and Industry (FICCI), Mr Y.K. Modi, said.

According to a survey conducted by FICCI on long-term financing needs of the Indian industry and the role of DFIs, the industry felt that long-term debt market should be developed so that in future, the market is in a position to support these institutions.

The DFIs should also be given tax concessions with respect to their bond issues and be exempted from tax on their profits, it said. The survey elicited response from 248 companies of various sectors and 89 per cent of the respondents said they had plans for fresh investments in near future.

The low levels of activity of the DFIs has given rise to concerns within industry, with as many as 73 per cent of the respondents saying the DFIs have not been very active in the past five years.
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New magazine for franchise, retail industry
Tribune News Service

New Delhi, March 25
Publishing house Exchange4media today launched a new business magazine, “Franchise Plus”, which targets those looking for business opportunities in franchising, retailing, distribution and real estate.

Franchise Plus Editor Vinod Behl said the retail and franchisee business in the country was witnessing a healthy growth and the magazine would help the people, especially those in small cities, stay abreast with the latest developments and business opportunities.

“It is a Rs 10,000-crore industry and witnessing a growth of 20 per cent,” Mr Behl claimed. The content plan of the magazine includes quantitative and qualitative surveys, success stories of franchisers and franchisees, sector analysis, latest franchising and retail news and retail estate news and analysis, he said.
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Corporate news

Eicher demerger plan gets nod

Mumbai, March 25
Eicher Ltd today informed the BSE that its shareholders had approved, with requisite majority, the composite Scheme of Arrangement between the company and Eicher Motors Ltd and Malbros Investments Ltd.

Under the scheme, the automotive business of Eicher Ltd will be demerged into Eicher Motors Ltd (EML). The tractors, two-wheelers, gears and engines business of Eicher Ltd will be demerged into Eicher Motors.

The restructured entity was expected to have synergistic benefits on account of potential cost savings in many operational areas. The additional shares to be issued in Eicher Motors Ltd (the resulting company), for the demerged undertaking, will be issued in the ratio of two equity shares of EML for every five equity shares of Eicher Ltd.

The approval by shareholders was given at the court-convened meeting of the equity shareholders, secured creditors and unsecured creditors of the Company held on March 20, 2004.

Further, at the EGM of the equity shareholders of the company held on March 20, 2004, the shareholders had unanimously passed the resolutions approving reorganisation and reduction in the capital of the company and delisting of the securities from the Ahmedabad, Bangalore, Kolkata, Chennai and Delhi stock exchanges.

Bharti to raise $100 m

The Board of Bharti Tele-Ventures has decided to raise funds by issue of Foreign Currency Convertible Bonds (FCCBs) up to $100 million for the purpose of meeting capital expenditure.

Informing the BSE, the company said this FCCB issue will also include a greenshoe option of retaining additional $ 15 million. However, the FCCB issue is subject to the approval of shareholders of the company and other statutory approvals as may be required.

Moody’s changes Tata Motors’ outlook

Moody’s today retained the ‘Ba2’ rating on Tata Motors Ltd’s debt paper but changed its outlook to “positive” from negative.

The change in the outlook was prompted by strong improvements in the Tatas’ operational performance since 2001, evidence of strengthening free cash flow, a significant debt reduction resulting from stronger cash flows and a 50 per cent conversion to equity of the company’s $ 100 million convertible bond. It was also prompted by the expectation that the company will consolidate its strong market positions, bolstered by acquisition of Daewoo Commercial Vehicle Company Ltd.

Crisil acquires 9 pc stake in Caribbean firm

Crisil Ltd has picked up a 9 per cent strategic stake in the Caribbean Information and Credit Rating Agency (CICRAL) for $ 3,00,000.

Crisil will provide technical assistance to establish and stabilise operations of the new rating outfit.

Mr R. Ravimohan, Managing Director of the rating agency, will join the board of CICRAL, which is the world’s first regional credit agency, Crisil said in a release here today.

The Caribbean initiative comes in the wake of major forays like acquisition of UK-based Economatters Ltd and strategic investment in National Commodity and Derivatives Exchange Ltd, the release said. — UNI, PTI
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BRIEFLY

Travel exchange
New Delhi, March 25
The 11th South Asian Travel and Tourism Exchange (SATTE), which was inaugurated here today, will see more than 255 buyers from 31 countries, including the US, the UK, Germany, China, Pakistan and Malaysia participating over the next two days. Besides a large number of buyers from India, there will also be an international section featuring countries like Nepal, Sri Lanka, Dubai, Kuwait, Malaysia and the BIMSTEC countries. — TNS

BoB rates
Mumbai, March 25
The Bank of Baroda (BoB) has revised interest rates on foreign currency non-resident (bank) deposits (FCNR-B). The rates for dollar deposits have been revised upwards to 1.05 per cent (1.04 per cent earlier), for one year to less than two years, 1.6 per cent (1.53 per cent) for two years to less than three years and 2.11 per cent (2.03 per cent) for three years maturity. — PTI

M&M shares
Mumbai, March 25
The RBI today notified that no further purchases of Mahindra & Mahindra shares should be made on behalf of foreign institutional investors without prior approval of the central bank. The RBI, said today the company has reached the trigger limit of 22 per cent of its paid-up capital. — PTI

LG to invest
Bangalore, March 25
LG Electronics said it plans to invest Rs 100 crore in India in the current calendar year, and also come out with an initial public offering for which no time-frame has been set. K R Kim, Managing Director of LG Electronic Indian Limited, its wholly owned subsidiary, told reporters here today the investment would go toward factory expansion and research and development, among others. — PTI

Fem Care
New Delhi, March 25
Fem Care Pharma proposes to set up a marketing subsidiary in the USA — Fem International — with an initial investment of Rs 3 crore. To cater to the export demand, the company plans to convert its manufacturing facility at Nashik into an export-oriented unit. The pharma firm said a new plant is proposed to be set up at Baddi in Himachal Pradesh. — UNI
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