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Cabinet gives go-ahead to Safta agreement
Paswan rules out divestment in NFL, RCF
HP plans technology park at Baddi
Murthy lashes out at politicians
Guj NRE, FCGL merger gets nod
Banks eye redeemed IMDs
Central Bank launches lending schemes
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IOB opens office in Malaysia
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Cabinet gives go-ahead to Safta agreement
New Delhi, December 29 The new trade regime would come into effect from January 1, 2006, said Union Minister of Commerce & Industry Kamal Nath after the meeting, adding , “in order to adopt a uniform date of Tariff Liberalisation Programme, India would bring out the customs notification from 1st July, 2006.” India’s total trade with Saarc countries was valued at $5.2 billion in 2004-05. He said the implementation of Safta will further strengthen our trade relations with the Saarc countries. The Cabinet also approved the sensitive list to protect the domestic stakeholders that would be out of the purview of the Trade Liberalisation Programme (TLP) under the Safta agreement. India has finalised two separate sensitive lists — a longer list for non-LDCs (Least Developed Countries) Pakistan and Sri Lanka and a shorter list for LDCs ( Bangladesh, Bhutan, Maldives and Nepal). India has kept 884 tariff lines in the sensitive list for non-LDCs and 763 for LDCs. The sensitive lists include goods mainly from agriculture, textile, chemicals, leather and small-scale industries. The tariff rates as applicable on January 1, 2000 under the most- favoured nation agreement would be taken as base rate for tariff reduction. Keeping in view Bangladesh’s protest over the long list of sensitive items, the Cabinet has decided to accord import of six million pieces of fabrics with the condition that sourcing of fabrics should be either from India or of Bangladesh origin. It also accorded approval to tariff rate quota (TRQ) of 2 million pieces without any conditions of sourcing of fabrics from Bangladesh. The Safta agreement was signed by all Saarc countries during the Saarc Summit held in Islamabad on January 4-6, 2004 and the Cabinet, had, thereafter accorded approval for the Safta Framework Agreement in its meeting held on January 20, 2004. In order to promote capacity- building in the LDCs, India would provide technical assistance to them in product certification, human resources training, data management, institutional upgradation and improvement of legal systems. The government has also approved a mechanism for compensation of revenue loss (MCRL) for the LDCs following opening of trade for four years. It would be subject to a cap of 1, 5 and 3 per cent of customs revenue collected on non-sensitive items under the bilateral trade in the base year. Under the rules of origin (ROO), the goods would have to undergo substantial manufacturing process in the exporting countries. The Cabinet also approved the financial restructuring of Braithwaite & Company Ltd ( BCL), Kolkata, a subsidiary of public sector Bharat Udyog Nigam Ltd, by waiving of Rs 43.61 crore interest on government loan and converting Rs 69.30 crore government equity into a loan. The Cabinet also approved a Centrally-sponsored scheme on micro irrigation during the 10th Five Year Plan involving a total cost of Rs 2,091.85 crore. The Central Government's share would be Rs 850 crore and the state's share would be Rs 207 crore in the scheme. Another decision included Rs 198.90 crore seed production project. The government also
approved the Taxation Laws (Amendment) Bill to protect the interest of donors. Briefing reporters, the Finance Minister Mr P Chidambaram said the amendment has been made based on the recommendations of the Standing Committee on Finance and the Bill would be taken up during the Budget session. The Cabinet approved amendment to clause 5 and insertion of clauses 5A, 5B and 8A in the Taxation Laws Bill 2005 to amend Sections 35, 35AC, 35CCA and Section 80GGA of the Income Tax Act, 1961, to protect donors in the event of withdrawal of approval of the donee entities, programmes, projects or schemes. The Bill proposes to ensure that deductions to the donor will not be denied on the ground that subsequent to the donation, approval granted to the donee entities was withdrawn. The Cabinet also approved the proposal to drop clause 37 of the Bill as a separate Central Sales Tax (Amendment) Bill 2005. The government also approved the proposal for amending the Government Securities Bill 2004 which will be moved in Parliament for consideration. Meanwhile, having received approval from the Cabinet, Ministry of Consumer Affairs, Food and Public Distribution, today said it would soon introduce a Bill in the Parliament to amend Forward Contracts (Regulation) Act, 1952.
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Jaipur airport gets international status
Delhi’s saviour in the bad winter months which also witness thick fog, Jaipur’s Sanganer Airport was today granted international status by the Union Cabinet, making it the 14th such airport in the country.
Announcing this here, Finance Minister P Chidambaram after the meeting said the Cabinet had approved the proposal for declaration of the existing domestic airport as an international one, thereby improving connectivity and offering wider choice of services at competitive cost to air travellers. Jaipur airport actually doubles up as an alternative landing site every winter mostly for the Delhi-bound international flights which are diverted due to thick fog covering the Indira Gandhi International Airport. With the international status, there would be substantial hike in aeronautical revenues to the airport due to the increased rates of landing, parking and route navigational charges and the possibility of heightened international flight activities. Jaipur is the third airport in the northern region, apart from Delhi and Amritsar, to be declared international. Western region has three international airports at Mumbai, Ahmedabad and Goa, Eastern region two at Kolkata and Guwahati, and the Southern region five — at Chennai, Bangalore, Hyderabad, Kochi and Thiruvananthapuram. Giving Jaipur airport the international status had become important as Indian (Airlines) already operates international flights from there and in the event of flights being diverted from Delhi the airport does not have adequate facilities to cater to the rush of diverted flights and disembarking passengers. The Jaipur airport has a runway length of 9,000 feet and its civil apron could accommodate four A-320 type of aircraft at a time. The Airports Authority of India (AAI) , which owns the airport, has plans to extend the runway to 12,000 feet and construct nine in contact parking stands with aerobridges.
— TNS
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Paswan rules out divestment in NFL, RCF
Mumbai, December 29 "There is no proposal before the ministry to divest stake in RCF and NFL...(And there is) no strategic sale of stake or disinvestment in (any) government-owned fertiliser or chemical plants," Union Minister for Chemicals, Fertilisers and Steel Ram Vilas Paswan said here. The government has 92.5 per cent stake in RCF and 97.6 per cent in NFL, respectively. Recently, the Finance Ministry had made a proposal to reduce the government holdings in RCF and NFL. Meanwhile, coal would soon become dearer to sponge-iron, steel and cement sectors as the Coal Ministry is all set to implement the Energy Coordination Committee recommendations, under which these industries would be asked to source at least 20 per cent of their needs from the open market. "The ECC had recommended that barring the power sector, the existing coal linkage for other constituents of the core sector — steel, cement and sponge iron sectors — be reduced to 80 per cent from the current 100 per cent.
— PTI
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HP plans technology park at Baddi
Shimla, December 29 This was stated by Union Information Technology Secretary, Mr Brijesh Kumar, who was here on the occasion of commencement of computerisation of land records of some more tehsils. “In case the state government provides land and related infrastructure for the setting up of a software technology park, the Centre would consider the proposal,” he said here today. He assured that he would take up Himachal’s case with the concerned ministries. “The state must enhance its pool of trained manpower for software and services sector and the Centre will provide all possible assistance in this regard,” he assured. He also announced that the Centre would fund a proposal of the state government to include work flow in the process of issuing certificates as well as for linking the same with the back office computerisation activities, including
computerisation of land records. Lauding the strides made by HP in the field of IT, he said other states should emulate the example of Himachal of going beyond mere computerisation of existing processes. “The thrust should be on re-engineering to benefit the common man,” he remarked. He also agreed to fund additional activities like call centre for farmers and horticulturalists, GIS and monitoring of works, e-learning, tele-education, state wide roll out of telemedicine and health management information system and date centre.
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Murthy lashes out at politicians
Bangalore, December 29 Virtually launching an attack on the state’s politicians as well on the political system at the second international alumni meet of the National Institute of Warangal here yesterday evening, Mr Murthy said instead of blaming the IT sector “politicians must learn to respect those who create jobs”. Presenting hypotheses to explain his viewpoint, the Infosys chief said “just as I will be held responsible in case Infosys does not do well, similarly politicians must take responsibility if the city, state or the country does not do well”. This is Mr Murthy’s first public reply to criticism of Infosys and the IT sector by former Prime Minister and Janata Dal (Secular) President H D Deve Gowda. The Infosys chief has kept silent for more than two months despite being accused of being used in a game of political power by Mr Deve Gowda. Earlier, he had only replied to specific charges of land grabbing made by Mr Gowda. Elaborating his theme in a lecture, the Infosys Chairman said under the present political system in the country, politicians had a strong incentive to keep people ignorant and illiterate. He said the entire system with its institutions including the Parliament, legislature and courts had come under the grip of corruption. He said the situation was such presently that as much as Rs 21,000 crore were being paid out in bribes by Indians in 2004. Calling this as a waste of 1 per cent of the GDP of the country, Mr Murthy said the large amount of money involved itself was a strong incentive for politicians to maintain the status quo. He said another factor plaguing the country was the policy of reservations. The Infosys chief said India had the highest percentage of reservation in the world.
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Guj NRE, FCGL merger gets nod
Mumbai, December 29 The Board of Directors accorded approval in this regard at its meeting, the company informed the stock exchanges. The Board approved the merger of FCGL with the company and finalised the exchange ratio of one equity share of the company for one equity share of FCGL, it said. The Board also approved raising of further capital by issue of FCCB / GDR / ADR or any other instrument not exceeding Rs 500 crore, it said. The appointment of S Murari as an additional director in the company was also ratified by the Board, it said. The Board also approved change in the main object of the Memorandum of Association, which is required to make these decisions effective, it said. In a separate communiqué to the bourses, FCGL Industries Ltd said its Board of Directors has also approved the merger of it with Gujarat NRE Coke. Gujarat NRE Coke Limited, the largest non-captive manufacturer of low ash metallurgical coke, has been a profit-making organisation since its inception in 1986. FCGL is in the business of financial management and functions as share and stock brokers.
— PTI
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Banks eye redeemed IMDs
Mumbai, December 29 RBI has injected a whopping Rs 26,890 crore through the repo (repurchase) auction under its liquidity adjustment facility, an official said. The apex bank had infused Rs 26,685 crore into the banking system through the same mechanism yesterday. He said the bank has also sold foreign exchange worth $1.972 billion to SBI today. Meanwhile, various banks are planning to tap the money that NRIs are getting from the forthcoming redemption of $7.3 billion India Millennium Deposits
(IMDs) through existing and upcoming schemes. Of $7.3 billion that will be redeemed, around $4 billion is leveraged money. “Of the balance $3.3 billion, we are targeting significant amount to tap,” ICICI Bank spokesman Modan Saha said. The country’s largest private sector bank will come out in a couple of days with a short-term deposit scheme for those who are not sure about what to do with this money, The State Bank of India, which came out with the bonds way back in 2000 to raise $5.5 billion, is expecting to attract 10 to 15 per cent of IMD redemption in its reinvestment schemes, an official of the country’s largest The Union Bank of India, which as a collector of IMDs will pay around $30 million to the subscribers on behalf of the SBI, is targeting to attract handsome portion of this amount in its schemes, an official associated with international banking business of the bank said. The sum of $30 million has already been paid by the SBI to Union Bank of India to be paid to IMD holders, he said. Mr Vinod
Bangera, an official in NRI Department of IDBI Bank said the bank expects to attract 50 per cent of $2 million that it will pay to IMD holders on behalf Officials of the Centurion Bank of Punjab, the Bank of Baroda, and Yes Bank did not divulge their specific expectations in this connection. About the scheme that ICICI Bank will launch in a couple of days, Mr Saha said it will have 3 to 6 months tenure and offer 20 to 30 basis points more interest than normal deposits. There are then third party short-term global bonds, which offer higher yield to those who have appetite for higher risks. The clients can leverage attractive rates of 9 per cent per annum from these bonds, which have tenure of one to two years and are dollar, euro and pound dominated, he said. For more sophisticated clients, who like to take higher risks, the bank has 4-5 structured notes and deposits around variety of classes. These notes are in tenure of 18 months to 10 years and carry interest rates in the range of 7 to 9 per cent, Mr Saha said. All these schemes will be sold through Singapore branch of ICICI Bank, he added. The SBI is planning to tap IMD redemption money through its FCNRB and NRE deposits, besides SBI Supreme and Dollar Premium Account, a bank official said. Yes Bank will tap the money through its recently launched Global Indian Banking product for NRIs. A BoB official said it offers Baroda Term Deposits and Structured Deposits scheme for the purpose of reinvestment of IMD money. The Union Bank of India plans to attract the redemption money through its FCNR and NRE deposits, besides structured schemes, a bank official said. Mr Bangera of IDBI Bank said the bank does not have structured products for tapping IMD redemption but it expects to attract investment through its existing
FCNR, NRE deposits and third party mutual funds. — PTI
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Central Bank launches lending schemes
Chandigarh, December 29 The Deputy General Manager of the bank, Mr J L Tuli, said that besides the above mentioned schemes, the bank has also decided to extend finance car loans for second hand cars. “The rate of interest to be charged for car loans will be 8. 5 per cent, and maximum loan amount payable is Rs 10 lakh,” he said. The bank was earlier giving loans for purchase of new cars only. The Cent Jewel scheme offers a maximum loan of Rs 1 lakh, at 10 per cent rate of interest. This loan will be sanctioned for purchase of branded and hallmarked jewellery, or jewellery from reputed shops. Under Cent Vivah, maximum loan of Rs 2 lakh will be extended at 11 per cent BPLR (base point lending ratio). Mr Tuli said that a loan of Rs 2 lakh for travel within the country and maximum of Rs 5 lakh for travel abroad will be extended under Cent Vivaha, at 11 per cent BPLR . “These retail lending schemes have been introduced because these value added services are critical for the bank’s growth,” he said. Talking about the non-performing assets of the bank, Mr Tuli said that the net NPA percentage was 2. 98 per cent, which he hoped to bring down to two per cent by the end of this financial year. “The NPA, mostly in SSI loans, is to the tune of Rs 125 crore. We hope to bring it down to Rs 116 crore,” he said. He said that the bank was now emphasizing on rural banking. Two third of the total bank branches (140 branches out of 250) are located in rural areas. “We propose to introduce core banking in 20 branches and put up 400 ATM’s shortly,” he said.
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IOB opens office in Malaysia
Kuala Lumpur, December 29 IOB had large-scale presence in Malaysia with branches in Kuala Lumpur, Ipoh and Malacca, but had to cease its operations after the bank was nationalised. “Today is a momentous occasion for IOB to come back to Malaysia after a gap of 32 years. It has been a long cherished desire to restart our operations in a much bigger way,” Executive Director AR Nagappan said as IOB became the third Indian bank to have its presence in
Malaysia. — PTI
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The Central Bank of India today announced the launch of three retail lending schemes — Cent Jewel (for jewellery), Cent Vivah (loan for marriage) and Cent Tours and Travel (for travelling abroad and within the country.
