Sunday, August 16, 1998
today's calendar
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B U S I N E S S | Sunday, August 16, 1998 |
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spotlight today's calendar |
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Oberoi: the wonder boy from
Punjab Ladakhis
turn to shawl-making |
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‘Growth in trade not
encouraging’ Bhiwani
Textile to expand |
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Smithkline to invest in
Haryana factory Angora
breeding farms in the red |
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Oberoi: the wonder boy from
Punjab NEW DELHI, Aug 15 — From a front desk clerk in a hotel to a proud owner of a chain of international hotels across the world and an international brand name, it has been a long and exciting journey for the boy from the remote Punjab village of Bhaun, Rai Bahadur Mohan Singh Oberoi, who celebrated his 100th birthday today. Starting his career as a clerk in the Cecil hotel of Shimla, Mr M.S. Oberoi displayed rare business acumen and took little time to change his status of an employee to that of an employer. Incidentally, the Cecil hotel is also part of the Oberoi chain of hotels today. He was an entrepreneur exemplified when he decided to purchase the Oberoi Grand site at Calcutta at a time when plague had hit the city. Mr Oberoi bought the site at incredibly cheap rates and today the unit is amongst the best in West Bengal.His contribution to the hotel industry was recognised as early as in 1943, when Britain bestowed him with the title of Rai Bahadur. It was in 1965, that he set up the Oberoi Intercontinental in Bombay and to this date it is the choice of discerning travellers and visitors from all over the world. His Bombay enterprise was followed by the Oberoi Maidens and then the Oberoi in the capital. Mr Oberoi’s key to success was his visionary views which included evolving a Total Quality Management (TQM) system as early as in 1920s. The concept of MNCs and TQM, which is a favourite corporate mantra today was not new to Mr Oberoi. He set up his first international venture in neighbouring Nepal and Soaltee Oberoi carved out a niche in that country from the very first day.There has been no looking back for Mr Oberoi since he started his first international venture and today his business tie-ups are their in a large number of countries, including Egypt and Australia. Mr Oberoi won the global
bid for a management contract for Melbourne’s
historic Windsor Hotel. He was also responsible for
introducing Palace hotels in the country. He gave the
maharajas of yesteryears a new lease of life by hiring
their properties for running hotels. The country’s
first palace hotel was set up by the Oberois in Srinagar.
The concept has gained ground and other hotel chains too
have moved in this direction. |
‘Growth in trade not encouraging’ MUMBAI, Aug 15 (PTI) — The forecast of growth in world trade volume in 1998 does not give a very encouraging picture for a substantial pick up in Indian export, according to Reserve Bank of India (RBI) Deputy Governor Dr Y. V. Reddy. “Apart from infrastructure bottlenecks, the international environment is also not conducive to expanded trade and thus to our export growth,” Reddy said in his lecture jointly organised by the Madabhushi Ananthasayanam Institute of Public Affairs and the Statistics, Economics and Commerce Departments of Sri Venkateswara University in Tirupati yesterday. World trade volume is estimated to grow by 6.7 per cent in 1998, as compared with 9.6 per cent in 1997, In terms of value, world exports of goods would grow by 3.1 per cent, reflecting the depression on the price front, he said. In fact, external trading environment is getting more and more difficult this year, the RBI Deputy Governor stressed. According to provisional data, during April-June 1998, exports showed a negative growth of 7.9 per cent and thus a substantial step up during the rest of the year was needed to seek even a modest annual growth, he said. Reddy said “although we may not be able to reach high growth rates in exports that we had in some years in the past, we should aim for a better performance than last year.” As regards imports, the major items are oil and fertilisers, the prices of which are falling in the international markets, given the general downward trend in prices of manufactured goods in world markets, India should not expect any sharp rise its import bill during 1998-99, he said. Dwelling on the prospects for 1998-99, he said good grain output for 1998-99 was currently expected to be about 10 million tonnes higher than the level of 194.1 million tonnes in 1997-98, agricultural production was, therefore, likely to show a recovery in 1998-99 and India could reasonably expect a growth of about 4 per cent in agriculture, he said. As regards industry, he said a leading indicator of industrial pick up was available from the steep increase in disbursements of the all-India financial institutions during the first quarter of 1998 by 48.1 per cent as against 10.1 per cent during April-June 1997. Emphasising that the real
GDP growth would be at least 6 per cent during 1998-99,
he said the pessimism expressed by some that the real GDP
would grow only by 4.5 to 5 per cent was unwarranted. |
Bhiwani Textile to expand BHIWANI, Aug 15 — Graviera Suiting of the Bhiwani Textile Mills has decided to launch its latest range of fabrics — perfect feel finish and wonder wash fabric for the first time in the world. Company has developed both the products in its R & D work station and production work has also been started of these products.Mr Devki Sharan Aggarwal, Executive President told newsmen that the perfect feel finish fabrics is a technology breakthrough in the world of synthetic suiting fabrics. Mr K.D. Joshi, Vice
President (Fabric) told that mill was currently
implementing its Rs 35 crore modernisation-cum-expansion
in its existing spinning and weaving units. |
Ladakhis turn to shawl-making LADAKH, Aug 15 (ANI) — Six training centres in Ladakh region of Jammu and Kashmir, famous for its Pashmina shawls, are teaching villagers new techniques of weaving and tailoring in order to grow their businesses. Working the handloom is a traditional household activity in the remote and hill region of Ladakh. Raw ingredients like pashmina and sheep wool are locally available, making the activity a potentially viable and profitable occupation for residents. More than 1,000 artisans have been trained since the inception of the training programme in 1981. Each artisan is paid a monthly stipend of Rs 100. After completion of training for one or two years the artisans are given handlooms and spinning wheels. The state government has supplied 200 spinning wheels and 50 powerlooms to the artisans who have completed the training programme.“For the past 17 years since the centre was started, they are making white shawls. People come here, get trained and go out, but they do know why they are making white shawls and what is the actual thing that goes into making a shawl”, said Renuka Reddy, a trainer from New Delhi. According to trainers, delays in getting the dyed yarn was one of the biggest handicaps for the artisans. The yarn is to be brought from Ludhiana. Now the artisans are being trained in dyeing of white yarn so that most of the required raw material is available locally.The state government under one of its schemes to encourage women entrepreneurs has decided to offer jobs to those artisans who have worked in training centres for at least seven years. But the artisans complain
that in several cases the state government has failed to
employ many women who have worked for more than ten
years. |
Snippets INFRASTRUCTURAL investments in northern India have suffered as the region has failed to grapple with an economic slump and a growing crisis of confidence. The total investments in infrastructure in 1996 was 20 per cent or Rs 119,104 crore, in 1997 Rs 119,649 crore (17.6 per cent) and has come down to 16.6 per cent in 1998 February which is only 16.6 per cent, according to a CII study. The North includes Haryana, Himachal Pradesh, Punjab, Rajasthan, Uttar Pradesh and Delhi. The declining share of North India as compared to the rest of the country, especially the West and the South, have been absymally low. Those hit include electricity, power transmission, railways, roads, bridges, irrigation, telecommunication, oil, gas, hotels and other services.The northern states are also lagging behind in the energy sector. There exists a high shortfall in capacity addition. The slippage in percentage terms is 57 as compared to the all India’s 46 per cent.— UNI Cheques The Regional Manager of the bank, Mr Kanwalnit Singh, says the project cost was over Rs 4 crore. A cheque sorting equipment along with computers which cost Rs 1.89 crore was imported from a US company, NCR Corporation. The machine can process over 400 cheques in a minute, giving all details of transactions.MICR (magnetic ink character recognition) cheques will have to be introduced by banks which will be coded with particular digits to be read by the sorting machine. According to the digits a cheque can be segregated bank-wise. The RBI has given a code to every city. The MICR cheques will have nine digits with the city bank and branch code as a distinguishing mark for the computer. All banks in the city have been requested to issue MICR cheque books and obtain “encoders” for their branches for the mechanised cheque processing centre. Customers too are being educated about it. — Our Correspondent Hill economy The policy, to be announced by the state government, should also focus its attention on diverting 15 per cent of the rural labour force to the secondary sector says, the PHD Chamber of Commerce and Industry. Since the state has a unique hill topography and the land is scarce, the government should undertake “industrial mapping” so that long-term planning up to 2020 can be chalked out. The Five-Year Plans must be in accordance with the long-term plan. In the Ninth Plan the government should concentrate on the intensive development of the existing industrial corridors in the state like Parwanoo-Solan-Shogi Baddi-Barotiwala-Nalagarh and Kala Amb-Paonta Sahib. Incentives should be given to non-polluting industries. The export promotion industrial park at Baddi should be expanded with the development of a world class software technology park as the region around Chandigarh is likely to emerge as a centre for software development. — PTI No confusion While CEA is an operational body that works as a government department, CERC is a quasi-judicial body created by an Act of Parliament, says Mr Rao. Whereas CEA is entrusted with overall planning in the energy sector and coordination work between different agencies, CERC’s work includes reaching at a meeting point between the two conflicting objectives of competitive prices for customers and enough revenue to encourage investment. However, the commission will look after prices for the bulk customers like state electricity boards, pricing policy thereafter comes under the purview of state electricity regulatory commissions. As such transmission of power is also the jurisdiction of CERC, he adds. — UNI Women However, despite this
positive trend women constitute only 7 per cent of the
total entrepreneurs in the country, thus highlighting the
urgency for evolving more programmes and incentives
promoting self-employment among women.According to a
paper prepared by the National Institute for
Entrepreneurship and Small Business Development, Andhra
Pradesh, Tamil Nadu, Karnataka, Maharashtra and Gujarat
account for 4,776 women entrepreneurs. — UNI
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Smithkline to invest in Haryana factory NEW DELHI, Aug 15 (PTI) — Smithkline Beecham Consumer Healthcare Ltd (SBCH) will invest Rs 250 crore in its new state-of-the-art factory being set up in Sonepat. SBCH will raise the funds through internal accruals for the factory, where it plans to produce its flagship product, Horlicks, a company statement said here yesterday. The company has also entered into a synergistic commercial alliance with Smithkline Beecham Asia Private Limited (SBAP), which will provide over 140 acres for the greenfield site. The factory will have an
annual capacity of 26,000 tonnes and is expected to go on
stream by the year 2002. The work on the project is
likely to begin October next, the release said. |
Angora breeding farms in the red KULU: The angora rabbits breeding farms in this district are in the red because of the non-professional marketing approach of the government run Wool Production and Marketing Federation (WPMF). The angora rabbit breeding was initially started at Pirdi near here by one private entrepreneur in 1962. In 1979-80 the North Temperate Research Station (NTRS) of the Central Sheep Wool Research Institute (CSWRI) Gadsa, which is working under Indian Council of Agriculture Research (ICAR) imported rabbits from Russia. In 1984 the CSWRI started imparting training to the local farmers for upkeeping, breeding and rearing of the animals. The institute supplied rabbits to the farmers and by 1989 about 400 rabbit farms were established in Himachal Pradesh.Initially it took off very well but the constant fall in the wool prices put a question mark on the fate of the farmers. The HP government came for the rescue and one Wool Procurement and Marketing Federation (WPMF) was constituted. In 1989 the Central Wool Board of the Ministry of Textiles, Government of India, supported the WPMF and the procurement and marketing infrastructure was strengthened. With the result the procurement price of the angora wool rose from Rs 550 to Rs 1,000/- per kg.An Umbrella project was introduced by the Himachal government in 1996. More than 600 farmers were trained. They were provided rabbits, cages and subsidised feed in Kulu, Mandi, Solan and Kangra districts. Consequently, as on today about 1500 farmers are producing the angora wool in HP and approximate two tons of the wool is produced every month. Since January 1998 the declining graph of prices have again become a matter of grave concern to the farmers. The price of Rs 1000 was brought down to Rs 925 by the WPMF in January this year. The procurement price of the WPMF as on today is Rs 850 per kg. The small farmers have no other option than to sell their wool to the federation on whatever rate they offer as they told that they have to feed their animals and are not in a position to hold the stocks. One of them said, “We have the living animals who are at the mercy of the monopolist federation”.The farmers of this district alleged that the federation had started stacking the wool stocks but never tried to explore the marketing. One of the farmers alleged that this was happening because of the lack of professionalism in the federation. He told that the WPMF did not have the marketing experts and the farmers are the sufferers. Another alleged that we fell victim to the follies of the government. The WPMF has more than 50 quintals of rabbit wool in the stocks here whereas the buyers take advantage of the surplus stocks with the WPMF. The government of HP should come forward to save the interests of the small farmers involved in the angora farming, by putting in the professional marketing persons. The government should also approach the Central Wool Board of India for the support price. Other constructive
measures should be taken to survive this agricultural
based industry, lest it faces the fate of 1989 while
about 90 per cent of the Angora Rabbit Farms were wiped
out in the state, one of the farmers added. |
IS this the time to buy? BSE broker Parag Parikh was explicit in his reply. It is said that the best buying time emerges out of a mood of depression, a lack of confidence, and a relative absence of speculation. Finally, a good time to buy also occurs in the absence of excitement. But, there is excitement galore in the market even today! Thus, this is neither the time to take money out of the stock market nor the time to put more money in.In such a scenario, sitting on your cash and waiting for a better buying opportunity to buy is the bet. During this year, it is unlikely that any broad upmove of the market will be witnessed. However, even while the sensex moves sideways, fundamentally sound stocks can provide fantastic returns. Just to give some examples, the sensex is today at about the same level it was in June 1995. In these three years, Hindustan Lever has appreciated by 155 per cent, Procter & Gamble by 95 per cent, Nestle and Cadbury by around 75 per cent and Indian Shaving Products by 264 per cent. The optimal investment strategy today, would thus be substantially the same. Invest in the best companies in the Indian investment universe; companies that provide high returns on capital employed, that operate in good businesses which are relatively immune to recession, have the best of management skills and the ability to last. At today’s prices, we once again recommend these stocks that have proved so profitable to investors in the past. All these stocks, we feel, are substantially underpriced today relative to their intrinsic worth.The pick of the lot at this moment appears to be Cadbury India Limited (CIL). The company’s name, which is synonymous with chocolates in India is now on a faster growth path. After having been an underperformer, as compared to the other companies mentioned above, it could now outperform the others over the next few years. With all its expansions and capital expenditure behind it for the next few years it should comfortably see higher volumes growth coupled with a faster growing bottomline. With the management targetting a 12 per cent volume growth and 20 per cent value growth over the next three years, the same targets have already been surpassed in the first four months of the current year. With the parent company, Cadbury Schweppes taking greater interest over the last couple of years, some of its international brands like Picnic and Perk have already been launched in India. A spate of new product launches (some of the international brands will be launched in India) have been planned in both the chocolates segment as well as the sugar confectionary business. Cadbury’s has a bright future ahead.Finally, a personal word of advice — the best market to invest in for an informed investor is a market that is trending sideways. Minus the euphoria. Fundamentally sound stocks
can be obtained at bargain basement prices by an investor
who has patience and skill. Wait for the opportune moment
extreme despondency depresses sentiment enough, the share
price falls and then, move in for the kill. |
Q: My query relates to the admissibility of house rent paid by son to father (reported in The Tribune dated 28.12.97) and a few weeks earlier by the husband to his wife. In both cases it has been advised that deduction of house rent paid is admissible. In this connection your kind attention is drawn to the judgement of Punjab and Haryana High Court in the case of Mr Justice Mittal, when payment of rent was made to his HUF a/c. It was not admitted. The relationship of tenant and land lord must exit. — MAHESH KUMAR, Chandigarh. Ans: As far as the Income-tax Act is concerned the payment made by a person towards house rent will be eligible for tax deduction from the amount received for house rent allowance. However, what is required to be seen is the person to whom the rent has been paid should be the legal owner of the house property and that the rent amount should have actually been paid. Once the rent is paid to the legal owner the relationship of Landlord and tenant is proved beyond doubt. Q: I
shall be grateful if you kindly reply to my query at the
earliest, as I have to deposit income tax based on your
reply. My query is: Ans: Yes, the profit on selling UTI units of UGS 2000 or UGS 5000 can be adjusted against the loss incurred on the units of any other tax saving schemes or for that purpose the loss by selling any type of shares, security and mutual funds etc. This is in terms of Section 70 of the Income Tax Act, 1961 which provides that the income from one source can be adjusted against the another source of income in the same head of income. Q: I am a retired government servant. I received about Rs 60,000 from closing of NSS account of my wife as nominee after her unfortunate death. No tax was deducted at source. May I know tax liability on this amount, if any, to enable me to file my I.T. return correctly.— A.S. KALRA, Mohali Ans: Please note that no Income-tax will be payable by you in respect of amount withdrawn by you from the NSS A/C of your wife. Q: The Punjab government allows travel concession to its pensioners, which is equal to one basic pension. This is given in the month of January after alternate year. Please let me know whether this amount is exempt, from income-tax or not. If exempt. please intimate the legal provision. — AMARJIT SINGH, Rupnagar Ans: The leave travel concession received by pensioner would be exempt from income tax twice in the block of 4 years. Now the travel concession can be availed even by Ist AC or by air subject to the same being made available by the employer. Q: I was
born in Himachal Pradesh about 75 years ago. I studied
for 2 or 3 years in a village school which also does not
exist today, as such no proof of my age is available. I
am an income tax assessee and my income will be around
1,50,000 for the financial year 1997-98. Kindly let me
know whether an affidavit submitted by me regarding my
age will be accepted by I.T.O. to give me relief of
income up to Rs 1 lakh due to myself being more than 65
years of age? |
Britannia Ind ITC IndusInd Bank |
Disciplinary proceedings Q: Whether Assistant Manager had jurisdiction to initiate the disciplinary proceedings and hence is there any error of law? Ans: The S.C. was called upon to answer this question in the case of Himachal Pradesh Transport Corporation v Kewal Krishan (1998-I-LLJ. 1058). A dismissed conductor of the appellant – Road Transport Corporation succeeded in getting his dismissal set aside before the Tribunal which held that the Assistant Manager had no jurisdiction to initiate the disciplinary proceedings and hence the entire action taken against the conductor was vitiated by error of law. The S.C. referred to revised Annexure ‘B’ which indicates that in respect of serial No. 58 relating to conductors, authority competent to make appointment is the Head of the office. The penalties in relation to Rule 11 of the CCS (CC & A) Rules are mentioned in items (i) to (ix). The authority competent to impose the penalty is the Head of the office. The appellate authority is the Assistant General Manager, the C.A.O. or D.M. of the Corporation. By proceedings dated 29.6.78 in exercise of the power under special serial No. 77 of the financial powers of the Corporation, Mr K.N. Uppal was declared as Head of the office. Thus, in the opinion of the S.C., though Mr Uppal was Assistant Manager, was designated under the statutory rules as Head of the office in terms of Annexure ‘B’. As a consequence, the S.C. held that action initiated by him (Asst. Manager) for the disciplinary proceedings against the respondent - conductor is well within the parameters of law. In other words, once Assistant. Manager is the competent authority, by virtue of him having been designated as Head of the office, he is the competent authority to appoint and is thus equally the competent authority to impose the penalty. In that way, the S.C.
allowed the appeal, the order of the Tribunal was set
aside and the suit was dismissed. |
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