EC strikes down India’s export promotion plans
NEW DELHI, Aug 23 — Four of India’s export promotion schemes have been struck down by the European Commission on grounds they were indirect subsidies to exporters which hit the European industry.

Dhariwal mill 'sick'
BATALA, Aug 23 — The future of the workers of New Egerton Woollen Mill, Dhariwal, in Gurdaspur district, is still hanging in the air after the mill has been declared sick as it is running into loss amounting to crores of rupees.

Telco, dealers differ on Mint
NEW DELHI, Aug 23 — Telco is engaged in a clash of opinions with its dealers over marketing its 1400cc car, code-named Mint.

New policy on fertilisers soon: Patel
NEW DELHI, Aug 23 — The Centre will come out with a new fertiliser policy, Mr A.K.Patel, said.

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Thomson ties up with Punjab manufacturer
NEW DELHI, Aug 23 — Thomson Consumer Electronics India Ltd is tying up with regional contract manufacturers for assembling colour television and is planning to invest Rs 200 crore at its Chennai plant.

Task force on grain storage set up
NEW DELHI, Aug 23 — The Department of Food and Civil Supplies has set up a task force to implement the recommendations of the steering committee on “introduction of modern technology in handling, storage and transportation of foodgrains”, which includes a pilot project in Punjab for the bulk handling of foodgrains.

Investments by PSU banks questioned
NEW DELHI, Aug 23 — A high-level parliamentary committee has questioned the large investments by PSU banks in government securities and expressed its dissatisfaction with the Reserve Bank’s defence of the same.

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EC strikes down India’s export promotion plans

NEW DELHI, Aug 23 (PTI) — Four of India’s export promotion schemes have been struck down by the European Commission (EC) on grounds they were indirect subsidies to exporters which hit the European industry.

These current schemes amount to financial contributions by the government which sacrifices duties, the commission has ruled on complaints against the schemes.

The schemes on which the EC has given adverse ruling are duty entitlement pass book (DEPB), export promotion capital goods (EPCG), export processing zone/export oriented units and income tax exemption.

The passbook scheme, discontinued since March 31,1997, was also found to be hurting the industry in EU.

On complaints that India extended export subsidies for anti-biotics, the EC ruled these were indirect subsidies to exporters harming interests of domestic industry in European Union (EU).

EC’s ruling came in wake of complaints by antibiotics producers in the European Community led by Antibiotics SA, Madrid (Spain), Biochemie GmbH, Kundl (Austria) and ACS Dobfar SoA, Tribiano (Italy) lodged on September 29 last.

In the order, EC imposed provisional anti-subsidy duties ranging between 6.6 per cent and 14.6 per cent for antibiotics exports from India, though three companies were let off with a zero levy.

Referring to the discontinued passbook scheme, which provides for utilising credits earned on export duties for imports, the EC said it was against the provisions of basic trade regulations in the EU.

The EC has, in fact, taken into calculation the reported benefits from the passbook scheme for imposing the anti-subsidy provisional duties.

Scrutinising the other four export growth schemes, the commission said India had failed to examine the actual transactions to find out if excess payment had been foregone for duty-free imports.

Considering the factors for the ruling, the EC said the volume of imports of anti-biotics from India increased almost 300 per cent between 1993 and June 1997. New Delhi’s share of the European Community market increased by 157 per cent during the same period.

Telco, dealers differ on Mint

NEW DELHI, Aug 23 (UNI) — Telco is engaged in a clash of opinions with its dealers over marketing its 1400cc car, code-named Mint.

While Telco wants to deviate from its earlier promise and collect bookings for the car, the dealers and retailers want to sell the car off the shelf.

“This has led to a clash of opinions between Telco and us. We have been trying to pursuade Telco not to go in for bookings, but they are pushing us to collect bookings,’’ Mr Steven G. Foster, Managing Director of Concorde Motors Limited, told UNI here.

Concorde is a Rs 100 crore passenger vehicle retailing joint venture between the Tata group and the Hong Kong-based Jardine International motor group. The Tata group holds 50 per cent equity in the venture through Telco, Tata Finance and Tata Industries and the balance is held by the Jardines.

According to Mr Foster, the days of booking a vehicle are passe. “In today’s competitive world, we have to cater to the consumers and give them the vehicles off the shelf. And that is what we were aiming for.’’

Mint, he said, will reach the showrooms by November. It will carry a price tag similar to Maruti 800. The company intends to produce 50,000 cars in the first year from its Pune plant which would later be raised to 1.5 lakh to two lakh units.

Telco is planning to invest Rs 1,700 crore in the project, of which Rs 500 crore has already been invested. The rest would come in phases and will be sourced from internal accruals.

The car is expected to give a fuel efficiency of 16 km to a litre. The standard version will boast of features such as radial tyres, tinted glasses, injected moulded glass pads, parcel shelf and a digital clock.

Five-door Gypsy next

NEW DELHI, Aug 23 (UNI) — Maruti Udyog Limited is working towards rolling out a 5-door version of its popular multi-utility vehicle, Gypsy.

The company has already procured the design for the new-look Gypsy from the renowned Mumbai-based vehicle designer Dilip Chabbaria, company sources told UNI here. Besides, negotiations are also on with Galaxy — the fibre glass body suppliers for Gypsy — for making the five-door version. The model would be made only in the hard-top version.

Though the work is going on in full swing towards having the product ready, no launch date has been finalised yet. The company is also working out the cost escalation that would be effected due to the modifications. Gypsy is presently priced in the range of Rs 2.70 to Rs 3.50 lakh for both soft-top and hard-top versions.

Dhariwal mill declared sick

BATALA, Aug 23 (PTI) — The future of the workers of New Egerton Woollen Mill, Dhariwal, in Gurdaspur district, is still hanging in the air after the mill has been declared sick as it is running into loss amounting to crores of rupees.

Records show that in 1994, the mill’s outstanding loan to be paid to the State Bank of India (SBI) was a whopping Rs 110 crore. The government grant to the four British India Corporation (BIC) units was slashed from Rs 80 crore to Rs 16 crore a couple of years back and as a result the four units had barely enough money to pay to its staff.

Besides, the government could have taken the decision to close down the mills in the mid-eighties rather than spending Rs 22 crore on its modernisation in 1989. The government should have first solved the raw material problem and then gone in for modernisation.

But no effort was ever made to improve the management of the mill, union leaders said.The mill, which manufactures the famous Kashgiri brand of woollen lohis that cost Rs 1,040 a piece in the market, is also known for Lal Imli blankets, shawls and woollen suitings.

It was also a regular supplier of blankets to the defence service till the late seventies.A 14-member Sanjha Mazdoor Sangrash Committee has been formed by labour unions under the presidentship of Mr Parshotam Lal.

He told visiting correspondents that the mill slipped into the red in the eighties when the supply of raw material, particularly Australian wool, dropped. As a result the mill stopped getting bulk orders.

New policy on fertilisers soon: Patel
Tribune News Service

NEW DELHI, Aug 23 — The Centre will soon come out with a new fertiliser policy as the final round of consultations have already been completed, the Minister of State for Chemicals and Fertilisers, Mr A.K.Patel, has said.

Speaking at the inauguration of the silver jubilee celebrations of National Fertiliser Limited here, Mr Patel said that the concerns of the industry and its views would be taken into account while formulating the new policy.

“We have already discussed with the chief executives of fertiliser companies the points raised by the Fertiliser Association of India, regarding the various areas of the Hanumantha Rao Committee report on fertiliser pricing”, the minister said.

Thomson ties up with Punjab manufacturer

NEW DELHI, Aug 23 (PTI) — Thomson Consumer Electronics India Ltd (TCEIL) is tying up with regional contract manufacturers for assembling colour television and is planning to invest Rs 200 crore at its Chennai plant.

The company has already firmed up pacts with three such manufacturers in Punjab, West Bengal and Maharashtra to increase penetration of its colour television, its Managing Director V.K. Chopra told PTI.

Lack of volumes is the reason why TCEIL has taken the route of contract manufacturing, Chopra said but declined to divulge the names of the manufacturers.

As per the new plan the contract manufacturers will buy Thomson’s imported colour television kits from Chennai and roll out the finished televisions, which TCEIL will then market in the respective regional territories.

Task force on grain storage set up
Tribune News Service

NEW DELHI, Aug 23 — The Department of Food and Civil Supplies has set up a task force to implement the recommendations of the steering committee on “introduction of modern technology in handling, storage and transportation of foodgrains”, which includes a pilot project in Punjab for the bulk handling of foodgrains.

Apart from the pilot project, the committee has also made recommendations on mechanisation of harvesting process, introduction of community storage practices and upgradation of technology for bulk storage, and handling and transportation of foodgrains.

The committee was set up last year and submitted its report in February this year.

The Department has also decided to set up a small cell in order to ensure speedy implementation of the decisions of the task force.

The task force, under the chairmanship of the Secretary, Food and Civil Supplies, will have senior level officers from the ministries of Agriculture, Surface Transport, Commerce, Finance, Railways and Planning Commission as its members. The Managing Directors of the Food Corporation of India, the Central Warehousing Corporation and the Punjab State Agricultural Marketing Corporation will also be members of the committee.

Mr Balbir Singh, Joint Secretary, Administration and Storage will be the Member Secretary of the committee. Modernisation of storage facilities of foodgrains has become necessary as post-harvest loss of foodgrains in India has been estimated at 20 million tonnes annually.

The task force will also look into the formulation of a national storage policy.

According to the steering committee, the objective thrust of the proposed policy should be to incorporate bulk storage of foodgrains in the national agenda for the development of infrastructure.

Investments by PSU banks questioned

NEW DELHI, Aug 23 (PTI) — A high-level parliamentary committee has questioned the large investments by PSU banks in government securities and expressed its dissatisfaction with the Reserve Bank’s defence of the same.

“The committee members are unable to agree with the RBI’s contention that investments by PSU banks in government securities is due to low off-take credit, besides securities having a zero risk weight’’, the committee report says.

The reply furnished by the RBI implies that only during low-credit take-off period banks invest their funds in zero risk government securities.

Commercial banks investment in government securities were in excess by 5.8 per cent, 6.9 per cent, 6.6 per cent, 7.4 per cent and 8.2 per cent respectively during the last five financial years ending 1997-98, says the report of standing committee on finance headed by Murli Deora, submitted to Parliament recently.

Nepal too sheds tears over onions

KATHMANDU (IPS): It has been a difficult few months for Rajaram Sharma, a government employee who lives in Nepal’s capital with his wife and three children.

Each day, as he ventures out to the nearby market in Baneshwar, a Kathmandu suburb, he worries if the family will be able to afford the vegetables and fruits.

Potatoes have been selling at Rs 30 (one dollar is roughly 80 Nepali rupees) for one kilogram, onions at Rs 40 and tomatoes at an exorbitant Rs 55, way beyond what the poor and middle class can afford to pay.

“It pains my heart to pay such outrageous rates for these common vegetables,” says Sharma. “Prices have been skyrocketing for the last few months. Poor people like us can barely afford to eat fresh vegetables.”

At the local market, a woman sitting on the pavement selling vegetables tries to tell customers that she is not to blame for the rising prices. “We have to pay ridiculously high prices ourselves to the wholesalers,” she laments.

For the last two months, prices of essential commodities, including cooking oil, rice and lentils, have been rising nearly daily. According to a government report on last month’s wholesale prices at Kalimati, Kathmandu’s biggest vegetable and fruit market, “... most commodities recorded substantially higher increases ranging from 247 per cent to 47 per cent”.

The report blames the price rise on natural causes like the weather. “The higher percentage increase of vegetable prices this year is mainly due to high rainfall, hailstorms and other seasonal factors which have damaged crops and led to less arrival of commodities in the market,” says the report.

Flooded
HONG KONG (ANI): China’s economic growth rate will be pushed below target in the third quarter of the year because of the devastating floods.

Industrial output in the third quarter will be affected due to flood, says Hu Billiang, a senior economist at SG Securities.

China’s worst flood on the Yangtze river since 1954 has killed more than 2,000 people, destroyed 4,78 million hectares of crops and caused a close to $ 24 billion in damage.

The floods have also caused havoc in the nation’s industrial northeast, inundating hundreds of oil wells at Daqing, China’s largest oil field.

China has set an industrial output growth target of 11 per cent for this year to meet its goal of 8 per cent gross domestic product (GDP) growth.

Flooding, however, will not affect plans to launch large-scale infrastructure projects, including highways and railroads, as most were in provinces unaffected by torrential rains.

Flooded areas represent about 5 per cent of the total farmland and the summer rice harvest damaged by the floods accounted for about 10 per cent of annual grain output.

The State Statistical Bureau has said China’s summer grain output fell 11 per cent year-on-year to 113.1 million tonnes because of the Floods.

‘Privatise’
WASHINGTON (PTI): The International Monetary Fund has asked Sri Lanka to speedily privatise its state-owned banks to address its long-standing and fundamental problems that have weakened the banking sector.

The recommendations have been made by the Executive Directors of the IMF after considering the generally favourable report of its staff on the island’s economy during the funding agency’s annual consultations.

Drawing lessons from the Asian crisis, the IMF has noted that financial sector weaknesses, including the relationship between the state and the banking sector, need to be promptly identified and corrected.

Corruption
WASHINGTON (PTI): Twenty to 30 per cent of funds earmarked for World Bank projects in Indonesia have been siphoned off by corrupt officials, a World Bank memorandum reveals.

The Wall Street Journal, in a report, has said the bank’s discovery of corruption in Indonesia in August, 1997, is belated. Until July it had been denying the scandal.

In July last year, Jean Michel Severino, Vice-President of the World Bank for East Asia, had said: We know exactly where our money is going. we do not tolerate corruption in our programmes.”

The World Bank called the report “largely anecdotal” and said that it found no wrongdoing by bank staff.

By J.C. Anand
Honeymoon with new beauties on Dalal Street

THE market scenario is fast changing and no investor can afford to ignore it. The blue-chips of yesterday are no longer blue-eyed babies of today’s market. Low P/E ratio scrips are no longer favoured. The market favourites have high P/E ratios. A top executive of a high ranking mutual fund has gone on record that his mutual fund avoids investment in scrips which have a P/E ratio of less than 20. The entry of the foreign institutional investors, and their recent flight, the Asian currency, the market crisis and the impact of economic liberalisation, both good and bad, have changed the market scenario. More changes may be expected during the next two to three years.

A recent analysis by a leading financial daily indicates that the “Dalal Street has been having a honeymoon for over a year now with a bevy of new beauties: infotech, fast-moving consumer goods and pharma sectors.” The old market favourites like TISCO, Grasim, Hindalco, Indian Rayon, Indian Hotels, and even L & T and TELCO no longer pull any weight in terms of market capitalisation.

The new favourites are consumer goods companies with well-established market brands like Hindustan Lever, Nestle, Britannia and the infotech companies like Infosys Technology, Satyam Computers, NIIT. The multinational pharma and speciality chemical companies are being picked up by shrewd investors and mutual funds for this sector holds promise of a very bright future.

It may be interesting to note that according to press reports in some leading financial papers, the government has decided to grant recognition to the “product patents” in the form of a new Bill which will replace the Patents Act of 1970.

Under the World Trade Organisation pact, India has to introduce a transition regime till April 1999. Earlier, an expert committee set up by our government had even suggested that India should set up a “product patent” regime by the year 2000, five years ahead of the WTO stipulation. India has also decided to enrol itself as a member of the Paris-based patents organisation.

At present India recognises only “process patent” and does not accept “product patent”. In other words, if a company like Pfizer introduces a new drug which has a patent in many other countries, any Indian company can produce this drug in India by manufacturing it by some “process” different from that followed by Pfizer.

But when “product patent” is recognised by India, no Indian company will be in a position to manufacture and market such a drug at all. The new Patent law would uphold patent for both “process” and “product” of a drug or speciality chemical or any other patented product in India.

The recognition of the “product patent” in the year 2000 (as the top expert committee recommended), or in 2005 will place the multinational companies on the top and the Indian pharma and speciality chemicals companies, including those manufacturing pesticides and dyes, at the bottom.

These companies will be in a position to produce only such drugs and chemicals which have been patented on the basis of their own research or those where the patents have lapsed after completing their specified term of years.

The multinational pharma companies have a great future. It is interesting to note that even in the present depressed market, these pharma scrips have been performing very well. In this column, some pharma shares have been recommended in the past — such as Novarties (around Rs 320/- per share), Wyeth Lederdale (around Rs 370/- per share), German Remedies (around Rs 340/- per share).

These companies can be recommended even now, though the market-price of these shares has already gone up. Hoecht Marion and Clariant India appear to be rather under-priced around Rs 370 (for Hoechst) and Rs 180 (for Clariant). Astra IDL may also move up if Astra of Sweden is able to gain 50 per cent of equity holding with some kind of settlement with the Hindujas. Glaxo and Parke Davis may also be put on the watch list.

Another interesting development during the fortnight is the introduction of a new Index “S & P CNX Fifty” in place of NSE — 50 Index. This new index has been launched by the joint effort of Crisil and National Stock Exchange.

It has also a technical tie-up with Standard and Poor, a leading world credit rating agency. This index is based on market capitalisation-weighted method and reflects the total market value of all the stocks in the Index relative to a particular base period.

During the current fortnight, the market is likely to move within narrow limits, with proclivity to sag rather than to improve.

By K.R. Wadhwaney
Package tour from IA

Engineers are as important as commanders and pilots on board an aircraft. All members of the cockpit crew are expected to be not only competent and mentally sharp, but also physically fit. Any lapse in mental or physical fitness can be suicidal for trainee pilots and health of an aircraft.

There is a huge backlog of trained pilots and engineers, waiting for jobs in national and private carriers. Despite this, there is a heavy rush for training of pilots at several flying clubs.

More than 30 trainee-pilots are receiving lessons at the Pinjore Flying Club, which has a good reputation. The club has different models of aircraft, including Pushpak.

Trainees are, however, wary of undergoing their coaching because a technician-turned-engineer has been much below the prescribed physical standards.

Some trainees have sent their representations against the engineer in question.

Fire safety
Following the gutting of Terminal A-1 at Indira Gandhi airport two years ago, there is more awakening among officials of the Airport Authority of India (AAI), DGCA, airlines and others. In the wake of this, a firm Rafiki has introduced the multipoint detector/sounder and twinflex two-wire conventional system technology.

Several officials attended the seminar, organised by Rafiki officials in the Capital. The feeling among the officials was that the system was worth trying so that mishaps of serious nature, like, the burning of the terminal building A-1 and the Uphar cinema tragedy can be successfully combated.

New scheme
With a view to wooing passengers, Indian Airlines has floated a “package tour” scheme which allows discount of 15 per cent.

The concession is admissible to a minimum of four full fare paying passengers.

It is mandatory that passengers buy tickets for round-trip. Re-routing is not permissible after commencement of the tour.

The scheme, valid until September 30, is available for all sectors except for travel to and from Agatti, Leh and Port Blair.

Unlike Indian Airlines, which has started many innovative schemes, the same cannot be said of Air-India which has, in the meantime, appointed two Deputy Managing Directors, P.B. Kumar and J.N. Gogai. They were reportedly senior-most and deserved their promotion among the five candidates.

Cathay Pacific
Tom Wong, a keen golfer,is the new country manager of Cathay Pacific in India, Nepal and Bangladesh. He succeeds Adrian Harley, who moves to Hong Kong.

Pal Peugeot
I am holding debenture of Pal Peugeot with Folio No PPD 003896 and have been writing to Registrar, Karvy Consultants with copies to Pal Peugeot about the non-receipt of the interest. Now four instalments of interest are due. Karvy Consultants coined reply is that they have forwarded the case to the company but the Pal Peugeot is mum.

—Narinder Mohan, CHANDIGARH

Syaltek Forestry
I deposited Rs 10,000 with Syaltek Forestry Services India Ltd, Manimajra, Chandigarh. I was issued cheque No 0/B23-446101 dt. 11.5.98 drawn on SBI, Sector 22-C, Chandigarh for Rs 14,000. On maturity the cheque was presented in the bank on 11.5.98. The cheque bounced back. All efforts to contact the company bore no fruit.

—Sudarshan Singh, JALANDHAR

Escorts
I sent cheque no 164104-110024118 dated 30.6.97 for Rs 1057.39 on PNB New Delhi and another cheque No 164107-110024118 dated 2.1.98 for Rs 5.91 on the same bank to M/s Escorts Ltd, Sciendia House, New Delhi for revalidation. Despite many reminders, no revalidated cheque is received.

—D.R Tayal,PANCHKULA

ACE Lab
I have not received the dividend on 167 shares for the year 1996-97. My regd Folio No is 17560. Despite many reminders there is no reply.

—Rajesh Khanna,FARIDABAD

DCM Fin
I deposited Rs 5000 with DCM Financial Services Ltd, 75 Amrit Nagar, NDSE Part - I, New Delhi for a period of one year on 10.5.97 at the interest rate of 17.50 per cent. Maturity amount of Rs 6875 become due for payment on 10.5.98. Despite reminders, I have not received the maturity amount.

—Kulwinder Singh Sandhu,BATHINDA

Biz briefs

Inflation falls
NEW DELHI, Aug 23 (UNI) — With prices loosening their grip on food articles and non-food articles, the inflation rate declined for the second successive week to touch 7.94 per cent on August 8 after staying above 8 per cent for four consecutive weeks. It was 8.04 per cent in the preceding week. It was for the second occasion in the current financial year that the inflation rate had come down to touch below the 8 per cent mark. It was for the fifth time in current fiscal year that the inflation rate had seen a downward trend. It has been somewhat erratic in its movements since July 18.

PSB rating
CHANDIGARH, Aug 23 (TNS) — Crisil has assigned “P1+” rating for the certificate of deposits programme of Punjab & Sind Bank aggregating to Rs 250 crore. The rating indicates that the degree of safety with regard to the timely payment on the instrument is very strong. The bank registered a growth of 225 per cent in its net profit for 1997-98, which increased to over Rs 65 crore as compared to Rs 20 crore last year. The capital adequacy ratio of the bank has improved to 11.39 per cent from 9.23 per cent last year.

Festival ends
CHANDIGARH, Aug 23 (TNS)— About 30,000 persons, mostly children, participated in the 17-day games festival which concluded with a lucky draw at “Time Out” in Sector 35 tonight. Similar festivals will be held in Ludhiana and Patiala in September and October, according to Ms Anoop Michra, the project consultant. Video games attracted enthusiasts aged between three and 60. To lure children, free coupons were distributed in many schools in Chandigarh.