Tuesday, August 25, 1998
today's calendar
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B U S I N E S S | Tuesday, August 25, 1998 |
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spotlight today's calendar |
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Decline in rural &
urban poverty No
competitive devaluation: PM |
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Kim Kwang-shik, in vest, who led a month-long strike at Hyundai Motor Co, shakes hands with its Chairman Chung Mong-gyu after the management and union officials reached a compromise to end the strike at Ulsan on Monday— AP Hyundai
strike ends |
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ICICI offers safety bonds Sharp
fall in capital goods growth rate Live
& let live, court tells T-series family Re
firms up against dollar DoT
to have marketing agents 10,000
women to be trained in stitching BOI
revises rates Only
10 shares performed well Bobcards
to tap capital market Bhiwani
Textile plans to expand |
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Decline in rural & urban
poverty NEW DELHI, Aug 24 - Poverty incidence in India in both rural and urban areas has declined between 1987-88 and 1993-94, says a study conducted by the Central Statistical Organisation(CSO). The study released today by the Secretary , Department of Statistics, Mr M D Asthana, states that the decline in poverty is regardless of the poverty line or price index used. By disaggregating the rural and urban sectors within the state, the study found out that states which performed better in reducing rural poverty also perfumed well in the aggregate. Rajasthan fared exceedingly well and rural poverty fell by more than twice the national average. In Bihar ,on the other hand, rural poverty fell by a little less than a percentage point while the urban poverty fell by twice the national average. For the first time in India , the regional-level figures are worked out at the sectoral level (i.e urban and rural) by using raw data and not the published tables of NSS. Dr Subhashish Gangopadhyay of the Indian Statistical Institute, who carried out the study along with and Dr Amaresh Dubey of the North - Eastern Hills University, stated that Rajasthan’s better performance in reducing the incidence of poverty in the state was perhaps due to greater awareness among the people through greater participation of NGOs in the state. The second part of the report, conducted by Dr P. D . Joshi, looked into the changing consumption expenditure in India and found that the average daily intake of calories by both urban and rural population had decreased between 1971-72 and 1993-94. The report attributes the decline to behavioural changes in the consumption pattern, particularly in respect of qualitative food items like milk and milk products, meat, fish egg etc. An analysis of the percentage expenditure on the items of food to total food expenditure indicates that the percentage expenditure had increased from 1972 -73 to 1993-94 in respect of milk and milk products, edible oils, meat, fish,egg, vegetables, fruits and nuts and beverages in both the rural and urban areas. Liberalisation behind it? Prof Gangopadhyay has said it is too early to say whether liberalisation has contributed to the reduction in poverty. “Theoretically liberalisation would contribute to reduction in poverty but for empirical proof we will have to wait for some time,’’ he adds. HP worst performer The study says Ladakh, Pondicherry, Rajasthan, Kerala, and Madhya Pradesh were the best performers in reducing poverty during the period, while Arunachal Pradesh, Manipur, Himachal Pradesh, Assam and Mizoram were the worst performers. No more forecasts The Central Statistical
Organisation will not give forecasts on economic growth
henceforth and constrain itself only to advance
estimates, Mr M.D. Asthana, Secretary, Department of
Statistics, said today. We are in the business of
estimates and we are not forecasters,’’ he
said. |
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No competitive devaluation: PM NEW DELHI, Aug 24 (PTI) — Prime Minister Atal Behari Vajpayee has strongly disfavoured any competitive devaluation of currencies saying the East Asian crisis was a pointer to the harm it can do to the financial and capital markets. This is one of the areas where India and the South East Asian Nations should be looking at strategies to prevent any crisis, Vajpayee told The Nation” newspaper of Thailand. “We have neither triggered competitive devaluation in the past nor indulged in it despite pressures to do so,” he told the newspaper in an interview. The Prime Minister’s remarks assume significance in the context of reports that China is considering devaluing the yuan to cope with the East Asian crisis. Rejecting suggestions that India failed to respond to the financial turmoil in Thailand and Indonesia, Vajpayee said India did respond to the crisis. India did
express confidence in the capacity of ASEAN countries to
overcome the present challenges, he said adding that
“we have gone beyond expressing moral support in
regional and international fora”. |
ICICI offers safety bonds CHANDIGARH, Aug 24 — The ICICI will offer Rs 300 crore safety bonds from August 27 to September 27 with the right to retain an over subscription of up to Rs 300 crore. There will be four types of bonds on offer — encash bonds, tax saving bonds, money multiplier bonds and regular income bonds. The bonds are being issued at a price of Rs 5,000 per bond for a period of seven years. The interest rates will vary every year — 9 per cent in the first year, 13 in the second, 14.5 and 15.5 per cent in the third and fourth years. While in the fifth and sixth years the rate will be 16.5 per cent and 18 per cent, in the seventh year it will be 18 per cent. The annualised yield on these bonds works out to be 14 per cent. The encash bond is meant
to provide more liquidity to investors. The ICICI will
buy back the encash bonds after one year and provide buy
and sell quotes for the other bonds on stock exchanges. |
Sharp fall in capital goods
growth rate NEW DELHI, Aug 24 — Even as the overall industrial growth languished at 4.3 per cent in 1997-98 with all-round misgivings over recovery in the coming months, sector-specific trends indicate a sharp decline in growth rates in capital goods, consumer durables and automobiles, while cement, tyres, coal and steel clocked positive rates of growth, according to a study. An analysis of the performance of selected sectors by the Associated Chambers of Commerce and Industry of India (Assocham) shows that the capital goods sector recorded a negative 4 per cent growth due to an anomalous duty structure. During 1997-98, imports of finished capital goods were cheaper than domestic goods, which adversely affected the production of the latter. It notes that the import of capital goods may continue to be cheaper even in 1998-99 despite additional custom duty of 4 per cent due to currency depreciation in most of the south-east Asian countries and Japan. Consumer durables recorded a negative 29.6 per cent growth. This is attributed to a slump in sales even after a spare of replacement schemes offered by all companies across all segments, pile-up of inventories, coupled with high cost of funds and squeezing cash flows which compelled companies to cut back production for the rest of the year. The downturn in sales was a combination of cyclical downswing in the economy and the entire consumer durables industry. Automobiles suffered 12.5 per cent decline in growth on account of decline in demand from the core sectors (commercial vehicles), fall in domestic demand and slowdown in overall industrial growth. There was also a decline in automobiles exports by 4.7 per cent for 1997-98, owing to poor quality and technology. Cement, however, turned in a 9.6 per cent growth rates due to rise in capacity at a rate of 9 per cent for 1997-98, and increase in consumption at 8.5 per cent for the year. It is noteworthy, however, that consumption is increased at a slower rate than production which has led to oversupply of cement. Consequently, cement prices have fallen and so have the profit margins. The tyre industry recorded a mere 4 per cent increase in growth rate in April-January, 1997-98. This was due to recession in the transport sector. But the production cuts are less than the fall in automobiles production. This is because the tyre makers do not want to lose out on whatever market share is left. The fall in consumption is less than slump in production, leading to inventory pile-ups. There is also a decline in tyre exports. The coal sector grew by
3.6 per cent. This is attributed to poor off-take of coal
by power stations and steel plants and rise in imports
leading to tougher competition for domestic producers. |
Hyundai strike ends after deal SEOUL, Aug 24 (AFP) — Management and union leaders at South Korea’s troubled car maker Hyundai Motor Co. today reached a deal to end a bitter and prolonged dispute which has paralysed the firm for more than a month. But experts warned while the deal may have averted the danger of bloody raid and nationwide labour unrest, it would send wrong signal to foreign investors and local companies seeking signs of reform. A Hyundai spokesman said the firm would reopen its plants in southern city of Ulsan tomorrow to resume normal operations “as soon as possible.” The plants have stayed
shut since July 20 after union workers downed tools to
protest lay-offs. The on-off stoppages, which began in
May, have cost the country more than a billion dollars in
production and export losses. |
Live & let live, court tells T-series family NEW DELHI, Aug 24 (PTI) — The feud to control the T-series logo, popularised by audio king Gulshan Kumar, has reached the Delhi High Court with family members litigating over the use of the logo in the detergent sector at present giving an annual turnover of over Rs 40 crore. Gulshan’s brother Gopal Krishna alleged before Justice Dalveer Bhandari that “Gulshan Kumar’s son Bhushan Kumar wants to enter the soap and detergent market under the ‘T-series’ brand and that is why he wants to deprive me of the popular group logo.” “This is the real reason why he wants to take away the logo ‘T-series’ which was used by Gopal Krishna owned Gopal Soap Industries since 1988,” his counsel Mukul Rohtagi and Prathiba Singh contended before the court. The court, while adjourning hearing for tomorrow observed “the family should adopt a policy of live and let live.” Gopal Krishna and his wife Rajni Dua in their petition said that as per the February 21, 1998 agreement between the family members, the ‘T-series’ logo in regard to cassettes had gone to Bhushan Kumar and other family members. But the detergent business
under the same logo went to Gopal Krishna and there was
no way that they could withdraw this from Gopal Soaps and
Rajni Industries. |
Re firms up against dollar MUMBAI, Aug 24 (PTI) — The rupee today firmed up moderately against the US dollar on fresh sales by banks and other corporates in a one-way trade on the forex markets. The Indian currency opened at Rs 42.55/58, slightly above Friday’s closing of Rs 42.56/57 and gradually moved up to close at Rs 42.46/47 on improved dollar sales by unwinding of long dollar positions by banks and corporates. The rupee has staged a
remarkable rally from a record low of Rs 43.68/71 on
Thursday due to measures taken by the central bank. |
DoT to have marketing agents NEW DELHI, Aug 24 (PTI) — The government today decided to engage marketing agents to popularise value-added telecom services and accelerate its introduction in the country. Value-added services such as intelligent network, high speed V-Sat network, remote area business message network, integrated services digital network, and the Internet would be popularised by introducing the system of marketing agents, an offical release said. The scheme will be
implemented in select cities such as Delhi, Calcutta and
in the states of Maharashtra and Tamil Nadu except Mumbai
and Chennai. |
10,000 women to be trained in
stitching MUKTSAR, Aug 24 — To uplift the social and economic status of women, the Punjab Small Industrial Export Corporation (PSIEC) will train 10,000 women in football stitching . This was announced by Mrs Surinder Kaur Badal, chairperson, Punjab Health Welfare Association, while inaugurating a football stitching training centre at Katianwali village in the district here today. Addressing a function, she
said the PSIEC had given training in carpet-making to
about 4,000 women so far and in the current year 2,400
more women would be trained. |
BOI revises rates MUMBAI, Aug 24 (PTI) — Bank of India (BOI) has revised upwards the interest rate by 1 per cent on domestic term deposits of maturities ranging from 46 days to one year with effect from today. Continuing to offer interest rate on deposits of up to 45 days at 5 per cent, BOI now offers 8 per cent for maturities ranging from 46 days to 179 days and 9 per cent for 180 days to one year. BOI has retained interest
rate on deposits of over one year two years at 10.50 per
cent, over two years to three years at 11 per cent and
over three years at 11.50 per cent. |
Only 10 shares performed well MUMBAI, Aug 24 (PTI) — ITV and HLL have outperformed the popular 30-share Bombay Stock Exchange (BSE) sensex by over a 100 per cent since December 1996, the last time the bourse bottomed out. While the stock markets have seen a roller coaster ride in the last one and a half years and almost touched the December 1996 level last week, only 10 scrips did well. Between December 4, 1996 and August 21, 1998, scrips of ITC, HLL, Tata Tea, Indo Gulf Fertilisers, ICICI, Reliance, Reliance Petroleum, HDFC, ACC and BHEL outperformed the market, according to equity analysts here. Among the biggest losers vis-a-vis the sensex were textile majors like Century, Arvind Mills, Grasim, Indian Rayon and heavy industries like SAIL, Telco, IPCL and Mahindra and Mahindra. Analysts ascribed political uncertainty, economic slowdown in core sectors like cement and steel, low FII interest in the wake of the Southeast Asian financial mess and the economic sanctions for the poor market sentiment. Even actively traded
scrips like State Bank of India, MTNL, Hindalco, HPCL,
IDBI and Tisco lost by 17 per cent, 20 per cent, 23 per
cent, 26 per cent, 38 per cent and 42 per cent
respectively. |
Bobcards to tap capital market MUMBAI, Aug 24 (PTI) — The Bank of Baroda’s (BoB) wholly-owned subsidiary, Bobcards Ltd, has firmed up plans to tap the capital market with a public issue of equity to the extent of 49 per cent. “We are ready. We are just waiting for the market to be conducive,” BoB chairman K. Kannan told reporters today after launching Bobcards’ premium “gold card” in association with Visa International. The current paid up capital of BoB Ltd is Rs 10 crore and fresh issue of capital to the public will constitute 49 per cent of the post-issue paid up capital, he said adding Bobcards already had a three-year profit making and dividend paying record. BoB is also planning to introduce credit cards at its branches in Mauritius. Mr Kannan said credit card business was technology intensive and a lot of investments would be needed for installing latest equipment. During the last three years, Bobcards’ turnover has gone up from Rs 319 crore to Rs 844 crore. The “gold card”
targeted at the high-income group has several attractive
features including credit limit of Rs 1 lakh, personal
accident insurance coverage of up to Rs 15 lakh for the
card-holder and Rs 2 lakh for the spouse of the
card-holder. |
Bhiwani Textile plans to expand NEW DELHI, Aug 24 (UNI) — Bhiwani Textile Mills (BTM), a subsidiary of Grasim Industries Limited, said today that it was currently implementing a Rs 35 crore modernisation and expansion plan in its existing spinning and weaving units. “We are importing high-technology looms besides modern finishing and processing machinery from Europe which will be installed in the fabrics division,’’ said Grasim’s Executive President D.S. Agarwal. The plan will be executed by the year-end. Early this year, BTM had completed a Rs 40-crore expansion exercise of 1,400 spindles. The company makes 7.5 lakh metres of fabric per month of which 45 per cent is exported. Its production is likely to be 9.5 to 10 lakh metres by March, 1999, Mr Aggarwal said. He was talking to UNI after the company launched two new fabrics — wonder wash fabric and perfect feel finish fabric. The polyester viscose fabrics are treated with specially developed chemical SR3 which give them stain resistant properties. Mr Aggarwal said one of the benefits of the special treatment to the fabrics was that they required little or no detergent during washing. Also, the special treatment made the fabric more durable, soft and wearable during hot weather. Bhiwani Textile Mills is a
composite mill having spinning, weaving and processing
facilities under one roof. Grasim’s annual turnover
now exceeds Rs 4,000 crore. |
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