Saturday, July 18, 1998
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B U S I N E S S | Saturday, July 18, 1998 |
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It’s a big boy’s game:
Bhagwati NEW DELHI, July 17 — Renowned economist Jagdish Bhagwati today warned that there was no room for complacency following the US move to relax economic sanctions imposed on India after the nuclear tests... RBI launches hi-tech service CHANDIGARH, July 17 —The Reserve Bank of India has introduced a new facility “Electronic Clearing Service-Credit Clearing” with immediate effect in the city... Concessions for oil refinery CHANDIGARH, July 17 — The Punjab empowered committee which considers incentives for Rs 100 crore and above projects has allowed concessions to HPCL’s Rs 16,000 crore oil refinery at Bathinda... |
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Colour
TV sales fall by 50 pc |
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Minister ‘misled’ on
Puncom offer CHANDIGARH, July 17 — The Mohali-based Telecom Engineers of India (TEI) has charged the DoT authorities with “misguiding” Communications Minister Sushma Swaraj about the Punjab Communications Limited (Puncom) offer to supply WLL telephone equipment for 36,000 UP villages... ITDC disinvestment NEW DELHI, July 17 — The government’s decision to appoint global advisers for disinvestment of stakes in ITDC, despite a detailed report by the Disinvestment Commission, is affecting the panel’s credibility, its Chairman G.V. Ramakrishna has said... Capital flight from North NEW DELHI, July 17 —There is a capital flight from the North to the rest of the country. The freedom given to banks to deploy their funds to achieve highest possible profitability has “resulted in fund parking in large corporate houses... Blow to anti-dumping duty lobby BONN, July 17 — In a major blow to the anti-dumping duty lobby, India and five other nations have won the support of the majority of the 15-member European Union (EU)... Ponds, Microsoft tie up CALCUTTA, July 17 — Pond’s Institute, the skin care research wing of cosmetics company Pond’s, has tied up with Microsoft’s American On-line to create a consumer interactive centre on the world-wide web... Check Out  |
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It’s a big boy’s game:
Bhagwati |
RBI launches hi-tech service |
| Concessions for oil refinery Tribune News Service CHANDIGARH, July 17 — The Punjab empowered committee which considers incentives for Rs 100 crore and above projects has allowed concessions to HPCL’s Rs 16,000 crore oil refinery at Bathinda. The committee meeting, held on Wednesday, was chaired by the Chief Minister. HPCL was represented by its Chief General Manager, Mr R.K. Madan and General Manager, Mr R.N. Sharma. The company was told that no lease rentals were levied in the state. Likewise no stamp duty and registration charges are leviable on the land acquired.HPCL will not have to pay octroi as the refinery will be located outside the municipal limits. Instead of levying the departmental charges at the rate of 14 per cent, acquisition charges may be paid on an actual basis.The committee allowed exemption from electricity duty for 15 years on generation of power, but did not agree to give free power supply during the construction period. HPCL wanted investment incentive or subsidy at the rate of 1 per cent of the capital cost without any ceiling. The committee said the maximum benefit allowed was Rs 50 lakh. The company then dropped the demand. |
| Colour TV sales fall by 50 pc NEW DELHI, July 17 (PTI) — The colour television sales through various exchange schemes on 21-inch sets have fallen by over 50 per cent in June and will remain affected in the coming months because of the skewed excise announcements in the 1998-99 Budget, according to the Consumer Electronics Manufacturers Association (CETMA). “The Rs 2,400 excise payout on all 21-inch colour televisions regardless of their maximum retail price is hurting the industry badly. If something is not done soon, we can forget about achieving the 25-30 per cent growth level projections made before the Budget announcements,” CETMA President K.S. Raman told PTI. According to the Budget announcements, all 21-inch colour television sales must ensure Rs 2,400 levy as excise, which is at least Rs 600 more on each television sold than what was being paid last year.Prior to this, a 21-inch CTV manufacturer had to pay 18 per cent of 70 per cent of the maximum retail price (MRP) — which works out to Rs 1890, taking the average price of a 21-inch TV to be Rs 13,000. But the government realised that it was losing revenue heavily by charging excise like this.“What the government did not realise was that it was losing heavily on sales made through the exchange schemes in this format.” said Raman. Earlier, in a scheme where a new 21-inch TV was being sold for Rs 9,990 in exchange for an old set, the manufacturer used to post the figure of Rs 9,990 as his MRP and thus paid lesser excise than what the law demanded.“But with the post-Budget announcements, all TV makers end up paying Rs 600 more per unit on the 21-inch sets,” says Raman. As a solution, CETMA has suggested to the government to charge Rs 1600 as excise on all 21-inch sets with MRP of 13,000 but take the previous calculations of 18 per cent on all sets with MRPs above Rs 13,000. “This will ensure that various schemes and promotional offers do not get a setback, since the fiercely aggressive CTV market is virtually expanding via these schemes,” Raman said. The 21-inch televisions account for over 40 per cent of the total sales in the 2.6 million set colour television market and form the mass-selling segment of the TV industry. CETMA is also taking a representation to the government to bring its attention to other issues like Modvat restrictions and lack of the promised indigenisation levels by the multinational CTV companies in the country. |
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Out When insurance claims are settled late by Pushpa Girimaji THE quasi-judicial bodies constituted under the Consumer Protection Act have always frowned on delays in settlement of insurance claims. And over the years they have formulated a specific time-frame beyond which an insurer is liable to pay 18 per cent interest on delayed payment. In one of the earliest cases on the issue (Col Bhim Singh vs Regional Manager, National Insurance Company), where the insurance company had settled the claim of Rs 2 lakh on an insured mare, but had taken 30 months to do so, the National Commission held that a period of four weeks was a reasonable time for the insurance company to have settled the claim. “A number of cases have come to the notice of this Commission where there have been inordinate delays in the finalisation or payment of the claims of the insured. We have reason to suspect that the payment of insured amounts, which are not in dispute, are often delayed with a view to coerce the insured into giving a receipt in full and final discharge of the claims of the insured”, the National Commission remarked.It then directed the insurance company to pay interest of 18 per cent on Rs 2 lakh, calculated from four weeks after submission of the claim, till the date of payment. It also awarded Rs 5000 as further compensation for harassment and Rs 10,000 towards travel and lodging expenses incurred by the complainant in pursuing the case with the insurance company at Hisar, Chandigarh and Calcutta.A few years later, the Haryana State Commission, in its order in the case of Girdhari Lal Bansal vs Oriental Insurance Company deliberated at length over the issue of interest on delayed payment and held that the interest should be calculated from the date of the loss itself and not later. Here, the Commission relied on the general law of insurance as well as the specific language of the insurance contract, which provided that the insured be fully indemnified against loss or damage. And full indemnification meant reimbursement from the very date of loss. The State Commission pointed out that obviously, the loss suffered by the insured cannot be determined by the insurance company forthwith on the very day of loss. Loss assessment should certainly be done expeditiously, but it would necessarily take a reasonable amount of time. However, once this is done, then on the well accepted legal premises, the accepted liability must relate back to the very date of the loss. In other words, the insured must be compensated for the period for which he remained deprived of the lawful compensation which was his due and this can be simply remedied by awarding the reasonable amount of commercial interest from the date of the loss itself, the State Commission said. However, the National Consumer Disputes Redressal Commission referred to this order of the Haryana State Commission in one of its subsequent orders (National Insurance Company vs Prabhat Rubber Industries) and said in principle it agreed with the view that interest should be paid to the insured for delay in settlement of claim from the date of the incident itself. But on pragmatic considerations, a reasonable time of three to six months should be given before calculating the interest, it said.So thanks to consumer courts, insurance companies are now being forced to pay interest at the rate of 18 per cent on delayed settlement of claims. But I would still argue in favour of interest on delayed payment being calculated from the date of the loss itself, as suggested by the Haryana State Commission. After all, the insurance company has to indemnify the loss fully. And as the State Commission pointed out “It seems only just and equitable that the insurance claim withheld from the insured on which the insurers earn interest should go to the insured, with interest”. Such imposition of interest could also force insurance companies to expedite the process of claim settlement. |
| Minister ‘misled’ on Puncom offer Tribune News Service CHANDIGARH, July 17 — The Mohali-based Telecom Engineers of India (TEI) has charged the DoT authorities with “misguiding” Communications Minister Sushma Swaraj about the Punjab Communications Limited (Puncom) offer to supply WLL telephone equipment for 36,000 UP villages. In a representation to the minister, a copy of which was made available to The Tribune here today, the TEI said the WLL equipment gives neither a busy tone nor a ring-back tone as was alleged by DoT while rejecting the Puncom bid. These tones are to be given by the DoT exchange only to its subscribers.The WLL equipment gives specified signals on the inter-connecting wires, it said. The TEI has urged the minister to convene a joint meeting of representatives of Puncom, DoT, C-DoT, besides TEI and the media to sort out the issue. |
| ITDC disinvestment NEW DELHI, July 17 (PTI) — The government’s decision to appoint global advisers for disinvestment of stakes in ITDC, despite a detailed report by the Disinvestment Commission, is affecting the panel’s credibility, its Chairman G.V. Ramakrishna has said. The government move on the India Tourism Development Corporation (ITDC) was affecting the “commission’s credibility besides its future functioning,” Ramakrishna told PTI.“In our first report in February 1997 itself we had recommended ways to be adopted on the disinvestment of ITDC,” he said. In an advertisement in the London edition of The Economist earlier this month, the government had invited global advisers on restructuring, disinvestment and privatisation of the public sector ITDC.The previous government had taken away much of the powers from the commission by making it a mere advisory body. Now, even the advice given by the commission was put for second opinion. |
| Capital flight from North NEW DELHI, July 17 (PTI) —There is a capital flight from the North to the rest of the country. The freedom given to banks to deploy their funds to achieve highest possible profitability has “resulted in fund parking in large corporate houses. Since most large corporate houses are based in western and southern India, there is a definite capital flight from northern India,” the PHDCCI has said in a statement. The credit deposit ratio (CDR) of all scheduled commercial banks in the northern region came down to 47.5 per cent in 1997 from the 56 per cent in 1992. The PHDCCI said the financial institutions were no different from the commercial banks as they disbursed only 25 per cent of the total financial assistance in the region. |
| Blow to anti-dumping duty lobby BONN, July 17 (PTI) — In a major blow to the anti-dumping duty lobby, India and five other nations have won the support of the majority of the 15-member European Union (EU) in their fight against imposition of temporary anti-dumping duties on export of unbleached cotton fabric to Europe. Eight states have complained to the EU council about the European Commission’s (EC) decision to slap provisional anti-dumping duties of up to 22.7 per cent on unbleached cotton fabrics (UCF) originating from India, Pakistan, China, Egypt, Turkey and Indonesia, official sources in Brussels said. In a draft declaration to the EU council, Austria, Denmark, Finland, Germany, Ireland, the Netherlands, Sweden and the UK have said the EC decision of March 25 was against the “will of a clear majority” of the member-states. In a hard hitting joint declaration, they said the EC had made a “regrettable decision” in disregarding the views of the anti-dumping advisory committee and imposing temporary duties, which could lead to doubtful consequences for the community’s textile industry.Italy, Spain, Portugal and France, however, endorsed the EC decision, while Belgium, Greece and Luxembourg are yet to take a final stand on the issue. An estimated 130 Indian companies export UCF to the EU.Since almost 90 per cent of the exports of cotton fabrics from India is in unbleached form, the EC action threatens to have a crippling effect on the country’s exports. Britain was especially outspoken about the duties saying they would wipe out thousands of jobs in the country. However, Italy, Spain, Portugal and France complimented the EC for carrying out the procedure in an excellent manner.“The commission’s investigation has virtually confirmed the existence of significant dumping margins that cause injury to the European community industry and of a community interest in the introduction of anti-dumping measures,” according to a separate declaration issued by these states in Brussels. The joint declaration by the majority states recalled that during consultations in early March, nine member states had opposed the provisional measures, five supported the duties and one abstained. “A previous investigation was terminated in May 1997 when a proposal for definitive anti-dumping duties was rejected by member states. There is now even less support for measures that there was at the same stage of the previous investigation,” it said. With the commission expected to consider in September imposition of the duties on a permanent basis, the declaration said the member states had an important advisory role at the provisional measures stage of an anti-dumping investigation. “The opposition of a majority of member states at the provisional stage signals that there might be insufficient support for the proposal for definitive measures, when the decision is taken by a simple majority.”The eight EU countries supporting India and others stated that they did not question the commission’s legal right to impose provisional measures due to its power of discretion. However, in the present case, the commission should have continued its investigation, so that any eventual proposal for action was more “soundly based”.The four countries supporting the anti-dumping duties, however, said this was not the first time that the EC imposed duties without the support of the majority of member states. “The commission’s powers have been correctly exercised,” they said.India had recently raised the issue of anti-dumping duties at the WTO ministerial meeting in Geneva with Commerce Minister Ramakrishna Hedge opposing this manifestation of protectionism. The anti-dumping duty was levied following intense lobbying by cotton and allied textile industries of EEC (Eurocotton) - a textile industry pressure group - that the imports from the six countries had been injuring the domestic textile industry as they were sold in the European markets below the prices that prevailed in their respective domestic markets. Indian exporters have denied the allegations that they had been dumping their products at lower price. Unbleached cotton fabric is used in a big way by furniture and clothing industries. Ponds, Microsoft tie up CALCUTTA, July 17 (PTI) — Pond’s Institute, the skin care research wing of cosmetics company Pond’s, has tied up with Microsoft’s American On-line to create a consumer interactive centre on the world-wide web. Inaugurating the centre’s four new customer interaction avenues — the touch screen kiosks, a dial-in helpline, roving kiosks and web site yesterday, marketing manager of Pond’s Shrijeet Mishra said the move is driven by social market changes and redefined consumer needs. |
| Biz
briefs Picture card Tribune News Service CHANDIGARH, July 17 — The credit card industry has witnessed Standard Chartered make waves with a series of imaginative firsts like the Executive Card, the Photo Card and the Cricket Card. Now it has introduced yet another card with a difference — The Standard Chartered Picture Card. Training Tribune News Service LUDHIANA, July 17 — A five-day condensed training programme on exports, procedure and documentation, jointly organised by the Small Industries and Service Institute, the state government and the Punjab Small Industries and Export Corporation, concluded here today. Specialists delivered lectures to 25 participants on the procedure and documentation, finance, marketing and securing orders. The chief guest, Mr J.S. Kular, Director, Small Industries Service Institute, highlighted the importance of exports and documentation. Textiles From Our Correspondent AMRITSAR, July 17 — The Federation of Textile Manufacturers and Traders has opposed the imposition of sales tax on textiles in the recent Punjab budget. Its president Santosh Gupta in a press note here today appealed to the Chief Minister to withdraw the tax with immediate effect. |
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