Monday, August 2, 1999
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B U S I N E S S | Monday, August 2, 1999 |
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PESB to assume proactive role Bollywood gets stock exchange Inflation dips to new low |
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Exports grow 11 per cent in June Need to review power policy |
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No plan to withdraw Pak’s MFN status NEW DELHI, Aug 1 (PTI) — India will not withdraw most-favoured nation (MFN) status to Pakistan in the wake of infiltration in Kargil, Commerce Minister Ramakrishna Hegde has said. “We do not have any proposal to withdraw MFN status to Pakistan,” Hegde told PTI to a pointed question on whether India would consider withdrawal of MFN status due to Kargil operations. Pakistan is still to reciprocate though India had given MFN status to it several years ago, he said adding that “we would still prefer to wait.” Asked if India would consider using the security provisions under the World Trade Organisation (WTO) to slap trade sanctions against Pakistan, Hegde said: “No”. Under Article 22 of the WTO, a country can impose trade sanctions against another in the event of aggression or security threat to it. The USA, in fact, has used this provisions to ban export of dual-use technology goods to over 200 entities in India after the BJP Government conducted nuclear tests in May 1998. India has consistently maintained that it is against precipitating the MFN issue or dragging Pakistan to WTO despite provisions that all members would have to reciprocate the MFN status with their trading partners. Though India had extended MFN status to Pakistan way back in 1989, Islamabad, which has permitted imports of only 650 commodities, has not yet reciprocated despite New Delhi raising the issue at every bilateral meeting. During the historic bus journey by Prime Minister Atal Behari Vajpayee to Lahore, Pakistan had assured him to extend MFN status soon. “We do not want to change our helpful attitude towards Pakistan in trade at this moment,” Hegde said. Trade relations between both neighbours had been improving and last year it had improved further, he said. “Even though we do not need sugar, we imported sugar from them last year. Trade between India and Pakistan had risen to around Rs 1,200 crore from Rs 800 crore earlier,” he said. The Minister, however, conceded that unofficial trade via Dubai and other Gulf destinations between the neighbours was 10 times more. Besides Gulf countries, Indian goods also flow into Pakistan from Iran and Afghanistan through roads leading to heavy revenue loss to Islamabad. Hegde said India’s thinking was in view of progress in SAARC agreements on trade culminating in South Asian Free Trade Area (SAFTA). “We will soon reach an agreement on SAPTA and then enter SAFTA. Therefore, we are not thinking of such steps (withdrawing MFN status),” he said. India is expected to benefit in a major way in the SAFTA arrangement. In order to encourage all its SAARC partners to agree to put into force the SAFTA agreement soon, India has said it will allow unrestricted imports of all goods from these countries. As a first step, it has signed an agreement with Sri Lanka under which it would phase out all import restrictions in three years. In turn, Sri Lanka would phase out curbs over a period of seven years. Asked if there could be any setback to SAFTA in view of the Kargil developments, Hegde said it was unlikely. “Apart from Pakistan, our relations with other members are good,” he said but added that Pakistan was an important component of trade in the SAARC region. He said India was also
going ahead with its plans to hold a SAARC Commerce
Ministers’ meeting in the Maldives in September to
prepare a common strategy for the forthcoming WTO
ministerial round meeting at Seattle in the USA in
November. |
PESB to
assume proactive role CHANDIGARH, Aug 1 — The contribution of public sector undertakings (PSUs) to the socio-economic development and transformation of backward areas in the country cannot be undermined despite a large number of them showing poor performance, which often makes the government consider "disinvestment" in this area. In view of the global competitiveness syndrome now prevailing, the Public Enterprises Selection Board (PESB) is gearing itself to play a proactive role in rejuvenating the public sector. The board's new chairman, Mr T.K.A. Nair, says the board is not a "mere interview body" for appointments at the top-level. The board is now constituting itself into a "search committee" to develop a cadre of professional managers within the public sector. In Chandigarh on a short visit, Mr Nair told The Tribune News Service today that a data bank was to be built on the available top functionaries in the public sector and profiles of PSUs updated. The country has 400-odd public sector enterprises. To meet new challenges in the changing economic, business and trade world, it is equally important that internal candidates in various public sector enterprises become available and are given preference for appointment as chairman, chief executive officer, managing director and functional director etc provided markedly better candidates are not available outside the public sector. The PSUs over the decades have brought-in new technologies, created job opportunities and helped resuscitate economies in backwaters of the country. Therefore, making the right choice and making the right placement in top-level positions becomes all the more important, he added. Mr Nair said subject to certain limitations, mobility of managerial personnel among public sector enterprises within the same sector or group will be encouraged. Recruitment from organised sector under the Central Government could also be considered. Besides many functions, the board also tenders advise to the government in respect of formulation and enforcement of a code of conduct and ethics for managerial personnel; evolving suitable training and development programmes; building data bank on information relating to performance of public sector undertakings; making performance appraisal; and even suggesting restructuring the boards of PSUs. To bring effectiveness in board recommendations, it had been decided to send monthly communication to the Central Vigilance Commission detailing cases in which despite clear recommendations by the board the final placement has not been done for want of vigilance clearance. The departments concerned will, in return, keep the board informed of such pending cases. The board also expects the government to confirm with it appointments already recommended. In its advisory role the board has decided that, thereafter, before the expiry of one year probation period the administrative ministry should invariably consult the PESB before issuing confirmation orders. A standard format for writing annual confidential reports is being introduced. One of the columns will be on the lines of the practice followed in defence services, vis-a-vis, a column relating to "pen-portrait" of the officer. While reviewing the profiles of PSUs the board will make use of external experts in that field. A training programme for management personnel is also being evolved and Indian institutes of management involved. As the age of retirement has been raised in respect of public enterprises, the board is keen on updating the profiles of the managerial functionaries. It, however, feels that some PSUs do not cooperate in giving information in time and moreover shortage of manpower in the PESB has also delayed the collection of data. As per the government decision, the process of recruitment by the board is to be initiated at least 180 days before the actual date of vacancy. Despite this the placement is delayed due to delay in vigilance clearance and several other formalities. The PESB now says that it would be more "meaningful" if it is permitted to initiate the selection process at least "one year" before the date of a vacancy. This will ensure continuity and efficiency in the public enterprises. Mr Nair is a former
Chief Secretary of Punjab.
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Edible oil
imports hit industry CHANDIGARH, Aug 1 — Mr Ajay Tandon, President of the Solvent Extractors’ Association of India, has urged the Centre to save the vegetable oil industry and oilseed farmers from getting ruined. Mr Tandon told newsmen here last evening that the Centre should stop imports of edible oils whose prices have sharply declined by over $ 300 to $ 400 per tonne (40 to 50%) in the international market. Moreover, excessive dependence on edible oil imports will force farmers to switch to other crops. Already, farmers are forced to sell their oilseed crops at prices much lower than the support prices. To maintain the domestic oilseed prices at a reasonable level, the Centre should hike duty on import of edible oils. India’s dependence on edible oil imports had gone up to 30 per cent after having achieved self-sufficiency. No doubt, he said consumers had benefited from the imports of edible oils during the past few years but this had happened at the cost of growers and the processing sector. With prospects of another bumper crop in October, consumer prices of edible oils were unlikely to be affected even if the Customs duty was raised. But farmers could benefit only if they were able to get the support prices for their produce. Mr Bharat Bhushan Jain, President of the Haryana Solvent Extractors Association, Mr A.R. Sharma, President of the Punjab Solvent Extractors Association, and Mr D.P. Khandelia, President of the Chandigarh Oil Millers Association, who were also present have in separate memoranda urged the Prime Minister, the Union Minister for Food and Chemicals and the Union Minister for Agriculture to take personal interest in saving the edible oil industry. Mr Jain said Haryana farmers had already lost much of their interest in the oilseed crops. As against the production of 4 lakh tonnes of sunflower crop in May 97-June 98, the farmers produced only 2 lakh tonnes of sunflower this year. Also, the growers got 15
to 20 per cent less than the support prices. In spite of
this, the oil industry suffered losses due to low-cost
imports. |
Exports grow 11 per cent in June NEW DELHI, Aug 1 (PTI) — India’s exports recorded a 11.14 per cent growth rate in June 1999 at $ 2.6 billion even as the trade deficit widened to $ 2.36 billion in the first quarter of 1999-2000. However, oil imports have registered a a sharp rise of 53.44 per cent at $ 2.02 billion in April-June, 1999, even as non-oil imports declined by 3 per cent at $ 8.3 billion. Cumulative exports in the first quarter of the current fiscal grew by 6.5 per cent at $ 7.9 billion against $ 7.49 billion in April-June, 1998, the monthly trade data released by the Government said. This is the second month in a row that exports had witnessed a double digit growth. In May, 1999, the growth rate rose to 11.68 per cent. In rupee terms, exports grew by 12.09 per cent in the first quarter. Imports during June represented a growth of 21.81 per cent at $ 3.64 billion against $ 2.98 billion in the same period last year. India’s imports in
the first quarter are estimated $ 10.35 billion an
increase of 4.52 per cent that the level of $ 9.9 billion
in the same period last year. |
Need to
review power policy ELECTRICITY board across the country are pressing the Central Government to review its policy on captive power. Their plea is that it results in the loss of business for the SEBs. The plea has, however, been rejected as the state governments themselves can decide the issue. Surge in captive power consumption is proverbially the last straw on the moribund finances of the SEBs. It is estimated that captive capacity at 16,000 MW is almost fifth of the total installed capacity. The USA has a policy under which utilities purchase surplus captive power. But we have no such policy as yet. Besides the Indian Electricity Act, 1910, the Electricity Supply Act, 1948, and the Indian Electricity Rules, 1956 are yet to be amended. Cost of power has become unduly high due to pilferage, waste, gifts and mismanaged reform processes. Power did cost only 22 paisa per unit at the end of the Fourth Plan and was Rs 1.02 at the end of the Seventh Plan. This rate was the lowest in the world. After the reform process started in 1991 the cost jumped up quickly. The Power Finance Corporation’s Chairman has identified pilferage as one of the key reasons for this sorry state. According to him the real theft is about 25 to 30 per cent. Like in case of Delhi during 1991-96 the energy availability per day increased by 54% from 22.88 million units to 35.22 million units a day. This entire increase has, however, been lost in pilferage and losses and the energy sales remain the same. Feasibility studies of six industrial sectors — paper, cement, glass and ceramics, textiles, sugar and fertilisers (Urea) — have revealed that energy worth Rs 14,500 crore a year is consumed of which the saving potential is to the tune of Rs 1,800 crore. Private power projects are exploiting the situation. Cost of selling power to SEBs is too high. Enron project of Maharashtra remained under political controversy for quite some time. Interestingly the opponents when came to power also reconciled. Now the facts are coming to surface. Power from Enron is costing Rs 4.95 a unit. Who will raise objection now as both the main political parties are responsible for this? Cross subsidisation is
another factor responsible for the mismanagement of power
sector. Subsidy from commercial and industrial sectors as
a percentage of effective subsidy to agricultural and
domestic sectors was 41.7% in 1992-93. It declined to
37.6% in 1995-96 ad substantially increased to 51% in
1997-98 at Rs 11289 crore. National minimum agricultural
tariff of 50 paisa per unit is yet to be implemented
although some states have signed MoUs. |
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NEW DELHI, Aug 1 (PTI) — Want to know the value of your favourite film stars and films? All you have to do is log in to the website which allows you to buy and sell stocks and bonds of latest films, film stars and songs. The website
www.bwsx.com, the site developed by Mumbai-based Rider
Software, is called Bollywood stock exchange, which not
only allows you to trade in stocks but also provides
information about latest Bollywood releases. |
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NEW DELHI, Aug 1 (PTI) — The inflation rate fell to a two-decade low of 1.62 per cent for the week ended July 17, despite a marginal rise in the wholesale price index (WPI). The fall in the annual rate of inflation is mainly on the account of a higher base last year due to an abnormal increase in vegetable prices. For example, the index for vegetables during the current week is 456.0 compared to 732.1 in the same period last year. During the reference week, the rate of inflation fell by 0.23 percentage points to 1.62 per cent (provisional) from 1.85 per cent (P) the week before. In comparison, the inflation rate was higher at 8.22 per cent during the corresponding week of last year. The prices of agricultural produce are moving up at a much slower rate than last year due to a bumper foodgrain production this year. In comparison, the prices of agricultural products were skyrocketing around this time last year. A slackness in demand for industrial products, which accounts for 57 per cent of the weight in the index, also helped the southward movement in the inflation rate. The wholesale prize
index for all commodities (base: 1981-82=100) during the
current week rose by 0.1 per cent to 257.3 (provisional)
as against 357.0 (P) for the previous week. |
We sent two fixed deposit receipts bearing No. ONK 0006/110437 & JEE 0005/110420 dated 16.1.97 matured on 27.12.98 to JCT Ltd. for renewal of the maturity amount. The company informed through a letter dated 15.3.99 that they have stopped accepting fresh & renewal of fixed deposits with effect from 1.10.98. They retained the FDRs for refund. In spite of personal visits to their Delhi office in May’99 and meeting the General Manager, Accounts, to expedite refund, the same has not been received till now. Onkar Singh
Mabal Golden Forest A fixed deposit of Rs 2000 deposited on 12.4.1994 become payable Rs 6000 on 12.4.1999. I have submitted all relevant papers to the company office personally. I have paid a number of visits and requested the authorities concerned for payment. Four months have passed but no payment has been paid to me so far. My a/c no is LSB 1392. Rakesh Kumar
Sharma Padmini Poly I sent 100 shares of Padmini Polymers Ltd with Folio No 062512, certificate No 465963 to company’s office 240, Okhla Industrial Estate, Phase III, New Delhi for transfer on 20-2-98. Till to date, I have not received shares back despite many reminders. Ajay Kumar
Sharma Rockland Leas I purchased 10+25 (35) secured non-convertible debentures of Rs 10,000 dated Nov 9,1996 and Rs 25,000 dated Aug 30, 1997 of Rockland Leasing Limited, New Delhi with folio No NCD 10467 and 13825 series ‘C’. I submitted these debentures accompanied by the claim form to the Ludhiana branch on 14.3.98 and 9.10.98 to forward Delhi office for payment. Despite many reminders, I have not received any payment so far. H.S. Bali |
DURING the last fortnight, the stock market declined by 3.69 per cent on Sensitive Index. This is not surprising. In this column last fortnight it has been indicated that the market was expected to decline. The basic assumption is that as the Lok Sabha election dates get closer, investors’ interest would correspondingly decline. Election news would eclipse market news. So I expect the market this fortnight too to either move through a narrow range or decline further. At present the general market view is that the BJP-led Front would emerge a clear winner in these elections, though it may still fall short of absolute majority in the Lok Sabha. The market sustains its buoyancy on the expectation that some kind of sustainable political stability would be possible after the elections. In case, this expectation is translated into a political reality, the market would bounce forward. In fact, some analysts expect the market indices to move much higher. A foreign investment house has predicted that the Sensitive Index would touch 5800 points during the financial year 2000-2001. But if political events and the election results belie this expectation, the market would plummet by 500 to 1,000 points on the Sensitive Index. Long-term investors have, however, not much to worry as there are clear indications that the economy is on a turn-about path. But some profit-taking was due during the last fortnight, as it is during this fortnight. Another reason for the decline of the market is that though the first quarter results are relatively better than those of the corresponding period last year, there is nothing spectacular about them. According to an analysis made by a leading financial daily (based on the first quarter results declared by 604 companies), while the aggregated growth in sales has gone up by 12.4 per cent, the net profit growth is higher by 16.9 per cent. Surprisingly, however, even when a company has reported good first quarter results, the market price has declined. Novartis’ first quarter results registered an increase in net profit of 23 per cent, the market price declined by Rs 100 per share. The same happened in the case of Sterlite Industries. A wise investor would, however, resist the temptation of booking profit in these blue-chip shares. I expect a very bright future for Novartis, Sterlite, Hoechst Marion, Larsen and Toubro, Glaxo and Vikas WSP. Some of these scrips can be picked up in case the market prices of these shares decline further. A number of investors have made enquiries about TVS Electronics share with the basic question: should it be retained or sold off. This share has moved up from 24-25 range to the present price range of Rs 60-70 in the market. It paid only 5 per cent dividend for the financial year ended March 31, 1999. Even the first quarter results, though better, are not spectacular in any way. So if the fundamentals of this scrip are analysed, this share appears to be over-priced. There are, however, two other considerations which incline me to suggest that investor should hold on to it for at least a year and a half more. First, it belongs to the stable of Sundram group which is known to breed top race horses. The management is supporting this scrip in the market. In spite of a decline in the market, the market price of this share has not gone down appreciably and it ranges between Rs 55 and Rs 70. Secondly, its range of activities is broadening and its performance would keep on improving as the years roll on. I expect the market to decline further during this month and later till the election results are declared, no further investment should be made except in scrips which are fundamentally very strong and promising but have temporarily suffered a sharp decline in the market. Cybertech Systems and
Software has declared good first quarter results with net
profit moving up to Rs 239.21 lakh from Rs 208.24 lakh,
but an intriguing note has been appended by the
management to these results. It states that the company
is in the process of firming up the contingency plan to
meet any possible disruption in training and customer
support so that the impact on the business operations is
the least. Maybe, it relates to the disruption caused by
Y2K problems. |
TO attract passengers, airlines are offering cheap fares and giving costly gifts. The competition has become so tough that no practice is considered unethical.Air India and Indian Airlines have constraints because they cannot practise some measures which their rivals can. But the national carriers have resolved to fight it out regardless of difficulties they have to face. Encouraged by their victory in the fare war, IA has decided to enlarge its umbrella on international routes. “We have limited fleet but we have found ways and means to expand our network on the international sector, particularly additional flights to the Gulf sector and Hong Kong”, a senior official said. While enlarging its scope IA will have to see that there is no duplicity or overlapping in the operation of flights vis a vis Air India. Encouraged by the success of cuisine provided to the passengers during the five-week World Cup bonanza, Air India will provide Gujarati food to passengers to and from Gujarat to the UK and the USA from August 1. “The Gujarati touch, in fact, is being extended to cover the entire ambit of inflight services, that is, entertainment, reading material, etc”, said Jitendra Bhargava, Director In-Flight Services and Public Relations, Air India, in a briefing recently. Customs clearance at Ahmedabad and “hub and spoke” operations are preferred by the passengers boarding flights from Ahmedabad. The introduction of Gujarati cuisine will be yet another additional measure to enhance the customer’s satisfaction. The menu of flights will be in the operation for three months before it undergoes some changes in winter schedule. “We will, however, bear in mind that the passengers have to be provided meals of their choice”, said Mr Bhargava. Another scheme Khajuraho is one of the most exotic tourist spots in the country. It is as enthralling to the youth as it is appreciated by experienced travellers. British Airways has taken effective measures to sent tourists for celebrations as the year 2000 begins. It has joined with Jet Airways and the Khajuraho Millennium Committee to send groups at the exotic temples. “BA is all set to
internationalise Khajuraho via its inflight magazines. It
will also promote the destination via the BA News which
has 75,000 subscribers all over the world”, said a
spokesman. |
EASY availability of bank finance coupled with declining interest rates has propelled the demand for tractors. Furthermore, a good monsoon, a strong growth in agricultural production and an increase in the irrigated area is expected to lead to a secured long-term growth of 7-8 per cent in the next century. There has been a boom in the tractor industry since 1997. The sales of tractors are not evenly distributed. They are mainly concentrated in the North and North-West where Punjab, Haryana and UP account for nearly 50 per cent of the entire tractor sales. Punjab alone accounts for 26 per cent. The main reason is comparatively larger land holdings and the affluence of farmers in these states. New markets like Madhya Pradesh, Tamil Nadu, Andhra Pradesh, Maharashtra and Gujarat are also growing at a faster pace. Punjab Tractors (PTL) leads in the North, while Tractors and Farm Equipment (TAFE) dominates in the South. High transporation cost is one of the main factors preventing brands from going national. Lured by the huge demand for tractors, the industry is set for a virtual invasion by new and strong entrants and more importantly, the existing players have an eye firmly on the growing export market. Thus, this sector is expected to continue to have a upward growth graph, all the way up to the year 2005. M & M Mahindra and Mahindra (M & M)’s main strength lies in two divisions, namely automotive and tractor. The automotive division’s products include the Armada, MM 550, Commander 6501. The tractor division brings out 365 DI and 585 DI tractors in the 35 HP and 50 HP segment, respectively and 3015 DI and 2515 DI in the 30 HP and 25 HP segment in which the company enjoy’s 26 per cent of the total market share. Besides, the company also has subsidiaries in exports, telecom, realty and infrastructure. On the financial front, the company’s performances have been impressive. The company has five production units in the country and is planning to set up another greenfield tractor unit somewhere in the South, most probably in Vishakapatnam. It already has a wide distribution network, with 400 outlets, a good record of after sales service and a very strong brand image and with plans to set up new plants and to launch new vehicles, the company’s prospects in the coming years seem bright. Eicher Eicher is a dominant player in the tractor industry and particularly in the smaller HP segment. The company is a market leader in the excise exempted market with an overall 50 per cent share. It is presently operating in tractors up to 35 HP, and is in process of introducing higher HP models.On the financial front the company’s performance has not been impressive. Having diversified into the 35-HP segment, the company is now concentrating on this segment and has launched a new model in the same segment under the brand, Shahensha. After its entry in the 35-HP segment, Eicher now plans to increase its product range to include higher HP tractors for this the company proposes to launch a 46-HP tractor and simultaneously, it is expanding the distribution network by increasing dealerships in western and southern India. In view of its various expansion programmes and its technology transfer agreement with Sisu Tractors Inc. of Finland, one of the leading tractor manufacturers in the world, the company’s long-term prospects appear to be quite encouraging. Punjab Tractors Punjab Tractors Ltd (PTL) is a leading player in the tractor industry. With “Swaraj” tractors as its main product line, the company enjoys a 15 per cent share of the market. Besides agricultural tractors, the company’s product line also includes harvester combines and fork-lifts. Since, there are smaller land holdings in India, the potential for harvester combines remains limited. On the financial front the company’s performance has been satisfactory. Punjab Tractors has undertaken an expansion programme to enhance its installed capacity from its hitherto capacity of 36,000 tractors to 60,000 tractors per annum. Despite the slowdown in the tractor industry, the demand for the company’s Swaraj Tractors has stayed well ahead of production. Overall thus, the company’s prospects seem encouraging. Escorts Incorporated in 1944, Escorts is a leader in the higher horse power tractors segment and a pioneer in agri-equipment, and manufactures agricultural tractors, self propelled harvester combines, rice transplanters etc. The company enjoys a 20 per cent market share in the tractors segment. Escorts is introducing significant quality improvements to bring its products up to global specifications through alliances with world majors in engines, transmissions, hydraulics, etc. Its collaborators include Carraro Spa, Italy and AVL, Austria. Escorts Yamaha Motors, a joint venture between Escorts and Yamaha motor company of Japan has launched a 135cc, 12 HP, two stroke motor cycle in May 1997 and has plans to enter into the manufacture of a new line of scooters. The company also has a
collaboration with First pacific Company of Hong Kong and
has commenced cellular service operations in Aligarh with
the help of the same. As part of its plans for the year
2000, the company plans to manufacture transmission
systems and gears for higher horse power tractors to
cater to the entire tractor and earth-moving industry.
The future prospects of the company thus seem
satisfactory. |
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| Donation From Our Correspondent PATIALA, Aug 1 — Employees of Escorts Mahle Limited and Goetz (India) Limited have donated one-day’s salary to Army Central Welfare Fund. At a function here Mr S. Ahluwalia, Associate Vice-President, and Mr Desh Deepak Sharma, President of Escorts Goetze Employees Union, presented a demand draft of Rs 5,74,258 to Brig D.S. Sandhu. Insurance meet
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