B U S I N E S S | Monday, August 9, 1999 |
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UTI forms jv with Australian firm CHENNAI, Aug 8 Unit Trust of India has joined hands with an Australian mutual fund in a joint venture to raise funds from overseas markets and invest in various infrastructure projects in India, a top company official said.
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Basmati exporters to establish lab NEW DELHI, Aug 8 In a bid to maintain the exclusivity of basmati rice in the world market, Agriculture Ministry in association with an apex body of rice exporters will set up a state-of-the-art quality testing laboratory in the capital. No impact of militancy on growth NEW DELHI, Aug 8 Despite witnessing decade-long militancy and destruction it wrought, Punjab today boasts to be the most developed State in agriculture, power, infrastructure and industries. |
Marked shift in consumer liking Double taxation hits trade Plantation cos to draw up scheme
for investors
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UTI forms jv with Australian firm CHENNAI, Aug 8 (PTI) Unit Trust of India (UTI) has joined hands with an Australian mutual fund in a joint venture to raise funds from overseas markets and invest in various infrastructure projects in India, a top company official said. We hope to raise $ 500 million through UTI-AMP, which will be used to take up equity participation in various projects relating to infrastructure, UTI Chief P.S. Subramanyam told PTI in an interview. Called UTI-AMP Infrastructure Fund, the fund was registered in Mauritius and would have the $ 170 billion Australian Mutual Fund AMP raising monies from overseas markets, he said. The proceeds would be invested in projects relating to roads, ports, airports and power plants, Subramanyam said and added that this was part of UTIs plans to expand its activity in the wake of increasing competition. Asked about UTIs foray into the lucrative insurance industry, Subramanyam said currently there were no such plans though UTI was well-prepared to enter this segment and was waiting for clear directions from government. The company had recently announced that it had decided to temporarily put off plans to start a Millennium Fund in view of the vastly depressed gold prices in the international markets. The UTI chief said these were part of the business plans that the countrys largest mutual fund had drawn up to beat competition and maintain its market share of 80 per cent in this market. Subramanyan said besides focussing on its flagship scheme US-64, the company was also coming out with a UTI Bond Fund, Money Market Fund, Gilt funds and a Corporate Restructure Fund besides introducing new monthly income plans. The aim was to double the corpus from Rs 61,000 crore over the next three to four years, he said adding that he was quite hopeful that despite the crisis of last year, US-64 will reach repurchase price well within the next three years. In a bid to revitalise the scheme, UTI reshuffled US-64 portfolios by increasing exposure in infotech stocks from four to 19 per cent, he said. Other stocks in which exposure has been increased are in pharmaceuticals, fast moving consumer goods (FMCG), brand value goods and the mid-cap sector, he said. Between April-June, 27 scrips in US-64 top 50 holdings outperformed the sensex. The portfolio included 22 of the 30 sensex stocks and 27 of the S and P CNX Nifty scrips.
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Basmati exporters to establish lab NEW DELHI, Aug 8 (PTI) In a bid to maintain the exclusivity of basmati rice in the world market, Agriculture Ministry in association with an apex body of rice exporters will set up a state-of-the-art quality testing laboratory in the capital.The laboratory, to be jointly set up by Indian Agricultural Research Institute (IARI) with the help of All Indian Rice Exporters Association (AIREA), will receive financial assistance from the basmati development fund. Since the establishment of the testing facility at IARI will take some time, we are inviting quotation from recognised inspecting agencies to carry out this task on behalf of the exporters association, AIREA Executive Director Anil Adlakha said in a statement. The decision to set up a common testing follows a brain storming session on basmati rice exports held at IARI under the chairmanship of ICAR Director-General R.S. Paroda and attended by a number of agriculture scientists and exporters. We are sure that this will not only elevate the image of our country but silence those critics who have been unnecessarily suspecting quality of Indian basmati, Adlakha said. Rice exporters have been forced to adopt strict quality control measures following reports that other varieties of rice were being shipped as basmati rice. Adlakha said there were a lot of confusion in the minds of buyers and other agencies connected with Indian basmati rice about its quality and originality following negative press reports in national and world press recently. Most of these apprehensions are not true as India would like to maintain the exclusivity of basmati rice, which is natures gift known for its smooth/silky texture, very long grain, he said. AIREA has been holding
talks with its members on introducing certification
mark for quality to ensure that no common variety
of rice was passed on into global market in the name of
basmati rice. |
No impact of militancy on growth NEW DELHI, Aug 8 (PTI) Despite witnessing decade-long militancy and destruction it wrought, Punjab today boasts to be the most developed State in agriculture, power, infrastructure and industries. The per capita income in the State is the highest at Rs 14,188 as compared to the national average of Rs 9,285, State Government sources said here. The net area sown is 84 per cent, which is the highest in the country. The States per capita foodgrain production of 993 kg is also the highest and 4.5 times the national average. Punjab also has the highest contribution of wheat (59 per cent) and rice (44 per cent) to the central pool. The wheat production of 3,884 kg per hectare is the highest and 1.70 times the national average. The rice yield of 3,132 kg is also the highest and 1.87 times the national average. The per capita availability of 798 gm of milk per day, besides being the highest, is 4.4 times the national average. Punjab also generates the highest per capita electricity which is 2.5 times the national average. The index of relative development of infrastructure of the state is the highest at 191.4 as compared to the national average of 100. Even growth of large and medium industries has been marked. While 355 such units existed in 1989-90, the number stood at 620 in 1997-98. The production has increased many times from Rs 5,458 crore in terms of cost to Rs 28,000 crore. The fixed investment has also witnessed a three-fold increase from Rs 3,083 crore in 1989-90 to Rs 10,500 crore in 1997-98. The number of small scale industries has risen from 1,46,443 in 1989-90 to 1,95,400 in 1997-98 and production by these units has recorded more than three-fold increase from Rs 3,504 crore to Rs 13,000 crore in terms of cost. Fixed investment in these industries rose from Rs 1,218 crore to Rs 2,855 crore. Export of industrial
goods from Punjab also rose from Rs 769 crore in 1990-91
to Rs 4,200 crore in 1997-98. |
Inflation rate falls to 1.19 per cent NEW DELHI, Aug 8 (PTI) Continuing its free fall, annual rate of inflation plummeted to a record low of 1.19 per cent for the week ended July 24, thanks to skewed comparison with abnormally high prices this time last year. The rate of increase in prices, based on wholesale price index (WPI), fell by 0.43 percentage points during the week to 1.19 per cent (provisional) from 1.62 per cent (provisional) the week before. During the corresponding
period last year, inflation rate was higher at 8.78 per
cent mainly on account of an upsurge in food prices due
to lower production. |
Marked
shift in consumer liking LUDHIANA, Aug 8 There has been a marked shift in consumer preference from mild beer to strong in recent years. The strong beer segment has been growing at the rate of 15 per cent per annum as against 5 per cent growth in the mild beer segment. The main reason for this is the high price at which the beer is marketed in different parts of the country, according to Mr Rajiv Bali, Deputy Manager Director of Mount Shivalik group, who was in town today in connection with the launch of Strohs, an American beer in the megacity. The beer has already been launched in several cities of Punjab where it is said to be drawing a good response. He also said that his
company had finalised an ambitious state-wise plan for
launch of beer in the Indian market. In the first phase,
Strohs beer is being launched in Chandigarh,
Punjab, J and K, Haryana, Rajasthan, Delhi and West
Bengal. The second phase will cover the remaining parts
of North, East and Western India. |
Rise in
fuel oil price to hit industry THE reform process started in 1991 has reformed many unintended things as well. When government speaks for smaller segment it means small number of rich. When it talks of corruption it means illegal exchange between smaller people. Exchange between influentials is always legal as policies are framed with mutual convenience. Few recent decisions of the central government confirm the trend. Prices of petroleum products outside administrative price control have been rising sharply and hurting smaller segment severely. The Petroleum Minister expressed the desire to rectify the situation. Instead of this he himself took the most controversial decision to give 1000 buses to Iraq which is under UN sanction. Who could have benefited from this? Only big manufacturers. The revision of telecom policy is another controversial decision taken in haste. Five products naptha, bitumen, LSHS, fuel oil and paraffin wax were decontrolled two years ago. Prices of these products are rising with vengeance, as it were. The reason being cited is the rise in the price of crude oil. Before recent rise crude prices have been very low but the benefit was not extended to the consumers of these five products. This increase should be distributed over all the items. The price of furnace oil has gone up from Rs 6 per litre to over Rs 9 within a span of four months. Similar is the case with RFO and other fuel oils. States nearer the ports are getting cheap imported oils. The rising trend is continuing and 10 per cent further rise is on the cards. Fuel oil is the key input for Punjabs industry. If things go on unchecked Punjabs industry will get a severe jolt. The policy on petroleum is highly biased in favour of private refining sector to the detriment of consumers. Many fiscal and tax benefits are extended to refiners. Import duty structure is such as to benefit them the most. High customs duty on petroleum products and low on crude is certainly regression to protectionism. Value addition in refining is only 15 per cent and duty structure translates into some 200 per cent protection for value addition. Gross refinery margins (value of production cost minus cost of crude) are likely to go upto $ 6 per barrel by 2001-02 which is double the global averages. Domestic refining volumes are to the tune of Rs 10,000 crores a year and protection shall result in gross inefficiencies claiming big chunk of GDP. Oil accounts for half of the profits of corporates. Surely plight of smaller units is much worse. The government should revise the policy for determining price of fuels and increased cost of crude should be distributed over all the products. On bank credit the SSI sector is being squeezed. At ene and is the case of Essar steels which has harmed the country both in its rating and financial loss and at the other end it is the hard working and hard hit small industry. Essar steel still has some sympathetic corners in the government while the SSI sector is no where in any agenda. Sickness in this sector is spreading fast and banks rope is also getting tightened around the sick units. Is it fair?
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Double
taxation hits trade THE decision to levy first point sales tax on several commodities taken by the Punjab Government in the recent past has the effect of putting undue impediment over the free flow of trade & industry in the state. Exercising its legislative powers conferred by sub-section (1-A) of Section 5 of the Punjab General Sales Tax Act, 1948, the state government promulgated a notification No. S.O.29/PA.46/48/S.5/Amd./99 bringing more than one hundred commodities into the net of first stage taxation. These amendments came into operation from 1st day of April, 1999 though the copies of the official gazette carrying publication of the new law were issued long after the introduction of first point tax. When the intention of the law-makers was to levy and collect first point tax immediately upon publication of the notification, why did the state government not disclose it well in advance to the business community? The assesses sought to be taxed under the purview of the new law had every right of knowing this important decision involving large scale changes in the method of tax collection before they were called upon to ensure necessary compliance of the notification. Unfortunately this significant aspect has not been taken care of. First point sales tax essentially means single point taxation as the objective behind the provisions contained in sub-section (1-A) of section 5 of the Punjab General Sales Tax Act, 1948 was to keep the purchase as well sale of the goods brought on first stage list totally free from tax at all the successive stage (s). This intention of the state legislature is well defined in the statutory provision referred to above. However what now-a-days is happening in the state as a result of these amendments runs altogether counter to this legislative spirit. As a matter of fact when a manufacturer buys raw-material from within the state which falls within the scope of first stage taxation, he has to pay tax to the selling dealer. Also he is required to pay tax on the sales of finished products be it within the state or in the course of inter-state trade or commerce. Thus the registered dealers are called upon to pay this stage tax on the inputs and then on the sales of finished products which is plainly repugnant to the general scheme of the Act as double taxation is not permissible. Another example that can be quoted in this context is that the traders are also subjected to double taxation in the sense that they are required to pay first point tax on the goods falling within the scope of these new amendments and when those goods are sold in the course of inter-state trade or commerce they are again obliged to pay Central Sales Tax under the provisions of the Central Sales Tax Act, 1956. It equally amounts to levying double taxation on the traders which otherwise is not permissible in law, having regard to the legislative spirit. It is because of these
reasons that traders as well as manufacturers in the
state have been put to a complete disadvantageous
situation. Obviously it is due to the failure of the
state government to take into consideration their
legitimate interest while introducing amendments to the
existing provisions of law. If the state government had
decided to take recourse to first point sales tax by
bringing maximum items within the scope of sub-section
(1-A) of Section 5, it was at the same time obliged to
evolve a mechanism to avoid double taxation in relation
to the persons engaged in inter-state business and
manufacturing activities in order to ensure no
unreasonable restricts are put over the free flow of
trade and commerce. |
Plantation cos to draw up scheme for investors MUMBAI, Aug 8 (PTI) The Securities and Exchange Board of India (SEBI) would encourage plantation companies, wanting to pay back investors, to draw up a scheme for repayment.It is not for SEBI to fix whether they should pay up 100 per cent or 50 per cent, in instalments or the size of each instalment. Instead we have asked each individual company to draw up its own scheme which would then be vetted by us, Executive Director (Legal) Dharmishta Raval told PTI yesterday. Several plantation companies have approached the regulator, stating their desire to repay those investors who wish to exit from CIS, she said adding that SEBI would also bring this to the notice of the courts where cases are pending against these companies. The Supreme Court has,
however, prohibited companies with collective investment
schemes (CIS) from disposing off their assets except for
the purpose of repayment. |
Selling lubes a money game now THE lubricants industry in India is one of the few sub-sectors of the petroleum industry which was opened out completely to private and foreign companies. Steadily falling margins and a major shakeout in the industry has been the feature over the last few years. Lubricants are classified in to automobile lubricants and industrial lubricants. The share of the two stands at 55:45. In the automobile sector, lubricants are further segmented into diesel and petrol. Since effort, time and investment required to establish the brand is in the industrial sector is high, most companies have entered the auto lube sector. However, Indian lube manufacturers are now vying with one another to wrest a larger proportion of the market share in the lucrative lubricant business by seeking the endorsement of leading automobile manufacturers who would recommend one particular lubricant brand as being best suited for the vehicle. Thus, the lubricant industrys marketing is typically similar to other Fast Moving Consumer Goods (FMCG) where brands, brand building, brand recall, sustained advertising and other such factors are crucial. As selling lubes becomes a money game, those with the backing of international players will manage to sail through, though at a higher cost. How far can this be sustained is a tough question. But, in the long run, companies with lower capacities will find it difficult to operate. In future, only those with a market share of more than 5 per cent will be able to survive and only companies with sound R & D, infrastructure facilities, skilled manpower and adequate marketing network will survive. Indian Oil Corporation Indian Oil Corporation is the largest manufacturer of lubricants in India and is also the only Indian company to figure in Fortunes Global 500 list. Its Servo brand is the most recognised brand in the country. The company operates six refineries, with a total capacity of 24.55 t. and enjoys a market share of 40 per cent in the industry. Incidentally, it is one of the three companies, which has a refining capacity for lube oil base, an input in the manufacture of lubricants. In order to increase its presence IOC has aimed at improving the image of the retail outlets. Despite making a loss with superior industry network and superior backing of infrastructure the company sees no problem in maintaining its status as the leader in the lubricant industry. Lubrizol India Incorporated in 1966, in collaboration with the Lubrizol Corporation US, Lubrizol India is the worlds largest independent company making speciality chemicals for the oils industry. The company develops, manufactures and markets additive systems for automotive and industrial lubricants and for treatment of fuel. This company is one of the few companies out side US having technology for development, manufacture and performance evaluation of automotive lubricating oils and fuels. The companys manufacturing unit, situated at the Thane-Belapur industrial complex, Navi Mumbai, has been certified under ISO 9002 standards by BVQI since January 95. Forte Lubricants Forte Lubricants (I) is the sole associate in India for Forte International. It is a 75 year old company in the the UK, manufacturing additives for petrol and diesel operated engines. The company provides cost economical treatment which solves the contamination problems of fuel, oil and cooling systems. The companys product range includes fuel system cleaners, diesel fuel conditioners, motor flushes, gas treatment, automatic transmission treatment, CV gases, cooling system conditioners, etc. Castrol India Castrol India is the largest player in the lubricants segment. The company has achieved an overall market share of 18 per cent in the lubricants market. The company has seven plants in the country with a capacity of 3 lakh KL and on the financial front too the companys performance has been impressive. The company has set up a new unit in Silvassa which manufactures 150 different types of products. The company is also modernising its other plants. Gulf Oil Gulf Oil International
was the first multinational to enter the lubricants
market in India. In collaboration with the Hinduja group,
Gulf Oil India created a significant presence in a short
time, Gulf Oil has grown to be one of the largest
corporations in the world, with operations ranging from
oil exploration to retailing. On the financial front, the
companys performance has been satisfactory. The
company has setup its own 75000 tonne blending plant has
Silvassa which blends 200 quality lubricants with
international formulations. It believes that product and
packaging development to be its area of strength. The
Gulf Oil plans to tap the market in the east and
north-east, and for this it has entered into an exclusive
contract with the private blender. |
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