Monday, February 1, 1999
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B U S I N E S S | Monday, February 1, 1999 |
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India moves WTO on US list CHENNAI, Jan 31 — India has moved the World Trade Organisation against the export curbs imposed by the USA on Indian companies after the country’s nuclear tests in May last, Commerce Minister Ramakrishna Hegde said here today.
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Import of coils hits steel
industries NEW DELHI, Jan 30 — A government decision pegging import of hot rolled steel coils at an exorbitantly high rate is threatening the closure of cold rolled steel units in the country. Ludhiana exchange offers VSAT links |
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What
Budget can do for SSI sector Indians
in America are rich but politically poor HLL,
NIIT among top Asian stocks Coke
signs up Salman PNB
launches Krishi Card |
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India moves WTO on US list CHENNAI, Jan 31 (PTI) — India has moved the World Trade Organisation (WTO) against the export curbs imposed by the USA on Indian companies after the country’s nuclear tests in May last, Commerce Minister Ramakrishna Hegde said here today. “We moved the WTO last month against the entities list issue,” Hegde told reporters today. The USA had in November come out with an entities list under the Glenn amendment, imposing export curbs on 40 Indian companies and 200 of their subsidiaries. Asked whether the USA had agreed to make any revisions in the list, Hegde said there had not been any move by Washington in this regard. “It would take some time to resolve the issue. It is currently pending with the WTO,” he added. Hegde said India’s exports started looking up in the months of December and January after a dismal run for the first seven months of the current fiscal year. “We registered 4.5 per cent increase in dollar terms in November and 6.7 per cent in December. I am hopeful that this trend would continue in the coming months as well,’ he said. Asked whether Finance Minister Yashwant Sinha’s announcement to withdraw import duty exemptions, would affect exports, he said the matter was being discussed between the Finance and Commerce Ministries. On the demand for opening up of the services sector, Hegde said the government was not in favour of the measure, as this was still a point of dispute to be taken up in the third round of GATT discussions, covering the farm sector, services, trade and investment. “We have already
taken the view that unless the previous decisions of the
WTO are implemented, it will not be possible to open up
the services sector,’ he said. |
Import of coils hits steel
industries NEW DELHI, Jan 30 — A government decision pegging import of hot rolled steel coils at an exorbitantly high rate is threatening the closure of cold rolled steel units in the country. Industry sources alleged that the decision of the Directorate-General of Foreign Trade to allow import of hot rolled coils at a minimum price of $ 302 per tonne as against the ruling international price of between $ 200 to $ 220 would encourage hawala trade as importers would show false invoices and pocket the differential. According to the Cold Rolled Steel Manufacturers Association of India a notification by the Director General allowing import of hot rolled coils at a minimum value of $ 302 per tonne has resulted in the domestic manufacturers of such coils jacking up their prices significantly. The Chairman of the association Mr S.P. Jain, said here the current international price of hot rolled coils from European suppliers ranges between $ 200 to $ 220 per tonne and the government’s decision to allow imports at a rate of $ 302 per tonne was not justified. The government contention is however, that the cost insurance freight (CIF) values stipulated in the DGFT notification were worked out on the basis of the freight on board (fob) prices indicated in the metal bulletin published from London. Mr Jain said that the metal bulletin prices were only list prices and of an indicative nature for comparative studies and not the actual sale prices. The imports at high costs had led the local manufacturers of hot rolled coils to jack up the prices by Rs 4,655 per tonne which amounted to a huge increase of Rs 5,088 crore per annum to the hot rolled industry. Hot rolled coils being an
intermediate product and a basic unit for cold rolled
coil manufacturers, the burden of price rise has to be
borne by the cold rolled steel, galvanising, steel
components companies and consequently the bicycle,
automobile, white goods and host of engineering
companies. |
Maruti all set to have new heart NEW DELHI, Jan 31 (UNI) — Maruti Udyog Limited (MUL) is all set to have a heart transplant done on all its models post April 2000 and has appointed Denso Corporation of Japan to provide the crucial fuel injection systems. “Beginning April one, 2000, all cars being rolled out will be sporting the direct fuel injections. We are working on this and Denso would be producing these systems for us,” MUL Managing Director R.S.S.L.N. Bhaskarudu said here. Company sources said, the automobile giant was spending close to Rs 300 crore for the purpose. However, Mr Bhaskarudu refused to comment on the same. Meanwhile Denso India
Managing Director Isao Imagawa told UNI that the parent
Japanese company has already set up a wholly owned
subsidiary — Denso Haryana Private Limited —
for producing the engine management systems. |
Ludhiana exchange offers VSAT links LUDHIANA, Jan 30 — The Ludhiana Stock Exchange (LSE) has taken steps to popularise the concept of very small aperture terminals (VSATs) to be subscribed by its broker-members to service the investors across the country, including Ludhiana. As per a scheme evolved by the LSE, there is no limit on the number of VSATs, which a broker can subscribe, according to Mr Vishwanath Dhiri, President of the LSE. Mr Dhiri says that brokers who have completed their base minimum capital requirements and have become members of the settlement guarantee fund are eligible to subscribe to VSATs. The exchange has asked its brokers to have alternate arrangements to meet any contingency in case of failure of VSAT links. The services to the investor-clients could be provided by the broker either by directly opening branch offices or through SEBI-registered sub-brokers. All the trading done at outstation terminals would be subject to usual margins prevalent at the exchange. This would include capital adequacy requirements, intra-day trading limits and other margins prescribed by SEBI and the exchange. The exchange may impose additional turnover based fee for terminals linked through VSAT as fixed by the Board of Directors, which would be in addition to the turnover fee being charged for non-VSAT terminals. All trading done by the brokers or their authorised agents of sub-brokers through the extended terminals of the LSE would be executed at Ludhiana on the LSEs trading system. To promote the concept of VSAT, the exchange has formulated a scheme to be subscribed by brokers of the LSE or their registered sub-brokers at an affordable cost which can be paid in instalments. A broker wanting to install Ludhiana exchange VSAT would be required to obtain a no-objection certificate from the owner of the building where he wants to install the VSAT. It is estimated that there would be a recurring monthly charge of Rs 5,000 towards usage apart from actual insurance and annual maintenance charges. To make the scheme further attractive, the LSE has permitted two or more brokers to join hands and subscribe to one VSAT in which case capital and recurring cost of the VSAT would be shared by the brokers jointly applying for the VSAT. The brokers sharing the VSAT must have offices in the same building in close vicinity. The Board of Directors has
finalised this scheme for 125 VSATs for the time being
and allotment to brokers would be on a first-come
first-serve basis. Brokers can open counters anywhere in
India except within the municipal limits of those cities
where recognised stock exchanges are located. The
exchange is making efforts to have a memorandum of
understanding with the other stock exchanges so that
members are free to open VSAT counters in the cities
where stock exchanges already exist. |
Woman power-III CHANDIGARH: The day of this multi-talented woman is divided into neat slots, each dedicated to a particular job. Living in Sector 8, Vijay Chauhan realised that there were many aged couples in the northern sectors of Chandigarh living alone and in need of help. Thus, last year she began supplying them a very basic meal — boiled rice and dal — and soon she had 10 customers to cater to. The home-cooked, hygienic and low-priced stuff also attracted such clients as students and handicapped persons. Free of the responsibility of her now well-settled children, Vijay devotes two hours in the afternoon to social service. She teaches poor children of her locality finer traits of life as expounded by the Gita. The kids are also given books on morals. Their birthdays are days of fun and celebration at Vijay’s home. Vijay devotes her evenings to business. It’s time to make beautiful linen work. Cushion covers, pillow covers, quilts, bedsheets embellished with embroidery, patch-work and spray paints is her forte. Her daughter makes artistic candle holders of crackled glass, pots and other gift items. The enterprising lady, it would seem, is busy up to the neck. But that is not the case. She has a “Self-Help Group Scheme” up her sleeve. The aim is to establish a unit for a group of jobless people in Kasauli. Canara Bank has agreed to sponsor the scheme as such self-employment programmes ensure 100 per cent repayment of the loan. “One hundred per cent, not even 99.9 per cent”, repeats a bank official for emphasis. A lot of women in Chandigarh have taken to quilting as a means of generating income as it is a comparatively easy task and requires, only a sewing machine as an investment. Attending a workshop is enough to set up shop, as in the case of Kulvinder Virdi. What sets Kulvinder apart are the innovations she makes to the items. She designs cushion covers in the shape of vegetables and fruits. Multi-coloured brinjals, tomatoes, pumpkins, pineapples and strawberries are the popular varieties, she claims. With matching bedspreads, they make a kids’ room interesting. If you want to bring the kitchen garden to your drawingroom, you might place them on the settee or sofa. A housewife till last
year, Kulvinder has made her a success. She already makes
around Rs 6,000 per month. Her husband, a medical
representative, helps her buy raw material required for
the quilting. |
What Budget can do for SSI
sector THE Finance Minister has promised to simplify the indirect tax regime. This is nothing unusual as all pre-Budget pronouncements are like this. There is a growing concern that a higher tax burden would result in lower economic growth. Changes in tax composition are made through “tax handle”approach. A study in the USA has shown that a 5 per cent reduction in all marginal tax rates and 2.5 per cent in the average tax rates would increase long term growth rates by 0.2 to 0.3 per cent. So over a decade GDP would be higher by 2 to 3 per cent. The Committee on Excise Structure Rationalisation has suggested the imposition of 1 per cent duty on all commodities which have at present no excise duty. This list has 600 items based on socio-economic considerations. The committee has proposed three slab structure at the rate of 5, 15 and 25 per cent with no change in rates for five years. This will help the industry to implement long term plans. Other suggestions include exemptions for khadi and village industry and for goods manufactured without the aid of power and units located in rural areas. Ex-nominal excise structure for SSI sector has been proposed. These are not ideal suggestions but are quite practical. Budget proposals have to find a level between the fiscal constraint of the government and recession faced by the industry. The suggestions for HTE SSI sector if implemented certainly satisfy this criterion. With some exemptions based on socio-economic basis the nominal duty suggested is 1 per cent upto the clearance of Rs 1 crore. For clearance exceeding Rs 1 crore but not more than Rs 2 crore duty proposed is 2 per cent and for clearance beyond Rs 2 crore and not exceeding Rs 3 crore duty should be 3 per cent. No Modvat is allowed for this category. The SSI sector will be free from any inspection and audit by Central Excise officials. Tiny sector with investment in plant and machinery up to Rs 25 lakh should be exempted. Excise procedures have stinted its natural growth which has gone more horizontal than vertical. According to statistics 90 per cent of such units have investment of around Rs 5 lakh. This can further prompt the Finance Minister to implement these suggestions and bulk of this sector remains unaffected. The taxation structure affects the competitive edge of the industry. So the exempted category, whatsoever should not be allowed to enjoy the facility on wrong facts. Horizontal expansions on fictitious ground realities will have to be discouraged. It is imperative that investment limit of plant and machinery for the SSI sector should remain at Rs 3 crore. Lowering of this limit shall blunt its growth. The government has received yet another report from the Iyer panel. It has suggested to modify the periodicity of excise payment from daily basis to monthly mode. It has suggested that duty on goods cleared during a month should be paid by the seventh of the following month or the next day if seventh is holiday. To safeguard revenue it has proposed 2 per cent interest per month and a minimum of Rs 1,000. The restrictions on availing of Modvat should go. On practical grounds these suggestions have much merit. Many a time goods cannot be cleared due to lack of funds. This hampers production and cash flow. The government has to ensure that arrears do not go beyond one month to safeguard its revenue. With the present fiscal
scenario nobody expect miracles from the Finance
Minister. However, to save worst-affected industries will
be in the larger interest of the country. Steel, cement,
paper and capital goods sectors have been badly mauled.
Duty reduction for these sectors becomes essential. |
Indians in America are rich but politically poor WASHINGTON, Jan 31 (PTI) — Not a single person from among the over a million non-resident Indians (NRIs) in the USA has been able to reach the 435-member House of Representatives, though they have done very well economically. This was realised by the Indian community in an introspective mood on the occasion of India’s 50th Republic Day and the death anniversary of the Father of the Nation, Mahatma Gandhi, on January 30. The only Indian American who has ever been a member of the House of Representatives was the late Dilip Singh Saund from California, but that was long ago and the current generation of Indian Americans do not even recall that period. On the contrary, Japanese Americans, Chinese Americans, Philippine Americans and Americans of Latin American origin have done far better in the political field. However, economically, Indian Americans’ mean family income, which according to the Census Bureau, is $ 59,777 — highest of any Asian group in America. The Indian Americans’ average per capita is at least 25 per cent higher than the American national average. Indian Americans’ high income reflects their advanced educational levels — over 87 per cent have completed high school and over 58 per cent hold a bachelor’s degree or higher, ahead of the second placed Chinese Americans, 40 per cent of whom are college graduates. In the USA as a whole, only 20 per cent of Americans hold a bachelor’s degree or better. According to the Republic Day souvenir volume, over 5,000 Asian Indians today serve in the USA as faculty members. Two Asian Indians — Hargobind Khorana at the Massachusetts Institute of Technology and Subramanyan Chandrashekhar at the University of Chicago — have won the Nobel prize in Medicine and Physics, respectively. At the Republic Day
banquet organised by the Indian community in the Greater
Washington area, the number of practising Indian doctors
in the USA was put by a doctors’ association at
25,000. |
HLL, NIIT among top Asian stocks NEW DELHI, Jan 31 (PTI) — Morgan Stanley Dean Witter has rated Hindustan Lever Ltd (HLL), NIIT and Housing Development Finance Corporation (HDFC) among top 20 Asian stocks which offered most attractive valuations. The list, “20 timely ideas”, is a compilation of top Asian companies, which have a competitive edge that is sustainable, either domestically, regionally or globally and is not reflected in their share valuations. While information technology education company, NIIT has a “global edge” for its worldwide leadership in its sector, HLL and HDFC have “local edge” for being leaders relative to their domestic competitors. Morgan Stanley said NIIT was selected in the 20 timely ideas for capitalising on the growth of the Indian education and software industry by continuously investing in new education centres and by increasing its focus on software, especially education software. HLL, the largest fast moving consumer goods (FMCG) company in the country, had arguably the most extensive and cost effective FMCG distribution system, especially in the rural areas. The consultancy said
HDFC’s competitive edge lies in its brand name,
super efficiency and well-managed credit risk. |
Coke signs up Salman NEW DELHI, Jan 31 (UNI) — Coca-Cola India has roped in muscle flexing hero Salman Khan to endorse the home-grown brand Thums Up, completing the “Judwaa” star cast as a response to Pepsi’s “Kuch Kuch Hota Hai” team. While company sources said that they have been in talks with Salman for a long time, industry watchers said this could be in response to Pepsi’s ask for more advertisement featuring the “Kuch Kuch Hota Hai” star cast, of Shahrukh Khan, Kajol and Rani Mukherjee sans Salman Khan. To start with, Salman
would feature for a small duration in Thums Up’s
ongoing thunder gear advertisements. “But the first
complete Salman Khan advertisement would be telecast
within a month,” the sources added. |
PNB launches Krishi Card CHANDIGARH, Jan 31 — Punjab National Bank launched its Krishi Card at a function at Fatehgarh Sahib yesterday. Mr I.D Singh, Dy. General Manager, PNB, who presided, said Krishi Card will be issued to farmers who can withdraw up to Rs 1 lakh from any branch of PNB in the district. The interest charged will be 13.26 per cent only. Under the scheme a farmer is not required to submit any bills and he can use the amount on education, consumable items, medical expenses, besides agriculture inputs. The card, valid for three years and is renewable, will be issued only to literate farmers with a minimum land holding of 2.5 acres. Mr D.P.S Walia, Additional
DC (Development), who was the chief guest, distributed
Krishi Cards to 25 farmers. Eightyfive farmers were given
sanction letters of credit limit of Rs 1 lakh. Mr Jham,
AGM, Nabard, and Mr P.S Bakhshi, Lead District Manager,
also spoke. |
G.G. Vaidya is SBI chief MUMBAI, Jan 31 (PTI)
—Mr G.G. Vaidya, Managing Director and Group
Executive (national banking) of the SBI, will assume
charge as its Chairman tomorrow. Mr Vaidya, who had
joined the bank as a probationary assistant in January
1962, takes over from Mr M.P. Radhakrishnan, who retired
yesterday. Mr Vaidya was earlier General Manager,
Corporate Treasury and the Chief manager (Credit) in the
International Division of the bank. His tenure will be up
to October 31, 2000. |
So far, the market has been moving within a narrow range of 3200-3400 points on the Sensitive Index. The important question is: would the market cross this barrier of 3400 points and leap up to ride the bull? It is a very difficult question to answer for there are many imponderable factors that may influence the behaviour of the stock market this fortnight and later. The Budget session of the Parliament begins on February 22 and it is uncertain whether the budget proposals would buoy up the corporate sector. There are no doubt some positive factors. The third quarter results declared by the corporate sector so far, are encouraging. A detailed analysis made in a leading financial daily indicates that the 510 companies which have declared their results so far have done reasonably well. The sales have registered a rise of 11.7 per cent and the net profit had moved up by 19.18 per cent. But as the analysts point out, these results are from sectors that have not been affected by recession. Moreover, about 80 to 85 per cent of the corporate sectors has yet to announce the results. Morgan Stanley Dean Witter Investment Management, the fund manager of Morgan Stanley Growth Fund expect the Indian economy to stage a modest recovery in 1999. The most important factor, apart from that of political stability in our country, is the prospect of Indo-US agreement on the lifting of sanctions on India. The recent reports are that things are moving in the right direction. The telephone conversation between President Clinton and the Indian Prime Minister on January 29 provides a further confirmation that some kind of settlement may be reached between India and the USA in the near future. These reports, if further confirmed by the turn of events this fortnight, would certainly lift the market in spite of the uncertainties of the forthcoming budget proposals. A durable understanding between the two countries would go some way in bringing a turn-about in the economy and the stock market in 1999. There are, of course, many negative factors unfavourable for the recovery in the market. The economy is still not doing well. According to an official release from the Central Statistical Organisation, the industrial growth rate for the period April-November 1998 is just 3.7 per cent, as against 11.8 per cent for the corresponding period last year. No stock market can have a smooth swim in the stormy waters of a weak and turbulent economy. During the financial year 1999-2000, the divided payments are likely to be severely curtailed and net profits would surely fall. When one analyses the third quarter results so far announced, the inescapable conclusion is that while the software sector, the FMCG sector and pharmaceutical sector (particularly the multinational pharma companies) are doing well, the automobile sector (including the ancilliaries), the cotton and textile sector, the hotels, the iron and steel sector are performing badly. The fertilisers are doing quite satisfactorily. The Finance Minister has already announced that the coming budget will be a harsh one. The PDS commodities and the fertilisers prices have already been hiked by the government. There may be some rollback in the higher prices already announced prices but even then such concessions will be of a minor nature. It is also expected that interest rates would be cut down. There may not be any change in the personal and corporate tax rates but many of the reliefs now available under the Income Tax Act at present may be withdrawn. There would be a drastic recast in the custom and excise duties. This fortnight is not the
right time to make any fresh investments. The long-term
investors should wait and watch for the budget proposals
before they plunge into the stock market. The traders may
have a hectic time during this fortnight because of the
Indo-US parleys. |
Lucknow, known as a “sleepy town” will be an international airport from February 3. An inaugural flight from Amausi airport to Sharjah will operate on Wednesday (Feb 3) with all the usual pomp and show associated with inaugural flights. Indian Airline (IA) officials are optimistic that twice a week flight (Wednesdays and Sundays) will be even more successful than the Amritsar-Sharjah flight. The airline officials emphasis that it has been initiated at the behest of the popular and persistent demand from people. The airport and also the terminal building are being suitably renovated. The UP Government has asked for a sizeable grant from the Central Government for an adequate facelift of the airport. The airport lacks in basic facilities. There is no regular taxi service except between the airport and a five-star hotel. The passengers travelling to Sharjah or returning from there should be provided a taxi service from the airport to any hotel or their destination. This is the minimum that the UP Government has to initiate to make a success of the flight. A violation According to aviation experts, it was a serious violation as UP Governor was on board the flight. The visibility was less than 1200 metres and the pilot yet decided to land. Following this violation, the Directorate-General of Civil Aviation (DGCA) took action against the pilot, as it ought to have been. But the pilot, who is well connected politically, is said to be trying to get his licence back. Another flight With the introduction of this direct flight, passengers for Bangalore will travel from New York on Thursdays and, after transiting in Mumbai, arrive in Bangalore on Saturdays. Air India will also offer two more services a week from Bangalore to London/New York on Tuesdays and Fridays with change of aircraft at Mumbai and from New York to Bangalore on Tuesdays and Saturdays. Slump in market In view of declining
business, some travel agents are even offering
‘complimentary’ tickets to influential
customers. Some airlines, like, Cathay Pacific, offer
hotels in Hong Kong at throw away prices. |
Videocon Intl Shubhiata Arora II I have 25 debentures of Videocon International under Folio No R 0059100. The debenture certificate was sent to the company on 13.11.1998 for payment of redemption money. The company has neither returned the certificate nor made payment despite repeated requests. Ram Murti Devi DCM Fin I invested Rs 10,000 with D.C.M. Financial Service Ltd vide FDR No 56483 dated 6.1.1997 for one year. The FDR due for payment on 6.1.1998 and was deposited in their Chandigarh office on 25.11.1997. However, no payment was received despite repeated visits to their Chandigarh office. However, on the direction of CLB the company intimated vide letters dated 21.7.1998 and 31.8.98, that 50 per cent payment will be made within one year of date of maturity, rest next year with interest. However, no payment has actually been received by me so far. Vishal Sharma |
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| Inflation up NEW DELHI, Jan 31 (PTI) — The annual rate of inflation crept up marginally to 4.44 per cent for the week ended January 16, reversing a nine-week long declining trend when it touched a one-year low of 4.43 per cent in the previous week. The marginal increase in inflation of 0.01 per cent to 4.44 per cent (provisional) from 4.43 per cent (p) in the previous week was primarily on account of 8 per cent price increase of soyabean . Milk society Immigration |
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