Dabhol, British Gas get FIPB clearance
NEW DELHI, Feb 6 — Foreign Investment Promotion Board today cleared foreign direct investments worth Rs 2,750 crore, including Dabhol Phase II power project and British Gas.

SBP launches Kisan Card
PATIALA, Feb 6 — In a unique move to make cash credit available to farmers in Punjab, the State Bank of Patiala today launched ‘Patiala Bank Kisan Cards’ to cater to the rural sector.

Make offices ‘energy-efficient’
NEW DELHI, Feb 6 — Alarmed by the colossal waste of Energy in the country, CONSERVE, a Delhi-based non-governmental organisation, has urged the Central Government to take the lead in making its offices energy-efficient.

'More scope for cycle parts export' CHANDIGARH, Feb 6 — Dr Sen Gupta, Dean of the Indian Institute of Foreign Trade,New Delhi and his team comprising Prof Satinder Bhatia and Prof Panda today presented study report on “export marketing of select products from Punjab” to Mr Ramesh Inder Singh, Secretary Industries and Commerce, Punjab.

SmithKline Beecham net rises
NEW DELHI, Feb 6 — Smithkline Beecham Consumer Healthcare Limited today reported higher net profit and turnover at 31 and 14.8 per cent respectively for calendar 1998.

Dabhol, British Gas get FIPB clearance

NEW DELHI, Feb 6 (PTI) — Foreign Investment Promotion Board (FIPB) today cleared foreign direct investments (FDI) worth Rs 2,750 crore, including Dabhol Phase II power project and British Gas.

The board approved Enron’s proposal to bring in $ 452.7 million as foreign equity in the 1,444 MW second phase of the Dabhol Power Project in Maharashtra, Industry Ministry sources said.

Though Enron would hold 100 per cent stake in the second phase initially, Maharashtra State Electricity Board (MSEB) would have an option to pick up 30 per cent in the project.

FIPB also cleared a proposal of British Gas Pvt Ltd to increase equity capital in its holding company for investing in energy, gas and power sectors in the country.

British Gas would increase equity capital in the holding company from $ 2 million to $ 100 million (about Rs 411.6 crore), the sources said.

Among 38 FDI proposals cleared today, one was by Virdian Group of Ireland to set up a holding company in the country to invest in power sector. Virdian would bring in FDI worth Rs 22.5 crore.

The Irish company has also been allowed to pick up 25 per cent in a power distribution company in Orissa, if the company is successful in its bid.

The board also cleared the proposal of Allianz Alpic Finance to start NBFC (non-banking finance company) activities in the country.

German company Allianz will hold 51 per cent stake in the NBFC by bringing in Rs 5.1 crore as FDI. The remaining 49 per cent would be held by the Indian partner Alpic, sources said.

More scope for cycle parts export: study
Tribune News Service

CHANDIGARH, Feb 6 — Dr Sen Gupta, Dean of the Indian Institute of Foreign Trade (FT), New Delhi and his team comprising Prof Satinder Bhatia and Prof Panda today presented study report on “export marketing of select products from Punjab” to Mr Ramesh Inder Singh, Secretary Industries and Commerce, Punjab.

IIFT was commissioned by the PSIEC to conduct a study on thrust products for exports. The study also analysed the possibility of promoting Indo-Pak trade through land route. According to findings of the study expansion in exports can be achieved by widening the products composition, technology upgradation and strengthening of marketing system. The report said bi-cycle parts, hand tools and sports goods from Punjab have a good scope for growth provided there is a paradigm-shift in the mindset of the entrepreneurs and the work culture gets tuned with the western ethos. Another observation related to the underutilisation of the CFS at Amritsar and Jalandhar set up by Punjab State Warehouse Corporation.

Capt. Narinder Singh M.D., PSIEC said that share of Punjab exports in India’s exports is merely 2.4 per cent which should to be enhanced.

Mr Ramesh Inder Singh, Secretary Industries and Commerce, announced after sub-groups for giving pragmatic shape to the recommendations in a time-bound manner. The sub-group on infrastructure will be chaired by Mr Karan A. Singh, M.D. Punjab State Warehousing Corporation and it would also include the representatives from the industry and the shipping companies.

Make offices ‘energy-efficient’
Tribune News Service

NEW DELHI, Feb 6 — Alarmed by the colossal waste of Energy in the country, CONSERVE, a Delhi-based non-governmental organisation, has urged the Central Government to take the lead in making its offices energy-efficient.

CONSERVE has urged that the Shram Shakti Bhavan in the Capital, the headquarters of the Power Ministry, should be designated as the Central Energy Saver showcase for 1999. This would entail replacing traditional bulbs with more power efficient bulbs, automatic sensor-based switch on and off systems, making maximum use of natural light and optimum use of air-conditioners.

The President of CONSERVE, Ms Anita Ahuja, told TNS that the NGO, comprising top energy efficiency companies, has proposed a new national campaign of “moral persuasion” to inform industry and other consumers that there are other ways to reduce energy costs without resorting to pilferage and non-payment.

CONSERVE has already approached the Union Power Minister, Mr P.R.Kumaraman-galam, and the Minister was very much open to the idea of the Government initiating the lead.

Ms Ahuja pointed out that between 30 to 50 per cent of energy consumed in India was wasted.

To strengthen India’s ability to deliver energy efficient products and services, CONSERVE with Alliance to Save Energy of the USA have also created the Council of Energy Efficiency Companies of India. This non-profit trade association would represent and promote the interests of the country’s energy efficient industry.

SmithKline Beecham net rises

NEW DELHI, Feb 6 (PTI) — Smithkline Beecham Consumer Healthcare Limited (SBCH) today reported higher net profit and turnover at 31 and 14.8 per cent respectively for calendar 1998.

Attributing these results to volume growth and SBCH’s commitment to internal productivity and cost optimisation, a company release said the 1998 turnover was Rs 645.62 crore with a Rs 81.35 crore net profit.

Among the significant brand launches and upgradations in 1998 were “new Horlicks with smart nutrients” and the Aquafresh Flexikid toothbrush.

Daler Mehndi live concerts
Tribune News Service

CHANDIGARH, Feb 6 — Coca-Cola will enthral consumers in Punjab and Uttar Pradesh with live concerts by Daler Mehndi. Coca-Cola is taking Daler Mehndi on a 30-city live tour, called ‘Coca-Cola’ tour Daler Da, which commenced with the first concert in Ahmedabad recently. The tour is being presented in association with MTV. In February, the tour will hit Delhi today followed by Jalandhar, Chandigarh, Agra, Kanpur, and Varanasi in quick succession.

Bonded trucking from March 1
Tribune News Service

CHANDIGARH, Feb 6 —The Standing Committee on Promotion of Exports by Sea and the Standing Committee on Promotion of Exports by Air which function under the Ministry of Commerce held a meeting here today. It was hosted by the Punjab State Warehousing Corporation (PSWC). Mr Nripendra Misra, Additional Secretary to the Ministry of Commerce, chaired the meeting. Chief Executives of various government agencies ports and export-import houses including the chairmen of Jawaharlal Nehru Port, Mormugao Port and Kandla Port, took part. The MD of the PSWC informed that container freight station, Ludhiana being operated by the corporation was the second largest facility in the North India. He said the bonded trucking would be started from March 1 to facilitate exports by air.

SBP launches Kisan Card
Tribune News Service

PATIALA, Feb 6 — In a unique move to make cash credit available to farmers in Punjab, the State Bank of Patiala today launched ‘Patiala Bank Kisan Cards’ to cater to the rural sector.

The cards, which were distributed to 233 farmers at a special function presided over by bank Managing Director Ram K. Gupta, will cover all existing literate crop loanees of the bank having a land holding of five acres and above.

Disclosing the details of the scheme, Mr Gupta said farmers having a good track record of returning loans and those requiring composite production needs would be covered by the scheme.

Mr Gupta said the card would be issued in 90 branches in the state and that 575 cards had been distributed through the bank’s branches in Patiala, Sangrur and Fatehgarh Sahib in simultaneous functions held today. He said the bank had planned to introduce this scheme in 200 branches by next year.

Speaking on the occasion, Patiala Division Commissioner R.P.S. Pawar appealed that some schemes should also be launched to cater to small and marginal farmers as a bulk of farmers in the state had land holdings less than five acres and would not be eligible for the scheme.

Mr Pawar also cautioned farmers to use the Kisan Card only for agricultural loans and not for weddings, house building or other social activity.

Pulses shortage this summer?
By Gobind Thukral
Tribune News Service

CHANDIGARH, Feb 6 —After the onions, it is the turn of the pulses to make people, particularly the poor cry. Pulses whose prices are already very high may skyrocket this coming summer. Common people, particularly those who are vegetarian meet their nutritious needs from pulses.

The country would be facing shortage, says a survey conducted by the Assocham. Most experts in Punjab and Haryana agree with this. The northern states are particularly vulnerable as farmers are shifting from food to cash crop production.

This analysis reveals that the major pulses producing states such as Orissa, Punjab, Uttar Pradesh, West Bengal, Haryana and Bihar have witnessed a downswing in production during 1996-97 compared with 1990-91. The reports for 1997-98 were also not encouraging.

While in Punjab total production of pulses dropped from 108,400 tonnes in 1990-91 to 80,800 tonnes in 1996-97, Orissa suffered a setback from 10,85,000 tonnes to 2,99,000 tonnes during the comparable period.

In Haryana, pulses production dropped from a high of 540,000 tonnes to 342,000 tonnes in 1990-91 and 1996-97, respectively.

Neighbouring Himachal Pradesh too slipped in production from 1,35,000 tonnes to 1,14,000 tonnes during the same period.

While the overall production for the country registered a marginal increase from 1,42,65,000 tonnes to 1,44,59,000 tonnes, what is worrisome, according to Assocham is that in a situation of near stagnancy in production and divergent output trends in different states there could be huge and devastating shortages in different parts of the country.

This, according to the Chamber, is so because of the less developed agricultural markets in India which are characterised by high trade margins, commodity speculations and inadequate storage facilities.

Besides inadequate road network and interstate restrictions hamper the movement of agricultural commodities, there is almost complete absence of proper markets for sale and purchase of land as well as lease of land resulting in considerable disadvantage of small scale of operation. This leads to prevalence of absentee landlords and crop sharing practices.

The Assocham analysis shows that there are massive regional disparities not only in agricultural incomes, but also in yield rates, agricultural infrastructure and adoption of modern farm practices. Coupled with restrictions on inter-state movement of agricultural commodities, this can give rise to strong regional vested interests and regional lobbies.

Considering various socio-cultural and economic factors in the northern states particularly, farmers have to be convinced either through demonstration or any other democratic means to adopt new technology. This needs agricultural extension and supportive institutional network with clear understanding of agricultural technological parameters and constraints. This calls forth professionalisation of agricultural administration in the country.

Corporate sector of NGOs involved in rural development, education or health projects can be effectively involved in such extension work and performance based specific incentives should be provided to them. Subsidies on fertilisers, tractors, improved agricultural equipments, demonstrations, input kits, etc., may be regarded as investments by the government to encourage the farmers to adopt modern practices and may be continued in selective regions requiring them the most.

The institutional support has to be provided in terms of strengthening the distribution channels for agricultural inputs including credit. There is a need to improve road and communication networks to cover all villages so as to improve information flow and speedy movements of goods. For ensuring efficiency, the distributional channels should be with private sector.

by Ashok Kumar
’99 belongs to pharma & telecom shares

WILL 1999 be a better year for the Indian bourses ? 1998 was a washout to say the least. Share prices of companies across the board barring those engaged in segments like infotech, pharmaceuticals and cigarettes recorded a decline during the year 1998. The bourses have generally been sluggish with the BSE sensex declining by around 700 odd points during the year. So then, which is the segment to invest in during 1999. Well, I would place my money on the omnipotent pharmaceuticals segment. As for a dark horse segment, I would place my money on the telecom segment.

The pharmaceuticals industry in India can be broadly divided into two segments viz. bulk drugs and formulations. In the bulk drugs segment, achieving large volume possible cost per unit is crucial. For this a high degree of process efficiency is essential. Of late, however, most of the bulk drugs are traded as commodities with prices fluctuating with the international demand supply equation. Hence, the Operating Profit Margin here varies depending on the price fluctuation. The big players have multiproduct plants and they vary the production of different drugs as per market trends. The key to success on a sustained basis in this field is quickly moving away from older generation drugs to newer generation drugs. The formulations segment can be subdivided into generic and branded segments. Generic is the most competitive segment in which it is only a volume game with very thin margins. However, of late, many big players are setting up state-of-the-art plants to export generic formulations. Branded formulations can be either prescription or OTC products. While the former requires marketing to doctors, the latter requires advertising and publicity. Margins in this field are attractive if the product succeeds but frequent launches of new products and an aggressive marketing and distribution set-up are essential. This segment has the advantage of being an evergreen one, which is least susceptible to economic downswings. Most importantly, the companies engaged in this segment, particularly the MNCs have realised the potential of biotechnology and life sciences and are hiving off separate companies to concentrate on these fields of the future.

Telecommunications is no more a luxury, but a necessity subsequent to economic development especially in an era of economic liberalisation and globalisation of trade, financial and labour laws. The government has realised the need for faster and comprehensive development of telecommunication in the country, along with privatisation. However, nothing much has really been done in this segment. The objective of privatisation was not only to fulfil the need for faster and comprehensive development of telecommunication but also make India recognised as a major manufacturing base and exporter of telecom equipment. But the fact is that most companies find it difficult to survive due to the whims and fancies of DoT. Nevertheless, many MNCs which set up shop in India are also repenting their decision. It is a trying period for the telecom industry, which is evident from the fact that the private enterpreneurs have not even started full-fledged operations and are already facing crisis on account of uncertain policies. Due to the sudden changes in the policies as well as delays in finalisation of projects, the industry been badly affected. Yet, notwithstanding all the negative factors, this is an industry with immense growth potential, making it a fair dark horse bet.

Now, onto the oft repeated question about the potence of the software segment. Well, I’d give it another six to nine months before its honeymoon with investors cools off. So, make hay while the sun shines.

Selling sleep is big business in Spain

SPANIARD Federico Busquets has found a profitable business: selling sleep. Hundreds of businessmen and other city dwellers who are too busy to go home for the traditional afternoon siesta have already napped at Busquets’ 30 massage parlours in Barcelone and Madrid.

Half an hour’s nap in a declining chair costs 500 pesetas (Rs. 150). If the nap is preceded by a brief massage, the price rises to 1,000 pesetas.

“I noticed businessmen sleeping badly in their cars while waiting to go back to the office,” says Busquets, whose clients also include taxi drivers exhausted by traffic jams and students coming to nap during exam breaks.

Scientists say Busquets is on the right track. The Spanish tradition of the siesta is indeed back in fashion, with researchers in other countries taking an increasing interest in it, according to press reports.

Researchers say the custom should be revived because, as sleep expert Eduard Estivill puts it, “our brain needs rest twice a day, at night and between 2 and 4 O’clock in the afternoon.”

At Busquet’s massage parlours, the nap is taken in a declining massage chair which supports the sleeper’s head, shoulders and back. The lights are dim, and soft music lulls the client to sleep.

Some Spaniards even put on their pyjamas and climb into bed. But, wherever you nap, experts say the siesta should never be used to make up for sleep lost during the night, and it should not exceed 20 minutes in order not to perturb the body’s natural rhythm.

“If you sleep for longer than that, you will wake up in a bad mood,” Estivill warns.

Indoor games

FROM discos to billiard parlours — the shift has been quick for the young Indian who, even when he had the inclination and the ‘moolah’, didn’t have much of a choice so far when looking for high-profile recreation.

Targeting the nouveau riche by offering “clean” entertainment are an array of indoor games parlours — from billiards to bowling — which are growing in popularity across the country.

“It is the market potential and the growing spending power of the people which has led to the boom in indoor games parlours,” says Sunil Anand of one such outlet in Delhi.

“The influx of international sports channels also played a major role in popularising English and American games among Indians,” notes K.P. Singh of Tripti Billiards.

For Rs 100 to 150 for an hour, these parlours provide all that one needs to play billiards, pool or snookers, including instructors. “Most people do not know how to play the game, but we have markers who train them after which all that is required is practice,” says Singh.

Many of them have added other recreational activities such as ice-skating video games and even carrom, or opened up cafes and snack bars to attract more people. “The money we charge — Rs. 100 per bowling game — keeps many at bay. But then our investment is so much that we cannot help it,” says Narinder Anand, managing director of a bowling alley.

First time

The Executive Board of the International Monetary Fund has nominated Mr K.N. Memani Chairman, Ernst and Young, to its three-member External Audit Committee.

This is the first time that an Indian has been nominated to this prestigious committee.

The other two members are from Argentina and the UK.

Reacting to the appointment, Mr Memani who is also country managing partner S.R. Batliboi and Company said, “I am delighted to have been accorded the privilege of being the first Indian on the External Audit Committee of the IMF.” Agencies.

SRG Infotech

WITH the bourses continuing to go gaga over software scrips, it is a little surprising that punters have maintained a relatively low profile at the counter of a scrip named SRG Infotech, which has witnessed occasional flare-ups in its price over the last one year. Priced below its par value of Rs 10, this scrip is now in the ‘No-Delivery’ trading zone and the grapevine has it that this time around, a prominent BSE bull operator has already commenced accumulation of this scrip. Keep an eye on its share price.

Provident funds

ONE of UTIs former chairman, whom, many hold responsible for UTIs current mess on account of his support for a dubious deal involving the purchase of shares of Reliance Industries well above its then prevalent market rate is now eyeing Provident Funds. He has recommended that Provident Fund moneys be invested in equities. Given his track record, the government would do well to ignore his recommendation and not expose the hard earned funds of employees to the volatile equity market.

Square D Software

THE grapevine is abuzz with rumours that the management of Square D Software is on the verge of a negotiated deal with an American software corporation for the placement of its shares. The price? Well, the grapevine places it at around Rs 600. Interesting!

Hind Lever

AFTER the SEBI enquiry into its alleged indulgence in ‘Insider Trading’ at the time of the HLL-Ponds merger. HLLs management is playing it real safe. Recently, when FII buying sent its share price soaring, local operators jumped into the fray spreading rumours of an imminent bonus issue. It is worth noting here that HLLs management chose to issue an official denial the very same day. After all, why take chances with SEBI ?

by R.N. Lakhotia

Q: I have been allotted a flat by Housing Board. The total cost of flat is Rs 7.33 lakh. I want to pay this amount in full to Housing Board. Please clarify:

Can I take loan (or use funds of) from my father Rs 4 lakh. Rest of the amount shall be arranged from HDFC (Rs 3.33 lakh).

If yes, what formalities should I complete?

If no, how can I use the funds of my father.

— A. Walia, Mohali

Ans: To take loan from your father you need not complete any formality; just take A/c payee cheque from your father on account of loan. Also enclose with your Income-tax return a loan confirmation letter from your father stating that he has given the loan of Rs 4 lakh to you. After receiving the loan from your father you can utilise this money for the purpose of making payment to the Housing Board to clear the loan of the Housing Board.

Q: I am a bank employee and have availed of housing loan in 1990 to purchase a ready built house. In 1997, I availed of a loan from Provident Fund Department for renovating/alteration in that house. Whether I can get income-tax rebate in principal and interest payment to P.F. Department also.

I have availed a loan on FDRs and NSCs, while calculating interest income on FDRs and NSCs, can I deduct the interest that had accrued/paid on loan on these FDRs and NSCs. e.g. If interest income on these FDRs/NSCs is 5000 (suppose) and interest accrued/paid on loan on these FDRs/NSCs is 2000. Should I take interest income as 5000-2000=3000?

— G.P. Singh, Ludhiana

Ans: In respect of loan taken by you from the provident fund you will be eligible for tax rebate u/s 88 in respect of the said loan because taking loan from the provident fund is not an accepted and recognised mode for the purposes of tax rebate u/s 88. Similarly, the interest which you pay to the provident fund department would also not be deducted from your income. In respect of interest paid by you on the loan taken against the fixed deposits the same would be allowed as a deduction from the gross total interest income arising from the fixed deposits hence, in the situation mentioned by you for the purposes of income-tax the net income from fixed deposit to be taxed with your income will be Rs 3,000.

Q: I am an agriculturist and pensioner and is at present over 80 years of age. My income is as under:-

1) Pension -Rs 36000 p.a.

2) Agr. income -Rs 40000 p.a.

A piece of my Agriculture land was acquired by the Chandigarh Administration. I am likely to get Rs 10 lakh within a month or so on account of the acquired land.

Please let me know my tax liability on Rs 10 lakh. Please also let me know how I should invest this amount, so that I may be free from Income-tax liability.

— Sardara Singh, Chandigarh

Ans: On the facts stated by you, there is no liability of Income Tax on you on your pension income and agricultural income. This is because of the fact that your other than agricultural income is below the agriculture limit, hence, the agriculture income will not be aggregated for rate purposes. In respect of likely compensation which you are to receive in respect of acquisition of your agricultural land, to avoid payment of income-tax on the same, you should make the investment in terms of Section 54EA or Section 54EB of the Income-tax Act, 1961 within 6 months from the date of receiving the compensation.

by Praful. R. Desai

Opportunity to be heard

Q: Can an order of penalty be passed for unjustified delay in payment of compensation, without giving an opportunity to the employer to be heard?

Ans: The Karnataka HC in Samboji Rao S.V. Oriental Insurance Co, Bangalore (1999-I-LLJ-222) was expressing the view thus:

There is no quarrel between the parties as to the compensation amount awarded. But the appellant who is the owner of the lorry has challenged the penalty levied on him U/s. 4-A (3) of the Workmen’s Compensation Act by the Commissioner.

It is contended that the impugned award in so far as it relates to levy of the penalty is bad in law in as much as the Commissioner has not exercised his discretion judicially in levying the penalty and without giving opportunity to justify his conduct in depositing the amount well within time. He has taken support of the decision in N.A.K. Pathan v Julekhabi Pathan (I LR 1986 Kar 2413). It has been clearly held therein that unless the employer is called upon to show cause for the delayed payment, it is not reasonably possible for the Commissioner to come to the conclusion whether or not there is justification for the delay.

If any opportunity that had been given to the appellant in this regard, in the instant case, the HC said, perhaps he would have come forward with some justification for the delayed payment. Therefore, the HC held that the levy of penalty on the appellant cannot be sustained.

The HC further added that in so far as the amount of penalty imposed on the insured employer under contingencies contemplated by S4-A(3) is concerned, the Insurance Co cannot be made liable to reimburse that part of the penalty amount imposed on the employer.

Therefore, the HC held that even if it is held, after the enquiry that the claimant is entitled for penalty U/s 4-A(3) of the Act, the Insurance Co will not be liable to pay the penalty amount and it is the owner of the vehicle who will have to pay such penalty. In the result, the appeal was allowed.

Stonetech fair
JAIPUR, Feb 6 (PTI) — Jaipur will host the “India Stonetech-2000” international stone fair in February next year, it was officially announced here today. The Rajasthan Industry Minister Pradhyuman Singh released the official brochure of the fair at the Stona-99 Exhibition-cum-Fair in Bangalore on Thursday, an official release said.

Autoguard
NEW DELHI, Feb 6 (TNS) — A new anti-theft device for vehicles, Autoguard, was launched here today by Snow Ball Technocrats Pvt Ltd in collaboration with US based Telectra International.

Jewellery show
NEW DELHI, Feb 6 (PTI) — Over 70 exhibitors comprising India’s leading international gems and jewellery exporters and manufacturers are expected to participate in the second India International Jewellery Show beginning here on February 20.

Urea production
NANGAL, Feb 6 (FOC) — The local unit of National Fertilisers Limited (NFL) recorded the highest ever monthly production of Urea during January, 1999. It produced 41,175 metric tonnes of Urea which is 132 per cent of its installed capacity. The earlier best was 40,525 MT during March, 1998.

Lupin Labs
MUMBAI, Feb 6 (PTI) — The Credit Rating Information Services of India Ltd (CRISIL) has downgraded the non convertible debenture (NCD) programmes of both Lupin Laboratories Ltd and Lupin Chemicals Ltd to default category. The NCD issue of Lupin Lab has been downgraded from “BB” to ‘D’ the default grade, the rating agency said in a statement.