Thursday, February 18, 1999
today's calendar
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B U S I N E S S | Thursday, February 18, 1999 |
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spotlight today's calendar |
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New exim policy on Tax
relief ? Wait for Budget |
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Exporters look for incentives in
Budget Go in for
contract farming: Sompal |
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Govt borrowings to exceed target ST
to be rationalised Tisco to
recast subsidiaries Danisco
to set up plant in Haryana WB
may give loan to India Sensex
sheds 8.26 pts on INLD decision |
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New exim policy on April 1: Hegde BANGALORE, Feb 17 (PTI) — The Centre would announce the new export-import (Exim) policy for the year 1999-2000 on April 1, Commerce Minister Ramakrishna Hegde said today. Several changes made in the Exim policy this year had started yielding results, though not to the expected level, Hegde told an interactive strategy session on "acceleration of exports", organised here by the Federation of India Export Organisations. He hoped exports’ growth would touch 4 to 5 per cent this year, as markets, hit by the Asian crisis, were showing signs of recovery. The country’s exports which registered a negative growth in the last six months had recorded a 2.5 per cent growth in November and December and would improve in the coming months, he said. He asked exporters to provide feedback on the efficacy of the export promotion measures already initiated by the government and suggest improvements so that the government could tailor the new Exim policy. Hegde suggested that exporters set high quality standards for their products to enable them to compete in the global market. He said considering the country’s potential, the exports were very poor. Hegde said the earlier projections by the Centre to achieve a 20 per cent growth rate had only remained a "hope" as the nation witnessed a negative growth in the last six months. He said, however, during November and December, exports registered a 2.5 per cent growth, signalling that the situation would improve from this month. In spite of the encouraging trend, the country was unlikely to cross the 5 per cent growth rate, which he said would be an optimism for 1998-99 "under the situation". He said similar interactive sessions would be held at Mumbai, Ahmedabad, Chandigarh and Hyderabad. The minister said the
government was seriously considering to extend duty-free
import for infrastructure projects including the power
sector, and continue package of concessions extended to
light engineering industry. |
Tax relief ? Wait for Budget NEW DELHI, Feb 17 (PTI) — Finance Minister Yashwant Sinha today declined to say if tax relief can be given for pension funds saying it would amount to leaking the Budget. Sinha was reacting to demands made by the Oasis Committee members headed by Dr S.A.Dave for making pension funds tax-free and imposing a withdrawal tax on those taking out their provident fund prematurely. "On your demands for relief on taxes I rather not respond on that. Even, otherwise, I am being accused of leaking the Budget. I rather be cautious,’’ he said after being presented the oasis report on old age and income security here.
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Exporters look for incentives in Budget NEW DELHI, Feb 17 — The Union Finance Minister, Mr Yashwant Sinha, faces an uphill task when he addresses the concerns of the Indian exporters in his second consecutive Union Budget for 1999-2000. Mr Sinha would have to do a balancing act in meeting the aspirations of the Indian exporters as he would also have to keep in mind the compulsions of the World Trade Organisation regime. Various organisations of exporters have represented to the Finance Ministry seeking the right kind of incentives and sops to exploit global markets. With exports still growing at a negative rate, the organisations have said exporters need policy, administrative, fiscal and operational support to the maximum to meet fierce competition and other challenges emerging in the global market. While export performance in the initial years of liberalisation were guided by reductions in protection and real exchange rate, the slump in growth in the last couple of years have led to demands from the export community for increasing protection and more fiscal incentives. But meeting the demands of the exporting community is not going to be an easy task for the Finance Minister as he would have to ensure that the measures he proposes are compatible with WTO rules. As it is, there are already enough sops provided by the Government for the exporters which face anti-subsidy duties in Europe and Canada. Several concessions provided by the Government under the Income Tax rules have been termed as equivalent to subsidies by the European Union. In other words the Finance Minister would have to ensure that the incentives he grants to the exporting community are not negated by counter measures by the trading partner countries and make them futile. The various organisations like the Confederation of Export Units and the Federation of Indian Export Organisation, however, see no merit in the complaints of the developed world at WTO and have argued with the Finance Ministry that the interest of the domestic exporters should be uppermost in the coming Budget. For one, the exporters have demanded that all export-oriented units should be provided 10-year tax holidays instead of the existing five. The Confederation of Export Units has argued that export-oriented units all over the world get incentives and it was not incompatible with the WTO rules. Hundred per cent tax exemption for project exports, relaxation of deemed exports criteria to provide them more tax incentives, and provision of cheaper credit is amongst the major demands of the exporting community. The FIEO has said that the Indian banks were flush with funds and if some of these funds find their way into export credit, then it may provide the required fillip to exports. The Finance Minister has already indicated that a rationalisation of the Central Excise rules was very much on the cards and this should be cause to cheer for the exporters. Regarding protection for the domestic industry, Mr Sinha has hinted that he has plans to fix a minimum floor duty on all import items that currently enjoy zero duty. The removal of zero duty regime, which are a heavy draw on the Government’s revenues, would apart from providing a minimum tariff protection for domestic industry and plugging exemptions would help raise total revenue. Though the move is bound to be welcomed in the political circles, it could still face criticism from international institutions. Even before the reversal, Indian tariffs were among the highest in the world. Similarly, despite the reforms, about 63 per cent of import lines were covered by non-tariff barriers of one kind or another, according to UNCTAD, higher than almost all comparable countries. With such criticism from
abroad, how far the Finance Minister goes in increasing
tariffs remains a question of speculation. |
Go in for contract farming: Sompal CHENNAI, Feb 17 (PTI) — Agriculture production in India is set to cross the record 200 million tonne mark during the current financial year, Union Agriculture Minister Sompal said here today. "We had a marginal drop in agriculture production last year as against the 199.3 million tonne we had achieved in 1996-97. However, this year we will cross 200 million tonnes for the first time," Sompal said, addressing a seminar on strategy for export of agri-products. The minister said though kharif crop did not grow as was expected due to delayed rainfall, the robust growth rate returned by the rabi crop offset the deficit. "In fact, the delayed rainfall has acted as a blessing in disguise. This has helped rabi crop to grow vigorously to surpass, for the first time, kharif crop production," he said. The World Trade Organisation (WTO) regulations that would soon remove quantitative restrictions on about 800 items of agri-products would throw up new challenges for the Indian agriculture sector now cocooned in protective regime. Indian industry should chip in with assistance for the agriculture sector by providing latest technology, fertilisers and sustained marketing facilities. Referring to the industry’s call for "corporatising" the Indian agriculture sector, Sompal said the only way this could be achieved was by promoting contract farming. "Given the socio-economic conditions and land reforms, it is virtually impossible to own land and then embark on agriculture. Industry should go in for contract farming," he said. Instead of emphasising on trading of commodites, the industry should come forward to promote growing commodities and other agri-products to help farmers maintain quality as well as quantity, besides ensuring right prices, he added. There was an immense scope
for exports of agri-products from the country, but
quality at international standards should be reached and
maintained to retain markets abroad, Sompal said. |
Govt borrowings to exceed target NEW DELHI, Feb 17 (PTI) — The government’s total borrowings for this financial year are expected to exceed the targeted amount of Rs 91,025 crore by Rs 15,000 crore, according to PNB Gilts, a leading primary dealer in government securities. The government borrowings have already exceeded by Rs 11,500 crore at the end of January this year. With the ever-increasing borrowings of the government, the pressure on medium to long-term interest rates is expected not to ease in the near future, PNB Gilts said in its recent fortnightly money market report. A look at the fundamentals of the economy also do not signal any easing of the interest rates. According to PNB Gilts, a fully-owned subsidiary of Punjab National Bank (PNB), next year’s government mop-up could be expected to be in the same range of Rs 85,000-Rs 90,000 crore. Out of the total Central Government securities issued during 1998-99, till January-end, 36 per cent has been through private placement with the RBI. Though this process leads to an increase in the RBI credit to the government, it has been able to control it by managing its open market operations. Despite the impending slowdown of exports growth in 1998-99, foreign exchange reserves have been comfortably managed. But with the world economy forecast of a slowdown in growth, exports are not expected to make a strong recovery. Though the market expects
short term interest rates to go down helping the
government to raise money at lower interest rates, it
seems that the RBI, to avoid sudden volatility in the
forex market, is not easing short-term rates. |
ST to be rationalised CHANDIGARH, Feb 17 — Rationalisation of the sales tax structure coupled with deterrents against evasion will be the two-pronged strategy to ensure buoyancy in revenue. This was stated by Mr Sudhir Mittal, Commissioner, Excise and Taxation, Punjab, at an interactive session with the Punjab Committee, PHDCCI, here yesterday. It is proposed to set up inter-state trade information centres at 16 entry or exit points of the State to collect information on all inter-state transactions. Once these Centres were set up, mobile checking under Section 14-B of the Punjab General Sales Tax Act would be minimised which would stop harassment of traders. The revenue is expected to go up by an estimated 20 per cent a year on the present Rs 1400 crore. Responding to an observation of Mr Amarjit Goyal, Chairman, Punjab Committee, PHDCCI, for reducing the 13 slabs of sales tax rates to four and suitably calibrating the sales tax of various commodities to provide a competitive edge to industry in Punjab, Mr Mittal said the government would do the needful. During the interaction,
PHDCCI members suggested rationalisation of sales tax on
iron and steel, sewing thread, rubber goods, auto
lubricants, auto-components and wheat products so that
these recession-hit units could become vibrant. |
Tisco to recast subsidiaries MUMBAI, Feb 17 (PTI) — Tata Iron and Steel Company Ltd (Tisco) has obtained shareholders’ approval for the sale of its cement division to Lafarge S A of France and declared intentions to reorganise eight subsidiaries. "We are looking at subsidiaries also. Those which add value will be kept and options would be considered for those which do not." Tisco Chairman Ratan N Tata told shareholders at an extra-ordinary general meeting (EGM) held here yesterday. Tisco would consider amalgamation of all subsidiaries into a single subsidiary or restructure them in one manner or another, Tata said. Tisco subsidiaries are Tata Refractories Ltd, Tata Pigments Ltd, Kalimati Investment Co Ltd, Tata Korf Engineering Services Ltd, Tata Incorporated, Stewarts and Lloyds of India Ltd, Tata Technodyne Ltd and Ipitata Refractories Ltd. The sale of cement division, comprising cement plants and other related assets situated at Jojobera near Jamshedpur in Bihar and Sonadih in Madhya Pradesh, would be for Rs 550 crore subject to variations in the value, including the net working capital to be determined on the proposed closing date. The EGM also passed an
enabling resolution to create mortgages, charges and
hypothecations in addition to existing ones to raise Rs
1,000 crore for meeting resource requirements over the
next few years and also retire some of the existing
debts. |
Danisco to set up plant in Haryana NEW DELHI, Feb 17 — Danisco Ingredients India Private Ltd, the Indian arm of Danish food conglomerate, Danisco A/S today announced the setting up of a manufacturing plant at Sohna in Haryana to produce food ingredients. The plant, with an initial investment of Rs 70 to Rs 100 million in the first phase will be commissioned in the third quarter of 1999, Danisco Ingredients Executive Vice-President Frederik Gejil-Hansen hassaid. The Indian arm of the three billion dollars food ingredient group is a joint venture between Danisco and Indian businessman Shiv Jatia, with the former holding 74 per cent and the latter owning the remaining 26 per cent. Announcing the company’s plans for the Indian market, Frederik said at a press conference that Danisco found the Indian market very different from the European market as there were thousands of medium-sized local producers in addition to the international food producers vying for market share. Danisco India, which has a
paid- up capital of one million US dollars, had received
the Foreign Investment Promotion Board (FIPB) approval to
set up the joint venture in August 1998. |
WB may give loan to India Washington, Feb 17 (Reuters) — World Bank lending for India could resume as early as tomorrow in a sign of international encouragement for New Delhi’s forward movement on the nuclear issue, a senior US official has said. The official told Reuters in an interview yesterday the USA was discussing the issue with other major industrialised nations and was working to get one loan — for the Andhra Pradesh power sector restructuring programme — approved by the bank on February 18. "We believe that it
(allowing the loan to go through) would be a reasonable
and positive signal to send at this stage and we hope
that others will agree with that", said the
official, who spoke on condition of anonymity. |
Sensex sheds 8.26 pts on INLD decision MUMBAI, Feb 17 (PTI) — Equities closed marginally lower in volatile two-way trading on the stock market today on alternate bouts of buying and selling. Initially, the market started on a steady note with the sensitive index at 3342.28. Thereafter, prices declined on selling pressure induced by the decision of the Indian National Lok Dal (INLD) to withdraw outside support to the ruling BJP-led coalition government at the Centre. As a result, the Sensex touched a low of 3280.68 but later recovered most of the losses to close at 3336.42, showing a net loss of 8.26 points from yesterday’s close of 3344.68. Brokers said the market today was mostly speculative driven with foreign institutional investors (FIIs) and local funds extending lukewarm support. FIIs bought small lots of L&T, IPCL, and Pentafour Software, while speculative activity was witnessed on the counters of Satyam Computers, Zee Telefilms and Pentafour Software. However, Tata Tea and Hind Lever (HLL) came under selling pressure from domestic funds. The BSE-100 index ended lower at 1477.59 from the previous close of 1478.42. The BSE-200 closed marginally up at 342.23 and the Dollex at 134.10 from the last close of 341.68 and 133.88 respectively. Tata Loco (Telco) shares after showing two-way movements on alternate bouts of buying and selling ended Rs 2.75 down at Rs 204.50. Though, it surged to Rs 211 at the outset on frenzied buying but late selling wiped-out earlier gains. Tata Steel shares also faced selling pressure and fell Rs 1.10 to Rs 125.50. Coming to the Infotech sector, Pentafour Software stocks rallied sharply by Rs 71.80 or 8 per cent to freeze at Rs 935.85 while Silverline Industries Ltd shares rose Rs 19.55 to be frozen at Rs 264 largely on persistent buying by foreign funds and domestic speculators. HCL Infosystems also
maintained rising trend and prices went up by a whopping
by Rs 41.40 to close at Rs 559.25. |
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Shoddy
units CHANDIGARH, Feb 17 — Members of the Shoddy Association have been holding a dharna in Palika Bazar at Panipat for the past one week in protest against the imposition of Central excise duty on shoddy yarn which has reportedly led to the closure of about 400 shoddy units in Panipat and Karnal districts. In the last one year, the Central Excise has been increased from 3 to 6 per cent surcharge. Tefal
dry iron CHANDIGARH, Feb 17 — Tefal India has launched its range of "dry irons" in India. The dry iron with an imported thermostat for automatic temperature setting will be available in over 100 cities in India and is backed by a 12-month warranty. Flori project JAMMU, Feb 17 (PTI) — An ambitious Rs 22 crore floriculture project is on the anvil in Jammu and Kashmir, Minister for Gardens and Parks Peerzada Ghulam Ahmed Shah has said. The project is aimed at boosting the potential of floriculture in the state and would give a new thrust to the state economy. LML
bikes NEW DELHI, Feb 17 — LML will roll out four variants of motor cycles by June this year, the company’s Executive Director, Mr R K Caprihan said here today. Speaking to mediapersons here today, Mr Caprihan said that the company would roll out variants of 100 cc motor cycles and another version in the 135 cc segment. The prices will range from Rs 37,000 to Rs 45,000. Meet on
prices NEW DELHI, Feb 17 — The first meeting of the Joint Monitoring Committee on prices of essential commodities will be held here tomorrow under the chairmanship of the Cabinet Secretary. This would be the first quarterly meeting of the committee since its inception for monitoring prices, availability and production prospects of all essential commodities. Forex rates MUMBAI, Feb 17 (PTI) — The following are interbank forex and RBI rates: (in rupees for unit) US $ Rs 42.45/46 Gold falls NEW DELHI, Feb 17 (PTI) — Silver prices nose-dived on the bullion market today on stockists selling influenced by lower overseas advices and closed Rs.350 lower at Rs.8150 per kilo. Along with the weak trend, gold also rolled down on slackness in buying against fresh arrivals. The quotations: Silver .999 (ready) 8150, delivery 8260, coins buyer 10,700 and seller 10,800. Standard gold 4360, ornaments 4210 and sovereign 3750. Commodities CHANDIGARH, Feb 17 —
Wheat 660, dara 670 to 672, superior 675, maize 640 to
650, sarson 1500 to 1600, taramira 1400 to 1500, toria
1300 to 1400, rice basmati 2800 to 5000, parmal 825 to
1100, sella 825 to 1050, maida (per bag 90 kg) 735, suji
735, atta 690, urd (per quintal) 1850 to 2300, urd dal
1850 to 2300, moong 1900 to 2400, moongdal 1900 to 2450,
moong dhuli 2400 to 2700, masoor 1750 to 1850,
malkamasoor 1800 to 2100, kabli channa 220 to 3000, kala
channa 1250 to 1450, dal channa 13540 to 1400, arhar 2200
to 3200, rajmashchitra 2500 to3200. Sugar M-grade 1480 to
1500, S-grade 1460 to 1480, khandsari 1350 to 1500,
gurkhurpa 900 to 950, gurperi 950 to 1000, khandsari 950
to 1000. Oils: sarson (per quintal) 4500, soyabean (per
tin 15 litres) 590 to 600, surajmukhi 650, groundnut 750,
cotton seed 600. |
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