Tuesday, January 12, 1999
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B U S I N E S S | Tuesday, January 12, 1999 |
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Treat agriculture, industry on par NEW DELHI, Jan 11 — Top agriculture experts today demanded that the sector be treated on a par with trade and industry to enable the liberalisation process percolate down to benefit the vast population in the rural areas. ‘Invest
more in infrastructure’
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HDFC
net rises |
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NEW DELHI, Jan 11 (PTI) — FICCI will take up the issue of channelisation of pension and provident funds as start up capital by Indian venture capital funds. “The issue will be taken up with the government at the time of drafting the final report on venture capital firms,” Chairman and Managing Director of Ranbaxy Laboratories Parvinder Singh said. Drastic changes needed to be made in the rules governing venture capital, Dr Singh said during a round table conference on knowledge based industries organised by FICCI here today. “Changes such as rationalisation of the regulatory framework and encouraging investment by pension funds and insurance companies, need to be made,” he said. A reverse brain-drain is
taking place in respect of knowledge-based industries,
with many qualified Indian professionals, working
elsewhere returning home to work here, according to
FICCI. |
Common agenda for parties soon MUMBAI, Jan 11 (PTI) — FICCI is working towards a common minimum economic agenda with the consensus of political parties, its President Sudhir Jalan said here today. “I have spoken to various party chiefs with the intention of bringing about a common consensus on economic reforms among all political parties”, he said during the FICCI round table on the report of the task force on reforms in the financial sector and capital markets. The blueprint for the minimum economic agenda will be finalised by month-end. Mukesh Ambani,
Vice-Chairman of Reliance Industries and Chairman of the
Prime Minister’s advisory council on trade and
industry, said the government must “get out of the
vicious cycle in its finances”. He reiterated the
need to restructure finances, banking and financial
sector, revitalise the real sector, revive the capital
markets and focus on specific sectors such as information
technology, pharmaceuticals and services. |
Simplify norms: PM’s task force NEW DELHI, Jan 11 (PTI) — The norms for acquisition of knowledge-based industries abroad need to be simplified, the Prime Minister’s task force on knowledge based industries has recommended. Simple norms for knowledge-based companies (KBCs) in sectors like software and information technology (IT), pharmaceutical, financial services and engineering services, will enable them to have a free hand in determining the ownership pattern of their subsidiaries abroad. Set up by the Prime Minister’s council on trade and industry, the task force presented its recommendations to industrialists at the FICCI office here today. “India has an abundance of human intellect and this needs to be utilised for the growth of KBCs”, Managing Director of Ranbaxy Laboratories Ltd and member of the task force, Dr Parvinder Singh said, while presenting the recommendations. Currently the existing norms for acquisitions of companies abroad require prior approvals from the RBI. “Often this hinders the ability of the parent company to quickly capitalise on an opportunity where the available time could be limited,” the report said. As the KBCs are globalising their operations, a strong legal frame work to protect intellectual property rights (IPRs) was essential, it said. “Under the WTO, India has made certain commitments on patent laws to be in sync with global standards on the issue. It is essential to study the same gamut of IPR laws in India, so that KBCs can have a strong legal framework to protect their IPRs”, the report said. There has to be an increased interaction between industry and academicia in both domestic and international arena for the knowledge- based industry to take off. The KBC’s should be
allowed to freely pick stock options issued to employees,
the report said adding the incidence of tax on stock
options should arise only upon the sale of stock and not
on exercise of stock options. |
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TAIPEI, Jan 11 (AP) — The public listing of Quanta Computer Inc. last week has created an instant billionaire in Taiwan. Hong Kong-born Lin Pai-Li, who founded Quanta in Taiwan 10 years ago, now holds 24 per cent of the company’s shares with an estimated value of 40 billion Taiwan dollars ($ 1.24 billion). As Taiwan’s largest
notebook computer maker, Quanta went public on Friday and
its stock immediately became the highest priced on the
Taiwan stock exchange. It was traded at 401 Taiwan
dollars per share. Traders expect the shares to rise
further this week. The United Daily News yesterday
described Mr Lin an more like a knight than a
businessman. A friend lent him 30 million Taiwan dollars
(nearly our million US dollars) when Quanta faced
financial difficulties a few years ago. And Mr Lin gave
the friend shares worth three times that much as a
birthday gift last year. |
Treat
agriculture, industry on par NEW DELHI, Jan 11 (PTI) — Top agriculture experts today demanded that the sector be treated on a par with trade and industry to enable the liberalisation process percolate down to benefit the vast population in the rural areas. In a three-hour long pre-Budget discussion with Finance Minister Yashwant Sinha here, the experts suggested that free export of cotton be allowed to alleviate the farmers from the hardships they faced due to a fall in the cotton prices, and in some cases leading to suicides. While cotton imports have been put under the open general license (OGL), export restrictions continued, which they said were not compatible with the reform process. There was a general consensus among the agriculturists that the cost of domestic urea production be pegged at Rs 8,000 per tonne. This would help in releasing Rs 1,800 crore which go by way of fertiliser subsidy in protecting the inefficient production of domestic companies. This amount could be diverted for better watershed management,” leading Andhra agriculturist Y. Shivaji told PTI. Shivaji said fertiliser units were fudging figures to claim higher subsidy by showing on records that the capacity utilisation was as high as 140 per cent. This, he said, was not possible as no unit could produce beyond 110 per cent capacity and hence a ceiling should be fixed. Several participants demanded setting up of a cold storage chain in the country as post-harvest wastage ranged from 10 per cent in foodgrains to upto 40 per cent in fruits and vegetables. The wastage in foodgrains was 19 million tonnes annually which was three million tonnes more than the entire foodgrains production of Australia from where India was importing wheat, S. Vijayaraghwan, a leading agronomist, who was formerly with the FCI said. Other suggestions included
setting up a single administrative agency for all rural
investment schemes to avoid delays in implementation,
enhanced budgetary support for watershed management,
extension of insurance to all crops and to both loanee
and non-loanee farmers and reduction in insurance premium
on tractors |
‘Invest more in infrastructure’ PHDCCI: The 1999-2000 Budget should increase Plan expenditure in power, roads and ports while controlling revenue expenditure. Despite the possibility of a higher fiscal deficit, the government should raise its investment in infrastructure sector. The immediate need is to reverse the slow growth trend of the economy. Savings friendly fiscal policies should be adopted to achieve a savings rate of 30 per cent of the gross domestic product. In direct taxes, tax administration should be streamlined. Besides focusing on reduction of tax rates, adjustment of tariff and excise duties and corrections in the inverted duty structure are needed to encourage value addition. FICCI: The government should include cold and steel in the infrastructure sector and encourage these through fiscal incentives. It would also be desirable to recognise the container freight station/inland container depot as infrastructure facility. Infrastructure projects falling under build, operate and transfer (BOT) alone are eligible for tax-holding benefit. Infrastructure projects falling under build, own and operate (BOO) should also be given the tax holiday benefit. Tax holiday should be given to new industrial undertakings. The discontinuation of the TAD holiday benefit has resulted in slowing down the pace of industrialisation. The scope of Section 80 HHC be widened to cover profits from exports of feature film, video film, TV software, music software etc by the film industry. It has been the usual trade practice to export the film software on what is popularly known as the lease basis, hire basis or royalty basis for a limited period and for limited territories. This is done to protect
the copyright of the film software as also to generate
more foreign exchange earnings. The export of such film
software outside India is regulated under the Indian
Copyright Act. — TNS |
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NEW DELHI, Jan 11 (PTI) — Coverage of the Dilliwala’s basic problems, “live” matrimonials and a telebazar are the niche programmes with which a new cable network launched in the Capital today wants to compete with market leaders — Siti Cable and Incable Network. The Laser Entertainment Channel (LEC), a joint venture of Radiant Sports & entertainment End Magna Mision, Vision, Will aim at cater to televiewers in areas not covered by the two leading networks with the help of local cable operators. “LEC will also have a
matrimonial programme, where prospective brides and
grooms can advertise through video clippings, and a bazar
where local traders, who cannot afford the costly slots
on Doordarshan and other channels, can advertise their
wares,” said a cable network official. |
Still struggling with a massive foreign exchange crunch, Pakistan has drastically cut down on import of vehicles which, from Japan alone, had cost the country a whopping $ 1.4 billion over the past four years. Pakistan has spent a gigantic sum of Rs 60 billion rupees ($ 1.48 billion) on the import of vehicles and their spare parts from Japan in the past four year. To cut down imports of unwanted items, the State Bank of Pakistan earlier reduced the provision of foreign exchange to importers to 50 per cent. Durin the last couple of weeks, the forex provision has been curtailed to 20 per cent and the importers have been directed to obtain 80 per cent foreign exchange from banks. In addition, the government has enforced the condition of 30 per cent cash margin for imports that importers have to deposit with the relevant banks before opening letter of credit for imports. A government official said these two conditions have helped bring down imports of many unnecessary items, including motor vehicles. The foreign exchange reserves position of Pakistan has also stabilised to nearly $ 1 billion during the last week as the State Bank was giving only a small amount of forex for imports. — ANS US wheat The USA has donated 100,000 metric tonnes of wheat to Pakistan which will be distributed as direct relief by the Nawaz Sharif government to persons in great need, including those most afflicted by natural disasters such as floods, rains and earthquakes. According to sources here, the wheat supply will provide food assistance to nearly 800,000 persons. The donation is in partial fulfilment of a US Government pledge to provide additional goods and benefits, including 400,000 tonnes of wheat to Pakistan during that country’s current fiscal year. — ANI IMF aid The IMF is likely to release, $ 525 million as the first tranche of the second year of the economic support package for Pakistan only after the fund’s Executive Board approves the proposal. The IMF is expected to approve the amount in Special Drawing Gights (SDRs) which consist of a composite rate of five major hard currencies. The dollar amount depends on the SDR market rate for the day the amount is released. The IMF management is considering the release of almost double the amount in the first tranch to help Pakistan alleviate its precarious balance of payments situation. However, Pakistan’s case has not been put on the IMF Board’s agenda for either January 14 or January 15. — ANI Irregularities The Auditor-General’s office has detected Rs 849.395 million financial irregularities in the Water and Power Development Authority’s 1996-97 account due to management’s failure to exercise “financial control in discharging its obligations”. The report was made known
to the National Assembly last week. Earlier, the report
had been submitted to the President who wanted it to be
laid before the National Assembly as required under
Article 171 of the Constitution. — ANI |
Hike in FII stake in NIIT cleared NEW DELHI, Jan 11 (PTI) — Shareholders of NIIT Ltd today approved a proposal to hike the foreign institutional investors’ (FIIs) stake in the company from existing 24 per cent to 30 per cent. “A wider foreign institutional participation will give more liquidity in the FII holding of NIIT,” Chief Executive Officer of the company, Vijay K. Thadani told newsmen welcoming the shareholders decision at NIIT’s annual general meeting (AGM) here. He said the company put the proposal to its shareholders after foreign investors expressed interest in picking up more shares once the FII ceiling was raised to 30 per cent. “The decision was taken in order to enable wider participation and higher liquidity besides bringing NIIT’s valuation closer to global norms in the light of globalisation plans,” Managing director of NIIT Rajendra S. Pawar said. Last September, shareholders had rejected NIIT’s move to hike the FII stake to 30 per cent as the share prices were quoting cheap, allowing overseas investors to buy NIIT shares at low prices, Thadani said. With both the Indian and US Stock Markets showing signs of revival, this could be the right time to allow more FII participation in the company, he said. While FIIs hold 24 per
cent in NIIT, the management team comprising Pawar,
Thadani and company chairman Shiv Naar hold 55 per cent
and the remaining shares are held by retail investors
including NIIT employees. |
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MUMBAI, Jan 11 (PTI) — The Housing Development Finance Corporation Ltd (HDFC) has reported an increase in net profit to Rs 225.12 crore for the nine months ended December 31, 1998, against Rs 197.99 crore in the corresponding period last year. HDFC’s disbursements during the nine month period amounted to Rs 2,274 crore, up by 33 per cent from Rs 1,711 crore in the same period of previous year. Net profit for the quarter ended December 31, 1998 amounted to Rs 77.36 crore, HDFC said in a release after its board of directors took on record the financial results for April-December 1998 here today. Income from operations in the third quarter of 1998-99 was up by Rs 444.44 crore taking its growth during the nine month period to Rs 1,282.95 crore from Rs 1,043.29 crore in the same period last year. Approvals of HDFC during the nine months aggregated Rs 2,844 crore against Rs 2,282 crore during the corresponding period in the previous year, representing an increase of 25 per cent. HDFC’s interest
expense was up from Rs 247.90 crore in the third quarter
of 1997-98 to Rs 326.57 crore in the same period this
year. For the nine months ended December 31, 1998,
interest expenses were higher at Rs 930.50 crore compared
to Rs 722.55 crore in the same period last year. |
RPG pact with GD Searle MUMBAI, Jan 11 (PTI) — RPG Enterprises has struck an agreement with GD Searle & Company of the USA to allow its Rs 220 crore pharma business to continue under the banner of Searle (India) Ltd till December 31, 1999 and to manufacture and market nine Searle brands for another 50 years. The agreement grants an extension of the technology and trademark agreement whereby Searle India will continue to manufacture and market up to may 31, 2048 nine drugs, including eight money spinning brands. RPG had bought out Searle India in 1993, when the us multinational left the country as it did not think it worthwhile doing business in India in the absence of an appropriate patents regime. Kilburn bags Grindlays order NEW DELHI, Jan 11 (PTI) — Kilburn Reprographics, part of the Williamson Magor group, has bagged the first Indian order for setting up an automated “production mail” system. The automated production mail system is a process whereby all bills, statements and communication of a company or bank are fed into a system, processed, folded, sorted out, put in envelopes and despatched to clients. The system, manufactured by US-based Pitney Bowes, would be set up for ANZ Grindlays Bank here, Kilburn Reprograpics Chairman and Managing Director S.K. Jalan said at a press conference here. Williamson to revamp India Foils NEW DELHI, Jan 11 (PTI) — Calcutta-based Williamson Magor’s plans to restructure and revive cash-strapped India Foils, in which it has a majority stake, and make it break even in the next fiscal, Williamson Magor’s Managing Director Deepak Khaitan said here today. “Our major focus is to revive India Foils. We have submitted a restructuring plan to the financial institutions and expect the company to break even by the end of next fiscal,” Khaitan told reporters here. The Willamson Magor group holds a 70 per cent stake in India Foils. India Foils acquired a new mill in 1996 for a total consideration of Rs 130 crore and the commercial production at the unit which was upgraded to produce specialised six micron aluminium foils used mainly in tetrapacks began in March 1997. Siemens gets 235 cr DoT order NEW DELHI, Jan 11 (PTI)
— The Department of Telecom has placed two orders
worth Rs 235 crore for local line switches and digital
electronic automatic exchange switches to the German
Telecom company Siemens Public Communications Networks.
The orders were placed last week since Siemens quoted the
lowest bid in the two global tenders floated by the
department, a DoT official said here today. The company
will supply 1.69 million local line switches as per the
Rs 160 crore order, while another 2.95 lakh lines of
digital trunk automatic exchanges (D-Tax) lines would be
supplied under a Rs 75 crore order. The two orders are
part of network modernisation of the department and has
been delayed for almost one and a half years since the
tenders were opened in August 1997. A Siemens spokesman
said with the execution of the local line orders, the
total installed base of Siemens local lines would cross
two million mark. |
STOCKS MUMBAI, Jan 11 (PTI) — Equities fluctuated widely and posted a record turnover on the opening day of the new account on the stock market here today in the wake of brisk purchases from foreign institutional investors (FIIs) and domestic funds alternated heavy selling by domestic institutions. The BSE sensitive index that breached 3500 — psychological mark twice during the trading, moved in a range of 3515.49 and 3418.24 before closing at 3433.21 as against last Friday’s close of 3387.84, netting a gain of 45.37 points. The BSE-100 index rose by 24.23 points to 1533.54 from previous close of 1509.31. Dealers said UTI and General Insurance Corp (GIC) were seen heavily selling stocks of key scrips like ITC, Satyam Computer, Reliance Ind, Telco, SBI, MTNL and Hind Lever while FIIs absorbing these sales and even making purchases in Glaxo, Cochin Refinery and Dr Reddy’s Lab. The real pressure came during the last 30 minutes when UTI and GIC made big sale orders, they added. Domestic funds and banks were reportedly net buyers in SBI, RIL, MTNL and United Phosp. Operators took advantage of the situation to book profits at higher levels as they were long in several scrips ahead of the end of account tomorrow on the national stock exchange. The volume of business had risen substantially due to FIIs sustained net purchases attracting other operators including locals institutions into the fray. The turnover surpassed the last Friday’s high of Rs 2048.81 crore and posted a new record of Rs 2374.95 crore on the BSE. Zee Telefilms, Hind Motor, Britannia, IPCL, Sterlite and GSFC hit the circuit breaker after exhausting the daily limit. Garware Polyester, Nag Fert, Garware Wall and SAIL were the biggest gainers of the day. The BSE-200 and the Dollex were quated sharply up at 352.73 and 138.11 compared with last weekend close of 346.78 and 135.78 respectively. ITC was the most active scrip with a turnover of Rs 396.70 crore followed by RIL (Rs 200.58 crore), Pentafour Software (Rs 188.96 crore), Satyam Computer (Rs 170.39 crore) and SBI (Rs 149.47 crore). ITC firmed up by 11 to
844. RIL shot up by 7.30 to 147.60, SBI by 5 to 188.50,
Telco by 16.30 to 223, and Tisco by 3.30 to 133.10.
Satyam Computer dipped by 2.50 to 811.75 and Pentafour
Software by 15.25 to 764.75. |
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| Forex rates MUMBAI, Jan 11 (PTI) — The following were interbank forex and RBI rates (in rupees per unit): US $ Rs 42.50/51 The RBI reference rate was Rs 42.52. Gold falls Indica Allahabad Bank |
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