Tuesday, March 2, 1999
today's calendar
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B U S I N E S S | Tuesday, March 2, 1999 |
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spotlight today's calendar |
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RBI raises ‘ways and
means advance’ limits |
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Punjab to oppose shifting
of small savings from Budget |
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Budget direction positive:
ICICI Sec Private
cell operators move Delhi High Court Trade
deficit goes up WTO
pact takes effect Wisconsin
offers trade ventures Shaw
Wallace net shoots up VSNL
plans to pick up equity in Zee project |
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RBI raises ‘ways and means advance’ limits MUMBAI, March 1 (PTI) — The RBI has increased the normal “ways and means advance” (WMA) limits of State Governments by 65 per cent from Rs 2,234.40 crore to Rs 3,685 crore. The increase is part of revision in the scheme of WMA, with effect from today on the basis of the BPR Vithal informal advisory committee’s recommendations. The base for the revised WMA limits will be three years average of revenue receipts plus capital expenditure and the review for future revision will be made after three years and the criterion of average of three years actuals will be used. The RBI has removed the upper limits for special WMA as a multiple of minimum balance and instead, will provide States special WMA against their actual holdings of dated Government of India securities, according to a release. The RBI provides WMA to States banking with it to help them tide over temporary mismatches in the cash flow of their receipts and payments and any amount drawn in excess of WMA is an overdraft. In case an overdraft appears and remains beyond 10 consecutive working days, the RBI and its agencies stop payments on behalf of the State concerned. While retaining the 10-day norm for overdraft, the RBI has restricted it to 100 per cent of normal WMA limits. The RBI said if overdraft exceeds 100 per cent of the WMA limit in a financial year, on the first occasion State Governments would be advised and on the second or any subsequent occasion, the State would be given only three working days’ notice to bring down the overdraft within the 100 per cent limit. “If this is not adhered to, payments will be stopped”, the central bank said. The minimum balance would be revised upward linking it to the same base as for WMA from the date the central bank would receive the concurrence from the State Governments. The committee has
recommended minimum balance of Rs 37.97 crore for
non-special category States (against Rs 12.10 crore at
present) and Rs 3.08 crore for special category States
(against 1.20 crore at present). |
Punjab to
oppose shifting of small savings from Budget NEW DELHI, March 1 — The Punjab Government has decided to oppose the Union Budget proposal to shift small savings from the Central account as this would increase the fiscal deficit of States. The Punjab Finance Minister, Capt Kanwaljit Singh, told The Tribune here today the small savings were guaranteed by the Central Government and 25 per cent of the amount accrued to the Centre as against the 75 per cent to the States. According to a Union Budget proposal, the entire small savings would be transferred to a National Saving Fund and money drawn from this account would be treated as borrowings by the State. The Finance Ministry’s contention is that that the Centre has no control over the postal savings and that three-fourths of this went to the States as long-term loans. So essentially they were borrowings by the States. According to the Union Finance Secretary, Dr Vijay Kelkar, the move to take small savings out of the Centre’s account was done on the recommendations of various expert committees set up to examine the issue. The Centre hopes that by shifting the small savings, estimated at Rs 25,000 crore for 1999-2000, from the Union Budget to a National Saving Fund it would be able to reduce its own fiscal deficit. Capt Singh said the Centre by shifting small savings from the Union Budget had put the entire burden on the States and this was not acceptable. He pointed out that as it is the States were reeling under the impact of the Fifth Pay Commission recommendations and the Centre had yet to come out with some relief. By treating small savings as loans to States, the financial balance-sheet of the State Government would become worse. He said the Punjab Government would also oppose the Union Budget proposal to hike price of diesel by one rupee. The increase in the price of diesel would have a far-reaching impact on the health of Punjab’s economy. Capt Singh said the Punjab
Government would take up the issue with the Finance
Ministry and demand that the two proposals be dropped. |
Budget direction positive: ICICI Sec MUMBAI, March 1 (PTI) — A significantly lower targeted fiscal deficit for 1999-2000 against pessimistic pre-Budget expectations has been achieved with a “near sleight of hand”, according to ICICI Securities and Finance Company Ltd. Expectations of fiscal deficit for 1999-2000 were around Rs 1,10,000 crore, whereas the target is significantly lower at Rs 79,955 crore. I-Sec, in its comments on the Union Budget, said small savings collections passed on to the States have been excluded from both borrowings and expenditure side. If this amount is added back in line with the accounting policy used previously, the fiscal deficit will be Rs 1,04,955 crore. The additional risks to this figure emanate from the aggressive estimates of 21 per cent growth in tax revenues and Rs 10,000 crore to be raised through PSU disinvestment. The net borrowing programme has been budgeted at Rs 57,462 crore which implies gross borrowing programme of about Rs 84,000 crore. During fiscal 1998-99, the borrowing programme was supported by Resurgent India Bond (RIB) inflows as well as the RBI support to the tune of Rs 20,000 crore. Given the fact that the budgeted numbers are similar to those in 1998-99, the absence of RIB-like flows would result in tightness in bond markets during the course of the year, I-Sec said, adding that fiscal slippage or improved credit offtake “would exacerbate the situation”. I-Sec said the Finance Minister presented the Budget this year under fairly difficult circumstances. The economy has been on a path of slow growth for the past three years, with some critical sectors witnessing recessionary conditions. Government finances are in none too healthy a state with debt servicing exceeding non-debt receipts, technically an internal debt trap, I-Sec observed. Overall, the direction of the Budget is positive with emphasis on reducing government deficit and continuing economic reforms, it stated. For the fixed income markets, the lower than expected borrowing programme is positive, but the projections appear optimistic, I-Sec said. The Budget has focussed on some long-term structural changes and tried to usher in a smaller government. Defence expenditure
continues to strain government finances. At Rs 45,694
crore, it is 11 per cent higher than the provision for
the current year, I-Sec said, adding that the subsidies
bill has been reduced to Rs 23,837 crore, 3.4 per cent
below last year’s figures.
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Private cell operators move Delhi High Court NEW DELHI, March 1 (PTI) — Private cellular and basic telephone operators-Birla AT & T, Essar Commvision and Tata Teleservices today moved the Delhi High Court (HC) seeking injunction against the Department of Telecom (DoT) from encashing their bank guarantee following their failure to pay 20 per cent of licence fee by February 28. Justice M.K. Sharma posted all three petitions, filed under Section 9 of the Arbitration and Conciliation Act, 1996, for further hearing on Wednesday to enable DoT counsel Rakesh Tiku to obtain instructions from the government. Earlier, Communications Minister Jagmohan had directed all private telecom operators to pay 20 per cent of their licence fee by February 15 but last date was extended to February 28 following Prime Minister Office’s intervention. A number of companies paid the due amount, but majority of them failed to meet even the extended deadline. The three companies also sought interim order from court restraining DoT from taking any other action against the petitioners till the matter was adjudicated by an arbitrator as per the provisions of the agreement between licensee and licensor. The three petitioners
decided to write letters to Jagmohan informing him that
DoT should not take any action till Wednesday, company
sources said and added that the need for this arose
because the court did not pass any interim order today. |
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NEW DELHI, March 1 (PTI) — India’s export revival continued for the third month in succession in January as shipments from the country posted its highest growth of 8.5 per cent for the current financial year even as trade deficit widened to $ 7.79 billion. As per the trade data released for April 1998-January 1999 by the Commerce Ministry today, exports in January increased to $ 2.85 billion against $ 2.63 billion in January 1998. However, cumulative exports for the April-January period continued to be negative at 1.98 per cent. Exports during April-January of the current fiscal was estimated at $ 27.16 billion against $ 27.7 billion during the same period of the previous fiscal. India’s exports, which have been registering negative growth since the beginning of the fiscal, witnessed a turnaround in November, when it increased by 3.35 per cent and the momentum continued in December when it rose by 6.73 per cent. Commerce Minister Ramakrishna Hegde recently said the decline in exports had been arrested and India was likely to register a 4-5 per cent export growth in the current fiscal. Imports, on the other hand, slid in January by 5 per cent to $ 3.36 billion against $ 3.53 billion in January 1998. During December, imports had declined by 3.5 per cent basically on lower oil imports. Imports for the
April-January period of the fiscal was up by 5.01 per
cent to $ 34.95 billion against $ 33.25 billion during
the same period of the previous fiscal. |
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GENEVA, March 1 (AFP) — An agreement marking a turning point in liberalisation of trade in financial services takes effect today more than a year after 71 countries agreed to the deal at the World Trade Organisation (WTO). The pact widens market access in banking, insurance and fund management in countries representing 95 per cent of all global financial activity. Participants promise it will boost investment in emerging economies, including those of hard-hit Asia, bring crucial advances in technology to inefficient firms and give consumers a better deal. WTO Director General
Renato Ruggiero has stressed the accord was not aimed at
liberalising capital flows but at creating opportunities
for businesses to establish holds and expand overseas. |
Wisconsin
offers trade ventures CHANDIGARH, March 1 — Mr Tommy G. Thompson, Wisconsin’s Governor, who is leading a trade delegation to India, told TNS here today that his visit to India in general and Chandigarh in particular was aimed at strengthening the bonds of friendship and cooperation between the people of two countries. Asked about the significance of his trade mission particularly when his country had imposed sanctions on India, Mr Thompson said the sanctions did not stand in the way of his visit. In fact, there was appreciation in US official circle about his mission’s objective. The sanctions related to military goods and not to other goods which his mission could offer to the counterparts in India. He expressed the hope that the sanctions would be relaxed soon as India started taking right steps in this direction. Earlier, during an interaction with the industry from Punjab, Haryana, HP and Chandigarh, Mr Thompson announced that Wisconsin University was planning to set up a satellite campus in collaboration with Panjab University. He would be happy to sign an MOU with the PHD Chamber of Commerce and Industry to exchange delegation, promote joint venture, encourage exports from India and transfer of technology from the USA. The government was keen on business ventures in dairy technology, agro-industries, food processing and information technology. Wisconsin was on top in these particular areas and there could be tremendous boost to trade relations. Mr Ashok Khanna, President, PHDCCI, pointed out that Punjab, Haryana and Chandigarh were very strong in agriculture and horticulture and would like technical collaboration with companies in Wisconsin to have joint ventures. He indicated that North India offered a vast potential in light engineering, textile and mineral-based industries. The chamber had already set up a special desk for the state of Ohio and would be keen to do so for the State of Wisconsin also for intensive promotion of trade and industry. Mr R.I. Singh, Principal
Secretary, Industries, Punjab, assured the delegation all
cooperation in facilitating business deals. |
Government clarifies bulk drugs delicensing NEW DELHI, March 1 (PTI) — The government today clarified that bulk drug using certain processes like use of re-combinant DNA technology would continue to remain under compulsory licensing. Further, bulk drugs requiring in vivo use of nucleic acid as the principles and formulations based on use of specific cell or tissue targeted formulations would need licences, an official release said. Five bulk drugs-Vitamin B1, Vitamin B2, tetracycline, oxytetracycline and folic acid, which were reserved exclusively for public sector units, were delicenced last month. Entrepreneurs wanting to avail the delicencing of the five bulk drugs have to file an industrial entrepreneurs memorandum (IEM) with the Industry Ministry, it said. However, those who have
been issued letter to intent for manufacture of the five
bulk drugs need not file an IEM. |
Auto exports slump 18 per cent NEW DELHI, March 1 (PTI) — Echoing the recessionary trends in domestic sales, Indian auto industry’s exports have also reported an 18 per cent slump in the April 1998 -January 1999 period against the corresponding period last year. The industry, which exported 1,50,127 vehicles during April-January 1997-98, had exported only 1,22,468 vehicles in the nine months period of 1998-99, a difference of 27,659, as per the data of the Association of Indian Automobile Manufacturers (AIAM). In the two-wheeler segment scooters, motor cycles and mopeds were badly hit posting a negative 23 per cent growth during April-January 1998-99 as against a negative only 2 per cent in the corresponding period last year. Of the total 99,867 vehicles exported during the period April 1997-January 1998, the two-wheeler segment could export only 77,138 vehicles in April 1998-January 1999 signifying a fall of 22,729 vehicles. Bajaj Auto, which had exported about 7,352 vehicles during April-January 1997-98, could export only 6,677 vehicles in the nine-month period of 1998-99. LML Ltd and Kinetic Honda Motors Ltd, however, increased their exports during April-January 1998-99 as against the same period last year by posting an export growth of 13.3. per cent and 18 per cent. In the motor cycle segment there was a fall of 37 per cent in the exports with the two-wheeler sector exporting only 26,699 vehicles during April-January 1998-99 as against 36,682 vehicles in the corresponding period last year. While Hero Honda Motors exported only 10,301 vehicles during the same period of 1998-99, as against 16,089 vehicles in April-January 1997-98, exports for Escorts Yamaha registered a marginal fall of 1,287 vehicles during 1998-99 as against 9,576 in April-January last year. Only TVS-Suzuki registered a growth by exporting an additional 1,038 motor cycles during the nine-month period of 1998-99 as against 831 in April-January last year. The export of TELCO
passenger cars was recorded at 1,299 in April-January
1998-99 period against 2,197 during the same period last
year. Mercedes Benz India Ltd had exported only 494 cars
during the same period of 1998-99 compared to 2,263 cars
in April-January 1997-98, the report said. |
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NEW DELHI, March 1 (UNI) — Shaw Wallace and Company said today that its sales grew nearly 22 per cent to Rs 792 crore for the year ended June 30,1998, up from the Rs 651 crore figure in the previous year (1996-97). The net profit spurted to Rs 11.43 crore from Rs 0.34 crore in the previous year. Total income (sales plus other income) for the year stood at Rs 818 crore (Rs 683 crore). The rise in profitability is consequence of the growth in core businesses of the company that is liquor and beer and reduced interest liability on outstanding debt. During the year under review, while the beer sales grew over 50 per cent, the Indian Made Foreign Liquor segment registered a 17 per cent increase. “The turnaround in
financial performance is a fair indicator of the future
growth pattern of Shaw Wallace. Our strategy of
maximising returns on investment through sharp focus on
core areas is paying dividends,” said Mr Ravi Jain,
Managing Director of Shaw Wallace. |
VSNL plans to pick up equity in Zee project NEW DELHI, March 1 (PTI) — US satellite company Lockheed Martin and the Indian overseas telecom carrier Videsh Sanchar Nigam Limited (VSNL) would pick up sizeable equity in the Afro-Asian Satellite Communications (ASC), promoted by Subhash Chandra of Zee Television. “Board of Directors of VSNL has decided to pick up 10 to 20 per cent equity in the ASC project, while Lockheed Martin, which is building the satellite for the project, has also indicated that it will be interested in investment” Dr K. Narayanan, Executive Vice-President of ASC Enterprises, told PTI here. VSNL’s decision to
invest in the ASC projects is in tune with an earlier
decision of the board to pick up upto 20 per cent equity
in all global mobile personal communication services
projects in the country. It had already picked up equity
in Iridium and ICO projects.
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| Forex rates MUMBAI, March 1 (PTI) — Following are Interbank Forex and RBI rates (in rupees per unit): US $ 42.48/49 £ Stg. 68.22/24 Euro 46.68/70 Yen (100) 35.60/62 The RBI reference rate was Rs 42.51. Gold falls IT dues SBI cuts PLR Strike |
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