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| Friday, January 7, 2000, Chandigarh, India  
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RBI plan may hit credit
flow to States Govt permits 74 pc FDI in bulk
drugs
Hero Honda is on India’s top
10 list Costliest
bike by October Coops usher in ‘white
revolution’
RBI plan may hit credit flow to States MUMBAI, Jan 6 (UNI) — There has been a significant downturn in finances of most State Governments over the past two years on account of inadequate recovery of cost for services provided by the State, under-exploitation of tax potential and a continuous rise in expenditure. The revision in pay scales of State employees along with a rapid rise in contingent liabilities in recent years had added to the fiscal strain of States. Pay and pension hike in States led to a recurring annual impact of 6 to 15 per cent of State Governments’ revenue receipts, said a report prepared by CRISIL. Indicating a further downward revision in ratings of majority States, CRISIL said that the implementation of the Reserve Bank’s proposal to revise risk weights and provisioning requirements for State Government guaranteed debt with effect from April 1, 2000, expected to reduce the credit flow to States and State-owned entities. It foresees a systemic deterioration in the credit profile of the States that may lead to revision in their ratings in the absence of comprehensive fiscal and structural reforms. In recent years, the contingent liabilities of State Governments have grown at a high rate of 12 per cent per annum, reaching a level of nearly Rs 80,000 crore in September 1998. The rapid rise in contingent liabilities has largely been on account of increased requirements for internal and extra budgetary resources to fund plan expenditure and large funding requirements of infrastructure projects. The PSU borrowings have also substantially added to States’ contingent liabilities as State Governments support most of these programmes through guarantees, letters of comfort or tripartite agreements. In this context, it is important to note that RBI has already issued policy directives, proposed to come into effect from April 1, 2000, for financial institutions and banks to start assigning risk weights to State Government guaranteed debt and make provisions for State Government guaranteed debt in default. Implementation of this policy is expected to reduce the attractiveness of State Government guaranteed debt to banks and financial institutions. As a result, it can be expected that credit flow to State Governments and State-owned entities would be severely curtailed in the absence of fiscal and structural reforms. CRISIL felt that the inability of State Governments to evolve alternate means of debt funding may lead to acute liquidity problems and may even trigger defaults by some of the State Governments and State-owned entities. In the long term, CRISIL expects sustenance of finances of only those State Governments, which exercise high level of fiscal prudence and achieve economic development through attracting investments in industry and infrastructure with a progressive economic policy. Any populist measure
like free power for agriculture, on the other hand, will
accelerate the process of fiscal decline and may lead to
deterioration in the credit profile of the State
Governments. |
Govt permits 74 pc FDI in bulk drugs NEW DELHI, Jan 6 (PTI) — The Government today approved modification in the Drug Policy 1986 paving the way for foreign direct investment (FDI) up to 74 per cent in bulk drugs, their intermediates and formulations from the current level of 51 per cent. The decision to modify the Drug Policy, 1986, to facilitate greater foreign participation in the area of bulk drug was taken at a meeting of the Cabinet Committee on Economic Affairs (CCEA) here, an official spokesperson said. Investment above 74 per cent would be considered on case by case basis in areas where investment is otherwise not forthcoming, particularly in the manufacture of bulk drugs produced by the use of recombitant DNA technology as well as the specific cell/tissue targeted formulations, she said. The move to raise the FDI limit in the area of bulk drug development will attract foreign players to invest more in drugs and pharmaceutical industry, the spokesperson said. Until now, FDI above 51 per cent in bulk drug, their intermediates and formulations were considered on a case by case basis. The CCEA nod for raising
FDI limit to 74 per cent is in tune with Finance Minister
Yashwant Sinha’s Budget promise that foreign
companies would be allowed to hold equity up to 74 per
cent in the area of bulk drug manufacturing, its
intermediates and formulations. |
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NEW DELHI, Jan 6 (PTI) — Reliance Petroleum today bagged half of the 25 oil exploration blocks awarded by the Government under the new exploration and licensing policy (NELP).The Cabinet Committee on Economic Affairs (CCEA) also partially modified the state surcharge scheme of the Petroleum Ministry to make it equitable and pave the way for movement of controlled petroleum products from the six stand-alone refineries. Hughes Software: Hughes Software Systems (HSS) has mandated Pricewaterhouse Coopers Limited and Kotak Mahindra to identify and explore possibilities for acquiring information technology companies. The two firms will scout
companies with complementary skills to HSS in
communications software and having intellectual property
rights to enable the subsidiary of Hughes Network Systems
to kickstart its internet and e-commerce offerings. With
the same view, HSS had opened a centre at Bangalore in
October 1999 exclusively focussing on Internet and
e-commerce technologies in addition to its software
campus at Gurgaon. |
Maruti 800 dearer, Esteem is cheaper NEW DELHI, Jan 6 (UNI) — Maruti Udyog Limited today announced a Rs 21,045 to Rs 35,250 increase in the prices of its Maruti 800 car effective tomorrow following the introduction of new tax slabs at 12 per cent and a new multi-point fuel injection (MPFI) engine. However, the prices of Esteem LX and VX versions were dropped by Rs 1139 and Rs 18,870 respectively despite introduction of 12 per cent sales tax, MUL Managing Director Jagdish Khattar told newspersons here today. The standard Maruti 800, will now carry a price tag of Rs 208,620 for the Euro-0 emission compliant engine and Rs 216,847 for the Euro-I compliant engine version. The standard model will not sport a Euro-II compliant MPFI engine for the time being. The Maruti 800 EX and DX versions, will now be available only with the MPFI engines carrying a price tag of Rs 247,540 and Rs 271,369 respectively. This translates into a Rs 35,250 and Rs 33,587 hike from this existing prices. The new cars will also sport a five speed gearbox. The car will be available for customers across the country, except Delhi, from tomorrow. ‘‘The prices have been calculated on a 12 per cent sales tax regime and the prices for the Delhi market are yet to be calculated as the Government has not taken a decision on whether to hike sales tax or not. We would not be selling in Delhi till January 10, the day the Government is expected to make an announcement,’’ Mr Khattar said. The new Esteem LX with
MPFI will cost Rs 499,271 while the existing Esteem LX
will carry a price tag of Rs 465,666. The Esteem VX with
MPFI will be priced at Rs 546,818 over the existing price
of Rs 513,212. The new Esteem LX will have additional
features as front power windows, central locking and
chrome grill. |
Hero Honda
is on India’s top 10 list CHANDIGARH, Jan 6 — At least two northern companies — Ranbaxy Laboratories and Hero Honda Motors — are among the top 10 Indian corporate leaders which figure in Far Eastern Economic Review’s annual survey of Asia’s leading companies. The top spot goes to Reliance Industries followed by Infosys Technologies, L & T, Wipro, ITC, MRF, NIIT and Bajaj Auto. Hindustan Lever was not included in the survey “as it’s more than 50 per cent owned by a multinational”, says the Hong Kong-based magazine in its seventh annual survey of Asia’s top 200 companies. The ranking of the companies is based on the following five factors: (a) high quality services/products, (b) innovative in responding to customer needs (c) long-term vision (d) financial soundness; and (e) companies that others try to emulate. Referring to Infosys, Wipro and Ranbaxy, the magazine writes: “What they all share is a competitive advantage based on the quality of their intellectual capital.” Meanwhile, Mr D.S. Brar,
Managing Director of Ranbaxy Laboratories Limited, today
announced the appointment of Dr Brian W. Tempest as
President, Pharmaceuticals Worlwide. |
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NEW DELHI, Jan 6 (UNI) — Royal Enfield Motors a subsidiary of the Eicher group, is planning to introduce India’s costliest bike, priced at Rs 95,000, by October 2000. Its Managing Director P.K. Purang, told UNI here today that the 624cc bike is being developed with technical assistance from Fritz Egli of Switzerland. Commercial production of the bikes for the Indian market will commence in the last quarter of the 2000 calendar year. However, the vehicle will be introduced in the international market by August this year, Mr Purang said. The bike will have disc
brakes and self start as standard features for the Indian
market while the export model will have a different
styling. |
Coops
usher in ‘white revolution’ MANDI: Not many people know that the Chakkar Dairy Plant, set up on September 21, 1972, in this district under the Indo-German project, was the first modern plant of its type in the country which started supplying milk to the consumers in polythene bags. The entire machinery of the plant had been gifted to Mandi project by the then West German Government. The processing capacity of the plant was 1000 litres a day in the beginning, which has now been doubled. The concept of "mixed farming" sold to Mandi farmers has revolutionised the economy of farmers. Under this intensive agriculture development programme, farmers were advised to adopt mixed farming which included better crop production, fruit and vegetable development, dairying and cattle improvement, sheep breeding, raising pigs and poultry and development of livestock feed and fodder. Knowhow and guidance was provided by German experts. The modern techniques of farming and milk production introduced at that time have yielded good results. Almost every farmer's household now owns at least one Jersey cow and farmers have adopted modern practices using hybrid seeds. Milk production has multiplied manifold and is proving a boon to farmers. Consequently the Himachal Pradesh Government formed a cooperative milk producers federation in 1983 on the lines of the Gujarat Milk Marketing Federation at Anand. Various milk supply schemes under the Animal Husbandry Department have been handed over to the federation. The Chakkar Dairy Plant now caters to the needs of milk consumers of Mandi, Kulu and Bilaspur districts. It supplies milk and various milk products like butter, ghee, cream, cheese etc. It has also started making processed cheese. As many as 10,015 milk farmers have constituted 113 milk producers' cooperative societies in the district for the collection of milk through a network of seven chilling plants. From the chilling plants the milk is transported to the milk plant at Chakkar. The mass involvement of women in these milk producers' cooperative societies is said to be the secret of the "white revolution" in the district. The women are involved in milk trade and as many as 20 societies are managed and fully controlled by women. The Chakkar plant has greatly benefited poor and marginal farmers of the remote areas of the district like Karsog and Chachiot valleys, where there was no marketing facility earlier. Now the milk is being lifted by vans of the plant from their door-step at prices ranging between Rs 7 and Rs 13.75 per kg (depending on the fat content). Another chilling plant is being set up near Karsog. The farmers of the district earn over Rs 1.5 crore from milk sold to the plant. This additional income has raised the economic and social status of the farmers. The HP Cooperative Milk Producers Federation also imparts training to farmers with the help of the state government and National Dairy Development Board on modern techniques of enhancing milk production. A Rs 25-lakh building is being constructed near the Chakkar plant for training farmers in improved practices of milk production. The plantation of hybrid grass containing more nutrition and faster growth is also being encouraged. Farmers are also being advised to grow trees on vacant and barren land to ensure green fodder round the year. The Forest and Agriculture Departments extend requisite assistance to the farmers. Kits of green grass seed are also supplied to farmers from time to time. Groups of farmers milk
producers are sent on educational tours to Gujarat where
the Kaira Milk Marketing Federation, Anand, has
transformed the life of the people and the federation has
become a model of success not only in the country, but in
Asia, as well. |
by Ashok Kumar For bulls: Archies & DSQ Software WITH the new millennium beginning off with a big bang at the Indian bourses, and indices rising at a break-neck speeds, one cannot help feeling that there’s more to it than meets the eye. Of course, the undercurrent seems very strong and it is now, more than ever that retail investors need to make sure that they are careful and well-advised as an unthoughtful plunge at this stage could spell doom. Again, it must be reiterated that more often than not, euphoric conditions are a pre-cursor to a sharp fall and so that must be borne in mind, while taking the plunge at these heady levels. Yet, having said that, there is money to be made at the bourses, as always, and traders can revel in these high volume trading conditions. Punters with a bullish temperament could consider taking up a position at the counters of DSQ Software at Rs 976 (square up at Rs 1051) and Archies Greetings at Rs 612 (square up at Rs 657). Short sellers could consider taking up positions at the counters of Peerless Shipping at Rs 329 (cover up at Rs 294) and MTNL at Rs 241 (cover up at Rs 206). The dark horse bet of this week is VIP Industries at Rs 31 while E.Merck appears to be a fairly promising long-term portfolio choice at the current price level. Mind you, keep booking
partial profits and do not let the euphoric conditions
cloud your clarity of thought. |
Bullion Forex IFCI Gillette Dunlop Spice Telecom |
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