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| Monday, January 17, 2000, Chandigarh, India  
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Yashwant
Sinha rules out closure of ‘weak’ banks |
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Senior citizens may lose
‘interest’ in savings Taxes, prices & tempers go up Hughes Software net climbs 98 pc 2 Himachal men win Santro, Hero
Honda BIFR turns down Tisco’s
petition
Ban
on cotton imports ISLAMABAD, Jan 16 (PTI) — Pakistan will complain to the World Trade Organisation (WTO) against India for banning cotton import and “damaging” its reputation in the world trade markets, newspapers reported today. Pakistan will also request the WTO secretariat to take punitive action against India for its step to ban cotton import as it has hurt the cotton trade in Pakistan, English Daily Dawn reported today. The decision to approach the WTO was taken here yesterday by the Ministry of Food, Agriculture and Livestock. Dr Zakir Hussain, Cotton Commissioner, told the press “the Indian decision had greatly hurt the Pakistan cotton trade. We will approach WTO to take action against India for this unjust decision.” Another English daily The News said: “The Indian Government politicising the cotton trade with Pakistan had banned the import of cotton from Pakistan on the pretext that cotton seeds of exotic origin, dried leaves and stalks in imported consignment carry strains of destructive bacteria, viral and fungal diseases which are virulent under Indian climatic conditions.” Dr Hussain commenting on the Indian Government’s notification in this regard termed it as “totally baseless”. Pakistan cotton, he said, did not carry any disease and the country has not received any such complaint from importers of any country in the last 50 years. Cotton is exported after pre-inspection at the port or landed quality subject to verification of international inspectors. It was also fumigated and therefore “the question of bacterial, fungal or viral diseases does not arise.” Stating that Pakistani cotton was virus-resistant, the minister claimed that India was experiencing the havoc of Cotton Leaf Curl Virus (CLCV). He said Indian
scientists had visited Pakistan last year under the
auspices of the Cotton Advisory Committee to attend a
workshop on “Resistant Management of Pest and
Disease in cotton.” |
Yashwant Sinha rules out closure of ‘weak’ banks NEW DELHI, Jan 16 (PTI) — Finance Minister Yashwant Sinha has warned of stringent rules to recover bank loans but ruled out closure of weak banks. “I don’t propose to close down (banks). No I don’t. I’m all for social sanctions for realisation of non-performing assets, especially from large defaulters,” he said in an interaction in with PTI journalists. His statement came in the wake of a controversy over the CII task force recommendation for the closure of Indian Bank, UCO Bank and United Bank of India which was criticised by several political parties and bank employees’ unions. This led to the CII withdrawing the report of the task force headed by ICICI Chairman K.V. Kamath. Emphasising that the law needed to be strengthened for the recovery of loans from defaulters, Sinha said it was in this context that the Cabinet has decided to give more teeth to the Debt Recovery Tribunal (DRT) through an ordinance. He, however, declined to indicate when the ordinance will be issued saying it is for the Law Minister to decide. Sinha declined to say if a list of defaulters had been submitted to the Government by the Communist Party of India. “I neither confirm nor deny it. I don’t have the list,” he added. He said almost 6 per cent of the NPAs of banks are under litigation and so far only 10,000 cases involving Rs 4,000 crore out of over Rs 50,000 crore of NPAs has been disposed of. The following are the excerpts of Yashwant Sinha’s interaction with PTI. The Budget is expected to give a new thrust to “people centric and poverty alleviation” policies and will come on February 29 despite assembly elections. It will be a continuing exercise to push up growth to 8 per cent on a sustained basis and not like a flash in the pan. National savings and funds, both internal and foreign direct investment, should together make available 30 to 32 per cent of the resources for developmental activities. It is time to take a
holistic view of related issues like reforms in the
financial sector, taxation, capital market and create
entrepreneurship so that money flows into investment. |
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NEW DELHI, Jan 16 (UNI) — The Delhi Government is negotiating with the Centre for a reduction in the sales tax floor rates on certain items, Delhi Chief Minister Sheila Dikshit said here today. “The new slab rates will certainly have an effect on essential commodities,” Mrs Dikshit said. The Chief Minister was
speaking at the CII-organised Auto Expo here. Mrs Dikshit
visited the Ford Pavilion and inaugurated the Ford
Environment Day. Addressing children, she asked them to
build a clean and beautiful Delhi.
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Senior
citizens may lose ‘interest’ in savings THE decision of the Central Government to reduce interest on various small saving schemes of post offices will upset the budget of the people in general and senior citizens in particular who had been banking heavily on these schemes. Senior citizens were actually demanding that the old interest rates should be restored but the Government had something else in mind. Some feel the Government perhaps thinks that the senior citizens have no striking force and hence their feeble voice can easily be ignored. The year 1999 was declared as the “Year of Senior Citizens.” Perhaps in celebration of this, the interest rates on post office schemes were first cut in the beginning of 1999 and now again further cut at the end of this year. Should this be considered a “left-handed gift” to them? What a way to observe the “Year of Senior Citizens”! Mr B.S Thaur, former Regional Manager of the State Bank of Patiala, says that this decision will badly hit senior citizens, mostly the retired salaried lot who depend on the interest from their hard-earned savings. Their earnings will dwindle considerably. The small depositors will start looking again to financial and forest companies for higher interest and thereby endanger their principal amount also. Mr Thaur says it will give boost to private companies which will come out with more alluring and attractive deposit schemes about which the Government generally takes no notice in the beginning and then the depositors are left at their own mercy when the companies disappear with the money of depositors. The banks will contemplate lowering of interest rate further in order to earn more on the advances as the banking industry overall is flush with funds and there is virtually dearth of good investible avenues. With the lowering of interest on post office schemes, the Government will impress upon the banks to lower interest on at least priority sector advances with a view to boosting the industry, agriculture and exports, he adds. Dr Rajinder Bhanot, a former teacher of DAV College, Chandigarh, feels that this decision will be hardest on those persons who have no pension and depend on the interest from monthly income schemes of post offices, NSS or other savings schemes. Senior citizens with meagre income had faith in the post office schemes and this was the reason that they used to deposit in MIS, PPF and other schemes. He was bitter with the Government on another point also. He said that when people like him deposit their hard earned money in private companies they are deceived by them. The Government then is not prepared to take any action against such companies and if cognisance is taken then action is not taken expeditiously. Mr Jag Mohan Lal Sethi, an advocate, said that with this decision it is clear that the Government has no definite economic policy. This decision has been taken under the pressure of banks and industry. On the one hand the Government wants to encourage savings and on the other with such steps it also discourages the people, particularly senior citizens with no pension and small depositors. It will give a real setback to small depositors and senior citizens. Mr Sethi said that saving is a security for old age and regular and steady income is the only source of the dependence of old people. With this the income will be reduced when the prices of all essential commodities are rising. He demanded the Government should reconsider its decision. Mr S.M. Chandha, a former Regional Manager of Oriental Insurance Company, said that this will hit small depositors the most . He said senior citizens, he himself is one of them, who have no pension to fall back, will be the worst hit as they have to readjust their priorities according to the reduced budget. The main reason of the increase in deposits of post office schemes is that the State Governments, it is seen in Punjab and Haryana, float alluring schemes in order to boost deposits in small savings as the States get 75 per cent share of the net collection in that particular state. The share of States has now been increased to 80 per cent. The Punjab and Haryana Governments, under the schemes, give one coupon for every Rs 5,000 deposited in small savings schemes, except the savings bank accounts. A large number of prizes, which include gold, cars, refrigerators, music systems and what not, are given and the State Government is supposed to bear the income tax also on these prizes. In the process the
Chandigarh Administration is at a loss as it cannot float
any such scheme as it comes under the Union Home Ministry
and even if it floats such savings schemes the entire
money will go to the Centre. Hence, the people of
Chandigarh, when the Punjab and Haryana Governments float
such schemes, deposit their money either in Mohali or
Panchkula post offices to get the coupons for entering
the contest. These accounts are later transferred to
Chandigarh. |
Taxes,
prices & tempers go up THE enforcement of uniform sales tax (UST) has run into rough weather mainly because of an increase in sale tax. The proposed sales tax rates are only floor rates and States are free to have their own rates. Many cash-strapped States have capitalised on the agreement to raise their rates on the ground that the new rates constitute a floor rather than a ceiling. The net result is that consumers have so far seen only a rise in prices. Problems over UST are certainly not a happy portent for introducing VAT. The States’ anxiety for more revenue is understandable since sales tax accounts for 59% of revenue derived from taxes levied by the State and comprise 40% of all revenue, including that from tax transfers by the Centre in 1998-99. States like Punjab suffer for another reason. Under the garb of UST some States have raised C.S.T. which is not covered under UST. Gujarat and Maharashtra have major ports and most of the imported goods are received there. Some commodities, including industrial inputs, were attracting 2% C.S.T. Now they have raised this to 4% for many commodities. The consuming industry in Punjab and elsewhere has thus been burdened with extra tax which is unreasonable. Maximum Retail Price (MRP) is yet another irritant on C.S.T. Commodities which are covered under MRP normally can not affect stock transfer due to the heavy freight component. For stock transfer they have to include freight on which Central excise is payable and hence stock transfer is unviable. Protests have been witnessed in States like Maharashtra and Delhi. The grouse is the rise in the rates of taxes. States should be asked to keep the floor rates as agreed by all. Floor rates as agreed
are also on the higher side. The floor rate of 12% is
much on the higher side and the ceiling should be 8%.
Floor rates could start from 2% for essential commodities
instead of 4%. One important aspect has been missed in
this regard. If industrial inputs become costlier,
exports would be hit hard. For most of the products,
prices in the international market are declining. Our
exporters cannot compete with higher costs of inputs.
Some manipulation also takes place in such a scenario and
the nation loses precious foreign exchange. |
Hughes Software net climbs 98 pc NEW DELHI, Jan 16 (PTI) — Hughes Software Systems (HSS) today reported a 98 per cent growth in net profit at Rs 14.32 crore for the third quarter ended December 31, 1999, up from Rs 7.23 crore during the corresponding period in the previous year. The company recorded a 42 per cent sales growth during the third quarter at Rs 30.31 crore, up from 21.31 crore during the corresponding period in the previous year, a company statement said here today. Total income in the
quarter amounted to Rs 39.23 crore, recording an 81 per
cent growth over Rs 21.68 crore during the corresponding
previous year period. For the nine-month period ended
December 31 1999, the company recorded sales of Rs 74.01
crore and net profit of Rs 25.71 crore. |
2 Himachal
men win Santro, Hero Honda LUDHIANA, Jan 16—The two prize winners of the Mayur Mahahangama scheme — Anil Kumar from Bhuntar and Satinder Kumar from Mandi in Himachal Pradesh — were today handed over a Hyundai Santro car and a Hero Honda bike, respectively. They had won these
prizes in a lucky coupon draw organised by the company
for its retail outlet owners. They were given the prizes
after an exhibition organised by Rajasthan Spinning and
Weaving mills to display poly-cotton (club collection)
tencels, tencel cotton and polynosic range of fabrics for
the retail outlet owners of Ludhiana here today. |
BIFR turns down Tisco’s petition NEW DELHI, Jan 16 (PTI) — The BIFR has turned down Tisco’s petition for winding up of sick industrial company Him Ispat Ltd. A two-member BIFR Bench, including its Chairman P.P. Chauhan, turned down the Tisco’s application seeking the board’s permission to proceed with the winding up petition in the High Court. The Bench also refused
to grant permission to Lloyd Steels to file a recovery
suit against Him Ispat saying, “the dues of Tisco
and Lloyds were duly noted and will be incorporated in
the revival package.” |
ae
Hero Puch may make scooters NEW DELHI, Jan 16 (PTI) — Hero Puch is negotiating with Peugeot for entering the the scooter segment in India.The negotiations are at an advanced stage for a technological tie-up with the multinational and the deal is likely to be finalised by the end of this month. In a related move, Hero Puch is also planning to launch 100 cc and 150 cc four-stroke scooters in the Indian market and is again negotiating for a collaboration for designing and developing these scooters with another European company. “Hero Puch is planning to introduce scooters in India and the target is to launch these during 2001-02,” General Manager (Marketing Services) of Hero Puch Sanjeev Bakshi told PTI at the Auto Expo here today. Sanjeev Bakshi said the scooters would be priced between Rs 38,000-40,000. Hero Puch is also scouting for suitable foreign partners for upgrading existing models and to have an integrated research and development set up for the company, he said. Hero Puch is showcasing its Turbo sport range of mini-bikes in the ongoing Auto Expo, besides introducing EZ and Shaktiman scooterettes for the first time. LPG-run scooter: Kinetic has roped in an Italian company ‘Lovato’ for sourcing technology related to LPG used as fuel for scooters. The company has developed an LPG-fuel base scooter which can use both petrol and LPG for running the vehicle. “We have developed the LPG-run scooter but cannot introduce it in the market as the Government does not allow us of this fuel for transportation purposes. We are waiting for a proper policy in this regard,” Kinetic Engineering Joint Managing Director Sulajja Firodia Motwani told PTI here. The LPG scooter can save about 50-60 per cent of petrol cost and reduce maintenance cost of engine up to 30 per cent, Motwani said. The use of the LPG also increases life of the engine, she said adding there is no need to make any changes in the carburettor. TVS Spectra: TVS-Suzuki has devised a two-phase plan to relaunch its scooter model “Spectra” by August this year in an attempt to revive dwindling sales of this lone product by the company — known for its motorcycles — in the scooter market. The new version will be upgraded both technologically and in its look, since the latter was seen as a very important purchase factor, specially by the youth. “There is a demand for sccoters but where we went wrong was in our positioning of Spectra,” Managing Director of TVS-Suzuki Venu Srinivasan told PTI. With the upgraded version, the company was looking at hiking its scooter sales by a significant 10-fold, he said. “We plan to hike our scooter sale by 10-fold to a range of 50-60,000 units, mainly on the strength of the relaunched Spectra,” Srinivasan said. “From February this year, we will begin the upgradation process, in which first there will be a retuning to 9 bhp from 8 bhp Spectra at present,” he said. Also on the anvil in the first phase of upgradation is fuel improvement to 58 km per litre from the current 55 km per litre which “Spectra” gives. New Vespa soon: Piaggio on Sunday said it plans to re-enter the Indian two wheeler market by launching the four-stroke “New Vespa” soon. The new version of the
erstwhile Vespa will incorporate the latest Piaggio
technology and conform to pollution norms, a senior
company official said at Auto Expo. |
an
Hijacking
bares security lapses IN the recent hijacking of Indian Airlines flight IC-814, it has become clear that despite several instances of sky-piracies in the Indian airspace, there is utter unpreparedness both in bureaucracy and political firmament. The security agencies once again had failed and politicians and bureaucrats, including the Directorate General of Civil Aviation, were unable to handle the hijacking. The comments from Government spokesman Brajesh Misra were confusing. Misra said the Crisis Management Group (CMG), under the Government’s “Contingency Plan”, met either 20 minutes when the news of hijacking became known. In the next sentence, he said the CMG met when the plane landed at Amritsar. The plane landed at Amritsar two hours after people came to know about the hijacking. It was nothing short of shocking if the CMG took about two hours to meet, leave alone the strategy to deal with the ugly situation. The CMG’s apathy proves as to why no strategy could be drawn to deal with hijackers when the plane was at Amritsar. In the absence of proper directions from the CMG, Commander D. Sharma acted as laid down in the Contingency Plan. He and the members of cabin crew deserve praise for staying cool. But experts, who have made thorough study of hijacking incidence worldwide, are of the view that the commander did not do anything unusual to enhance his reputation. The three chiefs of the
Army, Air Force and Navy should be part of the CMG
instead of their sitting out. They are the ones who can
direct operations more meticulously than the bureaucrats.
The rescue operations (90 minutes at Antebbe) by Israel
was handled by commandos under the guidance of defence
personnel. Politicians were merely informed of
developments. In the recent hijacking, Mr Atal Behari
Vajpayee was informed much behind schedule. It was yet
another instance of bureaucracy bungling. |
ip
Keep
watch on BHEL price Q: Do you recommend an investment in the shares of BHEL? — Anjala Sharma, Chandigarh While the power and capital goods sements witnessed negative growth, Bharat Heavy Electricals Ltd (BHEL) has consistently outperformed its contemporaries. With depreciated plants and a phenomenal cash generation of Rs 950 crore per annum, BHEL is in a position to meet its recurring capital investment of Rs 100 crore per annum over the next few years, meet annual debt repayments of Rs 140 crore and even provide suppliers credit. BHEL-built sets now account for 65 per cent of the installed generating capacity in the country, in addition, 12 units equivalent to 249 mw industrial sets were also commissioned during the year. It expects to add 300 mw industial sets during the current financial year. Notably, BHEL bagged all power projects awarded during the previous year under international competitive bidding. The more prestigious orders bagged include NTPC’s 430 mw project, MSEB’s two 210 mw projects, Maharashtra Government’s two 125 mw projects and three 50 mw power plants in Tamil Nadu. It has bagged a major share of prestigious orders for centrifugal compressors and heat exchangers for various refineries. Watch the share price of this company closely and pouch it at declines. Q: Do you recommend a buy in Sundaram Brake Linings? — Rituraj Kumar, Shimla A constituent of the TVS group, Sundaram Brake Linings is a prominent player in the automobile ancillaries industry. The company is engaged in the manufacture of automotive and non-automotive friction materials and asbestos and asbestos free friction materials. The products include brake linings and pads, and clutch facings. The company enjoys its presence in the original equipment supply market and also in the replacement market. The company caters to blue chip clientele such as Telco and Ashok Leyland. The company also broad based its product portfolio and conducted favourable and beneficial work through its R&D division. SBLL has also benefited from forging technical alliances. Thus, the company’s prospects appear encouraging and an investment in the shares thereof should prove rewarding in the medium to long term. Q: Please tell us the prospects of Birla 3M. —Hardeep
Kaur Patiala Birla 3M, which was incorporated in 1989 as a trading company, is a joint venture between 3M and Zenith Ltd, and Ashok Birla group company. 3M is a majority shareholder with a 51 per cent stake followed by the Ashok Birla group with a 33 per cent stake. The balance is held by the public. Birla 3M has a product profile comprising speciality tapes, adhesives telecom connectors and autographics at its Bangalore plant. It has a range of over 300 products. Birla 3M sells locally manufactured products and also trades in products imported from its parent. Birla 3M has introduced only a small percentage of 3M’s product porfolio. 3M has a strong brand equity in any of its products which can be capitalised by Birla 3M. 3M recently received FIPB permission to acquire a further 26 per cent stake in Birla 3M. The future plans of the company include the introduction of new products in the Indian markets and its track record on the financial front has also been satisfactory. Given such a scenario, the prospects of the company definitely appear fairly bright and hence existing shareholders could continue to hold on for the time being. Q: Please comment on the investment prospects of Essel Packaging. — Manmeet Singh, Mohali The company which entered into the business of flexible packaging around a decade and a half ago has been riding high on the growth of the fast moving consumer goods (FMCG) segment, particularly the dental care products and cosmetics, owing to its privileged clientele comprising large multinationals, in its business of laminated collapsible tubes. And now that the company has acquired a virtual monopoly status in the domestic segment with a market share of more than 90 per cent, Essel Packaging has set its eyes on the neighbouring countries like China and Nepal. While more than 90 per
cent of the sales turnover of the company is generated
out of the collapsible laminted tubes segment, it is also
into the manufacture of seamless tubes. The financial
track record of Essel Packaging also appears quite
satisfactory. A company with sound fundamentals, its
shares could be picked up at price declines for decent
gains in the medium to long term. |
bb
Inflation dips Room heater Jainsons Elect Beopar Mandal Michelin |
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