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| Tuesday, May 23, 2000, Chandigarh, India  
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Discontinue central schemes on State subjects: Punjab FM NEW DELHI, May 22 — The Fertiliser Ministry will organise five roadshows across the country to discuss draft fertiliser policy and invite suggestions from the farmers, industry representatives to discuss the new policy in totality, Chemical and Fertiliser Minister Suresh P. Prabhu told PTI. Bhagwati favours capital controls Let sugar mills generate power: study |
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Germany fails to lure Indians UN survey forecasts 7 pc growth rate
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Discontinue central schemes on State subjects: Punjab FM NEW DELHI, May 22 — Punjab today suggested immediate discontinuation of all centrally sponsored schemes in areas falling in the States list, alteration in ratio of plan grants, incentive for States which reduce revenue deficit and changes its basis of calculation. Taking part in the 11th Finance Commission meeting held under its Chairman Dr A M Khusro here, the Punjab Finance Minister Capt Kanwaljit Singh, said central loans and centrally-sponsored schemes were the two largest contributors to the State’s public debt. The central government had asked the Commission to draw up a monitorable fiscal reforms programme for reducing the revenue deficit of the States and also recommend the manner in which non-Plan revenue grants should be linked to the progress in implementation of the programme. All centrally sponsored schemes, especially in the areas falling in the State list, should be discontinued forthwith and resources thus released should be distributed among states according to an “objective, fair and transparent criteria” which the Commission may formulate. He said that most of the plan grants were received by the States in the form of 70 per cent loan and 30 per cent grant-in-aid. Punjab suggested this should be altered to 40:60 with effect from April, 1995. The Finance Minister argued that in the current fiscal scenario of States any “unrealistic capping” of States public debt could affect the tempo of development due to shortage of funds. He underlined the need for striking a balance between the requirement of the States of funds for development and management of public debt. Haryana: phase Haryana is against any linkage of “mechanical and deterministic” approach to reforms related
performance and release of non-plan grants to States while advocating a national consensus on phasing out subsidies. The Haryana Finance Minister, Mr Sampat Singh, said non-plan revenue expenditure was a major component of subsidies. Although there was a broad consensus at conceptual level on phasing out of subsidies towards cost-based regime the task was not easy especially for the States which have their “socio-political and economic pecularities”. Only a national consensus could find a solution to the problem. Sampat Singh said revenue deficit was not limited to the States but in case of the Centre it had grown more rapidly and suggested that the fiscal reform programme which was being evolved by the Commission should cover the Central Government too. No uniform fiscal Himachal Pradesh has opposed the idea of having an uniform policy of fiscal reforms for all States, terming it “unrealistic” and wanted drawing up of fiscal reforms done by States. The State Chief Minister, Prof Prem Kumar Dhumal, said that States should be categorised as mainstream and special category keeping in view of differing revenue deficit level and composition of revenue receipts and expenditure. Prof Dhumal said revenue receipts comprise both tax and non-tax receipts while it was easy to set monitorable norms for tax receipts as against non-tax receipts. This is because it comprises broadly user charges, royalty, interest and dividend income which were linked to host of other factors. He demanded the setting up of State specific corpus of funds linked with State-specific reform programme and disbursement from the fund may be linked to appropriate programme designed by such autonomous bodies as were designated by the Commission in consultation with individual States. |
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NEW DELHI, May 22 (PTI) — The Fertiliser Ministry will organise five roadshows across the country to discuss draft fertiliser policy and invite suggestions from the farmers, industry representatives to discuss the new policy in
totality, Chemical and Fertiliser Minister Suresh P. Prabhu told PTI.
Suitable changes in the draft policy would be made to accommodate the views emerging from these roadshows. The final policy paper would be announced in three to four months time as the consultation process would take sometime, the minister said. A committee of secretaries (CoS) will meet by the month end in the capital to finalise the draft policy, Prabhu said adding that the policy would be sent to the Finance Ministry by June end to take its view on the financial implications. These roadshows will start from the first week of July and the Fertiliser Minister himself will be present during these events. On the changeover by fertiliser units from naphtha to liquefied natural gas (LNG), Prabhu said he has directed the Fertiliser Secretary to convene company by company meetings to know their strengths and financial requirements for the changeover. All fertiliser companies including public sector undertaking units would be called for detailed discussions with their balance sheets to arrive at a more realistic conclusion. The views of the Finance Ministry is also being taken in this regard. The Hanumantha Rao Committee on fertiliser pricing had suggested that all naphtha-based fertiliser units should be changed to LNG for feedstock as the cost of production of naphtha-based units was quite high compared to LNG-based plants. The Fertiliser Ministry opines that in the current scenario when the ruling fertiliser prices in the international market is very low compared to domestic production, naphtha-based units should be converted to LNG to increase the economic viability of these units. |
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Bhagwati favours capital controls SINGAPORE, May 22 (Pool-Bernama) — Renowned international economist and Professor of Columbia University Jagdish Bhagwati has commended Malaysia for its recovery from the Asian turmoil while criticising the International Monetary Fund (IMF) for its “killer handshake” policy. “Most people would agree now that the first set of IMF policies was excessively deflationary for Asia. Mahathir’s policies worked well because they made him escape the handshake that would have killed him,” he said in a lecture here recently. The Straits Times reported Bhagwati as saying that Malaysia was recovering not because of its capital controls but because by going its own way, it avoided the IMF “killer handshake”. Malaysian Prime Minister Mahathir Mohamad was vilified internationally when he chose to introduce selective capital controls in September 1998 to curb rapid capital flows and speculation on its currency. Bhagwati said countries which had chosen the liberalisation path leave at their peril. He also advised India not to rush and abandon its capital controls because a U-turn later would be difficult. |
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Let sugar mills generate power: study NEW DELHI, May 22 — Power generation by sugar mills of Punjab appears to be the only solution to come out of the red, says a study. “Sugar production alone by sugar mills is the primary reason for these units to incur huge losses,” the Managing Director of Punjab State Federation of Cooperative Sugar Mills Limited, Mr Jagjit Puri, told The Tribune here today. There are 14 sugar mills in the cooperative sector in the state and they have incurred a loss of Rs 448 crore. “These units do not generate enough to even pay to farmers and have to depend on the state government to bail them out and this adversely affects the fiscal deficit of the state,” Mr Puri said. The sugar mills in the state are idle for about 180 days in a year and around 10,000 workers employed there are paid their wages, and other incidental expenditure are incurred by these mills during those time, without the industry getting anything in return. A study commissioned by the federation stated that seven sugar mills, whose potential was studied in the first phase, alone can produce 220 mega watts of power. The study has been done by Maharashtra Industrial and Technical Consultancy Organisation Limited and Pranam Consultants Private Limited. The findings of the first phase were submitted to Mr Puri here. The study proposed joint venture between private sector, cooperative and the government. It would in the ratio of 70:30 with private sector holding 30 per cent equity stakes, management control and would be on the formula of build, operate and transfer (BOT). “An investment of around Rs 250 crore would be required, with the government investing Rs 31.5 crore and the rest being generated by private sector investment and equity issue,” the study said. The seven sugar mills which were taken up during the first phase of the study were Nawanshahr, Gurdaspur, Morinda, Nakodar, Faridkhot, Fazilka and Budhewal. “The used sugar cane of these mills, paddy and wheat straw, which are being burnt now a days, can be used to generate electricity,” the study said. Mr Puri said the federations has entered into an agreement with the Punjab Electricity Board to sell power at the rate of Rs 3.08 per mega watts. The study is based on the success stories of sugar mills in Tamil Nadu — E.I.D. Parry and Thiru Arooran Sugar mills — which have been successfully generating power and have been able to pay good money to the farmers. These mills are generating 220 mega watts of power and are expected to generate about 500 mega watts of power in the next two years. “Success stories of these mills have inspired us to emulate their model in Punjab,” Mr Puri said, adding that “federation would urge the state government to send a delegation comprising the Finance Minister, Cooperative Minister and senior officials to visit these mills in southern India before approving the revival plan.” According to the study, if the power generation plan is implemented in these seven mills, they would be able to break even the investment in three years. The country’s sugar mills have the potential to generate about 4000 mega watts of power. Several sugar mills in the country are incurring losses as they have not opted for “co-generation” concept over the years. |
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Germany fails to lure Indians GERMANY’S attempt to overcome its crisis in Information Technology by hiring thousands of Indian software professionals has so far proved an embarrassing failure, with fewer than 200 Indians expressing any interest in a visa scheme proposed by Chancellor Gerhard Schroder. India’s burgeoning computer software industry has responded with stunning indifference to the plan, which would allow 20,000 foreign software experts to come to Germany on five-year visas. “I don’t want to go to Germany. I would much rather go to the USA,” Kamalika Sen, a computer specialist with the German firm Siemens said, summing up the mood. In a sign of how the German relationship with India has been turned upside down, Germany’s Foreign Minister, Joschka Fischer, was startled to find three days ago that the Chief Minister of Karnataka, India’s most hi-tech state, was too busy to meet him. During his trip to Bangalore Mr Fischer called on Azim Premji, the head of Wipro and the subcontinent’s richest man. Mr Premji apparently told him that the green card scheme was bureaucratic and unworkable. Germany should think about introducing a new flexible system of short-term visas for software professionals, he added. Chancellor Schroder’s plan to recruit from India and eastern Europe was prompted by the fact that Germany’s information and telecommunications industry is growing by between 30,000-40,000 jobs a year — and has a shortfall of 75,000 people. The row appears to have put off the few Indian software professionals — India produces 133,000 a year — who had been considering a move to Germany. “It is a very major deterrent,” added Ms Sen, who lived in Munich for two years. “We were a little bit puzzled about why this reaction should come up. It would take five to six years to train children to do these kinds of jobs.” Although she had enjoyed her time in Germany, the scheme did not tempt her because it made no provision for her husband to join her, she explained. In the run-up to the German Foreign Minister’s visit, Indian IT experts have deluged the papers with explanations of why Germany fails to compete with the US: salaries are much lower, the visa is limited to five years only, immigration is practically impossible, and families are not encouraged to travel with the worker. Anand Mahindra, who runs his own IT business in Delhi, Antaeus Information Ltd, and has a German girlfriend, said he too would rather work in the United States.
— By arrangement with the Guardian
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UN survey forecasts 7 pc growth rate NEW DELHI, May 22 (PTI) — Painting a rosy recovery picture, United Nations economic and social survey today forecast a 7 per cent annual growth for India, but cautioned against neglect of social security and safety nets in carrying out reforms, particularly in the public sector. Releasing the 2000 survey for Asia and the Pacific, Economist V.R. Panchamukhi said four factors have been outlined for the good pick up — fiscal stimulus, export performance, industrial capacity utilisation and improved capital flow. Forecasting a 6.9 per cent growth this year as against 5.9 per cent last year, the survey said it would go up to 7.1 and 7.2 per cent in the next two years even as inflation is maintained at an average low of 5 per cent. “The combination of fiscal stimulus and better export performance created certain other conditions favourable for improved growth by helping increased capacity utilisation and containing unemployment,” the survey said adding greater optimism was generated as a consequence. Noting India’s economic prospects were “encourging” the survey said these favourable outcomes were due to a variety of supply-side incentives, facilitation measures to boost industrial production and infrastructure development. Stating that India’s economic prospects were encouraging in the short to medium term, the survrojected annual agricultural and industrial expansion of 3.9 and 8 per cent respectively. “Given that the slight deceleration in savings/GDP ratio observed earlier has been reversed, most of the required investment can be financed by domestic savings, leaving a small gap to be met by foreign capital inflows,” it said. The survey stated that a higher rate of growth of 7 per cent annually could be entertained for 2000-02 if there were no major internal and external shocks and the pace of second generation economic reforms was sustained. Moderate deceleration of GDP growth from 6.8 to 5.9 per cent between 1998 and 1999 was underpinned by marginal growth as upward trend in non-agricultural value added was mirrored by the rising investment to GDP ratio, by over two percentage points in 1999, it said. The survey attributed these favourable outcomes to a variety of supply-side incentives, facilitation measures to boost industrial production and infrastructure development, including greater private sector participation. “Simplification and rationacial banks and financial institutions were other stimulating factors,” it added. Though India’s external debt was high at $ 98.2 billion by March 1999,the survey said it was not worrisome as short-term liabilities declined substantially in recent years to just four per cent of
the cent in 1999, a sharp drop from 38 per cent in 1991, while the ratio of debt service to export of goods and services was equivalent to 17.1 per cent, reflecting a consistent decline coupled with the rising stock of foreign reserves. Stating that India’s saving rate at 22-26 per cent was significantly lower than China’s saving rate of over 41 per cent, the survey advocated higher rate of savings for a sustainable high growth rate. India moved towards more sustainable balance of payment position with foreign exchange assets rising from $ 1 billion in 1991 to more than $ 30 billion in November 1999, the survey said. |
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