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| Friday, July 14, 2000, Chandigarh, India   
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Planning panel recommends reorientation of SSI units ‘No coop sugar mill will be closed in Punjab’
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| Action plan to revitalise weak banks NEW DELHI, July 13 — A three-point action plan to revitalise weak public sector banks will be ready by this month end, a top Finance Ministry official said today. Implementation of IT Bill by
August 15 SHIMLA, July 13 — UG Hotels and Resorts Limited is planning to develop its sprawling Shilon Bagh complex near here into self-contained “Tourist paradise” by allowing other entrepreneurs to build their hotels. Set up economic
zones: PHDCCI Maran clears 45 FDI cases worth 1465 crore HFCL acquires ‘Page Point’ Banks to accept
income tax ITC diversifies into retailing
Planning panel recommends reorientation NEW DELHI, July 13 — Small Scale Industries (SSI) in India will have to undergo a massive reorientation, including becoming market savvy, World Trade Organisation compliant, scientifically and technologically advanced and enjoy a level playing field. These are among the recommendations of a Study Group on Development of Small Enterprises set up by the Planning Commission under the chairmanship of its member, Dr S.P. Gupta. The recommendations assume importance as a Group of Ministers headed by the Union Home Minister, Mr L.K. Advani, is also looking into the reorganisation of the SSI sector and the inputs by the Planning panel is likely to influence its exercise to a large extent. Several recommendations of the Study Group like allowing 49 per cent equity participation by large scale companies and foreign investors, allowing non-SSI companies to produce reserved items by exporting 30 per cent of their produce instead of the existing stipulation of 50 per cent is bound to cause widespread resentment in the small scale sector. A section of the Sangh Parivar has also cautioned the government against opening up the SSI sector to please foreign investors and WTO obligation. The interim report has suggested among other things a three-tier definition of Small Scale Enterprises indicating tiny, small and medium sector. Medium sector definition has been brought in for the first time to help SSI units to graduate to medium and then to large scale. Medium scale units would not be provided the fiscal and other policy support as those are available to SSI units. However, these units would be helped by providing credit for technology upgradation and modernisation from a separate fund. Need of bringing awareness in small industries sector about the stipulations of the WTO and the need to upgrade them to meet competition from abroad has been repeatedly stressed by the Study Group. The good news for the SSE sector is that the panel wants reservation to be continued and the bad news is that it wants the export obligation of non-SSI units producing reserved items to be brought down from 50 per cent to 30 per cent. The interim report has recommended that the investment ceiling for plant and machinery for export oriented industries like leather products, garments, hosiery, hand tools, toys, packaging material, auto components, pharmaceuticals, food processing etc. be increased from Rs one crore to Rs 5 crore. A corpus fund of Rs 2000 crore for infrastructure development and another Incubation Infrastructure Development Fund with Rs 1000 crore to encourage technocrat entrepreneurs in high-tech industries like electronics and information technology are among the recommendations. The payment problems faced by the SSI units has been dealt at length by the Gupta Committee and it has suggested that defaulters in respect of payment to SSI units for more than 120 days be denied MODVAT credit, the Income Tax Act be amended to disallowed unpaid SSI bills from business expenditure, and monitoring of implementation of Delayed Payments Act. Another major recommendation is that the present ceiling of equity participation in SSI units by large units, including foreign investment, be raised from 24 per cent to 49 per cent. It has recommended that foreign direct investment be encouraged in SSIs for better technology transfer and excise exemption on SSI manufactured goods for other large units under brand name in urban areas also which is presently allowed for rural areas. Enactment of Limited Partnership Act to bring in more risk capital in SSI sector, Samadhan scheme for one time settlement of dues of sick units so that assets could be reutilised and an exit route to entrepreneurs of sick units by allowing them one time payment, including interest not more than double the credit/loan amount has been recommended. A large number of recommendations on fiscal and financial measures, including setting up of more specialised bank branches for SSI sector, measures for technology upgradation and modernisation and higher marketing support are among the recommendations of the interim report. Dr Gupta said the Small Scale Industry sector has emerged over four decades as a highly vibrant and dynamic sector of the Indian economy, contributing more than 40 per cent of value addition in the manufacturing sector and about 35 per cent of exports. As to the contribution to employment, it has added nearly 46.3 lakh more jobs between 1990 and 1998, which is 4 per cent per annum in sharp contrast to organised manufacturing which is growing at a less than one per cent per annum. Mr Pant said the SSI sector was important in all countries and even in the new competitive environment one has to see how to encourage the potential in them. |
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‘No coop sugar mill will be closed in Punjab’ CHANDIGARH, July13 —The cooperative sugar mills in Punjab will be converted into multiple sugarcane processing industry. These will manufacture sugar, generate power, prepare spirit and also operate bottling plants. The decision to this effect has been taken to tide over the losses by utilising sugarcane byproducts for different end uses. A high level meeting was held today to review the performance of the cooperative sugar mills in the state. No cooperative sugarmill in the state will be closed or sold except Budlada Sugar Mill which is under liquidation for the past a few years. Earlier, there were reports that the government has decided to close the cooperative sugar mills located at Ajnala, Faridkot, Zira, Jagraon and Rakhra(Patiala) which are in red for the past many years. Out of 14 cooperative mills in the state, sugar mills located at Nawanshahr, Morinda, Nakodar and Budewal are in profit and Tarn Taran, Gurdaspur, Batala and Fazilka are at par. Confirming that the sugar mills performance and those running into loss was discussed in detail, Mr Ranjit Singh Brahmpura told TNS that the Government had decided to introduce new varieties of sugarcane to improve the sugar recovery which was 8.89 per cent this year. “ By achieving sugar recovery 9.5 per cent, all loss making mills can be profit earning units” , Mr Brahmpura said. Unfortunately, he said that no new good variety had been introduced in Punjab in the past years. There is no good sugarcane research institute . In fact, there is only one research institute based at Coimbatore. The area under the cane will be enhanced as existing area under cane can is only enough for 59 per cent of the capacity utilisation of the cooperative mills in the state. Already the state government has paid an indirect subsidy of Rs 100 crore to cooperative sugar mills in the past three years from the Rural Development Fund. Official sources admit that the price of cane Rs 100 per quintal by the government is unviable for mills. The authorities concerned in the Sugarfed had vehemently opposed the increase in the price from Rs 95 to 100 at the beginning of the sugarcane crushing season in November last. More over restrictions on the sale of free quota sugar imposed by the Union Government on mills also adds to the loss . Though there are 70 percent free quota but permission has to be taken from the Union Government for selling the same. And the Union Government grants permission on piece meal basis. Mr Brahmpura said that their should be complete freedom to mills for disposing the free quota sugar and these should be no need to seek permission for sale. Mills, after watching the market trend could dispose the sugar
accordingly, he added. |
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Action plan to revitalise weak banks NEW DELHI, July 13 (PTI) — A three-point action plan to revitalise weak public sector banks will be ready by this month end, a top Finance Ministry official said today. The action plan includes an attractive voluntary retirement scheme and recapitalisation of the weak banks, Economic Affairs Secretary, E.A.S Sarma told reporters. Regarding VRS scheme for other public sector banks, Sarma ruled out any budgetary support saying a scheme was being worked out in which banks could lend money for VRS schemes. Sarma said a separate Financial
Reconstruction Authority for each of the weak banks was proposed to be set up and RBI was working out the details of a legislation for this. The three weak banks are United Commercial Bank, Indian Bank and Union Bank of India. Asked about reports that some of the provisions of the Foreign Exchange Management Act were ambiguous and not in consonance with some of the SEBI provisions, Sarma clarified that all the guidelines regarding the act had been issued and ambiguities, if any would be rectified. Asked when the guidelines for setting up private insurance companies would be issued, Sarma said IRDA would shortly announce them to enable domestic private insurance companies with foreign equity to start operating in the country. Quoting statistics, Sarma said life insurance had grown much faster in rural areas in the last three to five years and it contributed nearly 50 per cent of the total sum assured. Last year the growth in number of policies was 18 per cent in rural areas as against 3.86 per cent in urban areas. The sum assured grew by a whopping 28.4 per cent in rural areas as against 10.75 per cent in urban area. There were as many 1.70 crore life insurance policy holders in the country of whom nearly half are in rural areas, he said. On Fiscal Responsibility Bill, Sarma said a draft legislation had been prepared which will go before the Finance Minister Yashwant Sinha for discussion next week. The thrust of the legislation would be transparency of Budget and Parliamentary sanction for effecting cap on borrowing and expenditure. The main purpose of the bill is to bring down revenue and fiscal deficits to manageable levels in the medium term and fiscal responsibility would a “rolling concept’’. “The ideal is to be transparent, especially the budget,’’ Sarma said. Asked if the government was considering allowing provident funds to be invested in stock markets, Sarma said there was a proposal in this regard and no decision had been taken. The matter was before the social ministries and “it will be some time before a decision is taken,’’ he said adding the idea was to be “more prudent’’ in managing provident fund.
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Implementation of IT Bill by
August 15 BANGALORE, July 13 (UNI) — The information technology sector will get a further fillip with Union Information and Technology Minister Pramod Mahajan declaring that the IT Bill will be implemented and much awaited bandwidth problem solved by the end of August. The government has set a deadline of August 15 to implement the IT Bill, passed in Parliament on May 17. The government would also meet the demand for wider bandwidth by August 31, Mahajan said while participating in the inauguration of the Research and Development Centre of the National Centre for Software Technology here yesterday. The government would have to create excessive bandwidth to take it to the masses. He claimed that once the IT Bill was implemented it would be one of the fastest actions by the Centre. The subordinate legislations was being readied. The Convergence Bill, which would enable transmission of voice, data and video on fibre or without fibre, was ready. However, later talking to newspersons he said the Bill would not be introduced in the coming session of Parliament. It had to be vetted by various agencies before being placed before the Cabinet for approval. He said nearly Rs 5,000 crore investment would have to be made to keep the country in readiness to meet the demands of the future. There would be exponential growth in the sector and the number of engineering colleges had to be doubled. Even there was need for increasing the seats in the existing engineering colleges. The government was upgrading 43 colleges. The states would have to think of making it a subject or at least offer as an optional. India is producing about 75,000 software engineers as against the required 2.2 million by 2008.
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UG Hotels
to develop Shilon Bagh SHIMLA, July 13 —
UG Hotels and Resorts Limited is planning to develop its sprawling Shilon Bagh complex near here into self-contained “Tourist paradise” by allowing other entrepreneurs to build their hotels. The company has decided to offer 50 bighas at Shilon Bagh to other developers on lease or outright purchase. Those who build their complex in Shilon Bagh will also be provided the facility of collective marketing, centralised reservation and community services like water supply, power supply, solid waste disposal facility, centralised purchasing, (if desired), common laundary, security, telecom connectivity and fire fighting systems. The only condition Mr Harmit Ghat, Director of the company said would be that developers would have to get their building plans approved by the company. This was essential to prevent haphazard growth of the village.
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Set up economic
zones: PHDCCI NEW DELHI, July 13 — Several factors, including locational disadvantage, poor infrastructure, inadequate marketing facilities and insufficient institutional support were among the factors responsible for hindering the growth of exports from the northern region. While Haryana, Punjab and Rajasthan are doing well in exports, states like Himachal Pradesh suffer from disadvantage of being located in hilly areas, the PHDCCI said. The northern region contributes an estimated 38 per cent of the national export earnings, a study says. The special economic zones, as announced in this year’s
Exim policy, need to be set up in this part of the country to neutralise the locational disadvantage of being run away from ports and raw material resources. The state governments should also take up with the Central Government the need to permit the use of Rs 250 crore allocated for states this year in the
Exim policy and also for setting up industry-managed product design development centres and export marketing companies, the study observes. The state governments may identify the export growth centres or export clusters in the state where there is a concentration of export activity. These clusters if not formally declared as export zones, should get top priority for provision of infrastructure facilities. The upgradation of infrastructure at the growth clusters is an essential pre-requisite for a quantum jump in exports. The information gap is another major handicap in this regard. The state governments should establish trade information centre at important industrial towns. |
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Maran clears 45 FDI
cases worth 1465 crore NEW DELHI, July 13 — A proposal by Dr Reddy’s Laboratories Ltd to invite Rs 880 crore equity through foreign direct investment and Non-Resident Indians was among 45 cases of FDI of about Rs 1465 crore cleared by the Commerce and Industry Minister, Mr Murasoli Maran. The proposals cleared on the recommendations of the Foreign Investment Promotion Board cover various sectors like export of ferrous products, drugs, diamond jewellery, publishing of Walt Disney comic books for children, computer software development for export and establishment of power project. The setting up of a shipping agency, Internet, website related services, cellular mobile telephone services, manufacture of crushing machinery and Non-Banking Financial Companies activities were also among the proposals cleared. Among the major proposals are one by Bakreshwar Power Generation Company to invest Rs 325.4 crore for production and sale of electricity and a proposal by Gujarat Powergen Corporation Ltd to increase its equity from 74.11 per cent to 88 per cent at a cost of Rs 101.12 crore. |
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HFCL acquires ‘Page Point’ NEW DELHI, July 13 — Himachal Futuristic Communications Limited (HFCL) today acquired the paging venture ‘Page Point’, which provides paging services in the cities of Mumbai, Bangalore, Hyderabad and Pune. With this acquisition, HFCL has become the largest paging operator in India with close to two lakh subscribers. 
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Banks to accept
income tax NEW
DELHI, July 13 — All computerised public sector banks in the country would accept income tax payment from August 1, the Union Finance Secretary, Mr Piyush Mankad, said here today. This facility is now available in some branches and it would not be extended to all computerised banks, he said, which disclosing the government’s two new schemes to be launched from next month to help the
assesses in solving tax problems. The schemes called “Suvidha” and “Sahayatha” would provide better “facility” and “assistance” to income tax and
corporate tax payers, he added. These two schemes follows the three schemes launched last year by the Finance Minister — “Samadhan”, “Samman” and “Saral” to unlock Rs 52,000 crore locked in litigation, recognise honest taxpayers and simplify procedures.
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ITC diversifies into retailing NEW DELHI, July 13 (PTI) — The Rs 8,000 crore ITC Ltd today announced its entry into retailing business by launching branded leisurewear apparels as part of its diversification strategy into new areas. Announcing the launch, ITC Chairman Y.C Deveshwar said entry into retailing was in line with the recommendations of consulting firm McKinsey as future growth areas for the cigarette giant. He said ITC along with its associates would invest about Rs 250 crore in the new business and open 100 exclusive “Wills Sports” outlets throughout the country in three to five years. “The long-term vision of ITC is to be in retailing, including super stores. And in the short-term we will be retailing casualwear apparels,” he said. Deveshwar said the company has identified hotels, cigarettes, paper and packaging as core areas and has decided to enter retailing as the organisation could handle more businesses. Over a five year period, the company hopes to achieve a turnover of Rs 250-500 crore from the apparel business. The ITC chairman said the apparel retailing would be expanded to cover the entire range of lifestyle products, including personal care products and accessories in the future. On the exclusive Wills Sports Outlets, he said that the company would own only a few flagship stores and the remaining would be given to franchisees. ITC’s leisurewear is designed by Francisco-based American Design Intelligence Group (ADIG). On why the company chose the “Wills” brandname, known for cigarettes, for its retailing business, Deveshwar said “we wanted to build on the brand which is already well-known.” He said the Indian cricket team was sponsored under the same brandname “Wills Sports”. Asked whether the company would stop sponsoring cricket in the wake of betting and match-fixing scandal, he said ITC was not going to abandon cricket. “We do not sponsor cricket for individual players. We do it for the cause of the game. If we cease to sponsor cricket, it would be for pure business reasons,” he said.
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Earn money in sleep LONDON: Soon computer owners will be able to earn money in their sleep. Three companies plan to pay PC owners to leave their idle machines logged on to the Internet, the British magazine New Scientist reported on Wednesday. US-based companies Parabon, Distributed Science and United Devices plan to chop up corporate computing tasks and farm them out to tens of thousands of personal computers via the web, the magazine said. To make indolent computers earn their keep, owners simply have to download software and log on. The plan may not offer much in the may of a high-tech investment. Jim Albea, Chief Operations Officer of Distributed Science, estimated that an average personal computer would earn at least $ 10 a month. But people already appear to be doubling up on PCs to increase their income — Albea told New Scientists that 39,000 people with 77,000 computers had signed up so far. “People are dragging old PCs out of the cupboard to get connected to the project,” he said.
— Reuters
New vaccine for rabies NEW DELHI: Pharma major Zydus Cadila Healthcare Ltd today claimed to have successfully developed a new vaccine for rabies and will launch it by year end, a top company official said. “This second generation rabies vaccine has been developed through in-house research and development and will be hopefully launched by year end,” Pankaj R. Patel, MD and CEO, Zydus Cadila Healthcare, told PTI. Patel said that the vaccine had been developed in technical collaboration with Switzerland-based Swiss Serum and Vaccine Institute from Avian Embryo. Vaccine will considerably reduce the dosage to five injections in case of a dog bite in comparison to 14 injections in case of currently available vaccines, he claimed. For preventive purpose, the dosage would be limited to three injections and a booster dose, he said adding that the company had received all necessary approvals for the drug and would commence trial production this month. Its commercial production would begin over a period of three to four months, he said. Gujarat-based pharma company is also in the process of starting commercial production of a bio-technology-based typhoid vaccine and other therapeutic proteins. — PTI Lady Clinton honours Suri NEW DELHI: Noted industrialist Lalit Suri was presented an award for outstanding achievement in the field of business by US First Lady Hillary Clinton at a glittering ceremony in New York on Wednesday. The award was presented to Mr Suri at the International Punjabi Society function, which was attended by delegates from India, Canada, Britain, Thailand and Indonesia says a press release. Legendary actor Dev Anand was also honoured at the function by Ms Hillary Clinton. While presenting the award, the first lady told Mr Suri to keep up the good work. Mr Suri also runs a leprosy and malaria eradication programme. He also had a meeting with Senator Schumer of New York who appreciated Mr Suri for his bold step to set up a hotel in the Kashmir Valley for promotion of tourism. He apprised the senator of the situation in the valley. — UNI Sony to launch handheld computer TOKYO: Sony Corp said it would launch two new handheld computers in Japan on September 9 and in the USA market later this year, joining the fray in an increasingly competitive global market. Sony set an initial monthly production target of 50,000-100,000 of the new devices, which it expects will retail for about 55,000 Yen to 60,000 Yen ($ 510 to $ 555) each, a spokesman said. The devices use application software developed by Palm Inc, which struck a licensing agreement with Sony last year. Mobile computing is considered a strategic piece of Sony’s drive to lead the development of home digital networks that link digital televisions, set-top boxes and other devices. The device, a prototype of which was unveiled in New York last month, features Sony’s chewing gum-sized memory stick storage device and a jog dial that allows users to scroll and to open applications without a pen-like stylus.
— Reuters
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