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| Sunday, September 17, 2000, Chandigarh, India   
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New civil aviation policy on anvil Private, foreign banks concentrate on SMEs Who pays for
KBC? Mera number
aa gaya |
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Deposit campaign by SBI NDDB to treble
milk procurement ISGEC wins CII trophy Premji ‘Elcina Man of the Year’
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New civil aviation policy on anvil WASHINGTON, Sept 16 (PTI) — Prime Minister Atal Behari Vajpayee has said the government will soon announce a new civil aviation policy, step up power sector reforms, speed up disinvestment programme and allow foreign banks to expand operations aimed at attracting foreign investment. Outlining his government’s economic agenda, Mr Vajpayee told CII’s US-India business summit here yesterday that the proposed civil aviation policy would be based on the principle of making India an easier destination. “It would not be driven by a mere bilateral consideration of trade-off in slot sharing. I am sure that this will enable American and other foreign airlines to bring more flights and business to India,” he said. Asserting that large investments were needed in the power sector, he said “We will speed up reforms in this crucial sector, both at the Centre and in the states.” “We now have a regulatory framework that depoliticises the fixation of tariffs, he said, adding that 14 states and financial institutions have worked out alternative arrangements for easy lending. Referring to the insurance sector, Mr Vajpayee said the first batch of private licences will be issued by the Insurance Regulatory Authority by October 1. He said the RBI was willing to consider further expansion of foreign private banks in India and the government will soon constitute a Tax Reform Commission to lay down the roadmap of further reform of tax structure and administration. “Only a week ago, we have finalised definite milestones that will enable the privatisation programme to cover many large undertakings,” the Prime Minister said. Disinvestment of government holding in Air India is well on course. The necessary advertisement will be issued within a fortnight. Milestones have been determined for long-term lease of five major international airports and the corporatisation of ports and private participation in port building was being aggressively encouraged. |
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Private, foreign banks concentrate on SMEs SMALL Scale Sector which is most crucial to country’s economy continue to get ad-hoc treatment. To provide cover over various aspects needing urgent attention of the government Prime Minister announced the enhancement of exemption limit of Central Excise from Rs 50 lakh to Rs One crore. No doubt this is a major concession but it is far from being sufficient. This sector has major problem from banks accompanied by a host of other hurdles and unjustified financial burden. De-reservation issue have sharp political tones has been left unspelt. SSI sector is suffering due to inadequate and untimely credit at reasonable rates. Persistent efforts by the government and the RBI over the last decade have failed to improve the flow of institutional credit to this sector. Over all flow of institutional credit to SSI units is hardly 20 per cent of the total requirement. Condition of tiny sector is still worse. Against the target of 60 per cent of total SSI credit actual flow to tiny sector declined from 27 per cent as on March 1998 to 20.7 per cent on March 1999. Large scale sickness in SSI sector is mainly due to high cost of borrowings from private sources and long delays in receiving payments from corporate customers. Private and Foreign banks are now concentrating on SMEs. Corporate sector is resorting to alternative means to meet their working capital and long term loan requirement instead of depending on high cost bank finance. As a result banks other than the scheduled banks are targetting SME’s as their valuable customers. This is also part of global strategy. These banks treat SME’s as emerging local corporates. ICICI for instance has launched the business multiplier group to target SSI units. HDFC has been able to increase the business from SME’s from 20 per cent to 50 per cent. Now a very pertinent question arises. When private and foreign banks are having a profitable business from SSI sector why are our scheduled banks losers. Word ‘Service’ seems to be missing in the schedule of the scheduled banks. Service charges on the other hand are touching the sky. They have become so much of security minded that under feeding SSI unit is the order. This leads to sickness which re-inforces then approach to withdraw support to weak units. This spiral has to be broken. On various other issues concerning SSI sector final out come is likely by December this year. De-reservation is the most crucial issue. Minister for SSI has disclosed her mind a bit. She has hinted about dereservation of ready-made garment sector. This issue is under examination of Planning Commission and expert group at administrative college Hyderabad. However, indirect way has already been paved. Investment limit in certain sectors is proposed to be enhanced to Rs 5.00 crores. This is de-facto reservation and rightly so. Policy makers are missing two main issues concerning SSI sector. Cost and availability of power has direct effect on the competition to be faced by this sector. The message of the Prime Minister to alleviate the problems of SSI sector has not travelled to his own Cabinet colleagues. Ban on inter-state movement of petroleum products has also killed SSI units. Oil companies have also lost over Rs 500 crore due to this ban. SSI units have to face a bigger challenge from SAARC countries such as Nepal, Sri Lanka and Bangladesh. Nepal’s products have duty free access while others enjoy preferential access under
SANTA. In view of WTO and competition from these areas govt. should not lose time to announce the comprehensive policy on SSI. |
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Who pays for
KBC? TV game show Kaun Banega Crorepati — “KBC” compered by Amitabh Bachchaan has been going on ‘Starplus’ at the prime time for the last nine weeks. So far, it is understood that the prize money distributed by the Starplus is around 1.60 crore. If everything goes well with the participants, the average 15 questions can be answered by six participants in a week of four days programme. On this basis over Rs 54 crore could have been possibly distributed. Thus the saving from prize money alone is over 50 crore in this period. This costing it is believed must be in the minds of the Starplus game show promoters. The participants get three lifelines also to help them to give the answers correctly. It is observed that great Amitabh Bachchan’s efforts are to provoke the participants to use these help lines at the early stages so that the participants exhaust with the help lines when the prize money gets double with every question. This appears to be on the pretext of performing his duty which needs to be some what toned down for the fairness in the game show. Moreover, when the participants gets stuck up in an answer, Mr Bachchaan tells him that he will win so much if the answer is correct but in case the answer is wrong, he will loose so much. To win or loose is a gamble but here the participant has nothing to loose. With the costing as stated above, the Starplus pay the prize money not from its own pocket but charge heavy rates of Rs 10 lakh for every 30 seconds from the advertising companies during the Chhota Sa Break. With this calculation the average revenue per day is likely to be Rs 2 crore or over Rs 70 crore for nine weeks. It is these advertisers who pay for the heavy cost of advertisements who in turn pass on the burden to the consumers or shareholders. It is no guess who pays for “Kaun Banega Crorepati”. |
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Mera number
aa gaya VALSAD (Gujarat), Sept 16 — When the newspaper he was reading on a lazy afternoon flashed the very number inscribed on the crown-cap of his cola bottle, Babubhai Pujari blinked hard. Pujari, who runs a small street-side kiosk here had just won Rs 500,000 in Pepsi’s ‘Mera Number Ayega’ contest which has so far produced seven six-figure winners all over the country among 800 winners who have won Rs 10,000 and above in the contest. Pujari had participated in the contest — which involves matching numbers on the cola bottle crowns with those announced by the company — purely out of habit. “It was the will of god to reward me for the good deeds I have done in the past,” he told IANS. Only two months ago, Pujari had returned a heavy gold bracelet dropped by a customer at his shop by mistake. Pujari also cited how 10 years ago he had returned a bundle of Rs 10,000 to a customer who had left it at the restaurant where he was serving as a waiter. Pujari intends to put a sizeable portion of the prize money in fixed deposits to ensure a good education for his two-year-old daughter Shreya. This, he admitted was being done at the instance of his wife, Shakeela, who advised him to “keep cool” after hitting the jackpot. Pujari, who has participated in various contests earlier, says this was his first major win. “In this contest I narrowly missed the prize money of Rs 10 lakh by a single digit,” he says. While Pujari is back to his shop, enjoying his newfound status, his assistant is worried that the cold drink counter now attracts more customers than that selling betel leaf!
— IANS |
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Deposit campaign by SBI CHANDIGARH, Sept 16 — The State Bank of India, Zonal Office, (Punjab) Chandigarh has launched an extensive Deposit Mobilisation Campaign from September 15 to 29 in its 118 branches covering eight districts of Punjab and U.T. of Chandigarh Mr Prabhakar Sharma, Chief General Manager, Chandigarh Circle, initiated the process. On the very first day of the campaign, 650 new accounts have been opened and deposits mobilised to the tune of Rs 1.3 crore. Mr K.K. Mehra, DGM, spoke of the benefits as liquidity, growth and safety that the bank’s savings schemes will offer to the people. |
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NDDB to treble
milk procurement NEW DELHI, Sept 16 — The National Dairy Development Board (NDDB) has drawn up a blueprint for strengthening the cooperative dairy sector and triple milk procurement by 2010. Perspective 2010, as the plan is called, envisages that procurement by cooperatives will increase from the 157.8 lakh kg per day to 488 lakh kg per day by 2010. The number of dairy cooperative societies will increase from 84,289 to 129,480 while membership will increase from 106.28 lakh to 156.27 lakh. Milk marketing is expected to rise from the current 129.16 lakh litre to 385 lakh litre per day. The NDDB has also planned 150 additional projects ranging from expansion of existing processing facilities to setting up of major new dairy plants. |
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ISGEC wins CII trophy CHANDIGARH, Sept 16 (PTI) — The ‘Vidyut’ Quality Circle from ISGEC, Yamunanagar, today won the 13th quality circle competition organised by CII (Northern Region) at CSIO, here. The regional competition was a build up of the state level preliminary competitions that took place through the year as part of CII’s ongoing thrust towards strengthening the quality movement in India. The ‘Paras’ quality circle from Hero Honda Motors, Gurgaon won the first runner-up trophy and the second runner-up trophy was won by the ‘Chetak Quality Circle from Abhishek Industries, Barnala. A special rolling trophy was given to the ‘Jyoti’ quality circle from Gontermann Peipers India Ltd, Nalagarh. Dr B.C. Gupta, Secretary — Labour and Employment gave away the trophies to the winners. Dr Gupta said that the quality circle competitions are a platform for workers from different companies to share experiences, exchange ideas and get exposure to new ideas on quality and learn fresh approaches to problem solving. |
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Premji ‘Elcina Man of the Year’ NEW DELHI, Sept 16 (PTI) — Wipro chief Azim Premji was chosen for ‘Man of the Year’ award by the Electronic Component Industries Association (Elcina) for his invaluable contribution to Information Technology and becoming a role model for young entrepreneurs. Announcing this, the new Elcina President and Managing Director of Hyderabad based Kwality Group of Industries K. Vijay Kumar Gupta said Elcina had been a front runner in taking up the issues of the electronics industry and was keenly pursuing the IT Taskforce report on hardware with the government. “Elcina has been assiduously following up the hardware package embodied in the IT Action Plan II of the National Task Force on IT and Software
Development....our agenda ahead will be to push for a scheme that enhances velocity of business and allows bi-directional transition of manufacturing for domestic and export markets seamlessly,” Gupta said here. In other categories, first prize for exports went to Calcutta-based International Ferrites Limited; first for quality was bagged by TVS Electronics Ltd of Chennai; for research and development DGP Hindolay Industries of Pune bagged the first prize while for indigenous development of capital goods the first prize went to Elin Electronics of Ghaziabad. |
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Better days ahead for
Mastek THE last time I appeared in person on the CNBC stockmarket show from Delhi, which was a couple of months ago, I was asked to pick an ICE stock that I backed. My prompt response then was Mastek, which was then priced at Rs 1525. Having visited the company well before that and having met Ashank Desai, the promoter of this company, I had included this scrip in the portfolios of all our clients at around the Rs 1250 level. The prime reason for this decision was not only the company’s solid financial track record but also the quality of its personnel, which in my opinion is a crucial parameter for evaluating an IT company. That investors have already benefited from a price upswing of 100 per cent is most welcome, but in my opinion, better days lie ahead for this company. Given this background, I was hardly surprised when our business development head intimated me that Mastek has become the world’s first IT service company to achieve P-CMM level 3 certification for its offshore development centres and corporate functions in India. Mastek also happens to be the third organisation in the world to achieve this level after the US Army and Lockheed Martin of the USA. Mastek has been assessed by Ronald Radice who is the principal partner of Software Technology Transition based in the US and Ajay Batra who is consulting partner of Quality Assurance Institute (India) and is among the world’s 12 lead assessors in P-CMM. To provide guidance to organisations that want to improve the way they address people-related issues, Carnegie Mellon University’s Software Engineering Institute has developed the People Capability Maturity Model (P-CMM). Globally the companies that are pursuing the quest of P-CMM level 3 model are Boeing, Citibank and Ericsson, while the other Indian organisations working towards this are Infosys, Wipro, Tata Consultancy Service and Datamatics. Finally, as FII figures turned positive in August, the markets have risen and the mood is again upbeat. But the trick lies in getting out while the FIIs buy - to illustrate what I mean, let us flashback to February and March this year when the FII inflows seemed to grow larger by the day. Well, don’t we all know what happened thereafter? Think it over and make sure you stay one step ahead of the FII’s. To share a trade secret — that is the name of the game at the Indian bourses.
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MR MADU RAM, a police constable, had taken four life insurance policies. The first one was taken in January 1993 for a sum of Rs 28,000. Subsequently, he took three more policies: one in January 1995 for Rs 50,000, another in December the same year for Rs 25,000 and a third one in 1998 for Rs 50,000. A year later, during a parade he suddenly fell down and was decalred ‘brought dead’ by the hospital where he was rushed for treatment. LIC paid the widow, Rs 28,000 towards the first policy, but repudiated her claim on the other three on the ground that the insured had concealed the fact that he was suffering from ischemic heart disease (IHD) when he took the subsequent three policies. Ms Santosh Devi therefore sought the intervention of the Insurance Ombudsman, Delhi and Rajasthan. How did the Ombudsman sort out the case? Let us first see the evidence produced by LIC in support of its repudiation. After all, the onus probandi, in cases of allegations of fraudulent suppression of material facts, rests heavily on the party alleging fraud, namely the insurer. Well, LIC said the deceased had taken leave from work for 24 days in May/June 1994 on the ground that he was suffering from IHD. He was also taking treatment from private doctors for heart disease and in 1996, he had undergone cardiac investigations, namely ECG and coronary angiography and was known to have been taking tablet sorbitrate. He had also obtained medical reimbursement in 1996 for treatment related to the heart, but had concealed these information from the insurer in the policy document. The Ombudsman, after perusal of all the evidence brought before him and after consultation with an expert cardiologist, pointed out that Dr Makkar, who had given a certificate in 1994 in support of Madhu Ram’s leave application that he was suffering from IHD was a block level medical officer and not a heart specialist and in the absence of an ECG or any other clinical tests to prove IHD, Dr Makkar’s diagnosis could only be rated as an unsubstantiated conjecture. LIC’s second evidence that Madhu Ram was receiving treatment for his heart condition from a private medical practitioner was also unsubstantiated as the doctor was not produced for questioning and there were no test reports to corroborate LIC’s allegation. The Ombudsman also pointed out that barring the 24-day leave in 1994, Madu Ram had at no time taken long leave from 1990-96 which could indicate that he was suffering from any disease or heart condition that necessitated his staying at home. Nor had be claimed medical reimbursement till 1996. All these factors lead to the inevitable conclusion that Madu Ram had no knowledge of his heart condition at the time of taking the two policies in 1995, the Ombudsman said. As far as the policy taken in 1998 was concerned, the Ombudsman pointed out that there was evidence to show that in 1996, Madu Ram had undergone cardiac investigations and had also obtained medical reimbursement for related treatment and was taking tablet Sorbitrate. And the histo-pathological report had stated that the deceased had ‘healed infarct”. According to the medical expert consulted, the postmortem report indicated heart disease but hard evidence supporting the presence of coronary artery disease prior to taking the insurance policy in 1998 was lacking. However, the Ombudsman pointed out that the insured had suppressed the fact that he had heart problem, if not disease and had undergone coronary angiography on April 13, 1996, while filling the proposal form for the policy obtained in January 1998. And this could not be considered as a simple oversight on his part. The Ombudsman therefore upheld the rejection of the claim towards the policy taken in 1998. However, as far as the other two policies for Rs 50,000 and Rs 25,000 taken in January and December 1995 were concerned, LIC was unjustified in repudiating the claim, the Ombudsman held. The LIC should therefore pay the insured amount to the widow along with bonus and penal interest at the rate of 12 per cent per annum for unjustifiable repudiation and delay in meeting the bonafied of the death till the date of payment, the Ombudsman said. I have written about this particular case because primarily, it gives an insight into the working of the Ombudsman, his attempt to ensure that insurance companies do not unjustifiably deny a claim and his effort to minimize inconvenience to the claimant by holding the sittings not far from where the claimant lives (The Ombudsman went to Bikaner for the hearing) and asking the insurance company to deliver the insured amount through a responsible officer, at the doorstep of the claimant residing in a village. Awards such as these should certainly make insurance companies think twice before repudiating a claim.
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by A.K. Sachdeva Q: We are engaged in the business of purchase and sale of karyana goods on wholesale basis being a dealer registered under the Punjab General Sales Tax Act, 1948 and the Central Sales Tax, 1956. Kindly let us know on what grounds an inspecting officer can proceed to seize the documents during the course of search & seizure at the place of business of a registered dealer? Also clarify to what extent the seized documents can be retained by the sales tax authorities after inspection and seizure? Further can the legality of these proceedings be questioned by the affected party if the officer carrying out search and seizure does not follow the statutory provisions? — Som Nath Gupta, Ludhiana Ans: The provisions contained in section 14 of the Punjab General Sales Tax Act, 1948 provide complete answers to the questions sought to be clarified by the queries. Sub-section (3) of Section 14 plainly lays down, inter alia, If any officer referred to in sub-section (1) has reasonable ground for believing that any dealer is trying to evade liability for tax or other dues under this Act.....he may seize such book account, register or document as may be necessary.” Therefore the only power for seizure of the document of other papers available to the prescribed authorities is “reasonable ground for believing that any dealer is trying to evade liability for tax or other dues under the Punjab General Sales Tax Act. Unless this satisfaction is objectively arrived at by the inspecting officer he cannot legally acquire jurisdiction to seize the documents etc. As far as period of retention of documents seized is concerned, as per clause (a) and clause (b) of sub-section (3) of section 14, documents relating to current period can be retained for ten days and in event of documents relating to some other periods the officer is entitled to retain the same for sixty days from the date of seizure. And if the officer exercising the powers of search & seizure does not strictly follow the statutory procedure as laid down in Section 14 of the Act ibid, the aggrieved party can assail the legality of the proceedings by way of a writ petition under Article 226 of the Constitution of India in the High Court. Q: We are engaged in the business of iron and steel goods, machinery, its parts and accessories in Punjab as a registered dealer both under the Local Act as well as the Central Act. During the assessment year 1996-97 we furnished the periodical returns to the assessing authority declaring the turnover relating to our business. Two transactions involving local sales could not be erroneously declared in the returns while appropriate entries in the books of account were made. At the time of assessment we explained these facts in writing before the assessing authority. However the assessing authority levied upon us penalty under sub-section (7) of Section 10 of the Punjab General Sales Tax Act, 1948 for this unintentional mistake. The appeal against imposition of penalty is pending consideration before the appellate authority. Kindly advise if the assessing authority was right in taking rescoure to penalty provisions? — Anil Seth, Jalandhar Ans: No penalty under sub-section (7) of Section 10 can be levied simply because some transactions have not been declared in returns due to inadvertence. The fact that entries in question found place in the books of account of the dealer in proper manner has not been disputed and therefore mere omission to declare them in the returns does not give rise to penalty proceedings within the meaning of the aforesaid provisions of law. The assessing authority cannot therefore be said to have acted in accordance with the legal provisions as well as the principles of law laid down in this context by the Supreme Court in 28 STC 700. |
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Q: Whether keeping a person-stenographer on daily wage basis for 18 years is arbitrary? Ans: The Allahabad HC was dealing with this point in the case of Awadesh Kumar Yadav v Divisional Forest Officer, Manipur (2000-II-LLJ-544) as under: The petitioner has prayed for regularisation of his service as stenographer. Admittedly, the petitioner was appointed as stenographer on daily wage basis in March, 1981 and he has been in continuous service since then i.e. for more than 18 years. In the opinion of the HC, the State Government cannot act arbitrarily in the matter relating to temporary or daily wage employees. No doubt there is a principle in service law that a temporary employee has no right to the post, but this principle has to be considered along with the other legal principle that the State cannot act arbitrarily. In the case of Smt Menka Gandhi v Union of India (AIR 1978 SC 597) it has been held by a Seven-Judge-Bench decision of the SC that the State Government cannot act arbitrarily as arbitrariness violates Act 14 of our Constitution. In the opinion of the HC, therefore, to keep a person on daily wage basis for 18 years is wholly arbitrary. Hence, on the basis of facts and circumstances of the case, the HC held and directed that the petitioner be regularised within a month from the date of production of the certified copy of this order and he shall be paid regular salary thereafter. With the above observations, the petition was disposed of, and holding that employing a person as stenographer for 18 years on daily wage basis is wholly arbitrary and thus ordered his regularisation of service. |
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Saregama India LADIES and Gentlemen, the latest sound on the street is that the Gramophone Co of India Ltd (GCI), which has acquired a new name, Saregama India Ltd (SIL), is pressing ahead with plans to set up a 108-station network for FM radio. Initially, studios will be set up in Delhi, Calcutta, Mumbai and Chennai, and the broadcasting will be in Hindi, English, Bengali, Tamil and Telugu. SIL draws its new name, Saregama, from its music retailing web site, launched last year. Yeh news sun kar aap khushi se saregana!!! MTNL Finally the company has woken up and is servicing its clientele. It seems that the PSU is offering huge discounts and rebates to the corporate segment. Could its ‘Huge’ competition have something to do with this? Maruti Udyog So this company seems to be driving at full speed with its, product line expansion plan. It has recently launched the Rs. 8.5 lakh worth ‘Baleno Altura’ , a station wagon that is rumoured to be a Ford wagon look-alike. However, it still remains to be seen if ‘Maruti’ can save and regain their market share. Zee Tele Kaun Banega dus Crorepati? Zee Tele has recently launched plans for a game show worth Rs 10 Crore. The way these channels are launching such game shows, we think we would rather take our chances on them instead of the stock market. |
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Milkfed Vipin Sondhi Framesi Honoured |
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