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| Friday, December 1, 2000, Chandigarh, India   
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IMF approves $596 m loan for Pakistan Suzuki begins talks
on Maruti selloff Insurance Bill
introduced in Lok Sabha ‘Disinvestment is
not the answer’ Microsoft launches
Windows datacentre |
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| Reforms must precede liberalisation:
CII CHANDIGARH, Nov 30 — If the agricultural growth rate is to rise from the present level of 1.8 per cent to 4 per cent as proposed in the national agriculture policy and the country is to meet the WTO challenges, the government must initiate reforms in the hitherto neglected area of agriculture. Dabur’s insurance
plan put on hold
IPCL a dark horse
Infosys Tech eyes insurance sector Microsoft, Zap plan
tech skill transfer
Star nets 125 cr from KBC Rags to riches and back And cameras clicked
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IMF approves $596 m loan for Pakistan WASHINGTON, Nov 30 — The International Monetary Fund on Wednesday approved a new $ 596 million standby loan for Pakistan, which should help the country cope with liquidity problems and deal with debt arrears with creditor nations. The Washington-based lender said in a statement late on Wednesday that Pakistan had agreed on an economic programme with the IMF from now until September of next year and that $ 192 million of the funds would be available immediately. The IMF said that because Pakistan faced huge debt service payments and increasing capital outflows that the loan was needed “urgently” to help stem pressures on the rupee and restore reserves to better levels. With the new programme in place — which demands strict fiscal targets and a raft of key reforms — the IMF said the World Bank and Asian Development Bank would also consider making fresh loans to support Pakistan as would bilateral creditors and the private sector. Saeed Azhar adds from Karachi: Pakistan on Thursday welcomed the resumption of IMF aid but private financial analysts warned that the country would have to adhere strictly to the Fund’s terms. Ashfaque Hasan Khan, economic adviser to the Finance Ministry, told Reuters the multilateral aid was a “certification of good health’’ for the economic programme of the military government that seized power just over a year ago. “This is good for the country and will remove uncertainty. This is positive for the markets,” Khan said. The IMF said Pakistan will have to cut its budget deficit in 2000/2001 to 5.2 per cent of gross domestic product from 6.4 per cent in 1999/2000 by boosting tax collections, widening the tax base and holding to strict spending controls. News of the agreement, which had been expected, gave Pakistani stocks, and the local rupee currency, a small boost. Khan said the renewal of IMF funding will pave the way for agreement in December on rescheduling payments on Pakistan’s foreign debt. But a formal meeting of the Paris Club of bilateral creditors to approve a rescheduling is not expected until January. The central bank governor said earlier in November that Pakistan plans to reschedule $2.2 billion of debt payments after a previous rescheduling programme expires in December. The IMF said $192 million would be available immediately. Subsequent tranches depend on Pakistan meeting agreed targets. Pakistan has never completed any of its numerous previous restructuring agreements. — Reuters
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Suzuki begins talks
on Maruti selloff NEW DELHI, Nov 30 (PTI) — Representatives of Suzuki Motor Corporation (SMC) have begun discussions with government on disinvestment in the joint venture auto company Maruti Udyog (MUL), where the two partners have 50 per cent equity each. After consultations with their headquarters in Japan, SMC representatives met government officials here yesterday in connection with the latter’s proposal for divestment in MUL, official sources said here today. A high-level team of SMC is also understood to have arrived in Delhi today for continuing the dialogue, sources said, adding that ‘‘SMC communicated its willingness to discuss and we are positive about their response.’’ SMC’s representative and Director in MUL Junzo Sugimori was not immediately available for comments. Cabinet Committee on Disinvestment (CCD) had decided earlier this month to constitute a Committee of Secretaries to explore all possibilities with SMC for optimal disinvestment in MUL. ‘‘SMC team is open to discussions on the various alternatives available to the government to disinvest its stake in the joint venture company’’, sources said while pointing out that government had given at least five alternatives to the Japanese partner on the issue. Another round of discussions is slated to take place in a day or two on the same issue. The terms of the JV agreement stipulate that both parties have to seek the written consent of the other party before effecting a change in the shareholding pattern in the company, which currently has about 55 per cent share in the country’s car market. The government had suggested that either SMC should buy out the other partner in the company or vice versa, sources said, adding that other options included selling it to public through initial public offer or to financial institutions. The government also proposed that a third party could be given the entire or part stake, sources said. Sources said that SMC’s response should be fomalised soon as the issue was slated to be taken up at the meeting of the Cabinet Committee on Disinvestment, headed by Prime Minister Atal Behari Vajpayee, on December 23. At the last meeting CCD had asked the CoS, which included Secretaries in the Ministries of Heavy Industry, Disinvestment and Expenditure, to complete consultations with SMC within a fortnight. However, the process got delayed on account of certain differences between the Ministries of Heavy Industry and
Disinvestment.
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Insurance Bill
introduced in Lok Sabha NEW DELHI, Nov 30 — The Government today introduced in the Lok Sabha the Insurance Laws (Transfer of Business and Emergency provisions) Repeal Bill, 2000 seeking to repeal three acts which had become redundant. The House also approve the Immigration (Carriers’ Liability) Bill imposing a penalty of Rs one lakh per person on Carriers for bringing passengers into India without valid passport. Another Bill that provides for infusion of private sector investments in airports and help in their restructuring was also introduced in the Lok Sabha. The Insurance Laws (transfer of business and emergency provisions) Repeal Bill seeks to repeal the Allianz Und Tuttgarter Life Insurance Bank Act of 1950, the Life Insurance (emergency provisions) Act of 1956 and the General Insurance (emergency provisions) Act of 1971. The Union Finance Minister, Mr Yashwant Sinha, said the Acts were being repealed as they had ceased to serve any purpose and had become redundant. Reacting to remarks by Mr Basudeb Acharia of the CPM that with the passage of the
Bill, both LIC and GIC would be weakened and their functioning affected, Mr Sinha said the apprehensions were “entirely unfounded”. He said the Commission on Review of Administrative Laws, set up by the Centre in 1998, had recommended repeal of these Acts. Another Bill that came up in the House was the Immigration (Carriers Liability) Bill, which was earlier cleared by the Rajya Sabha on November 24. The House passed the Bill after a brief debate. Moving the Bill in the Lok Sabha, Minister of State for Home, Mr I.D.Swami said a number of passengers land up at the Indian airports without valid passports and their number was 815 last year. They were also creating problems for the immigration officials. Other countries have similar legislations imposing penalty on erring Carriers. The government also introduced the Airports Authority of India (Amendment) Bill that seeks to enable the AAI to lease airport premises to private investors and state governments with the prior approval of the Centre.
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‘Disinvestment is
not the answer’ CHANDIGARH, Nov 30 — Students of MBA first semester of University Business School, Panjab University, organised a seminar on “Corporate performance in the post- liberalisation era” here yesterday. Dr Manoj Kumar Sharma, Organising Secretary of the seminar, said that public sector companies have faired much better in social performance parameters while private sector companies performance in the nineties has been good on economic parameters but their performance on social indicators has been remarkably poor. Mr C.N. Dhar, Executive Director, HMT, Pinjore, stressed that socio-economic environment must be properly studied by the corporate world if they have to perform well in the coming years. Mr Anand Kumar, Senior Vice-President, ICICI Bank, stressed the need for public sector banks to recast their objectives in the liberalisation era, otherwise banks will not be able to compete with private sector banks. Prof S.K. Goyal, an eminent economist, stressed that Indian public sector enterprises are govt-controlled companies and disinvestment is not the answer, the real solution lies in restructuring their management. Prof M.R. Aggarwal said that the post-liberalisation era is full of uncertainties and the corporate sector has to tighten its belts in order to survive in the near future. Mr Ranjit Singh, Vice-President, Groz Beckert Asia, said that companies must stress on their core competencies and those companies normally perform well. Prof K.K. Uppal of UBS stressed that family-run business has to really recruit professionals in order to compete in the new environment. Dr B.S. Ghuman said that the privatisation programme must be undertaken with caution as worldwide the benefits of privatisation throughout have been mixed. Mr P.K. Verma, Executive Director, PTL, Mohali, said that India has many advantages over other countries but “we lack badly in our work culture in organisations and we need to improve it.” Mr R.K. Khanna, from HMT, Pinjore, said that HMT has to sacrifice many social objectives because of the pressures to reduce mounting costs of the company. Dr P.K. Vasudeva stressed that with the opening of the economy, many corporate houses have benefited. Prof Satish Kapoor said that with the opening of the economy, exports have increased as companies have become cost-effective. Prof R.P. Gupta, Chairman, UBS, highlighted the need for cost management exercises, which have led to substantial reduction in companies intake of management graduates. |
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Microsoft launches
Windows datacentre NEW DELHI, Nov 30 (PTI) — Microsoft and Compaq today announced the launch of Windows 2000 datacentre programme in India to provide innovative technology and broad alternatives to expensive proprietary systems. “The Windows Datacentre programme would provide Indian enterprises mission-critical software solutions coupled with industry standard hardware and support,” a Microsoft release said here. The Windows 2000 Datacentre server, is a product optimised for large datawarehouses, performing econometric analysis, large scale simulations in science and engineering, conducting online transaction processing and server consolidation, it added. |
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Reforms must precede liberalisation:
CII CHANDIGARH, Nov 30 — If the agricultural growth rate is to rise from the present level of 1.8 per cent to 4 per cent as proposed in the national agriculture policy and the country is to meet the WTO challenges, the government must initiate reforms in the hitherto neglected area of agriculture. Reforms must precede liberalisation of the agricultural sector with the WTO agreement coming into force in April next year. Stating this here today at a press conference on the eve of the opening of Agro Tech, Mr Gokul
Patnaik, Chairman of the CII Agri Business Sub-Committee, listed the CII agenda for agriculture reforms: (a) lift all controls on stocking and trading in all agricultural commodities; (b) abolish levies and credit margins on agricultural commodities which hit farmers adversely; (c) rationalise the plethora of taxes and fix the upper limit so that the aggregate taxes on agricultural products are not more than 4 per cent; (d) all controls on sugar must go; (e) subsidies must be targeted; (f) dereserve products like groundnut and the manufacture of farm implements; and (g) introduce future marketing in major commodities. Agriculture, said Mr Patnaik, should not be treated as just sustainable but a commercial activity. Mr Vinayak Chatterjee, Chairman, CII (NR), said the next burst of growth would come not from technology but from reforms in agriculture which, to start with, should focus on the pricing of inputs and outputs, trading of commodities, investment in rural infrastructure and institutional reforms. He said the national agricultural policy, which envisages 4 per cent growth in the next two
decades, attempts to grapple with all that needs to be done. Instead, a time-bound action plan is needed. The economy, he said, is run on three cylinders: the manufacturing sector on which the reforms have focussed, the services sector which has grown by default and agriculture which has remained orphaned, untouched by reforms. Mr I.S. Paul, Chairman, CII Chandigarh Committee, stressing the need to check wastage, said fruits and vegetables worth Rs 1,500 crore, equal to the total consumption of the UK, are wasted
annually. The UK which imports 30 per cent of its fruits and vegetables from Kenya, can be an ideal export destination for Punjab. The growth rate of both Punjab and Haryana, he noted, has lagged behind the national growth rate . Earlier, Mr Piyush Bahl, Regional Director, CII, explained the arrangements made for the Agro Tech. |
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Dabur’s insurance
plan put on hold NEW DELHI, Nov 30
(PTI) — Dabur (India) Ltd today said it has temporarily “put on hold” plans for foraying into the insurance sector following the break-up of its alliance with US insurance major
AllState. However, the company has kept its options open and is scouting for a suitable foreign partner. “We have for the time being put on hold our plans to foray into the insurance sector,” Vice Chariman and Managing Director of Dabur (India) Ltd
G.C. Burman told PTI here. Mr Burman said the proposed alliance with AllState could not fructify on account of US company’s huge exposure in the failed Korean Cheabol Daewoo Motors. AllState has withdrawn plans for the Indian venture following losses incurred in insuring Daewoo. Dabur-AllState, along with ICICI-Prudential Life, had applied for insurance licence the first day Insurance Regulatory and Development Authority (IRDA) had opened windows for accepting applications. The joint venture company was also awaiting clearances from the Registrar of Companies by December 2000. Despite framing a business model that included launching four life insurance products in the first year of operations, and plans of jointly investing about Rs 200 crore within the first few years, AllState withdrew its 26 per cent stake from the venture. Under the changed circumstances, Burman said Dabur had been approached by a large number of global insurance players for a possible tie-up in the insurance sector. “We are evaluating various options,” he said, adding although the company withheld its insurance plans, “the sector is being regarded as lucrative.” |
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by Ashok Kumar IPCL a dark horse THE Indian markets are in a bounce-back mode although it still has to weather several technical barriers over the next few sessions before it can be hailed as a rally. Operators and increasing their long positions, seemingly on the calculation that the mutual funds which are reportedly sitting on cash will enter the market in a big way shortly. Here again, historical evidence suggests that pre-supposing anything in the market-place often proves costly. Trading opportunities, however, are still there for the taking and traders with a bearish sentiment could consider short positions at the counters of Infosys Tech at Rs 7541 (cover up at Rs 7416) and Wipro at Rs 2628 (cover up at Rs 2498). Bull operators could consider taking up long positions at the counters of Rhone-Poulenc at Rs 801 (square up at Rs 824) and Cadila Healthcare at Rs 150 (square up at Rs 162). The dark horse pick of the week is IPCL. The optimal strategy for this week would be to book partial profits.
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Infosys Tech eyes insurance sector NEW DELHI, Nov 30 (PTI) — Close on the heels of launching its centre in London, Nasdaq-listed Infosys Technologies is drawing up plans to consolidate its software development operations over the next few months before embarking on the next phase of expansion involving setting up new facilities. The infotech major has also evinced interest in developing software for the newly opened up Indian insurance market, in its bid to explore new areas of business, Infosys Chairman, N.R. Narayana Murthy, told reporters here. ‘‘We have decided to consolidate our development operations in India and overseas for the next few months till they reach a capacity of up to 2500 professionals,’’ he said. The company currently has eight development centres in India including those in Mohali, Hyderabad, Mangalore, Bangalore, Mysore and Chennai. ‘‘Infosys has set up a development centre in London last month and one in Toronto last year,’’ he said. The ‘‘proximity’’ development centres in London, California and Boston supports front end development with back-end operations in India. The company has decided to focus on mobile commerce, banking and insurance softwares apart from the existing areas of operations like broad-band wireless and information systems. ‘‘We have the best presence among all software companies in the Indian banking sector. We will look at insurance as well,’’ Murthy said, adding the company already has presence in the international insurance sector. Microsoft, Zap plan
tech skill transfer NEW DELHI, Nov 30 (PTI) — Microsoft and Zap Infotech today announced they have entered into a technical skill transfer agreement for development of new course curriculum around “.Net” platform and setting up of a Centre of Excellence”. “Zap has entered into an agreement with Microsoft, primarily to develop new course curriculum around the latters’ “.Net” strategy. The agreement would also envisage setting up of a centre of excellence,” Sanjeev Mathur, Head — Western Region (operations) of Microsoft said here. The agreement for the technical transfer would allow Zap to absorb skills on Microsoft e-commerce and mobile computing platform and development toolsets, he said, adding that the software giant would also transfer the design and architecture of solutions using WinCE. As part of the agreement, Microsoft would further review and provide technical updates on Zap course curriculum, he added. The agreement also envisages establishment of consulting and training facilities around Microsoft’s web products in Mumbai. It would also set up exclusive test labs in Mumbai, Bangalore, Delhi and Calcutta where beta releases of products like Microsoft’s mobile information server 2000. |
Star nets 125 cr from KBC NEW DELHI: Buoyed by the unprecedented success and revenue generation by Kaun Banega Crorepati (KBC), Star TV will break even sooner than the 2002 target it had set for itself in India. KBC, which generates a gross advertising revenue close to Rs 2 crore per episode with 10 minutes of ads, is the sole reason for this optimism, Star TV’s officials say the ad rates of each spot on KBC have been hiked from 2 lakh per 10 seconds earlier to Rs 3 lakh now “but the time period for total advertising on the programme has been maintained at 10 minutes”. “Taking an average of Rs 1.5 crore gross revenue generation per episode, at 84 episodes, of KBC which have been aired till now, the channel has earned gross revenues of over Rs 125 crore from KBC alone,” the said.
— PTI Rags to riches and back BRUSSELS: Speech technology developer Lernout & Hauspie (L&H), once the toast of Europe’s high-tech sector and the pride of its Belgian home town, has fallen from grace with a nasty bump. The software firm that started life nestled in farmland and went on to take Wall Street by storm — capturing investors’ imagination with its voice recognition technology that could motor computers — filed for protection from its creditors on Wednesday after legal and financial wrangles brought it to its knees. L & H was the brainchild of its namesakes, Pol Hauspie and Jo Lernout. Such was their drive to get the technology noticed that they went door to door signing up farmers as shareholders years before the tables turned and fund managers were lining up outside L & H’s door. “They used to call themselves the biggest beggars of western Europe,’’ said one scientist who helped develop some products for L & H , jointly founded and chaired by the two men. “They were good salesmen. They exuded ... A tremendous belief in the future of the technology,’’ he said. The company’s growth accelerated in recent years through a series of acquisitions, culminating last spring with the purchase of Dragon Systems Inc. and Dictaphone Corp., its two biggest deals. The acquisitions secured its position as a leader in dictation, transcription, and voice recognition. But the success story began to unravel earlier this year as news reports questioning its Asian revenues and other accounting practices opened a can of worms. A U.S. Regulatory probe into how L&H booked sales later began, throwing the company into its worst crisis since its launch in 1987.
— Reuters And cameras clicked CHANDIGARH: Tricon, which runs 15 Pizza Hut restaurants in India, is contemplating to open three outlets in Punjab — at Ludhiana, Jalandhar and Amritsar — apart from the one at Chandigarh. This was indicated by Mr Raghuvesh Sarup, Senior Brand Manager of the company, who was in Chandigarh on Wednesday as part of the company’s nation-wide launch of “The Italian” crust. How is Pizza Hut different from Dominos, its MNC rival? Said Mr Sarup: “Our main strength is on premises service, while Dominos chiefly caters to families at home. Price-wise, both are almost at the same level, but Dominos starts at the lower end with a cheese pizza at Rs 49 whereas the Hut pizzas price range begins at Rs 75. As Mr Sarup was briefing the press persons, in walked a couple of photo-journalists who brought along a few models for a photo session. Immediately, the table was set, choicest dishes were brought in and the models were told to look “natural”, and the cameras clicked.
— TNS |
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