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| Tuesday, December 12, 2000, Chandigarh, India   
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New Electricity Bill on the anvil: PM Golden Forests, IT
Dept lock horns SBI to offer Internet
banking in 4 months Exports on the rise Cheap farm imports worry four ex-PMs |
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| ‘Livelihood
security box’ needed NEW DELHI, Dec 11 — Noted agricultural scientist M.S. Swaminathan today suggested that the government should propose inclusion of a concept of livelihood security in WTO negotiations to protect Indian farmers’ interests.
Why the gurus often get it wrong Depression: how not to treat it
Nasdaq and FIIs back in action
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New Electricity Bill on the anvil: PM NEW DELHI, Dec 11 — The Prime Minister, Mr Atal Behari Vajpayee, today said a new Electricity Bill was in the offing to keep up with the changes in the country’s power scenario. “In order to generate resources for the development of the power sector, Electricity Acts have been amended to pave the way for the entry of private investors and formation of independent regulatory bodies at the Centre and in the state. A new Electricity Bill is on the anvil in this regard” the Prime Minister said while inaugurating the silver jubilee function of Central Electricity Authority. The Prime Minister pointed out that at the time of Independence, India had a power generation capacity of a mere 1,300 MW. Today the installed power general capacity is one lakh MW. The Central Electricity Authority has played a significant role in bringing about this nearly eighty-fold increase in India’s power generating capacity, he added. The Prime Minister said India’s per capita consumption of electricity was among the lowest in the world. Nearly 80,000 villages do not have access to power. The number of households that have electricity is below 50 per cent. Saying that the power sector was highly capital intensive and government alone cannot meet its demand for funds, Mr Vajpayee added that efforts were on to rope in the private sector and simultaneously restructure the existing public sector power establishment. Some states have already moved in this direction. Others are being encouraged to undertake power sector reforms so that production and supply become commercial enterprises that are self-sustaining even while generating power, he said. The Deputy Chairman of the Planning Commission, Mr K.C. Pant, said the phenomenal boom in information technology (IT) would have to be factored in by planners in the power sector.
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Golden Forests,
IT
Dept lock horns CHANDIGARH, Dec 11 — A legal stand-off between the Income Tax Department and Golden Forests (India) Ltd is building up which may adversely affect the interests of the Golden group investors if the tax authorities happen to prevail. The issue is: should Golden Forests deduct tax at source from deposits made by its investors? A Golden Forests investor’s deposit gets doubled in three and a half years. Is this agricultural income which is tax free? In a notice issued to the company, Ms Saroj Deswal, Joint Commissioner of Income Tax, Chandigarh, claims that “the amount invested is not collective investment but these are deposits made by the investors to get very high rate of tax-free interest promised by the company”. The Income Tax Department has imposed a Rs 23 crore penalty on the company for not deducting tax at source. Explains the Joint Commissioner: “No tax is deductable on the repayments of deposits but TDS is to be deducted on the interest payments if any to the depositors, as per Section 194A of the Income Tax Act, 1961.” Golden Forests, it is learnt, plans to file a writ petition in the Punjab and Haryana High Court to seek classification with regard to the nature of funds collected by the company from investors. When contacted, Mr A.L. Syal, legal adviser to the Golden group, said SEBI (Securities and Exchange Board of India) has treated the collections as collective schemes under Collective Investment Rule 1999 made under the SEBI Act whereas the Income Tax Department has specifically pointed out that funds collected by the company fall under Section 58-A as deposits and has required the company to deduct TDS. The company treats the investor’s income as agriculture income. The company, he said, was allowed to carry on the work of agricultural activities as per the memorandum and article of association. The RBI has classified it as “non-banking and non-financial company”. Does the company violate the land ceiling law? A few months ago Punjab Chief Minister Parkash Singh Badal had ordered a vigilance inquiry into this aspect. The company claims that it purchases land from its own funds. After preparing the land for plantation and agricultural activities, it makes a unit of land offer to the public for investment for the purchase of land units. Thus a lien and a charge are created in favour of the investor in the records of the Registrar of Companies. Each
investor ownes a unit of land. When asked how safe is the public investments at this stage, a company spokesman said: “At present the company holds property worth Rs 1,500 crore against the liability of about Rs 800 crore. The company has already started alloting land units to investors.” |
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SBI to offer Internet
banking in 4 months CHANDIGARH, Dec 11— Geared up to meet the competition in the banking industry, the State Bank of India will be providing Internet banking in 100 branches within the next four months and will also be fully networking its 350 branches at 42 centres in the country by March 2002. This was stated by Mr Janki Ballabh, Chairman , SBI here today. Mr Ballabh, who was here to attend the local board meeting of Chandigarh circle of the bank to review its performance said that the bank is
focusing on retail banking and providing value added services to its customers to meet the stiff competition in the banking industry. He said that in the next phase of the plan of computerisation, all the 2,500 branches of the bank will be computerised which will account for 75 per cent of the bank’s business. The bank will invest Rs 570 crore for the same. The bank will also install 1000 ATMs by March 2002. SBI will shortly open an NRI branch at Hoshiarpur in addition to the already existing branches at Chandigarh, Jalandhar and Phagwara. Regarding the issue relating to amalgamation of the associate banks of SBI, Mr Ballabh said that a proper strategy will be framed to solve the issue and any decision regarding it would be taken only after holding talks with the representatives of these banks. He also said that SBI is planning to venture into insurance business for which the vast pool of trained manpower of the bank will be utilised. Regarding NPAs of the bank, Mr Ballabh said that these stood at 15 per cent on gross basis and bank is in the process of recovery of doubtful and loss assets. |
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Exports on the rise NEW DELHI, Dec 11— Most of the important sectors are doing well in exports during the current year, according to latest official data. Exports of ores and minerals have recorded an increase of 49.6 per cent in dollar terms; engineering goods 30 per cent; electronic goods 27.3 per cent; leather & leather manufactures 25.4 per cent; chemicals & related products 21.4 per cent; textiles 19.5 per cent; marine products 16.8 per cent; gems & jewellery 8.3 per cent; and carpets a growth of 2.9 per cent during April to September, 2000-2001 over the corresponding period of last year. A number of policy measures were taken during the year to boost exports including sector — specific measures like the important steps taken to enhance export growth this electronic filing and online processing, better neutralisation of indirect taxes on imports, and simplification of procedures. Steps have also been taken to promote India’s exports through multilateral and bilateral initiatives, identification of thrust sectors and focus regions. Downward trend in exports of some items such as plantations, agri and allied products, project goods and sports goods have been due to international factors, uneven supply of exportable surplus of items like agriculture and allied products and infrastructural constraints. |
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Cheap farm imports worry four ex-PMs NEW DELHI, Dec 11 —Four former Prime Ministers have voiced grave concern at the growing unrest among the agricultural community over the prevailing paddy crisis and the imports of farm products under the World Trade Organisation (WTO). Last week Mr V.P.Singh, Mr I.K.Gujral and Mr H.D.Deve Gowda held consultations on the course of action at the residence of Mr Chandra Shekhar here with Agriculture Minister Nitish Kumar along with and eminent agriculture expert, Dr M.S. Swaminathan. The former PMs questioned how the Indian farmers could face the onslaught of cheap and subsidised farm imports from the developed countries. Already cheaper imports of edible
oils, skimmed milk powder and commodities like coconut, apple and grapes had made the domestic farmers feel the impact in shape of depressed prices and no takers for their own products. The former PMs were in agreement that the WTO policies have led to an unrest in several parts of the country forcing the political leadership to voice concern. The growing farming crisis has already witnessed a week-long debate in Parliament, besides many of the Chief Ministers personally conveying this to Prime Minister A.B.Vajpayee. Andhra Pradesh Chief Minister Chandrababu Naidu had used his political clout to force the Prime Minister to concede the demand relating to procurement of paddy by the FCI while Bihar, Karnataka and Orissa too have voiced concern over the non-lifting of surplus paddy, as a result of which their farmers have been forced into distress sale. Viewing the current turbulent farm
scene, the former PMs were curious to know from the experts how long the crisis would last? Whether the WTO agreement will provide opportunities to Indian farmers to be globally competitive and find export avenues? Whether the lifting of Quantitative Restrictions (QRs) from April 1, 2001, would flood India with food imports thereby throwing out small and marginal farmers from agriculture?. The former PMs were in for a surprise when the experts explained that the quantum of agriculture subsidies in the USA and European Union (EU) were in reality increasing while India has promised to open up its trade barriers for 825 farm items by April next year. In the past two years, instead of reducing subsidy, the USA had provided a total of $ 22 billion (Rs 90,000 crore) support to its 900,000 farmers. And these subsidies are not to be reduced under the WTO because these remain protected under a “Green Box”, which is exempted from the subsidy reduction programme. — UNI |
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‘Livelihood
security box’ needed NEW DELHI, Dec 11 (PTI) — Noted agricultural scientist M.S. Swaminathan today suggested that the government should propose inclusion of a concept of livelihood security in WTO negotiations to protect Indian farmers’ interests. Inclusion of a “livelihood security box” would give countries like India an option to deny import of food items to protect livelihood security of farmers and the poor, Mr Swaminathan told reporters here on the eve of the five-day Indian Science Congress, which has been themed “Food, Nutrition and Environmental Security”. The WTO currently has two boxes — “Blue Box”, under which farmers in countries like the USA are given compensation in terms of money for agreeing not to produce certain items for management of production, and “Green Box” under which farmers are supported in the form of services like insurance, he said. The country should not slacken its investment in public research as it would harm small farmers. Capital investment in agriculture has already fallen from about 18 per cent in the first two-three five-year Plans to 9 per cent, he said. The congress, which begins on January 3, will be attended by nobel laureate Norman Borlaug, six recipients of the World Food Prize. |
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Why the gurus often get it wrong THE deluge of management books is unceasing. But are they teaching us the right lessons? They promise to reveal the secrets of being a great change agent. Their prescriptions are usually pretty similar and seem sensible. They tell us successful managers set ambitious goals, build a sense of purpose, trust their people, invest in the future, and so on. They are also alike in tone, favouring the missionary, you-can-do-it style, pioneered by Dale Carnegie’s How to Win Friends and Influence People. For example, this month’s tome from top guru Gary Hamel exhorts managers to chant: “I am no longer a captive to history. Whatever I can imagine I can accomplish.’’ But if there is one cause of scepticism, it is how bad these books have been in their choice of paragons. The most famous example of this was the Peters and Waterman book, In Search of Excellence, which triggered the current publishing boom. They carefully chose the 40 firms that had been the most outstanding performers in the past decade and from this sample identified 12 golden rules of management. Unfortunately, a decade later, two-thirds of these excellent companies had gone bankrupt or been taken over. It is a trap that all these books have fallen into. For decades Peter Drucker held up beleaguered British retailer Marks & Spencer as the world’s best managed company. Past books have extolled the greatness of Saatchi & Saatchi, IBM, Hanson, GEC, or, until the recent crash in internet stocks, the virtues of Amazon, Priceline and Lastminute.com. Why is success so fleeting? Why do the gurus get it so wrong? There are some fundamental reasons why success normally soon goes sour. Companies achieve outstanding growth and profits when their assets exactly match the requirements of the market. But as technology changes the environment, the firm’s assets cease to match and earn a return. In fact these assets can easily become liabilities. Even when change is less dramatic, competitors copy and eat away at a leader’s advantage. Studies show that the normal maximum time a firm keeps an advantage that enables it to earn a return above its cost of capital is seven years. So even when companies survive long term, such as Pilkington or ICI, their returns generally deteriorate. Investors would have done better getting their money out. What does all this mean? The cause of corporate failure is not always due to poor management. Firms fail when their luck runs out or when environmental change and competition erode the value of their assets. The guru guides that say managers can achieve radical change are creating a damaging myth. As BT (British Telecom) has belatedly recognised, in times of great change, managers are better off squeezing cash out of their mature businesses and splitting off their growth businesses for others to develop. A gung-ho belief that managers can take companies into leadership positions in different, mutually conflicting markets is not one on which to bet. — The Guardian
Depression: how not to treat it LONDON: The number of people taking antidepressants has more than doubled in the past 10 years. How much they are actually being helped is a matter of some debate. Most doctors say that only around 70 per cent of those who take antidepressants actually receive any benefit from them, and that without some form of cognitive therapy used alongside them, the majority of patients will relapse once the treatment is over. This is particularly true for those with mild to moderate depression where the biological link is likely to be less intrinsic to the condition. Says Dr Iain McGilchrist: “Determining true depression takes a lot of investigation — problems such as alcoholism, anxiety disorders or even physical problems such as disorders of the thyroid can all hide behind depressive symptoms, but the average doctor can’t find all that out in the time available”. “There is a distinction between depression and unhappiness. Depression is an illness, it’s pathological and it’s unhealthy — unhappiness is a normal response to a bad situation.’ Charles Medawar says that the definition of what depression is and therefore when it should be medicated has changed dramatically over the last 10 years.‘So anti-depressants can be prescribed for a problem like grief as well as for a more severe affliction like clinically defined depression.’ Obviously this doesn’t mean that it is always wrong to prescribe drugs. ‘For people with severe depression antidepressants are often the only answer,’ says Dr McGilchrist. ‘And for those with even mild to moderate true depression, antidepressants can help break the cycle of despair and allow people to respond to cognitive therapy’. — The Observer |
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Nasdaq and FIIs back in action RIDING piggyback on anticipation of excellent earnings by the software sector in the third quarter and of an announcement of fund allocation by FIIs during the current month, bulls made a consistent bid to take control of the market focussing their attention to Indian stocks. Nasdaq and increased FII activity were the additional driving forces. The futures rate of Nasdaq composite index that spurted by about 165 points last weekend was ruling firm during the session and in turn, indicated fresh rally in technology stocks on Wall Street. FIIs made net purchases in IT stocks like Silverline. Satyam Computers, DSQ Software and Pentamedia Graphics. South East Asian market like Hongkong, Singapure and Tokyo also exhibited a strong trend aiding the sentiment. ITC continued its upward march and spurted to close at the day’s high of Rs 881, showing a smart rise of Rs 26.90 following sustained buying by some knowledgeable circles and speculators after reports that the company had raised cigarette prices. Reports that Satyam Computer had filed its prospectus for getting its ADRs listed on the New York Stock Exchange too buoyed trading sentiments especially in IT stocks. Today’s rally was broad-based. Old as well s new economy technology stocks were the centre of brisk activity”, said a DSE broker. BASF India’s board on Monday resolved to transfer the textile dyes business of the company to Dystar. BASF told the National Stock Exchange that it will receive a total compensation of Rs70.16 million for such transfer plus the value for the finished goods. ICICI Bank, BoM merger ratio of 2:1 cleared: The boards of ICICI Bank and Bank of Madura at their separate meetings at Mumbai and Chennai on Monday approved the scheme of amalgamation which envisages a share exchange ratio of two shares of ICICI Bank for one share of BoM. The scheme of amalgamation will be placed for approval at the meetings of shareholders of the two banks on January 19, 2001, and will be subject to approval of the Reserve Bank of India. SOL Pharmaceutical’s CMD to be prosecuted: The Department of Company Affairs has ordered prosecution on Hyderabad-based SOL Pharmaceuticals’ Chairman-cum-Managing Director C Chandrasekhar Reddy for violating the Companies Act by not transferring unpaid dividend to the Central Government’s general revenue account in 1993-1994 and 1994-1995 and for not appointing a whole-time Company Secretary despite having a paid-up capital of more than 50 lakh. ABB has bagged orders worth Rs 10.3 crore for supplying “alpha” meters to BEST. The order will be executed by the first half of 2001. ABB had also booked orders for energy meters from the electricity boards of Tamil Nadu, Karnataka, West Bengal and Andhra Pradesh. Grasim plans to come up with Design Studio in Delhi while preparing for a wide spectrum of new product launches under the Graviera brand next year. Grasim’s unit Bhiwani Taxtiles Mills, which owns the Graviera brand, is planning to come up with ready-made garments in the next fiscal, a company official told reporters in Delhi at the launch of its winter fabric “Kool Wool”. — Agencies
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