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| Sunday, December 17, 2000, Chandigarh, India   
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Change
mindset of bureaucracy: PM Govt steps up reforms
process ST, octroi
hinder industrial growth Last
attempt to save Punwire Daewoo
check-up camp Pak to impose 30 pc
duty on Indian sugar |
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| Wipro
to focus on Europe MUMBAI, Dec 16 — Wipro Ltd will focus on Asia-Pacific and European region markets to broadbase its business, Azim Premji, Chairman and Managing Director has said. RBI rules out rate
cut Zee
Network reorganises businesses
Media
stocks: time to book profits
by Pushpa
Girimaji
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Change mindset of bureaucracy: PM NEW DELHI, Dec 16— The Prime Minister, Mr Atal Behari Vajpayee, today called for a change in the mindset of the bureaucracy saying the system of implementation of the reforms agenda was tardy. Addressing the 73rd annual session of
Ficci, the Prime Minister said “our people are impatient for results. The government machinery, however, shows no such sense of impatience and urgency. Saying that the government was not lacking in political will to carry forward the reform process, he said though the senior levels of the bureaucracy were wedded to the reforms agenda, he was disheartened that the overall system of implementation still worked with the same old mindset. “A mindset in which there is no transparent accountability and drive to meet stipulated targets and deadlines,” he added. Mr Vajpayee said if the experience of the past 10 years has taught any lesson, it is that reform of the implementation system must be made an integral part of the reforms process itself. To speed up reforms, the Prime Minister said that a strategic management group in his office has started working right earnest. He said the government was committed to carry forward the next and more difficult phase of reforms and these included removing all the remaining bottlenecks to the faster growth of infrastructure. Commenting on the economy, the Prime Minister said the economy continued to show a mixed picture, where there were many
positive indicators and several areas of worries. On the negative side, he mentioned the problems of unmet demand, and excess capacity in some segments. He referred to the widespread concern about the impact of dismantling of quantitative restrictions and the high cost of finance for Indian business. The problem is compounded by persistent weakness in infrastructure, which further added to the cost of doing business in India. Mr Vajpayee
mentioned that the question of downsizing of government continues to be a source of worry as it is a part of the non-productive expenditure. The government had received the recommendations of the Expenditure Reforms Commission and it has been laid out that a timetable and milestones must be set for each department to reduce the sanctioned strength of their staff at least by 10 per cent by 2004. He said the government also required a voluntary retirement scheme on the lines of government-run companies. “We also need to actively encourage educated people to look for private sector jobs or to set up their own businesses rather than somehow trying to secure a government job”. Mr Vajpayee said there was a need to modernise the labour laws for the larger benefit of the economy. Laws also need to be unified and made more harmonious. The Prime Minister also urged the Indian industry to adjust itself to the forces of global competition. Many manufacturing industries for instance have not significantly improved their production process to make good quality products at affordable prices to enhance consumer satisfaction. This should change. He said the industry should spend more on research and development, adopt high standards of transparency, disclosure and corporate governance to sustain investor and shareholders confidence. He also asked the industry to play a more pro-active role in discharging its social responsibility. Indian business should set aside a significant part of their earnings as well as human resources to improve the conditions of education, healthcare, sanitation and community welfare.
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Govt steps up reforms process BANGALORE, Dec 16 (PTI) — The second generation of economic reforms are “by and large” in place in India and it’s being accelerated. Finance Minister Yashwant Sinha said today. Sinha told reporters here that the government is accelerating the reforms process. “If you look at the legislations that we have introduced, we are going to introduce and planned legislations which we may not be able to introduce in the session. We are well on our way of accelerating the reforms process,” he said. Asked if the GDP growth rate target for the current financial year is achievable, Sinha said “everynone has said it (the growth rate) will not be what was anticipated to be at the beginning of the year.” He reiterated that one should wait for February to have a clearer picture of what exactly the GDP growth rate will be and “where between 6 per cent and 7 per cent, we can put the GDP growth rate”. The “delay” in disinvestment in PSUs is largely on account of the “paradigm shift” in the government’s policy — from disinvesting bits and pieces of shares to strategic sales. On the reported criticism of former Disinvestment Commission Chairman G.V. Ramakrishna regarding the government’s tackling of disinvestment of the PSUs, Sinha said he has great respect for the former but noted that “we have moved forward from where (Ramakrishna) left”. “We now have a dedicated department for disinvestment. We have made a paradigm shift from disinvesting bits and pieces of shares to strategic sales,” he said. The government, Sinha said, is going for privatisation and that’s the direction the disinvestment has taken. “The delay that you see this year (in disinvestment) is largely on account of this shift in policy that has taken place.” “If we were disinvesting small lots of shares, then we would have gone ahead and disinvested much more,” he pointed out. “Now, we are going for strategic sales. And there are a number of issues which have to be sorted out before the sale is finalised.” Asked if the Rs 10,000 crore target from disinvestment this financial year in achievable, the Minister replied: “We are trying our best.” Sinha said the “feedback” he received on the opening up of the insurance sector is good, and there has been a lot of interest among Indian corporates and foreign investors, many of whom have been granted licences and some are in the pipeline. The Indian insurance sector would be richer as a result of the entry of the private sector.
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ST, octroi hinder industrial growth Many
messy things are happening in the name of economic reforms. Flood of cheap imports from China is surfacing to the top notch. Consumers and entrepreneurs view this aspect differently. Consumers, by and large, are happy but not without anxious moments at times. Industry particularly the SSI sector is in panic. There is a flood of Chinese goods of sorts. Some shopkeepers have complaint of quality. For instance Chinese clocks are not dependable. This may be the case with other items too. Consumers are beaten on the price differential which may prove deceptive when compared with durability of the items concerned. Quality conscious and innovative manufacturers of Ludhiana have captured Chinese market in some African countries. Ludhiana cycle and rickshaw parts manufacturers have completely wiped out the Chinese hegemony on cycle paddle. A wooden toy manufacturer of South has beaten China by using planation wood instead of forest wood. Firstly China is not a democracy and it can enforce laws which give direct thrust to the industry. China is still not member of the WTO and can thus subsidies exports. In essence we cannot expect the same state support to the industry. But the matter does not end here. Industry does not need much financial support. It needs smooth running with better infrastructure. In Punjab it is very difficult to move goods smoothly. The Sales Tax Department lacks keen eyes to detect evaders and its harsh hand is mostly laid on honest tax payers. Goods for exports are intercepted at will. Incoming materials reach here with a reduced speed for the same reason. Octroi is another crucial factor which hinders the growth and increases the cost of the products. A penalty of 21 times the normal octroi duty is slapped. Punjab had promised to do away with octroi but on the contrary it is increasing its dependence on this. On infrastructure lesser said the better. Take the case of power. Its cost is paramount for the price of final product. Leaving apart things pertaining to power the Punjab government has levied octroi on power. To start with it was 2 paisa a unit, then 4 paisa and now 7 paisa a unit. Politicians are even heard saying that it may be lifted to 40 paisa a unit. Over time this may be a parallel tariff. Everybody talks about economic reforms. Without political reforms no meaningful economic growth can be expected. Reason: state governments continue to sustain on populist policies. There is no doubt that China is dumping many products with the connivance of our traders and by taking advantage of Nepalese border. China has reacted sharply against harsh steps taken by our government. For imports from China, importer is required to obtain a licence. As per verbal instructions Chinese goods are overloaded by 50 per cent on the invoice price. Such precautionary measures mean only stop-gap arrangement. We have to study in detail the working of Chinese industry before reaching final conclusion. Our state governments have to become partners, as it were, with industry to survive the competition.
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Last attempt to save Punwire CHANDIGARH, Dec 16— In a last ditch attempt to save Punwire from liquidation, the Board of Directors of the company has decided to approach the Supreme Court against the high court's action in appointing of a provisional liquidator. The Board which met here last week was of the opinion that the appointment of a provisional liquidator amounted to finishing all hopes of revival of the bankrupt company, and hence they should approach the Supreme Court against the appointment. Although the management has undertaken more than once to come up with a concrete plan for the revival of the company, it has been unable to formulate one so far. Meanwhile, the Punwire Employees Coordination Committee has been on a relay hunger strike in front of Udyog Bhavan, Sector 17, since June 19 last to press for its demand for the revival of the company. The Punjab Government has already sanctioned on April 12 a Rs 50 crore guarantee to the PSIDC for Punwire with certain conditionalities. However, financial institutions have raised some objections to the conditionalities. The matter was again taken up with the Finance Minister and the Chief Minister through Secretary, Industries, by the Coordination Committee of Punwire employees. At a meeting held with the Chief Minister last week, it was decided to speed up the release of the Rs 50 crore guarantee to the PSIDC. According to Mr Rakesh Kalia, Mr
S. S. Cheema and Mr Jasbir Singh, office-bearers of the employees coordination committee, their body is the apex organisation of all elected unions of
Punwire. It had been leading the agitation for the revival of Punwire for the past several months. He regretted that "certain disgruntled elements on behalf of the previous corrupt management are constantly trying to disrupt the agitation. They also try to "mislead the people by issuing press statements by claiming to be the representatives of the Punwire employees". |
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Daewoo check-up camp CHANDIGARH, Dec 16— Saluja Automobiles organised a three-day free winter check-up camp for Daewoo cars at Mohali today. As many as 404 cars ,including 265 Matiz cars and 139 Cielo cars, were checked in the camp. "We made a record of checking the maximum number of cars in one day throughout the region among all the Daewoo dealers(154 cars), stated Mr. S K Nandi, Works Manager. Free gifts were also distributed to the customers. Century Steel , one of the customers, who emerged as a winner was given a double bed mattress and a Snoozer mattress. |
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Pak to impose 30 pc duty on
Indian sugar ISLAMABAD, Dec 16 (PTI) — In a bid to boost domestic industry, Pakistan has decided to impose 30 per cent import duty on Indian sugar, media reports here said today. It said a 15 per cent duty will also be imposed on raw sugar imported from India. Though the military regime had rejected the proposal to put a ban on the sugar import from India under World trade Organisation regime, it decided to go ahead with import duty to boost domestic industry, ‘The Nation’ newspaper said. It said the military regime has asked local industry to ensure that sugar price does not cross Rs 25 per kg in the retail market despite rising sugarcane prices. Planners had earlier expected a shortfall of 400,000 metric tonnes of white crystal sugar.
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Wipro to focus on Europe MUMBAI, Dec 16 (PTI) — Wipro Ltd will focus on Asia-Pacific and European region markets to broadbase its business, Azim Premji, Chairman and Managing Director has said. Market for IT services was growing rapidly in these regions, including Japan, and the company would like to make its presence greater there to garner a higher share of software business, Premji told newspersons after receiving the “businessman of the year 2000” award instituted by “Business India” magazine here last night. Software service exports to US contributed over 60 per cent to Wipro’s IT business, while Europe’s share stood at 28 per cent, he said adding the share of Japanese market was growing rapidly. The company would establish new software development centres in Navi Mumbai, Pune and Gurgaon near Delhi to support growing business, he said. He said Wipro would invest Rs 300 crore for development centres in Mumbai and Pune over next the 18-24 months and provide job opportunity to 6,000 professionals. Asked about impact of slowdown in the US and global economy on Wipro’s growth prospects, Premji said “it will not affect finances. Infact, international firms with pressure on margins, were looking for cost effective places. We will gain from it.” On plans for acquisition abroad, he said “we are looking for a company that will increase customer base and help to grow value chain and price line.”
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RBI rules out rate cut NEW DELHI, Dec 16 (PTI) — The Reserve Bank of India (RBI) today admitted that cost of borrowing was high, but ruled out rate cut this fiscal as it has already softened. Agreeing with Prime Minister Atal Behari Vajpayee’s view that cost of borrowing was high in the country, RBI Governor Bimal Jalan said “I accept it, but it depends on other macro-economic factors.” The Central Bank, as part of its credit policy, would endeavour to bring cost of borrowing down in the medium to long term, he said on the sidelines of a FICCI luncheon meet here. However, in the short-term, interest rate would not be reduced further, he indicated. “The interest rate environment was positive and it is expected to remain so,” he said.
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Zee Network reorganises businesses MUMBAI, Dec 16 (PTI) — Zee Network has reorganised its businesses into four groups as per the recommendations by international consultants A. T. Kearney. The company’s diverse activities are organised into content, access and education — the lead businesses and fourth being corporate services, Zee said in a release here today. All these businesses would be handled by separate heads, it added. The decision was taken in an open house meeting two days back, after Chairman Subhash Chandra discussed the entire structure and strategy with the company’s staff. Besides restructuring, Kearney has also asked Zee to focus on building new core competencies like collaborations with other companies, focus on employment development, systemic resource-based management and to adopt “greater transparency” in dealing with shareholders. |
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Media stocks: time to book profits Media stocks are in vogue these days and that augurs well for the listing price of Creative Eye whose return to the IPO market after an aborted first attempt had evoked considerable derisive attention. Marketmen seem to be going gaga over the price gyrations of Balaji Telefilms, Tips Industries and Mukta Arts. While we had put out ‘buy for short term’ recommendations for our portfolio clients at these counters, last week, we pressed the ‘book profits’ button, as euphoria has overtaken these counters. Retail investors would do well to be very careful at these counters as the downslide therein could be far quicker than the upswing being witnessed. Moving into the flashback mode, the earliest and by far the biggest media story thus far, at least as far as the listing price criterion is concerned remains Television Eighteen. Promoted by Raghav Bahl, who along with his team beams into homes and offices on trading days on the CNBC India television channel, it is rumoured, was down and out for the count after a series of business setbacks before the CNBC tie-up materialised, and boy, has he cashed in on it! However, the fact that this company like many of its peers has no known second line of management coupled with its precarious overdependence on the CNBC tie-up means that it is skating on thin ice. Finally, fickle stock market fortunes and emerging competition on that front too do not augur well for its beaming service where viewership has probably begun to dwindle. There is also a school of thought that the company’s dotcom investment was a hasty and not a well conceived one. I for one, would be skeptical of a website with financial pretensions conducting opinion polls on whether Azhar ought to have received a life ban. What’s more the results of such mundane polls are actually flashed on the television channel too. Little wonder then that its share price is on the slide and the heady days when it topped the Rs.2000 mark seem a distant memory by now. Like I had predicted in case of Zee Telefilms a year ago – is this the beginning of the end ? Talking of endings, the curtains on the US Presidential election drama has fallen, and George W. Bush is the President elect. Republican governments have historically been a trifle more hostile to India’s interests but given India’s emerging strategic position in the global market, it seems unlikely that Bush might like to upset the applecart of friendlier relations and greater economic co-operation initiated during Clinton’s tenure. There is also a buzz that Bush will be less intransigent on the CTBT issue and may actually revoke the post-Pokhran economic sanctions on India. Not that it will make a material difference, but it will certainly enhance the feel good factor and such a sentiment invariably pushes up market indices. While on the topic of the USA, can the Taliban be too far behind. I had a very interesting conversation recently with Mr Arvind Aggarwal, the CFO of Ajanta Pharma revolving around the safety of the company’s investments in the Central Asian republics of Kazhakistan and Uzbekistan. He emphasised that the Taliban threat as depicted in the media was simply a non-issue as American oil business interests would ensure that these nations remained well out of bounds for the Taliban. In fact, he expects fair returns on the company’s investments in these nations to start flowing in from the next financial year onwards. Oil interests and George Bush. Hmmm… that rings a bell, for sure.
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Grasim Kopran Wockhardt British Telecom |
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by Praful R. Desai Applicability of Act Q: Whether the payment of Wages Act is applicable or not is since a question of law and fact, whether it could be raised for the first time before the SC? Ans: In APSRTC National Mazdoor Union v APSRTC (2000-II-LLJ-1131) the SC observed thus: Appellant vehemently contended before the SC that according to him, the Payment of Wages Act, 1936 did not apply to the facts of the present case and that point was not considered by the HC. Unfortunately for him, neither in the List of Dates nor in the Civil Appeal, any such averment was even whispered that this submission was urged before the HC but the same was not considered. It has to be kept in view that the question about non-applicability of this Act, according to the SC, is a mixed question of law and fact i.e. whether the employees concerned who went on an illegal strike in the relevant time, were drawing wages of more than Rs 1,600 p.m. or not. That question required evidence to be led. Consequently, unless this point was argued for consideration of the H.C. no such contention could be raised for the first time before the SC in its opinion. Appellant also submitted that in the Memo of Writ Petition it was clearly mentioned and that was the only point which could have been argued. That may be so, but as the judgement under appeal does not mention this point and in the Civil Appeal there is no such averment that this point was urged and not considered, no such question arises for its consideration. Even apart from that, if it was mentioned in the Civil Appeal that this point was urged and not considered, the appellant would have been relegated to the remedy of review proceedings. That occasion has not arisen for the appellant in the peculiar facts of this case. Without expressing any opinion on the merits of this controversy between the parties, SC closed the proceedings. In that way, the Civil Appeal was disposed
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by Pushpa Girimaji When PGI gave wrong blood & killed the patient LAST year it was the Nizam’s Institute of Medical Sciences, Hyderabad, which came under fire for negligence in treating a patient, Prasanth S.Dhanaka and asked to pay Rs 15.5 lakh as compensation by the consumer court. This year it is another premier government institute, the PGI, Chandigarh, which has been held guilty of transfusing mismatched blood to a patient, eventually leading to her death. The Consumer Disputes Redressal Commission, Chandigarh, before which the complaint was filed, held that there was negligence on the part of the hospital in transfusing B positive blood to Ms Harjit Kaur and directed PGI to pay Rs 2 lakh as compensation. Seventyfive percent of the amount should be put in a fixed deposit in favour of the minor son of the deceased while the remaining 25 per cent is to be paid to the husband, Mr Jaspal Singh, the Commission said. It also directed the PGI to pay Rs 5000 as costs to the complainants. Subsequently, the National Commission before which the PGI went in appeal, dismissed it, saying that there was no legal infirmity calling for any interference in the order passed by the State Commission. According to the complaint filed by Mr Singh, on March 30, 1996, Harjit Kaur received 50 per cent burn injuries while cooking and was admitted to Dayanand Medical College, Ludhiana. Till April 19, 1996, she remained there and recovered considerably. However since the treatment at the private hospital was expensive, he moved her to PGI, where she recovered further. Subsequently, Mr Singh was told that the patient needed blood transfusion as she required surgery on a leg. Strangely, on May 14, Harjit Kaur was given A positive blood. But on two occasions subsequently, she was given B positive blood, while her blood group was A positive. According to the complainant, within minutes of transfusion of mismatched blood on May 20, the patient developed chest pain. The transfusion was stopped, but resumed again after a few minutes. This was in the afternoon and that night, the patient was passing blood in the urine. This was shown to the nurse on duty and also the doctor. However, the doctor again called for another bottle of blood the next day and this time too, what was transfused was B positive blood. The patient’s condition became critical, her liver functioning was affected and so also her kidney and her blood urea reached 100 miligram per cent and her haemoglobin level dropped to 5 gm. The other doctors at the hospital opined that the patient’s kidney had been damaged due to wrong transfusion of blood. But it was only after Mr Singh complained in writing to the head of the department of plastic surgery that the hospital began damage control treatment. It also held an inquiry and found the charge of mismatched transfusion to be correct. The complainant was asked to determine the patient’s blood group again from an outside source and the sample sent to the Blood Disease Hospital confirmed that Harjit Kaur’s blood group was A positive. The patient’s condition in the meanwhile had begun to deteriorate, leading eventually to her death on July 1. Holding the PGI responsible, the complainant demanded a compensation of Rs 9 lakh. The PGI did not deny mismatched blood transfusion, but only argued that the patient recovered from its adverse effects and died of septicemia. The National Commission, in its order dated September 28,2000, said though septicemia had been indicated as the ultimate cause of death, the patient’s health took a nose dive only after wrong blood was given to her. The internal imbalances of liver and kidney functioning and deteriorating haemoglobin levels began only after the mismatched transfusion. There was clearly negligence on the part of the doctors and the hospital cannot disown responsibility for it, the Commission said. The PGI also tried to wriggle out of its responsibility for mismatched blood transfusion by pointing a finger at the complainant and saying that he brought the blood from the blood bank and it was his responsibility to have checked the blood group. Dismissing this contention, the National Commission said the argument was totally unpalatable, as it was the duty of the hospital to make sure that the blood was correctly matched before giving it to the patient. Even though the complaint was filed against the PGI as well as a senior resident, the court did not go into the question of who was actually responsible for mismatched transfusion. It, however, said that it was up to the PGI authorities to recover the compensation amount from the erring doctor(s)/staff. The senior resident, in his reply to the court notice had said that he had neither called for the blood nor given it. It was a junior resident who had given the blood and grouping and cross matching of the blood was done by the blood bank. |
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