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| Friday,
December 29, 2000, Chandigarh, India   
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Political tempers rise over industries’ closure
Boom time for IT companies GM to gain
from Maruti disinvestment
Government action against officers of Agro Packaging
India’s selloff policy half-hearted: Paul |
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Govt clears Rs 3,115 cr FDI proposals Old-economy stocks make strong comeback SBI unions
criticise ‘forcible’ VRS Ranbaxy to divest
stake in Eli Lilly
WAP fails to catch
public imagination
Relativity Tech to
acquire Indian firm
Indian among top executives
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Political tempers rise over industries’ closure
new delhi, dec 28
(UNI) — In continuing political unrest over the closure of polluting units in the city’s residential areas, the Congress held another “jail bharo” programme today while
bjp mp m. l. khurana and Samajwadi Party leader Mulayam Singh Yadav threatened to take to the streets in support of industry owners and workers. The Delhi Pradesh Congress Committee, led by its President Subhash Chopra and senior local leaders Sajjan Kumar, Jagdish Tytler and Deep Chand Bandhu today held its “nyaya rally” (rally for justice) at Wazirpur village in north Delhi with party
MLAs courting arrest. Demanding the resignation of Union Urban Development Minister Hagmohan, the Congress activists said the livelihood of hundreds of thousands of people had been put at stake while the Centre was viewing the entire situation as a mute spectator. If the Centre did not agree to an amendment of the Delhi Master Plan 2001 to accommodate industries within the capital’s borders, a mass movement would be launched, he added. Meanwhile, bjp vice-President and Delhi Sadar
mp m. l. khurana charged the Delhi Congress Government led by Sheila Dikshit of imposing a “state of undeclared emergency” to close down industrial units. Alleging that non-polluting and vacant units were being sealed, Mr Khurana also threatened to take to the streets if the “arbitrary” sealing of units did not stop. The Samajwadi Yuvajan Sabha, which has been holding a “dharna” on this issue at Raj Ghat, today announced that Samajwadi Party leader Mulayam Singh Yadav would join the “dharna” and lead a demonstration against the industrial closure in the coming days. In a separate statement here today, the Federation of Associations of Small Industries of India condemned the unilateral closing of small and tiny industries. Stating that the government had taken 30 per cent money from entrepreneurs in 1996 for allotment of plots in Bawana, the fasii said no infrastructure had been developed so far. It urged the government to convene a meeting of all associations concerned to come to an amicable solution, keeping in view the concerns of the entrepreneurs and workers who are left in the lurch.
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Boom time for IT companies CHANDIGARH, Dec 28 — Initial hesitation of the IT giants to login Punjab as an IT destination is fast giving way to a euphoria for the computer software companies in the region which have registered more than 100 per cent increase in the software exports within a year. The performance of the software companies operating in the state has inspired the industry captains to re-dedicate themselves to the objective of making Punjab a “Silicon Valley” of North India. The fact that more than 500 software companies are in the pipeline, ready to set shop in Punjab within the next few months is an indicator to the rosy IT scenario.
“At present we are not holding a major share in the software export market, but the pace at which growth is taking place is definitely an indication that the region will become “Silicon Valley” of the northern part of the country”, says Dr. Sanjay Tyagi, Additional Director, Software Technology Parks of India (STPI), Mohali. The software exports of the STPI units have registered an increase of more than Rs. 700 lakh within a year. Exports in 1999-2000 rose to Rs. 1479.99 lakh from 777. 17 lakh in 1998-99. This increase has been recorded even when a large number of companies registered here are yet to start their operations. Officials claim that the situation would further improve with the coming of more companies in the he region. The software exports of the 19 units here have further increased to Rs. 1933.29 lakhs within a span of six months( between March 2000 to September 2000). Quark Media House has emerged as the top exporter (for six months) with exports of Rs. 684.30 lakh, followed by Inde Dutch Systems and Infosys Technologies with Rs 483.08 lakh and Rs 325.26 lakh respectively. The other major software exporting companies have been Toubro Infotech and Industries, Smart Data Enterprises, Selective Minds Infotech etc. The total exports by STPI units till date have been Rs.4,190.45 lakh. USA, UK and Germany have hogged the major chunk of software exports . That there have been infrastructural problems for the newly set up units in Mohali is a fact which most of the industrialists here opine. “But these problems have not effected the performance and such problems are expected to arise whenever any new project is taken up”, says Mr. Rajiv Kuchchal of Infosys here.
Software Exports Rs in (Lakh)
1998-99
777.17
1999-2000
1479.99
March 2000 To Sept 2000
1933.29
Exports of different companies from March to Sept
Quark Media House
684.30
Infosys Technologies
325.26
Toubro Infotech &
Industries
262.33
Others
178.23
Authorities say that the companies here have attained well above their target and expect the software exports in the region to cross Rs. 50 crore by the end of year 2008. Reportedly, within the next three months, more than 140 companies are expected to become operational and the number is further expected to increase to 500 in a year. |
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GM to gain
from Maruti disinvestment NEW YORK, Dec 28 (PTI) — The proposed disinvestment in joint venture Maruti Udyog by Government of India provides an excellent opportunity to the General Motors Corporation of the USA which is eager to expand business in Asia, reports trade daily Wall Street Journal. GM, which owns 20 per cent stake in Japan’s Suzuki Motor Corporation (SMC) could benefit if the government sold its stake in 50:50 JV with SMC, the paper said. SMC is believed to have earlier communicated to the government that it was not interested in acquiring the stake of the Indian partner. “We have concluded first round of discussions which were largely informal. During this SMC was disinclined to buy government equity in MUL,” official sources told PTI in New Delhi. The paper quoted analysts as saying that sale would provide rare opportunity to foreign investors should India end its 20-year-old partnership in Maruti — one of the biggest car makers in Asia outside Japan and Korea with an annual output of 400,000 units. |
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Government action against officers of Agro Packaging SHIMLA, Dec 28 — The Himachal Government is contemplating action against the officers guilty of gross financial irregularities in the Agro Packaging India Limited, a public sector undertaking which has suffered losses to the tune of Rs 34 crore over the past seven years. Talking to newsmen here today, Mr P.K. Dhumal, The Chief Minister, said that the special audit ordered by the government had revealed glaring irregularities in procurement of material, sales of cartons, recruitment of employees, besides unwarranted purchases and payments which caused huge losses to the corporation. The audit report was under consideration of the government and action would be taken against the guilty after fixing the responsibility. The public sector undertaking, which was set up to manufacture corrugated cartons to replace the wooden apple boxes seven years ago had been accumulating losses eversince its inception. It has incurred heavy losses due to financial bunglings and indiscriminate purchases, including an orchestra, and wasteful expenditure by the management. It even paid underserved commission to a private company in sale of cartons to another state government. The BJP-HVC Government had soon after assuming office ordered special audit to pin point the financial irregularities. The corporation had raised a loan of Rs 13 crore from the state Cooperative Bank but it paid back only Rs 10,000 over the past six years. The total outstanding amount increased to Rs 22 crore over the period, which has now been cleared by the government. The functioning of the unit had also improved this year and it manufactured over 60 lakh apple packing cartons for the first time and was likely to earn operational profit of Rs 3 crore.
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India’s selloff policy half-hearted: Paul NEW DELHI, Dec 28 (PTI) — Describing Indian Government’s disinvestment policy as “half-hearted”, London based NRI Industrialist Lord Swraj Paul has expressed the view that it is not liberalising fast enough. India, he said, should come out of “adhocism mould” which had hampered Indian Economic Reform Process. There was no alternative to liberalisation, he told PTI here. Asked about the flow of Foreign Direct Investment, Paul said that India did not need foreign investment at all. “India has to utilise its assets most efficiently and productively”, he said. Asked about Enron Power Project in Maharashtra, he said it was “childish” on the part of the government to have signed the agreement with the US firm on a cost-plus-basis. “All cost plus agreements such as the one with Enron end up in enormous problems”, he said. Paul, who has been appointed the roving ambassador by the British Government, was of the view that if India made its existing power units more productive then it would not have to set up power units at such a huge cost. “I would like to see the Plant Load Factor of the existing power units in India at 100 per cent and only then it should go for new ones”, Paul said. Stressing on the benefit of disinvestment, the NRI Industrialist said the government should not be in the business of running business. The government should only manage health, education and law and order. “In this age of globalisation things should be left to the market forces and the government should make sure that the private monopolies are not created to abuse the system. The poor should be taken care of”. Paul saw no merit in the uproar over dumping of Chinese goods in the Indian market. “Why cry about it. Why should India not produce those goods at competitive price and dump them all over the world”, he said. “One billion people should be able to produce more competitive goods than all the western countries”, he added. Paul said that the initiative taken by the Indian Government to reduce corruption must be commended. The change was palpable and more needed to be done. Urging the government to speed up decision making, Paul said in a fast changing world the investors could hardly afford to wait for decisions on their proposals and delay would make them look towards some other countries. “He (investor) turns around somewhere else where he can get the decisions faster”, he said. “The government needs to make up its mind faster and accelerate the decision-making process”, he said, adding “we will have to liberalise much faster and that is the only hindrance at this moment for quicker globalisation”. Citing the example of India’s rapid stride in the software sector, he said the country has put in place a successful policy and has “become a global player” in this sector. India, he said, has emerged as a software giant, second only to the United States. To tackle corruption and favouratism, Paul suggested creation of more capacities. “Don’t be afraid that if we create more capacities, some industrialists will lose out. The policy should be made for the common people and not for a handful of industrialists irrespective of how big they are”. Stating that privatisation alone on its own is not a salvation, he said the process should be accompanied by an appropriate mechanism to prevent any unfair deal to labour. Paul was highly appreciative of Prime Minister Atal Behari Vajpayee whom he described as the best leader India has had after Indira Gandhi. “His colleagues Finance Minister Yashwant Sinha and External Affairs Minister Jaswant Singh are also doing a tremendous job”.
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Govt clears Rs 3,115 cr FDI proposals New Delhi, Dec 28 — The government today cleared 57 foreign direct investment (FDI) proposals worth Rs 3,115 crore including Rs 2,250 crore investment by dutch company Digital Future Investment R.B. and over Rs 130 crore investment by Bharti group of companies. The Commerce and Industry Minister, Mr Murasoli Maran, approved the 57 cases based on the recommendations of the Foreign Investment Promotion Board (FIPB), an official statement said here. Digital Future would make 100 per cent FDI in India over a period of five years in the areas of telecommunication and broadcasting. The company is likely to construct, design, install, operate and maintain engineering facilities and provide third party technical services to duly licensed broadcasters, telecom operators and public authorities among others. Bharti Aquanet’s proposal to infuse Rs 122.5 crore, a 49 per cent FDI, for laying of optical fibre cable under water along oceans and sea beds has also been cleared by the ministry. Other proposals of the Bharti Group of Companies include a 10 per cent FDI proposal of Bharti Enterprises Ltd for promoting, investing and participating in telecom ventures in India along with a Rs 8.2 crore investment proposal of Bharti Telecom for manufacturing and marketing of telecommunication equipments. The government also approved a 50 per cent FDI proposal worth Rs 295 crore of Zuari Cement Ltd for the manufacture of Portland cement. A Rs 56.35 crore investment of ICICI Infotech Services Ltd for IT enabled services and software development and consultancy in IT infrastructure was also approved. Other proposals cleared cover various other sectors including manufacture of drugs, consumer goods, paints and varnishes, textiles, tourism and management consultancy. |
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Old-economy stocks make strong comeback MUMBAI, Dec 28 — The first year of the new Millennium started on an auspicious note for the stock exchanges with an Infotech wave prompted by successful resolution of the Y2K problem, only to run out of steam later as the favoured IT sector lost flavour gradually over the year. The year 2000, however, turned out to be a good omen for old-economy stocks with their part revival, receiving the maximum attention from speculators and even Indian Financial Institutions (IFIs). Though old-economy stocks barring select 18 scrips showed losses at the year end, it is worth mentioning that all of them made a strong comeback from their lows, purely for investment opportunities at lowest levels. The euphoria was so high at the beginning of the year that history had to be rewritten in golden letters just within a span of four months, when the BSE sensex followed by indices on major bourses in the country, created new records rising about 1000 points in about one and half months time to hit an all-time high of 6150 on February 14. The strong factor for early upswing was the successful transition to the new millennium by overcoming a host of problems and speculations about so-called Y2K bug. Foreign Institutional Investors (FIIs) played a major role with their net investments put to the highest level at Rs 3084 crore in February alone. Their main thrust was on new-economy stocks which had become the buzz word on international as well as other major stock exchanges all over the world. The facts on record showed FIIs making their presence felt in India in the backdrop of indications of political stability with the NDA Government giving assurance on speedy reforms. The government’s thrust area and growing emphasis was on privatisation of Public Sector Undertakings (PSUs), strengthening relations with the US and increasing activity into mergers and aquisitions. When new-economy stocks were earlier at their best, there was a bad phase for old-economy stocks as investors, speculators, domestic institutions and mainly, FIIs had ignored these stocks for quite a long time. But the craze or enthusiasm for golden stocks that helped bourses create record after record in the past one year did not keep up for long and the favoured lot came crashing down like a pack of cards when their sky-high quotes irrelevant to P/E ratios and company performance were exposed. The bank rate hike in July too had taken a toll on the stocks with a free fall cutting down the sensex by about 275 points in a single session on July 24, largely triggered by what has been perceived as a reversal of monetary policy by the RBI, after it hiked the bank rate by a percentage point to 8 per cent, on July 20. Analysts, however, viewed that interest rates would have been higher had it not been for a huge mobilisation of $ 5.5 billion by State Bank of India through its Millennium Bonds issue. Inflation which had bottomed at 4 per cent at the beginning of the year had also peaked to more than 8 per cent by the end of the year. The tech-laden Nasdaq Composite Index also was not of any help to the bourses as it generally moved downwards after it peaked on March 10. The Nasdaq was down more than 38 per cent for the year and lost over 50 per cent from its March high following US companies warnings, often repeatedly, of lower-than-expected earnings as also the slowdown in the once-booming US economy. The sensex, now at a level of 3800, was looking weak at the fag end and market analysts said it is poised to touch a new low in the beginning of 2001. The bottom target is placed near a figure of 3400. Thereafter, a rally is expected to start all over again on the basis of encouraging news like disinvestment of PSUs and banks, buying by FII and local institutions, improvement in global sentiment aided by rate cuts in the US economy.
— PTI
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SBI unions
criticise ‘forcible’ VRS NEW DELHI, Dec 28 (PTI) — State Bank of India (SBI) unions today threatened agitation against “forcible” Voluntary Retirement Scheme (VRS) and contended this would only increase the burden of the remaining workforce as the bank had already drawn up the branches that will also provide Life Insurance Service. The All India State Bank of India Staff Federation and the All India State Bank of India Officers Federation, which held demonstrations yesterday in various branches all over the country, will chalk out the future course of action in the first week of January, a senior Bank Union leader V.K. Gupta said. Mr Gupta, who is also the Delhi Convenor of the United Forum of Bank Unions (UFBU), an umbrella body of nine banks unions, said the SBI management was planning to offer VRS to about 10 per cent of the 2.3 lakh workforce. “They are propagating the VRS in such a manner that the employees are being compelled to opt for the scheme,” Gupta alleged, adding that the threat of bringing down the retirement age from 60 years to 58 years is bringing lot of pressure on senior bank officials to consider opting for the scheme. State Bank has virtually firmed up a Joint Venture with the French Insurance Company Cardif SA (CSA) for making forays into the life insurance sector. |
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Ranbaxy to divest
stake in Eli Lilly mumbai,
dec 28 (PTI) — The board of Ranbaxy Laboratories Ltd will meet early next month for divestment of its equity stake in Eli Lilly Ranbaxy Ltd, a 50-50 joint venture company in India. Ranbaxy’s board will meet on January 5, 2001, to consider and approve the divestment, the company informed the Bombay Stock Exchange here today. However, Ranbaxy did not specify the terms and conditions of the proposed divestment. The board would also consider and approve purchase of equity shares of Gufic Pharma Ltd, a non-listed company, from the promoters, it said. |
cr
WAP fails to catch public imagination THE big disappointment of 2000 was the explosion that didn’t happen. The ridiculously over-hyped Wap (wireless application protocol) phones, offering mobile access to a text only portion of the internet, failed to catch the public’s imagination. This was the fault of the media as well as the manufacturers, and both were impaled on their own wish-fulfilment. Sure, there were one or two interesting applications — like share and football statistics dispatched to you more or less live — but nothing to induce punters to buy a phone primarily for Wap use. But mobile phones continued their explosive growth, as did text messages, 10 billion of which were sent world-wide in August (overtaking email in popularity). Telecommunications companies in the UK bid a staggering, and staggeringly unexpected, $ 33.3bn for radio spectrum licences for third generation (3G) mobile phones. These are planned to have permanent “always-on” broadband connections to the Internet. Unfortunately, they did this before the Wap-lash had gathered steam and before disillusionment started to set in about the capabilities of 3G phones. By the year end the banking supervisory authorities were becoming worried about the balance sheets of the mobile operators as a result of their over-stretching themselves during the bidding. Next year — in advance of 3G phones — we will see the marketing of mobiles with faster and “always on” access to the Internet, making more use of the mobile phone’s ability to tell interested companies where in the country you are. Expectations have suddenly been lowered, and this is a good thing. It means we may be surprised if things are better than our low expectations, rather than being disappointed because they didn’t reach our high expectations. Although the timetable for high speed, broadband phones with powerful internet capabilities has been pushed into the future interactive, let there be no doubt that the longer-term future for mobiles is still awesome. In a few years time practically everyone in the industrialised world will have a very powerful, interactive, video-streaming consumer product with them all the time. When the technology catches up with our dreams. E-commerce At the end of 1999, predicting the year ahead for companies involved in e-commerce was easy: explosion followed by implosion. It happened exactly as expected — a surge of new Internet start-ups was followed, first, by a puncturing of some of the ludicrously high valuations put on the bubble.com companies, then by the actual failure of some of the first-wave companies like Boo.com, Boxman and Clickmango. Meanwhile in the business-to-business (B2B) sector, accounting for 80 per cent of all e-business, things largely purred along nicely, mostly immune from the forces that made it difficult for any business-to-consumer start-up to make a profit. Next year will be more difficult to call because it will be a mixture of several forces all happening simultaneously. First, web start-ups will continue to go bust or be rescued by old economy players plugging the gaps in their own web strategies. Remember, 50 per cent of all (conventional) small companies fail after their first four years. The casualty rate among dot.coms — often run by inexperienced managers — is bound to be as least as great. Second, there will be consolidation as stronger companies gobble up their competitors in order to secure a big enough market share to be able to charge for what they are providing. For instance, in the area of Internet access free service providers may be snapped up; in the long run there is no such thing as a free lunch. Third, we may see the beginning of a fresh wave of start ups. Armed with second-mover advantage, having learned from the mistakes of first movers, they will try to build companies biologically linked to the web rather than glued on to it. Some, like games companies, will use the new location-based wireless technologies so community games can be played.
— Guardian Relativity Tech to
acquire Indian firm NEW DELHI, Dec 28 — Relativity Technology, the US-based $10 million company, is looking for acquiring a service-oriented Indian company which is involved in high end research of system conversion. Talking to TNS, Mr Vivek Wadhwa, CEO and promoter of Relativity Technology, said his company was a pioneer in the conversion of computer data in old languages (Legacy system) to new e-business systems. Currently, its product, RescueWare, is being licensed to other partner companies to provide the services of transforming the legacy system written in COBOL and Fortrain computer language to the latest HTML, XML, Java, C++, Visual Basic and other e-commerce enabled computer languages. “RescueWare is a unique software for which they have already applied for patent. It not only converts the language but also converts the business logic required by the new system”, he said. One of Relativity’s success stories was the Web-enabling of the US Air Force’s database from the Unisys 2200 technology platform. The company has so far received $12 million as venture funding from Intel, NIIT, Wakefield Group. He said that NIIT had taken a small stake with an investment of around $1 million. |
co
Indian among top executives New
York: An Indian American has been named in a list of the top 25 influential executives in the US information technology sector, ranked by the prestigious Computer Reseller News (CRN). CRN said that Dev Ittycheria (33), and his boss Gordon Brooks (43) of Breakaway Solutions, an application service provider (ASP), made it to their list of the 25 most influential executives, because they are hanging tough in the crumbling world of ASPs. Ranking them 10th, CRN emphasises that if the two toughs keep going, the ASP industry holds rich rewards. Brooks is the CEO and Ittycheria is senior vice president of Breakaway. The CRN, which calls itself the newsweekly for builders of technology solutions, characterises Brooks and Ittycheria as “The Landlords,” the “stubborn guys” who are swimming in an industry that is currently facing red ink and where many losers are being weeded out. “It is still too early to say whether Brooks and Ittycheria have hit upon the magic formula with their full-service ASP model, but they are among the handful of leaders and represent one potential future for the information technology (IT) services industry,” CRN asserts. The list of 25 is topped by Hewlett Packard’s Carly Fiorina, and Larry Ellison of Oracle. With their never-say-die attitude, Brooks and Ittycheria broke away from big companies (Brooks from Oracle and Cambridge Technology Partners, and Ittycheria from Teleport Communications Group and later AT&T), struck out on their own. Ittycheria founded Applica in 1999, one of the first venture-backed ASPs. When Brooks founded Breakaway with its expertise in systems integration and e-business design, and met with Ittycheria and the Applica staff, “it was love at first sight,” Brooks says. “They had what we were missing, the network operations and hosting experience.” This is CRN’s 18th Top 25 list and it concedes it has never been more difficult. “The industry had become so multifaceted, so fluid and so driven by innovation that confining the list to the 25 “most influential” people seemed foolhardy.” Ittycheria was the youngest product director for AT&T’s Data business unit, where he led AT&T’s development of advanced packet services such as ATM, Frame Relay and other integrated broadband services optimized for local markets. Ittycheria holds a degree from Rutgers University, College of Engineering. He also serves on the advisory boards of selected venture-backed start-ups in Internet-related technology and service companies, and is a member of the board of directors of the ASP Industry Consortium. “Ultimate success in this business is being considered a valued partner by our customers,” Ittycheria says. “To achieve this goal I strive to ensure that we as an organization earn the confidence and trust of our customers by consistently delivering on our commitments and making the Breakaway experience one that is truly delightful.”
— IANS |
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IBM Credit card Silk exports |
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