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| Wednesday, February
21, 2001, Chandigarh, India   
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Tisco to retire costly debt, eyes acquisition Economy: what next? Sterlite, US giant tie
up
PNB loan waiving case referred to CVC Tata, SIA to bid for 40 pc of Air India
Cargo complex for J & K suggested |
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Medical transcription
business booming Why Punjab sugar mills suffer
losses
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Tisco to retire costly debt, eyes acquisition
New Delhi, February 20 Tisco, may also post a record profit for the current year to March due to cost control and a shift to higher value-added products, it said. “Our cash flows are quite comfortable just now and we can repay high cost debt,” Tisco Managing Director J.J. Irani told Reuters. Irani said Tisco would probably retire five billion rupees ($107 million) of bonds paying a coupon of 17 percent. The 10-year bonds were issued five years ago, but the company has an option to retire them in October. If needed, the company could raise that money now at less than 11 percent. Irani also said the completion of a modernisation programme and installation of a cold rolling mill by mid-2001 would free nearly eight billion rupees a year in cash flow, which could be used to fund an acquisition. “We have the cash flows and if anything good comes up today through any route, whether it is through government disinvestment in our area or through anything abroad...we have got our eyes open for that,” Irani said. He also said Tisco would post a record or near record profit for the current year even after paying 850 million rupees in dues to the Bihar State Electricity Board and spending two billion rupees on an employee separation scheme. “Even after that we are likely to finish with almost a record profit, if not the record profit,” he said. Tisco’s highest ever net profit was 5.66 billion rupees posted in 1995/96. In the nine months to December 2000, it posted a net profit of 3.44 billion rupees, up from 2.36 billion rupees in the year ago period. Irani said Tata Steel would produce about 3.5 million tonnes of steel in 2000/01 and sell between 3.3 and 3.4 million tonnes.
Reuters |
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Economy:
what next?
T.V. Lakshminarayan & Gaurav Choudhury seek out views of captains of industry concerning the Union Budget and the state of the economy. Q: What should be the focal areas of the Union Budget for 2001-02? The Budget should contain measures to reduce the Government’s revenue deficit, improve infrastructure development and efficiency through policy measures and greater private sector participation, reduce cross-subsidies, reduce the burden of excise duty on domestic products to stimulate demand, retain existing custom duty levels, increase Government’s capital spending and complete on-going projects at the earliest. Q: What measures will you suggest to meet expenditure requirements for disaster management? More than resource mobilisation, what is needed is a proper system of anticipating and designing a logistics mechanism to cope with the natural disasters as well as its after-effect. There is a National Calamity Contingency Fund (NCCF) in place. This is in addition to PM Relief Fund. These will take care of disaster management requirements. While there may be a need to increase the corpus, it is more important that the funds are properly utilised. Given the overall resource crunch, it is important that focus should be on “How well we spend the money” rather than just on “How much money we spend”. Q: The Prime Minister has talked of achieving 9 per cent growth in the medium term. How realistic is the objective? Higher economic growth needs two important inputs (1). Optimal efficiency of use of the existing resources & (2) Larger funds for investment. While increased efficiency in resource use will take care of some portion, India may need to spend much higher amount of GDP on investment for 9% p.a. GDP growth than now. A large inflow of foreign capital is undesirable for BoP reasons. Hence the bulk of investment requirements will have to come from domestic resources. For achieving higher investment requirements, we need to encourage private sector to invest more in infrastructure. This will need a stronger and independent regulatory authority as well as introducing “user charges” for inputs like electricity and water. The Government on its part may have to significantly increase its annual investment over the next 3-5 years. This is possible only if the Government shifts its spending pattern away from current or revenue expenditure (e.g. on administration) to that of capital expenditure (both physical and social). Q: What measures would you suggest to keep the fiscal deficit under check? Reduce non-plan expenditure through (1). Better targeting of subsidies & (2). Downsizing government administration to reduce the wage bill. Other measures should include restructuring of schemes to avoid duplication & improve cost effectiveness; an aggressive divestment programme will reduce Budget support to PSEs and increase tax revenue by bringing services & agriculture under the tax net. These will keep expenditure under check & reduce borrowing requirements. Fiscal deficit will thus be reduced over time. Q: Despite repeated efforts, a full-fledged VAT regime is yet to take off in India. Your comments. It is essential that we get into a VAT regime at the earliest. However, it will take some time before a full-fledged VAT regime takes off in India. This is understandable and also desirable that the States do their ground work properly before introducing the VAT. State Governments will also have to strengthen their administrative machinery and there is a need for a uniform policy among the States.
Bombay, February 20 Kentucky-based General Cable Corp is the third-largest wire and cable company in the world with sales last year of $2.3 billion, up 35 percent from 1999. It has 38 plants in 12 countries. Sterlite Optical Technologies is one of India’s largest producers of optical fibre and optical fibre cable. The company reported last month that net profit for the October-December quarter doubled to 894.6 million rupees on sales of 3.22 billion rupees ($69 million). Sterlite said under the agreement General Cable Corp will spin off its optical fibre cable manufacturing operation at Dayville, Connecticut to the new joint venture. The joint venture will buy optic fibre from Sterlite Optical for making optical fibre cables for sale mainly in North America.
Reuters
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PNB loan waiving case referred to CVC
New Delhi, February 20 A Bench comprising Justice Anil Dev Singh and Justice O.P. Dwivedi also directed CBI to expedite probe into another case of alleged writing off of loans amounting to Rs 13 crore to two Bajoria group companies by Jihalani in 1994. CBI’s Anti-Corruption branch had sent its first report on the matter to CVC after securing the opinion of the Advisory Board on Bank Fraud (ABBF) in Union Finance Ministry, but the second report prepared by the agency’s Banking Cell was not sent to the Commission, CBI counsel A.K. Dutt told the court. Both anti-corruption branch and banking cell of CBI had come to the conclusion that “prima facie” no case was made out in the first matter, while the agency had registered an FIR against Jihalani in the second case related to Bajoria group, Dutt told the court. However, this was opposed by counsel for All India Lawyers Forum for Civil Liberties.
PTI
Tata, SIA to bid for 40 pc of Air India New Delhi, February 20 “Tata-SIA are serious contenders for Air India. We will submit a technical bid on February 23,” the official said. New Delhi has set a February 23 deadline for the submission of technical bids and details of consortiums seeking to buy a 40 per cent stake in Air India being sold by the government. Foreign airlines can pick up 26 percent of the stake individually or the entire 40 per cent in tandem with an Indian partner.
Reuters
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Cargo complex for J & K suggested New Delhi, February 20 The committee, while stating that Jammu and Kashmir holds a very good export potential particularly in items like handicrafts and carpets, sports goods, electronics and software, agro-products and leather goods has suggested an export-strategy for Jammu and Kashmir. This committee was set up by the Department of Commerce under the Chairmanship of Dr H A C Prasad, Economic Advisor, and has submitted its report in a period of four months. Speaking on the occasion, Mr Abdullah said that all the three regions of Jammu and Kashmir including Jammu, Ladakh and the Valley had much to offer for exports and emphasised that this report was not an end in itself but nearly a means for an end.
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Medical transcription business booming Bangalore, February 20 “I expect our turnover to grow at 80 percent compounded annual growth rate for the next few years,” HealthScribe’s Chief Executive Officer Tony Hales told Reuters in an interview. The company, a joint venture between Max India and Healthscribe Inc of the United States, currently does $6 million in business a year. The booming medical transcription business has become a $ 6 billion industry in the USA. Transcription professionals key in medical data such as patient histories or treatment into computers after doctors in the USA phone the transcription centre and verbally record their observations. Once keyed into computers the data is transferred back to US hospitals via e-mail. Global Centre India has become a global hub for medical record transcription business with the establishment of high-speed telecom links and its large number of English-speaking graduates. The fact that wages in this field in India are only 15 percent of US salaries is the biggest draw for firms such as HealthScribe to set up shop in India, Hales said. “Our (HealthScribe’s) only limitation for growth has been time and experience,” Hales said. The company was not adding more than 75 to 100 employees a month to ensure that the quality of work is maintained, he explained. Hales said it takes about four years for a local employee to match the quality of work done by his counterpart in the USA. Other foreign companies in the same industry with operations in India include US-based HeartLand Information Systems and CBay Systems (India). The growth of such services has been fuelled by rising demand to maintain basic hospital data and records and use these as legally recognised documents for US doctors to support medical decisions.
Reuters
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Why Punjab sugar mills suffer
losses Chandigarh, February 20 But sugar industry in India is shackled in controls and regulations with vast difference in perception between the Centre and states. The former has consumers in view, the latter sugarcane growers. The Centre wants sugar to be available at a low price, the states want maximum price to be paid to farmers. As a highly labour and capital intensive industry, cost of sugar production is high in India compared to other countries. Moreover it is a seasonal industry. Imbalances result in heavy losses to sugar mills, co-operative, private and corporate. Punjab is no exception. Here sugar already tastes bitter. The blame can be apportioned to policies of the government. In the current (2000-2001) cane crushing season that will last till mid-April, Punjab’s 14 co-operative mills are expected to crush nearly three lakh quintal against 2.65 lakh quintal last season while installed capacity is 4.68 lakh quintal. Enquires with authorities concerned show that this season sugar recovery is one per cent higher than that of the last year. It is 9.53 per cent against 8.73 per cent in 1999-2000. Just one per cent higher recovery means, on an average, Rs 10 crore less loss to a sugar mill. The entire gambit of sugar production revolves around input and output
pricing. The output pricing is determined by politicians. In the current year against Rs 52.80 per quintal as determined by the Centre, Punjab is paying Rs 100 per quintal. For every Re 1 higher payment per quintal, Rs 3.50 crore excess will go to farmers. Unlike Maharashtra, where payment is linked to recovery of sugar Rs 10 per 1 per cent increase) Punjab pays lump sum price. While farmers gain, mills loose out and suffer loses. The cooperative mills at present have cumulative loss of nearly Rs 460 crore. Even the system of levy (30 per cent) and so-called “free” (70 per cent) sugar is faulty. A mill can not sell sugar of its own sweet will. The release or sale is administered by government quota. Punjab Sugarfed based on recommendations of a report submitted by the National co-operative development corporation in November 1998 said mills be liquidated. The Chief Minister at a review in June last year rejected this and stressed “sugar industry be made viable”. There is a political angle too. Attached to these 14 mills (one co-operative mill at Budhladha is under liquidation since1994. The last bid of Rs 15 crore was rejected as the floor price determined is Rs 21 crore) are 1.80 lakh share-holders, farmers. Who can ignore them? Haryana is paying more price than Punjab Rs 105 per quintal. This leads to poaching of sugarcane. So pathetic is the condition of the co-operative sugar industry that more often than not losses are being met by postponing of principal and interest payments to the financial institutions and taking loans from the Punjab rural development board. The amount over due to the institutions is Rs 21.38 crore as on March 31 last. An equal amount of Rs 113 crore is due towards Punjab rural development board and Rs 42 crore by way of interest. The government gave Sugarfed Rs 40 crore in May last to clear cane growers’ arrears for 1999-2000. It is pointed out that 11 sugar mills out of 14 have no means to return any loans or interest thereon. The state government had given guarantee on those borrowings. Seldom responsibilities are fixed and effective steps taken to make sugar mills earn profits. |
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Malaysian buses to have ‘black boxes’ 34 Daewoo executives, auditors indicted Where there’s will, there’s electronic way Chor Bizarre adjudged best restaurant |
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Wipro gets contract Hughes, Sun tie-up Hinduja Finance |
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