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Monday,
May 7, 2001, Chandigarh, India  
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Selling kinnows on Internet Post-VRS blues for bankers 34 sectors record higher growth survey Himachali wins
motor cycle |
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The future will be mobile & wireless HP cess on power
to hit industry
Let rolling thing settle Q: I am a Punjab Government servant. My gross salary income for the F.Y. 2000-2001 will be around Rs 1,39,000. I am contributing Rs 48,000 towards GPF and Rs 3137 will be reinvested interest of NSC’s. What will be my tax liability for the F.Y. 2000-2001? Please elaborate “Additional rebate of Rs 5,000 for women tax payees” also for
A. Y. 2001-2002. Disinvestment of IA, AI in
trouble
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Selling kinnows on Internet This year kinnow marketing witnessed a new lease of life with the opening of various markets. There were enquiries from the East (as far as Bangladesh), the West, the South and it was for the first time North India experienced a trend of supply being less than demand. So the overall scenario was bright for fruit growers who had quantity and quality kinnows. Growers were approached by Farmersbazzar.com an agri-marketing portal promoted by a Bangalore-based company, Sanjeevani Infotech Ltd. They offered to be intermediaries between sellers and buyers while taking the responsibility of payments and transportation. Farmersbazzar.com aroused immediate interest amongst kinnow growers in Hoshiarpur but at the same time everybody was shaky with this new concept and rightly so. With no cyberlaws in place and with no previous tryst with IT, the farmers’ lack of faith in such a system was understandable. The mystery was unfolded and the first auction was carried on 23rd December. A truckload of kinnow was sold to Cochin. The process of selling fruit and vegetables on the Internet is very simple. The graded lot is inspected by the Farmersbazzar inspector and comments of the inspector are posted on the site. For example the comments could read like (80 to 90% colouring with 4% dry blemishes, whether the kinnows are waxed, soft, etc, etc). Buyers and sellers log on to the Internet at a given time for the auction. The seller (farmer, contractor) places an asking price and the various mandis bid on the farmers’ price. The deal can be clicked by either of the parties (1) by matching the asking price on the screen from the bidder’s side and (2) by matching the offered price on the computer from the farmers’ side. Once the deal was struck Sanjeevani Infotech arranged for transportation and the farmer’s responsibility remains till loading the truck. An authorised signatory of the company issues a post-dated cheque deducting 6% from the negotiated amount as part of the company’s commission which they prefer calling as service charges. With the first couple of auctions running successfully, there were certain advantages. (1) Internet connected 18 to 19 mandis online together to make the market more competitive. The highest bidder got the kinnow lot. (2) Unlike before when the farmer used to send his produce to a pre-destined mandi only to realise that there was a glut in the market, this system made every mandi bid according to demand. 3) It arrested fluctuations because the price was pre-determined. The farmer knows that at what price he has sold his kinnows. It is a much surer way of determining your price rather than the arthiya deciding it for you. (4) A farmer could first auction and plan his harvesting later. It ensured that farmers’ did not do distress sale because they had not plucked their fruit. However, practical problems started coming up. (1) It was felt that since horticulture produce is considered as “kucha mall” in the mandis, there would always be a dispute between sellers and buyers as there was no physical verification available through the computer. The only way a buyer could judge was on the basis of the comments issued by the farmersbazzar.com inspector. (2) Since farmersbazzar.com was charging a fee of 5% from the arthiya also, it was felt that it was in the arthiya’s interest to bid low to reduce his cost so that he could pay less service charge to farmersbazzar.com. (3) In a way a farmer was giving 10% — 6% as
commission charges and 4% which the arthiya had to pay to the farmersbazzar.com as service charges. The arthiya mentally adjusted that figure of (4%) while bidding. (4) In the absence of an in-built revenue model for the arthiya it was in his (arthiya’s) interest to buy kinnows at a lower cost to make money. In the traditional form the arthiya deducts from the farmer 10% commission from the total sale proceeds so to a certain extent it may be in the arthiyas interest to fetch higher price for farmers produce. (5) Lack of capital with the dot.com companies put them out of flavour with farmers as the arthiya was a loaning agency also. These issues skirted a debate amongst farmers vis-a-vis the traditional way of marketing and Internet marketing. Payments was the main issue and farmers kept enquiring from each other whether others’ cheques had been cleared before taking a plunge. But due to bad payments to some farmers by farmersbazzar.com fortunes swung back in favour of the traditional way of marketing. Though I have yet to receive payment for some of my kinnow consignments sold via the Internet, I, however, feel we cannot ignore this system in the near future. Infact the controversy today is not of the system being bad but with bad players behind this system. They are ruining the chances of horticulture produce going Internet savvy. With credibility of these dot.com companies at the lowest ebb, it’ll be long before farmers gave them another chance to even enter their farms.
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Post-VRS blues for bankers At the command of the World Bank the nationalised banks introduced the voluntary retirement scheme last year to reduce manpower and save establishment costs. There was an overwhelming response to the VRS and 1,25,000 staffers opted for this scheme. More than 60 per cent of them were from the officer category. The officers opted for the VRS in a big way due to the fear of frequent transfers, and lot of accountability. Officers were made a scapegoat for everything going wrong. The unions had downgraded the authority of officers. The government has lost most of the experienced manpower. The government should have accepted the applications of only those VRS optees whose service records were not up to the mark or of those who were a burden on the bank’s profitability, were inefficient and redundant. The scheme should have been offered gradewise, scalewise or categorywise to
eliminate unwanted manpower. The government spread a message among the general staff that it would reduce the retirement age. So far there has been no move to reduced the retirement age even though this is the requirement at the national level keeping in view the large-scale unemployment and need for employing computer literate manpower. The government and the IBA also floated a rumour that the remaining staff would be redeployed and there would be large-scale transfer. It appears that the government is still afraid of unions and there are no staff adjustments. The main burden of work due to the large-scale outflow of staff has fallen on officers and they are hard pressed and have started suffering from various health problems like high blood pressure, hypertension, heart attacks, and other psychic problems. Ours is a welfare state and it is the duty of the government to look after the retirees also. The government has not come out with any scheme to settle the employees opting for the VRS. A large number of employees remain unsettled. The reduction in the rate of interest on small savings has adversily affected the VRS optees. Ninety per cent of the VRS optees are pension holders and they have started getting pension prematurely, putting a burden on the banking industry. More than 75 per cent of the ensuing staff are CPF optees and banks contribute an equal amount of employees contribution to PF. This hurts the profitability of the banks. Customers are also suffering due to the shortage of manpower in banks, mismanagement, non-deployment of proper staff, haphazard and hasty decision on the VRS. Private banks are making use of this situation and lot of business is being shifted to such banks. |
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34 sectors record higher growth survey New Delhi, May 6 As per the data released by the Association Councils, Confederation of Indian Industry, 101 out of 132 sectors surveyed, which accounted for more than 65 per cent of the total production, showed a positive growth during 2000-01. A total of 34 sectors, including oil and natural gas, agri and food, electrical machinery, glass and glass products, rubber, refractories registered higher production growth in 2000-01 compared to 1999-2000. Out of 101 sectors clocking a positive growth, 11 sectors had achieved excellent growth of more than 20 per cent, 29 sectors had recorded 10-20 per cent growth and 61 sectors had moderate growth between zero to 10 per cent. The sectors recording higher growth during last fiscal over the previous year included three-wheelers, LPG, diesel, petrol, nuclear power, textile machinery and air conditioners.
PTI
Himachali wins
motor cycle Kurukshetra, May 6 A total 501 prizes were given. Each winner will be informed and the list of the winners will also be displayed in villages. FACE was constituted to provide the technical information and to remove the difficulties of farmers in the cultivation of Basmati. According to the company, FACE help the farmers by way of providing technical know-how, spray pumps and best quality seeds at concessional rates for the cultivation of Basmati. The farmers are also given guidelines and precautions. All activities are performed with the help of experienced and able employees and scientists. Haryana Agriculture Director Rajiv Arora was the chief guest of the function. Various officers, farmers and sarpanches of Kurukshetra and Karnal districts were also present. |
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The future will be mobile & wireless London Do not worry, the consumer electronics giants have a solution: combine half a dozen gadgets into a single device. This idea is seen as the salvation of the mobile phone industry, which is suffering from a slump in handset sales. (Ericsson and Motorola are closing factories, while Siemens is shedding staff.) It is also seen as prime territory by computer industry giants such as Compaq and Hewlett-Packard, which are looking for new markets as growth slows in the PC sector. Adding extra functions could give many people the incentive to buy a new mobile phone or handheld computer. And the ultimate PDA (personal digital assistant) will do just about anything. It will handle both voice and data calls, send SMS text messages, and access the internet to collect email and faxes and surf the web. It will have a built-in electronic book reader, an MP3 player and it will play games. It will keep track of where you are, using location services and on-screen street maps. In the future, you may well use it not just to keep track of your spending, but to pay for things via its ``electronic wallet’’ facility. And if your PDA-phone on steroids does not have a built-in camera, you will be able to plug one in, either to take snapshots or to use for videoconferencing. We are not there yet, but we are getting close. Mark Squires, Nokia’s business development manager, says his new Nokia 9210 Communicator phone can already do most of those things, ``and I haven’t even started to load software on it yet’’. The Compaq iPaq and HP Jornada palmtop computers are also being sold as multifunction devices. The built-in software includes pocket versions of Microsoft Word, Excel, Internet Explorer and Money, and users who buy Microsoft’s Autoroute package can load Pocket Streets. These PocketPCs also include an electronic book reader, a voice recording facility and a Windows Media Audio player as standard. What they do not have is built-in mobile phone communications, but that is the sort of thing that could be added via a plug-in module. The VisorPhone, which plugs into a Handspring palmtop running Palm OS, is one example. The resulting competition should be good for consumers: all sorts of gizmos will be competing for the space in your pocket, and the pound in your pocket. (More likely several hundred pounds.) But it may also create a lot of confusion. Of course, everyone agrees the future will be mobile and wireless. However, there are broad battle lines being drawn between two camps. On one side are the voice-centric products, such as mobile phones. On the other are data-centric devices, such as PDAs. But both will have similar functions, and may well use the same software. The leading candidates include Palm OS, Symbian’s version of Epoc, spun out of Psion, and Microsoft’s PocketPC. Some suppliers are also expected to use mobile versions of GNU/Linux, the free ``open source’’ clone of the Unix operating system. Ultimately, many people expect the market to ``shake down’’, as Squires puts it, to a small number of devices. The biggest, heaviest and probably the most expensive will be ``clamshell’’ devices with built-in keyboards and screens, such as the Psion-based Nokia 9210 Communicator and Hewlett-Packard Jornada 720, which runs Microsoft Windows CE (originally, Consumer Electronics). Screen resolution should be about 640 by 240
pixels: half a PC’s standard VGA screen. These devices appeal to people who really need to enter data on the move, not just look up information downloaded from a PC or the web. The next class will be multimedia devices that replace the keyboard with handwriting recognition on a touch-sensitive screen, which should be at least quarter-VGA (320 by 240 pixels). You will not hold these devices up to your ear to make phone calls— that makes it hard to see the screen — but use an earpiece instead. So far, this category is populated mostly by ``concept phones’’ and reference devices such as Symbian’s Quartz. However, PocketPC-based phones such as the Sagem and Trium Mondo, and the Handspring VisorPhone, come close. The third category is the ``smart phone’’. This is basically a smaller and lighter version of the multimedia device but in the shape of a conventional mobile phone. The screen will be about half the size (and less than half the price), but could have the same resolution. The smart phone uses a numeric keypad instead of handwriting recognition. Examples include the Ericsson R520, and a string of forthcoming devices based on Microsoft’s Stinger reference phone, such as the Sendo 100. The smallest, lightest and cheapest device is the ordinary mobile phone, but it will become increasingly less ordinary.
By arrangement with The Guardian
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HP cess on power
to hit industry The challenge arising out of the WTO and removal of QRs is weighing heavy on the minds of the industry of this region. Some sectors like light engineering are relatively safe for the time being while textile is in the thick of the battle. Punjab has the largest concentration of SSI units and this sector is the mainstay of state’s economy. Instead of crying we have to face the gauntlet. Biggest hurdle is the government apathy. Nobody is ready to listen to the grievances of the industry. On the contrary some vital decisions don’t take even a flash of a second provided some interest group is behind this. Only recently the vanaspati industry came on the verge of closure when the Finance Minister announced that sick units are entitled for 20 per cent Customs duty. Electricity is the base for the industry. Now this infrastructure is becoming the cause of gloom and doom of industry. Every possible levy is being imposed on power to increase its already high price. Latest in this series is the proposal of the H.P. Government to impose cess of 10 paise a unit on hydro-power being generated in H.P. Earlier, it was proposed about a decade back but it failed to get Presidential assent. H.P. expects to garner over Rs 200 crore through this levy. All political parties are together on this issue and they are mounting pressure on the Prime Minister. This cess has adverse effect on Punjab’s economy. Punjab’s share of H.P. hydro power is quite high. Punjab is getting about 5000 million units of hydro power being generated in H.P. This component has to go up as Punjab is trying for more share in hydro power. So 10 paise/unit cess will spell doom for the industrial consumers in particular. The Centre is also proposing 5 paise/unit cess on power for infrastructural development. Back home the state government levied octroi on power @ 2 paise a unit to start with in 1994. Now this has gone up to 7 paise a unit and local self-government are always on the look out for bigger jumps. For any persons outside the ambit of the industry it is difficult to understand the impact of this amount otherwise looking so light. Every 10 paise increase in the rate of power cost of steel goes up by over Rs 150/MT. In steel trade this difference can make or mar the user in the stiff competition. So before any political person in the government talk about the danger of the WTO to our industry he should first see what the government is doing. The government apathy is worse than the WTO challenge. It is time to reduce the cost of production. Power plays major role in this. In view of the pressure from the H.P. Government on the issue of cess the Punjab Government has to present its own case. If this cess is accepted in principle it may spell doom for Punjab’s economy. At the moment the rate of power and its scarcity is taking a heavy toll of Punjab’s industry. During the recent months the prices of steel have gone up through the root and user industry is not able to bear this burden. The Chief Minister should exert pressure on steel ministry to send more steel to Punjab. |
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by J. C. Anand Let rolling thing settle There was only a nominal change in the Sensex last week: from 3519.16 points on April 27 to 3514.59 points on May 4. The same pattern is likely to be repeated this week, with some possibility of the Sensex moving down a little but with no prospect of any bullish rally. No trader is anxious to build a long position. The change-over from badla-based forward trading with full scope for arbitrage to the rolling mode of transactions with no badla and arbitrage facility, which would come into effect on July 2, has made the market insipid. There is also little possibility of any major modification in the July 2nd scheme of things. Only ban on short sales will be removed. There is hardly any doubt that under the new system, the trading volumes would fall at least initially for a few months. Even the introduction of futures and options to provide for forward trading in a number of liquid scrips would not much contribute to compensate for the fall in trading volumes. The rolling mode of trading with settlement on T-5 day might favour investors who have ready cash in hand but not traders. At present, futures and options, introduced in June 2000, for index trading has not attracted large volumes. This can be judged by the fact that the average daily volume of Sensex futures has not crossed Rs 10 crore. Even Nifty futures have not crossed the average daily volumes of Rs 12 crore. Introduction of futures trading in select scrips may be a little helpful but it would take considerable time before traders get used to it. The argument that the rolling settlement in the US stock exchanges has not affected volumes in market trading is not convincing. The trader in our country has at first to get used to the new system before he opts for the new system with full vigour. The small investor will take a much longer time to get used to it. The best advice that can be given to the small investor is that he should keep away from the market for the present and enter it only when the new system comes into operation fully. Even otherwise, the corporate sector is not performing well and the market cannot expect any booms in the coming months. At best, the software companies will continue to do well, but with a relatively slower rate of annual growth. During the last week, a number of top companies have declared their results. Reliance Industries has reported a 10 per cent higher net profit for its annual results but deeper analysis shows that actually some cosmetic treatment to the balance sheet alone can justify it. Actually the net profit is much lower. The fourth quarter (ended March 31, 2001) reveals a fall of 17 per cent in its net profit. But the company is one of the best managed companies in India and can be expected to do well even during the current year. The automobile sector is in a very poor shape. There is a large fall in the sales of motor cars and two wheelers — even though Bajaj Auto is reporting higher sales in this quarter. Goetze (India) has just maintained its last year’s net profit but has withdrawn Rs 1000 lakh from its general reserves to provide for the diminuation in the value of investments in Nanz Food Products. The company is expected to maintain its dividend. Exide’s net profit is lower at Rs 415.5 million as against Rs 488.9 million last year. Hero Honda has done well but its fourth quarter results (ended March 31, 2001) are not good. Althom Power is back to the black with Rs 12 crore net profit after completely wiping out the previous year’s loss of Rs 33 crore. The company has also booked orders of Rs 539 crore and now has a backlog of Rs 888 crore orders. The company is planning to merge its 16 subsidiaries. When this process is completed, the company would be able to add considerably both to its stature and to its profitability. It has not declared any dividend this year but it is expected to do so next year on the current year’s operations. Its present equity capital is Rs 41.42 crore and has a book value of Rs 21.5. It is at present quoting in the Rs 32-33 range. Its share is to be kept on the watch-list, for it is a top blue-chip in the making. It is the largest company in the world for the generation of electricity.
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by R. N. Lakhotia Q: I am a Punjab Government servant. My gross salary income for the F.Y. 2000-2001 will be around Rs 1,39,000. I am contributing Rs 48,000 towards GPF and Rs 3137 will be reinvested interest of NSC’s. What will be my tax liability for the F.Y. 2000-2001? Please elaborate “Additional rebate of Rs 5,000 for women tax payees” also for A.Y. 2001-2002. Dazy Rani Dhand, Chandigarh Ans: On the facts stated by you on your salary income of Rs 1,39,000 after granting you standard deduction of Rs 20,000 on the balance amount of Rs 1,19,000 income-tax and surcharge payable comes to Rs 13,860. From this amount you will get deduction of Rs 10,227 being tax rebate U/S 88 of the income-tax Act. Further, being a woman tax payer, you will get additional tax rebate of Rs 5,000. Thus, no tax will be payable by you. Now 2 per cent additional surcharge on income-tax is also payable. Q: I am a state government employee. Can I avail income-tax rebate on construction of two houses at different locations by taking loans from two different banks simultaneously and what well be the maximum limit for income-tax rebate on capital and interest part. V.P. Sharma, New Shimla Ans: You can claim income-tax deduction and tax rebate only in respect of one residential house. The total interest which will be allowed as a deduction in respect of residential house loan will be to the maximum extent of Rs 1,00,000 in case the loan is taken after April 1, 99. The tax rebate, however, will be on maximum of Rs 20,000. Q: My minor son has a PPF account under my guardianship in post office. Please advise whether on attaining the age of maturity to operate the account we will need some proof of age, besides birth certificate. Rani Mukerjee, Panchkula Ans: On attaining majority, your son will be able to operate independently a PPF account. Just age proof is sufficient to operate his account. |
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by K. R. Wadhwaney Disinvestment of IA, AI in trouble Incidences of bird-hit have indeed decreased as the Airports Authority of India (AAI) and several other agencies have worked in unison to improve sanitation conditions around Indira Gandhi International Airport (IGIA). Aviation analysts are, however, far from satisfied at the existing sanitation conditions around IGIA. The survey of experts continues to be of the firm opinion that many more measures must be undertaken to render the surroundings more hygienic. According to pilots, there are several open pits, which promote congregation of birds. There are also open garbage dumps, which are hazardous when plane lands or takes off. The AAI authorities are optimistic that the airport will wear cleaner look as soon as colonies are moved away from the existing location. Recently, an aircraft had to force-land as it was hit by a huge bird. No casualty was reported but the aircraft had to be grounded for some days. In a month or about, monsoon season will start. This is the time when incidences of bird-hit multiply. The authorities will have to move into action to maintain as hygienic conditions as possible.
Disinvestment The disinvestment of Indian Airlines and Air India, as feared, has run into heavy weather. The fact of the matter is that IA sale in particular has assumed difficult posture as two remaining bidders, the Hindujas and Videocon, have been tainted. The anti-disinvestment lobby is throwing different messages while the rebidding lobby is claiming ground with the Civil Aviation Ministry. According to aviation analysts, the position of the Hindujas and Videocon is very fluid. It will be difficult for any one of them to get clearance to buy IA. Pro-IA lobby has heaved a sigh of relief on the developments that have taken place. Whatever may be said for or against the disinvestment process is certainly going to get delayed. The IA authorities, in the meantime, have decided to go in for about half-a-dozen lease aircraft to stay in the competition. The authorities have written to the government for necessary permission to buy aircraft. The IA officials are optimistic that the permission will come about. Similar is the thinking of AI.
Maiden flight Airbus A-340-600, the first new jetliner of the 21st century, had a maiden flight late last month. It was painted in Airbus colours. The words were: longer, larger, farther, faster, higher, quieter, and smoother. The aircraft’s maximum take off weight is 365 tonnes. Airbus Industries claims that its operating costs are lower than competing aircraft. It is also considered a better revenue earner. |
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Punjab loan FIIs net buyers Inflation rises Car exports drop Telecom FDI Gillette collection |
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