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| Wednesday,
July 4, 2001, Chandigarh, India   
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US-64 —
What went wrong?
Govt to
cut support to PSUs gradually |
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Approval
for wheat starch project Four
food parks for Haryana A-I
disinvestment proposal comes under attack Convergence
bill for approval soon ICICI
Cap launches ‘express service’ $ 1 m
suit against McDonald’s
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US-64 — What went wrong? New Delhi, July 3 The young and the old voted alike when contacted for the fourth All-India Household Investors Survey. While 87 per cent of respondent above 60 years voted in favour of US-64, hundred per cent of the people in the age group below 25 years found the scheme reasonably safe to very safe. It is against this backdrop that the UTI’s decision to suspend sale and purchase of its popular US-64 fund has jolted investors. The low dividend of 10 per cent has also disappointed them. One question that is rankling the mind of the nearly two crore investors of US-64 is what went wrong? How safe is the fund? Is their money protected? Finance Minister Yashwant Sinha has tried to answer the last two questions. He categorically stated that the interests of the small investors will be safeguarded. “We assure the investors, particularly small investors, that their interests will be safeguarded”, he added. As for the question on what went wrong, the Minister said the Finance Ministry would scrutinise the issue. Market analysts said the scheme was a victim of stock market irregularities that have persisted for quite some time now. The scheme managers failed to read the stock market and instead of taking a cautious approach went ahead with increased investments. Investors of the Unit Scheme 64 were, however, more alert if one is to go by the repurchases made by UTI in the last financial year and the first two months of the current fiscal. In the last financial year, the total mobilisation under US-64 was Rs 2661 crore, which constituted 26 per cent of the total sales of UTI under all schemes. Repurchases during the year aggregated Rs. 5962 crore. During April -May 2001, the scheme had significant repurchases of Rs 4151 crore. The Unit Capital of the scheme was Rs 12,778 crore as on June 30, 2001. On the stock market front, US-64 has been increasing its exposure to the Indian Technology sector, telecom sector, pharmaceutical, petrochemicals, fast moving consumer goods sector and refineries. As of today old economy stocks comprise 88.29 per cent of the total equity portfolio of the scheme which includes Petrochemicals (28.44 per cent), FMCG (15.79 per cent) and Refinery (12.13 per cent). The scheme managers were expecting the stock market to boom after the please-all Budget presented by the Finance Minister but their judgement was misplaced. The bearish markets and the stock market irregularities have affected the valuations of the scheme adversely. In fact, UTI does not rule out the reserves of US-64 turning negative. Explaining the rationale behind freezing sale and purchase of US-64 units for six months, UTI officials explained that they were hopeful that the stock market would regain lost ground once the latest phase of reforms like abolition of badla, introduction of rolling settlement system and other measures are in place. UTI said the markets are expected to readjust to the changing regulatory framework and future rallies in the market would hopefully be sustainable. This was the rationale behind suspending sale and purchase for six months, the officials explained. UTI is hopeful that after six months it would be able to make a smooth transition to the desired Net Asset Value mode. Once this is done, the sale and purchase of US-64 units would be market determined and the arbitrary administered price scheme would stop. In other words, after the sharp decline in the interest rates offered by bank deposits and other savings instruments, yet another popular savings scheme would start offering market-determined returns. The scheme may be saved but it is bound to ruin the sleep of the investors,
particularly small investors. |
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FM urges ministries to control revenue New Delhi, July 3 Today’s was the first meeting called by the Finance Minister, Mr Yashwant Sinha who is seeking to draw out an action plan to turnaround in the economy which recorded a dismal 5.2 per cent GDP growth in the last fiscal (2000-01) as revealed by the latest figures of the Central Statistical Organisation (CSO). Expressing concern over the slow down of the economy and disappointment over recent GDP growth figures, Mr Sinha sought to impress upon the FAs the need to encourage capital and productive expenditure for achieving an early turnaround in the economy. Underlining the importance of spacing of expenditure, the Finance Minister urged FAs to ensure more systematic management of expenditure and avoid a situation in which bulk of expenditure takes place in the last quarter of the year. Mr Sinha said that prudent economic management involved the evolution of a definite system of quarterly review of expenditure projections so that appropriate steps can be taken to monitor and manage expenditure properly. Citing instances where many agencies have huge unspent balances of Plan funds released from
administrative ministries, he urged the FAs to monitor the unspent balances on a month to month basis and also advise the administrative ministries in the matter of release of funds. “It is very distressing if the money supposed to reach the people of the country goes from the Centre and just gets deposited with these agencies”, he commented. Emphasising the importance of zero-based budgeting, the Finance Minister urged FAs to ensure that zero-based budgeting becomes a reality in the Tenth Plan. He felt it was very crucial for optimising and containing growth of government expenditure and utilising scarce resources in a more productive manner and pointed out that no project of the Ninth Plan would automatically be allowed to graduate into the Tenth Plan without being subjected to a rigorous and thorough scrutiny. Taking serious note of the short-fall in non-tax revenue from the dividends and interest receipts from public sector undertakings, the Finance Minister asked FAs to devote greater attention to these aspects since default in these areas distorts the accounts of the government. The Finance Minister has expressed disappointment over the latest CSO figures on the GDP growth rates and said that the 5.2 per cent figure belied the anticipation of the Finance Ministry. Over the next few days, the Finance Minister will be meeting the RBI Governor, his ministerial colleagues and industry honchos to thrash out the broad contours of an action plan to reverse the downtrend. |
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Govt to cut support to PSUs gradually Jammu, July 3 The government continues to be faced with financial constraints and the state Cabinet has come to the conclusion that government could no longer afford the luxury of providing budgetary support to the PSUs which bank on this support even for meeting the wage bill of the employees and the workers. The Cabinet has decided that the budgetary support to the PSUs be gradually reduced and those units which “cannot meet this requirements should be considered to be closed.” Another important decision taken by the Cabinet is that those officers who are still in service or those who have a few years to retire should be appointed members of the Public Service Commission, and State Subordinate Services Selection Board. The government has formed an opinion that by appointing retired officers as members of these two boards entailed additional expenses. The government has suggested to the concerned agencies to encourage voluntary retirement of employees which would reduce the burden on the exchequer and allow the concerned departments to weed out “deadwood.” In addition to this the IAS, IPS, IFS and KAS cadres be periodically reviewed so as to bring down their present strength which could help the government to reduce the annual expenses on the salary and perks of the officers of these cadres. The government has set up two committees, Standing Cabinet Sub-committee (SCSC) and Standing Screening Committee (SSC) for filling up vacant posts in different government departments and for checking other administrative lapses. The second administrative departments shall refer all vacant posts to the SSC which after screening the list refer the scrutinised to the Public Service Commission for direct appointment. In case of non-gazetted posts the SSC would adopt the same
procedure and sent the list, after scrutiny, to the State Subordinate Services Selection Board for interview and other formalities for making the selection of the candidates for the vacant posts. The SSC would also function as Standing Establishment Audit Committee for reviewing the establishment structure of various departments periodically and suggest restructuring with emphasis on reduction of nonproductive posts, particularly at the higher levels. |
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Approval for wheat starch project Chandigarh, July 3 The Board further approved the proposal of the Punjab Agro Industries Corporation (PAIC) for promoting the setting up of a food park project at Bara village in Fatehgarh Sahib district at a cost of Rs 15.10 crore. In Punjab, the current need today is to shift to other crops from the dominant wheat, paddy cycle by creating infrastructure for fruit and vegetable processing — from the stage of the nurseries to handling, transportation, collection centres, sorting, grading and waxing lines, pre-cooling-cum-cold storage / controlled atmosphere and marketing. The proposed food park will supply nursery material to 1,000 contract farmers to cover 5,000 acres in 50 km radius to produce 50,000 metric tonnes of vegetables. The horticulture production and contract farming will cover Patiala, Fatehgarh Sahib, Sangrur and Ludhiana districts. Ten collection centres will be located in the production areas. A pack house and controlled atmosphere storage will be located at Sirhind with the capacity to handle 90 MT of fruits/ vegetables every day, besides having a 2500 MT high humidity cold storage. Ten fruit processing units will be identified and there will be about 30 retail marts also to provide a retail network also. The project will have a sophisticated field laboratory to maintain the highest standards. It will have the gestation period of about one year. The Board also approved a Rs 21 crore project for production of cellulose, silica and other related products at Kurali in Ropar district. The Board followed up its earlier decision to reduce the shareholding of ECP in Punjab Communications to 26 per cent from the present level of 70 per cent by appointing S.B.I. Capital Markets Ltd, Mumbai, as disinvestment advisers and further giving its consent to the process of disinvestments of shareholding through sale of its shares to a strategic partner after referring the matter to the State Disinvestment Commission.
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Four food parks
for Haryana Chandigarh, July 3 The state here today began to gather inputs for the policy from experts, industry, bankers and the Central Government by organising a seminar co-chaired by former Union Minister and Economist Charanjit Chanana and chairman, Food and Agriculture Sub-Committee of CII (Northern region) Gokul Patnaik. The seminar on ‘’Food processing in Haryana: opportunities and policy initiatives’’ was inaugurated by Haryana Chief Minister Om Prakash Chautala who underlined the need to maximise gains for farmers through food processing which can stop the decay of perishables and enhance the holding capacity of the farmer. The Chief Minister announced that the state would set up four food parks in Rewari, Jhajjar, Dabwali and Saha (near Yamunanagar) providing to push the growth of the food processing industry and become catalyst . Deputy Secretary of Food Processing Ministry A. K Goyal asked the state government to set up a nodal agency in the form of a directorate for matters related to food processing and informed it about the policy encouragements to the entrepreneurs, state government and PSUs. Mr Goyal asked the state government to come up with projects in the sector for which the Central Government was eager to help and sufficient funds adding that the Union Government will now provide Rs 4 crore for each food park, instead of the private parties. Vice-President of the Pepsico India Holding Ltd Kevin Parker told
the government to learn from the experience of the company in contract farming has a spread-effect on the economy of Punjab and is now being replicated in Haryana and has mutually benefited the company and the farmers. The Dutch agro-financing major ranked 15th in the world Rabo’s director food and agri-business Rajesh K. Srivastava expressing apprehensions of financier to processing projects, said the policy must go into forming a logistic management company on the pattern of Gujarat, should start accepting warehousing bills of exchange, create agri-service centres in efficient hands and offered finances for these facilities. The policy makers were asked to create cold chains, value chains, backward, forward linkages, international food standards, R and D at the state level, packaging facilities, change in the prevention of the Prevention of Food Adulteration Act, tapping the Indian technology of preservation through radiation developed by the Bhawa Atomic Energy Institute. |
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A-I disinvestment proposal comes under attack New Delhi, July 3 General Secretary of the Communist Party of India (CPI), Mr A.B. Bardhan said that true worth of the company should be at least around Rs 10,000 crore after taking into consideration all assets, aircraft, maintenance and training facilities, property and also the available opportunities. However, Mr Bardhan feels that the global advisor may suggest a substantially lower amount, “possibly only about 20 to 25 per cent of the above (Rs 10,000 crore) amount”. “Even if therefore the government were to fix the reserve price at a somewhat higher level, will the government not be selling off its shareholding for a very small amount”, the CPI General Secretary said in a statement here today. Questioning the very process of the adopted by the Disinvestment Ministry, he said that it has led to a situation where a single bidder — Tata-Singapore partnership is left. “Of the two bidders one — Hindujas — is so obviously tainted that the question of their selection as the strategic partner just does not arise. In fact the question the Disinvestment Ministry must answer is why the Hindujas have not been disqualified so far and why they were allowed to carry out due diligence of Air-India and given access to sensitive information”, Mr Bardhan wondered. Earlier last week, Mr Srichand P. Hinduja of the Hinduja Group had reportedly written to the Disinvestment Minister, Arun Shourie and Prime Minister Atal Behari Vajpayee lodging his protests over efforts to ‘sideline’ the group as a prospective bidder on grounds of security concerns. Urging the government to refrain from takng any final decision on the AI disinvestment programme, the CPI General Secretary called for a detailed examination of the issues by the concerned Parliamentary Standing Committee. Mr Bardhan’s views were endorsed by the Congress Chief Whip in the Lok Sabha, Mr Priya Ranjan Dasmunshi, who in a letter to the Prime Minister has also called for a thorough examination by the Parliamentary Standing Committee and detailed public debate on the issue. Mr Dasmunshi contended that the rewarding of the AI-disinvestment to a single bidder would result in undervaluation and the Congress leader also called for immediate sacking of global advisors, JM Morgan Stanley.  |
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Convergence
bill for approval soon New Delhi, July 3 She said the Group of Ministers (GoM) is meeting on July 11 to finalise the draft. “The Bill is expected to receive Cabinet approval before the ensuing session of Parliament and expressed confidence that it would be taken up and passed in this session itself,” she said inaugurating the Assocham summit on `Can Draft Convergence Bill Realise Telecom Revolution.’ She said the bill seeks to address the problems thrown up by spectrum management, bandwidth and right of way, the full potential of the digital revolution would be realised only when the stakeholders rise to the occasion to provide affordable communication to all. Ms Swaraj, however, cautioned against emergence of monopolies through the inevitable mergers and acquisitions and hoped that a truly competitive regime would emerge so that the consumers are not exploited. Mr P.K. Sandell of the chambers said the draft Bill ignores the need to ensure affordable communication and fails to spell out its mechanism. A truly convergent regime he said needs to give the investor the opportunity to invest in any services for which the convergent technology available globally permits him, services which can be tuned to the needs of the subscriber, he has to serve and inconsonance with their economic condition. |
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ICICI Cap
launches ‘express service’ Chandigarh, July 3 Mr Anuj Malhotra, Senior Manager, ICICI Capital Services Limited, Mumbai, announced this here today at a press conference. To begin with, the Express Service will be launched in Ludhiana on July 12 which would later be extended to Uttar Pradesh , West Bengal during
the initial phase, he said. The service also be extended to other centres
in a phased manner. The bonds will be sold in Demat form to the investors and there would also be a pass book system for added convenience. The Express Service would cover — Regular income bonds and Money Multiplier Bond. While the Regular Income Bond will take care of the regular savings needs of the investors, the Money Multiplier Bond is in the nature of Deep Discount Bond which will provide the investors a lumpsum amount at the end of a fixed tenure. The company during the current financial year expects to generate around Rs 5,000 crores. Mr Sandeep Sikka, Area Manager, Chandigarh a nd Mr Vikas Jain, Manager, Delhi were also present. |
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$ 1 m suit against McDonald’s Detroit, July 3 The boy, Vincent Ingram, discovered the maggots after chomping into the cheeseburger at home on June 19, said the attorney, Arnold Reed. “His sister is standing next to him and starts freaking out, because she sees these things crawling around his mouth and out of his mouth. She starts screaming,” Reed told Reuters in an interview. Reed said Ingram swallowed at least half a dozen of the maggots. As evidence, his mother saved the rest of the cheeseburger and the boy’s vomit. “Since this incident, he’s been freaking out. He won’t eat,” Reed added. The lawsuit filed in Wayne County Circuit Court in Michigan says Ingram ate the cheeseburger shortly after it was bought, but does not specify in what amount of time. McDonald’s in a statement called the allegations “questionable,” and said it had not received any facts to back up the claims. “We have not been provided with any evidence to validate this claim,” the company’s statement said.
Reuters |
bb
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