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Friday,
July 27, 2001, Chandigarh, India  
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CORPORATE NEWS
WTO demands commercialisation of agriculture
Haryana team bound for Malaysia, China
LSE approaches SEBI for trade in derivatives Haryana to set up road development
fund New Delhi, July 26 India and the World Bank today signed three agreements for projects in Karnataka, including an economic restructuring project. |
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Disinvestment of Goa Shipyard opposed Overcharging by PSIEC flayed Incoming calls to be charged now
Sony Corp posts
slide in earnings
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CORPORATE NEWS
New Delhi, July 26 The company has posted Rs 12.93 crore net profit in the same period last fiscal over Rs 350.88 crore sales turnover. Rising raw material costs coupled with lower sales realisation impacted the net profitability of the company, it said in a statement here adding high crude oil prices in turn hiked prices of all petro-based raw materials used by the tyre industry like nylon cord fabric, carbon black and synthetic rubber. Spencer & Co Dabur India SKF Bearing Rhone Poulenc Blue Dart Century Textiles Birla Sun Life Carrier Aircon Nicholas Piramal Bank of Baroda Monsanto India Philips India |
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WTO demands commercialisation of agriculture IN
a globalised economy, progressively being developed under the WTO regime, subsistence farming is fast losing its moorings. Unless a farm unit is enabled to operate within the framework of a closed economy, which is impossible within a globally interactive growth oriented socio-economic systems, trickle down impact of global market in terms of kind, quantity and quality of goods and services demanded and traded is bound to be felt by any farm enterprise. Under the regime of tariffs and physical controls, the domestic markets could be protected or even insulated in the same way as regional or local markets could be enabled to operate in a segmented market. Yet, the segmented market is always an inefficient market in its conduct and performance. As the development of a national market through integration of segmented markets improves the efficacy of factors of production, the same way the trade related agreements under the regime of world trade organisation are, in principle, aimed at integrating the national markets into a single global market so that competitive strengths of national economies, delinated by their natural resource endowment, technological development and managerial skills, can be optimally exploited. This in turn is assumed to augment the levels of gainful employment and income of the people and improve the capital base of producing units in all the participating economies of the world. A typical example of a highly segmented market in a partially closed economy was the grain market of the erstwhile Soviet Union with more than one hundred price levels for different producing units (collectives) in the country. It insulated their inefficiencies because administered prices for different units were decided on the basis of their individual costs of production. Prices determined by demand and supply were not allowed to play any role. This led to a serious misalignment of the production system with the resource endowment of different farm enterprises in different regions and areas of the country and left no incentive for improving production technology and application of modern management skills by individual farm enterprises. As a consequence the production system did not respond to the rightful signals from the market. Food production, therefore, failed to meet the national requirements. This, inter alia, was one of the strong reasons for the collapse of the Soviet system. It is the captive market nurtured by the system of support prices and government procurements that these otherwise unviable farms could adopt high yielding crop varieties, use modern inputs and some improved farm practices that created a situation of spurious foodgrain surpluses characterised by supply exceeding demand. This has in turn led to the serious problems of market clearance, resulting in build up of huge stocks of foodgrains procured by the government and consumers lacking the needed purchasing power. Channels of distribution having been almost choked due to the lack of demand at the prices the foodgrains cost, the
bludgeoning stocks are causing a strong back pressure on the production system. Yet, on political grounds, the support prices are pushed up year after year bypassing the recommendations of Commission for Agricultural Costs and Prices and government remain committed to purchase all the stocks that are brought to the market, though often reluctantly. Consequently, farmers in spite of facing severe inconveniences in the produce markets, keep growing more and more of foodgrain. There is no economic rationale in the situation that has emerged in the domestic foodgrains market. On one hand, it continues to be remunerative for the farmer to keep producing foodgrains in excess of demand and on the other, he carries no compulsions and gets no motivation to diversify his product-mix to meet the shortage of commodities like edible oils, pulses, milk and milk products. In such a structurally distorted domestic market, where the farmer has been enfeebled enough to operate on his own strength, he cannot be expected to compete cost-effectively in a competitive globalised market. Under such a dismal situation, the WTO regine is bound to cause catastrophic tribulations in the farm sector. Yet, the WTO is a fait accompli. Fortunately, however, the WTO regime while posing some serious challenges to the farm sector, also offers some
opportunities that await exploitation to our advantage. Not withstanding the possibilities of getting some modifications made to our advantage or to minimise our disadvantage through periodical ministerial meetings, the veritable answer to the problem is to create conducive environment in in our agriculture sector that promotes
commercial farming and minimises the recourse to subsistence farming. The first pre-requisite is that an effective land market must be developed that allows the viable farm units to grow. A land lease market must remove existing apprehensions of losing the land if leased out for longer periods. Also to the extent, through the earlier phases of land reforms, the surplus lands have been distributed amongst the landless families, these so called farmers must be helped to exit their tiny unviable pieces of land held by them in fractions of acres through providing them with an access to gainful employment outside the farm sector. Once this process gains momentum, the farm units that become commercially viable through purchase and/or long term lease of adjoining lands, will start generating more employment within the farm sector also. For this purpose the agrarian laws of the land must get suitably amended that facilitate creation of effective land market. In the absence of such an enabling environment, other actions and steps taken to remedy the situation will remain only inconsequential palliatives. The second essential requirement is that our administered pricing policy and procurement system must play a pro-active and complementary role within the stipulations of the WTO regime to encourage production that relates to the market demand. We import edible oils worth more than Rs 8000 crore annually and pulses too remain in short supply. The structure of support prices and procurement system must get so restructured and realigned that production of oilseeds and pulses get the needed incentive and the prices of cereals, specially wheat and rice get frozen for a couple of years in order to prompt the farmers to bring in much needed shifts in their production patterns. It is of paramount importance that farm production gets adequately related to the changing market demand in order to improve farm incomes, build capital base for the farm units for adoption of improved production technology and facilitate market clearance to avoid heavy burden of producer and consumer subsidies on the government and ameliorate hardship to the growers in the market place. The product-mix which is not related to the market demand, is neither in the interest of the producers, nor is beneficial for the economy. Such a production-mix is unsustainable and goes irrelevant in the globalised market. (To be concluded)
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Haryana team bound for Malaysia, China Gurgaon, July 26 According to the founding member of the Gurgaon Chamber of Commerce and Industry and Chairman, Malt Company (India) Ltd, Mr P.K. Jain, who is part of the delegation, said today the tour was a joint effort by the Haryana Government and the PHD Chamber of Commerce and Industry (PHDCCI). The
delegation would be jointly led by Mr L.M. Goyal, Chief Secretary of Haryana and Mr Sushil Ansal, president of the PHDCCI. The other members of the delegation are Mr Depinder Singh Deshi, Additional Principal Secretary to Chief Minister Om Prakash Chautala and Mr Pawan Kumar Sahni and Mr Shashi Ranjan Parmar (both members of the Haryana Vidhan Sabha). The Chairman of Himachal Pradesh Committee of the PHDCCI, Mr Satish Bagrodia, the Chairman, LNJ Bhilwara Group, Mr Ravi Jhunjhunwala, the Chairman of Sawhney Tyres, Mr B.L. Sawhney, the Managing Director of Asia Resorts Ltd, Mr Akash Garg and the Area Director of MGRM Medicare Ltd, Mr Nalin Goyal, are also part of the delegation.
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LSE approaches SEBI for trade in derivatives Ludhiana, July 26 Mr R.C. Singhal, President, LSE said,‘‘ With a view to help the brokers and investors in the region, the management has proposed to commence trading in derivative products via the NSE and the BSE through its wholly owned subsidiary, LSE Securities Ltd. A proposal has been already submitted to SEBI to allow the exchange brokers to trade in derivatives.’’ He disclosed that SEBI has assured to consider the proposal sympathetically though under the prevalent rules the sub-brokers of the regional stock exchanges were not allowed to trade in derivatives. The LSE has asked SEBI to allow its brokers, who were also sub-brokers of the LSE Securities Ltd, to trade in derivative products. Mr Singhal further said two years back, LSE had conceived the deal of subsidiary route for the survival of regional stock exchanges (RSEs) which had worked well. Following the lead taken by LSE many other RSEs such as Rajkot, Pune, Chennai, Hyderabad, Jaipur, Kanpur and Vadodara had also set up their own subsidiaries for getting membership of NSE and BSE which had helped them survive.
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Haryana to set up road development
fund Gurgaon, July 26 The need for the fund is on account of firming of the view in the higher echelons of the government to institutionalised mechanism for prompt repair and construction of roads by the agencies concerned of the state. Also, about half a dozen teams have been constituted at the state level to conduct surprise checks on the use of standard of materials used in the construction of roads. The Deputy Commissioners in the districts have been asked to inspect the roads to ensure the use of quality materials used for construction. Moreover, a decision has been taken to create a new division in the PWD exclusively for Gurgaon for better maintenance of roads. To ensure use of high quality of materials for construction and repair of roads, the state has taken a policy decision to discard the practice of providing bitumen to the contractors engaged by the department, Mr Prashant added. He said the ongoing construction works for upgradation of all state highways in Haryana as well as the works on the roads in the districts will be completed by the end of this year. |
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India & World Bank
sign 3 agreements New Delhi, July 26 Other projects include the Karnataka State Highway Improvement Project and the Karnataka Watershed Development Project. The Karnataka Economic Restructuring Project was signed for IDA soft credit of $ 75 million and World Bank loan of another $ 75 million. The entire assistance would be in the form of a fast disbursing loan meant for budgetary support to cover the fiscal cost of the reforms, including the cost of power sector restructuring, introduction of Value Added Tax, civil services reform, PSU restructuring and voluntary
retirement scheme. The total cost of the Karnataka State Highways Improvement Project is estimated at $ 447 million with a World Bank loan of $ 360 million and the counterpart funding of $ 87 million by the Government of India. The total project cost of Karnataka Watershed Development Project is $ 127.60 million out of which the World Bank is providing IDA credit of $ 100.4 million.
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Disinvestment of Goa Shipyard opposed New Delhi, July 26 The Committee said that the transfer of the management control of Goa Shipyard Limited to a strategic partner could prove problematic. Since the main customers of the public sector undertaking were the Navy and the Coast Guard, Government control of the enterprise should continue, the Committee opined. The Committee did not agree with the views of the company that the disinvestment of the PSU would lead to improved efficiency and increased turnover. It recommended that the company be considered for grant of shipbuilding subsidy to enable it to compete in the international market and fetch more export orders. The Committee also suggested that a corpus fund be created to enable the company to supply ships on liberal payment terms. This would encourage export to third world countries, it felt. It recommended that 30 per cent subsidy be given for export of warships, irrespective of the size and type of the vessel.
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Overcharging by PSIEC flayed Ludhiana, July 26 The PSIEC has imposed addition charge on the allottees after the Punjab and Haryana High Court granted imposed enhanced compensation of Rs 2.13 crore to the farmers whose land was acquired by the government. Mr Joginder Kumar and Manmohan Singh Ubhi, President and Secretary of Electroplaters Association respectively have strongly decried the imposition of the extra charges on the industrial units by the PSIEC.
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Incoming calls to be charged now Shimla, July 26 It is learnt that Reliance has decided to charge Rs 1.20 per minute for each incoming call. The monthly rental for Airtel subscribers has been reduced by Rs 50 and shall now pay Rs 250 against the rental of Rs 300. The cost of outgoing calls has also been reduced to Rs 2.50 per minute from the existing Rs 3 per minute. The new rates will be applicable to the existing subscribers in two slabs with effect from August 16 and September 4.
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