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Friday,
January 4, 2002, Chandigarh, India  
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Remove
textile from Commodities Act: ICMF Banks,
insurers lock horns
HP plans
to raise loan from FIs |
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AirTel,
Escotel to share infrastructure GAIL to
invest 3,000 cr in pipeline expansion Agriculture
will push growth in Q4: economists Indian
wins Russian award Chamber
for industrial development
US eases
restrictions on computer exports
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Remove textile from Commodities Act: ICMF New Delhi, January 3 In a statement, ICMF Chairman said textile was brought under the ECA when there was a perceived shortage of some textile products and since there has been no shortage in recent years, there was no need for continuing textiles under this “draconian Act, 1955”. In his reaction to the Textiles (Development & Regulation) Order (TRDO) 2001, issued by the government late last month replacing the earlier Order of 1993, Dr Jaipuria said while the simplification of procedures was a welcome step but continuance of textiles under ECA was counter-productive. Reacting to the specific provisions of the revised TDRO, Dr Jaipuria observed that limiting the power of search and seizures to officers of the rank of Assistant Directors and above would curtail the inspector raj that the earlier TRDO had perpetrated. The Chairman also welcomed the specific provisions added in the TDRO stipulating that imported textiles should also follow the stamping and marking regulations applicable to the domestic industry. However, Dr Jaipuria suggested that a corresponding entry should be incorporated in the Exim policy, so that the stamping regulations can be enforced by Customs on imported textiles. He observed that the revised TDRO continues to provide for imposition of hank yarn obligation on the spinning industry. He pointed out that there was already an excess production of hank yarn in the country beyond the capacity of the handloom industry to absorb. The hank yarn obligation forced the spinning industry to pack 50 per cent of their yarn production on hanks, whereas the requirement of the handloom industry for hank yarn was only 25 to 30 per cent of the country’s yarn production, Dr Jaipuria pointed out.
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Banks, insurers lock horns
New Delhi, January 3 Speaking to reporters after a meeting of the bankers and insurers at the IRDA office here, New India Assurance Company Chairman K.N. Bhandari said: “We will meet again. The dialogue is on.” A top official of a public-sector bank said “there is reluctance among the insurance companies to allow the banks to sell more than one company’s products.” According to IRDA’s stipulation, a corporate agent is allowed to sell only one insurer’s products while brokers are allowed to sell products of as many companies as they like. However, HDFC Standard Life CEO Deepak Satwalekar indicated that the insurance companies are not willing to allow banks to sell more than one company’s product. “Why should an insurer be ready to train agents in banks if that agent is going to sell another company’s product,” he said, adding that the banks have to decide whether they want to merely “provide service” as it is done by brokers or “own the customer” as done by the agents. Although the discussions between top bankers and insurers ended in a deadlock, Arthur Andersen India’s Ashwin Parekh had suggested that IRDA and the RBI should keep the options open for banks for becoming either an agent or a broker.
PTI
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HP plans to raise loan from FIs Shimla, January 3 Mr Harsh Gupta, Chief Secretary, and Mr
S.K.Sood, the newly Finance Secretary, visited Mumbai early this week to explore the possibility of securing term loans from reputed institutions like LIC They met Mr
G.N. Vajpayee Chairman of the corporation, and other senior officers and discussed the matter in detail. The response of the corporation was positive and Mr Vajpayee asked the state to come out with a concrete proposal. Mr Gupta said the officers of the state and the corporation would hold another meeting soon at which the details sought by the corporation would be provided and the shape of the final proposal would be discussed. If all went well, a loan agreement would be signed thereafter. He said term loan was a better option than raising funds through
non-SLR bonds as the latter involved cumbersome procedures and required much time. Next, the government wants to take advantage of the steep fall in the rates of interest by replacing some of the existing expensive loans with cheaper ones. For this it plans to approach international financial institutions like the World Bank and seek a large structural readjustment loan. As per the medium term fiscal restructuring plan submitted to the centre to fund a permanent solution to the perennial financial crisis, the state will require loans to the tune of Rs 5000 crore up to 2004-05. While the total outstanding loans will cross the Rs 16,000 crore mark, the annual interest burden will shoot up to Rs 1,750 crore. In this year’s Budget indicated the total requirement of loans will be Rs 2,318 crore, including about Rs 1,300 crore to be raised through
non-SLR bonds. However, the Centre found the quantum of loan unsustainable for a state of meager resources. It asked it to peg the
non-SLR borrowings at Rs 508 crore for the year and it also provided an additional assistance of about Rs 350 crore to help the state reduce its dependence on loans.
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AirTel, Escotel to share infrastructure
New Delhi, January 3 AirTel and Escotel today announced that they have entered into an agreement to cooperate by sharing their infrastructure thereby ensuring saving in capital and operational expenses and time to launch for both the parties in their common circles. This kind of infrastructure sharing is quite prevalent in Europe. Mr Anil Nayar, President, Mobility, Bharti Televentures, said several initiatives like this would rapidly build the Indian telecom infarstructure. Mr Manoj Kohli, Executive Director and CEO, Escotel, said this tie up would result in savings for the operators and lower costs for customers subsequently. This would also enable the service providers to roll out their services to many more areas viably, he said. This cooperation is a sign of maturity in Indian cellular industry, Mr Kohli said hoping that other operators might follow suit in their circles as well. AirTel is
already operational in Delhi, Himachal Pradesh, Chennai, Karnataka, Andhra Pradesh, UP, Maharashtra, Gujarat, Madhya Pradesh, Tamil Nadu and Kerala. Escotel is operational in UP (West), Haryana and Kerala. It is in the process of launching services in Punjab, UP (East), Rajasthan and Himachal Pradesh.
UNI
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GAIL to invest 3,000 cr in pipeline expansion
New Delhi, January 3 “We plan to invest Rs 2,936 crore for laying a 610-km natural gas pipeline from Dahej in Gujarat to Vijaipur in Madhya Pradesh that would transport Liquefied Natural Gas (LNG) arriving from Qatar at Petronet LNG’s Dahej terminal,” GAIL Chairman and Managing Director Prashanto Banjerjee told PTI here. First gas at the 5 million tonnes capacity Dahej terminal is likely to arrive in early 2004 and the pipeline would be ready by then, he said. GAIL would distribute 20 million cubic meters per day of the regasified LNG through the pipeline system in Gujarat and Madhya Pradesh, he said, adding with this expansion, the total gas handling capacity of the HBJ pipeline system would go up from the current level of 33 million cubic meters per day to around 60 million cubic meters per day. The company plans to raise half of the project cost, about Rs 1500 crore, through domestic borrowings during 2002-03 fiscal, Banerjee said. “We expect to easily surpass last year’s profit of about Rs 1100 crore this year. Besides we have a good cushion of reserves and surplus which would be utilised to meeting the fund requirements,” he added. GAIL would also invest Rs 100 crore before December 2002 in the second phase of its diversification into telecom infrastructure. GAIL is set to expand its broadband network to cover 7,300 km interconnecting 60 cities in northern, Western and central India. The project involves laying of 1,950-km of optical fibre cable with DWM technology, with an initial capacity of 10 Giga bytes per second, Banerjee said. The important cities which fall enroute are Aligarh, Jhansi, Nasik, Sholapur and Hyderabad among others, he said, adding GAIL has already signed agreements with Bharti and Shyam groups to utilise the capacity once it is built up. Besides, a redundant link would also be established between the major cities including the Delhi-Mumbai sector. The company plans to increase its presence in telecom business by becoming an Internet Service Provider (ISP), he said. GAIL would also be investing close to Rs 800 crore in building a water pipeline in Andhra Pradesh to bring Krishna river waters to Hyderabad.
PTI
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Agriculture will push growth in Q4: economists
New Delhi, January 3 A bumper winter (rabi) crop would translate into a 4.5 to 7 per cent growth of the agriculture sector, compared to barely 0.5 per cent last year. They also dismissed as exaggerated fears of a long-term impact on the financial market of the current standoff of Pakistan or a war between the two nuclear-capable nations. This would have only a short-term impact on the markets. India’s economy recorded a 5.3 per cent growth in the second quarter of the current fiscal on the back of the agriculture sector, with a better than expected harvest of the summer (kharif) crop. According to a study by the Mumbai-based Centre for Monitoring Indian Economy (CMIE), the favourable monsoon has resulted in a 42 per cent increase in the sowing for the rabi crop during October-November. This is expected to result in a 7 per cent increase in agriculture produce and 33 per cent growth in oil seeds, CMIE said. The farm sector growth is expected to push up the demand for consumer durables by 4.7 per cent in the second half of the year and 3.5 per cent in the case of non-consumer durables, the CMIE study said. “Based on the favourable monsoon, we expected a 4 per cent growth in agriculture, though the government estimates an over 6 per cent growth”, said Shanshanka Bhide, chief economist of Delhi-based think tank National Council of Applied Economics Research (NCAER). “Compared to last fiscal, the outlook for the remaining part of the current fiscal is not good, but agriculture growth is expected to impact favourably”, N.R. Bhanumurthy, faculty member of the Institute of Economic Growth (IEG), told IANS. Despite fears that the global recession would continue to depress industrial growth and negatively impact the Indian economy, IEG is hopeful of an overall 5 per cent gross domestic product (GDP) growth in fiscal 2001-02, still down from 5.2 per cent in the previous fiscal. “Cyclically, after every two years of low growth, there is a jump in agriculture production. In the next fiscal year, beginning April, agriculture growth is expected to push rural demand and industrial growth”, said Bhanumurthy. If India achieves a 6 to 7 per cent growth in agriculture, it can look forward to over 6 per cent GDP growth, said T.K. Bhaumik, an economist with the Confederation of Indian Industry (CII). “On the downside we can hope to have 5 per cent growth and on the up side 6 per cent as we are hopeful of a minimum 4 per cent agriculture growth”, he said. The main concern of economists is about slow industrial growth and the depressed export front. India’s industrial growth has been below expectations so far. Investments have been subdued and exports have not seen the expected growth. Overall, NCAER’s Bhide felt the economy had performed below expectations during the fiscal due to the slowdown in industrial growth, less than expected investments and the downturn following the September 11 terror attacks. “Exports in particular have been impacted. As against 20 per cent growth last year, we would be lucky to have a positive growth this year”, said Bhide. This is a fear shared by other experts, who, however, see a revival in the IT sector. “We are still looking at 25-30 per cent growth in software exports, with companies seen to be diversifying their market base”, said Amul Gogna, an IT industry analyst with leading credit rating agency ICRA Ltd. India’s software exports touched $ 6.2 billion in 2000-01. While the government has been talking of pushing infrastructure expenditure, it is the non-plan expenditure that is going up, pushing back growth, said Bhanumurthy of IEG. India’s fiscal deficit is expected to climb to 7 per cent from the target of 5.5 per cent, said Bhanumurthy. Fiscal deficit is, however, not a matter of major concern, said CII’s Bhaumik. “The fiscal deficit is not expected to exceed the target much. At 5.5 per cent, it would be manageable. On the positive side, foreign exchange reserves are expected to touch a new peak of $ 50 billion. In addition, the agriculture sector can expect over six per cent growth”.
IANS
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Indian wins Russian award
Moscow, January 3 Gupta, 45, is the Director of the Amtel Joint Stock Company and is the first Indian to receive the award. It is given to eminent foreign nationals for their contribution to enhancing business and cultural ties with Russia. Among other recipients of this year's award are Mongolian President Bagabandy Natsagiyn, World Bank President James Wolfensohn, United Nations Industrial Development Organisation (UNIDO) Director General Carlos Magarinos, Tajik President Emomali Rakhmonov, CNN founder Ted Turner, Vietnamese astronaut General Pham Tuan, Franz van Seimeren, President of the Dutch company Mammoet that raised the ill-fated Kursk submarine and Walter Schwimmer, Secretary General of the Council of Europe. The award was conferred at a ceremony at Moscow's Russia Hotel. A number of prominent public figures, representatives of Russian business and political leaders, attended the ceremony. The award, instituted by the Best New Epoch Managers Public Fund, comprises a bronze bust of Peter the Great, a diploma and a silver medal. A panel comprising international financer George Soros, former German Chancellor Helmut Kohl and former International Olympic Committee (IOC) chief Juan Antonio Samaranch chose the awardees. Gupta had earlier received the prestigious Friendship Award from Russian President Vladimir Putin and a bronze medal from former President Boris Yeltsin for his contribution to promoting business in the country. Gupta, who has major stakes in several of Russia's leading tire factories, controls 25 per cent of Russia's huge tire industry. Gupta, who came to the former Soviet Union as a student, took advantage of the unprecedented opportunities that became available in the wake of then Soviet President Mikhail Gorbachev's Perestroika revolution. Apart from tire production, he has made forays into the food industry and TV production and owns factories in Russia, Byelorussia and the Ukraine.
IANS
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Chamber for industrial development Chandigarh, January 3 Mr Amarjit Goyal, Chairman, Punjab Committee, PHDCCI said that there is an imperative need for reforms in the electricity board. He suggested that a study be conducted to find out reasons for industrial sickness in order to take appropriate measures in this regard. Though the state government is providing various incentives for the food-processing industry, but the fruits and vegetables being produced here are only the table variety, said Mr Satish Bagrodia, Member Managing Committee, suggesting an in-depth research in to the matter by the Punjab Agricultural University (PAU). On the amendments in various labour laws, Mr R.S. Sachdeva, Co-chairman, Punjab Committee of the Chamber said these have improved the working of the industry in the state . However, these benefits need to be extended to the services sector, he said.
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