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Friday,
January 11, 2002,
Chandigarh, India  
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Duty hike
to delay financial woes CORPORATE NEWS
Set up
textile park to boost exports: CII Demand
constraint delays projects |
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Qualcomm
to invest $ 200m for stake in Reliance Connect
launches service in Bathinda VAT
deadline may be deferred Conference
on food today
Price
hike any time: Maruti
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Duty hike to delay financial woes New Delhi, January 10 The Finance Minister, Mr Yashwant Sinha, indicated to newspersons today that it was only a question of time before the hike comes through. “We are awaiting President’s nod” he said when asked about the hike. A senior official also clarified that the proposed hike had nothing to do with the war preparations and the move was meant to help contain the fiscal situation from going awry due to poor revenue collections, which was a fallout of the slowdown in economy. With elections in four States round the corner, the government did not have much flexibility in raising resources and it decided on the excise duty route. The Union Cabinet on Tuesday cleared the proposal to amend the Central Excise Tariff Act through an Ordinance to enable the Finance Ministry to increase excise duties beyond 100 per cent. The proposed hike in excise duties in petroleum products will be passed on to the Oil Pool Account, a complex mechanism devised by the government to balance the volatility in prices in the international market and keep domestic prices steady. With international oil prices presently ruling at low levels, the government is hoping that an increase in excise duties would not hit domestic oil companies and they would be able to bear the losses for the next three months. Moreover, the government is hoping to dismantle the Administered Price Mechanism of petroleum products by March end this year and allow oil companies to recover their Oil Pool Account dues by floating bonds. In other words, the additional excise duty would affect the size of the bond issue to write-off the dues in the Oil Pool Account. Currently the Oil Pool Account has a deficit of Rs 12000 crore. However, if the Government continues with the additional excise duty in the next financial year, the burden would have to be passed on to the consumers as there would be no Oil Pool Account to bear it.
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CORPORATE NEWS
Bangalore, January 10 The company’s income, for the third quarter, jumped 23.04 per cent touching Rs 660.81 crore, from Rs 537.07 crore in October-December of 2000. The net profit rise amounted to 23.87 per cent over the corresponding period last year. Commenting on the Infosys’ performance Chairman and CEO, N.R. Narayana Murthy said “This quarter was one of the most challenging, both for Infosys and the Indian software industry.” Quarter-on-quarter growth (October-December 2001 compared to July-September 2001) in net profit was 2.22 per cent and in total income, 1.64 per cent. Stating that software spending continued to weaken globally and events of September 11 created a lot of uncertainty in the external environment, Murthy said, “Short-term uncertainties continue to remain and we are cautious about long-term opportunities”. Giving its outlook for the quarter ending March 31, 2002, the company said its income was expected to be between Rs 636 crore and Rs 660 crore. In senior management changes, the Board of Directors has named Nandan M. Nilekani, MD, President and COO as its CEO, effective March 31 this year. He would be redesignated as CEO, President and MD. The IT major admitted that while increasing its business volumes, its quarterly revenue growth was impacted due to continued pricing pressures. “We experienced an increase in business volumes. However, our quarterly revenue growth was impacted due to continued price pressures”, said S. Gopalakrishnan, Deputy Managing Director and Head-Customer Service and Technology. The Nasdaq-listed company’s performance is in line with the expectations of analysts who had projected a third quarter revenue of Rs 640 to Rs 656 crore, but the results failed to cheer up the major stock markets, including Mumbai. Notwithstanding the roadblocks and the downturn, the company “performed better at both the topline and the bottomline”, Narayana Murthy said after the Board of Directors approved the audited financial results of the nine months ending December 31, 2001. Thanks to the economic slowdown, “we will focus much more on our customers now. The market ahead seems challenging and we are prepared for it”, said Murthy. Aztec Software
Aztec Software & Technology Service net profit has dipped by 77.07 per cent at Rs 1.27 crore for the third quarter ended December 31, 2001, as compared to Rs 5.54 crore in the same period a year ago. Net sales for the reporting period stood lower at Rs 12.74 crore as against Rs 22.36 crore in the quarter ended December 31, 2000, Aztec Software said here today.
Nestle India
Nestle India Ltd has today said that the total shareholding of promoters Nestle Group in the equity shareholding of the company has gone up to 53.27 per cent from 51.25 per cent as declared in the book closure last year.
India Cements
The Board of Directors of India Cements at its meeting held yesterday has decided to sell its entire 39.50 per cent shareholding in its subsidiary Sri Vishnu Cement Ltd. The Board has also authorised the Managing Director and the Executive Director to finalise the sale with any interested purchaser, the company said.
Agencies
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Set up textile park to boost exports: CII Chandigarh, January 10 The agenda was presented to Punjab Chief Minister Parkash Singh Badal by a CII delegation. The agenda included promotion of captive generation with emphasis on clean and renewable sources of power. It suggested no licence for generating and distributing power for rural sector and meeting to be made compulsory for all sectors. CII also called for greater stress on energy conservation and development of non conventional sources of energy. The Punjab State Council of CII also raised several suggestion on power issues which were presented to PSEB Chairman Sudhir Mittal. Regarding minimum monthly charges (MMC) levied on intensive and non-intensive load, it was suggested that the MMC tariff applicable to the electric arc furnace industry should be reduced to bring it on a par with large supply consumers. CII said with the introduction of VAT from April 1, 2002, economic activity in the state would increase substantially out of a tax structure facilitating inter-state-trade with removal of CST, input sales tax and output tax etc. At the same time economic
organisations in the state should set their eyes on the larger Indian market and try to complete for a larger share rather than be reduced to local players. In the textiles/garments sector, CII recommended that pest-resistant varieties of cotton should be promoted. Setting up of textile parks in Ludhiana based and Mohali, training for women workers, establishing an institute of design would help exports increase from present 2.8 per cent of national exports ($ 10 billion) to 4 per cent (Rs 4,000 crores) in 5 years and generate 3,000 jobs.
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Demand constraint delays projects New Delhi, January 10 According to the survey, the findings of which were presented to Commerce and Industry Minister, Murasoli Maran here, the government clearances were not a problem for most investment projects in India, including those involving foreign direct investment. The study was conducted by the CMIE on behalf of the Ministry of Commerce and Industry to help policy makers in the government understand factors which may have contributed to slackness in implementation of major projects in India. According to the study, 57 per cent of the respondents did not find the government clearances to be a problem, while on an average only 19 per cent of the respondents consider these to be a problem. Indian private sector companies find getting government clearance somewhat bigger hurdle than foreign companies. Also getting clearance from the local government is found more of a problem than state and Central Government clearances. Thirty one per cent of the respondents consider funding to be a problem. However, it was revealed that availability of funds and not cost of funds was more of a problem. Poor demand was the single most important reason for delay in implementation of projects. While 27 per cent of the projects consider domestic demand to be a problem, 16 per cent of the projects consider this to be a serious problem. Overall 28 per cent of the companies covered in the survey said they were postponing their initial investment decisions or their expansion plans because of their adverse perception with regard to domestic demand, overseas demand and also competition arising out of imports.
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Qualcomm to invest $ 200m for stake in Reliance
New Delhi, January 10 In a statement Qualcomm, the San Diego, California-based company which pioneered the Code Division Multiple Access technology, said it has formed a “strategic alliance’’ to support the introduction of CDMA in India. RCL intends to provide basic telephone services, Wireless in Local Loop (WLL) with limited mobility and national long distance services in India. RCL had won last July government licenses to start fixed-line services in 16 telecom zones across India.
UNI
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Connect launches service in Bathinda Chandigarh, January 10 With an investment outlay of over Rs 1210 crore in Punjab, Connect aims to provide it’s subscribers with a service that will be able to offer a price competitive environment supported by a world class infrastructure and customer care. Connect is presently in the process of constructing both wireline and Wireless Local Loop (WLL) access networks in the major cities and towns of Punjab.
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VAT deadline may be deferred
New Delhi, January 10 Indicating this, Finance Ministry officials said a formal decision in this regard would be taken at a meeting of state Finance Ministers slated to be held here on January 23. Originally, the plan was to implement VAT in at least 15 states from April while providing up to one year time to other states to do so. But the lacklustre performance of the economy and the fear of lower revenue mop up have made states jittery in going ahead with implementing VAT from April this year. Moreover, most of the states showed lack of preparedness to adopt the new system. The Empowered Committee on VAT, headed by West Bengal Finance Minister Asim Dasgupta, had said VAT would be implemented in 15 major states from April after the Centre assured financial compensation in the case of revenue loss in the
process to VAT.
PTI
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Conference on food today Chandigarh, January 10 The “Regional Conference on Micronutrient Fortification of Food” which will be held on the theme “Improving Health and Nutrition Profile through Fortification of Processed Foods” here tomorrow is the third in the series of conferences to be organised in April 2001-March 2002. The plan is to cover all major centers. The conference is organised in association with Micronutrient Initiative and PHDCCI. The need for food fortification arises because people do not have balanced food. In particular, a majority of people suffer from deficiencies of one of the other micronutrient. The most common and acutely harmful deficiencies are of iodine, Vitamin A and iron. These deficiencies can lead to goiter and mental backwardness, blindness or anemia, according to Mr P.K. Jain, Vice-President PHDCCI.
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