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Thursday, February 14, 2002, Chandigarh, India  
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No
time-frame set for MTNL, BSNL selloff
Reliance
gets govt nod to acquire 3 oil blocks |
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BUDGET-2002 Raise tax
limit to 60,000 More
funds for women schemes demanded Govt
eases ADR, GDR norms IT units
may post 50 pc growth Why
delay use of gasohol?
Tyre
production dips 4.4 pc
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No time-frame set for MTNL, BSNL selloff
Mumbai, February 13 Asked by when the government would put the two corporations on the block, Communication Minister Pramod Mahajan said “no time table has been set for BSNL and MTNL.” Mahajan told reporters, after the signing of the agreement for transfer of the 25 per cent government equity in VSNL to the Tatas for Rs 1,439 crore, that the Tatas would not be excluded when bids for BSNL and MTNL would be invited. “Hum Tatas ko swyamvar (bids) se bahar nahin rakhenge.. Woh BSNL aur MTNL main hissa ley sakte hain (We will not keep Tatas out from bidding for BSNL and MTNL)” Mahajan said adding “jo jyada dowry (offer) dega hum use choonenge (The highest bidder will be selected as partner for the two telecom PSUs).” This is the first time, the government has indicated that BSNL, carved out of the Department of Telecom last year, could be privatised, even as market analysts pointed out that it would be a gigantic task going by the huge worth of the corporation at over Rs 65,000 crore. Disinvestment Secretary Pradeep Baijal told PTI that “we will start discussion with the Communication Ministry.. the Minister has just made a statement but no time frame has been set.” He, however, said the Tatas could be allowed only in accordance with the guidelines set by the Telecom Regulatory Authority of India. Tatas take over VSNL
The Tatas today took charge of Videsh Sanchar Nigam Limited (VSNL) after signing shareholders’ agreement with the Union Government for acquisition of 25 per cent stake in the telecom major for Rs 1,439 crore. Immediately after signing of the agreement, Ratan Tata took over as the chairman of the reconstituted board and held its first meeting this morning here. "Integration of VSNL into the group has filled a major gap and it will be our endeavour to provide end to end solutions to the consumers and connectivity outside the country," Ratan Tata said after handing over the Rs 1,439 crore cheque to Communications and Information Technology Minister Pramod Mahajan. He ruled out any possibility of laying off existing VSNL employees and assured the gathering that the telecom major was manned adequately and the Tata Group would leverage its strength in an effective manner. Tatas would now make an open offer acquiring 20 per cent floating equity as mandated under the SEBI rules. "After acquisition, the most
difficult task now lies ahead in order to achieve a painless integration," he said while pointing out that the corporation was without any flab and employees were its biggest strength which his group would leverage to reach new highs. Mahajan said Tatas could leverage the virtual monopoly of VSNL in overseas communication emanating from commitment of MTNL and BSNL to route their traffic on competitive tariff for next two years.
PTI
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Reliance gets govt nod to acquire 3 oil blocks
New Delhi, February 13 “A conditional approval has been given to Reliance Industries to acquire Tullow Oil’s three oil and gas blocks in Gujarat Kutch and Krishna-Godavari Basin,” government sources told PTI here. In February last year, Tullow signed farm out agreements with RIL to sell between 40 to 50 per cent stake in five of its oil and gas blocks in Gujarat offshore, Gujarat Kutch Basin, Cambay basin and KG Basin, sources said adding government had approved acquisition of three out of the five blocks. While approval has been given for acquisition of GK-OSJ-1, KG-ON-1 and GS-OS-5, that for CB-ON-1 and GK-ON-90/2 had not been given, sources said, but did not give reasons for it. Reliance would acquire 50 per cent stake in block GK-OSJ-1, offshore Gujarat. Post sell-off, Tullow would have a 25 per cent stake while state-owned Oil and Natural Gas Corporation (ONGC) would have 25 per cent stake, sources said. The company would acquire 40 per cent stake in GK-OS-5, offshore Gujarat block, they said adding Tullow would have 50 per cent stake post-selloff in the block while US-based Okland Oil Co would have 10 per cent interest. Reliance would also acquire 40 per cent stake in KG-ON-1 in Krishan Godavari basin, while Tullow would have the remaining 60 per cent stake.
PTI
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BUDGET-2002 The pre-Budget exercise has already started. To be fair to middle class salaried employees whose daily worsening plight can only be ameliorated by equitable tax relief, the Union Finance Minister would do well to consider the following suggestions: 1. Restructuring income tax rates as under Upto Rs 75,000 (if not Rs 1 lakh as promised
in earlier election manifestos of BJP)
Rs 1,50,001 to Rs 3 lakh
Above Rs 3 lakh
Rates proposed above would make tax-evasion less attractive and less tempting. 2. Blatant discrimination in favour of women or senior citizens should go. If some softness is extended to certain lower salary income groups, the so-called higher salary income groups should not be deprived of at least that much softness. A percentage should be fixed towards standard deduction without any discrimination in salary incomes. 3. Lowering of interest rates by (say) 25 per cent amounts to 25 per cent tax
deduction at source. Rates of interest on small savings should be so fixed that all interest incomes can be made tax free. This will save on costs and labour involved in collecting tax
deducted at source from interest, paid by different agencies. Section 80-L may become redundant. 4. Interest income on deposit of tax free retirement benefits, should be made tax free 5. Non-pensionable retiring employees should be allowed one-time transfer of their PF accumulation during service, to their PPF accounts after retirement. 6. Ceiling on PPF contributions in a year, should be raised from the present Rs 60,000 to at least Rs 1 lakh. 7. The advance tax deducted at source from monthly/yearly salary income of an employee (or total income tax paid) should be exempted from inclusion in taxable income, that is, income tax on income tax amount already paid, should be abolished. Alternatively, income tax amount paid in a year, should be deductible from salary income next year.
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Raise tax limit to 60,000 New Delhi, February 13 This will enable an investment of Rs 60,000 crore in the housing sector and give a major boost to the economy, the think-tank said. The think-tank comprises Mr Jaiprakash, an
eminent industrialist as its Chairman. The other members of the group include former Revenue Secretary Harbans Singh, former Chairman of Central Board of Direct Taxes (CBDT), T.N. Pandey, noted tax consultant R.N. Lakhotia, and Director of Indian Institute of Finance, J.D. Agarwal among others. It has also been suggested that the present exemption limit for income tax must be increased to Rs 60,000. The threshold for initial rate of income tax should be 10 per cent up to Rs 1,50,000, 20 per cent up to Rs 5,00,000 and 30 per cent thereafter, the think-tank said.
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More funds for women schemes demanded New Delhi, February 13 Minister of State for Human Resource Development, Sumitra Mahajan, who is the in charge of the department, at a meeting with Mr Yashwant Sinha, said more importance should be given to schemes like the Rashtriya Mahila Kosh, working women’s hostels and homes and mobile creches. Briefing newspersons here the minister said at present the allocation for women and child development was a mere 0.8 per cent of the total Budget allocation. The minister, who was accompanied by a delegation of women
activists, said they pointed out to the Finance Minister that there was proliferation of too many programmes with too little money. Her department has also asked for increased Budget of Rs 2,000 crore from Rs 1,600 crore in the current year to enable it to take up more projects pertaining to women’s welfare and strengthen the existing programmes. Calling for a gender audit of the Budget, the Minister said as far back as in 1994 the government had decided to sanction a Rs 100 crore corpus fund for the Rashtriya Mahila Kosh (RMK). But till date, the RMK has not received more than Rs 37 crore. This scheme is a loaning system to enhance women’s economic empowerment and so it is essential to raise budgetary allocation to it, Ms Mahajan stressed. The minister referred to the pending bill on domestic violence and said simply passing of the bill was not enough. There is need for enhanced allocation for supportive activities for victims of domestic violence such as short stay homes and shelters. Another critical area is the high drop-out rate of girls in rural areas. Ms Mahajan suggested that concessions should be given to entrepreneurs or industrialists who would like to invest in rural girls’ education. Calling for increased allocation for children’s programmes, she regretted that there was no separate allocation for disabled children.
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Govt eases ADR, GDR norms
New Delhi, February 13 The two-way conversion or fungibility of American and Global Depository Receipts
(ADRs/GDRs) was allowed through an amendment in the Issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipt Mechanism) Scheme of 1993.
PTI
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IT units may post 50 pc growth Chandigarh, February 13 Not only has recession deterred many units registered with the Software Technology Parks of India (STPI) to start operations, but also more than 80 per cent of new units, which got registered this year, have ventured into IT-enabled services like medical transcription, call centre business and related fields. “Against the growth of above 100 per cent in the software exports last financial year, the growth this time is likely to hover around 50 per cent or so”, said Dr Sanjay Tyagi, Additional Director and Centre Head, STPI, Mohali. Pointing out the recession to be the cause for this, he was hopeful that the IT industry will show an augmented growth during the next financial year. While software exports by the units in Punjab, Chandigarh and Panchkula were Rs 53.7 crore last year, (This figure was Rs 14.7 crore in 1999-2000) after the third quarter, the exports were Rs 47.97 crore. “By the end of this financial year, this figure is expected to reach Rs 80 crore , though the scenario would have been different if the demand had remained as it was earlier”, he said. Major exporters from this region are Infosys, IDS and Quark. While the STPI has 160 registered units, the number of exporting units is 33 which contributed to the software exports during the first three quarters of this financial year. As many as 15 new units were added in the list of the STPI units here during the current financial year. Registration with the STPI provides tax holiday till 2010 and also allows these companies to operate in a tax-free zone where they are not charged any customs or excise duty and CST. They are provided with infrastructural support like leased lines, Internet, etc at industry-promotion rates.
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Why delay use of gasohol? The recent spurt in the global oil prices and new-found unity among the OPEC countries on cut-backs in production to shore prices to $24+ a barrel has once again woken us to the precipice that we stand on in respect of our energy needs. Crude oil consumption is today running at 70 million tonnes; domestic 33 million and, imports 38 million and is rising steadily with economic development. At even $ 20 a barrel ($ 100 a tonne), this represents an unaffordable import bill of $ 80 billion. In such a backdrop, Petroleum Minister Naik’s recent announcement on the successful completion of fairly extended pilot-trials with petrolethanol mixes to reduce our dependence on increasingly unaffordable oil-imports is a welcome augury. Coming after two decades of silence, it revived memories of the frantic R&D triggered in mid-seventies on alternative sources of energy and energy conservations, by the spurt in oil prices to $ 30 per barrel. The most striking development in alternative energy of this era was the switch by oil-deficient Brazil to cars fuelled by a 20-30 per cent mix of ethanol and petrol, called gasohol. With its huge landmass, scanty population and a climate ideal for year-round sugarcane cultivation, Brazil is ideal for ethanol as an alternate source of energy. In a decade Brazil had:
There were no goof-ups like the ones witnessed time and again during our own switches: To lead-free petrol in metros in 1996-98,, and again, in the recent switch to CNG for public carriers in Delhi. Arm-chair planners that we are, we even refuse to learn from mistakes. It also brought back memories of PTL’s (Punjab Tractors) launch in the same period of a comprehensive R&D programme on ethanol for tractors, which included.
Raw materials began with sugar-cane juice to wet the hands of a green team and, Moved up the ladder of Technological complexity to foodgrain unfit for human consumption and finally, paddy-straw. Paddy straw is not only total waste, but also a severe health hazard. Unlike wheat straw, it doesn’t burn but continues to smoulder for days. Since setting it on fire is the only option for cleaning fields, a thick pall of smoke engulfs the paddy-belt in the harvesting season. High moisture content and winter-dew compound the problem.
Heartening progress at the end of 18 months emboldened us to plan a 5,000 litres/day distillery for extended pilot-trials. This naturally raised issues of capital and recurring subsidies for equating prices on energy content. All these fell in GOI’s purview, but finding negative response, the entire programme was dropped.
Reduction in emissions Benefit of reduction in vehicular emissions is well-known. Emissions also carry less cancer-causing oxides of sulphur and nitrogen.
Boons not so well-known (1) Solution to the bulging grain-pile Against the planned foodgrain safety-stock of 18 million tonnes, stock already exceeds 63 million. Procurement running at 25 million tonnes is not likely to get squared even by the sharp rise in PDS off-take to 20 million in the current year with the launch of special schemes for below poverty-line nutrition. Rs 15,000 crore is locked in this phenomenal inventory, a luxury which we can ill-afford. Sugar stocks have again crossed 10 MT and continues to rise. These unmanageable stock-piles today threaten our entire social and economic fabric and demand urgent action, not polemics on necessity of alternative cropping patterns and minimum nutrition. Both these stockpiles can be easily converted into ethanol to be used for partial replacement of petrol & diesel. Since consumption of petrol/diesel runs into millions of tonnes, denting of the stockpile will be both significant and fast. An advantage of the process is easy reversibility. Switch-back to oils can be made whenever situation demands. (2) Special bonuses for Punjab & Haryana Since Punjab & Haryana have been providing more than 80 per cent of foodgrain to the country since the Green Revolution and their total economy depends upon agriculture, they are the ones worst hit by these mounting surpluses. They also carry most of the national food-grain stockpile. Conversion into ethanol provides them a big relief. (3) Puts mounting pile of grain Unfit for consumption to productive use Quality deterioration is a disturbing fall-out of the large and mounting stock-pile and the pile-up already stretches to 1995-96 vintage. Furthermore, most storage is unscientific and the situation not far different from that of NPA’s hidden in Bank portfolios. Banks continue to battle with them even after 9 years of awakening and write-off. According to experts, a substantial chunk of our ageing food-grain stock-pile might already be Unfit for Human Consumption. (4) Provides the urgently-needed alternative to paddy-wheat corporation Agro-climatic unsuitability to today’s universally adopted paddy-wheat rotation cycle of Punjab & Haryana is well-known. While it has led to severe water-logging of some parts, it has caused severe depletion of underground aquifers in others. Unfortunately, despite every exhortation, no viable alternative has emerged so far. Since ethanol needs for local consumption via gasohol/diesohol are large, sugarcane can provide an ideal crop rotation alternative and, of the magnitude demanded by the situation. Ethanol also provides productive use for:
(5) Eliminates transport bottlenecks Since 80 per cent of the national stockpile lies in Punjab and Haryana in a remote corner, outward rail-movement is a perennial bottleneck. Ethanol with its localized production and consumption is also easily amendable to local blending with petrol/diesel. Long-distance transport thus gets totally eliminated. Why not make an immediate start? Since technology for ethanol production is available, start can be immediate. R&D for improved yields, cost reduction and, from a wider range of raw materials with biomass as end-goal can proceed in parallel. Since production is not capital intensive, quick ramp-up is feasible. Ease of reversibility is another feature. Switch back can be made whenever
needed. (A member of Punjab’s Disinvestment Commission and Chairman of Twenty First Century Battery Ltd., the author is a former Vice-Chairman and Managing Director of Punjab Tractors & Swaraj Mazda. Views are personal)
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