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Thursday,
December 5, 2002, Chandigarh, India  
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Punjab Government fails to announce industrial policy
Centre approves 20 FDI proposals
No proposal to reduce small savings rate Rationalise
duty on mobile handsets |
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‘Row over HPCL, BPCL selloff to be resolved’
Govt to firm up stand on Reliance gas
Govt a ‘divided house’
over disinvestment
SBI chief hints at cut in interest rates
TCS plans IPO in India by next year
Jaswant Singh introduces IDBI Bill Bankmitra bilingual software Uco Bank revises rates
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Punjab Government fails to announce Chandigarh, December 4 The Chief Minister and the ministers had been promising from the past many months that the policy would be announced in the ‘next few days’ but without any result. The new industrial policy had reportedly run into rough weather after the industrial circles expressed unhappiness over the likely ‘rehabilitation package’ for sick units and incentives to attract new investment in the state. Officials of the Punjab Finance Corporation and the Punjab State Industrial Development Corporation had reportedly expressed fears that the government’s decision to release capital bonds worth Rs 450 crore, would result in a large number of legal cases as the state would not be able to defend the deferment of payment of capital subsidy promised under the previous industrial policy. The government had announced that as part of the industrial policy, the industry would be granted bonds in lieu of the capital subsidy promised by previous governments. According to official sources, the Cabinet meeting would take up the issue of incentive package as the CII and other industrial organisations in central Punjab, especially in Ludhiana and Jalandhar, have raised objections over the plan to give preferential treatment to the industry in the border areas. They said under political pressure, the government had proposed to offer purchase preference, deferment of state excise duty and power charges to the extent of 50 per cent for a period of five years. However, these exemptions in the past had resulted in distortions and large-scale tax evasion by these units. Officials in the Excise and Taxation Department have also been reportedly opposing government’s move to continue sales tax exemptions worth over Rs 600 crore annually to industry. These exemptions would not be compatible with the VAT, to be implemented by April 1, 2003, they argued. The re-rolling mills, alloy, cycle and auto-parts industry have also demanded abolishment of the octroi and announcement of reforms in labour laws and a package to check inefficiencies in the state Electricity Board. These industries have argued that since the industry was facing locational disadvantage, it would be appropriate if the state government could announce subsidised power tariff and infrastructural support to help the industy and to fetch new investment. Representatives of the information technology sector have also reportedly told the Chief Minister that it would not be sufficient for the state to offer monetary incentives to develop as an investment destination by industry giants, but he would also have to set up a strong industry-friendly team in the Department of Industry which should led by an intelligent and dynamic minister. |
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Centre approves 20 FDI proposals New Delhi, December 4 The major proposals approved by the Ministry of Commerce and Industry relate to sectors in manufacture of automobile components, manufacture of textile machinery, and manufacture of construction and material holding machinery. An official release here said that the proposals approved include a Rs 106 crore of UK-based Barnford Excavators’ for increasing foreign equity from 60 to 100 per cent in the manufacture of construction and material holding machinery. The proposals approved also include the Rs 31 crore proposal of Japanese Toyoda Automatic Loom Works Limited to increase foreign equity in the manufacture of textile machinery and spinning ring frames. The other proposals cleared by the Union Minister Arun Shourie include the Rs 9.7 crore proposal of HP Chemie Pelzer of Germany for manufacture of automobile polyurethene parts, the Rs 2.35 crore proposal of German Truetzshler Textilemaschinen for increasing foreign equity from 69.39 per cent to 73.94 per cent in the manufacture of textile machinery, Italian Luca Pastorello’s proposal for beginning management and consultancy of turnkey projects in garment industry and Dutch Subway International’s proposal for setting up of high class health food restaurant chain and franchisees among others. |
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No proposal to reduce small savings rate New Delhi, December 4 “There is no proposal to do away with farm subsidy. At the moment we are not disturbing the interest rates,” Mr Naryanan told newspersons here. The Finance Secretary said that the objective of the government was to gradually move towards a soft interest rate regime while at the same time increase the level of savings. The government was also giving equal attention to the case for the pensioner who primarily depend on fixed deposits for their income. He said that Finance Minister Jaswant Singh had informed Parliament that these issues would be addressed in the Budget. |
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Rationalise
duty on mobile handsets New Delhi, December 4 Indian customers have to pay anywhere between 30 per cent and 60 per cent extra (depending upon the state sales tax and octroi), for a legal handset compared to the smuggled handsets, he said. Urging the government to rationalise the basic customs duty to 5 per cent and abolish the Special Additional Duty (SAD) on mobile handsets, he said the move will go a long way in discouraging the grey market in mobile handsets and make the legal handsets cheaper, which will further act as a catalyst to the growth of teledensity. He said the share of legal market in the country has grown from 5 per cent to 25 per cent and has the potential to grow to even 90 per cent if the duty is 5 per cent. Citing the example of the Chinese market, he said the legal mobile handset market there grew manifold after stringent measures against the illegal market were taken by the government. The
major recommendations by the ICA for improving the mobile handset market
scenario are: reduction of basic custom duty from 10 per cent to 5 per
cent; abolition of SAD of 4 per cent; co-ordinated enforcement measures
to check grey market activities; rationalisation of octroi levies
charged by the local bodies in Punjab, Gujrat and Maharashtra and
various others. |
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‘Row over HPCL, BPCL selloff to be resolved’ New Delhi, December 4 “A solution (to the dispute) will be found,’’ Mr Naik said on the sidelines of a seminar on Indian Petro Sector, organised by
Assocham. “Prime Minister Atal Behari Vajpayee and Deputy Prime Minister L. K. Advani are seized of the issue and it will be sorted out,’’ he said. However, he did not specify any time frame as to when the issue would be resolved. The three-month deadline for reconsideration of the disinvestment of HPCL and BPCL is expiring on December 7. He also refused to spell out the stand his ministry would take when the issue again comes up for discussion at the Cabinet Committee on Disinvestment
(CCD). While the Disinvestment Ministry was favouring strategic sale of the two oil refining and marketing firms, the Petroleum Ministry had favoured a public offering so as to mop up resources needed for expansion of projects associated with HPCL and
BPCL. Besides Petroleum Minister Ram Naik, Defence Minister George
Fernandes, too, had opposed the strategic sale of HPCL and BPCL in view of the “strategic” importance of the oil sector in the event of war and in the interest of the consumers. Mr Vajpayee had deferred a decision on privatisation of HPCL and BPCL for three months to build consensus on the issue. As per the original plans the government had proposed to sell 26 per cent stake in HPCL to the strategic investor. The proposal for BPCL involves issue of 50 crore fresh shares of Re 1 each to bring down the government holding in the company from 66.2 per cent to around 56-57 per cent. The strategic sale of 36 per cent stake is proposed for a later stage. Employees of the two PSUs are also to be offered some shares in the companies. Post divestment, the government holding in HPCL would come down to about 22 per cent from the present 51.01 per cent and in BPCL to 26 per cent from 66.2 per cent.
UNI |
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Govt to firm up stand on Reliance gas New Delhi, December 4 “Reliance has got its find certified (from independent sources). Now it is up to the Directorate-General of Hydrocarbons (DGH) to look into it,’’ Petroleum Minister Ram Naik today said on the sidelines of a seminar ‘Changing Indian Petro Sector’ organised by Assocham. Last month, Reliance Industries announced that it had found 7 trillion cubic feet of gas in a deep-sea block off the Andhra Pradesh coast. The company had said it can produce 40 million standard cubic metres of gas from the exploration block KG-DWN-98/3 for 15 years. The DGH had made a preliminary estimate of 25-35 million standard cubic metres of gas per day for six to eight years. It had reportedly estimated that Reliance would take about two to three years of production to reach a plateau of 25-35 million standard cubic metres of gas per day. Gas production from the field would continue at this rate for about six to eight years before declining at around 15 per cent a year for another five years, according to DGH estimates. “It is a technical matter that has to be decided by experts. We are happy about Reliance find,’’ Mr Naik said. The preliminary gas reserve estimate of over 7 trillion cubic feet is comparable to the gas reserve estimate of 9 trillion cubic feet in Vasai (earlier Bassein) field of the West Coast, near Mumbai, which supplies gas to Gujarat, Madhya Pradesh, Rajasthan, Haryana, Delhi and Uttar Pradesh through HBJ pipeline, he said.
UNI |
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Hike
in LPG, kerosene ruled out New
Delhi, December 4 “During budget discussions the issue of decrease in subsidy for LPG and kerosene with the Finance Ministry will come up. Before budget there will not be any hike in the prices of both the products,’’ Mr Naik told newspersons. “After dismantling the ADM for petroleum products it was decided to reduce subsidy on LPG and kerosene.
UNI |
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Govt a ‘divided house’ over disinvestment New Delhi, December 4 Launching a scathing attack on the government, while initiating a short duration discussion on the disinvestment of the PSUs, senior Congress leader Pranab Mukherjee said that the inefficiency of the government had left a huge revenue gap of Rs 21,000 crore in the current fiscal year. He said there were sharp differences in the government over the issue of disinvestment. Nearly half a dozen ministries have publicly opposed it. He said it was a collective decision of the government to go for disinvestment of the PSUs. The government, having failed to mop up resources and to bridge the budgetary gap, is now using the easy route of disinvestment of the PSUs to meet its deficit. Mr Mukherjee said the government was incompetent and
inefficient to overcome the economic and financial crisis. “Inefficiency has left a huge revenue gap” which the government was not able to cover through its own resources, he said.
UNI |
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SBI chief hints at cut in interest rates New Delhi, December 4 “Interest rates will continue to be stable with a little downward bias,” SBI chairman A.K. Purwar said replying to a query at an International Banking Summit here. The statement assumes importance in the wake of reduction in lending and deposit rates by most of the banks after the benchmark bank rate was reduced by 0.25 per cent to 6.25 per cent in the October busy season Credit Policy of Reserve Bank. SBI had brought down Prime Lending Rate by 0.25 per cent to 10.75 per cent, Medium Term Lending Rate to 11.25 per cent and Short Term Rate to 10.25 per cent from November. The bank also reduced its term deposit rates by 0.75 per to 7.0 per cent for 1-2 years deposits, 7.25 per cent for 2-3 years and 7.5 per cent for over three years. Housing loan rates have been reduced to about 9.5 per cent. RBI in April Credit Policy indicated a 0.50 per cent reduction in Bank Rate but had slashed rate by only 0.25 per cent thus leaving room for a further reduction in the coming months if required.
PTI |
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TCS plans IPO in India by next year New Delhi, December 4 “There are activities in this regard. Whether TCS will be first listed in domestic market or in overseas bourses — are being deliberated with merchant bankers,” company sources told PTI on conditions of anonymity here today. Along with domestic issues, TCS is likely to list in either US market (NYSE or Nasdaq) or London Stock Exchange or in both markets, sources said. The double or triple listing is in view of the huge market capitalisation the company is expected to have once they get listed. Analysts put this figure at over Rs 14,000 crore while comparing TCS with Infosys and Wipro. Listing in India alone may not fetch the company the best value for its shares as the market may not be able to absorb the IPO at a high premium. Probably by next year, the jewel in the crown of Tata group would come with a “mega” issue considering the market situation and the best value it can fetch, sources said. According to SEBI norms, technology companies can offload 10 per cent stake to public as against 25 per cent for companies in the other sectors. Company sources declined to give details of whether the 10 per cent would include ADRs/GDRs or just equity to the Indian public. Chances are high that a chunk of the IPO would be set aside for employees as well, they said. Before it goes public, TCS intends to jack up its profits further and targets a 30-35 per cent in revenues now at over $ one billion.
PTI |
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Jaswant Singh introduces IDBI Bill
New Delhi, December 4 The government secured approval for introducing the Bill by a narrow margin, with 91 members giving the go ahead and 84 opposing the introduction after a determined Opposition forced division on the issue. Finance Minister Jaswant Singh subsequently introduced the Bill, stating that the government was only seeking to corporatise IDBI, not privatise.
UNI |
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Bankmitra bilingual software Chandigarh, December 4 Mr Harwant Singh, Chairman of Chandigarh Bank TOLIC and Zonal Manager, PNB, said,‘‘Bankmitra is the best software since it could work in bilingual format not only in Hindi-English but also in Punjabi-English, Tamil-English and other recognised languages in India.In the field of data processing in banking industry, this is the first software that could work like international KAPITI programme.’’ Mr Devendra Mewari, Chief Manager, PNB disclosed that the software had been developed by the PNB in collaboration with Jaipur based company. |
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Uco Bank revises rates Kolkata, December 4 Following the revision, the rate of interest for the period between 15 to 45 days would be 4.75 per cent, for 46 to 90 days would be 5.25 per cent and that of 91 to 179 days would be 5.50 per cent, they said. The rate for the period of one to less than three years would be 6.50 per cent and for the period three years and above would be 6.75 per cent.
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