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Sunday,
August 10, 2003, Chandigarh, India  
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Govt not
serious on reducing NPAs Pink
bollworm posing challenge to cotton scientists Steel
industry faces crisis India
needs partnership in transport sector |
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LIC to
promote Bima Plus On-line
lottery bid extended to August 20 Apple
festival from Aug 28
Haldia
Petrochem to sign pact with IDBI
Domestic
passengers’ photos on A-I tickets
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Govt not serious on reducing NPAs THE
introduction of Securitisation Ordinance in 2002 came as a shot in the arm for banks in India. The introduction of this Bill, Ordinance and then the Act was highly welcomed by the banks and the associations of bank employees who had been for long agitating for reducing NPAs. Initially, it seemed that the recovery process would be fastest ever and banks would be flushed with funds on account of speedy recoveries. There is no doubt that the ordinance had an initial impact and it sent jitters among industry circles who were already fighting to come out of recession and financial crisis. The Act gives sweeping powers to banks and allows them to be the Judge of their own cause without any room for appeal or having to go through the judicial process. The banks lost no time and started proceedings against borrowers immediately because all that a bank needs is permission from Deputy Commissioner’s level to provide them with a revenue officer and police force to take-over the assets of a borrower. It was common site to see bank employees and officers accompanied by police force taking over shops, houses, workshops and factories of borrowers, the likes of a demolition drive. Leaving aside a few cases in which the recoveries came initially, the process has slowed down drastically and the teeth and nails given to the banks by the government seem to have gone blunt. The government seems to have taken for granted that all industry men are wilful defaulters and have enough liquidity with them but will only pay-up when they have no choice but to surrender their assets. For those who cannot pay-up, the banks will be able to sell and liquidate their assets to recover their dues without realising that no body would be willing to buy disputed properties and it will only result in back-door nationalisation of sick industries adding to heavy expenditure for banks to look-after and maintain these assets. It is surprising that the government is following a dual policy of disinvestment and nationalisation at the same time, perhaps unaware. The Act does not have clear guidelines for implementation nor specifies an independent authority or officer who would exercise these powers. This is resulting in corruption, despotism and biased decisions by banks. In many cases the banks have given fresh limits and loans to companies and individuals in order to bail them out of crisis. Many a senior bank officers due to retire shortly are busy pleasing business houses who are offering them handsome salaries and packages after retirement. The government has committed a blunder by giving such sweeping powers to banks which are completely unregulated once in the hands of bank officers. To initiate a practical approach, the government has to bring NPAs out of the classification of untouchable. As of today, the borrowers having NPA account with a bank cannot avail financial assistance from any bank. While, it is well understood that such borrowers have already exhausted their means, lost market credibility and there is no possibility of help coming from friends and relatives either. Under such circumstances, from where is the money going to come for making payments towards settlement of NPA accounts. The government is moving with a limited azimuth in copying the systems of developed countries by choice. In most of the countries where securitisation laws exist, the banks offer products for debts restructuring and servicing NPAs through property
amortisation. In some of the countries, the banks are given targets and incentives on the loans given for servicing NPA accounts. This amounts to a double benefit where one bank is able to place its funds to productive use and the other is able to realise its unproductive funds. In this way, the NPAs can drop well below 40 per cent in a very short span of time. It will all depend on the attitude of the banks which is directly governed by government policies. It is for the government to act but it must act fast if it is serious. The much heard statements of banks that their NPA’s are coming down is nothing more than a jugglery of figures and a stint to show better performance on papers. Look at it this way that, there are hardly any proposals from industry and business seeking fresh loans as nobody wants to run industry in the present scenario of uncertainty. Since there are no further advances, hence there is no chance of NPAs arising at all. Some companies have challenged the constitutionality of Sections 13 and 34 of the Securitisation Act in the Supreme Court of India. These sections deal with methods of recovery and jurisdiction. The Act allows the banks to be the judge of their own cause without any room for appeal or having to go through the judicial process even where excesses have been committed by banks clearly invoking ‘lenders liability’. Although, the government does not hesitate to jeopardise the interest of individuals who are not united as a vote bank, but pushing the businessmen and industrialists against the wall will not bring about a solution leading to recovery of NPAs. The resentment in industry, business circles and trade unions is increasing every day and the government is heading to have a taste of it in the forthcoming Lok Sabha elections. |
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Pink bollworm posing challenge to cotton scientists New Delhi, August 9 The NGO, which recently collected field results from cotton growing areas of Andhra Pradesh and Gujarat, said the toxin in BT Cotton is killing only green bollworm and not the pink bollworm. Quoting the findings of scientists, the NGO said the incidence of pink bollworm is
on the rise and the pest attack was getting stronger every year. Substantial savings in pesticide use could not be expected in such a situation despite the BT Toxin in BT Cotton since farmers would have to continue to spray to control pink bollworm. Probably the most important reason for the increase in pink bollworm populations is the spread of the illegal Navbharat 151 variety over the last few years. Because of the constant exposure to BT Toxin without any implementation of refuges, the green bollworm is under pressure, creating a favourable space for the pink bollworm to multiply, the NGO said. Farmers and breeders have created their own BT Cotton varieties by crossing the Navbharat 151 with locally adapted cotton varieties. These varieties have spread to many states through an informal sales network cultivation of a variety of illegal BT cotton is now widespread. The Gene Campaign field study on BT Cotton found that the Monsanto Bt Cotton was indeed vulnerable to pink bollworm and the farmers had been spraying heavily after 6- to 70 days to try to control the pest. Resistant boolworm moths mate with each other rather than the susceptible individuals, so the offsprings are fully resistant to BT Toxin. It is therefore clear that BT resistant would persist and spread in the pink bollworm population, which is posing a serious challenge to the cotton scientists and their strategy of BT pest management, the NGO added.
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Steel industry faces crisis Ludhiana, August 9 Main steel plants of the country, being run by SAIL and other private sector plants, are busy in exporting finished steel products to China and other countries as a result of which the prices have risen manifold. Mr Ajit Singh
Kular, an industrialist and manufacturer of cycle parts and kid bicycles, said steel prices had risen by more than Rs 5,000 per tonne during the past year which had affected the small and medium-scale industry. According to Mr
Kular, cold rolled sheets were now being sold for Rs 26,000 per tonne as compared to Rs 20,000 per tonne last year. Similarly HB wire had touched Rs 22,500 per tonne against Rs 16,000 per tonne last year MS Rounds were being sold for Rs 21,000 per tonne against Rs 15,000 per tonne. Mr
R.P. Bhatia, Zonal Chairman of the Steel-Rerolling Mills Association of India and Senior Vice-President of the All-India Induction Furnace Association, said the secondary steel sector had been suffering since January 1992 when the total decontrol of steel by the government and
equalised freight scheme was withdrawn. The steel plants in Punjab have been suffering because of the non-availability of raw material and steep hike in the prices. The cost of Sponge Iron, which was available for Rs 8,500 per tonne, had risen to Rs 12,000 per tonne. Similarly, iron scrap had also risen to Rs 13,000 per tonne against Rs 9,500 per tonne. The raw material is being consumed by main steel plants and all their stockyards in Punjab have been lying idle. No supplies are being received at the stockyards. Mr Bhatia demanded that electricity supply be made available at generation cost, besides 15 per cent wheeling charges to such units as had load connection of more than 1500 KW. He said PSIEC should open iron and steel scrap banks and import steel scrap. He also demanded that railway freight from sea ports to factories be subsidised. He said SAIL and Tisco should send their untested, defective and cutting of steel to Punjab in the stockyards at Mandigobindgarh where auction of the same should be held. Mr Bhatia said the state government had already postponed the introduction of VAT, entry tax and LADT which would be introduced after consultation with the trade and industry. He demanded that the government should consult the industry before introducing Exim forms.
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India needs partnership in transport sector Chandigarh, August 9 He was in the city to preside over a seminar on “Financing Infrastructure Development through public-private partnerships’’ at the CII, Northern Region Headquarters. Mr Murray has an extensive experience in public-private partnerships in infrastructure development and has also worked intimately exploring funding options for state and municipal governments beyond the use of direct subsidies. Mr Murray is of the view that although there has been a paradigm shift in favour of private participation over the past few years, very little private investment has actually flowed into the infrastructure sector. Citing reasons, he says this is because raising huge resources to implement projects that will pay back only over long periods is a complex task indeed. And generating these resources from the private sector adds to the problem, because in some sectors, it is not easy to completely recover the benefits of these projects from user charges. Sharing his experiences, Mr Murray, who has been the co-chairman of the House Capital Budget Committee, highlights the successful efforts of the state of Washington is using private financial markets to finance important infrastructure projects such as low-income housing ( particularly for migrant workers in agricultural areas). “We need $ 50 billion for undertaking a private partnership in the transport sector in the state, since we do not have funds,” he says. India is doing well in whichever states it has undertaken these partnerships, but it should be cautious in protecting the revenue source and ensuring a politically stable environment.
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LIC to promote Bima Plus Chandigarh, August 9 The plan, which offers three options to the investors including that of secured funds, balanced funds and risk funds, has exhibited a growth of 53 per cent, 45 per cent and 73 per cent respectively over a period of two and half years. The market analysts say that since the
scripts in which the LIC has made investments like Reliance, Ranbaxy, Tata Tea, Tata Steel, Bajaj Auto, ACC, Satyam Computers, L&T, and M&M are doing well in the share market, it is right time to invest in the scheme. The analysts admit that after the fall in interest rates to around 6 per cent, LIC’s Bima Plus is one of the few equity based scheme which is offering good returns besides security cover for one’s life. The plan has tax benefits under both Section 88 and Section 10 (10 [D]) of Income Tax Act, that is both at entry and exit level for the policy holders.
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On-line lottery bid extended to August 20
Chandigarh, August 9 The on-line lottery was one of the two ambitious plans drawn up by the state government for revenue generation from non-traditional sources. While the Governor threw the spanner in the plan regarding setting up casinos in the state, the lottery project is facing problems due to lack of interest of the investors. The diminishing interest has forced the state government to extend till August 20 the last date for submission of commercial bids for the lottery operations. Four companies — the Zee Group, the Essar Group, the Videocon and the Apollo Tyres — had bought the tender document was a sure enough indication about the drastic reduction in interest of investors in this new line of business.
— TNS |
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Apple festival from Aug 28 Shimla, August 9 The unique event will be organised by the Department of Tourism in collaboration with the Shimla Hotel and Restaurants Associations on the historic Ridge from August 28 to 31. Besides display of various varieties of the delicious fruit, a host of other activities like fancy dress, painting, apple parade, singing, dancing and photography competitions will be organised during the four-day festival. The tourist visiting Shimla will be afforded an opportunity to have a first hand experience of plucking apples straight from the orchards. The orchardists will compete for awards like “Apple King” and “Apple Queen” alongwith other prizes. The winners of the fancy dress competition will be given the apple prince and apple princess
award. Mr Mohinder Seth, President of the association, said that the event would not only provide an added attraction to the tourists but also promote the apple market.
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Basic operators criticise cellular companies
New Delhi, August 9 Cellular operators are claiming that yesterday’s TDSAT judgement that WLL (M) be limited to short distance charging area implied that the user of these services will be contained in a smaller radius, triggering off near panic among the burgeoning limited mobility subscribers. Cellular Operators Association of India claimed that of the four metros only Kolkata has one SDCA, while Delhi is divided into four SDCAs and Mumbai and Chennai three each, implying that WLL (M) user would not be able to use the handsets outside SDCAs even within a city. Contesting the claim, ABTO said Delhi and Chennai have one SDCA each, while Mumbai has two. WLL leader Reliance Infocomm, which has cornered 4.8 million users, assured its subscribers that the services being enjoyed by them would not be altered in any way by the judgement.
— UNI
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Haldia Petrochem to sign pact with IDBI
Kolkata, August 9 The company board, at its meeting last night, authorised the corporate management committee of HPL to sign the agreement with IDBI. Sources said this would help the company in emerging from the present problems which had largely arisen out of high debt component. Earlier, IDBI and other lenders asked the company to go to the CDR mechanism for which HPL would have to sign an agreement with the leader of the consortium.— PTI |
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K.R. Wadhwaney Domestic passengers’ photos on A-I tickets INDIA’S aviation progress has been adversely affected because of unprecedented war of attrition between Boeing and Airbus Industries. To manoeuvre bigger slice of cake, they have taken their aircraft ‘salesmanship’ tactics to despicable low. They have brought about their respective governments’ pressure on the Indian politicians and bureaucrats with the result that Air India and Indian Airlines have been unable to expand their fleet. Initially, world’s manufacturing giants were waging war on the Indian turf through India-born aerospace engineers, Dr Dinesh Keskar and Dr Kiran Rao. The battlefield, then, was Delhi and Mumbai. Now these two officials have been shifted to their companies’ headquarters from where they are making shots, which is far from ethical. A heavy chunk of money has been spent on these officials and ridiculously razor-sharp public relations exercise. The overhead expenses of manufacturers have shot up and their overall quantum of profits reduced. Regardless of the battle between Boeing and Airbus and regardless of prices, both national carriers, A-I and IA, should opt for aircraft which are suitable to them. There is no doubt that Boeing aircraft is as durable as Airbus plane. What is most important is which one is suitable for the airlines? The Managing Director of Air-India, Mr J.N. Gogoi has retired and Mr Sunil Arora has been made Managing Director of both national carriers. There are two schools of thought on Mr Arora being burdened with an additional responsibility. Some feel that he should have been left alone to steady the Indian Airlines plane, which is far from flying serenely. The other view is that by appointing common Managing Director for two airlines, there will be much greater cooperation and rapport in two airlines, than has been the case at present. Mr Arora has been with the Indian Airlines for quite sometime. He knows what is beneficial for the domestic carrier. But it will be advantageous for both carriers if they work as a well-oiled unit instead of pulling in different directions. Route reorganisation will be beneficial to both instead of indulging in overlapping. What is imperative is that Mr Arora should be able to finalise the acquisition of aircraft without any loss of time. The earlier new aircraft are inducted in the old and dwindling fleet, the better will be for both national carriers. Because of the infighting between politicians and bureaucrats, the aviation policy remains confined to the drawing board. The new Minister for Civil Aviation Rajeev Partap Rudy has promised much but achieved precious little in his three months in the office. If there is total apathy in the two carriers, the picture is equally dismal where the upgradation of metro airports is concerned. There is complete ad hocism in the Airports Authority of India. There is a rumour that the existing Chairman S.K. Narula will not be given extension. Maybe, this will start moving things in the AAI, which is a vital body in the aviation sector. Boarding cards Passengers flying in the domestic sector by Air-India flights will have their photos on their boarding tickets. This is more to facilitate customs inspectors to differentiate domestic passengers from international travellers than any stow away exercise. More than a year ago, four suspected Afghan Sikhs had flown to London as stow away. This lapse had occurred because the crew miscalculated the head count. |
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