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Thursday,
September 4, 2003, Chandigarh, India  
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Rising deficit can hit growth
Govt justifies sale of HPCL, BPCL
Philips to pump in $ 150m
Bajaj to float new company
Foreign firms
to invest in pension sector |
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Birla ranks 10th on Fortune
40 list
2 pc extra levy on apple growers goes
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Rising deficit can hit growth
Washington, September 3 “The persistent fiscal deficits continue to be a risk in a number of South Asian economies, particularly in India, as they can undermine the fiscal sustainability, contribute to a growing debt-GDP ratio, and lead to higher interest rates,” the World Bank said in its Global Economic Prospects. This could lead to divergence of public outlays from investments to interest payments and limit the scope of fiscal and monetary policies, the bank said. Noting that India’s fiscal deficit (both the Centre’s and the states’) was little changed from 11 per cent of GDP, despite increased revenue collection, the bank suggested fiscal consolidation, saying that it would not only mitigate such vulnerabilities, but also provide scope of action in macro-economic policies to pursue sustained higher growth. “Political risks and uncertainties also remain a concern because of both internal and external factors. Heightened domestic and regional instability can undermine the growth prospects and slow the pace of economic reforms,” the bank said. South Asia to grow by 5.4 pc
The economies of South Asia, pushed by higher growth in India, will grow at 5.4 per cent this year. Assuming a return to normal agriculture production, as in the case of India helped by a good monsoon, and a recovery in external demand and continued improvement in political stability and regional security, the World Bank expects the South Asia region to record 5.4 per cent growth this year, up from 4.2 per cent in 2002."A projection of higher growth in India underpins this forecast, predicted on the continued growth of the service sector in the country. Pakistan, Bangladesh and Sri Lanka are expected to benefit from the continued macro-economic stability and implementation of structural reforms," the report "Global Economic Prospects 2004: Realising the Development Promise of the Doha Agenda." Though for the third year in a row, the global economy is growing well below its potential at an expected rate of 2 per cent in 2003, growth in Sough Asia is expected to accelerate to 5.4 per cent," the report said. On a cautious note, the report said the forthcoming phase out of the agreement on textiles and clothing from January, 2005, can result in increased competition especially for those countries whose garment export accounts for bulk of merchandise trade from these countries. During 2002-03 India’s export grew 19.18 per cent to notch a record $52.2 billion
— PTI, TNS |
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Govt justifies sale of HPCL, BPCL New Delhi, September 3 “The government has taken a policy decision that disinvestment will take place in non-strategic sectors. The strategic sectors consist of arms and ammunitions and allied items of defence equipment, defence aircraft and warships, atomic energy and Railways,” the affidavit filed by the Disinvestment Ministry said. A Bench, headed by Chief Justice V.N. Khare, has fixed the matter for final arguments on September 5 on a bunch of PIL petitions challenging the government decision. The government said the oil sector was very important for the growth of economy and the disinvestment was an important instrument to achieve it. The court had earlier issued notices to the Centre, HPCL and BPCL on the PILs challenging the disinvestment decision on the ground that it had been done without the approval of Parliament. However, the government in the affidavit said the Disinvestment Commission did not find it necessary to take Parliament’s approval as it had conducted sectoral analysis of the petroleum sector and had recommended disinvestment of IBP Co Ltd, which was done through an executive order. Since BPCL and HPCL shares were sold between 1991 and 1994 through the executive order and disinvestment in Maruti Udyog was also done the same way, there was no need for Parliamentary approval in respect of the two oil PSUs as they could not be put on different footing, the government said. The government in line with the "Hydrocarbon Vison-2025" relating to the entry of new players in the oil sector, had in a resolution on March 8, 2002, laid down the
guidelines for authorisation of the eligible parties to market the transportation
fuels. "Similarly the government has deregulated exploration, production, refining and pipelines with a widespread private sector participation," it said. The government in its decision taken on January 25 this year had decided to offload its 34.01 per cent equity in the HPCL and 35.02 per cent stakes in the BPCL for disinvestment in the private sector. |
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Philips to pump in $ 150m
New Delhi, September 3 Kleisterlee, who along with the Royal Philips Directors is on a week-long visit to India to conduct a comprehensive review of operations and firm up future growth strategy. Stating that the company was eyeing a growth of 25 per cent in current year from Asia, he said India would be positioned as the competence centre for emerging markets. “The market conditions are attractive. India is a fast emerging economy with low product penetration. The country is gaining recognition for its increasing pool of local knowledge and talent”, he said. The Dutch parent has already amalgamated businesses including consumer electronics, lighting, domestic appliances and semi-conductors, under Philips India and increased its stake to over 93 per cent. The visit by the company’s senior management to India is the first time in 73 years and an indication of India’s growing importance as a business destination. While acknowledging that Philips needed to work more in the area of consumer electronics in the country, Kleisterlee said the company was looking at increasing it market presence in all areas as also show the double digit growth. “We would like to be the most admired and respected lifestyle and healthcare company in India, a consumer and market driven company and show double digit growth,” he said. Philips, which is a market leader in medical systems in the country, is planning to move its medical systems further forward in the country, he said. Philips Medical Systems, which is a 100 per cent subsidiary of the Dutch major, operates in imaging with ultrasound, cardiovascular, MRI, electro-physiological therapy systems and patient monitoring systems. Kleisterlee said the Dutch company would consider all options for its joint venture with LG, including initial public offer, private equity investors and cash accruals from the company to fund its expansion. — PTI
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Bajaj to float new company
New Delhi, September 3 The value of the new company would be anywhere between Rs 700 crore and Rs 1,500 crore, Mr Bajaj said on the sidelines of a SIAM seminar. “Both companies will have an identical shareholding and will be able to buy each other’s shares,’’ Mr Bajaj said. He said financial institutions and shareholders were asking the company to return the amount from surplus funds either in the form of higher dividend payout or through any other mode. “They were saying that this has affected the PE ratio of the company which in turn had reduced the Bajaj Auto’s share price in stock exchanges,’’ he said. He declined to give any time-frame for the demerger saying “it might take four months or two years.” — PTI
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Foreign firms to invest in pension sector New Delhi, September 3 “The FDI limit in pension sector has not been decided but the government has taken an in-principle decision to encourage the entry of foreign funds in the sector”, Joint Secretary (Capital Markets) U K Sinha told newspersons here today. The decision on the limit, however, has not yet been fixed and will be decided by the proposed interim regulator for pension funds. He said many overseas pension funds have shown keen interest in investing in the Indian market, but refused to give out any names of companies. Meanwhile, Sahib Singh Verma said there was “no guarantee from the government on minimum pension in the proposed scheme and in the event any new pension fund manager mismanages, there is no provision to safeguard the investments of employees as well as to prevent mis-selling”. It was based on the model adopted by Chile and cautioned that the scheme was fraught with risks as it involved management of funds by private parties. |
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Birla ranks 10th on Fortune 40 list
New Delhi, September 3 Mr Birla is the only Indian to figure in the Fortune list. Europeans swept the rankings with 24 persons making the grade. Five Russian billionaires were in the top 10 while British, Russians and Swiss nationals dominated this year’s 40 Under 40 list. Britain also had the most entries, with eight
persons ranked. “It may come as a surprise that five of the 10 richest people on this year’s 40 Under 40 list made their fortunes in a country that spent most of the last century under Communist rule,’’ writes Fotune’s Paola Hjelt in the issue that will hit the news stand on September 8. Mr Abramovich is followed by Swiss Ernesto Bertarelli of biotech giant Serono with $ 5.6 billion, German Stefan Quandt of BMW with $ 5.1 billion, Russian Mikhail Fridman of Alfa Group $ 2.4 billion, Venezuelan Lorenzo Mendoza of Empresas Polar $ 2.2 billion; Russian Mikhail Prokhorov of Norilsk Nickel $ 2.1 billion, Russian Oleg Deripaska of Base Element $ 1.8 billion, Russian Eugene Shvidler of Sibneft $ 1.6 billion.
— UNI |
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