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RBI pegs GDP rate
at 7 pc Create jobs,
Kalam to entrepreneurs
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Centre, states
differ on agri-marketing HP for direct
marketing of farm commodities Cabinet clears
Bill on economic zones Margin trading
from Feb 1 Digital buyback
starts on Jan 19 Tax collection up
23 pc J&K Bank net
rises 31 pc Gold in demand
despite hike in price
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RBI pegs GDP rate at 7 pc New Delhi, January 7 “Growth for 2003-04, which was estimated at 6 to 6.5 per cent at the beginning of the year, now appears to be around 7 per cent with an upward bias; while inflation, which then was assumed to be in the range of 5 to 5.5 per cent, may now be in the range of 4 to 4.5 per cent”, Governor of RBI Dr Y.V. Reddy said here today. Addressing captains of Indian industry at the 76th AGM of FICCI here, he said that the RBI expects the “growth momentum to be reinforced, inflation will be indicated, financial stability continue to be maintained and the external sector to perform well”. “May I say that the overall developments in the economy are favourable and provide the main springs for a strong revival of investment by industry”, the RBI Governor said. The Mid-Term Review had placed the inflation projections for policy purposes in the range of 4 per cent to 4.5 per cent with a possible downward bias. It was also mentioned (in the Review) that RBI would continue to closely monitor the price behaviour “leaving no room for complacency on the inflation front”. Dr Reddy, however, noted that the “inflation trends in the last two months have not been unexpected but, the magnitude of price rise has been above the original expectations”. “The inflation outlook by and large remains benign, though careful monitoring and management would have to continue with a view to cushion supply shocks and better manage supply bottlenecks for individual commodities so that price volatilities are evened out”, he said. The RBI Governor said the foreign exchange reserves are at a more comfortable level than ever before and “there is adequate liquidity in the system”. “The yield curve has slightly steepened. These gains can, however, be consolidated with further progress in regard to credit delivery and credit pricing. Moreover, investment activity, both in the public and private sectors has to pick up to enable sustained acceleration in growth”, Dr Reddy said. Assuming that there are no unexpected adverse developments, “there is merit in maintaining status quo as far as the monetary and credit policy measures concerned, while pursuing with the reform process”. On the credit front, the RBI Governor said that there has been an impressive increase in priority sector lending in the current financial year and this has posted the
highest growth in recent years. “There is scope for further improvement in regard to both credit pricing and credit delivery. Efforts by the RBI, with close cooperation from banks will have to be intensified”, he noted out. Regarding the developments on the forex market he said that the Indian forex market generally continued to witness “orderly conditions” during recent months. There are, however, emerging pressures on the distribution of the burden of adjustment mainly between the US, Euro area and Asia, especially Japan and China. “Under these circumstances, there appears to be considerable merit in continuing with our policy of exchange rate
management of the rupee addressing essentially the volatility issues without a fixed target”, he said.
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Create jobs, Kalam to entrepreneurs New Delhi, January 7 “Higher education must be backed by employment opportunities for absorbing the three million graduates passing out from colleges and universities every year”, the President said, while delivering the inaugural address of the 76th Annual General Meeting of FICCI here. There has been a substantial growth in our higher educational system. However, our employment generation system is not in a position to absorb the graduates passing out from the universities leading to increase in educated unemployed, year after year, he said. “A multi-pronged strategy is needed to make education more attractive and simultaneously create employment potential”, he said. The educational system should highlight the importance of entrepreneurship and prepare the students right from college education “to get oriented towards setting up the small scale industrial enterprises and any ventures in our rural areas which will provide them creativity, freedom and ability to generate wealth”. “Apart from entrepreneurship, the youth should have the spirit that we can do it. The banking system should provide venture capital right from every village level to the prospective entrepreneurs for undertaking new enterprises”, the President said. He said banks have to be proactive to support the innovative products for enabling wealth generation by young entrepreneurs by setting aside the “conventional tangible asset syndrome”.
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Centre, states differ on agri-marketing New Delhi, January 7 States felt that allowing private agri-mandis to come up would hit their revenues and lead to a vice-like grip of multinationals on the sector. Presiding over the conference of state ministers on reforms in agricultural marketing and land policy, Union Agriculture Minister Rajnath Singh said there must be promotion of competitive
agricultural markets in private and cooperative sector for establishment of direct purchase centres and farmers’ markets. He said states need to amend respective agricultural produce marketing committee
(APMC) Act to permit any organisation or corporate body to establish integrated facility for marketing of agricultural produce. States like Punjab felt that the proposal was good in principle but the mandi taxes was a major source of revenue of around Rs 400 crore annually which is used for development activity and the state would not like to forgo the
amount. Introducing the concept of “land share companies”, Rajnath Singh said cooperative and corporate principles will have to be blended to optimise production, generate employment and introduce new
agri-technology among the farmers. He said states’ restrictions on land leasing has resulted in land owners leaving their farms uncultivated due to fear of loosing it. He said under land share companies, farmers will collectively mobilise their land resources to facilitate access to modern technology and professional management. The Centre today asked sugar mills to immediately begin payment of Statutory Minimum Price
(SMP) for cane for 2003-04 and clear all past dues. Rajnath Singh also directed the mills to implement the recommendations of the Commission on Agricultural Costs and Prices
(CACP) in letter and spirit. “We have accepted the CACP recommendation
on cane SMP as it is without any tinkering on price, recovery and payment on additional recovery. Now the mills must implement them in the supreme interest of the millions of farmers”, Singh, former Chief Minister of Uttar Pradesh, said here. Meanwhile, government said buoyed by a bountiful monsoon and progressing sowing of grains and oilseeds, it was expecting an all-time high crop production, in the 2003-04 season with projections of it increasing to 320 million tonnes in 2011-12. Oilseeds output is projected to rise to 46 million tonnes in 2011-12 from 21.3 million tonnes in 2000-01. “There will be record crop production this year. Weather has been highly favourable to
agri-production and sowing schedule has been adhered to”, Rajnath Singh said.
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HP for direct marketing of farm commodities New Delhi, January 7 Addressing the state Agriculture Ministers on reform in agriculture marketing and land policy for accelerated agriculture growth and rural development, Himachal Pradesh Agriculture Minister Raj Krishan Gaur said it would also provide for integration of farm production in the national and international market to enable farmers to undertake market driven production plan and adoption of modern market practices. He said encouraging direct marketing, contract farming, involvement of professionals in management of market infrastructure,
rationalisation of levy of market fee on actual transactions of agriculture market, establishment of special commodity markets and involvement of private and cooperative sectors in the development of marketing infrastructure would boost the economic conditions of farming commodities. Mr Gaur said the state government would bring legislative changes to facilitate these processes and welcomed the model act proposal of single point levy of market fees in whole of the state. He also welcomed exemption of contract farming and direct farming from levy of market fees. The minister said the state government supported contract farming through a suitable environment by circulating an appropriate model agreement.
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Cabinet clears Bill on economic zones New Delhi, January 7 The Union Cabinet, which met here under the chairmanship of Prime Minister Atal Bihari Vajpayee, gave its nod to the Bill, which will provide for single-window clearance. Parliamentary Affairs Minister Sushma Swaraj told reporters that this would impart greater administrative and financial autonomy to the Centre by way of the establishment of an authority in each zone. The legislation provides for fiscal regime for SEZ units, developers, and off-shore banking units in international financial services centres. It will also pave the way for setting up special courts and a single-enforcement agency to ensure speedy trial and investigation of offences committed in SEZs. With a view to increasing investments between India and Mozambique, the Cabinet today approved signing and ratification of the Bilateral Investment Promotion and Protection Agreement between the two nations. India had already signed similar agreements with 56 countries and had finalised agreements with seven other countries, Ms Swaraj said.
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Mumbai, January 7 The corporate broking entities will be able to directly lend funds to investors to finance their trading in cash market, subject to certain regulations while any person holding securities (shares) would be able to lend them in market through stock exchange mechanism. “The SEBI board cleared the proposals yesterday at a meeting in Kolkata and we will come out with detailed notifications soon. We hope to commence working on the scheme from February 1”, SEBI Chairman G N Bajpai told reporters here today. This is a step for development of the market, Bajpai said, adding that the proposed margins trading and lending scheme did not have any resemblance with previous badla system as new mechanism would have strict disclosure standards. The new schemes would be reviewed after six months. On the current status of the market, the SEBI chief said the regulator was keeping a close watch on the market and was concerned over the sharp rise in index movement. “Whenever we come across unusual movement in the market, we will take prompt remedial measures and punish those found guilty of breaching regulations”, Bajpai added. Bajpai said investors would have to put in 50 per cent of the scrip value to take advantage of the margins facility and maintenance margins would be levied at 40 per cent rate. “These margins may look higher but we have had some bad experiences in the past, which has made us opt for higher provisions”, he said. The scheme had been worked out based on the recommendations of the secondary market advisory committee, he added. On the securities lending scheme, he said the existing one could be revived and any person, who has securities, could lend them in the market through exchanges. The regulator would review the working of the scheme after six months, he added.
— PTI
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Digital buyback starts on Jan 19
Mumbai, January 7 The dates for buying back shares under the book-building process would be from January 19 to January 23, the company said. The buyback price is likely to be fixed at Rs 750 per share. However, post offer, the Digital scrip would get de-listed from domestic stock exchanges. Digital GlobalSoft, in June, signed a definitive agreement with HP to combine operations with HP Services India Software Organization . Under the agreement, HP was to increase its equity stake in Digital GlobalSoft to 73.2 per cent from 50.6 per cent.
— UNI
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Tax collection up 23 pc
New Delhi, January 7 With this, the Centre has met over 67 per cent of the budgeted Rs 95,569 crore for the 2003-04 fiscal. “With advance taxes accruing usually by March, we expect to achieve the target,” Minister of State for Finance Shripad Naik told PTI here. Of the total direct taxes mop up, collection through Corporation Tax amounted to Rs 38,647 crore till December 31, 2003. The collection was Rs 29,102 crore in the previous year period, thus showing a growth of nearly 33 per cent. The Corporation Tax collection till Dec constituted 75 per cent of the estimated mop up of Rs 51,529 crore during 2003-04. Income tax collection grew by about 10 per cent to Rs 25,583 crore during the first nine months of this fiscal as compared to Rs 23,326 crore in the year-ago period.
— PTI
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J&K Bank net rises 31 pc
Mumbai, January 7 Speaking to reporters here, Mr Khan said, “it is only an in-principle decision as we have not worked out modalities as yet.’’ In effect, Mr Khan felt that it would take a quite a time as the process of selecting the merchant banks and giving them mandate to carry out the task is still a long way. The J&K Bank has, for nine months ending December 31, 2003, posted a net profit of Rs308.30-crore against Rs236.18-crore during the corresponding period last year, thereby showing a 31.50 per cent rise. Its operating profit zoomed to Rs513.32-crore during this period, witnessing an increase of Rs66.03-crore. The income of the bank also appreciated by Rs94.48-crore to Rs1,387.39-crore during the same period. The turnover of the J&K Bank had increased by 20.14 per cent. The deposits, credit and investment portfolios witnessed increase of 25 per cent, 10 per cent and 39 per cent respectively, as on December 31, 2003, over the corresponding date of the previous year.
— UNI
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Gold in demand despite hike in price Ludhiana, January 7 However, the steep rise in the prices of gold has not dampened the demand for gold as the wedding season is in full swing since October. Earlier, there was a slump in the market because of a lean marriage season. Mr Asim Nagpal of Tanishq and Mr Manak Chand Jain of Nikka Mal Jewellers maintain that the rise in prices of gold has not had any impact on its sale as people have to buy it for weddings. They say people are selling old gold and fetching high prices. Some people are exchanging old gold with new one. Mr Jain says these days a number of NRIs are buying gold in sizeable quantities. The steep rise in the prices of gold is being attributed to the weakening of the US dollar. European countries are buying gold in bulk as security since dollar is becoming weak, explains Mr Nagpal. Meanwhile, the demand for diamonds is also picking up now.
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