B U S I N E S S

Timex Watches to tap rural segment
New Delhi, March 27
Watch manufacturing major, Timex Watches Ltd ,is working towards developing products primarily aimed for the mass market even as it plans to bring more international brands to the Indian market.

Simputer launched Kalam congratulates team Bangalore, March 27 Billed as one of the most innovative products ever to come out of India, the Simputer (Simple Computer) was unveiled for launch under the brand name, Amida. A model shows Amida Simputer during its launch in Bangalore. The Simputer, a cheap handheld computer designed by Indian scientists, will be priced between Rs 9,950 and Rs 19,950. — PTI photo

MG Rover to set up plant in Una
New Delhi, March 27
MG Rovers and Powertrain has forged technical collaboration with tractor company Sonalika for manufacturing 6+1 gear vehicles in Himachal Pradesh.

Bond or cash option for 7 UTI schemes
New Delhi, March 27
The Unit Trust of India Chairman, Mr M. Damodaran, today said investors in the seven UTI-1 assured schemes, which are to be foreclosed on April 1, 2004, will be given the option of accepting cash for the redeemed schemes or taking tax free bonds, which will carry an interest rate of 6.6 per cent.

Sahara flights to Maldives from May
New Delhi, March 27
After successfully launching its operations to Colombo earlier this month, Air Sahara is now set to extend its flights to Maldives from May. Air Sahara officials said here today that the airlines had already filed all “papers” for extending its operations to Maldives and will start the flights from May.

Aviation Notes

IA gets a raw deal
Indian Airlines is unfazed by two private airlines, Jet Airways and Sahara, making their overseas debut to Colombo. The more, the merrier. This is the national carrier’s philosophy. But IA officialdom is rightly concerned that private operators are being provided with better playing field than the national ones.

Investor guidance

Travellers can buy foreign exchange
Q: I’ve a query regarding the new rule as per which one can now take up to $ 25,000 on a foreign visit. Can one buy stuff worth $ 25,000 on the net through one’s credit card? Also, when one takes $ 25,000, is it stamped on one’s passport? Does one need to go abroad to take the money, or can one buy dollars as it is.

• GRAPHIC : INDIA'S FOREIGN TRADE DURING FEBRUARY & APRIL-FEBRUARY

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Timex Watches to tap rural segment
Gaurav Choudhury
Tribune News Service

New Delhi, March 27
Watch manufacturing major, Timex Watches Ltd ,is working towards developing products primarily aimed for the mass market even as it plans to bring more international brands to the Indian market.

“At the mass level, Timex is working at making analogue watches technologically compatible to sell them as mass products since the analogue ones are more acceptable to an average customer than digital watches,” the Managing Director of Timex Watches Ltd, Mr Kapil Kapoor, told The Tribune in an interview.

Most organised players are eyeing the urban population. For 730 rural Indians, there are only 90 million watches. Effectively, about 80 per cent of the untapped potential is in rural India.

“We know there is a huge untapped potential in rural India and we are fully geared to tap it. We have the Chartbuster range in the sub-Rs 1,000 category. The high-quality watches are affordable and meet the demands of the customers in the rural area,” Mr Kapoor said.

Presently, only one-fourth of the population owns a watch thereby reflecting that there lies a huge untapped potential in the Indian market.

“We are aware that there lies a huge untapped potential in the watch industry, which could be turned into demand to achieve volume sales,” he said.

Indian watch market is also witnessing an exeptional growth in the price range between Rs 1,000 and Rs 5,000 categories.

Of the 25 million watches sold in India, 18-19 million are sold in the sub-Rs 1000 category. This category traditionally grew at 10 per cent and was dominated by the unorganised sector. But over the last couple of years, the organised players are making their presence felt in a big way.

The company has earmarked a strong distribution network. “Also, we have an extensive extension plan, which aims to create a `Timexperience’ at key stores in India called `Club Timex’. This would also help us to reach at all levels of customers in different locations,” Mr Kapoor said.

Mr Kapoor said presently, the company has 22 per cent market share in the organised sector and with an annual growth rate of five per cent “ we expect to grow our market share to about 33 per cent”.

“We are expecting a compounded annual growth rate of approximately 20 to 25 per cent. More importantly, we have grown in the profitable segments, thereby substantially reducing our losses,” he said.

UK-based FCUK has entered the Indian market by introducing its collection of watches that would be marketed by Timex.

“Timex in the past has also marketed international brands. Timex was also responsible for bringing to India the Reebok range of watches that was powered by Timex. We do plan to bring to the Indian market watch brand such as Timberland, Opex etc in the near future,” Mr Kapoor said.

Timex has recently set up a global resource centre for developing software for its other group companies. “The resource centre would just help and service the global operations of Timex. It is not our core business,” he said.

Another niche segment caters to the technology- savvy consumers with brands such as EcoDrive from Citizen, Cognoscenti from Timex and Edge from Titan.

Simputer launched
Kalam congratulates team

Bangalore, March 27
Billed as one of the most innovative products ever to come out of India, the Simputer (Simple Computer) was unveiled for launch under the brand name, Amida.

Expected to make affordable access to IT devices a reality, the portable handheld computer’s features include Web-browsing capability, the ability to send handwritten e-mail in any language, voice mails and listening to music.

The Amida Simputer will be available in three models — the monochrome versions costing Rs 9,950 and Rs 12,450 and the colour version of Rs 19,950.

There was a pleasant surprise at the launch function when President A.P.J. Abdul Kalam telephoned from Rashtrapati Bhavan to congratulate the team that was responsible for making the remarkable device a reality.

‘’I am sure the Amida Simputer will succeed and have a good market,’’ the President said amidst a loud applause.

Mr Kalam enquired about the features of the gadget, including the interfaces and the operating system software.

‘’The most important thing is teachers and professors have become entrepreneurs. This is a good thing to happen,’’ he said.

‘’My message to the Simputer team is that they should continuously work to maintain competitiveness, which can happen by paying attention to cost, quality and time to market,’’ he added.

The Simputer was co-invented by four scientists at the Indian Institute of Science here. In 2001, they came together to form PicoPeta Simputers, which entered into a tie-up with the defence public sector undertaking Bharat Electronics Limited for manufacture.

The prototype of the Simputer was first unveiled in 2001 with a promise that the handheld device computer would be packed with features and retail for less than Rs 10,000.

The Amida Simputer will be available through the Website, amidasimputer.com, and in showrooms that will be opened in April at Bangalore. — UNI

MG Rover to set up plant in Una

New Delhi, March 27
MG Rovers and Powertrain has forged technical collaboration with tractor company Sonalika for manufacturing 6+1 gear vehicles in Himachal Pradesh.

Himachal Pradesh Co-operative Minister Kuldeep Kumar said the company has been allotted 1.25 lakh square metres in the Amb tehsil of Una district on the subsidised rates. The company, however, will pay the price of the land in deferred installments.

The company, which will export low-cost engine components from India to Europe, will act as a ‘’mother unit’’ and attract ancillary units, resulting in direct and indirect employment of more than 5,000 persons.

The Minister said the company will be given the benefit of excise exemption for 10 years from the date of commercial production and income tax holiday for the first five years. Thereafter, there will be exemption of 30 per cent of the prevailing income tax rate for further period of five years, besides freight subsidy for five years.

The annual turnover of the industrial sector in Himachal Pradesh is more than Rs 4,800 crore. The state has 196 medium and large scale units and 30,176 small scale units which together make an investment of about Rs 3087 crore and generate employment for 1.60 lakh people.

The Himachal Government has introduced the concept of single window clearance system, thus making the procedure simpler for setting up of industries in the state. — UNI

Bond or cash option for 7 UTI schemes

New Delhi, March 27
The Unit Trust of India (UTI) Chairman, Mr M. Damodaran, today said investors in the seven UTI-1 assured schemes, which are to be foreclosed on April 1, 2004, will be given the option of accepting cash for the redeemed schemes or taking tax free bonds, which will carry an interest rate of 6.6 per cent.

The bonds are to be guaranteed by the Central government.

‘’The holders of the schemes that do not exercise their option will be given bonds,’’ Mr Damodaran told newspersons on the sidelines of a one-day national seminar on ‘Emerging role of mutual funds in wealth management’.

The seminar was organised jointly by the Association of Mutual Funds of India (AFMI) and ASSOCHAM.

Mr Damodaran said the value of the bonds would be equal to the assured value of the units as on March 31, 2004.

He said the money acquired from the bonds will be used to meet the shortfall in the seven schemes.

‘’The seven assured return schemes are being closed because they are non-viable,’’ Mr Damodaran said.

The seven schemes are Children Gift Growth Fund 1986 (CGGF 86), CGGF 99, Bhopal Gas Victims- MIP 1992, Monthly Income Plan 1998 V (MIP98 V), MIP 99, Rajlakshmi Unit Plan 1994 (RUP 1994) and RUP 99. — PTI

Sahara flights to Maldives from May
Tribune News Service

New Delhi, March 27
After successfully launching its operations to Colombo earlier this month, Air Sahara is now set to extend its flights to Maldives from May.

Air Sahara officials said here today that the airlines had already filed all “papers” for extending its operations to Maldives and will start the flights from May. The flight details have been filed with the Directorate General of Civil Aviation and also the Ministry of Civil Aviation.

Officials said according to the plans, the Air Sahara flights to Colombo will be extended to Maldives and will eventually work as a launching pad for further extending its operations to other countries.

The airlines officials are hopeful that they will get the clearance from the DGCA in the coming.

Aviation Notes

by K.R. Wadhwaney

IA gets a raw deal

Indian Airlines (IA) is unfazed by two private airlines, Jet Airways and Sahara, making their overseas debut to Colombo. The more, the merrier. This is the national carrier’s philosophy. But IA officialdom is rightly concerned that private operators are being provided with better playing field than the national ones.

According to a senior aviation official, the IA has successfully encountered private operations in the domestic sector. The national carrier has the wherewithal and competence to weather ensuing storm on regional routes manfully. “IA’s market share will indeed take a dip, but there is no cause for anxiety because ‘what one loses on swings, makes up on roundabouts’.

This is a robust thinking while facing competition from the private operators. The Government is free to allow them to fly to Colombo, Nepal and other neighbouring countries, but there is an urgent need of a uniform rule for all operators. If the IA is compelled to fly to the ‘unviable domestic routes to discharge its social responsibility’, so should be the case with these two private operators. Why should they be allowed to fly on commercially-viable metropolitan routes only?

The survey undertaken shows certain influences in the Government are unduly partial to private operators. Two rules are in operation-one for IA and other for private airlines. Ever since the initiation of the open-sky policy more than a decade ago, the facts reveal: “Heads private operators win; tails IA lose”. Why should the government treat its own child in a step-motherly manner?

It is difficult to conceive why Air-India should be made to operate special flights for Haj pilgrims? The passengers travelling for Haj are not only given heavily-discounted fares but are also provided with many other facilities. This is a heavy burden on the national carrier. The annual Haj operations should be considered a ‘commercial exercise’ and not a welfare ‘exercise’ to benefit the Haj pilgrims.

The government is free to provide subsidy for Haj operations. But all Haj operations should be independent without any strings attached. Apart from the loss of revenue to the national carrier, its schedule is totally thrown haywire when such ‘social obligations’ are forced on it.

Two national carriers continue to ‘cry’ for expansion of fleet. Without induction of aircraft, new, dry leased or wet-leased, two national carriers cannot expand their wings. This is for sure. The situation will stay unaltered until elections are over. The uncalled for delay has caused adverse impact on the growth of these two national carriers. The Government has already brought about further liberalisation in open sky policy. This was before the Union Cabinet dissolved the Parliament. This action has been to the advantage of private operators.

Whatever the fate of the IA, it has already introduced low fares on certain sectors as the lean season begun. The reduction is sizeable. It is to the extent of 60 per cent. It will be provided only to those passengers who have to take connecting flight to any foreign destination. The reduced fares will come in force from April 1.

Investor guidance

by A.N. Shanbhag

Travellers can buy foreign exchange

Q: I’ve a query regarding the new rule as per which one can now take up to $ 25,000 on a foreign visit. Can one buy stuff worth $ 25,000 on the net through one’s credit card? Also, when one takes $ 25,000, is it stamped on one’s passport? Does one need to go abroad to take the money, or can one buy dollars as it is.

— Smita Tripathi, , New Delhi

A: Yes one can walk to Amex and buy the foreign exchange.

The detailed rules on the drawal of forex or the remittance thereof are as follows:

The Reserve Bank does not prescribe the documentation, which should be verified by the ADs, while permitting remittances for various transactions, particularly of the current account. An AD will, before undertaking any transaction in foreign exchange on behalf of any person, require that person to make such a declaration and to give such information as will reasonably satisfy him that the transaction will not involve and is not designed for the purpose of any contravention or evasion of the provisions of the Act or of any rule, regulation, notification, direction or order issued hereunder.

ADs are advised to keep on record any information/documentation on the basis of which the transaction was undertaken for verification by the Reserve Bank. The clause further provides that where the person (applicant) refuses to comply with any such requirement or makes unsatisfactory compliance therewith, the authorised person will refuse in writing to undertake the transaction and will if he has reason to believe that any contravention/evasion is contemplated by the person, report the matter to the Reserve Bank.

Sale of exchange

ADs need not endorse on the traveller’s passport foreign exchange sold for travel abroad where the traveller is going abroad for a purpose, including private visit. However, ADs may, if requested by the traveller, record under their stamp and signature details of foreign exchange sold for travel, including private visit abroad. In case of issue of travellers cheques, the traveller should sign the cheques in the presence an authorised official and the purchaser’s acknowledgement for receipt of the travellers cheques should be duly maintained.

Period of surrender of foreign exchange

In case the foreign exchange purchased for any purposes is not used for the purposes or for any other purpose for which purchase or acquisition of foreign exchange is permitted under the provisions of FEMA the same or the unused portion thereof is required to be surrendered to an authorised person within 60 days from the date of its purchase.

Unspent foreign exchange

Unspent foreign exchange brought back to India by a traveller should be surrendered to an authorised person against payment in rupees within 90 days from the date of return of the traveller if the unspent foreign exchange is in the form of currency notes. If such foreign exchange is in the form of traveller cheques, the same should be surrendered to an authorised person within 180 days from the date of return. Exchange so brought back can be utilised by the traveller for his subsequent visit abroad during the period specified above. However, a returning traveller is also permitted to retain with him, foreign currency travellers cheques and notes up to an aggregate amount of $ 2,000 and foreign coins without any ceiling. Foreign exchange so retained can be utilised by the traveller for his subsequent visit abroad.

Use of cards

Schedule III of the Foreign Exchange Management (Current Account Transactions) Rules, 2000 specifies the various limits for drawal of forex. For example, $ 1,00,000 for person going abroad for employment, $10,000 for private visits to any country (formerly known as BTQ), $ 1,00,000 for persons emigrating, etc.

These limits do not apply for use of credit card for making payment by a person towards meeting expenses while such a person is on a visit outside India. Also, there is not enough clarity on the new rule regarding the enhanced limit of $ 25,000. The notification on the same is not yet released and till such time it just remains news and not a rule.

Also, one can buy the stuff on the Net using one’s credit card but bear in mind that the relevant import and customs duties will apply. There is no separate limit, either itemwise or in the aggregate prescribed. The limit on your card is the only limit.

PPF withdrawal

Q: You have mentioned that PPF withdrawal can be allowed once a year during the extended periods beyond 15 years I opened the PPF account in March, 1990, and extended it for 5 years 2 times. During this extended periods, I am allowed only one withdrawal in 5 years. Kindly let me know of my understanding (or that of the bank where I hold the account). Both I as well as the bank where I have the account are under the impression I can withdraw only once during the extended periods.

— H. Venkata payya

A: A subscriber, continuing his account with fresh subscriptions, can withdraw up to 60 per cent of the balance to his credit at the commencement of each extended period in one or more installments, but only one per year. On the other hand, the balance can be merely retained in the account without contribution till it is needed. Any amount, in part or full, can be withdrawn in installments, not exceeding one in a year. The balance will continue to earn interest till it is completely withdrawn.

It is surprising that the bank is having a misconception regarding such withdrawals. I request you to give me the name and the address of the bank.

BRIEFLY

Reserves set to touch $110b
Mumbai, March 27
India’s foreign exchange reserves climbed further by $402 million to a new record high of $109.998 billion during the week ended March 19 from $109.596 billion a week ago. According to the RBI’s weekly statistics report here, the ever-increasing foreign curency assets, which surged by $402 million to $105.806 billion, contributed the entire growth in the forex reserve.The gold reserve and the Special Drawing Rights (SDRs) continued to remain unchanged at $ 4.19 billion and $ 2 million. — UNI

IIT Delhi-NIIT
New Delhi, March 27
NIIT Ltd has partnered with IIT Delhi to offer an intensive learning programme in the sunrise field of Bioinformatics, an interdisciplinary science involving application of infotech to molecular biology. “This is NIIT’s fist tie-up with IIT Delhi. The course is better than similar programmes being offered by other institutions as students will use IIT Delhi’s supercomputing facility, which is the second largest in the country,” NIIT Chairman Rajendra S. Pawar told newsperson here. — UNI

Tata Tiscon
Kulu, March 27
Tata Iron and Steel Company launched its Tiscon reinforcement bars for individual and small users in Himachal Pradesh yesterday at a function here. Mr Arun K. Handa of Tata Tiscon at Chandigarh, told mediapersons that Tiscon is produced, using the world’s most advanced technology, “the Tempcore Process”, introduced in India for the first time under licence from Centre de Rechaerche Metallurgiques (CRM), Belgium. — OC

Vardhman Spin
Chandigarh, March 27
The CII (Northern Region) today declared Vardhman Spinning and Gen Mills as the winner of its award for progressive cotton farmers. The award had been instituted by the CII in 2000 for the progressive cotton farmers in Punjab, who have achieved significant improvement in the yield rate by adopting modern scientific farming practices. — TNS

LSE branch
Amritsar, April 27
Ludhiana Stock Exchange Securities has opened its third branch of its depository services in the state here today. It was inaugurated by Mr J.P. Aggarwal, CMD and senior member of the exchange. — OC