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Economy in resilient mode: Chidambaram
Sensex rises to
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Interest from NRI
deposits may be taxed CMP doesn’t
amuse trade unions Trade unions today said the draft Common Minimum Programme (CMP) was “not acceptable” to them as it does not meet the demands of the labour sector. Warburg earmarks
Rs 200 cr for Max pie Warburg Pincus, the world’s second largest buyout firm, will pick up 29 per cent stake in Max India at Rs 200 crore. Shimla, May 24 The failure of the HPMC, a public sector undertaking engaged in the processing of horticulture produce, to contribute its equity share and indecision over the farmers equity has virtually brought work on the Rs 40-crore wineries project to a standstill. New York, May 24 In response to the outsourcing of jobs to India and other low-cost countries, Tennessee has become the first state in the United States to enact a law discouraging companies to offshore government work.
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Economy in resilient mode: Chidambaram
New Delhi, May 24 “Mr G. N. Bajpai ( SEBI Chairman) had said last week that SEBI was looking into it. It would continue to do so”, Mr Chidambaram told newspersons after taking charge as Finance Minister today. Exuding confidence about the resilience of the economy, the Finance Minister said the new government’s focus would be on employment-oriented growth with focus on agriculture and manufacturing. “Economy is in resilient mode and I am confident about consolidation of the growth momentum with emphasis on agriculture, manufacturing and employment”, he said. There were, however, “some areas of concern”. “These will receive special and careful attention”, even as he did not specify these areas. He also indicated that the government could announce policy initiatives before the Budget which was expected to be presented in July. “All governments have announced measures even before the Budget is formally submitted”, he said. Reiterating the government’s commitment to the economic reforms process he said: “We are going back to the days of the original reformer. That is how the whole country looks at him”. Mr Chidambaram also took a dig at the India shining campaign of the erstwhile NDA government. “We want India to shine. That is an aspirational statement. But India should shine for all Indians. To declare that India is shining amounts to mocking at the poor of India”, he said. While refusing to comment on the Rs 50,000 crore investment programme in infrastructure and agriculture announced by the Vajpayee government, Mr Chidambaram said huge investment was required in agriculture, manufacturing and employment generation. “We will find money for public investment. The government is bound by the Fiscal Responsibility Bill. It lays down a roadmap for objectives”, the Finance Minister said. He said the new government wanted “India to shine. This could happen through good economics, good politics and hard work”. Meanwhile, Steel Minister Ram Vilas Paswan said today that he would try and impress upon Prime Minister Dr Manmohan Singh to bring out state-owned Sponge Iron India Limited (SIIL) and Manganese Ore from the disinvestment process. “This is line with our government’s stated policy of not disinvesting profit-making public sector units. I will meet Finance Minister P. Chidambaram and Dr Manmohan Singh to reverse the disinvestment process of SIIL and MOIL”, Mr Paswan told newspersons after taking charge as Steel Minister today.
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Sensex rises to welcome FM Mumbai, May 24 Monday’s trade saw a sustained rally in technology, telecom, and auto shares. The Bombay Stock Exchange’s bellwether index closed at a high of 5123, gaining more than 3 per cent or 161 points. The index opening 32 points higher at 4,993. The Nifty also gained more than 3 per cent and closed at 1607. However analysts warned of market sentiments being cooled in the coming days when the Common Minimum Programme being formulated by the ruling coalition in New Delhi could raise barriers to economic reforms. Brokers were also concerned about reports of the Indian government pressing in the Central Intelligence agencies to crack down on the bear cartel which hammered prices last week amidst reports that Congress party president Sonia Gandhi was to take over as Prime Minister. The markets plunged 800 points but rose on assurances that economic reforms were on target. Brokers said the new government may take the remarks by former disinvestment minister Arun Shourie seriously that a bear cartel hammered prices when shares of major oil companies were being listed two months ago and crack down on the bears. Monday’s gainers included Infosys, which surged 8 per cent while Wipro was up over 6 per cent. Other gainers in the tech sector included Rolta, NIIT, Visual soft, Geometric, Tata Info, HCL Tech which all gained in excess of 10 per cent.
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Interest from NRI deposits may be taxed
Mumbai, May 24 Interest on non-resident external (NRE) term deposits may also be changed to London Inter-Bank Offered Rate (LIBOR) of corresponding maturity, the internal group on External Liabilities of Scheduled Commercial Banks said in its report to the central bank. In the recent past, there have been attempts to reduce India’s external debt by prepayment but NRI deposits have been a major source of increase in external debt in this period. The group is of the view that in the fast-changing global scenario, there are dangers of excessive short-term debt and its share in overall external debt should be low. The off-balance sheet exposures of banks in terms of foreign currency are restricted with safeguards on quantum of such exposures and are not likely to raise any systemic problem, it said. NRI deposit schemes were given tax benefits in the past to attract foreign exchange funds in the times of pressing Balance of Payments requirements. However, over the years, NRI deposit inflows have become much larger and there is no need to give such benefits on these deposits in light of the comfortable forex reserves. The RBI proposes to reintroduce capital indexed bonds with inflation-linked returns to deepen the government securities market.
— PTI
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CMP doesn’t amuse trade unions New Delhi, May 24 “CMP is inadequate and not acceptable to us,” All India Trade Union Congress (AITUC) General Secretary Gurudas Dasgupta told reporters after its national convention held here. He said the trade unions would be finalising the workers’ charter by tomorrow and meet the Prime Minister and Labour Minister Sis Ram Ola. Elaborating on workers’ charter, Mr Dasgupta said it included restoration of provident fund interest at 9.5 per cent, amendments to bonus and Payment of Wages Act, winding up of disinvestment ministry, labour law reforms and steps to be taken in view of Supreme Court’s observation on Right to Strike. Today’s meeting, attended by CITU, AICCTU, HMS, TUCC, UTUC and UTUC (LS), also endorsed the view that there should be higher interest rates for the small savings.
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Warburg earmarks Rs 200 cr for Max pie
New Delhi, May 24 Max India today announced it would issue 10 million equity shares of Rs 10 each at an issue price of Rs 200 per share through private placement to Warburg Pincus. With this investment, Max India joined the select group of Indian companies in which Warburg Pincus has made investments. The total investment of Warburg Pincus in India is over $850 million. Max group chairman Analjit Singh said raising additional capital at this stage was a part of the company’s long-term financial plan to support its two capital intensive businesses of life insurance and healthcare. He said, “this partnership will accelerate our growth plans in the life insurance and healthcare provider sector to emerge as leaders.”
— UNI
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HP wine project whines Shimla, May 24 However, so far only about Rs 1.5 crore has been spent on the project and work has been progressing at a snail’s pace over the past one year. The negative attitude of the bureaucrats after the change of the government sent wrong signals to the joint venture partner. Subsequently, Mr Virbhadra Singh, the Chief Minister, reassured that the change of political set-up in the state would not affect the project and that his government was keen on its
implementation. The project is still not making headway due to the failure of the government to take decision whether or not the HPMC will continue as a partner in the project. The corporation has not been able to contribute its equity share. It has been seeking funds from the government for purpose. The government, on the other hand, wanted the corporation to raise its own resources. A final decision has not been taken in this
regard. Further, the equity of the farmers was to be raised by selling shares after completion of 60 to 70 per cent of the work on the project. However, so far only 10 per cent of work has been completed. The joint venture company, Himachal Indage Limited, has now decided to raise a bridge loan from the state cooperative bank to make up for their equity. However, for securing a loan, the government will have to stand guarantee but it is unnecessarily delaying the matters as a result of which the project is
suffering. It was a major step towards diversification from apple to grapes and ensure remunerative returns to apple-growers by processing the inferior grade of fruit, which found its way into the market, affecting the overall prices. The government lost about Rs 8 to Rs 10 crore on procurement of fruits every year. Besides different kinds of wines, a whole range of fruit-based products like apricot spirit, wine cooler, Kalvadosh, a fruit brandy and sparkling juices were to produced under the project. However, all this would be possible only if the government takes prompt decisions.
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US state enacts anti-BPO law
New York, May 24 The Bill was piloted following the rising controversy over offshoring of white-collared jobs to India and other countries with large populations of educated English speakers willing to work for significantly lower wages, The Tennessean and The Daily Times reported. Tennessean Governor Phil Bredesen had signed the law that offers businesses an incentive for not sending data-entry and call-centre work out of the country to cheaper offshore locations.
Telstra
Australia’s state-owned telecom giant Telstra today said it will send 450 software jobs to India as part of an outsourcing agreement with computing major IBM Global Services. “Telstra expects to save hundreds of millions of dollars by sending some of its jobs offshore,” Telstra’s Group Managing Director (Regulatory, Corporate and Human relations) Bill Scales told an Australian Senate committee today. The jobs were being outsourced to India as part of the company’s agreement with IBM Global Services to extend their IT outsourcing arrangement, he was quoted by ‘The Australian’ as saying.
SAP AG
German software giant SAP AG will invest € 20 million for expansion of its India development centre in Bangalore. “We will invest € 20 million for expansion of our development centre in Bangalore in 2005,” Joint Managing Director of SAP Labs India Martin Prinz said. Set up with an investment of € 20 million, SAP’s India campus started functioning in December 2003. It can accommodate 1200 developers. The expansion of the India campus has been necessitated as the company has started hiring aggressively. By the end of 2004, SAP plans to add 500 engineers in India.
— Agencies
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