New Delhi, October 22
In view of the increasing criticism against outsourcing in England and other European countries, a number of Indian companies especially those in the IT sector, have begun to invest in England to enter the European market. Till now, over 400 Indian companies have set up shop in England and are creating over 10,000 jobs for the British youth.

Last year alone, 28 companies invested in England in comparison to 23 companies from China. Wipro, Tata Consultancy Services, Infosys are the major investors besides pharmaceutical leaders like Ranbaxy. Some readymade garment exporters from Punjab and Haryana have also set up their offices there.

Some companies have set up their project offices to deal with the outsourcing work done in India, besides to tap new markets. In India, the British High Commission has been assigned the task of encouraging Indian companies to invest there. It has roped in various industrial associations, including CII and Ficci, to attract Indian investors.

Industry experts say that after failing to check the export of jobs to India and other developing countries in the BPO sector, the UK Government has decided to approach Indian businessmen to invest in that country itself. It will help create new employment opportunities as well.

According to a recent Ernst and Young report, the UK has emerged as the top European investment location for research, development, headquarters operations, software, electronics, pharmaceuticals, financial services and telecommunications, including call centres.

In fact, the share of UK in the total FDI to the Europe has increased from 19 per cent in 2002 to 23 per cent in 2003. The British Government is hopeful that it will be able to enhance the share.

Information available from the British High Commission points out that 28 new investments from India were established in the UK in 2003-2004, creating 646 new jobs and bringing the total number of Indian companies in the UK to 480, with over 350 in the IT, software sector.

India is now the second largest source of FDI into the UK from Asia in terms of projects and jobs generated and ranks among the UK’s top ten foreign direct investment markets.

British High Commissioner to India Michael Arthur, who takes a keen interest in economic diplomacy, has even launched a special tool-kit for Indian companies looking to expand into the UK.

Nasscom president Kiran Karnik said, “The growth of the Indian IT industry is built on key partnerships with the world’s strongest markets, namely the UK and the USA. The active involvement of the Indian community and its contribution to the UK economy, particularly in the IT domain, is an important fact in the creation of the strong business relationship between our two countries.

Mr Sumit Bhattacharya, Executive Vice-President at HCL Technologies BPO Services, one of India’s leading investors in the UK, said: “we relied on UK Trade & Investment to guide us through the critical processes during the acquisition period. They were extremely helpful and consistently proactive not only during the transaction but on an ongoing basis.”

New Delhi, October 22
Union Petroleum and Natural Gas Minister Mani Shankar Aiyar will talk to the Russian authorities for a pact between the ONGC and Skochinsky Institute of Mining for cooperation in the field of Underground Coal Gasification during his visit to Moscow.

The minister, will lead a delegation, which is leaving tomorrow to participate in the Fourth Round of the Russian Oil and Gas Week in Moscow, an official press note said today.

The minister will also visit the Skochinsky Institute of Mining, Moscow with whom ONGC is pursuing technical collaboration for Underground Coal Gasification (UCG).

UCG is a method of exploiting the coal deposits instead of mining the coal and bringing it to the surface. Through UCG, it is possible to exploit the deeper coals and lignites for their energy value, which are otherwise neither technically feasible nor economically viable at present. The UCG opens a way to exploit such untapped resources.

India has huge coal resources at depths below 600 metres. Even if a small fraction of this coal is exploited, it will go a long way to supplement oil and gas reserves.

In order to meet the growing demand of energy driven by economic growth, the country has to make sustained efforts for new sources of energy. The UCG provides a very good alternative energy source.

The product gas can substitute natural gas in all the applications.

“The UCG project is indeed economically viable, further all the components of the necessary technology and expertise is available in ONGC. Therefore, it is planned to access the overall technology from Russian collaborators immediately,” it added.

In due course, substantial gas products potential can be built and sustained on the basis of known coal reserves in India.

New Delhi, October 22
The banking industry is waiting with bated breath as RBI Deputy Governor Y. V. Reddy presents the Credit Policy early next week amid speculation that central bank may announce measures that could trigger an upward march in the interest rates.

The rising rate of inflation (which is at present hovering over 7 per cent) and burgeoning rises in price of rough and ready oil in the international market may force the RBI to adopt some stringent monetary measures.

Already, last month, the RBI had announced that a 50 basis point hike (0.50 per cent) hike in the cash reserve ratio (CRR) for scheduled banks in an attempt to reduce excess liquidity in the system.

The CRR is at present fixed at 5 per cent of the total deposits of banks.

Estimates suggest that one percentage point cut in the CRR reduces to the tune of Rs 16,000 crore of liquidity in the system.

Bankers were of the opinion that presently the system was having an excess liquidity to the extent of Rs 28,000 crore.

While a hike in CRR seems unlikely, especially in the context that it was only increased very recently, a hike in the bank rate cannot be entirely ruled out, experts said.

The bank rate is the rate at which RBI disburses its own funds to commercial banks and therefore represents the cost of borrowing for the banks.

This in turn serves as some sort of a yardstick at which commercial banks can lend to the final consumers — corporates and individual.

A hike in the bank rate, logically, would lead to a situation where the banks would raise the lending rates to the final borrower.

At present, the bank rate is fixed at 4.5 per cent — lowest in three decades.

Experts were also point out that a hike in the bank rate may lead to an immediate rise in the interest rates as banks may prefer to operate on a lower spread in view of the excess liquidity in the system.

“Currently, there is a situation where banks was awash with funds and corporates are not taking many,” a Delhi-based banker said.

Experts cautioned that it is important to note that monetary policies, which address the supply side issues of an economy, need to be appropriately complemented by fiscal policies which will spur demand.

New Delhi, October 22
Air Sahara and small airline operators recorded a significant increase in their share of domestic air travellers during the first half of the current fiscal in contrast to the declining market share of the Jet Airways and Indian Airlines.

While Jet continued to hold its leadership position capturing 43.4 per cent share during April-September, 2004, its share dipped by nearly four percentage points from 47.2 per cent in whole of the last financial year.

On the other hand, Air Sahara, Deccan Air and other small operators captured a market share of about 18 per cent, as per the figures compiled by the government on domestic air-traffic for the first half of the current financial year.

The Indian Airlines continued to trail at number two in the domestic aviation sector with a constant fall in its share. From 46.9 per cent market share in 2001-01, the Indian Airlines took a dip to 41.7 and 39.7 per cent in the two subsequent years.

During the first half of the current fiscal, the share of the Indian Airlines came down to 38.8 per cent, while Air Sahara improved its position from 13.1 per cent market share to 14.5 per cent during April-September this year, official sources said.

The other airlines which include mainly Air Deccan and small carriers had a share of 3.2 per cent this year, the sources said. — PTI

New Delhi, October 22
The Associated Chambers of Commerce and Industry of India (Assocham) has called upon the government to raise the corpus of Small Industries Development Bank of India’s (Sidbi) Venture Finance Scheme (VFS) to Rs 10,000 crore to promote credit to small and medium enterprises in the country.

The increase in corpus would enable a large number of small and medium businesses avail the facility and realise their export potential, it has argued.

In a representation to the government, chamber president Mahendra K Sanghi said the small and medium enterprises (SMEs) at present contributed over 35 per cent of the country’s total exports.

He said due to lack of finances the VFS of SIDBI is very limited and a good number of small and medium entrepreneurs have not been able to benefits from this scheme because of its tiny corpus size and also its larger conferment to IT sector.

Assocham has also suggested flexible labour laws as a large number of SMEs are facing problems with their employed work force.

The labour policy should incorporate a provision whereby units employing up to certain number of persons are exempt from the provisions of labour laws, it said.

Mr Sanghi also recommended that the current practice of allowing Rs 100 lakh of turnover as exemption for small-scale units is not very productive as it acts as a hindrance for the sector to grow.

Ludhiana, October 22
If services provided by you fall under the purview of service tax and you do not register till October 31, you will soon have taxmen at your door.

The Excise Department will conduct street surveys from November 1 to 30, in two phases, to detect assesses who have not got registered themselves.

"If they are detected, the penalty will vary on the quantum of tax due," said Mr V.M.Verma, Assistant Commissioner, Central Excise, Division III and IV.

The jurisdiction of the Ludhiana commissionerate extends to the districts of Ludhiana, Sangrur, Mansa, Bathinda, Muktsar, Ferozepore, Faridkot and Ropar (excluding tehsil Mohali) & comprises of Central Excise Divisions Ludhiana 1, 2, 3, 4, Ropar and Sangrur.

With the enactment of the Finance Bill 2004, the scope of service tax has been extended to 12 new services in addition to the earlier 58 services.

Fast-track disposal camps are being organised for instant registration of service providers and for service tax adjudications. The Ludhiana Commissionerate recently organised fast-track disposal camp here under the extraordinarily tax-freindly scheme.

More than 60 assesses got themselves registered, said Mr Verma.

The service providers got themselves registered and filed applications for waiver of penalties. The applications to waive off penalties were acknowledged on the spot, Mr Verma said.

On the issue of service tax on job work, which several industry associations said had created confusion, Mr Verma clarified that if the process was excisable, it would not attract service tax, but if the process did not attract excise, one would be required to pay service tax.

Last year, the commissionerate had collected Rs 52 crore as service tax. The figure is expected to be doubled this year.

Chandigarh, October 22
With the prices of caustic soda firming up in the market worldwide, loss-making Punjab Alkalies and Chemicals Limited (PACL), which is undergoing the process of disinvestment, is up for the grabs. As many as six leading companies are in the run to grab the 44.2 per cent stake of PSIDC in this public sector unit.

One of the representatives of the UTI Bank told TNS that all the six companies appeared for questioning yesterday before a committee comprising members of the PSIDC, PACL and officials of the UTI bank, who were retained as Advisers for the disinvestment by the Disinvestment commission, Punjab, and the process is likely to be completed by December, 2004.

The six companies which have evinced keen interest in the holdings of PSIDC are Sterlite group, acquirer of Balco, Hindustan Zinc; Grasim Industries of the Aditya Birla group owned by Kumaramanglam; Chandigarh-based Ind Swift, an upcoming pharmaceutical company; Toubro Infotech and Industries Limited, now rechristened as Alchemist Limited, a Rs 300 cr company which has graduated from basic business sectors like steel to areas of food processing, floriculture, information technology and biotechnology ; Goel gases, New Delhi, which has interest in Himachal Pradesh for power generation ventures, besides one Member of Parliament of UP, who has already acquired Oswal Sugar mills at Mukerian.