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FDI cap in telecom sector hiked to 74 pc
New power policy paves way for private investment
Fin panel report approved
Cremica to bake more biscuits
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Strides inks pact with Mayne to make antibiotics
ONGC to build $1.2-b refinery in Sudan
Energy worth crores wasted
Learn about diamond purity, courtesy Tanishq
Gail to take 10 pc stake in Chinese co
ITC finalising response to ordinance
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FDI cap in telecom sector hiked to 74 pc
New Delhi, February 2 “The FDI cap on telecom has been hiked to 74 per cent,” Finance Minister P. Chidambaram told newspersons after a meeting of the Union Cabinet and the Cabinet Committee on Economic Affairs (CCEA). The Left, which had been opposing the proposal to on security considerations, threatened “direct action” if the government continued to pursue its own economic agenda. “The government has taken a very wrong decision despite the Left parties opposition. We will have to go in for direct action if the government continues to take such decisions under the pressure of the World Bank, IMF and similar institutions,” CPI(M) Politburo Member M.K. Pandhe said. He said that central trade unions would meet here tomorrow to work out a future course of action to oppose the economic policies of the government. “The government is going ahead with its own agenda. That is what we see in their nine-month rule. They are not talking of the people’s interest… there is no movement on the employment guarantee scheme or restoring the interest rate of EPF,” RSP party leader Abani Roy told newspersons today. CPI General Secretary A B Bardhan said the decision was not acceptable to the Left parties. “We have also raised our concerns about security aspect, control and management and want to set if these have been addressed,” Mr Bardhan said. Forward Bloc General Secretary Debabrata Biswas said that the “UPA government is taking all these decisions only to create conditions for instability of its own government.”
The domestic industry, however, offered a thumbs-up sign from the corporate world that felt that it would open the floodgates for further infusion of capital into the sector. “With increased foreign capital now being allowed, this would provide the Indian telecom industry the much-needed impetus to deliver on its ambitious target of reaching between 200 to 250 million phone connections,” Joint Managing Director of Bharti Tele-Ventures Rajan Bharti Mittal said. “Now that the regulatory concerns would be much less, investment opportunities in India in the telecom sector are sure to get a higher priority with several potential investors from the international business and investment community,” Tata Industries Managing Director K.A. Chaukar said. The Cellular Operators Association of India (COAI) Director-General T.V. Ramachandran said hike in FDI is the key requirement for boosting teledensity and reaching out to the unserved rural markets. “The funds of this magnitude, around Rs 1,60,000 crore, are clearly not available in the country and the greater proportion of this would have to come from foreign sources,” he said. However, Reliance Infocomm refused to comment on the landmark decision. The company has reportedly already chalked out its expansion plans and is not looking for any fresh equity. The consortium of Singapore Technologies Telemedia Pte and Telekom Malaysia Sdn Bhd, which bought 47.7 per cent stake in Idea Cellular Ltd for $ 390 million, said it would now consider purchase of additional shares in Idea.
Riders attached
The Union Cabinet, while hiking the FDI limit, did attach some riders to it. These include a condition that the majority of directors on the Board, including Chairman, Managing Director and CEO shall be resident Indian citizens. Moreover, in order to ensure that at least one serious resident Indian promoter subscribes reasonable amount of the resident Indian shareholding, such resident Indian promoter shall hold at least 10 per cent equity of the licensee company. In addition, Chief Technical Officer (CTO)/Chief Finance Officer (CFO) should be resident Indian citizens. No traffic (mobile and landline) from subscribers within India to subscribers within India shall be hauled to any place outside India. No telecom company will be allowed to transfer any accounting information, user information, and details of infrastructure/network diagram to outside India. Moreover, the company must provide traceable identity of their subscribers and no equipment manufacturer will be provided any remote access. “These conditions shall also be made applicable to the companies operating telecom services with existing FDI ceiling of 49 per cent. With above dispensation, the present provisions in FDI policy for investment company will no longer be applicable for telecom sector as indirect foreign investment in the licensee company will also be counted towards sectoral cap of 74 per cent,” official sources said. Telecom sector experts said today’s decision may result in some Indian companies going in for foreign public issue floats through American Depository Receipts (ADRs) and Global Depository Receipts (GDRs). The Cabinet decision clearly stipulates that 74 per cent foreign investment can be made directly or indirectly in the operating company or through a holding company. The domestic telecom industry had been consistently demanding a hike in the FDI cap as the industry would require an estimated Rs 1,60,000 crore to increase teledensity.
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New power policy paves way for private investment
New Delhi, February 2 The new policy aims at doubling the power capacity to 200,000 MW and provide electricity all the households in the next five to seven years. The policy will also lay down framework for attracting over Rs 1 lakh crore investment in the power sector. At present, the country is facing a power shortage of around 7 per cent resulting in loss worth thousands of crores to the economy. The electricity policy, framed under the Electricity Act, 2003, will focus on rural electrification to provide proper electricity connections to ten million households and 100,000 villages in the next five years. Besides laying emphasis on attracting private investment, the policy has allowed the states to continue with the cross subsidy to the agriculture and Below Poverty Line families through Budgetary support. Official sources in the Power Ministry said, “The Prime Minister took a personal interest in the early clearance of the policy considering its importance to push the economic growth of the country. Under the Common Minimum Programme (CMP), the UPA government has announced to provide power to all the villages.” At present, 56 per cent of the rural households do not have any access to power, they added. The new policy will also encourage power conservation through tax incentives and necessary legislation to curb power theft. They pointed out that under the 50,000 MW Hydro Initiatives, the new electricity policy would concentrate on tapping unharnessed estimated hydro potential of more than 150,000 MW in the country. Under the accelerated power development programme, the Centre is already providing liberal funds to the state for undertaking reforms in the power sector including bringing down transmission and distribution losses. The
government claims that states would generate revenue worth over Rs 50,000 crore annually by bringing down T&D losses. In addition, the new policy will also emphasise on attracting FDI in the power sector, besides independent “captive power” addition by industrial units. By ensuring more competition in the power generation, distribution and transmission, the government would try to bring down cost of power currently prevailing over Rs 2 per unit. The industrial chambers have claimed that with the addition of more power the economy would gain momentum, thus improving their competitiveness in the global economy.
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Fin panel report approved
New Delhi, February 2 Finance Minister P. Chidambaram said the 12th Finance Commission report has been accepted in toto and hoped that it has “taken into account the requirements of the states and made a generous and certainly deserving award”. The total transfer of taxes and grants to states would amount to Rs 7,55,751 crore between 2005 and 2010. Mr Chidambaram said the commission has recommended that all loans up to March 31, 2004 will be consolidated and charged at a reduced rate of interest of 7.5 per cent against the current rate of 9 per cent. The repayment period will be that of 20 years. Between 2005 and 2010, the share of central taxes and duties would be Rs 6,13,112 crore and grant of Rs 1,42,639 crore. The grant and aid for non-Plan revenue deficit amounted to Rs 56,855 crore. The state governments will be free to raise funds from the market while seeking the necessary permission from the Centre as envisaged under Article 293 of the Constitution. The Centre would, however, not stand guarantee for these loans sought by the state governments. The 12th Finance Commission has also recommended debt relief to states by suggesting that debts be written off within five years under the condition that fiscal parameteres as mandated by the Fiscal Responsibility and Budget Management Act are maitained. Mr Chidambaram said that he was “neither happy nor unhappy” and added that he was discharging “his constitutional responsibility”. The Cabinet Committee on Economic Affairs (CCEA) also approved a proposal to grant a six-month extension up to June 30 to an ongoing World Bank-assisted programme on enhancing the research programmes in the agriculture sector. Expenditure of the National Agricultural Technology Project during January-June this year would be met by savings of the project. The project aims to improve the effectiveness and financial sustainability of the technology dissemination system with greater accountability to and participation by farming communities, he said. The Union Cabinet also approved a proposal for financial support worth Rs 2,700 crore for Bharat Sanchar Nigam Ltd to be paid in the current and next financial year. Mr Chidambaram said Rs 1,408.9 crore would be reimbursed to BSNL, which is two-third of Rs 2,113.35 crore payable by the PSU towards Licence Fee and spectrum charges for the current financial year (2004-05). The Cabinet also cleared one-third of the Licence Fee and spectrum charges payable by BSNL in the year 2005-06 which comes to about Rs 700 crore and this would be reimbursed to BSNL in the next fiscal. The Cabinet approved reimbursement of backlog worth Rs 591.02 crore on account of shortfall in the reimbursement of licence fee and spectrum charges paid by BSNL for the years 2001-02 to 2003-04.
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Cremica to bake more biscuits
Una, February 2 The hi-tech automated plant, when fully operational, will have a production capacity of 70,000 tonnes per annum. With this, the total annual biscuit production of the group would go up to 90,000 tonnes per annum, said Mr Ajay
Bector, Managing Director, Cremica Agro Foods. As many as 14 varieties of biscuits will be manufactured from here to cater to all palates. At present, one of the lines is completely dedicated to cater to the ITC requirement of 20,000 tonnes of biscuits per annum. The ITC, recently tied up with them for their brand -
Sunfeast. The close proximity of the plant to its existing facility in
Phillaur, near Ludhiana, was another consideration for making such a big investment outside Punjab. It has provided employment to 400 people, including 85 per cent
Himachalis. The turnover of the company would go up three times from Rs 130 crore in the next three years as the biscuit segment has been showing a steady growth of 35-40 per cent per annum. The company boasts of clients like
Barista, Pizza Hut, McDonald’s, Cafe Coffee Day, Britannia and Jet Airways. Talking about expansion, he said the company, a leader in the liquid condiments business, is now all set to foray into the ready-made gravy segment by launching flavours in the market next month. These would include special gravies for chana
masala, rajmah masala, shahi paneer, tikka masala, korma, makhni masala and daily masala for any vegetable. The company has also tied up with Cadbury’s India Ltd for manufacturing Cadbury Bytes and Cadbury chocolate sauce. The sauce will be in the market by next week, he added. The company is exporting a part of its products, including biscuits, ketchup and buns, to Australia and African countries, said Mr
Bector. “What started as a hobby 20 years ago is a full-fledged industry now,” says Mrs Rajni
Bector, the group Chairperson.
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Strides inks pact with Mayne to make antibiotics
Bangalore, February 2 The six products, that command a total business of $ 1.3 billion, would be introduced in 2006-end, Strides CEO Arun Kumar told reporters here. Both firms had last month signed a similar deal for the manufacture of six injectable, non-cytotoxic products for the US market that has a total business of $ 350 million. “It is not just the low costs (in India), but it also helps us get the product to the market faster than producing them in developed nations or outsourcing to third party firms,” Mayne Group Managing Director and CEO Stuart James said. Both Strides and Mayne officials declined to comment on the financial details of the deal nor gave any projections from the joint initiative.
Morepen Lab
Morepen Laboratories Ltd has filed patent for a $ 10 billion cholesterol lowering drug — Atorvastatin Calcium — in 33 countries, including the US and Canada. “Morepen is in the process of finalising tie-ups with US generic companies for launch of the product and aims at capturing 15-20 per cent market share in post-patent regime,” a press note of the company said. The market size of Atovarstatin Calcium worldwide is estimated to be about Rs 45,000 crore. The company said it had got approval for the drug under the Patent Cooperation Treaty (PCT) last year and the same was published by World Intellectual Property Organisation. Besides the US and Canada, Morepen has also filed the patent in the European nations among 33 countries, the city-based pharma company said in a statement.
— TNS, UNI
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ONGC to build $1.2-b refinery in Sudan
New Delhi, February 2
We have now mandated the ONGC to build the refinery,” Sudanese Minister of Energy and Mining Awad Ahmed Al-Jazz said. Sudan wants to revamp and expand the capacity of its existing refinery mainly for export of petroleum products to south and east African countries, he said. The ONGC will build the refinery, which will refine Nile blend crude oil produced in south Sudan, on build, operate and transfer (BOT) basis. It will take 32 months to build the refinery from the date of final signing of the concession agreement. Sudan has also mandated the ONGC to build a $200 million multi-product pipeline from the Khartoum refinery to Port Sudan. “Work on the pipeline began last week and is expected to be completed by August 2005,” he said. The ONGC will raise non-recourse finance for funding the two projects. “This will be the largest non-recourse finance ever raised by an Indian company. We are getting Indian and European banking and financial institutions to fund the projects,” company chief Subir Raha said. —
PTI
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Energy worth crores wasted
New Delhi, February 2 Inefficient use of energy, including petroleum and electricity, is resulting in huge financial losses besides rise in cost of production of the manufacturing goods and services consequently adversely affecting the competitiveness of the economy, said Mr S.C. Tripathy, Secretary, Petroleum and Natural Gas. “Ours is one of the most energy inefficient economy in the world. We use about 2.5 times of energy in comparison to the world average to produce same quantity of goods,” said Mr Tripathy while speaking at the valedictory function of the Oil and Gas Conservation Fortnight. Mr Tripathy lamented that despite sharp rise in the oil prices, the India was still wasting a large amount of energy. “Our total energy capacity, including petroleum, coal and hydel, is equivalent to 330 million tonnes of oil, but at the consumption level we are getting just 220 MT resulting in loss of over 100 MT worth of energy. Since our energy expenditure is in the range of Rs 9 lakh to Rs 10 lakh crore, we are wasting energy worth over Rs one lakh crore annually,” he observed. Oil companies alone are selling oil products worth Rs 4 lakh crore annually, which comprise 42 per cent of total energy mix. Through awareness and better maintenance of vehicles, the oil bill can be substantially checked. Lauding the role of the Petroleum Conservation Research Association, Petroleum Secretary said, “It is not enough to observe oil and gas conservation just for a fortnight, it should continue for the whole year. We will have to convert into national movement considering the limited reserves of natural energy sources, and impact of energy wastage on the environment.”
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Learn about diamond purity, courtesy Tanishq
Chandigarh, February 2 Mr Alok Badoni, Business Executive, Tanishq, said, ‘‘The campaign is designed to educate customers about the quality of diamonds that are available in the market today. Tanishq has undertaken this initiative to spread awareness about diamond grading standards.’’ The campaign will spread awareness about the grading of diamonds on the basis of the 4Cs — cut, colour, clarity and carat. ‘‘Purity in diamonds, unlike in the case of gold, is still a very esoteric concept. Very few people are actually aware of the science involved and parameters on which the purity of diamond depends. Through this campaign, Tanishq aims to tell unsure customers that diamond purity is an exact science,’’ he added
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Gail to take 10 pc stake in Chinese co
New Delhi, February 2 Gail will take upto 10 per cent of the Hong Kong-listed firm through a share subscription and has agreed not to sell the shares for two years. China Gas and Gail will form a 50:50 joint venture to invest in natural gas projects in mainland China, such as urban gas networks and long-distance pipelines. The venture will also sell and distribute liquefied petroleum gas. China, whose major cities are often shrouded by smog, is keen to promote the use of cleaner burning gas and reduce its reliance on coal. The MoU with Gail follows China Gas selling 10 per cent stake each to Korea Gas Corp. (Kogas), South Korea’s dominant gas supplier, and City Gas Pte. Ltd., the gas distributor run by Singapore’s state-owned investment company Temasek Holdings. — PTI
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ITC finalising response to ordinance
Kolkata, February 2 Although ITC officials remained tight-lipped even two days after the development became public, it was learnt that the company’s legal experts were huddled together to find out ways to deal with the situation in a court of law. “Our legal experts are studying the implications of the ordinance and on the basis of their opinion, the next course of action will be determined,” a company source said. The tobacco major’s legal team would report to the top management about the legal options available and the company is then expected to make its stand public, the source said. The source, however, said the company has not received any demand from the authorities for payment of any excise dues as yet and only has information about the ordinance through media. — PTI |
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