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RBI okays Idbi Bank merger with Idbi
Branson keen to make $ 50-m personal investment in Indian airline
Revocation of neem tree patent upheld
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Industry bodies welcome Vat
Vat to impact dry fruit trade in region
KSK to invest $ 1 b in captive power sector
Sensex repeats yesterday’s feat
Allahabad Bank exceeds farm loan target
Corporate news
Auto scene
Buoyant month for cars, mobikes
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RBI okays Idbi Bank merger with Idbi
Mumbai, April 1 The Reserve Bank of India today gave its seal of approval for amalgamation of the banking subsidiary with IDBI creating a financial powerhouse with asset base of over Rs 80,000 crore. The RBI, in a press note here, said that it has sanctioned the scheme of amalgamation of these two banks in exercise of the powers contained in Sub-Section (4) of Section 44A of the Banking Regulation Act, 1949. An Idbi official, when contacted said, “we are working out the process for the integrated entity and it is too early to specify the exact asset base and the performance as on March 31, 2005”. The merger process began early last fiscal when the Idbi Act was repealed to convert the leading development finance institution into a banking entity. Later, the board of both the banks approved the merger and initiated the process of integration of operations under the chairmanship of M. Damodaran, who assumed charge to head the financial institution last year. The government would continue to hold over 51 per cent stake in the merged entity, which will have development finance as focus and the erstwhile Idbi Bank will function as strategic business unit for retail focus. As on March 31, 2005, the asset base of Idbi Bank stood at Rs 18,000 crore and has posted over 40 per cent growth for its customer assets and deposits, its Managing Director Nageshwara Rao said.
— PTI
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Branson keen to make $ 50-m personal investment in Indian airline
New Delhi, April 1 “Virgin Atlantic (Airways) is not allowed to invest in India, but Richard Branson, I think, should be allowed to invest in India in his personal capacity,” Branson said in an interview to ‘NDTV Profit’. Under the existing Indian aviation rules, no foreign airline is allowed to pick up stake in any Indian carrier. Maintaining that he was holding discussions with “four different persons” in India who were in the aviation business, he said he planned to “invest $ 50 million in an Indian airline”. “Some of them (four different persons he was talking to) have got airlines up and running and some are trying to set up an airlines,” he said when asked to name the people he was holding discussions with. “I will be surprised if we don’t reach an agreement in the next three to six months,” Branson said, adding he was principally interested in the financial stake “but if some of them wanted my help and advice I would willingly give it... But there are very capable persons here.” He said he would also be happy to invest in the building of airport infrastructure in the country, but did not give any details. Branson, who has about 250 businesses spread over 50 countries across the world, said he also was holding parleys with Indian telecom companies and wanted to set up a 50:50 joint venture in the mobile telephone business. “We are in discussions with Indian companies... hopefully something comes up”, Branson said, adding that he hoped an agreement on the telecom business would be arrived “within 12 months time.” In Mumbai today, he took time off from aviation and travelled in a local train along with the famous ‘dabbawallahs’ of the city. Branson boarded the second-class compartment of a local train at Andheri along with over 25 dabbawallahs
(tiffin-box carriers) and interacted with them till Churchgate railway station.
— PTI
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Revocation of neem tree patent upheld
London, April 1 The EPO originally issued the patent to the US chemicals multinational W R Grace on September 14, 1994, before withdrawing it under pressure from the Green Group led by former Belgian Health Minister Magda
Alevoet, and environmental activists Vandana Shiva and International Federation of Organic Agriculture Movements (Germany) Vice-President Linda Bullard on May 10, 2000, on grounds that W.R. Grace’s application was a kind of
biopiracy. The dispute started more than 15 years ago on December 12, 1990, when W.R. Grace and the US government filed a European patent application for the neem tree with the
EPO. Commenting on EPO’s decision, Alevoet told the Belgian daily Le Soil yesterday: “It is a victory for traditional knowledge and practices.”
— PTI
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Industry bodies welcome Vat
Shimla/Chandigarh, April 1 In a statement, he said India is entering into free trade agreement and regional trade agreement with various countries thereby encouraging free trade among the countries at low custom duty. He said during the transition period all stakeholders should have positive approach to adopt the new system and suggested that a cooling off period for keeping the penalties in abeyance. This would help the government to understand the concerns of traders and they would also be able to assess factual situation. Mr Memani also appealed to states, which were reluctant to implement Vat to come forward and make India a common market. Around 130 counties and all our neighbouring countries had already adopted Vat because it was transparent system and removed the cascading impact of taxes. The Chairman, CII Northern Region, Mr Rakesh Bharti Mittal, has also welcomed the implementation of Vat by most Northern region states today. Terming it an important step towards tax rationalisation, he said a state-level Vat has been one of CII’s top requests with the Government. Mr Mittal hoped that its implementation would go a long way in making of a unified market and thereby enhance industry’s competitiveness. The CII chairman said a simple, predictable Vat regime with a moderate rate would promote efficiency, competition and the growth of a common market. Mr Mittal said the move had vindicated CII’s firm stand for sweeping reforms in the tax structure. According to Mr Mittal, with the implementation of Vat, the cascading effect of tax will hopefully come down, as also the prices of commodities.
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Vat to impact dry fruit trade in region
New Delhi, April 1 Since under the Vat system, dry fruit like almond, dates, walnut, raisin and pistachio have been separated from the agricultural and general stores items, the traders will have to pay 12.5 per cent tax as against 4 per cent under the previous system. However, in the neighbouring states like UP, Rajasthan, where Vat has not been implemented, there will be only 4 per cent tax on these items. At present, Delhi, Amritsar, and Mumbai are major trading centres in dry fruit business. Talking to The Tribune, Mr Shyam S. Bansal, General Secretary of the Federation of Dry Fruits and Spices Traders Association of India, said, “under the new system, all products identified as agricultural inputs will be taxed at 4 per cent or even at 0 per cent in some states, but dry fruits will be put under the 12.5 per cent bracket. Consequently, the trade will shift to non-Vat states like UP and Rajasthan in North India.” The domestic dry fruit market is estimated at Rs 2,000 crore, employing over 30,000 persons in Punjab, Delhi and Mumbai. Except walnut and cashew produced in India, other dry fruits like almond are imported from the USA and Gulf countries. The traders are already paying up to 30 per cent custom duty on dry fruit items. With the imposition of 12.5 per cent tax, traders said they would have to pay additional 8.5 per cent tax. “Does the government want to encourage smuggling of dry fruits via Nepal, Bangladesh, Pakistan by imposing over 40 per cent taxes on the products? For instance, almonds will cost around Rs 110 per kg without tax as against Rs 200 to Rs 220 per kg after paying all taxes,” said Mr Raju Bhatia, a leading trader in the dry fruit market. He said, “hundreds of traders will be forced to close down their shutters soon and the trade will shift to Noida from Delhi and to Rajasthan towns from Punjab and Haryana.” At present, Amritsar alone has an annual business of over Rs 500 crore in dry fruits. Dry fruits and kiryana goods (including spices and herbs) have always been categorised under one group due to common nomenclature. However, despite trade representations, the Empowered Committee of State Finance Ministers spearheading Vat, has decided to put the dry fruits under the higher tax bracket, said Mr Bhatia. The federation representing dry fruit organisations of Amritsar and Mumbai has decided to launch an agitation to protest against the higher tax on dry fruits. Said Mr Bansal, “ we are not against the VAT, but just want that the dry fruits should be covered under 4 per cent tax category. Since we are directly selling the products after paying 30 per cent import duty, we would not be entitled to any set off benefits.” He wondered what was the logic of bringing dry fruits under high tax category, as some states in the US were even distributing almonds to school kids due to their rich nutrient value. The traders pointed out that 12.5 per cent tax on dry fruits would also result in rise in prices of eatables like sweets, chocolates, ice-cream, namkeen, and even some Ayurvedic and Unani medicines made with dry fruits. “ Instead of achieving more tax collection, the government may incur revenue losses worth over Rs 700 crores including Rs 200 crore in sales tax and Rs 500 crore in customs duty if it does not review the increase in tax on dry fruits.”
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KSK to invest $ 1 b in captive power sector
New Delhi, April 1 The captive plants will be spread over Himachal Pradesh, Rajasthan, Maharashtra, West Bengal and other states, each with a capacity of up to 100 MW, said Mr S. Kishore, Director, KSK Energy, here today. Talking to newsmen, he said the company has entered into financial closure of the Chhattisgarh-based 43-MW Arasmeta Power Project, to be set up for Lafarge Cements at a cost of Rs 160 crore. The plant is likely to be operational by March 2006, he said. The company also announced the disbursement of Rs 23 crore from “Small is Beautiful” (SIB) --- India’s first power sector specific venture capital fund with a corpus of Rs 231 crore. SIB has been fully subscribed by public sector insurance companies, banks and financial institutions including Idbi, LIC, Sidbi and Rec. The company has plans to bring out a public issue to raise its equity to Rs 1000 crore besides raising up to Rs 3000 crore debts for the investment. Subsequently, KSK as the investment manager of the fund would deploy funds in multiple projects (up to 100 MW) spread over in different states. “Bulk industrial customers must look at the co-generation or captive generation of power as an option. It will help them get required power regularly at a much lower rate than offered by state electricity boards,” said Mr Kisore. “From the Chhattishgarh plant, we will offer power at Rs 2.40 per unit for the first seven years and at Rs 1.73 per unit for the next seven years in comparison to over Rs 3 per unit offered by the boards,” he observed.
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Sensex repeats yesterday’s feat
Mumbai, April 1 Market, which opened on a firm note and briefly slipped into red in early trade, later bounced back to black again with hectic buying from both foreign and domestic institutions ahead of the result announcements by The 30-stock Sensex that opened 14 points higher at 6,506.60 and slipped to a low of 6,468.52, later spurted over 150 points to hit a high of 6,618.08 points. Sensex ended at 6,605.04 points, its highest close since March 21, and gained a whopping 112.22 points or 1.73 per cent from Thursday’s close of 6,492.82. The CNX Nifty of the National Stock Exchange (NSE) also surged 32 points to 2,067.65. Upbeat sentiment prevailed in the market after smooth expiry of the March series futures contracts and the fiscal year-end concerns were over by Thursday, brokers said. The fall in inflation on second straight session to 5.11 per cent, optimism over the fourth quarter results and fresh positioning by foreign funds and domestic institutions on the first day of the new fiscal year also helped in keeping the fire burning at the bourses, they added. Most of the old and new economy sectors were up on sustained buying with metal, auto, and banking shares taking the lead. With today’s gains, the BSE barometer has shot up by 237 points in the last three sessions while it ended the fiscal year 2004-2005 with a thumping gain of 902.22 points (16.13 per cent) on
Thursday, after hitting its all-time high of 6954.86 on March 9. — UNI
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Steel, chemical units lead in central taxes
Chandigarh, April 1 The Chandigarh Zone of the Customs and Central Excise Department comprising Punjab, Himachal Pradesh, Jammu and Kashmir and Chandigarh has earned this money despite exemptions to various industries like textiles and tractors, said the Chief Commissioner of the Zone, Mr S.S. Bedi. He said they had exceeded the target of Rs 2,472 crore. Collections this year have mainly come from steel and iron industries. The collections were Rs 330 crore, up from Rs 237 crore for the year ending March, 2004. The chemical industry contributed Rs 201 crore as against Rs 158 crore for the year ending March 2004. This also includes Rs 364 crore as revenue from service tax. This was Rs 229 crore for the year ending March 2004. Mr Bedi said the collection includes Rs 265 crore as customs duties at Attari rail customs station, Attari road customs station and the Raja Sansi Airport at Amritsar. The target has been crossed despite the fact that exemption was granted from excise duty to textiles and tractors. Also, the states of J & K and Himachal Pradesh have specific tax holidays which exempt new units coming in these areas from paying central excise duty.
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Allahabad Bank exceeds farm loan target
Chandigarh, April 1 Mr O.N Singh, Chairman and Managing Director, said pro-active steps would be taken during 2005-06 to achieve higher growth in agriculture credit supply to farmers. As part of this planning process, Annual Credit Plans ( ACOs) in 17 lead districts of the bank have been finalised ahead of the closure of 2004-05 duly approved by the district Consultative Committees ( DCCs).
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Buoyant month for cars, mobikes
New Delhi, April 1 GM India registered a 35 per cent sales growth in March. For the January-March quarter, sales volume of 8,397 cars was a healthy 56 per cent growth over the same period last year. March sales included 1,905 units of Chevrolet Tavera, 1,101 Chevrolet Optra and 506 Opel Corsa. The Indian arm of General Motors Corp said Tavera clocked its highest-ever monthly sales since launch. Within 10 months from launch, Chevrolet Tavera has rapidly notched sales of 13,450 units. “We are ramping up production capacity to 60,000 units at our Halol facility to meet the growing demand for our cars. The increased capacity would help to quickly clear the backlog of popular Chevrolet vehicles,” GM Vice President (Sales-Marketing) Amit Dutta said. With the sales of 5,154 units in March, Honda Siel Cars India Ltd has bettered all its past records, including the previous highest sales of 3,784 units in January 2005. Additionally, March 2005 sales are up by a significant 60 per cent as compared with the corresponding month in 2003-04. March 2005 also saw the company registering the highest-ever sales for both its premium sedans — City as well as the Accord. The Honda City touched an astonishing high of 4,436 units during the month, significantly higher than the previous highest sales of 3,204 units achieved in January 2005. Honda Accord, the leading luxury sedan, also sold an all-time high of 401 units during the month, while Honda CR-V achieved sales of 317 units. During 2004-05, the cumulative sales for Honda Siel also registered a splendid increase of 73 per cent as it sold a total of 37,480 cars during the year, up over 21,703 cars in the previous fiscal.
Two-wheelers
Motor cycle majors Hero Honda, Bajaj Auto and TVS Motors ended the last month of the financial year 2004-05 on a rising sales note with Honda leading the race with 20.5 per cent growth in March. Hero Honda sold 2,31,593 bikes in March, up 20.5 per cent from 1,92,181 units in the same month a year earlier. The bike market leader said sales in the year ending March rose 26.6 per cent to 2,621,400 units from 2,070,157 a year ago. India’s second-biggest motor cycle maker Bajaj Auto Ltd today said its March sales rose 17.8 per cent to 1,63,530 units from 1,38,819 a year ago. Bajaj said sales of motorcycles rose 42.9 per cent to 1,34,670 units, but sales of three-wheelers fell 6.9 per cent to 18,754 units. In the past month, exports rose 79.1 per cent to 24,404 units, the two-wheeler firm added. During 2004-05, Bajaj Auto’s bike and three-wheeler sales crossed 1.82 million units, an all time high. Its motorcycle sales grew at a scorching rate of 41.6 per cent in an industry growing by 21 per cent. In the past fiscal, almost 1,25,000 motor cycles were sold in international markets, establishing significant presence in Sri Lanka, Bangladesh, Colombia, Guatemala and other Central American countries. TVS Motor Co Ltd said its March vehicle sales rose 5.6 per cent to 1,06,218 from 1,00,591 a year earlier. India’s third-largest two-wheeler maker said motorcycle sales rose 3.6 per cent to 64,273 units in March from 62,060 a year earlier. Its scooterette sales recorded 17 per cent growth to 18,135 units in the last month against 15,512 units in the year-ago month. On the export front, TVS Motor saw 101 per cent growth at 6,662 units.
— UNI
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Virgin Atlantic chief Richard Branson has said he planned to invest about $ 50 million in his personal capacity in an Indian airline for which he was in talks with “four different persons” in the country.
