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THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
B U S I N E S S

RBI annual report cautions against rising crude prices
Mumbai, August 29
The RBI today warned of a possible short-term ‘’adverse’’ impact on India’s economic growth prospects if international oil prices register a further hike.

Hurricane Katrina makes oil price touch $ 70
A woman fills recycled soft drink bottles with petrol for sale at a roadside shop on the outskirts of Phnom Penh Singapore, August 29
Oil prices hit new record highs after crossing $ 70 a barrel in Asian trading today as Hurricane Katrina threatened the Gulf of Mexico region, dealers said.

A woman fills recycled soft drink bottles with petrol for sale at a roadside shop on the outskirts of Phnom Penh. As the oil price touched $ 70 a barrel, the OPEC President said on Monday that he would propose an output raise by 5 lakh barrels per day. — AFP photo

ADB to help FinMin tone up tax regime
New Delhi, August 29
The Asian Development Bank is likely to provide technical assistance for toning up tax administration in the country from September.

Rupee tumbles by 30 paise
Mumbai, August 29
The rupee had a volatile day as the Indian currency dipped by 30 paise against the dollar closing at 43.8900/43.9000 compared to last close at 43.6900/7000, said the dealers in the market.

Punjab okays projects worth over
Rs 7,500 cr

Chandigarh, August 29
A high-powered committee of the Punjab Government today cleared projects to bring in more than Rs 7,500 crore of investment. Major investments will be in information technology, steel, two textile units and a paddy processing-cum-power generation unit.

Lalru-based firm ties up with foreign cos
Chandigarh, August 29
JCBL, a Lalru-based bus and coach body builder, has ventured into super-luxury coach manufacturing segment. The company has entered into a technical tie-up with King Long United Company Pvt Ltd of China for manufacturing integral coaches at their plant here.





Bollywood star Hrithik Roshan poses for photographers after his appointment as a brand ambassador for John Players ITC Men’s Wear
Bollywood star Hrithik Roshan poses for photographers after his appointment as a brand ambassador for John Players ITC Men’s Wear in Mumbai on Monday. — PTI

EARLIER STORIES

 
Andhra Pradesh Chief Minister Y.S. Rajasekhara Reddy congratulates Senior Vice-President, Oracle John Wookey after inaugurating the Oracle campus in Hyderabad on Monday
Andhra Pradesh Chief Minister Y.S. Rajasekhara Reddy congratulates Senior Vice-President (Application Division), Oracle John Wookey after inaugurating the Oracle campus in Hyderabad on Monday. — PTI

Indonesian firm to get land in West Bengal
Kolkata, August 29
West Bengal Chief Minister Buddhadeb Bhattacharjee, who is also an important CPM politburo member, made it clear today that Indonesia’s Salem Group would be allotted agricultural land in South
24-Parganas for setting up a new industrial town as a part of the government’s plan for the state’s overall development.

IP building
New Delhi, August 29
Terming intellectual property as the foundation of a knowledge-based economy, Commerce and Industry Minister Kamal Nath today asserted that it was time to transit from an IP user to IP producer.

Corporate news
Clariant to merge Indian subsidiaries

Mumbai, August 29
Speciality chemicals company Clariant has decided to merge all its five group companies in India, subject to regulatory approvals.

  • Valuemart stake in Tejas
  • Intelsat to buy PanAmSat
  • Cadila to invest

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RBI annual report cautions against rising crude prices

Mumbai, August 29
The RBI today warned of a possible short-term "adverse" impact on India’s economic growth prospects if international oil prices register a further hike.

In its annual report for the year 2004-05, the RBI said the manoeuverability in oil prices was getting limited and corporates have a higher probability of gaining their pricing power with a better industrial outlook.

The pricing pressure, if it were to occur from the supply side, could get complicated by continuing overhang of excess domestic liquidity. “While the economy has the resilience to withstand supply shocks, the upside risks do exist”, the report said.

While sustained efforts over time have helped to build confidence in price stability, the RBI said inflationary expectations could turn adverse in a relatively short time if noticeable adverse movements in prices took place.

Given the volatility in the inflation rate in the past, there was need for consolidating the gains obtained in recent years from reigning in inflationary expectations.

Reiterating its earlier stance of achieving 7 per cent GDP growth in 2005-06, backed by strong recovery in manufacturing and agriculture production, the RBI said the policy initiative continued to favour stability in maintaining the growth momentum at this juncture of global uncertainty while closely watching the inflationary situation.

In this context, it said, the key medium-term issues which would entrench the conditions for high growth with price stability, deserved attention of the policy-makers.

The outlook for the Indian economy had to reckon global economic activity which was expected to decelerate to 4.3 per cent in 2005 from a three-decade peak of 5.1 per cent recorded in 2004.

There were already signs of a slackening of momentum in the first half of 2005 in some areas of the industrialised world except the USA where growth had been strong in the current year.

This slowdown in the global market, mainly in Europe, was yet to experience the generalised high inflationary pressure despite the rise in oil prices, in contrast to the experience of earlier oil shocks.

The RBI report, while highlighting certain critical issues in the power and mining sectors, said that there was need for Indian corporates to scale the economies to remain an important driver of the domestic economy and also enhance capability to meet the external challenges.

In this context, the RBI said there are a host of infrastructural bottlenecks which could impinge upon competitiveness and the supply elasticities to meet the emerging global and domestic demands.

The subdued performance of the infrastructure sector, especially that of crude petroleum and petroleum refinery products, was an issue of concern, given the sector’s strong forward and backward linkages in the economy.

The increasing demand-supply gap in the availability of power was becoming the most critical issue in the future of India’s economic development. This deteriorating situation was further aided by shortage of coal and gas to the power generation plants.

There was also need for evolving and putting in place appropriate agricultural technologies and agro-management practices to respond to food and nutritional security, poverty alleviation, diversifying market demand, export opportunities and environmental concerns.

The report expected that future agricultural growth would largely accrue from the improvements in productivity of diversified farming systems with regional specialisation and sustainable management of natural resources especially land and water.

The report said that the future sustainable growth of the economy would depend critically on policies relating to oil prices, diversification of agriculture, improvement in urban infrastructure, fiscal consolidation and continuation of the positive investment climate in the country.

Extend VAT to all goods, services

Buoyed by the success of VAT in Haryana, the RBI advocated extending the new tax regime to almost all goods and services of the economy.

“While the implications of introduction of VAT on states’ resources generation are yet to emerge, the experience of Haryana — the first state to introduce VAT in April, 2003, — has been encouraging from the point of view of revenue generation,” the RBI said in its annual report.

In this context, there may be a merit in extending the VAT principles to tax the consumption of almost all goods and services of the economy.

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Hurricane Katrina makes oil price touch $ 70

Singapore, August 29
Oil prices hit new record highs after crossing $ 70 a barrel in Asian trading today as Hurricane Katrina threatened the Gulf of Mexico region, dealers said.

New York’s main contract, light sweet crude for delivery in October, touched a high of $ 70.80 and was trading at $ 69.78 at 10:00 am (0730 IST), up $ 3.65 from its close of $ 66.13 in the United States on Friday.

“It seems to be a crazy market,” said Tetsu Emori, chief commodities strategist at Mitsui Bussan Futures in Tokyo. “People worry about gasoline and crude oil supply.”

Katrina is now looming as one of the worst hurricanes to hit the United States in years and US President George W. Bush has declared a state of emergency in the affected region, which includes key oil-producing areas.

Tens of thousands of people fled New Orleans amid fears of catastrophe as Katrina barrelled toward the low-lying southern US city with winds of 257 kilometres per hour.

Katrina was expected to rage dangerously close to offshore oil platforms, most of which have been evacuated.

Indian markets too saw major correction this morning during the first hour of trade. The markets opened weak this morning. Bears gained control of the markets as soon as they opened.

With crude oil prices hovering just above $ 70 per barrel in the USA, the stock markets kept low today as investors booked profits rather than going in for fresh investment.

Meanwhile, OPEC President Sheikh Ahmad al-Fahd al-Sabah said on Monday he would propose the cartel raise its output by 5,00,000 barrels per day when the group meets in September in an attempt to help cool oil prices at record highs.

Sheikh Ahmad, also Kuwaiti oil minister, said he would also propose a 5,00,000 bpd increase in the group’s official output ceiling at the September 19 meeting.

“We hope that the resolution to the board to increase production and the ceiling, 500,000 (bpd) and 500,000 (bpd), and to refresh the dialogue with all the main consumers, I hope this will at least help the market and the prices to be more stable,” Sheikh Ahmad told reporters. — Agencies

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ADB to help FinMin tone up tax regime

New Delhi, August 29
The Asian Development Bank is likely to provide technical assistance for toning up tax administration in the country from September.

An agreement is likely to be signed in the presence of ADB President Haruhiko Kuroda, who is coming to India on a two-day visit from August 31.

The technical assistance from the ADB would cover both the Central Board of Direct Taxes and the Central Board of Excise and Customs, official sources said today.

A steering committee, set up after the Budget presentation by Finance Minister P. Chidambaram, to look into the tax matters had suggested that the ADB could be roped in for assisting the Centre in toning up tax administration.

Though the Finance Ministry had initiated a slew of measures like help centres of small taxpayers, annual information return and tax information network, sources in the ministry said the government still had an uphill task in improving tax administration.

The tax collections could be scaled up to a great extent if the government brought in improvement in areas like assessment, recovery of arrears, inflict penalties on tax evaders and reduce the cost of collection, sources said.

In the case of direct taxes, for instance, the cost of collection was as high as 2.37 per cent for income tax and 0.21 per cent for corporate tax. The government spends close to Rs 3,800 crore for direct tax collections. — PTI

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Rupee tumbles by 30 paise

Mumbai, August 29
The rupee had a volatile day as the Indian currency dipped by 30 paise against the dollar closing at 43.8900/43.9000 compared to last close at 43.6900/7000, said the dealers in the market.

The intra-day low for the rupee was 43.9000.

Earlier in the morning, the rupee opened two to three paise weaker at 43.7100/7200 against the US dollar this morning compared to Friday’s close at 43.6900/7000.

The rupee was under great pressure as crude oil prices in international markets hovered around $ 70 mark today. In the first hour of trading, the Indian currency lost some grounds at 43.7700.7800 versus the US dollar and then weakened gradually to 43.8900/9000. — UNI

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Punjab okays projects worth over Rs 7,500 cr
Tribune News Service

Chandigarh, August 29
A high-powered committee of the Punjab Government today cleared projects to bring in more than Rs 7,500 crore of investment. Major investments will be in information technology, steel, two textile units and a paddy processing-cum-power generation unit.

These projects were cleared at a meeting chaired by Chief Minister Amarinder Singh here this afternoon. All projects with an investment of more than Rs 100 crore are to be cleared by this empowered committee on investment.

Tata Consultancy Services (TCS) would set up a software development centre at Mohali spread over 20 acres to cater to the IT requirements of TCS overseas clients as well as domestic business in north India.

Laxmi Overseas, a leading rice exporting company, wishes to set up a Rs 850-crore unit to generate power from paddy husk. Two textile units - one by the Dalmia group of Kolkata — are to come up in Bathinda while Aarti Steel will set up a textile unit in Ludhiana at an investment of Rs 160 crore. A steel unit is planned in Mandi Gobindgarh.

The committee held back real -estate projects on housing and shopping malls as a decision needs to be taken on exact development charges to be levied. These projects will again be taken up after 45 days when various departments of the Punjab Government formulate these charges. These projects are to come up in the periphery of Chandigarh. The charges shall cover external development and land conversion dues.

An official spokesman said industrial projects worth Rs 2,156 crore would generate 17,240 jobs. Multiplex projects of Rs 629 crore would generate 5,500 jobs whereas multiplex-cum-residential projects of Rs 1081 crore and residential projects of Rs. 3591 crore would create 6,200 and 24000 jobs, respectively.

The spokesman further said that the projects cleared were GHCL Ltd. (Rs 1000 crore), Malbros International Ltd. (Rs 53 crore) and Bhiwani Industries Ltd. (Rs 110 crore). The multiplex projects included Rap Media Ltd. (Rs 225 crore), Omaze Construction Ltd. (Rs.100 crore), SPS Multiplex Pvt. Ltd. (Rs 154 crore) and DLF Universal Ltd. (Rs 150 crore).

The multiplex-cum-residential projects were Ganpati Township Ltd. (Rs 140 crore) and Advance India Project Ltd. (Rs 941 crore) while residential projects included Vipul Infrastructure Developer (Rs 645 crore), IREO Funds Ltd. (Rs 450 crore), Janta Land Promoters-II (Rs 223.83 crore), Unitech (Rs 428 crore), Country Colonisers (P) Ltd. (Rs 105 crore), Renaissance Buildcon Company Ltd. (Rs 643 crore), ATS Infrastructure Ltd. (Rs 316 crore) and M/s Infinity Promoters and Developers (P) Ltd. (Rs.781 crore).

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Lalru-based firm ties up with foreign cos
Poonam Batth
Tribune News Service

Chandigarh, August 29
JCBL, a Lalru-based bus and coach body builder, has ventured into super-luxury coach manufacturing segment. The company has entered into a technical tie-up with King Long United Company Pvt Ltd of China for manufacturing integral coaches at their plant here.

They have also tied up with Tantri Trailers Ltd of Sri Lanka for manufacturing trailers, besides APM Malaysia, for LCV and HCVs.

Talking to TNS, Mr Rishi Aggarwal, Director, JCBL, said the group now offers luxury buses, integral coaches, special purpose vehicles, election campaign vans, riot control vehicles, display vans, airport buses, besides outstation radio jamming vans, mobiles offices and homes, load bodies, cargo boxes, railway electrification vans and trailers. The cost of the integral coaches being manufactured by the company is approximately Rs 52 lakh.

With a market share of more than 50 per cent in the organised sector, the company provides mobility solutions of international standards to leading vehicle manufacturers like Tata Motors, Swaraj Mazda Ltd, Ashok Leyland and Eicher.

The company, which started operations in 1991 as an ancillary to Swaraj Mazda is targeting a turnover of Rs 150 crore by March 2006. JCBL now plans an expansion of Rs 38 crore by adding two manufacturing units close to the existing location at Lalru.

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Indonesian firm to get land in West Bengal
Our Correspondent

Kolkata, August 29
West Bengal Chief Minister Buddhadeb Bhattacharjee, who is also an important CPM politburo member, made it clear today that Indonesia’s Salem Group would be allotted agricultural land in South 24-Parganas for setting up a new industrial town as a part of the government’s plan for the state’s overall development. He also assured that the affected people would be adequately compensated and properly rehabilitated.

Addressing a crowded press conference at Writers’ Buildings, the Marxist Chief Minister said would welcome FDI and other foreign investments in the state but certainly not the black money.

He said the proposals included a new industrial town, setting up of a health city, logistic hub, motor cycle factory, herbal medicine plant, rubber and tyre manufacturing units, new sea ports and a second international airport.

Mr Bhattacharjee will be meeting the Prime Minister, Dr Manmohan Singh, in the Capital on August 31.

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IP building

New Delhi, August 29
Terming intellectual property (IP) as the foundation of a knowledge-based economy, Commerce and Industry Minister Kamal Nath today asserted that it was time to transit from an IP user to IP producer.

Inaugurating the country’s first modern IP building here, Mr Nath said India had the capability to become a good producer of patents from a user. — PTI

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Corporate news
Clariant to merge Indian subsidiaries

Mumbai, August 29
Speciality chemicals company Clariant has decided to merge all its five group companies in India, subject to regulatory approvals.

The Board of Directors of Colour-Chem Ltd, Clariant (India) Ltd, BTP India Pvt Ltd and of Colour-Chem’s subsidiaries Vanavil Dyes and Chemicals Ltd and Kundalika Investments Ltd, at their respective meetings held today, decided to amalgamate all Clariant group companies, Clariant said in a press note here today.

The merger would be pursuant to the merger process of all entities into one existing entity, subject to a fair share-swap ratio and subject to approvals of RBI, stock exchanges, the respective boards and their shareholders, Clariant said.

Valuemart stake in Tejas

Valuemart Info Technologies Ltd today said has acquired 74 per cent stake in Tejas Infoscripts Pvt Ltd, a Bangalore-based BPO.

After acquisition, Tejas Infoscripts will be a subsidiary of the company, Valuemart informed the Bombay Stock Exchange.

“The acquisition will give us a headstart in the fast growing Legal BPO segment,” said Valuemart Technologies Director C.K. Vasudevan.

Intelsat to buy PanAmSat

Communications satellite operator Intelsat Ltd. has agreed to acquire PanAmSat Holding Corp. for $3.2 billion, creating the world’s largest commercial satellite fleet, the companies said on Monday.

Intelsat will pay $25 a share for PanAmSat, a roughly 25 per cent premium over the stock’s closing price on Friday and a 40 per cent premium over its initial public offering price in March.

Intelsat will also refinance or assume about $3.2 billion of debt of PanAmSat and its subsidiaries.

Combined, the companies will have a fleet of 53 satellites to support fibre networks and operational capabilities for cable TV programmers, broadcasters, businesses and governments.

The deal will vault the merged company ahead of SES Global, which currently has the world’s biggest satellite fleet.

Cadila to invest

Pharma major Cadila Healthcare has said it would invest Rs 40 crore to acquire an equity in an European biotech company.

The company Board of Directors, in a meeting on August 27 , approved in principle the investment, Cadila informed the National Stock Exchange today.

The decision is subject to a satisfactory due diligence to be carried out by the company, it added. — Agencies

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BRIEFLY


A South Korean model poses next to DaimlerChrysler’s new sports utility truck Dodge Dakota
A South Korean model poses next to DaimlerChrysler’s new sports utility truck (SUT) Dodge Dakota during its unveiling in Seoul. Equipped with a 4,700 cc V8 engine, five-speed automatic transmission and electronic 4WD system, it is priced at 44.8 million won ($ 42,773). — AFP

City Air
Dubai, August 29
A Dubai-based businessman has announced its plans to invest Rs 100 crore to start a budget airline in India with plans to extend operations on the Gulf sector. Aniyan Kutty said his City Air, which already has been registered in Kerala, would have its operational headquarters in Chennai. He is in talks with Boeing, Airbus and a number of other companies to procure aircraft on dry lease, local media reported. — UNI

Exim Bank
New Delhi, August 29
The Export and Import Bank of India aims at increasing loan disbursements by 31 per cent at Rs 15,000 crore during this fiscal to support export of Indian goods and services to other countries. “We have set the loan disbursal target at Rs 15,000 crore for 2005-06, compared to Rs 11,435 crore in 2004-05,” Exim Bank Chairman T C Venkat Subramanian said. — PTI

A-I helpline
New Delhi, August 29
Flag carrier Air-India has set up a toll-free helpline for the Northern India to deal with enquiries relating to reservations, flight arrivals and departures. Air-India passengers can dial 1600-227722 from MTNL and BSNL numbers from any north Indian city or dial 95124-2348888 from other networks for Delhi and 0124-2348888 for other cities.
— PTI

SkillProfiler
New Delhi, August 29
SkillProfiler Analytics, a provider of differentiated corporate talent management services, has launched a new skill inventory tool that would enable corporates map resident skill-sets, maintain an inventory of all skills available and objectively analyse skill growth. It would also help organisations identify the exact skill gap among employees and train them accordingly. — TNS

New trade norms
New Delhi, August 29
The Directorate-General of Foreign Trade (DGFT) has notified additional standard input/output norms for seven new export items and introduced amendments in another seven items. Out of the seven new items, three relate to the chemicals and allied products, two to food products, one to textile products and one to miscellaneous products. — UNI

Diversify, HP CM tells PSUs
Shimla, August 29
Chief Minister Virbhadra Singh has called upon the state public sector undertakings to diversify keeping in view the emerging market trends to enhance their viability. Addressing senior officers of the state Handicraft and Handloom Corporation, the Small-Scale Industries Corporation and the General Industries Corporation here today, he said in the global competitive marketing trends, public sector undertakings need to bring professionalism in their functioning and improve quality of products.
— TNS

Kohinoor to invest Rs 60 cr in UAE arm
Mumbai, August 29
Chandigarh-based production house, Kohinoor Broadcasting Company will invest Rs 60 crore in its 100 per cent subsidiary in Ajman Free Trade Zone in UAE. The Board of Directors have approved the Rs 60 crore investment in the company’s UAE subsidiary. — PTI
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