Shimla, September 26
Mr Virbhadra Singh, Chief Minister, today expressed confidence that the Centre would fulfil its commitment towards Himachal Pradesh and extend the special industrial package beyond March 31, 2007, in line with other special-category states.

Addressing the captains of industries at the PHDCCI centenary partnership summit here, he said the opposition of some neighbouring states to the package was uncalled for as Himachal Pradesh was not the only state to get such incentives. In fact, all special-category states, including Jammu and Kashmir, Uttaranchal and the cluster of North-Eastern states, had been given special packages to promote industrialisation. These states had remained economically backward because of their difficult topography and needed special incentives to overcome locational disadvantages.

He maintained that there had been no flight of industry from the neighbouring states as most of the industries had come from far-off states like Gujarat. Only some induction furnace-based units from Punjab were keen to come to HP because of easy availability of power. However, these units consumed too much power and generated little employment as such the state was not in favour of having many of them.

He said the state would not grudge if the Centre granted a similar package to Haryana and Punjab as economically strong states would ultimately help build a strong India. For similar reasons these states should also not oppose any incentives to the economically backward hill state.

Referring to the efforts being made to improve the infrastructure in Baddi-Barotiwala where 80 per cent of the new units were coming up, the Chief Minister said that the Centre had sanctioned Rs 10 crore for the widening and improvement of the National Highway 21-A, which connected Pinjore with Swarghat via the Baddi-Barotiwala- Nalagarh route. He said the state electricity board had assured that adequate power would be made available to new units by December.

Mr Virbhadra Singh also released a special report on “Opportunities and challenges for economic development of Himachal Pradesh” prepared jointly by the PHDCCI and the knowledge partner, YES Bank, highlighting key growth sectors and the implementable strategies for sustained investment with focus on agri-business, tourism, information technology ,biotechnology and infrastructure.

Mr K.N.Memani, president of the PHDCCI, said further development of the state could be catalysed by undertaking thematic projects on the principle of public-private partnership. He said quality infrastructure was essential to sustain the pace of industrialisation.

The government was urged to take up the matter with the Centre for constructing one airport of global standards in the state, besides granting more funds for improving the road network. The development strategy outlined at the summit called for new marketing initiatives for promotion tourism, besides identifying new destinations, introduction of high-value corps with focus on agri-business and promoting knowledge-based industries like information technology and biotechnology.

As many as 29 leading industrialists were given Udyog Rattan Awards in recognition of their contribution to growth of industries in the hill state.

Washington, September 26
Finance Minister P. Chidambaram asked the US to invest $ 150 billion in India’s infrastructure sector over the next five years to sustain the country’s high growth path, which currently stands at above 7 per cent. During his five-day visit to the US, which ended last night, he met World Bank Chief Paul Wolfowitz, US Treasury Secretary John Snow and CEOs of major American companies and said India required large investments in the infrastructure sector to maintain high GDP and industrial development.

Mr Chidambaram said India required 10,000 MW additional power generation capacity every year for the next 10 years and it requires an investment of $ 10 billion annually.

He said a large investment was required in modernisation of Delhi, Mumbai, Chennai, Kolkata and 25 non-metro airports. Besides ports, railways and other sectors required large investments.

He also invited US investment in India’s manufacturing sector, arguing that 78 per cent of the foreign companies in the country were making profit over a period of time.

Besides, attending the annual meetings of IMF-World Bank here, he visited New York and Yale. In New York, Mr Chidambaram participated in an India Investment Forum jointly organised by Euromoney and US-India Business Council.

Mr Chidambaram stressed the importance of manufacturing sector in job creation, particularly for semi-skilled and unskilled workers. He said India had developed considerable strength in sectors such as automobile, steel, textiles and garments, jewellery, chemicals and pharmaceuticals.

He said, the rupee would be fully convertible for Indian citizens only when the fiscal deficit comes down to 3 per cent. “The rupee will be fully convertible for Indians when fiscal deficit is reduced to three per cent, which under the law has to be achieved by 2009/10,” he said yesterday while addressing the International Finance Institute here.

He said the rupee was already fully convertible for foreign institutional investors, foreign direct investors and for non-resident Indians and called the convertibility factor a ‘non-issue’.

Asking developed WTO members to “soften” their positions to end the impasse over world trade talks and to put the Doha Development Agenda “back on track” he said the progress in this regard has been disappointing, considering the hopes that were raised after the July Framework Agreement.

It is imperative, the minister said, that the global community reaches a consensus on ambitious development outcomes at Hong Kong for putting the Doha Development Agenda “back on track” and urged the World Bank “to play an intensive role of global advocacy as a spokesman for the interest of developing countries” and encourage developed countries to soften their positions.

The Indian Finance Minister P Chidambaram also warned against the impact of “escalating energy prices” on the global economy, especially that of the developing countries like India and called for steps to check this trend in the interest of balanced growth.

“It poses one of the major downside risks to sustained expansion of the world economy in the coming months. This is in spite of the world becoming much less oil-intensive in terms of oil consumption per dollar of GDP than before,” he said. — Agencies

Mumbai, September 26
The government is looking to sell 10-20 per cent of its holding in national carriers Air-India and Indian Airlines in their IPO, Civil Aviation Minister Praful Patel said today.

“However, the actual figure will depend upon the recommendation of financial consultants who will be appointed shortly,” he said at a CII-organised seminar “Open Skies 2005: Powering Aviation Growth”.

The minister had earlier said the IPOs would come in early 2006.Despite its size Air-India has an equity base of just Rs 150 crore while for Indian Airlines it is Rs 105 crore, he said. “Not only these two airlines but also all other airlines need to have healthy balance sheets before going for expansion. Therefore, we need to enhance the equity base.”

Speaking on the Indian aviation industry, he said it was still a long way from achieving maturity in terms of infrastructure, equity capital and flights.

“Though 60 airports are operational, only 30 are utilised while remaining are either unutilised or under-utilised. The objective of my ministry is to spread aviation beyond Mumbai and Delhi,” Mr Patel said.

“Air traffic in India accounts for 0.5 per cent of our population. This figure can easily grow 10 times,” he said.

Responding to queries that airport charges are very high, he said the government was shortly going to constitute an airport economic regulatory committee to look into the issue.

Meanwhile, the minister said the Centre was firm on its plans for modernising and restructuring the Delhi and Mumbai airports despite the strike call given by Airports Authority of India (AAI) employees against it. Mr Patel said the government would finalise the tender bids by the end of this year.

He said there were many challenges facing India for it to realise its potential as a world leader, most prominent among them is the need for a world-class infrastructure — Agencies

New Delhi, September 26
With the formalities for transfer of assets of Dabhol Power Project to the Special Purpose vehicle (SPV) having taken place, the stage is now set for the revival of the moth-balled plant in Maharashtra, which is expected to produce electricity next year. Last mile hurdles which included the crucial process of transfer of assets formally took place on Friday. The Bombay High Court on Thursday issued an order on a consent term jointly filed by DPC, RGPPL and the IDBI-led lenders. Experts have said the tariffs will also go up 20 per cent against the backdrop of fluctuating fuel prices and experts say it will be anywhere between Rs 2.50 to Rs 2.75 a unit.

However, the parties concerned are yet to arrive at a consensus on how to treat the project completion cost, which has delayed the signing of the crucial consent agreement.

The lenders have agreed to finance the cost of completion. The problem persists on how to award the EPC contract and who would take the hit after the increase on the completion of the project. It is still undecided whether to award the contract on a “firm or variable basis”, sources say.

The Dabhol project which is yet to be completed has an estimated total cost of over Rs 10,000 crore which includes a loan component of around Rs 7,200 to Rs 7,600 crore which would be procured from banks and financial institutions.

There is also a degree of differences on whether cost of variation after completion would be absorbed by Ratnagiri Gas. — UNI

New Delhi, September 26
India’s biggest car-maker Maruti Udyog Ltd said today it would also increase the prices of its cars following its nearest rival Hyundai, which announced a hike in the prices of its two models “Getz” and “Accent” to be effective this week.

“The quantum of increase and the models for which the prices would be incresed has not been decided, but in principle the company has decided to increase the price of our products effective from October 1,” a company spokesperson told PTI.

Citing increased freight on account of the recent hike in the diesel prices as the main reason for the price hike, the spokesperson said the company had to pass on some of it to the customers.

The recent diesel price increase had resulted in about a 4-5 per cent rise in the truck freight across the major trunk routes in the country.

Korean auto giant Hyundai Motor India said today it would increase the prices of its two models — Accent and Getz — this week.

“We will announce a price hike for Accent and Getz before October 1,” company’s President B.V.R. Subbu said here.

He said that the price hike should have happened last week but was held back due to certain reasons. Accent is likely to cost more by Rs 7,000 to Rs 8,000 while the hike in Getz prices would be marginally lower. — PTI

New Delhi, September 26
A high-powered panel set up by Prime Minister Manmohan Singh to go into the problems of manufacturing has come out with a far-reaching draft strategy, including labour reforms, to achieve 12 per cent growth in the sector to sustain high 9 per cent GDP growth.

The National Manufacturing Competitiveness Council, which unveiled its draft report, has identified 10-12 constraints, including sectoral and prioritised infrastructure, particularly power, labour issues, reversing inverted duty structure and dismantling inspector raj as areas for immediate attention.

Council Chairman V. Krishnamurthy said 12 per cent growth in manufacturing was essential to deal with the employment problem with 10 million persons likely to join the workforce annually. A growth rate of 12 per cent would result in 1.6-2.9 million direct jobs annually.

Manufacturing accounted for only 17 per cent of the GDP unlike in China (35 per cent), Indonesia (25 per cent), Malaysia (31 per cent) and Thailand (34 per cent).

Regarding labour reforms, Mr Krishnamurthy said no one was saying the amendments to the Industrial Disputes Act, which is being opposed by Left parties, needed to be carried out first. There were several other issues like the Contract Labour Act which could be attended to immediately.

Already downsizing and restructuring of the workforce were happening in the domestic industry without amendments to the Industrial Disputes Act, he said adding there was need to attend to welfare aspects of workers to bring about a change of heart among trade unions to labour reforms.

The panel has also proposed to come out with intensive and separate studies of sectors like textiles, chemicals, pharmaceuticals, electrical and electronics, food processing and leather and handicrafts which had immediate potential to garner a major share of the global market. — PTI

New Delhi, September 26
US-based network specialist Ciena Corp today set up its first development centre in India at Gurgaon near here and said it will employ 300 engineers within the next three years. The 95,000-sq-ft centre, Ciena’s first outside North America, will supplement and work collaboratively with the company’s five establishments in the world equipped with advanced design, development and testing laboratories. Mr Neeraj Gulati would be the Vice-President and Managing Director of Ciena India while Ms Dimple Amin would be the Vice-President of Engineering.

“The facility is expected to employ as many as 300 product development engineers within the next three years. — UNI