New Delhi, November 18
Dr Montek Singh Ahluwalia, Deputy Chairman of the Planning Commission, today came out in support of the demand for a nuclear power plant, a controversy about which had been raging in Punjab.

When asked at the ongoing Economic Editors Conference whether a nuclear power plant was viable as a supplementary source of energy, Dr Ahluwalia said at present 3,000 MW of power was generated by nuclear plants in the country.

This capacity can be raised to 10,000 MW based on the existing uranium stocks in the next 10 years and up to 40,000 MW in 15 years, he added. But given the present constraints on uranium imports, further capacity expansion could be problematic. The demand for a nuclear plant in Punjab was first raised by the PSEB engineers, then backed lately by the Punjab Congress chief, but is opposed by the Punjab Chief Minister, while Akali Dal chief Parkash Singh Badal first supported it and then before the last elections, crossed the fence.

The firming up of hydrocarbon and coal prices warrant a relook at other sources of energy, Dr Ahluwalia observed.

On power board restructuring, he said, the Centre was “neutral”. The states were free to either improve governance of their power boards or privatise them. “There is no easy solution,” he said. Not many states have come forward to utilise Central aid available for power reforms.

New Delhi, November 18
Pharmaceutical companies will soon have to print maximum retail price (MRP) on the medicine packs by including all taxes, including value added tax (VAT), octroi, entry tax and other local taxes as well, leading to nearly 10 per cent hike in prices. A notification in this regard is expected to be issued within a month.

“We have taken a decision to make it mandatory that MRP printed on the medicine packs would include all taxes, like VAT, octroi etc, at an average of 10 per cent including 4 per cent VAT and 6 per cent local taxes. The decision will be implemented within a month, said Union Chemicals and Fertiliser Minister Ram Vilas Paswan while speaking at the concluding session of the three-day Economic Editors’ Conference here today.

Regarding the impact of decision on drug prices, the Minister said, though companies have been allowed to charge 10 per cent average taxes in the MRP, the government would take all steps to stabilise the drug prices at the present level.

Industry observers, however, said the patients in those states, where drugs have been exempted from VAT or are covered under 4 per cent category, would have to pay higher prices for medicines. Notably, the Haryana government had also tried to implement the same decision by the previous Chautala regime, that was later challenged in the Court.

Currently, the MRPs printed on medicine packs are exclusive of local taxes. For both category, the scheduled formulations where the government fixes prices as well as for non-scheduled formulations, presently MRP includes excise duty and other cost components, but excludes sales tax and other local levies.

New Delhi, November 18
Amid upward pressure on rates and squeeze on liquidity, Finance Minister P. Chidambaram today said there would be no hike in interest rates, particularly on loans given for productive purposes this fiscal.

Expecting mergers and acquisitions (M&As) among banks to take place “sooner than later”, he asked Reserve Bank to come up with guidelines on Tier-I, Tier-II and Tier-III capitals to enable banks to mop up Rs 60,000 crore in the next five to six years.

After a marathon review meeting with 28 PSU bank chairmen, Mr Chidambaram set a goal of keeping net non-performing assets below 2 per cent of loan advances and cautioned banks to prevent fresh slippages.

On interest rates, he said: “By and large, banks will be able to maintain the current interest rate regime for productive purposes till March 2006.”

He also did not see rates going up for home loans in the near future as increase in risk weightage by the Reserve Bank would take care of the upward pressure.

Apart from the interest rate regime, Mr Chidambaram highlighted the need for consolidation in the Indian banking industry on the lines of what was happening in matured economies like the US and Sweden where top five banks account for 24 and 90 per cent of the assets, respectively.

Noting that some banks are talking with each other for M&As, Mr Chidambaram said: “The initiative should come from bigger banks. Then a consolidation of a small private or PSU banks with bigger banks will be more attractive.”

Ludhiana, November 18
An investment to the tune of Rs 20,000 crore has been made by the textile industry following the implementation of the Textile Upgradation Fund (TUF). Of this, the Centre gave a subsidy of Rs 400 crore, Union Textiles Minister Mr Shankarsinh Vaghela said here today.

The minister, who asserted that India was not in competition with China, said as many as 25 apparel parks would be set up within the next two years across the country.

Talking to mediapersons on the sidelines of the inaugural function of Texcon 2005, an international conference on textiles organised by the Confederation of Indian Industry (CII), Mr Vaghela said China's advantages of mass production were only short-lived.

"Our objective is to increase the textile and clothing exports to a level of $50 billion by 2010, of which the share of readymade garments would be $25 billion. The need of the hour is for India to go upstream in the value chain by capitalising its efficient and competitive raw material base," he said.

Speaking at the inaugural session of Texcon 2005, Mr Vaghela said the Indian textile industry was one of the largest segments of the Indian economy accounting for 14 per cent of the industrial production and was providing direct employment to around 35 million persons. The industry has also earned the distinction of being the highest foreign exchange earner for the country.

Jammu, November 18
As tourism picks up in the Kashmir valley, skies of Jammu is getting packed with new flights being introduced by different airline operators.

While four players are already in the field, Air Sahara is scheduled to introduce two daily flights from here to Delhi and Srinagar on November 24.

The Civil Aviation Department has shelved the request of two other airlines to operate flights from here.

As many as seven flights of the Indian Airlines, Jet Airways, Air Deccan and Spice Jet are already operating from here every day. Two more flights of Air Sahara would be added next week.

The Jammu-based Director of the Airports Authority of India (AAI), Mr Chandramouli, told this correspondent here today said that the airport is heading towards exhaustion of infrastructure facilities in view of more and more flights being introduced here.

He said congestion could develop in case any airline deviated from the time schedule. The airport parking bay has the capacity to handle only three aircraft at a time.

He says that there is an immediate need to develop the airport further.

Aviation experts feel with most of the wide-body aircraft operating from here, the waiting space for passengers in the airport is insufficient. The rush would further increase as Air Sahara would operate daily connecting flights for Singapore, Colombo, Mumbai, Bangalore, Kolkata, Lucknow and Chennai from next week.

New airlines that have now started operating from here have waged a fare war against the old timers offer cheap tickets. Air Deccan, which is the only one to fly between here and Chandigarh, has offered the fare as low as Rs 1,200 per ticket. This is cheaper than driving your own car all the way to Chandigarh. The fare is cheaper in case the seat is booked earlier.

With multinationals having made Chandigarh the base of their activity in the North, the flight between here and Chandigarh has become viable because of the volume. The Indian Airlines had to cancel its operations on this circuit a few years ago because of losses.

Newly introduced Spicejet is charging Rs 2,020 per passenger between here and Srinagar, whereas the Jet Airways and Indian Airlines are charging Rs 2,985 and Rs 2,880, respectively.

One can travel to Delhi in Air Deccan by paying Rs.3,800 against Rs 6,464 fare of Indian Airlines and Jet Airways. Air Sahara has offered an introductory fare of Rs 1,500 per passenger to Delhi.

Capt Anil Gaur (retd), a leading travel organiser, says with new flights being introduced, the benefit of low cost airlines is now available to the travellers.

New Delhi, November 18
Industrial chamber PHDCCI has urged the government to reduce the duty on imported crude palmolive oil (CPO) to 20 per cent as its policy of allowing duty free imports of vanaspati from neighbouring countries is pushing domestic units especially in North India to the brink of closure.

In its pre-budget memorandum submitted to the Finance Ministry, the chamber has pointed out that such a measure would lower the tax disparity between the respective manufacturers in the two countries by approximately Rs 10,900 per tonne.

It would also substantially reduce the potential of neighbouring countries from undercutting their brand to sell in India.

The chamber has pointed out that the imports of vanaspati from the neighbouring countries are increasing at a rapid pace as they are taking full advantage of the lower customs duty of 30 per cent.

“Other things being equal, the exporting countries have the dual advantage of using their own raw material, that’s CPO available at a lower price and nil duty as compared to its counterparts in India, who are not only forced to pay higher price but also a whopping duty of 81.6 per cent,” it said.

This has given a cost and competitive margin of over Rs 7,500 per tonne to the importer, PHDCCI added. The situation is getting worse for the vanaspati industry in the country due to the duty free imports of vanaspati from Sri Lanka in addition to what was already being imported from Nepal under the Free Trade Agreement (FTAs) with these two countries.

The current import of the said commodity from Sri Lanka presently stands at minimum 18,000 tonnes per month, which are likely to increase exponentially in the coming months due to operational expansion at present taking place there.

The cost and competitive advantage to a factory in Sri Lanka and Bangladesh remains enormous and stands at Rs 16,350 and Rs 11,950 per tonne, respectively.

Moreover, they are importing the same raw material (CPO) at zero duty whereas the domestic industry is paying 81.6 per cent.

“Such a skewed operational environment has crippled the domestic vanaspati sector as the imported vanaspati from Sri Lanka is priced even below the cost of production of the domestic industry and as such vitiating the domestic market in which the local brands are unable to sell,” it said.

Kolkata, November 18
Oil marketing public sector company IBP Co Limited is likely to transfer its loss-making LPG business to its parent IndianOil Corporation (IOC) without any financial consideration.

IBP sources said today since the LPG business was insignificant and loss-making, the company is unlikely to accrue any financial gain following the transfer, which is expected to take place before the proposed merger with IOC.

The transfer of the LPG business would reduce the subsidy burden on IBP, which was already reeling under the impact of under-recovery in petrol and diesel, the sources said.

Asked about the status of the merger, the sources said it was expected to be over within three months, adding that there would be no change in the swap ratio, 125 IOC shares for 100 IBP shares, decided upon several months ago.

To a query on the company's plan about the cryogenics and explosives division, sources said the two units would not be hived off since both were doing well. — PTI