Shipping minister for sale of SCI stake at right time, price

NEW DELHI, Nov 15: Privatisation of Shipping Corporation of India may spill over to the next financial year with Shipping Minister V P Goyal today saying that Government should sell its stake at the right time and the right price.

Stating that SCI equity price had come down from the peak of Rs 111 a share to Rs 58 now, Goyal said equity should be sold at the best time and price.

"There is no point of review on SCI. The only thing is that the climate has undergone a change, the perceptible image has undergone little negative change," he said.

He, however, parried a question on whether SCI disinvestment would be concluded in the current financial year or spill over to the next year saying it was for the cabinet to decide.

Asked how long the process of disinvestment could take, Goyal said "you cannot fix a time frame. You have to get the best value and overcome perception problems. I cannot say in three months or four months, even DoD cannot tell you in which month it would be sold off".

"If you hurry to sell then we may not get the right price", he said but pointed out it was not for him, but for DoD to determine when was the right time and price.

Government, which holds around 80 per cent stake in SCI, is in the process of disinvesting 51 per cent stake to a strategic partner along with managment control while three per cent would be offered to employees.

Three companies are in the fray for Government equity including Great Eastern Shipping, Essar and Sterlite. (PTI)

Infosys software development centre to come up in Chandigarh

CHANDIGARH, Nov 15: The Chandigarh administration today signed a Memorandum of Understanding with the Infosys Technologies Ltd for a Rs 100 crore software development centre to be set up by the IT major at the technology park here.

Infosys, which will be the anchor company at the park, was alloted 20 acres of land for the centre which would come up in the next 5 years and employ upto 2,400 professionals.

In the first phase, Infosys would invest Rs 30 crore and employ 600 professionals. This would be the first large software development centre of Infosys in North India.

The agreement was signed here by Chandigarh IT secretary Karan Avtar Singh and Infosys Associate vice president - commercial and facilities H R Binod in the presence of Punjab Governor and Chandigarh administrator Lt Gen J F R Jacob.

Gen Jacob said the Union Territory was fast emerging as the technology hub of North India. The park would provide state of the art infrastructure to it and IT-enabled services companies to set up their facilities.

He said that the Software Technology Parks of India (STPI) was helping the Chandigarh administration in promoting software exports which were expected to touch Rs 100 crore this year. STPI would also set up high speed data connectivity facilities at the technology park, he added. (UNI)

VRS, restructuring,NPA recovery improved banking performance

MUMBAI, Nov 15: Reserve Bank of India (RBI) has said the significant improvement in the performance of the commercial banks in the last three years was mainly due to the sustained efforts to recover the Non-Performing Assets (NPAs), reduction staff expenses through voluntary retirement scheme (VRS) and close monitoring of restructuring plans of the banks.

In its report on ‘Trend and progress of banking in India for the year 2001-02’,the apex bank said, Indian banking system continued to respond pro-actively to the challenges in its operating environment and performed considerably better in terms of both operating and net profits.

The improvement in net profits, notwithstanding increased provisions and contingencies, was largely due to increased profit from treasury management operations in the soft interest rate scenario and the containment in operating expenses.

While, income of the scheduled commercial banks (SCBs) witnessed an increase of 14.4 per cent, driven largely by ‘other income’, the expenditure was by and large contained on account of the lower operating expenses, resulting from the decline in wage costs, it said. Buoyed by favourable policy announcements, the housing loans from the banking sector showed an accelerated growth of 38.40 per cent in 2001-02 and the share of housing credit rose three-fold from 3.8 per cent in 2000-01 to 11.6 per cent in 2001-02, the report said.

The growth in the banking sector was recorded in the face of a slowdown in industrial activity and the banks aggressively increased the share of credit towards other non-priority sector personal loans which doubled up from 4.9 per cent to 10 per cent of the total credit portfolio.

However, the report has expressed concern over the globalisation of the financial markets which opened up new vistas for the banks to augment revenues through competitive products and this had impacted significantly on the domestic banking sector.

The traditional face of banks as mere financial intermediaries has since altered and the risk management has emerged as their defining attribute.

Efforts are being initiated in India to focus on building safety norms, anticipating problems and effecting changes to tackle disturbances, if any, in a robust manner.

These can be classified under three heads such as strengthening prudential norms, effecting structural changes in the system and redefining the regulatory of the RBI. Emphasising on strong remedial actions to curb the growth in NPAs, the report observed, although the net NPAs of the commercial banks in India witnessed a decline in recent years, they were still high as compared to that of developed country standards of about two per cent.

The commutative provisions against loan losses of the public sector banks in India amounted to 42.5 per cent of their gross npas for the year ended March 31, 2002. This was low compared to the international standards where provisions against impaired assets are often as high as 140 per cent, the report added.

According to the bank, this called for Indian banks to undertake dynamic provisioning so as to build up a protective cushion in good times that could be drawn down in exigencies.

Another area which could impact the balance sheet of the banks was the uncertain interest rate scenario, rbi said and observed that the impact on the bottomline of banks would depend on whether or not the future interest rate movement was in tandem with their respective expectations.

In this context, the RBI prescribed for creating an ‘investment fluctuation reserve’ so that it could provide a cushion in a benign interest rate scenario so as to permit a ‘soft lending’ once the interest rate environment turns adverse. (UNI)

Sena accuses Govt of favouring foreigners in divestment

NEW DELHI, Nov 15: Seeking disinvestment of the National Aluminium Company Ltd only through the stock market route, a Shiv Sena MP has written to Prime Minister Atal Bihari Vajpayee alleging that the Government’s privatisation process is discriminatory to the domestic companies and lenient to the foreign bidders. "As regards Indian bidders, in the department (of disinvestment)’s views, a company means one that is controlled by a business family or an Indian company controlled by their foreign principals. However, for the foreign bidders, any body corporate that meets the norms of the department can express its interest. This is discriminatory, to say the least," Mr Ekanath K Thakur said in his letter to the Prime Minister.

Mr Thakur argued that the Indian business houses did not have adequate financial muscle to bid for the large PSUs.

In the case of NALCO, the Indian bidders- Hindalco and Sterlite -are smaller fish trying to grab a large one.

"This would eventually result in most of the profit-making large PSUs being handed over to the foreign bidders. It is a moot question whether these PSUs were set up in the first instance, only to be eventually sold off to the foreigners," he said.

The member of Parliament said that instead of the strategic sale method, the capital markets route should be adopted for disinvestment of a PSU like NALCO. "This means that the Government should sell all its holdings in several tranches to the public, extended over time, so that the large PSUs shall have the maximum number of shareholders who, in turn, shall elect their board of directors," he said.

This in essence would be economic democratisation, as was obtaining in many large private sector corporations in affluent nations, Mr Thakur said.

However, Mr Thakur agreed that the "economic democratisation by the capital markets method" would bring in less realisation than the one adopted by the department of disinvestment. But the "national interests are paramount over the mere figures of realisation," he said.

He suggested that an attempt be made to dovetail the book-building method, which results in incorporation of some of the elements of auction, which can ensure a better price. The Shiv Sena member contested many of the assumptions and the methodologies of the department of disinvestment. While the department anticipated in several cases that the market price of the shares would go up after the entry of the strategic investor, the facts proved otherwise, he said.

He cited the example of Indian Petrochemicals Corporation Ltd. At the time of disinvestment the IPCL share had gone up to Rs 158. In the strategic sale, Reliance was the highest bidder at Rs 231 and it bagged the company. Now the scrip is languishing at Rs 70 while the book value is Rs 122. "This means that the assumptions of the strategic sales method have gone awry and the disinvestment exercise in IPCL have failed to achieve the desired objectives," he said.

However, he agreed that only the Government made a booty by way of the management control premium.

The argument of disinvestment department that time was running out to sell NALCO was an "example of very bad salesmanship," Mr Thakur said. The fact that the international aluminium giants have queued up at the doors of Mr Shourie to bid for NALCO was proof enough that there was no substance in the bleak prophecies about the future of the company.

Out of the five aluminium producing companies, the market perception of NALCO is the best as reflected by its highest market capitalisation of Rs 6,988 crore. Its price to earning ratio is 17.3 while that of Hindalco is only 6.9. This is despite the fact that profitability of NALCO is lower than Hindalco.

While Mr Thakur did not support the views held by Mr Shourie, he also opposed the argument of Coal and Mines Minister Uma Bharti who has aired her opposition to the strategic sale of the company.

Ms Bharti has argued that the disinvestment should take place only after NALCO’s expansion programme is completed so that the Government gets a better price. "This argument does not hold much water because in a large company like NALCO some such programme or the other is always on the anvil," he said. (UNI)

World Bank team lauds fiscal reforms

CHANDIGARH, Nov 15: Punjab Chief Minister Capt Amarinder Singh today assured the visiting members of the World Bank analytical team that there would be no let-up in the fiscal reforms undertaken by State the Government and these would be implemented in letter and spirit.

Taking part in the deliberations with the members of the team comprising Mr Vikram K Chand, senior public sector management specialist, Mr Stephen Howes, lead economist (India) and Prof Indira Rejaraman, economist (specialist in fiscal issues), Capt Singh informed them that his Government was given a clear mandate on the three counts —good governance, corruption-free administration and fiscal reforms.

He expressed the desire to continue with his three-pronged agenda to put back the State’s economy on fast track of growth. He pointed out that Punjab’s financial position was in a mess because his Government inherited empty coffers from the previous regime due to gross financial mismanagement and maladministration but at the same time, he reiterated his firm resolve to restore financial discipline in the state by initiating some hard decisions.

Some of them had already been implemented such as withdrawal of free power and water to the farm sector and certain other freebies, he added.

Capt Singh impressed upon the members of the team that the State Government had paved the way for the World Bank to make Punjab eligible for the financial help. However, there was a long way to go for bringing in reforms to improve the quality of service deliveries in the areas of health and education and that to through decentralisation of Panchayati Raj Institutions (PRIs).

Capt Singh said that these fiscal reforms had yielded positive results by way of attracting huge investments from NRIs in the State. He mentioned that Quark, a multi-national company, had signed an MoU with the Punjab Government to invest Rs 500 crore in the it sector, thereby developing a IT park at Mohali. Similarly, Mr Bill Gates, a tycoon of IT industry, had also evinced keen interests to choose Punjab as an it destination by making huge investments in the sector during his recent visit to New Delhi.

Capt Singh made it clear to the World Bank team that the Punjab Government would soon announce its agricultural policy as well as rural development policy to mitigate the difficulties faced by small and marginal farmers, landless labourers on account of declining returns in the farm sector.

The Chief Minister expressed his deep concern for bringing in reforms in the power sector and particularly desired that debt restructuring of Punjab State Electricity Board (PSEB) was top priority along with improvements in quality of power.

He also stressed that anti-power theft bill was being introduced in the next session of Punjab Vidhan Sabha.

Later, the members had detailed discussions with the administrative secretaries at a high-level meeting under the chairmanship of Punjab Chief Secretary Y S Ratra to study the prospectus and possibilities in Punjab to restore its earlier engagements in various development sectors.

The members of the World Bank appreciated the transparency shown by the State while publishing a white paper on the State finances, incorporating medium term fiscal program, and introduction of the fiscal responsibility and budget management bill.

They also complimented the efforts made by the State Government in setting up a disinvestment directorate to implement public sector reforms. The recommendations of the punjab public expenditure commission’s were also being implemented. By and large, these reforms had convinced the members of the mission that Punjab was a serious contender for implementation of reforms and hence the World Bank could engage more deeply in the resumption of all those projects which were either not processed further or dropped due to the introduction of free water and electricity to farm sector.

This implied the integrated rural water supply and environmental sanitation project costing Rs 620 crore could now be reactivated. (UNI)

Citibank announces launch of world money card

NEW DELHI, Nov 15: Citibank India today announced the launch of the Citibank world money card, a point-of-sale enabled prepaid dollar card that enables customers travelling overseas on business or holiday, to carry and use their money in a safe and convenient way.

The global launch of Citibank world money card is being kicked off in India.

Citibank world money is a multi-use prepaid access and point-sale enabled card, loadable only in dollars. Apart from withdrawal of cash from 800,000 visa ATMs. Citibank world money enables the customer to purchase goods and services directly by swiping the card at point-of-sale machines, thus offering all the convenience of plastic money, a bank release said.

The Citibank world money card is protected by a 4-digit secure PIN (Personal Identification Number) which prevents anyone else from using the card, even if it is lost or stolen. Citibank world money card can be purchased in any amount ranging between US 500 to US 10,000, subject to individual entitilement as per the prevailing RBI rules and FEMA.

Citibank will distribute the card through reputed RBI authorised money changers and Citibank branches. One the initial purchase-value is exhausted, the card can be reloade at the money changer or at Citibank branches. Reloads will require the physical presence of the customer at the money changer or the Citibank branch with the exception of corporate travellers who may maintain an account with the money changer or with Citibank. (UNI)

India hikes ex-granary prices for wheat,rice export

NEW DELHI, Nov 15: India today hiked ex-FCI export prices of foodgrains by Rs 250-600 per tonne.

Official sources said except for the price of new crop of rice harvested last month, which will be effective from tomorrow, the rest of the rates would be applicable from January next year.

This will make Indian wheat and rice costlier by 5-12 dollars a tonne in the international market, they said.

Price of last year’s lusture loss wheat affected by rains has been left unchanged at Rs 3960 per tonne.

The price of old crop of raw rice has been increased by Rs 350 per tonne to 6260 per tonne. Parboiled rice prices have also been hiked by Rs 350 per tonne to Rs 6615 per tonne.

However, the new crop will be sold Rs 600 per tonne higher than the earlier rates and will cost Rs 6510 and Rs 6865 per tonne for raw and par-boiled rice respectively.

Wheat price is hiked by Rs 250 per tonne to Rs 4810 from Rs 4560 per tonne for old crop and by Rs 350 per tonne to Rs 2950 per tonne for new crop harvested in April this year.

The sources said the Food Ministry has accepted the recommendations of the High Level Committee (HLC) on foodgrains on quantum of increase in export prices of wheat.

They said in case of rice the hike is larger than the HLC’s recommendation in line with the firmer trends in international prices and more demand for Indian rice abroad.

Government sells wheat and rice to exporters at predetermined ex-granary rates fixed on a three monthly basis and announced at least 45 days in advance.

India exports around three lakh tonnes of rice and four lakh tonnes wheat every month, they added. (PTI)

Strike affects trading at CSE, turnover
slips to Rs 1.94 crore

KOLKATA, Nov 15: Equities firmed up marginally in restricted deals at the Calcutta Stock Exchange which today recorded the lowest ever turnover in the past few decades due to a strike by members in protest against an alleged discriminatory decision by SEBI.

In the half an hour or so of trading only counters like Satyam, TELCO, RIL and Zee witnessed some activity, though a number of finance company shares recorded huge transactions on ‘Jama Kharchi’ deals.

Marketmen said ‘Jama Kharchi’ transactions were the mainstay of the day during which the turnover dipped to Rs 1.94 crore from Rs 22.04 crore yesterday, in which the share of leading counters was less than ten per cent.

As the decision to strike for seven days was taken after adjournment of the AGM last evening, some members were not aware about it and traded in the initial hours.

During the extremely brief spell, ACC spurted to Rs 142.50 after opening at a low of Rs 136.55, while Satyam advanced by Rs 8.50 to Rs 262. TELCO remained unchanged at Rs 152 whereas Zee advanced to Rs 94.90 from Rs 92.50.

Counters like 21st century, Shree Nidhi Trading, Rohan Finance, P K Leasing, Nageswar Investments, Mantra Online, Limtex Investments, Global Capital Market and Star Light Credit (India) recorded brisk transactions.

The CSE-40 index moved up to close at 1611.42 from yesterday’s 1604.02. (PTI)

Govt aims at 50 pc self sufficiency in hydrocarbons

NEW DELHI, Nov 15: Minister for Petroleum and Natural Gas Ram Naik today said that the Government is targeting to achieve 50 per cent self sufficiency in the hydrocarbon sector during the coming five years.

Referring to the recent significant discoveries of gas and acquisition of equity oil abroad, the minister expressed confidence of meeting the target.

Inaugurating a seminar organised by the National Petroleum Management Programme (NPMP), the minister said that the Government’s multi prong strategy had started bearing fruits.

The exploration and production efforts for more oil and gas has been put on acceleration by awarding 47 blocks in the first two rounds of New Exploration Licensing Policy (NELP).

The award of 23 more blocks would be finalised shortly under NELP- III making a total of 70 blocks in 3 years compared to 22 in the previous 10 years. The spurt in exploration activities has led to a major discovery of gas in the last week of October in the Krishna-Godavari basin.

For the first time ONGC Videsh Limited ventured abroad and obtained stakes in major oil fields in Sakhalin and Sudan. The 20 percent stake in Sakhalin oil fields in Russia acquired at a cost of Rs 8,500 crore will give US 4 to 8 million tonnes of crude oil from 2005 while 25 percent stake in Sudan acquired at a cost of Rs 3,600 crore will give 3 million tonnes of crude oil immediately.

Elaborating significant initiatives taken to achieve excellence in performance, Mr Naik emphasised that dismantling of administered prices mechanism and deregulation of oil sector has thrown up new challenges and opportunities.

After achieving self sufficiency in refining which at present is at 116.5 million metric tonnes per annum, there is a focus now on quality upgradation to match the best in the world. Oil industry has targeted to introduce Euro-III quality fuels in 4 metros and certain other selected cities and Euro II in the rest of the country by 2005 and Euro-III in the entire country by 2010. (UNI)

Do not recover loans from farmers: RBI to
commercial banks

MUMBAI, Nov 15: Reserve Bank of India (RBI) today directed the commercial banks not to go in for recovery of loans from the farmers in drought affected districts during the current financial year in view of kharif crop being affected by the failure of monsoon.

In a circular issued here, RBI suggested that the principal amount of crop loan should be converted into term loan and be recovered over a period of minimum five years in case of small and marginal farmers and four years for other farmers as against three years stipulated in the existing guidelines.

Interest due in the current financial year on crop loan should also be deferred and no interest should be charged on the deferred interest, the RBI circular clarified.

This relief measure would be applicable to the farmers affected by drought in the districts as notified by the respective State Governments.

The RBI also extended by three months the operation of special one-time settlement of loans due from small and marginal farmers in view of the drought and flood like situation in different parts of the country.

All these decisions were taken in consultation with the Union Government, the RBI circular added. (UNI)

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