Daily Excelsior...Business

Poor demand affected cotton trade

MUMBAI, Dec 28: The resumption of future trading after a gap of about 32 years on December five, was the only silver lining in an otherwise subdued cotton trade during . ....more

International garment fair
to start from Feb 3

NEW DELHI, Dec 28: The 22nd India international garment fair will be held here from February 3 to 5 next year. ...more

Lanka has no reservations on free trade pact: Kumaratunga

NEW DELHI, Dec 28: Sri Lankan President Chandrika Kumaratunga today said Colombo has no reservations on signing a free trade pact .... more

1998 - A year of disappointment for automobile industry

NEW DELHI, Dec 28: The year 1998 would go down in history as the period of great expectations for the automobile industry and even greater disappointments. ...more

AP Govt to set up
nuke power plant at
Srikakulam

MACHILIPATNAM, Dec 28: The Andhra Pradesh Government is planning to set up a 2000-mw nuclear power plant at Srikakulam, State Electricity Minister K Ramachandraraju has said....more

Priority to dev of Chalakayam-Pampa road

PATHANAMTHITTA, Dec 28: The Travancore Devaswam Board (TDB) will accord priority to the development of the four km-long Chalakayam-Pampa road owned by it and matters relating to sanitation at Pampa and Sannidhanam ....more

ICAR to fund 40
tech-info centres

NEW DELHI, Dec 28: The Indian Council of Agricultural Research (ICAR) would fund setting up of 40 Agricultural Technology Information Centres (ATICs) in its select farm Research Institutes and State Agricultural Universities....more

ASSOCHAM calls for
immediate creation
of special court

NEW DELHI, Dec 28: The Associated Chambers of Commerce and Industry of India (ASSOCHAM) has called for immediate creation of a special....more

Patent application
filed for terminator gene

NEW DELHI, Dec 28: ‘Gene Campaign’ convenor Suman Sahai today claimed that the United States Government and Delta .more

Decliine in advertising
agencies billing continues

NEW DELHI, Dec 28: Registering a third-year consecutive decline in the growth rates, the advertising agencies’ capitalised billings..more

Poor demand affected cotton trade

MUMBAI, Dec 28: The resumption of future trading after a gap of about 32 years on December five, was the only silver lining in an otherwise subdued cotton trade during the year 1998.

According to leading cotton producers and traders here, the trade was badly affected by poor demand of cotton from textiles industry and falling prices of cotton abroad, resulting in heavy import of the commodity at the cost of domestic producers. The future trading was also subdued with poor business volume.

In fact, the situation took a turn for the worse from February onwards when the export cotton yarn fell sharply especially due to the currency turmoil in the East Asian countries. This followed increase in cotton prices in the wake of the scaling down of production by farmers due to unseasonal heavy rains in several states while the prices in overseas markets remained steady.

Later, the fall of rupee’s exchange value, rising production costs, heavy duty imposts and weakening demand for cotton yarn and textiles eroded margins of the several Indian mills which resulted subdued demands for cotton.

According to the estimates of Cotton Advisory Board (CAB) the mill consumption of cotton was at 143.37 lakh bales, over seven lakh bales lower than that in the previous year.

Unlike the previous year when several favourable factors led to the uptrend in mill consumption, traders said the woes of the textiles industry have spilled over to cotton trade during the year particularly when the crop prospects were better because of larger area being brought under cultivation and favourable weather conditions. The crop is expected to be about 17 million bales as against 15.5 million bales in the previous year.

Sources said potential of cotton exports was not fully realised as per the Government’s estimates and this was mainly due to lower international prices than the prevailing domestic prices. Exports during the year were about three million bales. With lower domestic consumption and exports, the carryover stock of cotton remained more or less same as previous year’s level at three million bales.

Among major grades, prices of cotton F-414 , Lra, H-4, Shankar-6, Mcu-5, Dch-32, Bengal Deshi, Wagad, Guj-V-797 and Jaydhar edged up by Rs 135, Rs 250, Rs 550, Rs 175, Rs 25, Rs 100, Rs 300, Rs 200, Rs 45 and Rs 90 respectively during the year. However, prices of cotton Nhh-44, which was allowed for future trading, dropped considerably by Rs 400 per quintal to Rs 4885.

Prices which reached their peak levels in June-July, have started showing their weaknesses towards the year-end as the textile industry and domestic consumers of cotton are not in a good shape. The Government is trying to bail them out by evolving a new textile policy by the end of March, 1999.

While the domestic consumption level is placed around the same level of the previous year, exports may go up to five lakh bales in the coming season because of relative stability of Indian rupee and recovery of East Asian nations.

Outlining the prospects of cotton trade, Mr Suresh Kotak, president of the East India Cotton Association, told that the

future of cotton trade would largely depend on the revival of the industry and also technology innovation in cotton production and trading.

The quality of cotton in India has been deteriorating over the years due to improper and inadequate availability of certified seeds. The advantages of adopting integrated crop management methods, use of higher quality seeds and adoption of proper ginning practices must continuously be impressed on cotton cultivalors and processors.

The association which was enthrusted with the responsibility of conducting futures trading in cotton on an all India basis, has developed its information technology network considerably and now the Mumbai cotton future rates for second and third months are available at New York cotton exchange on daily basis.

The Association will soon introduce six-month future trading in cotton.

Mr Kotak urged the Government to have a pragmatic policy for the cotton trade which continued to be guided by the Essential Commodities Act. Since there are different agencies and bodies involved in cotton trade, he called for setting up a national cotton board of India for strengthening the entire industry. (UNI)

Lanka has no reservations on free trade pact: Kumaratunga

NEW DELHI, Dec 28: Sri Lankan President Chandrika Kumaratunga today said Colombo has no reservations on signing a free trade pact with India.

This was stated by Kumaratunga at the forecourt of Rashtrapati Bhavan after she was accorded a ceremonial welcome.

Asked if Sri Lanka had reservations about the treaty, Kumaratunga just said no reservations. She indicated that she would reply queries from newspersons after her talks with Prime Minister Atal Behari Vajpayee.

President K R Narayanan, Prime Minister Vajpayee, External Affairs Minister Jaswant Singh, Welfare Minister Maneka Gandhi, Army Chief Gen V P Malik and senior civil and military officials attended the ceremonial welcome on a foggy morning.

Kumaratunga, who arrived here yesterday on a three-day visit to India, inspected a guard of honour by the three services at the forecourt as medium-range artillery guns boomed in salute.

The proposed fast track bilateral trade pact is expected to open up two-way trade in diverse fields in a big way, officials from both sides said.

They said both Vajpayee and the Sri Lankan President were keen to enter into a new trade pact. While Indian exports to Sri Lanka were to the tune of 560 million US dollars in 1997, imports from the island nation were only a little over 42 million dollars.

Kumaratunga, who is leading a high-power delegation including Foreign Minister Laxman Kadirgamar, Culture Minister Lakshman Jayakody and Deputy Health Minister Pavithra Wassiarchchi, will hold wide-ranging discussions with Narayanan and Vajpayee on international, regional and bilateral issues. She will also have an interaction with leaders of Indian business and industry.

The two sides will also explore the possibility of giving a substantial boost to tourism. New Delhi has shown interest in encouraging tourists from Buddhist dominated countries like Sri Lanka, Cambodia and Japan.

During her stay in the capital, Kumaratunga, also the chairperson of South Asian Association for Regional Cooperation (SAARC), will meet Congress president Sonia Gandhi and former Prime Minister I K Gujral. (PTI)

1998 - A year of disappointment for automobile industry

NEW DELHI, Dec 28: The year 1998 would go down in history as the period of great expectations for the automobile industry and even greater disappointments.

The sector is, in fact, more than willing to wipe off this year from the annual calendars for more reasons than one. And what’s more, the country’s automobile industry, wrecked by poor sales in 1998, has little to cheer about in the new year.

To start with, 1998 saw the deepening of the recession which had hit the sector last year. This had led to major production cuts and slashing down of sales targets by almost every player in the segment, which included market leader Maruti Udyog Limited (MUL). Around mid-year, the industry saw imposition of increased excise which resulted in an upward jump in prices of vehicles and a further drop in sales.

The regulation, which made it mandatory to quote Permanent Account Numbers (PAN) for purchase of vehicles, was termed the final nail in the coffin for the industry. Already reeling under tremendous strain, the sector saw sales dropping by nearly 20 per cent for both new and used cars with the imposition of PAN regulation.

However, all these events could not dampen spirits of the carmakers and the country saw several back-to-back launches of new models in the second half.

This was, in fact, the year of the dwarfs with three new small cars hitting the country’s streets in three months. While two South Korean giants — Hyundai Motors and Daewoo Motors — have already wheeled out their small cars to take on the might of Maruti, the third car and the most looked forward to — Telco’s Indica — is just round the corner.

The luxury and mid-size segments continued to be among the worst hits in the automobile industry. Despite this, two more sedans —Honda City and Mitsubishi Laner — made their way into the country and are currently among the top sellers in the segment. Among those who called off plans to enter this once-lucrative-now-bad automobile arena, the most prominent were audi AG and BMW bikes while escorts and Bajaj Auto swore by their decision to keep away from the car market. While Audi has freezed all investment plans for the indian market, BMW, after a battered inning, has decided not to revive its venture with Hero Motors for producing and selling BMW bikes in the country.

The year also saw the wildest of diversifications ever and the country got its first multi-purpose vehicle and the first sportscar. While the former project got underway, the latter, despite pompous announcements, is yet to hit the roads.

The Kerala-based Rajah Group diversified from making ‘beedis’ to manufacturing an eight-seater passenger carrier — Kazwa. The car, priced at around Rs 6.5 lakh, hit the roads in the last quarter of the year. The other major diversification of the year was locomotive makers san engineering’s foray into manufacturing sports coupe. Besides, two other probable sportscar manufacturers — Overseas Concept Auto Limited of Chandigarh and DLC Sagitta Automotive Industries of Mumbai — who had announced ambitious plans for the country with much fanfare, experienced major delays in launches. Their cars are, in act, yet to be seen on the roads and the future is not bright either.

The year that was also saw maruti receiving a severe jolt with its maiden foray into diesel-driven vehicles. Its last offering —Zen diesel ended up a damp squib as the market rejected the car mainly due to its exorbitant price tag of around Rs 4.3 lakh. This bad response has now forced the Rs 8700-crore company to shelve its plans to introduce diesel hearts for its other models — Gypsy and Esteem.

The only silver lining during the year was the patch-up between the warring partners in Maruti Udyog Limited (MUL) — Government of India and Suzuki Motor Corporation of Japan. The compromise package envisaged curtailment of the tenure of Mr R.S.S.L.N. Bhaskarudu as the Managing Director of MUL till the end of 1999 and appointment of Mr Y. Saito as the chairman of the company. Mr Jagdish Khattar would replace Mr Bhaskarudu as Managing Director on January one, 2000. The year also saw the government bringing about major changes in the country’s first comprehensive, transparent and the most-sought automobile policy. The Directorate General of Foreign Trade (DGFT) has decided to maintain the indigenisation levels at 50 per cent and 70 per cent at three and five years respectively but changed the formula applied to calculate these levels.

As per the new norms, only imports by car companies and by those vendors whose own import contents are more than 50 per cent would be considered while calculating the localisation levels. This meant that if a vendor was importing less than 50 per cent of its inputs, the equipment supplied by it would be treated as indigenous. Hitherto, if a vendor imported even ten per cent of its inputs, it used to be counted while calculating the vehicle’s import content.

This did bring some cheer for the industry with all the car makers making a beeline to the dgft for signing the policy.

Nineteen ninety-eight was envisaged to be the year when the automobile industry in india, and particularly the passenger car segment, was expected to go into overdrive as the carmakers felt the recession has bottomed out. But sadly enough, the entire industry went on to the reverse gear.

The growth rate for the entire industry—commercial vehicles, cars and two-wheelers—has stymied to a single digit in 1998, from around 12 per cent in 1997 and a peak of about 25 per cent in 1996.

If there was someone who was smiling throughout this bad patch, it was the consumer. The going has never been so good for him. For him, the year opened with Daewoo Motors India Limited, despite the several red marks on its report card, dropping prices of the Cielo by Rs 1.3 lakhs. This was followed by major rebates on the Maruti Esteem which was being offered by the dealers to push up sales. And the second hand car market had never looked better with prices being on the lowest ebb till date.

If auto analysts are to be believed, things have reached a stage from where the industry now has to move up.

"We are presently caught in a cyclical recession and normally, a recession is only for two years. We have already experienced those two years of turmoil and now it is time to look forward, or rather look up," Mr Rajat Nandi, Executive Director of the Association of Indian Automobile Manufacturers said.

So taking his word, it is time for the automobile industry to open their arms wide and welcome the new year. The industry can also go ahead and open the wine bottles and raise a toast for the good health of the industry and for the future. (UNI)

ICAR to fund 40 tech-info centres

These centres, each attached to an ICAR Institute or Agricultural University, would serve as a single window delivery system for making available to farmers latest research know-how, planting material and all other information and inputs needed for upgrading their agriculture.

The ATIC will also serve as a window for reverse flow of information from the farmers to scientists on the performance of a new variety or technique for further improvement, if needed.

The decision to set up ATICs is part of ICAR’s just launched Rs 900 crore National Agricultural Technology Project (NATP) aimed at updating research, teaching and farm extension system in its Institutes and State Agricultural Universities. The project is partly funded by a loan from the World Bank.

The initial plan is to set up 40 ATICs in two phases spread over a five-year period. Ultimately, the aim is to equip each Farm Research Institute or Agricultural University with an ATIC.

The ICAR will spend Rs 8.42 crores for the planned 40 ATICs. Besides, each ATIC would be given a Rs 5 lakh revolving fund to serve as a venture capital for the centre’s commercial activities like procuring and selling of planting material and other farm inputs. Additional financial support to such information centres would be available from other schemes of the council.

Each AITC would provide diagnostic services for testing of soil and water for the farmers. Scientists at the centre would also provide diagnostic services for plant and animal health problems of the farmers. Inputs like seeds, planting material, livestock breeds, poultry strains, fish seeds and processed food products would also be on sale at the AITCs.

The ATIC scheme would also take up district level projects in 24 pilot districts for innovations in technology dissemination through Agricultural Technology Management Agency (ATMA), another component of the NATP.

The ATIC would virtually eliminate the existing information gap between the research institute/agricultural university and farmers in the vicinity. The research results from the local institute/university is not readily available to the farmers in the present setup. The ATIC would serve farmers as a permanent set-up, put on partly commercial footing.

Besides dissemination of information and technology, the ATIC would help the research institute/farm university part generate resources. This would mean that the institute or the university would produce newly developed seeds or planting material like that of mangoes on a commercial scale for sale through the centres.

Each ATIC would also have a cafeteria, video presentation centre and book shop for the sake of visiting farmers.

The Centre would also arrange the visit of the right scientist to the farmer’s field in case the cultivator has any problem related to his farm activity. (UNI)

ASSOCHAM calls for immediate creation of special court

NEW DELHI, Dec 28: The Associated Chambers of Commerce and Industry of India (ASSOCHAM) has called for immediate creation of a special court for time-bound disposal of crores worth of dishonoured cheques by amending the Negotiable Instrument Act.

Expressing concern over the rampant increase in bouncing of cheques, ASSOCHAM President K P Singh said such offences should be put on summary trial across the bar and be completed within three months of filing the case.

In a communication addressed to Law, Justice and Company Affairs Minister Thambi Durai, the ASSOCHAM chief said bank accounts of drawers of cheques whose three cheques during two months are dishonoured should be closed and no new account should be allowed to be opened.

According to ASSOCHAM, even though the penalty for bounced cheques is upto 200 per cent of the cheques amount and/or imprisonment up to six months, still it is estimated that in Mumbai alone a huge amount of more than Rs 5,000 crore is blocked due to this reason.

This would have a cascading effect on the economy as the interest forgone on this itself amounts to at least Rs 500 crore per annum. There are approximately 27,500 new cases of cheque bouncing every year in Mumbai alone.

The Chamber President said the purpose of introducing/enforcing the Negotiable Instrument Act, is not only that banking is strengthened but made more transparent, besides reposing faith in the banking system. It has been observed that the very purpose is being defeated since legal proceedings under the act are extremely time consuming and in some cases even stretch upto eight to ten years.

Though it is a criminal offence, the other criminal cases receive prior attention thereby deferring the cases related to cheque bouncing.

Assocham has, therefore, suggested that a fixed time frame should be allotted for the cases to be sorted out. Correct money slabs should be defined and cases marked accordingly, that is a cheque for Rs 10,000 or Rs One lakh should not be treated onpar. (UNI)

Patent application filed for terminator gene

NEW DELHI, Dec 28: ‘Gene Campaign’ convenor Suman Sahai today claimed that the United States Government and Delta and Pineland Company have already filed a patent application for the controversial ‘terminator gene’ in India.

The terminator technology has been licensed to monsanto, a company which is in the Centre of a storm for conducting its genetically engineered cotton trials in India.

According to Dr Sahai if the amended patent act was in place there would be no stopping the terminator patent from being operative in India.

"As it is, with an exclusive marketing right, the terminator gene under an american patent would receive the automatic right to be marketed and used here. Even worse, in the changed patent regime, the terminator patent would ultimately be granted in India since the patent application is already sitting in the mailbox, a facility created by the Patent Amendment Ordinance of 1995".

Dr Sahai said political parties must recognise the long term devastation that could be brought upon India’s food and health security if a patent regime was brought in that would erode the country’s control over agriculture and seed production on the one hand and cost effective manufacture of drugs on the other. (UNI)

Decliine in advertising agencies billing continues

NEW DELHI, Dec 28: Registering a third-year consecutive decline in the growth rates, the advertising agencies’ capitalised billings stood at Rs 5,330.09 crore during 1997-98, according to a report published in the latest issue of fortnightly A and M.

The figure represents an increase of 17.9 per cent against 22.4 per cent the previous year. This was the third year of decline in succession after the industry’s growth scaled a peak at 49.50 per cent during 1994-95.

The industry earned the gross revenue of Rs 799.15 crore during 1997-98.

The figure was arrived at by adding up the financial figures authenticated by chartered accountants and reported to A and M by adding 131 agencies operating in the country. The figure was calculated for April 1997 to March 1998 except for O and M, whose calendar year 1997 was taken into account.

From the capitalised billings point of view, Hindustan Thompson Associated continued to maintain its top position, growing by 17.5 per cent to touch the figure of Rs 914.9 crore. The agency earned a gross income of Rs 137.2 crore.

Lintas India stood second with capitalised billings of Rs 625.6 crore, representing an increase of 28.3 per cent over the previous year’s figure. Mudra ranked third with captialised billins of Rs 424.10 crore. This was followed by O and M whose capitalised billings stood at Rs 389.10 crore, according to an A and M release here. (UNI)