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| CII favours
divestment in Maruti, AI, IA, ITDC NEW DELHI, May 2: The Confederation of Indian Industry (CII) has favoured divestment of Government....more Renault SA of France planning to launch car, jeeps in India NEW DELHI, May 2: After an aborted move a few years back, Renault SA of France is planning...more ONGC Videsh Ltd NEW
DELHI, May 2: ONGC
Videsh Limited, a hundred per cent subsidiary of Oil.....more NEW DELHI, May 2: Investors in oil exploration and refining process are confused over the swift...more |
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Inflation rate
falls to 74-week low at 4.07 pc NEW DELHI, May 2: Continuing its downward trend for the third consecutive week...more PHDCCI urges NEW DELHI, May 2 : The PHD Chamber of Commerce and Industry (PHDCCI) has urged the....more Stocks recoup most of early losses despite pol turmoil MUMBAI,
May 2: Despite
political uncertainty, the stocks recouped part of early
losses on the...more VIJAYAWADA, May 2: Global slump in prices, international agitations against the use of tobacco and ...more |
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CII favours divestment in Maruti, AI, IA, ITDC NEW DELHI, May 2: The Confederation of Indian Industry (CII) has favoured divestment of Government stake to upto 75 per cent in all Public Sector Undertakings, including Maruti Udyog Limited, Air India, Indian Airlines and ITDC. Besides, all ailing units should be made profitable and put on the block, newly elected president of the Confederation of Indian Industry (CII) Rahul Bajaj told in an interview here. On the mode of divestment, he said, an action plan is being prepared which would then be discussed with the various political parties and the next Government. "Government should just concentrate on law and order, collecting revenue, providing education and basic administration and leave the business part to the private sector. However, certain businesses in the security and strategic areas should remain with the Government." "Everything else, including BHEL, ITDC, Air-India, Indian Airlines and even Maruti should be divested of Government holding. Government has no business to be in business," he added. Mr Bajaj further stated that Government stake should be sold off to a right mix of domestic and foreign enterprises. "We can not totally rule out foreigners when we talk of privatising, but we can not allow them to have a free hand as well. There has to be some checks and balances." "The logic for going to foreigners will be for a better price...There is no logic in selling the stake to foreigners at an equal or lower price. Again, they are capable of giving a better price and taking away all the profitable businesses and leave the rest for us. To ensure that such a situation does not arise, we have to put in place proper checks and balances. All the privatisation, let it not go to foreigners," Mr Bajaj added. But foreigners need to be encouraged to come and invest in India. In addition to offering the profitable enterprises to the public sector, Mr Bajaj said, the Government should, alongside, work towards making the sick and ailing units profitable. "This would help the Government get a good price for its shares." Mr Bajaj, who is also Chairman of Bajaj Auto, further called upon the Government to set higher divestment targets of Rs 20-25,000 crore per annum. "For the past eight years, total disinvestment amounts to about 12-13,000 crore. It is time now to set higher targets, achieving which in itself would bring down the fiscal deficit." He also called for suitably empowering the disinvestment commission to oversee strategic sales. On public sector units’ autonomy, the CII president said the PSU boards must be empowered to decide all issues without having to refer repeatedly to the ministries for approval. The CII chief also urged the BJP-led Government to clear the pending bills, including Insurance Regulatory Authority Bill, Money Laundering/Foreign Exchange Management Act Bill, Companies Bill and Income Tax Bill, through ordinances. He also expressed concern at the prevailing political uncertainty which was threatening to bring decision-making to a halt. In this context, he suggested that 11 ordinances should be issued by the Government on bills which had already been introduced in the Parliament and had been vetted by expert committees. Mr Bajaj also expressed concern at the huge fiscal crisis in the states and called for market pricing of power and reduction in subsidies. (UNI) |
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Renault
SA of France planning to launch NEW DELHI, May 2: After an aborted move a few years back, Renault SA of France is planning to launch its range of cars and jeeps in India. Besides, the automobile giant is also contemplating producing truck engines in the country through a separate venture, sources close to the company told here. Though the partners for the two ventures have not been finalised as yet, Renault is likely to join hands with the Punjab-based International Tractors Limited (ITL) for its car and jeep manufacturing project in India. Renault has already picked up a 20 per cent stake in ITL. The sources further pointed out that the foray into the Indian market is being seriously contemplated, particularly in the light of its recent acquisition of a majority stake in Nissan Motor Company of Japan. The company has not set any time frame for both the ventures. Confirming the move, Mr Bernard Le Rouzic, Chief Financial Officer of Renault Agriculture, the tractor manufacturing arm of Renault Group, told that the group is planning to set up a joint venture in India for producing truck engines. "We have not commenced talks or even shortlisted any partners for the project. But the venture is being explored seriously." Regarding the car and jeep manufacturing venture, he said, "we are open to the project but no specific details could be provided on the same. India is being considered as a probable destination for Renault small cars and jeeps." Meanwhile, ITC Chairman and Managing Director L D Mittal also confirmed that his company was planning a foray into making cars and jeeps. "It is logical graduation for us to move from tractors to cars and jeeps. Though we have not finalised any plans on the same, we have initiated talks with Renault on the same." The tie-up with Renault, he said, is most likely to be for its small car range. "We already have the technology with us for producing jeeps but for cars we may join hands with Renault. But a final decision on the same is yet to be taken...The foray is still a dream." Mr Mittal said ITL’s present tie-up with Renault is not limited to tractors. "We can go to any extent and the foray into passenger cars and jeeps would be through a joint venture company." However, the exact equity sharing and whether a separate venture would be floated for the same is yet to be finalised. Regarding the tie-up with Renault, Mr Mittal said, "we had recently joined hands with Renault by way of offering them a 20 per cent stake in our company. Renault is a global giant in the automobile industry so we need not look for any other collaborator for our future ventures once they are with us. They make cars, jeeps, trucks and tractors." The agreement with Renault, he said, is not limited just to tractors. "It could go to any extent." The vehicles being produced under the venture would initially be targetted at the rural markets. "We have a history of being in the rural market. Our future products, including cars and jeep, would be rugged vehicles, more wear-and-tear resistant, sturdy and fuel efficient. We have this concept in mind for our cars." The idea is to initiate more competition in the rural and semi-urban markets where the disposable income comes from agricultural or business activity. There is a large potential in these markets which still needs to be tapped. The vehicles, he said, would be seen zipping down the city streets over the next two to three years. Renault SA, it may be recalled, had recently picked up a 36.8 percent stake in Nissan Motor and a 22.5 per cent stake in Nissan Diesel Motor Company, a truck maker subsidiary, for 5.4 billion dollars. This made Renault the largest shareholder in Nissan. Among the cars which are likely to be considered for the Indian market is twingo, which presently competes with the Alto (Zen) in European markets. Besides, jeeps from the Nissan range are also likely to be considered for India. (UNI) |
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ONGC Videsh Ltd signs two MoUs NEW DELHI, May 2: ONGC Videsh Limited, a hundred per cent subsidiary of Oil and Natural Gas Corporation (ONGC), has signed two different Memorandums of Understanding (MoUs) for the setting up of three billion cubic metres of gas per day upstream project at Vietnam. Talking to reporters, ONGC Videsh Chairman and Managing Director B C Bora said that the likely investment for the upstream segment of the project is expected to be around Rs. 2000 crore of which Videsh’s share would be close to Rs.1000 crore over a period of next three years. He said it would be one of the largest investments which this company would be making overseas in its history. The company intends to finance this project either through the equity route or through External Currency Borrowing (ECB) on the parent company’s guarantees. Mr Bora said the first MoU has been entered between Petro Vietnam and the foreign contractors for the supply of gas from block 06.1 for which ONGC Videsh was awarded production sharing contract in 1988 this MoU has been approved by the Vietnam Government. The second MoU has been entered between Vietnam Government and the contractors, that is, ONGC Videsh , BP/Statoil and Petro Vietnam, providing guarantees necessary for foreign investors. The company has also signed a third MoU for the mid stream and down stream segments for transportation and utilisation of gas in which, however, ONGC Videsh is not a partner. The third MoU was significant as the gas produced from the offshore field cannot bemonetized unless these agreements were also not put in place together. The project is expected to go in for commercial production by January 2002. The gas that would be available from here would be utilised a feedstock for the generation of 12 billion kilo watt hours of electricity per year.This is nearly sixty per cent of the current requirement of electricity of Vietnam, he added. (UNI) |
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Confusion prevails among
investors in oil NEW DELHI, May 2: Investors in oil exploration and refining process are confused over the swift changes in policy framework against the backdrop of the prevailing political uncertainty. Experts in oil exploration and refining process urged the Government to redraft policies related to levy of customs, excise and similar duties to facilitate a host of potential investors. At the recently concluded "infrastructure and investment India-99" seminar they were unanimous in their opinion that present policies for infrastructure development lack cohesion with inter-departmental intricacies. Petroleum and Natural Gas Secretary T S Vijayaraghavan said the Government has been finding ways and means of dissemination of technical data about various opportunities in the infrastructure development and investment to Non-Resident Indians to bring in investor confidence. "The experiments by public sector units in conversion of coal into natural gas failed on account of lower fuel prices in the oil producing countries,"he said. The demand for natural gas is expected to reach 180 per cent against the deficit of 120 per cent by 2010 and the the Government will have to draft long term policies to price the gas and import the stock from Australia, Malaysia and Indonesia. Though the country has reverted to the state-of-the art technology in the early 1980s to get the optimum output from crude oil, it had to face increase in demand for transport fuel, petroleum products besides the disposal of hazardous and toxic materials. There is a need for redeployment of skilled manpower, delivery of good equipment and adequate project management to cut operating cost. Deep water survey findings in 40 prominent sites covering 500 sq km showed showed the water depth to have concentrated between 400 and 3,000 metres and has the capacity for 900 cusecs of natural gas. So far the Government has offered 35 blocks for private sector with an investment of 120 million dollars. Of the one billion dollars spent so far, 12 per cent of the output would be met by early next year. Under phase two, three million dollars would be spent where the department is expected to extend tax holidays for seven years and facilitate 50 per cent concession on royalty for deep water, says Director-General (hydrocarbons) Dr Avinash Chandra. Speaking on "financing for energy sector regulatory framework and legal perceptions" Dr Udesh Kohli, Chairman and Managing Director, Power Finance Corporation (PFC) said eight State Governments had been committed to reforms since the centre had been busy in standardising project feasibility reports. Dr Kohli said specific guidelines had to be framed to counter legal aberrations arising out of political instability and consumer disputes. "Power sector reforms in India would be easier had there been a comprehensive auditing of overhead expenditure by State Governments and of the losses accruing to power pilferage in transmission and distribution," says Judith Sharrock of Ashursts Moris and Crisp, a UK lawfirm specialisng in advising mncs on legal aspects of doing business in India. Explaining the delay in the completion of power projects like Cogentrix Ms Sharrock said Indian Government had to approach the issues in a more strctured manner, keeping higher regard for the courts of law, where the public litigation petitions were heard. The Central Electricity Regulatory Authority Chairman S L Rao said there were difficulties arising in estimation of demand in terms of expendable power at peak and off-peak level. He hoped that the formation of a national grid might help in compensating the colossal losses due to mismanagement in generation and distribution. (UNI) |
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Inflation rate falls to 74-week low at 4.07 pc NEW DELHI, May 2: Continuing its downward trend for the third consecutive week, annual inflation rate fell to a 74-week low to reach almost 4 per cent for the week ended April 17 mainly due to easing of prices of non-food articles. Inflation, based on Wholesale Price Index (WPI), declined by 0.09 percentage points to 4.08 per cent (provisional) from 4.17 per cent (p) a week ago. Inflation had stood at 5.87 per cent during the corresponding week last year. This is the lowest inflation rate since November 22, 1997 when it touched 3.98 per cent. The index for all commodities (base: 1981-82 -100), however, increased by 0.2 per cent to 355.0 (provisional) as against 354.4 (p) in the previous week. Meanwhile, inflation based on the final index for the week ended February 20, the latest available, stood at 5.7 per cent compared to 5.1 per cent based on the provisional index. The present decline is mainly due to ease in the prices of fodder, raw cotton, groundnut seed, maize, wheat, biscuits, linseed oil and synthetic rubber. Compared to inflation based on WPI, the rate of increase in prices based on Consumer Price Index for Industrial Workers (CPI-IW), which is more reflective of retail prices, stood much higher at 8.9 per cent in march. CPI-IW inflation had touched a high figure of 15.3 per cent in December last. Index for primary articles’ declined, while indices for ‘manufactured products’ and ‘fuel, power, light and lubricants’ increased during the reference week. Index for primary articles fell by 0.4 per cent to 379.6 (provisional) as compared to 381.1 (p) in the previous week. Food articles’ index rose by 0.3 per cent and stood at 443.9 from 442.5 due to higher prices of condiments and spices (3 per cent), barley, ragi, fruits and vegetables (2 per cent each) and jowar, gram, arhar and moong (1 per cent each). However, maize (4 per cent), wheat and bajra (2 per cent each) and rice and eggs (1 per cent each) were cheaper during the reference week. Lower prices of fodder (18 per cent), raw cotton (3 per cent), groundnut seed (2 per cent) and raw hides (1 per cent) resulted in a 1.9 per cent decline in index for non-food articles to 373.3 from 380.8. The price of raw wool, however, went up by three per cent from the sub-group. (PTI) |
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PHDCCI urges parties to evolve consensus NEW DELHI, May 2 : The PHD Chamber of Commerce and Industry (PHDCCI) has urged the political parties to evolve a consensus on major economic issues to accelerate the pace and focus on second generation of economic reforms and liberalisation. "It is imperative not to lose sight of the economic agenda before the country even as fresh elections are to be held," PHDCCI president Ashok Khanna said in a statement here. The third election in as many years has not only put an additional burden of several thousand crores of rupees but he also injected an element of uncertainty about the outcome of the whole exercise. This has come at a time when the economy in general and the financial market in particular were showing sign of recovery, he said. It is time political parties rose above narrow and negative approach and evolve a consensus on key economic issues for healthy growth of the economy, the PHDCCI President said adding that these include reforms relating to financial sector, agriculture and rural sector, industrial sector, capital market and disinvestment or privatisation. The agenda should also include a long-term strategy to uplift the social fabric of the country - the key components of which will be population control, universal primary education and family welfare. Besides, it should also focus on removal of poverty and job creation, especially in rural areas. Although, drinking water, primary healthcare and housing are subjects which fall under the purview of the State Governments, the Central Government also bears a responsibility to ensure that these basic human needs of every citizen are satisfied. The chamber finds that adequate attention has not been paid to aspects of human development, resulting in problems like accentuation of inter-personal and inter-regional disparity, persistence of poverty, illiteracy and deficiencies in basic amenities, Mr Khanna stated. The rural urban disparity, both in terms of per capita income and expenditure, has gone up during the last few decades. Also the disparity in terms of percapita income is much higher as compared to per capita expenditure. The chamber felt these objective should also form part of the ‘consensus’ agenda, a phdcci release received here said. (UNI) |
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Stocks recoup most of early losses despite pol turmoil MUMBAI, May 2: Despite political uncertainty, the stocks recouped part of early losses on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) during the week that witnessed short covering by operators and fresh purchases by Foreign Institutional Investors (FIIs) and domestic funds. The BSE observed two public holidays — April 27 for "Moharram" and April 30 on account of "Buddha Jayanti". However, the NSE was closed only on April 27. Initially, the Union cabinet’s recommendation for dissolution of the Lok Sabha had caused panic in the market leading to a virtual stocks crash in view of fears that fresh polls would result in prolonged political instability slowing down the process of economic reforms. However, FIIs as well as domestic institutions and funds increased purchases, particularly in high priced scrips like pharma, software and refinery shares lifted the morale of operators who in turn rushed to cover their short positions leading to a remarkable recovery. The reassurance by the Prime Minister, A B Vajpayee at the annual general meeting of the Confederation of Indian Industry (CII) held on April 28, that his Government would soon come out with a discussion paper on the second generation of economic reforms, irrespective of the political turmoil faced by it, came as a short in the arm for the depressed market. HPCL, which hit the upper circuit filter in the last two sessions along with smart gains in MTNL, Colgate, Castrol, Novartis and Reliance Ind helped the sensex to recover over 50 per cent of initial losses. Dealers said the market is likely to witness narrow movements and low volume in the prevailing political situation with the dates of mid-term polls yet to be finalised. Reflecting the initial crash, the BSE sensitive index dropped sharply to below 3200-level at 3183.47. However, it staged a remarkable recovery in the two concluding sessions, lifting it to close the week at 3325.69 as against last weekend close of 3406.59, netting a fall of 80.90 points. The BSE-100 index also dipped by 32.21 points to end the week at 1449.64 from previous weekend close of 1481.85. The BSE-200 and the dollex were quoted substantially down at the weekend at 331.29 and 128.81 compared with last weekend close of 338.57 and 131.89 respectively. On the NSE, the S&P CNX nifty and the S&P CNX defty showed moderate falls of 3.80 points and 2.75 points at 978.20 and 791.75 at the weekend as against previous weekend close of 982.00 and 794.50. The CNX nifty junior, however, improved by 19.70 points to end the week at 1809.00 from last weekend close of 1789.30. The volume of business on the BSE was low at Rs 3363.44 crore from last week’s turnover of Rs 6617.76 crore. The NSE clocked a turnover of Rs 6065.98 crore as compared to last week’s turnover of Rs 7926.78 crore. (PTI) |
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Pol instability has leads to crisis in tabacco market VIJAYAWADA, May 2: Global slump in prices, international agitations against the use of tobacco and tobacco related produces, the collapse of Russia, the main purchaser, and the political instability in the country had led to the crisis in the Indian tobacco market for the last three years. A Tobacco Board official told that in view of the slump in prices and demand from abroad the registered growers were directed to plan cultivation in line with the target to avoid surplus production. India, which was one of the main exporters of tobacco to Russia before its collapse, was now facing a stiff competition from China and Brazil, which was pushing its surplus stocks into the international market by under quoting the market prices. He said with this unhealthy competition, the Indian farmers were put to heavy loss leading to 50 million kgs of tobacco lying surplus, after export and internal consumption. China which had a surplus production of 2500 million kgs had dropped its international price by fortyfive per cent, Brazil with a surplus production of 7000 million kgs in marketing its product at 7 to 8 per cent below the international price level. Even small countries like Malavi and Zimbabwe dropped their prices by 40 and 35 per cent respectively, he added. He said that Prakasam district in Andhra Pradesh accounted for 60 per cent of the total produce in the country. The Commerce Ministry had withdrawn the letters and bonds of guarantee which had further increased the farmers financial crisis. He said Karnataka which produces on an average 5000 kgs of grade F2K and F3 quality was traded at Rs 55 per kg, while the produce from Andhra Pradesh which was graded as F1 meant for export traded at Rs 32 only. He said tobacco was being cultivated on 26,000 hectares of land in the country, of which Andhra Pradesh cultivated 20,500 hectares. Karnataka 4000 hectares and Maharashtra 1500 hectares and the average yield was according to the soil. In Northern Light and Northern Black Soil (NLS and NBS) the average yield was 1300 kg per hectare, it was 1200 kgs yield from central black and southern black soil per hectare. The yield in southern light soil was 850 kgs per hectare and from Karnataka light soil it was 1000 kg. The country’s average production ranges from 1000 to 1100 kgs per hectare, he added. He said during 1997-98 the Board had purchased 130.50 million kgs at Rs 40.15 per kg from 20 platforms. He said of the total tobacco production in the country 75 per cent was exported and the rest was used for domestic consumption. The tobacco produced in NLS and SLS had been preferred by the foreign market and SLS and SBS produce was consumed domestically. Russia and other CIS countries were importing Indian tobacco along with some European countries. The Tobacco Board had earned a foreign exchange of Rs 1000 crores during 1997-98. The farmer was losing Rs 18 per kg as the price offered by the board was Rs 32 per kgs since exporters were reluctant to offer a higher price in view of the slump in the international market, he added. The farmers said they would be on a no profit no loss status if they were supported with minimum price of Rs 50 per kg. The input investment per acre had gone up from Rs 11,000 in 1997 to Rs 18,000 this year. He said to mitigate the sufferings of the farmers, the Board would assist them in procuring loans from banks and fungicides would be made available at all the platforms. (UNI) |
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