NALCO due diligence off court moved on centaur petrol pump issue

NEW DELHI, Nov 25: Government today said it has suspended the due diligence by bidders in the disinvestment of the National Aluminium Company Ltd since a team of potential buyers who went to the NALCO plant was roughed up.

"As such incidents can adversely affect investor sentiments as well as valuation, due diligence will be resumed after adequate arrangements have been ensured," Disinvestment Minister Arun Shourie said in the Rajya Sabha in a written reply.

Mr Shourie said this in reply to a question whether the proposed disinvestment of NALCO had been deferred.

NALCO is a profit-making company with the ratio of profit-before-tax to net worth at 16.31 per cent for the year 2001-2002.

On the question of transfer of the Indian Oil Corporation’s outlet at the disinvested Centaur Hotel in Mumbai, the minister said that parties have approached the high court and the matter is sub-judice.

"The matter involves issues of disclosures made to the bidders and its consequent legal ramifications", Mr Shourie said.

The entire business of Centaur Hotel Airport Mumbai was sold to Batra Hospitality Private Ltd on ‘slump sale’ basis for Rs 83 crore following competitive bidding. The transfer of business in favour of Batra Hospitality took place on June five, 2002. However, the buyers have sold their shareholding on October 10,2002 to Sahara India group. While the total value paid to the shareholders amounted to Rs 45 crore, Sahara Group repaid the borrowings from the Oriental Bank of Commerce of Rs 70.50 crore.

Asked whether the NDA Government was divided over the disinvestment policy, the minister said, "different points of view on the appropriate way to proceed or inferences drawn from experience are harmonized through inter-ministerial consultantions," Mr Shourie said.

In order to realize the 2002-03 target of Rs 12,000 crore, the Disinvestment Ministry is presently processing disinvestment of 54 cases.

Eight disinvested companies and five privatised ITDC hotels have effected a net reduction of staff to the extent of 7.8 per cent of the total strength of employees. However,"as the units become more competitive and complete expansion plans, remunerative or workers as well as job opportunities will improve significantly", Mr Shourie said.

Mr Shourie said it was not true that the Government was interested in selling only the profit-making companies of the 34 cases of disinvestment through strategic sale, 25 cases or 74 per cent of the total were loss making. Of the 47 cases in which the Government had taken the decision to disinvest, 26 cases are loss making representing 55 per cent of the total cases under selloff. (UNI)

High fiscal deficit poses danger: IMF

NEW DELHI, Nov 25: International Monetary Fund today warned that mounting fiscal deficit has heightened the "short-term risk" posing dangers to the Indian economy.

"It is not a time bomb, but high fiscal deficit has certainly posed danger of short-term risks to the economy," the visiting IMF Deputy Managing Director Anne Krueger told reporters.

Krueger, who was here to participate in the G-20 Finance Ministers and Central Bank Governors meet here during the weekend, said "I think the combined fiscal deficit in India is now at 10 per cent of GDP. It is not sustainable as it could stunt growth pushing up inflation, harden interest rates crowding out private investment and choking Government borrowing in the short term."

Asked if the Vajpayee Government had the political will to grapple with the situation in the face of the ensuing elections, Krueger said she did not know as she had not the opportunity to meet Indian leaders because her vist was primarily for G-20.

But the issue of high fiscal deficit had the potential to stunt growth if immediate steps were not taken to contain it. "It is not possible to say how long something like that can go on before there is trouble. So clearly that has to be addressed. We would see that as a big short-term risk," she cautioned.

"I know of no country that has succeeded in running a fiscal deficit that is 10 per cent of GDP for very long," Krueger said asserting the adverse effect of fiscal deficit would be felt when the economy started to look up.

When pointed out that India’s economic fundamentals were strong like low inflation and comfortable foreign exchange reserves of 65 billion dollars, Krueger said "when the investment demand picks up, interest rates have to start rising. As and when that happens, there will be a crowding out of the private sector, choking growth."

The hardening of interest rates would also hit the Government directly as it would have to pay more to service its debt burden.

The Government has, however, taken a decision to cut the fiscal deficit by half a per cent every year, Krueger said apparently referring to the fiscal responsibility legislation pending in Parliament for over two years.

Asked what would her prescription be for reducing fiscal deficit, Krueger said "that’s a political choice, how it is addressed, whether it is by reduction in expenditure or ncrease in taxes."

Noting that economic reforms since 1991 has pushed up growth, Krueger said there was need to hasten it further to achieve 8 per cent growth proposed in the tenth plan.

"We recognise that India has a higher rate of economic growth since it started reforms in 1991 and that is the way to go," she said.

To a question if there was political will on the part of the Government after the recent controversy over the disinvestment, Krueger said "we hope it (disinvestment) will be revived in three months as indicated."

Asked what would be an ideal level for foreign exchange reserves considering that India had a whopping 65 billion dollars reserves which was growing by 500 million dollara a week, she said the leval must depend on the vulnerability of the economy to internal and external environment.

But "there is no ideal level and there is no rule that covers everything. That’s a judgement that has to be made by the competent authorities within the country," she said. (PTI)

BPL Telecom enters PC market, targets 20 per cent share

NEW DELHI, Nov 25: BPL Telecom today announced its entry into the personal computer segment, eyeing 20 per cent market share over the next two years.

Company associate vice president said the electronics major is planning to sell 3000 PCs over the next two months. The company which has already bagged small orders for supply of 300 PCs each to VSNL and BSNL for their backbone operations in Kerala, today unveiled TS PC — BPL Cybercom — in Northern India and Mumbai after unveiling it in Karnataka, Kerala and Hyderabad.

Cybercom PCs are priced in the range of Rs 25,000-Rs 35,000 and the configuration currently stands at 1.2 ghz on a celeron processor and 2.4 ghz on a pentium 4 intel processor, Javed Siddiqui, head, sales, northern region, BPL Telecom said.

"We have kept the price range in the affordable range of lower than an MNC and higher than local PC companies to be able to serve all the segments — home, SMEs, corporates and govenrment , he said.

BPL Telecom has assembled the PC at its palakad facility in Kerala where the company manufactures inputs like Lan Card, computer monitor and speakers. (UNI)

Govt decides to close down HFC, FCI

NEW DELHI, Nov 25: Government has decided to close down Hindustan Fertilizer Corporation Ltd (HFC) and Fertilizer Corporation of India (FCI) excepting its Jodhpur Mining Organization (JMO), Lok Sabha was informed today.

In a statement in the House, Minister for Chemicals and Fertilizers, S S Dhindsa said this decision was taken after the Union Cabinet considered the revised comprehensive rehabilitation proposals in respect of the remaining units of HFC and FCI based on recommendations of group of ministers appointed for the purpose.

He said the Board for Industrial and Financial Reconstruction (BIFR) had declared these two as sick and ordered their winding up on November two, 2001 for FCI and December 12, 2001 for HFC.

Both companies filed appeals against these orders of BIFR before the appellate authority for industrial and financial receal of FCI has been dismissed by AAIFR while that of the HFC which came up for hearing on November 15 has been reserved for orders by AAIFR, the minister said.

He said these two companies while implementing the Government decision have offered voluntary separation scheme (VSS) to its employees. An estimated Rs 691 crore is required for offering VSS to 10,596 employees of these two PSUs, which is being met entirely from the budgetary support by the Government. (PTI)

FDI flows to India to go up: UNCTAD

NEW DELHI, Nov 25: Bucking worldwide trend, the Foreign Direct Investment (FDI) flows into India will grow from last year’s level, according to a UNCTAD official.

"Worldwide FDI flows will decline 27 per cent this year - 25 per cent in developing countries and 31 per cent in developed countries - but India is one of the few countries where it will go up," Mr Karl Sauvant, Director, UNCTAD told UNI.

"In Asia, the FDI will decline by 12 per cent this year and only in India, Malaysia, Philippines and China it will increase," he said on the sidelines of a Asia Pacific regional seminar on investment.

"Hong Kong, Korea and Thailand will be the major losers this year as far as FDI is concerned," Mr Sauvant, who is with division on investment, technology and enterprise development of UNCTAD, said.

Last year, the FDI flows had gone down by around 50 per cent to 740 billion dollars of which developing countries accounted for 200 billion dollars.

"In 2002 this figure is expected to be 540 billion dollars. The share of developing countries in this pie will be between 180 billion dollars to 190 billion dollars," Mr Sauvant said.

"Earlier mergers and acquisitions accounted for large chunk of FDI in developed countries. But in the first nine months of 2002, FDI through this route has gone down by 45 per cent," he said.

The UNCTAD director said that next year too the worldwide FDI flows would not record a major recovery.

"FDI can contribute to the economic growth of a country. In Ireland, foreign companies account for 90 per cent of the country’s exports, for China this figure is 49 per cent and India nine per cent," Mr Sauvant said.

Mr Sauvant said that with all countries competing to attract FDI, those with better economic fundamentals would be most successful. (UNI)

Stiffer penalty for traders dealing in spurious
pesticides: Minister

NEW DELHI, Nov 25: The Centre will impose stiffer penalty on traders dealing with spurious and sub-standard pesticides and seeds, Union Minister of State for Agriculture Hukumdeo Narayan Yadav said here today.

In a written reply during question hour in the Lok Sabha, Mr Yadav said after repeated complaints about supply of spurious and sub-standard pesticides and seeds, plant protection division officials had drawn 18 samples of different pesticides from Indira Market in Delhi, out of which four were found "misbranded".

Action had been initiated in cases of "misbranded" samples as per the law, he informed Mr G S Basavaraj in reply to his query.

Mr Yadav denied that Government proposed to formulate a "rural market friendly agriculture marketing policy" for the development of marketing structure in reply to a question from Mr Kailash Meghwal.

However, to strengthen and develop the agricultural marketing system, an inter-ministerial task force had been set-up, which had recommended amendments in the state agriculture produce marketing regulation act to allow private and cooperative sector investment in setting-up agricultural markets, he said. The task force had also recommended providing subsidies to enable the private sector initiatives attain economic viability, he added.

Mr Yadav noted that to encourage promoting agencies to take up infrastructure projects, the Central and State Governments should extend support by allocating land to set-up such markets, along with fast approval of foreign technical assistance and import of equipment for services like electricity, water, sewage and telephones.

The Indian Council of Agricultural Research (ICAR) was not working under pressure from Monsanto, an American seed producer, and the council had submitted its report on BT cotton, the minister informed the House in reply to another query from Mr Subodh Ray.

The council had submitted its final report to the Genetic Engineering Approval Committee (GEAC) after conducting trials of BT cotton hybrids through All India Coordinated Cotton Improvement Project in central and south zones of the country during the 2001-02 cropping season.

The GEAC had conditionally approved the release of three transgenic BT cotton hybrids, namely BT Mech 12, BT Mech 162 and BT 184, for commercial cultivation in the two zones during the 2002-03 cropping season, after reviewing the performance of BT cotton hybrids, he said. (UNI)

STPI and BPML of Mauritius sign MoU for cooperation

NEW DELHI, Nov 25: Software Technology Park of India (STPI) and the BPML of Mauritius have inked a Memorandum of Understanding (MoU) in the field of Disaster Recovery Services (DRS).

The MoU was signed in Mumbai yesterday in the presence of the Prime Minister of the Republic of Mauritius Rt Sir Anerood Jugnauth and Information Technology Secretary R R Shah.

The DRS Centre would provide facilities for data backup, data recovery in the event of mechanical loss or otherwise disaster leading to loss of data/IT services, data synchronisation on either side and such other services required for disaster and data management. Both India and Mauritius would be linked with optic fibre/satellite as required for provision of customer services.

Due to the September 11 attack on the World Trade Centre, software companies are looking for the DRS away from the location of the normal operation. Protecting customers data is now the priority for which best technology has to be deployed.

BPML has desired technical assistance for establishing a similar kind of DRS in Mauritius. In addition to India, Mauritius can be projected as an alternative DRS site for the American/European companies. STPI would be extending technical assistance in setting up such a disaster recovery centre in Mauritius.

In its endeavour to constantly excel in its services, the STPI is now focussing on providing a wide range of managed disaster recovery services to protect and boost export revenues. Since STPI’s primary intention is to provide service to the exporters, these managed services are made very affordable. (UNI)

Foreign tourist traffic shows positive trends
in Oct: Jagmohan

NEW DELHI, Nov 25: The Government today claimed that there had been a positive growth of 16.8 per cent in foreign tourist arrivals in the month of October this year compared to the same month last year.

Tourism Minister Jagmohan told the Lok Sabha in a written reply that the number of foreign tourists who visited India during the period between January and October this year was 1.83 million, showing a decline of 11.8 per cent. But the tourist arrivals are estimated to have increased from 1,43,100 in June to 2,12,191 in October this year.

The minister admitted in another reply that the tourist traffic which had increased by 6.7 per cent in the year 2000 had declined by 4.2 per cent in 2001 because of events in New York, Afghanistan, India and the travel advisories. However, he said the foreign exchange earnings had marginally increased by 0.7 per cent. He said estimated foreign exchange earnings in 2000 registered an increase of 5.3 per cent, but there was a decline of four per cent in 2001.

He said in reply to another question that there was a general decline of around two per cent in the occupancy of hotels in the country during 2001-02.

The minister, however, did not feel there was any need for setting up a cabinet committee to go into ways of increasing tourism in India.

He said that six travel circuits would be identified in the country during the tenth five year plan by the department of tourism.

Meanwhile, 753 centrally proctected monuments have been identified by the Archaeological Survey of India under the tenth plan for structural conservation, chemical-preservation and environmental development. (UNI)

Strengthen FIPB for higher FDI inflow: Singh

NEW DELHI, Nov 25: Mr N K Singh, Planning Commission member and head of the Steering Committee on Foreign Direct Investment, today called for creating a congenial atmosphere for FDI by giving more power to the Foreign Investment Promotion Board (FIPB) and simplifying rules and procedures in this regard.

"It has to be seen what kind of regulatory and institutional framework is required for special economic zones to attract investment inflow," Mr Singh said on sidelines of the India Economic Summit here.

Disclosing that sectoral caps does not cover his entire recommendations, he lamented that only a small portion of the report was highlighted.

He expressed the hope that his report would soon be taken up for consideration by the group of ministers on FDI.

Earlier, Mr Singh said that distortionary subsidies should be lifted to bring benefits of liberalisation to the least developed countries.

Stating that the least developed countries are receiving less fdi over the past two years due to regional centric approach of investors, Mr Singh said India could become the engine of growth since the country has edge over other nations. (UNI)

CCEA approves award of 13 oil blocks to
ONGC, 9 to Reliance

NEW DELHI, Nov 25: Cabinet Committee on Economic Affairs (CCEA) today approved award of 13 oil and gas blocks on offer under the third round of new exploration licensing policy to Oil and Natural Gas Corporation (ONGC).

Reliance Industries, in consortium with hardy oil of UK, was awarded nine blocks including seven of the nine prime deepwater blocks on offer, Government sources said.

Scottish explorer Cairn Energy and premier oil of UK drew blank in the third round of nelp where Government received 45 bids for 23 out of the 27 exploration blocks on offer.

Gujarat State Petroleum Corporation (GSPC), in consortium with Geo Global Resources (India) Ltd and Jubiliant Enpro India Ltd, was the third successful company, bagging the KG-OSN-2001/3 offshore blocks in Krishna Godavari Basin.

ONGC bagged all the 8 out of the 11 onland blocks on offer, sources said adding three onland blocks in Bengal (WB-ONN-2001/1), Bihar (PA-ONN-2001/1) and Madhya Pradesh (VN-ONN-2001/1) received no bids.

Besides, ONGC also got three out of the seven offshore blocks on offer. RIL got two while one block KK-OSN-2001/1 in Kerala-Konkan basis did not attract any bid.

ONGC was the sole bidder in HF-ONN-2001/1 onland block in Himachal Pradesh, AA-ONN-2001/4 onland block in Nagaland and PG-ONN-2001/1 onland blocks in Andhra Pradesh. (PTI)

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