IEEMA for implementing Kelkar’s report on
two-tier duty structure

MUMBAI, Jan 5: Indian Electrical Electronics Manufacturers’ Association (IEEMA) has urged the Government to implement the Kelkar Committee recommendation for a two-tier duty structure with minimum duty of 10 per cent on raw materials and intermediates and maximum duty of 20 per cent on finished products.

In a pre-budget memorandum submitted, IEEMA expressed that the import duties on finished products should always be higher than on intermediates and raw materials.

In electrical and industrial electronics industry, anomalies exist in case of many products, where the import duty on finished products was either lower or equal to that on intermediates and raw materials, an IEEMA release said.

However, IEEMA cautioned that utmost care be taken while classifying raw material intermediates and finished goods as what may be finished goods for one industry may be the input raw material or intermediates for the user industry.

For example, electrical steel is a finished product for the steel industry but a basic raw material for the motor, transformer and switchgear manufacturers.

There could be classification disputes and confusion arising out of the same since the pressure groups would like to ensure that their product was classified to their advantage.

To avoid such disputes, IEEMA suggested that in case of the goods which attract 20 per cent duty, when used as inputs in domestic manufacture — with minimum value addition criteria — be allowed customs credit at 10 per cent by evolving a scheme similar to the cenvat scheme.

Continuing the rationalization process, IEEMA has recommended withdrawal of conditional concessions allowing imports at 0 per cent or 5 per cent import duties like finished goods for coal, power, fertilizers, self bonding/self solderable winding wires etc under specific notifications.

Following several procedural difficulties faced by its members due to different rates of taxes charged by different states, IEEMA has suggested that a single rate of tax be implemented across all the states in the form of the long-awaited vat at the earliest. (UNI)

Rupee seen range-bound watching
greenback’s overseas trend

MUMBAI, Jan 5: The rupee is expected to be range-bound around 48.00 level during the week with state-run banks absorbing the excess dollar inflows but could also be influenced by the greenback’s movement in global markets.

Though the dollar inflows from exporters and foreign funds are likely to surpass the nominal import demand at the beginning of the month, players may also watch the developments in West Asia and the resulted swings in oil prices, dealers said.

During the week ended January three, which marked the end of the last year as well as the beginning of the new year, the rupee witnessed slightly wider swings between 47.92-48.03 in thinly-traded volumes on mismatching dollar demand and supplies.

It was almost after a decade that the rupee managed close with a half a per cent gain even as the Reserve Bank of India (RBI) continued to intervene in the market throughout the year and built a whopping forex reserve which stood at a record USd 70.3 billion.

Opening the week firm at 47.97/98, the unit touched a fresh one-year high of 47.92 on monday on bunched-up inflows but was driven down to the week’s low of 48.03 on thursday by sustained dollar buying by banks to take advantage of the weekend swap differentials, coupled with reduced dollar supply on account of the previous day’s New York holiday.

The rupee closed the week at 47.9950/48.0050, one and half paise down from its previous weekend close of 47.98/99. Forward dollar premium drifted lower during the week on the back of abundant liquidity in the money market and easy call rate.

The sixth-month annualised premium closed the week at 3.48 per cent as compared to previous week’s 3.65 per cent.

In the cross currency trades, the rupee finished the week seven paise weaker against the euro at 49.88 (49.81) and nine paise down against the Japanese yen at 40.10 (40.01), while it gained against pound sterling to close 21 paise stronger at 76.59 (76.80).

During 2002, the rupee, which gained around half per cent (27 paise) against the US dollar, fell sharply against euro by 17.90 per cent (Rs 7.64) to 50.33 from 42.69, 10 per cent (Rs 3.70) against the Japanese yen to 40.44 from 36.74 and two per cent (Rs 1.38) against the pound sterling to 71.30 from 69.91 as these currencies had posted smart gains against the greenback.

In the overseas markets, the US dollar rose from multi-year lows in the Asian markets on Thursday after an unexpectedly strong jump in US manufacturing activity stirred cautious hopes that the world’s biggest economy was mending.

The euro moved down from its end-2002 three-year high over USd 1.05 per dollar to around usd 1.0365 while the yen hugged 120 per dollar.

Global oil prices continued to march higher and stood at a two-year high as the month-old venezuelan strike cut further into US imports and squeezed inventories down toward a 26-year low.

US light crude futures for february delivery stood 26 cents higher at USd 33.08 a barrel as against USd 32.73 of the previous week’s close. Oil pirces have soared by 30 percent since mid-November. (UNI)

After remaining stationary, inflation rate rises again

NEW DELHI, Jan 5: After remaining static for a week, the inflation rate went up by 0.07 per cent to 3.22 per cent in the week ended December 21 mainly due to the rise in prices of manufactured products.

During the same period last year the inflation rate stood at 3.22 per cent.

The index for manufactured products rose by 0.1 per cent to 148.4 because of rise in prices of maida by two per cent and atta, gur, groundnut oil, mustard oil and oil cakes by one per cent.

Prices of hessian and sacking bags, and zinc ingots went up by four per cent. Prices of cotton yarn were up by two per cent.

In this category prices of textured yarn and acrylic yarn were, however, down by seven and one per cent.

The index for primary articles declined 0.5 per cent during the week to 173.8 due to four per cent decrease in the prices of fruits and vegetables and one per cent decrease in prices of maize, gram, urad, condiments and spices.

The prices of fish (marine) were, however, up 13 per cent, and bajra and barley by two per cent.

Non-food articles in this category also witnessed a decline in prices. Prices of sunflower was down by six per cent and raw cotton by one per cent. But the prices of linseed in this category were up two per cent and gingelly seed and fodder one per cent.

The index for fuel, power, light and lubricants were unchanged.

The Wholesale Price Index (WPI) for the week ended 21st December declined by 0.1 per cent to 166.9.

The annual rate of inflation based on the final index for the week ended 26th October stood at 3.14 per cent as against 3.02 (provisional). The final WPI for the same period was 167.5 as against 167.3 (provisional). (UNI)

Bullion prices firm, sugar, edible oils, cotton suffer

MUMBAI, Jan 5: Gold and silver witnessed firm trend during the week ended January 5 on encouraging overseas advice, traders said.

While sugar, cotton, key metals, edible and palmolein oils drifted lower on poor demand in view of subdued advice from global and upcountry centres coupled with larger stocks supplies during the week ended December 28, traders said.

Bullion prices soar on tension in Gulf

Domestic gold prices fluctuated in a narrow range, between Rs 5,600 and Rs 5,650 per ten gm for standard mint gold and for biscuit between Rs 66,200 to Rs 66,400 per ten tola during the week, tracking the modest gains made by the safe haven metal in global markets on the back of growing fears that the US may declare war on Iraq.

Standard mint and gold biscuit, which resumed the week on a higher note at Rs 5,650 per ten gm and Rs 66,250 per ten tola, rose steadily and their high levels.

Standard mint closed a new peak of this year at Rs 5,650 per ten gm and gold biscuit also finished at Rs 66,350 per ten tola from their the previous week-ended on December 28, 2002.

Similarly , silver opened on a positive note at Rs 8,015 per kg on first day (Monday) of the week. Finally the price shot up by Rs 130 to Rs 8,140 per kg at the end of session of the week.

In Asian markets, spot gold, which crossed US dollar 350.25 in intra-day trading during mid-week in London, surged to dollar 351.25 per troy ounce on January 3,2003 compared to dollar 324 on the previous week-end, traders said.

The prices climbed on sustained good wedding seasonal demand in the face of lack of offerings by stockiest. There was also heavy speculative actions in Delhi, Kolkata and some other centres also boosted the domestic prices, a leading bull operators added.

Downward trend in sugar prices

price of small and medium grades of sugar weakened during the period under review by Rs 15 and Rs ten to settle at Rs 1,175/1,225 and Rs 1,205/1,268 per quintal respectively, while its ex-factory naka rates settled marginally lower by around Rs 5 each to Rs 1,170/1,190 and Rs 1,190/ 1,215 per quintal as lesser demand by retailers and sweet makers.

Following reports that the Centre Government’s proposal of 20 lakh tonnes of sugar buffer stocks due to bumper production during the current season.

The commissionarate of sugar, Maharashtra Government , the sole canalising agency for sugar export from the state, will declare export quotas from each of the factories shortly. The commissinerate has sold for exports 2.5 lakh tonnes of sugar iln the past one month. Further the commissinorate will set up a portal. It will give two ways quotas , allowing sugar mills to put-up tender notices, where the traders will invite quotas. The portal will be ready by the next crushing season, according to Mr Ashok Jain, secretary of Navi Mumbai based, Bombay Sugar Merchants’ Association Traders added.

Select metals weak trend on subuded advice from london metal exchange (LME):

Prices of ferrous metal segment (per quintal), copper heavy and its utensils declined by Rs 100 each during the week and touched a low at Rs 10,750 and Rs 9,750 respectively at the week-ended. Similarly, brass scrap and its cuttings also eased by Rs 25 each to Rs 8,400 and Rs 8,700 respectively. Demand was slack because of subdued advice from London Metal Exchange (LME), Kolkata and other centres.

Similarly, in non-ferrous metal segment, zinc slab, lead ingots, and nickel cathode prices also came down by Rs 300, Rs 100 and Rs two respectively during the week and quoted at Rs 6,300 per quintal, Rs 3,800 per quintal and Rs 480 per kg respectively on bearish advice from lme along with increased offerings by stock-holders.

Other metals like aluminium and copper wire bars however were unchanged at Rs 7,700 and Rs 12,150 per quintal respectively.

Cotton prices suffered during the week.

Popular varieties such as V-797 and Shankar-6 eased by Rs 100 each per quintal on thin demand from spinners and exporters.

Bengal Deshi, J-34 and MCU-5 varieties each lost by Rs 150 per quintal on poor local consumption amid huge stocks, traders said.

Maharashtra agriculture commissioner C R Hazra told a joint meeting of the textile industry and cotton seed producers that only those varieties of cotton that the textile industry needs would be promoted in the future.

They were told that a meeting of the representatives of the textile industry, seed producers as well as the state agriculture ministry would be held soon to identify the industry’s requirements and the varieties to be promoted for cultivation.

Following were the rates in rupees per quintal at the week ended: Bengal Deshi: 3,684, Gujarat wagad: Nil, V-797: 3,403, Karnataka Jaydhar: 4,865 ,Punjab J-34: 4,555, Y-1: 4,218, Nhh-44: 4,387, Lra: 4,584, H-4: 4,921, S-6: 5,258, MCU-5: 6,411, DCH-32: 8,380, 26 mm: 4,584.

Groundnut javas seeds, groundnut, palmolein and sunflower grades dipped on subdued advice from rajkot, hyderabad and other centres.

Prices of groundnut seed, its oils and imported palmolein also eased noticeably during the week on poor off-take and improved arrivals, traders said.

Groundnut javas 60/70, 70/80 and 80/90 varieties dropped by Rs 25 per 100 kg each during the week and were quoted at Rs 3,000, Rs 2,965 and Rs 2,925 respectively on lack of fresh demand from bulk consumers, induced by bearish advice from rajkot and other centres, they said.

Similarly, castorseed also declined by Rs 70 to Rs 1,780 in line with these seeds.

Among oils, groundnut raw eased slightly by Rs five during the week and the price finally settled at rs 505 per ten kg on sustained selling pressure by stock-holders in the face of increased stocks.

Cottonseed refine, sunflower expeller refined and sunflower solvent refine also dropped by around Rs 15 per 10 kg each to Rs 407, Rs 450 and Rs 415 respectively, taking cue from the positive trend in other domestic markets.

Imported palmolein, soyabean refine, sunflower crude and rapeseed crude varieties also came down by around by Rs 15 each and their quoted at Rs 375, Rs 405, Rs 412 and Rs 430 per kg respectively on heavy inflows along with poor demand, traders said. (UNI)

Rajnath Committee on Kelkar report meets

NEW DELHI, Jan 5: Mr Rajnath Singh, Chairman of the BJP committee to go into the Vijay Kelkar report on direct and indirect taxes, today said his panel did not agree with the recommendation for levying tax on agricultural income and hoped the Government would reject this proposal outright.

Members of the committee met at the BJP headquarters here this afternoon to discuss the report of the Kelkar-led task forces.

Talking to reporters after the two-hour meeting, Mr Singh said his committee would submit its report to Finance Minister Jaswant Singh on January ten or 11.

He said there were certain recommendations of the Kelkar Committee with which his panel agreed but there were certain others on which it had a different opinion, which would be conveyed to the Finance Minister.

The panel would keep the interests of all sections of the society in mind while giving its suggestions to the Finance Minister. The committee would also discuss the issue with BJP president M Venkaiah Naidu. "It would meet again to discuss the Kelkar report on January seven and nine," he added.

Mr Singh has on record opposed some of the proposals of the Kelkar Committee, like bringing agricultural income into the tax net and withdrawing exemptions on small savings and tax benefits on housing loans.

The BJP observers are of the opinion that the elimination of exemptions on savings would hit pensioners and widows, thus eroding a political base. Besides, the saving rate needs to be substantially raised from the present 23 per cent to meet the tenth plan targetted eight per cent growth rate. Moreover, housing finance has been a high growth segment accounting for substantial increase in the growth rate of services. Similarly, the boom in construction is attributable to the phenomenal growth in the housing sector in recent years. Any attempt to eliminate tax sops could upset the applecart. (UNI)

Haryana to spend Rs 50 crore for drinking water in NCR

CHANDIGARH, Jan 5: Haryana Government would spend Rs 50 crore for tackling drinking water problem in the national capital region.

Under the scheme, Bahadugarh, Gohana, Rewari, Jhajjar, Sonepat and Panipat would be covered, a spokesman of State Public Health Department said today.

The water supply and sewerage schemes in Rohtak, Jhajjar, Gurgaon, Rewari, Sonepat and Hisar have also been approved and Rs 87.48 crore would be spent on it, he said adding the project is expected to the completed by October 2006.

He said under the centrally-sponsored programme for augmentation of water supply schemes in habitations upto a level of 55 ltr per capita daily, Rs 20.02 crore would be incurred this year.

Under the desert development programme, a sum of Rs 9.44 crore would be spent in the districts of Hisar, Sirsa, Rewari, Bhiwani, Rohtak, Jhajjar, Fatehabad and Mohindergarh, he said.

These districts faced acute shortage of drinking water for people as well as cattle.

Under the accelerated urban water supply programme, 28 schemes were sanctioned by the centre at a cost of Rs 51.09 crore for improvement of water supply to a level of 70 ltr per capita daily in towns with population upto 20,000, he said.

Under this scheme work has already been completed in Sohna, Pataudi, Kanina, Narnaund and Bawani Khera, he added. (PTI)

Entrepreneurship development programme on NES

COIMBATORE, Jan 5: A month long Entrepreneurship Development Programme (EDP), sponsored by the Ministry of Non-Convention Energy Sourcs (NES), is underway in Tamil Nadu Agricultural University (TNAU) here.

EDP, which began on Friday last, was aimed to convert the present totally subsidy based mode of dissemination of Renewable Energy Technologies (RET) to market driven and commercial approaches, according to Dr S Kamaraj, Course Director and Coordinator of Biogas Training Centre, TNAU.

India was implementing one of the world’s largest programmes on renewable energy compared to the similar efforts in other developing countres, due to the vast area and population and also the diversity of applications and technologies undertaken by the centre, he said, he said in a release today.

The programme covers the entire gamut of technologies, including improved chulhas, biogas plants, biomass gasifiers, solar thermal and solar photovoltaic system, wind mills, small and micro hydel systems, energy recovery from urban municipal and industrial waste and hydrogen and ocean energy, he said. (PTI)

SEBI committee moots merger of regional stock exchanges with OTCEI

MUMBAI, Jan 5: A Securities and Exchange Board of India (SEBI) sub-group has suggested the setting up of ‘Indonext’—a third National Stock Exchange—similar to the Euronext in the overseas, by merging regional stock exchanges with the ‘Over The Counter Stock Exchange of India’ (OTCEI). The sub-group headed by M R Mayya, Chairman of the Interconnected Stock Exchange of India (ICSI), in its report submitted to the capital market regulator has also suggested compulsory listing of low cap companies at the proposed ‘Indonext’.

This proposed nationwide trading platform would not only solve the long-pending issue of the survival of regional stock exchanges which are on the verge of closure, but will also create a trading platform for low cap companies, market sources said.

The committee has suggested that low cap companies having a paid up capital of Rs 20 crore should be compulsorily listed on the ‘Indonext’.

The committee has also suggested a separate order book for the Indonext, on which members of Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) would be allowed to trade.

There had been persistent demand from the representatives of regional bourses for some remedies from the Government for the revival of these exchanges.

Business volume on Jaipur, Delhi, Ahmedbad, Rajkot, Bhubaneshwar, Pune and other stock exchanges has been eroding completely in recent times following the nationwide reach of the NSE and the BSE.

SEBI Ghairman G N Bajpai had held meetings with the representatives of regional stock exchanges immediately after he took over last year.

The SEBI committee comprising former OTCEI Managing Director Pravin Mohonot, Joseph Massey (ICSI) and others, also put forward the successful example of euronext, created by merging the three stock exchanges of Brusells, Paris and Amsterdam to make available a separate trading platform for low-medium cap size companies. (UNI)

Modi pledges to revive scam-ridden Co-op Banks’ in Gujarat

AHMEDABAD, Jan 5: Chief Minister Narendra Modi today announced the Government’s decision to protect the interest of lakhs of depositors in the cooperative banks and warned the "neo-mafia" against demolishing the century-old cooperative movement built on people’s trust in the state.

Mr Modi was speaking on the function held here to distribute cheques totalling Rs 1.41 crore as the insured amount of 6,967 labourers, who had deposited their money in ‘Majdoor Sahakari Bank’ (established by Mahatma Gandhi in 1947 in Ahmedabad) which had been liquidated.

Mr Modi said the State Government’s decision to collect 15 per cent reserve fund from each bank was aimed at protecting the depositors’ interest. He said seven banks have not yet come forward so far, which reflected their attitude towards the depositors.

Legally speaking, he said, the Government was not bound but was committed to protect the depositors’ interest.

Agriculture and Cooperation Minister Bhupendrasinh Chudasama, said the new cooperative policy intended to take care of the depositors’ interest in the cooperative banks.

He said the State Government would take stern action against defaulter banks and directors.

Minister of State for Home Amit Shah, who is also the Chairman of Ahmedabad Cooperative Bank, said depositors of five cooperative banks were returned their insured amounts and would ensure that depositors of other closed mills get back their due in the next six months. (UNI)

10 pc growth rate in agriculture targeted: Advani

HYDERABAD, Jan 5: Giving a big boost to economic reforms in India in the tenth plan, Deputy Prime Minister L K Advani today hinted at major reforms in the agriculture markets, public distribution system and the Food Corporation of India but wanted their benefits to reach the ‘last man’.

Inaugurating the CII’s Partnership Summit-2003 here, he said the Government wanted to remove all the artificial restrictions in the creation of "a single, seamless national market for agricultural produce" so as to accelerate prosperity in the rural areas.

"Today, our problem is not food scarcity but food surplus. Restrictions that perhaps made sense in an (earlier) economy of shortages are today acting as impediments to growth — and to prosperity in our rural areas — in an economy of plenty. Our vision is to make rural India move faster so that it can generate productive employment to create new business opportunities for rural entreprenuers and witness a visible betterment in human development indicators," the minister noted.

Tackling these problems called for major reforms in the country’s system of agriculture markets, pds and the functioning of the FCI. "we are determined to implement these reforms," he said.

Stressing on the opportunities of a knowledge-driven economy, Mr Advani said India was rapidly coming out of the regime of shortages and bottlenecks in infrastrcture and in basic services like cooking gas.

Terming as "quite satisfactory" the management of the worst drought in 14 states in several decades, he said "holding the prices despite adverse monsoon has shown the resilience of our economy and its capacity to absorb the food security schemes."

Stating that India was pursuing one of the world’s most extensive food security schemes by providing rice and wheat at highly subsidised rates to ten million ‘poorest’ families and running the largest food for work programme with an outlay of Rs 10,000 crore, he, however chose to apply "Gandhiji cannon of good governance", by saying the "welfare of last man is also the ultimate test of economic reforms." (AGENCIES)

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