Daily Excelsior...Business

BHEL bags contract for setting up 500 Mw unit in K’taka .....

Trade bandh in Delhi today against tin .....

IT companies to increase manpower by as much as 70 p c .....

IFC exits from committed portfolio in India upto 1 bln dlr .....

BEL to forge strategic alliance for exports

BANGALORE, Nov 16: Indian Defence Electronics major Bharat Electronics Limited (BEL) is forging strategic alliances to emerge as an aggressive global player for defence and civilian products and looking ahead to exports to contribute to ten per cent of its total turnover.

By 2006-07, when the company’s turnover was expected to cross Rs 5,000 crore from the current over Rs 2500 crore, the exports should contribute Rs 500 crore, Mr Y Gopala Rao, who took over as Chairman and Managing Director of BEL in October last, said.

The company’s last year’s exports amounted to Rs 50 crore and this fiscal it would cross Rs 60 crore.

In a chat with newspersons here yesterday, Mr Rao said the company was already negotiating with a few companies for forging strategic alliance.

The company, which had a strong order book position of over Rs 6,900 crore as on April one this year, would end the fiscal with a turnover of Rs 2,750 crore and the order book surpassing Rs 7,000 crore, he said confidently.

With nearly 78 per cent of its production going to the defence sector, BEL is planning to build on its crore strength in broadcasting and radars and sonars to tap market worldwide. Thrust areas included the African countries and SAARC region besides Europe.

"We have already a few alliances with European companies. We will build on them and demonstrate that Indian production was second to none in the world in quality and try for our share of the cake in global defence market," Mr Rao said.

It had already made it clear to an Israeli collaborator that it was willing to offer thermal imaging products for exports. Built in BEL Machilipatnam unit, Thermal imagers have found acceptance worldwide, he added.

The company aimed at building a strong research and development base to ensure that newer products were rolled out in frequent intervals.

BEL celebrating its golden jubilee this year would also outsource design and development to keep abreast with latest technologies, Mr Rao said.

BEL Director (Commercial) S C Khanna said some south east Asian countries, besides Mauritius and Malawi, have shown interest in procuring the Electronic Voting Machines (EVMs) developed by BEL. In Singapore and Malaysia the evms had been demonstrated to the Government and it now need to be demonstrated before the political parties there. There was tremendous response to the EVMs which had been suitably modified to meet the requirement of various countries. In India, the company planned to supply 140,000 evms this year, he added.

He said BEL was also awaiting orders from the army for procurement of short range Battle Field Surveillance Radar (BFSR) developed indigenously by the electroncis and radar development establishment and produced by BEL. The necessary demonstrations had been completed and the radar was in its final stage of evaluation.

He said the company would be investing Rs 150 crore from internal accruals for various capital works this year. (UNI)

Improved economic condition getting reflected
in direct tax mop up

NEW DELHI, Nov 16: The impressive economic recovery underway and buoyancy in industry are now getting reflected in direct tax collections with their mop up slated to exceed the budget target of Rs 96,000 crore for the first time in 15 years.

Upto October this year the direct tax revenue was up by 20 per cent over last year’s figure. The budget has targeted a 16 per cent growth in the revenue for fiscal 2003-2004.

The growth of direct taxes is likely to accelerate in the coming quarters with liquidation of pending refunds and receipts of advance tax, official sources say.

"Industries are experiencing a robust growth with all sectors doing very well and showing good corporate earnings, this has resulted in higher revenue on account of Income Tax and Corporate Tax," says Central Board of Direct Taxes (CBDT) chairman P L Singh.

The budget target for Corporate Tax for the current fiscal is Rs 51,499 crore and for Income Tax is Rs 44,070 crore.

"We are optimistic that the Direct Tax collection this year would exceed the budget estimates. The trend is quite evident. We have already crossed 30 per cent level of advanced tax," Mr Singh says.

The gross corporate tax collection upto October 31, 2003, was Rs 57,391 crore and refunds were to the tune of Rs 18,633 crore, the net corporate tax works out to Rs 38,758 crore.

The net personal tax collection upto October 31 was up by 5.41 per cent over last year’s figure.

The mid year review released by the Ministry of Finance on November 13 has projected a GDP growth rate of seven per cent, industrial growth rate of six per cent and agricultural growth rate of about eight per cent.

The RBI has also revised upwards its projection for this year and has pegged the GDP growth rate between 6.5 per cent and 7.0 per cent.

The CBDT is of the view that in the next one-and-a-half years it will be able to clear most of the pending tax cases. It is counting on some initiative in this regard.

Mr Singh is confident that all legal issues relating to the establishment of the national tax tribunal would be sorted out. "The national tax tribunal will definitely materialise and we are awaiting Court judgements on the cases filed before the High Courts," he says.

Given the large number of appeals, the Finance Ministry proposes to set up 50 more benches of Income Tax Appellate Tribunal across the country, 25 of which will be establsihed this year. The Tribunal, at present, has 53 benches.

The gross collection of direct taxes upto Sseptember-end was Rs 50,911 crore, up by 22 per cent over last’s year’s figure.

The growth in Corporate Tax collections had been an impressive 30 per cent, while Income Tax collections, inclusive of personal income tax, had gone up by 11 per cent till September 30.

It is thus seen that within direct taxes, the Corporate Tax has registered a much higher growth, overshadowing the growth in Income Tax.

In a move towards a more tax payer-friendly system, the department of revenue has expedited the refunding of excess taxes to citizens. As a result, the total refund of taxes in the first six months of the current fiscal at Rs 17,386 crore was 47 per cent higher than refunds of Rs 11,823 crore in the corresponding period in the previous fiscal.

Experts say given the narrow base of the tax system, the feasibility of the Central Government revenue targets critically hinges on industrial performance.

An expected industrial growth of six per cent in FY’04 together with an industrial inflation of about 4.5 per cent translates into a nominal industrial growth of 10.5 per cent, much higher than 9.01 per cent in FY’03.

The budget has implicity assumed a real industrial growth of about 6.5 per cent in FY’04.

According to experts, the manufacturing sector has improved its performance mainly on account of buoyancy in cyclicals. Basic metals, rubber, plastic, petroleum, coal products and transport are sectors witnessing high growth rates.

The growth in transport equiptment and basic metals is attributed to the boom in construction activity, both housing and road construction. Machinery and equipment, after staging a not so impressive perpormance in the first six months of the current fiscal started showing a pick up in July,

Paper, wood and jute products have also witnessed a buoyant growth during the first five months. A notable feature, however, is that different industries are taking turns to accelerate during the on-going industrial revovery.

Public finance experts say the department of revenue needs to keep a close watch on these developments and formulate its strategies of revenue mop up accordingly. (UNI)

National grid to transmit 23,000 Mw electricity by 2012

MUMBAI, Nov 16: The completion of the second phase of national grid would enhance the total inter-regional transmission capacity to 23,000 Mw electricity by the year 2012.

About 10,000 Mw power needs to be transferred to northern region, about 5000 Mw to western region and about 8,000 Mw to southern region from eastern and north-eastern region by the year 2012, Mr S C Misra, Director (projects), Power Grid Corporation of India Ltd (PGCIL) said while presenting a paper on ‘transmission and distribution’ at four-day ‘Power India 2003’ conference ended this week-end.

Mr Misra said that out of the total target capacity of trasmitting 23,000 Mw, 8,000 Mw has already been achieved. He said that there is a need to establish bulk power transmission system by integrating five regional grids - northern, southern, western, eastern and north-eastern - leading to the formation of national grid.

Stating that power grid has been entrusted with the task of building national grid, the PGCIL Director said that the first phase has already been completed by connecting all the regional grids with asynchronous links.

In the second phase, he said that a high capacity bipole line have been planned to facilitate transmission highways’ across the regions. He said that a 2000 Mw capacity of 1500 Km long bipole line from Talchar in Orissa to Kolar in Karnataka has been completed. Similarly, a 400 Kv line between eastern and western regions has been established for synchronous inter-connections between these two regions, he said.

The power Grid Director said, "power grid has also envisaged high capacity 400 Kv AC transmission lines right from Tala in Bhutan to Delhi.

Referring to distribution system, Mr Misra said that distribution sector is the weakest link in the entire power chain. The investment would not come into power sector untill and unless the distribution sector is put in shape.

He said that the financial health of State Electricity Board (SEBs) is a great concern, with its cummulative annual loss approximately Rs 26,000 crore equivalent to about 1.5 per cent of Gross doDestic Product (GDP). "Out of total energy generated only 55 per cent is billed and only 41 per cent is realised", he said.

The Power Grid Director said that the gap between average revenue realisation and average cost of supply has been constantly increasing. "Present distribution system is characterised by unacceptably high T D losses, poor quality and unreliability of supply, tardy record in billing and revenue collection", he said.

On the power sector reforms, Mr Misra said that Union Ministry of Power has appointed power grid as consultants for achieving the objectives of Accelerated Power Development and Reform Program (APDRP).

"Power grid is assisting 47 circles in 18 states of the country for improvement of their sub-transmission and distribution system", he said. (UNI)

Inflation again breaches 5 per cent mark

NEW DELHI, Nov 16: All round increase in prices pushed up the rate of inflation 0.05 per cent in the week ended November 1e which crossed the five per cent mark to settle at 5.01 per cent.

The inflation rate was at 3.33 per cent during the same period last year.

The rate is higher than the prediction of the Reserve Bank of India in its mid-term credit policy and expectation of the Government. The Central Bank has predicted the rate to be between 4-4.5 per cent this fiscal while Chief Economic Advisor to the Finance Minister Ashok Lahiri had forecast that it would fall below 5 per cent for the current financial year.

The Wholesale Price Index (base 1993-94) rose 0,2 per cent in the week ended November 1 to 176.1 per cent during the week.

The index for fuel, power, light and lubricants rose by 0.1 per cent to 253.3 from 253.0 for the previous week due to increase in prices of Naptha by three per cent.

The index for primary articles rose by 0.4 per cent to 183.6 due to increase in index for food and non-food articles in this category by 0.3 per cent and 0.8 per cent. Index for food articles was 185.9 because of increase in prices of ragi and eggs by three per cent, poultry chicken by two per cent and wheat, fish-marine, bajra and barley by one per cent. However, prices of jowar declined by two per cent, and moong and maize by one per cent.

For the non-food category among primary articles the index was 183.1 due to increase in prices of syabean and raw cotton by three per cent, tobacco, rape and mustard seed, gingely seed and copra by one per cent. The prices of cotton seed, however, declined by one per cent.

The index for manufactured products rose by 0.1 per cent to 159.3 and in this category index for food products was up 0.3 per cent to 167.1 due to 11 per cent increase in prices of skimmed milk, eight per cent increase in prices of barn of all types. Prices of solvent extracted groundnut oil in this category were up by five per cent, rice barn oil by three per cent, imported edible oil, khandsari and hydrogenated vanaspati by two per cent and atta, cotton seed oil, maida, sooji, coconut oil and soyabean oil by one per cent.

The index for ‘beverages tobacco and tobacco products’ rose by 0.4 per cent to 208.2.

Increase in prices of polyster yarn by seven per cent, cotton grey cloth by two per cent and polyster staple yarn by one per cent increased the index for ‘textiles’ by 0.5 per cent to 129.9.

Index for paper and paper products rose by 0.1 per cent to 147.4 due to increase in prices of duplex board by three per cent. The index for leather and leather products rose 0.4 per cent to 147.4. Index for chemicals and chemicals products rose 0.1 per cent to 176.5 and index for machinery and machine tools rose 0.1 per cent to 132.7.

The final inflation rate for the week ended September 6 stood at 4.59 per cent as against 4.29 (provisional) and the final wholesale price index during the week stood at 175.4 as against 174.9 (provisional). (UNI)

Market seen volatile with key players in contrasting pattern

MUMBAI, Nov 16: Share prices are expected to continue volatile swings in the week with the activities of foreign and domestic funds showing divergent trends, taking major indices on a roller coaster ride, brokers said.

The Bombay Stock Exchange (BSE) sensex seen in a wide range of 4,800-5,000 level, amid strong portfolio buying at lower levels and profit booking at higher levels, analysts at the asit C Mehta intermediaries said.

Many of the traders may continue to liquidate positions in the derivatives segment due to imposition of additional margins by NSE. While domestic institutions could continue offloading shares due to redemption pressure, the level of foreign fund inflows would be the key factor for the market.

Foreign funds have shown signs of picking up their investment again towards the weekend after a brief slow down. FIIs injected a whopping Rs 368.50 crore into the market on Friday, after their net investment touched a low of just at Rs 56.60 crore on Thursday that panicked the market players.

In the week ended November 15, the bench-mark BSE sensex closed 59.81 points (1.2 per cent) lower at 4,911.76 points after touching a high of 5,059.98 points on Wednesday and dipping to a low of 4.854.L16 on Friday.

The SP CNX nifty of the National Stock Exchange (NSE) also shed 29.25 points or 1.8 per cent at 1,562.80.

Volumes on both the bourses have registered a decline, with most of the sectors losing ground in broad-based selling.

Market stayed firm initially in the previous week, turned edgy and lost ground later after traders started liquidating positions in the derivatives segment.

The sell-off came in two trading sessions on Thursday and Friday after nse demanded ad-hoc margins from brokers holding huge positions in derivatives, pulling down the sensex by 140 points.

The dwindling foreign fund inflows in the mid-week, the main driving factor for the recent market rally, also created some nervousness in the market,

The risk containment mechanism introduced by the capital market watchdog Securities and Exchange Board of India (SEBI), along with the country’s two premier exchanges—the BSE and NSE— which demand margins on regular basis from members, forced many players to cut their exposure in the market.

Though, the market staged a moderate recovery on Saturday’s two-hour special trading session, the outlook remains cautious, brokers said.

From last Monday, the BSE barometer sensex underwent a revamp with five new stocks ONGC, tata power, HDFC bank, Wipro and Bharti tele-ventures replacing HCL tech, Nestle, Castrol, Colgate and Glaxosmithkline pharma.

Of the new entrants, Tata power and Wipro posted gains in the first week while other three slipped. Tata power gained 7.3 per cent at 264.90 in the first week while Bharti tele-ventures fell to Rs 84.75 compared to Rs 85.05 in the previous week.

Bucking the overall bearish trend, shares of shipping companies were the star performers of the week, with SCI surging 13 per cent to Rs 153.95. Shares of hotel companies like Indian hotels, Eih and hotel Leela ventures were also in demand on expectation of increase in occupancy levels. (UNI)

Kanara industrial fair from Nov 27

MANGALORE, Nov 16: The three-day ‘Kanara industrial fair-2003,’ the first national vendor development programme, will be held at the Baikampady industrial area here, about 15 Km from here, between November 27 and 29.

Kanara Small Industries Association (KSIA) president K Jayaraj Pai told reporters at the venue of the event last evening that a total of 200 stalls would be set up at the fair, with participation from public sector undertakings, banks and small and tiny industries.

The expo is being jointly organised by KSIA, the small industries services institute and the department of industries and commerce.

Vendor development meets and one-to-one interactions would be facilitated between small-scale units and various public sector organisations, he said.

Technical seminars would also be organised on topics such as intellectual property rights, technology upgradation and export opportunities.

The main objective of the fair was to forge links between the large, small and tiny sector enterprises, enable mutual trade and technology transfer and identify entreprenuers for outsourcing, Mr Pai said. (UNI)

BHEL bags contract for setting up 500 Mw unit in K’taka

TIRUCHIRAPALLI, Nov 16: The public-sector Bharat Heavy Electricals Limited (BHEL) has won a contract for setting up a 500 Mw unit at bellary thermal power project in Karnataka.

A BHEL release here today said that the contract, won in the face of stiff international competition, is valued at Rs 1619 crore. The contract was awarded by Karnataka Power Corporation Limited (KPCL) on Erection, Procurement and Commissioning (EPC) basis.

Slated for synchronization in a record time of 36 months, this will be the first 500 Mw power generating set in Karnataka and will add nearly ten million units everyday to the grid of the power deficit state, the release said.

BHEL’s scope of work in the RPC contract envisages designing, engineering, manufacturing, supplying, testing and erecting and commissioning of the main plant, besides the entire civil work.

The release further said BHEL Tiruchirapalli unit will supply the boilers, while BHEL’s Hyderabad unit the turbine generators, coal mills and heat exchangers.

BHEL’s electronics division, Bangalore, will supply the state-of-the-art controls and instrumentation and the Bhopal and Jhansi plants will supply the electricals. BHEL’s Ranipet plant will manufacture and supply the electrostatic precipitators. The contract will be executed by BHEL’s power sector (southern region).

In Karnataka, the entire installed thermal generating capacity of 1470 Mw at Raichur TPS, has been contributed by BHEL. All the BHEL-built 210 Mw sets at the power station were performing exceedingly well at a very high Plant Load Factor (PLF) of over 83 per cent against the national average of 72 per cent, the release added. (UNI)

Trade bandh in Delhi today against tin

NEW DELHI, Nov 16: Traders in the capital will keep shutters down tomorrow in response to a Delhi trade bandh call given by the Confederation of All India Traders (CAIT) and Delhi Vyapar Mahasangh (DVM) in protest against the pressure being exerted on them by sales tax officials to fill the Trade Identification Number (TIN) forms.

The TIN forms have been issued by Delhi sales department and date for filling the forms has been extended upto December 12, 2003. Earlier, the deadline ended on October 31, 2003.

The decision to observe ‘trade bandh’ was taken at a meeting after a unanimous decision taken by the representatives of over 100 trade associations of Delhi.

Criticising the lethargic attitude adopted by the Delhi Government, CAIT secretary general Praveen Khandelwal said that despite the assurances given by the Delhi Chief Minister Shiela Dixit and Finance Minister Mahinder Singh Sathi, the Sales Tax Department is putting undue pressure on traders to fill TIN form.

The pressure has led to anguish and resentment among the trading community, he said.

DVM president Manohar Lal Kumar stated that sales tax officers are visiting every market and pressing traders to fill ten-page long tin form and a minimum quota for getting the forms filled has been fixed for the tax officials.

Mr Kumar regretted that the department is not giving statutory forms for sales tax returns for the ended quarter and is not accepted any documents as they are suggesting to fill TIN form first, as a precondition.

The traders have decided not to fill the form and will fight tooth and nail to stop its implementation.

Mr Khandelwal said that if the information required in the tin form is leaked to the anti-social elements, the hardships for the traders can be beyond imagination. The leakage can result even upto black mailing and other happenings. (UNI)

IT companies to increase manpower by as much as 70 p c

NEW DELHI, Nov 16: Expectations of worldwide pick-up in IT spending and better than expected quarterly results have prompted Indian technology companies to go on a hiring spree with some contemplating as much as 70 per cent increase in manpower this year.

Research firm Gartner inc has said that overall it spending has bottomed out and 2004 and 2005 will see a minimum of strong single-digit growth over 2003 levels.

With other studies also painting rosy picture of pick-up in it spend and this being reflected in revenue growth of above 20 per cent reported by major companies, Tata Consultancy Services (TCS), Wipro, Infosys, Satyam and HCL technologies have now started hiring in thousands.

The biggest among the Indian IT companies and the first one to touch one billion dollars in annual revenues, TCS, has plans to add 5,000 consultants to its existing workforce of 25,000 by March 31, 2003.

Wipro, though not the one to predict future hirings, has added 4396 employees since March 31, 2003. Most of the new hirings are for Wipro’s business process outsourcing subsidiary - spectramind. The company’s manpower now stands close to 25,000 and as revenue continues go up by 29 per cent year-on-year, which it did in September quarter to touch Rs 1,374 crore, it will need to add people in hordes.

Infosys, which along with Wipro is within a striking distance of one billion dollars in annual revenues and also grew by 29 per cent in September quarter to 1,134.75 crore, plans to add 3,000 more in September 03-March 04 period. The company’s manpower stood at 15,356 on March 31, 2003 and in first quarter of 2003-04 it added 1,739 employees and in second quarter it took on 2025 hands. If infosys meets its projections its manpower in FY 2004 will go up be 44 per cent over the figure of 15,356 at the end of 2002-03. (UNI)

IFC exits from committed portfolio in India upto 1 bln dlr

MUMBAI, Nov 16: The International Finance Corporation (IFC), an investment arm of the World Bank, has exited from its committed portfolios in India to the extent of 1 billion dollars in the last eight months of this calendar year.

Till recently, IFC committed portfolio in India was 1.8 billion dollars. Of this, finance and insurance stood at 30 per cent, utilities 25 per cent, chemicals 17 per cent, non-metallic mineral production 12 per cent, funds (7 per cent), textiles (7 per cent), information 1 per cent, and oil, gas and mining 1 per cent.

Having exited as much as 1 billion dollars, active portfolio of IFC in India now stands at 800 million dollars, said Mr Daniel Crisafulli, investment officer of IFC, who was recently in India this week-end, to a UNI poser.

Even with this active portfolio of 800 million dollars as of now, India continues to be the IFC’s sixth largest country of operations. As part of the larger focus on the innovative application of technology that offer potential for important contributions of economic development, IFC has unveiled its plans to raise investments in India to 1 billion dollars in the next two years in Information, Computer and Telecommunications (ICT) sector.

In effect, IFC though exited from commited portfolios will be pumping it back into the country, this time specifically on the ICT sector. In this context, Mr Cristafulli said IFC has plans to fund the telecom sector, small and medium businesses. "In fact, IFC was willing to take greater exposure in the country provided it gets quality investment proposals," he added.

IFC has recently entered into an MoU with the Confederation of Indian Industry (CII) to enable the two to work together, exchange news and share experiences, participate and host events to promote sustainable private sector development.

Among IFC’s recent investments in India, the corporation has supported manufacturing companies positioning themselves for international competitiveness such as disk maker moser baer, cosmo films and steel product maker Usha Beltron.

The World Bank’s investment arm has also supported innovation in financial services, including expansion of comsumer and housing finance for lower income groups through Mahindra financial services and Sundaram home finance.

It has provided technical assistance and equity finance to Samruddhi, a microfinance institution formed specifically to provide loans to farmers and small non-farm enterprises in rural areas. (UNI)