NEW DELHI, Aug 19: Uptrends in electricity tariffs triggered a moderate 0.26 per cent rise in the annual rate of inflation to touch 5.22 per cent during .......more
NEW DELHI, Aug 19: Foreign investors do not place much weightage on incentive schemes or tax benefits, but rather, on systems to enable ....more
MUMBAI, Aug 19: The per capita electricity consumption should increase by ten per cent to achieve seven to eight per cent growth in Gross Domestic .....more
NEW DELHI, Aug 19: The annual inflation rate rose by 0.26 percentage points to 5.22 per cent in the week ended august four on account of a near ....more
MUMBAI, Aug 19: The main income of major financial and investment companies during the years of 1999 and 2000 was influenced by higher...........more
MUMBAI, Aug 19: The interbank call money rate ruled in a easy zone of 6.90-7.10 per cent on comfortable liquidity ..........more
SHIMLA, Aug 19: The Himachal Pradesh Government has adopted a two-pronged ..........more
NEW DELHI, Aug 19: CBI has registered a case against Usha India Ltd Chairman Vinay Rai, Vice Chairman Anil . ..........more
NEW DELHI, Aug 19: Foreign investors do not place much weightage on incentive schemes or tax benefits, but rather, on systems to enable smooth project implementation and business operations at the ground level, reveals a study conducted by the Federation of Indian Chambers of Commerce and Industry (FICCI).
The FICCI study, on problems of FDI project implementation at the state level, involved extensive primary and secondary research, including a survey of 300 foreign investors, one-to-one meetings with investors and state-level institutions.
The study mentioned that centre-state duality is the key hurdle to FDI project implementation at the state level.
FICCI’s earlier study on the experience of Foreign Direct Investors in India, found that policy issues related to FDI have improved greatly. However, it pointed out that ground-level hassles obstruct smooth project implementation.
Foreign investors, policy makers, senior Government officials all concurred that the plethora of central and state laws create a situation that is hugely confusing and cumbersome.
With reference to centre-state duality some of the specific legal aspects which cause confusion and obstruct project implementation at the state level are food and drugs clearances, customs clearances, drugs and cosmetics licences, labour laws, licence under the boilers act, environmental clearances and the standard weights and measures act.
Environmental clearances are a case in point. The three-tier system of centre, state and control boards often result in total confusion, the study stated.
With the absence of transparent systems and procedures, foreign investors are often left to pursue long lists of approvals and clearances, coordinate with multiplicity of Government agencies, and face ad hoc inspections.
The study mentioned that while customs clearance is a central act, its impact is felt at the project implementation level in the states. Investors have been faced with ad hoc, disruptive, lengthy inspections of imports by Government officials at the state level.
In order to report grievances, it took investors in Maharashtra six months to trace the officer in charge who was based in Calcutta. Accountability, clear reporting structures and transparency need to be injected into the system, it added.
Weak systems and procedures, a virtual absence of databases and project monitoring, and a lacuna in the mindset of officials are some of the other key obstacles to project implementation, FICCI study shows.
For instance, most states do not have a comprehensive list of approvals and clearances required for projects, relying on a project-specific approach. This gives way to ad-hocism rather than encouraging a systematic method. Some states are far ahead of others in terms of their investor-friendliness, such as Gujarat.
But the problematic areas identified are generally widely prevalent.
The Centre state duality needs to be ironed out to enable investors to focus on business issues rather than rules, regulations and logistics. Concrete measures are required to tackle each of these hurdles.
FICCI’s study arrives at specific recommendations to facilitate FDI project implementation at the state level.
Clearly, unless the operation level improves, fresh FDI inflows, which currently stand at 2.34 billion US dollars for the year 2000-2001, will be hard to come by, the FICCI study concludes. (UNI)
MUMBAI, Aug 19: The per capita electricity consumption should increase by ten per cent to achieve seven to eight per cent growth in Gross Domestic Production (GDP), according to ninth five year plan report of the Planning Commission.
This would require availability of sufficient supply of power at a reasonable cost which in turn will necessitate an efficient and and highly productive power sector. Higher power tariff and perennial shortage of power coupled with global competition have led to small scale domestic industries shutting down their business. About 40 per cent of small scall enterprises in Gujarat have close down their bossiness.
To minimise the gap between demand and supply, radical reforms in the power sector are required. In addition, the Indian economy is getting integrated with the global economy and so consumers must get benefits from competition.
In this era of globalisation and liberalisation electricity has played an ubiquitous role because it touches every segment of the economy and the life of every individual. It is a crucial component of infrastructure, at the same time it is highly capital-intensive. The National Development Council (NDC) in its policy report on power sector reform had recommended organisatinal reforms in the sector at the state level consisting of commercialisation and unbundling of generation, transmission and distribution.
The report had also recommended freeing them from Government control, allowing them to implement new projects on a joint-venture basis with the private sector and progressive phasing out of subsidies to agriculture consumers with a minimum tariff of not less than 50 per cent of the average cost of supply.
However, the Centre has formulated policies to attract private investments mainly in power generation by offering a guarantee rate of return on equity, counter guarantees from the Government and the tax-exempt status.
In response to these policies, more than 250 proposals were submitted by Independent Power Producers (IPPs). But implementation of private sector project were delayed following high capital cost and the potential foreign exchange liabilities of the Government on account of sovereign guarantees. Initially these projects were awarded on the basis of Memorandum of Understanding rather than through competitive bidding, the capital cost tended to be higher than those of public sector projects, which resulted into higher tariff charged by the IIPs.
As per the statistical date since independence there has been higher emphasis on power generation as compared to Transmission and Distribution (T&D) leading to lack of transmission infrastructure for enabling flow of power from surplus to deficit areas. In first five year plan expenditure on T and D was 133 percent of the generation, second five year plan it was 76 percent, third five year plan it was 58 per cent, fourth it rose to 92 per cent, fifth plan it was 66 percent and sixth five year plan it was 52 per cent. (UNI)
NEW DELHI, Aug 19: The annual inflation rate rose by 0.26 percentage points to 5.22 per cent in the week ended august four on account of a near two per cent increase in the price of fuel items due to a whopping five per cent increase in electricity price.
The inflation rate based on Wholesale Price Index (WPI) for all commodities (base: 1993-94 = 100), which was stuck in the previous week at 4.96 per cent, rose to surpass five per cent mark, even as manufactured products became cheaper. The index stood above six per cent in the corresponding period in the previous year.
Close on the heels of point-to-point inflation rate, wpi rose by 0.3 per cent to 161.4 during the period compared to 160.9 in the previous week. The index was 153.4 a year ago.
The final WPI as well as the final inflation, however, remained unchanged at their respective provisional levels of 160.8 and 5.44 per cent.
The All India Consumer Price Index for Urban Non-Manual Employees (CPI-UNME) rose to 391 points in July as against 386 in June due to rise in house rents and price of vegetables and the index was 370 in July 2000.
Data based on samples from 59 select urban centres showed CPI-UNME was up due to a 4.37 per cent hike in house rentals and a 4.77 per cent rise in vegetables prices.
Primary articles became costlier by a mere 0.1 per cent and fuel items by 1.7 per cent, while manufactured items fell by 0.1 per cent during the period.
The index for primary articles’ group rose to 168.7 from 168.6 due to costlier food articles. The index was 163.7 in the previous year.
Food articles’ group index was up 0.3 per cent to 176 from 175.5 on account of higher prices for fish-inland (nine per cent), jowar (three per cent), bajra, ragi and moong (two per cent each) and rice, maize, arhar, masur, urad and fruits and vegetables (one per cent each).
Prices, however, declined in the case of fish-marine and poultry chicken (six per cent each), tea (four per cent), pork (three per cent), eggs and condiments and spices (two per cent each) and gram (one per cent).
The index for non-food articles’ group fell sharply by 0.6 per cent to 154.3 from 155.3 due to cheaper raw jute (nine per cent), raw cotton, gingelly seed and fodder (two per cent each) and groundnut seed (one per cent), while prices rose for raw rubber (six per cent), copra and raw skins (two per cent each) and raw hides (one per cent).
Fuels, power, light and lubricants’ group index rose to 226.1 from 222.3 due to a five per cent rise in the price of electricity. The index was 194.6 in the previous year.
The index for manufactured products’ group, however, fell to 144.4 from 144.5 on account of fall in the price of food products, textiles and basic metals. The index was 140.6 a year ago. (PTI)
MUMBAI, Aug 19: The main income of major financial and investment companies during the years of 1999 and 2000 was influenced by higher returns on investment in the capital market, according to the Reserve Bank of India (RBI).
A study conducted by the statistical analysis of the RBI on the performance of financial and investment companies revealed that the growth in main income was dominated by high growth of 163 per cent in main income registered by share trading and investment holding companies during the year 1999-2000.
The main income of the selected financial and investment companies increased by 16.6 per cent during the year 1999-2000.
While the growth of around 23.6 per cent in the case of loan finance companies was sustained during the year, the main income of hire purchase companies declined by 6.5 per cent as against an increase of 5.5 per cent in the previous year. Leasing and diversified companies registered a negative growth rate in main income during the year.
The study is based on the audited annual accounts of 805 companies in the private sector which includes two giants like ICICI limited and HDFC Limited. The selected companies are classified into four major grounds—share trading and investment holding, loan finances, hire purchase finance and leasing companies.
On the expenditure side, these selected companies had made higher provisions for bad debts which rose by 100.4 per cent in 1999-2000 as against 130.7 per cent in the previous year mainly due to the implementation of the prudential norms as prescribed by RBI for the non-banking financial companies.
The growth in total expenditure of the companies increased by 7.7 per cent while interest payments rose by 1.1 per cent which constituted nearly 45 per cent of the total expenditure. The rise of 18.6 per cent in the employees’ remuneration during the year was higher than the increase of 11.6 per cent in the previous year.
The selected companies raised funds to the tune of Rs 4,008 crore from various sources as against Rs 3,137 crore raised in the previous year. The total liabilities of these companies also increased by 10.2 per cent to Rs 43,485 crore in which borrowing continued to be the single major component constituting nearly 60 per cent of the total liabilities.
The dividend rate at 8 per cent was highest for share trading and investment holding companies in 1999-2000. These rates for hire purcahse, loan finance and leasing companies were 7 per cent, 4.1 per cent and 3 per cent respectively. The assets structure of these companies remained almost similar with receivables (47.8 per cent), investments (28.3 per cent) and net fixed assets (10.7 per cent) remaining the major constituents of total assets. (UNI)
MUMBAI, Aug 19: The interbank call money rate ruled in a easy zone of 6.90-7.10 per cent on comfortable liquidity during the week ended August 17.
Call rates opened at 6.85-7.00 per cent, hovered around the bank rate throughout the week on ample liquidity in the system. Major lending banks with surplus funds were offering funds. Since the central bank has completed a major portion of its borrowing programme, there was no fear of a fresh auction in the near future.
However, with three intervening holidays during the current fortnight, players were maintaining higher positions though it did not have any adverse impact on the rates.
According to credence, the cushion of sufficient funds available through the central bank’s refinance facility too helped cap the call rates from rising sharply. Refinance outstanding at 7 per cent bank rate touched a high of Rs 4,400 crore during the week compared to Rs 1,698 crore at the start.
In the coming week "inter bank call money is expected to trade slightly higher at 7.00-7.25 per cent in the second week of the reporting fortnight due to the two intervening holidays as banks will have to step up their daily borrowings," credence stated. Government securities continued its rally, though trading remained dull in the mid-week as market players were very cautious in the absence of any indication regarding interest rate cut.
The short and medium securities moved up initially during the week as a spill over from the last week following the Governor’s statement, which helped to bid up the market. The comfortable liquidity and market talk that the central bank could lower the repo rate from 6.5 per cent also buoyed sentiment.
The higher WMA figures of over Rs 15,000 crore for week ended August 3, too did not affect the sentiment as players had been expecting RBI to transfer funds to the Central Government.
However, soon with the yields close to their historic lows (10 year yield at 9.24 per cent) trading took a backseat as traders were unsure whether the liquidity driven rally could continue as there are no signs of a bank rate cut in the near future to sustain the current yield levels. Volumes too dropped as most players stayed to the sidelines unable to take a view on the market in the absence of any fresh leads.
Again, bond prices zoomed up by 30-40 paise on Friday following news that the Central Government has received a dividend payment of rs 9350 crore from RBI this week. Players started buying heavily in the market betting that the entire wma balance would now be the Torporate bonds market remained dull during the week, completely wiped off and the Central Government will not come to raise money from the market till at least till the end of the month.
Andhra Pradesh, Madhya Pradesh and West Bengal State Governments together raised Rs 830 crore from the market through the auction of 10 year papers with the weighted average yields at around 9.50 per cent.
The yields at the 91-day T-bill auctions dropped further to 6.90 per cent from 6.98 per cent in the last week.
In the nextweek, Credence stated, "hopes of a 0.25 per cent cut in the US fed rate at the fomc meet next week should trigger further buying support in the market. The comfortable liquidity and further inflows of over Rs 10,000 crore in the remaining part of the month too should help maintain the uptrend in prices. But with the outlook in the near term quite dull we do not expect the market to sustain any further rally as players will book profits at slight uptick." tracking the uncertain Government securities market. The market waits for direction in a confused scenario, where the G-SEC market has remained sluggish in the absence of fresh leads.
Three long-term issues opened in the primary market till the middle of the week. Andhra Pradesh Power Finance Corporation issue hit the market with an issue size of Rs 300 crore and an unspecified greenshoe and Himachal Pradesh Road and Other Infrastructure Development Corporation Ltd., with a total size of Rs 150 crore. The third issue is from ICICI with a total size of Rs 800 crore and is rated AAA. Tourism Finance Corporation of India will open its Rs 125 crore unrated bonds issue next week.
The secondary market saw more action in the short-term bonds than the medium to long-term securities as players are unwilling to take long-term position.
The primary commercial paper market witnessed relatively better activity during the week inspite of the yields remaining at all time lows and still going down. This sudden interest in the 3-month instruments can be mainly attributed to the investments made by the liquid mutual funds, who are sporadically putting the funds they receive, in short-term investment instruments as players are unwilling to take long-term positions in corporate bonds or the uncertain Government securities market, the Credence report added. (UNI)
SHIMLA, Aug 19: The Himachal Pradesh Government has adopted a two-pronged policy for development of tea industry in the state.
The policy aims at improving tea production from tea gardens and encouraging its cultivation in non-traditional and new areas, according to an official spokesman here.
The Government has also chalked out an ambitious plan for production of bio-tea in Kangra and Chamba districts. With private investment of Rs 130 crore, bio-tea will be produced in 2,000 hectare land under the scheme.
Bio-tea is quite different from the normal tea as no pesticides, insecticides and fertilizers are used in the cultivation of the former.
According to a report of an expert committee, 7,700 hectares area in Chamba, Kangra and Mandi districts has been identified as conducive to tea cultivation. The Government has decided to handover this area of land to industrialists on lease for tea cultivation at rates at par with those prevailing in West Bengal and Assam.
At present, tea production is confined to only small and marginal farmers in the state. These growers are being encouraged to adopt new technology to raise tea production from about 800 kilograms per hectare at present to 3,000 kilograms per hectare, the spokesman said.
The Government has been providing various incentives for development of tea. It gives subsidy to farmers on plant protection material, insecticides, agricultural implements and fertilizers. Besides, the Tea Board of India has been also providing incentives to the farmers under various schemes.
The Government has established a tea nursery at Palampur in Kangra district which produces two lakh plants annually. More than 1.57 lakhs plants were distributed to tea growers last year. Exhibition plots have been established in Chamba, Mandi and Kangra districts and 50 such plots developed in traditional tea growing areas.
At present, 2300 hectares area is under tea plantation in the state. The Government has fixed a target to enhance the tea production from 17 lakh kg to 35 lakh kg in the next ten years, the spokesman said.
The Government had announced tea policy last year and its main objectives were use of advanced technology in tea production, investment by private and corporate institutions, proper utilisation of wasteland, to improve quality of tea and to provide maximum employment opportunities through tea cultivation.
The spokesman said the first tea plant was traced in Assam in 1823 and the first tea sapling was planted in Kangra Valley in 1845. Congenial climatic conditions and soil helped increase of tea production in the Valley.
When first tea company came into existence in 1850 Kangra tea was exported to London, Barsilona and Amersterdom and earned name in the international market.
The total area under tea in Kangra Valley was about 9537 acres in 1892. Out of this tea gardens covering an area of 3400 acres belonged to European people, whereas 6137 acres area was in the possession of local people. At that time Ladhak, Afghanistan and Tibet were also proving to be good markets for Kangra tea.
But an earthquake in Kangra Valley in 1905 had played havoc with the then tea industry when most of tea gardens vanished. Efforts to rejuvenate the tea industry in Kangra Valley started in sixties.
The spokesman said Kangra tea was similar to the tea grown in China and Taiwan. Its leaves have a unique flavour as found in the Darjeeling tea and matches the golden colour of Assam tea. At present, Kolkata is the main market of Kangra tea having four varieties named after famous Kangra paintings viz "Darbasi", "Bahar" and "Malhar". (UNI)
NEW DELHI, Aug 19: CBI has registered a case against Usha India Ltd Chairman Vinay Rai, Vice Chairman Anil Rai and two other top executives of the company for allegedly cheating the Industrial Finance Corporation of India (IFCI) of Rs 44.75 crore during 1997-2000 by misutilising the funds received from it.
The FIR registered by CBI’s Special Investigation Group (SIG) on August one also named the company’s Managing Director M C Gupta, Director J R Gupta, Suresh Gupta, Sohan Lal Garg and certain officials of IFCI.
Usha India Ltd, which was earlier known as Usha Rectifier Corporation Ltd, manufactures electronic equipment at its factory located at Faridabad in Haryana.
The accused Usha India executives allegedly entered into a criminal conspiracy between themselves and some officials of IFCI and others with a view to causing a wrongful loss to IFCI and a corresponding wrongful gain to themselves, the FIR said.
In pursuance of the said conspiracy, Usha India approached IFCI for sanction of rupee term loan and investment in the non-convertible debentures in 1997 for expansion of their existing unit at Faridabad for manufacture of diodes and thyristors by installing some balancing machines, CBI alleged. (PTI)