Centre weighs bank pension rerun
Militancy may trip NE power projects
Tata Tea enlarges brand repertoire
Flurry of small car launches from auto majors on a

 
 
CENTRE WEIGHS BANK PENSION RERUN 
 
 
FROM NITHYA SUBRAMANIAN
 
New Delhi, Jan 16: 
The government is considering the option of re-introducing a pension scheme either for all employees of public sector banks or at least for those who opt for the voluntary retirement packages (VRS)— something that will make the golden handshake offers more attractive.

The move comes after the brief launch of a pension scheme in 1993 when 50 per cent of the existing employees opted for it. Prior to 1993, bankmen could only subscribe to the contributory provident fund (PF) scheme.

Unions now want banks to launch the pension scheme again for the benefit of employees who could not opt for it the first time around. However, those who joined after 1993 automatically availed of the pension facility.

There is a feeling in the finance ministry that the planned VRS offers in banks may not be attractive — and, hence, not very effective — unless employees who joined before 1993 and opted for the provident fund scheme are given the pension choice.

Meanwhile, the ministry is looking at various VRS options. It had written to various bank chiefs in November and sought their views on the introduction of a package similar to the one offered by the department of public enterprises.

A wide range of proposals from banks are now on the table. Some, like Indian Overseas Bank, say the package should be based on two months’ salary for the number of years remaining in service.

Others like Punjab and Sind Bank want the benefits to based on the number of years already put in by an employee. Then, there is another group which feels the package should be a happy blend of both.

But, there are few issues to be sorted out regardless of which option is picked up. For instance, offering benefits on the basis of years already put in means the scheme will appeal mostly to employees at the higher end of the age-profile.

Conversely, it is the younger people who would opt for a scheme that takes into account the remaining years on the job. Therefore, the ministry is veering around to the view that a combination of the two parameters — with a ceiling both ways — is a better proposition, sources said.

The ministry also feels making the VRS package very attractive will cost banks too much and, as a flip side, may tempt even those employees whom the bank wants to retain.

In the light of these problems, banks have suggested that they be given the sole discretion in deciding whether or not they should accept a VRS application. In the absence of that power, there is a possibility that banks will lose good people. Only, a clear-cut criteria on which such decisions are made, should be laid down.

Banking chiefs have opposed bans on recruitment and promotions, and asked for powers to fill vacancies caused by VRS offers. They feel the new recruitments would have to be made largely in areas like information technology, computerisation, foreign exchange — all of which are specialised and skill-oriented.

The various voluntary retirement packages have to be funded either from banks’ own resources, or by taking loans from other banks or external agencies.

It could also be done by issuing bonds, with or without government guarantees, to those who accept VRS, and offering them loans against these instruments. The government has, however, ruled out a budgetary support or a soft-loan option.    


 
 
MILITANCY MAY TRIP NE POWER PROJECTS 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, Jan 16: 
Militancy in the north east is likely to hinder the progress of several power generation projects.

The National Hydro Electric Power Corporation (NHPC) has threatened to pull out from a 105 MW power project, since the government has failed to provide adequate security to its employees working in the militant-infested north eastern states.

Following the recent killing of S.C. Sher, the chief engineer of NHPC’s Lok Tak power project, NHPC officials have demanded increased security and have even threatened to abandon the project sites.

The corporation has also threatened to halt its study of the 20,000 MW hydro power project in Dihang and Subansiri.

In a letter to Prime Minister Atal Behari Vajpayee and to NHPC chairman and managing director, the NHPC Officers Association has urged the management “to desert the Lok Tak and Lok Tak downstream projects immediately. In addition to this, plans for taking up any other project in the north east should also be shelved immediately.”

Currently the Lok Tak project employs about 1,200 people, of which 600 hail from outside the north east.    


 
 
TATA TEA ENLARGES BRAND REPERTOIRE 
 
 
BY SUTANUKA GHOSAL
 
Calcutta, Jan 16: 
Tata Tea will soon embark on a brand expansion drive as part of which it will introduce two new products targeting the low and top ends of the market. The launches will come sixteen months after its Agni brand hit the shelves.

Tea’s aim is to grow consistently in the packet tea segment. We have plans to launch at least two brands this year,” company managing director S.M. Kidwai told The Telegraph. The company sells 75 per cent of its tea in packets, and is gearing up to consolidate its position in the value-added market.

“We would like to launch the brands in the loose-tea converter and premium segments,” he added. Tata Tea, like all other tea companies, has taken a beating in its bottomline due to falling production and lower price realisations.

“The per kg cost of production is much higher than the price realisation. However, in the third quarter ended December 31, the company has been able to recover substantially. Both production and sales have gone up,” Kidwai added.

“The appropriate marketing and product-mix has helped the company achieve substantial volumes in the segment. A strong dealer network and retail base helped establish the brands on a strong footing,” the Tata Tea chief said.

Brands like Kanan Devan, Gemini and Chakra Gold are extremely popular in the markets of the south. The company’s Lucky Cup brand, which is aimed at the premium segment, is also doing well, Kidwai said.

“No foreign brand can match us in the domestic market. Apart from launching new brands, we are also planning to develop the Agni brand further,” Kidwai said.

However, Tata Tea has suffered at south Indian auctions where the prices are ruling as low as Rs 42 per kg. “We sell about 6-7 million kilograms of tea at these auctions,” he added.

The introduction of uniform sales tax in West Bengal has dealt another blow to the company, spelling an estimated revenue loss of Rs 10-15 lakh in the three months of the current financial year.

“We have already printed the price on our packets now available in the markets. We cannot change them immediately. We have to absorb the rise in sales tax in these three months,” he explained.

Kidwai said his company’s Sri Lankan business is doing well both in terms of buoyant production and healthy prices.    


 
 
FLURRY OF SMALL CAR LAUNCHES FROM AUTO MAJORS ON A 
 
 
FROM M. RAJENDRAN
 
New Delhi, Jan 16: 
The din in the small car market is set to reach a crescendo with companies, buoyed by a forecast of boom conditions, gearing up to roll out a number of new models and upgraded cars while bracing for smaller margins and much tougher competition.

The emphasis of the manufacturers is on environment friendly technology; some will be launching small cars fitted with compressed natural gas or liquefied petroleum gas while others plan to roll out battery-run models.

Says B.V. R. Subbu, director, marketing and sales, Hyundai Motors India Limited: “The next few months are a period of consolidation. The car manufacturers will continue to enjoy a steady growth rate of about 25 per cent. The small cars in the Zen and Santro category will have a growth rate of more than 35 per cent in 2000,’’ Subbu said.

“By 2001 we will see a few companies launching brand new models. But it would need considerable investment which only a few can make,’’ he added.

Toyota Motor Company is a likely entrant in the small car segment. “We have the product but will decide about the launch when we are confident that there is a demand,’’ said Vikram Kirloskar, vice chairman, Toyota Kirloskar Motor Limited. Audi and Skoda, too, have designs on the small car market.

Mumbai-based design house DC Motors has also put on display a small two-seater concept car at the AutoExpo and is discussing the possibility of co-production with several companies.

Maruti Udyog Limited (MUL) has announced its plans to roll out at least one small car from its stable — possibly, a 800 cc Cervo C. The Indian car major has already taken the lead in launching CNG/LPG fitted vehicles.

It has also upgraded its base model M800EX and M800DX with multi point fuel injection system (MPFI) and a four valve per cylinder against the existing two valve per cylinder.

Korean giants Hyundai and Daewoo will be introducing their small car variants fitted with CNG/LPG, while the car to be launched by Italian giant Fiat will have CNG fitted on the roof.

Daewoo expects sales of its Matiz to go up further in the coming months. Sales have already touched 6,000 units a month. “Demand patterns are quite unusually healthy,’’ said S.G. Awasthi , Daewoo’s managing director.

“A new model which does not meet customers current demands and aspirations cannot sell. We have decided to introduce Uno fitted with a CNG on top to provide the same space. It will certainly have buyers: both individual and bulk operators,’’ said Enrico Ferrero, sales and marketing director of Fiat India Automobiles Ltd.

Fiat has also developed Reva, a battery powered hybrid car.    

 

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