More goodwill than dollars
Technocrats, IAS men vie for top DTS post
Single clearing house for SEs mooted
Packer to take 10% in Sahara sports channel
Indian Oil breaks the jinx at Panipat

 
 
MORE GOODWILL THAN DOLLARS 
 
 
 
 
India Inc’s top brass still doesn’t know how to react. The world’s most powerful chief executive officer (CEO) had come visiting. And, he actually patted them on the back. Not just once, but twice in a day.

Crossing over from Hyderabad — the sub-continent’s cyber hub — where Bill Clinton extolled India’s net millionaires and billionaires — to Mumbai — the country’s commercial capital on the west coast — where he chatted up the Indian entrepreneur of the century, Dhirubhai Ambani, the President was at his best in wooing native traders.

“The US has now recognised India as an emerging economic power,” an euphoric Anand Mahindra of Mahindra & Mahindra gushed. “India has finally arrived on the world business map,” said another enthusiastic Delhi-based businessman. But, has it really?

India still accounts for a measly 1 per cent of the world trade. And the US, which is India’s biggest trade partner buying nearly 22 per cent of its exports and selling nearly 10 per cent of all that it imports, would hardly be affected if trade with this part of the world shrunk.

US businessmen did sign up deals worth $ 3 billion with Indian corporate captains, but many of these pacts are either long-term future promises while some of the others are mere formalisation of agreements clinched some time back.

To dispel illusions, US commerce secretary William Daley made it clear that the remaining sanctions would go only after India signed the CTBT agreement.

The only immediate windfall from the visit seems to be a promise that the US administration will help push through a proposal to raise India’s quota of H1B professional visas through the Senate.

An in-principle agreement was reached between the two sides on the totalisation tax. This will enable Indian professionals working in the US to be exempted from paying social security taxes in both countries.

Both measures will help Indian software firms bodyshopping IT professionals to the US as well as the American industry, which needs these specialists urgently. The visa cap was a constraint, which both sides felt should be relaxed.

The tax pact, on the other hand, will help attract better talent. Social security tax payments are often larger than the actual tax contributions.

Many professionals complain they are forced to make huge contributions even if they stay in the US for just three to six months.

The Americans, on their part, didn’t go away with much in their bag either. Pressures to lower tariff walls were stonewalled with long explanations on India’s budgetary realities.

The only promise the US side managed to extract on this count was the well -known Indian position that it would compress import duties to just 2-3 slabs within two years.

Worried over being saddled with one of the largest trade deficits in the world, Clinton’s team tried to convince India that it should buy more goods made in the US.

But, even that looks hard. Boeing Corp’s pitch to sell planes to Indian Airlines has been queered by officials, who pointed out that a private airline in India has already ordered up to 20 planes from the Seattle-based aircraft maker. Boeing, which was eyeing a $ 1.5-2 billion order, may have to eventually settle for just half of that size.

The internet and infotech alliances which Clinton wants the world’s two biggest democracies to forge would have fructified anyway.

For Indian software entrepreneurs, who have been selling two thirds of their products to the US, it is the most obvious market to tap for developments, marketing and even financing.

For the Americans, who have long felt the land of infinity, is the ultimate in computer calculus investments in Indian brains here was a natural business corollary.

In fact, US investors are so cued to this sector that the CEO of CBay, a leading software developer, even listed the exact lacunas in India’s infotech policy for its top businessmen and officials.

The real gains for the country from the five-day visit of the world’s most powerful man come from a change in popular perceptions.

As Julia Hsiao, University of California, Berkeley’s director of international development who had come here as part of the jumbo delegation, remarked: “Many US businesses will now discover India all over again. Till now, for many in the US, India either did not exist at all or was a land too far off.”    


 
 
TECHNOCRATS, IAS MEN VIE FOR TOP DTS POST 
 
 
FROM M. RAJENDRAN
 
New Delhi, March 26: 
A battle royale has begun for the post of secretary in the Department of Telecom Services (DTS) between the technocrats of the Indian Telecom Service (ITS) and the bureaucrats of the Indian Administrative Service (IAS) who have always so far headed key ministries and departments.

At present, the DTS posts are occupied by the technocrats. Communications minister Ram Vilas Paswan wants to post officers from the telecom service to key posts in the DTS. He has already sent a letter to the government with a request for an extension of the tenures of two telecom officers hailing from his home state Bihar.

DTS secretary P.S.Saran and member (technology) N.K Sinha, both of whom are due to retire on May 31, are likely to get an extension if Paswan manages to convince the government that technocrats would be better equipped to run the DTS.

Both officials are members of Telecom Commission the apex body in the communications ministry dealing with all critical issues. “An extension for these two officials is important for us. We have had to struggle for long to get what is due to us,” sources said.

The ITS officials have shown that they can be good administrators. “We have nothing against the IAS but technical and marketing departments should be headed by technical persons,” said an office bearer of Indian Telecom Service Officers Association (ITSA).

The telecom service had edged out the IAS in the race for the post of the secretary of newly-created DTS. Now the same lobby is backing an extension for these two officials, to thwart any attempt by the IAS lobby to take over the DTS.

“The post demands a technical person who is au fait with new emerging technologies. A technical official would not only make quick decisions but also would be able to make a competent presentation to the minister highlighting the benefits for a speedy clearance,” claimed an executive member of ITSA.

While Saran could not be contacted, sources said, “ He himself does not want an extension. Instead he would prefer to be appointed as a member of the appellate tribunal which was created under the Telecom Regulatory Authority of India (amendment Act) 2000.”    


 
 
SINGLE CLEARING HOUSE FOR SES MOOTED 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, March 26: 
The government is considering a slew of measures, including a proposal for a single clearing corporation for all the stock exchanges to improve the efficiency of the Indian capital markets.

Sources in the capital markets division said, “We have mooted the idea of having a single clearing corporation because it is a more efficient system. In fact, this is the practice the world over.” Currently each stock exchange has individual clearing corporations.

However, the idea has to be accepted by the various stock exchanges and has to be vetted by market watchdog Securities and Exchange Board of India (Sebi). Sources in the stock exchanges feel that the issue would have to be studied in more detail as having a single clearing corporation could be inconvenient. “We will have to look at the advantages and the drawbacks. The location is important. Now a broker in Delhi gets everything done in Delhi itself. But if the clearing corporation is located outside Delhi, it could be inconvenient.”

Another area which the government is keen on fine tuning is the badla system so that the number of scrips under rolling settlement could be increased.

Currently only select scrips, about 150, are under rolling settlement, while others continue to enjoy longer settlement periods due to existing badla practices.

“Under the badla system, trades sometimes remain unsettled for a greater number of days, as compared with trades under rolling settlement,” sources said.

The government wants all A level scrips to be included in rolling settlement. A meeting between the government and Sebi is scheduled next week to consider the necessary changes in the badla system, sources added.

The government is also considering empowering Sebi to compensate investors. The market watchdog had been asking for more teeth, to help investors get back their money lost to unscrupulous promoters of vanishing companies.

Currently the power of prosecution is vested with the department of company Affairs (DCA), while Sebi does not have any such authority. The market regulator has been repeatedly lobbying with the government for more enforcement powers.

The government is also working at harmonising the laws. Sources said the Companies Amendment Bill 1999, introduced in Parliament in November, tried to reduce the overlap of powers between Sebi and DCA, but it did not address the problems fully. “Hence the ministry has decided to again study the legalities to reduce the overlap between the two,” the sources added.    


 
 
PACKER TO TAKE 10% IN SAHARA SPORTS CHANNEL 
 
 
FROM M. RAJENDRAN
 
New Delhi, March 26: 
Media magnate Kerry Packer is set to pick up a 10 per cent stake in the Subrata Roy-promoted Sahara Sports Channel. He will also pump in another Rs 300 crore in Himachal Futuristic Communications Limited (HFCL), and Rs 50 crore in established dot.com companies in India.

A high-level team comprising senior executives of two Packer-owned companies — Consolidated Press Holdings (CPH) and Publishing and Broadcasting Limited (PBL) — are now in Mumbai to thrash out the final terms before Packer and the Nahatas of HFCL clinch the agreements on March 28. The second tranche of Rs 300 crore in HFCL will be used to set up a joint venture company, which will focus on the development of telecommunications and media software.

The total investment by Packer in HFCL is likely to be Rs 500 crore, in addition to the Rs 1,039 crore poured in recently. The 10 per cent stake in Sahara’s TV channel is likely to cost the Australian baron Rs 100 crore. An agreement between the two companies is likely to be signed in Delhi.

“In addition to the two major initiatives in HFCL and Sahara, Packer will also invest venture capital in two startup dot.com companies, and one or two established portals. He will control a majority stake in these portals and the startup firms through his network of companies,” sources said.

Amar Singh, Samajavadi Party MP and a close friend of the Roys, is hosting a gala dinner in honour of Packer in Delhi. However, it is HFCL which will host him during his three-day visit in India.

Packer and Rupert Murdoch are the two giants in media and entertainment business who have made frequent visits to India in the last few months in an effort to size up, and possibly grab a big slice of the country’s growing telecom and information technology business.

“We have picked up those start-ups which have the potential to generate revenues consistently. It is important to have a steady growth even if; initially, the revenues are low. The established portals will be able offer enhanced services and will provide better content. The investment will help both companies to tap the potential offered by the convergence of technologies and to enhance revenue generation,” sources in the Packer-owned Channel Nine said.

The Sahara group and the Australia-based Channel Nine will set up a joint venture company which will operate in several countries. The firm will focus on international sports events.

“We also plan to pick up a larger stake holders in the venture. A few broadcast and content developers in South Asia, copyright holders of international sporting events may be offered equity in lieu of the royalties after we take a decision on expanding our operations,” sources in Sahara said.

Packer will be arriving in India, accompanied by his son James Packer, who had signed the agreement with HFCL recently.    


 
 
INDIAN OIL BREAKS THE JINX AT PANIPAT 
 
 
FROM R. SASANKAN
 
New Delhi, March 26: 
Indian Oil Corporation (IOC)’s Panipat refinery— derailed even before it started operations — is finally back on the rails.

Though accidents cannot be ruled out in the future, the Indian Oil management can heave a sigh of relief from the fact that all units of the refinery are now operating at their full capacities.

The refinery has had the dubious distinction of being rocked by a record number of accidents, forcing the management to close it down for repairs.

The first major accident was a fire in the furnace, followed by a leakage in the vacuum distillation unit. The hydrogen leakage in the hydrocracker was the most serious, claiming the life of five workers.

An embarrassed IOC management put each unit through a comprehensive check-up, during which the mechanical problems were identified and repaired.

The six million tonne per annum refinery has been operating for the last two years, but the capacity utilisation has remained far below its installed level. However, since January this year, it has been operating at the optimum capacity.

Even as the repair work was being carried out, the IOC management launched the expansion project to double its capacity to 12 million tonnes per annum.

Estimated to cost Rs 3,365 crore and scheduled to be completed by the end of February 2002, the expansion project envisages the installation of a delayed cocking unit, additional hydrocracking unit and a diesel hydro-treating plant. The government sat over IOC’s expansion proposal for more than two years because it felt the Panipat refinery, along with HPCL’s planned nine million tonne refinery at Bhatinda, would lead to a near-glut situation in the northern region.

   

 

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