Strong orthodox flavour in
Buyers set deadline to change sample norms
Bill on tax sharing gets go-ahead
Infotech Bill sails through
Bajaj Auto net at Rs 613 crore
Indian Oil set to lift 10% in Haldia Petro
Foreign Exchange, Bullion, Stock Indices

Calcutta, May 16 
The tea industry has set a production target of 840 million kgs this year, up 4.3 per cent over last year’s 805 million kgs. At the same time, it aims to export 225 million kgs, 18 per cent more than 190 million kgs in 1999.

More important, it has decided to increase orthodox tea production by 40 million kgs this year. A better indicator of the change is that the proportion of orthodox tea in the total output will rise from 8.6 per cent to 13 per cent at the end of this year.

Last year, the production of the orthodox variety had been cut to 70 million kgs. This will be raised to 110 million kgs this year to achieve higher rates of growth in tea exports. In 1999, total tea output was pegged at 805 million kgs while the volume of exports was to the tune of 190 million kgs.

The export sub-committee of the Consultative Committee of Planters’ Association (CCPA), which met here today to set targets for this year, decided to swivel the export focus on West Asia and North Africa (Wana) region, US, Canada and Europe to make up for the limited opportunities in the saturated markets like Ireland, Germany and the UK.

The target for exports to Russia and CIS countries has been fixed at 100 million kgs, up from 97 million kgs that was exported to this part of the world last year. Gautam Bhalla, chairman of the export sub-committee of CCPA, said the industry has identified two separate sets of countries for the exports of CTC and orthodox varieties. For instance, North Indian CTC tea will be exported to Pakistan while the US, Canada and Europe have been identified as potential destinations for speciality tea and CTC. In the orthodox category, the North Indian variety will be shipped to Iran and Saudi Arabia while the South Indian output will be exported to Turkey, Jordan, Syria and Iraq.

Bhalla said the increase in orthodox output will come largely from South India. Of the total tea production in South India last year, the orthodox variety accounted for 30 to 35 per cent.    

Calcutta, May 16 
Buyers of the Calcutta tea auction have given the Tea Board time until July 3 to come up with necessary changes in the newly introduced sampling norms. The move comes after the board’s revised rules on samples led to widespread resentment among producers and caused a two-week halt in the auctions at Calcutta, Guwahati and Siliguri. Even though it has been set a date to break the logjam, the board has not reacted to the demands of the buyers so far. Chairman S.S. Ahuja last met buyers, sellers and brokers on May 9.

Sellers, buyers and brokers met here today to find ways to end the impasse. “The buyers were of the view that the sampling norms should be relaxed to facilitate auctions. However, sellers felt the Tea Board should stick to the stringent rules,” sources familiar with the developments said.

Buyers, most of whom are getting impatient with the delay in arriving at a mutually acceptable solution, expect an early response from the Tea Board. However, Ahuja has asked members of the Calcutta Tea Traders association (CTTA) to make a representation. “The board members will react and come up with changes, if required,” sources said.

Meanwhile, CTTA has decided that the new sampling norms will come into force from July 3 — the day Calcutta auction will conducted sale number 27. However, normality has returned to the city auction with sales on Tuesday and Monday.    

New Delhi, May 16 
Parliament today approved the 89th Constitution Amendment Bill to devolve 29 per cent of central taxes to the states.

The Bill, which was passed by the Lok Sabha on May 9, was unanimously approved by the Rajya Sabha today.

Finance minister Yashwant Sinha today announced in the Rajya Sabha that an all-party meeting for evolving a national consensus to check fiscal deficit would be convened after the Eleventh Finance Commission presented its report in June-end.

The government would also introduce the Fiscal Responsibility Act to put a statutory cap on borrowing and expenditure, he said.

Going by the concern expressed by various political parties on the fiscal deficit, Sinha said, “There is already a national will to deal with this problem, which has assumed serious proportions.”

Without tackling it, the country would not be able to chart a course for high growth, he added. The Bill, which amends Articles 269, 270 and 272 of the Constitution to enable states share revenue from customs and other taxes, was introduced to implement the recommendations of the Tenth Finance Commission.    

New Delhi, May 16 
The Lok Sabha today passed the controversial information technology Bill after the Congress did a U-turn and decided against pressing its objections to the Bill.

The Congress’s change of heart came after hours of lobbying by industry representatives who had been pressed into service by a panic-stricken BJP government. The Congress yesterday virtually threatened to block the Bill in the upper House if it was passed without their consent.

Even in the morning, the Congress MPs said they had believed their job would be to oppose the Bill. But Shivraj Patil who was co-ordinating the party’s stand on the Bill suddenly issued fresh orders that directed Congressmen to softpedal the issue. But the Left remained adamantly opposed to the Bill, mainly because of clause 79 which allows any police officer of the rank of deputy superintendent or above to enter any public place, search and arrest without warrant any person they suspect of having committed or of being about to commit any offence under the act.

Industry too was not very happy with it. But Nasscom president Dewang Mehta said, “Legal experts believe dropping of clause 79 may be worse as the government could use clauses in the Indian Penal Code to let any policeman exercise just this power.”

Cyber cops

As a consolation, government promised to set up special net-savvy police task forces to deal with cyber crimes. “Unless the police is able to retrieve data from a computer, they will not be able to deal with crimes,” IT minister Pramod Mahajan said.

Agreeing to the Opposition criticism that police officers might misuse the provisions of this act, Mahajan said the government could not delay a Bill just because of such fears. Instead, the government would ensure such officers were punished, he added.

Once the Bill is ratified by the upper House, India will become the 12th country to have cyber laws. Besides having provisions to police cyberspace, the Bill legalises e-commerce and money transactions over the net as well legalising electronic contracts and filing of official documents over the net.

Nasscom said it will now launch a new campaign, Operation Bandwidth, to increase bandwidth in the country 80 times to 100 gigabytes by 2003. “Unless we get more bandwidth and improve net services, India will lose heavily despite these laws and e-commerce will not catch on,” said Mehta.    

Mumbai, May 12 
Bajaj Auto Ltd, the two-wheeler major, today reported a 13.5 per cent increase in net profit at Rs 613.73 crore on the back of a hefty rise of 52.8 per cent in other income to Rs 405.06 crore.

Bajaj Auto’s performance was in line with a recent trend among corporates which have been showing a surge in profits, mainly supported by a spectacular jump in other income. Sales was up 4.6 per cent at Rs 3810.49 crore as against Rs 3,642.05 crore in the previous year. Total sales and other income rose by 7.9 per cent to Rs 4,215.55 crore as against Rs 3,907.20 crore in the previous year.

Announcing the annual profits for the year ended March 31, Rajiv Bajaj, vice-president- products, attributed the rise in “other income” to the accrual of “profits on sale of equity investments”. The company also said it had changed the method of valuation of inventories. As a result, the value of closing stocks rose by Rs 14.23 crore and profit for the year also increased by the same amount.

Bajaj was gung-ho about the results: “In the mature segments of the two-wheeler industry, the mindshare, market share and profit share continues to be overwhelmingly with Bajaj Auto.”

Meanwhile, the board today decided that the payment of interim dividend for the year 1999-2000 at the rate of Rs 10 per share (100 per cent) amounting to Rs 132.52 crore (including corporate dividend tax) be taken as final dividend for the year 1999-2000.

During the year, the company manufactured 14,32,471 two-and three wheelers (including CKD packs) as against 13,81,765 two-and-three wheelers (including CKD packs) during the year 1998-1999.

Sales amounted to 14,12,598 two-and-three wheelers as against 14,23,501 two and three wheelers in the previous year.

The year saw the company introduce Saffire, a 100 cc 4-stroke scooter with 3-speed automatic transmission designed with Tokyo R & D technology (first offering from the state-of-the art plant at Chakan). Legend, India’s first four stroke scooter launched by the company was also well received at the market place, claimed Bajaj.

Roll-out of new models

The two-wheeler major plans to roll out three new models during the current fiscal. These include a new 100 cc motorcycle code-named 288-C and a version of Pulsar, a 175cc street sports bike code-named K-2 developed with Tokyo R & D technology and the eagerly awaited Eliminator, a chopper-like bike in the cruiser class.

Bajaj said the 288-C will directly compete with Hero Honda’s Splendour and will have a price differential like every other Bajaj product. It will be Rs 5000 lower than its competitor’s product. Similarly, K-2, the fully loaded Pulsar model will be extremely powerful and will compete against Suzuki’s Fiero.

Both the products are slated for launch in October.

Bajaj hopes the new products will gradually become leaders in the respective segments.

“It is not possible to dislodge the market leader immediately. But the numbers will grow rapidly like the Boxer and the Caliber did in their respective segments,” he added.    

Calcutta, May 16 
Indian Oil Corporation (IOC) is planning to pick up equity worth Rs 150-Rs 200 crore in Haldia Petrochemicals (HPL).

A meeting between the HPL top brass and their IOC counterparts was held last week to finalise the size of the investment and the instrument through which it would be made.

Sources said the public sector oil company would acquire a stake of between 8 and 10 per cent stake in HPL through this investment. A senior HPL official, while confirming the negotiations, said a decision regarding the instrument through which Indian Oil will pick up the stake, was yet to be taken.

“IOC can make the investment either through convertible debentures or preference shares, which would be issued to it. A decision to this effect will soon be taken,” the official said.

Earlier, it was the state government which took the initiative of inducting IOC into its pet petrochemicals project. Since HPL will source over 25 per cent of its naphtha requirement from IOC’s refinery at Haldia, the oil major too was keen on a strategic stake in HPL.

The three existing promoters, the West Bengal Industrial Development Corporation (WBIDC), the Tatas and the Chatterjee-Soros group (Mauritius), however, will not sell off part of their stakes in favour of IOC, it is learnt.

Sources further pointed out that the Chatterjee-Soros group was initially not very keen on having IOC as the fourth promoter in HPL, but later agreed to induct them in the project.

The IOC top brass, however, could not be contacted for its comment on the issue despite several attempts.

IOC’s participation in HPL will come as a shot in the arm for the Rs 5170 crore project, which could not raise equity over and above the promoters’ contributions due to the depressed market.

While the total equity of HPL is Rs 1979 crore, the three promoters — Chatterjee-Soros, the Tatas and WBIDC — have invested Rs 1010 crore to pick up a 51 per cent stake.

The Tatas have a 7 per cent stake with an investment of Rs 140 crore, while WBIDC and the Chatterjee-Soros group invested Rs 433 crore each to hold a 22 per cent stake each in the company.

The HPL official further pointed out that IOC would supply the naphtha at floating rate. Sources, however, refused to comment on whether there was any penalty clause if IOC defaulted on supplying the agreed volume or if HPL failed to absorb the supply.

HPL will require 1.3 million tonnes of naphtha per annum when production begins in full swing. However, the Haldia refinery of IOC produces 3 lakh tonnes of naphtha, which falls far short of HPL’s requirement.

“We have to source raw materials from abroad. If IOC charges a fair price, there is no problem in procuring naphtha through its import channels. But if IOC’s prices are higher than prevailing international prices, then we will import it ourselves,” they said.    

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