Swadeshi shield against predators
Reliance Petro tieup delay upsets IOC
Employees seek to stall
April-July trade deficit at $ 3.7 bn
Govt may ereserve garments industry
October debut for insurance licences
Bengal in talks with UAE firm for mega power plant
Baleno Altura hits the road

New Delhi, Sept 1: 
Under pressure from its allies and industry houses owing allegiance to the Bombay Club, the BJP-led government wants to give its planned Industries Act a Swadeshi hue.

It will introduce a clause that will allow these companies to take over manufacturing and service sector firms to protect them from predatory moves of foreign partners. The Act is likely to be considered by the Cabinet later this month.

The minister for industry and commerce, Murasoli Maran, has asked his bureaucrats to redraft the Act, now being examined by a group of ministers.

The government will defend the changes saying these are needed to take over a few industries in times of war, and to protect interests of domestic partners in joint ventures with foreign companies.

The services sector is also being included in the list of industries that can be taken over in public interest. BJP hawks say this is necessary in a situation when many companies in the finance, banking and software sectors have made it to the top of the corporate totem pole. The legislation will ensure that they are not swallowed by acquisition-hungry MNCs.

However, the protective clauses have left the finance ministry chafing because it fears these will scare away foreign investors. Other ministries keen on the industry-friendly changes argue that these are not unique to India, and that laws giving protection to domestic investors exist in Europe.

Domestic companies have long complained that they have often been threatened by their foreign partners about the withdrawal of technological or marketing support.

The Swadeshi lobby feels such instances, if repeated, will tarnish BJP’s image.

The Act will also provide a statutory mechanism to regulate or control foreign investment. Strangely enough, the laws currently being used to control the industry, including the Industries Development and Regulation Act — which is being replaced with the Industries Act — does not recognise the FDI/NRI norms formulated from time to time.

To regulate FDI flows better, a clause will be inserted under which the Reserve Bank of India will, after instructions from a designated authority, ask banks and financial institutions to raise their ‘service, interest or other charges by up to one percentage point’ for companies that violate the Act.

Despite announcements in the past that the small scale sector will be dismantled after the quantitative restrictions are phased out, the Act will contain a clause that will empower the government right to continue reservation in some sectors and hand out sops meant exclusively for the sector.

Officials said while reservations would have to be ended in some sectors due to WTO commitments, the Act will allow reservation in a few industries to continue for some time.

Apparently, this had to be done after the BJP rank and file, along with their MPs, sought Prime Minister Atal Behari Vajpayee’s intervention on the issue.

The primary objective of the Act is to end the licensing provisions of the Insurance Development and Regulatory Authority (IDRA).

The plan is that only industries which have strategic or security considerations will continue to be licensed.

However, the floor of 50 workers — one of the conditions for licensing — will be scrapped.

The government feels that with increasing degree of automation, even large factories and units can be run in future with two to three employees.

The government will continue to retain the right to ensure compliance of safety and quality standards as also the right to set up development councils for specific industries.

To fund research, development and training of specific sectors, the government will also retain the right to levy up to 5 per cent cess as it has done in the past.    

New Delhi, Sept 1: 
Indian Oil Corporation (IOC) is upset over the delay on the part of the government in clearing its marketing joint venture with Reliance Petroleum (RPL).

Under an agreement signed last year, IOC will market 50 per cent of RPL’s controlled products for 10 years. Both companies agreed to float a joint venture for the other items.

Normally, a proposal of this nature is not allowed to gather dust, especially if it involves Reliance. Indian Oil circles now believe that RPL has turned indifferent to the idea of a joint venture, though the company says it is still committed to it.

RPL applied for marketing rights immediately after signing the marketing agreement. When the IOC management made anxious enquiries, Reliance executives told them that they would assign the marketing rights to the proposed joint venture. The logic behind such a statement could not be questioned. However, IOC circles believe that RPL is preparing to enter direct marketing of petroleum products.

Reliance Petro is already into parallel marketing of LPG and kerosene. It has an ambitious plan to set up an LPG distribution network across the country. It will be a serious contender for IBP when it is put up for sale. The three major marketing PSUs — IOC, BPCL and HPCL — have retail outlets owned and operated by social objective groups.

Oil companies have been requesting the government to ensure that these outlets do not go to private companies. However, the ministry of petroleum and natural gas does not appear keen to oblige them. Behind Reliance Petro’s marketing strategy is R. K. Narang, the former CMD of Indian Oil.

Both RPL and Mangalore Refineries and Petrochemicals have been asking the government to advance the deadline for granting marketing rights to private companies. The ministry of petroleum and natural gas was initially opposed to it.

Former petroleum minister V. K. Ramamurthy had gone on record to rule out marketing rights to private parties before the deadline of April 2002. Sources say Ramamurthy’s statement could not be taken seriously as he shifted his stands often. He is believed to have fallen out with his friends in private petroleum companies during the latter part of his tenure.

Senior officials in the ministry of petroleum and natural gas had prepared a paper on the subject, which cautions the government against advancing the deadline. However, they may relent once directions come from the top. There is already a committee of officials within the ministry examining the feasibility of granting marketing rights to private parties before April 2002.    

New Delhi, Sept 1: 
Employees of the department of telecom services and the department of telecom operations (DTS/DTO) have sought a year’s time for corporatisation even as the government is expected to open the next round of bidding for fixed basic telephone services in the 15 vacant circles.

The Left parties and telecom unions have also requested Prime Minister Atal Behari Vajpayee to review the recommendations of Telecom Regulatory Authority of India (Trai), which allowed unlimited number of players in basic telephone services.

“We know that the government announcements are final. But, as a last-ditch effort, we have requested it to put on hold the decisions on corporatisation and the entry of unlimited number of players in fixed-line services for at least a year,” DTO sources said.

Nilotpal Basu, CPM member of Parliament in Rajya Sabha, has written to the Prime Minister asking him to review the DTS/DTO corporatisation and opening up of national long-distance telephony.

Meanwhile, the group of ministers (GoM) constituted under the chairmanship of the minister of communications, Ram Vilas Paswan, to speed up the corporatisation of the DTS and DTO has decided that the government will guarantee pension benefits to all employees even after they are transferred to a corporate entity. However, the unions have stuck to their demand of written assurances, and to have the issue raised in Parliament.

Provisions have been made regarding the transfer of the General Provident Fund, earned leave and half-pay leave accounts to the corporate entity without causing any loss to employees.

On the demand of the employee federations that the pension and retirement benefits should not be based on an executive order of the government, but should form part of the statutory framework, the GoM decided that the pension benefits would be guaranteed through an amendment in Article 309 of the Constitution related to CCS pension rules.

The GoM has also agreed that in the event of a dismissal or removal of any employee, the administrative ministry would be consulted before taking a final decision on the issue.

The GoM has also decided that for discharging obligations in the area of rural telephony or any other uneconomic services, Bharat Sanchar Nigam would be duly compensated under the terms of the National Telecom Policy 1999 (NTP-99).

The GoM has also assured that under no circumstances will the government allow Bharat Sanchar Nigam to become unviable.    

New Delhi, Sept 1: 
India’s trade deficit continued to be at a high of $ 3.71 billion in April-July this fiscal, as against $ 3.02 billion in the previous corresponding period, primarily due to a higher oil import bill.

Exports on the other hand have been growing, but at a measured pace.

After recording growth rates of close to 30 per cent in the first quarter of this fiscal, exports dipped to 16.46 per cent in July, while oil imports nearly doubled to $ 5.46 billion during April-July.

According to the monthly trade data released today, cumulative exports in the first four months of this fiscal however grew at 24.43 per cent mainly due to the high growth rate witnessed in the first quarter.

The total exports in July this year were valued at $ 3.55 billion as against $ 3.05 billion in the same month last year. The cumulative exports from April-July this year were put at $ 13.84 billion as compared with $ 11.04 billion in the previous corresponding period.

Oil imports during April to July 2000 grew by 98.25 per cent and were valued at $ 5.46 billion as compared with $ 2.75 billion in the same period in the previous year.

Non-oil imports during April-July 2000 are valued at $ 12.10 billion which is 6.95 per cent higher than the previous year’s level.

Imports continued to go up mainly due to the burgeoning oil import bill. Growth from April-July this year was put at 24.82 per cent, though in July the growth was not as pronounced at 20.12 per cent.

The total imports in the first four months of the current fiscal were put at $ 17.56 billion as compared with $ 14.07 billion in the previous year. The monthly imports in July this year were valued at $ 4.29 billion against $ 3.57 billion in July 1999.    

New Delhi, Sept 1: 
With cheap imports flooding the local market, the government is planning to dereserve the garments industry.

The textile ministry will be forwarding a proposal in this regard to the Union Cabinet by the end of this month.

Textiles minister Kanshi Ram Rana today said, “under the WTO regulations, the reservation will have to go by 2004.”

This is likely to be part of the textile policy to be announced shortly by the government.

According to Rana, the present investment limit of Rs 1 crore is very small for the garments sector.

The government has also approached the Maharashtra government to sell the surplus assets of sick textile companies.

“The government plans to sell land and then use the proceeds to revive some of the sick units,” Rana said.

According to Rana, Maharashtra chief minister Vilasrao Deshmukh has also placed a proposal before the state Cabinet to revive the sick units. “We hope the state government will take it up at the earliest,” he added.

The minister today launched the integrated and comprehensive handloom development and promotion scheme, the Deendayal Hathkargha Protsahan Yojna (DHPY), to promote new design inputs, processing facilities and opening of new avenues of marketing functions.    

New Delhi, Sept 1: 
The government today reiterated its commitment to issue the first insurance licence next month. Speaking at a meeting organised by the Indo-American Chamber of Commerce here today, finance secretary Piyush G. Mankad said the sector, which was was opened up recently, would see a lot of activity. “Come October, we will see the first insurance licence issued to the private sector,” he said.

On behalf of the government, Mankad assured industrialists that economic reforms would be extended to more areas and that it was paying greater attention to implementing policies that are being framed.

“We are determined to continue with the reforms and the government is creating the environment to attract more foreign investments,” he said.

Mankad said there was a paradigm shift taking place within the government. Unlike earlier when the government merely framed new policies, this administration was paying more attention to implementing already announced policies.

Higlighting the major initiatives taken by the government in various sectors, the finance secretary said the tax structure had been rationalised and made simpler over the years. He said the government would continue to simplify the tax structure and make it tax-payer friendly.

He also assured the industrialists that the government would go ahead with its plans to reduce equity in public sector banks. “The government’s intention to dilute equity to 33 per cent in public sector banks is a major decision,” he said.

Insurance application

Max India-New York Life and Kotak Mahindra-Old Mutual today applied for life insurance licence with Insurance Regulatory and Development Authority (IRDA), taking the total number of companies applying for licence with the insurance regulator to seven.    

Calcutta, Sept 1: 
he West Bengal Power Development Corporation (WBPDCL) is in talks with Al Manhal International Group (AMIG) of the UAE to set up a 1,000 MW gas-based power plant in the state. The cost of the project is estimated at Rs 3,500 crore which will be the second highest investment in the state after Haldia Petrochemicals.

Sources in the WBPDCL said a high level delegation from the AMIG would make a detailed presentation on the proposed project next week.

“We have already had preliminary discussion with AMIG about the project and a decision will be taken after the company makes a formal proposal following the presentation,” they added.

The project will be gas-based, with the liquefied natural gas (LNG) proposed to be brought by AMIG through a pipeline.

AMIG and its associate Vavasi Oil & Gas Pvt Ltd (VOGPL) are in the process of setting up a 2,500 MW gas-based project in Orissa.

“The two companies are keenly interested in incorporating West Bengal in their proposed gas pipeline map. We are also equally interested to set up a gas-based power plant which has a cheaper cost,” sources added.

AMIG and VOGPL have reportedly proposed that they will need to have a guaranteed sale of around 2.5 -3 million tonnes of LNG in order to divert its pipeline through West Bengal.

“The proposed power plant will annually absorb about one million tonne of LNG. We are exploring other potential areas where this gas can be used,” a senior WBPDCL official said.

The official also informed that the domestic use of the gas is being considered through the Greater Calcutta Gas Supply Corporation. “We have to work out the economics of using the LNG for domestic purposes and that can only be possible if it is cheaper than LPG,” the official said.

The official has also pointed out that the proposed project will need to have the clearance from the Central Electricity Authority. But West Bengal, being a power-surplus state, the clearance will not be easy to get.

The state government is interested in the joint venture especially because the proposed 2,000 MW coal-based Sagardighi power project is being shelved.

An official of Development Consultants Ltd, which has a 74 per cent stake in the Sagardighi project, said the company could not go ahead with the project because of lack of coal linkage.    

New Delhi, Sept 1: 
Fishing hooks, golfclubs, golf hats, picnic baskets et al placed strategically inside a smart looking station-wagon, which may be an exotic Atlantic Blue, Riviera Red or Miami Gold.

That is Maruti’s latest Rs 8.5 lakh baby — the Baleno Altura, which hit the roads today. The fishing tackle and other accessories, however, are extra.

Unveiling the Fordwagon look-alike, MUL chief Jagdish Khattar said, “This station wagon is a lifestyle statement. Whether it is a town trip or one out of it, to the golf course or the beach, this premium luxury car owner’s family will not have to share the rear seat with travelling cases, golf clubs or sand buckets as there is ample room in the boot.”

Maruti created the luxury segment in India with the Esteem in 1994, which had an almost unchallenged reign at the top until other automakers stepped in to spoil the party. The Rs 6.7 lakh Baleno launched in December last year, was also positioned in the upper crust of the luxury segment. However, with the Baleno Sedan not exactly having set the roads on fire, it is doubtful whether placing a car in each segment in quick succession will secure the Goliath from the Davids nibbling away at its market share.

Nevertheless, the Maruti ‘Vistaar’ drive is in full swing to shore up its rapidly depleting marketing share, which has not even spared the Maruti 800, the swashbuckling hero of the ’80s.

Though the sleeping elephant has put its internal squabbles behind and finally picked up the gauntlet, whether Maruti can enjoy the kind of brand equity that a Ford Ikon or a Mitsubishi Lancer commands in the premium luxury segment, remains to be seen.

Hot on the Altura’s heels will be the Fiat Siena, slated for a September 8 launch.

The 1600cc, 16 valve Baleno Altura’s engine provides a maximum power output of [email protected], with a torque of 132 Nm@ 3000rpm. The features form part of the ‘super six-tech advantages’ also enjoyed by the Baleno sedan. At 1020 kg, the Altura is heavier than the Baleno sedan by 45 kg and promises a tight turning radius of 4.9 metres.

The Altura, available in eight colours, stands taller than the Baleno Sedan, coming with the added feature of a roof-railing, for attaching racks and additional luggage.

The chassis has been designed with multiple crumble zones with a collapsible front and rear end construction.    


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