Govt to cut spending by 10%
Satyam Infowayto buy Kheladi
Goenkas set to up CESC stake
Relief rally on DalalStreet, sensex up 141
Fast track exit route for firms
Foreign Exchange, Bullion, Stock Indices

New Delhi, Sept 25: 
Chasing a ballooning fiscal deficit, which is expected to take a further beating once oil prices are hiked, the government today announced a series of belt-tightening measures today including a 10 per cent cut in all non-plan, non-salary expenditure of all government departments and organisation.

The finance ministry mandarins say the austerity measures are being introduced as they fear government’s fiscal deficit could cross the targeted limit of 5.1 per cent of GDP by as much as half a percentage point as government spending has been burgeoning even as revenue has been falling short of targets.

The finance ministry order circulated today also banned the creation of new jobs in the government sector, abolition of posts lying vacant for more than a year. The government departments have also been asked to cut existing jobs by up to 10 cent wherever


Foreign travel allowance is being cut by 25 per cent for all officials, senior and junior. Travel on study tours and seminars are being banned while unavoidable foreign travel will see smaller delegations.

The cuts, officials insisted, covered the political executive as well and was not just limited to the bureaucracy. New rules also ban the purchase of new cars and other vehicles by the government and calls upon all departments to spend 10 per cent less on fuel bills. The departments are also being told to organise fewer and less lavish conferences and seminars.

The finance ministry officials estimate these measures should save as much as Rs 1,500 crore for the government. The government has currently overshot expenditure allocations by as much as 8-10 per cent. Officials said this overspending was at the root of the problem.

Customs duty collections have also been low, compounding the cash-strapped government’s woes. “Given the impending oil price hike and its recessionary impact on industry, we can expect even lower revenue collections in the months ahead,” finance ministry officials added.

Last week, the planning commission had issued a strict warning to the central government stating its fiscal profligacy had “led to excessive fiscal deficit beyond sustainable levels.”

In a mid-term appraisal of the Ninth five-year plan’s resources position which is yet to be placed before the government, the commission pointed out that compared with a projected negative balance from current revenues (BCR) of Rs 32,135 crore in the first three years of the ninth plan, 1997-2000, the government’s actual BCR was a negative Rs 94,902 crore, thrice the projected figure.    

Mumbai, Sept 25: 
Satyam Infoway Ltd (Sify) has decided to acquire India Pvt Ltd which owns and operates the sports portal, The cash-stock deal is valued at $ 1.3 million. Out of the $ 1.3 million, Sify said, 5 per cent would be paid in cash and 95 per cent would be given through issuance of equity shares of Sify.

For this deal, a single Sify share has been valued at Rs 2,965.55 ($ 65.75 per share; equivalent to the closing price for four ADRs on the Nasdaq on September 14).

However, the equity shares issued to Kheladi’s shareholders are not listed in India and, under the present law, is not convertible into ADRs, Sify added. is a portal, promoted by Geet Sethi, the six time world billiards champion.

Sify said its intention is to assimilate the strengths of “The founder shareholders of Kheladi may receive additional equity compensation of up to $ 0.2 million based on the achievement of agreed performance metrics,” Sify said.    

Calcutta, Sept. 25: 
The Goenkas have decided to raise their stake from the 50 per cent they now hold in CESC Limited.

Company vice-chairman Sanjiv Goenka told reporters after the company’s twenty second annual general meeting (AGM) here today that the stake-hike is on the top of its medium-term agenda. “We are looking at the ways and means in which we can increase the stake within next 12 months,” he said.

Promoters hold 50 per cent, the financial institutions 20 per cent, the public 21 per cent in CESC’s current equity capital. The remaining 9 per cent is controlled by overseas investors.

The promoters held 40.5 per cent when RPG took over CESC in 1989, but they have raised their holding over the years through creeping acquisitions. “This is the right time to acquire the shares. However, we have not finalised the plan. We may pick up shares from the market under the creeping acquisition route,” he said. The CESC scrip is quoting around Rs 20.75 on stock exchanges.

However, Goenka said the company’s health is hinges almost entirely on tariff increases. Given that the last revision in CESC’s charges was made 22 months ago, it is imperative that the rates are raised significantly now. “It all depends how quickly the West Bengal Electricity Regulatory Commission (WBERC) gives us permission to revise our tariffs,” he added.

R.R. Ganguly, (member, technical) in WBERC — the state power regulatory commission — said the commission has already sent formats and guidelines on tariffs to all power utilities, including CESC. “We will soon announce when CESC can submit their tariff-revision proposal,” he said.

Earlier addressing shareholders at the AGM, CESC chairman R. P. Goenka said the depreciation charges at the Budge-Budge unit are biting into the profits of the company. The plant has now achieved a plant load factor of 78 per cent.

The chairman said CESC is in a constant dialogue with the state power department to rectify the lop-sided agreements it entered into with the West Bengal State Electricity Board (WBSEB).    

Mumbai, Sept 25: 
Receding worries over the size of an imminent oil price hike and the US decision to dip into its strategic reserves sent investors into a buying binge that propelled the Bombay Stock Exchange (BSE) sensex 141.11-points to 4173.48.

The relief rally — as many in the market chose to describe it — was fuelled by bargain-hunting operators and institutions who scooped up key technology shares early in the day and set the tone for wider gains in the post-noon session.Today’s recovery helped recover part of the 530-point loss suffered last week by the sensex, including the 225-point slump on Friday. The plunge was blamed on the oil scare and the impact of higher petro prices on the Indian economy.

FIIs, who are believed to have been net sellers by a staggering Rs 109 crore on September 22, bought heavily into technology stocks. Their net investments turned positive today.

Brokers say trading opened on a firm note after expectations that the increase in oil prices will be tempered through reductions in a range of taxes imposed on petro products.

Also, the fact that the increase in oil prices has been deferred till the end of this month gave the market some time to prepare for it. The government says it intends to tackle the burgeoning oil pool deficit with a three-pronged strategy.

Another important boost came from US President Bill Clinton’s decision to release 30 million barrels from its strategic petroleum reserve (SPR), which helped tame surging crude prices by nearly $ 5 to $ 6 per barrel. This, along with the G-7 decision to prevent the euro’s freefall, lifted the sentiment across markets in the Asian region, helping the rally on Dalal Street.

The sensitive index opened strong at 4144.81 and oscillated in a range of 4210.00 and 4105.75. However, it shot up due to heavy purchases in index heavyweights like Satyam Computers (which was up 15.5 per cent), Infosys (up 8 per cent), Zee Telefilms (up 9 per cent) and NIIT (up 7 per cent) in the last thirty minutes of trading.

Of the specified scrips, 115 registered sharp gains. These included Silverline, SSI and Wipro, which closed in the 16 per cent upper circuit band; 24 shares suffered losses.

Satyam Computer was the top-traded scrip with a turnover of Rs 553.41 crore.    

New Delhi, Sept 25: 
The department of company affairs (DCA) has framed an easy exit route for companies which want to deregister their names. The scheme would be open from September 28 till November 26. It is particularly targeted at those companies which have no business and availed themselves of the Company Law Settlement Scheme (CLSS) 2000. According to the CLSS scheme, defaulting companies who have not filed their balance sheet or profit and loss account statement with the RoC could do so after paying a penalty.

Law minister Arun Jaitley today said, “Large number of companies have been registered. But due to various reasons some units have failed to take off. The promoters of such companies have been requesting the government to strike off the name of their company through an easy method.” Instead of the normal 237 days taken to process the applications, the new route would dispose the cases in 37 days, he added. The fast track route speeds up the protracted process of winding up. It will help the RoC remove excess baggage.

Registered companies seeking to strike their names from the list of the RoC would have to submit separate forms, a separate form will be issued for those companies who have made disclosures by availing the CLSS 2000 before August 31, and a third form for those who will do so by month-end.

Till September 23, the collections under the CLSS touched Rs 111.59 crore, said Jaitley.

Meanwhile, to improve the accounting practices, the government today released the new accounting standards for segment reporting and related party disclosures.

Many companies provide groups of products and services or operate in geographical areas that have different rates of profitability, opportunities for growth, future prospects, and risks.

“Information about different types of products and services of an enterprise and its operations in different geographical areas — often called segment information — is relevant in assessing the risks and returns of diversified, multi-locational enterprise which may not be determinable from the aggregated data,” said Institute of Chartered Accountants of India.    


Foreign Exchange

US $1	Rs. 46.03	HK $1	Rs. 5.85*
UK £1	Rs. 67.09	SW Fr 1	Rs. 26.30*
Euro	Rs. 40.48	Sing $1	Rs. 26.05*
Yen 100	Rs. 42.74	Aus $1	Rs. 24.80*
*SBI TC buying rates; others are forex market closing rates


Calcutta	Bombay

Gold Std (10gm)	Rs. 4605	Gold Std (10 gm	NA
Gold 22 carat	Rs. 4350	Gold 22 carat	NA
Silver bar (Kg)	Rs.8000	Silver (Kg)	NA
Silver portion	Rs. 8100	Silver portion	NA

Stock Indices

Sensex	4173.48		-+141.11
BSE-100	2163.64		+99.32
S&P CNX Nifty	1292.55		+26.10
Calcutta	115.18		+0.31
Skindia GDRNA	644.14		-31.69

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