Plan target foxes finance ministry
WBSEB tariff hike proposal shot down
Thrice-a-week BA service
Ad wizards do not find potboilers hot anymore

 
 
PLAN TARGET FOXES FINANCE MINISTRY 
 
 
FROM R. SASANKAN
 
New Delhi, Oct 29: 
The finance ministry has been assigned the task of achieving the impossible. Prime Minister Atal Behari Vajpayee has, of late, been talking about a 9 per cent growth target in gross domestic product for the Tenth Five Year Plan (2002-07). However, the onus of setting that target is on the finance ministry.

Since the task has been assigned by the Prime Minister’s Office (PMO), the finance ministry cannot shy away from it, nor dub it unachievable.

The best option before it, therefore, is to rope in an organisation of experts and conduct a joint exercise to lend an air of authenticity to the outcome.

The man behind the idea of a 9 per cent growth is none other than N. K. Singh the high profile secretary in the PMO, himself a former revenue secretary, known for setting ambitious targets.

In fact, his ambitious revenue targets, set as revenue secretary, were responsible for the biggest revenue shortfall in recent years, faced by P. Chidambaram’s dream budget.

Singh has sent a communication to the finance ministry reminding it about the Prime Minister’s growth target and the need to work on it at the earliest.

The finance ministry, in turn, has sought the help of the Planning Commission which has the expertise to set targets, both achievable and unachievable ones.

Sources in the finance ministry maintain that a 9 per cent growth is attainable, provided the government is willing to take certain unpleasant steps which may turn out to be politically unfeasible. The NDA government has not demonstrated the capability to take up the challenge so far and is unlikely to do so in future.

The Ninth Plan had set two targets, 6.2 per cent and 7 per cent and their realisation depended on certain conditions, which the government however, failed to achieve.

But if the monsoon does not fail next year, the GDP growth during the Ninth Plan could be around 6.5 per cent. One of the conditions for attaining a 7 per cent growth target was a 1 percentage point increase in the tax-GDP ratio.

In fact, the target worked in the reverse gear with the tax-GDP ratio registering a little more than a one percentage dip. The 6.5 per cent growth has been made possible by resorting to a higher fiscal deficit than estimated earlier. Another condition was a public sector saving of 2.4 per cent. But in reality, it has been practically zero so far.

Against this background, any sensible approach to the Tenth Plan cannot set a 9 per cent target. The maximum that is possible is 6.5 to 7 per cent.

A 9 per cent growth target could be politically advisable only in the event if the government is not likely to last till the end of the Plan.

Sources in the finance ministry maintain that a 9 per cent GDP growth would call for a 9 per cent growth in public sector savings from the present level of zero. This is certainly an insurmountable task. Both corporate and household savings are unlikely to register any significant growth from the present level.

In the Ninth Plan, the government was expected to go ahead vigorously with the process of deregulation. But it failed miserably in this task.

The condition of the state electricity boards continue to be as messy as before. So are the state road transport corporations and the irrigation sector.

These politically sensitive areas cannot be improved in the immediate future, without which the growth process cannot forge ahead, as is being dreamed up by the PMO thinktank.    


 
 
WBSEB TARIFF HIKE PROPOSAL SHOT DOWN 
 
 
BY PALLAB BHATTACHARYA
 
Calcutta, Oct 29: 
The West Bengal State Electricity Regulatory Commission (WBSERC) has rejected the state power board’s proposal for new power tariffs and, instead, has asked all utilities to file fresh applications on November 20.

West Bengal State Electricity Board (WBSEB) had earlier approached the regulatory body to get its permission, for an increase of more than 25 per cent over the existing tariffs. The proposal, if approved, would have helped the cash-strapped board raise an additional Rs 480 crore in revenues.

Sources in WBSERC said the organisation had already sent notices to all power utilities to put in their applications, if they want to, on a printed format that takes into account the generation, transmission cost and social obligations.

WBSERC, which comprises only three members, is planning to appoint the Administrative Staff College of Hyderabad to collect and collate the data pertaining to the generation and distribution details of applicants. “Once we get all the data, we will be in a position to take a proper view on the appropriate tariff,” a senior WBSERC official said.

The commission will hear all parties, including consumers from the second week of January. “It will take at least three months to finalise the new tariffs for all power utilities,” the official said. The new tariffs, he said, would be determined on the basis of operational efficiency of companies.

“You may propose whatever you may think fit. But, we will work out the modalities on the basis of the provisions in Section 29 of the Electricity Supply Act,” the official said.

While the state regulatory reception is about to start the process for new tariff restructuring, WBSEB is facing an acute funds shortage. The board’s average monthly revenue is Rs 172 crore while its expenditure is over Rs 236 crore. That means a deficit of Rs 64 crore every month, which adds up to a massive amount at the end of the year.

WBSEB chairman G. D. Gautama said the board was looking forward to a ‘logical increase’ in power rates, which would help it bridge the gap between income and expenditure. “An increase in our power tariffs is overdue. We are, of course, trying to raise our operational efficiency, but that alone cannot help if our power rates are not revised accordingly,” he said.

The board has outstanding arrears of Rs 662 crore to financial institutions while it owes over Rs 2,745 crore to various power generating companies, besides Eastern Coalfields.    


 
 
THRICE-A-WEEK BA SERVICE 
 
 
BY A STAFF REPORTER
 
Calcutta, Oct 29: 
British Airways (BA) is spreading its wings wider over the city as it plans to add another flight to the two that it now runs every week. Once that happens, it will have services on Mondays, Thursdays and Saturdays.

British Airways had announced that it would stop services from the city revoked its decision after traffic to the region improved over the last few months.

The airline will also use the Calcutta airport as a stop-over for its Dhaka-bound planes. The airline, it is believed, will use Boeing 777 on the sector.

City industrialists are happy at the move. “BA’s decision has come as a Diwali gift,” a senior official with the Indian Chamber of Commerce said.    


 
 
AD WIZARDS DO NOT FIND POTBOILERS HOT ANYMORE 
 
 
FROM NITHYA SUBRAMANIAN & RAJA GHOSAL
 
New Delhi, Oct 29: 
Bollywood is known for selling dreams, but that is just one of the things the industry churns out. The dream machine is also considered a good medium to promote several products, with some of the cola wars being held on its turf. But that may soon be a thing of the past.

While Coke still believes in the efficacy of surreptitious advertising through films, Pepsi has moved on to greener pastures. So, are Bollywood flicks a good place to sell a soft drink or two? Here, the two rivals seem to differ. While Coke is spending huge sums to be seen in Hindi movies, Pepsi thinks it is not a great idea. Earlier, the brand was seen in eight out of the top 10 Hindi blockbusters. Pepsi is looking at cheaper but more effective ways of communication.

Coke is part of the romantic blockbuster of the year, Mohabbatein. The three lead pairs in the film do most of their interaction in a joint which shows, or rather shows off Coca Cola signage amply. Coke’s spokesperson feels this gives value for money especially when the product gels with the tone of the film. Romance has been central to Coke ads for some time now, with ad jingles like ‘Pyaar mohabbat Coca Cola.’ Earlier, Coke had a major presence in last year’s blockbuster Taal, which also starred Coke endorser Aishwarya Rai in the lead.

However, admen feel that in-film advertising is becoming expensive. “The directors expect a lot more money these days,” they said. Subhash Ghai charged close to a crore each from both Coke and MTV, with both featuring prominently in Taal. With producers demanding exorbitant sums and no guarantee of success, it is a risk not many are keen to take.

Nokia spent several million dollars to advertise its products on X-Files. The movie, however, did not fare well at the box office and the brand did not benefit. Bollywood too has not had a very good year, with Kaho Na Pyaar Hai being the only major hit so far.

Samit Sinha, head of Mudra Advertising, Delhi said, “In-film advertising does not help in building a brand. In fact, what it does help is in product recall.”    

 

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