PM vows high-growth hard budget
Sheth-Mahindra warmup call for Gesco shareholders
CII asks govt to reverse slowdown
Yamaha not to up stake in Escorts JV

New Delhi, Dec 2: 
Spooked by the slowdown in economic growth, Prime Minister Atal Behari Vajpayee today said the budget for the next financial year will seek to push up growth to 8 per cent. At the same time, he reminded the industrialists who met him that soft options to push forward reforms are over and the country should be prepared for some tough steps.

Vajpayee also assured adequate funds support for infrastructure development and vowed to strengthen anti-dumping measures to deal with the expected flood of goods when the last batch of import restrictions are lifted next March.

“It (budget) will definitely be a forward looking budget and go beyond the mere arithmetic of numbers to deal with issues and policies which can put us on high growth path,” Vajpayee said.

“We need a fresh growth impetus” as there were indications of a slowdown in the first half of this year in the services sector which accounted for nearly half of the country’s GDP. Elaborating on the negative trends in the industry, Vajpayee said the issue of industrial revival was of critical importance to the government and asked the trade and industry to come forward with suggestions.

He told the third meeting of his reconstituted Trade and Industry Council that the other issue that was worrying him was the impact of total withdrawal of quantitative restrictions (QRs) on Indian industry and agriculture.

Industrialists Ratan Tata, Mukesh Ambani, Nusli Wadia and G.P. Goenka were among others who attended the meeting.

“Finance minister Yashwant Sinha has come with an open mind to the council meeting, but all of us must recognise that soft reform options are now over,” Vajpayee said.

“Further measures entail difficult decisions, both by the central and the state governments. They also require building a political consensus,” he added.

After the meeting, PMO secretary N.K. Singh told reporters, that “the Prime Minister has made it clear that the government will do everything possible to accelerate growth especially through finalising the contracts for the infrastructure development through release of funds from the India Millennium De posits (IMD) and World Bank funding.”

Speaking to the captains of the industry, Vajpayee said, the government has reconstituted trade and industry council to suggest necessary tools to improve the economy and also to meet the competition.

The government has accepted as part of its international commitment to fully lift QRs by April 1, 2001. “The dismantling of QRs forms part of the international arrangements which we have accepted and are obliged to honour. We have recently taken some steps to prevent dumping...These measures would be strengthened in the coming months,” the Prime Ministers said.

Steps taken to deal with dumping included a wide range of measures such as ensuring transparency in invoice value, tariff measures, adherence to standards and specifications and the initiation of anti-dumping action.

Vajpayee asked the Indian industry to adapt itself to face competition as an over protectionist approach would only foster inefficiency and lead to stagnation.

“We must have strategy and a design” to enable Indian industry to face the inevitable challenge of competition, he said adding there was need to harmonise the interests of consumers with the interests of industry by combining the gains in productivity with the virtues of a non-disruptive transition. The Prime Minister also asked the council to come forward with measures which would impart necessary forward momentum to the country.

Reacting to concern on of industry over smuggled and counterfeit goods flooding the country, Vajpayee assured the industry captains the government would seriously look into their concern.

CII president Arun Bharat Ram said the industrialists sought a 15-year tax holiday for the power projects to increase power generation in the country.

Ficci chief G.P. Goenka said, “Temporary glitches need to be corrected particularly in the infrastructure sector and the Prime Minister assured that the IMD funds can be utilised for rural roads and other infrastructure sector.”    

Mumbai, Dec 2: 
The Gesco takeover tussle today entered a decisive phase with the Sheth-Mahindra Realty alliance informing the shareholders that its revised offer of Rs 44 a share will open on December 17.

The original offer price of the promoters and their associates for Gesco was Rs 36 a share. But the price had to be raised after Mahindra Realty bought the International Finance Corporations’s stake in Gesco at Rs 44 a share.

All eyes are now on Abhishek Dalmia to see whether his company Renaissance Estates raises its offer price or call it quits. As of now, Dalmia had been quoted as saying that he was not going to revise either the size or the price of his offer for Gesco stake.

However, with the deadline to revise the offer due only by January 6, Dalmia has plenty of time for rethink.

According to market observers, the Sheth-Mahindra offer may not see much of a response in the beginning. This is because shareholders generally prefer to wait till the last moment to decide whether to accept the offer or not.

Incidentally, HDFC had extended a line of credit to the Sheth-Mahindra alliance for picking up more Gesco stake. The Dalmias have also asked for a similar letter of credit to finance their open offer. However, they are yet to hear from the housing finance company.

While it is believed that HDFC’s Deepak Parekh is providing critical inputs to the Gesco promoters and their associates, the Dalmias have hired Guru-Vardan, S.S. Gurumurthy’s consultancy, to strategise their move. Neither of the warring parties are short of political or financial clout.

According to a copy of the letter sent to the Securities and Exchange Board of India (Sebi), the Sheth-MRIDL alliance has informed all the shareholders of Gesco about the details of their offer and also that of the Dalmia offer.

The letter points out that the Sheth-Mahindra offer closes on January 15. According to the takeover code of Sebi, the Dalmias’ offer for Gesco at Rs 27 per share will also remain open till that date.

Market sources said the communication is an effort to make the shareholders aware of the developments relating to their company. They argued that a section of small shareholders many not at all be aware of the latest developments of the sizeable increase in the offer price.    

New Delhi, Dec 2: 
The Confederation of Indian Industry (CII), in the first edition of its India Economic Policy update, has urged the government to take short-term and long-term measures to reverse the slowdown in the capital and intermediate goods sector.

The policy update points out that the slowdown in industrial growth has been mainly confined to the capital goods and intermediate goods sectors.

The chamber added that at this stage, what is needed is a strong signal from the government that revitalisation of the reform process remains highest on its agenda.

The CII had outlined a series of measures to combat industrial slowdown in a report presented to the government, with a key recommendation pertaining to getting a few infrastructure projects off the ground.

The policy update has expressed that the government has started to clear these projects on a priority basis.

The update pointed out that it was on a representation made by CII that the department of company affairs issued a notification revising the Companies Act, making it mandatory for the statement showing details of employees drawing remuneration beyond the prescribed limits in the reports of board of directors of companies, to mention the prescribed limits.

Accordingly, the existing ceiling of Rs 6 lakh per annum has been increased to Rs 12 lakh per annum. For part of the year, the existing limit of Rs 50,000 per month has been revised to Rs 1 lakh per month.    

New Delhi, Dec 2: 
Yamaha Motors today ruled out any move to further hike its stake in its joint venture with Escorts.

However, the joint venture has been rechristened Yamaha Motors Escorts Limited from Escorts Yamaha Motors Limited, following the increase of Yamaha’s stake in the company.

Takehiko Hasegawa, president of Yamaha Motor Company today said, “We respect the contribution of our partners and have no intentions to convert the company into a 100 per cent subsidiary. We recently acquired 24 per cent as part of an agreement and there will be no more purchase by us.”

“We have increased the capitalization of our joint venture here in India. As a symbol of this new corporate commitment, we have also changed the company’s name from Escorts Yamaha Motor Limited to Yamaha Motor Escorts Limited,” he added.

At present, Yamaha Motors hold 74 per cent stake in the company while 26 per cent is held by the Rajan Nanda-promoted Escorts Group.

Launching the new economy class bike for Indian customers called ‘Crux’ meaning the ‘Southern Cross Star,’ Hasegawa said the company will soon launch more products in India.

Crux, priced at Rs 41,200 (ex-showroom) in Delhi has a 7.6 bhp, 106 cc engine with a 4-speed gearbox and an 11 litre petrol tank. It offers 71 kms per litre under ideal road conditions.

Yamaha plans to introduce another variant of Crux with a 100 cc engine. The company already has more than six models and many variants in its stable.

It has set a target of selling 23 lakh units by April-March 2001-02.

According to T. Suganuma, managing director Yamaha Motors Escorts Limited, “Crux is targeted at the 25-40 age bracket, who dominate the large volume segment.”

“We carry a premium image in the 2-stroke performance segment in India. We hope to attain this position in the 4-stroke category also in the near future. Our mid-term strategy is geared to achieve this objective,” he added.    


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