Plan purge to heal battered Gujarat
Castrol share afire on hopes of better offer
NIIT pact with indya.com
Rules eased for moving excise goods on budget day
Cabinet clears move to energise power Bill
UTI Global Bank to raise fresh equity
Bajaj Auto ropes in Allianz for insurance foray
Third quarter exports cheer up Nasscom
Foreign Exchange, Bullion, Stock Indices

 
 
PLAN PURGE TO HEAL BATTERED GUJARAT 
 
 
FROM OUR SPECIAL CORRESPONDENT
 
New Delhi, Feb. 6: 
Fishing for funds to rebuild quake-crippled Gujarat, the Union government has decided to divert a part of its plan spending for relief work in the state by ‘weeding out’ delayed projects which duplicate results.

Sources said a high-level meeting between finance minister Yashwant Sinha and plan panel deputy chairman K. C. Pant was held today, and a decision taken to set aside Rs 1,000 crore for Gujarat in the current financial year and Rs 5,000 crore in 2001-02.

Pant did not confirm that the savings from the cut in plan spending would be diverted towards rehabilitation in Gujarat, sticking to the line that certain projects which have been ‘extended over several plans and lost relevance’ will be buried.

He said all central ministries and state governments were being asked to take a fresh look at their plan projects to identify the ones which could be dropped. Gujarat chief minister Keshubhai Patel Pant today wrote to the plan panel deputy chief, asking for more help in re-building his devastated state.

Both Pant and Sinha are members of the recently set up group of ministers on Gujarat, which is coordinating relief and rehabilitation work. The ministers are supposed to meet early on Wednesday, and today’s discussions between two money managers in the Cabinet is seen as a precursor to a raft of belt-tightening measures aimed at raising rehabilitation funds.

“We are not officially clubbing today’s move to prune the number of schemes to raise money for Gujarat. Doing so will spark calls for similar decisions from other states, which might pussy-foot or seek more resources for various calamities they may have suffered in the past. This is being officially termed as a normal, on-going exercise,” sources said.

Planning commission advisors say the money being squeezed out this year from normal plan expenditure will exclusively come from central plan schemes, which number more than 200. But next year’s target could hit some state initiatives.

The Centre’s gross budgetary support for next year’s plan-spend is pegged at a whopping Rs 1,01,000 crore. If Rs 5,000 crore is skimmed off for the re-building and reconstruction work in Gujarat, the amount will still be high at Rs 96,000 crore.

Plan panel advisors allayed fears the cut in spending will impact the growth rate, saying the amount saved by dropping schemes will be invested in Gujarat’s public infrastructure such as roads, schools, hospitalsand ports. This, they argue, will have the same effect on growth as money spent elsewhere in the country on building roads, dams, bridges. “It will generate demand for steel and cement in the same way, money in circulation will multiply in a similar manner.”

   

 
 
CASTROL SHARE AFIRE ON HOPES OF BETTER OFFER 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, Feb. 6: 
The Castrol India scrip today flared up on the bourses, gaining the maximum it could on the BSE because of expectations that parent B P Amoco and Castrol of the UK were likely to raise their open offer price to Rs 350 per share from Rs 311. Opening firm at Rs 273, the stock shot up to an intra-day high of Rs 293.15 before a bout of profit-taking forced it lower at Rs 285.30. A staggering 5.56 lakh shares, valued at Rs 15.92 crore, changed hands.

Market observers expect an announcement on the price revision in the next few days. The parent had announced an open offer for 20 per cent of Castrol India at an estimated cost of Rs 761 crore. However, there are unconfirmed reports that some of Sebi’s reservations on the original deal given to shareholders will force Castrol to increase the price. There was, however, no word from the company.

The lead managers to the offer, which followed BP Amoco’s acquisition of Burmah Castrol in July last year, were J M Morgan Stanley Dean Witter. At present, the foreign partner holds a controlling 51 per cent in the company, FIIs 9.47 per cent, mutual funds 0.67 per cent, FIs 4.92 per cent, banks 0.54 per cent and public around 33.4 per cent.

Castrol India, one of the major players in the lubes industry with a 20 per cent market share, has seven plants, of which the Silvassa unit is one of the world’s largest. In October last year, Castrol merged its commercial and consumer business by retaining its marine and industrial as separate divisions.

The company has, of late, decided to focus on the growing two-wheeler and agri segments, where it has planned to enter into strategic alliances with car, truck and two-wheeler manufacturers to develop products to be used in their vehicles.

Net profit dips

Castrol has reported a dip of 34.2 per cent in net profit at Rs 134.4 crore for the year 2000, compared to Rs 204.38 crore posted last year.

The board of directors also recommended a final dividend of Rs 5 per share, in addition to an interim dividend Rs 2.50 per share paid in September 2000, the company said in a release here today.

Net sales in the reporting year were up at Rs 1,237.81 crore as against Rs 1,195.55 crore last year. Net profit was lower as the substantially higher base oil cost had to be partially absorbed by the company due to increased competition and decline in the markets, it said.

   

 
 
NIIT PACT WITH INDYA.COM 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, Feb. 6: 
NIIT’s NetVarsity.com has appointed indya.com to market its 78 titles or educational capsules.

While indya.com will not host any such company on its site, NetVarsity, under the strategic alliance, reserves the right to join hands with other portals.

NIIT’s chief executive officer P.K. Vijay Kumar, said, “e-learning is expanding in a major way. Our alliance with indya.com will help us to aggressively position ourselves in this growing market. We are looking at a period of three years to contribute 10-15 per cent of the group revenues.”

According to indya.com CEO Sunil Lulla, “it is a win-win situation for us. We will position the Netvarsity at places which is frequently visited by youngsters particularly in the age group of 15-22 years.”

Meanwhile, the UK-based global systems integrator RedBrigade has entered into a strategic alliance with Jobcurry Systems Private Limited to recruit more than 185 IT professionals from India by year-end.

   

 
 
RULES EASED FOR MOVING EXCISE GOODS ON BUDGET DAY 
 
 
FROM OUR SPECIAL CORRESPONDENT
 
New Delhi, Feb. 6: 
The finance ministry today relaxed rules on physical movement of excisable goods on budget day.

Earlier controls were imposed on moving excisable goods from 6 pm of the day preceding the budget till midnight on budget day. Today’s order relaxes this by specifying controls on movement starting from the time when budget is tabled till midnight the same day.

It also does away with the system of declaring goods as at 6 pm on the day preceding the budget day.

Rule 223B of the Central Excise Rules 1944 which provided for this has been deleted.

Control orders are placed over goods movement from factories in order to stall any attempt to gain speculative profit from excise tax hikes or relief.

Today’s orders also say clearances for taking goods out during the time period when controls are in place can be taken if companies give a written undertaking that they will pay higher excise which would otherwise be applicable from the next day.

Directions have also been issued by the government to take appropriate measures to ensure that the procedures specified in this regard are strictly followed in respect of removals and clearances effected after the appointed time and to take action in case of any contravention

Finance ministry officials said the relaxations were part of its bid to do away with meaningless routine in excise orders. “We want to make things as simple as possible,” a CBDT member said.

“Earlier, the budget was made public at 5 pm but now budgets are being announced at 11 am. So actually we are reducing the time gap between two ex-factory shipments considerably. I am sure businesses will be quite happy with this,” he added.

   

 
 
CABINET CLEARS MOVE TO ENERGISE POWER BILL 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, Feb. 6: 
The Union Cabinet today approved the amendment to the Energy Conservation Bill 2000, following the recommendations of the parliamentary standing committee. The amendment will enlarge the definition of energy to include the power generated from nuclear substances. Besides, it will also expand the definition of energy audit to include the submission of technical reports and an action plan to reduce energy consumption.

The amendment proposes to club sectors like railways, transport, textiles, chemicals and petroleum refineries as energy-intensive industries. However, sensitive installations under the defence ministry and the Department of Atomic Energy have been kept out of its purview.

Last year the government had introduced the Bill in the Lok Sabha, following which it was referred to the standing committee. The committee made 31 recommendations, all of which were accepted by the government.

Announcing the Cabinet’s decision, Union minister for Parliamentary affairs, Pramod Mahajan said, “Out of the 31 suggestions, 14 are being implemented by moving amendments to the Energy Conservation Bill 2000, while six can be operationalised by making provisions. The remaining 10 recommendations will be implemented by administrative orders.”

The Bill seeks to keep in abeyance the imposition of penalties and powers of inspection for a period of five years. It will also reduce the quantum of penalties.

The Cabinet also decided to amend the Government of National Capital Territory of Delhi Act, 1991, and the Government of Union Territories Act, 1963, allowing Delhi and Pondicherry to raise resources from the market against the security of their consolidated funds. It will allow the two union territories maintain public accounts of their own and maintain a separate cash balance with the Reserve Bank of India (RBI).

This decision would enhance the liquidity of the said union territories which were till now allowed to borrow from the market, but not against security of their consolidated funds, Mahajan added.

The Cabinet also approved the accession to the International Convention of Maritime Search and Rescue 1979 by India. Further, it gave an in-principle approval to establish viable search-and-rescue-operations in India and constitution of a National Search and Rescue Board as required by the convention.

   

 
 
UTI GLOBAL BANK TO RAISE FRESH EQUITY 
 
 
BY A STAFF REPORTER
 
Calcutta, Feb. 6: 
UTI Global Bank, the new entity to be formed after the merger of UTI Bank with Global Trust Bank (GTB), plans to raise fresh equity in the next financial year, P. J. Nayak, chairman and managing director of the bank said today.

Nayak was in the city to address a seminar organised by the Indian Chamber of Commerce.

Talking about UTI Global Bank’s plans, Nayak said, “With the growth in assets, we have to take care of capital growth as well, for which we plan to raise equity capital. Whether it will be through the induction of a strategic investor, a public issue or an ADR float is yet to be decided.”

Nayak said the bank’s foray into insurance is being spearheaded by Ramesh Gelli. The inusrance venture will have an equity base of Rs 100 crore.

While UTI Bank will hold a 49 per cent stake , UTI will hold 10 per cent, Ramesh Gelli and associates 15 per cent, and the remaining 26 per cent will be held by the overseas partner.

   

 
 
BAJAJ AUTO ROPES IN ALLIANZ FOR INSURANCE FORAY 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, Feb. 6: 
Two-wheeler giant Bajaj Auto Ltd and Allianz AG, one of the world’s largest insurance and financial services groups, submitted an application to the Insurance Regulatory and Development Authority (IRDA) to enter the general insurance business in the country.

The joint venture, christened Bajaj Allianz General Insurance, will provide various products including motor, property, rural, engineering and health insurance.

Allianz’s international experience and expertise is expected to enable the venture to offer quality products enhanced by service to customers in India, said a press statement issued today.

“The distribution network, understanding of the local market and the strength of the Bajaj brand will enable a seamless gateway for taking the products and services to the target audience,” it added.

Allianz and Bajaj are also planning to enter the life insurance market and an application is likely to be filed in the near future.

“We are looking forward to our foray into the insurance market. With the combined strengths of Allianz and Bajaj, we aim to become a leading force in the Indian insurance market,” Bajaj Auto chairman and managing director Rahul Bajaj said.

Besides Bajaj Auto, the Reliance group is one of the few conglomerates that has expressed interest in entering both life and general insurance sectors. While its application for entry into the life insurance segment has already been cleared, the green signal for the other business is expected in the near future.

On the BSE today, the Bajaj Auto scrip finished higher at Rs 324.60 after opening at Rs 321 and rising to an intra-day high of Rs 327. The share, it may be recalled, has been notching up impressive gains on the stock markets over the previous weeks with operators forecasting a turnaround in fortunes of the company and some value buying as well.

Founded in 1890 in Germany, Allianz provides 60 million clients in over 70 countries with a broad range of services through an international network of subsidiaries.

At present, more than half of the group’s premium income is earned outside Germany. In the fiscal year, its gross premium income was around $ 54 billion while assets under management was around $ 740 billion. In India, it operates through a representative office which was established in 1996.

   

 
 
THIRD QUARTER EXPORTS CHEER UP NASSCOM 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, Feb. 6: 
The National Association of Software and Services Companies (Nasscom) today projected a positive outlook for the Indian software industry, based on the excellent third quarter results of Indian software exports and expectations of a strong performance for the sector in 2001.

Speaking to newspersons in a strategic review for this year, Nasscom president Dewang Mehta was upbeat on India’s export prospects.

“In the last few weeks there has been talk of the slowdown in the US economy and its possible effects on Indian software exports. However, following discussions with our member companies, analysts and major clients, we expect no slowdown whatsoever and are confident of meeting our export target of $ 6.24 billion during 2000-01 and $ 9.5 billion in 2001-02,” Mehta said.

Keeping in tune with trends developing in the overseas markets, the Indian software industry which changed gears last year to focus on e-commerce from the year-2000 (Y2K) coding, is now concentrating on products, patents and telecom software, according to the industry association.

Nasscom plans to achieve a target of $ 50 billion by 2008 in software exports and allied services, from $ 6.3 billion in the year ending March 2001, Mehta added. The target Nasscom has set for the year 2001-02 is $ 9.5 billion, a whopping rise of 50 per cent.

The Nasscom president was also bullish on communications software. He said deregulation worldwide and new wireless technologies, such as high-speed third generation (3G) transmission were expected to make communications software emerge as the fastest and most profitable growth segment over the next five years.

Export of communications software is slated to grow to $ 2.3 billion in the calendar year 2003 as telecommunications operators move to mesh voice, data and video over the internet, the industry association forecast.

“A cut in IT expenditure could even increase the quantum of outsourcing to India as that will help US companies improve their productivity and positively impact their bottomline,” he further added.

“In the rapid changing international IT landscape, Nasscom will provide the perfect platform to evolve strategies that will help ensure that Indian software exports continue to grow by more than 50 per cent even beyond 2002,” Mehta said.

Mehta was speaking on the eve of Nasscom 2001, a premier IT event, scheduled to start from Wednesday. Nasscom expects business worth over Rs 2500 crore to be generated through this event.

   

 
 
FOREIGN EXCHANGE, BULLION, STOCK INDICES 
 
 
 
 

Foreign Exchange

US $1	Rs. 46.38	HK $1	Rs. 5.85*
UK £1	Rs. 68.05	SW Fr 1	Rs. 27.90*
Euro	Rs. 43.35	Sing $1	Rs. 26.30*
Yen 100	Rs. 40.48	Aus $1	Rs. 25.20*
*SBI TC buying rates; others are forex market closing rates

Bullion

Calcutta			Bombay

Gold Std (10gm)	Rs. 4495	Gold Std(10 gm)	Rs. 4425
Gold 22 carat	Rs. 4245	Gold 22 carat	Rs. 4095
Silver bar (Kg)	Rs. 7725	Silver (Kg)	Rs. 7795
Silver portion	Rs. 7825	Silver portion	Rs. 7800

Stock Indices

Sensex		4375.29		+4.82
BSE-100		2240.37		+10.11
S&P CNX Nifty	1387.10		+4.50
Calcutta	131.86		+0.02
Skindia GDR	N.A.		-
   
 

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