Numbers bust tax buoyancy myth
Wipro third-quarter net profit surges 199%
Operators to cut cellular charges
ICICI Bank plans to tap market again
Calcutta Telephones set to ring in Net service
HCL Tech income zooms 139% to Rs 80 crore
Bajaj Auto net jumps 32%
NJMC opens doors to conversion agents
Foreign Exchange, Bullion, Stock Indices

New Delhi, Jan 21 
The finance ministry�s claim of tax buoyancy in the current financial year is beginning to ring hollow. For a start, there is no sign of any buoyancy; what�s worse is that the government should consider itself lucky if it is able to restrict the shortfall in tax collections to Rs 10,000 crore.

Official sources say central excise collections have been rising since September last, but achievements so far are way below the target. Finance minister Yashwant Sinha had fixed a 19 per cent growth target for excise collections. The target was somewhat deceptive, considering the fact that there was no petroleum cess last year. If the revenue amounting to Rs 5,000 crore by way of petroleum cess is excluded, the targeted growth in excise collections comes down to 9 per cent.

The excise projection for the current year was based on the revised estimates in the budget. Later, it turned out that the actual collections were far below the revised estimates. On the basis of actual collections, the growth target for the current year would have worked out to 26 per cent.

The acceleration in industrial activity has reduced the shortfall in excise from the earlier estimated Rs 12,000 crore to Rs 5,000 crore. The situation can still change, depending on the performance of the industrial sector.

Customs collections are expected to be near target, thanks to the relentless surge in crude prices. The 20 per cent duty on imported crude brings in a lot of revenue for the government. This is precisely why the finance ministry is resisting the government�s decision to reduce the customs duty on crude. Even with the crude-induced gains, it is estimated that customs collections will fall short of the target by Rs 1,000-2000 crore.

The maximum shortfall this year is going to be in direct tax collections. In the eight months till November, direct tax collections, both income tax and corporate tax, were only 39 per cent of the budget estimates.

During the corresponding period last year, direct tax collections amounted to 46 per cent of the budget estimates. It is doubtful that the remaining 61 per cent collections in direct tax will be made up in the last four months of the financial year.

The Rs 10,000-crore disinvestment target will not be achieved either. Only Rs 1,000 crore has been realised so far. The government is unlikely to repeat last year�s trick of imposing an equity swap on PSUs. However, it may come out with some schemes to mobilise at least Rs 5,000 crore from PSU disinvestment.

The picture is equally dismal on the expenditure side. The supplementary budget presented in December was for an unusually high figure of Rs 20,000 crore. Kargil-related defence expenditure was pegged at only Rs 3,243 crore while Rs 3,676 crore had been set aside for arrears under defence pensions.

This could not have been unanticipated. Official sources say the finance minister shied away from providing for this amount in the budget to show a smaller fiscal deficit.

The extent of additional expenditure will be known only after the next supplementary budget, which will be presented with the budget for the next financial year.    

Mumbai, Jan 21 
Wipro today reported a staggering 199 per cent spurt in net profit for the third quarter ended December 31 at Rs 79.9 crore compared with Rs 26.7 crore in the corresponding period of the previous financial year.

Third-quarter net sales rose to Rs 570.1 crore from Rs 416.1 crore. While other income was pegged at Rs 6.7 crore (Rs 7.1 crore), total income stood at Rs 576.8 crore (Rs 423.2 crore).

For the nine-month period ended December 31, the company recorded a 28 per cent jump in sales and other income at Rs 1,562 crore over the corresponding period of the previous year. Profit after tax, before the non-recurring charge, was Rs 203 crore, up 118 per cent from Rs 93.1 crore over the same period of the last financial year.

Explaining the non-recurring charge, Wipro said it sold 46.94 lakh shares of Wipro Net (WNL) which brought in an extraordinary income of Rs 109.5 crore. After the sale, the parent�s holding in Wipro Net stands reduced to 47 per cent.

The company also carried out a comprehensive review of Wipro Finance (WFL).

Wipro had invested an additional Rs 45 crore as equity, Rs 20 crore as convertible preference shares and Rs 30 crore in the form of redeemable preference shares in WFL which has been hit by sluggish loan recoveries and falling non-fund income. Later, it offloaded 4.83 crore WFL shares and 25 lakh preference shares for Rs 81 crore.

A company release issued today said Wipro Technologies, which specialises in software services, posted a 62 per cent jump in third-quarter sales and other income at Rs 706 crore. Its profit, before interest and tax, grew 61 per cent to Rs 193.4 crore over the corresponding period of the previous financial year.

On the other hand, Wipro Infotech, the systems and services business division of Wipro, reported a 20 per cent rise in sales and other income at Rs 540.9 crore in the nine-month period. Profit before interest and tax stood at Rs 18.4 crore.

During the third quarter ended December, shareholders of Wipro Ltd and Wipro Computers (a fully owned subsidiary of Wipro Ltd) approved a scheme of merger between the two companies. The plan came into effect from April 1999.

Wipro Consumer Care and Lighting, the division of the company which manufactures cooking fats, soaps, toiletries and lighting systems and solutions, notched up a 20 per cent growth in operating margins. However, sales and other income at Rs 241 crore was lower by 14 per cent compared with the previous corresponding period.

The drop in turnover, Wipro said, was due to a 43 per cent decline in vanaspati sales.

Toilet soap sales, however, increased by 13 per cent in value terms.    

New Delhi, Jan 21 
Metro cellular operators have decided to cut both rental charges and airtime rates following an order of the Delhi high court today.

The court directed cellular operators in the four metros�Delhi, Mumbai, Calcutta and Chennai� to cut the rentals on mobile phones from Rs 600 per month to Rs 475. The order takes retrospective effect from November 1999.

A two-member bench of Justice S.N. Variava and Justice S.K. Mahajan also directed the operators to bring down call charges from Rs 6 per minute to Rs 4 per minute from February 1, 2000.

The court permitted the telecom operators to improve the rental and airtime packages of their subscribers.

The court also directed cellular operators in state circles to lower the rentals from Rs 600 to Rs 500, with retrospective effect from November 1, 1999, and cut airtime charges to Rs 4.50 per minute from February 1, 2000.

The billing cycle under the new arrangement will start from February 1. The court has directed cellular operators to adjust the arrears within three months from February.

The Telecom Regulatory Authority of India (TRAI) had also recommended the same rates under the new revenue sharing arrangement of the National Telecom Policy that took effect from last April.

The court has asked cellular operators to increase the pulse rate for calculating airtime charges. The pulse rate for each call would be calculated at 30 seconds against the existing 60 seconds, at the rate of Rs 2 per pulse. Trai had suggested a pulse rate of 20 seconds.

A COAI release said the operators would also implement the court�s directive on pulse rate, billing norms and arrear pay-backs.

�We have agreed to implement the court�s order and hope to bring in more customers. This will also give the operators the opportunity to offer various schemes to suit different customers,�� said T.V. Ramachandran, executive vice-chairman of Cellular Operators Association of India (COAI).    

Mumbai, Jan 21 
ICICI Bank Ltd is planning to tap the domestic capital market, for the second time, to raise its capital adequacy ratio. The board of directors of the bank will meet on Monday in this regard. �A proposal relating to offering of the bank�s shares in the market will be put up at the meeting,�� H. N. Sinor, managing director of ICICI Bank told the The Telegraph. Sinor however, refused, to divulge the details of the issue.

Analysts said the bank is likely to issue fresh equity rather then divesting the promoter�s stake as it did during its maiden offer in 1997 when ICICI�s stake got reduced from 100 per cent from 75 per cent.

The bank�s plan is to shore up its CAR above the 10 per cent mark; currently its CAR at nine per cent is in conformity with RBI stipulations, but raising the figure is necessary as the bank is expanding its asset base. ICICI holds around 75 per cent equity in the bank. The public holds 13 per cent, financial institutions hold four per cent and foreign investors hold eight per cent.

ICICI Bank has finalised plans to enter into the credit card business with internet access to customers, ICICI managing director and chief executive officer K V Kamath told reporters here today.

Kamath said the bank�s credit card holders would now have the convenience of accessing credit card information including the facility to view, print statements and obtain details about their payments.    

Calcutta, Jan 21 
Calcutta Telephones will assume a new role, that of an internet service provider, (ISP) by the end of March.

Calcutta Telephones will be linked to the national internet backbone (NIB) by the end of March, sources in the department of telecom (DoT) said.

It will be able to provide internet services after completion of the linkage operations. Sources said that work for linking Calcutta Telephones with NIB will start only next week. Videsh Sanchar Nigam Ltd (VSNL) will provide the international gateway to Calcutta Telephones.

Inaugurating the eastern India IT show COMPASS 2000, Tapan Sikdar, minister of state for telecommunications said, �All measures are being taken to enable Calcutta Telephones become an ISP soon.�

About 90 participants, representing all segments of the IT industry have set up 164 stalls and pavilions at COMPASS 2000.    

Mumbai, Jan 21 
HCL Technologies� net income jumped 139 per cent to cross Rs 80 crore in the first half ended December 31, 1999 in a surge, the company said, that was fuelled by higher operating margins.

The company, which had recently launched its shares for trading on bourses in a roaring debut, reported a 19 per cent leap in revenues to Rs 397 crore over the same period of 1998-99.

Operating margins jumped to 47.1 per cent from 36.9 per cent. In a major boost to its bottomline, offshore earnings rose to 60 per cent from 49 per cent. First-half gross profits increased 52 per cent to 187 crore.

HCL Tech attributed the growth in margins and earnings to higher contributions from its internet and e-commerce businesses, buoyant offshore income and higher billing rates.

The company said it had clinched new long-term business contracts which it expects will generate revenue-streams worth $ 170 million over the next five years.

These are in addition to the business acquisition contracts announced earlier.

�We have a well-defined strategic business plan, a strong global management team, which, combined with our unique strengths, gives us a good position in the global infotech industry. I look forward to continued support from our shareholders and I am confident we have a promising future,� HCL Tech chairman and chief executive officer (CEO) Shiv Nadar told reporters after unveiling the results.

The company�s innovative acquisition strategy, under which revenue-linked share options are granted to acquire incremental businesses, has proved successful as it transforms potential clients into business partners over the long term.

The company had recently completed its maiden public offer which raised Rs 823 crore while its market capitalisation surged past a staggering Rs 24,000 crore.

After the listing, the promoters control 73.72 per cent while the public holding is 18.49 percent.    

Mumbai, Jan 21 
Bajaj Auto Limited reported sales of Rs 1,071.77 crore in the three months ended December 31, an increase of 20 per cent from Rs 886.86 crore sales in the corresponding period of the previous year.

Net profit went up 31.84 per cent to Rs 128.64 crore from Rs 97.56 crore in the previous year.

The encouraging performance was attributed to a 4.5 per cent increase in scooter sales: the promotional scheme, �Bajaj Crorepati Hungama�, was hugely successfully while new products, such as Bravo and Legend, were also well received by customers.

However, there was profit booking in the Bajaj scrip which fell by Rs 12.50 to Rs 403.

The company�s scooterette sales jumped 110 per cent following the success of the Spirit model, while sales in the step-through market rose 16 per cent after the launch of M-80 major. The company�s market share in this segment increased by almost seven percentage points to over 80 per cent. In the Japanese motorcycle segment, the sales growth was 46 per cent, led by good response to the �Boxer� model in the rural segment and �Caliber� in the urban market.

The company produced 3,54,333 units of two and three wheelers compared with 3,39,888 units in the previous year, an increase of 4.25 per cent. It sold 3,74,215 units during the period compared with 3,28,856 units in the previous year, an increase of 13.87 per cent.

The company is setting up a 19.6 MW wind mill farm in Maharashtra at a cost of Rs 95 crore for captive consumption of its plants at Akurdi, Waluj and Chakan.

The earning per share during the period was Rs 42.93 compared with Rs 32.57 in the previous year.

Total sales and other income for the nine months ended December 31, was Rs 2957.19 crore compared with Rs 2707.80 crore in the corresponding period of the previous year, an increase of 17.65 per cent.

At the Auto Expo in New Delhi the company displayed 13 new models of two and three wheelers.    

Calcutta, Jan 21 
The Centre has decided to lease out six jute mills of the ailing public sector National Jute Manufactures Corporation (NJMC) to private firms. It said earlier this week conversion agents would be appointed for the mills.

The move has generated a lot of enthusiasm among private jute mill-owners, raw jute suppliers and jute-goods traders. A number of jute mill-owners, especially the industry leader Arun Bajoria, have been trying to take over the NJMC mills. The government�s move might make it easy for him and others to tap their huge capacity.

Though NJMC has said preference will be given to public sector undertakings, state government companies and workers� co-operatives, trade sources say said there is little hope that they will be keen to act as conversion agents. The contracts, which would be given for the current jute year ending in June, will primarily cover conversion of raw jute to sacking, hessian and yarns. These could be renewed after the five-month test-run, depending on the performance of conversion agents.

All but one of the NJMC mills with capacities ranging from 200 tonnes per day to 48 tonnes per day are located around Calcutta. The smallest one, the 28-tonne per day RBHM Mill, is in Bihar.

B.M. Mahapatra, who took over as chairman and managing director of NJMC earlier this month, told The Telegraph several key jute players were interested in tapping the corporation�s idle capacity by taking them on lease.

The NJMC mills have been out of production since October last year after raw jute traders stopped supplies. NJMC owes them Rs 33 crore while its dues to the Jute Corporation of India stand at a whopping Rs 200 crore. Since November, the Centre stopped providing funds for salaries. The corporation, which has a combined daily capacity of 525 tonnes, has an accumulated loss of Rs 1,300 crore and has been losing Rs 120 crore annually in the past 10 years.

Mahapatra said appointing conversion agents was the only way the corporation could maintain machines and pay wages to more than 21,000 workers. Almost 10,000 workers have either retired or opted for a voluntary retirement package in the past 10 years.

In his previous stint at National Textile Corporation (NTC), Mahapatra had introduced a similar conversion arrangement at NTC�s units in the eastern region. Under Mahapatra, who is also the chairman and managing director of NTC�s eastern region subsidiary, ten of the 16 mills here were given away to the yarn dealers in the Sutapatty area of the city.

The arrangement had functioned smoothly without much resistance from trade unions. Workers of NTC mills working under conversion agents get their wages on time. In other divisions, including in the head-office, the payment of salaries and wages are delayed by over a month.

However, trade unions are unlikely to allow the conversion arrangement to be implemented in NJMC as smoothly as it was done in NTC.

The central trade unions in the jute sector are meeting to discuss ways to block the lease-out of NJMC mills.    

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