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The government should set up its own independent debt management office to take over, in a phased manner, the present functions discharged by the RBI, the group said in its report submitted today.
It said �a majority of central banks are prohibited from participating in the primary issues of government debt and it is time that the RBI falls in line with this general practice.�
�There should be well calibrated legislative measures to separate debt management and monetary policy functions.�
For such a purpose, it said that the government should set up its own independent debt management office to take over, in a phased manner, the present functions discharged by the RBI, the group said.
The separation of the responsibility was necessary but not a sufficient condition for an effective monetary policy which would require a reasonable degree of fiscal responsibility, it added.
It was of the view that RBI needed, by way of autonomy, a headroom to operate monetary policy and this would be possible if the two were separated. As the debt management is gradually distanced from monetary policy, the government and RBI should progressively work towards greater clarity in publicly setting out the objectives of the monetary policy, it said.
The group emphasised that the present RBI Act was �anachronistic� and there should be an early move to amend it giving sharper focus to the objectives of the monetary policy.
Transparency in monetary policy and greater responsibility and accountability for RBI would be meaningful only if there was legislative amendment to the RBI Act, it said.
The group said the objectives of the monetary policy should be set out by the government as part of its overall economic policy package and it should seek parliamentary approval for them.
It was also of the view that it would be necessary to provide, through legislative amendments, reasonable security of tenure to the RBI top management. This was essential if the apex bank was to be clearly assigned specific responsibilities in the conduct of monetary policy.
Expressing satisfaction over finance minister Yashwant Sinha�s budget speech for according greater operational flexibility to RBI for conduct of monetary policy and regulation of the financial system, the group suggested that an early action should be taken by amending the relevant legislation.
In terms of transparency, the setting out of principal objective of monetary policy would also provide the broad contours for exchange rate policy, it said.
The group recommended that the forex market�s efficiency would be greatly enhanced if, without in any way comprising the freedom of action on exchange rate policy, the RBI were to reveal, on a regular basis separately, its direct and indirect intervention.
The group has recommended that RBI should set up a seven member Monetary Policy Committee (MPC). The government, it said, should consider setting out to the RBI a single objective of the monetary policy that is inflation rate, it said adding that once this was done the remit of MPC would be 0clear.
The group said RBI should be given unfettered instrument freedom and held fully accountable for attaining this objective.
On transparency in other financial policies, the group stressed the need for greater disclosure and said where there is regulatory forbearance it should be undertaken transparently.
�The regulatory regime should be rule based with minimum of discretion,� it said.
The group commended the recent RBI initiative to release a discussion paper on Prompt Corrective Action (PCA) and said it was hopeful that after receiving appropriate feedback, the apex bank would put in place a PCA regime as part of a commitment to adopt the international best practices and comply fully with the core principles of supervision.
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Coming so soon on the heels of the world�s most famous geek, the GE chief made it clear that power lay at the base of the infotech revolution itself.
On Day 1 of his three day India visit, Welch said, �You don�t have a chance to place yourself in the 21st century without lots of power. We can talk about computers and information technology but unless you have the power to do it, you will miss the next revolution.�
The GE chief executive, rated as one of the best CEOs in the world, said a country like India with over a billion people has a �huge potential,� but the government must invest heavily on infrastructure. �Countries that do not invest in infrastructure will get left behind,� he said.
�When you think of digitising India, there will be a massive amount of power required and I pray to this government that you have to push and push and push to invest in infrastructure,� Welch said.
However India�s real assets lay in its is its vast pool of skilled manpower. �In order to capitalise on the billion people here you have to give them the tools. And to win you need to capitalise on tomorrow�s technology,� he added.
Welch warned that red-tapism in the Indian bureaucracy would not help in exploiting the talent available in the country. �There is a remarkable group of people with great talent, somewhat stifled by bureaucracy.�
Though Welch has not promised making huge investments, he said that the group would be tapping the intellectual capital of the country. �Our sales have been a little over $ 1 billion in the last 10 years. It is not such a big growth, but our growth of intellectual capital here has been great,� he added.
Elaborating on GE�s business plans in the country, Welch said the company was looking to sign up with more Indian business partners and look at new business areas like the recently liberalised insurance sector.
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The RECLM is designed to manage fluctuations in the demand and supply of power. The company�s research and development facility at Delhi has developed both the REMS and RECLM systems.
Power ministry sources said, �We were concerned by the very high rate of low transmission side distribution transformers and the frequent shutdown of 11 kv feeders due to perennial power shortages. A study was conducted by the Rural Electrification Corporation (REC) which recommended radio-based solutions to manage and prevent it. Shyam Telecom has been conducting a pilot project in Rajasthan.�
The company is likely to set up three REMS pilot projects for the governments of Delhi, Uttar Pradesh and Punjab. The projects are likely to commence by the year-end.
According to Rajeev Mehrotra, managing director Shyam Telecom, �We are a telecom company but with the coming of the convergence era, it is very difficult to focus on telecom only. We are responding to the demands of convergence. This is our first foray into the power sector and a project has also been undertaken for the Rajasthan State Electricity Board (RSEB). It is a Rs 5 core RECLM pilot project, under which we have developed the online software-based supervisory control and data acquisition system (SCADA).�
The SCADA system would provide online monitoring of three phase voltage, three phase currents, cumulative energy, oil temperature and level of every transformer and also monitor the moulded case circuit breaker (MCCB) which is fitted on the electric poles. The system works seamlessly by sending status data through a radio modem integrated in the remote terminal unit fixed on top of the electricity poles to master the control station.
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Pradeep Kalra, vice president, (sales and marketing) of group company Jaypee Hotels said, �We have identified land in Jaipur. We hope the hotel with about 150-200 rooms will be up and running by 2002.�
With the setting up of the new hotel in Jaipur, the company would be able to cover the golden triangle of Delhi, Agra and Jaipur. The group has four properties, two in Delhi, one in Agra and one in Mussorrie. Kalra said since the company already has hotels in Mumbai and Agra, another hotel in Jaipur would make immense business sense. The group is also exploring the possibility of setting up hotels in the other three metros of the country.
�Currently Calcutta and Mumbai have an excess capacity and the cities are not very inviting. But as and when we get the right opportunity we will venture into these cities,� Kalra said.
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The task force, with representatives from both industry and government institutions, will focus on weaving a new policy with public and private partnership in tourism.
�The government�s role would be restricted to promoting and regulating (tourism) in the coming years,� said Kumar.
The task force would meet every two months to discuss issues pertaining to the tourism industry. The government also plans to step up interaction between states to boost the sector.
After initiating disinvestment in Indian Tourism Development Corporation, Kumar said, �We have received proposals from some states for divestment of Yatri Niwas in the states.� Madhya Pradesh has placed such a proposal maintaining the present tariff structure.
The government is open to offering up to 74 per cent stake in Yatri Niwases to private players on a �build-own-operate (BOO) till perpetuity� basis.
There are plans to build state-of-the-art Paryatan Bhavans in all the 32 states and union territories with private participation which would be a one-stop shop information.
�The Centre and state governments would have 13 per cent stake each and 74 per cent stake would be offered to the private players,� he said.
The minister said the government is taking measures to ensure that �atithee� (tourist) gets the necessary �swagat� (welcome with a human touch), �suchana� (information through the net), �suvidha� (facilities) and �suraksha� (safety).
Kumar asked the industry to contribute to the National Cultural Fund and suggest plans for restoring and maintaining the heritage sites. The fund is exempted from income tax.
He said that the government-owned Indian Tourism Development Corporation would be disinvested by March 2002. �The government has expedited the process of ITDC�s disinvestment. It would be completed within the next one-and-half-year.�
The move comes after the government decided to move out of the hospitality business. �It is not the government�s mandate to manage hotels,� he said.
A survey conducted by CII and management consultants AT Kearney said inadequate promotion of tourism by the government and poor infrastructure were hampering tourist inflow .
The exit survey conducted at Delhi�s international airport indicated that most of the 600 respondents had visited the country on suggestions by friends and relatives.
�The travel agent or advertisements and brochures were really not the key influencer of the decision to visit India,� said Simon Bell of AT Kerarney. He was speaking at a tourism conference organised by CII here.
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Be it financial institutions like ICICI or a non-banking finance company like Countrywide, cut throat competition has driven every finance company to do precisely that � undercut the competitor with more gifts. Even if giving away the freebies means committing harakiri, as the market moves towards sliding interest rates.
While ABN Amro, one of the biggies in the market, is dangling free cellular phones before prospective customers, HDFC is luring customers with a free holiday package if they avail of its car loans, or even a central locking system.
That�s not the end of the story.
With a car loan from Standard Chartered one may strike gold � literally. The bank is giving away gold coins with its car loan schemes.
�The freebies are proving to be an efficient way of securing an edge over the competition,� sources said.
And making the customer for once, feel like a king are the various tailor-made schemes for individuals, with all players rushing to provide the better one.
What�s more, almost all banks offer loans on the deposits held by customers, finances against shares, privileged schemes, zero per cent interest schemes and hard-to-miss special loan terms for credit card holders.
�Various loan schemes for people of all categories help to widen the customer base,� sources said.
The good news is that the freebies are not confined to the big breathtaking beauties like the Hyundai Accent, but also to the everyman�s dream Maruti.
The competition has also driven down interest rates from its previous high to a more affordable level.
The current interest rate now varies in the range of 9-16 per cent, depending on the nature of the car, the amount of the loan, or even the duration of the loan.
The interest rates are generally lower for the more expensive cars like Accent and higher for the small family cars like Maruti or Matiz.
According to HDFC sources, cars like the Honda City command an interest rate of 13 per cent while the smaller ones like Maruti 800 come at a rate of around 14.5 per cent.
And its not the new ones who get away with all the best schemes. The old ones may have lost some of their appeal, but attract buyers all the same. In fact, second hand car loans are a lucrative proposition.
Most banks provide loans for second hand cars, although at a marginally higher interest rate, hovering around the 20 per cent mark.
Sources revealed that ABN Amro disburses about Rs 7 crore per month in the Calcutta segment, which on an average accounts for 350 cars, while Standard Chartered claims to sanction about 200 car loans per month. HDFC lags behind with a modest revenue of Rs 2 crore, as against its projected figure of Rs 3 crore per month.
So, its time to go in for that dream machine now.