Duty waiver for power plant imports
Ministry wantsbank-specific wage pacts
ICICI, Lombard in insurance pact
Paswan gives 3.2 lakh free phones to telecom staff
Gujarat Ambuja plansgrinding unit in Bengal
Internet plazas to redefine stock trading
Foreign Exchange, Bullion, Stock Indices

New Delhi, Oct 4: 
The Cabinet committee on economic affairs (CCEA) today waived customs duty for all imported power plant equipment, cleared a $ 310 million issue of American Depository Shares by Satyam Computers, approved the setting up of an 1800 megawatt power plant in Tamil Nadu and fixed the standard minimum price for sugar manufacturers at Rs 59.50 per quintal for the year 2000-01.

The approvals were among a batch of 12 proposals that were cleared by the committee.

The SMP for sugar was raised by Rs 3.40 per quintal, or 8.5 per cent, from last year�s level of Rs 56.10 per quintal.

The CCEA also approved Satyam Computer�s proposal to offer an Employee Stock Option Scheme worth $25 million linked to the ADS.

A 10-year tax holiday was granted to nuclear power projects. Until now the benefits of customs waiver on power project imports and a tax holiday were limited to mega power projects using other fuels.

The proposal also provides a guaranteed electricity offtake by the centrally-owned Power Trading Corporation which will assume the responsibility of selling the power to state electricity boards and setting up transmission linkages with the help of Power Grid Corporation Ltd.

The proposal will benefit the Tarapore power project in Maharashtra and the Kondakulam plant in Tamil Nadu.

The CCEA also approved the setting up of an 1800 megawatt power plant with an LNG terminal at Ennore in Tamil Nadu. The $1,426 million project will be set up by Tamil Nadu LNG Limited with an equity of $426 million and debt of $1000 million.

The committee sanctioned the Integrated Dairy Development Project for non-Operation Flood and hilly areas, which will be executed in the ninth plan period. The total outlay for the project will be Rs.125.73 crore for the ninth plan and Rs.210.50 crore for the tenth plan period. This project will cover 265 districts in the country.

It also approved a national project to improve milk production in cattle and buffaloes. The 100 per cent centrally sponsored project will be implemented in two phases. In the first phase, the government proposes to spend about Rs 402 crore to cover 10 million buffaloes. About 15,000 people are likely to be involved in the project.

The national watershed development project which is being implemented in the Ninth Plan, has also been restructured.

The Rs 1,030 crore project will cover 2.25 million hectares of land. This will help in offering special schemes for irrigation of 2.25 million hectares.

The CCEA changed the structure from 40 per cent support for management and 60 per cent support for development efforts in 1999-2000 to 75.5 per cent support for development efforts and 22.5 per cent for management works.

The committee also approved the integration of 27 centrally sponsored scheme in to one scheme which will be known as macro management scheme. The government has set an outlay of Rs. 760 crore for the year 2000-01.

The CCEA also approved the setting up of 21 megawatt gas-based power project in Tripura. The Rs 96 crore project which is expected to be completed in five years will offer power to Tripura, Mizoram and Meghalaya.

The government has also allowed Hindustan Petro Chemicals Limited to go ahead with its Rs 9806 crore Bhatinda project with or without a joint venture partner.

CCEA also approved gauge conversion from Gandhidham and Palanpur to reduce the journey time between Kandla port and Palanpur.    

New Delhi, Oct 4: 
The finance ministry is considering a proposal that will end the system of industry-wide wage negotiations in nationalised banks.

A note prepared by the ministry says industry-wide negotiations must give way to bank-specific talks so that labour and managements of weak banks have the right incentives for recovery.

Wages went up 12.5 per cent in 25 PSU banks after the last round of negotiations. Only three weak banks �United, Uco and Indian Bank � were given a choice of accepting or rejecting it.

The ministry is of the opinion that compliance with Basle Committee recommendations have made it necessary for banks to arrive at their own set of understandings with employees.

�The wage bills, and earnings per employee, will become more important in the changed scenario. Each bank has to be allowed to make decisions on its staff strength and wage bills. There cannot be a single rule for all,� officials said. The note says it is not possible for weak banks to keep paying salaries like the strong ones without going bankrupt.

Strong banks such as State Bank and Punjab National Bank could use this to reward employees with higher wages or incentives, while relatively weaker banks could use this to clamp a ceiling on wages � something which could help them in restructuring. Since this is the objective, and the proposal is in line with the government�s thinking on PSU wage revisions, it is likely to find official acceptance.

However, the move will be a political hot potato as bank unions are known to be among the strongest in the country. There are fears that a policy that allows different pay-scales across banks could create a groundswell of opposition.

At the same time, the straight-jacketed and forced recruitment through the Banking Service Recruitment Boards (BSRB) will have to be abolished by phasing out these boards, the note says.

Profitable banks which have met conditions set out by the Narasimhan committee already have some autonomy in recruitment. However, the ministry feels if PSU banks are to compete with private banks, they should be given complete autonomy in deciding who they should hire. Banks must have the right to set their own norms for various posts, and should even go in for campus recruitment in certain areas.

�Basically, banks should be able to hire people at all levels directly from the market,� officials in the ministry said. PSU Bank chiefs have also pressed for these rights in their meetings with finance ministry officials held earlier this year.    

Mumbai, Oct 4: 
ICICI Ltd today announced its entry into general insurance business through a joint venture with Lombard, one of the oldest property and casualty insurance companies of Canada.

According to the terms of agreement, ICICI will hold 74 per cent of the equity of the newly formed company while Lombard will pick up the remaining 26 per cent.

Sanjiv Kerkar, senior general manager of ICICI, will head the company and it will offer both commercial and personal lines of general insurance products to corporate and retail customers. A detailed business plan of the joint venture is expected to be completed in four weeks.

ICICI has already announced its entry into life insurance in association with Prudential of the UK. For general insurance, it was looking for a joint venture partner with complementary skills that was necessary for enduring and successful business relationship.

�Given ICICI�s strong corporate relationships, increasing retail customer base and technology enabled multi-channel distribution network, it was looking for a partner which offered relevant domain knowledge, a culture oriented towards quick decision making and business processes based on high technology,� a press statement issued by the financial services provider said.

After a careful assessment of the global arena, it opted for Lombard which provided the optimal fit on this criterion, ICICI added.

The joint venture agreement was signed by between Lalitha Gupte, joint managing director of ICICI and Prem Watsa, chairman & CEO, Fairfax Financial Holdings, the parent company of Lombard.

Lombard, which was set up in 1804, offers the full range of commercial and personal insurance products to the Canadian property and casualty marketplace. Headquartered in Toronto, Lombard Canada acts as the holding company for its operations which are run by its specialist companies.

With direct written premiums exceeding Canadian $ 500 million and assets of over Canadian $ 1 billion, it is placed among the top insurance companies in Canada.

Corp Bank plans

Corporation Bank will hold a 50 per cent stake in its proposed life insurance venture and is close to inking a deal with an Indian and foreign partner.

�We have informed the Reserve Bank of India (RBI) about the proposed venture where the bank would hold a majority 50 per cent stake,� Corporation Bank chairman and managing director (concurrent charge) N S Gujral said.

He said a formal application for the Rs 100 crore venture would be made to the apex bank by this month after the Indian and foreign partners are finalised.

�We are negotiating with three parties � a top ranking industrial group based in New Delhi, a leading public sector bank based on the west coast and a Calcutta-based bank. One of them will be finally chosen,� Gujral said.

The bank has also appointed Ernst & Young to shortlist the foreign partner for offering the remaining 26 per cent in the company.

�The consultant is expected to complete the shortlisting within next week,� Gujral said.

The plan for taking another Indian partner in the life insurance venture stemmed after the RBI issued a directive that an individual bank can hold a maximum 50 per cent stake and more than 50 per cent would only be considered on a selective basis.

Gujral said an additional Rs 50 crore outflow on account of the insurance venture would reduce its capital adequacy by 0.8 percentage points from the present 12.8 per cent.    

New Delhi, Oct 4: 
Communications minister Ram Vilas Paswan has managed to quietly keep his promise of granting free telephones to 3.2 lakh telecom employees including employees of the newly corporatised Bharat Sanchar Nigam Limited (BSNL) at a cost of Rs 327 crore.

Paswan had issued the telephones through a circular two days before Department of Telecom Services (DTS) and Department of Telecom Operations (DTO) were corporatised.

However, employees who are on deputation and also regular employees in the telecom public sector units like Mahanagar Telephone Nigam Limited, Videsh Sanchar Nigam Limited and Telecommunication Consultants India Limited (TCIL) will not be entitled to this benefit.

A circular dated September 28, 2000 says, �The concession would be admissible to all employees in Department of Telecommunications (DoT)/DTS/DTO on regular basis, which includes Central Secretariat Services, Civil/Electrical and architectural wings and accounts and finance staff for the period they work in DoT/DTS/DTO as well as employees of wireless wing and telecom factories. The PSUs/Autonomous bodies under ministry of communications will not be entitled for any concessions extended herein.�

Paswan, who announced the grant of concessional phones to telecom employees, had termed it an effort, �to infuse a sense of belonging in the employees of the department and motivate them to work for the expansion, growth and betterment of the telecommunications services.�

These telephones will bear no registration, rental or installation charges. The concession will carry the benefit of 150 free calls every two months.

Paswan had said, �This decision will be a big morale booster for employees who are serving more than 2.6 crore telephones in the network.�    

Calcutta, Oct 4: 
Grasim Industries, the Rs 5,000-crore Aditya Birla group flagship, is going ahead with a plan to set up a cement grinding unit in West Bengal at an investment of Rs 100 crore.

The move follows the setting up of similar units in the state by Gujarat Ambuja group and Larsen & Toubro, its two major rivals. A unit in the state will bring the company closer to the markets of the region, helping it serve customers in the eastern region better, besides cutting freight costs significantly.

�We have recently launched a strong marketing initiative in the eastern region, particularly in West Bengal. We have found it important to have manufacturing units near the markets where several cement brands are fighting for business,� they added.

Sources pointed out that the proposed cement plant may have a capacity of one lakh tonnes initially, which can be raised later if there is better demand. The company is expected to take a final decision on setting up the plant shortly. Grasim, which is in the process of developing a national cement brand that will replace its eight existing brands, has ambitious plans to become a market leader in terms of production.

�We occupy the third position in terms of production volumes among the cement manufacturers in the country. However, we are still not considered a major producer simply because we do not have a big brand. It is important to develop a national brand so that the construction industry can identify with it quickly,� a senior Grasim official said.

The company has embarked on a massive brand restructuring exercise for its cement division to attain a nationwide presence. It has appointed the Gurgaon-based Management Development Institute to prepare a brand strategy.

The company currently has eight cement brands, but none of them has a nation-wide reach. It plans to either merge all brands with Grasim, or to retain the three most popular ones from the present lot � Grasim, Vikram and Birla Super.    

Mumbai, Oct 4: 
The National Stock exchange (NSE) and the Bombay Stock Exchange (BSE) are close to creating �brokers plazas�� a platform on the internet that will allow investors to directly transact business with stock exchanges.

NSE managing director R H Patil told The Telegraph that deals on the Web will account for 50 per cent of all transactions in five years. �It has happened in South Korea and I don�t see any reason why it should not happen here,� he said.

�It will be the second revolution in the stock markets since the launch of screen-based trading,� says Deena Mehta, vice-president of BSE, whose exchange has forged a partnership with Tata Consultancy Services (TCS). The technology that will be used in used in internet plaza will be superior to those which are now available on foreign exchanges, such as New York Stock Exchange and the Nasdaq.

The ease and transparency in Net trading will lure retail investors to the plazas, says Patil. Investors can trade directly on a real time basis after getting a clearance from brokers.

Unlike the markets in the west, the orders will be taken to brokers who, in turn, will re-route it to stock exchanges. Investors who trade this way may not send orders on fax and phone, and need not be at the mercy of brokers for the orders.

Both the premier stock bourses have conducted roadshows, inviting brokers to set up sites on their portal. �DotEx Plaza�, is the name given to NSE�s net trading platform while BSE has called it �WebX plaza�. The two rivals are trying to launch the trading portal by this month-end to coincide with Diwali.

While NSE�s initiative would come through its wholly owned infotech subsidiary-NSE-IT and Citibank owned I-Flex, BSE has tied up with infotech giant Tata Consultancy Services (TCS) for this venture.

Satish Naralkar, executive director at NSEiT said: �The technical team of iflex is modifying the software to meet our requirements.�

Though the two exchanges are yet to empanel the brokers, NSE has already made a small beginning by finalising the charges for those who want to avail of this platform.

Stock markets circles say Larsen & Toubro�s infotech subsidiary, LTIT, is also planning an independent �brokers plaza�. However, the moot question is whether it would be a success since it is not affiliated to any of the major exchanges.

The BSE is at an advance stage of creating an internet platform for trading, a senior exchange official said that it was to aid smaller brokers who had no resources to set up their own trading sites.

While it is win-win situation for investors, stock exchanges and brokers, the introduction of plazas may spell the doom for sub-brokers according to the stock broking community. They will increasingly become irrelevant after the plazas gain popularity among secondary market investors.

Stock market circles say they expect the plazas to hit the survival of small exchanges in the country. The Net platform will enable members of smaller exchanges to trade on them.    


Foreign Exchange

US $1	Rs. 46.05	HK $1	CLOSED
UK �1	Rs. 67.07	SW Fr 1	CLOSED
Euro	Rs. 40.33	Sing $1	CLOSED
Yen 100	Rs. 42.30	Aus $1	CLOSED
*SBI TC buying rates; others are forex market closing rates


Calcutta	Bombay

Gold Std (10gm)	CLOSED	Gold Std (10 gm	4535
Gold 22 carat	CLOSED	Gold 22 carat	4195
Silver bar (Kg)	CLOSED	Silver (Kg)	8105
Silver portion	CLOSED	Silver portion	8115

Stock Indices

Sensex	4160.41		+24.86
BSE-100	2096.37		+13.51
S&P CNX Nifty	1297.80		+17.80
Calcutta	CLOSED		-
Skindia GDRNA	NA		-

Maintained by Web Development Company