IndusInd first to take RBI hint, others set to follow
Industry upbeat
Profit hunters savage stocks
Bengal weighs power subsidy
DoT forum to discuss future issues
Asim provides for growth surge
Govt jams Saran entry into Reliance Telecom
Foreign Exchange, Bullion, Stock Indices

Mumbai, Feb. 16: 
IndusInd Bank today took the lead among local banks to announce a half percentage point cut in its lending rate, hours after the Reserve Bank (RBI) slashed the bank rate and cash reserve ratio (CRR) by 50 basis points. Other banks are likely to follow suit in the next few days.

IndusInd said its prime lending rate (PLR) � the rate at which it lends to its most preferred clients � will be brought down to 14.5 per cent from 15 per cent. The board of the bank is meeting on February 22 to ratify the decision.

Analysts expect others in the industry, including the leading nationalised banks, to announce reductions in their lending and deposit rates soon. They are likely to bring down their rates by 50 basis points across the board, they added.

For the moment though, most nationalised banks and financial institutions adopted a wait-and-watch stance. Officials pointed out that a final decision will be taken soon.

A senior Bank of Baroda official said the asset-liability committee of the bank will meet next week consider the implications of the cut in key rates. Officials of State Bank of India, including chairman Janki Ballabh, were not available for comment. The response of the country�s largest bank often sets the tone for rate revisions by others in the industry.

Bankers expressed mixed reactions to the RBI move. A few were surprised, while others said they had been expecting it for some time. There were some who felt that the 50 basis point cut was not enough, and that the central bank should have brought down rates by a percentage point.

�It is a welcome move, and expected. It will send signals for lending rate cuts,� said N Balasubramanian, deputy general manager, ICICI. He added the reduction is an �interim step� and a processor to a cut in small saving rates in the budget.

The reduction in bank rates and the CRR triggered a rally in the prices of government securities. Prices firmed by 35-40 paise amid brisk trading; the money market had discounted the cuts.

The spurt in gilt prices generated some profit-taking in the dying minutes of the session, raising hopes that the bond markets will look up in the immediate term as a result of the rate cuts.

Sources say call rates are likely to move in a new range, between 7.5 per cent to 9.5 per cent.


New Delhi, Feb. 16: 
New Delhi, Feb. 16: Industry has welcomed the cut in bank rate and cash reserve ratio (CRR) by half percentage points, expressing optimism that this measure will help contain the industrial slowdown.

�With the Union budget round the corner, this measure will boost industry confidence and the feel-good factor,� the Federation of Indian Chambers of Commerce and Industry (Ficci) said in a statement here.

�The timely measure will help contain the industrial slowdown to some extent, as it will enable companies gain easier and cheaper access to capital,� the statement added.

Confederation of Indian Industry (CII) president Arun Bharat Ram said his organisation had suggested a similar cut in interest rates during a meeting with Prime Minister Atal Bihari Vajpayee in December.

He said the move will help maintain the differential in interest rates between India and the US, which widened when the US Federal Reserve cut interest rates last month.

Ficci, however, pointed out that the cost of capital in India was still higher than that prevailing in most competing economies.

Newly-elected president of Assocham Raghu Mody said the move will make available over Rs 400 crore of bank funds for industry, which had been clamouring for cheaper funds.


Mumbai, Feb. 16: 
The Bombay Stock Exchange (BSE) today lost 107.67 points to an across-the-board selloff prompted by profit-taking and a scaling down of exposure in overbought shares.

This is the first time the key market barometer suffered a three-digit decline since the start of this year.

The losses marked a tame end to four days of gains during which the 30-scrip index soared tantalisingly close to the 4,500-mark. Barring a few hotel and auto firms, most of them were went through the shredder as operators sold their way out.

The broking fraternity said they had expected a technical correction, but had never reckoned with the kind of slump that sent shares sprawling in the post-noon trading session.

They blamed the selloff on what they called �momentum investors� in a hurry to scamper out of shares, and the fact that today was the last day of the current settlement.

The sharp losses in the index was the result of the hammering taken by 26 of the 30 stocks in the sensex; only Telco, Reliance, Bajaj Auto and Castrol came out unscathed and closed in positive territory, but could not stem the slide.

Shares opened firm due to all-round buying, largely because of the 61-point point in the Nasdaq Composite Index late on Thursday.

However, they gave up much of the gains after end-account considerations forced operators to download their holdings in cement, FMCG and pharmaceutical shares.

Hindustan Lever, which cheered investors with results that bettered market forecasts, was also the butt of investor ire. Other big losers were Gujarat Ambuja, Nirma Glaxo, E-Merck, apart from PSU shares such as State Bank of India and MTNL. The intensity of the selling was so intense that small operators were not able to execute their orders.

Market sources said operators, trapped in software counters, took an opportunity to sell their long positions at high prices.

The sensex started the day at 4458.73, scaled a high of 4462.11, plumbed an intra-day trough 4315.95 and closed at 4330.32.

Reflecting the weak trend, 135 shares from specified group recorded sharp losses while only seven finished with gains.

HFCL dipped by Rs 93.25 at Rs 909.50, Satyam Computer by Rs 13.15 at 364.80, Global Telesytems by Rs 32.80 at Rs 609.35, Infosys Tech by Rs 242.95 at Rs 6254.15, BHEL by Rs 10.05 at Rs 177.20, BSES by Rs 15.85 at Rs 234.55 and Glaxo by Rs 23 at Rs 433.70.

Other losers were HPCL which dropped by Rs 6.60 at Rs 182.45, Hindalco by Rs 40.90 at Rs 789.80, ITC by Rs 11.20 at Rs 811.55, Reliance Petro by Rs 2.45 at Rs 65.15, State Bank by Rs 10.35 at Rs 233.90, Zee Tele by Rs 13.05 at Rs 230.65, ICICI Bank by Rs 25.15 at Rs 159.25 and Wipro by Rs 114.35 at Rs 2828.95.

The gainers were Telco, which increased by Rs 4.85 at Rs 109.05, Reliance by Rs 1.65 at Rs 423.75, Castrol by Rs 2.65 at 280.65 and Bajaj Auto by Rs 2.75 at Rs 324.95.

CSE centre

The investor service centre of the Calcutta Stock Exchange was inaugurated by Ashok Bhattacharyya, minister for municipal affairs and urban development, at Siliguri today.


Calcutta, Feb. 16: 
The West Bengal government will consider providing a subsidy to the domestic consumers after the State Electricity Regulatory Commission fixes the new tariff structure for power utilities.

The SERC�the statutory tariff setting body�will be making its first award which will scrap the earlier convention under which industrial consumers were asked to shoulder the burden of cross subsidy as the state government tried to moderate the rate hike for domestic consumers.

�We have not yet placed our proposal before SERC. But once they declare the revised tariff, we will then come up with some subsidy scheme for domestic consumers. We want our industrial consumers to have power at competitive prices,� said Mrinal Banerjee, the state power minister at Bengal Chamber of Commerce & Industry today.

He also said the government will float a global tender for a foreign partner within a week for the Rs 280-crore optical fibre network for transmission of power. The West Bengal State Electricity Board will hold a 26 per cent stake in the project, while another 51 per cent will be with the foreign partner and the remaining 23 per cent with Powergrid Corporation.

The chamber had organised an interactive session with the state power minister where industry representatives highlighted their problems relating to power.

S.B. Ganguly, president of BCCI, said any further increase in power tariff for the industry would adversely affect industrial development in Bengal. At the same time, because of cross subsidisation, power producers are compelled to levy higher charges on industrial consumers. �This is a matter which requires a harmonious solution,� Ganguly said.

Reacting to it, Banerjee said, �We assure you that the power will be competitive compared to other states.�

The power minister said if the industry sets up renewable energy sources, WBSEB will buy power from them. �We will also provide financial support for such initiatives,� he said.

Reacting to the industry demand for making an all out effort to tackle transmission and distribution loss and pilferage, Banerjee said Rs 1200 crore is being spent to set up 31 transmission sub-stations and 71 distribution substations.

�This will arrest T&D losses. We are also conducting raids to put a check on pilferage of power,� he added.


New Delhi, Feb. 16: 
The department of telecommunications has set up a Telecom Development Council to create a forum for industry and government to discuss future policies and issues of convergence. The council will also recommend measures for the growth of the telecom manufacturing and services sectors.

The council, under the chairmanship of DoT secretary, Shyamal Ghosh, will have a two-year term. The initiative is important following the wave of reforms in the telecom sector, creating an environment for healthy competition and investor-friendly policies that are expected make world-class telecom services more affordable. The step will further accelerate the pace of liberalisation in this vital infrastructure sector.

The council will have members from government departments, including secretaries of the ministry of information technology, information and broadcasting and the department of space and from industry bodies, besides telecom and IT experts.

The government has also set up a committee to review the organisational structure of the Telecom Engineering Centre (TEC). The committee is headed by R. A. Mashelkar, director general, CSIR and secretary, ministry of science and technology.


Calcutta, Feb. 16: 
State finance minister Asim Dasgupta today presented a vote-on-account for the first four months of the next financial year with a projected expenditure of Rs 10,833 crore.

The minister has proposed a 23 per cent increase in the state�s plan expenditure for 2001-2002 at Rs 7,111 crore and a 15 per cent rise in total expenditure at Rs 32,490 crore. The overall deficit is pegged at Rs 3 crore, which is lower than the estimated deficit of Rs 8 crore in the current financial year.

The government will step up its expenditure in power by 21 per cent, agriculture and rural development by 17 per cent, irrigation and flood control by 10 per cent and industry by 8 per cent.

The growth in the state domestic product (SDP) is estimated at 7.6 per cent in the current year, higher than the 6.4 per cent rise in the national GDP. In terms of SDP, Bengal occupies the second slot in the country. Only Karnataka is ahead of it.

The index of industrial production in the current year is expected to grow 7.3 per cent compared with the national average of 5.8 per cent. The finance minister said it is possible this rate might rise above 8 per cent within three years. If this happens, it will be accompanied by 2 lakh fresh jobs.

Dasgupta said Haldia Petrochemicals has grabbed a 50 per cent market-share in the north-east. In all, 411 downstream units have come up at the project against a target of 354. These will offer 11,055 jobs directly, and 66,000 indirectly.

The government, he said, missed the Rs 4,300-crore sales tax collection target by Rs 300 crore. However, the target of Rs 510 crore in state excise duties will be met. Non-tax revenues are expected at Rs 1,331 crore against a target of Rs 815 crore.

The minister hinted at further simplifications in the tax structure.

�It is possible to reduce the large number of rates. Existing rates can be cut on some items and raised on others. The number of clearances and permits that firms in the state must obtain can be reduced. We plan to develop an online facility for submitting returns and taxes.�

Efforts are under way to turn around the 67 sick state undertakings in five years. Of this, 16 have already been revived while 10 proposals are pending with the government, which created a special fund of Rs 100 crore last year for the purpose.


New Delhi, Feb. 16: 
The government today turned down the request of former secretary of the department of telecom services, P. S. Saran, for a waiver of the two-year cooling period to enable him take up an assignment with Reliance Telecom. As a result, Saran may have to relinquish his current post as advisor in Reliance Telecom, to which he was appointed in December last year.

Saran retired on May 31 last year and joined Reliance Telecom as advisor within six months. Sources in DoT said, �The request to waive the cooling off period has been rejected by the Prime Minister�s Office. We had forwarded it to the department of personnel which in turn sent it to the PMO for its approval.�

According to the government�s directives, government officials who wish to take up employment in a private concern should wait for two years from the date of their retirement or resignation from services.

Saran could not be contacted for his comments. However, according to a senior executive in Reliance, �Saran has a very limited role in the company�s daily affairs. He advises on technical and services as and when needed.�

He was the first officer from the Indian Telecom Services to head the newly-created Department of Telecom Services, which became Bharat Sanchar Nigam Ltd (BSNL) after its corporatisation. A recipient of the Padma Shree, Saran�s appointment to the top job at DTS was supported by the ITS association, which lobbied for a technical person to head the division.



Foreign Exchange

US $1	Rs. 46.54	HK $1    Rs. 5.90*
UK �1	Rs. 67.63	SW Fr1	 Rs. 27.20*
Euro	Rs. 42.43	Sing $1	 Rs. 26.35*
Yen 100	Rs. 40.54	Aus $1	 Rs. 24.15*
*SBI TC buying rates; others are forex market closing rates


Calcutta			Bombay

Gold Std (10gm)	Rs. 4390	Gold Std(10 gm)	Rs. 4280
Gold 22 carat	Rs. 4145	Gold 22 carat	Rs. 3960
Silver bar (Kg)	Rs. 7525	Silver (Kg)	Rs. 7585
Silver portion	Rs. 7625	Silver portion	Rs. 7590

Stock Indices

Sensex		4330.32		-107.67
BSE-100		2219.68		-70.56
S&P CNX Nifty	1381.35		-35.35
Calcutta	134.27		-1.85
Skindia GDR	NA		-

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