Rapid-fire reforms in growth gambit
UTI investor services to be integrated
No doles for rural power
Ficci wants advisory panel on competition

New Delhi, June 24: 
The Centre plans to push a strong agenda for reforms for the Tenth Plan period which begins next fiscal. This will include an 8 per cent GDP growth target, an accelerated disinvestment target pegged at Rs 16,000 crore a year, a stiff 25 per cent hike in tax collections and downsizing central government staff by three per cent.

A meeting between Prime Minister Atal Behari Vajpayee, finance minister Yashwant Sinha and Planning Commission deputy chairman K.C. Pant is slated to clear this programme ahead of a meeting of the National Development Council where all chief ministers will debate the country�s future economic agenda.

Sinha is apparently trying to push through the ambitious targets despite reservations expressed by other Cabinet colleagues who feel such stiff targets could cause the party its own share of political problems.

Disinvestment has turned into a key electoral issue ever since the controversial manner in which Bharat Aluminium Company was sold. Many BJP ministers feel that a far more low-key approach is required.

But both Sinha and Pant have been arguing in favour of a stronger line, explaining that if the government wanted to attain the 8 per cent per annum growth target as well as maintain non-plan expenditure at current levels, it had to raise revenue collections.

This has become even more necessary since Pant is insisting that the gross budgetary support for the tenth plan be raised to 5 per cent of the GDP.

Sinha, however, has promised Pant that he will try to do his bit by enlarging the scope of taxation and by extending the value added tax (VAT) to all service sectors.

On the expenditure front, the finance minister has promised to slash subsidies and the pension liability by bringing in �innovative schemes�.

However, Sinha and Pant have not been able to agree on the Planning Commission�s demand that external aid should be delinked from gross budgetary support.

Another contentious issue would be a decision to revise the loan-grant ratio in central assistance to states, to raise the loan component.

This issue is likely to figure at the NDC meeting and might be difficult to push through.

The Centre also wants to get rid of most centrally-sponsored schemes by farming them out to states.

Pant and Sinha have decided that only those schemes will remain with the Centre which have an inter-state character, or have a national security angle, or which involve more than one state or is externally aided.

All other schemes will be farmed out to states. The Centre will wash its hands off all responsibilities for these project other than funding them.


Mumbai, June 24: 
Unit Trust of India (UTI), the country�s largest mutual fund with a hamper of schemes meant for all ages and needs, has drawn up an integration plan that could change the way its clients are serviced and products distributed.

The financial Goliath, which manages Rs 57,000 crore worth of investor funds, will centralise its operations by taking on the role of registrars which is currently performed by a team of six external agencies and its own regional offices. The revamp will entail a shift in the focus of its branch offices, which are now christened UTI Financial Centres (UFC). The 54 UFCs have so far been selling schemes and acting as a registrar to Unit Scheme US-64, its flagship product.

The mutual fund major is working with Tata Consultancy Services (TCS) to soon put in place a generic software that can handle all schemes which are currently on offer.

UTI executive director Brij Gopal Daga told The Telegraph that the moves are prompted by the need to streamline functioning and the desire to give investors greater convenience at a time when they are showing increasing signs of switching over to the new band of private mutual funds. �We have to ensure that our schemes perform better, and to provide after-sales service on par or better than others.�

There are plans to have all schemes processed at state-of-the-art service centre coming up on the outskirts of Mumbai, which would be managed by UTI Investor Services (UTISL) and run by 500 employees working in two shifts. Jobs which had been farmed out to M N Dastur and Mafatlal Consultancy Services as registrars are now performed by UTISL. While M N Dastur was the registrar to the Mastershare scheme, MCS had the mandate to service investors of Master Equity Plans (MEPs) and Monthly Income Plans (MIPs).

A study undertaken by UTI found that investor complaints were higher in schemes handled by external registrars. For instance, US-64, which is managed by UTISL, had comparatively fewer complaints than the rest. Daga said with generic software in place, UTI could devise schemes in three to six days, which otherwise took three to six months.

The revamp would give financial centres the time and resources to concentrate on marketing, instead of being bogged down in servicing. Daga confirmed this by saying UTI officers will be engaged almost entirely in marketing. �In fact, they will do some micro-marketing of schemes,� he added.

VRS investment

In a significant change, UTI has decided not to launch a new scheme for tapping the large amounts paid out as VRS. Daga said that UTI�s G-Sec fund, Bond Fund and US-95 (balanced fund) were good alternatives to attract the this pool of funds.

In another shift, the mutual fund major has decided not to go ahead with the proposal to merge its eight Master Equity Plans (MEPs). Unit Trust of India had proposed a major restructuring of its portfolio under which the number of schemes would be scaled down by having them merged.

In 2000, when the proposal was first mooted, the nine MEPs had a combined value of Rs 2377.64 crore. However, the benefits accruing from merging the nine schemes would have been frittered away as Sebi stipulated unit holder meetings and postal ballots would be costly proposition, Daga said.


Calcutta, June 24: 
In a move that indicates the beginning of the end of high subsidies for rural electrification, the West Bengal government is planning to ask the rural areas to bear a part of the total cost of transmission and distribution.

The state government has set a target of bringing 1300 new �mouzas� during the current year under the �cost sharing� scheme.

Under this new scheme, the villagers will be asked to bear the cost of the transformers in their own areas.

Further, for each transformer, there will be a committee comprising the members of the beneficiary villages, which will look into the maintenance of the transformer.

�This will serve various purposes. At least a limited part of the costs can be raised from the people while the transformer committee will look into the proper maintenance of every transformer since they are the people who will be the worst affected if the transformer bursts,� says Sujan Chakraborty, chairman, West Bengal Rural Electricity Development Corporation (WBREDC).

The most important objective of the move, however, is to stop the rising incidence of power thefts.

At present, the pilferage contributes to almost over 45 per cent of the West Bengal State Electricity Board�s (WBSEB) transmission and distribution losses.

According to the state power minister Mrinal Banerjee, the WBSEB had identified 90,000 cases of illegal hooking and tapping last year and around 1200 FIRs were lodged. Police had arrested over 550 people for power thefts.

But this is just a minuscule figure while the real number of thefts is much higher.

Banerjee said power theft is a crucial problem which the existing government machinery is not adequate to tackle. The people of the rural areas have to be mobilized to arrive at a tangible solution to this problem, he said.

�Now the transformer committee will save the grid from being hooked, because of their own safety,� Chakraborty observed.

However, the WBREDC chairman feels that although the days of a free lunch system are over, the government will have to continue to subsidise rural electricity as it cannot generate profits.

�Everywhere in the world, rural electricity has had to be subsidized and I have not so far seen options by which rural power can be made viable,� he said.

The state government has an ambitious plan to take power to all. This year, the government has allocated 22 per cent of its total expenditure to the power sector.

Banerjee said rural electrification alone will get a fund of Rs 281 crore in the current financial year.

Outlining the plan for connecting all the villages in the state with power in four years time, Banerjee said 30,025 mouzas have already been connected out of the total of 37,910 mouzas in the state.

According to him, the government connected 510 mouzas during the last financial year.


New Delhi, June 24: 
The Competition Commission should be bestowed with an advisory role for a period of three to five years to gain experience about the scope of the proposed competition law, before bestowing it with excessive discretionary power, feels the Federation of Indian Chambers of Commerce and Industry (Ficci).

Ficci has also urged the government, to address the issue of the competition law in three stages as Indian companies are smaller than international standards and have to be strengthened before facing global competition.

The second stage should resolve the issue of �abuse of dominance.

�The Competition Bill will prohibit predatory pricing by a dominant enterprise, but the method to determine the below cost pricing in the regulations to be framed by the commission is unclear,� said Ficci.


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