Rousing reception for Jaswant
Markets relish change of guard
Exports grow 4% in May
Reliance firms raise $ 400 m
Ministry wants power tariffs fixed before tax
Wipro logs into key NYSE index
Motorcycles rule the Indian roads
HCL Insys sets August date for Bengal PC unit
Village public phone target stays elusive
Foreign Exchange, Bullion, Stock Indices

New Delhi, July 1: 
Industry is delighted with the appointment of Jaswant Singh, the most articulate face in the Vajpayee-led NDA government, as the finance minister. And it hopes that Singh � who kept his poise and sangfroid during a tense standoff with Pakistan that tested his skills at diplomatic brinkmanship � will bring his deft handling of explosive situations to the deepening problems that dog the economy.

However, industry was equally keen not to show how gung-ho it really was over the appointment, careful to couch its words of welcome in language that would not offend the former incumbent � Yashwant Sinha � who has swapped portfolios with Singh.

�Going by all the indicators, the Indian economy is turning around. We are confident that the new finance minister will continue to give a vigorous push to the reforms process,� a terse Ficci statement said.

�Singh is articulate, has engaged the world and followed a clear strategy and direction in building international relations and we expect to see the same clarity and direction in economic policy-making. This is a win-win situation and CII will continue the strong partnership with them on both the economic and the international fronts,� said CII president Ashok Soota.

K.K. Nohria, president of Assocham, gave full marks to the departing finance minister Yashwant Sinha. �Singh understands the economy equally well and is competent to handle the portfolio,� he added. Rajat Nandi, director general of the Society of Automobile Manufacturers, said: �We are willing to work under any guidance. Sinha had been good to us; we hope this change will help us go forward.� Sushil Suri, chairman and MD of Morepen Laboratories, said, �I think Singh will be able to foresee and position India globally. We need a finance minister who should work like a CEO not a neta.�

Venugopal Dhoot, chairman of the Videocon group, said Singh should concentrate on bringing down the fiscal deficit and hasten the Fiscal Responsibility Act.

Tough task ahead

Jaswant Singh was the man that Prime Minister Atal Behari Vajpayee had picked as his finance minister in his short-lived 13-day government in 1996. In 1998, when the BJP and its allies won a thumping victory, Singh was again the first choice before the before the swadeshi lobby intervened to foist Yashwant Sinha in the North Block.


Mumbai, July 1: 
Markets perked up today on hopes that Jaswant Singh, the country�s new finance minister, would do a better job than his predecessor in turning around the economy and encouraging investment.

The departure of Yashwant Sinha, who had earned a reputation for being a harsh taxman who presided over the haemorrhage of state-owned financial institutions, sent ripples of excitement through Dalal Street, where investors nudged the BSE sensex up 44 points to 3,289.

�The stock markets will react positively to the development. A change is welcome,� a senior BSE broker said about the new role for Singh, who switches to the finance ministry at a time when his stock as external affairs minister could not have been higher.

There were others who preferred to be cautious, saying the new man in North Block must be given time before deciding whether he is a success story. Cement and public sector undertakings led the rally, their shares picked up by foreign institutional investors and operators who saw better times in a change of guard.

PSU shares were under the spotlight because of expectations that their privatisation would gather pace.

In BSE�s specified group, 116 shares, including 26 from the index, notched up sharp to moderate gains, while declined. ACC, Grasim, Gujarat Ambuja and L&T advanced.

Rupee hardens

Mirroring the buoyancy on exchanges, the forex market looked up as the rupee rallied to 48.83/84 against the dollar. The four-paise gain over Friday�s finish of 48.87/88 was fuelled by dollar supplies over the weekend.


New Delhi, July 1: 
India�s exports rose 4 per cent year-on-year in May�but it was adrift of the April growth rate of 18 per cent.

Exports during the month of May was valued at $ 3,768.79 million which is 3.85 per cent higher compared with $ 3,629.24 million during the same month last year.

In rupee terms, exports registered an increase of 8.44 per cent at Rs 18,465.87 crore as against Rs 17,028.49 crore in the same month last year.

Although the growth was down in comparison to the month of April 2002, the 18 per cent growth in April pushed the overall export growth during the first two months of the current financial year which notched a healthy 10.46 per cent growth at $ 7.44 billion as against $ 6.74 billion in the corresponding period a year earlier.

Imports during the period April-May 2002 posted a decline of 3.69 per cent at $ 8.44 billion, leading to an improvement in trade deficit to $ 994.94 million, which is lower than the deficit at $ 2023.99.

Imports during the month of May, however, registered a decline of close to 6 per cent at $ 4.40 billion as against $ 4.67 billion in 2001.

The decline in imports coupled with the increase in exports helped contain the trade deficit to $ 637.03 million compared with $ 1045.02 million in May 2001.

The import of 300 sensitive items registered a decline of close to 4 per cent during April this year, mainly on account of a sharp drop in imports of edible oil, cotton and silk products.

Imports of the 300 tariff lines was pegged at Rs 688 crore during April as against Rs 714 crore in the same month a year earlier, a negative growth of 3.72 per cent.

As per the provisional data released by the Directorate General of Foreign Trade, the dip was mainly attributed to a significant decline in edible oil imports which fell to Rs 342 crore compared with Rs 416.54 crore in 2001.

There was, however, a sizable increase in imports of spices which surged almost six times to Rs 138.61 crore from a mere Rs 24.96 crore in April 2001.

Imports of rubber, milk, food grains and small scale industries� products also increased during the period.


Mumbai, July 1: 
Two unlisted infrastructure firms from the Rs 67,000-crore Reliance group have raised $ 400 million through a private equity placement with overseas investors.

Reports had suggested last week that the group intends to offer 15 per cent in Reliance Utilities and Power (RUPL) and Reliance Ports and Terminals (RPTL) along with a global depository receipt issue to raise funds for capital expenditure and capacity expansion.

�We are happy with the overwhelming response from international investors to the $ 400-million equity offering by RUPL and RPTL,� said Anil Ambani, managing director of Reliance Industries, the group flagship.

�The success is an affirmation of the global competitiveness of RUPL�s and RPTL�s operations and of the huge potential of the infrastructure sector in India,� he added.

StanChart was reported to be the merchant banker to the private share issue. RPTL was expected to garner $ 240 million, while RUPL would mop up $ 160 million. Leading foreign investors � like StanChart Barclays, HSBC, Deutsche Bank, Commonwealth Development Corporation and French insurer Axa � are believed to have participated in the placement of shares, likely to be listed on the Luxembourg Stock Exchange.

The ease with which the shares were lapped up is also remarkable because it has happened at a time when the group founder and chairman, Dhirubhai Ambani, is battling for his life at Mumbai�s Breach Candy hospital. Admitted there last Monday after suffering a stroke, his condition continues to remain critical.

Reliance Utilities and Power runs a 360-MW captive power plant for the group�s refinery at Jamnagar in Gujarat. Reliance Ports and Terminals operates a port that receives the crude oil processed at the Jamnagar Refinery.


Calcutta, July 1: 
The power ministry may ask utilities to calculate user charges before taking into account taxes in the new tariff policy to be announced shortly. If the proposal is accepted, it will lead to lower rates for consumers � the most important objective of the policy.

Power ministry sources said the new tariff policy envisages a switchover to a system of calculating pre-tax return from post-tax returns to give customers a fair deal. Under the existing arrangement, taxes are being passed on to consumers in tariffs they are required to pay.

There are various grades of taxes that impact electricity tariffs. The Centre taxes imports of fuel, while excise duty is levied on locally produced fuel. Then, there are taxes on income dividend and a host of other indirect levies, which push up the cost of electricity.

In states, the taxation becomes unsustainable with very high imposts on fuel which, in some regions, are as high as 33 per cent. There is also a duty on captive power, which makes sale of surplus energy from these units non-viable. The taxes range from Octroi to entry taxes.

High taxation and resultant rise in tariffs are impacting the economy in a negative way, forcing a large number of industries to either shut down or slide into sickness.

G.D. Gautama, chairman of West Bengal State Electricity Board, said: �State governments have made representations to the power ministry on this particular issue. We hope that the new tariff policy will address the matter so that consumers do not suffer.�

The draft policy says tariffs will be lower for thermal power plants, which are more efficient. �There may be reasonable classifications not only for categories like hydro, thermal, gas, transmission and distribution but also within each slot. That would be based on different parameters like the kind of technology and fuel used. There could be different norms for thermal stations designed only for peaking purposes or for pumped storage stations,� the draft policy says.

Electricity regulatory commissions must determine operational norms and costs while fixing tariffs. There should be uniform application of these norms across a category.

As long as surplus power is available, supply at rates that yield a modest margin over variable costs may be necessary for pumped storage stations to improve viability.

Differential tariffs for peak and off-peak hours may be introduced to provide incentives and flatten the load curve, the policy said.

The policy says that the tariff should be determined through a genuinely fair, open and transparent process, and in case of independent power producers (IPPs), it must be done only through international competitive bidding. However, IPPs that have already set up units through MoUs under the existing policy can continue that way.


Mumbai, July 1: 
Wipro today said its stock has been included in New York Stock Exchange�s (NYSE) technology, media and telecommunications (TMT) index. Its American Depository shares are listed on the Big Board. The NYSE TMT index tracks the top 100 technology, media and telecommunications stocks listed on a bourse that has the highest capitalisation in the world.

Companies in the index have a market capitalisation of $ 2.3 trillion � that is 45.7 per cent of the global market cap of TMT companies at $ 5.1 trillion. NYSE�s TMT index also equals the value of 4,000 companies in the Nasdaq Composite Index, a Wipro release said.

The index is the first to gauge the global TMT market, with all components priced during US trading hours.

Commenting on Wipro�s entry into the NYSE TMT index, Suresh Senapaty, company executive vice-president (finance), said: �We are delighted to be part of this prestigious global index, which comprises global leaders in technology, media and telecommunications. Inclusion in this index is a re-affirmation of Wipro�s leadership in the technology services market and will significantly enhance the brand.�

The TMT index is one of the four gauges launched by NYSE to track the performance of companies in key market segments. The indices are � the NYSE US 100 (the 100 largest US companies), NYSE International 100 (the 100 largest non-US companies), NYSE TMT, and NYSE World Leaders, which combines components of the US 100 and International 100 indices.

Wipro is the first PCMM Level 5 and SEI CMM Level 5-certified infotech company in the world. It provides comprehensive IT solutions and services, including systems integration, Information Systems outsourcing, package implementation, software application development and maintenance, and research and development services to corporations globally.

In India, Wipro provides infotech solutions and services to corporate clients. These include system integration, network integration, software solutions and IT services. It also has a strong presence in the niche market segments of consumer products and lighting. In Asia Pacific and West Asia, Wipro provides IT solutions and services to global corporations.

Meanwhile, the company today informed stock exchanges that its board would consider first quarter audited accounts on July 18 and approve them on July 19.

Last week, the company had announced its intention to set up a marketing office in China in a year, and a software development centre in France in the near future. Sitting on cash reserves of Rs 1,400 crore, it also said it is looking at takeovers in IT consultancy and products.

Some of Wipro�s customers, such as Nortel, Cisco and IBM, have been persuading it to look at the Chinese market for systems integration, company chairman Azim Premji said.


New Delhi, July 1: 
The three two-wheeler majors�Hero Honda, Bajaj Auto and TVS Motor�reported an increase in motorcycle sales last month.

Sales of Hero Honda shot up 33.1 per cent to 13,9993 motorcycles from 10,5159 units in June 2001. Sales in April-June were 37.4 per cent higher at 421,679 bikes, a company official said.

However, in May, Hero Honda reported sales of 14,4160 motorcycles, which implied a growth of 38.63 per cent over the same month last year. This means that sales in June have gone down marginally compared with May.

TVS Motor�s sales for June, on the other hand, jumped by 95 per cent at 53,905 units, compared with 27,597 units in the same period last year. TVS attributed this rise to increased demand for its 110 cc TVS Victor that continues to generate large orders as well as the resurgent seasonal demand for Max 100 and Max 100 R bikes.

Unlike Hero Honda, sales of TVS have risen sequentially�it sold more mobikes in June than in May. TVS recorded a sale of 58,761 units compared with 31,616 units in May last year, taking the growth figures to 85.85 per cent.

TVS� overall sales for the reporting month have registered a 32 per cent growth at 92,929 units compared with 70,315 units in the same period the previous year. It sold 15,565 units of the Scooty as against 16,854 units last June. Moped sales were down at 23,459 units over 25,864 units a year ago.

Bajaj Auto reported an increase of 92.5 per cent with sales at 68,361 units during the same period. Total sales grew 18.76 per cent by volume in June over the same month last year to 116,868 vehicles.

However, the Pune-based firm saw scooter sales fall 31.5 per cent to 29,399 units.

The sales of TVS in the scooter and moped category, combined with that of Bajaj Auto, reflected a shift in consumer preference towards motorcycles.


Calcutta, July 1: 
Bengal seems to be making steady progress in bagging IT investments, with HCL Infosystems being the latest addition to the list.

The hardware manufacturing and services company has finally approved the proposal of the West Bengal Electronics Industry Development Corporation (Webel) and plans to set up a PC assembling unit in the state. HCL has confirmed that it will commence operations in Bengal in August.

The project gains further importance as it is the first time that a major investment is being made in the hardware sector.

The confirmation comes after months of deliberation and an aggressive follow-up from the Bengal government. The nodal agency had approached HCL after Wipro�s proposal to set up an assembling unit did not take off.

�Wipro�s proposal was not attractive enough and failed on certain required parameters like volume of production,� a senior Webel official said. Wipro had proposed to set up a PC assembling plant with a capacity of 300 units per month and at a price of Rs 170 per unit.

Webel has already identified 12,000 sq.ft of space for the assembling unit. Initially, HCL will be housed in the Webel Technologies building at Saltlec.

Webel officials, however, were not able to provide financial details of the project. Sources said HCL has expressed a desire to start small and ramp up its operations. The company will initially start with a capacity of 500 units every month.

HCL has plans to serve the requirements of the eastern region from the manufacturing unit.

The company has not yet provided details of investment or the amount of manpower that would be required for the unit.

Senior officials at Webel have clarified that when land is allotted to a company, it is mandatory for the organisation to provide a detailed plan regarding the investment and human resources to be absorbed. However, HCL has asked to be provided with a ready-to-use site for the project.

HCL currently has three brands�Infiniti, Busybee and Beanstalk�catering to various segments.

It is the largest manufacturer of PCs in the country with a market share of 8.6 per cent, according to reports by International Data Corporation.

The infotech major clocked a 27 per cent growth over the previous financial year. In 2001-02, HCL sold around 5.2 lakh PCs, which is a 5.1 per cent decline over 2000-01. The company has also shipped 151,104 units as against 118,902 last year.

HCL has a manufacturing unit at Pondicherry with a capacity of around 5 lakh units per annum.


New Delhi, July 1: 
Communications minister Pramod Mahajan appears to have given up on private fixed-line operators who have yet to meet the village public telephones (VPT) target.

When Mahajan took over as the communications minister in 2000, he had warned private operators to shape up or face severe penalties. However, with no progress on that front, he cautioned them again in April this year, threatening them with dire consequences if they slipped up on the targets, that could include cancellation of the licences.

But according to a presentation made to the Parliamentary consultative committee of the ministry of communications and information technology on Friday, private fixed line operators have yet to meet their target of installing 59,758 VPTs as on March 31, 2002.

The government-owned Bharat Sanchar Nigam Ltd also has a backlog of 69,440 VPTs. As a result, 1,29,198 villages have yet to get a telephone. The private operators have set up only 2,200 village telephones so far.

In addition to BSNL, fixed line telephony services are being offered in various parts of the country by Bharti Telenet Ltd, Hughes Ispat Ltd, Tata Teleservices Ltd, Reliance Telecom Ltd, Shyam Telelink and HFCL Infotel.

Mahajan had set a deadline of June 15 for the private fixed line operators to come out with details of the progress made by them and also submit a road map for meeting the rest of the target. The meeting was rescheduled to June 25, but now there is no sign of the meeting even being held, and the threat seems to have evaporated.

However, the minister has been very busy with other issues at the moment. He has been working to secure the interests of Videsh Sanchar Nigam Ltd which he felt was being threatened by the Tatas� proposal to channel Rs 1,200 crore from VSNL to a Tata subsidiary, escorting President-in-waiting A. P. J. Abdul Kalam, and, more importantly, discussing the details of the Cabinet reshuffle due today as a key member of the Prime Minister�s inner cabal.

�We are committed to meeting VPT targets, there should be no doubt about it. Our progress has been appreciated and we will try to install VPTs which are pending against us. All our members are seriously laying the VPTs and will show good progress in a couple of months,� said S. C. Khanna, secretary general of the Association of Basic Telecom Operators (ABTO).

In its presentation to the consultative committee, BSNL has pointed out that currently, villages have been provided with VPT by using the Muli-Access Radio Receiver (MARR) system and underground cables.

The government also plans to extensively use new technologies like C-DoT PMP systems as well as wireless in local loop (WLL) systems to meet VPT targets. The action plan would comprise a technology mix, logistics management and the achievement of targets in a realistic time frame.

Remote and isolated villages, which cannot be covered by any terrestrial means, will be provided with telecom facilities using satellite-based VPTs.

�The tender for the required equipment is under evaluation and is likely to be completed by first week of July. Currently, we have procured 400 INMARSAT mini-M terminals and 324 have been deployed as VPTs in remote and isolated areas of the country.



Foreign Exchange

US $1	Rs. 48.84	HK $1	Rs.  6.20*
UK �1	Rs. 74.71	SW Fr 1	Rs. 32.60*
Euro	Rs. 48.35	Sing $1	Rs. 27.30*
Yen 100	Rs. 40.73	Aus $1	Rs. 27.00*
*SBI TC buying rates; others are forex market closing rates


Calcutta			Bombay

Gold Std (10gm)	Rs. 5315	Gold Std (10 gm)Rs. 5190
Gold 22 carat	Rs. 5020	Gold 22 carat	   NA
Silver bar (Kg)	Rs. 8225	Silver (Kg)	Rs. 8240
Silver portion	Rs. 8325	Silver portion	   NA

Stock Indices

Sensex		3288.71		+44.01
BSE-100		1671.77		+21.43
S&P CNX Nifty	1068.95		+11.15
Calcutta	 118.41		+ 1.35
Skindia GDR	 500.29		+ 1.32

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