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January 31, 1999 'Badla is a rip-off. Political economy will scuttle futures' Bimal Jalan, D R Mehta and Surjit Bhalla made thought-provoking observations at the national seminar on 'Financial Markets and Institutions Development and Reforms'. FOCUS: FINANCIAL CRUNCH SQUEEZES STATES Gujral's largesse, states' nemesis Owing to the then Gujral government's pandering to the Left by way of acceptance of the Fifth Pay Commission's recommendations, several states are now on the verge of financial emergency, points out Rajiv Shukla. Fin Commission blames competitive populism for deficits, moots 'big and bold' remedies We will not be scared to take radical measures as our aim is to make the Centre and the states financially sound and realistic, chairman A M Khusro said. Low tax revenues push Punjab to dire straits The Reserve Bank of India, at one stage, ordered banks not to honour the state government's cheques as it had resorted to massive overdraft. MP ponders hike in taxes, cut in spending to stay afloat Chief Minister Digvijay Singh said a decision on free supply of power to farmers and privatisation of road transport corporation will be taken after deliberations. OTHER REPORTS Tata Finance clocks Rs 3.5 billion in Indica bookings The huge market-share of the Indica booking business has opened up tremendous potential for car finance on actual deliveries. Polymer event seeks to bring students, experts together In the next century, PVC is said to replace conventional materials including metals and wood in a big way. THIRD QUARTER RESULTS Grasim nets Rs 168.3 million The prolonged and continued economic downturn has adversely affected all the industries in the commodity market including Grasim. Dr Reddy's net up 29 pc at Rs 133 million The net profit for the first nine months increased by 30 per cent to Rs 516.6 million from Rs 372.5 million. Dumping causes Rs 1.19 bn loss to Essar Steel The positive impact of the anti-dumping and floor price measures announced by the government will be felt in the fourth quarter. Gujarat Ambuja H1 net lower at Rs 463.6 million The company's impressive performance comes at a time when the cement industry is reeling from oversupply. 
• GDR Weekly Review: Skindia index down at 609.38 points • BSE and NSE Weekly Review: FII buying pushes Sensex up 18 points January 30, 1999 Talks resume in Delhi for Indo-Pak power deal A memorandum of understanding has been drawn up. Price and other details will be worked out in the current round. THE REDIFF BUSINESS COLUMNISTS Roadblock to social and economic advance Democracy 'experts' happily point out how India could avoid famines while a communist China suffered them. But they don't talk of China's impressive record in education and health. The deprivation of the right to either education or work is a manifestation of class war, says Ashok Mitra. THE REDIFF BUSINESS INTERVIEW 'Foreign investment alone won't make India strong' 'Our leadership has failed to make us feel that honesty pays. It's no use to blame the government alone, we need to get up every morning and ask ourselves -- 'have we done our duty?' Lord Swraj Paul in a tete a tete. OTHER REPORTS Cars come cheapest in low-tax Goa The prime reason for lowest range of prices in Goa is the low seven per cent sales tax. This obviously attracts buyers from neighbouring Maharashtra and Karnataka, which turns out to be a major revenue earner for the state than the Goan market. US mulls anti-dumping duty on Indian rubber tape companies The US Commerce Department has calculated a dumping margin of 62.01 per cent for Garware Elastomerics and other Indian companies. But the decision to impose will be taken later, if at all. THIRD QUARTER RESULTS M&M net up at Rs 632.2 million The new wage agreement with the tractor workmen's union has pushed up both production volumes and productivity. BoI nets Rs 590 million Operating profits for the first nine months of 1998-99 stood at Rs 4.40 billion as against operating profit of Rs 2.77 billion during the first half of the current year. Indian Rayon Q3 net at Rs 270 million The turnover for the nine months was Rs 13.82 billion while the gross profit stood at Rs 1.98 billion. Arvind Mills clocks Rs 46.2 million net profit The company hopes to beat the prevailing downtrend with products like stretch, over-dyed, black-on-black and ring denims.
• BSE: Sensex 3315.57; recovers 22 points • NSE: Nifty 966.20, up 11 points • Forex: Rs 42.49/50 vs $ Rs 48.45 vs euro Rs 69.98 vs pound Rs 36.53 vs yen (100) January 29, 1999 Govt raises prices of wheat, rice, sugar, urea; Rs 50 billion additional revenue expected to prune fiscal deficit Justifing the increase, the government said that there had been no increase in the price of essential commodities in the past two years while procurement prices had gone up considerably, forcing it to provide more subsidy on the PDS items. Row brewing in WB as India and other countries flay inspection panel Large borrowing countries like India and Brazil allege that the panel meddles in their internal affairs, but the World Bank arm denies the charge. A showdown seems imminent at the February 9 board meet in Washington. THE REDIFF BUSINESS COLUMNISTS Confusion, extreme views cloud the brave, new genetic world The attitude of scientists, both in the public and private sector, in the face of grave doubts about transgenics is disturbing. Not a single scientist from the Indian Council for Agricultural Research and the Department of Biotechnology appears to have the slightest hesitation about introducing these crops in the country, writes Darryl D'Monte. THE REDIFF BUSINESS SPECIAL A swadeshi government mela! Freebooters instead of buyers. Government departments instead of corporate majors. Papads and pickles alongside the goodies. And stalls of ministry of sports and Bhakra Dam! The Swadeshi Mela has failed to live up to its hype. OTHER REPORTS Goa sliding into debt trap The state has been borrowing primarily to repay the old debts. "The basic purpose of borrowings to support the development has been forfeited," points out A M Khusro, chairman of the 11th Finance Commission. Half of Nalco's equity to be converted into loan: govt seeks to improve EPS for divestment The equity capital of the profit-making company would stand reduced at Rs 6.44 billion, and the Rs 6.44 billion loan can be transferred to FIs and banks. Kerala reiterates plea against FACT divestment The Centre restore naphtha subsidy, write off the interest on the loan taken for FACT's ammonia plant, sanction a Rs 2 billion capital subsidy and exempt the company from the payment of dividend, the state government said. Cornell varsity chooses Hyderabad for agribusiness programme The programme acquires significance in the light of the emerging global economy and mushrooming of agri-business enterprises in the country. It would provide for exchange of faculty between Cornell and the Indian universities. THIRD QUARTER RESULTS SBI's net up at Rs 2.85 billion The net profit for the nine months ended December 31, 1998 was Rs 11.43 billion, up 25 per cent from Rs 9.12 billion in the corresponding period of 1997-98. BoB clocks Rs 1.18 billion as net A large shortfall in credit offtake was made good by the investments which rose by Rs 22.76 billion during the nine-month period. Income from treasury operations contributed to nearly 40 per cent of the bank's total income. Indo Gulf net marginally up at Rs 465 million The third quarter net sales / income from operations was Rs 3.79 billion, up from Rs 1.75 billion in the previous financial year. P&G's net up at Rs 182 million The company's sales increased by six per cent to Rs 1.37 billion. Essar Oil's net at Rs 45 million up in terms of percentage of income Net profit of Rs 258.5 million for the nine-month period ended December 31, 1998, was up 52 per cent.
• BSE: Sensex 3292.95; down 61 points • NSE: Nifty 955.10, down 16 points • Forex: Rs 42.49/50 vs $ Rs 48.58 vs euro Rs 70.07 vs pound Rs 36.80 vs yen (100) January 28, 1999 RBI sets five-year time-frame for conversion of FIs into banks The central bank feels the domestic financial institutions should be given the freedom to become non-banking finance companies or commercial banks as envisaged in the Narasimhan Committee report. RBI tightening prudential screws on errant banks, says deputy governor The banks have been asked to include in the published accounts from March 31, 2000, maturity pattern of loans and advances, investment securities, deposits and borrowings, foreign currency assets and liabilities, movement in NPAs and lending to sensitive sectors as defined by the RBI. THE REDIFF BUSINESS SPECIAL Comrades, capitalists, camaraderie: Bengal's brush with industrialisation Jyoti Basu's admission of failure to keep his promise of industrialising the state and the subsequent assurance to pull up his socks drew applause from investors at the Destination West Bengal summit. A round-up. STATES TO RESTRUCTURE POWER BOARDS APSEB recast on the cards The Andhra Pradesh power board would be classified into transmission and distribution units. The board officials and personnel would be shifted to different departments of the two units after the issuance of the notification on January 31. Goa grapples with power crunch and new privatisation plan It is Goa's sixth power policy in the last four years that the one-month-old Congress government is now drafting, rejecting its own policy adopted in July 1998. OTHER REPORTS Kerala seeks protection for rubber, tea, spices from Lanka The Indo-Sri Lanka free trade agreement would adversely affect the export potential of the state's predominant cash crops, Chief Minister Nayanar asserted in the assembly. China rules out yuan devaluation Not only will China not devalue its currency, but a devaluation would be harmful and is unnecessary, the central bank governor said today. COMPANY RESULTS ACC Q3 net up at Rs 340 million The net sales/income in the third quarter was higher at Rs 6.33 billion from Rs 6.06 billion while the net income for the nine-month period ended December 31, 1998 increased to Rs 18.24 billion from Rs 17.78 billion in the previous year. Hindalco's 9-month net up 16 pc at Rs 4.24 bn The net sales have grown by 21.9 per cent to Rs 12.96 billion during the same period from Rs 10.63 billion of the previous year.
• BSE: Sensex 3353.98; up 45 points • NSE: Nifty 971.30, up 21 points • Forex: Rs 42.48/49 vs $ Rs 48.94 vs euro Rs 70.21 vs pound Rs 37.19 vs yen (100) January 26-27, 1999 Financial crunch: Centre-states clash looms over cut in interest rates on small savings Since the states are entitled to get 75 per cent of small savings as loans, the Centre should pull it out of the Budget and make it a corpus to avoid the problems of growing fiscal deficit, West Bengal's Finance Minister Asim Dasgupta said. A meeting of Centre and states is likely. Indica bookings at 115,238 mark record demand for new car The response comes in the midst of possibly the worst recession that the Indian automobile industry has faced in recent times. Another distinctive feature of the bookings has been the high number of direct non-financed payments that have been received. SWADESHI MELA IN DELHI 'The clash with globalisation is going to produce a national Indian mind' 'You kill Indian business by socialism for 40 years, and on the 41st year ask him to compete with MNCs who have been fattened by centuries of wealth-making. An Indian businessman, a small-scale industrialist, will manufacture for 20 villages. Let him manufacture that way. He need not have to compete with Hindustan Lever,' says S Gurumurthy. THE REDIFF BUSINESS COLUMNISTS Despite good macro indicators, perverse expectations can trigger a BoP crisis India is the eighth most indebted country in the world today, measured in terms of external debt stock, writes Bibek Debroy. THE REDIFF BUSINESS SPECIAL South's future north-bound as US investors pledge support They came. They heard. They applauded. The US investors were bowled over by the hardselling of southern states by the respective govenments at the Indo-US summit in Madras. A round-up. OTHER REPORTS Improve service, then tourists will come from Vienna to Sikkim, PM tells industry Tourism will flourish faster if our hotel owners, taxi operators, guides, local shopkeepers and all other service-providers work with single-minded determination to improve the way they deal with the tourists, Vajpayee said. Boards okay merger of three Arvind companies The shares of Arvind Products are proposed to be listed on major stock exchanges after the necessary approvals. COMPANY RESULTS L&T's Q3 net up 62 pc at Rs 640 million The company fared well in spite of an unprecedented slowdown in the Indian economy. The cement industry continues to be in a difficult situation, with excess supply in certain markets and substantial drop in export price realisation. Telco's Q3 loss at Rs 215.8 million on the lower side The improved performance was mainly on account of the favourable impact of higher sales volume and continuing improvement in operating margins, helped by cost reduction initiatives. IDBI nets Rs 3.03 billion in Q3 The share of electricity generation in the financial institution's overall assistance approved at 36.8 per cent was the highest, followed by chemicals and chemical products 14.3 per cent, textiles 6.4 per cent, iron and steel 4.5 per cent and telecom services 3.3 per cent.
• BSE: Sensex 3309.15; up 11 points • NSE: Nifty 949.80, down 7 points • Forex: Rs 42.50/51 vs $ Rs 49.24 vs euro Rs 70.39 vs pound Rs 37.07 vs yen (100) January 24-25, 1999 SBI chief hints at phased convertibility, active derivatives market In the next millennium, there will be a widening and deepening of the Indian financial market as restrictions on cross-border flows disappear. There will also be larger deregulation of financial services by the government, M P Radhakrishnan said. Be prepared for a harsh budget, says Sinha The finance minister expressed concern at the mounting borrowings, both external and internal, especially the latter because those are being spent almost entirely on unproductive establishment costs. Finance minister calls for greater credit flow to backward areas Expressing concern at the low credit-deposit ratio in underdeveloped parts of the country, Yashwant Sinha said funds meant for those regions are going to more developed areas, accentuating the inequalities. SWADESHI MELA IN DELHI 'Opening up the insurance sector will start the disaster for India. What happened to Russia will happen to us' 'The entire economic policy initiated on the basis that imports lead to exports has failed in the last three years. Imports have gone up. Exports have come down. Production has come down and so too has employment. The entire post-liberalisation economic ideology has failed all over the world. Globalisation is being increasingly questioned,' says Swadeshi Jagran Manch convenor S Gurumurthy in an exclusive interview. KVIC resolves to hardsell Bharat's products in India 'The consumers have a certain confidence in the quality and standard of products bought from khadi outlets. We will capitalise on this and promote our products under easily identifiable brand-names,' the Khadi and Village Industry Commission chief said. OTHER REPORTS RBI bans FIIs from picking up Pentafour equity The FII stake has reached the limit of 24 per cent. No further purchases of shares should be made through stock exchanges in India on behalf of the FIIs, the central bank said. Indian companies to adopt PWC's formula for shareholder value enhancement Evidence is now available that local stock markets have begun to reward those companies that channelised their energies on building shareholder value and are punishing those that failed to recognise this change, PricewaterhouseCoopers said.
• GDR Weekly Review: Skindia index steady at 618.78 points • BSE and NSE Weekly Review: Infotech results buoy sentiment; Sensex up 90 points January 23, 1999 World Bank to lend Pakistan $350 million The structural adjustment loan is to be used to reform the key public-sector activities of banking, tax administration, public utilities and public expenditure. It is part of the $5.2 billion bailout package worked out by the IMF for the cash-starved country. Grasim CS2 plant in Kerala ordered shut Sulphur dioxide and other poisonous gases leaked from the plant after a valve flap of asbestos burst under high pressure on Jan 20. Ten villagers fainted and had to be hospitalised. Five sick PSUs asked to shape up The undertakings, under the department of heavy industries, have been asked to formulate a strategy for the future, focussing on upgrading and modernising technology. Wockhardt goes west, ties up with US firm The Bombay-based pharmaceutical company plans to launch a series of 15 products in the United States in a joint venture with Sidmak Labs of New Jersey. Together, they are aiming for sales worth $100 million. Three Lalbhai Group companies plan merger Arvind Polycot, Arvind Cotspin and Arvind Intex are proposed to be merged with Arvind Products to effectively capture the synergies that exist between cotton yarn, denim and gabardine, particularly because Arvind Mills is setting up a gabardine production capacity.
• BSE: 3297.86; Sensex down 32 points • NSE: 957.05; Nifty down 10.15 points • Forex: Rs 42.50/51 vs $ Rs 49.33 vs euro Rs 70.32 vs pound Rs 37.33 vs yen (100) January 22, 1999 ONGC, IOC pool resources for joint ventures Giving details on the coming together of the two oil majors in the country for the first time, ONGC Chairman B C Bora and IOC Chairman M A Pathan made it clear that there was no move to merge both the profit making public-sector undertakings. Mishap-hit Reliance signs biggest insurance deal with Oriental The deal for the Rs 160 billion cover is for the plants and machinery at Reliance's petrochemicals complex in Hazira and Jamnagar. Jaswant swears by reforms, reassures US investors that India is business destination The US remains India's largest trade and investment partner and the trade exceeded $ 10 billion during 1997-98. The trend is positive, the plan panel deputy chairman told the Dynamic South summit. Ban on onion exports lifted partially Taking note of the sharp decline in the inflation rate and the prices of various essential commodities, the Cabinet Committee on Prices decided to lift the ban on exports of potato while allowing the export of the rose and 'Krishnapuram' varieties of onion. THE REDIFF BUSINESS INTERVIEW 'When the govt invests more in infrastructure, the capital market will look up' 'The government must think before they act rather than acting first and then thinking. Can't they look at the pros and cons first and then take a firm decision? But the pre-Budget discussions are a good attempt at being transparent,' says vice-chairman of the Associated of Chambers of Capital Markets, N Muralidharan. OTHER REPORTS Government gives green signal to corporate airports Each airport corporation will become a special entity under the Company Act, 1996 opening up tremendous scope for foreign investment and joint consortium participation, Aviation Minister Ananth Kumar said. Ambuja Cements to start $ 50 mn Lankan unit on Feb 2 The first phase of the project will be completed in two years. Until then, Ambuja's cement will be exported to Sri Lanka. Jalan underlines coordination between market regulators and operators Owing to lack of innovations and transparency in attracting individual investing public, India is lagging behind in developing its long-term debt market, the RBI governor said.
• BSE: Sensex 3329.93; shoots up 111 points • NSE: Nifty 967.20, up 43.10 points • Forex: Rupee moves up 1 paisa Rs 42.50/51 vs $ Rs 49.17 vs euro Rs 69.79 vs pound Rs 37.66 vs yen (100) January 20-21, 1999 Open up so the sector won't stink any more, advises insurance regulator 'We seem to revel in the small print and see to it that the customer regrets taking an insurance cover,' the IRA chairman N Rangachary said while advocating private players' participation in the industry. Air-India lowers retirement age to 58; Lufthansa mulls post-divestment tie-up The decision is expected to cut the wage bill and facilitate career growth for the younger staff. German airliner Lufthansa will look into equity participation with Air-India once the government spells out the divestment plan. THE REDIFF BUSINESS INTERVIEW 'South India is an excellent destination for investment' 'Availability of manpower and space, less infrastructure problems make south attractive. Not for nothing would companies like Ford and Hyundai choose Tamil Nadu,' says N Sankar, chairman of the Indo-US Joint Business Council, on the eve of investment summit in Madras. OTHER REPORTS Kerala greens step up moves to get Grasim down shutters Grasim's unit in Mavoor, Kozhicode, is said to have polluted the Chaliyar river, causing cancer deaths in the region. The Chaliyar Agitation Council is planning an indefinite fast before the unit from Janunary 26 as part of the statewide struggle. Canada's province seeks to change assets law to woo back Indian immigrants The federal foreign assets disclosure law has affected the flow of wealthy immigrants, prompting British Columbia to press for its repeal. Pepsi to samba with Govinda, Coke ropes in Rambha Celebrity endorsements of soft drinks are set to acquire ultra filmi fizz as the Indian arms of the Atlanta-based beverage giants vie for the top slot in sales. Oriental Insurance jacks up cover for Indo-Pak cricket Tests BCCI will get a cover of Rs 50-60 million per Test, in the wake of the attack by the Shiv Sena activists on its Bombay office.
• BSE: Sensex 3218.91; sheds 60 points • NSE: Nifty 924.10, down 21 points • Forex : Rs 42.51/52 vs $ Rs 49.43 vs euro Rs 70.41 vs pound Rs 37.05 vs yen (100) January 19, 1999 Bharat Ratna for Amartya Sen Mother Teresa is the other Nobel Prize winner who was also honoured with the Bharat Ratna. Missile scientist A P J Abdul Kalam was the other non-politician to be conferred India's top civilian honour by the Vajpayee government. South set to emerge as 'the future India' at Dynamic Summit in Madras With sanctions as the backdrop, the Indo-US summit will see about 100 US companies and 250 Indian corporates fostering ties even as the southern chief ministers vie for chunks of the foreign investors' cake. PRE-BUDGET PARLEYS Budget to break convention on Feb 27 at 11 am The time suits the Union finance ministry since most of the budget levies come into effect immediately, leaving no chance for speculation in the commodity or stock markets. OTHER REPORTS Bajaj Auto to create global brands for export markets The company has selected scooterettes Spirit and Saphire for the European markets, scooters Bravo and Legend for the southern European markets, Turkey, Egypt, and West Asia, and motorcycles Caliber and Prowler for South America and southeast Asia. Vittal seeks action against public servants' benami properties The chief vigilance commissioner has suggested that MLAs and MPs must declare their assets before the presiding officers concerned every year. J P Morgan's report hints at RBI easing short-term interest rates Credit-offtake is expected to improve in the January-March period, which would be a significant drain on liquidity in the coming weeks, says the report. COMPANY RESULTS Reliance sales in nine months up 11 per cent at Rs 109 bn, net Rs 13.23 bn ''Despite the damage caused by an unloading vessel at Hazira petrochemicals complex, sheer determination and swift response by the RIL people have enabled the company to overcome the accident and report another quarter of encouraging financial performance,'' Anil Ambani said. HL Chem's net up 71 pc to Rs 424 million in '98, to offer Rs 13.50 as dividend HLCL has convened an EGM on February 1 at Rajpura, Punjab, to seek shareholders' approval for the plan to set up two new fertiliser plants and a sulphuric acid unit.
• BSE: Sensex 3278.58; recovers 70 points • NSE: Nifty 944.90, up ten points • Forex : Rs 42.48 vs $ Rs 49.25 vs euro Rs 70.27 vs pound Rs 37.02 vs yen (100) January 16-18, 1999 THE REDIFF BUSINESS INTERVIEW 'Only a mixed economy can deliver the goods' 'Technology is benefiting a very small section of society. In fact, half of humanity has never made a telephone call. So the challenge for India and South Africa is to get this whole humanity into the 21st century.' South Africa's Minister for Telecommunications Jayseelan Naidoo holds forth on socialism, capitalism, and materialism. PRE-BUDGET PARLEYS Consumer bodies seek excise relief for packaged goods They criticised the recent reduction of interest on small savings as this affects the small investors, and demanded reversal of the decision. OTHER REPORTS HDFC Bank to tie up with Chase Manhattan The bank's board has granted a no-objection certificate to its UK-based partner Natwest to sell its equity holding in HDFC Bank through a complex deal involving Chase Capital, partners of the American bank. GAIL, BPCL, Delhi government form joint venture for CNG distribution Indraprastha Gas Limited will have an initial investment of Rs5.36 billion, Rs1.4 billion as equity and the rest as debt and non-refundable deposits from consumers. GAIL and BPCL will own 22.5 per cent each, and the FIs and others the rest. Maharashtra offers sales tax sop to auto sector; Indica price won't be cut, says Tata Group Subject to green and other mandatory clearances, new mega projects and expansion of existing units in auto sector will be permitted in the Bombay metropolitan region.
• BSE: Sensex 3207.85; sheds 84 points • NSE: Nifty 934.30, down 20.45 points • Forex : Rs 42.49/50 vs $ Rs 49.56 vs euro Rs 70.43 vs pound Rs 37.72 vs yen (100) January 1-15, 1999
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