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December 31, 1998

'Eventful' AGM packs fizz in war for Herbertsons; Mallya, Chhabria groups draw battlelines
Kishore Chabbria claimed: ''We own over 50 per cent of shares in Herbertsons, out of which 48 per cent is held by my uncle Madan D Chabbria.'' Vijay Mallya rebuffed the claim and said he would not like to comment as the matter was sub judice.

Tata Indica small car available at Rs 250,000-400,000 range
Bookings for a maximum of 10,000 cars, which were initially planned to commence from January 14, 1999 are rescheduled to begin on January 17 on account of public holidays.

Kerala govt, mafia, plantation firm entwined in politico-economic wrangle
A group of young planters says the underworld's unseemly interest in their estates and the infighting in the Janata Dal are taking a heavy toll of their entrepreneurial farming ventures.


Economy is on the verge of collapse. Right? Wrong. It has already collapsed!
The Vajpayee government may please foreign investors by opening the doors to them, but in the process it has antagonised Indian businessmen. This is precisely why Manmohan Singh's reforms went down badly with most Indians who then proceeded to throw out the Narasimha Rao government. The same thing is happening to Vajpayee government, writes Jay Dubashi.


Govt is determined to push through divestment, privatisation and market reforms, says Sinha
Fundamental changes would be brought in the tax structure for introducing a 'simplified and rationalised' policy and reduce the number of slabs in the excise duty in the Union Budget for 1999, the finance minister said.

We are Euro-fit, Indian banks assure RBI
Correspondent arrangements, opening of Euro deposit accounts, training of staff in settlement transactions and changes in the 'swift' messaging standards are some of the measures taken by the commercial banks in preparation for the advent of the Euro on January 4.

Law changes mooted to protect housing FIs from loan defaults; foreclosure law for NRIs
The proposed amendment of the National Housing Bank Act would minimise the loss to the housing financial institutions and boost housing activities in the country, and in the process help economic revival.

ULCRA repeal through ordinance to free 200,000 hectares for construction
State governments will now have the liberty to enact their own legislation according to their urban land requirements.

Equity linked savings scheme modified to encourage investments
This modification would enable an investor to join the scheme at a time of his choice and still gain the tax benefits during the financial year of investment.


BSE: 3110.33; Sensex up 64 points
NSE: 899.95; Nifty up 27 points
Forex: Rs 42.51/52 vs US dollar
              Rs 71.20 vs pound sterling
              Rs 25.46 vs deutsche mark
              Rs 36.90 vs Japanese yen (100)

December 30, 1998

Take two: RSS seeks to pluck Montek, N K Singh out of key economic posts
RSS ideologue Dattopant Thendi has written to the PM questioning how "a person (like the Planning Commission member Ahluwalia) who has never lived in a village nor knows anything about the problems faced by the people residing in the villages" can be appointed the chairman of the task force on employment generation.

Prime Minister to powwow with Amartya Sen in Delhi
''The meeting will be fixed at a mutually convenient time,'' BJP spokesman K L Sharma said. It is likely to be on January 5, after Vajpayee returns from a trip to Andamans and Bangalore.


Delicately poised: open market in one pan, political and social costs in the other
The protests against the insurance and patents bills indicate a deep distrust with the free market drift of India's economy, writes Ashok Mitra.


Partial nationalisation of Goa's buses likely to scrapped
The new Congress chief minister Luizinho Faleiro has a soft corner for the all-powerful private bus lobby.

Lankan experts decry bilateral pact with India
Economist Kelegama alleged that bilateral trade is bound to be imbalanced, vastly in favour of India. Imports to Lanka, particularly of agricultural products, will wipe out the island's farmers, he said. Others termed the signing of the agreement hasty, hinting at poor homework.

Indo-Lankan trade pact drops duty on 1,000 items
According to the ministry of commerce, India has also agreed to 50 per cent margin of preference on all items excepting those on the negative list

'US, Delta and Pineland have filed for T-gene patent'
If the amended patent act comes into being, there would be no stopping the American patent for the terminator gene from being operative in India, Gene Campaign convenor Suman Sahai has said.


BSE: 3046.29; Sensex down 8.4 points
NSE: 872.65; Nifty down 7.2 points
Forex: Rs 42.53/54 vs US dollar
              Rs 71.34 vs pound sterling
              Rs 25.40 vs deutsche mark
              Rs 36.86 vs Japanese yen (100)

December 29, 1998

India, Lanka sign up for free trade area
The development is expected to have a positive impact on the SAARC as it could hasten establishment of the proposed South Asian Free Trade Area.


Ananth Kumar asks Tatas, K'taka govt to expedite airport project study
The Centre had agreed to almost all the points raised by Tata Consortium and was even ready to share the traffic to make the Devanahalli project viable, the aviation minister said.

Midnight massacre of a mid-term megaboard
'When directors such as Deepak Parekh take decisions that Aviation Minister Ananth Kumar disagrees with, they will be sacked and the new board of Air-India and Indian Airlines packed with government servants and executives. Who in his right mind will want to buy shares in a corporation that is run in this manner?' writes Vir Sanghvi.


Sen to fund education and health trust with prize money
'Education and healthcare have been my major concerns over the last few decades,' the economics laureate said. Initially, the activity of the Pratichi Trust will be confined to India and Bangladesh.

Market economy not the panacea, says atheist Amartya
'The success of market economy depended on many factors like health, education and land reforms while undeveloped industries need government help. One should not solely depend on market economy. Some economists suggest it but I do not,' he said.


Slow industrial growth cocks a snook at RBI projections
The manufacturing sector posted a lower growth rate of 3.8 per cent compared with 6.2 pc during the same period last year. Capital goods sector recorded a higher growth at 10.3 pc during the first seven months as compared with 7.9 pc in the corresponding period of the previous year.

Centre's fiscal consolidation suffered setback in 1997-98
Revenue deficit at Rs 436.86 billion (3.1 per cent of GDP) exceeded the target of Rs 302.66 billion (2.1 pc). The primary surplus of Rs 25.46 billion (0.2 pc) envisaged in the budget estimates turned into a deficit of Rs 206.45 billion (1.5 pc).

Foodgrain output down 2.8 per cent, non-food items down 10.1 per cent
Total off-take of rice and wheat foodgrain items fell due to lower consumption under the public distribution system and targeted public distribution system as also negligible open market sales.


Keep off foreign goods, boost swadeshi, Fernandes exhorts youth
The defence minister, who threw Coca-Cola out in 1977 when he was in the government, expressed concern that only three multinationals are controlling the soft drinks market in the country.


BSE: 3054.73; Sensex up 91 points
NSE: 879.85; Nifty up 19 points
Forex: Rs 42.51/52 vs US dollar
              Rs 71.15 vs pound sterling
              Rs 25.30 vs deutsche mark
              Rs 36.58 vs Japanese yen (100)

December 25-28, 1998

Patents Bill gets deferred to the budget session
The government wanted to try and get the bill passed on the last day of the winter session itself, but the main opposition Congress raised procedural objections and sought more time to study it.

UTI chief calls for opening up of PF
P S Subramanyam said this could precede the opening up of the insurance sector and help develop long-term asset-holding institutions.

Montek rules out foreign investment in roads
The former finance secretary, now a member of the Planning Commission, said that with economic activity slowing down, the country should concentrate on creating basic infrastructure.

Stock market does not reflect 'real economy', says UTI director
Dr Basudeb Sen said the Indian capital market is still far from ideal, with operators and participants still trading without owning either shares or cash.

Asian crisis will hurt North America too, warns Canadian economist
"What I find remarkable is that several Wall Street analysts are continuing to forecast double-digit growth in corporate profits for next year," Ranga Chanda said. "I don't know what they are smoking, but I can tell you that that is not going to happen."

December 24, 1998

Sinha admits economy is in trouble
No one can deny that the Indian economy is facing problems, the finance minister said. Exports are declining, inflation has gone up, and there is a problem with indirect taxes.

Carrots over, tax authorities get stick ready
The finance ministry has drawn up an action plan, to be put in operation from January 1, 1999, to initiate action against tax defaulters who do not settle their disputes under the Tax Disputes Resolution scheme.

Sen pays for his prize with his freedom
Surrounded by security guards and intruding journalists, the Nobel laureate wasn't spared even when he met his ailing 87-year-old mother Amita at their home, 'Pratichi'.

Sterlite to reopen Tuticorin plant for 2 months
The accident-hit copper smelting plant in Tamil Nadu will be reopened on an 'experimental basis' on the order of a division bench of the Madras high court.

Call money market up
The overnight interest rates closed higher at 9.10-9.20 per cent as liquidity tightening continued in the inter-bank call money market.

Tatas adopt uniform code of conduct
Formalisation of the code is a testament to the value the group attaches to its assets, said Chairman Ratan Tata.


BSE: 2962.50; Sensex down 14 points
NSE: 858.70; Nifty up 1.40 points
Forex: Rs 42.53/53 vs US dollar
              Rs 71.38 vs pound sterling
              Rs 25.45 vs deutsche mark
              Rs 36.67 vs Japanese yen (100)

December 23, 1998

Rajya Sabha passes Patents Bill
There were 83 votes in favour and 43 against. With the Congress supporting the bill, its passage was assured. The rest of the opposition walked out, accusing the government of selling India's interests.

Companies amendment bill introduced in Lok Sabha
The bill incorporates buyback of equity shares by a company from the stock exchange, issuance of sweat equity shares, and establishment of the Investors' Education and Protection Fund.

N-tests had no adverse impact on FDI inflows, Bakht proves with figures
FDI inflows between May and October 1998 totalled up to Rs 80.1 billion as compared to Rs 66.69 billion during the corresponding period last year.


'Punish fraud, not poor business judgement. But India does the opposite'
'Forget privatisation. It may be premature to talk of privatisation of India's public sector enterprises before you have adequate governance. That could be a licence to steal,' says University of Chicago Professor Raghuram G Rajan.


Make basic education a fundamental right and show India isn't economically and politically bankrupt, exhorts Amartya Sen
'The tendency to obtain higher education in India is five times more than in China but none can find neglect of basic education in China. The time has come when in our country total emphasis should be laid on basic education.'

Goa cracks the whip on fraudulent NBFCs, ordinance issued
The ordinance, which is a replica of the Tamil Nadu Act, provides for stiff penal provisions like a fine upto Rs 100,000 and imprisonment till ten years. It also provides for attachment of property and setting up of special court to deal with such cases.

IMF mulls medium term fiscal consolidation, monetary tightening for India's revival
The updated World Economic Outlook said, 'It will also be important to avoid a premature easing of monetary policy. In fact, further tightening may be warranted if inflation does not slow.'

Left parties, JD let loose turmoil in RS over patents
The Opposition, barring the Congress, insisted that they should be given right to speak on this sensitive bill while moving their amendments to it.

UTI, NSDL in tie-up for demat of three schemes
The pact is for dematerialisation of units issued under Mastershare '86, Mastergrowth '93 and Grandmaster '93 which have a combined corpus of about Rs 13.78 billion. The move is expected to enhance liquidity by offering easy transferability of units.


BSE: 2976.58; Sensex up three points
NSE: 859.30; Nifty up 24 points
Forex: Rs 42.53/54 vs US dollar
              Rs 71.46 vs pound sterling
              Rs 25.44 vs deutsche mark
              Rs 36.37 vs Japanese yen (100)

December 22, 1998

Herbertsons' row: Court assured of peaceful Dec 30 AGM, board recast decision on Feb 9
Today's court order would keep the existing board and its chairman Vijay Mallya undisturbed until the validitiy of the income-tax raid on Kishore Chabria, pertaining to secret acquisition of the company's shares, is decided by the court in future.

Indica has been designed, not adapted, for India, says Ratan Tata
The Tatas' dream car project took around 31 months to become a reality. Indica was conceptualised, designed and engineered in Pune at the Telco's Engineering Research Centre. Indica would be sold through a network of 51 dealers spread in 38 cities.


'If RIBs could succeed in a global market, resurgence of capital markets is also possible'
'It is necessary to encourage and promote active participation of financial institutions in the capital market. We need demand stimulation in the market. Insurance companies are in an ideal position to do so. But they are reluctant participants,' writes UTI chairman P S Subramanyam.


Amartya Sen returns to repay his debt to alma mater
Eightyfive years after the felicitation of Asia's first Nobel laureate, Amrakunja at Viswabharati was witness to yet another feting of a Nobel laureate on Monday morning.

'Bablu' links economics with culture, education, human resources, idealogy, future
'We have to learn from Japan, South Korea, Thailand and China where economic development was preceded by spate of education. This must be emulated by the countries like India, Pakistan and Bangladesh,' the economist said.


Fizz fills film finance frame: government aid, insurance fade in to focus
While the Maharashtra government has announced aid in four instalments to Marathi cinema, top film-makers have stressed corporatisation of the film industry and the need for insurance for mainstream movies a la Hollywood.

Supplementary grants get the nod
The Lok Sabha has okayed additional resources for 1997-98. Finance Minister Yashwant Sinha said the government would maintain a strict discipline to minimise the cash outflow of Rs 13 billion to facilitate this.


BSE: 2973.37; Sensex spurts 98 points
NSE: 859.30; Nifty up 24 points
Forex: Rs 42.54 vs US dollar
              Rs 71.57 vs pound sterling
              Rs 25.56 vs deutsche mark
              Rs 36.80 vs Japanese yen (100)

December 20-21, 1998

Delhi court to proclaim Murdoch an offender: STAR Movies obscenity case
Rupert Murdoch has to appear in court within one month, else the proclamation will be made in the New York Times 'which reaches California where he stays'.

'It's a Sony? Sure it's not phony?' Superbrand identifies grey market threat in India
'The grey market for our products is double than our official turnover in India,' admits Muneesh Dhawan, senior manager of the western region.


National interest demands foreign investment in insurance
India is a grossly under-insured country. People invest their entire life's savings to buy a home and would be more than happy to insure it against fire, flood, riots, etc. But GIC has never taken the initiative, writes Dilip Thakore.


'Banking in India is at least 20 years behind today's standards'
'Everybody is just avoiding the problem of NPAs or postponing writing them off and accounting for it as loss. If the legal reform and the enforcement division don't exist, the banks are going to do the same thing and the bubble is going to burst someday.' Kellogg's Professor Bala V Balachandran in an interview.


Vajpayee pulls up states over delay in power reforms'
''We need a national consensus on the pricing of power to the farm sector. Our farmers are willing to pay a reasonable tariff, provided they get assured and adequate power," Vajpayee told chief ministers.

Left, democratic parties to oppose patents bill; passage imminent
According to the CPI-M, there was no hurry to pass the bill since there is time till April 19, 1999 before the dispute settlement board of the WTO takes up the issue. By then, a clause-by-clause scrutiny by a select panel will be in order, it argued.

Ryots body asks AP to stop Monsan from conducting field trials
The Karnataka Rajya Raitha Sangha has said the Andhra Pradesh government's oral orders won't do; the US multinational seed company has to be stopped from continuing its trials through a written withdrawal of permission.

Nayanar lobbies for Thiruvananthapuram international airport
After the assembly speaker, the Kerala chief minister has espoused the cause. The civil aviation ministry is likely to consider the demand for action.


GDR Weekly Review: Skindia Index down 8 pc, 524.49 points; cement, pharma sectors gain
BSE and NSE Weekly Review: US-Iraq bomb boom echoes in Indian bourses: Sensex dips 127 points and Nifty 35 points

December 19, 1998

RBI modifies deposit acceptance norms for NBFCs
NBFCs having a net owned fund below Rs 2.5 million (with or without credit rating) cannot accept deposits from the public, the central bank has specified.

Lafarge firms up entry into India: Tisco accepts deal for cement division
The world leader in construction materials has offered the Tata flagship's cement division a business value of Rs 5.5 billion. The deal is the first instance of an acquisition of an Indian cement operation by a multinational corporation.


'India can survive even without any bilateral or multilateral trade'
'We have such a large population and such a gap of demand fulfilment that for several decades to come, we won't have a difficulty of a market for agricultural produce,' says minister of state for agriculture Som Pal.


'Under the patents regime, exclusive marketing rights won't impact India adversely'
'Indian discovered drugs can fetch very good foreign currency after 2005, when the new patents regime begins. If we cope with the challenges in the next 4-5 years, we would do very well,' says Prof Chandrakant Kokate, president of Pharmacy Council of India.


Patents bill to be tabled in LS on Dec 21
The house will debate the Comprehensive Test Ban Treaty, the prime minister's statement on India's relations with other countries, national calamities and disinvestment in public sector undertakings.

Walchand group chairman Gulabchand, 75, passes away
Hirachand's nephew had a passion for rifle shooting and took active interest in civilian rifle training movement.


BSE: 2875.09; Sensex recovers 10.6 points
NSE: 835.20; Nifty recovers five points
Forex: Rs 42.53/54 vs US dollar
              Rs 71.56 vs pound sterling
              Rs 25.63 vs deutsche mark
              Rs 36.96 vs Japanese yen (100)

December 18, 1998

Banks, NRI group launch fresh attempts to gobble up Catholic Syrian Bank
Bank of India, Bank of Baroda, a Thailand-based NRI group are among the front-runners eyeing CSB. The Church in Kerala is keen that the targeted bank must retain its Christian character. And the RBI insists that CSB must meet the capital adequacy ratio requirements.


'In these times of dumping, the WTO will always benefit developing countries'
'China and Russia are selling cheap goods in the Indian market. So anti-dumping laws are important to protect local industries. But there are only four people in the entire commerce ministry who look at anti-dumping cases.' White & Case's trade law expert Edmund W Sim in an exclusive interview.


Govt tables patents bill in Rajya Sabha amid uproar, not to refer it to joint panel
The bill contains provisions relating to public non-commercial use, price fixation and compulsory licensing of exclusive marketing rights in pharmaceuticals and agricultural chemicals. The provisions are without prejudice to the existing laws on consumer protection.

Government okays disinvestment in five PSUs
The Union government's stake in Engineers India Limited, ITDC's units in Bihar and Orissa, IPCL and Hindustan Teleprinters will be divested either in full or in part.

Ambani panel recommends sweeping changes in laws for capital market
The PM-constituted group on financial sector and capital markets led by Mukesh Ambani has recommended amendment of the Securities and Contract Regulation Act to allow for derivatives trading and changes in taxation structure. It also sought encouragement for retail investment in the markets through mutual funds.


BSE: 2864.44; Sensex crashes 72 points
NSE: 830.25; Nifty down 21 points
Forex: Rs 42.54/55 vs US dollar
              Rs 71.48 vs pound sterling
              Rs 25.60 vs deutsche mark
              Rs 36.62 vs Japanese yen (100)

December 17, 1998

Insurance reverse forces government to moot face-saving revival measures
The BJP-led government is keen on projecting to the world that its commitment to economic reforms is as strong as ever. "We are looking at immediate measures that can rev up the economy because after the joint select committee of Parliament approves the IRA bill, it will take some months for it to be fully operational," a finance ministry official told Rediff On The Net.

Insurance issue triggers unimaginable realignments Left, Right and Centre
The RSS, the SJM, the CPI-Marxist and the CPI are teaming up on insurance and patents. 'Since we all are against the move, we're planning to counter it,' K R Malkani, BJP's member of Rajya Sabha, told Rediff On The Net. They are pitted against the combined might of the BJP, its allies, and the Congress.


''If people get bonuses for improving profitability of banks, they would be thinking about it'
'The right people to make the reforms are the heads of banks. But they cannot take a chance because investigative agencies raid them for anything that is seen to be a little more enterprising.' Harvard University's Prof Sanjiv Ranjan Das on what ails the Indian banking system.


Government introduces patents bill in Parliament amid uproar
The bill contains provisions relating to public non-commercial use, price fixation and compulsory licensing of exclusive marketing rights in pharmaceuticals and agricultural chemicals. The provisions are without prejudice to the existing laws on consumer protection.

Government denies moves to reduce stake in LIC and GIC
Finance Minister Yashwant Sinha said the government will ensure that both private and government companies have a level playing field and that the rules of the IRA will be framed accordingly.

SC rejects petition against 'Nobel laureate', denounces misuse of PIL
The judges said that even if it is assumed that Prof Sen had been awarded the Bank of Sweden Prize for Economic Sciences instituted in memory of Alfred Nobel and not the Nobel prize for economics, it could hardly be a subject matter of a writ petition, much less of a public interest litigation.

Grant industry status to hotel and tourism sector, Mutiah panel tells government
The panel asked the government to review the 1991 notification on coastal regulation zone as it is believed to affect the development of tourism-related facilities in coastal areas.


BSE: 2936.92; Sensex up nine points
NSE: 851.55; Nifty up 6.5 points
Forex: Rs 42.53/54 vs US dollar
              Rs 71.46 vs pound sterling
              Rs 25.66 vs deutsche mark
              Rs 36.77 vs Japanese yen (100)

December 16, 1998

Insurance bugbear makes parties in power run for cover
The referral to a parliamentary joint select committee almost certainly means that there is little chance of the insurance bill being passed in this session of Parliament. It may not even be passed in the next session!


'We must not become anti-science. It will only put us backward'
'We need three kinds of mechanisms -- bio-surveillance, bio-ethics and bio-safety. If we have all these mechanisms, we can use technologies safely. Do you know India was the first one to develop hybrid cotton in the world?' Father of India's green revolution, Dr M S Swaminathan, delves deep into the terminator technology and the row over Monsanto's agricultural trials.


BJP's tragi-comedy of errors
'The decision to introduce the insurance bill was a marathon drama which proved that frenetic ideologues, who forget rationality, and nincompoop politicians, who fly to the media without doing their homework, can combine to create that sort of dangerous divides which can destroy any government in power,' says Arvind Lavakare.


Deepak Parekh panel on US-64 to submit report in Jan 1999
One of the recommendations, sources said, is to gradually turn US-64 into a debt-oriented scheme. Meanwhile, the UTI has decided to float the $ 500 million Millennium Bond in the overseas market only 'when the market is ripe'.

Full-day strike on Wednesday against insurance bill's introduction in Parliament
About 200,000 insurance employees will strike work. All the trade unions in LIC and GIC have also decided to intensify the struggle against the move for privatisation.

Home, not alone: Amartya Sen underlines correlation between political stability and development
The Nobel laureate got a rousing welcome at Calcutta airport. Later, he said: 'Removal of poverty depends on primary education, uniformity in land reforms, primary health service and optimum use of market.'

Parliament passes Exim Bank bill; capital limit raised to Rs 10 billion
The bill is aimed at strengthening the bank's operations. The government denied that any state was being given a stepmotherly treatment in the matter of promoting exports.

PM moots new panel to consider reports of trade and industry council
Vajpayee suggested that the six reports be put on the Internet. This would contribute to de-politicising the agenda of economic reforms.

Government is neither interfering with nor pressuring FIs, Sinha tells RS
The financial institutions on their own decide the merits of loan, equity or working capital in individual cases, the finance minister explained.

One-letter change in Verma's address: from SBI to RBI
The RBI has asked Maya Shankar Verma to advise on policy initiatives to cut incidence of non-performing assets, problems related to inter-bank reconciliation of accounts and on reducing procedural hassles related to credit disbursal.


BSE: 2927.48; Sensex down 63 points
NSE: 845.05; Nifty down 18 points
Forex: Rs 42.54/55 vs US dollar
              Rs 71.62 vs pound sterling
              Rs 25.71 vs deutsche mark
              Rs 36.51 vs Japanese yen (100)

December 1-15, 1998