Government may bail out SEB with one-time settlement
Mumbai: With the amount owed by various state electricity boards (SEBs) to central utilities like NTPC and the Railways ballooning to Rs. 37,760 crore, the government is exploring various ways in which to help the SEBs get out of their debt trap.

The three financial institutions, Infrastructure Development Finance Corporation, ICICI and SBI Caps, which were working on the one-time settlement of SEB dues, last week submitted their proposals to the high-level committee set up by the government and headed by Planning Commission member Montek Singh Ahluwalia.

The high-level committee includes chiefs of all three institutions —- Deepak Parekh, K V Kamath and Birendra Kumar -- besides senior officials from the power and finance ministries.

The committee has recommended the settlement of central utilities dues by the SEBs from the proceeds of tax-free bonds with state government guarantees to the extent of their dues. The committee has also suggested that the initial interest payments on the bonds be made from the Rs 2,000-crore kitty proposed to have set up by the central government (as announced in the Budget 2001-02).

The central government is also working out a deal with the central utilities to waive the surcharge and interest overdues amounting to Rs. 14,065 crore as a one-time settlement.

The restructuring exercise also considers the SEBs handing over their plant and equipment to the utility companies like NTPC for them to turn around like in the case of the UPSEB. The takeover of power plants will be in view of dues owned by SEBs to central utilities.
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New Exim policy to tighten export sops
New Delhi: Several sops given to the export sector including, the Export Promotion Capital Goods Scheme, the Duty Entitlement Pass Book Scheme, EOU Scheme, EPZ Scheme, Duty Drawback Scheme, Quantity-based Advance Licence Scheme, and the Special Imprest Licence Scheme, are likely to be given the axe in the new exim policy to be announced shortly.

The cost of sustaining these schemes has mounted to over Rs 20,000 crore and the government is determined to stop this revenue leakage. The crackdown on Export-Promotion Schemes follows several cases of misuse of these concessions.

Coming as it is on the heels of the removal of quantitative restrictions, the scrapping of export sops is likely to hit industry even badly.

The ultimate aim of the government is to concentrate the focus of export promotion to a few schemes and promote utilisation of Duty Drawback Scheme in place of those windows which allow duty free access to inputs. Duty drawback is a globally-accepted scheme and its misuse could be curbed through checks like a cap on overinvoicing, officials feel.
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DoT hands out letter of intent for basic services
New Delhi: Several leading players, including Reliance, the Tata Group and Himachal Futuristic are said to have been given letters of intent by the department of telecom for the basic telecom licenses.

The LoI-holders will be required to pay the licence fee, totally accruing to Rs. 1,180 crore, within a month to get the licences.

Emerging telecom giant Reliance, which already operates in the north-east, got LoI for 18 states including Madhya Pradesh, Orissa, Bihar, Rajasthan, Himachal Pradesh, Delhi, Tamil Nadu, Karnataka, Maharashtra, Punjab, Andhra Pradesh, Haryana, Kerala, Assam, UP (East), UP (West) and West Bengal and North East. Reliance would be be required to pay a fee of about Rs 450 crore to acquire the licences.

The second serious player, the Tata Group, which already has a presence in Andhra Pradesh, has got LoI for 15 states including Orissa, West Bengal, UP (East), Delhi, Tamil Nadu, Gujarat, Karnataka, Maharashtra, Punjab, Haryana, Kerala, Rajasthan, UP (West) and Bihar. Tata will be required to pay a fee to the tune of Rs 430 crore to acquire the licences.

HFCL, the largest telecom equipment manufacturer in the country, has got LoI for seven states. These are : Delhi, TN, Karnataka, Maharashtra, Haryana, Kerala and UP (West). HFCL will be required to pay to the tune of Rs 300 crore for the seven licences.
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Satellite dreams turn sour
Mumbai: After a boom period in 2000 which saw more than 20 channels mushroom all over the country and bring the total count to 70 plus, reality seems to have struck the satellite TV channels.

Going by the number of channels hiving off or trying to sell their stake, the going is clearly tough. High on the channels looking for outside help is SAB TV, the flagship of Sri Adhikari Brothers, which is looking for a strategic partner and is reportedly willing to give a 30-35 per cent stake.

The company is going through rough waters with its prime time ad rate going for a song and most of its top management already quit or looking out for a change.

Another channel on the block is diamond merchant Bharat Shah’s B4U Entertainment and B4U Music. While the channels have not picked up significantly since their launch, Ravi Gupta, chief executive, stated that the company is open to the plan of inviting a strategic partner.

Also looking to offload its stake in satellite TV is the Natelco group with interest in Prabhat and Suprabhat channels.

With recent studies showing that the annual costs of running a general entertainment is close to Rs. 100 crore, clearly highlighting the need for deep pockets to succeed in the satellite TV game.
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New Param series from C-DAC
Pune: A new generation of the Param series of supercomputers, from the Centre for Development of Advanced Computing, with advanced switching network and reconfigurable computing is due to be launched by the end of 2002.

This was stated by Mr. RK Arora, the executive director of the centre.

With the Param series of supercomputers already installed at 52 sites in seven overseas and 44 domestic locations, C-Dac is having talks with numerous educational institutions and research entities for expanding the installation base.
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Net telephony consultation to start by year end
New Delhi: In a major move, the Telecom Regulatory Authority of India (Trai) has announced that it would initiate a public consultation on the issue of internet telephony by this year end.

While this would significantly change the telephony landscape in the country, the Trai has stated that in view of the changes in the worldwide markets, it is impossible to stop technology from entering into the country.

As the first step towards inviting views on the matter, TRAI would organise a seminar on internet telephony between October and November this year and follow it up by public consultation.
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10 state-owned units to be privatised in Karnataka
Bangalore: The budget proposals of Karnataka state have set aside Rs. 100 crore to meet the VRS requirement of 10 unviable state-owned units targeted for closure in the coming fiscal.

This was announced by Mr. S M Krishna, the state’s chief minister who also holds the finance portfolio. The closure or privatisation of state PSUs will be decided on the basis of the newly constituted public sector restructuring commission’s recommendations.

Another salient feature of the budget is the doubling of the allocation to the revolving market intervention fund of Rs 100 crore to Rs 200 crore.

The budget also creates two separate funds, one for industrial infrastructure development and another for technological upgradation and modernisation, with initial corpus of Rs 6 crore and Rs 10 crore respectively.
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State owned banks to be hit by over Rs. 350 crore
Mumbai: Public sector banks who had already discounted pay orders issued by the troubled Madhavpura Mercantile Cooperative Bank Ltd, are set to take a hit of over Rs 350 crore, as the pay orders have bounced.

Typically, since a pay order is considered as good as cash, commercial banks would discount them (release money to the payee’s account) without waiting for clearance, which then becomes the responsibility of the discounting bank.

As the financial year draws to a close, the banks are looking to the Reserve Bank of India to resolve the issue, failing which their bottom lines are surely bound to be hit.
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Corporates keep co-operative banks at bay
Mumbai: The fear psychosis created by the failure in the co-operative banking sector, private sector companies have stopped accepting pay orders, guarantees, letters of credit and demand draft from these banks.

These companies are mostly from the consumer durable, pharmaceutical, automobile and steel sectors and the ones most affected are their stockists and distributors spread across the country.

The trigger point was the run on the Madhavpura bank which was followed by the collapse of Lucknow-based City Union Bank and another Gujarat bank, Classic Cooperative Bank, which got involved in the bullion scam.
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