Bilateral Trade
France to double trade with India by 2005
CERC, FERC enter pact to share regulatory information

FDI approvals
Government approves 1,105 FDI proposals in processing sector
Government approves FDI proposals worth Rs. 15.41 billion

Indian cabinet clears cyber bill

Indian Cabinet has cleared the much-awaited Information Technology Bill to provide a legal framework for electronic communication, trade and commerce and prevent computer crimes.

The bill, to be taken up in the winter session of Parliament, envisages a secure regulatory environment for E-commerce by providing legal validity for Internet and other electronic transactions. It will also permit computer data as an evidence in the court.

At present, many legal rules assume the existence of paper records and documents, signed records and original records. The law of evidence traditionally relies on paper records as well as oral testimony and all kinds of physical objects.

Internet being a complete global entity with no international borders, it was necessary to provide legal framework for issues like primary and secondary evidence, jurisdiction, origination, authentication, privacy protection, intellectual property and computer crimes.

The I.T. bill proposes to set up machinery for monitoring and dealing with such issues. The cabinet note on the bill was first prepared in last November with an aim of getting it cleared in the winter session of parliament, but political uncertainty and inter ministerial tussle pushed it aside.

Economy

Indian Banks to remain closed for public transactions on January 1, 2000

The Reserve Bank of India (RBI), country's federal bank has directed commercial banks to remain closed for public transactions on January one, 2000 and to continue to test their contingency plans in simulated environment for smooth rollover of computer systems to year 2000 (Y2K).

The high level working group on Y2K, on Monday discussed various aspects of the contingency plan, dry run of contingency plan in simulated environment, greater information sharing and various aspects of Event Management Mechanism (EMM).

As part of the contingency plan for the change over to year 2000, banks would have to be kept open on the first day of next year for staff members so that continuity of business operations could be checked, RBI said.

Banks have also been asked to give due and sufficient notice to all the parties concerned that are likely to be affected by the closure to avoid any risk or liability in regard to non-performance of banks' obligations to be met on January one, 2000.

The directive to keep banks closed on January one, 2000, as part of the contingency plan, is in conformity with the international practice, RBI said. RBI also stated that the MICR check processing systems installed at the four national clearing cells in Calcutta, Chennai, Mumbai and New Delhi have been replaced with Y2K compliant state-of-the-art IBM S/390 mainframe system based check processing solutions.

Government mops up about Rs. 9.45 billion through GAIL GDR

State-owned gas utility Gas Authority of India has priced its Global depository receipts (GDR) issue at 9.67 dollars to generate Rs. 9.45 billion for the government through sale of 16 per cent equity.

The sale of 22.5 million GDR, each equal to six shares, was finalized at London after the two-week-long global road shows by the profit making Gas Company.

Announcing the "successful completion" of the issue, state owned GAIL said in a statement here that it would bring down the government equity in the company from 83.3 per cent to 67.3 per cent. The first overseas divestment after the formation of the new government last month was part of disinvestments program to mobilize a targeted Rs. 10,000 crore during the current financial year.

The Corporation had put on block a total of 180 million shares after offloading 30 million shares in the domestic market in February this year at a price of Rs. 60 per share. While the company claimed that overseas response was much better than the domestic offer, the issue at about Rs. 70 per share was still at a discount compared to the day's closing of Rs. 79.80 at the National Stock Exchange.

Revenue collection in India register 14.11% growth

Revenue collections in India registered an impressive growth of 14.11 per cent to Rs. 800.6009 billion during the first seven months of the current financial year, with excise duties collections rising by about 20 per cent.

Total collection of direct taxes till October 1999 stood at Rs. 209.1736 billion as against Rs. 195.6148 billion during the corresponding period of the previous year, a rise of 6.93 per cent according to official figures. Excise collection on the other hand rose by 19.43 per cent to Rs. 316.3564 billion as against Rs. 264.8863 billion collected during the first seven months of 1998-99 financial year.

Total indirect taxes collections between April-October, 1999 stood at Rs. 591.4273 billion, a rise of 16.88 per cent as against Rs. 506.0156 billion mopped up during the corresponding period of the previous year.

Deposit Insurance Corporation mooted by RBI advisory group

A Reserve Bank of India (RBI), country's federal bank, advisory group has suggested withdrawal of the credit guarantee facility from Deposit Insurance Credit Guarantee Corporation (DICGC) and said a Deposit Insurance Corporation (DIC) with a capital of Rs. 5,000 million may be set up.

The capital will be fully contributed by RBI, while the new corporation will have a board independent of the nominees of the insured entities. The board would consist of senior ranking representatives of commercial and cooperative banks and five directors to be nominated by RBI, the advisory group has recommended.

The group has also suggested risk-based pricing of deposit insurance premium based on the latest available CAMEL rating, with 50 to 100 basis points higher for those banks not returning data.

The DIC should have a lender of last resort facility from the government or RBI, which should also provide collateralized liquidity support with the government providing financial support to meet any contingencies, the report said. The group, set up to undertake a study of the existing system of deposit insurance in India and the need for revamping DICGC has recommended a selective approach to extension of deposit insurance cover to institutions. It has suggested that while insurance cover for banks would continue to be compulsory it would not be obligatory for the corporation to provide it.

Tourist arrivals in India up by 4.8% by September 1999 

Tourist arrivals in India have grown by 4.8 per cent in the first nine months of this calendar year, according to the junior minister for tourism Uma Bharati. "Tourist arrivals have shown signs of pick up and till September they grew by 4.8 per cent", Bharati said.

India's share in world tourist traffic and earnings was very small, she said adding IT would help immensely to reach out to international tourists and set up interactive systems giving information for benefits of travelers on their arrival at airports. Bharati said, World tourism industry earned about 445 billion us dollars in 1998 but India's share with 2.75 billion dollars was less than one per cent.

Policy

Government considering proposal to grant visa on arrival to tourists

The government is considering a proposal to grant visa on arrival to tourists from certain countries according to a top tourism ministry official.  "Tourism ministry has sent proposal to home ministry for granting visa to tourists when they arrive at airports," Tourism Secretary M P Bezbaruah said. Facility to grant such visa to tourists from certain countries works on a reciprocal basis and we have not specified the countries for which such facility should be extended, he added.

Supreme Court rejects TRAI appear against High Court stay on CPP regime

The Supreme Court has dismissed a petition by Telecom Regulatory Authority of India (TRAI) challenging the Delhi High Court stay on the implementation of free incoming calls for cellular phone users under Calling Party Pays (CPP) regime.

"We do not think it is appropriate to interfere with the order of the High Court or in the proceedings there as the matter is still at a preliminary stage," a division bench comprising Justice B N Kirpral and Justice S Rajendra Babu said while dismissing TRAI's petition.

The TRAI through CPP had announced to provide from November one free incoming calls to cellular users but the same was challenged in the High Court by state-owned Mahanagar Telephone Nigam Ltd and another public interest litigation which alleged that the MTNL was going to lose substantial revenue under the new regime.

Under CPP, while the cellular phone owner on receiving a call from Public Service Telephone Network (PSTN), known as fixed telephone, would pay no money whereas the PSTN user would pay Rs. 3.30 per call. Of the Rs. 3.30, MTNL would get Rs. 0.90 and the Cellular Operators would get Rs. 2.40. Under the existing arrangements, for each call made from PSTN, MTNL gets Rs. 1.10 and for receiving the call of three minutes, a cellular user would pay around Rs. 12.

The High Court on October 28 had stayed the proposed CPP regime saying the TRAI order "is a hostile discrimination" against Department of Telecom (DoT) and Mahanagar Telephone Nigam Limited (MTNL).

Roadmap for credit information bureau

A Reserve Bank of India (RBI), federal bank working group has suggested that a beginning should be made in setting up a Credit Information Bureau (CIB), even though the existing legal framework prohibited disclosure of information on banks' customers.

The group, set up to explore the possibilities of establishing such a Bureau, has said that pending legislative amendments, CIB could operate with information relating to suit filed accounts and information on transactions on which the constituent has given consent to the bank to disclose.

The group, which submitted its report today, has also suggested the involvement of a foreign technology partner in setting up the Bureau.

"The Bureau could be set up as a company under the Companies Act, 1956 with share capital contributions from its user groups, namely commercial banks, financial institutions and non-banking finance companies," the report has said.

According to the report, the Bureau should collect both negative and positive information relating to credit, trade and financial information. This would include external borrowings on corporate and consumer retail segments such as credit facilities from banks, non-banking finance companies, as also credit cards held and indebtedness to cellular phone companies among others. The setting up of such a Bureau would entail the enactment of a master legislation to facilitate collection and sharing of information, the report said, adding that it should be technology-driven and professionally managed with minimum manual intervention.

Government rejects state-owned PGCIL's equity expansion proposal

The Indian Government has rejected a proposal of the Power Grid Corporation (PGCIL) to expand its equity by Rs. 12 billion to over Rs. 42 billion and instead advised it to sell a few of its transmission lines to meet fund requirements for new projects.

"We are not going for equity expansion of Power grid as proposed earlier. Instead we propose to generate resources for the corporation through other means," federal Power Minister P R Kumaramangalam said.

The power ministry has identified about four to five transmission lines of Powergrid to be sold to private sector and the company would use the revenue generated from the sale for investments, Kumaramangalam said.

Owing to fund constraints, PGCIL has revised lower by Rs. 20 billion its Ninth Plan Investment programs at Rs. 130 billion. As the corporation is expected to take up transmission work for some of the private power projects, it had sought government support to increase its borrowing capabilities.

When contacted Powergrid Chairman and Managing Director R P Singh confirmed that the corporation would now sell some of its existing transmission projects instead of infusing fresh equity. "We will sell some of our lines through the international competitive bidding route," Singh said but declined to give details.

New civil aviation policy soon

The Indian Government will soon come out with a new comprehensive Civil Aviation policy and is considering setting up more international airports in the country. "A Civil Aviation policy is being formulated and will be brought to the Cabinet soon," federal Civil Aviation Minister Sharad Yadav has said.

However, the minister refused to give details of the new policy saying that it was a "sensitive" issue. He said the government would set up more international airports, especially in the northern part of the country.

On the Y2K preparedness of the civil aviation sector in the country, the minister said the sector has already achieved 95 per cent Y2K compliance. "We have solved the problem to a great extent. Our engineers are working on it and I'm quite sure that we will be fully prepared to meet it before the deadline," he said.

Government to reduce stake in banks below 51%

Indian Government will soon amend the banking laws to allow privatization of public sector banks to reduce its equity below 51 per cent. It would also put in place a policy on voluntary retirement scheme (VRS) in nationalized banks.

"The Nationalized Banks Act and Banking Regulation Act will be amended soon to bring down the government stake in public sector banks below 51 per cent," Devi Dayal, banking secretary in the finance ministry has said.

The amendments are likely to come in the next session of Parliament, he said. Dayal said by bringing down the stake below 51 per cent, government role in banks would be reduced in the future. He said the government was also formulating a policy of Voluntary Retirement Scheme (VRS) to bring down the staff costs in public sector banks.

Currently, other PSU companies have a policy on VRS and the policy currently being framed would be along similar lines, he said. "The cost of staff in public sector banks is very high. By having a comprehensive policy on VRS, the costs can be brought down significantly," Dayal said, adding that this could help the banks to lend money at a lower rate of interest in future.

Corporate

SBI cap hunts for global JV partner to assist takeover

India's leading merchant bank SBI Capital Markets (SBI Caps) is hunting globally for a joint venture partner to provide services to Indian companies for acquiring overseas firms and listing in foreign stock markets.

Search for a global partner was necessitated following parting of the company between SBI Caps and Lehman Brothers, SBI Caps Chief Executive Birendra Kumar said.

"We are looking at all options including strategically placing a portion of our equity with a foreign investment bank to cash in on the increased international activities of the domestic companies and their desire for increased global presence," he added. Currently, State Bank of India (SBI) holds 86 per cent of equity in SBI Caps and Asian Development Bank (ADB), which took the stake at Rs. 89 per share few years back, holds the remaining 14 per cent.

The merchant bank was earlier planning a public issue to reduce SBI's stake to 51 per cent before this fiscal, but put this on back burner owing to difficult market sentiments. Kumar said SBI Caps, which reported a profit after tax of Rs. 300 million in 1998-99, has decided to go aggressive in consultancy for mergers & acquisitions (M&A), securitisation and privatization and restructuring of state electricity
boards.

HOECHST to introduce Levofloxacin in India

Pharmaceutical major Hoechst Marion Roussel (HMR) is introducing in the Indian market its latest generation broad spectrum antibacterial for treatment of respiratory tract infections. Marketed under the brand name Tavanic, the drug Levofloxacin, is the latest generation molecule to treat moderate to severe respiratory tract infections, an HMR statement said adding that it was particularly effective against drug resistant bacteria.

Levofloxacin had a well-documented safety profile together with demonstrated efficacy in respiratory infections, HMR Vice President (Marketing) Dr S Bhattacharya said adding that other drugs either lacked the efficacy on atypical bacteria or were too toxic for routine use.

The advantage with Levofloxacin was that it needed to be administered just once a day and the same dose could be administered either orally or by injection. The drug was also one of the first quinolones (drug for treatment of respiratory tract infection) to be recommended by the US FDA and the Infectious Disease Society of America (IDSA for treating respiratory infections.

Tavanic is at present available in 500 mg tablets and HMR plans to introduce intravenous formulation early next year. HMR, the pharmaceutical arm of the 28 billion dollar Hoechst AG of Germany, already has a major presence in the anti-histamine (anti-allergy), cardio-vascular, anti-rabies and anti-diabetes segments of the Indian pharma industry.

IFC keen to invest in Indian insurance sector

Investment arm of the World Bank, International Finance Corporation (IFC) has decided to take equity in domestic companies planning to enter the insurance business as and when the sector is opened up for the private sector.

"We have decided to take equity in domestic companies that enter the insurance sector as and when the sector is opened up," Usha Rao-Monari, manager, South & Southeast Asia Department said. She said IFC's investment in the sector would be driven by the need to help domestic companies in their venture and its viability to make revenues.

"We would invest within the limit prescribed by the government," Monari said. As per the Insurance Regulatory Bill, 1999 placed in the Parliament, the aggregate holdings of equity shares by a foreign company should not exceed 26 per cent of the paid-up equity capital of the Indian insurance company.

She, however, pointed out that the foreign partner would like to take all the 26 per cent stake in companies as prescribed in the bill and there would not be much room for IFC to invest in the sector. Monari said it was not clear now whether investments made by multilateral agencies like IFC would be treated within the 26 per cent prescribed in the bill.

MCKINSEY-NASSCOM report to be released on December 17, 1999

The much-awaited McKinsey-Nasscom report outlining the Indian software industry's strategy for the next ten years will be made public next month, a top
official of National Association of Software and Service Companies (NASSCOM) said.

"The Mckinsey report on India's software sector will be out on December 17 and will form the bedrock of our I.T industry," Dewang Mehta, president of NASSCOM said. He said the final touches were being given to the McKinsey report and will be released in the capital in the presence of top McKinsey executives.

The committee was appointed last year to forecast and draw plans for the growth of Indian Information Technology (I.T) and to streamline the industry in achieving the 50 billion dollar export target envisaged by the Prime Minister's National I.T task force recommendations.

"The report embarks on strategies to be taken by Indian companies in the next millennium. This covers big, small and the medium segments of the industry," Mehta said. It would also look at the post Y2K arena and will advise the industry on e-commerce and business plans to be adopted to maintain international standard in all IT related services. However, he refused to divulge further details of the report.

MARRIOTT to enter Indian market through Goan resort 

Leading US hospitality brand Marriott will make its debut in India with the opening of 'Goa (western India) Marriott Resort' in December this year. The five star resorts is being set up by the Salgaocar group of India in alliance with US-based Marriott International Inc.

The hotel having elements of Goan architecture with Mediterranean touch will have a room capacity of 156 rooms. The hotel will also have a state-of-the-art business center along with largest banqueting facilities in Goa. Marriott International Inc. with over 1800 operating units in United States and 52 in other countries also owns hotel brands like Ritz Carlton, Ramada International and Renaissance.

NTPC seeks Rs. 27 billion loans from IDBI and ICICI

State-owned National Thermal Power Corporation (NTPC) has sought Rs. 27 billion in loans from the financial institutions Industrial Credit and Investment Corporation of India (ICICI) and Industrial Development Bank of India (IDBI) to part-finance its various on-going as well as new power projects.

The corporation is negotiating for a Rs. 15 billion loan from IDBI and Rs. 12 billion loans from ICICI to part-finance its on-going projects and other green field gas-based power projects, corporation sources said. Negotiations with IDBI for the loan were in advanced stages and it was likely to be finalized by the month end, they said.

The corporation is likely to seek formal approval from its board for the two loans by the end of this year. Sources said the rate of interest and the repayment period for the ten-year loans were yet to the finalized, but indicated that the corporation would like the rate to be settled between 14 to 14.5 percent.

The corporation has already tied up for about Rs. 50 billion of credit from various commercial banks including the largest commercial bank State Bank of India (SBI), Bank of Baroda and the Canara Bank. SBI had recently agreed to sanction a Rs. 7.50 billion, 10- year term loan to NTPC at Prime Lending Rate (PLR), the sources said.

KPC to finalize equity stake in Rs. 80 billion Paradeep refinery

Buoyant on the high international oil prices, Kuwait Petroleum Corporation (KPC) is sending a high level team this month to negotiate for 26 per cent stake in the proposed Rs. 80 billion Paradeep refinery of the state-owned Indian Oil Corporation (IOC).

Oil and Natural Gas Corporation (ONGC) has also consented to take 20-24 per cent equity in the project subject to KPC's participation in the nine million tones refinery in the eastern state of Orissa.

Due to delays in confirmation by KPC, which had earlier put the condition of guaranteed profits, for becoming joint venture equity partner, IOC Board had recently decided to go ahead with the project all alone.

However, revival of interest by KPC prompted IOC to offer stake to ONGC also to take advantage of the government stipulation that national oil companies could go for the greenfield refinery project in joint ventures with 50 per cent
stake, IOC sources said.

The corporation, which has already paid Rs. 400 million to acquire land for the project to the Orissa government, has also agreed to pass on the marketing surpluses to ONGC commensurate with the later's equity participation after accounting for marketing expenses.

CONCOR plans Rs. 5 billion expansion

State-owned Container Corporation (CONCOR) is expanding its wagons' capacity and setting up a container depot in the next 18 months at an estimated investment of Rs. five billion. "We are investing Rs. three billion for a container depot at Dadri (near Delhi) and the rest for increasing the wagons' capacity as well as upgrading the existing wagons," Concor Managing Director S K Sharma told PTI.

For purchasing new wagons and improving container haulage capacity of the existing units, the corporation has already received a 94 million dollar loan from the World Bank (WB). A part of the loan from the WB has already been utilized for purchasing high-speed wagons with the remaining amount of around Rs. two billion expected to be utilized by December 2000, he said.

Concor, which completed 10 years of its operations this year, plans to fund the entire project through internal accruals and a fresh issue of equity shares.

Sharma, however declined to give the details of the proposed issue and said," It is too early to comment on the issue as it will depend on Concor's cash flow at the time of funds requirement." The government stake would come down to 51 per cent after the issue, he said.

KRONE communications to invest Rs. 120 million in next two years

German communications major Krone AG's Indian venture Krone Communications Ltd is planning to enhance its presence in the country and foraying into the telecom network market at an estimated investment of over Rs. 120 million.

"We are planning to pump in more than four crore this year and another eight crore in the next fiscal as part of our strategy to expand our market base in the country and to make a grand entry into the teleocom segment," Bala K Chandran, CEO of Krone communications said. He said the funds would be raised internally and a part of it would be utilized for the up gradation of its existing Bangalore-facility. "Major chunk of our investment would be to enter into telecom network business," he added.

According to Bala, these efforts would help the company to cross the Rs. 500 million turnovers by 2000. Krone reported total revenue of Rs. 351.5 million in the last fiscal. As part of its initiative to increase the market share, Krone has launched TrueNet, an effective cabling system tuned to protect the total efficiency of the network, in association with US-based Prestolite Wire Corporation.

Prestolite is a provider of high-speed voice and data communications copper based wiring and fiber optic solutions used in Local Area Networks (LAN). Krone AG recently acquired Gentek Inc, the parent company of Prestolite.

Krone AG of Germany and Keonics established krone in 1989 as a joint venture. Krone holds 51 per cent stake in the venture while Keonics has invested 11 per cent. The public holds the rest of 38 per cent.

VOLVO INDIA to enter construction and mining sectors

Truck manufacturer Volvo India in entering into the construction and mining segments in India and said it would launch a new vehicle for these sectors. The company is planning to launch a concrete mixer and tipper with four axles and 12 wheelers for the Indian market.

The Volvo FM7 8x4 Concrete Mixer would be capable of carrying 30 per cent more payload besides being 30 per cent more fuel-efficient. The FM7 Tipper model would be available with both the standard body for crushed material application and special bodies for coal and boulder applications. It is capable of moving almost four times more material per day than any similar vehicle available in India.

MAX INDIA ties up with New York Life for insurance joint venture

Max India in entering into the life insurance sector in a joint venture with New York Life International (NYLI). Max India, promoted by Analjit Singh of Maxtouch fame, will hold the majority stake of 74 per cent while NYLI will hold 26 per cent according to the norms specified by the Insurance Regulatory and Development Authority (IRDA) Bill, 1999.

The new company, Max New York Life, will seek license for offering life insurance services in India once the bill has been passed in both houses of Parliament, vice-chairman of Max Analjit Singh said. While the minimum statutory capital is Rs. one billion, Singh said considering the nature of the business both the parties would be infusing a substantial amount of funds in excess of the minimum requirement

Incidentally, NYLI's entry into the insurance sector is a precursor to its entry into mutual funds and other allied activities in India. Chairman and chief executive officer of NYLI Gary Benanav said that mutual funds would be a natural outgrowth of the insurance business and at some point they would also be entering it. The time has not yet been decided, he added.

NYLI is a Fortune 500 company and is among the leading life insurance companies in the United States. Max India has interests in telecommunications; bulk pharmaceuticals, electronic components and earlier this year launched its healthcare services in India by allying with US-based Harvard Medical International.

Industry

Indian infotech companies to spend $US 3 billion on acquisitions

Indian software companies are expected to go on an overseas acquisition spree in the next two to three years with a war chest of three billion dollars,
a top industry official said.

"The Indian IT companies will spend three billion dollars for overseas acquisition in the next two years and 75 to 80 per cent of these will be through stock swaps," Dewang Mehta President of National Association of Software and Service Companies (NASSCOM) said.

He said the apex industry body has also requested the government to increase the ceiling on funds used for overseas acquisitions from the current 25 million dollars to 500 million US dollars. Indian infotech majors like NIIT, Satyam computers, HCL Technologies, Rediff on the net, Polaris and a set of other companies have already announced their plans to acquire companies abroad as part of the strategy to grow globally.

NIIT is likely to announce the acquisition of two US companies December-end and has earmarked 100 million dollars for the same. American investment banker Goldman Sachs is advising NIIT on the buy-out process. Meanwhile, Shiv Nadar-promoted HCL Technologies is on the look out for e-commerce companies in the United States and Europe and has kicked off initial public offer (IPO) to raise the funds for it.

Indian exports up 7.39 % in H1

Aided by an impressive double digit growth for the second consecutive month in September, India's exports recorded a 7.39 per cent growth in the first half of 1999-2000 and trade deficit narrowed marginally to 5.01 billion dollars against 5.02 billion dollars despite a surge in oil imports. Imports during April-September 1999 grew by 5.6 per cent at 22.47 billion dollars as compared to 21.28 billion dollars in the same period of 1998. Exports recorded a 12.01 per cent growth in September 1999 while in August it grew by 10.16 per cent.

Though non-oil imports slid by 1.94 per cent in the first six months to 18.01 billion dollars compared to 18.37 billion dollars in 1998, Oil imports shot up by 53.24 per cent to 4.45 billion dollars against 2.91 billion dollars last year, official trade data released here said.

Exports during April-September 1999 are valued at 17.46 billion dollars compared to 16.26 billion dollars in the same period last year. India's imports in September 1999 are valued at 3.96 billion dollars representing a growth of 7.49 per cent over 3.68 billion dollars in September 1998.

Beginning the year with a paltry 2.09 per cent growth, exports picked up momentum in May (11.68) and June (11.14) but fell to 2.11 per cent in July.
 

Bilateral Trade

France to double trade with India by 2005

France would double its trade with India and become one of top five foreign investors by 2005, according to Claude Blanchemaison, French ambassador to India. Blanchemaison said the French government, in association with the Confederation of India Industry (CII), would organize an exhibition titled +France-India 2000+ at Delhi on December 6 next.

He said India and France have good economic relations and the exhibition would be an important step in strengthening economic ties. The exhibition will showcase French technology in various sectors of priority including aeronautics, space, water and environment, agro-industrial equipment, banking, insurance education and tourism.

CERC, FERC enter pact to share regulatory information

India's Central Electricity Regulatory Commission (CERC) and America's Federal Energy Regulatory Commission (FERC) have entered into a pact to share information regarding each other's regulatory functions in the power sector. A Memorandum of Understanding (MoU) to this effect was signed by CERC Chairman S L Rao and FERC Commissioner Linda Breathitt that would focus on competition policy, transmission and generation pricing and development of wholesale power market/pooling arrangements.

FDI approvals

Government approves 1,105 FDI proposals in processing sector

Government has approved 1,105 investment proposals in the domestic food-processing sector, entailing foreign direct investment (FDI) worth Rs. 88.97 billion since the opening up of the economy in July 1991.

These proposals with foreign collaboration involved total investment of Rs. 187.89 billion, with the domestic partners contributing Rs. 98.92 billion, officials in the department of Food Processing said.

Food processing sector, considered to be one of the 'sunrise' industries, is steadily increasing the share of FDI over the years with 4,676 industrial entrepreneurial memoranda being filed between July 1991 and July this year.

The investment proposals in these memoranda amounted to Rs. 534.9 billion, officials said adding 1,089 industrial approvals for domestic investors were also granted by the government in the sector during the last eight years.

These approvals were mainly in sectors like poultry, alcohol industry, refrigeration, cold chain and other processed areas involving investment to the tune of Rs. 721.75 billion, they said.

According to a Confederation of Indian Industry-Mckinsey survey on the domestic food-processing sector, the poultry sector was expected to grow to a Rs. 270 billion industry by 2005, larger than the domestic auto sector.

Government approves FDI proposals worth Rs. 15.41 billion

 The government has cleared 58 foreign investment proposals worth Rs. 15.41 billion, including those of Japanese auto major Toyota Motor Corporation and Volkswagen subsidiary Skoda Auto Ltd.

The proposals, approved by Industry Minister Murasoli Maran, also included Rs. 1.80 billion Global Depository Receipts issue of the state-owned Gas Authority of India Ltd (GAIL). The road shows for the GDR issue of GAIL to sell 180 million shares of the government have already been opened.

The foreign investment proposals, already cleared by Foreign Investment Promotion Board (FIPB), also included proposal of Toyota Kirloskar Motor Ltd to increase the foreign investment in the joint venture to 88.86 per cent.

Toyota would bring in another Rs. 1 billion to increase its stake from the present 87 per cent in the venture to manufacture passenger utility vehicles in the country. Other proposals cleared by the government included those of Wiltron Weavers to bring in Rs. 2.44 billion to set up a carpet manufacturing facility and International Seaports to invest Rs. 3.51 billion to set up a facility in India for development and up gradation of ports and ports related services.

Orchid Chemicals and Petrochemicals' proposal to bring in Rs. 1.75 billion as foreign investment was also cleared. The foreign partner would hold 38.05 per cent stake in the pharma company.