MTNL cellular rates may be cheapest
New Delhi: The Mahanagar Telephone Nigam Ltd. has said that its cellular rates will be the lowest in India. It will use ‘radio signals’ technology that will enable it to offer cheap cellular rates to its subscribers. Immediately, 2,500 such connections will be made available.

Radio signals are used by fixed-wireless services to link subscribers to the nearest exchange. But these signals may not work well in areas that have heavy traffic or tall buildings.
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CII’s ‘India Strategy’ for WTO meet
New Delhi: The Confederation of Indian Industry has come out with a plan that seeks to explain the stance India should take at the World Trade Organisation meet in Seattle.

The CII intends to push for a standstill on tariff peaks rather than average tariff rates. It also wants compensation where dumping charges have been fixed on a country, but are not established after the accusing country makes investigations. The CII does not want countervailing duties to be imposed on developing countries that have a per capita GNP of less than $1,000 and whose exports are lesser than $50 billion.

The CII has also asked the government to seek the compulsory establishment of manufacturing bases in case of 100 per cent foreign direct investments. It has also urged the government to oppose the US claim for a faster tariff reduction in some of the sectors. All these were discussed at a CII seminar sponsored by Reliance Industries and ITC Ltd.
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Petro-products price rise imminent
New Delhi: A sharp rise in the price of petroleum products is inevitable. A working group constituted for recommending how to implement the price rise will submit its proposals in the next few days. The group had earlier deferred a rise in the prices of naphtha, low sulphur heavy stock, fuel oil and light diesel oil.

The oil companies are demanding that domestic prices be raised since international prices have risen considerably, while they are forced to sell at lower prices.

The prices of crude, naphtha and fuel oil in the international markets have spurted from $19 to $ 23 per barrel, $187 to $220 per tonne and $100 to $125 per tonne respectively, during the period July 1999 to 15 September 1999. July rates have been taken as average rates.
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Banks, FIs impose stricter terms
New Delhi: Banks and financial institutions will henceforth be stricter while lending to infrastructure projects. This could put several infrastructure projects, such as power, water supply, highway and ports, in jeopardy.

Most projects do not conform to the debt service coverage standards of 1.5 times, laid out for non-recourse financing. Debt service coverage is measured taking into account the cash accruing to the company, interest on loans and the instalment amounts. Under non-recourse financing, the creditor takes the risk of cash flows arising out of the project.

The other drawback is that many financiers are not enthused by the state government guarantees provided by several states on account of their poor financial health. Taking physical assets as cover for the projects is also a problem for lending institutions since they are generally not liquid. Further, such assets should be at least 150 per cent of the debt amount, which is also a problem for new entrepreneurs.
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Bank account numbers to be compulsory for IT returns
New Delhi: Individuals filing tax returns may be asked to furnish their bank account numbers so that they can get their tax refunds in those accounts. Already, companies have been asked to mention their bank account numbers in their returns for the current year. The announcement to this effect was made a few days back. This is expected to be extended to individuals too from the next year onwards.
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Sidbi plans debt issue, venture fund
Mumbai: Small Industries Development Bank of India is planning to raise around Rs.1,500 crore through borrowings by March 2000. A major portion of it will come from private placement of Rs.1,100 – 1,200 crore of debt and the rest through a Rs.300 - 400 crore public issue of debt.

Sidbi wants to raise this amount since it is facing a shortfall of Rs.1,400 crore following delayed approvals of foreign lines of credit by Japan's Overseas Economic Co-operation Fund and KFW of Germany.

Sidbi is planning to launch a Rs.100-crore domestic information technology venture capital fund and a $50 million off-shore fund for overseas Indian companies. It has teamed up with the Industrial Development Bank of India and the government's department of electronics to set up the domestic venture capital fund. Sidbi will contribute Rs.50 crore of the total fund size of Rs.100 crore.

Sidbi currently has a credit rating of AAA from Crisil and Care.
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HSBC may drop Republic bid
London: Hongkong and Shanghai Banking Corporation plc may drop the takeover attempt on Republic New York Corp, pending ongoing investigation reports against Republic's fund manager Princeton Economics International's chairman Martin Johnson.

Martin has been charged with a $504 million fraud that led to a loss for Japanese investors. Instead of dropping the takeover bid, the bank may renegotiate the terms and conditions of the bid.
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