Slow down hits steel cos
Mumbai—The slowdown has now hit the steel sector and steel companies in the country are planning to cut production by 10 to 15 per cent to counter depressed market conditions and improve their viability. Realisations in the sector have declined by Rs 4,000 per tonne.
They have also initiated other steps to reduce output both in the hot rolled coils and in the cold rolled segments.
Hot rolled coil prices have crashed to Rs 12,000 per tonne, against Rs 16,000 in the same period last year.
This comes despite a 3.5 per cent drop in production in the first quarter to 2.7 million tonnes compared to that of last year and despite exports of 100,000 tonnes.

In the cold rolled coil market there is overcapacity also. While the total capacity in the domestic industry is 6 mt, demand is at 2.7 mt.
Market leader Tata Steel has already suffered a 80 per cent drop in its first quarter net.
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E-frauds highest in India: KPMG
Kolkata--A recent survey conducted by consultancy firm KPMG reveals that the number of incidents of e-fraud and of online security breaches is the highest in India.

Of the 1,250 medium and large companies surveyed worldwide, respondents from India reported the highest rate of e-commerce security breaches at 23 per cent, followed by 14 per cent respondents from Germany and the UK.

83 per cent of the respondents said that legal action was not taken when a breach occurred.

The reasons cited for this were inadequate legal remedies available, prevalence of out-of-the-court settlement, failure to quantify loss sustained as a result of breach, no possibility of recovery and lack of evidence in most cases.

The damage caused, or attempted by the reported security breaches were primarily by planting virus on the system, system crashes, website defacement or alteration and system resource being redirected or misappropriated.

In fact, 50 per cent of companies identified hackers and poor implementation of security policies as the greatest threats to their e-commerce systems.

On the extent of damage wrought by e-fraud, 72 per cent of the firms surveyed reported that their greatest area of concern was the risk of any damage that could be detrimental to their company's reputation.

According to KPMG, a company's desire to protect reputation was primarily responsible for many frauds going unreported.
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Bima Nivesh will now give lower returns
Mumbai—The single premium product and a new Bima Nivesh Plan from the Life Insurance Corporation will be in the market from tomorrow. Under the new plan the guaranteed returns have been scaled down by 100 basis points.

Further, in an effort to widen the scope of the policy, the firm has reduced the minimum entry age from 35 to 18.

LIC had received approval from the Insurance Regulatory and Development Authority of India (Irda) to revise the scheme last Friday.

The revised Bima Nivesh plan offers guaranteed returns of Rs 75 per Rs 1,000 invested for a period of five years and Rs 80 for every Rs 1,000 invested for the next five years. This is as opposed to the earlier Rs 85 for the first five years and Rs 90 for the next five years.

Other changes on the anvil include plans to introduce more riders for accident and critical illness. These are yet on the drawing board stage and have yet to go for the Irda approval.
Unprecedented collections
The single premium long-term saving scheme Bima Nivesh has caused Life Insurance Corporation record a mind-boggling 1557.6 per cent growth in collections in the first three-and-a-half months of the present fiscal.
LIC sold over 2.3 lakh Bima Nivesh policies between April ‘01 and July 15, with premium collections against these policies crossing Rs 2,211 crore — a 65 per cent growth over the collections of Rs 1,311 crore for the whole of 2000-01.
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PSU VRS seekers likely to get better deal
New Delhi-- To ensure that there are more takers for the VRS, the government is planning to raise the compensation paid under the department of public enterprises’ (DPE) voluntary retirement scheme (VRS).
In a cabinet note circulated to the various ministries the DPE has proposed that compensation paid to the employees of marginal profit making or loss making public sector undertakings (PSUs) be raised to up to 45 days for each year of service put in or for the remaining years of service, whichever is less.

The present DPE guidelines for the marginal profit making or loss making PSUs stipulate a compensation of 35 days for each year of service or 25 days for service till superannuation, whichever is less.

Also, the compensation has to be a minimum of Rs 25,000 or 250 days salary, whichever is higher.

For the sick and unviable PSUs, the DPE has proposed that the government hike the compensation to up to 60 days for each year of service put in or for the remaining years of service, whichever is less.

At present, a compensation of 45 days emoluments (basic pay and dearness allowance) for service rendered or monthly emoluments at the time of retirement multiplied by the number of months of service left before normal date of retirement, whichever is less, is paid.
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Carnegie Mellon enters Indian IT education arena
New Delhi--The Shri Sivasubramaniya Nadar Educational and Charitable Trust (SSNECT), a non-profit institution, founded by HCL Technologies chairman Shiv Nadar has announced an agreement with the Institute for Software Research International of Carnegie Mellon University (CMU) to offer software engineering education in India.

The collaboration between the two would impart the cutting edge education in information technology and offer inter-disciplinary research through SSN School of Advanced Software Engineering (SSNSASE), located near Chennai, Shiv Nadar said today. He added that the trust, which has already invested about Rs 56 crore in SSNSASE, would invest an additional Rs 20 crore this year. The SSNSASE would master’s degree courses in information technology/software engineering (MS IT /SE) in India. It will cover e-commerce, networking, robotics, artificial learning, and security among others.

Pointing out that the institute is targeting 1,000 undergraduate, 1,000 post graduate and 300-200 doctoral students, Nadar said, the institute would be totally self-funded.
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PSU banks in recast mode
New Delhi--Public sector banks are all set to adopt a three-tier operational structure and shed the older four-tier operational structure.

Now the PSBs (public sector banks) plan to shut down their regional offices or zonal offices and cut one level from the present four-tier structure spanning across branches, regional offices, zonal offices and head offices.

While Allahabad Bank is planning to close down zonal offices so that it can re-deploy 600 employees to deficit centres, a similar strategy is being followed by Bank of Baroda.

Indian Bank had already initiated this programme in August 2000. For Canara Bank, the strategy is to merge regional offices with circle offices wherever the two are located at the same centre.

This is in the wake of the successful completion of the voluntary retirement scheme, resulting in the exit of 99,452 employees across 26 banks.

Syndicate Bank has shut down 10 regional offices at those centres where one regional office is already present. A similar strategy has also been adopted by Union Bank of India and Vijaya Bank.

Andhra Bank is merging zonal offices to meet its staff requirements and has already reduced about 40 per cent of the controlling offices.

Others like Indian Overseas Bank have initiated a review of their branch network to improve operational efficiency and, like other PSBs, restructuring of the administrative tiers is also on the anvil.

Simultaneously, banks have initiated steps to simplify procedures so that the response time for carrying out various transactions is reduced.

Post-VRS, PSBs also plan to embark on a major technological upgradation drive with installation of ATMs and full computerisation over the next two years.
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Commercial vehicles Q2 sales plummet
New Delhi—Amidst a general slowdown commercial vehicle sales fell 15.3 per cent during April-June 2001-02.
Total sales plummeted to 27,156 units from 32,077 units sold in the year-ago quarter according to figures complied by the Society of Indian automobile Manufacturers (SIAM).
Medium and heavy vehicles, which comprised 61 per cent of the total commercial vehicles sales, declined by 8.5 per cent at 16,588 units over 18,137 units in the same quarter last fiscal.
Sales of light commercial vehicles sales dipped by 24.1 per cent year-on-year at 10,568 units over 13,940 units.
Market-leader Telco sold 10,206 M&H vehicles, down 13.2 per cent over 11,768 units sold in the year-ago period.
In the LCV segment, the company recorded a 32.5 per cent decline at 5,825 units in the review period against 8,634 units sold last year.
The Hinduja Group flagsip, Ashok Leyland, however, posted a flat growth at 6,382 M&H vehicles against 6,341 units sold during April-June 2000-01.
The company managed to sell only 75 LCVs over 100 sold in the year-ago quarter.
Hindustan Motors failed to sell a single M&H vehicle compared to 28 vehicles sold last year.
Mahindra & Mahundra's LCV sales slipped 41 per cent at 1,128 vehicles during April-June 2001-02 against 1,931 units in the same quarter last fiscal.
Eicher recorded an increase in sales and sold 1,731 vehicles, up 9.4 per cent over 1,581 vehicles sold in the year-on-year quarter.
Swaraj Mazda sales also increased by 32.8 per cent at 1,302 LCVs against 980 units sold in the year-ago quarter.
However, sales of Pune-based LCV-maker Bajaj Tempo fell by 30 per cent at 507 vehicles as compared to 732 vehicles sold during April-June 2001-02.
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Electricity Bill gives open access to bulk consumers
New Delhi-- According to the Draft Electricity Bill, 2001, prepared by the power ministry, open access for bulk consumers of electricity will be allowed on payment of a surcharge in addition to the wheeling charges.

This would mean that big industries and large commercial or residential complexes could purchase power directly from the generators.

The wheeling charges and surcharge would be determined by the appropriate regulatory commission, and would be used for providing subsidy to the supply of electricity to rural areas.

A senior power ministry official said that the surcharge would take care of the cross subsidy for supply of cheaper power to rural and less remunerative areas and would be in place till the cross subsidies are not eliminated, he added.

The Bill which is likely to be introduced in the ongoing monsoon session of Parliament, has also proposed open access of the transmission lines to the distribution licensees and the generating companies at the outset.
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Rural credit may rise three-fold over next five years
Mumbai--Though agricultural production is likely to grow at about three to four per cent a year, demand for rural short term credit is expected to more than treble to Rs 86,000 crore a year from Rs 28,000 crore over the next five years. This is as per a report prepared by an expert committee on rural credit. The report was handed over today to Y C Nanda, chairman of National Bank for Agriculture and Rural Development, which had set up the committee.
The report says that conventional agriculture will become more resource-intensive and require greater volumnes of purchased inputs and groups that presently receive little or no institutional finance will also need increased and intensified coverage.
The committee said the progress of rural credit has slowed down in recent years, as banks have become a litte more cautious lest they add to their non-performing assets.
Agricultural production itself has suffered mainly from unavoidable and unpredictable climatic factors. Consequently, credit institutions need to be reinvigorated to face their tasks in the new millennium.
Financial and banking reforms presently implemented need not hurt rural credit, if applied with a degree of sensitivity to special circumstances of agriculture, it said.
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