Pre-budget exercise to begin on June 4
New Delhi: P Chidambaram, the finance minister, is scheduled to begin pre-budget consultations with various groups, including industrialists and economists, on June 4 followed by two sessions with trade union leaders and economists on June 5. Former finance minister Jaswant Singh discontinued this practice though his predecessor Yashwant Sinha had even included senior editors in these consultations. The exercise is usually spread over a week, but has been curtailed to just two days at present due to shortage of time. The general budget or vote on account for 2004-05 is expected to be presented in the first week of July.
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7 - 8 per cent for 2004-05 says FM
New Delhi: Finance minister P Chidambaram said he is targeting a 7-8 percent growth for the economy for 2004-05 and that this growth rate would be attained subject to fiscal prudence and financial discipline. He added it was possible to do so by staying within the broad goals outlined in the United Progressive Alliance's common minimum programme. Chidambaram also said it was important to "win back the confidence of the business community and allay the apprehensions of the key economic players."

Speaking to the press after meeting the Securities and Exchange Board of India and stock exchange brass and leading bankers he said the key objective of his visit to the financial markets in Mumbai was to reiterate that the government was committed to reforms. Chidambaram said that he would initiate all the measures needed to win the confidence of investors like creating a market stabilisation fund and to allowing banks to take higher equity market exposure.

Chidambaram met with SEBI Chairman GN Bajpai, Bombay Stock Exchange CEO Manoj Vaish and leading brokers Vallabh Bansali of Enam Securities and Motilal Oswal of Motilal Oswal Securities, among others. He also met with a number of bankers like State Bank of India Chairman AK Purwar, Punjab National Bank chief PS Kohli, the heads of Bank of India, Bank of Baroda, Canara Bank, and of the private sector ICICI Bank and HDFC Bank.
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Corporate profits more than double in 2 years
Mumbai: A study of results of 1,350 companies shows that they posted an aggregate net profit of Rs41,055 crore for the year ended March 31, 2004, up 152 per cent from the net profit of Rs16,232 crore in the year ended March 31, 2002.

Of the 1,350 firms, as many as 181 turned around, posting an aggregate net profit of Rs5,592 crore in 2003-2004 versus a net loss of Rs4,444 crore in 2001-2002. Apart from this 330 firms reduced their losses and only 76 recorded a combined net loss of Rs1,025 crore (they'd made a net profit of Rs158 crore). What is more, the net profit of 289 companies rose by over 100 per cent in the last two years.

The surge in profits is due to the double-digit growth in sales in two consecutive years and interest savings of Rs5,500 crore in two years. Tight inventory management and operational efficiency, too, helped bolster profit margins, with net profit margins (NPM) up almost 300 basis points from 3.34 per cent in 2001-2002 to 6.31 per cent in 2003-2004.
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Gujarat plans SEZ for auto components
Ahmedabad: The Gujarat government is thinking of setting up a special economic zone (SEZ) specifically for the auto components industry to be based in Halol-where the world's largest car maker General Motors' lone production unit in the country is based. The SEZ is estimated to require investments close to Rs1,500-2,000 crore according to sources. The SEZ could be developed specifically for exports, considering the growing need for global outsourcing for cheap automobile parts.

Seven global automakers, including Ford, GM, DaimlerChrysler, Fiat Auto, Toyota and Volkswagen, have set up procurement offices in the country, indicating to the growing demand from the international market. This is mainly because the production cost for Indian component manufacturers is on an average 20-30 percent lower than that for US firms. This benefit will only increase once the Indian industry achieves the critical mass, and is allowed to operate in an SEZ environment.
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Indian pharma companies target Japanese market
Kolkata: The Indian pharmaceutical sector is now eyeing Japan, the world's second largest drug market. Japan's healthcare sector is seeing a number of reforms, which has led to this. This pertains to the increase in the use of generic drugs now being encouraged by the Japanese government as against the use of branded prescriptions earlier.

The generic penetration in the Japanese pharma market has been traditionally low at about 5 percent (about $2.5bn in value terms) and is seen to grow in the future. The shift towards generic drugs has triggered off an interest among Indian pharma majors. While Ranbaxy, Lupin and Dishman have already made plans to capitalise on the market, others are closely watching the trend.
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Gujarat to become power surplus in five years
Gandhinagar: Gujarat, at present a power deficit state, may become power surplus over the next five years if even half the 20 major power projects under implementation or in the pipeline become operational in the next five years. The deadline of maximum five years was fixed by the concerned agencies including the state energy and petrochemicals department.

As of now, eight projects, including a private initiative, are under various stages of implementation. They are expected to generate around 2,600 MW of power in the next two years. Around 12 projects including three from corporate houses are expected to be commercially operational by 2010, generating around 8,400 MW.
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