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Indo-Pak joint study group on economic cooperation to meet soon
New Delhi: India and Pakistan have agreed to hold the second meeting of the joint study group (JSG) on economic cooperation in Islamabad soon.

Officials said that a meeting of the sub-groups on non-tariff barriers, customs cooperation and trade facilitation would precede the JSG meeting. Its recommendations will then be considered by the JSG.

At the two-day (August 9-10) secretary level talks between India and Pakistan in New Delhi the two neighbours decided to hold dialogues in Pakistan next month to review the existing air services agreement. Pakistan will also host a bilateral meeting to look into the shipping protocol of 1975 with India.

According to an official release, the two sides discussed the decision taken during the visit of Pakistani President Pervez Musharraf to India in November 2004 to open branches of scheduled banks in each other's country and agreed that requests for opening bank branches in both the countries would be processed expeditiously to enhance bilateral trade relations.
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Chinese council calls for speeding up of trade ties with India
Hyderabad: The China Council for the Promotion of International Trade (CCPIT) has asked that the pace of establishing the Sino-Indian Free Trade Area (FTA) be quickened.

Speaking at a conference organised by the Confederation of Indian Industry (CII) on 'China: A India Opportunity,' Wang Jinzhen, assistant chairman, CCPIT, said that both China and India are the world' largest developing countries but the bilateral trade and economic cooperation is too small compared to their economies.

"So we need to find ways to expand and establishing China-India FTA is a way out. This issue is under study and should be expedited," he added.

The Chinese government has set an objective to increase the two-way trade between India and China to $20 billion by 2008 and $30 billion by 2010.

"India is the only country in South Asia that China has a trade deficit with. During January-May 2005, Sino-Indian trade reached $7.71 billion, a 41 per cent increase over the same period last year. While China's exports are mainly machinery, electrical goods and textiles, India's exports to China are mainly mineral products, chemical products and plastics," Jinzhen said.

Aiming to woo Indian entities to invest in China, Jinzhen said that they were expecting their GDP of the year 2000 to double by 2010 and redoubled by 2020.

Speaking about the investment climate in China, he added, "By the end of May 2005, the Chinese government approved 5,25,378 foreign invested projects with contractual value of $1.16 trillion."

"However, we still lack in key technologies for our export products and 57 per cent of exports were by foreign invested enterprises. We are also short of our own brand products and we are now working on improving in this area," Jinzhen said.

The CCPIT and the CII signed a memorandum of understanding at the conference, aiming at promoting trade and commerce besides exchange of data and business delegations between the two countries.
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Sectoral redefinition: Small scale joins medium
New Delhi: Finance minister P. Chidambaram has declared that all industrial units with investments of up to Rs10 crore in plant and machinery will be deemed medium enterprises. He has also asked the state-run banks to lend up to Rs81,000 crore to these units in the current financial year.

The new directive widens the scope of an earlier order under which more loans were to be extended to this sector. This marks a move away from the government's small sector oriented credit policies.

Chidambaram said the definition of small-scale "needed to be revisited" and the policy should include services and trade.

"In keeping with the global practice, there is also a need to put medium enterprises into the composite sector of small and medium enterprises (SME). A comprehensive legislation enabling the paradigm shift from small-scale to small and medium enterprises is already under the consideration of Parliament," the finance minister said in his statement on the issue.

Analysts, however, see the move as a bid to skirt promises to Parliament on ratcheting up loans to the small-scale sector by broadening the ambit of lending to medium enterprises, which banks consider more viable.

A Reserve Bank internal group had recommended that the current SSI/tiny industries definition should hold for now, but units with investments of over Rs10 crore in plant and machinery could be treated as medium enterprises. However, it said only loans given to small enterprises would qualify for priority-sector lending.

Chidambaram also announced a one-time settlement of bad loans taken by small firms. Nearly 17 per cent of the Rs67,634 crore lent by state-run banks to this sector are termed "bad". Close to 3.5 million small-scale units, with investments of up to Rs1 crore, are running across the country, but banks tend to shun them because loan recovery costs are far higher.

"Small scale industries produce 8000 products, contribute 40 per cent to the country's industrial output and offer the largest employment after agriculture. The sector, therefore, presents an opportunity to harness local competitive advantages to achieve a global dominance," the finance minister said.
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FICCI study: Sixteen service sectors achieve 20 per cent growth in 2004-05
New Delhi: Sixteen service sectors in the country achieved a growth of more than 20 per cent in 2004-05, as compared to 2003-04, according to an analysis of 42 service sectors carried out by the FICCI.

Another 18 sectors clocked 10-20 per cent growth during the same period.

Based on the feedback received from representatives of various service-related industry associations and private and public sector companies, the analysis found that the sectors that recorded more than 20 per cent growth in 2004-05 included organised retail trade (30 per cent), road transport service (20 per cent), domestic air passenger traffic (24 per cent), total air cargo handled (20 per cent), mobile subscriber (55 per cent), Internet subscriber (22 per cent), and live entertainment (40 per cent).

The sectors that have achieved 10-20 per cent growth included international air passenger traffic (17.1 per cent), international air cargo (19 per cent), courier services (15 per cent), car finance (16 per cent), and film industry (17 per cent).

The analysis also found that a majority of the services, including sophisticated trade, finance and exim-related services, manufacturing industry-led services, contractual, maintenance and repairing services, belong to the unorganised and informal sector.

This sector accounts for more than 75 per cent of the services generated in the economy.
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Decision on stake in oil blocks in Kazakhstan by Dec.
New Delhi: A decision on the oil blocks to be developed by ONGC Videsh Ltd (OVL) in Kazakhstan is to be taken by the end of this year.

ONGC Videsh Ltd (OVL), the overseas arm of Oil and Natural Gas Corporation (ONGC), together with KazMunayGas, have identified two exploration blocks in that country in the Caspian region. The two concerns are currently undertaking a joint study of the seismic modes of the two blocks, Satbayev and Mukhanbet.

According to sources, the Kazakhstan side has indicated that `a definitive result should be ready by December'. As per an MoU signed between OVL and KazMunayGas, the Indian company would be given one of the blocks for joint development under a product-sharing contract. The joint study is being partly funded by OVL.

Once finalised, both OVL and the Kazakhstan national oil company would hold 50 per cent equity stake each blocks.
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Mumbai mill owners clear half of Rs.3,000 crore in debts
Mumbai: Over Rs1,500 crore in debts have been cleared by mill owners under the Development Control Regulations 58 of 2001.

According to a Mill Owners' Association (MOA) press release, there are arrears of Rs 3,000 crore due towards salaries, VRS dues, repayment of loans to banks and other statutory payments being deposited into an escrow account.

Under the modified Development Control Regulations, development of mills or property can only commence once the dues are repaid to workers and other financial institutions. The funds should be deposited into an escrow account from which it will be disbursed.

A total of 41 textile mills, including mills run by National Textile Corporation (NTC), have deposited the remaining amounts into the escrow to ensure that all dues relating to workers, FIs, banks and other creditors are settled before redevelopment plans are implemented.

According to the MOA statement, NTC paid Rs643.94 crore towards VRS to 14,800 workers. Salaries account for Rs118 crore and interest bearing bonds raised to pay liabilities in the tune of Rs1,779 crore will now be repaid. NTC also earmarked Rs1,423 crore for modernisation of seven mills.

The Bombay Dyeing & Manufacturing Company Ltd, which has two mills, has paid Rs120 crore towards VRS to 3,127 workers and has committed to pay Rs 50crore towards settling its VRS due to workers. In addition, the company will pay Rs347 crore owed to banks and FIs. It has already paid MIDC Rs19 crore for the land it has acquired for new textile mill to enhance capacity.

Hindoostan Spinning & Weaving Mills Ltd has four units in Mumbai has an outstanding amount of R112 crore towards workers dues. It has paid Rs50 crore and another Rs40 crore vide post dated cheques towards the same.

Nine other private mills, which include Mafatlal, Piramal, Modern, Dawn, Standard, Matulya, Morarjee, Swan and Simplex, together have paid Rs447.95 crore towards workers' dues and have commitments to pay over Rs1,900 crore to FIs and banks and further VRS and modernisation.

The statement added that the modified DCR 58 ensured measures to safeguard workers' interests by allowing mills to repay their debts and modernise their mills.
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