Govt announces hike in paddy procurement price
New Delhi: The Union Government is planning to announce an all-time-high Rs60 per quintal hike in the procurement price for paddy during the forthcoming 2006-07 kharif marketing season (October-September). Of the Rs60 per quintal rise, Rs10 would be by way of a higher minimum support price (MSP), while farmers are to additionally receive a bonus of Rs50 per quintal. The effective procurement price — to be approved at the next meeting of the Cabinet — would work out to Rs630 per quintal for common paddy and Rs660 per quintal for `Grade A' paddy, highly placed sources said.

The move to hike procurement price substantially comes even as total rice procurement in the ongoing 2005-06 season has crossed a record 26 mt and is slated to end up touching 27 mt. As on April 1, rice stocks in the central pool, at 13.67 mt, were more than the minimum buffer norm of 12.20 mt. Besides the rise in paddy procurement price, the Cabinet is also scheduled to clear the proposed inclusion of coarse grains for distribution through ration shops. Currently, only wheat and rice are issued under the public distribution system.

But with Central pool stocks of coarse grains close to one mt, the Government feels it would be possible to use these to partially offset the shortfall in wheat supplies, particularly in Karnataka and Maharashtra.
Back to News Review index page  

SUV import norms tightened
New Delhi: The Government has tightened the norms for import of motorcars and sports utility vehicles by the hospitality and tourism industry under the export promotion capital goods (EPCG) scheme. The government has taken this step after the Revenue Department found that vehicles imported under a concessional duty of the EPCG scheme, to promote tourism had found their way to select politicians and film stars for their personal use. A number of such vehicles were impounded and the owners were made to pay the full duty on imported cars.

The Directorate General of Foreign Trade (DGFT) has now through an executive order brought about some disciplining on the registration front. It has stipulated that vehicles imported by the hospitality and tourism industry under the EPCG scheme should be registered either as a tourist vehicle or should have an appropriate registration specific to a particular State enabling the vehicle to be used for tourist purposes.

Moreover, a copy of the registration certificate should be submitted to the concerned licensing authority as a confirmation of the vehicle having been imported and capital goods installed.

SUVs and all purpose vehicles should not exceed 50 per cent of the average foreign exchange earnings from the hotel, travel and tourism and golf tourism sectors in the preceding three licensing years.
Back to News Review index page  

Paper imports rose 14.04 per cent in 2005-06
New Delhi: Pulp and waste paper imports rose by 14.04 per cent in the last fiscal. The value of the imports stood at $558.22 million in the fiscal 2005-06 compared with $489.51 million in the previous fiscal. The imports of paperboard were on the rise as well witnessing a 39.55 per cent increase during the last fiscal to $982.03 million compared with $703.7 million in the corresponding period last year, according to Government data.

Analysts attribute the jump in imports to the rising cost of raw materials for writing and printing paper, duplex board and newsprint. While pulp, waste paper and paperboard have registered a significant rise in imports, the increase in newsprint imports has been around 10.08 per cent during the last fiscal.

R.R. Vederah, joint managing director, Ballarpur Industries (BILT) and President of the Indian Paper Manufacturers' Association said: "The primary reason for the import of pulp and other intermediary products is because it is more cost-effective to do so."

Analysts say the quantum of pulp imports will increase in the future on the back of robust demand for paper in the country which is expected to grow in line with the GDP.

While companies such as BILT are resorting to acquisitions abroad to satisfy their raw material requirements, other paper firms such as Orient Paper and Industries Ltd (OPIL) are relying on local plantations to meet their needs. BILT is in the process of conducting due diligence of a Malaysia-based paper mill Sabah Forest Industries with an intention to acquire it and later build a paper mill on the premises. According to the company the per tonne cost of wood or fibre in Malaysia is almost half than that in India and BILT wants to take advantage of these low costs to procure pulp from Malaysia.

Industry sources say there is not sufficient land available to achieve economies of scale.

Industry watchers say that the Government nod for public-private partnerships for plantations in degraded forestlands in the country will go a long way in solving the issue.
Back to News Review index page  

SEZs grow at 25.8 per cent rate in 2001-05
New Delhi: Though the special economic zones (SEZs) set up by the government as export growth drivers may have a long way to go in emulating the success of their Chinese counterparts they have been reasonably successful in driving economic growth.

Exports from the eight SEZs functioning in the country have registered a healthy compounded annual growth rate of 25.8 per cent between 2001-02 and 2004-05, according to the Ministry of Commerce and Industry data.

However, this is far behind the scorching pace set by their Chinese counterparts. For instance, the Shenzhen SEZ in China recorded a growth of 38 per cent CAGR between 1981, when it was started, and the year 2004 - the highest economic growth rates recorded from any such enclave worldwide. While the Indian SEZs do have to catch up with respect to the Chinese zones, the SEZs here could prove to be instrumental in the Government's efforts to get anywhere close to the Ministry of Commerce and Industry's target of capturing a one per cent share of world exports (exports to the tune of $80.48 billion) by the end of the current fiscal.
Back to News Review index page  

Govt puts conditions to Nalco selloff
New Delhi: The Ministry of Mines has agreed to offload 10 per cent stake in National Aluminium Company Ltd (Nalco) provided that the proceeds are utilised for the company's own expansion plan and not be put into the Consolidated Fund of India. The Government has proposed to off-load 10 per cent of shares in Nalco in the market which will bring down its stake in the company to 77.15 per cent.

On Bharat Aluminium Company (Balco), the Ministry would tread on the path suggested by the Attorney General of India (AGI) and the Law Ministry which had opined that the shareholders' agreement between Government and its strategic partners in Balco, the Sterlite group, is in violation of the Companies Act and that the Government, if it so decides, can go for a public issue to bring down its stake in Balco.
Back to News Review index page  

Centre grants approval for Hyderabad gems SEZ project
New Delhi: The central government has approved the Rs500 crore Hyderabad gems Special Economic Zone promoted by Gitanjali Gems. The project would be set in the 200 acre Rajiv Gems Park in Shamshabad near Hyderabad and will have an estimated turnover of Rs5,000 crore according to the company.
Earlier, the Andhra Pradesh government had approved and allotted land for the project and work on the first phase had commenced in November 2005, it said.

The Hyderabad gems SEZ is partly funded by the company and would be third of its kind after Surat and Kolkata.
Back to News Review index page  

Fiscal deficit target on track: FM
New Delhi: The finance minister P Chidambaram has said fiscal the deficit target of 3.8 per cent of GDP for this financial year would be achieved and figures released for the month of April were high because of miscalculation under one head of interest payment.

He said collections on five taxes have surpassed the target for the months of April and May.

The figures, released by Controller General of Accounts, showed that fiscal deficit was high at Rs31,956 crore in April, constituting 21.5 per cent of the budget estimates of Rs1,48,686 crore for the whole year.

Fiscal deficit in the first month of last fiscal had constituted 18.8 per cent of the estimates for entire 2005-06.

The government has set a target of reining in fiscal deficit at 3.8 per cent of GDP from 4.1 per cent last fiscal.
Back to News Review index page