Business

The proposed jute park project has been hanging fire for over two years with the erstwhile Jute Manufacturers' Development Council, now called the National Jute Board (NJB), raising technical blockades and the departments of panchayati raj and land reforms of the West Bengal government locking horns over the authorized delegation of the title of the land allotted for the project.

This jute park project has been rejected despite being granted in-principle clearance by the Union textiles ministry in 2008.

The first jute park in the country was to be developed by the Kajaria Group, one of the biggest groups in the sector. The Kajarias, the promoters of the project had requested the NJB to transfer the in-principle approval granted by the Union textiles ministry in the name of Shaktigarh Textiles Industries Limited (STIL) from the previous Shaktigarh Jute Parks Infrastructure Limited (SJPIL), a special purpose vehicle formed for the project.

The Kajarias had lined up an investment of around Rs 20 crore for setting up the jute park on 23 acres in Burdwan district. They were supposed to get a subsidy of Rs7.5 crore on the project cost.

The West Bengal panchayati raj department had leased the land to STIL, but change of title can only be done by the land reforms department. In a last ditch effort to save the project, the promoters of the project have sought the West Bengal Chief Minister's intervention.

"We spent Rs 15crore to set up manufacturing facilities as we were given in-principle clearance in 2008. However, we suffered because of unforeseen delays. We are still optimistic that our venture will be sanctioned in the second phase", says Srivatsa Kajaria, promoter of STIL.

Not quite test tubes or petri dishes; geo tubes are the new panacea. Stacks of geo tubes filled with sludge dredged out of a muddy river will be part of the process of manufacturing that most contentious and presumably precious of commodities -- land. The politics of land acquisition has reached a point in India of which West Bengal is a part that infrastructure creation is stalled, investors are wary and the land losers, their advocates and patrons prefer obstruction and agitation.

With land as a stumbling block nothing much can happen. Therefore, the Kolkata Port Trust desperately in need of a deeper port than is currently available has hit upon the idea of enlarging Sagar Island, at the tip of the Sundarbans to set up a port. Land will be created out of the silt that is dredged from the Hooghly and with the new land where there are no land losers, the port authorities can develop the infrastructure needed to serve sea-going vessels with a draft of nearly 11.5 m. The extension will be able to handle about 60 million tonnes of cargo every year.

So urgent is the need that the port authorities have also planned to manufacture another 200 acres of land at Shalukhali in East Midnapore for the extension of the Haldia docks. This stands on its head the age-old belief that land cannot be produced out of thin air. In other words, necessity is the mother of inventions.

Source: The Pioneer By Shikha Mukerjee Manufacturing Land To Avoid Controversy

The Bengal Shipyard project at Haldia which has been lying in a state of limbo for sometime now has seen little progress in land acquisition at Haldia. "We do not think that much will happen on the land acquisition front next year also. Let's see what we can do with the Bengal Shipyard project," group chairman Karan Paul said.

The company, which is present in sectors ranging from tea to real estate, conceived the project almost three years back. It required almost 500 acres for the project titled Bengal Shipyard- a joint venture of Bharti Shipyard and Apeejay Surrendra Group. "We are yet to receive land for that," Paul told newspersons in Kolkata.

The West Bengal Industrial Development Corporation (WBIDC) on Tuesday made a firm commitment to Jai Balaji Industries, Adhunik Group and Shyam Steel to complete the process by the stipulated time.

All the projects are coming up in the backward area of Raghunathpur in the Bankura district and require a total of 7,400 acres. The projects entail a total investment of Rs 24,000 crore. WBIDC officials had a meeting with the Bankura district officials on Monday evening, where the deadline for land allotment was fixed.

The local CPI (M) Lok Sabha member, Basudev Acharya, who was also present at the meeting, emphasised on time-bound completion of land allotment.

The West Bengal Industrial Development Corporation (WBIDC) on Tuesday made a firm commitment to Jai Balaji Industries, Adhunik Group and Shyam Steel to complete the process by the stipulated time.

All the projects are coming up in the backward area of Raghunathpur in the Bankura district and require a total of 7,400 acres. The projects entail a total investment of Rs 24,000 crore. WBIDC officials had a meeting with the Bankura district officials on Monday evening, where the deadline for land allotment was fixed.

The local CPI (M) Lok Sabha member, Basudev Acharya, who was also present at the meeting, emphasised on time-bound completion of land allotment.

``About ports, there have been some proposals for corporatisation, but it is not disinvestment. It is conversion of the legal entity structure to corporate structure,'' Shipping secretary K Mohandas told newsmen here on Tuesday.

He, however, said a final decision is yet to be taken. The shipping secretary said the government would prefer a ``landlord'' pattern for corporatisation, under which the corporate body will own the port, while the services will be leased out.

``Ideally, a landlord structure has been recommended...the corporate entity will own the port property and the actual operations would be leased out,'' he added.

Once the structure is changed, the ports will have the freedom to set tariffs that will help them compete with foreign and Indian private ports better.

India has 12 state owened ports--Kolkata, Paradip, Visakhapatanam, Ennore, Chennai, Tuticorin, Cochin, New Mangalore, Mormugao, Mumbai, JNPT and Kandla--which handle over 500 mt of cargo annually.

Bandhan's decision will directly benefit its 25 lakh-odd poor women borrowers. The country's fourth-largest MFI by outstanding loans said the new rate will be effective May 1.

"We have proved that it's doable (reducing interest rates)," said Bandhan managing director Chandra Shekhar Ghosh after taking the decision at a board meeting on Monday. "Others should reduce rates too." In general, leading MFIs offer loans to borrowers at around 24% a year.

Small Industries Development Bank of India, or Sidbi, which supports MFIs with capital support and loans, welcomed the move. "This is what we wanted them to do. We want all MFIs to follow Bandhan," said Sidbi chief general manager KS Singhwan told ET. Reserve Bank of India too has time and again urged MFIs to reduce rates.

Reacting to the development, micro lender Village Financial Services managing director Kuldip Maity said: "It's a good sign for the sector. We will look at opportunities to reduce interest rates as well after five-six months." Village Financial Services cut lending rates in January 2010 to 23% from 28%.

Source: Economic Times By Atmadip Ray Bandhan slashes lending rate to 19.1%

Cheap and skilled manpower, along with low cost of living compared to other cities, is drawing entrepreneurs to the state.

According to the latest Business Confidence Index (BCI) by industry body Associated Chambers of Commerce and Industry of India (ASSOCHAM), West Bengal has scored 6.5 on a scale of 10.

The score, while indicative of the state government's industry-friendliness, is at par with investment destination states such as Gujarat, Maharasthra, Karnataka, Andhra Pradesh, Rajasthan and Himachal Pradesh, according to the report. As per chamber estimates, West Bengal has received investments of up to Rs 5.3 lakh crore till September 2009 over a 12-year period which indicates the investors' confidence on the State, said D S Rawat, secretary general, ASSOCHAM while releasing the Survey.

"India Inc. still trusts the State government's industry-friendly policies which are working on the right direction to make the state's industrial prospects conducive," according to the report.

Source: Business-standard West Bengal back on investment radar, says Assocham survey

Addressing a State Summit organised by Bengali news channel Chobbis Ghanta, he said the figure was a vast improvement over 2008, when only Rs.4,000 crore had come in to the state.

Industries Minister Nirupam Sen said the state had received expressions of interest of Rs.44,390 crore for 206 units in 2009.

Bhattacharjee said the state registered an agricultural growth rate of four percent last year.

Agriculture constituted 22 percent of the state gross domestic product of West Bengal, whereas industry contributed 18 percent and the service sector 59 percent.

"As far as the contribution of agriculture is concerned, it is not a happy situation. Industry should overtake agriculture," he said.

The chief minister conceded that in education, children from poor families had been a neglected lot. "Economist Amartya Sen has pointed this out. We have to correct this."

The state government was also trying to reach out to six lakh children who were outside the education system, he added.

The company supplies brake drums to Tata Motors' commercial vehicles plant at Jamshedpur in Jharkhand. It is expanding the production capacity of its existing foundry in Kona Expressway, a Kolkata suburb, from 48,000 tonnes a year to 60,000 tonnes a year within the next two-three months.

Once the new plant, the site of which is yet to be be finalised, is commissioned, the city-based company's capacity would double to 120,000 tonnes a year by 2011-12, the official said.

"We may go for long term loans of about Rs.40-45 crore for the new planned project or may also go for an IPO (initial public offer)," company chairman S.S. Kejriwal said at a press meet to announce the completion of the expansion project.

Source: Thaindian.com Kiswok To Spend Rs.120 Crore On New Foundry  

The company, which is part of the city-based Adhunik Group of Industries with interests in steel, mining and power, has just been provided 505 acres at Raghunathpur in the state's industrially-backward Purulia district. The company had requested for a total of 700 acres in the area. This was confirmed by sources in West Bengal Industrial Development Corporation, (WBIDC), the state's nodal arm for industrial development, which facilitated land for the project.

Adhunik Corporation's project involves setting up a steel plant with a capacity of 1.1 million tonnes per annum (tpa) along with a 1,000 mw captive power plant and a 1 million cement plant at Raghunathpur. The company is involved in production of sponge iron at Durgapur and also manufactures billets made out of alloy steel.

The company had entered into an MoU with the West Bengal government for the proposed project in December 2007 around the time when the state received a spate of proposals for investment in iron and steel sector. As per the MoU with Adhunik Corporation, WBIDC and West Bengal Mineral Development & Trading Corporation will facilitate land, coal and water for the project.

However, with the economic slowdown hitting the steel sector prospects adversely since October 2008, most companies were forced to postpone their plans for setting up new plants. In the past few months, with the economy showing positive signs of recovery, steel companies are once again reviving their expansion plans.

The disclosure norms are seen as a precursor to allowing insurance companies to hit the primary market.

According to the new norms, insurers will have to publish their balance sheet on half-yearly basis starting from the period ending March 31, 2010, ie beginning with the October-March period. Such disclosures will be necessary for all insurers even if they are not listed on any stock exchange, the Irda said.

Irda said several insurance companies will be completing 10 years shortly, after which they may be allowed to go for an initial public offer (IPO).

It is also essential that investors are made fully aware of the financial performance, company profile, financial position, the risk exposure, elements of corporate governance in place and the management of the insurance companies. Such data shall preferably be made available for at least a 5-year period prior to the IPO.

The regulator has directed all firms to come up with a public disclosure framework to ensure a fair and stable insurance market.

Source: DNA By Nandini Goswami Half-yearly accounts a must for insurers

At present, the prescribed solvency margin, which is the excess of assets held by the insurer in the interest of policy holders is 150%. The solvency margin requirement will be much lower than the prescribed norm during an economic downturn. But this would mean that insurers will have to reckon with a higher solvency requirement during a boom. Simply put, they will have to save for a rainy day to tide over tough times when their sales and growth in business dips.

Solvency margin requirements are the equivalent of capital adequacy norms for the banking industry. RBI is already following the practice of having prudential norms that are countercyclical. For instance, in the past, RBI has increased the margin requirement for loans against shares when equity indices touched a new high. The central bank has also varied capital requirements for banks by tinkering with risk weightage on loans. In real estate loans, the central bank had increased the risk weightage when property prices soared in 2008 only to reduce them again when prices crashed in 2009.

IRDA too had reduced capital requirements for life insurance companies in 2008, following the crash in equity markets worldwide. The regulator had reduced capital requirements by almost a fifth in January 2009. For products with a guaranteed return, the capital requirement had been eased by 7%, whereas for products where there is no guarantee, the reduction is 20%. Given the industry's product composition, the overall capital requirement towards solvency margin would be lesser by 18%.

Source: Economic Times Insurers will soon have an easier solvency mandate

The forging plant would have a production capacity of 40,000 tons while the integrated steel melting shop (SMS) would have an annual capacity 0.3 million tons. At present the group is involved in making heavy engineering products like gear boxes, rolling stock items, railways equipment etc for both private and public sectors from India and abroad.

The forging plant would have equipments from world leading companies and some of them would be used for the first time in this forging industry, said Chakraborty.

The plant would produce all grades of forgings like high carbon, high chromium, stainless steel etc and later may produce 500 mm round casters for the first time in India depending on the customers’ needs and requirement, said the company.

The company will supply to industries in India and abroad and cater to the needs of industries like power, cement, gear, iron & steel, defense, oil & Gas, sugar, heavy eng, railways.

The average yearly remittances from Bengalis abroad amounts to approximately Rs 40,000 crore, NROAB President Nilangshu Dey said, which was separate to commercial investments that had been made by the individuals in West Bengal. "However, non-resident Indians (NRIs) from West Bengal need guidance to invest here. We have initiated dialogue with the West Bengal Industrial Development Corporation and the Bengal Chamber of Commerce to set up a special NRI cell," Dey said.

Similar cells existed in Kerala, Punjab and Gujarat which boast of large numbers of NRIs, he added.

Although potential investors are looking at long-term opportunities, possibly to hedge the current political instability in the state, food-processing, renewable energy, engineering and education are the likely sectors that could see funds from abroad. "Already about 25 firms have been opened by NRIs in West Bengal with a combined investment upwards of Rs 300 crore," Dey said. NROAB is organising the Prabashi Bangiya Sammelan early next year in Doha to promote West Bengal as a investment destination for NRIs from here. The event is likely to be attended by state industries minister Nirupam Sen.