New Delhi: After a temporary bar due to security concerns, the government has lifted ban on state-run telecom firm Bharat Sanchar Nigam Ltd (BSNL) to procure equipment from Chinese vendors, reports PTI.
"In the interest of national security, the government had directed BSNL in May, 2009 that resources should not be procured from the Chinese vendors for deployment in the sensitive regions (especially border states)," minister of state for telecom and IT Sachin Pilot said in a written reply to the Rajya Sabha.
New guidelines have been issued for procuring telecom equipment from foreign vendors in consultation with the ministry of home affairs to address security concerns, Mr Pilot said, adding "accordingly, now BSNL may enter into agreement with foreign vendors for purchase of equipments/ software/ services."
In its last tender for about five million GSM lines, the public sector undertaking (PSU) had invited bids only from three European and American vendors and Chinese companies were totally left out.
BSNL employee unions raised the issue with the Department of Telecom (DoT) last week. They alleged that the ban on BSNL for buying equipment from Chinese vendors was "discriminatory", as private players were allowed the imports from China.
Elaborating on the reasons for "discrimination" against BSNL, Mr Pilot said that participation of foreign companies in strategic sector has bearing on national security. "BSNL being a public sector undertaking, its network has to be relied upon in emergencies," he added.
Earlier, DoT had barred BSNL from deploying Chinese equipment in sensitive regions-Assam, Manipur, Tripura, Sikkim, Nagaland, Arunachal Pradesh, Mizoram, Meghalaya, West Bengal, Gujarat, Rajasthan, Punjab, Jammu and Kashmir, Himachal Pradesh, Uttarakhand and Maharashtra.
Now, with the new guidelines and template of agreement between telecom service providers and equipment vendors in place, BSNL would be able to place the orders with any foreign firm including from China.
Questioning the rationale behind the move, Sanchar Nigam Employees Association had said, "This is absolutely ridiculous for the simple reason that the move is just intended to jeopardise the growth of BSNL.
"How are the security interests of the country protected while allowing private operators to install Chinese GSM equipment and restraining BSNL from doing so?"
BSNL plans to expand network capacity manifold in the coming months in view of growing demand for mobile telephony, especially in the rural areas. Allowing BSNL to buy equipment freely from foreign vendors will help the state-owned firm in taking commercially viable decisions.
The best kept secret about the Indian capital market is that in 20 years of economic liberalisation and market development, we have reduced it to a mere casino
How wide is the public participation in the shining new India's financially successful stock exchanges? Here are some startling facts disclosed by minister of state for finance, Namo Narain Meena, in response to a question (1692) asked by Mohammed Adeeb, a Member of the Rajya Sabha.
On 10th August, the Minister said that trading in the top 10 companies accounted for nearly a quarter (24%) of the cash equity market turnover on the National Stock Exchange (NSE) in the April-June 2010 period. In the derivatives segment (equity futures and options) trading in top 10 companies rose to a massive 38% of all turnover. The NSE is a near-monopoly. It has a market share of 96% (cash and derivatives combined) and has absolutely no competition in the derivatives trading segment. Trading in derivatives is seven times that of the cash segment, accounts for the bulk of its profits and therefore fat salaries of the very few at the top.
The Minister also said in his response that 67% of all transactions in the derivatives markets are by day-traders who square off their transactions on an intraday basis. In the cash segment, only 36% of the transactions lead to delivery, the rest are squared off. The NSE has 1987 securities available for trading in the cash market and 203 stocks trading in the derivatives segment, including four indices.
The data shows that the market has neither depth nor diversity and only a small segment of Indians are involved in the market - that too in the form of speculation by day traders in a few select products including the main index, Nifty, one of the largest traded products. Currently, index futures account for 11% of daily turnover while index options account for a massive 55% of daily turnover. Interestingly, futures and options trading on the 200-odd stocks account for just 34% of its daily derivatives turnover.
Also, contrary to perception, institutional investors do not dominate the market. In fact, 52% of the turnover in the cash market as well as derivatives comes from retail investors, high net worth individuals and corporate investors. This is hardly a market that can hope to support a big disinvestment programme by the government or even the fund-raising plans of large Indian companies. No wonder, retail subscriptions to public issues have dwindled.
In its zeal to add more and more stocks to drum up more and more volume, NSE has added dozens of stocks that have no trading interest and therefore no liquidity in the derivatives segment. Just 106 contracts of India's largest paint company, Asian Paints, were traded on 17th August. Container Corporation, a giant public sector company, does not trade more than 10-12 contracts a day. Recently NSE added a scrip called Samruddhi Cement - the erstwhile cement business of Grasim. On 17th just three contracts of the scrip were traded.
New Delhi: The World Bank has approved a loan of $430 million for financing the Mumbai Urban Transport Project (MUTP) II, that is aimed to improve the transport situation in the financial capital, reports PTI quoting government sources.
The loan will be used to finance procurement of electrical equipment for the manufacture of Electrical Multiple Unit (EMU) rakes, conversion of Direct Current (DC) to Alternate Current (AC) on the Central Railway, technical studies and institutional strengthening studies, minister of state for railway K H Muniyappa said.
The project has been outlined as an integrated rail and road project and includes significant suburban rail and road investment. It is expected to be completed by 2014-15.
In a written reply in the Lok Sabha, the minister said the project also involves construction of the fifth and sixth lines between Chhatrapati Shivaji Terminus Mumbai (CSTM) and Kurla station, extension of harbour line from Andheri to Goregaon, EMU procurement and manufacturing and maintenance facilities for EMUs.