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December 14, 2000 - December 15, 2000

$150m ADB loan by month-end Friday, December 15, 2000

GANDHINAGAR: The Asian Development Bank has decided to release $150 million by the month-end to the cash-starved state.

The ADB board, which met in Manila on Wednesday, decided to give $100 million, the last tranche of the $250 million okayed for the state public sector reforms programme agreed upon way back in December 1996. Another $50 million, to be disbursed alongside, is part of a fresh $350 million loan ADB has agreed to provide for power sector restructuring.

Dubbing it a "major breakthrough", the chief minister's economic adviser S K Shelat said, "A formal agreement will be signed between the ADB and the Indian ambassador in Manila on Thursday. The loan will then be routed through the Centre to Gujarat."

While 30 per cent of the loan amount will be received by Gujarat as grant from the Centre, the rest will be a loan carrying a 12 per cent interest.

"The state government has fulfilled all major ADB conditions. The ADB is satisfied with the state's economic reforms," Shelat claimed.

These include closure of state PSUs, the Gujarat State Textile Corporation, the Gujarat Construction Corporation and Gujarat Fisheries, merger of half a dozen other PSUs, disinvestment in Gujarat Tractors, Gujarat Mineral Development Corporation, Gujarat State Finance Corporation and restructuring of the Gujarat Industrial Investment Corporation. To top it the state has begun attracting private investment for infrastructure projects.

The other main condition relates to power sector reforms including the setting up of the Gujarat Electricity Regulatory Commission as an autonomous authority to fix power tariff and Cabinet approval for the state electricity reforms Bill now awaiting Central nod.

The state has also embarked upon a programme to restructure the GEB by setting up a separate company for power generation and another one for transmission, revising the tariff for different sections of consumers including farmers, and deciding to switch over to metering of the farm sector over the next three years.

Though the first tranche of the new power sector loan will be disbursed this month, release of the rest of the amount will depend on the progress in reforming the sector.

Tentatively, the state will get another $50 million in June 2001, and an equal amount a year later. The rest of the $200 million will be given to specific projects undertaken by reforming the GEB in the next few years.

Though Shelat claimed there were "no new conditions", he admitted that the state would have to ensure that power subsidy, capped at Rs 1,100 crore, is reduced and the GEB corporatised.

Shelat conceded that the only ADB condition the state was unable to fulfil related to bringing down the fiscal deficit to 2.7 per cent of the net state domestic product (NSDP). It is currently pegged at 5.9 per cent of the NSDP.

Shelat claimed the ADB board "understood that the state was passing through a difficult financial situation on account of drought and other natural calamities".

Hinting that even new subsidies could be given under "exceptional circumstances", Shelat said, "We have handed over a five-year plan to the ADB to bring down fiscal deficit to by 2006. Satisfied, it decided to disburse $100 million."

Governor out to end Ordinance Raj Friday, December 15, 2000

GANDHINAGAR: When Sundar Singh Bhandari was appointed the Gujarat governor early last year, the news brought cheer to state BJP circles.

For one, Bhandari's predecessors Anshuman Singh and Krishna Pal Singh hadn't enjoyed cordial relations with the government. Besides, as a BJP organisation man himself, Bhandari was expected to toe the government line without a hitch.

But Bhandari is increasingly proving that he is no rubber stamp. For more than three weeks now, he is refusing to sign at least two Ordinances sent by the government.

The first Ordinance seeks to confer monopoly rights on the state government for setting up a gas grid across Gujarat; the second relates to raising the share capital of the three corporations for the SC-STs and OBCs to Rs 50 crore each.

In fact, Bhandari is said to be giving sleepless nights to ministers and bureaucrats demanding why the Bills were being sought to be pushed through by the government as Ordinances when they involved policy maters needing a debate in the Assembly.

State energy minister Kaushik Patel and social empowerment minister Fakirbhai Vaghela have been separately summoned to explain reasons for the 'urgency'. And even after meeting them, Bhandari sought fresh clarifications!

However, Bhandari's reluctance to sign the Ordinances is directly linked with the position the Assembly has been reduced to over the years, when its authority has been systematically undermined.

An 'Ordinance Raj' of sorts prevails in the state where the legislature is being circumvented for no apparent reason.

Speaker Dhirubhai Shah agrees. "Bills related to policy issues and directly affecting the people should be debated in the Assembly. Only then should they be put into operation. This is necessary for building a healthy democratic tradition."

The two Bills lying with the governor were to be taken up by the Assembly during its session from September 28 to October 3 this year. But due to "lack of time", they could not be placed in the House. If they have to be formalised in the Assembly, the government will have to wait at least two months, when the budget session is scheduled to begin.

Assembly secretariat sources quote two major instances when discussion did not take place, but yet the Bills were passed - the Gujarat Infrastructure Development Act, 1999, formalising private involvement in 384 projects worth Rs 1,17,000-crore on a build-operate-transfer basis, and scrapping of 44 laws related to land revenue which had turned redundant.

The "lack of time" cited by the government for such important matters stems from the fact that the number of Assembly sessions has been going down over the years.

Till mid-1980s, three Assembly sessions were held every year with the House meeting on 60 days. While the House met for 83 days in the year 1965, in 1969 the figure was 70 which dipped to 55 in 1979 before rising to 62 in 1986.

In the 1990s, though the number of sessions remained two to fulfil the constitutional requirement of at least one session in six months, the number of days the House met went down drastically: 45 in 1993, 43 in 1994, 41 in 1995, 37 in 1996, 32 in 1997, 39 in 1998, 32 in 1999 and 33 in 2000.

Denying that the number of Ordinances had shown an increase recently, parliamentary affairs minister Suresh Mehta remarks, "Figures do not prove that. In emergency situations, Ordinances become necessary. It would, however, be better if the number of assembly sittings and sessions go up and serious debates take place on policy issues before adopting a legislation. But sessions in such a situation should not be allowed to become a forum for useless political acrimony."

Interestingly, a meeting of the State Assembly Speakers' Committee to be held at Shirdi on December 24 is to finalise a draft report on increasing the number of 'sittings' to above 100 for Assemblies with more than 100 legislators.

Bhandari shows signs of relenting Thursday, December 14, 2000

GANDHINAGAR: The controversy surrounding refusal of Governor Sundar Singh Bhandari to put his signature on the Gas Ordinance, as there was "little urgency" for okaying it when the Assembly session would begin in two months' time, began showing signs of thaw after a meeting between the governor and state energy minister Kaushik Patel on Tuesday evening.

Coming out of the talks in which he tried to explain the reasons for urgency for the ordinance, Patel suggested the governor might take a final decision, on which the fate of the government plan for a 1,500-km long gas grid across the state hinges, on Wednesday.

"The governor asked us for details of the progress made in implementing the gas grid project as also the future time table. We would be providing that on Wednesday. Thereafter, he would decide on the crucial matter," Patel said.

Costing Rs 2,500 crore, with different liquid natural gas (LNG) suppliers - Shell, Petronet, British Gas - setting up coastal terminals by sharing the costs with the public sector Gujarat State Petroleum Corporation (GSPC), the project would take five years to complete.

The governor had postponed signing the Gas Ordinance for a month as he felt it involved a policy issue that should be discussed in the Assembly.

As for the issue of urgency, Patel said, "The enactment of the Gas (regulation, transmission, supply and distribution) Bill, 2000, was introduced on October 3 this year in the last Assembly session but could not be taken up for want of time. The Bill has already been approved by the Gujarat Infrastructure Development Board (GIDB) and the state Cabinet. We, therefore, want it to be operationalised at the earliest, without waiting for the Assembly session". Official sources added that if the governor did not put his stamp of approval, the Bill was slated for the coming session.

The draft Bill's "statement of objects and reasons", as tabled on October 3, said the Act would "ensure systematic and integrated development of gas industry in the state" and for that it would "set up a gas regulatory authority" that would regulate transmission, supply and distribution of gas. The authority would also "look after the environmental and efficiency aspects of developing the gas industry in the state" and help encourage investment in the gas distribution sector by being the licensing authority.

Official sources said the Act was not sent for getting the signature of the governor, soon after the Assembly session in early October, because "certain changes to refine some clauses were introduced". A senior bureaucrat said, "Different angles always needed to be refined", adding, "It is wrong to say that the Gas Act would contradict the Central regulations. The two are totally different things. The Central regulations deal with controlling production while our Act deals with transmission and distribution on the state's territory".

Already, a GSPC subsidiary Gujarat State Petronet Ltd (GSPL), the nodal agency for developing gas grid in the state, has commenced construction of three gas pipeline grids in south Gujarat for a total length of 98 km. The network would integrate the existing 70-km pipeline, owned and operated by the Gujarat Gas Company, thus operationalising a 183-km grid from the Hazira fields of the GSPC.

Official sources claimed the GSPL was at a "fairly advanced stage in acquisition of right of way on all important sections" in south and north Gujarat for putting up the grid.

All-weather engine oil from MSU dept Thursday, December 14, 2000

VADODARA: Watching television, an advertisement may have grabbed your attention which shows a sleek car cruising down a four-lane road upside down.

It's the advertisers way to display the hazards of using a poor quality lubricant (engine oil) which does not protect the insides of a car as it should in extreme temperatures, unless of course if you can drive the car upside down for some minutes after turning the ignition key for the first time in the day.

Perhaps this was the consideration which convinced the faculty of chemistry department of M S University to undertake a project which would improve the viscosity of such lubricants.

Recently when the faculty members of the department ran a series of tests on specially treated lubricant samples at the laboratory of the Indian Oil Corporation (IOC), Faridabad some samples showed "better performance" than those which are oft used in vehicles. The project report has now been submitted to the department of science and technology for "suitable action."

"Viscosity of the lubricants used to protect the parts of different engines (which acts as a protective sheen on engine parts) is affected due to extreme changes in the temperature. The lubricant thickens in cold climate and thins when temperature increases. This often damages parts of the vehicle's engine which later lead to chronic problems in the functioning of the vehicle," explains a researcher at the chemistry department.

The department recently took it upon itself to develop an additive which when mixed with any lubricant will ensure that it maintains the viscosity even if there is a variation in the ambient temperature of the area.

Faculty members who had been at work to develop a better additive for the last couple of years made a significant breakthrough recently. "We had been working on developing viscosity index improvers - polyalkalyle acrylates. But, some time back when we chose to take the additive through a process of solution polymerisation the results were very encouraging," said Professor Surekha Devi.

By developing a unique micro-immulsion medium for polymerisation to prepare this additive the researchers managed to bring a significant change in its polymer structure.

This done when the additive was mixed with a lubricant and tested for viscosity in extreme temperatures the changes in its characteristics had been minimised.

"By engineering the structure of polymers the additive was made more suitable to minimise the viscosity variation caused by temperature difference. Where as many lubricants that are now in use develop viscosity-resistance once mixed with other additives. We were successful in minimising the thickening and thinning of the lubricants in cold or hot climates," said a research student of the chemistry department of MSU.

While the project paper which was circulated at different educational institutes in and outside the state has drawn many queries from different parts of the country. "It is heartening to see that people are interested to know more about our findings which could bring significant changes in the health and long life of our vehicles," said Prof Devi.

But, now it depends on the Department of Science and Technology, Government of India, as to how soon MSU's project on Viscosity Index Improvers saves the two, three and four wheelers plying through extreme temperature variations and conditions on Indian roads from further damage

Implement market-driven labour policy, govt warned Thursday, December 14, 2000

GANDHINAGAR: The state government has been warned of a sharp rise in joblessness in agriculture, manufacturing and services sectors over the next several years, if a market-driven labour policy is not implemented effectively.

A top policy document states that the gap between the available manpower in these sectors and employment has gone up from 24 lakh workers in 1991 to 29 lakh workers in 2000. With the projected work force going up from 206 lakh in 2000 to 264 lakh in 2010 and corresponding employment from 177 lakh to 229 lakh respectively, the gap will reach an all-time high of 35 lakh workers in a decade.

The gap between the total work force and the number of jobs will show no signs of decline but continue to "hover around 13.5 per cent" in the decade unless "economic policies ensure high growth rates by way of labour reforms and skilled work force."

The document, "Vision 2010: Social Sector", to be released on December 25 to mark Prime Minister A B Vajpayee's birth anniversary, says, "With decreasing market share and profits and almost stagnant productivity levels, major industries like textiles, chemicals, cement and engineering make "many jobs redundant" thus cutting short increase in number of jobs.

The document believes that to reverse the trend, a two-pronged strategy would be required. First of all, labour laws ostensibly prepared to "protect workers from exploitation of employers", would have to change. The laws have "failed to change along with times and have become an impediment for employers and employees alike."

The current restrictions on employers forcing them to extreme inefficiency and high wages under threats of strikes discourage "further investment in labour intensive sectors."

Also, though IT and electronics require better labour participation from women, the laws do not allow women to work at odd hours. "This is denying a lot of opportunities for qualified women", the document says, recommending elimination of discrimination against female workers as one of the objectives of labour reforms. Others recommendations are - firms be given right to retrench, all workers be governed by uniform rights irrespective of the size of firms, outsourcing be legalised, contract workers be recognised, and proper enforcement mechanism be instituted.

The second important requirement would be to go in for an effective state intervention, costing the exchequer a whopping Rs 5,150 crore, mainly to develop skills for the expected sharp rise in the need for talented manpower in agriculture, manufacturing and services. The intervention, it is expected, would increase the employment opportunities rising at present at two per cent per annum to 2.5 per cent in agriculture and from 3.14 to 3.5 per cent in manufacturing. The services sector would experience the sharpest growth, from 3.57 to seven per cent.

The document says, "With intervention, the sectoral component of employment will also change. Without intervention, the agricultural sector which provides employment to 56 per cent of the workforce would provide employment to 53 per cent in 2010, whereas with intervention, the percentage would be down to 49 in a decade." While the corresponding share of manufacturing would remain stagnant, that of the services sector would go up from the present 25 per cent to 32 per cent in 2010.

The document, however, is quiet on as to wherefrom the whopping Rs 5,150 crore -- immediately needed for fresh, multi-skill and home-based training, for setting up information structures on labour, and for taking social safety measures for the jobless - come. While a recent presentation to Chief Minister Keshubhai Patel talked of "enhanced budget allocations, increase in self-financing institutes, levy of user fees, resource generation by ITIs and industry participation in training", there is no policy on how to go about all this.

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