Banking system needs reorientation
NEW DELHI, Aug 1 — The Associated Chambers of Commerce and Industry of India (Assocham) President has called for dilution of government stake in public sector banks to 26 per cent.

Khadi exhibition opens
CHANDIGARH, Aug 1 — An exhibition of khadi items and gramudyog products organised by the Khadi and Village Industries Commission and the Punjab Khadi Gram Udyog Institutions Federation opened here today.

Thapar Agro directed to refund FD amount
NEW DELHI, Aug 1 — A city consumer forum has directed the Ludhiana based Thapar Agro Mills Limited to refund a fixed deposit of Rs 30,000 with 15 per cent interest from the date of deposit to a couple here.

Bhilwara group to set up power plant
NEW DELHI, Aug 1 — In a major private sector initiative in the power generation, the Bhilwara Group is going to build a 86 MW hydro-electric power plant in Kulu district of Himachal Pradesh.

INSCOL starts functioning
CHANDIGARH, Aug 1 — INSCOL — International Institute of Neuro-sciences and Oncology, a 50-bedded tertiary care hospital was commissioned today in Sector-34, Chandigarh, to provide comprehensive, advanced, specialised neuro sciences and cancer management facilities.

J.B. Chem gets patent in USA
MUMBAI, Aug 1 — J.B. Chemicals and Pharmaceuticals Limited has been granted product patent in United States of America by the US Department of Commerce Patent and Trade Marks office for the controlled release formulations of “Ranitidine”.

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Banking system needs reorientation
Tribune News Service

NEW DELHI, Aug 1 — The Associated Chambers of Commerce and Industry of India (Assocham) President Mr L Lakshman has called for dilution of government stake in public sector banks to 26 per cent.

Banks should also be given permission to form joint ventures with overseas banks and there should be specialised developmental financing for infrastructure projects, Mr Lakshman said.

While welcoming the Narasimham Committee’s recommendations on autonomy to banks for improving the quality of management of public sector banks Mr Lakshman said that even if the government holding is reduced to 33 per cent of the share capital, the bureaucratic grip on banks would continue.

The Assocham Chief has suggested that government holding be restricted to 26 per cent for next five to seven years and thereafter go in for total disinvestment. Even during the interim period, the government should have no more than a couple of its nominees on bank boards, he added.

“Even a freed up public sector bank in India benchmarked against a bank in the USA or Germany in terms of customer satisfaction will finish poor second “, he said.Mr Lakshman also underlined the need to focus strongly on changing mindset of people at the grass root level, thereby imparting a client-specific orientation to banking services.

Another option is to bring about policy changes to permit conversion of some of the banks into joint ventures with overseas banks. This would help foreign partners to bring in the state-of-the-art practices to improve customer satisfaction, he added.

Thapar Agro directed to refund FD amount
Tribune News Service

NEW DELHI, Aug 1 — A city consumer forum has directed the Ludhiana based Thapar Agro Mills Limited to refund a fixed deposit of Rs 30,000 with 15 per cent interest from the date of deposit to a couple here.

The aggrieved depositors had sought the forum’s directions to the company to refund the said amount with 18 per cent interest from the date of maturity of the FDR. The plaintiffs also sought compensation for pain and suffering and litigation cost.

In their complaint to the Consumer Disputes Redressal Forum, Mr V P Bhambhri and his wife, Chander Lekha Bhambhri stated that they made a fixed deposit of Rs 30,000 with Thapar Agro Mills on May 29, 1995.

The depositors complained that despite several assurances, the respondent company did not pay them the due amount.The plaintiffs alleged that a cheque issued to them on maturity of the FDR was dishonoured due to ‘insufficient funds’ on December 7, 1995.

They were directed to present the cheque in May, 1996. Once again, the cheque was dishonoured on May 14, 1996 on the ground that the respondent company had closed its account.

A Bench presided by Mr S.P. Saberwal and members, G.R. Gupta and Santosh Khanna held, “Though the respondents had referred to their financial problem, the complainants had really to undergo financial loss and mental agony and harassment due to non-receipt of their hard-earned money which they put in FDR with the respondent company to earn a little interest on it.”

Khadi exhibition opens
Tribune News Service

CHANDIGARH, Aug 1 — A mega exhibition of various khadi items and other gramudyog products organised by the Khadi and Village Industries Commission and the Punjab Khadi Gram Udyog Institutions Federation opened at Panchayat Bhavan here today.

The Punjab Industries Minister, Mr Sucha Singh Langah, while inaugurating the exhibition said he envisioned a khadi unit in every village of the state. This, he added, would contribute tremendously towards generating employment.The range of products on display at the exhibition is pretty huge.

Readymade suits with embroidered necks and sleeves priced between Rs 500-700 are an attractive bargain. Printed silk saris in a variety of colours and motifs are priced between Rs 800 and Rs 1700. For those with a heavy wallet, spun silk at Rs 234 per metre in magnificent magenta, pristine white and cool sea green besides beiges and browns is on offer.

The exhibition also offers bed sheets with vibrant Phulkari designs in all colours of the sky and the rainbow. Divan sheets at Rs 450 are an expensive proposition. Those with patch work are even more costlier at Rs 750. Printed ones are priced between Rs 300 and Rs 500 but there is nothing attractive about them as far as aesthetic appeal is concerned.

For those with a penchant for things herbal, there is herbal mehndi, herbal shampoo, soap and medicines for common ailments.There are ties, cravats, shirts and kurtas in cotton and silk for the men.But the highlight of the exhibition is furniture with lacquer and jute work.

Corner tables with glass tops, sofa chairs and peerhas in various sizes have come all the way from Hoshiarpur. Tirath Singh, who has won several awards from the Punjab Government and Germany, is there in person to exhibit his craft.The exhibition will remain open till August 9.

Organised with the intention to celebrate the golden jubilee of India’s Independence, there is a rebate of 20 per cent on khadi items.

Bhilwara group to set up power plant
Tribune News Service

NEW DELHI, Aug 1 — In a major private sector initiative in the power generation, the Bhilwara Group is going to build a 86 MW hydro-electric power plant in Kulu district of Himachal Pradesh.

Rajasthan Spinning and Weaving Mills Ltd.(RSWM), the flagship company of the Rs 1370 crore LNJ Bhilwara Group, has obtained the Central Electricity Authority’s (CEA) approval for this project.

Estimated to cost Rs 342 crore, the plant is expected to commissioned within a span of four years.The project is going to be implemented by Malan Power Company , a 100 per cent subsidiary of RSWM.

The project is significant considering that for the first time transmission of power will take place across states in the country.The 86 MW plant would be producing power throughout the year and the power generated at Malana would be wheeled through Himachal Pradesh Electricity Board (HPSEB), Power Grid Corporation of India Ltd.(PGCIL) and Rajasthan State Electricity Board (RSEB) for banking and distribution at working voltage to the group mills in Rajasthan.

The company will pay 15 per cent of the power generated as royalty to HPSEB for the first 12 years and 20 per cent beyond that. The concept is likely to serve as model to help exploit the large untapped potential of about 18,000 MW of hydro-power in Himachal Pradesh.

The project is to be financed in the debt-equity ration of 70:30 . The Group Chairman , Mr Ravi Jhunjhunwala said that financial institutions like Power Finance Corporation, IFCI and other leading banks have shown keen interest and financial closure is likely to be achieved by mid-September.

INSCOL starts functioning
Tribune News Service

CHANDIGARH, Aug 1 — INSCOL — International Institute of Neuro-sciences and Oncology, a 50-bedded tertiary care hospital was commissioned today in Sector-34, Chandigarh, to provide comprehensive, advanced, specialised neuro sciences and cancer management facilities.

Neuro facilities would include: neurology, neurosurgery, a neuro-physiology lab, neuro intensive care, neuro diagnostics, psychiatry and clinical psychology. Oncology services would include surgical, medical and radiotherapy consultancy.

Besides these specialised services, it also provides an excellent infrastructure and facilities for visiting consultants to perform advanced and sophisticated surgeries to manage critical patients.

The hospital will also provide in-patient services in three different categories — deluxe, semi-deluxe and a general ward — with food served in-house at cost basis, under the supervision of a dietician.

J.B. Chem gets patent in USA

MUMBAI, Aug 1 (PTI) — J.B. Chemicals and Pharmaceuticals Limited has been granted product patent in United States of America (USA) by the US Department of Commerce Patent and Trade Marks office for the controlled release formulations of “Ranitidine”.

The company was also granted patents for the controlled release formulations in respect of “Ranitidine” and “Nifedipine” drugs in South Africa, a company release said.J.B. Chemicals has fared well during the first quarter of the year 1998-99 with its net profit rising by 28 per cent to Rs 509.84 lakh as compared with Rs 397.36 lakh for the corresponding period in 1997-98, the release said.

Total income of the company increased by 8 per cent to Rs 4130.02 lakh as against Rs 3751.35 lakh while gross profit stood at Rs 640.64 lakh as compared to Rs 498.36 lakh in the corresponding period last year.

by Ashok Kumar
‘FIIs net investments turn positive’

ARE the FIIs really the smart investors they are made out to be? A recent report put out by Sebi indicates that the net investments by Foreign Institutional Investors (FIIs) turned positive during the week ended July 17 after being continuously negative since April 1998.

Apparently, the FIIs invested $22.3 million in equities in excess of their gross equity sales during the above mentioned week. Around the same time, our much maligned domestic institutional investors led by UTI began booking profits at the counters they had been buyers a few months ago when the BSE sensex had plumetted below the 3000 points mark. And what happened thereafter?

The BSE sensex has again plumetted, and once again the FIIs are the ones caught on the wrong foot. They seem to be learning the hard way, that is at the cost of their subscribers, that the dynamics of the Indian market are a lot different from what they are used to in the West, and the other Asian markets where they rule the roost.

Those who still swear by the FIIs would do well do make a comparative study of the recent performances of UTI and the much touted Morgan Stanley Mutual Fund.Revitalised by its recent pickings at the bourses and unfazed by criticism against assured returns schemes and recent symptoms of under-performance in such schemes, the Unit Trust of India (UTI) is all set to guarantee returns on the UTI Millennium Fund, and this time around in foreign exchange.

UTI has submitted a proposal to the Government of India that the UTI Millennium Fund would not only assure returns at the same rates as fixed by the State Bank of India (SBI) for its Resurgent Bonds, but also absorb the foreign exchange risk on the scheme. UTI’s earlier plans of promoting the scheme as an open-ended fund have been changed to structure the fund as a five-year close ended fund, which will guarantee returns and offer a repurchase facility after three years.

The assurances given by UTI on its schemes are guaranteed by the corpus of the Development Reserve Fund (DRF), which now stands at over Rs 500 crore. UTI hopes to raise $600-800 million through the Millennium Fund. The scheme would be a balanced fund with 60-70 per cent exposure to equity shares of Indian companies.

The units of the Millenium Fund would be sold in denominations of US dollars, pound sterling and deutsche marks. The rates proposed to be offered would either be 7.75 per cent, 8 per cent and 6.25 per cent respectively, or a flat rate of 50-75 basis points over the London Inter-Bank Offered Rate (LIBOR).The most ‘happening’ event at the capital market today is the SBI Resurgent Bond.

Given the feedback received thus far, it has been well received by the NRIs for whom the rates on offer are fairly attractive. The funds mopped up by these bonds are bound to find their way into the domestic market, which in turn should go a long way towards easing the liquidity position leading up to exertion of downward pressure on interest rates.

Furthermore, the success of this issue will establish India’s economic credibility in no uncertain terms an nullify the impact of Moody’s debatable downgrade of India’s investment worthiness. It is also interesting to compare the positive response of the Indian expatriates to the cynical one that their Pakistani counterparts made in response to a fervent plea for help by their Government. Slowly but surely, India is beginning to discover its own inherent economic strength, and some of the so called ASEAN tigers have been exposed for what they really are.

A rather unfortunate development at the bourses is the fall from grace of several Tata group companies, most notably, Tisco and Telco. The share prices of both these scrips have taken a severe beating and while the former seems down and out, at least for now, the latter could bounce back, sooner rather than later.

Although the writing seemingly appears to be on the wall for the Tata group, one would like to think that at least some of the late JRD Tata’s sterling entrepreneurial skills would have rubbed off on his successors, and that the group would rise again like the proverbial phoenix from the ashes.

Incentive bonus
by Praful. R. Desai

Q: Whether the definition of ‘wages’ would include incentives bonus or allowance?
Ans: In Regl. Dir., ESIC v Enfield India Ltd this question was answered by the SC (1998-I-LLJ-1070) as under:The appellant ESI Corporation challenged the judgement of Madras H.C. which were allowed by the Division Bench upon the view that the respondent company was not liable to remit contributions so far as the incentive bonus paid to the employees were concerned as according to the HC, it did not form part of the wages.
The SC in appeal pointed out that in Harihar Polyfibers v Res Dir ESIC. (1984-II-LLJ-475) a Division Bench of this court held “wages” as defined by S.2(22) of the Employees’ State Insurance Act, 1948, would include among others, incentive allowances paid to the workman.
There is also a later decision of this court in the case of Modella Wollens Ltd v ESIC (1994-Suppl (3) Sec 580) which had ruled that production bonus is also covered by the term ‘wages’.
In view of this settled legal position, therefore, these appeals are allowed. The impugned judgement and order of the HC are set aside and the writ petitions filed by the respondents before the HC are dismissed.
The SC held that in view of the present decision of this court, whatever recovery has to be effected by the appellant corporation regarding employers and employees’ contributions concerning the disputed incentive bonus will have to be effected keeping in view the relevant Rules and Regulations governing the computation of such contributions for the relevant periods for which such contributions are demanded.

Cadbury
CADBURY India Ltd is a dominant player in the chocolate and malt food segment. The company has several reputed brands such as Dairy Milk, Eclairs, Perk etc. due to which it dominates the chocolate segment with a market share of 70 per cent. In the chocolate based drinks its brand Bournvita enjoys over 50 per cent market share. Cadbury is one of the leading advertisers and its brands enjoy tremendous visibility and recognition. The company’ latest launch of Picnic in the chocolate segment has been well accepted and the company’s entry into the sugar confectionary segment with a national launch of Googly has a larger market than the market for chocolates. This is mainly due to the parent company’s strong position in this field. On the whole, the future prospects of the company appear to be fairly secure. Little wonder then that the domestic institutions are queueing up to pick up this scrip.

TVS Suzuki
THE recently declared Q1 (first quarter) results of TVS Suzuki has exceeded market expectations, and has now fuelled a debate over the advisability of partially switching over from Hero Honda and Bajaj Auto to this company. A foreign fund manager is reportedly receptive to this idea and has issued instructions to conduct the switchover. What’s more, since this scrip too is now in the ‘No Delivery’ trading zone, operators too are queuing up anticipating a sharp upswing in its price on account of fresh institutional buying.

Carrier Aircon
CARRIER Aircon is one of country’s leading manufacturers of window, room and split air-conditioners. The company has emerged as a leader in the room AC segment with a dominant 30 per cent market share. Now it is making its presence — felt in the high-margin central AC business. The company has launched new models in the room AC segment and is also widening its dealer networks and its chain of Carrier Comfort showrooms. The company plans to increase its capacity for room ACs and also it’s compressor manufacturing capacity. CAL is the only domestic AC player which also produces compressors. CAL’s range of products and increasing presence in the central AC business will help it to consolidate its total market share. A veteran BSE broker has begun accumulating this scrip. Watch this counter.

Federal Bank
WITH this fundamentally solid banking sector company now in the ‘No Delivery’ trading zone, a BSE bull operator and his cartel are slowly but steadily accumulating its shares. The market grapevine has it that sources close to the cartel have been told to expect a three figure price for this scrip shortly. Considering that this cartel did pretty much the same thing during the ‘No Delivery’ period of Bank of Baroda, even the sceptics are all ears this time around.

by R.N. Lakhotia

Q: Please let me know what is Wealth Tax. How much wealth (cash) a government servant can keep.2. About six years back I bought NSCs worth Rs 15,000. I got the maturity amount worth Rs 30,000 in January 98. Now please tell me how much amount should be filled under the head ‘Add. Income, if any’ in my income-tax statement for the financial year 1997-98.—-Sita Ram, Talwara.
Ans: Whether it is government servant or any other person, a person can keep as much wealth as he likes with him but only the source of said wealth should be proved. There is no wealth tax upto Rs 15 lakh of taxable wealth. As regards the amount received on maturity in respect of NSC the portion comprising of interest in the said refund amount will be liable to tax as interest income. If, however, in all the earlier years, the interest income from NSC was included on deemed basis, then the question of taxing the entire amount will not arise but if no amount has been shown in the preceding years on account of expected interest income then Rs 15,000 in your case will be treated as income from NSC. However, out of this amount, the sum of Rs 12,000 will be deducted u/s 80L together with your other income like bank interest, etc.

Q: Please advise me about premature closer of ULIP Scheme. Whether any deduction will be made? I opened ULIP account in October 1996 and have shown it in 1996-97 return.
2. Whether house wife who is not income-tax payee can open PPF A/C?—-Ramesh Kumar, Rewari
Ans: In respect of pre-mature closure of ULIP Scheme in Income-Tax, no action is to be taken. For further details meet the office of Unit Trust of India. A house wife who may not be Income-Tax assessee can open a PPF A/c in her name.

Q: I applied for MIG super flats in September 95. I was allotted a flat in September 96. I deposited Rs 63000 as 10 per cent of the cost of the plot. This month I have been allotted and now I shall deposit Rs 94,500 as 15 per cent of the cost of the plot to get possession of the plot. Can I get any rebate in Income-Tax. I have never claimed any rebate in income-tax return. Kindly explain me in details.
2. Is there any limit of saving for which we can claim rebate under Section 88. Kindly let me know upto what percentage of pay we can save money to get rebate.—-Dr J. Singh, Mohali
Ans: In respect of payment made by you on account of instalment or part payment of the amount due under any self-financing scheme you will be eligible for tax rebate upto Rs 10,000 per year and the tax rebate is 20 per cent thereof. The total amount on which tax rebate can be claimed u/s 88 is Rs 70,000. There is no demarcated percentage of the total saving which can be invested by a person out of his income for tax rebate purposes. However, a person will have to justify the savings with reference to his household expenditure.

Q: Kindly advise — the maximum limit of amount that can be deposited in an year in PPF and whether the interest would be paid on the total amount deposited (above Rs 60,000 PA). Of course, it is understood that rebate for income tax purpose would only be to a maximum of Rs 60,000 including LIC, PF, PPF, etc.—-Harish Khanna, Panchkula
Ans: The maximum amount which you can deposit in one year in PPF A/c is Rs 60,000. As any amount in excess of Rs 60,000 cannot be deposited in the PPF A/c. The question of granting any interest on deposit in excess of Rs 60,000 does not arise. For the purpose of rebate u/s 88 the limit is Rs 60,000 is applicable inclusive of investments in LIC, PPF, NSC etc.

Q: How many gifts one can accept during the financial year. Whose liability will be to pay Gift Tax if one gifts from different relations/persons.—-Simrat Dhillon, Bathmela
Ans: A person may receive as many gifts as possible in one year from this friends and relatives. There is no upper limit of receiving gifts in one financial year from one or more than one person.

Biz briefs

Gold falls
NEW DELHI, Aug 1 (PTI) — A downward journey in both precious metals, silver and gold, continued on the bullion market today following a persistent fall in demand influenced by weak global advices to close lower. The quotations: Silver .999 (ready) 8240 delivery 8200, coins buyer 10,500 and selling 10,700. Standard gold 4250, ornaments 4100 and sovereign 3500.

Allahabad Bank
CHANDIGARH, Aug 1 (TNS)— Allahabad Bank today computerised its one more branch and an extension counter at Amritsar. Mr K.L Arora, DGM, New Delhi, inaugurated its 9th computerised branch at Patel Chowk and one of its extension counter at DAV School. Mr Arora said that bank is planning to computerise its all branches at important commercial centres of Punjab and Haryana.

Dairy Expo-98
CHANDIGARH, Aug 1 (TNS) — The Punjab Chief Minister, Mr Parkash Singh Badal has agreed to support the forthcoming “Dairy Expo-98” — International Conference-cum-Exposition of Dairy Technology and Management. The Expo forms a part of Agro-Tech ‘98 to he held in Chandigarh from December 2 to 6. This was announced after a meeting with Mr Uzi Wellish, Counsellor — Agricultural Affairs, Embassy of Israel; Dr Ajay Jha, Advisor Agricultural Affairs, Embassy of Israel and Mr Piyush Bahl, Regional Director, CII (Northern Region) at the Chief Minister’s residence today.