Friday, December 25, 1998
today's calendar
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B U S I N E S S | Friday, December 25, 1998 |
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spotlight today's calendar |
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Patent Bill safeguards
interests: Bakht ‘Exempt
buyback from deemed dividend’ |
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Concern over low advance
recovery Bad
times for new hotels in city |
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Economics
to be focus of foreign policy Change
in Commodities Act opposed Kar
vivad gets poor response FIPB
approves British Gas proposal Mercedes
not to launch A-class DSE
to have jobbers |
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Patent Bill safeguards interests: Bakht NEW DELHI, Dec 24 (PTI) — The patent amendment Bill has adequate safeguard to protect India’s interests and it would also help restructure the pharmaceutical sector, Industry Minister Sikander Bakht said today. “The bill (for patents amendment) has extraordinary safeguards to protect the country’s interest,” he said on the sidelines of the PHDCCI annual general meeting here. He also denied that amendment to the Patents Act 1970, would lead to a sharp rise in prices of essential drugs. (“It is wrong to infer that prices of some of the essential drugs would rise if the Bill was passed),” he said. The Bill to amend the Patents Act was adopted by the Rajya Sabha on Tuesday night but it could not be introduced in the Lok Sabha yesterday due to paucity of time. Parliamentary Affairs Minister Madan Lal Khurana said the government could not provide a copy of the amended Bill passed by the Rajya Sabha in time to Lok Sabha members. While passing the amendment Bill, the government also introduced a fresh amendment not to provide exclusive marketing rights (EMRs) or patent to Indian system of medicine in deference to a demand made by the Congress, whose support was key to the passage of the legislation in the Upper House. The bill proposed to provide EMRs to international pharmaceutical and agro-chemical firms so as to meet the WTO April 19, 1999 deadline to India to update its patent legislation. Mr Bakht said the amended Act would help restructure the pharmaceutical industry in the country. Earlier addressing a PHDCCI luncheon meeting, the minister said government was examining the recommendations of the S.L. Kapur committee to simplify procedures to ensure small scale industries got timely credit. Of the 126 recommendations made by the committee, the RBI had accepted 35 and asked banks to implement them. Some of the major recommendations were raising the limit of composite loans to Rs 5 lakh from Rs 2 lakh, delegation of more power to branch managers and strengthening recovery mechanism. Stating that SSIs should face challenges in the wake of economic liberalisation, he said the foremost among them was technology upgradation. A model scheme had been
formulated by the ministry to enhance SSIs technological
capabilities and it was flexible enough to allow for all
modifications required for cluster specific needs. |
Concern over
low advance recovery CHANDIGARH, Dec 24 — A meeting of banks in Haryana was convened by Punjab National Bank here today. The meeting was presided over by Mr VK Agarwal, General Manager, Punjab National Bank, Head Office, New Delhi. The chief guest of the meeting was Mrs Sudha Sharma, Commissioner and Secretary, Institutional Finance and Credit Control, Haryana. Mr Agarwal said the development of the SSI sector in Haryana had been steady from 4500 units in 1966 to more than 66500 units in 1998. Mr Agarwal informed that 36 new branches of commercial banks, regional rural banks were opened from September 97 to September 98 raising the number of branches from 1413 to 1449 in the state. The total deposits of banks in the state increased from Rs 11275 crore to Rs 13190 crore during the period. The total advances of banks also increased from Rs 4425 crore to Rs 5275 crore during the review period, thereby showing an increase of Rs 19.2 per cent as against the growth rate of 8.7 per cent last year. The growth in advances has been higher than the system growth at national level, which is 17 per cent. The recommendations of RV Gupta committee on agriculture sector and the recommendations of the SL Kapoor committee on flow of credit to the SSI sector should to be implemented by the banks, he said. Mr Agarwal was, however, concerned over the position of low recovery of advances, particularly in respect of cases filed under the State Recovery Act. During the quarter ended September, 98, only 721 cases amounting to Rs 1.37 crore were disposed of, whereas 973 fresh cases amounting to Rs 1.90 crore were filed during the quarter. He requested the state government to consider amendments in recovery act. Mrs Sudha Sharma, requested the convener bank to examine whether the monitoring of cases under margin money scheme of KVIC could be started at district-level. Mrs Sudha Sharma, urged
government agencies and bankers to strengthen their
recovery drive as it would help in better recycling of
funds. About eviction notices being issued by the Haryana
Urban Development Authority to commercial banks operating
in residential areas, she said that they were prepared to
help bankers if it do not go against the decision of the
Supreme Court. |
Bad times
for new hotels in city CHANDIGARH, Dec 24 — Hotels and restaurants in Chandigarh particularly the new and upcoming units are facing crisis and are virtually on the verge of closure due to high cost, lower room occupancy, obsolete (1954) bye-laws and changing urban and hospitality dynamics with particular reference to hospitality industry, Mr Man Mohan Kohli, President, Hotel and Restaurant Association of Chandigarh (HRAC) said. Mr Kohli revealed that the average room occupancy in city hotels is 62 to 69 per cent. The assessment has been drawn besides its own study from tourism and other agencies. The rooms in the city hotels remained unoccupied even at the time of CII’s mega show recently (Agro. Tech ‘98). The total number of rooms in the city, inclusive of those nearing completion are 1500. The investment cost in this industry is very high and it is the largest single investment category in the city. The city is having mushroom growth of guest houses which require less investment than in organised sector. The association is of the view that any regularisation of the guest houses shall amount to ill-legality and contravention of Chandigarh legislation. The hotels are governed and administered by various agencies such as fire, explosives, excise and pollution control etc and at times, many of them contradict each other in implementation of rules. The association demands a single window system for dealing with hotels and there should be viable and implementable bye-laws. Due to the present bye-laws almost the entire hotel industry is under resumption by the government. HRAC also feels that the bye laws should be applicable alike to non-government and government agencies of similar nature, adds Mr Kohli. The association has
requested the administration for regularising by
compounding the minor violations on the owners’ plot
area. The government has appointed a committee on
provision of amenities in hotel buildings which is only
looking into very limited number of aspects.
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‘Exempt buyback from deemed dividend’ NEW DELHI, Dec 24 (UNI) — Assocham has called for exemption of buyback of shares from the provision of deemed dividend so as to allow corporates unhindered use of the facility whose objective is to improve the competitiveness of the domestic industry. In a note to the Finance Ministry, Assocham President K.P. Singh said that the futuristic provision under the Section 77A of the Companies Act inserted by the companies (amendment) ordinance allowing companies to buy back their own shares has been included with the avowed aim of facilitating the integration of Indian industry with global industry. However, there are apprehensions that the Section of the Act will attract the provisions of Section 2(22) (D) of the Income Tax Act 1961. This section states that any amount paid by a company to its shareholders for reducing its capital to the extent of accumulated profits would be treated as deemed dividend. The object of the newly promulgated Section 77A of the Companies Act, 1956, is to enhance the shareholders value through restructuring of the share capital and to combat hostile takeover. Assocham, therefore, has sought insertion of a provision under Section 2(22) (D) of the Income Tax Act, 1961, so that buyback of shares would be exempted from the provision of deemed dividend. Presently, the interest paid by the assessee under the various sections like 234A, 234B, and 234C of the Act are not allowed as a deductible expenditure. But, at the same time, the interest received by the assessee from the Income Tax Department of fully taxed. This needs to be amended insofar as even interest paid by the assessee should be allowed as a deduction in computing the taxable profits. If required, a small portion of the interest may be treated as a penal portion and the balance may be treated as of a compensatory nature. The compensatory interest may be allowed as a deduction in the computation of taxable profits. The note states that presently, Section 272A of the Income Tax Act prescribes penalty of Rs 100 to 200 per day in respect of certain procedural lapses like late filing of TDS forms and certain TDS returns, where no loss of revenue to the exchequer is involved. These lapses do not result in any loss of revenue to the government since the taxes are paid in time. It is suggested that a token penalty be prescribed for such defaults and what is in existence today. In case of default in payment of taxes, a compensatory interest may be levied along with penalty of a token sum. Incomes which are totally exempt from tax under the Section 10 of the Income Tax Act, 1961 (chapter iii of the Act) as well as profits eligible for deduction under Section 80 HHC or 80hhe of the Income Tax Act are excluded from the book profit as computed under Section 115ja of the Act. This is on the presumption that they are totally exempt from tax in the computation of the taxable income under the regular provisions of the Act. But such a treatment is
not available in respect of capital gains which are
exempt from tax under Sections 54B, 54D, 54ea and 54eb as
such they are included for the purpose of computation of
book profits under Section 115ja of the Act. This needs
to be remedied by a suitable amendment. |
Kar vivad
gets poor response PATIALA, Dec 24 — The kar vivad samadhan scheme has not met with much success here though only one week has been left for the closing of this scheme. While in this range an amount of Rs 40 crore stands against tax payers as arrears, declarations worth Rs 2 crore by 59 erring persons have been made so far. A seminar was organised here today to educate tax payers about the scheme. Mr J.L. Negi,
Commissioner, Income Tax, local range, said many tax
payers did not came forward as they had doubts about the
scheme. But clarifications and awareness programme
launched by department helped in re moving many
apprehensions. He was optimistic that in the closing week
of the scheme many more declarants would come out. |
Economics to
be focus of foreign policy NEW DELHI, Dec 24 — The External Affairs Minister, Mr Jaswant Singh, today said a national consensus seemed to be emerging on the issue of signing the comprehensive test ban treaty (CTBT) before the September, 1999, deadline and hoped that India would be able to successfully conclude its ongoing dialogue with the USA on its security concerns. Outlining the contours of India’s foreign policy in the new year, Mr Jaswant Singh said emphasis on economic cooperation with other countries, good relations with neighbours and measures to contain energy security threats will be the key areas of the policy. Addressing his first press conference after taking over as the External Affairs Minister, Mr Jaswant Singh answered a whole array of questions covering various aspects of the country’s foreign policy, including its status after the Pokhran nuclear tests. He said the Pokhran nuclear tests was a “fact” and of whether the other countries acknowledged India as a member of the nuclear club or not was irrelevant. He said there was no question of rolling back India’s nuclear programme and added the decision on voluntary moratorium on further tests was not taken under pressure from any country. The decision was based on the scientific community’s full satisfaction that the data generated by the tests were sufficient to carry forward further developments in the area with a view to maintaining a credible nuclear deterrent in the future. Reiterating a continuity in India’s foreign policy, Mr Singh said non-alignment gives the freedom to articulate and autonomous pursuit of foreign policy. He said the country’s policy would be to cooperate with the SAARC countries for economic development. Next year India would purposely engage in dialogue and bilateral talks to build trust and confidence with its neighbours and other countries. He pointed out that the region of the Gulf, Central Asia, the South East Asia and parts of concentric circles of India’s neighbourhood faced challenges of a different kind. There were non-military threats like economic and energy security threats. Elaborating on energy security threats, he said having sufficient energy was as good as preserving one’s security as shortfall in energy compromises security. He said the proposed power purchase agreement with Pakistan was one such step in this area and added India would like to have such agreements with other countries too. He said the Prime Minister, Mr Atal Behari Vajpayee’s visit to Jamaica in February next year for the G-15 meeting would a boost energy cooperation programmes. On the Russian Prime Minister, Mr Yevgeny Primakov’s suggestion for the formation of a strategic triangle between India, Russia and China, Mr Singh said the idea has been mooted by Russia from time to time. He dismissed the western perception that India was spending billions of dollars on its nuclear programme and said India’s nuclear programme has been an ongoing one. Since 1948, India has been having an atomic energy programme and its expenditure was budgeted and transparent. On the US-led attack on Iraq, he said India was gravely concerned about the attack. It puts a serious question mark on the collective decision of the United Nations. He said there was a human angle to Iraq and innocent people should not suffer. He said India was of the view that no country should have the right to determine who should head the government of any country. The government would give importance to economic cooperation. “We believe that aspects of foreign economic policy needs to be addressed more purposefully”, he added. On his talks with Strobe Talbot the Minister said CTBT, export control, fissile material control treaty and defence posture, were the four areas of discussions. He said there were no problem areas as such but only “ there is insufficiency of harmonisation of views”. He said Indo-US relations
were not confined to these four issues and it was based
on a more broad canvas. “We are attempting to place
these four issues in the appropriate spot in the
canvas” he added. |
STOCKS MUMBAI, Dec 24 (PTI) — Equities moved in a narrow range both ways on alternate bouts of buying and selling and ended the session on a steady note at the Bombay Stock Exchange (BSE) today. Initially, the scrips came under all-round selling pressure unnerved by the government’s decision to defer the Patents Bill to the Budget session in the Lok Sabha. Later, foreign institutional investors (FIIs) entered to support the market at lower levels and purchased good lots of software and pharmaceutical shares. Brokers said the long weekend holidays restricted activity and scrips moved in both directions on alternate bouts of buying and selling to square up positions for the current settlement. Speculators as well as domestic institutions purchased shares at low levels of heavyweighted shares such as HDFC, Telco, Tata Tea, Tisco, Tata Chem, Tata Power, SBI, GACL and Reliance, while FIIs purchased Satyam Comp, Zee Tele and Dr Reddy on shortcovering. Tata scrips were influenced by reports that Tata Sons were set to unveil Tata brand equity scheme early next month which is expected to garner Rs 10 crore as subscription from group companies. The group has signed conduct code in nine major companies. All the major nine scrips flared up on speculative buying. There was also heavy selling in scrips for profittaking and squaring up positions which resulted with the index being balanced both ways and ended on a steady note. Infosys Tech suffered a setback although the company had awarded its shareholders a bonus issue in the ration of one share for every share held. Reflecting the activity, the BSE sensitive index opened lower at 2953.55, dipped to a low of 2942.02, later flared up to 2974.66 and closed at 2963.45, showing a minor gain of 0.95 points from the previous close of 2962.50. The BSE-100 index closed fully steady at 1314.05 from the previous close of 1314.04. The BSE-200 ended lower at 303.80 and the Dollex at 118.90 from the last close of 304.29 and 119.06, respectively. The total turnover in the Bolt system was Rs 1332.99 crore. Pentafour Software topped the list with a turnover of Rs 222.38 crore, followed by ITC Rs 188.95 crore, Satyam Computers Rs 160.98 crore, Telco Rs 118.87 crore and Zee Tele Rs 85.19 crore. Pentafour Soft firmed up
by 36.25 to 656, Satyam Comp by 14.25 to 653.75 and Telco
by 8.60 to 165.90. ITC declined by 3.00 to 700 and Zee
Tele by 2.50 to 609.75. |
Markfed
calendars CHANDIGARH, Dec 24 — Mr Ranjit Singh Brahmpura, Cooperation Minister, Punjab has reviewed the performance of Markfed, particularly position of supply of fertilisers as well as procurement of paddy in a meeting held here today. He appreciated Markfed’s all round efforts for arranging the highest quantity of DAP at a short notice and further supplies to the farmers. Mr Brahmpura said, Markfed has supplied 2 lakh MT DAP for the current Rabi sowing while last year, it has arranged 1.37 lakh MT. It is clear that this year, Markfed has arranged the highest quantity to meet the demand of farmers. The others also present were: Mr Jagdish Singh Walia, Chairman, Mr Amarjit Singh Gill, vice-chairman and Mr Gurinderjit Singh Sandhu, MD, Markfed. Earlier Minister released
multi-coloured two calendars and a diary of Markfed for
the year of 1999, depicting Punjabi culture. The minister
narrated Markfed’s history for printing beautiful
calendars, particularly on different themes of Punjabi
culture. |
Change in
Commodities Act opposed NEW DELHI, Dec 24 — A leading traders association today threatened that foodgrain dealers would down their shutters the moment the Essential Commodities Act, 1952, is amended to include harsh provisions against them. A decision to this effect was taken at a meeting of the Forum of Delhi Traders Association here. The Forum vice-president, Mr Shyam Sunder, also Delhi Grain Merchants Association president, said political parties were demanding inclusion of “harsh and unwanted” measures against traders even as dealers sought amendment in the Act for some relief for them. Dealers suggested constitution of a “price control committee” by the government and it should have members from the trading community also, he said. The general secretary of the Forum, Mr Rajinder Gupta, regretted that traders were being run down by various political parties. A Bill to amend the Essential Commodities Act, 1952, to rationalise the legislation and make technical offences by traders bailable besides providing for summary trial of offenders has run into rough weather with Lok Sabha referring it to a joint select committee. The committee, however, returned the Bill without any recommendations, saying it had not been given enough time to study the legislation after the Lok Sabha gave a deadline of December 9 for submission of the report. The Bill also proposes to
include some features of the 1981 Essential Commodities
(special provisions) Act. |
FIPB approves British Gas proposal NEW DELHI, Dec 24 (PTI) — Foreign Investment Promotion Board (FIPB) has cleared the downstream investment proposal of British Gas holding company, Industry Secretary T.R. Prasad said today. However, the Finance Ministry has raised some objections as it wanted SEBI and RBI to give comments, he said. Prasad, who is also the Chairman of FIPB, was talking to reporters at the sidelines of a conference on Foreign Direct Investment organised by Federation of Indian Chambers of Commerce and Industry (FICCI) here. On Rothmans proposal to set up a wholly-owned subsidiary with an initial investment of $ 150 million to manufacture cigarettes, Prasad said “there is no progress so far.” The proposal of Rothmans of Pall Mall, which is pending before FIPB, is awaiting revenue department’s comments on foreign exchange outflow from the project. Earlier this year, British Gas had obtained government permission for setting up a holding company in India. The approval was subject to the condition that the company would require specific FIPB approval for downstream investments in setting up subsidiary companies and joint ventures. The holding company
subsequently sought government’s permission to
expand its range of activities including acting as an
investment vehicle for routing funds into power and gas.
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Mercedes not to launch A-class NEW DELHI, Dec 24 (UNI) — Mercedes Benz India Limited (MBIL) has decided not to introduce its famed A-class small car in the Indian market for the next three years even as vehicles from Chrysler stables are being explored as probable roll-outs here. Though the likely models from the Chrysler Range have not been finalised as yet, the company has decided to introduce only low priced vehicles from its stables, MBIL Managing Director and CEO Till Becker De Freitas told UNI here. The company is exploring this feasibility in the wake of Chrysler’s merger with Daimler-Benz. “Though we are looking at introducing their products in the Indian market, no firm decision on the matter has been taken as yet.” “There are only two or three models in the Chrysler Range which could be an eventual possibility for the Indian market. But what is coming would be too preliminary to talk about now. But it is for sure that the models would be in a segment which is not as high as our segment,” he added. On the A-class cars, he
said, it would not be introduced in the Indian market for
the next three years. “we are presently
concentrating on the E-class for the time being. |
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NEW DELHI, Dec 24 (PTI) — Alarmed by declining turnover and depressed trading sentiments, the Delhi Stock Exchange (DSE) has decided to expand trading network and deploy market specialists to revive the market. Immediately after the election of office-bearers last evening, the DSE board met to take stock of the disturbing trends, mainly emanating from a steep drop in its daily turnover to about Rs 128 crore now from Rs 500 crore last year. Newly elected DSE President Ashok Agarwal told PTI that the first and formost job for the new team would be to boost the turnover of the exchange and also the market share which has declined in the recent times. The specialists, known as
jobbers, would give two-way quotations of every scrip
with minimum spread. |
IF you are looking for variety in woollens, you will find it in plenty this winter. Sweaters, cardigans, pullovers are available in better designs and colours this year. You will, however, be not so successful in identifying the quality of the fibre used in those woollens. Barring those that carry the pure wool mark given by the International Wool Secretariat, most sweaters available in the market do not carry any label indicating the quality or the composition of the fibres used. Are they made of pure wool or are they made of acrylic or polyester or viscose rayon? Or is it a blend of two or three different fibres? There is absolutely no indication. Many of them carry fancy tags describing the “high quality” of these sweaters. But they do not answer the basic question about their composition. Many of them are also silent on washing instructions and the full address of the manufacturer. Let me explain why labelling is important. Firstly it ensure that a consumer is not misled on quality and thereby price. Wool, a natural fibre, for example, is far more expensive than man-made synthetic fibres. So in the absence of an indication on quality, a retailer many well overcharge the consumer, claiming that it is pure new wool. Secondly, the consumer has a right to information and from this flows the right to choice. And in order to make an informed choice, the consumer should know what the cardigan is made of. Both natural wool and synthetic fibres have certain advantages and disadvantages. There is also a vast difference in price and eventually the consumer has to weigh all these factors before making a choice. Absence of label information denies consumer this informed choice. Thirdly, different fibres require different kind of care in washing and storing and this again makes it imperative that the consumer know the quality. Take wool, for example. It is soft, supple, expansive and resilient. Wool in fact is the most elastic of the natural fibres and this elasticity makes it wrinkle resistant. More important, wool keeps the wearer really warm on account of the air enmeshed within the fibre and on the surface. Because of its high porosity and the tendency of the fibres to repel each other, about 80 per cent of the entire fibre volume is air and since trapped air is a non-conductor of heat, it prevents heat loss by the body. Another positive quality about wool is that it ‘breaths’. It absorbs moisture or sweat, thereby keeping the wearer comfortable. Wool is also flame resistant and because of its low static quality it also resists soil. Of course there are different grades and qualities of wool, determined by the breed of the animal, the region where it is bred, the climatic conditions there, and the kind of manufacturing process used. The fleece from the shoulder and the sides of the sheep are of much better quality than wool from the head, breech or the belly. Again, wool, pulled from the skin of dead sheep is of inferior quality compared to fleece shorn from live sheep. Wool used in a sweater could be new or recycled. Wool has certain negative qualities too. It tends to shrink and needs to be processed or blended to prevent shrinkage. It is eaten up by moth larvae and has to be treated with a month-repellent. Man-made acrylic fibres, on the other hand, are easy to wash and maintain and moth larvae do not feed on them. They can also be soft and fluffy and they are not as expensive as good quality wool. Even though acrylic too keep the wearer warm, they are not as resilient as wool and they do not absorb moisture or sweat like wool. Unless given an anti-static finish, once also encounters the problem of static electricity with acrylics. Woollens made of blended fibres, incorporating the advantages of natural wool and synthetic fibres like acrylic or even polyester are also available in the market. But in the absence of a label indicating the quality and washing instructions, a consumer cannot possibly have a fair deal. It’s therefore time
the government brought in a law to ensure mandatory
labelling of all wool and woollen garments. (here I
include natural wool as well as blended and synthetic
fibres that are losely referred to as woollen garments).
If it is a blended fibre, then the exact composition of
the fibre should be specified. The tag should also carry
washing, drying and ironing instructions, the name and
full address of the manufacturer and the maximum retail
price. The law should also prescribe suitable penalty for
those who violate the law and sell either without proper
label information or give false or misleading information
on the label. Such a law would certainly go a long way in
protecting the interests of consumers. |
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| Gold falls NEW DELHI, Dec 24 (PTI) — Gold continued to fall on the bullion market today on persistent selling by stockists against fresh arrivals and closed with another notable loss. The quotations: Silver .999 (ready) 7335, delivery 7345, coins buyer 10,400 and seller 10,600. Standard gold 4230, ornaments 4080 and sovereign 3725. PNB House Fin BEL Nominated Award Nissan |
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