Sunday, November 29, 1998
today's calendar
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B U S I N E S S | Sunday, November 29, 1998 |
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spotlight today's calendar |
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Further slowdown in economy
predicted Maruti
jv with Sumitomo |
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FIPB clears FDI worth Rs
800 crore Airports
get hi-tech control systems |
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PM
to woo business community Exxon,
Mobil confirm talks on merger Hind
Lever held guilty of contempt |
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Further slowdown in economy predicted NEW DELHI, Nov 28 (PTI) — The National Council for Applied Economic Research (NCAER) today painted a gloomy picture of the economy, pegging overall growth at 5.7 per cent, much below the government’s estimate of 6.4 per cent. Industrial production was projected to slow down to 5.2 per cent and agriculture production fall to 3.4 per cent against the earlier estimate of 4.6 per cent. “Overall performance of agriculture sector will remain below normal due to deviation from normal rainfall in some regions of eastern, western and southern,” NCAER Director General, Dr Rakesh Mohan said presenting the mid-term review of the economy. Fiscal deficit would be higher at 5.8 per cent against the government’s target of 5.6 per cent, mainly due to lower indirect tax collection and roll back of key budget proposal like urea price hike, Dr Mohan said. However, inflation based on wholesale price index (WPI) would be hovering around 8.2 per cent mainly due to increase in the prices of primary goods. NCAER projected a further increase in trade deficit to 5 per cent of GDP in the current fiscal primarily due to increased import dependence and decline in exports. Exports have been targetted to grow at 14 per cent, while the imports would be at 15.3 per cent in the remaining fiscal, Mohan said. On infrastructure front, the economic think-tank complemented the reform process initiated in the telecom and power sector, but said, “it is widely perceived that impact of infrastructure constraints is affecting the growth rate of the economy adversely.” Fall in production of sectors like coal, steel and cement and slowdown in the railways and port sector was affecting investment in the infrastructure sector, NCAER said. For a tighter reign over money supply which is growing around 20 per cent against the target of 15-15.5 per cent, it said, “unless government borrowing is contained it would become impossible to check monetary growth within targetted levels.” Making a detailed analysis on the corporate sector profit margins for the first time, Dr Mohan said NCAER projects a further pressure on the profit margins on Indian companies due to higher costs and increased competition. It said, the large excess
capacities especially during the boom period prior to
1996 and export non-competitiveness of the manufacturing
sector, also contributed to its woes. |
FIPB clears FDI worth Rs 800 crore NEW DELHI, Nov 28 (PTI) — Foreign Investment Promotion Board (FIPB) today cleared 30 Foreign Direct Investment (FDI) proposals worth about Rs 800 crore including those by Bharati Cellular and Tata Communication. The board approved the proposal by Information Technology Park in Bangalore, jointly promoted by Singapore Consortium and Tata Group to increase foreign capital in the venture. According to the proposal, the foreign holding in the project would increase from 40 per cent to 45 per cent and FDI would go up from Rs 8 crore to Rs 147 crore, FIPB sources said. The board also cleared a proposal by Singapore-based Worldspace Asia Pte Ltd to start digital broadcasting without any uplinking from India. The proposal envisages a total FDI of Rs 107 crore. Worldspace Asia proposes to start digital direct delivery of audio and multimedia from satellites to personal portable receivers. Sources said the clearance was subject to uplinking and downlinking laws in the country. Tata Communications, the cellular mobile service provider, has been allowed to double its capital from existing Rs 147 crore to Rs 294 crore, sources said. FIPB also cleared the proposals by Bharati Cellular, the cellular service provider in Delhi, to replace its foreign partner Emtel of Mauritius with British Telecom. The sources said the foreign holding would remain the same, the company has also been allowed to expand its activities and enter into internet services, which was thrown open to private sector earlier this month. A proposal by Central
India Coal Ltd, the captive coal company of Mittal
promoted Central India Power, to increase foreign equity
from 74 per cent to 100 per cent was also cleared today. |
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NEW DELHI, Nov 28 (UNI) — Maruti Udyog Limited (MUL) is setting up a tripartite joint venture with Maruti-Countrywide and Sumitomo Corporation of Japan for establishing an after-sales service workshop network across the country. The first of the workshop, being set up in Delhi, would be operational by mid-1999, company sources told UNI here today. Both Sumitomo and MUL control 47.5 per cent stake each in the venture — Maruti Sales and Service India Limited — while the remaining equity is held by Maruti-Countrywide. The Japanese giant would be infusing Rs 9 crore into the venture, the sources added. “The joint venture would be managed by Maruti and would be exclusively for servicing Maruti cars, the venture would not indulge in sales of Maruti vehicles.’’ Land for the purpose has already been purchased and construction of the workshop has commenced, “we will be conducting after sales service as well as sale of spare parts, components and accessories from the workshop.’’ The company intends to set
up similar workshops across the country in a phased
manner. “We are presently looking at other sites and
are working with Sumitomo for the same. But we can also
join hands with any other partner if the need be for some
other state,’’ the sources pointed out. |
Maharishi
Housing CHANDIGARH, Nov 28 —
Maharishi Housing Development Finance Corporation
Limited, promoted by the Maharishi Foundation has started
business operations from February, 1997 with an equity
capital of Rs 20 crore. The main business activity of the
company is to extend housing loans for construction,
purchase, extension, renovation and improvement of
residential units to individuals. The company has
recently been approved by the Central Board of Direct
Taxes (CBDT) under Section 36(1)(viii) of the Income Tax
Act. This would lead to tax benefits to the company, the
company’s investors as also the borrowers. Now the
company shall be able to set aside 40 per cent of its
profits derived from long term housing business as
special tax reserve. Mr S. R. Sinha, Managing Director of
the company said that the company has introduced a novel
scheme whereby loans can be obtained for a period upto 40
years against the present practice of 15 to 20 years
being followed by all housing finance companies. While
the other terms and conditions remain the same, this
scheme would enable people to get larger loan amount
given their income and age group. |
Exxon, Mobil confirm talks on merger NEW YORK, Nov 28 (Reuters)
— Exxon Corp and Mobil Corp have confirmed that they
are engaged in merger talks, and investors responded by
bidding up the market value of Mobil shares to more than
$ 70 billion. Exxon, the biggest US oil company and
Mobil, the industry number two, said in a joint statement
yesterday that they were holding negotiations but that no
agreement had yet been reached. The brief statement, was
issued before the US stock market opened, following two
days of market talks and unconfirmed reports that the
biggest industrial merger was in the works. If a deal was
reached it could be announced as early as Tuesday,
sources said. |
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NEW DELHI, Nov 28 (UNI)— Prime Minister Atal Behari Vajpayee is expected to woo both the Indian and international business community to step up investments in the country while sharing his priorities and objectives for implementing the economic agenda as he opens the three-day India economic summit beginning here tomorrow. This annual feature co-organised by the World Economic Forum (WEF) and Confederation of Indian Industry (CII) will be attended by over 400 delegates from 33 countries.The forum provides an opportunity to bridge the information gap that exists between India and the rest of the world. “India is not able to communicate to the world. We will get the investors here to get a correct picture of the ground realities,’’Director World Economic Forum had said. The main focus of the summit will be to assess the economic growth that occurs in India. ‘’The role of India in the context of world development’’ will be taken up by Commerce Minister Ramakrishna Hegde after Mr Vajpayee’s inaugural, Jean Francois-Poncet, Chairman of Economic and Social Committee, the senate, France would also be addressing the opening dinner. The following day will be an occasion for business participants to define the issues of priority to be discussed throughout the summit with members of the government and experts. Among the members are Mark Nocholson, correspondent, Financial Times, Krishna G Palepu, Professor of Business Administration, Harvard Graduate School of Business Administration. The Indian economy has
survived the Asian crisis. There will be however,
longer-term implications of the confidence crisis which
is sweeping across emerging markets. International
investors remain cautious with respect to the Indian
financial markets as issues with regard to the depth,
liquidity and transparency of the debt and equity market
still need to be addressed. Finally, events in the global
currency markets are likely to delay steps towards full
convertibility. The session also on the second day will
be addressed by SEBI Chairman D.R. Mehta , David Eldon,
CEO, Hongkong and Shanghai Banking Corporation. |
Airports get hi-tech control systems NEW DELHI, Nov 28 — Two of India’s busiest airports now have fully automatic air traffic control systems that are expected to make them safer and more efficient. Although three years behind schedule, the introduction of the system at the airports in Delhi and Mumbai “has brought India at par with the best of the technologies in the world,” a spokesman of the Airports Authority of India (AAI) said. “The system would help in cutting down on flight delays, improving traffic flows and saving fuel. Now planes can land and take off even in thick fogs besides minimising the chances of any accident,” Prem Nath, AAI assistant general manager in charge of public relations, told India Abroad News Service. The contract for the systems at the two airports, which together cost Rs. 4.24 billion, was awarded to the US company Raytheon in March 1993. It was to be completed in October 1995. “There was procedural delay in the process,” Nath said without elaborating. Had the system become operational on schedule, the mid-air collision between a Saudi and a Kazakh aircraft in November 1996 near Delhi could had been averted says aviation experts. Billed as the worst accident in aviation history, it killed all 351 aboard. The new system, wherein manpower acts only as standby, has nearly doubled the flight handling capacity of these airports from 15-20 per hour, including landings and takeoffs, to between 35 and 40, Nath said. Earlier, in the event of heavy traffic, flights were diverted to the nearest airports leading to logistical problems and passenger inconvenience. Delhi and Mumbai are the two busiest airports of the country with their average daily landings and takeoffs being 300 and 400, respectively. The new system has still not been officially commissioned since no dignitary has been able to spare time to inaugurate it. The other features of the new “user-friendly” system, Nath said, include flight and radar data processing, multi-radar processing, meteorological data processing, airport surface traffic detention, minimum safe altitude warning, traffic conflict alert, altitude tracking and automatic self-briefing systems. In the few days of its operation, Nath said, “the system has worked well and is giving expected results. Now we have a 21st century technology for our airports.” With this the objective of a fully automatic system to enhance air traffic handling capability has been achieved, he claimed. The introduction of the
new system has been opposed by a section of the air
traffic controllers who complain that the fully automatic
system might render them jobless. The new system has been
executed without adequate training of the staff, they
allege. The charges have however been rejected by airport
authorities. — IANS |
Hind Lever held guilty of contempt MUMBAI, Nov 28 (PTI) — Monopolies and Restrictive Trade Practices Commission (MRTPC) has held Hindustan Lever Ltd (HLL) guilty of contempt for wilful breach of an earlier injunction granted by the commission. The commission slapped a fine of Rs 2000 on the company and said it could not inflict the punishment of imprisonment on HLL as it was an “artificial person”. In its order, MRTPC said the senior Product Manager of HLL was found to have made a wilful breach of the order of injunction passed by the commission on November 5/6, 1997. The order had injuncted HLL against any direct or indirect reference to Colgate dental cream by means of any hint or allusion in its TV commercials or newspaper advertisements or hoardings. However, HLL had issued advertisements titled “new pepsodent offers superior germ protection” and “the interim order of MRTPC: what it means” making a direct reference to Colgate dental cream. The commission, comprising its Chairman Justice A.N. Divecha and member R.K. Anand, also said the press release brought by HLL after the injunction was “mischievous.” “It does not give a truthful account of the contents of the aforesaid order of injunction, it contains a somewhat distorted and twisted version thereof,” the commission said. MRTPC said since HLL’s senior Product Manager has clearly admitted authorship of the release and also responsibility for issue thereof and also the newspaper advertisement in question, he can be said to be the contemner as a natural person. So far as HLL was concerned, it could not escape punishment as it had acted through its senior Product Manager, the commission said. The senior Product Manager has been found to have made a wilful breach of the order of injunction and also guilty of criminal contempt within the meaning of Section 2(C) of the Contempt Act. “In that view of the
matter, we think that we should punish the respondent, a
company registered under the Companies Act, 1956, for
contempt,” the commission said, and imposed the
maximum punishment in monetary terms of Rs 2,000. |
LUCKNOW (PTI): Truckers, the lifeline of the nation’s trade, may soon forget days of travelling on lonesome highways, thanks to highway clubs which offer a home away from home. Equipped with a clean dhaba for a hearty meal, an STD booth to call back home, rest rooms, well-equipped bathing facilities, a doctor and repair workshops, the round-the-clock highway clubs are all set to drive away truckers blues. Started by a petroleum company, the scheme envisages relief to the truckers and his vehicle at intermittent points along the route of his journey. Under the pilot project the first such route identified is between Pathankot and Guwahati, where the company has opened 16 highway clubs spread over 2,700 km. Emphasising that the scheme is primarily meant for the benefit of truckers, Chairman and Managing Director of IBF Company S.N. Mathur says: “Truck drivers would now get relief from their strenuous journey in the form of rest rooms, lodges, communication facilities, suitable parking space and laundry facilities — all free of cost. “This is something unbelievable to even think of”, said Paramjeet Singh, on his way from Ludhiana to Guwahati. Task force NEW DELHI (PTI): Defence Minister George Fernandes has expressed extreme displeasure at the slow pace of work of six task forces jointly formed by his Ministry and Confederation of Indian Industry (CII). The task forces were set up in June 1998 to recommend ways to increase Indian industry’s participation in defence equipment production. “The response from CII has been very slow. In fact I am yet to hear about the work of the task forces from CII,” Fernandes told PTI. At the time of setting up of task forces it was decided that they would submit reports in 45 days. Emphasising need to speed up work of the task force in light of sanctions imposed by United States on exporting technology and equipment to India, Fernandes said Defence Ministry was keen to collaborate with Indian industry to face this challenge. The CII Deputy Director General S. Sen looking after Defence matters told that some task forces had finished work others were giving finishing touches to their reports. Task force may submit their recommendations to Defence Minister by December end, Sen said. ‘Full tension’ NEW DELHI (PTI): Leading sports goods manufacturer Adidas India launched its first television commercial, “Full tension”, starring Sachin Tendulkar, a company statement said. Adidas had signed the Indian cricketing hero for promoting their products nine months ago. “After the last nine
months of association with Adidas, I am happy with my
decision and look forward to a mutually beneficial
partnership,” Sachin Tendulkar said during the
launch of the commercial in Mumbai. |
Q. If the tenant deposits arrears, can a decree be passed against him by treating him a defaulter in first chance? A. Rajasthan H.C. was answering a reference made to it in the case of Kailash Chandra v Sri Kishan (1998 (1) R.C.J. 581) thus: The reference was “whether in a suit for eviction U/s. 13(1) (a) of the Rajasthan Premises Act on the ground of alleged second default, if it is expected from the Trial Court to provisionally determine the rent as per provisions of S.13(1) of the Rent Act”. To decide this controversy the words used in S.13(3) are to be looked into. S.13(3) has used the term “in a suit for eviction on the grounds set forth in (1) (a), the Court shall on the first date of hearing, after hearing the parties and on the basis of the material on the record provisionally determine the amount of rent for which the tenant may have made default. The relevant extracts of sub-section (3) thus, when read does not create any doubt or suspicion that the legislature has intended to anything beyond what the plain meaning of these words communicate. The H.C. further added that the present matter can be viewed from yet another angle also. A tenant could have taken benefit U/s. 13A once, that may be before determination of the provisional rent in that suit. Under such circumstances also he is barred from taking any advantage U/s. 13(6) by making deposit. Thus, the H.C. held that in a suit in which the determination was not made at some stage the benefit was taken by the tenant U/s. 13-A then to that tenant will not be able to take benefit again in a suit on default, though it may be seen that in that suit, the determination will be for the first time. Thus, in the opinion of the H.C., the benefit is independent of determination. They are not interlinked. The benefit is provided under the Act for the tenant to establish his bona fide and get established himself as a tenant who is “ready and willing to pay rent.” It is held that as and
when a suit, first or subsequent, is filed the Court
seized of the suit is required to determine the
provisional rent as provided U/s.13 (3) of the Act. |
Q: I gave Rs 2 lakh to a relation by means of a crossed payee’s cheque to help him in construction of a new house. It was a temporary loan for a couple of months or so carrying no interest at all. Now, it is over ten months. It appears that the amount is presently lost as also the relation permanently. Am I to show it in my IT Return? — R K Aggarwal, Ludhiana. Ans: The amount which you are not able to recover in respect of the temporary loan advanced by you to your relative will not result into any tax deduction for you. You may just mention this amount in the balance sheet. However, no tax benefit can be achieved for this loss of yours. This is a capital loss. Q: May I take liberty to request for information on some points puzzling me: A: Is the interest income on the following covered by Section 80L. i. IFCI Growing Income
Bonds; (allotted in Sept. 1996) B. You have in one of your replies stated that one can give free loan to one’s son (major) to avoid Gift Tax. My enquiry is whether one can give interest free loan to one’s married daughter also? Will it be construed as transfer of assets (liquid) without adequate consideration? — B N Bhargava, Chandigarh Ans: The various interest incomes as mentioned by you are exempted u/s 80L. However, in respect of any doubt about the exemption of a particular interest income you should refer to the offer instrument of the respective organisation. You may also be liable to tax on capital gains if any arising as a result of redemption of units, etc. You can give interest-free loan to your major child. This is within the framework of the law. Q: Kindly advise me in calculating my Income Tax for the assessment year 1998-99. I am above 80 years of age. My income comprises — Pension Rs 22,619 (after Std. deduction), Dividend from UTI Rs 82,038, Bank interest Rs 2,520 gross total = 1,07,177. Qualifying amount for Rebate u/s 88 comes to Rs 4500 and under Ch. VI A, Rs 15,000/-. Tax deducted at source by the UTI Rs 12,306. — Jagdish Singh, Chandigarh Ans: On the facts stated by you, you will not be required to pay any Income-tax because you are a senior citizen. Even from the dividend income from UTI you are entitled to a deduction of Rs 15,000/- u/s 80L just after availing the deduction for a senior citizen and the tax rebate the net tax payable by you will be Nil. Already UTI has deducted Income-tax amounting to Rs 12,306. It is suggested that you should file your Income Tax return so to claim refund of the tax deducted at source. Q: I am a Govt employee with salary as only source of my income and am filing IT returns regularly. I purchased a residential plot from an original allottee of the plot of HUDA Panchkula who executed an agreement to sell his plot in May, 1984 for Rs 17,500/- in my favour and the conveyance deed of the plot was made in my favour by the Estate Officer, HUDA for Rs 5,505/- (original cost of plot allotted in 1971). Now (in April, 98) I have executed an agreement to sell the same plot for Rs 2 lakh to a third person and have given him a general power of attorney and received the full amount. Please let me know my IT liability on a/c of capital gain and the date (s) by which the same is to be deposited. – Ram Singh, Jind Ans: You are required to make payment of tax in respect of long-term capital gains @ 20 per cent. This tax will be payable by you during the Financial year 1998-99. Just like advance tax, the tax in respect of capital gains has to be paid on the due date of advance tax namely September 15, December 15 and March 15. In order to arrive at the long-term capital gains you should calculate the net gain based on Cost Inflation Index. Q: My income for the year 1997-98 will be as under: 1. Pension 59824-00 Please clarify: (i) What is the exemption
limit in respect of Senior citizens i.e. in my case. – Vastar Singh, Panchkula Ans: In respect of income
for the Year 1997-98 relevant to the Assessment Year
1998-99 the basic general exemption is to the tune of Rs
40,000. You are entitled to a standard deduction equal to
33 1/3rd per cent of the pension amount. Likewise, in
respect of your interest income you are entitled to a
deduction u/s 80L to the tune of Rs 12,000. After
granting you a deduction u/s 88B for a senior citizen
there will be no liability of Income-tax on you. However,
you should file your Income-tax return. |
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| Gold weak NEW DELHI, Nov 28 (PTI) — In thin trade, both the precious metals softened on the bullion market today as traders largely abstained from trading. The quotations: Silver .999 (ready) 7400, delivery 7422, coins buyer 10,500 and seller 10,600. Standard gold 4370, ornaments 4220 and sovereign 3750. Sony Microsoft PSB Directory |
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