Gift tax goes from today CHANDIGARH, Sept 30 — The Finance (No. 2) Act 1998 has abolished levy of gift tax on gifts made by any person from payment of gift tax from tomorrow.

Maharashtra signs MoUs with US energy firms
LONDON, Sept 30 — The Maharashtra Government has signed a memorandum of understanding with two major American energy multinationals, Enron Corporation and Universal Electricals for the upgradation and modernisation of gas-based Uran and Nasik and Bhuvsal Karodi thermal power projects.

Mahindra wants market driven loan pricing
MUMBAI, Sept 30 — Banks should desist from a “cost plus pricing policy for loans” and opt for a market-driven pricing policy, noted industrialist Keshub Mahindra said here today.

Sensex falls 45 points on selling pressure
MUMBAI, Sept 30 — Equities lost further ground pushing the sensex by 45 points on the stock market today following sustained selling pressure from operators despite some buying from institutional investors.

Decision on foreign equity soon: FM

OTTAWA, Sept 30 (PTI) — Finance Minister Yashwant Sinha has said the Government would soon take a decision on the extent of foreign equity participation while opening up the Indian insurance sector to private players.

"Foreign equity participation is a matter under discussion and a view will taken very soon,’’ he said addressing the Canadian Commonwealth Business Forum here yesterday.

He also indicated that the Government would cut further procedural delays and provide an investor friendly environment in the country.

Asserting that the liberalisation process was irreversible, Sinha said a consensus had been evolved in the country in favour of continuing the economic reforms launched in 1991.

He said procedures had been simplified and licences done away with to promote foreign investment and pointed out that no licence was required now for investments in coal and lignite sectors.

Finance Minister said the BJP Government was committed to disinvest 74 per cent of the equity in some public sector undertakings and open it to private sector participation.

These public sector undertakings would be restructured and with the proceeds of disinvestment, new assets would be created.

Regarding the East Asian currency meltdown, Sinha said it did not have much impact on the Indian economy because of the cautious policies pursued by the government.

The absence of full capital account convertibility and keeping of the short term debts at a low level were some of the reasons that have helped the Indian economy, he said.

He referred to the long term commitment of foreign investment in India so far, as opposed to the fly by night investors elsewhere.

Sinha also met the South African Finance Minister Trevor Manuel and discussed various issues of mutual interest. The discussion focussed on working out an acceptable proposal for reforms of the system to enable it to deal with the financial crisis like the one in South-East Asia.

Policy to attract FDI in Telecom likely

WASHINGTON, Sept 30 (PTI) — Communications Minister Sushma Swaraj has announced that India would come out with major policy decisions in the next three months to attract foreign investments in the Telecom sector, even as she maintained that the Indo-US joint ventures were not hit by sanctions.

Swaraj said the need of the hour was to create the right atmosphere for building the confidence of foreign investors in the post sanctions era. “When sanctions were imposed there were fears they would impact the telecom sector but the net result is that we are not hit”, she said.

The BJP-led coalition Government has taken initiatives to reinforce foreign investors confidence in India as a favourite destination in the post sanctions era and many more are on the anvil, she told newsmen soon after addressing a luncheon meeting of the Indo-US Business Council here yesterday.

“We are following policies which are wholly transparent and sanctioning projects held up for years not only speedily but at supersonic speed’’, she said adding her mission to the USA was to allay fears that the BJP led government was against foreign direct investments.

Earlier referring to the impact of sanctions on the Indian Telecom sector, Swaraj said, “there were apprehensions that the telecom sector could be hit badly by sanctions, but the net result is that we are not hit by sanctions at all.”

“During our interactions with companies having joint ventures in India, after the imposition of sanctions, we received a feedback that there is absolutely no adverse impact,” A Prasad, Member (Finance) Telecom Commission and Secretary to the Government of India said.

“The sole exception was one company which reported that its roll-out could be slightly delayed because of the fact that it had to find different funding in place of the Exim-Bank loan which would not be available.

Honda to raise Rs 200 crore from banks

NEW DELHI: Luxury car maker Honda Siel cars Ltd (HSCL) is raising funds worth Rs 200 crore from various foreign and domestic banks including Citibank, Bank of America and Bank of Tokyo-Mitsubishi for its investment plans.

HSCL has invested Rs 450 crore in the venture, of which Rs 180 crore is through equity and the remaining Rs 270 crore is being mobilised as loans.

“We have already tied up loans totalling Rs 200 crore with six financiers, we are considering various options for raising the balance of Rs 70 crore,” Hironobu Goto, Director Finance of the Company told PTI.

Goto said the ICICI alone had sanctioned Rs 100 crore for HSCL while the rest was being provided by a group of five banks.

Bank of Tokyo-Mitsubishi and Sanwa Bank have committed Rs 30 crore and 10 crore respectively while Citibank has agreed to provide Rs 20 crore, he said.

Another Rs 30 crore will come from Punjab National Bank and the remaining Rs 10 crore from Bank of America (Bank-AM).

Asked how the company was exploring various options to raise the balance of Rs 70 crore, Goto said: “there are many possibilities under consideration including a debenture issue, commercial paper or more bank loans.”— PTI

Hyundai
NEW DELHI: Hyundai Motor India Limited (HMIL) has initiated talks with Hitachi, Mico-Bosch and Nippon Cables for locally manufacturing certain critical electrical components for its 999cc Santro in India, a senior company official said.

“We intend to go ahead with localisation in a big as we plan to make India an export base for the Santro, and it makes good business sense for us to locally manufacture all components. Towards this end, we have already initiated talks for producing the few critical parts which we had hitherto been importing,” Mr Min Ho (Mark) Lee, Director of HMIL’s procurement and supply division told UNI here.

The company, he said, as part of its localisation drive, had initially tried to produce these components from India. “However, the quality of the parts made in India could not meet our standards and we were forced to resort to imports, but given a chance, we would like to get them from the local market.”

The company is presently in talks with three leading global manufacturers of electronic and electrical components with bases in India for meeting its requirements. However, no decision has yet been arrived at on the arrangement between the parties. — UNI

Fiat India
NEW DELHI: Fiat India Automobiles Limited (FIAL) signed a memorandum of understanding with the Directorate General of Foreign Trade under the revised guidelines for manufacturing petrol and diesel versions of cars, including Palio and Siena.

FIAL has committed to make an investment upto $ 600 million in this venture with equity share of $ 212 million by Fiat Auto S.P.A., Italy. The company has projected production of 10,000 numbers of cars by December this year.

The company has undertaken to achieve the stipulated indigenisation of 70 per cent by the year 2001. The company also intends to import 1.10 lakh of kits worth $ 284.43 million by 2001 and shall achieve a broad neutralisation of foreign exchange over the entire period of MoU export of cars and auto components. — UNI

TVS Suzuki
NEW DELHI: Motor cycle TVS Suzuki will make its foray into the four stroke mobike segment with the launch of a 150 cc mobike in mid next year, a top company official has said. “We have firmed up plans for launching the four stroke motor cycle by the middle of next year and to phase out the existing range of two stroke bikes by year 2005”, TVS Suzuki Chairman and Managing Director Venu Srinivasan tole PTI here.

TVS Suzuki is launching its first four stroke vehicle, a scooter christened “Spectra”, on October 1 marking the Chennai based company entry into the scooter market.
Srinivasan said the company was also planning to introduce a four stroke variant of its ‘scotterette’ scooty in the market soon. — PTI

Maharashtra signs MoUs with
US energy firms

LONDON, Sept 30 (PTI) — The Maharashtra Government has signed a memorandum of understanding (MoU) with two major American energy multinationals, Enron Corporation and Universal Electricals for the upgradation and modernisation of gas-based Uran and Nasik and Bhuvsal Karodi thermal power projects.

The deals were firmed up during the recent World Energy Congress at Houston in the USA, Maharashtra Deputy Chief Minister Gopinath Munde, who made a stopover here on his way back after attending the meeting, told PTI.

Describing the deals as “a major breakthrough for the state,” Munde said enhanced power generation in Maharashtra would pave the way for expansion of infrastructure and intensive industrialisation.

Under the MoU with Enron, the US company would make up for the shortfall in LPG supply from Bombay High for the Uran project.

Universal Electricals has been awarded the contract for expansion and upgradation of the Nasik and Bhuvsal Karodi thermal projects which currently were working with a plant load factor of only 50 per cent of the installed 250 MW capacity, Munde said.

The Uran upgradation and supply of LPG would be the second major project for Enron in Maharashtra. The US multinational is already building India’s biggest 2,450 MW power plant at dabhol at an investment of over $ 2.5 billion.

Mahindra wants market driven loan pricing

MUMBAI, Sept 30 (PTI) — Banks should desist from a “cost plus pricing policy for loans” and opt for a market-driven pricing policy, noted industrialist Keshub Mahindra said here today.

“Our banking system uses a cost plus pricing policy for loans and advances; with tends to pass on their (banks) inefficiencies to overall economy,” Mahindra, Chairman of Mahindra & Mahindra (M&M) said at the annual general meeting of IBA here.

Speaking on the occasion IBA Chairman A.T. Pannir Selvam said spreads should come down more as a result of overall rationalisation of cost and price structures of the entire operational framework.

“Thinner spreads always do not necessarily indicate efficiency. Some times they can lead to banks assuming greater risks to generate reasonable returns, which happened in some of the countries that witnessed serious troubles in their banking systems”, Selvam also the Chairman of the Union Bank of India said.

“Spreads should come down more as a result of overall rationalisation of cost and price structures of the entire operational framework which is not so feasible in India, where issue of profitability assumes great significance as that of social equity and distribution,” he said.

However, Mahindra felt a bank’s pricing policy should be market-driven which means products and services be priced at levels that markets will determine from time to time.

M&M Chairman said “cash credits/working capital funds demand that pricing should have some relationship to the commercial paper rates in the market.”

Maximum interest rate on deposits in the last nine years is in the range of 10 to 13 per cent whereas prime lending rates reflecting the minimum lending rate has come down from a high of 19 per cent in 1992-93 to 13-13.5 per cent now, Selvam said adding that hence, banks need to reposition their deposit products and pricing to ensure efficient asset-liability management.

Sensex falls 45 points on selling pressure

MUMBAI, Sept 30 (PTI) — Equities lost further ground pushing the sensex by 45 points on the stock market today following sustained selling pressure from operators despite some buying from institutional investors.

Operators preferred to square up their holdings on the last day of the current account, as a precautionary measure, in view of long holidays beginning tomorrow, during which any negative turn of event could be possible, dealers said.

The Unit Trust of India’s US-64 deficit that was expected to affect the institution’s secondary market operators also had adverse impact on the market.

Foreign institutional investors (FIIs), however, were reported to have made moderate purchases in pharmaceutical Scripps and Hind Lever. Some mutual funds too were seen picking up shares of ITC, Reliance Ind, Corporation Bank and SBI.

The BSE sensitive index opened marginally down at 3132.20 and gradually dipped to the intra-day low of 3084.42 before closing at 3102.29 as against yesterday’s close of 3146.83, netting a fall of 44.54 points. The BSE-100 index eased by 17.06 points to 1379.78 from previous close of 1396.84.

Market sources said investors and operators were not ready to take risk in the prevailing situation though the market seemed bullish with several positive developments, as the political situation in the country is still considered to be not so satisfactory.

The BSE-200 and the Dollex were quoted remarkably down at 320.44 and 125.44 compared with previous close of 323.72 and 126.72 respectively.

The volume of business was substantially down by Rs 273.61 crore to Rs 1436.54 crore compared with yesterday’s turnover of Rs 1710.15 crore. Satyam Computer remained the most active scrip with a turnover of Rs 277.69 crore followed by Zee Telefilms (Rs 221.39 crore), ITC (Rs 174.37 crore), Pentafour Software (Rs 112.55 crore) and RIL (Rs 79.34 crore).

The market leader Satyam Computer improved by 6 to 579.50. Zee Telefilms was down by 49.50 at 638.75, ITC by 3.25 at 691.25, RIL by 2.50 at 118.80, SBI by 3.40 at 200.20, Telco by 5 at 138, Tisco by 1.15 at 92.10 and Pentafour Software by 6 at 717.25.

Among top five gainers, Essel Packaging spurted by 7.91 per cent followed by Nocil (7.08 per cent), Voltas (6.98 per cent), Grasim (6.92 per cent) and Bharat Forge (4.84 per cent).

Zee Telefilms (7.33 per cent), Titan Ind (6.72 per cent), Garware Poly (6.23 per cent), BHEL (5.83 per cent) and HPCL (5.13 per cent) were the prominent losers.

Gift tax goes from today
By V.N. Agarwal

CHANDIGARH, Sept 30 — The Finance (No. 2) Act 1998 has abolished levy of gift tax on gifts made by any person from payment of gift tax from tomorrow.

Earlier the gift tax was payable on all gifts exceeding Rs. 30,000 at the rate of 30 per cent of the amount of gift so made by the donor. The Gift Tax Act was introduced by the Finance Act, 1958. A number of amendments were made to Act and the rules. The Finance Minister in his Budget speech on June 19, 98, in the Lok Sabha had proposed that no gift tax will be leviable on the gift amount on or after October 1, 1998. However, such amounts received will be taxed in the hands of recipient of the gift as his income from other sources. The proposal also included certain transactions of transfer of property for inadequate consideration etc. This exercise was in order to simplify the Direct tax provisions and to deter the avoidance and evasion of Income Tax.

The above proposal had multiple ramifications and would have given rise to number of controversies leading to litigation under the Income-Tax Act. The industry, professionals and the tax experts highlighted the uncertainties arising out of the implementation of these proposals for taxing the gifted amount in the hands of recipients and the liberal Finance Minister agreed to by making the gifts totally tax free and thus ending the on going controversy. However, the source of gifted amounts need to be explained to the Assessing Officer failing which the relevant provisions of the Income-Tax Act will become applicable.

BHEL posts Rs 720 crore profit
NEW DELHI, Sept 30 (PTI) — State-owned Bharat Heavy Electricals Ltd (BHEL) has recorded a turnover of Rs 6471 crore in 1997-98, and posted a profit after tax (PAT) of Rs 720 crore during the same period. “Despite a perceptible slow down in the Indian economy, BHEL has maintained its double digit growth, achieved during the last three years by notching a record turnover of Rs 6471 crore during 1997-98, compared to Rs 5722 crore in 1996-97,” BHEL’s officiating Chairman and Managing Director K.G. Ramachandran said today at Annual General Meeting (AGM). To cope with emerging challenges in power sector and in view of its improved debt-equity ratio, BHEL can now garner large resources externally to support its marketing operations for viable projects both in domestic and global markets, Ramachandran said. Stating that the company had registered a profit before tax of Rs 1022 crore in 1997-98, he said during the year BHEL secured orders worth Rs 5853 crore, bringing the outstanding order book position to over Rs 10,000 crore.

IFCI disbursements up 14 per cent
NEW DLEHI, Sept 30 (PTI) — Industrial Finance Corporation of India (IFCI) has registered a 14 per cent growth in its disbursements at Rs 2,300 crore, while its sanctions have declined by 5 per cent to Rs 44,000 crore in the first half of the current fiscal. The institution has set a target of 20 per cent growth during the full year in both sanctions and disbursements. While the target for sanctions has been set at Rs 13,000 crore for the full year, disbursements has been fixed at Rs 7,000 crore. Addressing the shareholders at its annual general meeting here today, IFCI Chairman and Managing Director P.V. Narasimham said last year the institution had disbursed Rs 5,650 crore and sanctioned Rs 10,983 crore to 303 projects. “Despite the recessionery trend in the economy, IFCI operations were not affected during 1997-98 as well as during the current year,” he said. On the resource mobilisation in the first half, IFCI chief said corporation had already mobilised Rs 1,700 crore at an average cost of 13.41 per cent besides raising Rs 214 crore by way of preferential capital at a coupon rate of 10.75 per cent. He said IFCI also planned to come out with a public issue of bonds in one or two tranches in addition to assessing the traditional private placement market.

MTNL to pay 30 per cent divided
NEW DELHI, Sept 30 (PTI) — Mahanagar Telephone Nigam Ltd (MTNL) has declared an all time high dividend of 30 per cent on a net profit of Rs 1,130 crore registering a growth of 21 per cent over previous year’s net profit of Rs 933 crore. The total outgo on account of dividend will be to the tune of Rs 183 crore, an MTNL release said. In the wake of competition from the private sector, MTNL has decided to launch a programme for employees orientation so that they could provide better services to its customers. MTNL is also planning to introduce new technologies including fibre in local loop (FILL) and wireless in local loop (WILL) in a big way to improve and modernise the external plant targeting better telecom services and in a bid to reduce the faults at the level of external plant. Many other information technology (IT) services are being planned for greater customer care, and will be introduced in Delhi and Mumbai under vision 2000 scheme prepared by MTNL.

Price index
SHIMLA, Sept 30 (UNI) — The All-India consumer price index number for industrial workers on base 1982-100 for the month of August, 1998 has increased by two points to stand at 413 points, according to Labour Bureau here today.

Elders’ Day
Tribune News Service
CHANDIGARH, Sept 30 — Panchkula branch of State bank of India today celebrated the World Elders’ day by organising a function for senior citizens and opening a senior citizen’s cell for extending banking facilities exclusively for the senior citizens. The cell was inaugurated by the bank’s General Manager, Mr R.C. Agrawala. Mr Agrawala said that the SBI has taken lead to open such counter in Panchkula.

Petronet
NEW DELHI, Sept 30 (PTI) — Multinational Lasgas-Mobil combine has evinced interest to pick up 26 per cent stake in Petronet LNG’s gas terminals, at Dahej and Cochin. Lasgas-Mobil, which is to supply liquefied petroleum gas (LNG) to the two terminals have approached Petronet LNG for taking equity in these terminals, Petronet sources said.

AIMA
NEW DELHI, Sept 30 (PTI) — The All India Management Association (AIMA) has offered its expertise to monitor performance of the small business schools lacking adequate faculty and infrastructure. “The association is ready to work with All-India Council for Technical Education (AICTE).

NSE adds new securities
MUMBAI, Sept 30 (PTI) — The National Stock Exchange (NSE) has added the following new securities to the capital market segment with effect from today. In the physical segment, NSE has included stocks of Infotech companies while in the depository segment the exchange has included Indian Aluminium Company Ltd, the Andhra Valley Power Supply Company Ltd, the Tata Power Company Ltd and the Tata Hydro-Electric Power Supply Company Ltd., the NSE release said.

Alwar Malt
Tribune News Service
CHANDIGARH, Sept 30 — Alwar Malt and Agro Foods Manufacturers Co. Limited is entering the liquor market industry soon. The company manufactures quality brands namely — Saturday Night Premium Whisky, Afghan Rum etc. Major O.P. Yadav, CMD of the group said the company's stress is on quality.

SBI branch
Tribune News Service
CHANDIGARH, Sept 30 — A fully computerised personal banking services branch of the State Bank of India was inaugurated today by the bank’s General Manager (Dev. & Personal Banking), Mr R.C. Agrawala, in Sector-16, Punchkula.