Mustard seed farmers face uncertainty
MUMBAI, Oct 3 — Facing great uncertainty, farmers cultivating mustard crop in the country were contemplating to change the crop as there was no demand for mustard oil due to fear psychosis among people following dropsy deaths and ban by many state governments on sale of loose oil.

Provide help to handloom sector: Ghosh
NEW DELHI, Oct 3 — Market assistance and design development should be provided to the handloom sector to tap its export potential, the Textiles Secretary said here today.“Handlooms have an export potential,” Textiles Secretary Shyamal Ghosh said inaugurating the third annual silk exposition “Silk fab”.

Mustard seed farmers face uncertainty

MUMBAI, Oct 3 (PTI) — Facing great uncertainty, farmers cultivating mustard crop in the country were contemplating to change the crop as there was no demand for mustard oil due to fear psychosis among people following dropsy deaths and ban by many State Governments on sale of loose oil.

According to reports from mustard cultivating areas in Madhya Pradesh and Maharashtra, farmers were apparently distressed over the situation, leading oil traders in the metropolis said.

Though the Centre has asked State Governments to lift the total ban on sale of mustard oil and start testing all edible oils, people were not buying even branded and well packed mustard oil fearing adulteration of oil that had led to dropsy deaths, an oil trader in the city said.

“It will take a long time for people to overcome the “mustard phobia” and start using mustard oil.

Most of the oil traders and retailers have stopped stocking mustard oil. “if there is no buyer for it why should we keep the stock of mustard oil and waste the space in our shop”, traders said.

The ultimate sufferer is the farmer who grows mustardseed. “Since mustard oil attracts a large sector, discouraging mustard cultivation will be a great setback to our efforts in achieving self-sufficiency”, said G.G. Patel, Chairman of Central Organisation of Oil Industry and Trade.

Provide help to handloom sector: Ghosh

NEW DELHI, Oct 3 (PTI) — Market assistance and design development should be provided to the handloom sector to tap its export potential, the Textiles Secretary said here today.

“Handlooms have an export potential even in the Western countries and need an outlet to the urban markets to realise their potential,” Textiles Secretary Shyamal Ghosh said inaugurating the third annual silk exposition “Silk fab”.

Many countries had no quota restrictions for handlooms and India should take advantage of this opportunity to capture new markets, he said adding focus should be on value addition through skill and design inputs.

Although handlooms could not compete with the powerloom sector which depended on volumes, Ghosh said handlooms had their own niche market and even high profile fashion designers could use these heritage skills to promote traditional textiles.

However, product development should be in tune with the market, he said adding Government was providing help to the weavers to identify new markets.

About 35 state handloom corporations and cooperatives from 15 states are participating in the 10-day exhibition organised by the National Handloom Development Corporation which will be displaying a range of silk products covering mulberry, tusar, era and muga.

The exhibition notched sales of Rs 1.20 crore in 1997 and is expected to touch Rs 1.5 crore this year.

Single window helps in industry growth
Tribune News Service

CHANDIGARH, Oct 3 — The Single Window Service launched by Punjab is helping in the growth of industry. Due to this clearance to several industrial projects, involving investment of Rs 400 crore, has been granted.

According to Mr Ramesh Inder Singh, Secretary Industries due to consistent monitoring and a follow up, 3,072 demand notices have been issued by the PSEB to the entrepreneurs for release of power connection between May 19 and September 30.

Out of these 2,113 applications were those which were registered with the Board before June 30. The PSEB has also released 600 power connections during this period as result of follow up under Single Window System.

The Punjab Pollution Control Board has granted no objection certificate and Environmental clearance in respect of 224 cases, while seven have been cleared by the Site Approval Committee under Factories Act. In order to further simplify the system, the cases for Environmental clearance under pollution control and site approval under Factories Act will now be considered by a single committee, he added.

The Udyog Sahayak has officers from several boards and corporations concerned all under one roof to guide the entrepreneurs and to facilitate clearance of their projects.

Timber

JALANDHAR, Oct 3 (PTI) — The Government would soon set up three factories in Punjab for treatment of timber in order to prevent damage to the wood from termites and thus help conserve the increasingly diminishing forest cover. The three plants, to be set up in Phillaur, Mohali and Patiala, one being commissioned by the Punjab State Forest Development Corporation (PSFDC), an official release said here today.

Foreign banks, MNCs luring SEBI staff

The Securities and Exchange Board of India (SEBI) may have succeeded in regulating stock markets in the country by taming price riggers and corporates but it is fighting a losing battle to retain its talented manpower.

Mass exodus of SEBI staff to highly paid jobs at foreign investment banks and multi-national companies is hampering the market regulator’s operations, SEBI chief D.R. Mehta has said.

“Last year, we recruited about 50 persons. Only 40 joined and 15 left later for better jobs,” he said.

He admitted that many people join SEBI only because they fail to get into foreign investment banks. Investment bankers get posting both in India and abroad and is considered top priority for young management students, he says. — PTI

Bitter pill

The Indian sugar industry, world’s largest producer of the commodity, is finding recent policy changes a bitter pill to swallow.

The lowest import duty of 5 per cent coupled with delicensing and reduction in distance between two sugar units from 25 to 15 km may bring about a glut in the market and harm domestic producers, they fear.

While officials describe the policy change as a step forward in the era of free market, the Indian sugar producers are apprehensive about the long-term effect of the government’s move. — PTI

Welcomed

Amritsar-based exporters have welcomed a proposal to start bus service between New Delhi and Lahore made at talks between Indian Premier Atal Behari Vajpayee and his Pakistani counterpart Nawaz Sharif at New York recently.

Hailing the proposal, Amritsar Exporters Chamber of Commerce president Davinder Singh said, besides the passenger bus service, the Wagah route should also be thrown open for trade purposes. The current volume of exports from here to Lahore is around Rs 500 crore per year which “can be doubled if trade is allowed through the road route,” he claimed.

Fresh vegetables which are in great demand across the border can only be exported through the road route because trade through the rail route was not being held on a daily basis and depends on the availability of wagons. — PTI

HRD

The government should make it mandatory for large and medium companies to invest 1.5 per cent of their annual turnover on human resource development to enhance their productivity, production and competitiveness, Mr R.L. Bhatia, head of Mumbai-based Centre for Change Management has said.

Australian companies were doing this and if they did not invest in training, they had to deposit the money with the government.

Mr Bhatia noted that CEOs in large enterprises were becoming sensitive to human resource needs of their employees including training, salary, skill, entrepreneurship development and creativity. — PTI

Bulls

The Tamil Nadu Government is importing 31 bulls from Denmark to boost milk production in the state, state Animal Husbandry Ministry, S. Senguttuvan, has said.

Semen from the bulls, purchased at a cost of Rs 41 lakh with aid from the National Dairy Development Corporation, would be frozen and supplied to all veterinary hospitals in the state to artificially inseminate local cows.

He said the government was also considering a proposal to import high yielding cows from Israel. — PTI

By K. Garima
Negative growth in auto industry

The fortunes of the Indian auto components industry have been on the downswing of late, which is an offshoot of the slowdown in the automotive segment. The industry benefited from the boom in the user segment during 1994-95 and 1995-96.

However, the situation has taken a turn for the worse since then, and the automobile industry has witnessed a negative growth, which in turn has been instrumental in the poor showing by the auto ancillary sector. In anticipation of a growth in demand, the players in this industry had resorted to capacity additions.

The domestic industry in India is comparatively smaller than the ones abroad and fragmented in nature. In the organised sector, on the other hand, there are as many as 300-350 players, and the same is characterised by fierce competition. Notably, the small scale sector comprises more than 6000 players. This industry has been more or less free from competition from major multinationals.

Considering the slowdown in demand on the domestic front, the export market has become almost top priority for some manufacturers. Wheels, gears, fuel injection system, engine parts, engine valves and brake assemblies account for a major chunk of the products exported. The performance of the industry during 1997-98 too was far from satisfactory. Even the leading players in this segment witnessed only a paltry 3 per cent growth rate during the said period. Many players have cut down production and realised that it is now imperative for them to eye the export market.

Asahi India

A joint venture company which was promoted by Maruti Udyog Ltd (MUL), Asahi India Safety Glass Ltd (AISGL) is a distinguished company has been a satisfactory performer. The company benefited substantially from an announcement by the Government in March 1996, requiring all car manufacturers to use only laminated windshields instead of tempered windshields. Notably, the former are 2-3 times more expensive. In view of this, the company expanded its capacity for laminated windshields from 1 lakh pieces per annum to 7.5 lakh pieces per annum. Moreover, it also increased its capacity of tempered windshields to 6.5 lakh per annum. Despite the slowdown in the user industry, the company has been a satisfactory performer.

Bharat Gears

Bharat Gears Ltd (BGL) manufactures gears for axles and transmissions. Moreover, the company also specialises in erectioning and commissioning of heat treatment furnaces for gas carburising. It enjoys strong presence in the OEM market with a leadership share of 85 per cent. The company’s recent performances have been disappointing.

The company benefits from the fact that almost half of its sales are directed to the tractor industry (which has experienced good growth), and thus, BGL is expected to be more or less unaffected by slowdown in the automobile sector. Considering the likely growth of 15 per cent in the tractor industry and excellent export potential, the company appears to be in better stead than its contemporaries.

Wheels India

Wheels India Ltd (WIL) is recognised as the largest manufacturer of wheel rims in the country (41% stake). The company operates from its plants at Padli, Tamil Nadu and Rampur, Uttar Pradesh. Dunlop, UK its technical and financial collaborator holds 36 per cent of the equity. WIL is a market leader with about a 70 per cent market share and caters to OEM customers like Telco and Maruti. The company wishes to enhance its export prospects and in this regard, the company has plans to increase its distribution network in the USA and the UK so as to make full use of the excellent export potential of certain types of products like tubeless wheels (for commercial and heavy vehicles), wire wheels (for fast movers) and heavy wheels (for earth movers).

Goetze India

Goetze (India) Ltd (GIL) is engaged in the manufacture of piston rings, pistons, cylinder liners, grove inserts, sleeves and high alloy cylinders. GIL also owns solvent oil extraction and leather garments units. The company plans to reap benefits from core competencies. As pistons contribute over 50 per cent of its total sales, the company plans to consolidate on its market position on the domestic as well as its export front. It has forged alliance with T&N Plc of UK and Telkoku Piston Ring of Japan to manufacture steel piston rings. The new venture will be located in Bangalore. The company’s new venture will roll out 10 million rings per annum by 2004.

By R.N. Lakhotia

Q: I am a bank employee and a member of Employees Coop. House Building Society Ltd. I have paid a sum of Rs 44000 (in F.Y. 97-98) to Society on account of 15 per cent earnest money of cost of land to be allotted by Housing Board to Society for construction of flats for its members. Kindly advise whether I am eligible to get rebate U/s 88 to the extent of Rs 10000 on this earnest Money.

— Ashok Kumar Gupta, Malerkotla.

Ans: On the facts stated by you, you will be eligible for tax rebate U/s 88 of the Income-tax Act in respect of payment made by you for purchase or construction of the residential house under the cooperative society of which you are the member. The maximum eligible amount for such tax revate is Rs 10,000. The rate of deduction would be @ 20 per cent.

Q: 1. I have raised loan from Canara Bank for the construction of flat at Sector 48 on the land given by Chandigarh Administration. The bank is charging interest on the loan release to me. Is the amount paid towards the interest to Canara Bank for raising loan does not qualify for tax rebate?

2. Is leave encashment prior to retirement is exempted from Income-tax as per Rule 5.2 (4) of Income Tax Act, 1961.

— Swatanter Sehgal, Chandigarh.

Ans: The loan taken by you for the purposes of construction of the flat will be allowed as a deduction while computing your income from house property. The maximum amount which qualifies for deduction on account of interest on loan is to Rs 15,000 in case the flat is self-occupied. Reversely, if the flat is given on rent, then you are eligible to claim entire interest payment as a deduction from the rental income.

The amount in respect of leave encashment is exempt in Income-tax at the time of retirement and if the leave encashment is for earlier years other than the year of the retirement the same will be liable to Income-tax.

Q: While replying to a question on rebate on Investments in GPF, PPF, LIC, NSC etc on 22 Dec. ‘97, it was stated that maximum that can be invested in these schemes is Rs 70,000 and rebate @ 20 per cent is Rs 14,000 which to my knowledge is not correct. The correct limits are Rs 60,000 and Rs 12,000 respectively.

Would you kindly enlighten about the correct position quoting the authority under I.T. Act.

— Thakur Prem Singh Vimal, Mandi (HP)

Ans: The maximum deduction U/s 88 of the Income Tax Act, 1961 for the Assessment Year 1998-99 is @ 20 per cent on the maximum amount of Rs 70,000. Thus, the maximum tax rebate which can be availed by a person is Rs 14,000. However, please note that the maximum amount which can be invested for the purposes of claiming the maximum tax rebate as per section 88, namely Rs 70,000 also covers the investment by way of equity shares or debentures forming part of any eligible issue of capital as also the units of mutual fund, etc. as approved by the Board in addition to the investments in GPF, PPF, LIC, NSC, etc.

Q: I am an engineer by profession and working with Punjab Government on “contract basis”. (Contract is not time bound but regular) on a “consolidated pay” of Rs 9,000 per month. The total income I have received from December ‘97 to Feb. ‘98 is Rs 27,000 only.

How much tax or at what rate I have to pay tax and if I buy NSC of required amount, then also the tax will be deducted at source or what is the procedure, so that tax may not be deducted at source?

— Kanwar Sukhjiv Singh, Patiala.

Ans: On the facts stated by you the question of payment of any Income-tax on your total salary does not arise. Hence, you are not required to make investment in NSC because in case the tax payable by you for the above period will be nil.

Q: A teacher junior to me was getting more pay than me. So I, through court, get my pay done equal to that of junior. Also I was awarded arrears of Rs 15,000. Please let me know, is this arrear taxable or not.

— Jaswant Kaur, Patiala

Ans: The arrear salary received by you is taxable. You will be required to pay Income tax on the arrear salary by including the same in your income for the year in which such arrear salary has been received. You have also got the option to get the arrear salary taxed in different years in terms of Section 89 of the Income-tax Act, 1961.

By A.K. Sachdeva

Q: While filing the sales tax returns certain sales were inadvertently omitted from being declared. However, the omitted sales were duly accounted for in the account books and that these facts were explained to the assessing authority at the time of hearing of the assessment case. The assessing authority, however, proposed to impose penalty on the ground that there was a concealment of turnover. Kindly advise.

— Surinder Pathak

Ans: Simply because some sales were not declared in the periodical returns as a result of some mistake, it does not constitute a valid ground for the imposition of penalty taking it as a case of suppression of turnover. It has been consistently held by the Supreme Court that where the transactions are accounted for in the books of account but are not disclosed in the returns, the question of concealment of turnover does not arise. The fact that the turnover was entered in the regular books of account is a sufficient proof of the innocence of the queriest and therefore the simple mistake of not declaring these transactions in the salex tax return with the assessing authority cannot be regarded as a case of concealment of sales turnover so as to invoke the penal provisions.

Q: We are engaged in the business of purchase and sale of fire-wood being a registered dealer in the State of Haryana. Kindly clarify if fire-wood attracts sales tax at the first point of sale under the Haryana General Sales Tax Act, 1973?

— G.K. Sharma

A: According to the amendments which were carried out in 1997 only timber and timber products were brought into the net of first stage taxation. However, fire-wood neither falls in the category of “timber” nor within the scope of the entry “timber products” and therefore this item does not attract sales tax at the first stage. It has been held by a Division Bench of the Supreme Court of India in the case of Mukesh Kumar Aggarwal & Co v. State of Madhya Pradesh and Others, (1988) 68 STC 324, inter alia, that “in its popular sense, “timber” is understood to be “imarathi-lakdi”.

In a popular sense “timber” has certain association of ideas: as to its size, stability, utility, darability, the unit or measure of quantity and of valuation, etc.” It was also held the subsidiary parts of the tree sold in heaps after “ballies” and “poles” are separated cannot by any stretch of imagination be regarded as “timber” and that persons conversant with the subject-matter will not call these wood-heaps “timber” whatever else the goods might, otherwise, be.

By Praful R. Desai
Additional accommodation

Q: Simply because at one point of time the landlord for some economic stringencies or for different reasons has let out his building, would it justify the stand taken by the tenant in dismissing the ejectment petition?

Ans: Himachal Pradesh H.C. expressed the view thus in the case of Mohan Lal Aggrawal v Kali Ram (1998 (1) R.C.J. 539).

The tenant in the present case is not the judge of the requirements of the landlord or of his son for which the landlord alone is the judge. It is for the landlord to see which accommodation is needed for himself and his family, for the married son and the family and in case there are more than one married son, which part of the premises have to be allotted to whom.

The landlord has succeeded in securing ejectment of tenants from this building of which the tenanted premises forms part. The premises got vacated from other tenants are under extensive repairs and renovations and the landlord desires and intends to shift in those premises after completion of repairs. It has been stated in reply that his son and he himself would shift to these premises together on the completion of repairs.

The landlord has stated that the business being carried out by him and his son is joint. The fact remains that the married son for whose benefit the petition has been filed, is already in occupation of some accommodation in the premises and it is a case of providing additional accommodation in order to meet the existing needs in view of the status of the family.

All the three children of Aggarwal, the married son of the landlord have grown up. They were in the age group of 15, 16 and 17 years when the petition was initially filed. The daughter stands married but has returned to her parental house because of some matrimonial problems and is residing with them for the last more than two and half years.

For the reasons above, the H.C. held that no case has been made out for interference nor any subsequent event has been established which disentitles the landlord in seeking the ejectment of the tenant.

In that way, this revision application was dismissed.

George Fischer

Ever heard of this engineering company? No! Well, chances are, you will hear of it soon enough if a big Calcutta based broker has his way. With an equity base of merely Rs 1.5 crore, the floating stock of this company is abysmally low, making it a sitting duck for a cash rich bull operator like the abovementioned broker to ignite its share price. Watch the action at this counter as it unfolds, or better still, consider joining the action like many BSE operators have.

Nocil

After currying favour with the domestic financial institutions to edge out the Royal Dutch Shell Corporation from the company half a decade ago, the Mafatlal’s (AMG group) are now desperately looking around for someone to take-up a controlling stake in Nocil. The grapevine has it that the Reliance group considered the proposition for a while before dismissing it as infeasible. The rumour doing the rounds now it that the Shell group is being approached again. The wheel seems to have turned a full circle!

TN Newsprint

Proudly referred to as a zero-stock in the none too distant past, this PSU which was well received by the investing public at the time of its public issue, had fallen on bad times on account of the reduction in customs tariffs on newsprint and paper. However, its shares are slowly but steadly being accumulated by a BSE broker who is known to be close to certain influential members of the ruling party. Is there any move in the offing to raise tariff barriers?

Reckitt & Coleman

The concluding lines of a recently tabled FII research report on Reckitt & Coleman read thus: The company plans to resort to rapid indigenisation of raw materials, which could prove beneficial for its future prospects. It should also benefit considerably from the reduction in corporate taxes. Being a zero-debt company, Reckitt & Coleman (India) has a greater scope to raise funds for further expansion or modernisation. Backed by strong parental support, it now appears poised for excellent growth in the future. The same render its medium to long term prospects encouraging and investors with a long term perspective could consider investing in this scrip. Anyone interested?

Hindustan Zinc sales up 27 pc

NEW DELHI, Oct 3 (PTI) — Public sector Hindustan Zinc Ltd (HZL) has reported Rs 1,233.74 crore in sales, a growth of 27 per cent in 1997-98 while profit before tax has reached an all time high of Rs 201.77 crore. The company has also announced a dividend of Rs 16.27 crore, which is 2.3 times more than the previous year, HZL statment said today. Addressing shareholders at the 32nd annual general meeting (AGM) K.V.K. Seshavataram, HZL Chairman and Managing Director said, the company achieved zinc metal production at 1.36 lakh tonnes while exports of concentrate was 1.19 lakh tonnes valuing $ 30.24 million. HZL is expanding two of its existing electrolytic zinc smelters by 20,000 tonnes per annum (TPA) to be completed by end of next financial year. Feasibility work is in progress to set-up one lakh TPA green field electrolytic zinc smelter. The company is also contemplating to initiate action for second phase commissioning of Rampura Agucha Mines (Rajasthan) expansion plan for additional capacity of 1,500 tonnes per day during current fiscal synchronising with new zinc smelter requirements.

NHPC nets Rs 299 cr profit

NEW DELHI, Oct 3 (TNS) — Power Minister P.R. Kumaramangalam today received a Rs 15 crore cheque as dividend of the National Hydro-Electric Power Corporation (NHPC) for 1997-98. The cheque was presented by NHPC Chairman and Managing Director Yogendra Prasad, who said the corporation had been paying dividend to the Government regularly for the past few years. During 1997-98, NHPC made a net profit of Rs 299.42 crore, the sales turnover of the corporation during this period was Rs 1123.48 crore. NHPC is supplying power from seven operating power stations to 15 beneficiary States/Union Territories. During 1997-98, these stations generated 8815.76 million units of power against the target of 7710 million units. However, the major highlight of the year was the start of commercial operation by 480 MW Uri Hydroelectric Project in Kashmir valley.

BRPL signs MoU with IOC, OIL

GUWAHATI, Oct 3 (PTI) — The Bongaigaon Refinery and Petrochemical Limited has signed a memorandum of understanding with the Indian Oil Corporation Limited and the Oil India Limited for import of crude by 2001. The MoU also proposed to set up a joint venture company with a downstream oil major for marketing and distribution of petroleum products, the BRPL Chairman and Managing Director, B.K. Gogoi, said at the recent annual general meeting of the company.

Sudarshan Chem to pay 30 pc

CHANDIGARH, Oct 3 (TNS) — Sudarshan Chemical Industries Ltd, Pune has posted an impressive result for the year ended on March 31, 1998 beating the current recessionary trend. Sales and other income stood at Rs 240.06 crore as against Rs 210.74 crore for the previous year showing an increase of 9 per cent. Net profit after tax amounted to Rs 9.49 crore as against Rs 7.18 crore for the previous year. Profit after tax rose remarkably from 4.78 crore of last year to Rs 6.25 crore registering an increase of 31 per cent. The shareholders have approved higher dividend of 30 per cent on the share capital of Rs 6.92 crore.

Torrent Guj Biotech downgraded

NEW DELHI, Oct 3 (PTI) — The Investment Information and Credit Rating Agency (ICRA) has downgraded the ratings for partially convertible debenture (PCD) programme of Torrent Gujarat Biotech Limited (TGBL) from LBBB indicating moderate safety to LBB-showing inadequate safety. The ability of the company manufacturing Penecilin-G (Pen-G) for timely payment of interest and principal is likely to be affected by adverse business circumstances, ICRA said in its current report. Domestic manufacturers of Pen-G were badly hit by excess supply resulting in lower price realisations, ICRA said. Even though Pen-G was on negative list of imports, firms were allowed to import bulk drug from under advance licence solely for making antibiotics for exports.

Gold rises
NEW DELHI, Oct 3 (PTI) — Gold prices shot up on the bullion market today on brisk festival buying by local dealers along with jewellers and closed with notable gains. On the other hand, silver was down on reduced offtake as most of the buying was in gold. Marketmen said gold was firm on reports of a rise in its prices in the international markets. The quotations: Silver .999 (ready) 7735, delivery 7725, coins buyer 11.100 and seller 11,200. Standard gold 4410, ornaments 4260 and sovereign 3650.

Bidi
PUNE, Oct 3 (UNI) — Bidi manufacturers in Maharashtra have closed shop to protest a new minimum wage structure prescribed by the Government for workers. Maharashtra Bidi Udyog Sangh president Sudhir Sable told reporters today that paying workers Rs 44.60 for every thousand bidis rolled would make their bidis costlier vis-a-vis that from other states.

Exhibition
CHANDIGARH, Oct 3 — Upper House Network of New Delhi today organised an exhibition-cum-sale for introducing its range of home accessories and gift items under brand name ‘English Alphabets’. These items includes glass vases, decoratives ceramics, wooden wall cabinets, photo frames, cushion covers and home furnishings etc at competitive rates. It exports these items to Europe and North America. The exhibition will continue upto October 7 at Aroma Hotel.

Ship
KOCHI, Oct 3 (PTI) — The country’s first double hull oil tanker, built by public sector Cochin Shipyard Ltd (CSL) here for the Shipping Corporation of India (SCI), was formally launched today.

Office-bearers
CHANDIGARH, Oct 3 (TNS) — The following were elected the office-bearers of the Ludhiana Stock Exchange Association Limited: president — Mr Vishwanath Dhiri; vice-president — Mr Tribhavan Singh Thapar. Other elected members are Mr D.P. Gandhi. The Board meeting was chaired by the outgoing President, Mr Jaspal Singh.