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April 30, 2001, Chandigarh, India   
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TELECOM FACTFILE
When economists go wrong
2-acre strawberry yields Rs 2 lakh Infosys, Reliance ‘best’ India fourth largest economy |
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Nepal rejects India’s passport proposal
Radical changes ahead
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TELECOM FACTFILE New Delhi, April 29 Telecom analysts, however, point out that there is more to it than meets the eye. To begin with TRAI under the Chairmanship of Justice S.S.Sodhi was not in favour of allowing basic telecom operators to provide WiLL technology. It was sometime in October last year, that a decision was taken at the highest level to introduce limited mobility in the country. The sequence of events after this unfolded in such a way that at every stage the new policy found favour with the policy makers. DoT and TRAI, now with a new Chairman and several new members, moved with lightning speed to make the introduction of the new policy a reality. On January 25, this year Mr Ram Vilas Paswan announced the guidelines for the basic service operators. It was here that he disclosed the decision to permit the use of subscriber hand-held set in WiLL technology, limited in local area. The Minister said the decision was taken on the recommendations of TRAI and recognising the theme of NTP-99 for provision of world class telecommunication availability of affordable and effective communications for the citizens. Surprisingly, the very next day HFCL and Shyam Telecom announced the launch of limited mobility services in Punjab and Rajasthan. On January 29, Do T began accepting basic and limited mobility applications and by March-end the government had accepted around 140 applications. The players included the Reliance, HFCL, the Tatas, and Bharti. Interestingly, these players have stakes in both cellular and basic services. The proposal to introduce limited mobility led to trading of charges between those opposed to it and those in favour of it. The two groups mustered the support of several states to fight their case. Several Chief Ministers obliged and wrote letters to the Prime Minister. The Opposition and even some leaders from within the Sangh Parivar charged the PMO with meddling with the telecom policy and bending it to favour basic service operators. Such was the nature of allegations, some Congress members like Priya Ranjan Dasmunshi put the scam at around more than Rs 10,000 crore, that top officials of the PMO, Mr Brajesh Mishra and Mr N.K.Singh came out in public to defend their position. The two officials said the decision was based on the recommendations of TRAI, the NTP-99 and the Parliamentary Standing Committee on Information Technology. “The DoT on the basis of the recommendations, and after considering the issues in the full, the Telecom Commission took the decisions with the approval of the Minister for Communications, to permit limited mobility to basic service providers”. What they did not say was that if the matter was so transparent then why did the Prime Minister take the initiative to form a Group of Ministers under the Chairmanship of Yashwant Sinha to look into the matter afresh. While the GOM-IT was at work, the various lobbies representing the basic telecom operators and the cellular operators left no stone unturned to press for their respective causes. Overnight consumer groups, which were hitherto unknown, surfaced championing the cause of WiLL and its potential in increasing teledensity. Market sources pointed out that Reliance had emerged as an aggressive telecom player, pushing to the hilt the cause of WiLL. The reason ascribed was that they missed the cellular revolution and were seeking to make up for the lost opportunity. The company has already laid down an optic fibre network of more than 10,000 km across the country, primarily aimed at providing basic telephone services and limited mobility through WiLL. According to telecom analysts, the reason for such aggressive lobbying by both sides is the government’s decision to permit basic service providers to use the spectrum for carrying out their services for a song. The spectrum is worth between Rs 9,000 and 13,000 crore, which is being offered virtually free to the basic service operators. With so much at stake, the Opposition has alleged that huge money bags have changed hands at various levels. It will be only after the WiLL technology comes into being will one know the exact ramifications of the decision. Will the poor man’s mobile, whose handset alone costs around Rs 10,000, will be so cheap as claimed? Will the basic service operators be able to offer cheap telephony in the wake of the Group of Minister’s recommending a sharp cut in the proposed revenue sharing agreement? (Concluded) |
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When economists go wrong
Washington, April 29 Despite poor track records, both professionals continue to ply their wares, enjoying prophet-like adulation when they are right and blaming God himself when they’re wrong. After all, both are inexact sciences, but with one main difference. When a meteorologist forecasts inclement weather, the weather does not react to his ruminations. But when an economist even mentions the word recession, darkly dubbed the ‘R’ word by those on the job, people start to hide wallets under beds and things take a nasty turn. In fact, any negative mutterings from economists tend to make matters gloomier than they would have been had the offending forecaster just kept his mouth shut. And so, when the International Monetary Fund on Thursday launched the World Economic Outlook, its twice yearly look at prospects for gobal economic growth, it came as no surprise that its predictions were vastly different from those it made last September. So, different that the word ‘U-turn’ comes to mind. When it took the pulse of the global economy last September, the IMF said the outlook was the best in a decade. The lender credited the world’s good fortune to “the continued strength of the US economy, a robust expansion in Europe and a nascent — albeit fragile — recovery in Japan.” Now, just a little over six months later, the IMF’s latest WEO admits that “prospects for global growth have weakened” and that the “outlook remains subject to considerable uncertainty and a deeper and more prolonged downturn is clearly possible.” So much for the best outlook in a decade. The report notes that now the American economy is teetering on the brink of recession, Europe has slowed and done precious little to boost growth and Japan, stagnant for a decade, is still best described in words the fund steers clear of: in the toilet.
Reuters
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2-acre strawberry
yields Rs 2 lakh
Moga, April 29 Nachhattar Singh of Nandgarh imported 500 strawberry plants from the USA, applied Israeli drip irrigation technology and decided to set up a green house in his small holding. Success, of course, did not come on a platter. But grit and perseverance helped Nachhattar overcome the early obstacles and he earned Rs 2 lakh from two acres of strawberry fields. Nachhattar Singh has now brought nine acres of land under kinoo, five acres under peach and four acres under malta cultivation. He is now thinking of growing strawberries on five acres next season. Only last year, he decided to bring two acres of land under strawberry cultivation for which he imported 50,000 plants from California at the rate of Rs 7 per plant. Strawberries are transplanted between September 1 and October 15. The harvest time is after mid-January. The yield per acre on his land was between 100 and 150 quintal, a feat he ascribes to the improved Israeli drip irrigation system for which he had spent about Rs 1.80 lakh. He said that last year due to severe heat in the month of June, seedlings of strawberry were completely destroyed or damaged. He had again imported 30,000 plants from California and replanted on an acre of land. Each strawberry plant will give 25-30 saplings and these will be sufficient to meet the requirements to bring five acres of area or more under cultivation from the next season, Nachhattar Singh said. Nachhattar Singh says that there is no marketing problem for strawberry. There is a great demand for the fruit in Delhi, Amritsar and also in the Muktsar, Bathinda, Ferozepur, Kotkapura, Faridkot and Moga markets, he added. He said that each 2 kg packing of strawberry cost Rs 100. In order to save and protect the strawberry plants from summer heat Nachhattar has decided to establish a green house so that in future plants could be saved and there will also be no need of importing them from California. The advantage of strawberry is you get the crop after four months whereas for other fruits like kinoo, the crops come after five years with the earning of Rs 90,000 per acre. Nachhattar Singh also started almond cultivation last year bringing a two acre area under its cultivation but the crop was damaged due to waterlogging.
PTI
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Infosys, Reliance ‘best’ London, April 29 The survey by a leading financial magazine, ‘FinanceAsia’ was conducted among leading international analysts and investment decision makers during the first quarter of the current calendar year. Infosys, according to the survey, picked up the most votes in three categories, though not, ironically, in the area of e-commerce, where it came second, next to ICICI. It won rave reviews for its corporate governance, transparency, skilled management and corporate culture. These factors have enabled it to keep key personnel in a competitive environment, increase revenue and profitability and enhance shareholder value, the survey said. The survey was undertaken for four broad categories — best managed company, best in investment relations, commitment to shareholders value and best e-commerce strategy. In the “best managed company” category, Infosys and Reliance were ranked first and second. “Best managed company” was the most comprehensive category in which respondents were asked to name the company that had shown consistently high quality management decisions and was best at strategic implementations. For “best e-commerce strategy’ ICICI, India’s second biggest lender and the first Indian company to list on the New York Stock Exchange, came first followed by Infosys, HDFC Bank, Wipro and Hindustan Lever. The survey, conducted via e-mail, fax and web, covered the performance of the top companies in 10 countries in Asia. Each response had complete contact details of the respondent. Self-nominations and other extraneous votes were rejected, the survey said. Similarly, Reliance and Hindustan Lever were selected as the “World’s 100 best managed companies’ by Industry Week, a leading US magazine. Industry Week ranked Reliance for the second consecutive year as one of the ‘World’s 100 best managed companies.’ Other companies to follow in the list of “best managed company’ were HDFC Bank, Hindustan Lever, ICICI and Ranbaxy Laboratories which were ranked at the third, fourth, fifth and sixth slot. Tata Iron and Steel Company, Satyam Computers and Wipro were placed at the seventh rank. In the “best in investor relations” category, HDFC Bank was ranked third followed by Hindustan Lever, ICICI and Wipro at the fourth position. Ranbaxy Laboratories, Tata Iron and Steel and Zee Telefilms were ranked at the fifth slot. In the “commitment to shareholder value” category, the other companies to follow at the fourth rank were Hindustan Lever, Ranbaxy Laboratories and Wipro. Tata Iron and Steel took the fifth place. In the “best e-commerce strategy” category, HDFC Bank came third while Wipro was fourth. Hindustan Lever was ranked fifth while Reliance came sixth. Five companies — Tata Iron and Steel, Satyam Computers, Zee Telefilms, NIIT, Rediff.Com -jointly got the seventh position.
PTI
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India fourth largest economy Washington, April 29 India’s PPP gross national income in 1999 was $ 2.23 trillion against $ 8.88 trillion of the USA, $ 4.45 trillion of China and $ 3.19 trillion of Japan, the indicators issued by the World Bank said. India’s per capita in PPP increased from $ 2,06 in 1998 to $ 2,23 in 1999, and PPP gross national income from $ 2.02 trillion to $ 2.23 trillion in 1999, the 396-page publication said. Other countries in the trillion dollar league in PPP in 1999 were: Germany ($ 1.93 trillion) France ($ 1.35 trillion), the UK ($ 1.32 trillion).
PTI |
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Nepal rejects India’s passport proposal Haj operations from India to Jeddah and back from January 27 to April 8, 2001 were less cumbersome this time. Providence and concerted efforts by the agencies concerned, particularly by Air India and its officials, were responsible for it. As many as 168 flights were operated from eight cities. About 71,000 pilgrims were carried on these flights. This was more than twice the number of passengers (30,900) were transported in 1995. Air India was the key player in these operations. It carried as many as 51,115 pilgrims on six chartered Lockheed L-1011 aircraft. Hyderabad was the new uplift point. Last year, the centres added were Ahmedabad and Kochi. A large Haj terminal, measuring 3,155 square metres was established by the Airports Authority of India. As much as 38 per cent of the total number of Haj pilgrims took-off from IGIA. The terminal, among other facilities, had a 320 square metre prayer hall. It costs the AAI 2.35 crore. For visitors, a covered shelter with toilets was established. Even this concourse had a prayer hall. Many agencies, government and non-government, operated from there to help visitors as also the pilgrims. At Jeddah, a new ground handling agent was appointed on the recommendation of the Indian embassy. From time to time, Air India officials were deputed on flights to help pilgrims. There was special fare for the pilgrims and they all were provided gifts. Passport to security The news that Pakistan diplomat Arshad Cheema has been linked to hijacking of IC-814 has not come as a surprise. He was a key player in the operations. The Indian Government should have dealt with him then and there. But it waited for many months until he was hauled up with 16 kg of RDX in Kathmandu. This quantity of RDX is more than sufficient to destroy entire Nepal. The Pakistani diplomat has been expelled from Nepal. Cheema’s arrest and expulsion is only a tip of iceberg in Nepal, which is a centre for many illegal activities. India had made a proposal for the introduction of passport from October 1, 2001. But it was not translated into reality as the Nepal Government did not accept India’s proposal. The mere identification document, like, driving licence, is not good enough to establish bona fides of passengers. |
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Radical changes ahead There was another black Friday last week, and it washed off almost 30 per cent of the gains that the market had made during the last two weeks. The market was plainly reacting to the proposed changes in the stock market structure and operating norms which are likely to be introduced on July 2 this year. The stock market is being restructured so radically that almost 80 to 90 per cent of the existing structure is likely to be replaced. The stock exchanges will be converted into corporations and the brokers will not have any control over their operations. As the SEBI group on rolling settlement has recommended (this is likely to be implemented with effect from July 2), all scrips which now have “badla” facility will be moved to “rolling” mode of operation in the stock market. There will be no badla, no ALBM (Automated Lending and Borrowing Mechanism), no BLESS (Borrowing and Lending of Securities Scheme). Under the proposed system, the outstanding position which has not been squared off at the end of the trading day would have to be compulsorily settled by giving or taking deliveries five days later on the T-5 basis. In other words, all transactions will be, more or less, cash transactions. SEBI is keen to provide speculative mode of trading in the form of futures and options only which at present are available in the form of Index trading. But it may be allowed in the case of some select scrips. So trading in derivatives will replace the present badla-based trading. The initial reaction to the proposed changes is very nagative. It is also conceded that initially, volumes will fall and it will take considerable time for the market and the traders to get adjusted to it. The new structure of the stock market is, of course, bound to be more open and transparent, less vulnerable to manipulation and unpredictable violent fluctuations in the market. It will also take time for the emergence of strong bulls in the market; at present the FIIs are the only “buyers” with large financial resources in the market. But no bulls can operate without the bears. It may be that the FIIs turn “sellers” in a rising market, particularly in the months of November and December when the FIIs have to close their accounts. I do not expect the market to make any substantial gains till July 2, and then it will have to make adjustments with the new system. It is possible that during the next two months, some changes may be made in the proposed restructuring of the system. It appears that during the current year, there are greater chances of the market moving down than of moving up. Even if it maintains its present position, it would be a good omen. According to a report in a leading financial daily, the net profit of 325 companies, which have declared their annual results so far, is higher by 26 per cent. The infotech companies, however, lead the pack by a big margin. It is, however, very early to assess the performance of the corporate sector from the results announced by only 325 companies, which incidentally are among the top layer of the corporate sector. Some companies have also announced their first quarter results. Hindustan Lever’s first quarter results reveal only a nominal increase in sales (1.1 per cent) but 20.7 per cent higher net profit. Nestle’s first quarter results are better, with 30 per cent higher sales and 41 per cent higher net profit. ABB has announced higher net profit but lower order-book position. Siemens India’s performance is not much to talk about. Glaxo’s first quarter performance is much below expectations. Exide’s net profit it lower by 15 per cent, MICO’s net profit has fallen in its first quarter results. Gillette India’s net profit for the first quarter is only Rs 380 lakh as against Rs 1070 lakh for the corresponding period last year. |
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R.N. Lakhotia Q. My wife’s salary is Rs 1,80,000/- p.a. and no other income is there. How much tax she has to pay by detail calculation. This answer will solve the problem of about 1000 ladies in Nangal and Naya Nangal. S.K. Sharma, Naya
Nangal Ans. For a woman in respect of financial year 2000-2001, tax rebate is permissible to the extent of Rs 5,000. This amount will not be deducted from the taxable income but it is to be deducted from the tax payable by her. In your instant case on salary income of your wife to the extent of Rs 1,80,000/- after deducting standard deduction of Rs 20,000, net taxable income comes to Rs 1,60,000 on which tax and surcharges comes to Rs 25,300. Now from ths amount Rs 5,000 will be deducted on account of tax rebate U/s 88C permissible to a lady, thereby a net sum of Rs 20,300 will be payable by your wife. Now additional surcharge @ 2 per cent will also be required to be paid. Q. I am doing M.D. after M.B.B.S. in a Government Medical College in Punjab. I am getting a scholarship of Rs 8750 + D.A. per month and in lieu of that I have filled a bond that I will not leave the course in between and I will serve the Government for 5 years after completion of the course, failing which I will return Rs 3 lakh. The college authorities are deducting income-tax at source from the payment of scholarship with the explanation that the scholarship paid with D.A. is a salary and it is taxable. Is the scholarship is a salary and taxable? If yes, please mention the clause of Income-tax. If no, may I get the rebate on annual fee paid to college about Rs 20,000, amount spent on books, about Rs 20,000 and amount spent on equipment and study aids. Dr Maneesh,
Chandigarh Ans. Generally speaking, scholarship is exempt from income tax. However, your agreement has to be looked into in detail. If the agreement envisages employer-employee relationship, then the answer may be different. However, you should tell the D.D.O. of Government Medical College that under the Income-tax law as per Section 10, scholarship received is fully exempt from income-tax. You will not be eligible for any tax rebate in respect of annual fee payment to college as also amount spent on books and the amount spent on equipment and study aids, etc. If, however, you have taken loan for pursuing higher studies then you can enjoy the benefit of tax deduction as per Section 80E of the Income-tax Act, 1961. Q. My son is a student and more than 18 years of age. My son has received some gift cheques from my daughter abroad. Please clarify if there is any tax liability for the gifts received. It may also be clarified if there is any tax liability on my behalf on the interest income earned by my major son. N.C. Gupta,
Patiala Ans. There is no liability to gift received by your son from his sister. Please remember that after October 1, 1998, gift-tax has been abolished. |
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Ekta Kapoor New MT centre Inflation up FII buyers
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