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Monday,
March 4, 2002, Chandigarh, India  
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Pressure for
rollback in Budget proposals: FM HOW I STARTED |
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Senior
citizen
Rly Budget: will
promises translate into action?
Markets to remain
bullish Inflation inches up to 1.39 pc New Delhi, March 3 After several weeks of downslide and stagnation in the previous week, inflation rose to 1.39 per cent for the week ended February 16 against 8.49 per cent in the corresponding period a year ago, mainly due to price rise for primary items triggered by increase in price of eggs, meat, condiments and spices.
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Budget hits the salaried class hard One word that can most aptly describe Budget- 2002 is lack lustre. The government claims of the Budget being a growth-oriented one have been scorned by the public- who have been left high and dry. While almost no sops have been provided to the middle income groups , they will now be paying through their nose as essential commodities get dearer and with little relief to individual tax payer. The Budget, it seems, has only disappointed the salaried classes and pensioners. The industrialists feel that objectives in this Budget lack clarity and there is little incentive to make the money flow in today’s stagnant economy. On the agriculture front, the Finance Minister, Mr Yashwant Sinha has reiterated his stand on decentralising the procurement process. For hundreds of thousands of farmers in the states of Punjab, Haryana, Uttar Pradesh, Bihar and Andhra Pradesh, this has once again created confusion. With no other alternatives being announced, the farming community is uncertain about the future of their produce. The middle classes have been hit hardest by this Budget. For one, prices of several essential items like sugar, LPG, kerosene and postal services have been increased, the 10 per cent reduction on tax rebate on savings for those in the income group of Rs. 1.5 to Rs. 5 lakh has added to their woes. This will ensure that the common man finds it difficult to save for the rainy day. And all this inspite of the fact that the Prime Minister has termed the Budget as being “bold” and aimed at getting the economy back on the rails. Dr Harish Khanna, Former Chief Medical Officer of Panjab University rues that the Budget is a shock to the fixed income group, especially the retired pensioners and more so, on the retired non- pension seeking employees. “The only source of income to the retired persons is the interest on their life savings in various so called safe institutions like Public Provident Fund, National Saving Schemes etc. By slashing the interest rates by 0.5 per cent, the government has been hard on us.” He says that the government has instead given concessions to the already financially well-off sections by slashing duty on luxury items, the rise in prices of which would have mattered little to this class. His views are supported by Mr B.K. Sood, retired Executive Engineer (Civil) GREF, who laments that there is no tax rebate on retired persons, who are totally dependent on the interest income from savings or the pension amount. “Rather national security surcharge of 5 per cent has been implemented for all, including the retired persons. Rather than increasing the interest rates, the pensioners will now have to bear this burden.” Mr Sood says that with the prices of essential commodities like LPG being hiked, it has come as yet another blow to senior citizens, who are not using any petrol, as the Finance Minister had tried to justify. He says that the government should rather try to cut down its own expenditure. Ms Mamta Dange, a marketing coordinator, with a private company says that the Budget has ensured that the income tax burden has increased tremendously, especially on salaried classes. This also fails to offer any sops for industrial growth. What could have been done was that the standard reduction should have been increased. Even the tax limit for imposing income tax has remained stagnant as during the past couple of years. The only benefit is that the petrol prices have been decreased by Re 1 and diesel prices by 50 paise. With services like life insurance, insurance auxillary services relating to life insurance, being brought under the net of excise duty and service tax, the bonus to policy holders will be further reduced. Mr R.K. Gupta, a retired officer of Life Insurance Corporation of India said that this will also affect the profitability of LIC. Even the reduction, in rebate from 20 per cent to 10 per cent under section 88 on Insurance premium , will affect the LIC , already reeling under pressure from competition by foreign companies, he opines. Mr Sukhain Babuta, Chairman of Northern India Regional Council Institute of Chartered Accountants of India, says that the Budget is keeping in lines with the radical changes aimed at uplifting the economy and taking it in the right direction. However, it offers little sops for this fiscal year and certainly lacks objectives. The industry is ailing because of a global recession and the Budget pleases no one.
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Pressure for rollback in Budget proposals: FM
New Delhi, March 3 “Allies are putting pressure. We will talk to the allies and explain things to them,’’ Mr Sinha said. He said he was dismayed that the LPG hike was being opposed by a Minister who was part of the 1997 Deve Gowda Government which had set the roadmap for dismantling the administered pricing mechanism (APM) under which the subsidy on LPG was to be reduced to 15 pc. Even after the Rs 40 hike in the price of an LPG cylinder, there remained a subsidy of Rs 55 amounting to 20 per cent, Mr Sinha said. “Today I am initiating some policies. How can I oppose the same policies when they are implemented by some other government,’’ he asked. Asked whether he was hostage to the growing political instability, he said, “I don’t think so. Lots of people were expecting that I would change the Budget.”
UNI
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HOW I STARTED LUDHIANA: If one meets Mr Jagwant Singh Sandhu (32), an electronics engineer by training, who has made a mark in the communication services field in the region, one is impressed by his innovative ideas, forceful dreams and the spirit to carry on; even in troubled waters. His innovative communication service ‘dial in,’ to provide all types of information about the city and its who’s who on phone and through ‘www.dialindia.com’ website has earned a reputation. Under the banner of Sun Network Ltd, he is also involved in making software solutions for national and international companies, distribution of sim cards for mobile operators, and is running call centre for Sedgwick Parekeh and Max- New York Life Insurance and Tata AIG companies. In an interview, he shares his experiences on his adventurous path: How did I start my career? After doing a degree in Electronics Engineering from Pune University, I wanted to enter a white colour profession in communication field. So in 1993, I started my career with Max Paging Service with great enthusiasm. No doubt, my family did not have any experience in this line, as my father was an engineer with the PSEB, but I had a gut feeling to establish communication business in this region. Initially, I worked as a consultant, business associate and a franchise for this paging company. At one time, we used to sell 7000 pagers per month, but unfortunately, with the fast changes in technology, the company had to close down its business. But that stint provided me rich experiences in marketing and an insight into the minds of region’s customers. Later, I worked with Motorola, Essar and finally settled with Spice and set up other communication services. Experiences in this field I had started my career with an initial investment of Rs 4-5 lakh, but the company’s annual turnover has now crossed over Rs 50 lakh within eight years. I still feel that the growth is not according to my expectations. In fact, due to lack of competent manpower, I have not been able to set up call centre to cater to the needs of the big international companies. The local companies have not so far started appreciating this specialised service. I feel they do have money but are little bit reluctant to adopt new communication technologies. It is just a matter of time that they would adopt the services in a big way. We are waiting for this to happen with a cool mind. Our dial in service is already providing service to 1000-1500 callers every day. The revenue from this segment is slowly picking up, and I hope, this would become economically viable soon. What steps should be taken by state government to boost communication services in the state? The new state government should announce it a priority sector at the earliest, and should offer special packages to attract MNCs to invest in cities like Ludhiana, Jalandhar and Amritsar, which have a lot of potential. It can help young entrepreneurs by investing in required infrastructure especially by establishing standard institutes to train youth in these technologies and also in English speaking.The command over the language is must for working in Call Centres. This sector also needs 24 hour power supply, entertainment centres for the employees and above all, a change in the mind-set of bureaucracy, which takes long time to sanction projects. The government would have to take special measures to boost the industry, which can open new vistas for thousands of unemployed youth in the state. What is the scope for new entrepreneurs in communication sector? The youth of the region have an ability to succeed like other successful states including Karnataka, Andhra Pradesh, and Tamil Nadu because “the logics of our youth are very clear.” With professional guidance, proper training and a competency in spoken English language, they can make a mark in the field. The new entrepreneurs should keep in mind, that initially the returns may not be too high, but if they are consistent and are able to launch new innovative products to provide value to the customers, they have a great future. They should learn from experienced persons and should give high priority to the financial matters after starting a venture. (As told to Manoj Kumar — TNS )
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by R.N. LakhotiaSenior citizen Q: I retired from Central Government service on 30.9.1985. I do not file income-tax return being a senior citizen. I want to gift a Maruti car to my granddaughter in her marriage. The amount will be spent from my pension account. The car will be financed out of this finance through State Bank of India. I request you to seek your valuable advice regarding any objection or complications from Income-tax Department in this regard. —
M.R. Vij, Amritsar Ans: There is no objection from income-tax department or any other department on your giving gift to your granddaughter of a Maruti car on the occasion of her marriage. Pensionary benefits Q: I am a retired government officer from HP Government and have deposited about Rs 2,00,000 from the savings ‘retired and pensionary benefits’ under the post office MIS (Monthly Income Scheme). I have also qualified for senior citizenship. (a) Is the interest on PO MIS not subject to TDS (tax deduction at source). (b) Is the interest and maturity bonus of PO MIS eligible for deduction from taxable under Section 80-L. (c) What is 80-L (Section). Please clarify. — Mohan Lal Gupta, Rampur (HP) Ans: The interest income of the monthly income scheme from Post Office as well as the maturity bonus received from the PO would be treated as income in the year when they are received. They would, however, be eligible for tax deduction u/s 80L of the Income-tax Act, 1961. Section 80L grants deduction to the individual tax-payers in respect of income from bank fixed deposit, interest from savings bank accounts, interest from monthly income plan of the post office. The total deduction in respect of these types of interest income is to the tune of Rs 9,000 p.a. Besides, as per Section 80L a further sum of Rs 3,000 is available as a deduction in respect of interest income from government securities.
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by Pushpa Girimaji Rly Budget: will promises translate into action? While presenting the Railway Budget last Tuesday, Railway Minister Nitish Kumar declared the year 2002-2003 as the ‘passenger amenities year’ and said the year was dedicated to the railway traveller. As the year unfolds, one hopes to see some of the promises made in this regard translate into action. Coming to specifics, the Railway Minister announced that he would soon introduce what he called the computer-based ‘Unreserved ticketing system’, to facilitate purchase of unreserved tickets even from locations other than the boarding station. And explaining the need for such a system, the minister made an interesting observation. Out of 13 million passengers who travelled by rail daily, 12 million undertook the journey without any reservation. This brings us to a related issue: the need for more number of unreserved coaches on trains to cater to such passengers and equally important, adequate measures by the Railways to ensure that those who pay for reservation are assured of reserved berths and seats. I say this with particular reference to the entry of unauthorised persons into reserved compartments and the resultant harassment caused to passengers with reserved tickets. In March, 1994, the Railways, in response to a petition filed by a consumer activist had promised the National Consumer Disputes Redressal Commission that from June, 1994, it would effectively prevent the entry of unauthorised persons into reserved coaches. But obviously the promise has remained only on paper. In fact only a few months ago, the apex consumer court came down heavily on the Railways on this issue. Mr Deobrath Chattopadhya, who was travelling from Patna to Delhi in connection with the marriage of his daughter had reserved 15 seats on the Shramjivi Express. However, on entering the coach on the day of travel, he found the seats reserved for his group occupied by those without reservation. With no help from the Railways, Mr Chattopadhya and his relatives were forced to travel standing or sitting on their baggage. Upholding the decision of a lower consumer court to award compensation to the passengers, the apex consumer court said the Railways should have removed the unauthorised persons from the coach and launched criminal prosecution against them. Failure to do so constituted gross deficiency in service. Under Section 147(2) of the Railway Act, any person entering a reserved compartment without authorisation is not only liable for criminal prosecution, but can also be removed from the compartment by any railway servant or any other person whom he may call to his aid. The Railway Minister also announced in his Budget proposal that the Railways Catering and Tourism Corporation would set up water treatment and packaging plants in a phased manner to market packaged quality drinking water under the brand name of ‘Rail Neer’ exclusively for railway stations and trains. The decision had been taken in response to complaints of poor quality bottled water being sold at railway stations, the minister said. I do not know if the minister is aware of this, but the complaints of poor quality water on railway stations relate largely to spurious brands being sold. Of unscrupulous elements picking up discarded water bottles, filling them up with water and recycling them. And that is the main issue that needs to be tackled. Today, since the ISI certification is mandatory for all packaged water, manufacturers as well as the Bureau of Indian Standards have the responsibility of ensuring that any packaged water available for sale and distribution conform to specified standards. So whether Railways sell ‘Rail Neer’ or some other brand, the quality will have to be assured by the BIS. Indian Railways is the biggest consumer of packed water and if they have worked out the feasibility of setting up such plants and are sure that they would save considerable amount of money from packaging purified water themselves, they are welcome to go ahead with the project. But I do feel that the Railways need to concentrate more on ensuring that those who sell water on railway platforms do not sell spurious brands or those without the ISI seal. And if the Railways go ahead with the ‘Rail Neer’ project, they would also have to come up with measures to prevent reuse of discarded bottles and counterfeiting of ‘Rail Neer’ brand. May be the Railways can think of distribution of water in plastic pouches with a small nozzle that cannot be recycled. But then, all this will cost money and hopefully, the Railways will not undertake projects that will in the long run prove to be a burden on the passenger. If the Railways is committed to improving passenger amenities, then it should set up communication links with consumer groups and encourage the growth of specialised groups to represent consumer interest such as railway passengers’ associations. It should also ensure adequate consumer participation in all policy decisions. As a first step, the Railways should nominate consumer representatives on the Indian Railways Catering and Tourism Corporation, which the minister said, had been established to upgrade passenger amenity services on the Railways.
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by Lalit Batra Markets to remain bullish The Finance Minister refrained from the usual rhetoric, presenting a reform-oriented Budget. The stock markets seem to have taken sore to the tougher tax announcements. Also, the fiscal deficit, which slipped below the expected level in year 2002, will continue to slip over year 2003. However, we are positive on the underlying reformist tone in the Budget. Measures such as reduction in subsidy and the pre-budget steps towards divestment lend credibility to the reform process. We believe that the proposed reforms would generate significant benefits over the medium term. The highlights of the Budget are
Reforms take a step forward Continuing the second-generation reforms initiated last year, the government took the next logical step in most of the areas. Dismantling of the Administered Price Mechanism (APM) in the petroleum sector and duty rationalisation were the key initiatives in government's consolidation move. Reforms in the farm sector and thrust on the infrastructure sector were clearly the priority areas, concrete actions on which can be expected over the course of next 12 months. For the first time, the Centre has attempted for a more concerted attempt to involve states in the fiscal reforms process. Short-term growth sacrificed In an effort to maintain the fiscal balance, the FM chose to stick to the old formula of increasing the direct taxes. Such a move, in our opinion, could continue to drag down the near term economic growth as the impact of structural reforms would only be felt in the medium term. Near-term correction expected The disappointments relate mainly to the build-up of market expectations, especially with respect to clarification on the increase in the FDI limits, maintenance of status quo on corporate taxes, and possible concessions for capital markets to attract greater FII interest, removal of dividend tax, capital gains tax. We believe that the budget has therefore broadly disappointed, leading to near term correction. Outlook for the year The loss of the ruling BJP party in the recent assembly elections, we believe, will not alter the government stance towards economic policies. The aftermath of the communal violence close to the re-construction of the 'religious shrine' could, however, add to the nervousness in the markets. In our opinion, the politicisation of this issue has abated, and the repercussions will be minimal. The Sensex had reached 3,700 primarily led by PSUs as well as overall optimism leading up to the general budget. The disappointment of the budgetary proposals and the communal disturbances, in our opinion, will play out in the near term. We are not worried about the correction, in fact, we believe that this would be a significant opportunity for investors to re-enter the markets. Given an expected re-rating of the highest weighted sector, FMCG, our year-end Sensex target is 4,000. Coming Fortnight The market had moved up smartly. We had anticipated a corrective rise, which could go up to 3650. The Sensex faces resistances at 3680 and 3720. The 3680 level is an important retracement level and would provide clues to the direction of the market in the near future. The index has failed to cross the resistance at 3720 twice. The market has supports at 3650 and 3620. A break of 3650 would see the Sensex going down to 3630. Traders should watch the developments in early trading on Monday before taking positions.
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Inflation inches up to 1.39 pc
New Delhi, March 3 The All-India consumer price index for industrial workers (CPI-IW) stood at 467 points in January this year, while the point-to-point change based on CPI-IW dipped by 0.22 per cent to 4.94 per cent for the same month as against 5.16 per cent in December last year.
PTI
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Hero Honda New Delhi, March 3 |
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LUDHIANA: If one meets Mr
Jagwant Singh Sandhu (32), an electronics engineer by training, who
has made a mark in the communication services field in the region, one
is impressed by his innovative ideas, forceful dreams and the spirit
to carry on; even in troubled waters. His innovative communication
service ‘dial in,’ to provide all types of information about the
city and its who’s who on phone and through ‘www.dialindia.com’
website has earned a reputation.
