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Thursday,
March 14, 2002, Chandigarh, India  
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Savings
scheme for employees in offing
No move to
cut STD rates further, says Mahajan Ludhiana
knitwear exports at 1000 cr Promotion
of farm exports must: Kohli India
may push up S. Asia growth: WB
HCL
Infosystems top PC firm |
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Oracle
not to shift centre to China
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Savings scheme for employees in offing New Delhi, March 13 Speaking at a post-Budget session organised by Assocham here, the Finance Minister said such a savings scheme would balance the interests of those for and against the proposal to lower interest rates by 50 basis points. Mr Sinha
sought to dispel the “mistaken notion” that high custom duty regime would benefit industry and fuel economic growth. He expressed disappointment at the uniformed criticism of the proposals whereby the disenchantment was limited to the extent the proposals impinged upon the so-called middle class. Mr Sinha disagreed with the view that the removal of concessions on incomes over Rs 5 lakh was a big blow to the middle class. “My arithmetic shows that out of the 200 million middle class population, barely 3.65 lakh pay income tax on salaries over Rs 5 lakh, and therefore all this hue and cry over withdrawal of tax benefits is completely unfounded”, he said.
Dividend Tax
The Finance Minister said the criticism that the taxation of dividends at the hands of the recipients would be tantamount to double taxation was unfounded. Mr Sinha clarified that the dividend distribution tax was a legacy of the past and double taxation argument was facile because by that logic all incomes at every stage of being earned were subject to taxation.
Subsidies reduction
Regarding the criticism over the reduction in subsidies on kerosene, LPG and fertilisers, the Finance Minister said this stemmed from lack of awareness over the implications of dismantling the subsidy regime. “I am convinced that everybody wants the government to govern firmly with the only qualification that you do it for others but don’t touch me”. This unfortunate attitude, and the demand for tax breaks, Mr Sinha said, was hardly conducive to raising the tax-GDP ratio. “We are considering a savings scheme for the entire salaried class both in government and private sector,” Mr Sinha said. He said the savings scheme was expected to provide relief to those who had been affected by the reduction in small savings rate by 0.5 per cent announced in the Budget. The move can be seen as part of pension reforms, which were spelt out by Mr Sinha in his Budget. The roadmap for the pension sector would be formally announced by June this year. The industry has demanded a three-pillar pension structure — the first pillar for covering the government and PSU employees, the second pillar for private employers and employees and the third pillar would be a voluntary scheme for everyone. It also demanded that tax concession on Rs 10,000 under Section 88 CCC of the Income Tax Act be enhanced to Rs 20,000 per annum. The Finance Minister said small investors would not be asked to pay tax or furnish tax-deducted at source (TDS) certificates after getting dividends from companies. “The notion that those who are out of the tax bracket will be asked for TDS certificates, is a fraud argument. We will not insist on TDS certificates,” Mr Sinha said. He said the government had never asked small investors to go to corporates and collect a TDS certificate.
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No move to cut STD rates further, says Mahajan
New Delhi, March 13 BSNL has estimated the decline in revenue due to the downward revision of tariff at Rs 650 crore. However, the lower tariff is expected to result in a rise in the number of calls and call time neutralising the loss in revenue, Mr Mahajan said in a written reply. The government is not considering any proposal to offload 5 per cent of its equity with BSNL, he said in reply to another question. The government has planned to have a status of about 65.1 million telephone (both fixed and mobile) by 2004 under a perspective plan.
UNI
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Ludhiana knitwear exports at 1000 cr Ludhiana, March 13 These views were expressed by Mr R.N.Sharma, Senior Director, Apparel Export Promotion Council (AEPC), here today. He was in the city to participate in a seminar on Fashion Forecasts in Spring and Summer Season — 2003 in European Market. He said despite worldwide recession, the local knitwear exporters had invested about Rs 70 crore to upgrade their units under quota incentive and Technological Upgradation Fund (TUF) scheme. The exporters were entitled to get 3 per cent additional quota, against their increase in exports to the non-quota countries during the previous year. Under the TUF scheme, the government was providing a 5 per cent subsidy on interest payments for the upgradation of their units. Though there were about 1,000 exporters registered with the local office of APERC, but only about 250 exporters were actively engaged in exports. Some exporters had also opened their offices in Delhi to avail additional quota from that region. Comparing the performance of Ludhiana and Tirupur exporters, Mr Sharma claimed that though total knitwear exports from Tirupur were more than Ludhiana. Officials in APERC pointed out that exports to these countries were to the tune of about Rs 200 crore during that period, but only Rs 80 exports have figured in the statistics due to change in policy. Further, the knitwear exports worth about Rs 200-250 crore have been routed through Delhi by the local manufacturers so the total exports have crossed Rs 1,000 crore during the previous year from Ludhiana.
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Promotion of farm exports must: Kohli Chandigarh, March 13 While presiding over the meeting, Mr S.S. Kohli, CMD, Punjab National Bank, said a new bill on banking sector reforms is proposed to be introduced in Parliament to strengthen creditors’ rights through foreclosure and enforcement of securities by the banks and also to enable
scrutinisation of money locked up in long term loans. The promotion of agriculture exports is important for creating conditions for providing remunerative prices to farm produce. For this purpose, agri export zones are being promoted in different states and 15 such zones have been approved so far. The priority sector advances during this period in Punjab grew by Rs 916 crore from Rs 8803 crore as at December, 2000 to Rs 9,719 crore as at December, 2001. Referring to advances to SSI during this period, it had shown an increase of Rs 234 crore to Rs 3,617 crore as at December, 2001 thus showing a growth of 6.9 per cent. Mr P.N. Khurana, General Manager, Punjab National Bank and Convener, SLBC (Punjab) apprised that implementation of the government sponsored programmes in Punjab is on top priority. Mr Y.S. Ratra, Chief Secretary, Punjab, said the economic scenario is changing due to the liberalisation and modernisation in the fast-changing economic conditions. The economic growth of Punjab has shown a moderate growth during 2001-2002. This is due to the substantial growth rate in the agriculture sector as compared to the growth observed last year. Mr T.R. Sarangal, Director, Department of Industries & Commerce, Punjab, Mr Jaspal Singh, Director, Institutional Finance & Banking Punjab, Mr A.K. Bhargava, General Manager, PNB, other representatives from RBI also participated.
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India may push up S. Asia growth: WB
New Delhi, March 13 “GDP in the South Asian region increased by 4.3 per cent in 2001, up from 4 per cent growth in 2000. The region is expected to recover modestly this year with an average growth rate of 4.9 per cent, and thereafter remain at a rate around 5.3 per cent”, the bank said in its latest “Global Development Finance” report. According to the report global economic slowdown was exceptionally deep and broad, as the deceleration in growth rates has been equally rapid for both rich and developing countries. Distribution of FDI in the South Asia region was almost proportional to GDP with 75 per cent going to India and around 10 per cent going to Pakistan and Bangladesh. FDI in India increased by a full $ 1 billion in the year to reach $ 3.3 billion. However, the report pointed that despite a 35 per cent rise in FDI to the region at $4.2 billion in 2001 from a year ago period, FDI in the region was small, only a 0.5 per cent of GDP. Low FDI flow into the region reflects “little progress in privatisation, glacial industrial regulations and slow reforms in the labour market”, it said. Hit by global slowdown and post September 11 fallouts, merchandise exports of the South Asia region nose-dived to 1.1 per cent in 2001 as against a robust growth rate of 12.3 per cent in 2000. There was also a sharp fall in growth rate of industrial production, the report said. Significant for growth, the agricultural sector recovered in the second half of 2001 owing to a good harvest in the Indian kharif season and a bumper cotton crop in Pakistan. The domestic service sector (which makes up 50 per cent of India’s GDP and 35 per cent of the regional GDP) increased by almost 7 per cent in 2001 while software exports grew 25 per cent despite the malaise in the global high-tech markets, the report said. “India has substantial foreign reserves, and with the relatively closed nature of its capital market, it is unlikely to face a financing problem in the near term,” it said. The report said agricultural output in the region, which is expected to improve in the first half of 2002, would have a stimulating effect on the industrial sector, particularly the durable goods sector. A marginal improvement of 1 per cent of GDP in current account deficit can be expected in 2002 which would continue to decline steadily thereafter, it said. The export sector would be on the path of recovery in the second half of 2002 the report said, adding that removal of sanction by USA and Japan on India and Pakistan would benefit the two countries in the medium term.
PTI
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