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Monday,
July 15, 2002, Chandigarh, India  
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More
options for telephone subscribers HOW I STARTED
Market is
poised for a rise |
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Q: I
am in receipt of about Rs 66,000 pension annually which after standard
deduction works out to be Rs 44,000. Besides I am getting interest
income of Rs 45,000 which after Section 80L deduction will work out to
be Rs 36,000.
Safe power
supply issue under focus Timex
launches 2 watches
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More options for telephone subscribers The slashing of tariffs
by the Bharti Telecom and other operators and entry of new players in the market have given a fillip to the telecom services in the country. With the AirTel’s recent entry in the mobile phones market in the region and Bharat Sanchar Nigam Limited ( BSNL) and Reliance, too, planning to enter the field soon, the subscribers are definitely going to be
benefited in a big way. In fact, today the customers have a wide choice to select a communication service. The market observers say since the rates are governed by the Telecom Regulatory Authority of India (TRAI), the operators have limited option to attract the customers through price cuts. Rather it is customer service, marketing strategies and capacity to reach a particular segment, that are determining their share in the exponentially growing market. Mr T.S. Ghambhir, DDG (CMTS), BSNL, in-charge of mobile services in Punjab, says, ‘‘The telecom market is witnessing tremendous change over the past few years. The customers having land line phone are shifting to Wireless in Local Loop (WiLL), and WiLL customers are upgrading to mobile services with increase in their income level.” Though he is not ready to disclose the BSNL’s tariff rates, but adds, “Since BSNL’s is a late entrant in the mobile market, we would try to grab a share by slashing the call rates, through better service and accessibility to service in more areas.” The Nigam has also plans to enter the WiLL market later on. Allaying aside any fear from the telecom giant, Mr Vijay Kaul, Vice President, Connect Services, says, ‘‘We are offering tailor made billing plans to the customers, additional services at the land line phone rates. The Connect mobiles operational in the city are available by depositing just Rs 840 as activation charge. The customer can take mobile set of his own choice from the market. To avail STD and ISD facility he will have to deposit a refundable security of Rs 3000 and Rs 5000 respectively.” The rates of local calls on the connect phone, he asserts, is just Rs 1.20 per three minute and in-coming calls are free. Further the company is offering 5 to 15 per cent discount in monthly billing under super saver scheme. By depositing just Rs 75 per month extra, the subscribers can avail unlimited free time to talk on any two connect phones of his choice under ‘mere apne scheme.’ Mr Tushar Maheshwari, a senior official of the AirTel, claims that newly launched mobile service of the Bharti group has proved a great success in the state. The company is already providing to services to more than 65,000 customers in the state. He says, “No doubt, the Bharati has not reduced the call rates, but its wide network in 16 states, better connectivity, clear voice and additional services are attracting subscribers from other customers.” Mr Krishan Gopal, a leading dealer of the AirTel, admits that Spice is still the market leader in the region, but some of the customers are slowly but steadily shifting towards their service. He says, “Like the Spice communications, the company is offering two kinds of billing options. One, at Rs 249 monthly rent the competitive rates are 75 paise per 30 second up to 250 minutes in a month for outgoing calls, 60 paise per 30 second for 500 to 750 minutes and 50 paise per 30 second call rates for above 750 minute bills. The incoming call rates under that category is Rs 1.20 per 30 second. Under second scheme mostly used by bulk users, the monthly rent is Rs 349 per month, but the call rates are substantially lower— Rs 1.49 per 30 second for outgoing calls and 49 paise per 30 second for incoming calls. However, the customers can also avail free incoming calls facility by depositing Rs 6000 as non-refundable fees in advance.” The customers can take roaming facility at Rs 3 per minute. Another Spice dealer claimed that initially some customers had shifted to other companies, however, after experiencing the difference number of them have come to their fold again. He said, “The Spice is proven market leader in mobile market in the state with more than 3.75 lakh connections. The company is offering special solutions to companies known as Spice Closed User Group (CUG) — designed to meet the communication requirements of employees across different functions of an organisation.” The company also offers, he says, value-added services like SMS to landline, mobile tambola, SMS in Hindi, mobile banking, Spice Agritrack, Spice Sandesh, Mukh Vak and Gita Sar. Mr Rohit Bajaj, Vice President of the company, claims that the company has a consolidated work force of around 300 employees from diverse educational and cultural
background. It is covering 81 towns and cities of Punjab with more than 4,000 retail outlets. Spice claims to have covered more than 900 villages. Incidentally, despite increasing operations of the private players, the total potential in the area has not be explored. The market observers admit that the total potential of mobile connections in Punjab and Chandigarh is around 16 lakh lines, however, till today, the Spice and AirTel have provided mobiles to just 4.5 lakh subscribers. The officials admit that the market has not expanded due to high tariff and limited
infrastructure. The entry of BSNL and Reliance and further price cuts, they say, will definitely expand the market. They say the era of telecom department’s monopoly is already over. The telecom subscribers can now choose a phone service according to their pocket and needs. If the BSNL provides land line phones and related services in rural and urban areas by now, the Connect is providing convergence services of land line phones and limited mobility phones to more than 85,000 customers in Punjab and Chandigarh. Probably, by the end of next month, the BSNL will also launch the mobile services in the region. The Reliance group, the fourth licensee to operate in the area, is expected to take about another six months to start its mobile services. The customers, however, still feel that unless the incoming calls are declared as totally free, the market cannot expand to the desired extent. Further, there is great need to improve the level of service. For instance, the network is often found busy in the evening throughout the Punjab in case of BSNL and other private players. The customers claim that the computerised customer care centre of Spice and AirTel are often found to busy to attend to their complaints. Prof A.K. Singh, a resident of Mohali says, “No doubt, the number of telephone and mobile connections has substantially increased with the entry of private operators. But the level of customer service has not improved to the desired extent.”
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HOW I STARTED “There is no substitute for hard work and for years I was the planner and executor – all in one. But fortunately for me, when I started, knitted garment industry was yet to be established in Punjab. Realising the potential in the absence of knitted children wear, we knew exactly what we were going to do. In 25 years we have come a long way; from manufacturing a single garment to producing dozens of products that are not only made by us but also sold directly through companies exclusive showrooms”, says Mr Raj Awasthi, who established the Sportking group of industries. Initial phase At the time when I graduated, only sportsmen and sportswomen used to wear T-shirts. Christening my brand “Sportking” was a direct outcome of what I perceived as my target customer at that time. Started with a small investment of Rs 45,000, I put up a T-Shirt manufacturing unit. It was around this time that Vardhman Group came out with the thread that was to be used in the knitwear industry. The businessman in me immediately got onto doing a market research, which revealed that there were lot of manufacturers of woven children wear, but none in the knitted children wear. Once, the research was over, it was the word ‘go’ and we have never looked back ever since. To begin with, I worked on the machine myself as those were trying times. But today the Sportking group with an annual sales of over Rs 200 crore
employ 5000 employees. There were several teething difficulties, but none that was not manageable. The biggest problem, however, was terrorism that was prevalent in the state at that time.
Set back During militancy, we had to shift out of Punjab after terrorists attacked our factory on the Rahon road by lobbying bombs. Though there was no loss of life, yet the work had to be shut for four months and finally we had to shift out of Punjab. Two factories were set up at Noida, but we could not run them due to work culture, labour problems, red tape and lack of business environment there. I had to eventually shut the factories and move back to Punjab, losing precious seven years in the process.
New beginning Around 1984 I ventured into manufacturing sweaters. These were supplied all over the country through a network of about 1,600 dealers. We even ventured into exports and were the pioneers who tapped the children sweater segment. But eventually I realised that to succeed, something had to be done to pass on profits of dealers and middlemen directly to customers. So, I introduced the concept of exclusive company outlets. Today, we have 20 such exclusive company owned showrooms in Punjab, Haryana, Delhi and Rajasthan. Soon, we would open more such outlets in metros.
Strategy in business I employed women from the nearby villages and trained them in various spheres. This besides providing employment to people in the neighbourhood created goodwill for the organisation. Fortunately we have had no labour problem or any other hassle related to management. We now sell directly to customers, passing on the price advantage to them directly. We have stopped supply to about 70 clients in Delhi and sell the products through our exclusive showrooms. This instantly gets us a feedback about the acceptability of the product.
Trends in the industry More and more people are moving towards ‘casuals’ in terms of clothing. This is exactly the trend we are trying to capture. With people
preferring casuals; the knitwear industry has received a tremendous boost. The industry is getting very fashion conscious and we are adapting ourselves to the changing markets by employing fashion designers and keeping in touch with the trends abroad.
Definite edge Since Sportking has its own manufacturing, spinning and dying units, besides its own sale outlets, the brand has a definite edge over competitors. The cost of manufacturing is less than others as we have eliminated profit sharing at different levels, hence ensuring higher quality at lower rates.
Future plans The company has export earnings of over Rs 7.67 crore from manufacturing of products for brands like Pierre Cardin and Naturalife in the USA and European markets. Besides, I have plans to open more company outlets in other parts of the country.
(As told to Naveen S.Garewal)
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by J.C. Anand Market is poised for a rise Last week, there was some setback largely due to sharp fall in the US stock market but Sensex has gained 62.13 points during the last fortnight. It appears to me that the stock market is likely to stage a sharp bull rally during the current fortnight. To me, the recent changes made in the Union Cabinet and in the BJP at the organisational level, have been made not only to improve the party image in the country but also to brighten-up the stock market. The new Finance Minister’s statement (in his interview to the Economic Times) that he wished to give “more money in peoples pocket, more money in house-wives purse”, is a clear indication that in the next budget, the Finance Minister would be more liberal and cut down taxes. These changes in the Cabinet and the BJP party organisation have largely been made with an eye to the coming Vidhan Sabha’s elections in a number of states this year and general elections to the Lok Sabha later. Some relief may be announced by Finance Minister even this year. The industrial climate is also improving. Exports during April/May period are up by 10.6 per cent. The Central Statistical Organisation data for April/May, 2002 period also indicate that all the three sectors constituting “general” index have recorded high growth and Industrial Production Index is up to 3.8 per cent in May. At least, a dozen sectors of the economy are now doing well. They comprise software, pharmaceutical, telecom, paper, commercial vehicles, steel, construction, speciality chemicals. There is also increase in demand for paper, aluminum, cement and steel. The first quarter results so far announced are excellent. Hero Honda has reported net profit of Rs 139.16 crore as against Rs 78.81 crore (during the corresponding period last year). EPS for Rs 2 face value equity share is Rs 6.97 (as against Rs 3.95). Infosys’ Technologies net profit for the first quarter is higher by 14 per cent. There has also been 12.4 per cent increase in revenues, but the margins are under pressure. Balmer Lawrie’s first quarter results indicate a net profit of Rs 352 lakh (as against Rs 27 lakh for the corresponding period last year). Depression in Indian stock market last week was largely due to setback in the American stock market which has suffered five years low Index reading, due to the report that WorldCom, a top US company, has been inflating its revenues and misleading investors. Another US company under scrutiny is Bristol-Myers Squibb for a similar offence. In India, there was also a rumour that Rolta has also been inflating its revenue data but the company has strongly denied the charge. Yet the market price of Rolta has suffered substantially. In spite of slight depression in the stock market last week, many second-rate shares have been having almost a boom time. Basf, which was quoting around Rs 90 last month, is now priced at Rs 139. Clariant, which was quoting around Rs 100 last month, is now moving around Rs 160. Nahar Spinning is moving around Rs 90. Vardhman Group textile shares have almost doubled. Rallis India, which was placed around Rs 45 last month, is now quoting at Rs 136/-. Tata Chemicals has also gained almost 50 per cent in market price. GTN Spinning has moved up from Rs 17 to Rs 34 during the last fortnight. Long-term investors should wait for further price rise in the market before they engage themselves in profit-taking. |
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by R.N. Lakhotia Q: I am in receipt of about Rs 66,000 pension annually which after standard deduction works out to be Rs 44,000. Besides I am getting interest income of Rs 45,000 which after Section 80L deduction will work out to be Rs 36,000. Thus, my net taxable income will be Rs 80,000 and tax worked as 5000. This tax can be made zero by an investment of Rs 25,000 under Section 88. Please clarify whether: I can submit Form 15-H to bank not to deduct T.D.S. from interest. — R.D. Arora, Ludhiana Ans: On the facts stated by you for the current financial year 2002-2003 you cannot submit Form No. 15-H to the bank so that tax is not deducted at source. The Finance Act, 2002, has amended the provisions of the income-tax law relating to submission of Form No. 15-H. Now if your net taxable income is in excess of Rs 50,000 p.a. then you cannot submit Form No. 15-H even though the tax payable may be nil. The only remedy now left for you is to file income-tax return and claim refund in respect of the tax deducted at source. Q: This is regarding the replies on tax matters, on February 25, 2002. In case a person makes contributions in his wives PPF account can he claim deduction. To which your reply was negative. But what I have ready in some of the books that “contributions to PPF in account standing in the name of the individual or in the name of spouse, or his or her child is entitled to rebate u/s 88. I need to be clear regarding this. — Shruti Mehra Ans: Rebate under Section 88 in respect of contribution made to Public Provident Fund is permissible in an account standing in the name of the individual, his wife or husband as well as any child of the individual. Hence, tax rebate will be permissible to you in respect of PPF account opened in the name of wife. However, please remember that investment in NSC in the name of wife and children will not be eligible for tax rebate u/s 88 of the income-tax Act, 1961. Q: I am employed in a public limited company and residing in company provided accommodation. I want to purchase a house by taking housing loan, but I will keep on residing in company provided accommodation and will give the house on rent. In this regard, kindly clarify will it be possible for me to take rebate on the interest part of the repayment amount u/s 24. — Kamal Bhasin, Hoshiarpur Ans: In respect of the property which you are giving on rent you would be eligible to claim full deduction in respect of interest on loan for the said house property. There is no upper limit of deduction in respect of interest on loan for a property which is given on rent. |
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by Pushpa Girimaji Safe power supply issue under focus Electricity supply undertakings in the country had better watch out. In two recent orders, the apex consumer court has sent a clear signal that it will not condone violations of safety norms in power distribution and transmission. Both cases highlight the callous indifference of the power supply corporation to safety and quality in the service provided by it. The first case revolves around the tragic and untimely death of a farmer, when he came in contact with a live wire which had snapped from the electric pole supplying electricity to his pump. According to the complaint filed by the farmer’s wife, the power line was connected so precariously to the pole that it hung very loose and low. And worse, it was broken at various places and mended shoddily. The complainant also recalled that on number of occasions, the farmer as well as his neighbours had complained to the electricity board about it, but no action was taken to rectify the power line and render it safe. The District Consumer Disputes Redressal Forum, which first heard the case, directed the Karnataka Electricity Board to pay the farmer’s family, Rs1.75 lakh as compensation, along with interest at the rate of 12 per cent calculated from the date of the complaint till the date of payment.. The electricity board went in appeal before the State Consumer Disputes Redressal Commission, which, after examining in detail the Indian Electricity Rules on the responsibility of the board in ensuring safe supply, upheld the forum’s view that the board ought to pay for its negligence. It also awarded Rs 10,000 to the farmer’s wife for loss of consortium, but reduced the compensation amount from Rs 1.75 lakh to Rs 1.5 lakh. The National Consumer Disputes Redressal Commission dismissed a revised petition filed by the board. While doing so, it commented that the State Commission was not right in reducing the amount of
compensation. (Karnataka Electricity Board now known as Karnataka Power Transmission Corporation vs Smt Sharavva, RP no 159 of 2002) In the second case, constant sparking from electric wires passing over the field of the complainant had started a fire and despite the best efforts of the police and the fire service, destroyed the sugarcane crop, besides coconut trees and fruit trees grown on the land that belonged to the complainant. While he estimated the loss suffered as a consequence of the fire at over Rs 4 lakh, the Tehsildar and the Agricultural Officer put the loss at Rs 96,000. The District Forum, after examining all evidence, awarded a compensation of Rs 1.5 lakh. Here too, the forum held that the electricity board was guilty of providing deficient service in that it had failed to provide safe electric current through wires passing over the field of the complainant and connected to his pump set. This decision of the District Forum was subsequently upheld by the State Commission as well as the National
Commission. (Karnataka Power Transmission Corporation, Hubli vs Sri N.G.Siddagouda Patil, RV No 37 of 2002). However, I must point out that in both these cases, the deficiency or defect was in the line that supplied power to the complainants. But there are also any number of cases of injuries and deaths caused to innocent passers-by as a result of the callous negligence of electricity boards in leaving naked live wires unattended on roadsides. Obviously the electricity boards will have to pay for the consequences of such negligence, but unfortunately, the National Commission had held that in such cases, the victim had to go to a civil court for relief. In one of the earliest cases where a buffalo died when it came in contact with a live wire left carelessly on the roadside, the National Commission had taken the view that the electricity board could not be held liable under the Consumer Protection Act. Subsequently, in a similar case it said: “Merely because a general electric supply line which was not the line supplying electrical energy to the complainant/consumer happened to be defective and on account of the said defect some accident happened on a public road either to an animal or even to a person, it could not be said that there was deficiency in rendering service to the said consumer so as to attract the liability of payment of compensation under the CP Act”. (Haryana State electricity board vs Sher Singh, RP No 672 of 1993) However, once the amendments to the CP Act, that are now before Parliament are passed and notified, electricity supply undertakings can be held accountable in such cases too. The new amendments give the consumer courts the power to take action against service providers if the service being provided by them happens to be unsafe or hazardous. The courts can also award punitive damages in such cases as it deems fit. So the two recent consumer court orders and the new amendments should force power supply undertakings to pay more heed to safety. |
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Timex launches 2 watches Manali, July 14 While addressing mediapersons Mr Viney Saluja said Timex was going to tie up with the Reebok soon.
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Inflation falls A.P. Solvex Water purifier New keyboard Seminar |
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“There
is no substitute for hard work and for years I was the planner and
executor – all in one. But fortunately for me, when I started, knitted
garment industry was yet to be established in Punjab. Realising the
potential in the absence of knitted children wear, we knew exactly what
we were going to do.
