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Sunday,
April 20, 2003, Chandigarh, India  
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IUC to be implemented from May 1 Himachal
to set up Herbal resorts
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Wheat arrivals flood market
Markfed to safeguard potato growers’ interest
Much ado about central excise
Banks need to change outlook, says Chamber
A-I, IA selloff stalled
VAT system
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IUC to be implemented from May 1 New Delhi, April 19 “The IUC regime shall come into force from the scheduled date of May 1, 2003. Some operators informed that they were facing some technical difficulties in implementation of the IUC regulation. After discussions, a generic interim solution emerged on the method for implementation”, Chairman of Telecom Regulatory Authority of India (TRAI) Mr Pradip Baijal told newspersons here today. Public sector telecom behemoth, Bharat Sanchar Nigam Limited (BSNL) will reconcile the data on an off-line basis. The interim phase will end by March 31, 2004 with the implementation of Call Data Record (CDR) based billing system by all operators. TRAI will also take up with the licensor (the Department of Telecommunication) the issue of standardisation of Wireless in Local Loop (WLL) numbering for all basic service providers. Some of the operators had informed TRAI that they face technical difficulties in implementation of the IUC regulation. These include separate allocation of Short Distance Charging Area (SDCA) numbers for fixed and WLL (M) sectors, increased in the depth of analysis in switches, increase in number of records for routing and ICU computation in dynamic mode, need for CDR based billion system etc. TRAI had announced a multi-structured IUC regime. As per the interconnect regime announced by TRAI in January this year, it has fixed the rate at Rs 0.30 for calls originating from a WLL (M) phone and terminating at a cellular phone. In other words, a WLL (M) operator has to a Rs 0.30 per minute for a call made from its service to a cellular network in any metro circle and vice versa. Subscribers, however, will be charged at the rate of Rs 1.20 per two minutes i.e. Rs 0.80 per minute for calls made from fixed to cellular mobile phones. In non-metro circles subscribers will be charged at the rate of Rs 1.20 per minute for calls from a fixed line to a cellular phone. In a metro circle, a fixed line operators has to pay the cellular operator at the rate of Rs 0.30 per minute for a call terminating at a cellular network, while a cellular operator has to pay at the rate of Rs 0.50 per minute for call made from its service to a fixed line phone. Similarly, while a fixed line operator will pay Rs 0.30 per minute to a WLL (M) operator for terminating a call, the WLL (M) operator will pay Rs 0.50 per minute as termination charges to a fixed line operators in a metro circle. In both metro and non-metro circles, TRAI has given the freedom to both cellular and WLL (M) operators to fix the tariff for calls made to fixed line networks. In a non-metro circle fixed line operator has to pay Rs 0.40 per minute to a cellular operator as termination charges, while the cellular operator will pay Rs 0.60 per minute for getting through to a fixed line. A WLL (M) and cellular operator will both pay Rs 0.40 per minute for terminating calls in each other’s network.
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Himachal
to set up Herbal resorts Chandigarh, April 19 “Though 5 hotels of Himachal Pradesh Tourism Development Corporation
(HPTDC), are offering Panchkarma facilities, but now we are keen that exclusive Spa’s and Herbal resorts be set up in the state,” said Himachal Tourism Minister, Mr Vijai
Mankotia, here today. He was speaking at a Conclave on “Investment Opportunities for Setting up Health and Herbal Tourism Resorts in North India.” Punjab Health Minister, Mr Ashwani Sekhri and Mizoram Health Minister, Mr F.
Malsawma. While stressing the need for practical guidelines to invite investment in promotion of herbal tourism, Mr Sekhri hoped that the northern states will be able to work out a joint strategy in this field. “Unfortunately, the big commercial companies have been exploiting the abundant herbal wealth of Himachal, with the state and its benefit not getting any benefit,” regretted Mr
Mankotia. He said the government will now ensure that these companies instead of taking the raw material out of the state, would set up their industrial units within the state,” he pointed out. Mr
Sekhri, said even Punjab would focus towards herbal tourism and the Shahpur-Kandi to Dhar belt and the river stretch from Ropar to Nurpur Bedi had prospects for setting up health resorts. He assured that Punjab government would extend all possible help to private investors interested in setting up such
resorts. Mizoram Health Minister, Mr Masawma said a Rs 5 crore Vanaspati Van, had been set up near Aizwal with the financial assistance of the Union Health Ministry for growing valuable herbs and medicinal plants. He said the state would promote Health Tourism to woo tourists. Indian High Commissioner to Mauritius, Mr Vijay Kumar and Vice-Chancellor Punjab Technical University, Mr
Y.S. Rajan and Mr D.S. Jaspal, Principal Secretary, Punjab spoke on the occasion. The conclave was organised by Institute of Tourism and Future Management Trends.
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Wheat arrivals flood market Ludhiana, April 19 The glut in the mandis has not posed any problem in the procurement of wheat and all stocks are being purchased daily by the officials procuring agencies. The private traders are not making much purchase of wheat and flour mills and chakkiwala are making little purchase of wheat. Meanwhile the RBI has sanctioned cash credit limit of Rs 5,214 crore to the Punjab Government for the purchase of wheat during the current season, according to Mr K.R. Lakhanpal, Principal Secretary, Finance, Punjab Government. Mr Lakhanpal told The Tribune today that the funds had been sent to the districts and there would be no delay in making the payment to the farmers for the purchase of wheat. The Punjab Government had to setup the Punjab Grain Procurement Corporation under the aegis of the Punjab Food Supplies Department in order to get the cash credit limit sanctioned by the RBI. Now the food supplies department is making wheat procurement through this corporation. During a visit to the biggest grain market of Asia — Khanna, this correspondent was told that between 40,000 to 50,000 bags of wheat were arriving in the mandi daily. Only one bid (boli) was being made. The hartal by the trucks in the country has not made much impact on the procurement of wheat as the movement to other states was not much at present. According to official information available with this reporter as many as 26,77,890 tonnes of wheat had been received in the mandis till April 18. The agency wise procurement of wheat was Pungrain — 2,77,653, Markfed — 5,93,427, Punsup — 5,76,243, Punjab State Warehousing Corporation — 3,11,278, Punjab Agro Corporation — 3,77,345, FCI — 5,23,299 tonnes respectively. The private trade purchased only 17,645 tonnes of wheat from the markets. Mr Raj Kumar Sood a leading wheat and rice exporter of Khanna told this reporter that there was not much demand for wheat from other states nor export of wheat was taking place at large scale. Only small quantity of wheat and rice were being exported to Gulf countries and South Africa. The entire procurement of wheat has been made at the official minimum support price of Rs 620 per quintal whereas the traders had been buying the same at the rate from Rs 625 to 631 per quintal. The state government has set a target of procuring 110 lakh tonnes of wheat this year.
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Markfed to safeguard potato growers’ interest Chandigarh, April 19 Disclosing this here today, Mr S.S. Channy, Managing Director, Markfed, said that a major reason for the potato glut in the state was the fact that traders from other states were now moving away from Punjab to UP to avail themselves of the transport subsidy being given by the UP Government for out of state movement as well as for exports at the rate of Rs 25 per quintal and Rs 100 per quintal respectively, which was a very attractive option for them. Mr Channy said that the Chief Minister had asked the Chief Secretary to look into the problem and coordinate between different departments/agencies concerned for providing immediate relief so that the movement of potatoes for export could be streamlined. He pointed out Punjab was in the process of setting up an Agri Export Zone for potatoes and potato was one of the major crops under the diversification plan. Mr Channy said the Markfed had already requested the state government to allow transport subsidy at par with the UP Government to make both inter-state movement and export of potatoes equally competitive from Punjab but it had not been cleared so far. In the meantime, procurement of
potatoes was almost over. Mr Channy said another reason for the potato
glut was the absence of proper infrastructure for handling large quantities of potatoes. Besides, potatoes being a semi-perishable commodity, could not withstand retention in heaps in the fields in summer season for more than 35-45 days. Apart from this, the problem of Punjab being located far from the ports, absence of subsidies for inland and sea freight as available for other vegetables in Punjab and for potatoes in UP, made the smooth movement for export or domestic use, quite difficult. The Markfed had also procured 1000 MTs seed potatoes for promoting high quality contract farming which served as a viable option for crop rotation to the farmers. To make potato export more competitive, Markfed had already requested the state government for export freight subsidies for Punjab potatoes. The state government should approach the Ministry of Agriculture for the implementation of a Market Intervention Scheme to tackle the potato farmers problems. Meanwhile, Markfed has undertaken the commercial purchase of potatoes of about 40,000 bags in Patiala, Ludhiana, Nawanshahr, Jalandhar and Kapurthala.
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Much ado about central excise SINCE
March 31, most of the small and medium-scale hosiery manufacturing units have suspended work in protest against the levying of central excise by the Union Government. The manufacturers have already met the Prime Minister, Mr Atal Behari Vajpayee, seeking his intervention for the withdrawal of central excise. However, Mr Vajpayee did not give any unequivocal commitment and only assured the manufacturers that he would ask the Finance Minister, Mr Jaswant Singh, to consider their demand. Time is running out for hosiery manufacturers. It is peak time for them when manufacturing should be at its highest. And if the manufacturers are to be believed, they have not fabricated a single cloth during these two weeks. There are however, reports that some of them are manufacturing the goods clandestinely in order to meet the delivery deadlines. According to Mr Vinod Thapar, president of the Federation of Knitwear, Textile and Allied Industries Associations (FEKTAA), the introduction of central excise on hosiery products will spell doom for the industry. He argues that the industry is already reeling under a severe slump. At this stage, it would be improper to introduce the central excise. "Instead of generating extra revenue, as the government claims, it will lead to the closure of a large number of units which will ultimately lead to losses", he claims. Mr Thapar maintains that the small manufacturers would be the worst hit. He observes that it would lead to increased clerical formalities and paper work, thus adding to the harassment of the small manufacturers. "Anybody from the department can walk in and check your stocks and records…it will only lead to the return of the inspector raj", he fears. His concerns are shared by other manufacturers like Mr Vipan Dhand. Mr Dhand is the general secretary of the Readymade Hosiery Manufacturers Association and an exporter himself. He observes that central excise on hosiery seems to have been imposed without studying the industry at the grassroots level. Quoting instances he points out that there are hundreds of units which are run from houses by family members without any outside labour. "How can you expect them to maintain records and file the stock position daily when they manufacture only a few garments daily?", he asks. Another hosiery manufacturer, Mr Sunil Datt, points out that the government had earlier imposed central excise on the bicycle industry also. But bowing to the tremendous pressure from the bicycle lobby, which holds considerable clout in the government, it was withdrawn. "If government could withdraw central excise in the case of the bicycle industry why not the hosiery industry", he asks, while arguing that the hosiery industry provides employment to thousands of people in the state. The hosiery manufacturers have been arguing that they are not averse to paying the tax at one stage. But it should not be at each and every stage, which makes the business difficult. "We would be involved more in paper work than in the main business", Mr Datt claims, while alleging that central excise duty has been imposed at the behest of big industrial houses as it will ultimately lead to the wiping out of the small scale industry from the business. However, there are others who support the central excise describing it as a first step towards progressive taxation that is an in-thing in developing and developed countries. Mr V.K. Goyal, Chief Executive of the Vardhaman Spinning and General Mills, maintains that progressive taxation in the long run ultimately helps the businessmen as the level of tax keeps coming down. He states that central excise is the tax on each and every value addition on the product. For example, if a person purchases raw material for Rs 100, he pays a duty of 8 per cent at that time only. Suppose he makes a value addition of Rs 20 on the finished product taking the total cost to Rs 120, besides there would be 8 per cent tax, which will take the total amount to Rs 129.60. But the buyer will not have to pay this much amount. Since Rs 8 have already been paid at the beginning, he will get the credit of Rs 8. But it would be possible only when the manufacturer is ready to bring it on record. Here the problem starts. It is common knowledge that there is a massive evasion of sales tax and income tax. A number of manufacturers do not show actual volume of business. Providing credit to the buyers on finished products after value addition will mean bringing everything on record and making themselves vulnerable to income and sales tax scrutiny. There is a general perception that the introduction of central excise will help to a great degree in preventing tax evasion. Countering the claims of manufacturers the official said, "it is not a valid argument … everyone maintains his records properly and moreover, ignorance of the law cannot be any excuse". The Commissioner Central Excise, Mr H.K. Mittal, is trying to allay the fears of harassment to manufacturers. He clarifies that no official of the central Excise Department can visit or inspect the premises of any manufacturer without the prior permission or authorisation of a senior officer, at least of the rank of an Additional Commissioner. Moreover, the inspecting official will have only a specific purpose and agenda and he cannot make sweeping inquiries. According to Mr Mittal, if the manufacturer has any complaints, he can lodge them with the department and the inquiry and follow-up action would be taken within 24 hours. Mr Mittal also makes it clear that no manufacturer would be allowed to move goods without the central excise registration number. Any movement of goods without the registration number will invite penal action.
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Banks need to change outlook, says Chamber New Delhi, April 19 According to the Chamber, the banks insist on collaterals and guarantees that causes avoidable difficulties to entrepreneurs who have limited resources. The definitation of collateral or guarantee should be clearly defined by the RBI and the term should also include the value of plant and machinery, house, property, building and factory, said PHDCCI. It also said that when banks have adequate physical stocks security and also ECGC protection there is no need to compel borrowers to give further collaterals. Presently, commercial banks and financial institutions (FIs) which provide working capital and term finance to the corporate borrowers generally demand personal guarantees from the borrowers besides collaterals which causes avoidable hardships particularly to Small and Medium Enterprises. Banks also insist on retaining the collateral securities when they have enough security in hypothecation of stock etc. Further, many viable projects are denied due to non-availability of collateral security for small scale industries, the Chamber said.
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A-I, IA selloff stalled THE
‘blues’ of two national carriers will continue unabated as Air-India and Indian Airlines have been taken off the disinvestment list. The decision, totally political, will be counter-productive as flight-path of the two airlines will continue to be hazardous. The plea, taken by the Cabinet Committee on Disinvestment (CCD), is that ‘in view of the huge investments proposed to be made shortly for fleet acquisition, the airlines should not be disinvested’. The Minister for Disinvestment Arun Shourie was reportedly disinclined but he consented to go along with the decision of the CCD, which was presided over by the Prime Minister Atal Behari Vajpayee. From the beginning, the Civil Aviation Ministry was opposed to disinvestment of the two airlines. This was more because of political pressure than because of welfare and health of A-I and IA. In briefing the media, Mr Shourie is reported to have gone on record as saying that ‘no work was going on’ for these two public sector companies. As this vital decision has been taken, there will be another round of ‘war of attrition’ for the process of buying aircraft. Two world’s leading manufacturers, Boeing and Airbus
Industry, have been intensely fighting for the bigger pie in the deal. They have already brought about political pressure from their governments, that is US and French, to brow-beat the Indian politicians. For the race of bagging the aircraft order worth Rs 20,000 crore for Indian Airlines and Air-India, the French Prime Minister Jean-Pierre Raffarin had a word with the Indian Prime Minister in February 2003. The French Prime Minister was pleading for the Airbus
Industry aircraft. The French Transport Minister had a detailed discussion with the Civil Aviation Minister Shahnawaz Hussain, while Airbus
Industry officials had met the heads of the two airlines. Similarly, the US Government aviation officials had plunged into the melee and the Boeing officials had even offered ‘price cut’ to grab the huge order. In this country, there is no dearth of competent and knowledgeable engineers and commanders. Their opinion should have far greater weight than others from US and France. It will be unfortunate if quality is sacrificed to ‘please political bigwigs’. Two airlines need more aircraft. The expansion has already been delayed for years. Any more delay will be suicidal for the growth of national carriers. The quality and quality alone should be the watch-word for buying aircraft. In the futile bid to please this or that government, the Indian aviation growth will be adversely affected and the two carriers will have to encounter yet another set-back. |
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VAT system There has been considerable hue and cry in the country as to implementation of VAT System of taxation earlier proposed to be implemented from 1.4.2002 and then deferred to 1.4.2003 and now
up to 31.5.2003. It is a known fact that our country is allergic to word any tax what to talk of VAT. It is not because of people are not willing to pay tax or evade tax but the cumbersome statues framed for collection of revenue, which are themselves great impediments in their implementation. The Union Government has been courageous enough, in introducing Modvat and then Cenvat and also simplifying and getting rid of many cumbersome statues and procedures giving great relief to the tax payers and good bye to unwanted litigations. The same was thought to be implemented in the case revenues being collected by the states and VAT system is a great step to mobilise efforts in this direction. Why do our politicians when they form the government get such recommendations made from well-known economists, experts who they give their views totally in the interest of country without being bias but they (politicians) cannot implement. Let me unveil misconception and apprehension of tax paying community in a simple single sentence that they need not to worry about any complication of VAT system of taxation, it is simply a tax which will now be known as VAT tax in place of General Sales Tax etc. and avoid taxing at all level of turnover and eventually leading to tax collection from ultimate and final purchaser. No doubt it may still have some
inherent problems but the same should be sorted out by experience in its implementation both by revenue collecting authorities as well as tax paying community by being fair otherwise attracting stringent legal measures. —
INTERMIT SINGH, GARKHAL (KASAULI)
Stamp duty Public servants are duty bound to serve the public but they take pleasure in creating hurdles in the smooth working. Public is harassed, mostly with the ulterior motive. According to news item in The Tribune dated April 9, 2003 there is ambiguity in the notification relating to Stamp Duty exemption on the transfer of the property in favour of the legal heirs of a person. According to notification a person can transfer his property in favour of his legal heirs falling in the category of class one without paying stamp duty. According to some revenue authorities the notification relating to exemption from payment of Stamp Duty applies only to males and is not applicable to females as the word used in the notification is “His” and this word will not cover women. The Revenue Authorities cannot take the plea of ignorance of law. Since the year 1898 an Act under the name Punjab General Clauses Act has been applicable in the state of Punjab and the Act deals with the interpretation of statues in this State. According to the section the benefit of the notification granting exemption from Stamp Duty to the transfer of property is available to females also. The revenue authorities consider themselves to be above law. In response to raids by Vigilance Bureau Punjab on their places of working, they had threatened to expose the members of Vigilance Bureau claiming that they have in their possession the details of assets acquired by members of the Vigilance Bureau. Hence the revenue authorities work according to their sweet
will. — TEJ BAHADUR PURI, KAPURTHALA
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