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Sunday,
August 17, 2003, Chandigarh, India  
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High fiscal deficit hitting growth,
Action against
Anil Nanda sought Air-India posts Rs 134 cr profit
Blackout in USA delays A-I
flights
In the wonderland of investments |
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Need to boost corporate aviation
Reserves set to
touch $85 b mark
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High fiscal deficit hitting growth, says Jalan
New Delhi, August 16 “Fiscal deficit is a problem from the growth point of view. We are using a lot of domestic savings for current consumption and that is not desirable,” RBI Governor Bimal Jalan, who relinquishes his office in October after six years, said here. With marginal improvement in total receipts and containment of expenditure, the Centre’s fiscal deficit stood at Rs 38,608 crore in the first quarter of this year. “Nobody is happy at 6 per cent growth” Jalan said about the economic performance, adding that it will be definitely better than 6 per cent mainly due to good monsoon and industrial revival. “The exact numbers the RBI will re-formulate and re-project in October when all data comes in,” he said in an interview to NDTV channel. Aided by a steady growth of the manufacturing sector, the industrial production grew by 5.3 per cent during the first quarter of the current fiscal. “Last year, we grew at 4 per cent despite drought. Yes, we are dependent on the rains. One wishes we were less dependent on the rains,” Jalan said. Less credit offtake is worrisome in terms of growth. “If we had more investments in infrastructure, we would have grown at a trajectory, which is fast and I am sure it will happen,” he said. Favours flexible interest rates
Bimal Jalan favours continuity of the present flexible interest and exchange rate regime, but says that intervention is required to prevent volatility and maintain orderly development of the markets. “There is one fundamental fact people should keep in mind: All the crises have occurred in countries with the fixed interest rates,” Dr Jalan said. The present interest rates are sustainable as long as the inflation is maintained at the current level, “but if your inflation rates shoot up, then obviously your interest rates are unsustainable because then you get into a negative territory,” Dr Jalan said. Advocating some element of flexibility and some element of intervention in the exchange rate, the outgoing RBI Governor noted that opinion is varied on the extent of flexibility. “We have taken a stand that we don’t want to have a fixed exchange rate target. We don’t say rupee should be this and we don’t defend it. So, rupee is flexible but we would like the movement to be orderly and not very volatile,” he said.
— PTI, UNI
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Action against
Anil Nanda sought
New Delhi, August 16 In a communication to SEBI, the Society for Consumers’ and Investors’ Protection (SCPI) said according to reports the deal was done at a price of Rs 31 per share which was at a considerable premium to the then ruling price of Rs 17. The stake transfer, as per reports, was for the entire block of 27 per cent of equity of Goetze (India) Limited held by Escorts Limited. The SCPI said such a stake transfer amounts to change in management of the company and as per the SEBI Takeover Code 1997 whenever an acquirer acquires 15 per cent or more equity shares in a company, it is mandatory for him to make an open offer to the public for an additional 20 per cent or more equity shares of the company. Urging SEBI to take appropriate action, the SCPI said it was important to take actions against the erring acquirers.
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Air-India posts Rs 134 cr profit
Mumbai, August 16 Taking on record the financial statement at the board meeting in Delhi today, the airline said it has earned a total revenue of Rs 5,668 crore during the period under review as against Rs 5,017 crore the previous year. The airline ferried 3.39 million passengers during the year and achieved a higher load factor of 71.6 per cent compared to the 66 per cent recorded in the preceding year, Air India said in a statement. The board also discussed the low-cost airline proposed by Air-India Charters Ltd (AICL), a 100 per cent A-I subsidiary, to be operated on the West Asia routes with a view to reducing operational costs, the statement added. The board has now sought a more comprehensive report from the in-house committee to identify flights from various points in India. — PTI
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Blackout in USA delays A-I flights
Mumbai, August 16 A spokesman of Air-India said according to the revised timings, the flight (AI 112) from New York via London-Delhi, originally scheduled to depart on August 14, is now expected to arrive here early tomorrow while the flight (A-I 144) from Newark via Paris is due to arrive in Mumbai at 00.25 a.m. (Sunday).
— PTI
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In the wonderland of investments Q: I was sanctioned a composite loan of Rs10 lakh from a bank for purchase of plot and construction of the residential house in July, 2001. Out of the amount, I utilised Rs 4.5 lakh towards purchase of plot in October, 2001. The balance amount of Rs 5.5 lakh was availed in stages from Feb, 2002, to August, 2002, for the purpose of construction. As I availed the loan in stages, I started paying the pre-EMI interest from Oct, 2001 (the month of 1st disbursal). I completed the construction of the house in Aug, 2002, by which time I had availed the complete loan amount. The EMI started from Sep, 2002. I am using this property for self-occupation and do not have any other residential properties. Following are the queries for filing my IT returns for FY 2002-2003: 1. Am I entitled to deduct the interest on capital borrowed for purchase of plot? If allowed any CBDT circular or case laws? 2. Will the pre-EMI interest paid for the period April, 02 to Aug, 02 (the month of completion of the construction and the loan disbursal) be treated as pre-construction interest or will the entire amount be considered as interest for 2002-03 and will be allowed in full for the financial year? If fully allowed, can you give the CBDT circular or any case laws? 3. What document is required evidencing the completion of the construction of the property? 4. What other formalities need to be observed while filing the return for FY 2002-03 as this will be the first year in which income is being shown from house property? — Ramakrishna B. V. A: The house has been completed in August, 2002. You are eligible for the full deduction u/s 24 on the interest and rebate u/s 88 on part payment of loan amount for the payments made during the financial year 02-03. Yes, this is so, even if part of the payment were made when the house was not ready. Interest for the years prior to the year in which the property was completed, shall be deducted in equal installments for the year during which it was completed and each of the four immediately succeeding years. Unfortunately, there is no corresponding provision for the tax rebate. The occupation certificate issued by the municipality will be proof of completion of the house. Q: I am US based PIO. I would like to open a brokerage account to buy stocks in India. Both HDFC Sec and ICICI Sec do not allow US residents to open an account (because of some SEC regulations). Is there a way, or are you aware of any brokerage firms that would let me open a brokerage account, with online trading facilities? — Amit Agarwal A: Any depository participant like HDFC and ICICI Sec will be too glad to offer you their services as long as you do not have an address in the USA for obvious reasons. Q: Recently Hindustan Lever has issued 9 per cent bonus debentures at 1:1 to the share holders with face value of Rs 6 for 18 months. I am entitled to about 4000 debentures. Simultaneously HSBC Securities & Capital Markets (India), has sent intimation for buyback of this bonus debentures at Rs 6.23 before August 1, 2003. As per original terms it will be listed on BSE and NSE. The 9 per cent (though taxable) is from a good and reputed company. My query and my comments whether right or wrong are as under: (1) Whether I should give it to HSBC as buyback at Rs 6.23P before August 1, 03 or sell it in the market before holding it for 12 months which will be considered as short term capital gains like shares and if I sell it after 12 months holding it will be long term capital gains. (2) I have a carried forward /unabsorbed long-term capital loss for FY 01-02. If I make short-term capital gains by sale of the bonus debentures for FY 03-04, can I adjust it partly against my carried forward net long term capital loss. — Noshiir Mobedjina A: 1. The present value of HSBC’s offer breaks even at interest rate of 6.39 per cent. In other words, Rs 6.23 paid today is equal to your getting Rs 0.27 at end of 6 months, another Rs 0.27 at the end of 12 months and finally, Rs 6.27 at the end of 18 months, if the rate of interest is 6.39 per cent, payable half yearly. The offer is not attractive, unless you need the money. 2. The Rs. 6 debentures will be treated as dividend and consequently are tax free. If you sell these at Rs 6.23, you will earn a short-term capital gain. Long-term capital loss cannot be setoff against short-term capital gains.
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Need to boost corporate aviation Corporate chiefs like Ratan Tata, Anil Ambani, Vijay
Mallya, P.R.S. Oberoi and Kumar Mangalam Birla own aircraft to go from one place to another without any loss of time. According to many business magnets, they press into service their own aircraft instead of depending upon commercial aircraft as connectivity at many centres and areas remains unsatisfactory. The house of
Tatas, for example, possesses several aircraft of different makes and sizes. The corporate houses have the largest fleet outside Indian Airlines, Jet Airways and Sahara Airlines. But the corporate aviation has not come of age as maintenance of aircraft has been far from of the highest order. Several important lives have been lost because of this snag. On many occasions, flights have been operated without undertaking proper checks by competent engineers and technicians. In the past few months, several air mishaps have taken place. Vijay Mallya and Sanjay Khan, for example, were lucky that they emerged from a chopper aircraft unscathed. Corporate aviation needs to be encouraged. Maybe, there will shortly be a private commercial helicopter service in Mumbai from far-flung areas to Santa Cruz and Sahar airports. According to regular travellers, it takes at least three hours to commute from Colaba to Sahar airport during daytime. There are occasions when passengers have missed their international flights. Whatever may be the urgency of the corporate chiefs, private sector aviation should be allowed to grow only after rigorous maintenance exercise has been undertaken. Air Deccan will soon start operating flights to establish links in areas which are “unconnected”.
Cosmetic changes The government had sanctioned Rs 2,000 crore to make Indira Gandhi International Airport
(IGIA) look like a world-class airport. Instead of working on a new project, the Airports Authority of India (AAI) has started giving cosmetic changes to the airport. |
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HMT inks pact Bajaj officer quits CellOne offer Gold looks up |
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