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Sunday,
August 31, 2003, Chandigarh, India  
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NIIT to
enter formal education sector, says Pawar Bill for
development of small-scale units
SAIL
Chairman allays fear of steel shortage
Red-tapism
delays decision on aircraft |
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Inflation
Index
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NIIT to enter formal education sector, says Pawar New Delhi, August 30 At the same time, the company’s software business arm will focus on providing solutions in less crowded verticals like insurance, transport and retail. Education and software are equal contributors to NIIT’s revenues which stood at Rs 426.3 crore in 2002-03. The proposed university would mark the entry of the private IT training major into the formal education sector in the country and is presently holding discussions with a number of state governments for the purpose. “We are talking to various state governments for this. But it (the University) is definitely going to be established in the short to medium term”, NIIT Chairman Rajendra S Pawar told The Tribune in an exclusive interview. Mr Pawar, who was instrumental in setting up NIIT in 1981 with active support from IT visionary and HCL promoter Shiv Nadar, believes that the days of the students reaching out to the universities are on the decline. “In fact now the universities are reaching out to the students. And in the proposed NIIT university we plan to adopt the distance learning model by leveraging the strong franchisee network”, he said. Presently, NIIT has over 2500 centres of which 256 are based in overseas locations. It has a significant global presence in 44 countries in America, Asia-Pacific, Europe, China and Japan. “We are going to adopt the distributed delivery system and the University is only going to be an incremental step from the present system. There is not going to be a major fundamental shift”, he said. In fact, Mr Pawar strongly believes that with increasing presence in overseas markets, NIIT has actually crossed the cultural divide and become MNC in the global sense of the term. “From a company focussed on the Indian market, to now that is entirely global in its outlook — NIIT’s changeover has been complete. Today more than half the company’s revenues come from international geographies”, he said. The NIIT Chairman pointed out that over 300 employees on the company’s rolls are non-Indians belonging to 14 different nationalities. “In fact heads of various NIIT businesses in Japan, UK and the USA are Japanese, British and Americans. Four expatriates lead NIIT operations in China and the rest of the team is all made up of Chinese”, Mr Pawar noted. The computer education and software major, which has breached the top 10 bracket of the Indian IT space, is working on a two pronged approach — gain leadership in under-penetrated spaces and build differentiation to compete more effectively in the mature spaces as well. “A smaller organisation needs to choose the less crowded verticals, service lines and even geographies. In the more mature spaces, we are concentrating in areas such as transportation and retail. Insurance is also a prominent sub-vertical that we focus on”, Mr Pawar said. To give a distinct identity to its software operations, NIIT re-named its global software business as NIIT technologies in 2002. “The software business existed since 1983 but it is only recently that we have given it a separate identity”, he said but hastened to add that the education and software business was not at the cost of each other. “While the education business had more developing country focus, the software business has a distinct developed country focus”, he pointed out. Mr Pawar believes that the NIIT’s strategy of getting into niche segments and tapping under-penetrated geographies has helped the company’s revenue grow by 20 per cent in the first nine months of the current year (October 1, 2002 to June 30, 2003). “Our strategy has paid off and today our (NIIT Technologies) operations span 19 countries across the US, Europe, Asia and Australia”. Until 2000-01 investors worldwide believed that the IT sector would continue to grow at high growth rates of the 1990s. However, the global economic slowdown changed all that with even technology giants like Cisco and Intel getting affected. Uncertainty and the global slowdown took their profitability of technology companies in the period that followed, scaring away investors to other sectors. Mr Pawar believes that “after a long period of hyper-growth, the brief slowdown of the IT industry worldwide was inevitable”. “This correction is bringing in strong elements of realism with customers and investors being far more demanding and selective. In that sense, slowdown will be good for fundamentally strong companies which are long-term players in the industry”, he pointed out. Mr Pawar maintains that the current rate of growth of 20 per cent is “handsome and sustainable”.
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Bill for development of small-scale units New Delhi, August 30 The legislation will address the problem of plethora of rules and regulations and address issues relating to registration, marketing and trade protection. It also intends to provide statutory backup to the government purchase programme by specifying a fixed percentage to be procured by the government from small
enterprises, the Minister of Small-Scale Industry, Dr C.P. Thakur, said while speaking at the fourth SSI convention here. Dr Thakur said the government was considering the expansion of the scope of Credit-Linked Capital Subsidy Scheme for technology upgradation of the SSI sector to make it applicable across all sectors. There was also a proposal to increase the investment ceiling of sport goods to Rs 5 crore, he said. The Vice-President, Mr Bhairon Singh Shekhawat, who was also present at the convention, said globalisation had posed greater challenges to the small-scale sector and concerted efforts were required by the entrepreneurs to reduce the cost of their products in the international market without compromising on its quality. The Vice-President said India had a glorious past in the SSI sector and to preserve the same the government should try to mitigate the difficulties faced by the entrepreneurs. The Ministry of Small-Scale Industries honoured Canara Bank, Punjab National Bank and State Bank of Indore for excellence in lending loans to the SSI sector and several SSI units across the country for their research and development work. Mr Shekhawat also gave away awards to the three banks at a function held here coinciding with the convention. Canara Bank received the first national award for excellence in SSI lending, while PNB was given the second award. The State Bank of Indore was given a special award.
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SAIL Chairman allays fear of steel shortage Ludhiana, August 30 Seeking to clear doubts prevailing in the industry, particularly that related to engineering, Mr Jain, told the Tribune in an interview here last night that although the prices of steel had increased, but there was no shortage of steel in the country. Mr Jain was here in connection with the seventeenth meeting of the National Steel Consumers Forum. Mr Jain, who had to face the ire of the industry over the rising steel prices in the country, agreed that the prices of steel had increased. But at the same time he pointed out, it is not for the first time that the prices of steel have increased. He disclosed that the SAIL has a policy of monthly review of prices. It is decided every month whether the prices are to be raised or lowered. Replying to a question about the charges of cartelisation by top steel companies, which led to the manipulative and continuous increase in the prices of steel, the SAIL chairman observed, “the prices are determined and defined by the market forces”. He argued, under the liberalized economy nobody can manipulate the prices. He justified the hike in the steel prices in the country and also denied that the steel available in the country was costlier than that exported to China. He disclosed that the SAIL had invested Rs 12,000 crore for modernisation and quality improvement. “If the SAIL has made any profits what is wrong in it”, he asked. He regretted over the hue and cry being raised over the substantial rise in the SAIL share prices from Rs 7 only a few months ago to Rs 40 now. The prices even went up to Rs 60 at one stage. Elaborating the issue of exports to China, he revealed that India can export only 3 per cent of the total steel required by China for infrastructural development in connection with 2008 Olympics in that country. And SAIL was contributing very little to these exports. At the same time he justified the exports, which he said were very essential.
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by K.R. Wadhwaney Red-tapism delays decision on aircraft In the no-hold barred war of attrition between world’s leading manufacturers, Boeing and Airbus Industries, the Indian aviation sector continues to suffer. As two manufacturers are also injecting a heavy dose of politics, two national carriers, Air-India and Indian Airlines, have been unable to decide which aircraft to buy. The manufacturers continue to play tricks. The Boeing authorities are loud in saying that the prices of aircraft have reduced in the past two years. The Airbus officials are humming different tune. They reiterate that the prices have not dropped. “There has been no drop in aircraft prices since the bid (Indian Airlines) was closed. We stick to our prices”, Airbus spokesperson David Velupillai is reported to have said from Paris. As two manufacturers differ on the prices of aircraft, Boeing has started a new gimmick. It has offered to buy back five 747 aircraft to sell two new versions of aircraft — Boeing 777 and 737-800 — to Air-India. The Boeing official claims that these aircraft are best suited to Air-India, which is scheduled to buy 17 long-haul wide-bodied aircraft and 18 short-haul passenger planes. It is a multi-million dollar deal. The Boeing official has also gone on record as saying that its company will buy back old 737 planes from Alliance Air, the wholly-owned subsidiary of Indian Airlines, if the domestic carrier decides to buy Boeing product. The varying opinions and vastly different offers from two manufacturers have led to the Indian politicians and bureaucrats rethinking. In this unending rigmarole, the Minister for Civil Aviation Rajiv Pratap Rudy is seeking the opinion of his ministry. He is said to have decided to review the developments in the aviation sector. Politicians and bureaucrats are undecided whether re-bid will be beneficial or not. Whatever the value of the aircraft and whichever manufacturer is finally chosen, the delay in fleet expansion is suicidal. It has already caused immense damage to two national carriers which will continue to stay at bottom in the world of aviation. Two leading manufacturers have enormous cushion of money and wherewithal. They can indulge in any kind of business strategy to clinch the issue. They have already brought their respective governments pressure on Indian politicians. They can use any kind of tactic, fair or foul. Their only air to win the deal regardless of what happen to the Indian aviation. The Civil Aviation Minister should depend upon his own expert pilots, engineers and commercial bigwigs instead of getting carried away by these foreign companies. Red-tapism has been India’s bane. After internal evaluation and board approval, the proposal goes to the Public Investment Board (PIB). After the PIB stage, it goes to the Cabinet Committee for Security and then to the Cabinet. If the procedure is simplified and politicians place faith in their own experts, there is hope of renaissance starting in the two national carriers.
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by A. N. Shanbhag Inflation Index Q : In one of your article you have mentioned that Inflation Index figures are now declared by June, what is the figure to be taken for Financial Year 2003-04? — Naval Patel Ans: Notification No. 179/2003/ F. No. 142/11/2003-TPL dt. 24.7.03 has declared the cost inflation index for the FY03-04 as 463.
Foreign income I am an NRI and recently I bought a flat on my wife’s
name, and got it registered in March 2003,which she has rented and filing her tax
returns. My questions are: 1) Do the rent which is below Rs 50,000 will be clubbed with my foreign
income, if yes - do I need to file returns? 2) As we are planning to migrate from
India, is the flat can be sold and the money from sale can be repatriable? — Kapil Srivastav Ans : Purchasing a house in the name of the wife by applying your own funds means that you are using her as a name-lender and this is a ‘benami transaction’. This is illegal. The house squarely belongs to you and you will have to treat it as such. It can be made legal by gifting the money to the wife to enable her purchase the property in her own name. Another alternative is to gift your house to her, but this will attract stamp duty and registration charges. It is also necessary for you to follow the procedure for gifting. There is no sense in taking either of the actions in most of the situations. The utility, if any, is lost because of the clubbing provision which means that the property income will be added to your income for income tax and its value will be added to your wealth for wealth tax. Moreover, if you take a housing loan in your name, you are not entitled to claim any tax benefits associated with the loan, because the house belongs to your wife. Your wife may not be considered as an eligible candidate for a loan by housing finance companies if she does not have an income of her own. Further, once you have gifted any repatriable asset, whether cash or the house, you have lost the right to repatriate. Had you purchased the property in your own name, you could not only repatriate the original amount invested in forex, as and when you sell the house but also the capital gains thereon after paying tax thereon. Had you hired it out to a tenant, you could also repatriate the rent received, after paying tax thereon.
Mediclaim Q: With reference to your article on Mediclaim, I would be grateful if you could perhaps clarify a few points for me. If you want to insure up to the full 5 lakhs, can you have it in two or three different policies of different denominations totalling the 5 lakhs or does it have to be just the one policy? And can you use different ones depending on the amount you have spent on medical expenses? And if there are different policies, if you want to reclaim costs for the medical checkup after four years, can you get it PER policy if they are in different years or just once overall? Also in case one has a complaint and wants to approach the highest authority, whom do you contact? We have heard of something called the IRDA. Do you know anything about that? And how can one contact them? —Zarine Wadia, Ans: Different policies are possible. However, I fail to understand the advantage of having different policies. Yes, IRDA is the proper authority. Their address is — Insurance Regulatory and Development Authority Head Office: 3rd Floor, Parisrama Bhavanam, Basheerbagh, Hyderabad 500 004. Phone +91-040-55820964, +91-040-55789768 Fax +91-040-55823334
Senior citizen Q:
A senior citizen, namely, a person aged 65 years or above is not required to pay any income tax up to the net tax payable income of Rs.1,30,000 on which the gross income tax payable works out to Rs.15,000 because of thee provision of a rebate of Rs. 15,000 from thee tax payable by the senior citizen under thee section 88B of the I.T Act. However the senior citizens are in dark about the various legal benefits available to them to reduce their tax incidence in as much as in many cases a level of income distribution could be reached, whereby the senior citizen would not be required to file any income tax return or pay any income tax, whatever the quantum of income may be under his control. Please guide me, should I still file the income tax return every year? —V. Pande Ans : The rebate for senior citizens have been increased from Rs. 15,000 last year to Rs. 20,000 this year. Your total income (after deduction u/s 80L, 80D, etc.) up to Rs. 1,63,000 will not attract tax. There is a possibility of saving tax on additional amount by using Sec. 88. The 1-by-six scheme is not applicable to senior citizens. The dividend from MIP has become tax-free in your hands from this year. Even if it was not, you are in the tax-free zone. However, the law requires anyone to file returns in case his income is above the threshold of Rs. 50,000. The rebates can bring your tax down in the no-tax zone, but he has to file the returns. The author may be contacted at anshanbhag@yahoo.com |
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After achieving dizzy heights in
the last two decades and establishing a near synonymity with information
technology education, NIIT has drawn out an elaborate corporate growth
framework which includes a proposed foray into the formal education
sector by setting up a full-fledged university.
