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Amway to make
more products Fiscal deficit
mounts to Rs 85,978 cr Italian firm may
supply engines to Intellectual
property is not patent
Deccan Aviation plans Delhi
flights
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You can get rebate on
minor’s PPF
Forex reserves cross $ 95 b
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Amway to make more products in India New Delhi, November 29 “We have planned some ''big ticket'' launches on one hand and going in for local manufacturing of more products on the other hand”, Mr William S. Pinckney, Managing Director and CEO of Amway India said in an interview. He said between now and August, 2004, the company planned to launch 11 new products. “Most of these products will be under the nutrition and cosmetic category. Through these launches and many more in the future, we hope to position the company as the leading player in the nutrition and cosmetic category”, he said. The business rationale behind these launches is that it would enable the company to offer wider product basked to “independent business owners to help them target more and more consumer segments”. “The local manufacturing provides us the flexibility in terms of offering our products in multiple pack sizes at more convenient prices”, Mr Pinckney said. The company had plans to launch a second-tier of cosmetic brand in India. “This brand will be developed in India”, he said, adding that the company had launched small pack sizes in the market to induce trial purchase. “The objective is to offer different price points to consumers”, Mr Pinckney said. The company was looking at the option of exporting smaller packs to other countries but there were no concrete plans at this stage in terms of the timing and to which countries. “There is a possibility for Amway India to emerge as a manufacturing base to cater to the needs of other markets of Asia, but that is still a couple of years away”, he said. Mr Pinckney refused to be drawn into any comparative analysis of Amway India vis-a-vis other companies such as HLL and P&G. “With regard to Amway, our product sales increased by almost 14 per cent during 2002-03 over last year”, he said. The company was expecting a growth of 8 to 10 per cent in turnover in the current fiscal year. In 2002-03 (September, 2002, to August, 2003), the company had clocked a turnover of Rs 579 crore. The direct selling industry in India has registered a rapid average annual growth over 25 per cent over the past six years. The CEO warned that in the wake of the growing popularity of direct selling, there had been instances of “unscrupulous elements peddling get quick-rich schemes in the name of direct selling”. “Lack of adequate regulatory mechanism makes it much easier for these elements. We are particularly concerned at the re-emergence of pyramid companies or money circulation schemes that masquerade as genuine direct selling ventures”, he said. Though such schemes are proscribed under the Prize Chits and Money Circulation Scheme (Banning) Act 1978, these had not begun to disguise themselves as direct selling ventures, he said. “The existing laws are inadequate to prevent such fake companies. They come into play only when the fraud has
been committed. What we need is a stringent deterrent”, Mr Pinckney said. In fact, the Indian Direct Selling Association (IDSA), of which Amway is a member, had called for separate legal farmework for regulating this line of industry. “The law should also protect legitimate direct selling companies from being harassed by regulators who apply unrelated laws on them”, he said, adding that internationally many countries such as the USA, the
UK, Hong Kong, Malaysia, Japan, Australia, Thailan and Singapore have separate laws for direct selling industry. Globally Amway distribution channel relies on home delivery network. But India is the only country in the world where Amway operates through pick-up centres. Also, this is the only market where Amway offers products in multiple pack sizes, including sachets. He denied that Amway’s revenue primarily came from the subscription fees and said “all money generated from
subscription was ploughed back in the system”. “Globally the ratio of revenue from product sales and kit sales is on the average 90 per cent and 10 per cent. We( Amway India) are very close to that”, he said.
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Fiscal deficit mounts to Rs 85,978 cr
New Delhi, November 29 The growth in fiscal deficit, which constituted 56 per cent of the budgeted level of Rs 1,53,637 crore for the whole year, was despite a marginal decline in the interest payments outgo, the Controller General of Accounts data said. The total receipts improved to Rs 1,67,792 crore during April-October due to good performance in the net tax collections, non-tax revenue and recovery of loans. The receipts till October constituted 58.8 per cent of the budgeted Rs 2,85,158 crore for 2003-04. The government’s total expenditure bloated to Rs 2,53,770 crore, which was 57.8 per cent of the estimated figure of Rs 4,38,795 crore for this year, due to a rise in both plan and the non-plan expenditure. Revenue deficit worsened to Rs 70,856 crore during the first seven months of this year and the budgeted level was Rs 1,12,292 crore for the whole of this year. Reflecting the containment in interest payment outgo, the Centre’s liability stood at Rs 60,355 crore, which was 49 per cent of the budgeted Rs 1,23,223 crore for 2003-04. In the year-ago period, the actual payments constituted 49.1 per cent of the then budgeted amount.
— PTI
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Italian firm may supply engines
to Bajaj, M&M
New Delhi, November 29 "India is an important market in our scheme of things and we plan to set up a research and development centre in the country and further expand operations for which we will invest about $ 10-12 million over the next 2-3 years," Lombardini CEO Giuliano Zucco said here
yesterday. Lombardini currently supplies engines for three-wheeler maker Piaggio which has its plant in Baramati (Maharashtra). "We expect healthy growth in the Indian market and thus are looking to almost double capacity at our plant from the current 75,000 engines per annum," Mr Zucco said on the margins of the India-EU Business Summit. On the proposed centre in India, he said it would be involved in product design and other engineering aspects. "I believe India has a big pool of talented engineers and with greater exposure, they are now ready for product design, which is a highly technical job," Mr Zucco said. The company has so far invested about $ 24 million dollars in the Indian market in the last two years. Mr Zucco also said the company was looking at India to meet the export demands of the Asian region with its increasing portfolio here.
— UNI
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Intellectual property is not patent alone: expert Jalandhar, November 29 These observations were made by Mr J.P. Mishra, Assistant Director General of the Indian Council of Agricultural Research, in his keynote address during a national seminar on “Implications of Intellectual Property Rights — The Indian Scenario” organised by the local Apeejay College of Fine Arts here today. Mr Mishra said the prospects of enhanced investment in the agriculture sector through intellectual property rights (IPRs) would depend on the configuration of the private sector, the level of involvement of public sector in agriculture and the size of market of new products. “The developing countries can take advantage of the provisions of IPRs, if these will promote their indigenous capital markets, corporate sector and financial infrastructure”, he said.
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by A. N. Shanbhag
You can get rebate on minor’s PPF Q:
If a PPF A/C is opened in the name of a minor then who is entitled to get rebate u/s 88 of the I. T. Act after minor becoming major (whether guardian or that major child). If amount is deposited twice a year in this case, can guardian claim the rebate of first deposit and the major child of second deposit assuming that both have made payment from their individual saving a/c. — Himanshu Asija A: The ceiling on the aggregate contributions to be Rs 70,000 to accounts of self and all minor children of whom he is a guardian (and also HUF and AOP of which he is a member). If one exceeds this and the irregularity comes to the notice of the account office, it will return the excess contribution without any interest to the account holder. According to ITA, contributions by the assessee to PPF accounts of the spouse and children, major or minor, married or otherwise, male or female, dependent or not, are eligible for the rebate. As a matter of fact, a parent may contribute even in the name of married daughter and still claim rebate. Such contributions are construed as gift. At its maturity, if the account is closed and the funds are reinvested, clubbing provisions become applicable in the case of spouse and minor children. If the child is major at this stage, there is no clubbing. The income of minor children is clubbed in the hands of the parent and, therefore, the rebate is also available to the parent. There are two exceptions. One, the child has his own income earned because of manual labour or special skills and two, the child is physically or mentally challenged. In such cases, the rebate can be claimed by the child and the parent. The person (parent or the major child) who deposits the amount in the PPF, can claim the rebate.
Redemption of US-64 Q:
I have redeemed 5,500 units of us-64 units at Rs 12 per unit following the closure of the scheme from June, ’03, and in the process incurred a capital loss of Rs. 12,000. Indexed loss works out at approximately Rs. 33,000. Can I claim the set off of this capital loss against the capital gains made on some other shares sold during the same year? — Ghanshyamdas Bhuneja A: A long-term capital loss cannot be set off against short-term capital gains. You can set off this indexed loss against any long-term capital gains earned during the same year from other sources. If it is not possible to do so or if some balance remains after such set off, you can carry it forward for similar set off during the next year. Such carry forward is possible for eight successive years. Section 10(33) of the ITA has been amended by the FA03 to make capital gains arising from sale of units of US-64 on or after 1.4.02, will be exempt from tax. It is a known fact that almost all unit holders will be incurring a loss. Then, what is the purpose of the proposal? If the gains are exempt, the losses are also exempt and these cannot be set off against any gain, short or long.
Senior citizen benefit Q:
I am of 65-year from Sept 15, 2003. Kindly advise me if I will be eligible for senior citizen benefit for the AY 2003-04 (FY 2004-05). — Bhagwan Singh A: Section 88B states that an individual who is 65 years of age or more at any time during the previous year will be entitled to the rebate. Consequently, you can claim the rebate in the same year even if your birthday was on March 31. Since you complete 65 years on 13.09.2004 you will be entitled to the income-tax rebate up to Rs 20,000 for FY 04-05 (AY 05-06) provided the same benefit is continued. Similar is the case with Section 80U and Section 80DD which offer deduction for handicapped persons. The deduction is available if the person is suffering from a permanent disability at the end of the previous year.The deduction is available for the entire year irrespective of the date on which the person began suffering from the handicap. Unfortunately, there is no such clarity in the case of minor children for the clubbing purposes even in ITA. I am sure that this is an act of omission and the authorities will correct it in due course. In the mean time, different ITOs can take different views. For professional tax (Maharashtra) the provision granting exemption to senior citizens states, “The persons who have completed the age of 65 years, provided that such mental retardation will be duly certified by a registered medical practitioner”!!! This implies that anyone who celebrates his 65th birthday becomes mentally retarded from the next day onwards. After completing 65 years, I claimed the exemption from professional tax, though my mental faculties were in proper place. I was denied the benefit because I was not over 65 years of age during the entire year! If you are still working, you will be entitled to exemption from professional tax only from FY 05-06. Should the authorities be allowed to adopt different definitions for different departments? I wonder....
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Forex reserves cross $ 95 b
Mumbai, November 29 According to the RBI’s weekly statistical report, the foreign currency assets which rose by $ 1.71 billion to $ 91.45 billion, contributed the entire growth in the total forex reserve, while the gold reserve and the Special Drawing Rights (SDRs) remained unchanged at $ 3.92 billion and $ 3 million.
— UNI
IOC elevated to 191 position
Guwahati:
The Indianoil Corporation (IOC), the only Indian company in the global Fortune 500 list, has been elevated to the 191th position in its global ranking. The petrochemical sector major was in the 226th position till recently. Announcing this to newsmen here today the IOC’s subsidiary Guwahati Refinery Limited (GRL) General Manager J P Guha said in line with IOC’s policies GRL had undertaken several initiatives to meet the challenges of the open market.
— UNI
HLL not to stop
Assam operations
Guwahati:
Hindustan Lever Ltd, facing threat to its employees from ULFA, will not withdraw its operations from Assam following an assurance by Chief Minister Tarun Gogoi that the company’s interests would be protected, HLL sources said. HLL Director Plantation S K Dhal and Corporate Director of Human Resource Development Gurdeep Singh met Gogoi here yesterday and expressed concern over the security situation following the ULFA rocket attack on its executive’s residence in Doom Dooma, Upper Assam, on Thursday.
— PTI
SBI to open branch in Israel
Jerusalem: The State Bank of India is mulling opening a branch in Israel to finance trade deals between India and Israel, which are expected to increase in the coming years, officials said. The application to this effect has already been submitted to the Bank of Israel and the bank is now engaged in deciding the "scale of its operation" meaning "whether to open an office or a full fledged branch."
— UNI
Bank of India cuts deposit rates
Mumbai:
After cutting the prime lending rate by 0.5 per cent, the Bank of India has revised the interest rates on domestic term deposits from December 1. The interest rate for maturity periods of 15-45 days up to 180-364 days has been reduced by 0.25 per cent, the bank said in a release here today. The deposits of 14-45 days would now be offered a rate of 4 per cent (4.25 per cent earlier) while in the case of 180-36 days, it stood revised to 4.75 per cent (5 per cent), it added.
— PTI
New ECB norms to hit industry
Mumbai:
The revised guidelines on external commercial borrowings (ECBs) announced recently prohibiting the non-bank financial institutions (NBFIs) to raise ECBs, will the industry and impede the growth of several infrastructure projects being financed by NBFIs. In a letter to the Finance Minister Jaswant Singh, the Finance Industry Development Council, a proposed self-regulatory organisation for all registered NBFIs, said the change in the ECB policy would severely hit the financial services industry particularly those engaged in financing the long-term infrastructure projects.
— UNI
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Amway India has embarked a twin-track growth strategy involving more product launches coupled with increased manufacturing of products in India. The move is aimed at positioning the company as a major player in the nutrition and cosmetic products industry in the medium term.