THE TRIBUNE SPECIALS
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TERCENTENARY CELEBRATIONS
B U S I N E S S

India Inc meets Finance Minister with proposals galoreP Chidambaram
New Delhi, June 4
Captains of Indian industry today placed a host of suggestions before the Finance Minister P Chidambaram, including widening of the tax base while raising the exemption limit to Rs 1 lakh.

ONGC Videsh to invest Rs 7500 cr for drilling abroad
New Delhi, June 4
ONGC Videsh Limited (OVL), a wholly owned company of the Oil and Natural Gas Corporation (ONGC), has announced to invest Rs 7,500 crore in oil exploration sector in the near future.

OPEC opens taps, analysts say it’s a compromise
Beirut, June 4
The UPA Government is mulling over evolving a system for insulating domestic economy from the volatilities of international oil market. An OPEC decision to hike its official oil production ceiling, which left the market unimpressed, was a compromise between Iran and Saudi Arabia, officials and analysts said today.

The UPA Government is mulling over evolving a system for insulating domestic economy from the volatilities of international oil market. Among the proposals under consideration are cutting import and excise duty on crude oil and petroleum products. Petroleum Minister Mani Shankar Aiyar will use the time till the next price review, slated for June 15, to discuss with Finance Minister P. Chidambaram fiscal measures to control oil price hike. — Reuters photo

Oil under $39 globally
O
il prices eased further below $ 40 a barrel on Friday as an OPEC deal to pump more crude outweighed underlying fears of political instability in top producer Saudi Arabia.

Editorial: Politics of oil


Bollywood actresses Manisha Koirala and Kim Sharma at the launch of Loewe perfume in Mumbai on Thursday evening.
Bollywood actresses Manisha Koirala and Kim Sharma at the launch of Loewe perfume in Mumbai on Thursday evening. — PTI

EARLIER STORIES

Airport privatisation not right, says Left
June 4, 2004
FM in Mumbai to lift sagging Sensex, investors’ morale
June 3
, 2004
Steel to remain stable this month
June 2
, 2004
Income in Malaysia not taxable in India: SC
June 1
, 2004
RBI panel for closure of SFCs
May 31, 2004
Cut excise duty on aviation fuel, Patel to Chidambaram
May 30, 2004
CMP means cut more points for market
May 29, 2004
Reforms to continue, PM tells industry
May 28, 2004
MTNL won’t be privatised, says Dayanidhi Maran
May 27, 2004
Deb plans to revitalise sick PSUs
May 26, 2004
 

Held for issuing fake Reliance mobile receipts
New Delhi, June 4
Reliance Infocomm has unearthed a case of fraudulent activities, where the company had filed a formal complaint against three Delhi residents. The police has arrested the accused.

Microsoft, HP step up outsourcing
Washington, June 4
Microsoft will increase the number of staff at its software development centre in Hyderabad from 200 to around 500 by 2005 while Hewlett-Packard is setting up a back-office accounts processing facility in Bangalore for expanding outsourcing operations in India.

Connect DSL launched
Chandigarh, June 4
Connect today announced the launch of Connect DSL (Digital Subscriber Line), the broadband Internet service, in Chandigarh and Punjab.

ADB to help out in pension plan
New Delhi, June 4
The government has engaged the Asian Development Bank to provide technical assistance in implementing the new pension scheme in the unorganised sector.

Corporate news

L&T net profit rises 7.7 pc
Mumbai, June 4
Larsen & Toubro (L&T) has posted a net profit of Rs 286.16 crore for the quarter ended March 31, 2004, as compared to Rs 265.63 crore for the quarter ended March 31, 2003, an increase of 7.72 per cent.

  • LIC grows 190 pc

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India Inc meets Finance Minister with
proposals galore

Tribune News Service

New Delhi, June 4
Captains of Indian industry today placed a host of suggestions before the Finance Minister P Chidambaram, including widening of the tax base while raising the exemption limit to Rs 1 lakh.

The pre-Budget consultations got underway here with first agricultural economists and later industry leaders meeting the Finance minister today.

The exercise was discontinued by Mr Chidambaram’s predecessor, Mr Jaswant Singh, and has now been reintroduced again by the new Finance Minister after a gap of two years.

President of Federation of Indian Chambers of Commerce and Industry (FICCI), Mr Y K Modi said that tax base should be widened by restructuring the tax rates. Income slabs and tax rates for individuals should be remodelled with maximum rate of 30 per cent made applicable on income over Rs 10 lakhs and exemption limit raised to Rs 1 lakh.

“Tax rate should be considerably widened through better voluntary tax compliance,” he said, adding that agriculture income should be taxed beyond Rs 5 lakh at a flat rate of 15 per cent.

Similar views were echoed by President of Associated Chambers of Commerce and Industry of India (Assocham) Mahendra K Sanghi who emphasised the need for moderating the indirect tax rates to make product affordable to large population, widen the tax base to increase the tax GDP ratio.

Moreover, Mr Sanghi said, there was a need to simplify the tax structure and procedure, which reduces the transaction cost and encourages voluntary compliance.

On indirect taxes, Mr Modi said that a comprehensive Value Added Taxation (VAT) system should be introduced at the earliest and the CENVAT ceiling should be fixed at 16 per cent.

Mr Modi said that all services should be covered under the service tax and exempt only public services, essential public utilities and important merit goods. All taxable services should be eligible for VAT/CENVAT credit.

President of Federation of Indian Export Organisation (FIEO) M. Rafeeque Ahmed suggested that the benefits of Section 80 -HHC should be continued till the year 2010.

Since the benefits were introduced in April 1983, the FIEO president said it had greatly helped in promoting exports, especially of small and medium enterprises.

Mr Ahmed suggested that the government could think of introducing a scheme earlier available under Section 35-A of the Income Tax Act, which allowed deduction equivalent to 133 per cent of the investment for being ploughed back to business.

The PHD Chamber of Commerce and Industry (PHDCCI) urged the Finance Minister to ensure continuous improvement in direct tax revenue collection for which the tax slabs be re-arranged and tax rates further reduced to encourage voluntary compliance.

The maximum marginal tax rate of 30 per cent should become applicable to income above Rs 3 lakh. In principle, this should be to tax only the real income. Therefore, all genuine business expenses be allowed deduction and the value of any benefit given or expense reimbursed to the employees to enable them to discharge their duties effectively should not be charged as tax, the PHDCCI said.

Agriculture economists demanded a restructuring of the farm credit scheme. Former Chairman of Commission on Agriculture Costs and Prices (CACP) Abhijeet Sen said already, a number of schemes related to agriculture exist and there is no need for a fresh one.

“But credit for the farm sector should be stepped up,” he said even as he said bad loans should be written off as part of relief to farmers.

The domestic poultry industry demanded the creation of a disaster fund in the backdrop of the Rs 2,000 crore loss the industry suffered in February-March this year.

Who suggested what at pre-Budget meet

  • FICCI - Widen tax base, restructure tax rates
  • Assocham - Moderate indirect tax rates, widen the tax base
  • FIEO - Continue benefits of Section 80 -HHC till 2010.
  • PHDCCI- Improve direct tax revenue collection, rearrange tax slabs
  • CACP- Restructure farm credit scheme.
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ONGC Videsh to invest Rs 7500 cr for drilling abroad
Tribune News Service

New Delhi, June 4
ONGC Videsh Limited (OVL), a wholly owned company of the Oil and Natural Gas Corporation (ONGC), has announced to invest Rs 7,500 crore in oil exploration sector in the near future.

The funds will be utilised to buy new assets and fields in other countries for oil exploration, Mr R S. Butola, Managing Director, OVL said here today.

Addressing a press conference, he said: ”The company will make a capital expenditure of around Rs 3,000 crore in various producing and other assets while Rs 600 crore in development of two newly-acquired fields in Sudan. The balance amount of nearly Rs 3,900 crore has been earmarked to buy 50 per cent equity stake of Shell in Angola’s producing field, which has the potential to produce 25 million tonnes of crude oil.”

He claimed OVL had already invested Rs 9,690 crore in different assets, including major acquisitions in Sudan, which were giving a share of more than three million tonnes of crude oil every year.

Mr Subir Raha, Chairman , OVL, said given its rapid growth in the past three years, the company is expected to achieve targets of sourcing 20 million tonnes of oil and oil equivalent gas per year by 2011-12 instead of 2020.

Mr Butola disclosed that oil fields in Sakhalin-I, Russia and in Block 18 at Angola were under development. The OVL has already made discovery of oil reserves in Block A in Myanmar early this year, he said. “Exploration is in progress in Iran, Syria, Libya and Sudan. In the Farsi Block in Iran, OVL will be the operator as it holds hundred per cent stake.”

Regarding the financial results of the company he said, the OVL had earned net profit of Rs 428.53 crore in 03-04, up by 626 per cent over Rs 58.99 crore in the previous year.

The gross revenue of the company had achieved Rs 3502.28 crore registering a growth of 1400 per cent over Rs 232.8 crore in 02-03. The OVL produced 3.9 million tonnes of oil and oil equivalent gas during 03-04 that was up 1435 per cent from 0.25 million tonnes in 02-03 he said.
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OPEC opens taps, analysts say it’s a compromise

Beirut, June 4
An OPEC decision to hike its official oil production ceiling, which left the market unimpressed, was a compromise between Iran and Saudi Arabia, officials and analysts said today.

The decision, which aligns the cartel’s stated output target with their real current levels, did not satisfy a market that had been counting on an immediate increase of 2.5 million barrels per day to calm fears of future shortages owing to political instability in the Middle East, analysts said.

An official close to the 11-member Organisation of Petroleum Exporting Countries (OPEC) said the decision to lift its official ceiling by 2.5 million bpd in two stages by August 1 was a compromise between Iran and Gulf Arab states led by Saudi Arabia.

Iran had feared a price collapse if more oil gushed onto the market and had suggested a ceiling increase of one to 1.5 million bpd, the official explained.

Experts also said a rift had opened within OPEC between members with spare production capacity — Saudi Arabia and to a lesser extent the United Arab Emirates and Kuwait — and some others that were already at maximum output.

Consumer countries were also worried because of instability and political tension in OPEC members Iraq, Venezuela and Nigeria. The organisation controls about one-third of the global oil supply.

The cartel said a meeting would be held at its headquarters in Vienna on July 21 “to review market developments.” — AFP
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Oil under $39 globally

Oil prices eased further below $ 40 a barrel on Friday as an OPEC deal to pump more crude outweighed underlying fears of political instability in top producer Saudi Arabia.

US light crude fell 45 cents to $38.83 a barrel, following an 80-cent drop on Thursday when OPEC agreed a two-stage output increase of 2.5 million barrels a day in July and August. Brent crude in London was down 41 cents at $35.99 a barrel. — Reuters
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Held for issuing fake Reliance mobile receipts
Tribune News Service

New Delhi, June 4
Reliance Infocomm has unearthed a case of fraudulent activities, where the company had filed a formal complaint against three Delhi residents. The police has arrested the accused.

The three accused, Anil Sharma, Mukesh Kumar and Yogendra Kumar, used to collect money from unsuspecting Reliance India Mobile customers by issuing fake receipts. The case surfaced when a customer came to Reliance Infocomm office and complained that in spite of making the payments; the customer’s services had not been reactivated. Preliminary investigations revealed the receipt with the customer was fake and not issued by the company.

Further investigations revealed the involvement of the three accused in a racket in printing fake receipts and collecting money from Reliance India Mobile subscribers, by running an office from Patel Nagar in West Delhi.
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Microsoft, HP step up outsourcing

Washington, June 4
Microsoft will increase the number of staff at its software development centre in Hyderabad from 200 to around 500 by 2005 while Hewlett-Packard is setting up a back-office accounts processing facility in Bangalore for expanding outsourcing operations in India.

Microsoft is also increasing the headcount at another centre in Hyderabad that handles application development for the corporations in-house IT requirements and already employs about 125 staff, media reports here said.

Meanwhile, HP, which has handled a large chunk of its own global accounting functions from a subsidiary in Bangalore for more than three years, is now offering similar back-office services from India to its customers. — UNI
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Connect DSL launched
Tribune News Service

Chandigarh, June 4
Connect today announced the launch of Connect DSL (Digital Subscriber Line), the broadband Internet service, in Chandigarh and Punjab.

The service is currently available in Chandigarh, Ludhiana and Jalandhar. It will be rolled out into Amritsar, Patiala and Bathinda in the next month.

The function to mark the launch was attended by Mr Vivek Atray, IT Secretary, (UT Administration).
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ADB to help out in pension plan

New Delhi, June 4
The government has engaged the Asian Development Bank to provide technical assistance in implementing the new pension scheme in the unorganised sector.

“We are working with the Pension Fund Regulatory and Development Authority for the new pension plan for the unorganised sector. We will submit a report by April, 2005,” the ADB’s pension product expert Graham Bird said. — PTI
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Corporate news

L&T net profit rises 7.7 pc

Mumbai, June 4
Larsen & Toubro (L&T) has posted a net profit of Rs 286.16 crore for the quarter ended March 31, 2004, as compared to Rs 265.63 crore for the quarter ended March 31, 2003, an increase of 7.72 per cent.

Announcing the results, the company said the total income has increased from Rs 3,310.3 crore in the MQ-03 to Rs 3,688.48 crore in the quarter ended March 31, 2004. It had posted a net profit of Rs 532.75 crore for the year ended March 31, 2004, as compared to Rs 433.1 crore for the year ended March 31, 2003.

The total Income had increased from Rs 9,637.53 crore in the FY-03 to Rs 9,999.38 crore in the year ended March 31, 2004.

L&T has informed BSE that the Board of Directors today allotted 12,44,01,796 equity shares of Rs 2 each fully paid-up, including fractional entitlements convertible into fully paid-up shares, to the shareholders as on the record date May 27, 2004, in the restructured capital of the company.

Further, the directors have also recommended dividend of Rs 16 per share of Rs 2 each on 12,44,01,796 shares.

LIC grows 190 pc

Restructuring of the LIC has paid off with the corporation logging a record 190 per cent growth at Rs 755.22 crore in pension and group insurance business during April-May this fiscal.

“The premium collection for pension and group schemes recorded a 190 per cent growth at 755.22 crore in April-May, 2004, as compared to Rs 260.46 crore during the same period last year,” LIC’s Executive Director S R Krishnaswamy said here today. — Agencies
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BRIEFLY

Inflation crosses 5 pc
New Delhi, June 4
A sharp increase in the prices of fruits, vegetables, tea and soyabean pushed up the annual rate of inflation for the week ended May 22 by 0.35 per cent to 5.02 per cent. The Wholesale Price Index-based inflation rate was 4.67 per cent in the previous week and 6.32 per cent in the year-ago period. — UNI

NTPC shares
New Delhi, June 4
The NTPC is understood to have secured an exemption from SEBI for 5 per cent public issue of shares, paving the way for an IPO later this year. The market watchdog has granted a waiver to the NTPC for floating a 5 per cent public issue of shares, slated to hit the market in August as against the mandatory listing norm of 10 per cent, official sources said. — PTI

Radio Mirchi
Chandigarh, June 4
Airtel Punjab’s subscribers will now be able to tune-in to Radio Mirchi programmes on their mobile handsets. They will have to dial 646 and would have a choice of listening to a variety of programmes. The normal VAS rates of Rs 6 per minute will apply. — TNS

Hutch
Mumbai, June 4
Cellular service major Hutchinson Essar today launched a range of GPRS services for both its pre-paid and post-paid international roaming mobile users and international travellers visiting India. The services can be enjoyed by Hutch and Orange users, a Hutch release said here. — PTI

LSE trading
Ludhiana, June 4
Ludhiana Stock Exchange (LSE) is all set to launch futures trading in commodities through its new company LSE Commodities Trading Service Ltd. LSE Commodities has already obtained the certificate of commencement of business from the Registrar of Companies, Jalandhar. — OC

Rs 5-note
Mumbai, June 4
The RBI will shortly issue Rs 5 denomination notes with inset letter in the Mahatma Gandhi series, bearing the signature of Governor YV Reddy. Except for the change in the inset letter, the design of these new notes will be similar in all respects to those issued in Gandhi series, an RBI release said here today. — PTI

NIIT
Bangalore, June 4
IT education major NIIT is taking its learning business to the US and Europe as part of new growth strategy even as it is bullish on the Chinese market, a top company executive said today. — PTI
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