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Banking reforms’ roadmap next week
ONGC to lose $ 340 m for stake in Cairn oilfields
Shaadi.com offline version in city soon
Oracle to cut 5,000 jobs
as it integrates PeopleSoft
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When PM’s plane landed on paraffin lamp-lit runway
Avoid speculation as market is overheated
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Banking reforms’ roadmap next week New Delhi, January 15 “It (the roadmap) is being fine-tuned. We are dotting the i’s and crossing the t’s. RBI Governor Y. V. Reddy has come for this purpose”, Mr Chidambaram said after a meeting with the RBI Governor here. The roadmap is expected to define the contours of the banking reforms policy and there are expectations in the banking circles that it would also lay down the guidelines for consolidation among public sector banks. Dr Reddy also met the Economic Affairs Secretary Rakesh Mohan, apparently to discuss the proposed banking policy. The roadmap will be unveiled after the approval of Prime Minister Manmohan Singh, the Finance Minister said. Under the existing norms, foreign banks can pick up 49 per cent stake in the Indian private banks. Although an announcement had already been made that the FDI ceiling would be increased to 74 per cent, detailed guidelines to this effect have not yet been issued. The RBI had circulated draft guidelines for this purpose in July last.
Utilising forex
Union Budget is likely to come up with a roadmap for utilising burgeoning foreign exchange reserves for infrastructure development. Planning Commission Deputy Chairman Montek Singh Ahluwalia and Planning Secretary Rajiv Ratan Shah met Finance Minister P. Chidmbaram today in this regard. “We had a very successful meeting. It was part of the Budget discussions. Both Gross Budgetary Support and utilisation of foreign exchange reserves for infrastructure were discussed,” Montek told reporters after nearly two-hour long meeting. “I cannot say anything now,” he said, indicating that the Budget may have details for utilising forex reserves now at nearly $ 130 billion. Planning Commission had asked for stepping up GBS to Rs 1,95,000 crore, but indications are that it may get about Rs 1,76,000 crore in the Budget. In 2004-05 Budget, GBS allocation was Rs 1,45,000 crore. Montek had earlier floated the idea of utilising $ 5 billion of forex every year for the next three years to “fill critical gaps in infrastructure”. But RBI had said using forex for building infrastructure would lead to increased money supply affecting inflation apart from widening the fiscal deficit. In support of his proposal, Montek suggested monetisation to tackle the problem of an increase in fiscal deficit, going to the Parliament to amend the FRBM Act and increasing imports to negate the inflationary pressures. The Prime Minister’s Trade and Industry Advisory Council, which consists of leading industrialists, has also come out in favour of Montek’s proposal and suggested use of five per cent of forex reserves for development of infrastructure. Given its focus on creating world class infrastructure like airports, roads and ports, which calls for massive investments, it is likely that the government would consider using forex reserves for infrastructure projects, which would also help attract foreign direct investment.
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ONGC to lose $ 340 m for stake in Cairn oilfields
New Delhi, January 15 “The exercising of walk-in rights of 30 per cent will bring us the liability of paying 100 per cent royalty and production cess equivalent to our share (30 per cent). On these two counts, we estimate a loss of $ 340 million (Rs 1,400 crore) over the life of the field,” the ONGC Chairman and Managing Director Subir Raha said here. The two fields are targeted to produce between 80,000 and 1,00,000 barrels per day from the end of 2007. The ONGC had exercised its walk-in rights to take 30 per cent stake in the two fields late last month. He said as per production sharing contract, a company was needed to pay Rs 1,800 per tonne as cess but in the case of ONGC, “Cairn has agreed for Rs 900 per tonne as royalty.” Though the oil finds in Rajasthan are the largest in more than two decades, the ONGC was earlier reluctant to exercise its right to take 30 per cent stake in the block because of the burden of paying royalty and cess.
— Agencies
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Shaadi.com offline version in city soon Chandigarh, January 15 Shaadi Point is planned as a network of centres (retail outlets) across the nation, which is connected to the central database of prospects (eligible brides and grooms) through a proprietary technology, especially built for matrimonial purposes. Such has been the attraction of City Beautiful that the company, which has 20 centres spread over Maharashtra, Gujarat, Madhya Pradesh and Goa, will start four Shaadi Points from Chandigarh itself. “We plan to launch two centres from Chandigarh by February and two more after three months,” said Mr Omprakash Hassanandani, Business Head, Shaadi Point, while interacting with The Tribune from Mumbai. When asked whether this be in direct competition with their own online revenue model, Mr Hassanandani pointed out that their matrimonial portal and Shaadi Point would complement one other. “Shaadi.com operates in the online space and Shaadi Point services the offline space. While Shaadi Point leverages on the expertise and the brand awareness of Shaadi.com, the portal leverages the distribution reach of Shaadi Point,” he says. He avers that while Shaadi Point is a brick-and-mortar version of Shaadi.com, they are not shifting from the click to the brick-and-mortar model. “We’re only adding the brick-and-mortar model to the click model,” he adds. “The Indian marriage market is estimated to be around Rs 50,000 crore. Though it would be difficult to estimate the zone wise size of this industry, North India holds an important position in our minds. After Chandigarh, we will be looking at other major cities in the North, gradually,” he disclosed.
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Oracle to cut 5,000 jobs as it integrates PeopleSoft
San Francisco, January 15 The lay-offs, which were in line with Wall Street expectations, represent about 9 per cent of the companies’ combined work force of 55,000, Oracle said. Financial terms, including charges or cost savings, were not disclosed. Oracle also pledged to keep more than 90 per cent of PeopleSoft’s product development and support employees and deploy new versions of PeopleSoft’s software over time. The acquisition was concluded a week ago. The ongoing support of PeopleSoft products — used by companies to manage payroll, human resources and manufacturing operations — was a point of contention during the 18-month takeover battle, with many high-profile customers fearing they would be left hanging. “Oracle will have the resources to deliver on the development and support commitments we have made to PeopleSoft customers over the last 18 months,” Oracle Chief Executive Lawrence Ellison said in a statement. He has pledged to provide technical support for PeopleSoft software for at least 10 more years. Notifications of lay-offs began on Friday.
— Reuters
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by A.N. Shanbhag
Avoid speculation as market is overheated
Q: I have booked profit in long-term investment. When should I invest in equity in such over-heated market? Will you be kind enough to name such scrip for long-term and short-term capital gain? — Prakash A. Joshi A: I have to regretfully inform you that I cannot by law name any scrip that you must invest in. All that I have to state is that if I were you, and I emphasise that if I were you, I would refrain from entering in a market that you so rightly called “overheated”. In my experience, it is almost impossible to catch the bottom or the peak in any market. However, one would do well if one simply follows the dictum, “Buy low, sell high” and the market valuations are pretty high as of now. In fact as I write this, the market’s lost around 200 points.
Holding period
Q: I shall feel obliged if you clarify my following doubts: 1. What shall be the income tax liability of a salaried person, against his salary plus short-term capital gain? I mean, will the whole income be clubbed for income tax slab purpose of will both be calculated separately? 2. If a person in receipt of STCG but his total income in FY falls below Rs 50,000, is he or she too liable to pay STCG tax @10 per cent? 3. What is the minimum holding period of units of MF as well as shares of companies, to avoid dividend stripping? — Vinod Kumar A: 1. The short-term or long-term capital gains form a part and parcel of the total income for the purpose of determining the applicability of tax rebates u/s 88 (PPF, LIC, etc.) or u/s 88D (no tax up to Rs 1 lakh). However, for calculating the tax payable, the STCG from shares or units of equity-based schemes will form a separate block and charged at 10 per cent. The STCG earned from assets other than shares and equity-oriented units would form a part of the normal income and hence be added to normal income to determine the slab. 2. Your second query is best explained in terms of an example. If the total income is say, Rs 30,000 and STCG (from shares or equity MFs) is Rs 40,000, the person will have to pay tax on STCG of Rs. 20,000 (= 30000 + 40000 – 50000). 3. The minimum holding period is three months before the record date of declaration of dividend in both the cases and three months and nine months after the record date for equities and units, respectively.
From Po to bank
Q: I want to know whether PPF a/c can be transferred from post offices to banks and whether post offices can refuse to do it? What is the procedure to be followed at the post office and the bank? — Kadamba A: The PPF Rule states: “A subscriber may apply for transfer of his account from one accounts office to another.” There are no ifs and buts. All that you have got to do is to apply to the office where you have got an account requesting for the transfer to any other office of your choice.
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