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Mouse
fails to click in postal department Telecom
venture in Nepal worries India More
credit for agro sector sought New OBC
branches in region soon |
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Overseas
allowances not
Gift
above Rs 25,000 is taxable
Textiles
is the sector to watch
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Mouse fails to click in postal department New Delhi, March 27 Out of 1,55,837 branches, the Department of Posts has computerised only 1,772 post offices, including 506 head offices by March 2004. At the current pace, say critics, the department will take decades to computerise all its branches to provide services to the customers. The department, which is incurring 90 per cent of its revenue on an ever-increasing salary and pensions of its around six lakh employees, is dependent on the budgetary support from the Centre to sustain its “universal social obligations.” The revenue deficit of the department has increased from Rs 1,364.40 crore in 2002-03 to Rs 1,386.80 crore in 2003-04 and is now expected to come down to Rs 1,377.77 crore in 2004-05. A Parliamentary Standing Committee, headed by Mr M.M. Pallam Raju, in its report tabled in the Parliament, has expressed its displeasure over the “fate of computerisation project of the department.” “An amount of Rs 836.27 crore had been provided by the Planning Commission for the computerisation of 5616 post offices and other offices during 10th plan (2002-07), but due to delay in Cabinet approval, only Rs 8.38 crore and Rs 37.5 lakh could be utilised for the project in first two years of the Plan period,” the committee noted. “The department is not serious enough to execute its vital and important schemes of computerisation, which will not only facilitate effective networking of postal services but also be helpful in increasing efficiency, downsizing of huge non-plan expenditure and for generation of more and more revenue by providing efficient consumer friendly service to the customer.” With the entry of courier services and fall in letter writing trends among public, the postal department’s business has come down substantially. Though, business volume from speed post has increased from Rs 77.95 crore in 1997-98 to Rs 298.35 crore by March 2004, yet its share is only about 10 per cent in the market. The department is incurring losses in 24 services out of total 35 services offered to the customers during last year. “Considering budgetary constraints, the government should consider public-private partnership to infuse information technology in the postal department for providing critical services in the rural and semi-urban areas,” said a senior official of the department associated with commercial activities. He said: “The government can allow the department to hire computer services on lease from private players, on the pattern of government schools. To make the scheme viable, it can offer tax incentives and other benefits. It will result in additional revenue to the department through enhanced business and cost reduction besides better services to the customers,” he added.
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Telecom venture in Nepal worries India
Kathmandu, March 27 The Indian embassy here has issued a statement warning that the impasse could erode foreign investors’ confidence and undermine India-Nepal economic ties. United Telecom Limited (UTL) is the beleaguered joint venture in Nepal in which three Indian telecom giants - Maharasthra Telephone Nigam Ltd, Videsh Sanshar Nigam Ltd and Telecommunications Consultants Ltd - have invested about Nepali Rs 3 billion. “We trust that UTL will be allowed to operate in an unfettered manner in accordance with the terms of its licence,” the statement added. The venture, which is the first and only private service provider in Nepal’s telecom sector, was dealt a blow when King Gyanendra assumed absolute power on February 1 and clamped a state of emergency, cutting telephone lines across the country. Though state-owned telephone service provider Nepal Doorsanchar was allowed to resume normal telephony services within a week, the regime kept UTL services suspended till March 17, for nearly seven weeks, on the ground that UTL phones operate on the same wireless technology used by mobile phones and can be misused by Maoist insurgents. UTL, which lost nearly Nepali Rs.2 million daily during the seven-week closure, has been told not to take on new subscribers until further notice.
— IANS
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More credit for agro sector sought New Delhi, March 27 The chamber has suggested that commercial banks should diversify their credit deployment into agro-business, food processing units, rural housing, besides village electricity schemes. In addition, they should shift towards rural, semi-urban, SMEs, IT and software professionals in view of their growing importance.“The commercial banks should adopt flexible and supportive attitude to finance the aforesaid sectors with a view to generating employment and growth of income as envisaged in the recent Budget proposals for 2005-06.” In a note submitted to the RBI governor, Assocham President, Mr Mahendra K. Sanghi said that banks should not insist on collateral and guarantees.
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New OBC branches in region soon Chandigarh, March 27 The Deputy General Manager of the bank for Chandigarh Region, Mr V.K Kashyap told TNS that two new branches would be opened in Paonta Sahib and Chakkdana (Nawanshahr), which have already been sanctioned by the RBI. Eight new ATMs would be put in Ropar, Baddi, Shimla, Mohali, Solan, Nawanshahr, Palampur and Chandigarh. Talking about the effect of the merger of the loss-making Global Trust Bank (GTB) with Oriental Bank of Commerce (OBC), Mr Kashyap said since only one branch in Chandigarh was merged with the branches under their jurisdiction and that too had no loan defaulters, there was no negative impact on the results of the bank for this region in the current year.
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by S.C. Vasudeva Gift above Rs 25,000 is taxable
Q Is a gift received from a friend taxable in my hands? — Ashish, Chandigarh A. As per the provisions of Section 56 of the Act, any sum of money received by you in excess of Rs 25,000 from your friend will be taxable as income in your hands provided it is not received by you on the occasion of your marriage.
Sale of plot
Q. I was allotted residential plot by Huda on May 5, 1990, for a total price of Rs 1,94,768. I sold it on March 5, 2005 for Rs 15 lakhs. (i) How much will be the long-term capital gains (LTCG) and method of its calculation. As the annual year will close on March 31, 2005, should I deposit the same in the bank before the said date or at a later date. It may please be specified? (ii) To save tax on long-term capital gains, can I purchase residential plot for Rs 8 lakh and pay tax on the remaining LTCG of Rs 7 lakh or can I invest part of the LTCG amount in certain infrastructure bonds and spend rest of the amount for purchasing residential plot, as I have only one house and no residential plot. I am below 65 years of age and get government pension of Rs 10,000 per month? (iii) What are those infrastructure bonds (with lock-in period) in which I can invest to save tax on LTCG amount. On maturity, LTCG amount invested in certain bonds, if deposited in my saving bank account, is tax free or not? (iv) Also please intimate which of the infrastructure bond is the most beneficial, for investment of LTCG amount. — A.S. Chauhan, Panchkula A. The answers to your queries are as under: (i) Computation of capital gain Sales consideration- Rs 15,00,000 Less: Indexed cost of acquisition (1,94,768 x 480/ 182) - Rs 5,13,674 Long term capital gain (Rs 9,86,326) Tax on above@20 per cent Rs 1,97,265 Add: Education cess @2 per cent Rs 3,945 Rs 2,01,210 The amount of Rs. 15 lakh will have been deposited in a bank account immediately after the sale of the property. (ii) The exemption under Section 54 of the Income Tax Act, 1961 (The Act) can be availed by you provided you invest the amount of capital gain in the purchase or construction of a residential house property. Such investment in a new residential house is required to be made within one year before or two years after the date of transfer in case of purchase of house. However, for construction of a house a period of three years from the date of the transfer is allowed. Mere purchase of a plot will not entitle you to get exemption from capital gain tax. To avail exemption under Section 54 of the Act, you have to construct a house on the plot of land that you intend to buy within a period of three years from the date of transfer. If the aggregate amount spent by you on the purchase of plot and construction of the house exceeds or is equal to Rs 9,86,326, there would be no tax payable by you on the capital gain of Rs 9,86,326. In case you intend buying a plot and construct a house thereon, the amount of capital gain should be deposited in a separate bank account under capital gain scheme before the due date of filing the return of income. The amount so deposited will have to be utilised for the purpose of construction of the house within the aforesaid period of three years. (iii) As per the provisions of Section 54 EC of the Act, you can invest the capital gain in the bonds issued by the following authorities: a) Nabard b) National Highway Authority of India c) Rural Electrification Corporation Ltd. d) National Housing Bank The amount received on the maturity of these bonds is not taxable. However, the interest on these bonds is taxable as income. (iv) You may check up which of the above bonds are available these days, depending upon the rate of interest and the lock-in-period you may choose the bond suitable for your
investment.
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by Lalit Batra
Textiles is the sector to watch
Markets went in for a sharp and steep correction last fortnight. The Sensex has lost close to six per cent from 6,854 to 6,443 at close last Thursday (Markets were closed on Friday on account of Good Friday). Nifty also went into a mini bear hug and lost 6.5 per cent the last fortnight. The indices are now well below the pre-Budget levels. Though short-term pull backs are not ruled out as the market is in the oversold zone, yet the direction of the market in the short-term is down. Market’s attention will now shift towards the fourth quarter results, which would start pouring in from the second week of April. As per the technical charts, the market has support at 6,412 and 6,384. With the dismantling of quota regime from January 1, 2005 as per the WTO agreement on textile and clothing, the Indian textile industry is on the threshold of exponential growth. Indian textile industry has presence across the value chain and the growing preference of the global retailers to outsource from low cost producers, we expect India to emerge as a major outsourcing destination. Though China would benefit the most due to its infrastructure and economies of scale, India would be the second largest beneficiary due to low cost sourcing of cotton, skilled labour and India’s USP in its quality standards gives it an edge over Pakistan, Bangladesh and Sri Lanka. The companies which are best set to reap the benefits are Welspun India and Alok Industries.
Welspun
Welspun India is the Asia’s largest terry towels manufacturer and the fourth largest in the world. It is a preferred supplier to some of the big names in retailing like Wal-mart, Tommy Hilfiger and Shopko. The company has also put into place a strategy to move up the value chain by focusing on designer brands and specialty stores. Its merger with Glofame cotspin will result in cost synergies and substantial savings.
Alok Industries
Alok Industries has the largest processing capacity in India with fully integrated facilities for yarn texturising, weaving, knitting, processing and madeup garments. This provides it with the global retail clients with a flexibility to outsource its entire requirement from Alok Industry. The company is also changing its product mix by focusing on home-textiles and garments. Alok is well-poised for an exponential growth on the back of increased outsourcing from the global majors. Long term investors can start accumulating the above two stocks, which are trading at Rs 119 (Welspun) and Rs 59 (Alok) for gains.
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FIIs net buyers A-I flights Forex reserves Land identified |
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