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DoT for ADC at 3 pc of revenue
FICCI wants tax rates cut
Luxembourg to thwart Mittal’s bid
Software device to guide one on roads
BHEL to set up 500 MW thermal project in Sudan
Market
UPDATE
Budget to drive stock market
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No provision for opening another PPF a/c after maturity
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DoT for ADC at 3 pc of revenue
New Delhi, February 12 Telecom regulator TRAI had sought DoT’s suggestion to work out new ADC rates and is expected to announce these next week. BSNL gets about Rs 5,000 crore annually as ADC from private telecom operators for rural operations. With the ADC at 3 per cent the total quantum to BSNL may come down by more than Rs 1,200 crore from its current level and may affect the corporation’s plans for rural expansion, sources said. The DoT has been proposing ADC based on revenue share instead of the existing practice of per minute based, saying that the revenue share model would provide level playing field. TRAI, on the other hand, favours a combination of both continuing with per minute based for incoming ISD calls and switch over to revenue share for other segments, sources said, adding that TRAI is also considering allowing operators to negotiate for higher termination charges for incoming ISD calls. This has been strongly opposed by the access providers (ISD operators), saying that the move would give an undue advantage to cellular operators to the tune of over Rs 200 crore and may tilt the field in their favour. BSNL gets about Rs 2,000 crore from international calls. About Rs 1,500 crore come from incoming international calls and outgoing ISD calls contribute about Rs 500 crore. TRAI has indicated this amount can be retained as such and rest of the service can move to the revenue share model.
— PTI
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FICCI wants tax rates cut
New Delhi, February 12 Basing its proposals on a study carried out by the chamber, FICCI also proposed that the genuine business expenditure such as publicity and holding of conference be taken away from the purview of the Fringe Benefit Tax. Besides, superannuation expenses be kept outside the purview of the FBT, the industrial chamber said. The chamber said corporate India today paid 30 per cent tax on its profits, and another 3-4 per cent went as dividend distribution tax while 3-4 per cent was taken away by the FBT. In addition, it paid another 3 per cent as surcharge and education cess and finally, the lowered depreciation rates of 1-2 per cent thrust an
additional tax of 1 to 2 per cent, FICCI said. Corporate tax rates in other countries stood in the range of 17.5 per cent to 28 per cent, it said. The chamber also pointed out that the average total indirect tax incidence on consumers stood at 44.11 per cent in the case of consumer goods, 43.26 per cent on capital goods, 30.28 per cent on basic goods and 30.06 per cent in the case of intermediate goods, which was double of that in Britain. The chamber also called for increasing the floor of peak income tax of 30 per cent to income beyond Rs 5 lakh against the current Rs 1.5 lakh to leave more money with consumers to spend on goods and services. The chamber said the 30 per cent tax was imposed on income above Rs 40 lakh in China.
— PTI
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Luxembourg to thwart Mittal’s bid
London, February 12 Luxembourg’s Finance Minister Luc Frieden said the Bill adopted an amended version of a European Union takeover directive that would allow a besieged company Board to take drastic action to repel a hostile takeover without seeking prior consent from shareholders,” The Sunday Telegraph reported. “According to our draft law, the Board can go ahead with actions to make an offer fail without asking prior consent from a general assembly,” Mr Frieden said. TOKYO: A technology tie-up between Japan’s Nippon Steel Corp and Arcelor could enable the steel firm to fight off The takeover bid by Mittal Steel, a newspaper said on Sunday. Under the agreement, Nippon Steel can prevent Arcelor from using technologies it has provided to the Luxembourg firm if it is taken over by another company, the English-language daily Yomiuri said. If Nippon Steel invoked the relevant clause, Arcelor would be a less attractive prospect for takeover, the newspaper said.
— Agencies
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Software device to guide one on roads
New Delhi, February 12 “Personal In-Car Navigator” has been developed by scientists of Infotech. It is a personal navigation (P-Nav) device that can run on a handheld platform or a device fixed in a vehicle, called personal digital assistant (PDA). “We are currently identifying the most accurate and legal map data for various cities. On procuring this data, we plan to launch this solution by the middle of this year,” Mr J. Keshu Kumar, Assistant General Manager, Infotech Enterprises Ltd, said. Initially the product would be launched in Delhi, Hyderabad, Pune, Mumbai and Chennai. The product was recently launched in the European car navigation market. During road tests in Europe, the product was intensively benchmarked against its main competitors and consistently met and even exceeded their performance, he claimed.
— PTI
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BHEL to set up 500 MW thermal project in Sudan
New Delhi, February 12 Heavy Industries Minister Sontosh Mohan Dev today laid the foundation stone for the $ 457 million project at Kosti in the White Nile state of Central Sudan. BHEL will commission the power project in 44 months. India has extended a $ 350 million concessional line of credit towards the project. The Kosti project would be the single largest power project in Sudan.
— PTI
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by Lalit Batra
Budget to drive stock market
Indian markets created history last week as Sensex cruised past the psychologically important level of 10,000 last week. The market sentiment was bolstered by government estimates of strong GDP growth for the fiscal year through March, 2006. Sensex gained close to 4 per cent last week. Nifty too gained 3 per cent and is now comfortably perched above the 3000 levels. While foreign financial institutions (FIIs) continued to pump in huge amounts of money into Indian equities, domestic mutual funds have preferred to remain net sellers. Some buying on the retail side could be attributed to the expectations being built up with the Indian Budget round the corner.
The market is likely to seek a higher level on the back of strong liquidity from FIIs and domestic mutual funds. Expectations from the Budget and strong appetite for individual companies are going to drive stock specific activity in the coming fortnight. Investors should continue to take a long-term view of the stocks that they invest in.
Ranbaxy Ranbaxy was in the top gainers’ list amongst the Nifty stocks last week. The stock has underperformed the stock indices by a wide margin in the past one year due to pricing pressures in the US market, leading to margin erosions. Lawsuit losses in the USA and the UK for Lipitor patent challenge adversely affected the sentiment towards the stock. Last week’s couple of news items have helped work sentiments towards the stock. One, Ranbaxy has entered into a 70.30 jv with South Africa-based Community Investment Holdings (CIH), which will sell the former’s range of anti-retroviral (ARV) products in South Africa and other African markets. The value of the African market is estimated to be between $ 5 billion and $ 8 billion and the market for ARVs is pegged at $ 70 million to $ 100 million. While realisations are likely to be lower, higher volumes are expected to drive grown. Second, the company has reportedly bid 500 m euros (around Rs 2,800 crore) for Betapharm, which is Germany’s fourth-largest generic company. Both these moves are part of Ranbaxy’s strategy to expand its geographical reach. Investors with a two or three-year perspective may buy the stock for decent returns.
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