The Tribune, Chandigarh, India

	Finance panel suggests new path for fiscal consolidation New Delhi, December 30 The 13th Finance Commission, which makes recommendations on sharing of tax revenues by the Centre and States, has suggested a new path for fiscal prudence in its report submitted to President Pratibha Devi Singh Patil today. “We had been asked to suggest a new path for fiscal consolidation...we have recommended fiscal path for the next five years (2010-15),” Finance Commission chairman Vijay Kelkar told reporters at his office. Other members of the Commission are BK Chaturvedi, Indira Rajaraman, Atul Sarma and Sanjiv Misra. The report, after being adopted by the Cabinet, will be tabled in Parliament. The government had last year consigned the Fiscal Responsibility and Budget Management (FRBM), the self-imposed fiscal prudence guidelines, to the backburner when it stepped up official spending beyond its means in order to insulate the economy from the global financial meltdown. The country’s fiscal deficit, a reflection of government borrowings, is estimated to touch 6.8 per cent in 2009-10, up from 6.2 per cent in the previous fiscal, mainly on account of the stimulus measures. The recommendations of the 13th Finance Commission, Finance Minister Pranab Mukherjee said “would get reflected in the 2010-11 Budget”. The report, Kelkar said, dealt with the sharing of tax revenue between the Centre and states, distribution of funds among states and support to local bodies. The Finance Commission report assumes significance in view of the ongoing reforms in indirect and direct taxes, which will have a bearing on the tax collections. The government proposes to introduce the Goods and Services Tax (GST), which will subsume levies like excise, VAT and service tax from April 1, next year. The Direct Tax Code, which will replace the Income Tax Act, 1961, is currently in the public domain for debate and suggestions. Currently, the states and Union Territories get Rs 1.64 lakh crore in a year, or around 30 per cent of the shareable taxes collected, by the Centre. The total tax revenue of the government, which include shareable and non-shareable taxes, has been estimated at Rs 6,41,079 crore during 2009-10. The 12th Finance Commission had recommended that 30.5 per cent of the shareable Central taxes should be shared among the states and Union Territories. The shareable central taxes include corporation tax, income tax, wealth tax, customs, excise duty and service tax. Among other things, the Commission has suggested steps to deal with the growing off-budget expenditure, especially, oil bonds. The report, likely to be made public in February before the Budget, also looked at the implications of environment and climate change, ways to improve outcomes and outputs of public expenditure, and impact of GST on trade, Kelkar said. “There’s no recommendation on the tax structure. It’s on the revenue sharing between the Centre and the states ...rates were not talked about,” he said. However, Kelkar said the Commission did give its views on the share of the states and Union Territories in the Central taxes. “We have recommended a share, which will be the share of the Centrally collected taxes between the Centre and the states,” he said. The report is based on the 2008-09 tax collections and does not talk on post-GST scenario. However, implementation of the new indirect tax regime next year, would not be a concern as suggestions are based on revenue neutral rates, he said. Kelkar added that the Commission has made recommendations on all terms of references and the report runs into two volumes. While the second volume is solely for annexures, the first volume runs into 250 pages. — PTI
	Govt clears nine FDI proposals New Delhi, December 30 The government has cleared nine proposals that will bring in FDI of Rs 524 crore, more than half of which would be contributed by Japanese Mitsui and Company in setting up warehousing and container freight stations in the country. Mitsui plans to invest Rs 326 crore in setting a wholly-owned subsidiary in warehousing segment and a joint venture company in container freight stations sector. However, a proposal by US-based Telecordia Technologies for mobile number portability was deferred following concerns raised by the Home Ministry. Along with it, six other proposals were also deferred that include US-based Verizon Communications plans for transfer of equity shares. Five proposals, including Bangladesh-based Southern CNG Automobiles plan, were rejected on the recommendations of the Foreign Investment Promotion Board (FIPB). The government gave nod to a proposal by the world’s largest liquor manufacturer, Diageo, to acquire fully its joint venture with Radico Khaitan. After Mitsui, the other largest FDI would be contributed by Internet Global Services Ltd, which proposes to bring in Rs 100 crore, followed by Goldman Agent Pvt Ltd which intends to invest Rs 93 crore. The government also gave its nod to Premiere Conferencing (Ireland) to set up a wholly-owned subsidiary to provide audio\web conferencing and collaboration services and data communication services in India. The FIPB has also approved the proposal of Chennai-based RK Swamy BBDO Pvt Ltd for induction of foreign equity in a company engaged in advertising activity. A proposal of Mumbai-based Shree Meenakshi Food Products to issue equity shares to undertake manufacturing of pan masala and other tobacco products was rejected by the FIPB. — PTI
	IPO scam: Retail investors may get compensation Mumbai, December 30 IPOs of companies like TCS, NTPC and Jet Airways were rigged and scamsters gained close to Rs 100 crore between 2003-05, market regulator Sebi-appointed panel has said. The panel headed by retired Supreme Court judge Justice DP Wadhwa also recommended that the money be recovered from the culprits and distributed among retail investors. If implemented, it would create history in terms of compensating investors who lost out on share allotment. According to the report that was submitted yesterday, scamsters gained Rs 95.69 crore and suggested that the money could be recovered from their frozen demat accounts, which hold Rs 147.85 crore worth of shares and Rs 1.2 crore in the bank accounts frozen by the CBI. The committee was set up by regulator Sebi to probe irregularities in IPOs floated during 2003-2005, including those of TCS, Jet Airways, Suzlon Energy, NTPC, Yes Bank and Shoppers Stop. The preference will be given to those retail applicants who did not get any share because of cornering of shares by scamsters who created fictitious demat accounts. Investors who got a few shares will also be eligible for compensation, the report suggested. The committee said for the purpose of payment to the deprived retail applicants, the amount which is the difference of closing price of shares on the first day of listing/trading at NSE and the IPO issue price will be considered. It recommended that those who did not get any shares should be reallocated money equally from the recovered amount, till they each receive the gains from minimum shares allotted to the lowest category in the IPO. Once that number is reached, any left-over money shall “spill over” and would be reallocated to the partly successful applicants, the committee added. — PTI
	LG to launch more LED TVs in 2010 New Delhi, December 30 South Korean consumer durables major LG today said it plans to give a push to its LED TV sales by launching more advanced versions of it in 2010 and expects to sell up to 3 lakh units by the end of next year. “LED TV is one of the focussed areas of the company. We will launch more advanced ones in the first half of 2010,” LG Electronics India head of sales Amitabh Tiwari told PTI. He said the company expects the segment to contribute about 20 per cent of its turnover by the end of next year. At present, LED TVs accounts for less than 4 per cent of its overall sales. The company said it expects to achieve a turnover of Rs 13,000 crore this fiscal-end, a 30 per cent growth as against the last financial year. LG had introduced LED TVs in India in September this year and has already sold over 15,000 units of it. “With the new range, we expect that we will be able to sell around 2.3 lakh to 3 lakh units of it by the end of next year,” Tiwari said. Talking about the new product, he said the new LED TVs to be introduced will be more smaller and about three times more thinner than the present ones. “One of the features of the new ones is that it will be more thinner. It will be about the size of 2.5 mml. The present ones are three times thicker,” he said. At present, LG sells two models (42LH90QR and 47LH90QR) of LED TVs and are priced at Rs 90,000 up to Rs 1,10,000, respectively. — PTI
	Punjab allocates Rs 150 crore for industry Tribune News Service Chandigarh, December 30 The Punjab government today said it would set up a fund of Rs 150 crore to upgrade industrial infrastructure in a bid to give a boost to the state industry. While announcing this, State Industries Minister Manoranjan Kalia said this dedicated fund would contribute to the Centre’s schemes like cluster development, common facility centers and R&D marketing. He said the government would ensure effective implementation of hotel and health tourism projects, which have been given the status of industry under the new policy. Highlighting the state’s programmes and policies vis-à-vis industrial development and achievements during the current year, the minister said special package of incentives had been given to IT /bio-technology units and agro-based industries. Identified government land would be provided at concessional rates to these units. He said the Centre had approved 13 special economic zone projects for Punjab, of which two have already been notified. He added that 15 mega projects with proposed investment of Rs 1970.47 crore were approved during the year. Referring to the Guru Gobind Singh Oil Refinery at Bathinda, he applauded the government for taking the initiative to re-start the refinery, which remained abandoned for many years.
	Introduction of UTN shelved New Delhi, December 30 The government has decided to shelve the introduction of the Unique Transaction Number (UTN), which tax payers need to quote alongwith the Permanent Account Number (PAN) when tax is deducted/collected at source. The scheme was to have come into force from the new year. However, the Finance Ministry has not ruled out the possibility of introducing a new identity number like the UTN from the next fiscal, in addition to the PAN to ensure prompt verification and granting of tax credits to tax payers. “The introduction of the UTN, which was scheduled to be implemented from January 2010, has been shelved in all probability. The process of filing tax returns remains the same as earlier,” a senior Finance Ministry official said. The government had earlier said the system of allotting UTN is “expected” to become operational by January 1, 2010. — PTI
	OWM to spend Rs 110 cr on expansion Chandigarh, December 30 Oswal Woollen Mills (OWM), part of Rs 2,500 crore Nahar Group, plans to invest Rs 110 crore on capacity enhancement and opening of new outlets as part of its effort to achieve a turnover of Rs 720 crore by 2010-11. The company attained a business of Rs 500 crore, including Rs 150 crore from Monte Carlo brand, in 2008-09, and expects to achieve a turnover of Rs 600 crore this fiscal. OWM claims to occupy 50 per cent space in premium woollen knitwear segment with its Monte Carlo brand. It expects to spend Rs 15 crore in the opening of new outlets of Monte Carlo brand in the country. The company also plans to tap overseas markets by opening Monte Carlo outlets in London and Barcelona next year, OWM executive director Sandeep Jain said. Monte Carlo’s collection comprises winter, summer and sports wear. OWM wants to cater to the growing denim market and has decided to expand the capacity of cotton spinning at a capital outlay of Rs 80 crore. It will add 12,000 more cotton spindles at its Ludhiana plant which will enhance the capacity from 16 million metres per annum to 22 million metres. — PTI
	Ban on futures trading in sugar extended New Delhi, December 30 The government has decided to extend the ban on futures trading in sugar for another nine months till September 2010, commodity market regulator FMC said today. “The ban has been extended till September next year," Forward Markets Commission chairman BC Khatua told PTI. The curb on futures trading, which expires tomorrow, was imposed in May 26, 2009 to contain rise in price which was ruling high at Rs 36 a kg. Khatua said the regulator would review the ban next season beginning October 2010. Experts said the decision was on expected lines as India’s sugar production is projected at about 16 million tonnes in this season ending September 30. — PTI
	Imports from Malaysia, Thailand to get cheaper New Delhi, December 30 Imports of several items like fish, apparel, cheese, tyres and construction equipment from Malaysia, Singapore, Thailand will become cheaper from Friday as India-ASEAN Free Trade Agreement (FTA) comes into force with these countries in the first phase. Only three of the 10 members of the Association of the Southeast Asian Nations (ASEAN) are implementing the FTA with India from January 1. But they account for bulk of the $44 billion India-ASEAN trade. India’s trade with the three major ASEAN economies- Singapore, Malaysia and Thailand - stands at $40 billion. “The Finance Ministry is expected to notify changes in structure anytime now,” a Commerce Ministry official said. — PTI