The Tribune, Chandigarh, India


	No fuel price hike for now New Delhi, February 14 Facing opposition from key allies in the UPA government, Finance Minister Pranab Mukherjee and Oil Minister Murli Deora today discussed an "all-acceptable" hike in fuel prices but it appeared the two failed to reach a consensus and the fuel price hike may not happen immediately. "No decision has been taken," Deora told reporters after an hour-long meeting. PSU retailers are projected to lose Rs 45,571 crore on selling petrol, diesel, domestic LPG and kerosene below cost. To avert bankruptcy, the Kirit Parikh panel has suggested freeing auto fuels from government control along with a steep hike in cooking fuel. Last week, Deora's ministry did not take the proposal to free petrol prices, along with hikes in diesel, cooking gas and kerosene rates, to the Cabinet because of opposition from the Trinamool Congress and the DMK. "The meeting was about under-recoveries (revenue losses) of oil marketing companies and the Kirit Parikh report. No decision has been taken," Oil Secretary S Sundareshan said. Pending a decision, Deora wanted the government to fulfil its promise of meeting the Rs 31,574 crore revenue Indian Oil, Bharat Petroleum and Hindustan Petroleum will lose on selling domestic LPG and kerosene below cost. However, Mukherjee made no promise of giving anything more than the Rs 12,000 crore already promised, sources said adding the meeting could not decide what could be an acceptable price hike to all constituents of the ruling UPA. IOC, BPCL and HPCL currently sell petrol at a loss of Rs 4.72 a litre, diesel at Rs 2.33 per litre, kerosene at Rs 18.06 per litre and domestic LPG at Rs 287.59 per cylinder. Deora, sources said, was of the opinion that any moderate price increase would help curtail revenue losses of the future but the government must urgently decide on the losses that have already been incurred this fiscal. In July last year, it was decided that the government will meet all of the revenues retailers lose on LPG and kerosene and the same on petrol and diesel would be made good by upstream firms like ONGC. The Rs 13,997 crore revenue loss on auto fuels was being made good but issues remained with the losses on LPG and kerosene. Deora had on February 11 submitted a memorandum to the Prime Minister asking the government to cover the unmet Rs 19,574 crore revenue loss on LPG and kerosene sale. Today's meeting with the Finance Minister took that forward but no decision was reached. Sources said both Mukherjee and Deora were in favour of Rs 2 to 3 a litre hike in petrol and diesel prices and Rs 25 per cylinder increase in LPG rates, but the allies did not want diesel, LPG and kerosene prices to be touched. Owing to this, the two ministers deferred a decision pending more consultations within the ruling UPA, they said. The proposal to free petrol prices would lead to a price increase of Rs 4.72 a litre. A similar move on diesel, as suggested by the expert group on pricing reforms headed by Kirit Parikh, would have resulted in rates going up by Rs 2.33 a litre. — PTI
	SEZs losing sheen in AP Suresh Dharur Tribune News Service Hyderabad, February 14 Once seen as powerhouses of fast-track development, the Special Economic Zones (SEZs), are fast losing its sheen in Andhra Pradesh which accounts for highest number of SEZs in the country. While some are hit by global recession, the other developers, who entered the race driven by real estate interests, are affected by slump in the sector. As a result, the SEZs, projected as symbols of booming economy, now stand out as sore points. “We are taking a close look at their functioning. After identifying the erring developers, we will issue notices,” the Managing Director of AP Industrial Infrastructure Corporation (APIIC) BR Meena told The Tribune. The Centre had approved 103 SEZs for the state, the highest for any state in the country. Of them, 73 have been notified. The Information Technology (IT) and IT Enabled Services (ITES) sectors form a major chunk of the SEZs. The sector-specific approvals were also given for bio-tech, leather products, building products, aerospace and precision engineering and pharmaceuticals. Most of the SEZs are located in and around Hyderabad and coastal cities of Visakhapatnam, Vijayawada, Guntur and Nellore. The SEZ promoters were given prime land at throw away prices. About 18,000 acres of land has been allotted to 73 notified SEZs. It has been found that several developers, who were allotted land, have failed to start the units citing economic slowdown as the reason. The opposition parties, particularly the left and their affiliated organisations, have dubbed SEZs as Special Exploitation Zones which have robbed the local farmers of their source of livelihood. “There may be some genuine cases of promoters affected by recession, infrastructure bottlenecks, adverse market conditions and inability to achieve financial closures. Some cases may turn out to be real estate ventures in the garb of SEZs. We are adopting a case-by-case approach,” the official said. He said the AP had attracted highest number of SEZs because of its pro-active approach and favourable investment climate. AP has been aggressively promoting SEZ route to put industrial growth on fast track. The government will issue notices to the developers who have failed to set up their units and those who are using the land for purposes other than the ones for which clearances were obtained. Meanwhile, some IT/ITES SEZ developers have sought de-notification of part of their lands citing global recession and reduced demand as the reasons. The opposition parties, however, argue that de-notifying the lands would allow the developers the freedom to sell them or use for other purposes.
	Zain accepts Bharti’s offer for African assets Dubai, February 14 The board of Kuwait telecom gaint Zain has accepted an offer by Bharti Airtel to purchase most of its African assets, according to a person familiar with the matter. Bharti's offer marks the Indian company's third attempt to enter the continent. Bharti made a $10.7 billion offer for the assets, Al-Rai reported yesterday. Zain announced today in a statement to the Kuwait bourse that its board would meet to discuss an offer for its African assets, excluding Sudan and Morocco. Kuwait's state-run KUNA news service said Zain's board unanimously approved the transaction, without saying how it obtained the information. Trading in the shares was suspended. However, when contacted by PTI a Bharti Airtel spokesman declined to comment. Bharti made an offer for Zain's African assets and has been waiting for the Kuwaiti company's approval, a person familiar with Bharti's offer also said. Bharti's chairman Sunil Mittal is seeking to enter Africa, one of the world's fastest-growing telecommunications markets, as competition intensifies on his home turf. — Bloomberg
	Tax Advice No tax on govt employees’ gratuity by SC Vasudeva Q. I retired from the Punjab Government service on 31-12-2009. As per revised scales my gratuity is calculated to be Rs 5,98,000. Is it exempted from income tax or will there be any tax deducted from it? — Rajdeep Singh A. Death-cum-gratuity received by the employee of Central Government, state government, local authorities and members of Defence services are totally exempt from tax under Section 10(10)(i) of the Income-tax Act 1961 (the Act) and is therefore not includible in the total income. No tax therefore should be deducted from the amount of gratuity received by you since you have retired as employee of the Punjab Government. Tax liability Q. I am a senior citizen. My estimated income (interest from banks and PO schemes) for the financial year 2009-10 is likely to be Rs 4,96,400. I have also invested Rs 1,00,000 under SCSS during the current year. I shall be grateful if you kindly calculate my income tax liability for this year. — KC Mehra A. The tax on the estimated income of Rs 4,96,400 after taking into account the deposit of Rs 1 lakh under Senior Citizen Savings Scheme Account would be Rs 26,038 inclusive of education cess for assessment year 2010-2011. Senior Citizen Saving Scheme Q. The advertisement given by the Director of Small Saving Punjab on presenting the 36th Lucky Coupon Scheme does not indicate that Senior Citizen Saving Scheme of Post office is an Income Tax Saving Scheme. Whereas the agents of Post office inform that it is a tax-saving scheme and a Senior Citizen can invest upto Rs 1 lakh under this scheme. Kindly clarify. — SL Mahajan A. A deposit under Senior Citizen Savings Scheme 2004 is includible in the deduction to the extent of Rs 1 lakh allowable under Section 80C of the Act. Accordingly, you are entitled to claim deduction of the amount (within the maximum limit of Rs 1,00,000/-) deposited under the aforesaid scheme. Licence fee Q. Kindly let me know whether licence fee paid to my department is exempted from income tax or otherwise. I have been provided rent-free accommodation in HPSEB Project Colony and paying Rs 5,916 annually as licence fee to Deptt. — Rakesh Kumar A. According to the new Perquisite Rules notified by the Central Board of Direct Taxes on 18th December 2009, value of unfurnished residential accommodation provided by the Central Government or any state government to the employees is to be computed on the basis of the licence fee determined in respect of the accommodation in accordance with the Rules framed by such government as reduced by rental actually paid by the employee. In case you are employee of Haryana Government and the amount of Rs 5,916 has been paid by you as licence fee for year 2009-10 towards the unfurnished residential accommodation provided to you, no perquisite value of accommodation would be added to your salary. Payment to daughter-in-law Q. I am a senior citizen having income of Rs 3.5 lakh per annum from pension and fixed deposits etc. I, along with my wife, are living with our only son, who has his small business. His wife does all the household work and looks after us. She was doing a job of teacher before marriage and left it after marriage due to domestic urgency. I want to give a monthly payment of Rs 5,000 to her by cheque, for her services. Is there any implication on account of i ncome tax on my part? Please advise. — KP Jhangra A. There would be no tax implication in respect of monthly payment of Rs 5,000 to your daughter-in-law as far as you are concerned. She would also not liable to pay any income tax on the amount so received from you. PPF maturity Q. I have a PPF account, which is maturing in March 2010. My queries are: 1. Would the maturity amount be subject to I.T. levy? 2. Where and in which scheme can I reinvest the maturity amount of the PPF for a short period (ranging from 4 months to an year) so that it comes handy without tax implications at the time of my son’s marriage? — Rakesh A. 1. Presently, the maturity amount of PPF is not taxable. 2. It would be advisable to invest the amount in the units of a liquid fund. The amount so deposited can be encashed at any time. Such funds normally carry interest of 5.6 to 6% p.a.
	Market Update Volatility to continue by Lalit Batra The markets continued to remain volatile as the key benchmark recovered, tracking gains in global stocks. The undertone was cautious as investors awaited details of a likely European Union bailout plan for Greece. The BSE Sensex ended at 16,152 and the Nifty shut shop at 4,827 adding 2.3 per cent each during the last week. The recent pullback seems to be a technical one and we expect the market to witness extreme volatility till the Budget. Till then the mood in the global market will remain the key for the domestic market. Investors globally continue to worry that various euro-zone members will not be able to bring their budgets under control, jeopardising its fragile economic recovery. Expectations that the dollar carry trade, which fuelled a rally in emerging market stocks in the past one year, may pause for a while or start reversing may further affect stock markets worldwide in coming weeks. ING Vysya Bank ING Vysya Bank is one of the oldest private sector banks in the country. The bank was formed in 2002 on global financial conglomerate ING’s acquisition of 44 per cent stake in the South-based Vysya Bank. The bank, however, after the initial turnaround due to ING’s participation in its management activities, failed to catch up with the new private sector banks in the country. The bank had also been extremely inconsistent in terms of asset growth and net profit margins over the years. The same, however, started showing signs of change in financial year 2009 with the bank catching up with the average sector growth in advances, in line with most of its peers. In fact, with an improved capital adequacy ratio (CAR of 14.5 per cent) ING Vysya has managed its growth through exposure to lowrisk assets. Improved growth visibility and a new management are likely to make it more competitive amongst its private sector peers. The key concerns about ING Vysya Bank in the past have been its lax provisioning policies, sub-par asset growth and poor asset pricing ability. IN recent times, these have been worked upon along with the parent. Further, the new management has its eyes fixed on a high provision coverage and larger CASA base to ensure profitable growth. The bank in September 2009 had a qualified placement of equity shares to ING at Rs 248 per share amounting to Rs 415 crore. This has placed the bank comfortably as far as its capital adequacy ratio is concerned at 14.5 per cent. More importantly, focus on eliminating key default areas like low provisioning and inadequate risk profiling will enhance shareholder returns for the bank. Thus, even a gradual improvement in operating metrics has the potential to offer substantial upside to investors who invest in the stock at the current attractive valuations with a longterm perspective. Although it will be a while before ING competes with the best banks in the country, the long-term trend is clearly evident. For investors wanting to capture the upside in the bank’s valuations at it moves closer to that of its private sector peers, we believe that ING Vysya offers an excellent long-term opportunity at current market price of Rs 248.
	Indian ADRs gain $6.26 bn New York, February 14 Indian stocks trading on American bourses added over $ 6 billion to their cumulative market capitalisation last week, with IT icons, Infosys Technologies and Wipro, accounting for half of the total gains.For the week ended February 12, the 16 companies trading as American Depository Receipts (ADRs) on the New York Stock Exchange and Nasdaq added $6.26 billion to their market capitalisation. Infosys and Wipro together added $3.19 billion to the total valuation, during the said period. Infosys' valuation jumped by $1.77 billion to $30.84 billion, while that of Wipro increased by $1.42 billion to $30.13 billion. — PTI