B U S I N E S S

India’s largest IPO opens today
Coal India’s Rs 15,000-cr issue closes Oct 21
New Delhi, October 17
Coal India Ltd's Rs 15,000-crore mega issue, which opens tomorrow for public subscription, has got a bullish endorsement from most market experts. There is a perception that the issue would be the star attraction of this week for all, including retail investors.

Mobiles trump fixed phones worldwide
New Delhi, October 17
Fixed-line telephone subscriptions will soon become a thing of the past with mobile penetration across the world deepening, especially in the poor and developing countries. People in these countries are using cell phones to fight poverty.

Merchant power price dips 35% on strong monsoon
New Delhi, October 17
A strong monsoon in North India and a fall in agricultural pumpset demand in North India has led to a significant decline in the price of merchant power. Rates are down to approximately Rs 4/kwh in second quarter of fiscal 2011 as compared to Rs 5.5/kwh in the first quarter of the year.

India’s largest IPO opens today
Coal India’s Rs 15,000-cr issue closes Oct 21

  Mobiles trump fixed phones worldwide
l Globally there are 18 fixed phone subscriptions per 100 inhabitants
l Global mobile phone penetration is 68%
Aditi Tandon
Tribune News Service

New Delhi, October 17
Fixed-line telephone subscriptions will soon become a thing of the past with mobile penetration across the world deepening, especially in the poor and developing countries. People in these countries are using cell phones to fight poverty.

At the end of 2009, there were 1.2 billion fixed telephones globally for an average penetration of just 18 subscriptions per 100 persons. Even in the least developing countries (LDCs), people are opting out of land-line connections with just one such connection for every 100 subscribers.

Mobile phone penetration on the other hand is growing, even in the LDCs where subscriptions surged from 2 to 25 per 100 persons, finds the UNCTAD’s (United Nations Conference on Trade and Development) Information Economy Report 2010.

It shows that the average global mobile subscription penetration was also high - 68 per cent by the end of last year - up from 60 per cent a year before. It is anticipated that mobile subscriptions worldwide will reach 5 billion during 2010. Penetration in developed countries has already exceeded 100 per cent; it stands at 58 per cent in the developing countries.

A welcome finding of the Report is that in more and more low-income countries, farmers, fishermen and entrepreneurs are using mobiles to improve their lives. The technology involved is now simple and affordable enough to be purchased and used by the poor. They become “connected”, although often in ways that are different than in developed countries. The Report quite naturally urges governments to take full advantage of these new opportunities to combat poverty.

In South India, for instance, fishermen's profits have increased by 8 per cent due to better market coordination through cell phones. Mobile phones have enabled them to compare prices and choose the best options while still at sea.

That explains the surge of mobile subscriptions - in urban areas in LDCs, over half of households have cell phones. This access is growing in rural areas as well.

The report also analysis the access of people to different ICTs (information and communication technologies) and finds this access is growing. A startling finding however is the near-negligible presence of fixed broadband services in the least developing countries where a person is 600 times less likely that one in the developed country to have a fixed broadband facility. Between 2008 and 2009, the overall global penetration of fixed broad bands rose from just 6.1 to 7 subscriptions per 100 persons. The gap between developed and developing countries is also massive - 26 versus 3.5.

Internet use is also growing, the report says. At the end of 2009, there were 1.8 billion internet users globally. In the developed nations 72 pc of the population used internet; in developing coutries the percentage was just 18.

As for mobile broadband connections, it remains low. At the end of 2009, about a third of ITU members - all developing countries - had yet to launch mobile broadband services. There were 640 million mobile broadband subscriptions, corresponding to 9.5 subscriptions per 100 inhabitants. Average penetration in developed countries was 13 times higher than in developing ones.

Merchant power price dips 35% on strong monsoon
Sanjeev Sharma/TNS

Tax Advice
Section 80D amended to include contribution to CGHS
by SC Vasudeva

Q. I am a retired central government official and making yearly contribution of Rs 3,900 towards “Central Government Health Scheme” (CGHS). In his February 2010 Budget Speech Finance Minister, had stated that all contribution towards this “Scheme” would come under the existing provision of Section 80D of the Income Tax Act - thereby bringing them on par with other health insurance schemes. Is it correct? If so, then let me know the status of the said proposal of Finance Minster for which I would feel highly obliged.

— Sital Parkash

A. Section 80D of the Act has been amended so as to include any contribution made to the Central Government Health Scheme. The deduction is allowed in case the amount of such contribution does not exceed an aggregate amount of Rs 15,000. The amendment is applicable for assessment year 2011-12 and onwards.

Tuition fee under 80C

Q This year my son took admission in Post-graduate Medical course (Doctor of medicine; MD) in some private medical college in Karnatka where the annual tuition fee is approximately Rs 5.70 lakh. Out of this amount, my wife contributed nearly Rs 2.0 lakh, while the rest of the amount was contributed by me. We both are government pensioners. The fee receipt mentioned my son’s name alongwith mine. Can we both individually take benefit of exemption limit of Rs. one lac under section 80C while enclosing the photocopy of the same receipt with our individual Income-tax returns for the current financial year 2010-11 (Assessment year 2011-12)?

— SK Sharma

A Tuition fee paid (excluding any payment towards any development fees or donation or payment of similar nature) whether at the time of admission or thereafter to any university, college, school or other educational institutions situated within India for the purposes of full time education of your son would be allowable as deduction under section 80C of the Act. In case the payment of such tuition fee has been made by you as well as your wife, both of you should be entitled to claim such deduction within the permissible limit provided the payment so made is in accordance with the provisions specified herein above.

Clarity on two PPF a/cs

Q In Sunday’s edition dated 15.08.2010 you have clarified and okayed the opening of second PPF account in name of wife (self) and payment to be made by husband to cover Rs.1 lakh (70,000/- self + 30,000/- for wife’s payment). Thus seeking complete Rs 1 lakh’s rebate allowed under section 80C of the Act in any financial year for I-T purposes.

On 19.07.2010, you had rejected the proposal, whereas on 15.08.2010 while replying to a question, you have okayed. Kindly clarify it again with said and allowed act. I am a sr. citizen, so is my wife, yet have to pay I-T because of revision of pension etc.

— YL Chopra

A It seems you have not read the reply given by AN Shanbhag on August 15, 2010. He has clearly stated that a person cannot open an account in the name of his wife and that she will have to open an account in her name wherein the husband can contribute to the account of his wife and claim the deduction. This means that a person can not open two accounts. On 19th July 2010 in reply to a query raised, I have stated that a second account cannot be opened in the name of the his wife meaning thereby that he of his own can not open a second account in the name of his wife. There is thus no difference in the opinions expressed on August 15, 2010 by Mr. A.N. Shanbhag and on 19th July 2010 by me. You may please go through the replies again for your satisfaction.

Rebate on riot relief

Q Punjab Government has paid Rs 2 Lakh through cheque to my wife under 1984 riot victim red card holder. Please clarify me rebate on these Rs 2 lakh is permissible? If yes, under which head? Kindly confirm.

— Jagjit

A You should be able to claim, the exemption of the above amount under Section 10(10BC) of the Income-tax Act, 1961. The aforesaid section exempts any amount received from a State Government by an individual by way of compensation on account of any ‘Disaster’.

The term ‘Disaster’ for this purpose means a catastrophe, mishap, calamity or grave occurrence in any area, arising from natural or man-made causes, or by accident or negligence which results in substantial loss of life or human suffering or damage to, and destruction of, property, or damage to or degradation of environment and is of such a nature or magnitude as to be beyond the coping capacity of the community of the affected area.

In my opinion the 1984 riots should be covered within the term ‘Disaster’ and the amount received should be exempted under the above section.