The Tribune, Chandigarh, India

	Government considers regulating pharma biz Discusses compulsory licensing under the Patents Act and review of automatic approval for FDI in the sector Aditi Tandon Tribune News Service New Delhi, October 23 With the pharmaceutical industry in danger of turning a monopoly due to concentrated patent holdings, the government is considering regulating the sector. One of the regulations under consideration is issuing compulsory licences (under the Indian Patents Act 2005) to a qualified company to produce and make available critical drugs during emergencies. The government might also invoke the Competition Act, 2002, to see if the price or availability of a certain drug is the result of an anti-competitive agreement or abuse of dominant position by a pharmaceutical company. A review of the foreign investment policy in the sector is also on the cards. Presently, investments are 100 per cent on automatic route allowing easy mergers and acquisitions of pharma companies (six mergers in four years as earlier reported by The Tribune). Recently, the Department of Industrial Policy and Promotion (DIPP) under the commerce ministry circulated a discussion paper to invite stakeholder views on compulsory licensing — a system whereby the government allows third parties (other than the patent holder) to produce and market a patented product without the consent of the patent owner. This enables the government to balance the need for inventions with public interest without affecting intellectual property rights. The paper takes serious view of the fact that annually seven lakh Indians are detected with cancer, but most are unable to afford expensive anti-cancer medicines. “By conservative estimates, the average cost of anti-cancer medicine per patient is Rs 25,000 per annum. So, we require medicines worth Rs 5,000 crore. However, the present turnover of this segment of medicines in India is just Rs 150 crore. The gap indicates the near non-accessibility of medicines to most of the affected population mainly because of the high cost of these medicines,” the DIPP discussion paper states, arguing for a compulsory licensing system. After the Doha Declaration on TRIPS (Trade-related Aspects of Intellectual Property Rights) agreement and public health, 52 developing countries issued compulsory licences including Brazil, Thailand, Malaysia and South Africa. Since India adopted TRIPS in 1995, no compulsory licences have been issued under the amended Patents Act. The DIPP has set the process into motion, admitting in its paper that there is non-availability of anti-AIDS drugs as well. It states: “India has about 25 lakh people with HIV/AIDS, the highest in South Asia. Only about 3 lakh - those patients with a CD 4 below 200 per cu ml of blood are being treated. First generation drugs are being used. Lower prices for these medicines will allow greater coverage of affected patients.” “A short term option is to review the policy on foreign investment for pharmaceutical companies. Presently, investment up to 100 per cent in the pharmaceutical sector is on the automatic route. This could be shifted to the government route so that proposals for mergers and acquisitions in this important sector could be scrutinised by the FIPB.”
	G20 raises developing nations’ quota in IMF GYEONGJU, South Korea, October 23 The Group of 20 finance leaders struck a landmark deal on Saturday to boost developing countries’ power in the International Monetary Fund even as they failed to set targets for a wide-ranging global economic rebalancing. The IMF deal was hailed by fund MD Dominique Strauss-Kahn as a ‘historical’ moment that will see Europeans give up two seats on its 24-strong board to powerful developing countries and transfer 6 percent of votes to them. "This makes for the biggest reform ever in the governance of the institution," Strauss-Kahn, who heads the 187 country body, said. The G20 agreed a year ago to shift at least 5 percent of voting rights to developing countries such as India and Brazil whose clout within the Fund has not kept pace with their emergence as major engines of global growth. Despite the surprise deal on the IMF, which had not been expected until G20 leaders meet in South Korea next month, efforts to firm commitments to enshrine numerical targets for current account deficits met with tough resistance. Attempts to firm up rhetoric in the final communique to push emerging market countries to accept meaningful near-term appreciation of their currencies failed and all countries will commit to is to refrain from "competitive devaluation". "We're all committed to moving toward market determined exchange rates that reflect underlying fundamentals and refrain from competitive devaluation," said an official, who spoke on condition of anonymity. The lack of a stronger pledge from the likes of China and the South Korean will likely hit the dollar, economists said. A U.S. official separately told Reuters the United States had no expectation its proposal of setting numerical targets on external balances would make it into the G20 statement. The U.S. official said Washington knew that including specific targets for imbalances at this stage would be rejected by a number of countries with structurally high trade surpluses, including Germany and major commodity exporters. But it helped focus the discussions which initially were in disarray, he said. A source with knowledge of the night-long discussions confirmed that the final statement would water down proposals on tackling external imbalances. "Persistently large imbalances would warrant an assessment," the communique would state, he said. Such an outcome is what other G20 officials had predicted, given the disparate views of the diverse group. China was against any limits on imbalances, another G20 source said on Friday. He also said there was a "rift down the middle" on currencies and International Monetary Fund reforms, and the final statement would be ‘bland’. There was, however, broad agreement that "unilateral and uncoordinated responses" to shore up fragile economies could prove damaging for everyone. — Reuters
	Investor Guidance Folly to nominate single person for PPF a/c by AN Shanbhag Q: I wanted to know whether PPF account can be kept open / active by the legal heir of the deceased. Will the interest credit be continued? The account was opened more than 20 years and we want to keep earning the tax-free interest. — Chirag Shah A: Theoretically, the account can remain open till the nominee informs the bank about the death of the account holder. In other words, the account of a deceased holder can be closed anytime by the nominee/s. The interest will continue to accrue in the account till the account is closed. Obviously, no fresh deposits or partial withdrawals are permitted. However, it is dangerous to nominate a single person, since a nominee is not allowed to nominate anyone and therefore, if the nominee expires before the withdrawal, the legatees may face some problem. MIS investments Q: My dad is 68-years-old and has around Rs 20 lakh to invest. He does not like any risky investments and would only like to invest in government-backed schemes. He likes the Post Office MIS scheme and plans to invest the total allowed amount of Rs 9 lakh with the interest proceeds going to RD (Recurring Deposit). He would like to invest the remaining amount in the SCSS (Senior citizen Saving Scheme). Can he invest in both the plans at the same time? Does investing in Post Office MIS scheme disqualify him from investing in SCSS? Is there any mechanism (like RD or PPF or others) where the proceeds from SCSS can be deposited without having to pay tax? — Venkat A: Any individual can invest in MIS as well as SCSS. In other words, there is no embargo on an individual investing in both MIS as well as SCSS at the same time. The interest on MIS as well as SCSS is exigible to income tax. The individual can take recourse to deductions under Chapter VI, which includes contributions to PPF, SCSS, 5-yr PORD, etc. The deduction is available against all the income of the individual which is exigible to tax. There is no special provision for any tax concessions for MIS and SCSS. The ceiling for SCSS is Rs 15 lakh. The ceiling of MIS is Rs 9 lakh for joint account only. As far as transferring interest from SCSS to an RD, it may be done by giving standing instructions to the bank to transfer the quarterly interest to the already opened RD. However, this will not help you save tax on SCSS. Income is taxable at the first instance of earning it i.e. when it accrues on the SCSS balance. How the same is applied is not relevant from the I-T point of view. Form 15G Q : I am 61-years-old and earned around Rs. 2.30 lakh last year out of which Rs 1 lakh was business income and the balance from interest from Bank and Post Office FDs and RBI Bonds. I have deposited Rs. 70,000 in PPF thereby bringing income down to Rs 1.60 lakh and does do not have to pay any tax. I have been filing my income tax return for the last 10 years even if taxable income is less. Can I submit Form 15G to avoid TDS. — Mrs Rana A: Yes, you can file Form 15G requesting non deduction of TDS. There are two conditions that need to be fulfilled in order to be eligible to file Form 15G. The first one is that the tax on your total income computed as per the provisions of the I-T Act should be nil. The second condition is that the aggregate of interest income should not exceed the maximum amount not chargeable to tax i.e. Rs. 1.90 lakh since you are a woman you satisfy both the above conditions, you may file Form 15G and request non deduction of tax. Capital gains tax Q: My question pertains to taxation of Systematic Transfer Plan (STP) executed by me for my mutual fund investment. When an amount is transferred from the transferor scheme to the transferee scheme under STP, is the investor liable to pay tax on any capital gain that may accrue in the case of the transferor scheme? Or since this is an internal transfer done within two plans of the same MF, the tax is not applicable. — Harjeet. A: The provisions of tax on capital gains are applicable when an investor switches from one scheme of an MF to another. Even a switch within the same scheme from one option to another option also attracts the provisions. This is not applicable for switch from dividend option to dividend- reinvestment option and vice versa. The authors may be contacted at wonderlandconsultants@yahoo.com
	Aviation Notes Domestic operations to shift to T-3 in Delhi on Oct 30 by KR Wadhwaney All national and international flight operations will be simultaneously conducted from the newly-constructed Terminal-3 in the Delhi Airport from October 30. The main runway is fully functional after construction and operations will be further smoothened.. The shifting of domestic operations will lead to congestion, but authorities are optimistic that every thing will settle down within a week. "We are fully geared up to handle traffic without causing any inconvenience to passengers and visitors" said a team of officials of the Delhi International Airport Limited (DIAL), adding: "T-3 is spacious enough to take additional operations:. The three main domestic airlines-Air India, Jet Airways and Kingfisher -are in the process of shifting to Terminal-3. Budget carriers-IndiGo, Spicejet and Go Air- will continue to handle departures from I-D and arrival IC Terminal A1. According to regular flyers, the combined operations of national and international will further ease the situation. As it is, the functions of the Terminal-3 have been appreciated by all passengers-Indian and foreign. If picture at the Indira Gandhi International Airport (IGIA) has been satisfactory, the worrying problem concerning air traffic controllers lingers on. There is acute shortage of experienced ATCs and the Airports Authority of India (AAI) has been compelled to recruit retired controllers. "This does not augur well for the industry" said an official, adding: "We are planning measures to overcome this problems". The beleaguered Air India continues to live from the plate of the government. It is expected to receive another equity of Rs 2000 crore. Its destiny remains uncertain as there is a possibility of change of political scenario in the civil aviation. The merger has already failed and, if there is any change at the political level, there will be new set of problem for the national carrier, which is passing through a very lean phase. The woes of the airline will solve, only when route utilisation on both national and international sections is judiciously operated. Authorities are examining the feasibility of banning noisy planes to operate flights from the IGIA. The night operations from the new runway have decreased, still the ‘sleep problem’, faced by hospitals and residents in the Vasant Kunj area remains. Litigations are pending . It is a vexed issue as curfew on night flying remains in the US and Japan. Many foreign aircraft operate flights during nights. The authorities are helpless in disciplining foreign carriers.
	GM India to showcase electric car next year Jaipur, October 23 General Motors India is strengthening its base in the country and will showcase an "electric car" next year, its President and MD, Karl Slym announced today.It would be an environment-friendly small car, and would be showcased to get experts and market opinion, Slym told in a press conference here. It would be a battery-operated, not solar power generated, he said. GM India is making a rapid network expansion in the wake of increasing popularity of Chevrolet in India, he said, while launching a new showroom and two workshops in Jaipur. In collaboration with China's SAC (Shanghai auto car), GM will bring three ‘value package’ cars, he replied to a question. Cheverolet recently completed seven years of its successful journey after its foray into the Indian market, Slym said. It would soon be comissioning the power train facility in Maharashtra at Talegaon making the first flexi-engine plant for GM globally wherein both petrol and diesel engines are going to be manufactured together, he said. Recently, the company inaugurated the LNG facility at its factory premises at Halol for supply of gas to its car manufacturing plant, and has also ramped up production by adding the second shifts at Halol and Talegaon plants, he said. On whether GM is planning any industrial investment in Rajasthan, Slym said two of its units were already producing 2,25,000 cars per annum, and this would go up to 4 lakh in next couple of years. If GM-India would have any expansion plans, Rajasthan could be considered, he added. Sumit Sawhney, its VP, sales-marketing-aftersales, said GM has invested over $1 billion (more than Rs 5,000 cr) in India till date. — PTI
	Groz-Beckert Asia celebrates 50 years Tribune News Service Chandigarh, October 23 Chandigarh-based German company, Groz-Beckert Asia, which makes highly specialised precision needles, has completed 50 years of operation in India. A high-level delegation of the members of the Board of Groz-Beckert ,Germany, are in the city to interact and celebrate the occasion with over 1200,employees in its two plants here . The company enjoys the status of a Export House, exporting over 70% of its production. Thomas Lindner, Chairman of the Board of Groz-Beckert, said the company has 150 years of history attached with it. Groz-Beckert was awarded KYOCERA prize at Economic Day in Bonn in April. Linder added the company’s he medium -term strategy was vto integrate textiles into ever border and new areas of application-all ther way to textile concrete bridges, which set technological standards with their impressive spans remarked Linder.