The Tribune, Chandigarh, India

	G20 ministers reach deal to correct economic flaws Paris, February 20 G20 finance ministers have reached a compromise deal to correct global economic imbalances and expressed concern over excessive commodity price volatility impacting the world food security, an issue pressed by India. After two days of hard bargain by their finance ministers, major economies faced with uneven recovery and downside risks reached a text in the face of tough resistance from China to agree on guidelines for removal of structural flaws in the global economy. "It has not been simple. There were obviously divergent interests but we were able to reach a compromise on a text," French economy minister Christine Lagarde said. The finance ministers and central bank chiefs, who could not reach a broad consensus on framing rules for current account deficit and real exchange rate and reserves, said "our aim is to agree, by our next meeting in April," on a set of indicative guidelines to ensure orderly economic growth. However, the document did not talk about an issue of much interest to India. New Delhi wanted that G20 should urge all jurisdictions to conclude Tax Information Exchange Agreements so that menace of black money in tax havens can be tackled. This issue seems to have been put on back seat as a lot of time was spent on reaching an agreement with China, which was opposed to inclusion of foreign exchange reserves and its exchange rate among the guidelines. China is sitting on a $2.8 trillion forex reserves and is accused by the US of manipulating its currency yuan. Faced with a double-digit food inflation, India also pressed for a coordinated approach to tackle food, commodity and oil price volatility, which make emerging economies "vulnerable". The issue was raised by Finance Minister Pranab Mukherjee who said that "India did not contribute to the build-up or persistence of global imbalances" but "found no room for comfort in tackling food inflation" in the backdrop of high international prices. Commodity prices increased 20 to 30 per cent in 2010, according to the IMF estimates. The communique issued said: "We discussed concerns about consequences of potential excessive commodity price volatility... we reiterated the need for long term investment in the agriculture sector in the developing countries." The ministers agreed on a plan to strengthen the international monetary system (IMS) with regard to disruptive capital flows and disorderly movement in exchange rates, a matter of great concern to India. The document also expressed its worries on the impact of rising oil prices which have exceeded $100 per barrel. On the most contentious guidelines to remove structural imbalances, the communique appeared to have accommodated China's objections to including forex reserves and current account deficit. The communique instead said that indicative guidelines, without targets will be used to assess: i) public debt and fiscal deficit; private savings and private debt ii) external imbalances composed of trade balance and net investment income flows and transfers, taking into due consideration of exchange rate, fiscal, monetary and other policies. In the financial sector, the ministers committed themselves to "regulating and oversight of the shadow banking system to efficiently address the risks, notably of arbitrage associated with the shadow banking...". The shadow banking system or the shadow financial system consists of non-depository banks and other financial entities (investment banks, hedge funds, and money market funds). — PTI
	Budget 2011-12 Wishlist (steel industry) SMEs want customs duty on raw material to go Ruchika M. Khanna/TNS Chandigarh, February 20 The zooming steel prices are now weighing on the industry. And as the Union Finance Ministry gives final touches to the Budget 2011-12, steel industry, especially the small and medium enterprises (SMEs) located in the region, is looking forward to effective steps by the government to stem the prices. Over the past two months, the price of steel has been on a boil. The prices have gone up from Rs 33,000 per metric tonne to Rs 41,700 per metric tonne in the past two months, thus affecting the SMEs in the steel sector. In this regard, the SMEs look forward to abolition of customs duty on imported raw material and freight equalisation, besides creation of a corpus for automation in SME units. PD Sharma, president of Apex Chamber of Commerce and Industry, said he feared a hike in customs duty on raw material like coking coal and some finished steel goods. “There is a fear that in order to stem the revenue deficit, the government would increase customs duty (presently this duty is 5 per cent). This would be a big setback to the steel SMEs, which are facing losses because of the volatile steel prices. We would want the government to abolish this duty, so that the steel prices in the domestic market come down,” he said. Amarjit Goyal, chairman and managing director of Modern Steels in Mandi Gobindgarh, too, demanded that the customs duty on imported coil should be reduced to zero. “Besides, the government should look at ways to bring in freight equalisation to help control the steel prices, especially in this region, which is far away from mainsteel producing plants,” he added. Seconding his views, AL Aggarwal, president of Chandigarh Industrial Fasteners Association, said the government should take immediate steps to set up a steel price monitoring committee. This committee should ensure that the prices remain stable, at least for one quarter, he added. “Just as in the case of textile sector, the budget this year should either create a corpus, or give subsidy to the small and medium steel units for undertaking complete automation. With the acute labour shortage in steel units in this region affecting the productivity, the only way forward for the SMEs is complete automation. But this can be undertaken only with some subsidy by the government,” said RS Sachdeva, a steel unit owner and co-chairman of the Punjab committee of PHD Chamber.
	Panasonic to invest Rs 1,000 cr in Jhajjar Jhajjar, February 20 Japanese electronics giant Panasonic will set up its first "Eco Idea factory" in India at Dadritoi village of Haryana's Jhajjar district at an investment of about Rs 1,000 crore. The factory will be spread over an area of 76 acres and its foundation stone will be laid on February 23, an official release said here today. The release said the factory will start production within one year. Rohtak MP Deepender Singh Hooda said the New Industrial and Investment Policy-2011 of the state government has been implemented to ensure holistic industrial development. He said while the Jharli area (Jhajjar) was emerging as a power hub, a world-class medical institute, AIIMS-II, was being set up at Badsa village in Jhajjar district. — OC
	Tech Com targets Rs 500 cr sales Ruchika M Khanna Tribune News Service Chandigarh, February 20 Tech Com India, a computer hardware and consumer electronics maker, has launched a new business vertical of mobile handsets and high-end electronic products. The company expects a turnover of Rs 250 crore by March and targets a turnover of Rs 500 crore by March 2012. Growth would come from the mobile handset business launched two months ago, MD Ajay Kumar Kedia said. Kedia added the company was focusing on semi-urban and rural markets to retail handsets. “Since we have launched ‘feature-rich’ and low-priced mobile phones, we have managed to do well. Last month, we sold 50,000 units, mainly in semi- urban and rural areas. We hope to increase our sales here, besides launching new android handsets for urban consumers,” he said. He added the company was in talks with leading retail brands like Chroma and Vishal Mega Mart, to retail mobile handsets. “We have also earmarked Rs 100 crore for brand-building and advertising, so as to gain a higher market share,” he said. “We are looking to introduce a new range in home theatre systems. Our focus in the coming fiscal will be on strengthening our international mobile handset distribution business in West Asia, CIS countries and in Asia,” he said.
	Govt may miss disinvestment target New Delhi, February 20 The government may miss the target of garnering Rs 40,000 crore through disinvestment as SAIL's follow-on public offer is now expected to hit the market in the next fiscal due to volatile stock market. Moreover, SAIL’s public offer is slated to hit the market only after ONGC's share sale and this may leave little resources in the hands of investors to subscribe to two big-ticket disinvestment issues. The Government has raised over Rs 22,000 crore through selling equities in the PSUs so far and has been banking on ONGC and SAIL to meet its target of raising about Rs 40,000 crore through stake sale. The ONGC issue is expected to fetch about Rs 13,000 crore, while SAIL share sale was planned to garner up to Rs 8,000 crore.— PTI
	FDI in 2010 dips by 22 pc New Delhi, February 20 India received foreign direct investment (FDI) worth $21 billion (Rs 96,104 crore) in the calendar year 2010, a decline of 22 per cent over the year-ago period, a latest industry ministry data said. The country had attracted FDI valued at $27 billion (Rs 130,980 crore) in 2009. According to experts, foreign investors are cautious due to the fragile global economic recovery. "The global economic recovery is weak, especially in Europe...I think, this is affecting the FDI flow in India," an economist said, adding that procedural delays in the country are also affecting the inflows adversely. In view of declining foreign investment inflows, the Reserve Bank of India (RBI) is considering to set up a panel to find out the reasons for FDI slowdown and suggest ways to encourage it. During the April-December period of the current fiscal, FDI declined by 23 per cent to $16.03 billion from $20.86 billion in the same period last year. The main sectors that attracted FDI include services (financial and non-financial), telecommunications, housing and real estate, construction activities and power, the data said. Countries, including Mauritius, Singapore, the US, UK, Netherlands, Japan, Germany and UAE are the major investors in India. — PTI
	Tax Advice No bar on number of NRO accounts by S.C. Vasudeva Q. My brother along with his wife has recently immigrated to New Zealand and they are interested to know the answers to their queries as mentioned below: Year Days spent in India Harish Kiran 2010-11 30 nil 2009-10 291 57 2008-09 365 283 2007-08 333 247 2006-07 334 302 2005-06 365 365 What is our resident status for 2010-11? Can we give a local address on NRI Pan Card application for ease of correspondence? Do we have to give the name of representative assessee to sign & file IT return or can IT be sent from outside country by post/by hand or deposit. Can an individual have more than one NRO account? Are the TDS rates different for non-residents as compared to resident Indians? What are the TDS rates on bank interest, dividends of MF/shares, dividends of tax saving mutual funds and Govt. pension for NRI? Is there any capital gain tax or any other tax on redemption of mutual funds or sale of shares? What is the rate of tax for non-residents? — Romesh Kumar Sood A. (a) To ascertain the residential status of an assessee the period of stay for last 10 years is required. The number of days indicated in your query are in respect of six years only. It may be added that for the assessment year 2011-12 (financial year 2010-11) your brother and his wife who have migrated to New Zealand would be treated as ‘Non-Resident’ in India and would be liable to pay tax in respect of income arising in India. (b) Your brother and his wife can file a form for change in the particulars giving their foreign address. Their PAN would remain same. (c) The change in status can be informed at the time of filing the tax return. The return can be signed by a person who has been authorized to do so. It is possible to file the return online. A hard copy thereof will have to be sent by post to the processing unit in Bangalore in case digitally signed return has not been filed. (d) The present bank account may have to be closed and NRO account will have to be opened separately. There is no bar for a non-resident to have more than one NRO account in different banks. (e) The TDS rates for non-residents are different. In case rates contained in Double Taxation Avoidable Agreement are lower, same will prevail. IT refund Q. My daughter had three Fixed Deposit Receipts (FDRs) for 3 years and on maturity of these FDRs came to know that Income Tax had been deducted in the last 2 years by the bank saying Form 15 G/H was not given. I intend to know when the income of a person falls below the taxable limit how far it is justified to deduct the tax at source without even informing the customer by the bank? Secondly, is there any way out to get refund of IT deducted in the last two years by the bank or should it be taken as unjustified donation to Govt. of India for no fault of ours? — A.D. Babber A. According to the provisions of Section 197A of the Income-Tax Act 1961 (The Act) in case the amount of any income in the nature of interest does not exceed the maximum amount which is not chargeable to income-tax, an assessee can file form 15G requesting the tax deductor not to deduct tax at source in respect of such income. A tax deductor is not obliged to ask for form 15G. The obligation is on the assessee to file the said form. Your daughter can file the return of income for the years for which the tax has been deducted at source and can claim refund in respect of such taxes. The return for assessment year 2009-10 can be filed by 31st March 2011. The return for assessment year 2010-11 should have been filed by 31st July, 2010. However, you still have time to file such return by 31st March, 2011 without the levy of any penalty. Rebate u/s 80U Q. May I invite your kind attention to The Tribune dated 27.09.2010 (query by K.K. Sanon, viz myself) and Tribune dated 15.11.2010 (query by Shalini Goyal) wherein you have reported that for the disability of less than 80%, the deduction under Section 80(U) has been increased from Rs 50,000 to Rs 75,000 for the Assessment year 2010-2011 onwards whereas in The Tribune dated 22.11.2010 to a query made by Gurvinder you have mentioned that a deduction of Rs 50,000 shall be allowed for Assessment year 2010-11. Since in earlier two queries, you have mentioned the deduction under Sec. 80(U) as Rs 75,000 for the AY 2010-11. I think that now Rs 50,000 mentioned in The Tribune dated 22.11.10 appears to have been written inadvertently by you. Kindly clarify. — K.K. Sanon A. There was an inadvertent error in the reply published on 15.11.2010. The deduction actually allowable for a person who is not suffering from a severe disability is Rs 50,000 for assessment year 2010-11. Medical reimbursement Q. I am a senior citizen having retired from Central Govt. service way back. I am suffering from a joint problem. A private doctor has advised me operation. My pension includes an element of medical allowance. In this connection, I request your clarification on the following: (i) Am I entitled for medical treatment? If so, in which hospitals? (ii) Is medical reimbursement permissible? If so, when I can submit my medical bill for payment. — Harbajan Singh A. You have stated in the query that you are a retired Central Government employee. You should therefore be covered in the contributory health scheme of Government of India and therefore be entitled to medical treatment by CHS Dispensary. You should also be entitled to the treatment prescribed by such dispensary with regard to problem being faced by you. The treatment would be as per the terms prescribed under the government rules.