Moscow, February 16
Reserve Bank of India Governor D Subbarao struck a hawkish note on Saturday and said there are upside risks to inflation from food and commodity prices, while room for monetary easing is limited.

Headline inflation slowed to its lowest level in more than three years in January, but some analysts say the Reserve Bank of India (RBI) will watch the fiscal and current account gap and inflation risks before easing again.

"There are upside risks for inflation. In particular, food prices are going up as a result of cyclical factors ... Then there is pressure on inflation from global commodity prices," Subbarao told reporters in Moscow.

The RBI cut its key policy rate for the first time in nine months in January, but struck a cautious note on further easing as it waits to see how the government's budget aims to bring a bloated fiscal deficit under control.

“At this moment there is room for monetary easing, but that room is limited and we have to make a careful judgement on how to use that limited room," Subbarao said on the fringes of a meeting of Group of 20 finance ministers and central bankers.

India's high fiscal and current account deficits, in addition to inflation risks, are deterrents for further monetary easing, which is seen necessary to support sagging GDP growth.

The current account deficit widened to a record high of 5.4 per cent of GDP in the September quarter, and Subbarao recently said it is likely to be at an all-time high in the fiscal year that ends in March.

In October, strained finances forced the Indian government to revise its fiscal deficit target for the fiscal year ending in March to 5.3 per cent from 5.1 per cent. — Reuters

New Delhi, February 16
A day after the Supreme Court ordered that those telecom operators who had not won the spectrum in an auction held in November last year to cease operations and make way for those who have won the new licences, Sistema Shyam Teleservices (SSTL), which operates under the brand name MTS, today said the order would not impact its working.

An SSTL spokesperson said, “The SC’s order on February 15, 2013, does not impact the company and any of its operations as it relates to telecom operators who had not participated in the spectrum auctions on November 12 and 14, 2012. The auctions done on the said dates were for the GSM spectrum (1800 Mhz).”

It added that “SSTL on the other hand being a pure CDMA operator provides its telecom services using the 800 Mhz spectrum".

The company had filed an application on January 10 this year in the Supreme Court saying the company wants to continue its operations and intends to participate in the upcoming auctions in March 2013. The Supreme Court will give a separate order on the same. The said order is awaited, the statement said.

The Supreme Court had yesterday ruled that the “entire” licences quashed by it for 2G spectrum be auctioned without "further delay" and those telecom companies which were unsuccessful and did not participate in the auction process held in November 2012 should cease to operate "forthwith". 

Chandigarh, February 16
Air conditioning and refrigeration firm Blue Star is now focusing to increase its market share in room air conditioning market. Traditionally, Blue Star is known for central air conditioning. But, recession in the commercial real estate sector and exponential growth in room air conditioning segment has forced the company to enter into room air conditioning segment in a big way.

Talking to The Tribune here today, B. Thiagarajan, president, airconditioning and refrigeration products group, Blue Star Limited, said “The penetration in the room air conditioning segment is just three per cent in India, with just 3.4 million units being sold annually in the country. Comparatively, developed countries have a penetration of over 30 per cent. While the commercial real estate sector remains in doldrums, we expect the room air conditioning market to grow to six million units in India by 2016 and 10 million units by 2020,” he said.

The company has set up two plants for manufacturing room air conditioners at Kala Amb in Himachal Pradesh, which have a combined production capacity of 3.5 million units per annum. Thiagarajan said they hope to reach the optimum production capacity by 2015, after which the company proposes to set up another green field room air conditioning plant.

“Besides increasing our production capacity, we have also launched new models of room air-conditioners, with 18 new models being launched this year alone. We are also increasing our network in tier 3 and tier 4 towns by appointing new dealerships. From just 150 dealers in 2010, we have increased our dealership and retail network to 1,250 outlets now,” he said.

He said around 20 per cent of the company’s sales turnover of Rs 2,700 crore was coming from room air-conditioning segment. “We propose to get 40 per cent of sales turnover from room air-conditioners by 2016,” he added.

Q. I want to know how to calculate income tax on share trading as there is a lot of confusion about it. Is it true that if a person does transactions of more than Rs 60 lakh then his profit will be taxed at the rate of 30% and not 15% as is claimed by the government for short-term capital gain in share trading.

2. Secondly, if I incur a loss in intra-day trades, will I be able to carry forward that loss for next seven years. Is it possible under current tax laws that all the losses incurred in shares trading be carried forward?
— Avtar Sharma

A. Intra-day trading activity in shares is speculative in nature and attracts tax of 30.9%.

Even in normal cases, there has been a long-standing difference of opinion between the investors in shares and the Tax Department on whether the income arising from the sale of shares can be classified as capital gains or as business income, especially where the number of trades are large or the size of the trades were high. Trading without delivery of the shares will be treated as speculative unless it is business of the assessee. A CBDT circular has directed the ITOs to take a view according to the facts and circumstances of the case. But while doing so, he is bound to give reasons for his actions. Such discretionary powers given to the assessing officers attract rent seeking.

2. U/s 73 loss from speculative business can be set off only against income from speculative business. In these cases, the net loss can be carried forward for setoff against the profits and gains only from the respective business and the carry forward is allowed for only four years and not eight years.

Chandigarh, February 16
Over 10 lakh employees of various public sector banks will go on a strike on February 20 and 21 against the alleged anti-trade union actions of the government and bank mangements.

Pramod Sharma, general secretary of All-India Bank Officers Confederation, Punjab, said though bank employees had been repeatedly asking the managements and government to redress their complaints, no action was forthcoming. "We have been demanding early wage revision in the banking sector and upgrade of pension of officers and employees, which has not been upgraded since the implementation of pension scheme and it was against Banking Law and Amendment Bill," he said. 

BRIEFLY

Chennai
Cognizant CEO on GE Board:The Board of Directors of global conglomerate, General Electric, has inducted Francisco D'Souza, CEO of Nasdaq-listed Cognizant, into its board. D'Souza's induction as an Independent Director takes the strength of General Electric board to 19 members, 17 of whom are independent, it said. — PTI

New Delhi
ITDC net dips 7 pc:Indian Tourist Development Corporation (ITDC) has reported a 7.09 per cent dip in its net profit to Rs 8.90 crore for the quarter ended December 31, 2012, mainly on account of rise in cost of operations. Income from operations, however, rose to Rs 112.39 crore for the quarter under consideration from Rs 104.04 crore for the same period year ago. — PTI