Sunday, August 23, 1998
today's calendar
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B U S I N E S S | Sunday, August 23, 1998 |
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spotlight today's calendar |
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‘Devise strategy
towards WTO’
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Crop productivity in
Punjab, Haryana falls
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Hinduja
Finance to pay 25 per cent Markfed
to close down cotton mills Tata
proposal hearing on August 29 NFL
records Rs 458 crore turnover |
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‘Devise
strategy
towards WTO’ CHANDIGARH, Aug 22 — Foreign Trade Additional Director General R.K. Chandra of the Ministry of Commerce today laid stress on a collective strategy on the World Trade Organisation (WTO) guidelines to be followed by the country’s exporting community to cope with the global competition. Addressing a seminar — “Export or perish”, organised by CII Northern Region here, Mr Chandra said the traders had to concentrate on infrastructure, research and development, besides carefully analysing various policies on subsidies, in order to boost exports. He also said that the industry and government must work together to devise a collective strategy for improving exports. Mr Sunil Kumar, Director Duty Drawbacks, Ministry of Finance while speaking at the session informed the participants that delay in payment of duty drawback would soon be a thing of the past. Certain initiatives that are being taken would reduce the time for payment from three months to one week in a year’s time from now. During this interim period wherever there is a delay in payment the government would pay interest. Prof. Sahib Singh, Faculty, IIFT and Mr R.K. Dhawan, former President, Federation of Import-Export Organisation also spoke during the session. Mr I.S. Paul, Chairman, CII, Chandigarh, Council while presenting the theme of the session said that export or perish is not a cliche it is a reality which cannot be ignored. In order to improve exports the areas in the industry needs to improve tremendously are, quality delivery and productivity. The quality of infrastructure in the country also needs improvement and the labour laws need amendment, felt Mr Paul. Mr Alok Dutta, Chairman, CII (Northern Region), International Trade sub-committee while chairing the session said that there is need to create a national vision to focus on exports. He also said that CII through such sessions aimed to address issues related to exports to facilitate the existing exporters and motivate potential exporters. Creating awareness
education and experience sharing on issues related to
foreign exchange risk management among the industry is
another objective of the international trade
sub-committee, said Mr Dutta. |
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Crop productivity in Punjab,
Haryana falls NEW DELHI, Aug 22 — The growth rate in productivity of rice and wheat showed a clear decline in most districts of Haryana and Punjab during the last decade, says a report prepared by the Indian Council of Agricultural Research (ICAR). While there is stagnation or decline in the productivity of rice in both the states, the productivity of wheat has slowed down and it is possible that in another decade it would stagnate or decline if effective steps are not taken urgently, the report states. The report states that there are several crop specific constraints that has limited higher productivity.In Haryana, the major constraints for rice as identified by the report are inadequate irrigation due to decline in water table and poor discharge of tubewells. There are increasing problems of salinity and alkalinity, imbalanced use of fertilisers and delayed and prolonged transplanting of rice. The major constraints working against increased productivity in wheat in Haryana are late planting of wheat, high temperature after ear emergence, reduced soil fertility and increasing problem of disease in popular varieties such as HD 2329 and HD 2285. Besides, rusts, heavy incidence of blight and weeds are a serious problem in wheat cultivation in the state. An important reason for the stagnation or decline in crop yields could be delayed time of planting.The rapid increase in the rice-wheat system , particularly the basmati rice- wheat system has put tremendous pressure on the time for wheat sowing. In Haryana, upto 40 per cent area is planted after November 25 and about 10 to 15 per cent area is planted after December 25. Even in Punjab, almost 25 per cent wheat is sown after December 2. This exposes the grains filling of wheat to high temperatures which severely reduces, grain yields, the report observes. The three
member committee consisting of Dr S K Sinha, National
Professor, IARI as Chairman and Dr G B Singh and Dr
Mangla Rai, both Deputy Director Generals of ICAR as
members was constituted by the Union Agriculture Minister
in May 1997 to assess the agriculture productivity issues
in Punjab and Haryana. |
Snippets THE Life Insurance Corporation of India has launched “interactive voice response system” in the metropolis to enable policy-holders to obtain details of insurance policies by simply dialling a telephone number. This follows implementation of the “metro area network” in November last year which facilitates the payment of insurance premium at any branch office across the city. The system was inaugurated by veteran freedom fighter Usha Mehta at a function organised at the LIC in Mumbai on Friday the conclude the celebrations of India’s 50 years of Independence. LIC Chairman G. Krishnamurthy, says policy details can be known through this system in Marathi, Hindi or English as per the policyholder’s choice. The LIC has automated front-end operations to provide on-line services to its customers in over 1,660 branches (nearly 81 per cent of the branch network) so far. — PTI Some gain The thrust of the petroleum sector reforms is to gradually withdraw cost-plus economics and introduce a market-determined pricing system. The prices of diesel have been reduced twice since the new government took over resulting in an annualised benefit of Rs 1300 crore, Ramamurthy said at a seminar on “Hydrocarbons and power sector” organised by Chemtech Foundation is Delhi on Friday last. — PTI On the edge “Recent events have conspired to make life even tougher,” says the London-based Asia Pacific Mobile Analyst in its recent edition. “As if Indian cellular operators were not already burdened with severe difficulties in securing essential outside investment.” A rise in the cost of overseas borrowing together with a sharp drop in the rupee exchange rate has put further pressure on ailing cellular operators who were looking to capitalise on cheaper foreign loans to shore up their operations. Only two cellular companies — Birla AT and T and Escotel Mobile Communications — from among the 14 regional operators are known to have succeeded in securing foreign funds since May-end. — UNI Food Poor knowledge about world markets and trends, the absence of state-of-the-art technology combined with inconsistent quality levels have added to the problems. “We often boast of low labour costs, but actually low productivity per employee indicating poor work efficiency and effectiveness mars our prospects for processed food exports,” she adds. — PTI Armed forces A committee has been appointed to coordinate between producers and users of items like boots, fabrics, curtain material, cane furniture and handmade paper stationery including files and writing pads. — UNI Shopping Giri Khatod, Vice-President, South-East Asia, says the success of Internet commerce in India will depend largely on the usefulness of the services offered. Atul Saran, Country
Manager (India and SAARC) has announced the setting up of
payment kiosks which will provide easy access to the
Internet shopper in Hyderabad, Mumbai and Delhi. Payments
can be made at the kiosks through credit cards or smart
cards. — PTI |
Ludhiana T-shirts adorn Western
stores LUDHIANA: When in Rome, do as the Romans do. When in Ludhiana, do as the Ludhianavis do — wear a T-shirt. Everybody who is anybody in this city of two and a half million seems to have taken a fancy to T-shirts. A T-shirt can be seen on the back of a rickshaw-puller, auto rickshaw driver, cyclist, car owner, office-goer, factory worker, large-scale manufacturer of industrial goods, traders and shopkeepers, students of schools, colleges and universities, the young and the old, men or women. Even the Deputy Commissioner wears it to office once in a while. So does the city police chief. Once regarded as casual wear, T-shirts is no longer looked down upon as such. “It has now acquired a respectability of its own”, says Mr Raj Awasthi, a large-scale manufacturer of T-shirts. “People now wear it on all occasions — social functions, business meetings, parties and clubs...It has come to be accepted as informal yet respectable garment”. The demand for quality T-shirts has been rising worldwide. Mr Awasthi says that this year, he produced T-shirts worth Rs 2 crore. Next year, he plans to manufacture T-shirts valued at Rs 20 crore. The demand within India is enormous. The reason for the popularity of T-shirts is not hard to seek, says Mr Vikrant Sharma, another manufacturer who caters exclusively to the export market. “It is easy to wear, easier to take off and easiest of all garments to wash and maintain”. Earlier, T-shirts were popular with the young only in the age-group of 15-35 age group. Now it is a hit with all age groups. While the young prefer peppy and jazzy colours, older people go for the sobre stuff. T-shirts are available in different price ranges. According to Ms Puja Jain, another readymade garments manufacturer, a T-shirt for lower middle class costs between Rs 80 and Rs 130, for average quality stuff the price is between Rs 150 and Rs 300 while expensive range can cost anything between Rs 500 and Rs 1000. Over the years, Ludhiana has become the hosiery capital of the country. In recent years, there has been a remarkable shift from the purely seasonal woollen hosiery to round-the-year cotton knitwear. According to one estimate, thousands of small and big hosiery units in Ludhiana now manufacture up to about one lakh T-shirts a day. “Our products are now of international standards”, says Mr Daman Oswal, another large-scale manufacturer of cotton knitwear whose entire production is committed to export markets. The Ludhiana industry, he says, took advantage of the policy of economic liberalisation introduced by the Narasimha Rao government to import the latest, state-of-the-art machinery. “We can compete with any country in the world in the manufacture of knitwear”, says Mr Oswal. The city now serves as a base for the entire range of processes required for manufacture of cotton knitwear. Assessibility to raw material is easy. Yarn is readily available. Knitting facilities are aplenty. Labels, polybags, specialised fabrics and yarns, world class dyeing units all are available here. Little wonder, some of the leading brands of the world are now sourcing their requirements from Ludhiana. Even the western chain of stores are getting their goods manufactured. Ludhiana faces some
competition from Tripur which also manufacturers cotton
knitwear. “But we produce quality stuff”, says
Mr Sunit Dutt, a local businessman. “The knitwear
produced in Tripur is cheap and inexpensive and also of
indifferent quality. There is nothing to beat the
“Made in Ludhiana” label, he says with a
certain amount of pride. |
Hinduja Finance to pay 25 per cent NEW DELHI, Aug 22 (PTI) — Hinduja Finance Corporation will focus on the area of mergers and acquisition and advisory services in the banking and infrastructure sectors, its President Ramesh Khanduri said today. The company is also planning a foray in debt trading apart from its existing equity trading operations, he said. The finance arm of the Hinduja Group has registered a 37 per cent rise in net profit for the 12 months ended June 30 and maintained a 25 per cent dividend for equity shares, a company statement said here. The board of directors of
the company have also recommended a 9 per cent dividend
on cumulative convertible preference shares. Net profit
of the company has gone up to Rs 8.41 crore as against Rs
6.13 crore for the previous 12 months. “The net
profit has gone up inspite of the recession in the
economy, difficult time faced by the financial sector and
turmoil in the capital markets. |
Markfed to close down cotton mills JAITU (Faridkot), Aug 22 — With the laying of foundation stone of modern rice mill here by Union Industry Minister, Mr Sukhbir Singh Badal, last evening, the Markfed has started the conversion of its cotton ginning mills to rice mills. Due to repeated failure of cotton crop, the Markfed had closed its cotton ginning mills located in this town, Goniana and Gidderbaha and these mills are being converted into rice mills as the area in these regions have come under paddy crop by replacing the cotton crop due to severe water logging. Apart from it, the Markfed has planned to set up two new rice mills at Naushera Pannuan and Patti. All these mills would be operational in the next one year and would provide direct employment to 50 persons and indirect employment to hundred persons. Official sources said existing cotton ginning mills at Gidderbaha, Goniana and in this town were closed due to shortage of raw cotton. Source said each mill will have capacity of milling 4 mt paddy per hour and cost of setting up each mill would come between Rs 1.30 crore to Rs 1.70 crore. The Markfed would do the additions and alterations in the existing mills for converting these into rice mills. Official sources said that with the setting up of five new mills, the Markfed would be able to mill the large share of paddy and units would be viable from the very beginning as the Markfed had its own land, funds construction wing and sufficient quantity of raw material. Mr Badal laying the foundation stone said that Punjab Government was trying to complete the Thein Dam within five months so that sufficient power could be generated for the agricultural and industrial activities in the state. Mr Ranjit Singh Brahmpura,
Cooperation Minister, Mr Gurdev Singh Badal, Agriculture
Minister, Mr Janmeja Singh Sekhhon, State Cooperation
Minister and Mr Jagdish Singh Walia, Chairman, Markfed
were present on the function organised in connection with
the foundation laying ceremony. |
Tata proposal hearing on August
29 NEW DELHI, Aug 22 (UNI,PTI) — Tata industries’ much-delayed Rs 1,475 crore proposal to set up a domestic airline will come up for hearing at the Foreign Investment Promotion Board (FIPB) on August 29. The proposal was to be heard today but was dropped from the list at the final moment as Finance Secretary Vijay Kelkar, who assumed office yesterday, had sought some more time to study the application, Industry Secretary T.R. Prasad said here today. While the ministry have also been seeking the exact details about the distribution of equity holding by the foreign institutional investors in Tata airlines — American International Group (AIG) and the Government of Singapore Investment Corporation (GSIC), the Tatas have been reluctant in coming out with the information stating that it could be made available only once the proposal was cleared. The Tatas have planned to raise roughly $ 80 million, which is 40 per cent of the equity base of Rs 690 crore, from foreign institutional investors. The new policy permits FIIs to hold a 40 per cent stake, but will not allow FIIs which will in any way be linked to foreign airlines. The Tatas now have to prove that the four FIIs who will be investing in the project have no links whatsoever in Singapore Airlines. Proposals by multinational automobile giants Toyota Motor Corporation and Fiat were among the foreign direct investment (FDI) proposals totalling Rs 525 crore cleared by (FIPB) today. The largest FDI proposal cleared today was that of Tamil Nadu Industrial Development Corporation (Tidco) to set up a hi-tech industrial park in the state with foreign participation from two US firms, including Axes. The two firms would invest about Rs 245 crore in the project with an estimated investment of Rs 850 crore. Tidco will hold 11 per cent with the remaining 89 per cent going to the American firms. In the first proposal of Toyota, it will invest Rs 16.25 crore for manufacturing components for steering wheels along with their joint venture partner Kirloskar Systems. The board FIPB today also gave the go-ahead to IFC Washington, to increase its holding in Global Trust Bank to about 32 per cent from the present 9.62 per cent. According to the proposal, Global Trust would be issuing about 25 lakh convertible debentures to IFC. The debentures will be priced at Rs 60 each and would be convertible after a period of four years. From the transaction, Global Trust intends to augment its tier two capital and the amount that would accrue would be about Rs 150 crore. The board has also given a go-ahead to Hardy Oil and Gas of Britain to hike its stake in Hindustan Oil and Gas Exploration Company Limited (HOGECL) from the present 31.5 per cent to 41.5 per cent. Siemens Power Engineering of Germany also got the approval to set up a 100 per cent export oriented software development centre at Rs 7.5 crore. The centre would draw,
design and plan setting up of power projects across the
globe. The unit would come up in Gurgaon, Haryana and the
entire exports would be made to the parent company in
Germany. |
NFL records Rs 458 crore turnover NEW DELHI, Aug 22 (PTI) — State-owned National Fertilisers Limited (NFL) has recorded a sales turnover of Rs 458.29 crore and a gross profit of Rs 64.89 crore during the first quarter of the current fiscal year. During 1997-98, NFL had achieved a turnover of Rs 2,221 crore and gross profit of Rs 497 crore, realising an overall capacity utilisation of 114 per cent, company sources said. As part of company’s expansion plans, NFL has submitted a detailed feasibility report to the Fertilisers Ministry for expanding its Panipat plant at the cost of Rs 1301 crore. With the implementation of this project, NFL’s annual installed capacity from the existing 28.05 lakh tonnes of urea would reach up to 25.31 lakh tonnes, they said. Another Rs 127.25 crore
revamp project of its Nangal unit would shortly be placed
before the public investment board (PIB) for approval,
sources said. |
Q: Is the date of tenancy material for determining any nuisance existing at the time prior to the filing of eviction petition? Ans: In Sugui Bai @ Shakuntala Bai v Rafat Ali (1998 (1) RCJ. 443) Andhra Pradesh H.C. opined thus: If we compare the evidence adduced in this case and the reading of the same by the courts below, it can be said without hesitation that the courts below are not justified in ignoring the evidence available which warrants this court to hold that the tenant was a defaulter and he had caused nuisance. The landlords proved that the tenant caused damage to the demised premises by causing holes and leaving spaced between the shutter and the wall as seen from the Commissioner’s report. The lower appellate court blindly believed the findings given by the Trial Court and confirmed the order. Both the courts proceeded assuming that the tenant came in possession of the demised premises in the year 1970 whereas eviction petition was filed in the year 1988 and as such it is not open for the landlords to plead damage and nuisance and the same cannot be accepted. The H.C. pointed out that it is not the date of creating tenancy which counts to determine nuisance but it is the time immediately prior to the filing of eviction petition any nuisance, existing, that is to be considered. Damage to the building has been spoken to by the Commissioner in his report and causing of nuisance to the neighbours including the landlords has been spoken to by two witnesses. Thus, in the opinion of the H.C., the evidence available on record proved the allegations made by the landlords. But the courts below took a different view. Regarding the plea of the tenant that demised premises not only belongs to the petitioner-landlady but also to 7 other sisters of the petitioner and as such eviction petition by one person is not maintainable and contended that the others should have been added. Reliance was placed on the case of S. Sarvaiah V Joshep (1997 (4) ALT 240) but the H.C. said it is of no use to the tenant, as there is sufficient material to hold that the tenant recognised the petitioner-landlady as landlord. Revision petition was thus
allowed and nine months granted to the tenant for
vacating the premises by taking into consideration it is
difficult to get alternative accommodation. |
Q: We are engaged in the business of purchase and sale of motor and auto parts in Punjab being a dealer registered under the Punjab General Sales Tax Act, 1948 and the Central Sales Tax Act, 1956. The assessment for the financial year 1995-96 is pending consideration before the assessing authority both under the Local Act as well as the Central Act. During the course of the hearing of the case last month, the assessing authority pointed out that some information has been given to the department to the effect that we have had conducted certain sales outside the books of account with a view to avoiding the payment of the tax due under the Punjab General Sales Tax Act, 1948. Kindly advise what kind of defence is available to us in this case? — Surinder Malhotra Ans: You have not stated full facts about the case. For example it has not been disclosed whether the assessing authority has supplied to you the adverse material in order to provide a reasonable and fair opportunity of being heard. It is a well established principle of law that unless the material sought to be acted upon by the revenue is placed before the person concerned for rebuttal the assessing authority cannot proceed to reject the account books. Therefore, it is obligatory for the assessing authority concerned to confront you with the material or the information that has been received suggesting some concealment of turnover. Another aspect of the matter is that you are not only entitled to have the gist of the information in question but you can also ask for the cross-examination of the witness supplying the information to the assessing authority in order to get at the truth. You are therefore advised to first of all get the information from the assessing authority by making a request in writing and then place necessary evidence in rebuttal before the assessing authority to prove the genuineness of your books of account. Q: We are given to understand the state government has reduced the rate of sales tax on the sale of plywood and plyboard under the Haryana General Sales Tax act, 1973. Kindly give us detailed information in this context alongwith date of the notification issued by the state government. — K.K. Goel Ans: It is not true to say that the state government has issued some notification reducing the rate of sales tax on the sale of plywood and plyboard under the provisions of the Haryana General Sales Tax Act, 1973. Unless a notification in terms of section 15 of the Act ibid is promulgated by the state government providing for reduction of rate of tax it cannot be said that rate of sales tax has been reduced. Q: During the assessment year 1995-96, we have had sold, inter alia, certain goods in tax paid account after buying them on payment of tax at the first point. However, the sellers have refused to issue forms ST-14 against these transactions. The assessing authority now proposes not only to assess tax on the sales of tax paid goods but also levy interest under sub-section (5) of section 25 of the Haryana General Sales Tax Act, 1973. — Rakesh Gupta Ans: In the absence of forms ST-14 or a copy of bill having prescribed declaration on it showing payment of tax at first point, a registered dealer under the Haryana General Sales Tax Act, 1973 has no right to claim the benefit of tax exemption in accordance with section 18 of the act ibid. The assessing authority
has therefore rightly proposed to levy tax on the
transactions involving sales of goods which are
unsupported by forms ST-14 or the bills in the prescribed
bed format. However, the asssessing authority has no
jurisdiction having regard to the facts stated by the
queriest to levy interest under sub-section (5) of
section 25. This sub-section comes into play only if
there is default on the part of the assessee in making
payment of tax as per the periodical returns. Since no
such case has been made out, the proposal of the
assessing authority of levying interest is illegal and
uncalled for. |
Q: A.
Please clear amount donated under Section 80-G/1534 i.e.
for mentally retarded children school. Rebate allowed on
the same. Ans: The tax rebate u/s 80G is permissible only to recognised institutions. Hence, if you have made any donation to retarded children school do enquire whether the school is possessing a certificate U/s 80G. If the school is not possessing any certificate U/s 80G of the Income Tax Act, 1961 the benefit of tax deduction will not be available. The house rent paid by you will not be deducted specially when you are living in the government accommodation. Q: I am 20-year-old college student and I have not any personal income, my father is NRI. Please give me your advice in the following questions. 1. If have a mobile is
there will be any tax for it? Ans: You are fulfilling any two of the four economic indicators which will cast an obligation on you to compulsorily file your Income-Tax return. Hence, whether you have taxable income or not please file your Income-tax return. As you are interested to purchase a shop, your father can make gift from his NRE A/c whereby you receive a gift from your father and the same become gift tax free and you can purchase the shop in your name. If you are not interested to file your Income-tax return, because you don’t have income, then you should have the mobile phone in your mother’s name, the car in your name and the new shop which you want to boy in your father’s name. However, from a practical angle it is suggested that one should not worry about filing Income-tax return even if the income is below taxable limit as the question of any worry or tension will not arise. Sooner or later you will be required to file your Income-tax return; hence, it is better you start filing the return now itself. Q: I am a senior citizen and pensioner. I live as a tenant on the first floor of a house built on one kanal plot in Chandigarh. I am subscriber to a telephone. The income-tax for the financial year 1996-97 (Assessment year 1997-98) works out to be zero. Under the aforesaid facts, am I expected to file Income-tax return in Form No 2 ?—- Amar Singh, Chandigarh Ans: On the facts stated by you, you must file your Income-tax return for the Assessment Year 1997-98. If the said return has not yet been filed, please file the same even now. Q: I own agricultural land in rural area, away from city, in Punjab and have income from this land. Being a retired government employee (age 64) receive pension about Rs 4600 per month. Is the income from agricultural land exempted in full or in part, if in part what are the exemption limit.—- Shakti Singh, Pathankot Ans: On the facts stated by you the entire agricultural income received by you would be fully exempt from Income-tax. It will also not be aggregated with your other income. This is because of the fact that your other income namely pension income is much below the Income-tax exemption limit. Therefore, there is no liability to Income-tax on your income from agriculture land. Q: Under the head “Income from house property”. If “Insurance premium” and “Land revenue” paid by tenant, whether deduction U/s 24 (1) (ii), U/s 24 (1) (vii) respectively will be available to owner or not.—- Sarvjeet Singh, Ropar Ans: On
the insurance premium on land revenue if the same paid by
the tenant, the question of granting deduction in respect
of said amount does not arise at all. |
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