Sunday, October 25, 1998
today's calendar
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B U S I N E S S | Sunday, October 25, 1998 |
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spotlight today's calendar |
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Himachal to have new
industrial policy
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Ludhiana exports bid for
US, European markets
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VSNL presents 24.68 crore
dividend cheque to PM FIPB
clears De Beers, Goldman proposals India
not happy with rating agencies: PM
Plastic
industry flays goods tax Professionals
now to pay service tax ‘Chinese
economy could crash’ Sub-committee
formed |
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Himachal to have new industrial
policy NEW DELHI, Oct 24 — The BJP-led Himachal Government is preparing a new industrial policy for the State in order to attract greater investment specially in software and electronic industry. The Himachal Pradesh Minister for Industry, Mr Kishori Lal Vaidya, told newsmen here today that new industrial policy is expected to be ready by the end of this year. The new policy will be prepared on the basis of a report by a task force set up under the Chairmanship of the Industrial Finance Secretary, he said. The State Government has also invited industrialist and Chambers of Commerce to give suggestions and will also study steps undertaken by neighbouring state to attract investment, he said. Himachal Pradesh has earmarked two areas, Shogi in Shimla district and Nagri in Kangra district to develop as electronic estates. Mr Vaidya said since Himachal Pradesh offers pollution-free atmosphere and has adequate labour, the State Government was hopeful in attracting investments. He said some Non-resident Indians have also evinced interest in setting-up industry in the state. Another project in the pipeline is the setting up of a Rs 2 crore vegetable and fruit processing plant in Baddi. He also said the State
Government has also started work on Rs 20 crore
industrial park in Baddi, Solan District offering 76
plots in first phase and 91 plots in the second phase. |
Ludhiana exports bid for US, European
markets LUDHIANA: The woollen knitwear export trade, which has witnessed one of the worst crisis of its history this year due to the worsening Russian economy, is now trying to widen its base in the US and European markets. Sources in the knitwear industry, which is concentrated in Ludhiana, say that although the manufacturer-exporters had, over the past few years, secured a foothold in the Western markets despite the growing Chinese competition, their main export market hitherto had continued to be Russia. What has how prompted the exporters to explore expansion of the Western markets is the huge losses they have suffered this year on the goods exported to Russia following the steep devaluation of the rouble. The value of their goods has now come down to around one-third of what it was about two months ago when they had sent these to their own warehouses in Russia, according to Mr Balraj Kumar, a leading manufacturer-exporter of woollen knitwear. He said that nearly two months ago when they had sent their stocks to Moscow, the value of a rouble was around 6500 to a dollar. Due to sudden devaluation in the wake of the political crisis that hit Russia, the rouble declined to around 2500 a dollar. After the recent political changes leading to the appointment of a new Prime Minister, the rouble appreciated but was still around 17,000 to a dollar. The value of Indians goods in Russia thus still stands eroded by two thirds. The result of these developments is that a number of manufacturer-exporters had set up their offices and warehouses in Moscow have started winding up their establishments. The crisis has also pushed out the trader-exporters of woollen knitwear whose number had mushroomed over the years, from the Russian market. Most of these traders were Delhi-based. The exporters face another problem relating to conversion of roubles into dollars and their transfers to India. The Russian Government has reportedly imposed restrictions on such transfers out of the country. After the disintegration of the Soviet Union, the exports suffered a big setback. But these had again started picking up and touched nearly Rs 400 crore a couple of years back. The latest crisis caused by the rouble devaluation has shattered the woollen knitwear industry’s export potential. Besides trying to expand
in the Western markets, the local manufacturer-exporters
are also exploring the markets of the former Soviet
Republics now constituting the CIS countries. Besides,
some of them are also diverting their activities to
manufacture goods for the domestic market. But due to the
comparatively early festival season this year and the
delayed onset of the winter, the demand of hosiery has
not picked up in Indian markets. |
VSNL presents 24.68 crore NEW DELHI, Oct 24 —
The Videsh Sanchar Nigam Ltd (VSNL) today presented a
dividend cheque for Rs 24.68 crore to the Prime Minister,
Mr Atal Behari Vajpayee, here today. The cheque was
presented by the VSNL acting Chairman and Managing
Director, Mr Amitabh Kumar. The Union Government owns
65.97 per cent of VSNL equity and the dividend represents
a payout of Rs 4 per share on the outstanding share
capital, as against Rs 3.50 last year. The total dividend
payout for 1997-98, amounts to Rs 38 crore, representing
3.92 per cent of VSNL’s profit after tax. The
company will retain the balance profit to fund its
ambitious expenditure programme to strengthen the
infrastructure and harness its resources for global
competition. |
Moody’s lowers Pak’s currency ceilings NEW YORK, Oct 24 (AFP) — Moody’s Investors Service has downgraded Pakistan’s country ceiling rating for foreign currency bonds and notes, citing Islamabad’s problems over debt and trade. The ratings firm yesterday lowered the ceiling from ‘B3’ to ‘CAA 1’ reflecting its belief that there is an increased risk of default on the instruments because of Pakistan’s ongoing balance of payments crisis. At the same time, Moody’s lowered further the country ceiling on foreign currency bank deposits to CA from CEA3, a move warning that depositors may experience losses exceeding 20 per cent of their principal. Pakistan’s balance of payments situation has been particularly fragile over the past three years as the Government has increasingly relied on short-term, expensive credit to fulfil its external financing needs, Moody’s said. The shortage of foreign exchange resources was further exacerbated by international trade and credit sanctions imposed after Pakistan’s nuclear tests, it added. Moody’s also noted that in addition to a freeze on foreign currency deposits, the central bank has now put strict limits on access to foreign exchange for commercial cross-border transactions, including imports. “Moody’s is
concerned that scheduled interest payments on these rated
instruments may also be delayed when the next coupons
fall due over the coming two months,” it said. |
FIPB clears De Beers, Goldman proposals NEW DELHI, Oct 24 (PTI) — Foreign Investment Promotion Board (FIPB) today cleared foreign direct investment (FDI) proposals worth Rs 280 crore including ones by diamond major De Beers and investment banker Goldman Sachs. South African De Beers consolidated has been allowed to bring foreign investment of Rs 126 crore for prospecting and mining in Orissa, FIPB sources said. De Beers would initially be undertaking only prospecting. However, another proposal by the mining giant was deferred by FIPB as Ministry of Mines sought more time to study it. The board also cleared two proposals by Goldman Sachs and Cargil Asia Pacific to start NBFC (non-banking finance company) activities in the country. Both the proposals with 75 per cent foreign equity each would have to bring $ 5 million upfront as per the minimum capitalisation norms for NBFCs, the sources said. Kotak Mahindra would hold 25 per cent stake in the Goldman Sachs venture. FIPB also allowed Fuchs to buy out the entire stake of public sector Balmer Lawrie in its joint venture Balmer Lawrie Fuchs Ltd for petro products. Balmer Lawrie Fuchs, a
50:50 joint venture, would become a wholly-owned
subsidiary of Fuchs after the buy out. However, Fuchs
would divest 26 per cent in favour of Balmer Lawrie after
five years, the sources said. |
India not happy with rating agencies: PM NEW DELHI, Oct 24 (UNI) — India would seek a radical change in the approach and functioning of credit rating agencies, Prime Minister Atal Behari Vajpayee said here today. “We ... seek a radical change in the approach and functioning of ... institutions such as rating agencies and global commercial banks,” Mr Vajpayee said at a FICCI function. The Prime Minister’s remarks assumed importance in the wake of Standard and Poor’s lowering India’s sovereign rating to BB from BB+ and its long-term local currency sovereign credit rating to BBB from BBB+ on October 22. While this time around,
the Indian stock markets did not give too much importance
to the downgrading by S and P, it sends at times wrong
signals about the country’s long term prospects.
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Ordinance on buy-back of shares soon NEW DELHI, Oct 24 (PTI) — In line with Prime Minister Atal Behari Vajpayee’s announcement today, the Government is likely to allow buy-back of shares shortly through an ordinance. Since the Prime Minister is keen that vibrancy is restored to the capital market through firm and accelerated pace of economic action, the Government is likely to announce the buy-back of shares sooner than later, official sources told UNI here. Buy back has been a long-pending demand of both the corporates and the capital market and the Prime Minister’s announcement is expected to be received well in the stock markets when they open on Monday. The Indian promoters have
been asking for buy back of shares to consolidate
holdings in their companies and keep at bay hostile
takeover attempts by multinational companies, who they
feel have favourable playing field. |
Plastic industry flays goods tax CHANDIGARH, Oct 24 (PTI) — Plastic industry today strongly condemned the BJP Government in Himachal Pradesh for imposing goods tax on plastic goods and demanded its withdrawal as it entailed double taxation both on raw material and finished goods. The tax at the rate of Rs 500 per tonne has to be paid by manufacturers first on the raw material and then on the finished products, says S.S. Gupta, President, All-India PVC Pipe Manufacturers Association. This tax is so bad in law that it has to be paid even on the movement of plastic within the state. For instance, from Parwanoo to Baddi, goods tax has to be paid even if it has already been paid at two points, said Gupta, adding that goods tax was 30 times more as compared to yarn in the state and four times more than on steel. The notification that imposed the goods tax does not define “plastic goods”, whether the raw material comprising chemicals like resin, calcium carbonate, etc. fall under the definition of plastic goods or the plastic goods mean only finished products, Gupta said. Due to this ambiguity, manufacturers were being fleeced by excise department, he lamented. Describing the goods tax as “arbitrary and irrational” Gupta said that this tax came at a time when the whole industry was groaning under acute recession. “Such an unjustified and step-motherly treatment to plastic industry by the state government is beyond any comprehension,” he said. After liberalisation, the
Central and State Governments have launched various
multi-dimensional schemes for promotion of industry,
particularly the small scale but Himachal Government is
taking steps to scare away the entrepreneurs and
eliminate existing 200 plastic units which are employing
more than 5000 persons. |
Professionals now to pay service tax THE Central Government vide notification No. 55/98-ST-dated 7.10.98 has clarified application of service tax on professionals, viz architect, interior decorators, management consultants, practising chartered accountants, cost accountants, company secretaries, real estate agents etc. The service tax is to be charged by such professionals for services rendered to their clients in their bills and collected from the clients @ 5 per cent on taxable value and is payable by the professionals, irrespective of its recovery, without any minimum exemption limit. The finance (No. 2) Act, 1998 added 12 professionals in addition to the already existing services but its implementation was witheld due to growing resentment by the professional bodies. The government now has finally issued notification for implementing service tax on such additional services with effect from 16.10.98. According to this notification the practising chartered accountant is required to pay the service tax on services rendered by him for accounting, certification and audit of accounts under various statutes and excludes other services rendered by a chartered accountant. The service tax was first imposed by the Finance Act, 1994 with effect from 1.7.1994 on certain services and the list of services has been enlarged year after year. Under the service tax rules the assesse has to apply for registration to the Central Excise Officer (CEO) on form No. ST-1 & the CEO shall issue certificate of registration within 7 days. The service tax is payable by 25th of the month following the said quarter. The return in form No. ST-3 is to be filed half yearly by 25th of the month following half year. There is no time limit prescribed for the completion of assessment. The Government expects a
revenue of Rs 1250 crore during the year though it is
likely to fall due to deferment of implementation of
Service Tax. It is still debatable whether the service
tax now imposed on professionals is justified. |
Talent search through Internet CHANDIGARH, Oct 24 —
www.glamourzine.com, India’s first talent search
website on Internet was launched today by Parichay Arts
having offices in Gurgaon, Chandigarh and Calcutta. The
company aims to promote fresh talent by putting
portfolios and profiles of models, actors, actresses, TV
anchors, singers, dress designers, photographers,
directors, lyrics writers, scrip writers and beauticians
etc in the search website. The association of motion
pictures and TV programme producers, Mumbai has given the
recognition to this site. |
‘Chinese economy could crash’ WASHINGTON, Oct 24 (PTI) — Even though the Chinese economy is still growing at a healthy rate, there are fears that it could crash as an unprecedented amount of Chinese savings is illegally fleeing abroad, a report in the Wall Street journal has said. Although its reserves are just about sufficient to cover foreign debt, yet it suffers from the same fundamental problems as the Asian Tigers, - over investment and overcapacity, the report said. Instead of enduring some hardships, China is engaging in a huge round of state-financed investment, allocating 1.2 trillion dollars over the next three years - roughly 40 per cent of the gross domestic product (GDP), it said adding “part of the blame probably belongs to Premier Zhu Rongji’s attachment to the idea of 8 per cent GDP growth this year”. Much of what is called investment, said the journal, is in fact being paid as wages to workers turning out products worth less than the raw materials used in their manufacture. A large percentage of the
house-hold savings deposited with the four state banks
“has already been wasted, as it exists only in the
imaginary balance sheet entries of companies that are
actually insolvent and will never be able to pay back
their bank loans”, it added. |
Sub-committee formed LUDHIANA, Oct 24 — A sub-committee consisting of three officers under the Chairmanship of Mr D.S. Guru, director of industries, Punjab, has been formed to review the enhanced prices of plots in industrial focal points in the state. This was disclosed here today by Mr Jagjit Singh Shad, President of Northern India Chamber of Commerce and Industry. He said the chamber has been stressing upon the Government to review the increase in the prices of industrial plots allotted about 20 years ago. Mr Shad said a decision to set up a sub-committee was taken at a high-level meeting held at Chandigarh recently under the chairmanship of Mr Ramesh Inder Singh, Secretary, Industries. He said it was also
decided by the Government to extend the period of
construction and production on all industrial plots at
focal points for a further period of two years. |
THE IMF is guided by a principle of helping those who help themselves, says Michel Camadessus, its boss. Camadessus made the remarks on French radio, rejecting a comment by a listener who charged that the IMF worked on the basis of “kill them all and the market will take care of its own.” Camadessus said: “Our principle is help yourself and the heavens will help you because we are under the orders of international law.” “There is a treaty and for as long as it is in place I do not have the task of saving the world but of helping people who are trying to pull themselves out of trouble.” Rejecting arguments that the IMF did not have legitimate authority, he replied: I am accountable to 182 countries. The board of 24 members, on which all countries are represented under the agreements of Bretton Woods, meets three times a week to approve every action by the IMF. Camadessus loves to call himself “the only international civil servant” who can be dismissed any time. — AFP A tall dream The sky’s still the limit for Donald Trump’s dreams. The American magnate says his latest real estate project — a 262-metre monolith — will be the world’s tallest residential complex. The $ 360 million building will house condominiums starting at one million dollars. The building will have 72 floors, but the lobby’s vaulted ceilings will make it the equivalent of 90 floors. Demolition began on Friday on the vacant office building occupying the site near the United Nations. Trump’s plans to build the world’s tallest commercial building fell apart after federal officials said it would interfere with air traffic. He lost out on an effort to buy the defunct New York coliseum. Trump, who also owns Trump Tower, Trump Palace, and Trump International Hotel and Tower, plans to call the new building the Trump World Tower. What can I say? “Trump said. “The name creates value.” — AP 'SK perfume’ What sets Shahrukh Khan apart? His vibrance, his passion and his versatility. To cash in on his charm and energy, a French company has named a perfume after him. “SK perfume” has been launched in India by a French company, Jeanne Arthes Parfums. Shahrukh Khan has become the first actor to get the distinction. Will his female fans succumb to the charm? Only sale figures will tell. — TNS Terminator The US Department of Agriculture is forging ahead with plans to give a US corporation an exclusive patent on new seed technology, despite an international outcry that it threatens the livelihood of Third World farmers. Developed jointly by the US department and Delta and Pine Land Co., a subsidiary of the US-based Monsanto, the new bio-engineerings process is called technology protection system. It enables a company to genetically alter seeds to produce crops that in turn produce sterile seeds. Small-farmer advocacy groups and non-profit research organisations charge that the new process, bubbed “Terminator-technology”, will force farmers to return to the commercial seed market every year since they will no longer be able to save seed from their harvest. This process, sometimes called brown-bagging, is expected to be applicable to wheat, cotton, soyabeans and other crops. — IPS Better sex Women make better investors than men, according to a University of California study. The study by behavioural economists Terrance Odean and Brad Barber examined the trading records of 35,000 clients at an unidentified investment firm and showed that on average women’s portfolios beat men’s by 1.4 percentage point a year. The main reason for the difference is that men “churn” accounts more than women, buying and selling stocks 45 per cent more frequently. With stocks sold by both sexes generally outperforming those they bought, this practice racked up large losses for the males. The worst culprits were young single men who traded 67 per cent more than women, and who earned an average 2.3 per cent less than the females. The experts say that the
lower number of female trades may be caused by a lack of
familiarity with the stock market. But they also
attribute the gap to gender differences with men
believing they are better at investing than they actually
are, and also being biologically drawn to the thrill of
risk taking. — DPA |
Q: I retired from a nationalised bank in November, ‘94 and got my retirement benefits including gratuity amount in May, 1995. My bank paid Rs. 1,12,000 being gratuity amount and deducted Rs.2500 towards income tax at source. Consequently I included Rs.12000 in my total Taxable income of the Financial Year 1995-96 as gratuity amount upto Rs. One lakh was exempt under IT rules. I got additional gratuity of Rs.1,12,000 in April, 1997 due to wage revision effective November, 1993. The bank deducted Rs.7300 towards Income-tax at source. I understand that gratuity amount upto Rs.2,50,000 is exempt under income tax rules. However, my bank did not clarify the matter. Please clarify as to whether the amount of Rs.1,12,000 received by me during the current financial year is exempt and I can claim refund of Income-tax deducted by the bank in my tax return for the financial year 1997-98. — Roop Lal Verma, Barnala. Ans: As per Section 19(10) of the Income-tax Act, 1961 death-cum-retirement gratuity is exempt from Income tax. The maximum amount exempted is Rs.2,50,000 in respect of the gratuity amount which becomes payable on or after the 1st day of April, 1995 as per a Notification No.394 dated 1-2-96. Thus on the basis of the facts stated by you no amount of gratuity will be liable to payment of Income-tax. The full amount of gratuity received would be exempted. In order to claim refund of Income-tax deducted at source on the gratuity amount, you should file you Income-tax return and thus claim refund in respect of tax so deducted at source. Q: I and my wife both are in government service. We want to purchase a car costing about Rs 2 lakh jointly. The cost of the car will be meet up by withdrawing Rs 1 lakh each from our GPF accounts. Kindly advise what will be the income tax liability in the case. Will it be safer if this cost is meet up by taking loan of Rs 1 lakh from bank/financial company and Rs. 1 lakh from withdrawing from G.P. account. Tax liability in this case may also be advised. — S. Singh, Longwad, Shimla Ans: There is no Income-tax liability on your withdrawing Rs.1,00,000 from the GPF Account and thereby making investment in the purchase of the car. Even it will also not make any difference if you take a loan of Rs.1,00,000 and then buy a car. In any case the amount of interest payable for purchase of the car will not be allowed as a deduction to you. Q: I am a employee. I have my house constructed at Garhshankar and am posted at Pathankot and paying rent in Pathankot. I have my family living at Garhshanker. Also I am in receipt of House Rent allowance. Now please let me know as to whether I am entitled for house rent rebate in my income from salary. I have no other kind of income. — Varinder Kumar, Pathankot. Ans: Out of the salary income received by you, you will be eligible to claim exemption or deduction in respect of the house rent allowance received by you. You should, however, ensure that you produce the rent receipt to the person deducting tax at source in your office. Q: My Total salary/Income during the financial year 1997-98 is Rs.1,55,000 which also includes interest Income as under:- Interest from NSCs - 13500 ..................................Total -14790 Kindly advise me whether I would get exemption u/s 80L for the entire interest income i.e. Rs.14790 or for Rs.12000 only. Also please advise me nature of Govt. Securities for which Rs.3000 is earmarked under Section 80L beyond Rs.12000. — Brij Mohan Sharma, Pathankot. Ans: The
exemption u/s 80L will be available to you to the extent
of Rs.12,620 only. The nature of items for which Rs.3,000
is earmarked as additional deduction u/s 80L mainly
relates to income from Unit Trust of India or Mutual
funds. In your case, in addition to the normal exemption
u/s 80L amounting to Rs.12,000 you have also received
Rs.620 interest from ULIP. Thus, the maximum amount of
exemption u/s 80L to you would be Rs.12,620. |
Mangalore Ref net falls MUMBAI, Oct 24 (PTI) — The net profit of Mangalore Refinery and Petrochemicals Ltd (MRPL) was lower in the first half of 1998-99 at Rs 18.20 crore compared to Rs 22.43 crore in the same period of previous year. Since the company was covered under administered pricing mechanism (APM) till March 31 1998, the financial performance in 1997-98 was not comparable with the current year, the company said. MRPL, a joint venture of Aditya Birla group and Hindustan Petroleum Corporation Ltd, said APM guaranteed a post-tax return of 12 per cent, but from April 1, 1998, product prices were based on import parity. Net profit for the second quarter of 1998-99 was Rs 12.88 crore. Operating profit, which was Rs 151.76 crore for the second quarter, amounted to Rs 290.71 crore for April-September 1998, against Rs 297.40 crore in the corresponding period last year. Usha Intl turnover up 19 p.c. NEW DELHI, Oct 24 (PTI) — Usha International Ltd, a Siddharth Shriram group company, has registered a total sales turnover of Rs 188 crore during the first half of the current financial year (April-September 1998). Company’s turnover rose 19 per cent over the corresponding period last year, inspite of a recession in the consumer durable industry, the company said in a statement here today. The leading consumer durable marketing company recorded a gross profit of Rs 3.41 crore during the period, 114 per cent higher than over the corresponding period last year. The company’s exports (including orders booked on principals) during the six months registered a growth of 50 per cent and were estimated at Rs 26 crore. Bongaigaon Ref to pay 10.20 pc GUWAHATI, Oct 24 (PTI)
— The Bongaigaon Refinery and Petrochemicals Ltd has
declared a 10.20 per cent dividend for 1997-98. The Rs
20.38-crore dividend-payout represents a payout ratio of
30 per cent of its profit after tax, a company release
said here today. BRPL Chairman and Managing Director B.K.
Gogoi recently handed over a cheque for Rs 15.17 crore
towards dividend to Petroleum Minister V.K. Ramamurthy,
the release added. |
Uptron India Ltd. v. Shammi Bhan & Anr. 1998 LLR 385 (SC).
Chief Engineer, Minor Irrigation Deptt. U.P. & Ors. 1998 LLR 429 (All. HC).
General Manager (Operations), State Bank of India & Ors. v. State Bank of India Staff Union & Anr. 1998 LLR 402 (SC).
Anna Transport Corporation, Salem, Salem v. Labour Court, Salem and Anr. 1998 LLR 407 (Mad. HC).
H. Rejendra Pal v. Canara Bank and Anr. 1998 LLR 419 (Ker. HC).
Virender Singh v. General Manager, Fruit and Vegetable Project & Anr. 1998 LLR 444 (Del. HC)
K.L. Pahuja v. Ganga Nagar Sahakari Spinning Mills Ltd. & Anr. 1998 LLR 452 (Raj. HC). See also G.K. Malik v. Hindustan Petroleum Corporation Ltd. 1998 LLR 461 (Del. HC).
H.B. Vinobha and Ors. v. Managing Director, Hindustran Photo Films, Indu Nagar, Ootacamund & Anr. 1998 LLR 391 (Mad. HC).
Anil Kumar Tiwari v. Executive Engineer, Tubewell Division-I Allahabad and Anr., 1998 LLR 415 (All. HC).
M.P.S.R.T. Corporation Ltd. v. Member, Judge, State Industrial Court and Ors, 1998 LLR 413 (MP HC).
Delhi Cloth & General Mills Company Ltd. v. Lt. Governor & Ors., 1998 LLR 432 (Del. HC).
Tata Memorial Hospital Workers Union & Anr. v. Madhukar S. Wani & Ors., 1998 LLR 458 (Bom. HC). Source:
LLR=Labour Law Reporter, May ‘98.
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| FICCI chief NEW DELHI, Oct 24 (UNI) — Mr Sudhir Jalan today took over as the new President of Federation of Indian Chambers of Commerce and Industry . Mr Jalan took over from Mr KK Modi whose one-year term got over today. The change of guard took place at the chambers annual general meeting here where former Finance Minister P Chidambram gave the valedictory address. BHEL Onions Silver firm ICRA |
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