Government banks on extended KVSS
NEW DELHI, Jan 2- Faced with a slippage in fiscal deficit and poor revenue collections this year, the Finance Ministry is now banking on among other steps, the extension of the Kar Vivad Samadhan Scheme to help it cover lost ground.

PM launches express highway project
BANGALORE, Jan 2 — Prime Minister Atal Behari Vajpayee today launched the 7,000 km long express highway project running North-South and East-West here and said the entire stretch should be completed within two plan periods.

HUDCO bond issue in Feb
CHENNAI, Jan 2 — The Housing and Urban Development Corporation will come out with a bond issue in February to raise Rs 200 crore, according to a senior official.

Escorts strike ends
FARIDABAD, Jan 2 — The 43-day-old tool down strike by the employees of Escorts Group of Companies was withdrawn unconditionally here last night.

FIPB hearing postponed
NEW DELHI, Jan 2 — The Foreign Investment Promotion Board hearing on several large proposals, including the applications of Hyundai Motors, Morgan Stanley, GE Capital Services and Henkel-Spic, have been postponed for a week following the recent change of guard at the Industry Ministry.

Government banks on extended KVSS
Bid to cover fiscal deficit
From T. V. Lakshminarayan
Tribune News Service

NEW DELHI, Jan 2- Faced with a slippage in fiscal deficit and poor revenue collections this year, the Finance Ministry is now banking on among other steps, the extension of the Kar Vivad Samadhan Scheme (KVSS) to help it cover lost ground.

Though the Finance Minister, Mr Yashwant Sinha, had not fixed any target for collections under this head, he was optimistic that huge sums of direct and indirect taxes, around Rs 12,000 crore, locked up in litigation over the years, would be realised under the scheme.

The scheme launched on September 1, 1998, had a poor response initially and it was only towards the end of December that declarations started pouring in.

As on December 29, KVSS had elicited more than 30,000 declarations worth Rs 2650 crore. Declarations for settlement of disputes have been filed for an amount of Rs 1700 crore in case of direct taxes and Rs 950 crore from indirect taxes. The tax payable in terms of the scheme on these declarations would be of the order of Rs 1,000 crore.

The Ministry, which had threatened to go on the offensive against tax evaders after the closure of the scheme, seems to have met its objective as towards the closure of the scheme it received a number of requests from various quarters seeking extension of the KVSS.

There was an overwhelming response for the scheme in the last three days of December and the number of declarations increased dramatically.

Realising that the scheme still held rich potential, the Government not only extended the scheme but also made the provisions under it flexible and wide.

The objective of the scheme, according to the Ministry officials, was to collect revenue, which would otherwise be locked up, and to reduce the burden of litigation. On the basis of the feed back obtained from litigants and tax consultants on the initial scheme announced, two major amendments were made to widen the scope of the scheme.

Firstly, the scheme has been made applicable to departmental appeals, which constitute a larger percentage of pending litigations. Secondly, the scope of the Samadhan scheme has been extended by co-notices. This would ensure that all the cases relating to a particular demand would be terminated in one sweep.

There were also apprehensions that the entire tax payable under the scheme may not get into the official coffers before March 31, 1999 on which date the fiscal deficit would be calculated. The reason was that the Revenue Department had been given 60 days time under the scheme to process the applications and determine the tax payable.

The Ordinance extending the scheme has dealt with this problem by providing that the designated authorities would pass orders determining the sum payable within 30 days only as against 60 days available in respect of declarations to be filed in the extended period. This would ensure that the revenues are realised within the current financial year.

Apart from the success of the Samadhan scheme, the Finance Ministry is also looking into other means to supplement its revenues.

One such proposal on which the Ministry is working is to borrow funds from the financial institutions by pledging public sector shares with them. Another proposal under consideration is for the Government to disinvest its stake in the public sector through the buy-back route.

According to reports, the Government has targeted a total of around Rs 3200 crore from the sale of its shares in five public sector units, including Indian Oil Corporation, ONGC, GAIL, MTNL and VSNL. The offer is likely to be made simultaneously to meet the March 31 deadline for the disinvestment plans.

There is also a proposal for the Government to fall back on the Oil Pool Account, which has a surplus of over Rs 17,000 crore due to the low international oil prices.

HUDCO bond issue in Feb

CHENNAI, Jan 2 (PTI) — The Housing and Urban Development Corporation (HUDCO) will come out with a bond issue in February to raise Rs 200 crore, according to a senior official.

“We are confident of mopping up this much money,” Chairman and Managing Director V. Suresh told reporters here. The tax-free bond issued by the corporation last year mobilised Rs 181 crore and exceeded the target, he said.

Mr Suresh said HUDCO had made a record loan sanction of Rs 903 crore for housing and urban infrastructure projects in the country at its board meeting held on December 31. A total of 46 schemes, costing over Rs 1,354 crore would be undertaken with HUDCO’s loan component being Rs 903 crore. Of this amount, Tamil Nadu’s share would be Rs 269 crore.

On the housing front, more than one lakh units in urban and rural areas had been approved for funding. This included construction of 42,480 housing units for the economically weaker sections, spread over Gujarat, Karnataka and Madhya Pradesh under the central government’s two million additional housing programme.

Under the urban infrastructure portfolio, 18 schemes, covering sectors like roads and bridges, solid waste management, commercial and social infrastructure and water supply had been sanctioned at the board meeting.

Cumulatively, the schemes sanctioned involved a project cost of Rs 750 crore, of which HUDCO’s loan component would be Rs 452 crore.

Under the transport sector, schemes worth Rs 293.40 crore for laying and construction of roads and bridges with HUDCO’s loan assistance of Rs 183.92 crore had been sanctioned in Gujarat, Punjab and Tamil Nadu.

Mr Suresh said three innovative and trend setting schemes for co-generation of energy from bagasse from sugar mills had been sanctioned in Gujarat, Karnataka and Maharashtra. The schemes envisaged production of surplus power of 5 mw, 7.75 mw and 13.7 mw for Gujarat, Karnataka and Maharashtra, respectively.

HUDCO had sanctioned a national games sports complex in Imphal at an estimated cost of Rs 77.91 crore and HUDCO’s loan assistance would be Rs 30 crore.

With the sanction of Rs 903 crore now, the total sanction during 1998-99 worked out to Rs 2,765 crore, including Rs 1000 crore for infrastructure development alone, he added.

Escorts strike ends
Tribune News Service

FARIDABAD, Jan 2 — The 43-day-old tool down strike by the employees of Escorts Group of Companies was withdrawn unconditionally here last night.

Work in all units of Escorts started today, a spokesman of the company told TNS.

The strike which began on November 23 ended after the intervention of Mr B.K. Panigrahi, Deputy Commissioner, and Mr Umrao Mal Purohit, general secretary of the All-India Hind Mazdoor Sabha.

According to a spokesman, talks for a new wage agreement would be resumed only after complete normalcy in all units of the company was restored.

He said during the strike, 23 employees were dismissed, 80 suspended and 140 chargesheeted. Disciplinary action taken against the striking employees would be reviewed on merit and no commitment had been made that all would be taken back in service, he added.

The strike had badly affected hundreds of ancillary units in various part of Haryana which supply parts, especially for the manufacture of tractors and motor cycles by the Escorts Group of companies.

Early last month, the Haryana Government had declared the strike illegal but it did not have any impact on the employees.

PM launches express highway project

BANGALORE, Jan 2 (PTI) — Prime Minister Atal Behari Vajpayee today launched the 7,000 km long express highway project running North-South and East-West here and said the entire stretch should be completed within two plan periods.

Vajpayee asserted that the tendency for enormous time and cost overruns of road projects in the country must end.

“When we are aiming to build world class highways, we must be prepared to complete projects as per world standards,’ he said at a function at Devanhalli near here, adding that the “longest, largest and most ambitious project in independent India must be completed in not more than two plan periods.”

Called the national integrated highway project, it would link Kashmir to Kanyakumari and Saurashtra to Silchar through a six-lane high speed corridor.

He laid the foundation stone of a six-lane carriageway at National Highway No 7 and dedicated a four-lane carriageway of Bangalore-Hosur section to the nation, thereby marking the beginning of the massive project.

Prime Minister said that since better road network ensured faster development, his government has announced plans for construction of National Highways for a length of 11,068 km.

This, he said, would lead to an addition of about 30 per cent to the existing length of 38,517 km of national highways.

Karnataka Chief Minister, J.H. Patel and several Union Ministers, including M. Thambi Durai, Ramakrishna Hegde, Anant Kumar and Babagouda Patil were present on the occasion.

Union Surface Transport Minister M. Thambi Durai said the government had decided to commence work on the project immediately at 20 points all over the country.

Stating that ‘mega projects need mega efforts,’ the Prime Minister said his government would work energetically for the sustained progress of the project and would ensure maximum benefit to the villages and villagers located along the route.

The Prime Minister appreciated the ‘excellent work done in a short time’ by the task force on infrastructure, which has been mandated to formulate an integrated transport policy for the country.

Stating that the government would actively seek participation from the Indian private sector and foreign investors for the project, he said the task force had already finalised a model concession document for the purpose.

Thambi Durai said the budgetary support of Rs 2700 crore for development and maintenance of national highways was not adequate when the government had taken an ‘aggressive action for road development’ and the actual requirement was at least double the allocation.

Nepal seeks private investment

CALCUTTA, Jan 2 (PTI) — Nepal has given a push to the liberalisation process for which private sector investments are being sought vigorously, Foreign Secretary of Government of Nepal Murari Raj Sharma said here today. Nepal offers avenues for investments in water resources, forest and tourism, Sharma said addressing members of Indian Chamber of Commerce. The country’s infrastructure sector, including power and telecom were also prospective areas for such investments, he added.

On bilateral trade between India and Nepal, he said that one-third of the country’s GDP comprised of external trade, and India was the major partner in this regard.

As the bilateral trade was heavily import-dominated, he said the growth should be in a mutually sustainable manner.

FIPB hearing postponed

NEW DELHI, Jan 2 (UNI) — The Foreign Investment Promotion Board (FIPB) hearing on several large proposals, including the applications of Hyundai Motors, Morgan Stanley, GE Capital Services and Henkel-Spic, have been postponed for a week following the recent change of guard at the Industry Ministry.

Ministry sources told UNI that the meeting was postponed at the last hour as the new Industry Secretary Ajit Kumar has sought some time before chairing the FIPB meeting.

Incidentally, the meeting was earlier scheduled for today and several key proposals, reportedly amounting to Rs 1000 crore, were listed for hearing today. “But since the new Secretary has sought some time to understand the functioning and other matters, the meeting has been postponed by a week.”

The next meeting would be held on January 9 and the proposal listed for today would be taken up then, the sources added.

This is the second week in a row that the FIPB meeting has not been held. The meeting was not held on December 26 owing to Christmas holidays.

Pentafour storms into Hollywood

When producer Ashok Amritraj’s “Jeans” was nominated in November as India’s official entry for the Oscar awards in the category of Best Foreign Film, Sriram Sundar Rajan of Pentafour Software and Exports Ltd., one of India’s largest software companies, was genuinely elated.

After all, the film’s sophisticated technical effects and, more importantly, the seamless portrayal of Prasanth in the lead role of identical twins, had been created by Pentafour. ‘Jeans’ had “the longest special effects for probably any Indian film ever made, because we had 22 minutes of composition between multiple characters,” said Rajan in an interview. The nomination gave Rajan, Pentafour’s head of business development in Hollywood, one more reason to point with pride at what the company could accomplish. It had brought the company another step closer to being a major player in Hollywood.

But Pentafour is banking on the release of “Sinbad: Beyond the Veil of Mists,” its animated full-length feature that utilises optical motion capture, to push it into the front ranks now occupied by Disney and Dream Works.

The optical motion capture animation process is regarded by some as visually jerky and inferior to fully computer-generated imaging used in films like “Antz” and “Toy Soldiers,” but Rajan is confident that Pentafour can deliver an exceptionally high-quality product at very low cost. “Antz” and “Toy Soldiers” are nothing more than the product of an animator’s imagination, but “when it comes to humans, the animation has to be perfect,” argues Rajan, who joined Pentafour two years ago. “What optical motion capture helps us to do is achieve that perfection, because what we get out of that movement is perfect human movement,” he adds. — IANS

Gender relations

What happens to workplace gender relations when an American high-tech multinational corporation opens a subsidiary in India?

“Gender relations in an American multinational corporation in India,” says American sociologist Winfred R. Poster, “are influenced by social control systems of both the United States and India.” In a paper presented at the 25th All India Sociological Conference in Jaipur, Poster, who teaches at the University of Illinois at Urbana-Champaign, said the Indian and American cultures operated fairly within the organisation.

Under the influence of Indian gender ideologies, women employees were literally “confined” within the boundaries of American Technical, the fictitious name given to the researched company.

The American form of gender relations becomes dominant inside the organisation, among employees, while outside it the Indian way takes over, said the paper which was based on as many as 60 interviews of the company’s 200 employees at Delhi and Bangalore.

As part of the Indian gender relations, several restrictions are placed on women’s jobs, regarding their social interactions, physical and temporal mobility. This was in sharp contrast to the American gender relations, which guide women’s relations with their male colleagues within the organisation. Indian practices and beliefs influence the extra-organisational gender relations. Regardless of how employees treat one another inside the company’s walls, they feel a need to adopt Indian relations when interacting with people outside their place of work. The main reason is a belief that there are people outside of particular danger to women and that precautions need to be taken to shield women from those groups. — IANS

Good samaritan?

The Thai police have charged a businessman with making up a publicity-seeking story about finding 5 million baht ($ 140,000) in a taxi and returning it to its owner.

Soroj Theekasathien was on the verge of opening a Bangkok nightclub called ‘Good Samaritan’ when he claimed his good deed, according to newspaper reports. He has been charged with making a false statement and released on a bail of 20,000 baht ($550.)

The police were suspicious when Soroj’s story surfaced on a radio call-in show in early December. It was similar to the case of a taxi driver earlier this year, who was discredited and jailed for fraud after taking money and prizes as a reward for his good deed.

The taxi driver had claimed that he had found a small fortune in his cab and returned it to a grateful French tourist at Bangkok’s airport, whom no one was ever able to subsequently find.

Soroj claimed that he had also found the money in the back of a taxi and called the radio show to put out a bulletin for the owner. A building contractor, later determined to be Soroj’s friend, claimed it and the money was turned over. — Reuters

Amusement

For the Americans, business prospects in India are far from amusing. They are confident of the fact that the Indian amusement business will grow into a $ 325 million industry by 1999.

Targeting this burgeoning market, representatives of more than 120 companies, both from the USA and India, will meet shortly to explore the possibilities of entering into strategic alliances or joint ventures to tap this huge market, offering a scope for a gamut of entertainment business.

Realising the vast potential the amusement industry offers, an India amusement expo is being held in early February, 1999 for the third year running. It will be co-sponsored by the American embassy, the American amusement machine association and intergame limited. — UNI

FIIs

THE way the FIIs made frenzied purchases of pivotal stocks during the calendar week that commenced on December 7, one would have thought that the passage of the IRA and Patents Bill in Parliament would be a cakewalk. However, the FIIs seem to have forgotten the amazing propensity of the Indian political class to do a volte-face at the last moment, thus denting their pockets even further.

Insurance sector

NOTWITHSTANDING the fact that they have been around for donkeys years, the grapevine has it that the two leading domestic insurance corporations have tapped just 20 per cent of the potential market. Does this suggest plain inefficiency and indifference, or does it reinforce the popular belief that there is adequate room for foreign players too in this segment?

Wimco

THE grapevine is abuzz with rumours that the turn of this century will witness Wimco, which has been down in the dumps of late, regaining some of its past glory. The management of the company too seems to have sought solace in the core competence mantra, and it is rumoured that things will only get better herefrom.

F.M. vs. C.As

DOES the current Finance Minister have a serious grouse against Chartered Accountants? To start with, during the course of the last Budget presentation he singled out C.As for levying a cumbersome service-tax and now comes the Government’s move to set up an Accounting Standards Committee to override those established by the C.A. Institute. What next?

Punjab Anand Lamps

THE cash-rich Foreign institutional investors seem to be eyeing potential dark horses rather than wasting time on traditional favourites which seem down and out for the count. The grapevine is abuzz with rumours that a relatively lesser known company high on the shopping list of FIIs for 1999 is Punjab Anand Lamps. Any takers?

by R.N. Lakhotia

Q: I have been allotted a PCO by the Department of Telecom, under the category of unemployed persons. My query is whether service charges @ Rs 2/- per call is also the income over and above the commission received from the Department and whether also the income from local calls is confined to commission alone or Rs 2/- per call (less commission) as routinely charged from the customers. Also please advice whether expenses as salary for self and for the assistant employed and other expenses as rent of shop, the bills of electricity, are deductible from income.

— Kamal Soni, Amritsar.

Ans: You will be charged to tax on the income arising from the service charges as also the income by way of commission received from the department. The salary paid by you to your Assistant as also the expenses pertaining to rent paid for the shop, the payment of bills for the electricity, etc would all be deducted. However, there will be no deduction in respect of the salary paid by you to yourself.

Q: My basic salary is Rs 7880 and I get 15 per cent rent i.e. 1182 and CCA 120.

How much rent should I pay to my wife who owns a house, so that my tax liabilities on house rent/CCA income becomes nil. My wife is filing her I.T. return.

— S.D. Singh, Jalandhar.

Ans: On the facts stated by you, you should pay rent of Rs 1,970 per month to your wife in which case the entire house rent allowance received by you from your employer would be exempt from Income-tax. The city compensatory allowance would, however, be liable to tax.

Q: I am Bank Manager. I have constructed a house after availing bank loan of Rs 2 lakh in 1994. My query are as under:-

1. Whether I can avail 100 per cent tax rebate on Interest on house loan under Section 71 read with Section 24 (i) (vi) of Income Tax Act 1981.

2. If yes, please quote, who will be competent to give relief i.e. my employer at source or Income Tax authorities.

3. Whether this amount of interest directly less under Sec. 10 in form 16 or quote under which chapter this can be reported.

— Vinod K. Sood, Kulu

Ans: As per the amendment made by the Finance (No.2) Act, 1998 you will be eligible for tax deduction in respect of the self-occupied house property for payment of interest on loan. The maximum amount of such deduction for the Assessment year 1999-2000 is Rs 30,000. Your employer will be competent enough to give you the benefit of loss arising to you as a result of interest payment for self-occupied house property.

Q: It is submitted that I am a senior citizen, retired Army officer. As per your reply by senior, citizen in The Tribune dated 7 June, 98, you have given to understand that income from pension, will be entitled to standard deduction equal to 1/3rd of the pension amount.

Please clarify, will this 1/3rd standard deduction from the income of pension, will be in addition to standard deduction of Rs 20,000 for salaried person and will not have tax upto the amount of Rs one lakh.

My income from the service is Rs 60,000 and pension of Rs 71,000. Please advise if I will be liable to pay tax with Rs 6200 as Provident Fund contribution and Rs 5000 deposit with ICICI Bond “Tax Saving”.

May I request to intimate the authority under which income from pension is entitled to standard deduction of 1/3rd of the pension amount.

— Maj Prithipal Singh Syal (Retd), Ludhiana.

Ans: Pension is treated as a part of salary hence standard deduction is available on the pension income. This is as per Section 16 of the Income-tax Act, 1961. The standard deduction in respect of salary income combined with the pension income is equal to 33/1/3rd per cent of the salary subject to a maximum of Rs 25,000 if the salary income + the pension income does not exceed Rs 1.00 lakh. On the facts stated by you your total salary income and the pension income is equal to Rs 1,31,000. In this situation the maximum consolidated standard deduction which you will be entitled to in respect of your salary and pension incomes taken together would be Rs 20,000 only. As you are a senior citizen after availing the tax rebate u/s 88 and section 88B there will be no liability to Income-tax for the Assessment year 1999-2000. You must, however, file your Income-tax return in due course even when the net tax payable is nil.

By Praful R. Desai
The term ‘land-lord’

Q: Is the expression ‘land-lord’ limited to denote the owner of the house? or, does it include attorney?

Ans: Allahabad H.C. in Coop Industrial Syndicate Ltd. v Vinod Kumar Agarwal (1998 (2) R.C.J. 252) was considering this point.

The H.C. said the land-lord means a person to whom rent is payable. It is not necessary that such a person should also be the owner of the building which is let out. But an owner, if rent is payable to him, may also be a land-lord. Except for the purposes of clause (g), the agent or attorney of a land-lord authorised to receive the rent also comes within the definition of the landlord.

The building in question being vacant was open to release or allotment U/s. 16 of the Act. A landlord has got the statutory right to get a vacant building released in his favour.

It is clear from the recitals made in the agreement of sale that respondent No. 1 was authorised to realise the rent from the other tenants of the building and to issue receipts or rent in their favour. He was also authorised to appropriate the amount recovered from the tenants as rent and also to pay the house and water taxes.

Possession of respondent No. 1 over the building in question was also admitted and he was permitted to continue in possession over the same. Even in the power of attorney, respondent No. 1 was authorised to file suit for ejectment of the tenants, to sign plaint, vakalatnama, affidavits etc. if necessary.

Under the said facts and circumstances and in view of the law laid down by the S.C. and this Court, in the aforesaid cases, respondent No. 1 was the landlord of the building in question within the meaning of the term used in S. 3 (j) of the Act. He, therefore, had the right to apply for release of the building in question in his favour, held the H.C.

Consequently, the H.C. concluded that the Rent Control and Eviction Officer, after following the procedure prescribed for the same, rightly released the building in question in favour of respondent No. 1.

In that way, the H.C. dismissed the present writ petition.

ICSI chief
NEW DELHI, Jan 2 (TNS) — Mr Virender Ganda has been elected as the President of the Institute of Company Secretaries of India (ICSI) with effect from January 1, 1999. Mr Ganda, a practising corporate lawyer , is a Fellow Member of the ICSI and the ICWAI. Mr J Sridhar has been elcted as the Vice President of ICSI.

SAIL
NEW DELHI, Jan 2 (PTI) — Steel Authority of India Ltd. (SAIL) has achieved a domestic sales growth of 16 per cent during the first nine months of the current fiscal as compared to the corresponding period last year. The company sold around 5.1 million tonnes of steel products in the country during the April-December period, a SAIL statement said, here today.

Finance cos
MUMBAI, Jan 2 (PTI) — The Reserve Bank of India (RBI) has rejected applications for registration submitted by three finance companies, Allianz Capital and Management Services and KMF Limited, both of New Delhi and AP Finleasing India of Patna. The RBI, in a statement, said these companies cannot transact the business of non-banking financial institutions.