Sunday, March 28, 1999
today's calendar
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B U S I N E S S | Sunday, March 28, 1999 |
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NHPC signs MoU with Power
Ministry |
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FIPB clears FDI worth Rs
630 crore |
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Captive
power key to survival Hotels’
body celebrates 50th year Withdraw
entry tax |
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NHPC signs
MoU with Power Ministry NEW DELHI, March 27 —National Hydroelectric Power Corporation Limited (NHPC) has signed a Memorandum of Understanding (MoU) with the Union Power Ministry, setting performance targets for 1999-2000. The performance targets include commissioning of 60 MW, Rangit Project in Sikkim, speeding up work on ongoing projects, generation of 9250 million units, attaining a gross margin of Rs 1039 crore, achieving 85 per cent machine availability, gaining a net profit of Rs 211 crore and start of construction work on new projects . The MoU was signed by the Power Secretary, Mr V K Pandit and Chairman and Managing Director of NHPC, Mr Yogendra Prasad. The target for generation from the operating power stations of the corporation has been fixed at 9250 million units as against 8520 million units in the previous year. NHPC with an installed capacity7 of 2133 MW is at present supplying power to 15 states and union territories in the country. The corporation expects the gross marking to increase to Rs 1039 crore as against Rs 980 crore during the previous year registering an increase of 6.20 per cent. In the MoU, the
corporation has sought the assistance of the government
in prevailing upon the state governments to clear the
outstanding dues and open Letter of Credit to consider
projects being executed and proposed for execution for
multilateral and bilateral financial assistance in
getting tariff fixed expeditiously.
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FIPB clears FDI worth Rs 630 crore NEW DELHI, March 27 (PTI) — Foreign Investment Promotion Board (FIPB) today cleared 42 proposals worth Rs 630 crore, including one by a Mauritius based company to set up hotels in India at a total foreign direct investment (FDI) of about Rs 380 crore. The board approved the proposal of GPS investments of Mauritius to set up three wholly-owned companies to invest in hotels and hospitality services, FIPB sources said. The first company would have an equity capital of Rs 189 crore, while the second and third would have a capital base of Rs 85 crore and Rs 107 crore respectively, the sources said. FIPB also cleared a proposal by Bfcton Dickinson to increase its paid up capital by $ 20 million in its existing venture in India to manufacture diagnostic and medical equipment. The equity capital in the 100 per cent owned venture would go up from $ 30 million to $ 50 million, the sources said. The board also allowed Japanese Itochu Corporation to set up a 100 per cent owned company for offering consultancy and technical services in the country with a FDI of Rs 10 crore. The Japanese company would
also be allowed to take up turnkey projects in the
infrastructure sector, the sources said. |
Hike in ST
may hit auto trade LUDHIANA, March 27 — The move by the Punjab Government to hike the sales tax on authorities from 3.5 to 8 per cent may spell ruin for the auto trade in the State and trigger off a massive shifting of business from Punjab to Chandigarh and Haryana. Mr Sooraj Dada, President of the Punjab Auto Dealers Association, while talking to TNS warned that if the government was looking for an increase in revenue by hiking the sales tax on the automobiles, it might lose even what it was collecting. “The policy of the government will prove to be counter-productive,” he said. The increase in the sales tax on automobiles in Punjab, as proposed in the Budget for 1999-2000, would make Maruti-800, Zen, Esteem, Sumo, Safari and trucks costlier by Rs 30,000. “Who will purchase the vehicle from us when these are available at just 3.5 per cent sales tax in Chandigarh and Haryana,” he said. Punjab, he pointed out, collected nearly Rs 120 crore annually as sales tax on automobiles. Besides, large sums were collected on account of the registration and road tax on new vehicles. With this hike Punjab might lose up to 90 per cent of the auto business. The people would also prefer to register their vehicles in the UT and Haryana. With the new sales tax rates, a Maruti-800 will become costlier by Rs 8,000, Zen Rs by 14,000 and Esteem by Rs 24,000, Tata Safari by Rs 30,00 and Tata truck by Rs 26,000. The Punjab Auto Dealers Association will convene a meeting to discuss the situation arising out of the sales tax hike. “We are thinking in terms of opening retail outlets in Chandigarh and Haryana,” said Mr Dada, “almost all the Maruti dealers in Punjab have approached the Maruti Udyog Limited for establishing retail outlets in Haryana.” A deputation of the
association has also met the Finance Minister, Capt
Kanwaljit Singh, and he has promised to look into the
matter. |
World Bank mission calls on Badal CHANDIGARH, March 27 (PTI) — A World Bank mission today called on Punjab Chief Minister Parkash Singh Badal to discuss the progress of the second state health system development project under implementation in Punjab with an outlay of Rs 421.88 crore. The mission was led by Tahwit Nawaz, senior economist in Washington. The project was started to improve health care services by opening and remodelling about 150 hospitals in different parts of the State, an official spokesman said. Mr Nawaz said the World
Bank would give liberal loans for strengthening health
care-system and opening super speciality hospitals with
active participation of private companies. |
Hotels’
body celebrates 50th year CHANDIGARH, March 27 — The Hotel and Restaurant Association of Northern India (HRANI), the first trade association of the hospitality sector is celebrating 50th year of its formation, said Mr Man Mohan Singh Kohli, President of the association. He said the association started with 27 members in 1950 to give a platform for the growth as an industry. Today 900 hotels, restaurants, travel agents and others connecting with this business are its members. Mr Kohli said that the
association has requested the Department of Tourism, the
Government of India to make celebrations events a part of
the celebrations of ‘Explore India millennium
year’. He said the managing committee of the
association will meet at Shimla soon to give the final
shape to the celebration programme.
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Captive
power key to survival The chloro - alkalies industry in India has been fighting recession for more than a year now and caustic soda is one of the key components thereof. Caustic soda accounts for 75 per cent of the domestic chloroalkalies market with a turnover of Rs 5,000 crore. India has a capacity of 20 lakh tonnes per annum of caustic soda which accounts for 5 per cent of the global capacity of over 400 lakh tonnes. The other caustic soda players still operating at 80-100 per cent capacity when the average industry capacity utilisation has fallen to around 60-63 per cent are the ones who are either producing on the membrane cell technology, or are drawing power at subsidised rates in some states like Punjab. In fact, with the currency meltdown in the South-East Asia, the exporters are now unable to find it viable to export their surplus production. The industry’s revival is now pegged on two factors. One, the revival of the user segments like paper, soaps, textiles, and rayon among others, and second, way the government takes up the serious issuers which AMAI has been lobbying for long. Among such issues figure the call to bring down import duties on capital goods like power plants and those required for advanced membrane cell technology, and the one to not penalise the industry by charging higher rates for power. Whatever may be the attitude of the government towards such justified demands, one thing is for sure. In the years to come, only key players with captive power facilities and, consequently, lower costs, will survive. Gujarat Alkalies A chloro-alkalies major, Gujarat Alkalies & Chemicals Ltd (GACL) had a capacity to produce 1.7 lakh tonnes of caustic soda at the end of the last financial year, which was more than 8 per cent of the domestic capacity. However,during the current financial year, the company has company has consolidated its position in the caustic soda segment by commissioning the first phase of the 350 tonne per day plant near Dahej in Gujarat in January 98. It started six months behind schedule and will start commercial production later in the current calendar given the poor market conditions and the situation of over capacity. Once the second phase of the captive power plant gets off the ground, GACL will be self- reliant for both its units: Dahej and Vadodara. Following which, the company can hope to bounce back with large savings on the power cost front. Kanoria Chem KCIL is perceived to be a producer of caustic soda, a product that has been fighting recession for over a year. But far from being a single - product company, KCIL owns two well - integrated chemical units at Renukoot and Ankleshwar, besides a captive power plant of 25 MW, which supplies to its caustic soda unit. Economic recession and additional capacities in the caustic soda segment, which is KCIL’s mainstay with a 37 per cent share of the turnover also affected growth. The commissioning of the captive power plant at Renukoot will help the company save Rs 20- 25 crore since one unit of power generated at the plant is cheaper by a rupee compared to the UPSEB rates. The company has a monthly consumption of 1.5 crore units of power. But for the captive power, the company would not be in a position to operate at capacity levels in light of the lower realisations. Punjab Alkalies Punjab Alkalies & Chemicals Ltd (PACL) has some unique locational advantages since it does not operate in the overcrowded Western India region. On the other hand, since the by - product chlorine does not find too many buyers in the northern region, realisation is low. The other factor, which has helped the company post better results is the higher availability of power and cheaper rates in Punjab. Because of this, the company has been able to perform well despite the lacunae. The company has set up a captive power plant of 51 MW capacity using naphtha as a fuel. Besides, the company is also planning to convert one of its conventional route mercury cell - based caustic soda unit to a 200 tonne per day of membrane call technology biased unit. The same, when materialises, shall again save power costs for the company. At the moment, it is unlikely that the company will post an improved performance in the second half of current financial year, and it may have to wait till the revival of industry before its plans go on stream. Chemfab Alkalies Chemfab Alkalies Ltd is
active in the southern regions of the country and is also
among the few producers of alkalies who were still
exporting it last year. With a capacity to produce 31,000
tonne per annum of caustic soda, Chemfab Alkalies case is
similar to that of Punjab Alkalies. This is because down
in the south, the average rate of drawing power out of
state board was costing them lower than perhaps the
production cost of power out of self owned facilities.
The company enjoys the comfort of having high reserves,
which stands it in good stead during these tough times. |
Industry welcomes telecom policy NEW DELHI, March 27 (UNI) — Major industry chambers today welcomed the new telecom policy as a “great leap forward” and “truly visionary and futuristic”. The Confederation of Indian Industry (CII) said the new policy announced yesterday would make the Indian telecom services industry truly world class. It particularly welcomed opening up of the long distance services to the private operators by January 1, 2000 usage of the existing network of railways, GAIL and ONGC for national long distance voice communications, one time entry fee and revenue sharing regime for private operators. However, the Confederation said a disappointing feature is that the Telecom Regulatory Authority of India (TRAI) recommendations are not binding or mandatory as it would undermine the functions of the regulator. In a press release, CII President Rajesh Shah questioned the decision to reimburse to DoT such amounts taken as licence fee as Budgetary subsidy. On the other hand, the PHD Chamber of Commerce and Industry (PHDCCI) said various issues of concern like licence fee of existing service operators have been left open-ended. The policy has also skirted the crucial issue of segregating the policy functions, regulatory functions and service-providing operations. However, PHDCCI President Ashok Khanna in a statement welcomed setting up of a separate department of telecom services. The national Telematics
forum welcomed the government move to impose the
universal access levy and hoped it will be used in
developing rural communications. |
Withdraw
entry tax EIGHT out of 12 Lok Sabha elections have seen GDP growths in election years and decline thereafter. So is the case with States. This is political aspect and Punjab’s current Budget confirms to this pattern. Socially this year is special for Punjab — it being the tercentenary year of the Khalsa Panth. This is also the goodbye year of the century. Both events do not justify heavy doses of taxes. Economically the Finance Minister has faltered on many aspects. It is well recognised by now that evasion of taxes can only be checked by reducing taxes; Central Budgets have amply proved this. Increasing of sales tax rates across the board will put revenue collection in back gear. Punjab’s economic scenario is exclusive and demands policies accordingly. Bulk of inputs for industry and items of consumption for public come from outside. Major part of industrial production of Punjab goes outside. Seen from this angle concept of entry tax is not workable for Punjab. The Finance Minister has justified entry tax to take care of lower rates in other States. Many meetings of northern states including the recent one have taken place to stress on uniform rates for all States and trend is discernible. By hiking sales tax rates in Punjab and levying entry tax is a reverse trend. Entry tax will ensure that prices of inputs of industry will go up to the great disadvantage of industry. The Punjab Government has separately increased octroi rates very sharply. Any harmful concept is always started modestly and is made formidable after wards. Octroi on power was 2 paise per unit to start with which is now 4 paise/unit. Entry tax should be withdrawn if industry of Punjab is to be saved. Entry tax speaks against the prevailing market related economy. Central Sales Tax is very crucial for Punjab’s industry which is facing stiff competition in every State. The Central Government has been stressing states to reduce Central Sales Tax from a high of 4 per cent to 1 per cent. States are gradually doing so. Punjab Government also reduced Central Sales tax to 2 per cent for some items. Iron and steel trade came for special focus of Finance Minister. He has reduced sales tax on this category from 4 per cent to 2 per cent. This seems only rhetoric. Within Punjab sales are from dealer to dealer and incidence of tax is very small and hence no visible benefit to industry. Iron and Steel products going out of Punjab carry sales tax from 6 per cent to 8 per cent (incoming & outgoing) depending on central sales tax rate. This is enough to blunt competition of Punjab industry. Central sales tax for major items going out of Punjab should be reduced to 1 per cent. Bicycle, hosiery, iron & steel are already in the 2 per cent category qualifying for 1 per cent. The Planning Commission has drawn a very dismal picture of Punjab’s future economy. Rate of growth of employment generation avenues are projected less than that of work-force. Incidence of taxes should be judged in this context. Budget contains good
proposals as well. Compounded levy on vanaspati is a good
step. Renewal fee of Rs 100 for dealers is also
justified. Hike in sales tax on selected items like
bicycle, hosiery and other items against reduction for
items like photographic equipment, rubber goods and
plastic furniture is perplexing. |
THE Indian fashion industry needs to build on its unique selling points instead of blindly aping the West to make its mark internationally, say fashion experts. “As far as (Indian) fashion is concerned, I don’t think it has any kind of voice in America at all”, says Shirley Lord, Sr Consulting Editor of Vogue magazine. “Last year, the CII organised fashion shows — the one in New York mimicked western fashion very poorly while the other in Washington promoted beautiful workmanship and fabrics,” Lord said, adding that “When any culture tries to copy another without trying to take in its own strengths it loses a lot”. Indian fashion compared to the multi-dollar business industry in the USA is but a cottage industry, according to designer Ravi Bajaj. “It needs funds for inventory, machinery and promotional campaigns,” he says adding that “an advertisement in a British magazine costs as much as £ 40,000”. Asked about the revenue that the fashion industry generates in India, Bajaj said: :There are no figures on Indian fashion. It is so low. It’s embarrassing to reveal. It is minuscule”. Fashion in India ranges between Rs 30 crore and Rs 50 crore, industry sources say. “Till fashion is seen as a business prospect by financial institutions, as a money-making business and investments start coming we will never be an industry,” says Bajaj. “Realistically, it is not as big as it seems. It is much hyped by the media, says designer Rohit Bal. “There can be a market if Indian fabrics are used in ways still unique to India. Loose, over flowing fashions (fabric) can lend to leisure wear. A lot of westerners are overweight and lack of formality may suit western look,” says Lord. — PTI Tickle-me bras THOSE temples to lace and steel, popularly known as lingerie departments, have recently undergone something of an invasion. Where once there were racks of tickle-me frou frou, push-up ‘n’ plunge, and wispy, gauzy nothingness, now stand rack upon rack of rigid, featureless pods in black, white and beige. These new bras boast seamless, nipple-free invisibility and lend the wearer a miraculously hemispheric shape due to a layer of moulded foam. Were one ever to mentally undress Lieutenant Uhura from Star Trek, this is the underwear she would be wearing: smooth, futuristic and unerringly pneumatic. The style, first pioneered by French label Lejaby four years ago, is now its best-selling model, and other manufacturers, including Gossard and Triumph, have been quick to produce bras based on a similar idea. Even La Perla, a label famous for offering the sexiest, most sophisticated scanties around, has got in on the act with the appropriately named “Cult” bra, now one of its top sellers. These moulded, foam bras are most definitely not designed to be seen. Whereas, astonishingly, men managed to overlook the prosthetic trickery of the Wonderbra, sufficiently seduced by its laciness and cavernous depths to shell out for them in their thousands, none but the most ardent “Trekker” would dash out to buy his girlfriend a set of foam breast pods. Underwear like this is concerned not so much with the act of seduction as with producing a homogenised female shape under the clothes. The moulded foam cups of the new bras replicate the effects of a silicone implant, not augmenting necessarily, but producing a uniform round, high shape, which, like its surgical counterparts, does not jiggle. Fashions in breast and bra forms are linked to social and political trends. After wars, there tends to be a return to favour of vast, billowing breasts -think of the empire-line frocks of the early 19th century and the cantilevered magnificence of Jane Russell in the 1950s. — The Guardian Hara-kiri THE traumatic changes in Japan’s corporate culture have claimed another victim when a distraught salaryman committed hara-kiri after protesting about planned redundancies. Masaharu Nonaka, aged 58, a middle-ranking manager in the Bridgestone tyres group, stripped off in the company’s executive suite before stabbing himself in the stomach with a sashimi knife. He died in hospital. According to the police, Nonaka pulled out two knives during a heated argument with the company’s President, Yoichiro Kaizaka. “He started talking quietly, but then he gradually grew more excited and threatened to commit hara-kiri,’’ a police spokesman said. Nonaka was said to have called on the company to slow down its cost-cutting drive. “The restructuring measures are too severe. You must change the system,” he said. A spokesman for the company said Nonaka had been told to “make new plans for his life’’: a common euphemism used to inform older workers of redundancy. In Japan’s worst recession in 50 years, companies have begun to abandon the traditional system of lifetime employment and promotion based in seniority. Middle-aged corporate warriors live in fear of resutora (restructuring). The psychological toll was apparent last week when the Health Ministry revealed that a record 27,102 people killed themselves between January and October last year. Most of them were men in their fifties. —
The Guardian |
Q: Whether Dividend Income from ULIP, US-64, US-5000 and dividend of UTI Master Shares, Master plus shares and Mastergain shares are totally free from Income Tax or upto additional 3000/- u/s 80L in addition to Rs 12000 of Bank and NSC interest. 2. The dividend from joint stock Cos. which are totally free from income tax under which section is to be claimed/taken in the Income Tax return. 3. The IDBI Infrastructure Bond issued on 18.2.98 are exempt u/s 88 upto Rs 10000 in addition to Rs 60000. — R.L. Jain, Faridkot A: The income from ULIP, as also UTI 64 scheme and UTI Master Shares or Master Plus or Mastergain is not totally free from Income Tax. The additional deduction u/s 80L on Rs 3,000 in addition to the exemption of Rs 12,000 is available in respect of income from above mentioned instrument. The dividend income from joint stock companies is completely exempt from Income Tax without any upper limit. The exemption which is available in respect of the dividend income is as per section 10(33) of the Income Tax Act. Infrastructural Bonds are eligible for tax rebate u/s 88 in addition to Rs 60,000 upto a further sum of Rs 10,000. Q: I am a tax payee, my wife is BA, B.Ed and giving tuition to children at home and deposit the income from tuition in joint account having her name first, she has interest income also in financial year 98-99 her total income shall exceed Rs 60,000 so she have to file income tax return for assessment year 1999-2000. What formalities to be done to show the income from giving tuition at home. 2. How and how much amount I can gift to my wife without any tax liability on me. — Jasvinder Singh, Amritsar A: The tuition income of your wife should be shown in her income. No other formalities are to be done. It is better that the tuition income is deposited periodically in the bank. You can make a gift to your wife without any tax liability because from Ist October, 98 there is no gift tax either on the donor or on the recipient. However, it is suggested from tax planning angle that you should not make a gift to your wife because although there is no liability to Gift Tax, yet the income derived by your wife out of the gifted fund will be added with your income. Q: I and my wife both are government employees and both are Income Tax payee. My wife applied for a flat which was allotted in year 1995 under self financial scheme. The possession of which has been taken by her in March, 1998 after paying the required instalments. The flat is in the name of my wife and for purchase of flat, money was taken from the parents and money saved by both of us from our salaries. There is no income from the house property at present. There is no column either in income tax Return Form 2A or 3 for mentioning the total value of property purchased. Since there is no column in the Income Tax Return Form, kindly let me know: I. Is it obligatory under the Income Tax Law to inform the Income Tax Authorities regarding the purchase of flat by my wife or by me if so then what procedure should be followed. II. Can I get any rebate in the Income Tax. — Er R.L. Garg, Ropar A: It is suggested that you should file a copy of the purchase deed with your Income Tax Return. In respect of the interest payable for a loan taken for the house, the same will be eligible for tax deduction for the current financial year 1998-99 relevant to the Assessment Year 1999-2000. The maximum amount which is allowed as a deduction in respect of interest on loan for the self-occupied house is Rs 30,000. Q: I am a member of housing society registered with Chandigarh Housing Board. The society has allotted flats to its members for which nearly a sum of Rs 75,000 per quarter has been paid in the last 8 months from my PF account as instalment towards construction. Please advise whether I am entitled for any rebate in IT u/s 88 or otherwise. 2. I wish to raise a housing loan with HDFC for Rs 2 lakh. The loan will be repaid in 10 years with approx Rs 3500 as monthly instalments. Further, please clarify whether there is any IT concession towards interest on housing loans. If yes, under which section. — Ms Jasleen Kaur, Chandigarh A: To
enable you to claim tax rebate u/s 88 in respect of
making payment for housing instalments the payments
should have been made out of the income of the year.
Hence, it is suggested to you that you should make
payment for payment of housing society instalment out of
your current year’s income. The maximum rebate which
is eligible for this type of payment is 20 per cent on Rs
10,000. In case you raise the housing loan with HDFC you
will be eligible towards interest on such housing loan.
The maximum deduction permissible for interest for
self-occupied housing loan is Rs 30,000 per annum. |
Superannuation Q: When rules of appointment clearly mentions the age of retirement to be 55 years, can Standing Orders be relied upon? Ans: This question was raised before S.C. in Union of India v Bhola Dutt Pandey (1999-I-LL.J. 194). A retired employee from military services was appointed in the service of Indo-Tibetan Border Police in 1979. It was specifically mentioned in the appointment order that his services will be governed by Rules 16 of the Central Reserve Police Force Rules, 1955. Accepting the above terms the respondent joined the Indo-Tibetan Border Police. When he was superannuated at the age of 55 years, as per the rules of his appointment, he however, questioned the same by approaching the H.C. claiming that he should be superannuated only at 58 years under Rule 43 of the Central Reserve Police Force Rules, 1955. The H.C. accepting the case of the respondent that those Standing Orders support his claim, found that the superannuation of the respondent must be fixed at 58 instead of 55 which is the age fixed under Rule 43 of the Central Reserve Police Force Rules, 1955. The appellant is aggrieved by the view taken by the H.C. fixing the superannuation age of the respondent, who was re-employed after retirement from the Army, at 58, over looking the terms and conditions of the order of employment. Hence the appeal before S.C. The S.C. after hearing the parties, took the view that the H.C. was not right in holding that the Standing Orders referred to and relied on by the respondent will apply to the facts of this case. It was noticed by the S.C. that the contract of employment specifically refers to CRPF Rules, 1955, which covers the retirement age as well. In view of that, the S.C.
held that the order of the H.C. cannot be sustained; and
consequently set it aside. The appeal was allowed. |
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| Gold falls NEW DELHI, March 27 (PTI) — Gold prices continued to seek lower levels on the bullion market today and retreated further to close with losses on lack of buying support. The quotations: Silver .999 (ready) 7605, delivery 7635, coins buyer 10,400 and seller 10,500. Standard gold 4285, ornaments 4135 and sovereign 3725. Allahabad Bank |
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