Thursday, October 7, 1999
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B U S I N E S S | Thursday, October 7, 1999 |
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IT officers stripped of
power to Gold scheme for resident Indians
only Show-cause notice to MTNL chief Increase in diesel price may push
up inflation BEFI's plea on bank loans |
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‘Economic recovery may be cut short’ NEW DELHI, Oct 6 (UNI) — The GDP growth is expected to be marginally higher at 5.9 per cent in 1999-2000 as against the 5.7 per cent last fiscal even as industrial recovery is likely to be short-lived following increase in world oil prices, the National Council for Applied Economic Research said today. The increase in global oil prices will adversely impact both the trade deficit and domestic price levels. “The worsening fiscal scenario will not permit the high level of public investment needed to support an industrial recovery,’’ the NCAER said in its latest quarterly update on Indian economy. Industrial growth is expected to be at 5.7 per cent, an improvement over the 4.3 per cent growth witnessed in 1998-99. The increase may be attributed to the good crop last year resulting in higher transactions, freight activity and demand. However, the recovery that seemed to have been bolstered by a good harvest seems to be tapering off. The increase in imports that is expected to accompany industrial recovery is yet to be seen, the report said. The NCAER expressed concern on the grave fiscal deficit and said it is likely to jack up interest rates, constraining the Government’s ability to spend on crucial areas such as infrastructure. Fiscal deficit as per cent of GDP is expected to declining from over 6.9 per cent in 1998-99 to 6.1 per cent in 1999-2000. However, the targetted fiscal deficit target of 4 per cent of GDP is expected to be exceeded and the deficit is forecast to be at 4.2 per cent of GDP. The fiscal deficit is
expected to improve despite expenditure cost overruns of
Kargil (around Rs 2,000 crore) shortfall in tax
collections and ballooning fertiliser subsidy. The 10 per
cent surcharge on direct taxes, expected to fetch Rs 9334
crore, and the higher growth in industry is likely to
save the fiscal situation. |
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NEW DELHI, Oct 6 (PTI)
— Contrary to fears, revenue collections were
buoyant in the first half of this financial year
recording a 13.4 per cent growth with monthly figures for
September showing a substantial 18.3 per cent growth. The
monthly revenue data released here yesterday said total
tax collections from April to September this year was Rs
68,987 crore as against Rs 60,869 crore in the
corresponding period last year. The direct and indirect
tax collections together in September this year was Rs
18,702 crore as against Rs 15,810 crore in the
corresponding month last year. |
IT
officers stripped of power to pick up cases at random CHANDIGARH, Oct 6 — The discretionary powers vested with income tax officers to randomly pick up cases for scrutiny has been done away with. This was stated by Mrs Surinder Paul Kaur, Chief Commissioner, Income Tax, North-Western Region, during an interaction organised by the CII (Northern Region) here yesterday. Under the new procedure before picking up any case for scrutiny the assessing officer not only will have to justify the case but will also be made accountable for the same. For the current assessment year only about 16 thousand cases have been picked up for scrutiny out of 16 lakh assesses. Under the new procedure, the cases for scrutiny have to be finalised by September 30 and disposed of by March 31 the following year, Mrs Kaur said. Regarding the allotment of Permanent Account Number (PAN) to income tax payers, Mrs Surinder Paul Kaur said that out of a total of 18.5 lakh assesses, nearly 12 lakh assesses have already been allotted PAN certificates. She expressed concern over the fact that out of 22,072 companies registered with the Registrar of Companies at Chandigarh, Jalandhar, Jammu and Delhi, only 7,703 companies are on the rolls of the IT Department. As the law has been amended, the Income Tax Department has now started accepting TDS return on a floppy disk and the acknowledgement receipt issued will be treated as an income tax clearance certificate. She accepted that refunds get unduly delayed but felt that probably the answer lies with the computerisation of all functions of the department. As the RBI has permitted the Income Tax Department to make the payment of refund directly to the income tax payer’s bank account, she requested the corporates as well as individual tax payers to avail of this facility. Earlier, Mr R.M. Khanna, Chairman, Taxation Sub-Committee of the CII (Northern Region), called for activating the advisory councils at the field and central levels and changing the language of the Income Tax Act, which is loaded with unnecessary legal jargons. The meeting was attended
by a large number of industry representatives from
Chandigarh, Punjab, Haryana and Himachal Pradesh
belonging to small, medium and large scale companies. |
Gold scheme for resident Indians only MUMBAI, Oct 6 (PTI) — The gold deposit scheme announced in the 1999-2000 Budget will be open for investment by resident Indians only and will have a maturity range from three to seven years with an initial lock-in period to be specified by each bank. Announcing the detailed guidelines for the scheme yesterday, the RBI said banks, allowed to launch the scheme, will be free to fix their own interest rates and will either issue a passbook or a certificate or bond which will be transferable by endorsement and delivery. Banks authorised to deal in gold and having required infrastructure for managing the scheme, expertise/experience in gold business and proper risk management systems may launch the scheme, but will have to take prior approval of the central bank. Gold under the scheme will be accepted in scrap form only and banks will first subject the tendered gold to preliminary assay by a non-destructive method, the RBI said, pointing out that the depositor will have an option to withdraw the tender depending on the results of the preliminary assay. The deposit will be repaid in the form of standard gold bar of 0.995 fineness or in rupees equivalent to the price of the gold as on the date of maturity at the option of the depositor. The scheme was proposed in order to mobilise a portion of the privately held stock of gold in the country and putting it to productive use. For the purpose of operation of the scheme, facilities like exemption from Customs duty for export/import of gold scrap/refined gold, payment of foreign exchange for refining and such other charges, exemption from cash reserve ratio on the liabilities under the scheme and to hedge the price risk arising out of gold price movement through forward contracts, or access international exchanges, have been given. Banks will be exempted from maintaining the cash reserve ratio (CRR) on liabilities under the scheme, but will have to maintain a minimum CRR of 3 per cent on total net demand and time liabilities (including zero CRR liabilities). The RBI said the authorised banks will also have to maintain statutory liquidity ratio (SLR) of 25 per cent on liabilities under the scheme. The operation of the scheme will be open-ended and it will be available on tap until further notice. For assaying, the RBI said, banks may enter into arrangements with existing units, or use the assaying infrastructure being jointly set up by designated banks, including the State Bank of India. Gold mobilised under the scheme can be deployed as gold loans to domestic jewellery industry and jewellery exporters, outright sale domestically and sale to other nominated. Premature
payment/encashment in cash equivalent of the price of
gold as on the date of encashment or in gold would be
allowed after the lock-in period, the RBI said. |
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NEW DELHI, Oct 6 (PTI) — An ongoing rally in gold prices was checked on the bullion market today as business activity dried up because traders remained busy watching poll results. A fresh decision by the Swiss Government to sell 1300 metric tons of gold in the market beginning from next spring was another reason which influenced the market sentiment. Market players said the
fresh demand in precious metals would emerge only after
the beginning of marriage and festival season from
October 10. The quotations: Silver .999 (ready) 8400 and
delivery 8375, coins buyer 11,200 and seller 11,400.
Standard gold 4825, ornaments 4675 and sovereign 3950. |
Show-cause notice to MTNL chief NEW DELHI, Oct 6 (PTI) — Telecom Regulatory Authority of India (TRAI) today issued a show-cause notice to Mahanagar Telephone Nigam (MTNL) for launching a cellular service in “blatant disregard” for its directions. Holding MTNL Chairman and Managing Director S Rajagopalan responsible for launching the service without getting the tariff approved by the authority, TRAI asked him to show cause on or before October 20 and explain why penal action should not be taken against him under the TRAI Act. The notice said MTNL had proceeded to implement tariff for the cellular services in “blatant disregard” for the provisions of the Telecommunications Tariff Order, 1999, and violating specific direction from TRAI not to go ahead with the proposed tariff. When contacted TRAI Chairman S. S. Sodhi said the notice was issued as MTNL had flouted the law. “TRAI had asked MTNL not to go ahead with the proposed tariff as we wanted to look into its details,” he added. Rajagopalan, when
contacted, confirmed the receipt of the notice and said
he would reply to the regulator by the required date, but
refused to elaborate. |
Increase in diesel price may push
up inflation NEW DELHI, Oct 6 — The steep increase in the diesel price may push up the inflation rate. The Institute of Economic Growth (IEG) expects inflation to reach 2.78 per cent in October and 3.28 per cent in November. Over the past few months the price of diesel had increased from $ 97.38 to $ 162.10 per tonne leading the Indian oil pool account to cross Rs 5,000 crore. The last oil price revision was done in April 1999 from Rs 6.62 to Rs 6.88 per litre. Though diesel prices are supposed to be revised in line with international prices on a month-to-month basis, no revision had been carried out since April, apparently due to electoral considerations. The government is to gain Rs 6,600 crore due to yesterday’s price hike. The Executive Director of the Oil Coordination Committee, Mr M.S. Ramachandran, said that the oil pool deficit was Rs 5,200 crore and the government currently has oil bonds worth Rs 385 crore outstanding as against the original amount of Rs 12,984 crore. The Government has said that another price hike was not ruled out later next month if international prices continued to rise throughout October. The CPM called the price
hike a “parting kick by a caretaker Government which
will be demitting office in a few days. Such a hike will
impose an intolerable burden on the people and the
economy”. |
BEFI's
plea on bank loans BATHINDA, Oct 6 — The Bank Employees Federation of India (BEFI) while expressing its displeasure over the recommendations of the Verma Committee on weak banks urged the Central Government to make wilful default of bank loans as a criminal offence. In a press note issued here yesterday, Mr M.M. Behl, Senior Vice President, BEFI, Punjab, said that the Verma Committee had suggested that voluntary retirement of 25 per cent staff of weak banks and freezing of wages. He added that these recommendations were not suitable. He pointed out that weak financial position of the banks was due to increase in bad debt and NPA which was the creation of bank management and politicians. It was estimated that about Rs 50,000 crore had been put in the NPA box by various banks. He said that Central
Government should take legal action against those corrupt
bank officials who advanced loans in wrong way. |
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