Former Indian cricket team captain, Mohammed Azharuddin inaugurates a Zipfone franchise in Bhopal on Saturday. Also seen in the picture is his cinestar-wife, Sangeeta Bijlani, now Ayesha — PTI

Union Finance Minister Yashwant Sinha and FICCI president Sudhir Jalan at the presidential summit of the Chambers of Commerce and Associations in New Delhi on Saturday — PTI

PSB draws flak from small units
LUDHIANA, Oct 23 — Mr H. S. Duggal, General Manager (Law and Recovery), Punjab and Sind Bank, will visit Ludhiana on Monday amidst amounting criticism of the bank from the small scale units of the region for its alleged failure to adhere to the guidelines issued by RBI with regard to the settlement of loan dues from them.

SBI meets industrialists CHANDIGARH, Oct 23 — State Bank of India, today organised an industrialists’ meet at Chandigarh with Dera Bassi industrialists where the bank is planning to open its branch. The meet was presided over by Mr Bhattacharya, General Manager (Commercial Banking) Chandigarh Circle.

Unichem Lab net rises by 23 per cent
Unichem Laboratories has reported a 23 per cent rise in the net profit during the second quarter ending September 30, at Rs 4.88 crore as against Rs 3.96 crore during the corresponding period last year.

Talks on technical level with USA soon
WASHINGTON, Oct 23 — India will press for full implementation of existing WTO agreements before taking up new round of multilateral trade negotiations and hold technical level talks with the USA next month for working out modalities for this purpose, National Security Adviser Brajesh Mishra has said.

Environment meet
CHANDIGARH, Oct 23 —The National Productivity Council of India will organise a seminar-cum-interaction meet on environment management and life cycle assessment on October 29, here.

Ramifications of cyberland
Regulators and retailers have a lot of work to do on e-business codes before the Internet can provide a safe cyber shopping heaven.

Industry reels under truckers’ strike
TRUCKERS’ strike has paralysed the movement of goods. Industry which is already reeling under recession has been badly hit.

Major expansion by Shree Rama
NEW DELHI, Oct 23 — Shree Rama Multi-Tech, which has grown to become one of the world’s largest manufacturer of laminated tubes, has embarked on major expansion plans and is investing Rs 306 crore to expand capacity of its existing plant at Moti Bhoyan near Ahmedabad and creating additional capacities at Ambaliyara near Ahmedabad and Pondicherry.

FM hints at dismantling FIPB
Tribune News Service

NEW DELHI, Oct 23 — Union Finance Minister, Mr Yashwant Sinha today hinted at dismantling of the Foreign Investment Promotion Board (FIPB) to reduce procedural bottlenecks while stating that the government would launch an aggressive tax reforms programme to reign in the fiscal deficit.

“The best way to encourage FDI was to do away with the approval route which was time consuming, the Finance Minister said while delivering the inaugural address at the Presidential summit of FICCI here.

“Whatever we might do we will get overtaken by procedural bottlenecks”, Mr Sinha said adding that finally a mechanism for automatic route has to be put in place.

Without going into the specifics of the actual mechanism, he said that the foreign investors may be required to file an application with RBI just for “statistical purpose”.

Admitting that the FDI to India has been sluggish in recent times, the Finance Minister said that a mechanism will be put in place where there would be no need for the foreign investors to go to any Government department for seeking approvals.

Mr Sinha said that the Foreign Investment Implementation Authority (FIIA) has been created to minimise delays at the implementation level and act as a coordinating agency for government departments.

Expressing concern about the rising fiscal deficit, Mr Sinha said that he would soon call a meeting of Chief Ministers and State Finance Ministers to find ways to cut the combined (States and Centre) fiscal deficit and move towards a single value added tax (VAT).

“The meeting will be called possibly before the next session of the Parliament to discuss the issue threadbare.It is very important to involve the state governments to carry out the tax reforms as quickly as possible”, he said.

Instead of resorting to a rigid artificial cap on expenditure, the Centre would discuss the entire spectrum of government spending with the states based on zero based budgeting.

“An artificial cap on Government borrowing could imply a cut in plan and social sector expenditure”, he said adding that the idea of a Fiscal Responsibility Act was mooted keeping the larger fiscal picture in mind.

The objective of disinvestment would be met only if the proceeds were used for creating new assets and “not for filling government coffers or meeting current consumption”.

In the past, since the amounts of disinvestment proceeds were small,the treatment was “casual”. “A higher collection would mean more accountability”, Mr Sinha said adding that the approach should be connected with “holistic PSU reform plan and that is very much in our mind”.

On the industry’s demand for a reduction in the rate of interest, Mr Sinha said that unless the Government provides the right kind of environment, RBI would not be able to take decisions in this regard.

The Finance Minister said that there were difficulties in achieving the lower interest rate regime as long as the government continues to borrow at high rates from the market.

Punjab State Tubewell Corpn faces closure
By Peeyush Agnihotri
Tribune News Service

CHANDIGARH, Oct 23 — Divali season couldn’t have been darker than this for the Punjab State Tubewell Corporation (PSTC) employees — they have not been paid their salaries and dues for the past three months and the State Government is contemplating the closure of this habitual loss-making public sector undertaking (PSU).

Though on the face of it the corporation has been suffering perpetual losses, yet a closer look reveals that it has been made the whipping boy by the State Government.

The Punjab Government is facing a financial crunch. In order to make payments and obtain reimbursement from the World Bank, it ordered the PSTC to get short-term bridge loan from commercial banks. The corporation complied and obtained a loan of Rs 60 crore from the Allahabad Bank and the Punjab & Sind Bank between April to June 1998. As per the terms and conditions, the rate of interest charged by the banks was 1 per cent above the prime lending rates plus interest tax at the rate of 2 per cent. Further, the loan was granted against a World Bank project only and was to be repaid immediately on obtaining reimbursement from the World Bank.

Once the loan was sanctioned, the State Government was quick to amble in and extract its pound of flesh, rather a quintal. The Government took away more than Rs 45 crore of the sanctioned amount for various other irrigation projects and the PSTC had to be content with less than Rs 15 crore. As per the corporation’s audit report: “it was further noticed that though reimbursement had been received from the World Bank by the State Government but the same was not made available to the corporation for repayment of loans to the banks.”

The policy of free water and power too took its toll. Earlier, the corporation used to charge a mere 42 paise per unit of electricity consumed from the farmers though it paid Rs 4 per unit consumed to the electricity board. The losses were subsidised by the State Government. Thanks to the populist policy of providing free power, this recovery too was waived off.

In accordance with a policy decision taken in July 1982, the gap between the expenditure incurred on the operation and maintenance of tubewells and income from the sale of water was being provided in the shape of subsidy to the corporation by the government. The State released subsidy aggregating Rs 83.80 crore during the last five years up to 1997-98. The corporation, however, had not been raising formal claims on Government for the release of subsidy.

The Comptroller and Auditor General’s report while severely indicting the PSTC on various other issues observes in Section 2B.4.2. that a “subsidy amounting to Rs 20.01 crore was recoverable from the State Government.”

Sources say that during the current financial year the Central Government released Rs 8 crore to the State Government, which was to add a similar amount and release Rs 16 crore to the PSTC for carrying out works under the Command Area Development Programme, a centrally sponsored scheme. The Corporation has still not got this money from the State Government.

It is alleged that the corporation has been severely mismanaged and corruption has been rampant. “Why guillotine 3,000 employees for the sake of a few black sheep,” asked an employee.

On the other hand, the corporation has had a positive, though intangible, impact on the economics of rural Punjab. It has contributed towards bumper harvests, by augmenting irrigation facilities. Tubewells have transformed the sub-mountainous kandi area.

Interestingly, the PSTC came into being in 1970 when Mr Parkash Singh Badal was the Chief Minister. Today moves are afoot to wind it up under his rule. What could be more ironic!

PSB draws flak from small units
From A.S.Prashar
Tribune News Service

LUDHIANA, Oct 23 — Mr H. S. Duggal, General Manager (Law and Recovery), Punjab and Sind Bank, will visit Ludhiana on Monday amidst amounting criticism of the bank from the small scale units of the region for its alleged failure to adhere to the guidelines issued by RBI with regard to the settlement of loan dues from them.

The guidelines have been issued by the RBI nearly six months ago and are designed to help banks enter into compromise settlements of non-performing advances. The guidelines apply to all non-performing accounts which are chronic and at least three years old as on March 31, 1999, and will be operative only up to September 30, 2000. It apply to all borrowers in the small scale industries sector where the accounts have become non-performing. Cases pending before the Debt Recovery Tribunals are also covered.

The guidelines also provide for the constitution of settlement advisory committees (SAC). Small scale unit owners facing proceedings at the Debt Recovery Tribunal say that the guidelines issued by the RBI after a long struggle had come a breath of fresh air for them. But certain nationalised banks appear to be bent upon defeating the very purpose of the guidelines.

As far as Punjab and Sind Bank is concerned, it does not appear inclined to take even the preliminary step of forming settlement advisory committees so far. Small scale unit owners here complain for months together, the bank officials here denied the existence of any RBI guidelines for compromise settlements of non-performing advances. When these were provided to the officials, they insisted on seeking “clarifications” from the headquarters. When these came, they found other excuses to delay launching proceedings for the settlement of advances in accordance with the RBI guidelines.

One small scale unit owner complained in a talk with TNS here today that he had visited the local PSB branch nearly a dozen times only to be sent from one desk to the other. Finally, he was referred to Delhi to the bank headquarters only to be referred back to Ludhiana which has once again started the game of sending him from one desk to the other.

Several other small scale unit owners also narrated similar experiences. As one owner put it, the bank officials at the local level do not seem to have mentally reconciled themselves to RBI guidelines and seem to be dragging their feet on implementing them for extraneous reasons. A complaint from the small scale unit owners to the PSB HQ at New Delhi has forced the authorities send Mr Duggal here to look into the matter on Monday.

Unichem Lab net rises by 23 per cent

Unichem Laboratories has reported a 23 per cent rise in the net profit during the second quarter ending September 30, at Rs 4.88 crore as against Rs 3.96 crore during the corresponding period last year.

Sales were also up during this period by 13.8 per cent at Rs 56.38 crore (Rs 49.55 crore), according to unaudited results announced after the board meeting here today.

Kajaria Ceramics: Kajaria Ceramics Limited reported a 25 per cent increase in net profits at Rs 4.75 crore for the second quarter ending September 30, 1999 against Rs 3.79 crore during the same period last year.

The sales of the second largest manufacturer of ceramic tiles grew by 44 per cent at Rs 63.45 crore against Rs 44.11 crore for the quarter under review.

BSL: BSL Ltd, the makers of BSL Suitings have reported a slight increase in its net profit to Rs 2.17 crore during the first half of the current fiscal from Rs 2.12 crore in the corresponding period last year.

The company’s export turnover rose by 8.5 per cent during the period to Rs 22.45 crore from Rs 20.68 crore in the first half of last fiscal.

Hindalco: Hindalco Industries Ltd has posted a 10 per cent growth in net profits at Rs 299 crore on a 15 per cent higher turnover of Rs 994 crore during the first six months of the current fiscal.

The operating profit of the Aditya Birla group’s flagship company during the half year ended September 30, 1999 increased by 16 per cent to Rs 451 crore.

Essar Shipping: Essar Shipping has registered a fall of about 70 per cent in net profit during the first half of current financial year from Rs 36.12 crore during April-September 1998 to 10.64 crore during same period this year.

The company registered operating profit of Rs 102.26 crore for the April-September 1999.

Commenting on the financial performance, Essar Shipping Managing Director B.S. Kumar said that depression in the market has drastically reduced operating margins for ship owners.

Indian Rayon: The Indian Rayon today reported a 4.6 per cent increase in its net profit at Rs 10.21 crore on a marginally higher turnover of Rs 280.04 crore for the second quarter ended September 30, 1999 compared to the previous quarter ended June 30, 1999.

Alps Industries: Alps Industries Ltd has registered a 61 per cent increase in net profit touching Rs 3.39 crore in the first half of the current fiscal. The company had recorded a net profit of Rs 2.10 crore during April to September in 1998-99. — Agencies

SBI meets industrialists
Tribune News Service

CHANDIGARH, Oct 23 — State Bank of India, today organised an industrialists’ meet at Chandigarh with Dera Bassi industrialists where the bank is planning to open its branch. The meet was presided over by Mr Bhattacharya, General Manager (Commercial Banking) Chandigarh Circle.

Mr Bhattacharya said the bank’s Chandigarh Circle has already crossed level of Rs 1000 crore in SSI advances and expected to cross Rs 1300 crore by March 2000. Mr Kewal Garg, President, Dera Bassi Industries Association expressed his desire that bank should open its Branch at Dera Bassi as early as possible to cater to the needs of nearly 300 industries established in and around the centre.

Talks on technical level with USA soon

WASHINGTON, Oct 23 (PTI) — India will press for full implementation of existing WTO agreements before taking up new round of multilateral trade negotiations and hold technical level talks with the USA next month for working out modalities for this purpose, National Security Adviser Brajesh Mishra has said.

Mishra, also adviser on trade talks, told reporters yesterday that “we will have talks at the technical level with (Deputy Trade Representative) Susan Esserman, early next month to see what can be done about the unfinished business of the Uruguay round and for better implementation on issues of concern to India such as textiles, and any limited progress the USA wants which is acceptable to India and other developing countries.

“What we are trying to do is to see whether there can be concordance of views between us. Of course there are a lot of developing countries with whom we are working,” Mishra, who is also the Principal Secretary to Prime Minister A.B. Vajpayee said after talks with US Commerce Secretary William Daley and trade representative Charlene Barshefsky.

Environment meet
Tribune News Service

CHANDIGARH, Oct 23 —The National Productivity Council of India will organise a seminar-cum-interaction meet on environment management and life cycle assessment on October 29, here. The seminar will be organised in collaboration with Life Cycle Assessment Society of India (ILCAS), Institute of Indian Foundarymen (IIF), Chandigarh Chapter and Chandigarh Pollution Control Committee and will be led by Mr Amrik Mohan Singh, Director, NPC.

According to Mr Singh, a delegation of experts on environment management and life cycle assessment from Japan will visit city from October 28 to 30 and will be participating in the deliberations. Mr Yasunari Matsuno of National Institute of Resources and Environment will lead the delegation.

Ramifications of cyberland
By S.K. Aggarwal

Regulators and retailers have a lot of work to do on e-business codes before the Internet can provide a safe cyber shopping heaven. Some of the recommendations of Consumers International (CI) having member groups from over 90 countries including India, Global Information Infrastructure Commission (GIIC) and U.S. Government agencies include amendments in various archaic provisions in the Direct Sale Laws for governing e-business by enacting formal legislation to prevent cyber attacks and ensure the following to the internet users whose number is expected to treble to 500 million by 2003.

— Details of the retailers identity and physical location of the virtual malls or cyber shops.

— Awareness of the full name of the company since this may not always be the same as their web-address in order to guard against the recent spate of domain name squatting.

— Web-sites must represent clearly the countries they deliver to before the order process is embarked upon.

— Price information be transparent if web-sites are marketing globally and have a facility to incorporate the delivery charges in the total price besides the currency conversion.

— The cyber retailer’s site must ensure that purchaser is shown the terms and conditions before confirming his order.

— Law governing the e-deals should preferably be the law of the consumer’s home country for the sake of familiarity.

— Security of transaction is a must for those jumping on e-business bandwagon, besides consumer protection.

— There should be ‘truth in advertising’, ‘transparency in marketing’, ‘privacy and copyright policies’. In the e-market place consumer lacks the face-to-face interaction, cannot hold or test a product prior to buying and instead have to rely solely on the on-line information. So the accuracy of information is a must to generate trust.

With the Internet becoming a huge shopping arcade, the e-frauds cannot be far behind and e-government and e-business are increasingly at threat of severe disruption. Moreover, security short comings can jeopardise national tax collection, tele-communication and financial services. Vulnerability to organised cyber attacks highlight governments susceptibility. Cyber protection plans should therefore, be developed by prioritising the risks for focussed, efficient and effective e-supported critical infrastructure.

India on its part has already drafted the IT Bill to formalise the frame work for ‘India’s Cyber Laws’ by the mid-2000, which will provide statutory security to the e-transactions, e-documents and measures aimed at giving the e-business the much needed reliability and impetus. In a massive revamping exercise, the Government of India is considering the possibility of making the Infotech Ministry also for all e-related sectors.

Industry reels under truckers’ strike
By P.D. Sharma

TRUCKERS’ strike has paralysed the movement of goods. Industry which is already reeling under recession has been badly hit. Border States like Punjab, Jammu and Kashmir in particular get severe beating. With non-movement of goods industry shall face problem in dealing with banks and the effect would travel to the entire chain of business.

It is not understood by anybody except the strikers as to what is the reason for this agitation. They have already raised the freights beyond the reasonable limit arising out of hike in the prices of diesel. Government of India brought diesel and other four products out of the administrative price control (APC) in November 1997. In between prices of crude saw downward trend and prices of diesel were decreased but not proportionately. Freight rates were not decreased commensurately.

Sometimes freight rates were jacked up with decrease in diesel price. On an average freight should increase at the rate of 60 per cent of the hike in diesel price but this time the rates have been increased in some cases by 100 per cent against the diesel price hike of 40 per cent. This impact of 40 per cent hike in diesel price is due to the election process which went too long. No popular government in saddle could take the risk of price rise when elections are impending. So this hike which was to come in stages has come in one stroke. The only grudge against the Central government is that it did not decrease the rates proportional to the decrease in the international price. Secondly Punjab Government has done injustice by increasing the rates of sales tax.

The worst hit section of industry is that which uses fuel oils like furnace oil etc. Rates of Furnace Oil and naptha has seen 100 per cent rise in just about 8 to 9 months. This out of proportion rise is again due to softening attitude towards diesel prices.

The tussle between the Government and the truckers will have crushing effect on the industry. Some immediate way has to be found to defuse the issue. This requires some roll back in the prices and some reduction in the custom duty. The loss may be compensated by hike-in the prices of LPG and kerosene which are highly subsidised.

Major expansion by Shree Rama
Tribune News Service

NEW DELHI, Oct 23 — Shree Rama Multi-Tech, which has grown to become one of the world’s largest manufacturer of laminated tubes, has embarked on major expansion plans and is investing Rs 306 crore to expand capacity of its existing plant at Moti Bhoyan near Ahmedabad and creating additional capacities at Ambaliyara near Ahmedabad and Pondicherry.

The expansion project is well under way and the company has already invested nearly Rs 60 crore till September 30, 1999.

This project will increase the effective installed capacity of laminated tubes from 353 million to 640 million numbers per annum. In addition, there will be substantial increase in the co-extrusion coating capacity, multi-layer film capacity and the company will also diversify its product range to include paper cups, cartons and multi-layer bags.

Shree Rama is engaged in the manufacture of multi-layer laminated tubes, labels and stickers, speciality packaging and plastic products and offers state-of-the-art packaging solutions to the FMCG industry.

The company has a reputed customer base which includes Hindustan Lever, Nirma, Dabur, Reckitt & Coleman, Emami among others.

To meet a part of the finance required for its expansion plans, Shree Rama proposes to enter the capital market with a public issue of equity shares of face value Rs 5 each at a premium.

For the year ended September, 1999, Shree Rama registered a total income of Rs 149.99 crore and profit after tax of Rs 34.40 crore. The company’s reserves (excluding revaluation reserves) stood at Rs 204.92 crore on an equity capital base of Rs 22.47 crore.

Shree Rama has an excellent track record of consistent growth and profitability. The revenues and net profit has grown at CAGR of 51 per cent and 46 per cent respectively for the period 1997 to 1999.

Return not so alluring

ISSUE: ICICI Safety bonds
Opens/Closes: 15-10-99 / 2-11-99
Size: Rs 600 crore

Analysis on offer in this issue are four types of bonds, namely, the Encash Bond, Tax Saving Bond, Refular Income Bond and Money Multiplier Bond.

The Encash Bonds have a tenure of three years, but offer investors the facility of withdrawing the money any time after one year from certain specified branches of ICICI Bank. The coupon rate on offer here is 10.50 per cent in the first year which will increase to 12.50 per cent in the second year and 13.50 per cent in the third year. The yield to maturity (YTM) on these bonds thus works out to 10.5 per cent, 11.40 per cent 12.10 per cent for the first, second and third years, respectively.

The tax saving bonds offer investors five sub-options of which two offer tax breaks under Section 88 of the Income-Tax Act, while three offer tax breaks under Section 54EA. Perhaps, if ICICI had waited a couple of months more before foraying into the market with this issue, this bond could well have been its USP.

The Regular Income Bonds on offer here have a three year tenure and there sub-options. Under the first sub-option, the coupon rate on offer is 11.50 per cent and interest is payable monthly, thus providing a YTM of 12.10 per cent. Under the second sub-option, the coupon rate on offer is 11.75 per cent and interest is payable every six months thus providing a YTM of 12.10 per cent. Under the third option the minimum sum investible is Rs 50,000 and the coupon rate on offer is 12.25 per cent and interest thereon is payable annually.

The Money Multiplier Bonds here are in the nature of deep discount bonds and there are two sub-options on offer here. Under the first sub-option, an investment of Rs 5,000 becomes Rs 7,075 after a period of three years thus providing a YTM of 12.30 per cent. Under the second sub-option, an investment of Rs 6,000 becomes Rs 50,000 in 18 years and 11 months thus providing a YTM of 11.9 per cent.

Conclusion: There is no overwhelming reason to consider investment in this issue as the rates of return on offer are hardly exceptional.

Noida Toll Bride

Issue Opens/Closes: 20-10-99/ 27-10-99
Size: Rs 70.78 crore

Analysis: Infrastructure Leasing and Financial Service (IL&FS) has promoted Nodia toll Bridge Company Limited (NTBCL) with the objective of acting as a Special Purpose Vehicle to develop, design, construct, operate and maintain a road bridge between Delhi and Noida. The project is being implemented under the Build-Own-Operate-Transfer (BOOT) basis. The total project cost of building this bridge has been estimated at Rs 408 crore and is proposed to be funded through equity participation of Rs 122.40 crore and a debt component of Rs 285.60 crore. In this case, the potential investor enjoys the comfort of knowing that NTBCL’s terms of agreement with IL7FS indicates that the designated return of 20 per cent is assured over the concession period of 30 years or until the designated return of 20 per cent on the total project cost is achieved, whichever is earlier. Thereafter, the infrastrcture facility will be transferred back to Noida.

CONCLUSION: Discerning long term investors could consider an exposure to this issue especially given the fact that the rate of return on offer is fairly attractive.

by Praful R. Desai
Percentage of loss

Q: What is the effect when evidence not categorically indicating percentage of loss of earning capacity?

Ans: In divisional Manager, United India Insurance Co. Ltd. v Sk. Salim Khan (1999-II-LLJ-379) the Orissa HC expressed the view thus:

The finding of the commissioner to the effect that the claimant was a workman and had sustained injury in an accident arising out of and in the course of employment is based on evidence on record. This has not been challenged.

The evidence regarding the loss of earning capacity also does not categorically indicate the percentage of loss of earning capacity and the finding appears to be faulty.

Keeping in view the scanty material on record to determine the percentage of loss of earning capacity, the HC said, it would have been necessary to remit the matter to the Workmen’s Compensation Commissioner for fresh determination on this aspect. However, the learned counsel for claimant-respondent No 1 submits that in case the matter is remitted to the Commissioner at this stage, it is likely to linger for some time, and the claimant-respondent No 1 is likely to be harassed.

It is further stated that instead of remanding the matter to the Commissioner, it may be finally disposed of at this stage in the spirit of Lok Adalat and, if necessary, some amount may be reduced. The nature of injuries as available on record, the HC held that award of Rs 22,500 (instead of Rs 31,769 determined by the Commissioner) as compensation shall meet the ends of justice. It was therefore directed that claimant shall be entitled to a sum of Rs 22,500 along with the proportionate accrued interest and the balance amount deposited at the time of appeal shall be refunded to the Insurance Company.

Subject to the aforesaid modification, the appeal was disposed of.

by R.N. Lakhotia

Q: I am 58 years old. Kindly let me know my tax liability and should I fill the Income-tax return or not?

Agriculture Income: Rs.15000 per annum
Rental Income: Rs. 27000
Interest from Bank: Rs. 38000
Dividend on Comp.
Shares: Rs. 4000
Total : 84600

— Hardial Singh, Malerkotla

Ans: On the facts stated by you, you are not required to file your Income Tax return in respect of the Financial Year 1998-99 relevant to the Assessment Year 1999-2000. This is because out of your incomes, the agricultural incomes completely exempt from income-tax. It is to be included only for special rate purposes on non-agricultural income. Out of your rental income upto ¼th thereof will be deducted on account of repairs. In respect of your income from bank interest Rs 12,000 will be exempted U/S 80L. The dividend income in any case is completely exempt from income-tax. Thus, there is no liability of income tax on your income. You are, therefore, not required to file your income-tax return. Moreover, you are staying in a place which is outside the purview of compulsory filing of the Income Tax return due to economic indicators. Hence, return filing for you is optional and not compulsory.

Q: I am a tax paying government employee. I intend to go abroad in mid of the year for some purpose, availing without pay leave for two years. I will file my ‘Income Tax Return’ for the year ending March ‘99 before leaving. By the time I leave I would have drawn the salaries for few months which won’t fall under I Tax slab. I want to know, that can I file the I. Tax return for the year ending March 2000 at the time of leaving. Secondly do I need to inform the I. Tax department about my leave.

— R. Singh, Ludhiana

Ans: The Income-tax return in respect of the year ending on 31st March, 2000 can be filed by you only on April 1, 2000 & after. While you are proceeding to leave for abroad for 2 years, you have not to inform Income Tax department about your leave.

Q: Will you please so kind enough whether I should pay the income tax or not on the following earnings:

I am pension holder from Central Government (Rly.) aged 79 years getting pension yearly 60000/-.

Getting 13000 yearly interest on Joint FDR (myself & wife).

Yearly giving donations about 5000 to Spiritual Society exempted from I/Tax.

How much amount is exempted from yearly Pension amount.

— R.K. Kapur, Panchkula.

Ans: On the facts stated by you, you are not required to pay any Income-tax on the income mentioned by you out of your pension income. You will be eligible for standard deduction on Pension amount while from your interest income you will also get a deduction U/S 80L. Similarly, for donation to the society which if possessing section 80G certificate, then you will be eligible for tax deduction even for donation paid by you. Moreover, the most important point is that as you are a senior citizen, there is no liability of income-tax on you because as per section 88B there is a tax rebate of Rs. 10,000 for a senior citizen. Thus, you are not required to pay any income-tax on the income mentioned by you.

Q: I have retired form government service on 31.3.1999 and have more than 50 per cent physical disability due to Hemiplegia right side. After retirement I will receive the approximate payments on account of the following pensionary benefits:-

Commutation of pension: Rs. 2,55,000
Gratuity: Rs. 2,07,000
Leave encashment: Rs. 1,10,000
Final payment of GPF: Rs. 1,10,000

Kindly advise whether the above payments are completely exempt from income tax or not? Kindly also disclose the relevant I.T. section.

— M.R. Sharma, Panchkula

Ans: On the facts mentioned by you, commutation of pension, gratuity, leave encashment at the time of retirement and the final payment of GPF are fully exempt from Income Tax. These items are exempted U/S 10 of the Income Tax Act, 1961.

by Pushpa Girimaji
Deceptive ads on the rise

DURING the festival season last year, a friend bought a formal jacket for Rs 2,200 at a reputed shop in New Delhi. The shop was offering discount of 20 per cent. When she was keeping the jacket in the wardrobe, she found the receipt for a similar jacket that she had bought from the same shop a few days before the announcement of the festival discount. The price of that jacket was 2,200! There was absolutely no difference in either the quality of the coat or the lining material or even the design. The only difference was in the colour. Obviously, the shopkeeper had increased the price of the merchandise by 20 per cent before announcing a festival discount!

Come festival season and the newspapers are full of discount offers. While some are genuine, most are not and consumers need to be extra careful while buying. Earlier, these discount offers were restricted to clothing, but these days most of them pertain to household consumer goods, mostly electrical and electronic items. Many of the advertisements, for example, offer products on instalments at “zero per cent interest”. Take a trip to the retailer and you will realise how the advertisement fooled you with half truths. The retailer will tell you that the zero per cent interest is applicable only if you pay the entire amount in 12 months. However, you will soon discover that even this is not true because at the time of purchase, he will ask you to pay “four installments”. Thus zero per cent interest is applicable only if you pay 25 per cent of the cost of the product at the time of purchase and the rest in eight instalments. But even here, there could well be some hidden costs. The retailer is quite likely to add in the final bill, “loan processing charges” or even “instalation charges.”

That’s not all. Most advertisements give you an impression that the instalment scheme is readily available and that you can just take home the goods. But the truth often is that the retailer collects 25 per cent of the cost and then asks you to submit papers for processing of your loan for the balance amount and till that is done, the product will not be delivered to you.

In fact these days, many advertisements announcing “irresistible” bargain offers have been found to be deceptive. A manufacturer offers a 14-inch colour television set for only Rs 4,000. Check with the dealer and you realise that you have to pay Rs 7000. Many of the exchange offers (give back an old product and get a discount on the new) and gift offers are also equally misleading. Most often, when you opt for an exchange scheme, what you get for your old television set or a refrigerator is half of what is actually promised in the advertisement. There have also been complaints of dealers taking back an old television set or a refrigerator, promising to deliver the new set within a day. Consumers have had to wait for over a month.

Consumers have also had bad experiences with manufacturers who offer products at a discount if you are prepared to pay the entire amount and wait for two or three months for delivery. At the end of the waiting period, consumers have discovered that the manufacturer has no intention of keeping to his side of the bargain. Nor is he prepared to compenstate the consumer for the delay or refund the amount collected, with interest.

Only recently, a consumer, who had paid advanced deposits towards ‘booking’ of a television set, an audio system and a walkman, had to seek the help of the consumer court to get back the money. At the time of booking, the consumer was promised an audio system with 20 pre-recorded cassettes as free gift with the television set, 20 pre- recorded audio cassettes with the audio system and eight pre-recorded music cassettes with walkman. However, neither the goods booked nor the free gifts were delivered within the promised time. When several visits to the dealer and letters to the manufacturer did not help, the consumer was forced to seek redress before the consumer court. Similarly, there have also been cases where the promised “free gift” was never delivered despite several reminders to the dealer and the manufacturer, or where the gift turned out to be of far inferior quality than what was promised.

Unfortunately, despite a comprehensive definition of unfair trade practice under the Monopolies and Restrictive Trade Practices Act and the powers given to the MRTP commission to stop malpractices such as these and protect consumer interest, advertisements aimed at deceiving consumers are on the rise. This is an issue that needs serious consideration of the Central Consumer Protection Council, which is a policy making body constituted under the Consumer Protection Act.