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| Monday, August 7, 2000, Chandigarh, India   
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North India lags behind in FDI inflows
RBI package to raise interest rates: CII NEW DELHI, Aug 6 — The monetary measures announced by the RBI for controlling the volatility of the rupee will affect the competitiveness of the Indian industry. The recent RBI hike in the bank rate, cash reserve ratio and reduction in all refinance limits for banks will raise interest rates and working capital costs adversely affecting the competitiveness of the Indian industry, CII said in a statement here. He quit or did
Sahara show him the door? |
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North India lags behind in FDI inflows NEW DELHI, Aug 6 —North India continues to lag behind in terms of FDIs with the four southern states of Tamil Nadu, Kerala, Karnataka and Andhra Pradesh grabbing the majority share of FDI in the country. The northern region of the country (excluding Delhi) constitutes only 3.72 per cent of the total FDI inflows into the country since 1991, compared to 18.79 per cent accounted for by the four southern states, PHDCCI President K.S.Mehta has pointed said. In fact, the share of the northern region is less than that of the eastern region, which accounts for 7.89 per cent of the total FDI inflows into the country, he said quoting a chamber study. Mr Mehta cautioned that if remedial measures were not put in place early, the disparity would continue to increase, thereby making it difficult to achieve balanced growth in the economy. Delhi has absorbed the largest share of FDI (14.44 per cent) followed by Maharashtra (13.58 per cent), Karnataka (7.55 per cent), Tamil Nadu (6.71 per cent) Gujarat (5.27 per cent), Madhya Pradesh (4.53 per cent) and Andhra Pradesh (4.14) per cent. The share of Delhi is artificially high due to the fact that most of the FDI approved is through the Delhi offices of many companies, Mr Mehta pointed out. Significantly, Maharashtra and Gujarat alone constitutes 18.87 per cent, which is higher than the combined share of the four southern states (18.79 per cent), he observed. In the northern region, excluding Delhi, Haryana has the highest share with 1.40 per cent with Chandigarh being the lowest with 0.07 per cent. Madhya Pradesh, on the other hand accounts for a significant 4.53 per cent. In the eastern region only West Bengal (3.67 per cent), and Orissa (3.81 per cent FDI have attracted any notable fdi with the combined share of all the other states being less than 1 per cent. The landlocked nature of the northern region presents some structural bottlenecks, which have to be addressed in a broader perspective if the “North-South” divide is to be arrested. In particular, infrastructure projects, which create a synergy between agriculture, industrial and urban development need to be undertaken in a focussed manner. The approach adopted by the Central Government and the various state governments with regard to infrastructure projects is extremely fragmented. Most of the urban industrial development is concentrated along the Amritsar-Delhi-Kanpur-Howrah and Delhi-Bombay corridors. The result is heavy migration to a few cities along these corridors in an unplanned manner creating slums in the process. Creation of more development corridors in the northern India is very important. For example a development corridor along Srinagar-Ambala-Kathgodam-(Tarai belt of UP)-North Bihar would bring the hinterland into the mainstream of modern industrial development. Another corridor could be via the
Amritsar Bathinda-Bikaner-Rajkot-Porbander axis. With such a corridor in place, the northern part of India would have an alternative to the trade routes. A regular link established Punjab and Kandla port with a regular frequency goods train is also essential. Moreover, given the enormity of the region, its development needs and the strategic investment requirement of providing rapid access to national and international investors, it is essential to develop a strong regional air network, Mr Mehta added. |
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RBI package to raise interest rates: CII NEW DELHI, Aug 6 — The monetary measures announced by the RBI for controlling the volatility of the rupee will affect the competitiveness of the Indian industry. The recent RBI hike in the bank rate, cash reserve ratio and reduction in all refinance limits for banks will raise interest rates and working capital costs adversely affecting the competitiveness of the Indian industry, CII said in a statement here. The RBI’s monetary package will also reduce volatility in the forex market and penalise traders who were borrowing relatively cheap and shorting the rupee. The CII said the chamber would also discuss issues relating to securitisation, non-banking finance companies (NBFCs) and guidelines for commercial paper. With the introduction of new regulations for NBFC’s by the RBI, the commercial banks have shown greater reluctance for extending bank finance even to well-run NBFC’s, it said, adding that there is a need to incorporate adequate measures to ensure expeditious recovery of debts by these finance companies. Stating that there was a need to remove impediments to encourage securitisation, the CII said the RBI could take a lead in this by reducing stamp duty and
addressing issues relating to foreclosure laws. |
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He quit or did Sahara show him the door? NEW DELHI, Aug 6 (UNI) — Former Sahara Airlines Chief Controller Uttam Kumar Bose said today that he had formally resigned from the group on Friday on most cordial terms and was shocked to see a public notice saying his services had been terminated “for being involved in anti-organisational activities and irregularities”.
Mr Bose, who had been with the Sahara India pariwar for the past 21 years, told reporters here that he was flummoxed at the public notice appearing in newspapers today. “Even I can’t understand why they have done it. Its a serious charge and defamatory”, he said adding that he was saddened that his two-decade old association ended so bitterly. Mr Bose said there was nothing to indicate that the group would take such a step. On Friday he had gone personally and handed over his resignation as he was not happy with the way the airline was functioning and his being sidelined by the management. He had cleared his files and other paperwork as he was also a shareholder, director and partner in various companies of the group. |
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by K.R. Wadhwaney Small aircraft for non-trunk routes AIR France has grounded its remaining five Concordes following investigations into the recent crash. The airline will operate Concorde only after all snags in the aircraft and preliminary inquiry into catastrophe are known. “It is not unreasonable to look upon Concorde as a miracle”, says test pilot Brian Trubshaw in his autobiography, launched a day after the fatal accident. While signing autograph on his book entitled “Concorde — The Inside Story” Trubshaw says: “It will be wrong for me to say that I was astonished. It was an accident I hoped never would happen, but at the same time one has to be realistic”. In the crash, insurers are the great losers. They face up to $ 350 million in claims from passengers and airline. The plane itself was insured for $ 30 million. Unlike Air France, which has rightly grounded Concorde, Indian Airlines continue to operate ageing Boeing aircraft. There was a crash at Patna and another one or two mis-hits but the airlines are unable to ground the fleet. The authorities maintain that the Boeing 737 fleet is air-worthy and all aircraft have been subjected to checks. The Patna crash has, however, forced politicians and bureaucrats to take stock of the situation in a proper perspective. The authorities are working over-time to select new aircraft for the two national carriers, which have been demanding for the expansion for many years. Maybe, small aircraft, 50 seaters, will be put into operation on non-trunk routes. For almost a decade the national carriers have been waiting for acquisition of the MCLR (medium capacity long range) aircraft. But wheels within wheels at the government-level have prevented them from buying new version of aircraft. AAI and the DGCA need upgradation. Both these vital bodies need officials who are technically sound and realistic in approach. |
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by R.N. Lakhotia Q: What is the rate of surcharge on different slabs of Income Tax on the income for the financial year 1999-2000 (Assessment Year 2000-2001)? It is held by some persons that surcharge is payable on the total amount of Income Tax irrespective of any slab of Income Tax. Which investments earn rebate under section 88 of the Income Tax Act, 1961 and how much total rebate is permissible on the income for the financial year 1999-2000 (A.Y. 2000-2001). -
Avtar Singh, Mohali Ans: In respect of the Financial Year 1999-2000 relevant to the Assessment Year 2000-2001 there is no surcharge in respect of income from Rs 50,000 to 60,000. However, on income exceeding Rs 60,000 per annum the rate of surcharge is 10 per cent. This rate of surcharge is the same for any quantum of income exceeding Rs 60,000. The main important items of investment which would qualify for tax rebate U/S 88 are Life Insurance Premium payment, contribution to recognised provident fund, contribution to public provident fund, deposit in post office saving bank (CTD), subscription to NSC VIII Issue, contribution to unit linked Insurance Plan, subscription to National Saving Schemes and certain approved subscriptions to equity shares or debentures forming part of any eligible issue of capital approved by the Government and units of any mutual fund referred to in section 10 (23D). The maximum amount which can be invested in these instruments is Rs 80,000 and the tax rebate is @ 20 per cent which comes to Rs 16,000. The Finance Act, 2000 has enhanced the limit of tax rebate. Q: During the assessment year 1997-98, income tax of Rs 13,191 worked out on my income of Rs 93,970. After getting rebate of Rs 12,000 u/s 88, net tax payable was Rs 1191. On this amount, Rs 476 were allowed to me as 40 per cent Senior Citizen rebate. On revision of my pension in 1999-2000, I have been given arrears of pension amounting to Rs 20,580 relating to the year 1997-98. Consequently, my income for the year 1997-98 has risen to Rs 1,14,550 and net tax payable to Rs 7365. Kindly enlighten me if I can claim 40 per cent Senior Citizen rebate on the amount of Rs 7365 which will be shown in the return to be filed for the year 2000-2001. - Sardar Singh, Chandigarh Ans: The benefit of tax rebate available to a senior citizen for earlier Assessment Year namely Assessment Year 1997-98 cannot be taken advantage of while filing your Income-Tax return for the Assessment Year 2000-2001. In case you are including the arrear pension income in your total taxable income for the Assessment Year 2000-2001 then in terms of section 88B of the Income Tax Act, 1961 the maximum tax rebate that can be permissible to you as a Senior Citizen would be Rs 10,000. This limit has been enhanced to Rs 15,000 for the A.Y. 2001-2002. Q: I am working in a limited company. I have been paying tax annually. But since April 99 till March 2000, I alongwith others have not been paid salary as the company has no funds. So far, I think, company is not going to furnish us even Form No. 16 as they have not prepared salary statements for us. Now, please let us know, where we stand. If we are to file income tax report even if we do not get From No. 16? - V. P. Sodhi Ans: It is recommended that you should file your Income tax return even if Form No. 16 has not been received by you from your employer. Salary is taxable under the Income tax law when it is due even if it is not paid. |
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by J.C. Anand Time to wait till sensex stabilises ACCORDING to a survey, conducted by ORG-Marg on behalf of a leading financial daily, 149 chief executive officers and wholetime directors have expressed a good deal of confidence in the current state of trends in the corporate sector. About 61 per cent of the respondents believe that the bottomline of their companies will become healthier and 19 per cent expect a significant rise in profitability. The businessmen Confidence Survey indicates a score of 145 on the Index base of 100 points. It is good that the top corporate executive expect a good year for the corporate sector but the stock market wears a gloomy look harbouring a strong bearish sentiment. Some analysts expect the Sensex to drop to 3,800 point before it stabilises. During last week, the Sensex was down by 2.18 per cent and S & P CKN Nifty declined by 1.1 per cent. The new economy shares were among the worst sufferers. Satyam Computer dropped by Rs 245, and Infosys by Rs 196. Global Tele declined from Rs 1139.95 to Rs 957.95 in last week’s trading on Friday. On the whole, the fast moving consumer goods scrips like Hindustan Lever, Nestle, Cadbury and Britannia maintained their market valuation. Even the pharma shares, on the whole did not lose much ground, but the Tata group shares were friendless. Tata Chemicals declined to a new low of Rs 37 and the market sentiment was further weakened in the Tata group shares when Dr Manu Seth, the Managing Director of Tata Chemicals, resigned even though his contract was valid for another two years. Another share to suffer was Sterlite Industries. There was a report in a financial daily that the company was likely to be penalised for backtracking on a Department of Telecom Services tender. During last week, the share price plummeted from Rs 816 to Rs 694. Till a clear position is known about the penalty imposed on the company by the government, the share price of this company is not likely to improve. The stock market, as in the physics of sound, has its own laws of responses. In a falling market, the vibrations in some top shares bring down the prices of shares which have strong fundamentals and future prospects. This explain a sudden fall in the market price of Vikas WSP share which moved down from Rs 597 to Rs 500. In case, the market price moves down to Rs 500/- or near about it, this share is a good pick-up for appreciation as a long-term investment. I do not expect the market to improve during the current week; it may decline further. The trading volumes have gone very low, and the traders too are getting despondent. A company announces excellent results but the market price of the shares of the company declines. FIIs are keeping away from the Indian market, except as sellers. The exchange value of the rupee against dollar is also declining. Last week, it touched Rs 45.42 on Friday. FIs and the mutual funds have no appetite for fresh purchases; many of them are already suffering from dysepsia. The NAVs of mutual fund schemes are moving down almost daily. The schemes which specialise in the new economy shares are the worst sufferers. Many of them had made purchases when the new economy shares were booming, but now the new economy shares are being quoted at a substantial discount to the prices that the mutual funds paid. The UTI, too, is among the sufferers. It is time to wait and watch. The corporate sector has, on the whole, reported good results but the market sentiment is so low that no investor is interested in picking them up in spite of good results declared by many companies and the attractively low prices at which the shares of these companies are available. Analysts, including the foreign analysts, recommend investment in top software companies but the investors should wait till some stability in the market is attained. |
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Wockhardt eyes more companies NEW DELHI, Aug 6 (PTI) — Wockhardt Ltd, said today that it was looking at acquisition of companies and brands to strengthen its presence in domestic and overseas markets. “We have strategically decided to acquire more companies and brands to strengthen our presence in both domestic and overseas markets, H.F. Khorakhiwala, Chairman and Managing Director of Wockhardt Ltd told PTI. The company is also planning to list on US bourses by 2002 and has appointed Arthur Anderson as consultants. Morepen puts ADR issue on hold NEW DELHI, Aug 6 (UNI) — Morepen Laboratories has put on hold its proposed American Depository Receipt (ADR) issue in view of the depressed overseas markets, even as it endeavours to become a debt-free organisation by the end of the current fiscal. The company has decided to adopt a wait and watch attitude for launching the ADR till the overseas markets stabilise, Morepen Labs Managing Director KB Suri told UNI here. BPL seeks 300 mn loan for power project NEW DELHI, Aug 6 (PTI) — BPL led-consortium has sought a $ 300 million loan from Japan Bank for International Cooperation (JBIC) for its thermal power project in Andhra Pradesh. The lending agency is negotiating with the project promoters — BPL, Marubeni and Electric Power Development Company (EPDC) — for the 500 MW Ramagundam Thermal Power Project and a final decision will be taken soon. Gramophone to launch new brand CALCUTTA, Aug 6 (PTI) — Gramophone Company of India Limited (GCIL), an RPG group company and Indian licensee of HMV, will launch its very own brand name next month. A mojor event for GCIL, the new label, to be typically Indian, will co-exist with the HMV brand, according to RPG group Vice-Chairman Sanjiv Goenka.
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FIIs net buyers MUMBAI, Aug 6 (PTI) — After three weeks of selling spree,
FIIs turned net buyers in the equities market during the week ended August 3, 2000, with net investments of Rs 2.7 crore (0.5 million). The FIIs have totally kept away from the debt market during the week, when the BSE sensex lost 73.5 points in the trading sans much of a volatility, according to the latest data provided by SEBI. During the previous week ended July 27, the FIIs have unwound positions to the tune of Rs 84.5 crore ($ 18.8 mn).
Inflation dips NEW DELHI, Aug 6 (PTI) — The annual rate of inflation based on the wholesale price index (WPI) rose to 6.26 per cent during the week ended July 22 as against 6.12 per cent in the previous week. The rate was 1.91 per cent in the corresponding week last year.
LKP Forex CHANDIGARH, Aug 6 — LKP Forex, the only ISO 9002 certified full-fledged money changer, has become a leading forex brand in the forex market with competition from international brands like Thomas Cook, American Express etc. LKP Forex has achieved a growth rate of almost 40 per cent in distribution. From a single branch outfit in 1992, it has expanded its branch network to 39 branches in 27 cities, including Chandigarh. The group has also launched LKP Forex Travel Tips. According to Mr Parag Mehta, Executive Director, LKP Merchant Financing, LKP Forex has launched its new logo in green, which symbolises fertility, growth and longevity. It has also launched its website www.lkpindia.com.
PTI services NEW DELHI, Aug 6 (PTI) — Essel Shyam Communication has commenced delivery of PTI’s news and photo services through satellite.
Allahabad bank CALCUTTA, Aug 6 (UNI) — Allahabad Bank has decided to increase its Prime Lending Rate by 50 basis points from 12 per cent to 12.5 per cent from August 7, a bank statement issued here says.
SBI managers CHANDIGARH, Aug 6 — The SBI, Zonal Office, Punjab, Chandigarh Module, today felicitated its seven Branch managers for their performance in deposit mobilisation. They achieved more than 100 per cent budgetary goals during 1999-2000. Cash awards and trophies were presented to them by Mr K.K. Mehra, DGM. The Managers are D.S. Papneja (M.T. Patiala), D.P.S. Chhabra (NOC Patiala), S.K. Shingari (Amritsar cantt), N.P. Mittal (Barnala), Ravinder Singh (ADB Sandhaur), V.K. Sharma (Vanaike), Nand Kishore (Momoon cantt). |
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