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| Sunday, August 20, 2000, Chandigarh, India   
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TRAI recommendations on VSAT services Re fall: industry must
restrategise
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| Emmsons, IBM tie-up CHANDIGARH, Aug 19 — Emmsons Infotech Ltd is all set to make its presence felt as an Internet service provider in Punjab. The company, which is jointly promoted by the Rangepay Group of UK, has recently acquired FIPB approval to facilitate foreign investment. UAE firm plans refinery in Punjab J&K Government
to close wool units Why ST on furnace
oil higher in Punjab Trust to help
raise pharma standards Panel: open up basic
telecom services Videocon floats ‘Crorepati’ scheme
NEW DELHI, Aug 19 (PTI) — The government has sought Telecom Regulatory Authority of India’s (TRAI) recommendations on issues concerning Very Small Aperture Terminal (VSAT) services for fixing level of entry fee, percentage of revenue share as licence fee and other aspects of licence conditions. In a consultation paper released last week, TRAI Chairman M.S. Verma said ‘‘if this service has to grow and acquire a significant role in the entire telecom service infrastructure that is to be developed in the country, its structure and perhaps the target market will need to be addressed afresh.’’ The licence period for new licences has been made 20 years, extendable by additional period of 10 years thereafter, Verma said adding that these licences would be issued on non-exclusive basis. Licencees would have to pay a one-time entry fee and a licence fee based on revenue share, Verma said adding that TRAI’s recommendations on these issues would be based on the comments by industry as well as subscribers. The comments can be given till September 7 on the consultation paper. So far the government had provided 14 licences with specified licence fee structure for operating 5,905 VSATs through out the country. All 14 licences, of which four have been terminated, were issued on of first come first served basis without going through any tendering procedure and without putting any limitation on the number of licences. Satellite based gateways for data traffic have been permitted, as also hiring of transponder capacity from foreign satellites in consultation with Department of Space, Verma said. This recognised the fact that VSAT based services would play a significant role towards the goal of affordable, efficient and world class telecom infrastructure in the country, he added. Verma said the VSAT services could prove to be a useful solution to supplement bandwidth availability and thereby help avoid the current bandwidth shortage problem. ‘‘As data traffic increases over the years, such alternative solutions may become even more important. The efforts to develop VSAT services need to be seen in this context,’’ TRAI chairman said in the consultation paper. One of the proposed 17 issues to be considered by TRAI included that whether the market for VSAT services was attractive enough to justify the levy of an entry fee and the basis for determining entry fee for new entrants. |
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Re fall: industry must
restrategise RUPEE has been volatile and consistently waning against US dollar. It
nose-dived by a record level of 5.5. per cent since January 2000 notwithstanding
the knee jerk reaction of the government to prop up the falling value of the rupee. Following steps are being proposed or have been taken by RBI to infuse the additional $ 2 billion in the foreign exchange market in view of rupee becoming fully convertible on current account an operationalisation of FEMA on June 1, 2000:-
The Federation of Indian Exporters Organisation (FIEO) has expressed its reservations to the aforesaid decisions of RBI and opined that the exports would be hit because of rupee hiccups. There are two sets of industries-one’s which are import dependent and the other’s are independent of imports. It is the first category of industries which fall a prey to the falling rupee against dollar, the hitting is harder if the import component of the inputs is quite with the result leaders are turning to be followers. A number of famous names don’t exist today. We have to accept the changing face of the economy to move it on a higher growth trajectory. Recently large number of global giants have chosen India as their resource base for the manufacture and export of automobiles. The downslide in the value of rupee against the US dollar has hit India’s $ 8 billion worth of automobile industry. Global automobile giants viz, Daewoo, Ford, Fiat and General Motors which have set up manufacturing bases in India, despite their increased levels of local sourcing are still importing some key components resulting in cost escalation. This would mean not only Indian consumer having to pay more but also dwindling exports of
automobiles because of fierce international competition. This is also the case with steel and oil related industries since the oil import bill is expected to soar up to $ 16.5 billion. All this means less foreign exchange earnings affecting adversely India’s balance of payments towards mounting external debt of $ 100 billion with
foreign exchange reserves of only $ 36 billion. Although RBI has administered some fire fighting measures, the only panacea seems to be boosting exports by sustaining high quality instead of the concept of rupee $ exchange rate parity by devaluing rupee or allowing it to slide. We should
in fact restrategise and adopt the path of restructuring and reengineering with changing time, otherwise companies unable to move with times have to die. Reliance Industries and Hindustan Lever have already shown the way by achieving the status of being among the worlds top 100 best managed companies. |
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Emmsons, IBM tie-up CHANDIGARH, Aug 19 — Emmsons Infotech Ltd is all set to make its presence felt as an Internet service provider (ISP) in Punjab. The company, which is jointly promoted by the Rangepay Group of UK, has recently acquired FIPB approval to facilitate foreign investment. Emmsons has tied up with IBM and CISCO for its infrastructural requirements. It plans to set up its own gateway in near future and at present has a tie-up with the VSNL for international gateway connectivity. “We plan to start the operations by mid-September and the package includes facilitating B2B and B2C e-commerce services,” the CEO of the company said.
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UAE firm plans refinery in Punjab NEW DELHI, Aug 19 — United Arab Emirates (UAE)-based Al Manhal International Group (AMIG) is planning to follow up its energy and two gas pipeline projects in India, worth around $8 billion, with a refinery project in Punjab. “We are still in the initial stages of discussions with the Hindustan Petroleum Corporation (HPCL) and PSIDC. The greenfield project, planned in Bathinda, is expected to be finalised in the coming few weeks,” Sa’ad Salem H. Yousef, Director, Energy division of AMIG, told IANS. “The Indian market offers good potential for international investors,” said Yousef, praising the government efforts in boosting up infrastructure. “We hope and seek to establish relationship with both private and government entities in India on a more firm basis.” In alliance with New Delhi-based Vavasi Oil and Gas, AMIG entered the Indian energy sector in December 1997 with proposal to set up a petrochemical complex in Gopalpur, Orissa. The Gopalpur Integrated Complex will comprise five companies: Gopalpur LNG, Gopalpur Power, Gopalpur Fertiliser, Gopalpur Petrochemical, and Gopalpur NG Pipeline. “In all except Gopalpur Power, AMIG-Vavasi will hold majority equity stake. The Industrial Promotion and Investment Corporation of Orissa (IPICOL), our partners in the project, will initially hold 51 per cent equity. Under a special shareholding agreement, IPICOL will subsequently divest its equity holding in favour of AMIG-Vavasi and retain only a total of 5 per cent equity,” said Farid Arifuddin, Managing Director of Vavasi. The total project cost is estimated between $6.5 and 7 billion. Financial advisers to the project, Sumitomo Bank are arranging the funding through debt equity and are in talks with a consortium of banks and financial institutions, said Bruce M. Gordon, AMIG senior consultant for energy. The project envisages setting up a receiving and regassification terminal with five million tonnes per annum capacity, a nitrogenous fertiliser (urea ammonia) plant with 1.2 million tonnes p.a. capacity, a naphtha cum gas cracker plant of 2.5 million tonnes p.a. capacity and a 2,000-3,000 MW power plant. Construction work is expected to start by the middle of next year following the financial closure in the first quarter of 2001. Early this year a letter of intent was signed by Gopalpur LNG with Australia LNG for supply of five million tonnes of gas annually over a 20 year period starting from 2003 fourth quarter or 2004 first quarter when the project start-up is scheduled. The final agreement with Australia LNG, including the shipping structure for the supply of gas, is expected to be concluded by year-end. Australia LNG is currently exporting 7.5 million tonnes of LNG annually to Japan through its facilities in Karratha in western Australia. The Gopalpur complex is but the beginning of a series of projects the AMIG-Vavasi combine propose in other states. Linking the Orissa project to the other states would be a 1,600 km south bound gas pipeline along the east coast of three million tonnes p.a. capacity and a north bound pipeline with 3-5 million tonne p.a. capacity. The pipeline project envisages two spur lines from Vijaywada to Hyderabad and Chennai to Bangalore. The first linking project announced on July 11 is a new $1.7 billion gas pipeline and energy project which envisages supply of natural gas through a 1,000 km pipeline from Gopalpur to Auriya, near Kanpur in central Uttar Pradesh. The Uttar Pradesh State Industrial Development Corporation will hold 11 per cent equity in this project which envisages setting up a 2,000 MW gas based power plant at a still to be decided location. Also being studied is a 1.2 million tonne capacity urea fertiliser plant at a cost of $700 million. Project details and equity structure are expected to be finalised within three months as per the MoU. — IANS |
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J&K Government
to close wool units SRINAGAR, Aug 19 — The Jammu and Kashmir Government has decided to close down the State Himalayan Wool Chambers (HWCL), a public sector undertaking and its subsidiary units, the J&K State Handicrafts and Handloom Raw Material Supplies Organisation (HHRO) on the rercommendations of the Godbole Committee set up by the government for Economic Reforms in the State. An official spokesman stated here that the decision was taken by the Cabinet here yesterday. Announcing the decision, the Chief Secretary, Mr Ashok Jaitly, said the procedure for winding up the units would be completed within three months. |
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Why ST on furnace
oil higher in Punjab IF any body is interested in identifying Government with attributes of non-functioning; in-difference to business growth or even its own revenue growth it is at hand. Punjab Government meets almost all these requirements. Three months back Government of India put a ban on inter-state movement of furnace oil. As a result the sales tax burden went up from 4 per cent (CST) to 22 per cent (State Tax). Obviously no industry can bear this burden. Interestingly larger units were allowed Inter-state movement of alternative fuel (HPS). So smaller units have to suffer in competition both in absolute and relative terms. Deputation of Apex Chamber of Commerce & Industry met Chief Minister on July 5 and he was prompt enough to instruct FCT to reduce the Sale Tax immediately. Deputation then met FCT who also promised to resolve the issue within two days. Days went by, weeks went by and months have gone but the matter is still lingering on. Thereafter Chamber’s deputation met Excise & Taxation Minister on July 24 who also gave full assurance to reduce the tax to 8 per cent without further delay. Under the uniform sale tax policy adopted by all states sales tax on furnace oil cannot be more than the rate of General Sales Tax which is 8 per cent in Punjab. Why is Punjab Govt. charging 20 per cent with 2 per cent surcharge. Interestingly Punjab Government has reduced sale tax rate on 24 items as per the Uniform sale tax regime. But that fuel is being charged 22 per cent sale tax? Many states are charging 4 per cent sale tax on furnace oil. West Bengal, AP; Gujarat charge 4 per cent while UP is charging 2.5 per cent from actual users. In Punjab there was hardly any need to levy sale tax on furnace oil at Ist stage as it is the basic fuel. Product manufactured by its use is charged separate sales tax. So it is clear case of multiple taxation. Imported Furnace Oil can move from one state to another. Some enterprising people have opened depot of imported furnace oil which is cheaper in basic price by Re 1 per litre and it shall attract only 4 per cent CST. Industry has to use this facility perforce. In this case Punjab Government is a loser of revenue as if to justify the attribute. In today’s administration two extremes are visible. Some part of the administration is over active while the other is sleepy. |
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Trust to help
raise pharma standards NEW DELHI, Aug 19 — To curb the practice of untrained persons operating as chemists and of medicines being sold without prescription, a survey would be conducted by the Delhi Pharmaceutical Trust. The trust, which aims to upgrade the knowledge and skills of pharmacists and help them professionalise their health care role, hopes to complete the job in four months. The survey, to be initially done in Delhi, would identify the problems faced by chemists and reasons for their selling medicines without prescription and make suitable recommendations. According to Mr P.D. Sheth and Mr D.B.A. Narayana, members of the trust, there are nearly five lakh pharmacists in the country and about 25,000 are being added to them every year. In Delhi there are about 7,000 chemist shops and pharmacies and the survey would go a long way in raising professional standards.
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Panel: open up basic
telecom services NEW
DELHI, Aug 19 — The government should encourage competition in the basic telecom services in the country by allowing the entry of private players in this sector. “There is urgent need for opening of telecom sector to competition which would give better quality of service at competitive prices,” said the Surya Foundation Think Tank here today. The think tank includes of former Telecom Board member, Mr M.P. Agarwala, former Telecom Secretary, Mr Satyapal, former Deputy Director General of Telecom Commission, Mr M.A. Ramaswamy, former senior deputy director general of telecom commission, Mr N. Balakrishnan, former Telecom Commission Advisor, Mr G.P. Sangal and consumer activist Ms Pushpa Girimaji. They recommended that the government should invite fresh applications for this after getting clearance from the judiciary where disputes are in courts. There should be no tenders rather only applications would have to be invited for granting licences on certain conditions. The conditions should include one time entry fees which should be kept at two per cent of gross revenue of 1999-2000 for the respective telecom circle. Performance bank guarantee should be taken at 8 per cent of revenue of 1999-2000. Parameters to determine the performance would be call
completion rate, consumer satisfaction, down time, provision of telephones and penetration of SDCA. Revenue sharing formula should be same as suggested for National Long Distance Service like 7 per cent of the gross revenue accruing to the operator, goes to the government. The seven comprises of USO 5 per cent, research and development 1 per cent and regulation one per cent.
Videocon floats ‘Crorepati’ scheme CHANDIGARH, Aug 19 — To commemorate the completion of 15 years, Videocon today launched “Aap Banege Crorepati” scheme for all it’s consumers as well as dealers. Mr Manoj Gupta, Senior Sales Manager, Punjab assured dealers of all possible support. The offer allows the dealer and the customers a chance to win 2 prizes. One of these prizes is an assured “Gold coin” and also an opportunity to win from 31661 prizes, including a first prize of Rs one crore. The details of the scheme was explained by Mr Ramesh Gaur, GM sales. The scheme which is valid from August 15 to September 30, each CTv, washing machine or refrigerator purchase entitles the consumer to scratch and win gold besides other prizes up to Rs one crore on answering seven accompanying questions.
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by A.K. Sachdeva Q: We are registered as a dealer under the Haryana General Sales Tax Act, 1973 and the Central Sales Tax Act, 1956. A consignment of goods was despatched to a party last month and the documents such as bill of sale as well as goods receipt were handed over to the driver
in charge of the vehicle. These papers were virtually left behind. During
the course of roadside checking the driver could not produce the documents before the checking Officer in respect of the consignment of goods loaded in the vehicle. Explanation regarding non-production of documents were furnished. However the checking Officer has detained the goods and penalty proceedings have been initiated under sub-section (6) of section 37 of the Haryana General
Sales Tax Act, 1973. Kindly advise. — Kamal Sharma, Sonepat Ans: Mere absence of documents at the time of checking does not attract penalty under sub-section (6) of section 37 of the Haryana General Sales Tax Act, 1973. Before taking recourse to the penal provisions it is obligatory for the checking Officer to prove on record that the person sought to be proceeded against was attempting to evade the tax due under the Act. Sub-section (6) of section 37, inter alia, says “The officer detaining the goods shall record the statement, if any, given by the owner of the goods or his representative or the driver of other person
in charge of the goods carrier and shall require him to produce proper and genuine documents....” This clearly means that the documents relating to the consignment can be submitted before the checking officer even during the course of enquiry after detention of the goods. Therefore simply because the driver left behind the documents in relation to the consignment of goods despatched it does not constitute a ground for holding that there was an attempt to evade the tax due under the Act. Under these circumstances reply to the show notice which might have been issued by the checking officer can be filed explaining away these facts and no case for imposition of penalty is made out. Q: During the assessment year 1996-97 we claimed certain deductions from the gross turnover on account of branch transfers. The assessing authority, however, does not want to allow the claim on the ground that these transactions constituted sales in the course of inter-State trade or commerce. The assessing authority also proposes to levy penalty under sub-section (2) of section 9 of the Central Sales Tax Act, 1956 read with section 48 of the Haryana General tax Act, 1973 on the footing that the returns furnished were false and incorrect. Kindly advise. — Surinder Kumar Gupta Ans: It has not been stated by the queriest as to whether the deductions claimed in the returns on account of branch transfers were genuine or not. However, simply because the assessing authority does not want to allow the claim of branch transfers it does not constitute a valid ground for imposition of penalty under sub-section (2) of section 9 of the Central Sales Tax Act, 1956 read with section 48 of the Haryana General Sales Tax Act, 1973. The returns furnished cannot be termed as false merely because the deduction claimed by the dealer are not allowable. |
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by Pushpa Girimaji Check sale of appliances with least energy efficient WHEN you buy an electric or an electronic household appliance, do you ever try to find out how much power it consumes and what its usage would mean to your power bill? Or, while comparing brands in order to make an informed choice, do you also consider the energy efficiency of the brands? If your answer to these questions is in the negative, it is time you changed the way you looked at electric and electronic products. As it is, there is a gap between requirement and availability of power in the country, representing a shortage of 5.5 per cent (1998-99) The peak shortage during the year April 1998 to January 1999 was in fact 11 per cent. And as more and more white goods come into the market and the purchasing power of consumers increases, the demand for power is sure to go up, widening further, the chasm between supply and demand. If this is not adequate enough reason to conserve power, there is more. As part of the process of economic liberalisation, state governments are slowly moving towards corporatisation, privatisation and commercialisation of electricity generation, transmission and distribution and are slowly either reducing or withdrawing the subsidy on power charges. In other words, power generation and supply would be operated on commercial principles and this would mean higher power tariff and consequently, a bigger power bill. These factors and of course the environmental concerns make it imperative that consumers buy products that consume less energy. In fact, many countries the world over have recognised the need for energy efficient products and have enforced energy efficiency standards, besides making energy
labeling of certain appliances mandatory. In Europe, for example, the law requires that all new domestic refrigerators, freezers , washing machines and dishwashers display the European Community Energy label. These products are rated A to G — while ‘A’rated products are the most energy efficient, ‘G’ rated products are the least efficient. Similarly, in Australia, energy
labeling of domestic white goods and air conditioners is mandatory . In the United States, the National Appliance Energy Conservation Act established energy efficiency standards and detailed regulations have codified the energy performance requirements. According to estimates, the US efficiency standards programmes for a variety of appliances have resulted in a saving of roughly $ 200 per year per household. In Japan and Switzerland, compliance of standards is voluntary, but manufacturers follow them. Philippines, on the other hand, has introduced compulsory standardisation and
labeling and such measures for air conditioners alone resulted in a saving of 6MW of power in the first year of its implementation. Thailand has a voluntary
labeling programme and according to estimates, during the four year period ending October 1997, the power saved was an estimated 52 MW. In India, despite the worrying power situation, such a programme of standardisation and
labeling of household appliances for energy efficiency is yet to take off. The Energy Conservation Bill, 2000, which seeks to provide statutory measures to promote and enforce efficient use of energy and its conservation in various sectors of the economy, is yet to become a law. Introduced in Lok Sabha in February this year by the power minister, the Bill is now before a Parliamentary Standing Committee. The Bill, as introduced, provides for a statutory authority called the Bureau of Energy Efficiency and confers on the central government, state governments and the Bureau, powers to enforce measures required for efficient use of energy. Meanwhile, the Bureau of Indian Standards, which is the national standards making body, has begun the process of formulating energy efficiency standards for storage water heaters, air conditioners and refrigerators, for the purpose of introducing energy
labeling. However, to promote energy efficient household products, the government should make certain minimum energy efficiency standards mandatory. In other words, those appliances which do not come up to the minimum energy efficiency parameters and consume too much power, should not be allowed to be marketed. Side by side, there should be a scheme of mandatory energy efficiency rating and
labeling of certain household appliances so that a consumer can opt for those that use minimum power. Here, mere
labeling will not help. It has to be supplemented with concerted efforts at creating consumer awareness about the advantages of energy efficient products. In addition, the government has to come up with a scheme of disincentives and incentives to the industry so as to discourage marketing of inefficient appliances and promote only efficient products. Incentives should include duty cuts to ensure that these products are not priced so high as to discourage consumers from buying them. Provision of adequate testing facilities is also essential for a successful programme of this sort. Meanwhile, consumers should start asking manufacturers questions about energy consumption of their products. Consumer preference for goods that use less power will not only mean a saving on the power bill, but will also make manufacturers think along those lines. |
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by Praful R. Desai Disclosure Q: Should an order of suspension, need disclose contemplated disciplinary proceedings? Ans: In Punjab National Bank v D.M. Amarnath (2000-II-LLJ-256) the SC opined thus: On the ground of certain alleged misconduct, the bank placed one of its employee under suspension. The HC took the view that the order of suspension did not mention whether any disciplinary proceedings were contemplated and hence the order of suspension was not maintainable. The SC, in appeal, expressed the view that the law does not require that the suspension order must on its face, disclose that any disciplinary proceedings were contemplated or were pending or that any criminal offence was under investigation, inquiry or trial. It would be sufficient if the competent authority recorded in its proceedings that the conditions mentioned in Regulation 12.1 were in existence. Bank produced the file before the SC which shows that the above conditions were satisfied, disciplinary proceedings were contemplated and in fact a criminal case itself was pending. For these reasons, the SC held that the order of suspension was justified when it was
passed. The HC in the opinion of the SC was wrong in relying the judgement of the Karnataka HC in C.K. Roogi v S.M. Meger (1969 (L) MYs. L.J. 540 (Kant), which in the view of the SC was not intended to lay down that the order of suspension must state that disciplinary proceedings were proposed or are pending and otherwise, the order would be bad. The SC clarified that it did not agree with this
view. Consequently, the order of HC is set aside. The suspension order was restored.
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