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| Monday,
October 2, 2000, Chandigarh, India   
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Punjab economy awaits bad times ahead ACE opposes ‘Silicon Valley’ at Mohali Industry ignores HERC deadline Escorts Heart sets up
unit at Panchkula Is ‘gutka’
a trade mark? |
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Punjab economy awaits bad times ahead LUDHIANA, Oct 1 — The Central Government has finally increased the prices of petro products. By this move the government expects to mobilise about Rs 8,000 crore. Experts and people in general are of the view that the economy of Punjab which is predominantly agricultural is going to face problems besides other states due to the hike in petrol prices. Farmers are already facing difficulties in the sale of wheat as well as rice due to heavy surplus of foodgrain in the Central pool and lower prices of wheat in the international market. The small- scale sector which contributes one-fourth to the state economy is also fighting a losing battle against the onslaught of higher excise duty and sale tax on raw material and finished goods, and cheap imports through dumping methods adopted by foreign countries. The international oil prices had started increasing after the Organisation of Petrol Exporting Countries (OPEC) decided to control the supply of crude oil in the international market, after the oil prices hit the all time low price of $10.99 a barrel in December 1998. Since then the world economies are feeling the heat though the OPEC had assured the world community to increase the oil production by 3 per cent in its latest September, 10 meeting but to no avail. Rather the prices have shoot upto $ 36 per barrel. The deficit in the oil pool had reached Rs 24,000 crore. With the latest increase in prices the people will have to spend about Rs 3 per litre more on petrol, kerosene and diesel and Rs 40 more on gas cylinder. No doubt the duties have been also slashed but even then the impact on the public will be substantial. Prof Joginder Singh, Head of the Department of Economics, PAU, says, “This increase will certainly have a
negative impact on the state economy. The increase in diesel prices by about 20 per cent will visibly increase the cost of production of wheat by around 4 per cent. But the further increase in the prices of fertilisers, farm machinery and labour cost, that are bound to happen in the near future, will make it difficult for farmers to compete with the international players.” The extra money spent on the increased price of petroleum products will proportionately decrease the disposable income with the public. Consequently it will affect their overall purchasing power and thus the negative impact on state economy. The sale of tractors, automobiles, and other consumer goods will also suffer to some extent, he adds. According to the government statistics, in the financial year 1999-2000 the sale of petroleum products in the Punjab and Chandigarh region was 43,22,067 metric tonnes (MT) which included 4,61,948 MT petrol, 23,29,282 MT diesel, 3,66,378 MT kerosene, and 9,26,636 MT furnace oil and heavy petrol stocks. The increase in prices mean that the state will have to spend hundreds of crores extra on energy resources. The industry representatives are of the view that diesel is a major input component for the transport and agriculture sector. Mr G.L. Pahawa, president of the United Cycle& Cycle Parts Association, Punjab is of the view, The cycle industry is going to suffer in the international and national market, as oil is a major component of the industry.” The transporters are also of the opinion the state transport sector is already running in losses worth crores of rupees. Any increase in diesel prices is bound to hit it hard. Since due to political scenario of the state it can not expect from the state government any move to increase the bus fares. The truckers in the state will find it hard to pass the burden on consumers due to slackened demand in the economy. Mr V.P. Chopra, President, Federation of Small Scale Industries Association of Punjab is of the view, “The knitwear and light
engineering machinery are two major industries of the state They were already protesting against the high sale tax on the furnace oil, and now the increase in its price will giving shocks to the
industrialists. The higher electricity charges, frequent power-cuts, wide spread corruption in the taxation departments have already made us incompetent in the national and international market. Now the increase in the petroleum products, will have a cascading effect as it will increase the prices of almost all the products in the economy.” Is there no other alternative to save the economy? The experts are of the view the increase in oil prices is undoubtedly going to affect the cost of production everywhere but the state government can take specific measures to blunt the attack. Mr Iqbal Singh Bahl, General Secretary, Wholesale Cycle Industries of Punjab says, “The government should slash the high sale tax that is presently 21 per cent on petrol and 8.8 per cent on diesel besides octroi duty. Rather the corrupt measures of tax evasion and wasteful expenditure in the public sector should be strictly checked.” Whatever strategies the government may adopt the oil prices will continue to increase. Since two third of our oil demand is fulfilled by imports. Any devaluation of the rupee in near future will also increase the nation’s petroleum bill. Hence the demand side management and search for alternative energy sources become compulsory. The planned strategies on the part of state as well as public can clear this mess created due to the shortsightedness of our planners, says Prof Joginder Singh. Dr
Joginder Singh adds the competitiveness of the state in the agriculture and industrial sectors will have to be maintained through cuts in the petroleum bill. It will need efforts to explore alternative energy resources like biogas and increase in hydel electricity production in the near future.
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ACE opposes ‘Silicon Valley’ at Mohali LUDHIANA, Oct 1 — The Punjab government’s move to develop a Silicon Valley-type Information Technology (IT) facility at Mohali has run into stiff opposition from the state’s premier IT trade and industry body, Association of Computer Entrepreneurs (ACE). The ACE is the view that instead of focussing only on Mohali, the government would be better advised to pay attention to increasing computer penetration in the state, particularly its own offices. “The fact of the matter is that the infrastructure at Mohali at present is so inadequate that the IT software units are already located there are thinking of shifting elsewhere. Under the circumstances, it is difficult to imagine how the Punjab government plans to attract more IT units to Mohali”, said Mr Vinod Loomba and Mr N.S. Dhami, President and Vice-President, respectively, of ACE, in an interview with TNS here today. They point out that Silicon Valley in the USA was not created by the government. “Silicon Valley just happened,” they said, adding that this can happen in Punjab too provided the basic infrastructure and computer penetration is facilitated by the government. The ACE came into being about six years ago has been trying ever since to harness the energies of Punjab’s IT entrepreneurs to create an IT culture in
Punjab. Mr Dhami and Mr Loomba note that while the Punjab Government is increasingly becoming aware about the potential of IT to change the economic profile of the state, a lot still needs to be done. Flaws in the state’s IT policy have recently surfaced, with voices of discontent from national and international software companies that had set up shop in Mohali. “Mohali is being projected by Punjab as the IT hub of north India, but the infrastructure remains inadequate in terms of reliability of power supply, bandwidth, leisure facilities etc. This is forcing the software units to have a rethink of their Mohali plans”, they point out. As many experts have pointed out before, the Punjab Government’s policy of focussing on Mohali, in imitation of southern states’ policy, is faulty. Punjab has its own
realities. The government should apply its attention to increasing computer penetration in the state, particularly in its own offices. A higher level PC and Internet penetration will go a long way in creating the IT culture in the state, and homegrown entrepreneurship will sprout. A lot of small export-oriented software and e-services businesses all over the state will be better for Punjab’s economy than a few medium-sized units in one town of Punjab. That is how Silicon Valley happened. No government ever created a Silicon Valley. Organisations like the ACE, Punjab’s premier IT trade and industry body, have been trying to make a difference. One of the important demands of the IT business in Punjab has been the reduction of sales tax from eight per cent to four per cent in order to increase the installed base of PCs and Internet
connections. This has been accepted by the Punjab Government, though the notification is still awaited. ACE is also proactively working towards speeding up the IT revolution in Punjab by organising a series of exhibitions.
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Industry ignores HERC deadline GURGAON, Oct 1 — The industry here has ignored the deadline set by the Haryana Electricity Regulation
Commission (HERC) to file objections to a proposal for a fresh hike in power tariff by 44 paise per unit (for the industry) made by the Haryana Vidut Prasaran Nigam (HVPN). The Gurgaon Industry Association (GIA) has urged the HERC to set a new deadline for filing the objections on ground that the intimation and the response time to it given to the industrial units and the concerned organisations was only one week, which was too short. In a letter to the HERC the industry has criticised the move for gross increase in tariff by 44 paise per unit for commercial users, especially when it has already been increased by 21 paise per unit in August. The deadline ended last month. The President of the GIA, Mr Jagan Nath Mangla in a statement today wondered as to why should the industrial units purchase power from the HVPN when their generator set power cost Rs 3 per unit, including the generators wear and tear
cost. The purchase of power from the HVPN was costlier. In this recession period the backbone of the industry has already been broken by the Local Area Development Tax and now the proposed
increase in power tariff ,the HVPN wanted to make sure that it went sick, he added. The industrialists in the small and medium categories are also irked over the government’s decision for conversion of load from 50 KW to 70 KW on High Tension (HT) facility. The industrialists, having sanctioned load higher than 50 KW, will necessarily have to be converted to the HT. The GIA has once again drawn the attention of the state government to the long standing demand of the industrialists to revise the Change of Land Use (CLU) to a realistic level. The captains of the industry feel that the procedure to procure CLU is very costly and complicated. According to the Haryana government’s Town and Country Planning Development notification dated July 21, 1999, the scrutiny/Inspection fee was at the rate of Rs 10 per sq yd and the conversion charges were at the rate of Rs 50 per sq yds. Accordingly, the industries applied for the grant of CLU for setting up their units depositing the prescribed fees. However, the Town and Country Planning Department later issued notices to further deposit Rs 266.25 as External Development Charges (EDC) and Rs 199.75 as Internal Development Charges (IDC). Some of the industrialists had started constructions after grant of CLU, 1.e without payment of the EDC/IDCs, which had not been demanded earlier. Mr Mangla also raised these points in a meeting of the industrialists of Rajasthan, Haryana, Delhi and Uttar Pradesh and the officials of these states in connection with rehabilitation of the displaced industries from Delhi in the National Capital Region (NCR), convened by the Union Minister for Urban Affairs, Mr Jagmohan, in Delhi yesterday.
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Escorts Heart sets up
unit at Panchkula CHANDIGARH, Oct 1 — Kaiser Hospital, the only satellite unit of Escorts Heart Institute and Research Centre (EHIRC), north of Delhi has started its operations at Sector 21, Panchkula. It offers all specialities with round the clock emergency cover. Set up with a cost of Rs 15.4 crore, the hospital is funded by NRI doctors and financed by IDBI. Dr C.M. Bhasin, Chief General Manager Projects, EHIRC is one of the directors. Dr Arun Nibber, MD Kaiser Hospital said that the aim behind the project is to provide quality health care at an affordable cost. Dr Bhasin commented, “Escorts is particular about the quality standards that a medical institution would offer its patients. The tie-up has been a result of the true nature of Kaiser as a highly specialised medical facility.” This unit is manned and managed by Escorts and is shortly to be tele-linked directly with them. Dr V.D. Singh, who heads the plastic surgery department at Kaiser said, “The number of Plastic Surgery units in this region is limited in comparison to the number of cases. |
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Is ‘gutka’
a trade mark? NEW DELHI, Oct 1 (PTI) — The Delhi High Court has sought reply from Assistant Registrar of Trade Marks
(ARTM) whether the word “gutka” is a generic name for tobacco or is it an invention over which the innovator has exclusive rights. While hearing an appeal by Prince Gutka Ltd
(PGL) against the ARTM's verdict by which it had impleaded two others as parties to the dispute over the use of “gutka” as trade mark, Justice S.N. Kapoor last week issued notice to
ARTM directing him to file his reply by the next date of hearing. PGL
challenged ARTM's order on the ground that it had an exclusive right over the “gutka” as a trade mark claiming that it had “invented” its use for “pan masala, Ilachi, supari” in 1971. The court asked the registrar to mention grounds “why the appeal filed by the petitioner Prince Gutka Ltd. for the exclusive rights of trade mark “gutka” could not be accepted. PGL, a Delhi-based firm, claimed that it was the “first” to use “gutka” as trade mark and therefore had exclusive right over it. PGL’s counsel Mohan Singh contended that the firm was also the first to apply for the trade mark before the
ARTM in 1977. Mr Mohan Singh argued that on two occasions Registrar of Trade Mark had accepted his client’s application for registration of “gutka” as a trade mark for its products. |
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Defer investment plans APART from the hike in petrogood prices, there is a lot of bad news to indicate that the industry is not doing well. The GDP growth rate has dipped to 5.8 per cent in the first quarter, as against 6.9 per cent in the corresponding period last year. The latest Confederation of Industry’s Ascon survey confirms that 81 of the 120 sectors (covered by the survey) have reported a growth of less than 10 per cent as against 59 in the survey conducted for the first six months last year. The sectors which have recorded a high growth rate include paints, colour picture tubes, ceramics, earthmoving construction equipment, drugs and pharmaceutical, synthetical detergents. The export-oriented units and ICE sector have done very well. The latest hike in the petrogood products is likely to add to the industry’s woes. The price hike covers diesel, petrol, LPG, kerosene and aviation turbine fuel. The rate of increase varies from 11 per cent to 18 per cent. No one can blame the government for the hike, for this had become a compulsory exercise due to the hike in the international price of the petroleum products. Even after the hike, the government has to bear a heavy burden as some of these petrogood items are still being subsidised. Industry, consumers as well the national exchequer have to adjust to the hiked petrogood prices. In case, agriculture does not perform well during the current financial year, the GDP growth may slip down further. The software units with a large foreign clientage and exports can, however, maintain a high growth rate. The same will apply to the other export units like Vikas WSP. The stock market, which has been moving within narrow limits last week, has to register the impact of the news relating to the slowdown of industry and hike in petrogood prices this week. The market will also be awaiting for the second quarter results of the corporate sector. The results are not expected to be much better than the first quarter results. Some companies may, however, report better results. Tata Finance, for example, has reported 32 per cent higher net profit at Rs 56.75 crore (from Rs 42.97 crore) for the year ended June 30,2000. It has also signed an agreement with American International Inc to enter into money-changing and allied activities. The company is also entering online and retail broking business. The
pharmaceutical companies have also been hit by the new price fixation by the government, particularly in anti-malarial drugs. Bayer and E. Merck are some of the major losers. The pharmaceutical sector, however, is likely to be affected to a lesser degree by hike in petrogood price, and in this respect it is on a par with ICE stock. But the ICE stock, because of its intense competition may have a “survival of the fittest” struggle and the fittest companies alone would survive. For the small investors who invest in the stock market for good dividend returns and appreciation on a long-term basis, this is no time to invest. The market has to slip lower in respect of “old economy” shares in particular. This class of investors must mark time to pick and choose good scrips. It is also important for such investors to watch the movement of these scrips, in which they have invested, regularly and book profit as the right time. It may also be necessary to sell off shares of companies which are not only doing well but are also not expected to do well in the near future. Recently, an analyst representing a FII investment firm has said that the FIIs are not interested in the old economy shares any more. |
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by R. N. Lakhotia Q. My only earnings are from agriculture and from interest from bank deposits. My income from Bank deposits is Rs 60,000 p.a. kindly advise whether I shall have to apply for PAN and submit annual Income Tax return. Whether I shall get the benefit u/s 80L. — L. Chauhan, Solan Ans.
You will enjoy the tax benefit u/s 80L amounting to Rs 12,000 from your bank deposit interest income of Rs 60,000 Therefore your net taxable income would be below the exemption limit. On these facts it is not necessary for you to apply for Permanent Account Number and submit your annual Income-tax return. However, we would like to recommend that it is always better to file your Income-tax return and obtain a Permanent Account Number. As you are having simple bank interest income you will not have any problem from the Income-tax department in completing your tax assessment. Q.
What is the tax liability of a ‘nominee’ who receives the amount on the death of the NSC holder. The nominee is already a Tax Payee. Also please clarify about other service benefits i.e. GPF, Gratuity, Ex-gratia Payment etc. in the hands of the nominee. — Datta, Chandigarh Ans. There is no tax liability on the nominee who receives the amount on the death of the NSC holder. However, after the date of death of the holder of NSC if any further amount is accruing as interest the nominee will be liable to tax in respect of such accrued interest amount. The service tax benefits received by the deceased person will be liable to tax exemption within the framework of the Income-tax law. The Income-tax return will be filed of the deceased person through the executor. It will be treated as if the service benefit accrued to the deceased person and accordingly Income-tax return showing taxable amount of the service benefits will have to be filed. Q.
Please clarify whether the increase in intt paid on housing loans from Rs 30,000/- P.A. to Rs 75,000/- P.A. under Sec 24 (1) is applicable only to housing loans availed after 01-04-1999 or it is also applicable to housing loans availed before 01-04-1999. — Chitkara Harjit Singh, Ludhiana Ans.
The increased deduction of housing loan of Rs 75,000 per annum is applicable in respect of housing loan availed on or after 1-4-99. Hence, in respect of housing loans availed upto 31st March, 1999 the deduction would be permissible only to the extent of Rs 30,000. Further as per the Finance Act, 2000 this limit has been changed to Rs 1,00,000 w.e.f. the financial year 2000-2001 relevant to the A.Y. 2001-2002. |
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PM for liberal aviation policy WITH a view to making India “an easier and happier” destination, there will be a liberal aviation policy. This is what Prime Minister Atal Behari Vajpayee assured the CII’s US-India Business Summit in Washington recently. What Mr Vajpayee declared at the summit has far-reaching implications. He, for example, announced that: “It would not be driven by a mere bilateral consideration of trade-off in slot-sharing. I am sure that this will help Americans and other foreign airlines to bring more flights and business to India”. Bringing more flights and business is one aspect of airlines operations. But what is of paramount importance to the Indian aviation is whether foreign carriers will be allowed to fly on domestic sectors. If this facility is allowed to foreign airlines, it would change the entire scenario of the aviation. Maybe, it will be worthwhile allowing foreign airlines to operate on domestic sectors since Indian Airlines are being disinvested. Crash inquiry The Patna air crash probe by Air Marshal P. Rajkumar is going on. AYC officials have deposed and cockpit voice recorder has been run and re-run. Findings have not yet been made but there seems to be an error of human fallibility in the crash. What the probe committee has pin-pointed is that length of runway at the Patna airport is restricted due to thickly populated residential areas, trees and electrical poles and non-availability of standard basic strips. All these cause problems to pilots taking-off and landing. The court of inquiry has further observed that the airport, maintained by the AAI, has local flying restrictions. All pilots are expected to maintain visual flights watch for flying club aircraft/gliders. In addition, the pilots have to exercise caution during landing and take-off owing to presence of birds in the vicinity of the airport. Trade-Wings The “wings on the Club” concept has been introduced by the well-known Trade Wings Tours. Passengers will be provided value-based services. Managing Director of Trade-Wings Tour Avinash Anand said: “We hope that about 5,000 members will join this elite club in the first year’. “We have several other promotional schemes to help the passengers enjoy their trips and make their flights comfortable”, said Mr Anand, who is currently the Vice-President of the Indian Convention Promotion Bureau. Postponed As no agreement could be reached at certain vital areas, including flight operations, the bilateral talks between India and Germany were postponed to early next year. Unlike Lufthanse, which continues to press for operating additional flights ex-India, Air India does not utilise any of its rights in the passenger sector owing to paucity of fleet. Expansion Sahara Airlines has established third base at Calcutta in addition to two existing bases in Delhi and Mumbai. The Calcutta base will provide daily morning and evening connections from Calcutta to Mumbai and Delhi. |
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HCL Technologies may follow Infosys WHEN my friend Sunil Sahani, a senior engineer engaged with Air India rang me up and told me that some analyst from Goldman Sach’s whom he watched on the CNBC stock show had seemed very bullish about the prospects of HCL Technologies, I told him I was worried. My personal viewpoint of FIIs and their investment skills are far from complimentary. Be that as it may, and as I told Sunil, well, they have it right this time around. HCL Technologies, a flagship company of the Shiv Nadar-led HCL group made a highly successful foray into the booming Indian primary market around a year ago to raise funds through the book-building process, making it the second company after the equally formidable Hughes Software Systems. HCL Technologies focuses its attention on operating in three niche areas — technical, networking and IT services. On the technicals front, it has embedded and application software product companies where it focuses on high growth industries, including financial services, telecom, manufacturing, healthcare, utilities,
transportation and Government services. The company has also tiedup with application product companies that service these industries. HCL Technologies provides networking solutions and IT services under its other two divisions where it has strategic alliances with a leading vendor of motor-vehicle systems technology in Europe, whose core expertise covers engine and fuel management technologies. The range of insurance applications covered include telemarketing, aviation, marine and farm insurance. HCL’s other collaborations include one with the world’s leading company in mission critical business software. This company is involved in developing, licensing and supporting more than 500 integrated products, including enterprise computing and information management, manufacturing and financial applications. It has a presence, almost throughout the globe, that extends across 9 software developments centres, 10 client-dedicated offshore development centries with 29 offices in 10 countries. Of course, there is scope for apprehension to the extent that it has a potential competitor in the form of its own group company HCL Infosystem, but having said that it must not be forgotten that notwithstanding this fact, the company has grown by leaps and bounds in its last five years of operation. As far as the financials of this company are concerned, they match up with the best in the business. HCL Technologies provides a composite range of value-added software led IT services to over 200 customers across the globe that include the likes of Cisco Systems, VDO Mansemannn AG, Toshiba, Hewwlett Packard, General Motors and so on. The company has indentified embedded software as one of its core future businesses and what is really noteworthy is that very few domestic companies have a foothold in this segment. The major strength of such companies lies in its marketing base, and that is where HCL Technologies scores. Now the company plans to grow through acquisition, besides organic growth, as there are inherent limitations of trying to expand one’s scope of business and spheres of influence through organic growth. Another crucial point that augurs well for HCL Technologies is the fact that they do not have client accounts that account for more than 5 per cent of the revenue indicating a very broad base, and furthermore repeat clients generate over 56 per cent of the total revenue. Overall thus, as I told Sunil, notwithstanding the late wake-up call by some FII’s we knew all along that the prospects of this company appear to be exceptionally bright and it should come as no surprise were this company to follow the footsteps of its illustrious predecessor Infosys Technologies and seek to list on the Nasdaq sooner rather than later. |
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Inflation dips Arena-17 Bisleri Svayam.com ITDC |
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