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| Sunday, November 12, 2000, Chandigarh, India   
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Funds sanctioned by WB misused? Pak seeks tie-up
with arms makers
SSI units can club together |
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APEC stand on oil CII opposes
interference in industry ‘Flight to fortune’ scheme In the wonderland of investment
Let CBI now turn to ‘fixers’ in market
Things fall apart, courts can’t hold
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Funds sanctioned by WB misused? LUCKNOW,
Nov 11 (UNI) — World Bank President James. D. Wolfensohn today said community participation and people’s demand can keep an effective check on the implementation of the schemes sponsored by the bank in Uttar Pradesh and other states. “We have confidence in the transparency of the government system”, Mr Wolfensohn told reporters here today adding “however, we too would monitor the schemes in assistance with the government of India”. On a
query whether the funds sanctioned by the WB were being misused, he said that people in a democratic set up had all the rights to know about the schemes meant for them and it was their duty to check the irregularities. The World Bank President said that people should be more demanding in a democracy in order to keep the government and their officials always on toes. On the increase in
unemployment following globalisation in the country, Mr Wolfensohn said any developing country could not afford to shut its doors but certainly the hurdles in the way would have to be countered. “Exports should be enhanced keeping global competition in mind while there should also be better management to shield those affected by globalisation”, he added. He said India’s achievements in the field of Information Technology had proved that the country had
benefited from globalisation. In reply to a question, he said the transfer of money meant for welfare schemes to the establishment fund of the government was a problem that existed not only in up but in other states too. Asked about the rise in unemployment due to de-industrialisation in the country, the
WB president said “we cannot take the responsibility of government lapses. Only the government would have to see the reasons behind the problem”. On the large number of unfilled vacancies for teachers, he maintained that it was better to have an expert teacher than numerous without any experience. “We have already seen that teachers at several places were only on payroll.” Claiming that projects of the
WB were yielding fruitful results, Mr Wolfensohn said the schemes on education, health etc were especially successful in the state. The
UNESCO award to the state in the field of literacy was enough proof of this, he added. Reacting to the general feeling that the
WB dictates its terms on the government for the sanction of schemes, he said “we only give advice to the government for transparency in the implementation of schemes. It was up to them to accept it or not.” |
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Pak seeks tie-up
with arms makers KARACHI, Nov 11 (DPA) — Pakistan is seeking joint ventures with foreign arms manufacturers by exhibiting its defence industry potential in one of Asia’s biggest arms displays in Karachi starting November 14. “We are now in a position to go for joint ventures with manufacturers of arms of developed countries, who are coming to ideas 2000 next week,” Major General Syed Ali Hamid, chief coordinator of the exhibition told Deutsche Presse-Agentur today. This exhibition will also pave the way for exploring the export potential of the country’s defence products. “We are aiming to increase our defence product exports to $ 500 million in next five years,” the General said, adding that at present Pakistan exports defence-related products to the tune of $ 50 million only. “The government has decided to create ‘defence export department’ separately to achieve the goals through this big international show, which will last four days,” Hamid said. “The venue will provide a good opportunity to some 40 countries and manufacturers of arms from across the globe to see the products, explore joint ventures possibilities and look for their defence needs,” he added. Pakistan’s latest surface to surface missiles Ghauri and Shaheen with the capability of carrying nuclear warhead, main battle tank Al-Khalid and other military hardware produced in Pakistan would be on display. Other products include radar, trainer aircraft, anti tank and anti-aircraft missiles, small weapons and ammunition. However, the General said, “Ghauri and Shaheen missiles would not be offered for sale.”
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SSI units can club together IT is a sort of trend these days to talk about WTO. Industry is asked to face the global competition. Industry is ready and is competent to meet the challenge provided the business environment is made conducive. There are various policy matters, leave alone the implementation of a maize of laws: which need correction for the smooth working of the industry. Government of India intends to support SSI sector so as to enable it to maintain its viability and strength so as to be effective in (a) promoting in a harmonious manner the industrial economy of the country and easing the problem of unemployment (b) securing that the ownership and control of the material resources of the community are so distributed as best to sub-serve the common good. There are lofty ideals indeed. But in practice this sector has to face undesired policy hurdles. Punjab has the largest concentration of SSI units which have succeeded remarkably. This is not due to protection but with a better pattern of working. SSI units are generally so carved out as to produce one article on a massive scale. Even for some products various processes are done by separate units. This net-working has given dividends. As per Government of India’s policy SSI units can be clubbed together and if the investment of the clubbed units is more than the prescribed limit the units lose their status of SSI unit. As a general pattern we have a joint family structure. If a progressive family has more than two or more SSI units it is natural that all family members shall have proportionate interest in all units. This is the effective way to keep the joint family business intact. It has been observed in some cases that where individual member has exclusive control of a unit that unit becomes the cause of division of the family. Many a time such separations make the entire family business sick. There is a unique way of ensuring efficiency in a joint family business. Each person is given a specialised job common to all the family units. This ensures economy of operation with better results. SSI units can not afford highly paid professionals for this purpose. So from this angle too each family member has to have a proportionate share in all the family units. Provision of clubbing is resulting the destabilising this structure to the detriment of this vulnerable sector. Government of India should reconsider this aspect again and allow the participation of family members and like minded friends in more than one unit without clubbing the investment. Clubbing provision also results in heavy burden of Central Excise. Along with the removal of policy hurdles there is lot which need to be done to ensure the existence of SSI sector on the face of stiff competition. Organisations like NPDC and the Technology Bureau for the Small Enterprises (TBSE) are providing information and bringing industry and research institutions closer to participate in mutually beneficial collaborations for technology transfers. Now a new initiative has been taken by TBSE which attempts to harness the power of internet for the SME sector. Exclusive technology site for SMEs will make technical material available on the Net and also enable users to down load information. This venture has been undertaken jointly by TBSE; SIDBI and the Asia Pacific Centre for Technology Transfer (APCTT), a UNESCAP outfit. TBSE has compiled an elaborate list of over 1000 technology offers which shall be available on site. These offers are from across the globe. Government should give push to such proposals to keep the SSI sector abreast of latest
developments.
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APEC stand on oil BANDAR SERI BEGWAN, Nov 11 (AFP) — Asia-Pacific leaders are set to call on oil producers to boost supply as the price of crude reaches levels not seen since the 1990 Gulf War, a senior APEC official said today. The region is unlikely to face a new inflationary spiral linked to the soaring prices, but oil-dependent economies such as South Korea could be hurt, warned a report by the Asia-Pacific Economic Cooperation forum’s economic committee. “In the upcoming leaders’ summit, they will discuss the oil price issue, and it is possible that leaders and ministers will call for an increase in oil supply,” the committee’s Chairman, Mitsuru Taniuchi, said. Leaders of the 21-member APEC group, including US President Bill Clinton, will hold a two-day summit from Wednesday in oil-rich Brunei. “Higher oil prices, if sustained, could pose a downside risk on the generally positive outlook of APEC economies through next year,” Taniuchi’s report said. |
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CII opposes
interference in industry NEW DELHI, Nov 11 — CII today strongly voiced against political interference in industrial relations. “Political interference in industrial relations issues must be avoided at all costs,” the CII president, Mr Arun Bharat Ram, said. “Politicisation of industrial relations problems must cease, and
haply, has been on the decline. This is the only way to ensure a healthy and positive investment climate in the country,” the statement said. He said “running to government for intervention or to political leaders of different political parties must not be a course to follow.” CII said if there are industrial relations problems, it should be left to the employees and the employers to resolve the issue.
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‘Flight to fortune’ scheme CHANDIGARH, Nov 11 — Investsmart India has announced a promotion scheme to initiate Jet Airways passengers to the world of “Smart Investing”. A one-month promotion called “Flight to Fortune” is being run on all Jet flights across the country. The participants will have the opportunity to win a portfolio of blue chip shares worth Rs 7 lakh. Investsmart also plans to educate the fliers on the finance and investing scenario through a series of articles on “Smart Investing” being published in the in-flight magazine of Jet Airways, informed Mr Umesh Sood, Branch Head, here. Investmart launched on-line trading in February this year on their website www.investsmartindia.com. |
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In the wonderland of investment Q: You have stated that ICICI Bonds OR IDBI Bonds are better than PPF account but in my opinion PPF account is better as the interest @ 11% earned in PPF account is totally exempt from income tax besides rebate us 88. Whereas the interests earned in ICICI Bonds is not totally tax-free. Elucidate whether interest earned in UTI, ICICI, IDBI Bonds is taxable or not. Please inform some other schemes of investment where return is totally tax-free as I am income tax payee and want to invest money in such schemes where interest or dividend is totally tax free. — Mr D.R. Kalra, 284 Veer Colony, Bathinda 151005 A:
ICICI/IDBI bonds can be used by depositing Rs 80,000 (or whatever necessary for bringing the tax to nil level) per year for only 3 years. In the fourth year you can use the redemption amount of the first year for your day-to-day expenses and deposit Rs 80,000 in the bonds from your income chargeable to tax. This allows you to earn the valuable rebate for your entire lifetime with an outlay of only Rs 2.40 lakhs. This strategy is most useful for those who find difficulty in making full contribution to avenues u/s 88. Such persons can either pinch themselves a little during the initial phase of 3 years or start contributing full might from fourth year and onwards. Then again, in view of the possibility of an assessee earning more than 11% tax-free (=after-tax) from Pure-growth, Open-ended, Debt-based schemes (PODs) of UTI/MFs one should withdraw as much as possible, as soon, as possible from PPF and switch over to PODs. True, this position may not last long because the government is trying to pull the interest rates down artificially but with little success. Those who do not have a PPF account at present should open one and keep it alive with a contribution of only Rs 100 per year just in. IT case PPF interest is brought back to 12% in this regime of going backward, going forward. Q:
1. I purchased BOI Double Square Plus 40 bonanzas for Rs 4,000 in September 90 and now in September 00 (after 10 years) I have got the redemption amount of Rs 16,000. What will be my income tax liability towards profit of Rs 12,000 and how I will show it in my IT return? 2. The interest earned in GPF a/c is always automatically reinvested in every years statement. Should I claim tax exemption @ 20% u/s 88 for that amount? — Amandeep Gargi, amangargi@glide.net.in A: 1. This will be treated as long-term capital gains. The cost of inflation index of FY 90-91 was 182 and that of FY 00-01 is 406. Your indexed cost is therefore Rs 8,923 (-4000 * 406/182). Your long-term capital gain is Rs 7,077. You may therefore either pay tax of Rs 1,415 @ 20% of 7077) or contribute Rs 7,077 to avenues covered u/s 54EC. 2. The interest on GPF is totally exempt. In other words, it is not considered as income for tax purposes. Therefore, you will not be allowed to claim the interest reinvested because all contributions to Sec 88 should come out of income chargeable to tax. Q: Can I get the deduction U/s 80 DD to be considered for TDS from my “Salary”? —mps@bom4.vsnl.net.in A:
Every year the CBDT issues a circular giving comprehensive guidance to the employers. This year’s Circular 781 dt 5.11.99 stipulates that deduction u/s 80DD should be taken cognisance of — “if the employee furnishes a medical certificates from a government hospital and also a declaration in writing duly signed by the claimant certifying the actual amount of expenditure on account of medical treatment (including nursing) training and rehabilitation of the handicapped dependent and receipt/acknowledgement lodgement for the amount paid or deposited in the specified schemes of LIC or UTI.” Now, comes my difficulty. The ITA stipulates that Deduction u/s 80DD is statutory in nature and is allowed in full, irrespective of the actual expenditure incurred on medical treatment! It appears CBDT has clipped some where. I strongly feel that since DBDT has authority to only to interpret and clarify the Act. I cannot override it. Therefore, the employers need to have a certificate from a government hospital regarding the nature of handicap of the dependent and not the expenses incurred. |
Let CBI now turn to ‘fixers’ in market LAST week, when the Sensex was around 3600 odd points, I had said that a market rally could be round the corner and had promised to tell you the reasons why I thought so. For starters, the risk-return profile had turned distinctly beneficial with the downside seemingly around 200 odd points while the upside looked to be around 1000 odd points. Then, with the US elections drawing to a close and a new President ready to take over Clinton’s prosperous mantle, it is widely expected that the US markets would look up and don’t we all know of its mirror effect on the Indian bourses. Last but not the least, the Indian bourses have this amazing propensity to bounce back very sharply every time it looks down and out for the count. Historical evidence has repeatedly proven that the health of the secondary market is invariably correlated to that of the primary market, and prudent investors would have seen the writing on the wall as early as March, before the by now, infamous stock market post-budget crash of April, 2000. That the markets have never really recovered thereafter is proven by the recent fate of two excellent IPOs namely Aztec Software and IT&T which just about scraped through. Interestingly, Creative Eye whose book-built IPO had elicited a miserable response a couple of months ago prompting it to have the dubious distinction of withdrawing from the market, is now foraying back into the market, albeit with a substantially discounted price tag which actually enhances its investment worthiness. Hence, it is quite evident that the key to any major market revival lies as much in a primary market revival as in FII inflows or operator machinations. Reverting to Indian pharma companies, another company which our team closely monitors is Zydus Cadila. Its half yearly performance has been impressive and its bottomline growth of 60 per cent over the corresponding period of the previous year merits attention. The company’s focus on therapy management has helped it to outpace the industry growth rate of around 10.7 per cent and grow at a much healthier rate of around 15.4 per cent. A closer scrutiny indicates that this enhanced growth rate has been enabled by the company’s new launches in the cardiovascular, gastrointestinal, anti-inflammatory and anti-infective segments. The company’s joint venture investments in Sarabhai Zydus Animal Health and Recon Healthcare too have already begun yielding results and this augurs well for its prospects. With the CBI report on cricket match-fixing finally being released, it seems that many of the “fixers” have now been nailed. Well, such an event seemed impossible till even around a year ago. Now that it has happened, maybe we could hope that sooner rather than later, the CBI could also be persuaded to look into “market fixing” of the variety that was witnessed a year ago when a bull run that defied all logic materialised and vanished almost out of the blue. Someday perhaps ! |
by Pushpa Girimaji Things fall apart, courts can’t hold THERE is bad news for consumers. The latest data compiled by the Union Ministry of Consumer Affairs on the functioning of consumer courts in the country indicate that the percentage of cases decided by the District Forums within the stipulated 90 days has come down from 32 per cent in 1998 to a dismal 24 per cent! The ministry, which collects statistics on the various parameters governing the working of these courts, presents to the Central Consumer Protection Council (CCPC), a status report for reference. Constituted under the Consumer Protection Act, the CCPC brings together ministers and secretaries in charge of consumer affairs in all the States, Members of Parliament and consumer representatives, to formulate policies in the interest of consumers. As per the latest report presented to the CCPC at its meeting on November 8, the District Forums had disposed of 81.80 per cent of cases, but the percentage decided within 90 days had come down to 24.9. The State Commission had settled over 58 per cent of the cases and the percentage of complaints resolved within 90 days was only 20.8 Considering the fact that inexpensive and speedy justice is the raison d’être of the parallel consumer justice system and the Consumer Protection Rules say that as far as possible cases should be decided within 90 days, the low percentage of cases decided within that time limit is a cause for concern. More so, when compared with the previous data presented to the CCPC in October 1998, according to which 32 per cent of the cases had been decided within 90 days by the district forums and 24 per cent by the state commissions. On the basis of the feedback received from the courts, the Consumer Affairs Ministry has also analysed the reasons for the poor functioning of the courts. These are: (a) Delay in the appointment of Presidents and members of the courts, (b) poor pay and facilities to the members (c) inadequate budgetary provisions for the courts, (d) lack of infrastructure facilities, (e) infrequent interaction between the state commissions and the district forum for monitoring the disposal of cases, (f) inadequate and inexperienced secretarial staff (g) absence of additional forums to tackle the increasing load, (h) frequent and long adjournments (I) lack of drive to liquidate pendency (j) failure to hold sittings on all working days and full working hours,. (k) delay in issuing show cause notice to the opposite party and (l) delay in passing orders after completion of hearing . The state governments have to take the rap for most of these causes of delay. In fact from the very beginning, the states have shown nothing but reluctance to implement the law. Even today, very few states have understood the importance of the legislation or the need for its effective enforcement. Since delay in the appointment of members and presidents of these courts invariably bring to a standstill the functioning of these courts, the consumer affairs ministry has also been monitoring this. Accordingly 54 district forums, out of a total of 555 are non-functional. In Bihar, out of 55 district forums, eleven were non-functional (March 2000) In Madhya Pradesh, out of 61 forums, 19 were non functional as on June 2000. However, it must be said here that unlike other states, MP has constituted additional district forums in many districts - there are 61 forums for 45 districts in the State (June 2000). In Uttar Pradesh, 15 out of 87 district forums were not working. (March 2000) One has to see whether these courts function better in the new States of Jharkhand, Chhattisgarh and Uttaranchal The Centre is also guilty of contributing to the delay by not providing for additional benches of the State Commission and the National Commission through an amendment to the law. The Consumer Protection Act of 1986 provided for a district forum in each district, a state commission in each state capital and a national commission at the centre. As the number of cases filed before these courts increased, the law was amended to make way for additional forums in each district. However, a similar provision was not made for constitution of benches of the State Commissions and the national commission to facilitate speedy disposal of cases and the amendment is pending for a long time. Out of 20,622 cases filed before the National Commission, only 11185 (54.2 per cent) cases have been disposed so far and 9437 cases are pending. Similarly, the State Commissions have been able to dispose of only 59 per cent of the cases. A total of 15,69,421 complaints have been filed before these redressal agencies so far, out of which 12,34,183 cases have been resolved. Will the situation only get worse in the coming years? Will the consumer courts become like civil courts? “You and I will not allow that to happen” said the Union Minister for Consumer Affairs and chairperson of the CCPC Mr Shanta Kumar, responding to such fears expressed by the members. On that optimistic note I conclude. |
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by Praful R. Desai Claim for gratuity
Q: Can the factual finding by appellate authority regarding completion of 5 years’ service be interfered with? Ans: Madras HC in Management of New Jayalakshmi Vilas v Joint Commr. of Labour [2000-II-LLJ-787] expressed the view thus: The 2nd respondent claiming that he is the employee of the appellant and worked for more than 5 years moved the authorities under the Payment of Gratuity Act, claiming payment of gratuity. The first authority rejected the claim of the 2nd respondent as if he has not completed 5 years’ of service as contemplated under the Act. The Appellate authority held that the services of 2nd respondent would have been taken as he had completed his service of 5 years and so he is entitled for gratuity amount. Challenging that order before the HC, the learned Single Judge rejected the same and hence the present appeal. Appellant submits that when 2nd respondent has admitted during the course of examination that he joined the service only on 1.8.92, afresh with the appellant and so he cannot claim any gratuity as he has not completed 5 years’ of service. This submission, in the opinion of the HC cannot be accepted in view of the factual finding given by the appellant authority and the learned Single Judge of the HC to the effect that the 2nd respondent had completed five years’ of service. The HC therefore saw no reason to interfere with the same finding and hence finding no merit in this appeal, dismissed the same. |
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ITI Faridabad VLCC Tata Engg TechnoCampus Monalisa Info FAI chief |
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