B U S I N E S S

RPL files 144 cr insurance claim
New Delhi, March 18
Reliance Petroleum Ltd (RPL) has filed an insurance claim of about Rs 144 crore for damage to installations and equipment as well as production loss at its Jamnagar refinery due to the killer earthquake in Gujarat.

• Bajaj Auto to cut costs

• StanChart seeks RBI nod

• J&K Bank plans mutual funds

Net safe for kids?
A child can be preyed on online 
Like the vast majority of parents I revel in the successes of my children. Every good grade is celebrated; every note in the homework diary that applauds effort or improvement is greeted with joy and pride.

Chip that unites wireless systems
San Francisco, March 18
Ashvattha Semiconductor, a radio frequency (RF) chip producer, claims it has figured out how to unite disparate wireless standards on one chip without compromising call quality.

Now ‘Silicon Hill’ in Pittsburgh?
Washington, March 17
Everyone’s heard of Silicon Valley in California, which is synonymous with hi-tech companies and software professionals. But now a move is afoot to name Pittsburgh as “Silicon Hill,” and the brain behind it is a young Indian American whiz kid.

Fee up, quality down
Worldwide, quality of service is linked with the price passengers pay for flying from one destination to another. The better the quality of service on ground and in the air, the more price passengers are willing to pay.

CHANDIGARH: I differ with the comments made by so-called real estate experts in a news item titled “Rents fall with slump in real estate” in Business Tribune on March 7. No doubt the investor wants to have a rental return of his property at least at the rate of his property at least at the rate of prevailing bank interest and may even settle for slightly less than that taking into account the appreciation factor of the property but in no case the rents are calculated according to the prevalling market price of the real estate.

MARKET SCAN

Political turmoil may check recovery
In spite of early recovery, the stock market is still ailing and it will take quite a long time to regain buoyancy. Perhaps, the worst is over but the Sensex may not cross 4100 points mark during the next couple of months. At present, the market has been put on artificial respiration. The “naked sales” have been banned and the market bears have been shackled; yet the Sensex was down by 136.16 points last week.

RPL files 144 cr insurance claim

New Delhi, March 18
Reliance Petroleum Ltd (RPL) has filed an insurance claim of about Rs 144 crore for damage to installations and equipment as well as production loss at its Jamnagar refinery due to the killer earthquake in Gujarat.

Reliance has claimed insurance worth about Rs 122 crore for damage to pipelines, civil works, instruments and loss of production to its 27 million tonnes Jamnagar refinery and about Rs 22 crore for damage to its Hazira petrochemical complex, industry sources said.

Bajaj Auto to cut costs

Bajaj Auto will soon restructure its marketing and sales operations and undertake cost-cutting measures as per recommendations of McKinsey.

“McKinsey has recommended measures for revamping our marketing and sales strategies as well as cost-cutting steps which we are studying and will implement within a few months,” Bajaj Auto General Manager (Corporate Finance) Sanjiv Bajaj told PTI.

StanChart seeks RBI nod

The Standard Chartered group has sought permission from the RBI to offer common products including credit cards, demat accounts and retail banking products, following its merger with ANZ-Grindlays.

The bank has applied to the RBI to offer common banking solutions such as demat accounts, credit cards, ATMs etc for the customers of ANZ-Grindlays and Standard Chartered, the bank’s Chief Executive (India), Harpal Duggal, told PTI.

Both the outfits combined have an individual savings account base of nearly nine lakh accounts, over 20,000 demat accounts, over 1,200 corporate accounts and nearly 11 lakh credit card holders, Duggal said.

J&K Bank plans mutual funds

Jammu and Kashmir Bank has tied up with US-based Metlife for life insurance joint venture and will soon apply to IRDA.

The bank has also got in-principle approval from SEBI for starting mutual funds.

“We have obtained the permission from the RBI for the tie-up with US-based company. We will apply with IRDA within two weeks,” bank Chairman , MY Khan, said.

On mutual funds, Khan said: “We are yet to finalise modalities and will come out with products in two months”. PTI

Net safe for kids?
A child can be preyed on online 
Oliver Owen

Like the vast majority of parents I revel in the successes of my children. Every good grade is celebrated; every note in the homework diary that applauds effort or improvement is greeted with joy and pride.

Over the years I have been extremely fortunate, as both my kids, Jemima and Zac, have worked hard at school and their reports make considerably happier reading than anything my parents were confronted with.

On the education front there appeared to be no worries. Or so I thought.

A couple of months ago Jessica, my wife, called me at work with the news that Jemima’s teacher had been on the phone and wanted to chat about our daughter.

Apparently things had slipped a bit. Homework wasn’t being done, corrections were being overlooked and there had been a big drop in standards.

Back in September we bought Jemima a computer game she had wanted for her birthday. It was called ''Babyz" and the object was to raise and care for virtual infants.

It provided hours of fun but it was also the catalyst for a sinister chain of events, the potential consequences of which don’t bear thinking about.

Jemima had been keeping up with her new-found Internet friends and in particular someone called Debbie. We’d heard a lot about Debbie. She said she was 11, Dutch and a graphics wizard. As Jemima’s site developed, Debbie had offered to create graphics and send them to my daughter for use on the site. What also came from Debbie was at first friendly chat.

Research to be published this week by the Home Office will show that one in five teenage Internet users receives a sexual solicitation or approach online. The study, carried out by the Internet Crime Forum, will also show that many children were exposed to `inappropriate conversations’, forced to listen to depraved fantasies or sent pornographic pictures.

Debbie might be an 11-year-old girl with a fertile imagination. She might also be a man who wanted to take things further, slowly deceiving my daughter or just getting his kicks as he typed, knowing that she would read it. Were the graphics what used to be the bag of sweets, the carrot with which to lure the innocent? We will never know, because how can you know who is on the keyboard at the other end?

Jemima clearly understands computers and hopefully some of the knowledge she has gathered will one day be put to good use. The Internet is unavoidable.

As a research tool it is vital, and as a means of communication it has revolutionised how we interact both at work and socially. A child of 10 today is going to go through life with this fantastic technology as a constant companion.

It is terrifying to think that while online a child can be watched and preyed on. Duped by a kind word or a hollow promise.

On occasion Jessica and I have been criticised by friends who are parents because we let Jemima and Zac walk round to the shop or down to the library.

But gradually they have to be allowed some independence and learn for themselves about the world beyond the front door and the school gate.

The frightening thing is that men you wanted your children to avoid might already be in touch with them right under your nose and in your own house. He could be in your computer. You just don’t know. The Observer 

Chip that unites wireless systems
Sukhjit Purewal

San Francisco, March 18
Ashvattha Semiconductor, a radio frequency (RF) chip producer, claims it has figured out how to unite disparate wireless standards on one chip without compromising call quality.

With this the Jacksonville-based company has set out to do what nobody else in the cellular market has been able to accomplish with one chip. Ashvattha, which means the banyan tree in Sanskrit, was founded in January 2000 and is headed by Indian American Guruswami Sridharan as the Chairman and President and his son, Kartik, as the CEO.

Kartik, 25, said Ashvattha has used its patented technology to design RF chips capable of transmitting and receiving GSM (global services in mobile), Blue-tooth and GPS (global positioning systems) standards. “Currently, no company sells products with GSM and Blue-tooth or even GSM and GPS on one device,” Sridharan said.

Traditionally the problem with combining these standards on a single chip has been that there is tremendous interference when they are used simultaneously, Sridharan said. To get around the problem of interference, RF producers use separate chips for each functionality in a product, he explained.

“By putting the standards on one chip — new opportunities open up,” Sridharan told IANS, adding that: “Imagine getting directions whenever you are lost from your cell phone. Or even buying Coke from a vending machine and paying for it through your cell phone.”

Moreover, the chip does not compromise call duration or quality, he said. “If we do all these great things, it would be useless if the talk time was only two minutes. But the talk times aren’t reduced with this particular chip even though we provide more functions,” he claimed. The product should be ready to be shipped by the end of the year.

Sridharan acknowledges there are number of those who say it can’t be done. “The only way to prove it is do it,” he said.

The father-son team brings a ton of RF integrated circuit experience with them. Kartik has a master’s degree in electrical engineering from Stanford University. He worked for Philips Research Lab and at the Advanced Systems and Applications Lab in the Netherlands. Guruswami held senior positions with both Conexant and Rockwell working with circuits and systems. In India he was the head of communication at Hindustan Aeronautic in Hyderabad.

Sridharan said he loves working along with his son. To which Kartik quipped, “He drives me crazy.” In the same breath he added, “The truth is that if we didn’t enjoy it — we wouldn’t be working together.”

It was Kartik’s mother, Sushila Sridharan, who suggested the idea for Ashvattha during one of her evening walks with her husband. Sushila holds a master’s degree in economics from Madras University and was also the manager of operations at another startup. “I guess she had a sudden fit of inspiration,” Kartik said. IANS

Now ‘Silicon Hill’ in Pittsburgh?
Vasantha Arora

Washington, March 17
Everyone’s heard of Silicon Valley in California, which is synonymous with hi-tech companies and software professionals. But now a move is afoot to name Pittsburgh as “Silicon Hill,” and the brain behind it is a young Indian American whiz kid.

Vinny Raj, the 21-year old native of India who was raised in Pittsburgh, Pennsylvania, is concerned that the city has the intellectual energy, institutions and track record to rank among the nation’s high-tech hot spots. What it lacks, he believes, is a reputation.

So Raj, CEO of Online Web Software, a partner company in iventurelab.com, an Oakland high-tech incubator, is crusading to brand the city as Silicon Hill, playing off the nation’s best-known high-tech mecca, northern California’s Silicon Valley.

He has sought the help of Pittsburgh Mayor Tom Murphy to promote his idea, and is seeking to enlist other local Indian American entrepreneurs to support his cause, according to the Pittsburgh Post-Gazette.

It’s not hard to find such support. The census estimates that the local Asian American population, which would include people of Indian descent, grew 59 per cent in both the city and Allegheny County the last decade, to 9,195 and 21,716, respectively.

Pittsburgh, with its rolling hills and picturesque lakes, is also very well-known among Indian Americans living in the USA for its famous Venkateshwara or Balaji temple, the oldest one of its kind in this country. It boasts of a spacious “kalyana mandapam” (wedding hall) and an auditorium where weddings and cultural programs are held, regularly attracting the Indian community from nearby states.

Already, more than 31 area business people with ties to the Indian subcontinent have signed on to help Raj and others create a local chapter of The IndUS Entrepreneurs, better known as TiE. It’s an association that allows entrepreneurs with roots or interests in India and surrounding countries to share their ideas.

“There are two things that are key for the local economy — immigration and entrepreneurship, and TiE brings both these things together,” said Sanjay Chopra, founder and former CEO of OnlineChoice.com. IANS

AVIATION NOTES

K. R. Wadhwaney

Fee up, quality down

Worldwide, quality of service is linked with the price passengers pay for flying from one destination to another. The better the quality of service on ground and in the air, the more price passengers are willing to pay.

Unfortunately, this does not apply to the Airports Authority of India (AAI) which keeps increasing fees without improving quality of service. The AAI has often raised parking and landing fees without improving its services.

From April 1, 2001, the passengers service fee has been hiked from Rs 125 to Rs 200. So far, this levy was only on passengers flying on the domestic sectors. Now this fee will also be paid by passengers travelling on international sectors, if the AAI circular is any indication. In other words, the international passengers will be required to pay under two heads — FTS (Foreign Travel Service) and passenger service fee.

The fee, according to AAI sources, has been hiked to enhance security and improve maintenance of airports. Three years ago, the fee was Rs 70 which was increased to Rs 125.

The expenditure of security at airports has increased enormously because there is duplicity of forces deployed. Apart from the Bureau of the Civil Aviation Security, there will now be the Central Industrial Security Force and also the local police. What is cause for concern is that there is little understanding among officials of these agencies.

About sky marshals on sensitive routes, there is no unanimity yet. Cock-pit crew and cabin crew feel that sky marshals may be a hinderance instead of any help when there is an emergency on board the flight.

On the last hijacking of the Indian Airlines Flight from Kathmandu on December 24, 1999, it was cabin crew who pacified the ‘reactionaries’. The service of the hostesses on this ill-fated flight was remarkable.

The hygiene at international arrival hall is far from satisfactory at Indira Gandhi International Airport. Passengers using toilets have still to demand for ‘paper’ from the ‘caretakers’. Airline officials and members of the AOC (Airline Operators Committee) have often lodged complaints.

Cathay Pacific

Cathay Pacific will start operating its flights from Delhi to Hong Kong and back. The inaugural flight will be on March 27. There will be four frequencies a week on this busy sector.

The airline has been allowed to increase its capacity by 1250 seats a week following a recent air services agreement. The Civil Aviation Ministry and the DGCA have permitted Cathay Pacific to fly ex-Delhi in addition to Mumbai. The airline can also fly to two other destinations, that is, Kolkata and Bangalore. “We are contemplating on expansion”, said airline official.

Cathay Pacific airline will have its own fares. Initially, the fares will be “promotional”. Analysts feel that the airline will have ‘very competitive’ fares to woo passengers.

The capacity will further increase as United Airlines enter into fray from April. UA will also operate a daily flight to Hong Kong. Air India flies into Hong Kong five times a week.

The analysts feel the fares will be reduced or there will an additional quantum of discount through agents. The capacity on this sector will be so large that the airlines will have to make special efforts to secure share in the cut-throat passenger market.

TAX & YOU

R. N. Lakhotia

Q: I have purchased CBI MF Magnum Gifts’ 92 Scheme for Rs 10,000 under Section 80CCB in the year 1991-92. I got the redemption of the scheme on 12.4.2000 for Rs 33,790. Out of this, Rs. 2,200 was deducted as income-tax on the face value and I was paid Rs. 31,590 by the SBI MF.

Kindly let me know the tax liability on Rs. 31,590 which I actually received. 

— T. R. Verma, Mohali

In respect of the investment made in the Mutual Fund for which you had the tax benefit u/s 80CCB in the previous year you will be required to pay income-tax on the same amount. Thus, the sum of Rs. 10,000 will be deemed to be your income of the financial year 2000-2001 and the same will be added with your other income. You will, therefore, be required to pay income-tax on this amount.

The rate of tax on this amount will, however, depend on what your net taxable income is. The tax deducted at source of Rs. 2,200 will be deducted from the net tax payable by you. Thus, if you are coming within the net taxable slab of less than Rs. 50,000, then there will be no additional amount of income-tax on the redemption amount so received by you. If, however, your net taxable income is in excess of Rs. 1,50,000 then you would be required to make payment of income-tax @ 30% + surcharge of 15% + 2% addl. S.C.

Thereby you will be called upon to make additional payment of income-tax after deducting the tax deducted at source on this amount of Rs. 10,000. The balance amount received in respect of the above Mutual Fund will be exempted from income-tax as per section 10(33) of Income-tax Act, 1961.

Q: I am employed with a bank and my wife is also employed with the same bank. I want to purchase a piece of land and build a house thereon. My wife and I both shall contribute towards the money with which we shall purchase a piece of land. For construction, both of us will raise loan jointly from the bank. Interest on housing loan is deductible from salary. It is known to us. It is also known to us that we can claim rebate on the amount of repayment made towards housing loan principal amount upto Rs. 20,000 in a year. Is it permissible under the Income Tax law that both of us are able to get 50 per cent of the total interest amount deducted from our salary and both of us get rebate for Rs. 10,000 each in a year under section 88 of the Income Tax Act, 1962 regarding the repayments towards principal amount of housing loan? Please guide.

— Ashok Kumar, Ambala City

You will be happy to note that as the property is being purchased jointly by you and your wife and the financing of the property as it appears from your question has been separately made by both of you, both of you will be eligible for separate tax rebate u/s 88 to the tune of Rs. 20,000 each. Similarly, in respect of interest payment each one of you will be eligible for deduction on account of interest payment for house property to the extent of Rs. 1,00 lac each. The joint purchase of the property with individual fund is good from tax planning point of view.

Q: Account of M.A.C.T. awarded certain amount of compensation to a minor children in an accidental death of their father. The judge ordered the Bank to pay total amount to girl child after obtaining the permission of the court.

Please let us know whether the interest accrued on the said deposit is to be clubbed with the income of mother or not when she has nothing to do with that money. If not, can mother claim refund of T.D.S. What is the way.

— R. L. Gupta, Solan

The interest accruing on the compensation amount will be clubbed with the income of the father or mother who is having higher income. However, the compensation amount will be exempted from income-tax.

COUNTER POINT

R. P. Malhotra

CHANDIGARH: I differ with the comments made by so-called real estate experts in a news item titled “Rents fall with slump in real estate” in Business Tribune on March 7. No doubt the investor wants to have a rental return of his property at least at the rate of his property at least at the rate of prevailing bank interest and may even settle for slightly less than that taking into account the appreciation factor of the property but in no case the rents are calculated according to the prevalling market price of the real estate.

However, the reverse may be true i.e. the rate of the real estate may fall with the decline in the rental return and on the contrary the rents never come down with the decline in the value of real estate. Rather these are affected by the ratio of the availability of accommodation and the tenant. Clearly a demand and supply factor.

The availability of the accommodation in and around Chandigarh has increased multifold in the recent times affecting the rental value of the real estate in a long way. Unchecked, haphazard growth of unauthorised construction of colonies around the capital in the adjoining states of Punjab, Haryana and Himachal, widespread housing development schemes by government housing agencies in their respective states in the region to earn revenue and the multistoreyed flat culture of group housing schemes are the other valid factors which have resulted in increasing the easy availability of accommodation attributing towards lowering the rent rates of the real estate in the region.

Better rental prospects in S.A.S Nagar are partially due to better investor friendly policies as compared to the neighbouring states, such as the apartment act and the investor friendly Rent Act. After reeling under terrorism for year till 1995, SAS Nagar is now showing a healthy upward trend in real estate with having better law and order control as compared to its neighbouring counterpart, the city of panchkula.

Moreover, a moderate and justified rate of stamp duty, as compared to its both neighbouring towns i.e., Chandigarh and Panchkula, is also acting as booster to give it the upper hand in an otherwise sluggish market.

The Rent Act and other investor-friendly policies such as the extension of the Punjab Apartment Act to UT Chandigarh and simplifying the freehold conversion and transfer policy, which may enhance the availability of an affordable accommodation to the largest section i.e. lower strata of society, may further lower the rent rates.

Decreased rental returns may further lower the highly escalated real estate prices, which may result in giving a boost to the real estate trade in the long run because more the affordability more the business.

MARKET SCAN

J. C. Anand

Political turmoil may check recovery

In spite of early recovery, the stock market is still ailing and it will take quite a long time to regain buoyancy. Perhaps, the worst is over but the Sensex may not cross 4100 points mark during the next couple of months. At present, the market has been put on artificial respiration. The “naked sales” have been banned and the market bears have been shackled; yet the Sensex was down by 136.16 points last week.

What is the evidence for this pessimistic view? The politics is eating into the vitals of economics and unless normality is achieved in the political situation in our country, there cannot be any substantial recovery in the stock market. The Opposition is not allowing Parliament to function. Budget proposals have still to be approved and some of its recommendations may be whittled down. The Balco crisis still simmers and it is quite probable that the disinvestment of PSU policy may be further delayed and partially diluted.

Elections to the Vidhan Sabha in some states are due to be held in April and political turmoil will become even more intense during the next four weeks or so. The BJP-led coalition government is already on the defensive and is not in position to provide any positive lead to the country in matters of economic policy.

There is also a bad news on the industrial front; the Index of industrial production in January is lower than 3 per cent. It appears that all is not well with our economy. It is, however, possible that this is a temporary set-back and the industry recovers in the coming months and the rate of growth touches at least 6 per cent.

The ICE stock led the mild recovery that came in the stock market last week and FIIs were the main buyers. Further recovery in the ICE stock is unlikely partially due to the disturbed and uncertain political situation in the country and partially due to the slowdown in the US economy.

There is, however, some good news for the shareholders of Karur Vysya Bank. The company has declared a bonus issue in the ratio of 1 for 1 share held as well as a rights issue in the same 1: 1 ratio. It appears that the rights issue will apply only to pre-bonus share holding of the share holders.

The rights will be issued at a premium of Rs 35 per share, that is, at Rs 45 per share. The company declared a dividend of 60 per cent last year, and it is almost certain that the dividend rate will be maintained even after the bonus and rights issues. Some months back, the equity share of the company was quoting around Rs 200 but now it is available in the Rs 335-350 range.

Aksh Optifibre had declared its months results in January along with the results of the first 10 months. This month, the company has announced its monthly results for February, 2001. It is a welcome move and it is hoped that the company will maintain this practice and that the corporate sector will emulate it.

Its net profit for February is Rs 171.73 lakh (after tax) and the total net profit for the first 11 months is Rs 1419.60 lakh on an equity capital of Rs 1101.89 lakh. The order-book condition is also very good.

Last year, the company had declared a net profit of Rs 533.51 lakh for the full accounting year ended March 31, 2000 on equity capital of Rs 702.15 lakh.

BIZ BRIEFS

Schwabe showroom in Yamunanagar
Chandigarh, March 18
Schwabe India, the Indian arm of the Germany-based homoeopathy company, Dr Willmar Schwabe Arzeimittel, has opened a showroom at Yamunanagar. The showroom, inaugurated by Mr Aurovindo Verma, Manager of the company, will serve as a one-stop shop for Schwabe’s medicines manufactured at the company manufacturing facility at Noida. TNS

Inflation falls
New Delhi, March 18
The annual inflation rate fell sharply over 1 per cent to 6.45 per cent for the week ended March 3 despite a marginal fall in the prices of primary and manufactured articles. The inflation fell by 1.08 per cent from the previous week’s level of 7.53 per cent. The index was 5.01 per cent a year ago. PTI

FII net buyers
Mumbai, March 18
FIIs net investment in equity and debt market stood at Rs 950 crore during the week ended March 16. According to SEBI’s trend on FIIs investment, the FIIs purchased equities for Rs 1,976 crore during the week as against its sales for Rs 998.9 crore. UNI