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Sunday,
June 24, 2001, Chandigarh, India  
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WTO: need
for a proactive agenda SREI Intl
net up 25.47pc
Cut in
duty drawback hits bicycle exports Malaysia
Airline for more operations |
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WorldVisas
opens unit in city GoM to
moot long-term grain policy WagonR
Mile-edge event today Approval
of dismissal ICICI
bonds issue unexceptional Q. We are engaged in the business of
manufacture and sale of machinery, its parts and accessories being a
dealer registered under the provisions of the Haryana General Sales
Tax Act, 1973 and the Central Sales Tax Act, 1956.
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WTO: need for a proactive agenda While the rhetoric of opposing the WTO may serve some political purpose, what is actually desirable is that the Punjab Government present a definite action plan to the Central Government for enabling the agriculture sector in the state to become more remunerative and globally competitive. For the purpose, there is need for a proactive agenda aimed at giving the agriculture sector in the state an export thrust, protecting the farmers from the possible onslaught of cheap farm imports, securing greater market access for our agricultural produce by pressing the developed countries to bring down their high levels of domestic support and export subsidies, and securing further flexibility for providing subsidies to key farm inputs for agricultural and rural development to protect our food and livelihood concerns. All this can be achieved while staying within the ambit of the Agreement on Agriculture (AoA) of the WTO. Considering the fact that it is neither desirable nor probable that India would pull out of the WTO, which presently has 140 member countries with many more including China-waiting in the queue to gain acceptance, our strategy should rather be to extract the maximum out the liberalised trade regime in the agriculture sector. Agriculture, being an area of our core competence, affords a lot of opportunity for us to be a major player in the world agriculture trade. However, there is a real danger of this opportunity slipping out of our hands if we continue to concentrate our energies merely towards opposing the WTO. It is quite an irony that India was, in fact, one of the leading developing nations to advocate that agriculture should be brought within the purview of WTO. The objective was to ensure greater market access for our farm produce in the developed country markets. But today, one hears voices of protest from various farmers’ lobbies and also political outfits against the WTO and the AoA. The decline in the prices of agricultural products in the recent past is also often attributed solely to India’s entry into the WTO and large scale cheap farm imports. There is no denying the fact that the expected gains for the developing countries, from trade liberalisation in agriculture under the AoA, have not come about. There have been no significant reductions in domestic support as well as export subsidies by the developed countries in the last six years of implementation of the agreement. The developed countries have often resorted to measures like circumstances of export subsidy commitments and usage of TRQs (Tariff Rate Quotas) in an arbitrary and opaque manner. These have certainly been detrimental to the interests of the developing countries as also to be spirit of the AoA. Nevertheless, it would be grossly incorrect to pin the blame for everything wrong with our agriculture sector on the WTO. The apprehensions that on the removal of quantitative restrictions (QRs), the Indian market would be flooded with imported agricultural goods are certainly not without reason, but pulling out the WTO is not the answer to the problem. What is required is constant vigil followed by prompt corrective action and we have enough tools to protect our domestic farmers against any import onslaught. Tariffication, for instance, is one of the primary tools. India has bound its tariffs at 100, 150 & 300 per cent for primary agricultural products, processed agricultural products and edible oils respectively. At present, the applied tariffs, in case of majority of the items, are much below this level thus giving us enough leverage to protect our domestic produce. Besides, the country can resort to anti-dumping duties and countervailing duties. Safeguard Action can also be taken when there is a surge in imports causing or threatening to cause serious injury to the domestic industry. Recently, the Central Government has permitted initiation of anti-dumping measures against cheap import of agricultural items. The aggrieved parties can approach the Director General of Anti-Dumping and Allied Duties (DGAAD) for protection from such imports. The state government would do well to create a cell in its Ministry of Agricultural, which would assist farmers’ bodies to identify such threats and prepare the necessary documents to be presented to the DGAAD. This would certainly go a long way in protecting the interests of our farming community. The Central Government has already initiated certain measures, with the Commerce Minister announcing, in his Exim Policy statement, the setting up of Agri Economic Zones and making these Zones the ‘Regional Rural Motors’ of Indian export economy. The ball, now, is in the court of the state governments and Punjab should take a lead in grabbing the opportunity and in giving the agriculture sector in the state a major export thrust.
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SREI Intl net up 25.47pc SREI International Finance Limited, the only Indian NBFC in which International Finance Corporation and DEG of Germany hold 20 per cent equity, today announced 25.47 per cent jump in net profit during the financial year 2000-2001. “Despite not so encouraging industrial market, we managed to secure a net profit of Rs 11.87 crore against Rs 9.45 crore last year. “This was due to lower capital expenditure, effective cost control, increase in the overall productivity and efficiency of the human capital,” SREI Managing Director Hemant Kanoria told reporters after a board meeting to consider financial results. The operating profit escalated to Rs 15.35 crore from Rs 13.97 crore while business jumped by over 80 per cent from Rs 225 crore last year to Rs 450 crore in 2000-2001, he said. Net income increased by 38.5 per cent to Rs 205 crore from Rs 148 crore in the last financial year, Kanoria said. Adani exports Ahmedabad-based Adani Exports Ltd has posted a 6.59 per cent rise in net profit at Rs 118.30 crore for the financial year ended March 31, 2001 as against Rs 110.98 crore for the previous fiscal. The board has recommended a 30 per cent dividend for the 2000-01. The net sales from the period under review grew by 7.09 per cent at Rs 3,014 crore while it stood at Rs 2,814.3 crore for 1999-2000, it said.
SBIMF’s Magnum SBI Mutual Fund has declared the second quarterly
dividend of 4 per cent under the Magnum Gilt Fund-long-term dividend option for the quarter ended June 2001. The record date for dividend payout is June 29. All the investors who invest in scheme on or before June 29, 2000 and hold units of the scheme as on this date are eligible for this dividend. SBI Magnum Gilt Fund is an open ended Gilt Fund dedicated to investing in government securities thus ensuring the zero credit risk on investments. Minimum application amount for this scheme is Rs 25,000 in the growth option and Rs 100,000 in the dividend option under the both short-term and long-term plans.
GAIL The Gas Authority of India Limited (GAIL) has proposed 40 per cent dividend for 2000-01 against 30 per cent in the previous year. The total payment on this account would be Rs 373 crore compared to Rs 282 crore in the preceding year. The Board of Directors of the Navratna Company, which met here yesterday, also approved the Audited Balance Sheet and Accounts for 2000-01.
Agencies
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Cut in duty drawback hits bicycle exports Bicycle is the robust hub of Punjab’s economy. It is in dole-drum due to general recession. Exports of bicycle and its parts is giving relief from recession in the indigenous market. The government has tried duty drawback (DDB) rationalisation. It has resulted in total irrationalisation. In the earlier policy the rates were applicable on per piece basis. Now a rider has been put; per piece or this much percentage which ever is less. This reduction would lead to cash flow problem for exports: result in financial loss: wiping out foreign market in competition to other competing countries. Many exporters have committed their shipment on the basis that DDB rates would be kept at the old levels. Nobody had thought that rates would be pruned so drastically. Duty drawback is not the financial incentive in the true sense of the word. It is the return of various duties paid while manufacturing a product. It is an irony that duties are rising but drawback is getting lowered. The side effect of this decision is bad for the economy as well as to the ever vitiating culture of the country. Price of import will be quoted higher than the actual to have higher DDB. Many in the country blame exporting community for misdeeds. In fact the very wrong policies tend to convert honest into dishonest. Knitwear exporters are equally affected by the new DDB rates. There is a confusion in garment exporters as several items are not reflected in the specific categories list. This even creates doubts as to whether DDB is allowed on such items. The government has advised such exporters to export on provisional basis and their claims can be decided afterwards. The bicycle industry was able to export goods worth over 700 crore during 2000-2001 which is 40 per cent higher over the previous years level. It is laudable indeed. To maintain such efforts there should be stability of policies. On DDB there is hardly any need to notify the rates on yearly basis. Uncertainty hits exports sales. The government should fix benchmark for this purpose. DDB should be so adjusted according to the rise or fall of duties like Central Excise & Customs. The bicycle exporters have to mainly compete with China. Our bicycle industry is safe from Chinese inputs only due protective wall of import duties. When this wall is to be lowered in due course the Chinese threat to this vital industry will be real. Even now our exporters are not able to compete with China in many areas. This is due to higher prices of our products. For this only the government policy is responsible. In order to save this vital industry of Punjab the rates of DDB should be restored to the older rates. If some duties Central as well as states have increased weightage should be given for that. The entire Industrial spectrum of Punjab is linked to Bicycle Industry, so the entire industry of Punjab is in turmoil.
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Malaysia Airline for more operations Chandigarh, June 23 Though Malaysia Airline has been flying from five destinations in India — Chennai, New Delhi, Mumbai, Bangalore and Hyderabad — with 18 flights a week, it would still like to expand its operations in the country. Mr Moses says that his personal wish is the Malaysia Airline to fly to Amritsar because of the tremendous potential it has for the North American market. Even otherwise, Malaysia has special connections with the Majha belt as a large number of Punjabi families. Otherwise, the next probable destination for Malaysia Airline would be Kolkata. Both Bangalore — from where it flies twice a week — and Hyderabad — once a week — have given overwhelming response to the flights introduced in April this year. At present, Malaysia Airline flies daily from Chennai and four times a week from New Delhi and Mumbai. Mr Moses says that though polar flights are being introduced, international airlines would find it hard to fill an entire aircraft with passengers for one destination alone. It may be mentioned here that Canada 3000 is all set introduce its polar flight from both Vancouver and Toronto to India — New Delhi and Mumbai — from October this year. He agrees that this would affect other international air carriers as both the cost and travelling time would come down considerably after the introduction of polar flights. “India has been a major destination. The return of the United and additional flights by Cathy Pacific and additional capacity by other carriers have slowed down the business here. But it will look up,” Mr Moses said. Talking about future plans, he said Malaysia Airline may gradually replace AB 330 aircraft by the next generation Boeing 747 and 777 aircraft on various Indian routes. He was hopeful that because of growing competition, India may have to go for open skies policy latest by 2005.
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WorldVisas opens unit in city Chandigarh, June 23 Speaking on the occasion at the opening of the school, Mrs R. Grewal, Director, WVSE, said that this facility has been created due to the heavy demand from the students and prospective immigrants willing to go for study and education abroad. She said that good communication skills and English are necessary prerequisites for getting admissions in international schools and colleges. The school offers courses in spoken English for beginners and advanced level. Students seeking admissions abroad are prepared for Visa interviews, which are dealt with by specially trained faculty. WVSE will be extending its network all over India by offering franchises and will be frequently conducting free educational seminars all over India, Mrs Grewal added.
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GoM to moot
long-term
grain policy New Delhi, June 23 The Minister said the government would also consider issuing notification to all recognised export houses, trading houses etc., to lift wheat, rice and coarse grains from the Food Corporation of India (FCI) without payment of any earnest money deposit, security deposit and bank guarantee for the difference in export price and open market price. The Minister was making these observations before a delegation of the Associated Chambers of Commerce and Industry of India (Assocham) which called on him here.
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WagonR Mile-edge
event today Chandigarh, June 23 In a recent survey in UK done by BBC Top Gear, Suzuki WagonR has been ranked 21st out of a total of 182 cars. The Star Plus Good Morning India show aired on May 15 has judged WagonR as the reigning best family car with a score of nine out of 10. According to Mr Vikram Mehtani, Regional Manager, MUL, this event is being organised in major cities of India to precisely demonstrate in real life driving conditions the superior performance of WagonR over its rivals and endorsing emphatically the right choice made by its owners. The event stretches over 95 km in and around
Ludhiana.The driver along with his or her navigator and family members will be given a tulip chart for the route. On reaching a checkpoint the participant will need to get himself registered and head for the next point. The venue will be offering games etc for the kids where the family can have a nice and enjoyable day. The winners will be chosen not on the basis of how fast he has reached the final point on the basis of the mileage his WagonR has given. |
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by Praful R. Desai Approval of dismissal Q:
Was Single Judge of the H.C. justified in holding that the Tribunal had committed an error while granting the approval? Ans:
The S.C. was examining this point in Dharmpal (D) Through L.Rs. v National Engineering Industries Limited (2001-I-LLJ. 1422) The original appellant was employed with the respondent. He was dismissed in 1990 and approval of the Industrial Tribunal was sought for U/s. 33 (b) of the I.D. Act. Such approval was granted by the Tribunal on 26-7-93, which was challenged in a proceeding arising under Art. 226/227 before the H.C. Learned Single Judge quashed the order made by the Tribunal. On further appeal to the Division Bench, the H.C. set aside the order by the learned single Judge and restore that of the Industrial Tribunal. Hence the present appeal before the S.C. The connection put forth before the Industrial Tribunal was that the disciplinary action taken against the original appellant was based upon the allegation of distribution of pamphlet which he did as an office-bearer of the trade union. That aspect was examined by the Tribunal. The Tribunal was prima facie satisfied that the allegations made in the pamphlet were not true and correct and on the material before it came to the conclusion that the inquiry officer and the disciplinary authority had based their conclusions on legal evidence and such conclusion could not be termed as perverse and charge No. 1 made was found fully proved against the original appellant. In those circumstances the Industrial Tribunal granted approval to the action of the employer dismissing the workman. The learned Single Judge therefore was not justified in holding, according to the S.C., that the Tribunal has committed error while granting approval to the action of the employer in dismissing the workman. The appropriate course for the original appellant was to have invoked S.10 of I.D. Act to work out his rights. The D.B. of the H.C. is therefore justified in setting aside the order passed by the learned single Judge and restoring that of the Industrial Tribunal, held the S.C. In the circumstances, in the opinion of the S.C., there are no circumstances to interfere and hence dismissed the appeal.
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by Ashok Kumar ICICI bonds issue unexceptional In the midst of the ongoing primary market stalemate, ICICI is back in the reckoning with yet another Safety Bond issue. Now, the yields on offer are, well, unexceptional and at best on par with comparable investment avenues. In the absence of the old reliable — the Tax Saving Bond whose potency is enhanced by the Section 88 tax break, this issue appears unexceptional. If at all, there is something relatively innovative on offer, it is the Encash Bond. This bond, one is informed is designed to provide instant liquidity. A closer reading indicates that it translates into ‘any time after the completion of one year from the date of allotment’. Hence, there is a one year lock-in making its comparison with bank deposits which offer even 7 day deposits these days, rather superfluous. Then, there are the other four bonds which are longer tenure bonds. In today’s dynamic age and hostile economic conditions where the very survival of hitherto top-notch companies and corporations appear debatable, the imprudence of making a long-term fund commitment becomes self-evident. At the end of the day, does it make good sense for a company like ICICI which is in the process of cleaning up its act and its books of accounts, to raise up to Rs 800 crore in the prevalent conditions when optimal deployment surely has to be a worry? Methinks not. Whilst on the topic of the primary market I remember that at the end of FY 1999-2000, there were many ‘Infy’ wannabes who not only made hugely popular IPO’s during that financial year but also sat pretty on the stock-price front post-listing. The table has turned topsy-turvy by the end of FY 2000-01 and there appears to be just two survivors of the KP typhoon that ravaged the Indian market. The two survivors are Hughes Software Systems and HCL Technologies respectively. Hughes Electronic Corporation has promoted Hughes Software Systems (HSS) with Hughes Network Systems (HNS). Its product portfolio includes a wide range of software, developed for communication and networking systems like wireless networks, intelligent networks, network management, Internet and e-commerce. A number of factors, which provide the company a commanding position in the industry, are domain expertise, strong parent, brand equity, synergistic product, service mix and offshore development. HSS has built its niche around the telecom software segment. For cornering a significant share of the market, the key elements of HSS’ future growth strategy are expansion of its reach, enhancement of product offerings, taking advantage of selective e-commerce opportunities, prudent mix of products and services, investment in R&D and strategic acquisitions. Growth in non-HNS business is expected to be a major growth driver for both, its topline as well as bottomline. About 25 per cent of its business is expected from the parent company, another 35 per cent will come from non-Hughes services and about 40 per cent of the business will come from the products. What makes HSSL tick is that unlike many of its contemporaries from the big league in the Indian IT segment, while announcing its Q4 results, it has claimed that the company will retain the 61 per cent CAGR in its sales and outperform the 89 per cent CAGR in net profit during FY 2001-2002. Impressive? But what about the US slowdown and its trickle down effect? A closer scrutiny indicates that HSSL’s unique business model has helped the company’s sales and profit this year. So, what’s this unique business model? Well, it have to wait till next week.
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by A. K. Sachdeva Q. We are engaged in the business of manufacture and sale of machinery, its parts and accessories being a dealer registered under the provisions of the Haryana General Sales Tax Act, 1973 and the Central Sales Tax Act, 1956. A consignment of goods was coming from a place situated outside the State as a results of a purchase in the course of inter-State trade or commerce for which necessary documents had been issued by the consignor. An Excise and Taxation Officer of the Sales tax department seized the goods on the ground that some columns of transit challan in form ST-38 were found blank. In fact the consignor while sending the consignment did not fill serial Number of invoice, date and value of the goods. Penalty proceedings under sub-section (6) of section 37 of the Haryana General Sales Tax Act, 1973 have been initiated for this lapse. Our explanation that it was a fault on the part of the consignor which was technical in nature has been rejected by the checking officer confirming the proposal regarding imposition of penalty. Kindly advise if levy of penalty is justified when no offence has been committed on our part? A.K. Malhotra, Bhiwani Ans:
It is true that a duly completed challan in form ST-38 has to be furnished at the time of checking before the officer appointed by the State Government for the purpose of checking. But omission to fill some of the columns does not by itself constitute a ground for imposition of penalty within the meaning of sub-section (6) of section 37 of the Haryana General Sales Tax Act, 1973 when it is shown that the mistake was technical in nature. A transit challan (inward) contains three parts which are supposed to be filled in by the consignee, consignor and the transporters. There appears to be no dispute that first part of the challan was duly filled by the consignee (the queriest) and it was only the consignor that he did not attempt the columns relating to serial number of invoice, value of the goods and the date of the transaction. No penalty upon a consignee can be levied by the checking officer for the default committed by the consignor more particularly when the information sought to be secured through these columns was admittedly available with the checking officer as was evident from the invoice accompanying the consignment. Q: The State Government has recently issued a notification reducing the rate of tax on inputs required for manufacture, processing of the goods from 5% to 4% where the rate of tax was more than 4 per cent. There has been confusion in the trade circle that all goods used as inputs have been brought into the net of first stage taxation. Kindly advise. Ram Kumar Garg, Jind Ans: There is no denying the fact that the rate of tax in respect of inputs which are purchased by a manufacturer for use in the manufacture or processing or packing of goods has been reduced from the existing rate of 5 per cent to 4 per cent but not
notification changing the stage of levy has been issued by the State Government in respect of these goods. Therefore the question of levy of first stage tax on all inputs (except which are already enlisted as first stage items) does not arise as a results of the recently promulgated notification. |
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SBP scheme Maurya Sheraton Paradigm United Bank Jyoti Metal |
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