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| Sunday,
July 22, 2001, Chandigarh, India   
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UTI ex-chief’s arrest a cover for govt
Reliance gets 16 telecom licences
Indian software for US aircraft
Clinton to be most expensive ex-Prez Honda
rolls out Activa |
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More phone exchanges for Sonepat In the wonderland of
investment
Give consumer 14 kg LPG free every
year
Fresh proceedings
Mukta Arts net spurts 62.35
pc
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UTI ex-chief’s arrest a cover for govt New Delhi, July 21 Mr Subramanyam’s arrest is being seen as a face-saving solution for the government which has been worried about the fallout of the UTI crisis in Parliament. The US-64 imbroglio has come at a time when the government is already under fire for taking several decisions which are anti-middle class. The government has already reduced interest rates on small savings and that on the Employees Provident Fund. Official sources said the Finance Ministry has been actively involved in the operation UTI-firefighting and the decision to appoint a new chairman, open up the US-64 mutual fund for small investors and the action against the top brass of the UTI before the Parliament session was to deflect some of the criticism that that was expected in the coming days. With these steps in place, Mr Yashwant Sinha is expected to face Parliament more confidently and his expected statement on the UTI crisis would have points on the action taken so far. Brokers in Mumbai said the arrest of Mr Subramanyam on charges of causing wrongful gain of Rs 32 crore to Cyberspace Ltd was “absurd”. “For a fund manager who is sitting on Rs 65,000 crore, a decision on Rs 32 crore going wrong was not something that was unacceptable”, a senior director with an international broking firm in Mumbai said. He explained that the UTI had bought certain shares which had become dubious in hindsight. At the time they were bought they were very much the in-thing. There was a time when any broker who did not hold a Ketan Parekh share was considered a “pariah” and a bad investor. Now that things have gone bad the government is playing the blame game. Another broker said that the government should come out with a white paper on the portfolio of UTI. Several skeletons would tumble out of the cupboard. There were instances when UTI invested around Rs 500 crore in the shares of a company which was ruling at Rs 385. After the purchase it fell to Rs 100. Mutual fund officials said every fund manager must have made a mistake during the capital market crisis. The action against Mr Subramanyam only demoralises fund managers in government- controlled institutions from taking quick decisions. Several brokers said that the government should take steps to make SEBI more efficient. The regulator invariably wakes up after much of the damage has been done. A market under strict surveillance would have prevented the UTI crisis, a broker added. As a goverment institution the UTI was expected to play a role to balance the volatilities in the capital market.
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Reliance gets 16 telecom licences
New Delhi, July 21 “Signing of deal follows furnishing of bank guarantees for an estimated Rs 1,600 crore by Reliance Communication earlier this week along with payment of about Rs 400 crore in cash towards entry fee,” highly placed sources told PTI. The company has also cleared the past dues to the tune of about Rs 100 crore. It is currently offering basic telecom services in Gujarat. The Reliance group has virtually exited from the latest round of fourth cellular slot as the company is in race for acquiring license for only Kolkata circle out of 15 circles it had originally bid for. Since the government has allowed limited mobility on basic telephones using wireless in local loop (WLL) technology, the company has planned to use the WLL platform for mobile service while concentrating fully on the wireline telephony. The licences will be issued for 20 years extendable by another 10 years. Sources said agreement for Tamil Nadu and Jammu and Kashmir circles have been held back due to legal problems in the former and security reasons in the case of latter. The government had
issued letter of intent (LoI) to Reliance Communication for 18 circles in March and the signing of licensing agreement was delayed due to litigations.
PTI
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Indian software for US aircraft
New Delhi, July 21 The state-owned Aeronautical Development Agency (ADA), which has been heading the country's light combat aircraft (LCA) program, will supply its "Autolay" software package to Parametric Technology Corporation, a computer-aided design and manufacture software major from the USA. Ironically, much of the indigenous software used in the LCA was developed by ADA after the US defence firms pulled out of the program following sanctions imposed by Washington in the wake of New Delhi's nuclear tests of May 1998. In addition to using the Autolay software for the design and development of the Airbus A380, Parametric will market the technology internationally, a spokesman for the Defence Ministry said. The LCA, which has been in development since the late 1980s, flew for the first time in January this year. The Autolay software was developed by the ADA to test light-weight composite material used in the manufacture of the LCA. Composites make up as much as 45 per cent of the LCA airframe, making it the first combat aircraft to make such extensive use of the material.
IANS
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Clinton to be most expensive ex-Prez Washington If Congress approves the White House budget request next week, Mr Clinton will receive $ 992,000 worth of support in the 2002 fiscal year for his pension, offices, staff and travel. When the cost of the ex-President's secret service protection is added in, the total will easily breach the million dollar barrier. Mr Clinton's staff are due to move into new permanent offices in Harlem next week costing $ 354,000 a year in public funds. Mr Clinton will also get a pension of $166,000, and will have $ 210,000 to spend on staff salaries and benefits. Mr Clinton's allowances next year compare with $ 734,000 for former President Ronald Reagan, $ 623,000 for George Bush Sr,$ 508,000 for Jimmy Carter, and $ 497,000 for Gerald Ford. Lyndon Johnson's widow, Lady Bird Johnson, will also receive $ 22,000 for staff assistance. The former President's political opponents seized on the figures to claim that Mr Clinton was getting special public largesse for his allegedly extravagant post-White House lifestyle. ``$ 1m Bill — Ex-prez to cost taxpayers a bundle'', the New York Post tabloid, owned by Rupert Murdoch, said in a front page headline. Although the rightwing American press continues to claim that Mr Clinton's office rental costs are exceptionally high, they are in fact lower than Mr Reagan's costs in California. Mr Reagan will receive $ 357,000 of public money for his office allowances next year. Mr Clinton's $ 166,000 federal pension is identical to the amount which his four living predecessors will receive next year. His travel allowance is identical to that of ex-President Bush and similar to the amount being given to Mr Ford. By arrangement with The Guardian
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Honda rolls out Activa Mumbai, July 21 The launch function was held at Om Sai Honda showroom at Malad in northeast Mumbai. The on-road price of the scooter is Rs 39,440 and is at present available in two colours — Strand metallic silver and black colour. However, in next couple of month company will introduce three more colours —laser red, precious gold metallic and azure blue metallic, the company’s senior sales executive Dev Indra Puri told newspersons. Mr Puri said that the Honda Activa has a 102cc, 4-stroke single cylinder air-cooled engine with a dual option of self-start or kick start. It has Tuffup Tube technology wherein the tyres have double-layered tube with fluid in between. This seals the air leakage in case of a puncture to ensure that the rider enjoys a hassle-free ride.
UNI |
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More phone exchanges for Sonepat Sonepat, July 21 Mr R.C. Hooda, General Manager of (Telecommunications), BSNL, told mediapersons here today that under this plan, at least 20,000 new telephone connections would be provided to the subscribers by March 31 next year. The capacity of different telephone exchanges, he said, would be increased by 34,000 telephones. To provide full coverage to the rural sector, seven new telephone exchanges would be set up at Jagsi, Nurankhera, Chhattera, Khanda, Pinana, Tewri and Umedgarh villages in the district. All these rural exchanges would be connected through the latest optical fibre technology. A rural telephone exchange at Jagsi village has already been commissioned, he said. Mr Hooda said a 4,000-line telephone exchange of OCB 283 technology had also been planned for the district. |
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In the wonderland of
investment Q: You have recommended, as a tax saving vehicle, investment in Infrastructure Bonds in lieu of PPF. However, would you please clarify whether interest on both IDBI and ICCI Bonds is eligible for deduction u/s 80L. On enquiry with IDBI and ICICI, I was given the following information: In case of IDBI Bonds, the IDBI makes applications for issue of CBDT notification u/s 80L later on and interest on some series of their Bonds has become eligible for deduction u/s 80L. In case of ICICI, interest is NOT eligible for deduction u/s 80L I would request to give please clarify whether the above information is correct and if so (a) whether those who wish to save tax on interest also should prefer PPF; and (b) what happens to those who may not know the taxability aspect of interest? — N.M. Apte A: Applicability of Sec. 80L was shrouded with chaos. However, it now appears that CBDT has relented into agreeing to bring the regular income schemes to the financial institutions u/s 80L and this includes Tax-Saving Bonds covered by Sec. 80L. The Deep Discount Bonds are not eligible for the benefit. IDBI Flexibond-I launched in February 1996 stated that application for necessary notification u/s 80L awaits clearance. IDBI had not received the clearance for Flexibond-I and yet it launched Flexibond-II with a similar declaration. If CBDT decides not to extend the shelter of Sec. 80L, who suffers? I wonder how the regulatory authorities allow launches on the basis of expected CBDT notifications. This exposes the investor to a risk much more than all the risk factors put together statutorily required to be declared in the offer document. CBDT finally issued the required notification as late as 30.6.97, that is one and half years later. Some of the assessees had filed their returns for FY 96-97 claiming the benefit of Sec. 80L on the basis of the offer document and others did not as the company had not received permission. Bad! Q: I am a retired employee of a nationalised bank under the VRS 2000 scheme. I have received ex-gratia and leave encashment and gratuity. I have yet to receive my PF balance and commutation amount (approx Rs 4.5 lacs). I have so far invested Rs 3 lacs in MIS, Rs 3 lacs in RBI bonds and Rs 2 lacs in my own bank. I learn that investment schemes of LIC such as new Jeevan Dhara and Beema Nivesh are better options. Could you please guide me on following: Whether the remaining amount be invested in above mentioned LIC schemes or any other schemes? 2. Whether the repayment of interest/principal from LIC is exempt of tax? — Purushottam Bapat A:
You appear to have missed my article related with investment by employees who have accepted VRS. I personally have not liked any of the schemes mentioned by you. You should look closely at Pure-growth (tax efficient), Open-ended (equivalent to bank SB account), Debt-based (safety of principle as well as income) schemes of UTI/MFs. Using these schemes, one can aspire to earn an annual income (by way of capital gains) of as much as Rs 5 lakh (on capital base of Rs 50 lakhs) and yet not pay any tax, legally. Q: I have claimed a deduction u/s 80DD (medical treatment for handicapped dependents) in my returns as I have a mentally retarded child. My employer, however, says that I have to produce a medical certificate to that effect from a government/municipal hospital for claiming the deduction. My daughter is under the treatment and observation of a child specialist from a private hospital for the last 5 years and I have not taken her to any government hospital. From one of your articles I understand that this is a statutory deduction and no proof is required to be produced for claiming this deduction. Am I required to produce such a certificate? P.V. Krishnan A: Hey! You are misquoting me. All I state is that a resident individual or a member of HUF having a dependent relative who suffers from a permanent physical disability (including blindness) or mental retardation is entitled to a deduction of Rs 40,000 in a year for medical treatment, training or rehabilitation. Circular 702 dt 3.4.95 clarified that the deduction u/s 80DD is statutory in nature and is allowed in full, irrespective of the actual expenditure incurred on medical treatment. I had prayed to know whether this circular continues to be applicable to the new Sec. 80DD. Thankfully, FA99 has clarified that no such evidence is needed. |
co
Give consumer 14 kg LPG free every
year IN
the midst all the excitement surrounding the visit of Pakistan President General Musharraf, a small news item issued by the Ministry of Petroleum and Natural Gas, went mostly unnoticed. According to a press release, by changing over to an open tender system and breaking a cartel formed by manufacturers, the Petroleum Ministry had considerably brought down the price at which empty LPG cylinders were purchased by oil companies. Apparently, earlier the procurement price was determined by a firm of charted accountants. Mr Ram Naik decided to depart from this practice and so in November last year, tenders were floated by oil companies. About 70 existing cylinder manufacturers formed a cartel and quoted a common rate of Rs 890 per cylinder. With the help of Balmer Lawrie, a public sector undertaking under the Ministry of Petroleum, the Ministry managed to break the cartel and then began price negotiations with manufacturers and brought down the price to Rs 650 per cylinder. This would mean (as against the cartel’s rate of Rs 890) an overall saving of Rs 480 crore during the current year alone, taking into consideration an estimated procurement of two crore cylinders by the industry. After announcing this good news, the press release said “the oil industry is enthused with the saving as this would allow them to provide better service and improve infrastructure with the money so saved”. Well, I would like to use this opportunity to remind the industry that it collects Rs 900 or Rs 1800 as security deposit towards the cylinder from every consumer, depending on whether he or she has one or two cylinders per connection. (This is besides Rs 100 charged for the regulator). Now if the oil industry managed to bring down the price of the LPG cylinder sold to them to Rs 650 from the procurement price of Rs 810 last year, it is only fair to pass on the benefit of the reduced price to the consumer by collecting a lower amount as security deposit per cylinder. I do not know how the oil industry has worked out Rs 900 per cylinder as the deposit (there is certainly need for transparency here). I would assume that it includes the cost of the cylinder plus its maintenance, even though one of the senior officials of an oil company categorically said it included only the maintenance charges. If that is so, then perhaps there is need for Mr Ram Naik’s intervention here too, to bring down the cost of maintenance! There is another, even more important issue here. From time to time, the oil companies have raised the security deposit collected on the cylinders, but have never bothered to pay any interest on it. In the year 1963, oil companies charged Rs 40 as security deposit towards a cylinder and Rs 10 towards the regulator. In 1967 this went up marginally to Rs 60 and then to Rs 90 in 1970. Today, the total number of LPG connections provided by public sector oil companies is about 5.79 crore (As on March 31). And about 50 per cent of these connections have two cylinders. So roughly this works out to about 8.5 crore cylinders. Of course depending on when they acquired the connection, different consumers have paid different rates of deposit. On the basis of the number of connections give from 1995 till now, the total deposits collected by the oil companies on the cylinder during this period (excluding the regulator) works out to approximately Rs 2700 crore. One only hopes that the Petroleum Ministry will see reason in the demand that the oil companies pay interest to consumers on their deposits or if that makes calculations complicated and cumbersome, give each consumer, 14.2 kg of LPG free every year in lieu of the interest. And for the interest that has not been paid all these years, give 28.4 kg of LPG free to every consumer. That is certainly not an unreasonable demand and one hopes that Mr Ram Naik, who has successfully brought down the price of the cylinder and has a background of being a consumer activist at one time, would accede to this demand. |
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Forex reserves Traders’ plea VSNL tieup LIC House Fin Uco Bank |
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