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August 5, 2001, Chandigarh, India   
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Jaswant: UTI muddle an aberration
Private insurance firms to enter region
Industry urged to use cleaner technologies
How not to implement ST laws in Haryana SBI to cut rates |
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PIE Education plans expansion
Sinha faces rough weather over US-64 collapse
A victory for Air-India
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Jaswant: UTI muddle an aberration
New Delhi, August 4 “There is still strong faith in the Indian financial system despite some unfortunate happenings. Foreign investment will not suffer,” Mr Jaswant Singh told top Indian and American Corporate heads at an interaction with them last night. Mr Jaswant Singh said these incidents have driven home the point that there is need for strong regulatory and supervisory systems which will prevent their recurrence. “Faith in free enterprise does not obviate the need for credible regulatory mechanisms,” he said, citing in a lighter vein the case of Delhi traffic symbolised by excessive freedom without proper regulation. The meeting was organised by the American Chamber of Commerce in India (AMCHAM-India), a body which promotes investment by US companies in the country. On the occasion, a report, titled “achieving a quantum leap in India’s FDI,” was released which has been sponsored by the Chamber and produced by the international management consultants McKinsey and Company. The thrust of Mr Jaswant Singh’s argument was that winning, or at least having a good chance of winning, the race for the FDI was profoundly important for India. The potential benefits in terms of GDP growth, higher productivity, additional jobs and vastly increased exports, are too large to forgo. With the right programme and determination to succeed, there is no reason why India cannot catch up with other countries, and perhaps even overtake them. During the course of his discussion, Mr Jaswant Singh touched on a number of issues of interest to foreign companies, such as the Enron saga, why for “some strange reason” NRI’s complain that it is easier to take money out of India rather than bring in funds, and how he is giving primacy to economic diplomacy. The comprehensive AMCHAM - McKinsey report brings out India’s potential in attracting $ 100 billion FDI in five years, and makes sector specific recommendations and a road map for government’s consideration. The initiative followed Prime Minister Atal Behari Vajpayee’s address to international investors during his visit to Washington and New York last year regarding the country’s aspiration of higher FDI.
UNI
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Private insurance firms to enter region Chandigarh, August 4 “While we have already launched our products in almost 10 other cities, from August 15 onwards, these will be available in Chandigarh , Panchkula and Mohali to be later on launched in other cities of the region,” said Mr Maninder Singh, Branch Head, HDFC Standard Life Insurance. Training for the agents, which has been made mandatory by IRDA is already going on . After the training, the agents will be given almost a weeks in-house training by the company regarding its products etc following which the agents would start marketing the products of the se companies. IFFCO Tokio will market its products only in the rural areas initially. Ludhiana has been adopted by the company as model district. “We have chosen rural areas due to the already established goodwill that IFFCO has in the villages,” said Mr Mokham Singh, Consultant, IFFCO Tokio. Only after results in Ludhiana, the company will launch its products in other districts. Group insurance schemes will be a major attraction by IFFCO Tokio. With LIC already having a large network, private insurance companies are also preparing themselves for the same. These companies are also in the process of tying up with finance companies etc who can sell their products . “In order to have a wide and sound network, we have to look at such options,” said Mr Maninder Singh of HDFC. Other companies are entering into life insurance business. “The demographic trends of Chandigarh and Punjab mainly
in the region make the new players perceive this area as opportune place for life insurance business,” Ms Payal Sharma, Director, UGCE IIT, training centre here. New players see the region as having tremendous potential which is still untapped in this sector. The mortality rate, accident cases are among the lowest, so is the epidemic history , pollution etc in this part of the country which are major factors for life insurance companies, she said.
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Industry urged to use cleaner technologies New Delhi, August 4 Technology of today should not only aim at lowering emissions but at achieving zero emissions, he said. He said the movement of clean technologies should not have much limitations. The eco-system is a unified system, so we need to take global actions to address global problems. The cooperation of the international community is very important to tackle issues of global warming and implementation of cleaner energy technologies. The minister said India not being an annex I country under the Kyoto protocol is not required to comply with emission reduction targets. Despite that the government has taken several steps towards tackling environmental problems and to reduce emissions. There are two prime sources of greenhouse gas emissions — transportation sector and energy sector. Transport sector contributes to 70 per cent of the air pollution and there is a need to reduce the consumption of fossil fuel in the transportation sector. He said there is a need to change the profile of electricity generation in the country. About 71 per cent of energy is generated by thermal, 24 per cent by hydro and 2 per cent by nuclear energy. Mr Prabhu said the government has decided that from the 12th Plan onwards 20 per cent of incremental power will be generated from nuclear sources and atleast 20 per cent of incremental power should be targetted from renewable sources. Atleast 35 per cent of the incremental power generation will be from hydro sources in the medium term.
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How not to implement ST laws in Haryana CAN the sales tax authorities entrusted with the task of making assessments hold views contrary to the one taken by the Sales Tax Tribunal,, the highest decision-making quasi-judicial body under the provisions of the Haryana General Sales Tax Act, 1973? Whether the principles of law laid down by the Sales Tax Tribunal over the issues relating to sales tax in exercise of its appellate jurisdiction are not binding upon the lower authorities enforcing fiscal laws on the tax-payers? These now-a-days appear to be the most frequently asked questions in the trade circles as the taxing authorities proceed completely in a contemptible manner on several issues relating to sales tax. One of the living examples can be quoted from the cases involving taxability of PVC pipes and their fittings. Disposing of an appeal filed by an assessees claiming exemption from payment of tax on the sale of PVC pipes, the Sales Tax Tribunal, Haryana, Chandigarh, inter alia, ruled “PVC pipes sold by the dealer is an agricultural implement covered by entry 10-D, of notification dated May 10, 1995 and is, therefore, exempt from payment of tax”. Upon the pronouncement of this decision, the assessees dealing in agricultural PVC pipes and their fittings started claiming the benefit of tax exemption which came to be objected to by the taxing authorities on the ground that the turnover relating to the sales of PVC pipes attracts 12% sales tax and that the decision of the Sales Tax Tribunal does not govern the issue arising in this context. It may be mentioned here that the decision of the Sales Tax Tribunal holding that PVC pipes are exempt from payment of tax has been delivered in what has come to be known as the case of M/s Atulya Tech-Plast Limited, Bahadurgarh V. State of Haryana, STA No. 745 of 1998-99 dated May 18, 2000. The point that arises is whether the taxing authorities are entitled to really overlook the law laid down by the Tribunal thereby displaying judicial indiscipline in the matter of tax administration? A Division Bench of the Madras High Court was called upon to adjudicate similar issue in the case of Sree Rajendra Mills Ltd v. Joint Commercial Tax Officer, Salem, (1971) 28 STC 483. Elaborating upon the bindings nature of the decisions of the Tribunal on the lower authorities, the learned Judges proceeded to hold “we consider that in the hierarchy of authorities set up under the Act, the Tribunal is superior to the Appellate Assistant Commissioner, who is bound by the orders of the Tribunal. The orders of the Tribunal will be as effective as the orders of this Court (High Court) so far as their binding character on the Appellate Assistant Commissioner is concerned. Merely because a tax case has been filed by the department, it does not mean it acts as a kind of stray of operation of the order of the Tribunal. So long as that order of the Tribunal is not set aside, the Appellate Assistant Commissioner is bound to give effect to it, and if he fails to do it and by-passes it on the ground that the department has filed an appeal, it will be really a contempt of the Tribunal’s order. In the circumstances, therefore, we should think that the Appellate Assistant Commissioner will, as he is bound to, follow the Tribunal’s view. It is, of course, open to the Appellate Assistant Commissioner to take his own view on the facts, but, so far as the law propounded by the Tribunal is concerned, it is binding and it should be applied by the Appellate Assistant Commissioner to the facts before him”. Another important aspect is that the representation made to the higher authorities by the assessees complaining of the inconsistent approach of the sales tax authorities in regard to the taxability or non-taxability of PVC pipes has received no attention it really deserved. Why the practice of defying the orders of the Sales Tax Tribunal leading to undue hardships to the tax-payers continues to be permitted in the state?
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SBI to cut rates Mumbai, August 4 The short term prime lending rates for maturities upto 180 days would stand reduced to 10 per cent (10.5 pc) while for credit over 180 days but below one year would attract 11 per cent, SBI said in a release here today. The rates on fresh domestic deposits would be 4.75 per cent for 15-45 day deposits, 6 per cent for 46-179 day deposits and 6.5 per cent for 180 days to upto a year, it said. The prime lending and medium term lending rates would remain unchanged and continue to prevail at 11.5 and 12 per cent respectively, it added.
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PIE Education plans expansion Chandigarh, August 4 He claimed that PIE Education was the only ISO-9001 certified institute in the country for IIT-JEE training. He said the institute had distanced itself from conventional coaching and had been developed as a corporate house. He said to meet the growing demand of students, it was being planned to expand the network of the
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Sinha faces rough weather over US-64 collapse New Delhi, August 4 Although he sailed through three earlier crises, Mr Sinha is feeling the heat as the Opposition continues its onslaught over the collapse of the UTI flagship US-64 scheme. About 20 million middle-class families are finding their dreams gone sour after the state-controlled UTI announced it was freezing the redemption of the popular US-64 units. The controversy surrounding India’s largest mutual fund has provided ammunition to the Opposition for the fourth time in Mr Sinha’s two successive terms as Finance Minister to demand his resignation. Political analysts say the pressure on the bureaucrat-turned-politician this time will mount further in the wake of Prime Minister Atal Behari Vajpayee’s offer to step down Tuesday, an offer that was rejected by coalition partners. The Finance Minister, they maintain, has lost the support of not just some allies of the ruling coalition but also of several members of the BJP to which he belongs, due to a host of financial scandals and the government’s inability to reverse the economic slowdown during his tenure. Such mood was also evident in the BJP’s national executive meeting earlier this week, where the focus was on the mutual fund fiasco and the slowdown, with most of the 28 speakers maintaining that the Finance Minister could not wash his hands away from the controversies. “The Finance Minister has a lot of explaining to do on the mismanagement of the mutual fund,” said Mr Bhairon Singh Shekhawat, a senior BJP leader and former Chief Minister of Rajasthan. “There is no doubt that the Finance Ministry is entirely responsible for not being able to address the problems faced by the Unit Trust of India, which is after all a trust formed by an act of Parliament.” Mr Somnath Chatterjee, a veteran politician of the CPM and a senior lawmaker said: “What moral authority does the finance minister have to continue in office? “He should, in the least, take moral responsibility for causing monetary loss to 20 million investors of the Unit Trust of India and resign.” Industry, on the other hand, feels that such scams have taken the government’s focus away from the immediate and more pressing need to initiate measures that will put the economy back on rails. Mr Sinha first came under fire from the Opposition after Mr Mohan Guruswamy, an OSD in the Finance Ministry and Mr Sinha’s one-time friend, was unceremoniously removed in January, 1999. Mr Guruswamy alleged that under Mr Sinha the Finance Ministry influenced the fixing of an extraordinarily high floor price for hot-rolled steel coil imports, which provided many domestic producers an opportunity to hike prices. The dust over the steel controversy had barely settled down when Mr Sinha, who is an elected member of the Lok Sabha from Hazaribagh in Jharkhand state, again came under Opposition attack in May 1999. The Opposition, led mainly by the Communist parties, alleged that Mr Sinha was involved in bailing out some foreign institutional investors (FIIs) through the double tax avoidance treaty with Mauritius. This controversy, too, died down when Mr Vajpayee strongly defended his Finance Minister’s action. Within a few months into 2001, Mr Sinha was under fire once again - this time over his ministry’s inaction in the stock market scandal, which resulted in erosion of the market capitalisation of a host of companies. Unfortunately for Mr Sinha, this controversy surfaced barely a few days after he presented a widely acclaimed budget on February 28, which invited praise from one of his strongest critics and predecessor P. Chidambaram. This time around the attack on the Finance Minister has become stronger, following allegations by the former chief of the UTI fund, Mr P.S. Subramanyam. Mr Subramanyam, who is in judicial custody, maintained that he had kept the finance minister informed of the goings on in the US-64 scheme. He also alleged that some of the decisions of the fund, such as the purchase of shares of some companies at exorbitant prices, were taken at the behest of Mr Sinha and some officials in the Prime Minister’s Office. While these controversies have been testing times for Mr Sinha’s abilities to stay on as Finance Minister, industry observers point out that he also has several high-points in his present stint. “Even Dr Manmohan Singh had to face opposition’s ire over the securities scam of early 1990s during his tenure as Finance Minister,” said Mr D.H. Pai Panandikar, a noted business economist. “Scams and controversies are not peculiar to the present Finance Minister. It is our national character,” he said. “Mr Sinha’s measures to rationalize the rates indirect taxes, his desire to vigorously pursue public sector disinvestment, the decision to open up the insurance sector and the drive to initiate labor reforms are all quite noteworthy,” he added. IANS |
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A victory for Air-India LONDON'S Heathrow Airport is one of the busiest airports in the world. Every minute, a flight, international or national, is landing or taking-off. Not for nothing, the British Aviation authorities are conservative, in fact choosy, for granting a parking slot to a foreign carrier. After months-protracted correspondence, Air-India has been able to secure a suitable parking slot for its new weekly terminator on Friday. This is a victory of the sort for the airline, which is taking all possible measures to bring about a turn-around for the carrier. Under the bilateral agreement between the two countries, Air-India has still three unutilised slots. If Air-India is able to add these services, it will not only gain in prestige but also make a sizable revenue. The new terminator has already gained the imagination of the passengers from northern India. Apart from convenient timings for operations at Heathrow and onward connections, the fares are much lower than the IATA-approved tariff. There are bilateral imbalances existing (load from London to Delhi-Bombay is not enough), the airlines officials are optimistic that they will be able to bridge the gap. According to Air-India, it has earned a profit of Rs 11 crore in June 2001. After deducting losses of Rs 5 crore in April and Rs 1 crore in May, it has made a profit of Rs 5 crore in the first fiscal ending on June 30, 2001. “If Air-India can make a profit of Rs 11 crore in a month, it is certainly not a sick unit and should not be sold to private consortium”, said three airline officials. The airline detractors say it is nothing but a jugglery of figures. The profit, according to them, has been projected without taking into account expenditure incurred on the leased aircraft and many other over-head expenses. Air India plans to add several new services during the year. Flights to Hong Kong and Gulf have now become non-smoking flights. The flights are being rendered non-smoking following a call by the World Health Organisation (WHO) for a worldwide ban on smoking on international flights. This is also in line with the International Civil Aviation Organisation’s resolution.
Undue delay Despite Government decision to privatise four international airports at Delhi, Mumbai, Kolkata and Chennai for a period of 30 years, there are unforeseen hinderances in the plan. The global consultant KPMG is also responsible for delay. The consultancy has taken longer time in completing the paper-work then it should have taken. The delay in implementing the project suits the Airports Authority of India (AAI) as it has always been against privatisation. The KPMG has shown the valuation of the four airports at Rs 3,659 crore. Many experts do not agree with the KPMG’s valuation which, according to them, should be more than 6,000 crore. After KPMG submits its feasibility report, many other ticklish questions, including the transfer of employees, will require thorough study. The analysts are of the view that it will take at least two more years before four international airports become private. |
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Special camps SBP scheme IBM India NFL CVO promoted |
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