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Sunday,
September 9, 2001,
Chandigarh, India  
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Punjab besieged by economic slowdown
Industry not ready to bear octroi loss
Royal Enfield unveils ‘Bullet Electra’ in city
IndusInd Bank ties up with CR2 group Centurion Bank: no merger
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Punjab besieged by economic slowdown Chandigarh Besides geographical disadvantages, even as a border state, Punjab has been deprived of big industry. Even medium industrial units are not many. Therefore, the industry is impaired because of difficulty in procuring raw material and marketing. In the absence of a comprehensive industrial policy and also due to in-built cumbersome procedural wrangles, the intended benefits do not percolate to the entrepreneurs. The biggest handicap, as the Tribune News Service survey revealed, is the non-availability of promised capital subsidy to the small sector units. The Industrial Policy-1996 envisages such a benefit. According to official sources, the government owes Rs 450 crore to the small sector industrial units. The allocation for disbursement of the promised capital subsidy in the state’s annual budgets has been paltry. If it was Rs 5 crore in 1996-97, the sum never exceeded Rs 10 crore to Rs 15 crore in the subsequent budgets. The backlog is huge. At least 3,870-odd units are awaiting disbursement. In the un-ending wait many units have reported “sick”. Some have even closed down. The official figures, as per the Reserve Bank of India, puts the number of “sick” units at 2,500 to 3,000-odd. This is very low. The survey has brought into focus several points common to all districts. Besides non-payment of capital subsidy, the interrupted power supply at a high rate (in comparison to ‘’free’’ supply to agriculture sector for running of tube-wells) is universal as is the inadequate infrastructure and general amenities at industrial focal points. Wether old or new most of these focal points are an apology. Initially set up by PSIEC, after five years the responsibility becomes of the municipal councils and corporations to cater to the basic essential services that entrepreneurs rue are woefully missing. The captains of the small industry want proper protection in the ensuing WTO regime besides financial and technical help for the up-gradation of their units. Punjab, it is learnt, has set up a special small scale industries cell in the department providing special interest subsidy. The response is good. It is a Government of India scheme being run through the banks. Some complaints have also come in that export-oriented units were being denied the promised benefits — concessions and incentives in the realm of power, particularly, concessions during the peak load hours and in sales tax incidence. The state’s philosophy is that since the plough-back from such units was meagre, proper attention was no paid. Nevertheless, facilities like bonded customs, ware houses, container freight stations etc are available. The state wants agro export zones for fruits and vegetables (kinnow and traditional vegetables), durum wheat and grains (Basmati). There has been overall slowdown in economy. Punjab is not alone. It is all over. In fact, as Dr Sucha Singh Gill states, Punjab did better in eighties and worst period was nineties. This, a government spokesperson said in response to TNS survey finding, was mainly due to ‘’excess capacities’’ created by the entrepreneurs, easy availability of finance, buoyancy and large investments in shares and public issues. Now the bubble has burst. While the entrepreneurs from Bathinda to Amritsar are unhappy over the government response to their problems. But the state having burnt its fingers on several occasions is now contented to act as a ‘’facilitator’’. After all, unlike other states, Punjab has no law and order problem or labour trouble. Power availability is qualitatively better. The tariff still remains the “cheapest’’. It is another matter Punjab is “locked’’ when it comes to procurement of raw material and marketing given the stiff competition, demand-supply syndrome, price-war and of course quality. (Concluded) (Inputs from Manoj Kumar/ Ludhiana, Sushil Goyal/Sangrur, Chander Parkash/Bathinda, J.S. Malhotra/Jalandhar, Varinder Walia, Ashok Sethi/Amritsar)
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Industry not ready to bear octroi loss Abolition of octroi in Punjab has become most controversial issue. The government in saddle had promised to abolish octroi before the last elections and in fact it was included among other promises in the manifestos of the ruling parties. Some promises were met with alacrity. Octroi is one tax which has all the vices. It was initiated about 2000 years ago in the days of Roman Empire when world was less civilized and the value put on time was infinitely lower than it is today. So octroi has been termed as, “the remains of barbarous system of universal taxation”. In India effort to abolish octroi was initiated in 1925 with the constitution of the Indian Taxation Inquiry Committee. Subsequently two dozen committees were constituted to evolve alternative to octroi. The Janata Party had included its abolition in its manifesto in 1977 and the Congress in its 1980 manifesto. No decision could be taken. However, in recent years some states have abolished octroi. It has been found that delays at nakas or check posts range from 30 per cent to 73 per cent of the effective travelling time of commercial vehicles. This delay results in 15 per cent of the fuel consumption being wasted. Reliable statistics show that for every rupee of net revenue derived from octroi the net burden on the nation is Rs 6.27. The Punjab Government has no option on octroi due to the ensuing elections. Firstly it constituted a committee to suggest ways and means to compensate for the revenue loss of octroi. The committee did ground work but has not submitted its report. The Chief Minister and the Minister for Local Bodies have been evasive on the issue but due to pressure from the industry and trade the government has decided to do away with octroi. No alternative means of compensating the local bodies has been perceived. There are indications that octroi posts may be abolished and scheme of self assessment may be put in place. This system is working in Madhya Pradesh. The industry & trade is not ready to accept this system as official interference will breed corruption and put business community to great harassment. Some thinking tilted towards levying of surcharge on Sales Tax. This, too, is unacceptable to business community as sales tax burden is already high. The industry, in particular, is soar as bulk of revenue for local bodies is collected from the industry. The government played a rather cheap political game by abolishing house tax on residential buildings. To compensate this loss rates of house tax on industrial premises are rising. There has been thinking in government circles to levy surcharge on petrol; diesel and other oils to compensate revenue loss of octroi. This, too, could not be fructified due to political reasons. The government has increased its sales tax revenue after rationalisation of sales tax rates under uniform tax regime evolved in the country. The state government’s sales tax revenue has gone up by over Rs 1000 crore as year due to various reasons. So it is quite reasonable that the government should compensate octroi loss with this. The Centre is pressing the Punjab Government to impose sales tax on fertilisers which has a revenue potential of over Rs 300 crore. It is also well known that number of vehicles in industrial towns is increasing at an alarming rate. Some surcharge on the purchase of these vehicles can garner good amount. Fact remains that the burden of revenue for the development and maintenance of towns should be shared by the entire population. House tax in a very simplified manner is one potent source of revenue. Octroi should go away with no additional burden of any kind on the industry. Self assessment scheme is to totally unacceptable to the business community. Revenue loss due to abolition of octroi is estimated between Rs 400 and 500 crore.
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Royal Enfield unveils ‘Bullet Electra’ in city Chandigarh, September 8 Speaking at the launch here, Mr Siddhartha Lal, Chief Executive, Royal Enfield Motors said, “Our range of motorcycles meet customer needs that combine distinctive styles with power, riding comfort and ruggedness to deliver a unique motorcycling experience.” Mr Lal said, the Bullet Electra is powered by a 350 cc, 4-stroke engine that delivers 18 bhp and features CDI ignition that improves startability and reduces maintenance cost. It will be available initially in 3 exciting colours — silver ash, riviera red and amazon blue. Mr R. Shankar, General Manager, Sales, said “The Bullet Electra is priced at Rs 58300 ex-showroom in Chandigarh.” Royal Enfield Motors, a unit of Eicher Ltd, is a part of the Rs 1000 crore Eicher Group that has diversified business interests in auto engineering. Besides power bikes, the group also manufactures, markets and exports commercial vehicles — tractors and auto-aggregates and components.
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IndusInd Bank ties up with CR2 group Chandigarh, September 8 Mr Bhaskar Ghose, Managing Director, IndusInd Bank, stated in a press release that the partnership will enable the bank to develop and deliver value-added products and personalised services to enhance client satisfaction and increase customer base.
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Centurion Bank: no merger
on anvil Chandigarh , September 8 In a recently held meeting, Mr V S Srinivasan, Director, termed it only as market rumours. The Board is discussing various options to raise fresh capital, including private placements, preferential allotments, rights issue or a combination of all." However , the final decision regarding this is still to be taken", said he. The bank has registered a growth of more than 50 per cent in its retail deposits last financial year and expected to increase it. Mr G S Channi, head, Punjab, stated that the total deposits in Punjab are Rs 225 crore of which retail deposits are Rs 154 crore and corporate deposits are Rs 71 crore. "We have also issued 7,500 Vantage cards (global debit cards) in the state. |
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by R.N. Lakhotia Standard deduction Q:
I am a defence pensioner, re-employed in Railway. I am receiving Rs
23280 as pension plus Rs 13560 as arrears of DA relief w.e.f July 18,
’97. Salary income during 2000-2001 comes to Rs 1,05,000. Will you
kind enough to tell me about the standard/other deductions please. —
Tarsem Singh Dhanota. Ans: On your salary income
of Rs 1,05,000 for the financial year 2000-2001 you will be entitled to
a standard deduction of Rs 20,000 only, as the salary exceeds Rs 1 lakh.
Rebate for
handicapped Q:
I am a physically handicapped Punjab Government employee and Civil
Surgeon has issued me 50 per cent disability certificate. And secondly I have recently taken house loan of Rs one lakh to build my own house in the month of June 2000 from State Bank of India under house loan scheme and I am paying Rs 2000/- p.m. including interest to the bank w.e.f. 1.8.2000. My total gross salary for the year 2000-2001 is Rs 1.58 lakh and total savings u/s 88 is Rs 35000. My questions are: (1)
How much rebate of Income-tax I shall get in one or both the cases? How
it will be calculated — computed with my gross salary? —
Dev Raj, Ghagwal Ans: Rs 40,000 is allowded as a
deduction in case of permanent physical disability u/s 80U of the
Income-tax Act, 1961. However, ensure whether your disability is coming
within purview of permanent physical disability as per rule 11D of the
Income-tax Act, 1961. Also do not forget to enclose a certificate from
an Oculist or Physician or a Surgeon, etc. working in a Government
Hospital which should be submitted with the income-tax return. In
respect of the loan taken by you for your house the interest amount will
be fully allowed as a deduction while computing your total income.
Special salary Q:
Is special salary of an employee exempted from Income tax? If there is
exemption from tax, under which section it is? (ii) LIC policy in the name of children who are yet studying & not earning whether minor or major, can the employee have deduction from income-tax? —
A.K. Joshi, Rahon Ans: It is not clear what is
meant by the special salary of the employee any allowances, etc. which
are not specifically mentioned in the Income-tax law and as such any
special salary received by the employee would be fully liable to tax.
You can make payment of premium for your major as well as minor children
and claim the benefit of tax rebate in respect of insurance premium paid
for them.
Conveyance
allowance Q: We
are an organisation of Development Officers in LIC of India. The
Development Officer works in the market for procuring insurance
business. He recruits and trains the agents. He organises the meetings
of agents and have contact with the policy holders. In this way he
travels a lot. He is paid conveyance allowance at fixed percentage @ 3.5
to 4 per cent of the scheduled premium received under fresh policies.
Say if the DO brings 40 lakh premium, he gets 1.6 lakh as conveyance
allowance. The income tax authorities either disallows or
partly allows the exemption from tax. They say that the exemption
provision under section 10(14) (i) states “....specifically granted to
meet expenses wholly, necessarily and exclusively incurred in
performance of the duties .... to the extent to which such expenses are
actually incurred for that purpose....” — R.S. Saini,
Ram Colony, Sirsa Ans: The conveyance allowance
received by the Development Officer would be exempt in income-tax to the
extent the same has been spent in discharging official duty by the
employee. As per rule 2BB entire conveyance allowance which has been
granted to meet the expenditure in performance of duties of an officer
or employment of profit is fully exempt from income-tax. It is not
compulsory to produce the full details of the expenditure in respect of
the conveyance allowance received and the amount spent. However, care
should be taken by the employee to ensure that no saving is made out of
the conveyance allowance so received from the employer and that no
conveyance should have been provided by the employer. |
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by Praful R. Desai Back wages Q.
When an employee is dismissed because of conviction but on appeal when he is acquitted is he entitled to the order of re-instatement with full back wages? Ans: S.C. was considering this point in the case of Bahadur Solanki v L.I.C. of India (2001-II-LLJ 421 SC). The appellant was an employee of the Life Insurance Corporation of India. On account of pending criminal proceeding he was suspended from service on 15-9-1977. He was convicted by the trying Magistrate in that criminal case on 4-8-1983. On the basis of the aforesaid conviction, he was dismissed from service by order dated 23-12-1985. The appellant, in the meantime, assailed his conviction by filing an appeal. The Appellate Court set aside the conviction and sentence and acquitted him by order dated 10.5.1995. The appellant then moved the H.C. and the learned Single Judge of the H.C. directed reinstatement as well as payment of the entire back wages. The Corporation assailed that order by filing an appeal to the Division Bench. The Division Bench of the H.C. though maintained the direction with regard to reinstatement, but denied the back wages for the period. Hence the present appeal before the S.C. The appellant contended before the S.C. that since he has been honourably acquitted by the Appellate Court in respect of the criminal charges and the order of dismissal was because of criminal conviction recorded by the Trial Court, there was no reason to disentitle him to the back wages for the period in question. The Corporation, on the other hand, contended that the appellant not having rendered any service would not be entitled to any back wages and as such there is no infirmity with the impugned order of the Division Bench of the H.C. The S.C., after hearing both the parties held that taking into consideration the facts and circumstances, it is of the opinion that it is appropriate to modify the impugned order of the Division Bench of the H.C. and thus directed that the appellant would be entitled to 50% of the back wages for the period in question. The appeal thus stood disposed of with the aforesaid modification. |
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by K.R. Wadhwaney IA starts new Boeing services Two incidents — one fatal — took place recently at the Indira Gandhi International Airport (IGIA), where unusual accidents keep occurring. A senior mechanic of the Indian Airlines (IA) was crashed to death while repairing a bus, used for transporting passengers between waiting aircraft and terminal building. The mechanic was underneath the bus when an automatic jack got into operation and he was crashed to death. Upset at the unusual accident, the airline authorities have initiated a full-fledged probe. Some years ago, an engineer was sucked into Boeing engines, which were operating at full throttle. Another incident has showed continued laxity of the security personnels and police. Despite presence of many guards, a man slipped into the sensitive area. He was loitering about when he was spotted by the officials of the Airports Authority of India (AAI). He was questioned and also searched before handing him over to the concerned unit for further interrogation. According to airline officials, there are several week zones at the airport. Guards’ indifference helps ‘undesirable element’ to sneak into ‘forbidden’ areas. The airport officials say that the man had scaled the wall about 6 p.m. in a broad daylight. The incident, according to airline officials, is worth probing as to how this man got into the sensitive areas.
New flights When IA has started operating Boeing (119 passengers) services from Delhi to Nagpur and also from Delhi to Jabalpur via Raipur, Lufthansa has started A-340-300 service between Bangalore and Frankfurt. Bangalore is Lufthansa’s fourth destination in this country. Following bilateral agreement between India and German Government, Lufthansa has initiated operations from Bangalore. The German airline has plans to increase operations from Mumbai and Chennai in the next two years. Lufthansa’s Vice-President, Asia-Pacific, Manfred Reimer was categorical in saying at Bangalore recently that his airline was not interested in bidding for Air India equity. Reimer, who was in Delhi for several years as Sales Manager of the airline, knows Indian market strategy as intimately as any official belonging to Air-India or Indian Airlines. He played a pivotal role in airline stabilising in Northern India, particularly in Punjab and UP region. |
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