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Sunday,
February 10, 2002, Chandigarh, India  
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Punjab has
medium investment climate Spice
offers more concessions Parties’
promises anti-industry Enron
impact may hit US recovery |
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Consumer
Amendment Bill likely this session In the
wonderland of investment Drugs
export rises
Over 100
airports need upgradation
Comparative
hardship
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Punjab has medium investment climate New Delhi, February 9 According to a study conducted by the two organisations across 10 states, the good investment climate states identified among the states surveyed were Andhra Pradesh, Karnataka and Tamil Nadu. The medium investment climate states were Delhi and Punjab and the poor investment climate states were Kerala, Uttar Pradesh and West Bengal. Though India figures among the aggressively globalising developing countries, the per capita growth registered was lower than that of other aggressively globalising countries like China. Such variations in growth can be due to the fact that greater openness to trade and investment needs to be complimented with a host of other institutional, regulatory and infrastructure reforms that foster a good investment climate. The study states that India’s lower cost of labour is offset by its lower labour productivity. The advantage in manufacturing on account of value added per cost of labour is wafer-thin and is further offset by higher costs due to regulatory hassles, delays in customs, poor supply of power and interest costs. According to the study, labour productivity varies widely across the states. Whereas the average value added per worker is Rs 225.2 for the best investment climates, it is merely Rs 137.7 for the worst ones. However, India as a whole generates lower value added per worker compared to Thailand, Malaysia, Philippines and South Korea. The outcome of the study is that investment climate matters and affects business performance. The study points out that India may be marginally competitive in value added per unit of labour costs but this thin lead gets eroded by massive disadvantages in power cost, interest rates, delays at customs houses, infrastructure bottlenecks and to a
lesser extent regulatory hassles.
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Spice offers more concessions Chandigarh, February 9 It has a bundle of benefits for consumers ranging from the introduction of monthly free airtime, free SMS to free activation of mobiles. These benefits are for both the existing 2.5 lakh subscribers and for prospective subscribers of Spice Telecom and come into force from tomorrow. In addition to this, Spice has announced a flat reduction on monthly rental across all tariff plans by Rs 50 as well as reduction in the local security deposit to Rs 1000. The monthly free airtime offer ranging from 30 minutes per month to 100 minutes per month for the existing Spice subscribers will come into effect from February 10, 2002 for a year, while the free SMS and free activation offer has been planned till April 13, 2002. The promotion starts on February 10 and will last till April 13, 2002 and has been sent to TRAI for approval. Speaking on the launch of the consumer promotion, Mr Vinod Sawhney, MD, Spice Telecom said, ‘‘The new consumer promotion by Spice is just another manifestation of our continuous endeavour to provide the highest quality service to our customers.
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Parties’ promises anti-industry While political parties in Punjab are running a race to reach the throne the business community is a worried lot for various reasons. The ruling combine has already done much harm to the state economy through freebies. The Power sector of Punjab is in shambles with no promise of recovery. Hardly any worthwhile investment has been made for power generation. To gain political mileage, octroi was abolished without evolving alternative source of revenue to civic bodies. The govt is boasting of development without specifying anything concrete. Development means growth of economy and no growth figures is being quoted. Punjab is supposed to show growth above the national level. This time it seems much below this figure. The Planning Commission has identified six states to achieve G.D.P. growth of 8 per cent. These are Delhi, Karnataka, Gujarat, Tamil Nadu, West Bengal and Rajasthan. Surprisingly the laggard Rajasthan is expected to achieve a growth of 8.3 per cent during the next plan after achieving 7.2 per cent. Availability of adequate power and its price is most crucial for industrial growth. Recession hit the industry’s demand and hefty power cuts hit the productions and industrial economy hard. Even a cursory look to the PSEB’s finances show that after the new government takes over rates of power will increase anything by more than 25 to 30 per cent. In this competitive era no industry can bear any further hike. Instead of growth the industry will struggle for survival. Most unfortunate part is that the Congress has not realised this sorry part. In its manifesto it has promised 150 units of power free of cost for all SC and BC families. Farmers who run their tubewells on diesel will be compensated. There can not be anything more irresponsible than these promises. Even for agriculture development rhetorics are stranger than realities. PAU is supposed to help agriculture through research. It has proved quite useful to the sector. Unfortunately it is now being starved of funds. PAU is being asked to cut 10 per cent budget every year and even budgeted amount is not being given. About 15 to 20 per cent food grains are destroyed by rodents. This can be reduced by providing medicines to farmers. Unfortunately the agriculture department is not having money to purchase these medicines. This has been quoted to show that politicians are not sincere even to their beloved sectors. Then the industry is a far cry for them. Going by the past and imagining the immediate future of industrial growth the picture looks very dismal. It is high time for the entrepreneurs to pose these questions to the candidates in their respective constituencies and have some promises. At least some conducive environ for government-industry tie up will be created.
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Enron impact may hit US
recovery
Washington, February 9 The meltdown of what had been the seventh largest US corporation is weighing on other firms with complex or questionable accounting. But economists say the fallout from the Enron affair can ultimately damage business and consumer confidence, and possibly even delay the recovery that most experts say is building. Steven Wieting, an analyst with Salomon Smith Barney, said that the Enron affair has also affected corporate bonds, making it more difficult and expensive for firms to borrow money. Wall Street players are being pulled into the congressional investigation of Enron’s collapse — analysts who recommended buying stock as the company foundered, investigation firms that both financed Enron bond sales and invested in the company, and credit-rating agencies that didn’t warn investors promptly. As Congrers and law enforcement agencies dissect the biggest bankruptcy in US history, curtains are being lifted from financial institutions that operate away from public view.
AFP
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Consumer Amendment Bill likely this session New Delhi, February 9 The Minister of State for Consumer Affairs, Mr Sreenivasa Prasad, said this at the conference of Presidents of State Consumer Disputes Redressal Commission and Secretaries in charge of Consumer Affairs in states. “The bill seeks to address various areas of concern by stipulating the time limit for disposal of complaints, restriction on adjournments, giving provisions for setting up of benches of National Commission and restricting engagement of lawyers,” the Minister said. It also provides for enhancement of monetary limits of the cases to be decided by the state commissions and district forums for quick disposal of consumer complaints. The bill also aims at reducing the number of cases before the consumer forums by exclusion of services availed of for commercial purposes.
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In the wonderland of investment Q:
Whether the amount received by employees who opted for VRS and were paid ex-gratia amount equivalent to certain number of months’ salary in lieu of future salary can be treated as advance salary and spread over the corresponding years as advance income on which income tax is to be paid for the relevant future years. For example an employee has been paid 54 months’ salary @ Rs 13,000 per month, i.e. Rs 7.02 lakh. Deducting the eligible amount of exemption, of Rs 5 lakh, can the remaining Rs 2.02 lakh be split prorata over the remaining 4.5 years and tax paid accordingly. Incidentally, the employee was allowed to take voluntary retirement as at the close of business on 31.3.2001 and the cheque for ex-gratia payment handed over on the same day, but due to close of banking hours, the cheque could be encashed only on the next working day, i.e. 2nd April, 2001. Whether the employer was right in including this Rs 2.02 lakh salary income for the F.Y. 2000-01 and in deducting tax thereon at the rate applicable for the FY 2000-01, despite representations not to do so? — A. Basu, Kolkata A: Sec 10(10C) clearly lays down that up to Rs 5 lakh of a VRS compensation is tax-free and the rest is taxable. In my opinion the mode of distribution of the compensation, whether a lump-sum or spread over a number of years is inconsequential and immaterial. However, the following case, decided on 10.3.01 is very interesting AAA 250ITR30 (Cal), 2001 Sail-DSP VR Employee’s Association v Union of India. The scheme of VRS consisted of part payment of lump-sum and the rest in monthly payments. The employees contended that standard deduction should be allowed on such monthly payments and subjected to tax annually as salary. The Judgement was in favour of the employees. The learned judge observed, “The scheme is nothing short of an agreement and if the parties accept any of the terms which are not unlawful, then the same squarely binds both the contracting parties. Terms of payment of income tax which is otherwise payable, is not contrary to law. Under the Act there is no prohibition, against payment of any tax which is otherwise payable, in the matter of benefit derived from the voluntary retirement scheme. The privilege and/or right which has been given u/s 10(10C) of the Act cannot be termed to be an embargo or prohibition so as to render the contractual terms to be invalid and illegal and for which, such term is liable to struck down. The payment has been received by each of the employees by way of monthly payment and in lieu of salary. The department and the concerned company are perfectly justified in deducting and/or releasing the taxes after giving due standard deduction. Therefore, there is no merit in the writ petition.” I am afraid, Sec 89(1) is out of question. Salary is taxed on accrual basis. In the instant case, even if the cheque was given in April 01, the amount is taxable in March 01 since the salary (or VRS) was earned in March. Q: 1. Whether remitting foreign currency outside India for payments to foreign lawyers for a case going outside India through an EEFC a/c attracts TDS u/s 195. Whether the concept that the payment has been made outside India and the services have been rendered outside India and hence there is no taxable income in India and hence no TDS is applicable over here? 2. Whether payments to foreign company outside India say USA for providing space and helping in putting stalls etc, in an exhibition held outside India attracts TDS u/s 195. 3. Whether while remitting funds outside India, if TDS is applicable then the Bank/RBI itself intervenes and asks the remitter to bring no objection certificate from its Income Tax Officer that such payment attracts no TDS? — Manish Jain, A: Yes, in my opinion, you are right. Besides the fact that such payments are made outside India and for services rendered outside India, cognisance has to be taken of the following: Sec 195 deals with payments made to a non-resident or a foreign company. The intention of the stipulation cannot be as unreasonable as — Apply TDS if the lawyer is an NRI (or a foreign company) but do not apply it if he is a foreigner. In the case of exhibition, apply TDS if it is a foreign company (or an NRI individual) but do not apply it if he is a foreign individual. The bank should not ask for a no-objection certificate of any ITO because such a certificate is required only in the case of crediting Indian income to NRE account or repatriating directly. EEFC is a different specie.
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Drugs export rises
New Delhi, February 9 During the April-October period, drugs and pharmaceutical exports were to the tune of Rs 5,187 crore as against Rs 4,640 crore in the year ago period, an official release said today. Quality control and competitiveness had led to the growth in export.
PTI |
rc
by K. R. Wadhwaney Over 100 airports need upgradation The aviation scenario is not bright. Andhra Pradesh, Karnataka, Tamil Nadu, Maharashtra and some states in the North are clamouring for new airports. There are more than 100 airports which need upgradation. Many of these airports are no more than mere air-strips. Runways have to be lengthened and modernised. Terminal buildings have to be improved. Several other facilities have to be created so that flights can land and take off without any problem. To possess airport is one thing but to maintain it is quite another. It should be left upon the Airports Authority of India (AAI) to develop airports and improve their functioning instead of states stretching their wings without sufficient funds and
wherewithal's. When C.M. Ibrahim and H.D. Deve Gowda fought for joint ventures in developing the Devanahalli Airport, near Bangalore in 1994. Singapore and the Tatas showed interest but walked out of the project as they found the weather was turbulent. In the fresh bids, one of the two bidders is led by the Zurich airport. The authorities in Karnataka are pressing for going ahead with work. The steering committee has been formed to expedite fencing and earthwork. The aviation experts feel that pushing the work in a haste will not be conducive for developing new
airport. According to estimates, a new international airport will cost about 800 crore, a domestic airport about 500 crore and runway and taxiway about 150 crore. Do states have this much financial cushion to undertake such mammoth projects?
Hijacking vulnerability Strengthening of cock-pit doors, deploying of skymarshalls in flights, ladder-point frisking and several other securing measures have been taken to prevent hijacking. But aviation experts and security officials still believe that ground security at international airports should be further tightened. The IGIA, for example, is always vulnerable as there are many weak zones. Cameras have been installed and double-point x-ray machines are screening the baggage, both checked-in and handbaggage, but there is always a possibility of hijacking. This will remain until ground security becomes foolproof.
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by Praful R. Desai Comparative hardship Q: Whether the case falls under 11(3) or 11 (8) for eviction, is it still subject to the question of comparative hardship? Ans: SC in S.R. Babu v T.K. Vasudevan (2001 (2) RCJ 525 answered the question. Distinguishing S 11 (3) and 11 (8) of the Kerala Rent Act, the SC pointed out that S. 11 (3) applies when the building is wholly occupied by the tenant and the landlord bona fide needs it for his own personal use, whereas S. 11 (8) applies when a landlord is already in occupation of a portion of the building and needs additional accommodation which the tenant is occupying for his personal occupation. In the instant case, the case falls U/s 11 (8) and not 11 (3) because the landlord is in possession of a part of the building. He requires the additional accommodation for his personal use. The condition in which the additional accommodation is to be used by the landlord cannot be dictated by the tenant. The landlord may use it as it exists or he may use it after necessary repairs. All the courts below have held that the landlord needs this additional accommodation for his personal use. However, this finding is subject to S. 11 (10). The first proviso, however, says that the Rent Controller shall reject the application, if he is satisfied that the hardship which may be caused to the tenant by granting the application will outweight the advantage to the landlord. In that way, the S.C. held that under the Act the said need U/s. 11 (8) is subject to S. 11 (10), first proviso viz. on judgement of comparative hardship and as this subject is not decided by the Rent Controller, the case is remanded to decide the issue. Consequently, the S.C. allowed the appeal and remanded the case to the Rent Controller for considering whether the requirement of the first proviso to S. 11 (10) is satisfied and for passing appropriate orders on the eviction on the basis of the finding arrived at thereunder in accordance with law.
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Incubation centre Amarendra Narayan 7-day banking Pharma Science |
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