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Sunday,
April 21, 2002, Chandigarh, India  
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Indian economy stable & secure: Sinha
Repose more faith in small units
Tax-collection costs on
the rise |
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India ‘a safe tourist destination’
Illegal constructions
welcome, legal banned
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Indian economy stable & secure: Sinha Washington, April 20 “We are putting together a policy framework which will ensure this (a sustained growth rate of seven to eight per cent)”, he told a meeting co-sponsored by CII and US-India Business Council yesterday. “I hope the Budget I presented to Parliament this year will be an another contributory factor,” he said. Asserting that the economic fundamentals are strong, Sinha gave statistics to say that inflation was low at 1.25 per cent, balance of payments comfortable and that foreign exchange reserves soared to about $ 55 billion. “All this shows that the Indian economy is stable and secure. This crisis that hit international economies in the last five or seven years largely left India untouched,” he said. Sinha said due to the global downturn, India’s economic growth had slowed to 3.3 per cent at one point. But it had recovered and reached 6.3 per cent in last quarter of 2001. The minister said that the government had decided to privatise airlines but did not get good offers. The September 11 terror attacks on the USA worsened things. “We still want to privatise. Meanwhile, we are strengthening the fleet of Indian Airlines and Air-India so that they can run better services and become more comfortable,” he said. Privatisation of the four major airports in Delhi, Calcutta, Mumbai and Chennai was also under way, he said. Mr Sinha assured the audience that the liberalisation process in India was “irreversible.” Highlighting other achievements of the Indian economy, he pointed out that the weekly inflation figures were down to 1.25, with the annual rate between 3.5 and 4 per cent. Tariffs had been lowered and a foundation for a very strong balance of payments position had been laid, he said. “Over the last four years, India has added something like $ 25 to 30 billion to its reserves, which now stand at about $ 55 billion” up from as low as a bilion dollars in 1991, the minister said. “All this shows that the Indian economy is stable and secure.” Sinha received unanimous praise for his contribution to liberalisation of the economy at yesterday’s meeting which was attended, among others, by Gary G Benanay, Chairman and Chief Executive of New York Life Insurance Company.
PTI
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Repose more faith in small units The Exim policy for 2002-07 has been framed with the backdrop of dismal export performance. Projection of exports from the present level of $ 46 billion to $ 80 billion during the Tenth Plan seems to be much on the higher side. The main thrust of the policy is to simplify procedures, reduce hassles and offer possible incentives but the potential area of higher export growth has been overlooked. The small scale sector has been left almost high and dry. This sector showed a very healthy export growth of nearly 11 per cent at Rs 59,978 crore during 2000-01 as against Rs 54,200 crore recorded in the year before. The share in exports is in fact much higher. Smaller units are greatly handicapped on finance. How is it that out of a total production worth Rs 4,65,171 crore only about Rs 60,000 crore is exported. As otherwise the share of the SSI in the total exports of the country is around 40 per cent. The exim policy should have reposed more faith in this sector. Against the growth in exports of 11 per cent from smaller units bank credit increased only by Rs 2,657 crore in 2000-01 compared to Rs 3,114 crore a year before. The policy has recognised some clusters of SSI units like Tirupur for hosiery, woollen blanket in Panipat, woollen knitwear in Ludhiana. This exercise of the Commerce Ministry seems to be half baked. Ludhiana has the largest cluster of bicycle and its parts and is the biggest centre of auto parts being exported to various countries. Jalandhar is known for sports goods and hand tools along with Ludhiana. How have the clusters been ignored is beyond comprehension. Exports from Punjab has a better growth than the national growth. In fact the entire belt from Ludhiana to Jalandhar is engaged in the export business. If this entire belt is taken as an SEZ the export growth can be phenominal. The policy provides for market access initiative scheme. Similar facility has been given to the cottage sector and handicrafts. Unfortunately the amount of only Rs 5 crore has been provided under this scheme. Can such big purposes be met with such meagre fund? The government should provide ample funds. Export potential from Northern states like Punjab, J&K, H.P. and Haryana is not getting translated into reality. This is mainly due to high cost of freight. Freight factor gets aggravated as most of the inputs come from outside and finished products also carry heavy freight component. The Commerce Ministry should devise some way to mitigate this hardship in the interest of higher exports. |
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Nursing sick industry to health Chandigarh, April 21 Their hope is not unfounded. Mr Baidwan is President of the Mohali Industries Association. He himself looks forward to contributing to framing of policies aimed at giving industry a new impetus and status and providing it linkages with agriculture, main anchor of state's economy. Mr Baidwan brings with him 26 years experience in industry. He talks straight and to the point. In a quick rapid-fire interview with TNS today, if he listed industry's problems and requirements, he also talked of what is expected of the government. His awareness of the global trends prompted him to speak out on the responsibilities of the entrepreneurs. His vision of the future is clear: in the economic wars ahead Punjab has many a battles to launch and win in terms of improving quality and work environment to become competitive as also lobby for better infrastructure, not only in physical terms but also in terms of communication net-work, updating technologies and making financial institutions to trust entrepreneurs. Though industry contributed 24.90 per cent of the state's gross domestic product, in the government's eyes entrepreneurs remained suspect. ''This is what hurts'', he sighed. At this point, the industry spokesperson of CII-MIA, Mr Jagjit Singh, intervened to list industry's contribution to the state's economy. ''The total annual production is worth Rs 55,000 crore and contribution to SGDP Rs 11,000 crore. The industry employees 11 lakh workers (5 per cent of the population). Moreover, industry's share to state taxes is 60 per cent, local bodies' taxes 80 per cent and electricity board revenue 60 per cent''. To this PHDCCI, Punjab Chapter, Co-Chairperson, Mr R.S. Sachdeva, added that this contribution could be substantially raised, if the current status of the industry was understood in proper perspective. He hoped for some relief from the Chief Minister's Advisory Committee on industrial development, headed by former Chief Secretary, Mr A.S. Chatha. A perusal of the current status of industry presents a grim picture. Today, 30 per cent industry is ''sick''. At least 70 per cent is ''uncompetitive'' in the international arena. About 20 per cent units are ''insulated'' against competition, while, more than 90 per cent are unexposed to global developments and market-driven economies and technologies. The raw material price, particularly of steel is higher than the international market by 30 per cent. Mr Baidwan said his main efforts would be to improve access of entrepreneurs to the wide open world through better communication, information on international market trends, easy funding for updating technologies etc. Rather than setting up new Economic Zones or Export Zones, Punjab should first strengthen the existing industrial hubs by improving their environment to attract NRIs and homegrown entrepreneurs. The government should act as a ''facilitator''. Punjab is nursery of small and medium industrial units that need sound financial backing. Given the banking system, the state is a looser. Even the credit deposit ratio is lowest in the country: 38.6 (1998) against all-India's 55.5. Contrary to general perception, bank-defaulter units number is small. The net value of incidence of sickness based on outstanding sum and number of units is 0.90. Against a total of 1.95 lakh working units, the number of units financed by banks in the state is 92,000. It is in this backdrop that Mr Baidwan would approach Planning board to demand a second look at industrial scenario and also dress up Mohali as a show-window. |
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Tax-collection costs on
the rise The cost of the collection of various taxes in Haryana has been going up, especially in case of taxes on vehicles. The expenditure on the collection of taxes on vehicles came to Rs 5.74 crore in 2000-2001 which was 6.70 per cent to the gross collection of Rs 85.69 crore. This was only Rs 2.17 crore and Rs 2.72 crore in 1998-1999 and 1999-2000, respectively. The percentage of expenditure to gross collection was 3.32 and 3.21 in these two years. The gross collection was Rs 71.37 crore and Rs 84.77 crore in 1998-1999 and 1999-2000, respectively. As regards taxes on sales, trade etc, the expenditure incurred on this was Rs 35.21 crore in 2000-2002 which was higher than the previous year. In 1999-2000, the expenditure came to Rs 30.37 crore and in 1998-1999 it was Rs 30.07 crore. The gross collection on this account was Rs 1,599.38 crore, Rs 1,967.38 crore and Rs 2,573.39 crore in these three years. Gross collection of state excise has been on the increase from Rs 774.63 crore in 1998-1999 to Rs 840.56 crore in 2000-2001. An amount of Rs 3.85 crore was spent on the collection of stamp duty and registration fee in 1999-2000 as compared to Rs 2.50 crore in 1998-1999. The gross collection on this account was Rs 294.55 and Rs 309.92 crore in 1998-1999 and 1999-2000, respectively. The increase of 31 per cent in case of taxes on sales, trade etc was due to uniformity in tax rates across the states and hike in HSD price. There was a steep fall in the receipt of taxes and duties on electricity. In 2000-2001, only Rs 0.68 crore were received as compared to Rs 46.08 crore in the previous year. The decrease of 99 per cent has been attributed to non-deposit of electricity duty amounting to Rs 40.58 crore by the Haryana Vidyut Prasaran Nigam and power cut on electricity.
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In the wonderland of investment Q: A few days back SEBI has declared its policy about Derivatives Trading, which will not be considered as speculation (i.e. subject to Short Term Capital Gains Tax), but will be considered as hearing. Does this mean that this gain will be subject to long term capital gains or what are the implications of this classification? I am more interested in knowing what all this means for Options Trading for Indexes. Sensex and Nifty. — G. Desai Ans:
SEBI is not an authority on income tax. It has only reiterated Sec. 45(5) which defines — “Speculative transaction means a transaction in which a contract for the purchase or sale of any commodity, including stock and shares, is periodically or ultimately settled otherwise than by the actual delivery or transfer of the commodity or scrips.” The proviso enumerates some exceptions which shall not be deemed to be a speculative transaction. These are: a) A contract in respect of raw material or ... b) A contract in respect of stocks and shares entered into by a dealer or investor therein to guard against loss in his holdings of stocks and shares through price fluctuation. c) A contract entered into by a member of a forward market or a stock exchange in the course of any transaction in the nature of jobbing or arhitrage to guard against loss which may arise in the ordinary course of his business as such member.” The business of purchase or sale of shares by companies (which are not investment, banking or financial companies) shall be treated as speculation business. The loss from such dealings can be setoff only against profits or gains of a speculation business (Explanation to Sec. 73). Q: What is the 80L limit for AY 2002-03? Is the interest income from Nabard Bonds (u/s 54EC investment) eligible for deduction u/s 80L? — Ratan Mistry Ans:
Theoretical limit is Rs 12,000 but effectively it is only Rs 9,000 since this space of Rs 3,000 can be occupied only by government securities which are not easily available to individuals. Normally, interest from any bank is covered by Sec. 80L but the authorities have singled out these Bonds u/s 54EC for not being eligible for the deduction u/s 80L. Q. This querry of mine is about the LTA. My wife had gone to her home town in June of this year for delivery. She delivered a baby in Nov. She’s (along with the baby) is due back to my place, Pune in late Dec. Both journeys are by air. Pune-Mumbai-Jaipur and return from Delhi-Pune. In the time that she was there at Jaipur, I had been to visit her on three different occasions, each for a period of at least one week each. The question is am I eligible to claim the tax free LTA for this travel of hers. — Nikhil Kulkarni Ans: As per the rules, you can claim the LTA benefit only twice during the block of four years. For this purpose 1. You should be on leave. 2. You should travel. 3. During such travel you may have your family with you. 4. The expense incurred by you is exempt up to the LTA received by you. Obviously, if your wife travels, with or without the baby, without you accompanying her, no LTA can be claimed. |
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India ‘a safe tourist destination’ The five-day 51st Pacific Asia Travel Association (PATA) conference ended with a healthy impact on delegates, who left Delhi genuinely convinced that India was as safe a tourist destination as any other place in the world. The Prime Minister Atal Behari Vajpayee's encouraging message about tourism and Tourism Minister Jagmohan's reassuring observations left delegates from different countries fully convinced that India was looking “ahead and beyond” in tourism. Discounting ‘tourism travails, Mr Jagmohan emphasised that even sky was not the limit since “We are endowed with vast bounties of natural resources.” “We have set our targets in the world of tourism and we will achieve these, come what may”, he said. “Tourism and aviation blues are behind us now and twin industries have entered into a phase of quick-fire recovery” was the unanimous opinion of PATA members. “What we have witnessed during our stay here have transformed us as advocates of India as a destination”, said PATA chairman Peter de Jong. Many veteran officials and well-known travel writers expressed optimism that tourism in the country would go miles ahead since the Tourism Ministry and directorate were working hand-in-hand. As there will be progress in tourism, there will be gains in the world of aviation as both these industries are supplementary to each other. PATA secretary-treasurer Ram Kohli said the conference had enhanced the prestige of the country and also removed misconceptions that existed in the minds of those connected with tourism. The chairman for the next PATA conference at Bali, Mr B.W. Long, said: “We will no longer be under the shadow of Asia. Pacific region has its own identity and we will march ahead to scale new heights in the realm of tourism and aviation”, he said. There was a lively discussion on issues, like impact of alliances and code shares, route development, supply and demand, new services and products, growth opportunities and airline security. No one among the eminent speakers talked about under-cutting and off-loading, twin issues causing multifarious problems to travellers. The multi-media presentation entitled “South Southeast” was excellent. It was hosted by the National Geographic Traveler magazine. Photographs by Steve McCurry, one of the renowned photo-journalists, were marvellous. But many photographs on India and Indian culture highlighted more poverty and backwardness than the positive side of the country. The PATA conference was staged here after 23 years. Those who have had the opportunity to attend both in 1978 and 2002 stressed that this meeting achieved far more rewarding outcome than the previous one. |
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Illegal constructions welcome, legal banned Readers may laugh, people may not believe, concerned officials and officers of the Town Planning Department Punjab, Amritsar Corporation or any other Punjab Government Department, dealing to the scheduled roads and bypasses may twist the reality but this is the fact that the rules and regulations notified by the Punjab Government are being violated daringly by the influential property dealers and persons with connivance of the concerned departments. Common people for lack of knowledge, purchase the land from the property dealers and the land which is notified by the government for road widening or the bypasses. They are shown the existing buildings constructed on the land notified by the government for road widening and told that government can not take any action against the existing buildings. But when they start construction employees of the District Town Planners S.T.P., P.W.D. etc come turn by turn, threatens the builders, then bargaining and ultimately the illegal building is constructed on the land notified for road widening. But the educated and sensible persons adopt the legal way. They submit their building plans, wander from one office to another for months together but they are not allowed to construct the building in any way. Even the temporary structures are not allowed by the officers of these departments. For example, take Amritsar bypass road which links GT Road, Batala Road, Majitha Road, Raja Sansi Road and Attari Road. The influential leaders, property dealers and persons have constructed hospitals, kothies, shops, marriage palaces, factories and workshops on both sides on the 300 feet land notified by the Punjab Government. Some big buildings are under construction. But a poor person purchased a small piece of land even 150 feet away from the existing bypass to shift an authorised K/Oil agency which falls in to public utility services like petrol pumps etc. He submitted his site plans for approval and gave an affidavit to the D.T.P. and the Senior Town Planner that he will not construct any permanent structure and he will immediately vacant the plot whenever required by the government if comes in the road widening without claiming any loss from the government. Will the Punjab Government look into the matter, demolish the illegal constructions, punish the officials and officers of the concerned departments who allowed these illegal constructions or denotify the decision of bypass road widening in Amritsar? The Punjab Government should also take immediate steps to compensate the small land owners whose lands falls into the 300 feet bypass widening area who are waiting for it from the last so many years or allow them to utilise the land to earn their meals with the condition that they will vacant it whenever required and give the justice to the aggrieved persons. B.S. Sharma
D.F. & SC (retd), Amritsar |
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Charge of misconduct Q: Is the contention of the applicant that punishment was not commensurate with the gravity of charges tenable? Ans.: In J.K. Sharma v Union of India, Delhi H.C. was considering this point. (2002-I-LLJ-633) The appellant, formerly a Dy. Manager, was charged with certain acts of misconduct in the performance of his duties. Enquiry Officer held charge No. 1 as proved and charge No. 2 as partly proved. The Disciplinary Authority agreed with the finding in respect charge No. 1 but not with charge No. 2. Appellant was issued, in consequence, a show cause notice as to why penalty of removal from service should not be imposed on him. After considering appellant’s reply, his services were terminated. On challenge the learned Single Judge concurred with the findings and dismissed the writ petition. This is the appeal against that order. The appellant’s only grievance is that the punishment awarded to him did not commensurate with the gravity of charges levelled against him. It is well settled that while exercising the power of judicial review, the Courts shall not normally interfere with the punishment imposed by the competent authorities. In State Bank of India v Samarendra Kishore endow (1994 (2) SCC 537) the Apex Court has held that imposition of proper punishment is within the discretion of the Disciplinary Authority. As noticed earlier, the writ court has concurred with the findings of the Disciplinary Authority that the charges against the appellant have been proved and are not inclined to take a contrary view. It would not be proper or appropriate to minimise the gravity of the appellant’s misconduct for which the respondent thought it fit to impose maximum punishment of removal from service. In this view of the matter, it would not be appropriate to interfere with the punishment awarded to the appellant. Even otherwise, there is nothing on record to show or suggest that the punishment awarded to the appellant did not commensurate with the gravity of charges found proved against him. Thus, in the opinion of the H.C., the impugned order does not suffer from any legal infirmity warranting interference. In the result, the H.C. dismissed the appeal and declined to interfere when writ court which has concurred with the finding of the Disciplinary Authority. |
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The conservative statements by Chairman Sunil Mittal ahead of Bharti’s IPO and the lacklustre stock performance of the other major private telecom player Hughes Tele.com seems to have made retail players even more wary. Meanwhile, institutional players are reported to have been aggressive sellers at the counter on day one itself. The subdued trend clearly indicates some more follow up selling. There is little dispute as far as the fundamentals of the J&K Bank stock are concerned, but players seem to be a little wary about the liquidity factor, which could be an impediment for easy movement in and out of the stock. Shares of Ranbaxy are reported to have been picked up across a clutch of foreign broking houses. Even as SBI is making a strong plea for reduction in RBI’s stake in the bank, a domestic brokerage is reported to have picked up a substantial quantity. Eternit Everest may see some action on the back of ACC having acquired 74,00,010 equity shares (constituting 50 per cent of the total equity capital) on February 12 following the transfer of shares between promoters. Nalco may rise after the company informed that in light of the proposed divestment of the company by the government through ADR/GDR, it would seek the approval of the shareholders to increase the aggregate ceiling of FII portfolio investment up to 49 per cent of its equity. Godrej Consumer Products may gain after the company announced that it will enter into the deodorants category with the launch of Cinthol International perfumed deodorant. TVS Motor may continue to spark on continued buying interest, says an analyst. Kinetic Engineering may attract interest on reports that the company hopes to sell about 70,000 bikes in FY 2002. Cement stocks may weaken after prices of the product fell due to an apparent breach in the informal agreement among manufacturers. Knoll Pharma may remain in the limelight after the company announced that its board will consider a proposal of buy-back of shares on February 27 along with its FY 2001 audited results and dividend. State-run basic and cellular telecom service MTNL may advance on reports that the Tata group, which recently acquired 25 per cent stake in VSNL, is open to acquiring other government controlled telecom firms like MTNL. Although Mastek’s stock price has seen significant appreciation in the recent past, we see further upside from current levels as the company offers significant promises for margin improvement and the prospects of its JV with Deloitte. Given the company’s growth prospects, we recommend a Buy, asserts a brokerage house. The government is also considering
early dismantling of retention pricing mechanism for Urea. Indo
Gulf could be a big beneficiary of this move as it is among the
most efficient urea producer in the country. — Ashok Kumar
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Allahabad Bank Uco Bank |
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