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Monday,
June 3, 2002, Chandigarh, India  
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Gold
prices may rise further HOW I STARTED Investment
options now |
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Inflation
skids to 1.43 per cent Graphic: Market
watch
War
fears keep market down
House
building loan
Cross-examination
is an exception
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Gold prices may rise further LUDHIANA: The gold prices continue to rise despite the fact that there is no demand for the same and even import of gold has fallen during the first quarter of 2002. The World Gold Council has predicted that gold price would touch Rs 6000 per 10 gram of 24 carat. The price was quoted at Rs 5600 per 10 gram of 24 carat. Inquiries by The Tribune show that there is a slump in the market and there are not many buyers for gold. But strangely enough the prices continue to rise in the international market which have affected the local markets. Some of the jewellers interviewed by this reporter maintain that the World Gold Control Council controls the prices of gold in the world. It is a commercial organisation and it always tries to cash on the market trend. Since India has lost in the stock market and India’s demand has fallen for gold. The common man does not want to spend in the stock market nor in the UTI after the UTI scam. The common investor is bewildered how could he build his money. The rate of interest in the savings in the post offices and the banks have also been reduced with the result that the savings in the banks have started falling. ‘Gold price’ was quite stable for a number of years and the gold control council without any valid reasons though of cashing on the gold prices. It was $ 272 troy ounce in 1997 and today it was quoted at $ 321.40 per troy ounce. Price increase is absolutely without any rationale’, says Mr Amarjit Nagpal of Tanishq India Ltd. It is just imaginary hike in gold prices and the Gold Control Council likes to take benefit of the same. Regarding the prediction of the World Gold Control Council that the prices would touch Rs 6000 per 10 gram of 24 carat, Mr Nagpal says that this is just a commercial declaration.
Fall in import
Enquires further show that there was 40 per cent fall in the import of gold by India in the first quarter-April to June 2002. The fall in the value of rupee against US dollar is also playing its part in the rise in the prices of gold. The reasons for rise in the prices of gold are not many and the international community is attributing the stand off between India and Pakistan on the issue of Kashmir as one of the reasons. A report from London quoting London bullion market says, ‘Gold cantered to fresh two and half years highs on Tuesday as investors bought into the safe haven metal keeping in mind Indo-Pak stand off. Gold was set or ‘fixed’ in London at $ 321.40 troy ounce. Its highest fixing level since October, 1999. The ‘fix’ is a price set by the market makers with the London Bullion Market Association. Gold has gained around 15 per cent this year due to its safe haven status. It rallied $ 60 to $ 400 an ounce when Iraq invaded Kuwait in 1990 as funds piled into the metal market as stock markets and the dollars winced as oil prices rocketed.’ The gold prices started rising about two and a half months ago when the same was quoted at Rs 4500 per 10 gram for 24 carat and there has been an increase of Rs 1100 per 10 gram. As a matter of fact immediately after the attack on the Parliament on December 13, the prices of gold started rising, although there is no demand in the local market. There are not many buyers in the mandi these days. During a visit to some of the leading show rooms of the jewellers which used to be humming with customers, this reporter found the same were almost deserted.
Political reasons
Mr Manak Chand Jain and Mr Chander Kant Jain of Nikka Mal Jewellers maintain that the political factors like cross border terrorism and tension on the Indo-Pak borders have helped in the rise in the prices of gold. They disclosed that for 10 years, there was stability in the prices of gold and same came down to Rs 4500 per 10 gram for 24 carat from 1992 to 2002. Jain brothers say that locally there is lean period as not many marriages are taking place. There is a fall of 50 per cent in the demand for gold and this happens every year. The buying of gold starts after Rakhi festival and during Diwali festival it is at its peak. Another leading jeweller says that after the VDS (Voluntary disclosure scheme) of Income tax Department buying of gold has fallen very much. This scheme was launched three years ago. The people have got their black money converted into white under the VDS.
Sale by SBI
The sale of gold by the State Bank of India, Civil Lines, Ludhiana branch has also be en affected due to slump. According to the bank officials, there is not much demand for the gold biscuits as the bank sells only to the wholesale dealers. In the month of March, the bank had sold as many as 700 pieces which fell to little over 100 pieces in the month of April, they revealed. The bank does not book orders less than ten bricks. Despite the fact that there is low demand for gold, Tanishq launched a scheme to exchange impure gold with pure gold from May 15 to 27 and according to the spokesman of the same, they have been exchanging impure gold with pure gold worth Rs 20 lakh to Rs 25 lakh daily at their branches in Ludhiana, Jalandhar, Amritsar and Chandigarh. Although there is less demand for gold and trend is now for buying diamonds, the ladies still prefer to keep gold for rainy days. Some of the ladies belonging to rich and upper middle class families believe in flaunting their jewellery at the now very common meeting place of kitty parties. They wear both golden ornaments and diamonds... at such kitty parties and wedding parties.
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HOW I STARTED LUDHIANA: “The apparel market was never so saturated as it is today with branded clothing from multinationals as well as local manufacturers. But at the time when we started way back in 1986, there were only a few local brands in the market and we immediately realised that there was a vacuum that could be filled well”, say the Kumar brothers, Balbir and Harsh, Directors of Octave Apparels. Harsh who was pursuing accountancy to become a Chartered Accountant had already passed the intermediate exam, but was not really happy with what he was studying. “I was feeling slightly frustrated and since I wanted to leave pursuing Chartered Accountancy my third brother Vijay Kumar stepped in to suggest that I should start manufacturing T-shirts’, he recalls and goes on to narrate how he has come to become a competitor to brands like Numero Uno, Benneton, Wills, etc. The idea appealed to me even though I did not have any background in the knitting industry. However, I did not rush through the proposal, as I wanted to do my homework well. Consequently I did a market survey about the desirability of the product. I found that something was definitely missing from the market and there was a strong need for top class product. There was no dearth of the average and the basic products. My brother suggested the brand name Octave that clicked so well that today it is one of the very select few brands in the country with competition with brands like Numero Uno, Lee Cooper, Will Sports and others. We started making products for the top market segment and specialized in that only. Initial phase
While, I and my brother were trying to get our bearings right, we came in contact with Mr Varinder Chopra, a free lance marketer, promoter and agent with a good reputation. His experience proved to be of immense help. We started manufacturing the product in October 1990 and for the first time we came into the market in the summer of 1991. The product was received very well and it achieved a phenomenal success in terms of sales. It was a good beginning and we felt encouraged.
Marketing strategy
Since then we have consistently tried to sustain that trust our product received in the first year. Our main focus has been producing contemporary clothing which is comfortable and on the verge of fashion. But at the same time it is not high fashion that would seem incoherent and incongruous with the social norms. At the time we started, there was no experimentation in the manufacturing of T-shirts and most of the manufacturers would restrict themselves in producing only the plain things. There was no trendy stuff available in the market and we took advantage of it.
Future plans
Today besides supplying our product across the country, we have three exclusive show rooms at Chandigarh, Amritsar and Jalandhar. Two outlets would shortly be opened in Delhi and Bombay. We are manufacturing T-shirts, shirts, sweatshirts, jogging shirts, trousers, jackets, socks, men’s brief and sunglass eyewear and soon we would also increase the product range.
(As told to Naveen S. Garewal)
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Investment
options
now Chandigarh, June 2 Equities "Time is ripe for investment in equities", says Mr Sanjay Tandon, Competent Group, adding that, "the reduced rates give one greater chances of earning profits". There is a word of caution here. "Equities are good but for the long run". According to a survey by Templeton Franklin, over a given time-period while it was the bank deposits which outperformed other forms of investment in medium time period, for more than five years, equities outperformed all other forms of investment thereby showing these pay off well to invest in the equity market in the longer run . "In the short-time period, equities can be extremely volatile", says Mr Rajesh Sharma of Investsmart India. The present levels are specially attractive for those who lost the opportunity to invest around six-seven months ago when the market was as low as 2795 points on BSE. Equity-linked mutual funds However, safety and liquidity being the option in the existing situation there are various other options like equity-linked mutual funds, liquid funds etc. According to the investment advisers, investment in equity-linked mutual funds will also pay off well. A majority favour equity mutual funds especially in cases where one is not thorough with the market trends or does not have the time to devote to analyse the market. Templeton India Growth Fund, Alliance Equity Fund, Pioneer ITI Blue Chip Fund, Pioneer ITI Equity Fund and Zurich Equity Fund are a few of the equity-based mutual funds in the market. Debt Funds Earlier debt funds were given prime importance, these seem to have taken a back seat now. Depending upon the time period, one still can invest in debt funds because of the safety feature there offer. Liquid Funds Liquid funds which invest into inter bank call rates are providing close to 7 per cent average return which is highly commendable for short term. Compared to the savings account, the returns here in the short term one can even plan to park his funds in the liquid funds. IDBI Cash Management, ICICI Liquid Fund and Templeton Liquid Fund are a few of the liquid funds in the market these days. Income Funds and Government Securities For the medium term investment, the investment advisers say income funds and government securities are the best option. In case of income funds, one can look forward to an annualised return of 9 to 10 per cent. During the shorter duration, however, returns in this case could even be negative or zero. JM Income Fund, Kotak Mahindra K30Wholesale Plan, Birla Income Fund and Templeton India Income Fund are a few of the income funds .The rate of return in a few of these in case have been even as high as 15 per cent, say the advisers. In case of more than one year, one can also look in for government securities. Fund manager in case of government securities seeks to generate credit risk-free returns. But in the secondary market this is a highly volatile product. So it is advisable that one goes in for these when the time of investment is more than a year." Returns in this case (annualised) are around 8 per cent. Banks Experts recommend putting money into
banks due to the safety being offered. Says Mr Iqbal Singh, Investment
Adviser, HDFC Bank. "Banks will be a good option but you must
evaluate the taxation factor also in this case", said an
investment consultant. A certain amount of cash will also not be a bad
option considering the existing situation, said Mr Rajesh Sharma.
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Inflation
skids to
1.43 per cent
New Delhi, Jun 2 Though prices soared for vegetables, maize, ragi, arhar, coconut oil and assembled car chassis, it was to a great extent contained, dipping the price level measured by Wholesale Price Index (WPI) with 1993-94 as the base. The WPI, close on the heels of point-to-point change, was up by 0.1 per cent to 162.8 from the previous week’s level as price rose for manufactured products, even as primary items became cheaper with fuel items remaining stuck. The index was 160.5 in the previous year.
PTI
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by R.N. Lakhotia House building loan Q: I am a Government employee. I want to take loan for the construction of first floor under H.B.A. scheme. Please clarify, am I entitled for rebate in Income-tax or not? — D.S. Sallan, Ludhiana Ans: You would be entitled to tax rebate and deduction in respect of the house building loan taken by you for construction of first floor of your house. LTC Q: Please confirm that encashment of earned leave for 30 days at the time of availing leave travelling concession (LTC) is exempted from taxable salary. Can this exemption be granted by employer at his own level. —Sushil Singla, Patiala Ans: Please note that encashment of earned leave would be subjected to income-tax. Your employer will be required to deduct tax at source on this amount. Tax savings Q: I retired from service on 31.5.2001 at the age of 60 years. During 2001-2002 my total income will be Rs. 2.29,774/-. The details are given below: 1. Pay and pension Rs. 1,16,526/- 2. Interest on fixed deposit Rs. 70,198. 3. Interest on post office MIS Rs. 42,750/- (i) Now how much tax I shall have to pay after investing Rs. 80,000 in MF. (ii) Can I get a tax rebate of 15,000/- being senior citizen as defined by SBI for granting one percent higher interest rate on fixed deposits to senior citizen? (iii) Is interest on post office MIS tax free, if so under which section. — Jagmohan Singh, Shimla Ans: From your pension income you will be eligible to claim standard deduction as is available to the salaried employees. The benefit of tax rebate u/s 88B amounting to Rs 15,000 which is available to senior citizens will not be available to you. This is because of the fact that under the provisions of the income tax law a person is treated as a senior citizen when he has completed 65 years of age. The interest income from the monthly income scheme of the Post Office is exempted u/s 80L together with other incomes subject to maximum of Rs 9,000 p.a. House Rent Q: I am working in a privately managed government aided technical institution situated in a village having a population less than 10,000 in Haryana. It is about 10 km from district headquarters. I have been provided an unfurnished accommodation in the campus. I am paying 5 per cent of my basic salary for the same and not getting any HRA. Please clarify — (i) whether I am entitled for CCA (City Compensatory Allowance). (ii) As per notification No. 313/2001 dated 25.9.2001 applicable from Ist April 2001 regarding 7.5% perquisite, whether this rule applies for cities or for villages/rural areas also. — Dinesh Kumar Ans: As per perquisite rules the values of perquisite for unfurnished accommodation in a small village be 7.5 per cent of the salary. However, your employer is making a recovery of 5 per cent hence 2.5 per cent of the salary will be treated as the perquisite value of the unfurnished accommodation provided to you. Whether you are entitled to city compensatory allowance or not is to be decided by your employment’s terms & conditions. However, the same would be taxable under the income-tax law. |
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by Pushpa Girimaji Cross-examination is an exception Imagine this scenario. A consumer, who is a victim of a deficient service or a defective product musters enough courage to knock at the doors of the consumer court for justice. He is led to believe that the procedure before these courts is simple and the adjudication, quick. However, the ground reality turns out to be quite different. The dominance of lawyers, repeated adjournments given at their behest and the needlessly complicated and time-consuming procedures adopted by the courts make the consumer wonder whether he did the right thing in going to the consumer court and representing the case himself. And even as he is trying to understand and absorb the legal jargon being used in the forum, he is told that he is going to be ‘cross-examined’ by the lawyer representing the opposite party. Enough to make even the toughest of consumers jittery! Given these circumstances, a recent order of the apex consumer court in the case of Con Décor vs Smt Smritikana Ghose (RP NO 518 of 2002, April 16, 2002), holding that cross examination of a witness or a party before a forum constituted under the Consumer Protection Act cannot be permitted as a rule should bring cheer to consumers. Pointing out that many disputes involving high stakes and huge values are decided in writ jurisdiction by the High Courts and Supreme Court merely on the basis of affidavits, the National Consumer Disputes Redressal Commission observed that it did not therefore appeal to reason that when the Consumer Protection Act permitted evidence to be led by means of affidavits, the right of cross examination be resorted to in every case. Today, one of the biggest criticisms against consumer forums is that they are turning into civil courts. The Commission also touched upon this issue when it warned the consumer courts at the district and the state level to exercise extreme caution in permitting cross examination. . “If cross examination of a person is permitted in every case under the Consumer Protection Act, then the whole object of this Act would be lost and there would hardly be any difference in the proceedings before a forum under the Act and a civil court”, the Commission said. In this case, Mr and Mrs Ghose, residents of Kolkata, had purchased a flat in a residential complex in Vishakapatnam in Andhra Pradesh and had entrusted the work of interior decoration to Con Décor for an estimated sum of Rs 6,38,795. The couple paid 50 per cent of the amount as advance and subsequently, an additional sum of Rs 1.5 lakh. However they found the work totally unsatisfactory and on the ground that only work worth Rs 1 lakh had been executed, they demanded that the rest of the money be returned. Since there was disagreement on the quality and the quantum of work carried out by the interior decorator, the District Consumer Disputes Redressal Forum before which the couple filed the complaint, appointed a local commissioner to examine the work and submit a report. Con Décor appealed against the order appointing the local commissioner before the State Consumer Disputes Redressal Commission and also filed a writ petition against it before the Andhra Pradesh High Court., which was dismissed. Not content with the delay all this caused, he sought postponement of the date of the visit of the local commissioner which was not agreed to. He then sought permission to cross examine the commissioner. The Forum disallowed it on the ground that he had been given time to file his objections to the report of the commissioner and he had not placed any evidence to show that the local commissioner’s report was incorrect. The local commissioner’s report put the expenditure incurred by the interior decorator at Rs 1,09,600. The District Forum, after a detailed hearing, concluded that at the most, the expenses incurred by the decorator would be Rs 2 lakh and accordingly directed him to return Rs 2,69,397 with interest at the rate of 12 per cent calculated form the date of the complaint. The State Commission before which Con Décor filed an appeal, upheld the decision of the lower consumer court. This time the interior decorator filed a revision petition before the National Commission challenging the order on the ground that he was not allowed to cross examine the local commissioner and this constituted violation of the rules of natural justice. His other contention was that the local commissioner had not postponed his visit on his request. After examining the provisions of the Consumer Protection Act and referring to a decision of a Constitution Bench of the Supreme Court (State of Jammu and Kashmir vs Bakshi Ghulam Mohammad) on the subject, the apex consumer court concluded that cross examination of a witness or a party before a consumer forum is not a rule, but only an exception. It also came down heavily on the revision petitioner for seeking to postpone the visit of the local commissioner and said “any request for adjournment in the proceedings before consumer forum unless circumstances are beyond the control of the party is quite abhorrent.” |
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