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Sunday,
August 11, 2002, Chandigarh, India  
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Govt
likely to delay PTL disinvestment Forex
reserves cross $ 60b mark Tatas: TFL
row not corporate fraud Farm loans
not beneficial for farmers |
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Gold
price zooms Labour
reforms only after discussion In the
wonderland of investment
Quick
clearance system soon
Compassionate
employment
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Govt likely to delay PTL disinvestment New Delhi, August 10 Industry observers said that tractor manufacturers in the country are on a destocking spree over the last six months - a move aimed at reducing the
cumulative inventory pile up. The estimated inventory level in the sector is estimated to be in the range of 80,000 and 120,000 units representing 50 per cent of annual sales of the sector. Industry sources said that inventory to the extent of 3,000 units were reduced during the first two months of the current financial year - April and May 2002. The financial parameters of PTL in recent months itself suggest that the company is not in the pink of health. Even as the industry is in the midst of a major demand slump, the Punjab Government is reportedly expecting Rs 300 crore from the disinvestment process. While Rs 225 crore is expected to generated from the value of shares of PSIDC, another Rs 75 crore is being expected through sale of management right in the company to the strategic partner. The stock of Punjab Tractors is currently trading at around Rs 150 and sources pointed out that the adjustment of excess inventory in the system will take at least another 15 months. Observers said that it is important to take note that given the fragmented nature of land holdings, farm mechanisation has not shown a significant increase. Besides, as an observer pointed, since a typical farmer earns his annual income in just five critical months, he is cautious and price sensitive. “The government does not seem to be making matters easier. Mounts of food stock with the government have been depressing farm prices. For instance in the last fiscal year, while agricultural production is estimated to have increased by more than seven per cent, farm output was lower on the account of lower prices. This is clearly reflected in the current year’s tractor sales, which dipped sharply by 16 per cent”, said an observer.
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Forex reserves cross $ 60b mark
Mumbai, August 10 Total forex reserves rose by $ 281 million to $ 60,148 million during the week while in rupee terms the reserves gained Rs 1,201 crore to Rs 2,92,636 crore. According to the RBI weekly statistical supplement, the increase in foreign currency assets by $ 360 million to $ 56,887 million was the main factor pushing up the forex reserves while the increase in the special drawing rights (SDRs) by $ 3 million to $ 13 million also contributed its share. However, gold reserves dropped by $ 82 million to $ 3,248 due to the fall in gold prices. According to forex experts, the continuous indirect intervention by the RBI in the forex market was the main reason for the rise of the forex reserves. The RBI was mopping excess dollar supply from the market through state-run banks in order to stem the rupee’s appreciation following the sharp fall of the other currencies against dollar during the week. However, the fall of the non-US currencies like euro and yen held in the reserves as well as the drop in the gold prices limited the increase in forex reserve. During the week, the rupee gained three paise against dollar to 48.65 from 48.69 of the previous week despite active dollar buying by state-run banks. Euro, pound sterling and yen became cheaper by 56, 47 and 50 paise at Rs 48.16, Rs 76.41 and Rs 40.93 as they fell sharply against dollar.
UNI
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Tatas: TFL row not corporate fraud
New Delhi, August 10 Blaming the media for carrying out a vilification campaign, the Tatas said in full page ads in leading national dailies that sections of the media were carrying deliberate, distorted and sensationalised versions on withdrawal of a confidential audit report by A F Ferguson, which had been appointed last year to undertake a comprehensive investigation on financial irregularities in Tata Finance (TFL). Commenting on the entire episode, including sacking of the Managing Director Dilip Pendse following detection of a scam, the Tatas said “despite knowing that the company’s management had committed grave misdeeds, TFL, under the Tata management, had the moral courage to lay bare the facts, terminate the services of the entire senior management team, commission an independent investigation and file civil and criminal cases regardless of the consequences.” The ad comes amid reports that the Mumbai police had virtually given a clean chit to Pendse on the basis of enquiry and report of Ferguson, which was withdrawn earlier this week along with auditing firm sacking the author and its partner Y M Kale. While distancing itself from Kale’s ouster and dispelling charges of armtwisting, the Tatas said “proactive actions (by the group) make this case distinct and different and these cannot be compared to corporate frauds committed in various parts of the world including India.”
PTI
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Farm loans not beneficial for farmers Chandigarh, August 10 Nabard is collecting data on crop losses at its own level. Mr P. Satish, General Manager, Nabard (Regional Office) admitted, “the farmers will not directly gain anything through rescheduling of loans, except additional burden of interest. However, they will not be declared defaulters in case of their inability to repay loans.” All banks had released a total credit worth Rs 5,500 crore to the farming sector in Punjab, including Rs 4,500 crore as crop loans and Rs 1,000 crore as agricultural term loans during 2001-02, which was estimated to reach Rs 6,700 crore during the current fiscal, including Rs 5,370 crore as crop loans and Rs 1,350 as agricultural term loans. In case of Haryana, the total agricultural credit was expected to increase from Rs 4,407 crore to Rs 5,626 crore during the period. Farmers in Punjab and Haryana, who have a much better track record of repaying loans as compared to the industry are paying an interest at 11.5 per cent to 13 per cent to commercial and regional rural banks. Co-operative banks are charging even up to 13.5 per cent interest on agricultural loans. Mr Ajmer Singh Lakhowal, State President, Bharti Kisan Union, said, “The farmers would have to spend on an average Rs 3,500 per acre additionally, including Rs 2,500 on diesel and Rs 1,000 on weedicide. But the state government after much delay has now announced just Rs 700 per acre as compensation. We have urged the government to waive off interest on all agricultural loans besides increase in compensation.” Prof Sucha Singh Gill, Senior Economist, at Punjabi University, Patiala, pointed out that instead of going to Delhi every time with a begging bowl, the state government should set up state calamity fund on the pattern of Centre to deal with such unusual situations.
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Gold price zooms
New Delhi, August 10 Silver and its coins also spurted on emergence of buying by local customers for ensuing festival season beginning from next week. Marketmen said gold notched up hefty gains following buying by stockists who build up fresh positions to meet demand for the festival season
beginning from next week.
PTI
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Labour reforms only after discussion
Faridabad, August 10 Addressing a function after inaugurating the Rs 4.32 crore Dr Shyama Prasad Mukherji Social Protection Administrative Institution here, the minister said the labour reforms report would be thoroughly discussed in Parliament before being implemented. He said the endeavour of the National Democratic Alliance government was to create a conducive environment between the entrepreneurs and the workers so that the industry flourished and employment avenues generated. The government would ensure that industrialists did not exploit the workers and gave them their due share, he added.
UNI
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In the wonderland of investment Q:
I left India 48 years ago and own an ancestral property mostly dry land with fruit trees near Bangalore, India. I am now retired and getting up in age and wish to sell my land. If I sell the land near Bangalore can I convert
India, currency to American currency and repatriate the funds? What are the tax implications on the sale proceeds in India? — S.R.V. Reddy, Manitoba, R3P 0C8 A: The government has liberalised the rules related with repatriation of assets. For instance, citizen of foreign state (other than of Nepal and Bhutan) can remit upto a maximum of Rs 20 lakh per calendar year, if said citizen satisfies any one of the following requirements: a) Retirement from an employment in India. b) Assets are inherited from a person who was resident in India. c) Assets are inherited from husband who was Indian citizen resident in India, by widow who is resident outside India. You have not indicated whether you have changed your citizenship during these 48 years. Even if the above criteria do not apply to you, you may make an application to RBI seeking its permission to repatriate your funds these days, thanks to the comfortable forex reserves of India, there is a high possibility of you getting the permission.
Q:
I am over 65 years of age and am orthopaedically handicapped. I get a pension of about Rs 4,000 p.m. I also have two bank deposits earning Rs 10,000 and Rs 12,000 interest per annum. I do not possess even 1 out of the 6 (car, property, mobile telephone) criteria required for compulsory filing of income-tax return. Am I required to file income-tax return? My income is low and there is a great difficulty for me to find out a CA/advocate for this. They exploit us. What should I write to the income tax authorities if I can’t file my income-tax returns? — B.R. Khurana, Saharanpur A: Whatever gave you the idea that you are required to file income-tax returns? Your pension is about Rs 48,000 per year and after standard deduction the taxable pension will be around Rs 32,000. Even if you add interest from bank deposits your income will not cross Rs 50,000. You are also a senior citizen. All these factors are in your favour. However, there is only one factor against you. TDS may be deducted from interest on your bank deposits there is no need to file any return. Form-15H can be filed by you with the banks. This is a declaration that the amount of income received by you as interest on securities and units does not exceed the maximum amount which is not chargeable to income tax. Since you are earning only Rs 22,000 from bank deposits there will be no problem for you in making such a declaration. The recent Finance Act has made some amendments to this section which are quite confusing. Formerly, the declaration required was that the tax on the total income is nil. This has now being changed to income being less than Rs 50,000. This means that senior citizens with an income from securities of more than Rs 50,000 cannot submit Form 15H. They will have to suffer the TDS even if the tax payable in nil. Filing the returns becomes mandatory in their case. You do not need to file income-tax return.
Q:
Which is the block of two years for LTA? If I don’t claim my LTA this year and claim it cumulatively next year for 2002 and 2003 between Jan 2003 and March 2003 and use this full amount for going on a holiday will I be able to save tax on the full amount of LTA claimed for 2 years together? — M.R. Dadina A: The block of four years starts from 1.1.02 to 31.12.05. Normally tax matters deal with financial year but for LTA it is the calendar year. The exemption is available for 2 journeys in a block of 4 calendar years. Where an individual has not taken any LTA during one block, he can avail of it during the 1st year of the next block. If he does not travel during any of these years, he loses the privilege. Current block of four years is from 1.1.02 to 31.12.05.
Q:
I have been working in UAE for the past 25 years and have some deposits in India. I intent to return to India soon and would like to know: 1. What is the best way to invest these deposits to pay minimum taxes or no taxes. 2. Is it advisable to transfer all deposits of RFC, and if so should I do this before my return to India or this can be done even after the maturity of present deposits either FCNR and NRE. 3. If I want to gift some of these deposits to my close relatives, can it be done after the maturity of the present deposits, or should it be done before my return to India? Or can I transfer or gift these deposits as they are without affecting their current validity period, or I should withdraw and then gift the amount to my relation. — Abdulkarim S. Bakhar, UAE A: 1. This depends on your financial data and personal needs. 2. I do not personally like RFC. this can be opened only after your return. 3. If the relatives are residents, they cannot hold NRI-related accounts. The gifts can be given after maturity only. I do not personally favour gifts.
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Countdown to smoke Over the last nine months or so, this column has been predicting that there are ‘ominous smoke signals’ in the offing for the tobacco industry. The grapevine from the capital is that the
tobacco industry, notwithstanding its strong lobbying power is likely to be down and out for the count soon. Watch this space!
Theatrical revenues The grapevine has it that the company which runs the world’s largest IMAX dome theatre is now raking in the
moolah, by offering to outsource its theatre management expertise to other theatre owners. Little wonder then that it is rumoured that a couple of FII’s have evinced keen interest in this
company.
Petro punch The grapevine is abuzz with rumours that one of the largest private sector players whose penchant for stock-market operations is almost legendary is now getting set for a
petro-punch. Those who can read between the lines will undoubtedly stand to
gain.
FICCI & starsigns What’s common between FICCI & the star-signs. Well, practitioners at both, it seems are willing to back the BSE Sensex touching the 5000 points level this year. At least someone seems optimistic! |
rc
by K.R. Wadhwaney Quick clearance system soon The installation of the centralised user terminal equipment in the departure concourse of the IGIA at Delhi is expected to be ready for operations from April next year. The sophisticated system, as is in operation in some foreign airports, entitles passengers to check-in from any counter, irrespective of the airline he is flying. The system will reduce congestion at certain counters during peak time and when flights are bunched for some unavoidable reasons. The passengers will not have to jostle around, as it often happens. If handled professionally and meticulously, the clearance of passengers will be quick. It is a unique system in many ways. But some problems pertaining to check-in baggage and over-booking need to be sorted out. Every counter will have to be equipped with tags of all airlines operating out of the IGIA. Every counter official has to be extracareful in fixing correct tag and destination. If he errs, the incidents of mishandled checked-in baggage will increase causing problems to passenger. In this country. many carriers resort to over-booking in peak seasons. No one is able to explain how this problem will be sorted out when passengers flying by a particular airline are checking-in from different counters. According to some officials of international airlines, there are many problems that the Airports Authority of India (AAI) has not fully looked into. “We have reservations but we have agreed under pressure”, said three senior officials of an airlines. The AAI has embarked upon an ambitious plan of air-conditioning aerobridge panels, improving courier services installation of railway reservation counter and provision of several other facilities to give a fresh look to the IGIA.
Reduction in subsidy After detailed discussion, the government has decided that Haj pilgrims should be treated differently. It is planning several dos and don’ts for Hajis. There will be certain restrictions. An important restriction is that a Haji will be provided concession and extra facilities only once in his life-time. The round-trip air-fares will no longer be as heavily discounted as has been the case so far. These restrictions will reduce the quantum of Hajis to a great extent. The subsidy is likely to be reduced from Rs 150 crore to less than Rs 100 crore.
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by Praful R. Desai Compassionate employment Q: Whether appointment on compassionate ground can be claimed, even after several years of the death of the employee, as a matter of right? Ans: In Haryana State Electricity Board v Krishna Devi (2002-II-LLJ-773) S.C. answered the question thus: In this appeal, by special leave, appellant — Haryana State Electricity Board has impugned, the judgement of the P&H, H.C. dated 21.9.1994 passed in C.W.P. No. 4172/1994. The writ petition was filed by the wife of Sunder Dass, who was working as a “Work-charge T-mate” under the appellant. Sunder Dass died in harness in the year 1984. After eight years of death of her husband i.e. in 1992, the respondent — Smt Krishna Devi filed an application before the appellant to give employment to her son Rajesh Kumar on the basis of ex gratia policy of the Board. As the application was rejected by the Board, the respondent had filed the writ petition. The H.C. relying on an earlier decision of the same Court, allowed the W.P. i.e. appellant was directed to give employment to the son of the respondent. The S.C. in the present appeal heard the submission of both the parties and observed that, it is well settled that employment on compassionate ground is given only on pure humanitarian consideration and no appointment can be claimed as a matter of right. The main object was to provide immediate financial help to the family of the deceased employee. It is also well settled that employment under compassionate ground cannot be made in absence of rules or instructions issued by the Government or any public authority. Admittedly, the application was made by the respondent after a lapse of 8 years of death of her husband. At that time there was no rule for such an employment. Subsequently, however, in the year 1985, the appellant-Board issued a circular framing scheme for such employment to the dependants of the deceased worker. The husband of the respondent died in 1984 but at that time, the above scheme was not available. As the application for employment of her son on compassionate ground was made by the respondent after eight years of death of her husband, the S.C. held that it was not to meet the immediate financial need of the family. The H.C. did not consider the position of law and allowed the W.P. replying on an earlier decision of the H.C. In view of the above settled position of law and as the application was filed after eight years of the death of her husband, the S.C. thus held that the impugned order is not sustainable. If the impugned order is allowed to stand, the purpose of making appointment on compassionate ground would frustrate. Consequently, the S.C. set aside the impugned order of the H.C. and thus the appeal was allowed. |
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