 |
Monday,
October 14, 2002, Chandigarh, India  
|
Gold does not glitter any more MARKET UPDATE
Arrest warrants against Delhi Autos MDs |
|
|||||||||||||||||||||||||||
|
Inflation falls New Delhi, October 13 Inflation fell for the second consecutive week by another 0.24 per cent to 3.34 per cent for the week ended September 28 even as global crude prices firmed up on threats of a possible US strike over Iraq.
Housing loan
Avoid signing one-sided contract
|
|
Gold does not glitter any more INDIAN women may have triggered the gold rush at Busan, but for the younger women in north India gold does not dazzle any more. Gold jewellery is no longer treated as an object of security. Pieces of jewellery may not be ornate, but they must exude taste. An ornament with captivating looks commands a much higher clientele compared to a pure 22 or 24 carat piece of yellow metal. Gold economics has undergone a sea change over the past few years due to several factors. One of them being the influence through cable and shrinking of the globe that exposed people to the western style of dressing, mostly elegant stuff compared to the garish stuff that you see on traditional Indian weddings. Even the people, who do buy the yellow metal today, prefer to throw in some colour in terms of crystal, diamonds, pearls or other precious or semi precious stones. This has resulted in people buying small and dainty jewellery. The demand of gold — the world over, has not met expectations. From a demand of 2,750 tonnes in 1996 it is around 3,500 tonnes currently. Over the past two years the increase has been much below expectations and the sales have been marginal and not strong enough to change the trend. Gold prices have been fluctuating between Rs 4620 in January 2000 to Rs 5270 (for 10 gram) at present, touching a high of Rs 5500 towards the end of May this year. The current international gold price of US $ 290 is stated to be slightly on the higher side and expected to settle between US $ 250-270 per troy ounce. Economic experts feel that theoretically, gold prices should be soaring because during the past decade annual production of gold has fallen short by around 2,764 tonnes. With more central bank sales, there will be increased availability in the market. The government has permitted banks to buy and sell gold like foreign exchange making the availability common place. Besides, the new legislation that NRI can now bring in ten kilos (332 troy ounces) of gold has also prevented gold prices from being pushed up. A London based homemaker, Puja Khanna Bhagat says “it is not as if people have stopped buying jewellery, only they have stopped accumulating the yellow metal, hitherto considered to be an investment or a sign of security. The number of customers on a gold shop is still the same, but the quantity of gold they buy is much smaller because most women up to mid-forties prefer dainty little pieces to ugly pieces of pure yellow metal”. No wonder then that people prefer to invest in high quality diamond solitaires, each costing over a hundred thousand, studded in white gold rather than the traditional yellow, thereby plummeting gold sales. Current trends show that people are buying in the same old fashioned way, but the weight of gold bought today is in miniscule of what it used to be one or two generation ago. The shift can be attributed to awareness of global fashions, while Ms Puja feels that buying huge amounts of gold by the elders stemmed from insecurities that most families faced, soon after partition. The new settlers wanted something that they could depend upon in terms of financial security. Jewellery was bought for its value and not looks, especially in three or four post partition decades. This argument is corroborated from the fact that pre-Partition jewellery had a lot of filigree and stones. But things changed in the 1950's. Once people realised that gold once bought remained confined to the lockers in a bank and was never sold, the trend is now moving towards wearable jewellery. It is the middle and the upper middle class that forms the bulk of jewellery buying community and this class is very fashion conscious, hence the sharp drop in volumes, feels Ms Natasha Ahluwalia, a beauty therapist who deals with scores of women everyday discussing jewellery. She opines that imitation jewellery can never give you the same confidence that one gets from pure gold. Though, the degree of financial security a woman seeks from gold has decreased with women getting alternate avenues to save and invest, but still most people prefer to have gold as the base for their jewellery. She herself is confident that trend of wearing pure gold jewellery sans any precious or semi precious stones is bound to come back sooner or later. Dietician by profession, managing the Slim and Shape in Ludhiana, Ms Archna Sarup attributes the change in trend to the way people think. “Earlier the amount of gold you wore reflected the kind of family you belonged to. But people now go more aesthetic and white gold or platinum has become a rage. The desire to play down is reflected in the desire to get radium or platinum polish on gold. Gold ornaments are given a pink or copper finish to break the garishness. Working women do not need the security from gold that their mothers looked for from gold. This is one of the factors why women no longer hesitate from investing in stones, even though they may not have much resale value. Also the working women look for jewellery they can wear to work. Many women, who would have ordinarily gone for gold, now look for diamonds, says Ms Archna Nagpal, herself a jewellery designer. She explains that this shift in the trend is because of growing awareness about diamonds as an investment and their certification by evaluators that have catapulted diamonds from the category of “no-resale” as it was based purely on the word of the jeweller to the category of a “certified and guaranteed buyback product” backed by authenticated bodies. “Women no longer want to look like dressed up Christmas tree and diamonds lend the elegance that most working women want”. She, however, recommends that people should preferably go in for branded jewellery from manufacturers like Tanishq Jili, Caron, etc. Where the purchase is for an investment purpose, customers must only buy from jewellers they know. Ninety-two years old Mrs. Sushila Handa augments Ms Puja Khanna Bhagat’s theory of “post-Independence insecurity” among women that led to buying of pure gold sans stones. She says, “In a marriage about a 100 tolas of gold was bought and got converted into ornaments with intricately studded stones. This trend continued till pre-Partition days. But in my daughter’s marriage, I was forced to make jewellery without stones purely on account of its re-sale”. Because security is not the sole factor before buying jewellery, ‘patra’ jewellery has taken the market by storm, says Ms Mala Dhanda of Paras Jeweller that has dealt in traditional jewellery for years. Patra Jewellery is copper based ornament that has 2 to 4 gram of gold foil in it. The cost jewellery enthusiasts say is barely one-tenth the cost of similar stuff in gold. She cautions consumers to get the gold they buy evaluated on the ‘karat meter machine’ available at many places for verifying the purity of gold. Only evaluation by this machine can ensure that a consumer has got what he/she paid for. Gold price is currently touching the Rs 5300 per 10 gram mark, which the average Indian investor thinks is a good price to buy, especially during festival seasons that started from rakhi and would continue through navratras, karva chauth and Divali. Despite stagnation in the gold market, India remains the world’s largest consumer of the yellow metal. India’s imports of gold are estimated at around 800 tonnes, this figure does not include gold jewellery imported by Indians returning after foreign travel, and the vast amounts of gold smuggled into the country. More than 90 per cent of this gold is used up in jewellery with rough estimates putting the Indian jewellery market at around Rs 300 billion.
|
|||||||||||||||||||||||||||||||||||||
|
MARKET
UPDATE MARKETS were volatile last week and ended in the positive territory. The Bombay Stock Exchange Sensex gained 65.26 points during the week to settle at 2,995.77. The National Stock Exchange S&P CNX Nifty rose by 2.4 per cent to close at 971.05. Software, oil PSU and automobile scrips witnessed buying during the week. Volumes at the tech counters surged after software bellwether Infosys declared better than expected results. Infosys The second quarter results of Infosys surpassed the market’s expectations. Infosys’s total income in the second quarter surged by 35 per cent to Rs 897.10 crore from Rs 664.79 crore in the same quarter last year. The net profit grew by 12 per cent to Rs 225.77 crore and was in line with expectations of Rs 220-230 crore. However, the net profit beat expectations if one factors the effect of one-time provision of Rs 23.76 crore on the investments that the company made during the quarter. Infosys is ideally positioned to capitalise on the increase in outsourcing and off shoring a trend reinforced by the current economic downturn in the USA and Europe. There is also a flight to quality among customers. Infosys, with its size, strong brand, cash-rich balance sheet and robust delivery capabilities, will benefit from this trend. It will gain the share not only from its competitors in the developed world but also from other Indian vendors. There are expectations of continued volume growth and price stabilisation, driven by a change in the revenue mix. Investors can buy Infosys with a one-year target of Rs 4500. HDFC The largest Indian housing finance company, HDFC, announced on Thursday that its board of directors will consider a proposal for a bonus issue of equity shares and a buy-back of equity shares, along with the second quarter results at its meeting slated for Thursday (October 17). The scrip gained 10 per cent in the forenoon trade on Friday, but selling pressure at higher levels led to a flat closing at Rs 614. Markets, however, are sceptical about the buy-back programme. As the board will consider a buy-back of up to 5 per cent of equity, which will be subject to regulatory approvals because the company’s debt equity ratio exceeds 2:1, higher than that permissible level for a buy-back. HDFC has been included in the BSF Sensex effective Thursday as a replacement to the Reliance Petroleum, which has been merged with the Reliance Industries. Automobiles Two-wheeler companies registered a mixed performance in September. TVS Motors’ sales (up by 97.4 per cent) beat expectations, and Bajaj Auto’s (up by 30.5 per cent) were good too. Motor cycles led growth in both these companies. On the other hand, the market leader Hero Honda (13.6 per cent), disappointed with a meager mid-teens sales growth. This trend is likely to continue over the coming months, with new models determining participants’ market shares. Investor can ride on Bajaj auto and TVS Motors for gains in the short to medium term. Coming fortnight The Sensex ended the week below the psychological level of 3000. The up move is likely to continue and the index should test 3040. In case the index manages to cross 3040, the market can move up to 3100. Volumes are low and activity is confined to a few front-line and select second-line stocks. The medium-term outlook for the market is good. World markets too are recovering. From the medium-term perspective, pharma and FMCG scrips look attractive. |
|
Arrest warrants against Delhi Autos MDs Chandigarh, October 13 In a ruling, the Forum observed: “These are proceedings under Section 27 of the Consumer Protection Act of 1986. Therefore, the presence of the opposite party before the Forum is necessary. So it is directed that the bailable warrants for arrest of the Managing Directors of the opposite party should be issued in the sum of Rs 10,000 each with one surety in the like amount”. The case will now come up for further hearing on October 31. The Forum headed by President Beant Singh Bedi had earlier directed the opposite parties to refund the booking amount of Rs 20,000 to the applicant, along with interest. |
|
Inflation falls
New Delhi, October 13 The decline in general price level, as measured by the Wholesale Price Index, was mainly due to a sharp fall in the price of vegetables and eggs, meat and fish.
PTI |
ty
R. N. Lakhotia Housing loan Q: I am a Central Government employee and have built a house after taking Housing Building Advance of Rs 3,45,000 from my Department. The principal amount will be repayed in 172 monthly instalments of Rs 2000 each and thereafter the interest will be recovered from me in 60 monthly instalments. The repayment of the principal amount has been started from October 2001. I may please be advised as to whether the interest accrued on the loan is deductible from my income for the year 2001-02 or I will only be eligible to avail the benefit of interest on loan when it is actually paid. I have given the house on rent.
— D. Pal, Amritsar Ans: From your rental income arising as a result of giving the property on rent you would be eligible for deduction in respect of interest on loan for the property even when such interest has accrued and is not paid during the year.
Tax on plot Q: I am a regular employee of an Industrial Public Sector from the last 19 years. I want to purchase a plot for constructing a house for my own residential purpose. Is there any slab in Income Tax structure for the amount repaid (Principal+Interest) against loan taken from the recognised institution and what are limit for the same. — Surinder Bansal,
Ans: Please remember that no Income-tax benefit is available in respect of loan taken only for purchase of land. However, you would enjoy the benefit of tax deduction in respect of loan taken for construction of house (comprising of loan for land plus construction thereon) upto Rs 1,50,000 per annum. The repayment of principal amount is eligible for tax rebate u/s 88 of the Income-tax Act, 1961 on Rs 20,000 p.a.
HUF Q: I am a member of HUF. I have been submitting my annual income tax return as an individual for the last 7-8 years. My father was head of the family and the total income earned was from Horticulture/Agriculture. He had no other income except this. But due to his death in the year 2001-02. I being the eldest son have become automatically the Head/Karta of the family as per prevalent customs. I have my mother, sister and two younger brothers and their individual families. They are also filing their individual returns. Now guide me on the following points:- (a) Whether I can file two separate returns i.e. one as an individual or my salary and the other for the HUF? (b) If yes, the PAN will be the same or I shall have to apply for another one. (c) If no, then being a member/karta of the joint family, what shall be the arrangement to divide the income among all other family members so that the tax liability in my case is reduced. I also want to bring to your notice that while applying for PAN in Form 49A; I applied in both the capacities as an individual and as a member of HUF. — Kalyan S. Shaktan, Shimla Ans: Yes, you can file two separate Income-tax returns in your capacity as an individual as also another I.T. Return as the Karta of the HUF. Separate PAN will be for HUF. You will continue to use the same PAN No. of the HUF while your file is alive. In case no PAN has been allotted to HUF, then you may better file an application in Form No 49A. The income of HUF will be assessed separately, hence it will not matter whether you divide the income of
HUF. |
co
by Pushpa Girimaji Avoid signing one-sided contract IF you join a health club or a gymnasium, you are most likely to be asked to sign an agreement saying that you will not hold the club responsible for any loss or injury that may be caused to you. Obviously, it’s an unfair agreement because it takes away your right to claim damages in case of an accident caused on account of the negligence of the fitness club. If you look around carefully, you will find in the standard contracts issued by service providers, guarantees and warranties provided by manufacturers and cash receipts of retailers, many such terms and conditions that are loaded against the consumer. There are cash receipts that say that the retailer will not be responsible for the poor quality of the goods; there are warranties that say that it would become null and void if the consumer does not sign and send the accompanying card within a fortnight. Similarly one can see in some of the standard contracts of builders and land development agencies, terms and conditions that stipulate that the consumer will pay a steep interest for any delay in payment, but not the builder for any delay in completing the construction. And in many of these cases, by getting the consumer to sign on the dotted line, the service provider or the retailer or the manufacturer as the case may be, binds him or her to the one-sided contract and takes away the consumer’s right to redress. Courier companies, for example, limit their liability in case of loss or damage to the articles entrusted to them for delivery, to a nominal amount irrespective of the value of the goods. In the case of DHL Worldwide Express vs Bharathi Knitting Company, the apex consumer court held that by signing on the consignment note at the time of handing over the packet to the courier, the consumer had agreed to the terms and conditions that limited the liability of the courier in case of loss or damage to the consignment, to 100 dollars. The consumer court therefore could not award any damages over and above this amount. This was upheld by the Supreme Court. In the case of Wg Cdr P. S. Sandhu vs the Union of India, the complainant could get compensation to the tune of Rs 8 lakh for the tragic death of his wife, only because he had not signed the paper absolving the boat club run by the Indian Army of any liability in case of an accident. He and his family members formed part of a group of Air Force officers who had gone on the boat cruise on Barapani lake. One of the members of the group had signed the indemnity deed and when this was produced before the court to argue that the boat club had no liability, the apex consumer court said the complainant had neither signed it nor authorised anyone to sign on his behalf. The club was held guilty of negligence in not providing adequate safety measures in this case. In order to protect consumers against such one-sided contracts and agreements, we need to have a specific law or a regulation that prohibits unfair terms in contracts. In the United Kingdom, for example, such protection is given through the Unfair Contract Terms Act of 1977, which together with the Sale of Goods Act of 1979, makes some forms of exclusion clauses null and void in all circumstances.. In addition, the Unfair Terms in Consumer Contracts Regulations that came into force in October 1999 in response to an European Commission Directive, apply to standard contract terms used with consumers. Under these Regulations, a consumer is not bound by a standard term in a contract with a seller or a supplier if that term is unfair. They also give the office of Fair Trading and other qualifying bodies such as the utility regulators and The Consumers’ Association, the powers to stop the use of unfair standard terms by businesses . Sometime in April this year, the Office of Fair Trading in UK asked health and fitness clubs to shape up and trim their contracts to fit into the new guidelines issued by the OFT under the Regulations or else face enforcement action. . This followed over 200 complaints received by OFT against these clubs. The guidelines identified the terms in these contracts which the OFT found to be unfair. For example, attempting to exclude liability for matters such as death or personal injury is a very serious matter and cannot be allowed to continue, OFT said. It also issued guidelines to consumers to help them identify potentially unfair standard terms in fitness clubs’ contracts and gave examples of unfair terms like this: “All members and guests use the facilities and equipment provided by the club at their own risk and the club does not accept responsibility for any harm or injury to a member or guest whatsoever caused”. The OFT has also brought out a detailed brochure for the benefit of consumers, explaining their rights vis-à-vis Unfair Terms in Consumer Contracts Regulations and giving examples of what constitutes unfair terms. Consumers in India should also demand such a regulation to protect their
interests. |
 |
| Punjab | Haryana | Jammu & Kashmir | Himachal Pradesh | Regional Briefs | Nation | Editorial | | Business | Sport | World | Mailbag | In Spotlight | Chandigarh Tribune | Ludhiana Tribune 50 years of Independence | Tercentenary Celebrations | | 122 Years of Trust | Calendar | Weather | Archive | Subscribe | Suggestion | E-mail | |
