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Thursday,
November 14, 2002, Chandigarh, India  
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Tax structure not competitive: Narayan
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Selloff:
Sonia to check up with CM Sugar
mills still owe Rs 80 cr to farmers Danish
traders assure Chautala
Punjab
to review entry tax on yarn Purwar
to be next SBI chief
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Tax structure not competitive: Narayan New Delhi, November 13 Speaking at conference on taxation policy organised by the FICCI here, Dr Narayan said that “unless the state VAT system comes fully into place, the Central system cannot be integrated into it”. “Whether by consensus or by compulsion, the state VAT system should be in place by April 2003”, he said even as he acknowledged that the anticipated revenue losses have caused a lot of concern among states during the transition period. Dr Narayan said some state governments had taken a decision to severely compress their revenue expenditure, while others expressed helplessness to do so. The Centre has agreed to compensate the revenue loss that may accrue to states owing to the transition to a full fledged VAT system, he said and admitted that due to “add-ons” at the state level and the resulting multiplicity of taxes has rendered India’s tax system non-competitive. “Six to seven state governments have taken a decision that they will not spend 90 per cent of their revenue on maintaining the large government staff, while five to six state governments have stated that they cannot do so,’’ he said. Seeking the cooperation of the business community in ensuring a smooth transition to a comprehensive VAT system, the Finance Secretary said that due the multiplicity of the Indian tax structure an investor is not really aware of the taxation cost accruing to his investment. Dr Narayan, however, did not buy the argument that the Income Tax Act should act as an incentive for wooing investment to India. In an era where there is rapid globalisation of the Indian economy, it cannot be expected that the CBDT of the Ministry of Finance will use the Income Tax Act to promote investments in particular sectors. The Finance Secretary said that though gross corporate tax rate was 35 per cent, the number exemptions meant that the effective rate of tax was 19.2 per cent and in some cases it was as low as 6.8 per cent. Vice Chairman of Reliance Industries Limited Mr Anil Ambani, who delivered the keynote address during the inaugural session said that constant changes in tax provision has given rise a very complex tax system in the country. “Let us have stable tax policy framework where in the budget on tax rates are announced and amendments are announced over a period of four to five years”, Mr Ambani said. Expressing concern about the quantum of flight of capital from the country which runs into billions of dollars he remarked that “the parallel economy is as big as the white economy”. He said the tax structure must create a level playing field with NRIs as their investments when routed through Mauritius are exempt from short term and long term capital gains tax and transcations are not subject to many interpretations of the IT Act.
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Gates picks Wipro to take on Big Blue
Bangalore, November 13 After two days of concentrating mostly on the charitable efforts of the Bill and Melinda Foundation while in New Delhi, the Microsoft founder spoke here of the “very powerful combination” that his company and Wipro could make before customers worldwide. “We are building our engagement. Microsoft’s largest competitor is IBM and IBM has chosen to be in the services business as well. We want to go to our customers with Wipro and its experience in services. This combination is a very powerful combination unlike the single company approach of IBM. So we have a bright future together,” Gates said. Gates’ announcement to the 1,500 software developers, a large number of whom work on Microsoft technologies, at Wipro’s Electronic City campus was received with a thunderous applause. “Thank you for the good work done as a partner and customer for Microsoft,” he added. The world’s richest man spoke more as the Chief Software Architect at both his engagements here, first at the “Bill Gates Live” talk at the Infosys Technologies amphitheatre and later at Wipro. At his first engagement during the half-a-day visit to the city, Gates complimented India's software prowess as “impressive”. “Software is magic and business is most exciting and I look forward to many other things we would be doing in future.” Meanwhile, the Vice-Chairman of Wipro and President of Wipro Technologies, Mr Vivek Paul, confirmed that Wipro was in the process “kicking off” a BPO arrangement with Microsoft Corporation. Speaking to reporters after the visit of Gates to the Wipro campus, Paul did not, however, elaborate on the arrangement. While the BPO front “is picking up, it is yet to mature on a sustainable build-in kind of industry”. However, the expectation Wipro had of BPO was ‘coming to bear’,he said. Describing Wipro’s relationship with Microsoft as a “multi-faceted one”, Paul said his talks with Gates focused on their “ability to sell together in the market place”.
IANS & PTI
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Selloff: Sonia to check up with CM Bathinda, November 13 During the press conference addressed by Ms Gandhi at Mount Abu, the matter pertaining to the proposed disinvestments in five profit-making units by Capt Amarinder Singh’s Government surfaced. Ms Gandhi replied that the Congress was always opposed to disinvestments in profit-making units. She said she would check up with Mr Amarinder Singh regarding the proposed disinvestments in the five units of Punjab. Mr Surinder Singla, Chairman, High-powered Committee on Finance, Punjab, pointed out that during its Bangalore session, the AICC passed a resolution on economic affairs, which clearly stated that profit-making companies under monopolistic condition could be sold off while those which were under competitive conditions could not be sold off. He added that this resolution was passed after a comprehensive debate on the issue of disinvestments of PSUs. He added that profit-making companies under monopolistic condition would not be able to survive after its profits declined when these started facing competition. He pointed out that there was proposal of selloff Punjab Communication Limited, Punjab Alkalies Limited, Punjab Tractor Limited, Punjab Tourism and Conware. The proposal was made in accordance with the resolution on economic affairs passed by the AICC. He added that all these companies except Punjab Tractor Limited had been facing accumulated losses. In the Punjab Tractor Limited, which was a profit-making unit and was having semi-monopolistic character, the equity of Punjab Government was only 24 per cent, which the rest of equity was being controlled by financial institutions. He pointed out that after the disinvestment was made, the employees of same units would find themselves better paid and would have secure future of their jobs as their companies would be out of red permanently and would be expanding like any thing under a new set up. He added that more, over, the employees of such units would be given one year guarantee of their employment by the government.
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Sugar mills still owe Rs 80 cr to farmers Chandigarh, November 13 The crushing of sugarcane in the state has already started for the next crop, along with Haryana and parts of Western UP, but the farmers are still awaiting for the clearance of pending payments. To their surprise, the state and Centre governments have not even bothered to announce the minimum support price for the sugarcane. Some of the private mills are, indeed, procuring sugarcane at the previous year’s price of Rs 100 per quintal. Dr R.K. Rampal, Director, Agriculture, Punjab, disclosed that the according to the field reports, a section of farmers had shifted some area from paddy to sugarcane. He said: ‘‘The total area under sugarcane in the state is around 1.70 lakh hectares this year, against 1.43 lakh hectares during previous year. The total production is estimated to be 9.40 lakh tonnes during 2002-03 against 9.41 lakh tonnes during 2001-02.’’ Dr Rampal said unlike previous years, the sugarcane crop had not suffered any major attack of disease during the current season due to long dry spell. Consequently, the average yield per hectare was likely to remain constant at last year’s production. Regarding the payment to the farmers, he said, the state sugar mills had paid Rs 545 crore for the last season’s crop, but about Rs 80 crore were still pending. Mr Puran Singh Sahkot, State Finance Secretary of the Bharti Kisan Union has urged the state government to clear the pending payments at the earliest. The kisan union also urged the Union Agricultural Minister, Mr Ajit Singh to announce the support price for the sugarcane so that farmers were not forced to sell their cash crop at lower price to mills.
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Danish traders assure Chautala
Copenhagen, November 13 Mr Rasumsen was addressing a meeting of Chief Executive Officers of multi-national companies and non-resident Indians organised here in the honour of Mr Chautala and the delegation being led by him. Those present in the meeting included India’s Ambassador to Denmark, Mr H.K. Dua, First Secretary to the Indian Embassy, Dr Asaf Sayyad, many senior officers of the Foreign Ministry of Denmark, a number of CEO’s of multinational companies and non-resident Indians. Mr Chautala said there were ample opportunities to improve mutual cooperation between Haryana and Denmark in the areas of dairy bio-tech, information technology and pharmaceuticals. He said while on the one hand, Haryana was a leading state in India in the field of milk production, Denmark has made its mark in the field of milk and milk products. He said besides gaining from the experiences of Denmark in the field of dairy development, the technology adopted by it in the areas of bio-tech, pharmaceuticals and non-conventional energy sources could be utilised. He said there was a need to gain from each other’s experiences. The Chief Minister said India had potential to grow herbs and medicinal plants and emerge as a major exporter. He said while India was exporting herbs worth Rs 500 crore, China was exporting herbs to the tune of Rs 40,000 crore. He said a herbal park was being developed at Yamunanagar in Haryana to promote the cultivation of medicinal plants. He said the investors from Denmark would find ample opportunities in Haryana. The state had facilities for marketing, network of rail, road and communication lines, adequate supply of water, power and well controlled law and order situation. The international airport at Delhi was in close proximity of the state. Those present in the high-level delegation of Haryana included Finance Minister, Mr Sampat Singh, Political Adviser to Chief Minister, and President of the Haryana unit of the INLD, Mr Sher Singh Badshami, Principal Secretary to Chief Minister and MD HSIDC, Dr Harbakhsh Singh.
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Punjab’s approach to tax matters casual Punjab’s tax regulatory regime confirms to atavism, which simply means yesterday’s remedies to current problems. This is mainly because policy measures are being taken in isolation without taking the industry and trade into confidence. Random consultations with individuals are making things messier the elected government, who got people’s verdict only recently, does not know whom to talk with. This is a very sad commentary. Punjab is predominantly a small-scale industry (SSI)- based economy. It is exclusive in this regard. Compared with the population base, it has the largest concentration of SSI units in the country. Even the corporate culture is the graduation from this smaller base. History and geography of the state is such that only local entrepreneurs are the sole contributors to its economy unlike other states in the country. For growth and survival of such an industrial base, the credit to the past governments of whatever hue. Bad patches notwithstanding, on every vital policy issue representatives of industry have been consulted in the past. This is missing now as powers that be either do not want to be accountable to the people or they are not allowed to do so. There are national and regional-level organisations representing the industry having state-level units. They mainly have corporate culture in mind with show windows for smaller units. Their policy perceptions mainly come through national or regional framework. Undoubtedly, their views are also necessary but they have to be dovetailed with those of smaller units. Every government, after coming into power, has constituted state Industrial Advisory Board to evolve policy measures. This government has not yet thought of that. The constitution of such boards in the past could have given the idea as to whom to consult to evolve acceptable policies. Punjab has two distinct state-level chambers based at Ludhiana, which combine the interest of many trades apart from a number of recognisable trade-wise organisations. The most regrettable part is that even the Chief Minister’s directives are not being followed by some top functionaries. Sometime back a deputation of one state-level chamber met the Chief Minister who asked the Financial Commissioner (Taxation) to have a detailed meeting with the Chamber on sales tax issues and report. When the chamber reminded the Financial Commissioner (Taxation) about the meeting, the reply was curt; no need of meeting. Later meeting took place when the matter was brought to the notice of the Chief Secretary and the Chief Minister. Result bitter beginning, bitter middle and bitter result. In the interest of the industrial economy of Punjab, the Chief Minister is urged to take initiative himself to consult the industry and the trade on a wider base. He carries the burden of the future of the state’s economy on his shoulders. This will create a congenial environment. Do consult people with big names but that should be small part of the strategy and not the sole part. Acrimonious relationship between ruler and the ruled should be the most hated word. To avoid this, initiative should come from the ruler and the ruled would respond.
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Punjab to review entry tax on yarn Chandigarh, November 13 According to information available, three senior ministers of the government including Mr Lal Singh, Finance Minister, Mr Avtar Henri, Industries Minister and Mr Avtar Singh, Excise and Taxation Minister along with Prof Darbari Lal, Deputy Speaker, Punjab Vidhan Sabha had recently held discussions with the representatives of Punjab Beopar Mandal and various associations of dealers in yarn and paper and have assured to redress their grievances. The representatives of yarn and paper industry had urged the state government to slash the rate of entry tax, and to withdraw the levy of entry tax on imported material used for job work. Mr S.P. Oswal, Chairman, Oswal Group of Industries and other industry representatives asked the Ministers’ Commitee to shift the sales tax on paper, paper stationery and paper boards from last stage to first stage and to ensure that entry tax is set off against Central Sales Tax ( CST) as well as sales tax.
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Purwar to be next SBI chief
New Delhi, November 13 Purwar will take over charge of the country’s biggest bank from Janki Ballabh, whose term ends this month. Finance Ministry officials said Purwar would head SBI for a term of three and a half years.
PTI
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HDFC cuts rates Vita products HSBC branch HDFC MF PNB clarification IOB life cover Sonofon SBI staff |
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In video: Anil
Ambani calls for simpler tax regime in the country to attract foreign
capital. (
