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Saturday,
December 28, 2002, Chandigarh, India  
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PROPOSALS ON
INDIRECT TAXES
Reliance unveils WLL service
YEARENDER — 2002 AGRICULTURE
Tanners air grievances |
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Motor cycle sales soar
Regulatory body for coop banks
SBP scheme for defence personnel
Plant quarantine centre at Ludhiana
8 pc growth achievable: Jalan
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PROPOSALS ON
INDIRECT TAXES New Delhi, December 27 “All other duties should be removed,” Dr Kelkar said while addressing mediapersons today, adding that the removal of Special Additional Duty (SAD) be linked to the implementation of state-level Value-Added Tax (VAT), when SAD replaced by state VAT to be levied on imports. The panel, while recommending a zero per cent customs duty in case of items like life-saving drugs, sovereign imports and imports by the RBI, has suggested that by 2004-05, there should be two customs duty rates (10 per cent and 20 per cent) and by 2006-07 it recommended 5 per cent duty for basic raw material like coal, ores etc; 8 per cent for intermediate goods which will be used for future manufacture; 10 per cent for finished goods other than consumer durables and 20 per cent for consumer durables. “The duty reduction should start only after the introduction of state VAT so that the imported goods are also made subject to the same state VAT (in lieu of SAD) by way of additional duty of customs”, it recommended. A nominal reduction in duty from 60 per cent to 50 per cent in case of motor vehicles was recommended, whereas in case of import duty on second-hand cars, the panel said it might continue at the existing rates. The Kelkar panel has said the exemption from CVD in case of cellular phones might be withdrawn but the basic import duty may be reduced to zero per cent by 2003-04. The SAD in this case should also be abolished so that the total incidence on duty goes up only marginally. For petroleum products and crude oil, the panel’s recommendation is an 8 per cent duty on crude oil and 15 per cent on petroleum products by 2003-04, which, by 2004-05 be reduced to 5 per cent in case of crude oil and 10 per cent in case of petroleum products. Regarding the Central excise duty structure on petroleum products, the panel recommended that the same be fixed at specific rates. A
quarterly review of the specific duties may be done and these may be adjusted to take into account the price fluctuations in a particular quarter, the panel said. An increase of Re 1 per litre of Central excise duty on kerosene and an additional duty of Re 1 per litre on LDO to make the duty at par with diesel was also recommended . “As a general policy, the downward revision of duty rates should be in stages of minus 5 per cent each year. However, regarding our commitment to reform, we recommend that the present duty rate should not be increased on any item. A few increases may be resorted to only on administrative consideration so as to avoid multiple rates depending on the end user”, Dr Kelkar said. A higher duty rate upto 150 per cent for specified agricultural products was also recommended. Regarding the Central excise tariff, the panel recommended that as a policy ‘Cenvat’ should be the only levy . “Till such time as there are multiple levies, there should be a working schedule indicating that the total tax payable on a particular product and the system should internally segregate the same into the respective levies.” For the small-scale sector, the panel has recommended that the duty exemption be extended only to small units with a turnover of Rs 50 lakh. Emphasising that duty exemption for the large SSI units be gradually brought down to Rs 50 lakh, the panel said the downward revision in exemption is proposed to be complemented by a transparent tax-collection mechanism , which must be in place from April, 2004. It was also suggested that a comprehensive review of the present list of items, to which the small scale sector duty exemption had not been extended , be done and the exemption in this case be extended to the possible extent. Contrary to Planning Commission’s suggestions of slashing excise duties on textiles, the Kelkar task force today mooted uniform duties of 12-16 per cent for textile items by 2004-05 and lifting of most exemptions. The panel proposed a higher uniform duty of 16 per cent on fibre and yarn by 2004-05, by raising duty on cotton yarn from 8.0 to 14 per cent and bringing down the rates for polyester filament yarn. The duty should, however, be brought down to 14 per cent in 2004-05, it added. The panel also mooted a uniform 12 per cent excise duty by 2004-05 for all fabrics which were not processed. The N.K. Singh Committee on Textile is understood to have mooted a uniform 8 per cent duty for textile items as against the present rate of 12-16 per cent. The panel further proposed lifting of exemptions except those like yarn, fabric, handloom items, silk yarn, woollen yarn spun without aid of power and jute products. Exemptions for blankets and woollen fabric made of wool and shoddy yarn and synthetic fabrics not exceeding Rs 150 per square metre should continue, it added. It said full exemption on items like sisal and manila twist yarn, thread, ropes and twine, hair-belting of wool, raincoats, undergarments and clothing accessories be withdrawn and the items brought under the general SSI duty exemption scheme, if not covered already.
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Reliance unveils WLL service
Mumbai, December 27 “We will commence demonstrations of the service on January 15 and begin bookings by February. We expect to start the commercial operation in February or March,” Reliance Industries Chairman and Managing Director Mukesh Ambani told reporters at the Dhirubhai Ambani Knowledge City (DAKC) in Navi Mumbai. Eventually, the wireless in local loop (WLL) facility would connect all the 6,40,000 villages and 2,000 odd towns and cities to each other and to the world in a seamless way, he said, adding the service based on code division multiple access (CDMA) platform would provide messaging, business transactions, videoconferencing, music download and movie download services. Referring to the Pioneer offer, the booking for which ends in March, he said among other things the subscribers would get one free digital mobile phone worth Rs 10,500, unlimited free incoming calls, 15 second pulse rate and free outgoing calls for 400 minutes. Within the plan, the cost of a STD call is 40 paisa a minute and that of a short call up to 15 seconds is only 10 paisa, Ambani said, adding the scheme also allows for exchange of current handsets and discount coupons for various products. Ambani said under the Pioneer offer, the subscribers would pay Rs 600 per month while the value-added services such as call hold, call conferencing and test messaging would be free of cost. The standard plan of the Reliance IndiaMobile Service would require monthly payment of Rs 200 as rental and Rs 1.20 per minute call charge while the regular scheme was an upfront payment plan, which covered only talk time.
PTI
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YEARENDER — 2002
AGRICULTURE
NEW DELHI: Like a spinster “aunt” in the family, Indian agriculture seldom draws anyone’s attention except when sick, as in 2002 when the century’s worst drought had a cascading effect on the entire economy. The farm sector dominated national politics and Parliament proceedings all through the year, but for wrong reasons — starvation deaths, suicide by farmers and overflowing granaries with rotting grains. Stung by the driest July in 127 years, the farm sector finds unachievable the target of 220 million tonnes foodgrain output with kharif production declining by over 19 per cent to 91 million tonnes from 111.5 million tonnes last year. Initially projected to be normal for 15th year in a row, South-West monsoon played truant in 14 states resulting in over 20 per cent deficient rainfall. Under its impact, rabi production too is unlikely to surpass last year’s 99.8 million tonnes but for the first time it may be higher than kharif output of 91 million tonnes. As farmers’ plight was sought to be politicised over Minimum Support Price (MSP) and drought relief, reports of suicide by peasants caught in debt trap poured even from rich states like Punjab, Andhra Pradesh, Karnataka and Tamil Nadu. Though the government ruled out hunger due to drought and kept basking in the glory of huge foodgrain stocks weighing over 550 lakh tonnes, a large chunk of it was found unfit for human consumption and disbursed as cattle feed. As the year drew to a close, Prime Minister Atal Behari Vajpayee announced waiving of a year’s interest on kharif loans amounting to Rs 2,000 crore after a prolonged row between Agriculture and Finance Ministries over drought relief involving a Rs 3560 crore package. For the first time in years, the Centre accepted the recommendation of the Commission on Agricultural Costs and Prices (CACP) for paddy MSP but later bowing to pressure from states announced a drought relief over and above MSP. Compulsions of coalition politics too appeared to have played a role as a high drama preceded the MSP-drought relief which was sanctioned only after leaders of NDA allies like Akali Dal, TDP and INLD met the Prime Minister. The Centre’s generosity was in sharp contrast to its response to a similar demand by Congress leader and Punjab Chief Minister Amarinder Singh which fell on deaf ears. Congress ruled states accused the Centre of meting out step motherly treatment to them as its Chief Ministers including Amarinder Singh and Chhattisgarh’s Ajit Jogi set a trend of taking to streets and staging demonstrations in the run up to their scheduled meetings with the Prime Minister. Their demands for quick relief, however, evoked contempt and laughter and were dubbed as “politics of drought”. Political overtones could also be heard in the policy initiatives of Agriculture Minister and “Kisan” leader Ajit Singh who crossed swords with Finance Ministry over the quantum of relief to drought affected states. In fact, Agriculture Ministry’s recommendation for cut in fertiliser price and removal of distinction between families living below and above the poverty line is still pending. Economics, however, prevailed over politics in the corridors of North Block as Finance Ministry argued that the roll back would put an additional burden of Rs 560 crore. Though input related farm support of Rs 2,000 crore was provided to the cash strapped states, they described it as “too little and too late.”
PTI
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Tanners air grievances Jalandhar, December 27 The Punjab Leather Federation in a memorandum submitted to the committee headed by Mr J.Chitranjan, MP, said they had set up nearly 60 big leather
manufacturing units at the specially designed Leather Complex in Jalandhar about 12 years ago on the assurance of the state government that there was no need to obtain NOC from the Punjab Pollution Control Board (PPCB) for a power connection. But, the PPCB had been forcing them to install
effluent treatment plants inside the manufacturing units since the common
effluent-treatment plant installed by the Punjab Small Industries and Export Corporation was of a low capacity, due to which the authorities refused to issues NOC for their expansion projects. The memorandum said the frequent power cuts were adversely affecting the working of this industry, thus, causing undue delay in meeting their export obligations. The tanners also brought apprised the team of the pathetic condition of roads and lack of proper infrastructure. The memorandum said duty-free import of capital goods against the export commitments should be allowed in case of leather industry since about 90 percent of product was being exported directly or indirectly.
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Motor cycle sales soar
New Delhi, December 27 The booming motor cycle market and sagging scooter sales forced almost all the traditional scooter makers like
LML, Kinetic and TVS to intensify their focus on the motor cycle market even as the local scooter making unit of Japanese major Honda bucked the trend and recorded spiralling sales. Towards the fag end of the year, many two-wheeler makers, ignited by consumers’ penchant for motor cycles, rolled out high volume commuter motor cycles (100-110cc), which currently constitute the bulk of the market. During 2002, motor cycle enthusiasts showed keen interest in cruiser and high-powered motor cycles. The bullish motor cycle market bode well for companies like Yamaha and LML which were left in the lurch due to declining sales. India’s largest motor cycle maker Hero Honda went on to don the mantle of the world’s single largest motor cycle maker and its flagship brand ‘Splendor’ became the largest selling brand in the world with sales of about 62,000 units per month. Hero Honda’s nearest rival, Bajaj Auto, was dogged by a controversy of a split in the family, which resulted in a rumour that the estranged brother of Bajaj Auto Chairman Rahul
Bajaj, 55-year-old Shishir Bajaj, intended to sell his 6 per cent holding in the flagship company of the Rs 6,000 crore Bajaj Group.
Bajaj Auto, which was numero uno in the domestic two-wheeler market till the advent of Hero Honda, found another formidable competitor in TVS Motor during 2002, which posted a phenomenal sales growth with its 110cc indigenously-developed motorcycle ‘Victor’. PTI
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Regulatory body for coop banks
Bangalore, December 27 Speaking after inaugurating the 24th Bank Economists’ Conference (BECON-2002) here, he said RBI believed that the proposed body for cooperative banks needed to have ‘representative elements and local character’, India being a large and diversified country. Jalan said it was for the Union government to take a decision with respect to the regulator. Since cooperative sector was a state subject, consensus was required on the issue, and it needed to be okayed by state legislatures and Parliament. He also said that Credit Information Bureau was expected to launch commercial operations in the first quarter of 2003. The Bureau was intended to economise on the production costs associated with supply of financial information for a potential clientele comprising 101 banks, 22 non-banking finance companies and 30 housing finance companies in India, as well as a large number of co-operative banks and other regional credit gurantors. The Bureau expected to provide more effectively organised information and to circumvent the constraint of limited infrastructure of some of the participants in the financial system, he said.
PTI
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SBP scheme for defence personnel
Chandigarh, December 27 Mr J.R. Devgan, General Manager (Operations), highlighted the features of the scheme which envisages facilitating
defence personnel to avail various personal segment loans on attractive terms, like
loans for home/car/scooter/consumer durable for meeting personal needs and for celebrating the festivals of their choice. SANGRUR:
Mr N.S. Deshpande, Deputy General Manager, State Bank of Patiala, Patiala Zone inaugurated the 732nd branch of the bank at Longowal (District Sangrur).
TNS
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Plant quarantine centre at Ludhiana Amritsar, December 27 The Agriculture Secretary said that there was a tremendous scope for exports of green vegetables fruits flowers rice and seeds for which the Central and State Governments have established special export zones to give boost to the exports. The Deputy Director for Quarantine Centre here, Mr V.K. Yadav said that during last year 4,076 consignments of various food items were imported while 2,764 consignments of various agro items exported out of the country and the centre has issued fito sanitary certificates and earned a revenue of Rs 1.87 crore.
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