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Sunday,
September 14, 2003, Chandigarh, India  
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Maruti
expands market to rural areas, says Khattar Punjab
Tractors signs MoU with Canara Bank CII’s
farm mission to Israel Sinha to
launch Indo-Pak CEOs forum today
Mobile
handsets to cost less, says Trai chief |
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Dhindsa
to oppose NFL selloff
Internal
disputes mar A-I progress
Gift tax
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Maruti expands market to rural areas, says Khattar New Delhi, September 13 “Maruti’s partnerships with State Bank of India (SBI) and its associate banks are expanding the reach of car finance across the country, not just in rural areas. Private sector finance is currently available in only 50 to 60 cities whereas Maruti has dealerships in 167 cities and towns. With SBI and associate banks we are going to the remaining areas. Even though the initiative is only a few months old, the number of Maruti cars financed by our partners have more than doubled”, Managing Director of MUL Jagdish Khattar told The Tribune in an exclusive interview. In fact the financing options have brought other models apart from its bread-and-butter car Maruti 800 under very attractive price propositions, he said. “Maruti 800 has, of course, become very attractive with this initiative. But the tie-ups have benefited all our models. In fact, the growth of sales of Zen, WagonR, and Alto under this initiative has been in line with their growth under other finance initiatives”. The MUL Managing Director indicated that the company was expecting an upsurge in demand of a couple of variants of the Alto model following a price cut recently. “We have brought down the prices of Alto LX and Lxi by nearly Rs 23,000 and this initiative with SBI and associate banks has made the Alto very attractive for prospective customers”, he emphasised. Mr Khattar believes that the financing options with SBI is different from those offered by private financers in that the interest rates allow the longest repayment period. “There are no hidden costs or pre-payment penalties. Owing to all this, we think that two-wheeler owners and even families that do not own a vehicle can upgrade to a Maruti car much more easily”, he pointed out. Despite an upsurge in demand for the diesel Zen and Esteem, reports indicate that MUL has decided to “freeze” production numbers of these models. Mr Khattar attributed this to a “larger corporate strategy”. “The number of units we produce of each of these products is part of a larger corporate strategy, taking into account profitability and customer demand. Because we have to keep in mind that while demand for our diesel products is high, the demand for petrol products is many times higher”, Mr Khattar said. On the Suzuki Grand Vitara XL-7, which was introduced in India with much fanfare recently, he said that it has received an “overwhelming market response. The orders have exceeded the number of cars that we had planned to import and sell in the following four months”, Mr Khattar said. “At the time of launch of the Grand Vitara XL-7, we knew there was no significant market for sports utility vehicles in India. But we all knew that there are a set of people in this country who have the resources — as well as the taste — for high end, distinctive, SUV product like Grand Vitara XL-7”. Mr Khattar, however, evaded a direct reply on the new products that are expected to be rolled out from the Maruti stable. “As a market leader, we want to fulfill the needs of diverse types of customers including those who value style, luxury and status to the highest degree. Maruti will, of course, continue to work on developing new products”, he said. At the same time he felt that high growth sales were slightly skewed this year as it may present an “exaggerated picture since sales in the first four months of last year were unusually low. To that extent, growth for industry as a whole may appear somewhat skewed”. For MUL, while entry level Maruti 800 model has witnessed a spurt in demand, Mr Khattar said that the A2 segment has also been a growth driver for the company. “In fact the growth in Maruti’s Zen, Wagon R and Alto has been higher than the growth in the segment for industry as a whole”. India’s very low density of six cars per 1,000 households reflects potential of untapped market but Mr Khattar underlined the need to improve traffic management in the country. “The Indian car market is bound to grow from these levels. While traffic congestion is a valid point, we should not be bogged down by these problems... We have to improve out traffic management such as separate pathways for slow moving vehicles to reduce congestion”, he said. In a developing country, demand and supply has to grow in tandem, in a sort of virtuous cycle. “Higher demand has to lead to greater availability. In other words, more cars will spur greater infrastructure development. There are already positive signs in this regard, like government’s growing attention to road infrastructure”, Mr Khattar added.
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Punjab Tractors signs MoU with Canara Bank SAS Nagar, September 13 The signing of the MoU is part of the continuing marketing strategy of PTL to further penetrate the highly-competitive market. The arrangement aims at extending credit at affordable price and on attractive terms to farmers. As per the terms of the memorandum, Canara Bank will now become the preferred financier for Swaraj Tractors in Punjab, Bihar, Andhra Pradesh and Tamil Nadu. Under the scheme, Canara Bank will give financing solution to farmers interested in buying Swaraj Tractors with enhanced features like reduced margin money and attractive rate of interest through PTL’s dealer network. The tenure of loan will be enhanced up to nine years. Mr A.M. Sawhney, Senior Vice-President of PTL, said the company’s market share in Punjab was 25 per cent, in Bihar 24 per cent, in Andhra Pradesh 20 per cent and in Tamil Nadu it was 17 per cent. He said Canara Bank had a stronghold in these states. He said the farmers who were interested in taking loans from Canara Bank would be exempted from processing charges. Swaraj had decided to provide free insurance to those farmers who purchased the company tractors by taking loans from Canara Bank. He said the scheme would be extended to other states as well in the near future.
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CII’s farm mission to Israel
New Delhi, September 13 The CII mission’s visit would coincide with Agritech 2003, Israel’s largest agriculture exhibition, the official Indian delegation to which would be led by Andhra Pradesh Chief Minister N. Chandrababu Naidu, a CII release said here today. The highlight of the mission would be a seminar on doing business in agriculture sector between the two countries followed by one-to-one meetings where the members would discuss collaborative initiative in areas like drip irrigation.
— PTI
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Sinha to launch Indo-Pak CEOs forum today New Delhi, September 13 Outcome of the joint efforts by the Confederation of Indian Industry (CII) and the Young Presidents Organisation, the forum is based on the successful model of existing joint CEOs fora operated by the CII with different countries. Mr Hari S.Bhartia, Co-Chairman and Managing Director of Jubilant Organosys, will co-chair the CEOs forum from the Indian side while Mr Amin Hashwani, Managing Director, Hashwani Group of Companies, Karachi, is the co-chairman of the forum from the Pakistani side. The 12-member Pakistani CEOs delegation represents a diverse group, comprising professionals, owners and representatives of MNCs in Pakistan. The members of the Pakistan delegations are Mr Amin Hashwani, Managing Director, Hashwani Group of Companies; Mr Syed Arif Masood Naqvi, Executive Vice-Chairman and CEO, Abraaj Capital; Mr Farrukh H.Khan, CEO, BMA Capital Management; Mr Tariq Shafi, CEO, Crescent Industrial Chemicals; Mr Dewan M.Yousuf Farooqui, CEO, Dewan Farooque Motors; Mr Asad Umar, Senior Vice-President and Director, Engro Chemical Pakistan; Mr Asif Jsooma, Director, ICI Pakistan; Mr Amin Mohammed Lakhani, Managing Director, Lakhson Group; Mr Sikandar Mustafa Khan, Chairman and CEO, Millat Tractors; Mr Aslam Faruque, Director, Mirpurkhas Sugar Mills Limited; Mr Sohail Wajahat H Siddiqui, Managing Director Siemens Pakistan Engineering; Mr Ayaz A.Karim, Director, Vikor Enterprises. The sectors they represent are textiles, hotel and tourism, commodities, agriculture, telecommunications, pharmaceuticals, software development, paper, insurance, sugar, private equity, retail and distribution, light engineering, fertiliser, chemicals, electricals engineering, jute, automobiles and tractors and financial services. The members of the delegation have shown interest in several sectors for doing business with India, including telecommunication, pharmaceuticals, software development, chemical industries, waste water treatment plants, mining technologies, automobiles, financial services (including asset management and venture capital), education and consumer goods.
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Mobile handsets to cost less, says Trai chief New Delhi, September 13 Bundling handset prices with the tariff had made the instrument cheaper in several countries, the Trai Chairman said. Mr Baijal also suggested mergers and acquisitions among cellular operators to solve the problem of spectrum availability and ensure its optimal use. He pointed out that in China each MHz of spectrum was used to service five million subscribers against a mere one lakh in India. This was due to higher spectrum capacity available to fewer cellular operators in China, he explained. At the current growth rate of 100 to 150 per cent, the number of cellphone users in India were expected to surpass the strength of landline users by 2005. At present, there were about 20 million cellphone users against 40 million fixed line customers. However, India was far behind China, where cellphone users were as much as 15 times higher than those in our country.
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Dhindsa to oppose NFL selloff Anandpur Sahib , September 13 Mr Dhindsa told that the news reported that no company has matched the government reserve price for the NFL were not official. The matter would be clarified after the Ministry of Disinvestments tables the report regarding the bids before the Cabinet. Whenever the report regarding the disinvestments was tabled before the Cabinet he would oppose the disinvestments in the company. He further told that he has already met the Prime Minister to express the feelings of the SAD against the proposed disinvestments of NFL. The Prime Minister was told that the fertilizer sector was to be decontrolled by the year 2004 after the implementation of the new pricing policy. The government should wait and see the impact of the global market on the Indian fertilizer sector before disinvesting in NFL. The Prime Minister has assured to consider the matter sympathetically. After the assurance of the Prime Minister its seems that the disinvestment process of the NFL would be stalled, he said. When asked about bringing some industry in Punjab, Mr Dhindsa said that as a policy the Union Government was investing anything in public sector. Now only the investment that can come in Punjab was from the private sector that was a state subject.
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by K.R. Wadhwaney Internal disputes mar A-I progress Two groups in Air-India are still pro-active. Internal differences are standing between the national carrier and progress. The new Managing Director, Mr Sunil Arora, is fully seized of the vex situation. He is said to have impressed upon all that the national carrier’s interest should get precedence over group exercises. Mr Arora’s induction in Air-India has brought about two significant developments. A particular type of long-haul aircraft has been shortlisted and the national carrier may soon place an order. Also, Air-India and Indian Airlines have eventually reached an agreement over the rationalisation of their international routes. There will be no duplicity or overlapping on several routes, particularly in common destinations like the Gulf, West Asia and south-east Asia. This is a singular achievement of the new Managing Director in a very short span of time. If the route rationalisation is achieved and fleet expansion comes about, both carriers can fly serenely. Despite the overcrowding of the staff, they can get to a firm route to profitability. If two carriers become supplementary to each other, renaissance is bound to surface as both airlines have many competent and loyal workers. Mr Arora is said to have several other innovative schemes to help two carriers secure an additional passenger load on flights. Subsidiaries that have been floated are being nurtured with care and planning.
Corporate aviation Yet a few precious lives, including that of a minister, were miraculously saved as a small plane landed without any untoward problem at the Indira Gandhi International Airport recently. According to experts, this problem will persist unless adequate care is given to maintenance. The fact of the matter is that corporate planes are not maintained properly and they are rendered air-borne without employing proper checks. Stringent rules will have to be formulated when the Ambraer ‘135 BJ Legacy’ executive jets are selected for VVIP operation. Any laxity will prove suicidal. Aircraft, in the possession of the civil authority, will have to be maintained on the same strict principle of the Air Force. Whatever may be the compulsions in the arena of political rigmarole, there should be no compromise on efficiency and maintenance. Safety of all passengers, particularly of the VVIPs, is important. There should not be any compromise in ‘operational requirements’. Price of aircraft should not get precedence over reliability of the plane. It is better to spend a few lakh more instead of jeopardising the lives of the VVIPs and others. As often said, depend upon your own pilots and engineers instead of getting carried away by foreign authorities, who are out to sell their products. There are several instances when foreign officials have not played fair to India. The record of aircraft manufacturers is far from being unblemished.
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by A. N. Shanbhag Gift tax Q: I am an NRI, my parents want to buy a house this year. The house is already sold (1.5 Mio) this year, but the amount is not enough to buy the new house (Cost - 2.5 Mio.). I would like to help them with the rest. Can you please inform me if there is any Tax formalities I have to complete before I send them the Amount? Can I gift them this amount? — G. Singh, A: Yes, you can give them any amount of money as a gift. Gifts in foreign exchange by NRIs was always tax-free. Now that the Gift Tax Act has been abolished w.e.f. 1.10.98. All gifts, made by anyone, NRI or otherwise, through foreign exchange or Indian assets, are free from gift tax. All that is required is an offer by the donor and acceptance thereof by the donee in black and white. To safeguard against any hassles, the donee should request the donor for a gift and then the donor should remit the amount to the donee. Alternatively, the donor can offer the gift. In either case, it is necessary for the donee to accept the gift in writing (maybe through a thank you note). Only then it would be considered as a gift in India. It is better to prepare a gift deed and get it registered (with related stamp duty) but such a precaution is normally needed in the case of high-value gifts, particularly those of real estate. There is no income tax on the amount gifted. However, any income earned thereon subsequent to the gift is chargeable to tax.
Tax saver Q: I recently read your book on “Taxpayer to Tax saver”. Your book does not talk about taxation of gain/loss on derivatives contracts. I wonder if you could throw light on taxation of derivatives contracts (stock futures, index futures, stock options, index options). I understand gain/loss on derivatives should be speculative gain/loss, as these contracts do not result in delivery. However, if I interpret the Act/rules properly, gain/loss on derivatives used for hedging position in stocks will be short-term capital gain/loss. Specifically, it can become a very good tax-planning tool for those who have large short-term capital gain on stocks. If derivatives are used to hedge the stocks position via short future or short call or long put, and if there is loss on these derivatives contracts, this loss can be set-off against ST capital gain on stocks. I would appreciate if you could throw light on whether is this interpretation correct? — Taxpayer A: I have strived to provide my readers with a one-stop location which provides the entire information on the tax related investment issues for individuals through my three books. The following information is available in QA section of 11th edition of my book “Taxpayer to Taxsaver” : 43(5) defines - “Speculative transaction means a transaction in which a contract for the purchase or sale of any commodity, including stock and shares, is periodically or ultimately settled otherwise than by the actual delivery or transfer of the commodity or scrips.” The proviso enumerates some exceptions which shall not be deemed to be a speculative transaction. These are - “a) contract in respect of raw material or ... b) a contract in respect of stocks and shares entered into by a dealer or investor therein to guard against loss in his holdings of stocks and shares through price fluctuation. c) a contract entered into by a member of a forward market or a stock exchange in the course of any transaction in the nature of jobbing or arbitrage to guard against loss which may arise in the ordinary course of his business as such member.” As per Explanation to Sec. 73, the business of purchase or sale of shares by companies (which are not investment, banking or financial companies) shall be treated as speculation business. Speculation loss can be setoff in the same year only against speculation profits. Unabsorbed speculation loss is allowed to be carried forward for setoff against speculation profits of the subsequent years up to 8 years. It may, however, be noted that loss under any other head of income other than ‘Capital gains’ can be set off against the speculation profits in the same assessment year u/s 71.
Capital losses Q: I am an NRI doing online trading in shares in the Indian Stock Market. On short term gains I am paying 33 per cent tax. Simultaneously I made some capital losses on some shares. Can I claim the amount of capital losses as a refund? Which form should I use to file my return to make such claim? — Taxpayer A: I presume you are earning speculative gains and losses. In that case, the losses can be set off against gains. The tax rate is 30 per cent if your total income is less than Rs. 8.5 lakhs and 33 per cent if it is over that limit. However, if you are referring to TDS, you are advised to draw the attention of the person responsible for deducting tax at source to the fact that you are also earning losses and have a right for set off. Unfortunately, the Act deals with TDS on gains but is silent about TDS on losses and therefore many persons apply TDS only on gains and ignore losses. In such cases, you can claim the refund while filing your tax returns.
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Bharti award ICI Dulux |
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New Delhi, September 13
