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ICRA deflates feel-good balloon New Delhi, March 8 Rating agency ICRA has warned economic growth may dip to 6.4 per cent during 2004-05, hinting that the “feel-good factor” would be temporary and over 8 per cent growth unsustainable.
Punjab CM to meet bankers today
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Dealers stock bicycles
Conveyance allowance up to Rs 5,000
non-taxable
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ICRA deflates feel-good balloon
New Delhi, March 8 However, it said GDP growth can rise to 7-7.5 per cent in subsequent years if the new government adopts good policies and implements them efficiently. “It is sorely tempting for government to seize upon the good news of 2003-04 and try to argue that 8 per cent is a sustainable rate of growth and that India now stands on this trajectory. But that is patently far from being the case,” ICRA said in its report ‘Money and Finance’ to be released soon. Assuming a good monsoon this year along with robust growth in industry and services sectors, ICRA said “even then, we still would not get GDP growth in excess of 6.4 per cent.” “This is the combined impact of 1.7 per cent growth in agriculture and 7.8 per cent in non-agriculture (industry and services sectors),” ICRA said. The rating agency expects manufacturing to grow by 7 per cent and construction activities by 9 per cent while services continuing to post over 8 per cent growth in 2004-05. “If good policies are adopted by the new government and efficiently implemented, it is possible in a few years that the underlying achievable growth in non-agriculture sectors may be pushed up beyond 8-8.5 per cent,” ICRA said. Given that agriculture is unlikely to grow in excess of 2 per cent, the result would be an overall economic growth of a little over 7 per cent, it added. ICRA’s projection assumes importance in the light of government’s tall claims that economic growth of over 8 per cent was sustainable in the coming years. The Central Statistical Organisation estimated GDP growth at 8.1 per cent for this fiscal backed by a 9.1 per cent growth in agriculture, 6.5 per cent in industry and 8.4 per cent in services. After posting 5.7 per cent and 8.4 per cent growth in the
first two quarters, the country is expected to log 8.8 and 8.4 per cent
growth in the third and fourth quarters of 2003-04. — PTI |
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Punjab CM to meet bankers today
Chandigarh, March 8 The purpose of the meeting was to explore funding for
the Punjab Infrastructure Development Board (PIDB) as well as to
complete projects taken up under the Anandpur Sahib Foundation related
to preserving the Khalsa heritage in the form of state-of-the-art museum
with multi-media presentation facilities etc. PIDB, the bankers have
been informed, was a specialised agency to which the state has provided
a ring fenced fund of about Rs 150 crore, per annum, earmarked
exclusively for infrastructure development like roads and bridges. For
the heritage projects intended to preserve for posterity the state’s
culture and history, the government was keen to borrow at least Rs 200
crore. At another level, the state’s mandi board was exploring a loan
of about Rs 550 crore from financial institutions for the rural link
roads. The invited bankers are, Punjab National Bank — Mr S.S. Kohli,
Oriental Bank of Commerce — Mr B.D. Narang, State Bank of India — Mr A.K.
Purwar, State Bank of Patiala — Mr A.K. Das, Union Bank of India — Mr
B.Leela Dhar, Canara Bank — Mr R.V. Shastri, Punjab and Sind Bank — Mr
Parkash Singh, Central Bank of India — Dr Dalbir Singh and Bank of
Punjab — Mr Darshanjit Singh. Besides the Chief Minister others
expected to attend tomorrow’s meeting are the Finance Minister, Mr Lal
Singh, the Chief Secretary, Mr J.S. Gill and Principal Secretaries of
Finance, Local Government, Industries and Commerce, Information and
Public Relations besides Managing Directors of PSIDC, PIDB and Punjab
Agro-Industries Corporation. |
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Tax-free UTI bonds from March 31
New Delhi, March 8 “We expect that more number of investors will prefer bonds
to cash for the seven UTI schemes. The exact amount of cash outgo will
depend on how many people opt for it,” Joint Secretary (capital
markets), U.K. Sinha, said on the sidelines of an insurance summit here.
If all the investors opt for bonds, government has estimated it has to
issue about Rs 5,000 crore worth of 6.6 per cent tax-free interest
bearing bonds. The bonds would be offered as a conversion option to
investors of seven schemes — Children Gift Growth Fund of 1986
(CGCF-86), Children Gift Growth Fund of 1999 (CGCF-99), Bhopal Gas
Victims MIP 1992 (BGVMIP), Monthly Income Plan of 1998 and 1999,
Rajlakshmi Unit Plans of 1994 and 1999. “The payment date for the
bonds would be set at March 31,” Sinha said, adding budgetary allocation
has been made for foreclosing these high assured return schemes. The
Specified Undertaking of UTI (SUUTI) is coming out with tax-free bonds.
— PTI
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GDP growth to be 8-10 pc, says Kelkar
New Delhi, March 8 Aided by abundant
skilled labour force, rising savings rate and doubling of insurance
business every 4-5 years, India will emerge as one of the fastest
growing economies of the world in the next 20 years, Adviser to the
Finance Minister Vijay Kelkar said, inaugurating an international
insurance congress. “Growth is going to accelerate in the coming
decade. Last decade, the country’s GDP grew by nearly 6 per cent
annually and the next two decades will witness 8-10 per cent annual
growth,” he said. According to the Central Statistical Organisation,
India’s GDP is estimated to log 8.1 per cent growth this fiscal. —
PTI |
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TRAI to limit tariff plans
New Delhi, March 8 “Frequent revision and withdrawal
of tariff plans further add to the confusion of the consumers.... A
possible way of addressing the problems without curtailing the
flexibility granted to the operators or hampering the competition can be
to place a suitable cap on number of tariff plans that service providers
can offer”, TRAI said. There are 3,925 existing tariff plans offered
by basic and mobile users in 2003 and they are likely to go up soon with
the entry of additional operators in several circles. “These large
numbers give rise to issues involving regulatory and consumer concerns”,
TRAI added. The regulator pointed out that the competitive activity
coupled with the flexibility in offering tariffs has led to a situation
where a large number of plans are offered in the market. TRAI has
sought written suggestions from all stake holders, including service
providers and consumers on a consultation paper latest by March 27,
2004. “The main issues that this consultation process cover includes
the number of plans to be permitted, the identification of service
segments for the application of the proposed cap, desirability of having
a minimum validity period for tariff plans”, it said. |
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Dealers stock bicycles
New Delhi, March 8 Industry experts say
the bicycle industry has observed a spurt in demand during the past six
months. The dealers were buying bicycles at a time when the demand was
low. Mr G. Hari, President, TI Cycles, said, “bicycle demand picks up
after April as schools open after vacation and is on the lower side
during the October-March period. This time we have observed that during
the second half of the current fiscal year, the demand has increased
sharply despite an increase in the prices.” The actual impact of the
steel prices will be visible in the first half of the next financial
year after the clearance of the present stocks,” he observed. The annual
demand for bicycles is hovering around 1.1 crore over the past many
years in the country. Mr Hari claimed that the industry finds it
difficult to check the prices after a rise in the steel prices. “On an
average, the increase in the steel prices by Rs 1,000 per tonne results
in the increase in bicycle costs by Rs 20. The steel prices have so far
increased by Rs 3,000 per tonne over the past one year. Most of the
manufacturers are feeling the heat,” he said. |
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Liberty Shoes to diversify
New Delhi, March 8 As part of this
restructuring, Liberty Shoes has become the holding company for the shoe
business whereas retailing has been spun off into a separate entity
called Liberty Retail Revolutions. “We have seen flat topline growth
and shrinking profit for the past four years till the last fiscal, but
our finances look better now. We expect to close this year at 10 per
cent growth to touch Rs 380 crore but this figure is expected to reach
Rs 500 crore over the next two years,” Executive Director of the Liberty
group Adarsh Gupta said here. He said the retailing venture will set
up six exclusive, company-owned outlets within India, besides four
overseas in Dhaka, Colombo, Singapore and Dubai. “We may also look for
international expertise in the retailing venture,” he said, but declined
to elaborate. — PTI |
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by S.C. Vasudeva Conveyance allowance up to Rs 5,000 non-taxable
Q:
I am a salaried employee drawing a total salary of Rs 5,00,000 a
year. Apart from the salary I am also entitled to a rent-free
unfurnished accommodation as well as conveyance allowance Rs 10,000 pm.
I have my own car, which I am using both for official as well as for
personal purposes. Are the benefits of rent-free accommodation and
conveyance allowance taxable. If so, please let me know the total amount
includible in the salary income.
— Harinder Singh, Delhi Ans: Rule 3
of the Income Tax Rules 1962 deals with the valuation of perquisites
provided by an employer to an employee in respect of rent-free
unfurnished accommodation. According to the said rule, in your case 7.5
per cent of the salary is includible in your total income in respect of
the period during which the rent free unfurnished accommodation was
occupied by you. With regard to conveyance allowance, Rule 2 BB of the
Rules provides that any allowance granted to meet the expenditure
incurred on conveyance in performance of duties of an office or an
employment of profit shall be covered within the provisions of Section
10(14) of the Act. Therefore the said amount would be exempt from tax in
your case if the amount paid to you is spent on the use of your own
vehicle for official purposes. In other words, the exemption for
conveyance allowance in your case is allowable only if and only if you
are able to prove that the amount of Rs 5,000 has been spent on the
maintenance of the vehicle used for the purposes of the employment. You
may therefore have to keep a log book/ complete record to prove this
aspect. In case you are unable to do so, I am afraid the total income in
your case will have to include the amount of Rs 50,400 (Rs 4,200x12). It
may be added that the amount of Rs 800 has been deducted from Rs 5,00 as
the same is exempt from tax in terms of Rule 2BB of the Rules.
Q: —
Ashish Mohan, Karnal Ans: Your information is correct that you don’t
have to maintain books of account provided the income is declared @ 8
per cent of the gross receipts. Therefore if you declare income at Rs
2,40,000 and pay the tax in accordance therewith, there would be no
requirement to maintain the books of account as per Section 44AD of the
Act. You can file your return on this basis. However, in case your
actual income is less than the aforesaid amount of Rs 2.4 lakh and you
would like to contest the said position before the tax authorities, it
will be necessary to get the tax audit done in accordance with the
provisions of Section 44AB of the Act and furnish the tax audit report
alongwith the return. In such a case the requirement to maintain the
books of account would become essential.
Q: — Raj
Kumar, Ambala Ans: The question raised does not clarify the position of
the other half of the property, i.e., which is not let out. It is
therefore presumed for the purposes of answering your query that the
other half, which is not let out, is self-occupied. The tax computation
is worked out as under on the basis of such presumption. Income from
salary (pension) 60,000 Lees: Standard deduction @ 40 pc 24,000
36,000 Income from house property 6,00,000 Less: Municipal taxes
15,000 (1/2 of Rs 30000) Less: Deduction u/s 24 5,85,000 30% of above
1,75,500 4,09,500 Total Income 4,45,500 Tax payable for assessment
year 2004-2005 1,07,650 The above amount has been computed on the basis
of figures as provided. You may also be entitled to a rebate u/s 88 for
Life Insurance Premium P.P.F. contribution etc.) as well as a rebate u/s
88B (which is available to a senior citizen) provided you fulfil the
conditions prescribed in those section. On the above basis you are
liable to pay advance tax.
Q: — Raghbir Singh, Chandigarh Ans: The contention of the
accounts department is correct, as the reimbursement of medical expenses
to the extent of Rs 15,000 is not considered as a perquisite in terms of
proviso (v) to Section 17 (2)(vi) of the Act. The amount of Rs 10,000
being in excess of the permissible amount will have to be included in
your total income. Address your queries at info@scvasudeva.com |
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