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Montek Singh calls on Chidambaram
Banks allowed to raise long-term bonds
Steel regulatory commission on the cards |
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Neyveli net slips to 1,143 cr Neyveli Lignite Corporation has reported a net profit of Rs 1,143.51 crore during the year ended March, 2004, a nominal decline from the previous year’s Rs 1,148.40 crore. The board of directors of the corporation also proposed a dividend of 14 per cent, amounting to a payout of Rs 234.88 crore.
More aircraft need of the hour
Shifting to other option attracts capital gains provisions
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Montek Singh calls on Chidambaram New Delhi, June 12 Mr Ahluwalia, who is at present with the International Monetary Fund (IMF), is tipped to become the Economic Adviser to the Prime Minister, a position currently being held by former Revenue Secretary Dr S. Narayan. “There is a lot of goodwill for both the Prime Minister and the Finance Minister. Their faces are known to the rest of the world. The financial world looks at these things”, he said, after his meeting Mr Chidambaram which last for about half-an-hour. Mr Ahluwalia was in Delhi on his way to China. His term in the IMF ends next month. A Rhodes Scholar at the Oxford University and a graduate from Delhi’s prestigious St Stephen’s College, Mr Ahluwalia was a key member of the original think tank, when Dr Manmohan Singh, as Finance Minister, launched the structural reforms process in 1991. He was first Economic Affairs Secretary and later became the Finance Secretary between 1991 and 1996 and also served as Finance Secretary when P. Chidambaram was the Finance Minister in the erstwhile United Front (UF) government. A former member of the Planning Commission, Mr Ahluwalia said everyone was looking forward to the first Budget of the new government.
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Banks allowed to raise long-term bonds Mumbai, June 12 The RBI said the banks should have first provided assistance to such infrastructure projects before raising resources through the long-term bonds. At present, the banks are allowed to issue long-term subordinated debt in the nature of unsecured redeemable bonds, which qualify for Tier-II capital. According to the RBI notification the bonds will be denominated in Indian rupees and should be issued in plain vanilla form without call or put option. The RBI has also mandated that the bonds may be issued with a fixed or floating rate of interest. The floating rate of interest will be referenced to market determined benchmark rates. The bonds may be issued through a public issue or private placement in full compliance with SEBI guidelines/norms, including mandatory rating and listing. The bonds will form part of time liabilities and will, therefore, be subjected to CRR/SLR requirements. The funds collected by or on behalf of the bank for the issue, pending final allotment shall also be taken into account for the purpose, the RBI said. The banks issuing long-term bonds are also required to submit a report to The Reserve Bank of India giving details of the bonds issued, such as amount raised, maturity of the instrument, rate of interest, together with a copy of the offer document, soon after the issue is completed.
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‘Harmony’ for senior citizens Mumbai, June 12 “The initiatives — comprising a magazine, interactive centres and website —will help the eldery sustain their sense of pride and self-esteem,” according to Ms Tina Ambani, Dhirubhai Ambani Memorial Trust managing trustee. The magazine, “Harmony — Celebrate Age”, will have a content mix that ranges from practical to spiritual, she said, adding that its “tone is positive, motivational and upbeat.” The magazine, which will have columns by experts from different fields, will be distributed in association with Living Media group in the country, she said. Harmony Interactive Centre, a platform for senior citizens to interact with “their peers in a space of their own and experience life anew”, she said, adding that, the first of the centres would be opened in South Mumbai. A library, computer facilities, interactive games, yoga, meditation and health camps are some of the offerings of the centre, she said. The trust will also launch a website, harmonyindia.org, which will cover a broad spectrum of subjects, from health to finance, yoga and spirituality to recreation, she added. The website aims to create awareness about the needs of the eldery, Ms Ambani said.
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Steel regulatory commission on the cards New Delhi, June 12 Speaking to newsmen after the 18th National Steel Consumers Council meeting here, Mr Paswan said it was felt at the consumers meet that the import duty on scrap should be abolished from the present rate of 5 per cent. The Minister said there was a consensus that the import duty on finished steel should be reduced to 5 per cent from the present rate of 15 per cent. Moreover, the Minister said, steel should be exported only after the domestic demand is fully met. He said steps would be taken to enhance the annual steel production capacity from its present level of 35.15 million tonnes to 60 million tonnes by 2012 and to 100 million tonnes by 2020.
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by K.R. Wadhwaney
More aircraft need of the hour
The rules for acquiring new aircraft by Air-India and Indian Airlines are being drafted. Minister for Civil Aviation Praful Patel has gone on record as saying the rules will be more transparent. The changes in wording of rules are welcome. But the aircraft-starved two carriers will stay starved if the red-tapism continues to plague the ministry. The assessment of aircraft is very complex. It can only be done by eminent flyers and aviation engineers. But statistics show that genuine experts are not consulted while arriving at which aircraft to buy and from which manufacturer. The minister, though aware of some goings-on as he has worked on a committee before, is in a dark about procedures and rules that govern acquisition of aircraft. On the subject of ‘Policy on airport infrastructure, for example, he was not briefed properly. He was shown the policy that was formulated in December, 1997. The rule 15.4 in the booklet, page 23 (Ownership and management) says: “Foreign equity participation in such ventures may be permitted up to 74 per cent with automatic approvals, and up to 100 per cent with special permission. Such participation could also be by foreign airport authorities”. If this is the rule in operation, where is the disputes? Similarly, on aircraft acquisition, the minister is totally unfamiliar with the procedures. To say system is “complex” does not solve the matter. Also to say that ‘we are not concerned with the manufacturer or the price of the aircraft’ is nothing but ‘tall claim’. If the government is not concerned about Boeing or Airbus Industries and price, then where is the hitch by buying the aircraft? The price and manufacturers are the chief components and they are the decising factors and not mere words, which are the prerogative of the minister. The two ailing airlines require aircraft to keep/float regardless of the rules. ‘Transparent’ rules will not provide relief to these two airlines. They should have aircraft to extend their operations and enlarge their routes. The minister has gone on record as saying that he will talk to the Prime Minister before finalising the modalities of making the process more transparent. He is free to obtain Prime Minister’s permission, but the need of the hour is that two carriers should be provided aircraft to reschedule their operations.
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by A.N. Shanbhag
Shifting to other option attracts capital gains provisions
Q: I am regular reader of your articles. I have a query that when an investor switches from one option in scheme to another one that is suppose from growth option to dividend option that same mutual fund scheme does the capital gains attract at this point of time whether short or long. Please reply so that I can file my tax returns accordingly — Manish A: Transfer between different options of the same scheme as well as transfer between different schemes of the same fund attracts provisions of capital gains.
House rent
Q: I have two points which you may kindly clarify. One man say “X” has housing plot in his name. In case he wants to construct one house there, “Is it possible to have the house in joint name of him and of his wife”? In case “X” is in service and he is getting HRA from his company, can he show half of the HRA, is paid to his wife as house rent, if the house is in joint name? — CS Sebastian A: 1. You may adjoin the name of your wife as the second holder for convenience. What is material for the sake of ITA is the source of application of funds to acquire any asset and not the name in which the asset is held. Yes, it is proper to have the holding with the first name of the person who has contributed the funds and the second name for convenience. However, if your wife has also contributed some amount, she can be a joint holder with ascertained share in the property. 2. An employee living in his own house or where he does not pay any rent is not eligible for the exemption on HRA.
Surcharge
Q: You have stated that 10 per cent surcharge payable on income tax is limited to the extent the income is over 8.5 lakh. My CA and other CA here are of the view that once the income crosses 8.5 lakh the surcharge is applicable to total taxable income. My Case : The total taxable income for the year ending 31/03/2004 = Rs.1795838. Tax as per calculation by your view is ((1795838-850000)*0.33)+19000+210000 =541127 (Considering surcharge only on amount excess of 8.5 lacs .) Where as my CA says that it is Rs 564027. Considering surcharge on total tax. —N. D. Daga A: The surcharge is applicable on the total income-tax payable. The rule is provided to protect the assessees having income marginally over Rs.8.5 lakh. The amount of surcharge is limited to the income over Rs. 8.5 lakh. For instance, if the total income is Rs. 8.6 lakh, the tax works out at Rs. 2,32,000 and the surcharge at 10 per cent at Rs. 23,200 but it is limited to Rs. 10,000.
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Forex reserves dip $ 142 m FII net buyers PNB loans Tractor financing Gold jumps Airtel plan UTI Bank |
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