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Chidambaram
Budget may raise IT exemption limit Services sector
continues to grow: CII Tata Daewoo may
sell trucks in India Airtel to ring in
J&K in August United Breweries
fined for not mentioning expiry date
Cash award not
exempt from tax |
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Accept buyback
offer for Ultra Teck shares
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Chidambaram Budget may raise IT exemption limit New Delhi, June 13 The enhancement of the IT exemption limit, which is at present Rs 60,000, appears possible as Finance Minister P. Chidambaram seeks to widen the tax base by throwing the net to a host of hitherto untaxed services while keeping the income tax rates stable. Incidentally, Mr Chidambaram’s immediate predecessor Mr Jaswant Singh had promised to have a relook at increasing the IT exemption limit, if voted back to power. At the same time, however, the government is unlikely to raise the income tax rates from the current maximum level of 30 per cent for individual tax payers. The logic behind announcing an increase in income tax exemption limit and bring more services under the tax net is to improve the level of tax compliance at the consumption level. The road map for the introduction of the Value Added Taxation (VAT) system is also expected to be laid down in the Budget. The Finance Ministers of all states will meet in Delhi on June 18, ostensibly to discuss the issue of VAT and other critical issues of fiscal federalism. The biggest worry, however, can be to rein in the fiscal deficit and wipe out the revenue deficit as promised by 2009. The revenue deficit (the gap between the Central Government’s current expenditure and current revenue
receipts) is mandated to be brought down by at least 0.5 per cent of GDP annually by the Fiscal Responsibility and Budget Management Act. The government is also likely to consider the creation of an Oil Price Stabilisation Fund, a measure to hedge domestic oil companies and consumers from the high volatility in international crude oil prices. This is expected to be supplemented by the reduction in customs and excise duty both on crude and finished petroleum products, including the two major transport fuels — petrol and diesel. Experts, familiar with the Budget-making exercise, however, are of the opinion that the creation of a non-lapsable Oil Price Stabilisation Fund will tantamount to a backward step towards the earlier Administered Pricing Mechanism. In fact, some experts say, the new fund could actually mark the return to a earlier oil pool account which existed during the APM regime before it was dismantled a couple of years ago. A cut in customs duty in crude and petrol and diesel appears a distinct possibility as of now. At
present customs duty of 10 per cent is applicable on crude oil while petrol and diesel attracts a customs duty of 20 per cent.
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Services sector continues to grow: CII New Delhi, June 13 According to the survey the fastest growing service sectors maintained their pace in the last financial year (2003-04), often increasing their pace from the previous year. Even the moderately growing sectors did better than last year, the survey said. The fastest growing sector was cellular phones, which grew by more than 106 per cent in the last year. This is still higher than the previous year, when the industry grew by 90 per cent. The forecast for the next six months is a growth between 90 to 100 per cent. This was followed by housing finance and sanctions for home loans rose by over 30 per cent. It, however, had grown by 42 per cent during the last fiscal and the survey had projected that this sector would continue to grow at over 90 per cent during the next six months. The survey also pointed out that tourist arrivals had increased by more than 17 per cent, giving the hotel industry a cheerful year, since the arrivals in previous years, particularly during 2001-02, had fallen. Tourist arrivals in April to March, 2002-2003, however, registered an increase of 15 per cent and continued this trend this fiscal. The survey estimated that this year, tourist arrivals would rise by another 15 to 20 per cent. The domestic software industry grew at 15 per cent, while it grew by 13 per cent last year. The ITeS-BPO sector also grew a robust 54 per cent. Software exports also marked a slight increase as it registered a 27 per cent increase as compared to 27 per cent in the previous year. “The domestic software industry is expected to grow at 10-15 per cent in the next six months, while the ITeS-BPO sector is expecting a growth of more than 50 per cent. “Software exports will rise by more than 20 per cent”, the CII study estimated. India’s rising import and exports resulted in a good year for the air cargo industry. Overall the industry grew by 8 per cent, while exports of air cargo rose by 11 per cent. It grew by 9 per cent last year. Imports of air cargo rose by more than 7 per cent, and the outlook for the next six months for the industry is a growth of 5-10 per cent. Cargo export and cargo imports are also estimated to maintain a steady growth of 5-10 per cent, the survey said. The survey, however, pointed out that the leasing industry had another bad year. It fell by 20 per cent, and this came on top of a 5 per cent fall in the previous year. Even in the next six months, the outlook was negative. This was because of high taxes, restrictions on NBFC’s and weakness in India’s debt recovery system.
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Tata Daewoo may sell trucks in India
New Delhi, June 13 Tata Daewoo’s plant at Gunsan in South Korea is working at a little more than a quarter of its annual capacity of 20,000 trucks. At present, it produces just heavy trucks, but is also designed to make medium
trucks. TDCV officials said, in a statement, the company had planned to gradually expand the production capacity of the Gunsan facility and approach other South East Asian markets and China. Recently, Tata Daewoo launched Novus to meet current environmental standards known as Euro III. This is the maiden model TDCV has unveiled in South Korea since Tata Motors bought Daewoo’s truck unit in March. The Novus with environment-friendly engines consists of a total of 30 models such as 8 to 25-tonne trucks, dump trucks and tractors, and will be sold through Daewoo Motors. Tata Motors Chairman Ratan Tata said the Novus would help it compete better in South Korea and other international markets. Tata Motors bought the Korean firm out of court receivership for $ 105 million as part of plans to globalise its business. Tata Daewoo hopes to expand its 25 per cent share of Korea’s heavy truck market and make inroads into light and medium trucks. In India, Tata Motors still hopes to launch high-tonnage trucks to complete its domestic portfolio and compete with the Indian unit of the world’s second-largest truck maker AB Volvo, the leader in that segment.
— UNI
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Airtel to ring in J&K in August Srinagar, June 13 This information was given to Chief Minister Mufti Mohammad Sayeed by a team of Airtel officials headed by Mr R.V.S. Bhuller, Head Operations of the Jammu and Kashmir, who briefed him about the progress made by the company to launch the services. Mr Bhuller told the Chief Minister that Airtel had set up separate exchanges for Jammu and Srinagar, so that subscribers in one area were not dependent for the link at the other. He assured Mr Mufti Sayeed that Airtel would provide quality service on competitive prices. He said 100 towers would be set up from Lakhanpur to Baramula. The company was installing its own transformers to regulate power supply, he said, adding that 75 to 80 per cent recruitment would be from local people.
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United Breweries fined for not mentioning expiry date
New Delhi, June 13 “If for the sake of arguments, it is conceded that after a lapse of six months, aging and chemical changes take place in the beer bottles resulting in organic growth, in that case, it is the responsibility of manufacturer to inform consumers that the beer should be consumed within six months,” the Seikh Sarai District Consumer Forum said in an order. Awarding a compensation of Rs 9,430 to Mr N. K. Gupta of R K Puram, the forum further observed that the complainant had done a “good service to the consumer movement” by pointing to the deficiency on part of the manufacturer in not displaying on the labels of bottles the relevant information with regard to aging of beer and its fitness for consumption. Mr Gupta had bought 12 bottles of beer manufactured by the company from the DTTDC outlet in Vasant Vihar.
— UNI
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by J.C. Anand Accept buyback offer for Ultra Teck shares In general, the corporate sector is performing well with higher net profitability and dividend payouts. The industrial production growth rate for April, 2004, is 9.4 per cent which is more than double over the growth rate in April, 2003. A number of companies has declared bonus issues. In spite of these positive factors the market continues to drift lower. Last Friday, the Sensex was down by 112 points. There are no buyers in the market. Volumes are scanty. The market sentiment is marked by uncertainty and pessimism. Some analysts believe that the market is likely to stay weak till the Budget proposals are announced on July 2. Analysts even say the market is in a state of coma and may even go worse after the Budget proposals are known. Larsen & Toubro has now demerged its cement sector in favour of a new company called Ultra Teck Cemco Ltd. which will ultimately be controlled by Grasim Industries. For every 10 shares held by the shareholders in Larsen & Toubro, four shares have been allotted in the new company (Ultra Teck). The equity capital of Larsen & Toubro, after demerger, has been reduced from Rs 249 crore to Rs 24.9 crore by the simple process of reducing the face value of each equity share from Rs 10 to Re 1 per share. In other words, every shareholder who has 10 share of Rs 10 each will now have 10 shares of Re 1 each, or 5 shares of Rs 2 face value each. Grasim has already offered to buy back shares of Ultra Teck. at a price of Rs 342/60 per share up to 30 per cent of the fully paid equity shares of Rs 10 each of Ultra Tech. The offer opens on June 7 and closes on June 21. It may be wise for the shareholders to accept the buyback offer of Ultra Tech shares. Equity shares of Larsen & Toubro are not yet quoted on the stock exchanges. It is also not known what will be the quantum of free reserves of Larsen & Toubro and what part of these reserves will go to Ultra Teck. The equity shares of the demerged Larsen & Toubro should be retained on a long-term basis. With equity capital of Rs 24.9 crore, its free reserves are likely to be huge. Larsen & Toubro has declared dividend of Rs 16 for each share with a face value of Rs 2. This company is likely to show excellent results in the years to come with the possibility of bonus shares almost every second year. |
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