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Chidambaram reaches out to the grass roots Montek hints at some harsh decisions
VAT irks Beopar Mandal Aviation Notes Investor guidance
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Chidambaram reaches out to the grass roots
New Delhi, June 19 The urgency in the Finance Ministry can be gauged from the fact that Finance Minister P. Chidambaram himself has written the letter laying down a multi-point action plan within a specified time-schedule. Mr Chidambaram has asked the state governments to finalise the operational targets in consultation with local offices of Nabard and banks in the state and district level bankers’ committee (SLBC) meetings before June 30, 2004. He has also asked the chief ministers to preside over an “urgent meeting of SLBCs”. Sources in the Finance Ministry said that the Finance Minister’s initiative assumes significance especially in the critical importance of state governments for raising the flow of credit to farmers. The new package announced by the government on Friday involves a number of measures which can be effectively implemented “only with the close cooperation of the state governments”. A large proportion of the total farm credit by banks, targeted to reach Rs 1,04,500 crore in 2004-05, will come from cooperatives which are projected to lend Rs 39,000 crore while another remaining Rs 8,500 crore would come from Regional Rural Banks (RRBs). The rest will be lent by commercial banks. “Cooperatives are almost entirely in control of the state government. As of now there are about 367 district cooperative banks, 98,000 primary agricultural credit societies and 30 state cooperative banks. The total deposits of these amount to about Rs 80,000 crore and is increasing by 10 per cent every year. The objective is to energise the cooperatives,” a senior Finance Ministry official said. Mr Chidambaram, in his letter to the Chief Ministers has identified “energising and helping cooperatives in the state” as one of the main tasks of the state governments. The Finance Minister also asked the CMs to advise district collectors “to ensure that district-level technical committees urgently review scales of finance to meet the realistic credit needs of farmers”. “An appropriate communication on the subject to district collectors by your Chief Secretary and regular reviews at the state and district levels will greatly help the process of implementation,” Mr Chidambaram noted. Besides, Mr Chidambram has asked the CM to ensure that the state governments provide assistance for formulation of new bankable investment projects such as plantation, horticulture, fisheries, organic and other agricultural activities “in the jurisdiction of each rural and semi-urban branch of commercial banks”. The small and marginal farmers, especially the tenant farmers, oral lessees and share croppers, have come in for special mention with the state governments being asked to furnish necessary certificates/ documents to these farmers to enable to them to access institutional credit. For purposes of debt-relief, the state governments have been asked to provide all information requested for by banks. Finance Ministry sources said a series of meetings have been scheduled for the coming week, including a meeting between the chairpersons and general managers dealing with priority sector lending of all commercial banks on June 22. This would be followed by a meeting each on June 24, 25 and 26 at Lucknow, Kolkata and Hyderabad, respectively, between the chairpersons of all 196 Regional Rural Banks (RRBs) and also their executive directors.  |
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Montek hints at some harsh decisions New Delhi, June 19 “Progress is made only if you are willing to take hard decisions,” Mr Ahluwalia told newspersons here today. Mr Ahluwalia, who will take over as the Deputy Chairperson on July 1, met Member Secretary of the Planning Commission Rajiva Ratna Shah today. Exuding confidence that the growth rate of seven to eight per cent was achievable, the eminent economist, however, refused to comment on the demand of trade unions to increase the rate of interest on employees’ provident fund. “I do not want to comment on demands of individuals or political parties. But our effort would be to translate the CMP of the government into action”, he said. Mr Ahluwalia came in for some lavish praise by his immediate predecessor at the Yojana Bhavan, Mr K C Pant. Accompanied by his wife, Ms Isher Judge, Mr Ahluwalia called on Mr Pant. Describing him as good economist and a person with a very high professional competence, Mr Pant said Mr Ahluwalia would be an “asset” for the UPA government. |
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VAT irks Beopar Mandal Faridkot, June 19 The traders’ body will register its protest immediately after the announced date to express its resentment by organising rallies, dharna and even hunger strike if the situation so demands, says Mr Madan Lal Kapoor, state president of the mandal. Criticising the behaviour of the present state government here today, he said the CM has failed to abolish octroi also. He urged Capt Amarinder Singh, the Chief Minister, to reconsider his decision and follow the path of the UP government, which has postponed VAT implementation keeping in view the economic conditions of the trading community there. |
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Aviation Notes SEPTEMBER 11, 2001, terrorist attacks continue to haunt the United States of America. Ever since those ghastly attacks, passengers on domestic and international flights are being subjected to rigorous security checks at airports, sometime amounting to down right stripping. The passengers, domestic and international, have lodged several protests against this ‘uncivilised methods of friskings and checks. But the security authorities have remained ‘unmoved’ expressing helplessness. Following mounting complaints and protest, the US is planning to launch a scheme for the elite class of passengers to help them bypass long queues of security checks at the airports. Under the scheme, such passengers will have to pay a one-off fee of $ 100 and also agree to undergo extensive background checks in bargain for a faster clearance to the departure gate. In return, such passengers will be issued a card containing biometric data of his/her detailed background. The scheme is said to be acceptable to business travellers but is being resented by ‘ordinary passengers’ for the uncalled for discrimination.
Strange demand “Heads I win, tails you lose.” This seems to be the slogan of private operators, Jet Airways and Sahara. When they were making their entries into the Indian skies, they wanted relaxation in rules. In the name of open skies, they got many concessions and facilities. Now since they have stabilised, they want ‘stringent norms for new entrants. Two private operators, among several stipulations, suggest that the minimum paid-up capital for new entrants should be Rs 250 crore and licences should be given on selective basis. The Minister of State for Civil Aviation Praful Patel heard suggestions of the two airlines and said: The Government will do what is just and fair.” |
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Investor guidance Q I am a retired person and have invested some amounts in MF schemes, debt as well as equity funds. My investments in debt funds are for growth options and for equity funds it is dividend option. Since in the previous FY (2003-04), on numerous occasions, I shifted some amounts from one scheme to another in the same fund house, partly or fully. As such, I would like to request you to guide me as to how to calculate the return on such redemptions/withdrawals by manual calculations or by the help of PC. Further, I also sold some shares in the market last year, purchase price of which is not known. How to account for such income for the purpose of income tax? Also, is it possible now to monitor the status of one’s own shares with a daily portfolio valuation through the Internet by any method?
— A.D.Ruprell A Each shift from one scheme to another, even within the same MF, or from one option to another even within the same scheme is treated as a transfer and, therefore, will attract the provisions of capital gains. You can calculate the returns by using a scientific calculator or by using Excel programme on your PC. The details of such calculations are contained in my book, “In the Wonderland of Investments”. If you have earned losses on a few transactions and gains on others, you may offset the losses against the gains by choosing that item of the loss for set off against that item of the gain, which provides maximum benefit. Keep in mind that long-term loss cannot be set off against short-term gains. 2. Many of you would not know the cost of acquisition of the assets when the documents are lost or destroyed through natural calamities like floods or fire, or sheer negligence. There are no guidelines in the Act indicating how to handle such situations. This deficiency requires correction. Until the authorities provide any solution, you have to fend for yourself. This is what you can do - If the assets were acquired prior to 1.4.81, you have the option to substitute the fair market value as on that date in place of their cost. In the case of equities, the prices prevalent on 1.4.81 of A-group shares at major bourses are available in all ready reckoners. If a scrip was purchased later or happens to be in the B1 or B2 category, you can request the stock exchange to give you a certificate indicating the quote of the date and if you do not know the date, ask for the lowest price during the year of purchase. All exchanges provide such information at a fee, albeit a little stiff one. In the case of other assets, the price can be assessed by an official chartered valuer. There is no provision to substitute the assessed value in place of the cost for assets acquired in subsequent years, but it is the best recourse, and the ITO accepts it if he likes your face. The best course is to invest the entire net sale proceeds in an avenue u/s 54EC or 54ED. Normally, you would have invested only the capital gains computed after subtracting the indexed cost. I am suggesting that you treat the cost of acquisition as nil!
Dividend provisions Q: My query is related to Sec. 94(7) and the dividend stripping provisions. a. What happens to an investor who books a STCL when he sells units bought under a monthly dividend plan? Then he will never complete the mandatory 93 days and will have to wait for a year! b. Also, it appears that any investor taking a dividend option is at huge risk - for example, I have units in Tata Equity Opportunity Fund which declared a dividend every month from October to March ! Does this mean that I cannot ever sell the units (bought in august 03) till June-July 04 assuming they don’t declare dividends in May. — A Gandhi A: As per Sec. 94(7), if any person buys any securities, shares or units within three months prior to the record date and sells such investment within three months after the record date and the dividend or income on such investment is exempt from tax, then any loss arising on account of the transaction of purchase and sale (to the extent it does not exceed the amount of dividend) will be ignored for the purposes of computing income chargeable to tax. For clarity, let us assume that you have purchased the units at NAV of Rs. 10 and the record date of a dividend was 1.5.04 and the amount of dividend was Rs. 0.10 tax-free. The Sec. 94(7) does not become operative in all the following cases - 1. The date of purchase was before 1.2.04. 2. Suppose the date of purchase was within 3 months on 1.4.04. Date of sale is after 1.8.04. 3. Suppose the date of purchase was 15.4.04 and the date of sale was within 3 months of the record date on 10.6.04. The redemption price was Rs. 10.02. In other words, there is no loss. The only situation when the Sec. 94(7) sinks teeth into the assessee is when the NAV at redemption in the case-3 above is below Rs. 10. For instance, if a) the NAV was Rs. 9.98, the loss of Rs. 0.02 will not be allowed to be claimed. b) The NAV was Rs. 9.85, out of the total loss of Rs. 0.15 per unit, the loss of Rs. 0.10 will not be allowed. The extra loss of Rs. 0.05 will be allowed. All this is so, whether the dividend payout is monthly, quarterly or at any other frequency. The conditions of this section are to be applied to each and every dividend. To sum, the following conditions have got to be cumulatively applicable for Sec. 94(7) to be operational --- 1. The purchase has to be within 3 months before the record date for dividends. 2. The sale has to be within 3 months after the record date for dividends. 3. The dividend has to be tax-free. The sale should result in capital loss. |
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Trade fair Whirlpool Bharti awarded Net banking J & K tunnel Sony Interest rate |
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