B U S I N E S S

Sugar industry gets sweet dose
New Delhi, September 12
The government today announced a financial package for the sugar industry that has been facing tough times for the past over three years. The package will include a major cut in the interest rate on loans disbursed under the Sugar Development Fun.

Achievers
Graduating from bullock carts to coaches
Jalandhar, September 12
From bullock carts to coaches, Jalandhar-based Sutlej Motors has come a long way. It all started as a family-owned enterprise, with a small carpentry shop churning out wooden bullock carts way back in 1935.
Kulwant Singh Wilkhu

More air travel sops on anvil
New Delhi, September 12
As domestic airlines struggle with soaring fuel bills and falling yields per passenger, market dynamics administering the fares have clearly started changing, forcing the airlines to come out with newer schemes to grab the share of the market.

Sugar industry gets sweet dose
Tribune News Service

New Delhi, September 12
The government today announced a financial package for the sugar industry that has been facing tough times for the past over three years. The package will include a major cut in the interest rate on loans disbursed under the Sugar Development Fund (SDF) to 4 per cent from 9 per cent.

Despite a marginal hike in sugar prices, the industry has been facing difficulty in clearing the payment of farmers pending over past many years. The government has been worried that a number of private and coopeartive mills have closed down due to the crisis in the industry.

It has also urged the states to come forward with proposals for open market borrowings by sugar mills at concessional rate of interest with moratorium on repayment.

Talking to reporters here today, Food Minister Sharad Pawar said, “We have decided to cut the interest rate on loans taken from the SDF to 2 per cent below bank rate. This will help ease the credit flow for the sugar sector.”

Mr Pawar said the government was also considering a proposal to allow the industry to make open market borrowings at 6 per cent interest, of which the Centre and respective state governments will guarantee 2 per cent each. The remaining 2 per cent will have to be guaranteed by the credit-taking mills.

Loans will have to be repaid in 10 years with a moratorium for the first four years, he said.

“We are working on these lines, discussions are on with the NCDC, RBI and Nabard. But proposals in this regard have to be submitted by the states,” he added.

The government has already allowed import of raw sugar after a fall in sugar production this year. The sugar output in the 2003-04 season (October-September) came down to 136 lakh tonnes from 201 lakh tonnes last year. Government has permitted duty-free imports of raw sugar for domestic consumption with obligation of exports after processing to be met only in two years.

Mr Pawar said quantity equivalent to imports would have to be exported as the government was not in favour of any price collapse due to surge in imports as that would go against the interests of the farmers.

He hoped that despite fall in production this year, it might increase to over 200 lakh tonnes within the next two years.

A detailed policy in this regard will be announced within eight days, he said adding the imported quantity can be processed and for the time being downloaded in the domestic market.

The domestic sales will be part of the monthly-regulated release mechanism, he added.

He said domestic production coupled with existing stocks of sugar was enough to meet domestic demand and no imports were required.

But in areas where there was shortage of cane, policy should be to encourage import of raw and not refined sugar as this would encourage full capacity utilisation of factories, he said.

Achievers
Graduating from bullock carts to coaches
Poonam Batth
Tribune News Service

Jalandhar, September 12
From bullock carts to coaches, Jalandhar-based Sutlej Motors has come a long way.

It all started as a family-owned enterprise, with a small carpentry shop churning out wooden bullock carts way back in 1935. Today, the company makes bodies for Swaraj Mazda LCVs, designs large coaches on Indian HCV chassis and has turned into an all-integrated coach builder.

Recalls Mr Kulwant Singh Wilkhu, Director, Marketing and Engineering, Sutlej Motors:

“My father Chanan Singh took up a job as a mason at four annas per day. The family went through a gruelling time in 1947 as in the aftermath of Partition, my father lost his job. However, not one to lose heart, he, along with his brothers, started making wooden truck bodies and took a loan in 1957 to form a small company, Vishavkarma Motor Body Builder Cooperative Society.”

In 1965, they started making bodies for buses. Following a split in the family, Chanan Singh floated the present company, Sutlej Coach Builders, with the help of his sons — Daljit Singh, Paramjit Singh and Kulwant Singh — in April 1974. All that he got to start the project was Rs 5,000 in cash and two basic machines.

Today, the enterprise is a leader in making coaches, buses and application vehicles and many call them trendsetters. A visit to the company’s premises on Kapurthala Road in Jalandhar lends a peep into innovative designs that have changed the face of buses in the country.

Mr Wilkhu links the company’s fortunes with the Punjab Tourism Development Corporation decision of awarding them the contract of launching air-conditioned luxury coaches for the state transport. “I was in the final year of engineering when my father asked me to complete this project. We did it in 38 days and the bus designed by us was priced at Rs 90,000,” recalls Mr Wilkhu.

They’ve not looked back ever since and have manufactured over 600 ordinary buses, besides mini-buses for Swaraj Mazda.

In 1985, the company started manufacturing hi-tech de luxe luxury coaches as per international norms. These coaches ply in Bihar and Nepal, besides Punjab. In 1992, they upgraded their facilities and started manufacturing metal bodies for luxury coaches based on conventional chassis for the domestic and export markets.

The company added another feather in its cap when it launched the first monocoque integral coach. It came out with low-floor monocoque designs for single and double-decker buses, which were a hit with commuters in the metros. Such low-floored buses are also being used by the Jet Airlines as airport buses.

Boasting of an ISO 9000 certification, the company ranks third in the world, after Neoplan and Cobus, in the manufacture of such airport buses. The future plan is to go in for QS-9001 certification.

With a desire to bringing the world’s best to India, the company has entered into alliances with Merc makers for engine components and ZF, Germany, for gearbox components.

“Our manufacturing facilities have been steadily growing. Spread over 20 acres, the plant has a manufacturing capacity of 1,000 large-sized coaches per annum,” Mr Wilkhu says. The price range varies from Rs 7 lakh to Rs 60 lakh.

Claiming a total capital outlay of Rs 6 crore and a group turnover of Rs 40 crore, Mr Wilkhu says Volvo, an international player, is one of their main competitors. “We have come out with Lexia -945, a safety-equipped luxury coach. The trial runs have been successful and we are all set to launch it in India.”

The company has lent technical collaboration to Banbros, Kenya, wherein engineering knowhow and kit of the body to be assembled will be made available for the benefit of east African countries.

More air travel sops on anvil
Tribune News Service

New Delhi, September 12
As domestic airlines struggle with soaring fuel bills and falling yields per passenger, market dynamics administering the fares have clearly started changing, forcing the airlines to come out with newer schemes to grab the share of the market.

The launch of a recent budget airlines, Air Deccan, has already taken its toll on the market even though the real low-cost tickets are out of reach till at least the end of this financial year. The launch of more budget airlines over the next 18 months is expected to further effect the fare pattern.

According to reports, 10 to 12 new no-frills carriers plan to launch services in the high-cost Indian air travel market.

According to experts, it will help reduce air fares by 35 to 50 per cent and boost the seat availability by over 40 per cent. And the eventual winner would be the passenger who would not only have greater choice of travel but also variety for travel and of course greater availability of seats.

The latest round of discounts announced yesterday by Jet Airways is a direct result of the Air Deccan’s presence in the market. With Indian Airlines already having announced new schemes to woo the passengers, announcement from Jet Airways’ was also due.

Passengers can also expect more sops from other private domestic airliners operating in the country shortly.

Banks expect hike in interest: Ficci survey

Mumbai/New Delhi, September 12
Following rise in inflation and hardening of rates globally, a majority of banks expect the interest rates to go up by 0.25 per cent over a six month horizon, according to a survey conducted by Ficci.

“While it is a widely held belief that interest rates will rise with 80 per cent of respondents expecting an upward shift, rising inflation and global developments (hardening of rates worldwide and oil prices) are cited as primary reasons for expected hike in rates,” Ficci said in its survey on the status of banking industry.

The survey showed that 48 per cent expect rates to rise within next six months while 37 per cent perceive an imminent rise within three months.

A majority (58 per cent) see a 0.25 per cent hike compared to a belief of 42 per cent that rates would be hiked by 0.5 per cent, it said.

“However, interestingly, a majority of those who expect a rise within three months also forecast a higher upward revision of 0.5 per cent,” Ficci report said.

Those, who were not expecting an upward revision in rates claim that increased permissible limit of the FDI and FII in industry and ensuing competition, thereby, would drive down interest rates even further, it added.

PSU banks’ profit up

The Ficci survey brings out that the combined average net profits of the much-maligned public sector banks registered a robust growth of 59.5 per cent in 2003-04 over the previous year, way above the increase in profits of private banks and foreign banks.

Banks for lifting FII cap

PSU banks have pitched for foreign direct investment and lifting of the 20 per cent cap on foreign institutional investment for enabling them to raise fresh capital from the market and sustain the growth momentum, according to the Ficci survey.

IBA roadmap

With the government favouring the creation of bigger and stronger entities, the Indian Banks Association will soon come up with a roadmap that can trigger off a flurry of mergers among PSU banks. — Agencies

Tax advice

by S.C. Vasudeva

No rebate on course fee

A. You cannot claim a rebate in respect of the amount of Rs 14,000 paid by you as a course fee to Ignou from your total income.

Tuition fee rebate

Q. My son completed his degree in electronics and communication engineering in May, 2003. I paid his tuition fee as under: -

1999-2000 Rs 38,000

2000-2001 Rs 33,500

2001-2002 Rs 33,500

2002-2003 Rs 33,500

Total Rs 138,500

I am regularly filling income tax returns, but through an oversight, I could not claim any rebate of tuition fee as paid above. Please advise (i) Can I now claim refund of the tuition fee from Income Tax Department and if so, (ii) How much tuition fee is refundable to me and (iii) What type of papers and documents I have to submit.

— B.S. Pathania

A. Clause (xivb) of Sub-Section (2) of Section 88 of the Act, which deals with the rebate on ‘tuition fees’ paid, was inserted by the Finance Act, 2003 i.e. w.e.f. the assessment year 2004-05 relevant to previous year 2003-04. Accordingly, only the tuition fees paid on or after 1st April 2003 would be eligible for rebate under the said section.

However, for future you may note that the proof of payment of tuition fees would be required to be submitted in order to claim the rebate u/S 88 of the Act.

Penalty

Q. The assessment for one of my clients for 2002-03 was completed in July 2004. The return filed was a loss return and after the assessment the loss has been reduced. The Assessing Officer has initiated penalty proceedings. My question is whether the Assessing Officer can levy penalty in cases where the loss is reduced and there is no positive income?

— Gurcharan Singh

A. As per the amendment made by Finance Act, 2002 in Explanation 4 to Section 271(1) (c) of the Act, penalty can be imposed by the Assessing Officer in cases where the loss declared in the return of income is reduced on the completion of the assessment.

BRIEFLY

Tatas pierce market cap
New Delhi, September 12
After turning the closely held TCS into a public entity, Tatas have become the first private industrial house to pierce the Rs 1 lakh crore market capitalisation mark and in the process overtook the market leader, state-owned ONGC. Tatas achieved this distinction after the listing of its flagship company TCS. — PTI

Best manager
Ahmedabad, September 12
The Chief Operating Officer (COO) of Tata Teleservices, Mr Jagrut Vyas, was conferred upon the ‘AMA-Metrochem Outstanding Manager of the Year’ award for developing his telecom enterprise as a leading wireless player in Gujarat. — UNI