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Mid-Term Appraisal to flag off national priorities: Montek
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Ambanis to sort out ownership issue on Tuesday
Punjab seeks Central aid of Rs 3,600 cr, HP Rs 120 cr
Forex reserves at record high
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Samtel plans large screen products Parwanoo, November 20 Samtel Color, a picture tube manufacturer, plans to enter the large screen-size segment. It is in the process of setting up a new facility to make 29” super-flat colour picture tubes (CPT) and will commercially roll them out by the second quarter of 2005-2006.
Gold glitters at Rs 6,650
IA eagerly awaits new aircraft
PF balance is part of retirement benefit, can fetch loan
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Mid-Term Appraisal to flag off national priorities: Montek
New Delhi, November 20 Planning Commission Deputy Chairperson Montek Singh Ahluwalia said the Mid-Term Appraisal (MTA) would “flag off national priorities and a roadmap for development programmes which would be available to the government for its consideration much before Budget 2005-06”. Among other things, the MTA, which is expected to be ready by the end of this year, will present a detailed assessment of the resources position facing both the Centre and states and the implications for the last two years of the Tenth Plan Period (2005-06, and 2006-07). “States have not received as much resources as were envisaged through devolution because of the slowdown in the economy. Moreover, the losses of the SEBs continue to impose a very heavy burden on the states. Also, though the staggered effect of the Pay Commission payouts on the states is beginning to wear off, it had left most states with a heavy debt overhang. The MTA will examine trends in states’ resources and identify priority corrective steps,” sources said. As part of the process initiated by him since he assumed office as Deputy Chairperson of the Planning Commission, Dr Ahluwalia today held a brainstorming session with the Chief Minister of the northern states, including Delhi, Punjab, Haryana and Himachal. This was the last in a series of meetings held by Dr
Ahluwalia. He has visited several state capitals to get a first hand view of the states’ resource position and the development programmes that may be considered in the MTA. Today’s meeting took place in Yojana Bhavan here. “During the meeting with the Chief Ministers, the Planning Commission team asked about the general policy issues which should be addressed in the MTA,” Dr Ahluwalia said. The Planning Commission is working on the premise that the resource position in the remainder of the Plan period will be much more difficult than was envisaged at the time the Plan was formulated. “The resource constraint will be especially difficult because the National Common Minimum Programme (NCMP) has established new priorities which require a substantial increase in allocation in critical areas such as health, education, irrigation, watershed management, railway modernisation and employment programmes,” sources said. The MTA will examine the resource position and its implication for Plan programmes, keeping in mind the new priorities identified in the NCMP. Sources also said the revival of rural consumption demand was expected to contribute to investment expansion, but this would only happen if agricultural growth targets were met. Dr Ahluwalia said during the meetings, several issues were raised by the states. These included payment of royalty to mineral-rich states on ad valorem rates. While there was a demand from states to waive central loans in view of the investment requirements and the severe fiscal stress, such a step would inevitably result in widening the Central Government’s deficit. The fiscal position of the states continues to remain under stress for a variety of factors including a staggered effect of the Pay Commission payouts, the losses of the state electricity boards (SEBs) and the less projected growth rate in the overall economy.
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Ambanis to sort out ownership issue on Tuesday
New Delhi, November 20 The meeting is expected to take place in the presence of their mother and widow of group founder Dhirubhai Ambani, Ms Kokila Ben, in Mumbai after elder brother Mukesh Ambani returns from US, highly placed sources said. The meeting comes within days of Mukesh Ambani going public on the ownership issues that are plaguing the biggest private corporate house of the country. Meanwhile, younger brother Anil Ambani and Kokila Ben visited the Nathdawar temple in Rajasthan today and offered prayers, family sources said. Despite various attempts, Mukesh Ambani could not be contacted in US as he was busy in meetings. Sources said in the meeting the two brothers and their families might try to resolve all the issues, including the ownership of the Reliance empire. Earlier this week, Mukesh had admitted that “there are ownership issues”, but “they are in the private domain”. Even as Mukesh had discounted fears of any impact on the functioning of the company saying Reliance had moved beyond one, two or three individuals, including himself, the stock market yesterday had witnessed the group losing over Rs 2,500 crore market capitalisation. There have been reports of problems between the two brothers on the issue of ownership of Reliance Industries Ltd (RIL) after the demise of their father Dhirubhai Ambani. Reliance is India’s largest private company with an annual turnover of about Rs 80,000 crore and has presence in various sectors, including oil refinery, petrochemicals, power and telecommunication. As per the information of Centre for Monitoring Indian Economy (CMIE), the Ambanis hold 46.67 per cent of the stake in Reliance Industries Ltd, 13.48 per cent is held by the public and FIIs own 22.85 per cent equity. — PTI
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Punjab seeks Central aid of Rs 3,600 cr, HP
New Delhi, November 20 Making a presentation at a meeting of the chief ministers of northern states with the Planning Commission here on the Mid-Term Appraisal of the Tenth Plan, Punjab Chief Minister Amarinder Singh sought additional Central assistance for the implementation of the crop adjustment programme.
“Keeping in view the acute problems created due to the wheat-paddy cycle adversely affecting the soil and water resources, the state has formulated a scheme to replace one million hectares of wheat and paddy with other crops. If implemented in a phased manner, an amount of Rs 320 crore would be required to cover an area of 2.5 lakh hectares during 2005-06,” he said. Capt Amarinder Singh also said that an additional amount of Rs 680 crore should be released immediately over the next three years in order to implemented the drinking water programme in rural areas. All remaining 564 not covered (NC) and 1324 partially covered (PC) habitations were required to be covered with safe drinking water supply up to the end of the Tenth Five Year Plan. In addition, an estimated amount of Rs 500 crore was required over the next five years for the overall development of the Scheduled Caste population in the state. Besides, an additional amount of Rs 15 crore would be required to meet cooking costs under the mid-day meal programme, Captain Singh said. The Himachal Pradesh Government has requested the Centre to provide a one-time special assistance of Rs 120 crore under the Accelerated Irrigation Benefit Programme (AIBP) to meet the full funding requirements to the Shah Nahar project. Himachal Pradesh Chief Minister Virbhadra Singh said for the Shah Nahar Project, nearly 61 per cent resources have to come from Punjab and “this has been repeatedly brought to the notice of the Planning Commission”. The Himachal Pradesh Chief Minister also requested the Planning Commission for establishing a suitable mechanism for compensation of revenue loss due to the complete ban imposed by the state on felling of green trees as the ban has benefited the entire downstream states and economy at large. He also sought identical treatment to all special category states for area specific exemptions for setting up industrial units in the states and said that such exemptions should be allowed to continue indefinitely beyond 2006-07. Haryana Chief Minister Om Prakash Chautala urged the Planning Commission to take steps for release of the state’s share of Rs 376.86 crore of fuel cess for the past four years. He said on account of the non-release of these funds, the resources of the state had been adversely affected. Moreover, Haryana had got a one-time Central assistance of Rs 22.30 crore during 2004-05 as compared to Rs 73.26 crore received during 2003-04.
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HDFC hikes rates on home loans
Mumbai, November 20 The revised rates for floating rate home loans would be 7.5 per cent onwards. The fixed home loan rates would continue to range between 8.25 per cent and 8.75 per cent, HDFC said in a press note here today. HDFC follows a three-month reset cycle for all its floating rate loans and the change in RPLR would impact the existing customers based on the date of their disbursement. The revision in RPLR would result in revision in the repayment term for existing customers while their equated monthly instalment (EMI) would remain unchanged. Hence there would no immediate increase in cash flow for existing customer, it said. The revision is in line with the hardening of interest rates in the economy due to rising inflation and shrinking liquidity in the domestic market. — PTI
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Forex reserves at record high
Mumbai, November 20 According to the apex bank, India’s foreign exchange reserves touched a record $123.54 billion on November 12, up by $1.31 billion from the previous week. The bank said the increase was mainly due to continued inflows from foreign institutional investors and remittances by exporters. In all the country added as much as $23 billion to its forex reserves this year. Analysts say foreign funds have pumped in as much as $911 million in to the stock and bond markets in the past few weeks. In all they have invested $ 6 billion during the current year.
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Samtel plans large screen products
Parwanoo, November 20 Talking to TNS, Mr Alok Chatterjee, Business Head of the Deflection Yoke division, Parwanoo, said the new line is being established at a competitive capital cost of Rs 110 crore at its existing CPT manufacturing site in Ghaziabad. At present, all tubes in the 29” plus category are being imported from South-East Asian countries and China. But with the establishment of this new line, Samtel would become the first company in the country to manufacture 29” CPTs for both conventional and flat models. Samtel currently has the capacity to make 5.5 million CPTs per annum. The company expects the 29” TV to contribute a major chunk to its revenue growth. Since all leading TV manufacturers like the LG, Samsung, Videocon, Onida and BPL source their CPT requirements from Samtel Color Limited in the 21” category, they would do so for the 29” also.
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Gold glitters at Rs 6,650
Mumbai, November 20 Standard mint gold and pure gold 99.9 grade opened at Rs 6,645 and Rs 6,685 per 10 gm, respectively and gained Rs 40 to close at 6,650 for standard and 6,690 for 99.9 purity per 10 gm.— UNI
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by K.R. Wadhwaney IA eagerly awaits new aircraft
IT is said, a bird in hand is worth two in bush. This is the situation prevalent in two national carriers, Indian Airlines and Air-India, regarding fleet expansion.
Indeed, IA has manfully crossed most of the hurdles in buying 43 new aircraft for Rs 9,475 crore and just the Cabinet approval remains after the Public Investment Board (PIB) gives its clearance. The Indian Airlines is in an upbeat mood that sunny days are ahead after years’ of languishing in wilderness. AI’s fleet is meagre and aged. It has just 62 aircraft. Most of them need replacement. Boeing 737s are old and have outlived their usefulness. Some aviation officials, particularly a few senior pilots, call these ‘flying coffins’. According to international norms, the fleet should be replaced after 15 years of service. But this particular model is more than 23 years old and continues to fly. There was time in the days of JRD Tata when A-I flights operated punctually; its cabin crew was courteous and snacks/meal services outstanding. Now there is a widespread decline in services on ground and in the air.
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by A.N. Shanbhag PF balance is part of retirement benefit, can fetch loan Q: The government recently (The Hindu dated 29 the October 2004 and ET dt.30 Nov.2004) relaxed the age for investing in Senior Citizen Scheme to 55 years. It further adds that the amount is restricted to 15 lakhs or retirement benefits whichever is less. In this connection, I had on 1 October 2004 (Retired under VRS from RBI) received my provident fund balance and as I am not eligible (58 years old) I had invested in the time deposit with the Post Office for one year. I was told by the Post Office I cannot close the deposit before six months and after six months I may close but no interest is payable. In this connection, please let me know: i) whether PF balance which was received by me is a part of retiral benefits? ii) Whether I can take loan from the time deposit and open an account under the Senior Citizens Scheme? — M.K. Sridharan A: 1. Yes, PF balance is a part of retirement benefits. “Retirement benefits” means any payment due to the depositor on account of retirement whether on superannuation or otherwise and includes Provident Fund dues, retirement/superannuation gratuity, commuted value of pension, cash equivalent of leave, savings element of Group Savings linked Insurance Scheme payable by employer to the employee on retirement, retirement-cum-withdrawal benefit under the Employees’ Family Pension Scheme and ex gratia payments under a voluntary retirement or a special voluntary retirement scheme. 2. Yes, you can pledge this account to get a loan from any commercial bank. There is no stipulation that the deposit in SCSS should flow directly and only from the retirement benefits. As long as the amount of deposit does not exceed the total retirement benefits, there is no problem. However, you please check if the extra interest payable on the loan is offset by the extra interest earned from the SCSS. NRI turns resident
Q: After six years in the USA my son returned to India for good in June this year. He has taken up employment in an Indian company from July 1. He has not been in India for 365 days in the past four years and he has not completed 182 years in India till today. When will he be treated as resident under FEMA and under Income Tax Act? Whether his salary income earned in the USA during April/May 04 and subjected to US taxes is liable to be taxed in India? As per the latest Budget, in the case of an individual such interest income by way of interest paid or credited to his Non-Resident (External) Account in any bank in India on or after 1st April 2005 shall be included in the total income of the individual. Whether the interest income on FCNBS account is also liable to taxable from 1st April 2005. Kindly advise whether the income arising and accruing on the deposits from 1st April 2005 is taxable or all interest including cumulative interest for past periods credited/paid after that date is taxable. Is it advisable to break/close all deposits before the date to save taxes? — S.Srinivasan A: 1. The residence status is for the financial year. Since your son has returned in June, for the year he would be a Resident since he would end up spending more than 182 days in India by March 31, 2005. Now his exact status has to be determined. Resident but not Ordinarily Resident (RNOR) is a person who satisfies one of the following conditions —- a) he has been a non-resident in India in nine out of the 10 previous years preceding that year, or b) has during the seven previous years preceding that year been in India for a period of, or periods amounting in all to, 729 days or less. Most of the NRIs will be caught by the requirement of stay in India for 729 days or less during the past seven years. Consequently, anyone who returns after seven or more years will become RNOR for two years. Those returning after six years will become RNOR for one year only. This is subject to his stay in India during the previous seven years for 729 days or less. Those returning after being NRIs for 5 continuous years or less will become Residents immediately. An RNOR is not required pay tax on his forex income. If the status of your son for FY 04-05 is RNOR, his income for April-June 2004 in the USA will not be taxable. 2. The new tax implications will not come into existence until the Budget becomes an Act. NRE, FCNR and RFC interest is proposed to become taxable w.e.f. 1.4.05. The interest earned will be treated as income and taxed accordingly. There is no clarity about any other related issues. By converting the NRE/FCNR deposits into Indian currency deposits you do not save any tax. If the rate of interest on these old deposits is higher than the current interest rates on various schemes, it may be to your advantage to continue.
PO or bank?
Q: I am a senior citizen wishing to invest in senior citizens saving scheme. I am given to understand that the scheme will be handled by some designated public sector banks. I have gathered from various agents who say that the scheme is handled only by post office. As I do not wish to invest with post office as the procedure is very cumbersome, can you please inform me if the scheme with the banks is already operative? Alternately can I invest in 8 per cent taxable bonds in which case will I lose much on interest accrued? Procedure with banks is without any
hassle. — Soli Kekobad A:
Approach the same agents once again and they will tell you that now there are many banks that have started operating the accounts. If you still have any difficulty, give me your address so that I can lead you to a bank near your residence. Banks authorized to accept PPF deposits like SBI, BOI etc. operate the SCSS deposits too.
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