B U S I N E S S

Clearing Patent Bill a challenge
New Delhi, February 27
After presenting the Budget tomorrow, the UPA government is likely to face a major challenge to muster enough numbers in the Lok Sabha to pass the contentious Patent Bill. The Left parties have already made their opposition public, saying that the Bill should be referred to the parliamentary committee for further discussion.

HLL opens Uttaranchal plant in record time
Hardwar, February 27
India’s biggest consumer goods maker Hindustan Lever Limited formally launched its fastest ever, personal care plant in Hardwar, on Friday. The 30,000-tonne per annum plant, which took less than six months to go on stream from ground breaking to commissioning has been operating for a few months now.

PNB to foray into insurance
Chandigarh, February 27
Punjab National Bank to foray into the insurance sector by opening an insurance broking company after getting the necessary approval from IRDA. It has entered into a tie-up with Principal Financial Group, USA, and Vijaya Bank for its company. This was disclosed by the PNB General Manager, Mr C.P. Swarnkar, who was in the city today to announce the launch of its second public offer on March 7.

Coal blocks are stacked outside a house in Beijing on Sunday. China’s breakneck economic growth is causing a dangerous shortage of its most important energy source coal, with potential consequences for the entire world, state media warned. — AFP

MFN status from Pak sought
Amritsar, February 27
India chances of getting Pakistan to grant it the most favoured nation status continue to be remote, with Pakistan Prime Minister Shaukat Aziz once again saying that New Delhi stands to commercially benefit more without such a status being in place. But captains of Indian industry, especially those based in Punjab, have a different story to tell.

Investors await signal from Budget
Markets continued to be cautious ahead of the Budget and the indices continued to move in a narrow range, albeit there were bouts of volatility in the intra-day trading. Overall, the indices were range bound with the Sensex losing 14.6 points to close at 6570, whereas the Nifty added 5 points to close the last week at 2061.

TaX ADVICE

No exemption for HRA if you own house
Q: I want clarification on the following points: -
(a) I and my wife have joint registry of our home.
(b) My wife has taken HBA on this house from Punjab government for construction as she is Punjab government employee.

• GRAPHICS: INDIAN ECONOMY

• KEY GROWTH RATES -ECONOMIC SURVEY 2004-05

Clearing Patent Bill a challenge
Manoj Kumar
Tribune News Service

New Delhi, February 27
After presenting the Budget tomorrow, the UPA government is likely to face a major challenge to muster enough numbers in the Lok Sabha to pass the contentious Patent Bill.

The Left parties have already made their opposition public, saying that the Bill should be referred to the parliamentary committee for further discussion. They have alleged that the government has promulgated the Patent Ordinance under the pressure of the MNCs and WTO. After the results of state assembly elections, the Congress will not find it easy to get the support of RJD MPs on this controversial Bill.

Sensing opposition of the Left parties and a section of the industry, the government has indicated its willingness to introduce amendments in the Patent Bill, to get clearance from Parliament.

Sources said the government is likely to introduce amendments in the Patent Bill like “strengthening of pre-grant and post-grant opposition to the patents, reduction in fee for filing patents and strengthening the provisions relating to national security and to guard against patenting abroad of dual use technologies.”

Commerce and Industry Ministry Kamal Nath said the Patent Bill along with amendments would be introduced in the current session of Parliament. He said, “The government is hopeful to get clearance from the Parliament as it has agreed to consider the objections of the alliance partners and industry.”

The Bill is likely to affect the pharmaceutical, agriculture and IT sectors. Pharmaceutical industry with $ 4 billion domestic sales and over $ 3 billion exports has been divided over the implications of the Patent Bill.

While the large companies and MNCs are supporting the Patent Bill, small scale units have demanded that government should introduce “compulsory licensing, strengthening of pre-grant and post-grant opposition to the filing of patent applications and adequate provisions for the safeguard of domestic industry.”

On the other hand, the big companies like Ranbaxy, Eli Lily Wockhardt and others have supported the Bill claiming that it will enable India to become a major hub of R&D, outsourcing of bulk drugs and innovations in the new drugs. It will also help the pharmaceutical industry to attract FDI and domestic funds for further growth since the cost of drug manufacturing was substantially lower in India in comparison to other countries.

Referring to the steps taken by the Brazil and South Africa, the Left Parties have argued that government should take firm stand within WTO framework to safeguard the interest of domestic industry and consumers.

India has already emerged as a low cost producer of antiretroviral and supplier of the same to the international organisations and needy patients in Africa. The government has also announced to set up a Rs 150-crore fund for pharmaceutical research and development support.

However, Left parties and a section of the industry have maintained that the due to developments in the industry, new drugs would be patented for the prevalent and emerging diseases. “The generic companies will no longer be able to supply low-cost drugs to Indian patients as they would either have to pay royalty or stop production at all,” they said.

HLL opens Uttaranchal plant in record time
Swati Vashishtha
Tribune News Service

Hardwar, February 27
India’s biggest consumer goods maker Hindustan Lever Limited formally launched its fastest ever, personal care plant in Hardwar, on Friday. The 30,000-tonne per annum plant, which took less than six months to go on stream from ground breaking to commissioning has been operating for a few months now.

Set up at an investment of Rs 130 crore, the plant is currently providing employment to a 350-strong team of staffers hired entirely from Uttaranchal, said HLL Vice-Chairman M. K. Sharma. The factory would focus largely on the production of fast growing consumer goods for the lower rung of the market. At least 10 HLL suppliers and ancillaries are also in the process of setting up units, packing operations and warehouses, at an added investment of nearly Rs 90 crore.

Low cost personal care products like shampoo, toothpaste, face creams among other would be manufactured at the factory looking to target the demand for such goods in the Hindi heartland. The small packs of products produced by the factory would not only answer the demand for these products but also be trial products for the mass market and introduce the company’s brands to the untapped market, said Executive Director A. Adhikari.

Later the company might look to expand itself in food processing in the region, he said. The factory would cater to the fast growing demand of mass-market products for North India and ease the burden on the southern and western units to cater to this demand, cutting down the transportation costs, company officials said.

PNB to foray into insurance
Tribune News Service

Chandigarh, February 27
Punjab National Bank (PNB) to foray into the insurance sector by opening an insurance broking company after getting the necessary approval from IRDA. It has entered into a tie-up with Principal Financial Group, USA, and Vijaya Bank for its company. This was disclosed by the PNB General Manager, Mr C.P. Swarnkar, who was in the city today to announce the launch of its second public offer on March 7.

The bank is also awaiting RBI nod for stepping into the life insurance and pension segments.

In the life insurance sector, PNB will hold a 30 per cent stake, Principal Finance will have 26 per cent and Vijaya Bank 5 per cent and the remaining 39 per cent would be held by Berger Paints. In the pension venture, the bank and Principal will work out the equity structure once PFRDA comes up with the norms of foreign holding.

Meanwhile, the bank will hit the market on March 7 with its second public offer of eight crore equity shares for raising close to Rs 3,000 crore.

With this issue, holding of the government in the bank would be reduced from the current 80 per cent to around 57 per cent. The price for the book built issue would be decided on March 4.

Of the eight crore shares on offer, the bank would reserve 10 pe cent (80 lakh shares) for existing small shareholders and an equivalent amount for employees. Thus, the net offer to the public would be 6.4 crore shares. A total of 3 crore shares out of the public issue would be returned to the government at the cut-off price arrived at after the book building process.

MFN status from Pak sought
Ravinder Singh Robin

Amritsar, February 27
India chances of getting Pakistan to grant it the most favoured nation (MFN) status continue to be remote, with Pakistan Prime Minister Shaukat Aziz once again saying that New Delhi stands to commercially benefit more without such a status being in place.

But captains of Indian industry, especially those based in Punjab, have a different story to tell.

B. K. Bajaj, president of the Indo-Foreign Chamber of Commerce and Mr Gundir Singh, Chairman of CII (Amritsar), said the granting of MFN status to India by Pakistan could improve things. — ANI

 

MARKET UPDATE

by Lalit Batra

Investors await signal from Budget

Markets continued to be cautious ahead of the Budget and the indices continued to move in a narrow range, albeit there were bouts of volatility in the intra-day trading. Overall, the indices were range bound with the Sensex losing 14.6 points to close at 6570, whereas the Nifty added 5 points to close the last week at 2061.

A couple of announcements made by the government during the week confirmed the government’s intentions of pursuing reforms seriously, despite the constant pressure and opposition from its Left allies. The announcements pertain to the banking and real estate/construction sectors. The Ministry of Finance cleared a new autonomy package for public Sector banks aimed at creating a level-playing field for them with their private sector counterparts. Besides allowing the public Sector banks the freedom to decide on virtually the entire gamut of human resource issues, the package permits them to undertake acquisitions of companies or businesses, close or merge unviable branches, open overseas offices, set up subsidiaries, take up a new line of business or exit an existing business, without seeking prior government approval.

The second announcement was a proposal to allow 100 per cent FDI through the automatic route in construction. The government has also laid down measures to prevent speculation in real estate by foreign investors.

Lacklustre movements point to the fact that investors are seemingly awaiting a clearer road map to future growth of the economy in the Budget to be announced today. One reason for directionless market could be the fear that a hike in the securities transaction tax (STT) in the Budget could lead to sell-off on bourses and hurt sentiment.

The Economic Survey released on Friday outlined reforms in tax and expenditure and labour laws as a priority in the Budget and favoured the opening up of more sectors.

Pfizer

Pfizer Ltd is a leading player in the domestic formulations market, with Pfizer Inc, USA, holding 40 per cent of the equity and has management control in the Indian arm. Pfizer Ltd’s main therapeutic segments are vitamins, cough expectorants, non steroidal anti-inflammatory Drugs (NSAIDs), protein supplement, cardiovascular, anti-infective and vaccines. Pfizer is renowned for its unparalleled marketing prowess, reflected by the fact that two of its products are perched right on top of the list of the best-selling pharma brands in India.

The company announced an impressive 65.4 per cent growth in net profit to Rs 45.52 crore for the year ended November 30, 2004 as compared to Rs 27.51 crore last year. The scheme of amalgamation of the erstwhile Pharmacia Healthcare Ltd with the company was approved by the Bombay High Court and is effective from December 2003.

The company’s stock which is trading at Rs 650 levels commands a 40 times discounting to its earnings of Rs 15.25 per share. The stock may turn out to be a decent pick for long-term investors.

 

Tax advice

by S.C. Vasudeva

No exemption for HRA if you own house

The tax rebate in respect of repayment of loan can be availed by your wife since she has borrowed money for the acquisition of the house. This rebate would be allowable against the tax due to her. The maximum amount on which rebate is available is limited to Rs 20,000 per annum.

Interest on KVP

Q. (i) I request you to kindly indicate the interest rate separately that may be adopted in respect of the following Kisan Vikas Patra (KVP) for the purpose of filing Income Tax Return for the year 2004-05.

(a) KVP purchased on 19.7.1999 -the maturity period being after six years.

(b) KVP purchased on 2.3.2000 -maturity period being six and a half (6½) years.

(c) KVP purchased on 19.3.2001- maturity period being seven years and three months (7 ¼) years.

(ii) Is a uniform rate of interest required to be adopted irrespective of maturity period? If so, what is the rate of interest?

(iii) Am I supposed to furnish the annual information return along with income tax return if I deposit Rs 50,000 in PPF account in one year? — Nek Chand

A: (i) (a) (b) & (c) The department of economic affairs has published a table with regard to the interest, which is required to be included as interest accrued in respect of investment in Kisan Vikas Patra (KVP) by an assessee. The relevant table in respect of maturity amount for Rs 1000 denomination of KVP is given hereunder:

(ii) The interest will have to be computed on half yearly compounding basis for the number of days for which KVP has been held.

(iii) You are supposed to attach with the return a proof for the deposit Rs 50,000, in your PPF account whether it is deposited at one point of time or deposited in instalments.

BRIEFLY

Katrina for P&G                                                
Chandigarh, February 27
Procter and Gamble recently signed on beauty goddess and upcoming Bollywood star Katrina Kaif as its brand ambassador. Katrina joins Pantene's leaque of past celebrities endorsing the brand, including Sonali Bendre, Bipasha Basu, Shilpa Shetty, Amrita Rao, Anupama Verma and Tara Deshpande. Katrina will appear in a new advertising blitz featuring the findings of a recent study on 'Hair care practices of India's most beautiful women' conducted by global market research major ACNielsen in association with magazine Cosmopolitan. — TNS

Innova
Jalandhar, February 27
Innova, the spacious three-row seat car of the Toyota-Kirloskar Motors, was launched here yesterday. A caption contest was also organised on the ocassion. Mr. J.K. Gupta, chairman of Castle-Toyota, the company's showroom here, said the car was a dream vehicle for those who desired a combination of space and style. He said Innova would be available in both diesel and petrol variants. — TNS

Windshield
Chandigarh, February 27
Windshield Experts, the pioneers in car glass repair and replacement in India, today tied up with ICICI Lombard insurance company to manage all automotive glass claims for them. Mr Ratish Ramanujam, COO, Windshield, said, "The tie-up will help the policy holders get car glass repaired or replaced in a fast, hassle-free and cashless transaction." — TNS

IndusInd Bank
Amritsar, February 27
The seventh branch of IndusInd bank in Punjab was inaugurated here yesterday by Mr Varghese Thambi, senior Vice-President of the bank. He said the bank with an outlay of Rs 19,000 crore was providing all kinds of retail banking facilites, including Internet banking, money transfer and special schemes for senior citizens. — OC

Interest rate
Bathinda, February 27
Mr B.D. Gupta, Deputy General Manager, Oriental Bank of Commerce, Bathinda, announced today that the bank had reduced the rate of interest from 11 per cent to 8.5 per cent on the loans advanced to public for depositing earnest money for the proposed residential colony of Improvement Trust, Bathinda. — OC

Woodmart
Chandigarh, February 27
Woodmart, recognised as a name dedicated to delivering an extensive range of Indian and imported furniture, recently introduced 'Fantastique' collection of furniture with designs from the USA. Woodmart offers a complete furnishing solution for the entire house. Mr K.V.Rao, CEO, Dolphin Mart, said in addition to Fantastique collection, Woodmart offers 'The Seasons' collection with designs from Spain and indigenously manufactured 'Raaga' collection crafted in teakwood. — TNS