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FM may revisit fringe-benefit tax proposal
Ministry of Power fails to utilise allocated funds
Baddi lures homoeo major SBL
Commodity trading gains momentum
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Indonesia courts Indian oil cos
Auto fuel cess irks Aiyar
Delegation from Down Under scouts India
NTPC defends contract
Bajaj presses high-sales button
Hony knighthood for Gates
ONGC arm to drill in Qatar
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FM may revisit fringe-benefit tax proposal
New Delhi, March 2 In his Budget speech, Mr Chidambaram had proposed a 0.1 per cent tax on withdrawal of any amount of more than Rs 10,000 in a single day. This attracted widespread opposition from several quarters including the Congress Parliamentary Party (CPP) and from within the ruling coalition. “There has been a request from the Congress Parliamentary Party and the UPA. I am thinking of putting a different cap on cash withdrawal,” he said here. The Finance Minister was addressing captains of the Indian industry here under the aegis of the Federation of Indian Chambers of Commerce and Industry (Ficci). The proposal to introduce a ‘fringe benefit tax’ had evoked strong reaction from the corporate world. Mr Chidambaram, today assured that the “anomalies” in the Finance Bill in this respect will be addressed. “There is no intention to tax any legitimate business expenditure,” he said adding he would ask for redrafting of the Finance Bill “to ensure that the intentions are reflected in the Bill.” “You should allow the final shape of the Finance Bill to emerge,” he added. Expressing concern over the “huge withdrawal of cash that happens almost everyday,” Mr Chidambaram said, “some way has to be found to deal with the problem.” “Huge cash transactions distort the economy. We have found one way of dealing with the problem. If this is not acceptable, we will find another way,” he said. “I am not stubborn in dealing with the problem in this way but I am stubborn in tackling the problem. If we can’t deal with it in this manner, we can deal with it in a different way,” he said. Mr Chidambaram said that Union Budget 2005-06 has attempted “courageous tax reforms”. “The last major tax overhaul was done in 1997. The customs duty reduction has been brought about to make Indian industry more competitive. The excise duties have been lowered and they must converge around Cenvat rates,” he noted. The service tax net had to be widened. “Still 80 per cent of current services are outside the tax net,” he said. On the direct tax front, he said, “every tax bracket has gained.” “In a growing economy people must spend more and people must save more. The corporate tax (reduced from 35 to 30 per cent) is equitable where all sectors will gain,” he observed. “Our approach was two-fold - stick to the reforms path and ensure that nothing is done to douse the spirit of enterprise and ensure that the benefit of the growth reaches all sections of the society particularly the poor and vulnerable in Rural India,” Mr Chidambaram said.
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Budget hostile to tourism: IATO
Tourism
within the country, especially tour packages would become expensive as a result of the multiplicity of taxes introduced in the Union Budget for 2005-06, the Indian Association of Tour Operators (IATO) said today.
IATO president Subhash Goyal while pointing out that the tour packages could cost at least 10 per cent more than the present prices said: “it is not a Budget which is friendly to the tourism industry.” He said here that the sector has potential to generate massive employment and eradicate poverty but the government has chosen to tax it heavily. “This will discourage domestic and international travellers.” Mr Goyal said there is a terrible shortage of hotel rooms across the country. India received 3.4 million foreign visitors in 2004, up 23.5 per cent year-on-year. Arrivals in 2005 are expected to surge up by 30 per cent. But only 95,000 hotel rooms in star-category are available in major cities. “Land should be given to private entrepreneurs on concessional rates or on easy long-term lease to construct hotels,” Mr Goyal said. The Budget provides for launching special purpose vehicles to finance infrastructure projects, which may include airports. “But no specific mention has been made for construction of new airports,” Mr Goyal said.
— TNS
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Ministry of Power fails to utilise allocated funds
New Delhi, March 2 Standing Committee on Energy, headed by Gurudas Kamat, in its report submitted to the Lok Sabha, has lamented that Ministry of Power has used only Rs 8649.22 crore during 2002-03 against the Budget estimates of Rs 13,483 crore and revised estimates of Rs 11,268.36 crore, and surrendered an amount of Rs 4,833.78 crore. “Similarly the plan outlays of the Ministry for 2003-04 was Rs 14,667.61 crore which were revised to Rs 12,037.77 crore. The actual utilisation of funds during the year was Rs 10,741 crore and the Ministry surrendered an amount of Rs 3,927 crore as compared to the budget estimates for the year,” said the report of the Committee. Power Ministry P.M. Syeed admitted that over the past few years, the country has failed to add adequate power capacity. However, he said, the government was still hopeful to meet the targets fixed for the 10th Five Year Plan regarding power generation and other reforms. Criticising the practice of the Ministry to utilise large portion of the funds during last months of the year, the Committee asked the Government to review all on-going schemes in the month of July-August and if required, re-allocate funds during the financial year. The committee observed that against a target capacity addition of 40245.5 MW set for the 9th Plan, the actual capacity addition was just 19,015 MW. For the 10th Plan (2002-07), the Government has fixed a target of 41,110 MW capacity addition, including 22832 MW through central projects. It noted that during the first three years of the 10th Plan, only 20.7 per cent power projects have been commissioned, 65.3 per cent are under construction and remaining 14 per cent are still under award stage. It has wondered whether the Ministry would be able to meet the target during the remaining period. However, Power Secretary R.V. Shahi, expressed hope that with the unbundling of state electricity boards and effective implementation of the Electricity Act-2003, the Ministry would meet the power generation target within given time frame. The Committee strongly criticised the lackadaisical approach of the government in undertaking energy conservation schemes adding “ even after repeated recommendations, the government have not come out with any specific targets to be achieved during a particular period.” Rapping the Ministry for its failure to make adequate investments in transmission and distribution, the Committee recommended that “ the government should prepare a time-bound programme for renovation and modernisation of existing plants and transmission lines without any delay.”
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Baddi lures homoeo major SBL
Chandigarh, March 2 Mr Rajneesh Chandan, Head of Marketing, talking to TNS on phone from New Delhi, said that since its inception in 1983, SBL has pumped in over Rs 50 crore in business. The company has manufacturing facilities in Sahibabad (UP), Jaipur and Sikkim. He said the tax incentives offered by the Himachal Government, power availability, pollution-free environment and easy
accessibility had attracted them to Baddi. Comparing the popular allopathic stream with homoeopathy, Mr Chandan said SBL is discussing with the government the possibilities of making more homoeopathic drugs available in pharmacies that retail allopathic medicines. “There is a lot of interest in the homoeopathy, but the restricted availability of drugs acts as a hindrance. Only 2-3 per cent of the entire range of homoeopathic drugs is retailed through allopathic pharmacies currently,” he rued. Besides the subcontinent, SBL currently exports to countries like Germany, Canada, the USA, France, Sri Lanka and Russia. It manufactures 11,00 dilutions, 400 mother tinctures, and a range of oils, and shampoos, under the ‘Silk n’ Dry’ brand name. SBL plans to introduce soaps; cosmetics, lozenges, and a range of eye care products shortly. SBL was established in collaboration with Laboratories Boiron of Lyon, France, world leader in the line. It is the only homoeopathic company in India with ISO 9001:2000 certification. It has an R&D unit recognised by the Ministry of Science and Technology. The Indian homoeopathic industry is estimated to be around Rs 200 crore in size, of which the organized sector is worth Rs 100 crore. SBL targets to earn revenue Rs 35 crore in 2004-05, as against the Rs 27 crore in 2003-04.
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Commodity trading gains momentum
Ludhiana, March 2 “There were not very many opportunities and outlets for commodity trading in the region. With the beginning of commodity trading here, not merely the LSE members but various others like manufacturers, farmers, producers, traders, corporates and even industry associations are deriving benefit,” executive director, LSE, Mr H.S. Sidhu said. He said the scope for commodity trading in the region was immense as the state is a home to several industries, including hosiery and steel. Though, the LSE is not directly deriving any benefit as in terms of revenues from commodity trading, Mr Sidhu said, members and people from various other sections were involved and it provided them with better trading opportunities. The LSE Commodities Trading Services Limited begun its operations this month after getting a go-ahead from SEBI. While 60-odd members have got membership so far, it is expected that daily trading volumes would touch Rs 50 crore mark shortly. As things are falling into a regular pattern, the daily volumes have reached around Rs 5 crore already, Mr Sidhu said adding: “This is likely to reach Rs 50 crore mark shortly as more people would become aware of commodity trading here.” The LSE Commodities Trading Services Limited is a broker of MCX and NCDEX, leading commodity-trading exchanges the country. MCX, head-quartered in Mumbai, is an independent and de-mutualised multi commodity exchange while the National Commodity and Derivatives Exchange Limited (NCDEX) is a professionally-managed online multi-commodity exchange promoted by the ICICI Bank, LIC, NABARD and the NSE.
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Indonesia courts Indian oil cos
New Delhi, March 2 “We have vast reserves of oil and natural gas which remain untouched and ready for sustainable utilisation... All these spell opportunities for the Indian businessmen...,” he said launching
the ‘www.indiaindonesiatrade.com’ website at a CII meeting here last night. “They spell profit potentials and possible bases for reaching out to markets in south-east Asia and the south-west Pacific,” he said, adding that tenders would soon be invited for construction of gas pipeline from South Sumatra to Java and also to Malaysia with whom talks are in final stages. The Indonesian Minister said his country was ready to enter into an investment guarantee agreement with India to boost flow of investments into the country. Recalling India’s role in Indonesia’s freedom struggle and expressing gratitude for that, Mr Wirajuda said India has had enough influence on all walks of the Indonesian life and “hence, we closely identify ourselves with India.” He said his country would like to learn from India’s experiences and “insights and lessons (from India) will be of tremendous value to us in planning and carrying out our own socio-economic development.”
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Petroleum
Ministry will approach the Cabinet soon on the revision in petrol and diesel prices that has been necessitated with the increase in excise duty and levy of additional road cess on the two auto fuels.
“We are preparing a note for the Cabinet explaining the implications of the Budget proposals and would seek their direction on future pricing policy,” Petroleum Minister Mani Shankar Aiyar told reporters on the sidelines of an oil conference here. Petrol price needs to be hiked by Rs 2.50 per litre and diesel by Rs 0.65-0.70 a litre as fallout of the increased incidence of excise duty. Over and above this, the prices would have to be raised by Rs 0.50 a litre each to factor in the increase in cess for road development to Rs 2 per litre from Rs 1.50 per litre currently.
— PTI
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Delegation from Down Under scouts India
Chennai, March 2 A Government of Victoria sponsored 11-member Australian Industry Capability Mission to India was in New Delhi last week and is now in Chennai to boost imports to India and forge business tie-ups with Indian companies. According to Mr. Darren Gribble, a former Australian High Commissioner to India and the team leader: “Our main focus is in sectors like building, financial services, infrastructure and related services. We have already met and spoken to 11 companies in India. “For the 2006 Commonwealth Games to be held in Australia, we have negotiated with the Delhi Development Authority, which will link up with private firms for their services.” He said this was the third business mission from the State of Victoria to India and was well received by the Government of India and private industry. Said Ms Lousie McGrath of Australian Industry group: “Usually after New Delhi most of the international business delegations head for Mumbai. But we chose to come to Chennai to tap the vast market in south India.” Incidentally, out of the 11 members, four are of Indian origin who had migrated long ago and hold good positions in industries in Australia. Ms McGrath, who had been part of Australian business delegations to Japan and China, felt that doing business in India was easier than with the Chinese and the Japanese. “Here people speak English, dress in western clothes and the body language is similar to ours,” she added. One of the Australian companies Chip Development, headed by Mr. Tony Lo
Riggio, which manufactures security control panels and microwave detectors, drew a lot of attention from Indian industry here Others are Jayasi Biotech Consulting headed by Dr Vijay Sharma and Salamander Venture Capital under the direction of Mr Atul Sinha.
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NTPC defends contract
New Delhi, March 2 “Capacity and capability assessment of the contractor was carried out including verification of experience details by visiting the manufacturing works in Russia and reference plant in China,” NTPC said. The public sector utility said the Board of Directors of the company had gone into the details of evaluation and cleared the proposal to award the work to Technopromexport last month. The NTPC statement comes in the wake of reports that certain projects, including Barh STPP, were granted to companies who did not fulfil the requisite criteria. “There is no irregularity in finalisation of said project to Technopromexport, Russia,” the statement said. On the reported notes of dissent expressed by M/s Doosan and M/s Bhel/Alstom, two other contending bidders for the same project, NTPC said the tender committee examined the points raised by these two firms and comments were tabled for the perusal of the board.
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Bajaj presses high-sales button
New Delhi, March 2 Bajaj Auto Ltd today said its February sales soared 24.8 per cent to 1,58,129 units from 1,26,678 vehicles a year ago and exports rose nearly 39 per cent to 19,204 units. Sales of motor cycles rose 53.7 per cent to 1,29,409 units, but sales of three-wheelers fell nearly 8 per cent to 18,556 units. Domestic bike giant Hero Honda Motors Ltd sold 2,23,546 bikes in February, up 9.3 per cent from 2,04,555 units in the same month a year earlier. Sales in April-February rose 27 per cent to 23,89,807 units from 18,77,976 in the year-ago period, Honda added. Suffering from chequered sales for the past many months, two-wheeler maker TVS Motor Co’s sales were flat in the past month at 96,020 units against 96,638 vehicles last year. India’s third-biggest motor cycle maker said total motor cycle sales fell 4 per cent to 57,009 units.
— UNI
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Hony knighthood for Gates
London, March 2 He will become a Knight Commander of the Most Excellent Order of the British Empire, an honour that dates back to 1917, although monarchs have been creating knights for hundreds of years. Among the pomp and grandeur of the formal state rooms at the palace, Gates will kneel in front of the sovereign, who will gently tap him on the shoulder with a sword. Britons and citizens of the Commonwealth are entitled to add the title ‘Sir’ in front of their names, but that honour does not extend to other nationalities.
— Reuters
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ONGC arm to drill in Qatar
New Delhi, March 2 ONGC’s foreign arm ONGC Videsh Ltd (OVL) won the rights to develop and produce oil from Nijwat oilfield in Qatar, company officials said. Details of the deal were sketchy as both ONGC chairman and managing director Subir Raha and OVL managing director R.S. Butola were in Doha to sign the contract and very few details were available. “The field is estimated to hold 300 million barrels of oil reserves,” he said. OVL had yesterday got the North Ramadam block number 6 in Egypt. The block holds some 600 million barrels of oil reserves. Indian state-run firms are seeking investment opportunity in foreign oil and gas projects as domestic reserves, which meet just 30 per cent of the total requirement, are shrinking, while demand is rising.
— PTI
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