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States to get relief for VAT deficit
P&SB to set up LHO in Chandigarh
GoM clears Dabhol settlement
RIL incurs capital expenditure of 5,093
cr
Spice to spend Rs 140 crore on expansion
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Nominee cannot extend PPF account
Aviation Notes
IGIA easy target for terrorists
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States to get relief for VAT deficit
New Delhi, July 9 “We discussed in details the method of compensation in case any state loses revenue in contrast to the trend rate of growth. The Finance Ministry has come out with a simpler method,” Empowered
Committee on VAT Chairman Asim Dasgupta said after a meeting of state finance ministers here. According to the new formula, he said the Finance Ministry would release ad hoc funds on a monthly basis to states that would claim that there had been revenue loss on account of VAT implementation. Compensations given by the Centre would be reconciled after getting the quarterly reports from state Auditors General. Earlier, the Centre had insisted that the compensation would be based on the reports of AGs. But the Centre relaxed the rules as tax figures were not available with AG till the end of each quarter. The states would have to inform the Finance Ministry about VAT collection every month in order to get the compensation, Mr Dasgupta said. Elaborating on the compensation formula, Mr Dasgupta said states would get compensation if their actual collection from VAT was lower than the projected revenue. The projected revenue was calculated by taking the weighted average of tax collection in the best three years of the last five years. The Centre had agreed to fully compensate the states that would suffer revenue losses in the first year of VAT implementation. The Centre would compensate 75 per cent of the revenue loss in the second year and 50 per cent in the third year. Meanwhile, Maharashtra would ask for around Rs 400 crore of compensation for the first three months of this fiscal. In fact, the state has already sent its claim for compensation to the tune of Rs 90 crore for April, Maharashtra Sales Tax Commissioner B C Khatua said. For May, Rs 208 crore of revenue loss had reached the state finance ministry, which would be forwarded to the Centre, he said, adding it was expecting around Rs 100 crore of revenue loss in June. The revenue loss in these three months was against the projected revenue growth of 20 per cent for this fiscal. Otherwise, the revenue would grow by 3 to 5 per cent in the first quarter compared to the corresponding figure for the last fiscal, Khatua said. He attributed the revenue loss to the reduction in VAT rates compared to sales tax regime. Sales taxes on an average stood at 18 per cent on the industry side, 5.5 per cent higher than the maximum VAT rate is 12.5 per cent. However, on dealer side, VAT rates were less by 3 percentage points compared to sales tax as there is advantage of multiple point tax under VAT, he said. Maharashtra collected Rs 19,200 crore of sales tax last fiscal, which represented 20 per cent of total sales tax collected in the entire country.
— PTI
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P&SB to set up LHO in Chandigarh
Chandigarh, July 9 Besides setting up Local Head Office (LHO) in Chandigarh on the lines of the State Bank of India, the new-look management of the bank has taken a number of other important decisions, including extension of business hours in all its 328 branches in Punjab, Haryana, Himachal Pradesh, Jammu & Kashmir and Chandigarh. From Monday to Friday, all these branches will function till 4 pm, while on Saturdays, banking operations have been extended till 1 pm. The bank, which owes its origin to legendary late Dr Inderjit Singh, has presumably learnt its lessons the hard way as the non-productive assets (NPA) ratio in cosmopolitan branches of Mumbai, Chennai and Kolkata, has been growing at an abnormal pace. Mr Manjit Singh Sarang, who was till now General Manager (Credit) at head office in New Delhi, has been named to head the newly set up LHO here. “Our focus will be on agriculture and credit,” he says revealing that setting up of LHO will expedite decision making at the field-level itself besides bolstering the overall growth of the bank. The bank has also decided to set up a camp office for the Chairman-cum-Managing Director of the bank here so that all decisions beyond the level of General Manager, including the recovery or settlement of NPAs, shall be taken here only. Since the outgoing CMD, Mr N. S. Gujral, has gone to court challenging his removal, the new head of the bank, Mr R. P. Singh, an IAS officer of the 1976 batch belonging to Andhra Pradesh cadre, has been designated Officer on Special Duty (OSD) with all powers vested in him. Mr Sarang said Mr R. P. Singh would be visiting his camp office here at least once a fortnight. “We are happy to be making northern region in general and Punjab in particular our main operational zone now onwards. Agricultural advances, advances to the retail sector and recoveries of NPAs will be the other thrust areas to improve the fiscal health of the bank,” Mr Sarang added.
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New Delhi, July 9 The representatives of Indian financial institutions today told the Empowered Group of Ministers (EGoM) that they were negotiating with Bechtel and hope to reach a settlement in a couple of days, Power Secretary R V Shahi said after the meeting of the EGoM today. The settlement with Bechtel, who, along with GE, owns 85 per cent in the Dabhol Power Company, would pave the way for restarting the gas-based plant in Ratnagiri, Maharashtra. IDBI-led Indian FIs have already reached an agreement with GE for $ 145 million to be paid in phases, Shahi said, but declined to reveal the amount to be paid to Bechtel. Sources said the EGoM, headed by Defence Minister Pranab Mukherjee, also cleared a Cabinet note containing the entire settlement package on Dabhol, including payments to GE, Bechtel and overseas lenders. The note would now be placed before the Cabinet for approval. Besides GE and Bechtel, Indian lenders have also reached an agreement with over two dozen overseas lenders to the project as well as with the US government-promoted Overseas Private Investment Corporation (OPIC). The agreement with Bechtel assumes importance as it comes close to the July 18 date at the London Arbitration panel where GE and Bechtel had filed claims of over $ 6 billion against Indian government for breach of investment protection pacts. — PTI
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RIL incurs capital expenditure of 5,093 cr
Mumbai, July 9 However, the fixed assets of the company were reduced by Rs 2,240 crore which included certain assets acquired by the RIL for marketing of Infocomm services and as part of retail infrastructure. RIL said it has discontinued the marketing of infocomm services with effect from October 1, 2004. The RIL’s income from services decreased by Rs 1,185 crore to Rs 347 crore in 2004-05 over the Rs 1,532 crore in the previous fiscal primarily due to discontinuance of the marketing of infocomm services. The net operating margin remained stable during the fiscal at 19.5 per cent despite volatile raw material prices, offset by higher selling price and increased productivity. — PTI
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Spice to spend Rs 140 crore on expansion
Chandigarh, July 9 This investment will result in an addition of 200 new towers in Punjab - thereby providing quality services to its subscribers in terms of infrastructure and services. Through the expansion and technology upgrade the Spice network will be ready to support more than 1.5 million subscribers. Earlier this month Spice had launched its GPRS service in Chandigarh, Patiala, Ludhiana, Jalandhar and Amritsar.
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IGIA easy target for terrorists The Indira Gandhi International Airport (IGIA) is one of the prime targets of any terrorist group. It is because of the IGIA’s vulnerability. The IGIA, built in a hurry in early 1980s, has several weak zones physical and man-made. The physical shortcomings, like, relative easy access to cargo complex, can be addressed to but man-made evils, like, issuance of too many passes cannot be effectively checked because of political patronage. The security of the airport is now in the efficient hands of the Central Industrial Security Force (CISF). But the CISF is besieged with uncalled for problems, like, congestion at departure concourse of the terminal building and ‘hoodlums’ moving about freely at sensitive areas by flashing passes. It is about time the authorities reduced the quantum of passes to the barest minimum. Most of the ills that plague the IGIA and the Mumbai airport would be considerably reduced if the authorities appoint a trouble shooter, empowered to coordinate the activities of many so-called autonomous agencies which have become law unto themselves. Air-India
Discipline is a key to stablisation and success in any organisation, particularly a commercial outfit. But, sadly, discipline has become a major casualty in Air-India. Senior officials, particularly those stationed abroad, do not comply with orders from seniors. The tenure of the Regional Director in UK, Capt A.K. Sharma, for example, has ended about a year ago. But he refuses to return disobeying the orders of his seniors. He is said to have gained so much political backing that he does not allow even work-permit of any other official in London to be issued. Captain Sharma was an ADC to President of India when he applied for a job in Air India on March 12, 1984, to the then CMD Raghuraj. He was interviewed by the then Commercial Director H.M. Kaul on October 2, 1984, as Station Manager with the astonishing rider that he would not be transferred out of Delhi for the minimum period of 10 years. Several protests, including objection by the Air India Officers’ Association, were made against the appointment of Captain Sharma but he went from strength to strength until he was transferred to East Japan and Korea on July 15, 1994, after completing his 10-year stay in Delhi. Air India is now in an expansion mode initiating many flights on new routes. The IAS cadre Chairman and managing director V. Thulasidas seems to have settled down. The airline’s performance will considerably improve if he sees to it that his orders are respected and senior officials do not seek redresses in law courts. There is another area in Air India that has a demoralising effect on its staff. Since January 1997, there has been no wage revision. This is perhaps the longest wage revision outstanding in any public sector undertaking in India. Earlier, Air India was one which used to implement wage revision every three to four years. What is cause for concern is that there is a downright discrimination as some categories of employees, supported by powerful unions, have been provided wage revision. There is also discrimination in awarding productivity-linked bonus to employees. The aviation analysts are of the belief that there is a favourable weather in Nariman Point (Mumbai) at present and Air India can come out of turbulence if authorities adhere to age-old rules of transfers promotions and appointments. Many staffers, who have toiled hard for decades at Delhi and Mumbai, reiterate that ‘all that glitters is not gold’. They are of the view that the Air India Express will not be a successful venture and the losses sustained by it will be borne by them.
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