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CERC rejects Reliance Energy’s plea
Job security must, says PHDCCI chief
Nahar plans two power projects
Aviation
Notes
A-I hires PR firm for media interaction
Birlas, Tatas to buy out Cingular stake in Idea
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Dividend from mutual funds is tax-free
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CERC rejects Reliance Energy’s plea
New Delhi, July 30 Reliance Energy Transmission Ltd, a group company, had approached the power regulator last year seeking a licence to undertake construction of 20 transmission lines and 13 sub-stations in the western region, a move firmly opposed by state-run PowerGrid Corporation. PGCIL, which is also the Central Transmission Utility, had publicly voiced its opposition on the ground that it had already started work on the lines, which are part of the Western Region strengthening scheme envisaging an investment of over Rs 4,700 crore. In its order, the CERC, while rejecting application of RETL, divided the western region scheme into four parts. PGCIL was awarded two parts (A and D), which involved construction of 765 kv and 400 kv lines by 2008-09, while the other two parts (B and C) are to be fully executed by private players on the basis of competitive bidding. PowerGrid Corp planned to execute the project through the joint venture route with the private partner holding between 51 to 74 per cent equity. The project involved construction of 800-circuit km of 765 kv lines, 6,300 km of 400 kv lines, augmentation of 17 existing sub-stations and setting up four new sub-stations. Reliance Energy, on the other hand, had proposed to implement the scheme alone. As this was the first such case involving opening up the power transmission sector for private participation, the regulator had sought suggestions and comments from other stakeholders including the Power Ministry, the Central Electricity Authority, the beneficiary states and PGCIL. While PGCIL opposed granting a licence to RETL, the CEA suggested that as the scheme entailed construction of 765 kv and 400 kv lines, it would not be desirable to entrust implementation of the entire scheme to a new entrant (RETL).— PTI
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Job security must, says PHDCCI chief
New Delhi, July 30 In an interview to The Tribune, Mr K.N. Memani, President, PHDCCI, condemned the unwanted violence and said Indian economy was still not mature enough for the hire and fire policy of the West without adequate social security system. He added that this “isolated incident” would not affect the confidence of investors in the Indian economy, especially in Haryana since the state provides best infrastructure facilities, congenial industrial environment and proximity to national Capital. Mr Memani, who has been Chairman and Country Managing Partner, Ernst & Young, has helped several multinational companies in setting up their businesses in India. Asked about his views on the incident, he said the Gurgaon episode was unfortunate. “While the workers have the right to express their demand through demonstration, this should be strictly conducted in a peaceful manner so that the need for such police intervention does not arise at all. At the same time, the government is duty-bound to protect the interests of general public at all times,” he said.
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Nahar plans two power projects
Ludhiana, July 30 The decision to the effect was taken at the company’s board of directors meeting held here today. The board, which approved unaudited financial results of the company for Q1 ended June 30, 2005, also decided to further expand manufacturing capacities of its textile units.
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by K.R. Wadhwaney A-I hires PR firm for media interaction Decentralisation and mutual trust between the Chairman and Managing Director (CMD) and staff are vital keys for commercial organisation to march ahead. Worldwide, renowned outfits have adhered to these twin pre-requisites and achieved rewarding fruits of success. Any deviation or failure reveals nothing but sure sign of uncertainty and insecurity. The outgoing Indian Airlines CMD Sunil Arora’s success in his serene five-year innings came about from his trusting his staff who, in return, respected him for his decisions. This important understanding led to airline’s turnaround from a loss-making unit into a net profit-earning carrier. The new CMD Sushma Chawla, the first woman to head the airline, has weathered the initial storm of the influential IAS lobby, which had subtly tried for the change at top. But the PMO (Prime Minister’s Office) suggested for scrapping the entire process and entrusted the responsibility to the PESB (Public Enterprises Selection Board). Ms Sushma Chawla now has cusion for at least a few months to reorganise her strategy. The IAS faction may be powerful but women bureaucrats are known to possess enormous resilience. The weather in the airline house and at the airport is currently favourable. The cargo unit is also showing marked improvement in upliftment of consignments. After a long interval, IA’s happier days are possible, if the staff is kept motivated. Only time will tell whether Perfect Relations will be able to be a perfect foil to Air-India, an airline which is more known for its complexities and court cases than achievements. The airline had its own ‘maharaja’ in its chequered 59-year career. The best ‘PR’ man was S.K. Kooka who, along with JRD Tata, saw to it that airline enjoyed reputation from international travellers. Now, the airline is passing through a difficult phase. Public complaints are on the rise. The government is also not ‘playing the ball’ in regard to acquisition of the fleet. This is most unfortunate. On the outsourcing of communication responsibilities to a private unit, there is a mixed reaction in the corridors of aviation sector. A majority of analysts, who have known A-I’s functioning for decades, believe it is not a happy decision. They believe that the A-I officialdom should have continued to have ‘direct dialogue’ with electronic and written-media instead of depending upon a private agency, no matter how efficient. This change reveals lack of confidence in its own personnel. The A-I officialdom says that outsourcing has become imperative because ‘media’ is now ‘army’ and it is no longer possible to monitor all regions from Kerala to Delhi effectively. The argument may not be without logic but straight dealings with the media are more rewarding than through a ‘middleman’.
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Birlas, Tatas to buy out Cingular stake in Idea
New Delhi, July 30 Sanjiv Aga, a director of Birlas on the Idea Cellular board told PTI from Mumbai on phone that the 32.91 per cent stake in Idea Cellular could be equally shared between Birla group and Tatas. Mr Aga said the decision to buy out the stake from Cingular (along with the Tatas) is an indication of their strong interest in telecom sector. When contacted Kishor Chaukar, MD Tata Industries, said they would buy half of the 32.91 per cent stake of Cingular in Idea for a consideration of $ 150 million. Post-restructuring, AV Birla group company would increase its stake from present 34 per cent to over 50 per cent while Tata Industries stake would stand increased to just less than 49 per cent. Strides Arcolab
Strides Arcolab Ltd today said it would acquire a sterile manufacturing plant in Poland and a semi-solid medicine facility in Italy. The Poland factory will be bought for $ 8 million, Strides Arcolab said. “The Polish facility will give the company easier access to Europe at a low cost,” Strides Arcolab Chief Executive Arun Kumar said in a statement. The facility has room to expand at a low cost, he added. Strides Arcolab also plans to buy up to 70 per cent of Milan-based Beltapharm, which specialises in making liquids and semi-solids, for up to Euro 1.6 million.
Hind Lever net up
Helped by lower interest costs, Hindustan Lever Ltd has posted a 16.83 per cent rise in its net profit at Rs 281.65 crore for the second quarter ended June 30, 2005 from Rs 244.49 crore in the same quarter last fiscal. The board has declared an interim dividend of 250 per cent per share of Re 1 each, HLL spokesperson said here today. The total sales for the reporting quarter rose to Rs 2,915.68 crore from the Rs 2,641.9 crore in same period last fiscal, HLL said to the BSE. The net profit rose due to lower interest costs post redemption of bonus debentures, and higher financial income accrued due to encashment of some mutual fund investments, HLL Finance Director D. Sundaram said. — Agencies
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by A.N. Shanbhag Dividend from mutual funds is tax-free Q: I have the following query related to Mutual Funds investment. 1) How is dividend income treated in IT computation in equity scheme? 2) How is the dividend on debt fund treated in computation of IT? What about LTCG and STCG in debt scheme of Mutual Fund? What about dividend distribution tax on debt scheme? — Vikas A: Equity-based MF schemes are governed differently from the debt-based schemes. In both cases, dividend is tax-free in the hands of the investor. However, there is a dividend distribution tax @14.025 pc payable by the MF directly to the exchequer in the case of debt-based whereas the equity-based are exempt from this tax. Equity-based schemes are also exempt from long-term capital gains tax. The short-term capital gains are taxed @10 pc only. In the case of debt-based schemes, short-term gains are treated as normal income of the assessee and taxed at the rates applicable to the assessee. The long-term gains will attract tax @10 pc without indexation or @20 pc with indexation, whichever is more beneficial to the assessee. UIN registration
Q: I desire to know the following details: a) Where can I get the application form for UIN? b) If the investment in an equity-based scheme is switched to another scheme, will it be treated as a fresh investment in the new scheme? — Subhash Sharma A: 1. You must be aware that it is no more mandatory for registering yourself under UIN. 2. Yes, it will be treated as a fresh investment in the new scheme. The switch will attract the provisions of capital gains also.
NSS withdrawal
Q: 1. If my taxable income drops to near zero, can I start withdrawing from the NSS 1987 in amounts of Rs 1.85 lakh per year, which is the tax free limit for senior citizens? I have a total of Rs 7 lakh accumulated in NSS 87. Can it be collected by my nominee or legatee after my death? I am depositing Rs 70,000 in PPF every year. — C. Subbarao A: Yes, it would be an excellent policy to unlock the funds in NSS-87. As a matter of fact, if you are contributing Rs 70,000 to PPF, mainly to earn the 8 pc tax-free interest rather than earn the deduction u/s 80C, you can withdraw as much as Rs 2,55,000 (1,85000 + 70,000) without coming in the tax net. You can withdraw Rs 30,000 more by deposing this amount in other avenues u/s 80C. For instance, NSC pays 8 pc (tax-free in your case), whereas you are earning only 7.5 pc in NSS. Even if EET becomes a law, your NSS will have got liquidated before 3 years and therefore, your withdrawals from fresh contributions to PPF and NSC will be outside the tax net.
Taxing allowance
Q: Please clarify if an employee receives Rs 2,000 per month as conveyance allowance in his salary, what will be employer’s liabilities & what are the employee’s liabilities. — Vinayak A. Pawaskar A: Conveyance allowance is exempt up to Rs 800 p.m u/s 10(14). Therefore, employee’s liability on the same would be to the tune of Rs 1,200 p.m. The employer’s liability will come in the picture only if the conveyance allowance is taken under the ambit of Fringe Benefit Tax (FBT). It is our considered opinion that the FBT law does not envisage taxing such allowances. Hence, employers would not have any tax liability on the same.
PPF account
Q: We have following query regarding PPF a/c in the name of HUF:- A PPF a/c was opened in the name of HUF. The account has completed 15 years in March 2005 and karta of HUF expired without giving 5 years extension request letter. I being only male member of HUF has become new karta of this HUF. When I approached the bank for inclusion of my name as karta of HUF and to extend a/c for further period of 5 years, I was advised that PPF a/c in the name of HUF has to be compulsory closed down on maturity and it cannot be given further extension beyond stipulated 15 years as per new rules. Kindly advise whether stand taken by bank is legal and if not, please advise rules/circular no. permitting extension of PPF a/c of HUF beyond 15 years period. We are interested to extend maturity period for further 5 years to enjoy benefit of tax-free interest. — Sanjay Dhar A: Yes, the bank may be (note — may be) right. RBI/2004-05/468 Ref.No.CO.DT.15.02.001/H-9593-9615/2004-05 dt. 14.05.05 has debarred HUFs from opening new accounts or extending old accounts. This notification is effective on and from 13.05.05. Irrespective of the date when you have become the new karta, if the maturity date of the account is before 13.05.05, you have a right to opt for extension. Not otherwise. Incidentally, the PPF accounts mature on the basis of the FY and not the date of opening the account. From the facts submitted, it appears that your HUF account has matured on 1.4.05. If that is the case, your bank is making an error. If the bank manager does not see light, you should approach its head office and even if that fails, please revert. We shall do our level best to sort out your problem. The author may be contacted at
wonderlandconsultants@yahoo.com
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