New Delhi, August 31
The Finance Ministry has rejected Petroleum Minister Mani Shankar Aiyar’s plea for cut in excise duty on petrol and diesel to partly offset the impact of surge in international oil prices, saying that revenue mobilisation from the oil sector this year was far below the target.

It also turned down plea for raising government subsidy on domestic LPG and kerosene and issue of kerosene oil bonds of the value equivalent to the quantum of under-realisation on the mass cooking fuel, a senior government official said.

The Finance Ministry claims tax collections grew by only 9 per cent in April-June, against a 15 per cent projected growth. Customs duty collections from the oil sector was almost flat, while excise duty collection went up by only 9 per cent.

At the current rate of growth, customs and excise duty collections will be Rs 61,110 crore, which will be Rs 3,628 crore lower than the target in 2005-06.

Mr Aiyar had proposed a hike of Rs 3 per litre in the petrol and diesel prices and Rs 20 per cylinder of cooking gas and wanted specific component of excise duty on petrol and diesel be cut by Re 1 per litre to offset the impact of crude, which touched a record $ 71 a barrel, the official said.

Cutting exise duty would lead to a revenue loss of Rs 3540 crore, the official added.

“The Finance Ministry says if the petrol and diesel prices were to be increased by Rs 3 a litre, as proposed by the Petroleum Ministry, the resultant revenue gain would be Rs 690 crore whereas the net loss would still be Rs 2,850 crore,” he said.

State oil firms, which lost Rs 4,800 crore on selling LPG and kerosene and Rs 4,900 crore on petrol and diesel in April-June, are projected to lose Rs 40,000 crore in revenues this fiscal due to unchanged fuel prices despite rising cost.

The official said the Finance Ministry argued that any reduction in taxes to settle a sectoral (petroleum) imbalance would jeopardise fiscal balance, besides causing serious macro economic imbalances.

It also turned down the Petroleum Ministry’s plea for raising the government subsidy on domestic LPG and kerosene for the public distribution system (PDS).

It also rejected the issue of three-year zero interest kerosene oil bonds of the value equivalent to the quantum of under recoveries ostensibly because the maturity profile of existing government debt would leave little head for accommodating liabilities of such magnitude.

The Petroleum Ministry’s suggestion for a hike in the prices of petrol and diesel was still lower than the Rs 7.42 per litre hike in petrol and Rs 5.86 a litre increase in diesel prices warranted due to crude climbing to $ 71 a barrel.

It has also suggested excise duty reduction on petrol from 8 per cent plus Rs 13 a litre to 8 per cent plus Rs 12 a litre and that on diesel from 8 per cent plus Rs 3.25 a litre to 8 per cent plus Rs 2.25 per litre. — PTI 

New Delhi, August 31
State-run GAIL India Ltd today said it had signed a pact with Engineers India Ltd for bidding for natural gas business overseas.

“The memorandum of cooperation (MoC) between GAIL and EIL will enable both companies to bid (for gas business) overseas jointly, in which GAIL will be responsible for project management and financing and EIL will be responsible for engineering and procurement,” a GAIL statement said.

GAIL is making efforts to participate in overseas natural gas transportation and gas processing projects, which would run on Build, Own, Operate, and Transfer (BOOT), Build, Own and Operate (BOO) and Engineering, Procurement and Construction (EPC) basis through a joint venture or consortium route.

Both companies would propose suitable sub-contractor(s) for construction, the press note said.

GAIL Director (Marketing) U D Choubey and EIL Director (Commercial) P.K. Saha signed the MoC.

Speaking on the occasion, GAIL Chairman and Managing Director Proshanto Banerjee said: “This cooperation has got tremendous significance in materialising the vision of GAIL for its global presence in an era when transnational gas pipeline, liquefaction and re-gasification of natural gas has opened great opportunities abroad.

EIL has also been providing consultancy services across the world in oil and gas projects and has presence in the countries like West Asia and North Africa like Qatar, Oman, Saudi Arabia, Libya, and Algeria. — PTI

China Gas has offered state-run gas utility GAIL India Ltd participation in a petrochemical project in Mongolia, GAIL said here today.

“GAIL (has) received an offer from China Gas Holdings Ltd for participation in a gas based petrochemical project, which is to be established in Humor, Inner Mongolia,” GAIL said in a press note.

The feasibility study of the project has been prepared, it said, but did not give details of cost or the equity offered by China Gas.

The Indian firm, as a part of its globalisation strategy, is pursuing various international business opportunities in the natural gas sector.

GAIL entered into the fast growing Chinese gas market by taking 10 per cent equity in China Gas Holdings Ltd, a company which holds concession rights for setting and operating CNG and city gas distribution projects in 48 provinces of China.

Kolkata, August 31
Alfred Brush Ford, scion of US automobile pioneer Henry Ford, has decided to invest in three projects at Mayapur in West Bengal that hold potential for creating 15,000 jobs and arrival of three million tourists.

“More than 15,000 new jobs are expected to be generated either directly or indirectly. We also expect three million tourists to visit annually,” ABF director John Robert Sims said at a presentation on the projects.

The projects, to be executed by Alfred Ford’s company ABF International, envisage setting up of a village industries park, a tourist hospitality complex and a Vedic planetarium at Mayapur, home to the global headquarters of the International Society for Krishna Consciousness (Iskcon).

The company will pump in Rs 283 crore initially through foreign direct investments route, ABF senior vice-president Alister Taylor said. On indirect investment the company “expects to bring in double the amount” she said.

ABF has formed three separate bodies for the stand-alone projects.

The total land requirement for the projects would be about 60 acre. “We are acquiring the land as and when we are getting them. The project will be operational by 2009”, Mr Taylor said. — PTI

Ludhiana, August 31
The Board of Directors of Ludhiana Stock Exchange has approved revised corporatisation and demutualisation scheme, aimed at segregation of ownership and management from the trading rights of members.

The scheme will now be sent to Securities and Exchange Board of India (SEBI) for its final approval.

SEBI had advised LSE to change its corporatisation and demutualisation scheme in accordance with the Bombay Stock Exchange’s demutualisation scheme.

“The board members of LSE have given their approval to the revised corporatisation and demutualisation scheme and it would now be submitted to SEBI,” Ludhiana Stock Exchange Association Limited Executive Director H.S. Sidhu told PTI.

After the implementation of the new scheme following the SEBI’s approval, the LSE would become a profit making company and be liable for payment of tax as per Income Tax provisions.

However, some of the board members of LSE had expressed reservations over imposition of tax on last year’s income of the regional stock exchange, sources said.

SEBI had asked LSE not to use its assets and reserves as on the date of publication of this scheme for any purpose other than the business operations of stock exchange.

Meanwhile, SEBI yesterday notified the corporatisation and Demutualisation schemes of 10 stock exchanges.

The stock exchanges earmarked for corporatisation and demutualisation are Calcutta Stock Exchange (CSE), Delhi Stock Exchange (DSE), Madras Stock Exchange (MSE), Pune Stock Exchange (PSE), Cochin Stock Exchange Limited (CoSE), Madhya Pradesh Stock Exchange (MPSE), Gauhati Stock Exchange (GSE), Uttar Pradesh Stock Exchange (UPSE), Hyderabad Stock Exchange (HySE) and Bangalore Stock Exchange Limited (BgSE). — Agencies

Solan, August 31
Peeved at the sharp rise in power tariff ,investors in Himachal are contemplating to withhold payments of the July electricity bills if the Electricity Regulatory Commission fails to roll back the decision. They have unanimously resolved to take a legal recourse if the September 3 hearing with the commission fails to provide them relief.

A meeting of these investors from Baddi, Barotiwala, Nalagarh, Parwanoo, Damtal, Kala Amb, Poanta Sahib and Mehatpur at Baddi last evening arrived at this decision, saying that there was no reason for this exorbitant hike as it was never demanded by the electricity board.

The meeting held under the aegis of the Baddi Barotiwala Nalagarh Industries Association (BBNIA) was attended by more than 200 investors. The president of the association, Mr Rajinder Guleria, said they would present their case before the commission on September 3. The sharp hike in the power tariff had not only made business uneconomical but also hit small and medium industries. The association would also take up the issue of making the commission a multi- member committee from a one- member panel.+

The tariff had increased by about 15-25 per cent for various categories with the maximum rate for one unit going up by as much as Rs 12 ,pointed an investor from Poanta Sahib. The general secretary of the Parwanoo Industries Association, Mr Rakesh Bansal, said that more stringent conditions in the form of mandatory installation of transformers for every 50 kw power load were also being imposed on the investors.

The investors resolved to demand a ceiling of Rs 4 per unit, including service charges and excise and taxation charges ,and oppose the fixed charges even if a unit remains non-functional and reduction in the demand charges. The new tariff had effected a hike of Rs 6-12 per unit on 20- 100 kw power consumption, Rs 4-6 if the power consumption was between 100-500 kw and Rs 4-5 if the consumption was between 500-1,000 kw. A sharp rise of 30 per cent was faced by units using 100- 1,000 kw power. 

New Delhi, August 31
A large section of trade and industry has failed to pass on the benefits of input credit to the consumer after the implementation of VAT since April 1 this year despite the fact that new tax system has led to a rise in the revenue of the state governments.

“Unfortunately, the collusion between retailers and customers is still existing against the issuance of cash memos to evade tax and avoid VAT,” said Mr Ramesh Chandra, Member Secretary, Empowered Committee of State Finance Ministers on VAT, here today.

Addressing a workshop on VAT-Issues and Concerns organised by FICCI, Mr Chandra exhorted trade, industry and consumers to come clean on operational issues at the retail level to ensure that the VAT regime gained countrywide acceptability and stabilised for the benefit of all stakeholders.

“We are aware that there are deviations in VAT rates, but in a federal democratic structure, looking for total convergence is totally futile,” said Mr Chandra, adding that “ the Empowered Committee has no problem with a state fixing a rate higher than that recommended by the committee.”

He said while the committee hoped to see that Central Sales Tax (CST) was phased out by April 1 next year, it could hit a roadblock because of divergent views, pulls and pressure of the states. While some states feel CST should continue, others were in favour of phase-out only if the Centre compensated them in perpetuity, he added.

Mr Pradeep Dinodia, Chairman, FICCI Taxation Committee, underlined the need for ultimately moving towards a national VAT with an overall tax incidence of 20 per cent —- 12 per cent CENVAT and 8 per cent VAT-which in the long run can provide Indian industry the requisite competitive edge. 

Mumbai, August 31
Identifying the automobile sector as a growth area, Tata Group is confident of launching in less than three years, a proper “inexpensive” people’s car with a price tag of Rs 1 lakh that the group chief Ratan Tata says would be a “gearless” vehicle powered by a rear engine.

Undeterred by scepticism from industry rivals, including Suzuki Motor Corporation that such a car may not be feasible for Rs 1 lakh, Tata exuded confidence that the launch would be the only answer from him.

“I hope so. Just like people ate their words on Indica they would realise that there is something (Rs 1 lakh car) that can be done,” Tata told PTI on whether the launch would be the answer to the sceptics.

Along with Indica, the new Rs 1 lakh car, whose prototypes are presently doing test run without a body, would be the growth focus for Tata Motors in the medium term in the automobile sector, in which the group could invest up to Rs 30,000 crore within the next few years.

Without giving any investment or financial details of the group’s automobile programme, Mr Tata said the products from Daewoo’s commercial vehicle facility in South Korea, acquired by the group last year for Rs 465 crore, would be introduced in the Indian market during the current year itself.

Mr Tata said the proposed Rs 1 lakh car would be a vehicle that “will seat four to five people and have a rear engine. It will not be a scooter, three-wheeler or an auto-rickshaw made into a car.”

Mr Tata said the new vehicle would be a “compact car” and would be a reality in less than three years.

On the technology used for the new vehicle, he said: “We have gone to Delphi for the engine management system as in India there is no electronic engine management system available.” — PTI

New Delhi, August 31
The Board meeting of PTC India Limited scheduled to be held tomorrow to consider the reappointment of its CMD, Mr T.N. Thakur, has been postponed.

Significantly, the company, in its information filed with the Bombay Stock Exchange (BSE), has not cited any particular reason for the postponement of the board meeting raising questions whether the annual general meeting (AGM) scheduled for September 27 can take up the matter of reappointment of Mr Thakur as the company’s Chairman.

Interestingly, the last board meeting of the company had taken place on August 24 and it was decided that “on the requests of the promoter companies, the decision on items relating to reappointment of Mr S.K. Dube as Director (Operations) and Mr Thakur as CMD” was adjourned to a meeting to be held on September 1, 2005.