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India
Economic Summit
Govt for greater liberalisation in retail, banking
Funding: FICCI moots 9-point plan
OPEC to cut output again
France offers technology to make biodiesel from jatropha
Cairn India to invest Rs 7,500 cr
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SABMiller to invest $125 m
Tax Advice
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FM: Speculative oil prices robbing GDP growth
R. Suryamurthy and S. Satyanarayanan Tribune News Service
New Delhi, November 26 “Every $10 rise in crude price robs India’s GDP growth by at least 1 per cent and the global crude pricing at present is purely speculation driven” said the Union Finance Minister, Mr P Chidambaram, at the India Economic Summit here. He said India along with other major energy consumers were willing to sit across the table with the oil producing countries and determine the price band, which would be beneficial to both. He suggested a price band of $40 to $50 per barrel of crude. Accusing the oil producing countries of exploiting developing countries like India and China through “speculative pricing”, Mr Chidambaram asked : “How can you justify spurt in oil prices from mere $58 per barrel to $78 per barrel with no change in supply-demand ratio.” To drive his point further, the Finance Minister said “Russia’s budget was based on a price band of $44 per barrel, but it got $70 per barrel, resulting in a windfall for it.” He said the government has been issuing oil bonds to enable the oil companies to be viable, but this way “we are burdening the next generation, which is a grave injustice to them.” India imports almost three quarters of its energy to meet the demands of its population of more than a billion people. This proportion is set to rise as energy demand is expected to double in the next five years. By 2020, the country may have to import all of its energy needs. India's 3 per cent share of global oil demand is set to rise to 10 per cent by 2030, and the government may find it expensive to meet its needs. Asserting that India is committed to contribute towards protecting global environment by reducing emission of harmful gases leading to ozone depletion, Mr Chidambaram said “for that the developed world should first ensure access to technologies and resources like clean coal and uranium.” He said it was unfair to ask developing countries like India to consume less energy and pointed out that the per capita energy consumption by these countries are much less than the developed world. Stressing that water scarcity is going to be the biggest challenge for the country, the Finance Minister called for focused attention on water harvesting, de-salination and more importantly on conservation.
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Govt for greater liberalisation in retail, banking
New Delhi, November 26 "The services contributed 54 per cent to the economy and in next five years it will grow to 60 per cent. The services sector is growing at 7 per cent domestically and it can grow at a higher rate with further liberalisation of regulatory framework," Department of Industrial Policy and Promotion Secretary Ajay Dua said. Addressing the inaugural session of India Economic Summit, organised by CII and World Economic Forum, he said in sectors like retail, banking, accounting and healthcare, much more liberalisation, openness and liberalisation of regulatory framework was needed. While growth was propelled by services and manufacturing, labour intensive sectors were not expanding that fast, Mr Dua said, pointing to the footwear industry. He said agriculture, which supports 65 per cent of the population, has grown at just 3 per cent in the last decade. Mr Dua said the challenge was to see that growth trickles down to agriculture. High growth would increase revenues of the government, which would in turn fund social sector expenditure in schemes like universal education and employment guarantee programmes. Later, at the opening press conference of the summit, CII President R Seshasayee said the summit was entering its 22nd year and would be embarking on the third phase. In the third phase, focus would be on sustaining the growth rates of the economy and to ensure that it benefits all, he said. He said India was on everyone's radar and foreign participants outnumber Indians by 3:1. Meanwhile, realty major Emmar Properties said today it was planning to invest several hundred crores in the country to become a major investor in infrastructure sector in India by 2010. “Infrastructure is a key sector that needs more focus in India and, therefore, there is an immense opportunity for investment. Emaar Properties would like to become the largest investor by 2010,” Mr Mohamed A Alabbar, Chairman of Emaar Properties, told The Tribune on the sidelines of the summit. “There would be shortage of 80 million units by 2015, so there is an immense opportunity,” Mr Alabbar said. Asked whether the spurt in realty prices of commercial properties could have negative impact on the business inflow, he said the price of realty would follow the cyclical pattern and based on affordability. Mr Alabbar also added that with recession in Western countries, investors from West Asia are now looking towards East, especially India. Earlier, addressing the press conference, WEF founder and Executive Chairman Klaus Schwab said the meet would focus on how India could sustain its growth and also on awareness to social issues and risk mitigation policies. India has been among the world's fastest-growing economies for the past decade. Still, more than 300 million people live in abject poverty. Nearly 500 executives from 32 countries are attending the summit.
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Funding: FICCI moots 9-point plan
New Delhi, November 26 The agenda, among other steps, suggests that with a view to encouraging subsidiaries of Indian companies overseas to repatriate their earnings to India, the receipt of dividend and capital gains should be tax exempt or at least taxed on a concessional basis in India. Many Indian companies are now investing in shares of foreign companies or entering into joint ventures and at times such companies either merge or demerge a division into a separate company. Though such transactions are generally not taxable in the respective foreign country, in the absence of a specific provision, exchange of shares arising from such merger or demerger from one Indian parent may be regarded as transfer liable to tax under the Indian tax laws. FICCI feels that it is important to clarify that transaction in respect of such Indian assets will not be regarded as transfer for the purposes of capital gains under section 47 of the Income Tax Act. It has also stressed the need for expanding the scope of authority of advance ruling to cover transactions undertaken or proposed to be undertaken by resident assessees to have advance knowledge of likely tax implication of transaction in cases of ambiguity and uncertainty, thereby minimising wasteful and protracted litigations. FICCI feels that dividend distribution tax (DDT) needs to be brought within the ambit of DTAA to enable the overseas holding companies, having their subsidiaries in India, to offset the distribution taxes paid in India from tax payable by them in their respective countries. It is equally important to reduce the rate of dividend distribution tax to a reasonable level of, say, 7.5%. In a growing economy , FICCI wants incentives for the promotion and encouragement of savings, investments, employment generation, infrastructure and technological advancements to continue.
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Dubai, November 26 "OPEC will address the growing concerns of oil exporters at its meeting on December 14, and will decide a future course of action," Mr Ali Al-Naimi, Saudi Arabian Minister of Petroleum and Mineral Resources, was quoted as saying by the Arab News. However, Mr Naimi said oil prices were not a decisive factor every time, the newspaper reported today. On the measures being taken by OPEC to stabilise the oil market and address the sharp fall in prices, Mr Naimi said: "We will first assess the impact of the measures that were decided at the Doha meeting last month and if they serve the purpose of bringing stability in the global market, then we will not act. But, if these measures fail, then further cuts cannot be ruled out." — PTI
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France offers technology to make biodiesel from jatropha
New Delhi, November 26 ''I see potential for partnerships in biofuels, a field in which France has initiated an ambitious development plan,'' Mr Nicolas Forissier, inter-ministerial delegate for food processing and agribusiness industries, told UNI. He said the French Ministry of Agriculture was of the view that biodiesel production from certain oilseeds — jatropha and pangamia — in India could benefit from French
technology. ''Biomass power generation is another area where we can bring in our know-how and expertise, in particular with Areva which already has one specialised subsidiary in India,'' he said. Pointing out that the future of agriculture depended on the added value generated by activity downstream of production, he said India could gain a lot from France, where 70 per cent of the agricultural output was processed and value enhanced by the agrifood industry.
— UNI |
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Cairn India to invest Rs 7,500 cr
ore
Visakhapatnam, November 26 ''We will invest a sum of Rs 6,800 crore by 2009 on acquisition of assets and development of infrastructure to increase our production capacity in Rajasthan. The company would allocate Rs 400 crore in the next nine months for its upcoming Ravva plant in Andhra Pradesh for drilling of new oil wells,'' Cairn India Group Communication Director David Nisbet said here. In order to sustain 50,000 barrels a day, Rs 270 crore will be invested in the drilling of four oil wells in Cambay Basin near Ravva region by the end of 2007, he said. It has already invested over Rs 300 crore into the plant, spread over 221 acres of land.
— UNI |
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SABMiller to invest $125 m
New Delhi, November 26 "We will invest $125 million in our existing operations in India in the next two to three years. With the buyout of Fosters in India, the total investment will touch $250 million,” SABMiller Chief Executive Graham Mackay said on the sidelines of India Economic Summit. He said the investment of $125 million would be for marketing efforts and expanding breweries. The company has nine breweries in India. "Beer has huge potential to contribute to India's development," he said, adding that unification of markets would become a big boost.
— PTI |
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Interest on NRE deposits exempt from tax
by S.C. Vasudeva Q. After staying for 21 years in Saudi Arabia, I have finally returned to India on 22nd May, 2005. As per FERA Act, I am an NRI up to 22nd July, 2005, and as per I. Tax Act, I am Resident but not Ordinary Resident Indian (RNOR) for the financial year 2005-06. I am having NRNR and NRE deposits by foreign remittance with banks in India, which will be maturing in 2006-2007. What are the income tax liabilities on the interest earned on these deposits during the financial year 2005-06 and subsequent years? Is the interest earned exempt from income tax till maturity of these deposits under chapter XII-A. Special provisions relating to certain income of NRIs and for RNORs. — Vijay Prabhaker A. Since you are a resident, but not ordinary resident for the assessment year 2006-07 (financial year 2005-06), you will have to file a return of your income if the same exceeds the maximum amount chargeable to tax. The interest earned by an individual on monies standing to his credit in a Non-resident (External Account) in any bank in India is exempt from tax under Section 10 of the Act, provided such a person is resident outside India as defined in clause (q) of Section 2 of Foreign Exchange Regulations Act 1973. As explained by you in your query you have become a resident w.e.f. 23rd July 2005 in accordance with the provisions of the aforesaid Act. Therefore, the interest from 23rd July 2005 up to 31st March 2006 would be taxable for the assessment year 2006-07 (financial year 2005-06) and the interest for the period April 2005 to 22nd July 2005 would be exempt from tax under Section 10 of the Act. IT return
Q. I am green card holder of USA since November 2004. I am 70-year-old pensioner. My income in India from pension and bank deposit is around Rs 1,10,000. Shall I have to file IT return for financial year 2005-06. — Magan Lal Makwana A. In accordance with the provisions of Section 139 of the Income Tax Act, 1961 (the Act), every person, if his total income in respect of which he is assessable under the Act during the period in a previous year exceeded the maximum amount which is not chargeable to Income-tax, shall, on or before the due date, furnish a return of his income, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed. Since, your Indian income is less than Rs 1,85,000, being the maximum amount up to which tax is not chargeable in India in case of a senior citizen, you are not required to file a return for the assessment year 2006-07. Tax liability
Q. I am a senior citizen Income-tax assessee, filing tax-return every year. My total taxable income for the year 2005-06 is above Rs 1 lakh but less than Income-tax exemption limit of Rs 1.85 lakh for senior citizen. Kindly advise whether I should file income-tax return 2005-06. I feel that non-filing of Income-tax return without informing tax authorities that my income is below exemption limit may be considered by them that I have defaulted in filing my Income-tax return and may attract penalty. Kindly guide me how to avoid such a situation. — Jagdish Kumar, Amritsar A. It is not clear from the facts in the query whether your total taxable income is less than Rs 1,85,000 after claiming deduction under Section 80C of the Act or the same is below taxable limit without such admissible deduction. Presuming that your taxable income is below taxable limit without claiming deduction under Section 80C of the Act, you are not required to file Income-tax return in accordance with the provisions of Section 139(1) of the Act. No penalty can be levied, as there is no obligation for you to file the return of your income as your income is below the maximum amount up to which tax is not chargeable. However, in case your income is below taxable limit on account of deduction claimed under Section 80C of the Act, you are liable to file the return of income under proviso to Section 139 of the Act which has been introduced by the Finance Act 2005 applicable w.e.f. assessment year 2006-07. II
Q. I am 65 years old. So, being a senior citizen during the financial year 2005-06, please advise how much tax I will have to pay as per present Income-tax rate. My income is as under: Pension Rs 96,420 Interest from
bank Rs 93,580 Total Rs 1,90,000 — B. Sahai A. Your total income being Rs 1,90,000, a tax of Rs 1,020, including education cess @ 2 per cent on the tax, will be payable by you. Rebate on NSCs
Q. I had purchased the NSCs during the financial year 2004-05. But the rebate was not claimed under Section 88. Kindly advise me whether rebate for these NSCs under Section 80C during the financial year 2005-06 can be claimed along with interest accrued thereon. — R.K. Singhal, Abohar A. The accrued interest on National Saving Certificates can be claimed under Section 80C of the Act for the relevant year only. If you have not included the accrued interest in your income and have not claimed the deduction for the interest under Section 80C of the Act in the preceding year, it will be better to revise the return for the preceding year so as to rectify the error committed by you. |
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