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High crude prices worry PM
OilMin seeks cut in excise duties
FDI inflows up five-fold in 3 yrs
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Telecom
Tangle
Beauty product makers evading VAT
IPOs to take investors’ wealth to Rs 100 trillion
‘Tough measures to ensure quality of Chinese goods’
Realty boom a reflection of growth: Nath
Govt to take over Sri Lankan Airlines
Tata Motors’ ratings under credit watch
Nabard to issue bonds worth Rs 5,000 crore
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High crude prices worry PM
New Delhi, January 7 “Steep rise in crude oil prices is a cause of concern. We have to look at various options open to us,” he said at a function where new CAG took oath of office at Rashtrapati Bhawan. Vinod Rai, a 1972-batch Kerala cadre officer, took over as the new Comptroller and Auditor General of India today. The GoM on fuel prices, headed by external affairs minister Pranab Mukherjee, will meet on January 17, the first meeting after its constitution by the Prime Minister in November 2007, to consider a response to crude prices touching $100 a barrel. With state retailers Indian Oil, Bharat Petroleum and Hindustan Petroleum together are losing Rs 340 crore daily on the sale of petrol, diesel, domestic LPG and PDS kerosene at prices below the imported cost, a hike in fuel prices and a cut in excise duty are mooted as options. While 42.7 per cent of the under-realisation on fuel sale is met by government through issue of oil bonds and one-third by upstream companies like ONGC, options for neutralising the balance one-fourth of revenue loss are being explored. |
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OilMin seeks cut in excise duties
New Delhi, January 7 The oil ministry has suggested an exemption from levy of service tax on exploration activity. The exploration activities were brought under the ambit of service tax in last year’s Budget. In this context, the finance ministry has asked the oil ministry to provide details of contribution by each exploration company and the service provided by them in the year 2006-07 and 2007-08. The oil ministry has also sought exemption on customs duty on capital goods. The ministry has also proposed declared goods status for natural gas, LNG , bio-fuels and bio diesels. In face of the rising oil prices in the international market, the under recovery of oil marketing companies on sale of petrol and diesel was also required to be shared by upstream oil companies like ONGC, OIL and GAIL. The share of upstream oil companies was based on the ratio of profit after tax (this ratio was first computed as per the PAT of 2004-05). In the year 2007-08, the upstream oil companies contributed Rs 8,788 crore between April-September 2007. The government plans to phase out subsidy in 3-5 years, from April 1, 2002. The subsidy during 2003-04 and 2004-05 was reduced by one-third each year, from April 1, 2005 onwards, the subsidy has been fixed at one-third of the rate of subsidy for 2002-03. The government has thereafter extended the subsidy schemes for the period of three more years from April 1, 2007 to March 31, 2010.
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FDI inflows up five-fold in 3 yrs
New Delhi, January 7 “As a percentage of total investment, the share of FDI has gone from 2.55 per cent in 2003-04 to 6.42 per cent in 2006-07,” a year-end review of the Department of Industrial Policy and Promotion has shown. It said after receiving FDI of $15.7 billion in the last fiscal, a target of $30 billion had been set for 2007-08. Till August this fiscal, inflows of $6.44 billion were recorded with the maximum funds coming through tax haven Mauritius. Reflecting the growing interest of foreign investors into the country, share of FDI in India’s gross domestic product has also gone up from 0.77 per cent to 2.31 per cent in the last financial year. “Due to progressive delicensing, only a handful of sectors remain within the ambit of compulsory licensing on account of safety, security and environmental concern,” the review showed. The sectors that are in the licensing regime are distillation and brewing of alcoholic drinks, cigars and cigarettes and manufactured tobacco substitutes, electronics aerospace and defence equipment and all types of industrial explosives. — PTI
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Anil fires fresh salvo at GSM operators
New Delhi, January 7 “Whatever is happening in the telecom sector is visible to everyone. The monopolistic mindset of a few of the existing GSM players is affecting the sector badly,” Ambani said. TDSAT will on January 9 hear the Cellular Operators Association of India’s petition challenging the government’s decision of October 18 last year allowing dual technology to offer mobile services, and also the spectrum allocation norms. TDSAT had earlier refused to stay the process of spectrum allocation last month, forcing the GSM operators to approach the Delhi High Court. Asked about RCom getting the benefit of using the two technologies - CDMA and GSM, Ambani said: “We are not the only one to get this facility. HFCL and Shyam Telecom have also got the permission and all of us have paid the money for our respective circles to get GSM spectrum.” Ambani said the three top GSM operators have saved crores of rupees in capital expenditure by taking extra spectrum beyond their contractual limit, at the cost of the government. The actions of these three operators, especially cartelisation, were being heard in TDSAT, he said, adding the issue was pending with regulator TRAI and full examination was being done by the Department of Telecom. Apart from forming a cartel, these three operators have now gone a step ahead by sharing the towers. This shows that they want to continue working with oligopolistic mindset, Ambani said. — PTI
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Beauty product makers evading VAT
Patiala, January 7 The Excise and Taxation Department was in the process of tightening the noose around such evaders. The department has already penalised three Ludhiana-based manufacturers and distributors and recovered fine worth Rs 40 lakh. It was estimated that the burgeoning cosmetics market was expanding at such a fast pace that the annual sales of beauty products was crossing Rs 1,500-crore mark in Punjab alone while the sale of such products was said to be around $1.3 billion in the country. There were around 300-cottage level and other beauty product-manufacturing units in Punjab alone. To make big bucks, a number of cosmetic manufacturers had not only been selling their products by describing them as ‘ayurvedic medicines’ but also got themselves registered as ayurvedic product manufacturers. Sensing big margins in the business on account of alleged ease in evasion of taxes in Punjab, certain big houses had also jumped in the ‘ayurvedic’ beauty product manufacturing bandwagon. In fact, there was a vast gap between rate of taxes and VAT on cosmetics and medicine products, particularly those based on ayurvedic formulae and principles. If medicines invoked just around 4 per cent local sales tax, the cosmetics manufacturers had to pay VAT at the rate of 12.5 per cent. Many multi-level marketing companies were also following the footsteps and were gobbling up VAT and other taxes worth crores. Their modus operandi, the sources said, was to show payment of taxes at first level of sales wherein, sale price of a product to first buyer-cum-distributor was much lower than the price being paid for that product by the actual buyer. They were using their chains of distributors to gobble up vast difference of tax rates. When contacted, the Punjab excise and taxation commissioner said his department was conducting statewide checking of records to curb the malpractices.
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IPOs to take investors’ wealth to Rs 100 trillion
New Delhi, January 7 The underlying public issues are currently estimated at around Rs 2,00,000 crore, which includes mostly big-ticket initial public offerings
(IPOs). Even with an average dilution of 10 per cent of equity in these
IPOs, the public issues could easily add close to Rs 20,00,000 crore to investors' existing wealth, marketmen believe. This would take the total wealth invested on bourses, measured in terms of cumulative market capitalisation of all the listed companies in India, to close to Rs 100,00,000 crore, from more than Rs 75,00,000 crore currently. "The (public issue) pipeline is presently Rs 1,90,000 crore strong," primary market tracking firm Prime Database's Prithvi Haldea said, while adding that a strong issuer pipeline is well accompanied by huge investors' appetite. However, the success of IPOs depend considerably on the secondary market conditions, the experts believe. "Secondary market needs to remain stable, if not buoyant, and scam-free. The present conditions continue to offer an excellent opportunity to channelise household savings into the economy through the capital market," Haldea said. According to Prime Database, capital mobilisation would be over Rs 35,000 crore from 70 public issues alone, for which documents have already been filed with market regulator SEBI, while the year 2008 could see close to Rs 75,000 crore being raised collectively through all public issues plan underway. Besides, investment bankers are being sounded out by a host of other corporates for their probable IPOs and plans could be put in place soon for these public issues. According to bankers, the IPO action this year and in the near future would be led by power and infrastructure sectors, which could account for at least half of the total issue proceeds estimated for 2008. Anil Ambani Group's Reliance Power is the first major IPO to hit the bourses and the four-day bidding process would begin on January 15. It is looking to raise close to Rs 11,700 crore and the company's market cap is estimated at around Rs 1,00,000 crore even if it lists at the lower end of the price band of Rs 405-450 a share in first week of
February. — PTI |
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‘Tough measures to ensure quality of Chinese goods’
New Delhi, January 7 “Special branches of inspections are there to ensure quality of goods being exported… We normally do not allow goods without quality certificate,”
Xiuxian, who is leading a CYICF delegation to India to promote their forthcoming commodities fair from October 22-26 in
Yiwu, China, told The Tribune here on the sidelines of a promotion event organised along with the Association of CHINDIA Economic and Cultural Promotion. She said during the fair, quality inspectors would conduct random checks on the products being displayed to ensure that only quality products are displayed.
Recently, in the USA some Chinese toy companies had to reportedly recall some of their products on safety grounds. The string of toy recalls, combined with the recent scares related to Chinese pet food, had prompted consumers and importers demanding strict enforcement of quality and safety norms on Chinese goods. About the Yiwu Fair, Xiuxian said: “The 2008 Yiwu Fair will have 14 industries and nine exhibition sections.” |
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Realty boom a reflection of growth: Nath
New Delhi, January 7 “With the economy on an upswing, the emphasis and requirement today is on creating international standard infrastructure and housing facility to sustain the growth rate projected in the 11th Plan. The real estate sector has the capacity to pay for itself without straining the limited resources of the state government”, Nath said. He was speaking at the ‘National convention ‘Natcon 2008’: Real estate for all’ organised by the Confederation of Real Estate Developer’s Association of India (CREDAI), here today. The minister further stated that we have already opened construction development sector for FDI and the policy permits wholly owned subsidiary in this sector in India by a foreign company. “Of course, there are conditions regarding minimum area for development and minimum capitalisation to be brought in by the foreign investor. A number of global players have entered the Indian market and many more have shown interest. Growth and investment have also created opportunities for investment in real estate sector”, he said. “While the role of the Government is expected to be primarily as a facilitator to the development process, the private sector participation is aimed at bringing technical and managerial expertise in delivering good quality mass housing projects,” he said.
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Govt to take over Sri Lankan Airlines
Colombo, January 7 The British head of the airlines Peter Hill got attached with the airline in 1998 after the Dubai-based Emirates Airlines took over its management. While the government owns 51 per cent share in the Sri Lankan Airlines, the Middle Eastern airline has 43.6 per cent stakes in it. Hill's work visa was revoked last month by the government here apparently over the national carrier's "refusal" to provide seats to Rajapakse and his delegation in an over-booked flight back home from London. The President was rushing bome last week from London for the crucial third reading of the budget in Parliament after watching the passing out of his son Yoshitha from the Royal Britannia Naval College in Dartmouth. But, the Sri Lankan Airlines reportedly refused to clear 35 seats for the government team on an over-booked flight from London via Maldives to Colombo on December 13. The President eventually returned to Colombo on December 14 on a charter flight with Mihin Air, a budget carrier wholly owned by the government.
— PTI |
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Tata Motors’ ratings under credit watch
Mumbai, January 7 Tata Motors' long-term credit and foreign currency ratings of speculative grade 'BB+' have been put under credit watch with negative implications, a S&P statement said. "This action follows the recent announcement by Ford Motor that the company is in focussed discussions with Tata Motors on the potential sale of its Jaguar and Land Rover business units," said Standard & Poor's credit analyst Anshukant Taneja. This would be a large scale acquisition for Tata Motors that could potentially have a negative impact on the corporate credit ratings on the company, especially if it is heavily funded by debt, he added.
— PTI
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Nabard to issue bonds worth Rs 5,000 crore
New Delhi, January 7 In a notification that would come into effect from April 1, the finance ministry said deposits made in Nabard rural bonds would be eligible for deduction under Section 80C of the IT Act for assessment year 2008-09 and subsequent years. Under Section 80C of the IT Act, tax payers get income tax exemption on investment up to Rs 1,00,000 in certain schemes like insurance, provident funds and PPF. From the assessment year 2007-08, investment in a term deposit for a fixed period of five years with any scheduled bank is also eligible for deduction under this section. In last fiscal also the government had allowed Nabard to issue zero coupon bonds amounting to Rs 10,000 crore for investment in agriculture and rural development. — PTI
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