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Virgin Group dials India
RBI staff strike on March 12
Loan waiver not to hit banks, says FM
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Over half of IFCI employees opt for VRS
ICICI Bank to expand in Punjab
Aviation Notes
Market Scan
Tax Advice
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Virgin Group dials India
Mumbai, March 2 The service was launched in association with Tata Indicom. It will facilitate Tata Teleservices with its experience and expertise in designing, marketing and servicing for the Virgin Mobile branded products for the youth segment. The new youth mobile service will also have its SIM cards a secret folder where SMSs can be stored by subscribers and password locked to prevent parents or other prying eyes from opening and reading them. Known for his unique marketing mantras, Richard Branson says that arrival of Virgin Mobile that encapsulates brand philosophy of “Think Hatke” marks fulfillment of a dream. “I had been looking forward to this day for many years. India is a country I hold dear to my heart. The vibrancy of its youth and culture truly makes it a virgin territory”. Talking about doing business in India, he says “It is as difficult as doing it elsewhere in the world. While India with a huge market promises 10 per cent growth, those in this business would be happy if they get 1 per cent growth in the UK and minus 1 per cent in the US.” “We got a survey done and found that those belonging to the distinctive group — the youth — used mobile phone for 360 minutes a month against the general average of 160 minutes. Similarly, the youth use SMSs four times more than other subscribers. Further, they tend to upgrade their handsets in nine to 12 months,” revealed Richard Branson. “At Virgin mobile we believe that the existing operators are all pursuing the same strategy to get as many subscribers as quickly as possible. Our strategy is different. We want to deliver a more tailored, more relevant offering for a single, distinct segment. We are not pursuing scale for scale’s sake,” he said Jamie Heywood, deputy CEO, Virgin Mobile India, says that there are more than 215 million Indians aged between 14 and 25 years. Over the next three years, we expect this segment to be adding 50 million new youth subscribers to have mobile services revenue of over Rs 350 million. Virgin Mobile promises that each subscriber will get a credit of 10 paise per minute of incoming call received from any network. The Virgin-branded handsets, initially six in number, would be priced between Rs 1,800 and Rs 5,000 each. Each handset will be in colour and FM-enabled. “By focusing exclusively on a single segment and by continuing to deliver innovative services that cater to this segment’s distinct needs, we believe Virgin Mobile can capture more than 10 per cent of the incremental market within three years of launch,” he said. Anil Sardana, managing director, Tata Teleservices, said his company was excited about its association with the Virgin Group. Both the groups shared strong philosophy of service innovation and strong brand resonance with the youth segment. This association, he said, supported Tata Teleservices efforts to be the fastest-growing mobile network in India.
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RBI staff strike on March 12
Kolkata, March 2 The decision, that is likely to affect banking operations throughout the country,
was announced by AIRBEA general secretary Samir Ghosh. He claimed that the bank was seriously under-staffed and recruitments must be made immediately instead of going for outsourcing.
— PTI |
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Loan waiver not to hit banks, says FM
New Delhi, March 2 A combative finance minister strongly defended the budget proposals, including the loan waiver, which opposition parties have said was aimed at Parliament elections, and expressed confidence that the budget would spur growth despite the fears of global slowdown. "I don't think," he shot back when asked about fears that the loan waiver scheme to help four crore farmers will lead to collapse of the cooperative banks and the scheduled commercial banks. "I have said whatever loans are written off an equivalent liquidity will be provided to the banks concerned. To a question about farmers owing repayment of loans to money lenders, he said, "which private money lender should I compensate." Chidambaram sought to know why such questions were not raised when political parties were raising the demand for loan waiver. "Why raise it now," he said. He declined to comment on agriculture minister Sharad Pawar's statement that farmers need not pay their dues to private money lenders. "That is his view. I am not commenting on that." To a question about the loans to be written off, he said there was no confusion about it. The budget speech makes it clear that the loans disbursed up to March, 2007, and which are overdue by December, 2007, and remained unpaid up to February 28 this year will be written off. "Where is scope for misinterpretation," he asked. Asked about the view that the loan waiver scheme could result in people deliberately defaulting on payments, Chidambaram retorted, "why was this question not raised when every political party demanded loan waiver. I wonder why this question was not put then to Akali Dal, BJP or Chandrababu Naidu. "When we do something then people ex-post facto wake up to issues of moral hazards. These are all invented criticisms. We are doing something which we believe is doable. — PTI
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Over half of IFCI employees opt for VRS
New Delhi, March 2 "About 250 employees of the total workforce of 470 opted for the VRS scheme, which closed on February 29. This will help the financial institution to save Rs 27 crore and thus improve its enterprise value," sources said. Finance minister P Chidambaram has made a provision of Rs 433 crore in the budget 2008-09 for restructuring old liabilities of IFCI. Sources said 54 per cent reduction in workforce is in line with the intended business plan in the changed circumstances. The rightsizing would cost the company about Rs 45 crore. However, it would not negatively impact the number of executives in specialised disciplines, those who would be required to meet the human asset requirement in the emerging business context, they said. — PTI
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ICICI Bank to expand in Punjab
Chandigarh, March 2 “Since 2 million Punjabis of the total 25 million NRIs contributed significantly to the state’s economy, we have decided to expand out network of 50 branches in the state, particularly in Doaba and Malwa region,” Manish Misra, ICICI’s general manager (international banking group), said here yesterday. Misra claimed that bank’s presence in 18 countries should stand in good stead to lure the NRI customers. In fact, the NRI remittances offered vast potential for the banking industry as their total wealth is pegged at $600-800 billion, he said. With the RBI and government norms being made “people-friendly”, the NRIs wanted to remit their wealth for a variety of options, including real estate, insurance and equity. In fact, a lot of NRIs, particularly in Punjab, wanted to invest in the state and the banking industry will have to gear up to offer them “world-class service”.
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Aviation Notes
Several airlines, national and private, are planning direct operations to metro cities from Chandigarh as soon as expansion work on the airport is completed. This will ease congestion at Delhi and also improve Chandigarh’s connectivity with other cities.
In a recent MP consultative committee meeting, the aviation authorities said the Airports Authority of India (AAI) had planned to develop a civil enclave at Chandigarh to wear international tag. The AAI has already signed a MoU with the Punjab and Haryana governments for formation of a joint venture with 51 per cent stake of AAI and 24.5 per cent held by each government. The Punjab government will be required to give 300 acres of land on the other side of runway with independent access from the city. The defence authorities are said to have already given a conditional ‘go ahead’ for the expansion of the airport. According to the plan, the AAI will construct integrated terminal building to cater to 700 passengers with four passenger boarding bridges, construct apron for parking three in contact and eight remote parking stands for wide-bodied aircraft, three link taxiways, parallel taxiway, cargo complex and hangars for flying club activities and extension of runway, if necessary. Similarly, work on expansion of the Amritsar international airport has been speeded up so that additional operations can be started. In reply to Rajya Sabha MP M.S. Gill, the authorities said modular expansion of terminal building (phase II) at an additional cost had already begun. Several other facilities are being added so that additional quantum of passengers can land and take-off without any hazard. Airlines, particularly national, have to bear heavy costs as aircraft are made to hover around the Delhi airport for clearance from the air traffic controller (ATC) for landing. The commanders, both Indian and foreign, are of the firm belief that this hazard is totally manmade. Several complaints against malfunctioning of the ATCs have been lodged from time to time. But the evil continues causing inconvenience to passengers and heavy losses to the airlines. Helicopter operations continue to cause concern. To MP Ramswaroop Koli’s question, the authorities admitted that the incident of Himalayan Heli Services Chetak helicopter VT-EDT near Katra helipad (J&K) was serious. The authorities added that a helicopter cell had been opened in the directorate-general of civil aviation to monitor issues relating to helicopters. |
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Market Scan
The budget for the financial year 2008-09 is truly a pre-election budget. It would benefit the farmers, minorities, women, salaried class and senior citizens. It is intended also to corner and build up vote-bank for the Congress-led
UPA.
The relief and loan waiver scheme for farmers will be implemented by June 30, 2008, and it appears that the general elections to the Lok Sabha may be scheduled for October. The budget provisions regarding relief to the farmers, social services like health and education, and minorities etc have also their own justification and should be welcomed by all. Readers of this column would be more interested in the impact of budget proposals on the capital stock market. It has a few sops and some slaps on the stock market. Excise duty has been cut on small cars and two wheelers; excise duty has also been reduced on pharmaceutical products from 16 per cent to 8 per cent. Life-saving drugs and those relating to AIDS are easier in respect of custom duties. Double taxation on parent companies which receive dividend from listed subsidiaries has been exempted and is a definite relief. But there are other proposals which are bound to affect the stock market. There are more thorns than flowers in the budget proposals. Tax on corporates remains unchanged. While long-term capital gain is, as earlier, tax-free, but short-term gains would now be taxed at 15 per cent instead of 10 per cent. It would have an impact on the business volume in the stock market and on the profits of mutual funds. Even a sharper-thorn proposal is that STTs will no longer be regarded as an expenditure eligible for tax rebate. This would hit the broking houses in particular. The stock market exchanges and commodities exchange have been brought within the framework of service tax. This may reduce the business volumes in the stock market and the commodity market but it will go a long way in plugging tax evasion. The stock market did not welcome the budget and the Sensex was down by 245.76 points (1.38 per cent). But this may have been due to slippages in the global market. MSCI Asia Pacific index was down by 147.53 points (1.2 per cent). Almost all BSE indices closed lower. The budget proposals, however, did little to provide incentives for exports which have been affected by the higher exchange price of the Indian rupee. Not much has also been done for the ailing textile industry excepting some minor concessions. The budget has been planned to build up vote-bank for the Congress-led UPA and the Congress has to jack up and organise its field workers to derive full benefit of the tax proposals in terms of electoral gains. The Communist parties and Mayawati’s BSP have highly organised cadre to work among the rural and urban areas and have an advantage over the Congress. Even BJP relying on RSS has a cadre to work for BJP. The “common man”, however, should welcome the budget as it would place more money in their hands. This may boost the stock market as well as the consumer market. Reduction in VAT and sales tax will also bring down prices. In what way and to what extent the Reserve Bank of India and the finance ministry can check the rising inflation is uncertain. Also, it is not clear how the finance ministry will reimburse the banks within three years for Rs 60,000 crore package of loan waiver relief to the farmers covered by the banks. |
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Tax Advice
Q. I am afflicted with osteoarthritis in both knees and advised knee replacement surgery. The civil surgeon has issued me a certificate mentioning severe osteoarthritisen, both knees and handicap to the extent of 50 per cent. I have come to know that the government has done away with percentages. Now, there is either handicap or serious handicap for which deduction of Rs 50,000 and Rs 75,000 are admissible respectively.
— D.K. Aggarwala, Hoshiarpur A. A deduction from the total income to the extent of Rs 50,000 under Section 80U of the Income-Tax Act, 1961, is allowable if a person is suffering from a disability as certified by the medical authority. The increased deduction of Rs 75,000 is allowable if a person is suffering from a severe disability. A person with a severe disability means a person with 80 per cent or more of one or more of multiple disabilities. Further a person with a disability means a person suffering from not less than 40 per cent of any disability certified by a medical authority as also a person suffering from any of the conditions relating to autism, cerebral palsy, mental retardation or combination of any two or more of such conditions and includes a person suffering from severe multiple disability. It would thus be observed from the above that the percentages have a relevance to the disability. Further, the disability in relation to bones, joints and muscles should be such which leads to substantial restriction of the movement of limbs or any form of cerebral palsy. Gift to daughter
Q. I am requesting you for a detail information about gift amount to daughter and the formalities to be completed. Secondly, daughter gets interest amount from companies + some amount from Home tuitions total amount is below Rs 50,000. (a) Will she has to file income return? (b) Has she have to apply for PAN? — N.N. Bhardwaj Chandigarh A. Your queries are replied herewith: (a) A gift to your daughter can be made by a simple letter stating that you are giving a cheque for the gifted amount out of natural love and affection to her. The acceptance, thereof, can be made by a letter from her acknowledging the gift and accepting the same. (b) The total income of your daughter being less than Rs 1,10,000, she is not required to file return for the assessment year 2008-09. (c) She does not have to apply for a permanent account number. However, she can apply PAN even though she is not liable to file the return. PPF withdrawals
Q. I have a PPF account in State Bank of India. After initial 15 year period, it stands extended for block of five years (20 years.). It is maturing on March 31, 2008. I understand that it can be extended for block of five years within one year of maturity. My queries are: (i) How much amount can be withdrawn from accounts before requesting for further extension of block period of five years? (ii) Whether facility of withdrawal upto 60 per cent of amount surviving current of extended block period will be then available. — Dr. M.M. Lal, Karnal A. (a) In case a person opts to continue to subscribe for another five years, he is eligible to make partial withdrawals not exceeding one every year subject to a condition that the total of the withdrawals during the extended block of five years shall not exceed 60 per cent of the balance at the credit at the commencement of the said period. (b) As indicated above, the facility of withdrawal of 60 per cent is available during the extended period. |
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