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Inflation to fall in 3 months: Rangarajan
IT, BPO sector to clock $132-b turnover by 2012
Investor Guidance
LG to strengthen rural network
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ONGC’s reserve accretion highest in decade
TRAI move may increase spectrum pricing
Microsoft ‘raises’offer for Yahoo!
Strike at Hero Honda plant
Aviation Notes
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Inflation to fall in 3 months: Rangarajan
Mumbai, May 3 "Inflation has reached uncomfortable levels and several actions have been taken on the monetary and fiscal sides. I think in the next three months it (inflation) could come down to 6 per cent," Rangarajan told reporters on the sidelines of an SME conference here today. The wholesale price index-based inflation has risen to 42-month high of 7.57 per cent for the week ended April 19. Rangarajan said while the impact of the fiscal and monetary measures taken to contain inflation would take some time to show results, a good procurement and reasonably good monsoon expectation would also contribute towards easing inflation. "I do think that apart from the impact of fiscal and monetary measures, procurement has been good and the monsoons are expected to be reasonably good," Rangarajan said, adding that this too would help in moderating inflation. He said the base effect on food price index has also caused the exaggerated inflation figure. On the impact of global economic downturn, he said, despite the slump India's economy is expected to grow at 8-8.5 per cent. However, disturbances in domestic and international markets may have slight effect on growth. "I think the economy will grow at 8-8.5 per cent. In fact, the Economic Advisory Council has estimated the growth at 8.5 per cent three to four months back...I think it is achievable," he said. Earlier in his speech at the conference, Rangarajan said credit flow from the banking sector to small and medium enterprises was still inadequate and wanted banks to enhance credit disbursals to SMEs besides launching state-level venture capital funds for small-scale units. Rangarajan also urged the market regulator SEBI to swiftly set up a separate exchange for SMEs.
— PTI |
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IT, BPO sector to clock $132-b turnover by 2012 New Delhi, May 3 Global infotech analyst International Data Corporation
(IDC) in a report has said that India’s domestic IT and ITeS market was expected to cross the Rs 2,00,000-crore ($50 billion) mark in 2012. This translates into a CAGR of 18.4 per cent in the five-year period. The same stood at Rs 90,014 crore in 2007, IDC said. According to estimates, this, together with exports revenue of Rs 3,20,278 crore, the industry would grow to Rs 5,29,976 crore ($132 billion) by 2012, representing a growth of 16.5 per cent.. With exports continuing to be the biggest segment at Rs 97,492 crore, it is expected that the IT and ITeS industry to grow at 20 per cent in 2008. The IDC said the domestic market was growing at 22.4 per cent. By 2012-end, the share of domestic IT and ITeS revenues is expected to be 40 per cent of the total $132 billion. It currently stands at around 37 per cent. The IT and ITeS exports market is likely to more than double to Rs 3,20,278 crore by 2012 and is expected to touch Rs 1,86,142 crore in 2008, a growth of 20.4 per cent. The Indian IT and ITeS industry grew to Rs 2,46,609 crore in 2007 from Rs 2,01,413 crore in 2006, representing a growth of 22.4 per cent.
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Investor Guidance Q. I am an NRI based in Canada for 10 years. I have questions and will be obliged for your input. 1) I have an agricultural land in India jointly owned by me and my father (worth about Rs 10 lakh). When I take Canadian citizenship and become OCI, what will happen to my agricultural land? Is there any way that as an OCI may I still keep possession of agricultural land in India as OCI? 2) About the wealth tax rule that is mentioned on your website: Is the Rs 15 lakh limit is per person or per couple. If my wife and I separately own fixed assets (land + jewellery) up to Rs 15 lakh each, will we be entitled for wealth tax. — Digambar A. 1. We presume you were holding this agricultural property even before you went abroad and became an NRI. After taking Canadian citizenship, you will become a Person of Indian Origin (PIO). The rights and privileges of an NRI and PIO are identical. In other words, the change in your citizenship (even without an OCI card), has no effect on your right to hold the agricultural land. You can sell it to a Resident Indian without requiring permission from any authority in India. 2. In India, husband and wife are treated as separate entities for tax purpose and, therefore, their incomes and assets enjoy the separate thresholds, both for income tax and wealth tax purposes. Tax liability
Q. For the FY 08-09, if my income is Rs 1.20 lakh and short term gains from shares is Rs 20,000 then total Rs 1.40 lakh being below Rs 1.50 lakh I would not have any tax liability. What if income is Rs 1.20 lakh and the short-term gains is Rs 50,000. Would I have to pay 15 per cent tax for the entire Rs 50,000 or would the 15 per cent tax be payable only on Rs 20,000 (1.20 lakh + Rs 50,000 -Rs 1.50 lakh limit). Further, can I save under Section 80C to bring my income level down to Rs 1.50 lakh or would I mandatorily have to pay tax for the short-term gains exceeding the maximum non-taxable income? What happens if a person is in the 20 per cent slab and then comes down to the 10 per cent because of Section 80C, does he pay 10 per cent or 20 per cent on the taxable amount? — Sudhir Varty A.
If your total income is Rs 1.70 lakh out of which short-term gains on equity is Rs 50,000, you are free to adjust Rs 30,000 of such capital gains against the balance threshold and pay the 15 per cent tax only on the remaining Rs 20,000. You cannot save tax under Section 80C on any capital gain income either short-term or taxable long-term capital gains. Your last query is not too clear. If you are in the 20 per cent tax bracket and make Section 80C investments such that your total income falls to the 10 per cent tax bracket, then obviously you will have to pay 10 per cent tax and not 20 per cent. Deduction on HRA
Q. I own a house for which my interest component on loan is about Rs 2 lakh p.a. I have rented out the place for Rs 15,000 p.m. I stay in another rented apartment paying a rent of Rs 13,500 p.m. Can I claim deduction against my HRA? — Abhishek A.
There are only two situations under which the exemption on HRA cannot be claimed 1) the residential accommodation occupied by the assessee is owned by him ; or 2) the assessee has not actually incurred expenditure on payment of rent in respect of the residential accommodation occupied by him. In your case, you do not own the premises occupied by you and you pay rent for that accommodation. Hence, you pass both the tests and are free to claim the exemption on your HRA as per the rules. The deduction on interest of housing loan is independent of HRA. Therefore, you can claim deduction for the interest paid on housing loan separately against the income from the house property. In the case of HRA, the least of the following is exempt from tax under Section 10(13A) : a) 40 per cent of salary (50 per cent for Mumbai, Kolkata, Delhi and Chennai). b) HRA for the period the house is occupied by the employee. c) The excess of rent paid over 10 per cent of salary. ‘Salary’ includes DA if the terms of the employment so provide, but excludes all other allowances and perquisites. Investment in stocks
Q. Experts are predicting that the Sensex will go down to 10,000/11,000 levels. I have invested in various mutual funds for a few lakhs. I wish that I should redeem up to 80 per cent or so and restart investing again by SIP way when the Sensex starts picking up again. Kindly advise. — Prakash Sharma A.
This will be the wrong thing to do. When the index was at 20-21,000 levels these very experts predicted 30,000 and above. Now they are doing the opposite thing. Please understand that there is no such thing as an expert when it comes to stock markets...we all learn everyday. Also, even if one has a little expertise, predicting the index level is astrology and not stock or market analysis. Please hold your investments over five years or so. Mutual funds are long-term vehicles and if you lose heart within four months, you should never have invested in the first place. Be a long-term investor in the true sense. The authors may be contacted at
wonderlandconsultants@yahoo.com
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LG to strengthen rural network
Kuala Lumpur, May 3 The company is not just offering low-cost models of washing machines and flat panel display television sets for the rural areas, but also expanding its reach to the rural masses by strengthening its dealership and after sales service network in the rural areas. Focusing on dealers in the rural areas as their main marketing agents, the company is now wooing them with incentives and offering better profit margins than in urban areas. Talking to TNS here today, after the launch of 12 models in LCDs, five new models in plasma category and two new models in washing machines, Amitabh Tiwari, business group head, consumer electronics and kitchen appliances, LG Electronics, said there has been a steady growth in the CRTs (cathode ray tube) and washing machine in the rural areas, though the number of LCDs and plasmas sold in rural and semi-urban areas are minimal. “We have sold 43,000 units of CRTs (including flat panel display) in the last fiscal and growth in washing machines have been over 23 per cent. Thus, we have to strengthen our network in the rural areas. Though we cannot offer a zero per cent finance option in rural areas as clients cannot give a collateral, we are pricing our slim TVs aggressively for rural areas,” he said. With stylized design and smart technology being the new brand philosophy for LG, the group will be spending Rs 120 crore as enhancement in design investment, for new platforms this year. V Ramachandran, director, sales and marketing, LG Electronics India, said the LCD and plasma TV market in India was growing at almost 100 per cent. “As compared to 3.5 lakh units sold in the last financial year, we are expecting that the LCD and plasma TV market in India will grow to 800,000 units this year. Though we have the largest market share in plasma TV (45 per cent) and a 22 per cent share in the LCD market, we hope to increase our market share with these new launches, including the scarlet rage of LCDs,” he said, adding that barely a month after these models were launched in the USA, LG has gained a 3 per cent market share in LCDs.
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ONGC’s reserve accretion highest in decade
Dehra Dun, May 3 Disclosing this after a meeting of the board of directors of the ONGC held here at the headquarters of the corporation after nearly a decade, R.S. Sharma, chairman and managing director of the ONGC said the inplace reserve accretion from ONGC operated areas in the country was 182.23 million metric tonne, the highest in the past 10 years while the ultimate reserve accretion from domestic areas was 63.82 million metric tonne for the year 2007-08. He further said the corporation had seven news discoveries in the domestic sector. " Though these are not very significant but these will help in maintaining the production levels from ageing and declining fields," hoped Sharma. "We are elated that the reserve accretion from overseas oil fields in 18 different countries operated by ONGC Videsh Ltd was 46.73million metric tonne for the current financial year," he added. The board also praised the growth of its subsidiary, ONGC Videsh Ltd in securing oil fields internationally. " We recently signed a memorandum of understanding (MOU) with Venezuala where ONGC will invest $356 million and get 40 per cent of the oil share. We are working in 18 countries at 36 projects," Sharma said.
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TRAI move may increase spectrum pricing
New Delhi, May 3 Experts here point out that by bringing out a consultation paper seeking comments of the stakeholders on allocation and pricing for 2.3-2.4 GHz, 2.5-2.69 GHz bands, and 3.3-3.6 GHz bands of the spectrum, the regulator was looking at revising the costs. It could also start a fresh round of debate in the telecom industry. Those supporting 3G technologies would push for higher spectrum charges for broadband wireless services and those in favour of the big technologies like Wi-Max will be opposed to any move to change the existing norms, leading to a delay in the launching of the services, experts said. The delay in introduction of Wi-Max could mean the delay in the launching of the broadband wireless services or the next generation in mobile telephony. Reports said the review by TRAI was aimed at bringing some parity between norms governing 3G mobile services and broadband wireless services. In its earlier recommendations, TRAI had suggested a maximum reserve price of Rs 10 crore for broadband wireless spectrum and Rs 80 crore for 3G mobile services. It is now seeking a discussion on whether the fee for broadband wireless should be raised to 50 per cent of what has been suggested for third generation mobile services.
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Microsoft ‘raises’offer for Yahoo!
San Francisco, May 3 The Redmond, Washington-based software maker upped its offer beyond the original value of $44.6 billion, or $31 per share, according to a person familiar with the matter. The specifics of the new offer weren't known by this person, who didn't want to be identified because the negotiations are still confidential. The New York Times, citing unnamed sources, reported Microsoft boosted the offer "by several dollars" per share, lending weight to the assertion by many market analysts that Microsoft can afford to pay up to $35 a share. Representatives from Microsoft and Yahoo declined to comment.
— AP |
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Strike at Hero Honda plant
New Delhi, May 3 Sources said work at the Dharuhera factory stopped since today morning and all the workers are staging protest inside the plant. The strike broke out after the management discontinued services of about 50 contract workers, the sources said, adding the workers had also opposed to being shifted from one production line to another. The number of contract workers removed by the company could not be ascertained as Hero Honda officials were not available for comments.
— PTI |
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Aviation Notes Worldwide passengers are top priority. They are the lifeline for an airline. Sadly, in India, passengers are nobody’s concern. “Charity,” it is said: “begins at home”. Passengers get a raw deal from the government agencies like the Airports Authority of India (AAI) and National Aviation Company Limited. This grants licence to private operators like developers at Delhi and Mumbai to violate all norms, rules and regulations. No-frills carriers are the worst offenders. The upkeep of toilets and other ground facilities are primarily the responsibility of the AAI, which levies heavy fees from passengers and other users. It is lax in its functions allowing private operators to stay callous. It is great that Parliamentary committee calls for regulatory authority to check private operators to provide requisite facilities and amenities to travellers instead of private operators “illegally eating away” space at terminal buildings for commercial activities. Chairman of the Parliamentary committee on transport and tourism, Sitaram Yechury says: “Commercial practices should be stopped immediately and ground activities be regulated.” Calling for a widened scope for the regulator, Yechury said: “The proposed authority is confined only to the aeronautical services, which form only a small part of the revenue earnings of the operators. The ground activities, which are a large chunk of the earnings, have been left unregulated.” The second extension of present director-general of civil aviation (DGCA) Kanu Gohain ends in June. According to aviation analysts, next in command in the DGCA should be appointed on this key position instead of bothering about technicalities. The former director-general was a deputy director-general (DDG) when he was made director-general (DG). He stayed in office for more than a decade. If a DDG can be DG, why not a joint-director? It will be unfortunate if an “outsider” is brought in. The directorate is the most vital area in aviation sector. There should be no compromise and the official, who has slogged for decades, should be given his due promotion. There is unrest in civil aviation sector as fuel prices are soaring. Fares on national and international sectors are jumping. According to analysts, most of the carriers are sustaining heavy losses. Some of them have closed down or merged into bigger operators. At least two private operators have stolen a decisive march over National Aviation Company, which is sustaining heavier losses than before because passengers’ share has further dipped. Thefts from checked-in baggage at Delhi airport have increased manifold. According to airport sources, officials x-raying the baggage are the main culprits in providing information to ‘professionals’ indulging in thefts.
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