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Let rupee appreciate to check inflation: Assocham
Crude prices likely to hit India harder
Who owns Sensex?
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Anil Ambani group forays into Hollywood
Market Update
Tax Advice
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Let rupee appreciate to check inflation: Assocham
Mumbai, May 18 In a study on inflation in India, released by the Assocham president Venugopal Dhoot here today, Assocham said the appreciation in rupee will encourage more imports and discourage exports. "This short term measure can have immense potential to rein in the price rise, as has been exhibited by the previous year's experience," Assocham said. Among other measures suggested by the chamber include the introduction of dual pricing policy and having a flexible procurement price, rather than procuring the essential commodities at Minimum Support Price (MSP). "The sooner the government adopts a dual policy by differentiating between MSP and the procurement price, the better it will be for market stability," the chamber said. For the long term, the government should opt for starting second green revolution which will be based on "knowledge agriculture" to step up the agri production in the country, Dhoot said. There is a critical need to invest more in rural infrastructure and promote more public investment in agriculture to reduce demand-supply gap. Dhoot said that the current high rate of inflation is due to sharp rise in international prices of crude oil and the farm products, forex inflows into the country and stagnation in the country's foodgrain production. "Internationally, the real prices have reached the highest since the mid 1970s," he said. Quoting the food price index calculated by Food and Agriculture Organisation of the United Nations, Dhoot said the prices rose by 40 per cent during 2007 as compared to 9 per cent the year before. Rice was up 227 per cent, wheat by 293 per cent, repeseed oil by 129 per cent, he said. While, crude palm oil prices have gone up by 104 per cent, soya bean oil by 111 per cent and crude sunflower oil by 155 per cent. Assocham said, the most critical demand side factor is population growth. "While the population has grown 1.9 per cent annually, foodgrains production has failed to match it. The per capita availability of cereals and pulses have declined between 1990 and 2007," the industry body added. Besides, of late with rate of employment on the rise and income levels rising, a certain section of poor people, who were earlier consuming jowar have started consuming wheat which has resulted in more demand for wheat, Dhoot said.
— PTI |
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Crude prices likely to hit India harder
New Delhi, May 18 Goldman Sachs, the most active investment bank in energy markets, earlier this month predicted that oil prices could scale $200 within the next two years. On Friday, it raised its forecast for average oil prices for the second half of 2008 to $141 a barrel from $107 because of tight inventories — a prediction that would require a rapid run up in current prices to come true. The reasons for high prices are very immediate. Take for example tight power supplies in China, South Africa, Chile, Argentina, and parts of the West Asia. This has triggered a boom in demand for diesel for electric generators. The Chinese demand for imported diesel is expected to rise even further in June after this week’s deadly earthquake disrupted gas supplies to major cities and as companies built stockpiles ahead of the summer Olympics. The boom in diesel consumption added to already robust demand from the European vehicle fleet, thinning inventories on both sides of the Atlantic. Meanwhile, US President George W. Bush arrived on Friday in Saudi Arabia, the world’s biggest oil exporter, where he renewed his appeal for more oil. In response, Saudi Arabia repeated its pledge that it would pump as much oil as needed to meet the demand but saw no need for a hike at the moment. After Bush’s talks, his administration announced in Washington that it has cancelled oil shipments into the reserve, beginning in July, when the current purchase contract expires. Bush had refused to stop pouring oil into the Strategic Petroleum Reserve, saying that the stockpile was meant for emergencies and that halting the shipments would have little or no impact on gasoline or crude oil prices. |
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Who owns Sensex?
Pune, May 18 Challenging the Bombay Stock Exchange (BSE), which has applied to register Sensex as its trademark, Deepak Mohoni, a stock market analyst here, has filed a plea with the Trademark registry claiming that the word had been coined by him to denote the BSE sensitive index in his newspaper columns before BSE started using it. Apart from filing his application with Trademark registry, Mohoni has also moved a legal suit in Pune district court under Section 134 of Trade Market to stake his claim in respect of coining of the word. According to Mohoni, he used the word Sensex first in 1989 in a newspaper column to Nickname a long, clumsy phrase-BSE Sensitive Index. He claims that BSE started using it much later from 1995 in its publications. "I decided to file my application before Trademark registry when I came to know that BSE was moving to register Sensex as its trademark," Mohoni told PTI. He has now been served a notice by BSE through its lawyers contending that the word was exclusively associated with Bombay Stock Exchange services and could not be registered as trademark by any other party. Ranjan Nehru, the lawyer for Mohoni, has submitted in his plea that his client enjoyed an exclusive right over the word Sensex, the term which was convenient, attractive and innovative.
— PTI |
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Anil Ambani group forays into Hollywood
RCom’s DTH services
soon New Delhi: TV viewers fed up with bad signal reception are set to get more choice, with Anil Ambani group company Reliance Communication today announcing the road map for launching competitively priced Direct-To-Home (DTH) services across 4,000 towns in the next few
weeks.
Cannes, May 18 Reliance Big Entertainment, the media and entertainment company of the Reliance ADA Group, said that it would provide development funds to eight Hollywood production houses. The company did not reveal the capital it plans to invest in this venture, but sources said the investment would be in the range of $500 million to $1 billion. "We are pleased to have devised this method of investing, whereby Reliance Big Picture can help advance the goals of several of the most important creators in the global industry. I expect to have further such development deals in the near future," Reliance Big Entertainment chairman Amit Khanna said. Reliance Big Picture, the division of Reliance Big Entertainment that would focus on media investments outside of India, sees the development deals as the first major building block towards creation of a new-generation media company. Elaborating further, the company said for any greenlit project, Reliance Big Entertainment would facilitate full creative and fiscal freedom for the
filmmakers. — PTI |
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Market Update
Shrugging off weak industrial production data, high inflation and soaring global crude oil prices, market continued its surge last week as well. The BSE Sensex gained over 4 per cent and Nifty moved up by 3.5 per cent to close at 17,434 and 5,157, respectively, last week. The market is likely to be range-bound in the absence of any major domestic trigger. Inflation, which is spiraling 7.83 per cent), for the week ended May 3 will be closely watched as it remains a major worry and hindrance for the domestic growth. High inflation may compel the government to take more fiscal measures to rein in prices in addition to slew of measures taken recently.
This week is a curtailed trading week as the market remains closed today on account of “Buddha Purnima”. India’s rupee fell to the lowest level since April 2007 to 42.445 per dollar on Wednesday, on speculation record crude oil prices will widen the nation’s trade and current account deficits, increasing demand for foreign currencies. The currency also weakened after overseas investors further sold local equities. The falling rupee, however, boosted Information Technology (IT) stocks. Tata Chemicals
Tata Chemicals (TCL), established in 1939, is one of the leading manufacturers of inorganic chemicals, fertilisers and food additives in India. The inorganic chemicals include soda ash, sodium bi-carbonate and cement while fertilisers include urea and phosphatic fertilisers like diammonium phosphate and complex fertiliser. The company also produces branded iodised salt. The company acquired Brunner Mond Group Ltd (BMGL) in January 2006 to become the third largest producer of soda ash with a combined capacity of 2.5 million metric tonne per annum (mmtpa). It also has a one-third stake in phosphoric acid manufacturing company, Indo Maroc Phosphore (IMACID), to secure the supply of phosphoric acid, the key raw material for its phosphate fertiliser business. Investment in TCL has arguments like firm soda ash prices, enhanced (it recently added 3,65,000 tpa) capacity of its Kenyan (Magadi) plant, which is the lowest cost producer of soda ash in the world. It is also planning to raise its Magadi capacity by another 3,65,000 tpa to 1.1 mmtpa by 2011. TCL would also reap a windfall after the de-bottlenecking of urea capacity. Most importantly, TCL holds a total investment of Rs 775 crore (book value), including strategic investments of Rs 280 crore in the Tata group companies. Its quoted investments with a book value of Rs 160 crore are currently worth over Rs 1,650 crore while the approximate market value of its investment in Tata Sons is Rs 2,910 crore. Thus, its investment portfolio is valued at around $ 1 billion, which works out to Rs 180 per share. The only concern is the cyclical nature of soda ash business. At the current price of Rs 370, Tata Chemicals offers excellent investment opportunity and investors with three years may enter the stock at current levels. |
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Tax Advice
Q. The 15-year PPF account is deemed to have been matured 15 calendar years after the opening of account or 15 financial years after the financial year in which the said account is opened.
I opened a PPF account in SBI on 25.02.1984 and have been subscribing to this account to date a — Maturity and the permissible two extensions. (i) If 15 finanacial years are considered for opening of account, the account matured on 31.03.1998, 31.03.2003 and on 31.03.2008 (after two extensions of 5 years). The money could be withdrawn on 01.04.2008. (ii) As per the bank, 15 financial years after the financial year in which the account was opened, the account gets matured on 31.03.1999, 31.03.2004 and now finally closes on 31.03.2009. The money can be withdrawn on 01.04.2009. If Bank's version at (ii) is agreed, I can subscribe during the financial year 2008-09 also and that will be my 26th year of contribution to the same PPF account. I understand this is not permissible as the account can be operative for maximum period of 25 years (15+5+5). Further, by accepting contributions during financial year 2008-09, the account gets extended by another five years which is not as per rules. Please clarify. — H.G.C., Chandigarh A. According to the clarification issued by the Office of the Regional Director, National Savings Institute vide its letter No.1266/ PPF/ NSI-CHD/07 dated 18th June, 2007, the PPF account can be extended for any number of block of 5 years without any limit. Therefore, in case you so desire, you can extend the PPF account for another five years without any difficulty. In case you want to close the account, the procedure as explained by the bank will have to be followed. Tax liability
Q. I am a senior citizen retired from DoT on 30.09.2002. During the Financial Year 2007-08 (Assessment Year 2008-09), my receipts will be as under: Pension: Rs 78,463, Family pension: Rs 17,136, Medical Allowance: Rs 6,844, MA arrears: 5,329 (for the period 01.10.02 to 31.03.2007), Interest on SB: Rs 1,825, Interest on MIS: Rs 27,000, Misc.: Rs 1,074, DA Arrears Rs 1,416, Arrears of pensionery benefits: Rs 1,32,102 (Due to revision of pay, the arrears is for the period 01.10.2002 to 31.03.2007). Maturity of tax- free RBI bonds (deposited on 27.12.2002, matured on 27.12.2007, paid on 03.01.2008): Rs 2,12,984. In the month of August, 2007, I purchased a built-up house joint in my name and in the name of my married son earning independently and invested Rs.4,40,000 (Total value of the house Rs 8,80,000) and other expenditure towards registration about Rs 50,000 each) (Amount borrowed from friends now cleared). I am going to sell one plot in my name and the deal is likely to be matured during this financial year. I am likely to get Rs 5/6 lakh. My savings are: Rs 9,796 + Rs 646 towards LIC premium, Rs 2000 to Helpage India, Rs 500 towards PPF. Kindly advise my liabilities towards Income-tax as also the way to save tax if any. — Prem Lal Arora, Ludhiana A. After deducting the amount which have to be considered for deduction under Section 80C and 80G of the Act, your taxable income would work out at Rs 2,41,360. The tax thereon would be Rs 9,550 excluding interest payable under Section 234B and 234C of the Act. In computing the total income, it has been presumed that the amount of Medical Allowance has been incurred towards the medical expenses for self and family members. It is not possible to compute the capital gain, if any, on the sale of plot as the date of acquisition of the plot, cost of such plot are not indicated in the query. The capital gains tax can be saved if the amount of capital gain is invested in the acquisition of tax saving bonds within six month of the date of sale of the property. |
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