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‘Inflation to cool down to 8-9 pc’
Power bonanza for M’rashtra sugar factories
US stocks fall on GM losses, unemployment
Ranbaxy open offer terms may change: Daiichi
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Airlines fail to appoint
All dues to AAI cleared: Jet
Investor Guidance
Aviation Notes
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‘Inflation to cool down to 8-9 pc’
New Delhi, August 2 “As things stand, perhaps to look at an inflation rate of 8-9 per cent will be a difficult thing, but probably, we will do it by March 2009,” Rangarajan said at the launch of a book ceremony. The international crude prices have come down to around $123 a barrel after crossing $147 a barrel on July 11. Rangarajan, who had earlier said inflation rate could cool to 5-6 per cent by October, said the oil prices and consequently commodity prices had gone beyond all expectations. For the week ended July 19, inflation touched 11.98 per cent mark. “You can get a much lower rate (of inflation), if there is confluence of favourable factors such as moderation in oil prices and so on. Otherwise, if the oil prices remain at the prevailing rate that is best estimate (for inflation),” he said. On GDP growth prospects, he said the economy was likely to slow down due to various external and domestic factors and might not be able to touch the previous rate of 9 per cent. “As far as growth is concerned, it will slow down. It will slow down than what we have experienced in previous years. But nevertheless, I think we can still hope to have GDP growth of economy between 7.5 to 8 per cent,” he said. The EAC is expected to submit its report on ‘Outlook of Economy for 2008-09’ next week. In January, the EAC had projected GDP growth of 8.5 per cent for 2008-09. — PTI |
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Power bonanza for M’rashtra sugar factories
Mumbai, August 2 Under a government-sponsored scheme called Urjankur, the sugar co-operatives would be given low-interest loans and other concessions to generate power from bagasse — waste products left behind after extraction of juice from sugarcane. Of the 165 sugar co-operatives in Maharashtra, 55 have been chosen by the state government to set up power co-generation facilities. Minister for co-operation Patangrao Kadam said in the first phase 33 co-operatives would generate 548 MW of power in the next 18 months while power from the remaining co-operative would come in the next three years taking the total power supply to 1,000 MW. Earlier this week, the Maharashtra government gave the go-ahead for 11 sugar co-operatives to set up power generation facilities under the build-own-operate-transfer model. Another 22 factories would be given the green signal in the next three months, say state government sources. The Maharashtra Federation of Sugar Co-operatives, umbrella body in the state, says the co-operatives would invest Rs 4,000 crore over the next three years. The power co-generation plan was first mooted in 2006. Under this, the Maharashtra Electricity Distribution Company — Mahavitaran, would buy power at the rate of Rs 3.06 per unit from the co-operatives. However, the project could generate just 139 MW of power as the state government did not give many concessions to the co-operatives. Under the proposed plans, Mahavitaran is expected to increase the rate at which it would purchase power. However, the exact quantum of increase is still being decided. |
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US stocks fall on GM losses, unemployment
New York, August 2 GM lost $15.5 billion, or $27.33 per share, in the second quarter on the back of weak demand in the US car market spurred by soaring fuel prices and a weaker economy, the company said on Friday from its headquarters in Detroit. The loss was worse than had been anticipated. In the same period last year, the company made a profit of $891 million, or $1.56 per share. The US economy lost 51,000 jobs in July and the unemployment rate went up to 5.7 per cent, the US department of labour announced. It was the seventh straight month of job losses as the economy continues to sputter and brings to 463,000 the total lost since the beginning of the year. “The economy is slowly rolling over,” Charles Knott of Knott Capital Management told Bloomberg financial news. “We’re prepared for more on the downside and continue to be very cautious. If we have a sustained recession, GM and Ford are in a heck of a lot of trouble.” The blue-chip Dow Jones Industrial Average dropped 51.70 points, or 0.5 per cent, to 11,326.32. The broader Standard & Poor’s 500 Index fell 7.07 points, or 0.6 per cent, to 1,260.31. The technology- heavy Nasdaq Composite Index lost 14.59 points, or 0.6 per cent, to 2,310.96. —
IANS |
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Ranbaxy open offer terms may change: Daiichi
New Delhi, August 2 The company told a filing with stock exchanges that its draft letter to SEBI was submitted June 27 but the observations were still awaited. “Hence, the schedule of activities as per the disclosure in the public announcement will undergo a change,” the filing said. “The revised schedule of activities in respect of the offer pertaining to the acquisition of the equity shares of the target company (Ranbaxy Laboratories) will be announced separately after receiving SEBI’s observations.” ICICI Securities, managers to the open offer, made the public announcement while Japan’s Nomura is the advisor for Daiichi Sankyo on the matter. Ranbaxy’s takeover by Daiichi Sankyo was announced in June when Malvinder Singh and family agreed to sell their 34.8 per cent stake in the company. The mega deal, the largest in India’s $7.3 billion pharma industry, was estimated to value Ranbaxy at $8.9 billion and catapult the combined entity as the world’s 15th biggest drugs-maker from the current 22nd position. — IANS |
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Airlines fail to appoint ombudsman
New Delhi, August 2 No airline, including the National Aviation Company of India that runs Air India, has heeded to the government’s request, despite being given two months to do so, a senior official in the civil aviation ministry said. The ombudsman was proposed as authority that would provide a forum for passengers to lodge their complaints and to act as an arbitrator for settlement of disputes between them and the airlines. “As of now there is no agency with which an air passengers can lodge complaints. They can only go to various consumer disputes forums or the courts to get their complaints addressed,” said the official. “But once the carriers appoint their ombudsman, the grievances of passengers are expected to be addressed much faster. It would be an obligation on the part of carriers and send a signal that they care for their passengers.” Spokespersons for various carriers said the government had only made a proposal and that it was not a mandatory on their part to appoint an ombudsman. Then civil aviation secretary Ashok Chawla made the suggestion for an ombudsman during a meeting with all carriers early June, and August 1 was set as the deadline by which the airlines were required to comply. —
IANS |
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All dues to AAI cleared: Jet
Mumbai, August 2 “Jet Airways and JetLites’ outstanding with the AAI as on March 31, 2008, stood at a very small fraction and well within the normal credit limit,” Jet Airways chief executive officer Wolfgang Prock-Schauer said here. The dues were subsequently fully cleared in April, he said. — PTI |
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Investor Guidance
Q. My family recently got TDS certificates for my NRI and savings account. The TDS certificate for NRI account displays tax deducted at the rate of 30 per cent while TDS certificate for savings account displays tax deducted at the rate of 10 per cent.
Is there any reason why TDS rate is higher for NRI account? The amount of interest in both the cases is almost same. My only source of income in India is through interest on my savings. Is there any form that I can fill online or fax to the bank to stop further TDS deductions on my account? — Sudeep A. On becoming an NRI, you are required to inform the bank about the change in your status. The bank will then redesignate your existing residential accounts as NRO. It appears that you have a resident account in India, even when you have become an NRI. Kindly get it redesignated as NRO expeditiously. The interest on NRO is fully taxable at the rates applicable to the residents. Under the IT Act, it is mandatory for the banks to apply TDS (= withholding tax) on NRO interest. There is no income threshold under which TDS is not chargeable. TDS is applicable at the rate of 30.9 per cent (plus surcharge, if any) on the entire NRO interest (without any threshold) and nothing can be done in practice, to avoid it. The TDS is applicable on accrual basis on cumulative deposits. If your tax liability is less than the TDS, the only practical way to get the refund is to file the tax returns. The TDS is not the same as your tax liability. This liability will be computed on the basis of the income tax rates that again depend upon your income and the exemptions, deductions and rebates you can claim. The TDS can be set off against your actual tax payable and pay only the difference. In case the TDS is higher than the tax liability, you will get a refund. Form 15-G (for non-seniors) or 15-H (for senior citizens), requesting for non-application of TDS is not available for NRIs. For residents (an RNOR is a resident), TDS is applicable only when the annual interest from a branch of a bank is over Rs 10,000. The rate of TDS is 10 per cent plus education cess at the rate of 3 per cent. In case the interest payable is over Rs 10 lakh, there is a surcharge of 10 per cent. Tax return
Q: When I went to file my tax return, the official at the counter asked me to submit Form-16 as well as TDS certificates. This has come as a surprise to me as I was under the impression that now tax return forms are supposed to be annexureless. In fact, last year I have submitted my return without any annexure. In this regard, has there been any circular or order from CBDT specifying that the rules have been changed? — R.J Nair A. Yes, there is a circular but it states quite the opposite. CBDT has issued a circular (No.6 dated July 18, 2008) that in fact specifies that tax returns have to be indeed filed without any annexure. The relevant extract of the circular is reproduced hereunder: “2. It has come to the notice of the board that in spite of the directions contained in the instructions for filling the return forms, the practice of accepting returns, along with annexure is still continuing. This practice goes against the expressed policy of the government and is not in consonance with the legal provisions. Therefore, it is emphasised that chief commissioners of income tax must ensure strict compliance with the provisions of law. It may be reiterated that all annexure accompanying the income tax return forms should be detached and returned to the tax payers by the receiving official.” Q. Erstwhile UTI had launched a scheme — senior citizens unit plan (SCUP) mainly to provide hospitalisation cover on retirement. Depending upon the age of entry, one-time premium was collected. The scheme was abruptly wound up during the last financial year. My question is: I joined the scheme on April 1, 1995, with a one-time premium of Rs 2,600. On March 28, 2008, I received the redemption proceeds of Rs 11,963.79. What should be the tax treatment for the difference in redemption and paid up price? Would the difference be LTCG or to be added to my income? — Varadraj A. This is a debt-based scheme and no STT is paid by UTI at its redemption. Consequently, LT gains arising out of sale of debt-based units will continue to be taxed at the rate of 10 per cent without indexation or 20 per cent with indexation, whichever is lower. The authors may be contacted at wonderlandconsultants@yahoo.com |
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Aviation Notes
The concept of medical/health tourism has caught the imagination of foreigners. There is a reason for it. They are being provided first world treatment at third world prices.
Hospitals, with augmented facilities, and tour operators are the gainers. For foreign tourists, it is a perfect health vacation. But this exercise is packed with many insurmountable problems. Most of the hospitals - government and private - are fully occupied. With an emphasis on medical tourism, many Indian patients are getting neglected because their paying capacity is much thinner than that of foreigners. Though terminal building for the international passengers has received the much-needed face-lift, accidents continue to happen. Recently, Kingfisher airlines car hit an Air India vehicle. Luckily, no one was injured. All this has been happening because many drivers are unaware of the topography of the airport and there is utter lack of discipline. Following bird sucking into the engine of a Mauritius aircraft, municipal corporation of Delhi and authorities concerned at IGIA have directed removal of illegal slaughtering near airport and regular cleaning of garbage sites. The analysts feel that more stringent measures should be taken so that incidents of bird hitting aircraft are reduced. While issues pertaining to flight and duty time continue to hang afire, the directorate-general of civil aviation (DGCA) has decided to ground cockpit and cabin crews suffering from hypertension and blood pressure. “We will not compromise on safety norms,” said a senior DGCA official. As there is widespread unrest among airlines, the government has set up a high-powered committee to look into their grievances. |
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