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Pricing key to energy policy: PM
Textile industry unlikely to meet export target
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Global banking deals in Sept touch $87 bn
Sony targets 30 pc share in LCD TVs
Reliance, Spielberg ink deal
Aviation Notes
Investor Guidance
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Pricing key to energy policy: PM
New Delhi, September 20 It is learnt that Prime Minister will hold talks with the US companies in the energy sector, especially those in nuclear energy, to look at India as an investment destination. The Prime Minister said energy pricing was a key component of energy policy. “Appropriate energy prices must provide the incentives needed for efficient use of energy and also the incentives for investment in expanding supplies,” he said. The PM’s remark on the energy prices is a reflection of tumultuous experience that India and its consumers have faced in recent times due to highly volatile crude oil prices. Volatility of crude oil prices in recent times have played truant with Indian consumers, companies and with the finances of central government. The meeting was attended by Planning Commission deputy chairman Montek Singh Ahluwalia, members of Planning Commission, power minister Sushil Kumar Shinde, petroleum minister Murli Deora, renewable energy minister Vilas Muttemwar, and agriculture minister Sharad Pawar, among others. Cautioning that India's import dependence for energy was likely to increase, the Prime Minister said appropriate pricing was must for investment to augment supplies. “Optimal exploitation of domestic energy resources is necessary with a view to increase India's energy security,” he said. “Energy is a crucial input in our development and our energy requirement for growth is indeed very large. From all available information, we are also likely to be increasingly import-dependent. This makes us vulnerable to uncertainty of international prices and also reliability of supplies,” he said. “Currently, policies relating to individual energy sectors are set by a number of different ministries reflecting historical evolution. This means the policies followed in different sectors are not always internally consistent. It is, therefore, critical that we evolve an Integrated Energy Policy based on a consistent application of economic principles across different energy sources,” he said. As a conclusion to today’s discussion, it was held that the recommendations of the expert committee on energy, set up by the Planning Commission under the chairmanship of Kirit Parikh, suggested a passage of comprehensive energy policy with many specific recommendations. The cabinet secretary has been asked to discuss various overlapping issues with concerned ministries to form an integrated approach plan. Although the approach of the report on Integrated Energy Policy has been reflected in the 11th Plan, Dr Singh felt that there was a merit in adopting the policy that could guide policies in individual energy sectors in the times to come.
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Textile industry unlikely to meet export target
Chandigarh, September 20 Talking to TNS here today, Sunil Jain, president of North India Textile Mills Association (NITMA), said the decision by the government to raise the MSP, cut in export incentives, increase in interest rates and regular power cuts had already forced the textile mills in North India to cut down production by 25 per cent. "With production being brought down, the exports will naturally take a hit,” he said. "The textile mills in northern India exported textile products worth around $3 billion during 2007-2008, out of country's total export of $20.5 billion. This was almost 20 per cent short of the set target of $25 billion. This year, the situation is likely to further deteriorate as demand from the USA, which is the largest importer of textile products from India, is likely to further go down in the second half of 2008. In the first half of this fiscal, it was down by 3.24 per cent,” said Jain. Though the textile commissioner has so far not notified the MSP of cotton, it is expected to be around Rs 2,700 — up by 47 per cent. “At these rates, the cotton textile mills have no other option, but to shun the commodity and resort to drastic cut in production,” added Jain. Most of the north Indian textile mills in Ludhiana, Chandigarh, Haryana, Himachal, Western Uttar Pradesh, Rajasthan and Gujarat, have either made losses in the first quarter or have made substantially lower profits compared to earlier years. The area under cotton production, too, has declined this year. In Punjab, the area under cotton has declined from 6 lakh hectare last year to 5.28 lakh hectare this year, while in Haryana, the area has declined from 4.83 lakh hectare last year to 4.17 lakh hectare now. The cotton crop in Maharashtra and Andhra region, too, has been hit by bad weather, leading to a decline in production. “With the hike in MSP and low raw material availability, the textile mills in North India will be further reeling under the pressure of increasing input costs and raw material prices on the one hand, and stagnating or declining price realisation for finished goods on the other" said Jain. He added that drastic reduction in duty draw-back rates, which have become effective for all textile products, will further hit the industry already under pressure. |
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Global banking deals in Sept touch $87 bn
New Delhi, September 20 "The monthly banking M&A volume has reached $87.2 billion in September so far with three of the top five banking deals so far this year have been announced this month, which is the third largest monthly figure on record," global deal tracking firm Dealogic said in its latest report. The collapse of 158-year-old Lehman Brothers and distressed sale of Merrill Lynch and Bear Stearns has led to a global financial crisis, and this would lead to consolidation in the banking sector as many more bank closures are on the radar, market observers said. "The recently announced acquisition of HBOS for $21.9 billion by Lloyds TSB is the largest European Banking M&A deal in 2008 so far and second largest globally," Dealogic said. Of the top five global banking deals three were announced this month only.
— PTI |
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Sony targets 30 pc share in LCD TVs
Chandigarh, September 20 This was stated by Sunil Nayyar, general manager, sales, Sony India, while talking to mediapersons after launching the Bravia series of televisions here yesterday. “Though the small screen LCD is a huge market, we have a 20 per cent share in this category. With Bravia, we hope to be the numero uno player in the below 26-inch category of LCD televisions,” he said. He also said they were planning a big festival promotion wherein the winners of the lucky draw would win tickets to Los Angeles, Sony Vaio laptops and Sony Ericsson mobile handsets. |
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Reliance, Spielberg ink deal
Mumbai, September 20 |
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Aviation Notes
The explosion of five bomb blasts in different parts of Delhi the other day has increased woes of the twin-sectors of civil aviation and tourism in the country.
Several bookings from different parts of world have been cancelled. Travel agents, already hit hard, predict more cancellations. They say that many non-resident Indians (NRIs), on vacation to their home country annually, have changed their plans because of unfavourable conditions in Delhi and several other places. Most of the incoming flights have been operating light. Similar is the situation about outgoing flights on both domestic and international routes. Some scheduled airlines have improved their in-flight services, including free service of snacks and meals, but the passengers are unwilling to fly. They say that train journey is better than flying. The over-all aviation situation in the country has been far from stable. New aviation secretary in the ministry has taken over. He will need some time to get a proper hang of the situation. Soon there will be a new chairman of the Airports Authority of India (AAI). Already soulless, it keeps losing one limb or the other every month. The air control is now out of its hands. The way the situation is developing, it will have no clout at important airports like Delhi and Mumbai where private operators will call all the tunes. It appears the powers that-be in aviation sector are more interested in improving the conditions of private players instead of caring for their faithful and loyal organisations. The security on ground at international airports and in Indian skies has been far from satisfactory. Despite ultra-modern communication system, 'history-sheeters' are able to fly out, while foreign planes keep hovering around in Indian air-space. Here high and mighty agencies are more to blame than mere directorate-general of civil aviation and other security units. There is utter lack of rapport among security outfits. Mere alertness will not help. Stringent measures will have to be placed in pace so that awkward situations do not arise. Because of renovation work, there are several weak zones at the Indira Gandhi International Airport (IGIA). Many world renowned players like Airbus Industrie, Boeing, Roll Royce have sent in their entries for the next month's biannual India air-show, which will be held at the old Hyderabad airport, Begumpet. It is a kind of a permanent venue for air-show. According to aviation analysts, the show is important as it will reveal private players’ physical health. The physical and financial health of the National Aviation Company of India (Air India and Indian combined entity) is far from robust. It is difficult to say what will be its role in the air-show. It is learnt that Airbus is the most enthusiastic about this show. It is sending its highly qualified technical experts. They will work in collaboration with officials of the DGCA and AAI so that operations of A-380, mammoth super-jet, are possible from the Begumpet. According to analysts, the length of the runway is not a problem, but width is. "We will take care of it so that smooth operations are possible" said one official. Judging from developments at Hyderabad, it seems it is all set to become a bigger player than it has been so far. As of now, it is far ahead of many other international airports except Delhi and Mumbai. The development of Kolkata airport is rather slow. There was time when it was the most important airport in the country. Somehow it has lost its importance and is not regaining it. |
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Investor Guidance
Q: The Senior Citizens Savings Scheme (SCSS) was introduced in 2004 and further amended in 2006.
Please inform if interest up to Rs 1,80,000 is exempted from income tax and also under which section. I wish to claim refund of tax paid on this amount. I joined the scheme as a VRS employee eligible even from 55 years onwards. — Vasudevan A: Interest under SCSS is not exempted from tax. In other words, it is fully taxable and also subject to TDS for interest over Rs 10,000. However, if your total income, including interest from SCSS, is below the maximum amount not chargeable to tax, then effectively the investment becomes tax-free. The maximum amount not chargeable to tax is Rs 1.50 lakh for non-senior male taxpayers and Rs 2.25 lakh for senior citizens. If you find that you are below the tax threshold, then you should file form 15G or 15H as the case may be and request for non deduction of tax at source. Setting off STCL
Q: My query is whether short-term capital loss (STCL) incurred in respect of equity & equity mutual fund unit transactions where STT is paid, can be set off against long-term capital gain (LTCG) of debt mutual fund units/gold exchange traded fund units in same financial year? If above mentioned STCL is carried forward in future (maximum for 8 years?) then can it be set off only against short-term capital gain (STCG) incurred in those years in respect of equity shares/equity mutual fund units (wherein STT is paid), and also against LTCG in respect of debt mutual fund units/gold ETF units? Please elaborate, because normally readers like me do not understand clearly if conditions/criteria are mentioned in a generalised way; if specific examples like I have requested above are given then we can confidently use the same in real life situations without any doubt. I hope you will do the needful at your earliest. — V.M.Shidhaye A:
You may set off short-term capital loss against taxable long-term capital gain or short-term capital gain. Therefore, STCL incurred in respect of equity & equity mutual fund units transactions where STT is paid, can be set off against long-term capital gain of debt mutual fund units/gold exchange traded fund units in same financial year. If above mentioned STCL is carried forward in future (maximum for 8 years) then it can be set off against either short-term capital gain (STCG) incurred in those years in respect of equity shares/equity mutual fund units (wherein STT is paid), and also against long-term capital gain (LTCG) in respect of debt mutual fund units/gold ETF units. Investment in FMPs
Q: I have a question related to investing in Fixed Maturity Plans (FMPs) that have gained popularity of late. Suppose an investor whose annual income is about Rs 6
lakh, has some capital gains of 4 lakh from sale of house property. He will have to pay capital gains tax thereon, and any additional funds which he has, if invested in FDs will lead to his income crossing the 10 lakh limit and he will have to pay surcharge on income tax @10%. However , if this money is invested in FMP with maturity over one year, the capital appreciation will be only for the next year, where his tax liability will be lesser (as in that year there is no major capital gains from sale of property). Kindly confirm whether my interpretation is correct. — Ramdas A: Yes, your interpretation is correct. In the example stated by you, the FMP enables the investor to defer the tax on the appreciation to the next year thereby escaping the surcharge that otherwise would have been payable. LTCG from MFs
Q: I would like to know can long-term capital gain (LTCG) from non-equity MFs be set off against long-term capital loss (LTCL) from shares on which STT has been paid? — Suresh Raheja A:
If the profit from a particular source is exempted, loss from the same source cannot be used for tax deduction or set-off. This is an off shoot of Sec. 14A of the Income Tax Act, which specifies that if an income is tax-free, then any expense incurred to earn such tax-free income cannot be tax deductible. Therefore, LTCL from shares on which STT has been paid may not be used for set off. The authors may be contacted at
wonderlandconsultants@yahoo.com |
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