New Delhi, October 18
Considering that the move by Jet Airways to retrench its employees had ended in furious protests and rebukes from all quarters, Vijay Mallya-promoted Kingfisher Airlines on Saturday decided to go in for a much safer option by slashing salaries of its trainee pilots.

Pilots, incidentally, are among the highest paid in the sector and till lately the sought-after professionals considering dearth of trained pilots in India.

An official from the airline said salaries of the trainee pilots had been slashed
significantly as part of cost-cutting initiatives. He, however, did not give the
quantum of the cut.

Line pilots and commanders of flights were exempted from this move, he said,
adding that the airline had to resort to this move as some of its aircraft had
been grounded.

An official statement from the UB Group stated that “with a view to tiding over the ongoing turbulence in the aviation industry and keeping in mind the capacity deployed, Kingfisher Airlines has effected a downward revision in the emoluments of a small pool of 50 trainee co-pilots.”

These trainee co-pilots would continue to remain on the pay roll of the company and would enjoy and avail full benefits and privileges that are available to employees of the company, including medical benefits, travel privileges and the like, the statement by Prakash Mirpuri from the UB Group added.

Airlines are finding ways to cut costs in order to survive in the face of grave financial mess that currently are in.

Officials say leading airlines may also ask its top management personnel to take pay cuts, hoping that those in lower rungs will follow suit voluntarily.

New York, October 18
US President George W. Bush will meet European leaders to pave the way for an overhaul of the global financial regulatory system, amid growing evidence the world is sliding towards recession.

The White House has played down expectations for the meeting at the US Camp David presidential retreat between French President Nicolas Sarkozy, European Commission president Jose Manuel Barroso, and Bush.

Economic gloom was foreshadowed by US consumer confidence and new-home construction plummeting in recent weeks, with US stock indexes ending down on Friday despite better-than-expected earnings in the technology sector.

Interbank lending rates fell this week for the first time since July, providing some hope that the worst of the global banking crisis may have passed, but stock markets around the world remained volatile, weighed down by recession fears.

European shares ended higher and oil rose $2 a barrel, but a rise in the US dollar was a sign of investors seeking safety.

Among benchmark U.S. stock indexes the Dow Jones Industrial Average ended down 127 points or 1.41 per cent after trading in a 560 point range. The S&P500 index ended down 0.62 per cent.

Adding to the gloom about the US economy, a senior Federal Reserve policy
maker said the jump in the US jobless rate suggested the economy would
probably slip into recession.

Intervention by governments in the United States and Europe in the past week needed time to work, Bush said on Friday.

''Our European partners are taking bold steps. They show the world that we're determined to overcome this challenge together. And they have the full support of the United States,'' Bush said in a speech at the US Chamber of Commerce.

Bush, who leaves office in January after a November 4 election, said he would continue ''close consultations'' with European leaders at the meeting.

But he did not specifically mention calls by European leaders to reform the
financial system that the world has been operating under since 1944, and
White House spokeswoman Dana Perino said the US focus was on the immediate
crisis. — Reuters

New Delhi, October 18
There appears to be some respite in store for bleeding airlines of the country. The government may consider a cut in cost of aviation turbine fuel (ATF) to bail out the airlines of the turbulent air they are currently flying in.

That there is relief in store for the airlines has been hinted by petroleum minister Murli Deora, who said that an attempt at rationalising jet fuel prices could be worked out between ministries considering the recent drop in crude oil prices.

While civil aviation minister Praful Patel has been demanding rationalisation of ATF prices to save the aviation sector from slipping further in the red, other related departments of the government have not been so “co-operative” with the ministry to resolve problems of the industry.

Patel categorically rules out any bailout package for the sector but is actively campaigning for rationalisation of ATF prices not just by the centre but the states. “We must try to rationalise taxes. Oil companies must also co-operate,” he says.

ATF price in the country is 70 per cent higher than the international market and sales tax makes it more costly. High fuel prices are the main reason for the current crisis in aviation.

Patel has also been urging the states to come to the rescue of the industry as high sales tax levied by them added to the misery of airlines.

Airlines pay an 8 per cent excise duty on ATF in the country, besides a sales tax that varies from 20 per cent to 35 per cent depending upon the state.

Chandigarh, October 18
The slowdown in growth in the insurance sector and plunging bourses has forced leading private life insurer, ICICI Prudential, to introduce unique unit-linked insurance products (ULIPS).

Since ULIPs are linked to market conditions, ICICI Prudential is now all out to woo clients by guaranteeing first-year premium, and making investment in equity and debt, depending on the market condition and life of the customer.

Talking to TNS here yesterday, Puneet Nanda, executive vice-president and chief investment officer, ICICI Prudential Life Insurance, said though the company was still growing at a steady 39 per cent, there was a definite slowdown in growth.

“As compared to a growth of 65 per cent last year, the growth rate has dropped to 39 per cent. With the credit squeeze in the market, we have developed new products as part of our strategy to hold the customer’s confidence,” he said.

The company, which boasts of the largest market share amongst the private
insurers (13.7 per cent as stated by IRDA), has 90 per cent of its business
coming in through ULIPS. The assets under management in ULIPs is in excess
of Rs 30,000 crore.

“But our fund management policy is very conservative. It is thus that we
have launched these new products called LifeStage products and LifeStage
Assure,” he added.

With rumours about the stability of the ICICI Bank still doing the rounds, the insurance company is aiming at an effective proactive communication to reach out to the customer and assure him about the safety of their investments.

“We are contacting our customers through e-mails, SMSes, letters and holding private meetings,” he said.

He said with a renewal premium growth rate of 90 per cent (Rs 2,770 crore)
and total premium collection of Rs 5,460 crore, he was sure of the investors’
faith in the company.

Nanda said they were now working to capture a major chunk of the rural business.

“We are already quite strong in the rural areas and almost 20 per cent of the company’s business (in value terms) is from rural areas.

“More than 50 per cent of our 2,000 offices, and 50 per cent of our insurance agents are located in rural areas,” he said.

Chandigarh, October 18
Unhappy with various departments of Punjab government for failing to clear their dues, the Punjab Petroleum Dealers Association has threatened not to supply fuel to government vehicles on credit.

A decision to this effect was taken unanimously by the executive committee of the association, during a meeting held at Abohar this evening.

It was decided that the petroleum dealers in the state will not supply any fuel to the police vehicles, till their previous dues of about Rs 50 lakh are cleared.

Though the police vehicles in district headquarters get their supply from the petrol pumps managed by the police department, the police vehicles in the sub-divisions get their supply from any retail outlet.

The retail outlet owner gives the fuel and submits the bill to the area police station, which is subsequently cleared by the police authorities.

J.P. Khanna, president of Punjab Petroleum Dealers Association, informed TNS that for more than a year now, these bills have not been cleared.

“We were initially given assurances that the bills would be cleared. We thus devised a formula where retail outlets in each sub-division would provide fuel on a rotation basis, with each outlet providing fuel to police vehicles for a month. But with the mounting dues and the inability to get these cleared has forced us to take a decision to not provide fuel on credit basis, till our dues are cleared. If we are pressurised by the police to do us, we will close the retail outlets,” he said.

It was also decided that petroleum dealers would not supply fuel on credit to Punjab government vehicles during the forthcoming Parliamentary elections. Khanna said the Home Department owed Rs 18 lakh to petroleum dealers in Punjab.

Jet Airways and Kingfisher have strategically clapped their hands together to ‘weather financial and passenger-load storm’ only to provide further turbulence in the cabin of National Aviation Company (NAC).

Categorise the deal as ‘carterlisation’ leading to ‘a restrictive trade practice’, fares are likely to rise at least on domestic sectors.

The analysts predict that the shrewd and calculative move may change the dynamics of the market further.

The two operators have a market share of more than 60 per cent as against NAC’s less than 20 per cent.

The aviation, particularly airlines, analysts are unanimous that ‘this deal is bad news for the industry and consumers’.

They further say that the government should take immediate measures to
stop such a cartel.

Q: My son had earned income in dollars from his foreign company. He stayed beyond 182 days outside India. Thus he became an NRI. His income earned was kept in a foreign bank in dollars.

He then returned to India after 240 days for good. Now the question is whether the remittance transferred from his foreign bank account to his Indian savings account in the last year and current year in installment basis would attract any income tax?

Also clarify whether he can he declare this remittance of dollars {converted into rupee} as tax free salary income earned during the NRI period while filing his personal return for the last year as well as current year.
— S.A. Virani

A: The NRI status is obtained when a person does not spend 182 days or more
in India in any financial year (Apr-Mar). From the information provided, it is not
clear how many days did your son spend outside India in the current year and
last year respectively.