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PM’s panel pegs growth at 7 per cent
US budget deficit swells
Aviation Notes |
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Investor Guidance
Taj in Jalandhar
Two more US banks fail
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PM’s panel pegs growth at 7 per cent
New Delhi, November 8 "My gut feeling is that it (economic growth rate) may come down to 7 per cent...we will take another look in January taking into account the data which are coming," Tendulkar told reporters at the sidelines of a meeting called by the Planning Commission to review the implications of global economic slowdown. The PMEAC in August had forecast a gross domestic product (GDP) growth of 7.7 per cent. There are some positive and some negative developments which will have implications on India's economic growth, he said, adding, "one or two decimal points above and below 7 per cent should not be a worry". The Reserve Bank of India in its latest policy review on October 24 projected a GDP growth of 7.5-8 per cent, while finance minister P Chidambaram recently expressed the optimism that economy would grow by 8 per cent despite global crisis. The International Monetary Fund (IMF) in its latest World Economic Outlook update released two days ago has projected a growth rate of 7.8 per cent for India, down by 0.1 per cent from its earlier forecast in October. "Seven per cent growth should not worry us. We will still be recording second highest growth rate in the world (after China)," Tendulkar said. Prime Minister Manmohan Singh in his recent interaction with captains of India Inc had said that "a crisis of this magnitude was bound to affect our economy and it has". India has recorded an economic growth of 9 per cent in 2007-08 and was projected to grow at an average of 8.3 per cent during the Eleventh Plan period.
— PTI |
Washington, November 8 By some estimates, the deficit could even double from the record $455 billion posted last month, after the costs of the bailout, additional stimulus legislation, and the impact of slumping revenues are factored in. For its part, CBO counts the bailout cost so far at $17 billion, which represents the "present value" of the money. Basically, that accounts for market risk and represents the amount this portion of the bailout will cost the government in the end after it recoups its investment in bank stocks. The new estimate comes as most economists say the economy is in a recession that could become the deepest in decades. It also puts the government on course to run a record deficit for the 2009 budget year, which began October 1. Ominously, income and payroll tax revenues for the month fell compared to October 2007. Corporate income tax receipts fell by $5 billion. Outside of the spending for the bailout, the deficit rose by $60 billion over last year, CBO predicts. But once the bailout is included, the deficit swells by $175 billion under Treasury's accounting methods. — AP
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Zero commission to agents: Are airlines clean?
by K.R. Wadhwaney The so far serene air travel market has hit a dark cloud of uncertainty and murkiness. This abnormal situation has arisen as 14 airlines, in an effort to keep afloat amidst rising costs, have done away with commission to agents from November 1, 2008. Several other airlines, foreign and Indian, continue to pay five per cent commission to the agents, as before. They say that they are studying the vex situation and, if satisfied, they will induct the system of zero commission from December 1. A few have deferred the decision to January 2009. Are airlines clean? Many of them are not. Three Indian carriers, for example, are adhering to dubious doings. They have issued ‘transaction fee tariffs’ for agents to charge fee from passengers. They insist that the amount should be mentioned on the tickets issued by the agents. But they have quietly assured the agents that this amount along with ‘over-ride commission’ will be returned to them within a month. The airlines and federations have, however, begun negotiating with each other so that an alternative formula may be brought into play for the satisfaction of all parties involved in the trade. The talks have so far been inconclusive. The country is plagued with all types of agents — scrupulous, unethical and opportunists. Taking advantage of the vex scenario, some popular airlines and agents have formed a clique to throw the trade into further turmoil. Such airlines are subtly and secretly paying hefty sums to agents as ‘over-head commission’ and agents are also debiting the amount to passengers. The analysts say that this syndicate is far more disturbing than betting and match-fixing scandal in cricket. The travel trade has plunged into a pit of despair with the authorities not showing their teeth. In the topsy-turvy trade, the passengers are the losers. Apart from tossing about from one agent to another, they have to shell out, more or less, money depending upon their bargaining capacity. According to veteran analysts, the uncertainty has resurfaced, as was the case in 1970s and 1980s. Those were the days when Aero-float, for example, was forbidden from selling tickets in India but it was openly uplifting passengers from every part of the country. Its functioning was simple. The ticket was shown as issued in Moscow. The first coupon Moscow-Delhi was uplifted before handing over the document to the passenger. The fare of this ticket, say, from Delhi to London was lesser than the fare charged by other carriers. Again, in 1980s, there were three fares in operation. They were: (1) IATA, (2) bilateral and (3) DGCA-fares. Similar kind of scenario is developing. The average passenger will not know what is a legitimate fare and what is not. A tiny group of agents, who have no reputation to lose, are making hay while the sun shines. It is not understood why federation bosses do not black-ball such agents, who are bringing disrepute to the already disturbed trade. Surprisingly, IATA, which was once a throbbing body, has turned into a paper-tiger. The aviation analysts are baffled as to why airlines have dragged their feet in determining transaction fee for agents. Their domain is to stipulate basic fares and taxes; the service provider agents should be left alone to charge their fees depending upon the quality of service they provide. The transparency in the trade will return if the airlines mind their own business instead of stipulating transaction fee for agents, who are autonomous in their functioning. When they are not paying for services rendered, why should they formulate rules and norms? Therein lies ‘the catch’ for manipulation.
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No penalty on filing IT return till March
by A.N. Shanbhag Q: I was abroad for some time and hence missed the date for filing of tax return. Now what are my options? Can I file a tax return now? If so, would there be any penalty or fine payable? — Avinash Choudhari A: For FY 07-08, you may file a tax return till 31st of March 2009 without having to pay any penalty. However, if any tax were payable by you, interest @1% pm will be payable from 31st of March 2008 onwards, till uch time that you actually pay the tax. Tax on arrears
Q: I am a central government servant and I have read your article on availing of tax benefits on arrears under Section 89(1) of the Income Tax Act. In the said article, you have explained the instance where the employee receives the arrears of the past period in one instalment. However, I request you to guide me, as to the calculation to be adopted where the arrears for the period from 01.01.2006 to 31.08.2008 would be disbursed in two instalments, which is the case in the disbursement of arrears in the Sixth Pay Commission. — Ravinathan A: In the article, though the example was for only one year of arrears, the treatment for multiple years (which is on similar lines) was discussed. You will need information for which year or years is the first instalment of arrears is being paid for. Then you will need to do the following calculations. For current year, calculate the tax payable after including the arrears and without including the arrears. The difference is the extra tax that you are paying on account of receiving the arrears. Next, calculate the tax payable with and without the arrears for each year for which you are receiving the arrears. The difference is the extra tax that you ought to have paid had you received the arrears, not as arrears but as regular pay. You need to subtract the aggregate of the extra tax that you ought to have paid from the extra tax that you are paying this year. Any positive difference is the Sec. 89(1) deduction, a negative difference means that you cannot avail of any deduction. Growth option in MFs
Q: Please advise me when investing in a mutual fund should I opt for growth or dividend option. I always opt for dividend option. But lot of brokers insist to opt for growth option as returns are higher in this than dividend option. — Kunal Kumar A:
Returns for growth and dividend options are not different as the dividend is assumed to be reinvested in the scheme. Therefore, you will find whenever the returns for any particular fund are published, there is only one figure and not different ones for growth and dividend options. However, in practice, due to market conditions or even lethargy on the part of the investor, the dividend stays in the bank and doesn’t get reinvested immediately. Plus if the investors were to reinvest the dividend back in another equity fund, it amounts to reinvestment in the same asset class. Therefore, in our opinion, the growth option works the best. The authors may be contacted at wonderlandconsultants@yahoo.com |
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Taj in Jalandhar
Jalandhar, November 8 The Taj group has also signed a memorandum of understanding (MoU) with Lally Group of Companies, a Jalandhar-based company, for the project. The first-ever hotel by the Taj group in Punjab would consist of about 200 rooms that would have state-of-the-art facilities. Talking to The Tribune, Saravdeep Singh Lally, director, Lally Group of Companies, said the project would kick off in a couple of months and would be completed within two years.
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New York, November 8 Texas-based Prosperity Bank agreed to assume the $3.7 billion in deposit held by the failed Houston- based Franklin Bank and purchase $850 million in assets, leaving the Federal Deposit Insurance Crop to dispose off remaining $4.25 billion, the Wall Street Journal reported. The other bank, Los Angeles- based Security Pacific Bank's $450 million deposits were assumed by Los Angeles-based Pacific Western Bank. The cost to insurance fund is estimated at $210 million, the paper said. — PTI
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Just one month into the fiscal year, the US federal budget deficit already has reached $232 billion, according to estimates released today.
That is how the deficit would look as measured by the Treasury Department, the rival Congressional Budget Office said.
