|
|
|
|
India to get away lightly: Plan panel
‘Worst of financial
crisis yet to come’
Jet proposes 5-10 per cent salary cut
22 US banks collapsed this year
|
|
Govt to inject Rs 75,000 cr in housing, infrastructure
‘JLR in secret talks with UK govt for £1b loan’
ArcelorMittal warns of layoffs in US
ADAG enters online retail biz
Tata Motors to shut Jamshedpur plant for 5 more days
Tax Advice
|
|
India to get away lightly: Plan panel
New Delhi, November 23 “The international situation has changed ...India could get away lightly due to its limited exposure in the international market,” the Commission said in its recent analysis on the impact of global financial crisis on India. Pointing out that India is not immune from the happenings in the international arena, it said: “If there is a decline in the capital inflow, as a result of the foreign investors’ need for liquidity, the stock markets would get affected.” The domestic investors might also face difficulties in raising capital, the Commission said without giving any revised economic growth projections for the current fiscal. Noting that experts have projected economic growth between 7-8.7 per cent for 2008-09, the Commission said: “Under such a situation, relying on one or the other estimate would particularly be risky.” While the Institute of Economic Growth has projected a GDP growth of 7 per cent, the Centre for Monitoring Indian Economy has pegged the growth at 8.7 per cent. The forecast growth rates for 2008-09 “has considerably been influenced by the recent crisis in the western economies of the developed world, triggered mainly by the meltdown in the Wall Street,” it said. As per the Planning Commission, the growth rate of the India for 2008-09 would continue to be one of the highest in the world. The Indian economy, during the past five years ending 2007-08, has recorded a growth rate of 8.8 per cent. “This is the highest average for the medium-term growth realised in the country so far,” it added. Noting that the growth rate realised in the agriculture sector is also greater than the target set for the 11th Plan, the Commission said: “The growth rate realised in the industry and the services sector are high and match the expectations of a fast expanding economy.” The 11th Plan set a growth target of 9 per cent and reached 10 per cent by the terminal year. Although the growth rate during 2007-08, the first year of the 11th Plan, was at 9 per cent, the international events overtook other considerations and the growth rate in the current year is likely to slip. With the international recession continuing well into the next year, it may become difficult for the country to register a high growth rate.
— PTI |
|
‘Worst of financial
crisis yet to come’
Zürich: The IMF’s chief economist has warned that the global financial crisis is set to worsen and that the situation will not improve until 2010.
Olivier Blanchard also warned that the institution does not have the funds to solve every economic problem. “The worst is yet to come,” Blanchard said in an interview yesterday, adding: “A lot of time is needed before the situation becomes normal”. He said economic growth would not kick in until 2010 and it will take another year before the global financial situation became normal again. The IMF had yesterday promised to help Latvia deal with its economic crisis after it assisted Iceland, Hungary, Ukraine, Serbia and Pakistan. But Blanchard said the IMF was not able to solve all financial issues, in particular problems of liquidity. The IMF had spent a fifth of its $250-billion fund in the last two weeks, Blanchard added. He also urged central banks around the world to cut interest rates, after the Swiss National Bank made a surprise one percentage point rate cut on Thursday.
— AFP |
|
Jet proposes 5-10 per cent salary cut New Delhi, November 23 Sources said while the top management could take a 25 per cent cut in salary, the airlines management is said to have suggested a 10 per cent slash in pay packets of junior pilots and a 20 per cent cut for senior pilots. Employees earning up to Rs 5 lakh a month are likely to face a deduction of 5 per cent while those earning more than Rs 5 lakh may face a deduction of 10 per cent. The pay cut would not affect employees earning less than Rs 75,000 per month. Jet had set up a five-member member team to explore cost-cutting measures. The company will also lease out nine aircraft, reduce hotel and entertainment allowances and scrap training allowance for pilots, in the tide-over exercise. Sources, however, said the management appeared to be unable to convince its domestic pilots to accept salary cuts ranging from 10 to 20 per cent. The pilots suggested that the airlines should do away with the expatriate pilots as they were a "huge burden" on the airlines because of their high salary packages. In October, the airline sacked 1,900 employees but was forced to take them back because of a national uproar. The aviation industry is facing a financial because of falling passenger traffic, high fuel cost and a weak rupee. The combined loss of the Indian aviation industry is currently estimated to be Rs 4,000 crore and likely to increase to Rs 10,000 crore this financial year.
|
|
22 US banks collapsed this year
New York, November 23 On Friday, three US banks collapsed with two of them being in California and the third one in Georgia. The two California banks, which were shut down on Friday, are Downey Savings and Loan of Newport Beach and PFF Bank and Trust of Pomona. The $12.78 billion Downey, The Wall Street Journal, said is the third largest bank to fall this year. Topping the list is $307 billion Washington Mutual. In Georgia the Community Bank of Loganville closed down. With little signs of improvement, The Wall Street Journal said regulators expected more failures during the remaining part of this year and next year as “rotting real estates and other loans continue to weigh down bank balance sheets”. The deposits and some of the assets of the two collapsed Californian banks were bought by US Bancorp, which now has emerged as one of the strongest US banks during the current financial turmoil. Bank of Essex from Virginia acquired deposits and assets of the Georgian bank. Among other banks, which collapsed this year include Franklin Bank (Houston), Security Pacific Bank (Los Angeles), Freedom Bank (Florida), Silver State Bank (Nevada), Columbian Bank and Trust (Kansas), First Priority Bank (Florida), First National Bank of Nevada, ANB Financial (Arkansas), IndyMac Bank (California). The largest number of bank collapse has been reported from California. Collapse of such a large number of US banks, despite a $700-billion bailout package reflects the deep turmoil of the US economy.
— IANS |
|
Govt to inject Rs 75,000 cr in housing, infrastructure
New Delhi, November 23 This money raised through leveraging will be infused in National Housing Development Board
(NHB), Small Industries Development Board of India (SIDBI) and the newly created India Infrastructure Finance Company
(IIFCL). Funds through these institutions will be available at the rate of 7-9 per cent per annum, which is much less than the prime lending rate of 13-17 per cent for this sector, say finance ministry officials. The announcement to this effect will be around the end of the month, officials added. According to the proposal, home seekers will get a loan at around 7 per cent from
NHB, Infrastructure companies can get loan at 9 per cent from IIFCL and small entrepreneurs can get a loan at 7-8 per cent from
SIDBI. The money from leveraging will include infusion of additional equity capital of Rs 1,000 crore in
IIFCL. This capital infusion will give more liquidity to the company to advance to the cash strapped infrastructure sector. Earlier, the RBI had reduced the risk weightage on loans for the commercial real estate sector so that the banks, who were wary of advancing loans to this sector, could make rapid advances. However, the banks still see real estate as a high risk sector and will only make fresh advances once the previous dues and advances made to this sector are cleared, sources say. The government had already announced that it will spend Rs 50,000 crore on infrastructure sector through the private-public partnership. Sources say this is an attempt by the government to fuel the economy and keep the growth momentum of 7.5-8 per cent. However, there are no clear answers yet whether such a move will keep the economy chugging along the growth path and how much of capital infusion is really enough in the given set of uncertain circumstance, add sources. The only relief is the inflation that is coming down gradually and is likely to fall further if the prices of fuel are cut within the next few days. On the other side, the exports have fallen by 15 per cent despite the rupee falling nearly 20 per cent this fiscal. |
||
|
‘JLR in secret talks with UK govt for £1b loan’
London, November 23 Quoting an unnamed government official, ‘The Sunday Times’ said British Prime Minister Gordon Brown was studying the request and an answer could be made in the next fortnight. According to the report, JLR chief executive David Smith has made a direct plea to the government for cash. He believes that with help being given to carmakers in the continent and in the US, Britain has a good case for financial
aid.
At the same time, the Society of Motor Manufacturers and Traders, which is representing the interests of the wider British industry, is seeking a state aid of £2-3 billion. Tatas are looking to the government for a bridging loan to help tide over the next two years, a period where the industry will come under further financial pressure and during this time it will be difficult to access funding markets, the report said. The component suppliers to the automotive industry are also in difficulties, many of them already facing issues with credit insurance. The report further said the talks happen at a time when Tatas, one of India’s most successful companies, is also facing financial issues. “It paid $11.3 billion 22 months ago for steel maker Corus and since then the metal price has collapsed,” the daily said. Similarly, shares in Tata Consulting Services, Tata group’s American-listed IT business, have also tumbled, as have shares in Tata Motors, the report said. According to the daily, Ratan Tata, chairman of the group, has put on hold further acquisitions amid difficulty in raising bank finance and in the face of the economic slowdown. The request demonstrates the sharp downturn in the global car market, which has already pushed a handful of the big car manufacturers to the edge of bankruptcy, it said. Last week, Honda announced it is to close its Swindon factory for two months next year. Toyota has also cut shifts at its UK plants, and Bentley, the luxury carmaker majority-owned by Volkswagen of Germany, has cut shifts at its plant in Crewe. Despite success with its new Jaguar XF sedan model - particularly in the US - JLR is facing similar issues. The group needs to slow production in order to sell a backlog of vehicles that have already come off the production line, The Sunday Times said. — PTI
|
|
ArcelorMittal warns of layoffs in US
Burns Harbor (Indiana), November 23 The company announced that it had notified the United Steelworkers labour union and other interested parties about the possibility of an "indefinite layoff" at its Burns Harbor plant in the second half of January. The recent drop-off in global steel production and the company's previously announced plan to reduce production in North America by 40 per cent factored into the decision, the company said. "Potential work force reductions are a direct result of the extraordinary economic environment we are facing, and the company hopes to return workers to their jobs as market conditions warrant," ArcelorMittal said in a statement. Luxembourg-based ArcelorMittal, which operates 21 plants in the US, employs more than 320,000 persons in over 60 countries.
— AP |
|
ADAG enters online retail biz
New Delhi, November 23 Under the banner of the group’s financial products distribution unit Reliance Money, the new venture would make available a wide variety of products for e-shopping, ranging from financial products like IPOs, mutual funds, insurance policies and gold coins to items like apparel, accessories, books, magazines, CDs, DVDs, home appliances and even flowers. Asserting that the company was targeting at least 20 per cent market share for the new venture, Reliance Money CEO Sudip Bandyopadhyay said the aim is to grab the top position in less than a year. “We are looking at a market share of at least 20 per cent in this market with business worth over Rs 20,000 crore a year,” he added. Besides a wide range of products, Bandyopadhyay said, the new portal would also provide 15-20 per cent lower price than other avenues.
— PTI |
|
Tata Motors to shut Jamshedpur plant for 5 more days
Jamshedpur, November 23 Confirming the development, company spokesperson P.J Singh said there has been a drop in demand across the industry due to unavailability of finance and high interest rate and this called for appropriate actions from time to time to match production with demand. The plant had remained shut earlier for three days from November 6-8 for the same reasons. In fact, it was shut for five days as November 5 and November 9 were weekly holidays for the company. The statement also said the decision to keep the plant shut was to avoid unnecessary build-up of inventories in the company or with the dealers.
— PTI |
|
LTC from ex-employer not taxable
by S.C. Vasudeva Q I was in employment recently and have retired on March 31, 2008. However, as per the scheme of the company in which I was working, I am entitled to a leave travel concession (LTC) even after the retirement. Would the amount of such travel expenses reimbursed be exempt from tax? — R.P. Arora A Value of LTC in India is exempt under Section 10(5) of the Income-Tax Act, 1961, (the Act) even in case a journey is performed by a retired employee. The amount of exemption is limited to the amount actually incurred for the purpose of such travel and is received from a former employer for assessee and his family in connection with this proceeding to any place in India. Family includes the spouse and children of the individual, the parents, brothers and sisters of the individual who are wholly or mainly dependent on him. In case the journey is performed by air the exemption is limited to the amount of economy class air fare of the national carrier by the shortest route or the amount spent, whichever is less. In case it is performed by rail, it is limited to the amount of air-conditioned first class rail fare by the shortest route or amount spent, whichever is less. The exemption on the aforesaid basis is available in respect of two journeys performed in a block of four calendar years commencing from 1986. Medical reimbursement Q
I am a retired bank employee, of 63 years of age. I am suffering from hearing impairment (thus eligible to deduction under Section 80U). I request you to reply to my queries. 1. How much in respect of medical reimbursement is exempted from income tax? 2. My gross annual income comprising of pension and interest is about Rs 2,25,000, which after taking deductions under Section 80C, 80U comes down to Rs 1,25,000/- i.e. within threshold limit of Rs 1,50,000 for non senior citizen. As such, may I apply for non deduction of TDS on interest — POI bank etc. If yes, which form is required to be filled 15G or 15H. If not, can I get the interest cheque in favour of my wife (housewife) (having income not above Rs 20,000) for credited in joint account with me. The investment was made out of my own savings (retirement benefits). Please clarify and advise the way to avoid TDS. — S. Kumar Jain, Ludhiana A The answer to your queries is as under: (i) The medical reimbursement is exempt in case of salaried employees to the extent of Rs 15,000. No such exemption is available in case of people who are not in service. (ii) In case, your income from interest on securities or interest other than interest on securities does not exceed the maximum amount which is not chargeable to Income-tax, you may file form no. 15G for the purpose of getting exemption from the deduction of tax at source. PPF account Q My two minor grand daughters (Daughter’s daughters) are having their PPF account under the guardianship of their father, who is an income tax payee. As their grandfather I had also been depositing in their PPF account a sum of Rs 30,000 every year out of my taxable income as “gift” through cheque without claiming any rebate under Section 80C. I feel that amount gifted by me alongwith the interest earned thereon will be the property of the daughters concerned as soon as they become major. Kindly confirm and also advise about the tax liability, if any. — Ajit Singh, Panchkula A
The answer to your queries is as under: (i) The amount deposited in the PPF account of a minor will become his/her property as and when he/she attains majority. (ii) There would be no tax liability according to the present provisions of the Act in respect of the interest earned on PPF account of a minor. The PPF amount as well as interest thereon would be a capital receipt after such minors attain majority. Revised return Q During financial year 2007-08, I have received arrears of pension (under the lable of domestic help allowance) for the period from November 1999 to March 31, 2007. If I file revised IT returns for four of these years viz. 2000-01, 2001-02, 2005-06 and 2006-07, and treat the remaining amount as “receipts” during F.Y. 2007-08, that course will be most beneficial to me. But my adviser friend says this course is not permissible. He says either revised returns should be filed for all the eight years or the entire amount should be treated as income in 2007-08 (F.Y.). — Ram Saran Bhatia, Faridabad A You would not be able to file the revised returns for the years in respect of which you have received the arrears of pensions as revised return can be filed within one year of the end of the assessment year. For example, the revised return for the financial year 2006-07 can be filed upto March 31, 2009. It will, therefore, be advisable to include the entire income in the year of receipt and seek the relief under Section 89 of the Act. |
|
| HOME PAGE | |
Punjab | Haryana | Jammu & Kashmir |
Himachal Pradesh | Regional Briefs |
Nation | Opinions | | Business | Sports | World | Letters | Chandigarh | Ludhiana | Delhi | | Calendar | Weather | Archive | Subscribe | Suggestion | E-mail | |
India would get away lightly with the global financial meltdown that has pushed the economies of the developed world into a recession, according to the Planning Commission.
