New Delhi, December 7
India Inc today cheered the mega stimulus package announced by the government, saying the duty cuts and other sectoral incentives would help generate demand through lowering of prices for consumers and overseas markets.

As an immediate reaction to the package conceived by Prime Minister Manmohan Singh, who is also holding finance portfolio, major auto companies, including the market leader Maruti, announced to cut prices by 4 per cent to pass on the tax benefits to the customers.

The realty players, including DLF and Unitech, said the measures would have a good impact, particularly in the non-metros by way of a demand-boost for houses, but felt that the package for home loans by banks should have been for borrowings up to Rs 50 lakh instead of the prescribed limit of Rs 20 lakh.

The apex chambers of commerce and industry, however, felt that incentives for the infrastructure projects as also the auto sector, should have been more.

FICCI’s secretary general Amit Mitra said: “The package has enough punch to restart the overall economic activity through its massive Rs 3,00,000 crore in balance four months of the fiscal. It also seeks to create additional demand through a cut in Cenvat. It has taken a number of steps to support exports in the face of sagging global demand.”

“The most important point is proper usage of the stimulus package,” CII director-general Chandrajit Bannerjee said.

Unsatisfied by ‘Rs 20,000 crore emergent package’, Assocham president Sajjan Jindal said: “The industry was anticipating the demand booster package of Rs 70,000 crore” and hoped that the government would take more drastic measures to create the demand and ensure the economy bounces back to its previous growth speed.

Auto major Maruti Suzuki chairman R.C Bhargava said: “A 4 per cent reduction in Cenvat means every product will come down by 4 per cent... as per my understanding all car prices are likely to come down by 4 per cent.”

While, M&M president (automotive sector) Pawan Goenka said: “We will absolutely pass on the benefit from the excise duty (Cenvat) cut with immediate effect... This will certainly help in increasing the demand...”

However, he said, it was little disappointing that the stimulus package had not addressed the specific issue of availability of funds in the auto sector.

Steel manufacturer Ispat Industries welcomed the move saying it will enable
Indian iron ore companies export more, while JSW steel saw the step against
the industry’s interest.

“It is a welcome move. Iron ore demand is shrinking in the domestic market. The industry would now be able to export more of their output. In the long run, if the move hits our interest, we will approach the government,” Ispat Industries vice-chairman and managing director Vinod Mittal said.

JSW Group CFO Seshagiri Rao said: “I think the move will hurt the steel industry as iron ore prices will increase with the changes in the duty structure. It will be interesting to see by what percentage iron ore exports increase with the step.”

Suggesting upper limit for home loans in the range of Rs 30-50 lakh, realty sectors said the package would bring growth momentum to the economy.

DLF Group executive director Rajeev Talwar said the upper limit for home loans should have been fixed at Rs 45-50 lakh, while Unitech managing director Sanjay Chandra suggested Rs 30 lakh limit.

Parsvnath Developers chairman Pradeep Jain, however, said: “It’s an eyewash. It is not going to spur demand”, while Omaxe called the package “disappointing”. — PTI

New Delhi, December 7
The US, the UK and even China put a number to the stimulus package to boost their economies, but India chose to describe it in words than numbers.

“It’s just a very good stimulus package, if you want one word for it,” Planning Commission deputy chairman Montek Singh Ahluwalia told reporters today, while declining to quantify the size of it.

The package has been cobbled together with some public expenditure, channelising of bank spending and reduction in excise duty.

Assigning one number is not the right way to look at it, said Ahluwalia, who was deputed by the Prime Minister to brief the media about the details of the package that provides for an additional plan expenditure of up to Rs 20,000 crore ($4 billion), among other things.

It also includes Rs 350 crore additional funds for export incentives, forgoing of revenue of up to Rs 8,700 crore by way of across the board 4 per cent cut in excise duty and Rs 1,400 crore for textile sector under TUF Scheme, elimination of import duty on Naphtha for power sector and export duty on iron ore fines.

“This is an important issue... I am not trying to hide anything,” Ahluwalia said. US has so far declared $7 trillion worth bailout efforts, the Europe over 1 trillion and China announced $586 billion booster. Globally, the packages that have been announced tops $10 trillion. — PTI

New Delhi, December 7
The government appeared confident that the stimulus package would ensure an economic growth rate of 7 per cent, as the across-the-board 4 per cent excise duty cut, additional expenditure of Rs 20,000 crore and measures taken by the RBI would boost demand for industrial goods.

“Seven per cent growth rate is quite feasible...7 per cent would be a good performance,” Planning Commission deputy chairman Montek Singh Ahluwalia said, while announcing the stimulus package here.

Indian economy grew by 9 per cent in 2007-08 and, according to estimates of various think tanks and the Reserve Bank, is estimated to slowdown in the current fiscal mainly on account of the fallout of the global financial meltdown which has pushed economies of several developed nations into recession.

The stimulus package, which was approved by Prime Minister Manmohan Singh, is aimed at boosting the growth by cutting taxes, increasing public expenditure and ensuring flow of credit to infrastructure, construction and housing sectors.

“The package will minimise the impact of weak global economy on the Indian economy,” Ahluwalia said, adding that the government would constantly monitor the situation and would come out with more steps if necessary.

The Reserve Bank, he added, has already taken a serious of monetary measures to ease credit flow and reduce cost of credit to several sectors of the economy, including housing, small and medium enterprises and exports, which are reeling under the impact of the slowdown.

The government, he added, would also prompt the public sector enterprises to 
lear the dues to small and medium enterprises to ease credit crunch being faced
by them. — PTI

New York, December 7
Blame it on the worsening financial turmoil that today Uncle Sam is worried not just for his present but for the future as well, with most Americans deferring their retirement plans at least by a year or so.

However, surprisingly, despite the uncertainty staring in their face, a lot of them are yet to change the way they have been traditionally saving or investing for future.

A recent Bank of America retirement savings survey showed about 43 per cent of people in US are planning to work for more years than they expected a year ago.

“In the light of the recent economic turbulence, many Americans (43 per cent) believe they now face more years in the workforce than they expected to one year ago,” said the Bank of America survey.

According to the survey, which had participation of 1,000 people, over one-third (nearly 36 per cent) of affluent respondents pointed out that the current economic conditions had pushed back their expected retirement age.

Affluent Americans are described as individuals with investable assets between $100,000 and $3 million.

Ironically, despite the ravaging market conditions, more than two-thirds (68 per cent) of respondents have not changed the way they save, invest or manage their retirement assets in the last three months, the survey found.

The worst affected community would be the “Baby Boomers” or those approaching
retirement who may not have time to recover the financial losses incurred in the
recent months.

Going by the survey findings, 62 per cent of the general public and about half (44 per cent) the affluent individuals are either behind the schedule or have not commenced their retirement planning at all. — PTI

New Delhi, December 7
Riding on the back of 100 per cent growth in new business, Reliance Life Insurance expects the first premium income to cross milestone figure of $1-billion mark by the end of the current fiscal.

“We expect 100 per cent growth in the new business premium during the current fiscal," Reliance Life Insurance CEO P. Nandagopal said.

Given the growth expectation, the new business premium of the company would be about Rs 5,500 crore (over $1 billion) at the end of March 2009. — PTI

There is no threshold limit and the tax is deductible even if the interest earned is a
meagre amount.

In case the Indo-U.K. treaty for avoidance of total taxation prescribes the lower rate of deduction of tax at source, the same would become applicable instead of the higher slab rate of 30 per cent plus applicable surcharge.

In case the interest income exceeds Rs 10 lakh, the surcharge at the rate of 10 per cent on the slab rate would also become applicable for deduction of tax at source.

You can, however, approach the assessing officer under Section 195(3) of the Act by making an application in the prescribed form for grant of a certificate authorising you to receive interest without deduction of tax at source.

If such certificate is issued, the bank on the basis of such a certificate would not deduct the tax at source so long as the certificate is in force.

The issuance of the certificate is subject to rules which may be notified by the CBDT in this regard.