New Delhi, August 10
With the country’s exports still not showing any signs of picking up after posting a 30 per cent slump in the first quarter of 2009-10, the government is now reportedly considering a stimulus package to resuscitate the sector. After holding the first meeting of the advisory Board of Trade since the new government took over, Commerce & Industry Minister Anand Sharma said, “We’re in talks with the finance ministry on providing more sops for the exports sector and will announce them in the foreign trade policy later this month”. The policy is expected to be announced on August 26.

He added, “We hope after consultations with Finance Minister Pranab Mukherjee we’ll be able to provide more sops for exports, possibly in the new policy”.

On exporters’ concerns on the new emerging markets that the government is promoting, Sharma said “Indian missions abroad are there to assist and help exporters in case they need any help with buyer’s verification, letters of credit and other issues”.

The minister, who later met industry and trade association leaders as prelude to the new trade policy, said the government had received industry-specific suggestions. “Steps have already been taken, and more will be taken that will get clearly reflected in the new policy. The commerce ministry will respond to the immediate challenges”, he added.

Sharma said the foreign trade policy would include a “long-term vision for the exports sector, especially labour intensive segments that have seen a sharp business contraction since October 2008. The Board of Trade would now meet twice a year”.

“Apart from promotional schemes the government will also work on simplifying procedures for transacting foreign trade in a bid to save costs and time”, he added.

Among those who attended the three-hour long meeting were FICCI president Harsh Pati Singhania, CII president Venu Srinivasan, FIEO president A Sakthivel, Assocham president Sajjan Jindal, State Bank of India chief OP Bhatt as well as heads of different export promotion councils. Revenue secretary PV Bhide, foreign secretary Nirupama Rao, commerce secretary Rahul Khullar and director general of foreign trade RS Gujral were also present.

While exports are on downslide since October 2008, the dip is about 30 per cent in the first quarter of 2009-10.

New Delhi, August 10
The long-awaited income tax reforms in the form of a new IT Code will be unveiled by Finance Minister Pranab Mukherjee here on Wednesday.

The new IT Code, if accepted finally, will replace the Income Tax Act, 1961. It is likely to be sent to a select committee of Parliament before final acceptance.

Mukherjee proposes to launch the draft for getting the reaction from the Indian Revenue Service (IT) cadre officers as well as from the public.

Interestingly, many Members of the Central Board of Direct Taxes (CBDT) have reportedly not yet seen the draft copy of the new IT Code.

From tomorrow, a two-day conference of IT chief commissioners from all over the country will start here to assess the revenue collection situation and discuss suggestions. Even chief commissioners have not been shown the new IT Code draft.

So far, a senior IT official said, “the new IT Code has been treated like a classified document.”

It is learnt that the IT Code draft has been prepared by a group of officials whose names have, for strange reasons, kept secret. “We are wondering why this Code was kept under wraps when it is not a secret document like the Budget,” another IT official felt.

The office of the Finance Minister believes that the publication of the draft code will somewhat fulfil the promise of the previous UPA government made to taxpayers that this will provide a simplified tax law without the complex, legalities and provisions and complex construction of various sections.

The then Finance Minister, P. Chidambaram had assured even in his last Budget speech of 2008 that a discussion paper would be released soon for wider dissemination, calling for comments.

The promised 80-page document, however, never surfaced.

Top IT sources said there is no denying the fact that the present IT law, which has more than 2,000 sections/sub-sections require “some dieting as it has become too obese,” adding to its complex provisions formulated over four decades on the case laws pronounced by the Supreme Court and various high courts, running into more than 300 volumes of income tax reported cases.

In fact, tax reporting in itself has become a major industry as is the tax advisory work.

The irony is that the CBDT Members, who are expected to administer the new Code, did not have the glimpse of it.

“How simplified the Code is going to be we will see when it is implemented,” a senior official in the North Block said, pointing out that after all tax reforms, including the one formulated by the Raja J Chelliah committee reminded one of a product of imagination.”

According to him, the new IT law may lead to a fresh round of litigation as present law stands settled. “Sometime, law can’t be made too simple,” he felt.

Renowned economist Raja Chelliah Tax Reforms Committee worked between 1991 and 1993 under the then Finance Minister Dr Manmohan Singh, and set out a roadmap for reducing import duties, paving the way for liberalisation.

Ludhiana, August 10
Major industrialists of Punjab have observed that the “monopolistic” approach by the steel giants of the country was playing havoc with the industry-centric economy of the state.

The pillars of the state’s industry — cycle industry, automobile, and light engineering — are facing the brunt of high steel prices.

Even the Finance Minister and Competition Commission had confessed that the steel producers, with the support of the government, were working in “cartelised” manner.

Many feel that steel prices should be fixed as per demand and prices of raw material. When iron ore, coal and labour were available in the country at cheaper rates, the steel prices must not be fixed on import parity basis.

Steel producers have raised the price of hot rolled coils by Rs 1,000 a metric tonne. The current price of hot rolled coils of SAIL is Rs 34,000 per metric tonne.

Noting the present recession, president of Apex Chamber of Commerce and Industry PD Sharma said the price rise would dent the industry’s efforts to recover.

He observed that the prices of the inputs to manufacture steel had gone down. The price of coking coal had dropped from $400 to $160 per metric tonne. Iron ore had got cheaper from $140 to $60 per metric tonne. The international price of steel scrap had declined from $650 to $270. Consequently, the steel producers were reaping good profit margins.

He rued that steel producers were always on the lookout to create an artificial scarcity of steel. In the past, they used to export steel to create this illusion. But now as exports were hit badly due to recession, they have started operating on their lower production capacities.

According to the Indian National Steel Policy, the steel production in the country was expected to grow 7.3 per cent annually till 2020 and consumed at the rate of 6.9 per cent.

Another industrialist from Mandi Gobindgarh, Sanjay Bansal said: “The country has all inputs to manufacture steel indigenously. Our steel producers take the global price as a reference and then add other charges. Thus, we pay over $100 more for every tonne of steel as compared to the global price,” Bansal said.

The industrialists said steel producers had succeeded to put restrictions on hot rolled coil imports as the cost of imports was much lower.

“Logically, the steel ministry should had recommended the intended restrictions and Commerce and Finance ministry approved them. Instead, the restrictions were put by the Commerce Ministry in September 2008,” Sharma said.

New Delhi , August 8
Official apathy and political interference is pulling BSNL down and out of competition.

While it has already ceded its place as the country’s largest telecom operator to private sector telecom company Bharti Airtel in terms of revenue and profitability, lack of interest from the government has also led to BSNL running up thousands of crore worth of revenue arrears, majority of which may not even materialise.

According to statistics, BSNL's revenue arrears for 2007-08 have touched Rs 7,482.81 crore, out of which Rs 4,226 crore may or may not materialise.

As has been in the past, the biggest defaulters again are private customers, who under basic services owe as much as Rs 4,173.63 crore as on March 31, 2008.

Officials point out that all efforts to realise the arrears have faced tough opposition from the private customers. On the other hand, the government has not been much interested in helping the PSU get its due.

A tough stand from the government would force the private customers to pay up and help BSNL improve its revenue share.

Incidentally, last month the PSU came out with its financial results that reflected all was not well with it.

Its profits have nosedived more than 80 per cent and there is not much addition in its subscriber base. This is at a time when India is being considered as one of the fastest growing telecom markets in the world with more than 12 million subscribers being added every month to the existing numbers.

Net of BSNL has fallen sharply from Rs 7,806 crore in 2006-07 to just Rs 575 crore in 2008-09.

Profit of Rs 575 crore was posted on total revenue of Rs 35,811.92 crore, which again defying the market trends has fallen by over six per cent. Its revenues stood at over Rs 40,000 crore at the end of 2007 fiscal.

This is the second successive year that BSNL has witnessed a massive fall in profits. In contrast, all its main rivals — Airtel, Reliance, Vodafone, and Idea Cellular — saw significant growth in customer additions, profits and sales in 2008-09.

Officials point out that this will result in fall in BSNL’s valuation as it prepares for its first public share offering. The government is very keen in disinvesting some of the BSNL stake but has been facing stiff resistance from its employees unions.

Officials say the situation will only worsen if emergency steps are not undertaken now.

New Delhi, August 10
The Supreme Court today sought a response from the Adani Group of Companies, the Centre and others on a petition seeking to stall work at the former's Rs 7,400-crore multi-product Special Economic Zone in Gujarat.

A bench headed by Chief Justice K G Balakrishnan issued a notice to Adani, the ministries of Commerce and Environment and Forests, Mundra Ports and Special Economic Zone Ltd, Gujarat government, Gujarat Pollution Control Board and others and tagged the petition with another similar plea filed by the fishermen of Gujarat.

Mundra SEZ, established under the SEZ Act of 2005, is proposed to come up in about 6,000 acres of land.

Challenging the Gujarat High Court's interim order that rejected their prayer for staying the development activities at Mundra SEZ, the petition filed by seven fishermen has opposed the allotment of land which falls in the areas that come within the purview of the Coastal Regulation Zone.

It assailed the filling and construction activity in the Coastal Regulation Zone undertaken by the Adani group in the creeks situated in Mundra area of Kutch district.

According to the petitioners, the company, after allotment of an additional area of 2113.7962 hectare of land, had undertaken construction and development activity for the additional SEZ without obtaining prior environmental clearance as mandated by the Ministry of Environment and Forests' notification of September 14, 2006.

Giving details about the alleged constructions, the fishermen said the Adani Group had constructed an air strip and airport, residential township, roads and fencing and reclaimed water front area and filled up creeks, which was in violation of the notification. — PTI

New Delhi, August 10
Domestic passenger car sales increased by more than 30 per cent to stand at 1,15,067 units in July from 87,901 units in the same month last year with the sale of vehicles in all categories increasing by more than 20 per cent.

The car sales recorded an actual increase of 30.91 per cent.

According to figures released by the Society of Indian Automobile Manufacturers (SIAM) today, motorcycle sales in the country during the month was up 19.48 per cent at 5,46,245 units from 4,57,178 units in the corresponding month a year ago.

The total two-wheeler sales in July surged 20.07 per cent to 7,19,668 units compared to 5,99,369 units in the same period last year. After almost a year of continuous downslide, the sale of commercial vehicles also increased by 9.61 per cent in July to 37,624 units from 34,325 units in the year-ago period, SIAM said.

The total sales of all vehicles across categories also rose by 20.76 per cent to 9,41,118 units in July this year, against 7,79,354 units in the same month of last year, it added.

BRIEFLY

Honour for Airtel CEO
Chandigarh: Bharti Airtel has bagged top honours in the Voice and Data 100 survey, with its CEO Manoj Kohli being named the Telecom Person of the Year 2009. Airtel was named the Top Telecom Services Provider of the Year 2009. — TNS

MS to sell digital mktg agency
NEW YORK: Software giant Microsoft will sell its digital marketing agency, Razorfish, to French advertising major Publicis Groupe SA for an estimated $530 million. The cash and stock deal is expected to be completed by the fourth quarter of 2009, subject to regulatory approvals. Major clients of Razorfish include Ford, McDonald’s and Starwood Hotels. — PTI

RCom profit up 12%
MUMBAI: The Reliance Communications on Monday said its consolidated net profit rose by 11.91 per cent to Rs 6,044.93 crore for the year ended March 31, 2009, over the same period last year. Total income rose to Rs 22,948.45 crore during the latest financial year from Rs 19,067.76 crore in the same period ended March 2008, Reliance Communications said. — PTI

Gold, silver decline
NEW DELHI: Gold and silver tumbled on the bullion market here on Monday on frantic selling by stockists in line with weakening overseas front. While gold extended previous week’s losses by losing another Rs 95 at Rs 15,000 per ten gram, silver plunged by Rs 200 at Rs 23,050 per kg. — PTI

OIL public offer price
NEW DELHI: Oil India Ltd (OIL) may price its initial public offering (IPO) that opens on September 7 at Rs 1,000-1,100 a share. The price band will, however, be fixed by a Group of Ministers in the last week of August. — PTI