The Tribune, Chandigarh, India

	Bloodbath at Dalal Street Sensex down 627 Tribune News Service Mumbai, August 17 Concerns about the global economy and probable impact of weak monsoons on India hammered the markets today. The BSE Sensex fell 627 points to close at 14,784 while in the broader markets the Nifty fell 192 points to close at 4,388 points. All Sensex stocks were in the red with ICICI Bank closing 5 per cent lower and Reliance down 4 per cent. Among the worst performers were realty, metal and auto stocks. The BSE realty index was down 7 per cent with Indiabulls Real Estate, DLF, HDIL and Parsvnath Developers among the major losers. Among metal scrips, Sterlite Industries, Tata Steel, JSW Steel, Jindal Steel & Power and Hindalco were down sharply. Globally, the Shanghai markets were down six per cent while the European markets fell in early trade. PTI adds: Fall in the US consumer confidence index far outweighed Japan's emergence of the recession in terms of impact on the bourses today as the BSE Sensex recorded the biggest single-day fall since July 6. An unexpected fall in the American consumer confidence index caused concerns about revival in the global economy. The world's second-largest economy Japan has come out of the recession with GDP growth of 0.9 per cent in the second quarter. The Chinese markets were the most affected during the day with Asian indices down by about two to six per cent. European markets and the US index futures too were trading almost two per cent lower this afternoon. Bonanza Portfolio assistant vice-president Avinash Gupta said, "The Indian markets opened and continued to trade weak throughout and fell sharply by over 4.5 per cent on the back of continuing weak global cues after a major sell-off was witnessed in the Chinese markets in the first half of the day."
	Rupee tumbles 71 paise Mumbai: Weak equity markets weighed on the Indian rupee, which tumbled by a whopping 71 paise on Monday to close at a one-month low of 48.95/96 against the dollar. The rupee registered the biggest fall in absolute terms in more than three months due to expectations of increased capital outflows and heavy dollar buying by foreign funds. In fairly active trade at the Interbank Foreign Exchange market, the domestic unit resumed sharply lower at 48.53/54 a dollar from last Friday's close of 48.24/25 per dollar. Later, it moved further downwards to cross 49 level to a low of 49.02 before concluding the day at 48.95/96 a dollar, a fall of 1.47 per cent. Meanwhile, global crude oil was quoting near $67 a barrel in Asian trade on Monday. — PTI
	Japan pulls out of recession Tokyo/New Delhi, August 17 Spurring further hopes of an easing in global economic situation, the world's second largest economy Japan has exited the recession with GDP growth of 0.9 per cent in the second quarter. After four straight quarters of contraction, Japan climbed out of the recession to join Germany and France that have already put the worst of the recession behind them. According to the Japanese Cabinet Office, the country's GDP expanded 0.9 per cent for the three months ended June, while the economy had contracted 3.1 per cent in the first quarter. Meanwhile, on an annual basis, Japanese economy witnessed a second-quarter growth of 3.7 per cent. Reflecting the improving economic situation worldwide, European economic majors — Germany and France — pulled themselves out of the downward spiral last week, with both economies growing 0.3 per cent in the second quarter, after being mired in recession for about a year. The world's largest economy, too, showed signs of perking up with the US Federal Reserve recently saying that the country's economic activity is bottoming out, that financial conditions have started improving. Further, economies in the Euro zone, a grouping of 16 nations sharing the common currency euro, shrank 0.1 per cent in the second quarter, much less than the first-quarter contraction. — PTI
	Steel majors ‘exploiting’ small industries Shivani Bhakoo Tribune News Service Ludhiana, August 17 The Fastener Association of Small Industries of India (FASII) have requested to save micro, medium and small steel-consuming industry of India from the clutches of the steel cartel. In a letter written to the President, Prime Minister and Union Steel Minister, Badish K.Jindal, president FASII Punjab Chapter today said as per the audited results of year 2008-09 — the “recession year", the steel producers had openly "exploited" the steel consuming industry of India. According to him, the net sales of Steel Authority of India Ltd (SAIL) in the year 2008-09 was Rs 44,208 crore and the profit was Rs 11,468 crore, which was 25.9 per cent of the sales. SAIL earned a profit of Rs 8,000 per ton. The public sector steel company, which was created to help the Indian steel-consuming industries, had become the fifth-largest profit-making company of India. He told The Tribune that the net sales of Jindal Steel was Rs 15,179 crore with a profit of Rs 3,092 crore, which was about 20.37 per cent of their sales. That means JSW is earning a profit of around Rs 6,500 per ton. Similarly, the net sales of Tata Steel was Rs 24,024 crore with a profit of Rs 8,468 crore, which is around 35.24 per cent. The company earned a profit of Rs 10, 500 per ton, he said. "As if it is not enough, the steel producers are forcing the government to impose an import duty of 25 per cent on flat products. The Director-General of Safe Guards have already approved their demand and forwarded the file to the Committee of Secretaries for their approval". Chanan Singh Matharu, owner of a steel rolling mill at Mandi Gobindgarh said the imposition of import duty will be a big blow for the steel-consuming industry in India. Not only this, it will help to increase their profit by another 25 per cent and the outcome will be major hike in steel prices. On the contrary, the Chinese steel companies were importing iron ore from India and after processing the material in China they were selling the steel material to India even at cheaper prices to these companies. "The major Indian steel companies were already earning the margins from 20 to 40 per cent and allowing the secondary steel producers to exploit the steel consumers of India. Whereas the bicycle and other sectors are just earning around 1-3 per cent of the total sales", said Matharu. By consuming costly raw material, the Indian steel-consuming industries such as bicycle, auto, handtools, sewing machines were facing a strong competition in exports as well as in domestic market, remarked Ravi Bindra, an industrialist dealing in auto parts here. He further added that a regulatory authority must be formed to control the steel prices in India.
	Decoding new tax regime Bhagyashree Pande Tribune News Service New Delhi, August 17 The UPA government has kept its promise of delivering a new tax regime in the first 100 days. The new draft code on direct taxes, which is up for debate, will be brought in Parliament in the winter session. The government has been guided by what Adam Smith had outlined in his book “Wealth of Nations” almost 230 years ago. He had defined four canons of taxation, saying that a good tax system should be based on the ability to pay, convenient to pay, tax liabilities should be clear and certain. We bring to you briefly the benefits that the new direct tax system has in store for individuals and corporates. Tax benefits on both interest and principal paid in monthly instalments of home loans of self-occupied houses have been a contributing factor to the residential real estate boom in recent years. So, the deduction of Rs 1.5 lakh allowed on interest paid on home loans is set to be scrapped. Retirement savings will become taxable on withdrawal. The most significant change is the proposal to bring in the EET regime for all approved provident funds, superannuation funds, life insurance and New Pension System trust from April 1, 2011. The withdrawals are taxed whenever they are made, whether on maturity or prematured. The code has proposed to continue with other deductions such as medical insurance premium, medical treatment or maintenance of disabled dependent, medical treatment for specified diseases for self and dependants, interest of loan taken for higher education, rent paid for residence, donations to certain non-profit organisation, tuition fees for children education. For businesses, the proposed direct tax code will make Indian firms happy as it proposes to cut tax rate from 30 to 25 per cent. The draft code has proposed that business losses can be carried forward indefinitely. The impact of the draft foreign code on foreign companies is likely to be mixed. The effective tax rates will be higher as compared with Indian firms as foreign companies have to pay 15 per cent tax on branch profits over and above 25 per cent tax rate. Area-based tax exemptions like investing in north-eastern region and other backward areas have also been done away with. Tax holidays available to power, petroleum and companies involved in infrastructure will not be allowed any longer.
	Sugar industry, govt join hands to regulate supply Vibha Sharma Tribune News Service New Delhi, August 17 The country’s sugar industry has promised to co-operate with the government to ease the shortfall of the commodity in the domestic market. Apparently, the government and sugar industry have reached an agreement to augment sugar supply in open market and public distribution system (PDS) to curb the price rise. After meeting industry’s representatives, Food and Agriculture Minister Sharad Pawar said: “The attitude of the industry is quite constructive. It is ready to find a solution to overcome sugar shortage”. However, he did not elaborate upon the steps intended to be taken. Sources say the solution may lie in paving way for more supply of levy sugar, used for the PDS. Sugar mills provide 10 per cent of their production to the government for the PDS. Pawar is expected to meet industry representatives again. Sugar prices have surged due to a decline in the output as against the consumption requirement of close to 25 million tonne. Despite the government’s best efforts, the acreage under sugarcane is shrinking with farmers shifting over paddy and wheat cultivation in some states. Moreover, a weak monsoon has adversely affected sugarcane cultivation this year. Hence, less production of sugar seems imminent. With festival season round the corner, the country’s sugar import is likely to triple this year due to lower domestic output. Steep rise in retail prices recently prompted the government to extend duty-free import of sugar by another eight months. The news that India’s sugar production will be low this year has already sent global sugar prices soaring.
	Ireland woos Indian companies Tribune News Service Chandigarh, August 17 The euro 500-million trade between India and Ireland is expected to surge by 25 per cent in 2009 as against the 13 per cent growth it recorded in 2008. This was stated by Ambassador of Ireland to India, Kenneth Thompson while speaking at a business meet organised by the CII. He sought to build business investment partnership with Ireland. He said there was a tremendous scope to enhance the bilateral trade between India and Ireland. India’s exports to Ireland account for nearly 63 per cent of the bilateral trade driven by products like yarn, garment and drugs. India imports telecom, sound equipment, automatic data processing machines and other manufactured products. Presenting Ireland as the chosen investment destination, the Ambassador further highlighted the critical enablers for bilateral trade in the form of pro-enterprise culture, low corporate tax, availability of tax allowance for purchased intellectual property, highly skilled and English speaking workforce, membership of the European Union and Euro currency zone providing easy access to EU internal market and pro -active, up-to-date business legislation, and in particular in e-business and intellectual property. Reiterating its commitment to give a fillip to Indo-Ireland trade, Minakshi Batra, Director-India, IDA Ireland, explained the model of IDA which is a primary government agency with responsibility for the promotion of foreign direct investment into Ireland and the development of the existing base of overseas companies and provides the grants for both manufacturing and internationally traded services.
	More firms may roll back pay cuts, freezes New York, Aug 17 An increasingly larger number of companies are planning to roll back salary cuts and freezes implemented in the past two months and a majority of them are now more concerned about retaining their top performers and critical-skill employees, a survey says. According to the bi-monthly survey by leading global consulting firm Watson Wyatt, the number of employers planning to reverse salary cuts and freezes has increased in the past two months. “About 44 per cent firms plan to roll back salary cuts in the next six months, compared with 30 per cent two months ago,” the survey, conducted earlier this month, revealed. Around 33 per cent of the employers who froze salaries plan to defreeze them within the next six months, an increase from 17 per cent two months ago, it added. Moreover, a majority of employers (52 per cent) are now more concerned about retaining their top performers and critical-skill employees than they were before the economic crisis hit. “Some employers are seeing the light at the end of tunnel and feeling optimistic about the prospect of improved business results,” Watson Wyatt said. — PTI
	IT Ombudsman gains popularity Tribune News Service Chandigarh, August 17 The office of Income Tax Ombudsman, North West region, is slowly gaining acceptance as a redressal forum for about 30 lakh assessees in the region. In the past one year, the office has received 122 complaints, of which 40 complaints have been received in the past one month itself. This was stated by the I-T Ombudsman, Pamela Bhandari, while interacting with members of the PHD chamber here today. She said 60 of these complaints had been disposed off and 38 cases were settled within the stipulated timeframe of 30 days. She said the Ombudsman had sufficient authority such that the award given in case of any settlement was an order. It could direct the authority concerned to give an apology letter in writing to the tax payer.
	Bharti unveils wholesale service portfolio Tribune News Service New Delhi, August 17 Bharti Airtel today unveiled its global wholesale service portfolio with a network that will enable telecom operators in 50 countries across Europe, North America, Africa, Asia and Australia to access its services. Bharti Airtel's wholesale portfolio will offer MPLS, ethernet, IP and International Private Leased Circuit (IPLC) services to global carriers through its global network, Bharti Airtel said. The portfolio includes solutions for voice and data connectivity, collaboration services, co-location, carrier outsourcing and content distribution through its next generation high speed submarine network, it added. The connectivity has come on the back of investments of over $500 million made on building cable capacity, network infrastructure and international points of presence, it said.