Berlin, May 8
The heads of state and governments of the 16 eurozone nations on Friday launched a historic 110 billion-euro financial aid package to bail out heavily indebted Greece from bankruptcy and vowed to fight speculators endangering the stability of their common currency.

At an emergency meeting in Brussels, the eurozone leaders expressed concern over mounting pressure on the euro in financial markets and deplored the fact that speculators were targeting other debt-ridden nations such as Portugal, Spain and Ireland as the next candidates for a bailout.

They agreed on a "crisis management mechanism" to protect the eurozone from speculators and to prevent the debt crisis in Greece from engulfing the whole euro area, chairman of the euro group and Prime Minister of Luxembourg, Jean-Claude Junker, said at the conclusion of Friday's summit.

Details of the plan are still being worked out and they will be made public by the finance ministers of the euro group in Brussels on Sunday, Junker told reporters.

He said he expected the crisis management mechanism to be put in place before the financial markets open on Monday.

The drop in the value of Greek government bonds to their lowest level and the plunge in European stock markets are evidence of a "worldwide coordinated attack against the euro", Junker said.

The eurozone nations are determined to defend their common currency at any cost, president of the European Commission Jose Manuel Barroso said.

French President Nicolas Sarkozy said, "The euro is facing its worst crisis since it was created 11 years ago. We have taken some very important decisions here." Sarkozy also spoke of plans for further regulating financial markets and closely scrutinising the work of ratings agencies.

The finance sector will have to make a significant contribution to preserve the stability of the eurozone.

"The euro is Europe, we cannot leave it to the speculators," he said.

German Chancellor Angela Merkel shared similar views and said, "We have established that the euro is subjected to a high level of speculation." The eurozone leaders cleared the way for immediately releasing the bailout funds involving credits of up to 80 billion euros from Greece's eurozone partners and 30 billion euros from the International Monetary Fund (IMF) for a period of three years.

A maximum of 30 billion euros will be paid in the current year and the first loan tranche will be made available to Greece in the coming days to meet a May 19 deadline for repaying its debts.

The bailout package was finalised by the eurozone finance ministers last Sunday after the Greek government pledged to implement a new round of tough austerity measures, which would save up to 30 billion euros over the next three years.

Earlier, on Friday, a legislation on Germany's 22.4-billion euro contribution to the bailout package was signed into law by the country's President, Horst Koehler, after it was passed by both houses of parliament. — PTI

Chandigarh, May 8
In order to give a fillip to the small and medium enterprises (SMEs), the government is now looking to operationalise venture capital (VC) route to bring in foreign direct investment (FDI) in this sector. This move is expected to benefit the SME sector in North India.

The move gains significance for this region as the industry here is mainly in the SME sector. With North India getting less than one per cent of FDI coming to the country, the government has been thinking on how to incentivise this sector. Since big industry is not there in the region, the move to get FDI via VC route would help take the SME sector to the next level of growth.

“SMEs constitute more than 40 per cent of the industry in the country. If we have to continue with the growth trajectory, we have to ensure that the SME sector has access to the FDI. There is a huge potential in some of the sectors in SMEs and their financial requirements could be met by exploring their accessibility for FDI. The venture capital will be allowed only in area where the FDI is allowed,” said RP Singh, Secretary, Industries, Government of India, during his visit to the city last evening.

Though the financial year 2009-10 ended on a good growth in exports, some sectors like handicrafts, jute manufacturing, engineering goods, electronic goods, cotton yarn and fabric, spices, carpets and readymade garments saw a minimal or negative growth. Most of these goods are manufactured by the SMEs in North India. Because of the contraction in most countries in Europe and Japan, these industries failed to grow in tandem with other sectors. Officials say that at this time it is important to get FDI through VC route in these sectors, so as to ensure growth.

Q: Please let me know if the Saral II can be used by:-

a) An individual having only interest income from bank and post office and also dividend income from equity shares?

b) By HUF having only interest income from bank? — V.P. Agarwal

A: Saral II can be used by individuals earning interest from bank and post office. As dividend on shares is not included in the specification, strictly speaking Saral II cannot be used. However, since dividends are tax-free, and need to be disclosed in item no. 27 of the form, there may be a possibility that the same is accepted even for those having income from dividends.

But to be on the safer side, it is best to use ITR 2 which is meanst for individuals and HUFs not having Income from business or profession.

As far as HUFs are concerned, they cannot file their return through Saral II since it is clearly meant only for an individual and not for any other tax entity.

Income from house property

Q: I am a great admirer of your articles. Just wanted a quick clarification on “Income from house property”.

1. Does a business of renting warehouses, godowns etc have to report its income in this category?

2. Agricultural land is exempted in this regard, correct? — Nitin Rao

A: 1. The owner, or the deemed owner of a house property, inclusive of the appurtenant land, is taxed on the ‘annual value’ of the property under the head, Income from house property. Where the house is used for carrying on any business or profession, the income is treated as business income. Sec. 23 provides for determination of annual value of house property, subject to deductions u/s 24.

2. Sec. 2 defines agricultural income to mean

a) Any rent or revenue derived from land which is situated in India and is used for agricultural purposes.

This is “Income from other sources”

(b) any income derived from such land by-

(i) agriculture ; or

(ii) the performance by a cultivator or receiver of rent-in-kind of any process ordinarily employed by a cultivator or receiver of rent-in-kind to render the produce raised or received by him fit to be taken to market; or

(iii) the sale by a cultivator or receiver of rent-in-kind of the produce raised or received by him, in respect of which no process has been performed other than a process of the nature described in paragraph (ii) of this sub-clause;

This is income from ‘Profits and gains of business or profession’ and

Regardless of games politicians play in Parliament and distance parameters of 150 km, there is an urgent need for another international airport around Indira Gandhi International Airport (IGIA) in Delhi.

Keeping in view quick-moving surface transport facilities around over-crowded and ever-expanding Delhi, Noida is the best alternative for another international airport. In the changed political scenario, if the UP's proposal for an international airport at Noida is approved, it will take at least 5-7 years to become functional.

Despite spending enormous funds and transferring construction work at the IGIA from the Airports Authority of India (AAI) to the GMR's private consortium, the airport's functioning continues to be as messy and unacceptable to flyers and visitors as before.

The impressive looks of the renovated terminal buildings may be soothing to eyes, but the IGIA has not improved in providing basic amenities to flyers and visitors. The drinking water is in short supply; it is not available even at high price. The toilets, though new, continue to stink and toilet paper remains a precious commodity. The flyers have protested through feedback kiosks but the authorities, as usual, stay in deep slumber. The overall picture of the IGIA is gloomy regardless of tall claims of the private operator, Delhi International Airport Limited (DIAL).

Why this dismal scenario of the DIAL? It is mainly because GM Rao (GMR) is trying to have a finger in every pie. He runs Delhi Daredevils in the Indian Premier League, he undertakes construction of airports in India and abroad and has several other projects to cater to. The result: below par achievements.

No sane person connected with civil aviation will accept how the construction work on the longest, third runway was undertaken on the stretch on which "Shiv temple" already existed. The outcome: part of the runway is lying un-utilised. The main runway has been closed for undertaking repairs. This causes insurmountable delay and needless inconvenience to the passengers.

Worldwide, disabled persons are allowed to use their own foldable 'prams' and 'wheel-chairs'. This practice was operational at the IGIA and other international airports. Recently, the practice has been discontinued causing an additional inconvenience to the already harassed and disabled persons. According to investigation, it is an ego war between the Central Industrial Security Force (CISF) and airlines. Who suffers in bargain: innocent, disabled persons. All this is because every agency at the IGIA enjoys autonomy; there is no trouble-shooter who could coordinate the functioning of different agencies.

In view of the IGIA's many unending problems, another airport is an immediate need.

Noida has now a legal backing. The country' top legal officer, the Attorney-General, says: "It does not appear that there was any express condition in the bid documents prohibiting the government from developing a new airport within 150 km of the Delhi Airport".

Surprisingly, the private consortium chief, GMR, objected and took refute in the 1997 ruling for the airport in the Greater Noida. According to information, if the plan for the Noida is cleared, his firm will also bid for it.