Bangalore, September 9
US President Barack Obama’s latest warning against outsourcing by American companies has failed to rattle the India Inc who have by now become all too familiar with periodic outbursts by the American President against outsourcing.

“This is a very old thing. Indian software companies will not be affected by this”, T V Mohandas Pai, HR director at Infosys, told The Tribune.

Pai said to appreciate what Obama had said, one had to understand the US tax system. Tax on overseas profits made by the US companies became due once the profit was repatriated to the USA, Pai said, while adding that Obama wanted to plug corporate tax loopholes manipulated by the US MNCs and crack down on their overseas tax havens.

While participating in mid-term poll campaign in Ohio yesterday, President Obama vowed to end Bush era tax cuts allegedly encouraging companies to 'create jobs and profits in other countries'.

The statement followed the Ohio Governor Ted Strickland’s recent order banning outsourcing of government IT and back-office projects to offshore locations such as India and raising visa fee for Indian software professionals.

Instead of being worried, representatives of the India Inc here see it as election rhetoric.

Obama’s statement, according to industry sources here, was primarily aimed at putting a check on American corporations from parking their overseas business earnings indefinitely outside the US and avoiding paying the US taxes.

Kavita Doshi, spokesperson of Nasscom, replied in the negative when asked for comments on Obama’s latest fiat.

Sachin Mulay, chief marketing officer, Wipro, said even the order passed by Governor Ted Strickland banning outsourcing for government projects was yet to become a law in Ohio.

Devesh Agarwal, CEO of Infomart, a computer hardware manufacturing company, said given the scale of operations of some of the American corporations in India, they may carry on with their operations by conforming to the new tax laws proposed by Obama.

Moga, September 9
The Excise and Taxation department today issued a recovery notice of Rs 1.25 crore on Nestle, world’s premier food processing company, through its local manufacturing unit, for evasion of VAT on the purchase of skimmed milk.

When contacted, SJS Beesla, Assistant Excise and Taxation Commissioner (AETC), Moga, informed that Nestle had purchased skimmed milk worth Rs 7.74 crore from a Malerkotla firm in 2005-2006 but did not pay VAT at the rate of 4 per cent amounting to Rs 30.95 lakh.

He said the evasion of tax was detected by Jagtar Singh, ETO, who has calculated an interest of Rs 32.19 lakh on the principal amount of tax evaded.

The ETO has also imposed a penalty of Rs 62 lakh on the company at the rate of 200 per cent as per the guidelines of the state government. “The total amount payable by Nestle, including the principal amount of tax, interest and penalty, is Rs. 1.25 crore,” he added.

In reply to a question, Beesla said the authorities concerned of the Nestle were summoned by the ETO today directing them to pay Rs 1.25 crore within 30 days, otherwise, legal action would be initiated to recover the amount as per the provisions of the law.

The Tribune tried to contact senior functionaries of the Nestle for an official version but they refused to comment saying that they were not aware of the recovery notice.

However, they said the company would file an appeal before the competent authority of the Excise and Taxation department within the stipulated time period against the issuance of recovery notice, if any.

Boston, September 9
Mukesh Ambani-led Reliance Industries has been ranked second in the list of world's 10 biggest 'sustainable value creators' — companies that have been successful in creating the most shareholder value over the last decade — prepared by Boston Consulting Group.

The list compiled by the global management consulting firm names Brazil-based mining and materials giant Vale as the top value creator worldwide for the 2000-2009 period.

"One side effect of the Great Recession has been to accelerate the ascent of companies from rapidly developing economies to the top ranks of the world’s creators of shareholder value," BCG said in the report titled 'Threading the Needle: Value Creation in a Low-Growth Economy'.

The ranking identifies large global companies with a market capitalisation of at least $35 billion that have been the "most successful at sustaining superior value creation over 10 years."

BCG says a decade is the minimum time frame necessary to evaluate the staying power of a company's value creation performance.

The report has also listed companies industry-wise for creating the most value for their shareholders from 2005 to 2009. Starting from a database of more than 4,000 companies worldwide, the report presents detailed analysis of the Total Shareholder Return (TSR) at 712 companies across 14 major industries for the five-year period. Of the top 142 companies included in this year’s global and industry rankings, 81 are located in developing economies. — PTI 

New Delhi, September 9
Food inflation shot up to 11.47 per cent for the week ended August 28, the second consecutive week of upward thrust. The rise in inflation was mainly on account of spurt in prices of cereals, fruits and milk.

Food inflation was 10.86 per cent for the week ended August 21. Experts said that food inflation will stabilise by next month when this year's fresh kharif crops starts arriving in the market. — PTI 

Mumbai, September 9
Investors will be able to buy and sell shares using their mobile phones from next month, according to several stock brokers here.

The Bombay Stock Exchange and the National Stock Exchange are working on the technology platforms that would be made available to investors using various types of mobile phones, say sources.

The NSE has already announced that it has begun a pilot project to test mobile phone trading applications among member brokers to iron out last minute glitches.

The NSE software, called NOW, has been adapted for mobile phone application. This enables market data to be accessed via both 3G as well as 2G-enabled handsets, according to the NSE officials. The platform would accommodate both high-end mobile phones with advanced applications as well as low-end mobile phones, according to the exchange.

A number of mobile value-added service (VAS) providers have tied up with different brokerages to provide relevant applications for mobile trading. Some of the VAS companies claim their technology platform allows investors to obtain a mobile trading account for as little as Rs 500 per month.

“The charges will come down sharply as brokers subsidise the charges to generate higher volumes,” says Siddhant Agarwal, a city-based stock broker. Trading via landline-enabled computers is much cheaper at present.

Both exchanges are expected to announce norms for mobile trading in the coming days, the sources say.

Market regulator SEBI has already cleared the security mechanism to be deployed by the brokers to prevent fraudulent deals.

Chandigarh, September 9
Indian bee farmers in general and from Punjab in particular, are a worried lot as two of their major export markets - the US and the European Union (EU) - have put their product on the “high suspect list” for containing traces of antibiotics.

While the EU is contemplating a blanket ban on import of honey from India, the US has already detained 50 containers of honey and imposed a huge $80 million penalty on the suppliers for violating the import regulations.

Interestingly, the US charges 1 per cent duty on honey imported from India. On the other hand, quantum of duty on honey imported from China is 220 per cent.

This led to the crash in prices of Chinese honey. “While Indian honey sells for anything between $2,000 and $2,500 a metric tonne, Chinese honey sells for $750 a tonne,” says Amit Tunka, vice-president of the All-India Food Processors Association.

“This has also introduced malpractices. Some of the Indian honey exporters have resorted to unfair means. They import Chinese honey, blend it here, and market it in the US and the EU as Indian honey. But since there is a world of difference in the quality of pure India honey and Chinese blended honey, importers in the US and the EU, got suspicious. Laboratory tests and scientific analysis proved them right.

“Now both the US and the EU are contemplating to ban Indian honey also. On July 11, the EU wrote to the Indian government about its decision. Similarly, the US Administration, too, has apprised the Indian government about the malpractice in the honey trade. Unfortunately, Indian government has done nothing to protect and safeguard interests of genuine Indian honey exporters,” alleges Tunka.

Indian industry produces 55,000 tonnes of honey annually against three lakh tonnes produced by China.

Lal Bahadur Bhatia, the single largest exporter of honey from Punjab, says that one half of the total honey exported from India is from Punjab. Of 35,000 tonnes exported from the country, 15,000 tonnes come from Punjab.

Both Amit Tunka and Lal Bahadur Bhatia want the Union government to act before the entire industry comes crashing down.