The Tribune, Chandigarh, India

	World Economic Forum: India Economic Summit 2010 Govt sticks to growth plan New Delhi, November 14 The Planning Commission today said it will stick to the economic growth forecast of 8.5 per cent for the current fiscal, terming 16-month-low industrial growth during September as just a month-to-month variation. "We are not altering the growth forecast for now. We expected IIP to slow down," Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters on the sidelines of the India Economic Summit organised by CII here. For the second consecutive month this fiscal, industrial growth witnessed a slowdown in September, 2010. Its growth plummeted to 4.4 per cent. "There are month-to-month variations in IIP numbers. I am not making any judgement based on one month. But yes, the number is low," Ahluwalia said. — PTI
	Not just cost-effective, small car must sell well: Rahul Bajaj New Delhi, November 14 Bajaj Auto Chairman Rahul Bajaj today said the company's proposed small car will not only have to be cost-effective, but should also sell in large volumes to be a feasible proposition. "A car at a cost of less than Maruti 800 is not going to work... My son Rajeev may not like to sell a car with EBIDTA less than 20 per cent," Bajaj told reporters at the India Economic Summit here. Bajaj Auto had entered into a contract manufacturing deal with Renault-Nissan to produce an ultra-low-cost car, expected to hit the market by 2012. "This year, we are going to sell four million two wheeler-three wheelers together. So why should we focus only to sell 20,000 units of a car. It doesn't make sense. Unless we can sell about 200,000 units per year, it will not be feasible," Bajaj said. He said there are so many models made by different manufacturers available in India. "Why should we bring out one additional car?," he asked. DuPont to hire 350 in India Chemicals firm DuPont today said it will hire over 350 scientists, researchers and engineers in India over 2-3 years as it sharpens focus on developing products suitable for the domestic market. “As the market for Dupont products in India is growing, we have to focus more on establishing stronger connect with customers and localise technologies. This is the reason we set up a Knowledge Centre in Hyderabad," DuPont CEO Ellen Kullman told reporters here at the India Economic Summit. DuPont India currently employs 360 scientists, engineers and researchers at the Knowledge Centre. "We are looking to double the number in the next 2-3 years," DuPont India President South Asia Balvinder Singh Kalsi said. Mundra plant capacity to go up to 2,000 MW Adani Power today said the power generation capacity of its Mundra power plant will increase to about 2,000 MW by December with the commissioning of two new units over the next two months. The plant currently has a generation capacity of 990 MW. "We are going to commission one unit of 330 MW this month and the first super-critical unit of 660 MW will be commissioned by the end of December. We are in the final stages of that," Adani Power CEO Ravi Sharma told reporters on the sidelines of the India Economic Summit here. HCC to repay Rs 550 cr Hindustan Construction Company today said it is ready to pay back Rs 550 crore, taken as debt in the form of Foreign Currency Convertible Bonds, if the FCCBs do not get converted into equity. "In the event, if the FCCBs do not get converted, we will repay them (investors) and we are fully prepared to repay them with sufficient internal accruals and cash available with us," HCC Chairman Ajit Gulabchand told reporters here on the sidelines of India Economic Summit. HCC has a portfolio of about Rs 550 crore in FCCBs, which will mature in April 2011, Gulabchand added. To access cheap foreign currency debt, many midcap companies like HCC had issued FCCBs in 2005-06 and provided their holders the option to convert the bonds into equity within the pre-determined period and price. FCCBs are zero-coupon bonds and companies have to pay the redemption amount, along with the compounded interest. Under accounting principles, repayment to FCCB holders will entail the company charging the interest paid to the profit and loss account. — PTI
	Facebook likely to launch email service today Houston, November 14 Social networking site Facebook is likely to offer e-mail services to its 500 million users from tomorrow to compete with gmail and yahoomail, making it the largest such service provider on the planet. Tech Crunch, a leading Silicon Valley technology blog, has reported that the social network plans to announce a Web-based email service complete with @facebook.com addresses at an event in San Francisco tomorrow. The blog said Facebook's planned email service is part of a secret project known as "Project Titan" that is "unofficially referred to internally as its 'Gmail killer.'" Yahoo, Google and Microsoft are already scrambling to retool their e-mail services to build them more around people's social connections. Facebook would have a tremendous advantage because it owns a vast trove of data about people's relationships and would find it easier to graft e-mail onto its existing social services such as photo-sharing. The launch of the new service will be made official tomorrow. Together with a likely announcement of a strategic alliance with Microsoft to incorporate the functionality of Facebook in the Office applications. The new email Facebook will integrate fully the social network. — Reuters
	Unemployment rate higher than GDP Faraz Ahmad Tribune News Service New Delhi, November 14 India’s GDP may have grown 7.4 per cent last fiscal. However, this has hardly helped the employment scene in the country, with unemployment rate much higher at 9.4 per cent, according to a report authorised by the Indian government. The report by Chandigarh-based Labour Bureau, a research and survey organisation under the aegis of Union Labour and Employment ministry, has also dispelled the myth created by an oft-quoted survey of National Sample Survey Organisation (NSSO), which had claimed that in 2007-08 unemployment had dipped to 2.8 per cent. The NSSO figures are normally quoted extensively. The report has exploded the myth that higher growth rate will automatically result in greater employment generation and that greater accumulation of wealth at the top would automatically percolate down, benefitting the lowest strata of the working class. The report has put the overall worker population at 32.5 per cent and 46.5 per cent of the working age population (between the age of 15 and 59 years) as employed. The unemployment rate in rural areas is 10.1 per cent and in urban areas it’s 7.3 per cent. The unemployment rate for the female population is even higher at 14.6 per cent, compared to 8.0 per cent for males. Even among those characterised as employed by the survey, majority are self-employed coming to a figure of 43.9 per cent and 39.3 per cent are casual labour. The regular salaried class comprises only 16.8 per cent of the entire workforce of India. This figure is even higher in rural India where 45.7 per cent are self-employed and 43.5 per cent casual labourers, with just 10.8 being paid any wage or salaries. Of the total employed population 43.6 per cent are employed only in seasonal or ad-hoc jobs. Of the entire working population, only 15.7 per cent are eligible or entitled to paid-leave. Other social security benefits like the provident fund, gratuity, health care, maternity benefits and pension extend to only 16.3 per cent of the working population of the nation.
	Power Grid issue to raise $1.7 bn Mumbai, November 14 Power Grid Corp of India's share sale will raise $1.7 billion after its board fixed the issue price at 90 rupees a share, the top end of the price range, the firm said on Sunday. The state-run firm's 841.7 million-share public offer closed on Friday after being subscribed 14.5 times, buoyed by strong investor response to a stock seen as a safe bet on demand growth in a power-starved nation. Retail investors and Power Grid staff will get a further 5 per cent discount on the issue price, the company said in a statement. On Friday, Power Grid shares closed 1.6 per cent lower, at Rs 99.6, in a weak Mumbai market. The offer follows a successful $3.4-billion IPO in state firm Coal India. — Reuters
	Market Update Markets correct sharply on weak global cues by Lalit Batra On the back of weak global cues, the markets corrected sharply last week. The nifty lost 240 points to close the week at 6071. Fear of efforts by the Chinese government to slow the growth of the economy and worries over sovereign debt levels in Europe weighed heavily on the domestic bourses. The Sensex lost close to 850 points to close the week at 20,156 points. Meanwhile, the IPO of Power grid received an overwhelming response and was oversubscribed by 14.77 times. The company has set the follow-on public offer at Rs 90 per share. Retail investors and employees will get a five percent discount on the offer price. After Power Grid Corporation of India, Steel Authority of India (SAIL) and Indian Oil Corporation (IOC) among others are lined up to float their follow-on public offers. The Indian government’s part stake divestment through an initial public offer in state run firms Manganese Ore India and Shipping Corporation of India is likely to hit the market by end-November, while an offer by Hindustan Copper is likely in December. The government is also likely to soon take a decision on giving the go-ahead for State Bank of India’s rights issue and on its size. Reportedly, the bank plans to mop around Rs 18,000 - 21,000 crore before this fiscal-end through the issue. Going forward, activity of institutional investors, liquidity scenario and global and domestic economic data will dictate the market trend. Investor sitting on profits may book partial profits and re-enter at lower levels, when the market corrects. Polaris Software Polaris, founded in 1993, is an information technology (IT) services company focused on solutions and services for the banking and insurance industries. Polaris is one of the outsourcing partners for ten of the top 15 global banks and six of the top ten global insurance companies. Polaris offers solutions for core banking, corporate banking, wealth and asset management, and insurance. For the Indian IT services industry, the strong revival in demand has been led by an increase in the IT spending by customers in the BFSI vertical and Polaris with its strong presence in the BFSI space and offerings in both the service and solution segments is well poised to capitalise on the incremental spending from the sector. More over the company’s flagship banking product, Intellect, has started showing strong traction which will hold the company in good stead in the long run. The company stock has shown a lukewarm performance on the back of concerns of stake sale by citigroup. Citigroup Venture Capital (CVC), has sold more than half of its stake in Polaris in the last 18 months. This overhang may soon be a thing of past as the stock may get re-rated on the back of strong showing, going forward, quarter on quarter. The company also a war chest of Rs 500 crores in cash, should the company require it to fund big-ticket merger and acquisition activity. Given the above positives, investors may buy into Polaris at around the Rs 150 levels with medium term perspective.
	Tax Advice Section 80U(1) of the I-T Act raises deduction amount for disabled by SC Vasudeva Q. Recently I have read in your column published in "The Tribune" that deduction allowable u/s 80U has been increased to Rs 75,000 in case of assessee who has less than 80% disability. The increased deduction is allowable for the AY 2010-11 onwards. Sir, we have three such employees in our office and want to give them benefit of increased deduction u/s 80U but we are unable to do so as we couldn't find any circular/notification on internet or in any book. Old limit of Rs 50,000 is being displayed everywhere. Please guide us in finding the exact notification. — Shalini Goyal A. The amendment in section 80U of the Income-tax Act, 1961(The Act) so as to increase the allowable deduction from Rs. 50,000 to Rs. 75,000 had been introduced by the Finance (No.2) Act 2009 w.e.f. 1.4.2010. Please consult the amended Act and you will be able to find a proviso to section 80U(1) of the Act which refers to such an increase in limit. Deciding Residential status Q. I read the online — Tribune every day and got your name and email address from there. I am a NRI with a US passport residing in California. I am originally from Chandigarh. I plan to retire in Oct, 2012 and would like to spend 4-5 months every year in Chandigarh. I will get a small government pension from my state job on which I will be paying taxes in the US. Will I have to pay taxes in India on my income in America, even when I spend a major portion of the year in America? — Jesse Gill A. Section 6 of the Act deals with the provisions relating to the ascertainment of residential status of the assessee for the purpose of taxability in India. According to the provisions of the section referred to above, an individual is said to be a resident in India, in any previous year, if he is in India in that year for a period or periods amounting in all to 182 days or more or having within four years preceding that year been in India for a period or periods amounting in all to 365 days or more, is in India for a period or periods amount in all to 60 days or more in that year. A person is said to be an ordinary resident in India in any previous year if such person is an individual who has been a resident in India in at least two out of ten previous years immediately preceding the relevant previous year or has during the seven years immediately preceding the relevant previous year been in India for a period or periods amounting in all to, 730 days or more. A reply to your query therefore requires a scrutiny of the number of days for which you were in India in the last ten years preceding the year in which you are likely to visit and stay in Chandigarh for a period of 4-5 months every year. It is not possible to ascertain your residential status and issue of taxability of income without going into these details. These provisions are applicable for the previous year commencing April 1 2010 to March 31 2011 corresponding to assessment year 2011-12. Sec 80 C deduction Q. Is it compulsory that saving of Rs 1 lakh be made from the “Taxable income” earned during the financial year or from the “past years savings”. Kindly advise quoting instructions/guidelines/amendment so as to convince the Department. — Ravinder Sharma A. The deduction allowable under section 80C of the Act is limited to Rs.1 lakh. The section does not make a reference to the word “income chargeable to tax”. Accordingly, even if the investment/deposit in specified heads is made out of the past savings, a deduction under section 80C of the Act would be allowable. Use of ITR – 2 Q. As a sequel to introduction of new forms by GOI (ITR-1 to ITR-8) effective from this year for filing the Income Tax Returns, I request to kindly advise me as to which ITR will be applicable to an individual tax payer having LTCG of Rs 1,68,095. — Dinesh A. An individual not having an income chargeable to Income-tax under the head ‘profits or gains of business income’ is required to file his return in Form ITR - 2. Such form contains a column with regard to the inclusion of short term as well as long term capital gain in the total income of an individual. Business Vs professional income Q: A person (not doctor) has opened an X-Ray and ultrasound clinic and has employed a radiologist to perform the job. No treatment or medicine is given. Proprietor of the clinic is a retired person and is not a qualified doctor. Will it be case of a professional income or business income? — Ashok A. The income in respect of X-Ray and ultrasound clinic should be assessed as income from business because the owner is not carrying on any professional activity as he is not a qualified professional himself.