The Tribune, Chandigarh, India

	Food prices worrying, growth on track: PM Govt’s report card says subsidy cuts could be in the offing New Delhi, May 22 Identifying sustenance of growth while keeping inflation under check as an immediate challenge, Prime Minister Manmohan Singh today empahasised the need to reduce fiscal and revenue deficits and cut down on wasteful subsidies. “Food inflation was a major concern in 2010-11 ”Singh, said, while adding that various measures were taken by the government to address the problem. Presenting its annual report card for the year 2010-11, the government said it would seek to contain food inflation through measures for higher production of various agriculture products. “... In response to the global economic slowdown, we undertook a massive fiscal stimulus programme that helped maintain reasonable growth. Today, however, we must reduce the fiscal and revenue deficits, increase public investment, and cut down on wasteful subsidies," he added. “...this challenge has been made all the more daunting by the rise in world fuel prices. As an importer of oil we have to adopt rational pricing policies. India cannot become too dependent on external sources of energy,”he added. Noting that rapid and broad-based economic growth was essential for inclusive development, Singh said India was today widely seen as poised to embark on a sustained high growth path of the type achieved by a handful of countries. “We are determined to deliver on this promise so that India moves rapidly into the ranks of middle income countries, free of the burden on poverty, ignorance and disease that has held us down for so long,” he said. As per World Bank classifications, India is ranked among lower-middle income economies along with countries like Sri Lanka, China, Pakistan, Iraq and Indonesia. Singh added the government would look to chart an economic growth process that was socially inclusive and regionally balanced. The government said it has also simplified its foreign direct investment policy and steps have been taken towards an improved taxation environment through Direct Tax Code and Goods & Services Tax regimes. Efforts have continued to strengthen the country's energy and infrastructure sectors, which have been identified as key areas for the India’s economic growth About the public sector enterprises, the government said that they were are likely to earn an aggregate annual profit of Rs 5,551 crore during 2010-11. —PTI
	Tatas clarify remarks on Mukesh home Mumbai/London, May 22 Ratan Tata’s purported remarks expressing surprise at fellow industrialist Mukesh Ambani living in a billion-dollar mansion in Mumbai has sparked off a controversy. The Tata group Chairman was quoted by London’s Times newspaper as having said, “It makes me wonder why someone would do that (live in a billion dollar mansion). That’s what revolutions are made of. The person who lives in there should be concerned about what he sees around him and [asking] can he make a difference.” “If he is not, then it’s sad because this country needs people to allocate some of their enormous wealth to finding ways of mitigating the hardship that people have,” he continued. Tata, who bought the British steel maker Corus and car manufacturer Jaguar Land Rover (JLR) said, the widening gap between the rich and the poor in India worried him. “We are doing so little about the disparity. We are allowing it to be there and wishing it away.” However, Tatas disputed the reported attribution to its chairman, saying that the comments were taken out of context and factually incorrect. “We would also like to clarify on stories in Indian media regarding Mr. Ambani’s home. The report is out of context and factually incorrect. Tata’s comments on wealth are in the larger context of the growing disparity in the society. The comments seem to have been deliberately sensationalised,” it said. “There have been words, individuals and statements that have not been mentioned by Tata during the course of the interaction which are being attributed to him. “We have already registered our protest with the concerned publication and will continue to pursue measures against the incorrect impressions being sought to be created,” a spokesperson of Tata Sons said. — PTI
	Flower farms a budding investment with high returns Satara, May 22 A decade ago, Rahul Pawar made an unusual and risky choice - to grow flowers in the centre of India's biggest sugar-producing state Maharashtra. Now he's reaping the rewards of his Rs 11 lakh investment as increasingly affluent Indians want his bright blooms for their weddings and festivals. "Every year we are seeing a rise in demand. People are using more and more flowers at functions like weddings," Pawar said. "They are ready to pay for flowers like gerbera and gladioli, which are new to them," he added, holding a fluorescent bird of paradise bloom in his weather-beaten hands. Pawar grows orange and red gerberas under polythene in climate-controlled conditions to shield them from Maharashtra's scorching summer, when temperatures can top 48 C. The hardier birds of paradise plants flourish in the field and take three years to reach production of 30 flowers each. They will flash their orange and purple crests for 20 years. But farmers like Pawar are experimenting with crops such as flowers, a luxury item where more money can often be made. “Flowers are giving much higher returns than other traditional crops. The initial investment is very high. You have to wait for four to five years for break even,” Pawar said. Flower production has boomed in India, as its 8 per cent annual growth boosts incomes in the middle class. Wedding halls are often crammed with blossoms and frequent festivals are seen as an occasion for garlanding with hot-hued blooms. "Previously, people had been using flowers only for big functions. But now, even for a small function they are buying," said Kiran Nanavare, a 31-year-old flower trader based in Pune in Maharashtra. Flower stalls dot every market and many street corners in India's big cities, selling loose stems or elaborate bouquets and set-piece presentation arrangements. The amount of land dedicated to flower production in India jumped 55 per cent to 183,000 hectares in the five years to 2009-10, according to the National Horticulture Board. Prices for out-to-please gerbera can rise to Rs 7 in the peak wedding season, Nanavare said, but can fall to Rs 4 in mid-June during the monsoon months when heavy rains and sultry temperatures keep partying subdued.— Reuters
	Tax Advice Amount gifted to wife her asset by SC Vasudeva Q. You have clarified that income from gift to wife, who has no source of income, will be clubbed with husband's income. But if once the husband pays the tax on the income from that gift from his own funds it becomes her (wife's) own asset. Any income earned on this asset is not required to be clubbed in the hands of the husband since income on income is not clubbable. My question is whether gift amount and interest thereon both will become her asset or simply income on gift will become her asset. I have received Rs 90,000 in excess of the amount of bonds which were held for more than three years. These bonds are of a debt-based scheme. What is my tax liability? Is my above income of Rs 90,000 to be added to my other income and assessed accordingly or simple payment of Tax on LTCG will do? Please calculate my liability. — Krishan Kumar A. According to the provisions of Section 64 of the Income-tax Act 1961 (the Act) in computing the total income of an assessee, all such income will be included as arises directly or indirectly to the spouse of such individual from assets transferred directly or indirectly to the spouse by such individual otherwise than for adequate consideration or in connection with an agreement to live apart. These provisions being of deeming nature, the income on income is not required to be clubbed for the purpose of computing the income of the individual who has transferred such sum for an inadequate consideration. A similar provision exists in section 4 of the Wealth-tax Act, 1957. It provides for the inclusion of the value of such asset in the wealth of the individual who has transferred to the spouse any asset otherwise than for adequate consideration or in connection with an agreement to live apart. The Section is a deeming Section and the inclusion is for the purposes of two enactments i.e. Income-tax Act and the Wealth-tax Act. The amount gifted to wife is definitely her asset and will have to be treated as such for any other purpose. The Rs 90,000 earned by you on redemption of bonds would be treated as a long term capital gain and taxable @ 20% plus applicable education cess. It would not be added to your other income. It is not possible to compute your tax liability without having the particulars of your other income Medical bills Q My employer has been deducting Income-tax from the amount of medical reimbursement exceeding Rs 15,000 per annum. Kindly advise as medical reimbursement in Punjab Government Undertakings is made in the following circumstances. i) Indoor Treatment in govt hospitals ii) Indoor Treatment in pvt hospitals subject to the rates of PGI. iii) Treatment of chronic diseases as approved by Punjab Govt. — Dinesh A. In accordance with the provisions of the Act, any amount paid by the employer in respect of any expenditure actually incurred by the employee on his medical treatment or treatment of any member of his family is not treated as a perquisite and is thus not taxable, in case such reimbursement is in respect of the expenditure: (a) In any hospital maintained by the government or any local authority or any other hospital approved by the government for the purposes of medical treatment of its employees; (b) In respect of the prescribed diseases or ailments, in any hospital approved by the Chief Commissioner having regard to the prescribed guidelines. In case of reimbursement covered at (b) above, the Section requires that the employee shall attach with his return of income a certificate from the hospital specifying the disease or ailment for which medical treatment was required and the receipt for the amount paid to the hospital. The chronic diseases prescribed for the above purpose include cancer, tuberculosis and ailment of heart, ailment or disease of eye, nose or throat requiring surgical operations etc. etc. The list is provided in Rule 3A(2) of the Income-tax Rules 1962. The conditions for the approval by the Chief Commissioner are prescribed in Rule 3A (1) of the above Rules. Accordingly, in case the medical reimbursement to you is covered within the above guidelines, the same will not be treated as a perquisite and would not be taxable.