New Delhi, July 23
The government is trying to allow foreign chains into the retail business in a calibrated way to balance the interests of the consumers and grocery store owners.

The supermarkets of large global chains such as Walmart, Carrefour and Tesco will make their way into India as a Committee of Secretaries (CoS) has cleared 51 per cent foreign direct investment (FDI) in multi-brand retail. The matter will now go to the Cabinet for final approval.

During the deliberations as the policy was being formulated within the government, a committee was constituted to examine responses received to the discussion paper on introducing FDI in multi-brand retail.

According to a note for the CoS, the committee noted that in the aggregate, the number of respondents opposing FDI in multi-brand retail outnumbered those who have supported it.

Disaggregating the respondents into categories revealed that 73 out of the 109 opponents belonged to one particular category, local traders and retailers associations who are geographically concentrated in a few states. Other opponents included local manufacturers, small retailers and NGOs.

In contrast, supporters are more evenly spread across categories and belonged to various regions and backgrounds. National-level industry and trade associations like Ficci, CII and the National Retailers Association, think tanks, organised retailers, law firms and prospective investors had generally supported the proposal.

According to the note, the supporters had noted that FDI in retail would help in building much-needed back-end infrastructure, establishing supply chains by linking farmers directly to the retailers and offering quality products to consumers at reasonable prices.

They pointed out that the organised retailers will pay higher prices to the farmers compared to the existing small traders and middlemen. They also believed that FDI in MBRT will open up more and better paid job opportunities.

The main arguments made against permitting FDI in MBRT has been a possible adverse impact on small retailers and kirana shops which may be affected by loss of business. Also, possible exposure of producers to predatory pricing which could expose them to financial risk.

Another concern has been possible loss of markets for small producers due to their inability to meet higher standards and to compete with large farmers due to lower volumes and lack of continuous supply.

The arguments in favour of FDI that the government has been looking at are that allowing it will potentially enable the government to leverage additional investments in retail logistics, including storage infrastructure, thereby contributing significantly to the reduction of losses of agricultural produce.

Also, large retailers through their independent procurement operations will provide much-needed competition in the market leading to more choice for the farmers.

It will also lead to transfer of technical knowhow, which, in turn will spur growth in productivity. Organised retailers will provide more competition in the market thus dampening supplier driven price increases.

Also, the SME sector will get the necessary branding and access to international markets through multinational retail chains. The inadequacies in the present system were highlighted through the abnormal rise in prices evidenced in the recent past.

The ICRIER report on impact of organised retailing on the unorganised sector submitted to the Industry Ministry in 2008 noted that the unorganised retailers in the vicinity of organised retailers experienced a decline in their volume of business and profit in the initial after the entry of large players.

The adverse impact on sales and profit, however, weakens over time. There was no evidence of a decline in overall employment in the unorganised sector as a result of the entry. Further, the failure of large retailers in India like Subhiksha demonstrates that small retailers can offer significant competition to the organised players through better and more personalised services.

New Delhi, July 23
Tata Motors (SA) (Proprietary) Ltd., Tata Motors’ joint venture with Tata Africa Holding (Pty) Ltd., yesterday opened its assembly plant in South Africa at Rosslyn, north of Pretoria, in the Gauteng province of South Africa.

The establishment of the plant is a major step towards bolstering the operations and presence of the Tata Group in South Africa, the company said. It will roll out medium and heavy commercial vehicles ranging from four to 50 tonnes capacity.

The plant with an annual capacity of 3,650 vehicles has been established with an investment of $16.23 million (R110 million), the company said.

The plant was inaugurated by South Africa’s Minister of Trade and Industry, Dr Rob Davies, in the presence of top dignitaries from South Africa and India. Among them were Noel N. Tata, Managing Director, Tata International, Carl-Peter Forster, Group CEO and Managing Director, Tata Motors, Raman Dhawan, Managing Director, Tata Africa.Rob Davies said the launch of the plant can be attributed to South Africa's investment-friendly policies.

As danger of 'belly bomb' attack exists, the security agencies in America are seriously contemplating of utilising canines to smell passengers instead of depending upon sophisticated machinery which, according to analysts, has not been fool-proof.

The security experts are of the firm view that dogs can detect bombs implanted under a personal skin. Apart from this supreme advantage, what is most important is that canines are acceptable by the travellers who feel wary of being subjected to frisking through machines.

According to well-known detectives, the utilisation of canines at airports has not yet been translated into reality because dogs do not have ‘lobbyists and public relations officers’ that body-scanners have.

The analysts have been screaming that the use of canines at airports is much costly than utilisation of ultra-modern machines and deployment of experienced manpower.

The security agencies in India are closely monitoring the utilisation of canine exercise at international and national airports. "We may use the experiment at the Indira Gandhi International Airport (IGIA) earlier than the US", said one airport detective.

The Delhi International Airport Limited (DIAL) and other developers at the IGIA are more keen on establishing world records than providing befitting facilities and amenities to the passengers on international and national routes. After raising big terminal and long runway, the developers are constructing 100-metre high air traffic control tower. The civil work, according to officials, will be completed by November 2012 and the ATC will be fully operational by November 2013.

Three foreign women passengers and many regular travellers are of the view that ‘long runway and big buildings are appreciated but what will be more appreciated is if the passengers are provided with required facilities like wheel chairs to senior citizens and disabled persons'. The aviation analysts said the airport secured rating of world class on the basis of 'service' and on account of 'good infrastructure'.

The instances of man-made delays of flights for a long time have been causing concern to passengers, who miss their connecting flights, and also airlines, which sustain losses.

Disturbed at frequent delays, a litigation was filed in the Supreme Court which, in its judgment has said 'do not cause inconvenience to passengers by holding them on tarmacs but take them back to lounges’.

The candid view of the aviation officials was that 'passengers should be treated as human beings and not 'cargo'. Imagine this kind of incident taking place frequently in a country which, according to the DIAL, is on the take-off stage.

Q:1) If one earns capital gain from sale of hilly land fit for forestry only, can one save taxes by investing the same in:

i) A piece of agricultural land ii) A residential plot iii)A commercial plot

2) What is the time limit within which one has to invest the same to save taxes?

3) If one had purchased a piece of land for Rs 17,000 in FY 1995-1996 and sold it for Rs 2,50,000 in FY 2010-2011 i.e. after a gap of 15 years, how much will be the tax liability and what is the formula for calculating the same? Can it be totally saved by investing the same as mentioned above?

4) Another point which I want to know is that does this capital gain have any co-relation with the income from other sources? It may be mentioned that I have no source of income expect that I earn interest from my fixed deposits of my retrial benefits which too do not attract any income tax.

— Surjit Singh

A: It is assumed that the land sold is not agricultural land. Capital gains arising from sale of non-agricultural land cannot be saved by purchasing another land.

The cost inflation Index for 95-96 was 281 and it is 785 for 11-12. Your Indexed cost works out at (785/281)x17000 = about Rs 47,500. Your capital gain is Rs 2,02,500 (=250000-202500). Add this amount to your income from fixed deposits. Subtract from this total, the threshold applicable to you (Rs 2,50,000 if you are a senior citizen (over 60 years in age) and Rs 1,80,000 otherwise). The tax payable on this amount would be 20.6% of the balance.