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Maruti plans to recruit new workers for Manesar plant
RIL awarded
Politicians gang up to get more out of oil PSUs
Audi eyes No. 1 slot by 2015
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Aviation Notes
Investor Guidance
Market outlook: Volatility
to continue
Relief for floating home loan borrowers
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Maruti plans to recruit new workers for Manesar plant
New Delhi, September 11 With no signs of an end to the standoff that started on August 29, the company has decided to give the current workers time till Monday to sign the "good conduct bond" before replacing them with new workers. "From Tuesday onwards the company will start hiring trained technicians, who will be on the permanent rolls, to replace the current workers who refuse to sign the bond," a source close to the management said. When contacted MSI spokesperson declined to comment. Production has been severely hit at the first plant in Manesar since August 29 when the management prevented workers from entering the unit without signing a 'good conduct bond' after alleged "sabotage" and deliberate quality compromise on some cars. The bond required the workers to declare that they would "not resort to go slow, intermittent stoppage of work, stay-in-strike, work-to-rule, sabotage or otherwise indulge in any activity, which would hamper the normal production in the factory". So far, 81 workers have signed the bond but majority of them have refused to sign it. MSI has about 2,500 workers at the first plant in Manesar and around 1,000 of them are permanent. During the first two days of the standoff, MSI dismissed five permanent workers. In addition, it suspended 26 permanent workers and discontinued the services of another 18 trainees on charges of sabotage and causing quality problems in cars. On Friday, Haryana Labour Commissioner Satwanti Ahlawat said the good conduct bond, which the company management is insisting its workers at Manesar plant to sign, is as per rules. "Whatever the bond that the management (MSI) is asking its workers to sign is as per rule and workers will have to sign it," she told PTI, adding the state labour department was persuading the workers to rejoin work as soon as possible. Besides, MSI's parent Suzuki Motor Corp (SMC) has also stood behind the company with Chairman Osamu Suzuki ruling out any compromise on discipline.
Suzuki had told representatives of Maruti Udyog Kamgar Union (MUKU), the elected union of Maruti Suzuki India (MSI) that the management of the Indian arm would not accept any indiscipline in the company.
"Indiscipline is not tolerated... not in Japan, not in India. It is never in the interest of any company and its people," Suzuki said. — PTI |
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RIL awarded
New Delhi, September 11 "The Gadimoga operations of Reliance Industries Ltd have received a five-star rating in the occupational health and safety audit from British Safety Council," RIL said. The British Safety Council audit is an internationally recognised system, used by leading organisations worldwide to benchmark their health, safety and environment (HSE) management systems against the best practices. — PTI |
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Politicians gang up to get more out of oil PSUs
Mumbai, September 11 Following a decision taken last month, Maharashtra's sugar co-operatives decided not to put in bids for supplying ethanol to public sector oil companies. The oil companies have so far managed less than 70 per cent of the one billion litres of ethanol required for the blending programme, according to sources. "Only sugar mills in UP and Gujarat have put in their bids while sugar mills in Maharashtra are waiting for higher prices," says a senior official at the Maharashtra Federation of Sugar Co-operatives. Backed by Union Agriculture Minister Sharad Pawar, senior leaders of the Nationalist Congress Party and the Congress are demanding that public sector oil companies pay Rs 35 per litre of ethanol sourced from the sugar co-operatives. Last year, the oil companies hiked prices to Rs 27 per litre after sugar co-operatives undertook a similar boycott. Subsequently, the sugar co-operatives went on to extract transportation charges to deliver the ethanol to the collection points set up by the oil companies. Senior NCP leader and president, National Ethanol Manufacturer's Association, Vijaysinh Mohite Patil told reporters recently that the sugar co-operatives would divert ethanol to other industries like alcohol manufacturers if the price was not raised to Rs 35 per litre. However, a section of the sugar co-operatives in the state want ethanol prices to be linked to petrol so that they do not have to negotiate for periodic increases in prices from the oil companies. |
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Audi eyes No. 1 slot by 2015
Mumbai, September 11 "Having recorded 95 per cent growth during the January-August period here, India is well ahead of other growth markets for us globally and we are confident that we are on track with our vision of being the No. 1 luxury car maker in India by 2015," Audi India Head Michael Perschke said in a statement. In August, Audi reported a 100-plus per cent jump in sales to 510 units, as against 250 units in the month-ago period. During the January-August period, its sales jumped a full 95 per cent to 3,655 units from 1,876 units in the corresponding year-ago period. — PTI |
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Aviation Notes
Fog, storm, heat and rain are natural phenomenon. They cause flight disruptions worldwide. But, sadly, more air operations are affected in this country, particularly Delhi and Mumbai, than anywhere in the world.
When these natural elements don't come into play, slippery runways, owing to rains, force aircraft to veer into 'kutcha' areas and cause trouble to authorities to toe away wide-bodied planes lying submerged in mud and slush. According to a report, 148 passengers from Kuwait had a miraculous escape when both nose-wheel tyres burst following heavy landing at Goa airport. Earlier, a Turkish airlines plane carrying 115 persons skidded off a runway at the Mumbai airport on Friday (September 2) . This was third incident in less than a week, raising concerns about the state of the airports. The Airbus A-340 at Mumbai from Istanbul lost control and misjudged a turn and went into 'katcha'. This was a bad incident. The worse was that it took authorities 72 hours to remove the aircraft. As a result of this uncalled for operation, most of the operations had been adversely affected. Analysts were asking when such was the situation with a small aircraft, what will be the position when super-jumbo and other big aircraft are involved in such incidents. Again, when no such negative report comes through these natural elements, MiG-21 or some other aircraft or helicopter gets crashed in one part of the country or another. On September 6, near Rajpura, an Air Force MiG crash-landed into a farmhouse. Luckily, the young pilot, Flight Lieutenant Aurnab Ghosh, escaped with injuries. The IAF has ordered a court of inquiry into the incident. But the cause of concern has been as to why such incidents and mishaps are on the increase? Singapore Airlines, one of the prestigious carriers, has been allowed to operate low-cost flights shortly. The operations will provide Indian carriers like, Indigo, Jet and Air Asia (not exactly Indian) run for their operations. The Singapore Airline's manager (Southern India) Richard Tan, said the operations would be cost-competitive. The operations will be on long and short-haul routes and according to airline officials, there would be no compromise on quality and service. The health of many of the small airlines is not as strong as it ought to be. Several of them are sustaining losses. About six, more known among them, owe huge amounts to oil companies and the Airports Authority of India. While some of them have been barred from receiving oil on credit, others are provided oil against weekly payment. The AAI has given Kingfisher, according to reports, 15-day window. The overall situation is not as rosy as it should be. There are some other carriers, which are facing paucity of trained cockpit and cabin crew staff. |
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Investor Guidance
Q: What is the difference between the terms NRI and PIO and please inform me if there is any difference between the tax rules/rates etc. between the two?
— Sridhara Rao A: An NRI is generally a person who has stayed in India for 182 days or lesser in any financial year (Apr-Mar). Such a person, though living abroad, is an Indian citizen and has an Indian passport. A PIO (Person of Indian Origin) on the other hand is an NRI who has subsequently given up Indian citizenship and the Indian passport. The spouse and children of a PIO also automatically qualify to be PIOs. The law uses the terms NRI and PIO interchangeably and the rates of tax are absolutely the same for both. Even the rules are largely the same except that a PIO cannot sell his property to another PIO or an NRI, he has to necessarily sell it to an Indian resident. PF withdrawals
Q: Please clarify when should one withdraw his provident fund (PF) if one leaves the company? When is the ideal time to withdraw the PF if the said PF a/c is no more in use? In case of withdrawal, is the money taxable? — Nitin Kaushal A: There are three types of Provident Funds: 1. Statutory Provident Fund under the Provident Fund Act, 1925. 2. Recognised Provident Fund (RPF) covered by Employee’s Provident Fund and Miscellaneous Provisions Act, 1952. 3. Unrecognised Provident Fund. We presume that you belong to the second category. Payment of accumulated balance in RPF is taxable under Rule 9(1) of Schedule-IV(A) to the Income Tax Act, unless the employee renders continuous service with his employer for 5 years or the discontinuance is due to causes beyond the control of the employee. This balance is also exempt if it is transferred to the employee’s account in any RPF maintained by his new employer or by the PF commissioner. Service under his former employer or employers shall be included in computing the total period of continuous service. Though there is an opportunity to withdraw the entire balance corpus after serving an employer for 5 years, it is better to transfer the funds to your next employer since the interest is tax-free and hovers around 9%. However, upon retirement or when one leaves the company and does not wish to transfer the PF, it has to be withdrawn. Maintaining the provident fund balance when one is no longer an employee of the company is not regular and will lead to incidence of tax upon withdrawal from the time one has not been on the rolls of the company. Tax exemption for senior citizens
Q: Union Finance Minister during the presentation of FY 2011-12 budget announced income tax exemption on the annual income up to Rs 5 lakh to those or who are 80 years of age or above. I shall attain the age of 80 years on 15.9.2011. I want to know whether I qualify and can avail of this exemption from the beginning of FY 2011-12? — O. P. Sharma A: Budget 2011 introduced a new category of taxpayers, namely the very senior citizen, for whom the basic exemption limit has been specified to be Rs. 5 lakh. Consequently, if you attain 80 years of age anytime during the financial year, even on 31st March, the last day of the year, you can claim the benefits available to very senior citizen for the entire year. Please note that Rs 5 lakh is not an exemption but it is the tax threshold of total income (after taking deductions under Chapter VI of ITA (Sec. 80C, 80D, etc.) below which the tax rate is nil. IT return of deceased
Q: My wife who was a senior citizen passed away on 14.08.11. I shall be obliged it you guide me on the following points: 1. How to file her income tax return for FY 2011-12? 2. Should there be two returns for the period of 01.04.11 to 14.08.2011 & 15.08.11 to 31.03.2012 3. In which name & in which ITR Form should the return be filed - the income is from interest only. 4. Would the basic exemption for Senior Citizen be available? — Rajesh Vaishnaw A: Though it is possible for you to file returns for the entire year in the name of your wife, you will do well by filing two returns for the periods as mentioned by you in the names of — 1. Your wife and 2. Estate of your wife: The total tax liability will be less since you will be able to split the income into two different entities. Moreover, you can claim the benefit of senior citizen on income earned by her until her death. This advantage cannot be claimed by her Estate since the Estate has no age and therefore, the normal threshold will be applicable to it. You are required to distribute her assets amongst the beneficiaries as mentioned in her will. In the absence of her will you can get it distributed as per the Hindu Succession Act or a Family Understanding or a probate obtained from a court of law. This is a time consuming process and if any part (or whole) of the Estate gets spilled over to the next financial year/s, you can continue to file the returns in the name of the Estate. The Form ITR-2 may be used for both the cases. NRO account
Q: My son has recently accepted employment abroad and hopes to continue and shall be an NRI during this year. He had four saving bank accounts before he left India. One is linked to the repayments of car loans. Similarly, others are linked to things such as mortgage payments, brokerage and other such items. Hence he is not in a position to close any of the accounts. However, the problem is that none of these bank branches deal with forex or any NRI related matters. Under the above circumstances, my son proposes to open a separate NRO A/c. He further plans to remit EMIs (payments for his outstanding car & home loans) directly from abroad. Will the arrangement planned by my son be in keeping with the law? — KD Uppal A: Regrettably, the answer is in the negative. On becoming an NRI, the person is mandatorily required to inform all his banks and also all the companies where he is a shareholder or MFs where he is a unitholder about the change in his status within a reasonable time. Instead of informing each company, he or she may also inform the Depository Participant (DP) with which he holds an account and they will do the needful. The banks will redesignate the accounts as NRO. He can use this account the same way as he used it before becoming an NRI. It is illegal for an NRI to continue to hold his normal Resident bank account. The NRI is free to deal with all his investments and assets he held prior to becoming an NRI any which way he desires. The only restriction is that the original corpus is non-repatriable. In other words, there is no need to close the account/s. The authors may be contacted at wonderlandconsultants@yahoo.com |
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Where does one put money to preserve and grow it in the current environment? Krishnamurthy Vijayan, former mutual fund CEO and investor in the MFI sector, takes a look at the asset classes
Where to invest
The world is a dangerous place: Terrorism is the new World War Three and it is only likely to increase with the frustration of a recession that shows no signs of ending and the world's leaders bungling along in the glare of 24x7 media isn't doing much to help build confidence. Where does one put money to preserve and grow it, in the current environment? Let's look at the asset classes.
Investing in gold Gold does look over-bought. Precious metals generally tend to become a safe haven in times of extreme disturbance, but given that prices have been shooting up in the past five years, I think there really isn't any justification to hoard more gold for you as a lay investor. Firstly, it is expensive. Secondly, the haircut when you sell it must be factored into the price. Thirdly, unless you are really starving, it is highly unlikely that you will sell it. Let the traders with their charts and knowledge of oil prices focus on gold. Real Estate Real Estate is always a good thing and like gold, "they don't make it any more", but personally I have booked profits in this segment. Black money, Real Estate Funds, easy finance and the self-fuelling boom mentality have sent prices soaring. The prices of most urban projects are irrational and the supply outstrips real demand i.e the "need a place to live" factor. Coupled with the huge "loading", dubious title, poor construction quality and shrinking rental yield, I think my next purchase is going to wait on a bust. Equity and mutual funds Equity, including equity via mutual funds, is a great option and as former "financial health professional" I can't but say that this is a timeless asset class: It not only represents true economic activity and real asset creation, but also has a dynamic self-correction built-in: You will always get an entry level that is attractive, and wow is there a festival dhamaka around the corner right now! Index Funds The problem in this area is two-fold (a) financial health professionals have less job-specific education than almost any other profession (b) by and large, the science of identifying good companies is about as exact as Tarot Card reading. Therefore, I have been advocating index funds for some time: choose the biggest and the best, benefit from the self-correction performed by the index committee and don't depend on the nut that holds the wheel…he is guessing. Should you wait for the correction? Well the correction happens because most people are waiting for it and the turnaround happens because most people are sick of waiting for it….and you will probably miss the bus in both directions - invest systematically. The Reserve Bank of India is responding to food price inflation. Food price is a phenomenon of the untaxed, unregulated cash-and-carry economy that is running parallel to the one that RBI sees. By hiking interest rates and preventing external inflows, RBI is not reducing food prices and is also forcing the economy to stall. In the meantime, they have given you an opportunity. Fixed Deposits Lock into five-year deposits and five-year AAA rated retail bonds. I'd indeed say this is a great time to shift a big chunk of your money from other assets to this category….the good old bank FD…..and don't mess things up by taking loans for stuff - the lending rates are even more absurd than the FD rates, for the retail investor. This all looks like pretty conventional stuff and therein lies the insight - strangely the rules of investing remain the same even in the current scenario, but the high interest rates present a special opportunity. Views expressed are the author’s own
Market outlook: Volatility
to continue
The FII inflows, which had turned positive over the last 7-8 trading sessions, have again become negative over the last two days, not helping matters. RBI has its monetary policy meeting this Friday and the consensus view is that interest rates will be tweaked upwards. Our markets lost ground on Monday, gained for the next three days and lost almost all its gains on the last day. The BSE Sensex after touching a weekly high of 17,211.8 on Friday closed at 16,866.97 points, a gain of 45.51 points or 0.27%. The NSE Nifty, similarly, made a weekly high of 5,169.25 on Thursday and closed at 5,059.45 points, a gain of 19.45 points or 0.39%. This gain should be looked in perspective to the fall from the high to the close in the BSE Sensex of 355 points and the previous week's gain of 973 points. In the Nifty, the fall from the high to the close was 109.80 points and the previous week's gain 292.20 points. These events are indicators that if the market does not regain lost ground this week, we could see sharp losses in the following two weeks. The broader indices like the BSE Midcap and BSE Smallcap were bigger gainers and clocked gains of 3.22% and 2.39%, respectively. The rupee has been a big loser during the week and we are at a one year low against the dollar. This should normally help in restricting FII outflows but one is simply not sure. Coming to the week ahead, markets would be volatile and unpredictable. There will be a downward pressure on the markets and the G7 meeting happening over the weekend could decide movement of global markets on Monday. In India, focus would be on the RBI meet and the terror trail after last week's Delhi High Court blast. The Monsoon session of Parliament is over and one would now expect the beleaguered government taking action to resolve these issues. In the week beginning September 12, the BSE Sensex has support at 16,728, then at 16,499, then at 16,347 and finally at 16,068 points. It has resistance at 17,108, then at 17,223, then at 17,489 and finally at 17,664 points. The NSE Nifty has support at 5,016 points, then at 4,945 points, then at 4,899, then at 4,806 and finally at 4,720 points. It has resistance at 5,133 points, then at 5,171 points, then at 5,250 points and finally at 5,323 points. The week will be driven by events and movements within the day could be sharp. Arun Kejriwal is founder of KRIS, an investment
advisory firm. Views expressed are his own
Relief for floating home loan borrowers
New Delhi, September 11
Chopra said this move would benefit particularly, such borrowers who have opted for "floating rate" option are facing hardships as their EMI is inching up quarter after quarter or their overall term of loan is getting increased. Any borrower who is now in a position to prepay his loan should not be subjected to a financial penalty of 2% of the outstanding loan amount and the new policy will bring lot of cheers to thousands of borrowers, he added. One of the key mandates of any regulator, Chopra said is to ensure that interest of the ultimate consumer is always kept at the top and this move on part of RBI is a clear evidence of the same principle. However, this move may not please some of the lenders. According to Chopra, on the other hand, lenders like banks or home loan companies are not going to like this move as it affects their cash flow planning and if a borrower decides to prepay the loan, the future interest income from such borrower ceases instantly. The RBI has been increasing policy rates to contain inflation and inflationary expectation to prevent the economy from getting overheated. The RBI has raised the policy rate (the repo rate) 11 times by a cumulative 325 basis points (bps) since October 2009. The increase in the prime lending rates (BPLRs) of banks as a result of the increase in policy rates by the RBI has resulted in increase in EMIs, particularly in respect of loans which are contracted at floating rates.
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personal finance
Stock markets were extremely choppy in the week ended September 9. US President Barack Obama announced a $447 billion package to revive jobs and the economy, but the Dow Jones lost 423 points in the last two trading sessions to end at 10,992 points. There are concerns in the US and Europe and these issues are affecting global markets.
Anil Chopra, Group CEO, Bajaj Capital says, "It is a welcome move and a much-needed relief to home loan seekers who have been at the receiving end due to continuous increase in the home loan interest rates. Floating rate loans are linked to the interest rates in the market and vary from time to time, going up or down. Fixed rate loans are at a fixed rate and do not vary whatever the movement in the interest rates maybe. In recent years, banks and NBFCs have mostly moved to a floating rate regime thereby protecting themselves from the vagaries of the interest rate cycles. The RBI move covers only floating rate loans and banks can levy pre-payment charges on fixed rate loans.
