New Delhi, March 24
Finance Minister Pranab Mukherjee said Saturday difficult decisions would have to be taken in the coming months to give effect to the FY2013 budget proposals such as capping subsidies, additional resource mobilization and expenditure control to contain the fiscal deficit.

Addressing the post budget session with the executive committee of the Federation of Indian Chambers of Commerce & Industries (FICCI), Mukherjee stated: “I shall have to take note of my strength in the Lok Sabha as no tax can be levied without the stamp of approval of Parliament, no expenditure can be undertaken and no monies can be withdrawn without the authority of the law.”

He indicated for taking these decisions diverse political parties would have to be brought on board, keeping the current political climate in view.

"We can’t go on with an approach that is divorced from the reality. But I believe the budget is not the only exercise through which all the work is to be done. I can’t ignore the ground reality that mere announcement of decisions that can’t be pursued is serving no purpose, as it happened in the past," he said.

Alluding to the timeframe for implementation of the goods & services tax (GST), Mukherjee pointed to the political situation.

“It doesn’t depend on me. I require a two-thirds majority in both houses of Parliament to operationalize goods & services tax. Subsequently, a minimum of 15 of the country’s 28 states will have to ratify the proposal if passed by Parliament. This is essential as smooth and effective implementation of GST can only be achieved by aligning central excise duties, service tax and state value added tax”, he said.

Mukherjee, however, expressed confidence that the fiscal and other reform measures could be taken forward and the economy could regain its lost momentum. “The situation today is quite similar to that in the 1990s when there was no clear majority for any party. If we were able to face the challenges then, there’s no reason why we can’t face them now”, he added.

Q: What are the amendments proposed in the FY2012-13 budget in regard to the life insurance sector and how will they affect investors? — Atul Joshi

A: Currently any sum received under a life insurance policy is exempt from income tax provided the premium payable for any of the years does not exceed 20 per cent of the actual capital sum assured. Similarly, any premium paid for a life insurance policy is deductible under Section 80C of the Income Tax Act provided such premium does not exceed 20% of the actual capital sum assured.

The budget for fiscal 2012-13 proposes to reduce the above 20 per cent limit to 10 per cent for life insurance policies issued on or after April 1, 2012. This amendment seems to have been introduced in order to limit income tax deduction to only those policies that primarily offer insurance as against others that are more of investment plans than insurance policies.

It has been further proposed in the budget to insert the definition of "actual capital sum assured" so as to provide that the actual capital sum assured in relation to a life insurance policy shall be the minimum amount assured under the policy on happening of the insured event at any time during the term of the policy, not taking into account (i) the value of any premiums agreed to be returned or (ii) any benefit by way of bonus or otherwise over and above the sum actually assured, which is to be or may be received under the policy by any person.

This amendment has been proposed in the FY2013 budget to ensure life insurance products are not designed to circumvent the prescribed limits by varying the capital sum assured from year to year.

New York City, March 24
PepsiCo Inc chief executive Indra Nooyi had total compensation worth $17.1 million last year, up 6 per cent from 2010, even as the food and drink company failed to meet its key internal performance targets. The increase is largely due to a 23% jump in Nooyi's base salary - her first raise in five years as CEO — and a gain in the value of her retirement benefits.

Nooyi, 56, has come under pressure from Wall Street for allowing PepsiCo's North American soft drink business to languish while she focused on healthier products.

Nooyi got a base salary of $1.6 million in 2011, up from $1.3 million before. The new salary is more in line with that of her peer group, PepsiCo said in its annual proxy statement, filed on Friday.

The change in Nooyi's pension value and deferred compensation was $3 million in 2011, up from $2.1 million in 2010, although her incentive compensation fell to $2.5 million from $3 million in 2010.

"Our net revenue, net income and earnings-per-share growth were slightly below the stretch targets established by the compensation committee under our incentive plans," said the maker of Pepsi-Cola, Tropicana juice and Doritos corn chips.

Excluding the impact of currency fluctuations, PepsiCo grew its revenue by 13%, net income by 4% and earnings per share by 5% in 2011. Its targets called for gains of 14%, 7% and 7% to 9%, respectively.

Coca-Cola CEO Muhtar Kent also got his first raise in salary last year since becoming CEO in 2008. His base salary went from $1.2 million to $1.4 million. His salary will rise again, to $1.6 million, on April 1. — Reuters

New Delhi, March 24
Having got some clarity from the government on diesel deregulation, the country’s largest carmaker, Maruti Suzuki India Ltd, on Saturday said it would not only ramp up production of diesel cars but also invest Rs 1,700 crore to set up a new diesel engine plant.

Already looking at setting up another production facility in Gujarat, Maruti said the new diesel plant with a total annual capacity of 300,000 units would come up at its Gurgaon facility by 2014.

Talking to reporters here about the firm’s expansion plans, Maruti Suzuki chairman R.C .Bhargava said: "We’re going to invest Rs 1,700 crore to set up the diesel plant, which will be constructed inside our Gurgaon manufacturing facility. This will be a brand new unit”. He added the board of directors had also allowed the company to hike investment by Rs 900 crore at its upcoming R&D centre in Rohtak..

The company, which is sourcing diesel engines from Suzuki Powertrain India Ltd and Fiat India, had put on hold investments on the plant awaiting clarity over any additional taxes on diesel vehicles in the FY13 budget.