New Delhi, March 25
The government today said it has no vindictive intention in retrospectively amending tax laws and has no plans to re-open a large number of old cases, while assuring India Inc that the I-T Department will not act like a "policeman". Interacting with industry leaders here, Finance Minister Pranab Mukherjee maintained that there was no trust deficit between the government and industry and stressed that the Centre will make all efforts to push forward economic reforms despite constraints of "limited mandate".

"I can assure the industry that there is no intention of opening plethora of the old cases on this plea or that plea because that is simply not permissible (under the laws)," he said while replying to a question at CII meet here. On industry apprehensions over amendment to the Income Tax Act, as proposed in the Budget, that many tax cases could be reopened, Mukherjee said "to that my answer is no". "This amendment has been made not with any vindictive or with asserting any particular point of view. This is absolute requirement of the law. "...But at the same time, I shall have to protect myself. I am not holding my money. I am custodian of the money given by 120 crore people through taxation," he added.

Responding to concerns expressed by industrialist Rahul Bajaj that arrest provisions in GAAR (General Anti-Avoidance Rule) could be misused, Mukherjee said: "We shall have to be careful and we shall have to take note of it because job of the I-T Department is not that of the policeman." He further added: "We are concerned with the realisation of taxes, not to sit on the judgement whether it is a crime or not, but that is a different issue."

The Finance Minister also reiterated that there was no trust deficit between the government and industry, and assured them that the UPA will make efforts to reach consensus on important issues despite constraints of coalition politics.— PTI 

New Delhi, March 25
The country's largest carmaker Maruti Suzuki India (MSI) has increased the prices of its vehicles by up to Rs 17,000 following the hike in excise duty in the Budget. The increase in prices will affect the company's models ranging from small car M800 to mid-sized sedan SX4. "There has been an average increase in prices of our vehicles by 1.75 per cent after the Budget," MSI Managing Executive Officer, (Marketing & Sales) Mayank Pareek said. Under the new pricing, the company's best selling model Alto (800 cc) will cost Rs 4,200 to Rs 5,900 more. As per the company's website, it is priced ranging from Rs 2.4 lakh to Rs 3.42 lakh (ex-showroom Delhi). The price of Alto K10 has been increased by Rs 5,500 to Rs 5,700. It is priced at Rs 3.14 lakh and Rs 3.30 lakh (ex-showroom Delhi).

Another popular model from the company, Wagon R will now be dearer by Rs 6,000 to Rs 7,600. It is priced at Rs 3.47 lakh to Rs 4.37 lakh (ex-showroom Delhi).

MSI's premium hatchback Swift will now cost Rs 7,700 to Rs 11,900 more depending on variants. It is priced between Rs 4.44 lakh and Rs 6.76 lakh (ex-showroom Delhi). The newly launched Swift Dzire will be more expensive by Rs 8,500 to Rs 12,700. it is priced at Rs 4.8 lakh and Rs 7.51 lakh (ex-showroom Delhi).

Mid-sized sedan SX4 will now cost Rs 9,400 to Rs 17,000 more. It's prices range from Rs 7.11 lakh to Rs 9.39 lakh (ex -showroom Delhi).

In the Budget 2012-13, Finance Minister Pranab Mukherjee raised excise duty to 12 per cent from 10 per cent. — PTI

New Delhi, March 25
South Korean steel major Posco may begin work on its Rs 52,000 crore steel mill in Odisha in July, as the state government is likely to hand over 2,700 acres to it by June.

"The Odisha government would start land acquisition work next month and is likely to hand over 2,700 acres of land to Posco by June in the wake of discussions Prime Minister's Office," sources said.

The development follows Prime Minister Manmohan Singh's office reviewing with the Odisha government the progress of long pending 12 million tonne (MT) steel plant in the state.

Singh is on a visit to South Korea where he is scheduled to hold bilateral talks with South Korean President Lee Myung- bak. The project is expected to figure in the discussions.

The steel plant, proposed at Jagatsinghpur district in Odisha, is hanging fire for over six years due to land acquisition hurdles. Sources said Posco is in the possession of 500 acres. It requires 4,004 acres for the 12-MTPA-capacity plant. The state government so far has acquired about 2,000 acres.

When contacted, a Posco official said once the state government transfers 2,700 acres to it, the company will go ahead with 4-MTPA capacity initially and augment it as and when the required land is available.

Officials of the Odisha government are understood to have told the PMO that Posco should at least begin work on the land already acquired for the project.

The PMO is learnt to have asked from the state officials as to why the memorandum of understanding (MoU), expired more than a year ago, has not been renewed.

The issue has been raised twice in past by South Korean President Myung-bak with President Pratibha Patil and Prime Minister Singh.— PTI

Mumbai, March 25
Coca Cola India will roll out 7.2 lakh 'golden cans' featuring batting maestro Sachin Tendulkar to commemorate his historic 100th century earlier this month. "We have put 7.2 lakh golden cans and we don't think they will last many days," Coca Cola India - Director Marketing Wasim Basir said.

"Wherever we traditionally distribute cans, these cans would be available there," he added. The 38-year-old cricketer scored his 100th international century against Bangladesh in an Asia Cup match on March 16, scoring 114 off 147 deliveries.

While nine of such cans in different colours have been launched in the markets in 2011, displaying the centuries personally picked by Sachin, the 10th limited edition Golden Can was put on hold awaiting his 100th hundred. The golden cans will be available for Rs 20.

"This is the first time in history of Coca Cola India we are honouring someone....This is the first time we have agreed to put a face on our cans," he said.— PTI

Agartala, March 25
BSNL has undertaken an ambitious Rs 20,000 crore project to establish telecom links in all villages across India and to take e-governance to rural and far-flung areas by 2014, a BSNL official said here today.

"The project for providing internet and other telecommunications connectivity to villages has been launched recently. It would be completed by the next two years," BSNL CMD RK Upadhyaya said. — IANS

Q. (a) The government has increased the limit of deposit in PPF account from 70,000 to Rs 1 lakh w.e.f. 1.12.2011. I have already deposited Rs 70,000/- in my P.P.F. account in the F.Y. 2011-12. Can I deposit another Rs 30,000 and claim the full benefit of Rs 1,00,000 u/s 80C during the FY 2011-12.

(b) The government has reduced the lock-in period of NSC from 6 years to 5 years from 1.12.2011 and also increased the rate of interest thereon. Kindly advise the rate of interest per annum for the purpose of calculating tax liability on yearly basis for 5 years on accrual basis.

— Gurnam Singh

(a) You can deposit another amount of Rs 30,000 in PPF account and avail the deduction of Rs 1,00,000 under Section 80C of the Income Tax Act 1961 (The Act) for the Assessment Year 2012-13 (Financial Year 2011-12).

(b) The year wise interest of National Saving Certificates on the basis of new notification should work out as under for a period of five years:

When you say "mutual fund", a normal investor would immediately equate it to the "share market". He believes that when he invests in a mutual fund scheme, he is investing in a share. It is not fully true. Because, with Rs 5,000 when he buys shares, he would have bought shares of only one company, while when the same Rs 5,000 is invested in a mutual fund scheme, he effectively buys a portfolio of 30 or 35 companies' shares. Thus, he minimises the risk of investing in share market.

Investing in a mutual fund also has certain amount of risk because the underlying instruments in the scheme are shares. However, with the diversification, the risk is minimised. When you invest a lump sum, you have higher risk because it requires timing the market. For an investor who is not too capital market savvy, timing the market is one big issue. Therefore, it is advisable that investment is made through Systematic Investment Plans (SIPs).

Recently, SIP investment has gained reasonable popularity. However, it is often noticed that the SIPs so started are stopped soon after a market fall. This is a wrong practice. Because for every SIP transaction to get the benefit of Rupee Cost Averaging, if there are some bad markets during the tenure of the SIP investment, the cost of purchase for the investor would come down. Then when the market starts moving up, the benefits would be higher.

Having said this, investing through SIP is nothing but "wealth accumulation". Thus, since the investment happens on a monthly basis, one can call it as saving. Such saving through SIP needs to be for a long term. Here long term would mean 5 years and above. Stopping an SIP when markets are bad is the worst thing to happen for a person who saves. To make higher returns, an SIP period needs one or two market falls during its tenure as explained above. When market falls, an SIP investor would, therefore, be happy, while a lump sum investor may be worried.

Consider a situation of saving Rs 1,000 per month over a period of 10 years. The benefit would be tremendous. A newsletter from an agency has done a back testing for the last 10 years, i.e. from 2001 to 2011. It shows that an SIP investment of Rs 1,000 per month from 2001 to 2011 would have become around Rs 5 lakh over 10 years, with a total investment of Rs 1.2 lakh, (Rs 1,000 a month for 120 months will be Rs 1.2 lakh). Assuming similar rate of growth, if the saving of Rs 1,000 continues for another 5 years, the total amount would have been about Rs 15 lakh in 15 years, against a total saving amount of Rs 1.8 lakh. And in 25 years, the total amount would be around Rs 1.7 crore. I must hurriedly add that these are figures based on past performance and this does not indicate future performance. The return on this is about 24%. The future, however, may not see such kind of growth. Assuming over a period of 25 years you make half of Rs 1.7 crore, you could still accumulate about Rs 70-80 lakh. For an amount of Rs 1,000 a month, Rs 70-80 lakh is an excellent accumulation.

When we talk about Rs 1,000 a month, it means that it is just Rs 35 per day. In today's times, this is a very partly sum so much so that if you buy three litres of water, it will cost you around Rs 35. In such a situation, saving around Rs 5,000 per month is not very difficult. Saving such small amount will be beneficial in the long run and it is important that it is not stopped in between.

This being the case, a SIP can be looked at "goal-oriented savings". When a child is born, start an SIP of Rs 1,000 or Rs 2,000 for 25 years or so. The child's marriage may be taken care of. Another SIP for 18 years when the child is born will take care of the education part. When a person gets a job, which could be around 25-26 years of age, start a SIP for Rs 1,000 or Rs 2,000, by the time the person is around 50 years of age, he would get a large accumulated amount. This can be used for retirement fund. If instead of Rs 1,000 it is Rs 2,000, then that would mean further escalation of accumulated fund. Also, when there is an increment, there can be additional SIP opened for a part of the increment amount. Likewise, there can be various goals that one can look at and start saving and also benefit from the long term rupee cost averaging.

For all these, what is important is to choose a good diversified mutual fund scheme with a proven track record. It is not for nothing that in olden days they say "Every drop makes an ocean". SIP is a very powerful method of saving.

The writer is Deputy CEO, Association of Mutual Funds of India. The views expressed are his own.

The week ending March 23 closed on a fairly quiet note but within the week the markets were extremely volatile. The BSE Sensex gained 43 points on Tuesday, 286 points on Wednesday and 165 points on Friday while it lost 193 points on Monday and 405 points on Thursday. The net change for the week was a loss of a mere 104.46 points or 0.60% to close at 17,361.74 points. The NSE Nifty, similarly, gained 18 points, 90 points and 50 points while it lost 61 points and 50 points. The net change was 39.7 points or 0.75% to close at 5,278.20 points.

The broader indices like the BSE 100, BSE 200 and BSE 500 lost 0.67%, 0.56% and 0.56%, respectively. The BSE Midcap and BSE Smallcap lost 0.17% and 1.17%. BSE FMCG was a big gainer up 2.71%. BSE metal was a big loser down 2.54% and BSE oil down 2.2%. In individual stocks, Hind Unilever gained 3.28%, Hero Motocop up 3.22% and ITC gained 2.94%. Tata Motors lost 4.80%, Maruti lost 4.73%, Reliance Industries lost 3.63% and gold loan companies Mannapuram lost a staggering 19.31% while Muthoot lost 11.75%.

The volatility in the markets is pointing to the nervous state of affairs and investors are worried about the flip-flop of the government. Railway passenger fares which were raised after nine years were rolled back for all classes except first and second AC indicating the coalition politics' precarious condition. The government filing a review petition in the Supreme Court on the Vodafone case and the court refusing to entertain the same was welcomed by the markets but also showed the government's resolve in filing a case once the budget is passed. This is being looked at as negative and could affect FDI in future. China and Germany are facing slowdown and reported some disturbing numbers while the US turned out positive numbers. All of this kept the global markets fairly confused and volatile.

The Indian rupee lost ground and closed on Thursday at Rs 51.20. Readers would remember that Friday was a bank holiday on account of Gudi Padva. The greatest driver has been liquidity and that showed some signs of slowing down last week. FII investment last week was Rs 1,290 crore while domestic institutions pulled out Rs 145 crore. The week ahead will see the expiry of futures for March on Thursday, March 29, and the next day would be the last trading day for the current year 2011-12. For Income tax purposes, the last day would be Wednesday and the remaining two days would be in the next year. These two events would ensure volatility and also the possibility of some support to the market to do some NAV propping.

One need not buy for the probable NAV propping which may or may not happen but it may be a good and profitable idea to use any rallies to exit the market where profits are being made. The government is tinkering with the idea of raising petrol and diesel prices, but when the same would happen is anybody's guess. The price rise would lead to higher inflation and also a chain reaction on a number of things but this would be a necessary evil. It's impossible to carry on the present practice of such huge subsidies which are never paid in full and the poor PSU companies are left holding the baby. The oil marketing companies have written to the government asking that they again start regulating the prices of petrol products so that they are paid for their under recoveries which is not being done currently.

The writer is founder of KRIS, an investment advisory firm. The views expressed are his own.