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As eurozone economy shrinks, government debt burden grows
TRAI must get real on pricing in next 2G show
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GM to ramp up capacity at Halol unit
Ahmedabad, November 17 Gearing up to launch a new multipurpose vehicle, the Enjoy, US-based auto major General Motors said Saturday it would shortly have 110,000 unit annual commissioned capacity at its Halol plant in Gujarat. investor guidance
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As eurozone economy shrinks, government debt burden grows
Frankfurt/main, November 17 Without growth, there won't be enough tax revenue to help countries like Greece, Italy, Spain and Portugal narrow their deficits and slow the expansion of their debts. Their debt burdens as a percentage of economic output, a key measure of fiscal health, look worse by the day. The eurozone's combined debts are equal to about 93% of the region's gross domestic product this year and that figure is forecast to rise to peak at 94.5% next year. In 2009, the eurozone's debt-to-GDP ratio was 80%. A ratio above 90% is generally considered high and can put pressure on governments' borrowing costs. ``The worrying thing about the projections is, the peak seems to keep moving,'' says Raoul Ruparel of the Open Europe think tank. The panic in European financial markets has eased in recent months largely because of aggressive action by the European Central Bank. The ECB said on Sept 6 it was willing to buy unlimited amounts of government bonds issued by countries struggling to pay their debts. That pledge quickly lowered borrowing costs for Spain and Italy, which earlier in the year faced the same kind of financial pressure that forced Ireland, Greece and Spain to seek bailouts. But stemming the crisis and heading off a default by one or more countries aren't the same as stimulating growth. The United States economy remains weak several years after actions by the Federal Reserve helped arrest its financial crisis. Europe's economy is being held back for several reasons, a key one being austerity. Whether they got into trouble by overspending or after rescuing banks from a real-estate collapse, European governments are tackling their debts the same way: By raising taxes and cutting spending, including wage cuts for public sector workers. Italy slashed its deficit by 2.8 percent of GDP this year, but economists estimate that reduced growth by 1.5 percentage points.
— AP |
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TRAI must get real on pricing in next 2G show
New
Delhi, November 17 Having netted just about Rs 9,400 crore in the government kitty, less than a fourth of the earlier estimate of over Rs 40,000 crore, the department of telecom likely to refer the matter of spectrum pricing back to sector regulator Telecom Regulatory Authority of India. The latter had suggested an over ambitious base price of Rs 18,000 crore initially, which was brought to Rs 14,000 crore by the Empowered Group of Ministers on telecom after wider consultations. Experts point out in the present situation where the telcos are under heavy debt due to the payments which they are still making for the 3G spectrum they obtained at exorbitant rates in 2010, keeping such a high base price for the 2G auction kept the operators away. They point out that TRAI will have to keep realistic pricing, specially in those circles where no one placed a bid, and arrange a re-auction for these circles, which include Delhi, Mumbai, Karnataka and Rajasthan. In the just over auction the government had kept the reserve price for Delhi at Rs 693.06 crore, Mumbai at Rs 678.75 crore, just next to Delhi whereas Karnataka was Rs 330.12 crore and Rajasthan at Rs 67.08 crore. Officials of the telcos feel if spectrum prices in key circles such as Delhi and Mumbai were reduced significantly, it would make sense to bid for these circles in a fresh auction. Otherwise they don’t make business sense as the spectrum remains the costliest in these circles. GSM industry lobby Cellular Operators Association of India (COAI) has estimated that only about 35% of the total spectrum put up for the 2G auction was actually bid for. None of the five telcos bidding for the spectrum made any offer for pan-India airwaves for which the reserve price was set at Rs 14,000 crore, a rate considered high by the industry. Of the 144 blocks of spectrum put for bid, just 101 got bids. The metro cities of Delhi and Mumbai, which accounted for 40 per cent of the base price of Rs 14,000 crore for 5 MHz of 2G spectrum, drew no bids. COAI pointed out the amount of freed spectrum now held by the government (413 MHz) is a waste of precious national resources that could have been put to good use in driving teledensity and innovation in the telecom sector in the country. Any price discovered through this auction cannot be termed as market determined price for any future decisions as the complete spectrum put to the auction could not be sold; and secondly it was distressed buying to save the investments already made by the operators whose cellular licenses have been cancelled. |
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GM to ramp up capacity at Halol unit
Ahmedabad, November 17 At present, GM India's Halol plant is installed with an annual capacity of 85,000 units, with the company planning to launch new eight-seater Enjoy MPV from its Shanghai Automotive Industries Corp (SAIC) platform. "Shortly, we would have 110,000 unit commissioned capacity annually at Halol because the Enjoy is proposed to be rolled out from this plant in next couple of months," company's VP (corporate communications) P. Balendran told PTI. GM had recently raised its shareholding in an equal joint venture with SAIC to 91%, regaining complete control. The firm has invested over US $1 billion in India till date, a company statement said. "Halol capacity was short...so it is being expanded. With the inauguration of a press shop at Halol, it’s now an integrated manufacturing plant," Balendran said. GM has phased out its few models like-Chevrolet Optra and Aveo. "After launching the Chevrolet Sail U-VA hatchback, we plan to roll out a new sedan model of Sail by next month," he added.
— PTI |
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investor guidance
How much money can my parents, who live in India, transfer to me in Canada without any tax or legal implications? These funds are intended to purchase real estate in Canada where they plan to eventually move as immigrants. They are currently Indian nationals and have already paid their taxes in India. They might also want to send some funds to my sister who lives in the United States.
— Rohan In this regard, your parents have two options. The first one is that they can send you funds up to the equivalent of US $300,000 as gift and family maintenance. Note that this limit is per sender and not per donor. Which means that your father and mother can send up to a total of $600,000 to you and your sister. The second option is that your parents convert their resident account into an NRO (Non-Resident Ordinary Rupee) account (based upon their visas), after which they would be allowed to transfer up to one million US dollars in one financial year. As an individual, if I prepare my profit and loss account and balance sheet, how should I treat the accruals in schemes such as Provident Fund, Public Provident Fund and post office recurring deposit in my profit and loss and balance sheet? In other words, I would like to know whether I should add the interest accrual (which is not paid) as profit and simultaneously add the same amount to the investment on the asset side. — Mira I assume this query is from an accounting perspective. In this regard, note that you can either include the interest as income in the profit and loss account or add it to the investment on the asset side of the balance sheet. But you cannot do both as that would mean double counting. Including the interest as income in the profit and loss account will be the correct way to represent the interest. This way it would automatically be included in your total profit for the year. From a tax perspective, the interest from Provident Fund and Public Provident Fund is exempt. The interest from recurring deposit account is taxable as income on accrual basis. |
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