New Delhi, January 16
Punjab has sought a special one-time grant of Rs 5,000 crore from the Central government to meet the shortfall in the revenue deficit.

Punjab Finance Minister Parminder Singh Dhindsa told The Tribune despite best efforts the revenue deficit target has not been met due to state’s debt burden and other reasons such as incentives for neighbouring hilly states and the economic slowdown. The demand was made in the pre-budget meeting of state finance ministers’ with Finance Minister P Chidambaram here today.

Among other demands, Dhindsa sought a freight equalisation policy for raw materials so that the land-locked states like Punjab don’t suffer on account of high freight costs. This, he said, will help to revive the industry, boost exports and increase investments.

Punjab has also sought extending both the Delhi-Mumbai Industrial Corridor and the eastern freight corridor till Amritsar. In addition, it along with other states has also demanded that the borrowing limit of 3.5 per cent of state GSDP not be lowered to the proposed 3 per cent given the economic slowdown and be continued for another year. Dhindsa said a cut in borrowings will cut down planned expenditure and affect growth.

Punjab also advocated a National Mission for Diversification in Agriculture with an outlay of Rs 5,000 crore for the original Green Revolution states to help a move away from staple crops like paddy to others.

Dhindsa also advocated along with other states that the Central schemes be made more flexible. He also called for revisiting the criteria for these schemes so that the developed states do not suffer. There was also a demand for soft loans from Nabard with reduced rates and increased quantum of refinancing. Dhindsa also sought incentives for the bicycle industry in the form of freight subsidy and other sops.

The Haryana Government raised the issue of CST compensation as being a net producing state, Haryana will incur huge revenue loss on account of zero rating of central sales tax (CST) under the GST dispensation and accordingly, under the GST regime. Haryana Finance Minister Harmohinder Singh Chattha said the state should be compensated by the Union Government on long-term basis.

Last year, the state had suffered a loss of Rs 3,100 crore on account of reduction in the rate of CST from four per cent to two per cent and for the current year, the loss would be to the tune of Rs 3,500-3,600 crore. Chattha said such a loss will have a crippling effect on the state finances unless the state is compensated for the loss in respect of the previous financial year as well as the current financial year. 

New Delhi, January 16
Industry chambers have asked the government not to levy a transaction tax on commodity derivatives in the forthcoming Budget. In separate letters to the Finance Ministry, CII, Ficci and Assocham have said commodity derivatives were primarily being used for hedging and imposition of commodities transaction tax (CTT) will push up cost of hedging transactions and drive out genuine hedgers.

 “A tax on commodity transactions will make it costly and thus dissuade those who desire to hedge their risks using commodity derivatives. This, in turn, will reduce market liquidity through reducing volumes and increasing bid-ask spreads,” CII Director-General Chandrajit Banerjee said in a letter to the Finance Ministry.

In its communication to the Finance Ministry, Ficci wrote that commodity exchanges are risk management platforms and provide effective hedge against adverse price movements in the physical markets.

“Treating incomes from commodity derivatives transactions as speculative deters the commercial traders or hedgers to participate in the commodity derivatives markets,” Ficci said.

It also asked the Finance Ministry to exempt derivative transactions on commodity exchanges as “speculative transactions.” In its letter to Finance Minister P. Chidambaram, Assocham also echoed similar concerns. It said an attempt was being made to equate commodity and equity markets but such arguments were “fallacious” in nature.

“Unlike the stock market, the raison d’être of commodity derivatives market is risk management. Commodity derivatives are hedging instruments, and fundamentally different from equities,” Assocham said. He added commodity market already attracted a slew of taxes such as mandi tax, VAT, excise duty, and customs duty.

CTT was first proposed in the Budget for 2008-09 but the proposal was eventually dropped after the Prime Minister’s Economic Advisory Council cautioned against such a levy. The government currently levies Securities Transaction Tax on equity trading.

A section of the market is of the view that money, which would have otherwise come to stock market, is now flowing into commodity derivatives due to STT on equity trade. In fact, in their pre-budget meeting with Chidambaram and bankers also demanded levy of CTT.

However, commodity exchanges categorically deny any such shift in investment flow and point out that equity futures volumes have only moved to equity options where transaction tax is lower as it is levied on option premiums, and not on contract value.

New Delhi, January 16
Hyundai Motor India will increase prices of its vehicles by up to Rs 20,000 across all models by February 1.

"On account of rise in input cost and fluctuation in currency, we will increase the prices up to Rs 20,000 by February 1, 2013 across all the models starting from Eon to Santa Fe SUV," Hyundai Motor India Ltd (HMIL) vice-president, sales and marketing Rakesh Srivastava said.

The company sells a range of vehicles starting from the entry level hatchback Eon priced at Rs 2.77 lakh-Rs 3.83 lakh to luxury SUV Santa Fe tagged at Rs 22.61 lakh-25.63 lakh (ex-showroom Delhi).

Rival and market leader Maruti Suzuki India has increased the prices of its different models, except the imported sedan Kizashi and SUV Grand Vitara, by up to Rs 23,000 from today. — PTI

New Delhi, January 16
Grounded Kingfisher Airlines (KFA) today made another attempt to convince DGCA on its revival plans, but failed to provide any details on its funding which the aviation regulator wanted.

Kingfisher CEO Sanjay Agarwal met Director General of Civil Aviation (DGCA) Arun Mishra to apprise him of the prevailing scenario facing the airline, but sources said he gave no information about any commitment by the airline's parent company, UB Group, on financing the revival plan.

The sources said Agarwal told the regulator that the airline would be ready to resume operations from the Summer Schedule, which begins in April.

The Kingfisher chief said the airline has not received no-objection certificates from any of the airport operators, including the Airports Authority of India, though he claimed that some of the oil companies and aircraft leasing companies have given it a go-ahead.

Today's meeting comes days ahead of a crucial meeting of a consortium of bankers that have lent over Rs 7,500 crore to the now defunct airline.

The consortium has been refusing to lend any more money to the airline till the promoters bring in more funds. The airline suspended operations on October 11, last year and its operating licence lapsed on December 31. — PTI

Chandigarh, January 16
Having established a global footprint over the past five years since the acquisition of Sylvania, Havells India is now targeting rural and semi-urban areas to expand its business.

The company is also on a major expansion spree. Having invested Rs 150 crore for expanding the production capacities of its two plants at Baddi and setting up a greenfield production lighting fixture unit at Neemrana, the company is looking at doubling its production capacity of switches and circuit protection devices at its Baddi plant, from 5 lakh stock-keeping unit (SKUs) to 10 lakh SKUs within three months.

Talking to The Tribune here today, Sunil Sikka, president of Havells India, said with the growing demand for quality switches at the entry level, the company has decided to cater to this segment. “In order to capture the rural market, we today launched a range of low-cost entry point piano switches, called Reo. After assessing the response in the semi-urban and rural markets, we will launch a new range of CFLs and other lighting equipment for this market,” he said, adding that these switches will be marketed in towns having population of less than one lakh.

He said with the launch of new range of switches, the company is looking at increasing the turnover of switches by Rs 200 crore within first year of its launch. As of now, the switches business of Havells India is worth Rs 300 crore. 

New Delhi, January 16
Looking at declining profits and concerns raised by telecom operators with the government, the Department of Telecom (DoT) has in its recommendations to the Finance Ministry said since the telecom sector is classified as an infrastructure sector, it should be given all concessions like other infrastructure sectors get.

The DoT has asked the Finance Ministry that Benefit Linder Section 80 IA should be extended to all telecom services, which would mean a 100 per cent tax holiday for l0 years in a block of 20 years, as applicable to other infrastructure sectors.

The DoT has also proposed that the government should allow deferred payment of excise duties for telecom equipment and their parts items ITC HS 8517 and 852560 on an interest-free basis for a period of five years.

To promote manufacturing of telecom equipment within the country, the DoT has recommended 10 years of tax holiday on a block of 15 years on all profits and gains from manufacturing industry, including mobile phone industry, its parts and components.