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Sunday, September 13, 1998
|FIPB approves Rs 760 crore projects
NEW DELHI, Sept 12 The Foreign Investment Promotion Board today approved projects worth Rs 760 crore which includes projects by auto majors Honda Motor Corporation and Fiat Auto among others.
Small units in Haryana
struggle for survival
for hobby tutors organised
Palace bags best business hotel award
bags Rs 85 crore order in Bangladesh
Bank of Patiala
FIPB approves Rs 760 crore
NEW DELHI, Sept 12 The Foreign Investment Promotion Board (FIPB) today approved projects worth Rs 760 crore which includes projects by auto majors Honda Motor Corporation(HMC) and Fiat Auto among others.
The joint venture project between United Breweries and United Distilleries has , however, been deferred by the Board as the Department of Economic Affairs has sought more time to go into the equity restructuring proposal.
The HMC proposal for hiking its equity stake by 5 per cent from the present 90 per cent in the Honda Siel Cars India (HSCI) joint venture has been approved.The proposal involves an investment of Rs 180 crore.
HSCI was initially floated as a 60:40 joint venture between HMC and the Siel Group. However, Siel Group, promoted by Siddarth Shriram, sold off its 30 per cent stake to HMC with buy-back agreement later.
Following the approval today, Siel Limited would immediately buy-back 5 per cent of its shares from HMC. The rest of the buy-back agreement holds as before.
Fiat Autos proposal to set up a paint shop by one of its associates or an American Company PPG has also been given the go ahead by FIPB.The paint shop project involves an investment of Rs 43 crore.
GE Lighting has been allowed to hike its equity share by ten million dollars from the present $40 million.
In the telecom sector, a proposal by Armess Finance Limited of Mauritius has been given the go ahead for setting up of a telecom gateway and marketing of telecom services.
Armess Finance Limited would pump in Rs 49.4 crore holding an equity stake of 49 per cent with the rest lying in the hands of the Indian promoters.The final approval, however, is subject to necessary clearances from the Department of Telecommunications.
Bharti Internet serivces, has also been allowed to invest in a project for providing internet and multi-media services. The initial investment in the project would be Rs 10 crore whic could go up to £3 million in the period of three years.
In economic affairs,Allianz Alpica Risk management Services has been allowed to set up consultancy services with a total investment of Rs 62.5 lakh.
It will be 50:50 joint venture between Indian promoters Alpic Finance Limited and Associates and two foreign collaborators Allianz of Germany and MMI of Australia.
In the energy sector, AEC Corporations proposal to set up a wholly owned subsidiary with an investment of Rs 4.2 crore has been given the go-ahead.AEC Corporation was the highest bidder in the Orissa Power Corporation bid.
In Information and Broadcasting (I&B),Shristi Videocorp has been allowed to produce software. The project involves an investment of Rs 2.4 crore with an NRI investment of 20 per cent.Presently,the company is uplinking from Singapore for a Gujarati Channel.
Small units in Haryana struggle
GURGAON, Sept 12 A number of units in the small scale sector in Haryana struggle for survival as they are unable to compete with their counterparts in the neighbouring states.
The units producing products, mainly bought by the government, are said to be going through the worst phase of their existence, especially after the state rolled back the 15 per cent price preference extended to them at the time of purchase of the products.
Although the benefit of price preference was withdrawn sometimes in the middle of the last year, its negative impact was now felt more in the face of growing competition from their counterparts in the neighbouring states.
The problem has increased as the Haryana Government allegedly often ignores the products of these units and by products from units of other states.
The general allegation is that the units were ignored even when they offered quality products and competitive price. On the contrary, the neighbouring states continue to give protective cover of preference price policy to their units in the small scale sector at the time of purchase. Also, the popular opinion among the industrialists is that the neighbouring states prefer the products of their own industries even though tenders were invited from across the country.
The recent hike in the power tariff has hit the small scale industry hard. The present structure of tariff for the industrial sector, is the highest in the country.
According to the Faridabad Small Industries Association, the increase in the tariff at a time when the industry was reeling under tremendous recession has come as major blow , especially to small industry.
Add to it was the governments revision in the minimum wages. This further hit the industries, especially as their competitiveness was eroded resulting in shrinkage of their profits.
A number of industrialist
told TNS that schemes providing concessional interest
rate to SSI do exist but limit credits within Rs 2-5
lakh. One industrialist remarked: This kind of
finance today is not sufficient even to set up a good pan
shop. Moreover, this concessional interest was also
between 12 to 14 per cent.
Exide gets MAAA
NEW DELHI, Sep 12 (PTI) Credit rating agency, Investment Corporation and Credit Rating Agency (ICRA) has assigned highest safety grade, MAAA, to the proposed Rs 15 crore, 18-month debenture programme of Exide Industries Limited (EIL).
The rating agency also
assigned LAA plus rating, indicating high safety, to the
proposed Rs 40 crore non-convertible debenture issue of
the company. The companys commercial paper
programme of Rs 75 crore has been rated A1 plus (highest
rating), an ICRA release said.
Mill auction creates panic
LUDHIANA, Sept 12 Public auction of a steel re-rolling mill here last week for its failure to pay off debts has sent a collective shudder down the spine of the recession-hit industry in Punjab.
The auction was conducted by the Jaipur-based Debt Recovery Tribunal (DRT) set up by the Government of India to recover loans from industrial units advanced by the nationalised banks and financial institutions.
This was the first major auction of an industrial unit in Ludhiana in recent days and has created considerable panic among the small and medium scale units in this industrial hub of the state. The plant, machinery along with the land on which it was standing, fetched only Rs 1.15 crore even though their market value is estimated to be much higher.
Mr Kantik K. Behal and Mr Tulsi Dass Jetwani, President and Secretary General respectively of the newly formed Northern India Federation of Industrial and Commercial Undertakings, say that there are more than 2500 small and medium units in the region which have gone sick due to factors beyond their control and now await a similar fate.
They are estimated to collectively owe a whopping Rs 2,500 crore to the banks and financial institutions. Their cases have been referred to the Debt Recovery Tribunal and face an almost certain ruin unless the Government of Punjab intervenes effectively and immediately to bail them out.
It is not that we dont want to pay the loans we have taken, says Mr Behal. Every self-respecting Punjabi industrialist wants to clear all his debts. All that he wants is little lightening of the debt burden and some more time to clear his dues. Merely referring the cases to the DRT in a mechanical manner for recovery of debts without trying to find out why the industry has gone sick and how it can be put back on the rails is short-sighted and counterproductive.
Small scale industry and commercial undertakings in Punjab suffered very badly during the period of militancy in the state, he points out. There was complete dislocation of the working of the industry and a serious erosion of their working capital. The migratory labour from UP and Bihar fled back to their homes and the capacity utilisation came down drastically. The banks, instead of helping the industry, started withdrawing financial assistances and began charging usurious rates of interest of between 28 and 36 per cent.
The period of militancy was followed by the dissolution of the Soviet Union and collapse of the economy of Russia which had a direct effect on the industry in Punjab in general and Ludhiana in particular.
This has now been followed by international recession. The industry is at present passing through a very dark period and unless some remedial measures are taken, irreparable damage would be done to the economy of the state, he says.
The attitude of the banks has been most unreasonable, he complains. Without going into the facts of each case and trying to find out why the unit has gone and how it can be nursed back to health, they are taking the easier way out by referring every case to DRT. Incidentally, the constitutional validity of the DRT has already been challenged and is pending before a Full Bench of the Supreme Court.
A deputation of the trade and industry of Ludhiana led by the local BJP MP, Lala Lajpat Rai, met the Union Finance Minister, Mr Yashwant Sinha, and the Union Parliamentary Affairs Minister, Mr Madan Lal Khurana, in Delhi recently to bring their plight to their notice. It has been pointed out that while there is a regular provision to deal with sick large scale units by referring them to BIFR, there is no provision or guidelines for dealing with non-performing assets and sick units of small scale sector.
Will it not be a criminal waste of national assets and entrepreneurship if such units are just liquidated? he asks, asserting that the industry can pay the principal amount as on the date of default provided the burden of interest is either removed or reduced and spread over a period of five to seven years.
Mr Behal, says that a
deputation of the federation will soon meet the Punjab
Chief Minister, Mr Parkash Singh Badal in Chandigarh and
urge him to lead a deputation of Punjab industry to the
Union Finance Minister so as to save the industry from
Workshop for hobby tutors organised
CHANDIGARH, Sept 12 Canara Bank and Camlin Ltd. jointly organised a one-day workshop for the Crylin Frolika Hobby Tutors here today which was inaugurated by Mr H.D. Pai, General Manager Canara Bank (Chandigarh Circle) and presided by Mr B.S. Mongia, Sr Regional Sales Manager, Camlin Ltd.
Mr Pai informed the participants about the banks philosophy of empowering the women by financial assistance and technical help through Centre for Entrepreneurship Development for Women.
Mr B.S. Mongia expressed his hope that more of such joint ventures will come in days to come. He informed the audience about the companys commitment towards the continuous improvement in quality.
Mr Shantalingam a faculty
member of Canara Banks Regional Staff Training
College, provided the participants with the information
regarding banks scheme for women entrepreneurs.Mr
Ravinder Sharma, Lecturer, Govt College of Fine Arts,
presented live demonstration with Camlins Fashion
& Hobby colour range.
Taj Palace bags best business hotel award
NEW DELHI, Sept 12 (UNI)
The Taj Palace Hotel has been awarded the best
business hotel in Asia 1998 award. Other winners include
the Ritz Carlton (Sydney), the Palace Hotel (Beijing),
Grand Hyatt (Jakarta), Ritz Carlton (Osaka), Ritz Carlton
(Kuala Lumpur), Hotel Intercontinental (Dubai),
Shangri-La (Makati-City), Raffles Hotel (Singapore),
Grand Hyatt (Seoul), Grand Hyatt (Taipei), Shangri-La
Hotel (Bangkok), Hotel Softel Metropole (Hanoi) and the
Price rise continues unchecked
CHANDIGARH: In spite of repeated assurances by the Prime Minister, Mr Atal Behari Vajpayee, the Union Finance Minister, Mr Yashwant Sinha, the Union Minister for Chemicals, Fertiliser and Food, Mr Surjit Singh Barnala, and several other ministers both within and outside Parliament to contain prices latest by September, the prices have maintained their upward march must to the chagrin of the common man.
No wonder, the annual rate of inflation has crossed the 8 per cent mark once again and touched 8.21 per cent for the week ended August 22.
Inflation based on the wholesale price index (WPI) increased by 0.27 percentage points during the week from 7.94 per cent to 8.21 per cent, more than double the rate of 3.65 per cent recorded in the corresponding week last year. However, on July 25 the inflation rate had touched a 139-week high of 8.32 per cent.
Considering 1960 as the base price year, the purchasing power of a rupee has been reduced to merely 6 paise. Thus with Rs 100 now, one can buy goods worth Rs 6 only with reference to 1960 prices.
In fact, had it not been for the subsequent partial/full rollback of some of the measures announced by the Government of India (GOI) to raise its resources, as also soft international oil prices, the rise in the rate of inflation would have, by now, pierced the double-digit level.
In fact, during the current fiscal year, the prices are expected to remain at a higher level on account of various increases in excise and customs duties, which under Indian conditions are less likely to be will translate into higher prices for most of the manufactured products. The full impact of the hike in prices may however be somewhat dampened due to continuing slump in the demand conditions.
Moreover, the external value of the rupee which has depreciated by more than 6 per cent between April and June last is likely to depreciate further if one goes by the present indications. This will naturally add to the cost of imported products whether these relate to food articles or appliances.
Also, the current shortage in the agricultural commodities are unlikely to be made up in the short run due to stagnation in agricultural production. For example, the foodgrain production in the current year -1998-99 is projected at 194 million tonnes the same as that achieved in 1997-98.
If the Vajpayee government does not realise the need for containing inflationary pressures now, it may have to pay a big political price by losing the faith of the common man or the fixed income group people who suffer most in such circumstances. The GOI should know that a low-rate of inflation is the best anti-poverty measure.
For this, the GOI may to have to intervene immediately to restore adequate quantities of food products. It may also become essential to import certain commodities for which demand is likely to go up further in the coming months and also the approaching festival season.
The authorities concerned may also have to monitor closely the functioning of the TPDS (Targeted Public Distribution System) implemented in some states and the PDS in others. Already, it appears that the government has no control on the prices of foodgrains and edible oils.
If it tries to bring down prices by simply releasing the oldest stocks out of its buffer stocks of 28.50 million tonnes, a significant part of which is said to have become unfit for human consumption, the measure will simply recoil on it.
However, stocks are being released on the advice of the RBI. Any measure that is taken to assuage the feelings of the price-hit common man must be serious and concrete so that he gets the relief directly. It must also ensure foolproof arrangements to transport foodgrains to deficit pockets.
The government should also
make it clear that the manufacturers who have already
brought a bad name to the BJP-led government being
branded as pro-traders and anti-people and who have been
granted tax relief pass on the benefit to the consumers.
And this ought to be monitored properly.
ONGC bags Rs 85 crore order in Bangladesh
GUWAHATI, Sept 12 (PTI) The Oil and Natural Gas Commission (ONGC) has bagged a contract, worth Rs 85 crore, to drill nine gas wells for oil exploration in Bangladesh, an ONGC release said here.
A four-member team from the Bangladesh Gas Field Company (BGFCL) recently inspected drilling operations of the ONGC.
The ONGC bagged the contract facing stiff competition from other foreign companies to drill and complete nine gas wells including four deep and directional wells in Sylhet district, the release said.
Two deep drilling rigs from Upper Assam and Ahmedabad project of Western region were mobilised to undertake the operations.
Inspection for both the rigs were carried out successfully and clearance was given by the inspection team for its transportation to Bangladesh.
State Bank of Patiala
CHANDIGARH, Sept 12 A blood donation camp was organised by State Bank of Patiala, Bakshiwala (Patiala) today. The camp was inaugurated by Mr Inderjit Singh Zira, Minister of State for Health. 80 units of blood were collected. Mr N.C. Sharma, DGM was present on the occasion.
Q: I am a bank officer. I have taken loan from my bank for my ward for persuing higher education (BDS course) under Gyan Jyoti Scheme of the bank. The loan has been granted by the bank to me in the joint name of myself and my daughter.
As per Section 80E of the Income Tax Act, 1961, any repayment of loan including interest thereon taken by the assessee being an individual from any financial institution for the purpose of persuing his higher education is deductible from his taxable income. However, the maximum amount of such deduction is restricted to Rs 25,000 p.a.
Please guide whether I am entitled for rebate from my taxable income for repayment of loan/interest amount. If I am entitled whether this rebate should be allowed by my employer or I have to claim it from Income Tax Department directly at the time of filing of return.
P.K. Bansal, Bathinda
Ans: The deduction in respect of repayment of loan taken for higher education is not allowed to the parents of the assessee but this deduction is admissible only to the assessee himself and it is admissible when the assessee starts making repayment of the loan taken by him. On the facts stated by you, the benefit of tax deduction will be available to your ward from his income as and when he starts making repayment of the loan amount. You should not claim any tax deduction u/s 80E in respect of the loan taken by your ward.
Q: I am a retired government servant. I am also a senior citizen having attained the age of 70. Kindly let me know my income-tax liability, if any, on my total income of Rs 1,04,420 i.e. Rs 63,620 from pension and Rs 40,800 from house property for the year 1997-98 assessment year 1998-99.
R.K. Gupta, Shimla
A: On the facts stated by you, you will not be liable to make any payment of Income-tax because after granting you tax rebate as a senior citizen on your net taxable income, the tax payable by you will be nil. Your gross total income is Rs 1,04,420. From this amount you will in the initial stage get a deduction of Rs 15,000 as standard deduction from the pension income. Likewise, from your house property income you will be eligible to receive a deduction for the repairs equal to 1/5th of the rental income. Thus, your net taxable income will be much less than Rs one lakh.
The tax rebate on Rs one lakh comes to Rs 10,000 which is the maximum amount of tax rebate available to a senior citizen. Therefore, you will not be liable to make payment of any Income-tax on the facts stated by you. However, you must file your Income-tax return for the Assessment Year 1998-99.
Under the existing rules, senior citizens are not
required to pay any tax if it works out to Rs 10,000.
Does this rule hold good if this sum of Rs 10,000 is
inclusive of tax on capital gains?
Rajinder Singh, Mohali.
Ans: The tax rebate available to a senior citizen amounting to Rs 10,000 is inclusive of tax on capital gains. The maximum upper limit of exemption in respect of interest income from NSCs, bank FDRs is Rs 12,000 for the Assessment Year 98-99. There is additional exemption in respect of mutual fund income amounting Rs 3,000. From the Assessment Year 1998-99 the dividend income is completely exempt from Income-tax without any upper limit.
Q: An employee resigns (not retires) government service. He gets leave encashment and provident fund. Is this amount taxable or not.
P.K. Sudan, Patiala.
Ans: An employee who resigns from his government service and receives leave encashment will also be eligible to the exemption in respect of leave encashment which otherwise is received at the time of retirement. The amount received in respect of provident fund at the time of his resignation is not taxable.
Q: I am a retired Central Government employee. My age is 75 years. The only source of my income is my pension. During the financial year 1997-98, my pension amounted to Rs 63663 (excluding the arrears of pension due in 96-97, but paid during 97-98). Thus my tax liability during 1997-98 is Rs 366 only. However, as a Senior Citizen I am not required to pay any income tax, if the tax amounts to less than Rs 10,000 under Section 88-B. But is it obligatory for me to file an Income-tax return?
B.P. Joshi, Shimla.
Ans: On the facts stated by you even though you are not liable to make any payment of Income-tax, you should file you Income-tax return. As per new budget non-filing of return my entail penalty of Rs 10,000.
Q: I am a Haryana Government pensioner. My date of birth being 1.4.1933, I had retired on 31.3.91, afternoon, on attaining the age of superannuation (58). I would like to know whether I will be treated to have attained the age of 65, so as to entitle me to get the benefits accuring to senior citizens for Income Tax purposes, on 31.3.98 or 1.4.98 for the A.Y. 1998-99.
A.D. Bhargava, Chandigarh.
THE emergence of new technologies and their impact upon economic activity has placed new demands on business managers. As the organisations where MBAs would work become increasingly network-oriented, the curriculum of MBA programmes should reflect this emerging reality.
An MBA programme should prepare students to incorporate multiple technological tools and innovations into a set of dynamic corporate strategies, risk analysis and assessment, financial analysis and international affairs, says Prof Rakesh Khurana, President of the Association of Indian Management Schools.
An MBA should prepare to learn over the worldwide web (www). Students should learn within a technological environment as well as about how to utilise that environment in the workplace, he adds. UNI
NBFCs are here to stay and helping to bridge the credit gaps in several sectors which the traditional institutions are unable to fulfil, but lack of transparency of operation and proper financial disclosures are a major cause for worry, notes Dr Rangarajan in a collection of essays on money and finance.
He draws an interesting distinction between the terms disinvestment and privatisation. Privatisation implies a change in ownership resulting in a change of management while disinvestment means dilution of the stake of the government to a level where there is no change in control of ownership as well as management.
Mixed economy as a concept is well accepted. But the mix cannot be fixed or static. It has to be dynamic, one changing with times and responding to new situations, he says. PTI
MNCs & myths
Hence, the great Indian middle class myth which leads to the sales targets is getting skewed.
Take the example of Whirlpool. It launched refrigerators larger than the standard 165 litres when the market was not yet ready. Sachets are more popular in India than bottles, another typically Indian aspect which the MNCs found startling at first.
Perhaps one of the best examples is Kelloggs. Changing food habits in itself is a very difficult task. But Kelloggs could not even take on the small-scale Indian brands already manufacturing corn flakes, says the don. PTI
Dwelling on the Indian privatisation experience since 1991, he says: What is being attempted in India is only disinvestment and not privatisation.
The government has sold only 3.9 per cent in Indian Oil Corporation, 2 per cent in ONGC and only 1.1 per cent in Hindustan Copper so far, Ganesh says.
Q: Merely because an employer fails to file an application U/s 33 (3), would such failure render the dismissal void?
Ans: This question was answered by the Kerala H.C. in the case at Udumbanchola Estate Workers Union v Indian Cardamom Research Institute (1998-I-LLJ-1238) thus:
A workman of the institute was dismissed from service on charges of abusing his superior in foul language and threatening him. His dismissal was referred to adjudication by the Industrial Tribunal which passed an award confirming the dismissal as justified. The petitioner union representing the workman challenged the award, in this writ petition on various grounds.
One of them was that since no prior permission U/s 33 (3) of the I.D. Act was obtained and since the workman was a protected workman, was void. The H.C. did not agree with this contention. It pointed out that so long as the order of dismissal was not annulled, it would not become void for alleged violation of S. 33 in not filling an application for approval or permission as the case may be.
Besides, the workman did not prove that he was recognised as protected workman as mentioned in S. 33 (4).
Again, it was argued that the Enquiry Officer was biased against him because the Enquiry Officer represented the employer in court in some cases. Rejecting this, the H.C. pointed out that in this case Enquiry Officer was never engaged as a lawyer for the management in any case and it was too late to contend that because a person was sometimes employed by the employer as a lawyer, he was thereby rendered incompetent to act as an Enquiry Officer.
contention of the workman was that the alleged misconduct
was not within the premises of the establishment and not
during business hours. The H.C held that any misconduct
wherever committed, if it has the effect of subverting
discipline within the establishment, would amount be
misconduct.Thus, in the opinion of the H.C., there was no
infirmity in the award. Consequently, dismissed the
NEW DELHI, Sept 12 (PTI) Both the precious metals, silver and gold, fell back on the bullion market today on reduced offtake and closed with losses. The quotations: Silver .999 (ready) 7545, delivery 7560, coins buyer 10,800 and seller 11,000. Standard gold 4315, ornaments 4165 and sovereign 3525.
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