|Sunday, February 13, 2000,
Karnataka inks pact with Centre on
WTO provisions may hit builders
RBI not to ban Rs 500 notes
PHDCCI, Ohio to hold workshops
Punwire paging staff await salary
PSEB move to set up
police force opposed
ABB net profit falls 22 pc
SBI advances to SSIs cross Rs
Karnataka inks pact with Centre on power sector
BANGALORE, Feb 12 (PTI) Karnataka today signed a memorandum of agreement (MoA) with the Centre pledging to embark upon a time-bound reform and restructuring of the power sector in the State, becoming the first State to enter into such a pact with the Centre.
Under the agreement, the Centre will provide full support and assistance for a successful reform and restructuring of the power sector in Karnataka, including a loan assistance of about Rs 10,000 crore and flow of about 2000 MW of additional energy from the central grids.
In turn, Karnataka agreed to undertake privatisation of distribution aimed at a commercially-viable and efficient power distribution system, total electrifiction of all villages and hamlets, and reduction in technical and commercial losses and increase in power supply.
While Karnataka Chief Minister S.M. Krishna signed the MoA on behalf of the State Union Minister for Power, P.R. Kumaramangalam signed on behalf of the Centre.
After signing the
agreement, Kumaramangalam said the Centre would enact a
law during the coming Budget session making metering of
all power user installations compulsory in the country to
assess the consumption and eradicate pilferage.
provisions may hit builders
NEW DELHI, Feb 12 WTO clauses are likely to have an adverse impact on the construction industry, the second largest employer after agriculture.
When India signed the WTO agreement, the construction industry was not aware of its implication and now when it has woken up, it is too late, Mr G V Ramakrishna, Chairman of the Construction Industry Development Council (CIDC), said.
As per the WTO agreement all restrictions for global players competing directly with the domestic industry in the sector would have to be removed by the year 2005.
Mr K.C. Pant, Deputy Chairman of the Planning Commission said the construction industry cannot escape from competition which globalisation would bring in.
While competition encourages to come up with world class infrastructure, it creates a scope for mechanisation of work, he said.
With the Government pursuing the liberalisation policy, construction activity in the country is expected to boom in the coming years.
According to recent estimates, the country needs investment of $ 34 billion to develop its roads in the next eight years, $ 53 billion to install new telecom networks in the next decade and $ 7.3 billion to modernise its ports, apart from rising demand for power which was growing at 7.5 per cent annually.
Dr A. Ramakrishna, Vice-Chairman of CIDC, said domestic players were not seeking the government to adopt protectionist policy rather they were ready to face globalisation.
But what has happened is that overseas contractors have been considered on priority because of their having experience in bigger projects, he said pointing out to recent contracts being given to global players.
He urged the Government to ensure that domestic contractors do not get second class treatment.
More than 31 million people around the year are employed in the construction industry and it produces services and goods worth Rs 2,100,000 million.
SALBONI (WB), Feb 12 (PTI) The Reserve Bank of India today categorically said it had no plans to ban Rs 500 notes at the moment.
RBI Governor Bimal Jalan told reporters here that there was no need for the public to panic as the proportion of counterfeit Rs 500 notes to the total amount of circulation was minuscule.
The local enforcement authorities in the States had been asked to maintain strict vigil, Jalan said.
A new series of Rs 500 notes would be issued by RBI for circulation shortly, he added.
RBI has appointed international consultancy firm Arthur Anderson to streamline the currency distribution system in the country.
Ohio to hold workshops
CHANDIGARH, Feb 12 The delegation from Ohio has concretised plans of collaboration between the industry in the region and the State of Ohio, USA. Two workshops on zero discharge for electroplaters and low emission quenching agents for heat treators will be held on March 7-10 with the help of the PHDCCI.
Mr Ashok Khanna, Chairman of the Northern Regional Development Council of the Chamber, traced the present relationship between India and Ohio State when the present US Ambassador to India was the Governor of Ohio.
Mr Vikram Sahgal, Chairman, Chandigrh Committee, PHDCCI identified thrust areas as agro and food processing, electronics, infrastructure, information technology and light engineering and pointed out that since America is one of Indias largest trading partners the relationship can be further strengthened.
paging staff await salary
CHANDIGARH, Feb 12 Employees of Punwire Paging Services Ltd in Haryana have not been paid their salaries for the past about seven months.
A few Ambala-based employees of the company said here today that Punwire had stopped paying even office expenses, including the rent of the office building.
In a statement here
today they said there was a move to close down Punwire
Paging Service Ltd which has offices in 11 Haryana towns.
The company has collected one-year advance rent from
subscribers to Page Me.
to set up police force opposed
LUDHIANA, Feb 12 The Punjab industry has set its face firmly against the move by the PSEB to establish its own police force to check theft of power in the state.
A deputation of
industrialists from Ludhiana which met the Chairman of
the PSEB and other members of the board at Patiala under
the aegis of Punjab Apex Chamber of Commerce and Industry
on Tuesday made it clear that the industry has
apprehensions that this police force will be used mostly
against honest entrepreneurs while the culprits will go
scot-free through escape routes of political and
wonderland of investment
Q: I am a small investor, now retired. I regret the day I invested in LIC Dhan 80 CCB to save some tax. Its NAV now may be approximately Rs 7.5 as against the purchase price of Rs 10. I had also purchased UTI-MEP 93 worth Rs 10,000, again to save tax at that time. I now want to encash these as there is some improvement in the NAV. I presume Rs 2,000 will be deducted from each of these. Is indexation applicable while calculating the capital loss on the sale of these schemes? I am in the maximum tax bracket of 30 per cent. What is the procecure for calculating tax on both these schemes?
S.M. Sharma, Delhi
A: I pity your plight but alas, the authorities do not. Whenever you redeem these either before or at their maturity the amount originally invested or Rs 10,000 whichever is lower will have to be added to your income for the year of withdrawal. In your case, the tax liability thereon is Rs 3,300 (30 per cent + surcharge), though the TDS is Rs 2,200 (20 per cent + surcharge). In other words, you are liable to pay tax of Rs 1,100 extra, even if there is a heavy capital loss. This is not the end of the story. During the year of redemption, the long-term capital gains is payable. No benefit of indexation is available. In other words, if you sell the LIC units, your long-term capital loss would be Rs 2,500 only. If indexation was payable, it would have been much higher. If it were again in place of loss, you would have to pay tax thereon at 22 per cent ! Bad!!.
Q: I was born on June 7, 1935 so on June 6, 1999, I have completed 64 years and have entered into the 65th year.
Sec 88-B of the ITA provides a relief upto Rs 10,000 from the total tax payable by senor citizens. The words used in the Section are, An assessee, being an individual resident in India, who is of the age of 65 years at any time during the previous year...
In view of the wording of the above section, I believe that I would be entitled to the tax relief from the tax payable for the income of the FY 1999-2000 (AY 2000-2001) Am I right?
Mahesh Gupta, Shimla
A: Yes, you are on the right track. Can the same tenent be extrapolated for a child transiting from minor to major on completion of 18 years of age? May be or may not be. The Act has no specific provisions in this respect. All that I can say is that the authors of the legislation do not have a macro view while drafting the legislations.
Q: I am a senior citizen, aged 76, I have been drawing my pension from the Central Government for more than 17 years now. Till the previous FY 1998-99, I have enjoyed a tax-free pension. However, with the recent increase in pension and the resultant arrears thereof with effect from January 1, 1996, I presume I may be liable to pay income tax for the current FY 1999-2000. What will be my tax liability for the current year with the following income:
Total pension from April 1999 to March 2000, Rs 81,450, arrears Rs 59,694?
What are the schemes, especially of short term nature, in which I could invest to earn relief/rebate from income tax including schemes earning total income tax exemption?
B.B. Sharma, Solan
A: Since this is a pension that has nexus with the salary you were earning before your retirement, you are eligible to a standard deduction of Rs 20,000 thereon. Therefore, the taxable income is Rs 1,21,144 and the tax on this is Rs 13,229. After claiming the rebate for senior citizens of Rs 10,000 the tax payable becomes Rs 3,229. I presume you have no other income.
I suggest you contribute Rs 15,000 to infrastructure linked ICICI tax-saving bond which has a term of 3 years and 3 months and Rs 1,145 to PPF. Yes, there is an option of 3 years only giving the same tax benefit, but for some specific reasons I prefer the one with a term higher by 3 months only.
Sorry, I have started disliking PPF after the reduction in its interest rate from 12 per cent to 11 per cent. I suggest you invest Rs 20,000 in the bonds.
Q: If a PPF accont holder does not intend to continue through Form-H after 15 years and also does not withdraw the balance amount on completion of 15 years, will the amount in the account on completion of 15 years, earn applicable tax-free interest at the rate applicable for the period the amount is not withdrawn? Besides, what are the porfitable schemes available to an income tax payee who wants to invest for a year or two?
R.C. Gupta, New Delhi
he can continue the account without contribution and
Form-H does not come in the picture. However, he will not
be allowed to open a fresh account. I have therefore been
advocating for closure of the account and opening a new
PPF account, especially in view of the fact that at the
current juncture, it is possible to earn higher than 12
per cent (now reduced to 11 per cent with effect from
January 15, 2000) returns on investible funds. In view of
the reduction in the rate, you may not open a new PPF
account. Even when the rate was 12 per cent, Tax-saving
Bonds or ICICI/IDBI were better than PPF for many of the
assesses. Now, in spite of the fact that the bond rate is
slated to be reduced in sympathy with PPF, the bonds have
become the best.
ASEA Brown Boveri (ABB) has posted a 21.65 per cent fall in net profit at Rs 43.8 crore for the calendar year 1999 on revenues of Rs 770.30 crore, a fall of 1.89 per cent compared to the figures of the previous year after excluding the power generation business.
The power generation business of the company in India was hived off into a 50:50 joint venture with French company Alsthom as part of its global restructuring of the Swiss parent, with effect from December 1, 1999, company Managing Director K.K. Kaura told newsmen in Mumbai on Friday.
The new company is called ABB Alsthom Power India Ltd, he said.
The earnings were negatively affected by the cost of restructuring, rationalisation of the work force, he said adding staff downsizing by 450 employees had cost about Rs 20 crore.
Higher depreciation charges and other associated costs of the start up of new transformer operations also negatively impacted the level of earnings, but were compensated by the reduction in productivity factors, he said.
Nestle India: Swiss foods and beverages major Nestle SA has sought government permission to hike stake in its Indian subsidiary, Nestle India, by 5 per cent to 56 per cent.
In a notice to the Bombay Stock Exchange (BSE), the Swiss company, known worldwide for brands like Nescafe and Kitkat, said it wanted to acquire equity from other shareholders via the creeping acquisition route.
The notice said that the company would buy shares to the extent available, at a price acceptable to it, subject to necessary approvals.
Besides the parent company, banks and financial institutions (FIs) hold about 14 per cent equity stake in Nestle India, with the remaining being held by the public and FIIs.
Tie-up with Zandu: Bio-science company Centers for Medical Innovation (India) Private Ltd has signed an agreement with Zandu Pharmaceutical Works Ltd to develop a plant-based prescription drug for Parkinsons disease.
A drug based on the
chemical entity, now code-named HP
200, was launched by Zandu in India about two
years ago under the brand name
Zandopa and the partnership aims
at pooling in knowhow for further clinical as well as
pharmaceutical development in the USA and India, K.M.
Parikh, Managing Director of Zandu told newspersons in
Mumbai on Friday. PTI
advances to SSIs cross Rs 1,200 crore
CHANDIGARH, Feb 12 The State Bank of India today organised a seminar of SSI intensive centre branches at its local head office. It was presided over by Mr D.L. Manwani, General Manager, Chandigarh Circle.
Mr Manwani said the SSI advances of the Chandigarh Circle of the bank have crossed Rs 1200 crore and are expected to cross Rs 1300 crore by March, 2000.
Addressing senior functionaries of the ban and Branch Managers, Mr Manwani emphasised the need for quick disposal of pending proposals, as quick credit decisions further improve the image of the bank and increase priority sector advances. The branches should tap the untapped areas in SSI advances and procure viable SSI proposals.
by Praful R. Desai
Payment of gratuity
Q: Whether Controlling Authority under the payment of Gratuity Act can entertain any other claim under the terms of service condition?
Ans: Kerala H.C. was seized of the question in Ayyappa v Joint Labour commissioner (1999-II-LLJ-1351) and opined as under:
The petitioner was in the service of a public undertaking. He resigned from his service. At that time he was entitled for payment of gratuity. His claim was for gratuity at the rate of one month wages for every completed year of service in terms of clause 9, which according to the petitioner covered his conditions of service. Another exhibit revealed that by a Government order, the amount of gratuity was revised and the gratuity payable was enhanced to one month salary for every completed year of service. The petitioner was claiming the benefit of this revision.
The Controlling Authority granted the gratuity at the rate of one month for every completed year but in appeal it was held that the petitioner was entitled to only 15 days wages for every completed year of his service because the petitioner had ceased to be in service not on superannuation but had resigned from service.
The H.C. in appeal was of the view that S.4 (2) of the Act was applicable. The H.C. said a reading of the entire provisions of S. 4 makes it clear that gratuity payable under the Act is limited to 15 days wages for every completed year and an employee can claim gratuity from the employer if he is entitled for better terms in accordance with any other better provisions of conditions of service. Therefore, the gratuity in terms of cl. (g) (Government order) providing for one months wages for every completed year is not the gratuity payable under the Act.
S.7 of the Act enables an employee to approach the controlling authority for determination of the amount towards gratuity. S.7 can be invoked only by a person who is eligible for payment of gratuity under this Act.
The H.C. held that the grant claimed by the petitioner is not under this Act but under Government order. Under the Act the petitioner is entitled only to the rate as mentioned in S.4 (2). The amount granted is equal to that rate. Therefore, limiting of the gratuity payable to the petitioner under the Act to 15 days wages for every completed year is justified through on a different ground. On that basis, the petitioner cannot challenge the quantum of gratuity directed to be paid. Therefore, the H.C. held to that extent alone the order is upheld. But the finding that Government order is not applicable to the petitioner is set aside and left open.
by Ashok Kumar
Sensex: sky is the limit
THE Budget will be a tough one and the market rally will be further fuelled. Come again, did you say? Well, I repeat, the Budget will be a tough one and the market will boom.
Pray, why should the market react positively to a tough Budget ? Now, it is clear as day who the most potent investors at our bourses are the FIIs, that is the genuine ones and not the Mauritius shells. Logically, it flows that the FIIs will be pretty pleased if the Budget were to be a tough one.
Besides the fact that they are not the hoi polloi of our great nation, it would also send across a signal to them that the Government finally means business, and the days of the subsidy raj are over. Of course, the commies will cry foul, but they do that almost by default in every case. After all, old habits die hard, dont they?
I personally believe that Chandrababu Naidus recent electoral victory in the rapidly prospering State of Andhra Pradesh has driven home the message loud and clear to the other political parties perform and reap the rewards. Returning to the FII front, it seems, they will, on knowing that the government means business, pump in more funds into the Indian bourses, thus fuelling a further rally to the one being stage-managed at the moment by the big operators.
Well, well, well ! So, where thenwill the Sensex stand by the end of Y2K? 10,000 or 20,000 points? Jokes aside, these are the figures being bandied by several self-professed experts at Dalal Street. Of course, I would hate to have to take a call on predicting the Sensex as I believe that few vocations could be occupationally as hazardous as this one.
One thing I do know though is that there is some garbage in the pipeline on the IPO front, and worse still, by indiscrimately financing every issue under the sun, the banks and NBFCs appear set to sow the wind and reap the whirlwind, when the inevitbale slump begins.
One of the companies we had recommended at around Rs 220 a little more than a couple of months ago was Mindtek, an Information Technology company. In spite of a 1:5 rights issue being announced recently, the share price of this company has been fairly strong at around Rs 450 of late. Given the fact that the story at this counter is just unfolding, I for one think it is one of the few underpriced IT stocks there for the taking. Of course, one needs to have a long-term perspective while making an investment at this counter, as the real party is yet to begin threat. And that, these days is asking for too much, I guess.
Finally, before signing
off remember what I had said about BFL Software less than
amonth ago when almost everyone was ready to write it
off, following its rather gutsy direct communication to
shareholders about its bad quarterly results ? I repeat,
the face of corporate India is changing. The days of
semi-literate manipulative entrepreneurs who
institutionalised corruption under the license
raj are over.
by K. Garima
Issue opens/closes on: 10.02.2000/ 14.02.2000Instrument: Equity sharesIssue size: Rs 6.69 crore
Issue price: Rs 50
Promoters: A Venkateswara Rao, A. Vidyasagar, A. Sarada
Established in 1990, Avantel Softech Limited (ASL) commenced activities like designing, developing and manufacturing components needed by the wireless industry. This was soon added to, with RF and Microwave sub-systems for Defence labs and leading PSUs. This was followed by a venture into Multi Access Rural Radio (MARR) systems for DoT. The prospectus informs us that ASL now proposes to set up software development centre near Hyderabad and expand its infrastructure facilities including R&D test equipment for communication products, computing equipments and software. Other objects thereof, include improvement of communicative facilities to undertake major projects on a round the clock development basis for its overseas clients and to enhance the number of its software personnel so as to be able to undertake more number of projects. Finally, it also proposes to set up an overseas subsidiary office in the USA. Canara Bank, the appraising authority to ASLs project, has estimated the fund requirement to be Rs 9.90 crore which is to be met through contribution of promoters and issue proceeds accompanied by a term loan from the appraising authority.
While, on the financial front AVLs track record, has been satisfactory, the project annualised EPS of Rs 2.5 suggests that the offer price of Rs 50 is being discounted 20 times, which seems quite aggressive considering that this company is by no yardstick a big player in its segment.
The issue price of Rs 50
per share appears to be on the higher side if one were to
use pure fundamental analysis. However, as long as the
software boom continues such issues will list well and
that, at the moment, it seems, is all that matters.
by Pushpa Girimaji
Does your food contain aluminium?
A STUDY undertaken by the National Institute of Nutrition (NIN), Hyderabad, to assess the aluminium content of commonly consumed Indian foods revealed that usage of aluminium utensils contributed significantly to the total daily intake of aluminium and that of leaching of aluminium from the vessel into food preparations occurred in greater proportions when they were used for preparing acidic foods such as tamarind containing leafy vegetables or tomatoes containing dal. Also such leaching increased significantly in new aluminium vessels.Since aluminium vessels are the most commonly used cookware in rural and semi-urban India, NIN undertook the study to gauge the extent of leaching of aluminium into different Indian foods cooked in aluminium vessels. In addition, several commonly consumed food items were also analysed for their aluminium content. The NIN data revealed that the major contribution of aluminium from India foods was through consumption of vegetables, spices and pulses. Green leafy vegetables and sambar contributed significantly to the total daily aluminium intake. Cereals, milk and milk products on the other hand contributed negligible amounts.
An article on Risk of aluminium toxicity in the Indian context, published in the bulletin of the Indian Council of Medical Research, explains the significance of the study. First, extensive data are available from the Western literature regarding the risk of aluminium toxicity, while it is scanty in India. Second, here, because of the wide use of aluminium cookware and storage vessels, the intake of aluminium by Indian population could be much higher than what has been reported in the West . Third, recent studies have revealed that calcium and iron deficiencies might enhance aluminium absorption. And in our country, given the fact that iron deficiency is widely prevalent and calcium intake is sub-optimal in most of the population, especially children, pregnant and lactating women, these groups might well be at risk due to aluminium absorption.
Now why should one worry about aluminium intake, particularly when aluminium is the most abundant metal in the biosphere and we are continuously exposed to it in our daily life through water, food, pharmaceutical products and even through airborne dust particles. In fact, aluminium sulphate or alum is used as a flocculating agent in the purification of municipal water supplies and the drinking water may well contain high levels of aluminium.
Similarly, aluminium is used in certain antacids, anti-diarrhoeals and analgesics. It is also used in some food additives. Aluminium cookware, cans, packaging material are other sources of aluminium contamination, particularly when they are used for storing or packing citric or acidic foods.
However, recent research has implicated aluminium as interfering with a variety of cellular and metabolic processes in the nervous systems. Aluminium toxicity is also believed to cause certain learning disabilities in children. Several disorders of the nervous system such as dialysis dementia, senile dementia of the Alzheimers type and Parkinsons dementia have also been associated with increased ingestion of aluminium.
Referring to the epidemiological evidences pointing to the possible role of aluminium in senile dementia of the Alzheimers type (SDAT), the ICMR article says that about eight studies conducted in five countries have pointed to an association between the high concentration of aluminium in drinking water and the number of cases SDAT. Similarly 10 laboratories from four continents have reported higher levels of aluminium in brain tissue of these patients. SDAT is a progressive neurodegenerative disorder of the elderly and is characterised by loss of memory, disorientation, poor concentration, apathy, etc.
Average dietary intake of aluminium in adults is estimated to be about 3-5 mg per day. Most aluminium absorbed from the intestinal tract is excreted in urine, in individuals with normal renal functions. Says the ICMR article: while the neurotoxic potential of aluminium is undisputed in various animal species, there is yet no strong evidence to suggest that aluminium could be toxic to normal healthy humans. Aluminium has a very low absorption rate and also slow turnover in the body. Therefore the risk of aluminium toxicity is probably due to prolonged chronic exposure.
So keeping in mind these factors and the epidemiological evidences pointing to the possible role of aluminium in SDAT, it would be advisable to control the intake of aluminium through diet and water by elderly persons as well as patients with renal failure.
And on the basis of the
NIN study, the article says that the use of aluminium
cookware should be limited. While they are safe for most
cereal preparations, they are best avoided for cooking
acidic foods such as tomato, tamarind, containing pulses
and also green leafy vegetables.
by K.R. Wadhwaney
Reinstatement of HCI chief raises eyebrows
DISREGARDING the findings of the Central Vigilance Commission (CVC) and judgements of a Mumbai High Court and the Supreme Court, the sacked chief of the Hotel Corporation of India (HCI) a subsidiary of Air India, has been reinstated by Minister of Civil Aviation Sharad Yadav.There is a considerable unrest in Air India and HCI over this arbitrary decision which has further demoralised them. The HCI has been passing through critical phase and the incumbents reinstatement as Chairman and Managing Director will establish a law of jungle in HCI, said two officials of Air India.
In 1998, the HCI CMD was removed on the charges of corruption by the then Minister of Civil Aviation Ananth Kumar. The sacked official filed an appeal in the Mumbai High Court and lost the case. The Supreme Court did not reverse the high courts judgement.
Then suddenly without showing any consideration for these verdicts, Sharad Yadav has reinstated him. Can a Minister bypass the Supreme Court?
The matter has been further complicated as Sharmas term ended on February 8. He did not demit his office.
Uncertainty prevails whether CMD Anil Baijal will continue in Indian Airlines until his term ends. Baijal is said to have caused displeasure to the Minister on several counts. During the recent hijacking, he reportedly did not play the role of the chief of the airline.
Amid this uncertainty, there is no plan to augment IAs fleet. Sahara Airline, in the meantime, has made known its plans to fly small turbo-prop aircraft on various regional routes before the year is out. Three of these aircraft will be stationed in Delhi, Mumbai, Calcutta and Chennai. The airlines has already planned expansion of routes on different sectors. The frequencies of services on some sectors have already been increased.
The committee has squarely blamed the Airports
Authority of India officials and Otis manufacturers for
the escalator death on December 13. Sheer negligence has
been the cause of the accident. Despite this grisly
death, no clear-cut punishment for the guilty officials
has been spelt out. Unless there is accountability,
similar kinds of accidents will continue to recur at
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