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Fuel Pricing
Deregulation needs to have human face: Deora

Mumbai, July 12
Union Petroleum Minister Murli Deora at a stall at the International Burhani Expo in Mumbai on Sunday. The Union Government has not given up on deregulating petroleum prices, Union Petroleum Minister Murli Deora told reporters here today. Addressing reporters on the sidelines of a trade exhibition that he inaugurated, Deora said deregulation of petroleum prices should not hurt the common man. "Deregulation....need to have a human face... the periodic revision of petroleum prices...is as good as deregulation," Deora said.

Union Petroleum Minister Murli Deora at a stall at the International Burhani Expo in Mumbai on Sunday. — PTI



EARLIER STORIES



Pranab dispels fears about high fiscal deficit
Kolkata, July 12
Union Finance Minister Pranab Mukherjee today sought to dispel fears about the high fiscal deficit projected in the Budget for 2009-10, saying that the RBI would be able to manage government borrowing programmes effectively.

Obama urges patience on economic stimulus plan
President Barack Obama Washington, July 12
With the US economy still firmly in the grip of a tenacious recession, President Barack Obama is urging Americans to have patience and give his economic recovery plan time to work.

China becomes world’s largest auto market
Beijing, July 12
China has for the first time overtaken the United States as the world's largest auto market with sales of locally-made vehicles surging 17.7 per cent to 6.1 million units in the first six months this year.

KFC, Pizza Hut’s parent Co under scanner
New Delhi, July 12
US-based Yum Restaurants, which owns the franchise of KFC and Pizza Hut in India, has come under the ED's scrutiny for allegedly failing to bring in Rs 390 crore ($80 million) foreign investment in the country after getting the government approval. The company, however, denied having received any show-cause notice, or any wrong-doing.

Tax Advice
No rebate on gift to daughter
Q. I am a senior citizen and a retired Govt. Employee of Himachal Pradesh Government with my pension income above tax exemption slab of Rs 2,25,000 for the current financial year besides Income from other sources such as interest on my fixed deposits in Nationalized Bank.





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Fuel Pricing
Deregulation needs to have human face: Deora
Tribune News Service

Mumbai, July 12
The Union Government has not given up on deregulating petroleum prices, Union Petroleum Minister Murli Deora told reporters here today. Addressing reporters on the sidelines of a trade exhibition that he inaugurated, Deora said deregulation of petroleum prices should not hurt the common man. "Deregulation....need to have a human face... the periodic revision of petroleum prices...is as good as deregulation," Deora said.

The minister said the government was looking at revising prices of petro products downwards if oil prices fell and stabilised at lower levels for four to five weeks. Defending the recent increase in prices of petroleum products, Deora said the government had reduced prices by Rs 10 per litre when global crude prices fell sharply.

On a query about the dispute between the Ambani brothers over sharing of gas from the KG Basin, Deora said the gas from the basin did not belong to either of the two brothers who are battling it out in court.

"The gas belongs to the government," Deora said.

He further added that the programme of providing piped gas in India's cities was proceeding at a healthy pace. Mumbai, he said, would be fully wired for piped cooking gas within two years.

So far nearly 4 lakh homes in Mumbai's cities and suburbs are receiving piped gas.

Pipelines are being laid in other cities to deliver piped gas into homes as more gas from the KG Basin becomes available.

PTI adds: The government has been making periodic changes in the prices of petrol and diesel depending upon international rates, which effectively is as good as deregulation, he said.

Deora said the Budget 2009-10 has provided as much as Rs 30,000 crore towards subsidies for kerosene and LPG.

The government has not raised kerosene prices for 10 years, he said and indicated that the fuel of the poor people would continue to be subsidised.

Responding to a query on whether the government has dropped plans for overall deregulation of petroleum prices, he said, "deregulation need to have a human face".

As a policy, petroleum prices are regulated by the government which results in huge subsidy burden on the government.

While Deora tended to be soft on kerosene and LPG, he justified the recent increase in the prices of petrol and diesel arguing the oil companies fall under the Navaratna category and they cannot sell at a loss.

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Pranab dispels fears about high fiscal deficit
Tribune News Service & PTI

Kolkata, July 12
Union Finance Minister Pranab Mukherjee today sought to dispel fears about the high fiscal deficit projected in the Budget for 2009-10, saying that the RBI would be able to manage government borrowing programmes effectively.

Speaking at a State Bank of India (SBI) function here, Mukherjee said that he had a meeting with the RBI board of governors yesterday.

"I hope the RBI would be able to manage debt effectively as it had done in the last fiscal," he said.

In 2008-09, government borrowing was pegged at Rs 1 lakh crore. But because of the slowdown, total government borrowing had risen to Rs 3 lakh crore, Mukherjee said.

In such a situation, the RBI had been able to manage debt effectively, the minister pointed out.

To a query, he said there would be no crowding-out effect of private investment and interest rates would also not rise.

The minister today inaugurated 154 branches and 2,151 ATMs of SBI in the country.

The minister assured the public sector and the corporates that they would get adequate financial assistance from the banks without any additional rate of interests and that the RBI was formulating new loan guidelines accordingly.

Mukherjee was here to inaugurate the new branch of the SBI at the Indo-Bangladesh border district in Murshidabad where the Union Minister for Minority Affairs Salman Khursed and the local Congress MP Adhir Chowdhury were also present.

Speaking on the occasion, the Finance Minister said the country’s financial crisis was still persisting in the wake of global recession. However, there could be no concern for the industries about the shortage of loans from the banks and other financial institutions.

Khursed declared that the Centre would be sanctioning special funds for the uplift of the backward and the minority communities everywhere in the country. He admitted the minorities were still neglected in several states.

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Obama urges patience on economic stimulus plan

Washington, July 12
With the US economy still firmly in the grip of a tenacious recession, President Barack Obama is urging Americans to have patience and give his economic recovery plan time to work.

Restating themes he laid out in his weekly radio and Internet address, Obama said in an op-ed posted early today on The Washington Post's Web site that his USD 787 billion stimulus programme was not expected to return the economy to full health, but to provide a boost that would stop the free fall.

"So far, it has done that," the president wrote. "It was, from the start, a two-year programme, and it will steadily save and create jobs as it ramps up over this summer and fall." He said his stimulus plan must be given time to work and appealed to Americans, who are increasingly uneasy with rising unemployment and ballooning budget deficits, to let his plan "work the way it's supposed to, with the understanding that in any recession, unemployment tends to recover more slowly than other measures of economic activity." The public has said in polls that it was willing to give Obama time to deal with the economic mess he inherited from President George W. Bush, but with unemployment pushing toward 10 per cent, that patience will likely be tested.

Republicans, sensing a political opening, have seized the opportunity to argue that Obama's economic stimulus plan was expensive and ineffective. — AP 

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China becomes world’s largest auto market

Beijing, July 12
China has for the first time overtaken the United States as the world's largest auto market with sales of locally-made vehicles surging 17.7 per cent to 6.1 million units in the first six months this year.

Sales of China's domestically made automobiles topped 1.14 million units in June, up 36.5 per cent over the figure a year earlier, the fourth month in a row surpassing the 1.1 million units mark, the China Association of Automobile Manufacturers (CAAM) said.

China's vehicle sales in June rose to 1.14 million, the second-highest month to date after April's 1.15 million units, out of which passenger car sales hit a monthly record of 872,900 units, it said.

Total auto sales for the first half of the year (Jan- June) rose to 6.1 million, up 17.7 per cent from a year earlier, out-pacing the US market, where passenger car sales in the same period plunged to 4.8 million amid the economic slowdown. CAAM said sales of such automobiles topped 1.14 million units in June, an increase of 36.5 per cent on the year.

This is the first time that sales of locally made automobiles surpassed 1.1 million units four months in a row, it said. — PTI 

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KFC, Pizza Hut’s parent Co under scanner

New Delhi, July 12
US-based Yum Restaurants, which owns the franchise of KFC and Pizza Hut in India, has come under the ED's scrutiny for allegedly failing to bring in Rs 390 crore ($80 million) foreign investment in the country after getting the government approval. The company, however, denied having received any show-cause notice, or any wrong-doing.

The Enforcement Directorate issued show-cause notice last week to the firm and asked Yum Restaurants India to reply within 30 days of receiving it, according to sources.

Yum was granted permission by the FIPB in 1993 where it had said it will bring in $80 million in India in two years in two tranches of $40 million each. Besides, it had also said that its business in India would be "foreign exchange-neutral". The company, however, brought in $35.5 million only, allegedly leading to a violation of the Foreign Exchange Management Act, and also the FIPB licence agreements, sources said. — PTI

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Tax Advice
No rebate on gift to daughter
by S.C. Vasudeva

Q. I am a senior citizen and a retired Govt. Employee of Himachal Pradesh Government with my pension income above tax exemption slab of Rs 2,25,000 for the current financial year besides Income from other sources such as interest on my fixed deposits in Nationalized Bank.

My queries are as under which need proper guidance from your learned Tax Advocate:

1. In order to save my tax to maximum extent may I gift some amount to my married daughter instead of going for a tax saver fixed deposit for a lock in period of five years? My daughter is a house wife.

In that case can I claim rebate in my total income for the amount so gifted under Section 80C of the Income-tax Act or not.

2. Is there any maximum limit for the gift amount?

— N.L. Gupta

A. Your queries are replied hereunder:

(i) You would not be entitled to any deduction under Section 80C of the Act in respect of the gift made to your daughter.

(ii) The Gift Tax Act 1958 is presently not in force and therefore a gift can be made to a relative defined under Section 56 of the Act without any limit. However, gift received from a person who is not covered under the aforesaid section, is exempt to the extent of Rs 50,000 only. If the gift received is more than the said amount from any of those sources which are not covered under the exempted category. The total amount so received would be treated as income from other sources in the hands of the recipient.

Asset transferred to spouse

Q. I understand that income from any asset transferred to the spouse is clubbed in the income of the spouse transferring such asset. Please clarify whether income on income derived from such an asset is also treated in the similar manner?

— Dinesh Kumar

A. According to the provisions of Section 64 of the Income-tax Act 1961 (the Act), in computing the total income of an assessee, there shall be included all such income as arises directly or indirectly to the spouse of such individual from assets transferred directly or indirectly to the spouse by such individual otherwise than for adequate consideration or in connection with an agreement to live apart. These provisions being of deeming nature, the income on income is not required to be clubbed for the purpose of computing the income of the individual who has transferred such asset to a spouse for an inadequate consideration.

Reinvesting NSCs

Q. Is it possible to re-invest the proceeds of the matured National Saving Certificates amount in the acquisition of National Saving Certificates?

— Inder Kumar

A. The proceeds of the matured amount of National Saving Certificates can be re-invested in the fresh purchase of National Saving Certificates for the purposes of making the claim under Section 80C of the Act. The amount of interest earned on National Saving Certificates is taxable but the maturity proceeds of the principle amount would not be taxable.

Senior citizens

Q. I request you to please clarify the following points:

1. My source of income is from pension and interest from fixed deposits etc. I will complete 65 years of age on 20.01.2010. Please clarify if I am eligible for tax rebates of senior citizens (65 years & above) for the financial year 2009-10) (Assessment Year 2010-11).

2. I would like to gift some amount to my wife. Amount will be deposited direct in the joint account with the 1st name of wife in the P.O. MIS Account. Since my wife has no independent saving account as such cheque will be issued in the name of Post Master for crediting the amount in the joint account having first name of my wife. Please clarify is this procedure of gifting the amount is correct? Or I should issue cheque in the name of my wife.

— Baldev Krishan Garg

A. Your queries are replied hereunder:

(i) You would be entitled to claim the benefit of senior citizen for the assessment year 2010-11.

(ii) The procedure suggested by you should not be adopted. It would be advisable to make a gift by issuing an account payee cheque in your wife's name. The cheque so made should be deposited in her bank account. The gift should be accompanied by a letter from the Donor. The Donee should acknowledge and accept the gift by a letter.

(iii) The amount so gifted is not taxable. However, any income arising from the gifted amount shall be clubbed with your income in accordance with the provisions of the Act.

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