SPECIAL COVERAGE
CHANDIGARH

LUDHIANA

DELHI


THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
B U S I N E S S

Gas Row
RIL using power cos to fight battle: RNRL 
New Delhi, July 19
Anil Ambani group firm RNRL today hit out at power companies GMR and GVK for raising the bogey of unfair price advantage to it, saying that they had got into gas deals with Mukesh Ambani-led Reliance Industries (RIL) knowing that the agreement was subject to the outcome of the RNRL-RIL case.

‘Compromise may hold the key’

Market Update
Rally likely to continue
Markets, this week are likely to remain bullish after a nine per cent surge last week. The Finance Minister’s clarifications in Parliament on disinvestment and the borrowing programme, coupled with reports of encouraging progress in monsoon led the recovery after previous week’s sharp decline. Huge short positions were built in both near month Nifty as well as some of the Nifty components during the previous week. It was evident that any positive indicators either from the economy or from the corporate results could trigger short covering, thus enabling the underlying index to post a huge surge.


EARLIER STORIES




A model displays a creation by Nazia Malik at a fashion show in Karachi late on Saturday. Nazia Malik took part in theme of fashion show “Collage instyle” by “dee & zee” in which various models presented bridal dresses and party wears depicting the local culture with new-era touch. A model displays a creation by Nazia Malik at a fashion show in Karachi late on Saturday. Nazia Malik took part in theme of fashion show “Collage instyle” by “dee & zee” in which various models presented bridal dresses and party wears depicting the local culture with new-era touch. — AFP

Govt to keep 51% holding in PSU banks: Pranab
Kolkata, July 19
Finance Minister Pranab Mukherjee today assured the bankers and the union leaders that though the government had decided in principle to allow disinvestment in the banking sector, the Centre would be still holding 51 per cent of the total share, which would protect the interests of the customers and the shareholders. He was speaking at a function organised to mark the 40th anniversary of the banks’ nationalisation at Sagardihi, Murshidabad. 
He was speaking at a function organised to mark the 40th anniversary of the banks’ nationalisation at Sagardihi, Murshidabad.

Tax Advice
Long-term loss can be set off against long-term gain
Q. I seek your advice about carryover of loss in sale of shares:I have suffered a loss of Rs 42,000/- on sale of shares within one year of their purchase and Rs 12,000 on sale of shares retained for period of over one year. I may be advised if the total loss of Rs 54,000 may be carried over for the next year is 2009-10 (Assessment year 2010-11).— Avtar Singh





Top








 

Gas Row
RIL using power cos to fight battle: RNRL

New Delhi, July 19
Anil Ambani group firm RNRL today hit out at power companies GMR and GVK for raising the bogey of unfair price advantage to it, saying that they had got into gas deals with Mukesh Ambani-led Reliance Industries (RIL) knowing that the agreement was subject to the outcome of the RNRL-RIL case.

Commenting on reports that GMR Group, Torrent Power and GVK Industries had approached the government complaining that unfair price advantage to the ADAG firm will kill competition, RNRL counsel Mahesh Agarwal said, "They are citing the RIL battle or in other words, RIL is using them to fight its own battle." Reliance Industries and Reliance Natural Resources Ltd (RNRL) have filed cross-appeals in the Supreme Court challenging the Bombay High Court decision and the apex court will hear the case tomorrow.

The power companies had voiced concerns that gas supply from RIL's KG-D6 fields would be impacted if the fuel is to be diverted to RNRL at lower rates.

"GMR and GVK signed agreements with RIL based on the Bombay High Court order and that provides that gas supply is subject to the outcome of the RNRL-RIL case," Agarwal said.

He said that the Ministry of Petroleum had suggested to the High Court that pending the dispute, gas could be supplied to others and the same was accepted.

GVK vice-chairman GV Sanjay Reddy said, "(The judgment) is in favour of one particular group which has been given inexplicable advantage to load the electricity market against all competition."

"The benefit of differential price being passed selectively to a particular group will give rise to the worst kind of biased market condition to the detriment of the development of the power sector and the economy of the country in general," it wrote.

Hyderabad-based GMR Group said it could begin electricity generation from the 388 MW Vemagiri power plant, built in September 2006, only in April upon the arrival of KG-D6 gas.

"Such large quantities of gas supplied to a single entity will not leave scope for any other player in the field to sustain and survive," said BVN Rao, business chairman, energy, GMR Group.

Earlier, Andhra Pradesh Chief Minister YS Rajasekhara Reddy had written to Prime Minister Manmohan Singh saying that valuable resources like natural gas "cannot be allowed to be monopolised by a few private developers".

"All gas supply contracts, be it the family contract or the gas sale purchase agreement (GSPA) with the power plants, should become subordinate to the decisions of the Empowered Group of Ministers (that allocated the first 40 mmscmd gas between fertiliser and existing power plants) and not otherwise," he wrote.

"We cannot allow the decision-making in regard to such an important resource to fall in the private monopolistic domain," he said in the letter. — PTI 

‘Compromise may hold the key’

The solution to the protracted gas supply dispute between the two Ambani brothers that has reached the Supreme Court may come through a compromise, some analysts said, fearing that the row could well impact the stock prices of group companies of both. "The issue (gas dispute) is vexed, therefore, and may eventually require a compromise. Pricing holds the key ...," global research firm CLSA said in a research note.

While RNRL wants immediate implementation of the order to get the gas at $2.3 per mmBtu, a price 44 per cent lower than the one fixed by the government, RIL says it cannot supply the industry fuel without the consent of the government.

Top

 

Market Update
Rally likely to continue
by Lalit Batra

Markets, this week are likely to remain bullish after a nine per cent surge last week. The Finance Minister’s clarifications in Parliament on disinvestment and the borrowing programme, coupled with reports of encouraging progress in monsoon led the recovery after previous week’s sharp decline. 

Huge short positions were built in both near month Nifty as well as some of the Nifty components during the previous week. It was evident that any positive indicators either from the economy or from the corporate results could trigger short covering, thus enabling the underlying index to post a huge surge. 

And that’s what exactly happened after the government showed some signs of aggressively pursuing the divestment policy besides other reforms. While positive cues from global markets aided the sentiment.

The government is reportedly considering to divest stake in four PSUs — National Minerals Development Corporation (NMDC), Kudremukh Iron Ore Company (KIOCL), Manganese Ore (India) (MOIL) and Rashtriya Ispat Nigam (RINL) — administered by the steel ministry, as part of a broader plan to mobilise resources to meet their funding needs.

MIC Electronics

One of the few players in the LED (light-emitting diode) business globally and the only listed player in India, Hyderabad-based MIC Electronics is looking at a huge market of LED lighting for billboards and video walls for advertising, signalling systems and industrial lighting.

LED is the latest technology in the light sources space. It is believed that LEDs are far more efficient as compared to traditional light sources. This means that it consumes lesser energy, lasts longer and has other advantages such as being more powerful and smaller in size as compared to the traditional sources.

Given the above fact the Railways, for instance, has also emerged as a key business driver for MIC’s LED lighting segment, providing an estimated annual addressable opportunity of Rs. 110 crore over the next five years. With a rising need to conserve electricity and improve passenger amenities, the Railways is increasingly adopting LED lighting in new and existing coaches. Also, the REC (Rural Electrification Corporation) plans to purchase over 1 million solar street lights under the Rural Electrification Programme. Then, the government plans to purchase 400 million CFLs under the Bachat Lamp Yojana, with LED lamps being part of the scheme, which could provide considerable growth opportunities for MIC.

Besides, MIC has an important cost advantage to boast of. Its prowess in the embedded technology space helps it to reduce hardware expenditure, which coupled with lower labour and other costs enables it to produce similar quality LED displays at around 40 per cent lesser cost than competitors. Given the above positives for the LED industry, we are bullish on MIC’s growth in the coming two to three years. MIC trades at Rs. 38 at 6 times its earning which makes the stock a very attractive investment opportunity for a long-term investor. The risks to the above recommendations are technology obsolescence and risks associated with operating in the niche segment.

Top

 

Govt to keep 51% holding in PSU banks: Pranab
Subhrangshu Gupta
Tribune News Service

Kolkata, July 19
Finance Minister Pranab Mukherjee today assured the bankers and the union leaders that though the government had decided in principle to allow disinvestment in the banking sector, the Centre would be still holding 51 per cent of the total share, which would protect the interests of the customers and the shareholders.

He was speaking at a function organised to mark the 40th anniversary of the banks’ nationalisation at Sagardihi, Murshidabad. He distributed United Bank of India’s kisan credit cards among the poor cultivators. Later, he also distributed the credit cards to farmers at Raigang, West Dinajpur.

Mukherjee dispelled all misgivings and apprehensions that by allowing the disinvestment, the government would be helping the private sector to swallow the entire banking industries at the cost of the employees and the country’s interests.

On the contrary, he said, the steps would help revamp the entire banking sector and serve the interests of the employees and the industries in a better way.

The Finance Minister alleged that some political parties and the trade unions had been unnecessarily creating problems by campaigning against the implementation of the government’s new banking policies. He assured all concerned that though there would be disinvestment, the government would have a full control over the banking management and disinvestment processes.

Top

 

Tax Advice
Long-term loss can be set off against long-term gain
by S.C. Vasudeva

Q. I seek your advice about carryover of loss in sale of shares:

I have suffered a loss of Rs 42,000/- on sale of shares within one year of their purchase and Rs 12,000 on sale of shares retained for period of over one year. I may be advised if the total loss of Rs 54,000 may be carried over for the next year is 2009-10 (Assessment year 2010-11).— Avtar Singh

A. The loss of Rs 12,000 suffered by you on the sale of shares which had been held for a period of over one year being a long-term loss can be set off against long-term gain. It can be carried forward for being so set off for eight years immediately succeeding the year in which the loss was first computed. The loss of Rs 42,000 in respect of shares held for less than one year will be treated as a short-term capital loss. It can be set off against short-term gain or a long-term gain. Such loss is also allowed to be carried forward for eight years for being so set off. The answer to your query is based on the presumption that you were not carrying on a business of purchase or sale of shares and the loss on the sale of shares is in respect of the shares held as investments by you. Further the carry forward of such losses is allowed if the return is filed within the time limit prescribed under Section 139(1) of the Act.

Tax liability

Q. I am a senior citizen of 68 years of age. Following incomes will accrue me in 2008-09 (Assessment year 2009-10).

1. Annual pension 1,58,605

2. Medical allowance 4,200

3. NSC interest 42,070

4. Interest on FDRs 3,18,410

5. Interest on savings 4,822

6. Agricultural income 6,37,000

7. Medical reimbursement 5,904

Kindly compute my total Income-tax for 2008-09 (Assessment year 2009-10). I have invested Rs.1,00,000/- in Reliance Life Insurance during 2008-09. On FDRs Banks have also deducted Rs 32,372 as TDS. I have also deposited Rs 26,000 as Advance Tax during 2008-09.— Harmail Singh

A. On the basis of the figures given in the query your total income, excluding the agricultural income of Rs 6,37,000, would work out at Rs 4,28,110. The net tax payable thereon, after giving rebate for agricultural income and adjustment of advance tax and tax deducted at source would work out at Rs 4,389. The payable amount after including interest under section 234B and 234C of the Act would work out at Rs 5,420. The above computations are based on two presumptions — interest earned on NSC is income for the year and that the advance tax was paid in the month of March 2009.

II

Q. I am Pb. Govt. pensioner, senior citizen (77). Kindly help me calculating Income Tax liability upon me from my following incomes in the year 2008-09, assessment year 2009-10:

1. Pension 1,66,627

2. D.A. arrears 6,548

3. L.T.C. 5,323

(payable every two years)

4. House rent 80,000

5. P.O. interest 5,000— Pritam Singh

A. The total income on the basis of the figures given in the query works out at Rs 2,34,175. This is based on the presumption that LTC amount has been spent by you for the purposes of travel and is therefore not chargeable to tax. Further the house tax paid in respect of the property given on rent has not been indicated in the query and therefore the deduction of 30% has been calculated on the entire amount of Rs 80,000. In accordance with the provisions of the Act, the deduction of 30% has to be computed after deducting house tax paid from the rent received or receivable for the year. Similarly, the interest in Post Office Saving Account has been treated as taxable as the nature thereof has not been indicated. The tax payable on this basis would be Rs.946/- including the education cess. 

Extension of PPF account

Q. My PPF (HUF) A/c matured on 31.03.2004. This A/c was extended with subscription for a block period of 5 years which again matured on 31.03.2009. I have contacted a CA and Accounts Officer of SBI who deals with PPF. They have told me that the existing PPF (HUF) (A/c) can be further extended for a block period of 5 years and no new PPF (HUF) A/c can be opened now in view of Govt. notification GSR 291 (E) dated 13.05.2005.

Please guide me for continuing it with subscription or without subscription in view of the amendments made in PPF Scheme vide notification dated 13.05.2005 which are as under:

(i) in para 3 sub para (2) shall be omitted.

(ii) In para 12 sub para (1) the note shall be omitted.

(iii) In Form A (Some changes have been made in Application Form for opening new PPF A/c).— Rajesh Chander

A. The changes referred to in your query are as a consequence of the discontinuance of the opening of an account under Public Provident Fund Scheme 1968 by an HUF. Since you already have an account under your HUF status, these provisions would not apply to you as the amendment made are not retrospective in operation. In case you want to continue with the account it will be better to keep subscribing the minimum subscription amount of Rs 500. 

Top

 





HOME PAGE | Punjab | Haryana | Jammu & Kashmir | Himachal Pradesh | Regional Briefs | Nation | Opinions |
| Business | Sports | World | Letters | Chandigarh | Ludhiana | Delhi |
| Calendar | Weather | Archive | Subscribe | Suggestion | E-mail |