Hudco achieves 118 per cent rise in sanctions
NEW DELHI, April 3 — The Housing and Urban Development Corporation Limited has achieved 118 per cent increase in sanctions in 1998-99 as compared to the previous year.

Industrial complex for leather
CHANDIGARH, April 3 — The Haryana Government is examining the feasibility of developing an exclusive industrial complex for the leather sector, especially shoes, its components and agricultural implements in Karnal to boost industrial development.

RBI rules out cut in interest rates
NEW DELHI, April 3 — The Governor of Reserve Bank of India, Dr Bimal Jalan today ruled out the possibility of a further cut in interest rates saying that the whole issue is interlinked with deposit rates prevailing in the economy.

Pak for boosting trade on raw material NEW DELHI, April 3 — A list of commodities, particularly of raw materials, needs to be drawn by Indian and Pakistan for improving bilateral trade, a leader of the visiting Pakistani business delegation has said.

Record sales by Tisco
JAMSHEDPUR, April 3 — The Tata Iron and Steel Company has registered record sales of steel at 2.73 million tonne for 1998-99 inspite of the economic recession which has hit the steel industry.

Bajaj Auto records highest sales
MUMBAI, April 3 — Bajaj Auto Ltd has recorded the highest ever sales in units at 14.23 lakh during 1998-99, representing a 6.7 per cent growth over previous year.

Hudco achieves 118 per cent rise in sanctions
Tribune News Service

NEW DELHI, April 3 — The Housing and Urban Development Corporation Limited (Hudco) has achieved 118 per cent increase in sanctions in 1998-99 as compared to the previous year.

Briefing newspersons here today, the Chairman and Managing Director of Hudco, Mr V Suresh pointed out that Hudco has achieved an all time high sanctions of Rs 6,666.67 crore, 118 per cent above last year’s achievement of Rs 3061.86 crore.

“It provided assistance for construction of a record 18.60 lakh dwelling units, over 11,700 sanitation units, and 121 urban infrastructure projects throughout the country,” Mr Suresh said.

He said that the loan released during the year 1998-99 amounted to Rs 3200.68 crore, an increase of about 50 per cent as compared to Rs 2,136.80 crore released last year.

The financial year 1998-99 has been a “momentous year for Hudco — be in respect of its operational performance, diversification of its delivery modes, expansion of its equity base, or forging of tie-ups in green-field areas”, Mr Suresh said.

He observed that Hudco’s contribution to the 2 million housing programme has been significant as it has sanctioned a loan assistance of Rs 1874 crore for construction of 10.65 lakh units, against its target of 10 lakh units under the programme. Hudco has supported 4.30 lakh units in urban areas against 4 lakh units assigned, and 6.35 lakh units in rural areas against the target of 6 lakh units.

Cumulatively till March 1998, Hudco has sanctioned a total of 14,263 schemes involving a total project cost of Rs 38,416 crore with Hudco’s loan component of Rs 23,055 crore. An amount of Rs 15422 crore has been released so far. Hudco’s assistance has helped in the construction of 85.58 lakh residential units, about 40 lakh sanitation units and in the undertaking of 709 urban infrastructure schemes effectively improving the living conditions in the urban and rural areas in 1718 towns and thousands of villages.

Industrial complex for leather
Tribune News Service

CHANDIGARH, April 3 — The Haryana Government is examining the feasibility of developing an exclusive industrial complex for the leather sector, especially shoes, its components and agricultural implements in Karnal to boost industrial development.

The Haryana Industries Minister, Mr Shashi Pal Mehta, said today that the present state government had acquired nearly 5,000 acres of land to create a 'land bank' for the development of industry. This was three times of what had been developed since the inception of Haryana in 1966.

The minister said the government had modified the industrial infrastructure development policy and was offering various benefits to attract entrepreneurs to set up units in Haryana. The benefits included deferment of sales tax on expansion and diversification, allotment of industrial plots in high potential and medium potential zones 'off-the-shelf' in case of capital investment of Rs 5 crore and above.

DTC places order for 10 CNG buses

NEW DELHI, April 3 (PTI) — Ashok Leyland, the flagship company of the Hinduja group, today said they have received an order of 10 buses with CNG powered Viking chassis from the Delhi Transport Corporation (DTC).

CNG may well be a feasible alternative to high cost emission control in diesel engines to meet emission norms of the future, R. Seshasayee, Managing Director, Ashok Leyland, said in a statement.

RBI rules out cut in interest rates
Tribune News Service

NEW DELHI, April 3 — The Governor of Reserve Bank of India (RBI), Dr Bimal Jalan today ruled out the possibility of a further cut in interest rates saying that the whole issue is interlinked with deposit rates prevailing in the economy.

Addressing an interactive session organised by the PHD Chamber of Commerce and Industry (PHDCCI) here, Dr Jalan called for a consensus on lowering the deposit rates which will enable banks to lower interest rates.

With 8 per cent of deposit rates and transaction cost at 3 per cent, the total cost to the banks comes to around 11 per cent. Any cut in any interest rate, therefore, will require a reduction in deposit rate, he added.

Unlike India foreign banks do not have long term deposits. There is a need to develop new institutions that take deposits for longer durations. This will enable banks to lower the deposits rates which in turn will lower the deposits rates, the RBI Governor said.

He, however, agreed to a suggestion that the spread on the terms loans should be reduced from 4 to 5 per cent.

Stating that the slack season credit policy will be announced on April 20, Dr Jalan said that a committee has been set up to review the prevailing regulatory mechanism and to make them more effective and user friendly.

Dr Jalan, however, cautioned that the banking and finance sectors have the collective responsibility of all concerned,be it the industrialists, government, bankers or the regulatory authority.

“However, all of us are subject to Parliamentary discipline”, he said adding that it is time when the banking and finance sector is the focus for stimulating growth and is considered the cause for all problems.

Record sales by Tisco

JAMSHEDPUR, April 3 (PTI) — The Tata Iron and Steel Company (Tisco) has registered record sales of steel at 2.73 million tonne for 1998-99 inspite of the economic recession which has hit the steel industry.

Steel sales during 1997-98 was 2.64 MT. Detailing the physical performance of the company for the year 1998-99 here today, Managing Director of Tisco, Dr. J. J. Irani said the company suffered only on the export front as the products had to be diverted from South East Asian countries to markets in the Middle East, East Africa, and the USA.

The domestic steel sales of the company during the year was 2.32 MT., registering a 4.5 per cent increase over the previous year.

Similarly, production of the company also registered marginal increases with hot metal at 3.63 MT., crude steel at 3.26 MT. and saleable steel at 3.1 MT., surpassing all previous records.

Irani said along with steady increase of domestic sales of steel, the company has been able to lower inventory levels by nearly 2000 tonnes over the previous year.

Pak for boosting trade on raw material
Tribune News Service

NEW DELHI, April 3 — A list of commodities, particularly of raw materials, needs to be drawn by Indian and Pakistan for improving bilateral trade, a leader of the visiting Pakistani business delegation has said.

Trade between the countries could take place in many raw materials. For instance inputs like molasses is required by India which is available in Pakistan. Similarly, many raw materials, which are available in India are in great demand in Pakistan, Vice President of SAARC Chamber of Commerce and Industry (SCCI) and Adviser to the Pakistani Ministry of Industry and Production, Mr Sheikh Jamil Mehboob Magoon said .

FICCI in a paper has identified sectors such as engineering industry, textile machinery, automobile, plastic, tea etc for trade with Pakistan.

Pakistani automotive industry could benefit from the availability of low priced Indian companies and offer its consumers competitively price vehicles, the FICCI paper said.

On the other hand, Pakistan’s plastic products would dominate Indian market and there is a scope for increase in exports of high value added plastic products.

At a reception accorded to the visiting Pakistani delegation by FICCI last evening, Mr Magoon said the business community in Pakistan is very confident of boosting mutual trade and investment.

An MoU for setting up of India-Pak Chamber and Industry would be signed on April 10, he said.

A 75-member delegation of MPs, businessmen and journalists have arrived in New Delhi from Pakistan primarily for boosting business and for promoting people to people contacts.

Bajaj Auto records highest sales

MUMBAI, April 3 (PTI) — Bajaj Auto Ltd has recorded the highest ever sales in units at 14.23 lakh during 1998-99, representing a 6.7 per cent growth over previous year.

The total unit sales exceeded the previous high of 14,22,849 units recorded in 1996-97.

New products launched by the company — Bajaj Legend, Bajaj Bravo and Bajaj Kawasaki Caliber — have been very well received, company Chairman Rahul Bajaj said in a statement here today.

Regarding volume sales from new products (legend over 5,000, Bravo over 8,000 and Caliber over 22,000), over 1.58 lakh Bajaj vehicles were sold in March 1999 alone, he said.

The new products enabled the company record better than industry growth rates in the scooter segment and in Japanese motorcycle sub-segment.

During the year, the company sold over two lakh Bajaj Kawasaki motorcycles recording a growth rate of over 45 per cent over last year as against industry growth rate of 30 per cent.

by Praful R. Desai
Does Rent Act apply to Wakf

Q: Whether provisions of the Karnataka Rent Control Act would apply to any Wakf?

Ans: The Karnataka H.C. dealt with this question in the case of Haji Ebrahim Sait Wakf v M/s. Mogra Trading Co. Ltd. (1998(2) R.C.J. 560).

Rent Controller rejected the contention of the petitioner that the premises in question belongs to a Wakf Board called Haji Ebrahim Sait Wakf and so the provisions of the Rent Act were not applicable. Hence the present challenge before the H.C.

The H.C. noted that the plea of the petitioner was rejected by the Rent Controller on the ground that the petitioner had not produced any document to show that it was the property managed by the Wakf Board.

S.2(7) (bb) (iv) of the Rent Act, as it stood prior to the Karnataka Rent Control (Amendment) Act, 1994, said: “Nothing in this Act shall apply to a Wakf under the management of the Karnataka Board of Wakfs”. As per the Karnataka Rent Control Amendment Act the words “under the management of the State government” have been omitted.

This means, the H.C. pointed out, that nothing in the Act shall apply to a Wakf, any Wakf. The petitioner has produced a xerox copy of the Wakf deed which shows that the premises in question is a Wakf property. Respondent No. 1 itself, which filed the petition for fixation of fair rent, has described the petitioner as Haji Ebrahim Sait Wakf.

From the interpretation of S.2(7) (bb) (iv), it is clear, held the H.C. that the application of the provisions of the Rent Act does not apply to any Wakf. It should be borne in mind that the petition for fixation of fair rent has been filed on 28.5.95, after the amendment to above has come into force.

For the aforesaid reasons, the H.C. allowed the Writ petition and the impugned order passed by the Rent Controller on 16.12.96 is quashed.

by R.N. Lakhotia

Q: Can brought forward long-term capital loss of the last year (1997-98) be set-off against short-term capital gain of the current year (i.e. 1998-99)?

2. Mr X has been maintaining books of account for the last five years. His total turnover and net profit are likely to be less than Rs 10 lakh and Rs 1 lakh respectively for the current year (viz. 1998-99). Can he now discontinue maintaining books of account at least for the current year?

— Parminder Kumar, Ludhiana

Ans: The brought forward long-term capital loss of last year can be set off against the short-term capital gains of the current year. On the facts stated by you, the maintenance of books of account would be compulsorily required because the turnover is say Rs 10 lakh on which the profit is Rs 1 lakh which comes to 10 per cent. The Income-tax law provides for non-maintaining of books of account for persons who are having retail business and for whom a flat rate of 5 per cent would be treated as the taxable income. In your facts the net profit is 10 per cent i.e. more than 5 per cent. You are, therefore, required to maintain compulsorily books of account.

Q: One of my client is a kacha arhtia. During A.Y. 1998-99 besides doing kachi arhat he sold wheat worth about 5 lakh in retail but the profit is very nominal viz. about Rs 400 in all. In view of the amendment applicable during A.Y. 1998-99 in retail sale the profit in retail sale be 5 per cent or the accounts may be audited. There are many similar cases where a kacha arhtia sells fertiliser or cement in retail or wholesale but profit is about 1 per cent. Kindly advise where in all such cases; the audit is necessary/must.

— Arjan Singh Chawla, Ferozepur Cantt

Ans: On the facts stated by you, if the net profit in retail business on sale is Rs 5 lakh is just Rs 400. The assessee must maintain regular books of account and get the same audited or reversely offer Income-tax at the rate of 5 per cent on the total turnover as the deemed profit for retail business. The tax audit would be a must in case the net profit is shown at less than 5 per cent.

Q: You have mentioned that exemption for housing projects is 100 per cent for the first 5 years and 30 per cent for the subsequent 5 years.

(a) Kindly let me know whether the maximum limit for Income-tax exemption under repayment of HBA is Rs 10,000 for the year 1998-99 (financial year) or it has been increased then to what extent?

(b) If the limit is Rs 10,000 then whether it is fully exempted or it is 20 per cent of Rs 10,000.

(c) What is the procedure of getting interest rebate on HBA? Whether 20 per cent is to be claimed in the return or tax to be deposited 1st and then to claim it and get the refund order.

— Suresh Sharma, Una (HP)

Ans: The tax exemption in respect of selected housing project of the nature referred to in Section 80 is @ 100 per cent for the first 5 years and thereafter 30 per cent for the subsequent years. However, as per amendment made by the finance (No. 2) Act, 1998 there is complete Income-tax exemption in respect of those persons who take up construction of residential houses of the dimensions mentioned in the Income-tax Act and complete such projects latest by March 31, 2001, then there will be no liability to Income-tax. The maximum tax rebate for repayment of house building advance is the same for the current financial year in comparison with the earlier financial year, namely Rs 10,000. Thus on repayment of house building loan of Rs 10,000, tax rebate is permissible at the rate of 20 per cent thereon as per Section 88. Full exemption is not available on such repayment of the housing loan. The tax rebate in respect of housing loan can be availed from your employer.

by A.K. Sachdeva

Q: We are registered as a dealer under Haryana General Sales Tax Act, 1973 and the Central Sales Tax Act, 1956. The registration certificate issued to us by the assessing authority under Section 7(2) of the CST Act, 1956 authorises us to buy, inter alia, machinery of all kinds, its parts and accessories... ............” for use in the manufacture of finished products. During the assessment year 1996-97 we bought on the strength of registration certificate diesel generating set against form ‘C’ availing of the benefit of concessional rate of tax. This diesel generating set has been used for carrying out manufacturing activities employed by us. During the course of the assessing authority points out that the registration certificate issued under Section 7 of the CST Act, 1956 did not permit us to buy this item against form ‘C’ and thus we have committed an offence within the meaning of Section 10 by wrongly issuing form ‘C’ to the seller. Kindly advise.

— Madhusudan Sharma

Ans: The view expressed by the assessing authority to the effect that form ‘C’ was unauthorisedly issued against the purchase of diesel generating set is not correct. Admittedly, the registration certificate issued by the appropriate assessing authority in terms of Section 7 of the Central Sales Tax Act, 1956 includes, inter alia, “machinery of all kinds, its parts and accessories”. The term machinery is wide enough to include within its ambit “diesel generating sets”. It has been consistently held by several High Courts as well as the Supreme Court of India that a diesel engine falls within the purview of entry “machinery”. Even if diesel generating set is used for generation of power energy but still it cannot be said having regard to the principles laid down by the Courts that it has not been used in the manufacture of finished goods. No penalty is thus leviable under the provisions of the Central Sales Tax Act, 1956 in view of the settled law.

Q: We are engaged in the business of ayurvedic medicines being a dealer registered under the Punjab General Sales Tax Act, 1948 and the Central Sales Tax Act, 1956. What happens normally is that we carry goods for showing them to the intending buyers and that the goods so carried are sold there on acceptance given by the parties. What documents are required to be issued in support of the movement of goods before actual sale takes place? Kindly advise.

— S.K. Mathur, Sangrur

Ans: Having regard to the facts of the case, it would be appropriate if a challan is issued giving out the details relating to the goods proposed to be carried from the place to another. If the goods are accepted by the customer, you will be required to issue a regular bill in support of the sale of goods. Further if the goods are carried through some goods carrier, one additional documents, goods receipt will also have to be issued in relation to the consignments.

Q: While deciding the assessment for the assessment year 1995-96, the assessing authority omitted to take into consideration one payment of admitted tax which was made along with the periodical returns furnished under the Haryana General Sales Tax Act, 1973. This has obviously resulted in additional demand. Now kindly advise if the order of assessment passed by the assessing authority can be re-opened? If so, what is the remedy available to us in this context?

— Ashok Garg, Karnal

Ans: Under Section 33 of Haryana General Sales Tax Act, 1973 the assessing authority is authorised to rectify any arithmetical or clerical mistake that has crept in during the course of the finalisation of the assessment. Omission to take into account the payment of admitted tax paid along with returns apparently falls within the scope of Section 33 read with rule 28 of the Haryana General Sales Tax Rules, 1975. Therefore, an application for rectification of this mistake can be submitted in terms of the provisions of Section 33 of Haryana General Sales Tax Act, 1973 before the appropriate assessing authority inviting his attention towards this fact.

by Ashok Kumar
All is not yet well with Unit Trust

MANY gullible investors seem to feel that in the aftermath of Yashwant Sinha’s latest Union Budget, all is now well with the Unit Trust of India’s US-64 scheme. Far from it, we have been advising our clients to use this as a golden opportunity to exit before it crashes under its own weight. Historical evidence suggests that whenever artificial props are used at the bourses, they inevitably backfire. The Finance Minister would like to have us believe that once the PSU stocks are weeded out of its portfolio, the US-64 scheme will be alive and kicking again. But hey, wait a minute? What about its rather extravagant exposure to Reliance Industries? And what about the prospects of Reliance Industries?

The largest manufacturer of synthetic blended fibres (PSF/PFGY), intermediates (PTA/MEG/PX), plastics and polymers in India, Reliance Industries has become a truly global sized company that gives it the much required leverage and pull. Indeed, given the business it is in, size is a major determinant of success. This is simply because of the fact that these products are highly price-sensitive and the more one is able to reap the economies of scale, the better would be one’s competitive position. During 1997-98, the company successfully commissioned a new 2 lakh tpa polyethylene plant, a new 1.2 lakh tpa MEG plant, a 30,000 tpa FF plant and a new 2.5 lakh tpa PTA plant. In addition, the capacity of the multifeed cracker was increased from 5 lakh tpa to 7.5 lakh tpa of ethylene. In fact, over the past 2.3 years, the company has reportedly commissioned 17 new world class facilities with different technologies. At present, it is concentrating most of its efforts in building two world scale plants at the site of its Jamnagar refinery at a cost of Rs 5,000 crore, upon the completion of the project, the company is expected to emerge as one of the top five PP manufacturers in the world and also the world’s second largest producer of paraxvlene. In effect, its Jamnagar complex will be the first world scale manufacturing complex to have a fully integrated petroleum refinery, petrochemicals complex, power plant and a port with related infrastructure. RIL’s PET has received approval from US Food and Drug Administration and EEC authorities resulting in enhanced export potential. However, considering the fact that 81 per cent of the market for fibre intermediates like Purified Terephthalic Acid and Mono-Ethylene Glycol ie controlled by RIL’s domestic demand will solely depend upon growth in the polyester business. It is also likely to create pressure on prices and will impact margins.

There remains an excess supply over demand for fibre intermediates and is likely to continue for another two years. The polyester business, however, is likely to continue to show robust growth. RIL has ensured that imports have not been able to penetrate Indian markets but this has been achieved at the cost of lower prices and margins. However, volumes growth, higher value integration and productivity gains will drive earnings. Also a shakeout in the polyester sector is likely to continue in the current year as well and improve the demand-supply imbalance. RIL has already incurred a capital expenditure of over Rs 700 crore in the Q1 ‘98-99. This would reduce outgo on taxation as depreciation available under the Income Tax Act would increase, substantially. Besides, the company has revalued its plant and machinery located at Patalganga and Naroda resulting in an appreciation of Rs 2,771 crore. This will also help in significantly reducing Minimum Alternate Tax (MAT) liability. Overall, the prospects of this company seen satisfactory, albeit unexceptional.

Does this augur well for UTI’s US-64 scheme? Draw your own conclusions. But to the credit of Yashwant Sinha it must be said that unlike many of his predecessors, his Budget did not go out of its way to provide sops to some of India’s largest and most influential business groups.

Has liberalisation let down common man?

SEVEN years of liberalisation have given the country an overall economic growth rate of over 5 per cent, but several experts note that projected targets are far from achieved and the structural adjustment programme has hit the common man hard.

There has been too much focus on the industrial sector at the cost of the agricultural sector, which remains the mainstay of our economy, says the former Union Minister, Mr Chaturanan Mishra.

For all the talk about encouraging the private sector, it has been able to provide only 85 lakh jobs in the non-agriculture sector till 1996, says Prof Kamal Kabra of the Indian Institute for Public Administration (IIPA), citing a Labour Ministry study.

At 3.76 crores, the number of registered job seekers by 1997 far exceeded those employed in the organised sector.

Between 1991 and 1994, eight lakh jobs were created but those seeking employment numbered a whopping 30 lakh.

“The Finance Ministry will give Rs 2,000 crores for import of wheat but not half of it for our own farmers,” rues Mr Mishra, charging successive Governments with adopting lopsided policies.

A Centrally-financed, Panchayat-administered development project could, besides generating employment, provide social security to the vast rural majority of landless labourers, says Prof Kabra, advocating the need for developing rural infrastructure so that there is little incentive for migration to cities.

For Y2K babies

SOME Norwegians trying to have the first baby of the new millennium got shy despite a hotel offer of free rooms for sex at the height of an “erotic week”.

“We started off with 20 reservations, but in the end only four couples turned up,” said Rakel Dyrhaug, sales manager of the Norlandia Hotel in the small town of Otta. “Many people got scared away, partly because of the media attention.”

The hotel, in a mountainous part of southern Norway, had offered local residents free rooms for the afternoon, reckoning that March 30 was the best day for a woman wanting a baby on January 1, 2000, to get pregnant.

Local shops are promising gifts worth about 100,000 crowns ($ 12,800) for the first baby of the new millennium, as part of a drive to repopulate the area, north of Lillehammer, where the Winter Olympics were staged in 1994.

April fool

A FRONT page story in Deccan Chronicle, datelined Islamabad, said on Thursday that India and Pakistan planned to form a common currency, the Indo Pak, by January 2000. Shocked readers were, however, reassured that it was an April Fools’ Day joke.

“Foreign Secretary, Mr K. Raghunath, and his Pakistani counterpart, Mr Shamshad Ahmed, will sign the pilot agreement in Islamabad on Thursday in the presence of (an) adviser to the European Commission....,” the daily said.

It said a formal announcement would be made soon by the Prime Ministers of both countries and added that the common currency idea was floated by the former premier, Ms Benazir Bhutto, as a follow-up to the Indian Prime Minister, Mr A.B. Vajpayee’s bus diplomacy trip, which itself followed the introduction of the euro.

Just fun

HAVING a little April fools’ fun, a major newspaper reported on Thursday that Prime Minister Keizo Obuchi will appoint famous foreigners to government posts in a last ditch effort to boost Japan’s ailing economy.

Those said rumored to receive appointments include former British Prime Minister Margaret Thatcher and former U.S. trade representative Mickey Kantor, the Asahi newspaper reported, tongue firmly in check. Former Soviet President Mikhail Gorbachev and founding father of Singapore Lee Kuan Yew were also mentioned in the report.

The Asahi is Japan’s second-largest mass circulation daily. Slated for positions such as Trade Minister and Economic Adviser, the new Cabinet members will be counted on to help revive the Japanese economy, stuck in its worst recession in years, the paper said. Fictitious government sources quoted by the paper said it was about time Japan internationalised its government.

— Agencies

Office- bearers
CHANDIGARH, April 3 (TNS) — Mr Devinder Kumar Singla elected as Chairman of the Chandigarh Branch of Northern India Regional Council of The Institute of Chartered Accountants of India for the term 1999-2000. Other office bearers of the committee are: Mr Avnish Sharma — vice-chairman; Mr Vivek Arora — secretary and Mr Baldev Garg — treasurer.