|B U S I N E S S||
Sunday, April 11, 1999
Pak businessmen seek
Corporation Bank gets Asian award
WB report to improve FDI
Job opportunities for Indians in
Pepsi moves HC against
ST hike makes 8000 small
Brand equity fund to be raised:
New Rs 100 notes
businessmen seek transit facility
NEW DELHI, April 10 The business community of Pakistan has urged India to provide transit facilities for export to SAARC countries.
The first President of the Indo-Pakistan Chamber of Commerce and Industry Senator Illyas Bilour said that trade among Bangladesh, Nepal, India and Pakistan can get a big boost on account of transit facility.
Speaking at the inaugural function of the India-Pakistan Chamber of Commerce and Industry organised by FICCI here, Senator Bilour said that the neighbouring countries like Bangladesh, Nepal, India and Pakistan should join hands to improve infrastructure for road and rail transportation. This facility would be particularly helpful to areas, which are far away from sea ports, he said.
Collaboration in banking, insurance, construction,medical, hotel and tourism, consultancy, manpower development and training services need to be explored and harnessed, he added.
He called upon the business leaders of both countries to urge the political leadership to create a congenial atmosphere and resolve all political disputes.
So far we have been ignoring the basic needs of people on both sides who are in the grip of poverty, disease and hunger. We have been providing fodder for the guns. Let us stop this practice and supply food for the teeming masses, Senator Bilour said.
He said that if the Uruguay Round decisions were implemented, majority of developing countries will become dumping ground for the products of the developed world.
Local industries will not be able to compete due to low level of research and development, low labour productivity and absence of economies of scale in production.Seen in this context, India is in a stronger position particularly in the engineering sector than Pakistan due to higher research and stronger industrial base.
I believe that if there is any threat to Pakistan industry in the wake of Uruguay round Agreement, it is more from the industrialised countries than from India, Senator Bilour said.
In his inaugural address, the Union Industry Minister, Mr Sikander Bakht, said India and Pakistan must acknowledge the emergence of global village.It was important that both countries shed inhibitions and join hands for enhancing bilateral trade, Mr Bakht said.
President of FICCI and
Co-President of India-Pakistan Chamber of Commerce and
Industry, Mr Sudhir Jalan said that bilateral trade
between the two countries was between Rs 2000 to Rs 2500
crore. However, the impediments, which were coming in the
way , have diverted this trade to unofficial route, Mr
Bank gets Asian award
CHANDIGARH, April 10 Corporation Bank has been conferred with the Asian Banking Award 1999 for its performance in the social responsibility project for its self help groups bank linkage programme implemented in 1998.
The Chairman and Managing Director of the bank,Mr R.S. Hugar, received the award on Friday during the Asia Pacific Bankers Congress in Manila. The bank has also received certificates for its hi-tech deposit product, Corpclassic and cash management product, billclear service. Self-help groups are small groups of rural poor formed voluntarily for a common goal. These groups save and contribute to the common fund, from which small loans are made to the needy members, as per the decisions of the group.
Corpclassic is an innovative saving product, which combines high liquidity of savings bank account and high returns of the term deposit to give customers the best returns for their money. The unique feature of the product is the customised information system and high-tech software. In fact, the bank is among the first banks in India to launch such a multioptional deposit product through savings bank route.
NEW DELHI, April 10 (PTI) Finance Minister Yashwant Sinha today said World Banks observation that India is now the most sought after destination would help in stepping up the flow of foreign direct investment into the country.
The World Banks observation will surely go a long way in promoting further foreign direct investment, he said adding on our part we are taking steps from time to time to improve the overall outlook for investment in India.
Asked if he proposed to come out with any package for attracting foreign investment, Sinha said we are already taking steps to attract FDI.
It is a continuous process and we have already taken a number of steps in the last 12 months to enable India attract more foreign investment, he told PTI in an interview.
In its latest global development finance report, World Bank had observed that despite a substantial fall in overall foreign direct investment flow to Southeast Asia, investment flows to India had soared.
This, is said, had happened despite concerns over the Pokhran nuclear tests.
On the launching of the
second generation reforms, Sinha said he had committed at
the time of the Budget presentation that he would come
out with a paper on it before the Budget session of the
Parliament ends on May 14.
LONDON, April 10 (PTI) Leading non-resident Indian businessmen brothers, Srichand and Gopichand Hinduja, with an estimated wealth of £ 1.3 billion have been named as Britains richest Asians in the Asian Millionaires Survey which also includes prominent names like Labour Peer Lord Swraj Paul and novelist Salman Rushdie.
The survey published yesterday said Srichand (63) and Gopichand Hinduja (59) with interests in finance, oil, industry, telecom and television topped the list of Britains richest Asian 200 displacing steel magnate Lakshmi Mittal, Chairman of worlds fourth largest steel conglomerate, the Lnm Ltd, who is second with an estimated worth of £ 1.2 billion.
Television magnate, Subash Chandra, chief executive of Zee television, who made his fortune in trading has been listed as the third richest Asian with a worth of £ 450 million followed by Labour Peer, Lord Swraj Paul, Chairman of the Caparo group of companies with an estimated worth of £ 325 million, in the list brought out by Asian magazine Eastern Eye.
The Times, which would bring out its list of Britains 500 richest at the weekend said women were gradually breaking into the male dominated Asian business list, with 16 appearing in the latest annual survey including Bihar born, Parween Warsi who runs a chilled food company worth £ 45 million.
Also figuring in the list are Namita Punjabi, co-owner of Chutney Mary restaurant group and an authority on Indian cookery with an estimated earnings of £ 5 million bracketed with Booker prize winning novelist, Salman Rushdie and Avtar Litm, who has the credit of making first Asian Radio station in Europe, Sunrise Radio based in London, a runaway success.
Namita Punjabi said, lot of women in India are doing very well, but it has not yet happened here in a major way, the immigrant families here are very conservative and still holding onto traditions of 1950s.
About 50 of top Asian businessmen listed in the Eastern Eye are expected to make it to the next Sunday Times rich list in which both Hinduja brothers and Lakshmi Mittal are expected to figure among the top 10 richest in Britain and among the first 30 in Europe.
Non Resident Indian Tom Singh, who has made a niche for himself in the fashion world of Europe starting with new look womens wear in 1969 has been listed as sixth richest Asian in Britain with an estimated worth of £ 200 million.
Another NRI youngster,
Jasminder Singh, whose family has acquired a chain of
hotels around London, The Edwardian Group
also figures as the sixth richest Asian with an estimated
worth of over £ 200 million. The survey said that
Britains most affluent Asian men and women have a
combined wealth of £ 7 billion.
Job opportunities for
Indians in Canada
CHANDIGARH, April 10 Mr Curtis Panke, Director, Golbal Placement Service (INC) Canada is coming to Indians on a tour to conduct seminars and give detailed information of job opportunities for Indian professionals in North America with special reference to Canada.
Mr Panke will conduct seminar with Col B.S Sandhu of WWICS in Chandigarh on April 17 and provide expert counselling to the qualified applicants of WWICS and guidance to professionals looking forward for settlement in Canada. Seminar in Delhi and Noida will be on April 18.
According to Mr Panke,
the Canadian economy will create more than one million
jobs over the next four years. The unemployment rate is
likely to be pushed down to 7.5 per cent by early next
century. Employment growth will remain above 2 per cent
this year with an average of 1.7 per cent in each of the
NEW DELHI April 10 (PTI) Frito Lay India (FLI), a wholly-owned subsidiary of Pepsico, today moved the Delhi High Court to restrain the manufacturer of Boomer bubble gum and its associates for allegedly copying its promotional scheme.
FLI, in its petition, which came up for hearing before Justice SK Mahajan, alleged that General De Confiteria India Ltd (GDCIL) has copied its free gift schemes of giving away Tazo disc with every pack of wafers Lays.
Frito Lay counsel, Mukul Rohtagi and Prathiba Singh told the court that since the scheme was devised by his client, it was entitled for protection against any kind of copying.
They said free gift discs given away by GDCIL was similar to that of Tazo which amounted to passing off of such discs as that of the Frito Lays.
Seeking permanent injunction restraining GDCIL and its associates from using a similar promotional scheme, the counsels said FLI was the registered user of word Tazo in 15 countries.
FLI alleged that the manufacturer of Boomer had not only copied marketing methods and promotional campaigns by giving away free round discs with its bubble gum but had also copied the commercials that were aired by the petitioner.
in Punjab unstable
Punjabs Budget followed by that of the Municipal Corporation of Ludhiana has sent shock waves.
Sales tax is the main source of revenue for the State Government. The Punjab Governments anxiety over the declining sales tax revenue is understandable. Long running recession is the main reason. The governments claim that Haryana and Himachal Pradesh have shown higher growth in revenue than Punjab is not tenable as Punjab is different from these States in many respects.
The sales tax pattern in Punjab is beset with many shortcomings and has been highly unstable. The rising rate of evasion has much to do with this scenario. When Punjab was under Presidents rule growth in CST was as high as 35 per cent while neighbouring States were far behind.
This years Budget has brought many new proposals on sales tax. Proposed entry tax is not workable. Equally unworkable is the levy of 4.4 per cent first stage tax on autoparts and ball bearings. A particular product is final after passing through few separate units. Rule 29 (XII) allows set off for the tax paid at the previous stage with the rider that the turnover should be covered under the Punjab Government sales tax. For interstate sales this is not applicable. Can this work in Punjab where bulk of industrial turn over is interstate? First stage tax is applicable to furnace oil and yarn dealers who have regular complaints about the rebate.
If a trader buys goods from small manufacturer and sells it out side Punjab he has to bear 4 per cent CST. Under the new pattern trader has to first pay 4.4 per cent first stage tax and then 4 per cent CST. Can he stay in the business with additional 4.4 burden? If the manufacturer himself sends the product outside Punjab it will be cheaper by 4.4 compared the route through the trader.
Ball bearing trade is already fishy and levy of 9 per cent tax on first stage shall make it murkier. If a trader in Punjab gets ball bearing from say Mumbai he has to bear 4 per cent CST and customer has to bear 13 per cent tax. The same ball bearing from Haryana can be cheaper by 5 per cent and more cheaper from Chandigarh. People will either purchase from outside or resort to tax evasion; the latter is more convenient. In either case government revenue suffers.
Municipal Corporation in its budget has increased octroi rates many folds. Octroi on power has been increased to 7 paisa per unit. The levy was imposed amidst strong protests in 1994 with 2 paisa per unit. This was raised to 4 paisa per unit in July 1998 and notification for Ludhiana was issued in November 1998 but increase applicable from July 1998. For rest of the state notification was issued in January 1999. For some reason PSEB did not implement this and government thought people have accepted and thus encouraged it has further raised it to 7 paisa per unit; just double in three months.
There are large number of units which consume on an average 25 to 30 lakh units of power. At 7 paisa per unit such units have to pay over Rs 2 lakh per month only as octroi adding up to Rs 24 lakh a year. There are units which consume around 1 crore units a month. The amount in these cases comes out to Rs 70 lakh a year. Large number of SSI units consume on an average 50,000 units per month. They have to shell out Rs 50,000 a year only as octroi on power.
The Central Government has levied 10 paisa per unit as power cess. When these two levies are added no comment is needed as to what will happen to industry. The only comment is that persons who have raised octroi on power do not deseve to be decision makers for the public.
Octroi rates on various commodities have been increased by about 3 times in a short span of 9 months. Rates were increased by 50 per cent on 2nd July 1998 and due to protest partially lowered on 10/11 July 98.
All types of yarns which had specific rates ranging from Rs 25 to Rs 45 per quintal shall now attract ad valorum octroi at the rate of 0.75 per cent. This is straightway increase of 5 times. Waste of yarn shall attract 0.5 per cent octroi.
Iron and steel is subject to 1 per cent ad valorum duty from a specific of Rs 4 per quintal which is around 3 to 4 times the previous rate. Octroi on clay bricks has been increased for Rs 1 per 1000 to Rs 10 per 1000. For electronic goods and watches ad valorum rate has been increased from 2 to 3 per cent.
House tax for industry is 15 per cent of the rental value. Rental value which was 0.75 paisa per sq. ft. in 1991 is now Rs 4 per sq. ft. Even a small unit working in 1000 sq. meter shall pay house rent of Rs 40,000 a year. For others with large areas this amount runs into several lakhs of rupees.
If all burdens are added
owners of industry shall become employees with no assured
remuneration and real owner is Municipal Corporation.
Corporations budget is to be approved by the Punjab
Government. In the interest of the State Government
should reject all these hikes with one stroke. Entire
expenditure of Municipal Corporation is being realised
from industry which owners of palatial buildings are not
even paying house tax. How can the economy of the State
run in such a situation.
makes 8000 small units sick
PATIALA, April 10 The hike in sale tax rates of various commodities announced in the state Budget, had resulted in negligible sales in the past nine days and nearly 8000 small scale units had fallen sick, and 80 per cent of oil expeller units have also closed down.
These claims were made here by the Industry and Trade Forum Punjab, Ludhiana Small Scale Manufacturers Association and the Punjab Oil Millers and Traders Association. On a memorandum addressed to Chief Minister Parkash Singh Badal and submitted to Mr Sudhir Mittal, Excise and Taxation Commissioner yesterday.
According to Mr Harish Khanna president of the forum, Sushil Jain President of the millers association the industry has plunged into crisis due to the recent hike in sale tax rates. The ST hike on petrol, motor vehicles, two wheelers, desert coolers, stationery, medicines, bicycles, soaps detergents and spices will give a fillip to inflationary trend.
The memorandum also assailed the sales tax structure as it has introduced a double tax policy in which first a manufacturer is paying sales tax on the product while selling it to the supplier who in turn has to pay sales tax to the government again for supplying it further.
The sales tax on edible oils was more in comparison to the rates in neighbouring state especially Haryana. The memorandum says that while Punjab has a sale tax structure of 6.6 per cent Haryana has only 1 per cent.
The memorandum also threatened to launch an agitation from April 12 if their demands like withdraw of increased rate of sales tax, and of levy on first stage tax in the case of manufacturing units, reduction in hike of road tax were net accepted.
Mr Harish Khanna and Mr
Sushil Jain also said that the industry already passing
through a rough phase due to recession in the country had
been made to pay a price for the populist policies being
practised by SAD-BJP government. They argued that the
sales tax collections from the industries and trades had
gone upto Rs 1300 crore yet the government had burdened
this class with more taxes without providing any
infrastructure and other basic needs required for the
growth of the industry.
BANGALORE, April 10 (PTI) In a bid to refurbish the image of Indian brands abroad, Commerce Minister Ramakrishna Hegde today announced that the brand equity fund would be raised from the present Rs 120 crore to Rs 500 crore.
The Indian brands do not have a brand name abroad now the idea is to build up the brand image, he said while addressing a meeting organised by the Greater Mysore Chamber of Industry here.
Criticising his own government, Mr Hegde said exports were not being given as much importance as they deserve.
Indian has to export or India will perish. That should be our slogan he said, adding, exporters should be treated with respect as they are serving the national interest.
The minister said Indian exporters had not been given a level-play field as compared to their counterparts abroad. The major constraint to exports continued to be inadequate infrastructure. Power tariff in India was much higher than in other countries.
Q: Is there any rebate on Income Tax to the senior citizen for 1998-99 according to Section 88B as in case of 1997-98?
What is the rate of Standard Deduction for F.Y. 98-99, Assessment Year 1999-2000?
What do you mean by one by six criteria?
Satnam Singh, Mohali
Ans: The tax rebate permissible to a senior citizen for the Financial Year 1998-99 relevant to Assessment Year 1999-2000 is exactly the same as was for the previous Financial Year, namely maximum tax rebate being Rs 10,000. The standard deduction for Assessment Year 1999-2000 is @ 331/3rd per cent of the salary subject to a maximum of Rs 25,000 where the salary amount does not exceed Rs 1 lakh. In case the salary amount exceeds Rs 1 lakh the maximum permissible deduction on account of standard deduction gets reduced to Rs 20,000. However, the standard deduction will not be permissible if the salary exceeds Rs 5.00 lakh. The meaning of the terminology 1/6 criteria is that if a person fulfils even one criterion out of six criteria fixed by the Government, he is liable to file his Income-tax return.
Q: I have donated five scholarship of Rs 1000 p.m. each to Indira Gandhi Medical College Shimla. This scholarships amount is to be met out of interest accrued on the fixed deposit amount kept with the bank. Kindly let me know if I could get any rebate of Income-tax on the interest amount for the expenses of Rs 60,000 p.a. incurred on these shcolarships and so under what section of the Income Tax Act.
M.L. Sikka, Shimla
Ans: You are eligible to get deduction in respect of donation given by you to Indira Gandhi Medical College Shimla in the form of scholarship only if the said institute is possessing Exemption Certificate u/s 80G of the Income-Tax Act, 1961. In case no specific exemption certificate is available, in such a situation you will not be able to enjoy any tax concession from your interest income in respect of the payments made by you for the scholarship.
Q: Please let me know if maximum ceiling of gratuity has already been increased to Rs 3.50 lakh from 2.50 lakh by Government of India. If increased please do inform from which date increased gratuity will be paid. Please also inform Income Tax exemption limit/amount for gratuity. I was retired on 31.3.98. If I will be getting benefit of increased limit/ceiling.
G.S. Kanwar, Jalandhar
Ans: The maximum amount of gratuity which is exempted in Income-tax is Rs 2,50,000 for employees who retire after April 1, 1995.
Q: Please let me know what is capital gain and the amount of capital gain which is taxable.
(2) Is the amount of RD (Recurring Deposit) in Post Office taxable? Please tell me if it is taxable, how much amount is taxable. Is the whole maturity amount to be added in total income in Income Tax Return?
(3) Tell me the limit of saving which can be claimed under Section 88 this year.
(4) Please tell me the limit of saving which can be claimed under Section 80L.
(5) Is the interest on saving account taxable or not?
(6) Is the Agricultural income taxable? If yes, please tell me its limit.
Sat Pal Saini, Ambala City
Ans: Capital gains tax is the tax payable on gain by selling a capital asset. For example any profit or gain derived by selling house property, land, jewellery, shares, units of the Mutual Fund would all be treated as capital asset. Any gain received on selling these will be liable to Income-tax. The income earned from the recurring deposit A/c in a post office is liable to be taxed as income. However, the maximum deduction there is permissible is as per Section 80L of the Income-tax Act, 1961 is Rs 12,000 in a Financial Year on the interest earned on recurring deposit A/c and other specified investments. The maximum saving which can be claimed u/s 88 of the Income-tax Act, 1961 is by making total investments in terms of Section 88 amounting to Rs 70,000, tax rebate on which will be @ 20%= to Rs 14,000.
The maximum interest
which is exempted u/s 80L of the Income-tax Act for the
current Financial Year is Rs 12,000 comprising of bank
interest and NSC interest, Mutual Fund Income, etc. plus
an additional amount of Rs 3,000 would be available as
deduction specifically in respect of interest on
Government Securities and income from units, etc. The
interest income from saving bank A/c will be exempted
within the overall limit of exemption of Rs 12,000 u/s
80L. The agricultural income will be aggregated with
non-agricultural income only for rate purposes. If,
however, non-agricultural income is blow the exemption
limit, then there is no question of clubbing of the
agricultural income for rate purposes.
Q: Can the Production Bonus be of a fixed nature, having no nexus with quantity of extra output produced by workmen?
Ans: In Daily Partap v Regional P.F. Commissioner, Punjab etc. (1999-I-LLJ-1) the S.C. viewed thus:
Appellants challenged in these appeals before the S.C., orders of a Single Judge dismissing their writ petitions and of a D.B. of the H.C. of Punjab and Haryana, which summarily dismissed their letters Patent Appeal against the said orders of the Single Judge.
The writ petitions were filed to get relief against the orders of the respondent authorities making the appellants liable for contributions in respect of a Product Bonus Scheme of the appellants.
The SC observed that it becomes clear that in order to become a genuine Production Bonus Scheme so as to get covered by exception (ii) to the definition of basic wages as found in S.2(b) of the Act, it must be shown that the scheme in question seeks to offer production bonus to the workmen concerned who put in extra out put wharein either collectively bonus be fixed to all of them on the basis of total extra output on a sliding scale or may be paid individually to a given number of workmen who by their own efforts earn such bonus.
Thus, in each case, payment of bonus cannot be of a fixed or proven nature having no nexus with the quantity of extra output produced by them. As in the present case, the scheme relied on by the appellants does not fulfil this legal test, it does not attract the exception (ii) to S.2(b), held the SC.
Moreover, the further requirement to become a genuine bonus scheme that the payment by way of bonus to the concerned eligible workmen should very in proportion to the extra output put by him beyond the norms of output prescribed for him, is conspicuously absent in the present scheme.
The SC consequently held
that the decisions rendered by learned Single Judge as
confirmed by the Division Bench of the HC cannot
therefore be found fault with. With the result the SC
dismissed the present appeals.
THERE were many firsts in the recently presented Union Budget. After seven years, for the first time the direct tax rates were increased albeit in the form of a surcharge. After five years, the BSE sensex reacted positively to the Union Budget. Finally, after a long while, no duty was levied on cigarettes. At least for a year thus, cigarette smoking is unlikely to prove more injurious to the pocket.
THE grapevine has it that Pfizer is angling to take over Ranbaxy Laboratories. This is perhaps a sign of things to come in the pharma segment during the first half of the next decade. A pharma industry expert opines that Dr Reddys Labs. alone will survive the MNC onslaught in this segment.
AFTER several disappointing years, the grapevine has it that the Government run HMT is on the verge of a turnaround which is likely to materialise in the forthcoming financial year. Little wonder than that a veteran BSE operator has begun cornering this scrip.
God of advertising with a double life
For a man who has led a double life advertising and theatre for decades, the inspiration still comes from Mahatma Gandhi, the master communicator.
For Alyque Padamsee, who has almost dictated popular tastes for years, sometimes even setting off new trends with path-breaking campaigns like Liril soap, Cherry Blossom shoe polish, Surf and Kamasutra condom, Gandhi was the asli communicator. I am only a naqli one.
The god of Indian advertising also drew his inspiration from Attenborough his director in Gandhi.
It was only from Attenborough I learned that if you want the best out of your men, dont lecture them but motivate them. Attenborough is one of the greatest motivators I have met, he says.
Padamsee, who recently released his autobiography, A Double Life, has produced immortal works like the The killers of Ernest Hemingway, Jesus Christ Superstar, Evita, Tughlaq, Othello and Arthur Millers The Death of a Salesman.
How did A Double Life come about then?
Well, it was David Davidar of Penguin Books (India), who had requested me to write a memoir. That was seven years ago. So I wrote four chapters in two weeks. But then I got bored with it. May be it was the writers block, he says.
Then it was suggested that I carry a pocket taperecorder with me and speak into it. This arrangement suited me fine. Thus, over a period of seven years, finally the book is out, he says.
What she likes
WHY is it that chocolaty stars like Leonardo De Caprio and, back home, Aamir Khan and Salman Khan have a bigger female following than the macho Arnold Schwarznegger or desi hunks like Sunil Shetty and Akshay Kumar?
That women prefer men who look a bit feminine, rather than the rugged-faced ones who exude a macho image, has been proved in a recent research on human beauty.
The study by a British scientist has revealed that a majority of women go for males with a gentle and graceful look to their face rather than those with ultra male faces.A study of 4,000 servicemen revealed that those with the highest testosterone levels were less likely to marry and if they did were more prone to violence on their spouses and more likely to divorce them.
What women looked for in a face could be the gentleness necessary in a parent or a provider, qualities that might diminish with high testosterone levels.
This perhaps explains why men have, over the years, evolved to be more graceful and gentlemanlike, qualities hitherto associated with women.
Fight it out
ATTENTION parents! The next time you have a high-decibel, no-holds-barred fight with one another, gather the kids around to watch. It may be good for them.
Mothers and fathers who do battle in front of their children may inadvertently be making them more creative and imaginative than children raised in more harmonious surroudings, researchers at a Canadian university said.
If your parents disagree a lot, you have to be very good at seeing different perspectives on things. And you have to begin to be good at tolerating ambiguity and tolerating differences, Richard Koestner, the studys author, told Reuters.
NEW DELHI, April 10
(UNI) The RBI will shortly issue new Rs 100 notes
incorporating words Mahatma Gandhi instead of
MK Gandhi. The new notes will also bear the
signature of RBI Governor Bimal Jalan apart from capital
l inset in both numbering panels, a statement
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