|B U S I N E S S||
Sunday, December 26, 1999
A fresh dose of action in pharma
Career fair ends
Safeguard consumer interests:
Central Bank Y2K okay
NEW DELHI, Dec 25 (PTI) The Government will provide Rs 200 crore to the sugar industry for upgradation of mills from the Sugar Development Fund (SDF) in the current fiscal, Public Distribution and Consumer Affairs Minister Shanta Kumar said today.
Out of the total SDF of Rs 820 crore, the Government will provide Rs 200 crore this year for modernisation of the sugar mills, Kumar told reporters on the sidelines of the 40th annual general meeting of National Federation of Cooperative Sugar Factories Ltd (NFCSF).
The remaining Rs 620 crore will be disbursed next year.
Inaugurating the NFCSFs meeting, Kumar said in order to compete in the globalisation era, Indian sugar mills need to be upgraded. The Government is committed to provide financial assistance to them from the SDF.
On Mahajan Committee report on decontrolling of the sugar industry, he said, discussions are on. But the Government will take a final decision only after considering the interest of farmers, industry and the nation as a whole.
There are too many controls which have chained down the industry. The Government would like to unshackle it, he said.
Referring to the expected higher sugar production in the country, Kumar said the Government is seriously considering exports of surplus sugar.
On Governments stance on Public Distribution System (PDS), Kumar said we will soon come out with stringent measures to stop diversion of the food items.
Of the Rs 10,000 crore food subsidy provided by the Government, 35 per cent is diverted, the Minister noted.
PDS will be restructured and a target would be set to achieve, Kumar said.
gets 2 awards
NEW DELHI, Dec 25 Two Cooperative sugar mills of Punjab today bagged efficiency award from National Federation of Cooperative Sugar Factories Limited.
These awards were given by the Union Minister for Consumer Affairs and Public Distribution, Mr Shanta Kumar at a function here.
According to Mr Jagjit Puri, Managing Director of Punjab State Federation of Cooperative Sugar Mills Ltd, the two mills which bagged the efficiency awards were located at Budhewal in Ludhiana district and Nawanshahr.
Both these mills have been consistently winning awards for the last nine years and have created a record in their own way, he said.
These awards were instituted by National Federation of Cooperative Sugar Factories Ltd, which is the apex organisation of all sugar factories in India, at its silver jubilee celebrations in 1985 in order to imbibe a spirit of healthy competition amongst cooperative sugar factories for improvement of their technical efficiency.
These awards have been given for achieving lowest cost of production and sufficient financial reservoirs to meet all contingent liabilities and working capital. Both mills have shown excellence in optimum capacity utilisation since the installation of the mills.
A fresh dose of action in pharma industry
NEW DELHI, Dec 25 (PTI) Along with the IT scrips, it were the pharma companies that acted as one of the pillars of strength in the Indian stock market as the pharma stocks became hot favourites at the bourses and industry and the government both turned their focus on research to meet the challenges in the next century.
The year witnessed a major breakthrough on the R and D front as Ranbaxy Laboratories clinched a mega deal worth $ 65 million with Bayer AG of Germany, selling worldwide marketing rights for its new drug delivery system for the antibiotic Ciprofloxacin to the German major.
Pharma sector followed the general industry trend of restructuring and consolidation even as the takeover of American Remedies by the Hyderabad based Dr Reddys Lab stole the limelight.
The company, however, suffered a setback in Russia where it lost a court battle against Pfizer Inc and Glaxo Wellcome Pic alleging patent infringement for two products namely Ondansetron and Amlopidine, selling them under a new name.
Pfizer Inc won its battle in India too, where its chambers and shareholders of its existing subsidiary crying foul. After being initially turned down by the FIPB, the proposal was later cleared by the industry ministry.
The long pending demand of the industry asking for dismantling of the drug price control order wasnt heeded by the Government which spelled out research and availability of medicine to the common man, as recommended by the panel set up to look into the sector, as the key focus areas.
The Government decided to exclude pharma and agro products from the list of patentible items in its proposed amendment to the Patents Act, 1970, reversing its earlier plan of going the whole hog with the amendments to meet the WTO and TRIPS commitments thereby baffling the multinational companies who will now have to wait till 2003 to patent their products when it becomes mandatory for India to make the required amendments.
Nicolas Piramal, which had been on takeover spree in the last two years, also followed suit to consolidate and improve its market share.
Domestic companies namely Wockhardt, Dr Reddys, Nicholas Piramal, Zydus Cadila and Alkem Lab improved their market share significantly. Wockhardts acquisition of Merind Lab helped it to improve its market share significantly.
opens retail outlets in region
CHANDIGARH, Dec 25 The Swatch Group Ltd, based in Biel (Switzerland) has set up three retail outlets in Chandigarh, one in Ludhiana and is opening another one in Amritsar on Monday.
The Switzerland watch making company is offering all its major brands Omega, Tissot, Calvin Klin and Swatch models in this region. The watch prices vary from Rs 3,200 to 25,000, although the company also plans to offer lower-end models costing as low as Rs 1,300.
JALANDHAR, Dec 25 A three-day Career and Education Fair 99 organised by the Greater Punjab Trust for Education, Training and Employment concluded here today.
Mr Navreet Singh Hundal, Managing Director, Punjland Group (Canada immigration consultants) sponsored the event. The exposition on career and education endeavoured to provide platform to an individual where one could explore the various career options available in todays fast changing world.
Alliance held a seminar on Canada as a prospective
country both on the educational and professional front.
The careers that draw a lot of attention were management,
tourism, marketing research, mass communication,
electronics, hotel managements, and bachelors of
agriculture. Mr Hundal also inaugurated an office of
Greater Punjab Trust here.
stand on ST issue harsh
EVENTFUL things are happening in the arena of business. The Punjab Government is inclined to stay the operation of new Municipal Act in the present form and to make amendments in consultation with industry and trade. The Central Government has made the State Government agree for a uniform sales tax pattern. Punjab Government has waged a sort of battle with business community. It has withdrawn the incentives under industrial policy. Bank employees unions have started a wordy dual with CII in particular and big borrowers in general. To delink SIDBI from IDBI Bill has been moved in Lok Sabha.
A deputation of Apex Chamber of Commerce and Industry (Punjab) was assured by Mr N.K. Arora, Secretary, Local Bodies to enforce the new Municipal Act only after a dialogue with the industry for which seminar has been arranged.
The state governments have agreed for a uniform sales tax pattern from Ist January 2000. It has been widely acclaimed by the business community. Crucial issue of CST has been left for future discussion. Broadly four slabs of sales tax have been carved out; zero for necessary goods; 4 per cent essential goods; 8 per cent for general goods and 12 per cent for luxury goods; 20 per cent for liquor. Gold will enjoy a special low rate of 1 per cent. State Governments can subsequently shift products between these categories. Patterns of sales tax differ widely in states.
Unanimity of the decision is disturbed at the very start. As per decision no new sales tax incentive shall be announced after Ist January 2000. Any unit registered upto 31st December 1999 will be eligible for existing sales tax benefits. All such units shall commence production within two years. On the face of this decision Punjab Government has already withdrawn sales tax incentives to the eligible units. This is contraction of the unanimous decision.
The Punjab Government has waged a sort of battle with business community in the matter of sales tax. The Governments decision to have computers at the barriers has been applauded but with caution. Once the goods have been checked at such barriers there should not be any further checking. It has been seen that this is happening and some vehicles might have been impounded. This is certainly not fair.
Focal Point, Ludhiana saw a very disturbing scene this week. Squads of sales tax; transport and police traffic departments with heavy contingent of police waged a sort of battle on this hub of industry. On enquiry it was told that this special arrangement has been made to watch coal movements. Actually all sorts of goods carriers were checked and some impounded.
After the goods carrier has been thoroughly checked at the barrier and recorded in computer it is again detained at some other point. Even after checking the accounts books of the consignee similar documents of the consignor who is in other state are asked for. It is illegal, ridiculous and unfortunate why a dealer of Mumbai, say, produce document before Punjabs official? This process otherwise may take days and goods shall remain impounded during this period. Who can run business in Punjab under these un business like conditions.
The so called fool proof
arrangement at the barriers is getting punctured and with
time may even burst. Why? Because it is one sided
operation. Evasion gives incentives to the corrupt
official elements whose number is beyond unmanageable
level. To make the arrangement durable some action on the
corrupt officials is also necessary.
consumer interests: Shanta
NEW DELHI, Dec 25 Union Consumer Affairs and Public Distribution Minister, Mr Shanta Kumar has directed all the State Governments to issue necessary guidelines with regard to the illegal and unethical trade practice followed by traders and shopkeepers in the country while issuing cash memos and bills with unilateral condition of goods once sold with not be taken back or exchanged.
Mr Shanta Kumar said that under Consumers Protection Act, aggrieved consumers has a right to get relief against the defective goods, deficiency in services, overprice charged and unfair and restrictive trade practice followed by the traders, manufacturers and service providers. Besides this, consumers can approach consumers courts which have been empowered to order repair or replace the defective goods or return the money to the aggrieved consumers.
The minister has taken various effective steps to safeguard the overall interest of consumers. In another move, Union Ministry of Consumers Affairs and Public Distribution has finalised a proposal to make ISI mark mandatory for mineral water production.
Preliminary gazette notification regarding the mandatory certification has been issued by the Union Health Ministry to ensure that no person should manufacture, sell or exhibit for sale the mineral water without Bureau of Indian Standard Certification mark necessary amendments has been carried out in the Prevention of Food Adulteration Act.
The notification ensure
guidelines for description, type and process for
treatment and handling of natural mineral water. In order
to eliminate the risk of pollution and contamination,
hygienic requirements and standard of characteristics to
be used in the production of mineral water has also been
Bank Y2K okay
CHANDIGARH, Dec 25 All the computerised branches of the Central Bank of India, Chandigarh zone have been certified as Y2K compliant by authorised agency as per RBI/IBA guidelines said Mr R.P. Sharma, zonal manager of the bank here today.
With a view to meet any unexpected risk arising out of mal/non-functioning due to any reasons, a contingency plan has been formulated to meet any unexpected risk.
The bank has total
deposits and advances at the end of September 1999
increased to Rs. 33089 crore and Rs 14095 crore
respectively. The bank has recorded operating profit
(excluding provisions) of Rs. 151 crore during the half
year ended September 1999.
IT will be a long time before anyone can step on to an escalator without shuddering at the thought of a young girls head being crushed between the moving combplates of the escalator at Indira Gandhi international airport in New Delhi. At the time of writing, investigations by various agencies on how the footplate of the escalator came apart, leaving a gaping hole into which the young girl fell to her death, are still incomplete. But the tragic death has highlighted once again that callous indifference to public safety can claim lives.
Two years ago in these columns, I had discussed in detail, escalator-related accidents in the USA and the need for maintaining exacting standards in the fabrication, installation, servicing and maintenance of escalators, besides displaying prominently the location of emergency shut off switches so that a user or a passer-by can switch off the escalator in an emergency. Today in the wake of the unfortunate accident of December 13, I feel compelled to come back to the subject.
To discuss escalator-related accidents, one has to draw heavily on the experience of the USA where an estimated 33,000 escalators are in operation and as many as 7,300 accidents, requiring hospital emergency room treatment are reported annually. About 70 per cent of the accidents there are caused by falls from escalators, while entrapments account for another 20 per cent. Three kinds of entrapments can occur while using an escalator: (a) what is known as side of step entrapment that occurs at the interface between the step and the skirt panel, (b) combplate entrapment at the interface between the step and the comb and the (c) handrail entrapment. Obviously injuries caused on account of entrapments are far more serious, many times requiring major surgery to stitch up a severed finger or foot or even hand. Most of the victims are children.
There have also been a number of cases of escalators suddenly reversing direction, sending dozens of commuters tumbling backwards over metal steps. In one such accident in Baltimore in 1994, for example, 28 persons were hospitalised for treatment of injuries received from the fall. In another similar accident in Boston in 1996, 22 were injured when the escalator began jerking backwards.
Experts in the business admit that it is certainly possible to prevent accidents involving escalators. However, for that to happen, manufacturers should incorporate designs that minimise entrapments and provide certain essential safety devices. Besides reducing the gap between the skirt and the step, for example, the escalators should be provided with safety devices that sense the presence of a foreign object and automatically shut off the machine. It is equally important to regularly monitor, assess and identify worn out, damaged or defective components and repair or replace them without fail. Even improperly aligned or poorly fixed components could pose a threat to the safety of escalator riders. It is equally important for manufacturers to educate users on the safety precautions that need to be taken while riding escalators.
Since escalators are relatively new in India, we have the benefit of learning from the mistakes of those who have been using them for decades. So first and foremost we must formulate mandatory quality and safety standards for all escalators in the country. This should include standards for maintenance too and they should be strictly enforced. Every escalator in the country should carry a sticker indicating the date of servicing and the next due date for the same. escalators which fail to meet the mandatory safety standards should be shut down till they are certified as safe. I emphasise the need for mandatory standards because in a country like the USA, fear of lawsuits and the huge amounts that the courts award as damages to victims of such accidents force manufacturers to think of ways and means of preventing accidents. In comparison, the compensation awarded by our courts can hardly be a deterrent. Secondly, we are not safety conscious and this could certainly increase the threat of accidents. Thirdly the clothes that we wear-sarees, dhotis, salwar kameez chunni, shawl, lehanga increase the risk of entrapment.
It should also become
mandatory for every escalator to indicate prominently,
the location of the emergency shut off switches. Such
switches should be at the top and bottom of each
escalator. It is also important to properly illuminate
the first few steps of escalators because in the USA, it
was found that the elderly often could not clearly see
the first step and as a result, fell while stepping on to
an escalator. Closed circuit television screens located
at strategic positions near the escalators in railway
stations, airports, convention centres and shopping malls
should warn users about the possibility of shoe laces and
loose garments getting caught in the moving escalators.
Users should also be advised to always hold
childrens hand while on the escalator and keep them
away from the sides and edges.
After IT, media software boom ahead
WITH the millennium countdown having begun, there are times when one lapses into nostalgia about the several things that one did and those that one did not. On the stockmarket front, the smartest thing I did, (unwittingly I must confess) was to sell stocks in September, 1994 to procure an office and a flat. Much as we Indians have this tendency to get married to the stocks we hold, my training as a Chartered Accountant gave me the ability to discern between a fixed asset and a current asset.
My major regret, if it can be so called (as I prefer not to regret anything that I actually did) revolves around my initial scepticism of the software boom when it first began happening. Of course, I soon jumped onto the bandwagon, but still preferred to limit my exposure only to high quality IT stocks. In fact, a fairly controversial and extremely difficult decision I recently took was to advise a switchover of 25 per cent of our clients holdings in Infy to Hughes Software, which to my mind is the likeliest of the listed scrips to replicate Infys success story in the years to come.
A major development this year was the revival of the primary market which looked down and out for the count less than six months ago. Today, the IPO madness is back and with finance companies and banks bending backwards to provide financing (at cut-throat rates, of course) it is more a question to how many times an issue will be oversubscribed than anything else. Furthermore, listings too have been sensational and for those who have not yet joined the IPO party the message is ..... thats where the big bucks lie today. Doubting Thomases need look no further than the offer price and prevalent prices of recent IPOs like Polaris Software Labs, Hughes Software and Kale Consultants. While the first two are definitely pedigreed stocks. I have my own doubts about the valuation of the third. But as long as the party is on, everyone seems too intoxicated to even consider thinking on lines that even resemble rationality. So be it, but remember, those who forget history are condemned to repeat its mistakes.
At the bourses, it is always the future that matters the most and in this context let us crystal-gaze. As always, the picture remains hazy but the rumblings are already there. In my opinion, the likeliest successor to the runaway information technology boom is the media software sector.
Given the sheer size of viewership in a country like India, it is only a matter of time before media software companies start synergising their core activities with related domains and challenge the status of the information technology segment as the undisputed numero uno segment at the bourses.
The real clincher comes
when one realises that there are a fair number of media
software companies that command natural synergies to
launch a comprehensive business news or information web
portal which could act as vehicle for exponential growth.
So then, keep an eye out for media software stocks in Y2K
and with some luck, you could be planning a premature
retirement. Of course, one must sell in time too as the
ability to do that is what really what separates the men
from the boys at the bourses.
Q: Does it show in this case that the two co-owners do not want the tenant to be evicted?
Ans: The Andhra Pradesh HC in P.Kanti v Boddu Pailanna (1999 (2) R.C.J. 867) opined thus:
The petitioner contends that a co-owner cannot succeed without impleading the other co-owners. On facts there does not appeal to any dispute regarding the settlement reached between the landlord on the one hand and his wife and adopted son on the other. Documentary evidence has been permitted to be adduced before the appellate authority in proof of the said compromise.
It is noteworthy, observed the HC that the Division Bench held that one of the joint owners can ask for eviction of a tenant who has been let in by both the owners notwithstanding that the other co-owner are not willing to join the plaintiff or the petitioner in asking for eviction and on the other hand do not want the tenant to be evicted. In such a situation the Division Bench held that it is necessary to implead all the co-owners.
In the instant case, however, the other co-owners were not in the picture on the date of the eviction petition. Subsequently some disputes arose and a suit came to be filed and a compromise was effected. In that compromise the landlord got 10 per cent of the undivided share while the remaining co-owners got 90 per cent. A preliminary decree was passed.
There is no material to show that these two co-owners do not want the tenant to be evicted. In other words there does not appear to be any clash of interest among co-owners.
In Smt. Kanta Goel v B.P. Pathak ( A.I.R. 1977 SC 1599) the SC held that the consent of the other co-owners can be implicit. In the opinion of the HC in the instant case, the consent of the wife and adopted son can be said to be implicit as there does not appear to be any clash of interest among them. Viewing from this angle, the HC held that the eviction petition is maintainable by one co-owner.
Q: I constructed one house way back in sixties. Sometimes a small portion of it was given on rent and the income included in the return. Otherwise this house has been used for my personal residence only.
Another small house (a portion of a one kanal house) was inherited by me from my father. (I am one of the four persons in whose name this house was transferred after the death of our father). This house is used for my personal residence whenever I go to my native city and is never given on rent.
Are there any tax liabilities.
R.L. Gupta, Chandigarh
Ans: On the facts stated by you it appears that you are actually having two residential houses for your use. Under the Income Tax Law it is just one residential house which is self-occupied the income of which is not liable to Income Tax. However, in respect of second residential house owned by you, lying vacant and used by you for your residential purposes even then for the purposes of section 24 Deemed income would be taxed. It would be based on the market rental income from the property. Thus you would be liable to pay Income Tax on the second residential house owned by you based on the presumption as it the same has been rented out.
Q: Please clarify if the following fall under Mutual Fund income or company Dividend as dividend income is totally exempted now. Mastershare, Mastergain, MIS (all), US-64, Magnum Multiplies Plus 93.
P.L. Garg, Bathinda
Ans: Please remember that from April, 1999 the income received in respect of all the units of the Unit Trust of India under the Unit Trust of India Act is completely exempt from Income Tax without any limit. similarly, income received in respect of any units or the Mutual Fund specified would be fully exempt. Thus all the incomes mentioned by you would now be fully exempt from Income Tax for the Financial Year 1999-2000.
Q: I am a State Government pensioner. I was retired in 1993 and now I had got job in some private firm last year.
Let me know whether the whole amount paid by firm as retention money monthly basis @ Rs 6000 in the Financial Year is taxable and required to be added to total pension received in the Financial Year.
I have no savings for tax rebates. Kindly guide what total amount is exempted without any savings under any head for which reliefs mentioned in Income Tax Rules/Act.
Whether only Rs 50,000 is the only exemption for pensioners. Kindly reply soon, whether as I have to file a return. If my total gross Income is Rs 1,20,000 and also to apply for Permanent Account Number.
- Raizeeh, Shimla
Ans: The retention money received by you from the firm will be liable to Income Tax as salary income. It will be added with your pension amount. You will be eligible to claim standard deduction @ 33.3 per cent of the salary and pension amount taken together in case salary as well as pension does not exceed Rs 1 lakh. If, however, the salary and pension amount exceeds the sum of Rs 1 lakh then standard deduction will get reduced to Rs 20,000 only. On the facts stated by you, you must file your Income Tax return and apply for Permanent Account Number.
Q: I have known from your ibid column that 1/5th of rent/net annual value of a house property is allowed as deduction for repairs and collection charged, without giving proof/details of actual expenditure (which may be more or less than such 1/5th amount). My query is is this deduction also allowed in case of open plinths (which consists of boundary wall + office/chowkidar hut + verandah + pucka platform with paved roads/approaches as per specifications of Ware housing Corp.). Keeping in view definition of house property as per Sec-22. If yes, please quote relevant section/rule/reference case to help me satisfy the assessing officer.
2. Kindly confirm if the depreciation & 10 per cent of cost of construction of plinth is also allowed along with repair charge @ 20 per cent of rent as mentioned above (as is allowed by ITAT, Amritsar on 6-2-1996 ref 1996 (1) IT reports 590 with ITA No 926.927, 940 and 941 (ASR) of 1994).
G.K. Garg, Sangrur
The standard deduction now permissible while computing
Income from House Property is 25 per cent and not 20 per
cent. This deduction is permissible in respect of rental
income. Such rental income may even include the rent for
boundary walls, office/chowkidar hut, veranda etc. etc.
The depreciation is not permissible when you claim
standard deduction for repairs while computing your
Income from House Property. The judgement of Tribunal
cited by you may be on some other points. you may send us
a copy of the Tribunal judgement for further looking into
A Pune based Soothsayer whos clientele include the high and mighty from the corporate and broking fraternity in Mumbai, Indias business capital, predicts salad days ahead for the Indian economy and that the BSE sensex will comfortably cross the 6000 points mark by next Diwali. seems there are lots of fireworks ahead?
Correctly or otherwise, a veteran BSE broker who is known to have a knack of identifying potential takeover targets, is now concentrating on accumulating the shares of Mysore Cement wonder way?
This television saga continues unabated at the bourses. Now, running infy close for top honours at the Indian bourses, this mega-media corporation which has cornered the world rights of the most popular international beauty paegent is expected to continue to churn out healthier bottomlines. Perhaps thats what keeps the FIIs interested.
The tabling of the
Patents Bill combined with its image of being a high
quality Made in India pharma player, has made
this company much sought after at the bourses these days.
With a stock-split in the offing, one can expect some
healthy developments at its counter in the coming months.
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