|B U S I N E S S||
Sunday, November 14, 1999
|PM revamps trade &
NEW DELHI, Nov 13 Prime Minister Atal Behari Vajpayee today reconstituted his council on trade and industry.
'Corporate tax may grow'
HYDERABAD, Nov 13 The corporate tax in the country was expected to grow to Rs 29,750 crore during the current fiscal year, Andhra Pradesh Governor Dr C. Rangarajan said today.
Interest on govt securities declines
NEW DELHI, Nov 13 RBI Governor Bimal Jalan today said that the last auction did witness a marginal decline in interest rates on govt securities.
Develop IT around
CST obstructs goods free flow
Pak financial strategy on December
NEW DELHI, Nov 13 (PTI) Prime Minister Atal Behari Vajpayee today reconstituted his council on trade and industry.The council includes leading industrialists Ratan Tata, Mukesh Ambani, Sanjeev Goenka, Kumar Mangalam Birla, Nusli Wadia and Rahul Bajaj, says an official release.The first meeting of the reconstituted council will take place in December.
The council was created in August 1998 and had set up six subject groups in specific areas. These subject groups had submitted important recommendations in the areas of food and agro-industries, capital markets, financial sector initiatives, knowledge-based industries, infrastructure service industries and administrative and legal simplifications.
Many of the recommendations on these issues have been implemented by the Government through last years Budget and other policy initiatives were taken by the ministries concerned, says the release.
The Prime Minister believes that close interaction between trade, industry and Government will contribute to the realisation of its developmental objectives and this partnership should be strengthened, says the release.
The Council on Trade and Industry provides an important opportunity for policy dialogue on economic issues between the Prime Minister and the members of the council, it said.
The council has been constituted keeping in view the diverse experience of its members in manufacturing, trade and services and also to give representation to apex organisations.
Other members of the council are N. Srinivasan, N.R. Narayana Murthy, A.C. Muthiah, Rajeev Chandrasekar, and Gouri Prasad Goenka who is the FICCI President designate.
Motors unveils Corsa
NEW DELHI, Nov 13 General Motors (GM) today unveiled Opel Corsa thus adding another car to the highly competitive mid-size segment.
Launched simultaneously in three continents: South America, Africa and Asia, the car is scheduled to roll out in India during Auto Expo 2000 to be held in the capital in January.
GMs Global President and Chief Operating Officer, Mr G. Richard Wagoner told reporters here that the new car would be positioned very competitively along with Maruti Esteem, Fiat Sienna, Ford Ikon and Hyundai Accent. He, however, did not disclose exact price of the car.
Initially, the company would launch three petrol versions of the new car. These versions would be powered with 1400 cc and 1600 cc multi-point-fuel-injection (MPFI) engines which would comply with Euro-II emission norms, he said.
GM India President and Managing Director, Mr R.C. Swando said that Corsa will not come into direct competition with Astra, the other mid-sized version of Opel. While, the Astra belonged the premium category, Corsa would be in the low end class of the segment.
The base model 1.4 gl would have power steering, air-conditioning system, central locking, body coloured bumpers, dual side impact protection bars, safety belts and child safety locks.
Other variants namely 1.4 gls and 1.6 gls would also have power windows and power antenna besides having all the features of the 1.4 gl model.
General Motors is studying the market to launch a diesel version of the new model, Mr Swando said adding that the company is also considering introduction of station wagon and hatchback versions of Corsa, he added.
GM has targeted to achieve about 15 per cent share of the mid-size car market in the first year of operations. Localisation level would be about 50 per cent in the first year of operations, Mr Swando said.
Corsa is the
latest in a series of moves, General Motors has taken to
participate in the growth of the Indian market. The
Indian subcontinent is an area of special focus for
General Motors, Mr Wagoner said.
HYDERABAD, Nov 13 (PTI) The corporate tax in the country was expected to grow to Rs 29,750 crore during the current fiscal year, an increase of Rs 2,700 crore over the previous year, Andhra Pradesh Governor Dr C. Rangarajan said today. Inaugurating the State Level Conference on Corporate Taxation organised by Andhra Pradesh Tax Bar Association here, Dr Rangarajan, who is former RBI Governor, said although the ratio of corporate tax to Gross Domestic Product (GDP) was below 2 per cent, along with the other income taxes it has shown a rising trend.
The tax revenue has grown from Rs 110 crore in 1960-61 to Rs 370 crore in 1970-71 to Rs 1,310 crore in 1980-81, Rs 5,335 crore in 1990-91 to Rs 27,050 crore in 1998-99, he said.
Corporate tax was an
important source of revenue to the Central Government, Dr
Rangarajan said adding ratio of corporation tax to GDP
reached a peak of 1.7 per cent in 1997-98 while that of
the personal income tax went up to 1.6 per cent.
Interest on Government securities declines
NEW DELHI, Nov 13 (PTI) RBI Governor Bimal Jalan today evaded a direct reply on the possibility of a cut in interest rates, and merely said that the last auction did witness a marginal decline in interest rates on government securities.
Asked whether the circumstances were not conducive for a cut in interest rates following reduction in the Credit Reserve Ratio (CRR) that made available over Rs 7000 crore in the system, Jalan said it was for the banks to decide.
Jalan who was talking to reporters after addressing a FICCI meeting here also parried a query on the possibility of a cut in interest rate in the wake of a large portion of Government borrowing commitments for the current fiscal year having already been met.
Stating that he would not like to comment on the issue, Jalan said it was reported in the last auction that the interest on Government securities had registered a marginal decline.
CHANDIGARH, Nov 13 A one-day management development programme on Kaizen The Key to Competitive Success was carried out at ICSSR, Panjab University, here today. Mr Subash Bijlani, Management Consultant and President of Magnus Consultants, directed the programme.
Kaizen is a process of
thinking and developing strategies that assure continuous
improvements in an organisation. Kaizen has been claimed
to be the single most important concept in Japanese
management and key to their competitive success. During
the last few years a number of Indian organisations have
benefited by adopting Kaizen approach.
ISLAMABAD, Nov 13 (PTI) Pakistans Chief Executive Pervez Musharraf today said that a new financial policy to improve the living standards of people would be announced on December 15.
CHANDIGARH, Nov 13 The Greater Punjab Trust for Education Training and Employment in association with the Punjland group will organise a three-day Career and Education Fair 99 at Jalandhar from December 4.
The exposition on career
and education will witness the representation stalls of
various government, semi-government, non-government
organisations, private institutes and companies. The
trust has been established to conduct research in the
field of education, training and employment independently
as well as in partnership with various international,
national and State-level organisations, said Mr Navreet
Singh Hundal, MD, Punjland group. The trust plans to
organise fairs at Karnal, Ludhiana and Chandigarh soon.
E-business is something which happens when you combine the core processes of your organisation with the broad reach of the Internet. Thanks to the Internet revolution in the recent times, the world of information technology (IT) is undergoing big time changes and if you are a dynamic software professional, notwithstanding the basic field of engineering, you are waiting to ride the waves of success. There are over 500 top growing companies of America alone which will give you the wide gamut of platforms by way of systems administration, data administration, lead developer, internet/intranet, client server solutions in e-commerce etc. and the flexibility to leverage individual skills both in India and abroad.
The potential of Indian brains has been well identified overseas with the USAs IT industry employing about 50,000 software professionals from India last year alone.
The IT industry is getting wider by the minute. Most of the Fortune industry conglomerates and knowledge organisations worldwide have chalked out massive IT project and investment with new breed of softwares. Global spending towards embracing e-commerce by business is reported to reach 50 per cent of expected $3300billion IT spending by 2003. Asian companies are also contemplating to increase their IT spending to 7.5 per cent of revenue from 5 per cent currently.
In India, Bangalore has already the distinction of being the IT capital of the country from its traditional name of being the City of gardens. It is also known as the Silicon Valley of India because of the salubrious climate, the talent pool of IT professionals, the education and training infrastructure and cosmopolitan structure of the city.
Today about 300 software exporting units are registered with the Software Technology Park of India (STPI) in Bangalore as compared to only 13 in the year 1991-92, with exports slated to cross Rs 5,000 crore mark this fiscal from a mere 1.5 crore in the year 1991-92 and thus accounting for about 32 per cent, of national IT software with a growth rate of 58 per cent which is the highest for any State.
There can be many more
IT cities where IT business can flourish. Delhi, Punjab,
Haryana and Chandigarh are known to be hubs of research
and technical institutions due to which one can source
skilled manpower easily. A number of strategic and
technological oriented PSUs and a host of other
internationally reputed R & D institutions have
established which can give a huge fillip to the
development, absorption and utilisation of IT sector.
However, this will depend upon the concrete initiatives
to be taken by the Governments of Punjab and Haryana,
taking the cue from Karnataka to build the IT
infrastructure for e-governance in and around Chandigarh.
Mere announcements would not do, failing which the future
of about 8,000 would be engineers of different streams
expected to come out of the various engineering colleges
of Punjab, Haryana and Chandigarh every year would be
jeopardised in the next millennium.
obstructs goods free flow
In view of political and financial crisis four eventful things are happening simultaneously in Punjab. Cabinet expansion is on the cards. Union Finance Minister has called a meeting of all Chief Ministers and State Finance Ministers on November 16 to decide on VAT and sales tax structure. Chairman of eleventh finance commission is visiting Punjab on that day to have views of Punjab on distribution of Central aid to States. States trade and industry is on the war path.Cabinet expansion is a political issue and businesses have nothing to comment. Hint has been dropped that some political aspirants are to be accommodated as Chairman of various Boards. In this connection it is strongly felt that at least PSEB should be spread from this. In past whenever reins of PSEB were handed over to political persons affairs of PSEB turned from worse to worst. PSEB necessarily should remain in the hands of technical or administrative experts as at present.
VAT and sales tax rationalisation have been urgent agenda for quite some time without any concrete results. Unfortunately Maharashtra which adopted VAT in October 1995 has withdrawn from it. Revenue loss is the reason.
The main hitch in running VAT is the CST. NIPFP study of 1994 found system of trade taxes as archaic; irrational and complex; may be the most complex in the world. It interferes with the free play of market forces, causes economic distortions, gives high cost in industry and trade and impedes the free flow of trade in the country.
Central Sales Tax is causing distortions and obstructs from flow of goods. In VAT set-off for CST is not provided on the plea that it has been collected by the exporting States and consuming State can not compensate for it. Without set-off for CST VAT can not work. So attempt should be made to abolish CST. To compensate for the loss on CST Centre should empower States to tax sugar, textiles and tobacco products.
VAT can be introduced by minimising exemptions and adopting four floors rates. CST should be gradually abolished; by reducing rates over an agreed time frame. Four rates can be decided with a ceiling of 10 per cent in the next phase the number of rates can be two and base should be broadened.
Till VAT is introduced States should rationalise the present sales tax rates. Delhi is very big market for all types of goods. Compliance of sales tax regime is very much wanting in Delhi which affects other States. No immediate election is due and strict enforcement can be ensured without any political fall out. If Delhi is corrected Punjab and other adjoining States will benefit immensely. So Punjabs Chief Minister should tackle this issue diplomatically to ensure more revenue in his state.
Distribution of Central assistance is done on the recommendations of Finance Commission. In the past Punjab has suffered heavily. The criterion for the distributions include population, backwardness poverty and distance from the highest per capita state.
Trade and industry is on
war path on the issue of sales tax. Punjab Government has
come out with an astonishing level of tax evasion at Rs.
2000 crore. The reason given is the collusion between
officials and tax payers. Honest tax payers are harmed by
dishonest ones. The Punjab Government suffers in revenue
loss. For both sufferers villain is officialdom. If that
is the case why Government is unable to rein its
officials and instead it wants to punish honest tax
payers. The Punjab Government should start new era in
this regard by having dialogue with the tax payers.
YOU may not be aware of it, but the food that you are consuming could well be contaminated with toxic heavy metals. In fact, food scientists are expressing concern over the presence of heavy metals in various foods.While a report published by the Indian Council of Medical Research in 1993 had revealed the presence of arsenic, cadmium and lead in samples of turmeric, commercial brands of infant formula and canned fruit products. Such contamination has been detected in many other foods, particularly fresh vegetables.
As part of its surveillance on food contaminants in India, the ICMR had tested 249 samples of turmeric collected from rural and urban markets of Assam, Maharashtra, Karnataka and Andhra Pradesh. While 47.8 per cent of the samples showed arsenic, 55.8 per cent tested positive for the presence of cadmium and 95.1 per cent for lead. In six samples, the lead level exceeded the limit prescribed under the Prevention of Food Adulteration Act. Similarly, while arsenic was detected in about 50 per cent of the 198 samples of infant formula analysed, 96 per cent of the samples indicated the presence of lead. Expressing concern over this, the ICMR report had called for immediate measures to identify the sources of contaminants.
More recent studies conducted by the Central Food Technological Research Institute in Mysore, for example, have shown the presence of heavy metals like lead, chromium, arsenic and mercury in green leafy vegetables grown in and around Mysore, Karnataka. This contamination was traced to untreated effluents being released into the sewage water by industries in the area. Farmers used this water to irrigate the fields.
Now Punjab Agricultural University, Ludhiana, has reported similar contamination of vegetables like methi, mustard, mint, potatoes, tomatoes, cauliflower and peas, with heavy metals like mercury, lead, arsenic, chromium and nickel. Here too, the source of contamination is found to be untreated industrial effluent released into the sewage water. A report published in The Tribune quoted experts as saying that heavy metal contamination was also being noticed in foodgrains, though at present, the levels were not alarming.
Similarly, an Ahmedabad-based consumer group, the Consumer Education and Research Centre, during its comparative testing of 43 brands of packed tea, found the presence of lead in quantities varying from 1 parts per million to 9.5 parts per million. This was within the maximum permissible limit of 10 ppm of lead permitted in tea under the Prevention of Food Adulteration Act, but that is no consolation, given the fact that the quantity of lead absorbed by the body increases significantly under fasting conditions and with iron and calcium deficiency. Since tea is consumed on an empty stomach in the morning, this is certainly a cause for concern. Besides, following research findings that blood lead levels once thought to be safe are now found to be harmful, countries the world over are revising maximum permissible lead levels in food.
Continued exposure to lead either through ingestion or inhalation results in its gradual accumulation in the body. Symptoms of lead poisoning include loss of appetite, weakness, anaemia, abdominal cramps, vomiting, weight loss, lethargy, headache, irritability. In severe cases, it can lead to seizures, coma and even death. Heavy metals are in fact highly toxic and are known to cause kidney damage, cardiovascular diseases, dermatitis, sterility, hypertension, growth inhibition, anaemia, neurological and behavioural disorders, irreversible changes in brain and nerve cells. Some of them are also carcinogenic.
To protect the interests of consumers, the Ministries of Consumer Affairs, Health, Agriculture and Environment should come together and constitute a committee of experts and take all necessary steps to tackle the issue now, before it gets out of hand. Firstly there should be a comprehensive survey of different foods to identify the magnitude of the problem, the sources of contamination and the solutions to overcome it. It would be advisable to upgrade the laboratories in different colleges for the purpose of testing of foods. If necessary, the survey could be carried out with the help of students.
Ministries of Environment and Health will have to ensure
stricter implementation of laws. Consumers and consumer
groups in turn will have to join hands with environment
groups for a sustained campaign against industries which
are releasing untreated and toxic effluents. The cost
involved in monitoring food for contaminants, upgrading
of laboratories and all other related work should be
recovered from these industries.
Q: Whether the acts of constructing oven and facility of parking would constitute an act of nuisance and would be a ground for eviction?
Ans: The point was discussed in Barjibai v Harilal by the M.P. High Court (1999 (1) R.C.J. 277) as under:
The expression nuisance has not been defined in the M.P. Rent Control Act. In the opinion of the HC no straight jacket formula can be laid to define nuisance. However, the HC felt that if the tenancy is created for a particular purpose and the acts complained of are inherent in the nature of tenancy, it cannot be said that both inherent acts and activities shall come within the expression nuisance.
As stated earlier, the HC noted that there is no controversy that the defendants are carrying on the hotel business since 40 to 45 years before the institution of the suit on 27.7.76. It has been further established on fact that the plaintiffs son who is having his office in the adjoining accommodation has joined the profession of law in the year 1978.
In the opinion of the HC emission of smoke from oven is inherent and the use of oven is essential for running the hotel business. The HC further held that in the present case, it is not the case of the plaintiff that the defendants customers park their vehicles at the provocation or instance of the defendant. Accordingly, the HC took the view that the aforesaid Act cannot be said to be nuisance within the meaning of S. 2 (1) (c) of the Act. So far as throwing of the used leaf plates by the customers of the defendant, there is no evidence that it is being done at the instance of the defendants. With the result, the HC took the view that this act of the customers of the defendant over which defendant has no control cannot be said an act of nuisance.
Q: I am a Bank Officer drawing annual salary of about Rs 2 lakh. My son is studying in Govt. Engineering College and staying in the college hostel. I have raised a loan of Rs 75,000/- from my employer repayable in 5 years (Principal plus interest) @ commercial rate of interest say 15 per cent to meet the cost of studies of my son spread over 4 years. All necessary documentary proofs were provided to the employer in this regard. I request you to please clarify the view:-
a) Am I correctly eligible for claiming rebate upto Rs 25,000 on actual basis being the principal amount and interest repaid during the financial year 1998-99 under Section 80-E of the Income Tax Act.
b) Whether the employer viz. my bank can allow the benefit of above rebate i.e. by deducting the amount on actual basis as per para (a) from my taxable income or I will have to seek refund for the same.
I.S. Wadhwa, Patiala
Ans: Vide circular No 684 dated 16th June 94 issued by the Central Board of Direct Taxes, the deduction for repayment of the loan, etc. is not allowable to the parents/guardians of the assessee but this deduction u/s 80E is permissible only to the student himself when he starts repaying the loan amount.
Q: I am retired hand and owner of a house. My wife who is in service and living with me. Can pay house rent to me in order to get income-tax benefit.
2. If a daughter can pay gift upto Rs 30,000 to his father?
Madan Lal, Delhi
Ans: Yes, your wife can make payment of rent to you and she can claim deduction for such rent from the amount of house rent allowance received by her from the employer. Thus, there would be Income-tax benefit to your wife. However, please to remember that in respect of rental income received by you from your wife, you are required to file Income Tax return because of your fulfilling the economic criteria. If a daughter makes a gift of Rs 30,000 to her father, there is no liability to payment of Gift tax, etc. However, please remember that after 1.10.98 any amount can be paid by the daughter to the father in respect of the gift.
Q: Whether interest earned on PF accumulation with recognised Provident Fund, Trust is still exempt after retirement by the employee? (In case employee opt not to withdraw PF accumulation after retirement).
An employee was entitled to get earned leave of 45 days a year during his employment. Leave accumulated over 90 days was got encashed and taxed every year during the employment, but on retirement he got payment for 97 days of accumulated leave. Please advise whether the employee is entitled for full exemption u/s 10 (10AA) or partly in the proportion of 30:45 days or nil exemption.
An employee covered under payment of Gratuity Act, gets an amount of Rs 8.5 lakh as gratuity upon retirement after 35 years of service in the month of August, 1998. Please advise, how much amount will be exempted u/s 10 (10) of Income-tax Act.
S.C. Jolly, Yamunanagar
The interest earned on PF accumulation with recognised
Provident Fund Trust would still be exempt even after
retirement. However, please ensure that the said
recognised provident fund accepts your proposal to retain
the money lying in the RPF A/c. In respect of the Earned
Leave by retiring employee as per Section 10 (10AA), the
amount received on retirement by an employee is exempted
upto the maximum extent of Earned Leave of 30 days for
every year of actual service rendered by him as an
employee to the employer from whose service he has
retired. Thus, if the leave is received for 97 days which
might comprise a period of 3 or 4 years, then the same
would be exempted based on the above provisions of the
law, namely not to exceed 30 days for every year of
actual service. The maximum amount exempted in respect of
the gratuity amount now is Rs 3,50,000.
WHILE the share prices of the erstwhile Big Bulls favourites like BPL and Videocon seem down and out for the count at the moment with no takers, the new Bull is apparently eyeing the counter of Voltas. Watch its share price!
Setting very high standards can prove counter-productive as Hindustan Lever found out as the markets were not terribly enthused by its results for the last quarter notwithstanding its being fairly good. While many operators unwound their positions at this counter following FII selling, a veteran BSE broker has commenced accumulation. Whats cooking?
The grapevine has it that considering the number of times this companys shares are in No-delivery during the course of a financial year, it might be more prudent for it to announce when it is not the No-delivery mode.
Regularly mopping up
funds from the market with its Safety Bond Issues, ICICI
is obviously flush with funds. And what does it propose
to do with these funds? Hopefully, not bail out the Essar
group as the grapevine seems to suggest!
Gold Std. Rs 4550
Gold 22-Ct Rs 4400
Silver Ready Rs 7750
Silver delivery Rs 7765
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