|Monday, February 14, 2000,
Keep MNCs &
NRIs off agriculture
Petrol vs diesel vehicles
Listen to e-mail on your cell
Why not allow banks to buy
Water-powered car from BMW
Punjab ST rates procedure flawed
Pie in face, Camdessus defends IMF
BANGKOK, Feb 13 (AP) The outgoing IMF chief, Michel Camdessus, used his last official speech today to counter claims his organisation has ignored concerns of ordinary people.
Camdessus (66), retiring after heading the IMF since 1987, spoke at the UN Conference on Trade and Development shortly after an American anti-free trade activist threw a pie in his face in protest against the IMF.
Camdessus spoke without mentioning the attack but was passionate in his defence of the Funds goal of stabilising the global financial system as a prerequisite for reducing inequality in wealth.
Macro-economic stability is clearly necessary for growth and hence poverty alleviation,* Camdessus told delegates from some 190 countries gathered for the eight-day meeting. UNCTAD aims to use trade to promote development in poor countries.
Foreign investment in the Third World has enormous potential to reduce gaps in wealth through growth, he said. While an expansion of it has given poor nations access to knowledge that was once the preserve of the rich.
Anti-globalisation protesters demanding fair trade not free trade scuffled with the riot police today after breaking through a security cordon.
About 300 protesters rushed down an approach road to the Queen Sirikit conference centre, forcing the police to hurriedly close the gates of the venue.
Scuffles broke out, but the police quickly calmed the protest and demonstrators resorted to chanting slogans critical of the IMFs policies in Thailand after it plunged into crisis in 1997.
Organisers had earlier
claimed 800 people were in the protest. The demonstration
was organised by the Labour Coordinating Centre, a Thai
NGO and included labour activists, farmers who have been
forced off their land, students and the urban unemployed.
Keep MNCs & NRIs off agriculture
MUMBAI, Feb 13 (PTI) Multinationals, including NRIs, should not be allowed to invest in agriculture to protect rights of Indian farmers and indigenous plant varieties, speakers at a meeting of the Joint Parliamentary Committee (JPC) said here today.The experts participating in the JPC meeting on Plant Protection and Farmers Rights Bill 1999, chaired by Saheb Singh Verma, stressed that at no point of time, MNCs should be allowed to participate in handling seeds.
The Bill has to be passed in the coming session of Parliament for which the JPC was seeking suggestions to incorporate in the draft Bill from various States.
Explaining the objectives of the Bill, Verma said that it would stimulate investments in research and development of new plant varieties and ensure availability of high quality seeds and planting materials to Indian farmers.
The legislation would also recognise the role of farmers as cultivators and conservators, and the contribution of traditional rural communities to the countrys agro-biodiversity, by rewarding them through a benefit sharing arrangement, he said.
Verma mentioned that a separate Authority would be established for implementation of the proposed legislation.
which will have offices in the various regions of the
country, will be mandated to promote and develop new
varieties of plants and protect rights of the farmers and
bidders, to register new varieties and to ensure that
protected seeds are available to farmers, he said.
NEW DELHI, Feb 13 (PTI) Maruti Udyog Ltd (MUL) has contested its competitor Tata Engineering by saying that exhaust emissions from petrol vehicles have far less ill effects on health than emissions from diesel vehicles.In an affidavit before the Supreme Court, which has taken stringent measures to control alarming level of pollution in the Capital, MUL said in their over enthusiasm and desperation, some vehicle manufacturers have started a debate fuelling comparisons between petrol and diesel vehicles.
Tata Engineering had submitted before the court that its small car Indica was far superior to MULs small car in terms of emission level and had charged the countrys biggest car manufacturer with not adhering to pollution norms.
In the affidavit filed through advocates M.R. Ramesh Babu and Sanjib Sen, MUL said it was technically untenable to say, as some vehicle manufacturers have endeavoured to project that diesel vehicles were superior to petrol vehicles.
This is borne out by the fact that in all advanced countries, including Europe and the USA, petrol vehicles for non-commercial private use constitute over 85 per cent of the total number of such vehicles, MUL said.
The Supreme Court had banned registration of new cars in the National Capital Region (NCR) if they did not conform to Euro-II emission norms from April 1, 2000.
MUL said particulate emissions, one of the main causes of lung cancer, were negligible for such four-stroke petrol vehicles fitted with catalytic converters, and added such petrol vehicles hardly contribute to harmful benzene and carbon monoxide emissions.
Benzene emissions to the extent of 88 per cent are reduced by catalytic converters fitted in Euro-I and Euro-II petrol vehicles, it said.
However, the tightening of emission norms for new vehicles alone would not have a significant effect on pollution reduction as the root cause of the problem was the in-use vehicles.
To reduce emissions from in-use petrol vehicles, fitment of catalytic converters in pre-1995 vehicles may be made mandatory and vehicles of pre-1991 vintage may be phased out gradually, MUL suggested to the court.
Drawing the courts
attention to the substantial amount of pollution caused
by the heavy goods vehicles which pass through the
Capital everyday, the company said construction of
by-pass corridor as suggested by the Environment
Pollution Control Authority will help in reducing
pollution to a great extent.
Listen to e-mail on your cell phone
DRESDEN, (Germany), Feb 13 (DPA) With the help of new developments in wireless technology, cell phone users can now have their e-mail read out loud to them. The sender, title and contents of e-mail messages originally typed are converted electronically to speech and played back upon request, says Prof Ruediger Hoffman of the Institute for Acoustics and Language Communication at the Technical University of Dresden.
The speech synthesis
programme dress is at the heart of the new system. It is
supplemented by a control device supplied by Globana
Teleport. The text-to-speech product can process messages
in many languages, including English, German, Italian,
Czech, Russian and Chinese. A French version is in
development. The service is scheduled to be presented at
the forthcoming cebit computer trade show at Hanover,
Germany from February 24 to March 1.
allow banks to buy branches?
RBI has prepared a blueprint for detecting and dealing with impending bank failure. It has decided to propose mandatory provisions for the liquidation or merger of banks as and when they reach the point of no return.
The merger of the banks on business considerations is always welcome as it is happening worldwide but to thrust upon such ideas on the banks would be unprofessional and defeat the very purpose of reforms. The banks should be left free to take such decisions.
Instead of going in for mergers & acquisitions, banks should, to start with, think of buying branches. It sounds crazy at the moment but it has lot of advantages. In certain small towns, say with a population of around 10,000 to 15,000, three to four banks are operating which make their operations less remunerative. During the seventies and eighties, most of the commercial banks opened branches in remote areas, where they did not have much presence. Such branches were opened either under government pressure of just to join the mad race of expansion. Some of these branches were opened without conducting proper viability studies and the banks are now finding it difficult to continue holding such branches and are in a catch-22 situation. Control of such branches is with the administrative offices located 400 to 500 km away. The distance also makes it a costly affair.
In such a scenario, if a bank sells the business (minus staff) of some of the branches to another bank whose presence is substantial in that area, both banks would benefit. The selling bank by concentrating on other centres can increase the remunerative business. In addition, it would also get some payment on account of goodwill i.e. compensation for business mobilised over the years, which will have a positive effect on the capital adequacy ratio. The buying bank would strengthen its position in that area and would increase its market share.
For determining the purchase consideration, the deposits can be valued at the face value and the advances as per the assets classification norms. The standard assets can be taken at the face value and the substandard/doubtful at the discounted price, say outstandings minus provision. A reputed chartered accountancy firm duly approved by both banks or RBI can hired to assess the health of the advances.
The selling bank can
offer VRS to its employees and who do not accept may be
deployed elsewhere. The idea of selling and buying bank
branches may sound crazy to the present bankers as they
are not used to such business deals, but it would go a
long way in helping the banks to consolidate their
business and improve the bottomline. These decisions,
however, will have to be taken purely on commercial lines
without much interference. The MoF and RBI welcome to
frame broad guidelines, but the final decisions should be
left to the commercial banks.
DUBAI, Feb 13 (UNI) In what may sound to be a great news for traffic-pollution affected people of India, BMW has developed the worlds first water-powered car, the cleanest and most environment-friendly car ever made.
The BMW 750HL, which is powered by liquid hydrogen extracted from water using solar energy, will revolutionise the entire automotive industry and contribute to the preservation of environment, especially the ozone layer, by reducing vehicle emissions, BMW officials claimed at a press conference here last evening.
The car is one of the main attractions at the ongoing international conference and exhibition on desertification,organised by the Dubai-based Zayed International Prize for the Environment.
According to Dr Horst Teltschik, a senior member of the Board of Directors of the Munich-based BMW group, this car has been in development for 25 years and is comparabale to any petrol-powered car in terms of safety and performance. Though it is ready to run, it cannot go into production commercially because there are no oil companies willing to set up distribution points for liquid hydrogen as they say there are not enough cars to make these distribution points commercially viable.
Mr Robert Bailey-Mcewan,
Managing Director of the BMW group in West Asia, said BMW
was keen to take part in the ongoing exhibition so that
it could bring the water-powered car to a region where
petrol is even cheaper than mineral water.
rates procedure flawed
The manner in which the Excise and Taxation Commissioner, Punjab has notified in several newspapers that new sales tax rates called floor rates of sales tax have become applicable in the State from January 25, 2000, gives rise to many important questions as to the legality of these amendments.
When contacted, this writer was told by the excise and taxation authorities that copies of the Ordinance proposed to be promulgated by the Governor of Punjab have been circulated amongst the departmental assessing authorities while printing of the same was still awaited. If the State Government really wants to give effect to new floor sales tax rates from January 25, 2000, publication of the Ordinance to be issued under clause (I) of Article 213 of the Constitution of India ought to have been ensured prior to the cut-off date. The State Government was equally obliged to ensure circulation of the copies of the official gazette amongst the public well in time.
It would be appropriate to refer to a Supreme Court judgement in the case of Collector of Central Excise Vs New Tobacco Co and others, (1998) 109 Sales Tax Cases 376. The issue involved in this case was the date of coming into force of a notification prescribing rate of duty under the provisions of the Central Excise and Salt Act, 1944. Precisely the question that came up for adjudication before the Honble Supreme Court of India was whether a Central Excise notification comes into force with effect from the date on which it is printed in the Government gazette or from the date it is made available to public.
Concluding the matter, it was held, inter alia, if publication is through a gazette then mere printing of the notification in the gazette would not be enough. Unless the gazette containing the notification is made available to the public, the notification cannot be said to have been duly published.
Having regard to the principles laid down by the apex court the application of floor rates of sales tax in Punjab could not be said to become operative from January 25, 2000, but the date of coming into force of the newly amended rates would the date of publication of the Ordinance in the official gazette and its circulation amongst the public.
The procedure, however,
followed by the Excise and Taxation Commissioner, Punjab,
in notifying the rates in newspapers prior to publication
of the Ordinance in the State Governments official
gazette is contrary to the provisions of law.
NEW DELHI, Feb 13 (PTI)
The inflation rate plummeted to 2.88 per cent for
the week ended January 29, after a three-week spell over
the 3 per cent mark, following a sharp fall in the price
of major food articles. The 0.43 percentage fall in the
annual rate of inflation to 2.88 per cent (provisional)
from 3.31 per cent (P) in the previous week was triggered
off by a 0.2 per cent fall in the index of primary
articles. Inflation was, however, way higher at 4.82 per
cent during the corresponding week last year.
by R.N. Lakhotia
Q: I am a small saving agent. I get 10 per cent commission on deposits made by me and 0.30 is given to me as commission by the Punjab Government. So you are requested to tell me about that how can I calculate my income. Please tell me in detail
Ans: In respect of your commission income on saving as small saving agent all expenses incurred by you for which you are possessing proof and documentary evidence and such expenses having been incurred for earning the commission income will all be deducted from your commission income.
Q: I am a Central Government employee posted at Dharamsala (HP) where the Remote Locality Allowance (RLA) is admissible to the Central Government employees. I have drawn Rs 9300 RLA during the year 1998-99 (AY 1999-2000). Kindly clarify whether this amount is to be treated as part of salary for the purpose of income tax calculation at source or not. If not treated as part of salary, the extent of % thereof. If the above amount is fully exempted for the purpose of calculating income tax under which section & can I claim refund.
B.B. Bharmera, Dharamsala
Ans: As per Rule 2BB of Income-Tax Rules, 1962, any special compensatory allowance in the nature of Composite Hill Compensatory Allowance in Himachal Pradesh will be exempted up to a maximum of Rs 600 per month. However, for claiming this allowance the area should be at 9,000 feet and above ahead of line joining Puhkajakunzomla towards the border. For full details please see the exact income tax rules.
Q: Sir, I want clarification on the following points:-
1. Is there any bar, under the IT laws, relating to time period, for raising a loan against NSCs , for which one has claimed rebate U/S 88?
2. Recently in your columns, it was clarified that net of difference i.e. interest income from NSCs minus interest paid on NSCs is to be taken as ones income. Kindly advise whether the purpose of raising loan has been specified under the IT law or one can raise loan at his sweat will to get this benefit?
3.My wife is also an employee & IT assessee. I want to make her gift of Rs 30,000. Will it call for any tax liability upon me or on my wife? What procedure to be adopted for this?
4. I have already raised a loan of Rs 1.50 lakh for purchasing a built house. Now, I want to avail another loan of Rs 1 lac from my employer for additions & altercations. Will I get benefit under Section 88 & U/S 24 for this additional loan also?
M. Singh, Amritsar
There is no bar in taking loan from NSC. The interest
paid on the loan is deducted from the interest income
only if the loan amount has been utilised for buying some
assets or making investments the income of which is
taxable as income from other sources. You should not make
a gift to your wife because the income arising as a
result of the gift made by you will be clubbed with your
income U/S 64 of the Income Tax Act, 1961. The additional
interest which you are paying for raising the loan will
be allowed as a deduction U/S 24. Please remember that as
the loan is old one the maximum interest that can be
allowed as a deduction is up to Rs 30,000 in one year U/S
24 of the Income Tax Act. However, in respect of the
rebate U/S 88 the deduction is allowed only for payment
towards purchase or construction of the residential house
which will include instalment payment or part payment of
the instalment under self-financing scheme etc. The
interest payment, however, will not be eligible for tax
rebate U/S 88 of the Income Tax Act, 1961.
by Ashok Kumar
Hold on shares of HDFC Bank
Q: Should I continue to hold on to the shares of Tata Honeywell?
S. Singh, Shimla
A: Joint venture between Honeywell, US and Tata, Tata Honeywell Ltd (THL) is recognised as a global leader in control technology. With operations in nearly 95 countries, the parent company is engaged in industrial control, home and building control, and aviation control. The companys products are used in power, energy, refineries, etc. The company is also recognised as a leading supplier of automation. Along with control systems, automation accounts for nearly 80 per cent of turnover. On the financial front, the companys trackrecord has been satisfactory with a significant rise in bottomline over the years. THL views areas such as power generation, mining, oil and gas, etc. as core market opportunities. Its future plans comprise a widening of its product range and services besides laying greater focus on software and services. It provides engineering software export in the coming years are expected to witness a favourable trend and a revival in the economy could result in larger investments in the core sectors, thus benefiting THL. Backed by a strong parent and a sound order book position. THL appears headed in the right direction in view of which, a hold is recommended in this scrip.
Q: Kindly comment on the prospects of CMC Ltd.
J. Roshan, Chandigarh
A: CMC Ltd, a software industry, has five main business operations, viz. customer services, indnet, educational training, system integration and international operations with the customer services division accounting for a major chunk of the revenue. The international operations division has its presence in countries like the USA, Canada, Germany, the Netherlands, the UK, Malaysia, etc. The systems integration division has done work for stock exchanges around the country. The companys export performance also appears to be on the upswing. The company has set up a plan involving all its divisions. Efforts towards globalisation of business are also being made besides bringing about significant improvement in productivity. The company plans to focus on the corporate sector, which till now was much neglected. CMC expects its training division to contribute more in the future. Hence its prospects appear encouraging.
Q: Is it advisable to invest in the shares of Colour Chem?
Nayan Rathi, Punjab
A: Over the past four decades, Colour Chemicals Ltd (CCL) is a leading player in the chemicals industry and boasts of an enviable track record over the years. CCLs operations extend to fine chemicals, process and performance products, cellulose ethers and polmerisates, pigments and additives, masterbatches and surfactants. Fine chemicals is the major contributor to the companys revenues, with the same at 41 per cent, pigments and additives account for 30 per cent of the turnover. The company has a distinction of being a pioneer in production of organic pigments. The company is now recognised as a Clariant group company and along with Clariant India, it is the representative of the group in India. In fact, Clariant India transferred its pigment business to CCL and the latter has in turn transferred its masterbatches division to the former. The company undertook a cost reduction drive which has now started paying dividends and is likely to continue in the same vein. CCL is in a strong position and in view of the strong parental support, its prospects appear good medium to long term investment in this scrip could be considered.
Q: Please throw some light on the prospects of HDFC Bank. Should I hold on to its shares?
Gurucharan Singh, Punjab
Bank, which has now emerged as a strong presence in the
banking sector, functions in four main business lines,
viz. corporate banking, treasury services, retail banking
and capital market infrastructure. The corporate banking
division concentrates more on short term working capital
needs than long term fixed capital requirements and it
has a presence in over 20 major industries, the diverse
nature of which proves beneficial. The bank is recognised
as a leader in clearing services to the stock exchanges,
evident from the fact that the bank services have been
sourced by the Mumbai Stock Exchange as a clearing bank.
The bank caters to the requirements of NSE, OCTEI and
exchanges of States like Ahmedabad and Calcutta. HDFC
Bank signed a MoU with Chase Manhattan which is a
favourable development. Irrespective of the difficult
conditions prevalent, HDFC Bank has managed to hold its
own. Given its sound financial trackrecord and
fundamentals, existing shareholders would do well to stay
invested in this scrip.
Bank of Rajasthan
THE Bank of Rajasthan has reported a substantial improvement in its working results for the nine months ended December, 1999. The bank has posted a net profit of Rs 6.61 crore for the period compared to a net loss of Rs 44.25 crore for the corresponding nine months last year. The banks treasury operations yielded a net profit of Rs 7.14 crore during the current financial year as against the Rs 2.57 crore earned during the previous year. The cost of deposits has reduced from 9.29 per cent to 8.97 per cent during this period.
Mumbai-based Elder Pharmaceutical Ltd will enter the capital market on February 16 with an initial public offer (IPO) of 48.86 lakh shares of Rs 10 each for cash at par at a premium of Rs 100 per share to raise Rs 53.74 crore.
Monte Carlo, the No 1 brand in knitwear category, is all set to make a foray into the summer wear category. Mr J.L. Oswal, Chairman, Oswal Woollen Mills of the Nahar group says initially the company plans to launch T-shirts and polo neck shirts for men and women. Later, trousers, shirts, shorts and other formal wear too will be added.
J.Walter Thompson , USA has reached $1billion in new business for 1999, when its New York office was awarded creative duties for Aquafina brand, the No1 bottled water brand in US retail stores.
Aquafina is a product of Pepsi-Cola Company, the global beverage division of PepsiCo, Inc., headquartered in Purchase, NY.
Sharp microwave oven has entered the Indian market. The product is being marketed through its Indian subsidiary, Kalyani Sharp India Ltd, which has been offering a wide range of audio-visual products like colour televisions, VCRs, VCPs, audio, LCD projectors etc.
Shree Krishna Poly
Shree Krishna Polyester, a part of the Shree Krishna group is entering the market with a public offer for sale of 2.50 crore equity shares, at par for Rs 10 each, aggregating Rs 25 crore. The offer will open on February 16 and will close on February 21.
Unable to bear the sustained aggression of Hindustan Lever in the ongoing turf-battle between the brands Colgate and Pepsodent, this company is again slipping. Some analysts, however, are willing to give this company one last chance before they give up on hope for its revival.
With the bull run showing no signs of abating, there is no dearth of theories about how far the sensex will progress. The very latest, comes from a leading academician who uses the statistical model of correlation-regression to predict a sensex of 15,000 points, within 15 minutes, hold your breath!
With the rumour of the takeover of this turnaround company by Zydus Cadila fizzling out, one would have expected the action at its counter to fizzle out. But hold on the latest rumour is that the Government will go in for a strategic divestment of its holding in this company.
Or is it Atcom
Technologies? Well, theres more to the renaming and
action at this counter if the grapevine is to be
believed. The rumour The New Bill is running this
counter, but the question is since when and is it time
for his exit as yet.
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