|Monday, March 13, 2000,
IT, biotech to top
Indo-US economic agenda
Punjab sick unit gets new lease of
Set up nodal agency for
NIIT receives education software
Government NBFCs exempted from
maintaining liquid assets
Industrialists resent truckers
Dhumal unveils Ind-Swift unit
Farmers oppose tax on fertiliser
Inflation moves up
Seminar on insurance
NEW DELHI, March 12 (PTI) US President Bill Clintons forthcoming visit to India, this month, is going to be a starting point in translating the vast economic opportunities existing in both countries, particularly in the information technology and knowledge-based sectors, into reality, Indo-American Chamber of Commerce (IACC) says.
The US Presidential delegation will include Commerce Secretary M. P. Daley, who is scheduled to hold talks with Commerce Minister Murasoli Maran during the five-day visit (March 20-25).
According to IACC, US Department of Commerce has already submitted a proposal to the Commerce Ministry on greater interaction between the two countries in the areas of biotechnology and high-value adding industries, including information technology.
IACC representatives, headed by Chamber President Ravi Wig, had a preliminary meeting with a high-powered US delegation, led by US Assistant Secretary, Department of Commerce, Patrick Mulloy, on March 3.
Mulloy told IACC representatives that if the proposals put forward by the Department of Commerce are acceptable to India, then the Department was looking forward to Commerce Secretary Daley signing an agreement on this.
Other areas of cooperation between the two countries that are expected to figure during the talks are facilitation of US capital inflow in infrastructure, particularly in energy and telecommunications, agro-based industries and civil aviation.
Mulloy made it clear that that, economic and commercial goals would be accomplished mainly under the leadership of the private sector with government coordinating bodies playing facilitating roles.
Wig told the US team that IACC offered, the most viable platform for a close one-to-one interactions with the business delegation accompanying the President.
The Chamber would want to play a crucial role in positioning the proposed business initiatives, ensuring initial documentation and helping the implementation and establishment of the businesses, he said.
US business interests in India have expanded considerably following liberalisation and opening of the Indian economy since 1991. Foreign Direct Investments (FDIs) from US have been the highest between 1991 and 1999 estimated at Rs. 434 billion, constituting nearly 25 per cent of the total FDIs into India.
Further, India is receiving additional 10 per cent FDI from the US through the Mauritius route.
The areas in which US capital has come in are energy, telecommunications, services, electrical equipment and transportation.
Leading US companies, which are expanding their Indian operations include US telecom giants AT & T and Motorola, Auto majors Ford and General Motors, I.T. giant IBM and Chemical major Du Pont.
Recently, US investment into India has declined as a number of potential investers have put on hold investment in infrastructure and financial sectors.
For higher inflow of US FDIs into India, the IACC has been reiterating that the Government should review labour laws, judicial system, financial institutions and taxation laws.
There is a need to initiate steps to win back confidence of investors. Identify crucial aspects, problems and issues, which keep Americans away, Wig says.
Besides, there is need to accelerate liberalisation policies, streamline clearance and approval procedures and ensure transparency in international bidding and implementation, he adds.
Indias exports to US have increased nearly three-fold in the last seven years from $ 3.8 billion in 1992 to $ 9.1 billion in 1999.
Similarly, imports have gone up from $ 1.9 billion to $ 3.7 billion in 1999.
But, India still has to
tap the large US market, which imports goods and services
worth over $ 1,000 billion a year. The Indian information
technology sector should definitely take a lead in
tapping the huge US Market.
sick unit gets new lease of life
NEW DELHI, March 12 The Mahaan group has entered into a long-term partnership with a sick industry in Amritsar district aimed at not only reviving it but also increasing the milk production and dairy products in the State.
By this agreement the sick unit Kisan Dudh Udyog Limited in Batala, Amritsar districts, would be revived with fresh capital the production capacity of our group would also increase, said Mr Rajiv Goyal, the Managing Director of Mahaan Foods Limited told The Tribune here today.
The Rs 250 crore Mahaan group, he said, would bring in new technology, capital and management expertise in the sick unit. The workers of the sick firm depending on the requirements would be retained.
The Kisan Dudh Udyog was declared sick in 1998.
Mr Goyal said the group has entered into a five year long term lease with the management of the sick unit.
The Batala unit has the capacity of 1.5 lakh litres of milk and would also be involved in the production of ghee and other dairy products, he said.
The group, which has major presence in the North-East, has at present production capacity of seven lakh litres of milk per day.
The Batala plant would increase our production capacity by 15 to 20 per cent, he said, adding that nearly Rs 1 crore capital is being invested in the plant.
Disclosing the groups major plans in the region, Mr Goyal said we are planning to enter into such long term lease agreements with other sick units in Haryana and Rajasthan.
After having made our presence felt in 15 States, especially in Eastern India, we are planning to spread out in North India, he said.
In Haryana, Mr Goyal said the group is holding talks with some of the sick units which had the production capacity of three lakh litres of milk per day.
The Mahaan group manufacturers consumer and industrial dairy products, processed vegetables, different types of coffee whiteners, ghee, 15 recipes of Indian origin pickles, five different cooking and spice pastes, over 10 different varities of formulated spices for cooking.
Punjab and Haryana are one of the largest milk producing states in the country and they, too, have the substantial quantum of milk availability per person.
Milk production in the country has witnessed a significant growth of 4.5 per cent per annum to reach the level of 74.4 million tonnes during 1998-99, making India the largest milk producer of milk in the world. Cooperative movement has been attributed the credit for carrying out this white revolution.
The Ninth Plan has set milk production target at 96.49 million tonnes, envisaging an annual growth rate of 7.06 per cent.
The Deputy Chairman of
Planning Commission, Mr K.C. Pant, has said that some
critical areas that needs to be improved to achieve this
target include artificial insemination services,
upgradation of animal health care services and
strengthening of training and research facilities.
nodal agency for exports: study
CHANDIGARH, March 12 There has been a significant fall in exports from this region chiefly due to infrastructural bottlenecks, says a PHDCCI study.
The main products being exported from this region are cotton and woollen textile and yarns, hosiery and garments, leather, drugs and pharmaceuticals, hand tools, sewing machine parts, auto and bicycle parts, sports goods etc.
The exports from this region are not substantial when compared to Maharashtra and Gujarat as the region is land-locked and suffers from various handicaps like distance from ports and even lack of adequate container services, adequate airport facilities, woeful shortage of passenger and cargo facilities, poor rail network, deplorable condition of roads, poor quality and frequent power break downs etc.
Although the telecommunication network has of late improved, it has not reached the global standards as it is recognised as one of the most important infrastructural input of boosting the exports.
Item-wise there has been a marginal decrease in the export of items like food products, pharmaceuticals. Exports fell drastically in 1998-99 as compared to 1997-98 in case of electrical goods, woollen textile and yarn, sports goods and increased in 1998-99 as compared to the previous year in case of cotton textile and yarn, sewing machine and auto parts.
The Chamber feels that apart from the removal of difficulties faced by exporters, the State Governments and entrepreneurs of the region should concentrate on certain thrust areas which symbolise the inherent strength of this region particularly the availability of raw materials, highly productive labour etc.
From example in Punjab, Haryana and Himachal the effort should be to exploit the resources in agriculture, horticulture, floriculture etc.
A nodal agency should be appointed at the State level comprising representatives of the State and Central Governments, export organisations and exporters to take up their problems with the various authorities at the Central level.
The other strategic factors include simplifying labour laws, promoting quality awareness in commodities, single window system for exports and building export centres.
The recent imposition of
export tax may act as a dampener for increasing exports.
While some exporters may be able to absorb this hike, it
will seriously affect the exporters when they have to
face global competition, particularly from China, South
Korea and Taiwan etc.
NIIT has bagged the largest ever education software order by any Indian company by winning a $ 7.4-million contract from Americas National Education and Training Group (NETG).
The order worth Rs 32 crore ($ 7.4 million) takes the total value of business contract by NIIT from NETG to $ 25 million over the last three years, NIIT said in a statement here today.
NIITs Learning Software team will produce close to 100 Learning Software Products on Microsoft, Lotus and Internet technologies to meet the latest requirements of NETG.
NIIT, which has emerged as the largest Indian developer of e-Learning Solutions, would start delivering these products to NETg from April.
This prestigious order from NETg is a strong indicator of the significant foothold gained by India in the worlds largest multimedia market over the years, the company statement said.
The current order from NETg comes close on the heels of NIIT being given a prestigious award by NETg for five consecutive defect-free deliveries of learning software products. NIIT today has a dedicated software development facility for NETg.
S Kumars.com: S Kumars.com is planning to set up a large network covering 50,000 franchisees across 1008 towns in the country.
With the help of VSATs the network will overcome constraints like inadequate cable infrastructure, lack of personal computers and non-validation of transactions which is critical for e-commerce to flourish and take technology to the common man.
The franchisees will operate public kiosks at strategic locations in their cities/towns with personal computers linked via VSATs.
They will handle the payment system, maintaining on-line accounts with S Kumars.com and receiving payments in cash from customers using the network through these kiosks.
Hero Cycles: Hero Cycles organised a dealers conference recently at The Park Royal as a part of a series of dealer interactions throughout the country. Hero Cycles, with a targeted turnover of Rs 850 crore forms a substantial chunk of the Rs 4000 cr crore Hero group.
The other main contributor to the group is Hero Honda with a targeted turnover of Rs 2400 crore for this year.
At the conference, Hero Cycles announced its landmark sales of 5.1 million cycles in 1999 and the company is all set to touch the 5.4 million mark in this year. Hero Cycles has yet again maintained its position of being the largest cycle manufacturer in the world. The company has already sold 70 million cycles worldwide so far.
Digital India: Digital India today registered a new branch office in the UK, to be headquartered in Central London.
The company has also
signed up an additional software development facility at
Bangalore, to be operational from March this year. Both
of these movies from part of Digital Indias
strategy to expand its global network and increase its
infrastructure and marketing strength.
Government NBFCs exempted from maintaining liquid assets
NEW DELHI, March 12 (PTI) RBI has exempted Government-owned finance companies from maintaining liquid assets and creation of reserve fund saying they were unlikely to default on repayment to depositors.
However, all Government NBFCs were required to be audited by the statutory auditors as per the provisions of Companies Act, RBI said in a recent circular.
Government companies pose little supervisory concern regarding repayment of deposits held by them and protection of interests of the depositors, it said.
RBI said auditors should bring to the Governments notice any irregularities committed by these NBFCs so that corrective steps could be taken. Hitherto state-owned NBFCs were under the regulatory purview of RBI and Government and the new norms would end dual control by putting these under the purview of Companies Act.
RBI said it did not want to discriminate among the NBFCs on the basis of ownership but in view of the role played by these companies in the discharge of their social obligations, it was decided to exempt government NBFCs from maintaining liquid assets and creation of reserve funds.
The decision was taken after consultations with the Government, RBI said.
RBI also permitted NBFCs to maintain upto 5 per cent of the public deposits in the form of term deposits with scheduled commercial banks out of the present requirement of 15 per cent of public deposits to be invested in liquid assets.
This is aimed at enabling the NBFCs to establish a relationship with their bankers and securing services as the banker. These norms will be effectively enforced retrospectively from the first day of the quarter, beginning January 1, 2000.
However, NBFCs have been asked to strictly adhere to the requirements of maintenance of liquid assets.
The Central Bank has also asked NBFCs holding public deposits to scrupulously furnish the liquid asset return on quarterly basis.
The RBI circular said NBFCs with net-owned fund (NOF) upto Rs 50 crore to set up branches within a State where its registered office is situated.
resent truckers behaviour
GURGAON, March 12 The industrialists here today resented against the high-handed and whimsical behaviour of the truck operators unions in spite of the fact that successive governments in the State had not recognised them.
In an interactive session with the local MLA, Mr Gopi Chand Gehlot, organised by the Gurgaon Industrial Association, the industrialists alleged that although no truck operators union was approved by the Government, large number of them operate in this district.
Submitting the points of grievances of the industrialists to Mr Gehlot, the President of the GIA, Mr Jagan Nath Mangla alleged that the unions charged exorbitant rates and often behave in a unseemly manner with the entrepreneurs. As a result of which the industrial units find it difficult to send their materials to outstations.
The industrialists charged that the industrial estates developed by the Haryana Urban Development Authority/Haryana State Industrial Corporation were lacked basic infrastructure, including proper drinking water, sewerage system and street lights.
The captains of industry protested against the Governments apathy in implementing its decision of declaring Gurgaon as no power cut zone.
A demand was also made of the Government to rescind its decision of reducing the sanctioned load of 70 KW in respect of the medium size industries to 50 KW.
Also, demands were made for introduction of one way traffic in the city, removal of encroachments in Sadar Bazar and Subzi Mandi areas, beautification of the city, installation of red lights at the major crossings to regulate heavy flow of traffic and deployment of recovery van for the lifting of garbages from the Industrial Development Corporation(IDC).
Mr Gehlot, a former INLD
leader who won in the just concluded assembly election as
an Independent, said that he would take up the problems
of the industrialists at the highest level in the
unveils Ind-Swift unit
CHANDIGARH, March 12 Prof Prem Kumar Dhumal, Chief Minister of Himachal Pradesh, today inaugurated a unit of Indo-Swift Pharmaceutical Ltd. at Parwanoo. Set up at a cost of Rs 7.5 crore, this unit will provide employment to about 150 persons.
Prof Dhumal said that Himachal offered the best package of incentives to the entrepreneurs which include speedy transfer of land, escort service to the entrepreneurs to facilitate in setting up of units, single man clearance and above all friendly administration.
The unit will primarily concentrate on manufacturing newer drug formulations in therapeutic segments like anti-infectives, anti-histamine and cardio-vascular. The drugs planned are Clarithromycin, faxofenadine Hcl, Atovastatin, Omperazole and Lansoperazole.
Chief Minister gave a call to the private investors to come to Himachal and set up their units and assured them that Government would provide them best possible assistance.
Dhumal said the Himachal Government will give preference to those industries in the State which will fulfil three conditions laid down by the State in the industrial policy. The industry has to give employment to Himachalis to the extent of 70 per cent, industry should be non-polluting type and must add to the revenue of the State. Dhumal added that his government has given a importance to the professional education in the State.
Q: I am working in a residential school as a teacher-cum-house mistress. I have been provided with rent free accommodation. I am not getting any HRA. My employer while issuing Form 16 (Tax deducted at source) has shown an amount of Rs 10000 under income on account of rent free accommodation even though no such income was actually received by me. This has resulted in inflating my income and I. tax thereon. Please clarify the correct position.
C. Lalitha, Nabha
Ans: On the facts stated by you, your employer is correct in adding the sum of Rs 10000 to your income on account of rent-free accommodation. Even though you have not received any actual income but under the Income-tax law this amount is added to your salary income on account of perquisite. Thus, the tax has been rightly deducted.
Q: In the Budget proposals for 1999-2000, tax on long term capital gain for residents has been reduced from 20 per cent to 10 per cent on transfer of shares and securities on par with NRIs. Later on it was clarified that 10 per cent tax was applicable only where cost indexing is not applied and that it will continue to be 20 per cent if indexing on cost of acquisition is applied. In the case of bonus shares issued by companies, cost of acquisition is nil and hence indexing is not possible. Kindly clarify whether reduced tax of 10 per cent on long term capital gain is applicable to transfer of bonus shares issued by companies. S.H. Subramanian, Chandigarh
Ans: In the case of listed security specially the bonus shares fetching long-term capital gains would be eligible for Income-tax payment at 10 per cent only.
Q: I have H.U.F. deposit of about 3 lakh, on which I get taxable income of bank interest 36,000 after deduction under 80L. Please advise me whether
1. I am required to submit regular Income-tax return?
2. If the amount of 36,000 from interest is below taxable, can I submit Form 15-H to avoid deduction of T.D.S.?
Sandeep Kumar, Tarn Taran
Ans: If the Hindu undivided family does not fulfil any one of the six economy criteria, then it is not required to submit Income-tax return as the net taxable income is much below the Income-tax exemption limit. You can also submit Form No 15-H to the bank so that no tax is deducted at source on the interest income received from bank fixed deposit.
Q: Can an NRI buy shares of public limited companies of India e.g. Infosys Technology? If yes, is there any condition applicable? e.g. RBI approval. Do foreign residents pay any capital gains tax earned by selling shares/mutual funds in India?
Suresh Mittal, Chandigarh
Ans: An NRI can make investment in normal course in the shares of a public limited company of India. For detailed answer to your query please contact the Exchange Control Department, RBI, Bombay. The NRIs are also required to make payment of tax on capital gains which is earned by them by selling the shares or mutual funds in India.
Q: I am working as Small Saving Schemes Agent of Post Office. I am an Income-tax payee. Now my business is gradually increasing day by day and thus my income is increasing accordingly.
2. In most of the post office deposit scheme I receive 1 per cent and in a particular I receive ½ per cent. Often people know about the percentage of commission which an agent is getting from the Post Office. Therefore the subscriber oftenly demand half or more than half per cent share of the commission earned by the Agent from their deposit.
3. Whether I can get a proper receipt from the depositor on account of getting share from my commission?
4. Whether I can give an incentive item just like wall clock wrist watch, plastic bucket, plastic tumbler etc., according the amount deposited by the depositor?
5. I shall stand indebted to you if you very kindly suggest me any other ways and means to show the maximum expenditure on my increasing income. Narinder Kumar, Sirhind
Only after obtaining proper receipt from the person to
whom you have given rebate or commission, the said sum
will be allowed as a deduction from your income. You are
permitted to distribute presentation articles like watch,
clock etc. etc., as per your desire to your
customers/clients etc. etc. The sum of money so spent on
presentation articles will be fully allowed as a
deduction from your commission income.
oppose tax on fertiliser
AMRITSAR, March 12 Punjab farmers and fertiliser dealers are up in arms over the imposition of 4.4 per cent sales tax on fertilisers by the Punjab Government under the uniform sales tax for the Northern States.
The BJP MLA Mrs Lakshmi Kanta Chawla yesterday expressed her resentment over the tax which will add over Rs 300 crore burden on the farmers already reeling under the debt. While urea has become dearer with the withdrawal of subsidy by Yashwant Sinha in the Budget.
She lashed out at the State Government for its double standards. While on the one hand the Chief Minister was critical of the Centre for the withdrawal of subsidy on urea and was demanding a status quo while on the other hand he had brought out a notification last month imposing 4.4 per cent sales tax on fertilisers.
Meanwhile various industrial and trading associations have resented the Governments move to impose cess on generating sets.
General Secretary of the Textile Manufacturers Association H S Makhni in a letter to the Chief Minister pointed out that generating set were installed under compulsion to supplement the inadequate power supply from the PSEB and to meet the shortage gap.
Income tax returns: A record number of 17,500 new assessees filed their income tax returns under scheme 1(6) which was launched by the department to cover the city population. The Commissioner of income tax, Mr SJS Pall, said today that the department office did a commendable job to pursue people to file their returns.
Vintage Cards and Creations is a Pune-based company and has an exclusive right to distribute Hallmark cards in India, along with non-exclusive right in neighbouring countries like Bangladesh, Sri Lanka and Nepal. Hallmark Cards Inc, the USA, is one of the largest card companies in the world and Vintage has access to its design studios and library. It even has a marketing licence for the products of one of the representative companies of Hallmark in Australia.
Through its agreement with Walt Disney Consumer Products, it has bagged a licence to use its cartoons in the company products. The company, also has a non exclusive right, given by Mettel Inc. to manufacture, sell and distribute a varied range of items under the brand of Barbie in India and few neighboring countries. The company has a production capacity of 31,95,000 cards and 6,95,000 posters. On the financial front, the companys performance has been quite encouraging and during the year that ended in March 1999, the company posted sales and net-profits of Rs 19.4 crore and Rs 4.1 crore, respectively, thus yielding an EPS of Rs 8. Given these factors, investors with a medium to long term perspective could consider picking up the shares of this company.
Tasty Bites Limited (TBEL), incorporated in 1989 by Ravi Ghai , is engaged in the business of ready to serve food and frozen vegetables. Though initially most of its foray in this segment failed miserably like unsuccessful launch of Kwality ice-creams, turning down of the tie up proposal by Pepsi. But the major breakthrough came its way when in 1997. US-based Preferred brands in company took over the mgt. of the company. The directive of the new manufacture company focused itself on high revenue generating products like the ready to serve product range which comprises entrees and curry sauces. It even started utilising existing facilities in the frozen vegetables segment more effectively. Because of its strategic collaborations with HLL, NDD, Mafcoand Tropicana it is currently utilizing 90 per cent of its cold storage facilities. Impressed by its success a Dutch government is considering an agro processing grant for the company.
During the financial year that ended in March 1999, the company posted sales and net profits of Rs 3.15 crore and Rs 0.47 crore respectively. To expand its geographical reach it is now eyeing other global markets besides in USA, where it is the largest selling natural, ethnic foods Indian brand. Planning to continue with its synergistic acquisition of other companies, TBEL no doubt presents a very encouraging picture for future growth.
The company has the distinction of being one of the four dealers worldwide for Allied Signal Power Systems (USA), which manufactures microturbines. In India, the company is operational in the area of implementation of microturbines for various companies, to quote a few ventures, first micro turbine has already been implemented at the Chembur unit of Mahanagar Gas.
Thermax also has orders from Oberoi Agrafor 12 units. After being appointed as the sole dealer for India and Bangladesh it is expectant about bagging the sole dealership of many other countries too.
The company has also
completed a Rs 16 crore the largest desalination plant
project besides executing 2*27 MW naptha based captive
power plant for Arvind Mills. During the financial year
that ended in March 1999, the company posted sales and
net profits of Rs 466.03 crore and Rs 37.5 crore
respectively, thus translating into an EPS of Rs 15.8.
The company seems poised for better days in the near
NEW DELHI, March 12 (PTI) After a four-week fall, the inflation rate recorded a marginal increase of 0.6 per cent to 2.14 per cent for the week ended February 26, despite a perceptible decline in the overall price index.
The 0.6 percentage point increase in the annual rate of inflation to 2.14 per cent (provisional) from 2.08 per cent (P) in the previous week was in contrast to the falling trends witnessed in all major categories of wholesale price index (WPI).
Seminar on insurance
CHANDIGARH, March 12 Demands of insurance agents to sell life non-life health and pension products in India is estimated to be over 3 lakh by 2005, out of which demand of 50,000 individuals is expected for the North alone, said Mr B.K Sharma, Chairman, Insurance Institute for Education & Training (IIET) at a seminar on Career & Business Opportunities with Global Insurance Players held here today.
World over 80 per cent of the insurance business is conducted through insurance agents. Considering the present insurance market of just Rs 40,000 crore, which is expected to touch Rs 1,00,000 crore per annum by 2003, the insurance agents in India can look forward to the most remunerative career of the millennium. The disbursements as commissions to the insurance agents by all insurance companies venturing Indian market by 2003 is expected to be Rs 8000 crore.
UGCE-IIET is imparting
need-based training to the agents in the field of life
non-life, health and pension. On completion of two months
training, the resume of the successful IIET candidates is
placed in Indias first insurance website
ugceinsurance.com alongwith a free Homepage.
NEW DELHI, March 12
(PTI) Pran Talwar, Chairman of CII Trade Fairs,
died today in Bangkok. Talwar was former Chairman of CII
Northern Region and also held several important
positions, including Board Member of the India Trade
Promotion Organisation, a CII release said here today.
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