|Monday, May 15, 2000,
EU set to sign landmark WTO deal
Cavorting rupee to Papas tunes
BEIJING, May 14 (PTI) China and the European Union are set to conclude a historic pact on Beijings accession to the World Trade Organisation (WTO) with the arrival of EUs top negotiator Pascal Lamy here tomorrow.
Lamy, EU Commissioner for Trade Affairs, who will lead another crucial round of EU-China negotiations, said he hoped to conclude a deal with China on its accession to the WTO.
EU remains the main stumbling block for Chinas accession to the Geneva-based WTO, which sets rules for global trade.
Chinas official Xinhua news agency quoted Lamy as saying that he could not go back to the European Council or the European Parliament without any progress.
The 15-nation European bloc is asking China to open its telecommunications market. The EU wants its stake and share in the market to increase substantially to around 50 per cent, he said.
According to a report in the official China daily today, China is expected to conclude WTO talks with the EU on the lines of the US-China trade deal, signed in November last.
The upcoming talks in Beijing will be the fourth round this year between the EU and China. The earlier rounds were held in January and February.
EU was Chinas
third largest trading partner last year. Two-way trade
volume hit 55.7 billion US dollars in 1999, up 14 per
cent from a year ago. China was the fourth largest
trading partner of the EU.
NEW DELHI, May 14 (PTI) Breaking a nine-week upward rise, the inflation rate eased a bit for the week ended April 29, moving down to 5.94 per cent from 6.10 per cent a week ago.
The annual rate of inflation, calculated on the basis of wholesale price index (WPI), during the week fell by 0.16 percentage points to 5.94 per cent (provisional) compared to 6.10 per cent (P) a week ago and 3.55 per cent a year ago.
This is the first time the inflation rate has fallen after new WPI series with 1993-94 as base year was introduced on April 1, 2000.
The inflation rate has been witnessing a steady rise ever since it touched 3 per cent on February 5, mainly on account of increase in the administered prices in petroleum products and electricity.
During the week under
reference, the index for All Commodities
moved up by 0.1 per cent to 151.5 (P) from 151.4 (P) in
the previous week. The final rate of inflation for the
week ended March 4, on the new series stood sharply
higher at 5.01 per cent compared to 2.96 per cent.
NEW DELHI, May 14 (PTI) Punjab was the biggest loser in the food and cash crop production in 1998-99 with a drop in the yields of rice and cotton while Tamil Nadu emerged as the State with the highest yield in rice, oilseeds and sugarcane, a study carried out by Assocham said here.
After occupying the top slot in 1996-97 and 1997-98, Punjab lost out to Tamil Nadu which produced 3,443 kg per hectare in 1998-99, thereby earning the number one position, the study on the food and cash crops production trends (1996-97 to 1998-99) said.
The southern State had also emerged as the highest producer of sugarcane and oilseeds displacing Haryana and Orissa.
to Papas tunes
On the morning of Wednesday last, May 10, foreign exchange brokers switched on their computer terminals as placidly as any other day. However, by mid-morning they were gasping for breath. The rupee was being pummeled against the dollar. The days trading had opened at Rs 43.68 to a dollar, which was fast slipping ground. As the news spread about the rupees sudden collapse, industry and business was confused. The State Bank of India, which operates on the market on behalf of the Government of India, kept on buying. The day ended with rupee slipping to 44.08 to a dollar.
In mature foreign exchange markets, variation in the exchange rates happens in terms of pips, that is, fraction of one percentage point. In the course of a single day on May 10, the Indian rupee lost to the dollar by as much as 8 per cent. This would have meant huge losses for the importers.
The exporters would, of course, have gained. But their gain as well is not one-sided since many imported items go into export production and these would be costlier. There could be other macro-economic implications. India imports most of its petroleum products and sharp depreciation of the rupee would mean the domestic price of petrol and diesel will go up, nudging overall prices upwards.
The fall was directly because of the sudden purchase of the dollar by the SBI. Although nothing is known for certain, some market estimates put SBI purchases on that single day at about $120 million. The Indian exchange market being very thin, such purchases in one trading day can make a major impact as it had happened.
The question that cropped up was why did SBI pick up so much within such a short span of time driving the rupee down? What was the compulsion when the purchase could have been spaced out to leave the minimal impact on the market?
Various explanations have been offered. The one explanation given out that day itself was from the Finance Minister, Mr Yashwant Sinha, that the fluctuation was the result of a temporary mismatch between demand and supply. Secondly, it was believed to be a deliberate move of the Reserve Bank. Before last Wednesday, the rupee-dollar exchange rate had remained stable for a long time. The RBI wanted the rupee to slightly depreciate to maintain Indias export competitiveness.
In fact, with the rise in the level of foreign direct investments and steady interest of the foreign institutional investors (FIIs) in the Indian portfolio, the rupee can easily show signs of strengthening. Any premature rise in the external value of the rupee might shore up the countrys pride but can sorely affect the economic interests.
appears as though the RBI, working through the SBI, might
have been trying to bring about a minor correction in the
exchange rate. Otherwise, it was so very easy for either
SBI or the Government or the Reserve Bank to meet the
temporary mismatch between supply and demand
as mentioned by the Finance Minister
without in anyway affecting the exchange market! That
they chose to raise the sudden need for funds from the
exchange market confirms the view that it was a
deliberate aim to marginally readjust the exchange rate.
The writer is Adviser, Economic Affairs,
AMRITSAR, May 14 Mr M. Sita Rama Murty, Chief General Manager, State Bank of Patiala, inaugurated the computerisation of the second bank branch at Amritsar i.e. Hall Bazar (Katra Jaimal Singh), the first being Mukherji Marg yesterday.
The bank has been achieving priority sector benchmarks and has formulated schemes to suit the requirements of customers. The bank issued 48,000 Kisan Credit Cards during the year 1999-2000. The bank has been rated as the best bank in the country by the Verma panel.
The banks business at the end of March, 2000, crossed Rs 16,000 crore. Mr Murty also visited Pingalwara and distributed clothes and sweets among the inmates.
SRINAGAR, May 13 Kashmirs industry is sending a distress signal it is terminally ill, but the Central Governments response so far has been indifference.
Entrepreneurs reel out statistics to show how grim the situation is for industry in the Kashmir Valley. Over 500 units have been declared sick and many more are on the verge of closure.
Federation of Chamber of Industries Kashmir (FCIK) President John Mohammad Kakroo lamented, No one listens to us in Kashmir or in Delhi.
The grouse of the Kashmir industrial entrepreneurs is on three counts. Their plight for the past 11 years has been ignored; no package of relief has been announced for them and the revival spirit is dampened by bureaucratic red tape.
One of the problems that came in the way of revival of the industrial enterprises was that most of the industrial estates are occupied by the security forces, he said.
The security forces have been occupying the industrial estates in Bandipore, Sopore, Ganderbal, Sumbal, Zakoora and Baghi Ali Mardan Khan for nearly a decade as the government does not have sufficient accommodation to house them.
The industrial entrepreneurs in Kashmir are angry with the Central Government. Where is the much publicised and much promised northeastern type industrial package for Jammu and Kashmir. Every time we approach the Centre, this promise is dished out to us. But practically, there is nothing. Kakroo said.
The industrialists in
Kashmir also feel discriminated against by the
nationalised banks. The nationalised banks do not
offer the kind of cooperation that is needed to revive
the spirit of enterprise, according to Kakroo.
by J.C. Anand
Bear grip over market tightens
THE stock market continues to drift downward despite reports that the economy is doing well and there are satisfactory first quarter results. During last fortnight, the Sensitive Index dropped by 6 per cent and Nifty was lower by 3.79 per cent. Many analysts had believed that the recovery was on its way but the way the market is behaving, it appears that it would take some more time for the market to recover.
The new economy scrips have virtually eclipsed the old economy scrips but these scrips even now appear to be over-priced in terms of their EPS and P/E ratios. Some further correction is needed before these scrips settle down on a stable base. The old economy shares are being quoted at ridiculously low market rates but there are no takers for them, neither the traders nor the long-term investors.
There appear to me three factors responsible for the present depressed condition of the stock market. First, the drought in almost five states of India and their impact on both economy and the market sentiment. The sentiment, at least for the present, has a greater impact on the behaviour of the market. Some reports that the monsoon this year may be deficient by 10 per cent or so have created a feeling of uncertainty among the traders and investors.
Sales by FIIs have also contributed to the decline in the market indices. In fact, the FIIs have been sellers in all Asian markets. But this is rather a short-term transitional measure and the FIIs are bound to return to the market as investors. The slight fall in the exchange value of the Indian rupee in respect of the US dollar has also affected the market sentiment.
A sharp decline in the US stock market in the new economy shares has also affected the Indian markets but the latest reports indicate that the US market is recovering.
There is hardly any doubt that the Indian economy and industry are doing well. According to quick estimates of the Index of Industrial Production released by the Central Statistical Organisation, the financial year 1999-2000 has ended with 8 per cent growth as compared to 4 per cent during the same period last year. Another report, released by the National Council of Applied Economic Research, indicates that the business confidence Index now is the highest since December 1995. The corporate sector has also improved its efficiency by effecting economy and improvement in the management.
Hikal Chemicals and Electrosteel Castings have announced bonus issues at the ratio of one share for one held in each case. The Vardhman group has hiked dividend by 2 per cent (42 per cent in place of 40 per cent) in all three companies in the group.
What should the long-term investors do in the present situation? In the first place, it is not the time to liquidate ones holding in respect of blue-chip scrips, even though these scrips may have dropped by more than 50 per cent in their market value. BASF, Clariant, Colour Chem, Larsen and Toubro, Grasim, TVS Electronics, Telco, etc should be retained. Vikas WSP is quoting at a very attractive low price. The same applies to Sterlite Industries as well as Global Telecom.
But at the same time,
the investors should wait for making new investments for
some time as the market is expected to drop further down
this fortnight. But when a long-term investor picks up a
new scrip, he should keep two things in mind: it must be
a blue chip well-managed company and a scrip towards
which the market is friendly.
by R.N. Lakhotia
Ans: Generally speaking, the benefit of tax rebate u/s 88 etc. for house building advance will be eligible only when the house property is in the name of the employee himself. The tax rebate will not be permissible when the house or the land is registered in the name of the spouse. However, if a situation arises when the land etc is registered in the name of spouse but the fact remains that the investment of the said land as also the re-payment of the housing loan etc have all been contributed by the assesse himself i.e. the spouse did not have sufficient funds for contribution for purchase of the land or payment of the instalment, then it will be presumed that the spouse is the Benamidar of the assesse in which case the tax rebate u/s 88 would be permissible even in a situation where the land is owned by the spouse. Please remember that no rebate u/s 88 would be permissible in respect of the property held in the name of any person other than the tax payer.
Q: I have a handicapped daughter. The rebate for income-tax purposes under 80 DD has been enhanced from Rs 25,000 to Rs 40,000. I want to ask you whether the rebate of Rs 40,000 can be given by the DDO or it cab be claimed afterward through Income Tax return.
Ans: The DDO is competent to grant you deduction u/s 80 DD for tax deduction in respect of your handicapped daughter. As per CBDT Circular No. 781 dated 5.11.1999 the DDO can grant this deduction based on the Certificate of Government Hospital. The DDO need not insist on the vouchers.
Q: I am government servant and my wife is unemployed. My total income in a year (1999-2000) is approximately 2.5 lakh. Please clarify the following points:
(a) In which all schemes of UTI, PPF, ICICI, LIC and others, I can invest to save on income tax?
(b) I have a minor child, can I invest on his/her name to save on tax?
(c) Can I gift some money out of my salary to my wife/child to save on tax.
Ans: On the facts stated by you, PPF, LIC and the investments in ICICI qualify for tax rebate for the purposes of section 88. As regards UTI you should before making the investment verify whether a particular scheme of UTI is eligible for tax rebate u/s 88. If you make investment in the name of your minor child or you wife, you would still be able to enjoy the benefit of tax rebate in case the investment is made in the name of minor child or wife in other investment modes the benefit of tax rebate u/s 88 will not be permissible to you.
Q: I am working as an officer in nationalised Bank. I had availed leave encashment of one month during the financial year 1999-2000.
You are requested to clarify whether said income is to be included in total income and pay income tax accordingly or not. In case income-tax is to be paid and then get refund from income tax authorities after filing income tax return.
Ans: The leave encashment money will become fully taxable in income-tax while you are in service.
I hold 100 shares of Reliance Capital with Folio No. 077826360 and certificate No 000213457. Despite many reminders to the Company I have not received the sticker.
I deposited a sum of Rs 50,000 on 9.1.1997 with DCM Financial Service vide receipt No 60942 for a period of one year. Although the period of my fixed deposit has already matured on 9.1.1998 but I have not received the payment so far.
Dr Jagdish Jaggi
I am holder of five debentures with Folio No DF 402914, certificate No. 22929 of DCM Financial series. These debentures were due for repayment on 5.9.98. Till to date I have not received the payment.
Amar Rani Sood
I have a fixed deposit receipt for three years for Rs 16000 with Punwire vide FDR No 5078 on 22.8.98. The company paid quarterly interest up to February 1999 i.e for two quarters only and repeated reminders to them in this regard proved to be of no avail. Till date I have not heard anything from them.
I applied 50 shares of Geometric Software Solutions Co Ltd vide application No 9847595 tendered this application to HDFC Bank Ltd Ludhiana along with Cheque No 711011 dated 31/1/2000 drawn on SBI Brahmpuri Branch, Ludhiana. I have neither received the allotment nor refund so far.
In spite of my various reminders and taking up the matter through Branch Manager, Unit Trust of India, Chandigarh to the Unit Trust of India, Jaipur and RIC, New Delhi till today, I have not received the dividend for the year 1996 against my US-64 Certificate No. 40348811371116.
Inder Pal Minhas
I am ULIP member with Certificate No. 960411221205 and paid three annual instalments of Rs 6000 annual through bank drafts. The acknowledgement of the second instalment was not received by me. I have written many letters and got no response. That in 1999 I applied for premature payment of the certificate in April 1999 (which is permissible under the scheme after three years). But I got a Cheque No. 433592 for 7894/70 dt. 11/5/99 as the proceeds of only one instalment advising me the balance two instalments are not received by them till date and asked me sena the details of remittances if already paid. I submitted the particulars of drafts with the draft issuance certificates got them the respective banks which was acknowledged by the office on 31.5.99. Till to date I have not received any response.
NIIT TVE to set up IT firm
NEW DELHI, May 14 (PTI) NIIT TVE, a joint venture between NIIT and Chinese major TVE International, has announced the setting up of a wholly-owned foreign enterprise NIIT China to boost software development capabilities in China.
The key thrust of the NIIT Chinas strategy is to provide customers in government and private sector opportunities in the new economy for which NIIT is setting up its e-commerce and knowledge management practice, a company statement said here today.
NIIT China will strive for a leadership position in e-commerce and knowledge management in China by leveraging the technical strength of NIIT and marketing presence of our joint venture partner TVE International, NIIT Chairman Rajendra S. Pawar said.
Besides offering IT education and training services to individuals and organisations, NIIT will also set up corporate virtual universities an all encompassing learning framework, it said.
Panacea sets $ 10 m for JVs
NEW DELHI, May 14 (PTI) Panacea Biotec has chalked out a major overseas expansion plan and earmarked $ 10 million for forging joint ventures in Europe, the CIS and Africa.
We are in advanced stage of discussions with some companies in Europe, Africa and a CIS for setting up manufacturing and marketing facilities, Ravinder Jain, Managing Director, Panacea Biotec told PTI.
The company was looking at companies having a portfolio of biotechnology driven pharmaceutical products and it hoped to complete its overseas expansion plan by year end.
Panacea Biotec recently formed a joint venture company Panheber Biotec with Cuba-based Heber Biotec SA to enter the bulk market for vaccines.
The company will focus on production of erythroprotein and recombinant DNA technology-based vaccine for Hepatitis B.
PAL to delist shares from NSE
NEW DELHI, May 14 (UNI) In a bid to cut costs, Premier Automobiles Limited (PAL) is planning to get its shares delisted from the National Stock Exchange of India Limited (NSE), and Pune Stock Exchange Limited (PSE), besides trimming the number of Directors on the Board from 12 to eight. Its equity shares would, however, continue to be traded at the Bombay Stock Exchange (BSE), company sources told UNI here.
Though the company would be seeking its shareholders nod on Tuesday for going ahead with the delisting, it is yet to finalise a time frame for carrying out the same. PAL would be shortly approaching the SEBI for final approval.
Vysya Bank, Satyam to sign MoU
BANGALORE, May 14 (PTI)
Vysya Bank will strike a strategic alliance with
Satyam Infoway Limited for using the latters
e-commerce infrastructure relating to B2B and B2C
applications, among others. Under the MoU, to be inked
here tomorrow, Satyam will develop an interactive website
for the bank, a bank release said. The banks
Chairman K.R. Ramamoorthy and Managing Director of
Satyam, B. Ramaraju, will be present at the signing
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