Sunday, October 21, 2001, Chandigarh, India






THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
B U S I N E S S

Malana power project inaugurated
Malana (Himachal Pradesh), October 20
Home Minister L.K. Advani, here today, dedicated the Rs 335 crore Malana Hydroelectric Power Project, 26 km from Bhuntar, in Kulu district.

Punjab industry faces crisis
I
ndustry and trade of Punjab has started feeling the real effect of the ongoing war. All sections of business are feeling the pinch one way or the other. Exporters are cross fingered. Supplies to the exporters have to perforce reduce production anything above 25 per cent.

NFL offers VRS to employees
Ropar, October 20
The cash-starved National Fertilizers (NFL) in a desperate bid to reduce its manpower, has finally decided to offer voluntary retirement scheme (VRS) to its employees.

IDBI Bank and India Post tie-up
New Delhi, October 20
IDBI Bank and India Post today announced a strategic tie-up that would enable post office users to make wide use of banking services.

VAT introduction in Haryana
T
he introduction of new system of taxation on the sale and purchase of goods called Value Added Tax in place of the existing enactment, namely, the Haryana General Sales Tax Act, 1973 governing the levy of purchase and sales tax seems to have become certain from the commencement of the next financial year with the Prohibition, Excise and Taxation Department, Haryana, Chandigarh coming out with a draft of the proposed legislation in the form of The Haryana Value Added Sales Tax Act, 2001 (in short VAT Act).




EARLIER STORIES
 

HFCL phones in Punjab within 6 months
Bathinda, October 20
Mr Kuldeep Kumar Kohli, Vice-President, HFCL, said today that within six months all cities of Punjab would be provided with the telephone connections.

Interest cut on loans for dairy sector
Ludhiana, October 20
The Chief Minister, Mr Parkash Singh Badal, today announced the decrease of 1 per cent rate of interest on loans taken for the dairy sector.

CORPORATE NEWS

Digital GlobalSoft net rises
Bangalore, October 20
The Digital GlobalSoft today announced a 93 per cent jump in revenue and 66 per cent increase in profits after tax for the quarter ending September 30.

  • Vesuvius nets 3.12 cr
  • Visualsoft Tech net down
  • Bharat Forge net falls
  • Birla Corp net up

AVIATION NOTES

Proper checking must for pilots
D
espite criticism, the Airports Authority of India (AAI) has appointed a ‘retired’ pilot in its Flight Inspection Unit (FIU) on salary of Rs 30,000 a month. The decision has set a dangerous precedence and many pilots, some of them highly experienced, are up in arms.

LABOUR LAWS

Is order vitiated?
Q: Whether claim that order is vitiated as Inspector’s report was not given to him, tenable?


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Malana power project inaugurated
Our Correspondent

Malana (Himachal Pradesh), October 20
Home Minister L.K. Advani, here today, dedicated the Rs 335 crore Malana Hydroelectric Power Project, 26 km from Bhuntar, in Kulu district.

Addressing a public meeting after formally dedicating the 86-MW power houses, Home Minister complimented the LNJ Bhilwara group for completing the project in two and a half years against the scheduled period of five years and added that those delaying the projects should follow them. “I used to be intrigued when files of many projects came to the Cabinet for extension of cost overrun and time overrun. This happens nowhere in the world”, he said.

Mr Advani agreed with the suggestion of the state Chief Minister P.K. Dhumal and Chairman LNJ Bhilwara Ravi Jhunjhunwala that the ratio of hydel power projects and thermal power projects should be equal and he assured that he would plead their case.

He said lack of prompt decision leads to delay in the execution of the projects and all such irritants should be removed in supreme national interest.

He appreciated that 70 per cent of the jobs generated by the Malana project had given to the local.

Earlier welcoming the Home Minister, Mr Prem Kumar Dhumal said of the total hydel power potential of 84,000 MW of the country, Himachal Pradesh has one fourth potential of 21000 MW. It is paramount to harness this vast potential at the earliest. It had been estimated that Rs 1 lakh crore was required for the project.

Mr Dhumal said unfortunately in the past the hydel power generation had not been given the priority. The myth that the gestation period of hydel projects was long had been demolished by the Malana project which was completed in half the scheduled period.

His government gave top priority to hydel power generation and work on a number of projects was taken up under the private sector and by the HPSEB.

Himachal would contribute to the national grid 10,000 MW of power by 2008 and another 20,000 MW by 2012 ushering in an era of prosperity in the state.

He pleaded before the Home Minister that Himachal should be allowed to levy generation tax on projects constructed on its territory as provided under Article 282 (2) of the Constitution. The matter was currently under the consideration of the Law Department of the Union Government.

The Chief Minister announced Rs 10 lakh for a road in response to a demand made by Mr Maheshwar Singh, MP.

Mr Ravi Jhunjhunwala, Chairman, LNJ Bhilwara group, said the credit of completing the project also went to the Chief Minister who helped getting as many as 40 clearance certificates. One of the main reasons for inordinate delay in the execution of projects was due to the clearance certificates.

Mr L.N. Jhunjhunwala gave a sum of Rs 51 lakh for the Manikaran renovation project.
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Punjab industry faces crisis
P. D. Sharma

Industry and trade of Punjab has started feeling the real effect of the ongoing war. All sections of business are feeling the pinch one way or the other. Exporters are cross fingered. Supplies to the exporters have to perforce reduce production anything above 25 per cent.

Apart from war highly unstable administrative set up of Punjab has also shaken the business circle. In such a regime no policy worth its name can be of any use. The foremost effect of this instability is the amount of hurdles being put in the working of business. Ad hoc decisions of sorts without any rationale are putting undue financial burden.

Another event has gone almost unnoticed. A committee constituted by the Ministry of Small Scale Industries visited Chandigarh to take views of Punjab’s industry. This committee is headed by TKA Nair, former Chief Secretary of Punjab with Mr S.K. Tuteja, Development Commissioner as the convener.

The committee sought the views on prospects of industry in Punjab. Industry has responded in half hearted way as things are going from bad to worse despite various utterances from various quarters. Real issues are being side tracked.

Some salient suggestions read like this.

In the global regime SSI sector is finding it hard to compete both in quality and on price of the product. Obsolete equipment is the sole hindrance. With a cap of Rs one crore on investment limit progressive SSI units can hardly compete. For instance for quality bicycle parts investment limit less than Rs 3 crore is the dire necessity. Issue of investment limit is highly sensitive and government has found a way out. Increase in investment limit selectively is being done. So bicycle industry has also projected its case with facts and figures.

Industry has sought firm policy on power. Relatively cheap power with stability in supply is the only advantage available to industry of Punjab. For the past few years this advantage has been wiped out with highly unstable administration of PSEB and politically motivated policies of state govt.

Industry has also sought creation of new Focal Points on the modern lines. Provision of residences and commercial markets around new Focal Points is the necessity. Concept of built up sheds can allure qualified entrepreneurs into industry. Such a complex in Ludhiana built 30 years ago in very successful.

The way the government has dithered on octroi issue has given a bad taste. With octroi in place industry of Punjab can hardly be expected to beat its competitors. At the moment the issue is lying in courts and some solution is possible after court disposed it of.

On finance lesser said better it is. Banks are in a way fleecing the small entrepreneurs with undue high interest and service charges of sorts. Industry has stressed this point before the committee. In fact this view point with full facts and figures has already been given to central govt but silence is the only response SSI sector has got.

In order to sustain whatever little growth Punjab Government should take up basic issues seriously. In a way we have to jump before we are pushed.
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NFL offers VRS to employees
Lalit Mohan

Ropar, October 20
The cash-starved National Fertilizers (NFL) in a desperate bid to reduce its manpower, has finally decided to offer voluntary retirement scheme (VRS) to its employees.

The highly placed sources in the company said the VRS, which would be operational from November 1 to December 31, would be open for all employees irrespective of their age or designation. However, the management has reserved the right to accept or reject the VRS proposals of the employees.

The compensation being offered to the employees would consist of salary of 35 days for every completed year of service and 25 days for the balance years of service left until superannuation.

However, the compensation will not exceed the salary equivalent to the remaining months of service. The minimum amount of compensation to be paid under the VRS has been fixed at Rs 25,000 or 250 days salary, whichever is higher.

Besides, the regular retirement benefits as the provident fund and the gratuity would also be given. 
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IDBI Bank and India Post tie-up
Tribune News Service

New Delhi, October 20
IDBI Bank and India Post today announced a strategic tie-up that would enable post office users to make wide use of banking services.

IDBI Bank also launched its Internet banking website today, which was inaugurated by the Minister for Communications and Information Technology, Mr Pramod Mahajan.

IDBI would now be offering loans against National Savings Certificates and the sale of National Savings Certificate on the Internet.

According to IDBI Chairman, Mr M.S.Verma, the tie-up was make financial products available to the commonman across the country.

Loans against NSC would be sold through the post office network. Investors who have bought NSC in the past would be able to borrow money from IDBI Bank at the post office premises itself.

With the launch of Internet Banking, IDBI Bank customers would be able to access account information, transferring money to other IDBI Bank account holders, paying utility bills, ordering products online and requesting for chequebooks at the click of a button.
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VAT introduction in Haryana
A. K. Sachdeva

The introduction of new system of taxation on the sale and purchase of goods called Value Added Tax in place of the existing enactment, namely, the Haryana General Sales Tax Act, 1973 governing the levy of purchase and sales tax seems to have become certain from the commencement of the next financial year with the Prohibition, Excise and Taxation Department, Haryana, Chandigarh coming out with a draft of the proposed legislation in the form of The Haryana Value Added Sales Tax Act, 2001 (in short VAT Act). The primary difference between the scheme of the sales tax statute presently operating in the field and the provisions of the proposed Value Added Tax is that the vital rights of the tax payers, such as, sales to registered dealers without payment of tax against declaration forms, claim of exemption from payment of tax on account of sales of goods suffering tax at first stage, sales of goods manufactured by the units holding exemption and other statutory deductions permissible under the general sales tax laws will be completely abrogated. In other words, every transaction involving purchase and sale of goods will attract the incidence of tax as the state proposes to provide for the same under section 3 of the Value Added Sales Tax Act except a few commodities to be enlisted in Schedule-B for being declared as exempted goods.

Now coming to the provisions of the proposed VAT Act, one finds that the treatment sought to be meted out to the assessees is most unreasonable, harsh and unfair so far as they relate to levy of interest on delayed payments and penalties for the specified offences are concerned. As far instance section 19 stipulates that the assessees defaulting in payment of tax as per returns for a period of three months will be liable to pay 2 per cent monthly interest while in the event of default of more than one quarter the liability sought to be imposed in the form of interest on them would be 4 per cent per month. No exception has been provided giving exemption from the harsh levy of interest in the cases where tax default is unintentional and beyond the control of an assessee.

In any event, demand of 4 per cent interest irrespective of the nature of default appears to be totally inequitable, irrational and unfair. Identical provisions have been proposed in section 28 which deals with post-assessment tax default and rate of interest leviable again is 2 per cent and 4 per cent in respect of one quarter and a period of more than three months respectively. Such kind of provisions do not lead to speedy recovery rather they create environment of unfriendliness and mistrust between the tax administrators and the tax payers.

What is really disturbing is that in addition to levy of 2 to 4 per cent interest proposed in section 28, penalty equivalent to 25 per cent of the amount of tax due is also provided in section 27 of the VAT Act. In section 34 which deals with offences relating to evasion of sales tax during roadside checking of the goods, a penalty equivalent to the 30 per cent of the value of the goods has been proposed irrespective of the quantum of evasion involved or the gravity of the offence.

How a person can be called upon to pay tax before a sale of goods attracting tax liability takes place in the state and that how far it would be fair to assign such task to the checking officer to decide upon the issue during summary-trial proceedings?

Another interesting feature is that penalty as proposed in section 41 of the VAT Act for successful evasion of sales tax is a sum thrice of the amount of tax evaded while penalty for unsuccessful attempt at evasion of sales tax as provided in section 34 can be even thirty-times of the tax leviable under the Act.

For illustration, in case of goods attracting 1 per cent, the penalty for an attempt to evade the tax is 30 per cent of the value of goods implying 30 per cent penal liability under section 34 while a person succeeding in evasion of tax on the same goods is visited with a penalty equivalent to the three times of tax payable under the provisions of the Act. What kind of impression is sought to be conveyed to the business community by introducing such irrational provisions of law?
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HFCL phones in Punjab within 6 months
Tribune News Service

Bathinda, October 20
Mr Kuldeep Kumar Kohli, Vice-President, HFCL, said today that within six months all cities of Punjab would be provided with the telephone connections.

Talking to mediapersons here, he said that so far telephone connections had been given in Jalandhar, Ludhiana, Chandigarh and Amritsar and about 1.5 lakh connections were available for sale.

HFCL is offering discount to bulk users, corporate customers and others. It has kept its pricing policy flexible and is offering telephones with wireless in local loop (WLL) technology.

HFCL has established optical fibre cable of 2,000 km route and by the end of current financial year, the network will be expanded.
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Interest cut on loans for dairy sector
Tribune News Service

Ludhiana, October 20
The Chief Minister, Mr Parkash Singh Badal, today announced the decrease of 1 per cent rate of interest on loans taken for the dairy sector.

Addressing a function organised by the Ludhiana District Cooperative Milk Producers Society at Milk Plant here for distributing bonus, the Chief Minister said agriculture is the backbone of economy of the country. He pointed out if the agricultural economy suffered a setback it would difficult for the state to be progressive.

Mr Badal asked the farmers to adopt dairying as it was more profitable. He said that for dairying, breed of animals should be good. He said that experts would be invited from Australia and other countries to develop dairying in the state.
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CORPORATE NEWS

Digital GlobalSoft net rises

Bangalore, October 20
The Digital GlobalSoft today announced a 93 per cent jump in revenue and 66 per cent increase in profits after tax for the quarter ending September 30.

The company in a release said the total revenue during the quarter increased to Rs 83.58 crore from Rs 43.33 crore earned the previous quarter. The profits after tax rose to a record Rs 22.29 crore.

Company Chairman Jheff Lynn, after the Board meeting, commented that the performance of the company demonstrated that it was well placed to deliver continuous growth over a long term period. “We will continue to move forward, building on our strengths and position ourselves for challenges and opportunities in the future”.

For the first half of the current fiscal, the company saw its revenue growing by 106 per cent to touch Rs 156.82 crore and net profit after tax witnessing a 116 per cent jump to a record Rs 41.49 crore compared with Rs 19.2 crore during the corresponding six months last year.

While offshore revenue contributed 32 per cent or Rs 25.57 crore of the total turnover for the last quarter, on site revenues increased by 109 per cent to Rs 55.16 crore.

Vesuvius nets 3.12 cr

Vesuvius India today reported a higher net profit of Rs 3.12 crore during the second quarter of 2001-2002 against Rs 2.07 crore last year.

The first half net in the current fiscal now stood higher at Rs 8.46 crore against Rs 6.65 crore last year, company sources said after a board meeting.

Net sales during the quarter increased substantially to Rs 21.62 crore from Rs 18.67 crore whereas other income stood higher at Rs 1.62 crore from Rs 0.98 crore.

Visualsoft Tech net down

Visualsoft Technologies has reported 69.05 per cent fall in the net profit of Rs 4.68 crore for the quarter ended September, 2001, compared to Rs 15.12 crore in the same period last fiscal.

The total income under review also declined to Rs 24.99 crore as against to Rs 31.64 crore in second quarter of 2000-01.

Bharat Forge net falls

Bharat Forge has reported an 80.88 per cent fall in the net profit at Rs 2.56 crore for the second quarter ended September, 2001, compared to Rs 13.39 crore in same period last fiscal.

The total income for the period under review also declined to Rs 100.2 crore as against Rs 118.58 crore in July-September, 2000.

Birla Corp net up

Birla Corporation yesterday, announced a net profit of Rs 6.11 crore for the second quarter of current fiscal against a net loss of Rs 9.74 crore in the corresponding quarter of previous fiscal. Agencies
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AVIATION NOTES

by K. R. Wadhwaney

Proper checking must for pilots

Despite criticism, the Airports Authority of India (AAI) has appointed a ‘retired’ pilot in its Flight Inspection Unit (FIU) on salary of Rs 30,000 a month. The decision has set a dangerous precedence and many pilots, some of them highly experienced, are up in arms.

What is medical status of the retired pilot? He should occupy co-pilot’s seat and fly with only senior pilots in command. But the AAI and the Directorate-General of Civil Aviation (GDCA) have surprised all by assigning the pilot the status of check-pilot. Should safety be compromised whatever may be his ‘political connections’?

According to aviation experts, the Flight Inspection Directorate (DGCA) and FIU (AAI) must always be in top gear so that no pilot gets flying permission without undergoing proper checks on instruments handling and route directions. Any lapse in this area can be suicidal.

India’s image in aviation scenario has not been very healthy. Any more lapse will be detrimental to the growth of aviation and tourism, which are passing through crisis following terrorist attacks in USA on September 11.

According to airline officials, incoming and outgoing traffic have been onsiderably hampered. Some airlines have closed operations on several routes which, according to them, are non-profit making. Indian Airlines has not been much affected, but Air India is suffering more losses than before. Many offices broad have either been closed or down-graded to effect economy. What has been done now should have been done many years ago. But Air India has been a ‘political hub’ and this is the reason for national carrier’s turbulent flight.

Air-India Security has achieved ISO (International Standards Organisation): 9001-2000 Certification. The new standards require organisations to view their system as a process and focus on customer service and human factors.

Sadly, customer service, of late, has been pushed into back-ground as Air India is reeling under losses. 

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LABOUR LAWS

by Praful R. Desai

Is order vitiated?

Q: Whether claim that order is vitiated as Inspector’s report was not given to him, tenable?

Ans: The M.P. High Court was facing this issue in Sudhir Nisheet Onkar v State of M.P. [2001-II-LLJ-838].

An inspection was carried out in the business premises of the petitioner to find out whether petitioner is following the requirement of the Minimum Wages Act. Since it was found that they were not, hence an application was made by the Inspector U/s. 20 (2) (3) of the Act before the authority. Eventually by impugned order dated 9.4.99, the authority found as a fact that petitioner is liable to pay a total sum of Rs 45,376 together with interest. It is this order which is under challenge.

The only submission of the petitioner was that the report of inspection was not given to him and hence, the whole order becomes void. The H.C. did not agree as the argument has no substance.

Indeed the application is filed by the Inspector U/s 20 (2) (3) before the authority, against the petitioner, the petitioner has a right to file a reply and lead evidence on facts. The authority then can decide the case on what is filed and evidence led by the parties.

In this case, there was full trial, evidence was led, petitioner participated in the inquiry and then it was held that petitioner has not made the payment to certain employees as per the Act, and hence direction was given to deposit the outstanding to enable it to be distributed to those for whom the direction is given.

The conclusion arrived at by the authority is based on factual inquiry. It was gone into the detail. The impugned order under running into six pages takes into account the case of each employee who were aggrieved and not paid due remmuneration. Petitioner has in fact no case against them. The submission that a copy of report was not given thus has no substance in view of the detailed inquiry conducted which did not really result in any prejudice. The report is only for initiating the proceedings. It is not a case that demand in question is sent directly on some report as such.

With the result, the H.C. held that there is no merit in this writ application and found no infirmity in the impugned order. Consequently, the application was dismissed.

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BIZ BRIEFS

Philips
Chandigarh, October 20
Philips India Limited, a subsidiary of the Netherlands based Royal Philips Electronics, has announced the introduction of the internationally acclaimed “wOOx” technology, with the launch of its FW V720 Mini Hi-Fi MP3 CD Playback Compatible System, for the first time in India. TNS

Tata Home Fin
Mumbai, October 20
Joining the trend set by the HDFC and ICICI Home Finance, Tata Home Finance today cut interest rate on fresh home loans by 25-50 basis points. The individual loans with tenure up to 10 years will carry 12 per cent interest rate and credit extended (up to 15 year) to purchase plot carry a rate of 12.25 per cent, the company said in a release here today. PTI

Electrolux
Chandigarh, October 20
Electrolux India has launched its annual, nationwide, festive consumer promotion for 2001 for all its brands in India. With a current market share of 30 per cent in the direct cool segment this year’s promotion offers a wide and existing range of assured gifts on the purchase of its products. TNS

Diamond festival
Amritsar, October 20
Tanishq today launched its diamond festival here. The senior managers sales and marketing Ms Y.L. Saroja said that this festival will showcase a wide range of diamond jewellery with price starting from Rs 600 onwards. The festival will continue till October 30. OC

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